In The

Supreme Court of the United States




Decided February 23, 1983

Justice O’Connor, Dissenting

Topic: Economic Activity*Court vote: 5–4
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Joining O'Connor opinion: Justice BRENNAN Justice BRENNAN Justice REHNQUIST Justice REHNQUIST Justice STEVENS Justice STEVENS
Citation: 460 U.S. 150 Docket: 81–827Audio: Listen to this case's oral arguments at Oyez

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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 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.



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 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 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 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.


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 ]

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.


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 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 ]


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 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.


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 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 ] 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 Robinson-Patman coverage to these entities buttresses this interpretation of the Act. See 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 ]

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 ]


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.

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 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 withoutthe 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.

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