Sixth Circuit Rules that Competing End Users Can Bring Price Discrimination Claims

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In Williams v. Duke Energy International, Inc., No. 10-3604 (6th Cir. June 4, 2012), plaintiffs alleged that Duke paid English: Lightning over Las Cruces, New Mexico...unlawful and substantial electricity rebates to certain large customers, including General Motors, in exchange for the withdrawal by those customers of objections to a rate-stabilization plan that Duke was attempting to have approved by Ohio regulators.

The Sixth Circuit held that electricity is a commodity within the meaning of the Robinson-Patman Act.  It also found that plaintiffs had stated a price discrimination claim, because one subclass of plaintiffs, sellers of goods and services, competed in the same market as the favored customers and alleged that they lost profits as a result of the discriminatory rebates and the competitive advantage provided to favored customers.  “Defendants’ contention that the [Robinson-Patman Act] applies only to the resale of a purchased product is not consistent with case law.”

Usually price discrimination between and among end users is not problematic.  Williams is a reminder that such discrimination is usually not problematic because the end users aren’t in competition with each other.  Sometimes, however, they are.

*(Photo credit: Wikipedia)

 


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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