Federal Trade Commission v. Superior Court Trial Lawyers Association/Opinion of the Court
|←Federal Trade Commission v. Superior Court Trial Lawyers Association||Federal Trade Commission v. Superior Court Trial Lawyers Association by
Opinion of the Court
Pursuant to a well-publicized plan, a group of lawyers agreed not to represent indigent criminal defendants in the District of Columbia Superior Court until the District of Columbia government increased the lawyers' compensation. The questions presented are whether the lawyers' concerted conduct violated § 5 of the Federal Trade Commission Act and, if so, whether it was nevertheless protected by the First Amendment to the Constitution. 
* The burden of providing competent counsel to indigent defendants in the District of Columbia is substantial. During 1982, court-appointed counsel represented the defendant in approximately 25,000 cases. In the most serious felony cases, representation was generally provided by full-time employees of the District's Public Defender System (PDS). Less serious felony and misdemeanor cases constituted about 85 percent of the total caseload. In these cases, lawyers in private practice were appointed and compensated pursuant to the District of Columbia Criminal Justice Act (CJA). 
Although over 1,200 lawyers have registered for CJA appointments, relatively few actually apply for such work on a regular basis. In 1982, most appointments went to approximately 100 lawyers who are described as "CJA regulars." These lawyers derive almost all of their income from representing indigents.  In 1982, the total fees paid to CJA lawyers amounted to $4,579,572.
In 1974, the District created a Joint Committee on Judicial Administration with authority to establish rates of compensation for CJA lawyers not exceeding the rates established by the federal Criminal Justice Act of 1964. After 1970, the federal Act provided for fees of $30 per hour for court time and $20 per hour for out-of-court time. See 84 Stat. 916, codified at 18 U.S.C. § 3006A (1970 ed.). These rates accordingly capped the rates payable to the District's CJA lawyers, and could not be exceeded absent amendment to either the federal statute or the District Code.
Bar organizations began as early as 1975 to express concern about the low fees paid to CJA lawyers. Beginning in 1982, respondents, the Superior Court Trial Lawyers Association (SCTLA) and its officers, and other bar groups sought to persuade the District to increase CJA rates to at least $35 per hour. Despite what appeared to be uniform support for the bill, it did not pass. It is also true, however, that nothing in the record indicates that the low fees caused any actual shortage of CJA lawyers or denied effective representation to defendants.
In early August 1983, in a meeting with officers of SCTLA, the Mayor expressed his sympathy but firmly indicated that no money was available to fund an increase. The events giving rise to this litigation then ensued.
At an SCTLA meeting, the CJA lawyers voted to form a "strike committee." The eight members of that committee promptly met and informally agreed "that the only viable way of getting an increase in fees was to stop signing up to take new CJA appointments, and that the boycott should aim for a $45 out-of-court and $55 in-court rate schedule." In re Superior Court Trial Lawyers Assn., 107 F.T.C. 510, 538 (1986).
On August 11, 1983, about 100 CJA lawyers met and resolved not to accept any new cases after September 6 if legislation providing for an increase in their fees had not passed by that date. Immediately following the meeting, they prepared (and most of them signed) a petition stating:
"We, the undersigned private criminal lawyers practicing in the Superior Court of the District of Columbia, agree that unless we are granted a substantial increase in our hourly rate we will cease accepting new appointments under the Criminal Justice Act." 272 U.S.App.D.C. 272, 276, 856 F.2d 226, 230 (1988).
On September 6, 1983, about 90 percent  of the CJA regulars refused to accept any new assignments. Thereafter, SCTLA arranged a series of events to attract the attention of the news media and to obtain additional support. These events were well publicized and did engender favorable editorial comment, but the Administrative Law Judge (ALJ) found that "there is no credible evidence that the District's eventual capitulation to the demands of the CJA lawyers was made in response to public pressure, or, for that matter, that this publicity campaign actually engendered any significant measure of public pressure." 107 F.T.C., at 543. 
As the participating CJA lawyers had anticipated, their refusal to take new assignments had a severe impact on the District's criminal justice system. The massive flow of new cases did not abate,  and the need for prompt investigation and preparation did not ease. As the ALJ found, "there was no one to replace the CJA regulars, and makeshift measures were totally inadequate. A few days after the September 6 deadline, PDS was swamped with cases. The handful of CJA regulars who continued to take cases were soon overloaded. The overall response of the uptown lawyers to the PDS call for help was feeble, reflecting their universal distaste for criminal law, their special aversion for compelled indigency representation, the near epidemic siege of self-doubt about their ability to handle cases in this field, and their underlying support for the demands of the CJA lawyers. Most of the law student volunteers initially observed the boycott, and later all law student volunteers were limited (as they usually are) to a relatively few minor misdemeanors" (footnotes omitted). Id., at 544.
