Gas Distributor Failed to Show Actual Injury from Alleged Price Discrimination

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

In a long-running dispute between natural gas supplier Dynegy Marketing and Trade and a natural gas distributor, the U.S. Court of Appeals in Chicago today upheld summary judgment in favor of Dynegy on the distributor’s price discrimination counterclaim under Sec. 2 (a) of the Robinson-Patman Act.

The distributor failed to offer evidence that it suffered an actual injury as a result of Dynegy’s purported price discrimination to support treble damages, the court held.

The distributor alleged that the supplier charged it more for gas than it charged one of the distributor’s competitors. The distributor pointed to price differentials of up to ten cents per therm and contended that it was injured by them.

On appeal, the distributor argued that it had established a prima facie violation of the Robinson-Patman Act. The appellate court suggested that the distributor should have focused on establishing an actual injury resulting from the alleged price discrimination. Mere demonstration of a “competitive injury” was not sufficient to recover treble damages.

The distributor dedicated a mere five sentences to the issue of injury between its opening and reply briefs, the court noted. In those five sentences, the distributor contended that it had “identified evidence of lost sales and profits resulting from Dynegy’s price discrimination” and evidence of lost sales and profits resulting from the alleged price discrimination. However, there was no indication of what that evidence was, or how it tied to the supplier’s actions.

The August 4 decision in Dynegy Marketing and Trade v. Multiut Corporation, No. 10-2811, will appear at CCH 2011-2 Trade Cases ¶77,554.