Jefferson Cty. Pharm. Ass'n v. Abbott Labs.Annotate this Case
460 U.S. 150 (1983)
U.S. Supreme Court
Jefferson Cty. Pharm. Ass'n v. Abbott Labs., 460 U.S. 150 (1983)
Jefferson County Pharmaceutical Association v. Abbott Laboratories
Argued November 8, 1982
Decided February 23, 1983
460 U.S. 150
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE FIFTH CIRCUIT
Petitioner trade association of retail pharmacists and pharmacies filed an antitrust suit in Federal District Court against respondent pharmaceutical manufacturers, the Board of Trustees of the University of Alabama, which operates pharmacies in connection with its hospitals, and a county hospital pharmacy. Petitioner alleged that respondent manufacturers violated the price-discrimination proscriptions of the Robinson-Patman Act by selling their products to respondent hospital pharmacies at prices lower than those charged petitioners' members for like products, and that respondent pharmacies knowingly induced such lower prices in violation of the Act and sold the drugs to the general public in direct competition with privately owned pharmacies. The District Court granted respondents' motions to dismiss the complaint, holding that state purchases are beyond the Act's intended reach. The Court of Appeals affirmed .
Held: The sale of pharmaceutical products to state and local government hospitals for resale in competition with private pharmacies is not exempt from the Act's proscriptions. Pp. 460 U. S. 153-171.
(a) The Act, by its terms, does not exempt state purchases, and the statutory language is sufficiently broad to cover governmental bodies. Thus, the Act's plain language strongly suggests that there is no exemption for state purchases to compete with private enterprise. Pp. 460 U. S. 154-157.
(b) Such an exemption is not supported by the purposes of the antitrust laws, including the Robinson-Patman Act. Those laws represent a carefully studied attempt to bring within them every person engaged in business whose activities might restrain or monopolize commercial intercourse among the States. And the Act's history does not reveal any legislative intention to enable a State, by an unexpressed exemption, to enter private competitive markets with congressionally approved price advantages. Pp. 460 U. S. 157-162.
(c) Nor is respondents' contention that state purchases are outside the Act's scope clearly supported by subsequent legislative events (particularly the hearings on the Act held in the late 1960's) or by court decisions or the interpretations of commentators and executive officials.
Thus, Congress cannot be said to have left untouched a universally held interpretation of the Act. Pp. 460 U. S. 163-170.
(d) It is not for this Court to indulge in the business of policymaking in the field of antitrust legislation. The legislative history is replete with references to the economic evil of large organizations purchasing from other large organizations for resale in competition with small, local retailers. To create an exemption in this case clearly would be contrary to Congress' intent. Pp. 460 U. S. 170-171.
656 F.2d 92, reversed and remanded.
POWELL, J., delivered the opinion of the Court, in which BURGER, C.J., and WHITE, MARSHALL, and BLACKMUN, JJ., joined. STEVENS, J., filed a dissenting opinion, post, p. 460 U. S. 171. O'CONNOR, J., filed a dissenting opinion, in which BRENNAN, REHNQUIST and STEVENS, JJ., joined, post, p. 460 U. S. 174.
JUSTICE POWELL delivered the opinion of the Court.
The issue presented is whether the sale of pharmaceutical products to state and local government hospitals for resale in competition with private retail pharmacies is exempt from the proscriptions of the Robinson-Patman Act.
Petitioner, a trade association of retail pharmacists and pharmacies doing business in Jefferson County, Alabama,
commenced this action in 1978 in the District Court for the Northern District of Alabama as the assignee of its members' claims. Respondents are 15 pharmaceutical manufacturers, the Board of Trustees of the University of Alabama, and the Cooper Green Hospital Pharmacy. The University operates a medical center, including hospitals, and a medical school. Located in the University's medical center are two pharmacies. Cooper Green Hospital is a county hospital, existing as a public corporation under Alabama law.
