Massachusetts School of Law at Andover, Inc. v. American Bar Ass'n , 107 F.3d 1026 ( 1997 )

Opinions of the United
1997 Decisions States Court of Appeals
for the Third Circuit
2-28-1997
MA Sch of Law v. Amer Bar Assn
Precedential or Non-Precedential:
Docket 96-1792
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UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 96-1792
MASSACHUSETTS SCHOOL OF LAW AT ANDOVER, INC.
v.
AMERICAN BAR ASSOCIATION; LAW SCHOOL ADMISSION
SERVICES, INC.; LAW SCHOOL ADMISSION COUNCIL;
THE ASSOCIATION OF AMERICAN LAW SCHOOLS, INC.;
JAMES P. WHITE; NINA APPEL; JOSE R. GARCIA-PEDROSA;
LAURA N. GASAWAY; FREDERICK M. HART; RUDOLPH C. HASL;
CARL C. MONK; R. W. NAHSTOLL; HENRY RAMSEY, JR.;
NORMAN REDLICH; JOHN E. RYAN; GORDON D. SCHABER;
PAULINE SCHNEIDER; STEVEN R. SMITH; CLAUDE R. SOWLE;
ROBERT A. STEIN; RENNARD STRICKLAND; ROY T. STUCKEY;
LEIGH H. TAYLOR; FRANK K. WALWER; SHARP WHITMORE;
PETER A. WINOGRAD
Massachusetts School of
Law at Andover, Inc.
("MSL"),
Appellant
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civ. No. 93-06206)
Argued December 10, 1996
BEFORE: BECKER, MANSMANN, and GREENBERG, Circuit Judges
(Filed: February 28, 1997)
Michael M. Baylson (argued)
Elise E. Singer
Edward G. Beister, III
Melissa H. Maxman
Duane, Morris & Heckscher
4200 One Liberty Place
Philadelphia, PA 19103-7396
Lawrence R. Velvel (argued)
Michael L. Coyne
Constance L. Rudnick
1
Peter M. Malaguti
Massachusetts School of Law at
Andover
500 Federal Street
Andover, MA 01810
Attorneys for Appellant
David T. Pritikin (argued)
Jeffrey H. Dean
David R. Stewart
Sidley & Austin
One First National Plaza
Chicago, IL 60603
Barbara W. Mather
L. Suzanne Forbis
Pepper, Hamilton & Scheetz
18th & Arch Streets
3000 Two Logan Square
Philadelphia, PA 19103-2799
Attorneys for Appellees
American Bar Association
James P. White, Nina
Appel, Jose R. Garcia-
Pedrosa, R.W. Nahstoll,
Henry Ramsey, Jr., Norman
Redlich, John E. Ryan,
Gordon D. Schaber,
Pauline Schneider,
Steven R. Smith, Claude
R. Sowle, Robert A.
Stein, Rennard
Strickland, Roy T.
Stucky, Leigh H.
Taylor, Frank K. Walwer,
Sharp, Whitmore, and
Peter A. Winograd
Mark P. Edward (argued)
Morgan, Lewis & Bockius
2000 One Logan Square
Philadelphia, PA 19103
Attorneys for Appellees
Law School Admission
Services, Inc. and Law
2
School Admission Council
Robert A. Burgoyne
(argued)
Stephen M. McNabb
Fulbright & Jaworski
801 Pennsylvania Avenue,
N.W.
Washington, DC 20004
Attorneys for Appellees
The Association of
American Law Schools,
Inc. and Carl C. Monk
Joel I. Klein
Acting Assistant Attorney
General
A. Douglas Melamed
Deputy Assistant Attorney
General
Catherine G. O'Sullivan
Andrea Limmer
Marion L. Jetton
Attorneys
Department of Justice
950 Pennsylvania Ave. N.W.
Washington, D.C. 20530-0001
Attorneys for United
States as Amicus Curiae
OPINION OF THE COURT
GREENBERG, Circuit Judge.
This case is before this court on appeal from an order
of the district court granting summary judgment on all counts to
the appellees in this antitrust action brought against them by
3
the Massachusetts School of Law at Andover, Inc. (“MSL”). The
district court had jurisdiction under 28 U.S.C. §§ 1331 and 1337,
and this Court has jurisdiction under 28 U.S.C. § 1291. This
appeal principally presents a number of questions regarding the
scope of immunities from the antitrust laws and related antitrust
discovery issues. An examination of the parties and conduct in
question is first necessary.
I. FACTUAL AND PROCEDURAL HISTORY
A. The Parties
MSL has been operating a law school in Massachusetts
since 1988. The Board of Regents of Massachusetts authorized MSL
to grant the J.D. degree in 1990. This authority allowed MSL's
graduates to take several bar examinations, including that in
Massachusetts. MSL has the stated policy of providing low-cost
but high quality legal education and attracting mid-life, working
class, and minority students. MSL facilitates this policy with
its admissions procedure and a tuition of $9,000 per year. Many
of MSL's policies and practices conflict with American Bar
Association ("ABA") accreditation standards, and MSL aggressively
has sought changes in those standards.
The ABA, a national professional organization of
attorneys whose membership is open to members of any bar in the
United States, has been concerned with legal education and bar
admissions throughout its history. In 1921, through its Section
of Legal Education and Admissions to the Bar (the “Section”), the
ABA first developed standards of accreditation for legal
4
education programs. The ABA petitioned state supreme courts to
rely on its accreditation decisions in connection with bar
admission decisions. Now, all 50 states and the District of
Columbia consider graduation from an ABA-accredited law school
sufficient for the legal education requirement of bar admission.
App. at 1396-1409. The United States Secretary of Education
considers the Council of the Section to be the national agency
for accreditation of professional schools of law and a reliable
authority concerning the quality of legal education. App. at
3378. The ABA informs the states of its accreditation decisions
and annually sends them the Review of Legal Education in the
United States, the ABA accreditation standards, and any proposed
revisions of the standards. During the period at issue, there
were 177 ABA-accredited law schools in the United States and over
50 unaccredited schools with some form of state approval such as
MSL enjoys. The ABA consistently has opposed attempts to change
or waive bar admission rules to allow graduates of schools not
accredited by the ABA to take the bar examination. See, e.g.,
app. at 3623-53.
Many states have methods of satisfying the legal
education requirement other than graduation from an ABA-
accredited school. These methods include legal apprenticeship,
practice in another state, and graduation from a school approved
by the American Association of Law Schools (“AALS”) or a state
agency. The AALS is an association of 160 law schools which
serves as a learned society for law schools and legal faculty and
as a representative of the law school community with the federal
5
government and other education organizations. Furthermore, in
every state, a bar applicant or law school can petition the bar
admission authority for revision or waiver of the rules. MSL won
a waiver of New Hampshire's rules to allow its graduates to take
the bar in 1995, and has filed petitions seeking similar relief
in Connecticut, Maine, New York, and Rhode Island. Maryland and
Washington, D.C. have granted petitions of graduates of MSL to
take the bar. MSL graduates can take the bar examination
immediately after graduation in California, Massachusetts, New
Hampshire, Vermont and West Virginia, and in 12 other states
after practicing in another state first.
The ABA allows graduates of non-accredited schools to
join the ABA once they are admitted to a bar and does not
prohibit its members from hiring or otherwise dealing with
graduates of such schools. The ABA does not prevent its members
from teaching at non-ABA-accredited schools, but it does not
allow its accredited schools to let students transfer credits
from unaccredited schools or to accept graduates of unaccredited
schools into graduate programs.
