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Group Boycotts

Collusive group boycotts: agreement among competitors to coerce a lower price from supplier or a higher price from purchaser

  • Conduct involves coercive demands but is economically no different than price fixing
  • Examples:
    • Boycotting firms collectively refuse to purchase unless suppliers agree to sell at a depressed price
    • Boycotting firms collectively refuse to sell unless customers pay a higher price

Caselaw:​

FTC v. SCTLA (1990) (collusive group boycott, direct effect)​

  • SCOTUS Holding: SCTLA boycott is illegal per se
    • Agreed with FTC in the holding and ALJ in the rejection of counterarguments
    • On Noerr: you can petition, but actions here amounted to coercion (withdrew services to get a higher wage instead of just asking for higher wage), which isn't protected
    • On Claiborne: the boycott yields an economic benefit to the lawyers, not the case in Claiborne
      • Note: lawyers could argue that like the P in Claiborne, they are effectuating the 6th Amendment right to counsel for their clients
    • On O'Brien: Don't want to have to weigh 1st Amendment issues in every case (weak argument)
  • Circuit Holding: remands to determine whether SCTLA had market power
    • There is an element of expression that needs to be protected under the 1st Amendment (O'Brien, protected burning of draft card on courthouse steps), so per se is not appropriate (rule of reason is necessary)
  • FTC Holding: SCTLA conduct was coercive, concerted refusal to deal with the purpose and effect of raising prices and thus illegal per se (lawyers can't do this)
  • ALJ Holding: complaint dismissed, boycott had beneficial effects (given Dist. Ct. didn't complain)
    • ALJ rejects arguments that (1) there is public interest in better legal representation, (2) any group can petition the legislature per Noerr, and (3) this is an example of protected political action per Claiborne (black consumers boycott white-owned businesses not participating in civil rights, protected under the First Amendment)
  • Facts: Criminal Justice Act lawyers (independent contractors) collectively refuse to accept new assignments, bill passes increasing their fees, FTC files complaint (illegal agreement to refuse assignments). Since lawyers weren't state employees, the Norris-LaGuardia Act didn't exempt them as employees engaged in a labor dispute
  • Note: each court takes a different approach for how to deal with cases like this
    • Tough case, but a group refusing to do a service unless they receive a particular fee is an agreement between competitors to fix a price and is per se illegal

Catalano​

  • Wholesalers agree not to extend credit to retailers (collusive group boycott, direct effect)

JTC Petroleum​

  • Asphalt producers boycotted applicators competing with the cartel (exclusionary group boycott, indirect effect)