Court Opinion

ID: 9468380
Source: CourtListenerOpinion
Date Created: 2023-08-05 02:13:23.853987+00
Date Added: 2024-06-11T17:38:42.650289
License: Public Domain

WINTER, Chief Judge,
concurring and dissenting:
In my view, the majority applies too narrow a definition of “concerted activity” to the facts of this case. I would conclude that the district court erred in granting summary judgment for defendants on Hester’s claims under § 1 of the Sherman Act. From the majority’s conclusion to the contrary, I respectfully dissent.1
I.
As the majority points out, it is plain that Martindale-Hubbell’s restrictive advertising *437policies result in a restraint of trade. The impact of that restraint on Mr. Hester and others in similar positions is self-evident. Martindale-Hubbell is the only general legal directory in the nation and the only law list of any kind that publishes ratings of listed lawyers. Its preeminence as a tool in securing legal services in distant places and in referring legal business to out-of-town lawyers is well-known among legal practitioners. Under current advertising policies, Martindale-Hubbell denies Hester and others a chance to list their names and certain other data in its widely-used Biographical Section, relegating their listings to the relative obscurity of the fine print in its Geographical Section.
The exclusion of Hester and others results from Martindale-Hubbell’s system of “rating” attorneys. In order to purchase a listing in the Biographical Section, an attorney must receive an “av” or a “bv” rating or practice in association with a firm which has received such a rating. A lawyer must practice at least five years to receive a “bv” rating and ten years to receive an “av.” To determine an attorney’s rating, Martindale-Hubbell solicits assessments of the legal skills, industry and trustworthiness of individual lawyers by addressing questionnaires to judges and attorneys in the local area where the individual practices.
There can be no doubt that the impact of this policy is to lessen competition. Long-established firms receive listings not only for their more experienced lawyers but for their newest associates as well. Those lawyers who have practiced at least five years and who are sufficiently regarded by their professional colleagues are given the privilege of effective advertising with the consequence of increasing their business. The young solo practitioner, the experienced lawyer beginning to practice in a new locality even after years of experience elsewhere,2 and the maverick who has forfeited an objective appraisal of his qualifications by his colleagues are denied this opportunity. The policy thus permits established firms and lawyers to increase their competitive advantage and compounds the already difficult task of new entrants seeking to sell their services in local markets.
II.
Despite the obvious restraint of trade which results from Martindale-Hubbell’s advertising policy, the majority finds that policy beyond the reach of § 1 of the Sherman Act because it represents a unilateral decision on the part of Martindale-Hubbell and does not result from unlawful concerted activity. I believe the majority errs by applying a definition of “concerted activity” considerably narrower than that approved by the Supreme Court in Albrecht v. The Herald Co., 390 U.S. 145, 88 S.Ct. 869, 19 L.Ed.2d 998 (1968), the Court’s most recent treatment of this issue.
The majority finds no evidence of concerted activity because there is no showing that “the ABA required, or even suggested, that Martindale-Hubbell condition the right to advertise in its publication on the attainment of a certain rating.” At 436. Under Albrecht, however, it is irrelevant that one party unilaterally formulated a policy restraining trade, if he sought and received the assistance of another party which acted with knowledge of the restraint. In Albrecht, a newspaper publisher required its independent distributors to sell its papers at a price no higher than it suggested. When Albrecht, one of its distributors, raised his prices, the publisher hired Milne Circulation Sales, Inc. to undertake a telephone solicitation campaign designed to convince Albrecht’s customers to switch to a new distributor. The publisher also authorized George Kroner, another distributor, to deliver papers to customers who decided to remove themselves from Albrecht’s route. Both Kroner and Milne were aware that the publisher sought to enforce its retail pricing policy.
*438The Supreme Court found illegal concerted activity in this combination, despite the fact that neither Kroner nor Milne “required” or “suggested” resale price maintenance or participated in any way in the formulation of the publisher’s pricing policy. To establish concerted activity within the meaning of Sherman Act § 1, it was sufficient that Kroner and Milne were aware of the anticompetitive purpose of the publisher’s scheme and that they “materially aided in the accomplishment” of its plan. 390 U.S. at 150, 88 S.Ct. at 871.3
