# Petition — National Electrical Contractors Ass'n v. National Constructors Ass'n > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385010_0247%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1983 - **Citation:** 463 U.S. 1234 ## Text EEE ee . Supreme Court, US. 82-1146 FILED No. SANT 1968 SS as IN THE anaes Supreme Court of the Gnited States OCTOBER TERM, 1982 NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION, INc., et al. Petitioners, wa NATIONAL CONSTRUCTORS ASS CIATION, et al. Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT EARL W. KINTER GuUY FARMER DONALD M. BARNES (Counse! of Record) DENNIS C. CUNEO FARMER, MCGUINN, FLOOD, ARENT, Fox, KINTNER, BECHTEL & WARD PLOTKIN & KAHN 1000 Potomac Street, N.W. 1050 Connecticut Ave. N.W. Suite 402 Washington, D.C. 20036-5339 Washington, D.C. 20007 (202) 857-6044 (202) 298-6910 MILTON HANDLER SHALE D. STILLER STANLEY D. ROBINSON PETER H. GUNST KAYE, SCHOLER, FIERMAN, FRANK, BERNSTEIN, CONAWAY Hays & HANDLER ' & GOLDMAN 425 Park Avenue 2 Hopkins Plaza New York, New York 10022 Baltimore, Maryland 21201 (212) 759-8400 (301) 547-0500 Attorneys for Petitioners National Electrical Contractors Association, Robert L. Higgins and H.E. Autrey and Other Individuals Sued In Their Individual Capacities and as Trustees of The National Electrical Industry Fund; Colgan Electric Company, Inc. and Miller Electric Company January 7, 1983 a a TIED PRESS OF BYRON S. ADAMS PRINTING, INC., WASHINGTON, D.C. i QUESTION PRESENTED This petition presents a question of paramount import- ance to the continued existence of thousands of indus , funds throughout the construction industry. In an unpre- cedented expansion of the antitrust laws, the Fourth Circuit condemned an industry fund provision contained within a valid collective bargaining agreement as illegal per se price fixing, thereby threatening a major industrial union and a national employers’ association with massive treble damage liability estimated by class counsel to ex- cew:d one hundred twenty million dollars (Appendix, pp. 17ia-172a, at p. 172a). The precise question presented for review is: DID THE INCLUSION OF AN INDUSTRY FUND PROVISION IN A COLLECTIVE BAR- GAINING AGREEMENT CONSTITUTE ILLE- GAL PER SE PRICE FIXING, WHERE THE EMPLOYERS’ PAYMENTS WERE USED TO BENEFIT THE ENTIRE ELECTRICAL CON- TRACTING INDUSTRY, AND THERE WAS NO FINDING THAT ANY EMPLOYER WAS EVER FORCED TO PAY INTO THE FUND, OR THAT IT AFFECTED THE PRICE OF ELECTRICAL CONSTRUCTION CONTRACTS? ii PARTIES TO THIS PROCEEDING The Petitioners in this case are National Electrical Contractors Association, Inc., Robert L. Higgins, The International Brotherhood of Electrica! Workers, AFL- CIO, Charles H. Pillard, Colgan Electric, Inc., Miller Electric Co., and H.E. Autrey, Allen L. Bader, Frank H. Bertke, Donald C. Cates, Robert W. Colgan, Joe R. Devish, and Carl] T. Hinote in their individual capacities and as Trustees of the National Electrical Industry Fund, and Allan H. Stroupe, L.R. McCord, Aldo P. Lero and Lowell C. Timm, in their official capacities as Trustees of the National Electrical Industry Fund, and John Ostrow, C.W. Stroupe, Warren Losh and J.D. Hilburn, Sr., in their individual capacities. The Respondents in this case are National Con- structors Association and Commonwealth Electric Com- pany, by and on behalf of itself and all others similarly situated and The Howard P. Foley Company, by and on behalf of itself and all others similarly situated, and Dono- van Construction Company of Minnesota, Inc., Arthur McKee & Company, Inc., Badger America, Inc., Cataly- tic, Inc., C.F. Braun Constructors, Inc., Dravo Corpora- tion, Guy F. Atkinson Company, The H.K. Ferguson Company, Jacobs Constructors, Inc., Pullman Kellog, Division of Pullman, Inc., and Stearns-Roger, Inc. CORPORATE LISTING STATEMENT National Electrical Contractors Association, Inc. (NECA) is a non-profit trade association with auton- omous chapters representing electrical contractor mem- bers in collective bargaining with the International Brotherhood of Electrical Workers, AFI,-CIO. It is a non-stock corporation and has no parent company, sub- sidiaries, or affiliates. The members of NECA which are publicly owned corporations as well as their subsidiaries which are also NECA members are as follows: 1, Fischbach Corporation Fischbach & Moore Electrical Construction, Inc. Baldwin-Stewart Electric Corbin-Dykes Electric og lectrical Co. .H. Greene Electric Co. Tramco, Inc. A.S. Schulman Electric Co. W.V. Pangborne & Co. Buffalo Electric Construction Beach Electric Co. W.A. Chester Power Systems Watson-F lag agai Co., Inc. W.W. Clark John Miller Electric Co. yf & Zimmerman M Automation Electronic System Fischbach Boulos Deever Electric Beacon Elec. Engr. J.P. Miller Fuel Economy The L.E. Myers Co., Inc. Hoosier Engineering Keith Electrical Co., Inc. Grissom & Johnson, "Ine. Interstate Electric 3. E.C. Ernst Co., Inc. 4. Dynalectron iv TABLE OF CONTENTS Page SN PUNO Sebo ccvecccndiscovectacvocdens i PARTIES TO THIS PROCEEDING .....cscccccccccccccees ii CORPORATE LISTING STATEMENT .........eccccccccees ii i ee is nb ceebotccensubenmbas te 1 le dalle ba vawa sd weew eee eae 2 BEE MPEMTUTOME POVOIIOND oc cccccccccccescccsceves 2 Bs UT CO EU CARD occ ccc cccccccuvecrcsee 3 A. Preliminary Statement .................06. 3 ape Mae Rae Lo Ns wines av eee wee oees doce 3 1. The Adoption Of The Industry Fund... 3 2. How The Fund Benefits Non-NECA Con- i cutee 6a winecacennakee ss aun ere 6 Be arr ) V. REASONS Wuy THE PETITION SHOULD BE GRANTED 12 A. This Case Presents An Important Question Of First Impression Which Should Be Considered By This Court—Whether Voluntary Payment Into An Industry Fund, Typical Of Funds Prevalent Throughout The Construction Industry—Constitutes Illegal Per Se Price Fix- B. The Court Of rw Unprecedented Con- demnation Of A Voluntary Industry Fund Is In Direct Conflict With Decisions Of The National Labor Relations Board And Misapplies This Court’s Holding In Perma Life ............ 15 C. The Court Of Appeals Novel Holding That A Legal Subject Of Bargaining—Absent Any Demonstrated Effect On Commercial Competition—Constitutes Illegal Per Se Price ces Conflicts With Important Antitrust ples Established By This Court In Apex EE UaGdicked $4.5+440eesatanpaiiie ion 19 Vv Table of Contents Continued D. The Fourth Circuit’s Decision To Apply A Per Se Standard To A Collective B ining Agree- ment Conflicts With This Court’s Decision In Connell And Decisions Of Other Circuits ... 22 uM. 3.0 sa'cca cee das cenkauminaaennactans 24 APPENDIX: Opinion of the Court of Appeals for the Fourth Circuit la Memorandum Opinion of the District Court for the Dis- EIN so hac ce cnae sted epebuvasnebene 23a —— of the District Court for the District of Mary- Order of the Court of Appeals Denying Rehearing ... 100a Order of the Supreme Court Extending Time to File Petition for Writ of Certiorari .................. 102a EN ss ann csacasccgecbnabace 103a, 193a “Industry Funds”, Engineering News-Record ........ ll4a Unpublished Memorandum Opinion and Order in C.L. Williams v. ITT Grinnell Industrial Piping, Inc., SERIES MIE: cin v's ca Gsine cas okueueauaeaauawh 12la General Counsel’s Denial of Appeal from Regional Direc- tor’s Refusal to Issue Complaint in JBEW and NCA NIG Si ckieassa kWeoavsoe + ase vaneee aedaeaenaNs 127a Unpublished Decision of the NLRB Administrative Law Judge in IBEW, Local 527 and NCA, and in IBEW, Local 716 and NCA (1979) .......ceceeceeceeees 134a Unpublished Decision of the NLRB Administrative Law Judge in IBEW, Local 12 (Commonwealth Electric CE 55 Joo wetbusehecetonhsNicveanaenes 15la NS RECT Cr ra es 169a NEED . wo avin desc od acnwkusanebeunwate 170a Appellee NCA Counsel’s letter re Industry Fund .... 17la National IBEW-NCA Agreement (1977) ............. 173a Declaration of Trust, National Electrical Industry Fund 178a Defendants’ Proffer of Testimony ............++++++ 182a Defendants’ Supplemental Proffer of Testimony ...... 189a ahead vi TABLE OF AUTHORITIES CASES: Page Apex Hosiery Co. v. Leader, 310 U.S. 469 P1940) Perawnh oAadsvewas eeseovsevabs dete 19, 20, 21 Berman Enterprises Inc. v. Local 333, Int’l Longshore- men’s Assn, 644 F.2d 930 (2d Cir. 1981) ......... 23 Broadcast Music, Inc. v. Columbia Broadcasting Sys- tom, ine., 443 UB. 1 (1978)... ccsccvsccess 14, 21, 23 Carpenters Local Union No. 1846 v. Pratt-Farnsworth, Inc., 690 F.2d 489 (5th Cir. 1982) ............... 21 Columbia Broadcasting System, Inc. v. ASCAP, 620 F.2d 930 (2nd Cir. 1980), cert. denied, 450 U.S. 970 DUE Nas bb abewnd HaccKswewsneeenanesewae es 17, 18 Connell Construction Co. v. Plumbers & Steamfitters, Local No. 100, 421 U.S. 616 (1975) .............. Continental T.V., Inc. v. GTE Sylvania, 433 U.S. 36 DEE at asp tends ovvendvapennadwiaeledteriee sole 14 Davis-Watkins Co. v. Service Merchandise, 686 F.2d ST SOD ods condudexvatnavesbeonnenen 14 Detroit Window Cleaners Union, Local 139 (Daelyte Service Co.), 126 NLRB 63 (1960) .............. 12 IBEW Local 12 (Commonwealth Electric Co.), 252 DT EE OME checked ave cvovetaccseebou? 16 Meat Cutters Local 576 v. Watterau Food, Inc., 597 F.2d EN EE TOD cise ciced coces cdactdrasuweouey 23 Mechanical Contractors Ass'n. v. Local 420, United Ass'n of Jou men, 167 F.Supp. 35 (E.D.Pa. 1958), aff'd. 265 F.2d 607 (3rd Cir. 1959) ........ 13 Mid-American Regional Bargaining Ass’n v. Will Coun- ty Carpenters Dis. Council, 675 F.2d 881 (7th Cir. 1982) cert. denied, 103 S.Ct. 82 (1982) ........... 20 NLRB vy. Wooster Division of Borg-Warner Corp., 356 U.S. 342 (1958) ....... Sri lg sid reg ates 15 Oil, Chemical & Atomic Workers International Union v. National Labor Relations Board, 405 F.2d 1111 ED aw bd pe cedecocccsoneedvecnatiane 13 Parks v. IBEW, 314 F.2d 886 (4th Cir. 1963), cert. denied Uns PURAMEED d40 vbcbs ccd caen'slapiedinwaa 8 vii Table of Authorities Continued Page Perma Life Mufflers v. International Parts Corp., 392 SN ba Vis un oa bsdeddes aedeMeen eres 16, 17 Smitty Baker Coal Co. v. United Mine Workers, 620 F.2d 416 (4th Cir. 1980) cert. denied 449 U.S. 870 (1980) 23 U.S. Trotting Ass’n v. Chicago Downs Ass'n, Inc., 665 ee PE LE RG SUED ccvcccccovchoavevevesvs 14 USM Corp. v. SPS Technologies, Inc., 1982-83 Trade Cees POSTE Cote CAE, BOUND ve cccccccccacecsces 14 United States v. General Motors, 384 U.S. 127 (1966). 22 Williams v. ITT Grinnell Industrial Piping, Inc., CA No. 78-0562-R (E.D. Va. May 21, 1980) ......... STATUTES AND REGULATIONS: United States Code, Title 15 EIN. Guat antine hile kwilbe s 004 05 6p eee ude cane 2, 103a MAS, Li toe get ces sdb ictncehecaceoceuceeas 2, 103a RTE MDE Day ANE SSE ee I 7 me PI 2, 20, 105a EE he. cei eu oeaea bod vaen eee hekbuase 2, 1938a United States Code, Title 28 Se ba ueb Ve des deg se cnw couse daedseiaaue 2 Ned Nid's had p-hek'e ss oo cenweeenvietcadan 2 United States Code, Title 29 UR a essa ba aha e nae be dnd dsdbhtiondica eee 2, 106a I et wd G ad cus aa bbws ce¥adnasccebdasieten 2, 107a I on ie as waa ae cased adnanedenn tie 2, 108a DE LOL we nidtan ae boandousehence ecenientiten 2, 109a CL a alepdbldbis viens ki hnbssene se ceweueyale 2, 109a DME td cas abhehtéceus soatewsetcaduaewauee 2, 110a NG diated bastakbieg dp hodta pea 3, 112a EE AL is nso ane bk canevdccdee baum eens 3, 112a PR Secduscadconcedcnccnceccaccisudvandegn 3, 112a Table of Authorities Continued Page MISCELLANEOUS: Comment, Consolidated Express: Antitrust ror a Illegal Labor Activities, 80 Col.L.Rev. 645 (1980) 23 Engineering News Record .......cccccccccsccccees 5 Labor-Antitrust: The Problems of Connell and a Remed That Follows Naturally, Casey & Cozzillow, 1 SAM MID. pv tii servo spavadacdas cavesaumnuaed 23 Work Stoppages in Contract Construction, 1962-73, pub- lished by Department of Labor ..............4.. IN THE Supreme Court of the United States OCTOBER TERM, 1982 No. NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION, INC., et al. Petitioners, . ff NATIONAL CONSTRUCTORS ASSOCIATION, et al. Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT The petitioners, the National Electrical Contractors Associatic¢n, Robert L. Higgins, H.E. Autrey, Robert W. Colgan, the trustees of the National Electrical Industry Fund, Cojgan Electric, and Miller Electric respectfully pray that 4 writ of certiorari issue to review the judgment of the United States Court of Appeals for the Fourth Circuit ertered in this proceeding on May 17, 1982. I. OPINIONS BELOW ane gilority and dissenting opinions filed by the Stites Court of Appeals for the Fourth Circuit are reported % 67 F 2d 492 (4th Cir. 1982), and appear in the chereto at pp. la-22a. The decision of the U.S. District Court for the District of Maryland is reported at 2 498 F.Supp. 510 (D.Md. 1980), and appears in the Appen- dix at pp. 23a-97a. The District Court’s injunction was entered on October 8, 1980, and appears in the Appendix at pp. 98a-99a. The Fourth Circuit’s Order of September 8, 1982, denying Petitioners’ Motion for Rehearing appears in the Appendix at pp. 100a-101a. II. JURISDICTION The Judgment of the United States Court of Appeals for the Fourth Circuit was entered on May 17, 1982, bya 2-1 vote. A timely Petition for Rehearing and Suggestion for Rehearing En Banc was denied September 8, 1982. Petitioners’ application for an extension of time within which to file its Petition for a Writ of Certiorari was granted by Chief Justice Warren E. Burger on November 29, 1982, extending our time to and including January 7, 1983 (see Appendix at p. 102a). This Petition is timely filed with this Court under the provisions of 28 U.S.C. § 2101(c). The Court’s jurisdiction is invoked under 28 U.S.C. § 1254(1). The co-defendants below, the Interna- tional Brotherhood of Electrical Workers and Charles Pillard, are also filing a petition for a writ of certiorari. Ill. STATUTORY PROVISIONS The relevant statutory provisions are: 1. Sherman Act, Section 1, 15 U.S.C. Sec. 1; 2. Clayton Act, Section 4, 15 U.S.C. Sec. 15; 8. Clayton Act, Section 6, 15 U.S.C. Sec. 17; ¢ cig Act Sein ob SUS Se 6. Nurris-LaGuardia Act, Sections 1, 2, 5, 6, 13, 29 U.S.C. $§ 101, 102, 105, 106, 113 3 7. Labor M ement Relations Act, as amended, Sections 8(a)(5), 8(b)(3), 8(d), 29 U.S.C. §§ 158(a)(5), 158(b)(3), 158(d). Pertinent portions of these statutory provisions are reproduced in the Appendix at pp. 103a-113a; 193a. IV. STATEMENT OF THE CASE A. Preliminary Statement This is a class action antitrust suit brought by the National Constructors Association and several contract- ing companies against the International Brotherhood of Electrical Workers, the National Electrical Contractors Association, and certain individuals and NECA member companies. Although conceding that this was a “case of first impression,” a divided Fourth Circuit panel affirmed the district court’s grant of summary judgment for plain- tiffs, holding that an agreement