Reference no: EM131473298

Question: CROSSROADS COGENERATION CORP. v. ORANGE & ROCKLAND UTILITIES, INC., 159 F.3D 129 (3D CIR. 1998)

FACTS An electric cogenerator brought several antitrust allegations against a utility that had refused to purchase energy from it. One of the allegations involved price discrimination. Specifically, the cogenerator alleged that the utility had offered to sell electricity to the cogenerator's customers at a lower price than that offered by the cogenerator, that the reduced price was not offered to all customers, and that such an action violates the Robinson-Patman Act. DECISION In affirming the trial court's dismissal of the claim, the appellate court stated: The Robinson-Patman Act, which amended the Clayton Act, prohibits price discrimination "where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly." In order to state a claim under the Robinson-Patman Act, a plaintiff must allege facts to demonstrate that

(1) the defendant made at least two contemporary sales of the same commodity at different prices to different purchasers; and

(2) the effect of such discrimination was to injure competition.

The appellate court found that the plaintiff had not satisfied the first element because it had alleged only that the defendant had "offered" to sell electricity at a rate lower than that charged by the plaintiff, rather than actually engaging in a sale. As the court noted, "Merely offering lower prices to a customer does not state a price discrimination claim." Moreover, the plaintiff had not satisfied the second element either, as it had made no allegation of predatory conduct or other injury to competition, such as belowmarket prices. Merely approaching the plaintiff's customer does not constitute an antitrust violation.