United States Court of Appeals
For the First Circuit
No. 04-1922
ABLE SALES COMPANY, INC.,
Plaintiff, Appellee,
v.
COMPAÑÍA DE AZÚCAR DE PUERTO RICO,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Juan M. Pérez-Giménez, U.S. District Judge]
Before
Selya and Lynch, Circuit Judges.*
Gina Ismalia Gutiérrez-Galang, with whom Law Office Pedro E.
Ortiz Álvarez was on brief, for appellant.
Carlos A. Rodríguez Vidal, with whom Myriam Fernández
González, and Goldman Antonetti & Cordova, P.S.C. were on brief,
for appellee.
May 6, 2005
*
Circuit Judge Torruella participated in oral argument in this
case, but has since recused himself and has not participated in the
decision of the case. The remaining two panelists, pursuant to 28
U.S.C. § 46(d), issue this opinion.
LYNCH, Circuit Judge. This case presents the issue of
the meaning of the jurisdictional "in commerce" requirement of
§ 2(a) of the Robinson-Patman Anti-Discrimination Act, 15 U.S.C.
§ 13.
Judgment was entered under the Act for Able Sales
("Able") and against Compañía de Azúcar de Puerto Rico ("CAPR"), a
corporation that is primarily engaged in the refining of raw sugar
and the subsequent sale of this sugar in the local Puerto Rico
market. CAPR argues on appeal that the district court did not have
subject matter jurisdiction to entertain the suit brought by Able
because the "in commerce" requirement was not met. Able is a
corporation primarily engaged in the importation and distribution
of refined sugar in the local Puerto Rico market and a competitor
of CAPR.
Specifically, CAPR argues that its sale of refined sugar
to various local wholesalers and retailers in Puerto Rico does not
satisfy the "in commerce" requirement of the statute. Able
counters that any of three separate transactions -- (1) CAPR's
importation of raw sugar into Puerto Rico for refinement and sale;
(2) Able's importation of refined sugar from Florida; and/or (3)
CAPR's sale of refined sugar to a local company which planned to
export the sugar -- independently satisfy this requirement and thus
provide a basis for subject matter jurisdiction in the district
court.
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The district court agreed and after a two day bench trial
found that CAPR had violated § 2(a) of the Robinson-Patman Act and
awarded $1,949,259.00 in damages to Able.
We hold that the transactions do not satisfy the "in
commerce" requirement, reverse the judgment, and remand with
directions that judgment be entered for CAPR.1
I.
We briefly recount the facts, largely as found by the
district court. CAPR does not dispute the district court's
characterization of the facts.
Until December of 2000, the Puerto Rico Sugar Corporation
("PRSC"), a public corporation created by a Resolution of the Board
of Governors of the Puerto Rico Land Authority in 1973, was the
sole supplier of "Snow White" brand refined sugar in Puerto Rico.
The Puerto Rico Department of Consumer Affairs ("DACO") established
regulations which required PRSC to sell all of its two and five
pound bags of refined sugar to ten exclusive distributors, one of
which was Able. These distributors then sold the bags to
wholesalers and retailers; DACO fixed the maximum prices for sugar
that the distributors could offer.
In January 2001, the Puerto Rico Legislature moved away
from governmental ownership and privatized the local sugar
1
Because we set aside the judgment awarded to Able, we do not
address CAPR's second argument on appeal: that the district court
erred in the calculation of damages.
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industry. See 5 P.R. Laws Ann. § 430(a). It transferred the
operations and assets of the Mercedita Refinery to CAPR. Until
September 2001, CAPR sold the existing inventory of refined sugar
from the refinery to the distributors, including Able, at the price
of $43.23 per hundredweight, as established by DACO and as
previously offered by the PRSC.
By September 2001, CAPR had sold all the Mercedita
inventory and was unable to supply the local demand for refined
sugar. Due to the lack of refined sugar, Able and another
distributor, in agreement with DACO, imported refined sugar
required for local consumption, with the expectation that CAPR
would later import raw sugar, refine it, and resume the previous
distributor system. Because the cost of the imported refined sugar
was higher than the price established by DACO, DACO issued an order
which allowed the importers to sell the refined sugar to other
distributors and wholesalers at a higher price than had been
previously permitted by regulation. The new, higher price for
distributors was $46.10 per hundredweight; distributors sold to
wholesalers at the price of $48.54 per hundredweight. This order
was vacated in January of 2002, and the lower prices were
reinstated.
