Gulf Oil Corp. v. Copp Paving Co.

delivered the opinion of the Court.

This case concerns the jurisdictional requirements of § 2 (a) of the Clayton Act, as amended by the Robinson-Patman Act, 49 Stat. 1526,1 15 U. S. C. § 13 (a), and of §§ 3 and 7 of the Clayton Act, 38 Stat. 731, as amended, 15 U. S. C. §§ 14 and 18. It presents the questions whether a firm engaged in entirely intrastate sales of asphaltic concrete, a product that can be marketed only locally, is a corporation “in commerce” within the meaning of each of these sections, and whether such sales are “in commerce” and “in the course of such commerce” within the meaning of §§ 2 (a) and 3 respectively. The Court of Appeals for the Ninth Circuit held these jurisdictional requirements satisfied, without more,, by the fact that sales of asphaltic concrete are made for use in construction of interstate highways. 487 F. 2d 202 (1973). We reverse.

I

Asphaltic concrete is a product used to surface roads and highways. It is manufactured at “hot plants” by combining, at temperatures of approximately 375° F, about 5% liquid petroleum asphalt with about 95% aggregates and fillers. The substance is delivered by truck to construction sites, where it is placed at temperatures of about 275° F. Because it must be hot when placed and because of its great weight and relatively low value, asphaltic concrete can be sold and delivered profitably only within a radius of 35 miles or so from the hot plant.

Petitioners Union Oil Co., Gulf Oil Corp., and Edging-ton Oil Co., defendants below, produce liquid petroleum asphalt from crude oil at their California refineries. The companies sell liquid asphalt to their subsidiaries and other firms throughout the Western States. The market in liquid asphalt is interstate, and each oil company concedes that it engages in interstate commerce.

Petitioner Union Oil sells some of its liquid asphalt to its wholly owned subsidiary, Sully-Miller Contracting Co., which uses it to manufacture asphaltic concrete at 11 hot plants in Los Angeles and Orange Counties, Cal. Gulf Oil sells all of its liquid asphalt to its wholly owned subsidiary, petitioner Industrial Asphalt, Inc. Industrial distributes the liquid asphalt to third parties and also uses it to produce asphaltic concrete at 55 hot plants in California, Arizona, and Nevada. Edgington Oil sells its liquid asphalt to, inter alia, Sully-Miller, Industrial, and respondents.

Respondents, Copp Paving Co., Inc., Copp Equipment Co., Inc., and Ernest A. Copp,la operate a hot plant in Artesia, Cal., where they produce asphaltic concrete both for Copp's own use as a paving contractor and for sale to other contractors. Copp’s operations and asphaltic concrete sales are limited to the southern half of Los Angeles County, where it competes with Sully-Miller and Industrial in the asphaltic concrete market. All three firms sell a more than de minimis share of their asphaltic concrete for use in the construction of local segments of the interstate highway system. Neither Copp, Industrial, nor Sully-Miller makes any interstate sales of the product.2

Copp filed this complaint in the District Court for the Central District of California against the oil companies, Sully-Miller, and Industrial, seeking injunctive relief and treble damages.3 The complaint, as amended, alleged that the various defendants had committed a catalog of antitrust violations with respect to both the asphalt oil and asphaltic concrete markets. Claiming harm to itself as a consumer of liquid asphalt, Copp alleged: that the defendants had fixed prices and allocated the asphalt oil market geographically, in violation of § 1 of the Sherman Act, 26 Stat. 209, as amended, 15 U. S. C. § 1; that they had sold liquid asphalt at discriminatory prices to Copp and other purchasers, in violation of § 2 (a) of the Robinson-Patman Act; and that Gulf Oil had violated § 7 of the Clayton Act by acquiring Industrial. Also claiming harm to itself as a competitor in the asphaltic concrete market, Copp further alleged: that the defendants had fixed prices, divided the market geographically, and employed various methods of monopolizing and attempting to gain a monopoly in the Los Angeles area market, in violation of §§ 1 and 2 of the Sherman Act; that, in violation of § 3 of the Clayton Act, Industrial and Sully-Miller had conditioned sales of asphaltic concrete in areas where Copp did not compete on customers’ agreeing to buy only from the defendants in areas where Copp did compete, and had “tied” sales of asphaltic concrete to sales of other commodities and to favorable extensions of credit; that, in violation of § 7 of the Clayton Act, Gulf Oil had acquired Industrial and Union Oil had acquired Sully-Miller, these acquisitions apparently having the effect of lessening competition in the Los Angeles asphaltic concrete market; and, finally, that Industrial and Sully-Miller had discriminated in the prices at which they sold asphaltic concrete, charging higher prices in areas where Copp did not compete, this in violation of § 2 (a).

