Making Sense of Antitrust Petitioning Immunity

California Law Review, Aug 2018

By Einer Elhauge, Published on 10/31/92

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Making Sense of Antitrust Petitioning Immunity

Making Sense of Antitrust Petitioning Immunity Einer Elhauge Follow this and additional works at: Recommended Citation Einer Elhauge, Making Sense of Antitrust Petitioning Immunity, 80 Cal. L. Rev. 1177 (1992). Available at: - Making Sense of Antitrust Petitioning Immunity Einer Elhauget Courts have struggledto produce a coherentdoctrinegoverning when petitioners,such as lobbyists and litigants,are immune from antitrustliability. A variety ofapparentlyconflictingexceptions and requirementspermeate Supreme Court decisions in the field. In this Article, Professor Elhaugeutilizes afunctionalprocessapproachto identifyfactors the Court has implicitly consideredin determining whether immunity applies. These factors turn critically on the incentive structure of the relevant decisionmaker: in particular,on whether the decisionmakerwho imposed the restraint at issue had an objective financial interest in the restraint's anticompetitive consequences. Restraintsproduced by such a financially interested decisionmakingprocess, the Article argues, are and should be denied antitrustimmunity unless the activity producing the restraintdoes not involve market behavior and is not separablefrom otherwise valid input into a governmentalprocess of decisionmaking. These functional process considerationsare shown to explain the outcome in every Supreme Court case adjudicatingantitrustpetitioning immunity issues. Adherence to a functionalprocess approach,ProfessorElhauge concludes, willfacilitate resolution of many questions and anomalies regardingpetitioning immunity doctrineandpermit a more accurateunderstandingof the relationshipbetween antitrustpetitioningimmunity and the relateddoctrine of state action immunity. For most of its history, the doctrine immunizing petitioning activity from antitrust liability has perversely coupled a sweeping general immunity with equally sweeping exceptions. This period was dominated by a trilogy of cases-Noerr,' Pennington,2 and California Motor -- that embraced this seemingly simple principle: "Joint efforts to influence public officials do not violate the antitrust laws even though intended to t Professor of Law, Boalt Hall School of Law, University of California, Berkeley. A.B. 1982, Harvard College; J.D. 1986, Harvard Law School. I am grateful for comments from Gary Minda and Stephen Calkins and financial support from the Boalt Hall Fund and the John M. Olin Foundation. 1. Eastern R.R. Presidents Conference v. Noerr Motor Freight, 365 U.S. 127 (1961). 2. United Mine Workers v. Pennington, 381 U.S. 657 (1965). 3. California Motor Transp. Co. v. Trucking Unlimited, 404 U.S. 508 (1972). eliminate competition."4 But this pristine principle was pockmarked with exceptions. Immunity did not apply when the efforts to influence public officials were a "sham," 5 a concept stretched to include "forms of illegal and reprehensible practice," even if they succeeded in influencing governmental action.' Nor did the immunity apply to petitioning that involved "commercial activity."'7 And the Court's dicta recognized a "conspiracy" exception, which denied immunity when a private actor conspired with the government to restrain trade.8 Perhaps embarrassed by its handiwork, the Court essentially ignored the issue for the sixteen years following CaliforniaMotor, leaving the lower courts and litigants to struggle with the resulting doctrinal hodgepodge. The doctrine became increasingly unstable. The sham exception turned into a catchall to cover whatever forms of petitioning adjudicating courts deemed "improper. ' The commercial exception was sometimes applied and sometimes rejected in cases where either the petitioning or the desired governmental action was deemed to be "commercial," a term that remained ill-defined.' 0 Even more open-ended was the conspiracy exception, for a conspiracy of sorts could be alleged whenever petitioning was successful. And some lower courts recognized other vague exceptions for petitioning that influenced policy "implementation" rather than policy making,1 1 and for when the activity was not "direct" petitioning but "preliminary" to it. 2 The problem was more than a failure to set forth clear general rules for defining the scope of the immunity. The larger problem was that, as the exceptions were defined, adjudication consisted of pasting a conclusory label on the petitioning activity at issue. Implicit factors and policy judgments no doubt guided many courts in deciding whether a given activity was improper and a "sham," and in deciding whether the 1992] commercial, conspiracy, and other exceptions applied. But these factors and policy judgments were not articulated. Consequently, the process of case-by-case adjudication did not redress the absence of general rules by producing precedents that could provide useful guidance. Instead, it produced doctrinal inconsistency,1 3 prolonged uncertainty, 4 and everincreasing litigation.15 Dissatisfied with this doctrinal muddle, the Supreme Court has in the last four years issued a new trilogy of cases-Allied Tube, 16 Trial Lawyers, 17 and Omni 1 8 -that casts aside the old trilogy's uneasy compromise between a broad immunity and its open-ended exceptions. This new trilogy drastically shrinks the sham and conspiracy exceptions. The sham exception, the Court has made clear, no longer includes improper petitioning activities if those activities are genuinely intended to influence the government.1 9 And the conspiracy exception has been rejected, with the possible exception of cases where the government is acting as a market participant.20 At the same time, the new trilogy circumscribes the sweep of the affirmative immunity. It emphasizes that "the Noerr doctrine does not extend to 'every concerted effort that is genuinely intended to influence governmental action.' "21 As if to underscore the point, two of the new cases denied immunity to petitioning efforts that were not only genuinely intended to influence governmental action, but successful in doing so.22 The scope of antitrust petitioning immunity now "depends ... on the source, context, and nature of the anticompetitive restraint at issue."23 The Court's new focus on the "source, context, and nature" of restraints has been roundly criticized for compounding instead of clarifying the doctrinal confusion.24 And it cannot be denied that this new for CALIFORNIA LAW REVIEW[l mulation is not by itself terribly informative. Which sources, contexts, and natures provide immunity, and which do not? The new trilogy defines some of the relevant factors, but leaves others open. What the new doctrinal framework does do, which the old doctrinal framework did not, is encourage courts to articulatethe factors and policy judgments underlying their decisions. This might, in the long run, produce precedents that can provide greater doctrinal coherence. The new doctrinal framework also invites legal academics to see what factors and policy judgments we can identify in the cases to bring them into some predictable order. The time has come, in short, to see whether we can make any more sense of antitrust petitioning immunity after the new trilogy than we could after the old one. I argue that we can under a functional process approach. Differences in the incentive structures underlying the decisionmaking processes that produce the restraints explain and justify why some restraints receive immunity and others do not. This argument builds on my prior article describing the process ideals underlying antitrust state action immunity.2" I conclude that, as with state action immunity, petitioning immunity reflects the Court's implicit functional process views about how best to set the boundaries between the competitive and governmental processes. A more precise statement of the conclusion would be this: under the Court's implicit process view, antitrust immunity does not apply-and the restraint at issue must be subjected to a competitive process regulated by antitrust ground rules-if the decisionmaker who imposed the restraint has an objective financial interest in the restraint's anticompetitive consequences, unless the activity producing the restraint neither involves market behavior nor is separable from otherwise valid input into the governmental process. Explaining the concrete meaning of this conclusion, and how it conforms to a coherent functional process position, will be the task of this Article. Part I analyzes the Supreme Court's opinions and the doctrinal difficulties they produce in order to establish the need to formulate a policy foundation for the doctrine. Part II derives the basic functional process view that underlies the results in the cases, employs that view to resolve some doctrinal anomalies, and defends it against the interest group theory critique. Part III assesses the special issues posed by market restraints that coerce governmental action, and explains why the Court looks at objective incentives rather than subjective motives. Part IV then tackles the tricky issues posed by private action that both directly supra note 10, 206.2, at 89; Calkins, supra note 9, at 327, 337; Gary Minda, Interest Groups, Political Freedom, and Antitrust: A Modern Reassessment of the Noerr-Pennington Doctrine, 41 HASTINGS L.J. 905, 977-78 & n.264 (1990). 25. Einer R. Elhauge, The Scope of Antitrust Process, 104 HARV. L. REV. 667 (1991). restrains trade and provides noncoercive input into the governmental process. Finally, Part V explores the limited circumstances in which petitioners can be liable for restraints imposed by governmental decisionmakers. I THE OPINIONS AND THEIR RESULTING DOCTRINAL DIFFICULTIES Antitrust petitioning immunity began with the famous case of Eastern RailroadPresidentsConference v. NoerrMotor Freight2.6 Noerr concerned a publicity campaign conducted by a group of railroads against truckers. The campaign had, and was intended to have, two main effects. First, it influenced government officials to enact or retain laws that made it hard for truckers to compete with the railroads.27 Second, the campaign's adverse publicity directly impaired relations between truckers and their customers.2 8 Justice Black's opinion for the Court quickly concluded that the defendant railroads were immune from liability for the first effect, 29 which would seem to follow from antitrust's immunity for state action. The more interesting issue was whether the defendant should have immunity for the second direct effect. Without the aim to influence governmental action, a conspiracy to falsely disparage a competitor and hamper its customer relations would normally be subject to antitrust liability. But the Court decided that the defendants should be immune from liability for this effect because it was "incidental" to "political" activities genuinely intended to influence the government.30 Along the way, the Noerr Court made two things clear. First, it did not matter that the defendants were motivated by their financial interest in what law would prevail.3 1 Second, it did not matter that the methods of political lobbying were unethical or deceptive.32 But the Court's opinion left other issues unresolved. Questions were raised by the Court's intimations that immunity might not apply if the activities used to influence the government involved not "political activity" but "business activity. '33 How precisely could one tell the difference? Is there immunity for activity that is neither "political" nor "business" in nature? The opinion did not address those questions. The case also raised questions about the scope of the immunity for direct effects incidental to genuine political petitioning. What does it take for these direct effects to be considered "incidental" to the petitioning? Is it enough that the effects flowed from efforts designed to influence the government? Or is the incidental test tantamount to a least restrictive alternative test, whereby the defendants are immune for direct injuries only if they have chosen the method of petitioning that imposes the least direct injury? The Supreme Court next returned to the issue of antitrust petitioning immunity in ContinentalOre Co. v. Union Carbide & Carbon Corp.3 4 This case is usually left out of the Noerr trilogy,3 5 no doubt because it contains only a short aside on the issue, but it nonetheless established an important precedent. The defendant in ContinentalOre was a producer of vanadium. The defendant's corporate subsidiary had been appointed an agent of the Canadian government and given "discretionary agency power to purchase and allocate to Canadian industries all vanadium products."36 The defendant sought immunity under Noerr for its efforts to have its subsidiary use this governmental authority to exclude the defendant's competitors from selling vanadium on the Canadian market. The Supreme Court rejected this argument, concluding that the defendant's actions were "private commercial activity" outside the scope of Noerr.17 Unfortunately, this conclusion was unadorned with reasoning. Justice White's laconic opinion for the Court did not bother to explain what made the activities private commercial activity. The subsidiary influenced by the defendant was a governmental agent exercising governmental authority. And while the governmental authority did involve the purchase and resale of vanadium, this authority was essentially regulatory, designed to set a price ceiling during wartime and to allocate the metal in a non-market fashion in order to further strategic war aims. Why is this "commercial" rather than "political" or "regulatory"? United Mine Workers v. Pennington3, 8 the next case in the official trilogy, eliminated one possible answer to this question. Pennington involved, among other things, defendants' petitioning efforts to influence coal purchases by the Tennessee Valley Authority (TVA) to the detriment of the defendants' competitors. The Court concluded that such an 34. 370 U.S. 690 (1962). 35. For sources including only Noerr,Pennington, and CaliforniaMotor in the original trilogy, see, e.g., Milton Handler & Richard A. De Sevo, The Noerr Doctrineand Its Sham Exception, 6 CARDOZO L. REv. 1, 3-7 (1984); Hurwitz, supra note 10, at 78 & n.42. 36. Continental Ore, 370 U.S. at 703 n. 11; see id. at 695, 702-04. 37. Id. at 707-08. 38. 