Jefferson County Pharmaceutical Ass'n, Inc. v. Abbott Laboratories

460 U.S. 150, 103 S. Ct. 1011, 74 L. Ed. 2d 882, 1983 U.S. LEXIS 18, 51 U.S.L.W. 4195

Opinions

Justice Powell

delivered the opinion of the Court.

The issue presented is whether the sale of pharmaceutical products to state and local government hospitals for resale in competition with private retail pharmacies is exempt from the proscriptions of the Robinson-Patman Act.

) — I

Petitioner, a trade association of retail pharmacists and pharmacies doing business in Jefferson County, Alabama, commenced this action in 1978 in the District Court for the Northern District of Alabama as the assignee of its members’ claims. Respondents are 15 pharmaceutical manufacturers, the Board of Trustees of the University of Alabama, and the Cooper Green Hospital Pharmacy. The University operates a medical center, including hospitals, and a medical school. Located in the University’s medical center are two pharmacies. Cooper Green Hospital is a county hospital, existing as a public corporation under Alabama law.

The complaint seeks treble damages and injunctive relief under §§4 and 16 of the Clayton Act, 38 Stat. 731, 737, 15 U. S. C. §§ 15 and 15/26" style="color:var(--green);border-bottom:1px solid var(--green-border)">26, for alleged violations of §§ 2(a) and (f) of the Clayton Act, 38 Stat. 730, as amended by the Robinson-Patman Act (Act), 49 Stat. 1526, 15 U. S. C. §§ 13(a) and (f). Petitioner contends that the respondent manufacturers violated § 2(a)¹ by selling their products to the University’s two pharmacies and to Cooper Green Hospital Pharmacy at prices lower than those charged petitioner’s members for like products. Petitioner alleges that the respondent hospital pharmacies knowingly induced such lower prices in violation of § 2(f)² and sold the drugs to the general public in direct competition with privately owned pharmacies. Petitioner also alleges that the price discrimination is not exempted from the proscriptions of the Act by 15 U. S. C. § 13c.³

Respondents moved to dismiss the complaint on the ground that state purchases⁴ are exempt as a matter of law from the sanctions of § 2. In granting respondents’ motions, the District Court expressly accepted as true the allegations that local retail pharmacies had been injured by the challenged price discrimination and that at least some of the state purchases were not exempt under § 13c. 656 F. 2d 92, 98 (CA5 1981) (reprinting District Court’s opinion as Appendix). The District Court held that “governmental purchases are, without regard to 15 U. S. C. § 13c, beyond the intended reach of the Robinson-Patman Price Discrimination Act, at least with respect to purchases for hospitals and other traditional governmental purposes.” Id., at 102. The Court of Appeals for the Fifth Circuit, in a divided per curiam decision, affirmed “on the basis of the district court’s Memorandum of Opinion.” Id., at 93.⁵

We granted certiorari to resolve this important question of federal law. 455 U. S. 999 (1982). We now reverse.

The issue here is narrow. We are not concerned with sales to the Federal Government, nor with state purchases for use in traditional governmental functions.⁶ Rather, the issue before us is limited to state purchases for the purpose of competing against private enterprise — with the advantage of discriminatory prices — in the retail market.⁷

The courts below held, and respondents contend, that the Act exempts all state purchases. Assuming, without deciding, that Congress did not intend the Act to apply to state purchases for consumption in traditional governmental functions, and that such purchases are therefore exempt, we conclude that the exemption does not apply where a State has chosen to compete in the private retail market.

i — f h — i b — i

The Robinson-Patman Act by its terms does not exempt state purchases. The only express exemption is that for nonprofit institutions contained in 15 U. S. C. § 13c.⁸ Moreover, as the courts below conceded, “[t]he statutory language — ‘persons’ and ‘purchasers’ — is sufficiently broad to cover governmental bodies. 15 U. S. C. §§12, 13(a, f).” 656 F. 2d, at 99.⁹ This concession was compelled by several of this Court’s decisions.¹⁰ In City of Lafayette v. Louisiana Power & Light Co., 435 U. S. 389, 395 (1978), for example, we stated without qualification that “the definition of ‘person’ or ‘persons’ embraces both cities and States.”¹¹

Respondents would distinguish City of Lafayette from the case before us because it involved the Sherman Act rather than the Robinson-Patman Act.¹² Such a distinction ignores the specific reference to the Robinson-Patman Act in our discussion of the all-inclusive nature of the term “person.” Id., at 397, n. 14. We do not perceive any reason to construe the word “person” in that Act any differently than we have in the Clayton Act, which it amends,¹³ and it is undisputed that the Clayton Act applies to States. See Hawaii v. Standard Oil Co., 405 U. S. 251, 260-261 (1972).¹⁴ In sum, the plain lan guage of the Act strongly suggests that there is no exemption for state purchases to compete with private enterprise.

>

The plain language of the Act is controlling unless a different legislative intent is apparent from the purpose and history of the Act. An examination of the legislative purpose and history here reveals no such contrary intention.