ABA accreditation is open to any law school that
applies and meets the ABA standards. The ABA grants provisional
accreditation to schools that substantially comply with its
standards and promise to comply fully within three years. An
Accreditation Committee makes an initial evaluation of a school
for provisional accreditation and gives a recommendation to the
Council of the Section. The Council then makes a recommendation
6
to the ABA House of Delegates, which has the ultimate decision-
making authority.
A law school must have been teaching students for five
years and graduated three classes to be eligible for AALS
membership. The AALS holds an annual meeting, professional
conferences and workshops,1 and publishes the Journal of Legal
Education. All of its current members are ABA-accredited, but
accreditation is neither necessary nor sufficient for membership
approval. The AALS accredits schools in the sense that it
determines whether a school meets its membership requirements,
but it has accreditation standards and procedures separate from
those of the ABA. The AALS conducts a site visit, independently
of the ABA, when a school applies for membership, and it conducts
periodic visits after membership, usually jointly with the ABA if
the school is ABA-accredited. The AALS is not involved with site
inspections for provisional ABA accreditation, such as the one
the ABA undertook at MSL.
The Law School Admissions Council, Inc. (“LSAC”) is the
successor organization to the Law School Admission Council and
Law School Admission Services, Inc. The LSAC, as have its
predecessors, administers the Law School Admissions Test
(“LSAT”). The LSAC is not affiliated formally with either the
ABA or the AALS and does not participate in the ABA accreditation
process. Membership in the LSAC is open to any United States law
1. The AALS does not prohibit non-members from
attending these conferences, and representatives of MSL have
attended them, even though MSL is not a member and never has
applied for membership. App. at 2279-80.
7
school that (1) requires that “substantially all of its
applicants for admission take the Law School Admission Test,” and
(2) is ABA-accredited or an AALS member. App. at 2552. MSL does
not require the LSAT, never has applied for AALS membership, and
is not ABA-accredited, so thus is not eligible for LSAC
membership.
In addition to administering the LSAT, the LSAC
performs a number of other services. The Candidate Referral
Service (“CRS”) provides lists of names and addresses of people
who have taken the LSAT. Use of the CRS is open to any school
which has degree granting authority from a state, regardless of
LSAC membership or ABA accreditation, and MSL has made use of
this service. App. at 2410-12, 2511-12, 2427-29. The Law School
Data Assembly Service (“LSDAS”) provides a summary of a law
school applicant's college record and LSAT score. LSDAS is also
open to all schools and has been used by MSL. App. at 2410-12.
The LSAC publishes a handbook, The Official Guide to U.S. Law
Schools, with a two-page description of each United States LSAC
member school, and two appendices with the names and addresses of
Canadian LSAC members and unaccredited United States law schools,
including MSL, known to the LSAC. The LSAC also sponsors
regional recruiting forums for law school applicants and
conferences of pre-law advisors which are only open to LSAC
members.
B. The Complaint
MSL applied for provisional ABA accreditation during
the fall of 1992 and early 1993. MSL never claimed it was or
8
would be in compliance with ABA standards, but instead asked for
a waiver under Standard 802 which allows the Council to grant
variances from the standards. Following the established process,
a seven-member site evaluation team appointed by and representing
only the ABA visited MSL and then prepared a 76-page report which
was sent to MSL. MSL sent a 90-page response to the site team
report.
The Accreditation Committee, after reviewing the site
report and the MSL materials, and hearing a presentation from six
MSL representatives, recommended denial of MSL's accreditation
application because it did not meet the ABA requirements. The
Committee also recommended denial of the waiver request. In a
letter to MSL explaining its denial recommendation, the Committee
listed 11 areas where MSL failed to comply with ABA standards.
App. at 837-48. These areas included the high student/faculty
ratio, over reliance on part-time faculty, the heavy teaching
load of full-time faculty, the lack of adequate sabbaticals for
faculty, the use of a for-credit bar review class, the failure to
limit the hours students may be employed, and the failure to use
the LSAT or give evidence validating its own admission test.2
App. at 845-46. The body of the letter discussed the inadequacy
of MSL's law library, but the letter did not cite that inadequacy
as one of the reasons for the denial recommendation. App. at
842-43; see app. at 845-46. The letter did not discuss the
2. MSL challenged all these standards, as well as
standards on faculty salaries and law libraries, in its antitrust
complaint.
9
salaries of MSL's faculty. Invoking ABA procedures, MSL appealed
but, after a full review at which MSL had the opportunity to make
a presentation, the denial of accreditation was upheld on
February 8, 1994.
MSL filed this action on November 23, 1993, alleging
that the ABA, AALS, LSAC, and 22 individuals combined and
conspired to organize and enforce a group boycott in violation of
section 1 of the Sherman Act and conspired to monopolize legal
education, law school accreditation, and the licensing of
lawyers, in violation of section 2 of the Sherman Act. 15 U.S.C.
§§ 1-2. The complaint basically alleged that the appellees
conspired to enforce the ABA's anticompetitive accreditation
standards by: (1) fixing the price of faculty salaries; (2)
requiring reduced teaching hours and non-teaching duties; (3)
requiring paid sabbaticals; (4) forcing the hiring of more
professors in order to lower student/faculty ratios; (5) limiting
the use of adjunct professors; (6) prohibiting the use of
required or for-credit bar review courses; (7) forcing schools to
limit the number of hours students could work; (8) prohibiting
ABA-accredited schools from accepting credit transfers from
unaccredited schools and from enrolling graduates of unaccredited
schools in graduate programs; (9) requiring more expensive and
elaborate physical and library facilities; and (10) requiring
schools to use the LSAT.3 MSL alleged that enforcement of these
3. MSL alleges that a self-interested cabal of legal
educators who enforce the allegedly anti-competitive criteria to
their own advantage has "captured" the ABA accreditation process.
10
anticompetitive criteria led to the denial of its application for
provisional accreditation and caused MSL to suffer a “loss of
prestige” and direct economic damage in the form of declining
enrollments4 and tuition revenue.
After MSL filed its complaint, the Antitrust Division
of the United States Department of Justice (“DOJ”) began an
investigation of the ABA's accreditation process and on June 27,
1995, filed suit against the ABA in the United States District
Court for the District of Columbia alleging violations of section
1 of the Sherman Act. The ABA entered into a consent decree with
the DOJ on June 25, 1996, settling that case.
After a period of discovery under Rule of Reason
standards, the district court granted the appellees summary
judgment on both counts. The court held MSL did not suffer a
cognizable antitrust injury; any disadvantage it incurred was
attributable to the decision by the individual states to preclude
graduates of unaccredited schools from taking bar examinations,
and such injury “cannot be the basis for antitrust liability”
under Eastern R.R. Presidents Conference v. Noerr Motor Freight,
Inc., 365 U.S. 127, 81 S. Ct. 523 (1961). Massachusetts School of
Law v. American Bar Ass'n, 937 F. Supp. 435, 441 (E.D. Pa. 1996).
The court also held that to the extent that the unaccredited
status creates a stigma which injures MSL, Noerr precludes
recovery for the injury because it is “incidental to the primary,
4. MSL says that its entering classes are now only 40%
of what they were before the denial of accreditation. MSL br. at
4.
11
protected injury resulting from governmental decisions to
preclude MSL graduates from taking certain bar examinations.”
Id. at 442. In the alternative, the court held that even if the
stigmatic injury were not incidental to Noerr-protected conduct,
the claim still would fail because the ABA has done nothing more
than express its opinion, which is speech protected by the First
Amendment, and not conduct for which there can be antitrust
liability. Id. at 442-46.
