What encompasses petitioning?

• Pages: 49-86

49

CHAPTER IV

WHAT ENCOMPASSES PETITIONING?

The Noerr-Pennington doctrine is premised upon governmental

approval of anticompetitive conduct, not a generalized right to act

anticompetitively to compel governmental approval, or to act based upon

an internal perception of expected approval. 1 Therefore, the Noerr-

Pennington doctrine does not permit the petitioner to resort to otherwise

impermissible actions to obtain governmental favor, such as group

boycotts. Likewise, Noerr-Pennington does not operate retroactively to

immunize anticompetitive action that occurs in advance of governmental

approval. This chapter considers the boundaries of petitioning for

purposes of determining the applicability of the Noerr-Pennington

doctrine, and the conduct that falls within and outside those boundaries.

A. Agreements to Seek Redress

The protections of the Noerr doctrine can extend beyond the right of

an individual or single entity to seek redress. For example, concerted

efforts among competitors to petition government officials are, as a

general matter, protected by the Noerr doctrine.2 However, not all efforts

intended to influence the government are entitled to Noerr immunity.3 In

FTC v. Superior Court Trial Lawyers Ass’n (SCTLA),4 the Supreme

1. See In re Tamoxifen Citrate Antitrust Litig., 466 F.3d 187, 217 (2d Cir.

2006) (finding that Noerr-Pennington does not shield “anticompetitive

action in advance of the government’s adopting industry’s

anticompetitive standard”); A.D. Bedell Wholesale Co. v. Philip Morris

Inc., 263 F.3d 239, 251 (3d Cir. 2001) (“If the restraint results from

private action there is no immunity. . . . Passive government approval is

insufficient.”).

2. Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 499

(1988); E. R.R. Presidents Conference v. Noerr Motor Freight, 365 U.S.

127, 145 (1961).

3. Allied Tube, 486 U.S. at 503-04.

4. 493 U.S. 411 (1990).

50 The Noerr-Pennington Doctrine

Court held that a group boycott against the District of Columbia,

organized by an association of private trial lawyers seeking higher rates

for court-appointed legal services provided by its members to indigent

clients, was not petitioning activity protected by Noerr.5

In SCTLA, the Court noted that Allied Tube & Conduit Corp. v.

Indian Head, Inc.6 specifically condemned a group of competitors

employing concerted anticompetitive conduct as a means of obtaining a

favorable governmental outcome.7 As the Court observed in Allied Tube,

blanket immunity for any concerted action so long as it was intended to

obtain favorable governmental action would result in “competitors [being]

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.”8

The Court in SCTLA also rejected arguments comparing the effort s

of the trial lawyers to those of the civil rights movement in NAACP v.

Claiborne Hardware.9 In Claiborne Hardware, the National Association

for the Advancement of Colored People (NAACP) organized a boycott

of white merchants “to secure compliance by both civic and business

leaders with a lengthy list of demands for equality and racial justice.”10

The Court in SCTLA noted that Black citizens participating in the boycott

in Claiborne Hardware “sought no special advantage for themselves,”

but instead, sought to upend “a social order that had consistently treated

them as second class citizens.”11 By contrast, the trial lawyers’ boycott in

SCTLA was organized by those “who stand to profit financially from a

lessening of competition in the boycotted market,”12 and therefore did

not enjoy immunity from antitrust liability.13

Under SCTLA, economically motivated group boycotts are illegal as

a form of “forced petitioning.” Individuals, or even groups of

competitors, remain free to petition the government for economic

5. Id. at 424-25.

6. 486 U.S. 492 (1988).

7. SCTLA, 493 U.S. at 425.

8. Id. (quoting Allied Tube, 486 U.S. at 503).

9. 458 U.S. 886 (1982).

10. Id. at 907.

11. SCTLA, 493 U.S. at 426 (quoting Claiborne Hardware, 458 U.S. at 912).

12. Id. at 427 (quoting Allied Tube, 486 U.S. at 508).

13. Id.

What Encompasses Petitioning?

51

advantage, but must not seek to accomplish their goals through illegal

boycotts.14

The distinction is one of degrees, largely based on the core self-

interest of the organizers. Because Noerr immunity may be rooted in

First Amendment jurisprudence, the lack of protection for economically

motivated boycotts is consistent with the reduced protection for

commercial speech generally. 15 And even a political boycott can be

regulated due to its deleterious economic effect.16 Notably, the Supreme

Court in Claiborne Hardware acknowledged an economic effect as well,

stating that “[t]hrough exercise of these First Amendment rights,

petitioners sought to bring about political, social, and economic

change.”17 But to extend that regulatory power to ban a core civil rights

boycott, albeit one with economic effects, would exceed the economic

regulatory power:

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.18

In In re Brand Name Prescription Drug Antitrust Litigation,19 a

group of retail pharmacies brought Section 1 claims against prescription

drug manufacturers, alleging a conspiracy to deny discounts to

pharmacies and to peg price increases to changes in the Consumer Price

Index (CPI).20 The manufacturers were under political pressure to limit

14. See, e.g., Toyo Tire & Rubber Co. v. Atturo Tire Corp., 2017 U.S. Dist

LEXIS 4867, at *9 (N.D. Ill. 2017) (“This principle follows in part from

basic notions of causation: namely, when the government acts based on

petitioning, any purportedly unlawful result is most proximately caused

by the government action, not by the private action.”); 1 PHILLIP AREEDA

& HERBERT HOVENKAMP, ANTITRUST LAW: AN ANALYSIS OF ANTITRUST

PRINCIPLES AND THEIR APPL ICATION ¶ 202b (4th ed. 2018) (explaining

that “if a statute excludes everyone but the monopolist from a market, the

monopolist cannot itself be faulted”).

15. See, e.g., Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n of N.Y.,

447 U.S. 557 (1980).

16. Claiborne Hardware, 458 U.S. at 912.

17. Id. at 911.

18. Id. at 914.

19. 186 F.3d 781 (7th Cir. 1999).

20. Id. at 783.