A

Our eases have been explicit in stating the purposes of the antitrust laws, including the Robinson-Patman Act. On numerous occasions, this Court has affirmed the comprehensive coverage of the antitrust laws and has recognized that these laws represent “a carefully studied attempt to bring within [them] every person engaged in business whose activities might restrain or monopolize commercial intercourse among the states.” United States v. South-Eastern Underwriters Assn., 322 U. S. 533, 553 (1944).¹⁵ In Goldfarb v. Virginia State Bar, 421 U. S. 773 (1975), the Court observed that “our cases have repeatedly established that there is a heavy pre sumption against implicit exemptions” from the antitrust laws. Id., at 787 (citing United States v. Philadelphia National Bank, 374 U. S. 321, 350-351 (1963); California v. FPC, 369 U. S. 482, 485 (1962)).¹⁶ In City of Lafayette, supra, applying antitrust laws to a city in competition with a private utility, we held that no exemption for local governments would be implied. The Court emphasized the purposes and scope of the antitrust laws: “[T]he economic choices made by public corporations . . . , designed as they are to assure maximum benefits for the community constituency, are not inherently more likely to comport with the broader interests of national economic well-being than are those of private corporations, acting in furtherance of the interests of the organization and its shareholders.” 435 U. S., at 403. See also id., at 408.¹⁷

These principles, and the purposes they further, have been helpful in interpreting the language of the Robinson-Patman Act. As Justice Blackmun stated for the Court in Abbott Laboratories v. Portland Retail Druggists Assn., Inc., 425 U. S. 1, 11-12 (1976):

“It has been said, of course, that the antitrust laws, and Robinson-Patman in particular, are to be construed liberally, and that the exceptions from their application are to be construed strictly. United States v. McKesson & Robbins, 351 U. S. 305, 316 (1956); FMC v. Seatrain Lines, Inc., 411 U. S. 726, 733 (1973); Perkins v. Standard Oil Co., 395 U. S. 642, 646-647 (1969). The Court has recognized, also, that Robinson-Patman ‘was enacted in 1936 to curb and prohibit all devices by which large buyers gained discriminatory preferences over smaller ones by virtue of their greater purchasing power.’ FTC v. Broch & Co., 363 U. S. 166, 168 (1960); FTC v. Fred Meyer, Inc., 390 U. S. 341, 349 (1968). Because the Act is remedial, it is to be construed broadly to effectuate its purposes. See Tcherepnin v. Knight, 389 U. S. 332, 336 (1967); Peyton v. Rowe, 391 U. S. 54, 65(1968).”

B

The legislative history falls far short of supporting respondents’ contention that there is an exemption for state purchases of “commodities” for “resale.” There is nothing whatever in the Senate or House Committee Reports, or in the floor debates, focusing on the issue.¹⁸ Some Members of Congress were aware of the possibility that the Act would apply to governmental purchases. Most Members, however, were concerned not with state purchases, but with possible limitations on the Federal Government. The most relevant legislative history is the testimony of the Act’s principal draftsman, H. B. Teegarden, before the House Judiciary Committee.¹⁹ Although the testimony is ambiguous on the application of the Act to state purchases for consumption, one conclusion is certain: Teegarden expressly stated that the Act would apply to the purchases of municipal hospitals in at least some circumstances.²⁰ Thus, his comments directly contradict the exemption found by the courts below for all such purchasing.²¹ In the absence of any other relevant evi-

dence, we find no legislative intention to enable a State, by an unexpressed exemption, to enter private competitive markets with congressionally approved price advantages.²²

V

Despite the plain language of the Act and its legislative history, respondents nevertheless argue that subsequent legislative events and decisions of District Courts confirm that state purchases are outside the scope of the Act. We turn therefore to these subsequent events.

A

Respondents cite the hearings on the Robinson-Patman Act held in the late 1960’s.²³ Testimony before the House Subcommittee investigating practices in the pharmaceutical industry indicated that the Act did not cover price discrimination in favor of state hospitals,²⁴ and Federal Trade Commission Chairman Paul Dixon disclaimed any authority over transactions involving state health care programs.²⁵ It is not at all clear, however, whether Chairman Dixon contemplated cases in which the state agency competed with private retailers, although he was aware of such practices by institutional purchasers.²⁶ Other statements expressed little more than informed, interested opinions on the issue presented, and are not entitled to the consideration appropriate for the constructions given contemporaneously with the Act’s passage.²⁷ See supra, at 159-162, and n. 22.

It is clear from the House Subcommittee’s conclusions that it did not focus on the question presented by this case. The Subcommittee found that the difference between drug prices for retailers and government customers “is extremely substantial” and “not always fully explainable by either cost justifiable quantity discounts, economies of scale, or other factors inherent in bulk distribution.” H. R. Rep. No. 1983, 90th Cong., 2d Sess., 77 (1968). In the next conclusion, it stated that “[n]umerous acts and policies of individual manufacturers seem . . . violative of the Robinson-Patman Act. . . Ibid. Thus, it is quite possible that the Subcommittee considered some state purchasing at discriminatory-prices — about which it had heard testimony — to be unlawful. The Subcommittee Report did include the awkwardly worded statement: “There is no basis apparent . . . why the mandate of the Robinson-Patman Act should not be applied to discriminatory drug sales favoring nongovernmental institutional purchasers, profit or nonprofit, to the extent there is prescription drug competition at the retail level with disfavored retail druggists.” Id., at 79. This unexceptional opinion, however, simply says that private institutional purchases may not facilitate unfair retail competition through sales at discriminatory prices. The Subcommittee said nothing expressly about the unfair competition at issue in this case.²⁸

