                     United States Court of Appeals
                              FOR THE EIGHTH CIRCUIT
                                 ________________

                                    No. 98-1149
                                 ________________

Thomas M. Godfrey; Elliot                *
Blaylock; Jay Bluestone; Donald R.       *
Briscoe; Barrett Burstein; Florissant    *
News, Inc., a Missouri Corporation;      *     Appeal from the United States
Ramon Devine; Timothy C. Devine;         *     District Court for the
Donald       Griesmer;       Ronald      *     Eastern District of Missouri.
Kaemmerer; Ferguson News Co.,            *
Inc., a Missouri Corporation; Felix      *
Kucenas; Thomas J. Murphy; Ann           *
S. Pointer; Cyril Salvo; Norman          *
Segall; Robert Stroud; Jack R.           *
Vogt; Harold Weggeman,                   *
                                         *
             Appellants,                 *
                                         *
      v.                                 *
                                         *
Pulitzer Publishing Company, a           *
Corporation,                             *
                                         *
             Appellee.                   *


                                 ________________

                                 Submitted: June 11, 1998
                                     Filed: December 1, 1998
                                 ________________
Before HANSEN and MURPHY, Circuit Judges, and DOTY,1 District Judge.
                       ________________

HANSEN, Circuit Judge.

       Appellants brought an action pursuant to Section 2(a) of the Robinson-Patman
Price Discrimination Act ("the Act"), 15 U.S.C. § 13(a) (1994), claiming that Pulitzer
Publishing Company ("Pulitzer") engaged in illegal discriminatory sales of the Saint
Louis Post-Dispatch newspaper ("the Post Dispatch"). On Pulitzer's motion, the
district court dismissed the action for lack of subject-matter jurisdiction pursuant to
Fed. R. Civ. P. 12(b)(1). Because we conclude the district court erred in its
jurisdictional analysis, we reverse and remand.

                                           I.

        Pulitzer publishes the Post-Dispatch and distributes it by three primary methods.
First, Pulitzer distributes newspapers for sale in vending machines and at retail outlets
through independent contractors known as "branch dealers" or "branchmen." Second,
Pulitzer sells newspapers to a network of independent carriers who then resell the
papers to home subscribers. Finally, Pulitzer sells a limited number of newspapers to
direct subscribers. This appeal involves the first method of distribution—sales via
branch dealers.

       Appellants are 17 of the roughly 37 branch dealers in the St. Louis area. Three
of these 17 branch dealers operate in Illinois; 14 are based in Missouri. The 20
remaining branch dealers operate in either Missouri or Illinois. None of the 37 operate
in both Missouri and Illinois. Pulitzer prints the Post Dispatch in Missouri and then



      1
      The Honorable David S. Doty, United States District Judge for the District of
Minnesota, sitting by designation.
                                           2
ships copies across the Mississippi River to Illinois for resale by the branch dealers
located in that state.

       Under this distribution method, the branch dealers purchase newspapers from
Pulitzer and then resell them to retail outlets (newsstands, convenience stores,
supermarkets, etc.) and via vending machines located within their service area. Each
branch dealer operates within a clearly defined service area. Further, the branch
dealers have historically recognized these service areas as being exclusive territories
and appear to respect the historic boundaries between service areas.2

       As filed with the district court, the complaint included 19 counts, each count
alleging a violation of Section 2(a) of the Act, 15 U.S.C. § 13(a). Of these 19 counts,
only Count I remains at issue. In Count I, appellants sought an injunction against
Pulitzer based on an allegedly discriminatory pricing scheme. Specifically, appellants
asserted that Pulitzer violated the Act by selling the Post-Dispatch to certain branch
dealers at a lower price than Pulitzer sold the newspapers to appellants. Section 2(a)
of the Act provides that:

      It shall be unlawful for any person engaged in commerce, in the course of
      such commerce . . . to discriminate in price between different purchasers
      of commodities of like grade and quality, where either or any of the
      purchases involved in such discrimination are in commerce, . . . and
      where the effect of such discrimination may be substantially to lessen


      2
       Pulitzer asserts that while this exclusivity is not contractually mandated, the
branch dealers operate as though the service areas are exclusive. (Appellee's Br. at
1-2.) We think that it is fair to say that appellants have conceded this point. We
have found nothing in their briefs or other papers indicating that appellants disagree
with Pulitzer's characterization. Further, in their initial brief filed with this court,
appellants both illustrated and discussed the boundaries between each branch
service area without suggesting that any branch dealer ever disregarded these
boundaries.
                                            3
      competition or tend to create a monopoly in any line of commerce, or to
      injure, destroy, or prevent competition with any person who either grants
      or knowingly receives the benefit of such discrimination, or with
      customers of either of them . . . .

