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Wish List of Statutory Reforms Needed to Make the Robinson-Patman Act Workable

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The Robinson-Patman Act was enacted in 1936, as a replacement for an unworkable statute (part of the Clayton Act, enacted in 1914, together with the Federal Trade Commission Act). The old Clayton Act had failed to use appropriate language to prohibit the offensive conduct. Too many loopholes remained, enabling major corporations to discriminate in price with near impunity.

Clearly, the purpose of the 1936 Act was to stop price discrimination, but over the years the federal courts (at the continuing requests of counsel for the nation's major corporations) have engrafted a variety of requirements onto the Act to substantially reduce its effectiveness. The following changes should be made to the RPA, either by legislative action (but very unlikely) or by judicial decision (also unlikely):

1. Eliminate the judicially-engrafted requirement, or practical requirement, that an expert is required to prove the dollar amount of damages;
2. Eliminate the judicially-engrafted requirement that the damages cannot be automatically calculated by the dollar amount of the discrimination (i.e., the dollar amount of overcharge paid by the plaintiff);
3. Eliminate the judicially-engrafted requirement that indirect purchasers (e.g., independent retailers purchasing from a wholesaler instead of the manufacturer);
4. Eliminate the judicially-engrafted requirement that prohibits a class action from being brought to enforce the Robinson-Patman Act;
5. Eliminate the judicially-engrafted requirement that prohibits a short, concise, and simple statement of a plaintiff's complaint (such as the manufacturer charged plaintiff 40% more per unit than the manufacturer was charging defendant competitor (and let the statutory requirements be spelled out in the statute exclusively, without any court-engrafted additions, and automatically read into a plaintiff's Robinson-Patman Act complaint);
6. permit product lines to be pleaded as an alternative to specific items within a product line (to enable pricing formulas across a product line to be proven, and higher overall product line prices charged to the plaintiff, instead of requiring the plaintiff to prove tens of thousands of specific items within a product line (e.g., carburetor gasket for 1995 Chevrolet Impala, 1996, 1997, 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006; 1995 Chevrolet Malibu, etc.; 1995 Dodge Ram Van 1800, etc. One carburetor gasket for 10 years x 25 car/light truck manufacturers x 20 models per year per manufacturer equals (10x25x20 or) 5,000 different carburetor gaskets, requiring today that each one be proven to have a discriminatory price, that the plaintiff bought each one of the 5,000 within a week or two of the date that the major retailer purchased the same part. When this required approach is applied to all types of parts, the number of different auto parts requiring separate proof is in the millions, and wholly unworkable for anyone, including the plaintiff, the courts, and the defendant, which is exactly what the defendants requested and what the courts gave them through a variety of decisions since 1936 weakening the Robinson-Patman Act.
7. Eliminate the judicially-engrafted requirement that the dollar amount of discrimination is not a proper measure of damages and substitute an option by the plaintiff, excercised after a decision has been announced by the judge or jury, to elect whichever figure is higher (the amount of the discrimination or the lost profits resulting from the discrimination).

When the Federal Trade Commission enforced the RPA, these same issues were not raised, or if they were they were conveniently disregarded. The FTC saw discrimination and required the manufacturer to cease selling at discriminatory prices. However, since the FTC stopped enforcing the RPA, the burden has fallen on private litigants, and the defendants (with unlimited amounts of money to spend) have been able to spend a lot of money and obtain results in the courts that have severely crippled the RPA, by setting standards of pleading and proof that are too expensive for any plaintiff to follow (and very expensive for the defendant to defend, I should add). The plaintiffs, by the time they bring suit under the RPA, don't have enough money left to pay for the extensive legal services required, and the defendants don't mind spending whatever it takes to be able to continue with their multi-billion dollar program of profits through the practice of illegal price discrimination in violation of Sections 2(a), 2(d) and 2(e) of the RPA.