Because of the liquid asphalt claims, the case was one of the Western Liquid Asphalt cases transferred, pursuant to 28 U. S. C. § 1407, to the District Court for the Northern District of California for coordinated pretrial proceedings.4 The defendants thereafter moved for summary judgment in favor of Sully-Miller, against which Copp had alleged only violations arising from conduct in the asphaltic concrete market. The motion also sought to limit the issues as to the other defendants to those involving liquid asphalt.

The District Court ordered full discovery as to jurisdiction over Copp’s asphaltic concrete claims. At the conclusion of discovery, Copp’s jurisdictional showing rested solely on the fact that some of the streets and roads in the Los Angeles area are segments of the federal interstate highway system, and on a stipulation that a greater than de minimis amount of asphaltic concrete is used in their construction and repair. The District Court thereupon entered an order dismissing all claims against Sully-Miller and those claims against the other defendants involving the marketing of asphaltic concrete.

In its opinion accompanying this order the court explicitly discussed only the jurisdictional requirements of the Sherman Act.5 On the facts presented to it, the court found that asphaltic concrete is made wholly from components produced and purchased intrastate and that the product's market is exclusively and necessarily local. Because of these factors, the court concluded that the alleged restraints of trade in asphaltic concrete could not be deemed within the flow of interstate commerce, despite use of the product in interstate highways. • Moreover, Copp had failed to show, either by deduction from the evidence or by the evidence itself, that the alleged restraints as to asphaltic concrete would affect any interstate market. It had neither shown a necessary or probable adverse consequence to the construction of interstate highways and hence to the flow of commerce, nor had it suggested or supported a theory by which restraints on local trade in asphaltic concrete affect the interstate liquid asphalt market. The court held that it lacked jurisdiction of Copp’s asphaltic concrete claims under the Sherman Act and therefore that Copp also had failed to support jurisdiction under the Robinson-Patman and Clayton Acts.

On Copp’s interlocutory appeal, 28 U. S. C. § 1292 (b), the Ninth Circuit reversed, holding as to the Sherman Act claims “that the production of asphalt for use in interstate highways rendered the producers ‘instrumental-ities’ of interstate commerce and placed them ‘in’ that commerce as a matter of law.” 487 F. 2d, at 204. Having so concluded, the court held that jurisdiction properly attached to Copp’s Clayton and Robinson-Patman Act claims as well, since those Acts were intended to supplement the purpose and effect of the Sherman Act. Id., at 205-206.6

We granted certiorari, despite the interlocutory character of the Ninth Circuit’s judgment, because of the importance of the issues both to this litigation and to proper interpretation of the jurisdictional reach of the antitrust laws, and because of ostensible conflicts with decisions of other circuits.7 We limited the grant, however, to the questions arising under the Clayton and Robinson-Patman Acts.8 415 U. S. 988 (1974).

II

The text of each of the statutory provisions involved here is set forth in the margin.9 In brief, § 2 (a) of the Robinson-Patman Act forbids “any person engaged in commerce, in the course of such commerce” to discriminate in price “where either or any of the purchases involved in such discrimination are in commerce” and where the discrimination has substantial anticompetitive effects “in any line of commerce.” Section 3 of the Clayton Act makes it unlawful “for any person engaged in commerce, in the course of such commerce” to make tie-in sales or enter exclusive-dealing arrangements, where the effect “may be to substantially lessen competition or tend to create a monopoly in any line of commerce.” Section 7 of the Clayton Act forbids certain acquisitions by a corporation “engaged in commerce” of the assets or stock “of another corporation engaged also in commerce,” where the effect may be substantially to lessen competition “in any line of commerce in any section of the country.”

