UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT U.S. WHOLESALE OUTLET & No. 21-55397 DISTRIBUTION, INC.; TREPCO IMPORTS AND DISTRIBUTION, D.C. No. LTD.; L.A. INTERNATIONAL 2:18-cv-01077- CORPORATION; CALIFORNIA CBM-E WHOLESALE; YNY INTERNATIONAL, INC.; EASHOU, INC., DBA San Diego Cash and OPINION Carry; SANOOR, INC., DBA L.A. Top Distributor,

Plaintiffs-Appellants,

v. INNOVATION VENTURES, LLC; LIVING ESSENTIALS, LLC,

Defendants-Appellees.

Appeal from the United States District Court for the Central District of California Consuelo B. Marshall, District Judge, Presiding 2 U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

Argued and Submitted June 7, 2022 Seattle, Washington

Filed July 20, 2023

Before: Ronald Lee Gilman,* Sandra S. Ikuta, and Eric D. Miller, Circuit Judges.

Opinion by Judges Miller and Ikuta;** Partial Concurrence and Partial Dissent by Judge Gilman; Partial Dissent by Judge Miller

SUMMARY***

Robinson-Patman Price Discrimination Act

The panel affirmed in part and vacated and reversed in part the district court’s judgment after a jury trial and a bench trial in favor of the defendants in an action brought under the Robinson-Patman Price Discrimination Act by U.S. Wholesale Outlet & Distribution, Inc., and other California wholesale businesses.

* The Honorable Ronald Lee Gilman, United States Circuit Judge for the U.S. Court of Appeals for the Sixth Circuit, sitting by designation. ** Judge Ikuta authored Part III. *** This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC 3

Parts I and II, authored by Judge Miller Defendant Living Essentials, LLC, sold its 5-hour Energy drink to the Costco Wholesale Corporation and also to the plaintiff wholesalers, who alleged that Living Essentials offered them less favorable pricing, discounts, and reimbursements in violation of the Robinson-Patman Act. On summary judgment, the district court found that the wholesalers had proved the first three elements of their section 2(a) claim for secondary-line price discrimination. At a jury trial on the fourth element of section 2(a), whether there was a competitive injury, the jury found in favor of defendants. At a bench trial on the wholesalers’ section 2(d) claim for injunctive relief, the court ruled in favor of defendants. Affirming in part, the panel held that the district court did not abuse its discretion in finding that there was some factual foundation for instructing the jury that section 2(a) required the wholesalers to show, as part of their prima facie case, that Living Essentials made “reasonably contemporaneous” sales to them and to Costco at different prices. The panel further held that the district court did not abuse its discretion in instructing the jury that the wholesalers had to prove that any difference in prices could not be justified as “functional discounts” to compensate Costco for marketing or promotional functions. The panel concluded that the functional discount doctrine was legally available to defendants regardless of whether the wholesalers and Living Essentials were at the same level in the distribution chain, and that there was some foundation in the evidence to support the jury instruction. 4 U.S. WHOLESALE OUTLET & DISTR. V. INNO. VENTURES, LLC

Part III, authored by Judge Ikuta Section 2(d) of the Robinson-Patman Act provides that it is unlawful for a seller to pay anything of value to or for the benefit of a customer in connection with the sale of a product unless th