Under the Albrecht standard, there is in this case undisputed evidence of concerted activity. For decades before commencement of this suit, Martindale-Hubbell pursued an advertising policy with obvious anticompetitive effects. Because lawyers were forbidden by codes of ethics such as that promulgated by the North Carolina State Bar from advertising in other than “reputable” law lists, and because lists certified by the ABA were conclusively determined to be “reputable,” approval by the ABA of the Martindale-Hubbell scheme was necessary to the very existence of the publication.4 Although it possessed the power, as a practical matter, to require Martindale-Hubbell to change its advertising policy in any way it saw fit, and although it was undoubtedly aware of the anticompetitive impact of Martindale-Hubbell’s policies, the ABA lent its stamp of approval to that policy for over forty years.
The ABA’s support of Martindale’s policy went beyond its annual certification. The ABA Committee on Ethics issued Informal Opinion 55 which permits attorneys to respond to questions asked by a law list publisher in the course of rating other attorneys. Because Martindale-Hubbell has long been the only law list publishing ratings of listed lawyers, the ABA must have issued Informal Opinion 55 with the specific intention of facilitating the very practices Hester now challenges as a restraint of trade.
In the language of Albrecht, the ABA, in my view, “materially aided” Martindale-Hubbell in pursuing a policy with known anticompetitive effects, by providing the annual certification necessary to the continued existence of that policy and by granting the approval necessary for lawyers to participate in the rating of their competitors. Under the alternative formulation of United States v. Parke, Davis & Co., 362 U.S. 29, 44, 80 S.Ct. 503, 511, 4 L.Ed.2d 505 (1960), Martindale-Hubbell maintained its restrictive policy by means in addition to the “mere announcement of [the] policy and the simple refusal to deal.” It maintained its exclusionary policy by seeking and receiving approval of that policy and assistance in carrying it out from the ABA, whose practical power to control attorney advertising made it an indispensable partner in the venture. This symbiotic relationship between the ABA and Martindale-Hubbell offers a classic example of the danger which led Congress in 1890 to focus its attention on concerted actions in restraint of trade. By acting in concert, the parties created a restraint considerably more effective than that either could have created on its own.5
*439To avoid the result Albrecht requires, defendants advance two related arguments. First, they contend, the ABA would have certified Martindale-Hubbell whether or not it pursued the restrictive policy challenged here. This contention cannot avail defendants, however, any more than it would have aided Milne Circulation Sales, Inc. to point out that it would have solicited customers for The Herald whether for the purpose of punishing Albrecht or simply to increase circulation. What matters is that the ABA, like Milne, lent material assistance to a pursuit which it knew would result in a restraint of trade.
Second, in what is really a restatement of the same argument, defendants suggest that ABA certification of Martindale-Hubbell represents only a general approval of the publication as “reputable,” and in no way reflects the ABA’s judgment as to the exclusionary advertising policy. Even if this argument made any difference under the Albrecht rationale, I would find that the record fails to support the contention as a factual matter. In fact, ABA approval of Martindale represents much more than a generalized assessment that the publication is “reputable.” In 1941, the Standing Committee on Law Lists promulgated a series of specific Rules and Standards which it has since applied in certifying law lists. Among other things, those rules prohibit the giving of “preferential prominence . . . to the name of any listed attorney or attorneys, by different size or character of type . . .. ” Rule and Standard 3. That rule, on its face, would appear to prohibit the very practice challenged here: the printing of selected names in larger print in a Biographical Section while others are listed in smaller print in the Geographical Section. Because the rules also permit the printing of “professional cards” in a Biographical Section of a law list, Rule and Standard 3 has apparently been interpreted to permit Martindale-Hubbell’s practice. Regardless of the correctness of that interpretation, the fact remains that in order to certify Martindale-Hubbell, ABA representatives had to consider and approve the specific restraint challenged in this lawsuit.
III.
In concluding that the facts of this case would permit the conclusion that the requisite concerted activity to constitute an antitrust violation was present and thus summary judgment for defendants was in error, I am constrained to add that this conclusion reflects nothing regarding the possible motives of the defendants. Whether Martin-dale-Hubbell or the ABA actually desired to restrain competition among lawyers, or whether they sought only to uphold professional standards and protect the public from deceptive advertising, the antitrust inquiry is the same. Defendants would violate § 1 by knowingly engaging in concerted activity which has the effect of restraining competition, even though the motive behind the action may have borne no relation to competition or may have been wholly altruistic. *440See, National Society of Professional Engineers v. United States, 435 U.S. 679, 98 S.Ct. 1355, 55 L.Ed.2d 637 (1978); Silver v. New York Stock Exchange, 373 U.S. 341, 347, 83 S.Ct. 1246, 1251, 10 L.Ed.2d 389 (1963).