B

Respondents also argue that, without exception, courts considering the Act’s coverage have concluded that it does not apply to government purchasers. They insist that no court has imposed liability upon a seller or buyer, under either §2(a) or §2(f), when the discriminatory price involved a sale to a State, city, or county. See Brief for Respondent Board of Trustees 31-32. There are serious infirmities in these broad assertions: (i) this Court has never held nor suggested that there is an exemption for state purchases;²⁹ (ii) the number of judicial decisions even considering the Act’s applica tion to purchases by state agencies is relatively small;³⁰ (iii) respondents cite no Court of Appeals decision that has expressly adopted their interpretation of § 2 before the decision below; (iv) some of the District Court cases upon which respondents rely are simply inapposite;³¹ (v) it is not clear that any published District Court opinion has relied solely on a state purchase exemption to dismiss a Robinson-Patman Act claim alleging injury as a result of government competition in the private market;³² and (vi) there are several cases that suggest that the Robinson-Patman Act is applicable to state purchases for resale purposes.³³ This judicial track record is in no sense comparable to the unbroken chain of judical decisions upon which this Court previously has relied for ascertaining a construction of the antitrust laws that Congress over a long period of time has chosen to preserve. See cases cited, n. 27, supra.

Respondents also seek support in the interpretations of various commentators and executive officials. But the most authoritative of these sources indicate that the question pre sented is unsettled;³⁴ others are not necessarily inconsistent with our holding;³⁵ and in some cases they support it.³⁶ Thus, Congress cannot be said to have left untouched a universally held interpretation of the Act.³⁷

In sum, it is clear that postenactment developments— whether legislative, judicial, or in commentary — rarely have considered the specific issue before us. There is simply no unambiguous evidence of congressional intent to exempt purchases by a State for the purpose of competing in the private retail market with a price advantage.³⁸

I — I >

The Robinson-Patman Act has been widely criticized, both for its effects and for the policies that it seeks to promote. Although Congress is well aware of these criticisms, the Act has remained in effect for almost half a century. And it certainly is “not for [this Court] to indulge in the business of policy-making in the field of antitrust legislation. . . . Our function ends with the endeavor to ascertain from the words used, construed in the light of the relevant material, what was in fact the intent of Congress.” United States v. Cooper Corp., 312 U. S. 600, 606 (1941).

“A general application of the [Robinson-Patman] Act to all combinations of business and capital organized to suppress commercial competition is in harmony with the spirit and impulses of the times which gave it birth.” South-Eastern Underwriters, 322 U. S., at 553. The legislative history is replete with references to the economic evil of large organizations purchasing from other large organizations for resale in competition with the small, local retailers. There is no rea son, in the absence of an explicit exemption, to think that Congressmen who feared these evils intended to deny small businesses, such as the pharmacies of Jefferson County, Alabama, protection from the competition of the strongest competitor of them all.³⁹ To create an exemption here clearly would be contrary to the intent of Congress.

VII

We hold that the sale of pharmaceutical products to state and local government hospitals for resale in competition with private pharmacies is not exempt from the proscriptions of the Robinson-Patman Act. The judgment of the Court of Appeals accordingly is reversed, and the case is remanded for further proceedings consistent with this opinion.

It is so ordered.

Footnotes

1

Section 2(a), 15 U. S. C. § 13(a), provides in relevant part:

“It shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality, where either or any of the purchases involved in such discrimination are in commerce, where such commodities are sold for use, consumption, or resale within the United States . . . , and where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them . . .

2

Section 2(f), 15 U. S. C. § 13(f), provides:

“It shall be unlawful for any person engaged in commerce, in the course of such commerce, knowingly to induce or receive a discrimination in price which is prohibited by this section.”

3

Section 13c provides:

“Nothing in [the Robinson-Patman Act] shall apply to purchases of their supplies for their own use by schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit.”

4

“State purchases” are defined as sales to and purchases by a State and its agencies.

5

The District Court, and thus the Court of Appeals, agreed that “[t]he claims against the Board must ... be treated as equivalent to claims against the State itself.” 656 F. 2d, at 99. Accordingly, both courts held that the Eleventh Amendment bars petitioner’s claim for damages against the University. Petitioner did not challenge this holding in its appeal from the District Court’s decision.

6

Respondents argue that application of the Act to purchases by the State of Alabama would present a significant risk of conflict with the Tenth Amendment and that we therefore should avoid any construction of the Act that includes such purchases. See NLRB v. Catholic Bishop of Chicago, 440 U. S. 490, 501 (1979). There is no risk, however, of a constitutional issue arising from the application of the Act in this case: The retail sale of pharmaceutical drugs is not “indisputably” an attribute of state sovereignty. See Hodel v. Virginia Surface Mining & Reclamation Assn., Inc., 452 U. S. 264, 288 (1981). It is too late in the day to suggest that Congress cannot regulate States under its Commerce Clause powers when they are engaged in proprietary activities. See, e. g., Parden v. Terminal Railway of Alabama State Docks Dept., 377 U. S. 184, 187-193 (1964). If the Tenth Amendment protects certain state purchases from the Act’s limitations, such as for consumption in traditional governmental functions, those purchases must be protected on a case-by-case basis. Cf. City of Lafayette v. Louisiana Power & Light Co., 435 U. S. 389, 413, and n. 42 (1978) (plurality opinion).

7

Special solicitude for the plight of indigents is a traditional concern of state and local governments. If, in special circumstances, sales were made by a State to a class of indigents, the question presented, that we need not decide, would be whether such sales are “in competition” with private enterprise. The District Court correctly assumed that the private and state pharmacies in this case are “competing pharmacies.” 656 F. 2d, at 98. See also n. 8, infra.