The complaint seeks treble damages and injunctive relief under §§ 4 and 16 of the Clayton Act, 38 Stat. 731, 737, 15 U.S.C. §§ 15 and 26, for alleged violations of §§ 2(a) and (f) of the Clayton Act, 38 Stat. 730, as amended by the Robinson-Patman Act (Act), 49 Stat. 1526, 15 U.S.C. §§ 13(a) and (f). Petitioner contends that the respondent manufacturers violated § 2(a) [Footnote 1] by selling their products to the University's two pharmacies and to Cooper Green Hospital Pharmacy at prices lower than those charged petitioner's members for like products. Petitioner alleges that the respondent hospital pharmacies knowingly induced such lower prices in violation of § 2(f) [Footnote 2] and sold the drugs to the general public in direct competition with privately owned pharmacies. Petitioner
also alleges that the price discrimination is not exempted from the proscriptions of the Act by 15 U.S.C. § 13c. [Footnote 3]
Respondents moved to dismiss the complaint on the ground that state purchases [Footnote 4] are exempt as a matter of law from the sanctions of § 2. In granting respondents' motions, the District Court expressly accepted as true the allegations that local retail pharmacies had been injured by the challenged price discrimination and that at least some of the state purchases were not exempt under § 13c. 656 F.2d 92, 98 (CA5 1981) (reprinting District Court's opinion as Appendix). The District Court held that
"governmental purchases are, without regard to 15 U.S.C. § 13c, beyond the intended reach of the Robinson-Patman Price Discrimination Act, at least with respect to purchases for hospitals and other traditional governmental purposes."
Id. at 102. The Court of Appeals for the Fifth Circuit, in a divided per curiam decision, affirmed "on the basis of the district court's Memorandum of Opinion." Id. at 93. [Footnote 5]
We granted certiorari to resolve this important question of federal law. 455 U.S. 999 (1982). We now reverse.
The issue here is narrow. We are not concerned with sales to the Federal Government, nor with state purchases
for use in traditional governmental functions. [Footnote 6] Rather, the issue before us is limited to state purchases for the purpose of competing against private enterprise -- with the advantage of discriminatory prices -- in the retail market. [Footnote 7]
The courts below held, and respondents contend, that the Act exempts all state purchases. Assuming, without deciding, that Congress did not intend the Act to apply to state purchases for consumption in traditional governmental functions, and that such purchases are therefore exempt, we conclude that the exemption does not apply where a State has chosen to compete in the private retail market.
The Robinson-Patman Act, by its terms, does not exempt state purchases. The only express exemption is that for
nonprofit institutions contained in 15 U.S.C. § 13c. [Footnote 8] Moreover, as the courts below conceded, "[t]he statutory language -- persons' and `purchasers' -- is sufficiently broad to cover governmental bodies. 15 U.S.C. §§ 12, 13(a, f)." 656 F.2d at 99. [Footnote 9] This concession was compelled by several of this Court's decisions. [Footnote 10] In City of Lafayette v. Louisiana Power & Light Co.,435 U. S. 389, 435 U. S. 395 (1978), for example, we stated without qualification that "the definition of `person' or `persons' embraces both cities and States.'" [Footnote 11]
Respondents would distinguish City of Lafayette from the case before us because it involved the Sherman Act, rather than the Robinson-Patman Act. [Footnote 12] Such a distinction ignores the specific reference to the Robinson-Patman Act in our discussion of the all-inclusive nature of the term "person." Id. at 435 U. S. 397, n. 14. We do not perceive any reason to construe the word "person" in that Act any differently than we have in the Clayton Act, which it amends, [Footnote 13] and it is undisputed that the Clayton Act applies to States. See Hawaii v. Standard Oil Co.,405 U. S. 251, 405 U. S. 260-261 (1972). [Footnote 14] In sum, the plain language
of the Act strongly suggests that there is no exemption for state purchases to compete with private enterprise.
The plain language of the Act is controlling unless a different legislative intent is apparent from the purpose and history of the Act. An examination of the legislative purpose and history here reveals no such contrary intention.
Our cases have been explicit in stating the purposes of the antitrust laws, including the Robinson-Patman Act. On numerous occasions, this Court has affirmed the comprehensive coverage of the antitrust laws, and has recognized that these laws represent
"a carefully studied attempt to bring within [them] every person engaged in business whose activities might restrain or monopolize commercial intercourse among the states."
