High Court Upholds Verdict Against Texaco in Pricing Case

The Supreme Court today upheld a $1.3-million verdict against Texaco Inc. for price discrimination in a case that could force major changes in the product distribution practices of businesses everywhere.

In a unanimous ruling by Justice John Paul Stevens, the court affirmed a ruling by the U.S. 9th Circuit Court of Appeals upholding the jury verdict against the oil giant.

The court rejected Texaco’s arguments that it did not discriminate in price nor injure competition.

Stevens said that to accept Texaco’s arguments would “create a blanket exemption for all functional discounts. Indeed, carried to its logical conclusion, it would exempt all price differentials except those given to competing purchasers.”

At issue in the case was whether manufacturers such as Texaco can sell their product to wholesalers at a lower price than to retailers if such pricing results in less retail competition.