between the IBEW and NECA to include an industry fund in a bona fide collective bargaining agreement constitutes illegal per se price fix- ing. 1. The Adoption Of The Industry Fund NECA is a national trade association of union and non-union electrical contractors with 135 local chapters throughout the country. The IBEW is an international union consisting of more than one million trained electri- cians and apprentices, representing the vast majority of the nation’s union electrical construction workers. For decades NECA and the IBEW have provided a stable collective bargaining structure for the negotiacion of wages, hours and working conditions throughout the union electrical construction industry. re ena 4 In 1976, the IBEW, which for years had sought to improve its members’ pension fund financed by contribu- tions from union electrical contractors, negotiated a Na- tional Collective Bargaining Agreement with NECA (Appendix, pp. 173a-177a), the provisions of which were included in all local collective bargaining agreements negotiated between IBEW local unions and NECA chap- ters. The employers agreed to increase their pension fund contributions from 1% to 3% of gross labor payroll. In return, NECA secured significant cost saving con- cessions which benefitted NECA and non-NECA con- tractors alike. These provisions were: (1) a clause which substantially reduced the overtime rates paid to employ- ees working on second and third shifts; (2) a higher ap- prenticeship ratio which permitted emnloyers to hire more apprentices at rates significantly iower than the wages paid journeymen electricians, and (3) a long sought management rights provision. NECA and the IBEW also agreed to the National Electrical Industry Fund (the Fund). Typically, non-NECA contractors either (a) voluntari- ly authorize the local NECA chapter to act as their collec- tive bargaining agent, or (b) simply await the outcome of IBEW-NECA contract negotiations and then voluntarily adopt the terms and conditions of the local agreement. (The standard form letters of assent A and B appear in the Appendix, pp. 169a and 170a.) By pursuing either course, non-NECA contractors may obtain union labor in any locality in which they choose to compete for electrical contracting work. Thus non-NECA contractors are en- abled to bid on projects far from their local service areas with advance knowledge of what their labor costs will be. who voluntarily adopted collective bargin- ing agreements which contained the industry fund provi- sion agreed to contribute between .2% and 1% of their 5 gross labor payroll to the Fund, .2% of which was re- ceived by national NECA and the balance, if any, by the various local NECA chapters. Fund collections are placed in trust and used to pay, inter alia, the contractor’s cost of (1) negotiating and implementing local and national col- ‘ective bargaining agreements, (2) maintaining a national industry arbitration system, (3) implementing employee training programs, (4) improving industry and gov- ernmental codes and specifications, (5) increasing indus- try advertising, and (6) financing NECA’s industrywide labor relations services. ' The Fund is not novel. Industry funds have long been commonplace throughout the construction industry. The Engineering News Record (Appendix, pp. 114a-120a, at 118a) reported in July 1980 that 48.9% of the 2,907 collec- tive bargaining contracts monitored by the Construction Labor Research Council included industry fund provi- sions. Similarly, 33.7% of the approximately 5,000 labor contracts examined by the Department of Labor’s Office of Construction Industry Services included fund provi- sions. Even before the Fund was established, approxi- mately 92 IBEW-NECA local collective bargaining agreements provided for local industry funds. The Fund was intended as something more than a mechanism through which NECA and non-NECA con- tractors could pay their fair share of th» expenses of negotiating and administering industry collective bargaining agreements and other similar services. It was ‘The Fund can be used only to finance the industrywide services expressly designated in its Declaration of Trust (Appendix, pp. 178a- 181a). A Board of Trustees was established to ensure that the condi- tions of the Trust were strictly observed. There has been no findi..g that Fund money was ever expended for any purpose inconsistent with the purposes set forth in the Trust document. 6 also intended to increase the funds available to improve the quantity and quality of the services which NECA provided the entire electrical construction industry. Thus, for example, it enabled NECA to increase the number of its trained field representatives, so that management could match the union’s ability to provide expert labor personnel to resolve local labor-management disputes. Non-NECA contractors are not compelled to accept the benefits of the local IBEW-NECA agreement.’ They remain free to negotiate their own independent labor agreements with the union, without any industry fund obligation. And, as the record in this case demonstrates, non-NECA contractors have in fact negotiated in- dividually and collectively with the IBEW for in- dependent agreements which do not include the Fund provision. Thus, if a non-NECA contractor chooses to adopt the terms of a NECA labor agreement—including the Fund—rather than negotiate independently with the union, it is in every sense a voluntary election on his part. 2. How The Fund Benefits Non-NECA Contractors NECA and the IBEW have for decades provided an effective collective bargaining structure which benefits the entire electrical construction industry. Local NECA * While the courts below found that the parties agreed to “insert” the Fund provision in bargaining agreements negotiated between the IBEW and non-NECA contractors, as well as in NECA agree- ments, they did not find that any contractor was in fact compelled to accept the Fund provision (498 F.Supp. at 536-37, 678 F.2d at 501-02; Appendix, pp. 68a-69a and 15a-l6a). Indeed, petitioners demon- strated below that the IBEW entered into numerous agreements with non-NECA contractors, including plaintiffs, which excluded the Fund provision altogether (Appendix, pp. 182a-187a). - chapters act as multiemployer bargaining agents in negotiating collective barrining agreements with IBEW local unions, which are made available for voluntary adop- tion by non-NECA contractors. The negotiation and ad- ministration of such agreements is a long and involved process, the cost of which is borne by the Fund. NECA maintains a staff of professional labor’ repre- sentatives who are available in the field to assist union contractors and aid in the resolution of employer- employee disputes on the job site. If a problem cannot be settled on the site, it may be referred to the local Labor- Management Committee which is staffed by NECA chap- ter members and IBEW local representatives. These committees, provided for in the local IBEW-NECA agreement, are utilized to resolve disputes which arise under the local agreement. The vast majority of local agreements further provide that determinations reached by the local Labor-Management Committee may be appealed to the Council on Industrial Relations for final, binding resolution. Established in 1921 by the IBEW and NECA, the Council, which is composed of equal numbers of NECA and IBEW members, has consistently resolved industry labor disputes by private adjudication without the in- tervention of third party arbitration—an accomplishment expressly recognized as a unique and progressive step in the peaceful settlement of labor disputes.’ The Council is ‘“The most successful arrangement for the adjudication of con- tract disputes has been the agreement negotiated between the Inter- national Brotherhood of Electrical Workers and the National Elec- trical Contractors Association. Since 1921, the electrical industry's Council on Industrial Relations has rendered private judicial 8 the principal reason why electrical contracting, alone among the construction trades, has been termed a virtually strike-free industry. See Parks v. IBEW, 314 F.2d 886, 894 (4th Cir. 1963), cert. denied, 372 U.S. 976 (1963). The IBEW and NECA also undertake the selection and training of apprentices throughout the electrical con- struction industry. NECA contractors and IBEW mem- bers, sitting in joint committee, screen and interview tens of thousands of applicants annually. Once selected, the apprentices are enrolled in the Joint Apprenticeship Training Program, developed and managed by NECA and the IBEW. Additionally, NECA provides extensive employer training activities, research studies (such as compiling the National Electrical Code), and other re- lated services. The benefits to the non-NECA contractor stemming from voluntary assumption of local IBEW-NECA agree- ments are immense. The non-NECA contractor saves the time and cost of negotiating his own agreement and assures himself of the right to obtain skilled labor on an equal basis with local contractors. By adopting the local agreement already in place he can immediately compute his labor costs, thus expediting his bid presentation. He also obtains immediate access to a pool of skilled electri- cians, trained through the efforts of local NECA con- determinations on a variety of disputed matters including wage-rate determinations. While it has no mandatory powers to enforce com- pliance, its record is unique; never in the more than 48 years of the Council’s existence has a decision been violated. Its success, how- ever, is the product of many years of experience and may not be readily duplicated in other branches of the industry.” Work Stop- pages in Contract Construction, 1962-73 at 15, a study published by the Department of Labor. 9 tractors and the union. Without access to this labor pool the large travelling contractor could not secure the skilled labor he requires to compete in the local market. The extensive industry services financed through voluntary Fund contributions are also of great value to the non-NECA contractor. As Williams v. ITT Grinnell Industrial Piping, Inc.‘ recognized, each contractor who voluntarily adopted this Fund “stood to benefit from [Fund] activities even though it was not [a] NECA mem- ber.” The court concluded: The Declaration of Trust limits the fund’s use of employer contributions to specific activities. NEIF funds may be used to advise the public of services pee by the electrical contractor industry. The EIF may also seek improved and uniform govern- ment codes. Funds may be expended to train em- loyees or acquaint them with new products. ement and sales personnel may also be trained at NEIF expense. The NEIF may also pay the em- ployer’s cost of collective bargaining. In short, each permissible NEIF activity 1s consistent with the “basic principles” set forth above and to the benefit of the non-NECA contractor. (Emphasis added.) C. The Decision Below Sustaining the district court’s summary judgment holding, a divided panel held that the Fund constituted illegal per se price fixing, and enjoined the defendants from receiving Fund payments from non-NECA con- tractors who voluntarily accepted the obligations and ‘The unpublished opinion of the United States District Court for the Eastern District of Virginia appears in the Appendix at pp. 121a-126a. 10 benefits of local IBEW-NECA collective bargaining agreements. The lower court reached this conclusion even though (1) it saw nothing wrong with collecting the Fund from NECA contractors; (2) the Fund provision nowhere re- ferred to the price of electrical contracting services, and certainly did not fix the price of such services; (3) the Fund affected but one small element of the cost of labor; (4) non-NECA contractors were obligated to pay into the Fund only if they voluntarily gave NECA authority to bargain on their behalf or voluntarily assented to local IBEW-NECA agreements;’ (5) non-NECA contractors remained free to negotiate their own IBEW agreements excluding the Fund provision altogether; and (6) the Fund had no demonstrated impact on commercial competition. For the lower court majority, the issue boiled down to the simplistic proposition that the defendants had agreed to include the Fund provision in all “IBEW construction contracts,” thus depriving non-NECA contractors of the “competitive advantage” they had enjoyed by obtaining a free ride on NECA’s efforts. According to the panel 5Generally the local IBEW-NECA agreements which were amended to include the provisions of the National Agreement are renegotiated every year or two years. Since the Fund did not go into effect until six months after the National Agreement was adopted, any obligated contractor could withdraw his bargaining authority and limit his Fund obligation to the brief remainder of a single agreement’s duration. By the time the district court entered its injunction, almost three years after the Fund’s adoption, all non- NECA contractors had had more than ample opportunity to with- draw from NECA bargaining units and negotiate their own in- dependent labor agreements, free of any Fund obligation. 1] majority this “clearly interfere[d] with the market forces that set the price of such contracts” and “would tend to stabilize the price of electrical construction contracts, a practice illegal per se under the Sherman Act.” Signifi- cantly, there was no evidence before the court to support this entirely gratuitous presumption. We believe that in making its finding that the Fund provision was to be inserted in “all agreements,” the court below misapprehended the intent of the parties. As the deposition testimony and other evidence showed, their real intent was to insert the industry fund only in NECA agreements and to have it apply only to NECA members and those other contracturs who voluntarily designated NECA as their bargaining agent or adopted NECA agreements. Nevertheless, in view of the lower court’s holding that lack of coercion was irrelevant and its failure to find that any non-NECA contractor was in fact coerced, this Court need not review the lower court’s finding concerning the purported scope of the agreement. The agreement, even as interpreted by the court below, does not constitute illegal per se price fixing.’ *The lower court did not attempt to explain how the defendants intended to accomplish the fund’s “insertion” in non-NECA agree- ments. In fact, involuntary insertion was impossble because (1) NECA has nothing to do with the negotiation of non-NECA agree- ments, and (2) since industry funds are permissive, not mandatory, bargaining subjects, any non-NECA contractor could squelch any attempt by the IBEW to include the Fund provision in its contract by simply refusing to talk about it. As the NLRB found, the union was well aware that it was prohibited by labor law from negotiating to impasse on a permissive subject of bargaining. Significantly, plain- tiffs neither alleged nor proved that any of them was a party to a single non-NECA agreement which included the industry fund pro- vision, much less that they were ever compelled to adopt the Fund provision. 