*1 ABBOTT v. PORTLAND LABORATORIES et al. RETAIL ASSN., DRUGGISTS INC. Argued No. 24, 74-1274. December 1975 Decided March *2 J., Court, Blackmun, opinion delivered the in which Burger, J., C. White, Marshall, Powell, Rehnquist, JJ., joined. Marshall, concurring post, filed J., opinion, p. 21. J., dissenting opinion, filed a Stewart, J., joined, which Brennan, post, p. J., Stevens, 23. took no consideration de or *3 cision of case.
James argued H. Clarke f.or petitioners. cause With him on P. the briefs William Carry were B. Crow, McMurry, R. R. Walter J. Jack L. Cosgrave, Bullivant, Kennedy, Triplett, Thomas Robert Carney, M. R. and Barnes Ellis. H.
Roger Tilbury argued the respondent. cause for With him on Henry the briefs was Kane.* opinion delivered the of the Justice
Mr. Blackmun Court.
The Price Robinson-Patman Act (Rob Discrimination adopted in 49 Stat. inson-Patman), amend 1936, 1526, 2 of ing Clayton § 38 in Act, general Stat. 730, it unlawful makes in engaged one commerce to dis Cary *Richard J. Wertheimer and H. Sherman filed a brief for Hospital the American Assn. as amicus urging curiae reversal. urging Briefs of amici curiae by affirmance were filed H. R. Burn ham Assn, James Allen and Main for Alabama Pharmaceutical al.; et and Arthur Stickle, B. Hanson, Jr., W. Frank Assn, Sidney Waller for the American Pharmaceutical et al.
4 like of purchasers different price in between
criminate effect things, “the among other where, commodities com substantially to lessen may be discrimination such Institu Nonprofit (a). The § 15 C. 13 petition.” U. S. years 283, adopted two only tions c. later, 1938, Act, Robinson-Pat- exempts application from the Stat. own use supplies for their “purchases of their man institutions charitable hospitals, . . schools . profit.” C. 13c.1 operated U. S. hospitals' purchases nonprofit This case concerns com- prices pharmaceutical from products at favored proper is the construction panies. issue own “purchases use,” for their phrase supplies of their and the appears Nonprofit Act, Institutions exempt consequent hospitals’ purchases are extent the proscription of Robinson-Patman. I pharmaceutical Petitioners are manufacturers nonprofit corporation products. Respondent, Oregon an pharmacies than do- assignee more 60 commercial ing metropolitan Portland, area, business in Ore., instituted this in the United against petitioners action Oregon for viola- States District Court for the District of damages tions the federal Treble antitrust laws. *4 injunctive sought. relief were five of complaint
The amended asserted causes action. Only (the second) presently one of before us.2 the five
1“Nothing apply title, in 13 to 13b 21a of this shall sections and purchases supplies schools, colleges, of their for their own use universities, public libraries, churches, hospitals, and charitable insti operated profit.” tutions city, county, Causes of action based on in discrimination sales to governments, (the and state and Federal Government third and fourth causes of action asserted in the complaint, amended 61-62) Record were dismissed App. for failure to state a claim. 292. A proprietary cause of action based on discrimination in sales to In claim the respondent alleged this in selling phar- that products maceutical petitioners discriminated between nonprofit on the hospitals, hand, one and commercial pharmacies (regular including respondent’s drugstores), assignors, on As peti- the other. an defense, affirmative pleaded pharmaceutical prod- tioners their sales of ucts to nonprofit hospitals exempt from were Robinson- Patman under the Nonprofit Institutions Act. parties engaged discovery nonprofit as to the status and drug-dispensing practices designated of metropolitan operate Portland area institutions that nonprofit hospitals. Affidavits obtained filed. were Petitioners, as defendants, pursuant Rule Fed. Civ. (b), Proc. 56 then summary judgment moved for on the complaint’s amended 68. App. second cause action. The District opinion orally, an delivered Court, ruled that designated nonprofit all the were institutions hospitals, and that purchases pharmaceutical their products petitioners “for purchases supplies were their own use,” 13c, within the language § 15 U. S. C. and thus were exempt from the restrictions Robinson- Patman. The court there accordingly, that concluded, was no to any issue as to the respect material fact with hospitals’ nonprofit pharma- status or their use of the products they summary ceutical purchased, granted judgment petitioners respondent’s favor of the on the second cause of App. 278-288, action. 290-292. id.,
The District Court, judgment certified its under 28 U. (b), S. C. 1292 Court United States of Appeals permitted for the Ninth Circuit the interlocu- tory appeal to be taken. The Court of Appeals, while entities, hospitals alleged and commercial dis one product conspiracy (the were the of a criminations com amended plaint’s action, 52-61, first and fifth causes 62-63), Record remain pending.
