## Facts

- Caribe BMW, Inc. (Caribe) bought BMW automobiles at wholesale from Bayerische Motoren Werke Aktiengesellschaft (BMW AG) in Germany, imported them into Puerto Rico, and sold them at retail.
- BMW AG also sold BMW automobiles at wholesale to BMW of North America, Inc. (BMW NA).
- BMW NA was a wholly owned subsidiary of BMW AG and resold BMW automobiles to other retailers that competed with Caribe.
- Caribe alleged that BMW NA sold to competing retailers at prices (or on terms) more favorable than those BMW AG offered to Caribe, placing Caribe at a competitive disadvantage.
- Caribe sued BMW AG and BMW NA, asserting (among other claims) that the wholesale pricing structure constituted unlawful price discrimination under the Robinson-Patman Act.
- Caribe also alleged a Sherman Act § 1 claim based on a maximum resale price arrangement that limited the prices Caribe could charge at retail and reduced Caribe’s profit margin.
- The district court dismissed the federal antitrust claims under Rule 12(b)(6), reasoning (1) Robinson-Patman requires discrimination by a single “person,” and BMW AG and BMW NA were separate entities, and (2) Caribe’s lost profits from maximum resale price fixing were not “antitrust injury” under *Atlantic Richfield Co. v. USA Petroleum Co.* (ARCO).
- Caribe appealed.

## Issues

1. For Robinson-Patman Act purposes, can a manufacturer and its wholly owned subsidiary be treated as a single “person” or “seller,” so that their combined sales to different purchasers can satisfy the Act’s single-seller requirement?
2. Can a retailer’s lost profits allegedly caused by a maximum resale price fixing agreement with its supplier constitute “antitrust injury” sufficient for treble-damages standing under § 4 of the Clayton Act?

## Decision

- The First Circuit vacated the district court’s dismissal and remanded for further proceedings.
- The court held that, at the pleading stage, a parent company and its wholly owned subsidiary may be treated as a single seller/person for Robinson-Patman purposes when the alleged facts support viewing them as one economic selling unit.
- The court held that Caribe’s alleged lost profits from a maximum resale price fixing arrangement could qualify as antitrust injury, because the harm was tied to the alleged restraint on the dealer’s pricing and margin, not merely to lower consumer prices.

## Legal Principles

- Robinson-Patman Act § 2(a) requires price discrimination by a single “person,” but a parent and wholly owned subsidiary may be treated as a single seller when the complaint plausibly alleges integrated pricing conduct amounting to one economic enterprise.
- In assessing “single seller” under Robinson-Patman, courts may look to economic reality and the alleged control and coordination of pricing, not only to formal corporate separateness, particularly on a motion to dismiss.
- A private plaintiff seeking treble damages under § 4 of the Clayton Act must plead antitrust injury: harm of the type the antitrust laws were designed to prevent that flows from the feature of the conduct that makes it unlawful.
- A dealer allegedly subjected to maximum resale price fixing may suffer antitrust injury where the claimed loss (reduced margin/lost profits) results from the restraint imposed on the dealer’s pricing freedom and competitive position; ARCO does not automatically bar such a claim.

## Conclusion

The First Circuit reinstated Caribe’s federal antitrust claims, ruling that Caribe plausibly alleged Robinson-Patman price discrimination by a single seller because BMW AG and its wholly owned subsidiary could be treated as one selling unit, and that Caribe’s claimed lost profits from an alleged maximum resale price fixing arrangement could constitute antitrust injury sufficient to support standing for treble damages.


Caribe BMW, Inc. v. Bayerische Motoren Werke Artiengesellschaft, 19 F.3d 745 (1994)