12 To Circuit Judge Hall, dissenting, the majority’s “blind application of the per se rule against price fixing... ignores the realities of this case . . .” Confronting these realities, the dissenting judge pointed out that “one of the main purposes of the industry fund is to help defray the costs of the negotiation process” and that under the majority’s ruling, “non-NECA contractors would con- tinue to enjoy the benefits of NECA’s bargaining” with- out paying their share of those costs (678 F.2d at 503-04). V. REASONS WHY THE PETITION SHOULD BE GRANTED A. This Case Presents An Important Question Of First Impression Which Should Be Considered By This Court—Whether Voluntary Payment Into An Industry Fund, Typical Of Funds Prevalent Throughout The Construction Industry—Constitutes Illegal Per Se Price Fixing. The Court should grant certiorari in this case of admit- ted “first impression” to determine whether voluntary payment into an industry fund, typical of thousands of such funds long existing throughout the construction in- dustry, constitutes illegal per se price fixing under the antitrust laws. It has long been established that industry funds are permissive bargaining subjects under the na- tional labor laws and may lawfully be inserted in collec- tive bargaining agreements. Nevertheless, the Fourth Circuit concluded that the Fund constituted illegal per se price fixing because it added “1% of labor costs” to “IBEW construction contracts.” The panel’s decision ignores entirely the recognized status of industry funds as a bona fide permissive subject of bargaining. See, e.g., Detroit Window Cleaners Union, Local 139 (Daelyte Service Co.), 126 NLRB 63 (1960); 13 Mechanical Contractors Ass’n. v. Local 420, United Ass’n. of Journeymen, 167 F.Supp. 35 (E.D.Pa. 1958), affd., 265 F.2d 607 (3rd Cir. 1959). Inclusion of permis- sive bargaining subjects in collective bargaining agree- ments is part of “the very fabric of effective collective bargaining.” Oil, Chemical & Atomic Workers Interna- tional Union v. National Labor Relations Board, 405 F.2d 1111, 1117 (D.C. Cir. 1968) (Burger, J.). This Fund is not materially different from all other industry funds which have long been recognized as lawful subjects of bargaining. Industry funds have existed on a widespread basis throughout the construction industry for many years. There is nothing mysterious or venal about them. They are simply a method that has been developed for collecting funds from consenting employers to improve labor relations and employer and employee productivity throughout the construction trades. Typically, funds like the one at issue here are estab- lished as provisions of collective bargaining agreements negotiated between industry bargaining units and the unions representing various trades and crafts. All em- ployers who adopt such agreements pay into these funds. The purpose is to provide funds to negotiate and adminis- ter collective bargaining agreements, improve job pro- ficiency, train employers in the development of better business practices, keep them advised of new technology, assist them in training managers and supervisors, and similar endeavors. Since the entire unionized industry benefits from these funds, the practice is for union em- ployers to contribute voluntarily to them. This is precise- ly what is involved here. The panel majority’s per se holding totally disregards the benefits which industry funds confer on association and non-association contractors alike. It utterly ignores 14 Judge Hall’s dissenting conclusion that “[{s]ince all elec- trical contractors benefit from NECA’s collective bargaining, it is only fair that they share in the costs of such bargaining.” 678 F.2d at 504. Indeed, the fact that a “restraint” is designed to eliminate “free riders” has been cited by this Court as a reason for judging it under the rule of reason, rather than the per se standard. Con- tinental T.V., Inc. v. GTE Sylvania, 433 U.S. 36, 55 (1977).? Petitioners submit that the Fund bears no resemblance to any of the “naked” restraints traditionally considered per se antitrust violations. Broadcast Music, Inc. v. Col- umbia Broadcasting System, Inc., 441 U.S. 1 (1979). Rather, it is a well recognized subject of bargaining be- neficial to the entire electrical construction industry. The Court should grant certiorari to resolve an unpre- cedented question of antitrusi law: whether inclusion of an industry fund in a multiemployer agreement pursuant to a binding delegation of bargaining authority con- stitutes illegal per se prive fixing. 7Since Sylvania, a substantial body of case law and scholarly commentary has endorsed applying the rule of reason to restraints engendered by a legitimate desire to eliminate “free riders.” See, . e.g., Davis-Watkins Co. v. Service Merchandise, 686 F.2d 1190 (6th Cir. 1982); U.S. Trotting Ass’n v. Chicago Downs Ass’n, Inc., 665 F.2d 781 (7th Cir. 1981); USM Corp. v. SPS Technologies, Inc., 1982-83 Trade Cas. € 65,077 (7th Cir. 1982). 15 The Court Of Appeals’ Unprecedented Condemnation Of A Voluntary Industry Fund Is In Direct Conflict With Decisions Of The National Labor Relations Board And Misapplies This Court's Holding In Perma Life The lower court’s summary judgment holding—that voluntary inclusion of an industry fund in a multiem- ployer collective bargaining agreement constitutes per se price fixing—is in conflict with national labor policy and with the holdings of the NLRB and its General Counsel dealing with this industry fund. The decision below ignores the established labor law principle that industry funds may properly be proposed for inclusion in a collective bargaining agreement so long as they are not insisted upon to the point of impasse. For this reason alone the Court should review this case to resolve its conflict with national labor law and policy. NLRB vy. Wooster Division of Borg-Warner Corp., 356 U.S. 342 (1958), Responding to plaintiffs’ charges that the IBEW illegally coerced non-NECA contractors to adopt the Fund provision, the NLRB extensively investigated the implementation of the 1976 National Collective Bargain- ing Agreement. Rejecting plaintiffs’ charges, the Board's General Counsel concluded that “the International's poli- cy at all times was to request, rather than insist, that the Industry Fund be included during negotiations with non- NECA members” (Appendix, pp. 127a-138a, at p. 129a, emyhasis added), In the three cases where it was alleged that isolated local unions of the IBEW used coercion to obtain con- tractor acceptance of the Fund, the Administrative Law Judges found no coercion (Appendix, pp. 134a-150a and 16 15la-168a). The only case which Plaintiffs elected to appeal was affirmed by the National Labor Relations Board. IBEW Local No. 12 (Commonwealth Electric Co.), 252 NLRB No. 40 (1980). The lower court sidestepped the Board’s determination by the astonishing holding that coercion was irrelevant. Relying solely on this Court’s in pari delicto holding in Perma Life Mufflers v. International Parts Corp., 392 U.S. 134 (1968), the lower court majority held that even if non-NECA contractors voluntarily elected to become parties to the “conspiracy” by accepting the fund obliga- tion, they were still entitled to relief under the antitrust laws." The court’s reliance on Perma Lie misses the mark. That case held only that a nominal co-conspirator, injured by a naked per se restraint, was not necessarily barred from asserting a claim because of his own participation in the illegal conspiracy. The Perma Life holding comes into *The court's unprecedented expansion of Perma Life has this extraordinary result: A non-NECA contractor goes to the local union's hiring hall with the option of either assenting to an IBEW- NECA collective bargaining agreement, which contains the Fund provision, or of negotiating a separate independent agreement with- out the Fund. Since the industry fund is a permissive subject of bargaining, the union cannot and will not, as the NLRB found, insist on its inclusion in the independent agreement. If, however, the employer prefers not to negotiate independently, he will simply accept the IBEW-NECA agreement as his own. If the lower court decision stands, the employer adopting the second option may be allowed to sue and collect three dollars for every dollar he voluntarily contributes to the Fund. Thus the voluntary inclusion of a valid bargaining subject in an unexceptional collective bargaining agree- ment is converted into—according to class counsel's estimate—a $120,000,000 treble damage windfall (Appendix, p. 172a). 17 play only after a restraint of trade has been established, and the secondary question then arises whether those who are restrained are entitled to damages. But the ex- istence of the restraint must first be established.’ The court below did not find that collecting Fund pay- ments from NECA members was in any sense an illegal restraint of trade. The holding was that the Fund could not be collected from consenting non-NECA contractors because it eliminated a competitive advantage enjoyed by those contractors. But if this was a “competitive advan- tage” it was one that non-NECA contractors relinquished voluntarily, presumably because they believed that the countervailing benefits they received justified the Fund obligation.'’ The fact that non-NECA contractors voluntarily accepted the Fund negates the existence of any restraint imposed upon them. See Columbia * The facts in Perma Life highlight its inapplicability to this case. There the plaintiff franchisees had been presented with form fran- chise agreements, containing a variety of illegal restraints (i.e., vertical price fixing, tie-ins, exclusive dealing arrangements and territorial restrictions), on a take-it-or-leave-it basis. This Court held only that the franchisees acceptance of their franchises did not bar them, on the theory of in pari delicto, from claiming injury as a result of their franchisers’ imposition of the illegal restraints. The vast majority of non-NECA contractors who accepted the terms of IBEW-NECA collective bargaining agreements paid into the Fund without protest, presumably because they recognized that they had voluntarily agreed to accept the Fund obligation, and be- cause they realized that they benefitted from the industry services which the Fund financed. The sole class representatives in this case are two dissatisfied former NECA members who desire to free ride on NECA's efforts. Yet even they concede the value of NECA’s services. Thus the General Counsel of one of the two class represent- 18 Broadcasting System, Inc. v. ASCAP, 620 F.2d 930, 936 (2nd Cir. 1980), cert. denied, 450 U.S, 970 (1981). There is no valid distinction between a NECA member who authorizes u chapter to negotiate for him, and is thus bound by any lawful agreement made, and a non-NECA contractor who voluntarily gives the chapter written au- thority to negotiate contracts and amendments on his behalf or voluntarily adopts an already negotiated agree- ment containing the Fund. Both NECA and non-NECA contractors have voluntarily agreed to accept the terms of a valid collective bargaining agreement, including the industry fund. Yet, as a result of the lower court’s in- comprehensible distinction, voluntary adoption of the Fund by NECA contractors is permissible, while voluntary adoption by non-NECA contractors is per se illegal price fixing." atives, William Schwartzkopf of plaintiff Commonwealth Electric, testified that Commonwealth voluntarily continued to make NEIF payments in the St. Paul, Minnesota area in recognition of th. valu- able collective bargaining and 'abor relations services performed by the local NECA chapter. Schwartzkopf Dep., pp. 490-493; 530-533. Since the class representative voluntarily elected to contribute to the Fund, how can it now be heard to demand treble damages? '' The lower court's illogical distinction dissolves under analysis. Assume that a contractor joins NECA, and agrees to be bound by the terms of a local IBEW-NECA agreement, including the industry fund.’ There is no violation here under the lower court's holding. During the term of the agreement, he resigns from NECA, but continues to operate under the terms of the IBEW-NECA agree- ment, and continues to pay without protest into the industry fund. Under the lower court's decision, his resignation from NECA con- verts lawful payment into illegal per se price fixing. No rationale can justify this result. 19 We submit that plaintiffs failed to demonstrate any restraint of trade, much less illegal per se price fixing, in the absence of proof that they were compelled to forego their alleged “competitive advantage.” Despite the ab- sence of any restraint on any contractor’s freedom of choice, the lower court, by its egregious misapplication of the in pari delicto doctrine, violated fundamental anti- trust principles and endangered the institutions which maintain the collective bargaining structure of an entire industry. In so doing the lower court has come into se- rious conflict with national labor law and policy. This conflict should be resolved by the Court. C, The Court Of Appeals’ Novel Holding That A Legal Subject Of Bargaining—Absent Any Demonstrated Effect On Commercial Competition-Constitutes Illegal Per Se Price Fixing Conflicts With Important Antitrust Principles Established By This Ce ort in Apex Hosiery Just as no finding was ever made that any non-NECA contractor was compelled to accept the Fund provision, no finding was ever made that payment into the Fund affected commercial competition in any business market. The district court expressly declined to make any such finding—and for good reason. The Fund obligation was simply so small an element of cost in comparison with the other labor and cost factors that go into making up a job bid that it could not be presumed to have any demonstr- able impact on the composition of competitive bids." “Executives from a number of plaintiffs testified at deposition that the Fund did not affect their competitive position (Appendix, pp. 189a-192a; 187a-188a). The district court held that all such evidence was irrelevant because proof of anticompetitive effect was 20 Nowhere does the Fund provision even refer to the price of electrical contracting work. Yet, despite the ab- sence of any finding of actual anticompetitive effect, the court below adopted a conclusive presumption that the industry fund “would tend to stabilize the price of elec- trical construction contracts, a practice illegal per se under the Sherman Act.” This holding makes a mockery of the axiom that a labor agreement is not an actionable restraint of trade absent “some form of restraint upon commercial competition in the marketing of goods or services.” Apex Hosiery Co. v. Leader, 310 U.S. 469, 495 (1940). Accord, Mid-American Regional Bargaining Ass'n v. Will County Carpenters Dis. Council, 675 F.2d 881 (7th Cir. 1982) cert. denied, 103 S.Ct. 82 (1982). The lower court’s suggestion that the price fixed was the price of “IBEW construction contracts” (678 F.2d at 501) makes its decision even more mystifying. The only “IBEW construction contracts” at issue are collective bargaining agreements. Collective bargaining agree- ments are not commodities which are bought and sold; they have no “price” which can be fixed in violation of the antitrust laws. The only price they direc ly affect is the price of labor; and the price of labor is, by statute, “not a commodity or article of commerce.” 