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Law School Case Brief

FTC v. Superior Court Trial Lawyers Ass'n - 493 U.S. 411, 110 S. Ct. 768 (1990)

Rule:

When "speech" and "nonspeech" elements are combined in the same course of conduct, a sufficiently important governmental interest in regulating the nonspeech element can justify incidental limitations on U.S. Const. amend. I freedoms. A government regulation is sufficiently justified if it is within the constitutional power of the government; if it furthers an important or substantial governmental interest; if the governmental interest is unrelated to the suppression of free expression; and if the incidental restriction on alleged U.S. Const. amend. I freedoms is no greater than is essential to the furtherance of that interest.

Facts:

Attorneys who regularly accepted court appointments to represent indigent defendants in minor felony and misdemeanor cases before the District of Columbia Superior Court sought an increase in the statutorily fixed fees they were paid for such work. When lobbying efforts failed, a group consisting of virtually all such attorneys agreed among themselves that they would not accept any new cases after a certain date if the District of Columbia had not passed legislation providing for an increase in their fees; and a trial lawyers' association to which the attorneys belonged supported and publicized their agreement. After the agreement went into effect, other available defense counsel were quickly overloaded, severely affecting the District's criminal justice system.  Two weeks later, the city council voted to increase the fees.

The Federal Trade Commission (FTC) subsequently filed a complaint against the trial lawyers' association, which alleged that the association and its officers had entered into a conspiracy to fix prices and conduct a boycott and had thereby engaged in unfair methods of competition in violation of § 5 of the Federal Trade Commission Act, 15 U.S.C.S. § 45(a)(1). . An administrative law judge rejected various defenses, but recommended that the complaint be dismissed because District of Columbia officials regarded the net effect of the boycott as beneficial in providing better representation for indigent defendants; however, the FTC did not regard the boycott as harmless and issued a cease and desist order prohibiting the association from initiating any similar future boycotts. The United States Court of Appeals for the District of Columbia Circuit vacated the FTC order and remanded for a determination whether the association possessed significant market power, as it held that the attorneys' boycott contained an element of expression warranting protection under the Federal Constitution's First Amendment. According to the appellate court, a restriction on this form of expression cannot be justified unless it is no greater than is essential to an important governmental interest, and this test could not be satisfied by the application of a per se rule against price-fixing boycotts, but rather the FTC was required to prove that such conduct presented the evil against which the Sherman Act, 15 U.S.C.S. §§ 1-7, was directed. The FTC petitioned for certiorari review.

Issue:

Did the attorneys’ boycott constitute a restraint of trade within the meaning of the Sherman Act, thereby violating the unfair methods of competition? 

Answer:

Yes.

Conclusion:

The United States Supreme Court held that the attorneys' boycott constituted a restraint of trade within the meaning of § 1 of the Sherman Act, 15 U.S.C.S. § 1, and as such, also violated the prohibition against unfair methods of competition in § 5 of the Federal Trade Commission Act. According to the Court, the boycott was outside the coverage of the Sherman Act simply because the objective was the enactment of favorable legislation, given that the attorneys' alleged restraint of trade was not the intended consequence of public action, but rather was the means by which the attorneys sought to obtain favorable legislation. As such, it was not excepted from condemnation under the antitrust laws as expressive conduct protected by the First Amendment, given that the undenied purpose of the attorneys' boycott was an economic advantage for those who agreed to participate. Moreover, it was not excepted, as expressive conduct protected by the First Amendment, from the application of per se rules permitting the condemnation of such a boycott and price-fixing arrangement under the federal antitrust laws in the absence of proof of the attorneys' market power.

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