Another conversation that has as its subject the scope of the bill is as follows:
The PRESIDING OFFICER. The Secretary will state the amendment proposed by the Senator from Iowa.
The CHIEF CLERK. It is proposed to add at the end of the second proviso to section 1: Nor to any arrangements, agreements, associations, or combinations among persons for the enforcement and execution of the laws of any State enacted in pursuance of its police powers; nor shall this act be held to control or abridge such powers of the States.
The PRESIDING OFFICER. The question is on agreeing to the amendment proposed by the Senator from Iowa. . . .
Mr. EUSTIS. Where does the Senator propose his amendment to come in?
Mr. WILSON, of Iowa. I propose it as an addition to the proviso of section 1, and it is simply for the purpose of avoiding an effect which is likely to flow from the earlier provisions of that section. That section provides as follows: That all arrangements, contracts, agreements, trusts, or combinations between two or more persons or corporations, or both, 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, or with a view or which tend to prevent full and free competition in articles of growth, production, or manufacture of any State or Territory of the United States with similar articles of the growth, production, or manufacture of any other State or Territory, or in the transportation or sale of like articles, the production of any State or Territory of the United States, into or within any other State or Territory of the United States: and all arrangements, trusts, or combinations between such persons or corporations made with a view or which tend to advance the cost to the consumer of any such articles are hereby declared to be against public policy, unlawful, and void.
I will state frankly my purpose in offering the amendment. Under the provisions of this section, should it become a law, every organization in such a State as Iowa, for instance, of the character of the Woman's Christian Temperance Union, the Temperance Alliance, and other organizations intended to promote the execution of the laws of that State in respect of the manufacture and sale of intoxicating liquors would become illegal bodies and their movements subject to the terms and provisions of this bill. I know that was not intended, and yet the language, without being stripped of its power by the amendment I propose, would include all organizations of that kind. All I ask is that the subjects within the police power of the States as embraced within that legislation, of Iowa and any other State which may desire similar legislation, shall not be embraced within this provision, but that the States shall be left free in the execution of their police powers. . . .
I will just add to what I have said that the proviso to which I offered this as an amendment excepts from the operations of this section of the bill arrangements, agreements, or combinations between laborers, made with a view of lessening the number of hours of their labor or of increasing their wages, and it also excepts arrangements, agreements, associations, or combinations among persons engaged in horticulture or agriculture, made with a view of enhancing the price of their own agricultural or horticultural products. I think that the exception which I ask to have made by this amendment is quite as worthy of the support of the Senate as either of these.
Mr. HOAR. Allow me to ask the Senator if his amendment accomplishes his object. I understand his object is to protect combinations of persons intended to discourage the use and manufacture of intoxicating liquors.
Mr. WILSON, of Iowa. My object is to exclude them from the operation of the bill.
Mr. HOAR. I understand, to protect them from being affected by it. But the only description in his amendment is of such associations as are in aid of the execution of the laws of a State in pursuance of its police power. Now, if this bill without his amendment would render the class of persons he has described subject to the penal provision, all temperance societies whose object is to persuade mankind not to use intoxicating liquors would still remain in spite of his amendment within the purview of the bill. It seems to me he should extend his amendment a little further, because, as far as my State goes, this class of associations which he has described do not confine their efforts to the execution of the law, but their efforts are a great deal more extensive and extend to discouraging the use or manufacture of intoxicating liquors altogether. This is what he means, and we would all vote for it.
Mr. WILSON, of Iowa. I am satisfied that my amendment will cover the purpose I have in view concerning my State. If other Senators desire something further in regard to their States, they can move it.
Mr. HOAR. I move to amend the Senator's amendment by adding to it: Or to discourage the use or manufacture of intoxicating liquors.
And we will take a vote on that. . . .
The PRESIDING OFFICER. The question is on agreeing to the amendment to the amendment.
Mr. SHERMAN. The Senator from Iowa showed me his amendment. As these organizations in Iowa are associated and organized something in the nature of a corporation, there might be some reason for believing that they possibly might fall within the meaning of the clauses of the bill. Therefore, I have no objection to his amendment, but I do not see any reason for putting in temperance societies any more than churches or school-houses or any other kind of moral or educational associations that may be organized. Such an association is not in any sense a combination or arrangement made to interfere with interstate commerce; but under the peculiar circumstances, upon the facts stated by the Senator from Iowa, I think it is very proper to make an exception of those organizations in Iowa which are really in aid of the execution of State law. I would apply it to all organizations which are using either moral or any other kind of means for the enforcement of local laws; but I do not think it is worth while to adopt the amendment of the Senator from Massachusetts, because that would include temperance societies. You might as well include churches and Sunday schools.
As the exchanges reveal, the conversation provides an indication we do not set it out to show an affirmative statement of intent. Yet, the indication is that it was the competitors in commerce that Senator Sherman had in mind as the concern of his bill, not noncompetitors motivated socially or politically in connection with legislation.
