Court Opinion

ID: 194552
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:19:42+00
Date Added: 2024-06-11T09:42:59.109145
License: Public Domain

February 25, 1993
                  UNITED STATES COURT OF APPEALS
                      For The First Circuit
                                           

No. 92-1856

                SANDY RIVER NURSING CARE, ET AL.,

                     Plaintiffs, Appellants,

                                v.

                     AETNA CASUALTY, ET AL.,

                      Defendants, Appellees.

                                           

           APPEAL FROM THE UNITED STATES DISTRICT COURT

                    FOR THE DISTRICT OF MAINE

           [Hon. Morton A. Brody, U.S. District Judge]
                                                     

                                           

                              Before

                       Selya, Circuit Judge,
                                           
                  Coffin, Senior Circuit Judge,
                                              
                    and Stahl, Circuit Judge.
                                            

                                           

  K.  Craig  Wildfang  with  whom  Wood  R.  Foster,  Jr.,  Anne  K.
                                                                    
Weinhardt,  Sidney St. F. Thaxter, John D. Gleason, Vance K. Opperman,
                                                                   
Robert J. Schmit, Patrick N.  McTeague, and Barnet D. Skolnik were  on
                                                           
brief for appellants.
  Richard G.  Parker with  whom Paul  W. Chaiken,  James E.  Kaplan,
                                                                   
Mark F. Horning,  Paul Macri,  Fredric W. Yerman,  Lewis V.  Vafiades,
                                                                   
Michael L. McCluggage, Harold  J. Friedman, Carl F. Rella,  Stanley B.
                                                                    
Block,  Robert  S. Frank,  Robert  F. Hanson,  William  A. Montgomery,
                                                                   
Michael A. Nelson, James van R. Springer, George Z.  Singal, Joseph E.
                                                                    
Coughlin, Paul H. Friedman, Randall B. Weill, Alfred C. Frawley, Peter
                                                                    
J.  Rubin, Lewis V. Vafiades, and Lewis  A. Noonberg were on brief for
                                                  
appellees.
  Stephen L. Wessler, Deputy Attorney General, Francis E.  Ackerman,
                                                                   
Assistant  Attorney General,  and  Thomas D.  Warren, Deputy  Attorney
                                                  
General, on brief for the State of Maine, amicus curiae.
                                           

                        February 25, 1993
                                           

     COFFIN,  Senior Circuit  Judge.  Plaintiffs  are a  group of
                                   

Maine employers who claim  that the defendant insurance companies

illegally  conspired to  fix prices  and conduct  a boycott  in a

successful effort to coerce the state legislature into permitting

higher rates for workers'  compensation insurance.1  The district

court  granted  summary  judgment  for defendants  based  on  the

doctrines established in  Parker v. Brown,  317 U.S. 341  (1943),
                                         

and Eastern  R.R. Presidents  Conference v. Noerr  Motor Freight,
                                                                

365  U.S. 127  (1961).2   The  court  concluded that  plaintiffs'

claimed damage -- the  additional cost of their insurance  -- was

attributable  to  the  legislation  rather than  to  the  alleged

conspiracy,  and  that,   consequently,  federal  antitrust  laws

provide no relief.

     On appeal, plaintiffs contend that  the court erred both  in

construing their  claims and in immunizing  defendants' actions. 

After carefully  reviewing the  record and pertinent  caselaw, we

conclude  that  the  district  court   properly  granted  summary

judgment for  defendants.  Although  we depart somewhat  from the

court's  analysis   --  finding  that   the  alleged   conspiracy

constituted a  per se violation of the Sherman Act, 15 U.S.C.   1
                     

                    

     1  Plaintiffs  sued  fifteen  insurance  companies  and  the
National  Council on  Compensation Insurance (NCCI),  a voluntary
association  of  insurers   that  is   a  state-licensed   rating
organization.

     2 In briefest summary, these doctrines exempt from antitrust
liability  anticompetitive  actions  attributable  to  the state,
Parker, 317 U.S. at 350-52, and political activity by individuals
      
seeking to influence  the passage or enforcement  of laws, Noerr,
                                                                
365 U.S. at 136-40. 

--  we affirm the court's  holding that the  Parker doctrine bars
                                                   

plaintiffs' requested relief.3

                               I.4

     Workers'  compensation insurance has  long been an extremely

sensitive issue in Maine.   Regulation is strict.   All employers

who do not self-insure  are required to purchase such  insurance.

Insurers  are "required by Maine  Law to charge  only those rates

for workers'  compensation insurance which have  been filed with,

and  approved  by,  the  Maine  Superintendent  of  Insurance  in

conformance with Maine Law."  Complt.    32.  The businesses  and

the insurers both have been dissatisfied with the system.

