Opinion ID: 3010542
Heading Depth: 3
Heading Rank: 3

Heading: Direct injury from ABA standards

Text: MSL alleges a third injury which occurs directly from the ABA's enforcement of its standards, independent of both the bar examination and stigma issues. The challenged standards relate to faculty salaries (MSL charges price-fixing) and limitations on accredited schools accepting transfers or graduate students from unaccredited schools (MSL charges a boycott). Although the ABA is immune from liability attributable to the state action in requiring applicants for the bar examination to have graduated from an ABA-accredited law school and from any stigma injury resulting from the denial of accreditation under the Noerr petitioning doctrine, the ABA is not immune in the actual enforcement of its standards. The state action relates to the use of the results of the accreditation process, not the 28 process itself. The process is entirely private conduct which has not been approved or supervised explicitly by any state. See Midcal, 445 U.S. 97, 100 S.Ct. 937. Thus, the ABA's enforcement of an anticompetitive standard which injures MSL would not be immune from possible antitrust liability. Extending Noerr immunity to this type of private activity would run counter to Allied Tube. We start our analysis of this direct injury issue by pointing out that “to survive [] motion for summary judgment, [the plaintiff] must establish that there is a genuine issue of material fact as to whether [the defendants] entered into an illegal conspiracy that caused [the plaintiff] to suffer a cognizable injury.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-86, 106 S.Ct. 1348, 1355 (1986). The district court held that MSL did not raise a genuine issue of fact as to whether it was injured by the salary, transfer or graduate student standards. MSL, 937 F. Supp. at 441 n.10, 445 n.20. As we discuss above, MSL failed to show sufficient evidence that it was denied accreditation because it did not comply with the salary standard. Therefore, MSL has to show that the ABA's alleged fixing of salaries at its accredited schools somehow injured it in another way. At first glance, the argument that the ABA's faculty salary standards injured MSL makes no economic sense. As the district court commented, if ABAaccredited schools are required to pay higher salaries, an unaccredited school should have a cost advantage. See MSL, 937 29 F. Supp. at 441 n.10. Indeed, it would appear that a conspiracy to increase the conspirators' costs would be no more logical than would a conspiracy to reduce the conspirators' income. Cf. Advo, Inc. v. Philadelphia Newspapers, Inc., 51 F.3d 1191, 1195-1204 (3d Cir. 1995) (discussing predatory pricing monopoly case). Thus, while we consider this appeal on ordinary summary judgment standards, we point out that it could be argued that MSL must come forward with more persuasive evidence to support [its] claim than would otherwise be necessary. Matushita, 475 U.S. at 587, 106 S.Ct. at 1356. MSL alleges that the faculty salary standards injured it in two ways. First, MSL asserts that it raised its salaries in an attempt to get accreditation. This claim is in direct conflict to its consistent assertion that it refused to comply with the ABA's anticompetitive standards and for that reason was denied accreditation. See, e.g., MSL br. at 3-4. The claim also is remarkable because MSL made it clear that it would not comply with ABA standards to obtain certification. Further, MSL's assistant dean testified that MSL salaries have “never been tied to” ABA standards.14 App. at 439. Rather, its dean stated that the salary increases were made out of fairness and as a reward for hard work. App. at 393. The only other related evidence shows that MSL acted independently to increase its salaries, and then later found that this action might help it get 14. MSL points out that the assistant dean has no role in setting MSL's salaries, so he is only giving his personal belief on the issue. MSL reply br. at 30, sup. app. at 5476-79. 