Court Opinion

ID: 9431336
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:32:03.047992+00
Date Added: 2024-06-11T17:16:53.702443
License: Public Domain

Justice White,
with whom Justice O’Connor joins, dissenting.
Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U. S. 127 (1961), held that the Sherman Act should not be construed to forbid joint efforts by railway companies seeking legislation that would disadvantage the trucking industry. These efforts for the most part involved a public relations campaign rather than direct lobbying of the lawmakers and were held not subject to antitrust challenge because of the fundamental importance of maintaining the free flow of information to the government and the right of the people to seek legislative relief, directly or indirectly. Mine Workers v. Pennington, 381 U. S. 657 (1965), and California Motor Transport Co. v. Trucking Unlimited, 404 U. S. 508 (1972), applied the rule to efforts to seek executive action and to administrative and adjudicative proceedings.
The Court now refuses to apply the rule of these cases to the participants in those private organizations, such as the National Fire Protection Association (NFPA), that regularly propound and publish health and safety standards for a variety of products and industries and then present these codes to state and local authorities for the purpose of having them enacted into law. The NFPA and those participating in the code-writing process will now be subject to antitrust liability if their efforts have anticompetitive effects and do not withstand scrutiny under the rule of reason. Believing that this result is a misapplication of the Noerr decision and an improvident construction of the Sherman Act, I respectfully dissent..
*512This case presents an even stronger argument for immunity than did Noerr itself. That decision turned on whether the design or purpose of the conduct was to obtain or influence the passage or enforcement of laws. The Court concedes that petitioner’s actions in this case constituted a “genuine effort to influence governmental action,” ante, at 503, and that this was its “ultimate aim,” ante, at 504. In Noerr, the publicity campaign was dispersed widely among the public in a broad but necessary diluted attempt to move public opinion in hopes that government officials would take note and respond accordingly. The campaign apparently had some influence on the passage of tax laws and other legislation favorable to the railroads in New Jersey, New York, and Ohio, and procured the Governor’s veto of a bill that had been passed in Pennsylvania. See 365 U. S., at 130; see also 155 F. Supp. 768, 777-801 (ED Pa. 1957). Here, the NFPA actually drafted proposed legislation in the form of the National Electrical Code (NEC) and presented it countrywide. Not only were petitioner’s efforts in this case designed to influence the passage of state laws, but there was also a much greater likelihood that they would be successful than was the case in Noerr. This is germane because it establishes a much greater likelihood that the “purpose” and “design” of petitioner’s actions in this case was the “solicitation of governmental action with respect to the passage and enforcement of laws,” 365 U. S., at 138.
Rather than directly confronting the severe damage that today’s decision does to the Noerr doctrine, the majority asserts that the “ultimate aim” of petitioner’s efforts “is not dis-positive.” Ante, at 504. That statement cannot be reconciled with the statements quoted earlier from Noerr, where it was held that even if one of the major purposes, or even the sole purpose, of the publicity campaign was “to destroy the truckers as competitors,” 365 U. S., at 138, those actions were immunized from antitrust liability because ultimately they were “directed toward obtaining governmental action,” *513id., at 140. The majority later doubles back on this statement, and suggests that it is important in this case that “petitioner was at least partially motivated by the desire to lessen competition, and . . . stood to reap substantial economic benefits from making it difficult for respondent to compete.” Ante, at 509. It need hardly be said that all of this was also true in Noerr. Nobody condones fraud, bribery, or misrepresentation in any form, and other state and federal laws ensure that such conduct is punishable. But the point here is that conduct otherwise punishable under the antitrust laws either becomes immune from the operation of those laws when it is part of a larger design to influence the passage and enforcement of laws, or it does not. No workable boundaries to the Noerr doctrine are established by declaring, and then repeating at every turn, that everything depends on “the context and nature of” the activity, ante, at 504, 505, 506, 509, if we are unable to offer any further guidance about what this vague reference is supposed to mean, especially when the result here is so clearly wrong as long as Noerr itself is reputed to remain good law. One unfortunate consequence of today’s decision, therefore, is that district courts and courts of appeals will be obliged to puzzle over claims raised under the doctrine without any intelligible guidance about when and why to apply it.