381 U.S. 657 (1965). effort to influence "public officials" was immune from antitrust liability.39 Thus, whatever else suffices to constitute commercial activity within the commercial exception, efforts to influence the government's actions as a market participant do not. The puzzling feature of Pennington is that it distinguished ContinentalOre on the ground that there the influenced agent "was not a public official but the wholly owned subsidiary of an American corporation alleged to be a principal actor in the conspiracy."'' But being a public official and being a subsidiary are not mutually exclusive. And the Court opinion, another Delphic effort by Justice White, does not explain how the Court squared its conclusion that Continental Ore did not involve a "public official" with the fact that the agent there exercised a governmental authority delegated to it by the Metals Controller of the Canadian government.4 In the end, then, Pennington provided no useful criteria for determining how to apply the commercial exception. Moreover, by stressing that the influenced public official in Pennington was not alleged to be a "co-conspirator," 4 2 the opinion spawned what would become a troublesome and ill-defined conspiracy exception. The next relevant case is, like Continental Ore, not considered part of the Noerr trilogy, no doubt because it does not even mention Noerr. Nonetheless, in Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp.4 3 the Court established the important principle that obtaining administrative and judicial action through fraudulent petitioning could sometimes result in antitrust liability. The defendant in Walker Process allegedly obtained a patent by denying knowledge of anyone else using the invention when in fact the defendant knew the plaintiff had been using it.' The plaintiff sued under the Sherman Act, alleging that the existence and enforcement of the patent had deprived the plaintiff of business it would have otherwise enjoyed. The Court held that, if true, these allegations would establish a Sherman Act violation. An implicit holding was thus that Noerr immunity did not apply even though the defendant's actions, fraudulent though they may have been, were definitely intended to secure governmental action. Indeed, those actions succeeded in obtaining at least administrative action. But because the Court never directly addressed Noerr, the decision left unclear why Noerr immunity did not apply. Did 39. Id. at 670. 40. Id. at 671 n.4. 41. See ContinentalOre, 370 U.S. at 702 n. 11. 42. Pennington, 381 U.S. at 671 & n.4. 43. 382 U.S. 172 (1965). 44. Id. at 174. the use of fraud make the efforts to procure governmental action a "sham"? Was immunity denied because the petitioning activity did not seek "political" action but rather sought administrative and judicial adjudication of a factual issue? These questions provide the backdrop for the final case in the Noerr trilogy: California Motor Transport Co. v. Trucking Unlimited4.5 In California Motor, the defendants allegedly conspired to institute legal proceedings to prevent their competitors from acquiring operating rights. The defendants' strategy was allegedly to harass their competitors by instituting these proceedings "'with or without probable cause, and regardless of the merits of the cases.' 46 This did not mean that all, or even most, of the proceedings were baseless. On the contrary, the defendants had won twenty-one out of forty cases.4 7 Rather, the crux of the complaint was that the defendants were instigating litigation automatically, without regard to whether the litigation had merit or not, in order to impose costs and delays on their competitors. The California Motor Court first answered one of the questions raised in Walker Process by making clear that Noerr immunity applied not only to efforts to influence legislative and executive action, but also to efforts to influence administrative and judicial action.4" Noerr immunity was, in other words, not an immunity limited to "political activities," but rather a general immunity for efforts to petition any of the branches of government. But the California Motor Court coupled this broadening of the immunity with a broadening of the sham exception. Given that the defendants' success rate was over fifty percent, it could not be denied that the suits were genuine efforts to influence adjudicators.4 9 And a sham exception truly limited to situations where no genuine effort was made to influence the government could not explain the decision in Walker Process. Justice Douglas' breezy opinion for the Court superficially reconciled this tension by asserting that the sham exception encompassed "forms of illegal and reprehensible practice which may corrupt the administrative or judicial processes." 50 As examples, the opinion cited lying to an adjudicator or patent officer, conspiring with a licensing authority, and bribing a purchasing agent.5" More specifically, the Court 45. 404 U.S. 508 (1972). 46. Id. at 512. 47. Trucking Unlimited v. California Motor Transp. Co., 1967 Trade Cas. (CCH) 72,298, at 84,744 (N.D. Cal.), rev'd on othergrounds, 432 F.2d 755 (9th Cir. 1970), aff'd on other grounds, 404 U.S. 508 (1972). 48. See CaliforniaMotor, 404 U.S. at 510. 49. Cf Noerr,365 U.S. at 144 (holding the sham limitation inapplicable because the challenged "effort was not only genuine but also highly successful"). 50. CaliforniaMotor, 404 U.S. at 513. 51. Id. at 512-13. concluded that the activity at issue-a pattern of making repetitive claims regardless of the merits in order to impose costs on the other litigant-constituted a sham.52 While one can sympathize with the Court's desire to deny antitrust immunity to such abusive practices, its use of the sham exception to accomplish the result was quite unfortunate. Having deprived the word "sham" of its natural meaning and of the meaning assigned to it by Noerr, it became nothing more than a catchall for whatever activities courts deemed improper. To be sure, the Court made clear that political activities needed a wider berth of immunity, and that activities deemed a sham in the adjudicative process would not necessarily be deemed a sham in the political process.5 3 But other than establishing that antitrust petitioning immunity varied with the context of the petitioning activity, this clarified very little. And it hardly provided the sort of clear guidance to which First Amendment activities are normally entitled because of concern that legal ambiguity will produce a chilling effect. Having left the lower courts to grapple unsuccessfully with this doctrinal morass for sixteen years, the Court returned to the issue four years ago in Allied Tube & Conduit Corp. v. Indian Head, Inc.54 In that case, steel producers packed the annual meeting of a private standard-setting association with employees and spouses in order to secure a majority vote for a version of the association's electrical code that excluded plastic conduit manufactured by competitors. The question was whether antitrust petitioning immunity should apply because the association's electrical code was routinely adopted into law by state and local governments. The Court could have, as Justice White's dissent did, simply applied the general immunity with open-ended exceptions approach, and made a conclusory decision that the conduct either was (or was not) a "sham."5 5 Instead, in an opinion by Justice Brennan, the Court abandoned that approach, explicitly rejecting the proposition that the sham exception covered genuine efforts to influence the government through "improper means" or "flagrant abuse."5 6 As the Court noted, this loose use of the word "sham" rendered it no more than a contentless label, which obscured the factors underlying court decisions.5 7 Indeed, a telling illus52. See id.; see also Otter Tail Power Co. v. United States, 410 U.S. 366, 380 (1973) (stating that "repetitive lawsuits carrying the hallmark of insubstantial claims" fall within the sham exception). 53. CaliforniaMotor, 404 U.S. at 512. 54. 486 U.S. 492 (1988). 55. See id. at 516 (White, J., dissenting). 56. 486 U.S. at 508 n.10. 57. See id. Claims of a "sham" had become so devoid of meaning that courts were holding tration of the problem was ironically provided by White's dissent and the leading appellate proponent of this open-ended interpretation of the sham exception: each had reached directly contrary conclusions about the conduct in Allied Tube-one concluding it was a sham, and the other concluding it was not-without ever identifying the factors that led to their different conclusions.5 8 From now on, the Allied Tube Court stressed, the sham exception would only cover "activity that was not genuinely intended to influence governmental action."5 9 Unfortunately, with the sham exception properly limited, the Court had no ready doctrinal tools for grappling with the case at hand. The Court could not deny that the effort to influence government action was "genuine," as the association's code was widely adopted into legislation by state and local governments.' Nor could it claim the direct effects on the Code were not "incidental" to the petitioning efforts. Influencing the association's code was probably the "most effective means" of influencing legislation on the topic, and the effects of the "widespread" legislative adoption likely dwarfed the direct effects of the association code on the marketplace. 6 At the same time, the case at hand involved firms exercising decisionmaking authority to formulate an association product standard that would in effect bind the association's members in an agreement to boycott a product of the firms' competitors. It was inconceivable that such a horizontal agreement about market behavior could be immunized from antitrust liability solely because the government might be persuaded by the example to adopt the same market restraint into law itself. If antitrust petitioning immunity applied to concerted market behavior that genuinely influenced the government, then a variety of bizarre results would follow: "[C]ompetitors would be free to enter into horizontal price agreements as long as they wished to propose that price as an appropriate level for governmental ratemaking or price supports. Horizontal conspiracies or boycotts designed to exact higher prices or other economic advantages from the government would be immunized .... ,,62 The Court was thus faced with the difficult task of erecting a new doctrinal edifice to replace the shaky one it had razed. It attempted to do so by declaring that antitrust petitioning immunity depended on the that alleging a sham failed to provide a defendant with adequate notice of a plaintiff's claim. See AREEDA & HOVENKAMP, supra note 10, %203.4b, at 55-56 (collecting cases). 58. Compare Sessions Tank Liners v. Joor Mfg., 827 F.2d 458, 465 (9th Cir. 1987) (sham), vacated, 487 U.S. 1213 (1988), with Allied Tube, 486 U.S. at 516 (White, J. dissenting) (not a sham). 59. Allied Tube, 486 U.S. at 508 n.10; see also id. at 500 n.4. This position was reaffirmed in City of Columbia v. Omni Outdoor Advertising, 111 S. Ct. 1344, 1354 (1991). 60. See Allied Tube, 486 U.S. at 502. 61. Id. at 502-03. 62. Id. at 503 (citations omitted). "source, context, and nature" of the anticompetitive restraint sought to be remedied." The rule Allied Tube laid down was relatively straightforward when the source of the restraint was "valid governmental action."" In such a case, the immunity of those urging the governmental action is "absolute."6 Thus, the defendants in Allied Tube had no liability for the market injuries resulting from the governmental adoption of the association's code. 6 Complexities arose, however, where the direct source of the restraint was "private action," in the sense that the restraint would occur whether or not the government took action. Antitrust petitioning immunity applied to such private restraints only if the restraint was (1) "incidental" to a (2) "genuine" and (3) "valid" effort to influence the government. 67 In Allied Tube, as noted above, the "incidental" and "genuine" prongs of this three-part test were amply satisfied. The determinative question was whether the effort was "valid." Such determinations of validity, the Court stated, depend on the context and nature of the activity.6 In the case at hand, the Court concluded, the context and nature of defendants' conduct made it "commercial activity" that did not enjoy antitrust petitioning immunity. 9 It based this conclusion on two factors: (1) the conduct occurred in the context of a private standard-setting association where the normal rules of legality are provided by antitrust law itself; and (2) the nature of the conduct was exercising decisionmaking authority over market behavior, namely agreeing not to trade in plastic conduit.70 This was certainly an improvement on the loose Continental Ore commercial exception; at least some factors sufficient to lose immunity had been spelled out. But unfortunately, this approach did not answer the question that the dissent and others wanted answered: what other contexts and natures would also be denied immunity? Because the Court did not list the contexts and natures that did and did not merit immunity, its approach left the scope of petitioning immunity ill-defined. Worse, because the Court did not articulate why the nature and context of the conduct in Allied Tube meant it deserved no immunity, it provided no underlying policy to help guide the resolution of doctrinal ambiguities and gaps. The next case in the new trilogy was FTC v. Superior Court Trial 63. Id. at 499. 64. Id. 65. Id. 66. Id. at 498 & n.2, 500. 67. Id. at 499-500 & n.4. 68. Id. at 499-500. 69. Id. at 505-07 & n.10. 70. Id. at 506-07. Lawyers Ass'n.71 In this case, an association of trial lawyers had collectively agreed not to represent indigent criminal defendants until the District of Columbia increased the fees it paid the lawyers for such representation. In response the city agreed to pay the fees the boycotters requested. 72 The trial lawyers claimed antitrust petitioning immunity for their boycott on the ground that it was aimed at securing governmental action. The Supreme Court denied immunity. Justice Stevens' opinion for the Court offered the following explanation: [I]n the Noerr case the alleged restraint of trade was the intended consequence of public action; in this case the boycott was the means by which [the trial lawyers] sought to obtain favorable legislation. The restraint of trade that was implemented while the boycott lasted would have had precisely the same anticompetitive consequences during that period even if no legislation had been enacted. In Noerr, the desired legislation would have created the restraint on the truckers' competition; in this case the emergency legislative response to the boycott put an end to the restraint. 73 This would be more illuminating but for the fact that the Court's characterization of Noerr was inaccurate. As we saw in Section I.A, Noerr did not involve only restraints caused by public action. The publicity campaign had also restrained trade directly by impairing relations between truckers and their customers.74 This restraint was a consequence of private action rather than public action in precisely the sense the TrialLawyers Court meant: it would have had the same anticompetitive effects whether or not the government had acted. 75 Thus, the means/consequence distinction did not explain the different holdings in Noerr and TrialLawyers. The only other reasoning Justice Stevens offered for the Court's conclusion was Allied Tube's dicta that horizontal price-fixing, boycotts, or output restrictions could not be immunized even if genuinely intended to influence governmental action.7 6 This provided no general delineation of the scope of antitrust petitioning immunity. But it did make two important contributions to the doctrine. First, it elevated this dicta to holding. Second, it established that collective decisionmaking over market behavior (the second Allied Tube factor) would, at least if used as the means to influence governmental action, suffice to deprive the activity of immunity 71. 493 U.S. 411 (1990). 72. Id. at 418. 73. Id. at 424-25. 74. Eastern R.R. Presidents Conference v. Noerr Motor Freight, 365 U.S. 127, 129, 133, 142 (1961). 75. Id. at 133 (stating that the campaign "injured the truckers in ways unrelated to the passage or enforcement of law"). 