6 designated contentions rejecting respondent's under exemption 13c,3 § hospitals did qualify judgment the District Court's nevertheless vacated 510 F. 2d proceedings. the case for further remanded (1974). 486 the context of the in importance
Because of the issue expanding with its nonprofit hospital, modern compared to the with community, service the obvious operations years ago, and because of some in the Non- language need construction of for definitive 422 U. profit granted we certiorari. S. Act,4 Institutions 1040 (1975). II The really dispute. in facts are not pertinent
The prod- admittedly, pharmaceutical sell their petitioners, hospitals prices less designated ucts to the Portland products like petitioners' than those that sales of govern phar- respondent’s assignors to the who are commercial in The turn respective hospitals macists Portland. so dispense pharmaceutical products they pur- have application of Rob- petitioners. chased The except inson-Patman this situation is conceded provision extent the Institu- exemption Nonprofit Act comes applies. controversy, tions The into thus, clear focus.
3
exception
Hospital.
was Bess
As to this institu
sole
Kaiser
tion,
Appeals
“appear
the Court of
factors
concluded
certain
present disputed
fact,”
“proper legal
and that
issues
“
operated
determining
for
”
whether that
‘not
standard”
was
profit’
developed
could not be
“on the
record”
limited
before
issue,
therefore,
court. The
to be resolved on remand.
was
486,
(1974).
F. 2d
No
aspect
review of this
Court
Appeals’ judgment
sought,
has been
and that
is not
detail
before
us. Neither are we
an
confronted here with
issue as to
non
profit status,
13c,
hospitals.
within
other 13
Appeals’
Logan
See the same
Lanes,
Court of
decision
v.
Inc.
Corp.,
denied,
Brunswick
(1967).
378 F. 2d
cert.
Each designated of the has It hospitals pharmacy. a separate department operation of the Its hospital. produces revenue in to excess of costs. The net accrues hospital's benefit, the for the gen- utilized institution’s eral purposes, supports and thus other the activities of hospital.
The District Court, App. 283-285, the Court of F. Appeals, 510 at 2d, perceived each various cate- gories dispensations by of hospital pharmacies the the of pharmaceutical products purchased petitioners. But the District Court, in sustaining petitioners’ motion summary judgment, majority” observed that “the vast of products purchased to those (85% 95%), namely, for the bed patient and for patient receiving treat- hospitals’ ment in the emergency “clearly” facilities, were hospitals’ for the use, within the of Non- meaning profit 283; Institutions Act, App. “out-patient that treat- ment,” whether “initial repeated,” or was not outside that merely Act because there has “change been a in the distribution of whereby health care” percentage of outpatient treatment increased since the statute was id., passed in 1938, 284; drugs” that “take-home were within the ibid.; meaning” “clear of the statute, that drugs furnished to staff employees, physicians, other members of staff, while presenting “some mild degree of question,” nevertheless were “for the the hos- id., pital,” at 285; and that the respect situation with walk-in patients was insufficient in amount “justify withdrawing” the statute’s ibid. exemption,
The Court Appeals agreed inpatient emergency facility situations “cover far greater distribution,” dispensing “such of drugs in the course of treatment is the hospitals’ own use.” 510 F. at 489. The 2d, [sic] court petitioners’ recited justifications asserted for the other types of sales “as proper hospital functions”: the need con- drugs; for take-home inpatient the departing begun treatment patient’s home tinuation at being employees as hospital; the sales to earlier in the sales pursuant collective-bargaining agreements; educational being aspects to students as being perquisites programs; physicians the sales to *7 sales the walk-in hospital membership; staff limitation could drugs needed where, time, at the the to instances position “as a elsewhere; be the not obtained full of health serv- provision range center for the of a com- ices”; regard decent for the needs the and “a munity.” Ibid. hospitals can conceding by “distribution the