Within 10 days, the key figures in the District's criminal justice system "became convinced that the system was on the brink of collapse because of the refusal of CJA lawyers to take on new cases." Ibid. On September 15, they hand-delivered a letter to the Mayor describing why the situation was expected to "reach a crisis point" by early the next week and urging the immediate enactment of a bill increasing all CJA rates to $35 per hour. The Mayor promptly met with members of the strike committee and offered to support an immediate temporary increase to the $35 level as well as a subsequent permanent increase to $45 an hour for out-of-court time and $55 for in-court time.
At noon on September 19, 1983, over 100 CJA lawyers attended an SCTLA meeting and voted to accept the $35 offer and end the boycott. The city council's Judiciary Committee convened at 2 o'clock that afternoon. The committee recommended legislation increasing CJA fees to $35, and the council unanimously passed the bill on September 20. On September 21, the CJA regulars began to accept new assignments and the crisis subsided.
The Federal Trade Commission (FTC) filed a complaint against SCTLA and four of its officers (respondents) alleging that they had "entered into an agreement among themselves and with other lawyers to restrain trade by refusing to compete for or accept new appointments under the CJA program beginning on September 6, 1983, unless and until the District of Columbia increased the fees offered under the CJA program." Id., at 511. The complaint alleged that virtually all of the attorneys who regularly compete for or accept new appointments under the CJA program had joined the agreement. The FTC characterized respondents' conduct as "a conspiracy to fix prices and to conduct a boycott" and concluded that they were engaged in "unfair methods of competition in violation of Section 5 of the Federal Trade Commission Act." 
After a 3-week hearing, the ALJ found that the facts alleged in the complaint had been proved, and rejected each of the respondents' three legal defenses-that the boycott was adequately justified by the public interest in obtaining better legal representation for indigent defendants; that as a method of petitioning for legislative change it was exempt from the antitrust laws under our decision in Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961); and that it was a form of political action protected by the First Amendment under our decision in NAACP v. Claiborne Hardware Co., 458 U.S. 886, 102 S.Ct. 3409, 73 L.Ed.2d 1215 (1982). The ALJ nevertheless concluded that the complaint should be dismissed because the District officials, who presumably represented the victim of the boycott, recognized that its net effect was beneficial. The increase in fees would attract more CJA lawyers, enabling them to reduce their caseloads and provide better representation for their clients. "I see no point," he concluded, "in striving resolutely for an antitrust triumph in this sensitive area when the particular case can be disposed of on a more pragmatic basis-there was no harm done." 107 F.T.C., at 561.
The ALJ's pragmatic moderation found no favor with the FTC. Like the ALJ, the FTC rejected each of respondents' defenses. It held that their "coercive, concerted refusal to deal" had the "purpose and effect of raising prices" and was illegal per se. Id., at 573. Unlike the ALJ, the FTC refused to conclude that the boycott was harmless, noting that the "boycott forced the city government to increase the CJA fees from a level that had been sufficient to obtain an adequate supply of CJA lawyers to a level satisfactory to the respondents. The city must, as a result of the boycott, spend an additional $4 million to $5 million a year to obtain legal services for indigents. We find that these are substantial anticompetitive effects resulting from the respondents' conduct." Id., at 577. Finally, the FTC determined that the record did not support the ALJ's conclusion that the District supported the boycott. The FTC also held that such support would not in any event excuse respondents' antitrust violations. Accordingly, it 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." Id., at 602.
The Court of Appeals vacated the FTC order and remanded for a determination whether respondents possessed "significant market power." The court began its analysis by recognizing that absent any special First Amendment protection, the boycott "constituted a classic restraint of trade within the meaning of Section 1 of the Sherman Act."  272 U.S.App.D.C., at 280, 856 F.2d, at 234. The Court of Appeals was not persuaded by respondents' reliance on Claiborne Hardware or Noerr, or by their argument that the boycott was justified because it was designed to improve the quality of representation for indigent defendants. It concluded, however, that "the SCTLA boycott did contain an element of expression warranting First Amendment protection." 272 U.S.App.D.C., at 294, 856 F.2d, at 248. It noted that boycotts have historically been used as a dramatic means of expression and that respondents intended to convey a political message to the public at large. It therefore concluded that under United States v. O'Brien, 391 U.S. 367, 88 S.Ct. 1673, 20 L.Ed.2d 672 (1968), a restriction on this form of expression could not be justified unless it is no greater than is essential to an important governmental interest. This test, the court reasoned, could not be satisfied by the application of an otherwise appropriate per se rule, but instead required the enforcement agency to "prove rather than presume that the evil against which the Sherman Act is directed looms in the conduct it condemns." 272 U.S.App.D.C., at 296, 856 F.2d, at 250.
