KOELSCH, Circuit Judge:
Plaintiff Cadigan appeals from summary judgment rendered in favor of defendants Texaco, Inc., and Wickland Oil Co.
In his complaint plaintiff alleges a violation of § 2(a) of the Robinson-Patman Act, 15 U.S.C. § 13(a) et seq., by Texaco, and of § 2(f) by Wickland. These sections provide:
Both defendants concede in their answers that the price at which Texaco sold to Wickland was lower than that charged plaintiff, but, relying on the statutory defense provided by § 2(b) of the Act,
Defendants introduced several affidavits in support of their § 2(b) defense and moved for summary judgment. Plaintiff, despite the admonition of Fed.R.Civ.P. 56(e), rested on the allegations of his complaint.
On appeal, of course, we must determine whether the pleadings and affidavits present any genuine issue as to any material fact and whether defendants are entitled to judgment as a matter of law. Finding none, and agreeing with the district court, we affirm.
The following uncontroverted facts appear from the pleadings and affidavits:
Wickland Oil Co. is the owner and operator of 15 "King Dollar" gas stations in Northern California and Oregon. One of these stations is across the street from that formerly operated by plaintiff in Redding, California. Plaintiff leased his station from Texaco and bought "Texaco" brand gasoline from Texaco for resale to the public. Before September 1, 1967, Wickland purchased its gasoline requirements from Richfield; the gas was rebranded and sold to the public as "Rocket" gas.
During August, 1966, however, Wickland had become interested in selling major brand gasoline and began negotiations with Humble Oil. Humble offered to supply Wickland's requirements of Humble's major brand gas at a discount of $.0325 per gallon of regular and $.0375 per gallon of premium off posted dealer tankwagon prices. By February, 1967, Wickland decided a switch to major brand sales by "King Dollar" stations was economically feasible, and notified Richfield of the termination of the supply arrangement for "Rocket" gas, effective after the month of August, 1967. Wickland thereafter negotiated with American Oil Co., which offered the same discount as Humble, and beginning in March, 1967, with Texaco.
Wickland informed Texaco's local sales representatives of the discounts offered
Wickland continued to inform Texaco of offers of higher discounts, and indicated that it would terminate the arrangement with Texaco if the discount was not raised. In March, 1968, Texaco approved a discount of $.0325 on regular and $.0350 on premium, thereby equalling the discount offered by Humble and American Oil on regular and remaining below that offered on premium. Wickland thereafter continued to seek lower prices from Texaco and to receive competitive offers from other companies, and in September, 1970, it terminated the arrangement with Texaco and converted to Atlantic-Richfield's "Arco" brand.
Plaintiff alleges that the price discrimination allowed Wickland's "King Dollar" stations to sell "Texaco" brand gas at a price lower than that at which he could sell the identical gas at his station across the street, and that as a result, he was driven out of business. Nevertheless, the district court's grant of summary judgment was entirely appropriate. Section 2(b) provides a complete defense to a prima facie case of price discrimination, despite any adverse effect on competition created by the price differential. Standard Oil Co. (Indiana) v. FTC, 340 U.S. 231, 71 S.Ct. 240, 95 L.Ed. 239 (1951). The sole permissible inference which may be drawn from the uncontroverted facts is that Texaco offered the discriminatory discounts in a good faith effort to secure Wickland's business by matching prices offered by Texaco's competitors, Humble and American. Plaintiff having failed to introduce any evidence to support a contrary finding, a summary judgment motion was appropriate to establish the § 2(b) defense to plaintiff's claim.
Of plaintiff's several contentions, none has merit, and only three warrant discussion.
Plaintiff makes much of the fact that Wickland was allowed to use the "Texaco" brand name to advertise the gas "King Dollar" stations sold, arguing that price discrimination by a seller (Texaco) against its own "locked-in" retailers (plaintiff) should be "inherently illegal" under the Robinson-Patman Act when the seller also allows the independent retailer (Wickland) favored by the discrimination to use the brand names.
We see no justification for engrafting such an exception onto the § 2(b) proviso; the Act, in express terms, makes price discrimination illegal, not the competitive use of a brand name. Indeed, the construction appellant urges on us would defeat the competitive purposes of the Act by preventing cost competition in products such as gas once a brand name is affixed.
Plaintiff also contends that summary judgment was improperly rendered because defendants, not having shown that the prices of Texaco's competitors were lawful, failed to bring themselves within the § 2(b) proviso. We reject this contention. A defendant need not prove the actual lawfulness of his competitor's price in order to secure the protection of the proviso. The well established rule is that § 2(b) is satisfied unless it appears that the defendant either knows the price being met is unlawful or that it is inherently unlawful. Standard Oil Co. v. Brown, 238 F.2d 54 (5th Cir. 1956).
Finally, appellant argues that the § 2(b) defense can be asserted only when the price discrimination is made to retain old customers, and not, as in this case, when a seller meets competitive prices in order to obtain a new customer. The distinction is unsound and has been rejected by the courts, Sunshine Biscuits, Inc. v. FTC, 306 F.2d 48 (7th Cir. 1962); see Jones v. Borden Co., supra; and is not applied by the Federal Trade Commission, see Beatrice Foods Co. [1967-70 Transfer Binder] Trade Reg.Rep. ¶ 19,045 (FTC 1970). We agree with the Seventh Circuit that: