Utah Pie Company v. Continental Baking Company/Dissent Stewart

by Potter Stewart

United States Supreme Court

386 U.S. 685

Utah Pie Company  v.  Continental Baking Company

 Argued: Jan. 17, 1967. --- Decided: April 24, 1967

Mr. Justice STEWART, with whom Mr. Justice HARLAN joins, dissenting.

I would affirm the judgment, agreeing substantially with the reasoning of the Court of Appeals as expressed in the thorough and conscientious opinion of Judge Phillips.

There is only one issue in this case in its present posture: Whether the respondents engaged in price discrimination 'where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination * * *.' ^[1] Phrased more simply, did the respondents' actions have the anticompetitive effect required by the statute as an element of a cause of action?

The Court's own description of the Salt Lake City frozen pie market from 1958 through 1961, shows that the answer to that question must be no. ^[2] In 1958 Utah Pie had a quasi-monopolistic 66.5% of the market. In 1961-after the alleged predations of the respondents-Utah Pie still had a commanding 45.3%, Pet had 29.4%, and the remainder of the market was divided almost equally between Continental, Carnation, and other, small local bakers. Unless we disregard the lessons so laboriously learned in scores of Sherman and Clayton Act cases, the 1961 situation has to be considered more competitive than that of 1958. Thus, if we assume that the price discrimination proven against the respondents had any effect on competition, that effect must have been beneficient.

That the Court has fallen into the error of reading the Robinson-Patman Act as protecting competitors, instead of competition, can be seen from its unsuccessful attempt to distinguish cases relied upon by the respondents. ^[3] Those cases are said to be inapposite because they involved 'no general decline in price structure,' and no 'lasting impact upon prices.' But lower prices are the hallmark of intensified competition.

The Court of Appeals squarely identified the fallacy which the Court today embraces:

'* * * a contention that Utah Pie was entitled to hold the extraordinary market share percentage of 66.5, attained in 1958, falls of its own dead weight. To approve such a contention would be to hold that Utah Pie was entitled to maintain a position which approached, if it did not in fact amount to a monopoly, and could not exist in the face of proper and healthy competition.' 349 F.2d 122, 155.

I cannot hold that Utah Pie's monopolistic position was protected by the federal antitrust laws from effetive price competition, and I therefore respectfully dissent.

Notes

1. Section 2(a) of the Clayton Act as amended by the Robinson-Patman Act, 15 U.S.C. § 13(a).
2. See ante, p. 691, n. 7.
3. See ante, p. 703, n. 15.