MSL appeals from the order for summary judgment and a
number of prior orders related to discovery, the dismissal of the
individual appellees for lack of personal jurisdiction, the
denial of a motion to recuse Judge Ditter, and the
disqualification of MSL's inside counsel. The DOJ has filed an
amicus brief arguing that the district court erred in holding
that any stigmatic injury from non-accredited status was
incidental to a Noerr-protected injury to the extent that there
was no actual petitioning of government in this case. The DOJ
also argues that the district court erred in holding that the
First Amendment immunizes anticompetitive effects brought about
through speech.
II. DISCUSSION
A. Standard of Review
We review a district court order granting summary
judgment de novo both as to factual and legal questions. Mathews
v. Lancaster Gen. Hosp., 87 F.3d 624, 632 (3d Cir. 1996);
Petruzzi's IGA Supermarkets, Inc. v. Darling-Delaware Co., 998
12
F.2d 1224, 1230 (3d Cir. 1993). We review discovery orders under
an abuse of discretion standard. Wisniewski v. Johns-Manville
Corp., 812 F.2d 81, 90 (3d Cir. 1987); Marroquin-Manriquez v.
INS, 699 F.2d 129, 134 (3d Cir. 1983). As germane here, MSL has
to show that the district court's denial of discovery “made it
impossible to obtain crucial evidence, and implicit in such a
showing is proof that more diligent discovery was impossible.”
In re Fine Paper Antitrust Litig., 685 F.2d 810, 818 (3d Cir.
1982) (citation omitted). We review the district court's denial
of the motion for recusal for abuse of discretion. Blanche Road
Corp. v. Bensalem Township, 57 F.3d 253, 265 (3d Cir.), cert.
denied, 116 S. Ct. 303 (1995); United States v. Antar, 53 F.3d
568, 573 (3d Cir. 1995).
B. Discovery Issues
1. Price Fixing
MSL argues that a district court order of May 20, 1994,
which held that the ABA standards were not price fixing and per
se unlawful and that discovery would proceed under a Rule of
Reason analysis, MSL, 853 F. Supp. 837 (E.D. Pa. 1994), is
contrary to law and should be reversed. MSL contends that the
district court held in this order that “the ABA had not fixed
prices,” and that that holding is contrary to settled law. MSL
br. at 40. This argument mischaracterizes the district court's
holding. As the district court correctly noted, ABA Standard
405(a) (considering faculty salaries as part of school's ability
to attract and retain quality faculty) is somewhat vague.
Although not dispositive, the lack of a specific price floor or
13
ceiling suggests that the standard represents something other
than a classic price-fixing arrangement. MSL, 853 F. Supp. at
840. The court, however, did say that the standard was “price-
affecting,” which in many cases is sufficient for a per se
approach. Id. See United States v. Socony-Vacuum Oil Co., 310
U.S. 150, 221-24, 60 S. Ct. 811, 843-46 (1940).
The court properly then went on to consider the context
of the case. In this regard, it is significant that the ABA is a
professional society and the Supreme Court has indicated that it
has “been slow to condemn rules adopted by professional societies
as unreasonable per se,” even when the behavior resembles conduct
usually subject to a per se approach. FTC v. Indiana Fed'n of
Dentists, 476 U.S. 447, 458, 106 S. Ct. 2009, 2018 (1986) (Rule of
Reason approach even though behavior resembled group boycott);
see also National Soc'y of Prof. Eng. v. United States, 435 U.S.
679, 692-94, 98 S. Ct. 1355, 1365-66 (1978) (using Rule of Reason
analysis even though agreement affected prices); Goldfarb v.
Virginia State Bar, 421 U.S. 773, 788 n.17, 95 S. Ct. 2004, 2013
n.17 (1975) (distinguishing between practice of professions and
other business activities); United States v. Brown Univ., 5 F.3d
658, 672 (3d Cir. 1993) (Rule of Reason approach used even though
behavior resembled price fixing).
MSL nevertheless argues that the price fixing aspect of
the ABA standards has infected the entire conspiracy, justifying
a per se approach, and that the Supreme Court has discouraged
finding new exceptions to the per se standard. See FTC v.
Superior Court Trial Lawyers Ass’n, 493 U.S. 411, 428-31, 110
14
S. Ct. 768, 778-79 (1990). We, however, do not apply a new
exception to the per se approach here. Rather, the use of the
Rule of Reason is appropriate here because where “a conspiracy of
this sort is alleged in the context of a profession, the nature
and extent of [the] anticompetitive effect are too uncertain to
be amenable to per se treatment.” Wilk v. American Medical
Ass'n, 719 F.2d 207, 221 (7th Cir. 1983).
MSL also appeals the district court's July 20, 1994
discovery order which held that MSL had not been injured by the
alleged price fixing, and therefore denied discovery as to the
faculty salary standard except insofar as it related to MSL's
accreditation application. MSL, 857 F. Supp. 455 (E.D. Pa.
1994). Contrary to MSL's argument, this order did not hold as a
final matter that the alleged salary fixing had no impact on MSL.
It merely stated that "the evidence presently at hand does not
support MSL's contention that one of the reasons the ABA declined
to accredit MSL was noncompliance with the salary standard[].”
Id. at 458. The court allowed MSL to continue discovery to
ascertain whether salary was a factor in accreditation denial,
but barred broader discovery as to the development and
implementation of that standard.
MSL did find evidence that the ABA had data on its
salaries (collected as part of general fact-finding about the
school) and evidence that the ABA had warned other schools about
low salaries. Nevertheless, MSL is not able to point to any
evidence, or draw a reasonable inference, that the ABA actually
used salary as a factor in denying MSL's accreditation or that
15
the ABA's stated reasons for denying it accreditation were
pretextual. In fact, the evidence and inferences point the other
way, demonstrating that the ABA explicitly states low salaries as
a factor when it is one. Thus, we cannot find that the district
court's limitation of discovery in this manner was an abuse of
discretion.
2. Conspiracy
MSL argues that the district court denied it the
discovery necessary to prove its allegations of conspiracy. MSL
complains generally about the lack of usefulness of the materials
it did receive during discovery, but largely confines its
argument to the materials the ABA turned over to the DOJ, some
544,000 pages. MSL cites a number of cases, including Golden
Quality Ice Cream Co. v. Deerfield Speciality Papers, Inc., 87
F.R.D. 53 (E.D. Pa. 1980), for the proposition that civil
antitrust plaintiffs can obtain discovery of documents produced
for government antitrust cases. Br. at 37. In these cases,
however, the government case had begun before the civil case, and
the civil plaintiffs sought copies of the material given to the
government at the outset of discovery in their cases. See Golden
Quality, 87 F.R.D. at 59.5
In the present case, the government's investigation
began after MSL's, and MSL sought all of the documents given to
5. Further, these cases involved requests to stay the
civil proceedings until the completion of the government
investigation. See, e.g., Golden Quality, 87 F.R.D. at 55. Of
course, we recognize that the government's case against the ABA
was civil but we are using civil to mean a non-governmental case.
16
the government after the court set the confines of discovery in
MSL's case. Thus, the district court held in an order dated
August 6, 1996, that a request for all documents given to the
government was an attempt “to do an end run around” the existing
discovery framework. The court found that MSL could have
obtained all those documents which were relevant through the
existing discovery framework. See Board of Educ. of Evanston
Township v. Admiral Heating and Ventilation, Inc., 513 F. Supp.
600, 603-04 (N.D. Ill. 1981) (denying complete turnover of all
materials collected by grand jury investigation). Given the
context of this case, the court did not abuse its discretion in
this ruling.
