f/k/a archives . . . real opinions & real haiku

August 17, 2003

Why the Bay State Bar Advocate Boycott is Illegal

Filed under: pre-06-2006 — David Giacalone @ 8:15 pm

Not all Massachusetts “bar advocates” may care whether their joint refusal to take new assigned cases is unlawful under the antitrust law.   For those who do care, I’m setting down here at length my reasons for believing that such activity falls clearly within the type of conduct that is banned under federal and state antitrust law.  [Disclaimer:  Of course, this is not meant to be legal advice, but is merely the opinion of a former antitrust attorney, who happens to care about things like the rule of law, the ethical obligations of lawyers, and the functioning of the judicial system.]

 

Yesterday, and in several other postings, I have discussed this so-called strike, and have cited to the U.S. Supreme Court decision in FTC v. Superior Court Trial Lawyers Association.   In SCTLA, the Court upheld the Commission’s finding that a boycott by assigned counsel in D.C., aimed at achieving higher hourly rates, was per se illegal.   In Comments on this site today, Massachusetts attorney Thomas Workman gives his reasons for believing that SCTLA does not apply to the bar advocate situation.   Here is his main argument (emphasis added):

 



The FTC v Superior Court Lawyers case, decided by the US Supreme court, has been before the attorneys in Massachusetts for years. Lawyers here did not just discover it as a result of postings here. Most attorneys here disagree with the interpreted holding that is suggested by David in his postings on this BLOG.

David suggests that the case stands for the proposition that attorneys may not organize and refuse to offer their services for any reason. The case was decided on the basis of the per-se violation of taking action for the purposes of setting fees. You will notice in the press release for the Suffolk Lawyers that the action is being taken until lawyers GET PAID.

It is common practice for all lawyers to refuse new work when their clients have not paid them for work already done. This is not a practice unique to attorneys, my fuel oil delivery service will not deliver oil to my house if I have not paid for my last delivery.   Had the US Supreme Court had before it an issue of lawyers who would not work for an agency of the government that had breached their contract with the lawyers, by not paying them, I would suggest that the holding might have been very different. We will never know for sure, because the US Supreme Court has not considered that fact pattern.


 

As annoying old professors like to say, “That’s a distinction without a difference.”    I fully support the fight for fair compensation and the right of each lawyer to individually decide whether or not to continue taking assignments until paid for the Fiscal ’03 services.    But, just like fuel oil companies, competing lawyers cannot make joint decisions about whether to continue to deal with a buyer.  I’m afraid the Massachusetts attorneys are engaged in wishful thinking:  group denial to justify their group boycott.  

 


  • Antitrust law has existed for over 100 years and, over that time, certain principles have evolved and have been clarified.   One of the most settled principles is that competitors may not jointly refuse to deal with a customer in order to force the customer to meet the competitors’ terms

 

Concerted activity does not have to be price fixing to be unlawful.    Let’s leave out the implicit threat here of future boycotts to achieve higher fees, and accept that the bar advocates merely want legislation passed that will ensure immediate payment for past work.   What we still have here is a concerted refusal to extend further credit, backed up by a joint refusal to sell to the buyer until it acquiesces.    [In fact, a boycott to stop purchases on credit by beer retailers was considered per se unlawful price fixing in Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643 (1980) (refusing to extend credit was equivalent to refusing to give a discount).]

 

Antitrust law does not merely ban group boycotts meant to raise prices.   It bans competitors acting in concert to impose their will on customers, suppliers, or other competitors.   Thus, the Supreme Court said in St Paul Fire & Marine Ins. Co. v. Barry, 438 U.S. 531 (1978), “The generic concept of boycott refers to a method of pressuring a party with whom one has a dispute by withholding, or enlisting others to withhold, patronage or services from the target.”   And, it continues:


This Court also has held unlawful, concerted refusals to deal in cases where the target is a customer of some or all of the conspirators who is being denied access to desired goods or services because of a refusal to accede to particular terms set by some or all of the sellers.  [cites omitted]  As this Court put it in Kiefer-Stewart Co. v. Seagram & Sons, 340 U.S. 211, 214 (1951), “the Sherman Act makes it an offense for [businessmen] to agree among themselves to stop selling to particular customers.”  