CAPR, having sold all of its inventory of refined sugar,
needed a new source of supply if it wished to continue in the
business. It chose to import raw sugar to refine. In a one-time
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purchase, CAPR imported approximately 12,000 tons of raw sugar into
Puerto Rico which it refined at its Mercedita facility. There is
no evidence of any further importation of raw sugar by CAPR. Able
attempted to buy refined sugar from CAPR (apparently refined from
this one-time importation of raw sugar) at the distributors' price
($43.23 per hundredweight), but on December 26, 2001, CAPR notified
Able that it was cutting distributors from its sales strategy and
would no longer be selling to distributors. Instead, CAPR would be
selling directly to wholesalers and retailers: if Able wanted to
buy CAPR's refined sugar, it could do so at the wholesalers' price
(not the lower distributors' price). Unfortunately for Able, this
price was also the maximum price that Able could, by law, sell to
its clients.
Thus CAPR moved from being a supplier to Able, which was
a distributor, to being a direct competitor to Able, with CAPR also
acting as a distributor and selling directly to wholesalers. Both
CAPR and Able sold directly to wholesalers and retailers, all of
which were local Puerto Rico entities. One wholesaler, Tropical,
purchased refined sugar from CAPR for export.
In an effort to make a profit and compete with CAPR, from
January to February of 2002, Able imported from Florida refined
sugar at a cost of $44.63 per hundredweight under the trademark
"Florida Crystal." In conformance with DACO guidelines, Able
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anticipated selling the sugar to wholesale clients at $47.54 per
hundredweight.
Shortly thereafter, CAPR reduced the price of the sugar
it had refined for sale to wholesalers from $47.54 to $45.10 per
hundredweight. This was the beginning of the alleged period of
predatory pricing. Able was forced to reduce its price as well to
compete with CAPR.
At the end of April 2002, CAPR again reduced its price to
wholesalers, this time to $43.30 per hundredweight. This lower
price was not enough to cover CAPR's costs, which consisted of the
costs of refining the raw sugar, the sale of the now-refined sugar,
and the excise tax of $14.00 per hundredweight which CAPR was
obligated to pay to the Puerto Rico Department of the Treasury.
Throughout the time that CAPR was lowering its prices, it did not
pay this excise tax as required by law.
Despite Able's efforts to compete with CAPR, it lost a
number of its clients and its market share was reduced by between
forty and fifty percent. The district court found that other
distributors were eliminated from the market as a result of CAPR's
pricing.2 In September 2002, CAPR exhausted its inventories and
2
CAPR does point out that Able's chairman admitted at trial
that the other two and five pound bag sugar distributors ceased
operations on January 1, 2002, prior to the alleged predatory
pricing period from February of 2002 to September of 2002. The
district court's finding, however, has no bearing on whether or not
there is subject matter jurisdiction; we merely note the
discrepancy.
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did not purchase any additional raw sugar. There is no further
evidence in the record as to whether CAPR has remained in the
business of selling refined sugar to wholesalers after it had
exhausted the inventory of sugar it had refined from the one-time
import of the 12,000 tons of raw sugar.
Able filed the verified complaint on May 22, 2002
averring its version of the facts and alleging that CAPR engaged in
"predatory pricing" in violation of the Robinson-Patman Act, 15
U.S.C. § 13. Specifically, Able stated:
Defendant's practice consists of distributing
sugar at prices lower than the costs of its
inventory. The objective of said pricing
structure is to eliminate Able Sales from the
market, to allow CAPR to prevail upon the
market as the sole sugar distributor in Puerto
Rico. . . . [This] practice will then enable
[CAPR] to recoup the losses sustained during
its current scheme of predatory pricing.
On June 5, 2002, the summons, a copy of the verified
complaint, and Able's first set of interrogatories and requests for
production were served on CAPR. On August 9, 2002, after two
extensions of time, CAPR filed an answer. After CAPR's continual
failure to comply with discovery orders, the district court,
pursuant to an Order of October 28, 2003, struck CAPR's answer to
the complaint and its affirmative defenses. CAPR does not appeal
this order.
On November 12 and 13, 2003, a bench trial was held
before the district judge. At trial, Able presented documentary
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evidence, testimony of the Chairman of the Board of Able Sales, and
an expert who testified as to Able's damages. CAPR was given an
opportunity to present evidence and to cross examine witnesses.
CAPR declined to present evidence, but did cross examine witnesses.
