Court Opinion

ID: 9609007
Source: CourtListenerOpinion
Date Created: 2023-08-22 03:21:15.815531+00
Date Added: 2024-06-11T13:31:16.508652
License: Public Domain

ORME, Judge
(dissenting in part):
While I otherwise fully concur in the majority opinion, I disagree with the result reached and portions of the analysis in the section entitled “Antitrust and ‘Group Boycott’.”
As the majority slates, there are three elements of the antitrust offense as charged in this case: (1) a contract, combination or conspiracy in restraint of trade; (2) in the form of a group boycott; and (3) with specific intent to eliminate competition. I simply do not believe that these elements have been met. My disagreement *819with my colleagues is quite complete. I believe defendants’ conduct constituted simple commercial bribery. I believe their conduct can in no way be properly characterized as a group boycott. I believe the evidence shows defendants’ intent was strictly to line their own pockets and not, in any sense, to eliminate competition.
COMMERCIAL BRIBERY
I do not view Utah’s antitrust statute as the appropriate vehicle for bringing commercial bribery charges. In addressing this issue, the trial court properly recognized the Robinson-Patman Act as the vehicle under which federal commercial bribery charges are typically brought.1 The court interpreted the Legislature’s failure to incorporate the Robinson-Patman Act as evidencing an intent to make Utah’s antitrust statute the appropriate vehicle for charging commercial bribery. I believe the fairer interpretation is that the Legislature deliberately failed to incorporate a Robinson-Patman-type act into our antitrust statute because it recognized that Utah already has a specific vehicle for prosecuting commercial bribery, namely the commercial bribery statute. Utah Code Ann. § 76-6-508 (1978).
Even assuming that commercial bribery is properly charged under the Utah antitrust statute, the majority concedes the bribery must be coupled with other acts intended to restrain trade in order to establish a violation. While the majority recognizes the principle that commercial bribery, without more, does not violate the antitrust laws, it only offers Fletcher’s unilateral refusal to accept proposals from other security companies as the “more” which is necessary to turn an otherwise garden-variety bribe into an antitrust violation. However, any agreement to deal exclusively with one party necessarily involves a refusal to deal with other parties. See, e.g., Construction Aggregate Trans. v. Florida Rock Ind. Inc., 710 F.2d 752, 776 (11th Cir.1983) (every exclusive dealing arrangement necessarily involves the exclusion of an entity which operates on the same market level). At least absent evidence of other illegal conduct, the defendants’ payment of bribes did not constitute a contract, combination, or conspiracy in violation of the antitrust statute. Fletcher’s refusal to engage the services of defendants’ competitors was merely the bargained for object of the bribes in question. Under the majority’s view — notwithstanding the claim that more than a typical commercial bribe is required — essentially every commercial bribe would be an antitrust violation if only the payee performed his or her end of the bargain.
GROUP BOYCOTT
As the majority observes, under § 76-10-920 of the Utah Antitrust Act, only four specific antitrust violations, “clearly labeled as per se violations of the Sherman Act,” are criminal offenses in Utah. Defendants in this case were charged with having committed only one such violation, namely a group boycott. As the majority states, the Legislature intended that federal interpretations be considered in construing the Utah statute where appropriate. However, unlike the Sherman Act, the Utah statute was designed to unambiguously define antitrust violations which will give rise to criminal sanctions in this state. See Dibble & Jardine, The Utah Antitrust Act of 1979: Getting Into the State Antitrust Business, 1980 Utah L.Rev. 73, 83. The majority concedes that the agreement between defendants and Fletcher did not constitute a classic group boycott under the federal definition and that “unless defendants’ conduct was in the form of a group boycott, it was not criminal under Utah law.”
Notwithstanding the specific language of the statute dictating the use of federal interpretations and the objective of clearly delineating proscribed conduct, the majority suggests that the Utah statute rejects the traditional federal definition of the *820term “group boycott” in favor of the “general definition of boycott.”2 This concept, according to the majority, refers to “a method of pressuring a party with whom one has a dispute by withholding, or enlisting others to withhold, patronage or services from the target.”3 Even under this definition, it is difficult to imagine how the behavior of these defendants constitutes any kind of boycott with antitrust implications. Fletcher accepted bribes from the defendants in this case so that they would receive the UP & L security contracts. There was no dispute, no pressure, no enlistment of others to withhold services, and no target for elimination. It is clear to me that even if the Legislature meant to have the term “group boycott” construed in a less rigid way than might characterize the traditional federal view, it nonetheless intended to have the term mean something reasonably concrete. Minimally, the behavior sought to be proscribed by the statute is behavior which can fairly be described as a group boycott.
In my view, what defendants did cannot be characterized as a group boycott in any sense. Defendants’ excursion into the realm of antitrust was, at most, in the form of an exclusive dealing arrangement. An exclusive dealing arrangement is a contract which involves a commitment by a buyer to deal only with a particular seller. L. Sullivan, Handbook of the Law of Antitrust 471 (1977). However, such an arrangement does not constitute a per se violation of section 1 of the Sherman Act, see, e.g., Twin City Sportservice, Inc. v. Charles O. Finley & Co., 676 F.2d 1291, 1304 n. 9 (9th Cir.1982) (explaining Tampa Electric Co. v. Nashville Coal Co., 365 U.S. 320, 81 S.Ct. 623, 5 L.Ed.2d 580 (1961)), nor does it constitute a violation of § 76-10-920 of the Utah Antitrust Act.
