                    United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                  ___________

                                  No. 01-1647
                                  ___________

Thomas M. Godfrey, et al.,             *
                                       *
            Appellant,                 *
                                       * Appeal from the United States
      v.                               * District Court for the Eastern
                                       * District of Missouri.
Pulitzer Publishing Co.,               *
                                       *
            Appellee.                  *
                                       *
                                  ___________

                           Submitted: November 12, 2001
                              Filed: January 9, 2002
                                   ___________

Before WOLLMAN, Chief Judge, BOWMAN, and STAHL,1 Circuit Judges.
                             ___________

STAHL, Circuit Judge.

      Appellants Thomas M. Godfrey, et al., brought an action against Pulitzer
Publishing Co. ("Pulitzer") pursuant to the Robinson-Patman Act § 2(a), 15 U.S.C.
§ 13(a) (1994), claiming that appellee had engaged in anticompetitive sales of its




      1
        The Honorable Norman H. Stahl, United States Circuit Judge for the First
Circuit, sitting by designation.
newspaper, the St. Louis Post-Dispatch ("the Post-Dispatch"). The district court2
granted summary judgment in favor of Pulitzer and the appellants brought this
appeal. We affirm.

                                   I. Background

       Appellants are branch dealers, or "branchmen," who purchase copies of the
Post-Dispatch from Pulitzer at a discount and resell the newspapers to retail
outlets, called "subs," and to the public through vending machines. Branchmen
operate in exclusive geographic service areas, stocking vending machines or
selling to subs only in their own territories. Under state law the relationship
between branchmen and the publisher is not merely one of contract terminable at
will; rather, branchmen have a property right in their branches that allows them to
convey or sell their interest.3 Miskimen v. Kansas City Star, 684 S.W.2d 394, 402
(Mo. App. 1984). Appellants are fourteen of the more than thirty branch dealers in
the St. Louis area; three of them operate in Illinois and the remainder operate in
Missouri.

       The law suit underlying this appeal arose from an offer made by Pulitzer on
May 8, 1996, to all branch dealers. At that time, branch dealers had threatened
Pulitzer with litigation on a number of issues arising out of their business
relationship. Pulitzer's offer, if accepted, entitled each branch dealer to lower


      2
        The Honorable Carol E. Jackson, United States District Judge for the Eastern
District of Missouri.
      3
        Miskimen, a case involving a dispute between the Kansas City Star and its
branch dealers, held that the publisher's conduct "created a reasonable expectation
that each carrier owned a business that could be conveyed and sold in the knowledge
based upon over ninety years of history that the carrier's business would continue so
long as the individual carrier performed his part of the bargain." 684 S.W.2d at 402.

                                         -2-
wholesale prices and increased subsidies and allowances4 in return for signing a
release of any possible claims against Pulitzer. A number of branch dealers
accepted the original offer, a few others accepted after negotiating terms ensuring
that their property rights in the branches would not be affected by the agreement
(collectively, the "favored branch dealers"). Appellants rejected the offer,
apparently because they believed that their potential causes of action against
Pulitzer were worth more than the discounts and allowances available under the
settlement 5 and because they remained concerned that their property interest in
their branches would be threatened under the terms of the agreement.

       The settlement offer stated that the new rates, fees and allowances would be
available to the branch dealers upon execution of the agreement, but specified that
"[a]fter the third year, these rates, fees and allowances may be revised by us from
time to time" (Branch Dealer General Release Agreement, May 8, 1996).
Although three years have passed since the execution of the agreements with the
favored branch dealers, Pulitzer has not to date chosen to exercise its option to
revise the rates, fees, or allowances.

       On August 9, 1996, appellants filed a complaint in the district court,
alleging price discrimination in violation of section 2(a) of the Robinson-Patman
Act, 15 U.S.C. § 13(a). Appellants sought an injunction against Pulitzer in an
attempt to prevent appellee from selling newspapers at the more favorable rates to




      4
        Dealers receive allowances and subsidies for performing certain tasks such
as inserting advertising sections or replacing rack cards in vending machines.
      5
         Indeed, appellants eventually brought claims alleging violations of the
Missouri Antitrust Law. These claims are currently pending in state court. Godfrey
v. Pulitzer Publishing Co., No. 982-319, Circuit Court for the City of St. Louis,
Missouri.

                                        -3-
the branch dealers who had signed the agreement.6 In the proceedings that have
followed, appellants have argued that the favorable rates were not and are not
available to them on equal terms. They reason first that, at the time of the original
offer, they would have had to give up more in rights than the favored branchmen
in order to receive the enhanced rates. They argue second that, by continuing the
enhanced rates after the expiration of the three year period during which the rates
were guaranteed, Pulitzer has effectively given the favored branch dealers an
additional benefit that was never presented to appellants on the face of the offer.

