Tags: Constitutional Law, War Powers
The case of "Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Co." dealt with the expulsion of a member from a purchasing cooperative without any opportunity to challenge the expulsion. The case questioned the appropriate use of per se antitrust analysis for joint activities that can be described as a concerted refusal to deal. The case was decided through cross-motions for summary judgment after limited discovery, resulting in a sparse record. Northwest Wholesale Stationers is a purchasing cooperative that is made up of approximately 100 office supply retailers in the Pacific Northwest States. The cooperative serves as the primary wholesaler for the retailers, and non-members have the ability to purchase supplies at the same price as members. In the fiscal year of 1978, Northwest had sales of $5.8 million. The case was argued on February 19, 1985, and all Members of the Court, with the exception of Justices Marshall and Powell, who did not participate, joined the opinion.
Pacific Stationery & Printing Co. was expelled from Northwest Wholesale Stationers, a purchasing cooperative, without notice or a hearing. Pacific sued Northwest for violating § 1 of the Sherman Act. The court rejected the per se rule and granted summary judgment for Northwest. The Ninth Circuit Court of Appeals found that Northwest's expulsion of Pacific was an anticompetitive concerted refusal to deal, violating § 1 of the Sherman Act. The Supreme Court held that the decision to expel Pacific was a restraint of trade, but whether it violated the Sherman Act depended on whether it was an unreasonable restraint. The case questions whether Northwest's expulsion of Pacific falls under the per se violations of the Sherman Act. The Court of Appeals found that the lack of procedural protections made the exclusion unreasonable. The Supreme Court disagrees with the Court of Appeals' reliance on Silver v. New York Stock Exchange and limited permissible self-policing to situations where adequate procedural safeguards were in place.
The Exchange violated the Securities Exchange Act by not providing notice and a hearing to petitioners. Section 4 of the Robinson-Patman Act only provides narrow immunity to cooperatives and does not exempt them from the Sherman Act. The absence of procedural safeguards does not determine antitrust analysis. Wholesale purchasing cooperatives like Northwest are not likely to result in predominantly anticompetitive effects. A rule-of-reason analysis should be applied unless there is evidence of anticompetitive conduct. The Court of Appeals applied per se analysis inappropriately, so the judgment is reversed and the case is remanded for further proceedings.
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