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.
Page 460 U. S. 151
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.
I
Petitioner, a trade association of retail pharmacists and
pharmacies doing business in Jefferson County, Alabama,
Page 460 U. S. 152
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
Page 460 U. S. 153
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.
II
The issue here is narrow. We are not concerned with sales to the
Federal Government, nor with state purchases
Page 460 U. S. 154
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.
III
The Robinson-Patman Act, by its terms, does not exempt state
purchases. The only express exemption is that for
Page 460 U. S. 155
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]
Page 460 U. S. 156
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
Page 460 U. S. 157
of the Act strongly suggests that there is no exemption for
state purchases to compete with private enterprise.
IV
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.
A
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
Page 460 U. S. 158
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."
436 U.S. at
436 U. S. 403.
See also id. at
436 U. S. 408.
[
Footnote 17]
These principles, and the purposes they further, have been
helpful in interpreting the language of the Robinson-Patman
Page 460 U. S. 159
Act. As JUSTICE BLACKMUN stated for the Court in
Abbott
Laboratories v. Portland Retail Druggists Assn., Inc.,
425 U. S. 1,
425 U. S. 11-12
(1976):
"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)."
B
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
Page 460 U. S. 160
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
Page 460 U. S. 161
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,
Page 460 U. S. 162
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]
Page 460 U. S. 163
V
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.
Page 460 U. S. 164
A
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
Page 460 U. S. 165
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
Page 460 U. S. 166
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]
B
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
Page 460 U. S. 167
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
Page 460 U. S. 168
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
Page 460 U. S. 169
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
Page 460 U. S. 170
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]
VI
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."
United States v. Cooper Corp., 312 U.
S. 600,
312 U. S. 606
(1941).
"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,
Page 460 U. S. 171
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.
VII
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.
[
Footnote 1]
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. . . ."
[
Footnote 2]
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."
[
Footnote 3]
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."
[
Footnote 4]
"State purchases" are defined as sales to and purchases by a
State and its agencies.
[
Footnote 5]
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.
[
Footnote 6]
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).
[
Footnote 7]
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 also n 8,
infra.
[
Footnote 8]
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.
See n 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.
See n 20,
infra.
[
Footnote 9]
The words "person" and "persons" are used repeatedly in the
antitrust statutes.
See 15 U.S.C. §§ 7, 12, 15.
[
Footnote 10]
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.
[
Footnote 11]
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").
[
Footnote 12]
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.
[
Footnote 13]
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).
[
Footnote 14]
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.
[
Footnote 15]
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).
[
Footnote 16]
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).
[
Footnote 17]
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.
[
Footnote 18]
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).
[
Footnote 19]
"[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).
[
Footnote 20]
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).
[
Footnote 21]
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.
[
Footnote 22]
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 � 55, 156, pp. 415-416 (1937). Two other
early State Attorney General opinions simply do not consider
whether the Act applies to state purchases for
retail
sales.
See Opinion of Attorney General of Minnesota,
1932-1939 Trade Cases � 55, 157, p. 416 (1937); 26 Wis.
Op.Atty.Gen. 142 (1937).
Representative Patman "presumed that the [United States]
Attorney General's reasons may be also applied to municipal and
public institutions." W. Patman, The Robinson-Patman Act 168
(1938).
See also W. Patman, Complete Guide to the
Robinson-Patman Act 30 (1963) (interpreting Attorney General's
opinion as exempting all governmental purchases). His
interpretation is entitled to some weight, but he appears only to
be interpreting -- or erroneously extending -- the Attorney
General's opinion and reasoning. Representative Patman's personal
intentions probably are better reflected in his introduction in
1951 and 1953 of bills to amend the Act to define "purchaser" to
include "the United States, any State or any political subdivision
thereof." H.R. 4452, 82d Cong., 1st Sess. (1951); H.R. 3377, 83d
Cong., 1st Sess. (1953). There is no legislative history on these
bills, but it is arguable that he believed that the original intent
needed to be stated expressly to negate his reading of the Attorney
General's contrary construction of the Act. In any case, Congress'
failure to pass these bills may be attributable to a reluctance to
subject
federal purchases to the Act. For example, in
1955, 1957, 1959, and 1961, Representative Keogh also
unsuccessfully introduced bills to extend the Act to federal
purchases only
for resale. See H.R. 430, 87th
Cong., 1st Sess. (1961); H.R. 155, 86th Cong., 1st Sess. (1959);
H.R. 722, 85th Cong., 1st Sess. (1957); H.R. 5213, 84th Cong., 1st
Sess. (1955).
It bears repeating, moreover, that none of these views --
including Representative Patman's -- focuses on the state purchases
alleged here: purchases to gain competitive advantage in the
private market, rather than purchases for use in traditional
governmental functions. For the Department of Justice's most recent
statements regarding an exemption or immunity for state
enterprises,
see n
37,
infra.
[
Footnote 23]
The most important relevant event in the Robinson-Patman Act's
postenactment history is the amendment in 1938 excluding
eleemosynary institutions, 52 Stat. 446, 15 U.S.C. § 13c. Whether
the existence of an exemption in § 13c supports an exemption for
certain state purchases depends upon whether § 13c is interpreted
to apply to state agencies that perform the functions listed. That
is a substantial issue in its own right.
Compare H.R.Rep.
No.1983, 90th Cong., 2d Sess., 7-8, 78 (1968) (suggesting that §
13c does not include government agencies),
with 81
Cong.Rec. 8706 (1937) (remarks of Rep. Walter) (§ 13c would apply
to institutions financed by cities, counties, and States).
See
also City of Lafayette, 435 U.S. at
435 U. S. 397,
n. 14 (§ 13c includes "public libraries," which "are, by
definition, operated by local government");
Abbott
Laboratories, 425 U.S. at
425 U. S. 18, n.
10; 81 Cong.Rec. 8705 (1937) (remarks of Rep. Walter) (exemption
codifies the intention of the drafters of the Robinson-Patman Act).
We need not address this issue here.
[
Footnote 24]
See, e.g., Small Business and the Robinson-Patman Act:
Hearings before the Special Subcommittee on Small Business and the
Robinson-Patman Act of the House Select Committee on Small
Business, 91st Cong., 73-77 (1969-1970) (William McCamant, Director
of Public Affairs, National Association of Wholesalers);
id. at 623 (Harold Halfpenny, counsel for the Automotive
Service Industry Association); Small Business Problems in the Drug
Industry: Hearings before the Subcommittee on Activities of
Regulatory Agencies of the House Select Committee on Small
Business, 90th Cong., 15-16 (1967-1968) (hereinafter 1967-1968
Hearings) (Earl Kintner, former FTC Commissioner, counsel for the
National Association of Retail Druggists) (state purchases
"probably" exempt).
But see id. at 80 (remarks of Charles
Fort, President, Food Town Ethical Pharmacies, Inc.)
("Robinson-Patman Act may prohibit this practice");
id. at
86 (same). There also was testimony that institutional purchasers
frequently obtain drugs at lower prices than do retail pharmacies,
see id. at 14, 258, 318, 1093-1094, and many witnesses
complained that this discrimination adversely affected competition,
see id. at A-140 to A-141, 253-262, 273, 292.