Because of our concern about the implications of the Court of Appeals' unique holding, we granted the FTC's petition for certiorari as well as respondents' cross-petition. 490 U.S. 1019, 109 S.Ct. 1741, 104 L.Ed.2d 179 (1989).
We consider first the cross-petition, which contends that respondents' boycott is outside the scope of the Sherman Act or is immunized from antitrust regulation by the First Amendment. We then turn to the FTC's petition.
Reasonable lawyers may differ about the wisdom of this enforcement proceeding. The dissent from the decision to file the complaint so demonstrates. So, too, do the creative conclusions of the ALJ and the Court of Appeals. 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 not our task to pass upon the social utility or political wisdom of price-fixing agreements.
As the ALJ, the FTC, and the Court of Appeals all agreed, respondents' boycott "constituted a classic restraint of trade within the meaning of Section 1 of the Sherman Act." 272 U.S.App.D.C., at 280, 856 F.2d, at 234. As such, it also violated the prohibition against unfair methods of competition in § 5 of the FTC Act. See FTC v. Cement Institute, 333 U.S. 683, 694, 68 S.Ct. 793, 800, 92 L.Ed. 1010 (1948). Prior to the boycott CJA lawyers were in competition with one another, each deciding independently whether and how often to offer to provide services to the District at CJA rates.  The agreement among the CJA lawyers was designed to obtain higher prices for their services and was implemented by a concerted refusal to serve an important customer in the market for legal services and, indeed, the only customer in the market for the particular services that CJA regulars offered. "This constriction of supply is the essence of 'price-fixing,' whether it be accomplished by agreeing upon a price, which will decrease the quantity demanded, or by agreeing upon an output, which will increase the price offered." 272 U.S.App.D.C., at 280, 856 F.2d, at 234. The horizontal arrangement among these competitors was unquestionably a "naked restraint" on price and output. See National Collegiate Athletic Assn. v. Board of Regents of Univ. of Okla., 468 U.S. 85, 110, 104 S.Ct. 2948, 2965, 82 L.Ed.2d 70 (1984).
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, 98 S.Ct. 1355, 1367, 55 L.Ed.2d 637 (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." 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' argument, like that made by the petitioners in Professional Engineers, ultimately asks us to find that their boycott is permissible because the price it seeks to set is reasonable. But it was settled shortly after the Sherman Act was passed that it "is no excuse that the prices fixed are themselves reasonable. See, e.g., United States v. Trenton Potteries Co., 273 U.S. 392, 397-398, 47 S.Ct. 377, 379-380, 71 L.Ed. 700 (1927); United States v. Trans-Missouri Freight Assn., 166 U.S. 290, 340-341, 17 S.Ct. 540, 558-559, 41 L.Ed. 1007 (1897)." Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643, 647, 100 S.Ct. 1925, 1928, 64 L.Ed.2d 580 (1980). Respondents' agreement is not outside the coverage of the Sherman Act simply because its objective was the enactment of favorable legislation.
Our decision in Noerr in no way detracts from this conclusion. In Noerr, we "considered whether the Sherman Act prohibited a publicity campaign waged by railroads" and "designed to foster the adoption of laws destructive of the trucking business, to create an atmosphere of distaste for truckers among the general public, and to impair the relationships existing between truckers and their customers." Claiborne Hardware, 458 U.S., at 913, 102 S.Ct., at 3425. Interpreting the Sherman Act in the light of the First Amendment's Petition Clause, the Court noted that "at least insofar as the railroads' campaign was directed toward obtaining governmental action, its legality was not at all affected by any anticompetitive purpose it may have had." 365 U.S., at 139-140, 81 S.Ct., at 530-531.
It of course remains true that "no violation of the Act can be predicated upon mere attempts to influence the passage or enforcement of laws," id., at 135, 81 S.Ct., at 528, even if the defendants' sole purpose is to impose a restraint upon the trade of their competitors, id., at 138-140, 81 S.Ct., at 530-531. But in the Noerr case the alleged restraint of trade was the intended consequence of public action; in this case the boycott was the means by which respondents sought to obtain favorable legislation. 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.