      Section 2(a) states in relevant part 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 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 . . .

15 U.S.C. § 13(a). Thus, in order to establish a violation of the Act, appellants
must show (1) that Pulitzer discriminated in price between appellants and the
favored branch dealers; (2) that this price discrimination substantially affected
competition between the appellants and the favored branch dealers;7 (3) that the

      6
       The original complaint included nineteen counts, each alleging a violation of
Section 2(a). At issue in this appeal is only Count I, which sought the injunction
based on Pulitzer's allegedly discriminatory pricing scheme.
      7
         As we laid out in Godfrey v. Pulitzer Publ'g Co., 161 F.3d 1137, 1140 (8th
Cir. 1998) (hereinafter "Godfrey I"), courts have held that section 2(a) applies to three
categories of violations: A primary-line violation occurs where "the discriminating
seller's price discrimination adversely impacts competition with his -- the seller's --
competitors;" a secondary-line violation occurs where "the discriminating seller's

                                          -4-
newspaper sales occurred in interstate commerce;8 and (4) that the newspapers
sold were of like grade and quality. Id. While there is no dispute that the fourth
requirement is met here, the parties disagree as to whether appellants have shown
the first three.

       The district court initially dismissed appellants' case for lack of subject
matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1). Specifically, the court
reasoned that appellants had satisfied the interstate commerce requirement of
Section 2(a), but that jurisdiction was nevertheless improper because appellants
had been unable to show that there was a competitive relationship between them
and the favored branch dealers, given that the branchmen operated in exclusive
territories. On appeal, we affirmed the district court's holding as to the interstate
commerce requirement, but reversed on the issue of the competitive relationship
between appellants and the favored branch dealers, holding that the effect on
competition was not a jurisdictional requirement but rather an element of
appellants' prima facie case. Godfrey v. Pulitzer Publ'g Co., 161 F.3d 1137 (8th
Cir. 1998) (hereinafter "Godfrey I"). We stated that "[i]t may be that appellants
will be unable to prove any competitive relationship, and consequently, no
competitive harm," but "[t]hose shortcomings of proof . . . do not deprive the
district court of jurisdiction -- that is its power -- to hear the case." Id. at 1142.


price discrimination injures competition among [the seller's] customers . . . ;" and a
tertiary violation occurs where the customers of the purchasers of the discriminating
seller "compete[] within a unified market region." Best Brands Beverage, Inc. v.
Falstaff Brewing Corp., 842 F.2d 578, 584 n.1 (2d Cir. 1987) (citation omitted).
Appellants have alleged a secondary-line violation where appellants and favored
branch dealers are customers of Pulitzer, the allegedly discriminating seller. Godfrey
I, 161 F.3d at 1140.
      8
        The term "commerce" in section 2(a) refers to "trade or commerce among the
several States and with foreign nations . . . ." Clayton Act § 1(a), 15 U.S.C. § 12(a);
Gulf Oil Corp. v. Copp Paving Co., 419 U.S. 186, 194 (1974).

                                          -5-
       On remand, the district court granted Pulitzer's motion for summary
judgment under Fed. R. Civ. P. 56(c). The court decided the case primarily on
prong 1, holding that appellants had not shown that Pulitzer had discriminated in
price between them and the favored branch dealers and that the offer in fact had
been made to all branchmen on equal terms and had contemplated that the
agreement would extend beyond three years. The court alternatively held that,
because the branch dealers limited their sales to non-overlapping territories, any
price discrimination could not affect competition between the appellants and the
favored branch dealers.9

      Appellants filed motions to alter or amend the judgment under Fed. R. Civ.
P. 59(e), or, in the alternative, for relief from judgment pursuant to Fed. R. Civ. P.
60(b). The district court denied these motions. This appeal followed.

     We review de novo the district court's decision granting summary judgment.
See Bathke v. Casey's Gen. Stores, Inc., 64 F.3d 340, 343 (8th Cir. 1995). We


      9
        On remand, the district court additionally found that appellants' evidence was
not sufficient to establish the interstate commerce requirement. This conclusion is
puzzling, given our holding in Godfrey I affirming that the interstate commerce
requirement of section 2(a) is jurisdictional in nature and that it has been met in this
case. 161 F.3d at 1141. At that time, we discussed the standard for determining
whether the "in commerce" requirement has been met: "'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 . . . crosses a state line.'" Godfrey I, 161 F.3d at 1141
(quoting Gulf Oil, 419 U.S. at 200) (internal quotation omitted). We agreed with the
district court that appellants had met this standard because the sales to the Illinois
branch dealers (some of whom are appellants and some of whom are favored branch
dealers) cross state lines. In our current review, which takes place in the context of
the grant of summary judgment on the same set of facts, we see no reason to abandon
our holding in Godfrey I.

