## Facts

- Borden produced evaporated milk sold under its nationally advertised “Borden” brand and under private labels for customers.
- The branded and private-label products were physically and chemically identical; the only difference was the label on the can.
- Borden charged higher prices for Borden-labeled evaporated milk than for the identical private-label product.
- The FTC found the products to be of like grade and quality, found the price differentials likely to harm competition, rejected Borden’s cost-justification defense, and issued a cease-and-desist order.
- After Supreme Court review resolved the “like grade and quality” question against Borden, the case returned to the Fifth Circuit to address competitive injury, cost justification, and the scope of the order.

## Issues

1. Whether substantial evidence supported the FTC’s finding that Borden’s price discrimination had the requisite effect on competition under Robinson-Patman § 2(a).
2. Whether the FTC properly rejected Borden’s claim that the price differentials were justified by differences in the cost of manufacture, sale, or delivery.
3. Whether the FTC’s cease-and-desist order was impermissibly broad and required modification.

## Decision

- The Fifth Circuit upheld the FTC’s finding of competitive injury, concluding the record substantially supported that the discrimination had a prohibited tendency to lessen competition.
- The court upheld the FTC’s rejection of cost justification because Borden failed to prove, with reliable allocation and quantification, that differentials did no more than reflect cost differences.
- The court modified portions of the order it found broader than necessary, and enforced the order as modified, leaving intact the core prohibition against the challenged price discrimination absent a valid statutory defense.

## Legal Principles

- Under Robinson-Patman Act § 2(a), the government need not prove actual destruction of competition; it is enough that price discrimination may substantially lessen competition or tends to do so.
- A showing that disfavored purchasers pay higher prices than their competitors for goods of like grade and quality can support an inference of likely competitive injury.
- The seller bears the burden to establish the cost-justification defense and must present persuasive, appropriately allocated proof that the price differential is no more than the cost difference.
- FTC remedial orders must be reasonably related to the violations found; reviewing courts may narrow overbroad provisions while enforcing the order’s central prohibitions.

## Conclusion

The Fifth Circuit largely sustained the FTC’s Robinson-Patman findings against Borden for charging higher prices for its branded evaporated milk than for identical private-label milk, rejected Borden’s cost-justification defense for lack of adequate proof, and enforced the cease-and-desist order after narrowing provisions that exceeded the demonstrated violation.


Borden Co. v. Fed. Trade Comm'n, 381 F.2d 175 (5th Cir. 1967)