Indeed, respondents' theory of Noerr was largely disposed of by our opinion in Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 108 S.Ct. 1931, 100 L.Ed.2d 497 (1988). We held that the Noerr doctrine does not extend to "every concerted effort that is genuinely intended to influence governmental action." 486 U.S., at 503, 108 S.Ct., at 1938. We explained:
"If all such conduct were immunized then, for example, competitors would be free to enter into horizontal price agreements as long as they wished to propose that price as an appropriate level for governmental ratemaking or price supports. But see Georgia v. Pennsylvania R. Co. 324 U.S. 439, 456-463[, 65 S.Ct. 716, 725-729, 89 L.Ed. 1051] (1945). Horizontal conspiracies or boycotts designed to exact higher prices or other economic advantages from the government would be immunized on the ground that they are genuinely intended to influence the government to agree to the conspirators' terms. But see Georgia v. Evans, 316 U.S. 159 [62 S.Ct. 972, 86 L.Ed. 1346] (1942). Firms could claim immunity for boycotts or horizontal output restrictions on the ground that they are intended to dramatize the plight of their industry and spur legislative action." Ibid.
SCTLA argues that if its conduct would otherwise be prohibited by the Sherman Act and the Federal Trade Commission Act, it is nonetheless protected by the First Amendment rights recognized in NAACP v. Claiborne Hardware Co., 458 U.S. 886, 102 S.Ct. 3409, 73 L.Ed.2d 1215 (1982). That case arose after black citizens boycotted white merchants in Claiborne County, Mississippi. The white merchants sued under state law to recover losses from the boycott. We found that the "right of the States to regulate economic activity could not justify a complete prohibition against a nonviolent, politically motivated boycott designed to force governmental and economic change and to effectuate rights guaranteed by the Constitution itself." Id., at 914, 102 S.Ct., at 3426. We accordingly held that "the nonviolent elements of petitioners' activities are entitled to the protection of the First Amendment." Id., at 915, 102 S.Ct., at 3426.
SCTLA contends that because it, like the boycotters in Claiborne Hardware, 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. It is true that the Claiborne Hardware case also involved a boycott. That boycott, however, differs in a decisive respect. Those who joined the Claiborne Hardware boycott sought no special advantage for themselves. They were black citizens in Port Gibson, Mississippi, who had been the victims of political, social, and economic discrimination for many years. They sought only the equal respect and equal treatment to which they were constitutionally entitled. They struggled "to change a social order that had consistently treated them as second class citizens." Id., at 912, 102 S.Ct., at 3425. As we observed, the campaign was not intended "to destroy legitimate competition." Id., at 914, 102 S.Ct., at 3426. Equality and freedom are preconditions of the free market, and not commodities to be haggled over within it.
The same cannot be said of attorney's fees. As we recently pointed out, our reasoning in 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." Allied Tube & Conduit Corp. v. Indian Head, Inc., supra, at 508, 108 S.Ct., at 1941.  No matter how altruistic the motives of respondents may have been, it is undisputed that their immediate objective was to increase the price that they would be paid for their services. Such an economic boycott is well within the category that was expressly distinguished in the Claiborne Hardware opinion itself. 458 U.S., at 914-915, 102 S.Ct., at 3426-3427. 
Only after recognizing the well-settled validity of prohibitions against various economic boycotts did we conclude in Claiborne Hardware that "peaceful, political activity such as that found in the [Mississippi] boycott" are entitled to constitutional protection.  We reaffirmed the government's "power to regulate [such] economic activity." Id., at 912-913, 102 S.Ct., at 3425-3427. This conclusion applies with special force when a clear objective of the boycott is to economically advantage the participants.
Respondents' concerted action in refusing to accept further CJA assignments until their fees were increased was thus a plain violation of the antitrust laws. The exceptions derived from Noerr and Claiborne Hardware have no application to respondents' boycott. For these reasons we reject the arguments made by respondents in the cross-petition.
The Court of Appeals, however, crafted a new exception to the per se rules, and it is this exception which provoked the FTC's petition to this Court. The Court of Appeals derived its exception from United States v. O'Brien, 391 U.S. 367, 88 S.Ct. 1673, 20 L.Ed.2d 672 (1968). In that case O'Brien had burned his Selective Service registration certificate on the steps of the South Boston Courthouse. He did so before a sizable crowd and with the purpose of advocating his antiwar beliefs. We affirmed his conviction. We held that the governmental interest in regulating the "nonspeech element" of his conduct adequately justified the incidental restriction on First Amendment freedoms.  Specifically, we concluded that the statute's incidental restriction on O'Brien's freedom of expression was no greater than necessary to further the Government's interest in requiring registrants to have valid certificates continually available.
