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U.S. Supreme Court

Jefferson Cty. Pharm. Ass'n v. Abbott Labs., 460 U.S. 150 (1983)

Jefferson County Pharmaceutical Association v. Abbott Laboratories

No. 81-827

Argued November 8, 1982

Decided February 23, 1983

460 U.S. 150


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. chanrobles.com-red

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.


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