Id. (emphasis added).

        Courts and commentators compartmentalize Robinson-Patman claims into three
types of violations. First, "[a] primary-line violation occurs where the discriminating
seller's price discrimination adversely impacts competition with his—the
seller's—competitors." Best Brands Beverage, Inc. v. Falstaff Brewing Corp., 842 F.2d
578, 584 n.1 (2d Cir. 1987) (citations omitted). "[A] secondary-line violation occurs
where the discriminating seller's price discrimination injures competition among [the
seller's] customers . . . ." Id. Finally, a tertiary violation occurs when, although "the
purchasers of the discriminating seller did not compete directly, their customers
competed within a unified market region." Id.

       Appellants claim that Pulitzer's price discrimination harms competition between
branch dealers. Thus, they claim a secondary-line violation. In particular, appellants
alleged and Pulitzer admitted that Pulitzer reduced the price it charged certain branch
dealers while continuing to charge appellants a relatively higher price. (Appellants'
App. at 148, 167.) In this context, we refer to those branch dealers receiving the lower
price as "favored branch dealers," and refer to the appellants as "disfavored branch
dealers." Cf. Best Brands, 842 F.2d at 584.

       Pulitzer filed a motion to dismiss for lack of subject-matter jurisdiction pursuant
to Fed. R. Civ. P. 12(b)(1). The district court granted discovery for the limited purpose
of determining the existence of jurisdiction. At the close of this discovery period, the
court concluded that the appellants satisfied the Act's "in commerce" requirement.
Despite this conclusion, the court dismissed the appellants' claim for lack of subject-
matter jurisdiction because the appellants failed to provide sufficient evidence that the
                                            4
favored and disfavored branch dealers compete for sales. Appellants appeal the
dismissal of Count I.

                                           II.
       Appellants argue three issues on appeal. First, appellants claim that jurisdiction
under Section 2(a) of the Act does not depend on a competitive relationship between
favored and disfavored buyers. Second, appellants contend that even if such a
jurisdictional requirement exists, they sufficiently demonstrated a competitive
relationship between the branch dealers. Finally, appellants argue that in any event, the
competitive relationship issue is so intermeshed with the merits that it should be
resolved only after a full trial. We agree with appellants—jurisdiction under Section
2(a) does not require a showing of a competitive relationship—therefore, we do not
reach the second and third arguments.

       The district court held that it lacked subject-matter jurisdiction because the
appellants failed to show a competitive relationship between the favored and disfavored
branch dealers. Implicitly, therefore, the court concluded that such a relationship was
a jurisdictional prerequisite under the Act. Such a conclusion presents a question of
law which we review de novo. See United States v. S.A., 129 F.3d 995, 998 (8th Cir.
1997) (reviewing subject-matter jurisdiction and statutory interpretation de novo), cert.
denied, 118 S. Ct. 1200 (1998). Our review of the district court's fact-findings is
governed by the principles laid out in Osborn v. United States, 918 F.2d 724 (8th Cir.
1990). In Osborn, we held that a district court has power to decide issues of disputed
fact when ruling on a Rule 12(b)(1) motion to dismiss for lack of jurisdiction. Id. at
729. "Jurisdictional issues, whether they involve questions of law or fact, are for the
court to decide." Id. (citing Williamson v. Tucker, 645 F.2d 404, 413 (5th Cir.), cert.
denied, 454 U.S. 897 (1981)). When, as in this case, the district court relies "on its
own determination of disputed factual issues, [we] review those findings under the
'clearly erroneous' standard." Id. at 730 (citing Williamson, 645 F.2d at 413).


