Analysis of Trade and Professional Association Horizontal Restraints Under Section 1 of the Sherman Act

A. Proof of Contract, Combination, or Conspiracy
To prevail un der Section 1 of the Sherman Act, a plaintiff first must
establish a “contract, combination . . . or conspiracy.”
There are two
notable aspects of this r equirement in the contex t of lawsuits involving
First, a plaintiff must show that there was an agreement between
independent actors, because Section 1 does not reach unilateral conduct.
Defendants have invoked the Supreme Cour t’s decision in Copperweld
Corp. v. Independence Tube Corp.
to argue that a trade association is a
single economic entity, the members of which are incapable of
conspiring with each other. When faced with this argument, courts have
asked whet her the defendants have common goals and a unity of
economic interests, or whether the assoc iation “bring[s] together
economic power that was previously pursuing divergent goals.”
example, in Jack Russell Terrier Net work of Northern California v.
American Kennel Club,
the court held that the defendant association
and its regional affiliates were incapable of conspiring because they
were not competitors of one another and instead shared common goals.
Similarly, in JES Properties, Inc. v. USA Equestrian,
the court held that
the defendant association and individual promoters did not conspire.
By contrast, in Gregory v. For t Bridger Rendezvous Association,
court held that the defendant association “represent[ed] a plurality of
actors necessary to establish concerted action under the Sherman Act”
1. 15 U.S.C. § 1.
2. 467 U.S. 752 (1984).
3. Id. at 769.
4. 407 F.3d 1027 (9th Cir. 2005) .
5. Id. at 1034-36.
6. 2005 U.S. Dist. LEXIS 43122 (M.D. Fla. 2 005).
7. Id. at *40-44.
8. 448 F.3d 1195 (10th Cir. 2006 ).
Antitrust and Associations Handbook
because the members of the association had a direct economic interest in
limiting the number of entities, members, and nonmembers that could
sell goods at the association’s rendezvous.
This question often a rises in
cases involving sports leagues.
The second significant aspect of the concerted act ion question in the
association context is which actions of association representatives can be
said to be the product of an agreement. While associations consist of
separate entities, they are not simply “continuing conspiracies,” and a
blanket rule that any action by an association member or representative
was concerted action “would seriously undermine the standards
articulated by the Supreme Court in Matsushita and Monsanto.
Instead, “an associ ation’s actions satisfy the concerted action
requirement only when taken in a group capacity” and when they can be
9. Id. at 1201; see also Freeman v. San Diego Ass’n of Rea ltors, 322 F.3d
1133, 1147-50 (9th Cir. 2003) (analyzing “single-entity” prece dents and
holding that because defendant associations were not a single entity their
joint venture could be challenged under Section 1).
10. See, e.g., Nat’l Hockey League Players Ass’n v. Plymouth Whalers
Hockey Club, 419 F.3d 462, 469-70 (6th Cir. 2005) (member teams of
hockey league constituted plurality of a ctors when they adopted eligibility
rules); Fraser v. Major League Soccer, 284 F.3d 47, 55-58 (1st Cir. 2002)
(court of appeals declined to hold that sports leagues are always single
entities, and held that it need not determine whether soccer league
constituted single entity for antitrust purposes in light of plaintiff’s failure
to define relevant market); Chicago Prof’l Spor ts v. NBA, 95 F.3d 593
(7th Cir. 1996) (when acting in broadcast market, professional b asketball
league was more like a single firm than a group of competitors); Am.
Needle, Inc. v. New Orleans Louisiana Saints, 496 F. Supp. 2d 941 (N.D.
Ill. 2007) (members of pro fessional football league were a single entity
and incapable of conspiring to violate the antitrust laws), aff’d, 538 F.3d
736 (7th Cir. 2008).
11. AD/SAT v. Associated Press, 181 F.3d 216, 234 (2d Cir. 1999) (“every
action by a trade association is not conce rted action by the association’s
members”); see also Viazis v. Am. Ass’n of Orthodontists, 314 F.3d 758,
764 (5th Cir. 2002) (concerted action not shown where plaintiff was
unable to show there had been a membership vote or o ther formal
decisionmaking process by the a ssociation, nor did plaintiff show that
individual members took action with apparent authority of the
association); Wilk v. Am. Med. Ass’n, 895 F.2d 352, 374 (7th Cir. 199 0)
(“a tr ade association is not, just because it involves collective action by
competitors, a ‘walking conspiracy’”) (citing Consol. Metal P rods. v. Am.
Petroleum Inst., 846 F.2d 284, 293-94 ( 5th Cir. 1988)).

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