     At  least  since  1981,  NCCI  and  its  members have  taken

affirmative steps  to challenge  the allowable rates  as unfairly

low.    They  have  sought review  of  the  Superintendent's rate

decisions in  court, see, e.g., National  Council on Compensation
                                                                 

Ins.  v.  Superintendent  of  Ins.,  481   A.2d  775  (Me.  1984)
                                  

(affirming  Superintendent's   disapproval  of  a  requested rate

increase  of 27.5%;  NCCI had  claimed that  statistical evidence

showed that a 110% increase was warranted), and consistently have

lobbied for legislation that  would reduce statutory benefits and

permit insurers to charge higher rates.  Neither their litigation

                    

     3  The complaint  sought  injunctive relief  in addition  to
damages, but neither the district  court nor the parties  devoted
attention to  this request.  We  note only that, in  light of our
analysis,  we see no basis  upon which plaintiffs  may be awarded
injunctive relief.

     4  We draw  heavily  from the  district court's  well-stated
description  of   the  recent  history  of   the  Maine  workers'
compensation system.   

                               -3-

nor lobbying proved successful during the period relevant to this

litigation.

     Indeed,  to  the contrary,  the  Maine  legislature in  1985

enacted the "Workers' Compensation Competitive Rating Act," which

directed  that workers'  compensation  insurance rates  be rolled

back at least 8% and  frozen at that level until 1987.   Me. Rev.

Stat.  Ann. tit. 24-A,    2331-2357 (1985) (repealed).  Under the

Act,  insurers were  prohibited  from  requesting rate  increases

exceeding  10% in  1987, 1988  and  1989.   Id.  at    2355.   In
                                               

addition, the 1985 Act declared that it was intended, inter alia:
                                                                

     1.  . . . To prohibit price fixing agreements and other
     anticompetitive behavior by insurers.
     . . . 
     3.  . . . To promote price competition among insurers .
     . . . 

Id. at   2332.
   

     The insurers challenged the 1985 act in court.  Although the

Maine Superior Court  determined that the  rate ceilings were  so

low that they were confiscatory, the court held that the ceilings

were not unconstitutional because  insurers were free to withdraw

from  the market  for workers'  compensation insurance  in Maine.

National Council on Compensation  Ins. v. Superintendent of Ins.,
                                                                

CV-85-459  (Sup.  Ct.  May  14,  1987)  (Alexander,  J.),  appeal
                                                                 

dismissed, 538  A.2d 759  (Me. 1988)  (dismissed as moot  because
         

1987 legislation repealed 1985 Act).

     In this lawsuit,  plaintiffs assert that defendants,  unable

to  achieve  their goals  legally,  resorted  to improper  means.

Plaintiffs  contend that  defendants  allegedly conspired  to fix

                               -4-

prices at a higher-than-lawful  rate and to conduct a  boycott of

the  Maine workers'  compensation  market  to induce  legislation

authorizing rate increases.  As early as 1986,  plaintiffs claim,

defendants   jointly   began   refusing   to   insure   employers

voluntarily,  requiring  them  to  obtain  workers'  compensation

coverage through  the "residual" or "involuntary"  system.  Every

insurer  authorized to  write workers'  compensation  policies in

Maine is required by state law to participate in the "involuntary

market" and,  thus, to share the  underwriting responsibility for

employers   otherwise   unable   to   obtain  coverage.5      The

conspirators  allegedly  increased  the  pressure  on  the  Maine

legislature to  act when, between  late summer and  October 1987,

virtually all workers' compensation insurers in Maine prepared to

withdraw from the state.

     To  avert the  crisis  that  would  occur  if  all  workers'

compensation  insurers left,  Governor John  McKernan convened  a

special  session  of  the  legislature   devoted  exclusively  to

reviewing and reforming Maine's workers' compensation system.  In

short order, the legislature approved the "Workers'  Compensation

Rating Act" (deleting the word "competitive" that had been in the

title of the 1985 Act), Me. Rev. St. Ann. tit. 24-A,    2361-2374

(West 1990 and 1992 Supp.).  The 1987 Act removed the limitations

on rate increases contained in the 1985 Act.  It authorized  NCCI

to  act as agent for its member insurance companies by submitting

                    

     5 Plaintiffs  seem to suggest  that the  shift of  employers
from  the voluntary  to the  involuntary market  was in  some way
detrimental to them, but they do not explain how.

                               -5-

joint  rate proposals  on their behalf  to the  Superintendent of

Insurance,  who  is  the  ultimate  decisionmaker  on  the  rates

insurers may charge.  Insurers are permitted, however, to deviate

below the rate approved by the Superintendent.

     In 1988,  1989 and  1990, the insurers  collectively applied

for rates beyond the limits allowed  in the 1985 Act.  Each year,

the  Superintendent rejected  the requested  rate  increases, but

authorized lower increases  that still exceeded the 10%  caps set

by the 1985 legislation.  Plaintiffs contend that, as part of the

insurers'   continuing    price-fixing   conspiracy,   defendants

unlawfully agreed to charge only the maximum rates allowed by the

Superintendent.

