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WT/DS162/R/Add.1 Page 92

on the defendant's rivals (i.e. putting them out of business); and (ii) restraining competition long enough for the defendant to raise its prices and recapture the profits it lost during the period of price cutting.304


According to Japan, this imposes on Robinson-Patman Act plaintiffs a requirement that is exceedingly difficult, indeed, nearly impossible, to meet.  Japan notes that since Brooke Group, not one primary-line price discrimination lawsuit under the Robinson-Patman Act has succeeded.  Of the twelve cases adjudicated, five were dismissed because the plaintiff had proven neither below cost sales nor possibility for recoupment305, two were dismissed because the plaintiff had failed to show below cost sales306, two were dismissed for failure to plead sales below cost or possibility of recoupment307, one was dismissed for failure to plead possibility of recoupment308, and two were dismissed for lack of standing309.


Japan points out that a federal district court in the state of Ohio recently dismissed a primary-line Robinson-Patman Act claim.  The Robinson-Patman Act case, Zeller Corp., underscores the nearly insurmountable obstacles facing plaintiffs in such cases.  Indeed, the court intimated that the predatory pricing requirements established by Brooke Group are extremely difficult to meet:  "'the standard announced in Brooke Group has presented almost an impregnable fortress to [a] plaintiff claiming injury by reason of his rival's low prices."'310


Japan asserts that, in contrast, claims under the 1916 Act, as in Geneva Steel and Wheeling-Pittsburgh, have a much better chance of success.  A 1916 Act plaintiff need not prove recoupment.  This differential treatment violates Article III:4.


The United States denies that recovery under the Robinson-Patman Act has ceased following the 1993 Supreme Court decision in Brooke Group.  The evidence is to the contrary.  While liability

304 Japan refers to ibid., pp. 225-26 (citations omitted by Japan).  Japan notes that several US Circuit Courts of Appeal have observed that proving competitive injury through predatory pricing under Brooke Group is exceedingly difficult.  The Court of Appeals for the Eighth Circuit has noted that the sales below cost and possibility of recoupment requirements "make it extremely difficult for plaintiffs to prove predatory pricing in antitrust cases. That difficulty, however, reflects the economic reality that predatory pricing schemes are rarely tried, and even more rarely successful."  Japan refers to International Travel Arrangers v. NWA, Inc., 991 F.2d 1389, p. 1396 (8th Cir. 1993) (quoting Matsushita Elec. Indus. Co., 475 U.S., p. 589).  The Court of Appeals for the First Circuit has similarly observed that "the requisites for proving predatory pricing are demanding because the conditions under which it is plausible are not common, and because it can easily be confused with merely low prices which benefit consumers."  Japan refers to Tri-State Rubbish Waste, Inc. v. Waste Management, Inc., 998 F.2d 1073, p. 1080 (1st Cir. 1993).  This is inconsistent with the national treatment obligation of Article III:4.

305 Japan refers to Taylor Publishing Company v. Jostens, Inc., 36 F. Supp. 2d 360, p. 369 (E.D.Tex. 1999); Sally Bridges v. Maclean-Stevens Studios, Inc., 35 F. Supp. 2d 20, p. 28 (D.C. Maine 1998); Anti-Monopoly, Inc. v. Hasbro, Inc., 958 F. Supp. 895, p. 906 (S.D.N.Y. 1997); Clark. v. Flow Measurement, Inc., 948 F. Supp. 519, p. 529 (D.S.C. 1996); C.B. Trucking, Inc. v. Waste Management, Inc., 944 F. Supp. 66, p. 69 (D. Mass. 1996).

306 Japan refers toStearns Airport Equipment Co. v. FMC Corp., 977 F. Supp. 1269, p. 1273 (N.D. Tex. 1997); Rebel Oil Co. v. Atlantic Richfield Company, 957 F. Supp. 1184, p. 1204 (D.C. Nev. 1997).

307 Japan refers to Malek Wholesaler, Inc. v. First Film Extruding, Ltd., 97 C 7087, 1998 U.S. Dist. LEXIS 3674, p. *9 (N.D. Ill.); Cardinal Indus. Inc. v. Pressman Toy Corp., 96 Civ. 4590 (MBM), 1996 U.S. Dist. LEXIS 18714, p. *18 (S.D.N.Y.) .

308 Japan refers to Zeller Corp., Op. Cit., pp. *6-8 (N.D. Oh.).

309 Japan refers toThe City of New York v. Coastal Oil New York, Inc., 96 Civ. 8667 (RPP), 1998 U.S. Dist. LEXIS 2049, p. *19 (S.D.N.Y.); Lago & Sons Dairy, Inc. v. H.P. Hood, Inc., Civ. No. 92-200-SD, 1994 U.S. Dist. LEXIS 12909, pp. *13-14 (D.N.H.).

310 Japan refers to Zeller Corp., Op. Cit., p. *6 (quoting defendants' motion to dismiss).

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