US SUPREME COURT DECISIONS

Appellee is the largest drug wholesaler in the United States, and sells to retailers in many states. It also manufactures its own line of brand-name drugs, which it sells to retailers and to independent wholesalers in many states. It refused to sell its brand products to independent wholesalers which had not entered into agreements that, in wholesaling appellee's products, they would adhere to the wholesale prices fixed by appellee. As a result, many independent wholesalers which were in direct competition with appellee's wholesaling operations signed such agreements.

Held: such price-fixing agreements were not exempted from the prohibitions of § 1 of the Sherman Act by the "fair-trade" provisions of the Miller-Tydings Act or the McGuire Act. Pp. 351 U. S. 306-316.

(a) Such price-fixing agreements are illegal per se under § 1 of the Sherman Act unless they are within the exemptions of the Miller-Tydings Act or the McGuire Act. Pp. 351 U. S. 308-311.

(b) The exemptions of the Miller-Tydings Act and the McGuire Act are expressly made inapplicable to agreements "between wholesalers" or "between persons, firms, or corporations in competition with each other," and these words must be taken in their normal and customary meaning. Pp. 351 U. S. 311-312.

(c) Appellee is admittedly a "wholesaler" with resale price maintenance contracts with many other "wholesalers" who are in competition with it, and it cannot be brought within the exemptions of the Miller-Tydings Act or the McGuire Act by resort to a fiction that it acts only as a manufacturer when it concludes such agreements with competing wholesalers. P. 351 U. S. 312.

(d) Even if appellee were not properly considered a "wholesaler," it would not be within the exemptions of the Miller-Tydings Act or the McGuire Act, because the price-fixing agreements here involved are "between persons, firms, or corporations in competition with each other" within the meaning of those Acts. Pp. 351 U. S. 312-313.

(e) This restrictive language is unambiguous, and a different result is not required by the legislative history of the McGuire Act. Pp. 351 U. S. 313-315. chanrobles.com-red

Page 351 U. S. 306

(f) These limitations must be construed strictly, since resale price maintenance is a privilege restrictive of a free economy. Pp. 351 U. S. 315-316.

Reversed and remanded.