     Through this lawsuit, plaintiffs seek recovery of damages in

the amount of  the increased  premiums they have  paid since  the

1987 Act was passed  and defendants began charging higher  rates.

The district court concluded that this  relief was barred because

the alleged harm  was directly traceable to the  1987 legislation

and the approval of rate increases by the Maine Superintendent of

Insurance.    The court  relied  on  the well-established  Parker
                                                                 

principle,  see  317  U.S.  at  350-52,  that  injury  caused  by
               

anticompetitive  state   action  is  not  compensable  under  the

antitrust  laws.   The  court further  believed that  defendants'

actions were protected  by the  Noerr doctrine, see  365 U.S.  at
                                                   

136-40,  which  exempts from  antitrust liability  the collective

efforts of private actors to promote anticompetitive legislation.

                               -6-

     Plaintiffs  argue on  appeal that  the district  court erred

because it  mistakenly attributed their asserted  injury to state

action.     They  contend  that  they  were  harmed  not  by  the

legislation  itself  but  by  defendants'  ongoing conspiracy  to

obtain  and  charge  higher  rates.    Parker,  they  insist,  is
                                             

therefore inapplicable.  They  further assert that Noerr provides
                                                        

no  immunity   for  defendants  because  the  alleged  conspiracy

involved classic  anticompetitive economic  conduct --  a boycott

and  price-fixing  --  rather  than political  activity  such  as

lobbying or petitioning.

     Defendants  respond that,  regardless of  the nature  of the

conspiracy,  which  they  admitted  solely for  purposes  of  the

summary judgment  proceedings, they  cannot  be assessed  damages

based  on the premium increases authorized by state law.  Because

that  is the  only  injury  for  which  plaintiffs  seek  relief,

defendants  maintain that  the district  court correctly  granted

summary judgment.

                               II.

     The issues  we face on this  appeal are matters of  law, and

our standard of review is therefore de novo.  Liberty Mutual Ins.
                                                                 

Co. v.  Commercial Union  Ins. Co., 978  F.2d 750, 757  (1st Cir.
                                  

1992).  Although plaintiffs repeated at oral argument a complaint

earlier made to the  district court that they had  had inadequate

time to develop the  facts through discovery, we  do not see  how

additional investigation could have affected the summary judgment

decision.    Defendants  have  admitted, for  purposes  of  their

                               -7-

motion, that  they conspired to withdraw from  the Maine workers'

compensation  market.    Plaintiffs identify  no  other  possibly

discoverable  fact that  would  be material  to the  legal issues

before  us.  We note,  moreover, that they  have not appealed the

district court's denial of  their motion for additional discovery

time.

     Plaintiffs  make a  related  claim that  the district  court

erred  in repeatedly failing  to construe their  complaint in the

light  most favorable  to  them, arguing  that  this standard  of

scrutiny -- normally applicable to motions to dismiss --  applies

here because defendants conceded the material factual allegations

of  the  complaint.    This  claim  also  is  irrelevant  to  our

disposition.   As  our analysis  in the  following  sections will

demonstrate,  plaintiffs' appeal  fails no  matter  how liberally

their allegations concerning defendants' conspiracy are construed

because the  specific relief they seek  is barred as a  matter of

law.  

                               III.

     We begin  our analysis with an  aspect of the case  that has

engendered  some confusion,  but apparently no  real disagreement

among the parties.   In the concluding paragraph of  its opinion,

the district  court stated that "[t]he  defendants' conspiracy to

press for legislation permitting them  to charge higher rates  --

which  in and of itself caused Plaintiffs  no injury -- is immune

under Noerr."  Opinion at 22.  The State of  Maine construed this
           

statement  and similar  references  elsewhere in  the opinion  as

                               -8-

holding  that  private actors  lawfully  may  employ a  concerted

economic  boycott  to  influence  a   legislative  determination.

Disturbed  by this  specific  holding, the  State sought  and was

granted permission to file an amicus brief limited to urging that

we reverse the ruling.

     We have  some doubt  that the  district  court intended  the

broad  statement attributed to it  by the State.   Regardless, at

this  point, the State's  position meets with  no opposition from

any  party.   Plaintiffs and  defendants all  agree that  private

actors who conduct  an economic boycott  violate the Sherman  Act

and may be held responsible  for direct marketplace injury caused
                                                          

by  the  boycott, even  if the  boycotters'  ultimate goal  is to

obtain  favorable  state action.    This view,  we  find, clearly

reflects Supreme Court precedent.