But, community justified proper as a and useful service the regarded proper hospital function,” thus can be as a necessarily not Appeals Court concluded that this was ” court, “the 'own use.’ said hospitals’ Instead, the hospital the use under 13c was limited to cases where hospital is, can be said to be the to those consumer, dispensations cases where the drugs inpatients were emergency facility patients. could concept apply hospital not “to cases of resale private the a Accordingly, sales, hospital consumer.” as to such the may acquire not pharmaceutical products “at an acquisition price against that discriminates local retail druggists.” Ibid. Ill
We, find it too, hospitals’ convenient to view the sales dispensations pharmaceutical products of the pur- chased petitioners falling from into several categories.5 We them as divide follows:
5The designated record does not that each hospitals show dispensations category. made in each dis It does indicate that pensations category hospitals in each were made considered group. hospitals as a Some types refused make certain of dis pensations. It would purpose serve no useful for us to describe
1. To in his inpatient for use treatment at hospital. purposes, For present inpatient we define an overnight as one admitted to for at bed least occupancy.6 patient
2. To hospital’s emergency admitted to the facility for A patient’s use treatment there. patient may may in this or category become an preceding as defined in the inpatient, paragraph. 3. To the on outpatient personal use premises. For present purposes, outpatient we define an (other as one than an inpatient patient or admitted to the emergency facility) who receives or treatment consultation on the premises.
4. To inpatient, emergency facility or to the pa- upon tient, his discharge personal and for away his use premises. 5. To outpatient personal away from the premises.
6. To the former patient, by way a of of renewal a prescription given when he was an an emer- inpatient, facility gency or patient, outpatient. an 7. To hospital’s employee the or personal student for use or for the of his dependent.7 the extent to hospital which each dispensations individual made the categories. several 6 patient A overnight admitted occupancy, for bed in the estima tion the several affiants appear record, whose affidavits in the clearly “inpatient.” is an carry Some would description the further patient only day include a for surgery, or admitted one who more, remains irrespective hours or overnight occupancy. bed In view of disposition case, our of the these distinctions are of no consequence here. 7The seemingly record contains no dispensation reference a special to a duty nurse, chaplain, or similar nonemployee profes sional, duty hospital. on place any dispensation We of this type in the category same as one to employee or student. hospital's of the is a member who physician
8. To for use or employee, personal its for but who is not staff, dependent. his the use of hospital's member of the who is a physician,
9. To the physician’s in the course of dispensation staff, away hospital. from the private practice patient customer who is not 10. To walk-in a hospital.8 we that categories reveals, course, This division into linedrawing. The demarcation concerned with are on record, on this a concession simplified, somewhat with respondent agrees respondent. “ 'in dispensing drugs Appeals the Court of hospitals’ the course of treatment in the is the ” patient use,’ regardless own of whether [sic] technically outpatient inpatient. described as an or as an pa- It "whether the matter, respondent says, does not “day occupying not”; thus, surgery pa- tient is bed or a in the receiving being tient medication while treated to him would is, would be covered the sale [that receiving exempt] not, be whether in bed or as would one or in the pill standing upright a shot or while otherwise outpatient Respondent clinic.” Brief for 11. also See Arg. Tr. Oral 29.
This covers the above-listed cate- then, concession, gories 1, and 3. We hasten to if however, add, respondent made no concession as to these three had we would categories, have reached the same result, very it seems to us to hospital’s purchase clear that a *9 pharmaceutical of products dispensed that are to and by patient consumed on the hospital whether premises, patient that or is seen in the emergency bedded, 8 may categories This division into 10 be exhaustive. It appears cover, however, types dispensations the several of indi cated the record.
