The Ninth Circuit affirmed a jury verdict finding that an eye drops manufacturer unlawfully favored Costco and Sam’s Club over smaller wholesalers. LA Int’l Corp. v. Prestige Brands Holdings, Inc., 168 F.4th 608 (9th Cir. 2026).
Ten independent wholesalers alleged that Prestige Brands violated the Robinson‑Patman Act and California unfair competition laws by selling Clear Eyes Redness Relief eye drops to the big-box retailers at impermissibly lower prices through discounts and rebates not offered on proportionally equal terms. After a jury verdict for the wholesalers, the district court entered judgment, issued a permanent injunction, and awarded damages and more than $3 million in attorneys’ fees—which was less than half of what the plaintiffs sought. Prestige appealed the jury instructions, price calculations, and the injunction, while the wholesalers cross‑appealed the reduced fee award, arguing the court improperly discounted the attorney rates based on firm size.
The Ninth Circuit affirmed on liability, holding that the jury was properly instructed on Prestige’s functional-discount defense, that the wholesalers needed to show only a reasonable possibility of competitive injury (not substantial harm), and that Costco and Sam’s Club competed with the wholesalers under the typical chain‑store paradigm despite their membership model. The court also held that manufacturer‑funded consumer rebates must be included in calculating the favored buyer’s net price and that a permanent injunction was warranted given the ongoing risk of discriminatory pricing. In an additional win for the plaintiffs, the court vacated and remanded the fee award, ruling that the district court erred by reducing hourly rates based on the small size of the firm rather than current prevailing market rates for comparable antitrust work.
[View source.]