                                          -6-
review the record in the light most favorable to the non-moving party, see id., and
determine whether the movant demonstrated that there are no outstanding issues of
material fact and that it is entitled to judgment as a matter of law, id.; Fed. R. Civ.
P. 56(c).

       We may affirm the district court's judgment on any grounds supported by
the record. See DeBruce Grain, Inc. v. Union Pac. R. Co., 149 F.3d 787, 790 (8th
Cir. 1998). In this case, we find that the district court's holding as to prong 2, that
appellants failed to show that the price discrimination had injured competition, is
dispositive and we affirm on that ground. We accordingly do not reach the
question of whether the favorable prices were equally available to appellants.

                            II. The Effect on Competition

       In keeping with the language of section 2(a) -- a violation occurs "where the
effect of [price] discrimination may be substantially to lessen competition . . . or to
injure, destroy, or prevent competition," 15 U.S.C. § 13(a) (emphasis added), --
the Supreme Court has repeatedly held that section 2(a) does not "require that the
discriminations must in fact have harmed competition, but only that there is a
reasonable possibility that they 'may' have such an effect." Corn Products
Refining Co. v. FTC, 324 U.S. 726, 742 (1945). See Falls City Indus., Inc. v.
Vanco Beverage, Inc., 460 U.S. 428, 434-35 (1983); J. Truett Payne Co., Inc. v.
Chrysler Motors Corp., 451 U.S. 557, 561-62 (1981); FTC v. Morton Salt Co.,
334 U.S. 37, 46 (1948). The Supreme Court has further held that "for the
purposes of § 2(a), injury to competition is established prima facie by proof of a
substantial price discrimination between competing purchasers over time." Falls
City Indus., 460 U.S. at 435 (citing Morton Salt, 334 U.S. at 46, 50-51.). See also
White Indus., Inc. v. Cessna Aircraft Co., 845 F.2d 1497, 1501 (8th Cir. 1988).




                                          -7-
       This generous standard for inferring injury to competition, however, is
logically limited by the necessity that the purchasers be competitors in the first
place. See Ag-Chem Equip. Co., Inc. v. Hahn, Inc., 480 F.2d 482, 490 (8th Cir.
1973) ("As readily appears from a reading of the statute, evidence of the existence
of competition is essential for a violation of the Robinson-Patman Act."); Bales v.
Kansas City Star Co., 336 F.2d 439, 444 (8th Cir. 1964) (holding that section 2(a)
claim required no further consideration since "on the plain implication" of the
statutory provision, section 2(a) was intended to prevent "discriminations as
between competitors, which admittedly as to each other the distributors were
not"). In other words, only if the appellants and the favored branch dealers
engage in competition may there be injury to that competition. This position has
been most clearly articulated by the Second Circuit:

      In order to establish the requisite competitive injury in a secondary-line case
      [see fn. 7, supra], plaintiff must first prove that, as the disfavored purchaser,
      it was engaged in actual competition with the favored purchaser(s) as of the
      time of the price differential . . . . [This] requirement is satisfied where there
      is a showing of 'competitive contact' between the recipients of the price
      differential. It must therefore be shown that, as of the time the price
      differential was imposed, the favored and disfavored purchasers competed
      at the same functional level, i.e., all wholesalers or all retailers, and within
      the same geographic market.

Best Brands Beverage, Inc. v. Falstaff Brewing Co., 842 F.2d 578, 584-85 (2d Cir.
1987) (internal quotation and citation omitted). See also Stelwagon Mfg. Co. v.
Tarmac Roofing Sys., Inc. , 63 F.3d 1267, 1271 (3d Cir. 1995). We suggested in
Godfrey I that, on remand, appellants would not be able to prove "competitive
harm" without proving "any competitive relationship." 161 F.3d at 1142. Now,
for the reasons that follow, we hold that appellants have failed to make a showing
sufficient to establish that they were in a competitive relationship with the favored
branch dealers and find that they therefore cannot show any reasonable possibility
that the alleged price discrimination may affect competition.