MSL also argues that it was not given sufficient
opportunity to conduct discovery to withstand the appellees'
summary judgment motion. MSL cites several cases for the
proposition that granting summary judgment before the opposing
party has had sufficient opportunity for discovery can be
reversible error. See, e.g., Arnold Pontiac-GMC, Inc. v. General
Motors Corp., 786 F.2d 564, 568 (3d Cir. 1986); Mannington Mills,
Inc. v. Congoleum Indus., Inc., 610 F.2d 1059, 1073 (3d Cir.
1979). Br. at 4. These cases are in tension with another line
of cases which encourages the use of summary judgment in order to
avoid burdensome litigation expenses when the allegations are
theoretical or speculative. See, e.g., Pennsylvania ex. rel.
Zimmerman v. Pepsico, Inc., 836 F.2d 173, 182 (3d Cir. 1988);
Pennsylvania Dental Ass'n v. Medical Serv. Ass’n, 745 F.2d 248,
262 (3d Cir. 1984). While the present case fits neither paradigm
17
exactly, the district court, by allowing fairly extensive
discovery and then closing discovery and entertaining the summary
judgment motion, did not abuse its discretion.
C. Summary Judgment
MSL asserts three types of injury resulting from the
ABA's allegedly anticompetitive conduct. The first is that MSL
is at a competitive disadvantage in recruiting students because
graduates of unaccredited schools cannot take the bar examination
in most states. Second, MSL says that denial of accreditation
creates a stigma, independent of the bar examination issue.
Finally, MSL contends that the ABA's enforcement of its
accreditation standards injures it directly by increasing the
cost of faculty salaries and creating a boycott of unaccredited
schools.
In granting summary judgment to the appellees, the
district court held that they were not subject to antitrust
liability for MSL's principal alleged injury, a competitive
disadvantage in recruiting students, to the extent that the
decisions of the individual states to prohibit graduates of
unaccredited schools from taking their bar examinations caused
the injury. MSL, 937 F. Supp. at 441. The court based this
holding on the principles of Noerr, 365 U.S. 127, 81 S. Ct. 523.
MSL argues on appeal that the Noerr principles do not apply here
because private anti-competitive conduct is immunized only where
it is (1) clearly and affirmatively authorized by state policy,
and (2) actively supervised by the state. California Retail
Liquor Dealers Ass’n v. Midcal Aluminum, Inc., 445 U.S. 97, 105,
18
100 S. Ct. 937, 943 (1980). See also FTC v. Ticor Title Ins. Co.,
504 U.S. 621, 112 S. Ct. 2169 (1992); Patrick v. Burget, 486 U.S.
94, 108 S. Ct. 1658 (1988). The DOJ, in its amicus brief, does
not challenge this aspect of the district court's holding.
In Parker v. Brown the Supreme Court held that the
Sherman Act does not prohibit an anticompetitive restraint
imposed by a state as an act of government. 317 U.S. 341, 352,
63 S. Ct. 307, 314 (1943). The decision in Noerr reaffirmed the
Parker doctrine in stating “where a restraint upon trade or
monopolization is the result of valid governmental action, as
opposed to private action, no violation of the Act can be made
out.” 365 U.S. at 136, 81 S.Ct. at 529. Noerr went on to hold
that any attempt to petition or influence the government to
impose an anticompetitive restraint is immune from antitrust
action.6 Id. Further, even if the anticompetitive restraint
results directly from private action, it is still immune if it is
an “incidental effect” of a legitimate attempt to influence
governmental action. Id. at 143-44, 81 S.Ct. at 533. As the
Supreme Court put it, “Parker and Noerr are complementary
expressions of the principle that the antitrust laws regulate
business, not politics; the former decision protects the States'
acts of governing, and the latter the citizens' participation in
government.” City of Columbia v. Omni Outdoor Advertising, Inc.,
6. Noerr dealt specifically with legislative lobbying,
but its principles were applied to cover attempts to influence
the executive and judicial branches in United Mine Workers v.
Pennington, 381 U.S. 657, 85 S. Ct. 1585 (1965), and California
Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 92 S. Ct.
609 (1972).
19
499 U.S. 365, 383, 111 S. Ct. 1344, 1355 (1991). Thus, the
initial substantive issues on this appeal are whether state or
private conduct caused the injury MSL alleges it suffered because
its graduates could not take the bar examination in most states,
and whether, if MSL suffered an injury as a result of the ABA's
conduct, the injury was an incidental effect of the ABA's attempt
to influence the states with respect to establishing criteria for
bar admission. We will discuss each alleged injury separately.
1. Injury from bar examination requirements
Each state retains the authority to decide what
applicants may take its bar examination and may be admitted to
the bar.7 Accordingly, MSL's argument that the ABA received
“carte-blanche delegated authority to decide who can take bar
exams,” MSL reply br. at 19, is simply wrong. See cases cited
supra note 7. Many, but not all, states consider the
accreditation decisions of the ABA in their legal education
requirement (one of many requirements) for taking the bar
examination. Yet, every state retains the final authority to set
7. See, e.g., Hoover v. Ronwin, 466 U.S. 558, 569, 104
S. Ct. 1989, 1996 (1984) (“Pursuant to the State Constitution the
Arizona Supreme Court has plenary authority to determine
admissions to the bar.”); In re Murphy, 393 A.2d 369, 371 (Pa.
1978) (bar admission “exercised [] exclusively by the Supreme
Court”); In re Hansen, 275 N.W.2d 790, 796 (Minn. 1978) (“We have
not delegated our authority to the ABA but, instead, have simply
made a rational decision to follow the standards of educational
excellence it has developed.”); Potter v. New Jersey Supreme
Court, 403 F. Supp. 1036, 1040 (D.N.J. 1975) (State's adoption of
“the standards of an approving body does not support a conclusion
that such adoption is an abrogation or delegation of the power or
duty to supervise the practice of law in this State pursuant to
the mandate of the State Constitution.”), aff’d, 546 F.2d 418 (3d
Cir. 1976).
20
all the bar admission rules, and individual applicants or law
schools can petition the states for waivers or changes.
To the extent that MSL's alleged injury arises from the
inability of its graduates to take the bar examination in most
states, the injury is the result of state action and thus is
immune from antitrust action under the doctrine of Parker v.
Brown, 317 U.S. at 352, 63 S.Ct. at 314. The ABA does not
decide who can take the bar examinations. Rather, it makes an
accreditation decision which it conveys to the states, but the
states make the decisions as to bar admissions. Without state
action, the ABA's accreditation decisions would not affect state
bar admissions requirements. Because the states are sovereign in
imposing the bar admission requirements, the clear articulation
and active supervision requirements urged by MSL are
inapplicable. See Quinn v. Kent Gen. Hosp., Inc., 617 F. Supp.
1226, 1240 (D. Del. 1985). In short, this case does not involve
a delegation of state authority. To the contrary, the states use
the ABA to assist them in their decision-making processes. Thus,
we have here a government action case.
Our holding is consistent with current antitrust
jurisprudence. The Supreme Court held in a challenge to
Arizona's bar admissions policies that the conduct in question
"was in reality that of the Arizona Supreme Court," and thus
immune under Parker. Hoover v. Ronwin, 466 U.S. 558, 573-74, 104
S. Ct. 1989, 1998 (1984). Further, the Supreme Court has held
that when a state supreme court adopts a state bar rule banning
legal advertising, and retains final enforcement authority over
21
it, Parker immunity applies. Bates v. State Bar of Arizona, 433
U.S. 350, 361, 97 S. Ct. 2691, 2697 (1977) (“The Arizona Supreme
Court is the real party in interest; it adopted the rules, and it
is the ultimate trier of fact and law in the enforcement
process.”). This case is entirely analogous. The states do not
adopt the ABA's accreditation processes, but they do adopt and
give effect to the results.8 Thus, the cases cited by MSL
(Midcal, Patrick, ant Ticor) are inapplicable because they dealt
with situations where private parties were engaging in conduct,
whether price-fixing (Midcal and Ticor) or denying hospital
privileges (Patrick), which led directly to the alleged antitrust
injury. Here, the state action setting the bar examination
requirements led to the alleged injury.9
Our holding is also consistent with several court of
appeals and district court decisions applying the principles of
Noerr. In Lawline v. American Bar Ass’n, 956 F.2d 1378 (7th Cir.
