United States v. National Dairy Products Corp.

Background

National Dairy, a large company that processes and sells milk, and Raymond J. Wise, a company vice‑president, were indicted for selling milk in Kansas City and six nearby local markets. The indictment alleges they sold milk below National Dairy’s cost to finance price wars and drive small local dairies into severe losses or out of business. The District Court dismissed the Robinson‑Patman Act counts as unconstitutionally vague; the government appealed.

Reasoning

The Court asked whether the statute that makes it a crime to sell goods at “unreasonably low prices for the purpose of destroying competition” is vague when applied to below‑cost sales done to harm rivals. Looking at the statute’s history and prior cases, the majority concluded Congress intended to prohibit below‑cost pricing used to destroy competition. The Court held the extra requirement of predatory intent gives companies fair warning and that the indictment’s allegations were specific enough to proceed to trial.

Real world impact

The decision sends the case back for trial, so prosecutors may pursue criminal charges when a business is accused of selling below cost with a specific intent to eliminate rivals. At the same time, the Court made clear not every sale below cost is illegal; legitimate reasons such as liquidating perishable stock or matching a lawful competitor price remain defenses. The opinion also left open how to measure “cost,” which may be a factual issue at trial.

Dissents or concurrances

Justice Black, joined by Justices Stewart and Goldberg, dissented. He argued Cohen Grocery requires striking the statute as void for vagueness and said such a criminal statute should be fixed by Congress, not the Court.