Federal Trade Commission v. Superior Court Trial Lawyers Association
107 L. Ed. 2d 851, 110 S. Ct. 768 (1990)
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Rule of Law:
A horizontal agreement among competitors to engage in a boycott to increase the price of their services is a per se violation of antitrust laws. Such a boycott is not protected by the First Amendment, even if it contains an expressive component or is intended to influence legislation for the public good.
Facts:
- A group of about 100 private lawyers, the Superior Court Trial Lawyers Association (SCTLA), regularly represented indigent criminal defendants in the District of Columbia.
- These lawyers were compensated under the Criminal Justice Act (CJA) at rates of $30/hour for court time and $20/hour for out-of-court time, which had not been increased since 1970.
- Beginning in 1982, SCTLA unsuccessfully lobbied the D.C. government for a fee increase.
- In August 1983, SCTLA members met and agreed to stop accepting new CJA cases after September 6, 1983, if their fees were not substantially increased.
- On September 6, about 90% of the CJA regulars began refusing new assignments, creating a crisis in the D.C. criminal justice system.
- The boycott was well-publicized through events arranged by SCTLA to attract media attention.
- Within two weeks, the D.C. government offered to support legislation for a temporary increase to $35/hour and future permanent increases.
- On September 19, 1983, the SCTLA members voted to accept the offer and ended the boycott, after which the D.C. Council passed the fee-increase legislation.
Procedural Posture:
- The Federal Trade Commission (FTC) filed an administrative complaint against the Superior Court Trial Lawyers Association (SCTLA) and four of its officers.
- An Administrative Law Judge (ALJ) found that SCTLA's boycott constituted a violation of antitrust laws but recommended dismissing the complaint because it resulted in no net harm.
- The full FTC reversed the ALJ's conclusion, ruling that the boycott was a per se illegal restraint of trade and issued a cease-and-desist order against SCTLA.
- SCTLA, as petitioner, sought review in the U.S. Court of Appeals for the District of Columbia Circuit.
- The Court of Appeals vacated the FTC order, holding that the boycott contained an expressive component protected by the First Amendment, which precluded a per se analysis and required the FTC to prove that SCTLA had significant market power.
- The FTC, as petitioner, filed a petition for a writ of certiorari to the U.S. Supreme Court, which was granted.
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Issue:
Does a concerted refusal by a group of attorneys to accept new cases until the government increases their compensation constitute a per se illegal boycott under antitrust laws that is not protected by the First Amendment?
Opinions:
Majority - Justice Stevens
Yes, a concerted refusal by attorneys to accept new cases until their fees are raised is a per se illegal boycott under antitrust laws and is not protected by the First Amendment. The boycott was a 'classic restraint of trade' and a 'naked restraint' on price and output. Social justifications, such as improving legal representation for the indigent, do not make an otherwise unlawful price-fixing agreement permissible. The boycott is not protected under the Noerr-Pennington doctrine because the restraint of trade was the means to influence legislation, not the consequence of it. Furthermore, it is not protected by the precedent in NAACP v. Claiborne Hardware because the lawyers' immediate objective was their own economic advantage, unlike the Claiborne boycotters who sought to vindicate constitutional rights without personal financial gain. The expressive component of the boycott does not trigger a more lenient rule-of-reason analysis, as nearly all boycotts have an expressive element; to hold otherwise would create a 'gaping hole' in antitrust law. The per se rule applies because such horizontal arrangements inherently pose a threat to the free market, regardless of whether the participants possess significant market power.
Concurring-in-part-and-dissenting-in-part - Justice Brennan
No, while the boycott is subject to antitrust scrutiny, it should not be condemned under a per se rule without a finding that the lawyers possessed significant market power. The per se rule is a conclusive presumption of illegality, which is inappropriate when expressive conduct protected by the First Amendment is involved. The lawyers' boycott was a form of political communication intended to persuade the government, and its success may have been due to its political persuasiveness rather than coercive economic power. Unlike purely commercial boycotts, this expressive boycott has a long historical tradition as a means of political communication, especially for groups with limited resources. Therefore, the Court of Appeals was correct to require the FTC to prove market power under a rule-of-reason analysis before condemning the boycott.
Concurring-in-part-and-dissenting-in-part - Justice Blackmun
No, the per se rule is inapplicable, and a remand to determine market power is unnecessary because the lawyers clearly lacked any real economic power. The attorneys, as officers of the court, could have been compelled by the government to represent indigent defendants pro bono. Because the government possessed the ultimate power to break the boycott by ordering them to work, the lawyers' action could not have succeeded through economic coercion. The boycott's success must therefore be attributed to political persuasion. Since the lawyers had no market power to begin with, a remand for fact-finding on that issue is unwarranted.
Analysis:
This decision solidifies the distinction between commercial boycotts motivated by economic self-interest and political boycotts aimed at vindicating constitutional rights. It significantly limits the First Amendment defense available to competitors who engage in price-fixing or boycotts, even when their actions are directed at the government and have a clear expressive purpose. By rejecting the need to prove market power in such cases, the Court reinforced the potency of the per se rule against horizontal restraints, preventing what it saw as a potential loophole that could weaken antitrust enforcement against arrangements deemed inherently anticompetitive. The case serves as a strong precedent that economic motivations can strip an otherwise expressive group action of its First Amendment protection from antitrust laws.
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