76. TralLawyers,493 U.S. at 425 (quoting Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 503 (1988)). even if the activity occurred in a public, highly political context.77 The last case in the new trilogy is City of Columbia v. Omni Outdoor Advertising." The defendant, the jury found, had conspired with municipal officials to obtain the enactment of zoning ordinances that restricted billboard construction by the defendant's competitor. The Court decided that, with the possible exception of a case where the government acted as a market participant, no conspiracy exception should be recognized to antitrust's immunity for either state action or petitioning activity.7 9 A general conspiracy exception, the Court reasoned, would swallow the immunity because any governmental action could be said to result from an agreement between government officials and those who petitioned for the action. 0 This helped clarify the scope of the conspiracy exception. Unfortunately, Justice Scalia's opinion for the Court muddied the waters when it came to discussing the plaintiff's argument that the sham exception should apply. The opinion stated that the sham exception "encompasses situations in which persons use the governmentalprocess-as opposed to the outcome of that process-as an anticompetitive weapon."" But, like the means/consequence distinction put forth in TrialLawyers, this reasoning is unsatisfactory: it does not explain why immunity applied in Noerr when the process of petitioning the government was used to inflict direct injuries. Justice Scalia's opinion tried to avoid this problem through two maneuvers. The first was to imply that the defendant's motives were determinative. The opinion stated, "Although [the defendant] indisputably set out to disrupt [the plaintiff's] business relationships, it sought to do so not through the very process of lobbying.., but rather through the ultimate product of that lobbying and consideration .... But these motives are not mutually exclusive. In Noerr and Allied Tube, the defendants were acknowledged to have both the motive of securing governmental action and the motive of directly harming competitors through the acts of petitioning.8 3 One suspects that had the jury been asked to make findings on the issue, the Omni defendants might also have been found to have such mixed motives. In any event, most petitioners are unlikely to have the purity of 77. The Court also established that it would suffice if the collective market behavior was a per se antitrust violation: possession ofmarket power was not necessary to lose antitrust immunity. Id. at 428-36. 78. Ill S. Ct. 1344 (1991). 79. Id. at 1351, 1353, 1355-56. 80. Id. at 1351 (citing AREEDA & HOVENKAMP, supra note 10, %203.3b, at 34 & n.1 (Supp. 1989); Elhauge, supra note 25, at 704-05). 81. Id. at 1354. 82. Id. 83. Allied Tube, 486 U.S. at 502-03; Eastern R.R. Presidents Conference v. Noerr Motor Freight, 365 U.S. 127, 142, 144 (1961). motive attributed by Justice Scalia to the defendant in Omni. Petitioners seeking governmental action to stifle their competitors are (like the peti'tioners in Noerr and Allied Tube) likely to take pleasure in any expense, delay, and interference their activity directly inflicts on competitors. The Omni analysis does nothing to help guide courts in these mixed motive cases. As Noerr and Allied Tube demonstrate, immunity or non-immunity remain possible outcomes. The second maneuver was to suggest that the exception for injuring competitors through the process of petitioning applied only when the defendant had "no expectation of achieving" the desired governmental result.84 This, at least after Allied Tube, correctly describes the modern sham exception. But the cases that have denied immunity where the petitioning process directly injures competition-California Motor, Walker Process,Allied Tube, and Trial Lawyers-do not fit within this definition of a sham. Justice Scalia mistakenly thought that at least California Motor could be squeezed into the modern sham exception. His Omni opinion noted that, despite language in CaliforniaMotor about improper petitioning activities being shams, the actual case involved allegations that the defendants litigated "'with or without probable cause, and regardless of the merits of the cases.' "85 Justice Scalia concluded from this that the defendants in CaliforniaMotor had made no genuine effort to influence the courts, and that any language about an immunity exception for genuine but improper efforts to influence the government could be ignored as dicta.86 However, the factual premise for Scalia's analysis-that the defendants in CaliforniaMotor had no expectation of obtaining favorable governmental action-is false. As previously noted, the defendants had in fact prevailed in twenty-one out of forty cases.87 Not only did their litigations have a genuine chance of success, but they were batting over .5001 This explains why Justice Douglas felt obliged in his CaliforniaMotor opinion to assess the antitrust immunity for various genuine but invalid methods of petitioning. CaliforniaMotor denied immunity not because the petitioning there was not genuinely intended to secure governmental action, but because the petitioning was, under traditional adjudicative norms, an abuse of process: that is, litigation brought in order to impose costs and delays. Whether such a motive should be sufficient to lose immunity even if the defendant also has a motive of winning the adjudication, or whether the 84. Omni, III S.Ct. at 1354-55. 85. Id. at 1355 (quoting California Motor Transp. Co. v. Trucking Unlimited, 404 U.S. 508, 512 (1972)). 86. See id. 87. See supra text accompanying note 47. "predominant" motive should govern, are complicated questions that I will discuss below.88 But they are questions that Omni's facile characterization does nothing to help answer. One might be tempted to read Omni as overruling the holding in CaliforniaMotor 9 to establish a new rule that genuine efforts to secure governmental action are always immune,9 0 with a possible exception for cases where the petitioner seeks to influence the government's actions as a market participant.9 ' But such a sweeping expansion of antitrust petitioning immunity would have to overrule more than CaliforniaMotor: it would also have to overrule Walker Process, Allied Tube, and probably Trial Lawyers.92 In all of those cases, the defendants received no antitrust immunity even though they genuinely desired, and successfully obtained, favorable governmental action. Unfortunately, Justice Scalia's opinion simply ignored these contrary holdings. Surely the Court did not intend to overrule such an extensive line of cases without discussing the matter, especially since Justice Scalia himself had joined the Court opinions in Allied Tube and Trial Lawyers.93 But the Omni opinion leaves unexplained what exactly the grounds for distinction were. C. The RemainingDoctrinal Confusion The new trilogy of cases has helped settle some issues, but antitrust petitioning immunity remains a doctrine without any clear moorings. It is more certain than ever that not all activities genuinely aimed at influencing the government receive immunity for their direct effects. Walker 88. See infra text accompanying notes 256-76. 89. The CaliforniaMotor Court's explanation for its holding, that improper petitioning activity is a sham, was overruled in Allied Tube. See supra text accompanying note 56. The holding itself, however, remained intact. 90. The opinion contains some loose language to support such an interpretation. It makes sweeping statements of immunity, eg., Omni, 111 S. Ct. at 1354 ("[F]ederal antitrust laws... do not regulate the conduct of private individuals in seeking anticompetitive action from the government."), limited only by the statement that there is a sham use-of-process exception, id. at 1354-55. 91. In rejecting the conspiracy exception to state action immunity, the Court explicitly left open the possibility that the immunity might not apply when the government acted as a market participant. Id. at 1351, 1353. The Court did not explicitly leave open this market participant exception when it rejected the conspiracy exception to antitrust petitioning immunity. See id. at 1355-56. But since the explanation for the latter rejection simply incorporated the reasoning used for the former, id. at 1355, presumably it also incorporated the limits of that reasoning and thus included the possibility of an exception where a petitioner conspires with a government acting as a market participant. 92. The holding in TrialLawyers might be explained on the ground that the city government there was acting as a market participant, see supra note 91, in purchasing legal services. This distinction is only significant, however, if the government conspires with the petitioner. In Trial Lawyers the city was coerced by the defendants, not in conspiracy with them. 93. Chief Justice Rehnquist and Justice Kennedy also joined all three Court opinions and Justice Blackmun joined both Allied Tube and Omni, as well as those portions of TrialLawyers that interpreted Noerr,Allied Tube, and ClaiborneHardware. Process, California Motor, Allied Tube, and Trial Lawyers all denied immunity to activity that not only was genuinely intended to influence the government, but succeeded in doing so. But which such activities receive immunity and which do not? After decades of decisions, no clear rule has emerged. The open-ended use of the sham and conspiracy exceptions to decide this question has correctly been rejected. But while the sourcecontext-nature test focuses attention on some relevant factors, it cannot provide doctrinal certainty as long as the Court is unable to make any definitive statement about which sources, contexts, and natures lead to immunity and which do not. The means-consequence and process-outcome tests also identify some relevant factors, but fail to articulate other factors that are necessary to explain the Court's case law. The opinions also leave mixed messages about various more particular doctrinal questions. For example, should it matter whether the government is acting as a market participant? Omni and Continental Ore suggest the answer may be "Yes." But Pennington granted immunity despite governmental participation in the market. And if market participation is not the measure of "commerciality," what is? Where fraudulent means are used to obtain administrative or judicial action, should the petitioner be immune for the effects? Dicta in Allied Tube suggest the petitioner is immune for the effects of the governmental action, but not for any direct effects of such petitioning. Dicta in Omni suggest the petitioner is immune for both effects. Dicta in CaliforniaMotor suggest the petitioner is not immune for either. And the only case to actually involve such a situation, Walker Process, held the petitioner liable for both effects, but did not discuss the issue. When is a restraint incidental to petitioning efforts? This issue has never been explored by the Court. Perhaps the restraint must simply be connected to the petitioning effort. Perhaps it must be necessary for the petitioning. Or maybe the restraint's effects must be small compared to the political effect. The opinions do not resolve the question. Finally, what about mixed motive cases, where the process of petitioning is used both in hopes of obtaining governmental action and in order to impose expense and delay on competitors? Does any motive to impose costs and delay suffice to lose immunity? Or must the motive be significant or predominant? And how does one resolve either question? This degree of uncertainty would be troubling for any doctrine. But it is deeply disturbing for a doctrine that purports to define the scope of the freedom to petition the government. II THE BASIC STRUCTURE OF ANTITRUST PROCESS The doctrinal confusion that besets antitrust petitioning immunity has a source. It stems not from a lack of judicial skill in resolving the doctrinal gaps and ambiguities, but from the lack of any coherent explanation of the policies defining the scope of antitrust petitioning immunity. Without some basic policy framework to guide resolution of doctrinal questions, it was entirely predictable that the doctrine would seem chaotic. The Court has so far failed to provide this policy framework. The Noerr Court did, to be sure, articulate the affirmative reasons for immunity: assuring governments the information necessary to govern, and assuring citizens the ability to communicate their views to the government.94 But the Court has never articulated a coherent policy justification for the limitations on this immunity. Academics have not done much better. They typically frame issues of antitrust petitioning immunity as accommodating a tension between First Amendment freedoms and federal competition policy.9" This conceptual framework obscures more than it illuminates. In cases of true conflict, fundamental constitutional principles require that any tension be resolved in favor of the First Amendment. In cases beyond the scope of constitutional protection, any tension must be resolved in favor of the governing federal statute.96 In any event, explaining that issues must be adjudicated by accommodating a "tension" does nothing to structure doctrine, guide courts in adjudicating cases, or notify parties about how to conform their activities to the law. To provide a more useful policy framework, I take an objective functional process approach. The aim is to chart, in line with functional criteria, the types of decisionmaking processes producing restraints that do and do not receive immunity. The approach is process-oriented in 94. See Eastern R.R. Presidents Conference v. Noerr Motor Freight, 365 U.S. 127, 137-39 (1961). 95. See, eg., Calkins, supra note 9, at 328; Hurwitz, supra note 10, at 66, 119; Ronald E. Kennedy, PoliticalBoycotts, the Sherman Act, and the FirstAmendment: An Accommodation of Competing Interests, 55 S. CAL. L. REv. 983, 986, 1009, 1028-29 (1982); Kintner & Bauer, supra note 11, at 552. 96. Where the applicability ofneither the Constitution nor a federal statute is clear, one canon of statutory construction counsels construing the statute to avoid constitutional questions. See Cass R. Sunstein, InterpretingStatutes in the RegulatoryState, 103 HARV. L. REV. 405, 469 (1989). But this canon has been persuasively critiqued by others as an unjustified extension of the scope of constitutional limitations. See HENRY J. FRIENDLY, BENCHMARKS 210-12 (1967); RICHARD A. POSNER, THE FEDERAL COURTS 284-85 (1985). If the best, though not absolutely mandated, reading of a statute raises constitutional questions but ultimately is constitutional, construing the statute to avoid those questions will, without justification, deny the implementation of our best understanding of legislative policy. More persuasive is the canon that requires construing statutes to avoid only actual constitutional invalidity. that (like, I will show, the case law) it focuses on the nature and incentive structures of the decisionmaking processes producing the restraint and not on the substance of those restraints. The approach is objective in the sense that it focuses on objective indicia about the incentives of the participants in the decisionmaking process. It does not, as the doctrine does not, focus on the purity of the participants' subjective motivations. From this process perspective, as we will see, much of the apparent tension disappears, and the more narrow conflict between the competitive and political processes can better be isolated and resolved. Before beginning, a few words about nomenclature are appropriate. I describe the doctrine being analyzed simply as "antitrust petitioning immunity." I do not call it the Noerr doctrine or the Noerr-Pennington doctrine, because those designations misleadingly focus attention on cases that offer minimal guidance for the more complex issues now facing the courts and that have, to a large extent, been transcended by the subsequent Supreme Court case law. Moreover, I use the term "antitrust immunity" quite generally to signify when the ordinary standards of antitrust review, which impose liability unless the procompetitive effects outweigh the anticompetitive effects,9 7 are inoperative. The standards may be inoperative for reasons inside or outside of antitrust, and inside or outside antitrust's rule of reason. 