Document: 57 L.Ed.2d 932 98 S.Ct. 2923 438 U.S. 531 ST. PAUL FIRE & MARINE INSURANCE COMPANY et al., Petitioners,v.David M. BARRY al. No. 77-240. Argued March 27, 1978. Decided June 29, Syllabus Respondents, licensed physicians practicing in Rhode Island and their patients, brought a class action against petitioners, four insurance companies writing medical malpractice the State, alleging conspiracy violation of Sherman Act which three refused to deal on any terms with policyholders fourth as means compelling them submit new ground rules set by fourth, whereby coverage an "occurrence" basis would not be renewed issue only "claims made" basis. Petitioners' motion dismiss antitrust claim that it was barred McCarran-Ferguson granted District Court. The Court Appeals reversed, holding complaint stated within "boycott" exception § 3(b) Act, provides shall remain applicable "to agreement boycott, coerce, or intimidate, act coercion, intimidation." Held : 1. is mooted fact after filed formed Joint Underwriters Association provide require all personal-injury liability insurers State pool expenses losses providing such insurance. Since now permits outside Association, cannot said "subsequent events ma[ke] absolutely clear allegedly wrongful behavior could reasonably expected recur," United States v. Phosphate Export Assn., 393 199, 203, 89 361, 364, 21 344. Pp. 537-538. 2. applies certain types disputes between limited concerted activity directed competitor agents or, more generally, competitors members boycotting group. 538-551. (a) language broad unqualified, covering "any" amounting "boycott, Had Congress intended limit its scope boycotts insurer agents, preclude protection for policyholders, presumably have made this explicit. customary understanding at time enactment, elaborated th decisions Court, does support definition term embraces those combinations target boycotters ultimate objects refusal deal. 541-546. (b) legislative history, while unambiguous, no substantial evidence sought attach special meaning exclude from restrictive agreements practices falling realm state-supervised cooperative action. preserve review forms regulation private groups, including but eradication "blacklisting" other exclusionary devices independent agents. 546-550. (c) Nor structure proposed limitation reach 3(b). Section 2(b), limits general applicability federal laws business extent regulated law." clause carve out overall framework plenary state area subject scrutiny. 550-551. 3. type conduct alleged taken place here, constitutes 552-555. Such accords common boycott. binding petitioners erected barrier respondents alternative source desired coverage, effectively foreclosing possibility competition anywhere relevant market. 552-553. are charged appears occurred regulatory arrangement established Island. This case where has decided policy requires risks allocated particular fashion among authorized decline insure risks. Here group resolve problem escalating damages claims verdicts coercing one accept severe coverage. 553-555. 555 F.2d 3, affirmed. Sidney S. Rosdeitcher, New York City, petitioners. Leonard Decof, Providence, R. I., respondents. Daniel Friedman, Washington, D. C., States, amicus curiae, leave Mr. Justice POWELL delivered opinion 1 action, part under 26 Stat. 209, amended, 15 U.S.C. seq. (1976 ed.), State. sell submission fourth. Petitioner successfully moved (Act), 59 33, §§ 1011-1015 ed.).1 respondents' intimidation," 1013(b) ed.). 3 (CA1 1977). We required decide whether insurers. 2 * As comes us reversal successful dismiss, we treat factual allegations amended true.2 During period question, St. Paul Fire Marine Insurance Co. (St. Paul), Aetna Casualty Surety Co., Travelers Indemnity (and two affiliated companies), Hartford company) were sellers In April 1975, Paul, largest insurers, announced renew basis, write basis.3 Following Paul's announcement, furtherance conspiracy, applications physicians, hospitals, personnel whom then insured. object restrict "purchase only, wit defendant, [such] purchase must dictated Paul." App. 25. It scheme effectuated collective deal, unfair rate discrimination, compete, horizontal price fixing, engaged "a purposeful course intimidation, boycott respect sale Island." Id., 24-27.4 On November 19, petitioners' dismiss. declined give reading suggested "broad wording," declaring instead "the purpose intimidation solely protect being 'black-listed' powerful companies, affect insurer-insured relationship." 