15 U.S.C. See. 17. There is simply no justification for equating an insignif- icant increase in the cost of labor with fixing the price of electrical contracting work in a commercial market. An increase in the cost of labor may or may not result in a unnecessary as a matter of law (498 F.Supp. at 537-39; Appendix, pp. 69a-72a). The court of appeals, though not mentioning this evidence, implicitly agreed with the district court (678 F.2d at 501; Appendix, mp. Lba-16a). 21 commercial price increase. The requirement that an actual effect on commercial competition be proven cannot be satisfied by the expedient of labelling every increase in the cost of labor as “price fixing.’ See Broadcast Music, Inc. v. Columbia Broadcasting System, Inc., 441 U.S. 1, 9 (1979). Otherwise, every collective bargaining agree- ment which increased the cost of labor would be suspect as price fixing. The panel’s facile per se price fixing theory is totally unrealistic. There is no reason for singling out one partic- ular bargaining subject—an industry fund which equitab- ly distributes necessary industry labor costs—and labell- ing it illegal per se price fixing. Bargaining subjects typically impact the cost of labor. The very purpose of collective bargaining is to establish the cost of labor. By equating a one per cent or less increment of labor cost with illegal per se price fixing, the court below ignored the crucial distinction made in Apex Hosiery between a valid collective bargaining agreement, sanctioned by national labor policy, and a restraint directly imposed on commer- cial competition. See Carpenters Local Union No. 1846 v. Pratt-Farnsworth, Inc., 690 F.2d 489, 533-34, n.24 (5th Cir. 1982). The lower court’s rule of per se illegality does not discriminate between “good” and “bad” industry funds, but would summarily condemn them all. By this in- discriminate misapplication of the per se standard, peti- tioners were deprived of the opportunity of defending the Fund under the rule of reason. Instead, the lower court created a new category of illegal per se price fixing out of whole cloth, without any showing that any price was fixed or that there was any anticompetitive effect on commer- cial competition, much less a demonstration that industry funds have a universally pernicious effect on commercial competition. 22 The Court should grant certiorari to decide whether inclusion of a legal subject of bargaining in a collective bargaining agreement, absent any demonstrated effect on commercial competition, constitutes illegal per se price fixing. D. The Fourth Circuit's Decision To Apply A Per Se Standard To A Collective Bargaining Agreement Conflicts With This Court’s Decision In Connell And Decisions Of Other Circuits. This Court and the courts of appeal have been reluctant to apply the per se standard in a collective bargaining context. In Connell Construction Co. v. Plumbers & Steamfitters, Local No. 100, 421 U.S. 616 (1975), the Court found that a secondary boycott agreement was subject to the antitrust laws. But, instead of holding that the boycot: was per se illegal (as it did in a non-labor context in United States v. General Motors, 384 U.S. 127 (1966)), the Court remanded the case “for consideration whether the agreement violated the Sherman Act.” The Court noted: In this area, the accommodation between federal labor and antitrust policy is delicate. Congress and this Court have carefully tailored the antitrust stat- utes to avoid conflict with the labor policy favoring lawful employee organization, not only by delineat- ing exemptions from antitrust coverage but also by adjustin the — of the antitrust remedies them- selves. /d. at 636. The Fourth Circuit’s imposition of per se liability is in conflict with the approach taken by the Second and Eighth Circuits. These circuits have held that, even when labor’s antitrust exemption is inapplicable, labor anti- trust cases should ordinarily be evaluated under the rule 23 of reason. Rerman Enterprises Inc. v. Local 333, Int'l Longshoremen’s Ass’n, 644 F.2d 930 (2d Cir. 1981); Meat Cutters Local 576 v. Wetterau Foods, Inc., 597 F.2d 133, 136, n.6 (8th Cir. 1979). Recent scholarly commentary - also favors the application of the rule of reason. See, e.g., Casey & Cozzillow, Labor-Antitrust: The Problems of Connell and a Remedy That Follows Naturally, 1980 Duke L.J. 235, 278; Comment, Consolidated Express: Antitrust Liability for Illegal Labor Activities, 80 Col. L.Rev. 645, 660-63 (1980)." But even were the Fund not part of a legitimate collec- tive bargaining agreement, it should not have been summarily condemned as illegal per se price fixing. The court below stated: The critical analysis in determining whether a partic- ular activity constitutes a per se violation is whether the activity on its face seems to be such that it would always or almost always restrict competition and decrease output instead of being designed to increase economic efficiency and make the market more rather than less competitive. 678 F.2d at 500 (citing Broadcast Music, Inc. v. CBS, 441 U.S. 1 (1979)). The required “critical analysis” has not been made here. Nor could it be made without a trial on the merits enabling the jury to weigh all material aspects of the Fund—its purpose, its effect, its benefits and its voluntariness. Yet the court below condemned the Fund '’ The court below made no attempt to distinguish its own earlier precedent in Smitty Baker Coal Co. v. United Mine Workers, 620 F.2d 416 (4th Cir. 1980), cert. denied, 449 U.S. 870 (1980), which, like the cases cited above, rejected the imposition of per se liability in a collective bargaining context. Indeed, despite the dissent’s reliance on Smitty Baker, the panel majority fails even to mention it. 24 as illegal per se price fixing on a motion for summary judgment. The lower court’s failure to recognize that the industry fund should be evaluated under the rule of reason conflicts with prevailing law and should be re- viewed by this Court. VI. CONCLUSION This case presents important issues concerning indus- try funds which have never before been considered under the antitrust laws. Industry funds have existed in the construction industry on a widespread basis for years. They have never before been condemned or even con- sidered under the antitrust laws. They should not have been summarily adjudged illegal per se price fixing with- out any inquiry under the rule of reason into their utility or actual competitive impact. The court below, by inventing a novel and in- supportable per se price fixing classification and applying it to a lawful and prevalent type of labor agreement, greatly expands the impact of the antitrust laws on cx ‘lec- tive bargaining and creates serious conflicts with national labor law and policy. It also threatens to inflict financial ruin on petitioners, who for decades have provided re- sponsible and peaceful collective bargaining for the entire electrical construction industry. Petitioners respectfully submit that the lower court’s decision is of immense legal 25 and practical significance to the entire construction indus- try and certiorari should be granted. Respectfully submitted, EARL W. KINTER Guy FARMER DONALD M. BARNES (Counsel of Record) DENNIS C, CUNEO FARMER, MCGUINN, FLOOD, ARENT, Fox, KINTNER, BECHTEL & WARD PLOTKIN & KAHN 1000 Potomac Street, N.W. 1050 Connecticut Ave. N.W. Suite 402 Washington, D.C. 20036-5339 Washington, D.C. 20007 (202) 857-6044 (202) 298-6910 MILTON HANDLER SHALE D. STILLER STANLEY D. ROBINSON PETER H. GUNST KAYE, SCHOLER, FIERMAN, FRANK, BERNSTEIN, CONAWAY Hays & HANDLER & GOLDMAN 425 Park Avenue 2 Hopkins Plaza New York, New York 10022 Baltimore, Maryland 21201 (212) 759-8400 (301) 547-0500 Attorneys for Petitioners National Electrical Con- tractors Association, Robert L. Higginsand H.E. Autrey and Other Individuals Sued In Their Individual Capuci- ties and as Trustees of The National Electrical Industry Fund; Colgan Electric Company, Inc. and Miller Elec- tric Company January 7, 1983 la UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT Nos. 80-1808 80-1809 NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION, INC., et al. Defendants-Appellants Vv. NATIONAL CONSTRUCTORS ASSOCIATION, et al. Plaintiffs-Appellees Appeal from the United States District Court for the District of Maryland. Herbert F. Murray, District Judge. Argued March 3, 1981 Decided May 17, 1982 Before WIDENER and HALL, Circvit Judges, MICHAEL, District Judge* * United States District Court for the Western District of Virginia, sitting by designation. Stanley D. Robinson (Kaye, Scholer, Fierman, Hays & Hand- ler; James P. Garland, Anthony W. Kraus, Nora Winay, Sem- mes, Bowen & Semmes; Laurence J. Cohen, Richard M. Res- nick, Sherman, Dunn, Cohen, Leifer & Counts; Milton Hand- ler, Michael Malina; Peter H. Gunst, Mary K. Farmer, Frank, Bernstein, Conaway & Goldman; Guy Farmer (Farmer, Wells, McGuinn, Flood & Sibal, on brief) and Donald M. Barnes (Ear] W. Kintner, Dennis C. Cuneo, Arent, Fox, Kintner, Plotkin & Kahn, on brief) for Appellants; Wilbur D. Preston, Jr. (Robert 2a M. Wright, Gerson B. Mehlman, James R. Chason, Whiteford, Taylor, Preston, Trimble and Johnston, on brief); Alan D. Cirker (Anthony J. Obadal, Zimmerman and Obadal; Ira Greenberg, Stokes & Shapiro, on brief) for Appellees; (K. L. Estabrook, Donald F. Nicolai, Lindabury, McCormick and Estabrook, on brief) for Amicus Curiae Mechanical Con- tractors Association of America, Inc.; (John P. Frank, Lewis and Roca, on brief) for Stephen J. Burton, Felhaber, Larson, Fenlon and Vogt, on brief) for Amicus Curiae NECA, Pipe, and Masonry; (Robert J. Fenlon, StephenJ. Burton, Felhaber, Larson, Fenlon and Vogt, on brief) for Amicus Curiae The Sheet Metal and Air Conditioning Contractors National Asso- ciation, Inc.; (J. Albert Woll and Lawrence Gold on brief) for Amicus Curiae The American Federation of Labor and Con- gress of Industrial Organizations; (Jerry J. Williams, Keith B. Bardellini, Freshman, Mulvaney, Marantz, Comsky, Forst, Kahan & Deutsch, on brief) for Amicus Curiae Construction Industry Advancement Fund of Southern California, Fund for Construction Industry Advancement, San Diego Construction Industry Advancement Fund, and Associated General Con- tractors, San Diego County, Inc. — WIDENER, Circuit Judge: The National Electrical Contractors Association, the Inter- national Brotherhood of Electrical Workers, and other defend- ants appeal the award of a permanent injunction to plaintiffs who include the National Constructors Association and numer- ous construction companies, after a finding that the actions of the defendants amounted to price fixing illegal under § 1 of the Sherman Act, 15 U.S.C. § 1. National Constructors Associa- tion, et al. v. National Electrical Contractors Association, Inc., et al., 498 F. Supp. 510(D. Md. 1980). This appeal is taken under 28 U.S.C. § 1292(a)(1) permitting appeals from the award of injunctive relief. A FRCP 54(b) certificate was en- tered by the district court relating to the counterclaims. We affirm, and modify the injunctive order only slightly. 3a This case involves a private antitrust action for injunctive relief under § 16 of the Clayton Act, 15 U.S.C. § 26, and damages under § 4 of that Act, 15 U.S.C. § 15, fora violation of § 1 of the Sherman Act, 15 U.S.C. § 1.' The plaintiffs below, appellees here, are the National Constructors Association (NCA), an unincorporated trade association made up of com- panies who perform electrical construction work and transact business in the electrical construction industry, and other corporations performing electrical contracting work which em- ploy IBEW electrical workers.’ The defendants below, appel- lants here, are the National Electrical Contractors Association (NECA), an incorporated trade association, whose members perform electrical construction work; the International Brotherhood of Electrical Workers (IBEW), an unincorpo- rated labor union representing electrical workers throughout the country, Charles H. Pillard, President of IBEW In- ternational; Robert L. Higgins, Executive Vice President of NECA; Miller Electric Co, and Colgan Electric Co., corpora- tions engaged in electrical contracting work and members of NECA; and the trustees of the National Electrical Industry Fund.’ '§$ 1 of the Sherman Act provides in part; Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce mate the several States, or with foreign nations, is declared to be illegal * The district court has certified a class of plaintiffs as those elec- trical contractors who, since July 1, 1977 have not been members of NECA and who perform electrical construction work using workers obtained or employed under the terms of collective bargaining agree- ments with locals of the IBEW, which agreements contain or in- corporate by reference the terms of Article 6 of the NECA-IBEW national agreement. The plaintiffs/appellees may be referred to as NCA or as appellees. * The defendants/appellants may be referred to as NECA or as the appellants, da NECA is the largest trade association in the electrical con- tracting industry, consisting of at least 133 local trade associa- tions or chapters whose members are both union and non-union electrical contractors. The IBEW is the largest union representing electrical workers, representing the vast major- ity of all of the organized electrical workers in the nation. At the time of the district court's order the members of NECA performed slightly more than 50% of the electrical contracting work in the nation. Since 1960 NECA members have per- formed between 50 and 60% of such work. Because of their respective positions, much of the collective bargaining in the electrical contracting industry is done by IBEW and NECA. Local chapters of NECA are assigned territories throughout the country which coincide with the jurisdiction of one or more of the more than 400 IBEW locals. The local chapters of NECA act as multi-employer bargaining representatives and negoti- ate local collective bargaining agreements with the local IBEW unions. Individual electrical contractors who are not members of NECA usually enter into a labor agreement with the IBEW in one of several ways: (1) Letter of Assent—A—An “A” Letter of Assent authorizes the local NECA chapter to act as the collective bargaining representative for the employer in negotiations with the local union. As such, the employer is, of course, considered a member of the NECA chapter bargaining unit. (2) Letter of Assent—B—A “B” Letter of Assent binds the employer to the terms of the local IBEW-NECA collective bargaining agreement and all approved amendments, but does not make the employer part of the bargaining unit. (3) Interna tional agreements—Designed for employers operating on a national basis, such an agreement binds the employer to the terms of local union contracts in the areas in which the employ- er performs work. (4) Project agreements—These agreements apply to a single construction site and contain any provisions that may be agreed upon. A local contractor may also negotiate separately with the IBEW although this is not commonly done. Both NECA and IBEW International reserve the right to approve or veto all collective bargaining agreements entered into by the local organizations. oa NECA and IBEW International also enter into national agreements, whose terms are incorporated into local agree- ments between NECA and IBEW. It is a provision of the 1976 National Agreement between NECA and IBEW‘ that appel- lees challenged below as being in violation of the Sherman Act. The first five articles of the 1976 agreement provide for the National Electrical Benefit Fund (a pension fund), shift work, management rights, and apprentice ratios. Article 6, the one challenged below, provides for the establishment of an indus- try fund. Article 6 states: The parties agree to the establishment of a le ily con- — trust to be called the National Electrical Industry und, All construction agreements in the electrical industry shall contain the following language: “Each individual employer shall contribute one per- cent (1%)* of the gross labor payroll to be forwarded monthly to the National Electrical Industry Fund in a form and manner ss by the trustees no later than fifteen (15) calendar days following the last day of the month in which the labor was performed. Failure to do so will be considered a breach of this agreement on the part of the individual employer.” *(an amount not to exceed 1% nor less than 0.2 of 1% as determined by each local chapter and approved by the trustees) The National Electrical Contractors Association will be responsible to see that the objects of the fund, as outlined in the trust, are adhered to strictly. No of the funds collected under this trust shall be used for purely social activities, No part of the funds collected under this trust shall be used for any purpose which is held to be in conflict with the ‘This agreement was announced in the spring of 1976 and ratified at the October 1976 meeting of the NECA Board of Governors. The agreement went into effect on July 1, 1977. 6a interests of the International Brotherhood of Electrical Workers and its local unions. Both parties will be provided with a copy of the Trust and any further amendments.’ On December 8, 1976, President Pillard of IBEW and Vice President Higgins of NECA signed the agreement containing the provision for the industry fund. Contemporaneously they signed a paper called “Basic Understandings and Interpreta- tions of the IBEW-NECA Agreement” which provided in part: Article Six—Industry Fund (1) Itis understood that because of the cost of adminis- tration of labor agreements, industry advancement and services rendered to the electrical contracting industry by the National Association and the NECA chapters that the intent of this Article is to insert the industry fund con- tribution language in all IBEW construction agreements containing the NEBF language except those covering em- ployees of utility companies and municipalities and em- ployees working under contractor equipment mainte- nance agreements and employees working for motor shops. In return, NECA will provide basic service to electrical contracting employers employing workmen obtained from the IBEW without regard to the affiliation of the individual employer with NECA, Appellees challenged the industry fund provision under the Sherman Act, alleging that the fund added a 1% charge to the cost of al) their electrical construction contracts with IBEW whether the contractor belonged to NECA or not. Appellees noted that prior to the 1976 agreement members of NECA paid dues and a service charge for their membership in and services 'The National Agreement provides that less than 1% of the labor payroll may be collected by the local NECA chapter, but the local must collect at least .2 of 1%, the amount which must be remitted to the national organization. Both parties, as well as the district court, have treated the required contribution to be 1%. The record supports a conclusion that 1% is the usual amount collected. 7a received from NECA.* The 1976 agreement thus increased their cost of doing business. Thus, non-NECA members, who paid no dues or service charges, had a competitive advantage over NECA members when bidding on contracts. In order to end this situation, argued appellees, appellants initiated the 1% contribution to be applied uniformly to all IBEW construc- tion contracts whether the contractor was a member of NECA or not, thereby stabilizing the price of electrical construction contracts. As a result, non-NECA contractors no longer had a competitive edge over their NECA competitors. Appellees claimed that appellants’ actions constituted price fixing, a per se violation of the Sherman Act. The district court agreed and in a thorough and detailed opinion granted summary judgment for the appellees, finding the anticompetitive purpose neces- sary for a finding of price fixing a per se violation of the Sherman Act.’ The district court also summarily dismissed as without merit the NECA defendants’ counterclaims that appellees were en- gaged in a boycott, illegal under § 1 of the Sherman Act, by their concerted refusal to pay what they owed into the industry fund. 498 F. Supp. at 551. The NECA defendants appeal! this grant of summary judgment for the appellees on the counterc- laims. Before dealing with appellants’ substantive arguments, we note that appellants Colgan Electric and Miller Electric argue as a separate issue that the district court erred in not granting their motion to dismiss the complaint because venue was im- proper as to them since they were not transacting business in *The dues were $50.00 per year with a service charge of .2% of their labor payroll after the first year of membership. ’ The district court discussed at length the evidence before it which had been produced by both sides regarding the agreement. We need not discuss such evidence in any detail except as it applies to the issues to be dealt with later in this opinion. 8a Maryland as required by § 12 of the Clayton Act, 15 U.S.C. § 22." The district court found that they were in fact transact- ing business in Maryland because of their dealings with NECA to which they both belonged and paid substantial amounts in the form of dues and industry fund contributions. We cannot say that such a conclusion is clearly erroneous, and accordingly affirm the district court’s denial of the motion to dismiss. United States v. Scophony Corp., 333 U.S. 795 (1947). See especially Scophony at p. 807, and the concurring opinion of Justice Frankfurter at p. 818. Appellants’ primary contention on appeal is that summary judgment for the appellees in their price fixing case was inap- propriate. Preliminarily we note that the Supreme Court has cautioned against the granting of summary judgment in anti- trust cases, stating in Poller v. Columbia Broadcasting Sys- tems, 368 U.S. 464, 473 (1962), that “summary procedures should be used sparingly in complex antitrust litigation where motive and intent play leading roles . . .,” and we have had occasion to follow this case in Morrison v. Nissan Co., Ltd., 601 F.2d 139 (4th Cir. 1979). This is not to say that summary judgment is never appropriate in antitrust cases, see White Motors Co. v. United States, 372 U.S. 253 (1963), and in fact grants of summary judgment in such cases have been explicitly affirmed. Citizens Publishing Co. v. United States, 394 U.S. 131 (1969); First National Bank v. Cities Service, 391 U.S. 253 (1968). With these rules in mind, we analyze appellants’ arguments. They initially contend that summary judgment was inappro- *§ 12 of the Clayton Act reads in part: Any suit, action, or preceeding under the antitrust laws against a corporation may be brought not only in the judicial district whereof it is an inhabitant, but also in any district wherein it may be found or trai.sacts business. . . The ies agree that Miller and Colgan are neither inhabitants of Maryland nor are they found there. 9a priate because a genuine issue of fact exists regarding the meaning of Article 6 of the NECA-IBEW National Agree- ment. First, they argue that the language of Article 6, when considered in connection with the remainder of the National Agreement, is ambiguous on its face. The district court dis- agreed, holding instead that the language in the agreement clearly required the inclusion of the fund in all IBEW electrical construction contracts at issue here. We agree that there is nothing ambiguous at all about the agreement's language. On its face the agreement requires inclusion of the industry fund clause in all such contracts. Even if the language itself is clear, argue the appellants, a consideration of the evidence submitted in the form of docu- ments and pre-trial depositions create an issue of fact as to the meaning of Article 6. To support his argument, appellants principally rely upon several pieces of evidence which we shall consider separately. We find no error in the district court’s rejection of the pre-trial depositions submitted by the appel- lants as sufficient to create an issue of fact. This testimony amounted to no more than a denial of the meaning of the clear words of the contract. In no way does it seek to clarify the terms of the contract, but instead seeks to change the terms of an already clear agreement.’ Anpellants also contend that other documents submitted to the district court create a question of fact as to the meaning of Article 6. The minutes of the October 1976 Board of Governors meeting of NECA reflect that Robert Higgins, Executive Vice President of NECA, read to the group a letter from its counsel, * This also applies to IBEW President Pillard’s letter to NCA in June 1977 in which Pillard denied the interpretation of the agreement that NCA placed upon it, but immediately followed the denial with the statement that: “It is true that, by July 1, 1977, we expect that all local IBEW-NECA agreements will have been amended to include a number of new provisions, including contributions to the [Industry] Fund.” 10a Henry H. Glassie, with reference to whether or not the NECA bylaws would have to be amended to reflect the industry fund as a change in NECA dues. Concluding that they would not, Glassie in part stated, as transcribed, as follows: “If the indus- try fund provided for in the Article 6 of the agreement referred to in proposal number 3 applies to the NECA members, as such, a change in the by-laws would be involved. However, we are informed that the contribution to this fund as provided in Article 6 will be required of all union electrical contractors whether they are members of NECA or not. Indeed, would be applicable to a company after resignation from NECA. And moreover that the contribution will not be required of non- NECA members and nonunion members of NECA.” We first note that the minutes of the meeting are self con- tradictory. At one place they state that the industry fund contributions are “required of all union electrical contractors whether they are members of NECA or not.” In the second sentence following, the minutes then contradict themselves as they state that “the contribution will not be required of non- NECA members and non-union members of NECA.” The very best that can be said of the minutes is that they both corrobo- rate and flatly contradict NECA’s position in the case. There was a mistake made in reading the letter from Glassie, how- ever, or in the transcription of the minutes of the meeting. The letter itself did not contain the critical words “non-NECA members and,” but read (in the form of a clause in the letter) “The contribution will not be required of non-union members of NECA.” Even if we accept the minutes of the meeting instead of the content of the letter (and no reason is offered as to why the letter is not the proper document to use), they do not clarify any claimed ambiguity existing in the agreement bvt amount at the best to no more than an ambiguous interpretation there- of. The letter from Glassie obviously supports the already clear contract terms, and, indeed, its observation that contribution would not be required of non-union members of NECA only states the obvious. In all events, the status of non-union mem- bers of NECA is not a matter of dispute in this case and is of no consequence. lla Appellants next rely upon a December 1976 letter from Charles Pillard, President of IBEW International, to its locals which notes that local unions are to seek to reopen agreements with non-NECA employees by mutual consent to include the industry fund in “all non-NECA inside and outside construc- tion agreements.” We see no way that this letter supports appellants’ position, rather, it supports appellees’ contention that the provision for the industry fund goes in all applicable contracts. We reject appellants’ argument that this evidence shows that they merely intended to request the inclusion of the fund in labor contracts, for the letter obviously applied to existing contracts which would require agreement to change. Appellants next rely upon three letters from Pillard to three different local unions, their text being very similar, advising the locals that they must bargain in good faith with contractors who terminated their letters of assent. Again, we do not see how these letters support appellants’ contentions. At best they show that the local unions were advised as to their obligations under the National Labor Relations Act to bargain in good faith as to a whole contract and not take a take or leave it stance in negotiations. Finally, appellants rely upon a June 1978 letter from Pillard to the union locals which stated that local unions should specifically