Federal Prescription Service v. AM. PHARM. ASS'N

• Citation: 471 F. Supp. 126
• Decision Date: 27 March 1979
• Docket Number: Civ. A. No. 77-1163.
• Parties: FEDERAL PRESCRIPTION SERVICE, INC., et al., Plaintiffs, v. AMERICAN PHARMACEUTICAL ASSOCIATION et al., Defendants.
• Court: U.S. District Court — District of Columbia

471 F. Supp. 126

FEDERAL PRESCRIPTION SERVICE, INC., et al., Plaintiffs, v. AMERICAN PHARMACEUTICAL ASSOCIATION et al., Defendants.

Civ. A. No. 77-1163.

United States District Court District of Columbia.

March 27, 1979.

COPYRIGHT MATERIAL OMITTED

George S. Leonard, Alexandria, Va., for plaintiffs.

Arthur B. Hanson, Washington, D. C., for American Pharmaceutical Ass'n and William S. Apple.

Richard M. Rindler, Washington, D. C., for National Ass'n of Retail Druggists.

Jerry D. Voight, Washington, D. C., James L. Siekmann, Chicago, Ill., for National Assn. of Boards of Pharmacy.

MEMORANDUM OPINION

GESELL, District Judge.

The National Association of Retail Druggists ("NARD"), one of the defendants in this civil jury antitrust damage action, initially moved for summary judgment more than nine months ago. At that time, the Court, pursuant to Fed.R.Civ.P. 56(f), delayed its consideration of the motion so that plaintiffs could have full opportunity to perfect their claims by discovery prior to response. Plaintiffs then searched NARD's documents, deposed witnesses, and elicited answers to interrogatories. Now on the full record as explained by affidavits and after further briefs have been filed and oral argument held, the matter is ripe for decision.

The complaint filed July 6, 1977, alleges a broad conspiracy among various groups and organizations, some defendants in this action and some not, to oppose, prevent and restrain mail service sales of prescription drugs. It is claimed that the conspiracy has "gone beyond advocacy" of the defendants' position and has involved active efforts designed to eliminate mail order competition. Paragraph 14 of the complaint sets out the alleged means of the claimed conspiracy in ten subheadings from (a) through (j).

NARD's motion for summary judgment denies any illegal agreement and urges that its admitted opposition to the sale of prescription drugs by mail never went beyond the area immunized from antitrust proscription by Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961) (Noerr). See Otter Tail Power Co. v. United States, 410 U.S. 366, 379-80, 93 S.Ct. 1022, 35 L.Ed.2d 359 (1973); California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 92 S.Ct. 609, 30 L.Ed.2d 642 (1972); United Mine Workers v. Pennington, 381 U.S. 657, 669-70, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965); Subscription Television, Inc. v. Southern California Theatre Owners Association, 576 F.2d 230 (9th Cir. 1978); Franchise Realty Interstate Corp. v. San Francisco Local Joint Executive Board, 542 F.2d 1076 (9th Cir. 1976), cert. denied, 430 U.S. 940, 97 S.Ct. 1571, 51 L.Ed.2d 787 (1977). The Noerr doctrine, as developed through the later cases, protects genuine individual or concerted action before legislative bodies, administrative agencies and courts. The doctrine rests upon aspects of the First Amendment to the Constitution and provides an absolute immunity from antitrust liability so long as the activity is "genuine." The immunity applies even if the defendant's ultimate intent is to restrain competition, see United Mine Workers v. Pennington, supra, 381 U.S. at 670, 85 S.Ct. 1585; Noerr, supra, 365 U.S. at 138-40, 81 S.Ct. 523, and even where an incidental though important effect of the defendant's conduct is to inflict "some direct injury" upon the plaintiff, such as destroying its goodwill among the public and its customers, see Noerr, supra, 365 U.S. at 142-44, 81 S.Ct. 523. Noerr-like activity, however, loses its protection when it is not "genuine" or constitutes a "sham." Such is the case when the purpose and possibly the effect of the defendant's conduct is to bar its competitor "from meaningful access" to the relevant governmental body, see California Motor Transport Co. v. Trucking Unlimited, supra, 404 U.S. at 512-15, 92 S.Ct. 609, or is to abuse the relevant government body's processes, see id., i. e., use those processes to restrain competition without any genuine intent to present one's position to the pertinent government body.

Since NARD's motion is for summary judgment, notice should be taken of the rules that properly govern the award of summary judgment in this variety of antitrust litigation. The fact that antitrust violations are alleged does not vitiate the force of any of the normal summary judgment rules, as the Supreme Court recognized in First National Bank v. Cities Service Co., 391 U.S. 253, 288-90, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968). See also Merit Motors, Inc. v. Chrysler Corp., 187 U.S.App.D.C. 11, 13-15, 569 F.2d 666, 668-69 (1977). Moreover, where, as here, the motion rests in substantial part on the Noerr doctrine, it is particularly important that the Court carefully scrutinize the adequacy of plaintiffs' claims. The pendency of a meritless suit touching upon Noerr-protected conduct can itself chill the exercise of First Amendment rights. See Franchise Realty Interstate Corp. v. San Francisco Local Joint Executive Board, supra, 542 F.2d at 1082-84; Wilmorite, Inc. v. Eagan Real Estate, Inc., 454 F.Supp. 1124, 1137 (N.D.N.Y.1977), aff'd mem., 578 F.2d 1372 (2d Cir. 1978), cert. denied, 439 U.S. 983, 99 S.Ct. 573, 58 L.Ed.2d 655 (1978). Here, a substantial Noerr showing has been made. Thus, plaintiffs must meet the requirements of Fed.R. Civ.P. 56(e), by demonstrating specific and concrete facts that support their allegations. The Court has already permitted plaintiffs substantial and liberal discovery against NARD; the case has consequently reached such a stage that, if plaintiffs cannot meet their burden under Fed.R.Civ.P. 56(e), forcing NARD to proceed to trial would jeopardize significant constitutional rights.

At the outset, plaintiffs acknowledge, as they must, that much of NARD's activities has involved lobbying efforts before Congress and state legislatures concerning pharmacy laws, representations to and appearances before administrative agencies and contact with court proceedings. Not only are all these activities classically within the area protected by Noerr, but plaintiffs have pointed to no fact which would even suggest that the activities fell within the "sham" exception to the Noerr doctrine. No evidence is offered showing any tactics by NARD involving opposition to or delaying of state licensing or other administrative action and NARD, by affidavit, denies any such conduct. Similarly, plaintiffs have not demonstrated a single instance where NARD has participated in the instigation of baseless and harassing litigation against the interests of mail order pharmacy. Again, NARD by affidavit denies any such participation.

Furthermore, the plaintiffs have not shown, and NARD by affidavit denies, that NARD adopted or enforced a code of ethics relating to the sale of prescription drugs by mail, caused any pharmacy to dispense forged prescriptions by mail, or attempted to make membership in NARD or any other pharmacy organization a precondition of pharmacy employment or of higher state pharmacy ratings. Plaintiffs allege that NARD...