Amicus Brief — Hoover v. Ronwin

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" RS) No. 82-1474

In the Supreme Court

OF THE

United States

Octosper Term, 1983

Cuaries R. Hoover, Howarp H. Karmay, Ropert D. Myers

and Haroutp J. WoLFincer,

Petitioners,

vs.

Epwarp Ronwin,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals for

the Ninth Circuit

MOTION FOR LEAVE TO FILE BRIEF OF

AMICUS CURIAE

AND

BRIEF OF AMICUS CURIAE

IN SUPPORT OF PETITIONERS

Kurt W. MEeELcHIor

One Embarcadero Center,

25th Floor

Of Counsel: San Francisco, CA 94111

ALLAN ASHMAN (415) 398-3344

333 North Michigan Avenue, Attorney for Amicus Curiae

Suite 1025 National Conference of

Chicago, IL 60601 Bar Examiners

oun E. Hort-Hanais, Jr.

Grarr, Foy, Conway,

Hoxt-Harris & MEALEY

90 State Street

Albany, NY 12207

AN T. CHILTON

EVERSON, WERSON, BERKE

& R

A Professional C ration

One Embarcadero ter,

25th Floor

San Francisco, CA 94111

BOWNE OF SAN FRANCISCO, INC. © 190 NINTH GT. © S.F., CA 94108 © (418) 664-8900

No. 82-1474

In the Supreme Court

OF THE

United States

Octoper Term, 1983

Cuaries R. Hoover, Howarp H. Karman, Ropert D. Myers

and Harotp J. WoLrFincer,

Petitioners,

vs.

Epwarp Roywiy,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals for

the Ninth Circuit

MOTION FOR LEAVE TO FILE BRIEF OF

AMICUS CURIAE

The National Conference of Bar Examiners (“NCBE”)

moves for leave to file the attached Brief of Amicus Curiae

in support of petitioners. Petitioners have consented to the

filing of this amicus brief; respondent Ronwin has with-

drawn his consent previously given.

The NCBE is a national service organization for bar

examiners like the petitioners in this case. The NCBE has

an organizational interest in this case because the holding

below will have serious impact on the bar examining process

and will create potential liability for the NCBE as the

organization which prepares and scores the Multistate Bar

Examination and the Multistate Professional Responsi-

bility Examination.

With the court of appeals’ permission, the NCBE filed

amicus curiae briefs in support of each petitioners’ two

petitions for rehearing in that court, and with this Court's

permission, the NCBE filed an amicus curiae brief in

support of the petition for writ of certiorari.

In the attached amicus curiae brief, the NCBE demon-

strates why this Court's recent decision in District of

Columbia Court of Appeals v. Feldman, ...... if Se

S.Ct. 1303 (1983) prevents federal district courts from

assuming jurisdiction over antitrust suits which, like Ron-

win’s, seek to attack collaterally the final judicial deter-

mination of a state's highest court in denying an applicant

admission to practice law. Application of the Feldman

holding to cases such as Ronwin'’s avoids a severe and

unnecessary intrusion on the states’ compelling interest in

regulating the legal profession.

The attached amicus curiae brief also demonstrates that

petitioners’ acts were exempt from antitrust scrutiny under

Parker v. Brown, 317 U.S. 341 (1943). The Arizona Com-

mittee on Examinations and Admissions acted as the state

itself in its sovereign capacity and therefore was absolutely

immune without meeting the twofold test restated in Cali-

fornia Retail Liquor Dealers Ass'n v. Midcal Aluminum,

Inc., 455 U.S. 97, 105 (1980).

The amicus brief also discusses the proper application

of the Midcai test to public entities, showing that such

entities need not demonstrate that their actions were “com-

pelled” by the state or were subject to “active state super-

vision.” All a public entity must show to claim state action

immunity is that its acts were the kind contemplated by its

authorizing legislation. The committee’s challenged acts

met that test.

Finally, the attached amicus curiae brief shows that

because the committee was purely an advisory body whose

sole function was to examine applicants and recommend

iil

that the Arizona Supreme Court grant admission to those

applicants the committee found qualified, the committee's

actions were also immune from antitrust scrutiny under the

Noerr-Pennington doctrine.

Counsel for amicus contacted respondent before com-

mencing work on this brief, and respondent at that time

graciously consented to its filing. Recently, when work on

the brief had been substantially completed, counsel for

amicus wrote respondent, requesting the written consent

letter required by this Court’s Rule 36.2. Respondent then

changed his mind, necessitating this application.

For all of these reasons, the NCBE respectfully requests

that its motion for leave to file the attached brief of amicus

» curiae be granted.

DATED: August 15, 1983.

Respectfully submitted,

Kurt W. Metcnior

One Embarcadero Center,

25th Floor

San Francisco, CA 94111

(415) 398-3344

Attorney for Amicus Curiae

National Conference of

Bar Examiners

Of Counsel:

ALLAN ASHMAN

333 North Michigan Avenue,

Suite 1025

Chicago, IL 60601

— E. Hort-Hargis, Jr.

, For, Conway,

San Francisco, CA 94111

TABLE OF CONTENTS

ey OE DT IIINE, ccs ccscsttiistenecbceresrinicemsmecvensavensocsoone

rn ir i ere. * | apsdiiavisssabiauieennls

DIOR csvcstcienccsicisnsiencescsscncnsingatinionensivocnernnenmmnemtetuntes

1. A Federal Antitrust Action Cannot Be Used To

Challenge A Failing Grade On A Bar Examina-

I nscanchit sicieslibai can dileacaliadslpnscbadaecicaainctboseadbnationnnasgsson

a. The States Have A Compelling Interest In

Regulating Admission To Their Bars ..........

b. The Bar Examination Is An Essential Tool

In Regulating Admission To Practice ........

ce, Federal Antitrust Review Of Bar Examina-

tions Would Disrupt The Bar Examination

Process And Unwisely Shift Control Over

Bar Admissions To The Federal Courts ....

d. District of Columbia Court of Appeals v.

Feldman Bars Individual Antitrust Chal-

lenges To Failing Bar Examination Grades

2. Grading Bar Examinations Is State Action

Exempt From Antitrust Scrutiny 0.000.000.0000...

a. The Committee On Examinations And Ad-

missions Acted As The State In Its Sover-

eign Capacity And Therefore Is Exempt ....

b. If The Midcal Test Applies, The Commit-

toe's Bate Mott Ts ccciciadnc ween

(1) The Committee Acted Pursuant To An

Affirmatively Expressed State Policy ....

(2) Though State Agencies Need Not

Be “Actively Supervised,” Petitioners

WP GGU sscstiecssossdsscdatiidicelinapegtuetmmeaiaonn

3. The Noerr-Pennington Doctrine Shields Peti-

OIE. BGOD agrees cnsinsincsilitisinipeiainmieeaae

I ie heh ccrvesernseeveninttiinsighasacinicig te epee

TABLE OF AUTHORITIES

Cases

Page

Bates yv. State Bar of Arizona, 433 U.S. 350 (1977)

ssguiekgnsleasoinciinssaaseiigadeubiigsanhinioasaannecenelbeeantaina maa 5, 11, 13, 15, 27

Benson v. Arizona State Bd. of Dental Examiners,

ot BA Beet: oo | eee 11, 22, 27

Bill Johnson's Restaurants, Inc. v. NLRB, ...... U.S.

pee 908 B0k. SEG CIGGI) ccc nnininieenn eee

California v. Federal Power Comm'n, 369 U.S. 482

CR a eaicencs ssiahitapasidieatecnadtaaseneetetietaaaeaiae 13

California Motor Transport Co. v. Trucking Unlimited,

est SM), | NNER ok acne aaa: * 28

California Retail Liquor Dealers <Ass’n vy. Mideal

Aluminum, Inc., 445 U.S. 97 (1980) 200....cccceeeeeceeeeeeees

hi Toecesadonatenedesscyommaiimeaciccdinaiinaih 2, 15, 16, 19, 20, 21, 26, 27

City of Lafayette v. Louisiana Power & Light Co., 435

A BOB CADE) csc cde ee 15, 16, 21, 22

Community Communications Co. v. City of Boulder,

oe US, 1 102 S.Ct. 835 (1982) ...... 13, 15, 16, 21, 22, 26

Application of Courtney, 83 Ariz. 231, 319 P.2d 991

CRTRII OF cvctispscsicocunctsctnicenicenncapessnieeshciniiintidendiassiaanaacennll 29

Deak-Perera Hawaii, Inc. v. Department of Transpor-

tation, 553 F.Supp. 976 (D.Hawaii 1983) ......0..0.......... 27

Denver & R.G. R.R. Co. v. United States, 387 U.S. 485

COIIIIE D .ceicssinnincsneseoqsctrsssosatipsionaporanipsceiaiapastakadinaaana Aim 13