United States v. South-Eastern Underwriters Assn.,322 U. S. 533, 322 U. S. 553 (1944). [Footnote 15] In Goldfarb v. Virginia State Bar,421 U. S. 773 (1975), the Court observed that "our cases have repeatedly established that there is a heavy presumption
against implicit exemptions" from the antitrust laws. Id. at 421 U. S. 787 (citing United States v. Philadelphia National Bank,374 U. S. 321, 374 U. S. 350-351 (1963); California v. FPC,369 U. S. 482, 369 U. S. 485 (1962)). [Footnote 16] In City of Lafayette, supra, applying antitrust laws to a city in competition with a private utility, we held that no exemption for local governments would be implied. The Court emphasized the purposes and scope of the antitrust laws:
"[T]he economic choices made by public corporations . . . designed as they are to assure maximum benefits for the community constituency, are not inherently more likely to comport with the broader interests of national economic wellbeing than are those of private corporations acting in furtherance of the interests of the organization and its shareholders."
These principles, and the purposes they further, have been helpful in interpreting the language of the Robinson-Patman
"It has been said, of course, that the antitrust laws, and Robinson-Patman in particular, are to be construed liberally, and that the exceptions from their application are to be construed strictly. United States v. McKesson & Robbins,351 U. S. 305, 351 U. S. 316 (1956); FMC v. Seatrain Lines, Inc.,411 U. S. 726, 411 U. S. 733 (1973); Perkins v. Standard Oil Co.,395 U. S. 642, 395 U. S. 646-647 (1969). The Court has recognized, also, that Robinson-Patman"
"was enacted in 1936 to curb and prohibit all devices by which large buyers gained discriminatory preferences over smaller ones by virtue of their greater purchasing power."
"FTC v. Broch & Co.,363 U. S. 166, 363 U. S. 168 (1960); FTC v. Fred Meyer, Inc.,390 U. S. 341, 390 U. S. 349 (1968). Because the Act is remedial, it is to be construed broadly to effectuate its purposes. See Tcherepnin v. Knight,389 U. S. 332, 389 U. S. 336 (1967); Peyton v. Rowe,391 U. S. 54, 391 U. S. 65 (1968)."
The legislative history falls far short of supporting respondents' contention that there is an exemption for state purchases of "commodities" for "resale." There is nothing whatever in the Senate or House Committee Reports, or in the floor debates, focusing on the issue. [Footnote 18] Some Members of Congress were aware of the possibility that the Act would
apply to governmental purchases. Most Members, however, were concerned not with state purchases, but with possible limitations on the Federal Government. The most relevant legislative history is the testimony of the Act's principal draftsman, H. B. Teegarden, before the House Judiciary Committee. [Footnote 19] Although the testimony is ambiguous on the
application of the Act to state purchases for consumption, one conclusion is certain: Teegarden expressly stated that the Act would apply to the purchases of municipal hospitals in at least some circumstances. [Footnote 20] Thus, his comments directly contradict the exemption found by the courts below for all such purchasing. [Footnote 21] In the absence of any other relevant evidence,
we find no legislative intention to enable a State, by an unexpressed exemption, to enter private competitive markets with congressionally approved price advantages. [Footnote 22]
Despite the plain language of the Act and its legislative history, respondents nevertheless argue that subsequent legislative events and decisions of District Courts confirm that state purchases are outside the scope of the Act. We turn therefore to these subsequent events.
Respondents cite the hearings on the Robinson-Patman Act held in the late 1960's. [Footnote 23] Testimony before the House Subcommittee investigating practices in the pharmaceutical industry indicated that the Act did not cover price discrimination in favor of state hospitals, [Footnote 24] and Federal Trade Commission Chairman Paul Dixon disclaimed any authority over transactions involving state health care programs. [Footnote 25] It
is not at all clear, however, whether Chairman Dixon contemplated cases in which the state agency competed with private retailers, although he was aware of such practices by institutional purchasers. [Footnote 26] Other statements expressed little more than informed, interested opinions on the issue presented, and are not entitled to the consideration appropriate for the constructions given contemporaneously with the Act's passage. [Footnote 27] See supra at 460 U. S. 159-162, and n. 22.