11 only or is an purchase supplies is a facility, outpatient, hospital's use,” “own within 13c. In our view, respondent's as the concession is so this clear indicates, that explication. needs no further
Before we turn to we should remaining categories, state that we parties as the con recognize, do, cept nonprofit appropriate and its necessary activity vastly changed developed has since the enactment Nonprofit Act Institutions in 1938. The intervening decades have seen the assume a larger community character. Some indeed, hospitals, truly have centers for “delivery” become of health nonprofit care. The hospital no longer is a receiving facility only for the bedridden, surgical patient, and the critical It has emergency. become a place where the community readily inclined to and —because turn, increasing physician costs, shortage gen specialization, eral and other compelled factors —is often practitioners, to turn, problem whenever a of import presents medical itself. The emergency room facility has become a all who need it and it no longer is restricted cases previously authorized members the staff. And patients that not long ago required bed care are often now treated on ambulatory an and outpatient basis. See Eastern Kentucky Rights Organization v. Welfare Simon, 165 App. U. S. C.D. 506 F. 2d 239, 249, 1288 (1974), cert. granted, U. S. 975 (1975); Brodie & Graber, Pharmacy Institutional Practice in the 1970’s, Hosp. Am. J. (1971). Pharm. 240,
IV It has been said, course, the antitrust laws, and Robinson-Patman in are be construed particular, and that the exceptions liberally, from their application are to be strictly. construed United States v. McKesson *10 12 FMC Seatrain 316 v. Robbins, 351 U. 305, (1956);
& S. Stand Perkins Inc., 411 733 v. Lines, U. 726, (1973); S. The Court Co., (1969). 395 646-647 ard Oil S. 642, U. “was enacted Robinson-Patman that has recognized, also, large which by all devices prohibit in 1936 to curb and smaller discriminatory preferences over buyers gained FTC power.” purchasing virtue of their greater ones FTC v. Co., (1960); Broch & S. 168 166, v. 363 U. Inc., Meyer, (1968). Fred U. S. 349 Because 341, 390 broadly construed effec the Act is it is remedial, Tcherepnin Knight, 389 U. S. purposes. tuate its v. See (1968). (1967); 336 391 65 Peyton Rowe, v. U. S. 332, 54, immunity is not United Implied antitrust favored. Dealers, 694, 422 States v. National Assn. Securities U. S. (1975). repeatedly 719 cases have established “[O]ur heavy implicit presumption against that there [anti Virginia 421 exemptions.” Bar, v. State trust] Goldfarb Philadelphia U. 787 States Nat. (1975); S. United 773, v. Bank, (1963). 374 focus of U. 350-351 And the S. 321, competition Robinson-Patman on the same func “at Co., level.” FTC Oil tional v. Sun 371 U. 520 505, S. (1963). history
But the legislative Nonprofit Institutions Act indicates Act clearly that was concerned with suspicion just the time Robinson-Patman, recently enacted, actually operate price might to outlaw favors that sellers wish to grant eleemosynary would Rep. institutions. 75th 3d Cong., S. No. 1769, Sess., H. R. 75th 3d (1938); Rep. Sess., No. 2161, Cong., parties (1938). The here seek to this legislative utilize history opposite ways. respondent The asserts that statutory exemption assurance “was never intended to countenance a mass invasion drug the retail sale hospitals,” Respondent market Brief and that what in mind was Congress had “the role traditionally occupied by id., at 35. hospitals,” petitioners assert *11 that the statute written to assist a wide range 1938 “was nonprofit operate possible at the institutions lowest cost in public interest,” Brief Petitioners and 17, that the focus was on the character of the institution, on particular not features of its program, not only id., on operated institutions a those that at loss, at 17-18. fully by