However, the Court of Appeals held that, in light of O'Brien, the expressive component of respondents' boycott compelled courts to apply the antitrust laws "prudently and with sensitivity," 272 U.S.App.D.C., at 279-280, 856 F.2d, at 233-234, with a "special solicitude for the First Amendment rights" of respondents. The Court of Appeals concluded that the governmental interest in prohibiting boycotts is not sufficient to justify a restriction on the communicative element of the boycott unless the FTC can prove, and not merely presume, that the boycotters have market power. Because the Court of Appeals imposed this special requirement upon the government, it ruled that per se antitrust analysis was inapplicable to boycotts having an expressive component.
There are at least two critical flaws in the Court of Appeals' antitrust analysis: it exaggerates the significance of the expressive component in respondents' boycott and it denigrates the importance of the rule of law that respondents violated. Implicit in the conclusion of the Court of Appeals are unstated assumptions that most economic boycotts do not have an expressive component, and that the categorical prohibitions against price fixing and boycotts are merely rules of "administrative convenience" that do not serve any substantial governmental interest unless the price-fixing competitors actually possess market power.
It would not much matter to the outcome of this case if these flawed assumptions were sound. O'Brien would offer respondents no protection even if their boycott were uniquely expressive and even if the purpose of the per se rules were purely that of administrative efficiency. We have recognized that the government's interest in adhering to a uniform rule may sometimes satisfy the O'Brien test even if making an exception to the rule in a particular case might cause no serious damage. United States v. Albertini, 472 U.S. 675, 688, 105 S.Ct. 2897, 2906, 86 L.Ed.2d 536 (1985) ("The First Amendment does not bar application of a neutral regulation that incidentally burdens speech merely because a party contends that allowing an exception in the particular case will not threaten important government interests"). The administrative efficiency interests in antitrust regulation are unusually compelling. The per se rules avoid "the necessity for an incredibly complicated and prolonged economic investigation into the entire history of the industry involved, as well as related industries, in an effort to determine at large whether a particular restraint has been unreasonable." Northern Pacific R. Co. v. United States, 356 U.S. 1, 5, 78 S.Ct. 514, 518, 2 L.Ed.2d 545 (1958). If small parties "were allowed to prove lack of market power, all parties would have that right, thus introducing the enormous complexities of market definition into every price-fixing case." R. Bork, The Antitrust Paradox 269 (1978). For these reasons, it is at least possible that the Claiborne Hardware doctrine, which itself rests in part upon O'Brien,  exhausts O'Brien's application to the antitrust statutes.
In any event, however, we cannot accept the Court of Appeals' characterization of this boycott or the antitrust laws. Every concerted refusal to do business with a potential customer or supplier has an expressive component. At one level, the competitors must exchange their views about their objectives and the means of obtaining them. The most blatant, naked price-fixing agreement is a product of communication, but that is surely not a reason for viewing it with special solicitude. At another level, after the terms of the boycotters' demands have been agreed upon, they must be communicated to its target: "[W]e will not do business until you do what we ask." That expressive component of the boycott conducted by these respondents is surely not unique. On the contrary, it is the hallmark of every effective boycott.
At a third level, the boycotters may communicate with third parties to enlist public support for their objectives; to the extent that the boycott is newsworthy, it will facilitate the expression of the boycotters' ideas. But this level of expression is not an element of the boycott. Publicity may be generated by any other activity that is sufficiently newsworthy. Some activities, including the boycott here, may be newsworthy precisely for the reasons that they are prohibited: the harms they produce are matters of public concern. Certainly that is no reason for removing the prohibition.
In sum, there is thus nothing unique about the "expressive component" of respondents' boycott. A rule that requires courts to apply the antitrust laws "prudently and with sensitivity" whenever an economic boycott has an "expressive component" would create a gaping hole in the fabric of those laws. Respondents' boycott thus has no special characteristics meriting an exemption from the per se rules of antitrust law.