It is clear from the House Subcommittee's conclusions that it did not focus on the question presented by this case. The Subcommittee found that the difference between drug prices for retailers and government customers "is extremely substantial," and
"not always fully explainable by either cost justifiable quantity discounts, economies of scale, or other factors inherent in bulk distribution."
H.R.Rep. No.1983, 90th Cong., 2d Sess., 77 (1968). In the next conclusion, it stated that "[n]umerous acts and policies of individual manufacturers seem . . . violative of the Robinson-Patman
Act. . . ." Ibid. Thus, it is quite possible that the Subcommittee considered some state purchasing at discriminatory prices -- about which it had heard testimony -- to be unlawful. The Subcommittee Report did include the awkwardly worded statement:
"There is no basis apparent . . . why the mandate of the Robinson-Patman Act should not be applied to discriminatory drug sales favoring nongovernmental institutional purchasers, profit or nonprofit, to the extent there is prescription drug competition at the retail level with disfavored retail druggists."
Id. at 79. This unexceptional opinion, however, simply says that private institutional purchases may not facilitate unfair retail competition through sales at discriminatory prices. The Subcommittee said nothing expressly about the unfair competition at issue in this case. [Footnote 28]
Respondents also argue that, without exception, courts considering the Act's coverage have concluded that it does not apply to government purchasers. They insist that no court has imposed liability upon a seller or buyer, under either § 2(a) or § 2(f), when the discriminatory price involved a sale to a State, city, or county. See Brief for Respondent Board of Trustees 31-32. There are serious infirmities in these broad assertions: (i) this Court has never held nor suggested that there is an exemption for state purchases; [Footnote 29] (ii) the number of judicial decisions even considering the Act's application
to purchases by state agencies is relatively small; [Footnote 30] (iii) respondents cite no Court of Appeals decision that has expressly adopted their interpretation of § 2 before the decision below; (iv) some of the District Court cases upon which respondents rely are simply inapposite; [Footnote 31] (V) it is not clear that any published District Court opinion has relied solely on a state purchase exemption to dismiss a Robinson-Patman Act claim alleging injury as a result of government competition in the private market; [Footnote 32] and (vi) there are several cases that
suggest that the Robinson-Patman Act is applicable to state purchases for resale purposes. [Footnote 33] This judicial track record is in no sense comparable to the unbroken chain of judicial decisions upon which this Court previously has relied for ascertaining a construction of the antitrust laws that Congress, over a long period of time, has chosen to preserve. See cases cited, n 27, supra.
Respondents also seek support in the interpretations of various commentators and executive officials. But the most authoritative of these sources indicate that the question presented
is unsettled; [Footnote 34] others are not necessarily inconsistent with our holding, [Footnote 35] and, in some cases, they support it. [Footnote 36] Thus, Congress cannot be said to have left untouched a universally held interpretation of the Act. [Footnote 37]
In sum, it is clear that post-enactment developments -- whether legislative, judicial, or in commentary -- rarely have
considered the specific issue before us. There is simply no unambiguous evidence of congressional intent to exempt purchases by a State for the purpose of competing in the private retail market with a price advantage. [Footnote 38]
The Robinson-Patman Act has been widely criticized, both for its effects and for the policies that it seeks to promote. Although Congress is well aware of these criticisms, the Act has remained in effect for almost half a century. And it certainly is
"not for [this Court] to indulge in the business of policymaking in the field of antitrust legislation. . . . Our function ends with the endeavor to ascertain from the words used, construed in the light of the relevant material, what was in fact the intent of Congress."
"A general application of the [Robinson-Patman] Act to all combinations of business and capital organized to suppress commercial competition is in harmony with the spirit and impulses of the times which gave it birth."
South-Eastern Underwriters, 322 U.S. at 322 U. S. 553. The legislative history is replete with references to the economic evil of large organizations purchasing from other large organizations for resale in competition with the small, local retailers. There is no reason,
in the absence of an explicit exemption, to think that Congressmen who feared these evils intended to deny small businesses, such as the pharmacies of Jefferson County, Alabama, protection from the competition of the strongest competitor of them all. [Footnote 39] To create an exemption here clearly would be contrary to the intent of Congress.