[
Footnote 25]
See H.R.Rep. No.1983,
supra, n. 23, at 74.
[
Footnote 26]
After hearing his testimony, the Subcommittee posed further
questions for Chairman Dixon about the eroding influence on the
retail druggists' market presented by: (i) expanding federal,
state, and private group health care programs; (ii) the Federal
Government's ability to purchase from drug manufacturers at prices
substantially below wholesale cost; and (iii) instances of
hospitals, "both nonprofit and proprietary, selling to outpatients
or even nonpatients."
Id. at 73. In his response to the
Subcommittee, Chairman Dixon declined to discuss further the last
category, which involved § 13c issues.
Id. at 74. His
disclaimer of FTC authority envisioned state purchases for welfare
programs, not for resale in competition with private enterprise.
Thus, the issue presented here is most similar to the issue not
discussed by Chairman Dixon.
[
Footnote 27]
Assuming that this post-enactment commentary before the
Subcommittee can be imputed to Congress -- quite a leap, given the
failure of the Subcommittee Report to rely on it for its
conclusions -- "the views of a subsequent Congress form a hazardous
basis for inferring the intent of an earlier one."
United
States v. Price, 361 U. S. 304,
361 U. S. 313
(1960).
See, e.g., Consumer Product Safety Comm'n v. GTE
Sylvania, Inc., 447 U. S. 102,
447 U. S.
117-118, and n. 13 (1980);
Oscar Mayer & Co. v .
Evans, 441 U. S. 750,
441 U. S. 758
(1979);
United Air Lines, Inc. v. McMann, 434 U.
S. 192,
434 U. S. 200,
n. 7 (1977) ("Legislative observations 10 years after passage of
the Act are in no sense part of the legislative history").
[
Footnote 28]
The Subcommittee also concluded that the 1938 amendment was
"designed to afford immunity to private nonprofit institutions . .
. to the extent the sales are for the nonprofit institution's
own use,'" H.R.Rep. No.1983, supra, n. 23, at 78, but
that would indicate more the construction of 13c than it would the
intent of the 1936 Congress.
[
Footnote 29]
Indeed, our opinions suggest precisely the opposite.
See
City of Lafayette, supra, at
435 U. S. 397,
n. 14;
Abbott Laboratories, supra, at
425 U. S. 18-19,
n. 10;
California Motor Transport Co. v. Trucking
Unlimited, 404 U. S. 508,
404 U. S. 513
(1972).
[
Footnote 30]
The parties cite fewer than a dozen cases, many with unpublished
opinions, that involve the application of the Robinson-Patman Act
to state purchases.
See nn.
31-33 infra. Cf. Blue Chip Stamps v. Manor
Drug Stores, 421 U. S. 723,
421 U. S. 731
(1975) (affirming rule adopted by "virtually all lower federal
courts facing the issue in the
hundreds of
reported cases presenting this question over the past
quarter century") (emphasis added);
Gulf Oil Corp. v. Copp
Paving Co., 419 U.S. at
419 U. S.
200-201 (adopting consistent, "longstanding"
construction of Robinson-Patman Act after "nearly four decades of
litigation").
[
Footnote 31]
See Pacific Engineering & Production Co. v. Kerr-McGee
Corp., 1974-1 Trade Cases � 75,054, p. 96,742 (Utah 1974)
(dicta) (involving Federal Government as ultimate purchaser)
(relying on Attorney General's opinion as sole support),
aff'd
in part and rev'd in part, 551 F.2d 790, 798-799 (CA10)
(finding legitimate competition despite different prices),
cert. denied, 434 U.S. 879 (1977);
Sachs v.
Brown-Forman Distillers Corp., 134 F.
Supp. 9,
16 (SDNY
1955) (Act inapplicable because there was no proof that sales
affected plaintiff adversely),
aff'd on opinion below, 234
F.2d 959 (CA2) (per curiam),
cert. denied, 352 U.S. 925
(1956);
General Shale Products Corp. v. Struck Constr.
Co., 37 F. Supp.
598, 602-603 (WD Ky.1941) (finding no "sale" under the Act and
alternatively holding the Act inapplicable because "[n]either the
government nor a city in its purchase of property considered
necessary for the purposes of
carrying out its governmental
functions is in competition with another buyer who may be
engaged in
buying and reselling that article") (emphasis
supplied),
aff'd, 132 F.2d 425, 428 (CA6 1942) (expressly
reserving issue whether Act applies to sales to state agency),
cert. denied, 318 U.S. 780 (1943). The
Sachs
court also indicated, in dicta, that it was unclear whether the Act
applied to state purchases.
134 F. Supp.
at 16.
[
Footnote 32]
Cf. Mountain View Pharmacy v. Abbott Laboratories, No.
C-77-0094 (Utah, Sept. 6, 1977) (unpublished opinion) (consent by
plaintiffs to dismiss with prejudice Act claims based on sales to
state agencies),
aff'd in part and rev'd in part, 630 F.2d
1383 (CA10 1980) (complaint insufficient because it failed to
identify products or purchasers subject to discriminatory
treatment);
Portland Retail Druggists Assn. v. Abbott
Laboratories, No. 71-543 (Ore., Sept. 11, 1972) (unpublished,
oral opinion),
vacated and remanded, 510 F.2d 486 (CA9
1974) (§ 13c applied),
vacated and remanded, 425 U. S.
1 (1976). One District Court has suggested in an
alternative holding that there is an exemption for state purchases
for nonconsumption use.
Logan Lanes, Inc. v. Brunswick
Corp., No. 4-66-5, (Idaho, May 26, 1966) pp. 4-5 (unpublished
opinion),
aff'd, 378 F.2d 212, 215-216 (CA9) (purchases by
Utah State University within scope of § 13c; expressly declined to
address "so-called governmental exemption"),
cert. denied,
389 U.S. 898 (1967). All of these cases predate our decision in
City of Lafayette.
[
Footnote 33]
See Burge v. Bryant Public School
District, 520 F.
Supp. 328, 330-332 (ED Ark.1980),
aff'd, 658 F.2d 611
(CA8 1981) (per curiam);
Champaign-Urbana News Agency, Inc. v.
J. L. Cummins News Co., 479 F.
Supp. 281, 286-287 (CD Ill.1979) (although Act inapplicable to
federal purchases, state agencies might face an opposite result),
aff'd, 632 F.2d 680 (CA7 1980);
A. J. Goodman &
Son v. United Lacquer Manufacturing Corp., 81 F. Supp.
890, 893 (Mass.1949). Other cases cut against any exemption for
state purchases.
See Municipality of Anchorage v. Hitachi
Cable, Ltd., 547 F.
Supp. 633, 637-641 (Alaska 1982);
Sterling Nelson &
Sons v. Rangen, Inc., 235 F.
Supp. 393, 399 (Idaho 1964),
aff'd, 351 F.2d 851,
858-859 (CA9 1965),
cert. denied, 383 U.S. 936 (1966);
Sperry Rand Corp. v. Nassau Research & Development
Associates, 152 F. Supp.
91, 95 (EDNY 1957).
Cf. Reid v. University of
Minnesota, 107 F.
Supp. 439, 443 (ND Ohio 1952) (expressly not addressing whether
state agency exempt from Act when engaged in a business in the same
manner as other business corporations).
