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Allied Tube & Conduit Corp. v. Indian Head - 108 S. Ct. 1931 (1988)

Rule:

Where, independent of any government action, an anticompetitive restraint results directly from private action, the restraint cannot form the basis for antitrust liability if it is "incidental" to a valid effort to influence governmental action. The validity of such efforts, and thus the applicability of Noerr immunity, varies with the context and nature of the activity. A publicity campaign directed at the general public, seeking legislation or executive action, enjoys antitrust immunity even when the campaign employs unethical and deceptive methods. But in less political arenas, unethical and deceptive practices can constitute abuses of administrative or judicial processes that may result in antitrust violations.

Facts:

The National Fire Protection Association -- a private organization that includes members representing industry, labor, academia, insurers, organized medicine, firefighters, and government -- sets and publishes product standards and codes related to fire protection. Its National Electrical Code (Code), which establishes requirements for the design and installation of electrical wiring systems, is routinely adopted into law by a substantial number of state and local governments, and is widely adopted as setting acceptable standards by private product-certification laboratories, insurance underwriters, and electrical inspectors, contractors, and distributors. Throughout the relevant period, the Code permitted the use of electrical conduit made of steel. Respondent, a manufacturer of plastic conduit, initiated a proposal before the Association to extend Code approval to plastic conduit as well. The proposal was approved by one of the Association's professional panels, and thus could be adopted into the Code by a simple majority of the members attending the Association's 1980 annual meeting. Before the meeting was held, petitioner, the Nation's largest producer of steel conduit, members of the steel industry, other steel conduit manufacturers, and independent sales agents collectively agreed to exclude respondent's product from the 1981 Code by packing the annual meeting with new Association members whose only function was to vote against respondent's proposal. After the proposal was defeated at the meeting and an appeal to the Association's Board of Directors was denied, respondent brought suit in Federal District Court, alleging that petitioner and others had unreasonably restrained trade in the electrical conduit market in violation of § 1 of the Sherman Act. The jury found petitioner liable, but the court granted a judgment n.o.v. for petitioner, reasoning that it was entitled to antitrust immunity under the doctrine of Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 5 L. Ed. 2d 464, 81 S. Ct. 523. The Court of Appeals reversed. The United States Supreme Court granted certiorari review.

Issue:

Did the Noerr antitrust immunity apply to petitioner?

Answer:

No

Conclusion:

The Court held that the conduct of the steel conduit interests, despite its political impact, was not immune from federal antitrust liability under the Noerr doctrine, since (1) as to the immunity accorded those who merely urge the government to restrain trade, the NFPA--being (a) without official authority, (b) unaccountable to the public, and (c) composed in part of persons having economic incentives to restrain trade--could not be treated as a "quasi-legislative" body simply because legislatures routinely adopt the NEC; and (2) as to the immunity accorded to private restraints which are incidental to a valid effort to influence governmental action, an economically interested party, exercising decisionmaking authority in formulating a product standard for a private association that comprises market participants, enjoys no Noerr immunity from any antitrust liability flowing from the effect the standard has of its own force in the marketplace.

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