The explicit reach of these provisions extends only to persons and activities that are themselves “in commerce,” the term “commerce” being defined in § 1 of the Clayton Act, insofar as relevant here, as “trade or commerce among the several States and with foreign nations . .. . .” 15 U. S. C. § 12. This “in commerce” language differs distinctly from that of § 1 of the Sherman Act, which includes within its scope all prohibited conduct “in restraint of trade or commerce among the several States, or with foreign nations . . . .” The jurisdictional reach of § 1 thus is keyed directly to effects on interstate markets and the interstate flow of goods. Moreover, our cases have recognized that in enacting § 1 Congress “wanted to go to the utmost extent of its Constitutional power in restraining trust and monopoly agreements . . . .” United States v. South-Eastern Underwriters Assn., 322 U. S. 533, 558 (1944). Consistently with this purpose and with the plain thrust of the statutory language, the Court has held that, however local its immediate object, a “contract, combination ... or conspiracy” nonetheless may constitute a restraint within the meaning of § 1 if it substantially and adversely affects interstate commerce. E. g., Mandeville Island Farms v. American Crystal Sugar Co., 334 U. S. 219, 234 (1948). “If it is interstate commerce that feels the pinch, it does not matter how local the operation which applies the squeeze.” United States v. Women’s Sportswear Mfrs. Assn., Assn.336 U. S. 460, 464 (1949).

In contrast to § 1, the distinct “in commerce” language of the Clayton and Robinson-Patman Act provisions with which we are concerned here appears to denote only persons or activities within the flow of interstate commerce — the practical, economic continuity in the generar tion of goods and services for interstate markets and their transport and distribution to the consumer. If this is so, the jurisdictional requirements of these provisions cannot be satisfied merely by showing that allegedly anticompetitive acquisitions and activities affect commerce. Unless it appears (i) that Sully-Miller engages in interstate commercial activities (§7), (ii) that Industrial’s alleged exclusive-dealing arrangements and discriminatory sales occur in the course of its interstate activities (§§ 2 (a) and 3), and (iii) that at least one of Industrial’s allegedly discriminatory sales was made in interstate commerce (§2 (a)), Copp’s claims must fail.

Copp argues, and the Court of Appeals for the Ninth Circuit agreed, that it had made exactly this sort of “in commerce” showing. Copp does not contend that Industrial and Sully-Miller in fact make interstate asphaltic concrete sales or are otherwise directly involved in national markets. Cf. United States v. Philadelphia National Bank, 374 U. S. 321, 336 n. 12 (1963). Nor does it contend that the local market in asphaltic concrete is an integral part of the interstate market in other component commodities or products. Instead, Copp’s “in commerce” argument turns entirely on the use of asphaltic concrete in the construction of interstate highways.

In support of this argument, Copp relies primarily on cases decided under the Fair Labor Standards Act.10 In the first of these, Overstreet v. North Shore Corp., 318 U. S. 125 (1943), the Court held that because interstate roads and railroads are indispensable instrumentalities of interstate commerce, employees engaged in the construction or repair of such roads are employees “in commerce” to whom, by its terms, the Fair Labor Standards Act extends. Subsequently in Alstate Construction Co. v. Durkin, 345 U. S. 13 (1953), the Court held that since interstate highways are instrumentalities of commerce, employees engaged in the manufacture of materials used in their construction are properly deemed to be engaged “in the production of goods for commerce,” within the meaning of that phrase in the Fair Labor Standards Act. Copp reasons that since the connection between manufacture of road materials and interstate commerce was enough for application of the Fair Labor Standards Act, it also should be sufficient to warrant invocation of the Clayton and Robinson-Patman Act provisions against sellers and sales of such materials.