98 I thus intentionally do not specify whether the doctrine is an "exemption." Nor do I specify whether it is an interpretation of the antitrust statutes or mandated by the First Amendment. Much ink has been spilt debating these questions,9 9 and the Supreme Court's ambiguous statements on the issue have provided plenty of fodder for all sides in the debate. It is more fruitful, however, to focus not on the ambiguous dicta but on what practical import the answers have. Here, the main implication drawn is that courts should narrow the 97. See, eg., FTC v. Indiana Fed'n of Dentists, 476 U.S. 447, 459 (1986); National Soc'y of Professional Eng'rs v. United States, 435 U.S. 679, 688-96 (1978). 98. For example, the Supreme Court, while denying immunity under the state action doctrine to municipal action unauthorized by the State, see Community Communications Co. v. City of Boulder, 455 U.S. 40 (1982), has suggested that special liability rules might apply to municipal action, see id. at 56 n.20. If such special liability rules were developed to preclude municipal liability for any restraints that had no effect outside municipal boundaries, then, in the sense I use the term, an "immunity" would apply to municipal restraints lacking extraterritorial effects. 99. For the argument that antitrust petitioning immunity is based on the First Amendment, see, e.g., Fischel, supra note 14, at 81-84, 94-104; Lawrence D. Bradley, Note, Noerr-Pennington Immunityfrom AntitrustLiability Under Clipper Exxpress v. Rocky Mountain Motor Tariff Bureau, Inc.: Replacing the Sham Exception with a ConstitutionalAnalysis, 69 CORNELL L. REV. 1305 (1984). For the argument that it is simply a matter of statutory interpretation, see, e.g., Handler & De Sevo, supra note 35, at 4-5; Robert A. Zauzmer, Note, The Misapplication of the Noerr. Pennington Doctrine in Non-Antitrust Right to Petition Cases, 36 STAN. L. RaV. 1243, 1251-53 (1984). For courts calling it an exemption to the Sherman Act, see Handler & De Sevo, supra note 35, at 5 n.16 (collecting cases). doctrine whether it is an exemption l°° or co-extensive with the First Amendment.101 This is because exemptions are, by antitrust tradition, construed narrowly,10 2 and because the First Amendment provides limited protection against content-neutral regulations unless they unduly burden speech without leaving open alternative avenues of expression."0 3 These implications suggest answers, on a descriptive level, to the debated questions because there is plainly no operative tradition of construing antitrust petitioning immunity narrowly and the immunity in fact does extend beyond the limits of First Amendment protection) °4 These implications also suggest why the debated questions prove unhelpful on a normative level. Whether, as a matter of policy, the doctrine should be deemed an exemption depends on whether one believes it should be narrowly construed, and whether it should be deemed solely a First Amendment doctrine depends on whether one believes it should extend beyond the limits of the First Amendment. Nothing is gained by addressing the debated questions in their abstract sense rather than proceeding directly to the substantive issues, and much may be lost if doctrinal issues are mishandled because attention from the substantive issues is diverted. It is to those substantive issues about decisionmaking processes that I now turn. The Core Elements: Defining Privateand Public Decisionmaking A framework for analyzing the complex issues of antitrust petitioning immunity from a process perspective should begin with certain core elements: namely, decisionmaking processes that clearly are or are not within the scope of antitrust. I begin with the sort of decisionmaking process that produces the restraints ordinarily adjudicated in antitrust cases: restraints set by private businesses without any governmental involvement in their decision. Two businesses, for example, agree to boy 1992] Of course, using litigation to impose costs on competitors cannot, in general, have any anticompetitive effect unless the defendants exercise or orchestrate the market power to raise prices once their rivals' costs (or behavior or existence) have been changed.25 4 Because the warrant for imposing antitrust liability-rather than ordinary tort liability for abuse of process-is that strategic litigation abuse might affect competition, this suggests that market power should be a necessary element to finding antitrust liability for abuse of process litigation. Moreover, market power is a prerequisite to liability under the Sherman Act except for certain per se violations,2 5 5 and it would be inappropriate to treat abuse of process litigation as a per se violation because such litigation is often difficult to distinguish from meritorious litigation. This brings us to the fourth issue, which is the one that has most perplexed courts and commentators, and which is currently pending before the Supreme Court: how can a court determine when a litigant has engaged in abuse of process litigation?2" 6 A typical statement is that "[t]he line is crossed when [the defendant's] purpose is not to win a favorable judgment against a competitor but to harass him, and deter others, by the process itself-regardless of outcome-of litigating."2 7 But it is hard to find the litigant who does not have both aims. The most strategic of litigants genuinely hope they win, even if the odds may not look good, and the most nonstrategic of litigants usually dislike their opponents enough to take some pleasure in inflicting litigation costs on them. If a genuine hope of winning sufficed to receive immunity, then abuses of process would effectively go undeterred, and predatory litigation would flourish. If, on the other hand, a purpose of harassing opponents sufficed to lose immunity, then firms would fear to bring even meritorious litigation against their competitors. The mere existence of either motive should thus not suffice to establish immunity or non-immunity. Some weighing of the motives must be made. One method is to determine the defendant's subjective intent, 258 which where motives are mixed means determining which motive subjectively dominated the defendant's mind. This approach is in some tension with the general objective process approach, but is perhaps justified because the prevailing regulatory standards-abuse of process normsincorporate a primary intent test.2 59 Nonetheless, an objective test for determining intent is preferable for the reasons articulated above." ° Subjective intents are too easy to hide-and allege. Courts required to determine subjective intents will thus be forced to speculate about something that is, in truth, largely unknowable. Worse, because the inquiry is so unstructured, determinations of subjective motive will likely be influenced by the hidden biases of judges and juries against (or for) certain types of litigation or litigants. Three principal efforts have been made to give objective content to the process/outcome intent test. One asks whether the chances of winning were "reasonable," 2'6 which can be much the same as asking whether there was "probable cause" to bring the suit.26 2 This test entails examining the extent of legal and factual support for the party's position.2 63 But penalizing litigation whenever the chances of success are low would bar "creative" legal arguments from legal discourse.2" And it is hard to see what plausible test based on the chances of winning could possibly explain excluding a litigant with a 52.5% success rate, as CaliforniaMotor did.2 6 If, in response to these problems, one interprets the reasonable expectation test as referring to something other than the likelihood of success, then the test offers no guidance at all because which expectations are "reasonable" becomes a completely conclusory 266 judgment. A second test asks whether the motive of securing judicial relief was a "significant" factor behind the decision to sue.26 7 Unfortunately, this test also leaves the judicial inquiry unstructured. Not only is there no definition of what "significant" means, but the criteria that would go into deciding significance are left uncertain. The test does suggest that courts 1992] should look not only at the chances of success but also at the stakes for the litigating party, since both no doubt affect decisions to litigate.2 6 But the test fails to explain how courts should weigh these factors. Judge Posner has offered a more structured approach. In Grip-Pak he stated that there should be no immunity when the value of a favorable judgment, discounted by the uncertainty of prevailing, is less than the cost of suit. 269 The main objection to this test is that it discourages the filing of legitimate or novel claims,2 70 especially when one takes into account the possibility of judicial error. But this objection is not dispositive because any doctrine can offer at best imperfect regulation. Efforts to deter undesirable conduct inevitably deter some desirable conduct, and the best we can hope for is a system that achieves the optimal tradeoff.27 1 Here the unavoidable tradeoff is between deterring predatory litigation and deterring legitimate suits; we cannot deter the former without deterring some of the latter. 272 Nonetheless, a number of factors suggest that Posner's test overly constricts immunity. His test effectively denies immunity whenever the prospect of victory is not a sufficient motive for litigation, or, to put the matter another way, whenever the direct injury to competitors is necessary to motivate litigation. But if both this direct injury and the prospect of favorable judgment are necessary motives for litigation (and thus neither is a sufficient motive), one cannot say that one motive is greater than the other. Posner's objective test accordingly seems somewhat biased toward finding an abusive intent. If anything, the opposite bias seems advisable. Legitimate suits are already somewhat deterred by their costs, and those same costs offer some self-deterrence to strategic litigation. This suggests a greater need to encourage legitimate suits than to deter strategic suits. bans on predatory pricing must balance the benefit of deterring predatory pricing against the cost of deterring desirable price-cutting). The same tradeoff is present for non-antitrust doctrines that deal with the problem of frivolous suits and strategic litigation. See Gilson, supra note 162, at 877-82 (arguing with respect to malicious prosecution and professional rules of conduct that any definition of strategic litigation must trade off over- and underinclusion); Avery Katz, The Effect of Frivolous Lawsuits on the Settlement of Litigation, 10 INT'L REV. L. & ECON. 3, 26 (1990) (concluding that the English rule of assessing legal expenses against the loser may help deter frivolous suits, but only at the cost of deterring meritorious suits). The discussion in the text thus also applies to those doctrines. Further, an antitrust suit brought to challenge strategic litigation carries with it the threat of treble damages. These treble damages, coupled with the direct costs inflicted on an opponent by a suit alleging strategic litigation, mean that the threat of a "sham-sham" suit (i.e., a suit falsely alleging the other side engaged in strategic litigation) will likely carry greater weight than the threat of a "sham" (i.e., strategic) suit. 273 A better test would deny antitrust immunity only if the direct injury was a necessary and sufficient objective motivation for the allegedly strategic litigation. Under this two-part test, the antitrust plaintiff alleging strategic litigation would (in addition to defendant market power) have to show: (1) that the antitrust defendant would not have brought the original suit but for the direct injury imposed on his competitor, and (2) that the defendant would have brought suit even without any prospect of winning in order to inflict the direct costs or delays on his competitor. This test fits better with the significant motive test,27 4 and provides some objective content to the reasonable expectation test. It also lessens the risk that antitrust suits will deter novel and legitimate litigation because it denies immunity only if the direct injury alone would cause the antitrust defendant to sue (and the expected value of winning would not), which is certainly not true for most novel or imaginative claims. The risk is further lessened under my test because litigants would suffer no antitrust liability unless they have been proven to have a market power to raise prices that will be maintained, created, or strengthened by the infliction of litigation costs or delays on their competitors.2 75 While there will no doubt be uncertainties in the test's application, it structures the judicial inquiry far more than the conclusory reasonable expectation or significant motive tests ever could.2 76 273. See Klein, supra note 245, at 249. Treble damages pose a threat because of the inevitable possibility of false positives: that is, unwarranted findings that the original suit was strategic or predatory. 274. The courts using the significant motive test have relied not just on evidence that the suit was not reasonably founded but also on evidence that the defendant would have sued to impose direct costs even without any prospect of winning. See In re Burlington N., Inc., 822 F.2d 518, 528 (5th Cir. 1987), cert. denied, 484 U.S. 1007 (1988). 275. See supra text accompanying note 254-55. 276. Proving strategic litigation will be easier if the defendant has engaged in repetitive litigation, but one-shot lawsuits can also constitute strategic litigation outside the scope of petitioning immunity. See AREEDA & HOVENKAMP, supra note 10, 1 203.1e, at 31-32 (collecting cases); Handler & De Sevo, supra note 35, at 28-30 (same); Hurwitz, supra note 10, at 101 & n.160 (same); Kintner & Bauer, supra note 11, at 574 n.l10 (same). Nor, despite some language in California Motor Transportation Co. v. Trucking Unlimited, 404 U.S. 508, 515 (1972), does it seem necessary to show that the defendant's actions barred the antitrust plaintiff from access to the adjudicatory process. See AREEDA & HOVENKAMP, supra note 10, 1 203.1b, at 22-23 & n.31 (collecting cases); Hurwitz, supra note 10, at 101-02 & n.165 (same). Both these legal conclusions comport with the analysis offered here. Competitors (and, through them, competition) can be hurt by enduring the costs of strategic litigation even though only one suit is brought and even if the costs are not so high as to totally deprive the party of access to the courts. 