44. 4 May 16, 1977, divided panel First Circuit reversed pertinent part. majority reasoned broadly framed, there reason "normal scope." F.2d, 8. "In law, 'concerted deal' disfavored purchaser seller." 7. court thought undermine industry. "Regulation protected; groups consumers resting authority immunity." 9. 5 August 12, writ certiorari To conflicting interpretations adopted several Courts Appeals,5 October 31, 1977. 434 919, 391, 54 275. affirm. II 6 At threshold, confront question mootness. Although raised parties, implicates our jurisdiction. See, e. g., Memphis Light, Gas Water Div. Craft, 436 1, 7-8, 1554, 1559, 56 30 (1978); Sosna Iowa, 419 393, 398, 95 553, 556, 42 532 (1975). 7 requested parties brief Island's formation, initial filed, Underwriting (JUA) providers health-care services participation insurance.6 noted State's prevented "gather[ing] fruits conspiracy," "convinced that, purposes [its] jurisdiction, state's did extinguish plaintiffs' every relief." 5-6, n. agree. 8 later developments may "reduce[d] practical importance case" recur." 344 (1968); see W. T. Grant 345 629, 632-633, 73 894, 897, 97 L.Ed. 1303 (1953). JUA, 6, supra, assume will re-enter market some fashion. conditions gave rise controversy been shown abated. And resurgence further evidenced acknowledgment "that violations recur future." Record 83.7 III 9 passed reaction Court's decision South-Eastern 322 533, 64 1162, 88 1440 (1944). Prior decision, had assumed, light Virginia, 75 168, Wall. 183, 19 357 (1869), issuance transaction interstate commerce enjoyed virtually exclusive domain over held fire company conducted transactions across lines commerce, intend exempt operation Act.8 provoked widespread concern longer able engage taxation effective quickly, enacting year Underwriters. 10 observed shortly afterward, "[o]bviously Congress' existing future systems regulating taxing insurance." Prudential Benjamin, 328 408, 429, 66 1142, 1155, 90 1342 (1946). Our given effect construing operative 2(b) proviso, critical provision limiting Law." See SEC National Securities, Inc., 453, 460, 564, 568, 668 (1969); FTC 560, 78 1260, 1540 (1958); infra, 2935. case.9 Rather, called upon interpret, first time, 3(b), principal pre-emptive "business 11 determined word should ordinary deal." exception, so read, covered "outside state-permitted procedure, [to] agree themselves customers dissatisfied offered sold policies companies." 12 Petitioners take strong reading, arguing "should cases refusals used penalize traders refuse conform competitive conspiracy." Brief 13. accord plain judicial "boycott," specific intent, Act. Respondents counter sweeping, warrant view protects "or traders" anticompetitive practices, withholds similar victimized private, predatory agreements. They urge involves "traditional boycott," defined terms, opposed except specified terms. 43. 13 consider language, structur Act.10 IV A. 14 starting point involving construction statute itself. Blue Chip Stamps Manor Drug Stores, 421 723, 756, 1917, 1935, 44 539 (1975) (POWELL, J., concurring). With economy expression, provided continued "any thus employed terminology evokes tradition meaning, body interpreting absence indications contrary, read tradition. generic concept refers method pressuring party dispute withholding, enlisting others withhold, patronage target.11 gained currency country largely opprobrium describe tactics labor disputes. Glidden, 55 Conn. 46, 890 (1887); Laidler, Boycott, Encyclopaedia Social Sciences 662-666 (1930). Thus surprising entered lexicon law attempts unions encourage third cease suspend doing employers unwilling permit unionization.12 Loewe Lawlor, 208 274, 28 301, 52 488 (1908); Gompers Bucks Stove Range 221 418, 31 492, 797 (1911); Lawlor Loewe, 235 522, 35 170, 341 (1915); Duplex Deering, 254 443, 41 172, 65 349 (1921); Bedford Stone Cutters' 274 37, 47 71 916 (1927).13 16 define embracing cite commentary develop test distinguishing restraints per se invalidation inherently destructive competition.14 But before unreasonable. regard, referred states necessary elements purview Indeed, reflect marked lack