But we are concerned in this case with significantly different statutes. As in Overstreet and Alstate, there is no question of Congress’ power under the Commerce Clause to include otherwise ostensibly local activities within the reach of federal economic regulation, when such activities sufficiently implicate interstate commerce.11 The question, rather, is how far Congress intended to extend its mandate under the Clayton and Robinson-Patman Acts.12 The answer depends on the statutory language, read in light of its purposes and legislative history. See FTC v. Bunte Bros., 312 U. S. 349 (1941).

Congress has deemed interstate highways critical to the national economy and has authorized extensive federal participation in their financing and regulation. Nothing, however, in the Federal-Aid Highway Act13 or other legislation evinces an intention to apply the full range of antitrust laws to persons who, as part of their local business, supply materials used in construction of local segments of interstate roads. Nor does the fact that interstate highways are instrumentalities of commerce somehow render the suppliers of materials instrumentalities of commerce as well, in the sense used in Overstreet. No different conclusion can be drawn from Alstate. The statute involved there explicitly reached persons employed “in the production of goods for commerce.” Congress could and, according to the Court in Alstate, did find that the federal concerns embodied in the Fair Labor Standards Act required its application to employees producing materials for use in interstate highways. But neither this nor the Court’s holding in Alstate places such employees, or the sellers and sales of such materials, “in commerce” as a matter of law for purposes of the Clayton and Robinson-Patman Acts.

Copp’s “in commerce” argument rests essentially on a purely formal “nexus” to commerce: the highways are instrumentalities of interstate commerce; therefore any conduct of petitioners with respect to an ingredient of a highway is per se “in commerce.” Copp thus would have us expand the concept of the flow of commerce by incorporating categories of activities that are perceptibly connected to its instrumentalities. But whatever merit this categorical inclusion-and-exclusion approach may have when dealing with the language and purposes of other regulatory enactments, it does not carry over to the context of the Robinson-Patman and Clayton Acts. The chain of connection has no logical endpoint. The universe of arguably included activities would be broad and its limits nebulous in the extreme. See Alstate Construction Co. v. Durkin, supra, at 17-18 (Douglas, J., dissenting). More importantly, to the extent that those limits could be defined at all, the definition would in no way be anchored in the economic realities of interstate markets, the intensely practical concerns that underlie the purposes of the antitrust laws. See United States v. Yellow Cab Co., 332 U. S. 218, 231 (1947).

In short, assuming, arguendo, that the facially narrow language of the Clayton and Robinson-Patman Acts was intended to denote something more than the relatively restrictive flow-of-commerce concept, we think the nexus approach would be an irrational way to proceed. The justification for an expansive interpretation of the “in commerce” language, if such an interpretation is viable at all, must rest on a congressional intent that the Acts reach all practices, even those of local character, harmful to the national marketplace. This justification, however, would require courts to look to practical consequences, not to apparent and perhaps nominal connections between commerce and activities that may have no significant economic effect on interstate markets. We hold, therefore, that Sully-Miller’s and Industrial’s sales to interstate highway contractors are not sales “in commerce” as a matter of law within the jurisdictional ambit of Robinson-Patman Act § 2 (a) and Clayton Act §§ 3 and 7.

Ill

Our rejection of the “nexus to commerce” theory requires that the Ninth Circuit’s judgment be reversed. Copp also advances, somewhat obliquely, a second theory to support that judgment. It contends that, despite the facially narrow “in commerce” language of the Robinson-Patman and Clayton Act provisions, Congress intended those provisions to manifest the full degree of its commerce power. Therefore, it is argued, the language should not be limited to the flow-of-commerce concept defined by this Court and other courts, but rather should be held to extend, as does § 1 of the Sherman Act, to all persons and activities that have a substantial effect on interstate commerce. We find this theory equally unavailing on the record here.

