Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Company

PETITIONER: Northwest Wholesale Stationers, Inc.
RESPONDENT: Pacific Stationery & Printing Company
LOCATION: Parking Lot

DOCKET NO.: 83-1368
DECIDED BY: Burger Court (1981-1986)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 472 US 284 (1985)
ARGUED: Feb 19, 1985
DECIDED: Jun 11, 1985

ADVOCATES:
Catherine G. O'Sullivan - on behalf of the United States as amicus curiae in support of petitioner
David J. Sweeney - on behalf of the petitioner
Joseph P. Bauer - on behalf of the respondent

Facts of the case

Question

Media for Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Company

Audio Transcription for Oral Argument - February 19, 1985 in Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Company

Warren E. Burger:

We will hear arguments first this morning in Northwest Wholesale Stationers against Pacific Stationery and Printing Co.--

Mr. Sweeney, you may proceed whenever you are ready.

David J. Sweeney:

Mr. Chief Justice, and may it please the Court, the petitioner Northwest Wholesale Stationers is a non-profit purchasing cooperative.

It pools the collective buying ability of its members to achieve larger aggregate purchases, thus lowering prices to its members.

At year end, what would be profits are distributed to its members as rebates, which are exempt from being categorized as price discrimination under the Robinson-Patman Act.

The members of the cooperative are retail stationery stores located throughout the five western states.

There is nothing in the record which demonstrates what market impact or power the cooperative had or in fact the definition of what the market is.

The respondent Pacific Stationery is a wholesaler-retailer combination, and used its cooperative membership for purchases of odd lot and round out items when it could not stock them in its own wholesale inventory.

It had additional sources of supply from manufacturers and other suppliers.

After Pacific's ownership changed, it filed another membership application.

That application was denied, although they were informed that they could continue to purchase from the cooperative.

Pacific then filed a Sherman One antitrust lawsuit alleging that a group boycott had occurred, that its denial of cooperative membership in the absence of a due process hearing constituted a per se violation under liability theory based on Silver versus the New York Stock Exchange.

At the District Court level on cross motions for summary judgment, the District Court dismissed plaintiff's claim, reasoning that Pacific failed to submit any evidence showing a restraint on competition as distinguished from alleged unilateral harm to itself.

The Ninth Circuit, in a divided opinion, reversed, finding per se liability for the cooperative's actions.

It stated that termination in the absence of a hearing made the practice so likely to be anticompetitive that it was per se unreasonable.

Our petition followed.

The recent decisions of this Court make it clear that under either a rule of reason or a per se analysis, the goal is to form a judgment about the competitive significance of conduct, that courts must view the purpose and effect on competition.

The Ninth Circuit should be reversed because it found per se liability under a simplistic analysis which simply characterized the conduct instead of viewing what actual effect, if any, the conduct had.

In recent cases, this Court has authorized the use of an analysis of competitive impact: What is the economic reality which occurred as a result of the conduct?

Sandra Day O'Connor:

Mr. Sweeney, I take it there is nothing in the record to support the District Court's observation that the exclusion of Pacific didn't affect competition.

David J. Sweeney:

The District Court in its oral opinion made no specific findings of fact or--

Sandra Day O'Connor:

Well, I know that.

Is there anything in the record that would support it?

David J. Sweeney:

--Your Honor, yes, there is.

The only factual impact in the record is the loss of rebate, which amounted to approximately $9,800.

That was the $9,800 in its last year with the cooperative.

So the record would reflect that in fact a rebate had been lost.

There is nothing in the record that would indicate what effect the loss of that rebate had on Pacific unilaterally as a competitor.

There is nothing in the record to demonstrate--

Sandra Day O'Connor:

Would there be enough then in the record to even apply the kind of quick look analysis the SG is suggesting should be applied?