1992] Validity in the Private Process Allied Tube presented a somewhat more perplexing case. The defendants there chose to influence the government and the market indirectly, by influencing a private standard-setting association to adopt an electrical code that excluded plastic conduit. To some extent, this injured the plaintiffs because the code constituted an implicit agreement by association members to boycott the plaintiff's product. To that extent, the defendants' conduct involved market behavior which, as discussed above, is outside the scope of antitrust immunity. 277 Had the plaintiff's entire injury resulted solely from this collective market behavior, the Court could have stopped with that observation. But much of the plaintiff's injury was reputational. The code's conclusion that plastic conduit was unsafe had a strong influence on non-association members: if a product fell outside the code, private certification laboratories would not certify it, underwriters would not insure it, and many inspectors, contractors, and distributors would not use it.2 78 To determine whether the defendant was immune from damages for these reputational injuries required determining whether the defendant's conduct was valid within the ordinary standards applicable to the context. Here the context was a standard-setting association that was "private" in the sense that the Court uses the term because it comprised market participants and was thus financially interested.27 9 One might represent this decisionmaking process by Diagram K. valid input? * Interested Action Interested Decisionmaking Restraint L-' (Public) Action DiagramK 277. See supra note 205 and accompanying text. 278. See Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 495-96 (1988). 279. In denying immunity, the Court emphasized that the defendants exercised decisionmaking authority over an association that comprised market participants with financial interests at stake. Id. at 501-02, 506-07. Although Professors Areeda and Hovenkamp suggest that immunity might still apply to "'normal' voting" by financially interested association members, AREEDA & HOVENKAMP, supra note 10, 206.2, at 86-87, this suggestion is unfounded. The Court explicitly rejected the notion that complying with association rules should provide immunity. Allied Tube, 486 U.S. at 509. Moreover, the Court held that where "an economically interested party exercises decisionmaking authority in formulating a product standard for a private association that comprises market participants, that party enjoys no Noerr immunity from any antitrust liability flowing from the effect the standard has of its own force in the marketplace." Id. at 509-10. Anyone voting clearly exercises "decisionmaking authority," and voting by financially interested actors-whether "normal" or not (assuming that could be defined)--creates the sort of decisionmaking process calling for antitrust review. The question was what provides the ordinary process standards in this context. In part such standards are provided by the rules of the standard-setting association, under which the defendants' conduct in packing the meeting (while unsavory) was valid.2 80 But the perplexing facet of the case was that, irrespective of association rules, the legal standards governing the private standard-setting process are largely those provided by antitrust law itself.2 8 1 Accordingly, when the Court incorporated the process' prevailing regulatory standards to decide whether the conduct was invalid in a way that abrogated antitrust immunity, it had to incorporate the standards of antitrust review itself. In short, "[t]he issue of immunity in this case thus collapses into the issue of antitrust liability. 282 This conclusion should not be misinterpreted as meaning, as the lower court held in Allied Tube,28 3 that indirect efforts to petition the government by petitioning a private organization should not receive antitrust immunity. Imagine, for example, that DuPont petitions the Democratic Party or the Sierra Club to adopt organizational platforms calling for governmental restrictions on fluorocarbons. An antitrust suit is brought alleging that DuPont is financially interested because, unlike its competitors, it has alternative means of producing spray cans that do not use fluorocarbons. Under the Court's doctrine, antitrust immunity would still apply as long as DuPont's efforts conformed with the ordinary political standards governing efforts to influence political parties and organizations.28 4 . Under the lower court's direct/indirect distinction, immunity would not have applied because no public official was directly petitioned. Such a direct/indirect distinction would have seriously restricted petitioning rights because the real movement of political ideas generally occurs not in legislative hearings but in the countless private fora that create organizational agendas and mold public opinion. A denial of immunity for indirect petitioning would thus have been chilling indeed to First Amendment freedoms. We are now in a position to unpack what has been lumped together as a "commercial" exception to antitrust petitioning immunity. Commerciality, the discussion so far demonstrates, may be relevant in no less than three distinct senses. First, the governmental action may be commercial in the sense that the government or its officials have a financial interest in the government's restraint of trade. This would deprive the petitioner of immunity for any direct restraints and, where it shares deci280. See Allied Tube, 486 U.S. at 509. 281. See id. at 500-01, 506-07. 282. Id. at 509. 283. Indian Head, Inc. v. Allied Tube & Conduit Corp., 817 F.2d 938, 945-46 (2d Cir. 1987), aff'd on othergrounds, 486 U.S. 492 (1988). 284. Accordingly, the Allied Tube Court rejected the direct/indirect distinction, noting that the petitioning in Noerr itself was indirect. Allied Tube, 486 U.S. at 503. 1992] sional responsibility, for the government's restraint. Second, the defendant's conduct may involve financially interested market behavior. The petitioner would still be immune for the government's restraint unless the government was coerced, but would not have immunity for any direct effects of the market behavior. Finally, the commerciality of the governmental activity or the petitioning may determine the appropriate contextual standard to judge the validity of the petitioning. Where this commercial context means the petitioning is invalid, its direct effects enjoy no immunity, but the governmental action normally does. 4. PoliticalBoycotts that Do Not Coerce the Government We come next to the topic of non-coercive political boycotts; that is, boycotts designed to raise consciousness and influence public opinion which do not c6erce the government. For example, suppose gas stations agree to close during certain periods to protest governmental price regulations. Should this boycott be immune? So far, courts have split on the issue.285 The issue is distinguishable from that in TrialLawyers because here the boycotters are not boycotting or coercing the government directly. The restraint on the public has coercive aspects, but the input into the government may not be coercive. The issue is thus closer to that in Allied Tube: market behavior that produces both a financially interested restraint and persuasive input into the political process. Nonetheless, there may be some indirect coercion of the government if the boycott coerces voters to in turn exert pressure on the political process. In any event, whether under Allied Tube or TrialLawyers, the analysis above suggests that if the boycotters have a financial interest in the boycott, no immunity should apply. This is supported by dicta in Allied Tube, which listed a parade of horribles intended to show the unacceptable consequences of the absolutist position that immunity applies to all activity genuinely intended to influence the government. Among the unacceptable horribles, the Court included: Horizontal conspiracies or boycotts designed to exact higher prices or other economic advantages from the government would be immunized on the ground that they are genuinely intended to influence the government to agree to the conspirators' terms. Firms could claim immunity for boycotts or horizontal output restrictions on the ground that they are intended to dramatize the plight of their industry and spur legislative action.286 The two sentences signal the Court's understanding of the distinction 285. Compare Osborn v. Pennsylvania-Del. Serv. Station Dealers Ass'n, 499 F. Supp. 553, 558 (D. Del. 1980) (not immune) with Crown Cent. Petroleum Corp. v. Waldman, 486 F. Supp. 759, 769 (M.D. Pa.) (immune), rev'd on othergrounds, 634 F.2d 127 (3d Cir. 1980). 286. Allied Tube, 486 U.S. at 503 (citation omitted). between two different sorts of political boycotts, those that coerce the government and those that do not. They also indicate the Court's sentiment that (at least where financially interested) neither merits immunity. TrialLawyers echoed both sentiments, 287 as well as providing the holding that cemented the first. Where the boycotters have no financial interest in the anticompetitive consequences of the boycott-that is, they do not benefit financially either from lessening competition in the boycotted market or from inducing the boycotted parties to lessen competition in other markets-the issue is different. To some extent, such financially disinterested boycotts are immunized under Claiborne Hardware, where the boycott to end racial discrimination was aimed not only at government officials but also at private merchants.288 And, as I argue above, because such disinterested action cannot usefully be channeled into a competitive process, antitrust review may be unhelpful from an objective process standpoint.28 9 This distinction between financially interested and disinterested boycotts provides a sounder basis for the decision in Missouri v. National Organizationfor Women (NOW) than the Eighth Circuit was able to provide.290 That case concerned a boycott, organized by NOW, of convention facilities located in states that had not ratified the Equal Rights Amendment. The Eighth Circuit held that the boycott was immune because (1) the ultimate goal was political, not economic, legislation and (2) the boycotters were motivated by political objectives, not profit. 29 1 Unfortunately, both these tests are ambiguous and raise the specter of sub rosa judicial bias. How can we tell that the Equal Rights Amendment is political and not economic? Surely it would re-order economic relations in employment. And what about other boycotts, like one designed to encourage bans on allegedly unsafe products? Such bans may have noneconomic objectives, but they restrict competition. The inevitable risk is that judges will tend to conclude that the sort of legislation they favor is political and the sort they disfavor is merely economic. Perhaps judges can discipline themselves to avoid this tendency, but without any intelligible criteria for sorting political from economic legislation, they have little else to rely on besides their gut intuitions. In any event, the judicial ability to resist the temptation to impose judicial views is not limitless. Like other scarce items, it should be economized. Similar problems beset a test focusing on whether the boycotters were subjec287. FTC v. Superior Court Trial Lawyers Ass'n, 493 U.S. 411, 425 (1990) (quoting Allied Tube, 486 U.S. at 503). 288. See supra text accompanying notes 165-67. 289. See supra text accompanying note 164. 290. 620 F.2d 1301 (8th Cir.), cert. denied, 449 U.S. 842 (1980). 291. Id. at 1311-12. tively motivated by financial gain or by political objectives, and for that reason subjective motives are not used under the functional process approach-or the Court's case law-in determining whether antitrust immunity applies.29 2 What should have been considered decisive was the fact that, objectively speaking, the boycotters in NOW had no financial interest in any anticompetitive consequences of the boycott. They did not compete with convention facilities and had nothing financial to gain from lessening competition in the convention market.29 3 To be sure, some of the boycotters might have gained financially if the Equal Rights Amendment had been enacted because they would have gotten better jobs or pay.2 94 But one could have said the same about the boycotters in Claiborne Hardware. In both cases, however, this financial interest was never actually established and would in any event have been attenuated and inapplicable to many of the boycotters, especially those who were male in NOW and white in Claiborne. More importantly, the question here is whether the boycotters had a financial interest in the anticompetitive consequences of the restraint imposed by their actions, not whether they had a financial interest in whatever governmental action might have ultimately resulted. They are immune for any results of the government action, absent evidence that the government was coerced by a boycott that had market power.295 But they lose their immunity for the direct results of their boycott, with or without a showing of market power, if they would have benefitted financially from a lessening of competition in the boycotted market or from inducing the boycotted parties to lessen competition. In NOW, the boycotters had no financial stake at all in the boycott's nongovernmental consequences, and thus rightly received immunity. In ClaiborneHardware, the boycotters had no financial interest in lessening competition among white merchants. And although some boycotters may have had a financial interest in directly inducing white merchants to end job discrimination, the end of such discrimination does 292. See supra text accompanying notes 161-63. See generally AREEDA & HOVENKAMP, supra note 10, 1 113.1, at 7 (noting difficulty of parsing mixed motives). Also raising problems of ambiguity and sub rosa judicial bias would be a doctrine that immunized boycotts with an "expressive component." Such a doctrine was appropriately rejected in FTC v. Superior Court Trial Lawyers Ass'n, 493 U.S. 411, 428-32 (1990). 293. NOW, 620 F.2d at 1303 (summarizing lower court's factual findings). If, instead, the boycotters included hotels from states that had ratified the Equal Rights Amendment, who would have benefited financially from the shift in business from non-ratifying states, those hotels would not have merited antitrust immunity, no matter how pure they claimed their subjective motives were. Cf AREEDA & HOVENKAMP, supra note 10, % 113.1, at 6 (arguing that immunity should presumptively, but not conclusively, be denied to such hotels). 294. See AREEDA & HOVENKAMP, supra note 10, 1113.1, at 6; Minda, supra note 24, at 984 n.288. 295. See supra text accompanying note 179. not lessen competition but increases it by making jobs available to more applicants. If instead the boycott aimed to induce white merchants to hire a minimum quota of blacks, then any financial interest for boycotters who were black job seekers would flow from direct anticompetitive consequences of the boycott (because competition for certain slots would be decreased) and no immunity would have applied.2 96 V LIABILITY FOR GOVERNMENTAL ACTION? The final issue is whether there are any circumstances where petitioners should be liable for.restraints imposed by governmental decision. I have already adverted to one such issue: petitioners should be liable for governmental restraints that resulted from petitioner coercion. 