A

As to § 2 (a) of the Robinson-Patman Act at least, the extraordinarily complex legislative history fails to support Copp’s argument. When the Patman bill was passed by the House, it contained, in addition to the present narrow language of § 2 (a), the following provision:

“[I]t shall also be unlawful for any person, whether in commerce or not, either directly or indirectly, to discriminate in price between different purchasers ... where . . . such discrimination may substantially lessen competition ....” 14

The Conference Committee, however, deleted this “effects on commerce” provision, leaving only the “in commerce” language of § 2 (a).15 Whether Congress took this action because it wanted to reach only price discrimination in interstate markets or because of its then understanding of the reach of the commerce power,16 its action strongly militates against a judgment that Congress intended a result that it expressly declined to enact. Moreover, even if the legislative history were ambiguous, the courts in nearly four decades of litigation have interpreted the statute in a manner directly contrary to an “effects on commerce” approach. With almost perfect consistency, the Courts of Appeals have read the language requiring that “either or any of the purchases involved in such discrimination [be] in commerce” to mean that § 2 (a) applies only where “ 'at least one of the two transactions which, when compared, generate a discrimination ... cross [es] a state line.’ ” 17 In the face of this longstanding interpretation and the continued congressional silence, the legislative history does not warrant our extending § 2 (a) beyond its clear language to reach a multitude of local activities that hitherto have been left to state and local regulation. See FTC v. Bunte Bros., 312 U. S. 349 (1941).

B

With respect to §§ 3 and 7 of the Clayton Act, the situation is not so clear. Both provisions were intended to complement the Sherman Act and to facilitate achievement of its purposes by reaching, in their incipiency, acts and practices that promise, in their full growth, to impair competition in interstate commerce. E. g., United States v. E. I. du Pont de Nemours & Co., 353 U. S. 586, 589 (1957); Standard Fashion Co. v. Magrane-Houston Co., 258 U. S. 346 (1922). The United States argues in its amicus brief that, given this purpose, the “in commerce” language of §§ 3 and 7 should be seen as no more than a historical anomaly. When these sections were originally enacted, it was thought that Congress’ Commerce Clause power reached only those subjects within the flow of commerce, then defined rather narrowly by the Court. Thus, it is argued, the “in commerce” language was thought to be coextensive with the reach of the Commerce Clause and to bring within the ambit of the Act all activities over which Congress could exercise its constitutional authority. Since passage of the Act, this Court’s decisions have read Congress’ power under the Commerce Clause more expansively, extending it beyond the flow of commerce to all activities having a substantial effect on interstate commerce. See Mandeville Island Farms v. American Crystal Sugar Co., 334 U. S., at 229-233. The United States concludes that the scope of the Clayton Act, like that of the Sherman Act, should be held to have expanded correspondingly, both because of Congress’ clear intention to reach as far as it could and because Congress’ purpose to foster competition in interstate commerce could not otherwise wholly be achieved.

This argument from the history and practical purposes of the Clayton Act is neither without force nor without at least a measure of support.18 But whether it would justify radical expansion of the Clayton Act’s scope beyond that which the statutory language defines — expansion, moreover, by judicial decision rather than amendatory legislation — is doubtful. In any event, this case does not present an occasion to decide the question. Even if the Clayton Act were held to extend to acquisitions and sales having substantial effects on commerce, a court cannot presume that such effects exist. The plaintiff must allege and prove that apparently local acts in fact have adverse consequences on interstate markets and the interstate flow of goods in order to invoke federal antitrust prohibitions. See United States v. Yellow Cab Co., 332 U. S., at 230-234.

Copp was allowed full discovery as to all interstate commerce issues. It relied primarily on the nexus theory rejected above, and presented no evidence of effect on interstate commerce. Instead it argued merely that such effects could be presumed from the use of asphaltic concrete in interstate highways. The District Court eon-eluded, on the basis of the record before it, that petitioners’ alleged antitrust violations had no “substantial impact on interstate commerce.” 19 There may be circumstances in which activities, like those of Sully-Miller and Industrial, would have such effects on commerce. On the record in this case, however, the conclusion of the District Court that no such circumstances existed here cannot be considered erroneous. . This being so, the “effects on commerce” theory, even if legally correct, must fail for want of proof.

The judgment of the Court of Appeals is

Reversed.