Massachusetts Furniture and Piano Movers Association, Inc

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IN THE MATTER OF MASSACHUSETTS FURNITURE AND PIANO MOVERS ASSOCIATION, INC.

FINAL ORDER, OPINION, ETC., IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT Docket 9137. Complaint, June 1980-Final Order, Sept. , 1983 This order requires a Massachusetts association of common carriers certifed to move household goods and offce equipment, among other things, to cease entering into maintaining or adhering to any agreement or plan to fix rates charged for the intrastate transportation of goods and equipment; and to cease providing oonpublic information relating to changes in any carrier s transportation rates to competing firms. The order also bars the association from knowingly preparing or tiing tariff provisions containing collective rates for transportation services; influencing member carriers to file or adhere to any existing or proposed tariff provision affecting intrastate transportation rates; and maintaining a tariff committee or similar entity to consider, pass upon or discuss intrastate transportation rate proposals. Additionally, respondent is required to cancel all tariffs and tariff supplements presently in effect or on fie with the Massachusetts Department of Public Utilities; terminate all previously executed powers of attorney and agreements with carriers utilizing its services; cancel provisions in its articles of in cor poration, by-laws, policy statements and other relevant documents that do not conform with the terms of the order; and amend its by-laws to require members to observe provisions of the order as a condition of membership. Appearances For the Commission: Harold F Moody, Charles E. Yon and Janet H Gilbert.

For the respondent: David Brodsky and James C. McMahon, Jr. Brodsky, Linett, Altman Schechter New York City and Thomrm E. Andresen, Jr. Salem, Mass.

COMPLAINT Pursuant to the provisions ofthe Federal Trade Commission Act (15 C. 41, et seq.) and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Massachusetts Furniture and Piano Movers Association, Inc., (hereinafter sometimes referred to as respondent Mass. Movers" or the Association ), a corporation, has violated and is now violating the provisions of Section 5 of said Act, and it appearing to the Commission Il76 Complaint that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges as follows: For purposes ofthis complaint the term tariffmeans a publication stating the rates and charges of a common carrier for the transportation of property within the Commonwealth of Massachusetts and all rules, terms and conditions which the common carrier applies in connection therewith.

PARAGRAPH 1. Respondent Massachusetts Furniture and Piano Movers Association, Inc. is a corporation organized, existing and doing business under and by virtue of the laws ofthe Commonwealth of Massachusetts, with its offce and principal place of business located at 635 Washington Street, Canton, Massachusetts. PAR. 2. Respondent is an association organized for, and serving its members' interests, including their eco(2Jnomic interests, by promoting, fostering and advancing the household goods and oftce equipment moving industry in the Commonwealth of Massachusetts. One of the primary functions of respondent is the initiation, preparation development, dissemination and fiing of tariffs and supplements thereto on behalf of and as agent for its members with the Massachusetts Department of Public Utilities. Said tariffs and supplements contain rates and charges for the transportation of household goods and office equipment and for related services including, inter alia hoisting and lowering; piano or organ carrying; loading and unloading bulky articles; auxiliary services; overtime loading and unloading; elevator, stair and distance carrying; and reweighing at the request of the shipper.

PAR. 3. Pursuant to Massachusetts state law, each common carrier is required to fie a tariff with the Massachusetts Department of Public Utilities containing the carrier s rates, fares or charges for the intrastate transportation of household goods and oftce equipment. By Massachusetts law, a common carrier is not permitted to charge a different rate, fare or charge other than those contained in its tariff or supplements thereto once the Department of Public Utilities has accepted it.

PAR. 4. Members of respondent are engaged, inter alia in the business of providing transportation and other services for compensation as common carriers for intrastate moves of household goods and oftce equipment in the Commonwealth of Massachusetts. Except to the extent that competition has been restrained as herein alleged, members of respondent have been and are now in competition among themselves and with other common carriers.

PAR. 5. The membership of the Association consists of approximately 300 common carriers of property by motor vehicle, and other per- Complaint 102 F.

sons engaged in the household goods and offce equipment moving industry and alled industries who conduct business within the Commonwealth of Massachusetts. In 1977 the Association s members received more than $60 milion in compensation for intrastate moves. Members of the Association are entitled to and do, among other things, vote for and elect the offcers and directors ofthe Association. The control, direction and management of the Association is vested in the offcers and directors who employ or appoint an executive director to carryon the day-to-day administration and management of the Association. (3) PAR. 6. The acts and practices of respondent set forth in Paragraph Seven have been and are now in . or affecting commerce as Heammerce" is defined in the Federal Trade Commission Act, as amended and respondent is subject to the jurisdiction of the Federal Trade Commission. Among other things, the aforesaid acts and practices: (A) Affect the flow of substantial sums of money from the federal government, business and other private parties to the respondent's members for rendering transportation services, which money flows across state lines;

(B) Affect the purchase and utilization of equipment and other goods and services by respondent' s members which are shipped in interstate commerce;

(C) Include the use of the United States mail and other instruments of interstate commerce in furthering the agreements described below; and (D) Are supported by the receipt of dues, advertising revenues and fees for publications and services from out-of-state members and others.

PAR. 7. For many years and continuing up to and including the date of the fiing of this complaint, respondent, its members, offcers and directors and others have agreed to engage, and have engaged, in a combination and conspiracy, an agreement, concerted action or unfair and unlawful acts, policies and practices, the purpose or effect of which is, was or may be, to unlawfully hinder, restrain, restrict, suppress or eliminate competition among common carriers in the household goods and offce equipment moving industry. Pursuant to, and in furtherance of; said agreement and concert of action, respondent, its members and others have engaged and continue to engage in the following acts, policies and practices, among others:

(A) Initiating, preparing, developing, disseminating, and taking other actions to establish and maintain collective rates, which have the purpose or effect of fixing, establishing, stabilzing or otherwise \ .

nr"'JI.. .I' .lU.l\.c rt lJ '(.lrt U.lVYCO.l\O rtOOV\.. .lJ. ....loJ 1I76 Initial Decision tampering with rates and charges for the transportation of household goods and offce equipment in Massachusetts; (4) (B) Participating in and continuing to participate in the collectively set rates;

(C) Filing with the Massachusetts Department of Public Utilties collectively set rates; and (D) Initiating, organizing, coordinating and conducting meetings or providing a forum for any discussion or agreement between competing carriers concerning or affecting intrastate rates charged or proposed to be charged for the intrastate transportation of property; or otherwise influencing its members to raise their rates, charge the same or uniform rates, participate in or continue to participate in the collectively set rates.

PAR. 8. The acts and practices of respondent, its members and others as alleged in Paragraph Seven, have been and are now having the effects, among others, of:

(A) Raising, fixing, stabilizing, pegging, maintaining, or otherwise interfering or tampering with the prices of household goods and offce equipment moves;

(B) Restricting, restraining, hindering, preventing or frustrating price competition in the household goods and offce equipment moving industry; and (C) Depriving consumers of the benefits of competition. PAR. 9. The acts, policies and practices of respondent, its members and others, as herein alleged were and are to the prejudice and injury of the public and constituted and constitute unfair acts and practices or unfair methods of competition in or affecting commerce in violation of Section 5 of the Federal Trade Commission Act, as amended. The acts and practices, as herein alleged, are continuing and wil continue in the absence of the relief herein requested. INITIAL DECISION BY MORTON NEEDELMAN, ADMINISTRATIVE LAW JUDGE DECEMBER 1, 1981 STATEMENT OF THE CASE The complaint in this matter, which was issued on June 12, 1980 alleges that Massachusetts Furniture and Piano Movers Association Initial Decision 102 F. Inc., and its members have engaged in a price-fixing conspiracy by collectively initiating, preparing, developing, participating in, and fiing joint tariffs for moving household goods and offce equipment within the Commonwealth of Massachusetts. The complaint further charges that respondent's members have met for the ilegal purpose of assuring that moving rates within certain specific geographic zones are adhered to uniformly. These practices are said to violate Section 5 of the Federal Trade Commission Act.

Respondent' s answer denies that it or its members have committed any substantive violations, and advances the affrmative defenses that its rate-making activities are: (a) exempt from the federal antitrust laws and Section 5 of the Federal Trade Commission Act by reason of Parkerv. Brown and the related line of "state action" cases; and (b) political petitioning of a government agency protected under the Noerr-Pennington doctrine. (3) In the prehearing stage both sides moved for summary decision on the Parker v. Brown and Noerr-Pennington issues. In Prehearing Order No. 18, complaint counsel's motion was granted, the defenses were stricken, and a trial on the merits was ordered to be held in Boston, Massachusetts, on October 5, 1981. At that time both sides introduced exhibits, but no witnesses were called. Main briefs were fied on November 5, 1981;1 reply briefs on November 20, 1981. After reviewing all the pleadings, stipulations 2 admissions 3 exhibits, proposed findings, conclusions, and briefs submitted by the parties, and based on the entire record, I make the following findings of fact: (4) II.

FINDINGS OF FACT Respondent and Its Members 1. Respondent, Massachusetts Furniture and Piano Movers Association, Inc. (hereinafter ttMass Movers ), is an association of some 300 common carriers certified by a state agency, Massachusetts Department of Public Utilities (hereinafter "MDPU"), to move household goods and offce equipment within the Commonwealth of I Respondent's Main Bricfis in the form DrB Post-Hearing Memorandum In Support afIts Renewed Motion For Summary Decision which essentially renews its "state action" defense 2 Prehearing Order No. 13 incorporated into the record two stipulations, hereinafr identified as "Slip. 1" (undated, and consisting of33 paragraphs) and "Stip- 2" (dated March 26, 1981, and consisting Drone paragraph). 3 Complaint counsel fied two !lts of requested admissions. The first request (dated Mareh 20, 1981) and the responses thereto (dated April 1 , 1981) are hereinafter referred to as "Adm. 1." The second request (dated April 1981) and the responses thereto (dated April 24, 1981) arc hereinafter referred to 3S "Adm, 2, 1176 Initial Decision Massachusetts.

2. Approximately 80 percent of all movers doing business in Massachusetts are members of Mass Movers.5 (5) 3. The members of Mass Movers ostensibly compete amongst themselves to provide moving services.

4. The parties have stipulated to the truth and accuracy of Paragraph Six of the complaint, which charges that the acts and practices of respondent and its members, as alleged in Paragraph Seven of the complaint, are in or affect commerce, as !tcommerce" is defined in the Federal Trade Commission Act. Thus, respondent has stipulated that the practices of Mass Movers- (A) Affect the flow of substantial sums of money from the federal government, business and other private parties to the respondent's members for rendering transportation services, which money flows across state lines; (B) Affect the purchase and utilization of equipment and other goods and services by respondent' s members which are shipped in interstate commerce; (C) Include the use of the United States mail and other instruments of interstate commerce in furthering the agreements (respecting joint-tariff submissions); and (D) Are supported by the receipt of dues, advertising revenues and fees for publications and servces from out-of-state members and others.7 (6) 5. Mass Movers performs no moving services, and does not possess a certificate of public convenience and necessity issued by either the Interstate Commerce Commission or the MDPU;8 accordingly, the association is not a "common carrier" subject to the Interstate Commerce Act, and has no exemption under Sec. 5(a)(2) of the Federal Trade Commission Act.

6. The day-to-day affairs of Mass Movers are carried out by an Executive Director who is in the employ of the association, and a Board of Directors elected by the members. All persons servng on respondent' s Board of Directors are offcers and employees of member firms.

Joint Tariff Activity of Respondent 7. Under Massachusetts law, a mover must fie a tariff containing the mover s charges for moving household goods and offce equipment. A mover is not permitted to depart from the (7) fied tariff (or a fied supplement to the tarim once the tariff or the supplement has 4 Sup- 1, U L 5 Stip. 1 6 Complaint and Anwer 7 Stip. 2; see also Stip 1, mr 27-32.

8 CXllOZ-; RXI0B, About half of respondent' s members do not have ICC licenses. CX's 107A-107II. At Jeast 50% of the members are engaged solely in intrastate moving (Stip. 1,33), and almost all members are engaged in some intrastate moving (CX's lO8A-108F) 9 Complaint and Answer 5; CX71R 1182 1"EDERAL TRADE COMMISSION DECISIONS Initial Decision 102 F. been accepted by MDPU,lO 8. The main purpose of Mass Movers is to prepare, sponsor, and fie with MDPU a joint tariff on behalf of its members)1 The first such joint tariff was fied by respondent in September 1938;12 the last Number 14, was fied on May 1, 1971, and was subsequently revised on six occasions)3 In fiing a joint tariff, respondent acts as the agent for its members)4 9. There is no Massachusetts law requiring or compellng movers to fie ajoint tariff. Moreover, there is no Massachusetts law requiring or compellng uniform moving rates among competing movers. Joint tariffs, however, are authorized by the following regulation promulgated by MDPU:

(a) Whenever a carrier or a broker desires to give authority to an agent to issue and file tariffs and supplements thereto in its stead, an appropriate power of attorney . . . shall be used, . . . . (8) (b) Carriers and brokers may become participants in such tariffs which are issued and fied by another carrier or his agent by the giving of a proper concurrcnce.l5 10. Most of the groundwork involved in preparing joint tariffs is done by respondent' s Tariff Committee (renamed "Cost Study Committee" in 1978, and "Governmental Committee" in 1980) appointed from the membership of Mass Movers by the President of the association)6 11. The Tariff Committee members meet either on their own initiative, or at the direction of the Executive Director or the Board of Directors, to prepare and develop proposals and recommendations respecting a joint tariff,1 12. The Tariff Committee s proposals for ajoint tariff are submitted to respondent's Board of Directors for discussion at the monthly meetings of the board)8 Thereafter, the Executive Director disseminates the recommendations ofthe (9) Tariff Committee to the general membership of Mass Movers through the association s monthly bulletin)9 The membership, in turn, submits comments on the proposed joint tariff to the Board of Directors.

10 MaSI. Gen. Laws Ann. Ch. 159B 6A; Complaiot and Answer, TI 3; Stip. 1, TI 22 11 Stip. 1, TI 2(c); Adm. 1 2; ex' s 71A, 92, 93, 109D, llOD !" Stip. I , TI 3; ex's 102A, I02B; RX12D.

13 Stip. 1, nn 47.

HStip. 1, n 7.

15 MDPU 10405(1), Part II, Sec. 6; Stip. 1, 117 16 Adm. 1 3-6; Adm. 2, n11-3; ex' s lob, 20A, 32, 33, 35, 36, 109F, 110E. , 110H, 111M , 112B, 112D- 17 Adm- 1, 9; Adm. 2, 2; cx' lib, 19, 20A, 22, 27, 32, 33, 70, 109H, 109J, 110F, 110Z-2, 110Z-1O, 1l2R; RX 61.

Stip. 1, if; 10, II , 12 14; Adm. 1, n1! 8-12, 17; ex' s 2, 4A, 5-, lib, 12, 14, 17, 19- , 25A, 28, 29, 35, 50A, 54A 68; Rx 89 1" Stip. 1. 13; ex' s 4A, 46A, 53A.

20 ex' s 69, 70, 94, 95, lO9I., IIJS, lilt, 112R 1176 Initial Decision 13. From these internal deliberations ofthe Tariff Committee, the Board of Directors, and the general membership of Mass Movers there eventually emerges a joint tariff or revisions of existing joint tariffs which the Board of Directors fies with MDPU on behalfofthe members.2! The tariff decisions of the Board of Directors are ratified by respondent's general membership at annual meetings,22 and the members indicate their formal acquiescence in the joint tariff by fiing powers of attorney and concurrence forms with the MDPU . 14. As in the case of an individual tariff (see Finding 7), once the joint tariff is fied by respondent, the members of the association are required under Massachusetts law to charge the (10) rates specified in the tariff unless the tariff is suspended by MDPU, or a mover fies an entirely separate tariff, or a mover fies for an exception to the joint tariff.

15. Although there is no state statute or regulation requiring a joint tariff from competing movers in Massachusetts, respondent has been encouraged in the past by MDPU offcials to fie such tariffs on behalf of its members,25 Moreover, MDPU staff members have consulted with offcials of respondent about including, excluding, or clarifying certain provisions in proposed joint tariffs. 16. The joint tariffs fied by respondent association automatically go into effect on a date specified by respondent unless suspended by MDPU. (11) 17. The latest joint tariff submitted by respondent, MDPU tariff No. 14 (effective May 1, 1971), consists of three main sections: Section I contains two tables of rates and charges for packing and unpacking; Section II contains 10 tables of hourly rates for moves up to and including 25 miles; Section III contains a weight/mileage table for moves in excess 01'25 miles. In addition to the three main sections, the tariff contains rates for 27 different types of boxes, overtime, claim settlement fees, and for such special services as hoisting and lowering pianos and other extra pick up and delivery charges. 18. Since May 1, 1971, Mass Movers, its members and directors have initiated, prepared, developed, and fied six revisions of Tariff No. 14 which have been accepted by MDPU. The six revisions ofMDPU No. 14 were discussed by the Tariff Committee and submitted to respondent' s Board of Directors who, in turn, reported these proposed in- 21 Stip. 1, n, 14, 20; Adm. 1, nn 10-12, 17; ex' s 2, 6, 7A, 14, 17 , 1l0B, llOQ, llOZ-2, 111Z-U , 112)1 22Adm- , IT 16.

