national soc professional engineers argued january decided april brought civil antitrust suit petitioner national society professional engineers alleging petitioner canon ethics prohibiting members submitting competitive bids engineering services suppressed competition violation sherman act petitioner defended ground inter alia rule reason canon justified adopted members learned profession purpose minimizing risk competition produce inferior engineering work endangering public safety district granting injunction canon rejected justification holding canon face violated sherman act thus making unnecessary make findings likelihood competition produce dire consequences envisaged petitioner appeals affirmed although modifying district injunction certain respects modified prohibits petitioner adopting official opinion policy statement guideline stating implying competitive bidding unethical held face canon question restrains trade within meaning sherman act rule reason proper inquiry whether challenged agreement one promotes one suppresses competition support defense based assumption competition unreasonable pp canon amounts agreement among competitors refuse discuss prices potential customers negotiations resulted initial selection engineer price fixing operates absolute ban competitive bidding applying equal force complicated simple projects inexperienced sophisticated customers pp petitioner affirmative defense confirms rather refutes anticompetitive purpose effect canon attempt justify rule reason restraint competition imposed canon basis potential threat competition poses public safety ethics engineering profession nothing less frontal assault basic policy sherman act pp engineers often involved projects significantly affecting public safety justify exception sherman act pp ethical norms may serve regulate promote competition professional services thus fall within rule reason petitioner argument far cry position although competition may entirely conducive ethical behavior reason cognizable sherman act away competition district injunction modified appeals abridge first amendment rights pp first amendment make impossible ever enforce laws agreements restraint trade giboney empire storage ice although district may consider fact injunction may impinge upon rights otherwise constitutionally protected protections prevent remedying antitrust violations pp standard injunction must judged whether relief represents reasonable method eliminating consequences illegal conduct injunction meets standard petitioner wishes adopt ethical guideline closely confined legitimate objective preventing deceptively low bids may move district modify injunction pp stevens delivered opinion stewart white marshall powell joined parts iii blackmun rehnquist joined blackmun filed opinion concurring part concurring judgment rehnquist joined post burger filed opinion concurring part dissenting part post brennan took part consideration decision case lee loevinger argued cause petitioner briefs martin michaelson howard shapiro argued cause brief solicitor general mccree assistant attorney general shenefield robert nicholson justice stevens delivered opinion civil antitrust case brought nullify association canon ethics prohibiting competitive bidding members question whether canon may justified sherman act stat amended et seq ed adopted members learned profession purpose minimizing risk competition produce inferior engineering work endangering public safety district rejected justification without making findings likelihood competition produce dire consequences foreseen association appeals affirmed granted certiorari decide whether district considered factual basis proffered justification rejecting satisfied asserted defense rests fundamental misunderstanding rule reason frequently applied antitrust litigation affirm engineering important learned profession graduate engineers registered professional engineers registration requirements vary state state usually require applicant graduate engineer least four years practical experience pass written examination half registered engage consulting engineering fee basis perform services connection study design construction types improvements real property bridges office buildings airports factories examples engineering fees amounting well billion year constitute total construction costs given facility approximately cost construction direct result work performed engineer concerning systems equipment incorporated structure national society professional engineers society organized deal nontechnical aspects engineering practice including promotion professional social economic interests members present membership resides throughout foreign countries approximately members consulting engineers offer services governmental industrial private clients society members principals chief executive officers largest engineering firms country charges consulting engineer may computed different ways may charge client percentage cost project may set fee actual cost plus overhead plus reasonable profit may charge fixed rates per hour different types work may perform assignment specific sum may combine one approaches suggested fee schedules particular types services certain areas promulgated time time various local societies case however involve claim national society tried fix specific fees even specific method calculating fees involves charge members society unlawfully agreed refuse negotiate even discuss question fees prospective client selected engineer particular project evidence agreement found society code ethics adopted july district found society board ethical review uniformly interpreted ethical rules competitive bidding engineering services prohibiting submission form price information prospective customer enable customer make price comparison engineering services client requires information provided imposes obligation upon engineering firm withdraw consideration job society code ethics thus prohibits engineers soliciting submitting price information supp