Brooke Group Ltd v. Brown & Williamson Tobacco Corp

In Brooke Group Ltd v. Brown & Williamson Tobacco Corp, 509 U.S. 209; 113 S Ct 2578; 125 L. Ed. 2d 168 (1993), the United States Supreme Court articulated the requirements for recovery on a claim of predatory pricing under 2 of the Sherman Anti-Trust Act, 15 USC 1 et seq., or primary-line price discrimination under the Robinson Patman Act, 15 USC 13a. "First, a plaintiff seeking to establish competitive injury resulting from a rival's low prices must prove that the prices complained of are below an appropriate measure of its rival's costs." Id. at 222. Second, the plaintiff must demonstrate "that the competitor had a reasonable prospect, or, under 2 of the Sherman Act, a dangerous probability, of recouping its investment in below-cost prices." Id. at 224. The Court has addressed predatory pricing under Michigan's antitrust laws, which are patterned after the federal statutes. ETT Ambulance Service Corp v. Rockford Ambulance, Inc, 204 Mich App 392, 397; 516 NW2d 498 (1994). "A firm engages in predatory pricing where it 'foregoes short-term profits in order to develop a market position such that the firm can later raise prices and recoup lost profits.'" Id., quoting Janich Bros, Inc v. American Distilling Co, 570 F2d 848, 856 (CA 9, 1977).