# Petition — Boddicker v. Arizona State Dental Ass'n > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385009_0235%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1982 - **Citation:** 459 U.S. 837 ## Text IN THE , SUPREME COURT OF THE UNITED STA October Term, 1981 VERNON S. BODDICKER, RICHARD W. PEAY, HUGH L. THOMPSON and DWIGHT G. HUDSON, Petitioners, vs. ARIZONA STATE DENTAL ASSOCIATION, AN Arizona Non-Profit Corporation; CENTRAL ARIZONA DENTAL SOCIETY an Arizona Non-Profit Corporation; AMERICAN DENTAL ASSOCIATION, an Illinois Non-Profit Corporation, Respondents. ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT ALFRED L. RUEBEL ERHARD, COX & RUEBEL, P. C. 211 North ng Suite 500 Dallas, Texas 5201 (214) 741-6201 CARL W. DIVELBISS 101 North First Avenue, Suite 1950 Phoenix, Arizona 85003 (602) 257-8367 Attorneys for Petitioners QUESTIONS PRESENTED FOR REVIEW Did the United States Court of Appeals for the Ninth Circuit err in affirming the holding of the United States Dis- trict Court that the compulsory cross- membership requirements between the three Respondents do not constitute an illegal tying arrangement in violation of Sherman Act and the Clayton Act? Did the United States Court of gyeeess for the Ninth Circuit err in affirming the holding of the United States Dis- trict Court that the yang tome cross- membership requirements between the three Respondents do not suppress com- petition between dentists in violation of the Sherman Act and the Clayton Act? Did the United States Court of Appeals for the Ninth Circuit err in affirming the holding of the United States Dis- trict Court that the Respondents have not monopolized the area of dental services supplied to dentists by these Respondents in violation of the Sherman Act? Did the United States Court of als for the Ninth Circuit err in fai to hold that the compulsory cross- membership requirements between the three Respondents constitutes an un- reasonable restraint of trade as a matter of law in violation of the Sherman Act? INDEX Questions Presented For Review Opinions Delivered Below Jurisdiction The Statutory Provisions Involved Statement of the Case Reasons for Allowance of the Writ Conclusion TABLE OF AUTHORITES CITED Cases: a. 8 S.ct. 869, 871-872, n. g 2 19 L.Ed.2d 998 (1968) sian v. Gulf Oil Co 561 r. 1977) cert. denied 434 U.S. 1086, 98 S.Ct. 1280 (1978) Page oF fF YW YS WN 26 24 ii Page Catalano, Inc. v. Target Sales T9725, 1928 (1980) ” we 23 Chatham Condominium Associations Vv. ntu a nc. ” . Ee Fortner II, 429 U.S. 610, 619-620, “OT S.tt. t. 861, 867-868 (1977) 20 Goldfarb v. Cee atate Bar, iain Sat i 8 23 Jee ' >. >. 2106-7, 2173-71981) pec we >. 5 $77). ; 12 1 11 ‘Ss * 1 17, r. 1975) cert. denied 423 U.S. 1053, 96 S.Ct. 782, 46 L.Ed.2d 642 (1976) 16 tional v. U. » 12, 14-i5 (1947) _ es iii Miller v. Granados, 529 F.2d Pa ahs e514. 518, 2°. Ed’2d 543, 550 (1958)’ ' me ines: aa ze 7a 1211, r r. 1976), cert. denied 429 U.S. 823, "97 S.Ct. 74 (1976) ed States v ffith, > > + J q. 941, 945 (1948) =. 's c., 371 U.S. ; > 104, 9 L.Ed.2d 11 (1962) Page 10 23 10,11, 13,18, 20 15,21 16 22 10,13 18 17 iv Page United States v. National Ssociation of Broadcasters T98Z-I Trade Cases, 1 64567, p. 73100 (D.C. D of C, March 3, 1982) 11 17 IN THE SUPREME COURT OF THE UNITED STATES October Term, 1981 NO. VERNON S. BODDICKER, RICHARD W. PEAY, HUGH L. THOMPSON and DWIGHT G. HUDSON, Petitioners, vs. ARIZONA STATE DENTAL ASSOCIATION, an Arizona Non-Profit Corporation; CENTRAL ARIZONA DENTAL SOCIETY an Arizona Non-Profit Co ration; AMERICAN DENTAL ASSOCIA >» an Illinois Non-Profit Corporation, Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT Petitioners pray that a writ of cer- tiorari issue to review the judgment and opinion of the United States Court of ls For the Ninth Circuit, en- te in this proceeding on March 24, 1982, and the denial of the Petition for Rehearing on May 7, 1982. 2 QUESTIONS PRESENTED FOR REVIEW Did the United States Court of sgoeele for the Ninth Circuit err in affirming the holding of the United States Dis- trict Court that the c lsory cross- membership requirements between the three Respondents do not constitute an oy tying arrangement in violation of Sherman Act and the Clayton Act? Did the United States Court of Appeals for the Ninth Circuit err in affirming the holding of the United States Dis- trict Court that the c lsory cross- membership requirements between the three ee do not suppress com- petition between dentists in violation of the Sherman Act and the Clayton Act? Did the United States Court of ae pa for the Ninth Circuit err in affirming the holding of the United States Dis- trict Court that the Respondents have not monopolized the area of dental services lied to dentists by these Respondents violation of the Sherman Act? Did the United States Court of ls for the Ninth Circuit err in failing to hold that the compulsory cross- membership requirements between the three Respondents constitutes an un- reasonable restraint of trade as a matter of law in violation of the Sherman Act? 