     In  Noerr,  the  Supreme   Court  held  that  the  defendant
              

railroads could associate for  the purpose of waging  a publicity

campaign  designed to  secure legislative  action harmful  to the

truckers with whom they competed, without implicating the Sherman

Act prohibition against combinations in restraint of trade.   365

U.S. at 136-37.   The  Court observed that,  in a  representative

democracy, individuals  must have  the ability to  "freely inform

the  government  of  their wishes,"  id.  at  137,  and they  are
                                        

permitted   to  do  so   even  if  their   motives  are  entirely

anticompetitive,  id. at  139-40.   Any  other conclusion  "would
                     

impute to the  Sherman Act  a purpose to  regulate, not  business

activity, but political  activity, a purpose which would  have no

                               -9-

basis whatever in the  legislative history of  the Act."  Id.  at
                                                             

137.

     Noerr does not  protect from  antitrust liability,  however,
          

all actions designed to influence government.  The Court has made
   

it clear  that certain  "combinations normally held  violative of

the Sherman  Act," id. at 136,  including price-fixing agreements
                      

and  boycotts, are  not "outside the  coverage of  the .  . . Act

simply because  [their] objective was the  enactment of favorable

legislation," FTC v. Superior Court Trial Lawyers Ass'n, 493 U.S.
                                                       

411, 424 (1990).  See also Allied Tube & Conduit  Corp. v. Indian
                                                                 

Head, Inc., 486 U.S. 492, 503-04 (1988);  Noerr, 365 U.S. at 136.
                                               

In  other  words,  a  classic  economic  restraint  of  trade  is

actionable even if its primary purpose is political.

     This limitation on the Noerr doctrine was  fully explored in
                                 

Trial Lawyers, a  case closely  analogous to the  one before  us.
             

Trial  Lawyers  involved a  boycott organized  by members  of the
              

District  of Columbia criminal defense bar.  The attorneys agreed

not  to  accept  any  court appointments  to  represent  indigent

criminal defendants in order to force the District's City Council

to  raise the  hourly rate  of pay  for court-appointed  criminal

defense   work.    The  Supreme  Court   held  that  the  boycott

constituted  a "plain violation of  the antitrust laws," 493 U.S.

at 428, and that "[o]ur decision in Noerr in no way detracts from
                                         

this  conclusion," id.  at  424.   Noerr,  the Court  emphasized,
                                        

involved "mere  attempts to influence the  passage or enforcement

of laws,"  id. (quoting Noerr,  365 U.S. at  135), not an  actual
                             

                               -10-

restraint on price  and output, id. at 423.   The Noerr exception
                                                       

to  antitrust liability  thus  was inapplicable  to the  lawyers'

boycott.  Id. at 428.
             

     The district court here  sought to distinguish Trial Lawyers
                                                                 

from   the  case  before  it,  at  least  in  part,  because  the

anticompetitive  conspiracy there was directed at the government,

the  District   of  Columbia   City  Council,  as   a  commercial

participant.  Opinion  at 20-21.  The court appeared  to view the

government's role  as a purchaser  as significant to  the Supreme

Court's conclusion that Noerr immunity was unavailable:
                             

     The  goal  of  the  trial lawyers'  conspiracy  was  to
     inflict economic pain on  the government, forcing it to
     pass  legislation.     In  this   case,  however,   the
     Defendants' alleged conspiracy was not intended to harm
     the government  as  a  commercial  participant  in  the
     marketplace, only to prompt it  to pass anticompetitive
     legislation.

Opinion at 21.   Consequently, the district court seemed  to say,

the conspiracy in this case was protected by Noerr.
                                                  

     Trial  Lawyers does  not establish  a "government-as-market-
                   

participant" exception to Noerr.   What was significant about the
                               

concerted activity  there was  not  that the  government was  the

purchaser, but  that the defendants  had sought to  influence the

government through an economic boycott that directly affected the

marketplace by,  inter alia,  constricting the supply  of lawyers
                           

available to  represent indigent criminal defendants.   The Court

emphasized  that  Noerr   provides  immunity  when  the   alleged
                       

restraint of trade is  imposed by the government as  the intended
                                                

consequence  of  the  defendants'  concerted  activity.    It  is
           

                               -11-

inapplicable when private actors  impose the challenged restraint

of  trade  through  a  boycott or  other  traditionally  unlawful

economic  measure, even  when  the boycott's  sole purpose  is to

instigate favorable governmental action.

     Whether  the  boycotted purchaser  is  the  government or  a

private individual  is  irrelevant;  the  significant  factor  is

direct market effect.

     The restraint  of trade that was  implemented while the
     boycott  lasted  would  have  had  precisely  the  same
     anticompetitive consequences during that period even if
     no legislation had been enacted.  In Noerr, the desired
                                               
     legislation  would  have created  the restraint  on the
     truckers'  competition;  in  this  case  the  emergency
     legislative response to  the boycott put an  end to the
     restraint.

Trial Lawyers, 493 U.S. at 425.
             