297 But where the petitioner urges, rather than coerces, governmental action, then one must contend with the following language from Allied Tube (quoting Noerr): "'[W]here a restraint upon trade or monopolization is the result of valid governmental action, as opposed to private action,' those urging the governmental action enjoy absolute immunity from antitrust liability for the anticompetitive restraint."2'9 8 This raises the question of what, within the functional process framework, constitutes "valid," instead of invalid, governmental action. One possible meaning of invalid governmental action, which might seem to correspond to the meaning of invalid petitioning described above, would focus on whether the governmental action was legal within the procedural, administrative, or constitutional standards that apply to that government action. And indeed, in the past, some commentators have argued that there should be no immunity when the petitioner seeks government action outside the scope of the government's authority.2 99 Immunity would, for example, be denied under this position if the petitioner obtains legislative action that violates the state constitution or agency action that exceeds the agency's statutory authority. This position should, however, be rejected. From a functional process perspective, all that matters is whether the restraint was politically accountable and financially neutral. If it is, it should be immune from 1992] antitrust review because the rationale for antitrust scrutiny does not apply. The other legal remedies for exceeding the government's authority should be adequate. If the so-called governmental restraint is instead financially interested, then it should be denied antitrust immunity even if the action is otherwise legally authorized by the Constitution or by state or local law."c° Professors Areeda and Hovenkamp, and several courts, have reached a similar conclusion, arguing that immunity should apply to unauthorized governmental action, even if the defendant "knew" the action was unconstitutional or unauthorized.3 0 1 But their reasons are pragmatic. They argue that the motivational inquiry will be difficult, will rarely turn up such knowledge where governmental action was obtained, and will deter petitioning.3 "2 The rationale here, in contrast, is conceptual. Without evidence that a financially interested process produced the restraint, the rationale for reviewing it under antitrust standards simply does not apply. This is not to deny that there are important practical arguments for antitrust courts' refusal to deny petitioning immunity even to bad faith petitions for unauthorized government action, just as there are for antitrust courts' refusal to deny state action immunity even when the government has exceeded its authority in bad faith.30 3 But these sorts of ad hoe pragmatic arguments do not form the basis of a consistent doctrine. A far clearer explanation is that financial interest, not governmental authority, is the real test. More pertinent to the "validity" of the governmental action is whether it would receive immunity under antitrust's state action doetrine."° As I have argued in another article, state action immunity does and should apply whenever the governmental actor is politically accountable and financially disinterested, but does not and should not apply when the governmental actor is financially interested.30 5 It follows that if the state action doctrine immunizes the restraint causing the injury, then the functional process standards described above have been met, and the efforts to procure that restraint should be immune from any antitrust 300. If the governmental action is authorized by federal statute, then we obviously have a question of whether the statute implicitly repeals the application of federal antitrust law. The tradition is to construe such implicit repeals narrowly. See Union Labor Life Ins. Co. v. Pireno, 458 U.S. 119, 126 (1982). 301. AREEDA & HOVENKAMP, supra note 10, 203.2, at 34-37; see also id. 203.2, at 36-37 nn.5 & 7 (collecting supporting cases). 302. See id. 203.2, at 35-37; see also 1 AREEDA & TURNER, supra note 105, 202b, at 39. 303. See Elhauge, supra note 25, at 692 (noting courts hold that the "clear authorization" requirement for state action immunity is met even when the state actors have exceeded or abused their authority in bad faith). This position has been confirmed in City ofColumbia v. Omni Outdoor Advertising, 111 S. Ct. 1344, 1349-50 (1991). 304. For cases holding or suggesting that petitioning immunity should hinge on the existence of state action immunity, see AREEDA & HOVENKAMP, supra note 10, 203.2a, at 35 n.1. For cases holding or suggesting the opposite, see Meyer, supra note 198, at 843 n.54. 305. See Elhauge, supra note 25, at 682-729. liability flowing from it. This is the best way of interpreting what the Court means when it states the governmental action must be "valid." But this does not mean, as is sometimes simplistically said, that petitioning immunity is just the flip side of state action immunity.3 06 For sometimes, as we have seen above, petitioning immunity is denied (to restraints directly produced by the petitioning) even though the petitioning also produced governmental action that does and should receive state action immunity.30 7 Other times, the petitioner may simply be urging a financially interested government to impose a restraint. For example, suppose resident producers of a product mainly sold to out-of-towners encourage their city to set a minimum price at which the product can be sold. In that case there should be no state action immunity because the government is financially interested,30 8 but the petitioners should still be immune because the governmental decision is the one that sets the terms of the restraint.30 9 Where, on the other hand, the petitioner determines the terms of the restraint jointly with a financially interested government (say, for example, by fixing the same sale price for goods sold by both the petitioner and the government) then petitioning immunity does not apply. 3 10 Some commentators have argued that the key question in evaluating petitioning immunity is whether governmental action is the "supervening" or "proximate" cause of the anticompetitive injury.3 11 Although such doctrinal formulations can provide a handy means of reaching the correct conclusions, I do not rely on causation because it is a formal conclusion driven by functional considerations.3 12 One could often reach opposing conclusions about who "caused" the restraint and whether the cause was "supervening." The real key is what functional considerations underlie the causal inquiry. Suppose, for example, the question is whether immunity should 306. See, e.g., Omni, 111 S. Ct. at 1355; Donald I. Baker, Exchange of Information for Presentation to Government Agencies: The Interplay of the Container and Noerr Doctrines, 44 ANrrRusT L.J. 354, 356 (1975). 307. See supra Part IV. 308. See Elhauge, supra note 25, at 729-38. For reasons peculiar to financially interested municipal restraints, state action immunity still applies if the restraint was authorized by the state. See id. at 736-38. But even with such state authority, dormant Commerce Clause review should strike down the price floor if it mainly affects persons residing out-of-state. See id. at 732-35; Saul Levmore, InterstateExploitation and JudicialIntervention, 69 VA. L. REv. 563, 575-626 (1983). 309. Accord AREEDA & HOVENKAMP, supra note 10, 1 212.8, at 198. 310. See supra text accompanying notes 124-39 (discussing ContinentalOre); accord Sullivan, supra note 10, at 365-66. Under my analysis, though perhaps not Professor Sullivan's, immunity would be denied only if the price-fixing exploited market power against nonresidents of the government since the government would have no financial interest in exploiting its own residents. 311. See AREEDA & HOVENKAMP, supra note 10, %201, at 14-15; Hurwitz, supra note 10, at 123. 312. See Guido Calabresi, ConcerningCause and the Law of Torts: An Essay for HarryKalven, Jr., 43 U. Cm. L. REV. 69 (1975). apply to a monopolistic practice for which the monopolist sought and received substantive approval from a disinterested state regulator. Having received approval, the monopolist directly imposes the practice itself, so it seems debatable whether the state regulator was the "cause" of the practice, supervening or otherwise, particularly if it is not clear whether the regulator's approval was required before the practice could be implemented.3 13 However, the real question in such cases is whether the decisionmaking process producing the restraint is sufficiently reliable to merit antitrust immunity, or whether instead its reliability depends on being subjected, via antitrust review, to the competitive process. Here, the monopolistic practice should be immunized because a disinterested accountable actor has made a substantive decision in its favor before the practice was imposed on the market. "Causation" is besides the point. Likewise, causation explains neither the existence of immunity in some cases where a restraint flows directly from the petitioning nor the factors that determine whether such immunity for direct restraints applies. For that, we must look to the functional process framework articulated above in Part IV. Bribery Suppose an unscrupulous liquor store bribes a state commissioner to deny a liquor license to a potential competitor. The bribe has produced a governmental restraint on competition. Are the briber and commissioner immune from antitrust liability for this restraint because, however invalid the bribe, the denial of the liquor license resulted from valid governmental action? Under the objective process approach of this Article, the clear answer is "No." The decisionmaking process producing the restraint was financially interested, and thus not likely to advance the public interest unless subjected (via antitrust review) to the competitive process. The decision by the bribed official should not get state action immunity, and the effort to bribe the official should not receive petitioning immunity. This conclusion conforms to lower court decisions.3 14 313. See generally AREEDA & HOVENKAMP, supra note 10, %206.1, at 80-81 (discussing causation issue). 314. See Instructional Sys. Dev. Corp. v. Aetna Casualty & Surety Co., 817 F.2d 639, 650 ( 10th Cir. 1987 ); Associated Radio Serv. Co. v. Page Airways, 624 F.2d 1342, 1358 (5th Cir. 1980), cerL denied, 450 U.S. 1030 (1981); Rangen, Inc. v. Sterling Nelson & Sons, 351 F.2d 851, 856-57 (9th Cir. 1965), cert. denied, 383 U.S. 936 (1966); Cipollone v. Liggett Group, Inc., 668 F. Supp. 408, 4 10 (D.N.J. 1987 ). But see Cow Palace, Ltd. v. Associated Milk Producers, Inc., 390 F. Supp. 696, 702 (D. Colo. 1975). Campaign contributions, on the other hand, do not make a government official sufficiently self-interested to lose antitrust immunity. See Boone v. Redevelopment Agency, 841 F.2d 886, 895 (9th Cir.) (Sherman Act inapplicable to campaign contributions), cert. denied, 488 U.S. 965 (1988); Metro Cable Co. v. CATV of Rockford, 516 F.2d 220, 231 (7th Cir. 1975) (same); Elhauge, supra note 25, at 704 n.176 (same). There are two reasons for this conclusion. First, such contributions do not so much redound to the personal financial interest of the official as help that CALIFORNIA LAW REVIEW The issue has not yet been resolved by the Supreme Court because it has never adjudicated an antitrust state action or petitioning immunity case involving the bribery of a public official.31 5 The Court has, however, issued conflicting dicta on the topic. In California Motor and Allied Tube, the Court recognized that a bribery exception to petitioning immunity existed. 16 The Omni opinion, on the other hand, contained dicta to the contrary. In the course of (correctly) rejecting the general proposition that immunity should be denied to governmental action when a petitioner has violated some other state or federal law, a" 7 the Court rejected the specific proposition that immunity should be denied when a government official is bribed.31 8 The statements were dicta because there was official stay in office. Since most legislators could earn far more outside office, presumably their desire to stay in office reflects their desire to exercise their political judgment on other issues, not a desire for financial gain. Second, campaign contributions are a thoroughly legal (indeed constitutionally protected, see Buckley v. Valeo, 424 U.S. 1, 58-59 (1976)) method of influencing the governmental process. See Boone, 841 F.2d at 895. Thus, if the official is regarded as financially interested, the situation presents a true conflict between the competitive process and political process which, where no market behavior is involved, the case law resolves on behalf of the political process by granting immunity. See supra text accompanying notes 205-06. Although no petitioning immunity applies, some lower courts have held that bribing merely to procure a government contract does not amount to a Sherman Act restraint of trade. See generally Franklin A. Gevurtz, CommercialBribery and the Sherman Act, 42 U. MIAMI L. REV. 365, 373-95 (1987) (collecting and analyzing case law). But this view is not universal, and, would not, in any event, immunize the briber from liability under other antitrust statutes like the Robinson-Patman Act or the Federal Trade Commission Act. See id. at 366 n.3, 377. Moreover, in the cases finding no restraint of trade, arguably competition was not harmed because the bribe merely influenced which party got a government contract that would, no matter which party was chosen, have excluded competitors. These cases would thus seem inapplicable when instead the bribed government official does impose a clear restraint on competition, such as restrictions on price, output, or entry. 315. The Court did decide an antitrust case involving the bribery of a foreign official, ruling that the act-of-state doctrine provided no immunity because the suit was against those who bribed the official and thus did not require a court to declare invalid the official act of a foreign sovereign. See Kirkpatrick Co. v. Environmental Tectonics Corp., 493 U.S. 400, 405-06 (1990). 316. See California Motor Transp. Co. v. Trucking Unlimited, 404 U.S. 508, 513 (1972); Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 502 n.7, 504 (1988). This recognition of a bribery exception might seem to contradict the language in Allied Tube indicating that those urging valid public restraints enjoy absolute immunity for those restraints. Id. at 499. The reconciliation is that a bribed governmental official is "private" within the meaning of antitrust immunity because he is financially interested and should thus enjoy no state action immunity. Consistent with this interpretation, the Allied Tube case cited the bribery exception along with Continental Ore to support the proposition that "[t]he dividing line between restraints resulting from governmental action and those resulting from private action may not always be obvious." See id. at 501-02 & n.7; see also id. at 501 (holding that the association was not public because the decisionmaking body comprised "persons with economic incentives to restrain trade"). Another possible doctrinal reconciliation is that bribery does not constitute merely "urging" governmental action. 