District of Columbia Court of Appeals v. Feldman,

pens US. ....... 103 S.Ct. 1303 (1983) .............. 2, 5, 12, 18, 14

Eastern R.R. Presidents Conf. vy. Noerr Motor Freight,

Teg. BOG SI, BST (TDG) sncccssecscinasbsnctiqsatiscestiiiinbetalgiecians 28

Euster v. Eagle Downs Racing Ass'n, 677 F.2d 992 (3d

Cir.), cert. denied, ...... US. ......, 103 S.Ct. 388 (1982)

sdliinsucllstalaiahapbn seis isneinpinakeichiageesiinglthda namin eee 11, 22, 27

Federal Energy Regulatory Comm'n vy. Mississippi,

ae U.S. ....... 103 B08. 2126 (3068) ne BS

TABLE OF AUTHORITIES

Cases

Page

Feldman vy. Gardner, 661 F.2d 1295 (D.C.Cir. 1981),

cert. denied, ...... USS. ......, 202 S.Ct. 3483 (1982),

rev'd on other grounds sub nom., District of Colum-

hia Court of Appeals v. Feldman, ...... US. ......, 103

I i caccovessecmsneseevestereecsoeseneosonses 13, 14, 15

Feldman vy. State Board of Law Examiners, 438 F.2d

TI PUD occ cceceecscosecvnacsasenencnseecssesoecvecsssees ecseoce 18

Foley v. Alabama State Bar, 648 F.2d 355 (oth Cir.

es a 15

Galahad vy. Weinshienk, 555 F ‘tien 1201 (D.Colo.

hl sooscsssccosereanctrvcdsiiievavadocesosonecsesonoces 23

Gambrel v. Kentucky Bd. of Dentistry, 689 F.2d 612

(6th Cir. 1982), cert. denied, ...... RIGE wos DO Ok:

a 10, 11, 26

Gold Cross Ambulance v. City of Kansas City, 705

F.2d 1005 (8th Cir. 1983) 0000s dinderinting 21, 26, 27

Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975)

NB hictscallichnntch Seacnntecutcicdcnescesetshsnheoiemsins 5, 11, 16, 19, 24

Helix Milling Co. v. Terminal Flour Mill Co., 523 F.2d

1317 (9th Cir. 1975), cert. denied, 423 U.S. 1053

ae 9

Horsemen's Benevolent & Protective Ass’n v. Penn-

sylvania Horse Racing Comm'n, 530 F.Supp. 1098

(E.D. Pa. 1982), aff'd per curiam, 668 F.2d 821 (3d

A 22

Hybud Equip. Corp. v. City of Akron, ...... F.Supp. ......,

1983-1 Trade Cas. (CCH) { 65,356 (N.D.Ohio 1983) 27

Application of Klahr, 102 Ariz. 529, 433 P.2d 977

ERS A SS RR SO ll 27, 29

Konigsberg v. State Bar of California, 353 U.S. 252

Se a Sn 5, 6

Leis v. Flynt, 439 U.S. 438 (1979) oo. ccccccccseecssseeoes-... 6

Application of Levine, 97 Ariz. 88, 397 P.2d 205 (1964) 8

vii

TaB_e OF AUTHORITIES

CASES

Page

Lichter v. United States, 334 U.S. 742 (1948) ................ 22

Llewellyn v. Crothers, ...... F.Supp. ......, 1983-1 Trade

Cas. (CCH) $ 65,358 (D.Ore. 1983) ...........sssereeeerees 25, 27

Lynch Display Corp. v. National Souvenir Center, Inc.,

640 S.W.2d 837 (Tenn.Ct.App. 1982) ...........ceeceeceeees 13

Middlesex County Ethics Committee v. Garden State

Bar Ass'n, ...... Sis onken 102 S.Ct. 2515 (1982) ........ 5

New Motor Vehicle Bd. v. Orrin W. Fox Co., 439 U.S.

Eb... 1 RRS SERRE CR I tee 11, 15, 16, 17, 18, 20, 29

Panama Retining Co. v. Ryan, 293 U.S, 388 (1934) ........ 22

Parker v. Brown, 317 U.S. 341 (1943) 200..........epccsceeeseee

Al aA yer Aree Ae Be Feet LO 2, 15, 16, 17, 20, 24, 25

Poller v. Columbia Broadcasting Sys., 368 U.S. 464

I ee ee a ee 9

Richardson v. McFadden, 563 F.2d 1130 (4th Cir.

1977), cert. denied, 435 U.S. 968 (1978) ...........cccceeese 18

Application of Ronwin, 113 Ariz. 357, 555 P.2d 315

(1976), cert. denied, 430 U.S, 907 (1977), 439 U.S.

RN i a y

In re Ronwin, ...... PO aps IESE P.2d ......, Nos. SB52-8,

ne ce 6, 2008) a ee y

Ronwin v. Committee on Examinations and Admis-

sions, 419 U.S. 967 (1974) .............c.rececscssererossesseseees 9, 12, 26

Ronwin v. Fair Employment Practices Comm'n, 409

| | eee tener eee EY 9

Ronwin v. Segal, 634 F.2d 636 (9th Cir. 1980), cert.

Gonied, G60 TH ROG (IBGE) osicnccccivcscectaciccecisienstsscivsld 9

Ronwin v. Shapiro, 657 F.2d 1071 (9th Cir. 1981)

Schwegmann Bros. v. Calvert Corp., 341 U.S. 384

CIID. cecssticsisnennsstssctnctioneiccnecnisiateimnersdenobeiaenialcoiiaimsiamial 19

State of New Mexico v. American Petrofina, Inc., 501

We Bae TOR Cle, BOVE) ascites 15

viii

TABLE OF AUTHORITIES

Cases

In re Summers, 325 U.S. 561 (1945) ccocscsecsssssssssssssssssne "i

Town of Hallie v. City of Eau Claire, 700 F.2d 376 (7th

Cir. 1983), petition for cert. filed, 51 U.S.L.W. 3842

(U.S. May 11, 1983) (No. 82-1832) ...................... 21, 22, 27

United Mine Workers v. Pennington, 381 U.S. 657

SOME Wisnpsiesdanteoncihcatthcatecse eae te Oe 28

United States v. Southern Motor Carriers Rate Con-

ference, 672 F.2d 469 (Sth Cir, 1982) ooo. 21

Statutes and Rules

LS RE 7 | SMI RL AES ae RE see Ie, Ra OE OE 13

Arizona Supreme Court Rules:

8 TE NET EE ERT 8, 18, 19, 22, 27, 28, 29

LEN ak en eee 8, 19, 23, 24, 26, 27

California Vehicle Code Section 3001 ....................... 16

Books, Periodicals and Reports

Areeda, Antitrust Immunity for “State Action” After

Lafayette, 95 Harv.L.Rev. 435 (1981) 0.0 cece.

RR AN Ie ae Means DAY 10, 16, 17, 22, 24, 25

P. Areeda & D, Turner, Antitrust Law (1978) oo... 13

The Bar Examiners’ Handbook (S. Duhl, 2d ed. 1980)

nig eapaiasieliaenenseomdiedadibariceinatpanlesian tinal al 4, 7, 8, 23, 24

Booz, Allen & Hamilton, Inc., A Diagnostic Study of

the Operations of the Offices of the Committee of

Bar Examiners The State Bar of California (March

TE Sets R sonia ieninhe want Ueda) 19

Burger, Some Further Reflections on the Problem of

Adequacy of Trial Counsel, 49 Fordham L.Rev. 1

RS Ea AEA ME Sci: BEE CEA Pate 11

Burger, The Special Skills of Advocacy: Are Spe-

ctalized Training and Certification of Advocates Es-

sential To Our System of Justice?, 42 Fordham L.

vo | Re RN LS ai aS SD: ll

Books, Periopicats & Revortep (CoNnTINvED)

Page

Covington, Administering the Multistate Professtonal

Responsibility Examination, 50 Bar Examiner 26

i linlnnotaniannenh 7

Covington, The Preparation and Operation of the

Multistate Bar Examination, 50 Bar Examiner 20

ere in cvempnbsslimsinstineosnstnbaisnnnnenes 7

Final Report of The Committee to Consider Standards

for Admission to Practice in the Federal Courts

(1979), reprinted at 83 F.R.D. 215 ooo... eceees 7,11

Herndon, et al., Expediting and Controlling Antitrust

Litigation—The Demand for Cost Containment, 51

Antitrust LJ. 423 (1963) .............cccecceccccseccessescsesssceccseess 9

H.R. Rep. No. 1017, 94th Cong., 2d Sess. (1972), re-

printed in the 1972 U.S. Code, Cong. & Ad. News

a 5s asenbtesignnsannnboimaionsinaniins 28

Karger, The Role of the NCBE in the Bar Admission

Process: Its First Fifty Years, 50 Bar Examiner 7

a saniacbidpilichteneniobaaaiiahtiniie 6, 7,8

F. Klein, 8. Leleiko & J. Mavity, Bar Admission Rules

and Student Practice Rules (1978) .............00000+. 6,7, 8,11

O'Hara & Klein, Js the Bar Examination an Adequate

Measure of Lawyer Competence?, 50 Bar Examiner

EE AS eS Sa 6

Smith, 1981 Bar Examination Statistics, 51 Bar Exam-

a cehalis htggsslodpasaioepempabied 7,10

Smith, 1982 Bar Examination Statistics, 52 Bar Exam-

I a dallas naslausilencedaioegen 19

Sprecher, Fifty Years of Service, 50 Bar Examiner 4

8 dE SER RR evel a I 6

E. Timberlake, Federal Treble Damage Antitrust

a SR a EN SIE Re OE 9

No. 82-1474

In the Supreme Court

OF THE

United States

Octroner Term, 1983

CnHarves R. Hoover, Howarp H. Karman, Ropert D. Myers

and Haroutp J. WoLFincer,

Petitioners,

Vs.

