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WT/DS162/R/Add.1 Page 88

The District Court granted a motion for summary judgment against ARCO, but the Court of Appeals for the Ninth Circuit reversed.287  The Court noted the distinction in Brooke Group between the "reasonable prospect" of recoupment needed to show primary line discrimination and the "dangerous probability" of recoupment needed to show attempted monopolisation.288  The Court relied on this distinction to reverse the grant of summary judgment as to the primary line discrimination allegation, concluding that:  

"Rebel's evidence is sufficient, however, to raise a disputed question of material fact as to whether ARCO achieved sufficient market power to enforce supracompetitive oligopoly pricing.  This showing is sufficient to allow Rebel to survive summary judgment on the issue of antitrust injury resulting from price discrimination under the Clayton Act."289


The United States also recalls a second case, AntiMonopoly, Inc. v. Hasbro, Inc., in which the District Court considered allegations that Hasbro had, inter alia, engaged in primary line price discrimination by

"providing substantial discounts, terms and services to major family board game retailers which are not made available on equal terms to competing smaller family board game retailers and wholesalers and which are not either cost justified or otherwise permitted under §  2 [of the Clayton Act]."290

The Court noted the Brooke Group standard for primary line liability; noted that the plaintiff had alleged, inter alia, that Hasbro "prices its products below an appropriate measure of its costs […]"; concluded that the plaintiff "has stated a claim for a primaryline injury […]"; and therefore denied Hasbro's motion to dismiss the primary line discrimination allegation.291


 The United States notes that, in a third case, En Vogue v. UK Optical, Ltd., the District Court denied a motion by one of the defendants to dismiss the plaintiff’s primary line price discrimination allegations.292

287 The United States refers to Rebel Oil Co., Inc. v. Atlantic Richfield Co., 51 F.3d 1421 (9th Cir. 1995).

288 The United States refers to ibid., pp. 1442, 1445, 1447.

289The United States compares ibid., pp. 143243 with ibid., pp. 144448.  The United States notes that the court sustained the grant of summary judgment as to the attempted monopolisation allegation, concluding that "Rebel has failed to provide sufficient evidence to support a jury verdict on the issue of ARCO's "market power" under the Sherman Act […]."  (Ibid., p. 1448).  On remand, the District Court granted a new motion for summary judgment filed by ARCO, noting that "[i]n order to meet the requirements of predatory pricing, the plaintiff must present some evidence that the defendant priced below its costs," and that Rebel had made "no showing of ARCO's actual costs of producing gasoline."  The Court of Appeals affirmed that decision on the same basis.  (Rebel Oil Co., Inc. v. Atlantic Richfield Co., 957 F.Supp. 1184, 1196, 1197, 1203 (D. Nev. 1997), aff’d, 146 F.3d 1088 (9th  Cir.), cert. denied, 119 S. Ct. 541 (1998).

290 AntiMonopoly, Inc. v. Hasbro, Inc., 19952 Trade Cas. ¶ 71,095 (S.D.N.Y. 1995), p. 75,241.

291 The United States refers to ibid.  The United States notes that, subsequently, the plaintiff reached a settlement with two retailer defendants, Toys R Us and K Mart Corporation.  Two years later, the District Court granted a motion by Hasbro for summary judgment, concluding, inter alia, that the plaintiff "has not provided factual support for either element of a belowcost pricing antitrust claim."  The United States refers to AntiMonopoly, Inc. v. Hasbro, Inc., 958 F.Supp. 895, pp. 89798 note 1, 906 (S.D.N.Y. 1997), aff’d per curiam,  130 F.3d 1101 (3d Cir. 1997), cert. denied, 119 S. Ct. 48 (1998).  

292 The United States refers to En Vogue v. UK Optical, Ltd. and British Optical Import Company, 843 F.Supp. 838, pp. 84547 (E.D.N.Y. 1994).

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