317. This of course does not mean that antitrust immunity would extend to the direct effects of such illegal petitioning (as opposed to the effects of governmental action), but the Omni case did not concern such direct effects. See supra text accompanying notes 81-82. 318. See City of Columbia v. Omni Outdoor Advertising, I11 S.Ct. 1344, 1353 (1991) (stating that state action immunity would still apply); see also id. at 1355-56 (incorporating this proposition by reference for petitioning immunity). no evidence the defendant had engaged in bribery,3 19 but the Court's reasoning is nonetheless worth exploring because, to the extent it indicates the present Court's opinion on the subject, it may represent a departure from the functional process approach. The Court listed three reasons for its conclusion. First was that proving bribery or other independent legal violations bears no relation to the purposes of the Sherman Act.320 But one cannot indiscriminately lump bribery together with other legal violations. While other legal violations may in fact bear no relation to the purposes of the Sherman Act,32 1 bribery does. This is not because bribery violates other state and federal laws-that is besides the point. The distinctive feature of bribery is that it makes the decisionmaking process a financially interested one, and thus one that should be policed by antitrust to ensure that the competitive process is not needlessly undermined. Second, the Court argued that bribery does not necessarily mean that the resulting governmental action is contrary to the public interest.3 22 But again this is besides the point. Antitrust review applies not because private restraints on trade are never in the public interest, but rather because financially interested parties generally cannot be trusted to determine which restraints are in the public interest and which are not. Nor does antitrust immunity apply because governmental restraints are always in the public interest; it applies because disinterested accountable decisionmakers are generally better positioned to decide which restraints are in the public interest than courts. Where the governmental decisionmaker has been bribed, the grounds for immunity are absent because the decisionmaking process is financially interested and thus can be improved by being subjected, via antitrust review, to the competitive process. Lastly, the Court argued that it would be difficult to determine the effect of bribes when they are given to a minority of a multi-member governmental body.323 Suppose, for example, a firm bribes five legislators and a law restricting trade to the firm's benefit passes by 53-47. Should the law be struck down on the theory that, had the bribed legislators voted the opposite way, the law would have failed 52-48? Or should one simply strike out the bribed votes, concluding that the law would still have passed 48-47? Alternatively, one might conclude that the legislature as a whole is not financially interested unless a majority voting for 319. There was evidence of campaign contributions, but those stand on a different footing. See supra note 314. 320. See Omni, 111 S. Ct. at 1353, 1356. 321. They do, however, bear a relation where they are used by actors with market power to impose direct costs or delays that hinder competitors. See supra text accompanying notes 245-55. 322. See Omni, IIlS. Ct. at 1353. 323. See id.; see also I AREEDA & TURNER, supra note 105, 204d, at 49-50 (discussing difficulties of establishing whether bribes caused legislation). the law has received a bribe. After all, with a majority of disinterested accountable supporters, one can hardly say that the concerns are the same as with a fully interested decisionmaker. These problems are difficult, but do not justify granting antitrust immunity whenever bribes are given to governmental actors. To begin with, the difficulties have no application where the sole governmental decisionmaker has been bribed. Nor do they justify denying an antitrust plaintiff damages from the briber and the bribed legislators for the harm caused by the legislative restraint.32 4 A closer question is whether these problems justify refusing to invalidate legislative restraints produced by partial bribery. But the arguments against invalidation are not, I think, ultimately persuasive given the process ideals that underlie the case law. There may be considerable doubt about what would have actually happened without the bribery. But if an antitrust court strikes down a statute passed in part by financially interested legislators, the issue is effectively remanded back to the legislature to see whether it wishes to reenact the same statute.3 25 This latter decision will give us our best evidence of what would have happened without the bribery, and it comes from a decisionmaking process better than either a partially bribed legislature or a disinterested but unaccountable antitrust court. I thus conclude that antitrust courts should invalidate anticompetitive legislative restraints whenever legislators who could have potentially changed the result have been bribed.3 26 324. Cf Kirkpatrick Co. v. Environmental Tectonics Corp., 493 U.S. 400, 405-06 (1990) (holding that the act-of-state doctrine did not immunize a party who bribed a foreign official from antitrust liability). These damages should, however, cease for anticompetitive injuries suffered after a disinterested legislature has been alerted to the past bribery but declined to repeal the legislative restraint. In any event, even if, under Omni, antitrust immunity applies to statutes procured by bribery, nothing in the opinion suggests this immunity should extend to any direct effects of the petitioning. Bribery should thus be sufficient grounds (as a means of petitioning that is invalid in all contexts) to impose liability on the petitioner for injuries caused not by the legislation, but by any reputational injury or costs and delays imposed by the bribing petitioner. See supra Part IV. This would include liability for the costs of opposing the bribing petitioner in governmental fora. 325. Damages, treble or single, would not and should not be available against the legislature or the state because they would injure taxpayers whom the government restraint did not benefit and indeed may well have harmed as consumers. See Elhauge, supra note 25, at 735, 736 n.322. 326. The ancient case of Fletcher v. Peck, 10 U.S. (6 Cranch) 87 (1810), cited in Omni, 111 S. Ct. at 1353, is not to the contrary. The history of the dispute in Fletcher began when some buyers got the Georgia Legislature to sell them state land by promising numerous legislators parts of the land. See 10 U.S. (6 Cranch) at 129. The buyers then re-sold the land to bona fide purchasers who did not know the land was originally procured by bribery. Id. When the bribes came to light, the Georgia Legislature responded by passing an act annulling the original sale. See id. at 131. The relevant questions before the Court were whether a downstream bona fide purchaser should be divested of title to the land either because the "corruption" of the Legislature made the original sale inherently void or because the statute annulling the sale was constitutional. In the course of holding that the purchaser's title was unaffected, the Court did express concern about what to do if a minority of legislators are bribed and how to decide what should be sufficient corruption to invalidate a statute. See id. at 130. But these concerns were asides, on which the Court explicitly Lies, Damned Lies, and Statistics Many cases have held that a petitioner who knowingly submits false information to a governmental decisionmaker is not immune from antitrust liability.32 The grounds for these decisions have not, however, been well articulated. Usually they proceed on the unelaborated assertion that such activity is a sham, but this is not very helpful as we have seen above. Nor have the courts been very precise in distinguishing between anticompetitive injury that resulted directly from the defendant's conduct-such as the costs of uncovering the true facts and opposing the defendant's facts or petition when that would have otherwise been unnecessary-and antitrust injury that resulted from a restraint the government imposed in a decisionmaking process infected by the false information.3 28 Allied Tube, which makes petitioners absolutely immune for restraints resulting from valid governmental action but liable for restraints directly resulting from invalid petitioning, highlights the crucial nature of this distinction. Where the injury is direct and the lies are illegal under other laws, as they are in adjudication or regulatory proceedings, antitrust immunity is inapplicable,3 2 9 just as it is for direct injuries resulting from abuses of process. 330 This direct injury might, for example, consist of the costs of countering the defendant's false information in agency proceedings.33 1 The more difficult question is whether, and when, the petitioner should be liable for governmental restraints adopted in response to his false petitioning. Clearly, petitioners are generally not liable for governmental responses to invalid petitioning.332 But immunity might be denied on two doctrinal grounds: (1) that governmental action procured did not rely, in an opinion mainly concerned about the inequities, and unconstitutionality under the Contracts Clause, of allowing courts or the state to annul a prior conveyance of title now held by a bona fide downstream buyer because of alleged corruption in a prior legislature. See id. at 129-39. These inequities have no necessary connection to the bribery of legislators. The same inequities have led courts to protect bona fide purchasers when past title transfers that on their face looked legal were procured by mere private fraud rather than by bribing public officials. See id. at 133-35. And these inequities are not nearly so weighty when the question is not whether to deprive a bona fide purchaser of title but rather whether to remove a present legislative restraint on competition. Fletcher is thus not binding on the antitrust issue discussed here. Nor are the concerns it expressed persuasive on that issue. The first concern, about how many legislators must be bribed, is addressed in text. The second concern, about how much corruption should be enough, is a powerful argument against a court simply striking down a statute because of what it finds to be "corruption." But in Fletcher there was no legal or constitutional authority to invalidate the legislation for corruption. Here antitrust provides the authority and defines the type of activity within its scope. 327. See AREEDA & HOVENKAMP, supra note 10, 204.1, at 68 nn.1-2 (collecting cases). 328. See Calkins, supra note 9, at 342 & nn.78 & 80-81 (collecting cases). 329. Accord AREEDA & HOVENKAMP, supra note 10, 204.1e, at 73-74. 330. See supra Section IV.C.2. 331. The injury will only be anticompetitive, however, if the defendant has the market power to take advantage of his rival's cost increases. See supra text accompanying note 254. 332. See Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 499-511 (1988) (denying immunity to defendant for damages resulting directly from petitioning activity invalid by fraud is not "valid"; or (2) that a restraint does not truly "result from" governmental action when that action is procured by private fraud. Formal logic, however, cannot tell us when governmental action that does not itself violate any independent rule of law should nonetheless be considered "invalid" under antitrust law because of the type of petitioning that procured it. Nor can it tell us who "caused" an injury.3 3 Rather, both sorts of doctrinal questions must be settled by functional factors. The functional questions are the familiar ones: whether we have the assurance normally provided by a disinterested accountable decisionmaking process, and if not, whether that process would be improved by judicial antitrust review. At one pole, consider deceptive comments made in the political process. These might admittedly mislead legislatures. But the social facts upon which legislative decisions are made are highly contestable. One is reminded of Disraeli's famous statement that "there are three kinds of lies: lies, damned lies, and statistics."3'34 It is hard to find any policy debate where one side does not accuse the other of distorting the statistical evidence. That is the normal process of fighting for public opinion.33 5 Allowing antitrust courts to review the accuracy of political statements would not only chill political debate generally, but distort the debate by penalizing those statements with which the courts did not agree. Indeed, immunity for governmental acts produced by allegedly false statements in the political process follows afortiorifrom the immunity for the direct effects of such statements. 36 At the other pole, consider cases where the government has in effect delegated to a financially interested party the factual determinations that trigger governmental action. This situation is illustrated by Walker Process3, 37 where the antitrust defendant allegedly obtained a patent by fling false information with the Patent Office and then enforced the patent by instituting a patent infringement suit that was not ultimately adjudicated because the patent expired before the case could be adjudicated. The functional process approach allows us to reconcile the Walker Process Court's holding-that proving these allegations would make the defendant liable under the Sherman Act for the damages caused to the plaintiff by the existence and enforcement of the patent-with the within its context but stressing that no damages were predicated on harm caused by governmental restraints adopted in response to the invalid petitioning). 333. See supra text accompanying notes 311-13. 334. RESPECTFULLY QUOTED 333 (Suzy Platt ed., 1992). 335. See AREEDA & HOVENKAMP, supra note 10, %204.1c, at 70. 336. See First Am. Title Co. v. South Dakota Land Title Ass'n, 714 F.2d 1439, 1447 (8th Cir. 1983) (allowing immunity where the antitrust plaintiff had "equal access to the legislature to lobby against the [proposed legislation] and to correct any 'misrepresentations' which may have been made"), cert. denied, 464 U.S. 1042 (1984); Mark Aero, Inc. v. TWA, 580 F.2d 288, 297 (8th Cir. 1978) (no antitrust liability for lies told to city officials); supra Section IV.C.l. 337. Walker Process Equip. Co. v. Ford Mach. & Chem. Corp., 382 U.S. 172 (1965). Court's repeated statements in other cases that petitioners are immune from antitrust liability for governmental acts. In Walker Process, the relevant governmental action, granting the patent and then enforcing it pending adjudication, did not rest on any substantive decision by a disinterested official about the accuracy of the defendant's patent filing. Such filings are ex parte, and while the Patent Office can check its own records, it lacks access to other information that would be necessary to disprove a filing's assertions.3 38 In effect, then, for facts not covered by its own record, the Patent Office determined whether, given the defendant's filings, the invention was patentable. Accordingly, the Patent Office had effectively delegated to the antitrust defendant the factual determinations necessary to gain a patent. When, in such cases, the antitrust defendant falsifies the information, the governmental action is being triggered by a financially interested decision, and antitrust review should apply.339 The Walker Process exception for false petitioning is thus very narrow. It applies only when the lie effectively results in a restraint produced by a financially interested process because the government has delegated to financially interested parties the factual determinations that trigger the governmental restraint. 