3 OPINIONS DELIVERED BELOW There was no formal opinion of the United States District Court for the Dis- trict of Arizona. However, the District Court did enter a Minute Entry dated March 3, 1975, dismiss the Amended laint, which said Order is reproduced in ppendix A to this Petition. Appearing as ndix B to this Peti- tion, is the initial Opinion of the Court of Appeals, reversing the District Court, as reported in 549 F.2d 626 (1977). roduced in mndix C is the Order of this Court de Certiorari, oa October 3, 1977. Appearing as ndix D are the Find- of Fact, Conclusions of Law and J nt, as entered by the District Court on st 29, 1980. Appearing as Appendix E is the Memo- randum Decision of the Court of Appeals, Ninth Circuit, entered March 24, 1982. r as F is the Order of t ee of serssise Ninth Circuit, denying the Petition for Rehearing, en- tered May 7, 1982. JURISDICTION The ju t of the Court of Appeals for the Ninth Circuit was entered on March 24 1982 (App. E, infra). A timely Petition for Rehearing was d on May 7, 1982 (App. F, poe, The jurisdiction of this Court is under 28 U.S.C. § 1254(1). 4 THE STATUTORY PROVISIONS INVOLVED This action involves §§ 1 and 2 of the Sherman Act (Title 15, U.S.C., §§ 1 and 2) and § 16 of the Clayton Act (Title 15, U.S.C., § 26, as amended). See Apps. G, H and i, infra. STATEMENT OF THE CASE Petitioners are all licensed dentists within the State of Arizona. Petitioners Peay, Thompson and Hudson are e ed in active practice, Petitioner Boddicker, for reasons hereinafter discussed, having ter- minated his practice in 1974. Respondent Arizona State Dental Association rein- after "ASDA") is an Arizona non-profit corporation, incorporated in 1951. Re- spondent Central Arizona Dental Society eouutnstber “CADS") is also an Arizona non-profit corporation, incorporated in 1961. The ASDA and CADS maintain a joint office and place of business in Maric County, Arizona. Re t American - tal Association reinafter "ADA") is an Illinois non-profit corporation, having mea omens office and place of business at cago, Illinois. Re dent ADA has, by its Bylaws, designated Respondents ASDA slashes, Seepqpabesie, ef thn Abas ant G2 cieties, respectively, o s required Respondents ASDA and CADS, as a condition to membership in the ASDA and CADS, to require their respective members to not only pay dues for said State and local societies but, in addition, to also pay dues for membership in the ADA. This practice has been acquiesced in, nur- tured, supported and enforced by the 5 Respondents ASDA and CADS and, in addition, has been implemented in the Bylaws of the ASDA and CADS. Thus, a dentist practicing within Maricopa County, Arizona, wishing to become a member of the CADS, tenders his application to the CADS, along with the dues for the ASDA and ADA. Upon acceptance of his membership by the CADS, he automat- ically becomes a member of the ASDA and ADA. Out of the total amount of dues tendered with his application, the CADS retains its portion, remitting the balance to the ASDA, which extracts its portion and remits the ADA portion to its offices at Chicago, following which the dentist is automati- cally enrolled as a member of the ADA. The ADA does not even so much as see a copy of the membership application, enrolling the member strictly on the basis of the remittance by the ASDA. The foregoing py ot as to the ini- tial enrollment of a member, is also fol- lowed in the collection of the annual mem- bership dues, in that the CADS collects the entire amount of the dues for the CADS, ASDA and ADA, with the remittance and trans- mittal being as aforesaid. The procedure followed in Arizona is identical to the procedure followed in each and every State of the United States where there is a con- stituent and/or csmpenent society of the ADA. Admittedly, (1) there is no dentist who is a member of any constituent or conm- ponent society who is not also a member of the ADA (Plaintiffs' Exhibit 50, p. 13 - ADA Answer to Plaintiffs’ Interrogatory Ne. 59), and (2) there is no State within the United States in which a constituent society of the ADA does not exist (Pretrial Order, p. 14, Lines 6-7, CR178). 6 Membership in the ADA does not require the showing of any particular professional ability or professional expertise. R.T., Vol. 1, p. » Line 23 - p. 61, Line 10. Petitioners’ evidence shows that they, as weli as all other dentists similarly situated, derive particular benefits from membership in the CADS and, to a lesser degree, in the ASDA, but with only nominal, if any, benefit from membership in the ADA; that the only benefit which might be derived from membership in the ADA is the receiving of the Journal of the American Dental Asso- ciation, but which can be obtained without ADA membership. The primary, and most in- portant, benefit derived from membership in the CADS is the continuing dental educa- tional eo conducted and made avail- able by said Society, plus the og it —sppad for exchange of information with fellow practitioners who are also CADS members and the referral