2.1 Stip. 1, nn 18, 19, 21; ex' s lllZ-, ll1Z- 24 Stip. 1, IT 22.

Z5 RX' s 6SE, 67 A, 73A BOB.

26 RX' s lA, lB, 62B 66A 70A, 78B 79B, 83B, 85E, 87A, 88, 91. 21 Mas.. Gen. Laws Ani'. Ch 159B 6A.

28 Complaint and Answer, IT 2; Adm. I , 11 29; ex' s 113E-lI3Z-16; RX12E. Initial Decision 102 F. creases to the membership in the association s monthly bulletin. (12) 19. While the members of the association have the right to fie an independent tariff, there is overwhelming acceptance by the members of the basic joint tariffs fied by respondent 30 as shown in Table 1 below.

TABLE 1: Member Participation in MDPU Tariff No. 14 Filed by Mass Movers: Date % Participation in one of % Participation in one of 10 hourly rate tables two Packing Rate Schedules 2/1/72 2/15/73 10/15/73 2/14/74 100 11/30/74 2/12/75 100 2/18/76 100 2/28/77 100 6/16/77 100 2/28/78 11/30/78 1/31/79 1/31/80 8/14/80 3/12/81 Sources: CX's 38B, 40B, 43A, 45B, 49B, 52B, 57B, 59C, 60C, 103, 104A- 104K, 105A- , 106A- , 1112-7, 111Z-. (13) Other Activity of Respondent Aimed at Higher Uniform Rates 20. Even apart from the filing of joint tariffs, almost from its inception respondent has been engaged in activity aimed at eliminating price competition amongst movers. Thus as early as March 1939 respondent' s Board of Directors voted to require that the members submit all supplements to the board for its approval.31 In 1957, the President of respondent announced that the association had made considerable progress in stabilzing rates.32 At a Board of Directors meeting in April, 1961, there was a discussion about moving all the members to a higher rate. At this meeting the President of respondent asked how many movers then charging $16 per hour (for a truck and three men) would raise their rates to $18; and how many charging $14 would raise their rates to $16. All movers charging $16 agreed to Stip 1, TITI 5-6. See also Findings 12, 13. JU To these basic tariffs, however, about 5D% ofthe members fied various exceptions in 1980 (CX's 105A-105H), and about 30% fied exceptions in 1981 (CX's l06A-I06F). 31 RX51B.

RX84A.

Il76 Initial Decision charge $18, and all but two movers charging $I4 agreed to raise their rates to $16. In 1975, prospective members of the association were told that a (14) principal objective of respondent was to obtain uniformity of rates.

21. The multiple tables appearing in respondent's joint tariff U. No. 14 might conceivably result in some price competition among members; respondent, however, has taken steps to eliminate this eventuality. In fact, the use of multiple tables was designed by respondent for the very purpose of reducing the price differences which had occurred prior to 1971 when the association fied a single hourly rate, only to be followed by the widespread use of supplements with the result that "(t)here was an absolute hodge-podge of rates lacking any degree of uniformity."35 Moreover, respondent has used zone meetings (the membership was organized into six zones in 195536) to obtain agreement amongst competing movers to charge a uniform rate (i. to adopt uniformly oneofthe published rate tables), or to move uniformly to higher tables. That this is the purpose of zone meetings was made clear in a March 6, 1970, memorandum from respondent's Executive Director-(15) It has been my experience that Zone meetings have been very successful if only a good turnout of members can be obtained. The most recent Zone meeting I had was on January 29th among the movers on Cape Cod. We had almost 100% attendance by the movers. It is especially interesting to observe that these competitors have developed growing confidence in each other-they have gotten to know each other. They are all now moving from Table 4 ($25 per hour) to Table 5 ($27 per hour). . Prior to another 1970 Zone meeting, respondent's Executive Director asked the movers to- . . . give some real thinking to increasing your hourly rates by one Table. School St. Stg. & Worcester Stg. have just jumped their rates from 2 to 4. In Greenfield area, Sitterly & Westcott are jumping up one table and looks like others there will do the same. If just one would make the same move in Springfeld and then let the others know-you could all move up. Same in other areas.

22. Respondent association also acts as a fire brigade which at the first sign of a price reduction rushes into action to discourage such competitive activity. Thus on February 16 1973, the Executive Director of Mass Movers wrote:

:!RX' s86A 86B.

1. CX' s92, 93 :J CXI02D. The use of multiple tables in order to reduce the number ofsl.pplements was endorsed by MDPU ofikials- See RX' s IB, 80B.

RX 79B.

3' CX72. See also CXI.

:lCX 73 , Initial Decision I02 F. I was able to stop the reduction fiings of Walsh and Seeeney so they will remain on Table 3.39 (16) Another mover in this area was told:

Was successful in holding the change to Table 2 of Walsh and Sweeney. They are stil on Table 3. Looks like you re finally going to get rate uniformity. Once the defection to a lower rate table was contained, the Executive Director then directed his efforts to raising the movers up to Table 3. He reported that the movers in the Fall River area "are agreed on maintaining a rate level of Table and to one mover in this area he wrote:

In the interest of rate stability in the I"all River area I hope that you wil also go along with this rate.

Apparently this effort was successful since on March 22, 1973, the Executive Director reported to respondent's Board of Directors: Fall River area has stabilized their rates and are now all on Table 3. (17) The Executive Director did not rest on his laurels, and by 1975 he was organizing a zone meeting in Fall River for the purpose of moving the members up to Table 4.

23. Not only does respondent actively work to eliminate price competition in specific zones, but it serves as a constant source of inspirational messages to the members which have as their dominant theme (18)that movers should increase prices to consumers.44 CX79.

CXBl.

41 CX82. This letter was apparently sent to 8everaJFall River area movers with the notation that respondent wil hold returns in Assoc. offce l.l!uiJ rate changes received from all." ex' s 83-8. CX13.

43 CX' s26A, 8gB .4 See, e. eX37 A ("If your pretax profit margin is shrinking then, as a certificated carrier with an obligation to service the public, you should (almost must) apply far a rate incre!lse to maintain your fin!lncial integrity . call your a3lociation offce if you feel in need offllrther information ); CX38A ("Your association offce realizes that many of our carrier members are in need of raw increages and we are prepared to continue to fie rate increases with the M, D .... (i)f YOUR company needs!! rate increase - CONTACT your association offce and fie the increase NOW so you will not encounter a time lag. . . "); CX43A ("Your a8SociatjoD offce is receiving a number of inqwries concerning hourly rates mostly baving to do with competitor s rates and what are the averages in each Zone and statewide. This is unusual for this time of year and would seem to indicate that the bottom line (the profit line) is not measuring up to what it should be. ); CX44B ("Your association offce urges al! of our carrier members to take a bard look at your hourly rates-al the offce if you want tojust talk about this, If your decision is to move up a Table or two it is a very simple matter for us to proceed and we wil do all the work. .. Remember-just drop a note or call your association offce if you have a need to increase your hourly rate Table. "); CX45B (" . .. we have an unusual number of hourly rate increases being fled.. . . Cal! your association omce iryou have a need to increase your hourly rate Table. ); CX50B ("rt)he lessn is taught over and over again that undercutting (pricesj, while it brings apparent transient prosperity, eats out the vita of the company practicing it. But it is taught in vain. "); CX60C ("DO YOU NEED TARIFF RELIEF?If any of your npu rates are inadequate, contact your association oflce. Il76 Initial Decision 24. On the basis of the record before me, I am unable to make a definitive factual finding as to how vigorously the MDPU exercises its statutory power to review proposed joint tariffs for reasonableness. As indicated in the Discussion (Part III infra), proof on this point is not germane to my decision since respondent has failed to meet the threshold requirement of showing that the Massachusetts legislature intended to suspend competition in the moving industry. In the interest of completeness, however, I find that there is some evidence that MDPU does not automatically accept all proposals of respondent, and some joint tariffs have been suspended, or respondent has been asked on occasion to file additional data in support of a joint tariff 45 But even assuming that joint tariff's are (19) reviewed, the pervasiveness ofMDPU regulation is open to serious question given the importance ofthe multiple-table schedule in the tariff sponsored by Mass Movers, and MDPU' s (20) policy of not requiring movers to justify the reasonableness of their rates as they graduate from table to table. Finally, there is no clear proof that the joint ratemaking process itself is subject to regulation or supervision by the MDPU. The record evidence relating to this point (on which respondent has the burden of proof is sketchy. In an affdavit attached to complaint counsel' Motion for Summary Decision, James S. Simpson, Director of Rates Division of MDPU says:

The initiation, development, compilation, preparation, and drafting of the Association s agency tariff schedules, and the revisions thereof, are undertaken solely by the 45 Respondent relies heavily on the inv€8tigation and eventual rejection by MDPU of Mass Movers'proposed revision of Tariff No- 14 during the period July 14, 1978 to June 14, 1979 (RX's 9A-12V). But tmB 1979 review may reflect in part MDPU awareness ofthl. challenge by the FTC statfto respondent s claim of immunity by reason of the slate a tion defense.See RX12o. In any event, there is little evidence of similar advera.rjal review by MDPU of reo\pondcnt s proposed joint tariffs. A 1966 filing was suspended and hearings were held be cause of a disagreement between Mass Movers and MDPU over the ommodity description, declared value provisions, and deternnation ofnmning time (RX's 2A- , 3A--D, 27, 28, 29, 30A, 30B, 31). Between 1939 and 1975, however, justifi ations for rates were established normally by informal meetings with MDPU, and suspensions were 80 rare that faced with one in 1975, respondent withdrew its rate fiing " cause we were not prepared to go to hearing by reason of just not knowing how to pro eed." CXl02B The record contains several requests for information from MDPU in support oftaiffin reases and suggestions as to the form of tarilT proposals.See, e. CX18 (fuel sur charge would be a epted by MDPU if fied in fonn of tarilT supplement); RX's lA, 1B (MDPU orderg organization of tariff in proper form with table of contents; in addition, multiple tables were accepted by MDPU, and hearing was BCheduled on "agreed value ); RX's 3A-3D (MDPU orders revisions in stadard bil of lading); RX' s 4, 5A, 6 (MDI'U calls for additional testimony and exhibits in support of tarim; RX26 (proposed supplement not accepted because it omitted a required cha.ge in definition of covered commodities).See o.lsf)the following suggestions by MDI'U to Mass Movers: RX62B (omit tariff pages devoted to transportation of crated furiture from docks and railroad terminals); RX83B (change the definition ofa barrel to include the use ofso-alled "square dish barrels ). I have no basis for conduding one way or the other whether these requests for jnformation, scheduling of hearings, and suggestiolls are illdicative of an indepelldent evaluation ofthe economic necessity for tarif1"n reases or are merely examples ofa hureaucracy fU8. ing over fonn while ignoring substance. AB for the 1978 statement by an MDPU commissioner that his agellcy does not rubber. stamp proposals (RX's 40A-40G), this must be viewed warny as an observation from an interested source. Moreover, it is noteworthy that this same state offcial characterized the close scrutiny of tarff submissions as "a change over what you who have been in this business a long time have ome to expect from a state regulatory agency (RX40D).

46 RX's 12H, 121.

Initial Decision I02 F. Association prior to the fiing of said tariffs with M. While respondent raised a question about Mr. Simpson s authority to speak for MDPU (a doubt, incidentally, that did not deter respondent from adopting certain paragraphs of the Simpson affdavit which it believed were favorable to its cause),48 there was no factual evidence presented by respondent which seriously challenges Mr. Simpson observation of the lack of regulation or supervision of the pre-fiing joint rate-making (21) process itself. The affdavit of respondent' Executive Director argues nebulously that the "development and fiing" of respondent's joint tariffs "have been subject to M. scrutiny,"49 but neither the meaning of Hsubject" nor !Iscrutiny" is fleshed out. At most, respondent introduced evidence that some offcials of MDPU may have encouraged the process 50 and that these same offcials may have made some suggestions about what to include in the association s tariffs. 51 But this hardly amounts to regulation or supervision of respondent' s Tariff Committee, or its Board of Directors, or its membership, as they prepare collusively a joint tariff which is suffciently high so as to satisfy the collective self-interest of these supposedly competing firms. (22) II.

DISCUSSION The Parker u. Brown Defense Before granting summary decision on the Parker v. Brown defense in Prehearing Order No. 18, both sides were given ample opportunity to submit proof relating to a crucial aspect of this defense-the issue of state intent to suspend the federal antitrust laws. Moreover, although technically the Parker v. Brown defense had been removed from this proceeding by the summary decision in Prehearing Order No. 18, during the formal hearing respondent was allowed to supplement its earlier submissions and introduce stil additional exhibits relating to the issue of state intent. This late evidence was carefully considered, but nothing in respondent' s exhibits or posthearing brief convinces me that I should depart from my earlier decision denying the defense.

47 Afdavit of James D. Simpson 3 (in Appendix to Complaint COUlel' s Cross Motion for Summary Decillion). 4B Respondent s Reply Memorandum in Support of Its Motion for Summary Decision and Answering Memorandum to Complaint COllnseJ's Cross Motion for Summary Decision at 17. .9 Affdavit of Daniel W. DlUn, U 5 (attached to Respondent' s Memorandum In Support of Motion For Summary Decision Dismissing Complaint).

04 Finding 15.

5! Finding 15.

\ , . 1176 Initial Decision It was noted in Prehearing Order No. 18 that the state action exemption derives from the policy favoring a spirit of accommodation within our federal system in order to avoid unnecessary conflict between the mandates of national law (23) governing interstate commerce, and state regulation of intrastate activity which may have interstate implications. The exemption also derives from the Tenth Amendment reservation of state sovereignty, as well as the beliefthat the states perform the useful function of serving as economic laboratories in which diverse forms of regulation (and indeed nonregulation) may be tested without interference by the federal government.

Notwithstanding the large measure of discretion which the states enjoy under the principles of federalism inherent in the state action defense, the strong national policy favoring competition and the free market is not easily displaced?3 Before any restrictive practice which departs from the competitive norm can qualify for the state action exemption, first it must be demonstrated that the state s intention to grant antitrust immunity to the questioned practice is clearly articulated and affrmatively expressed as a matter of state policy, and second, that the state actively supervises the process chosen to replace the competitive market?4 The state (24) action defense is denied here because respondent failed to meet the threshold requirement of pro ving that Massachusetts intended to displace the competitive moving market by granting it an immunity from the federal antitrust laws. Neither in its prehearing motion nor in its brief submitted at close of the record, does respondent even purport to identify any provision in the Massachusetts Motor Carrier Act which expressly suspends competition among movers in a "clearly articulated and affrmatively expressed" manner. 55 Instead, Mass Movers relies mainly on the MDPU regulation which allows but does not compel movers to cooperate in working up rates through the use of a joint or "agency" tariff?6 (25) 5! Parkerv. Brown 317 U.S. 341 (1943).

S3 A claim ofexemptioD must be considered "in light of the presumption against implied exclusions from coverage under the antitrust laws City of Lufuyettev. Louisiana Power Light Co., 435 U.s. 389 at 398 (1978). 5. California Liquor Dealersv. MidcoZ Aluminum 445 U.S. 97 (1980). New Motor Vehicle Bd. orCol. v. Orrin W. For Co., 439 U.S. 96, 109 (1978) 0( D. V. 10405(1) Part III 6 provides:

a. Whenever a carrier or a broker desires to give authority to an agent to issue and fie tariffs and supplements thereto in its stead, an appropriate power of attorney. . shall be lL';d b. Carriers and brokers may become participlmtB in such tariffs which are issued and fied by another carrier or his agent by the giving of a proper concurrence MDPU reguations arc generally authorized by the Massachusetts Motor Carrier Act which provides that "The department may establish from time to time such reasonable rules and regulations as it may deem necessry pertaning to the fonn of tariff schedules, the time and manner of fiing thereof, the suspension of ratcs before the same become effective, and hearings upon the validity of any fied or existing rate. " Mass- Gen. Law Ann. Ch. 159B Initial Decision 102 F. To begin with, however, respondent argues from the provision in the Massachusetts Motor Carrier Law for retention by the state of the right to review and authority to suspend any tariff, including a joint tariff, that all tariffs actually are being promulgated by the state itself rather than private parties, and accordingly the state action exemption applies automatically, irrespective of any state intention to immunize the pre-fiing activities of respondent's members. This argument cannot survive in the face of the plain language of the Massachusetts Motor Carrier Law which says it is not the state but the movers- . . . who shall establish, observe and enforce just and reasonable rates. . . which shall become effective on a date fixed by such carrier, which shall be at lea.'3t thirty days after the fiing of the tariff containing the same, unless suspended by the department prior to its effective date upon complaint of any person, organization or body politic, or by the department on its own motion;

From the foregoing it is patently clear that the statute does not relegate movers to the roles of passive onlookers who are helplessly waiting on tenterhooks for (26) decision-making by the state. By the very terms of the Motor Carrier Act the setting of moving rates in Massachusetts is initiated by the movers, and irrespective of how zealously or passively the state exercises its reserve power to review and reject a particular fiing,58 there would be nothing to review unless respondent and its members engaged in the discrete and effcathe collec-cious act of originating a proposed tariff. More important, tive nature of the tariff, which is the point at issue here, is not compelled by the state, and comes about as a result of a choice exercised by respondent' s members for which they should be held fully 59 (27)accountable.

