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WT/DS162/R/Add.1 Page 89


In conclusion, the United States notes that in each of these three cases decided after Brooke Group allegations of primary line price discrimination survived motions to dismiss or motions for summary judgment.  The fact that such motions may have been granted in other cases cited by Japan such as Zeller Corp. does not in any way reduce the respective risks of liability bestowed by the 1916 Act and the RobinsonPatman Act.  It rather simply reflects the fact that every case is different, and while some plaintiffs may be able to adduce evidence sufficient to ensure that they can move from the preliminary phase of a trial to the trial itself, other plaintiffs are not able to do so.

(b) Intent requirement vs. effect requirement


Japan argues that another key difference between the 1916 Act and the Robinson-Patman Act is the burden of proving intent versus effect.  The 1916 Act requires a plaintiff to prove that discriminatorily low prices are set with the intent to injure, destroy, or prevent the creation of a domestic industry or to restrain or monopolise commerce in the United States.293  In contrast, the Robinson-Patman Act prohibits price discrimination "where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly […] or to injure, destroy or prevent competition with any person who grants or knowingly receives the benefit of such discrimination"294.  US courts, including the Supreme Court, have interpreted this to require proof, not merely of intent, but of effect.295  Thus, where a foreign defendant has intent but is unsuccessful in injuring, destroying or preventing competition, it could not be successfully prosecuted under the Robinson-Patman Act, but could be successfully prosecuted under the 1916 Act.296


Japan notes that US government officials themselves have concurred with this analysis, acknowledging that proving a 1916 Act claim is easier than proving a Robinson-Patman Act claim.  In 18 July 1986 testimony before the US Senate Finance Committee, USTR General Counsel Alan Holmer said:

"Under the rules in S. 1655 [a legislative proposal to amend the 1916 Act], the same conduct by two firms, one domestic and one foreign, could be deemed unfair competition subject to treble damages in the case of a foreign firm [under the 1916 Act], and not punishable at all in the case of the domestic firm [under the Robinson-Patman Act].  This is a denial of national treatment."297


Japan argues that apart from the differences in the substance of the standards, proving intent to injure under the 1916 Act is easier because the subjective intent standard is easier to prove than the objective effect standard.  For example, a single internal memorandum stating that prices should be

293  Japan refers to the text of the 1916 Act.  Japan further notes that, in Geneva Steel, the court held that "by its express language, the 1916 Act is not limited only to antitrust injury or predatory price discrimination."  (Geneva Steel, Op. Cit., p. 1215)  Therefore, claimants need not prove actual predatory pricing, but only that "defendants acted as importers for the systematic dumping of [a product] with the intent of injuring, by any means, the domestic […] industry."  (Ibid.)  Japan also refers to Wheeling-Pittsburgh, Op. Cit., pp. 604-606.

294 Emphasis added by Japan.

295 Japan contends that, in Brooke Group, Op. Cit., p. 225, the US Supreme Court confirmed the comparatively high proof requirements of the Robinson-Patman Act by specifically rejecting the notion that proof of bad "intent" or "malice" might, by itself, establish predatory pricing.  The Court required, in addition, proof of effect, i.e. proof that competition has been injured.  

296 According to Japan, this fact, in and of itself, establishes a US violation of Article III:4.  Japan refers to, e.g., United States - Section 337, Op. Cit., paras. 5.13-5.14, where the panel finds that the key to an Article III:4 violation is whether the differential treatment "may" lead to less favourable treatment, based on an analysis of the "potential impact" of the laws.

297 Testimony of USTR General Counsel Alan Holmer, Op. Cit., p. 4.

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