Equally important is the second error implicit in respondents' claim to immunity from the per se rules. In its opinion, the Court of Appeals assumed that the antitrust laws permit, but do not require, the condemnation of price fixing and boycotts without proof of market power.  The opinion further assumed that the per se rule prohibiting such activity "is only a rule of 'administrative convenience and efficiency,' not a statutory command." 272 U.S.App.D.C., at 295, 856 F.2d, at 249. This statement contains two errors. The per se rules are, of course, the product of judicial interpretations of the Sherman Act, but the rules nevertheless have the same force and effect as any other statutory commands. Moreover, while the per se rule against price fixing and boycotts is indeed justified in part by "administrative convenience," the Court of Appeals erred in describing the prohibition as justified only by such concerns. The per se rules also reflect a longstanding judgment that the prohibited practices by their nature have "a substantial potential for impact on competition." Jefferson Parish Hospital District No. 2 v. Hyde, 466 U.S. 2, 16, 104 S.Ct. 1551, 1560, 80 L.Ed.2d 2 (1984).
As we explained in Professional Engineers, the rule of reason in antitrust law generates
"two complementary categories of antitrust analysis. In the first category are agreements whose nature and necessary effect are so plainly anticompetitive that no elaborate study of the industry is needed to establish their illegality-they are 'illegal per se.' In the second category are agreements whose competitive effect can only be evaluated by analyzing the facts peculiar to the business, the history of the restraint, and the reasons why it was imposed." 435 U.S., at 692, 98 S.Ct., at 1365.
"Once experience with a particular kind of restraint enables the Court to predict with confidence that the rule of reason will condemn it, it has applied a conclusive presumption that the restraint is unreasonable." Arizona v. Maricopa County Medical Society, 457 U.S. 332, 344, 102 S.Ct. 2466, 2473, 73 L.Ed.2d 48 (1982).
The per se rules in antitrust law serve purposes analogous to per se restrictions upon, for example, stunt flying in congested areas or speeding. Laws prohibiting stunt flying or setting speed limits are justified by the State's interest in protecting human life and property. Perhaps most violations of such rules actually cause no harm. No doubt many experienced drivers and pilots can operate much more safely, even at prohibited speeds, than the average citizen.
If the especially skilled drivers and pilots were to paint messages on their cars, or attach streamers to their planes, their conduct would have an expressive component. High speeds and unusual maneuvers would help to draw attention to their messages. Yet the laws may nonetheless be enforced against these skilled persons without proof that their conduct was actually harmful or dangerous.
In part, the justification for these per se rules is rooted in administrative convenience. They are also supported, however, by the observation that every speeder and every stunt pilot poses some threat to the community. An unpredictable event may overwhelm the skills of the best driver or pilot, even if the proposed course of action was entirely prudent when initiated. A bad driver going slowly may be more dangerous than a good driver going quickly, but a good driver who obeys the law is safer still.
So it is with boycotts and price fixing.  Every such horizontal arrangement among competitors poses some threat to the free market. A small participant in the market is, obviously, less likely to cause persistent damage than a large participant. Other participants in the market may act quickly and effectively to take the small participant's place. For reasons including market inertia and information failures, however, a small conspirator may be able to impede competition over some period of time.  Given an appropriate set of circumstances and some luck, the period can be long enough to inflict real injury upon particular consumers or competitors. 
As Justice Douglas observed in an oft-quoted footnote to his United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129 (1940), opinion:
"Price-fixing agreements may or may not be aimed at complete elimination of price competition. The group making those agreements may or may not have power to control the market. But the fact that the group cannot control the market prices does not necessarily mean that the agreement as to prices has no utility to the members of the combination. The effectiveness of price-fixing agreements is dependent on many factors, such as competitive tactics, position in the industry, the formula underlying pricing policies. Whatever economic justification particular price-fixing agreements may be thought to have, the law does not permit an inquiry into their reasonableness. They are all banned because of their actual or potential threat to the central nervous system of the economy." Id., at 225-226, n. 59, 60 S.Ct., at 846, n. 59.
See also Maricopa County Medical Society, 457 U.S., at 351, and n. 23, 102 S.Ct., at 2476, and n. 23.
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. But an assumption that, absent proof of market power, the boycott disclosed by this record was totally harmless-when overwhelming testimony demonstrated that it almost produced a crisis in the administration of criminal justice in the District and when it achieved its economic goal-is flatly inconsistent with the clear course of our antitrust jurisprudence. 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, to warrant condemnation under the antitrust laws.
The judgment of the Court of Appeals is accordingly reversed insofar as that court held the per se rules inapplicable to the lawyers' boycott.  The case is remanded for further proceedings consistent with this opinion. 
It is so ordered.
"Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are declared unlawful."
The First Amendment to the Constitution provides:
"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."
^2 D.C.Code §§ 11-2601-11-2609 (1981). In a small number of cases, the indigent defendants were represented by third-year law students or private counsel serving without compensation.
