Volvo Trucks North America, Inc. v. Reeder-Simco GMC, Inc., 546 U.S. 164 (2006)
Primary Holding
The Robinson-Patman Act does not apply to price discrimination claims involving specially ordered products sold through a customer-specific competitive bidding process unless there is evidence of discrimination between dealers competing to resell to the same retail customer.
In the case of Volvo Trucks North America, Inc. v. Reeder-Simco GMC, Inc., a truck dealer claimed that Volvo was unfairly giving better prices to other dealers, which hurt his business. The Supreme Court decided that the law protecting against price discrimination (the Robinson-Patman Act) doesn't apply to situations like this one, where trucks are specially ordered and sold through a bidding process. This means that while consumers can still benefit from fair pricing, they should be aware that this specific law won't help if a dealer feels they were treated unfairly in a competitive bidding situation.
AI-generated plain-language summary to help you understand this case
In Volvo Trucks North America, Inc. v. Reeder-Simco GMC, Inc., the dispute arose from allegations made by Reeder-Simco GMC, a Volvo dealer, against Volvo Trucks North America. Reeder claimed that its sales and profits suffered due to Volvo providing more favorable price concessions to competing dealers than to Reeder itself. This situation unfolded in the context of a competitive bidding process where retail customers specified their requirements and invited bids from various franchised dealers. Reeder argued that this pricing disparity constituted price discrimination under the Robinson-Patman Act and the Arkansas Franchise Practices Act. The procedural history of the case began when Reeder filed a lawsuit against Volvo, asserting claims under both federal and state law. The trial court ruled in favor of Reeder, and this decision was upheld on appeal. The case eventually reached the Supreme Court of the United States, which granted certiorari to address the specific question of whether a manufacturer could be held liable for price discrimination under the Robinson-Patman Act without evidence that the manufacturer discriminated between dealers competing for the same retail customer. The relevant background context includes the nature of the business relationship between Volvo and its dealers, such as Reeder, which began in 1995 with a franchise agreement that allowed for automatic extensions based on sales performance. The competitive bidding process was a standard practice in the industry, where dealers would seek discounts from Volvo based on customer specifications. The Supreme Court's review aimed to clarify the application of the Robinson-Patman Act in cases involving specially ordered products sold through such bidding processes, emphasizing that the Act primarily addresses competition among different purchasers for resale.
Whether a manufacturer may be held liable for price discrimination under the Robinson-Patman Act when it offers different wholesale prices to its dealers, absent a showing that the dealers were contemporaneously competing to resell to the same retail customer.
The judgment is reversed.
- Court
- Supreme Court
- Decision Date
- October 31, 2005
- Jurisdiction
- federal
- Case Type
- landmark
- Majority Author
- Ginsburg
- Damages Awarded
- N/A
- Data Quality
- high
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