April 2013 Bar Bulletin
 
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April 2013 Bar Bulletin

Antitrust Doctrine Merits Attorneys' Attention

By Brady R. Johnson

 

Antitrust laws exist to protect competition. The federal Sherman Act1 prohibits joint conduct that unreasonably restrains competition. Similarly, Washington's Consumer Protection Act provides, "Every contract, combination, in the form of trust or otherwise, or conspiracy in restraint of trade or commerce is hereby declared unlawful."2

The elements of a violation are contained within the Sherman Act: (i) a contract, combination or conspiracy; (ii) that unreasonably restrains trade or commerce.3 Certain practices are so plainly anticompetitive that they are subject to a per se analysis in which the plaintiff need not prove the second element.

Penalties for Sherman Act violations include both civil and criminal remedies. Criminal sanctions include prison time and substantial fines.4 Civil sanctions can include treble damages and in government enforcement cases, civil penalties. Washington's Consumer Protection Act does not criminalize antitrust violations, but does authorize civil penalties of up to $500,000 per violation for a corporation and treble damages in private actions.

One practice that has been deemed plainly anticompetitive is horizontal price fixing.5 Horizontal price fixing refers to an agreement by competitors at the same market level not to compete on price. This may take the form of setting price targets, price floors or simply agreeing on a particular price. An agreement limiting production to drive prices up is also a form of price fixing.

Agreements of a type that always or almost always tends to raise price or reduce output are per se illegal. Typically these are agreements not to compete on price or output. Types of agreements that have been held per se illegal include agreements among competitors to fix prices or output, rig bids, or share or divide markets by allocating customers, suppliers, territories or lines of commerce. The courts conclusively presume such agreements, once identified, to be illegal, without inquiring into their claimed business purposes, anticompetitive harms, procompetitive benefits, or overall competitive effects.6

There are exemptions to the antitrust laws. Statutory exemptions include insurance,7 organized labor,8 agricultural cooperatives9 and other industries. Judicially created exemptions include state action immunity10 and Noerr-Pennington immunity.11 State law exemptions broadly mirror the federal exemptions.12

There is no exemption for the practice of law. Attorneys engage in "trade or commerce" and thus are subject to the antitrust laws. Unfortunately, there are cases where attorneys, acting in good faith but unaware of antitrust law, take actions that get them in trouble.

In Superior Court Trial Lawyers Ass'n v. Federal Trade Commission,13 a group of D.C. attorneys who represented indigent criminal defendants and were paid by the District sought an increase in their hourly rate. When negotiations failed, the membership of the Superior Court Trial Lawyers Association (SCTLA) agreed that they would cease taking indigent cases until the District met their demands. The boycott took a serious toll on the D.C. criminal justice system, resulted in serious backlogs and other problems, and ultimately persuaded the District to accede to the association's demands.


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