[
Footnote 34]
See 5A Z. Cavitch, Business Organizations §
105D.01[8][c] (1973 and Supp.1982) (opinions "divided" whether Act
is applicable); 4 J. von Kalinowski, Antitrust Laws and Trade
Regulation § 24.06, p. 24-70 (1982) ("there is some conflict among
the authorities as to whether sales to states and municipalities
are covered by the Act");
id. § 24.06[2]; E. Kintner, A
Robinson-Patman Primer 203 (1970) ("Although [the Attorney
General's] opinion appears to have settled the matter where the
federal government is concerned, some controversy has arisen over
the applicability of the act to purchases by state and local
governments"); F. Rowe, Price Discrimination Under the
Robinson-Patman Act § 4.12, p. 84 (1962).
[
Footnote 35]
Some deal only with sales to the Federal Government.
See Letter from Comptroller General to Robert F. Sarlo,
Veterans Administration (July 17, 1973), reprinted in 1973-2 Trade
Cases � 74,642. Almost all fail to mention, much less decide,
whether the Act applies to state purchases for retail sales.
See Report of the Attorney General Under Executive Order
10936, Identical Bidding in Public Procurement 11 (1962).
[
Footnote 36]
See 62 Cal.Op.Atty.Gen. 741 (1979); 47 N.C.Atty.Gen.
112, 115 (1977); [1948-1949] Ga. Op.Atty.Gen. 723, 727 (1949) (if
state agency competes with private enterprise, it is subject to
Act).
[
Footnote 37]
In its 1977 Report of the Task Group on Antitrust Immunities at
25, the Department of Justice stated:
"The mere fact that a state has authorized a state-owned
enterprise to engage in commercial activity should not be
sufficient to immunize all activities of the enterprise from the
antitrust laws. That test removes the clearly sovereign activities
of a state from the antitrust scrutiny of the federal government
while holding the commercial activities of a state-owned enterprise
to the same standards requir[ed] of all who engage in commercial
transactions in the market."
Reprinted in Antitrust Exemptions and Immunities: Hearings
before the Subcommittee on Monopolies and Commercial Law of the
House Committee on the Judiciary, 95th Cong., 1st Sess., 1890
(1977).
Cf. Victory Transport Inc. v. Comisaria General de
Abastecimientos y Transportes, 336 F.2d 354, 360-362 (CA2
1964) (the charter of a ship to haul grain by a state
instrumentality not a sovereign activity that would justify
applying the sovereign immunity doctrine).
[
Footnote 38]
The dissent of JUSTICE O'CONNOR relies in large part, not on the
words of the statute or its legislative history, but on assertions
that a
"general consensus [existed] in the legal and business
communities that sales to governmental entities are not covered by
the Robinson-Patman Act."
Post at
460 U. S. 182.
See also post at
460 U. S. 174
(STEVENS, J., dissenting). JUSTICE O'CONNOR is correct that some in
the business and legal community did think that an exemption
existed for all state purchases.
See post at
460 U. S.
185-187, and nn.19 and 20. But to say there is a
"consensus" is to disregard the opinion of commentators,
see n 34,
supra; the views expressed that the Act is applicable to
state purchases,
see supra at
460 U. S. 161,
460 U. S.
162-163, n. 22, and
460 U. S. 169,
and n. 37; and the most recent, relevant opinion of the Department
of Justice,
see supra at
460 U. S. 169,
and n. 37. It is more accurate to say that this was an unsettled
question of federal law that demanded this Court's attention.
[
Footnote 39]
Under our interpretation, the Act's benefits would accrue,
precisely as intended, to the benefit of small, private retailers.
See 1935 Hearings, at 261 (Teegarden recommending passage
"for the protection of private rights").
JUSTICE STEVENS, dissenting.
While I join JUSTICE O'CONNOR's dissenting opinion, I believe an
additional comment on the text of the Robinson-Patman Act may help
to explain my vote. For purposes of interpreting that statute, I
think that federal, state, and local agencies are "purchasers," but
that such governmental agencies are not engaged in "competition"
with private parties even when they resell purchased goods to
consumers who might otherwise have patronized a private retailer.
Both before and after the 1936 statute amended § 2 of the Clayton
Act, the requirement of proving an adverse effect on "competition"
played an important part in limiting the coverage of the
statute.
It is universally agreed that federal purchases are not covered
by the Act. Even though it has always been obvious that primary
line competition might be injured by discriminatory
Page 460 U. S. 172
prices on sales to the Federal Government, and also that goods
sold to military post exchanges would normally be resold at a
substantial discount, no one in the 1936 legislative deliberations
questioned the inapplicability of the Act to these sales. The
explanation, in my opinion, does not rest on the sovereign status
of the Federal Government,
* but rather on
the assumption embodied in the Act that federal agencies do not
compete with nongovernmental entities.
Mr. Teegarden, the lobbyist, made this assumption clear in his
statement at the 1935 House hearings, quoted in part by the opinion
of the Court.
Ante at
460 U. S.
160-161, n.19:
"Mr. LLOYD: Would this bill, in your judgment, prevent the
granting of discounts to the United States Government?"
* * * *
"For instance, the Government gets huge discounts. Take that
electric fan, for instance. You go to the ordinary store and the
list price is $35. The Procurement Division procures them
delivered, one at a time, for $13.18. Now, would that discount be
barred by this bill?"
"Mr. TEEGARDEN: I do not see why it should. . . . "
"Aside from that, my answer would be this: the Federal
Government is not in competition with other buyers
Page 460 U. S. 173
from these concerns. Therefore a discrimination -- it is so
applied universally in interstate commerce law, in the railroad law
-- to have a discrimination, there must be a relative position
between the parties to the discrimination which constitutes an
injury to one as against the other. I think the answer is to be
found in that."
"In other words, if seller A makes a price to a retailer in New
York and a different price to a retailer in San Francisco, all
other things aside, no case of discrimination could be predicated
there, because the two are not in the same sphere at all."
"The Federal Government is saved by the same distinction, not of
location but of function. They are not in competition with anyone
else who would buy."
Hearings on H.R. 8442
et al. before the House Committee
on the Judiciary, 74th Cong., 1st Sess., 208-209 (1935).
I would interpret the "distinction, not of location but of
function" somewhat more broadly than does the majority. It is not
merely a question of whether government agencies do or do not
resell the goods they have purchased. Even when they resell items
to the public, governmental entities do not engage in competition
with private retailers in the same sense that chainstores compete
with independent retailers. Most importantly, their activities are
seldom affected by a profitmaking motivation; rather, they are
undertaken in connection with the provision of services to the
public. Further, their merchandising and price-setting decisions
take a different set of factors into account. As the Court notes,
ante at
460 U. S. 158,
n. 17, they need not include a profit component, their overhead may
be subsidized, and they may be exempt from state or federal
taxation. In short, governmental agencies are in an entirely
different category of market participants.