We are either view. The persuaded modern hospital developed American from an institution originally poor. intended for the sick Eastern Ken See tucky Simon, Rights Organization v. U. S. Welfare App. D. at 249, 1288; 506 F. D. Fisch, E. C., 2d, & E. Charities and Charitable Foun Freed, Schachter, § dations 322 (1974); Bromberg, The Charitable Hos pital, 20 Cath. U. L. 238-240 237, (1970). Rev. Lan guage in bill which became the 1938 that would Act, only exempted have to nonprofit “sup sales institutions in ported whole or in part public subscriptions,” was Cong. deleted, Rec. 6065 Act's (1938), exemp provision tion was not so restricted and confined. We thus do might not relate the exemption what be de nonprofit scribed as hospital’s original or “traditional” status. On the in Act hand, other there is nothing that indicates that is to exemption provision ap its plied and expanded automatically to whatever new ven nonprofit ture the finds in attractive these changing days. Congress surely did not intend to give the hospital a blank check. Had it so intended, qualified purchases by would not nonprofit have institu way tions in Rep. it did 13c. R. See H. No. (1968). 90th Cong., Sess., 2d 78-79 We are con cerned, all, with an from an exemption after antitrust general statute, accepted principles, hereinabove set forth, application do have even in the nonprofit hospital context. provision exemption
We therefore conclude that one; of the Act limited Nonprofit Institutions is a just because it is a nonprofit hospital purchasing pharmaceutical products pur- does not mean that all its exempt Robinson-Patman; chases are that the test is the language statute, obvious one in the inherent “purchases ; use” namely, supplies of their for their own may reasonably that “their own use” is what be re- garded as use the sense that such promotes of and insti- intended operation in persons pa- tutional the care of who are its *12 implies tients. This the limitation it and turns the naturally measure from to purchase the the as 13c use, In this requires. categories focus the we consider several above. listed y 1, 2, and 3. As to these categories, three we reiterate already our conclusions in light enunciated the the concession respondent. Dispensation the to the bed- occupying inpatient and to patient hospital’s the at the emergency in facility, either case for use hospital on the premises, is a of the institution’s basic function, and dispensation for the hospital’s “own use.” That it is patient the rather hospital than the that consumes is not determinative, and, indeed, respondent here does not contend otherwise. A like result with respect follows to dispensation to the hospital’s outpatient when that patient uses pharmaceutical product on the hospital’s premises.
4 and 5. The take-home prescription, usually con- a tinuance of, supplement or to, what has prescrip- been tively hospital administered at the the recipient while was an inpatient, emergency facility out- patient, or patient, us, takes to be sure, beyond one small step hospital’s outside the door. patient The is released from care to continue his treatment under recuperation something less than hospital’s emergency or routine intensive, or, more regular, even, (if casual care offers that type), and less than its its consultative service at outpatient facility. The release en- vironment into the home is step the next the chain patient’s treatment on way resumption to his activity completely normal free of med- treatment. ical supervision the hospital’s participation toit this point, least, although at approaching an are con- end, tinuous and real, parts are distinct transition from hospital care home care. We therefore conclude genuine take-home prescription, intended, for a limited and reasonable time, of, sup- continuation or plement to, treatment that was administered to the patient needed, who and now continues need, treatment, is for “own use.” disagree We therefore with the Appeals Court of as to categories 4 and 5. contrary We feel that a on ruling our part unduly would and undeservedly emphasize doorsill of the hospital, and that a line draw at that threshold would arbitrary and not consistent with con- gressional In intent. these instances, the hospital’s “own *13 use” pharmaceutical of the products realistically extends and not inappropriately beyond somewhat that threshold.