8

The District Court properly assumed, for purposes of making its summary judgment, that at least some of the hospital purchases would not be covered by the § 13c exemption. See n. 3, supra, and accompanying text. Therefore, we need not consider whether this express exemption would support summary judgment in cases against state hospitals purchasing for their own use. See n. 20, infra.

9

The words “person” and “persons” are used repeatedly in the antitrust statutes. See 15 U. S. C. §§7, 12, 15.

10

See, e. g., Georgia v. Evans, 316 U. S. 159, 162 (1942) (State is a “person” under § 7 of the Sherman Act); Chattanooga Foundry & Pipe Works v. City of Atlanta, 203 U. S. 390, 396 (1906) (municipality is a “person” within the meaning of § 8 of the Sherman Act). See also Pfizer Inc. v. Government of India, 434 U. S. 308, 318 (1978) (foreign nation is a “person” under § 4 of the Clayton Act).

The Court has not considered it at all “anomalous to require compliance by municipalities with the substantive standards of other federal laws which impose . . . sanctions upon ‘persons.’” City of Lafayette v. Louisiana Power & Light Co., supra, at 400. See California v. United States, 320 U. S. 577, 585-586 (1944); Ohio v. Helvering, 292 U. S. 360, 370 (1934). One case is of particular relevance. In Union Pacific R. Co. v. United States, 313 U. S. 450 (1941), the Court considered the applicability to a city of § 1 of the Elkins Act, 32 Stat. 847, as amended, 34 Stat. 587, 49 U. S. C. § 41(1) (repealed 1978), “a statute which essentially is an antitrust provision serving the same purposes as the anti-price-discrimination provisions of the Robinson-Patman Act.” City of Lafayette, supra, at 402, n. 19. The Union Pacific Court expressly found that a municipality was a “person” within the meaning of the statute. 313 U. S., at 462-463. See also City of Lafayette, supra, at 401, n. 19.

11

The word “purchasers” has a meaning as inclusive as the word “person.” See 80 Cong. Rec. 6430 (1936) (remarks of Sen. Robinson) (“The Clayton Antitrust Act contains terms general to all purchasers. The pending bill does not segregate any particular class of purchasers, or exempt any special class of purchasers”).

12

The only apparent difference between the scope of the relevant laws is the extent to which the activities complained of must affect interstate commerce. Congress’ decision in the Robinson-Patman Act not to cover all transactions within its reach under the Commerce Clause, see Gulf Oil Corp. v. Copp Paving Co., 419 U. S. 186, 199-201 (1974), does not mean that Congress chose not to cover the same range of “persons” whose conduct “in commerce” is otherwise subject to the Act.

13

Indeed, the House and Senate Committee Reports specifically state that “[t]he special definitions of section 1 of the Clayton Act will apply without repetition to the terms concerned where they appear in this bill, since it is designed to become by amendment a part of that act.” H. R. Rep. No. 2287, 74th Cong., 2d Sess., pt. 1, p. 7 (1936); S. Rep. No. 1502, 74th Cong., 2d Sess., 3 (1936). See 80 Cong. Rec. 3116 (1936) (remarks of Sen. Logan) (“[M]any have complained because the provisions of the bill apply to ‘any person engaged in commerce.’. . . The original Clayton Act contains that exact language, and it is carried into the bill under consideration. The language of the Clayton Act was used because it has been construed by the courts”). Given their common purposes, it should not be surprising that the common terms of the Clayton and Robinson-Patman Acts should be construed consistently with each other. See id,., at 8137 (remarks of Rep. Michener) (“The Patman-Robinson bill does not suggest a new policy or a new theory. The Clayton Act was enacted in 1914, and it was the purpose of that act to do just what this law sets out to do”); id., at 3119 (remarks of Sen. Logan) (purpose of Robinson-Patman bill is to strengthen Clayton Act); id., at 6151 (address by Sen. Logan) (same).

14

Justice O’Connor, in her dissenting opinion, questions our use of antitrust cases to define a word common to the antitrust laws. She would distinguish all of these cases uniformly holding States to be included in the word “persons,” because none has held “that States or local governments are persons for purposes of exposure to liability as purchasers under the provisions of the Clayton Act.” Post, at 177 (emphasis in original). The dissent takes no notice, however, of our decision last Term in Community Communications Co. v. City of Boulder, 455 U. S. 40, 56 (1982), in which the Court stated that the antitrust laws, “like other federal laws imposing civil or criminal sanctions upon ‘persons,’ of course apply to municipalities as well as to other corporate entities.” No authority is cited for the dissent’s distinction between “persons” entitled to sue under the antitrust laws and “persons” subject to suit under those laws.

15

See, e. g., Pfizer Inc. v. Government of India, supra, at 312-313 (noting “broad scope of the remedies provided by the antitrust laws”) (applying Sherman Act eases to construe Clayton Act); Mandeville Island Farms, Inc. v. American Crystal Sugar Co., 334 U. S. 219, 236 (1948) (“[Sherman] Act is comprehensive in its terms and coverage, protecting all who are made victims of the forbidden practices by whomever they may be perpetrated”) (emphasis added).

16

See, e. g., National Gerimedical Hospital & Gerontology Center v. Blue Cross of Kansas City, 452 U. S. 378, 388 (1981); City of Lafayette, 435 U. S., at 398, 399; Abbott Laboratories v. Portland Retail Druggists Assn., Inc., 425 U. S. 1, 11-12 (1976); United States v. National Assn. of Securities Dealers, Inc., 422 U. S. 694, 719-720 (1975).