I am convinced that the same analysis applies to purchases and
resales by state and local agencies. I do not believe that a
municipal hospital that operates a pharmacy is any more engaged
Page 460 U. S. 174
in competition with a retail druggist than a military post
exchange is engaged in competition with a retail grocer or a retail
clothing store. To be sure, this analysis is not entirely
consistent with the conclusion implied by Mr. Teegarden's somewhat
equivocal answer to Congressman Hancock. Although he did not say
that purchases by a city hospital would be covered by the bill, he
did state that, "
[i]f the two hospitals are in competition with
each other," the fact that one was operated by the city would
not save it from the bill. But he went on to stress: "
If they
are not in competition with each other, then they are in a
different sphere." Hearings on H.R. 8442,
supra, at
209 (emphasis added). In my view, if not in Mr. Teegarden's, the
differences between a city hospital and a private hospital justify
the conclusion that, for purposes of construing this statute, they
should not be considered in competition with each other.
I therefore would hold as a matter of law that neither purchases
nor sales by governmental agencies -- federal, state, or local --
constitute "competition" with private persons to which the statute
has any application. The Act has no impact on any governmental
agency's ability to provide hospital and related services to its
constituents. For the reasons JUSTICE O'CONNOR has set forth in
greater detail, I believe such a holding more accurately reflects
the understanding of the Congress that enacted the statute and the
lawyers and businessmen who have lived with the statute on a
day-to-day basis for almost half a century.
* When Mr. Teegarden responded to specific written questions
about the Act, he gave two reasons why the bill would not prevent
competitive bidding on government purchases below trade price
levels. First, he stated that a statute would not be construed to
restrict the rights, prerogatives, or privileges of the sovereign
unless it expressly so provided. This reason would apply only to
the Federal Government, as the Court's opinion points out.
Ante at
460 U. S.
159-161, nn. 18, 19. In addition, however, Mr. Teegarden
gave a reason that applies to governmental entities at state and
local levels as well.
"The further insertion of the clause proposed under topic 4
below, requiring a showing of effect upon competition, will further
preclude any possibility of the bill's affecting the
Government."
Hearings on H.R. 8442
et al. before the House Committee
on the Judiciary, 74th Cong., 1st Sess., 250 (1935).
JUSTICE O'CONNOR, with whom JUSTICE BRENNAN, JUSTICE REHNQUIST,
and JUSTICE STEVENS join, dissenting.
The issue that confronts the Court is one of statutory
construction: whether the Robinson-Patman Act covers purchases of
commodities by state and local governments for resale in
competition with private retailers. [
Footnote 2/1] The Court's
Page 460 U. S. 175
task, therefore, is to discern the intent of the 1936 Congress
which enacted the Robinson-Patman Act. I do not agree with the
majority that this issue can be resolved by reference to cases
under the Sherman Act or other statutes, or by reliance on the
broad remedial purposes of the antitrust laws generally. The 1936
Congress simply did not focus on this issue. The business and legal
communities have assumed for the past four decades that such
purchases are not covered. For these reasons, as explained more
fully below, I respectfully dissent.
I
A
The majority relies extensively on the interpretation this Court
has given to the term "person" under the Sherman Act and other
statutes as a guide to whether the terms "person" and "purchasers,"
as used in § 2 of the Clayton Act, 38 Stat. 730, as amended by the
Robinson-Patman Act (Act), 49 Stat. 1526, 15 U.S.C. § 13, include
state and local governmental entities.
See ante at
460 U. S.
155-156. In my view, such reliance is misplaced. The
question of the Robinson-Patman Act's treatment of governmental
purchases requires an independent examination of the legislative
history of that Act to ascertain congressional intent. [
Footnote 2/2] Indeed, the cases cited by
the majority
Page 460 U. S. 176
emphasize that the key question regarding coverage or
noncoverage of governmental entities is the intent of Congress
in enacting the statute in question. [
Footnote 2/3] Resolution of the statutory
construction question cannot be made to depend upon the abstract
assertion that the term "person" is broad enough to embrace States
and municipalities. [
Footnote 2/4]
For these
Page 460 U. S. 177
reasons, the mere fact that, in
City of Lafayette v.
Louisiana Power & Light Co., 435 U.
S. 389,
435 U. S. 397,
n. 14 (1978), a Sherman Act case, the Court referred to the
Robinson-Patman Act in its discussion of the breadth of the term
"person" cannot resolve the question now before us.
Further, the majority opinion propounds a misleading syllogism
when it (1) suggests that the term "person" in the Clayton and
Robinson-Patman Acts should be construed similarly, (2) cites
Hawaii v. Standard Oil Co., 405 U.
S. 251 (1972), for the proposition that the Clayton Act
applies to States, and (3) then opines that the terms "person" and
"purchasers" under § 2 therefore should be construed to include
state purchases.
Ante at
460 U. S.
155-156. Because, as the majority observes,
ante at
460 U. S. 156,
n. 13, the definitional section of the Clayton Act, 15 U.S.C. § 12,
was intended to apply to the Robinson-Patman Act, I do not dispute
the first proposition. However,
Hawaii v. Standard Oil Co.
stated only that a State is a "person" for purposes of bringing a
treble damages action under § 4 of the Clayton Act. 405 U.S. at
405 U. S. 261.
[
Footnote 2/5] Conspicuously absent
from the majority's discussion is any authority holding that States
or local governments are persons for purposes of exposure to
liability as purchasers under the provisions of the
Clayton Act. [
Footnote 2/6]
Although Congress
Page 460 U. S. 178
might now decide that the purchasing activities of States and
local governments
should be subject to the limitations
imposed by § 2, that is a policy judgment appropriately left to
legislative determination.
B
Nor do I find persuasive the majority's invocation of
presumptions regarding the liberal construction and broad remedial
purposes of the antitrust laws generally. Without derogating the
usefulness of those principles or suggesting that they should never
play a role in the Robinson-Patman context, one may nevertheless
candidly acknowledge that the Court also has identified a certain
tension between the Robinson-Patman Act, on the one hand, and the
Sherman Act and other antitrust statutes, on the other. The Court
frequently has recognized that strict enforcement of the
anti-price-discrimination provisions of the former may lead to
price rigidity and uniformity in direct conflict with the goals of
the latter.
See, e.g., Great Atlantic & Pacific Tea Co. v.
FTC, 440 U. S. 69,
440 U. S. 80,
83, n. 16 (1979);
Automatic Canteen Co. v. FTC,
346 U. S. 61,
346 U. S. 63,
346 U. S. 74
(1953);
Standard Oil Co. v. FTC, 340 U.
S. 231,
340 U. S. 249,
and n. 15 (1951). [
Footnote
2/7]
Page 460 U. S. 179
At the very least, this recognition raises doubts that the Court
should liberally construe the Robinson-Patman Act in favor of
broader coverage. Those doubts are enhanced by the fact that
Congress' principal aim in enacting the Robinson-Patman Act was to
protect small retailers from the competitive injury suffered at the
hands of large chain stores. [
Footnote
2/8] It is consistent with that intent for Congress also to
have displayed special solicitude for the well-established,
below-trade price-buying practices of governmental
institutions.
II
As the majority documents,
ante at
460 U. S. 160,
n.19, the legislative history of the Robinson-Patman Act clearly
indicates that Congress envisioned
some sort of immunity
for governmental bodies. [
Footnote
2/9] The question before the Court is the extent
Page 460 U. S. 180
of that immunity -- in particular, whether the purchase of goods
by state and local governments for resale in competition with
private retailers is within the intended scope of the
Robinson-Patman Act. As the majority acknowledges,
ante at
460 U. S. 159,
the 1936 Congress that enacted the Robinson-Patman Act did not
focus on the precise issue before the Court. Notwithstanding this
admission, the majority announces the surprising conclusion that
"[t]o create an exemption here
clearly would be contrary
to the intent of Congress."
