Group Life & Health Insurance Company v. Royal Drug Company, Inc.

PETITIONER: Group Life & Health Insurance Company
RESPONDENT: Royal Drug Company, Inc.
LOCATION: Monroe County Courthouse

DOCKET NO.: 77-952
DECIDED BY: Burger Court (1975-1981)
LOWER COURT: United States Court of Appeals for the Fifth Circuit

CITATION: 440 US 205 (1979)
ARGUED: Oct 11, 1978
DECIDED: Feb 27, 1979

ADVOCATES:
Joel H. Pullen - for respondents
Keith E. Kaiser - for petitioners
Richard A. Allen - for United States, as amicus curiae, in support of the respondents

Facts of the case

Question

Media for Group Life & Health Insurance Company v. Royal Drug Company, Inc.

Audio Transcription for Oral Argument - October 11, 1978 in Group Life & Health Insurance Company v. Royal Drug Company, Inc.

Audio Transcription for Opinion Announcement - February 27, 1979 in Group Life & Health Insurance Company v. Royal Drug Company, Inc.

Warren E. Burger:

The judgment and opinion of the Court in No. 952, Group Life & Health Insurance Company against Royal Drug Company will be announced by Mr. Justice Stewart.

Potter Stewart:

This case is here by reason of the grant of writ of certiorari to the United States Court of Appeals for the Fifth Circuit.

The respondents, 18 owners of independent pharmacies in San Antonio, Texas brought an antitrust action in a Federal District Court against the petitioners, Group Life & Health Insurance Company, known as Blue Shield of Texas, and three pharmacies also doing business in San Antonio.

The complaint alleged that the defendants had violated Section 1 of the Sherman Act by entering agreements to fix the retail prices of drugs and pharmaceuticals and that the activities of the defendants had caused Blue Shield's policyholders not to deal with certain of the plaintiffs thereby constituting an unlawful group boycott.

The trial court granted summary judgment to the defendants on the ground that the challenge agreements are totally exempt from the antitrust laws under the McCarran-Ferguson Act because the agreements are the business of insurance.

The Court of Appeals for the Fifth Circuit reversed the judgment holding that the agreements in question are not the business of insurance within the meaning of that Act.

We granted certiorari because of inter-circuit conflicts as to the meaning of the phrase "business of insurance" in the McCarran-Ferguson Act.

The issue is an important one in the -- both the Court's opinion and the dissenting are quite lengthy but I think little purpose would be served by length the oral announcement.

Suffice it to say that for the reasons set out in detail in the opinion of the Court filed today, the judgment of the Court of Appeals is affirmed.

Mr. Justice Brennan has filed a dissenting opinion which the Chief Justice, Mr. Justice Marshall and Mr. Justice Powell have joined.

Warren E. Burger:

Thank you Mr. Justice Stewart.