6. We conclude, however, that the refill for hos- pital’s former patient on the is of other side the line that divides that which is in the hospital’s “own use” from that which is not. Inevitably, accord with the test above set forth, point there comes a where the dispensa- pharmaceutical tion of products is not for the institution’s “own use.” point, That positioned we feel, short the refill. Continuation of drug’s a use some time after initial prescription at the hospital may well in- dicated for the particular patient, but, except for the lim- not it is above, referred to prescription take-home
ited for its certainly it and use,” “own hospital's under hos- originated it just because forever “own use” limitation statute’s that the conclude auspices. We pital hospital with the connection when been exceeded has stage. the refill it is at as as attenuated become has to its employee or hospital’s Dispensation to the 7. use or for the personal purchaser’s for the student A problem. different a somewhat poses his dependent render- persons populated hospital organization is an hospital’s kinds. The of various services ing essential phar- hospital function. The employees enable his employee whole; macy is but a the institu- the extent And to parts. services are other scene— hospital on the medical tion has students practical nurs- hospital’s persons in interns, nursing, paramedical, those in programs, and nurse’s aide ing, the like—the fields, and administrative chaplaincy, its activities hospital’s purposes and connection with the We institutionally conclude, intimate. is obvious and pharmacy to the hos- dispensation therefore, liter- pital’s employee or each student, whom, for his own use hospital is a of the family, member ally, enhances the or for the use his dependent, function in the “own qualifies being But within the 13c.9 we draw use,” meaning dispensation employee’s for the or the line between or for of his personal dependent, student’s the use use, on the one and that the use of even another, hand, family on nondependent member, the other. preceding para- 8 and 9. What we have said applies equal dispensation with force to to a graph that, respect availability The fact with employees, might compelled pharmacy subject be the of a collective- *14 view, bargaining agreement, controlling. our cannot be physician personal member of the staff for his use or for personal the use of his dependent. physician staff member, though employee an in the technical sense time being hospital’s full in the and on its service vital It payroll, nevertheless is to its existence. is he supplies who the patient and who perhaps engages, directly and at least to some extent the staff through in the hospital’s profes- formulation of the organization, sional operative policies. activity His at the hos- pital is in hospital’s very purpose use—its for exist- dispensation ence—and physician depend- his is for hospital’s we use,” “own within ent, think, § 13c. again
We draw the physician’s when line, however, acquisition from hospital pharmacy is not his personal or that of his or not for the dependent, is hospital. To extent the physician utilizes his proximity to and it permits him pharmacy, so do, for other persons or other as this even, uses— occasionally record intimates, dispensation in that portion of his private practice unconnected with the requirement of “own use” —the not fulfilled. Here again the relationship is too attenu- ated for statutory benefit, and we hold that 13c§ definitely not satisfied.
10. The walk-in prescription buyer for the most affords difficulty little for us in the context of 13c. § Even though one acknowledges full weight of the argument that the modern hospital is a different institu- tion from what it was when the Nonprofit Institutions adopted Act was and that increasingly has become focus of health care in the community, of extension 13c to the walk-in who no customer, has present connection with the hospital and its pharmacy other than a place to have his prescription filled, would *15 pharmacy advantaged commercially make the open to all comers community store drug just another positioned devastatingly and prescription services This pharmacies. commercial competing to respect with concept beyond use" “own would extend the in 13c. Congress contemplated by that buyer generally walk-in that therefore hold We We exemption. recognize, not the statute’s within occasion when hos- may an that there however, the com- only available in one pital is the pharmacy The emergency situation. particular meet munity to possibility with a tele- counter this respondent seeks to to providing reference yellow-page phone book delivery some or serv- emergency 24-hour service, pharmacies. retail metropolitan Portland by certain ice, may That be. We are con- Respondent 56. Brief for tent, emergency to conclude that the occasional however, de any presence its soli- minimis, in event, present not kind. tarily trigger litigation would hospital pharmacy holds the long emergency So as only and entertains situation within as a bounds, not gesture, humanitarian shall condemn the we suppliers and its to a Robinson-Patman violation because presence dispensation walk-in the occasional type.10 Logan above, Lanes, referred v. We n. Inc. Brunswick Corp. parties, respective ways, The in their seek to make as much possible Logan treble-damages of that decision. Lanes was a suit centering by Brunswick, Board, sale a Utah State of bowl ing equipment prices lanes related at lower than Brunswick charged equipment. Logan for purchased by similar The items board installed university’s were in a state building, student union and, they “primarily while students, faculty were for the use of staff University,” were the public. also used members of 2d, 378 F. 214. public during The the 20 following months in stallation, according presented by Brunswick, to affidavits amounted 2,934 128,349. lines bowled out of a total of The trial court
VI
petitioners
some
holding
that a decision
suggest
dispensations by
nonprofit hospital
to be
exempt
objectionable
establishes an
and unworkable
*16
standard for
hospitals
suppliers
and
because
“re-
their
quires a segregation
drugs
accounting
of
or
of their use
granted
summary judgment.
