Court Opinion

ID: 8893657
Source: CourtListenerOpinion
Date Created: 2022-11-26 23:36:14.704544+00
Date Added: 2024-06-11T17:07:20.940004
License: Public Domain

CRAVEN, Circuit Judge
(concurring and dissenting):
I would affirm the judgment of the district court both in holding the Fair-fax County Bar Association liable for violating section 1 of the Sherman Act, 15 U.S.C. § 1, and in exonerating the Virginia State Bar. Thus I concur in the result the majority reaches as to the State Bar, and dissent as to Fairfax County Bar Association.
I take it, as I read the majority opinion, that we all agree that Judge Bryan correctly stated the rule of the Sherman Act, were it to govern this case.
Minimum fee schedules are a form of price fixing and therefore inconsistent with antitrust statutes prohibiting anti-competitive activities.
“Price fixing is per se an unreasonable restraint of trade. It is not for the courts to determine whether in particular settings price-fixing serves an honorable or worthy end. An agreement, shown either by adherence to a price schedule or by proof of consensual action fixing the uniform or minimum price, is itself illegal under the Sherman Act, no matter what end it was designed to serve.” United States v. Real Estate Boards, 339 U.S. 485, 489, 70 S.Ct. 711, 714, 94 L.Ed. 1007 (1950).
355 F.Supp. at 493. The majority has concluded, however, that the Sherman Act applies to neither the State Bar nor Fairfax.
They say that the Virginia State Bar may lawfully fix prices for legal services —not because it is a sufficiently independent regulatory agency to come within the Parker exemption 1 — but because it is “actively supervised” by the Supreme Court of Virginia. Majority opinion 'at 11. In so holding, the majority relies upon a stipulation that was not adopted by the district judge:
16. The Virginia Statutes have given the Supreme Court of Virginia authority to make questions, involving suggested fee schedules and economic reports of the State Bar and of Local Bar Associations questions of ethics under the laws of Virginia.
In refusing the stipulation, the district court expressly noted that it was a conclusion of law rather than a fact. 355 F.Supp. at 492 n. 2 2 He also intimated *21that he had some difficulty seeing what, if anything, a minimum fee schedule has to do with ethics. Id. at 496 n. 4. These questions and others like them can best be left to the Supreme Court of Virginia. Whatever that court may think of the power claimed for it to equate price fixing with legal ethics, I think it will be surprised to learn that it is engaged in active supervision of the State Bar’s implementation of minimum fee schedules in Virginia. I find nothing in the record to suggest that the Virginia court even knew that Fairfax County Bar Association had a minimum fee schedule, or that it approved it either directly or indirectly through the State Bar.
I would exonerate the State Bar not because it falls within the Parker exemption but for the second reason advanced by the district judge: the exceedingly “minor role” of the State Bar in this matter. He found that the State Bar did not promulgate the minimum fee schedule, did not endorse or approve it, never undertook to discipline any attorney for violating it, and never contemplated any such action. All the State Bar ever did, apparently, was to suggest that local associations might wish to adopt a minimum fee schedule and to circulate reports on the schedules that local bar associations had adopted. Such minimal participation seems to me insufficient to impose Sherman Act liability upon the State Bar. See United States v. National Ass’n of Real Estate Boards, 339 U.S. 485, 494-496, 70 S.Ct. 711, 94 L.Ed. 1007 (1950).
As to Fairfax County Bar Association, I am in complete agreement with the majority that the local association cannot and does not qualify for the Parker exemption. Nevertheless they exonerate Fairfax on two grounds: (1) that the practice of law is a learned profession rather than a trade or business, and that lawyers are thus exempt from the Sherman Act’s prohibition of price fixing; and (2) that the practice of law in Fairfax County, and more especially the investigation and certification of land titles in that county, do not sufficiently affect interstate commerce to invoke the Sherman Act.
If the majority is correct that interstate commerce is not sufficiently affected, that is the end of the matter and there is no occasion or necessity to apply the Parker exemption to exonerate the State Bar and the so-called learned profession exemption to exonerate Fairfax. I believe, however, that Fairfax County minimum fees have a sufficient impact on interstate commerce. The applicable standard was stated succinctly in Burke v. Ford, 389 U.S. 320, 88 S.Ct. 443, 19 L.Ed.2d 554 (1967):
[I] t is well established that an activity which does not itself occur in interstate commerce comes within the scope of the Sherman Act if it substantially affects interstate commerce.
Id. at 321 (emphasis in original).