Ante at
460 U. S. 171
(emphasis added).
The majority is correct in stating that it is not the business
of this Court to engage in "
policymaking in the field of
antitrust legislation'" in order to fill gaps where Congress has
not clearly expressed its intent. Ante at 460 U. S. 170
(quoting United States v. Cooper Corp., 312 U.
S. 600, 312 U. S. 606
(1941)). It is precisely because I concur in that admonition that I
would refrain from attributing to Congress an intent to cover the
state and local governmental purchases in question here. [Footnote 2/10]
Page 460 U. S. 181
A
In attempting to supply the unexpressed intent of Congress, the
majority fails to offer satisfactory guidelines for determining the
scope of the Act's coverage of governmental agencies. [
Footnote 2/11] The majority assumes,
"without deciding, that Congress did not intend the Act to apply to
state purchases for consumption in traditional governmental
functions," and suggests that state purchases of pharmaceuticals
for the purpose of resale to indigent citizens may not expose the
State to antitrust liability.
Ante at
460 U. S. 154,
and n. 7.
The majority's assumption, however, is inconsistent with the
principles of statutory construction upon which it purports to
rely. If, absent a clear expression of legislative intent to the
contrary, the plain language of the statute controls, then, by the
majority's own assertions, one would have to conclude that even
purchases for the State's own use or for resale to indigents would
fall within the Act's proscriptions. For, as the majority remarks,
ante at
460 U. S. 155,
the terms "person" and "purchasers" are broad enough to include
governmental entities, and the legislative history is "ambiguous on
the application of the Act to state purchases for consumption. . .
."
Ante at
460 U. S.
160-161.
Moreover, to the extent the majority implies that a State's
coverage or noncoverage under the Act turns on the distinction
between purchases for resale and purchases for consumption,
[
Footnote 2/12] that distinction
is inconsistent with the competition
Page 460 U. S. 182
rationale elsewhere suggested,
ante at
460 U. S. 170,
to underlie the prohibitions of § 2(a). For example, a state
university hospital might limit the use of its pharmacy to its own
faculty and staff, thereby falling within the "for their own use"
exception. [
Footnote 2/13]
Nevertheless, the university pharmacy may be inflicting competitive
injury on private pharmacies that the university's faculty and
staff might otherwise patronize. [
Footnote 2/14] Thus, the majority's conflicting
suggestions leave in doubt what principle -- the presence of
functional competition or the consumption/resale dichotomy --
guides the determination whether a state or local government's
purchases fall within the Act's proscriptions.
B
Against the backdrop of a legislative history that even the
majority concedes does not focus on the issue before us stands the
general consensus in the legal and business communities that sales
to governmental entities are not covered by the Robinson-Patman
Act. The majority devotes considerable effort to distinguishing or
undercutting the authorities cited by the respondents. In so doing,
and in observing that these authorities cannot reveal Congress'
intent in 1936,
ante at
460 U. S. 165,
n. 27, the majority misunderstands the significance of this
evidence. These authorities simply illustrate the virtually
unanimous assumption over the past 47 years of noncoverage of
governmental entities -- an assumption that has served as the basis
of well-established governmental purchasing
Page 460 U. S. 183
practices and marketing relationships. In the past, the Court
has relied upon the widespread understanding of the provisions of
the Robinson-Patman Act in limiting the scope of the Act's
prohibitions. [
Footnote 2/15] To
do so here is no less appropriate.
Despite its attempt to discount the significance of the judicial
authorities cited by the respondents, the majority cannot dispute
that no court has imposed liability upon a seller or buyer, under
either § 2(a) or § 2(f), 15 U.S.C. §§ 13(a) and (f), in a case
involving an alleged price discrimination in favor of a federal,
state, or municipal governmental purchaser. [
Footnote 2/16]
Page 460 U. S. 184
Commentators confirm the general judicial consensus that sales
to States and municipalities are not covered by the Act. [
Footnote 2/17] Moreover, Congress'
failure to enact bills extending
Page 460 U. S. 185
Robinson-Patman coverage to these entities buttresses this
interpretation of the Act.
See 460
U.S. 150fn2/9|>n. 9,
supra.
This same understanding has been expressed in testimony before
Congress. In 1967 and 1968, a congressional Subcommittee conducted
public hearings on the problems of small businesses in the
pharmaceutical industry. The Subcommittee heard testimony from both
representatives of pharmaceutical manufacturers and retail
pharmacists regarding the industry-wide practice of price
discrimination in sales of pharmaceuticals to governmental
purchasers -- federal, state, county, and municipal. [
Footnote 2/18] Several witnesses also
directly expressed their assumption that the Robinson-Patman Act
does not apply to such sales. [
Footnote 2/19]
Page 460 U. S. 186
In 1969 and 1970, the same House Subcommittee investigated the
problems of small businessmen under the Robinson-Patman Act. In
these hearings, witnesses again expressed the view that
governmental purchases at any level are not covered, highlighting
the problem of favorable prices on governmental purchases
for
resale, and making a plea for a change in the law. [
Footnote 2/20]
Page 460 U. S. 187
III
The legislative history of the Robinson-Patman Act clearly
reveals that Congress intended to exclude governmental entities
from the Act's proscriptions to some extent. However, Congress did
not focus on the issue before us, and therefore did not provide a
clear rationale governing coverage and noncoverage. In an area in
which bright lines are needed to guide state and local governments
in their purchasing practices, the majority fails to identify any
principle triggering inclusion or exclusion.
Page 460 U. S. 188
Moreover, one cannot doubt that state, county, and municipal
governments and manufacturers of commodities have structured their
marketing relationships with each other on the longstanding
assumption that the Robinson-Patman Act does not apply to those
transactions. That understanding finds substantial support among
the courts and commentators. State and local governments have
developed programs for providing services to the public, including
medical care to the indigent and the medically needy, [
Footnote 2/21] based on the same
assumption. The majority's holding that sales of commodities to
state and local governments for resale in competition with private
enterprise are covered by the Act will engender significant
disruption -- not only through government and industry
reexamination and restructuring of marketing relationships, but
also, unfortunately, through possible termination of services and
supplies to needy citizens [
Footnote
2/22] and through litigation associated with the process of
reexamination. [
Footnote 2/23]
The Court rests its decision primarily on one statement in the
legislative history, [
Footnote
2/24] taken in isolation from other remarks designed to assure
concerned House Members that
Page 460 U. S. 189
the Act would
not force the abandonment of governmental
below-market buying practices which the majority's holding now
calls into question. Given Congress' failure to delineate the
extent of the Robinson-Patman Act's coverage or noncoverage of
state and local governments, I would allow Congress to speak on
this issue, rather than disrupt longstanding practices and programs
and judicially arm private litigants with a powerful treble damages
action against these governments. Therefore, I would affirm the
judgment below.
[
Footnote 2/1]
This case does not require us to consider, as the cases cited by
the majority suggest,
ante at
460 U. S.
157-158, whether compliance with other federal statutes
necessitates an implied exemption from the provisions of the Act.