uniformity defining term. 17 refer stating "group boycotts" "concerted traders," Klor's Broadway-Hale 359 207, 212, 79 705, 709, 741 (1959), businessmen deprive access merchandise latter wish public," General Motors Corp., 384 127, 146, 86 1321, 1331, 415 (1966). note neither standard excludes respondents—for ply "trade" services, 4, supra —from cognizable victims. verbal formulas also used. FMC Svenska Amerika Linien, 390 238, 250, 1005, 1012, 1071 (1968), example, "[u]nder buyer buyers illegal se." boycotts, clearly run afoul [of Act]." Times-Picayune 594, 625, 872, 889, 1277 Hence, "boycotts unitary phenomenon." P. Areeda, Antitrust Analysis 381 (2d ed. 1974). 18 labor-boycott illustrate, need relationship each other. unlawful, customer conspirators who denied goods because accede sellers. Paramount Famous Corp. 282 30, 51 42, 145 (1930); Nat. Pictures, 44, 45, 151 Binderup Pathe Exchange, 263 291, 96, 68 308 (1923). Anderson Shipowners 272 359, 125, 298 (1926). put Kiefer-Stewart Seagram Sons, 340 211, 214, 259, 261, 219 (1951), makes offense [businessmen] stop selling customers."15 Whatever characterizations possible,16 fairly viewed "an organized Fashion Guild FTC, 312 457, 465, 61 703, 706, 85 949 (1941), policyholders. Solely forcing hospitals curtailment previously available, induced customers. simply fix rates coverage; sources even negotiating favorable elsewhere pact served tactical weapon invoked enlistment trade, capitulation boycotted group, long supporting finding unlawful Eastern Lumber Assn. 234 600, 612-613, 34 951, 954, 58 1490 (1914), citing supra; U.S., 213, S.Ct., 710; 362-363, 364-365, 126-127. 312, 100, film distributors conspired dealing exhibitor he films distributors, "[t]he illegality consists, separate each, combination prevent [target]."17 20 if statutory 3(b).18 But, Cardozo observed, words phrases come "freighted imparted mischief remedied contemporaneous discussion. history teacher ignored." Duparquet Evans, 297 216, 221, 412, 414, 80 591 (1936) (citation omitted). therefore B Appeals, argued victims exception.19 That position enjoys targets termed "boycotts" "other coercion intimidation" belong industry association well dealt nonmembers. 535-536, 1164. Moreover, references debates preventing imposing sanctions uncooperative 91 Cong.Rec. 1087 (1945) (remarks Rep. Celler); id., 1485-1486 Sen. O'Mahoney). however, expanded list potential include victim—even industry—who Tr. Oral Arg. 22, 57-58. 22 bill role acts violative Both Committee Reports stated: "[A]t prohibitions [agreement or] suspended. These provisions full force effect." S.Rep.No.20, 79th Cong., 1st Sess., (1945); H.R.Rep.No.143, (1945), U.S.Code Cong.Serv.1945, pp. 670, 672. make Act's proponents important safeguard danger might advantage purely permissive legislation establish monopolies enter into 23 ultimately enacted emerged Conference compromise Senate House proposals.20 conference substitute quickly approval House, encountered opposition Senate. Senator Pepper spoke length privileging "[to enact] mild form they call regulatory, thereby defeating Supreme itself." 1443 (1945). responses Senators Ferguson O'Mahoney, floor managers bill, indicate willing matters range Act.21 24 passages O'Mahoney objective O'Mahoney's view, vice . rating bureaus, system government built up small undertook understandings invade field regulate commerce." 1485 substitute, insisted, "outlaws completely steps attempted control great international Ibid. Perhaps most revealing discussion found his explanation why "boycotts, He 25 "[T]he committee cognizant many salutary ought approved, objection. From very beginning, President, I always saw objection public interest open approved law. Public supervision essential. 27 "[M]y judgment carry program knowledge whole study prohibited [§ (b )]." 