Document: 47 L.Ed.2d 537 96 S.Ct. 1305 425 U.S. 1 ABBOTT LABORATORIES et al., Petitioners,v.PORTLAND RETAIL DRUGGISTS ASSOCIATION, INC., etc. No. 74-1274. Argued Dec. 16, 1975. Decided March 24, 1976. Syllabus Respondent, as assignee of more than 60 commercial pharmacies, brought this antitrust action against petitioner manufacturers, charging that by selling drugs to certain hospitals, each which has a pharmacy, at prices lower those charged respondent's assignors, petitioners violated the Robinson-Patman Act, makes it unlawful for one engaged in commerce discriminate price between different purchasers like commodities where "the effect . may be substantially lessen competition." 15 U.S.C. § 13(a). Petitioners claimed challenged sales were exempt under Nonprofit Institutions which, inter alia, excludes from application Act nonprofit hospitals' "purchases their supplies own use." 13c. The District Court ruled on basis evidence adduced hospitals involved and drug purchases "for use" within meaning 13c, granted summary judgment favor petitioners. Appeals vacated remanded. While agreeing designated nonprofit, court concluded hospital's are purchased its "own only hospital can said consumer, i. e., dispensations inpatients emergency facility patients. Held : 1. Section 13c does not all but exempting language must construed applying what reasonably regarded use sense such is part promotes intended institutional operation care Pp. 8-14. 2. Applying foregoing rule, being if dispensed: (a) To inpatient his treatment hospital; patient admitted there; or outpatient personal premises. Such basic function. P. 14. (b) inpatient, patient, upon discharge, outpatient, off-premises use, provided these take-home limited reasonable time, continuation of, supplement to, treatment. 14-15. (c) employee student dependent. Each member family dispensation him furthers functions. 16. (d) physician staff Here considerations similar supra. 16-17. 3. Purchases following types since they use": former way renewal prescription given when he was an outpatient. purpose exemption been exceeded connection with reached refill stage. 15-16. nondependents covered PP 2(c) (d), These relationships too attenuated statutory benefit. 17. walk-in customer, who no present pharmacy (except occasional situation, viewed de minimis ). 17-18. 4. Under standards either put exclusively, keep separate records otherwise dispensed, making accounting submissions supplier adjustments. protected liability noncollusively relies certification supplier. 19-21. 9 Cir., 510 F.2d 486, James H. Clarke, Portland, Or., Roger Tilbury, respondent. Mr. Justice BLACKMUN delivered opinion Court. Price Discrimination (Robinson-Patman), adopted 1936, 49 Stat. 1526, amending 2 Clayton 38 730, general where, among other things, discrimination two years later, 1938, c. 283, 52 446, exempts schools charitable institutions operated profit." 13c.1 This case concerns products favored pharmaceutical companies. issue proper construction phrase use," appears consequent extent proscription Robinson-Patman. 3 * 12 manufacturers products. Oregon corporation pharmacies doing business metropolitan Ore. area, instituted United States violations federal laws. Treble damages injunctive relief sought. 4 amended complaint asserted five causes action. Only (the second) presently before us.2 In claim respondent alleged discriminated hand, (regular drugstores), including other. As affirmative defense, pleaded Act. 5 parties discovery status drug-dispensing practices 14 Portland area operate hospitals. Affidavits obtained filed. Petitioners, defendants, pursuant Fed.Rule Civ.Proc. 56(b), then moved complaint's second cause App. 68. 6 Court, orally, thus restrictions concluded, accordingly, there any material fact respect purchased, 278-288, 290-292. 7 Id., 292, certified 28 1292(b), Ninth Circuit permitted interlocutory appeal taken. Appeals, while rejecting contentions did qualify 13c,3 nevertheless Court's remanded further proceedings. 486 (1974). 8 Because importance context modern hospital, expanding service community, compared operations some ago, because obvious need definitive Act,4 we certiorari. 422 1040, 95 2655, 45 692 (1975). II pertinent facts really dispute. petitioners, admittedly, sell less govern petitioners' assignors pharmacists Portland. respective turn dispense have so situation conceded except provision applies. controversy, thus, comes into clear focus. 10 pharmacy. It department hospital. Its produces revenue excess costs. net accrues benefit, utilized institution's purposes, supports activities 11 283-285, F.2d, 489, perceived various categories But sustaining motion judgment, observed vast majority" (85% 95%), namely, bed receiving facilities, "clearly" 283; "out-patient treatment," whether "initial repeated," outside merely "change distribution health care" whereby percentage increased statute passed 284; "take-home drugs" "clear meaning" statute, Ibid.; furnished employees, physicians, members staff, presenting "some mild degree question," hospital," 285; patients insufficient amount "justify withdrawing" statute's exemption, Ibid. agreed situations "cover far greater distribution," "such dispensing course (Sic ) 489. recited justifications "as functions": departing drugs; home patient's begun earlier employees beg collective-bargaining agreements; students aspects educational programs; physicians perquisites membership; limitation instances needed could elsewhere; position center full range services"; "a decent regard needs community." 