1992), the Court of Appeals for the Seventh Circuit held under
Noerr that the ABA could not be held liable for any antitrust
injury resulting from the Illinois Supreme Court's adoption of
ethical standards developed and promulgated by the ABA. Id. at
8. The Supreme Court opinion in Allied Tube & Conduit
Corp. v. Indian head, Inc, 486 U.S. 492, 108 S. Ct. 1931 (1988),
is also consistent with our holding because it specifically
excluded from consideration any injury resulting from the
adoption of the challenged standards by any government and dealt
only with the independent marketplace effect of the defendant's
conduct. Id. at 500, 108 S.Ct. at 1937.
9. In its reply brief, MSL continues to miss the crucial
point that it is the direct action of the states which causes its
injury and continues to discuss cases where private conduct
caused the alleged antitrust injury. MSL reply br. at 11-15.
22
1383. Similarly, in Sessions Tank Liners, Inc. v. Joor Mfg.,
Inc., 17 F.3d 295, 299 (9th Cir. 1994), the Court of Appeals for
the Ninth Circuit held that a defendant which convinced a private
association to produce a code that was adopted by or relied upon
by a number of municipalities, and that injured the plaintiff,
was immune from antitrust liability because the “injuries for
which [plaintiff] seeks recovery flowed directly from government
action.”10 Id. at 299. These cases cannot be distinguished
effectively from this case.
In another analogous case, an organization that
accredited chiropractic schools was held immune from Sherman Act
liability for denying a school's accreditation because of a
dispute over educational philosophy, when the alleged injury
resulted from state decisions to deny licenses to graduates of
unaccredited schools and from the effects of lobbying in favor of
those state decisions. Sherman College of Straight Chiropractic
v. American Chiropractic Ass’n, 654 F. Supp. 716, 722-23 (N.D.
Ga. 1986), aff'd, 813 F.2d 349 (11th Cir. 1987). See also
Zavaletta v. American Bar Ass'n, 721 F. Supp. 96 (E.D. Va. 1989)
(dismissing suit by students at unaccredited law school because
of Noerr immunity). In these circumstances, MSL's claim that the
ABA's conduct injured it because its graduates cannot take the
bar examination in most states fails.
2. Stigma injury
10. In Sessions, the injury resulted from the denial of
permits, while here the injury is from the prohibition precluding
applicants from taking bar examinations in many states.
23
MSL also alleges that independent of any bar
examination requirements, it was injured by the stigmatic effect
in the market place of the denial of accreditation. MSL claims
that the ABA has conducted a campaign to convey the idea that ABA
accreditation is the sine qua non of quality and that the ABA is
the most, or only, competent organization to judge law schools.
There is enough evidence to create a genuine dispute of material
fact on this issue. See app. at 2105-09, 3570-72. Nevertheless,
the district court ruled that this injury could not form the
basis for antitrust liability because it was “incidental to the
primary, protected injury,” and thus immune under Noerr. MSL,
937 F. Supp. at 442. MSL challenges this holding on the grounds
that there was no petitioning of government here, and therefore
Noerr does not apply. The DOJ as amicus challenges the holding
to the extent it finds petitioning unnecessary for immunity for
stigma injury, but takes no position on whether any petitioning
took place. We hold that there was sufficient petitioning to
invoke Noerr immunity.11
MSL relies extensively on the Supreme Court's decision
in Allied Tube & Conduit Corp. v. Indian Head, Inc, 486 U.S. 492,
11. In its reply brief, MSL seriously misstates the
Noerr doctrine, arguing that only "successful petitioning of
courts to clearly and affirmatively authorize . . . closely
supervise, review and approve" the ABA's conduct would provide
immunity. MSL reply br. at 19. Under Noerr, any solicitation of
government action is immune, whether or not it is successful.
This mischaracterization stems from MSL's continued inability to
recognize that there is state action at issue here, not private
conduct.
24
108 S. Ct. 1931 (1988).12 In Allied Tube, a producer of
electrical conduit sought approval of its product from the
National Fire Protection Association for inclusion of the product
in the Association's National Electrical Code. A substantial
number of state and local governments adopted the code virtually
without change. To be included in the code, all that was
required was a majority vote of the members present at the annual
meeting of the Association. To prevent approval of the
electrical conduit at question in the case, competitors of the
producer stacked the annual meeting with persons who pledged to
vote against approval. On the facts in Allied Tube the Court
held that the code developed by the defendants had a force in the
marketplace independent of any government adoption (or
petitioning for such adoption) in that there was a conspiracy
among manufacturers, distributors, and consumers not to trade in
products not approved by the code. 486 U.S. at 503, 507, 108
S. Ct. at 1938-40. Further, the Court held that the application
of Noerr immunity depends “on the context and nature of the . . .
activity,” and found the challenged conduct to be “the type of
commercial activity that has traditionally had its validity
determined by the antitrust laws.” 486 U.S. at 504-05, 108 S.Ct.
at 1939. That was so, the Court reasoned, because the activity
12. MSL's additional reliance on American Soc'y of
Mechanical Eng’rs, Inc. v. Hydrolevel Corp., 456 U.S. 556, 102
S. Ct. 1935 (1982), is misplaced because that case dealt with
agency and apparent authority issues and does not consider Parker
or Noerr immunity. It also dealt with an attempt to interfere
directly with a company's customers, 456 U.S. at 562, 102 S.Ct.
at 1940, an exception to Noerr inapplicable here.
25
of which the producer complained involved the dubious commercial
practices of economically interested actors that had an impact on
the political process; it was not political activity that had an
impact on commerce.
The conduct of which MSL complains here is basically
the ABA's justification of its accreditation decisions and MSL is
asserting a loss of prestige resulting from it. This conduct is
neither normal commercial activity nor the type of restraint of
trade involved in Allied Tube, and thus that case is not
controlling. A loss of prestige resulting from a refusal to
approve a product or service does not alone make out an antitrust
claim. See Schachar v. American Academy of Ophthalmology, Inc.,
870 F.2d 397, 399 (7th Cir. 1989); Consolidated Metal Prods.,
Inc. v. American Petroleum Inst., 846 F.2d 284, 293 (5th Cir.
1988).
Noerr immunity is proper in this case because the ABA
engaged in petitioning activity, and the stigma injury which MSL
suffered was incidental to that activity.13 MSL admits that in
the past, “from the 1920's to approximately the mid 1970's,” the
ABA petitioned the states in a campaign to prohibit graduates
from unaccredited schools from taking bar examinations. See MSL
br. at 16. This campaign was obviously successful as now most
states require graduation from an ABA-accredited school for
admission to the bar. The ABA's current conduct surely would be
considered petitioning if it took place during the past campaign.
13. There is no “conspiracy” exception to either Noerr
or Parker immunity. Omni, 499 U.S. at 383, 111 S.Ct. at 1355.
26
The fact that the ABA was successful in lobbying the states does
not weaken its position. The ABA continues to communicate its
accreditation decisions to the states, and it desires that they
continue to give them credence. Discussing the quality and
competence of its decisions is a legitimate, although somewhat
indirect, way of petitioning the states to continue to follow its
guidance. Yet, such activity is no more indirect than the public
relations campaign held to be petitioning in Noerr. 365 U.S. at
140-41, 81 S.Ct. at 531.