We conclude that the legislative history of the Sherman Act does not reveal that Congress intended to prohibit, with the Sherman Act, activities such as NOW's boycott; this is not inconsistent with the Supreme Court cases considering similar questions.
B. Case Law
As the district court in this case stated from the bench, "this is a unique case. It is different from any case in the law books anywhere. There simply has never been another one like it." Consequently, and as we noted earlier, the question of whether NOW's specific sort of activities an economic boycott, politically motivated, to achieve a legislative goal was intended by Congress to be within the scope of the Sherman Act, has not been specifically addressed by the Supreme Court. We can, however, find guidance in several of the Court's opinions by noting a complete lack of an affirmative indication that such activities are covered, by taking cognizance of the Court's passing references that indicate that the activities that were meant to be covered are competitive activities by competitors with some self-enhancement motivation, [FN9] and by a thorough analysis of Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961).
In the course of its discussion, the Court draws conclusions "not from the literal meaning of the words" of the Act, but from "the purpose, the subject matter, the context and the legislative history of the statute." Id. at 351, 63 S.Ct. at 313. As the Court noted in National Society of Professional Engineers v. United States, 435 U.S. 679, 687, 98 S.Ct. 1355, 1362, 55 L.Ed.2d 637 (1978), the Sherman Act cannot mean what it says. It was the legislative history upon which the Parker Court relied the fact that "(t)here is no suggestion of a purpose to restrain state action in the Act's legislative history" in making its determination that the California raisin pro-rate program was not within the scope of the Sherman Act. Parker v. Brown, supra, 317 U.S. at 351, 63 S.Ct. at 313. Of particular importance to the Court's discussion was the fact that an unexpressed congressional purpose to nullify or restrain a state's control over its officers and agents should not be lightly attributed to Congress via the Sherman Act.
In the instant case, an infringement upon the people's right to petition the government by a boycott should also not be lightly attributed to Congress. We perceive a more accurate phrasing of Congress' concern to be not the elimination of boycotts, but elimination of boycotts used by a competitor against a competitor (or against a supplier, customer, etc.) in the business of competing. For example, in the legislative history to which the Court makes reference in Parker v. Brown, supra, 317 U.S. at 351, 63 S.Ct. at 313, 21 Cong.Rec. 2562 (1890), Senator Sherman states that the Act is meant to apply to "business combinations," not to "voluntary associations."
In Klor's, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207, 79 S.Ct. 705, 3 L.Ed.2d 741 (1959), one of the primary boycott cases considered by the Supreme Court, the Court held that the Sherman Act was meant to cover what the district court had found to be a "purely private quarrel." In the course of its explanation, the Court discusses the boycott in terms of a business activity amongst competitors. Id. at 210-13, 79 S.Ct. at 708-710. The Court also criticizes the court of appeals for its heavy reliance on Apex Hosiery Co. v. Leader, 310 U.S. 469, 60 S.Ct. 982, 84 L.Ed. 1311 (1940) and in considering the lack of significant effect on the market as relevant in not finding a violation. While noting that there is some strong language in Apex that indicates section one Sherman Act violations must include an effect on market prices, the Court emphasizes that the defendant in Apex was a labor union and that part of the basis for the Apex decision was a recognition that the Sherman Act "is aimed primarily at combinations having commercial objectives and is applied only to a very limited extent to organizations, like labor unions, which normally have other objectives." Klor's, Inc. v. Broadway-Hale Stores, Inc., supra, 359 U.S. at 213 n.7, 79 S.Ct. at 710. While the statement was not necessary to the outcome of the case, the Court's decision in Klor's includes a signal that the focus of the Sherman Act is upon commercial-business activities, and that the organization and objectives involved can make a difference in the application of the Act.
Thus, at a minimum, in Parker, the Court tells us that the Sherman Act does not mean exactly what it says, i. e., "all combinations in restraint of trade," and that the Act must be interpreted with the setting in which it was enacted; in Klor's, even when considering the impact of a boycott, the Court does not use overly broad language in holding that the Sherman Act covers such activity. Instead, the Court focuses upon the business nature of the boycott, the intent of the Act to cover "business combinations with commercial objectives," and concludes that the boycott is within the scope of the Act. [FN10]
The first Supreme Court case, however, that actively deals with the type of conflict we have in the present case, is Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., supra. Although the factual situation in Noerr differs from that of this case, sufficiently that we must specifically address those distinctions the overriding policy implications of Noerr are persuasive.
In Noerr, the defendant railroads had engaged in a publicity campaign with the purpose of fostering the adoption and retention of laws that would be destructive of the trucking business.