Therefore, the crucial questions are:  Is interfering with the State’s purchasing of legal services for indigent dendendants a “restraint of trade”?   Are the bar advocates competitors?   Is their refusal to deal with a customer concerted?    If so, do they nonetheless have a valid justification?   Recent statements by the Suffolk County Lawyers for Justice and other groups across the State answer the concertedness question — the refusal to take cases is undoubtedly joint action.   As for the other questions, the SCTLA case offers plenty of analysis that is relevant to the Massachusetts situation.


The Refusal to Take Cases Is a Restraint of Trade


The Supreme Court in SCTLA [at footnote 9] answered this question, for the purposes of the Massachusetts bar advocates, when it adopted the FTC’s reasoning regarding the conduct of the “CJA” (Criminal Justice Act) attorneys who were the members of SCTLA:


    “`[T]he city’s purchase of CJA legal services for indigents is based on competition. The price offered by the city is based on competition, because the city must attract a sufficient number of individual lawyers to meet its needs at that price. The city competes with other purchasers of legal services to obtain an adequate supply of lawyers, and the city’s offering price is an element of that competition. Indeed, an acknowledgement of this element of competition is implicit in the respondents’ argument that an increase in the CJA fee was `necessary to attract, and retain, competent lawyers.’ If the offering price had not attracted a sufficient supply of qualified lawyers willing to accept CJA assignments for the city to fulfill its constitutional obligation, then presumably the city would have increased its offering price or otherwise sought to make its offer more attractive. In fact, however, the city’s offering price before the boycott apparently was sufficient to obtain the amount and quality of legal services that it needed.'” 272 U.S. App. D.C., at 278, 856 F.2d, at 232.


The Bar Advocates Are Competitors


Similarly, the SCTLA Court made it clear that bar advocates are considered “competitors” for the purposes of the antitrust laws, when it favorably quoted the reasoning of the Court of Appeals below:



    “The Commission correctly determined that the CJA regulars act as `competitors’ in the only sense that matters for antitrust analysis: They are individual business people supplying the same service to a customer, and as such may be capable, through a concerted restriction on output, of forcing that customer to pay a higher price for their service.   That the D. C. government, like the buyers of many other services and commodities, prefers to offer a uniform price to all potential suppliers does not alter in any way the anti-competitive potential of the petitioners’ boycott. The antitrust laws do not protect only purchasers who negotiate each transaction individually, instead of posting a price at which they will trade with all who come forward. [493 U.S. 411, 423]   Nor should any significance be assigned to the origin of the demand for CJA services; here the District may be compelled by the Sixth Amendment to purchase legal services, there it may be compelled by the voters to purchase street paving services. The reason for the government’s demand for a service is simply irrelevant to the issue of whether the suppliers of it have restrained trade by collectively refusing to satisfy it except upon their own terms. We therefore conclude, as did the Commission, that the petitioners engaged in a `restraint of trade’ within the meaning of Section 1.” Id., at 281, 856 F.2d, at 235 (footnote omitted). [emphases added]

No Cognizable Justifications Exist


The fact that the bar advocates are engaging in a joint boycott to recoup fees already earned — that is, to assure that their fee does not end up being $0 per hour rather than the contracted fee, and that they do not have to extend any further credit to the State — is simply not relevant for purposes of the antitrust law.   The following excerpts, among many others, from the high Court’s opinion in SCTLA, should convince any objective lawyer, and even most biased ones (emphases added):



Of course, some boycotts and some price-fixing agreements are more pernicious than others; some are only partly successful, and some may only succeed when they are buttressed by other causative factors, such as political influence.  . . . Conspirators need not achieve the dimensions of a monopoly, or even a degree of market power any greater than that already disclosed by this record [i.e., the immediate collapse of the criminal court administration in D.C.], to warrant condemnation under the antitrust laws.”