Equally unpersuasive is the argument that merely from the statutory grant to a state commission of a right to review tariffs for reasonableness, it follows that the state intends to replace the competitive market in the tariff-preparation process with a state-controlled re- 51 Ma Ged- Law Ann. Ch. 159B 5! See Finding 24 See Cantor v. Detroit Edison Co. 428 U.S. 579, 593 (1976) for an analysis of the nltemaklng proce!: as a mixture of private aod public decisionmakiog, " Following Cantor the lower courts have con tently held that even fimls closoly regulated by federal or stale public utilty comn89ions are responsible under federal antitru law for the anticompetitive aspects of their ratemaking proposals notwithstading subseuent review, investigation, modification, or acceptance of their proposed rale by public utility commi89ioll.See, e.g., Sou.nd, Inc. American Tel. and Tel. Co. 631 F.2d 1324 (8th Cir. 1980);In re Ocean Shipping Antitrust Litigation 500 F.Supp. 1235 (S. Y. 198(J):Northeastem Tel. Co. v. American Tel. Tel. Co., 497 F.Supp. 230 (D. Conn. 1980);Hecht Co. v. Southern Co. 474 F.Supp. 1022 (D. M. 1979); United Statesv. Southern Motor Carriers Rate Confer., Inc. 467 F.Supp. 471, 483 (N.D. Ga. 1979);InterconnectPlanningv. American Tel. Tel. Co. 465 F.supp. 811 (S. 1978); City of Mishawaka, Indiana American Elec. Power Co., Inc. 465 F.supp. 1320 (N.D. Ind. 1979),modified 616 F.2d 976 (7th Cir. 1980).cert. denied 101 S.Ct. 892 (1981);MCI Communications Corp, v. American Tel. Tel. Co., 462 F.Supp. 1072 (N.D. Il 1978),atrd 594 F.2d 594 (7th Cir. 1978);City of Groton V. Connecticut Light Power Co. 456 F.supp. 360 (D. COIl. 1978) J.:V.LU .LV.LU'" r:U JJ.L l.nl V lnst .nOOVV., 11"v. -1-1::.1 1176 Initial Decision view procedure. Without a clear indication by the state of such a purpose-that is, to shield the 300 Massachusetts movers from compe' tition-the reservation of a right to review and suspend unreasonable tariffs (even assuming vigorous application by the state of such supervisory authority) signifies no more than the creation of an option to veto, an option which may be invoked should the competitive market (perhaps for reasons of structural change or ilegal collusion) not produce rates within a "zone ofreasonableness. 6o That is to say, the creation by the state of a (28) safety mechanism in the event competition fails, does not mean that the state affrmatively intends to deny its citizens the benefits to be realized from a free market which does not fail. ! Moreover, the adoption of an ultimate standard of"reasonableness 62 does not connote a state decision that (29) in the first instance the determination of what is a reasonable rate is to be left to the collective self-interest of the industry itself. As for the MDPU regulation authorizing but not requiring an agency rate, I believe that the most that can be derived from this is that the agency charged with reviewing tariffs has found that while agency rates may be inoffensive to state policy and convenient for administrative reasons, they are not affrmatively required by any "" In holding that agency review for reasonableness prer.udes neither competition nor application ofthe fed ral .atitrust laws, the Supreme Court has said that a "zone ofreasohableness exists between maxima and minima within which a carrier is ordinarily free to adjust it.G charges for itself. United Statesv. Chicago, M., St. P. P.R. Co. 294 U.S. 499, 506, quoted in Gf!orgiov. Penn. yl"onio R. Co., 324 U.S. 439, 461 (1945). In Georgiav. Pennsyl"ania the Supreme Court denied an ant.itrust exemption to a rate-fixing combination notwithstanding the suhstantial powers to review vested in the Interstate Commerce Commission hy the Hepburn Act and the Transportation Act The first granted the Commission power to fix the maximum reasonahle rate; the second extend d its authority to th prescription of a named rate, or the maximum or minimum reasonahle rate, or the maximum, and minimum limits within which thecarrir.rs' published rate must come. Arizona Groceryv. Atchison Ry. 284 U.S. 370, 385-86 (1932), cited inGeorgia v. Pennsyluania R. Coo 324 U.S. 456, 457). 61 See, e. , Sound, Inc. v. American Tel. and Tel. Cfj 631 F.2d 1324, 1335 (8th Cir. 1980) ("By requiring just and reasonable rates and charges, the statute provides a means of preventing the abuse of monopoly power by public utilties; it does not purport to aid an industry by giving it a competitive advantage as did tbe State of California in Parkerv. Brown, supro. We thus are unable to find in the state statutes any clearly articulated or affnnatively expressd policy of replacing competition with regulation in the telephone terminal equipment market." 62 This standard appears in Section 1 of the Motor Carrier Law- . It is hereby declared to be the policy of the commonwealth to regulate transporttion of property by motor earners upon its waysin such manner as to recognize and preserve the inherent advantages of such transporta. tion, and to foster sound economic conditions in such transporttion and among carriers engaged therein in the public interest; and in connection therewith to: (1) Promote adequate, economical and effcient service by motor carriers, andreusonablecharges therefor, without unust discriminations undue preferences or advantages or unfair or destructive competitive practices, (2) improve the relations between, and co-rdinate transportation by and regulation of, motor carriers and other carriers, (3) develop and preserve a highway transportation system properly adapted to the needs of the commerce of the commonwealth, and (4) promote safety upon it.G ways in the interests of its citizens. (Emphasis added. and Section 6 of the Motor Carrier Law which provides in part: In the exercise of the power to prescribe just andreasonoble rates for the transportation of property by common carriers by motor vehicle and to disallow rates fied by any such carrier, the department shal give due consideration, among other factors, to the inherent advantages of transporttion by such carrier, to the effect of any rates under consideration upon the movement of traffc by such carriers, to the need in the public interest of adequate and effcient transporttion service by such carriers, to the cost of service and to the need of revenues sufcient to enable such carrers under honest, economical and effcient management to provide such service. lEmphasis added. ) Mas.G. Gen. Law An. Ch. 1598 Initial Decision 102 F. identifiable Massachusetts interest. Indifference, or neutrality on the part of the state, or even enthusiastic support of cooperation by the state bureaucracy, are not adequate grounds for suspending the federal antitrust laws. The exemption only applies if there has been a (30) positive election by the legislature to remove competition in order to effectuate a state regulatory objective which could not be accomplished if normal competitive decision-making were permitted. Such a purpose has been found in those cases in which the state action exemption has been granted, whereas a determinative consideration in denying the exemption has been that the state has not clearly articulated as an objective the elimination of competition, or may only have been neutral on the question of competition. The threshold issues then are state intention to suspend the comproven. In Parkerpetitive market, and how that intention is Brown64 itself, the intention of the state respecting the federal antitrust laws was never in doubt since the challenged California statute had as its indisputable (3I) purpose keeping produce off the market in order to raise prices. The "legislative command"65 by California for accomplishing this blatantly anticompetitive objective involved both private producers and state offcials. The process was initiated by a proposal from growers who were authorized to act in concert to draw up a plan to limit production. In response to the growers' proposal, a state offcial assembled a committee of producers and processors which was required to formulate a restrictive plan. The plan of the committee was forwarded to a state commission for review for possible agricultural waste and unreasonable profis. If approved by the state commission, and after a favorable referendum of growers, the plan had to be followed by all growers at the risk of incurring penal sanctions.

In upholding the California plan for limiting production in order to raise prices, the Supreme Court said that Congress did not intend to apply the antitrust laws to state action regulating economic activity within its own borders, and while some state action may be invalidfor example, a naked authorization by a state that its citizens violate the federal antitrust laws without regard to state supervision-the California scheme did not fit into this category. There is nothing in Parker to suggest that the result would have been (32) different had 63 The distinction belween legislative expreasioIl of policy and support for a COll5e oCaetian which admiwstrators may find convenient is shown at the federal level by the fact that prior to 1948 there was no antitrust immunty for cooperative ratesetting by interstate carriers notwithstanding the view of the Interstate Commerce Commission that cooperation was useful, and that without such cooperation the intricate task of railroad rate-making (involving the complexities of interlocking syslell not at issue here) would be virtually crippled.Railroad Rate BureorL ond The Anti.Trusl Laws 46 Col L- Rev. 990 (1946). It was not until Congress specifically allowed for such cooperation that immunty from the antitrust laws was available.Pan American World Airways v. United States 371 US- 296, 306 n. lI (1963).

r.. 317 U.S. 341 (1943).

6:ld.at350.

1176 Initial Decision the suit been brought against the private growers rather than a state offcial; hence, for purposes ofthis discussion, I start from the premise that the state action exemption is available to private organizations acting pursuant to state regulatory policy, notwithstanding some recent doubt on this subject raised by the.plurality opinion in Cantorv. Detroit Edison Co.

The crucial difference between the state action in Parker and the alleged collusive promulgation oftariffs at stake here is that in Parker California had clearly intended to suspend the workings of the competitive market, and to rely instead upon the pooled self-interest of the producers to produce a plan which would limit production and raise prices. Inherent in the California plan was the state policy that competitive decision-making respecting prices and production would yield to a form of cartel-like planning which by definition required cooperation among producers. Respondent, in contrast, has identified no expression of policy by the Massachusetts legislature which requires that competition among movers be restricted for the purpose of raising the cost of moving services to its citizens, or for any other purpose that can be identified with suspension of the federal antitrust (33) laws. Moving, unlike certain utilties, is not inherently monopolistic, nor has a convincing case been made for cooperation on the basis that the interlocking nature of the service rendered requires combinations. As it happens, to the limited extent that Massachusetts has spoken on the subject, the state legislature has said that it favors rather than opposes competition among movers. The Motor Carrier Act provides that "unfair and destructive competitive practices 67 are banned, an endorsement, albeit weak, of fair and non-destructive competition. Perhaps even more significant than what the Act does say, is the fact that it does not say that it is Massachusetts policy to have uniform rates among competing movers, which at least presumptively would tend to be a natural consequence of collective ratesetting.

That the state must affrmatively and decisively intend to suspend the operation of the free market before there can be immunity was 6s where a minimum feeconfirmed in Goldfarbv. Virginia State Bar schedule was established by the Fairfax County Bar Association and enforced by the Virginia State Bar Association. The Fairfax County Bar Association is a private group but the Virginia State Bar Association is the offcial (34) agency for administering the ethical code adopted by the Virginia Supreme Court. Notwithstanding the direct involvement in Goldfarb of a state agency, the Supreme Court held 66 428 u.s. 579, 585--92 (1976).

67 Mass. Gen. Law Ann. Ch. 159B sa 421 S. 773 (1975).

initial Decision 102 F. that there was no state action exemption because there was no ruling of the state (that is, a decision of the Virginia State Supreme Court which had jurisdiction over lawyers) compelling the adoption of minimum fee schedules and thereby showing an intention to suspend the operation of the competitive market in the setting oflegal fees. The Court said that the existence of a state policy requiring the alleged anticompetitive activity was a threshold consideration in determiningwhether the state intended to suspend the antitrust laws. Ifa unit ofthe state merely authorizes the questionable anticompetitive activity, but there is no clearly announced state directive requiring it, then there is no federal antitrust exemption even though an offcial agency of the state joined in the questioned action. As the Court put it: It is not enough that.. . anticompetitive conduct is "prompted" by state action; rather anticompetitive activities must be compelled by direction of the State acting as a sovereign.69 (35) After Goldfarb the state action exemption was next considered in Cantor v. Detroit Edison CO. 70 which is especially instructive as to what constitutes an adequate evidentiary showing of state intent to suspend the federal antitrust laws. In Cantor an electric public utility was sued for providing its customers with a limited number of light bulbs at no separate charge as part of its sale of electric power. Cantor a retail druggist, alleged that the joint sale of light bulbs and electric power was a tie-in proscribed by Section 3 of the Clayton Act and Section 2 of the Sherman Act. Detroit Edison defended the practices by saying that it was done under a tariff fied by the utility (and approved by the Michigan Public Service Commission) which provided for the inclusion of Jight bulbs in the sale of electricity. As in this case, the Michigan Public Service Commission retained the right to review the combined electricity-bulb tariff and had full authority to investigate any aspect of the tariff for reasonableness. The tariff was originally proposed by Detroit Edison but it only became effective after full consideration and affrmative approval by the Michigan Public Service Commission. Detroit Edison could at any time fie a new tariff to become effective (36) upon Commission approval, but as long as the old tariff was in effect the utility was compelled by law to follow it, including the provisions respecting light bulbs. The majority ofthe Supreme Court held that there was no antitrust immunity for Detroit Edison s distribution of light bulbs. The Court observed that while the state had approved a tariff with the light bulb 1d. at 791. 1n Batesv. State Boro! Arizona 433 U.S. 350 (1977), the challenged restraint on lawyer advertising ret1ected an affrmative command of the Arizona Supreme Court and a clear articulation of the state' s policy with regard to professional behavior, with the result that there was no antitrust liability. 428 U.S. 579 (1976).

1176 Initial Decision provision, apparently it would be equally receptive to the abolition of the tie-in. Michigan in effect was neutral on the subject oflight bulbs tied to the sale of electric power, and the fact that the state had tolerated (and indeed authorized the sale after the tariff was approved) was not an adequate showing of affrmative intent to suspend the application ofthe antitrust laws. Crucial to the decision in Cantor was the determination that unlike the price-stabilization scheme in Parker the party claiming the exemption could point to no clearly articulated Michigan policy requiring anticompetitive conduct in the sale of light bulbs. Similarly, Mass Movers has identified no clearly articulated state policy which logically can be fulfilled only by allowing collusion among. respondent' s members in the rate-making process.

Although Cantor rests on the absence of any clearly articulated state policy requiring the suspension of competition in the sale oflight bulbs, respondent argues that the case also (37J teaches that immunity for private conduct required by state law might be justified on the grounds offairness if a private citizen has done no more than obey the command of the sovereign. In Cantor itself, however, this "fairness defense was only considered on an arguendo basis since the state had not ordered that light bulbs be tied to electricity distribution, but had merely required adherence to a tariff which incidentally included the light bulb tie-in which had been initiated by the public utility. Here, too, a distinction must be drawn between what the sovereign has ordered (that tariffs be obeyed) and the practices which are authorized but not ordered by the state (joint rate-making activity by respondent' s members). In the language of Cantor respondent' s members had an option to have, or not to have 71 ajoint rate-making program, and it is not unfair to hold it responsible for the antitrust consequences of its own decision which was not compelled by the state. Also arguing from language in Cantor respondent says that since Massachusetts is already regulating the moving industry, it is likely that Congress would not have intended to superimpose the federal antitrust laws as an additional, and perhaps conflicting, regulatory mechanism. But in this part of its decision, the Supreme Court concluded that an exemption wil (38J be implied only if one is necessary to make the regulatory act work "and even then only to the minimum extent necessary. 72 This bring us back full circle to the proposition that respondent must identify a policy of Massachusetts which requires suppression of the federal antitrust laws because the state regulatory scheme would be frustrated if the exemption were denied. Again, respondent has failed to meet this standard. 71 Id. at 594.

72 /d at 597.