Epwarp RonxwIy,

Respon’ent.

On Writ of Certiorari to the

United States Court of Appeals for

the Ninth Circuit

BRIEF OF AMICUS CURIAE

IN SUPPORT OF PETITIONERS

Amicus curiae, the National Conference of Bar Exami-

ners(“NCBE”), respectfully submits this brief in support

of petitioners Charles R. Hoover, et al.

SUMMARY OF ARGUMENT

The regulation of attorneys lies at the core of the states’

power to protect their citizens. The bar examination is an

essential tool in the states’ exercise of that power. In each

state, the highest court retains the power to grant or deny

admission to practice, but has delegated to a board of

eminent practitioners the highly sophisticated, technical

and time-consuming chores of preparing, administering and

grading the bar examination.

Federal antitrust review of the bar examination grading

process would serve no Congressional purpose. It would

not open entry into the legal profession to free competition.

It would, however, severely infringe upon the states’ com-

pelling interest in regulating their own bars. It would also

impose significant additional litigation burdens on the

federal courts.

These evils are avoided by following this Court's recent

decision in District of Columbia Court of Appeals v. Feld-

man, ...... U.S. ......, 103 S.C*. 1303 (1983). There, this Court

held that the federal district courts lack jurisdiction to

review individual denials of admission to practice because

such denials are final judicial action reviewable only in this

Court. Though Feldman concerned constitutional attacks

on denials cf admission, its reasoning applies with equal

force to prevent federal district courts from entertaining

similar collateral attacks by way of antitrust actions.

The district court was also correct in dismissing this

action because it involves exempt state action. Restraints

of trade imposed by the state itself, acting in its sovereign

capacity, are immune from antitrust scrutiny. Parker v.

Brown, 317 U.S. 341 (1943). For these purposes, any state

body which makes decisions and sets policy for the state

as a whole partakes to that extent of the state’s sovereignty

and is immune from antitrust attack. Pursuant to the

Arizona Supreme Court's directions, the Arizona Com-

mittee on Examinations and Admissions set and imple-

mented statewide policy on the administration and grading

of bar examinations. It acted as the state itself and was

absolutely immune.

The two-pronged test restated in California Retail

Liquor Dealers Ass'n v. Midcal Aluminum, Inc., 445 U.S.

97, 105 (1980) should not be applied to such state agencies.

But to the extent that test is applied, it is met here.

The committee was duly authorized by the Arizona

Supreme Court to grade bar examinations. The supreme

court necessarily contemplated that the committee would

choose a particular method of grading, the kind of activity

challenged here. Whatever method was chosen, the result

would restrain trade by excluding those receiving low

grades from admission to practice. That is all that is re-

quired to show a clearly articulated and affirmatively

expressed state policy, at least when a public agency’s acts

are attacked.

A publie agency, particularly a state agency, should not

have to show that its acts were actively supervised by the

state. But if that requirement must be met, the Arizona

Supreme Court's review and supervision of the committee's

work does so.

Finally, the Noerr-Pennington doctrine shields the com-

mittee’s acts from antitrust review. The comnittee’s only

function was to recommend to the Arizona Suj reme Court

that the court grant or deny admission to particular appli-

cants. Such initiation of judicial action is not proscribed

by the antitrust laws.

For all of these reasons, the district court correctly dis-

missed the complaint in this action. Its judgment should be

reinstated and the erroneous judgment of the Ninth Circuit

Court of Appeals should be reversed.

INTEREST OF AMICUS CURIAE

Organized in 1931, the NCBE is a private, nonprofit

corporation affiliated with the American Bar Association.

The NCBE’s membership includes officers and members of

boards of bar examiners and of bar character committees

of all 50 states, the District of Columbia, Guam, Puerto

Rico and the Virgin Islands. The NCBE’s membership also

includes judges of state courts which control admission of

lawyers to practice.

Among the NCBE’s objectives are improving the quality

of bar examinations, conducting studies and distributing

information about bar examinations, and encouraging the

maintenance of high standards by state boards of bar

examiners. The NCBE also cooperates with other organiza-

tions representing the bench, bar and law schools in solving

problems relating to legal education and bar admissions.

In cooperation with the American Bar Association and

the American Association of Law Schools, the NCBE has

promulgated a Code of Recommended Standards for Bar

Examiners. The Code’s 29 standards cover all aspects of

bar examinations, from who should serve as a bar examiner

to how bar examinations should be graded.

The NCBE has published The Bar Examiners’ Hand-

book (S. Duhl 2d ed. 1980) which provides extended com-

mentary on each of the 29 Recommended Standards for Bar

Examiners. The NCBE also publishes a monthly periodical,

The Bar Examiner, featuring articles by eminent authori-

ties on admission standards and bar examination proce-

dures, and a Litigation Report, detailing the progress of

and analyzing the issues in litigation against bar examiners.

The NCBE holds conventions, seminars and other instruc-

tional sessions for bar examiners and judges.

The NCBE maintains a library of more than 6,500 bar

examination essay questions. On request, the NCBE sends

questions and model answers to bar examiners throughout

the nation for use in preparing bar examinations.

Since 1971, the NCBE has compiled, administered and

scored the Multistate Bar lxamination (“MBE”). The

MBE is a multiple choice examination containing 200

questions covering contracts, torts, constitutional law,

criminal law, evidence and real property. At present, 46

states, the District of Columbia and the Virgin Islands use

the MBE as part of their bar examinations.

The NCBE has recently established the Multistate Pro-

fessional Responsibility Examination (“MPRE”). First

given in 1980, the MPRE is now used in 27 jurisdictions.

The MPRE is a 50-question multiple choice test on legal

ethics.

The NCBE has an organizational interest in this case

because antitrust review of the grading of bar examinations

‘

will interfere with the NCBE’s goals of improving the

quality of bar examinations and of encouraging the

maintenance of high professional standards among bar

examiners. NCBE also has an interest in the application

of the antitrust laws to bar examiners, both on behalf of

its bar examiner members and in its own right as the

organization which prepares and scores the MBE and

MPRE.

ARGUMENT

1. A Federal Antitrust Action Cannot be Used to Chal-

lenge a Failing Grade on a Bar Examination

a. The States Have a Compelling Interest in Regu-

lating Admission to Their Bars

Time and again, this Court has “recognize[d] that the

states have a compelling interest in the practice of pro-

fessions within their boundaries, and that as part of their

power to protect the public health, safety, and other valid

interests they have broad power to establish standards for

licensing practitioners and regulating the practice of pro-

fessions.” Goldfarb v. Virginia State Bar, 421 U.S. 773, 792

(1975).

The states’ interest “in regulating lawyers is especially

great since lawyers are essential to the primary govern-

mental function of administering justice, and have histor-

ically been ‘officers of the courts.’ [Citations.]” Ibid. Indeed,

this Court has held that the “regulation of the activities

of the bar is at the core of the State’s power to protect the

public.” Bates v. State Bar of Arizona, 433 U.S. 350, 361

(1977) ; accord: District of Columbia Court of Appeals v.

Feldman, supra, 103 S.Ct. at 1315-1316 n. 16; Middlesex

County Ethics Committee v. Garden State Bar Ass’n,

US. ....... 102 S.Ct. 2515, 2522-2523 (1982).

Federal intrusions into this area of critical state concern

have intentionally been few in number and limited in

scope. See, ¢.g., Konigsberg v. State Bar of California, 353

U.S. 252, 273 (1957); In re Summers, 325 U.S. 561, 570-571

(1945). It remains true that

Since the founding of the Republic, the licensing and

regulation of lawyers has been left exclusively to the

States and the District of Columbia within their re-

spective jurisdictions. The States prescribe the quali-

fications for admission to practice and the standards

of professional conduct. They also are responsible for

the discipline of lawyers.

Fn. omitted; Leis v. Flynt, 439 U.S. 438, 442 (1979).

Though this Court has reviewed other aspects of bar

admissions from time to time, this case is the first to pre-

sent bar examination procedures for this Court’s review.

b. The Bar Examination Is an Essential Tool in

Regulating Admission to Practice

The bar examination is an essential tool in the states’

regulation of admission to the bar. Though “(t]he bar

examination seems to be a favorite whipping boy of critics

of the system,” F. Klein, S. Leleiko & J. Mavity, Bar Ad-

mission Rules and Student Practice Rules, 39 (1978) (here-

after “Bar Admission Rules’), no one has yet suggested

a satisfactory alternative to the bar examination for

evaluating an applicant’s knowledge of the law, ability to

analyze legal problems and aptitude for the practice of

law. See O’Hara & Klein, Js the Bar Examination an Ade-

quate Measure of Lawyer Competence?, 50 Bar Examiner

28 (1981).

