Opinion ID: 464995
Heading Depth: 3
Heading Rank: 1

Heading: The Concerted Refusal to Deal.

Text: 13 The record indicates that after the Rickards group had failed in its efforts to convince CERF to allow veterinarians lacking ACVO-certification to participate in the CERF program, they encouraged ACVO members to stop dealing with CERF. There is evidence that this boycott of CERF met with some success. The minutes of the July 18, 1978 Executive Board meeting of the American Society of Veterinary Ophthalmology (ASVO), the professional organization established by the Rickards group, state that [t]he ACVO members present did indicate that they had cut all ties with CERF. The district court concluded that the Rickards group's concerted refusal to deal with CERF violated section 1 under both a per se and a rule of reason analysis. We hold that a per se analysis is inappropriate under these facts. 14 The per se rule governs only if the practice at issue facially appears to be one that would always or almost always tend to restrict competition and decrease output. National Collegiate Athletic Association v. Board of Regents of University of Oklahoma, 468 U.S. 85, 104 S.Ct. 2948, 2960, 82 L.Ed.2d 70 (1984) (quoting Broadcast Music, Inc. v. Columbia Broadcasting System, Inc., 441 U.S. 1, 19-20, 99 S.Ct. 1551, 1562, 60 L.Ed.2d 1 (1979)). Some practices, such as horizontal price-fixing, are clearly subject to a per se analysis. E.g., United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 223, 60 S.Ct. 811, 844, 84 L.Ed. 1129 (1940). While there is some older case law suggesting that group boycotts are per se violations of section 1, see, e.g., Klor's Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207, 212-13, 79 S.Ct. 705, 709-10, 3 L.Ed.2d 741 (1959); Blanton v. Mobil Oil Corp., 721 F.2d 1207, 1211 (9th Cir.1983), cert. denied, --- U.S. ----, 105 S.Ct. 1874, 85 L.Ed.2d 166 (1985), the Supreme Court's most recent pronouncement on concerted refusals to deal requires that we look to the type of boycott at issue to determine if per se condemnation is required. Northwest Wholesale Stationers, Inc. v. Pacific Stationery and Printing Co., --- U.S. ----, 105 S.Ct. 2613, 2619, 86 L.Ed.2d 202 (1985). Unless the challenged activity falls into a category likely to have predominantly anticompetitive effects, the per se analysis of a concerted refusal to deal claim is overbroad. Id., 105 S.Ct. at 2621. Anticompetitive effect is unlikely unless the boycotting party possesses market power or exclusive access to an element essential to competition. Id. Nothing in the record suggests that the Rickards group possessed dominance in the veterinary ophthalmology market, or that it controlled an element essential to competition. On the contrary, it was CERF's growing position in veterinary ophthalmology that triggered the Rickards group's concerted action against it. Therefore, under Northwest Wholesale Stationers, the district court's application of a per se analysis to the Rickards group's boycott was premature. 15 The district court found in the alternative that the Rickards group's concerted action violated section 1 under the rule of reason. Under this analysis, the moving party must establish that the action unreasonably restrained competition. See Jefferson Parish Hospital District v. Hyde, 466 U.S. 2, 104 S.Ct. 1551, 1567, 80 L.Ed.2d 2 (1984). CERF attempted to meet its burden by showing that it temporarily suspended its registration activities during the pendency of the Rickards group's antitrust suit against it. CERF subsequently re-entered the market. Nothing in the record indicates that the boycott was the cause of the suspension of its registration business. In fact, the record suggests that the lawsuit was the only cause. Further, CERF may have lost profits from the temporary disruption of its business but failed to assert the claim. Therefore, we cannot affirm the district court's finding that the Rickards group's urging of ACVO members not to deal with CERF of itself violated section 1. 16 Although we reject the district court's finding of section 1 liability for the concerted refusal to deal orchestrated by the Rickards group, the court nonetheless made a valid finding of section 1 liability. The district court awarded CERF $416,893.99 in damages on its counterclaim. 1 This figure represents the amount spent by CERF in its defense against the antitrust suit filed against it by the Rickards group. Because a single lawsuit, when brought for anticompetitive purposes, may under certain circumstances constitute a violation of section 1, we affirm the district court's finding of liability on that basis. See e.g., Omni Resource Development Corp. v. Conoco, Inc., 739 F.2d 1412, 1414 (9th Cir.1984) (single suit may constitute antitrust violation when coupled with anticompetitive conduct external to the suit). 17