Shell Oil Company v. Evelle J. Younger, Attorney General of the State of California, Defendant

In 1975 the California legislature passed section 21200 of the California Business & Professions Code (chapter 8) to regulate price discrimination by major distributors of motor fuel. The first paragraph of chapter 8, in language paralleling section 2(a) of the Robinson-Patman Act, 15 U.S.C. § 13 (a) (1970), prohibits price discrimination where the effect of such discrimination is to lessen competition. The second paragraph of chapter 8, like section 2(b) of the federal statute, 15 U.S.C. § 13 (b), provides a “meeting competition” defense. The defense under the California statute, however, is narrower than that under the federal statute. To be exculpated under the state act, a discriminating seller must prove not only that the lower price was offered in good faith to meet the equally low price of a competitor, which is all the federal statute requires, but also that the lower price was offered to all customers of the seller in competition with the favored purchaser.

Appellee brought this action for declaratory and injunctive relief contending that, because of the limited “meeting competition” defense, the state act is in conflict with section 2(b) of the Robinson-Patman Act and…