Oral bar examinations predate this nation, and written

bar examinations were given as early as 1855. Sprecher,

Fifty Years of Service, 50 Bar Examiner 4 (1981);

Karger, The Role of the NCBE in the Bar Admission

Process: Its First Fifty Years, 50 Bar Examiner 7, 8-9

(1981). By now, written bar examinations are the primary

tool for screening bar applicants in all 50 states. Karger,

supra, 50 Bar Examiner at 9; Bar Admission Rules,

34-36. The Devitt Committee has recommended that a fed-

eral bar examination be instituted as one means of im-

proving and assuring the quality of legal representation

in the federal courts. Final Report of the Committee to

Consider Standards for Admission to Practice in the Fed-

eral Courts (1979), reprinted at 83 F.R.D. 215, 224-225

(hereafter “Final Report’).

Over the past 50 years, under the NCBE’s leadership,

the preparation, grading and administration of bar exam-

inations have become increasingly sophisticated. See

Karger, supra, 50 Bar Examiner at 9-14. At the same time,

the complexity of those tasks has vastly increased, to-

gether with the number of applicants taking bar examina-

tions. The Bar Examiners’ Handbook, 312 (S. Duhl 2d ed.

1980); Smith, 2981 Bar Examination Statistics, 51 Bar

Examiner 27 (1982); see Covington, Lhe Preparation and

Operation of the Multistate Bar Examination, 50 Bar

Examiner 20 (1981); Covington, Administering the Multi-

state Professional Responsibility Examination, 50 Bar

Examiner 26 (1981). As a result, though each state’s high-

est court retains the ultimate authority to grant or deny

admission to practice, each has delegated to a committee,

commission or board of bar examiners the duties of pre-

paring, grading and administering the bar a.

Bar Admission Rules, 29-33.

These bar examiners are skilled practicing attorneys

“with scholarly attainments and an affirmative interest in

legal education and requirements for admission to the

bar.” The Bar Examiners’ Handbook, at 95. In general,

these eminent practitioners volunteer their time and exper-

tise to assist the states’ highest courts perform an essen-

tial, but time-consuming and technical task, which those

courts could not otherwise accomplish. See id., at 99.

Bar examiners bring a high degree of professionalism to

their task. The Bar Examiners’ Handbook, at 95-97. Since

1958, they have operated under a Code of Recommended

Standards for Bar Examiners promulgated by the NCBE

in cooperation with the American Bar Association and the

Association of American Law Schools. Karger, supra, 50

Bar Examiner at 9-10. That Code has recently been

revised and republished with extensive commentary as

The Bar Examiners’ Handbook (S. Duhl 2d ed. 1980). Id.,

11-12. The Code specifies standards on all aspects of the

bar examination process, including the grading of bar

examinations and the provision of review procedures for

disappointed applicants. The Bar Examiners’ Handbook,

at 271-302, 303-309. Through these means, bar examiners

have imposed on themselves a high degree of self-

regulation.

In addition, bar examiners are subject to the scrutiny,

supervision and direction of the states’ highest courts.

Before bar examinations are given, the high courts super-

vise the preparation of the tests and the grading proce-

dures to be employed. See, e.g., Ariz.Sup.Ct.R. 28(¢) (VIL)

(B) (except as otherwise noted all references are to the

rules in effect in February 1974). After bar examinations

are given, the high courts again exercise their control and

supervision by exercising their discretion de novo in

granting or denying admission to applicants, see, e.g.,

Ariz.Sup.Ct.R. 28(a); Application of Levine, 97 Ariz. 88,

397 P.2d 205, 207 (1964), and by providing explicit pro-

cedures for review, ultimately by the high court itself, of a

disappointed applicant’s failing grade, The Bar Exam-

iners’ Handbook, at 303-309; Bar Admission Rules, 34-36,

40; see, e.g., Ariz.Sup.Ct.R. 28(c)(XI1)(G) (amended ef-

fective June 15, 1976). This is judicial action. See pp. 12-14,

infra.

c. Federal Anti.cust Review of Bar Examinations

Would Disrupt the Bar Examination Process and

Unwisely Shift Control Over Bar Admissions to

the Federal Courts

The bar examination process now runs relatively

smoothly along the lines discussed above. That process will

be severely disrupted if disappointed applicants are

allowed to challenge their failing grades in federal anti-

trust actions like Ronwin’s.

As Ronwin, himself, illustrates, disappointed bar appli-

cants can be tireless litigants. See Ronwin v. Committee on

Examinations and Admissions, 419 U.S. 967 (1974) ; Appli-

cation of Ronwin, 113 Ariz. 357, 555 P.2d 315 (1976), cert.

denied, 480 U.S. 907 (1977), 439 U.S. 828 (1978); Ronwin

v. Shapiro, 657 F.2d 1071 (9th Cir. 1981); see also, In re

Ronwin, ...... Ariz. ...... bone iy , Nos. SB52-8, SB52-9

(July 6, 1983); Ronwin v. Segal, 634 F.2d 636 (9th Cir.

1980). cert. denied, 450 U.S. 1041 (1981); Ronwin v. Fair

Employment Practices Comm'n, 409 U.S. 811 (1972).

Disappointed bar applicants will have little trouble

framing a Sherman Act complaint which will survive a

motion to dismiss, unless such actions are barred by the

state action or Noerr-Pennington doctrines discussed below.

By its very nature, the bar examination process involves

the exercise of discretion and excludes some would-be com-

petitors from competition. Since bar examiners are prac-

ticing lawyers, it is easy to blame such exclusion on the bar

examiners’ supposed anticompetitive motives. Compl.,

7 VILL.

Nor will it be possible to weed out many of these com-

plaints by summary judgment, Poller v. Columbia Broad-

casting Sys., 368 U.S. 464, 473 (1962), particularly since

anticompetitive motive may be inferred from anticompeti-

tive effect, Helix Milling Co. v. Terminal Flour Mills Co.,

523 F.2d 1317, 1321 (9th Cir. 1975), cert. denied, 423 U.S.

1053 (1976). Antitrust litigation is notoriously expensive

to defend, normally involving copious discovery. See

Herndon, et al., Expediting and Controlling Antitrust Liti-

gation—The Demand for Cost Containment, 51 Antitrust

L.J. 423 (1983); E. Timberlake, Federal Treble Damage

Antitrust Actions, § 1.03, p. 2 (1965).

Even if bar examiners were to prevail at trial in each

Ronwin-style antitrust action, the bar examination process

would be severely disrupted. The cost of defending such

actions, the threat of liability for treble damages and attor-

neys’ fees, the inconvenience and loss from having to spend

long hours in depositions, answering interrogatories and

preparing defenses would all serve to deter eminent prac-

titioners from serving as bar examiners. Bar examiners

might prevail at trial, “[b]ut in the meantime the antitrust

suit will have strategic effects, will impose discovery and

litigation burdens, and may intimidate public officials in the

performance of their duties—all on the basis of the conclu-

sory allegations common in such cases.” Areeda, Antitrust

Immunity for “State Action” after Lafayette, 95 Harv.L.

Rey. 435, 451 (1981).

Antitrust review of bar examination grading would also

improperly shift the ultimate responsibility for bar admis-

sions from the states to the federal courts. See pp. 24-26,

infra. Federal judges and juries, not the justices of the

states’ highest courts, would be the final arbiters of who

should be admitted to practice. Moreover, admissions deci-

sions would depend, in the end, on antitrust concepts, not

the quite different concerns of quality, competence, and

protection of the public which the bar examinations process

now serves,

Allowing antitrust challenges to failing grades on the

bar examination would impose significant burdens on the

federal courts. If only ten percent of those who failed bar

examinations filed antitrust actions, another 2,000 cases

would be added each year to the federal courts’ already

overburdened dockets.’

In addition, the federal courts would face a rising tide

of antitrust claims by. disappointed applicants for the

many other types of professional licenses issued by state

regulatory boards commonly composed of members of the

regulated profession. See, e. g., Gambrel v. Kentucky Bad.

of Dentistry, 689 F.2d 612 (6th Cir. 1982), cert. denied, ......

"In 1981, 20,219 applicants took and failed bar examinations in

American jurisdictions. Smith, supra, 51 Bar Examiner, at 27.

US. ......, 103 S.Ct. 1198 (1983); Euster v. Eagle Downs

Racing Ass'n, 677 F.2d 992 (3d Cir.), cert. denied, ...... U.S.

sot , 103 S.Ct. 388 (1982); Benson v. Arizona State Bd. of

Dental Examiners, 673 F.2d 272 (9th Cir. 1982).

Antitrust review would constitute a substantial federal

intrusion upon the states’ “compelling interest” in regula-

tion of admission to the practice of law. In Goldfarb v.

