October 05, 2011

Summary of the Testimony of Janet L. McDavid - Center for Professional Responsibility

Summary of the Testimony of Janet L. McDavid

Before the Multidisciplinary Practice Commission

Janet L. McDavid, Chair-elect of the ABA Section of Antitrust and a partner at Hogan and Hartson in Washington D.C., next spoke to the Commission. She said the antitrust laws apply to lawyers; the ‘learned professions’ enjoy no exemption from the Sherman and Federal Trade Commission Act. The public service aspect of the legal profession’s ethical restraints may, however, afford them deferential treatment under a rule of reason inquiry. In urging the Commission to conduct its activities in a manner that minimizes potential antitrust exposure, Ms. McDavid referenced two exemptions - Noerr-Pennington Doctrine and State Action Doctrine - that could protect the Commission and the ABA from antitrust liability if the Commission’s activities are limited to petitioning appropriate state governmental bodies with authority to regulate lawyers’ conduct to promulgate desired rules or regulations and taking action under the authority of those state enforced rules or regulations. That is, efforts of competitors to solicit government action (i.e. urging adoption of ethical norms) is protected conduct and activity authorized by the state (i.e. applying lawyer admission criteria) is not the basis for antitrust liability.

During questioning Ms. McDavid cautioned that regulators from the professional units of the Justice Department Antitrust Division and the Federal Trade Commission were very possibly monitoring the Commission’s activity. She cited to National Society of Professional Engineers v. United States (435 U.S. 679, 692, 1978) to emphasize as well-established that the rule of reason focuses on a restraint’s competitive effects and the rule explicitly will not evaluate whether a restraint is otherwise in the public or the client’s interest (in other words being motivated by public interest counts for naught). She responded to the Chair that ‘group boycott’ or agreement among competitors, typically challenged under Section 1 of the Sherman Act, is collective action or agreement that is per se illegal.