If there were no private code-writing organizations, and state legislatures themselves held the necessary hearing and wrote codes from scratch, then business concerns like Allied, together with their friends, could jointly testify with impunity about the safety of various products, even though they had anticompetitive motives in doing so. This much the majority concedes, as it does that the major purpose of the code-writing organizations is to influence legislative action. These days it is almost a foregone conclusion that the vast majority of the States will adopt these codes with little or no change. It is untenable to consider the code-writing process by such organizations as the NFPA as too far removed *514from the legislative process to warrant application of the doctrine announced in Noerr and faithfully applied in other cases. This was the view of Judge Sneed and his colleagues on the Ninth Circuit in Sessions Tank Liners, Inc. v. Joor Mfg., Inc., 827 F. 2d 458 (1987), and the reasons they gave for applying Noerr in this context are much more persuasive than anything to the contrary the majority now has to offer.
The Court’s decision is unfortunate for another reason. There are now over 400 private organizations preparing and publishing an enormous variety of codes and standards. State and local governments necessarily, and as a matter of course, turn to these proposed codes in the process of legislating to further the health and safety of their citizens. The code that is at issue in this case, for example, was adopted verbatim by 25 States and the District of Columbia; 19 others adopted it with only minor changes. It is the most widely disseminated and adopted model code in the world today. There is no doubt that the work of these private organizations contributes enormously to. the public interest and that participation in their work by those who have the technical competence and experience to do so should not be discouraged.
The Court’s decision today will surely do just that. It must inevitably be the case that codes such as the NEC will set standards that some products cannot satisfy and hence in the name of health and safety will reduce or prevent competition, as was the case here. Yet, putative competitors of the producer of such products will now think twice before urging in the course of the code-making process that those products not be approved; for if they are successful (or even if they are not), they may well become antitrust defendants facing treble-damages liability unless they can prove to a court and a jury that they had no evil motives but were merely “presenting and vigorously arguing accurate scientific evidence before a nonpartisan private standard-setting body,” ante, at 510 (though with the knowing and inevitable result of eliminating competition). In this case, for example, even *515if Allied had not resorted to the tactics it employed, but had done no more than successfully argue in good faith the hazards of using respondent’s products, it would have inflicted the same damage on respondent and would have risked facing the same antitrust suit, with a jury ultimately deciding the health and safety implications of the products at issue.
The Court’s suggestion that its decision will not affect the ability of these organizations to assist state and local governments is surely wrong. The Court’s holding is “that at least where, as here, an economically interested party exercises decisionmaking authority in formulating a product standard for a private association that comprises market participants, that party enjoys no Noerr immunity from any antitrust liability flowing from the effects the standard has of its own force in the marketplace.” Ante, at 509-510. This description encompasses the structure and work of all such organizations as we now know them. The Court is saying, in effect, that where a private organization sets standards, the participants can be sued under the antitrust laws for any effects those standards have in the marketplace other than those flowing from their adoption into law. But the standards will have some effect in the marketplace even where they are also adopted into law, through publicity and other means, thus exposing the participants to liability. Henceforth, therefore, any private organization offers such standards at its peril, and without any of the breathing room enjoyed by other participants in the political process.
The alternative apparently envisioned by the Court is that an organization can gain the protection of the Noerr doctrine as long as nobody with any economic interest in the product is permitted to “exercis[e] decisionmaking authority” (i. e., vote) on its recommendations as to particular product standards. Insisting that organizations like the NFPA conduct themselves like courts of law will have perverse effects. Legislatures are willing to rely on such organizations precisely because their standards are being set by those who *516possess an expert understanding of the products and their uses, which are primarily if not entirely those who design, manufacture, sell, and distribute them. Sanitizing such bodies by discouraging the active participation of those with economic interests in the subject matter undermines their utility.
I fear that exposing organizations like the NFPA to antitrust liability will impair their usefulness by inhibiting frank and open discussion of the health and safety characteristics of new or old products that will be affected by their codes. The Court focuses on the tactics of petitioner that are thought to have subverted the entire process. But it is not suggested that if there are abuses, they are anything more than occasional happenings. The Court does speculate about the terrible practices that applying Noerr in this context could lead us to condone in future cases, ante, at 503-504, but these are no more than fantasies, since nothing of the sort occurred in the wake of Noerr itself. It seems to me that today’s decision is therefore an unfortunate case of overkill.
Of course, the Noerr immunity is not unlimited and by its terms is unavailable where the alleged efforts to influence legislation are nothing but a sham. As the Ninth Circuit held, this limitation is enough to guard against flagrant abuse. In any event, occasional abuse is insufficient ground to render the entire process less useful and reliable. I would reverse the judgment below and remand for further proceedings.