A Clear-Eyed Affirmation: The Ninth Circuit Affirms Plaintiffs’ Robinson-Patman Act Win

Key Takeaways

• In a Robinson-Patman Act (RPA)-related dispute between the manufacturer and wholesalers of Clear Eyes, a brand of eye drops, the Ninth Circuit affirmed[1] a rare jury verdict for plaintiffs.  
• The Ninth Circuit concluded that:
  • Operational differences (e.g., membership fees) do not insulate club stores from liability.
  • To establish a Section 2(a) violation, plaintiffs need to show only a reasonable (not substantial) possibility of harm to competition.
  • A rebate offered directly to a customer at checkout must be factored into the club store’s effective purchase price.
• Overall, this decision makes it easier for plaintiffs to prevail on RPA claims.

The Robinson-Patman Act is a New Deal-era statute prohibiting sellers of commodity products from charging different prices to competing purchasers of those products.[2] In the modern era, courts are still grappling with whether or to what extent “club stores” with paid memberships compete with either wholesalers or retail grocery stores. 

Ninth Circuit Affirms RPA Jury Verdict

On February 24, 2026, the Ninth Circuit upheld a jury verdict finding that Prestige Consumer Healthcare, Inc. and its subsidiary Medtech Products, Inc. (together, Prestige) violated the RPA. The case centered on whether Prestige sold its Clear Eyes eye drops to large club stores[3] at significantly lower prices than it charged smaller wholesale distributors.

The wholesaler plaintiffs proved that Prestige discriminated against them in two key ways. First, Prestige charged them higher invoice prices than it charged club stores. Second, Prestige offered the club stores instant rebates and advertising program opportunities that were never made available to the smaller wholesalers. Plaintiffs alleged that those pricing disparities made it impossible for them to compete effectively with the club stores.

Takeaway 1 – Operational Differences Do Not Insulate Club Stores From Liability

Prestige challenged the district court’s refusal to instruct the jury that plaintiff wholesalers must have been competing with club stores for “the same dollar.”[4] Prestige argued that the club stores’ membership structure meant they were serving an entirely different market and customer base than the wholesaler plaintiffs. The Ninth Circuit was not persuaded. It agreed with the district court that club stores fit comfortably within the “typical chain store paradigm” recognized in earlier Ninth Circuit RPA precedent[5] and saw no reason to draw a distinction between club stores and more traditional wholesalers.

The takeaway here is the Ninth Circuit appears to have solidified its position that operational differences—like membership requirements and fee structures—will not move the needle on the “in competition” analysis. What matters is whether the favored purchasers and plaintiffs share geographical proximity, purchase goods of the same grade and quality around the same time, and operate at the same functional level (such as wholesaling).[6] If those boxes are checked, courts are more likely to find them in competition with one another for RPA purposes.

Takeaway 2 – Section 2(a) Violations Require a Reasonable Possibility of Harm to Competition

On appeal, Prestige argued that the district court erred by failing to instruct the jury that plaintiffs must demonstrate substantial harm to competition to prove a violation. Under Section 2(a) of the RPA, price discrimination is unlawful when its effect “may be substantial[] to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition” with those who grant or receive the discriminatory pricing, or with their customers.[7]

The Ninth Circuit disagreed, holding that “[a] showing of substantial harm is not required to establish competitive injury"[8] because “substantially” did not modify “to injure, destroy, or prevent competition.” The court endorsed the district court’s utilization of the American Bar Association’s Model Jury Instructions in Civil Antitrust Cases, which requires a plaintiff to establish “a reasonable possibility of harm to competition” in Section 2(a) cases.[9] The practical result of this interpretation is that RPA claims in the Ninth Circuit remain subject to a more plaintiff-friendly standard. Other courts have also adopted this “reasonable possibility” threshold for the RPA’s harm requirement.[10]

Takeaway 3 – Rebates Provided to End Customers Directly Are Not a Loophole

One of Prestige’s club store resellers provided customers with a “$3.00 instant rebate” on 12-packs of Clear Eyes at checkout, courtesy of Prestige. Prestige argued this rebate should be excluded from the Section 2(a) calculation because, technically, it went directly to the end customer—not to the reseller itself. The Ninth Circuit rejected this argument, affirming the district court’s holding that “rebates given to [club store] customers at the checkout register must be counted toward the calculation of the net price at which Prestige sold Clear Eyes to [club stores].”[11] The court reasoned that distinguishing between discounts to resellers and discounts to end customers elevates form over substance. As the court explained, “[a]t bottom, the rebate at issue here reduced [the club store’s] net price for a box of Clear Eyes. And [the club store] used that cost reduction to lower the prices of Clear Eyes for its customers[.]”[12] In other words, the economic reality matters more than the mechanics.

The practical takeaway is that structuring promotional programs to flow through end customers—rather than directly to resellers—will not insulate a company from RPA liability. Courts can look past the formal structure to examine whether certain buyers are receiving preferential treatment.

Conclusion

Although RPA enforcement may not be a current Federal Trade Commission priority, the Ninth Circuit’s decision is a reminder that private enforcement of the RPA continues unabated. Overall, this decision is plaintiff-friendly, making it easier for plaintiffs to succeed on RPA claims, and could increase private RPA enforcement.

Endnotes

[1] L.A. Int’l Corp. v. Prestige Brands Holdings, Inc., No. 24-3776, 2026 WL 504763 (9th Cir. Feb. 24, 2026).

[2] 15 U.S.C. § 13(a).

[3] These club stores were resellers to retailers and did not sell to individual consumers. As the wholesaler plaintiffs alleged in their First Amended complaint, “[Wholesaler] Plaintiffs compete directly with [the club stores] for sales of Clear Eyes to convenience stores and other retail outlets, as well as to other small wholesalers who are not on direct with [Prestige].” Am. Compl. ¶ 6, L.A. Int’l Corp. v. Prestige Brands Holdings, Inc., 2:18-cv-6809 (C.D. Cal Aug. 20, 2018).

[4] Prestige Brands Holdings, 2026 WL 504763, at *8.

[5] U.S. Wholesale Outlet & Distrib., Inc. v. Innovation Ventures, LLC, 89 F.4th 1126, 1147 (9th Cir. 2023).

[6] Prestige Brands Holdings, 2026 WL 504763, at *9.

[7] 15 U.S.C. § 13(a).

[8] Prestige Brands Holdings, 2026 WL 504763, at *7.

[9] ABA Model Instructions, Robinson-Patman Act, Seller Liability—Section 2(a), Instruction No. 10, Competitive Injury; see also U.S. Wholesale Outlet & Distrib., Inc. v. Innovation Ventures, LLC, 89 F.4th 1126, 1134 (9th Cir. 2023) (listing the requirements of secondary-line discrimination but not including the word “substantial”).

[10] E.g., Falls City Indus., Inc. v. Vanco Beverage, Inc., 460 U.S. 428, 434-35 (1983) (“To establish a prima facie violation of § 2(a), one of the elements a plaintiff must show is a reasonable possibility that a price difference may harm competition.”) (citation omitted); Delta Marina, Inc. v. Plaquemine Oil Sales, Inc., 644 F.2d 455, 458 (5th Cir. 1981) (“A violation of section 2(a) also requires a showing that the effect of the pricing adjudged to be discriminatory ‘may be substantially to lessen competition ... or to injure, destroy, or prevent competition.’ [W]e have held that this requirement may be satisfied simply by a showing of a ‘reasonable possibility’ of such an effect[.]”) (citations omitted).

[11] Prestige Brands Holdings, 2026 WL 504763, at *10.

[12] Id.