,,( Initial Decision 102 F. Following Cantor the Supreme Court returned to the problem of proof of state intention to suspend the antitrust laws in City of Lafayette v. Louisiana Power Light Co. 73 There the Court cited with approval the Fifth Circuit's cautionary warning against rushing to unjustified conclusions about whether restrictive practices by a municipality engaged in the electric utility business are directed by the state as part of a policy to substitute regulation or governmentsupplied service for competition. In its opinion, the Fifth Circuit had specifically rejected the notion that in the case of a municipality an express statutory mandate is required, and instead directed an inquiry along the following lines- Thus, a trial judge may ascertain, from the authority given a governmental entity to operate in a particular (39) area, that the legislature contemplated the kind of action complained of. On the other hand, as in Goldfarb, the connection between a legislative grant of power and the subordinate entity s asserted use of that power may be too tenuous to permit the conclusion that the entity s intended scope of activity encompassed such conduct.74 Respondent seizes on this language of the Fifth Circuit, cited approvingly by the Supreme Court, as indicative of a relaxation of Goldto the point that state policy may be inferred from the mere farb' authorization ofthe agency tariff by MDPU. City of Lafayette does not support this argument since the case only addresses the special problem of determining whether the practices of a political subdivision are contemplated by the state. What both the Fifth Circuit and the Supreme Court were saying is that in examining the activity of a political subdivision of the state, it may be proper to look at other indicia of state intention besides a statutory command directly addressing the questioned conduct, because historically state legislatures do not spell out the exact metes and bounds of what a city may do when it is given authority to operate in a particular area.75 But as the Fifth Circuit made plain, even in the case of a city authorized by statute to run a business, (40) the basic rule of Goldfarb applies, and although the authorization need not appear in the statute itself, the restrictive conduct must nevertheless be linked to a clear and affrmative indication of intent by the state legislature to suspend the antitrust laws. It is significant that the Fifth Circuit in City of Lafayette indicated that its resolution of the state intention issue was in accord with Duke & Company Inc. v. Foerster 521 F.2d 1277 (3d Cir. 1975) where the state action immunity was claimed by Allegheny County (Pa.) as a 73 435 u.s. 389 (1978) 1\ City La(rlJette, La. v. La. PQwer Light Co. 532 F.2d 431, 434 (1976), quoted at 435 U.S. 394. /5 The Supreme Cou.rt 1977 Term 92 Harv. L. Rev. 57, 282 (1978). MASS. FURNITURE AND PIANO MOVERS ASSOC., INC. 1197 1176 Initial Decision defense to a charge of alleged boycott of a beer manufacturer at Three River Stadium. The court in Duke Company said: We read Goldfarb as holding that, absent state authority which demonstrates that it is the intent ufthe state to restrain competition in a given area Parker-typ immunity or exemption may not be extended to anti-competitive government activities. Such an intent may be demonstrated by explicit language in state statutes, or may be inferred from the nature ufthe powers and duties given to a particular government entity. We proceed to an analysis of the statutory authority of those defendants-appellees in the light of the foregoing principles. 76 (41) The analysis undertaken by the Third Circuit established that while Allegheny County had been authorized to grant a food and drink concession in the course of operating the stadium, there was no proof of state intent to allow the county to engage in ilegal boycotts, and therefore there was no Parker v. Brown immunity. While City of Lafayette's evidentiary standard for determining state intent has been used in cases involving the business operations of governmental subdivisions such as counties and municipalities in recent decisions the lower courts have returned to the "compulsion " language of Goldfarb and Cantor whenever private persons have purported to operate under the cloak of the state action immunity. To avail themselves of the exemption, claimants have been required to prove that there is a clearly and affrmatively articulated intention to displace competition as shown by the fact that the private party is given no choice but to engage in the anticompetitive conduct.?S But even if City of Lafayette (42) Goldfarb and Cantorcan harmonized and treated as standing for the proposition that state intent to suspend the federal antitrust laws may be shown by a statute compellng the anticompetitive conduct being considered or some ?9other convincing evidence of intent respondent' s claim to the exemption would nevertheless fail. For not only has Massachusetts failed to compel joint rate-making, but respondent has not even identified a statutory objective which can only be carried out by such activity, and thus inferentially requiring a suspension ofthe federal antitrust laws. As a matter of fact, respondent has not even advanced a convincing reason why movers should be insulated from competition, or why the 7f'521 F. 2dat 1280.

71 See, e. , Corey v. Look 641 F.2d 32 (lst Cir. 1981);Affiliated Capital Corp.v. City of Houston 519 F.Supp. 991 (S.D. Tex, 1981);Guthriev. Genesee Cty., N. Y. 494 F.Supp. 950 (W. NY 1980); Highfield Water Co. v. Public Service Com 488 F.Supp 1176 (D. Md. 1980) See, e. , Virginia Awdmy of Clinical Psy. v. Blue Shield of Va. 624 F.2d 476 (4th Cir. 1980);United States v. Title Ins. Rating Bur. of Arizona 517 F.Supp. 1053 (D. Ariz. 1981);Litton Systems, Inc. v. American Tel. Tel Co., 487 F.Supp. 942 (S. N.Y. 1980); United Statesv. Southern Motor Carrier. Ra.te Confer., Inc. 467 F.Supp, 471 (N.D. Ga. 1979); Woolen v. Surtrun Tarimbs, Inc" 461 F.Supp. 1025 (N.D, Texas 1978). 79 See Areeda and Turner Antitrust Law 11 215b (1980). Initial Decision 102 F. state legislature might conceivably contemplate such an extreme departure from the competitive norm.

In lieu of a clear and authoritative statement from the Massachusetts legislature that it intends to displace competition in the moving industry, respondent next turns to the generalizations of Section 7 of the Massachusetts Antitrust Act, (43) which provides for an exemption from the state antitrust law for . . . (b) Any activities which are subject to regulation or supervision by state or federal agencies; or (c) Any activities authorized or approved under f( deral, state or locallaw. As respondent would have it, this statutory language overrules by implication the federal antitrust laws, notwithstanding the Supreme Court's aversion for implied antitrust exemptions 8! and the equally clear precedent that state exemption to the federal antitrust laws only comes about when the state has given an unambiguous indication of its intent. Here, even the state s intention with respect to a possible exemption for joint rate-making under state law (let alone federal law) is ambiguous. In the first place, since there is no federal Massachusetts, or local law authorizing or approving joint rate-making, Subparagraph (c) of Section 7 is irrelevant. Furthermore, there is no proof that the pre-filing joint rate-making activity itself is subject "to regulation or supervision by state or federal agencies" as required by Subsection (b).82 What is subject to "regulation or supervision " are the tariff (44) themselves which when duly fied with the MDPU may be reviewed for reasonableness,83 Thus Subsection (b) may represent nothing more than a limitation on the right of customers ofmoyers to bring a treble damage suit (or to have a parents patriae suit brought on their behalf) challenging a tariff which had been accepted by MDPU. Such immunity already exists as part of federal antitrust law under the Keogh doctrine which limits the right of customers to assert an antitrust claim in support of damages allegedly flowing from a tariff approved by a regulatory commission. The Keogh doctrine, however, does not restrict the power ofthe federal government to seek equitable relief against continuation of an ilegal practice, includ' ng the joint rate-making activity which produced the otherwise immune tariff,85 And while Section 7 of the Massachusetts Antitrust Act may be adequate for granting the limited antitrust exception contemplated by Keogh, this provision does not meet the Parker, Goldfarb, Cantor standard for total federal antitrust immuni- 1; Mass. Gen. Laws Ann. Ch. 93 ar See, e.g., United State$ v. Philadelphia Not. Bank 374 U.S. 321, 348 (1963) 'Finding 24 Ij See, however Finding 24 for an assessment of the pervasiveneS1 of this reguation and supervision. Keogh v. C. & N. WRy. Co. 260 U.s. 156, 162- 63 (1922). Georgifl v. Pennsylvania R. CO. 324 S, 439 (1945) ), 1176 Initial Decision ty which requires a clearly articulated and affrmatively expressed statement that the legislature intends (45) to suspend the operation of the free market as it applies to the moving industry. No such statement appears in this record.

Equally unavailing is respondent' s argument that the federal antitrust laws do not apply here because of 49 U. C. 10706.86 By its terms this federal statute allowing joint rate-making before the Interstate Commerce Commission under certain conditions does not apply to intrastate movers. Congress has the option to exempt certain combinations from the antitrust laws, and where it has done so there is created an immunity even for organizations formed for no other purpose than to fix prices. See, Northern California Supermarkets, Inc. Central California Lettuce Producers Cooperative, 580 F.2d 369 (9th Cir. cert. denied, 439 U.S. 1090 (1979).8 Massachusetts has a similar option, but it must state its policy (46) affrmatively so that all doubts about its intentions are removed, and public attention can be focused on how actively it supervises the replacement it has chosen for the competitive market.

Noerr-Pennington In addition to its claim of immunized state action, respondent has from time to time advanced the argument that its tariff activity consists of nothing more than joint petitioning of a state agency which is protected by the Noerr-Pennington doctrine. This defense is rejected for the same reasons expressed in Prehearing Order No. 18. In Eastern R. Cont v. Noerr Mvtors 88 defendants conducted a deceptive publicity campaign designed to encourage the legislature and governor of Pennsylvania to act against the interests of truckers. While there was no question that the campaign was the result of a combination among a group of railroad presidents, and that its purpose-to limit severely the abilty of truckers to compete with railroads for long-distance (47) freight-was anticompetitive, the Supreme Court said that the railroad' s anticompetitive motive was not controllng, and the public interest of encouraging a free flow of ideas to policy-makers and the railroad' s First Amendment rights of petition and association were not to be abridged by antitrust considerations. The decision, however, removes Sherman Act liability solely 86 49 US.C. 10706 is the recodification of Section 5a of the Interstate Commerce Act, also known as the Reed-BI1Jwinkle Act. The act, which WfI!I passed in 1948 to counteractGeorgia v. Pennsylvania R. Co., see notes 60 and 63 supra. provide that interstate carriers may apply to the Inter tate Commerce Commission for approval ofajoint rate-making agreement 7 As it happens, at the federal level, congrcf\ ional tolerance for joint rate-making amongst competing interstate movers has diminished. The Motor Carrier Act of 1980 (Pub. L. :;0. 96-296, 94 Stat. 793) provides for an end to antitrust immunity for the collective settinl; of single line rates as of January 1. 1984. This provision of the Motor Carrier Act of 1980 also applies to the interstate moving industry- H-R Rep- No. 96-1372, 96th Cong . 2d Sess. 3 reprintpd inl1980) U.s. Code Congo & Ad. News 4271 , 4273 BB365 S. 127 (1961).

Initial Decision I02 F. from attempts to influence policy through lobbying, publicity, advocacy. and petitioning, and does not address the legality of any underlying conspiracies which have commercial implications. That Noerr is confined to the use of political activity to influence policy was confirmed in Mine Workers v. Pennington.B9 A union and a group of large coal mine operators, as part of a conspiracy to ruin small coal mine operators, petitioned the Secretary of Labor to establish a high level of minimum wages under the Walsh-Healey Act. The Supreme Court said that the act of petitioning the Secretary of Labor in his capacity as a policy-maker was protected political activity, notwithstanding the anticompetitive purposes of any underlying agreement between the union and large operators. (48) 90 More recently in California Traruportv. Trucking Unlimited the Supreme Court extended Noerr-Pennington to concerted attempts to influence an administrative body. But, again, the Court made plain that the doctrine only protects political advocacy-broadly interpreted as attempts to influence the legislature, the executive, or an administrative agency in the making of policy. To argue, as respondent does, that the complaint's challenge to the alleged joint fixing of prices by respondent's members somehow interferes with Mass Movers' right of poliical advocacy, is analogous to saying that contractors should be allowed to conspire to fix prices on government road-building contracts so long as the results of the conspiracy are wrapped in the trappings ofa "petition" or proposal which may be said to convey policy information to offcial decision-makers. Nothing said before or after Noerr and Pennington allows for such a bizarre distortion of the concept of political advocacy, and the cases have rejected similar extensions and attempted misuse of the doctrine. Thus in Cantor the Court indicated that Noerr had nothing to do with the fiing of tariffs. (49) Merits In the absence of an exemption by reason of the state action defense and without the protection of the Noerr-Pennington doctrine, the practices of respondent and its members cannot survive a challenge under federal antitrust law. The members of the association, acting through the Board of Directors and the Tariff Committee, arrive at B9 381 U.S. 657 (1965).

404 508 (1972).

91 428 U-S. 579, 601 02. See aL o George R. Whitten, Jr., Inc. v- Paddock Pool Builders, Inc. 424 F.2d 25 (1st Cir. 1970) (activity ofaitempting to infIuenc a public offcial's pur hase of products undor s competitive bidding statute was not paUticaJ activity within Noer,..Penn.ington); United State. v. Southern Motor Carriers Rate Confer., In.c. 467 F.Supp. 471, 485 (N.D. Ga. 1979) (colh.1sive filing afrates constitute "independently cognzable acts outside the scope of theNoerr-Pennington doctrine MASS. FURNITURE AND PIANO MOVERS ASSOC., INC. 1201 1176 Initial Decision a mutually satisfactory price schedule to be submitted to MDPU."2 Such an agreement by competitors respecting price is a per se violation of Section 1 ofthe Sherman Act and Section 5 (50) ofthe Federal Trade Commission Act. FTCv. Cement Institute 333 U.S. 683 (1948); Georgia v. Pennsylvania R. Co. 324 U.S. 439 (1945); United States Joint Traffic Association 171 U. S. 505 (1898); UnitedStatesv. Freight Association 166 U.s. 290 (1897); United States v. Southern Motor Carriers Rate Confer., Inc. 467 F.supp. 471 (N.D. Ga. 1979). It is of no moment that the rates agreed upon may in fact be reasonable or may be reviewed for reasonableness. Georgia v. Pennsylvania R. Co. 324 U. S. 439 (1945); United States v. Freight Association, 166 U.s. 290 (1897). As noted earlier, agency review for reasonableness does not preclude aggressive competition by firms subject to that review."3 Nor can an agreement respecting joint tariffs be justified on the grounds that the association or its members have not fixed a uniform price to consumers because movers are free to select one of 10 rate schedules, or alternatively may fie exceptions to the agency schedule, or may fie an independent schedule. While anyone of these options may result in price variations, concerted activity to influence or tamper with the level of prices, which putative competitors may either accept or reject, is as violative of the antitrust laws as a conspiracy aimed at absolute uniformity. Goldfarbv. Virginia State Bar 421 U.s. 421 U.s. 773 (1975); United Statesv. Container Corp. 393 U.s. (51) 333 (1969); Nationwide Trailer Rental System, Inc. v. United States 355 U.s. 10 (1957); United Statesv. Socony- Vacuum Oil Co., 310 U.s. 150 (1940); Plymouth Dealers ' Ass n of No. Cal. v. United States, 279 F.2d 128 (9th Cir. 1960). Besides, the record shows that price variations in the Massachusetts moving industry are largely ilusory: respondent is the moving force behind the eflort to achieve price identity, and is the organizer of zone meetings which are held to ensure that movers located in a particular geographic area uniformly adopt one of the rate schedules."4 Relief On the question of relief FTC v. Mandel Brothers 359 U.s. 385 (1959) and FTCv. National Lead Co. 352 U.S. 419 (1953) allow the Commission wide discretion so long as the order is reasonably related to the proven violations, or can be justified as an appropriate degree of "fencing in," But even this expansive standard for relief may be exceeded by complaint counsel's proposal to prohibit respondent from-(52) 92 Findings 10-13 93 See text at notes 60 and 61 supra.

94 Findings 20-23.

Initial Decision 102 F Communicating any information concerning or affecting intrastate rates charged or proposed to be charged by carriers for the intrastate transportation of property or related services, goods or equipment. . . . In support of this proposed relief, complaint counsel would undoubtedly cite to the exhibits which show that respondent uses its bulletin and other communications to apprise members of the rates These rates, however, are a matter ofbeing charged by others,95 public record once they are fied with the MDPU, and the effcacy of an order against compiling and publishing public information is extremely doubtful. For immediately after such an order became final it could become a complete nullty should an interested mover record the published rates and circulate this information to his fellows. Besides, publication by respondent of public information about rates is not at the heart of the issue here. The crux of the matter is the conspiracy (i. the deliberations of the Tariff Committee, the fiing of joint tariffs, the zone meetings, and the exhortations to raise prices uniformly) which produces these rates. If these prices are eliminated, it may even be in the (53) public interest to have non-collusive rates publicized since this may stimulate competitive responses. All other objections which respondent has raised to the proposed order are ill-founded. Thus, with good cause the scope of the order is defined as "transportation and delivery of property," rather than transportation of household goods and oflce equipment " as respondent urges: the former accurately describes what respondent' members do, while the latter would be an open invitation to definitional hassles over whether a particular item constitutes "household goods and oflce equipment.

Provisions of the order (especially Sections II2) and III are properly directed at all members of the association, whether they are movers, suppliers, manufacturers, attorneys, or insurers. As it happens respondent's reply brief reinforces the need for a comprehensive definition of umember" for it intimates that so-called ttassociate members" may be called upon to perform certain chores (vaguely described as circulating Hcost data or any other information ) which the Hcarrier members" would be prohibited from doing, (54) Respondent also requests a proviso to the "tariff' definition in the order allowing the association to circulate rate item language for particular services or materials which may be completed by members by the insertion of independently established rates. "I a . 38C, 418. 42B, 43B, 448, 45B, 46B, 478 R 4 50B, 51B, 5 , 548, 5il, 5M, 58 61C 96 Bel' Re!;pondent R Reply Memurandum at pp. 6-9. ), 1176 Initial Decision This proposal is rejected since the underlying purpose of the orderinstil competition into a Massachusetts moving industry which has been enmeshed in collusive arrangements-may be frustrated by the circulation of association-sponsored "rate item language" which could have the practical effect of discouraging the offer of alternative and perhaps more attractive services or materials. Respondent's request to be excused from the standard order coverage of "successors and assigns" as well as the prohibitions against committing illegal acts "through any corporation, subsidiary, division, or other device" is denied. In a word, the movers of Massachusetts should not be allowed to fix prices whether they call themselves Mass Movers" or decide to reorganize and adopt a new name, say, Bay State Movers." The record reflects respondent' s ingenuity in changing the name (55) of the Tariff Committee (its principal price fixing entity), and I would not allow such an obvious loophole to exist.

Respondent would also change the language in Paragraph One the order from a prohibition against conspiracy amongst "carriers who compete" to a prohibition against a conspiracy among the "association s common carrier members." Again, this is an obvious invitation for members to engage in an evasive ploy which should not be encouraged. Respondent's additional request for a proviso exempting activity "authorized" by MDPU is denied for the reasons explained in the discussion of the state action defense. In addition, I have denied respondent's request to amend proposed Paragraph Four of the order in order to allow the association to suggest, urge, encourage, persuade, or influence members to adopt lawful tariffs. Given respondent' s track record of using its powers of persuasion for the purpose of fixing rates uniformly, and particularly its proclivity for first obtaining a commitment to a price increase from one member which is then used to persuade others 9s this relief is an (56) appropriate way of preventing a conspiracy of the "wheel and spokes " variety.