17

In one important sense, retail competition from state agencies can be more invidious than that from chainstores, the particular targets of the Robinson-Patman Act. Volume purchasing permits any large, relatively efficient, retail organization to pass on cost savings to consumers, and, to that extent, consumers benefit merely from economy of scale. But to the extent that lower prices are attributable to lower overhead, resulting from federal grants, state subsidies, free public services, and freedom from taxation, state agencies merely redistribute the burden of costs from the actual consumers to the citizens at large. An exemption from the Robinson-Patman Act could give state agencies a significant additional advantage in certain commercial markets, perhaps enough to eliminate marginal or small private competitors. Consumers, as citizens, ultimately will pay for the full costs of the drugs sold by the state agencies involved in this case. Because there is no reason to assume that such agencies will provide retail distribution more efficiently than private retail pharmacists, consumers will suffer to the extent that state retail activities eliminate more efficient, private retail distribution systems.

18

Justice O’Connor’s dissenting opinion repeatedly emphasizes that Congress in 1936 did not focus specifically on the issue presented here. See post, at 180, 182, 187, and n. 10. This may well be true, as the likelihood of state entities competing in the private sector was remote in 1936. It cannot be contended, however, that Congress specifically intended to allow the competition at issue here. In any event, the absence of congressional focus is immaterial where the plain language applies. See, e. g., United States v. South-Eastern Underwriters Assn., 322 U. S. 533, 556-558 (1944); Browder v. United States, 312 U. S. 335, 339 (1941); De Lima v. Bidwell, 182 U. S. 1, 197 (1901).

19

“[Rep.] Lloyd: Would this bill, in your judgment, prevent the granting of discounts to the United States Government?

“Mr. Teegarden: Not unless the present Clayton Act does so. . . .

“[Rep.] Lloyd: For instance, the Government gets huge discounts. . . . Now, would that discount be barred by this bill?

“Mr. Teegarden: I do not see why it should, unless a discount contrary to the present bill would be barred — that is, the present law — would be barred by that bill.

“Aside from that, my answer would be this: The Federal Government is not in competition with other buyers from these concerns. . . .

“The Federal Government is saved by the same distinction .... They are not in competition with anyone else who would buy.

“[Rep.] Hancock: It would eliminate competitive bidding all along the line, would it not, in classes of goods that would be covered by this bill?

“Mr. Teegarden: You mean competitive bidding on Government orders?

“[Rep.] Hancock: Government, State, city, municipality.

“Mr. Teegarden: No; I think not.

“[Rep.] Michener: If it did do it, you would not want it, would you?

“Mr. Teegarden: No; I would not want it. It certainly does not eliminate competitive bidding anywhere else, and I do not see how it would with the Government.

“[Rep.] Hancock: You would have to bid to the city, county, exactly the same as anybody else; same quantity, same price, same quality?

“Mr. Teegarden: No.

“[Rep.] Hancock: Would they or could they sell to a city hospital any cheaper than they would to a privately-owned hospital, under this bill?

“Mr. Teegarden: I would have to answer it in this way. In the final analysis, it would depend upon numerous questions of fact in a particular case. If the two hospitals are in competition with each other, I should say then that the fact that one is operated by the city does not save it from the bill. If they are not in competition with each other, then they are in a different sphere.

“The facts of the situation are not present upon which to predicate a discrimination, in the nature of the case. I do not see that that question becomes any different under this bill from what it is under the present section 2 of the Clayton Act, for that bill also prohibits discrimination generally in the same terms that this does. But it differs in the breadth of the exceptions. That is the only difference between the two bills.” Hearings on H. R. 8442 et al. before the House Committee on the Judiciary, 74th Cong., 1st Sess., 208-209 (1935) (emphasis added) (hereinafter 1935 Hearings).

20

Justice Stevens agrees that state and local governments may be “purchasers” within the meaning of the Robinson-Patman Act. See post, at 171. He joins in Justice O’Connor’s dissent, however, on the basis of a novel theory: that state and local agencies may never be in “competition” with private parties within the meaning of the Act. See ibid. This is an economic fiction: If in fact a State participates in the private retail pharmaceutical market, it competes with the private participants. Justice Stevens relies on one statement by witness Teegarden in the 1935 House Hearings, but attaches no significance to a further statement by the same witness: “In the final analysis, it would depend upon numerous questions of fact in a particular case. If the two hospitals are in competition with each other, I should say then that the fact that one is operated by the city does not save it from the bill.” See 1935 Hearings, at 209 (emphasis added).

21

Teegarden subsequently submitted a written brief to the House Committee. He first rejected outright the desirability of any exemptions. See id., at 249. He then posed the question whether “the bill [would] prevent competitive bidding on Governmental purchases below trade price levels.” He stated that “[t]he answer is found in the principle of statutory construction that a statute will not be construed to limit or restrict in any way the rights, prerogatives, or privileges of the sovereign unless it so expressly provides — a principle inherited by American jurisprudence from the common law . . . .” But he also noted that “requiring a showing of effect upon competition . . . will further preclude any possibility of the bill affecting the Government.” Id., at 250.

