California Anti-SLAPP Project

Missouri v. National Organization of Women

Cite as: 620 F.2d 1301


STATE OF MISSOURI, Appellant,
v.
NATIONAL ORGANIZATION FOR WOMEN, INC., Appellee.

No. 79-1379.
United States Court of Appeals, Eighth Circuit.
Submitted Nov. 7, 1979.
Decided March 28, 1980.


COUNSEL: Roger Bern, Asst. Atty. Gen., Jefferson City, Mo., for appellant; John Ashcroft, Atty. Gen., Walter O. Theiss, Gregory D. Hoffmann and Nanette Laughrey, Asst. Attys. Gen., Jefferson City, Mo., on brief.

John E. Vanderstar, Covington & Burling, Washington, D. C., for appellee; David J. Cynamon, Clare Dalton and Donna L. Kohansky, Washington, D. C., Betty K. Wilson, Welliver, Atkinson & Eng, Columbia, Mo. and Phyllis Segal, Legal Director, NOW Legal Defense & Ed. Fund, New York City, on brief.

Bruce V. Bordelon, Ruth Bader Ginsburg, Columbia University School of Law, William J. Hibsher and Jo-Ann H. Whitehorn, New York City, on brief of amicus curiae, Special Committee on Sex and Law.

Nathan Z. Dershowitz and Joseph B. Robison, American Jewish Congress, New York City, Marilyn Berner, Judith E. Diamond, Carolynn N. Fischel, Boston, Mass., Daniel J. Landau, Concord, Mass., Mark Michelson and Alexandra Moses, Boston, Mass., on brief of amicus curiae, American Jewish Congress.

Ellen Broadman and Alan Mark Silbergeld, Washington, D. C., on brief of amicus curiae, Consumers Union.

Dian D. Ogilvie and Vicki E. Land and Marjorie S. Steinberg, Los Angeles, Cal., on brief of amicus curiae, California Women Lawyers, et al.

Philip Elman, Toni G. Allen and Nancy H. Hendry, Wald, Harkrader & Ross, Washington, D. C., David R. Morris, Kansas City, Mo., Diana A. Steele, American Civil Liberties Union, and Women's Equity Action League, New York City, on brief of amicus curiae, American Civil Liberties Union, et al.

Harold Baer, Jr., President, New York County Lawyers' Ass'n, New York City and Margaret H. McDowell, Chairperson, Rochelle M. Corson, Susan B. Lindenauer and Joan Offner, Special Committee on Women's Rights, New York City, on brief of amicus curiae, N. Y. County Lawyers Ass'n.

Before GIBSON, Chief Judge,[FN*] STEPHENSON and HENLEY, Circuit Judges.

[FN*] The Honorable Floyd R. Gibson was Chief Judge of the Eighth Circuit at the time this case was submitted and took senior status on December 31, 1979, before the opinion was filed.


STEPHENSON, Circuit Judge.

This case poses serious questions concerning the First Amendment's right of petition and the scope of the antitrust laws. The primary question with which we must deal is the applicability of the Sherman Act to a politically motivated but economically tooled boycott participated in and organized by noncompetitors of those who suffered as a result of the boycott.

Essentially, the National Organization for Women, Inc., (NOW) organized a convention boycott against all states that had not ratified the proposed Equal Rights Amendment (ERA).[FN1] The impact was such that the Missouri motels and restaurants catering to the convention trade, and the Missouri economy as a whole, were suffering revenue losses. Missouri asked for injunctive relief against NOW's activities under section 16 of the Clayton Act, 15 U.S.C. s 26, which the district court [FN2] denied. The court, in a well-reasoned opinion, found, primarily on the basis that NOW's activities were political and thus not within the scope of the Sherman Act, that NOW had not violated section 1 of the Sherman Act, 15 U.S.C. s 1. Missouri v. National Organization for Women, Inc., 467 F.Supp. 289 (W.D.Mo.1979).

[FN1] The proposed twenty-seventh amendment to the United States Constitution reads as follows:
Section 1. Equality of rights under the law shall not be denied or abridged by the United States or by any State on account of sex.
Section 2. The Congress shall have the power to enforce, by appropriate legislation, the provisions of this article.
Section 3. This amendment shall take effect two years after the date of ratification.