dc seeks preserve profession traditional method selecting professional engineers traditional method client initially selects engineer basis background reputation price government filed complaint society alleging members agreed abide canons ethics prohibiting submission competitive bids engineering services consequence price competition among members suppressed customers deprived benefits free open competition complaint prayed injunction terminating unlawful agreement answer society admitted essential facts alleged government pleaded series affirmative defenses one remains issue defense society averred standard set code ethics reasonable competition among professional engineers contrary public interest averred cheaper easier engineer design specify inefficient unnecessarily expensive structures methods construction accordingly competitive pressure offer engineering services lowest possible price adversely affect quality engineering moreover practice awarding engineering contracts lowest bidder regardless quality dangerous public health safety welfare reasons society claimed code ethics unreasonable restraint interstate trade commerce parties complied voluminous discovery trial record district made detailed findings engineering profession society members participation interstate commerce history ban competitive bidding certain incidents ban appears violated enforced district however make finding question whether extent competition led inferior engineering work turn adversely affected public health safety welfare inquiry considered unnecessary convinced ethical prohibition competitive bidding face tampering price structure engineering fees violation sherman act although modified injunction entered district appeals affirmed conclusion agreement unlawful face therefore illegal without regard claimed possible benefits app ii goldfarb virginia state bar held bar association rule prescribing minimum fees legal services violated sherman act opinion noted certain practices members learned profession might survive scrutiny rule reason even though viewed violation sherman act another context said fact restraint operates upon profession distinguished business course relevant determining whether particular restraint violates sherman act unrealistic view practice professions interchangeable business activities automatically apply professions antitrust concepts originated areas public service aspect features professions may require particular practice properly viewed violation sherman act another context treated differently intimate view situation one confronted today rule reason one problem presented language sherman act mean says statute says every contract restrains trade unlawful justice brandeis perceptively noted restraint essence every contract read literally outlaw entire body private contract law yet body law establishes enforceability commercial agreements enables competitive markets indeed competitive economy function effectively congress however intend text sherman act delineate full meaning statute application concrete situations legislative history makes perfectly clear expected courts give shape statute broad mandate drawing tradition rule reason origins precedents long antedating sherman act served purpose used give act flexibility definition central principle antitrust analysis remained constant contrary name rule open field antitrust inquiry argument favor challenged restraint may fall within realm reason instead focuses directly challenged restraint impact competitive conditions principle apparent even earliest cases applying rule reason mitchel reynolds supra mitchel involved enforceability promise seller bakery compete purchaser business covenant limited time applied area bakery operated therefore upheld reasonable even though deprived public benefit potential competition benefit enhancing marketability business thereby providing incentives develop enterprise outweighed temporary limited loss competition rule reason suggested mitchel reynolds regarded standard testing enforceability covenants restraint trade ancillary legitimate transaction employment contract sale going business judge later chief justice taft interpreted rule classic rejection argument competitors may lawfully agree sell goods price long price reasonable addyston pipe steel aff case subsequent decisions unequivocally foreclose interpretation rule permitting inquiry reasonableness prices set private agreement early cases also foreclose argument special characteristics particular industry monopolistic arrangements better promote trade commerce competition freight joint traffic kind argument properly addressed congress may justify exemption statute specific industries permitted rule reason observed standard oil restraints trade within purview statute taken category indulging general reasoning expediency made contracts wisdom want wisdom statute prohibited made test prescribed standard oil whether challenged contracts acts unreasonably restrictive competitive conditions unreasonableness test based either nature character contracts surrounding circumstances giving rise inference presumption intended restrain trade enhance prices either branch test inquiry confined consideration impact competitive conditions respect rule reason remained faithful origins justice brandeis opinion chicago board trade opinion written justice powell continental adhered position inquiry mandated rule reason whether challenged agreement one promotes competition one suppresses competition true test legality whether restraint imposed merely regulates perhaps thereby promotes competition whether may suppress even destroy competition quoted thus two complementary categories antitrust analysis first category agreements whose nature necessary effect plainly anticompetitive elaborate study industry needed establish illegality illegal per se second category agreements whose competitive effect evaluated analyzing facts peculiar business history restraint reasons imposed either event purpose analysis form judgment