Having stricken the defendant's answers and affirmative
defenses from the record, the court determined that CAPR engaged in
primary line price discrimination in contravention of the Robinson-
Patman Act. The court stated, "this case clearly entails a
primary-line price discrimination, in which CAPR imported raw sugar
from sources outside of Puerto Rico, refined it at the Mercedita
Refinery, and sold the refined sugar at below cost so as to
eliminate its competitors."
CAPR challenged the court's subject matter jurisdiction,
contending the "in commerce" requirement was not satisfied. The
court found that it did have subject matter jurisdiction based on
either CAPR's importation of raw sugar which it found remained in
the flow of commerce or Able's importation of refined sugar.3
II.
Price discrimination is made unlawful by § 2(a) of the
Clayton Act, as amended by the Robinson-Patman Act, which provides:
It shall be unlawful for any person engaged in
commerce, in the course of such commerce,
3
In a footnote, the district court referenced the transaction
between Tropical and CAPR as a basis for subject matter
jurisdiction and stated "CAPR did sell refined sugar for
exportation."
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either directly or indirectly, to discriminate
in price between different purchasers of
commodities of like grade and quality . . .
where the effect of such discrimination may be
substantially to lessen competition or tend to
create a monopoly in any line of commerce, or
to injure, destroy, or prevent competition
with any person who either grants or knowingly
receives the benefit of such discrimination,
or with customers of either of them . . . .
15 U.S.C. § 13(a); see Brooke Group LTD v. Brown & Williamson
Tobacco Corp., 509 U.S. 209, 219-20 (1993). The statute
encompasses two different types of violations: primary line
violations and secondary line violations. Primary line violations
are directed at injuring competition with the discriminating
seller's direct competitors, whereas secondary line violations are
directed at injuring competition among the discriminating seller's
customers. See Coastal Fuels of P.R., Inc. v. Caribbean Petroleum
Corp., 79 F.3d 182, 188 (1st Cir. 1996); IA Areeda & Hovenkamp,
Antitrust Law ¶ 267c, at 329-30 (2d ed. 2000). In this case, the
district court found that CAPR had committed a primary line
violation by engaging in predatory pricing.4
4
In general, primary line violations involve a claim by the
injured party that "[a] business rival has priced its products in
an unfair manner with an object to eliminate or retard competition
and thereby gain and exercise control over prices in the relevant
market." Brooke Group, 509 U.S. at 222; see also III Areeda &
Hovenkamp, Antitrust Law ¶ 745e, at 477 (2d ed. 2002). We express
no view as to whether the district court correctly determined that
the facts alleged by Able establish a primary line violation of §
2(a) of the Robinson-Patman Act. This issue has not been raised on
appeal. The only question before us is whether the "in commerce"
requirement of the Robinson-Patman Act is satisfied.
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Whether the district court has subject matter
jurisdiction over these types of violations is largely determined
by the Supreme Court's decision construing § 2(a) of the Robinson-
Patman Act, 15 U.S.C. § 13(a), in Gulf Oil Corporation v. Copp
Paving Company, Inc., 419 U.S. 186 (1974). Gulf Oil, which
involved a secondary line violation, held, as all parties agree,
that § 2(a) of the Robinson-Patman Act did not extend jurisdiction
to the full extent of Congress's constitutional power granted by
the Commerce Clause. Id. at 199-200. The Court stated:
[T]he distinct "in commerce" language . . .
appears to denote only persons or activities
within the flow of interstate commerce . . . .
[T]he jurisdictional requirements of these
provisions cannot be satisfied merely by
showing that allegedly anticompetitive
acquisitions and activities affect commerce.
Id. at 195. To satisfy the "in commerce" requirement, one of the
discriminatory sales must cross a state line. See Id. at 195;
Coastal Fuels, 79 F.3d at 190. As this requirement is
jurisdictional, see Gulf Oil, 419 U.S. at 195, the burden to prove
the interstate character of the sales is on the party asserting
subject matter jurisdiction. See Bull HN Info. Sys., Inc. v.
Hutson, 229 F.3d 321, 328 (1st Cir. 2000) (the party asserting
jurisdiction has the burden of proving it).
In an effort to meet this burden, Able points to three
transactions which it argues satisfy the "in commerce" requirement
of § 2(a): (1) CAPR's importation of raw sugar into Puerto Rico
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for refinement and sale; (2) Able's importation of refined sugar
from Florida; and (3) CAPR's sale of refined sugar to Tropical with
the knowledge that Tropical planned to export this sugar.
