Opinion ID: 1464928
Heading Depth: 2
Heading Rank: 2

Heading: Alleged Antitrust Problems

Text: Nor do we find merit in the Guild's assertion that validation of the regulatory price guideline in N.J.A.C. 13:35-8.24(k)(4) would create an unwarranted exception to the New Jersey Antitrust Act, L. 1970, c. 73, N.J.S.A. 56:9-1, et seq., and would result in a conflict with the federal antitrust laws. [7] The Guild argues that the price guideline will effectively operate as a price ceiling (notwithstanding the specific disclaimer of such a purpose in the regulation itself) and thus constitutes an impermissible exception to the state antitrust law unintended by the Legislature in view of the Act's lack of authorization therefor. We agree with the Appellate Division's conclusion that the regulation means what it says and merely establishes a price guideline which forewarns dispensers that they must be able to justify a retail charge for services and equipment in excess thereof. Our Antitrust Act specifically exempts such fee guidelines from its proscriptions. N.J.S.A. 56:9-5(b)(9). However, even if the guideline constituted a price restriction in restraint of trade, the Guild's argument must fail, as the express terms of the Antitrust Act itself indicate its inapplicability to any anticompetitive action authorized by state law. N.J.S.A. 56:9-5(c). The claimed conflict of the price guideline with the federal antitrust laws is similarly spurious. Again, even if the regulation did set an anticompetitive price ceiling, it would nevertheless qualify for the so-called state-action exemption to the federal antitrust laws. That doctrine was first announced in Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943), where the Supreme Court held that the Sherman Act, 15 U.S.C. § 1 et seq., was not intended to apply to certain types of governmental action by the states even though a restraint of trade resulted. The threshold inquiry in determining if an anticompetitive activity is State action of the type the Sherman Act was not meant to proscribe is whether the activity is required by the State acting as sovereign    [the] anticompetitive activities must be compelled by direction of the State acting as a sovereign. [ Goldfarb v. Virginia State Bar, 421 U.S. 773, 790-91, 95 S.Ct. 2004, 2015, 44 L.Ed. 2d 572, 587 (1975); see also Cantor v. Detroit Edison Co., 428 U.S. 579, 590-91, 96 S.Ct. 3110, 3117, 49 L.Ed. 2d 1141, 1149-50 (1976)] The most recent consideration of the appropriate circumstances for application of this exemption was in Bates v. Arizona State Bar, 433 U.S. 350, 97 S.Ct. 2691, 53 L.Ed. 2d 810 (1977). There the Supreme Court held that the disciplinary rules of the Arizona Supreme Court regulating the practice of law were entitled to the state-action exemption because those rules reflect[ed] a clear articulation of the State's policy with regard to professional behavior in an area at the core of the State's power to protect the public and emanated from the ultimate body wielding the State's power over the practice of law. 433 U.S. at 360-362, 97 S.Ct. at 2698, 53 L.Ed. 2d at 821-22. The Court took pains to distinguish Cantor, supra, and Goldfarb, supra, both of which had held certain state regulatory action not protected by the antitrust exemption, as cases where that conclusion did not have the undesired effect of diminishing the authority of the states to regulate their professions. See Bates, 433 U.S. at 359-363 and 360 n. 11, 97 S.Ct. at 2696-2698 and 2697 n. 11, 53 L.Ed. 2d at 820-822 and 821 n. 11. It is manifest that the Committee's regulatory price guideline is entitled to the antitrust exemption under the Bates rationale. The regulation is a formal expression of this State's policy concerning ethical behavior of members of the dispensing profession regulated by the Act for the purpose of protecting the public. The price guideline is a key element of the Act's comprehensive scheme to eliminate fraudulent and unconscionable practices in the dispensing of hearing aids to the public and thus is essential to the accomplishment of the Legislature's purpose in enacting the Act and creating the Committee. Accordingly, we are satisfied the regulatory price guideline of N.J.A.C. 13:35-8.24(k) (4) would qualify for the state-action exemption from the federal antitrust laws.