Respondent's objections to Paragraph Five of the order, which bans a rate or tariff committee, must be considered in the light of the record evidence proving that the tariff committee has been a hotbed of price fixing activity)OO Against this background, I would not allow these competitors to get together in any forum in which tariffs are on the agenda.

As for the objection to Part II ofthe order which requires that Mass Movers cancel its present tariff, this relief is justified since the g' Finding 10.See P P Collier Son Corp. v. FTC: 427 F.2d 261 (6th Cir. eert. denied 400 U.s. 926 (1970). 98 See Finding 22 n.41, Finding 23.

99 See, e.g., Interstate Circu.itv. United States 306 U.S. 208 (1939) 100 See Finding 10 Initial Decision 102 F. present tariff was collusively arrived at, and non-collusive tariffs are therefore, in order. Certainly, there is no need to delay this relief until such time as MDPU sees fit to call for a new tariff: under Massachusetts law MDPU may never call for a new tariff since tariff changes are initiated by the movers themselves.

The order provision requiring the respondent to amend its bylaws to require members to observe the provisions of the Order as a condition of membership in the association is opposed (57) on the grounds that somehow this imposes liability on respondent for the acts of members. The provision has no such effect. It merely requires respondent to use the act of enrollment as a way of obtaining an acknowledgment that members wil comply with the provisions of the order. Considering the fact that respondent has enrolled members in the past on the basis of the representation that one ofthe benefits of membership is that prices will be fixed 101 it is entirely appropriate that movers are now told that this particular privilege of membership has been abolished, and that the association may no longer be used for this purpose.

Respondent objects generally to Part III ofthe order and the Appendix which require the membership be informed of results of this proceeding. This is appropriate reliefin a price fixing case, and the draft letter to the membership accurately reflects the provisions of the order.

Finally, Part IV of the order requires that respondent notify the Commission thirty days before any proposed change in the organization of respondent. This is standard relief which is necessary in order to prevent attempted evasion. (58) IV.

CONCLUSIONS 1. The Federal Trade Commission has jurisdiction over the subject matter of this proceeding and over respondent. 2. The acts and practices charged in the complaint took place in or affected commerce within the meaning ofthe Federal Trade Commission Act.

3. Respondent and its members, offcers, and directors have engaged in a conspiracy to restrain price competition amongst movers of household goods and offce equipment. This conspiracy is an unfair method of competition and an unfair act and practice in commerce or affecting commerce in violation of Section 5 of the Federal Trade Commission Act.

101 SeeF'finding 20 YUHNlTUHr. ANU PIANU MUV UL.. INC. L::UOJ 1176 Initial Decision 4. This conspiracy is not exempt from Section 5 ofthe Federal Trade Commission Act by reason of the "state action " defense or the Noerr- Pennington defense.

Accordingly, the following order will be issued: (59) ORDER Definitions For purposes of this Order the following definitions shall apply: Carrier means a common carrier of property by motor vehicle. Intrastate transportation means the pickup or receipt, transportation and delivery of property for compensation within the Commonwealth of Massachusetts by a carrier authorized by the Massachusetts Department of Public Utilties to engage therein. Member means any carrier or other person which pays dues or belongs to the Massachusetts Furniture and Piano Movers Association, Inc.

Tariff means the publication stating the rates and charges of a carrier for the transportation of property within the Commonwealth of Massachusetts, excluding general rules and regulations. (60) It is ordered That Massachusetts Furniture and Piano Movers Association, Inc., a corporation, its successors and assigns, and its offcers, agents, representatives, directors and employees directly or through any corporation, subsidiary, division or other device shall forthwith cease and desist from:

1. Entering into, adhering to or maintaining, directly or indirectly, any contract, agreement, understanding, plan, program, combination or conspiracy to fix, stabilize, raise, maintain or otherwise interfere or tamper with the rates or prices charged by carriers that compete for the intrastate transportation of property or related services, goods or equipment.

2. Preparing, developing, disseminating or fiing a proposed or existing tariff provision which establishes, maintains or influences rates or charges for the intrastate transportation of property or other related services, goods or equipment in the Commonwealth of Massachusetts; provided, however this provision does not prohibit the Association from preparing and furnishing to its members a tariff format which sets forth general rules and regulations which members may use in preparing and fiing individual (61) tariffs with the Massa- 1206 FEDERAL TRADE COMl';' SSION DECISIONS Initial Decision 102 F. chusetts Department of Public Utilities which contain their own independently established rates and charges.

3. Coordinating or providing a forum for any discussion or agreement between competing carriers concerning intrastate rates charged or proposed to be charged by carriers for the intrastate transportation of property or related services, goods, or equipment. 4. Suggesting, urging, encouraging, persuading or influencing in any way member carriers to charge, fie or adhere to any existing or proposed tariff provision which affects rates, or otherwise to charge or refrain from charging any particular price for any services rendered or goods or equipment provided.

5. Maintaining any rate or tariff committee or other entity to consider, pass upon or discuss intrastate rates or rate proposals. (62) It is further ordered That Massachusetts Furniture and Piano Movers Association, Inc. shall:

1. Within three months after service upon it of this order, cancel all tarifls and any supplements thereto on fie with the Massachusetts Department of Public Utilities which establish rates or charges for transportation of property or related services, goods or equipment by common carriers in Massachusetts and take such action as may be necessary to effectuate cancellation and withdrawal. 2. Amend its by-laws to require members of the Association to observe the provisions of the Order as a condition of membership in the association.

It is further ordered That respondent shall within thirty (30) days after service upon it ofthis Order, mail or deliver a copy of this Order under cover of the letter attached hereto as "Appendix " to each current member of respondent, and for a period ofthree (3) years from the date of service ofthis Order, to each new member within ten (10) days of each such member s acceptance by respondent. (63) It is further ordered That respondent notify the Commission at least thirty (30) days prior to any proposed change in the respondent, such as dissolution, assignment or sale resulting in the emergence of 1176 Initial Decision a successor corporation, or any other proposed change in the corporation which may affect compliance obligations arising out of the Order. It is further ordered, That the respondent herein shall, within four (4) months after service upon it of this Order, fie with the Commission a written report setting forth in detail the manner and form in which it has complied with this Order. (64) APPENDIX (Letterhead of Massachusetts Furniture and Piano Movers Association, Inc. Dear Member:

The Federal Trade Commission has ordered Massachusetts Furniture and Piano Movers Association, Inc. to cease and desist its tariff and collective rate-making activities.

In order that you may readily understand the terms of the Order, we have set forth its essential provisions although you must realize that the Order itself is controllng rather than the following explanation of its provisions: 0) The Association is prohibited from engaging in any collective rate-making activities including the proposal, development or filing oftariffs which contain any rates for intrastate transportation services. Member carriers must file their own independentlyset rates for transportation of property or related services, goods or equipment within Massachusetts.

(2) The Association is prohibited from providing a forum for its members for the purpose of discussing such rates.

(3) The Association is prohibited from urging, suggesting, encouraging or attempting to influence in any way the rates members charge for their intrastate transportation services.

(4) The Association is prohibited from maintaining any rate or tariff committee which discusses or formulates intrastate rate or rate proposals. (5) The Association is required to cancel all tariffs and tariff supplements currently in effect and on fie at the Massachusetts Department of Public Utilities which were prepared, developed or fied by the Association. (6) The Association is required to amend its by-laws to require its members to observe the provisions of the order as a condition of membership in the Association. Sincerely yours Daniel W. Dunn Executive Director Enclosure Opinion 102 F.

OPINlON OF THE Commisslon By BAILEY Commissioner:

On June 12, 1980, the Federal Trade Commission (Commission) issued a complaint alleging that the Massachusetts Furniture and Piano Movers Association, Inc. (Association) and its members were engaged in an antitrust conspiracy to fix prices in violation of Section 5 of the Federal Trade Commission Act ("FTC Act"), 15 U. C. 45, by collectively formulating and fiing joint tariffs for moving household goods and offce equipment within Massachusetts and by engaging in additional concerted activity to eliminate price competition among its members.

The Association asserted that the Commission lacked jurisdiction over the Association, and denied that it or its members had committed any violations of Section 5 or the federal antitrust laws. The Association also contended that its rate-making activities were exempt from the antitrust laws and Section 5 of the FTC Act by reason of Parker v. Brown 317 U.s. 341 (1943), and the related line of "state action cases, and because their activities constituted political petitioning of a government agency protected under the Noerr-Pennington doctrine.! (2) Both parties moved for summary judgment on the Parker v. Brown and Noerr-Penningtonissues. Administrative Law Judge Morton Needelman (ALJ) granted complaint counsel's motion and the defenses were stricken. At a hearing on October 5, 1981, both sides introduced documentary exhibits, but no witnesses were called. On December 1, 1981, ALJ Needelman issued an Initial Decision based on the pleadings, stipulations and admissions, proposed find- Theings and conclusions, and the briefs submitted by the parties.2 ALJ made findings of fact (ID 4-21), rejected the Parker v. Brown (ID 22-46) and Noerr.Pennington defenses (ID 46-8), held that the concerted activities of the Association and its members violated the federal antitrust laws and Section 5 of the FTC Act (ID 49-51), and recommended entry of a remedial order to prevent recurrence of the violations (ID 51..4).

This matter is before the Commission on the Association s appeal from ALJ Needelman s Initial Decision. The Association s principal contention on this appeal is that its activities are immune from anti- Eastern R. Presidents Cont.fl. Noerr Motor Freightlnc. 365 U.s. 127 (1961);United Mine Workers u. Penning. tun 381 U.S. 657 (1965).

"The following abbreviations are used in this opinion: ID Initial Decision l"F - Finding of Fact in the Initial Decision ex - Complaint Counsel's Exhibit No RX - Respondel1t' s Exhibit Ko.

MASS. FURNITURE AND PIANO MOVERS ASSOC., INC. 1209 1I76 Opinion trust prosecution under the state action and Noerr-Pennington doctrines; the Association also asserts that the rates in question were set by the Massachusetts Department of Public Utilities (MDPU), rather than by the Association or its members. In its reply brief on this appeal, the Association purports to raise defenses based on the Interstate Commerce Act, (3) 49 U. C. 10706 and on Section 5(a)(2) ofthe FTC Act, 15 U. c. 45(a)(2).

For the reasons set forth below, we affrm the ALJ's decision. Respondent's Activities The facts found by the ALJ are not disputed by the Association and in any event are fully supported by the record evidence. Respondent is an association of some 300 common carriers which transport household goods and offce equipment within Massachusetts. FF I. Approximately 80 percent of such carriers in Massachusetts belong to the Association. FF 2. The Association performs no moving services, and does not possess a certificate of public convenience and necessity issued by either the Interstate Commerce Commission or the MDPU. At least half of the Association s members are engaged solely in intrastate commerce, and more than half neither hold ICC licenses nor are agents of interstate van lines with interstate authority. FF 5 & 8. (4) The principal function of the Association is the initiation, development, dissemination, and filing ofjoint tariffs and tariff supplements with the MDPU on behalf of and as agent for the Association s members. FF 8. Joint tariffs and tariff supplements are initiated and developed by the Association s Tariff Committee. The Tariff Committee proposals and recommendations for joint tariffs or revisions are submitted to the Association s Board of Directors for approval, and then are communicated to the general membership for comment. FF 10- 12.

Joint tariffs and tariff revisions are fied with the MDPU by the Association s Board of Directors, on behalf of the Association s members. Tariff decisions of the Board are ratified by the Association 3 The method of briefing followed by the A!\ ociation on this appeaJ is not in compliance with Rule 352 of the Commssion s Rules of Practice, and whiJe we have not rejected the Association s appeal on that account, it has hinderer and made more time-olisuming our evaluation of the issues presented The As:ociation s Appea! Brief consists of a 9-page memorandum, stating "questions intended to be urged on this appeal" and generally discussing certin aspects ofthosc questions, together with an "Appendix." The "Appendix " consists ofa 38-page Post-Hearng Memorandum fied with the AL. in November 1981 and a 9-page Reply Memorandum fied with the ALJ in January 1982. Moreover, the two memorlnda formng the "Appendix" in tur incorporate by reference still other memoranda fied by the Asciation with the ALJ: a 41...page principal memorandum and a 20-page reply memorandum supporting the Association s motion for summary judgment fied in May 1981 and July 1981 respectively. The Asciation also fied a 7-page Reply Brief on this appeal. The cumulative total of 117 pages purportedly incorporated as part of the Association s appeal brief greatly exceeds the page limitation set forth in Rule 3.52 of the Commssion s Rules of Practice. In order to review the issues the Association apparently wishes to raise on this appeal the Commssion had to undertke an uneceoorily time-onswnng and laborious search through the various involuted submissions. Opinion I02 F.

general membership at annual meetings, and the members indicate their formal acquiescence in the joint tariff by fiing powers of attorney and concurrence forms with the MDPU. FF 13. Under Massachusetts law, a mover must fie a tariff with the MDPU containing the mover s charges for moving household goods and offce equipment. Once the tariff or tariff supplement has been accepted by the MDPU, Massachusetts law requires the mover to adhere to the tariff or supplement until a new tariff or supplement is fied and becomes effective. FF 7.

No Massachusetts statute or regulation requires or compels movers to formulate or fie a joint tariff, or to adopt uniform moving rates. The Massachusetts Motor Carrier Law, Mass. Gen. Laws Ch. 159B does not require joint formulation of rates included in tariffs fied with the MDPU, and does not otherwise contain any expression of state policy that motor carriers should jointly formulate rates. The statute expressly requires each common carrier to "establish . . . rates (and) charges " which automatically "become effective on a date fixed by such carrier. . ., unless suspended by the (MDPU) prior to its effective date * * * " Chapter 159B empowers the MDPU to review the rates fied by each motor carrier to ensure that those rates are consistent with the policy expressed in Section 1 and are not unjust or prejudicial, and empowers the MDPU to reject rates that fail to comply with those criteria. The MDPU also is to establish each year !!reasonable maximum and minimum rates or charges consistent with industry and economic conditions and consistent with the declaration of policy contained in Section 1."

MDPU regulations do not require motor carriers jointly to agree upon the rates to be included in the tariffs fied with the MDPU. A regulation promulgated by the MDPU, however, does permit (5) any individual mover to utilize an agent to fie for it, or to adopt and become a participant in a tariff fied by another mover: (a) Whenever a carrier. . . desires to give authority to an agent to issue and fie tariffs and supplements thereto in its stead, an appropriate power of attorney .. . shall be used (b) Carriers. . . may become participants in such tariffs which are issued and fied by another carrier or his agent by the giving of a proper concurrence. FF 9. Significantly, this regulation does not in terms authorize the joint formulation of rates, but merely allows a carrier to elect to participate in a tariff that has been previously fied by another carrier. Neither the MDPU nor the Commonwealth of Massachusetts has sought to participate in this proceeding. The record reflects that the 4 The text of the relevant portions of Ch. 15gB is set forth in the Appendix to the opinion. II76 Opinion MDPU concluded that it would be inappropriate for it to intervene. (Prehearing Order No. 10, entered December 10, 1980, enclosing communication from the General Counsel of the MDPU). Once a mover elects to participate in a tariff or supplement fied by another mover, or in a tariff fied by an agent (as here by the Association), the mover must adhere to the rates specified in the tariff, unless the tariff is suspended by the MDPU or the mover subsequently fies a separate tariff or fies for an exception to the tariff which the other mover or agent has fied. FF 14.

Tariffs automatically go into effect on whatever date is specified as the effective date of the tariff, unless the MDPU suspends the tariff prior to that date. FF 16.

The Association fied its first joint tariffin September 1938. Its most recent joint tariff fied prior to the issuance of the complaint was Number 14, fied in May 1971 and subsequently revised on six occasions. FF 8.

While the members of the Association are not required by Massachusetts law or regulation to participate in joint tariffs fied by the Association, and can fie independent tariffs, in fact there is overwhelming acceptance by the members of the basic joint tariffs fied by the Association. For example, from 1972 until the fiing of the Commission s complaint, 98 percent of the membership participated in the hourly rate tables and 99 percent participated in the packing schedules. FF 19. (6) The Association has directly acted to eliminate rate competition and obtain uniform and higher rates. For example, the Association held meetings at which members agreed to specified rate increases and exhorted members to adopt uniform rates and rate increases. FF 20-23. In 1961 the Association s members voted at a meeting to increase rates charged for a truck and three men: those that had been charging $16 agreed to charge $18, and all but two of those that had been charging $14 agreed to charge $16. RX 86A, 86B. In 1970, the Association s Executive Director wrote to Association members in Zones I and II (Western and Central Massachusetts) to announce a general Zone meeting. He reported that a Zone meeting among Cape Cod members had been successfiII and that all ofthose members were increasing their rates from $25 to $27 an hour. He added that "it is possible to achieve rate uniformity in your area, but somebody must make the first effort." CX 72. In 1973, the Executive Director advised several Association members in the Fall River area that he had been able to stop" two movers from reducing their rates from Level 3 to Level 2. He wrote other movers in the area: "in the interest of rate stability. . . I hope that you wil also go along with this rate" (CX 82) and held all subsequent Level 3 fiings until he had received rate g., Opinion 102 F.

changes from all of the movers in the area. CX 83-88. A month later he reported to the Association s Board of Directors that the "Fall River area has stabilized their rates and are now all on Table 3." CX , CX 79--8. In 1975, the Executive Director wrote to two prospective members that the "prime function" of the Association is to provide its members with a tariff "with the objective of creating uniformity in rates." CX 92, 93.