of patients by fellow members. And the ASDA, although providing only a limited continuing educational progran, does have an insurance program which is important to its members. Petitioners’ testimony shows, specifically, that the rofessional skills of any dentist are en- nced or increased by his membership in the CADS; that CADS membership enables a dentist to have a more efficient and pro- fessional operation of his office than a non-member . The evidence of the Petitioners also shows that, without membership in the ADA, Petitioners and all other dentists similarly situated are deprived of the right to bel: ¢g to any specialty group, or any professional 7 and/or technical society recognized by the Respondent ADA. The activities of the ADA are all con- ducted in interstate commerce, including the extraction of dues from Petitioners and all other dentists similarly situated, both in Arizona and each of the other States. In 1972, the ADA collected dues in excess of $6,000,000.00. 1979, this figure had climbed to almost $15,000,000.00. In the same period of time, the annual ADA dues have increased from $70.00 r year to tra Sha per year, with a further increase to $300.00 per year under consideration. Both Petitioner Boddicker and Petitioner Peay objected to the payment of dues for the ADA and, for the year 1972, tendered dues for only the CADS and ASDA. Each was threatened with expulsion from membership unless the dues for all three organizations were paid. See Plaintiffs' Exhibits 39-45. Dr. Boddicker refused to pay the ADA dues and was expelled from membership in all three organizations. Dr. Peay, not wanting to be deprived of his membership in the CADS, finally relented and paid the dues for all three organizations, doing so under protest. Dr. Boddicker, a prosthodontist, whose practice depended “eee referrals, continued in practice until mid-1974, when he finally decided to terminatehis practice, due to the fact that he ceased receivi any referrals from the CADS, plus a ¢ - is of the referrals from members . The Petitioners testified that, except for the mandatory membership requirements, as aforesaid, they would not have retained membership in the ADA. R.T., Vol. l, p. 89, Lines 20-25; R.T., Vol. 2, p. il my agg - p. 12, Line l and p. 37, Lines REASONS FOR ALLOWANCE OF THE WRIT This Petition raises questions of na- tional rtance involving the applica- tion of the antitrust laws and, particu- larly, to professional organizations. Al this action was brought by only four dentists, the facts involve thousands of other dentists similarly situated, scat- tered throughout the United States. And a great deal of confusion exists as to the relative rights and obligations of profes- sional organizations and their members, beginning with Goldfarb v. Virginia State r, 421 U.S. . Ct. » with each case having its own peculiar set of facts, with the result that each succes- sive case has plowed almost virgin soil. This case can have a resounding applica- tion to dozens and dozens of professional organizations in the United States. There- fore, it is deserving of careful considera- tion, and something other than the cavalier treatment it has received in the District Court and most recently, in the Court of Appeals. Each of the three Respondents is a unique organization. Likewise, in other States, the respective constituent and/or component society is also a unique organization. For a dentist who is disinterested in all of the organizations, there is no market for any of 9 them. But to another dentist, there ma be a market for one or more, but not all, of the Respondent organizations. But the Respondents, by their membership arrange- ment, have created a forced market for the unwanted and/or undesired organization membership. Where a dentist desires to belong to his local (component) society, and even though he may, as a matter of judgment, and ~~ because of his par- ticular situation, determine he has no need to belong to the constituent and/or national a he is, nevertheless, as a = on to nenbership 7 his com- nent society, c ed to also pay men- rship dues for, = to join, his consti- tuent and national organizations. Thus, the Court commits a basic error when it confuses lack of a “competitive market" with a forced market, i.e., an unwanted membership in one or more of the Respondent organizations. It is fallacious to state that "Membership in the local and state groups cannot be characterized as a product or service distinct from ADA membership.", for, as we have seen, a dentist in the Federal Dental Services (Army, Navy, VA, Public Health Service) is allowed to ob- tain membership in the ADA, but without membership in a constituent or component society. Thus, the ADA, at least, gives recognition to a separate and distinct ADA membership. 