Abbott Laboratories v. Durrett

• Decision Date: 25 June 1999
• Parties: ABBOTT LABORATORIES et al. v. Cecil DURRETT et al.
• Court: Alabama Supreme Court

746 So.2d 316

ABBOTT LABORATORIES et al. v. Cecil DURRETT et al.

1960464.

Supreme Court of Alabama.

June 25, 1999.

Rehearing Denied October 22, 1999.

William D. Coleman and Raymond L. Jackson of Capell, Howard, Knabe & Cobbs, P.A., Montgomery, for appellant Ciba-Geigy Corp. and on behalf of all Manufacturer defendants.

Richard H. Gill of Copeland, Franco, Screws & Gill, Montgomery, for appellant Schering-Plough Corp. and on behalf of all Manufacturer defendants.

Lawrence B. Clark and E. Burton Spence of Lange, Simpson, Robinson & Somerville, L.L.P., Birmingham, for appellants.

Joe R. Whatley, Jr., Russell Jackson Drake, and Peter Burke of Cooper, Mitch, Crawford, Kuykendall & Whatley, L.L.C., Birmingham; and Michael Straus and Philippa McC. Bainbridge of Bainbridge & Straus, Birmingham; J. Michael Rediker, Thomas L. Krebs, Steven P. Gregory, and Michael J. Skotnicki of Ritchie & Rediker, Birmingham; David Cromwell Johnson and J. Flint Liddon of Johnson, Liddon, Bear & Tuggle, Birmingham; J.L. Chestnut, Jr., of Chestnut, Sanders, Sanders & Pettaway, P.C., Selma; and T. Roe Frazer II, Richard Freese, and Dennis C. Sweet III of Langston, Frazer, Sweet & Freese, P.A., Jackson, MS, for appellees.

J. Vernon Patrick, Jr., and Jeffrey V. Havercroft of J. Vernon Patrick, Jr. & Assocs., P.C., Birmingham, for Eli Lilly & Co.

Amici curiae:

Tabor R. Novak, Jr., and E. Hamilton Wilson, Jr., of Ball, Ball, Matthews & Novak, P.A., Montgomery, for amici curiae Durr Drug Company and Bergen Brunswig Corp.

Crawford S. McGivaren, Jr., of Cabiness, Johnston, Gardner, Dumas & O'Neal, Birmingham, for amici curiae Cardinal Health, Inc., Whitmire Distribution Corp., Bindley Western Industries, Inc., McKesson Corp., and Amerisource Corp.

Melvin R. Goldman and Lori A. Schechter of Morrison & Foerster, L.L.P., San Francisco, CA; Thomas L. Long of Baker & Hostetler, Columbus, OH; Nada S. Suliaman of Arent Fox Kintner Plotkin & Kahn, Washington, DC; J. Thomas Rosch and Peter K. Huston, San Francisco, CA; and Howard D. Scher and Steven E. Bizar of Montgomery, McCracken, Walker & Rhoads, Philadelphia, PA.

Luther S. Pate IV; Herman Watson, Jr., and Samuel H. Givhan of Watson Jimmerson, P.C., Huntsville, for farming plaintiffs in another case and for "Alabama Farming Businesses"; and Jerry James Wood, Montgomery, for Home Bldrs. Ass'n of Alabama, Inc.

On Rehearing Ex Mero Motu

PER CURIAM.

The opinion of July 31, 1998, is withdrawn and the following is substituted therefor.

The issue presented on this appeal is whether Ala.Code 1975, § 6-5-60, provides a cause of action for damage alleged to have resulted from a conspiracy to control the price of brand-name prescription drugs that were shipped from companies out-of-state into Alabama. The trial court ruled that § 6-5-60 provides such a cause of action; therefore, it denied the defendants' motion for a judgment on the pleadings. We granted the defendants' request for permission to appeal that interlocutory order. Rule 5, Ala.R.App.P. We reverse and remand.

The plaintiffs, individual owners of independent drug stores in Greene and Dallas Counties, filed this action on behalf of themselves and seeking to represent a class consisting of "similarly situated independent retail pharmacists in Alabama who purchase brand-name prescription drugs from the defendant manufacturers and defendant wholesalers at illegally high prices dictated by the discriminatory pricing scheme set by the defendant manufacturers." The defendants are various drug manufacturers, drug wholesalers, health maintenance organizations, and mail-order companies. The complaint alleges that each of the manufacturer and mail-order-company defendants is a foreign corporation with its principal place of business outside Alabama and that the same is true for the majority of the wholesaler defendants. The complaint also alleges that the health-maintenance-organization defendants are Alabama corporations and that they, along with the other defendants, engaged in a conspiracy to control the price of brand-name prescription drugs shipped into Alabama. The plaintiffs allege that they were injured as a result of that conspiracy by being forced to pay the manufacturers and the wholesalers more for the drugs than was paid to those companies by the mail-order companies and the health maintenance organizations, which are alleged to have been "favored purchasers" and an integral part of the price-fixing scheme.