The question is simply one of congressional intent --
i.e., what Congress intended when it enacted the
Robinson-Patman Act with respect to coverage of governmental
purchases for resale.
[
Footnote 2/2]
The majority cites
Pfizer Inc. v. Government of India,
434 U. S. 308
(1978), as a case in which the Court applied Sherman Act cases to
construe the Clayton Act, which the Robinson-Patman Act amends.
Ante at
460 U. S. 157,
n. 15. In
Pfizer, the Court held that a foreign nation is
a "person" entitled to bring a treble damages action under § 4 of
the Clayton Act, 15 U.S.C. § 15. As the Court acknowledged, 434
U.S. at
434 U. S. 311,
§ 4 is a reenactment of the virtually identical language of § 7 of
the Sherman Act. In fact, § 7 was eventually repealed as redundant.
§ 3, 69 Stat. 283;
see S.Rep. No. 619, 84th Cong., 1st
Sess., 2 (1955). Reliance on prior interpretation of § 7 of the
Sherman Act was therefore uniquely appropriate.
[
Footnote 2/3]
See Pfizer Inc. v. Government of India, supra, at
434 U. S. 315
(§ 4 of the Clayton Act) ("The word
person' . . . is not a term
of art with a fixed meaning wherever it is used, nor was it in 1890
when the Sherman Act was passed"); Georgia v. Evans,
316 U. S. 159,
316 U. S. 161
(1942) (§ 7 of the Sherman Act) ("Whether the word `person' . . .
includes a State or the United States depends upon its legislative
environment"); Ohio v. Helvering, 292 U.
S. 360, 292 U. S. 370
(1934) (Rev.Stat. §§ 3140, 3244) ("Whether the word `person' or
`corporation' includes a state . . . depends upon the connection in
which the word is found"). See also United States v. Cooper
Corp., 312 U. S. 600,
312 U. S.
604-605 (1941) ("[T]here is no hard and fast rule of
exclusion. The purpose, the subject matter, the context, the
legislative history, and the executive interpretation of the
statute are aids to construction which may indicate intent, by the
use of the term, to bring state or nation within the scope of the
law").
It is also worth noting that many of the cases upon which the
majority relies involved construction of the term "person" for the
purpose of determining whether a particular governmental entity is
a "person" entitled to sue.
Pfizer Inc. v. Government of India,
supra; United States v. Cooper Corp., supra, (United States is
not "person" entitled to sue under § 7 of the Sherman Act);
Georgia v. Evans, supra, (State is "person" entitled to
sue under § 7 of the Sherman Act);
Chattanooga Foundry &
Pipe Works v. City of Atlanta, 203 U.
S. 390 (1906) (municipality is "person" entitled to sue
under § 7 of the Sherman Act).
[
Footnote 2/4]
I would also note that the majority overstates the significance
of Senator Robinson's remarks in connection with its observation
that "[t]he word
purchasers' has a meaning as inclusive as the
word `person.'" Ante at 460 U. S. 155,
n. 11. The remarks of Senator Robinson should not be read to
suggest that the word "purchasers," as used in the Robinson-Patman
Act, embraces States or municipalities. The Senator's observation
reflects an affirmative response to Senator Vandenberg's concern
that, although the bill was drafted with a view toward the problems
of large chainstore buying power in the retail merchandising field,
the Act would apply to private enterprise in the field of
industrial production as well. See 80 Cong.Rec. 6429-6430
(1936).
[
Footnote 2/5]
Were Congress to consider the specific question of
liability of governmental entities as purchasers under the
Robinson-Patman Act, it seems reasonable to assume that it would
approach that question with a different set of policy concerns than
those bearing on the decision whether to extend the benefit of the
Act's protections to those entities.
Cf. Parker v. Brown,
317 U. S. 341,
317 U. S. 351
(1943) ("In a dual system of government in which, under the
Constitution, the states are sovereign, save only as Congress may
constitutionally subtract from their authority, an unexpressed
purpose to nullify a state's control over its officers and agents
is not lightly to be attributed to Congress").
[
Footnote 2/6]
Indeed, one basis for the United States Attorney General's
conclusion in 1938 that the Robinson-Patman Act is inapplicable to
purchases of supplies by the Federal Government was the absence of
any judicial decision construing the Clayton Act, prior to its
amendment by the Robinson-Patman Act, to apply to governmental
contracts. 38 Op.Atty.Gen. 539, 540 (1936).
Prior to 1929, courts interpreted the original § 2 as addressed
only to the problem of primary line competition --
i.e.,
injury to competition among sellers.
See, e.g., National
Biscuit Co. v. FTC, 299 F. 733 (CA2),
cert. denied,
266 U.S. 613 (1924). Not until 1929 did this Court hold that § 2
also protected against the type of injury alleged in the present
case --
i.e., secondary line injury, or injury to
competition among buyers.
See George Van Camp & Sons Co. v.
American Can Co., 278 U. S. 245,
278 U. S. 253
(1929). The Robinson-Patman amendment to § 2 clarified that the Act
was designed to redress the latter type of injury.
[
Footnote 2/7]
Indeed the tension between the Robinson-Patman policy of
protection of competitors and the Sherman Act goal of protection of
the competitive process has prompted the Court to achieve a partial
reconciliation of the two by liberal interpretation of the "meeting
competition" defense under § 2(b) of the Clayton Act, as amended by
the Robinson-Patman Act, 15 U.S.C. § 13(b).
See Standard Oil
Co. v. FTC, 340 U.S. at
340 U. S.
251.
[
Footnote 2/8]
H.R.Rep. No. 2287, 74th Cong., 2d Sess., pt. 1, pp. 3-4 (1936);
S.Rep. No. 1502, 74th Cong., 2d Sess., 4 (1936);
see FTC,
Final Report on the Chain Store Investigation, S. Doc. No. 4, 74th
Cong., 1st Sess. (1935).
[
Footnote 2/9]
Members of the House expressed concern with the effect of the
bill on the established below-market buying practices of federal,
state, county, and municipal governments. Hearings on H.R.
8442
et al. before the House Committee on the Judiciary,
74th Cong., 1st Sess., 209 (1935). In response H. B. Teegarden, a
principal draftsman of the Act, assured members of the House
Judiciary Committee that he "would not want" the Act if it
prohibited, all along the line, the competitive bidding practices
of those governments.
Ibid.
Moreover, with respect to subsequent legislative history, I find
significant the fact that later attempts in Congress to expressly
include governmental entities within the coverage of the Act
failed.
See H.R. 4452, 82d Cong., 1st Sess. (1951); H.R.
3377, 83d Cong., 1st Sess. (1953); H.R. 5213, 84th Cong., 1st Sess.
(1955); H.R. 722, 85th Cong., 1st Sess. (1957); H.R. 155, 86th
Cong., 1st Sess. (1959); H.R. 430, 87th Cong., 1st Sess. (1961). In
particular, I would not dismiss as readily as does the majority,
ante at
460 U. S. 163,
n. 22, the bills introduced by Representative Patman in 1951 and
1953 to amend the Act to define "purchaser" to include "the United
States, any State or any political subdivision thereof." The
majority speculates that Representative Patman introduced these
bills to reaffirm his original intent that these entities would be
covered. In light of Representative Patman's agreement in his book,
W. Patman, The Robinson-Patman Act 168 (1938), with the United
States Attorney General's construction of the Act to exclude
purchases by the Federal Government and his extension of the
Attorney General's rationale to "municipal and public
institutions,"
ibid., it is more plausible to infer that
he viewed the bills as
extending the Act's coverage.
