October 05, 2005
Supreme Court Set to Address Business Issues
This Inc.com article reports that the Supreme Court's current docket includes a review of decisions that may affect businesses. Of particular interest to manufacturers and distributors is Volvo v. Reeder-Simco, an antitrust case out the Eighth Circuit that may redefine the definition of competitors for purposes of the Robinson-Patman Act, which prevents price discrimination among competitors. The distributor claimed that Volvo repeatedly favored larger dealers in competitive bidding (even if they had larger bids) to the distributor's detriment. Volvo claimed that the distributor failed to demonstrate that the so-called "favored dealers" were its competitors because they were outside the distributor's geographic and operational boundaries set by Volvo. The federal jury awarded the distributor $1.3 million, which was trebled under the Robinson-Patman Act to approximately $4.3 million. The Eighth Circuit upheld the verdict over a vigorous dissent, finding that a reasonable jury could find that the distributor's profits which were consistently below those of the favored dealers, were the result of Volvo's discrimination. Oral argument is set to be heard on October 31. In addition, the Court will review Domino's Pizza v. McDonald, in which the principal of a defunct and bankrupt real estate company sued Domino's for race discrimination under 42 U.S.C. sec. 1981. Under this section, the Civil Rights Act of 1866, Mr. McDonald, an African American, claims that Domino's breached its real estate contracts with his company -- causing its bankruptcy -- because of Mr. McDonald's race. The Civil Rights Act of 1866 prohibits racial discrimination in the making or enforcement of contracts. Because Mr. McDonald was not a party to the contract and because Domino's settled the company's breach of contract claim, the district court ruled that Mr. McDonald lacked standing to bring suit under the Civil Rights Act. The Ninth Circuit reversed. This decision, which relied on a Tenth Circuit case, puts the Ninth Circuit in conflict with other circuits that have reviewed the statute and found that a party cannot assert a section 1981 claim unless it was a party to the contract in question. The Court's decision is expected to resolve the split among the circuit courts. Oral argument is scheduled for December 6.
Posted by franchiselawblog at October 5, 2005 01:37 PM