Texaco, Inc. v. Hasbrouck

496 U.S. 543 (1990)

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Texaco, Inc. v. Hasbrouck

United States Supreme Court
496 U.S. 543 (1990)

  • Written by Heather Whittemore, JD

Facts

Texaco, Inc. (defendant) sold gasoline to independent Texaco retailers in Spokane, Washington, at retail prices and to two distributors, Gull Oil Company and Dompier Oil Company (collectively, the distributors) at discounted prices. The distributors supplied gasoline to other service stations and directly to consumers. Because the distributors received a discount on gasoline from Texaco, the distributors and the service stations that were supplied by the distributors were able to sell gasoline to consumers at lower prices than those offered by the independent retailers. Between 1972 and 1981, the distributors increased their sales of gasoline while the sales made by the independent retailers declined. Twelve independent Texaco retailers (the independent retailers) (plaintiffs) sued Texaco in federal district court under § 2(a) of the Robinson-Patman Act, alleging that Texaco engaged in illegal price discrimination. Texaco defended its practices, arguing that the distributors were wholesalers and that the lower prices Texaco charged the distributors were functional discounts that were justified under the Robinson-Patman Act. Texaco defined a functional discount as a discount given to a purchaser based on the services performed by the purchaser for the seller. At trial, a jury found that Texaco had violated § 2(a). The court of appeals remanded the case for a new trial. At the second trial, the district court did not allow Texaco to present its defense that the functional discounts were justified. The jury again found that Texaco had violated § 2(a). The court of appeals affirmed, and Texaco appealed.

Rule of Law

Issue

Holding and Reasoning (Stevens, J.)

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