30 accreditation. See app. at 828. Unsupported allegations to the contrary, see app. at 2123, are not sufficient without explanation to outweigh the prior testimony and avoid summary judgment. See Hackman v. Valley Fair, 932 F.2d 239, 241 (3d Cir. 1991); Martin v. Merrell Dow Pharm., Inc., 851 F.2d 703, 706 (3d Cir. 1988); but see Videon Chevrolet, Inc. v. General Motors Corp., 992 F.2d 482, 488 (3d Cir. 1993) (distinguishing Martin and holding that statements have to be clearly contradictory and without explanation to be insufficient to defeat summary judgment motion). There has not been sufficient explanation of the contradiction to create a genuine issue of material fact and justify reversing the summary judgment. MSL's second contention that the ABA's salary standards injured it is that the standards inflated the market cost of law professors, thereby increasing the salaries MSL must pay its faculty. This market price argument is equally unavailing. MSL's stated policy was to rely on adjunct faculty. MSL did not produce evidence that any of its faculty other than its dean ever had been employed at another law school. In effect, MSL was hiring faculty from a different market, one unaffected by the ABA's conduct, or at least a different provider in the same market (teachers who never taught at ABA-accredited schools). The report by MSL's economic expert does not contradict this point, app. at 3568, because it contains only general and theoretical observations and is not tied to evidence in the 31 record.15 Thus, we can disregard it for the purposes of reviewing the summary judgment. See Pennsylvania Dental Ass'n v. Medical Serv. Ass'n, 745 F.2d 248, 262 (3d Cir. 1984). Our result is supported by MSL's policy towards salaries: “because a professor at MSL must prove himself or herself as a full-time faculty member before obtaining a large salary, MSL retained a level of starting salaries that are below ABA requirements.” App. at 2123.16 The situation here is analogous to that in Mid-West Paper Prods. Co. v. Continental Group, Inc., 596 F.2d 573 (3d Cir. 1979). In that case we held that a purchaser from competitors of a price-fixer did not have standing to sue the price-fixer on the grounds that the general market price increased as a result of the price fixing. Id. at 587. We explained Mid-West Paper in In re Lower Lake Erie Iron Ore Antitrust Litig., 998 F.2d 1144, 1167-68 (3d Cir. 1993), where we focused on how direct an impact the challenged conduct had on the 15. [A]s I understand it, MSL was forced to raise its salaries to levels above what it would have otherwise (a) in an attempt to satisfy the standards and (b) because of the market effects of the standards on prices in the input markets. The anticompetitive effects of those practices affect input prices (salaries, etc.) for MSL, as well for every other law school. The practices injure all of the schools that have accepted the standards, as well as those that have not. Because the standards have an undeniable impact on input costs, every school is forced to incur higher costs, along with the reduction in the flexibility needed to respond efficiently to changing conditions, all schools suffer competitive injury as well. App. at 3568. 16. It is interesting to note that MSL charges that the ABA and the AALS engaged in a conspiracy to restrain trade. It thus appears that insofar as the salary standards are concerned, MSL believes that the AALS conspired to increase its member law schools' costs. 32 plaintiff. MSL was not impacted directly by the ABA's criteria because it was hiring a different kind of professor. Mid-West Paper thus controls, and summary judgment was proper.17 MSL also alleges a boycott in that the ABA prevented its accredited schools from accepting transfers or graduate students from unaccredited schools. The district court held that MSL had not produced any evidence that it was injured by either of these rules. MSL, 937 F. Supp. at 445 n.20. This holding is correct. MSL has done nothing more than state the standards and allege that they injured MSL. See app. at 2108, 2120. There is no factual support for these allegations. Further, the evidence shows that MSL actively opposed its students transferring, both in policy and practice.18 MSL therefore cannot claim that the ABA's prohibition on transfers with credit injured it.19 17. This is true even though Mid-West Paper dealt with standing and we deal here with whether there is a genuine issue of fact as to MSL’s injury, for the concepts are similar. 18. Its dean testified in another proceeding “MSL would have [] denied admission had it known [a student] intended to seek transfer away as soon as possible.” App. at 1415. MSL considered transfers to be “extremely harmful to the school,” id. at 1416, and that assisting students in transferring was “selfdestructive.” Id. at 1231. 