     Here,  too,  the defendants  allegedly employed  an economic

boycott that  beyond doubt  "`constituted a classic  restraint of

trade within the  meaning of Section 1 of the Sherman Act,'" id.,
                                                                

493 U.S. at  422 (quoting  Court of  Appeals, 856  F.2d 226,  234

(1988)).  Had  these or other plaintiffs sought injunctive relief

during  the boycott period, or  had they sought  damages based on

the boycott's direct market effects (such as reduced availability

of insurance or higher  prices resulting from reduced competition

during  the  boycott  period),  they  would  have  had  a  viable

antitrust  claim.   These  plaintiffs, however,  explicitly  have

disclaimed any request for relief based on injury occurring while

                               -12-

the boycott was in place, before the Maine Legislature passed the

1987 Act.6

     In all likelihood, it was the plaintiffs' decision to pursue

only post-legislation damages that influenced the  district court

to state broadly that defendants were immune from liability.  The

court  correctly  recognized  that  a  conspiracy  to  press  for

legislation  permitting  defendants  to charge  higher  rates was

permissible unless it was implemented through an actual restraint

on trade.   Because  plaintiffs sought  no direct  market damages

from  the boycott, the court evidently treated the boycott not as

a  prohibited  restraint  of  trade  but  as  a  lobbying  effort

equivalent  to the  unethical  and deceptive  publicity  campaign

waged by the defendants in Noerr.
                                

     In so  doing,  the court  may  have overstated  its  holding

unintentionally, permitting the inference drawn by the government

that the boycott itself was being held immune under Noerr.  As we
                                                         

have  explained, such a holding would conflict with Supreme Court

caselaw.    Defendants'  boycott  plainly constituted  a  per  se
                                                                 

violation  of  the Sherman  Act  even though  plaintiffs  seek no

marketplace damages resulting from it.

                               IV.

     The  central  issue  before  us is  whether  plaintiffs  may

recover  damages based  on the  higher rates  they have  paid for

workers'  compensation  insurance  since  enactment of  the  1987

                    

     6 We offer no view as to whether plaintiffs would  have been
able to prove damages from a constriction of supply or absence of
price competition resulting from the conspiracy.

                               -13-

legislation.   The district  court  ruled that  the state  action

doctrine  of Parker v. Brown, 317 U.S. 341, precluded such relief
                            

because  the   rate  increases  were  authorized   by  the  Maine

Legislature,   and  adopted  and   implemented  by   the  state's

Superintendent of Insurance.

     In Parker, "[r]elying on  principles of federalism and state
              

sovereignty, [the Supreme  Court] held that  the Sherman Act  did

not apply to anticompetitive restraints imposed by the States `as

an  act  of  government.'"   City  of  Columbia  v. Omni  Outdoor
                                                                 

Advertising, Inc., 111 S. Ct. 1344, 1349 (1991) (quoting  Parker,
                                                                

317 U.S. at 352).   The district court believed that  the actions

of  the legislature  and  Superintendent of  Insurance superseded

defendants' previous conduct, rendering the rate hikes "an act of

government" immune  under Parker rather than  an injury inflicted
                                

by defendants' conspiracy. 

     Plaintiffs offer  two reasons  why the Parker  doctrine does
                                                  

not bar the relief they seek.  First, in an argument more heavily

utilized  in the  district  court, plaintiffs  maintain that  the

defendants'  use of  unlawful  activity to  coerce the  favorable

legislation makes the Parker  doctrine inapplicable.  Because the
                            

legislature unlawfully  was pressured  to act, they  contend, the

statute   may   not  be   used   to   insulate  defendants   from

responsibility.   Second, plaintiffs  argue that  it was  not the

legislation simply  permitting rate  hikes that harmed  them, but

the defendants'  longstanding  conspiracy to  charge the  maximum

possible rates.

                               -14-

     Neither  of  these  arguments  is  persuasive.    The  first

contention,  that the defendants'  coercive conduct circumscribes

the effect of the legislature's actions, is directly contradicted

by  Supreme Court precedent.  In a  recent case, Omni, 111 S. Ct.
                                                     

at 1352, the Court reaffirmed its previously stated determination

that  Parker  immunity  turns   on  who  imposed  the  challenged
                                       

restraint, not why:
                  

     "[W]here the action complained of . . . was that of the
     State  itself,  the  action  is  exempt  from antitrust
     liability regardless  of the State's motives  in taking
     the action."

Id.  at 1352-53 (quoting Hoover  v. Ronwin, 466  U.S. 558, 579-80
                                          

(1984)).

     Omni rejected a proposed  conspiracy exception to the Parker
                                                                 

doctrine  that  would   have  denied  immunity  when   government

employees were  involved as  conspirators with private  actors in

the challenged restraint of trade.  The Court considered possible

methods   for  defining  a  conspiracy  exception,  including  an

approach  that  would  make   Parker  inapplicable  only  if,  in
                                    

connection with  the governmental action in  question, bribery or

some other  violation of state  or federal law  were established.

Id.  at 1353.  It  ultimately concluded that  any such limitation
   

would  be,  at   best,  an  imprecise  way  to   determine  which

anticompetitive state  actions should be  exempted from antitrust

liability.