The Association periodically sends a Bulletin to its members. The Bulletins identify each mover who has increased its rates and specify the extent of the rate increase; many of the Bulletins also analyze, by Zone, the rate levels being charged by movers throughout Massachusetts. SeeCX 38B, 40B, 43A, 45C, 49B, (7) 52B, 57B, 60A. The Bulletins regularly exhort members to increase their rates. Jurisdiction In its reply brief on this appeal 6 the Association disputes the Commission s jurisdiction over the Association, based on Section 5(a)(2) of the FTC Act, 15 V. C. 45(a)(2), which establishes the Commission jurisdiction over corporations, with (8) various exceptions including common carriers subject to the Interstate Commerce Act, 49 U. 10706. The Association of course is not an exempt common carrier: is not engaged in the transportation of goods or property and does not have a certificate of public convenience and necessity as required of all motor carriers subject to the Interstate Commerce Act. Thus the Association, a Massachusetts corporation, is within the Commission jurisdiction. The fact that the Association operates as an agent for common carriers, some of which are subject to the ICC, does not qualify it for a common carrier exemption. See Breen Air Freight, Ltd. ex 37 A (Jan. 1972): "If your pretax profit margin is shrnking then. . . you should (almost must) apply for a rate increase to maintain your financial integrty; ex 43A (Oct. 1973): "Your lIBSciatioD offce is receiving a number of inquiries concernng hourly rates mostly having to do with competitor s rates and what are the averages in each Zone and statewide. Ths. . . would seem to indicate that the bottom line (the profit line) is not measuring up to what it should he.. . . You wil note in the above (hourly ratej anaysis that 82% are on the rate of$25 or more and 63% are on the rate of$27 or more. How do you stand and how does your bottom line look?" ex 44A (Jan. 1974): "We have always been a firm believer that a mover cailwt provide quality service unless his rates compensate him enough. . . . The recent increases would appear to confirm this belief. . . . The association offce urges all of our carrier members to take a hard look at your hourly rates.all the offce ifyou want to just tak about this. If your decision ia to roove up a Table or two it is a very aimple matter for us to proceed and we wil do all the work. . Remember-juat drop a note or call your assciation offce if you have a need to increase your hotlrly rate Tahle; CX 50B (Nov- 1975): Comment on "the practice of some membern . . . to stlhmit 'flat bida not to exceed bids,' and 'low hailing.' The industry aeema to be especially plagued with thia practice dtlring this slow economic period we are in. We are sorry that some of our members are tempted to indulge (in) this practice as it does compromiae our tariff, weakens the solidarity of our assciation and ia unethical. The lesson is taught over and over again that underctltting, while it brings apparent transient prosperity, eats out the vitas of the company practicing it. But it is taught in vain; CX 55A (Oct. 1976): tranmit.'! forms for membern to fill out and !:nd to the Assciation: "BEAR IN MIND: WE ARE NOT JUST AFTER INCREASED HOURLY RATES BUT ALSO PACKING AND WEIGHT RATES. WE ARE ALL INVOLVED, LET' ALL COOPERATE"; CX 60B (Jan. 1980): "DO YOU NEED TARIFF RELIEF" If any of your DPU ratea are inadequate, contact your assciation offce 6 Contrary to Commgsion Rule of Practice 3.52(b)(3), the Association did not specify (or even mention) theae issues in its principal Appeal Brief.

Il76 Opinion v. Air Cargo, Inc. 470 F.2d 767, 771-73 (2d Cir. 1972), cert. denied, 411 S. 932 (1973), where a corporation formed solely to act as agent for airlines for terminal and cartage services was deemed not an !lair carrier" under the Federal Aviation Act for purposes of federal antitrust jurisdiction; see also Official A irline Guides, Inc. v. 630 FT 2d 920, 923 (2d Cir. 1980), cert. denied 450 U.S. 917 (1981). Respondent argues that the Association derives immunity from the fact that some of its members are interstate carriers that are subject to ICC jurisdiction. It is questionable whether the status of the Association s membership is relevant to this case: the carrier members are not named in the complaint and the challenged conduct is that of the Association. However, since at least 50% of the Association members are wholly intrastate carriers, its derived jurisdictional status can just as easily be characterized as non-immune. In fact cases construing analogous exemptions listed in FTCA Section 5(a)(2) have held that membership by non-qualifying entities subjects an association to antitrust scrutiny. See, e. , Case Swayne Co. v. Sunkist Growers, Inc. 389 U. S. 384 (1967), rehearing denied 390 U.S. 930 (1968); Crosse Blackwell Co. v. FTC, 262 F.2d 600 (1959). An additional factor supporting Commission jurisdiction is the fact that the challenged activities lie outside the ICC's jurisdiction, even if engaged in by an interstate carrier. For example, were an ICCregulated common carrier to engage in activities unrelated to interstate transportation, such as real estate or manufacturing, which could not be regulated by the ICC, those other activities would not be exempt from FTC jurisdiction merely because they were undertaken by a common carrier subject (9) to the ICA. Intrastate ratemaking, the challenged activity in the instant case, is plainly outside the ICC' jurisdiction: the Interstate Commerce Act expressly "does not . . . authorize the (Interstate Commerce) Commission to prescribe or regulate a rate for intrastate transportation provided by a motor carrier." 49 U. C. 10521 (b)(2).

Thus, the nature of the Association, as distinguished from the status of some of its members, and the fact that the challenged conduct is beyond the review of the ICC, both support Federal Trade Commission jurisdiction over this matter.

1 It is importt to note the difference between activities which are not subject to rCCjursdction and activities which merely have not been reguated by the ICC. In PTC v. Miller 549 F.2d 452 (7th Cir. 1977) the court held that the Fr did not have the authority to investigate advertising for an ICC-reguated common carrier bUsincs. even though the advertising was not actively regulated by the ICC. While Milercol1tains some language that Buggest. indirectly that thestatUB of a common carrier may exempt aU of its activities from FTC scrutiny, that dictum is undercut bccaUge the Court expressly declined to decide whether "non-carrier activities of a common carrer" qualify for exemption from the FTC Act. 549 F.2d at 458. The conduct challenged here is plainly not asociated with the interstate business of a common carrer since it is wholly beyond the reach of the ICC. S The ICC' sjursdction over motor cariers is more limited than its jursdction over railroads, which extends to rates that afect intrastate commerce.Houston, E. & W. Tex Ry. Co. v. United States,234 U.S. 342 (1942) Opinion I02 F.

State Action Defense The Association s principal defense is the claim that its activities fall within the state action exception to the antitrust laws under Parker v. Brown 317 U.S. 341 (1943), and its progeny. ALJ N eedelman rejected the Association s defense, concluding, inter alia that the Commonwealth of Massachusetts had not expressed an intention to eliminate rate competition among movers and that neither Massachusetts nor the MDPU had required the Association and its members to engage in the activities challenged here. ID 22-46. For the reasons set forth below, we agree that the state action doctrine does not immunize the challenged activities. (10) The Supreme Court has issued a number of recent decisions concerning the state action doctrine. Rice v. Norman Williams Co. 102 Ct. 3294 (1982); Community Communications Co. v. City of Boulder 455 U. S. 40 (1982); California Retail Liquor Dealers v. Midcal Aluminum, Inc. 445 U. S. 97 (1980); New Motor Vehicle Board. v. Orrin W Fox Co. 439 U. S. 96 (1979); City of Lafayette v. Louisiana Power & Light Co. 435 U. S. 389 (1978); Bates v. State Bar of Arizona 433 U. 350 (1977); Cantor v. Detroit Edison Co. 428 U. S. 579 (1976); Goldfarb v. Virginia State Bar 421 U.S. 773 (1975). The fissiparous opinions these cases present a shifing emphasis on the operative elements of the state action doctrine, and total reconciliation among them is not immediately obvious.9 One key question concerns the interrelationship between the private action analysis of Cantor and Goldfarb and the standards oflater cases, typified by Midcal which deal with the doctrine as applied to anticompetitive conduct by public parties. Moreover, even if the analysis for private parties is shaped solely by the Cantor and Goldfarb precedents, those two cases may not conclusively establish that private action must always be compelled by the state as a prerequisite to application of the state action doctrine. Fortunately, to reach a decision in this case it is not necessary for us to resolve these issues, because in the situation here the activities ofthe Association clearly do not qualify for antitrust immunity under any of the current constructions of the state action doctrine. When reviewing the caselaw, the following key, undisputed facts in the instant case must be kept in mind: (1) the Association is a wholly Each Supreme Court decision has given rise to new commentaries chronicling the development of the doctrine and offering thoughts on how to harmonize its various precedentsr replace them altogether. See, e. Areeda and Turner, Antitrust Law Section 212 (1978); Sullivan Antitrust Law 731-40 (1977); Posner The Proper Relation. hip Between Stale Regulation and the Federal Antitrust Laws 49 N. L. Rev. 693 (1974); Kennedy, Lawyers, Lightbulbs and Raisin. : An analysis of the State Action Doctrine under the Antitrw;t Laws,74 NW. U. Rev. 31 (1979); Page Antitrust, Federalism, and the RegulatoryProcess: A Reconstruction and Critique uftheState Action Eremption after Midcal Aluminum 61 B.U-L- Rev. 1099 (1981); Arecda Antitrust immunity for "state oction " after Lafayette, 95 Harv. 1. Rev. 435 (1981); Easterbrook Antitrust and the Economics of Federalism XXVI Journal of Law and Economics, 23--0 (1983); Antitrust symposiwn:State Action " antitrust immunity- doctrine in search of definition 1982 BYU 1. Rev- 809-918 (1982). 1176 Opinion private organization; (2) no Massachusetts statute or regulation requires movers to formulate or fie a joint tariff, or to adopt uniform moving rates; (3) the record contains no evidence that the state (11) statutory scheme authorizes or contemplates joint formulation oftariffs or that joint tariffs are essential to effective functioning of the state regulatory scheme.

Our analysis starts with Goldfarb v. Virginia State Bar 421 U. 773 (1975), the first Supreme Court decision to reexamine the state action doctrine first enunciated in Parker v. Brown 317 U.S. 341 (1943). In Goldfarb the plaintiffsought both monetary and injunctive relief from the Fairfax County Bar Association (a private group) for fixing and adhering to minimum-fee schedules, and from the Virginia State Bar (described as a state agency by Virginia law) for encouraging such fee schedules by various means. It is not altogether clear whether the Court considered the Virginia State Bar to be a private party or a state agency, or what characteristics were deemed essential to either characterization. lO However, we need not attempt to clarify this issue in order to find an analogy to the matter before us: the second defendant in Goldfarb was undisputedly a private party, as is the Association here, and the rationale and holding of Goldfarb applied without distinction to both defendants in that case. 491 U.S. at 790-791. The Court stated that "the threshold inquiry in determining if an anticompetitive activity is state action of the type the Sherman Act was not meant to proscribe is whether the activity is required by the State acting as sovereign. Id. at 790)1 Since neither a Virginia statute nor a Virginia Supreme Court rule'2 required attorneys to adopt minimum-fee schedules, the Court concluded that the activity was not required by the state. Id. at 790-91. (12) The following year the Court again emphasized that a private party wishing to raise the state action shield must demonstrate that it acted under state compulsion. Cantor v. Detroit Edison Co. 428 U.S. 579 (1976). Cantor is the only Supreme Court decision applying the state action doctrine in a wholly private context, and the case most similar to this one on the facts. Accordingly, Cantor and Goldfarb must be read together for guidance in this matter.

In Cantor a private electric utility (the sole supplier of electricity '0 The State Bar was found, without elucidation, to be a state agency only "for so!",, limited purpo " which were not dC!1ribed ld. at 791. Three yearn later the nature of the State Blic was sui an issue among the JIL'itices The plurality opinion inLafayette lI. Louisiana Power and Light Co., supra describes Goldfarb as involving the actions of a state agency, the Virginia State Bar, and not exclusively the actions ofpriviJl. persons- 435 U.S. at 411-412 ll. 41. In contrast, the dissenting opinion of Justice Stewart argues thatGoldfarb should l. treated as involving only private parties because the actions of the state bar were essentially those ofa private group. 435 U.S. at 431-32.

11 The Court OIlso stated the test to be whether the anticompetitive conduct is "compelled (as opposed to prompted"J by direction of the State acting as sovereign. Id. at 79l. 12 The Virginia legislature had authorized the state Supreme Cour to regulate the practice oflaw.ld. at 790 18.

Opinion 102 F.

in the region) furnished light bulbs to its residential customers without separate charge, under a longstanding program approved by the Michigan Public Service Commission as part of the utilty s rate structure. Once the tariff was approved, the utility was required by law to adhere to the program unti the Commission approved a change. A retail seller oflight bulbs sued the utiliy, but not the Public Service Commission, seeking a halt to the replacement bulb program as well as damages. The plaintiff alleged that the utility was improperly using its monopoly power in the distribution of electricity to restrain competition in the sale oflight bulbs. The district court granted summary judgment in favor ofthe utility, holding that the Public Service Commission s approval of the light bulb program rendered the practice exempt under the state action doctrine. The Court of Appeals affrmed.

The Supreme Court reversed. A majority of the Court!3 explicitly stated that the issue was whether "private conduct required by state law is exempt from the Sherman Act." 428 U.S. at 592. The court went on to explore two different reasons which might support such a rule. The first was the state compulsion situation explored in Goldfarb: a private citizen has done nothing more than obey the command of his state sovereign, it would be unjust to conclude that he has thereby offended federal law." 428 U.S. at 592. The meaning of state command was negatively defined: it could not be merely state authorization approval, encouragement or participation in the restrictive private conduct. fd. at 592-93. Goldfarb was quoted directly for the proposition that "anticompetitive activities must be compelled by direction ofthe State acting as a sovereign" in order to demonstrate state action for Sherman Act purposes. fd. n. 28. (13) After considering the actual operation of the replacement bulb program, a majority ofthe Court" determined that the utility was not acting under state command. The utilty s independence from the state was highlighted by the fact that it, and not the state, initiated the light bulb program. Although the Public Service Commission approved the program, it did so only at the request of the utility, and had not" 'put its own weight on the side of the proposed practice by ordering it.' " fd. at 578, n. 31 , quoting Jackson v. Metropolitan Edison Co. 419 U.s. 345, 357 (1974). The fact that the rate structure became mandatory until a change was approved was simply a characteristic of the general statutory procedure for ratemaking. In other words, all tariffs were made binding until a new one was approved; the state had IJ Ju tice Stevens' plurality opinion, in which Ju tices Brel'an, White and Marshall joined, was also joined by Chief Justice Burger as to Part III of the opinion, which deals with the application orthe state action doctrine to private conduct.

14 The balance of power between Detroit Edison Company and the Michigan Public Service Commission was assssed in Pam I and III of the Opinion, both joined by Chief Justice Burger. I176 Opinion not taken the stand that the utility s light bulb program, as such should be continued: "Respondent's participation in the decision is suffciently significant to require that its conduct implementing the decision. . . conform to applicable federal law. Id. at 594. In our case the State of Massachusetts has in no way compelled the challenged conduct: the collective setting of rates. The pertinent MDPU regulation permits a carrier to adopt a tariff previously fied by another carrier; it does not require or even authorize carriers to agree upon uniform rates, as members ofthe Association have done. As Cantor shows, the fact that a tariff once fied can only be changed with approval of the state agency does not demonstrate state compulsion. In Cantor the tariff itself incorporated the challenged lightbulb program. The Court nevertheless concluded that: neither Michigan s approval of the tariff' fied by respondent, nor the fact that the lamp-xchange program may not be terminated until a new tarifI'is fied, is a suffcient basis for implying an exemption from the federal antitrust laws for that program. 428 S. at 598.