Virginia State Bar, supra, 421 U.S. at 793, this Court ob-

served that “[i]n holding that certain anticompetitive con-

duct by lawyers is within the reach of the Sherman Act we

intend no diminution of the authority of the State to

regulate its professions.” As in Bates v. State Bar of

Arizona, supra, 433 U.S. at 360 n. 11, “[ajllowing the

instant Sherman Act challenge to [bar examination grad-

ing] would have precisely that undesired effect.”

Allowing actions like Ronwin’s would not measurably

advance antitrust objectives. Admission to state bars is not

and should not be determined by economic forces. To pro-

tect the public from incompetent would-be lawyers, every

state has displaced “unfettered economic freedom,” New

Motor Vehicle Bd. v. Orrin W. Fox Co., 439 U.S. 96, 109

(1978), with regulation of admission to practice in order to

weed out unqualified applicants. Bar Admission Rules, at

pp. 34-36. The trend is toward tighter regulation, not more

economic freedom. See, e.g., Burger, The Special Skills of

Advocacy: Are Specialized Training and Certification of

Advocates Essential to Our System of Justice? 42 Fordham

L.Rev. 227 (1973); Burger, Some Further Reflections on

the Problems of Adequacy of Trial Counsel, 49 Fordham

L.Rev. 1 (1980); Final Report, supra, 83 F.R.D. at 224-225.

Antitrust review of bar examination grading will not

reverse that anticompetitive trend toward better screening

of bar applicants in order to protect courts and clients.

‘Antitrust review will impose undesirable new burdens on

the federal courts, intrude upon the states’ exclusive

prerogatives in regulating admission to their bars, and

seriously disrupt the bar examination process.

d. District of Columbia Court of Appeals v. Feldman

Bars Individual Antitrust Challenges to Failing

Bar Examination Grades

This Court’s recent decision in District of Columbia

Court of Appeals v. Feldman, supra, 103 S.Ct. 1303 pro-

vides a clear path to the resolution of this suit and avoid-

ance of the problems which federal antitrust review of

state bar admissions decisions would entail.

In Feldman, this Court held that denial of admission

to practice is a final judgment of the state’s highest court,

a judicial act. 7d., at 1311-1314. Such judgments are re-

viewable only in this Court. The federal district courts

lack subject matter jurisdiction to review such judgments.

They have no power to entertain complaints seeking to

compel an individual’s admission to practice law. Id., at

1311, 1314 n. 15, 1315; see n. 2, infra, re court of appeal

ruling on Feldman’s antitrust claims.

According to Feldman, a disappointed bar applicant must

raise even a constitutional attack in the state court to pre-

serve the point for possible review by this Court. “By fail-

ing to raise his claims in state court a plaintiff may forfeit

his right to obtain review of the state court decision in any

federal court.” Jd., at 1315 n. 16.

The same reasoning applies with equal force to prevent

federal district courts from entertaining antitrust com-

plaints like Ronwin’s. Ronwin seeks collateral review of the

Arizona Supreme Court's decision denying him admission

to practice. His complaint alleges that as a result of de-

fendants’ alleged antitrust violation, he was artificially pre-

vented from entering competition as an Arizona lawyer and

thus suffered $400,000 damages. Compl. {7 VII, IX.

Nothing barred Ronwin from raising this antitrust claim

as part of his initial state court challenge to his failing

grade. See Ronwin v. Committee on Examinations and Ad-

missions, 419 U.S. 967 (1974). District of Columbia Court of

Appeals v. Feldman, supra, 103 8.Ct. at 1306-1307, 1313

n. 14 and Bates v. State Bar of Arizona, supra, 433 U.S. at

356-357 demonstrate that antitrust objections can and

should be raised in the course of any state court challenge

to an admission or disciplinary ruling.’ By failing to raise

*Federal district courts have exclusive jurisdiction over private

treble damage actions under the federal antitrust laws. 15 U.S.C.,

§ 15. But, as Feldman and Bates show, that does not prevent state

courts from considering federal antitrust claims in deciding

whether to admit or discipline members of their bars. See also,

Lynch Display Corp. v. National Souvenir Center, Inc., 640 S.W.2d

837 (Tenn.Ct.App. 1982). In the same way, it has long been held

that federal regulatory agencies can and must consider the anti-

trust implications of their actions. See, e.g., Denver & R.G. R.R.

Co. v. United States, 387 U.S. 485, 492-498 (1967); California v.

Federal Power Comm'n, 369 U.S. 482 (1962).

Requiring antitrust challenges to admission or disciplinary deci-

sions to be raised in state court proceedings would allow the state

supreme courts to avoid unintended anticompetitive effects of their

decisions or rules. It would also permit those courts to clearly

articulate state policy on the anticompetitive effects they do intend.

Compare District of Columbia Court of Appeals v. Feldman, supra,

103 S.Ct. at 1315 n. 16. Requiring such issues to be raised in state

court would also obviate the otherwise difficult question of an

appropriate remedy, assuming an antitrust violation were found.

See, Community Communications Co. v. City of Boulder, .. US.

, 102 S.Ct. 835, 843 n. 20 (1982); I P. Areeda & D. Turner, Anti-

trust Law, § 217a, pp. 101-108 (1978).

The seemingly contrary holding in Feldman v, Gardner, 661 F.2d

1295, 1303 (D.C.Cir. 1981), cert. denied, .. US. .., 102 S.Ct.

3483 (1982), rev'd on other grounds sub nom., District of Colum-

bia Court of Appeals v. Feldman, supra, was made without benefit

of this Court’s reasoning in District of Columbia Court of Appeals

v. Feldman, supra, and appears to depend in large part on the

same rationale this Court later rejected with respect to Feldman’s

constitutional claims. Compare 661 F.2d at 1303 n. 61 with 661

F.2d at 1309-1319.

Having incorrectly held that the district court had jurisdiction

to hear Feldman’s antitrust claims, the court of appeals correctly

found that the District of Columbia Court of Appeals acted as the

state itself in promulgating and enforcing its rules governing bar

admissions, and was therefore entitled to state action immunity

: ae

his antitrust claim in the Arizona Supreme Court, Ronwin

lost his right to federal court review of that claim.

Any different holding would allow disappointed bar ap-

plicants an easy escape from F'eldman’s rule that the federal

district courts are without jurisdiction to review a final

order of a state supreme court denying a particular appli-

cant admission to the bar. Feldman, supra, 103 S.Ct. at 1316.

Any would-be lawyer could secure collateral review in the

district court by the simple means of phrasing his claim in

antitrust terms rather than constitutional language. Surely,

Feldman was not intended to be limited to such niceties of

pleading.

In short, Feldman points the way to a proper reconcilia-

tion of the states’ compelling interest in regulation of ad-

mission to the practice of law with the federal antitrust

laws. A bar applicant who claims he was denied admission

due to some unauthorized anticompetitive practice may

raise his claim before the state’s highest court on review of

the denial of his admission. If the state court finds that the

applicant was the victim of an unauthorized anticompeti-

tive practice, it will presumably order the applicant’s admis-

sion, or this Court may do so on direct review.

A later federal antitrust action will be precluded. The

disruptive effects of antitrust review of state bar admis-

sions decisions by lower federal court judges and juries will

be avoided.

2. Grading Bar Examinations Is State Action Exempt

From Antitrust Scrutiny

a. The Committee on Examinations and Admissions

Acted as the State in Its Sovereign Capacity and

Therefore Is Exempt

This Court has repeatedly held that the Sherman Act does

not prohibit restraints of trade imposed by the State itself.

from the antitrust laws. 661 F.2d at 1304-1318, This Court denied

Feldman’s petition for certiorart from this holding. Feldman v. Dis-

trict of Columbia Court of Appeals, US. , 102 S.Ct. 3483

(1982).

Parker v. Brown, supra, 317 U.S. at 350-352; New Motor

Vehicle Bd. v. Orrin W. Fox Co., supra, 439 U.S. at 109;

Bates v. State Bar of Arizona, supra, 433 U.S. at 359-360.

This “state action exemption” arises from our “dual

system of government in which, under the Constitution, the

states are sovereign, save only as Congress may constitu-

tionally subtract from their authority.” Parker v. Brown,

supra, 317 U.S. at 351; City of Lafayette v. Louisiana Power

& Light Co., 485 U.S. 389, 412 (1978). In other words, the

“Parker exemption reflects the federalism principle that

we are a nation of States... .’"’ Community Communications

Co. v. City of Boulder, supra n. 2, 102 S.Ct. at 840.

Because of its fundamental, federalist nature, the Parker

exemption absolutely immunizes from antitrust attack all

acts taken by a state acting in its sovereign capacity. Such

sovereign acts need not meet the two-pronged test articu-

lated in California Retail Liquor Dealers Ass’n v. Midcal

Aluminum, Inc., supra, 445 U.S. at 105." Community Com-

munications Co. v. City of Boulder, swpra, 102 S.Ct. at 841;

Parker v. Brown, supra, 317 U.S. at 250-352; accord Feld-

man v. Gardner, supra n, 2, 661 F.2d at 1305; Foley v. Ala-

bama State Bar, 648 F.2d 355, 359 (Sth Cir. 1981); New

Mexico v. American Petrofina, Inc., 501 F.2d 363, 372 (9th

Cir. 1974).