[FN2] The Honorable Elmo B. Hunter, United States District Judge for the Western District of Missouri.
Because we hold that it was not the intent of Congress that the Sherman Act cover such activities, we affirm the district court.

I. Background

The district court opinion thoroughly sets out the factual circumstances of this case. [FN3] A skeletal summary of the facts most relevant (borrowing generously from the district court's language) is as follows:

[FN3] The district court's full discussion of the facts is found in Missouri v. National Organization for Women, Inc., 467 F.Supp. 289 (W.D.Mo.1979).

(1)"NOW actively engaged in an 'economic boycott campaign' that has been a significant part of and shared common goals with a larger convention boycott movement directed at unratified states," id. at 293;

(2) The convention boycott takes place in what is essentially a political context;

(3) The goal and sole purpose of NOW's economic boycott campaign is the ratification of the ERA;

(4) The motivation of NOW can be viewed from two points, both aimed directly at the legislative process:

(a) a desire to make a symbolic gesture; and
(b) a desire to attract attention and bring public visibility to the issue of ratification;

(5) NOW also intended that the adverse economic impact of the boycott on those who would otherwise profit from conventions in Missouri would cause those persons to influence their legislators to support ERA ratification;

(6) The boycott and related activities were not intended as punitive for Missouri's past failure to ratify; and

(7) NOW was not motivated by any type of anticompetitive purpose;

(8) The participants are not in a competitive relationship with Missouri which has suffered as a result of the boycott.

The district court concluded that:
(9) The boycott is noncommercial in that its participants are not business interests and its purpose is not increased profits;

(10) The boycott is "non-economic" as it was not undertaken to advance the economic self-interests of the participants;

(11) Assuming arguendo that the actions taken by NOW fall within the purview of the Sherman Act,

(a) NOW entered into a combination to implement a boycott of unratified states; and
(b) "the invitation to act, the presence of a strong motive for concerted action, and the knowledge that others were taking similar action are sufficient to find conspiracy under the Sherman Act." Id. at 296.
Standing for Missouri to bring a cause of action under 15 U.S.C. s 26 was based on the fact that:
(12) "(T)he businesses of Missouri's convention industry have suffered economic injury as a result of the boycott and are threatened with additional injury in the future," id. at 300;

(13) "The adverse effect of the injury extends to all parts of the economy of the state," id.;

(14) NOW's target is the state legislature, the supreme policy-making body of the state.

The court concluded:
(15) Missouri has standing as parens patriae as this is a case in which the state is seeking to protect the public interest.
The court cautioned, in connection with its determination of standing parens patriae:
(16) It must be noted that this conclusion is the result of a consideration of the economic and policy factors in this case. This opinion is not to be read as a general approval of parens patriae standing as a matter of law in any case in which the state adduces expert testimony to show generalized economic injury due to linkage or interdependence among the various sectors of the state's economy. Id. at 301.
Further, in a footnote the court stated:
(17) NOW argues that "(a)cceptance of the state's theory (of economic linkage causing damage to the general economy) would give the state standing to sue in every case where any Missouri business claims injury by reason of any tort, including violations of antitrust laws, or presumably even in ordinary breach of contract cases." * * * The Court shares this concern and notes that the economic interdependence rationale for parens patriae standing cannot be viewed in isolation or accepted as the sole justification for state standing. To do so would carry the doctrine of parens patriae far beyond its proper bounds.
Id. at 301 n. 22.

The court also discussed the case of Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961). The court stated:

(18) "The 'essential dissimilarity' between the convention boycott directed at the legislatures of unratified states and agreements traditionally held violative of s 1 of the Sherman Act is of a greater magnitude in this case than that in Noerr," id. at 304;

(19) "The Supreme Court's reasons for nonapplication of the antitrust laws in Noerr apply with greater weight to this case, which involves political opponents, not commercial competitors; and political objectives, not market place goals. For these reasons, this Court concludes that the Sherman Act does not apply to the actions of NOW in furtherance of its convention boycott campaign." Id. at 305 (footnote omitted).

II. Scope of the Sherman Act

A. Legislative History

This court would be remiss if it did not acknowledge at the outset that the specific question this case presents has not been decided by the Supreme Court or, for that matter, by any other appellate court. [FN4] There is certainly language used by the Court in some of its cases that provides guidance, however, and the applicability of Noerr to the situation cannot be denied.