10 The undesired or unwanted membership can be compared to a product or merchandise which a party is required to purchase as a part of a tying arrangement in order to ob- tain a desired product, even though he has no need, and there is no "competitive mar- ket" for the tied product. See Chatham dominium Associations v. Centu ‘ 2 . re dominium developers, in the sale of a condominium, required the yeti to enter into a 99-year recreational facilities lease; and also Miller v. nados, 529 F.2d 393 (5th Cir. 1976), nets a condominium develo- per, in the sale of a condominium, required the purchaser to enter into an operational management agreement. In os inc., ; ; rd Cir. cert. denied 429 U.S. 823, 97 S.Ct. 74 (1976), the Court, —— from the rthern Pacific Railwa landmark case, says: "Northern Pacific Ry: v. United States, >. . = * . > > L.Ed.2d 545, 550 (1958), perhaps the fountainhead of tying law under § 1 of the Sherman Act, provided the fol- lowing eT of the theory of the law of tying: "For our purposes a tying arrangement may be defined as an agreement a party to sell one product but only on the condition that the buyer also purchases a different (or tied) prod- uct, or at least agrees that he will not purchase that product from any 11 other supplier. Where such cmditions are successfully exacted competition on the merits with respect to the tied product is inevitably curbed. Indeed tying e Beyond th serve hardly any meaere nd the suppression of com- ion. standard oi Co. of ae ornia and Standar tions nited States, 337 U.S. 293, 305- 706 “69 S.ct. TOST, 1058, 93 L.Ed. 1371. They deny competitors free access to the market for the tied product, not because the — imposing the tying requirements s a better product or a lower price but because of his power or leverage in another nautiet. At the same time buyers are forced to forego their free choice between competing products." >» P- "(D. Cc. D of Cc ae 2 3, 1982), the issue involved a regulation — biting a television station from advertising more than one product in a mB ee lasting less than sixty seconds. In passing, and ae a se violation, and in ref- erence to Nor zs Fachtts Raj lway Co. v. mon 1gupre, a pp.- - tying cases, to be sure, are not technically applicable in this in- stance because the additional amount of commercial time advertisers are required to purchase under the multi- ple ; product standard does not repre- sent a ‘different product’ from the time the advertisers actually desire to purchase. However, the susiouale 12 underlying the rule against tying-- that sellers should be precluded from using their market power to force a buyer to purchase and to for some- ching he does not want--a tres pre- cisely in S case. as used its dominance in the television industry to require companies who desire to advertise more than one product on television to buy more than they wish to purchase. Thus, the coercive use of market power to restrict buyers’ decision-making which is at the heart of tying is also present in the provi- sion at issue here. See P. Areeda, Antitrust Analysis ¢ 541 (1981)." Watesseving taterted.) In ian v. lf Oil Corp., 561 F.2d 434 cert. denied 434 r. U.S. 1086, 98 S.Ct. 1280 (1978), the Court, in commenting upon Ungar, states: "It has never been an element of plain- tiff's case to disprove, nor even a permitted defense, that the tied prod- uct is superior to others available on i ss See also Heatransfer rR v. wep eeganen- at A. G., >. > . To prove a per se illegal tie-in, a claimant must es ish things: (1) “* * * an agreement by a party to sell one product but only on the 13 condition that the buyer also purchases a different (or tied) product he *" Northern Pacific (2) That the seller "has sufficient economic power with respect to the tying product to appreciably restrain free com- petition in market for the tied product. * * *" T[bid. at p. 6; and (3) that "a "not insubstantial’ amount of interstate commerce is affected." Ibid. , of rica r : “ - rd Cir. wee? tl cert. denied 429 U.S. 823, 97 S.Ct. 74 (1976). The activities of the ADA run a gamut ranging from the sale of hundreds of cata- log items to the sale of various publica- tions, including the ADA Journal and the solicitation of advertising therefor, accreditation of dental programs for hos- itals, colleges and universities, and a st of other material, services and pro- grams, none of which are independently offered by any of the constituent and component societies. On the other hand, the State I oGe Weke “ which was a class action brought against silver buyers, commodity brokerages, com- modity exchanges, and others for alleged antitrust violation and for alleged vio- lations of the eee ee Act. The defendants argued t the complaint was defective because Strax did not allege —_ he or the members of the proposed class "* * * entered into transactions directly with the defendants, * * *" 23 However, Strax contended that he traded in the very market which the defendants are alleged to have manipulated, although not directly with the defendants, and that proof of the impact of defendants' alleged action on that market would not require speculation or attenuated theories of causation. The Court upheld the con- tention of Strax, on the basis that he and the group which he proposed to represent were wi the “target area" of the de- fendants' alleged anticompetitive behavior; "ke *& * that is, their anticompetitive Te was ‘aimed’ at the plain- t s. And we have that exact same situation here, in that the Petitioners, and all other dentists similarly situated, are within the target area of the activities of the Respondents. Petitioners, and all other dentists similarly situated, have It has been repeatedly held that "When a particular concerted activity a "SS _—_ of anticonm- petitive t with no apparent po- tentially redeeming value, the fact that a practice may turn out to be harmless in a particular set of cir- cumstances will not prevent its being declared unlawful per se." Catalano, 24 c. v. Target Sales, Inc., 446 U.S. , -Ct. ; (1980) ; see also Broadcast Music, Inc. v. Columbia 1562 (1979). Again, to focus the issues, we pose the following questions: A. Without the tying arrangement: (1) Would all dentists who obtained membership in their constituent and component societies ilso page ogg obtain membership in the ADA (2) Would all dentists obtain men- bership in both their consti- tuent and component societies, or would they only obtain men- re in one such organiza- tion B. If ADA membership is of value and importance to a dentist, would not the aver dentist obtain member- ship in ADA, even on a volun- tary, non-compulsory basis? The Respondents cannot contend that ques- tions A.(1) and B must be answered in the negative. And if said questions can be answered in the affirmative, then the Re- spondents, and particularly the ADA, have nothing to worry about. See te ; 2113 (1981); where agents were : 25 uired to pay franchise fees to Equi pos the Court posed the question: ewe "If Equity did not impose these franchise fees upon the agents, there is no reason to believe that any of its legitimate interests would be affected." It seems only reasonable to assume that if the ADA provides any and all of the services and benefits to the dental pro- fession, as contended by the “apy ge ee its membership would not suffer if placed on a voluntary basis. For example, the American Bar Association only requires that an applicant for membership be duly licensed to practice in some State, and with no requirement as to membership in any other organization. Nevertheless, the ABA, over the years, has maintained a membership consisting of a certain percentage of all lawyers in the United States, and with very little variance in its membership, as related to the total number of licensed Lawyers. Respondents have never so much as even nes any valid reason as to just why membership in the three Respondent organi- zations should be on an all-or-none basis, and without any choice, except as to those dentists in the Federal Dental Service. The fact that membership in any of the Respondent organizations is not a condi- tion to practice, does not minimize the claim of monopoly, but the fact that three (3) corporations have conspired to kill competition as between themselves and thus 26 deny a dentist such freedom of choice as his professional standing, specialty, or 1, coupled with his pocketbook, may ictate, certainly does suppress c ti- tion as between dentists, particularly as to the dentist who, for whatever reason, finds himself in a position of not being able to afford the total cost as mandated by the Respondents, and also the ADA and any other constituent and c nent socie- ties. A dentist who is ong = open to accept, and pay for, membership in constituent society and the ADA, as a condition to men- bership in his component society, suffers financially and, in addition, his costs in providing dental services to his patients are thereby increased, with result dam- age to himself and to the public at large. As to any of the Respondents, including any other constituent and/or component society, if they, or any of them, have merit and perform an important function for a dentist, he will purchase a member- ship, and without compulsion. Under the facts, and the law of the cases cited, it seems clear that the tying arrangement maintained the Respondents constitutes a per se violation and, there- fore, Petitioners are entitled to judgment as a matter of law. CONCLUSION In summary, it clearly appears that: A. The decision of the Ninth Circuit Court of Appeals, in affirming the judgment of the District Court, is 27 clearly in conflict with the deci- sions of other Federal Courts of Appeals on the same subject matter; B. The Ninth Circuit Court of Appeals, in its opinion, has so far departed from the accepted and usual course of judicial ge yg as to call for an exercise of the power of supervision of this Court; C. The decision of the Ninth Circuit Court of Appeals is in conflict with the applicable decisions of this Court, as above set forth. WHEREFORE, for the reasons set forth in this Petition, a Writ of Certiorari should be granted. DATED: June 11, 1982. RESPECTFULLY SUBMITTED, s ys for Petitioners ¢ APPENDIX --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385009_0235%3A1. Public record. Not legal advice.