## Facts

- Philip Klein operated a retail store in Wilmington, Delaware selling Lionel toy electric trains and accessories.
- The Lionel Corporation manufactured the products and sold them in a tiered distribution system to jobbers, middlemen, and some retailers, with discount levels varying by purchaser type.
- Klein was not among the retailers to whom Lionel sold directly; he purchased Lionel products only from jobbers or middlemen for resale.
- Klein received smaller discounts from his suppliers than the discounts Lionel gave to retailers it supplied directly.
- Klein competed with the retailers who bought directly from Lionel and claimed Lionel’s discount structure unlawfully disadvantaged him.
- Klein sued Lionel under § 2(a) of the Clayton Act as amended by the Robinson-Patman Act (15 U.S.C. § 13(a)) and under § 3 of the Robinson-Patman Act (15 U.S.C. § 13a), seeking treble damages.

## Issues

1. Whether a retailer who never purchased directly from the manufacturer can sue the manufacturer for price discrimination under Robinson-Patman Act § 2(a) based on more favorable prices to other competing retailers who did purchase directly.
2. Whether the same plaintiff can maintain a claim under Robinson-Patman Act § 3 based on the manufacturer’s discount practices, despite not being a direct purchaser and without alleging “unreasonably low prices” aimed at destroying competition.

## Decision

- The Third Circuit affirmed summary judgment for Lionel.
- The court held Klein had no cause of action under § 2(a) because the statute requires discrimination “between different purchasers,” meaning at least two purchasers from the same seller, and Klein did not purchase from Lionel.
- The court rejected the § 3 claim because Klein’s allegations did not fit § 3’s focus on sales at “unreasonably low prices” (or similar predatory discount devices) for the purpose of destroying competition, and § 3 did not supply the private treble-damages remedy Klein sought on these facts.

## Legal Principles

- A Robinson-Patman Act § 2(a) price discrimination claim requires price differences between at least two purchasers from the same alleged discriminating seller; an indirect purchaser from intermediaries is not a “purchaser” of the manufacturer for § 2(a) standing.
- Competitive injury allegations do not substitute for the statutory requirement that the plaintiff be a purchaser from the defendant seller.
- Robinson-Patman Act § 3 targets predatory practices such as sales at “unreasonably low prices” (or equivalent rebate/discount devices) undertaken for the purpose of destroying competition or eliminating a competitor; claims outside that scope fail.
- On these allegations, § 3 did not provide a separate basis for a private treble-damages action against the manufacturer.

## Conclusion

The court held that a retailer buying only through jobbers or middlemen cannot sue the manufacturer for Robinson-Patman § 2(a) price discrimination because the statute requires discrimination between purchasers from the same seller, and it also affirmed dismissal of the § 3 theory where the pleaded facts did not allege predatory “unreasonably low” pricing aimed at eliminating competition.


Klein v. The Lionel Corp., 237 F.2d 13 (3d Cir. 1956)