                                           5
       Federal courts are courts of limited jurisdiction. See Steel Co. v. Citizens for a
Better Env't, 118 S. Ct. 1003, 1012 (1998). "The requirement that jurisdiction be
established as a threshold matter 'spring[s] from the nature and limits of the judicial
power of the United States' and is 'inflexible and without exception.'" Id. (quoting
Mansfield, C. & L.M.R. Co. v. Swan, 111 U.S. 379, 382 (1884)) (alteration in
original). It is with these principles in mind that we undertake to ascertain the
requirements of subject-matter jurisdiction in the instant case.

        Unlike other federal antitrust legislation, namely the Sherman Act, jurisdiction
under the Robinson-Patman Act is relatively narrow and "extends only to persons and
activities that are themselves 'in commerce.'" Gulf Oil Corp. v. Copp Paving Co., 419
U.S. 186, 194 (1974). Jurisdiction under Section 2(a) of the Robinson-Patman Act is
not established "merely by showing that allegedly anticompetitive acquisitions and
activities affect commerce." Id. at 195 (emphasis added). "With almost perfect
consistency, the Courts of Appeals have read the language requiring 'either or any of
the purchases involved in such discrimination (be) in commerce' to mean that § 2(a)
applies only where 'at least one of the two transactions which, when compared,
generate discrimination . . . cross(es) a state line.'" Id. at 200 (quoting Hiram Walker,
Inc. v. A & S Tropical, Inc., 407 F.2d 4, 9 (5th Cir.), cert. denied, 396 U.S. 901
(1969); Belliston v. Texaco, Inc., 455 F.2d 175, 178 (10th Cir.), cert. denied, 408 U.S.
928 (1972)) (alterations in original).

        Thus, the plain language of Section 2(a), and the cases interpreting that section,
clearly establish the jurisdictional nature of the Act's unique "in commerce"
requirement. The district court was correct to address this issue as a threshold matter
in determining its jurisdiction. See Steel Co., 118 S. Ct. at 1012. The district court
found that because Pulitzer's sales to branch dealers in Illinois crossed a state line, the
appellants satisfied the interstate commerce requirement. We cannot say such a finding
is clearly erroneous. Indeed, we agree. See Osborn, 918 F.2d at 730. Therefore, we
affirm the district court in this respect.

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       We find more troubling the district court's conclusion that appellants' satisfactory
showing on the "in commerce" issue did not end the jurisdictional inquiry. According
to the district court, appellants must also demonstrate a competitive relationship
between the favored and disfavored branch dealers. The plain language of Section 2(a)
suggests to us, however, that any inquiry into competition or into competitive
relationships, tests and goes to a plaintiff's prima facie case, and not to jurisdiction.3
And, as the Supreme Court recently reiterated, federal courts do not lose jurisdiction
on the mere possibility that a plaintiff's averments fail to state a cause of action. Steel
Co., 118 S. Ct. at 1010 (quoting Bell v. Hood, 327 U.S. 678, 682 (1946)).

       Our conclusion is strengthened by a review of the cases the district court cited
as establishing a competitive relationship as a jurisdictional requirement. In Best
Brands, for example, the Second Circuit held that a prima facie violation of the Act was
not shown in the absence of actual competition. 842 F.2d at 586. To be sure, the
Second Circuit left no doubt that a plaintiff in a secondary-line case must be able to
"prove that, as the disfavored purchaser, it was engaged in actual competition with the
favored purchaser(s)." Id. at 584. All of this, however, was in the context of reviewing
the denial of a directed verdict after a jury trial. Id. at 581. At no point did the court
attribute a jurisdictional quality to this competitive relationship requirement. To the
contrary, the court viewed this issue as relating to a plaintiff's prima facie case. Id. at
586.