  • Reasonable lawyers may differ about the wisdom of [bringing] this enforcement proceeding. . . . Respondents’ boycott may well have served a cause that was worthwhile and unpopular.   We may assume that the preboycott rates were unreasonably low, and that the increase has produced better legal representation for indigent defendants.  Moreover, given that neither indigent criminal defendants nor the lawyers who represent them command any special appeal with the electorate, we may also assume that without the boycott there would have been no increase in District CJA fees at least until the Congress amended the federal statute.   These assumptions do not control the case, for it is [493 U.S. 411, 422]  not our task to pass upon the social utility or political wisdom of price-fixing agreements.”

“It is, of course, true that the city purchases respondents’ services because it has a constitutional duty to provide representation to indigent defendants.  It is likewise true that the quality of representation may improve when rates are increased.   Yet neither of these facts is an acceptable justification for an otherwise unlawful restraint of trade.  As we have remarked before, the “Sherman Act reflects a legislative judgment that ultimately competition will produce not only lower prices, but also better goods and services.” National Society of Professional Engineers v. United States, 435 U.S. 679, 695 (1978). This judgment “recognizes that all elements of a bargain – quality, service, safety, and durability – and not just the immediate cost, are favorably affected by the free opportunity to select among alternative offers.” [493 U.S. 411, 424]   Ibid.   That is equally so when the quality of legal advocacy, rather than engineering design, is at issue.”



  • The social justifications proffered for respondents’ restraint of trade thus do not make it any less unlawful. The statutory policy underlying the Sherman Act “precludes inquiry into the question whether competition is good or bad.” Ibid. . . . Respondents’ agreement is not outside the coverage of the Sherman Act simply because its objective was the enactment of favorable legislation.”

“SCTLA contends that because it, like the boycotters in Claiborne Hardware [493 U.S. 11], sought to vindicate constitutional rights, it should enjoy a similar First Amendment protection.   It is, of course, clear that the association’s efforts to publicize the boycott, to explain the merits of its cause, and to lobby District officials to enact favorable legislation – like similar activities in Claiborne Hardware – were activities that were fully protected by the First Amendment. But nothing in the FTC’s order would curtail such activities, and nothing in the FTC’s reasoning condemned any of those activities.”

“The activity that the FTC order prohibits is a concerted refusal by CJA lawyers to accept any further assignments until they receive an increase in their compensation; the undenied objective of their boycott was an economic advantage for those who agreed to participate.  . . . [The Claiborne Hardware boycott, however, “differs in a decisive respect” . . . it was about equality and freedom rather than an element subject to market haggling.]  . . . The same cannot be said of attorney’s fees.



  • Claiborne Hardware is not applicable to a boycott conducted by business competitors who ‘stand to profit financially from a lessening of competition in the boycotted market.'”

There’s Still Time to Stop


Bay State bar advocates still have time to decide that they will start (or continue) accepting cases tomorrow.   They should not rely on “professional courtesy” from state or federal antitrust prosecutors to give them impugnity to act unlawfully.   


In SCTLA, the FTC entered a cease-and-desist order to prohibit the respondents “from initiating another boycott . . . whenever they become dissatisfied with the results or pace of the city’s legislative process.” 107 F.T.C. 510, 602 (1986).  Far greater negative consequences could befall the Massachusetts bar advocates — legislative or public backlash, potential treble damage fines, and disciplinary action for ethical violations are all possible.   No matter what the majority of Massachusetts bar advocates do tomorrow, I hope there will be a significant number of individuals who cross the illicit picket lines — rejecting peer pressure — to do the right thing for their potential clients, the judicial system, and the rule of law.  Those will be the true “lawyers for justice.”


Update: Governor and Boycotting Lawyers Trade Warnings This post (Aug. 23, 2003) has a lengthy discussion of continuing threats for more concerted action next year.

Powered by WordPress