The trial court accurately categorized the arrangement between Fletcher and the defendants in this case as one of “exclusive dealing,” while at the same time stating that application of “rule of reason” analysis4 “would result in an unconstitutional deprivation of defendant’s rights to due process of law.”5 The majority likewise *821admits that “the rule of reason has no part in the criminal provisions of the Utah Antitrust Act.”
The majority, however, largely avoids the implications of this conclusion by minimizing the nature of defendants’ behavior and instead emphasizing their perceived state of mind in doing what they did. According to the majority, “the intent of the contract, combination or conspiracy is the deciding element” of criminality. Under this reasoning, even a purely vertical exclusive dealing contract — which both the majority and the trial court acknowledge is not a “group boycott” in the usual sense— can be miraculously converted into a group boycott, at least of the Utah variety, by proof of an anticompetitive intent. That is, as the trial court held, “an otherwise legal business decision can become an unlawful group boycott under the Utah Antitrust Act.”
The effect of this approach is to render totally ineffectual the Legislature’s effort to particularize but four familiar, per se antitrust violations as unlawful under § 76-10-920, so that “both the prosecutor and the community at large” will clearly know “what conduct is criminally proscribed.” Dibble & Jardine, The Utah Antitrust Act of 1979: Getting Into the State Antitrust Business, 1980 Utah L.Rev. 73, 83 (emphasis added).
But why else, the logic goes, would the Legislature inject a specific intent requirement into an offense which has historically been thought so bad that criminal intent can simply be presumed? It is obvious to me that by coupling an anticompetitive specific intent requirement with the group boycott aspect of § 76-10-920, the Legislature did not mean to obscure the issue of what kinds of behavior were proscribed. Rather, the Legislature meant to avoid the “confusion over the illegality of group boycotts and the governing standards,” id., by requiring that a readily identifiable group boycott be accompanied by an actual intent to eliminate competition. See id. The specific intent requirement was added to eliminate “the potentially problematic situation where a group boycott exists but an anti-competitive motive does not.” Id. The requirement was not added to allow for a criminal conviction whenever there is an anticompetitive motive regardless of whether there is really a group boycott. I believe by adding a specific intent requirement the Legislature meant to narrow, not expand, the scope of the group boycott crime in this state.
SPECIFIC INTENT
Even if the defendants engaged in conduct which might arguably constitute a group boycott in some broad sense, I do not believe they did so with the specific intent to eliminate competition as required by the statute nor do I agree with the majority that such intent can be inferred from the evidence.
According to the majority, anticompeti-tive intent “may be inferred from the defendant’s conduct and circumstances.” The majority points to the fact that the contracts between UP & L and defendants were not competitively bid as is the usual practice in selecting security companies. This leads my colleagues to the conclusion that the intent of these defendants was none other than to eliminate “competition.”
If one looks at what defendants did and considers the market in which they did it,6 it is obvious they had no intent to eliminate competition. The trial court, in instructing the jury, narrowly defined the relevant market in this case as “among vendors of security guard services to Utah Power and Light,” notwithstanding the fact that other security guard companies competing for *822the UP & L contract were also competing for contracts throughout the state, or even worldwide. However, there was no evidence that the security needs of UP & L were somehow so unique that guard service vendors competing for UP & L’s business were necessarily different — and fewer — than guard service vendors generally, who of course are able to provide security services for everything from large utilities to retail stores, apartments, warehouses, churches, banks, and so on. Nor was there evidence to show that UP & L was such a major purchaser in the local security service market that failure to secure that contract would necessarily imperil any of defendants’ competitors.
While it can perhaps be inferred that the defendants intended to eliminate other security companies from competition for the UP & L contract, it simply cannot be inferred that they intended to eliminate these companies from competition in any meaningful marketplace, which is what the antitrust laws are designed to prevent. “The Sherman Act was enacted to protect competition in the marketplace. It was not designed, and has never been interpreted, to reach all business practices, unfair or otherwise, damaging to individual companies.” Cascade Cabinet Co. v. Western Cabinet & Millwork, 710 F.2d 1366, 1374 (9th Cir.1983). Other security companies were not hindered by defendants in competing for security guard contracts. They were merely deprived of the UP & L contract. While this conduct is certainly not commendable,7 “the use of unfair means resulting in the substitution of one competitor for another without more does not violate the antitrust laws.” Manufacturing Research Corp. v. Greenlee Tool Co., 693 F.2d 1037, 1043 (11th Cir.1982).
CONCLUSION
Commercial bribery does not criminally violate the Utah antitrust laws. Defendants’ conduct does not constitute a group boycott. Even if defendants’ conduct can somehow be shoehorned into the “group boycott” pigeonhole, there was no evidence to prove a specific intent to eliminate competition, and the fair inferences point the other way. I would reverse the antitrust convictions and remand for resentencing on the other crimes for which defendants were properly convicted.