We hold that the sale of pharmaceutical products to state and local government hospitals for resale in competition with private pharmacies is not exempt from the proscriptions of the Robinson-Patman Act. The judgment of the Court of Appeals accordingly is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
Section 2(a), 15 U.S.C. § 13(a), provides in relevant part:
"It shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly, 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, where such commodities are sold for use, consumption, or resale within the United States . . . 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. . . ."
Section 2(f), 15 U.S.C. § 13(f), provides:
"It shall be unlawful for any person engaged in commerce, in the course of such commerce, knowingly to induce or receive a discrimination in price which is prohibited by this section."
Section 13c provides:
"Nothing in [the Robinson-Patman Act] shall apply to purchases of their supplies for their own use by schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit."
"State purchases" are defined as sales to and purchases by a State and its agencies.
The District Court, and thus the Court of Appeals, agreed that "[t]he claims against the Board must . . . be treated as equivalent to claims against the State itself." 656 F.2d at 99. Accordingly, both courts held that the Eleventh Amendment bars petitioner's claim for damages against the University. Petitioner did not challenge this holding in its appeal from the District Court's decision.
Respondents argue that application of the Act to purchases by the State of Alabama would present a significant risk of conflict with the Tenth Amendment, and that we therefore should avoid any construction of the Act that includes such purchases. See NLRB v. Catholic Bishop of Chicago,440 U. S. 490, 440 U. S. 501 (1979). There is no risk, however, of a constitutional issue arising from the application of the Act in this case: the retail sale of pharmaceutical drugs is not "indisputably" an attribute of state sovereignty. See Hodel v. Virginia Surface Mining & Reclamation Assn., Inc.,452 U. S. 264, 452 U. S. 288 (1981). It is too late in the day to suggest that Congress cannot regulate States under its Commerce Clause powers when they are engaged in proprietary activities. See, e.g., Parden v. Terminal Railway of Alabama State Docks Dept.,377 U. S. 184, 377 U. S. 187-193 (1964). If the Tenth Amendment protects certain state purchases from the Act's limitations, such as for consumption in traditional governmental functions, those purchases must be protected on a case-by-case basis. Cf. City of Lafayette v. Louisiana Power & Light Co.,435 U. S. 389, 435 U. S. 413, and n. 42 (1978) (plurality opinion).
Special solicitude for the plight of indigents is a traditional concern of state and local governments. If, in special circumstances, sales were made by a State to a class of indigents, the question presented, that we need not decide, would be whether such sales are "in competition" with private enterprise. The District Court correctly assumed that the private and state pharmacies in this case are "competing pharmacies." 656 F.2d at 98. See alson 8, infra.
The District Court properly assumed, for purposes of making its summary judgment, that at least some of the hospital purchases would not be covered by the 13c exemption. Seen 3, supra, and accompanying text. Therefore, we need not consider whether this express exemption would support summary judgment in cases against state hospitals purchasing for their own use. Seen 20, infra.
The words "person" and "persons" are used repeatedly in the antitrust statutes. See 15 U.S.C. §§ 7, 12, 15.
See, e.g., Georgia v. Evans,316 U. S. 159, 316 U. S. 162 (1942) (State is a "person" under § 7 of the Sherman Act); Chattanooga Foundry & Pipe Works v. City of Atlanta,203 U. S. 390, 203 U. S. 396 (1906) (municipality is a "person" within the meaning of § 8 of the Sherman Act). See also Pfizer Inc. v. Government of India,434 U. S. 308, 434 U. S. 318 (1978) (foreign nation is a "person" under § 4 of the Clayton Act).
The Court has not considered it at all
"anomalous to require compliance by municipalities with the substantive standards of other federal laws which impose . . . sanctions upon 'persons.'"
