Supreme Court of the United States
Brooke Group Ltd. v. Brown & Williamson Tobacco Corp.
June 21, 1993509 U.S. 209
Summary
Justice Kennedy, joined by Chief Justice Rehnquist and Justices O'Connor, Scalia, Souter, and Thomas, held that predatory pricing claims require below-cost pricing and a sufficient prospect of recouping the resulting losses through sustained supracompetitive prices. Recoupment through tacit oligopolistic coordination is not categorically excluded under the Robinson-Patman Act, but Liggett's evidence could not support a reasonable finding that Brown & Williamson had a reasonable prospect of achieving it. The Court therefore affirmed judgment for Brown & Williamson as a matter of law. Justice Stevens, joined by Justices White and Blackmun, dissented, agreeing that oligopolistic recoupment was legally cognizable but concluding that the evidence of predatory intent, sustained below-cost pricing, industry history, and subsequent price increases adequately supported the jury's finding of a reasonable possibility of competitive injury.
Holding
- Requirements for primary-line predatory price discrimination.. A plaintiff must prove prices below an appropriate measure of the defendant's costs and a reasonable prospect of recoupment through sustained supracompetitive pricing. Sherman Act predatory pricing claims likewise require below-cost pricing, but require a dangerous probability of recoupment.
- Availability of liability based on oligopolistic recoupment.. The Robinson-Patman Act does not categorically preclude a predatory price discrimination claim alleging recoupment through tacit oligopolistic coordination.
- Sufficiency of Liggett's evidence of competitive injury and recoupment.. Brown & Williamson was entitled to judgment as a matter of law because the evidence could not support a finding that its alleged scheme was likely to produce oligopolistic coordination and sustained supracompetitive generic cigarette prices sufficient for recoupment.
- Sufficiency of expert testimony unsupported by market facts.. Expert opinion cannot sustain a jury verdict when sufficient supporting facts are absent or indisputable record facts contradict or render the opinion unreasonable.
Docket 92-466
Cited authorities
- 15 U.S.C. § 2
- CA10
- 49 Stat. 1526
- 15 U.S.C. § 13
- 38 Stat. 730
- 15 U.S.C. § 13
- 77 Yale L.J.70
- 88 Harv. L. Rev. 697
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