13 conceding "distribution justified useful community function," necessarily 'own use.' " Instead, court, cases is, concept apply "to resale private consumer." Accordingly, sales, acquire "at acquisition discriminates local retail druggists." III We, too, find convenient view falling several categories.5 We divide them follows: For define least overnight occupancy.6 there. A category become defined preceding paragraph. 16 (other facility) receives consultation 17 discharge away 18 5. 19 6. 20 7. dependent.7 21 8. employee, 22 9. physician, physician's practice 23 10. customer hospital.8 24 division reveals, course, concerned linedrawing. demarcation somewhat simplified,on record, concession agrees 'in use,' regardless technically described inpatient. matter, says, "whether occupying not"; "day surgery medication treated would (that sale exempt) not, shot pill standing upright clinic." Brief Respondent 11. See also Tr. Oral Arg. 29. 25 concession, then, covers above-listed 1, 2, hasten add, however, had made three categories, same result, seems us very purchase dispensed consumed premises, bedded, seen facility, our view, indicates, explication. 26 Before remaining should state recognize, do, appropriate necessary activity vastly changed developed enactment 1938. intervening decades assume larger character. Some indeed, truly centers "delivery" care. longer bedridden, surgical critical emergency. place readily inclined turn, increasing costs, specialization, shortage practitioners, factors often compelled whenever medical problem import presents itself. room restricted previously authorized staff. And long ago required now ambulatory basis. Eastern Kentucky Welfare Rights Organization v. Simon, 165 U.S.App.D.C. 239, 249, 506 1278, 1288 (1974), cert. granted, 421 975, 1974, 44 466 (1975); Brodie & Graber, Institutional Pharmacy Practice 1970's, Am.J.Hosp.Pharm. 240, 241 (1971). IV 27 said, laws, particular, liberally, exceptions strictly. McKesson Robbins, 351 305, 316, 76 937, 943, 100 L.Ed. 1209, 1218 (1956); FMC Seatrain Lines, Inc., 411 726, 733, 93 1773, 1778, 36 620, 626 (1973); Perkins Standard Oil Co., 395 642, 646-647, 89 1871, 1873-1874, 599, 605-606 (1969). recognized, also, "was enacted 1936 curb prohibit devices large buyers gained discriminatory preferences over smaller ones virtue purchasing power." FTC Broch 363 166, 168, 80 1158, 1160, 1124, 1127 (1960); Fred Meyer, 390 341, 349, 88 904, 908, 1222, 1228 (1968). remedial, broadly effectuate purposes. Tcherepnin Knight, 389 332, 336, 548, 553, 564, 569 (1967); Peyton Rowe, 391 54, 65, 1549, 1555, 426, 433 Implied immunity favored. National Assn. Securities Dealers, 694, 719, 2427, 2443, 505 "(O)ur repeatedly established heavy presumption implicit (antitrust) exemptions." Goldfarb Virginia State Bar, 773, 787, 2004, 2013, 572, 585 Philadelphia Nat. Bank, 374 321, 350-351, 83 1715, 1734-1735, 915, 937-938 (1963). focus competition functional level." Sun 371 505, 520, 358, 367, 466, 479 legislative history indicates clearly suspicion Robinson-Patman, time just recently enacted, actually might outlaw favors sellers wish grant eleemosynary institutions. S.Rep. 1769, 75th Cong., 3d Sess., (1938); H.R.Rep. 2161, (1938). here seek utilize opposite ways. asserts assurance never countenance mass invasion market hospitals," 34, Congress mind role traditionally occupied 35. assert 1938 written assist wide lowest possible cost public interest," 17, character institution, particular features program, loss, 29 fully persuaded view. American institution originally sick poor. U.S.App.D.C., 1288; E. Fisch, D. Freed, Schachter, Charities Charitable Foundations 322 (1974); Bromberg, Hospital, Cath.U.L.Rev. 237, 238-240 (1970). Language bill became exempted "supported whole subscriptions," deleted, Cong.Rec. 6065 (1938), Act's confined. do relate original "traditional" status. On nothing applied expanded automatically whatever new venture finds attractive changing days. surely intend give blank check. Had intended, qualified 1983, 90th 2d 78-79 concerned, after all, accepted principles, hereinabove set forth, even context. 30 therefore conclude one; mean Robinson-Patman; test inherent use"; "their By persons implies turns measure naturally requires. consider listed above. V 31 reiterate conclusions already enunciated light Dispensation bed-occupying function, That rather consumes determinative, and, contend otherwise. result follows uses product 32 prescription, usually continuance prescriptively administered recipient takes us, sure, small step beyond door. released continue recuperation something routine intensive, regular, or, even, casual (if offers type), consultative facility. release environment next chain resumption normal completely free supervision participation point, least, although approaching end, continuous real, distinct parts transition genuine needed, continues need, treatment, disagree feel contrary ruling unduly undeservedly emphasize doorsill draw line threshold arbitrary consistent congressional intent. instances, extends realistically inappropriately threshold. 33 conclude, side divides not. Inevitably, accord above point feel, positioned short refill. Continuation drug's initial well indicated but, referred above, certainly forever originated auspices. 