                                          -8-
       We recognize at the outset that, although branch dealers operate in
exclusive geographic territories, that fact is not dispositive on the question of
competition. Even where parties operate in airtight territories, they compete if the
end-buyers of the product can freely travel between the geographic areas to
purchase the commodity in question.10 See Falls City Ind., 460 U.S. at 436-38
(holding that there was competition between wholesale distributors of beer who
sold exclusively in Indiana and Kentucky). In this case, however, we are dealing
with a commodity that sells at a fixed retail price. While retail purchasers of the
Post-Dispatch may admittedly choose which branch dealer's geographic area they
will patronize, this choice is not price-motivated.11 As the district court suggested,
for a newspaper customer the choice of which retail outlet or vending machine to
frequent is one of convenience, not of competitive advantage.

      Appellants counter that price is not the only determinant in competition.
They point to testimony by their expert witness and by a few branch dealers to


      10
         Two cases cited by Pulitzer for the proposition that newspaper distributors
operating in exclusive geographic territories do not compete, Newberry v.
Washington Post Co., 438 F. Supp. 470 (D.D.C. 1977) and Davidson v. Kansas City
Star Co., 202 F. Supp. 613 (W.D. Mo. 1962), are distinguishable. The distributors
in these cases delivered to homes and not to subs or vending machines. Unlike
customers of home delivery, retail customers can choose to purchase the newspaper
in an area other than their place of residence.
      11
          It is true, as appellants have argued, that the favored branch dealers can offer
lower prices to the subs in their territory than appellants can to the subs in their
territories. But, unlike the retail customers of the Post-Dispatch, the subs cannot
move outside of their geographic area to purchase from a branch dealer charging
lower rates; therefore there is no competition as to this aspect of the branch dealer's
business. The possibility, raised by appellants, that a chain store could purchase
copies of the Post-Dispatch from a favored branch dealer and then distribute copies
to its chain locations in non-favored territories, is mere speculation that is not
substantiated by any record evidence.

                                           -9-
argue that branchmen may compete in service. Appellants' contentions to this end
boil down to the argument that a certain number of retail customers purchase
newspapers early enough in the morning that they may find that the Post-Dispatch
has not yet been delivered to the sub or vending machine of their choice and
purchase the newspaper elsewhere. Thus, they argue, the appellants and the
favored branch dealers are in competition as to availability.

       Appellants' argument, while it has some theoretical bite, is not supported by
the record. We do not take issue with appellants' contention that the delivery time
of the papers is at least partially a function of investment in staff and delivery
vehicles and that the favored branch dealers can put the savings from favorable
rates toward such capital investments. If this were the only question, the record
arguably (although far from definitively) may support a finding that delivery time
is affected by the favorable rates. But, as we have explained supra, before we
reach the question of whether the price discrimination may affect competition as to
availability, we first must establish that there indeed is competition as to
availability.

       The record cannot support the contention that there is genuine competition
among the branch dealers as to availability. In the numerous citations to the
record supplied by appellants we find only one specific reference to a lost sale due
to late delivery.12 Even appellants' expert witness has not provided any tangible
evidence, numerical or anecdotal, to show that the branch dealers in fact compete
as to early availability. In this context, conclusory statements by a handful of
branchmen, attesting that such competition exists, hardly suffice to show
competition. In order to survive a motion for summary judgment, the non-moving


      12
         A customer who purchases a newspaper at Hardee's at 3:50 am every
morning buys in a different branch dealer's area if the paper is not available at the
Hardee's at that hour.

                                        -10-
party must be able to show "sufficient probative evidence [that] would permit a
finding in [his] favor on more than mere speculation, conjecture, or fantasy."
Moody v. St. Charles County, 23 F.3d 1410, 1412 (8th Cir. 1994) (internal
quotation omitted). Even reviewing the record in the light most favorable to
appellants, we cannot find that it supports a finding of competition as to
availability among appellants and the favored branchmen.

       Having found that there is no competitive relationship between the branch
dealers in the first place, we need not ask whether there is a reasonable possibility
that Pulitzer's pricing scheme may have affected competition.13 We therefore hold
that summary judgment in favor of Pulitzer was properly granted.

      We affirm.

A true copy.

  ATTEST:

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




      13
         To the extent that we do not consider whether competition is affected by the
alleged price discrimination, our analysis of course differs from that of the district
court, which additionally concluded that "[t]he court finds plaintiffs have not shown
that the price difference may harm competition." Given that our holding rests on the
lack of underlying competition, we need not reach appellants' argument that Pulitzer
had waived the question of competitive effects by failing to raise it in its motion for
summary judgment.

                                         -11-
