## Facts

- William Inglis & Sons Baking Co. (Inglis), a regional Northern California bakery, competed with ITT Continental Baking Co. (Continental) and other large bakers in the market for private-label white pan bread sold under grocery store brands.
- Inglis alleged Continental used sustained below-cost pricing and discriminatory private-label pricing to injure rivals, drive Inglis from the market, and gain market power.
- Inglis sued under Sherman Act §§ 1 and 2, Robinson-Patman Act § 2(a), and California’s Unfair Practices Act (below-cost and loss-leader sales with anticompetitive intent).
- Before trial, the district court entered summary judgment for Continental on certain vertical conspiracy theories; Inglis abandoned horizontal conspiracy theories; one defendant settled.
- After a lengthy jury trial, the jury found for Inglis against Continental on federal and state claims and awarded roughly $5.048 million in damages.
- On post-trial motions, the district court granted Continental judgment notwithstanding the verdict (JNOV) (and alternatively ordered a new trial) on the federal antitrust claims, but denied JNOV on the California Unfair Practices Act claim while ordering a new trial on that state claim.
- Continental appealed the denial of JNOV and the new-trial order on the state claim; Inglis cross-appealed the JNOV/new-trial rulings on the federal claims.

## Issues

1. Whether the evidence was sufficient to support the jury’s findings of predatory pricing and attempted monopolization under Sherman Act § 2, including what cost measure could be used and what proof of intent and recoupment probability was required.
2. Whether the evidence was sufficient to support liability for price discrimination under Robinson-Patman Act § 2(a), including competitive injury, such that JNOV was improper.
3. Whether the district court improperly substituted its view of appropriate cost measures and evidentiary weight for the jury’s determinations in granting JNOV.
4. Whether Continental was entitled to JNOV on the California Unfair Practices Act claim, and whether ordering a new trial on that claim was within the district court’s discretion.
5. What limits apply to JNOV and new-trial rulings in complex antitrust cases after a jury verdict.

## Decision

- The Ninth Circuit reversed the district court’s JNOV in Continental’s favor on the federal antitrust claims, holding the record contained sufficient evidence for a reasonable jury to find predatory and discriminatory pricing.
- The court reinstated the jury’s federal verdict (while leaving in place the district court’s authority to conduct further proceedings consistent with its alternative new-trial rulings where applicable).
- On the California Unfair Practices Act claim, the Ninth Circuit affirmed the denial of JNOV (Continental was not entitled to judgment as a matter of law).
- The Ninth Circuit also affirmed the order granting a new trial on the California Unfair Practices Act claim.
- The case was remanded for further proceedings consistent with these rulings.

## Legal Principles

- Predatory pricing under Sherman Act § 2 may be found where there is substantial evidence that (1) prices were below an appropriate measure of cost (with average variable cost acceptable as a workable proxy for marginal cost), and (2) the defendant had anticompetitive intent and a dangerous probability of recouping losses through later supracompetitive pricing.
- Selection and application of cost benchmarks in predatory pricing disputes commonly present factual questions; a trial court may not remove the issue from the jury by imposing an unduly restrictive cost definition when the plaintiff presents substantial supporting evidence.
- Robinson-Patman Act § 2(a) liability may be supported by evidence of contemporaneous sales of like commodities to different purchasers at different prices, coupled with evidence permitting an inference of likely harm to competition; where supported by substantial evidence, competitive-injury determinations are for the jury.
- JNOV is improper where, viewing the evidence and reasonable inferences in the nonmovant’s favor, a reasonable jury could find for that party; disagreement with the jury’s weighing of competing evidence does not justify JNOV.
- Under California’s Unfair Practices Act, below-cost or loss-leader pricing combined with intent to injure competitors or destroy competition can support liability; even when JNOV is unwarranted, a new trial may be ordered in the court’s discretion due to instructional or evidentiary concerns.

## Conclusion

The Ninth Circuit held that the jury’s findings of predatory pricing and unlawful price discrimination were supported by sufficient evidence and that the district court erred by granting JNOV on the federal claims, while also holding that Continental was not entitled to JNOV on the California below-cost sales claim but that a new trial on the state claim could properly be ordered.


William Inglis & Sons Baking Co. v. ITT Cont'l Baking Co., 668 F.2d 1014 (9th Cir. 1981)