City of Lafayette v. Louisiana Power & Light Co., supra, at 435 U. S. 400. See California v. United States,320 U. S. 577, 320 U. S. 585-586 (1944); Ohio v. Helvering,292 U. S. 360, 292 U. S. 370 (1934). One case is of particular relevance. In Union Pacific R. Co. v. United States,313 U. S. 450 (1941), the Court considered the applicability to a city of § 1 of the Elkins Act, 32 Stat. 847, as amended, 34 Stat. 587, 49 U.S.C. § 41(1) (repealed 1978),
"a statute which essentially is an antitrust provision serving the same purposes as the anti-price-discrimination provisions of the Robinson-Patman Act."
City of Lafayette, supra, at 435 U. S. 402, n.19. The Union Pacific Court expressly found that a municipality was a "person" within the meaning of the statute. 313 U.S. at 313 U. S. 462-463. See also City of Lafayette, supra, at 435 U. S. 401, n.19.
The word "purchasers" has a meaning as inclusive as the word "person." See 80 Cong.Rec. 6430 (1936) (remarks of Sen. Robinson) ("The Clayton Antitrust Act contains terms general to all purchasers. The pending bill does not segregate any particular class of purchasers, or exempt any special class of purchaser").
The only apparent difference between the scope of the relevant laws is the extent to which the activities complained of must affect interstate commerce. Congress' decision in the Robinson-Patman Act not to cover all transactions within its reach under the Commerce Clause, see Gulf Oil Corp. v. Copp Paving Co.,419 U. S. 186, 419 U. S. 199-201 (1974), does not mean that Congress chose not to cover the same range of "persons" whose conduct "in commerce" is otherwise subject to the Act.
Indeed, the House and Senate Committee Reports specifically state that
"[t]he special definitions of section 1 of the Clayton Act will apply without repetition to the terms concerned where they appear in this bill, since it is designed to become by amendment a part of that act."
H.R.Rep. No. 2287, 74th Cong., 2d Sess., pt. 1, p. 7 (1936); S.Rep. No. 1502, 74th Cong., 2d Sess., 3 (1936). See 80 Cong.Rec. 3116 (1936) (remarks of Sen. Logan) ("[M]any have complained because the provisions of the bill apply to any person engaged in commerce.' . . . The original Clayton Act contains that exact language, and it is carried into the bill under consideration. The language of the Clayton Act was used because it has been construed by the courts"). Given their common purposes, it should not be surprising that the common terms of the Clayton and Robinson-Patman Acts should be construed consistently with each other. See id. at 8137 (remarks of Rep. Michener) ("The Patman-Robinson bill does not suggest a new policy or a new theory. The Clayton Act was enacted in 1914, and it was the purpose of that act to do just what this law sets out to do"); id. at 3119 (remarks of Sen. Logan) (purpose of Robinson-Patman bill is to strengthen Clayton Act); id. at 6151 (address by Sen. Logan) (same).
JUSTICE O'CONNOR, in her dissenting opinion, questions our use of antitrust cases to define a word common to the antitrust laws. She would distinguish all of these cases uniformly holding States to be included in the word "persons," because none has held "that States or local governments are persons for purposes of exposure to liability as purchasers under the provisions of the Clayton Act." Post at 460 U. S. 177 (emphasis in original). The dissent takes no notice, however, of our decision last Term in Community Communications Co. v. City of Boulder,455 U. S. 40, 455 U. S. 56 (1982), in which the Court stated that the antitrust laws,
"like other federal laws imposing civil or criminal sanctions upon 'persons,' of course apply to municipalities as well as to other corporate entities."
No authority is cited for the dissent's distinction between "persons" entitled to sue under the antitrust laws and "persons" subject to suit under those laws.
See, e.g., Pfizer Inc. v. Government of India, supra, at 434 U. S. 312-313 (noting "broad scope of the remedies provided by the antitrust laws") (applying Sherman Act cases to construe Clayton Act); Mandeville Island Farms, Inc. v. American Crystal Sugar Co.,334 U. S. 219, 334 U. S. 236 (1948) ("[Sherman] Act is comprehensive in its terms and coverage, protecting all who are made victims of the forbidden practices by whomever they may be perpetrated") (emphasis added).