      3
        We deliberately avoid the long, and ultimately fruitless, inquiry into the
legislative history of the Robinson-Patman Act. "The Robinson-Patman Act as a
whole was the product of such a complex series of interrelated legislative proposals
that congressional intent is unusually difficult to decipher." Mayer Paving and
Asphalt Co. v. General Dynamics Corp., 486 F.2d 763, 767 (7th Cir. 1973)
(citations and quotations omitted), cert. denied, 414 U.S. 1146 (1974). "This is
particularly true of the phrase requiring one of the sales to be 'in commerce.'" Id.
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        The remaining cases the district court relied on lead to the same conclusion. In
White Industries, Inc. v. Cessna Aircraft Co., 657 F. Supp. 687 (W.D. Mo. 1986), aff'd,
845 F.2d 1497 (8th Cir.), cert. denied, 488 U.S. 856 (1988), the court found that
favored and disfavored purchasers must compete in both a geographical and functional
sense. Id. at 703. White Industries, however, was a case tried to the court and decided
at the close of plaintiffs' evidence. Further, the district court in White Industries did not
treat this issue as a jurisdictional matter. In Stelwagon Mfg. Co. v. Tarmac Roofing,
the Third Circuit also treated the competitive relationship issue as an element of a
plaintiff's prima facie case, and not as a jurisdictional prerequisite. See 63 F.3d 1267,
1271 (3d Cir. 1995), cert. denied, 516 U.S. 1172 (1996). Based on the foregoing, we
think the district court erred in treating the competitive relationship issue as a threshold
jurisdictional question.

       While one might argue that the competitive relationship issue reflects an inherent
aspect of the "in commerce" jurisdictional requirement, and not a separate jurisdictional
hurdle, we find no basis in the language of the statute, and only a slight basis in federal
case law, for reaching this conclusion. In fact, the only meaningful authority for such
a conclusion comes from a single case. In Mayer Paving, the Seventh Circuit stated
that "[o]nly those purchases which might injure competition are 'involved' [in
commerce] under the Robinson-Patman Act." 486 F.2d at 769. The court
characterized the question as being "an analogue to standing," and concluded that "a
customer has standing only to raise and compare those sales which are injurious to his
competition." Id. at 770.

        While we find the logic of Mayer Paving somewhat seductive, we nonetheless
resist its temptation. We think that the effect on competition and the competitive status
of the preferred and disfavored purchasers are elements of the cause of action and go
more to the merits of the appellants' case than to jurisdiction. In reaching our
conclusion we are also mindful of the Court's recent admonition that "[d]ismissal for
lack of subject-matter jurisdiction because of the inadequacy of the federal claim is

                                             8
proper only when the claim is 'so insubstantial, implausible, foreclosed by prior
decisions of this Court, or otherwise completely devoid of merit as to not involve a
federal controversy.'" Steel Co., 118 S. Ct. at 1010 (quoting Oneida Indian Nation of
N.Y. v. County of Oneida, 414 U.S. 661, 666 (1974)).

       We hold, therefore, that appellants need not prove a competitive relationship
between allegedly favored and disfavored buyers in order to establish subject-matter
jurisdiction. It may be that appellants will be unable to prove any competitive
relationship, and consequently, no competitive harm. Those shortcomings of proof,
however, do not deprive the district court of jurisdiction—that is its power—to hear the
case. Moreover, while the district court made findings of fact on this issue based on
conflicting evidence, we choose not to pass judgment on those findings. Should the
issue of a lack of a competitive relationship between favored and disfavored branch
dealers present itself in the future, for example as part of a motion for summary
judgment, the district court would then review the evidence under a different standard.
See Bathke v. Casey's Gen. Stores, Inc., 64 F.3d 340, 342-43 (8th Cir. 1995).




                                           9
                                          III.

       In summary, we hold that the narrow "in commerce" jurisdictional requirement
for a secondary-line claim under Section 2(a) of the Robinson-Patman Act does not
also require that the favored and disfavored buyers stand in a competitive relationship.
The existence of such a competitive relationship is simply an element of a plaintiff's
prima facie case. Therefore, we reverse the district court's order dismissing Count I of
appellants' suit and remand the case for further proceedings in accordance with this
opinion.

DOTY, District Judge, dissenting.

       I respectfully dissent. Although I agree that the analysis of Section 2(a)
jurisdictional requirements does not require a separate finding of "in commerce" and
a "competitive relationship" between the preferred and disfavored purchaser, I am
willing to be seduced by Mayer Paving to the extent that it holds that a competitive
relationship is a necessary element of the "in commerce" jurisdictional requirement, and
because the lower court found that element lacking, would affirm.

      A true copy.

             Attest:

                     CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT




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