[
Footnote 2/10]
My resolution of the statutory issue here should not be
construed to reflect a policy judgment that the Robinson-Patman Act
should protect "a State's entrepreneurial personality."
City of Lafayette v. Louisiana Power & Light Co.,
435 U. S. 389,
435 U. S. 422
(1978) (BURGER, C.J., concurring in part). We are not concerned
here with whether the kind of activity in which these governmental
entities are engaged
appropriately exposes them to
antitrust liability under the Act.
Cf. id. at
435 U. S. 418.
That question raises policy concerns lying peculiarly within the
institutional province of Congress.
"A court, without the benefit of legislative hearings that would
illuminate the policy considerations if the question were left to
Congress, is not competent, in my opinion, to resolve this
question. . . . It is regrettable that the Court today finds it
necessary to rush to this essentially legislative judgment."
Pfizer Inc. v. Government of India, 434 U.S. at
434 U. S. 331
(POWELL, J., dissenting) (footnote omitted). Because the question
before us is one of congressional intent, and it is far from clear
that Congress has supplied an answer to that question, I would
refrain from substituting the policy judgments of the judiciary for
those Congress might embrace.
Cf. id. at
434 U. S. 320
(BURGER, C.J., dissenting);
id. at
434 U. S.
330-331 (POWELL, J., dissenting).
[
Footnote 2/11]
To the extent the majority purports to "divine" the will of
Congress, it comes as no surprise, given Congress' inattention to
this precise question, that no "bright lines" for coverage and
noncoverage emerge from its opinion.
[
Footnote 2/12]
The majority thus suggests, though it refrains from holding,
that the scope of coverage under § 2(a) is coextensive with the
"for their own use" line drawn by the Nonprofit Institutions Act of
1938, 15 U.S.C. § 13c, and interpreted by the Court in
Abbott
Laboratories v. Portland Retail Druggists Assn., Inc.,
425 U. S. 1 (1976).
This proposed resale/consumption distinction has no foundation in
the language of § 2(a), which prohibits discrimination "in price
between different purchasers of commodities . . . where such
commodities are sold
for use, consumption, or resale. . .
." 15 U.S.C. § 13(a) (emphasis added).
[
Footnote 2/13]
See Abbott Laboratories v. Portland Retail Druggists Assn.,
Inc., supra, at
425 U. S.
16-17.
[
Footnote 2/14]
Or, to take another example, a cafeteria operated by a
governmental agency for the benefit of its employees also might
inflict some competitive injury on restaurants in the same area
that otherwise might enjoy the employees' patronage.
[
Footnote 2/15]
See Standard Oil Co. v. FTC, 340 U.S. at
340 U. S.
246-247 (reliance on widespread understanding that the
meeting-competition proviso of § 2(b) of the Clayton Act, as
amended by the Robinson-Patman Act, provides a complete defense to
a charge of price discrimination).
[
Footnote 2/16]
See Champaign-Urbana News Agency, Inc. v. J. L. Cummins News
Co., 632 F.2d 680, 688-689 (CA7 1980) (Robinson-Patman Act
inapplicable to purchases by instrumentality of Federal Government
for resale);
Mountain View Pharmacy v. Abbott
Laboratories, No. C-77-0094 (Utah, Sept. 6, 1977) (unpublished
opinion) (order of consent dismissing with prejudice
Robinson-Patman claims based on sales to any governmental entity),
aff'd in part and rev'd in part on other grounds, 630 F.2d
1383 (CA10 1980);
Logan Lanes, Inc. v. Brunswick Corp.,
No. 4-66-5 (Idaho, May 26, 1966) (unpublished opinion) (sale of
bowling equipment to State not within provisions of Act;
alternative holding that sales exempt under 15 U.S.C. § 13c),
aff'd, 378 F.2d 212, 217 (CA9) (sales to state university
within § 13c exemption),
cert. denied, 389 U.S. 898
(1967);
Sperry Rand Corp. v. Nassau Research & Development
Associates, 152 F. Supp.
91, 96 (EDNY 1957) (disclaiming, on motion for reargument, any
intention that original opinion could be "construed to suggest that
sales to the Government can be thought to be subject to the
provisions of the Robinson-Patman Act");
Sachs v. Brown-Forman
Distillers Corp., 134 F. Supp.
9,
16 (SDNY
1955) ("It is doubtful, at best, whether the Robinson-Patman Act
applies at all to sales to Government agencies, state or federal")
(holding Act inapplicable to sales by liquor distiller to state
liquor commissions; alternative holding that no competitive injury
suffered by plaintiff liquor wholesaler),
aff'd on opinion
below, 234 F.2d 959 (CA2),
cert. denied, 352 U.S. 925
(1956);
General Shale Products Corp. v. Struck Constr.
Corp., 37 F. Supp.
598, 602-603 (WD Ky.1941) (alternatively holding
Robinson-Patman Act inapplicable to sales to municipal housing
commission and suggesting that "the Act does not apply to sales to
the government, state or municipalities"),
aff'd, 132 F.2d
425 (CA6 1942),
cert. denied, 318 U.S. 780 (1943).
While one may concede that most of these cases do not focus on
the precise situation of purchases by state or local governments
for resale, they nonetheless reflect the consensus of judicial
opinion that governmental bodies are not subject to liability under
§ 2 of the Clayton Act, as amended by the Robinson-Patman Act. The
majority would dismiss many of these cases with the simple
observation that they predate the Court's decision in
City of
Lafayette v. Louisiana Power & Light Co., 435 U.
S. 389 (1978).
Ante at
460 U. S.
167-168, n. 32. For reasons already noted, however, in
my view,
City of Lafayette does not resolve the issue
before us in this case.
Moreover, cases that the majority suggests are supportive of its
position,
ante at
460 U. S. 168, n. 33, are similarly distinguishable. For
example, both
Municipality of Anchoroge v. Hitachi Cable,
Ltd., 547 F.
Supp. 633 (Alaska 1982), and
Sterling Nelson & Sons,
Inc. v. Rangen, Inc., 235 F.
Supp. 393 (Idaho 1964),
aff'd, 351 F.2d 851, 858-859
(CA9 1965),
cert. denied, 383 U.S. 936 (1966), indicate
only that the Robinson-Patman Act may apply where the State, as in
Sterling, or the municipality, as in
Hitachi, is
the
victim of commercial bribery under § 2(c), 15 U.S.C. §
13(c), rather than the favored customer.
[
Footnote 2/17]
E. Kintner, A Robinson-Patman Primer 224 (2d ed.1979) ("In spite
of [any] contrary indications [among state attorneys general], it
is generally believed that the exemption applies to governmental
purchases at any level"); W. Patman, Complete Guide to the
Robinson-Patman Act 30 (1963) (indicating the Act is inapplicable
to sales to government, municipal, or public institutions); F.