There is an exception to Noerr immunity that would
apply if the ABA “attempted directly to persuade anyone not to
deal with” MSL. See Noerr, 365 U.S. at 142, 81 S.Ct. at 532.
There is no evidence that the ABA made such an attempt (there was
such evidence in Allied Tube), nor is there any other evidence
suggesting that Noerr immunity should not apply here. In a
supplemental filing of information after oral argument, MSL
produced two instances where it claims the ABA directly mentioned
MSL. The first is a Boston Globe article about the denial of
accreditation to MSL in which an ABA governor defended the ABA
standards as providing “a minimum level of quality and consumer
protection assurance to the public.” John H. Kennedy, “Andover
Law School Loses Appeal for Accreditation,” Boston Globe,
February 9, 1994, at 42. The second proffered piece of evidence
is a transcript of the ABA House of Delegates debate of MSL's
accreditation application, where one member urged the denial of
MSL's application and stated that the standards with which MSL
did not comply “lie at the heart of a quality institution.”
27
Both of these statements do nothing more than defend
the ABA standards. As we discuss above, this is valid, if
indirect, petitioning activity. The ABA is not saying directly
that MSL is a bad institution, or that a particular student
should not go there. MSL's attempts to characterize all the
ABA's comments about the quality of its accreditation process as
direct attacks on MSL does not make them direct attacks. We also
point out that if a claim for stigma injury could be advanced in
circumstances like those here, Noerr immunity would be confined
severely; a petitioner for governmental action is likely to urge
that the action is needed to ensure that standards are met,
thereby suggesting that some entities do not meet appropriate
standards.
3. Direct injury from ABA standards
MSL alleges a third injury which occurs directly from
the ABA's enforcement of its standards, independent of both the
bar examination and stigma issues. The challenged standards
relate to faculty salaries (MSL charges price-fixing) and
limitations on accredited schools accepting transfers or graduate
students from unaccredited schools (MSL charges a boycott).
Although the ABA is immune from liability attributable to the
state action in requiring applicants for the bar examination to
have graduated from an ABA-accredited law school and from any
stigma injury resulting from the denial of accreditation under
the Noerr petitioning doctrine, the ABA is not immune in the
actual enforcement of its standards. The state action relates to
the use of the results of the accreditation process, not the
28
process itself. The process is entirely private conduct which
has not been approved or supervised explicitly by any state. See
Midcal, 445 U.S. 97, 100 S. Ct. 937. Thus, the ABA's enforcement
of an anticompetitive standard which injures MSL would not be
immune from possible antitrust liability. Extending Noerr
immunity to this type of private activity would run counter to
Allied Tube.
We start our analysis of this direct injury issue by
pointing out that “to survive [] motion for summary judgment,
[the plaintiff] must establish that there is a genuine issue of
material fact as to whether [the defendants] entered into an
illegal conspiracy that caused [the plaintiff] to suffer a
cognizable injury.” Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 585-86, 106 S. Ct. 1348, 1355 (1986). The
district court held that MSL did not raise a genuine issue of
fact as to whether it was injured by the salary, transfer or
graduate student standards. MSL, 937 F. Supp. at 441 n.10, 445
n.20.
As we discuss above, MSL failed to show sufficient
evidence that it was denied accreditation because it did not
comply with the salary standard. Therefore, MSL has to show that
the ABA's alleged fixing of salaries at its accredited schools
somehow injured it in another way. At first glance, the argument
that the ABA's faculty salary standards injured MSL makes no
economic sense. As the district court commented, if ABA-
accredited schools are required to pay higher salaries, an
unaccredited school should have a cost advantage. See MSL, 937
29
F. Supp. at 441 n.10. Indeed, it would appear that a conspiracy
to increase the conspirators' costs would be no more logical than
would a conspiracy to reduce the conspirators' income. Cf. Advo,
Inc. v. Philadelphia Newspapers, Inc., 51 F.3d 1191, 1195-1204
(3d Cir. 1995) (discussing predatory pricing monopoly case).
Thus, while we consider this appeal on ordinary summary judgment
standards, we point out that it could be argued that MSL "must
come forward with more persuasive evidence to support [its] claim
than would otherwise be necessary." Matushita, 475 U.S. at 587,
106 S.Ct. at 1356.
MSL alleges that the faculty salary standards injured
it in two ways. First, MSL asserts that it raised its salaries
in an attempt to get accreditation. This claim is in direct
conflict to its consistent assertion that it refused to comply
with the ABA's anticompetitive standards and for that reason was
denied accreditation. See, e.g., MSL br. at 3-4. The claim also
is remarkable because MSL made it clear that it would not comply
with ABA standards to obtain certification. Further, MSL's
assistant dean testified that MSL salaries have “never been tied
to” ABA standards.14 App. at 439. Rather, its dean stated that
the salary increases were made out of fairness and as a reward
for hard work. App. at 393. The only other related evidence
shows that MSL acted independently to increase its salaries, and
then later found that this action might help it get
14. MSL points out that the assistant dean has no role
in setting MSL's salaries, so he is only giving his personal
belief on the issue. MSL reply br. at 30, sup. app. at 5476-79.
30
accreditation. See app. at 828. Unsupported allegations to the
contrary, see app. at 2123, are not sufficient without
explanation to outweigh the prior testimony and avoid summary
judgment. See Hackman v. Valley Fair, 932 F.2d 239, 241 (3d Cir.
1991); Martin v. Merrell Dow Pharm., Inc., 851 F.2d 703, 706 (3d
Cir. 1988); but see Videon Chevrolet, Inc. v. General Motors
Corp., 992 F.2d 482, 488 (3d Cir. 1993) (distinguishing Martin
and holding that statements have to be clearly contradictory and
without explanation to be insufficient to defeat summary judgment
motion). There has not been sufficient explanation of the
contradiction to create a genuine issue of material fact and
justify reversing the summary judgment.
MSL's second contention that the ABA's salary standards
injured it is that the standards inflated the market cost of law
professors, thereby increasing the salaries MSL must pay its
faculty. This market price argument is equally unavailing.
MSL's stated policy was to rely on adjunct faculty. MSL did not
produce evidence that any of its faculty other than its dean ever
had been employed at another law school. In effect, MSL was
hiring faculty from a different market, one unaffected by the
ABA's conduct, or at least a different provider in the same
market (teachers who never taught at ABA-accredited schools).
The report by MSL's economic expert does not contradict this
point, app. at 3568, because it contains only general and
theoretical observations and is not tied to evidence in the
31
record.15 Thus, we can disregard it for the purposes of
reviewing the summary judgment. See Pennsylvania Dental Ass'n v.
Medical Serv. Ass'n, 745 F.2d 248, 262 (3d Cir. 1984). Our
result is supported by MSL's policy towards salaries: “because a
professor at MSL must prove himself or herself as a full-time
faculty member before obtaining a large salary, MSL retained a
level of starting salaries that are below ABA requirements.”
App. at 2123.16
The situation here is analogous to that in Mid-West
Paper Prods. Co. v. Continental Group, Inc., 596 F.2d 573 (3d
Cir. 1979). In that case we held that a purchaser from
competitors of a price-fixer did not have standing to sue the
price-fixer on the grounds that the general market price
increased as a result of the price fixing. Id. at 587. We
explained Mid-West Paper in In re Lower Lake Erie Iron Ore
Antitrust Litig., 998 F.2d 1144, 1167-68 (3d Cir. 1993), where we
focused on how direct an impact the challenged conduct had on the
15. "[A]s I understand it, MSL was forced to raise its
salaries to levels above what it would have otherwise (a) in an
attempt to satisfy the standards and (b) because of the market
effects of the standards on prices in the input markets. The
anticompetitive effects of those practices affect input prices
(salaries, etc.) for MSL, as well for every other law school.
