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Does Lobbying Violate Antitrust Laws?

ASSOCIATIONS NOW, February 2009 Intelligence

By: Mark Truesdell


Q: Does lobbying by a trade association ever constitute a violation of the Sherman Antitrust Act?

A: Not if your trade association stays within the bounds of the Noerr-Pennington doctrine.

The Noerr-Pennington doctrine is a fundamental cornerstone of association law. Articulated more than 40 years ago by the U.S. Supreme Court in two separate opinions, it protects associations from Sherman Act liability as they lobby governments for their industries or professions, even to the detriment of others. Although the First Amendment spells out the right of people "peaceably to assemble, and to petition the Government for a redress of grievances," there is inherent tension between this express right to lobby and antitrust laws when a group of competitors engages in lobbying efforts that would result in the reduction of competition.

How does the law resolve this tension? When the purpose of the conspiracy is to lobby the government to adopt or enforce laws or regulations, the First Amendment right to petition the government trumps the antitrust laws. Eastern Railroad Presidents Conference v. Noerr Motor Freight, 365 U.S. 127 (1961) involved a claim by a railway employees’ union that the railroad’s grassroots lobbying campaign to turn the public against the union, which resulted in the Pennsylvania governor’s veto of the trucker’s proposed legislation, constituted an unlawful conspiracy to restrain trade. The Supreme Court rejected this claim, stating: "The right of petition is one of the freedoms protected by the Bill of Rights, and we cannot, of course, lightly impute to Congress an intent to invade these freedoms." As a result, joint lobbying activity urging the government to adopt or enforce laws or regulations does not violate the Sherman Act.

United Mine Workers v. Pennington, 381 U.S. 657 (1965) extended the doctrine to coordinated lobbying efforts by an industry and its labor organization. In a clear effort to drive small, nonunionized coal mines out of business, the union and the large mine owners jointly persuaded the Secretary of Labor to establish a high minimum wage for employees of mining companies selling coal to the Tennessee Valley Authority, making it difficult for small coal companies to compete for TVA business. Even though the effect was to drive small companies out of the industry, the Supreme Court fully condoned the joint activity leading to that result, saying, "Joint efforts to influence public officials do not violate the antitrust laws even though intended to eliminate competition. Such conduct is not illegal, either standing alone or as part of a broader scheme itself violative of the Sherman Act. … The conduct of the union and the operators did not violate the Act ..."

The value of the Noerr-Pennington doctrine to associations is twofold. First, the doctrine means that an association may engage in lobbying efforts on behalf of its members, even though such efforts might be viewed as conspiratorial. Second, it means that the association may jointly lobby with other organizations, even if the effect of those efforts may be anticompetitive.

There are, however, two clear exceptions to the Noerr-Pennington doctrine:

The "sham" exception. The Noerr-Pennington doctrine will not protect lobbying efforts that are found to be a "sham" or abuse of the governmental process. In other words, lobbying found to be undertaken simply to frustrate or harass competitors will not be protected. For example, where a state motor truck association acted to oppose every application filed with a regulatory body by its members’ competitors without regard to the merits of the applications, the conduct was found to violate the antitrust laws as an abuse of governmental process. (See California Motor Transp. Co. v. Trucking Unlimited, 404 U.S. 508 [1972].)

Market participation exception. The Noerr-Pennington doctrine will not apply when the joint action is targeted not at a proposed public policy decision, but instead at a specific purchasing decision by a government. George R. Whitten, Jr., Inc. v. Paddock Pool Builders, Inc., 424 F.2d 25 (1st. Cir. 1970), involved a manufacturer of gutterless swimming pools in combination with dealers, which lobbied to get its specifications adopted by multiple local governments for the purpose of eliminating all competition. The court found that the Noerr-Pennington doctrine defense "is intended to apply to some significant policy determination in the application of a statute, not a technical decision about the best kind of weld to use in a swimming pool gutter."

Since 1965, the Noerr-Pennington doctrine has stood as a cornerstone of the trade association world. Association executives should be aware of its legacy and be committed to its continued vitality. But don’t simply count on the Noerr-Pennington doctrine to protect an association’s joint actions—consult a knowledgeable attorney to confirm the applicability of the doctrine.

Mark Truesdell is an attorney at Beving, Swanson, & Forest PC in Des Moines, Iowa. Email:

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