All the cases Teegarden cited suggest that this sovereign-exception rule of statutory construction simply means that a government, when it passes a law, gives up only what it expressly surrenders. While the Robinson-Patman Act was pending before Congress, the Court stated that it could “perceive no reason for extending [the presumption against binding the sovereign by its own statute] so as to exempt a business carried on by a state from the otherwise applicable provisions of an act of Congress, all-embracing in scope and national in its purpose, which is as capable of being obstructed by state as by individual action.” United States v. California, 297 U. S. 175, 186 (1936). See California v. Taylor, 353 U. S. 553, 562-563 (1957). In the context of the Robinson-Patman Act, the rule of statutory construction on which Teegarden relied supports, at the most, an exemption for the Federal Government’s purchases. The existence of such an exemption is not before us. Cf. United States v. Cooper Corp., 312 U. S. 600, 604-605 (1941) (United States not a “person” under the Sherman Act for purposes of suing for treble damages). Moreover, Teegarden clearly assumed that governmental purchasing would not compete with private purchasing. That assumption, however, is inapplicable here.

22

Six months after the Act was passed, the Attorney General of the United States responded to an inquiry from the Secretary of War regarding the Act’s application “to government contracts for supplies.” 38 Op. Atty. Gen. 539 (1936). In ruling that such contracts are outside the Act, the Attorney General explained:

“[Statutes regulating rates, charges, etc., in matters affecting commerce do not ordinarily apply to the Government unless it is expressly so provided; and it does not seem to have been the policy of the Congress to make such statutes applicable to the Government. . . .

“The [Robinson-Patman Act] merely amended the [Clayton Act] and, in so far as I am aware, the latter Act has not been regarded heretofore as applicable to Government contracts.” Id., at 540.

Later in the letter, the Attorney General clarified that his reference was to “the Federal Government,” ibid., and gave other reasons “for avoiding a construction that would make the statute applicable to the Government in violation of the apparent policy of the Congress in such matters,” id., at 541. The Attorney General expressly relied upon Emergency Fleet Corp. v. Western Union Telegraph Co., 275 U. S. 415, 425 (1928), in which the Court upheld the granting of favorable telegraph rates to a federal corporation that competed with private enterprise.

The Attorney General’s opinion says nothing about the Act’s applicability to state agencies. Indeed, in the following year, the Attorney General of California expressly concluded that state purchases were within the Act’s proscriptions. See 1932-1939 Trade Cases ¶ 55,156, pp. 415-416 (1937). Two other early State Attorney General opinions simply do not consider whether the Act applies to state purchases for retail sales. See Opinion of Attorney General of Minnesota, 1932-1939 Trade Cases ¶ 55,157, p. 416 (1937); 26 Wis. Op. Atty. Gen. 142 (1937).

Representative Patman “presumed that the [United States] Attorney General’s reasons may be also applied to municipal and public institutions.” W. Patman, The Robinson-Patman Act 168 (1938). See also W. Patman, Complete Guide to the Robinson-Patman Act 30 (1963) (interpreting Attorney General’s opinion as exempting all governmental purchases). His interpretation is entitled to some weight, but he appears only to be interpreting — or erroneously extending — the Attorney General’s opinion and reasoning. Representative Patman’s personal intentions probably are better reflected in his introduction in 1951 and 1953 of bills to amend the Act to define “purchaser” to include “the United States, any State or any political subdivision thereof.” H. R. 4452, 82d Cong., 1st Sess. (1951); H. R. 3377, 83d Cong., 1st Sess. (1953). There is no legislative history on these bills, but it is arguable that he believed that the original intent needed to be stated expressly to negate his reading of the Attorney General’s contrary construction of the Act. In any case, Congress’ failure to pass these bills may be attributable to a reluctance to subject federal purchases to the Act. For example, in 1955,1957,1959, and 1961, Representative Keogh also unsuccessfully introduced bills to extend the Act to federal purchases only for resale. See H. R. 430, 87th Cong., 1st Sess. (1961); H. R. 155, 86th Cong., 1st Sess. (1959); H. R. 722, 85th Cong., 1st Sess. (1957); H. R. 5213, 84th Cong., 1st Sess. (1955).

It bears repeating, moreover, that none of these views — including Representative Patman’s — focuses on the state purchases alleged here: purchases to gain competitive advantage in the private market rather than purchases for use in traditional governmental functions. For the Department of Justice’s most recent statements regarding an exemption or immunity for state enterprises, see n. 37, infra.

23

The most important relevant event in the Robinson-Patman Act’s postenactment history is the amendment in 1938 excluding eleemosynary institutions, 52 Stat. 446, 15 U. S. C. § 13c. Whether the existence of an exemption in § 13c supports an exemption for certain state purchases depends upon whether § 13c is interpreted to apply to state agencies that perform the functions listed. That is a substantial issue in its own right. Compare H. R. Rep. No. 1983, 90th Cong., 2d Sess., 7-8, 78 (1968) (suggesting that § 13c does not include government agencies), with 81 Cong. Rec. 8706 (1937) (remarks of Rep. Walter) (§ 13c would apply to institutions financed by cities, counties, and States). See also City of Lafayette, 435 U. S., at 397, n. 14 (§13c includes “public libraries,” which “are, by definition, operated by local government”); Abbott Laboratories, 425 U. S., at 18, n. 10; 81 Cong. Rec. 8705 (1937) (remarks of Rep. Walter) (exemption codifies the intention of the drafters of the Robinson-Patman Act). We need not address this issue here.