See, e.g., National Gerimedical Hospital & Gerontology Center v. Blue Cross of Kansas City,452 U. S. 378, 452 U. S. 388 (1981); City of Lafayette, 435 U.S. at 435 U. S. 398, 435 U. S. 399; Abbott Laboratories v. Portland Retail Druggists Assn., Inc.,425 U. S. 1, 425 U. S. 11-12 (1976); United States v. National Assn. of Securities Dealers, Inc.,422 U. S. 694, 422 U. S. 719-720 (1975).
In one important sense, retail competition from state agencies can be more invidious than that from chain stores, the particular targets of the Robinson-Patman Act. Volume purchasing permits any large, relatively efficient, retail organization to pass on cost savings to consumers, and, to that extent, consumers benefit merely from economy of scale. But to the extent that lower prices are attributable to lower overhead, resulting from federal grants, state subsidies, free public services, and freedom from taxation, state agencies merely redistribute the burden of costs from the actual consumers to the citizens at large. An exemption from the Robinson-Patman Act could give state agencies a significant additional advantage in certain commercial markets, perhaps enough to eliminate marginal or small private competitors. Consumers, as citizens, ultimately will pay for the full costs of the drugs sold by the state agencies involved in this case. Because there is no reason to assume that such agencies will provide retail distribution more efficiently than private retail pharmacists, consumers will suffer to the extent that state retail activities eliminate more efficient, private retail distribution systems.
JUSTICE O'CONNOR's dissenting opinion repeatedly emphasizes that Congress, in 1936, did not focus specifically on the issue presented here. See post at 460 U. S. 180, 460 U. S. 182, 460 U. S. 187, and n. 10. This may well be true, as the likelihood of state entities competing in the private sector was remote in 1936. It cannot be contended, however, that Congress specifically intended to allow the competition at issue here. In any event, the absence of congressional focus is immaterial where the plain language applies. See, e.g., United States v. South-Eastern Underwriters Assn.,322 U. S. 533, 322 U. S. 556-558 (1944); Browder v. United States,312 U. S. 335, 312 U. S. 339 (1941); De Lima v. Bidwell,182 U. S. 1, 19 [argument of counsel -- omitted] (1901).
"[Rep.] LLOYD: Would this bill, in your judgment, prevent the granting of discounts to the United States Government?"
"Mr. TEEGARDEN: Not unless the present Clayton Act does so. . . ."
"[Rep.] LLOYD: For instance, the Government gets huge discounts. . . . Now, would that discount be barred by this bill?"
"Mr. TEEGARDEN: I do not see why it should, unless a discount contrary to the present bill would be barred -- that is, the present law -- would be barred by that bill."
"Aside from that, my answer would be this: The Federal Government is not in competition with other buyers from these concerns. . . ."
* * * *
"The Federal Government is saved by the same distinction. . . . They are not in competition with anyone else who would buy."
"[Rep.] HANCOCK: It would eliminate competitive bidding all along the line, would it not, in classes of goods that would be covered by this bill?"
"Mr. TEEGARDEN: You mean competitive bidding on Government orders?"
"[Rep.] HANCOCK: Government, State, city, municipality."
"Mr. TEEGARDEN: No; I think not."
"[Rep.] MICHENER: If it did do it, you would not want it, would you?"
"Mr. TEEGARDEN: No; I would not want it. It certainly does not eliminate competitive bidding anywhere else, and I do not see how it would with the Government."
"[Rep.] HANCOCK: You would have to bid to the city, county, exactly the same as anybody else; same quantity, same price, same quality?"
"Mr. TEEGARDEN: No."
"[Rep.] HANCOCK: Would they or could they sell to a city hospital any cheaper than they would to a privately-owned hospital, under this bill?"
"Mr. TEEGARDEN: I would have to answer it in this way. In the final analysis, it would depend upon numerous questions of fact in a particular case. If the two hospitals are in competition with each other, I should say then that the fact that one is operated by the city does not save it from the bill. If they are not in competition with each other, then they are in a different sphere."
"The facts of the situation are not present upon which to predicate a discrimination, in the nature of the case. I do not see that that question becomes any different under this bill from what it is under the present section 2 of the Clayton Act, for that bill also prohibits discrimination generally in the same terms that this does. But it differs in the breadth of the exceptions. That is the only difference between the two bills."