Here, however, the tariff is neutral on its face; the collective ratemaking practices at issue antedate the actual tariff which the state agency approves. Therefore the imputation of state (14) command from the state s fiing procedures is even more tenuous than in Cantor.!' Thus, an express state command to engage in the challenged conduct arguably represents a prerequisite for applying the state action doctrine to private parties. Respondent has failed to get over that threshold issue in its defense, and our analysis therefore arguably need go no further. However, the question may not be completely closed because only a plurality ofthe Cantorcourt specifically characterized the state command issue as a threshold question, relying upon Goldfarb. 428 U.S. at 600. This plurality is strengthened by both the concurring opinion of Justice Blackmun (ld. at 609) and the dissenting opinion of Justice Stewart (in which Justices Powell and Rehnquist joined) (ld. at 623- , 637), which construe Goldfarb as limiting application of the doctrine to situations where private action is re- 15 The situation is analogous to that presented to the Supreme CourtGeorgiain u. Pennslvania R. ., 324 C. 439 (1945), a suit brought by the State of Georgia charging that a group of railroad carriers had engaged in a price-fixing conspiracy to fix rates for transportation to and from Georgia. The carriers argued inter alia that the antitrust laws could not he applied to the conduct of the carriers because the rates in question had been fled with and approved by the ICC as reasonahle and non-discriminatory. The Supreme Court rejected that argument holding that there was not such repugnancy between the regulatory scheme of the Interstate Commerce Act and the application of the antitrust laws as to repeal the antitru.Gt laws by implication (324 U,S, at 456-57) and that the allegation of a conspiracy to fix rates stated a cause of action even though the ICC had approved the rates and found them to be reasonable. 324 U.S, at 458-462. The court noted that a "zone of reasonableness exists between maxima and minima" in which the carrier is ordinarily free to select its own ratea, and that unlawful agreements among carriers might raioo rates to the maxima. 324 U.S. at 460-61. Similarly, within limits set by the MDl'U in accordance with Chapter 159B, carriers are free to select their own rates; the agreement among competitors challenged here eliminates or reduces the zone of competition envisioned by the Masschusetts regulatory scheme ), , Opinion 102 F.

quired, not merely authorized, by state law.!6 Nevertheless, (15) the Cantor majority, though referencing Goldfarb for the substantive compulsion standard (ld. at 592-593, n. 28), in addition seems to suggest that the state action exemption could be invoked to shield private conduct when that conduct is necessary-but only to the degree to which it is actually necessary-to make the state regulatory system work. Id. at 596-97. In considering this suggestion, the court expressly rejected the argument that the antitrust laws should be automatically suspended in areas of the economy pervasively regulated by state agencies, and indicated the outer boundaries of any "implied exemption" from the antitrust laws by reason of state regulation as follows: The mere possibility of conflict between state regulatory policy and federal antitrust policy is an insuffcient basis for applying an exemption from the federal antitrust laws. Congress could hardly have intended state regulatory agencies to have broader power than federal agencies to exempt private conduct from the antitrust laws. Therefore assuming that there are situations in which the existence of state regulation should give rise to an implied exemption, the standards for ascertaining the existence and scope of such an exemption surely must be at least as severe as those applied to federal regulatory legislation.

The Court has consistently refused to find that regulations give rise to an implied exemption without first determining that exemption was necessary in order to make the regulatory Act work and even then only to the minimum extent necessary." 428 S. at 596-597 (footnotes and citations omitted). (16) The Court rejected the utility s exemption claim because application of the antitrust laws to outlaw the utility s light bulb program clearly would not impair the effective functioning of Michigan s regulation of electric utilities. Id. at 598. No Michigan statute authorized the regulation ofthe sale oflight bulbs. Nor did other utilities regulated by the Public Service Commission follow the practice of providing lightbulbs to their customers. Id. at 584-585. The Court inferred that the state s policy was neutral on the question whether a utility should or should not have such a program. Id. at 584-585. Similarly, in our case nothing in the record suggests that the regulation of motor carriers by Massachusetts will be impaired if motor carriers set their rates individually, rather than by agreement among 16 Accord. U.S. u. Southern Motor Ca.rriers Rate Conf Inc., etal. 1983-1 Trade Cas. 320 (5their., 1983); Litton Systems, Inc. I). Southwestern Bell Tel. Co. 539 F.2d 418, 422-24 (5th Cir. 1976);United Stotes U. Title Ins. Rating Bur. of Arizono,517 ,YSupp. 1053, 1059 (D. Ariz. 1981).But see Turf Paradise, Inc. U. Arizona Downs 670 F. 813 823 n.8 (9th Gir. cert. denied 102 S.Ct. 2208 (1982). 17 We note that the Fifth Cirmit has recently held that state compulsion is a threshold requirement for private defendants agserting the state action shield.U.S. U. Southern Motor Carriers Rate Can! Inc., et oZ., 1983-1 Trade Cas. TI65320 (5th Cir. 1983) at 69 891- petition for cert. filed No. 82-1922 (May 27, 1983), 602 CCH Trade 'Reg. Reports 021 (June 27, 1983). The Massachusetts statulory scheme involvedin the instant proceeding provides far less basis for state action immunity than do the state statutory schemes involvedSouthernin Motor Carriers. See 467 F.Supp. at 473 478; 672 F.2d at 475-476, 484-85. 1176 Opinion competing carriers. That neither the Massachusetts legislature nor the MDPU specifically requires collective rate-making strongly indicates that collective rate-making is not an essential part, or indeed any part, of the Massachusetts regulatory scheme. On the contrary, Massachusetts law and regulation clearly permits motor carriers individually to formulate rates for inclusion in their tariffs, and presumably some motor carriers (at least those not members of the Association) do so. Moreover, there is nothing in the record that indicates that Massachusetts has otherwise expressed a judgment that concerted agreement on motor carrier rates or concerted efforts to increase rates and make them more nearly uniform are essential to the State s regulation of motor carriers, or even that they are desirable activities.1 Massachusetts has not asserted any State interest in immunizing the conduct challenged here.

There is no reason to believe that the regulation of motor carriers wil be interfered with ifthe Association is required to discontinue the challenged activities. Individual motor carriers wil decide what rates they wish to include in tariffs they fie with the MDPU. They wil remain free to participate in the tariff fied by another motor carrier but may not agree on rates in advance with their competitors. They may even use the services of a tariff publishing agent, as long as the rates fied (17) are formulated unilaterally. The MDPU wil continue to have the authority to review rates contained in tariffs and to suspend or disallow rates the MDPU finds unreasonable or otherwise not in conformity with Massachusetts law.

For our purposes Cantor and Goldfarb are the key precedents, since the calvalcade of subsequent state action opinions has not included private parties as defendants, and, as we noted before, respondent is clearly an association of private parties and the challenged conduct is clearly private conduct. The Court has twice indicated that a defendant' s status as a public or a private entity calls for different approaches under the state action doctrine.1 Assuming, however, that the standards evolved in cases involving public defendants were applied to this matter, the result would be the same because the Associa- In 1948, Congress passed the Reed.Buliwinkle Act, granting antitrst immunity for collective ratemaking by interstate carriers aubject to the approval and supervision of the ICe. 49 US.C. 10706. As noted above, this immunty was subject to strict limitations and required express ICe approval, and did not applyintrastateto rates. Significantly, Congress has acted to eliminate the limited antitrust immunty for interstate rate bureaus. Under 49 US.C. 10706(b)(3)(D), as amended by the Motor Carrier Act of 1980, antitrst immunity wil not be available for interstate agreements that "provide for the discussion of or voting upon single-line rates on or a.ftr January 1984.

19 The Cour stated inBa.tel;(in a portion of the plurality opinion joined by al of the Justices) that " Cantor:would have been an entirely different case if the claim had been directed against a public offcial or public agency, rather than again!\t a private pa.rty. Here, the appellants' claims are against the State. " 433 U.S. at 361. Similarly, in Lafayette both the plurality opinion (435 U.s. at 410-11nad) and the dissenting opinion of Justice Stewar (435 S. at 431- 432) distingushed Cantor as having involved "purely private paries , Opinion 102 F.

tion s conduct could not meet the requirements of the state action doctrine articulated in those cases.

After effectively narrowing the state action immunity of private parties in Goldfarb and Cantor the Court's attention turned to public offcials and agencies in a series of decisions starting with Bates v. State Bar of Arizona, 433 U.S. 350 (1977). Such defendants, in order to raise the state action shield, must show that their actions were taken under a delegation of state sovereign power. The first requirement for such a showing is proofthat the legislature or highest court of the state has laid down a clear declaration of policy on the challenged action. In Bates a disciplinary rule which restricted advertising by attorneys did not violate the Sherman Act because it was incorporated in the Rules of the Supreme Court of Arizona and subject to pointed reexamination by that court in enforcement proceedings. The U.s. Supreme Court stated we deem it significant that the state policy is so clearly and affrmatively expressed and that the state supervision is so active. " 433 U.S. at 362. Later cases built on this language, establishing that the challenged restraint must be clearly articulated and affrmatively expressed as state policy" in order for respondent' s conduct to be considered state action. City of New Motor Vehicle Board, supra at 109;Lafayette, supra at 410; supra at 51. The test wasMidcal, supra, at 105; City of Boulder, satisfied, as we saw in Bates by a specific rule of a state (18) Supreme Court. In New Motor Vehicle Board it was met by a detailed system of regulation laid out by the state legislature, which, among other things, directed the state New Motor Vehicle Board to consider effects upon competition of every decision to let a new automobile franchisee enter a geographic market already occupied by a franchisee of the same auto manufacturer. In Midcalthe test was met by a forthrightly stated and clear legislative purpose to allow resale price maintenance embodied in the California Business and Professions Code. The test has not been met where municipalities, acting "on their own recognizances, or under only the general grant of self-government, undertake restraints of trade. City of Lafayette, supra; City of Boulder supra.

Comparing these cases with the one before us, it is clear that collective rate-setting activities ofthe Association do not follow any "clearly articulated and affrmatively expressed" declaration of state policy. Neither the MDPU, in its program for rate fiing, nor the State of Massachusetts, in its establishment ofthe MDPU, has expressed a policy that motor carrier rates should be jointly formulated. Moreover, it is possible that, for a private defendant, compulsion is stil a factor which must be present before the question of a clearly articulated and affrmatively expressed state policy can be resolved. At 1I76 Opinion present there is a division in the Circuit Courts as to the need for establishing compulsion as a required element when a claim of state action is raised by a private party.20 Again, however, we need not attempt to resolve this question since it is clear that the collective rate-setting activities of the Association do not follow a "clearly articulated and affrmatively expressed" declaration of state policy with or without compulsion.

Furthermore, in order to use the state action doctrine, public defendants must establish that the State actively supervises the conduct at issue. Bates, City of Lafayette and New Motor Vehicle Board all noted the presence or absence of continuing state supervision of the competitively disruptive (19) activity which the state had originally authorized. Midcal raised this concern to the level of a requirement for antitrust immunity, coequal with the clear articulation of state policy standard:

(Previous) decisions establish two standards for- antitrust immunity under Parker v. Brown. First, the challenged restraint must be "one clearly articulated and affrmatively expressed as state policy; second, the policy must be "actively supervised" by the Stale itself. 455 U.S. at 105.

Although the MDPU is empowered to review the reasonableness of charges contained in tariffs fied by motor carriers, the MDPU does not "actively supervise" rates that fall within the "zone of reasonableness (that) exists between maxima and minima (Pennsylvania R. Co. supra 324 U.S. at 460-1) in which motor carriers are free to set prices in competition with one another. Within that zone of reasonableness, the MDPU is a passive recipient of the charges set by purely private rate-making, similar to the role ofthe state in Midcal and the utility commission in Cantor. See also Miller v. Oregon Liquor Control Commission 1982 CCH Trade Cas. n64862 (688 F.2d 1222) (9th Cir. 1982) at 72302-D3. Accordingly, the challenged actions of the Association clearly meet neither the ' active supervision' nor the 'clearly articulated and affrmatively expressed state policy' requirements of the Midcal standard.

20 See note 16 su.pra.

I The Assciation notes that from time to time varioll MDPU offcials have condoned and encouraged the Association to formulate and submit joint tariffs, and have discussd changes in joint t.riff with Asociation offcials. See ID at 10, 21. We do not understand the Assciation to contend that the MDPU ever ordered or required the Assciation to engage in the concertd rate.fiing activities challenged here, alld ill any case there is no evidence that this was ever done. In 1939, the A!lociation petitioned the MDPU to prescribe the Assciation s tarjffas the minimum rate for all carriers hut Jater withdrew its petition. RX 51A, RX 58. 22 In the subsequent case of City of Boulder the Supreme Cour, having found no dearly articulated and affnnatively expressd state pohcy, expre!!y declined toanswer the question of whether the active state supervision test "must or could" be met by the challenged municipal ordinance. Thus, whether active state supervision is an element of state action immunity has become an open question, at least for Jocal governments. Again, we do not need to answer this question to decide our case; for whether or not the standard is relevant, it has not been m,t . .

Opinion 102 F.

Noerr-Pennington Defense The Association also argues that its activities are protected from antitrust attack under the "Noerr-Pennington" doctrine.23 That doctrine establishes that concerted private efforts to persuade governmental authorities to take action to (20) restrain competition are not subject to the Sherman Act, absent circumstances where such concerted petitioning is essentially a "sham" or an abuse of process. The Association argues that the Noerr-Penningtondoctrine protects the Association s action in presenting ajoint tariff to the MDPU, since that action is merely an effort to persuade the MDPU to approve the tariff and permit the members of the Association to utiize the rates contained in the tariff. The Association further argues that the activities of the Association in formulating the rates to be included in the tariff by agreement among competiting motor carriers also must be protected, because the right ofa group to petition a government agency includes the right of a group to formulate the position the group wil present to the agency.

We do not think that the protection of the Noerr-Pennington doctrine extends to the circumstances presented here. We are not asked to consider the legitimacy of joint activity of motor carriers attempting to persuade the MDPU to require concerted rate-making. Rather the challenged activities constitute private collective rate-making by the Association and its members. In Noerr the Court distinguished collective lobbying activities from the kinds of combinations normally condemned by the antitrust laws describing the latter as "combinations ordinarily characterized by an express or implied agreement or understanding that the participants will jointly give up their trade freedom. through the use of such devices as price-fixing agreements boycotts, market-division agreements, and other similar arrangements." 365 U.S. at 136 (emphasis added). More recently, the Court explained that the First Amendment right to petition the government cannot be used to insulate that type of demonstrably anticompetitive conduct from the antitrust laws. In California Motor Transport the Supreme Court concluded:

It is well settled that First Amendment rights are not immunized from regulation when they are used as an integral part of conduct which violates a valid statute. . . First Amendment rights may not be used as the means or the pretext for achieving "substantive evils (see NAACP v. Button 371 U.S. 415, 444) which the legislature has the power to control. Certainly the constitutionality of the antitrust laws is not open to debate. . . .

23 The "Noerr-Penningtn" doctrine is based on three Supreme Court cases:Eastern R. Prcsicknts Con( u. Noerr Motor Freight, Inc. 365 U.S. 127 (1961);United Mine Workers u. Pennington 381 U.S. 657 (1965); andCalifornia Motar Transport Co. u. Trucking, Unlimited 404 U.S. 508 (1971). . . . . . . . . . 1176 Opinion California Motor Transport u. Trucking Unlimited 404 U.S. 508, 514-15 (1972), We drew upon these instructions in our recent decision in Michigan State Medical Society, Docket No. 9129 (February 17, 1983) (101 F. 19IJ In that case a professional association of directly competing physicians informed the state legislature that its members had resolved not to participate in the state Medicaid (21) program unless reimbursement levels were raised. (Slip Op. 14-19). (101 F. C. at 275-279) We found that such action went beyond the process of influencing legislative or administrative decisions and encompassed efforts that interfered directly with the competitive process. Accordingly, Noerr-Pennington protection was not appropriate. (Slip Op. at 41-44). (101 F. C. at 297-300) The restraint on competition in the present case-actual agreements to charge specific rates-is even more direct than the threatened refusal to deal in Michigan State Medical Society and even more remotely linked to influencing state action. The boycott in Michigan State took place in the context of ongoing and otherwise legitimate discussions between the association and state offcials on ways to contain rising Medicaid costs. By contrast, in this case rates collectively formulated by Association members have routinely been presented to the MDPU for approval over the last forty-five years and are not collateral to any issues being considered by the state legislature. The language of the Second Circuit in Litton Systems, Inc. u. AT&T Co., 1982-83 CCH Trade Cas. TI65 194 (2d Cir. 1983) applies these principles within the specific context of tariff fiings:

AT&T erroneously assumes that a mere incident of regulation-the tariff fiing requirement-is tantamount to a request for governmental action akin to the conduct held protected in Noerr and Pennington. The decision to impose and maintain the interface tariff was made in the AT&T boardroom, not at the FCC. The fact that the FCC might ultimately set aside a tariff filing does not transform AT&T's independent decisions as to how it will conduct its business into a "request" for governmental action or an "expression" of political opinion. Similarly, the FCC' s failure to strike down a tariff at the time of its fiing does not make the conduct lawful. 1982-83 Trade Cas. D65 I94 at 71 777.

Moreover, the concerted rate-making activities of the Association and its members are not necessary to the exercise ofthe carriers' right to petition the MDPU. Motor carriers can petition the MDPU to accept higher or lower tariff rates without first agreeing with their competitors on rates. See Commerce Tankers Corp. u. National Maritime U of America 553 F.2d 793 , 800 (2d Circ, cert. denied 434 U. 923 (1977) (fiing court action to enforce a group boycott does not immunize the boycott); George R. Whitten, Inc. u. Paddock Pool Builders, Inc. 424 F.2d 25 (1st Cir. 1970) (bid-rigging not immunized merely Opinion 102 F.

because presented to government agency). See also Motor Carriers Traffic Ass, Inc. v. United States 559 F.2d 1251, 1255 (4th Cir. 1977), cert. denied 435 U.s. 1006 (1978) (ICC may condition approval of proposed rate agreement under Reed-Bullwinkle Act (22) upon rate bureau agreement not to petition the ICC to protest independent rate-setting by the bureau s members).