Rowe, Price Discrimination Under the Robinson-Patman Act 84 (1962)
("The preponderance of reasoned opinion treats State or municipal
bodies on a par with the Federal Government's exemption"); 4 J. von
Kalinowski, Antitrust Laws and Trade Regulation § 24.06, p. 24-70
(1982) ("[T]he prevailing view is that such sales [to States and
municipalities] are excluded from Robinson-Patman liability").
See also 5A Z. Cavitch, Business Organizations §
105D.01[8][c] (1973) (indicating that lower federal courts have
generally held the Act inapplicable to sales to States and
municipalities, that one lower federal court has held the Act may
be applicable if the State is the disfavored customer, and that
opinions among state attorneys general are divided).
Although not specifically addressing any consumption/resale
distinction, a past Attorney General of the United States also has
opined that purchases by state and local governments are not within
the Act's prohibition against price discrimination. Report of the
Attorney General Under Executive Order 10936, Identical Bidding in
Public Procurement 11 (1962) (identical bidders on contracts with
state and local governments cannot contend that the Act prohibits
bidding below the schedule price, because the Act is not applicable
to government contracts).
[
Footnote 2/18]
Small Business Problems in the Drug Industry: Hearings before
the Subcommittee on Activities of Regulatory Agencies of the House
Select Committee on Small Business, 90th Cong., 1st Sess., 48
(1967-1968) (hereinafter 1967-1968 Hearings) (Merritt Skinner,
community pharmacist);
id. at 258 (William Apple,
executive director of the American Pharmaceutical Association);
id. at 296, 318-319 (Hyman Moore, H. L. Moore Drug
Exchange, Inc.);
id. at 500 (Henry DeBoes, vice-president
of Eli Lilly & Co.);
id. at 705 (Donald van Roden,
vice-president and general manager of pharmaceutical operations for
Smith Kline & French Laboratories);
id. at 792 (Joseph
Ingolia, vice-president and general manager of Schering
Laboratories);
id. at 817 (Lyman Duncan, vice-president of
American Cyanamid Co.).
Based upon this overwhelming evidence, the Select Committee on
Small Business concluded in its Report to the House:
"The difference between drug prices charged retailers and
wholesalers as compared to those charged . . . governmental
customers is extremely substantial, often being over 50
percent."
H.R.Rep. No.1983, 90th Cong., 2d Sess., 77 (1968).
[
Footnote 2/19]
See 1967-1968 Hearings, at 15-16 (Earl Kintner, former
FTC Commissioner, counsel for the National Association of Retail
Druggists) ("When a drug supplier sells drugs to Federal, State, or
municipal government institutions, the price charged by the
supplier may be without regard to the Robinson-Patman Act, because
such sales are probably exempt from the Robinson-Patman Act");
id. at 731 (W. Abrahamson, president of Ortho
Pharmaceutical Corp.) ("[T]he only special pricing we have ever
engaged in are [
sic] in bidding situations to [federal,
state, or local government] agencies excluded from the
Robinson-Patman Act");
id. at 1069 (C. Stetler, president
of the Pharmaceutical Manufacturers Association) ("There is nothing
immoral or unlawful about incremental cost pricing in cases -- such
as sales to the Government . . . -- where the Robinson-Patman Act
does not apply").
Even one Congressman on the Subcommittee expressed his
understanding that the Act does not apply to governmental
purchasers.
See id. at 1092 (Rep. Corman) ("[I]f there
were no exemption under Robinson-Patman for the Government . . .
what would be the situation as to their purchases?"). The colloquy
that followed Representative Corman's question further evidences
the assumption that governmental purchases are outside the scope of
the Act,
even in the case of resales.
"Mr. STETLER. If there was no exemption under Robinson-Patman, I
presume some of these practices would be illegal under
Robinson-Patman."
"Mr. CUTLER. If I could try to answer that, [Representative]
Corman. . . ."
"[A]bsent the one case of these resales . . . , I suppose the
lack of exemption would make no difference, because the
Robinson-Patman Act would not apply for other reasons, because you
are not discriminating between two people engaged in commerce and
competing with one another."
"Further, there is a real question as to whether the
Robinson-Patman Act applies under any circumstances where you are
bidding under a competitive bid. So for both of these reasons, the
answer to your question would be that the same pricing practices
might still lawfully prevail under Robinson-Patman without
the
exemption for the government. . . ."
Ibid. (emphasis added).
[
Footnote 2/20]
William McCamant, Director of Public Affairs for the National
Association of Wholesalers, testified:
"Over the years, the Robinson-Patman Act has not been extended
to cover sales to the Government. In the days when Government
purchases constituted a relatively small volume in the marketplace,
this exemption posed few problems. But today, with the vast growth
in Government purchases, Federal, State, and local, . . . the
continued exemption creates many unfair competitive
situations."
* * * *
"We believe that Congress must turn its attention to this
problem."
Small Business and the Robinson-Patman Act, Hearings before the
Special Subcommittee on Small Business and the Robinson-Patman Act
of the House Select Committee on Small Business, 91st Cong., 1st
Sess., 73-74 (1969-1970).
See id. at 76-77 (Everette
MacIntyre, Acting Chairman of the Federal Trade Commission)
(affirming that sales to the Federal Government, even in the resale
context, are not subject to the Robinson-Patman Act).
Harold Halfpenny, legal counsel for the Automotive Service
Industry Association, focused most precisely on the problem of
which petitioners complain --
i.e., competitive injury to
private industry when governmental entities receive more favorable
prices on purchases of commodities for resale.
"[W]hile the Act is silent on the subject, its legislative
history and subsequent interpretation support the proposition that
sales made to Federal or State governmental bodies are not subject
to the provisions of the Act."
"This may be injurious to competition in several ways. . .
."
"[T]here are
'second line' situations where competition
exists between the Government and private industry in the resale of
commodities."
* * * *
"The Federal Trade Commission has not recommended legislation to
make the Robinson-Patman Act applicable to sales to governmental
purchases. However, in our opinion, Congress should consider acting
on its own volition."
Id. at 623 (emphasis added).
[
Footnote 2/21]
See, e.g., Cal.Welf. & Inst. Code Ann. §§
14100-14126 (West 1980 and Supp.1982); Ill.Ann.Stat., ch. 23, ��
5-1 to 5-14 (Supp.1982-1983), Mont.Code Ann. §§ 53-6-103 to
53-6-144 (1981); N.Y.Soc.Serv.Law §§ 365, 365-a (McKinney 1976 and
Supp.1982-1983); Tex.Human Res.Code Ann. §§ 32.001-32.037 (1980);
Va.Code §§ 63.1-134 to 63.1-140 (1980).
[
Footnote 2/22]
The administrative burden of developing internal accounting and
recordkeeping procedures to segregate commodities purchased for
resale, plus the additional financial strain of paying higher
prices for these purchases, may induce state and local governments
to terminate programs and services already in place. More
significantly, however, the uncertainty generated by the majority's
failure to establish clear lines of demarcation for coverage and
noncoverage and the fear of exposure to treble damages liability
might well cause cautious legislators facing budgetary dilemmas to
eliminate these programs.
[
Footnote 2/23]
I note that the Court has not indicated that today's holding
will have only prospective effect.
[
Footnote 2/24]
See ante at
460 U. S.
161.