remove from the bargaining table the industry fund if a contractor objected to its inclusion. Not only was this letter sent almost a year after this lawsuit was filed, it only reflects how the union at that later time wished to handle the industry fund. It does not clarify the agreement itself. All of this evidence taken together shows no more than appellants’ attempt to change the meaning of the National Agreement to reflect how they now wish the contract to be read. None seeks to clarify any particular language or term in the National Agreement. As such, they have no effect upon an obviously clear agreement. The National Agreement and the Basic Understanding must be considered together as documents which are a part of the 12a same transaction. Gordon v. Vincent Youmans, Inc., 358 F.2d 261 (5th Cir. 1966); 4 Williston, Contracts (3d Ed.) § 628. The agreement states very clearly that the industry fund goes “in all construction agreements in the electrical industry.” As such, we need go no further to find appellants’ intent. Loca- france U.S. Corp. v. Intermodal Systems Leasing, 558 F.2d 1113 (2d Cir. 1977); E. P. Hinkel Co. v. Manhattan Co., 506 F.2d 201 (D.C. Cir. 1974). But, even if we go further, the Basic Understanding says the same thing, to wit: “in all IBEW construction agreements containing the NEBF language.” The evidence shows, without dispute, in the NECA-IBEW Employees Benefit Agreement, that all contracts with IBEW unions contain NEBF provisions whether the contractor be- longs to NECA or not. These two documents, then (the Na- tional Agreement and the Basic Understanding), read sepa- rately or together leave no doubt as to the applicability of the industry fund to all IBEW construction contracts. Appellants’ evidence shows no more than that NECA and the IBEW sought to read the contract differently at a later date. We also agree with the district court that the evidence presented was so removed in time and self serving as to not create a genuine issue of fact as to the meaning of the contract. The district court did not err in relying upon the clear language of the agreement in deciding the issue in the appellees favor.” © Appellants further claim that in actuality IBEW did not insist upon inclusion of the fund in every contract signed, and that some labor contracts entered into during this time did not include the industry fund. The fact that the IBEW was somewhat less diligent than it might have been in enforcing the provisions of the National Agreement is not a defense, especially since the language of the agreement itself leaves no room for debate that the fund was to be included in all construction contracts. An activity does not have to be a complete success to violate the antitrust laws. United States v. Trenton Potteries Co., 273 U.S. 392, 402 (1927); United States v. Bensinger Co., 430 F.2d 584 (8th Cir. 1970); Plymouth Dealers Assoc. v. United States, 279 F.2d 128 (9th Cir. 1960). 13a Va. Impression Products Co. v. SCM Corp., 448 F.2d 262 (4th Cir. 1971). Appellants next claim that the district court erred in con- cluding that the agreement in question constituted price fixing illegal per se under the Sherman Act. Instead, they contend that no restraint of trade existed. Alternately, if a restraint of trade is found, appellants contend that it must be judged under the rule of reason. Although a literal reading of the Sherman Act would make illegal all contracts if they restrain trade in any particular, the Supreme Court has construed the statute to outlaw only un- reasonable or undue restraints. Standard Oil of N.J.v. United States, 211 U.S. 1 (1911). In Standard Oil the Court estab- lished the rule of reason as a method of examining the actions of parties to determine if § 1 has been violated by looking at the purpose, character, and effect of the actions in question. Unreasonableness is based upon either the nature of the con- tract or upon the surrounding circumstances that give rise to an inference that the parties intended to restrain trade or enhance prices. National Society of Professional Engineers v. United States, 435 U.S. 679 (1978). By this standard, the courts decide whether conduct is unreasonably anticompeti- tive in character or in effect. Certain practices whose nature and effect are so clearly anticompetitive have been held to be illegal per se. Those specifically include price fixing.'' E.g. United States v. ! As the Supreme Court noted in Northern Pacific RW v. United States, 356 U.S. 1, 5 (1958): “because of their pernicious effect on competition and lack of any redeeming virtue [such activities] are conclusively presumed to be unreasonable and therefore illegal with- out elaborate inquiry as to the precise harm they have caused or the business excuse for their use.” The Court mentioned price fixing, division of markets, group boycotts, and tying arrangements. l4a Socony-Vacuum Oil Co., 310 U.S. 150 (1940); Pa. W. & P. Co. v. Consolidated G.E. L. & P. Co., 184 F.2d 552 (4th Cir. 1950). The critical analysis in determining whether a particular activ- ity constitutes a per se violation is whether the activity on its face seems to be such that it would always or almost always restrict competition and decrease output instead of being de- signed to increase economic efficiency and make the market more rather than less competitive. Broadcast Music, Inc. v. CBS, 441 U.S. 1 (1979). As just noted, price fixing is one of those practices that the Court has held to be illegal per se under the Sherman Act. United States v. Socony-Vacuum Oil Co., 310 U.S. 150 (1940). The Court stated at 223 “a combination formed for the purpose and with the effect of raising, depressing, fixing, pegging or stabilizing the price of a commodity in interstate or foreign commerce is illegal per se.” To be guilty of price fixing, the conspirators do not have to adopt a rigid price, substantially less has been found to be price fixing."* An activity can violate the per se rule even if its effect upon prices is indirect. United States v. General Motors, 384 U.S. 127, 147 (1966). In essence, an interference with the market forces freely setting the prices of goods is sufficient. Jn Re Yarn Processing Patent Validity Litigation, 541 F.2d 1127, 1137 (5th Cir.) cert. den. 433 U.S. 910 (1977). Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643 (1980), elimination of interest free short term credit; United States v. Con- tainer Corp. of America, 393 U.S. 333 (1969), exchange of price information as stabilizing although lowering prices; United States v. Parke, Davis & Co., 362 U.S. 29 (1960), setting minimum prices; Kiefer-Stewart Co. v. Seagram & Sons, 340 U.S. 211 (1951), setting maximum prices; United States v. Socony-Vacuum Oil, 310 U.S. 150 (1940), buying surplus gasoline to stabilize prices; Plymouth Dealers Assoc. of Northern Cal. v. United States, 279 F.2d 128 (9th Cir. 1960), establishing price list from which negotiations began. l5a There can be no doubt that the agreement in question here, which adds a 1% charge to all IBEW construction contracts falls within the definition of price fixing. By taking the addi- tional 1% of labor costs from non-NECA contractors it robs them of a competitive advantage beneficial to the public. It clearly interferes with the market forces that set the price of such contracts. The industry fund would tend to stabilize the price of electrical construction contracts, a practice illegal per se under the Sherman Act. Appellants further contend that even if the per se doctrine is applicable the district court erred because a genuine issue of fact existed as to the purpose of the fund. Additionally, they argue that the district court erred as a matter of law because it concluded that an anticompetitive effect need not be shown in order to prove price fixing. Appellants would argue instead that both anticompetitive purpose and effect must be proven. Such an argument is without merit. We know of no better statement of the rule than that of this court in United States v. Society of Ind. Gasoline Marketers, 624 F.2d 461, 465 (4th Cir. 1979), cert. den. 101 S.Ct. 859, where we stated: “Since in a price-fixing conspiracy the conduct is illegal per se, further inquiry on the issues of intent or the anti-competitive effect is not required. The mere existence of a price-fixing agreement establishes the defendants’ illegal purpose since ‘[t]he aim and result of every price-fixing agreement, if effective, is the elimination of one form of competition.’ United States v. Tren- ton Potteries, 273 U.S. 392, 397 .. .” See also 2 Areeda & Turner, Antitrust Law § 314.” As this decision makes clear, a specific finding of anticompetitive purpose and effect is not In United States v. McKesson & Robbins, 351 U.S. 305 (1956), the Court stated: “It has been held too often to require elaboration now that price fixing is contrary to the policy of competition underly- ing the Sherman Act & that its illegality does not depend on a showing of its unreasonableness, since it is conclusively presumed to be unreasonable. It makes no difference whether the motives of the l6a needed. But, even if it were, there is no doubt, as the district court found, that, on its face, this agreement has an anticompetitive purpose, which is to add the 1% of labor cost to all IBEW construction contracts which could only stabilize prices of NECA and non-NECA contractors. This brings us to appellants’ objections to the injunctive order entered by the district court which was in two parts. The first part of the injunction enjoins NECA and IBEW and others named from “seeking to continue, continuing, enforcing, maintaining, or renewing Article 6 of the National Agreement. . . as to any person, corporation, or other entity which is not a member of the National Electrical Contractors Association or from entering into, maintaining or participating in any act, contract, agreement, understanding, plan, pro- gram, or other arrangement with any person, corporation, or other entity which is not a member of the National Electrical Contractors Association that includes any provision for imple- mentation of Article 6 of the aforesaid agreement.” The second part of the injunction enjoins the same defendant from “de- manding, soliciting, collecting or receiving from any person, corporation or entity which is not a member of the National Electrical Contractors Association contributions to the Na- tional Electrical [ndustry Fund, or any alternate or substitute therefor, the effect of which would be to add a surcharge, determined by a uniform formula, to the cost of procuring all contracts with the IBEW in the electrical construction indus- try. ” Appellants object to the first part of the injunction as being overbroad in that a non-NECA employer who voluntarily as- participants are good or evil, whether the price fixing is accomplished by express contract or by some more subtle means; whether the participants possess market control; whether the amount of in- terstate commerce affected is large or small; or whether the effect of the agreement is to raise or to decrease prices.” 17a sents to pay into the industry fund should not have been included. That objection is without merit. In Perma Mufflers v. International Parts Corp., 392 U.S. 134 (1968), the Court held that the fact the plaintiff may have been in pari delicto does not prevent a suit under § 1 of the Sherman Act. The Court said the courts do not “have power to undermine the antitrust acts by denying recovery to injured parties merely because they have participated to the extent of utilizing illegal arrangements formulated and carried out by others.” p. 139. Thus, under Perma Mufflers there is no reason to deny non- NECA employers relief although they may have previously voluntarily assented to a NECA-IBEW agreement. Appellants next object to the second part of the injunction which they say could be construed to prohibit any demand that an IBEW local might unilaterally make in collective bargaining to be characterized as a uniform surcharge on labor contracts. They say that it prevents the union, even acting unilaterally, from doing the very thing that §7 of the National Labor Relations Board Act, 29 U.S.C. § 157, permits unions to do, that is, to bargain collectively on any permissive or mandatory subject of bargaining. That objection is well taken only to a very small extent. The question of whether or not the industry fund is either a permissive or mandatory subject of collective bargaining is not before us, but, for present purposes, we will assume that it is a permissive subject of collective bargaining. Merely, however, because establishment and maintenance of the industry fund may be a permissive subject of collective bargaining does not automatically exempt the IBEW from the provisions of the antitrust laws. This was specifically held in Allen Bradley v. Local Union No. 3, IBEW, 325 U.S. 797 (1945). In Allen Bradley the Court upheld a finding of the district court which had found Local 3 of IBEW guilty of a violation of the Sherman Act for acting in concert with business organizations and with manufacturers of goods to restrain competition in and monopolize the marketing of such goods in New York City. The Court found that “.. . the same labor union activities may or may not be in violation of the Sherman 18a Act, dependent upon whether the union acts alone or in combination with business groups.” 