     Such unlawful activity has no necessary relationship to
     whether  the  governmental  action  is  in  the  public
     interest.   A mayor is guilty of accepting a bribe even
     if  he  would and  should  have  taken,  in the  public
     interest, the same action for which the bribe was paid.

                               -15-

     . . . To  use unlawful political influence as  the test
     of legality of  state regulation undoubtedly vindicates
     (in a rather blunt  way) principles of good government.
     But the statute  we are construing  is not directed  to
     that end.

Id.
   

     The  holding in  Omni  fully embraces  plaintiffs'  tendered
                          

coercion  exception.   Allegations  of  coercion,  like those  of

conspiracy,   implicate  only   the  off-limits   issue   of  the

legislators' motivation.   Omni  reaffirms that the  state action
                               

protection provided by Parker is not vulnerable to such claims.
                             

      Plaintiffs' second  theory bears  down more closely  on the

1987  legislation.   Because the  statute does  not mandate  that
                                                           

insurers charge the maximum  rates allowed by the Superintendent,

but  merely eliminated the caps imposed by the repealed 1985 Act,

plaintiffs maintain  that  the higher  rates by  which they  were

damaged  resulted  from  defendants'  conspiracy  to  charge  the

maximum  rates  and not  from the  legislature's adoption  of the

statute.  We detect two problems with this argument.

     First, the  manner in which plaintiffs  asserted this theory

before the district court differed in a subtle, yet  significant,

way  from  the  approach  adopted  on  appeal.    Throughout  the

proceedings before the district court, plaintiffs emphasized that

they alleged injury from a conspiracy initiated in the summer and

fall of 1987 to violate the 1985 legislation, which promoted open
                                

competition    in   the    workers'    compensation   market.    

     Plaintiffs  do  not claim  that  they  were injured  by
     actions  mandated by  the  1987  legislation.   Indeed,
     plaintiffs allege  not only that  the conspiracy  began
     before the 1987 legislation  was even enacted, but that

                               -16-

     the  objective   of  the   conspiracy  was   that  very
                   
     enactment.   Plaintiffs in  fact allege that  they were
     injured by  defendants' conspiracy to violate  the 1985
                                                            
     legislation.    It is  therefore  the 1985  legislation
     against which state action claims must be tested.

Plaintiffs' Memorandum in Opposition to Defendants'  Joint Motion

for Summary Judgment, at 18 n.11 (emphasis in original).

     At oral argument on  the summary judgment motion, plaintiffs

again  asserted that it had  been unlawful for  the defendants to

conspire to increase prices  while the 1985 legislation governed.

See  App.  at  720.    When  the  district  court  asked why  the
   

defendants' actions were not protected in light of their  "acting

within the framework set  up by the legislature in  the enactment

of rates,"  plaintiffs' counsel responded  that "one needs  to be

clear on the time frame."  Id. at 729.  He continued:
                              

     At the time the  conspiracy was hatched and effectuated
     in summer and fall of 1987, the policy of the  State of
     Maine  was  open competition  in  workers'  comp.   The
     policy of the State of Maine was, "Go compete with each
     other."

          And these defendants  had a private agreement,  in
     effect, not to compete and to boycott consumers and the
     state.

Id.
   

     Thus, the argument to the  district court focused on conduct

leading  up to the 1987 act:  the defendants unlawfully conspired

to  charge higher rates, and obtained permission to do so through

unlawful  means,  making  the  new  rates  wholly   a  result  of

defendants' unlawful conduct.   Moreover, the plaintiffs  argued,

even though the specific  harm for which they sought  damages did

not  occur until  after  the law  was  changed and  higher  rates

                               -17-

authorized, defendants  had to be held responsible  so that their

past  illegal  conduct  would  not  be  immunized  retroactively.

Failing to hold them liable, plaintiffs argued,

     would  lead to the  anomalous result  that unsuccessful
                                                            
     boycotts  (i.e.  boycotts  which  do  not  successfully
                    
     coerce   governmental   action)   would  be   antitrust
     violations, but that successful boycotts (i.e. boycotts
                                                   
     to which government succumbs in order to avoid chaos or
     disaster) would be immunized.

Plaintiffs'  Memorandum  in  Opposition,  at  35-36 (emphasis  in

original) (footnote omitted).7

     The argument on appeal  unquestionably adds a new dimension.

Plaintiffs  now contend  that,  after passage  of  the 1987  act,

defendants again violated antitrust  laws by conspiring to refuse

to  sell  below   the  new  maximum  rates  established   by  the

Superintendent of Insurance.   That agreement is  not entitled to

state action immunity, plaintiffs suggest, because  the provision

in  the 1987  Act  allowing independent  ratesetting demonstrates

that  state  policy  still  favors  competition.    Consequently,

plaintiffs contend that  defendants should be held liable for the

rate increases.8

                    

     7  As we  made clear in  Section III,  the response  to this
argument is that unlawful boycotts with direct marketplace impact
will result  in accountability for the  market injury, regardless
                                              
of their success in inducing governmental action.