The district court found as a fact that a significant portion of funds furnished for the purchasing of homes in Fairfax County comes from outside the State of Virginia. His finding is supported by substantial evidence. One sample taken from the Office of Recorder of Deeds of Fairfax County indicated that $75,000,000 out of $136,000,000 loaned for mortgages was loaned by persons or corporations residing outside or incorporated outside of Virginia. During 1968-72 more than $570,000,000 of loans was either guaranteed by the United States Veterans Administration or insured by the United States Department of Housing and Urban Development, both of which are headquartered in the District of Columbia: In addition to the interstate commerce in loans, there was evidence tending to show substantial interstate movement and travel of persons into northern Virginia. Indeed, the evi*22dence tended to show that more than 30 percent of the population of Arlington County, Fairfax County, and the city of Alexandria in 1970 had come from areas outside Virginia since the year 1965. The district judge accepted “uncontradieted evidence” that a large percentage of persons who live in Fairfax County work outside of Virginia. We may judicially notice, I think, that Fairfax County is one of Washington’s bedrooms. The cumulation of these facts persuades me that housing in Fairfax County is a commodity offered for sale in interstate commerce. It cannot realistically be considered a purely local market.
The evidence also demonstrates that the minimum, fee schedules affect the cost of housing in Fairfax County. The district court found that all or nearly all money lenders require title examination and title insurance. Title search fees thus become a part of the cost of housing. The price that thousands of employees in the District of Columbia have to pay for housing in Fairfax County, Virginia, has, it seems to me, a direct, immediate, and substantial effect on interstate commerce. It is irrelevant that the restraint occurs only in Fairfax County. I would have thought it beyond question that the Sherman Act encompasses local restraints that directly affect the cost of a commodity offered for sale in interstate commerce. This was the thrust of the holding in Mandeville Island Farms, Inc. v. American Crystal Sugar Co., 334 U.S. 219, 68 S.Ct. 996, 92 L.Ed. 1328 (1948), where the Court said:
[T]he inquiry whether the restraint occurs in one phase or other, interstate or intrastate, of the total economic process is now merely a preliminary step, except for those situations in which no aspect of or substantial effect upon interstate commerce can be found in the sum of the facts presented.
Id. at 234. In United States v. Women’s Sportswear Manufacturers Ass’n, 336 U.S. 460, 464, 69 S.Ct. 714, 1005, 93 L.Ed. 805 (1949), Mr. Justice Jackson, writing for the Court, stated:
The source of the restraint may be intrastate, as the making of a contract or combination usually is; the application of the restraint may be intrastate, as it often is; but neither matters if the necessary effect is to stifle or restrain commerce among the states. If it is interstate commerce that feels the pinch, it does not matter how local the operation which applies the squeeze.
I believe the district court’s findings of fact are not clearly erroneous and compel the conclusion that an agreement to fix fees that infect the cost of housing in Fairfax County has a sufficient impact on interstate commerce to come within the Sherman Act. The Supreme Court has said that “Congress, in passing the Sherman Act, left no area of its constitutional power unoccupied; it ‘exercised all the power it possessed.’ ” United States v. Frankfort Distilleries, Inc., 324 U.S. 293, 298, 65 S.Ct. 661, 664, 89 L.Ed. 951 (1945). I believe it is much too late to dismiss as “expansive concepts of federal power” an interpretation of the commerce clause that would embrace the fee schedules involved here. Since the modern era of the commerce clause began in 1937 with NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed.2d 893 (1937),3 the Supreme Court has consistently approved congressional regulation of local activities that have a potential for affecting interstate commerce.4 Our *23interpretation of the Sherman Act should keep pace with these decisions. See United States v. South-Eastern Underwriters Ass’n, 322 U.S. 533, 557, 64 S.Ct. 1162, 88 L.Ed. 1440 (1944).
Nor can I accede to the view that the legal profession is exempt from the Sherman Act. The majority states that two cases decided by the United States Supreme Court hold “that one engaged in the practice of a profession ‘follow [s] a profession and not a trade.’ ” Majority opinion at 13. They are mistaken. The Supreme Court has never so held and indeed has refused to “intimate an opinion on the correctness of the application of the term [trade] to the professions.” United States v. National Ass’n of Real Estate Boards, 339 U.S. 485, 491-492, 70 S.Ct. 711, 715, 94 L.Ed. 1007 (1950); American Medical Ass’n v. United States, 317 U.S. 519, 528, 63 S.Ct. 326, 87 L.Ed. 434 (1943). Nor has any inferior federal court ever so held.5 Nothing supports the so-called “learned profession” exemption except dicta from cases decided in an era of judicial antagonism to governmental regulation of business and commerce. FTC v. Raladam Co., 283 U.S. 643, 51 S.Ct. 587, 75 L.Ed. 1324 (1931), involved the Federal Trade Commission’s efforts to regulate the manufacturer and seller of an obesity cure. It had nothing to do with any learned profession, but Mr. Justice Sutherland included in his opinion the dictum that medical practitioners “follow a profession and not a trade . . . .” Id. at 653.