24

See, e. g., 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., 73-77 (1969-1970) (William McCamant, Director of Public Affairs, National Association of Wholesalers); id., at 623 (Harold Halfpenny, counsel for the Automotive Service Industry Association); 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., 15-16 (1967-1968) (hereinafter 1967-1968 Hearings) (Earl Kintner, former FTC Commissioner, counsel for the National Association of Retail Druggists) (state purchases “probably” exempt). But see id., at 80 (remarks of Charles Fort, President, Food Town Ethical Pharmacies, Inc.) (“Robinson-Patman Act may prohibit this practice”); id., at 86 (same). There also was testimony that institutional purchasers frequently obtain drugs at lower prices than do retail pharmacies, see id., at 14, 258, 318, 1093-1094, and many witnesses complained that this discrimination adversely affected competition, see id., at A-140 to A-141, 253-262, 273, 292.

25

See H. R. Rep. No. 1983, supra n. 23, at 74.

26

After hearing his testimony, the Subcommittee posed further questions for Chairman Dixon about the eroding influence on the retail druggists’ market presented by: (i) expanding federal, state, and private group health care programs; (ii) the Federal Government’s ability to purchase from drug manufacturers at prices substantially below wholesale cost; and (iii) instances of hospitals, “both nonprofit and proprietary, selling to outpatients or even nonpatients.” Id., at 73. In his response to the Subcommittee, Chairman Dixon declined to discuss further the last category, which involved §13e issues. Id., at 74. His disclaimer of FTC authority envisioned state purchases for welfare programs, not for resale in competition with private enterprise. Thus, the issue presented here is most similar to the issue not discussed by Chairman Dixon.

27

Assuming that this postenactment commentary before the Subcommittee can be imputed to Congress — quite a leap given the failure of the Subcommittee Report to rely on it for its conclusions — “the views of a subsequent Congress form a hazardous basis for inferring the intent of an earlier one.” United States v. Price, 361 U. S. 304, 313 (1960). See, e. g., Consumer Product Safety Comm’n v. GTE Sylvania, Inc., 447 U. S. 102, 117-118, and n. 13 (1980); Oscar Mayer & Co. v. Evans, 441 U. S. 750, 758 (1979); United Air Lines, Inc. v. McMann, 434 U. S. 192, 200, n. 7 (1977) (“Legislative observations 10 years after passage of the Act are in no sense part of the legislative history”).

28

The Subcommittee also concluded that the 1938 amendment was “designed to afford immunity to private nonprofit institutions ... to the extent the sales are for the nonprofit institution’s ‘own use,’ ” H. R. Rep. No. 1983, supra n. 23, at 78, but that would indicate more the construction of § 13c than it would the intent of the 1936 Congress.

29

Indeed, our opinions suggest precisely the opposite. See City of Lafayette, supra, at 397, n. 14; Abbott Laboratories, supra, at 18-19, n. 10; California Motor Transport Co. v. Trucking Unlimited, 404 U. S. 508, 513 (1972).

30

The parties cite fewer than a dozen cases, many with unpublished opinions, that involve the application of the Robinson-Patman Act to state purchases. See nn. 31-33, infra. Cf. Blue Chip Stamps v. Manor Drug Stores, 421 U. S. 723, 731 (1975) (affirming rule adopted by “virtually all lower federal courts facing the issue in the hundreds of reported cases presenting this question over the past quarter century”) (emphasis added); Gulf Oil Corp. v. Copp Paving Co., 419 U. S., at 200-201 (adopting consistent, “longstanding” construction of Robinson-Patman Act after “nearly four decades of litigation”).

31

See Pacific Engineering & Production Co. v. Kerr-McGee Corp., 1974-1 Trade Cases ¶ 75,054, p. 96,742 (Utah 1974) (dicta) (involving Federal Government as ultimate purchaser) (relying on Attorney General’s opinion as sole support), aff’d in part and rev’d in part, 551 F. 2d 790, 798-799 (CA10) (finding legitimate competition despite different prices), cert, denied, 434 U. S. 879 (1977); Sachs v. Brown-Forman Distillers Corp., 134 F. Supp. 9, 16 (SDNY1955) (Act inapplicable because there was no proof that sales affected plaintiff adversely), aff’d on opinion below, 234 F. 2d 959 (CA2) (per curiam), cert. denied, 352 U. S. 925 (1956); General Shale Products Corp. v. Struck Constr. Co., 37 F. Supp. 598, 602-603 (WD Ky. 1941) (finding no “sale” under the Act and alternatively holding the Act inapplicable because “[n]either the government nor a city in its purchase of property considered necessary for the purposes of carrying out its governmental functions is in competition with another buyer who may be engaged in buying and reselling that article”) (emphasis supplied), aff’d, 132 F. 2d 425, 428 (CA6 1942) (expressly reserving issue whether Act applies to sales to state agency), cert. denied, 318 U. S. 780 (1943). The Sachs court also indicated, in dicta, that it was unclear whether the Act applied to state purchases. 134 F. Supp., at 16.