A. Focus on Plaintiff's Activities
We first reject Able's argument that the "in commerce"
element may be satisfied by reviewing the interstate activities of
the plaintiff, whether or not the defendant has acted "in
commerce." Specifically, Able argues that it imports refined sugar
from Florida for sale in Puerto Rico, and this transaction crosses
state lines. We disagree that the plaintiff's sales can be used to
satisfy the "in commerce" requirement of § 2(a) of the Robinson-
Patman Act.
Following the language of the statute, the Supreme Court
in Gulf Oil held5 that in order to satisfy the "in commerce"
requirement of the § 2(a) of the Robinson-Patman Act, the
defendant's activities must satisfy the following test:
Unless it appears . . . that the [defendant's]
alleged exclusive-dealing arrangements and
discriminatory sales occur in the course of
its interstate activities . . . and . . .
that at least one of [defendant's] allegedly
discriminatory sales was made in interstate
commerce . . . , plaintiff's claims must fail.
5
We have excluded language concerning the requirements as to
§ 7 of the Clayton Act, as no § 7 allegations are made here.
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Gulf Oil, 419 U.S. at 195.6 In other words, "if one of the
discriminatory sales is 'in commerce,' the seller is engaged in
commerce and discrimination has occurred in the course thereof."
IA Areeda and Hovenkamp, Antitrust Law ¶ 267c, at 329 (2d ed.
2000). The activities which must meet the in commerce requirements
are the sales by the defendant seller.
A focus on the defendant's sales is consistent with
Congressional purpose. As the Supreme Court stated in Standard Oil
Company v. FTC, 340 U.S. 231 (1951), "the recognized purpose of the
Robinson-Patman Act [is] to reach the operations of large
interstate businesses in competition with small local concerns."
Id. at 237-38. Congress was concerned with predatory pricing by
defendants who engaged in interstate commerce, not by those who
acted purely locally. See Gulf Oil, 419 U.S. at 200-01 (reading
the clear language of § 2 to exclude from the reach of the statute
6
To support the finding that Able's transactions could satisfy
the "in commerce" requirement, the district court erroneously read
language in Gulf Oil that states, "§ 2(a) applies where at least
one of the two transactions which, when compared, generate a
discrimination . . . crosses a state line." Gulf Oil, 419 U.S. at
200 (internal citation and quotation marks omitted). Gulf Oil
involved a secondary line violation which requires, among other
things, the discriminating seller to sell to one buyer (the favored
buyer) at a lower price than to another buyer (the disfavored
buyer). The two transactions to be compared, as this court's
opinion in Coastal Fuels explained, are "either the sale to the
favored buyer or the sale to the buyer allegedly discriminated
against." Coastal Fuels, 79 F.3d at 189. In either a primary line
violation or a secondary line violation, it is the sales by the
defendant which are the focus.
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"a multitude of local activities that hitherto have been left to
state and local regulation").
To impose liability on a defendant seller for activities
within the sole control of a plaintiff competitor would itself be
anti-competitive, and contrary to the purposes of the Robinson-
Patman Act. A defendant seller must be able to know when it is
subject to Robinson-Patman Act liability in order to conform its
behavior to the law. We focus therefore only on the defendant's
behavior. We reject the argument that the sales activity of the
plaintiff, Able's importation of refined sugar from Florida, can be
the basis for satisfying the "in commerce" jurisdictional
requirement of the statute.
B. Defendant's Alleged Interstate Transactions
1. CAPR's Importation of Raw Sugar Across State Lines
Able argues that even though CAPR's sales of refined
sugar did not cross state lines, these sales satisfy the "in
commerce" requirement because CAPR imported 12,000 tons of raw
sugar,7 and CAPR's refinement in Puerto Rico of this imported sugar
did not remove the sugar from the "flow of commerce." This is an
aspect of the doctrine concerned with the "flow backward into
7
CAPR suggests in its reply brief that the one-time
importation of raw sugar cannot satisfy the "in commerce"
requirement of § 2(a) because CAPR did not regularly import
products from across state lines and there was not a "constant
flow" of raw sugar into Puerto Rico. We express no view on the
validity of this argument.
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interstate transactions in raw materials." IA Areeda & Hovenkamp,
Antitrust Law ¶ 267b, at 324 (2d ed. 2000).
