A Federal Trade Commission administrative law judge has dismissed a controversial antitrust suit that the agency filed last year against a D.C. lawyers' group that represents poor people.

In the FTC's first antitrust case ever filed against lawyers, the agency's commissioners had voted 3 to 1 last December to sue the 100-member Superior Court Trial Lawyers Assocation on the grounds that the group's strike for higher fees last year constituted an "illegal conspiracy" against the D.C. government.

But FTC Judge Morton Needelman, in a 95-page opinion released yesterday, said the suit was not worth the agency's effort, particularly because the group's goal of higher pay for the lawyers was seen as "fully merited" by D.C. Mayor Marion Barry and other city officials.

"I see no point in striving resolutely for an antitrust triumph in this sensitive area when this particular case can be disposed of on a more pragmatic basis -- there was no harm done," Needelman said.

Needelman's decision does not end the matter, however. Timothy Muris, director of the FTC's bureau of competition, sharply criticized the decision, noting that Needelman had agreed with the staff's argument that the strike had "disrupted" the D.C. court system. "We believe that a clear violation of the antitrust law exists and [we] will appeal," Muris said.

The staff's decision to appeal brings the case right back to the agency's commissioners, who voted the antitrust complaint out in the first place. Although the commissioners have the authority to overrule Needelman, an FTC official noted that most administrative law judge opinions are upheld.

In filing the case, the FTC staff made clear that it was not seeking any financial penalties against the group, but rather a precedent-setting injunction that would bar similar job actions by the D.C. lawyers or other lawyers' groups in the future.

Karen Koskoff, president of the D.C. lawyers group, said the association was "obviously happy" about Needelman's decision. "The FTC was created to protect consumers and go after big businesses that engage in monopolies -- not after lawyers who represent poor people," she said.

The trial lawyers group, whose members represent more than 90 percent of the indigent defendants charged with crimes in D.C. Superior Court, had struck Sept. 6, 1983, protesting that they were being forced to handle too many cases for too little pay. Their compensation of $30 an hour for court appearances and $20 for work in their offices had not been raised in 13 years, and was a fraction of the fees collected by prestigious, uptown law firms.

After court officials warned that conditions at the court were reaching a "crisis point," Mayor Barry and the City Council found $4.1 million in the city budget to raise the lawyers' wages to $35 an hour for work in or out of court.

The lawyers had argued before the FTC that their job action should be exempt from the antitrust laws because it was primarily a political exercise aimed at improving the level of legal services for the poor and therefore was covered by the First Amendment. In his opinion, Needelman rejected this argument, citing the "actual mixed motivation" of the lawyers.

But he said this was outweighed by the fact that the alleged injured party -- the city government -- did not quarrel with the goal of raising legal fees, and only objected at first on budgetary grounds. "If the city had not been so supportive of the boycotters' demands, . . . I have little doubt that an order would be appropriate," Needelman wrote.