1486 (emphasis supplied). regulations associations industry, vivid example sort condemned," ibid., exemplified larger evil—"regulation groups," 1483—that application herman Act.22 29 unqualified; covers If competing unreasonable While unambiguously answer, itself chose limit.23 C contend supports interpreted insurance" encompass insured, issued, reliability, interpretation, enforcement," mere enactment "prohibitory legislation" administrative supervision" constitute adequate satisfy proviso 564-565, 1262. Thus, conclude, congressional express d primary responsibility precludes specifically authorizing challenged. rely syllogism faulty premise, ignores exception. Unless somewhat sweep serves whatever. do press argument far, suggest persuasive engrafting justified nor history.24 V 32 hold remains case, 33 agreed ensuring policyholder new, obtained strangers immediate dispute, "A valuable service germane [respondents'] withheld action." Silver Stock 373 341, 348-349, 5, 83 1246, 1252, 389 (1963). went beyond benefits vital quality service. Cf. Continental V., Inc. GTE Sylvania 433 36, 55, 2549, 53 568 (1977). became captives insurer. sense imposed greater restraint forces than compete price, policy, service, since reduced likelihood broken ranks fixed terms.25 here certainly not, category "agreements can normally business," 1444 interests [sic ] safely permitted," 1486. emphasize There authorization question. explicit premise Appeals' 9, aver customers.26 36 alleges attempt "regulation 1483 categories authorizes goals, maintenance solvency. essential services. supra. conclude conduct, complaint, 3(b).27 37 ruling alter 2(b)'s tax laws, recognition primacy regulation, generally that" individual actors short 889. Finally, intent collaborative address compelled policy. 38 39 Affirmed. 40 STEWART, REHNQUIST joins, dissenting. "shall Law."1 immunity confer intimidation."2 Today holds same seems me, refer, condemned narrower involved 1440, prompted enact accurately reads conferring broad-scale least "occurred Ante, 553. plainly priority just immunize Law."3 purpose, true history. understand tries achieve giving unduly expansive when obviously meant accomplish THAT 2(b). Properly suspends practice law.4 correctly notes "is case," ante, 540, section construed entirely independently 43 gives me misconceive design distort basic purpose. absolute brings back not.5 By expansively, narrows States. Yet generous license govern free interference laws. Because believe overlooks misperceives respectfully dissent. 45 true, says, fails tell phrase "tradition Act." 541. Yet, selection precisely entire indicates apart traditional usage. "coerCION" AND "intimidation." devour bestowed 2(b).6 logically result. therefore, turn 46 20, 1942, Department secured indictment stock individuals prosecution came surprise many, precedents dating years implied Commerce Clause.7 ground, sustained defendants' demurrer 15, 1943,8 Government took appeal directly Uncertain about continuing validity conflicted various organizations immediately relief Congress. Some threatened withhold taxes commerce.9 threats officials too. Months heard arguments duplicate bills introduced i both Houses blanket Clayton Acts.10 A joint extensive hearings September 1943 1944, vote delayed until decision. 48 1944. 1440. Of relevance inquiry description activities indictment: 49 "The member E. U. controlled cent 'allied lines' six conspiracies consummated. consisted concert through premium agents' commissions, together nonmember conspiracies, compel persons needed buy Companies cut off opportunity reinsure risks, facilities disparaged; sales agencies defiantly represented nonS. punished withdrawal right represent A.; needing purchased non-S. patronage." 1164 (footnote concluded: 50 "Few go far without supervision, uniform rates. No authorize manner alleged, acquired vested practices." 562, 1178. Before announcement opinion, appeared none lengthy numerous proposals totally exempting Acts Representatives 1944.11 recommended bill,12 urged pass wait proposal drafted commissioners, organization officials.13 let die session,14 turned attention recommendation commissioners. moratorium years, exempted practices.15 provided: "Nothing contained render inapplicable intimidation."16 accompanying report explained these provisions:17 suspension July 1948, requested, apply, order allow adjustments deem desirable. After apply use rates, forms, underwriting plans State-approved, adjustment, inspection agreements[,] reinsurance co-insurance, commission agreements, collection statistics, making rules, mandatory. "No exemption oppressive practices. Provision hereafter A4406 340, reported unanimous Judiciary January 1945.18 immunized dropped, leaving suspended during accommodate laws.19 Even moratorium, intimidation."20 