High court hearing arguments in truck seller versus Volvo case

WASHINGTON - A western Arkansas truck seller went before the U.S. Supreme Court on Monday to argue that Volvo's heavy trucks division discriminated against it by favoring dealers with whom it directly competed.

Reeder-Simco GMC Inc. sued Volvo Trucks North America and told justices Monday it should have been entitled to the same discounts made available to other dealerships. It said Volvo, amid a plan to reduce the number of its franchises by 50 percent, raised Reeder-Simco's sales objectives at the same time it reduced the discounts available to it.

"We compete on a daily basis in the same region, Volvo dealer to Volvo dealer," said Carter Phillips, an attorney who represented Reeder-Simco, before the court according to The Times Record newspaper of Fort Smith.

A federal judge ruled for Reeder-Simco and, in a split decision, the 8th U.S. Circuit Court of Appeals agreed. Justices this year agreed to hear the case.

Reeder-Simco alleges a violation of the Robinson-Patman Act of 1936, which was passed to protect mom-and-pop stores from advantages held by large supermarket chains. The Fort Smith truck dealer said Volvo tried to drive it out of business by withholding discounts.

"Why does it violate the principle of Robinson-Patman for Volvo to say 'we'll make whatever discount to make the sale?"' Justice Antonin Scalia asked. "I don't see why that harms competition."

Newly confirmed Chief Justice John Roberts told Phillips that Reeder-Simco is not at the whim of a monopoly.

"Volvo's interest may be in making money this year and not concern about you making money over three to five years," Roberts said.

Volvo has argued that Reeder failed to prove it was in direct competition with other dealers to whom it had given greater discounts.