. Section 2(c) of the Robinson-Patman Act, 15 U.S.C.A. § 13(c) (1973), expressly makes accepting a "commission” without performing real work in connection with a sale of goods illegal under federal law.

. The majority relies on federal cases rejecting the "numerosity" requirement of group boycott for the view that something less is now needed to constitute a group boycott. While it is true that these cases have dropped the "numerosity" requirement, i.e., concern about the number of conspirators in a horizontal relationship, they nonetheless still require the other elements of a group boycott: concerted refusal to deal, enlistment of others, and a target. See, e.g., Com-Tel, Inc. v. Oukane Corp., 669 F.2d 404, 414 (6th Cir.1982).

. The majority suggests that a boycott under their "general definition” differs from the term group boycott as it evolved under the per se doctrine. Ironically, their definition was taken from one of the landmark cases defining a per se illegal group boycott. The definition extracted from the Supreme Court’s opinion was one which the Court offered to explain the term “boycott” in common parlance. St. Paul Fire & Marine Ins. Co. v. Barry, 438 U.S. 531, 545-46, 98 S.Ct. 2923, 2932, 57 L.Ed.2d 932 (1978).

. Whereas group boycotts are subject to a per se rule of illegality, exclusive dealing arrangements are tested by a "rule of reason” standard. Twin City Sportservice, Inc. v. Charles O. Finley & Co., 676 F.2d at 1302. The focus of this test is to first find a relevant market and then assess whether competition has been foreclosed in a substantial share of the relevant market. Antitrust liability is not imposed without proof of actual harm to competition. The purpose of this test is to determine the anticompetitive "effects” of the exclusive contract, id., rather than the anticompetitive "intent” as required by the Utah statute.

. The memorandum decision is reprinted at Note, Criminal Antitrust Action in Utah: State v. Fletcher, 1 B.Y.U.J.Pub.L. 229, 251-55 (1986). The decision was written in the context of a denial of a motion to dismiss. While the decision simply permitted the state to proceed to try its case before a jury, the trial court shared the majority’s view that intent is the controlling element of a “group boycott” charge.
The theme of the cases cited by both parties is that the mere existence of an exclusive vertical contract is not a "group boycott” prohibited by the antitrust laws. However, the State has alleged and should be allowed to prove that the defendants had specific anti-competitive intent. This can not be inferred from the mere existence of an exclusive vertical deal, but by anticompetitive, illegal behavior an otherwise legal business decision can become an unlawful group boycott under the Utah Antitrust Act. The State should have the opportunity to establish that the defendants had a specific intent to eliminate access to the security guard market as the goal of their exclusive dealing and that no legitimate business purpose or result was intended.
*821Id. at 254-55.

. "[A]n antitrust policy divorced from market considerations would lack any objective benchmarks.” Continental T. V. Inc. v. GTE Sylvannia, Inc., 433 U.S. 36, 53 n. 21, 97 S.Ct. 2549, 2559 n. 21, 53 L.Ed.2d 568 (1977). Contrary to the majority’s characterization, I have not urged full-blown market analysis of the sort typical when applying the rule of reason. Such analysis is indeed unnecessary where an antitrust violation of the per se variety is at issue. However, I think a cursory peek at the relevant market is instructive in evaluating the likelihood that defendants had as their intent the elimination of competition.

. Fortunately, such objectionable conduct is readily punished under our commercial bribery statute. Where the conduct is especially egregious, it can also, as in this case, be reached under the racketeering statute. Defendants did a bad thing and they should suffer the consequences. Their punishment, however, should be for the crimes they committed, not those they might have committed had the Legislature chosen a different approach to antitrust criminality.