19. MSL's reliance on the allegations in the government's antitrust case which we described above is unavailing for two reasons. First, those allegations never were proven because the case was settled, and therefore cannot be taken as true in this case. See United States v. Microsoft Corp., 56 F.3d 1448, 1460-61 (D.C. Cir. 1995); Petruzzi's IGA v. Darling-Delaware, 998 F.2d at 1247. Second, the government never alleged that MSL suffered any injury from these standards and does not so argue in its amicus brief in this case. See, e.g., DOJ br. at 6-7. 33 MSL also alleges that the AALS boycotted MSL by refusing membership and that the LSAC boycotted MSL by refusing to allow it to attend certain recruiting conferences. See MSL br. at 59. The allegations regarding the AALS are simply incorrect. AALS membership is independent of ABA accreditation, and MSL never has applied for such membership. App. at 2278-80. Even though it is not a member, MSL can attend AALS conferences and has done so. Id. at 2280. Therefore MSL has not suffered any injury at the hands of the AALS. The LSAC's failure to invite MSL to its conferences does not constitute a boycott.20 Under the fact-pattern here to demonstrate a boycott, MSL has to show that these conferences are an essential facility for recruiting students as there is no other potential basis for the boycott claim. Such an essential facility or claim fails whenever a plaintiff (1) cannot show that the defendant has a monopoly over the alleged essential facility; (2) the facility cannot be duplicated in a reasonable manner; and (3) the plaintiff has been denied its use. Ideal Dairy Farms, Inc. v. John Labatt, Ltd., 90 F.3d 737, 748 (3d Cir. 1996). MSL has shown only that the LSAC denies it participation. There is no evidence suggesting that the LSAC has a monopoly over access to law students or pre-law advisors, or even over recruiting fairs. The LSAC does not hinder MSL's recruiting in any way, it 20. LSAC conferences are only open to LSAC member schools. MSL is not a member of the LSAC because it does not use the LSAT and it is not accredited by either the ABA or the AALS. 34 just does not aid it by allowing MSL to attend its conferences.21 Such activity is not required by the antitrust laws, and its absence does not constitute antitrust injury. Further, MSL has not shown that the LSAC injured it. The LSAC never allowed MSL to attend its conferences and, prior to ABA accreditation denial, MSL's enrollment exceeded its projections. App. at 2420-24. It was the denial of accreditation which caused MSL’s enrollment to decline, and as discussed above, in light of Parker and Noerr that loss cannot be the basis for antitrust liability. MSL contends that as long as it was injured in some way by the overall alleged conspiracy, it need not show injury from its individual aspects, and cites in this respect In re Lower Lake Erie Iron Ore Antitrust Litig., 998 F.2d at 1172. Reply br. at 35. While this principle is correct, it is inapplicable here. In re Lower Lake Erie did not involve state action or petitioning of government immunity issues. Here, MSL must show that it was injured in some way by the ABA's enforcement of its standards, independent of any injury from the immune state action or petitioning, and as we discuss above, it has not done so. Inasmuch as we hold that MSL has failed to demonstrate an injury for which antitrust liability may lie, we need go no further to affirm the district court's summary judgment order with respect to issues beyond those controlled by Parker and 21. Similarly, MSL's claims about getting only a listing in The Official Guide to U.S. Law Schools fail because there are many such publications, some of which do describe MSL. 35 Noerr. Thus, we do not consider the district court's alternative free speech immunity theory. Further, we make no comment on whether MSL produced sufficient evidence to show the existence of a conspiracy for two reasons.22 First, the alleged conspiracy with respect to the injuries from the bar examination requirements and the stigma from denial of accreditation involved immunized conduct. See Omni, 499 U.S. at 381-84, 111 S.Ct. at 1354-56. Second, MSL did not demonstrate that it suffered injury from the conduct not immunized. 15 U.S.C. § 15; see Matsushita, 475 U.S. at 585-86, 106 S.Ct. at 1355; Mathews v. Lancaster Gen. Hosp., 87 F.3d at 641; see also Sciambra v. Graham News, 892 F.2d 411, 414-15 (5th Cir. 1996); United States Football League v. National Football League, 842 F.2d 1335, 1377-78 (2d Cir. 1988). Of course, we hasten to add that we do not hold that if MSL had been able to demonstrate injury from conduct beyond the scope of Parker and Noerr antitrust immunity there necessarily would be liability as we have no need to reach that point.