32

Cf. Mountain View Pharmacy v. Abbott Laboratories, No. C-77-0094 (Utah, Sept. 6,1977) (unpublished opinion) (consent by plaintiffs to dismiss with prejudice Act claims based on sales to state agencies), aff’d in part and rev’d in part, 630 F. 2d 1383 (CA10 1980) (complaint insufficient because it failed to identify products or purchasers subject to discriminatory treatment); Portland Retail Druggists Assn. v. Abbott Laboratories, No. 71-543 (Ore., Sept. 11, 1972) (unpublished, oral opinion), vacated and remanded, 510 F. 2d 486 (CA9 1974) (§ 13c applied), vacated and remanded, 425 U. S. 1 (1976). One District Court has suggested in an alternative holding that there is an exemption for state purchases for nonconsumption use. Logan Lanes, Inc. v. Brunswick Corp., No. 4-66-5, (Idaho, May 26, 1966) pp. 4-5 (unpublished opinion), aff’d, 378 F. 2d 212, 215-216 (CA9) (purchases by Utah State University within scope of § 13c; expressly declined to address “so-called governmental exemption”), cert. denied, 389 U. S. 898 (1967). All of these cases predate our decision in City of Lafayette.

33

See Burge v. Bryant Public School District, 520 F. Supp. 328, 330-332 (ED Ark. 1980), aff’d, 658 F. 2d 611 (CA81981) (per curiam); Champaign-Urbana News Agency, Inc. v. J. L. Cummins News Co., 479 F. Supp. 281, 286-287 (CD Ill. 1979) (although Act inapplicable to federal purchases, state agencies might face an opposite result), aff’d, 632 F. 2d 680 (CA7 1980); A. J. Goodman & Son v. United Lacquer Manufacturing Corp., 81 F. Supp. 890, 893 (Mass. 1949). Other cases cut against any exemption for state purchases. See Municipality of Anchorage v. Hitachi Cable, Ltd., 547 F. Supp. 633, 637-641 (Alaska 1982); Sterling Nelson & Sons v. Rangen, Inc., 235 F. Supp. 393, 399 (Idaho 1964), aff’d, 351 F. 2d 851, 858-859 (CA91965), cert. denied, 383 U. S. 936 (1966); Sperry Rand Corp. v. Nassau Research & Development Associates, 152 F. Supp. 91, 95 (EDNY 1957). Cf. Reid v. University of Minnesota, 107 F. Supp. 439, 443 (ND Ohio 1952) (expressly not addressing whether state agency exempt from Act when engaged in a business in the same manner as other business corporations).

34

See 5A Z. Cavitch, Business Organizations § 105D.01[8][c] (1973 and Supp. 1982) (opinions “divided” whether Act is applicable); 4 J. von Kalinowski, Antitrust Laws and Trade Regulation §24.06, p. 24-70 (1982) (“there is some conflict among the authorities as to whether sales to states and municipalities are covered by the Act”); id., §24.06[2]; E. Kintner, A Robinson-Patman Primer 203 (1970) (“Although [the Attorney General’s] opinion appears to have settled the matter where the federal government is concerned, some controversy has arisen over the applicability of the act to purchases by state and local governments”); F. Rowe, Price Discrimination Under the Robinson-Patman Act §4.12, p. 84 (1962).

35

Some deal only with sales to the Federal Government. See Letter from Comptroller General to Robert F. Sarlo, Veterans Administration (July 17, 1973), reprinted in 1973-2 Trade Cases ¶ 74,642. Almost all fail to mention, much less decide, whether the Act applies to state purchases for retail sales. See Report of the Attorney General Under Executive Order 10936, Identical Bidding in Public Procurement 11 (1962).

36

See 62 Cal. Op. Atty. Gen. 741 (1979); 47 N. C. Atty. Gen. 112, 115 (1977); [1948-1949] Ga. Op. Atty. Gen. 723, 727 (1949) (if state agency competes with private enterprise, it is subject to Act).

37

In its 1977 Report of the Task Group on Antitrust Immunities, at 25, the Department of Justice stated:

“The mere fact that a state has authorized a state-owned enterprise to engage in commercial activity should not be sufficient to immunize all activities of the enterprise from the antitrust laws. That test removes the clearly sovereign activities of a state from the antitrust scrutiny of the federal government while holding the commercial activities of a state-owned enterprise to the same standards requirfed] of all who engage in commercial transactions in the market.” Reprinted in Antitrust Exemptions and Immunities: Hearings before the Subcommittee on Monopolies and Commercial Law of the House Committee on the Judiciary, 95th Cong., 1st Sess., 1890 (1977).

Cf. Victory Transport Inc. v. Comisaria General de Abastecimientos y Transportes, 336 F. 2d 354, 360-362 (CA2 1964) (the charter of a ship to haul grain by a state instrumentality not a sovereign activity that would justify applying the sovereign immunity doctrine).

38

The dissent of Justice O’Connor relies in large part, not on the words of the statute, or its legislative history, but on assertions that a “general consensus [existed] in the legal and business communities that sales to governmental entities are not covered by the Robinson-Patman Act.” Post, at 182. See also post, at 174 (Stevens, J., dissenting). Justice O’Con-nor is correct that some in the business and legal community did think that an exemption existed for all state purchases. See post, at 185-187, and nn. 19 and 20. But to say there is a “consensus” is to disregard the opinion of commentators, see n. 34, supra; the views expressed that the Act is applicable to state purchases, see supra, at 161, 162-163, n. 22, and 169, and n. 37; and the most recent, relevant opinion of the Department of Justice, see supra, at 169, and n. 37. It is more accurate to say that this was an unsettled question of federal law that demanded this Court’s attention.

39

Under our interpretation, the Act’s benefits would accrue, precisely as intended, to the benefit of small, private retailers. See 1935 Hearings, at 261 (Teegarden recommending passage “for the protection of private rights”).