ground
Brunswick’s motion for
One
ruling
for
purchase
this
was
exempt
that the
The
under 13c.
was
§
Ninth Circuit affirmed. It refused to
use of
restrict the statute’s
term “supplies”
and, instead,
the
noncapital
to consumables and
items
qualified
held
term
anything required
that the
embraced
to meet the
public
institution’s needs.
It
concluded that the exact
use
amount
that,
assuming
was immaterial
public
and
even
“the
substantial
made
University
facilities,”
2d,
217,
use of the
bowling
378 F.
at
purchases
question
by
university
nonprofit
in
were made
for
presented by
its own
The
use.
situation
Students Book Co. v.
Washington
Co.,
Law Book
App.
49,
98 U.
D.
232
2d 49
S.
C.
F.
(1955),
denied,
(1956),
by
parties
cert.
The latter case self-sustaining concerned sales of lawbooks campus profit. Appeals bookstores for resale at a The Court held, App. C., 50-51, 2d, 50-51, 98 U. S. D. 5, at 232 F. at n. n. that these were not use,” sales to universities “for their own within meaning of defendant, prevailed 13c. The however, on an- § ground. other agree with the in
We court the Students Book Co. case that the purchases challenged purchases nonprofit there were not insti- type Logan Lanes, tution of the to which 13c relates. Those in § contrast, in were. The apparently distinguish Ninth Circuit would Logan present Lanes ground “[p]lant from case on the equipment acquired university’s for a segregated own use cannot be acquired for others, equipment since the same serves both uses.” 510 2d, say F. at 490. It went on to that the acquired supplies situation “of consumption for ... is otherwise.” regarded Ibid. The present court factually case as similar to just Students Book Co. As stated, however, we have in we are accord with the District of Columbia Circuit’s characterization purchases the bookstore as not being transactions with the universi- all, ties at campus but with the bookstores for resale at the latter’s profit. the institution only through
that can achieved tracing systems supply or clumsy expensive and dual drugs.” Brief use of for the regulate account undesirability sup- of a They suggest Petitioners 28. disposition of merchandise “controlling the plier’s Arnold, v. United States purchaser,” citing of a hands they Co., U. (1967), & S. 365, Schwinn claims.” exposure to supplier’s “retroactive speak Brief for Petitioners 29. but feel that understandable, we
Petitioners’ concern point from the Looking problem it is overstated. alternatives, two hospital, purchasing of view the first, easier, perhaps more,11 presented. are way dispense any for the not to pharmacy exemption 13c. hereinabove held to be outside exactly what the pharmacy The second is to do *17 recordkeep namely petitioners to establish a deplore, from segregates nonexempt the ing procedure that by the exempt supplemented This the use. would be ac supplier appropriate submission to its an counting price adjustment the is indi followed obviously This, cumbersome, is but it sure, cated. to be price Congress is the the for benefits be has exacted the no controlling stowed and it should be legislation, accounting more cumbersome than the demands that are enterprises made on com commercial of all kinds in our society plex today. may expect
The on other supplier, hand, properly liability protected to be from antitrust and reasonable upon noncollusive certifi- reliance its customer’s dispensation products cation as to its purchases it 11 Our reference to two is not meant be exclusive. alternatives to Imaginative purchasers may suppliers up well come other with recordkeeping and better means to alleviate routine whatever details may burdens exist. expect from the it is not to supplier. But unreasonable obtaining supplier to assume the burden certi- institutional fication when it seeks to with the enjoy, clearly It by 13c. does purchaser, provided the benefits its with for identification of respect responsibility this purchaser under that little addi- standard, statute’s required tional is if it imposed burden to take the small from step routinely obtaining representation second products its customer as to the use of the purchased. judgment Appeals Court of vacated, proceedings
the case is for further consistent remanded opinion. with this are to petitioners Costs allowed extent of 50%. is so It ordered. Mr. Justice took Stevens no the consideration or decision of this case. concurring.