325 U.S. at 810. The gist of the Court’s reasoning, which is applicable here, is found on the same page of the opinion where it said: “For if business groups, by combining with labor unions, can fix prices and divide up markets, it was little more than a futile gesture for Congress to prohibit price fixing by business groups themselves.” The Su- preme Court in Allen Bradley did require a modification of the decree “so as to enjoin only those prohibited activities in which the union engaged in combination ‘with any person, firm or corporation which is a non labor group.’” p, 812, The second part of the order complained of does no more than this. It enjoins the “above mentioned defendants” (which include NECA and IBEW) from demanding, etc., from non-NECA members contributions to the National Electrical Industry Fund. The order must be read in the context of the case instead of divorced from it. As such, it undoubtedly means the defend- ants acting together and not the defendants acting severally, It leaves IBEW entirely free to pursue any legitimate object of collective bargaining acting unilaterally, but, this, of course, does not include IBEW acting “with any person, firm or corporation which is anon-labor group,” Allen Bradley, p. 812, to violate the Sherman Act, and this expressly includes the maintenance of the industry fund as expressed in the contract between NECA and IBEW. The standard by which we review such injunctive orders is “whether the relief represents a reasonable method of eliminating the consequences of the illegal conduct.” National Society of Professional Engineers v. United States, 435 U.S. 679, 698 (1978). We think the order of the district court meets that standard; it does no more than enjoin the enforcement of, and collection of money under, a contract held to violate the antitrust laws. Despite what we have just said with respect to the second part of the order complained of, out of perhaps an over abund- ance of caution, and in order to prevent any reading out of context of that part of the district court’s order, we direct that 19a the district court modify the second part of its order so that it applies to IBEW only when IBEW is engaged in the prohibited activities “in combination with any person, firm or corporation which is a non-labor group.” Allen Bradley at 812. We have discussed in some detail the principal contentions of appellants and note that we have considered all of their other assignments of error and find them without merit, including those relating to the granting of summary judgment in favor of appellees on the NECA defendants’ counterclaims. Except as may be otherwise indicated in this opinion, we rely upon the district court’s complete and thorough discussion of the issues in this case, and its judgment is accordingly AFFIRMED AS MODIFIED," HALL, Circuit Judge, dissenting: Through its blind application of the per se rule against price fixing, the majority ignores the realities of this case and, as a consequence, reaches a manifestly inequitable result. As I believe that the facts before us do not justify an extension of the per se price fixing rule, I must respectfully dissent. “We are aware that, on its particular facts, this is a case of first impression and as such we should be careful in applying the per se rule, Broadcast Music, Inc. vy. CBS, 441 U.S. 1, 9 (1979). Cases are legion, however, declaring the illegality of price fixing in various forms, and the agreement here, we think, is as clear as the one struck down in Citizens Publishing Co. v. U.S, 394 U.S. 181 (1969). The conclusion reached by the Court in that case that “(t]he joint operat- ing agreement exposed the restraints so clearly and unambiguously as to justify the rather rare use of a summary judgment in the antitrust field,” p. 136, is applicable here. The Supreme Court, indeed, in United States v. Container Corp., 393 U.S. 333 (1969), a price fixing case “unlike any other” decided by that Court, found a per se antitrust violation in reviewing a dismissed complaint, certain- ly without the benefit of any more documents than we have available here. 20a Under a provision in the collective bargaining agreement between the National Electrical Contractors Association (NECA) and the International Brotherhood of Electrical Workers (IBEW), the IBEW could not sign any employment contract unless the employer agreed to pay one percent of its gross monthly labor payroll into the National Electrical Indus- try Fund. Finding that this requirement acts to increase the labor costs to non-NECA contractors and “would tend to sta- bilize the price of electrical construction contracts,” the major- ity concludes that the agreement is per se illegal under the Sherman Act, 15 U.S.C. § 1, This case, however, is inherently different from those relied on by the majority in that all of the parties involved here receive an extremely important benefit from the NECA/ IBEW negotiations, that being the establishment of a fixed wage level. “Assenting” non-NECA contractors (i.e., those who agree to follow the terms of the NECA/IBEW agreement through either “A” or “B” Letters of Assent or International Agreements) receive the benefit directly by accepting all of the gains and concessions secured by NECA during the course of the negotiations. Non-assenting contractors who bargain directly with the Union enjoy the benefit in a similar, albeit indirect, manner. They have the terms of the NECA/IBEW agreement, espe- cially the wage level, on which they can rely during the course of their independent negotiations. The salary level agreed to by NECA may be employed as a ceiling on the Union's de- mands. Indeed, the Union has an incentive to obtain a high wage rate from NECA which it will then attempt to carry over into its non-NECA contracts. See generally P. Samuelson, ECONOMICS 586-87 (10th ed. 1976). Thus, any wage con- cessions NECA is able to draw out of IBEW spill over to the benefits of all non-assenting non-NECA contractors. Since all electrical contractors benefit from NECA’s collec- tive bargaining, it is only fair that they share in the costs of such bargaining. In this regard, it is clear that one of the main 2la purposes of the industry fund is to help defray the costs of the negotiation process. Under the majority’s ruling, however, although both assenting and non-assenting non-NECA con- tractors would continue to enjoy the benefits of NECA’s bargaining, neither can be required to contribute to the fund. Moreover, they will receive a windfall in the form of treble damages. In Smitty Baker Coal Co. v. United Mine Workers of Amer- ica, 620 F.2d 416 (4th Cir.), cert. denied, 449 U.S. 870 (1980), we ruled that a protective wage clause, requiring a union to demand the wage scale from all employers who were not mem- bers of the multi-employer bargaining unit, did not constitute a per se violation of the Sherman Act. Rather, [t]o amount to an antitrust violation the agreement must be rooted in an anti-competitive purpose, and must effect an anti-competitive result, as evidenced by action “ruin- ing” a competitor’s business or driving him “out of busi- ness.” Unless there is such an agreement between the labor organization and the non-labor group and such an anti-competitive result, there is no conspiracy actionable under the antitrust laws. Id. at 431-32 (emphasis supplied). Since the one percent industry fund charge at issue here has no greater effect on electrical contractor prices than would a protective wage clause, I would follow the Smitty Baker stand- ard and avoid the majority’s untenable extension of the per se rule. As a final matter, I also disagree with the majority’s con- clusion that the trial judge did not err in finding defendants Colgan Electric Co. (Colgan) and Miller Electric Co. (Miller) within the venue of the court. The record indicates that their most significant contact with the judicial district of Maryland was the payment of dues to NECA which has its national office located in that state. The holding that mere membership and payment of trade association dues is enough to constitute “transact(ing] business” under § 12 of the Clayton Act, 15 22a U.S.C. § 22, flies in the face of the well established rule that a defendant’s contacts with the forum state must be of a “sub- stantial character” in order for venue to be proper. See Bartholomew v. Virginia Chiropractors Association, 612 F.2d 812, 815 (4th Cir. 1979), cert. denied, 446 U.S. 938 (1980). Consequently, the district court clearly erred in failing to dismiss the complaint against defendants Colgan and Miller. For the foregoing reasons, I respectfully dissent. 23a IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND Civil No. HM77-1302 NATIONAL CONSTRUCTORS ASSOCIATION and COMMONWEALTH ELECTRIC CoMPANY, by and on behalf of itself and all others similarly situated and THE HowarpD P. FoLtey Company, by and on behalf of itself and all others similarly situated and DONOVAN CONSTRUCTION COMPANY OF MINNESOTA, INC., ARTHUR MCKEE & Company, INc., BADGER AMERICA, INC., CaTALYTIC, INc., C. F. BRAUN Constructors, INc., DRAvVo CORPORATION, Guy F. ATKINSON CoMPANY, THE H. K. FERGUSON COMPANY, JACOBS CONSTRUCTORS, INC.. PULLMAN KELLOGG, DIVISION OF PULLMAN, INCc., STEARNS-Rocer, INc., Vv. NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION, INC., RosBert L. HicGiIns, THE INTERNATIONAL BROTHERHOOD OF ELECTRICAL WorKERS, AFL-CIO, CHARLES H. PILLARD, COLGAN ELEctTRIC, INc., MILLER ELEcTrRIc Co., and H. E. AuUTREY, ALLEN L. BADER, FRANK H. BERTKE, DonaLpD C. CATES, RoBeRT W. CoLGAN, Joe R. DEVISH, and CARL T. HINOTE, in their individual capacities and as Trustees of the National Electrical Industry Fund, and ALLAN H. Stroupe, L. R. McCorp, ALpo P. LerRo and LoweLL C. TMM, in their official capacities as Trustees of the National Electrical Industry Fund, and JoHN Ostrow, C. W. StRoUPE, WARREN Los and J. D. HILBURN, SRr., in their individual capacities. Filed: September 9, 1980 Wilbur D. Preston, Jr., Robert M. Wright, Nevett Steele, Jr., and Ward B. Coe, III, of Whiteford, Taylor, Preston, Trimble & Johnston, Baltimore, Maryland; Anthony J. Obadal, Steven R. Semler, Howard J. Kaufman, Alan D. Cirker; Stephen C. Yohay, of Zimmerman and Obadal, Washington, D.C.; Ira 24a Genberg, Peter R. Spanos, of ©tokes & Shapiro, Atlanta, Georgia, Attorneys for Plaintiffs. Guy Farmer, of Farmer, Shilbey, McGuinn & Flood, Washing- ton, D.C.; Alan I. Baron, Peter H. Gunst, of Frank, Bernstein, Conaway & Goldman, Baltimore, Maryland; Attorneys for Defendant National Electrical Contractors Association, Inc. and all other defendants EXCEPT Defendants International Brotherhood of Electrical Workers, AFL-CIO and Charles H. Pillard. Thomas X. Dunn, Richard M. Resnick, of Sherman, Dunn, Cohen and Liefer, Washington, D.C.; James P. Garland, Anthony W. Kraus, Steven D. Frenkil, Nora Winay, of Sem- mes, Bowen & Semmes, Baltimore, Maryland, Attorneys for Defendants International Brotherhood of Electrical Workers and Charles H. Pillard, International President of IBEW. Herbert F. Murray, United States District Judge 25a IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND Civil No. HM77-1302 NATIONAL CONSTRUCTORS ASSOCIATION, ETC. et al. Vv. NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION, INC., et al. MEMORANDUM OPINION I. Factual Background This is a private antitrust action for treble damages and declaratory and injunctive relief, brought under § 1 of the Sherman Antitrust Act, 15 U.S.C. §1. Currently pending before the court are eight motions, on which the court has heard extensive oral argument. An explanation of the factual background of the dispute is essential to an understanding of the pending motions. Plaintiff National Constructors Association (NCA) is an un- incorporated trade association whose members are “corpora- tions who perform electrical construction work and who other- wise transact business in the electrical construction industry.” Amended Complaint at 4. Of the remaining plaintiffs, Com- monwealth, Foley, Donovan, Catalytic, Braun, Atkinson, Fer- guson and Pullman-Kellog are corporations which perform electrical construction work and employ electrical construction workers who are members of the defendant IBEW and its local unions. McKee, Badger, Dravo, Jacobs and Stearns-Roger are also corporations which perform electrical construction work, but rather than employ IBEW workers directly, they hire electrical construction contractors who in turn employ IBEW labor. None of those corporate plaintiffs except Donovan is a member of defendant National Electrical Contractors Associa- tion, Inc. (NECA). 26a Defendant NECA is an incorporated trade association whose members, like those of NCA, perform electrical con- struction work. Although NECA’s principal place of business is in Bethesda, Maryland, the association has approximately 133' local chapters nationwide. NECA and its local chapters provide various services to member companies, including representing members in collective bargaining with the IBEW and its local unions. Amended Complaint © 4(a)(iii). Defendant IBEW is an unincorporated labor organization whose local unions throughout the United States represent at least some of the electrical workers whom the corporate plain- tiffs employ. Defendant Charles H. Pillard is now and at all pertinent times was International President of the IBEW; defendant Robert L. Higgins is and at all pertinent times was Executive Vice President of NECA. Defendants Colgan Electric Co. and Miller Electric Co. are corporations engaged in the electrical contracting business and are members of defendant NECA. The remaining defendants are the trustees of the National Electrical Industry Fund (NEIF), which is more fully described below. At the heart of the plaintiffs’ suit is the collective bargaining structure in the electrical construction industry. Local chap- ters of NECA, which is the largest trade association in the industry, are assigned regional territories throughout the country which coincide with the jurisdictions of one or more IBEW local unions. Acting as a multi-employer bargaining unit representing its chapter members, each NECA chapter periodically negotiates a collective bargaining agreement with the IBEW union or unions in its territory. Each “Local Agree- ment” provides for wages, hours, terms and conditions of employment, and any other subjects of bargaining permitted ! Some of the pleadings set the figure at 330. Suffice it to say that the local chapters are numerous. 