Mathew Enterprise, Inc. v. Chrysler Group LLC

250 F. Supp. 3d 409, 2017 WL 1408010, 2017 U.S. Dist. LEXIS 60655
CourtDistrict Court, N.D. California
DecidedApril 20, 2017
DocketCase No. 13-cv-04236-BLF
StatusPublished
Cited by2 cases

This text of 250 F. Supp. 3d 409 (Mathew Enterprise, Inc. v. Chrysler Group LLC) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mathew Enterprise, Inc. v. Chrysler Group LLC, 250 F. Supp. 3d 409, 2017 WL 1408010, 2017 U.S. Dist. LEXIS 60655 (N.D. Cal. 2017).

Opinion

ORDER DENYING PLAINTIFF’S MOTION FOR NEW TRIAL

[Re: ECF 334]

BETH LABSON FREEMAN, United States District Judge

Plaintiff - Mathew Enterprise, Inc., a Chrysler, Jeep, Dodge, and Ram (“CJDR”) dealer operating at Stevens Creek CJDR (“Stevens Creek”) brought this action alleging that Defendant Chrysler Group LLC (“Chrysler”) offered incentive payments to other CJDR dealers in Northern California but not to Stevens Creek in violation of § 2(a) of the Robinson-Patman Price Discrimination Act (“RPA” or “Robinson-Patman Act”), 15 U.S.C. § 13.1 On October 13, 2Ó16, after a 7-day trial, the jury found in favor of Defendant Chrysler. Sée generally Verdict Form, ECF 381,

1. BACKGROUND

A. Statement of Facts

Chrysler manufactures and distributes. CJDR vehicles through a network of authorized dealers, including Stevens.Creek. Stipulation of Facts, Jury Instruction No. 13, ECF 329. Stevens Creek has been a CJDR dealer in San Jose, California since 2006, before alleged competitors San Lean-dro CJDR (“San Leandro”) and Fremont CJDR (“Fremont”) entered the market; See Tr. 177:4-9, ECF345 (testimony of M. Zaherí).

.Chrysler has a yariety of incentive programs, which provide discounts or rebates to dealers or consumers. Id. at 180:4-16 (testimony of M. Zaherí). One such program, at issue in this cáse, is the Volume Growth Program (“VGP”), which generally provides dealers with incentives if they meet certain sales' objectives' in' a given month. Id: at 3Í2:1—11 (testimony of S. Begley). In this action, Stevens Creek claimed that for a period of time from July 2012 through' June 2013, Chrysler violated the Robinson-Patman Act by engaging in price discrimination against' Stevens Creek through the manner in which Chrysler set Stevens Creek’s monthly sales objectives to qualify for. incentive payments under Chrysler’s VGP. Jury Instruction No'. 2, EF 329.

During the time period in question, Stevens Creek was the largest CJDR dealer in the Bay Area. Tr. 194:10-11, ECF 345 (testimony of M. Zaherí). Stevens Creek brought this litigation because .of a new entrant, Fremont, which had significantly fewer sales than did Stevens Creek but still received the incentives.2 Id. at 194:11— 12,199:13-15,199:22-200:7.

[413]*413At trial, the uncontroverted evidence showed that Chrysler’s formula for existing dealers’ sales objectives was based on each dealer’s prior year’s actual sales plus a percentage increase in sales required to earn the incentive payments. Id. at 181:11— 24 (testimony of M. Zaherí); id. at 448:19-21, EOF 346 (testimony of M. Thompson). This formula was applied to Stevens Creek and all other existing dealers during the relevant time. Stipulation of Facts, Jury Instruction No. 13.

For Fremont, a new dealership without a prior year’s track record, no actual sales data was available. Chrysler allowed Fremont to participate in the incentive program by developing sales objectives generally, based on Fremont’s “planning potential,” or projected sales. Id. at 449:10-25 (testimony of M. Thompson). That formula was in place for 6 months, and then replaced with Fremont’s actual prior sales data. Id. at 458:7-14 (testimony of M, Thompson). Stevens Creek claimed that it was entitled to a modified sales objective because Fremont would take sales away from it since the two dealers were 14 miles apart and Stevens Creek’s prior year’s sales data reflected high volume absent competition from Fremont. Id. at 199:2-25, 200:1-7, ECF 345 (testimony of M. Zaherí).

B. The Robinson-Patman Act

Section 2, “when originally enacted as part of the Clayton Act- in 1914, was born of a desire by Congress to curb the use by financially powerful corporations of localized price-cutting tactics which had gravely impaired the competitive position of other sellers.” FTC v. Anheuser-Busch, Inc., 363 U.S. 536, 543 & n.6, 80 S.Ct. 1267, 4 L.Ed.2d 1385 (1960) (citations omitted). By enacting the Robinson-Patman Act, “Congress sought to target the perceived harm to competition occasioned by powerful -buyers, rather than' sellers,” Volvo Trucks N. Am., Inc. v. Reeder-Simco GMC, Inc., 546 U.S. 164, 175, 126 S.Ct. 860, 163 L.Ed.2d 663 (2006). The Act provides, in relevant part:

It shall be unlawful for any person engaged in commerce .,, 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). Thus, in. order to establish a violation of the RPA, a plaintiff has the burden of proving: (1) sales were made in interstate commerce; (2) the product sold was of the same grade and quality as that sold to other buyers; (3) the seller discriminated in price between the two buyers; and (4) that the discrimination had a prohibited effect on competition. See generally Volvo Trucks, 546 U.S. 164, 126 S.Ct. 860, 163 L.Ed.2d 663;Gen. Auto Parts Co. v. Genuine Parts Co., No. CIV 04-379, 2007 WL 704121, at *3 (D. Idaho Mar. 5, 2007) (citing 15 U.S.C. § 13(a)).. The Supreme Court has explained “that Robinson-Patman does not ban all price differences charged to different purchasers, of commodities of like grade and quality; rather, the Act proscribes . price discrimination only to the extent that-it threatens to injure competi[414]*414tion.” Volvo Trucks, 546 U.S. at 176, 126 S.Ct. 860 (citing Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 220, 113 S.Ct. 2578, 125 L.Ed.2d 168 (1993)) (internal quotation marks omitted).

At issue here is the judicially created doctrine of “functional availability.” “According to this court-created rule, the plaintiff in a Robinson-Patman Act suit cannot recover damages for lower prices paid by its competitors to the defendant if those same prices were available to the plaintiff from a practical standpoint and on equal terms with its competitors.” See Smith Wholesale Co., Inc. v. R.J. Reynolds Tobacco Co., 477 F.3d 854, 866 (6th Cir. 2007) (citation and internal quotation marks omitted); see also Gen. Auto Parts, 2007 WL 704121, at *3.

C. The Trial and This Motion

On September 26, 2016, a jury was empaneled, and the trial proceeded for 7 days.

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Bluebook (online)
250 F. Supp. 3d 409, 2017 WL 1408010, 2017 U.S. Dist. LEXIS 60655, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mathew-enterprise-inc-v-chrysler-group-llc-cand-2017.