Whatever the present contours of the in the "flow of
commerce" doctrine under the Robinson-Patman Act, it certainly does
not apply when there are material differences between the product
imported and the product sold after undergoing processing. The
fact that the raw materials were imported into Puerto Rico does not
necessarily mean that the "in commerce" requirement of § 2(a) of
the Robinson-Patman Act is met. See Belliston v. Texaco, Inc., 455
F.2d 175, 180 (5th Cir. 1972) (The production of gasoline from
crude oil is a "highly complex process" which interrupts the flow
of commerce). Indeed the "flow of commerce" ends when these raw
materials or goods are "transformed in a material way." See IA
Areeda & Hovenkamp, Antitrust Law ¶ 267b, at 324 (2d ed. 2000).
CAPR argues that the imported raw sugar was transformed
in such a material way when it underwent refining into refined
sugar. CAPR states that the raw sugar was "extensively processed
within Puerto Rico, resulting in an alteration of the nature of the
product" and that the refinement process "extract[s] molasses and
other non-sugar minerals [from] the raw sugar."
We agree that the refinement of raw sugar into refined
sugar has transformed this product so that it cannot be fairly said
to continue to be in the flow of commerce. This case is
distinguishable from cases where courts have found the flow of
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commerce was not interrupted. This is not a case in which the same
product was temporarily stored in the state of ultimate sale. See,
e.g., Standard Oil Co., 340 U.S. at 237-38 (temporary storage of
gasoline does not deprive the gasoline of its interstate
characteristic). Nor is it a case in which the resulting sold
product was essentially the same as the imported product. See,
e.g., Dean Milk Co. v. FTC, 395 F.2d 696, 715 (7th Cir. 1968);
Foremost Dairies, Inc. v. FTC, 348 F.2d 674, 678 (5th Cir. 1965)
(both holding that the processing of milk imported from out of
state before local resale is not enough to remove the milk from the
flow of commerce).
Despite stating that the refinement of sugar involves
"negligible processing" and that the processes involved in this
case are similar to those involved in the processing of milk as in
the examples given above, the plaintiff does not seriously dispute
CAPR's claim as to the nature of the refinement process.8
Accordingly Able has not met its burden of showing that the
imported raw sugar remained in the flow of commerce. This
transaction does not satisfy the "in commerce" requirement.
8
The district court did not make a specific finding as to
whether the refinement process interrupted the flow of commerce.
In response to CAPR's argument that it did, the district court
stated, "even if the CAPR's refined sugar is not considered to be
in the flow of commerce, Able Sales' refined sugar, which does not
undergo any processing, is undeniably within the flow of commerce."
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2. CAPR's Sale to Tropical for Export
In contrast with Able's previous argument concerned with
backward interstate movement of materials, Able makes a forward
flow argument as its final argument. See IA Areeda & Hovenkamp,
Antitrust Law ¶ 267b, at 324 (2d ed. 2000). Whether CAPR's sale of
sugar to Tropical, knowing that Tropical planned to export the
sugar, can satisfy the "in commerce" requirement is a more complex
question.
From the 2002 sales summary, it appears that CAPR
apparently made six sales of an indeterminate number of two pound
bags of refined sugar and four sales of five pound bags of refined
sugar to Tropical in 2002. Two of those sales were in the $43 to
$46 range per hundredweight, and the rest were in the $30 range.
A notation next to the sales to Tropical suggests that those sales
received a special discount because Tropical intended to export the
sugar, presumably outside of Puerto Rico. These sales were likely
discounted because CAPR does not have to pay an excise tax on such
sales, as explained by Able's counsel.9
We take Able's argument to be a permutation of the "flow
of commerce" theory: the initial sale between CAPR and Able took
9
We do not understand Able to say it could not buy from CAPR
at the same price Tropical did for sugar, whether intended for
export or not. Nor does Able say that it and Tropical compete with
each other to export sugar from Puerto Rico. We understand Able's
argument to be based on an overall theory of predatory pricing,
that CAPR artificially lowered its price in order to drive Able,
its competitor in the distribution of sugar, out of business.
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place intrastate, but the goods remained in the "flow of commerce"
because they were to be exported by Tropical and CAPR's knowledge
of that puts the goods into the flow of commerce. The interstate
activity of the buyer is therefore attributed back to CAPR, the
intrastate seller, under the theory.