time. finally paramount regulation. version striking opposite balance. Its too, carried limitation, end pre-empted insofar concerned.21 worked present steered middle Federal Trade Commission period, law."22 States' power extended life Act.23 60 crucial effectuation struck pre-empt pre-emption, original prevails. hand, itself, prevails, matter how interpreted. extremes. unless actually area, referring evils considerably Reports, evident kinds —that is, follow industry's Repeatedly, Congressmen drafting drew distinction regulation.24 wanted interest, indicated formal approval.25 that. sure escape meets sanction promoted organizations. leaves might, prompting organizations, merely sufficiently immunity, coerce compliance competitors. construed, fills gap keeping fully enforcement —by described case—of itted law.26 Similarly enacts own retains especially "destructive practices," 1178, 62 key feature then, aimed Underwriters, boycotted, coerced, intimidated comply apply. 63 follows, case. petitioner aim disciplining companies. voluntary. reverse Appeals. Mc arran-Ferguson part: "Sec. insurance, person therein, relate business. "(b) invalidate, impair, supersede imposes fee business, relates insurance: Provided, 2, 1890, known 1914, 26, Law. Nothing chapter 34, 448, second dismissal claim, state-law claims. Review disposition 730, concession requirements satisfied infra. An done effect, whereas holder doctor practiced year, say 1972, 1972 'occurrence' covered, 'claims made' himself arising 1972." assert "it impossible physician, hospital prac ice medicine treatment insurance," result "may forced disengage medicine, emergency basis," 26. rendition Transnational Ins. Rosenlund, 261 F.Supp. (Or.1966), Circuits squarely reaches "blacklists" Meicler 506 732, 734 (CA5 1975); cf. Battle Liberty Life 493 39, 1974), cert. denied, 1110, 784, 807 (1975); Addrissi Equitable Assurance Soc., 503 725, 729 (CA9 420 929, 1129, 400 Two broader Ballard Shield Southern Va., 543 1075, 1078 (CA4 1976), 430 922, 1341, 601 (1977) (alleged deny health chiropractic services); Proctor Farm Mut. Auto. 182 U.S.App.D.C. 264, 276-277, 561 262, 274-275 (1977), pending, 77-580 automobile repair shops noncooperative shops). Monarch Loyal Protective 326 841, 846 (CA2 1963) (dictum), 376 952, 84 968, 971 (1964). stable JUA created temporary Emergency Regulation XXI, I. Dept. Business Regulation, Div., 114-127, received R.I.Gen.Laws 42-14.1-1 revised 1976 physicians. 150-151. subsequent change Director promulgate permitting well. R.I.Pub.Laws, ch. 79, technically moot, showing, "on remand, remote injunctive unnecessary." 633-636, 897-899, addressed inability obtain reasonable 1975," mootness, 8-9, (1978), advised survives formation JUA. "entitled seek treble damages," noting, discussion, increased costs doctors." considerations identified determination courts below. (SEUA), membership nearly 200 individuals. maintain arbitrary noncompetitive "allied lines" monopolize trade asserted also, words, "employed [SEUA] terms." 535, contest below [petitioners'] related regulates business." 6. argue contrary rested "with 12. "coercion" "intimidation" Bird, Limitations Noncommercial Concerted Refusals Deal, 1970 Duke L.J. 247, 248; Webster's International Dictionary English Language 321 1949); Oxford 1040 (1933); Black's Law (4th 1968). situation, although using term, Montague Lowry, 193 38, 307, 608 (1904), nonlabor wholesalers manufacturers bylaws dealer manufacturer less nonmember. Kirkpatrick, Commercial Boycotts Per Se Violations Geo.Wash.L.Rev. 302, 306-307 (1942). cited text significant interpretation though controlling unions. Connell Plumbers Steamfitters, 616, 621-623, 1830, 1834-1835, 418 Hutcheson, 219, 234, 463, 467, 788 (1941); Drivers' Union Lake Valley 311 91, 102-103, 122, 127-128, (1940). L. Sullivan, Handbook 256-259 Other commentators framed area. Barber, Deal Laws, 103 U.Pa.L.Rev. 847, 875 (1955) ("group pattern secure removal competition"); 305 ("interference relations others"). merit definitions. resale scheme, White Motor 372 253, 260, 696, 700, 738 (1963), boycott" 212 (1959); Frankfort Distilleries, 324 293, 295-296, 661, 662-663, 951 producers, wholesalers, retailers local retail prices "boycott program"). Report Attorney General's Study Laws 137 ("approv[ing] legal doctrines condemn suppliers routine forbidden Act"). presents distinguished Topco Associates, 405 596, 612, 92 1126, 1135, 515 (1972); Consolidated Laundries 291 563, 573-575 1961). commentator noted: "If lacks bargaining get contract apparently him join insertion contract, desirable." 