[FN4] But see Council of Defense v. International Magazine Co., 267 F. 390 (8th Cir. 1920), wherein a state-created Council of Defense sought to boycott a publishing company because of the pro-German sympathies of stockholder William Randolph Hearst. In Council of Defense, this court found that the Council's actions did violate the Sherman Act. However, it is significant to note that our court held in that case that "(t)he declared and obvious purpose was to destroy complainant's business in New Mexico." Id. at 411.

In the immediate case, no such purpose exists in fact, there was a specific finding by the district court that there was no punitive purpose in NOW's boycott in the sense that it was designed to punish for past conduct. The economic coercion of the boycott was designed to procure affirmative action by the Missouri legislature. In Council of Defense there was economic punishment for past actions; in the instant case there is economic injury to achieve immediate or future action.

Further, a more basic distinction is that Council of Defense did not involve any issue of the right to petition, a fundamental consideration in the instant case and in Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961). There can be drawn a distinction between political speech and petitioning of the government. At some point, a line must be drawn; this is not the case in which it is necessary to draw the line.

State v. Horsemen's Benevolent & Protective Ass'n, 55 A.D.2d 251, 389 N.Y.S.2d 868 (1976) does consider a very similar issue, although the Sherman Act was not involved. In that case, an association of horse owners engaged in a boycott of horse racing (in order to pressure the state to finance an employee pension plan, the cost of which would otherwise fall on the association's members), causing a cessation of racing at Aqueduct. The state brought an action against the association under the New York State "Little Sherman Antitrust Act" for damages. The court disposed of the issue we find so troublesome in this case with the statement "(t)his was not merely an attempt to influence legislation, see Eastern R. Conf. v. Noerr Motor Freight, 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961) * * *." State v. Horsemen's Benevolent & Protective Ass'n, supra, 389 N.Y.S.2d at 869. We do not find the court's reasoning persuasive.

See also Mark Aero, Inc. v. Trans World Airlines, Inc., 580 F.2d 288 (8th Cir. 1978).

The first question relevant to our inquiry is whether the intent of Congress was that the Sherman Act would cover activities such as NOW has undertaken in this case. [FN5]
[FN5] Examples of political boycotts include the boycott of Florida citrus products which was to protest against the Miami referendum withdrawing protection for gay civil rights, and the refusal by colonists to import British goods in order to communicate the strength of public feeling against the Stamp and Townsend Acts early in our country's history.

One of the more famous political boycotts occurred in Montgomery, Alabama, to protest the racial segregation and discrimination on city buses. There have been consumer boycotts on meat, supermarkets, grapes, iced tea in cans, sugar or soft drinks, slacks, lettuce, textiles, chocolate, Saran Wrap, Mexico, tuna, animal skins and furs, Russian products and Japanese products.

The term boycott was derived from a method of retaliation used against a land agent, Captain Boycott, who paid starvation wages to tenants and then evicted those who protested these wages. Tenants rallied the support of Boycott's servants, herders and drivers, and all agreed to cease relations with the Boycott family. See Webster's Third New International Dictionary 264 (1971).