Instead, the Midcal test is applied only to municipalities,

private persons and others who are not the state and thus

cannot act in a sovereign capacity.* The Midcal test recog-

*As restated in Midcal, the test is “[f)irst, the challenged restraint

must be ‘one clearly articulated and affirmatively expressed as state

policy’; second, the policy must be ‘actively supervised’ by the State

itself.” California Retail Liquor Dealers Ass'n v. Midcal Aluminum,

Inc., supra, 445 U.S. at 105.

‘The fact that the committee's members are lawyers, that is,

members of the regulated industry, and serve on the committee

only on a part-time basis does not deprive their acts of state action

immunity. In Parker, the program committees which established

nizes “that a State may frequently choose to effect its pol-

icies through the instrumentality of [such non-state enti-

ties].”” Community Communications Co. v. City of Boulder,

supra, 102 S.Ct. at 840. At the same time, the Midcal test

assures that ‘‘{t]he national policy in favor of free competi-

tion cannot be thwarted by casting ... a gauzy cloak of

state involvement over what is essentially a private price

fixing arrangement.” California Retail Liquor Dealers Ass'n

v. Midcal Aluminum, Inc., supra, 445 U.S. at 106.

Thus, as this Court most recently summarized in Com-

munity Communications Co. v. City of Boulder, supra, 102

S.Ct. at 841, the Parker exemption is available to a state

whenever it acts as sovereign, but to other entities only

when their acts meet the Midcal test:

Our precedents thus reveal that Boulder’s mora-

torium ordinance cannot be exempt from antitrust

scrutiny unless it constitutes the action of the State of

Colorado itself in its sovereign capacity, see Parker, or

unless it constitutes municipal action in furtherance or

implementation of clearly articulated and affirma-

tively expressed state policy [citations].

Emphasis added.

This Court's state action cases have not, as yet, squarely

addressed the question whether state sovereignty resides

in less than all of the many officers and entities of which

modern state governments are composed. See Areeda,

the prorate program, the particular restraint of trade under attack,

were likewise composed of producers and packers, members of the

supre, 95 Harv.L.Rev. at 441-442. Nevertheless, this Court's

decisions suggest that the proper answer is that sover-

eignty resides in all parts of state government which make

decisions and set policy for the state as a whole, including,

in this case, the Arizona Committee on Examinations and

Admissions.

Parker itself points the way. That case involved three

levels of California state government. The state legislature

enacted the Agricultural Prorate Act. Under the act, a

statewide Agricultural Prorate Advisory Commission was

established. Finally, upon petition by agricultural pro-

ducers, a program committee of such producers and as

many as two packers could be formed. 317 U.S. at 344,

346-347. The program committee would propose a prorate

program. If approved by the Prorate Advisory Commission

and a referendum of affected producers, the program would

go into effect under the administration of the program

committee, /d. at 347.

In Parker, the state legislature set the overall policy of

excluding competition from selected agricultural markets,

but the program committees, subordinate state administra-

tive agencies composed of members of the regulated indus-

try, decided upon and enforced the particular restraints of

trade which Brown challenged. This Court held the trade

restraints immune from antitrust scrutiny, finding that “in

adopting and enforcing the prorate program,” the state

“as sovereign, imposed the restraint as an act of govern-

ment which the Sherman Act did not undertake to pro-

hibit.” Jd. at 352.

Likewise, in New Motor Vehicle Board v. Orrin W. Fox

Co., supra, 439 U.S. at 109-110, this Court held that the

state action exemption applied to actions of the California

New Motor Vehicle Board, a subordinate state administra-

tive agency, four of whose nine members were from the

regulated industry. The board established specific trade

restraints under an extremely general delegation of power

from the California Legislature. See td., at 98 n. 1.

This Court has also recognized in other contexts that

sovereignty resides not only in a state’s legislature, gov-

ernor and supreme court, but in its subordinate administra-

tive agencies as well. Speaking of the Mississippi Public

Services Commission, this Court recently held:

We acknowledge that “the authority to make .. . funda-

mental . . . decisions” is perhaps the quintessential

attribute of sovereignty. [Citation.] Indeed, having the

power to make decisions and to set policy is what

gives the State its sovereign nature. See Bates v. State

Bar of Arizona, 433 U.S. 350, 360... . It would follow

that the ability of a state legislative (or, as here,

administrative) body—which makes decisions and sets

policy for the State as a whole—to consider and

promulgate regulations of its choosing must be central

to a State's role in the federal system.

Federal Energy Regulatory Comm'n, v. Mississippi, ......

US. ....... 102 S.Ct. 2126, 2138 (1982).

These decisions teach that state sovereignty is not

isolated at the highest legislative, executive and judicial

levels of government. If an arm of state government makes

decisions and sets policy for the state as a whole, it acts to

that extent as the state itself in its sovereign capacity.

In this case, the Arizona Committee on Examinations and

Admissions partook of Arizona's sovereignty. The com-

mittee was created by the Arizona Supreme Court, the

state’s highest judicial authority, and is directly responsible

to that body. Ariz.Sup.Ct.R. 28(a). The committee is an

administrative aid to the court, helping it perform the

judicial task of granting or denying admission to practice.

See Richardson v. McFadden, 563 F.2d 1130, 1132 (4th Cir.

1977) (Hall, J., coneurring), cert. denied, 435 U.S. 968

(1978) ; Feldman v. State Board of Law Examiners, 438

F.2d 699, 702 (8th Cir. 1971). The committee carries out

testing functions which the supreme court has neither the

time nor the technical skills to perform itself.°

Within the narrow realm of its competence—preparation,

administration and grading of the bar examination—the

committee makes decisions and sets statewide policy. As

in Parker, the highest level of state government has adopted

the overall policy of removing a segment of commerce

from free competition—here, entry into the legal profes-

sion—and has delegated to a lower state agency the job

of developing the particular regulations (or restraints of

trade) needed to carry. the overall policy into effect.*

Ariz.Sup.Ct.R. 28(a), (c).

‘In California, for example, the Committee of Bar Examiners

administered 12,370 examinations in 1982. Smith, 1982 Bar Exam-

ination Statistics, 52 Bar Examiner 24 (1983). A study of the Cali-

fornia committee concluded that in 1977 (when considerably fewer

applicants took the examination), the committee handled 2.3

million separate transactions. Booz, Allen & Hamilton, Inc., A Diag-

nostic Study of the Operations of the Offices of the Committee of

Bar Examiners The State Bar of California (March 1978). Cali-

fornia’s seven supreme court justices could not perform their many

other judicial responsibilities if they participated personally in any

significant way in this vast effort.

*The fact that both the overall anticompetitive policy and the

particular trade restraints here were set by state agencies distin-

guishes this case from Goldfarb v. Virginia State Bar, supra.

In Goldfarb, the Virginia Supreme Court had not adopted an

anticompetitive policy in the pricing of legal services. To the

contrary, its ethical codes directed that lawyers not be controlled

by fee schedules. 421 U.S. at 789 & n. 19. The fee schedules

Goldfarb struck down were “essentially a private anticompetitive

activity” of the County Bar, a voluntary organization. Id., at 790,

792. The State Bar, a state agency for some limited purposes, en-

forced this essentially private restraint which had not been autho-

rized, reviewed or approved by the state. Id., at 791.

Goldfarb was thus similar to Midcal and Schwegmann Bros. v.

Calvert Corp., 341 U.S. 384 (1951). In those cases, state bodies

enforced uniform resale prices set by private parties, and this

Court held there was no state action immunity. By contrast, here

the alleged trade restraint—the method of scoring the bar exami-

; aid

As Parker and Orrin W. Fox Co. hold, under such

circumstances the acts of the lower state agency are those

of the state itself acting as sovereign and are immune from

the antitrust laws.

b. If the Midcal Test Applies, tha Committee’s Acts

Meet It

Assuming arguendo that the Committee on Examinations

and Admissions cannot claim state action immunity simply

on the ground that it was acting as the state in its sovereign

capacity, its acts are still immune because they satisfy the

Midcal test as that test is applied to state agencies.

(1) The Committee Acted Pursuant to an Affirma-

tively Expressed State Policy

In determining whether private parties are entitled to

state action immunity, this Court has required that “the

challenged restraint . . . be ‘one clearly articulated and

affirmatively expressed as state policy’... .” California

Retail Liquor Dealers Ass'n. v. Midcal Aluminum, Inc.,

supra, 445 U.S. at 105.

In this case, the court of appeals held that the Arizona

Committee on Examinations and Admissions had not met

this part of the Midcal test because “the defendants here

have no statute or Supreme Court Rule to point to as

directly requiring the challenged grading procedure.” Fn.

omitted; emphasis added; 686 F.2d at 696. The court of

appeals also held that the Arizona Supreme Court’s delega-

tion to the committee of general authority to examine

applicants and the high court’s review of the committee’s

recommendations regarding admission “does not alone

clothe the Committee’s unilateral grading policies with

blanket immunity from the antitrust laws.” Ibid.

nation—was established as well as enforced by the Committee

Examinations and Admissions acting in its official capacity as

state agency. That trade restraint was not “essentially private,”

was a necessary step in accomplishing the state's regulatory

purpose.