Mr. Justice Marshall, I I join While opinion, Court’s wish to add a word about the applicability exemption by the provided Nonprofit my key Institutions Act. To mind, isAct exempts Act the Robinson-Patman only an list of but all itemized also institutions, “charitable operated profit.” institutions not C. U. S. This suggests § 13c. to me that named insti- *18 schools, colleges, public libraries, universities, tutions — churches, hospitals not intended to be limited —were to their traditional exemp- activities in the qualifying for tion, may expand but those qualify activities and still so long any as new activities for exempted supplies which purchased are are operated charitable and not profit. I agree with the Court that exemption the is not “to applied expanded automatically to whatever new finds attractive in these nonprofit hospital venture I days.” Ante, at 13. But exemp believe changing finds any tion new venture the applicable not operated is both charitable and and that attractive could one be suggestion There is no profit. —nor today finds outside made —that the activities Court within is no exemption category,* this so there fall IBut problem to address this here. write em need I opinion do not read the Court’s as fore phasize institutions —from closing hospitals exempted other —or expanding highly their charitable activities untradi ways qualifying exemption. tional and still for the I with in- Likewise, agree proper the'Court drug by in this case is whether each kind of quiry sale promotes “is of and in- operation persons tended institutional in the care of who patients.” Ante, However, its 14. are when a nonprofit institution profit, here, makes sales for as analysis I furthered, suggest, by recognition purpose of the “own use” limitation.
Since all charitable institutions Act, are covered quite obviously the purpose is not to particular freeze a charitable institution particular charity. into a kind of I Rather, it, understand purpose of the limitation is generally preclude taking ad- institution vantage of its antitrust exemption buying low-cost supplies solely for purpose of reselling them at a profit. is, Congress That primarily was interested directly aiding nonprofit by lowering institutions their operating but expenses, not interested in indirectly aiding
*This would be much case more difficult hospitals for me if the profits involved did not all drugs make on the sale of to outsiders. Ante, they not, at 7. If did we would have to determine in each sales, case whether such if hospital's even not within the institutional function, nonetheless constituted a “charitable" venture of their own. *19 such by providing with institutions them the means raising when money particularly additional such resales — supplies put competition would in the institution with retail exemption. businesses not for the eligible While I do not Congress preclude profit- believe meant making in sales the course of the institution’s charitable activities —and I agree so inquiry Court’s correct one—I suggest particular that the nexus between sales and particularly closely those activities should be scrutinized when a profit is made to assure that sales are not made primarily moneymaking purposes. Thus, only sales arguably scope within the of the insti- tution’s charitable might exempted activities when on made a nonprofit basis and exempted when made for profit. analysis After balancing with this in factor I mind, agree with the by lines drawn the Court and concur opinion. in its
Mr. Justice with Stewart, whom Mr. Justice Bren- joins, nan dissenting.
It is common ground in dispensation this case that the pharmaceutical products for consumption a hos- pital’s patients upon hospital’s premises constitutes “own products use” of the within the meaning of 15 U. controversy S. C. § 13c. The concerns the various other products “uses” catalogued these opinion. the Court’s Ante, at 8-10. to those uses As the Court of Appeals expressed its views as follows: may
“We concede respects these distribu- tion hospitals justified can be proper as a community useful thus regarded service and can be proper as a hospital function. It not, however, hospitals’ purpose ‘own use.’ . . . The for which supplies purchased these are they use to which —the to be their put are consumption. 13c Section —is *20 apply only here to cases in which can can apply said be It cannot the consumer. private cases of resale to a consumer. (quite “The hospitals properly) here are accommo- dating strangers patients, staff with means whereby they conveniently purchase can for their use. question hospitals The is not whether can community continue provide this useful service. may question providing they is whether ac- quire drugs price an acquisition such resale at against druggists. discriminates retail local We hold they may not.” 2d 489. 510 F. I agree with the Appeals Court of affirm would its judgment.