The practices injure all of the schools that have accepted the
standards, as well as those that have not. Because the standards
have an undeniable impact on input costs, every school is forced
to incur higher costs, along with the reduction in the
flexibility needed to respond efficiently to changing conditions,
all schools suffer competitive injury as well." App. at 3568.
16. It is interesting to note that MSL charges that the
ABA and the AALS engaged in a conspiracy to restrain trade. It
thus appears that insofar as the salary standards are concerned,
MSL believes that the AALS conspired to increase its member law
schools' costs.
32
plaintiff. MSL was not impacted directly by the ABA's criteria
because it was hiring a different kind of professor. Mid-West
Paper thus controls, and summary judgment was proper.17
MSL also alleges a boycott in that the ABA prevented
its accredited schools from accepting transfers or graduate
students from unaccredited schools. The district court held that
MSL had not produced any evidence that it was injured by either
of these rules. MSL, 937 F. Supp. at 445 n.20. This holding is
correct. MSL has done nothing more than state the standards and
allege that they injured MSL. See app. at 2108, 2120. There is
no factual support for these allegations. Further, the evidence
shows that MSL actively opposed its students transferring, both
in policy and practice.18 MSL therefore cannot claim that the
ABA's prohibition on transfers with credit injured it.19
17. This is true even though Mid-West Paper dealt with
standing and we deal here with whether there is a genuine issue
of fact as to MSL’s injury, for the concepts are similar.
18. Its dean testified in another proceeding “MSL would
have [] denied admission had it known [a student] intended to
seek transfer away as soon as possible.” App. at 1415. MSL
considered transfers to be “extremely harmful to the school,” id.
at 1416, and that assisting students in transferring was “self-
destructive.” Id. at 1231.
19. MSL's reliance on the allegations in the
government's antitrust case which we described above is
unavailing for two reasons. First, those allegations never were
proven because the case was settled, and therefore cannot be
taken as true in this case. See United States v. Microsoft
Corp., 56 F.3d 1448, 1460-61 (D.C. Cir. 1995); Petruzzi's IGA v.
Darling-Delaware, 998 F.2d at 1247. Second, the government never
alleged that MSL suffered any injury from these standards and
does not so argue in its amicus brief in this case. See, e.g.,
DOJ br. at 6-7.
33
MSL also alleges that the AALS boycotted MSL by
refusing membership and that the LSAC boycotted MSL by refusing
to allow it to attend certain recruiting conferences. See MSL
br. at 59. The allegations regarding the AALS are simply
incorrect. AALS membership is independent of ABA accreditation,
and MSL never has applied for such membership. App. at 2278-80.
Even though it is not a member, MSL can attend AALS conferences
and has done so. Id. at 2280. Therefore MSL has not suffered
any injury at the hands of the AALS.
The LSAC's failure to invite MSL to its conferences
does not constitute a boycott.20 Under the fact-pattern here to
demonstrate a boycott, MSL has to show that these conferences are
an essential facility for recruiting students as there is no
other potential basis for the boycott claim. Such an essential
facility or claim fails whenever a plaintiff (1) cannot show that
the defendant has a monopoly over the alleged essential facility;
(2) the facility cannot be duplicated in a reasonable manner; and
(3) the plaintiff has been denied its use. Ideal Dairy Farms,
Inc. v. John Labatt, Ltd., 90 F.3d 737, 748 (3d Cir. 1996). MSL
has shown only that the LSAC denies it participation. There is
no evidence suggesting that the LSAC has a monopoly over access
to law students or pre-law advisors, or even over recruiting
fairs. The LSAC does not hinder MSL's recruiting in any way, it
20. LSAC conferences are only open to LSAC member
schools. MSL is not a member of the LSAC because it does not use
the LSAT and it is not accredited by either the ABA or the AALS.
34
just does not aid it by allowing MSL to attend its conferences.21
Such activity is not required by the antitrust laws, and its
absence does not constitute antitrust injury.
Further, MSL has not shown that the LSAC injured it.
The LSAC never allowed MSL to attend its conferences and, prior
to ABA accreditation denial, MSL's enrollment exceeded its
projections. App. at 2420-24. It was the denial of
accreditation which caused MSL’s enrollment to decline, and as
discussed above, in light of Parker and Noerr that loss cannot be
the basis for antitrust liability. MSL contends that as long as
it was injured in some way by the overall alleged conspiracy, it
need not show injury from its individual aspects, and cites in
this respect In re Lower Lake Erie Iron Ore Antitrust Litig., 998
F.2d at 1172. Reply br. at 35. While this principle is correct,
it is inapplicable here. In re Lower Lake Erie did not involve
state action or petitioning of government immunity issues. Here,
MSL must show that it was injured in some way by the ABA's
enforcement of its standards, independent of any injury from the
immune state action or petitioning, and as we discuss above, it
has not done so.
Inasmuch as we hold that MSL has failed to demonstrate
an injury for which antitrust liability may lie, we need go no
further to affirm the district court's summary judgment order
with respect to issues beyond those controlled by Parker and
21. Similarly, MSL's claims about getting only a listing
in The Official Guide to U.S. Law Schools fail because there are
many such publications, some of which do describe MSL.
35
Noerr. Thus, we do not consider the district court's alternative
free speech immunity theory. Further, we make no comment on
whether MSL produced sufficient evidence to show the existence of
a conspiracy for two reasons.22 First, the alleged conspiracy
with respect to the injuries from the bar examination
requirements and the stigma from denial of accreditation involved
immunized conduct. See Omni, 499 U.S. at 381-84, 111 S.Ct. at
1354-56. Second, MSL did not demonstrate that it suffered injury
from the conduct not immunized. 15 U.S.C. § 15; see Matsushita,
475 U.S. at 585-86, 106 S.Ct. at 1355; Mathews v. Lancaster Gen.
Hosp., 87 F.3d at 641; see also Sciambra v. Graham News, 892 F.2d
411, 414-15 (5th Cir. 1996); United States Football League v.
National Football League, 842 F.2d 1335, 1377-78 (2d Cir. 1988).
Of course, we hasten to add that we do not hold that if MSL had
been able to demonstrate injury from conduct beyond the scope of
Parker and Noerr antitrust immunity there necessarily would be
liability as we have no need to reach that point.
D. Dismissal of the Individual Appellees
The district court dismissed claims against the 22
individual appellees for lack of personal jurisdiction in the
Eastern District of Pennsylvania in an order on March 11, 1994.
MSL, 846 F. Supp. 374 (E.D. Pa. 1994). The court, upon
reconsideration and after MSL had conducted some discovery, found
on May 31, 1994, that MSL could not “suggest, much less show,
22. We do note, however, that there is no probative
evidence that the AALS or LSAC was involved in any kind of
conspiracy with the ABA.
36
substantial acts in Pennsylvania.” MSL, 853 F. Supp. 843, 845
(E.D. Pa. 1994). MSL challenges the dismissal on the grounds
that it was entered before MSL was allowed to undertake any
discovery as to the appellees' contacts within the district.
Our rule is generally that jurisdictional discovery
should be allowed unless the plaintiff's claim is "clearly
frivolous." Nehemiah v. The Athletics Congress, 765 F.2d 42, 48
(3d Cir. 1985), citing Compagnie des Bauxites de Guinee v.
L’Union Atlantique S.A. D’Assurances, 723 F.2d 357, 362 (3d Cir.
