Uniroyal, Inc. v. Hoff and Thames, Inc.

511 F. Supp. 1060 (1981)

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Uniroyal, Inc. v. Hoff and Thames, Inc.

United States District Court for the Southern District of Mississippi
511 F. Supp. 1060 (1981)

Facts

Hoff and Thames, Inc., d/b/a Case Tire and Supply Company (Case) (plaintiff), was in the business of buying tires for resale. One of its competitors was Otasco. Both Case and Otasco purchased tires from Uniroyal, Inc. (defendant). Otasco was much larger than Case and operated similarly to a wholesaler. Otasco would purchase tires from Uniroyal in bulk, store them in warehouses, and oversee distribution of them to its local dealers. Case, by contrast, did not have as large of a distribution. Case brought suit against Uniroyal under the Robinson-Patman Act, alleging that Uniroyal engaged in price discrimination by selling its tires to Otasco for a price lower than the price it gave to Case. Uniroyal, in response, argued that the price differential was justified as a cost-saving measure. Because Otasco was a larger company with a larger shipping and distribution system, Uniroyal did not incur nearly the amount of costs associated with shipping tires that Otasco purchased, because Otasco was able handle such matters itself. Case, by contrast, did not have such a shipping infrastructure. Uniroyal maintained that, in light of this, the reduction in the price for tires sold to Otasco made sense as a cost-saving measure. Both Uniroyal and Case filed cross-motions for summary judgment.

Rule of Law

Issue

Holding and Reasoning (Nixon, J.)

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