Colorado § 6-2-103 - Discriminatory sales - exceptions.

§ 6-2-103. Discriminatory sales - exceptions.

(1) It is unlawful for any person, firm, or corporation doing business in the state of Colorado and engaged in the production, manufacture, distribution, or sale of any commodity, product, or service of general use or consumption, or the sale of any merchandise or product by any public utility, with the intent to destroy the competition of any regular established dealer in such commodity, product, or service, or to prevent the competition of any person, firm, private corporation, or municipal or other public corporation that in good faith intends and attempts to become a dealer, to discriminate between different sections, communities, or cities, or portions thereof, or between different locations in such sections, communities, cities, or portions thereof in this state by selling or furnishing a commodity, product, or service at a lower rate in one section, community, or city, or any portion thereof, or in one location in such section, community, or city, or any portion thereof than in another after making allowance for the difference, if any, in the grade or quality, quantity, and actual cost of transportation from the point of production, if a raw product or commodity, or from the point of manufacture, if a manufactured product or commodity. Motion picture films when delivered under a lease to motion picture houses shall not be deemed to be a commodity or product of general use or consumption.

(2) Nothing in this article shall be construed to affect or apply to any service or product sold, rendered, or furnished by any public utility, the sale, rendition, or furnishing of which is subject to regulation by the Colorado public utilities commission or by any municipal regulatory body. This article shall not be construed to prohibit the meeting in good faith of a competitive rate.

(3) The inhibition in this section against locality discrimination shall embrace any scheme of special rebates, collateral contracts, or any device of any nature whereby such discrimination is, in substance or fact, effected in violation of the spirit and intent of this article.

(4) It is an unfair trade practice for any person, firm, or corporation doing business in this state and engaged in the production, manufacture, or distribution of either written or printed material or motion pictures to require a buyer or lessee, as a condition of the purchase or lease of such material or motion pictures, to accept other material or motion pictures which the buyer or lessee deems objectionable and written objection is made thereto by such buyer or lessee to the seller or lessor of said material or motion pictures within thirty days after delivery to said buyer or lessee. If such written objection is made within the time provided in this subsection (4), and the seller or lessor does not, within ten days of the receipt of said objection, repurchase or recall such objectionable material or motion pictures from the buyer or lessee, all the remedies provided in this article shall be applicable against said seller or lessor. The provisions of this subsection (4) shall apply whether the material or motion pictures are acquired by the buyer or lessee for resale, sublease, or for any other purpose.

Source: L. 37: p. 1280, § 1. CSA: C. 48, § 302(1). L. 41: p. 820, § 1. L. 49: p. 342, § 1. CRS 53: § 55-2-1. C.R.S. 1963: § 55-2-1. L. 69: p. 368, § 1. L. 2007: (1) amended, p. 513, § 1, effective April 16.

ANNOTATION

Law reviews. For article, "The Unfair Practices Act of Colorado and Its Recent Amendment", see 26 Dicta 162 (1949). For article, "One Year Review of Civil Procedure and Appeals", see 38 Dicta 133 (1961). For article, "One Year Review of Constitutional and Administrative Law", see 38 Dicta 154 (1961). For article, "Antitrust and the Lay Lawyer", see 44 Den. L.J. 558 (1967). For article, "May Regulated Utilities Monopolize the Sun?", see 56 Den. L.J. 31 (1979).

A "fair trade" price maintenance contract as described by this section is lawful. United States v. Frankfort Distilleries, 324 U.S. 293 (1945), rev'g 144 F.2d 824 (1944).

This section is not a price-fixing law. Dikeou v. Food Distribs. Ass'n, 107 Colo. 38, 108 P.2d 529 (1940).

Its purpose is to prevent ruinous price-cutting, by which the business of competitors might be injured and competition destroyed. Dikeou v. Food Distribs. Ass'n, 107 Colo. 38, 108 P.2d 529 (1940).

Consumers' payment of overcharges qualifies as a type of injury that the statute was designed to prevent. Dunlap v. Colo. Springs Cablevision, Inc., 829 P.2d 1286 (Colo. 1992).

Act applies whenever a business charges different prices to purchasers based on geographic differences with an intent to drive out competition in one geographic area. The act does not require that a business have more than one location. Dunlap v. Colo. Springs Cablevision, Inc., 855 P.2d 6 (Colo. App. 1992) (decided on remand from 829 P.2d 1286 (Colo. 1992)); Ervin v. Amoco Oil Co., 885 P.2d 246 (Colo. App. 1994), aff'd, 908 P.2d 493 (Colo. 1995).

A retailer, not guilty of any fraud or deception, who takes a smaller profit than another retailer is willing to accept for the same commodity is not engaged in unfair competition. Olin Mathieson Chem. Corp. v. Francis, 134 Colo. 160, 301 P.2d 139 (1956).

Actions performed for the purpose of injuring competitors or destroying competition are the only ones that violate this law, this purpose or intention is manifestly intended to be a vital element of the violation. Miller's Groceteria Co. v. Food Distribs. Ass'n, 107 Colo. 113, 109 P.2d 637 (1941).

Thus, where the evidence shows that defendants entered upon a carefully planned, intensive campaign, using nearly all of the common "tricks of the trade" to break into the market in the territory served by competitors, such constitutes a violation of this act. Old Homestead Bread Co. v. Marx Baking Co., 108 Colo. 375, 117 P.2d 1007 (1941).

Also, forcing such contracts is unlawful. Combinations of producers, wholesalers, and retailers, or any of them, to force others into making "fair trade" contracts are not lawful. United States v. Frankfort Distilleries, 324 U.S. 293 (1945), rev'g 144 F.2d 824 (1944).

Unfair practices act applicable to title insurance. The state's unfair practices act is applicable to the business of title insurance. Commander Leasing Co. v. Transamerica Title Ins. Co., 477 F.2d 77 (10th Cir. 1973).

This act is not analogous to federal Robinson-Patman Price Discrimination Act. Colorado's Unfair Practices Act does not cover discrimination between purchasers, but rather discrimination based upon and directed at geographic differences, termed "locality discrimination". Venta, Inc. v. Frontier Oil & Ref. Co., 827 F. Supp. 1526 (D. Colo. 1993).

Applied in Q-T Mkts., Inc. v. Fleming Cos., 394 F. Supp. 1102 (D. Colo. 1975); Carlock v. Pillsbury Co., 719 F. Supp. 791 (D. Minn. 1989).