Furthermore, the Association s argument is inconsistent with the result in Georgia v. Pennsylvania R. Co., supra. The Supreme Court in that case emphasized that the Interstate Commerce Act (like the Massachusetts regulatory scheme here) "was designed to preserve private initiative in rate-making as indicated by the duty of each common carrier to initiate its own rates" (324 U.S. at 459),24 and that it was immaterial that the rates created by the price-fixing conspiracy would be reviewed by the ICC (324 U.S. at 460-61). Although that case was decided prior to Noerr the Court has never suggested that Pennsylvania R. Co. is no longer viable, and has continued to cite it with approval!.

The Noerr-Pennington doctrine affords protection to certain joint efforts by private parties to influence governmental action, even where the motive of the private parties is to obtain an anticompetitive result. The anticompetitive conduct challenged here, however, cannot be characterized as a joint effort by the Association and its members to induce the MDPU to require collective ratemaking; the conduct challenged is the concerted behavior ofthe Association and its members in agreeing on the rates that they would include in their tariff and would charge the public. Such conduct, which is neither an effort to influence government action nor required in order to make such an effort, is not encompassed within the doctrine. Substantive Violation The Association does not appear to dispute the ALJ's conclusion that the challenged activities violate the antitrust laws, unless they are exempt therefrom by reason of the "state action " or Noerr-Pennington doctrines. See ID 49-51. In any event, it is clear beyond cavil that agreements among competitors to set price levels or price ranges are per se illegal under the antitrust laws. United States v. Socony- Vacuum Oil Co. 310 U.S. 150, 222 (I940); see also Arizona v. Maricopa County Med. Soc. 457 U.S. 332, 102 S.Ct. 2466, 73 L. Ed. 2d 48 (1982); Catalano, Inc. v. Target Sales, Inc. 446 U.S. 643, 647 (1980) (23) (per curiam). The Association has developed joint tariffs for its members 2' Compare Mass. Gen. Law Ch. 1598, , requiring each motor vehicle commod carrer to "establish, obaerve and enforce just and reasonable rates " and to publish and fie taffs contaning those rates. See ID 25. v; E.g., TVA v. llu137 US. 153, 189-190 (1978);Gordon u. New York Stock Exchollge 422 UB. 659, 684 (1975); Morton u. Mancari 417 U.S. 535, 550 (1974); Ricci v. Chicago Merchontile Exchange.409 U.S. 289, 300 n.12 (1973); Hawaii II. Standard Oil Co. 405 U.S. 251, 259-260 (1972). II76 Opinion which the members have both formally adopted by vote at annual meetings and adhered to with almost 100 percent participation. In addition, the Association has conducted meetings where members agree to specific rate increases, and has in a variety of ways exhorted members to adopt uniform rates and rate increases. Plainly, the ratemaking activities of the Association are per se unlawful under the antitrust laws. Georgia v. Pennsylvania R. Co., supra; Atchison, Topeka Santa Fe R. Co. v. Aircoach Transport Ass, Inc. 253 F.2d 877 886 (D.C. Cir. 1958), cert. denied 361 U.S. 930 (1960). Remedy The AU issued an order which inter alia prevents the Association from continuing to engage in its collective rate-making activities and its efforts to induce higher and more uniform rates. The order also requires the Association to cancel all tariffs currently in effect, to amend its by-laws to require compliance with the order as a condition of membership in the Association, and to notify its members of entry of the order. We have modified this order in a number of respects. Tbe prohibition against collective ratemaking has been expanded somewhat. In addition to provisions directly banning collusive rate formulation, we have added provisions designed to prohibit practices which although not in themselves unlawful, could be used to facilitate price fixing. For example, Paragraph II.4. prohibits publication of an informational bulletin on rates. Since fied rates are a matter of public record, their dissemination is not ilegal. But, in the past, such rate bulletins from the Association have been used to exhort members to match the published rates. Historically, members have perceived such bulletins as directives for change rather than as neutral information, and it is likely that that perception would attach to any future rate bulletins appearing under the Association s letterhead. Similarly, Paragraph II.7 prohibits arrangements whereby the Association makes automatic changes in the rates on fie for any carrier. Given nearly half a century of joint tariff filing in Massachusetts, a certain amount of Hfencing in" is necessary to break the carriers habit offollowing the Association s lead on rates to be fied. Of course the order does not prevent the Association from acting as a tariff publishing agent for the unilaterally-developed rates of individual carriers.

The Association did not raise any issue concerning the AU' s order in its identification of "Questions Intended to be Urged Upon this Appeal" (Appeal Briefat 7). In its Reply Brief on this appeal, however the Association noted (at p. 6) that it had proposed to the AU that the Association be permitted to circulate among its members a "tariff format " into which individual members could insert their own rates. Opinion 102 FTC.

The Association stated (24) that the MDPU supported this proposal and that the MDPU would so indicate in a letter to be submitted to the Commission prior to oral argument of the appeal. As of the date of this Order and Opinion, the Commission had not received any communication from the MDPU, directly or indirectly, concerning support ofthe Association s proposal. Under these circumstances, we are not persuaded on this record that allowing the Association to continue to circulate tariffs among its membership would be so beneficial as to outweigh the risk that such tariffs migbt be utilized as a vehicle whereby competitors might agree among themselves as to various terms and conditions affecting the charges ultimately borne by the consumer.26 Therefore, we have deleted from our order the ALJ' s proviso allowing the Association to prepare and circulate a tariff format among its members. Of course the Association remains free to provide assistance in formulating tariffs to members on an individual basis; however, the Association must take care not to pass on non-public information concerning competitors.27 We have also changed the order to require five annual compliance reports after the initial report, instead of the single compliance report ordered by the ALJ. (25) APPENDIX The relevant portions of Ch. 15gB are Sections 1, 6, and 6A: 1. Policy It is hereby declared to be the policy urthe commonwealth to regulate transportation of property by motor carriers upon its ways insuch manner as to recognize and preserve the inherent advantages of such transportation, and to foster sound economic conditions in such transportation and among carriers engaged therein in the public interest; and in connection therewith to: (1) promote adequate, economical and effcient service by motor carriers, and reasonable charges therefor, without unjust discriminations undue preferences or advantages . or unfair or destructive competitive practices, (2) improve the relations between, and co-ordinate transportation by and regulation of motor carriers and other carriers, (3) develop and preserve a highway transportation system properly adapted to the needs of the commerce of the commonwealth. and (4) promote safety upon its ways in the interests of its citizens. 6. Rates and charges; tariffs; rules and regulations Every common carrier by motor vehicle shall publish and fie with the department 26 The final judgment rendered by tbe District Court inSouthern Motor Carriers permits the defendant rate bureaus to fie tariffs independently arrived at by individual carrien; and to issue tariffs in which such independent rates are published- We do not understand that the rate bureaus are authorized to circulate proposed tariffs in the manner proposed by the Association here. 21 As the Ar noted, the record establishes that respondent often orchestrated unifonn rates by first obtaining a COlIllnitment to a sper.fic price increase from one member which was then used to persuade others. (ID 55-56) ch a "wheel and spoke" conspiracy is prohibited under this order. MASS. FURNITURE AND PIANO MOVERS ASSOC., INC. 1227 1176 Opinion and keep open for public inspection tariffs containing all the rates and charges for transportation of property and all services in connection therewith between points on its own routes, and between points on its own routes and points on the routes of any other such carrier or on the route of any common carrier by railroad, express or water when a through route and joint rate shall have been established. Such rates and charges shall be stated in lawful money of the United States. The department may reject any tariff fied with it which is not consistent with this section and with its orders, rules and regulations under this chapter. Every such common carrier shall establish, observe and enforce just and reasonable rates, charges and classifications and rea-sonable regulations and practices relating thereto, which shall become effective on a date fixed by such carrier, which shall be at least thirty days after the fiing of the tariff containing the same, unless suspended by the department prior to its effective date upon complaint of any person, organization or body politic, or by the department on its own motion; provided, that a rate may be established to become effective within said thirty days in order to meet the then existing rate of any competing common carrier, in which case it may become effective upon the effective date of the rate of such competing common carrier or at any time thereaftr if established thereafter, upon the fiing of a tariff or supplement thereto consistent with such reasonable rules and regulations as may be prescribed by the department.

The department may establish from time to time such reasonable rules and regulations as it may deem necessary pertaining to the form of tariff schedules, the time and manner of filing thereof, the suspension afrates before the same become effective, and hearings upon the validity of any fied or existing rate. The department, in its discretion and for good cause shown, may allow publication of rates or of changes therein, upon notice less than that herein specified, or may modify the requirements of this section with respect to posting and filing of tariffs either in particular instances or by general order applicable to special or peculiar circumstances or conditions.

The department, upon complaint of any common carrier by motor vehicle or of any other person, or upon its own motion, after hearing, may allow or disallow any fied or existing rates and may alter or prescribe the rates of common carriers in connection with the transportation of any or all classes of property to any and all points within the commonwealth and any service connected therewith, in accordance with the legal standards provided in this chapter. Whenever, upon complaint or in an investigation on its own initiative, the department, after hearing, shall be of the opinion that any rate or charge demanded, charged or collected by any common carrier by motor vehicle or any classification, rule, regulation or practice whatsoever of such carrier affecting such rate, charge or the value of the service thereunder, is or will be unjust or prejudicial, it shall determine and prescribe the lawful rate of charge, Or the lawful classification, rule, regulation or practice thereafter to be made effective. The department shall annually establish reasonable maximum and minimum rates or charges consistent with industry and economic conditions and consistent with the declaration of policy contained in section one.

In the exercise of the power to prescribe just and reasonable rates for the transportation of property by common carriers by motor vehicle and to disallow rates fied by any such carrier, the department shall give due consideration, among other factors, to, the inherent advantages of transportation by such carrier, to the effect of any rates under consideration upon the movement oftraftcby such carriers, to the need in the public interest of adequate and effcient transportation service by such carriers, to the cost of service and to the need of revenues suffcient to enable such carriers under honest economical and effcient management to provide such service. No common carrier by motor vehicle, unless otherwise provided by this chapter, shall Final Order I02 F. engage in the transportation of property upon any way, unless the rates and charges upon which the same is transportd by said carrier shall have been fied and published in accordance with this chapter.

GA. Excessive rates; refunds; rebates; separate payment of owner-operators of leased equipment for servces as employees of prime contractors to qualify for welfare funds No common carrier by motor vehicle shall charge, demand, collect or receive a diferent compensation for transportation or for any service in connection therewith between the points enumerated in such tariffs than the rates and charges speifed in the tariffs in effect at the time; and no such carrier shall refund or remit in any manner or by any device, directly or indirectly, or through any agent or broker or otherwise any portion of the rates or charges so specified, or extend to any person any privilege or facility for transportation except such as are specified in its tariffs. FINAL ORDER This matter, having been heard by the Commission upon the appeal of respondent from the Initial Decision, and upon briefs and oral argument thereof and opposition thereto, and the Commission for the reasons stated in the accompanying Opinion having determined to deny the appeal of respondent Massachusetts Furniture and Piano Movers Association, Inc.

It is ordered That the Initial Decision of the administrative law judge be adopted as Findings of Fact and Conclusions of Law except to the extent inconsistent with the accompanying Opinion. Other Findings of Fact and Conclusions of Law of the Commission are contained in the accompanying Opinion.

It is further ordered That the following Order to Cease and Desist is hereby entered.

It is ordered That the following definitions shall apply in this order: Carrier means a common carrier of property by motor vehicle. Intrastate transportation means the pickup or receipt, transportation and delivery of property for compensation within the Commonwealth of Massachusetts by a carrier authorized by the Massachusetts Department of Public Utilities to engage therein. (2) Member means any carrier or other person which pays dues or belongs to the Massachusetts Furniture and Piano Movers Association, Inc., or any successor corporation.

Tariff means the publication stating the rates of a carrier for the ;transportation of property within the Commonwealth of Massachu- :etts, excluding general rules and regulations. .._ MASS. FURNITURE AND PIANO Mv, Il76 Final Order Rate means a charge, payment or price fixed according to a ratio scale or standard for direct or indirect transportation service. Collective Rates means any rate or charge established under any contract, agreement, understanding, plan, program, combination or conspiracy between two or more competing carriers, or between any carrier and respondent.

It is further ordered That Massachusetts Furniture and Piano Movers Association, Inc., a corporation, its successors and assigns, and its offcers, agents, representatives, directors and employees directly or through any corporation, subsidiary, division or other device shall forthwith cease and desist from:

1. Entering into, adhering to or maintaining, directly or indirectly, any contract, agreement, understanding, plan, program, combination or conspiracy to fix, stabilize, raise, maintain or otherwise interfere or tamper with the rates charged by carriers that compete for the intrastate transportation of property or related services, goods or equipment.

2. Knowingly preparing, developing, disseminating or filing a proposed or existing tariff provision which contains collective rates for the intrastate transportation of property or other related services goods or equipment.

3. Providing information to any carrier about rate changes ordered by any other carrier employing the publishing services ofthe respondent prior to the time at which such rate change becomes a matter of public record.

4. Inviting, coordinating or providing a forum for, including publication of an informational bulletin, any discussion or agreement be. tween or among competing carriers concerning intrastate rate: charged or proposed to be (3) charged by carriers for the intrastat transportation of property or related services, goods or equipment 5. Suggesting, urging, encouraging, persuading or influencing j any way members to charge, fie or adhere to any existing or propos. tariff provision which affects rates, or otherwise to charge or refra from charging any particular price for any services rendered or gor or equipment provided.

6. Maintaining any rate or tariff committee or other entity to c sider, pass upon or discuss intrastate rates or rate proposals. 7. Agreeing with any carrier to institute automatic changes to r: on fie for said carrier.

r "-lJ"RAL TRADE Commission DECISIONS Final Order 102 F.

It is further ordered, That Massachusetts Furniture and Piano Movers Association, Inc. shall, within six (6) months after service upon it of this order:

1. Cancel all tariffs and any supplements thereto on fie with the Massachusetts Department of Public Utilities that establish rates for transportation of property or related services, goods or equipment by common carriers in Massachusetts and take such action as may be necessary to effectuate cancellation and withdrawal. 2. Terminate all previously executed powers of attorney and rate and tariff service agreements, between it and any carrier utilzing its services, authorizing the publication and/or fiing of intrastate collective rates within the Commonwealth of Massachusetts. 3. Cancel those provisions of its articles of incorporation, by-laws and procedures and every other rule, opinion, resolution, contract or statement of policy that has the purpose or effect of permitting, announcing, stating, explaining or agreeing to any business practice enjoined by the terms of this Final Order. (4) 4. Amend its by-laws to require members of the Association to observe the provisions of the Order as a condition of membership in the association.

It is further ordered, That respondent shall within thirty (30) days Iter service upon it ofthis Order, mail or deliver a copy of this Order ader cover of the letter attached hereto as "Appendix " to each lrrent member of respondent, and for a period of three (3) years from e date of service of this Order, to each new member within ten (10) ys of each such member s acceptance by respondent. is further ordered That respondent notify the Commission at t thirty (30) days prior to any proposed change in the respondent as dissolution, assignment or sale resulting in the emergence of cessor corporation, or any other proposed change in the corporawhich may affect compliance obligations arising out ofthe Order. .

u....

II76 Final Order It is further ordered That respondent shall fie a written report within six (6) months ofthe date of service of this Order, and annually on the anniversary date ofthe original report for each of the five years thereafter, and at such other times as the Commission may require by written notice to respondent, setting forth in detail the manner and form in which it has complied with this Order. APPENDIX (Letterhead of Masachusetts Furniture and Piano Movers Association, Inc.) Dear Member:

The. Federal Trade Commission has ordered Massachusetts Furniture and Piano Movers Association, Inc. to cease and desist its tariff and collective rate-making activities. A copy of the Commission Opinion and Order is enclosed. In order that you may readily understand the terms of the Order, we have set forth its essential provisions, although you must realize that the Order itself is controlling, rather than the following explanation of its provisions: (1) The Association is prohibited from engaging in any collective ratemaking activities, including the proposal, development or filing of tariffs which contain any collec tively formulated rates for intrastate transportation services. Each member carrier must independently set its own rates for transportation of property or related services goods or equipment within Massachusetts, but may use the Association as a tariff publishing agent.

(2) The Association is prohibited from providing a forum for its members for the purpose of discussing rates.

(3) The Association is prohibited from urging, suggesting, encouraging or attempting to influence in any way the rates members charge for their intrastate transportation services; the Association may not provide non-public information to any carrier about rate changes ordered by another carrier.

(4) The Association is prohibited from maintaining any rate or tariff committee which discusses or formulates intrastate rates or rate proposals. (5) The ABsociation is given sixmonths to cancel all tariffs and tariff supplements currently in effect and on fie at the Massachusetts Department of Public Utilities which were prepared, developed or fied by the Association. (6) The Association is required to amend its by laws to require its members to observe the provisions of the order as a condition of membership in the Association. Sincerely yours, Daniel W. Dunn Executive Director Enclosure Complaint 102 F.T.