^3 As the Administrative Law Judge (ALJ) noted:
"Because of the nature of CJA practice-its long hours away from the office (assuming the CJA lawyer has an office), the deadlines of Superior Court, and the problem of meeting deadlines in other courts-CJA regulars ordinarily do not take civil cases, nor do they usually appear on the criminal side of U.S. District court." In re Superior Court Trial Lawyers Assn., 107 F.T.C. 510, 522, n. 54 (1986).
^4 The ALJ found that "at most" 13 of the CJA regulars continued to take assignments. 107 F.T.C., at 542, n. 173.
^5 It is not clear how much of this finding by the ALJ was accepted by the Federal Trade Commission (FTC or Commission). The Court of Appeals suggested that the finding was implicitly rejected by the Commission because not expressly accepted. See 272 U.S.App.D.C. 272, 297, 856 F.2d 226, 251 (1988). We do not rely upon the finding, and need not decide whether the Commission did indeed reject it. We note, however, that the Commission endorsed findings attributing the District's eventual change of position to a crisis resulting from the lawyers' exercise of power. 107 F.T.C., at 572, and n. 69. Those findings seem to embody the conclusion that the reversal is not attributable to public pressure or publicity.
^6 "During the period from September 6 to September 20, there was a daily average of 63 defendants on the weekday lock-up list and 43 on the Saturday list." Id., at 543, n. 183.
^7 Commissioner Pertschuk dissented from the decision to issue a complaint on the ground that it represented an unwise use of the FTC's scarce resources. He did not, however, disagree with the conclusion that a violation of law had been alleged. 107 F.T.C., at 512-513.
"Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding one million dollars if a corporation, or, if any other person, one hundred thousand dollars, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court."
^9 The FTC found:
" '[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 Court of Appeals agreed with this analysis:
"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. 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).
^10 "In [Claiborne Hardware] we held that the First Amendment protected the nonviolent elements of a boycott of white merchants organized by the National Association for the Advancement of Colored People and designed to make white government and business leaders comply with a list of demands for equality and racial justice. Although the boycotters intended to inflict economic injury on the merchants, the boycott was not motivated by any desire to lessen competition or to reap economic benefits but by the aim of vindicating rights of equality and freedom lying at the heart of the Constitution, and the boycotters were consumers who did not stand to profit financially from a lessening of competition in the boycotted market. Id., at 914-915, 102 S.Ct., at 3426-3427. Here, in contrast, petitioner was at least partially motivated by the desire to lessen competition, and, because of petitioner's line of business, stood to reap substantial economic benefits from making it difficult for respondent to compete." Allied Tube & Conduit Corp., 486 U.S., at 508-509, 108 S.Ct., at 1941.
^11 Respondents contend that, just as the Claiborne Hardware boycott sought to secure constitutional rights to equality and freedom, the lawyers' boycott sought to vindicate the Sixth Amendment rights of indigent defendants. Claiborne Hardware, however, does not protect every boycott having a constitutional dimension. Indeed, insofar as respondents seek immunity from prosecution on the basis of their good intent, their theory of defense "is merely another variety of an age-old argument." See United States v. Cullen, 454 F.2d 386, 392 (CA7 1971). Claiborne Hardware does not, and could not, establish a rule immunizing from prosecution any boycott based upon sincere constitutional concerns. Such an exemption would authorize the government's contractors in nearly all areas to circumvent antitrust law on the basis of their own theory of the government's obligations.
^12 "A nonviolent and totally voluntary boycott may have a disruptive effect on local economic conditions. This Court has recognized the strong governmental interest in certain forms of economic regulation, even though such regulation may have an incidental effect on rights of speech and association. See Giboney v. Empire Storage & Ice Co., 336 U.S. 490 [69 S.Ct. 684, 93 L.Ed. 834 (1949) ]; NLRB v. Retail Store Employees, 447 U.S. 607 [100 S.Ct. 2372, 65 L.Ed.2d 377 (1980) ]. The right of business entities to 'associate' to suppress competition may be curtailed. National Society of Professional Engineers v. United States, 435 U.S. 679 [98 S.Ct. 1355, 55 L.Ed.2d 637 (1978) ]. Unfair trade practices may be restricted. Secondary boycotts and picketing by labor unions may be prohibited, as part of 'Congress' striking of the delicate balance between union freedom of expression and the ability of neutral employers, employees, and consumers to remain free from coerced participation in industrial strife.' NLRB v. Retail Store Employees, supra, at 617-618 [100 S.Ct., at 2378-2379] (BLACKMUN, J., concurring in part). See Longshoremen v. Allied International, Inc., 456 U.S. 212, 222-223, and n. 20 [102 S.Ct. 1656, 1662-1663, and n. 20, 72 L.Ed.2d 21 (1982) ]." 458 U.S., at 912, 102 S.Ct., at 3425.
