Appeals Court Reverses Foodservice Pricing Ruling

A federal appeals court has reversed a lower court ruling that had found Sodexo and supplier Michael Foods guilty of violating the Robinson-Patman Act. The case, Feesers, Inc. v. Michael Foods, Inc. and Sodexo, Inc., was filed in 2004. In the suit, Feesers, a regional food distributor based in Pennsylvania, claimed that it competes with Sodexo, which in turn obligates Michael Foods to sell its products to both companies at the same price under Robinson-Patman.

The unanimous decision from the Third Circuit Court of Appeals rejected Feesers' claim, ruling that Feesers and Sodexo compete only when a prospective customer is deciding between self-operation and outsourcing of its food service operations. Because sales of Michael Foods products occur after the customer has made that decision, the court found no competition between Feesers and Sodexo in sales of Michael Foods products. And with no competition, the court held, there could be no competitive injury to Feesers.