     8 We note that some  portions of plaintiffs' appellate brief
retain the focus on the 1985 legislation:

     Plaintiffs   do   not    challenge   the    Defendants'
     "participation  in  ratesetting  proceedings"  in  1988
     after  the 1987 legislation  was enacted  repealing the
     1985 Competitive Rating Act.  What Plaintiffs challenge
     is  Defendants' conspiracy begun in 1986 and 1987, at a
                               
     time   when  Maine  law  specifically  prohibited  such

                               -18-

     This link between plaintiffs'  conspiracy allegation and the

1987  Act never  was offered  to the  district court;  indeed, as

noted above, plaintiffs  expressly disclaimed  the new  statute's

relevance to the  Parker issue.  The conspiracy achieved success,
                        

plaintiffs  asserted, when  the  State enacted  the law  allowing

higher  premiums.    See  Memorandum  in  Opposition  to  Summary
                        

Judgment, at 2-3 (quoted in  District Court Opinion, at 3).   Led

by these  arguments, the district court  never considered whether

the defendants could be held responsible for the rate increases -

- despite authorization  of those rates by  the state --  if they

had conspired not to deviate below the maximum rate.

     Whether plaintiffs sufficiently preserved this argument need

not unduly detain us, however, because the theory is in any event

unavailing.   When the  legislature enacted the  1987 statute, it

did not simply eliminate the ceiling on the permissible rates for

workers' compensation insurance, but it also  moved away from the

state's previous pro-competitive policy toward  ratesetting.  The

1987 Act  provided for joint rate  filings9 and, in  our view, it

                    

     conspiracies, to  constrict supply, to fix  prices, and
     to boycott consumers in order  to coerce the removal of
                                                            
     the existing price ceiling.
                               

Plaintiffs' Brief at 31 (additional emphasis added).

     9 It did so  somewhat indirectly through repeal of  the 1985
Act, which meant that the  joint ratemaking provisions that  then
existed  for  all lines  of insurance  sold  in Maine  again were
applicable  to workers'  compensation  insurance.   In 1989,  the
legislature revised  the general  insurance ratemaking system  to
encourage  competition, leaving  the joint  ratemaking provisions
applicable only to the  workers' compensation providers.  Compare
                                                                 
Me. Rev. Stat. Ann. tit.  24-A,   2309 (West 1990) with  Me. Rev.
                                                       
Stat. Ann. tit. 24-A,   2309 (West Supp. 1992).

                               -19-

must  be construed  as  implicitly condoning  an agreement  among

insurers to  charge the  rates they  jointly propose,  subject to

approval  by the  Superintendent.   When  insurers work  together

within  a state regulatory system to advocate rates that they all

presumably  believe  are  appropriate  for  workers' compensation

insurance, we  fail to see  how it could be  illegal price fixing

for them also subsequently  to agree to charge the  rates allowed

by the state, particularly when the approved rates fall below the

jointly proposed rates.

     At a  minimum, it  must be lawful  for insurers to  agree to

charge  the approved  rate where,  as here,  the Superintendent's

obligation is to establish rates that are "[j]ust and reasonable"

and "[b]ased only  on a  just and reasonable  profit."  Me.  Rev.

Stat.  Ann. tit. 24-A,    2363 (7)(A)(1),  (2).   Thus, while the

statute  stipulates  that  these rates  set  the  upper  limit on

permissible charges, id.  at   2362,  the expectation clearly  is
                        

that  the Superintendent's rates are the ones that generally will

be appropriate  for, and  thus used  by, all insurers.   In  this

context,  the legislature  evidently  viewed the  sort of  "price

fixing" alleged by plaintiffs as  benign; notably absent from the

1987 statute is a provision contained in the 1985 Act prohibiting

insurers from agreeing  "to adhere  to or  use a  rate or  rating

plan," id. at   2347 (2) (1985) (repealed).
          

     Plaintiffs  rely  on the  provision  allowing  downward rate

deviation to  support their claim that  defendants' conspiracy to

charge  a uniform  rate was  unauthorized and,  consequently, not

                               -20-

immunized  under Parker.  But  the fact that  insurers may charge
                                                          

less than the approved  rate is of little significance when it is

juxtaposed with  the uniform approach  to ratemaking that  is the

overriding characteristic of  the reformed system.   On its  own,

the  permissive provision  certainly does  not establish  a state

policy favoring  competitive  pricing.    Moreover,  the  Supreme

Court,  in  Southern Motor  Carriers  Rate  Conference v.  United
                                                                 

States,  471 U.S. 48 (1985), explicitly held that Parker immunity
                                                        

is  available to private parties  acting pursuant to  a regime of

collective ratemaking that  is authorized, though not  compelled,

by the state.