The other ease said to be the source of the “learned profession” exemption is Federal Baseball Club v. National League of Professional Baseball Clubs, 259 U.S. 200, 42 S.Ct. 465, 66 L.Ed. 898 (1922). In the course of deciding that the Sherman Act did not apply to organized baseball, Mr. Justice Holmes found occasion to state that not only is baseball not “trade or commerce in the commonly accepted use of those words,” but that any “personal effort, not related to production, is not a subject of commerce.” 6 He then repeated illustrations given by the court below:
[A] firm of lawyers sending out a member to argue a case, or the Chautauqua lecture bureau sending out lecturers, does not engage in such commerce because the lawyer or lecturer goes to another State.
Id. at 209.
The last and final support for the so-called “learned profession” exemption is found in a 1932 opinion by Mr. Justice Sutherland who quotes with approval from an opinion by Mr. Justice Story, as set out in the majority opinion at footnote 35. Not only was the reference to learned professions irrelevant to the decision in the case, but it is clear from the context that Justice Story’s language was used to broaden rather than constrict the definition of the word “trade.” *24Atlantic Cleaners & Dyers, Inc. v. United States, 286 U.S. 427, 52 S.Ct. 607, 76 L.Ed. 1204 (1932).
Upon these three dicta the majority erect the “learned profession” exemption from the Sherman Act. I am respectfully of the opinion that there is no such exemption and that none was ever intended by the Congress. One of the slender, supports upon which the doctrine is said to rest has itself been destroyed by the Supreme Court. In Radovich v. National Football League, 352 U.S. 445, 77 S.Ct. 390, 1 L.Ed.2d 456 (1957), the Supreme Court had occasion to reexamine Mr. Justice Holmes’ opinion in Federal Baseball. In refusing to extend the baseball umbrella to cover football, Mr. Justice Clark explained that the Court had adhered to the baseball exemption from the Sherman Act “because it concluded that more harm would be done in overruling Federal Baseball than in upholding a ruling which at best was of dubious validity.” Id. at 450. In virtually conceding that it is nonsense to have baseball outside the Sherman Act and football within it, Mr. Justice Clark noted, “were we considering the question of baseball for the first time upon a clean slate we would have no doubts.” Id. at 452.7
The Court’s repudiation of the rationale for Federal Baseball and its twice-repeated refusal to express any opinion on the learned professions leave the claimed exemption without any affirmative support in Supreme Court cases. I do not find the dicta from another era persuasive, much less compelling, and I am unable to perceive any reason why lawyers should be free to fix prices when carpenters cannot. In the opinion below, Judge Bryan said:
The scope of the statutory language in the Sherman Act is so expansive that courts have been reluctant to find exceptions. The language explicitly states that “every contract, combination or conspiracy which restrains commerce among several states is unlawful.” (Emphasis supplied.) Illustrative of this reluctance is the refusal to extend baseball’s exempt status to other professional sports . The fact that specific exemptions are clearly delineated suggests that ambiguities should be resolved in favor of inclusion. This is especially true where price-fixing is involved since it has been declared both pernicious and lacking in any redeeming social value.
355 F.Supp. at 493 [citations omitted]. I agree with his analysis. I do not think this court should create another exemption that will almost certainly lead to the same problems that Federal Baseball has given the Supreme Court. Members of other “learned professions” will no doubt seek the same exemption, and the label will be of little help in deciding whether to sanction price fixing by architects, marriage counselors, dentists, and other groups that operate under ethical standards.
[A] rticulating the reasons lawyers need a fee schedule, as distinguished from other groups which perform public services, might present some embarrassing difficulties and lead the courts into a quagmire in determining the relative societal importance of all groups seeking exemption.
Note, The Wisconsin Minimum Fee Schedule: A Problem of Antitrust, 1968 Wisconsin L.Rev. 1237, 1257 (footnotes omitted).
Although the practice of law is a learned profession, it is pursued for the purpose (among others) of earning a living. To that extent I think it falls within the strictures of the Sherman Act, and I would affirm the decision below.