^13 "This Court has held that 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 First Amendment freedoms. . . . [W]e think it clear that 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 First Amendment freedoms is no greater than is essential to the furtherance of that interest." 391 U.S., at 376-377, 88 S.Ct., at 1678-1679.
^15 In our opinion in Jefferson Parish Hospital District No. 2 v. Hyde, 466 U.S. 2, 104 S.Ct. 1551, 80 L.Ed.2d 2 (1984), we noted that "[t]he rationale for per se rules in part is to avoid a burdensome inquiry into actual market conditions in situations where the likelihood of anticompetitive conduct is so great as to render unjustified the costs of determining whether the particular case at bar involves anticompetitive conduct. See, e.g., Arizona v. Maricopa County Medical Society, 457 U.S. 332, 350-351 [102 S.Ct. 2466, 2476-2477, 73 L.Ed.2d 48] (1982)." Id., at 15-16, n. 25, 104 S.Ct., at 1559-1560, n. 25. The Court of Appeals overlooked the words "in part" in that footnote, and also overlooked the statement in text that "there must be a substantial potential for impact on competition in order to justify per se condemnation." Id., at 16, 104 S.Ct., at 1560. As the following paragraph from its opinion demonstrates, the Court of Appeals incorrectly assumed that the per se rule against price fixing is "only" a rule of administrative convenience:
"The antitrust laws permit, but do not require, the condemnation of price fixing without proof of market power; even the per se rule, as the Commission acknowledges in its brief, is only a rule of 'administrative convenience and efficiency,' not a statutory command. FTC Brief at 39; see Jefferson Parish Hospital Dist. No. 2 v. Hyde, 466 U.S. 2, 15 n. 25 [104 S.Ct. 1551, 1560 n. 25, 80 L.Ed.2d 2] (1984). While the rule may occasionally be overinclusive, condemning the ineffectual with the harmful, there is no known danger that socially beneficial arrangements will be prohibited, for price-fixing agreements rarely, if ever, have redeeming virtues. As for the hapless but harmless, as Professor Areeda has noted, defendants charged with conspiring to fix prices 'have little moral standing to demand proof of power or effect when the most they can say for themselves is that they tried to harm the public but were mistaken in their ability to do so.' VII P. Areeda, Antitrust Law ¶ 1509 at 411 (1986)." 272 U.S.App.D.C., at 295, 856 F.2d, at 249.
^16 "In sum, price-fixing cartels are condemned per se because the conduct is tempting to businessmen but very dangerous to society. The conceivable social benefits are few in principle, small in magnitude, speculative in occurrence, and always premised on the existence of price-fixing power which is likely to be exercised adversely to the public. Moreover, toleration implies a burden of continuous supervision for which the courts consider themselves ill-suited. And even if power is usually established while any defenses are not, litigation will be complicated, condemnation delayed, would be price-fixers encouraged to hope for escape, and criminal punishment less justified. Deterrence of a generally pernicious practice would be weakened. The key points are the first two. Without them, there is no justification for categorical condemnation." 7 P. Areeda, Antitrust Law ¶ 1509, pp. 412-413 (1986).
^17 Cf. Markovits, The Limits to Simplifying Antitrust: A Reply to Professor Easterbrook, 63 Texas L.Rev. 41, 80 (1984) (suggesting circumstances in which a firm that lacks market power may nonetheless benefit from anti-competitive tactics).
^18 "Very few firms that lack power to affect market prices will be sufficiently foolish to enter into conspiracies to fix prices. Thus, the fact of agreement defines the market." R. Bork, The Antitrust Paradox 269 (1978).
^19 In response to Justice BRENNAN's opinion, and particularly to its observation that some concerted arrangements that might be characterized as "group boycotts" may not merit per se condemnation, see post, at 452, n. 9, we emphasize that this case involves not only a boycott but also a horizontal price-fixing arrangement-a type of conspiracy that has been consistently analyzed as a per se violation for many decades. All of the "group boycott" cases cited in Justice BRENNAN's footnote involved nonprice restraints. There was likewise no price-fixing component in any of the boycotts listed on pages 447-448 of Justice BRENNAN's opinion. Indeed, the text of the opinion virtually ignores the price-fixing component of respondents' concerted action.
|This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).|