The 50th and 51st Congresses were primarily concerned with business trusts and the economic power which those trusts possessed. [FN6] The trust concept involved the shareholders transferring their shares to a single trustee or board of trustees who would exercise complete control over the management of the trust; the shareholders received trust certificates which entitled them to a share of the profits of the trust. Since the trust did not require state sanction, as did corporations, and since the trusts were not subject to the controls and restrictions that states could impose on corporations, they were more unwieldy than corporations. 1 E. Kintner, The Legislative History of the Federal Antitrust Laws and Related Statutes 10 (1978). See generally id. at 8-13. Public hostility towards the trusts in the late 1800's was immense and severe. Id. at 11; Letwin, Congress and the Sherman Antitrust Law: 1887-1890, 23 U.Chi.L.Rev. 221, 235 (1956).
Because a trust typically controlled the integrated levels of a particular industry, it could often control the means or sources of supply and dictate the prices or terms at which commodities would be bought, sold, or transported. Moreover, large concerns often agreed to divide markets and to fix prices, engaged in predatory pricing, and discriminated in favor of certain entities.
1 E. Kintner, supra at 11. The kind of remedy that the public desired was a law to destroy the power of the trusts, Letwin, supra at 235, and such was the purpose of the Sherman Act. But to limit the purpose to such a general one is misleading.
[FN6] The legislative history of the Sherman Act is comprehensively compiled and edited in 1 E. Kintner, The Legislative History of the Federal Antitrust Laws and Related Statutes (1978). See also Letwin, Congress and the Sherman Antitrust Law: 1887-1890, 23 U.Chi.L.Rev. 221 (1956). Letwin examines the political mood of the country during the years that Congress discussed and passed the Sherman Act.
Clearly, by prohibiting trusts, the Congress sought to achieve the preservation of free and fair competition. See, e. g., 1 Kintner, supra at 113-18, quoting 21 Cong.Rec. 2456-58 (1890) (remarks of S. Sherman). Unfortunately, an examination of the legislative history does not clearly indicate the answer to the question we have here whether Congress wanted to protect "free and fair" competition from political or social activities that can have the same effect upon competition as the commercial activities of a trust against a business. See, i. e., Bird, Sherman Act Limitations on Noncommercial Concerted Refusals to Deal, 1970 Duke L.J. 247 (1970); Kestenbaum, The Antitrust Challenge to the Arab Boycott: Per Se Theory, Middle East Politics and United States v. Bechtel Corp., 54 Tex.L.Rev. 1411 (1976); Comment, 30 U.Chi.L.Rev. 171 (1962). [FN7] Missouri does not direct us to, nor have we discovered, any legislative history that indicates an affirmative intent of Congress to do so. The few comments that we find that have some relevance to the question indicate otherwise. For example, the following exchange took place between Senator Sherman, the sponsor of the Act, and Senator George, a major opponent of the Act. [FN8]
[FN7] The argument that the Sherman Act should cover, i. e., all boycotts regardless of motivation, purpose, ultimate goal, etc., is that without coverage, groups would be able to pool economic power in pursuit of private goals with "no more than self-imposed restraints on harms caused to others. The danger is in the collective possession of power itself * * *." Bird, Sherman Act Limitations on Noncommercial Concerted Refusals to Deal, 1970 Duke L.J. 247, 260 (1970).

[FN8] Kintner points out in his book that Senator James Z. George (D., Miss.), played a significant role in shaping the Sherman Act. 1 E. Kintner, supra at 15.


Mr. GEORGE. Mr. President, this is a very important subject. The bill undertakes to deal with very great evils which in the last few years have done great injury to the people of the United States. I am in favor of legislation to prevent trusts and combinations, but I want effective legislation legislation that will crush out these combinations and trusts.

* * *

I have given some thought and some reflection to this matter, and I am extremely anxious that some bill shall receive the assent of this Congress which will put an end forever to the practice, now becoming too common, of large corporations, and of single persons, too, of large wealth, so arranging that they dictate to the people of this country what they shall pay when they purchase, and what they shall receive when they sell.

I have considered with some care the provisions of this bill. I do not believe that the effect of its provisions is accurately understood by members of this body. I propose, therefore, to make an analysis of its provisions to see, if we can, what it means, what evils it undertakes to remedy, and what remedy it provides, and how efficacious this remedy may prove to be.

In the beginning, I desire to call the attention of the Senate to the fact that the provisions of this bill are not confined to trusts, to combinations, to arrangements and agreements made between parties who are engaged in business; or, in other words, taking the language of the bill in its plain meaning, it refers to and brings within the punitory provisions of the fourth section not only arrangements and agreements between manufacturers, between sellers, between transporters, but it brings within its grasp arrangements made by any persons, though merely for moral and for defensive purposes. The bill provides That all arrangements, contracts, agreements, trusts, or combinations between persons or corporations made with a view, or which tend, to prevent full and free competition in the importation, transportation, or sale of articles imported into the United States shall be unlawful.

That would apply to an arrangement, to an agreement, to a combination, not of a business character, but, as I before remarked, to such as is purely moral and defensive. It does not say that all arrangements, contracts, etc., made between persons and corporations engaged in selling, transporting, importing, manufacturing, or producing the articles described in the bill shall be unlawful; but it applies to all persons whether so engaged or not. So if this bill passes as it now stands, the farmers and laborers of this country who are sending up their voices to the Congress of the United States, asking, pleading, imploring us to take action to put down trusts, these farmers and these laborers will find that they themselves in their most innocent and necessary arrangements, made solely for defensive purposes against the operations of these trusts, will be brought within the punitory provisions of this bill.