. Because N.C.Gen.Stat. § 75-1 is the state equivalent of Sherman Act §1,1 would reverse the dismissal of Hester’s claim under that section as well. I concur in the majority’s decision to affirm summary judgment for defendants with regard to Hester’s other claims.

. Hester fits in this category himself. He graduated from law school in 1950, but served as a lawyer in the armed services until 1972. Even had he been in private practice elsewhere before moving to Hickory, North Carolina, Hester would have been excluded. Under Martindale-Hubbell’s policy, ratings are not automatically transferable from one locality to another.

. This view of concerted activity was not new even with Albrecht. Eight years earlier, the Court had held that “an illegal combination to fix prices results if a seller suggests resale prices and secures compliance by means in addition to the ‘mere announcement of his policy and the simple refusal to deal.’ ” Albrecht v. The Herald Co., 390 U.S. 145, 149, 88 S.Ct. 869, 871, 19 L.Ed.2d 998 (1968), quoting United States v. Parke, Davis & Co., 362 U.S. 29, 44, 80 S.Ct. 503, 511, 4 L.Ed.2d 505 (1960).

. Martindale-Hubbell disputes this point, claiming that even without ABA certification it could prove itself to be “reputable” by showing that “its management [and] contents are [not] likely to be misleading or injurious to the public or to the profession.” DR 2-102(A)(6). For all practical purposes, however, ABA certification was the only route to “reputability,” before the 1978 amendments to DR 2-102(A)(6), because a lawyer publishing in a non-certified list would take the chance of its later being found not “reputable.” It is probably for this reason that no non-ABA sanctioned list was ever published before this lawsuit.

. Even under a more restrictive definition of “concerted activity,” I would have serious reservations about affirming summary judgment on the § 1 claim. Actual agreements to restrain trade are seldom proved by direct evidence; more often they must be inferred from all the circumstances of a particular case. *439Drawing inferences favorable to Hester, a jury might find an illegal agreement in this case. There was certainly ample opportunity for conspiracy during the parties’ forty-year course of dealing. The ABA regularly dispatched representatives to Martindale-Hubbell’s offices to inspect the operation of its rating system. The record discloses at least one instance where a Martindale-Hubbell vice president attended the annual meeting of the Standing Committee on Law Lists. In addition, one could conclude that the ABA had a motive to promote the restraint alleged, since it favors the very practitioners who hold most positions of power and influence in the ABA. In this regard, it is worth noting that all members of the Standing Committee at the time Hester first complained of Martindale-Hubbell’s policies were lawyers whose names appeared in the Biographical Section of the directory.
In addition, even if the district court was correct in finding no concerted action between Martindale-Hubbell and the ABA, it erred in dismissing sua sponte the § 1 claim against the ABA. The ABA is itself a voluntary association of competitors. It need not join with any other party for its actions to constitute “concerted activity” within the meaning of the Sherman Act. See National Society of Professional Engineers v. United States, 435 U.S. 679, 98 S.Ct. 1355, 55 L.Ed.2d 637 (1978). To establish the liability of the ABA, it was sufficient to show that the Association knowingly undertook an action which had the effect of restraining competition.