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Antitrust Keyed to Areeda, 8th Ed.
Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Co.
Citation:
472 U.S. 284 (1985)Facts
Northwest Wholesale Stationers was a purchasing cooperative of approximately 100 office supply retailers that served as their primary wholesaler. Members received year-end rebates on purchases, effectively allowing them to buy at lower prices than non-members. Pacific Stationery, which sold office supplies at both retail and wholesale levels, had been a member of the cooperative since 1958. In 1974, Northwest amended its bylaws to prohibit members from engaging in both retail and wholesale operations, but included a grandfather clause preserving Pacific’s membership. In 1977, Pacific underwent a change in controlling stock ownership but did not officially notify Northwest’s directors, apparently violating a bylaw. In 1978, Northwest’s membership voted to expel Pacific without providing notice, a hearing, or any opportunity to challenge the decision. The exact reason for the expulsion was disputed – Northwest claimed it was due to Pacific’s failure to report the ownership change, while Pacific argued it resulted from its decision to maintain wholesale operations. Pacific received approximately $10,000 in rebates in its last year of membership.
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