34 purchaser's dependent poses problem. organization populated rendering essential services kinds. enable whole; parts. scene interns, nursing, practical nurse's aide programs, paramedical, chaplaincy, administrative fields, purposes institutionally intimate. therefore, student, whom, literally, family, dependent, enhances function qualifies 13c.9 employee's student's another, nondependent member, 35 What paragraph applies equal force though technical payroll, vital existence. engages, perhaps directly through organization, formulation professional operative policies. His existence think, again line, utilizes proximity permits record occasionally intimates, portion unconnected requirement fulfilled. relationship hold definitely satisfied. 37 buyer most affords little difficulty Even acknowledges weight argument increasingly extension filled, make commercially advantaged another store open comers devastatingly competing pharmacies. extend contemplated generally exemption. occasion available meet situation. seeks counter possibility telephone book yellow-page reference providing 24-hour service, delivery 56. be. content, De minimis, event, presence solitarily trigger litigation kind. So holds bounds, entertains humanitarian gesture, shall condemn suppliers violation type.10 VI 39 suggest decision holding establishes objectionable unworkable standard "requires segregation achieved clumsy expensive dual supply tracing systems regulate account drugs." 28. They undesirability supplier's "controlling disposition merchandise hands purchaser," citing Arnold, Schwinn 388 365, 379, 87 1856, 1865, 1249, 1260 (1967), speak "retroactive exposure claims." 40 Petitioners' concern understandable, overstated. Looking alternatives, more,11 presented. first, easier, Not held exactly deplore, namely establish recordkeeping procedure segregates nonexempt use. supplemented submission followed adjustment indicated. This, cumbersome, obviously exacted benefits bestowed controlling legislation, cumbersome demands enterprises kinds complex society today. 41 supplier, properly expect noncollusive reliance customer's unreasonable burden obtaining enjoy, purchaser, responsibility identification purchaser standard, additional imposed take routinely representation purchased. 42 vacated, proceedings opinion. Costs allowed 50%. 43 ordered. Vacated STEVENS took consideration case. 46 MARSHALL, concurring. I join opinion, add word about applicability my mind, key itemized list institutions, "charitable suggests me named schools, colleges, universities, libraries, churches, traditional qualifying expand still profit. 48 agree days." Ante, 13. believe applicable both There suggestion nor today fall category,* address here. write read foreclosing highly untraditional ways Likewise, inquiry kind "is patients." However, profit, here, analysis furthered, suggest, recognition limitation. 50 Since quite freeze charity. Rather, understand it, preclude taking advantage buying low-cost solely reselling primarily interested aiding lowering operating expenses, indirectly means raising money particularly resales businesses eligible meant profit-making correct nexus closely scrutinized profit assure moneymaking Thus, arguably scope After balancing factor lines drawn concur 51 STEWART, whom BRENNAN joins, dissenting. common ground consumption premises constitutes controversy "uses" catalogued 8-10. expressed views 53 "We concede respects consumption. consumer. cannot 54 "The (quite properly) accommodating patients, strangers conveniently Their question provide service. druggists. not." 55 affirm judgment. "Nothing sections 13b 21a title, Causes based city, county, governments, Federal Government third fourth complaint, Record 61-62) dismissed failure claim. 292. proprietary entities, discriminations conspiracy first fifth action, 52-61, 62-63), remain pending. sole exception Bess Kaiser Hospital. "appear disputed issues fact," "proper legal standard" determining 'not profit' "on record" court. issue, resolved remand. 488 No review aspect Appeals' sought, detail us. Neither confronted status, Logan Lanes Inc. Brunswick Corp., 378 212, denied, 898, 219, 216 (1967). show category. indicate considered group. refused dispensations. serve describe individual categories. occupancy, estimation affiants whose affidavits appear "inpatient." carry description include day surgery, remains hours more, irrespective occupancy. case, distinctions consequence seemingly contains special duty nurse, chaplain, nonemployee professional, type student. exhaustive. cover, record. that, availability subject agreement, controlling. n. Lanes, Corp. parties, ways, much decision. treble-damages suit centering Brunswick, Utah Board, bowling lanes related equipment equipment. items board installed university's union building, "primarily students, faculty University," used public. 214. during months installation, according presented amounted 2,934 bowled out total 128,349. trial Brunswick's One affirmed. restrict term "supplies" consumables noncapital instead, embraced anything needs. exact immaterial assuming substantial University facilities," 217, university Students Book Co. Washington Law 98 49, 232 (1955), 350 988, 474, 854 (1956), cited distinguished. latter lawbooks self-sustaining campus bookstores held, 50-51, 5, universities defendant, prevailed ground. relates. Those contrast, were. apparently distinguish "(p)lant acquired segregated others, serves uses." 490. went say "of otherwise." factually stated, Columbia Circuit's characterization bookstore transactions latter's Our alternatives exclusive. Imaginative come up better alleviate details burdens exist. difficult profits outsiders. If determine nonetheless constituted "charitable" own.

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