The Federal Trade Commission’s (“FTC”) first Robinson-Patman Act (“RPA”) suit in decades has survived a motion to dismiss. The Honorable Fred W. Slaughter in the United States District Court for the Central District of California ruled on the papers that the FTC’s Complaint against Southern Glazers Wine and Spirits, LLC (“Southern”) “sufficiently alleges” a claim that Southern has engaged in price discrimination that injures competition among its customers, a secondary-line discrimination claim, as detailed below.[1]

As we summarized in a prior advisory (available here), two years ago, during the Biden administration’s tenure, the FTC announced its intention to ramp up enforcement of the RPA, a Great Depression era anti-price discrimination law, after decades of non-enforcement. The RPA forbids a seller of goods from engaging in price discrimination between two or more different purchasers.  The rationale for the RPA was that preventing such price discrimination would enable smaller companies to compete with larger businesses.

On December 12, 2024, in the waning days of the Biden presidency, the FTC made true on its promise and sued Southern, alleging that it violated the RPA by “selling wine and spirits to small, independent ‘mom and pop’ businesses at prices that are drastically higher than what Southern charges large and regional chains.”[2] The FTC further alleged that Southern Glazer (1) charged significantly higher prices for sales of identical bottles of alcohol to independent retailers than to larger retailers and (2) offered unjustified quantity discounts and rebates to larger retailers that independent sellers were not made aware of, causing independent retailers to lose sales and customers.[3]

At the time of the Complaint, Andrew Ferguson, the now FTC chairman, dissented from the agency’s vote to sue Southern because he did not believe the FTC could “prevail” and it would unnecessarily drain FTC resources.[4] On February 3, 2025, Southern filed a motion to dismiss arguing that the FTC failed to adequately allege an RPA claim — attaching Commissioner Ferguson’s dissent.[5] Notably, the Trump era FTC defended against the motion to dismiss by filing a brief in opposition on March 13, 2025.[6] And on April 17, 2025, Judge Slaughter denied the motion to dismiss, finding that the Complaint adequately alleged violations under the RPA by pleading each element of a secondary-line discrimination claim which “bars a seller from discriminating in price between competing purchasers of commodities of like grade and quality.”[7] This requires the FTC to show that (1) challenged sales were made in interstate commerce; (2) the items sold were of like grade and quality; (3) the seller discriminated in price between the disfavored and favored buyers; and (4) the effect of such discrimination may be to injure, destroy, or prevent competition to the advantage of a favored purchaser.[8]

Interstate commerce.  The FTC advanced the “demand planning theory” to meet this element, alleging that Southern purchased specific products to fulfill the anticipated demands of favored purchasers in several states.[9] The Court found this theory to satisfy the requirement that the goods at issue remained “in commerce.”[10]

Like Grade and Quality.  Southern contended that the Complaint contained “virtually no facts about the material terms and conditions of [Southern’s] liquor sales other than price.”[11] But the Court found that the Complaint created a “plausible inference” that Southern discriminated in price between purchases of goods of “like grade and quality” because the Complaint alleged that large retailers purchased the exact same goods at lower prices than small stores.[12]

Price Discrimination Between Favored and Disfavored Buyers.  The Court found that the FTC made a sufficient showing on this point by aggregating data from thousands of transactions to support the allegation that Southern charged smaller businesses more for purchases than large retailers.[13]

Harm to Competition.  The FTC argued that the Complaint alleged harm to competition, noting that favored purchasers received price reductions — in some cases, these reductions were “so significant that the favored chain stores were able profitably to re-sell Southern products at retail prices below the wholesale prices paid by disfavored independent retailers” for the same goods.[14] Southern argued that the Complaint did not show that the larger and smaller customers were in competition.[15] The Court ruled that it could permissibly infer from the Complaint that such competition existed and was harmed by Southern’s pricing practices, finding that the FTC had alleged a plausible competitive injury.[16]

Notwithstanding the favorable decision and the Trump era FTC’s defense of the suit, it remains to be seen whether the FTC will in fact continue with the litigation given Chairman Ferguson’s prior dissent. Still, in light of the reemergence of the FTC as an enforcer of the RPA, we anticipate that some state attorneys general, and perhaps private litigants, may attempt to enforce the state antitrust act analogues to RPA, particularly when the jurisdictional prerequisites of the RPA cannot be met.

Wiggin and Dana has extensive experience counselling in the area of RPA. Despite the absence of federal government enforcement for decades, RPA has continued to be enforced by private litigants. Because RPA issues often involve complex legal and factual questions, it may be appropriate to engage counsel to review current practices for compliance with the RPA.

[1] Federal Trade Commission v. Southern Glazer’s Wine and Spirits, LLC, 8:24-cv-02684-FWS-ADS, ECF No. 72 (C.D. Cal., April 17, 2025).

[2] Id. ECF. No. 1. at 1 (December 12, 2024).

[3] Federal Trade Commission, FTC Sues Southern Glazer’s for Illegal Price Discrimination, (December 12, 2024), https://www.ftc.gov/news-events/news/press-releases/2024/12/ftc-sues-southern-glazers-illegal-price-discrimination

[4] Andrew N. Ferguson, Dissenting Statement of Commissioner Andrew N. Ferguson in the Matter of Southern Glazer’s Wine and Spirits, LLC Matter Number 211-0155 (December 12, 2024)

[5] Federal Trade Commission v. Southern Glazer’s Wine and Spirits, LLC, 8:24-cv-02684-FWS-ADS, ECF No. 52 (C.D. Cal., Feb. 3, 2025).

[6] Id. ECF No. 66 (March 13, 2025).

[7] Id. ECF No. 72 at 6 (April 17, 2025).

[8] Id.

[9] Id. at 6.

[10] Id. at 8.

[11] Id.

[12] Id. at 9.

[13] Id. at 10.

[14] Id.

[15] Id.

[16] Id. at 11-12