Fred Hass v. Oregon State Bar

883 F.2d 1453 58 USLW 2166 , 1989-2 Trade Cases 68,732 Fred HASS, Plaintiff-Appellant, v. OREGON STATE BAR, Defendant-Appellee. No. 87-3996. United States Court of Appeals, Ninth Circuit. Argued and Submitted July 12, 1988. Decided Aug. 30, 1989. Michael H. Bloom, Portland, Or., for plaintiff-appellant. Susan K. Eggum, Portland, Or., for defendant-appellee. Appeal from the United States District Court for the District of Oregon. Before GOODWIN, Chief Judge, ALARCON and FERGUSON, Circuit Judges. ALARCON, Circuit Judge: I. INTRODUCTION 1 Defendant-Appellee Oregon State Bar (Bar) passed a resolution requiring all active Oregon-based attorneys to purchase primary malpractice insurance from the Bar. Plaintiff-Appellant Fred Hass (Hass), a member in good standing of the Bar, contends that the Bar's insurance requirement violates both the Sherman Antitrust Act, 15 U.S.C. Secs. 1 , 2 (1982) and the commerce clause, U.S. Const. art. I, Sec. 8, cl. 3. The following issues are presented: (1) whether the Bar's insurance requirement is immune from challenge under the Sherman Act by virtue of the state action exemption or by virtue of the exemption for the business of insurance contained in the…

I. INTRODUCTION

Defendant-Appellee Oregon State Bar (Bar) passed a resolution requiring all active Oregon-based attorneys to purchase primary malpractice insurance from the Bar. Plaintiff-Appellant Fred Hass (Hass), a member in good standing of the Bar, contends that the Bar’s insurance requirement violates both the Sherman Antitrust Act, 15 U.S.C. §§ 1 , 2 (1982) and the commerce clause, U.S. Const, art. I, § 8, cl. 3. The following issues are presented: (1) whether the Bar’s insurance requirement is immune from challenge under the Sherman Act by virtue of the state action exemption or by virtue of the exemption for the business of insurance contained in the McCar-ran-Ferguson Act, 15 U.S.C. §§ 1011-1015 (1982); and (2) whether the Bar’s insurance requirement violates the commerce clause.

We find it unnecessary to discuss the McCarran-Ferguson Act because we conclude that the Bar’s insurance requirement falls within the state action exemption to the Sherman Act. We also conclude that the requirement does not violate the commerce clause.

II. PERTINENT FACTS

The Bar is a public corporation and an instrumentality of the judicial department of the government of the State of…

dissenting:

I disagree with the majority’s conclusion that the Oregon State Bar’s insurance-related activities need not satisfy the active supervision requirement for state action antitrust immunity, and respectfully dissent. Furthermore, as there is no active supervision of the Bar’s administration of the Professional Liability Fund, and because the Fund is outside the reach of the McCarran-Ferguson exemption to the antitrust laws, I would reverse the district court judgment.

I.

Grounded in the principles of federalism and state sovereignty, Parker v. Brown, 317 U.S. 341, 351 , 63 S.Ct. 307, 314 , 87 L.Ed. 315 (1943), held that the Sherman Act was not intended “to restrain state action or official action directed by the state.” Thus, when a state directly regulates its domestic commerce in a sovereign capacity, any resulting anticompetitive effects receive state action immunity from federal antitrust liability. See, e.g., Hoover v. Ronwin, 466 U.S. 558, 572-73 , 104 S.Ct. 1989, 1997-98 , 80 L.Ed.2d 590 (1984) (state supreme court acting as sovereign when acting in a legislative capacity); Bates v. State Bar of Arizona, 433 U.S. 350, 360 , 97 S.Ct. 2691, 2697 , 53 L.Ed.2d 810…