§21.6 - Antitrust Issues Under the CPA
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§21.6 ANTITRUST ISSUES UNDER THE CPA
The CPA includes provisions for antitrust claims similar to those under federal antitrust law, that is, prohibitions on unfair methods of competition and unfair or deceptive acts or practices, RCW 19.86.020; contracts, combinations, or conspiracies in restraint of trade, RCW 19.86.030; and monopolization or attempts to monopolize, RCW 19.86.040. Boeing Co. v. Sierracin Corp., 108 Wn.2d 38, 54, 738 P.2d 665 (1987).
(1) Generally
Communications with a government agency generally are immune from antitrust liability under the first amendment of the United States Constitution unless such contacts are a mere sham, taken only to interfere with free competition and without reason to expect resulting lawful governmental action. Boeing Co., 108 Wn.2d at 56.
The CPA applies to antitrust as well as consumer protection issues involving real property. See, e.g., RCW 19.86.030, .040; State v. Black, 100 Wn.2d 793, 676 P.2d 963 (1984). The few Washington appellate decisions discussing antitrust claims and real property have dealt with issues commonly encountered in such cases in other jurisdictions (i.e., price fixing, tying, and group boycotts), all in the context of real estate broker relationships and commissions.
An antitrust claim can constitute a valid defense to enforcement of a contract only if enforcement of the contract would itself require unlawful conduct. Boeing Co., 108 Wn.2d at 53. In deciding antitrust cases under the CPA, courts are to be guided by federal decisions dealing with the same or similar matters. Id. However, Washington decisions with respect to antitrust violations under the CPA at times will vary from rules under federal case law. For example, the Washington Supreme Court has declined to adopt "dangerous probability of success " as an element for an attempt to monopolize claim, id. at 59 (emphasis added), thus creating a test for this offense that is different from that enunciated by the United States Supreme Court in Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456, 113 S.Ct. 884, 122 L.Ed.2d 247 (1993).
Contracts entered into for legitimate business purposes do not violate the CPA. Boeing Co., 108 Wn.2d at 56 (citing Black, 100 Wn.2d at 802-03). Injury and damages are essential elements of an antitrust action and require a showing of a causal connection between the allegedly unlawful acts and the alleged loss by plaintiff. Boeing Co., 108 Wn.2d at 61 (citing Consol. Dairy Prods. Co. v. Bar-T Ranch Dairy, Inc., 97 Wn.2d 167, 179-80, 642 P.2d 1240 (1982)).
(2) Price fixing
Concerted activities by real estate brokers to fix, maintain, or stabilize real estate sales commission rates constitute illegal price fixing—a per se violation of the antitrust laws. United States v. Nat'l Ass'n of Real Estate Bds., 339 U.S. 485, 70 S.Ct. 711, 94 L.Ed. 1007 (1950). United States v. Jack Foley Realty, Inc., 1977-2 Trade Cas. (CCH) ¶61,678 (D. Md. July 29, 1977); United States v. Multiple Listing Serv., 1973-1 Trade Cas. (CCH) ¶74,515 (D. Or. June 29, 1973).
The first case by the Washington Attorney General under the CPA alleging illegal price fixing of real estate commission rates, State v. Black, 100 Wn.2d 793, 803, 676 P.2d 963 (1984), resulted in the entry of a consent decree for injunction, civil penalties, costs, and attorney fees. Id. at app.; State ex rel. Gorton v. Multiple Listing Serv. of Spokane, Inc., 1974-2 Trade Cas. (CCH) ¶75,439 (Dec. 20, 1974). The second such case, State v. Black, 1980-81 Trade Cas. (CCH) ¶63,744 (Jan. 21, 1981), contained broader allegations, including conspiracy to fix commission rates; unfair business practices and unfair methods of competition; conspiracy to discriminate against, to refuse to deal with, and to disparage competitors who charged lower commission rates; and violation of an injunction issued in State v. Multiple Listing Service.
Although Black resulted in a consent decree with the Spokane Board of Realtors, the entity controlling the Spokane Multiple Listing Service, Black, 100 Wn.2d at 795, the remaining defendants went on trial and obtained a favorable decision on all causes of action, with the court holding that (1) the state had failed to meet its burden of proof to demonstrate price fixing by the defendant realtors and multiple listing service and (2) the evidence that established that the area realtors uniformly responded to price cutting by the transmittal of letters offering reduced commission splits was insufficient to demonstrate a conspiracy to fix prices.
The trial court further rejected the state's contentions that certain realtor practices should be banned on account of their propensity toward illegal conduct and held that the following constituted valid and lawful business practices in the real estate sales industry: (1) publication of realtor listings with commissions and commission splits offered; (2) negotiation of commission splits between participating brokers and without customer participation; and (3) negotiation of reciprocal split agreements between brokers. Finally, the trial court awarded attorney fees against the state and in favor of defendants as prevailing parties under RCW 19.86.080.
On appeal, the Attorney General challenged (1) the attorney fees award, (2) the decision that defendants' conduct did not constitute an unfair method of competition, and (3) the finding that defendant Black had not violated the 1974 consent decree. In the first opinion to analyze in any detail an unfair method of competition claim under RCW 19.86.020, the Washington Supreme Court affirmed the trial court's dismissal of the unfair method of competition claim and attorney fees award, but reversed the trial court's decision that defendant Black had not violated the 1974 consent decree. Black, 100 Wn.2d 793.
For decisions in other jurisdictions reaching issues similar to those in State v. Black, see State ex rel. MacFarlane v. Colorado Springs Board of Realtors, Inc., 1980-81 Trade Cas. (CCH) ¶63,653 (D. Colo. Nov. 20, 1980) (refusal by multiple listing service to publish fixed fee commissions constitutes concerted activity to fix prices), rev'd en banc by People ex rel. Woodard v. Colorado Springs Bd. of Realtors,...
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