     Southern Motor  Carriers involved  a challenge to  the joint
                             

activities of motor  common carrier rate  bureaus in four  states

where carriers were permitted to  agree on rate proposals  before

their  submission  to  state agencies.    In  the  course of  its

decision, the Court reaffirmed the two-pronged  test set forth in

California Retail Liquor Dealers  Ass'n v. Midcal Aluminum, Inc.,
                                                                

445   U.S.  97,   105   (1980),  for   determining  whether   the

anticompetitive  conduct  of  private  parties  within  a   state

regulatory scheme is shielded from the antitrust laws:

     First, the challenged restraint  must be "`one  clearly
     articulated  and  affirmatively   expressed  as   state
     policy.'"   Second, the  State must  supervise actively
     any private anticompetitive conduct.

471 U.S. at 57 (citations omitted).

     The  justices  then  considered  whether the  actions  of  a

private party  can be attributed  to a clearly  articulated state

policy, within the meaning of the Midcal test's first prong, even
                                        

                               -21-

if  the  state does  not  compel  the challenged  anticompetitive

activity.  Id. at  59-60.  The Court  observed that a  compulsion
              

requirement would reduce the range of alternatives available to a

state  that  wished to  regulate  a  given  industry  --  thereby

negatively affecting  principles of federalism  -- while  perhaps

also causing greater restraints on trade -- thereby impairing the
                    

goal of the antitrust  laws to ensure "unfettered  competition in

the marketplace," id. at 61.  Declining to "believe that Congress
                     

intended  to resolve  conflicts between  two competing  interests

[federalism  and  competition]   by  impairing  both  more   than

necesssary," id., the  Court concluded that "a  state policy that
                

expressly permits,  but does not  compel, anticompetitive conduct
                 

may  be `clearly articulated' within  the meaning of Midcal," id.
                                                                 

(emphasis in original).

     In  this  case,  it  is manifestly  clear  that  defendants'

ratemaking activities meet both  prongs of the Midcal test.   The
                                                     

new scheme was  adopted by the legislature, fulfilling  the state

policy prong of the test, and the Superintendent's involvement in

reviewing    and   modifying   the   insurers'   proposed   rates

unquestionably  meets  prong two's  requirement  of active  state

supervision.    Indeed,  plaintiffs  expressly  acknowledge  that

Midcal is  satisfied with respect to  the ratemaking proceedings.
      

See  Reply Brief,  at  19 n.15.    Plaintiffs instead  hammer  on
   

defendants'   "converting   the   results  of   that   ratemaking

proceeding,  i.e. a schedule of maximum or ceiling prices, into a
                                       

private agreement to  uniformly charge the maximum price,  and to
       

                               -22-

refuse  to deal at  prices below that  level."  Id.  (emphasis in
                                                   

original).

     This argument misfires because it fails to take into account

the  changed landscape.  Even  if defendants violated the Sherman

Act in  the late summer and  early fall of 1987  by conspiring to

raise the maximum prices they could charge beyond those permitted

by  the 1985  Act, it  does not  necessarily  follow that  it was

unlawful  for  them to  agree  to  charge  the rate  subsequently

approved  by the Superintendent pursuant  to the 1987  Act.  Once

the legislature  acted in November 1987,  defendants' conduct had

to be assessed in  light of the new state policy  and procedures.

As  we   have  discussed,  the  1987   Act  endorsed  cooperative

ratesetting and anticipated that most, if not all, insurers would

charge  the newly  authorized  rates.   Accordingly, the  damages

sought  by  plaintiffs  --  the differential  between  the  rates

allowed  under  the  1985  Act  and  the  new  rates  charged  by

defendants under the 1987 Act  -- must be viewed as a  product of

state action.   The district court  therefore correctly concluded

that, under Parker,  defendants may not  be held accountable  for
                  

this claimed injury.

                               V. 

     In summary,  we hold  that the  economic  boycott and  price

fixing conspiracy allegedly conducted by defendants in the summer

and  early fall  of 1987  constituted a per  se violation  of the
                                               

                               -23-

Sherman  Act,  and  did  not  fall  within  the  Noerr doctrine's
                                                      

protection for  concerted activity  designed to  elicit favorable

legislation.   But plaintiffs have not  sought damages for direct

marketplace injury inflicted by that conspiracy.

     The monetary damages alleged by plaintiffs --  the amount of

increase in their workers' compensation insurance rates under the

1987 statutory scheme allegedly coerced by  defendants -- are not

recoverable  from the  insurers.   Because  the state  authorized

collective  ratemaking  and  closely supervised  the  setting  of

higher  rates,  any  agreement  among defendants  to  charge  the

maximum  authorized  rates  is  permissible,  and defendants  are

immune from liability for the increase under the Parker doctrine.
                                                       

     Affirmed. 
             

                               -24-