34 Thus, in such a case, one could say that the restraint results "directly" from the lie,341 just as one says that the costs and delays imposed by litigation result "directly" from a litigant's decision to bring strategic litigation. 342 But it is the implicit functional process view that leads to these doctrinal conclusions. Between these two poles are adjudications where lies could have been challenged by opposing litigants but nonetheless succeeded in procuring adjudicative action that restrained trade. Because, unlike legisla338. See 3 AREEDA & TURNER, supra note 105, 707a, at 134 (1978). 339. If the lie did not trigger the government action because the invention would have been patentable even with accurate information, antitrust immunity would apply to the patent restraint on competition. See 3 id. 707d, at 137-38. Enforcement of the patent might, however, be denied as a matter of patent law. See 3 id. 707b, at 135-36. There might also be occasions where the false procurement of a patent does not result in any harm to competition, such as when the only effect is to alter which firm gets a monopoly. See AREEDA & HOVENKAMP, supra note 10, 707'd, at 58889. 340. See also Woods Exploration & Producing Co. v. Aluminum Co. of Am., 438 F.2d 1286, 1292-98 (5th Cir. 1971) (denying antitrust immunity to lying petitioner where the agency apportioned allowable production levels based on producers' forecasts of how much gas they were capable of producing), cerL denied, 404 U.S. 1047 (1972); Outboard Marine Corp. v. Pezetel, 474 F. Supp. 168, 178 (D. Del. 1979) (emphasizing that the defendant would be liable for submitting false information to the Treasury only if the Treasury made no independent inquiry but rather relied heavily on the defendant's submission). 341. See Woods Exploration, 438 F.2d at 1295 (concluding that because the agency relied on the defendant's false statement, the action could not be "said to have flowed from state rather than private action"); OutboardMarine, 474 F. Supp. at 178 (suggesting that a Treasury decision would not be "the product of agency action" if the Treasury made no independent factfinding but simply relied on the defendant's false information). 342. See supra text accompanying notes 241-43. tors, judges and agencies adjudicate on a formal record often accompanied by a statement of reasons for the decision, it is easier to determine whether the lie affected the result. 34 3 Further, the veracity of adjudicative facts tends to be less debatable than that of social facts. But antitrust review would nonetheless be inappropriate. The reason is not that the standards of conduct are lower in adjudication than in ex parte administrative processes like those in Walker Process. Rather, the reason is that a disinterested government official has made a substantive determination about the facts, in a forum that provided an interested opponent with the opportunity to dispute the alleged lies. Antitrust review in such circumstances would not so much police financially interested decisionmaking as it would substitute decisionmaking by antitrust courts for decisionmaking by the first court. Nothing in the antitrust statutes authorizes that substitution, and nothing in the objective process ideals suggests the substitution would be desirable. CONCLUSION Defining the scope of antitrust petitioning immunity is not just a question of reconciling antitrust concerns about free competition with First Amendment concerns about the freedom to petition. Antitrust immunity extends beyond First Amendment protections because the competitive process guarantees of antitrust are fundamentally inapplicable to disinterested accountable governmental processes of decisionmaking. From a functional process perspective, courts adjudicating antitrust immunity issues emerge as the switchmen of democratic capitalism: guiding decisionmakers down the tracks of either the competitive or governmental process depending on which is most appropriate, but not substituting a track of judicial decisionmaking for either process. This functional process approach fits and explains the result in every Supreme Court case adjudicating antitrust petitioning immunity. It also justifies many features of current doctrine. It justifies the Court's refusal to assess the substantive merit of restraints produced by disinterested accountable decisionmakers. It justifies the Court's focus on the objective incentives, rather than subjective motives, of decisionmakers. And it justifies the Court's refusal to second-guess the prevailing standards for providing input into alternative decisionmaking processes. Alternative positions on all these issues would embroil antitrust courts in making substantive decisions about how societal resources are allocated rather than allowing the political or competitive process to make those decisions. Further, the functional process approach resolves many doctrinal questions and anomalies. It explains why some market activities are con343. See 1 AREEDA & TURNER, supra note 105, 204c, at 48-49; 1 id. 204d, at 50. sidered "commercial" and others not. It explains when restraints are "incidental" to petitioning, and when they "directly result" from that petitioning rather than from governmental action. It also explains how to determine whether the petitioning is "valid" for the purposes of antitrust immunity, particularly where strategic litigation is alleged. Finally, it helps resolve a host of still open questions about how the Court should treat petitioning that involves either boycotts aimed at private parties or bribes and lies that influence governmental decisions. Perhaps most fundamentally, the objective process approach permits a more accurate understanding of the relationship between antitrust petitioning immunity and antitrust state action immunity. These immunities are not, as has so often been asserted, mere flip sides of each other. State action immunity sometimes applies when petitioning immunity does not, and vice versa. But the two immunities do both share the basic functional process view that the competitive process imposed by antitrust law is only necessary, and useful, when financially interested decisionmaking is afoot. 4. Pennington , 381 U.S. at 670; see also CaliforniaMotor, 404 U.S. at 510-11; Noerr,365 U.S. at 136-38. 5. Noerr , 365 U.S. at 144. 6. CaliforniaMotor, 404 U.S. at 511-13; see also Walker Process Equip., Inc. v. Food Mach. & Chem . Corp., 382 U.S. 172 ( 1965 ) (holding that antitrust liability could be imposed for a party's actions in fraudulently obtaining and enforcing a patent). 7. Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690 , 707 - 08 ( 1962 ); see also Noerr, 365 U.S. at 137 , 140 - 41 ( distinguishing immune political activities from non-immune business activities). 8. CaliforniaMotor, 404 U.S. at 513; Pennington, 381 U.S. at 671 & n.4. 9. See, e-g., Stephen Calkins , Developments in Antitrust and the First Amendment: The Disaggregationof Noerr, 57 ANTrTRUsT L .J. 327 , 339 & n.63 (collecting sources). 10. See PHILLIP E. AREEDA & HERBERT HOVENKAMP , ANTITRusT LAW 1 206 ', at 75- 79 (Supp. 1991 ); Calkins, supra note 9, at 356-58; James D. Hurwitz , Abuse of GovernmentalProcesses, the FirstAmendment, and the Boundaries of Noerr, 74 GEo . L.J. 65 , 85 - 88 ( 1985 ); Lawrence A. Sullivan, Developments in the Noerr Doctrine,56 ANTIR L .J. 361 , 366 - 67 ( 1987 ). 11. See Earl W. Kintner & Joseph P. Bauer , Antitrust Exemptionsfor Private Requests for GovernmentalAction:A CriticalAnalysis of the Noerr-PenningtonDoctrine, 17 U.C. DAVis L. REV . 549 , 563 n. 56 ( 1984 ) (collecting cases). 12. Id . at 568- 69 & nn . 80 - 81 (collecting cases); see Calkins, supra note 9 , at 345 n. 92 ( same ). 13. See , e.g., Calkins, supra note 9 , at 338-39; Sullivan, supra note 10, at 368. 14. See , e.g., Daniel R. Fischel , Antitrust Liability for Attempts to Influence Government Action: The Basis and Limits of the Noerr-Pennington Doctrine , 45 U. CHI. L. REV . 80 , 80 - 81 ( 1977 ); Kintner & Bauer, supra note 11, at 553. 15. To provide a rough sense of the magnitude and upward trend of litigation about antitrust petitioning immunity, I conducted a Westlaw search for federal opinions citing Noerr. This search uncovered a total of 718 cases decided between 1961-90 . Only 75 of these opinions came down during 1961 - 70 ; 238 came down during 1971-80; and 405 came down during 1981 - 90 . 16. Allied Tube & Conduit Corp . v. Indian Head, Inc., 486 U.S. 492 ( 1988 ). 17. FTC v. Superior Court Trial Lawyers Ass'n , 493 U.S. 411 ( 1990 ). 18. City of Columbia v. Omni Outdoor Advertising , 111 S. Ct . 1344 ( 1991 ). 19. See id. at 1354-55; Allied Tube, 486 U.S. at 507 n.10. 20. Omni , 111 S. Ct . at 1351-53. 21. TrialLawyers, 493 U.S. at 425 (quoting Allied Tube , 486 U.S. at 503). 22. See id. at 418 (denying immunity to petitioning efforts that succeeded in getting a city council to increase the prices paid to the defendants ); Allied Tube , 486 U.S. at 502-03 ( denying immunity to petitioning efforts that led to widespread adoption by state and local governments of an electrical code hurting defendants' competitors). 23. Allied Tube, 486 U.S. at 499; see also TrialLawyers, 493 U.S. at 424-25 ( denying immunity where the source of the challenged restraint was not public action). 24. See , e.g., Allied Tube , 486 U.S. at 513 ( White , J., dissenting); AREEDA & HOVENKAMP, 100. See , eg., Calkins, supra note 9 , at 331-32. 101. See , eg., Fischel, supranote 14 , at 94-104, 122 . Though beyond the scope of this Article, it should be noted that two other implications might follow if the doctrine were based in the First Amendment. First, such a basis might make the doctrine applicable to non-antitrust restrictions on petitioning activity . See Calkins, supra note 9 , at 330-31 (collecting sources). See generally Zauzmer, supra note 99 . Second, a First Amendment basis might render Noerr inapplicable to efforts to petition foreign governments . See Fischel, supra note 14 , at 120-21; Kintner & Bauer, supra note 11, at 564-65, nn. 63 - 65 ( collecting cases and commentary) . See generally Douglas M. Ely, Note, The Noerr-Pennington Doctrineand the Petitioningof Foreign Governments , 84 COLUM. L. REV. 1343 ( 1984 ). 102. E-g., Union Labor Life Ins . Co. v. Pireno, 458 U.S. 119 , 126 ( 1982 ). 103. See LAURENCE H. TRIBE , AMERICAN CONSTITUTIONAL LAW § 12 - 2 , at 789- 94 (2d ed. 1988 ). The First Amendment would also not protect deliberately deceptive petitioning . See Calkins, supra note 9 , at 349-52. 104. See Handler & De Sevo, supra note 35, at 4 n.14; see also City of Columbia v . Omni Outdoor Advertising , 111 S. Ct . 1344 , 1353 , 1356 ( 1991 ) (making clear that antitrust immunity applied even ifthe activities were illegal under other statutes and laws that would pass constitutional muster). 254. See Edward A. Snyder & Thomas E. Kauper, Misuse ofthe AntitrustLaws: The Competitor Plaintiff, 90 MICH. L. REv. 551 , 564 ( 1991 ). 255. AREEDA & HOVENKAMP, supra note 10, V203 .6, at 61. 256. See Columbia Pictures Indus. v. Professional Real Estate Investors , 944 F.2d 1525 ( 9th Cir . 1991 ), cert. granted, 112 S. Ct . 1557 ( Mar . 30, 1992 ). 257. Grip-Pak , Inc., v. Illinois Tool Works , 694 F.2d 466 , 472 ( 7th Cir . 1982 ), cert. denied, 461 U.S. 958 ( 1983 ) ; see also City of Columbia v . Omni Outdoor Advertising , 111 S. Ct . 1344 , 1354 ( 1991 ) (making a similar statement). 258. See Kintner & Bauer, supra note 11, at 571-72 nn. 97 - 98 ( collecting sources focusing on intent) . See generally Gilson, supra note 162 , at 880-82 ( discussing inherent difficulties in determining the subjective intent of plaintiffs). 259. See RESTATEMENT (SECOND) OF TORTS § 682 ( 1976 ). 260. See supra text accompanying notes 162-63. 261. See Litton Sys. v. American Tel. & Tel ., 700 F.2d 785 , 810 ( 2d Cir . 1983 ), cert.denied, 464 U.S. 1073 ( 1984 ) ; see also AREEDA & HOVENKAMP , supra note 10 , 203 .1, at 23. 262. See , e.g., Columbia Pictures Indus . v. Professional Real Estate Investors , 944 F.2d 1525 , 1532 ( 9th Cir . 1991 ) (equating probable cause and reasonable basis), cert . granted, 112 S. Ct . 1557 ( Mar . 30, 1992 ). 263. See Gilson, supra note 162 , at 879-80. 264. See AREEDA & HOVENKAMP, supra note 10 , 203 .1e, at 31; Gilson, supra note 162, at 879-80; Hurwitz, supra note 10, at 98. 265. See supra text accompanying notes 46-47 , 85 - 91 ; see also note 236 and accompanying text. The Ninth Circuit's opinion in Columbia Picturescontains no mention of the success rate of the litigants in CaliforniaMotor, suggesting the appellate panel was perhaps unaware of it. 266. Professors Areeda and Hovenkamp, for example, reject a test based on the probability of winning, reasoning: "[O]ne must not penalize the assertion of novel legal claims. Such claims sometimes prevail. That a claim is novel or against the weight of precedent does not make it unreasonable . " AREEDA & HOVENKAMP, supra note 10 , 203 .1e, at 31. Unfortunately , Areeda and Hovenkamp do not tell us what does suffice to make a claim unreasonable . 267. See Coastal States Mktg. v. Hunt, 694 F.2d 1358 , 1372 ( 5th Cir . 1983 ). 268. See Sullivan, supra note 10 , at 363. 269. See Grip-Pak, Inc. v. Illinois Tool Works, 694 F.2d 466 , 472 ( 7th Cir . 1982 ), cerL denied, 461 U.S. 958 ( 1983 ) ; see also Premier Elec . Constr. Co. v. National Elec. Contractors Ass'n, 814 F.2d 358 , 372 ( 7th Cir . 1987 ) (Easterbrook , J. ) (reaffirming Posner's position) . 270. See Klein, supra note 245 , at 245. 271. See Einer Elhauge & Stephen Bundy , Knowledge About Legal Sanctions 3 - 11 (John M. Olin Working Paper in Law & Economics, No. 91 - 9) (on file with the CaliforniaLaw Review) (Part I); Einer Elhauge , The Triggering Function of Sale of Control Doctrine , 59 U. CHL L. REV. (forthcoming Fall 1992 ) (manuscript at 33-37, on file with author) (Section III.A). 272. See Klein, supra note 245 , at 245-51; see also Paul L. Joskow & Alvin K. Klevorick , A FrameworkforAnalyzing PredatoryPricingPolicy, 89 YALE L.J. 213 ( 1979 ) (arguing that antitrust 296. See Hughes v. Superior Court , 339 U.S. 460 ( 1950 ) (upholding injunction of boycott that demanded 50% hiring of blacks); see also NAACP v . Claiborne Hardware , 458 U.S. 886 , 915 n. 49 ( 1982 ) (distinguishing Hughes) . 297. See supra text accompanying notes 158 , 179 . 298. Allied Tube & Conduit Corp . v. Indian Head, Inc., 486 U.S. 492 , 499 ( 1988 ) (quoting Eastern R .R. Presidents Conference v. Noerr Motor Freight , 365 U.S. 121 , 136 ( 1961 )) (alteration in original). 299. See , e.g., L. Barry Costilo , Antitrust's Newest Quagmire: The Noerr-Pennington Defense , 66 MICH. L. REV. 333 , 340 - 43 ( 1967 ).

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Einer Elhauge. Making Sense of Antitrust Petitioning Immunity, California Law Review, 2018,