. Parker v. Brown, 317 Ü.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943).

. The statute that is claimed to give the Supreme Court authority to prescribe fee schedules does not mention fees at all.
The Supreme Court may, from time to time, prescribe, adopt, promulgate and amend rules and regulations:
(a) Defining the practice of law.
(b) Prescribing a code of ethics governing the professional conduct of attorneys-at-law including the practice of law or patent law through professional law corporations, professional associations and partnerships, and a code of judicial ethics.
(c) Prescribing procedure for disciplining, suspending, and disbarring áttorneysat-law.
Va.Code § 54-48 (as amended 1973).
The court’s authority is further circumscribed by § 54-51:
Notwithstanding the foregoing provisions of this article, the Supreme Court of Ap*21peals shall not adopt or promulgate rules or regulations prescribing a code of ethics governing the professional conduct of attorneys at law, which shall be inconsistent with any statute ....
Va.Code § 54-51.

. The 1937 change of direction was so significant that casebooks now divide study of the commerce power into two parts: before and after 1937. See, e. g., G. Gunther & N. Dowling, Constitutional Daw § 5: “The Commerce Power Since 1937 — Constitutional Revolution or Continuity?” (8th ed. 1970) ; W. Lockhart, Y. Kamisar & J. Choper, Constitutional Law § 3: “Evolution of National Power Over National Economic Problems: I. Limitations on Federal Power Through 1936; II. Expansion of Federal Power After 1936” (3d ed. 1970).

. The recent history of the commerce clause is surveyed in Perez v. United States, 402 U.S. 146, 91 S.Ct. 1357, 28 L.Ed.2d 686 (1971).

. The opinion that medicine was not a trade was the basis for the district court decision in the AMA case, but the court of appeals reversed on the issue, and the Supreme Court avoided it on the second appeal of the case. United States v. American Medical Ass’n, 28 F.Supp. 752 (D.D.C.1939), rev’d, 72 App.D.C. 12, 110 F.2d 703, cert. denied 310 U.S. 644, 60 S.Ct. 1096, 84 L.Ed. 1411 (1940); United States v. American Medical Ass’n, 317 U.S. 519, 63 S.Ct. 326, 87 L.Ed. 434 (1943). The only other holding that even remotely resembles a “learned profession” exemption is Marjorie Webster Junior College, Inc. v. Middle States Ass’n of Colleges & Secondary Schools, Inc., 139 U.S. App.D.C. 217, 432 F.2d 650, cert. denied, 400 U.S. 965, 91 S.Ct. 367, 27 L.Ed.2d 384 (1970), and the court there was careful to note that it was not creating a wide-ranging exemption for college accreditation associations. Riggall v. Washington County Medical Society, 249 F.2d 266 (8th Cir. 1957), included a statement that the practice of medicine is neither trade nor commerce, but the decision of the court rested on several other grounds, including the absence of any connection with interstate commerce and the failure to allege monopolization or injury to the public.

. 259 U.S. at 209. This broad declaration has been’ rejected by subsequent cases that have applied the Sherman Act to personal services. See United States v. National Ass’n of Real Estate Boards, 339 U.S. 485, 489-492, 70 S.Ct. 711, 94 L.Ed. 1007 (1950).

. Organized football was not the first enterprise to seek an antitrust exemption under Federal Baseball. The Supreme Court had earlier rejected the pleas of organized boxing and the theater. United States v. International Boxing Club, Inc., 348 U.S. 236, 75 S.Ct. 259, 99 L.Ed. 290 (1955); United States v. Shubert, 348 U.S. 222, 75 S.Ct. 277, 99 L.Ed. 279 (1955).