These holdings disclose a two-fold misunderstanding of

the first part of the Mi/cal test, at least as it applies to

governmental entities. First, in City of Lafayette and City

of Boulder, this Court held that for a municipality's acts

to be immune, they need not be compelled or “directly

required” by state policy. Immunity attaches so long as it

is shown that “the State authorized or directed a given

municipality to act as it did... .” Emphasis added; City of

Lafayette v. Louisiana Power & Light Co., supra, 435 U.S.

at 414, 416; Community Communications Co. v. City of

Boulder, supra, 102 S.Ct. at 843-844; Gold Cross Ambulance

v. City of Kansas City, 705 F.2d 1005, 1012 n. 11 (8th Cir.

1983); Town of Hallie v. Citu of Eau Claire, 700 F.2d 376,

381-382 (7th Cir. 1983), petition for cert. filed, 51 U.S.L.W.

3842 (U.S. May 11, 1983) (No. 82-1832); United States v.

Southern Motor Carriers Rate Conference, 672 F.2d 469,

473 (Sth Cir. 1982). A fortiori, a state agency need only be

authorized, not required, to impose a restraint in order

for state action immunity to attach.

Second, the Ninth Circuit's opinion in this case mis-

takenly requires “the state” to direct specifically the par-

ticular restraint under attack. City of Lafayette and City

of Boulder show that such specificity is not required.

This does not mean, however, that a political subdivi-

sion necessarily must be able to point to a specific,

detailed legislative authorization before it properly

may assert a Parker defense to an antitrust suit.

While a subordinate governmental unit’s claim to

Parker immunity is not as readily established as the

same claim by a state government sued as such, we

agree with the Court of Appeals that an adequate

state mandate for anticompetitive activities of cities

and other subordinate governmental units exists when

it is found “from the authority given a governmental

entity to operate in a particular area, that the legisla-

ture contemplated the kind of action complained of.”

[ Citation. }

Fn. omitted; City of Lafayette v. Louisiana Power & Light

Co., supra, 435 U.S. at 415; accord: Community Communt-

cations Co. v. City of Boulder, supra, 102 S.Ct. at 840 n.

12; Town of Hallie v. City of Eau Claire, supra, 700 F.2d

at 381; Euster v. Eagle Downs Racing Ass'n, supra, 677

F.2d at 995; see Areeda, supra, 95 Harv.L. Rev. at 445-

446,"

Here, the Arizona Supreme Court plainly “contemplated

the kind of activity complained of.” See Benson v. Arizona

State Bd. of Dental Examiners, supra, 673 F.2d at 275-

276. It directed the committee to “examine applicants and

recommend to this court for admission to practice appli-

cants who are found by the committee to have the neces-

sary qualifications.” Ariz.Sup.Ct.R. 28(a). The committee’s

broad authority to examine applicants was restricted only

"To require “the state” to specifically authorize each particular

trade restraint, as the Ninth Circuit did in this case, would impose

an impossible burden on state #mvernment, effectively preventing

its legislature, governor and supréme court from delegating their

functions. The courts have often recognized that modern govern-

ment, state or federal, depends upon delegation to subordinaté

agencies under broadly phrased mandates. See, e.g., Lichter ov.

United States, 334 U.S. 742, 785 (1948); Panama Refining Co. v.

Ryan, 293 U.S. 388, 421 (1934); Horseman's Benevolent & Protective

Ass'n o. Pennsylvania Horse Racing Comm'n, 530 F.Supp. 1098,

1107-1108 (E.D.Pa. 1982), affd per curiam, 688 F.2d 821 (3d Cir.

1982). The Ninth Circuit’s specific authorization requirement would

prohibit such delegation.

Moreover, “the state” could not specifically authorize each po-

tentially anticompetitive act of its subordinate agencies. The hair

could always be split finer. Here, for example, following Ronwin’s

lead, another disappointed bar applicant could claim that the

questions on the examination were selected for an unauthorized

anticompetitive purpose or that particular answers were given

lower grades for the same reason. To meet such claims, the

Arizona Supreme Court presumably would have to specifically

authorize each of those and a myriad of other details of the tasks

it now delegates to the Committee on Examinations and

Admissi

by a rule specifying the subjects the bar examination

should cover. Ariz.Sup.Ct.R. 28(¢) (VII).

The supreme court contemplated that the committee

would devise some method for scoring the bar examina-

tion; that is, of converting answers into “grades.” Ariz.

Sup.Ct.R. 28(c) (VII) (A). Whatever method the committee

chose, it would exclude some would-be competitors from

the market. See Galahad v. Weinshienk, 555 F.Supp.

1201, 1209 (D.Colo. 1983). Whatever the scoring method,

those receiving lower grades would not be recommended

for admission to practice.

Ronwin complains that the scoring method the commit-

tee chose—so-called scaled scoring*—was not the scoring

method the Arizona Supreme Court intended. Compl.,

{ VI; Brief in Opposition to Petition for Certiorari, 9-12,

22. Ronwin is wrong for two reasons.

He incorrectly assumes that the supreme court specified

a particular method of grading the bar examination. It did

not. Ronwin relies on a version of rule 28(¢) (VIII) which

was superseded effective January 14, 1974, a month before

he took and failed the examination. Even the superseded

rule merely said 70 would be a passing grade, specifying

neither the 0-100 grading scale Ronwin claims, nor the

method for determining what grade to give an examina-

“In a series of tests, such as the MBE, which are intended to

measure levels of competence, it i, important to have a standard-

ized score which represents the same level of competence from

test to test. The raw score is not dependable for this purpose since

the level of difficulty varies from test to test. It is not possible to

draft two tests of exactly the same level of difficulty. Scaled scores

are obtained by reusing some questions from earlier tests which

have been standardized. A statistical analysis of the scores on the

reused questions determines how many points are to be added to

or subtracted from the raw score to provide an applicant’s scaled

score. Thus a particular scaled score represents the same level of

competence from examination to examination.”

The Bar Examiners’ Handbook, supra, 61-62.

tion.” The new rule 28(c)(VII)(A) explicitly grants the

committee discretion to use the grading or scoring system

it deems appropriate. See n. 9 supra.

More importantly, Ronwin’s complaint that the commit-

tee abused its discretion by choosing the wrong scoring

method does not convert exempt state action into private

action subject to antitrust scrutiny. The antitrust laws

were not passed to allow federal courts to review state

administrative actions for abuse of discretion.

To be sure, Goldfarb v. Virginia State Bar, supra, 421

U.S. at 790-791 holds that anticompetitive activity not

“required” or “compelled” by “the State acting as sover-

eign” is not exempt from the Sherman Act. But it could

not have been Goldfarb’s intent to exempt only state ad-

ministrative decisions which federal scrutiny finds to be

honest, unbiased, disinterested and correct in law and fact.

To limit Parker immunity so narrowly would be to “trans-

form most state administrative law into a federal antitrust

task,’ making federal courts the ultimate arbiters of

whether state agencies have properly implemented the

policies set by state legislatures, governors and supreme

courts. Areeda, supra, 95 Harv.L.Rev. at 450.

Having one sovereign review another in this manner

would violate the federalist underpinning of Parker. It

*Grading a bar examination is not a simple process of counting

the number of “correct” answers and dividing by the number of

questions. Even on the multiple choice Multistate Bar Examination

portion of the test, grading is considerably more complex. Scoring

answers to essay questions is even more difficult, and combining

the two scores in a meaningful way adds yet another layer of

complexity to the process of grading the bar examination. See, The

Bar Examiners’ Handbook, supra, 271-302.

Recognizing these facts, the Arizona Supreme Court amended its

rules 28(c)(VII) and (VIII) to make explicit what was implicit

before. Effective January 14, 1974, rule 28(c}( VII) provided: “The

Committee on Examinations may utilize the Multi-State Bar Exam-

ination sponsored by the National Conference of Bar Examiners and

may utilize such grading or scoring system as the Committee deems

appropriate in its discretion.”

would do little to advance the true concerns of the anti-

trust laws, but would make administrative error and bias

antitrust violations. See id., at 454-455. Short of trial, it

would effectively abolish the state action exemption; bias

and abuse of discretion are easily alleged.

Having federal courts and juries reexamine a myriad of

state agency decisions for bias and abuse of discretion

would impose a heavy burden of litigation on the federal

system and seriously interfere with state government.

There is no need for such a massive shift in responsibili-

ties from the states to the federal government. The states

already provide ample remedies to correct their adminis-

trative agencies’ errors.

When a subordinate state agency has acted to implement

a clearly expressed state policy, the Parker exemption

should apply whatever the agency’s bias, interest, motive

or error of law or fact. The exemption should be unavail-

able only when the agency’s acts are “essentially private”

in the sense that the state has not taken a position on the

end to be accomplished by the agency's action if properly

carried out.