Hearings on H.R. 8442 et al. before the House Committee on the Judiciary, 74th Cong., 1st Sess., 208-209 (1935) (emphasis added) (hereinafter 1935 Hearings).
JUSTICE STEVENS agrees that state and local governments may be "purchasers" within the meaning of the Robinson-Patman Act. See post at 460 U. S. 171. He joins in JUSTICE O'CONNOR's dissent, however, on the basis of a novel theory: that state and local agencies may never be in "competition" with private parties within the meaning of the Act. See ibid. This is an economic fiction: if in fact a State participates in the private retail pharmaceutical market, it competes with the private participants. JUSTICE STEVENS relies on one statement by witness Teegarden in the 1935 House Hearings, but attaches no significance to a further statement by the same witness:
"In the final analysis, it would depend upon numerous questions of fact in a particular case. If the two hospitals are in competition with each other, I should say then that the fact that one is operated by the city does not save it from the bill."
See 1935 Hearings at 209 (emphasis added).
Teegarden subsequently submitted a written brief to the House Committee. He first rejected outright the desirability of any exemptions. See id. at 249. He then posed the question whether "the bill [would] prevent competitive bidding on Governmental purchases below trade price levels." He stated that
"[t]he answer is found in the principle of statutory construction that a statute will not be construed to limit or restrict in any way the rights, prerogatives, or privileges of the sovereign unless it so expressly provides -- a principle inherited by American jurisprudence from the common law. . . ."
But he also noted that "requiring a showing of effect upon competition . . . will further preclude any possibility of the bill affecting the Government." Id. at 250.
All the cases Teegarden cited suggest that this sovereign exception rule of statutory construction simply means that a government, when it passes a law, gives up only what it expressly surrenders. While the Robinson-Patman Act was pending before Congress, the Court stated that it could
"perceive no reason for extending [the presumption against binding the sovereign by its own statute] so as to exempt a business carried on by a state from the otherwise applicable provisions of an act of Congress, all-embracing in scope and national in its purpose, which is as capable of being obstructed by state as by individual action."
United States v. California,297 U. S. 175, 297 U. S. 186 (1936). See California v. Taylor,353 U. S. 553, 353 U. S. 562-563 (1957). In the context of the Robinson-Patman Act, the rule of statutory construction on which Teegarden relied supports, at the most, an exemption for the Federal Government's purchases. The existence of such an exemption is not before us. Cf. United States v. Cooper Corp.,312 U. S. 600, 312 U. S. 604-605 (1941) (United States not a "person" under the Sherman Act for purposes of suing for treble damages). Moreover, Teegarden clearly assumed that governmental purchasing would not compete with private purchasing. That assumption, however, is inapplicable here.
Six months after the Act was passed, the Attorney General of the United States responded to an inquiry from the Secretary of War regarding the Act's application "to government contracts for supplies." 38 Op.Atty.Gen. 539 (1936). In ruling that such contracts are outside the Act, the Attorney General explained:
"[S]tatutes regulating rates, charges, etc., in matters affecting commerce do not ordinarily apply to the Government unless it is expressly so provided; and it does not seem to have been the policy of the Congress to make such statutes applicable to the Government. . . ."
"The [Robinson-Patman Act] merely amended the [Clayton Act] and, in so far as I am aware, the latter Act has not been regarded heretofore as applicable to Government contracts."
Id. at 540. Later in the letter, the Attorney General clarified that his reference was to "the Federal Government," ibid., and gave other reasons
"for avoiding a construction that would make the statute applicable to the Government in violation of the apparent policy of the Congress in such matters,"
id. at 541. The Attorney General expressly relied upon Emergency Fleet Corp. v. Western Union Telegraph Co.,275 U. S. 415, 275 U. S. 425 (1928), in which the Court upheld the granting of favorable telegraph rates to a federal corporation that competed with private enterprise.
The Attorney General's opinion says nothing about the Act's applicability to state agencies. Indeed, in the following year, the Attorney General of California expressly concluded that state purchases were within the Act's proscriptions. See 1932-1939 Trade Cases