1983). The district court found (at least by implication), and
we agree, that MSL's jurisdictional claims were clearly
frivolous. Our result is in accord with other cases which hold
that a mere unsupported allegation that the defendant “transacts
business” in an area is “clearly frivolous.” See Garshman v.
Universal Resources Holding, Inc., 641 F. Supp. 1359, 1366
(D.N.J. 1986), aff'd on other grounds, 824 F.2d 223 (3d Cir.
1987);23 see also American Centennial Ins. Co. v. Handal, 901 F.
Supp. 892, 899 (D.N.J. 1995). MSL legitimately cannot allege a
nationwide conspiracy and then say, without more evidence, that
such a conspiracy must have effects in Pennsylvania.
Further, jurisdictional discovery generally relates to
corporate defendants and the question of whether they are “doing
business” in the state. See Compagnie Des Bauxites, 723 F.2d at
362 and cases cited therein. Where the defendant is an
23. Garshman was decided on venue grounds, but the
analysis is the same as for personal jurisdiction. Garshman, 641
F. Supp. at 1366.
37
individual, the presumption in favor of discovery is reduced.
See Shaw v. Boyd, 658 F. Supp. 89, 91 n.1 (E.D. Pa. 1987). Thus,
the district court's order dismissing the individual appellees
without ordering discovery first was correct.24
E. Recusal of Judge Ditter
MSL made several attempts to have Judge Ditter recused.
Judge Ditter denied MSL's recusal motion in an opinion dated
December 16, 1994. MSL, 872 F. Supp. 1346 (E.D. Pa. 1994).
MSL's attempts to seek his recusal in this court were also
unavailing (one denied, one held moot in light of this appeal).
Inasmuch as we are affirming the summary judgment, we need not
consider arguments regarding reassignment on remand. We review
the denial of the recusal motion for abuse of discretion.
MSL argues that Judge Ditter has both the appearance of
bias and actual bias, and should be removed from the case under
either 28 U.S.C. § 455(a) or this court's authority as recognized
in Alexander v. Primerica Holdings, Inc., 10 F.3d 155, 167 (3d
Cir. 1993), and Haines v. Liggett Group, Inc., 975 F.2d 81, 98
(3d Cir. 1992). The standard for recusal is whether an objective
observer reasonably might question the judge's impartiality. MSL
contends that both one past out-of-court experience, and the bias
which it asserts is apparent from his rulings, justify Judge
Ditter's recusal.
24. We note that in view of our merits disposition we
can conceive of no way that the individual appellees could be
liable in this case.
38
MSL argues that Judge Ditter's participation in 1974-75
on an outside committee which tried to help the Delaware Law
School, where his son was then a student, obtain ABA
accreditation justifies recusal. In over 200 pages of documents
submitted by MSL relating to Delaware Law School (gleaned from
depositions and testimony before several courts), Judge Ditter's
name appears only six times. This evidence suggests nothing more
than that Judge Ditter had several meetings with the person who
was the driving force behind the effort to make changes at
Delaware Law School in order to qualify for accreditation. There
is one affidavit from the former dean of that school that
suggests that Judge Ditter played a more active role, but Judge
Ditter, in his careful consideration of the recusal motion,
sufficiently points out the inconsistencies between this
declaration and other more contemporaneous testimony. See MSL,
872 F. Supp. 1346, 1358-65 (E.D. Pa. 1994). We thus affirm Judge
Ditter's holding that nothing related to Delaware Law School
creates an appearance of bias in this case. This is true both
because of Judge Ditter's limited role at the time and the amount
of time which has passed. This view is in accord with the
prevailing case law. See, e.g., In re Allied Signal, Inc., 891
F.2d 974, 976 (1st Cir. 1989) (upholding denial of recusal motion
based on social and business relationship eight years earlier
between judge and one of plaintiff's attorneys); Alexander v.
Chicago Park Dist., 773 F.2d 850, 857 (7th Cir. 1985) (denying
recusal motion based on judge's representation of witness 25
years earlier).
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Furthermore, we do not understand why Judge Ditter's
participation in the Delaware Law School accreditation process,
no matter how intensive, would cause an objective observer to
believe that he would not be impartial here. The Delaware Law
School and MSL situations, though somewhat similar in nature, are
unrelated. Indeed, it is difficult even to articulate a
reasonable basis on which to argue that by reason of Judge
Ditter's experiences regarding the Delaware Law School he would
have a bias here. As far as we can see, there is no more basis
to think that Judge Ditter was not impartial here because of his
experiences 20 years ago with Delaware Law School, than to
believe that a judge who had been in an automobile accident would
not be impartial in a case involving a different accident.
MSL also argues that Judge Ditter's rulings, both in
substance (allegedly always against MSL) and in form (allegedly
repeatedly vilifying and condemning MSL and its dean),
demonstrate actual bias. Since we have affirmed several of the
rulings MSL contends demonstrate bias, and a review of the record
shows that there was no pattern of consistently ruling against
MSL, there is no actual bias.
We also point out that a judge's consistent pattern of
ruling against a party could be entirely justified for that party
might consistently be taking positions that cannot be supported.
Even-handed justice does not require a judge to balance
numerically the rulings in favor of and against each party.
After all, each ruling stands on its own. Furthermore, the
Supreme Court has said that “judicial rulings alone almost never
40
constitute a valid basis for a bias or partiality motion.”
Liteky v. United States, 510 U.S. 540, 555, 114 S. Ct. 1147, 1157
(1994).25 We do not believe that a reasonable person who looked
at Judge Ditter's rulings objectively would find the appearance
of bias. See United States v. Bertoli, 40 F.3d 1384, 1413 (3d
Cir. 1994). It should be apparent to anyone that he worked
diligently in this hard-fought case and, as far as we are
concerned, reached the correct outcome.
We also do not find that any of Judge Ditter's comments
cited by MSL, see MSL br. at 23-25, suggest the appearance of
partiality. The Liteky Court held that “judicial remarks during
the course of a trial that are critical or disapproving of, or
even hostile to, counsel, the parties, or their cases, ordinarily
do not support a bias or partiality challenge.” 510 U.S. at 555,
114 S.Ct. at 1157; see also In re Skobinsky, 167 B.R. 45, 52
(E.D. Pa. 1994). MSL's desire to impute hostile intent to Judge
Ditter does not mean he had that intent, and does not create an
appearance of bias. MSL's attitude appears to be that anyone who
disagrees with it is both wrong and biased, but the evidence does
not show this. The cases cited by MSL are inapplicable because
they dealt with unique extrajudicial contact with a party, In re
Sch. Asbestos Litig., 977 F.2d 764 (3d Cir. 1992), an implicit
admission of bias by the judge, In re Antar, 71 F.3d 97, 101 (3d
Cir. 1995), or reassignment on remand, Haines and Alexander.
Since this case will not be remanded, we need not consider
25. The holding in Liteky required bias to stem from an
“extrajudicial source” to support a recusal under section 455(a).
41
reassignment and, as we discussed, Judge Ditter's denial of the
recusal motion was not an abuse of discretion.
F. Disqualification of Inside Counsel
MSL also appeals the district court's disqualification
of five members of MSL’s administration and faculty from serving
as trial counsel, giving oral argument, and taking depositions.26
Since MSL does not allege that it received incompetent counsel,
and we are affirming the summary judgment order, the issue
probably is moot. In any event, the court did not err in
requiring the disqualification.
III. CONCLUSION
The order of the district court entered August 29,
1996, granting the appellees summary judgment and the other
orders on appeal will be affirmed.
26. By agreement among the parties, this order later was
modified to allow two of the MSL professors to act as trial
counsel. MSL br. at 29 n.12.
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