11, 263, discussing, inter alia, Exchange; disagreement STEWART's expression alarm consistent usage, "would 2(b)." Post, 559. precise "coercion," "intimidation," dissent's suggestion coextensive Eas ern 611, quoting 438, 496, (1911). illustrating assertion, post, 559 additional activity, treated either "coercion." Appellees 76-1226, p. (CA 1); 1). McCarran (S. 340) override relating staying enable adjust statutes Sess. Cong.Rec 478 Largely insistence expiration moratorium. 488. favorably 1085 House. appointed, composed McCarran, Ferguson, Sumners, Walter, Hancock. amendment, added presently H.R.Conf.Rep.No.213, 1-2 perceived "rating bureaus," disturbed 1481 constituting ibid. "certain conceivably law," bureau" operating "under ." 1444. 1483, muster dissenting Stewart advances abandoned 546, 565. dissent statement, debates, asserting 3(b)'s keep alive purporting therein. nothing Commissioners, model evinces whole, high plane, benefit public, inconsistent procedures eradicated. (1944) difficult interpretation. supposedly narrow clause. concedes "[w]hatever impetus , indication litigation." 563-564, 20. 546-547, commissioners' quoted above, suggests Certainly disclaimed "no changing 'section' 'act', am intention concerned." 479 indictment. materials demonstrate clarity [Congress] code, what violence usage." Frankfurter, Reflections Reading Statutes, Colum.L.Rev. 527, 543-544 (1947). arrangements notwithstanding "relate closely status reliable insurers," (1969), adequacy line "bright" suggest. argues think restatement 1262, (1958), 557-558 furthers resolution hand. disputed O'Mahoney), scrutiny, legislation," coupled "enforcement supervision," deemed sufficient rejected Commission's "where statute, sanctioning transaction, prohibits realistically, enforcement, 'regulation' fact." Commission, O.T. 1957, Nos. 435 436, 53. nonetheless foreclose comprehensive record foreclosure. "[E]ven rigidly fixed, cartel product homogeneous involved. room rivalry promptness filling orders ancillary division markets, contrast, substantially wash rivalry." 14, 224-225. Counsel oral director division. filing made, policies, exercised material aspects actions complained relative withholding statement contemplation scheme. occasion element direction practice, absent factor considered play possible defense "state action" doctrine, Parker Brown, 317 87 315 (1943), progeny. full: "(a) 1012 Until 1936, Robinson-Patman Anti-Discrimination thereof. [Act] 1013 statutes, implicitly accepted questioned here. 540 capable suspending First, Murdock "[i]nsofar [the laws] fail cover [federal] become again" Second, "if legislate point, binding." 1481. Ferguson); White). few occasions 668, Arizona protecting stockholders Securities Exchange 1934. involve hence 1540, There, "prohibiting deceptive 1261, respondent carrying advertising false, misleading, deceptive, 561-562, 1261. Noting "mere pretense," FTC's "too 'inchoate' 'regulation statutory] prohibition crystallized 'administrative elaboration standards cases.' " Ferguson's words: "There things interfere with. boycotting, Most cast For fixing seen (i. e., boycott), offer sellers' coercion). state-sanctioned fall Ferguson). Cong.Serv. 1945, 670. 712 (N.D.Ga.). H.R. 3270, 1362, 78th (1943). 6510 S.Rep.No.1112, 2d pt. 8054 A4406. testimony ttorney Biddle, who, day Subcommittee considering legislation. assured bring prosecutions subject, insisted forward seriousness charges. portion text, 560-561, "[T]hat price-fixing serious boycotting. association, operated, illegal." Hearing 1362 Subcommittees Committees Judiciary, 636 pointed pre-emption regulations. 480 clarify expressly period. committee, applied establishing short-term 479. extend never ratified originally partially initially defendants still faced trial following Certainly, expressed liability. 6450 6452 ep. La Follette); Hearings, 17, 637 Hatch). face, removed doubt Government's continue prosecution. impetus, litigation. 1484-1485. 1480, O'Mahoney);

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