Citing, among other cases, Georgia Fruit Exchange v. Turnipseed, 9 Ala.App. 123, 62 So. 542 (1913); Dothan Oil Mill Co. v. Espy, 220 Ala. 605, 127 So. 178 (1930); Ex parte Rice, 259 Ala. 570, 67 So.2d 825 (1953); San Ann Tobacco Co. v. Hamm, 283 Ala. 397, 217 So.2d 803 (1968); In re Brand Name Prescription Drugs Antitrust Litigation, [No. 94 C 897, October 2, 1996] (N.D.Ill.1996), reversed, 123 F.3d 599 (7th Cir.1997); In re NASDAQ Market Makers Antitrust Litigation, 929 F.Supp. 174, 179 (S.D.N.Y.1996); and Warren v. Playmobil U.S.A., Inc., [CV-95-B-1591-S, March 19, 1996] (N.D.Ala. 1996), the defendants contend that Alabama's antitrust statutes have consistently been interpreted by state and federal courts to apply only to transactions involving intrastate commerce. The defendants argue that Alabama's antitrust statutes, including § 6-5-60, have the same field of operation today that they had when they were first enacted. According to the defendants, the legislative history of Alabama's antitrust statutes, as well as the state of federal caselaw at the time of their enactment, creates a presumption that the Legislature never intended to directly regulate agreements to control the price of goods shipped in interstate commerce. This presumption, the defendants argue, has not been overcome by the plaintiffs.

The plaintiffs contend that § 6-5-60 provides a cause of action in favor of "[a]ny person, firm, or corporation injured or damaged by an unlawful trust, combine or monopoly, or its effect, direct or indirect," and against "any person, firm, or corporation creating, operating, aiding, or abetting such trust, combine, or monopoly." According to the plaintiffs, § 6-5-60 is clear on its face and should not be construed so narrowly as to limit its application to transactions involving intrastate commerce. The plaintiffs maintain, in the alternative, that even if § 6-5-60 should be construed in light of the legislative history of Alabama's antitrust statutes and the state of federal caselaw at the time of their enactment, the clear intent of the Legislature in enacting § 6-5-60 was to regulate all agreements in restraint of trade, whether those agreements involved interstate commerce or intrastate commerce.

With the positions of the parties in mind, we pause to point out what this case is not about. We are not here concerned with whether the Legislature, based on the current state of federal caselaw, has the power to enact a statute, such as § 6-5-60, to provide a means of redress to Alabama companies for indirect injuries suffered as the result of agreements to control the price of goods shipped through interstate commerce. See California v. ARC America Corp., 490 U.S. 93, 109 S.Ct. 1661, 104 L.Ed.2d 86 (1989), cited by the parties for the proposition that the Legislature now has that power.¹ This Court has held that an Alabama statute does not expand like an accordion with changes in federal law bearing on the Legislature's power. Instead, we are concerned only with whether the Legislature, when it enacted § 6-5-60, contemplated that it would apply to such agreements. See In re Upshaw, 247 Ala. 221, 23 So.2d 861 (1945).

In determining whether § 6-5-60 provides a cause of action for damage resulting from an agreement to control the price of goods shipped through interstate commerce, we must follow the cardinal rule of statutory construction and ascertain and give effect to the intent of the Legislature in enacting the statute. If possible, legislative intent should be gathered from the language of the statute itself. John Deere Co. v. Gamble, 523 So.2d 95 (Ala.1988).

However, when circumstances surrounding the enactment of a statute cast doubt on the otherwise clear language of the statute, we must look to other factors in determining legislative intent. In Siegelman v. Chase Manhattan Bank (USA), N.A., 575 So.2d 1041 (Ala.1991), this Court was faced with the question whether the financial-institution excise tax, levied pursuant to Ala.Code 1975, § 40-16-1 et seq., applied to the credit-card business conducted by national banks located outside Alabama with Alabama residents. When that excise-tax statute was enacted in 1935, such taxation by the states was prohibited by federal statutes and caselaw. Federal law changed in 1976 so as to allow the taxation of national banks; the state argued that that change should render out-of-state national banks subject to the 1935 excise-tax statute. This Court rejected that argument, stating, at 575 So.2d at 1048-51:

"In the case presently before us, the trial court in its opinion stated that Ex parte Dixie Tool & Die Co., [537 So.2d 923 (Ala.1988)], controlled the resolution of the case:

"`In Dixie Tool & Die, as in the instant case, the issue was whether in originally enacting the statute, the legislature intended to tax transactions not previously taxed under that statute.

"`The Court holds that at the times § 40-16-1 was enacted, the State was prohibited by federal statute from taxing out-of-state national banks. The National Bank Act expressly limited the state's authority to tax only those "national banking associations located within its limits." Because the federal statute was in force at the time § 40-16-1 was enacted, full knowledge and information as to the prior and existing law on the subject of this section [are] imputed to the legislature. A legislature is presumed to know the limit of its taxing power. Further, the statute will be interpreted on the assumption that

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