It will strike the Senate probably with some astonishment if it be ascertained that under this bill the arrangements made by the Southern farmers during the last season to prevent the consummation of the robbery of them by the jute-bagging trust are made highly criminal. Under it the farmers of the South who combine to prevent and defeat that most iniquitous and unjust combination will find that they themselves rather than the jute-bagging trust will be the subjects of severe punishment.

Upon the formation of this bagging trust the cotton farmers of the South, many of them in their granges and in their alliances, agreed that they would not purchase jute bagging, and by that agreement to a very large extent the rich rewards anticipated by the men who formed the trust were defeated. These combinations tended to prevent full and free competition in the sale of this article. But if that is not very clear, if Senators think these arrangements of the farmers did not have the effect of preventing this full and free competition, I call their attention to another provision contained in the third section of the bill, which reads in this way: If acts shall be done under any such arrangement, contract, agreement, trust, or combination, which have for their purpose, or which shall tend to compel the giving up or sale of any lawful business, the person, partnership, or corporation injured thereby may sue for and recover in any court of the United States of competent jurisdiction the damages sustained thereby.

The very object of this combination of Southern farmers was to break down the trust in jute bagging, to compel the men who had seized and got control of the bagging manufacture of this country to give up their business to loose their grip upon the business of the farmers. It also very clearly violated the other provision of the bill to which I have just called attention. The fact that the bill does not restrict these combinations, these agreements, to persons engaged in trade, engaged in transportation, engaged in importation, engaged in selling the fact that it applies to all arrangements, all agreements, all combinations, by whomsoever made, would bring within its reach all defensive agreements made by farmers for the purpose of enhancing the price of their products. This bill, instead of preventing trusts, would have the effect of crushing out all efforts of the people to rid themselves of their injurious effects. . . .

Mr. SHERMAN. Do I understand my friend from Mississippi to claim that under this bill an agreement made by farmers not to buy cotton-bagging or not to buy anything else is a combination within the meaning of the act?

Mr. GEORGE. Yes, sir; directly within the meaning of the act.

Mr. SHERMAN. That is a very extraordinary proposition. There is nothing in the bill to prevent a refusal by anybody to buy anything. All that it says is that the people producing or selling a particular article shall not make combinations to advance the price of the necessaries of life. However, I simply wished to get the answer of the Senator.

Mr. GEORGE. That is the true construction of this bill which I put on it.

Mr. SHERMAN. I desire to say distinctly that that is not my idea or the idea of any one of the committee.

Mr. GEORGE. I presume it is not.

Mr. SHERMAN. Nor do I believe it is a fair construction of the bill.

Mr. GEORGE. But yet that is the legal meaning and force of the bill; and I will state to the Senate and to the Senator from Ohio that it is directly within the terms of this bill to forbid any number of persons belonging to or joining a temperance society whose object is to compel retailers of intoxicating liquors to give up their business.

Mr. SHERMAN. Where men agree that they will not drink at all, does the Senator think that is a combination in restraint of the trade of liquor-sellers?

Mr. GEORGE. What is it?

Mr. SHERMAN. The Senator, as I understand, now claims that an agreement among several people not to drink whisky or brandy is in restraint of the trade of selling whisky or brandy and is therefore a combination within the meaning of this bill?

Mr. GEORGE. I insist that a society, making an agreement or a combination between citizens of a town anywhere in the Union not to drink, not to use in any way vinous or spirituous liquors, and to persuade others to a similar abstention, does, in the language of this bill, tend to compel persons engaged in retailing liquor in that community to give up their business, and the doing of that is expressly condemned by the third section of this bill. . . .

Mr. (WILLIAM M.) STEWART (R., Nev.). If an organization for the purpose of having laws passed creating high license is formed, would not that enhance the value of the things prohibited in this bill?

Mr. GEORGE. I have considered that question. I have thought possibly that the courts might say that the right of political organization to bring about political results by legislation was not embraced within the provisions of the bill.

1 Kintner, supra at 77-79, quoting 20 Cong.Rec. 1458-59 (remarks of S. Sherman, S. George and S. Stewart) (1889).

Note! This case is continued in Part Two


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