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

Petitioner is a wholesale purchasing cooperative whose membership consists of office supply retailers in the Pacific Northwest States. Nonmember retailers can purchase supplies from petitioner at the same price as members, but since petitioner annually distributes its profits to members in the form of a percentage rebate, members effectively purchase supplies at a lower price than do nonmembers. Petitioner expelled respondent from membership without any explanation, notice, or hearing. Thereafter, respondent brought suit in Federal District Court, alleging that the expulsion without procedural protections was a group boycott that limited its ability to compete and should be considered per se violative of § 1 of the Sherman Act. On cross-motions for summary judgment, the District Court rejected application of the per se rule and held, instead, that rule of reason analysis should govern the case. Finding no anticompetitive effect on the basis of the record, the court granted summary judgment for petitioner. The Court of Appeals reversed, holding that, although § 4 of the Robinson-Patman Act expressly approves price discrimination occasioned by such an expulsion as the one in question, and thus provides a mandate for self-regulation, nevertheless, because petitioner had not provided any procedural safeguards, the expulsion of respondent was not shielded by § 4, and therefore constituted a per se group boycott in violation of § 1 of the Sherman Act.