27a by the National Labor relations Act. A Local Agreement is either “inside,” covering labor on the interior or buildings, or “outside,” covering labor on outdoor power lines. Although the IBEW locals also negotiate with other local contractors’ associ- ations, the majority of the Local Agreements are the result of collective bargaining between the unions and NECA chapters. Individual electrical contractors who are not members of NECA usually enter into a labor agreement with the IBEW in one of three ways. The most prevalent practice is for the contractor to sign a short-form agreement known as a Letter of Assent, which binds the signatory to the terms of the existing NECA-IBEW Local Agreement for the area in which the contractor works. There are two types of Letters of Assent: Type “A” authorizes the local NECA chapter to act as the signatory’s collective bargaining agent for all matters con- tained in the existing NECA-IBEW Local Agreement, and remains in effect until the contractor gives timely notice of termination. Type “B” does not authorize NECA to act as the contractor's collective bargaining agent, but merely binds the signatory for a stated period (usually the life of the current Local Agreement) to all the terms of the existing Local Agree- ment and any amendments that might be made to it. The second method by which an unassociated contractor enters into a labor agreement with the IBEW is by signing an “International Agreement.” Large general contractors which perform construction work at several sites across the country usually adopt this second method. The International Agree- ment is in effect a nationwide Letter of Assent, which binds the signatory to the terms and conditions of the NECA-IBEW Local Agreements for any and all geographic areas in which the general contractor seeks to procure IBEW labor. Made available by the IBEW’s international office, an International Agreement is terminable at will upon sixty days’ notice. The third means of negotiating with the IBEW is by signing a “Project Agreement.” As the name implies, such an agree- ment is usually designed to cover a single construction project 28a which the contractor has in the area, and may contain any terms on which the parties agree. Although a Project Agree- ment is negotiated independently of the NECA agreements, the IBEW usually seeks to procure the terms of the Local Agreements in an unassociated contractor’s Project Agree- ment. Both NECA and the IBEW International reserve the power to approve ali collective bargaining agreements entered into by local chapters or local unions. Either national body may veto an agreement if its terms do not conform to the association's or the union’s policies. As of December 1976, the vast majority of contractors in the electrical construction industry procured IBEW labor under the terms and conditions of NECA-IBEW Local Agreements, either as members of local NECA chapters, or as signatories to Letters of Assent or International Agreements. In the summer and fall of 1975, national officials of NECA and the IBEW began negotiation of the agreement which the plaintiffs contend violates § 1 of the Sherman Act. The parties undertook the negotiations at least in part to provide for in- creased employer contributions to the National Electrical Benefit Fund (NEBF), which is a pension fund for IBEW workers, jointly administered by NECA and the IBEW and funded by payments provided for in electrical construction industry collective bargaining agreements. At the meetings that began in 1975, International President Charles H. Pillard and his Administrative Assistant Marcus Loftis represented the IBEW; Executive Vice President Robert L. Higgins and Director of Labor Relations Mark Hughes represented NECA. In the spring of 1976, the parties tentatively agreed to what will hereinafter be referred to as the National Agreement, a copy of which is appended hereto as Exhibit A. The first five . articles of the agreement contained provisions for the NEBF, shift work, management rights and apprentice ratios. Article Six, which is the crux of this litigation, provided as follows: 29a ARTICLE SIX—INDUSTRY FUND The parties agree to the establishment of a a con- —— trust to be called the National Electrical Industry und. All construction agreements in the electrical industry shall contain the following language: “Each individual employer shall contribute one percent (1%)* of the gross labor payroll to be forwarded monthly to the National Electrical Industry Fund in a form and manner prescribed by the trustees no later than fifteen (15) calendar days following the last day of the month in which the labor was performed. Failure to do so will be considered a breach of this agreement on the part of the individual employer.” *(an amount not to exceed 1% nor less than 0.2 of 1%, as determined by each local chapter and approved by the trustees) The National Electrical Contractors Association will be hg saps to see that the objects of the fund, as outlined in the trust, are adhered to strictly. No of the funds collected under this trust shall be used for purely social activities. No part of the funds collected under this trust shall be used for any purpose which is held to be in conflict with the interests of the International Brotherhood of Electrical Workers and its local unions. Both parties will be provided with a copy of the Trust and any future amendments. The industry fund thus created was to be used primarily to cover NECA’s “costs of administration of labor agreements, industry advancement and services rendered to the electrical contracting industry.” See Exhibit 10 to plaintiffs’ motion for summary judgment. As required by the association’s bylaws, the NECA Board of Governors ratified the National Agreement at a meeting in Dallas in October 1976. The IBEW rules did not require a similar ratification vote. On December 8, 1976, both Charles Pillard and Robert Higgins signed the agreement, which was to becorne effective on July 1, 1977. 30a Between December 1976 and July 1977, NECA and the IBEW took steps to implement the National Agreement, in- cluding the new NEIF. Local IBEW unions and NECA chap- ters were instructed to insert the industry fund provision in existing NECA-IBEW Local Agreements. Although the de- fendants contend that the language of Article 6 was to be inserted only in contracts between the IBEW and NECA members, the plaintiffs argue that the defendants sought to have the language included in all construction agreements in the electrical industry. The plaintiffs allege that prior to July 1, 1977, NECA mem- bers paid dues to their association in order to pay for the services NECA offered such as advertising, negotiating, train- ing employees and disseminating information. Because those dues added to NECA members’ cost of doing business, non- NECA members allegedly had a competitive edge in bidding on electrical construction projects. The plaintiffs claim that by providing for a uniform 1% contribution to a fund that would support NECA services, and by ensuring that the 1% require- ment was in al/ construction contracts in the industry, regard- less of a contractor’s affiliation with NECA, the defendants agreed to fix, maintain and stabilize the price of contracts with the IBEW—and consequently all prices in the electrical con- struction industry—for the purpose of eliminating non-NECA members’ competitive advantage. The plaintiffs contend that under the line of cases beginning with United States v. Socony- Vacuum Oil Co., 310 U.S. 150 (1940), the National Agreement constitutes a price fixing agreement which is on its face a per se violation of § 1 of the Sherman Act. They seek a declaratory judgment that the NEIF is illegal, an injunction preventing the defendants from enforcing the NEIF provisions, and monetary relief of three times the amount each plaintiff has already paid into the fund. NECA and the trustees of the NEIF have filed counter- claims alleging that the plaintiffs have engaged and are engag- ing in an illegal conspiracy and boycott in violation of § 1 of the Sherman Act. The activity alleged to be illegal is the plaintiffs’ 3la concerted undertaking to refuse to pay into the NEIF, with the alleged purpose of injuring NECA and compelling it to acquiesce in the plaintiffs’ plans for “a single multitrade bargaining agreement [in] all unionized sectors of the in- dustrial construction industry.” Memorandum in Support of Motion of NECA and the Trustees of the NEIF for Summary Judgment, at 1.’ Of the eight motions now before the court, three are motions to dismiss. The first is the defendants’ motion to dismiss NCA as a plaintiff on the grounds it lacks standing. The second is the defendants’ motion to dismiss those plaintiffs who do not hire IBEW labor directly, but instead employ electrical contractors who in turn hire IBEW workers. Those parties will be referred to hereinafter as the “indirect-hire plaintiffs.” The third mo- tion is that of defendants Miller and Colgan to dismiss the complaint as to them, on the grounds that they as corporations were not involved in any alleged conspiracy. The fourth and fifth motions to be decided are cross-motions for summary judgment on the plaintiffs’ claim that the Nation- al Agreement is on its face a price-fixing agreement illegal per se. The sixth motion is the plaintiffs’ motion for class certifica- tion, and the remaining two are cross-motions for summary judgment on the boycott counterclaims. The court will discuss the motions in the order in which they have been described. II. The Motion To Dismiss Plaintiff NCA The primary issue is whether NCA has standing to sue for injunctive relief under § 16 of the Clayton Act, 15 U.S.C. § 26. The defendants argue that a private plaintiff does not have *The NEIF trustees have filed a number of related actions throughout the country, seeking to recover on a breach of contract theory the amounts which several electrical contractors have refused to pay into the NEIF. For purposes of this opinion, the related actions will be referred to as the “collection cases.” 32a standing at all under the antitrust laws, unless it can show some injury or threatened injury personal to itself; and that NCA has made no such showing. NCA claims that strict stand- ard applies only under § 4 of the Clayton Act (15 U.S.C. § 15), where a plaintiff seeks monetary damages; and that § 16 embo- dies more flexible general rules of standing, including the tests set out in Warth v. Seldin, 422 U.S. 490 (1975), and Hunt v. Washington Apple Advertising Commission, 432 U.S, 333 (1977), for determining when an association may sue in a purely representational capacity on behalf of its members. If NCA could meet the stricter standard of showing direct injury to itself, there would be no need to explore the relative leniency of § 16 requirements. However, the court is not per- suaded that the association is threatened with any personal harm. NCA alleges that the NEIF scheme compels NCA mem- bers to support a rival trade association, NECA, and “neces- sarily places a financial stricture on the operation of their own association, therefore tending to have a stifling effect upon the achieving of their association's purposes either now or in the future.” Plaintiffs’ Memorandum in Opposition to Defendants’ Motion to Dismiss NCA, at 2. NCA further contends that the NEIF scheme frustrates NCA’s associational goal of reducing operating costs. In the court’s view, the awkwardness and abstractness of the plaintiffs’ description of the supposed inju- ry reveals that NCA’s contentions are without merit. Con- sequently, the court must determine whether the standing requirements of § 16 are nonetheless broad enough to emcom- pass NCA. There is long-standing authority in support of the defend- ants’ proposition that personal injury is a prerequisite to in- stituting any private antitrust action. In United States v. Borden, 347 U.S. 514, 518 (1954), the Supreme Court said, Under § 16 of the Act, . . . a private plaintiff may obtain injunctive relief against [anti-trust] violations only on a showing of “threatened loss or damage”; and this must be of a sort personal to the plaintiff... . (The private plain- tiff, though his remedy is made available pursuant to 33a public policy as determined by Congress, may be expected to — it only when his personal interest will be served, However, since Borden was decided, two important trends have developed: first, the courts have increasingly acknowl- edged that standing requirements under § 16 are broader and more flexible than those under § 4; and second, the courts have recognized that under certain circumstances, an association may have standing solely as the representative of its members. Section 4 of the Clayton Act provides as follows: Any person who shall be injured in his business or property by reason of anything forbidden in the anti- trust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney’s fee. Section 16, however, states in pertinent part: Any person, firm, corporation, or association shall be entitled to sue for and have injunctive relief, in any court of the United States having jurisdiction over the parties, against threatened loss or damage by a viola- tion of the antitrust laws, including sections 13, 14, 18, and 19 of this title, when and under the same conditions and principles as injunctive relief against threatened conduct that will cause loss or damage is granted b courts of equity, under the rules governing suc atv ge and upon the execution of proper bond against damages for an yoy aps ftir “aegeny and a showing that the danger of irreparable oss or damage is immediate, a preliminary injunction _may issue. In Hawaii v. Standard Oil Co. of Calif., 405 U.S. 251 (1972), the Supreme Court analyzed the “business or property” requirement in § 16. The Court speculated that the language difference was probably attributable to the different impacts of the remedies offered by the two sections: while 100 simul- taneous injunctions could be no more effective than one, 100 34a treble-damage awards could be far more devastating to a de- fendant than a single monetary judgment. 405 U.S. at 261-62. Without commenting further on the § 16 standards, the Court concluded that a party could not sue under § 4 without showing injury to its commercial interests. /d. at 264. Most lower federal court cases interpreting Hawaii v. Standard Oil have concluded that the standing requirements under § 16 are more lenient and more flexible than those under § 4. In Re Multidistrict Vehicle Air Pollution MDL #31, 481 F.2d 122 (9th Cir.), cert. denied, 414 U.S. 1045 (1973); Tug- boat, Inc. v. Mobil Towing Co., 534 F.2d 1172 (5th Cir. 1976); Mid-West Paper Products Co. v. Continental Group, Inc., 596 F.2d 573 (3d Cir. 1979). Contra, NAACP v. New York Clear- ing House Assn., 431 F. Supp. 405(S.D.N.Y. 1977), relying on Nassau County Ass'n of Inc. Agents, Inc. v. Aetna Life & Cas. Co., 497 F.2d 1151 (2d Cir.), cert. denied, 419 U.S. 968 (1974). The cases recognizing a distinction between § 4 and § 16 re- quirements imply that a party may sue for injunctive relief under the antitrust laws whenever the party can show the threat of an injury cognizable in equity and proximately caused by the defendant's antitrust violation. .fid-West v. Con- tinental, supra; Tugboat v. Mobil Towing, supra. See also Buckley Towers Condominium, Inc. v. Buchwald, 595 F.2d 253 (5th Cir. 1979). At about the same time that the courts began to hold the requirements of § 16 were more lenient, the Supreme Court was developing the doctrine that in certain well-defined cir- cumstances, an association may have standing to represent its mernbers even when the association as such had suffered no injury. In Warth v. Seldin, supra, 422 U.S. 490 (1975), the court considered whether various individuals and associations had standing to challenge an allegedly exclusionary zoning ordinance. Writing for the Court, Justice Powell first set out the general standing requirements in any litigation: each plain- tiff must show first that there is a justiciable case or con- troversy, and second that the plaintiff has “such a personal stake in the outcome of the controversy as to warrant his 35a invocation of federal court jurisdiction and to justify exercise of the court’s remedial powers on his behalf.” 422 U.S. at 498-99, citing Baker v. Carr, 369 U.S. 186 (1962). In elaborating on those prerequisites with respect to associations the Court said, Even in the absence of injury to itsel [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385010_0247%3A1. Public record. Not legal advice.