This forward flow theory may be arguable on certain
facts. Cases under statutes based on the full scope of Congress'
constitutional commerce power over certain types of intrastate
transactions have suggested "[s]o far as the [intrastate] sales are
for shipment to other States or to foreign countries, it is idle to
contend that they are not sales in interstate or foreign commerce
and subject to congressional regulation." Currin v. Wallace, 306
U.S. 1, 10 (1939) (challenging the Tobacco Inspection Act of 1935);
see also United States v. Rock Royal Co-Op., 307 U.S. 533, 568-69
(1939) (challenging the Secretary's regulation of the handling of
milk in the New York metropolitan area under the Agricultural
Marketing Agreement Act of 1937). But of course, the scope of the
"in commerce" clause of the Robinson-Patman Act is less than the
constitutional reach.
While Gulf Oil held that a mere nexus to interstate
commerce was insufficient, it did not decide whether some
intermediate definitions of "in commerce" to capture the "practical
consequences" of a discriminatory sale on national markets might be
within Congressional intent. Gulf Oil, 419 U.S. at 199. Indeed
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the Court specifically noted the absence of two claims: that the
defendant made interstate sales or was "otherwise directly involved
in national markets" or that the "local market . . . is an integral
part of the interstate market in other component commodities or
products." Id. at 195-96.
But the record before us does not establish and indeed
the plaintiff does not argue that either of those situations apply.
Ultimately, Able fails to prove that the "flow of commerce" test is
satisfied. The only evidence that Able points to concerning the
sale from CAPR to Tropical is a sales summary of the sale to
Tropical which has the notation, "[s]pecial price for exportation
of sugar, plus taxes," and a statement made by Able's trial counsel
to the district court that "[a]mong the sales that [CAPR] was able
to execute during that year, one of their clients, Tropical
Distributors, was sold sugar at a special price because he was
going to export sugar."
For several reasons this evidence is insufficient to
prove that the sale was "in commerce." The flow of commerce is
thought to end when the goods "are stored in a [seller's] warehouse
or storage facility for general inventory purposes," subject to an
exception for when the goods are purchased and then stored in the
seller's warehouse in response to a particular customer's needs.
See Zoslaw v. MCA Distributing Corp., 693 F.2d 870, 878 (9th Cir.
1982). That exception does not apply here. There is no evidence
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that CAPR's sale to Tropical was anything other than final, with
Tropical taking possession of the sugar. Indeed, there is no
evidence whether Tropical actually ever exported the sugar. But
what Tropical, an independent company, intended to do with the
sugar, in these circumstances, is not germane to the "in commerce"
inquiry.
While there is evidence of negotiation over price and
that CAPR expected that Tropical would export the sugar, there is
no evidence that CAPR exercised any control of the management,
business, or distribution decisions of Tropical. In cases where
the "flow of commerce" doctrine applied, the same entity has
engaged in both the intrastate and interstate transaction. See,
e.g., Standard Oil, 340 U.S. at 237 (intrastate sale was in the
flow of commerce; both the intrastate and interstate transactions
were conducted by the same entity); Foremost Dairies, 348 F.2d at
676-77 (same). And courts have held that to the extent that the
purchasers are independent distributors in their pricing and
marketing decisions, the "flow of commerce" is interrupted by the
sale of the product. See Zoslaw, 693 F.2d at 880; cf., Acme
Refrigeration of Baton Rouge, Inc. v. Whirlpool Corp., 785 F.2d
1240, 1243-44 (5th Cir. 1986) (a subsidiary's sales could not be
imputed to its parent company if the parent company did not
"control" the subsidiary).
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In a situation where a wholly independent buyer purchases
from the defendant seller, and there is no evidence of collusion or
control between the seller and the independent buyer,10 the flow of
commerce has ended and the intrastate seller cannot be held to have
been made "in commerce" as a result of the subsequent interstate
sale made by the independent buyer.
III.
We hold that the district court did not have subject
matter jurisdiction over this suit as CAPR's allegedly
discriminatory sales were not "in commerce." We reverse the
decision of the district court, set aside the award of damages
against CAPR, and remand with instructions to dismiss the case for
lack of jurisdiction. Costs are awarded to CAPR.
10
Areeda also warns against reliance on a party's intentions,
as opposed to actions, except to cover the situations of "evasions
calculated to keep illegal activities entirely intrastate while
employing the channels of interstate commerce." IA Areeda &
Hovenkamp, Antitrust Law ¶ 267 b, at 324-327 (2d ed. 2000).
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