Wise and efficient federalism argues against review

by antitrust courts of ordinary state agency errors.

The Lafayette authorization requirement should not

be manipulated to thwart the fundamental Parker pol-

icy against antitrust scrutiny of state action. The anti-

trust court should require only that the result of the

agency’s act or decision be of the sort contemplated

by state anticompetitive policy. “Ordinary” errors or

abuses in the administration of powers conferred by

the state should be left for state tribunals to control.

Fn. omitted; Areeda, supra, 95 Harv.L.Rev. at 453; ac-

cord: Llewellyn v. Crothers, ...... F.Supp. ......, 1983-1 Trade

Cas. (CCH) { 65,358, pp. 70,137-70,138 (D.Ore. 1983).

Antitrust review of a claimed abuse of discretion is par-

ticularly inappropriate in this case. Surely, the Arizona

Supreme Court knows best whether its Committee on

Examinations and Admissions went beyond the guidelines

the court had set in its own rules. Under those rules,

Ronwin had the right to review of his failing grade by the

Arizona Supreme Court. Ariz.Sup.Ct.R. 28(¢)(XIT)(C).

He exercised that right, subsequently petitioning this

Court for certiorari to review the Arizona Supreme

Court’s adverse decision. Ronwin v. Committee on Exam-

inations and Admissions, 419 U.S. 967 (1974). It would

certainly be anomalous for a federal district judge or jury

now to decide that the Arizona Supreme Court misinter-

preted its own rules. See Gambrel v. Kentucky Bd. of

Dentistry, supra, 689 F.2d at 619.

In short, to the extent the committee’s state action ex-

emption depends upon the committee’s having acted pursu-

ant to a clearly articulated and affirmatively expressed

state policy, that requirement was met by the Arizona

Supreme Court’s rules which delegate to the committee

the tasks of preparing, administering and grading the bar

examination and which therefore contemplate the kind of

action complained of here; namely, the choice of a par-

ticular method for grading the test.

(2) Though State Agencies Need Not be “Actively

Supervised,” Petitioners Were

In its second aspect, the Midcal test requires that private

parties’ acts be “ ‘actively supervised’ by the State itself” in

order to acquire state action immunity. California Retail

Liquor Dealers Ass’n v. Midcal Aluminum, Inc., swpra, 445

U.S. at 105.

This Court has not yet determined whether state or mu-

nicipal entities must meet this second prong of the Midcal

test. See Community Communications Co. v. City of Boul-

der, supra, 102 S.Ct. at 841 n. 14. Three members of this

Court, id., at 851 n. 6 (Rehnquist, J., dissenting), and most

lower courts have decided that active state supervision of

public entities is not required. Gold Cross Ambulance v.

City of Kansas City, supra, 705 F.2d at 1014-1015; Town of

Hallie v. City of Eau Claire, supra, 700 F.2d at 383-385;

Llewellyn v. Crothers, supra, 1983-1 Trade Cas, (CCH) at

p. 70,136; Hybud Equip. Corp. v. City of Akron, ...... F.Supp.

a , 1983-1 Trade Cas. (CCH) 965,356, pp. 70,123-70,124

(N.D. Ohio, 1983). As one lower court has pointed out, to ask

whether “the state” actively supervises its own agencies is

to ask a meaningless, tautological question. Deak-Perera

Hawaii, Inc. v. Department of Transportation, 553 F.Supp.

976, 988-989 (D. Hawaii 1983) ; compare with Euster v. Eagle

Downs Racing Ass’n., supra, 677 F.2d at 995-996; Benson

v. Arizona State Bd. of Dental Examiners, supra, 673 F.2d

at 275. This Court should now hold that public entities need

not show that they are actively supervised by the state in

order to claim state action immunity.

If applicable, the active state supervision requirement is

met in this case. Like the state bar in Bates v, State Bar of

Arizona, supra, the Committee on Examinations and Admis-

sions’ “role is completely defined by the [Arizona Supreme

Cjourt; the [committee] acts as the agent of the court under

its continuous supervision.” /d., 433 U.S. at 361; Ariz.Sup.

Ct.R. 28(a), (c)(V)-(1X). The committee’s recommenda-

tions regarding the qualifications of applicants for admis-

sion to practice “are subject to pointed re-examination by the

policymaker—the Arizona Supreme Court—in .. . pro-

ceedings” to review an applicant’s failure to receive a

satisfactory grade. /d., at 362; Ariz.Sup.Ct.R. 28(¢) (XII)

(C); see, e.g., Application of Klahr, 102 Ariz. 529, 433 P.2d

977 (1967).

The actions of the Committee on Examinations and Ad-

missions meet the requirements of the Midcal test. The

restraint challenged here is not a private practice mas-

querading under “a gauzy cloak of state involvement.”

Rather, it is a restraint imposed to implement the clearly

articulated state policy of assuring lawyer competence; a

restraint imposed by the committee, an official state agency,

under authority granted by and under the supervision of

the Arizona Supreme Court. It is state action.

3. The Noerr-Pennington Doctrine Shields Petitioners’

Acts

“Joint efforts to influence public officials do not violate

the antitrust laws even though intended to eliminate com-

petition.” United Mine Workers v. Pennington, 381 U.S.

657, 670 (1965); accord: Eastern R.R. Presidents Conf. v.

Noerr Motor Freight, Inc., 365 U.S. 127 (1961). Last term,

this Court reaffirmed that “the right of access to the courts

is an aspect of the First Amendment right to petition the

Government for redress of grievances.” Bill Johnson's Res-

taurants, Inc. v. NLRB, ........ REIN oiahieut , 103 S.Ct. 2161, 2169

(1983). Unless engaged in as a “mere sham” for harass-

ment purposes, acts initiating judicial proceedings are not

prohibited by the antitrust laws. /bid.; California Motor

Transport Co. v. Trucking Unlimited, 404 U.S. 508, 510-511

(1972).

Like numerous other advisory boards,” the sole function

of the Arizona Committee on Examinations and Admissions

is to recommend to a state governmental entity—in this

case, the Arizona Supreme Court—the action it should take.

Arizona Supreme Court Rule 28(a) provides that the com-

mittee shall examine applicants and recommend those it

If this Court concludes that Ronwin’s action is barred because

it seeks collateral review of final judicial action by the Arizona

Supreme Court, see pp. 12-14, supra, or because the state action

exemption applies, see pp. 14-27, supra, it will be unnecessary to

reach the issue of the Noerr-Pennington doctrine’s application to

the committee’s recommendations. Nevertheless, the issue is one of

broad application and general importance. Like the federal govern-

ment, see H.R. Rep. No. 1017, 94th Cong., 2d Sess. (1972), re-

printed in the 1972 U.S. Code, Cong. & Ad. News 3491, state gov-

ernments rely on a wide array of advisory boards, committees and

commissions, often composed of members of an affected industry,

to provide information, recommendations and advice. Subjecting

the recommendations of such advisory groups to antitrust scrutiny

would gravely impair this necessary channel ot information to state

government.

finds qualified to the supreme court for admission to prac-

tice. “The [Arizona Supreme C]ourt will then consider the

recommendations and either grant or deny admission.”

Ariz.Sup.Ct.R. 28(a).

The supreme court considers the committee’s recommen-

dations de novo, recognizing that “the admission to the

practice of law is a judicial function [citation] [and] this

court may, in the exercise of its inherent powers, admit to

the practice of law with or without favorable action by the

Committee. [Citations.].” Application of Courtney, 83 Ariz.

231, 319 P.2d 991, 993 (1957) ; accord: Application of Klahr,

supra, 433 P.2d at 979.

On its own, the committee could not and did not nrevent

Ronwin from practicing law in Arizona. At worst, the

result of its allegedly improper grading method was simply

an incorrect recommendation, a recommendation that the

supreme court deny Ronwin admission to practice. Whether

or not motivated by anticompetitive purposes, that recom-

mendation is just the sort of effort to influence official action

which the Noerr-Pennington doctrine immunizes. See New

Motor Vehicle Bd. v. Orrin W. Fox Co., supra, 439 U.S.

at 110.

CONCLUSION

Insofar as it reinstated the complaint against petitioners,

the judgment of the court of appeals should be reversed.

Dated: August 15, 1983.

Respectfully submitted,

Kurt W. MELCHIOR

One Embarcadero Center,

25th Floor

San Francisco, CA 94111]

(415) 398-3344

Attorney for Amicus Curiae

National Conference of

Bar Examiners

Of Counsel:

ALLAN ASHMAN

333 North Michigan Avenue,

Suite 1025

Chicago, IL 60601

— E. Hott-Harais, Jr.

Grarr, Foy, Conway,

Hoxt-Harris & MEALEY

90 State Street

Albany, NY 12207

Jan T. Cutcton

SEVERSON, WERSON, BeEnkE

& MELCHIOR

A Professional Corporation

One Embarcadero Center

25th Floor

San Francisco, CA 94111

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