Before a plot can violate the federal antitrust laws, it must involve interstate commerce. The courts have been split about just how much it has to involve interstate commerce, but the most recent decision makes it seem that the narrower view of the controversy will win out.
That is not a particularly narrow interpretation, since the U.S. Supreme Court almost 30 years ago said that the business under scrutiny did not have to actually involve making goods in one state and shipping them to another, as long as the economic activity "affects" interstate commerce. But the jurists are still not sure what it is that has to affect interstate commerce--the whole operation, or just the part allegedly involved in fixing prices or otherwise unlawfully curbing competition.
It's an important distinction in attacks on businesses that are primarily local, such as hospitals or real estate brokers or insurance agencies. Since the policies an agency sells and services are virtually certain to include some from out-of-state companies, its operations affect interstate commerce, even if all its customers live within a 10-mile radius of its office. But if the agency is being sued for taking part in an agreement not to hire secretaries from a placement agency that encourages job seekers to ask for higher wages, that alleged conspiracy may in fact not have any appreciable impact on the economy of any other state.
If the insurance agency is in Alaska or Arizona or California, it doesn't matter. The U.S. Court of appeals that covers the Western states has told plaintiffs that they can invoke federal antitrust laws against any business that in any of its activities affects interstate commerce, even if the activity has nothing to do with the alleged violation.
But the Courts of Appeals in Denver and Boston have taken the opposite viewpoint. And now the influential Court of Appeals in New York (in Furlong v. Long Island College Hospital) has joined their camp. It begins to look as though that argument--that the activity at the heart of the antitrust complaint must in itself affect interstate commerce--is the one that will prevail.
The New York court agreed that a trial judge was right in throwing out a case by an anesthesiologist who says she was frozen out of her hospital position by a group practice that wanted to control prices. Although the group buys supplies from out-of-state and gets insurance payments in interstate commerce, the judges could see no way that trade would be affected by the alleged conspiracy against an individual MD. It is the "unlawful conduct" itself that has to influence interstate commerce for the federal antitrust laws to apply, Chief Judge Wilfred Feinberg ruled.
In other cases, courts ruled that:
* Suicides can sometimes bring workers' compensation payments. Generally speaking, workers cannot collect the payments for injuries they inflict on themselves. But the West Virginia Supreme Court of Appeals recently opened up a loophole in that rule, and told a widow that she could go forward with her claim arising from the suicide of her husband, a coke plant worker suffering from occupational pneumoconiosis. To collect, the justices explained, she will have to show that her husband suffered from an illness (or, in other cases, an injury) of the sort that normally would be covered by workers' compensation, that the illness so upset him that he lost his normal rational judgment, and that the suicide resulted from that disordered mental condition.
Law firms cannot get a tax deduction for the cost of lunches at regular noontime meetings of partners and associates. The U.S. Tax Court refused to let a firm call the meals a business expense, which would have stuck Uncle Sam with part of the tab, through the tax deduction. If the lawyers got their way, "only the unimaginative would dine at their own expense," Judge Richard C. Wilbur reasoned. He admitted that the firm benefitted from the daily lunch meetings, where assignments were coordinated and caseloads balanced, but insisted that that was no reason for the cost of the food to be anything but a personal expense. The firm also benefited when a lawyer spent the lunch hour reading a law treatise while munching on a sandwich, but that doesn't make the sandwich a business expense, Wilbur explained.
* Companies risk making secret data public when they ask the Justice Department to revise old antitrust consent decrees. Antitrust chief William F. Baxter has made a modernization of such decrees a major goal of his administration; some still on the books reflect business conditions of more than a half century ago rather than today. But the U.S. District Court here recently erected a potential roadblock to that plan. Judge Thomas F. Hogan told Justice to turn over to a group of consumer activists a lot of the documents involved in the easing of the 1969 restrictions on automobile companies getting together to work on antipollution technology, including a lot of internal data turned over by the companies to the government. The antitrusters had argued that revealing such confidences would make it harder to work out consent settlements in the future, but Hogan ruled that the Freedom of Information Act demanded the disclosure, and that there was no basis in the law to base a decision on worries about how it would affect other bases.
* A federal court ruled that it can be illegal sex discrimination to set a minimum experience requirement in hiring. The U.S. District Court in Atlanta told a trucking line it was wrong in insisting that all of its over-the-road drivers have at least a year's previous experience in similar jobs, because the criterion eliminated more female applicants than male. The court said the company had to do something to remedy the fact that it had such a low percentage of women drivers, and that eliminating the experience requirement might help. The decision gave little credance to the truckers' argument that the experience requirement cut accidents and therefore insurance costs, but suggested that it could set up a training program to compensate for women's lack of experience in pushing the big rigs over the highways.
* Federal contracting officers can't reject low bids without giving the companies involved written notice of why--and a chance to argue their case. The U.S. Claims Court told a contracting officer that he was wrong in refusing to deal with a company whose president had previously been a consultant to a firm with a notorious record of poor performance on government contracts. The officer deemed the bidder "nonresponsible," but the Claims Court said that, in essence, the company was being barred from bidding on a government job, and acquisition regulations in that case require that the company be given the specific reasons for the debarment and an opportunity to rebut the case against it.