Basically, the Supreme Court held that the railroads' campaign to get the legislature to pass laws, no matter how unethical that campaign was, was not within the scope of the Sherman Act. The Court said, inter alia, "no violation of the Act can be predicated upon mere attempts to influence the passage or enforcement of laws." Id. 365 U.S. at 135, 81 S.Ct. at 528. Even this strict ruling sheds some light on the instant case inasmuch as NOW's boycott was stipulated to be an attempt to influence ratification by the Missouri legislature of the proposed ERA. State of Missouri v. National Organization for Women, Inc., supra, 467 F.Supp. at 293.
It also demands that we deal with the first factual distinction between Noerr and our case, and that is the subject matter of the legislation. The legislation in Noerr directly concerned the alleged violators of the Sherman Act and the target of the alleged violation, the railroads and the truckers. The parties were intimately affected by and concerned with the legislation as the legislation would either directly hurt or help them "financially," "economically," and "commercially."
The ERA is not a "financial," "economic," or "commercial" piece of legislation. It is a social or political piece of legislation. While it is obviously perceived by the members of NOW as beneficial, the record indicates, and it seems apparent, that the orientation of both parties, NOW and Missouri, to the ERA is not one of profit motivation. The only financial, economic or commercial matter involved here is Missouri's concern about the financial repercussion of the boycott.
Keeping in mind that what we are discussing is the applicability of the Sherman Act to the facts, and the intent of the Congress to cover such situations, the difference in the content of the legislation if anything makes it more clear that NOW's efforts to influence the legislature's action on the ERA are beyond the scope and intent of the Sherman Act. A social piece of legislation and the efforts involved in influencing the legislature's actions on such legislation is further afield from the central focus of the Sherman Act than a commercial piece of legislation [FN11] and the petitioning efforts associated therewith.
Missouri refers to NOW's activities as a secondary boycott and argues that the district court, in not specifically finding that there was a secondary boycott, erred in its factual findings. Missouri argues that the error taints the district court's other findings and its analysis of the legal issues. The only clue as to exactly how this taint distorts the district court's findings is Missouri's claim that it affected the court's statement that if this "were not a legitimate effort to influence the legislature, this Court would be presented with a different case." Missouri v. National Organization for Women, Inc., supra, 467 F.Supp. at 306 (emphasis added by Missouri in its brief). Missouri appears to equate legitimate efforts to influence a legislature with ethical or non-harmful efforts to influence the legislature.
The Supreme Court establishes the fallacy of this equation in Noerr. In its discussion of the railroad's publicity campaign used to influence the legislature which, besides being unethical and harmful, was characterized as deceptive and vicious, the Court noted that the campaign was intended to and did injure the truckers in their relationship with their customers. But
Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., supra, 365 U.S. at 140-41, 81 S.Ct. at 531 (footnote omitted). The boycott in this case had a commercial impact and has been called unethical. But it is political activity aimed at persuading the legislature to take action. [FN12]
We find Missouri's focus on the facts of this case and not the the district court's misleading. The district court's view is more appropriate for the issues at hand. NOW's boycott was directed against states that had yet to ratify the proposed ERA. NOW was aware that such a boycott would work against the public's economic interests; NOW was hopeful that the public's interest would suffer to the extent that the public would be persuaded that ratification of the ERA was "desirable; " NOW wanted the public to influence the legislature to ratify the ERA; NOW operated on the presumption that legislators act with regard for the public interest.
This is not distinguishable analytically from Noerr.
But the Court then went on to consider, as a separate issue, whether the publicity campaign and the techniques used, including the much-discussed "third-party technique," would take the railroad's actions out of the controlling principle discussed in regard to the mere solicitation of the legislature.
Enlightening as to what this so-called third-party technique is the Noerr district court's discussion of it:
* * * It was also determined that the campaign should be handled through an independent public relations firm. A number of public relations firms were interviewed and of the four or five selected for interview, all were leaders in that particular field. It may be noted in passing that of those interviewed and who submitted proposals, about which proposals testimony was given at the trial, each and every one of the suggested programs provided for a campaign of publicity to put the truckers in a bad light with the public; to encourage normal public resentment of the motoring public to the operation of big trucks on the highways; to secure the assistance of organizations which were apparently "independent and public spirited" in the campaign against the truckers, and to create a demand for legislation penalizing the truckers either by limitation of size and weight or the imposition of user taxes which would make their operation unprofitable.
Noerr Motor Freight, Inc. v. Eastern Railroad Presidents Conference, 155 F.Supp. 768, 778 (E.D.Pa.1957) (emphasis added).
The organization selected by the railroad to handle the campaign was the Byoir Firm:
Id. at 778-79 (emphasis added).
Thus, an additional factor in Noerr that which was more than mere solicitation was the railroads' third-party technique; further, part of the public relations firm's job was to "create a demand for legislation" by creating public resentment of the trucks. Finally, similar to NOW's goals, the railroad had an ultimate objective the legislation and an intermediate goal injury to the truckers. In the NOW case, the ultimate objective is legislation, and the intermediate goal is inflicting economic injury with the hope of achieving that ultimate objective.