Concluding that Congress never intended to give sweeping exemptions from the antitrust laws to "learned professions," the Supreme Court two years invalidated fee schedules set by the Virginia State Bar for legal services as "a classic illustration of price fixing."
Now the court has agreed to decide whether the Sherman Act is violated by the comprehensive ban on competitive price bidding for engineering services, promulgated and enforced by the National Society of professional Engineers.
The ban is contained in the society's Code of Ethics, which declares it improper for an engineer to solicit work with price bidding. Instead, in consultation with a prospective client he must make analyses to determine specifically what needs to be done. Only then can be propose a price, the code says.
"Fee bids by engineers, in addition to being not comparable, misleading to the client, a form of bait-and-switch deception, false advertising and a sham, jeopardize the public safety," the society contends.
Disagreeing, the Justice Department's antitrust division argues that the ban lets consulting engineers - who account for about 12,000 of the society's 69,000 members - rig prices.
The department which challenged the ban in a 1972 lawsuit, cites a bit of advice the society once gave its members: Adherence to the ban protects higher fees.
To show the advice was sound the department told of the time in 1971 when the Tri-State Airport Authority in Huntington, W.Va., needed to extend a runway. An engineering firm following traditional bidding methods wanted to charge $500,000. The authority believing the price too high, sought competitive bids and got them from three firms. The job was done for $300,000.
Last March, the U.S. Court of Appeals here, upholding the department and trial Judge Lewis Smith, Jr., ruled "that the rationalization offered by the society does not justify the broad ban on all competitive bidding which the society has attempted to enforce."
For the society, Lee Loevinger, who headed the antitrust division in the Kennedy administration, asked the Supreme Court to review the ruling Contrary to the appellate court opinion, the ban "applies only to work which immediately affects public safety." Loevinger said.
For the Justice Department, Solocotor General Wade H. McCree said the decision should stand, emphasizing Judge Smith's unchallenged findingsthat the ban, while not setting prices at a uniform level resticts "the free play of market forces from determining price."
On Monday, the Supreme Court granted the society's petition that it hear arguments in the case.
Among other decisions. Amtrak Routes
The Supreme Court blocked an attempt by Amtrak to have a federal judge in Indiania order trustees of the bankrupt Penn Central Transportation Co. to start work on rehabilitating 360 miles of track between Chicago and Indianapolis. Cincinnati and Louisville.
Amtrak won an arbitration award against Pennsy and a judgement has been entered in favor of the national rail passenger firm, which had had to reroute two trains away from Indianapolis since 1974 because of unsafe track. The Track work is estimated by Amtrak to cost $22 million.
In approaching the court in Indiana, Amtrak apparently hoped to speed up the process. Now, Amtrak will have to stand in line in bankruptcy court at Philadephia with other creditors of the former rail firm. The end result could be a long delay in resumption of significant passenger service by rail to Indianapolis. W.T.Grant Co.
The Supreme Court declined to review a lower court decision that the retail firm of W.T. Grant, prior to bankruptcy proceedings, had not paid $84 million in income taxes due the federal government. If the trustee for Grant must pay the Internal Revenue Service tax claim, there may be no funds left for distribution to some 15,000 unsecured creditors of the detunct retailer.
Grant and the IRS have battled since 1972 over the government's claim, which is related to sales of books with coupons that could be exchanged for mechandise. The IRS said income from the coupons could not qualify for installment sales and could not be deferred under income tax laws.