competitive significance restraint decide whether policy favoring competition public interest interest members industry subject exceptions defined statute policy decision made congress ban competitive bidding price central nervous system economy oil agreement interfere setting price free market forces illegal face container case presented agreement among competitors refuse discuss prices potential customers negotiations resulted initial selection engineer price fixing elaborate industry analysis required demonstrate anticompetitive character agreement operates absolute ban competitive bidding applying equal force complicated simple projects inexperienced sophisticated customers district found ban impedes ordinary give take market place substantially deprives customer ability utilize compare prices selecting engineering services supp face agreement restrains trade within meaning sherman act society affirmative defense confirms rather refutes anticompetitive purpose effect agreement society argues restraint justified bidding engineering services inherently imprecise lead deceptively low bids thereby tempt individual engineers inferior work consequent risk public safety health logic argument rests assumption agreement tend maintain price level effect serve intended purpose society nonetheless invokes rule reason arguing restraint price competition ultimately inures public benefit preventing production inferior work insuring ethical behavior preceding discussion rule reason reveals never accepted argument may petitioner argues competition tends force prices inexpensive item may inferior one costly risk therefore competition cause suppliers market defective product similarly competitive bidding engineering projects may inherently imprecise incapable taking account variables involved actual performance project based considerations purchaser might conclude interest quality may embrace safety end product outweighs advantages achieving cost savings pitting one competitor another individual vendor might independently refrain price negotiation satisfied fully understands scope customers needs decisions might reasonable indeed petitioner provided ample documentation thesis reasons satisfy rule individual decisions subject antitrust attack sherman act require competitive bidding prohibits unreasonable restraints competition petitioner ban competitive bidding prevents customers making price comparisons initial selection engineer imposes society views costs benefits competition entire marketplace restraint must justified rule reason petitioner attempt basis potential threat competition poses public safety ethics profession nothing less frontal assault basic policy sherman act sherman act reflects legislative judgment ultimately competition produce lower prices also better goods services heart national economic policy long faith value competition standard oil ftc assumption competition best method allocating resources free market recognizes elements bargain quality service safety durability immediate cost favorably affected free opportunity select among alternative offers even assuming occasional exceptions presumed consequences competition statutory policy precludes inquiry question whether competition good bad fact engineers often involved projects significantly affecting public safety alter analysis exceptions sherman act potentially dangerous goods services tantamount repeal statute complex economy number items may cause serious harm almost endless automobiles drugs foods aircraft components heavy equipment countless others cause serious harm individuals public large defectively made judiciary indirectly protect public harm conferring monopoly privileges manufacturers token cautionary goldfarb quoted supra read fashioning broad exemption rule reason learned professions adhere view expressed goldfarb nature professional services may differ significantly business services accordingly nature competition services may vary ethical norms may serve regulate promote competition thus fall within rule reason society argument case far cry position faced contention total ban competitive bidding necessary otherwise engineers tempted submit deceptively low bids certainly problem professional deception proper subject ethical canon equation competition deception like similar equation safety hazards simply broad may assume competition entirely conducive ethical behavior reason cognizable sherman act away competition sum rule reason support defense based assumption competition unreasonable view rule create sea doubt judge taft refused embark addyston firmly avoided ever since iii judgment entered district modified appeals prohibits society adopting official opinion policy statement guideline stating implying competitive bidding unethical petitioner argues judgment abridges first amendment rights find merit contention found society guilty violation sherman act district empowered fashion appropriate restraints society future activities avoid recurrence violation eliminate consequences see international salt glaxo group resulting order may curtail exercise liberties society might otherwise enjoy necessary cases unavoidable consequence violation injunction price fixing abridges freedom businessmen talk one another prices injunction case must restrict society range expression ethics competitive bidding first amendment make impossible ever enforce laws agreements restraint trade giboney empire storage ice fashioning remedy district may course consider fact injunction may impinge upon rights otherwise constitutionally protected protections prevent remedying antitrust violations standard order must judged whether relief represents reasonable method eliminating consequences illegal conduct agree appeals injunction modified meets standard goes beyond simple proscription precise conduct previously pursued entirely appropriate district obliged assume contrary common experience violator antitrust laws relinquish fruits violation completely requires advantages already hand may held methods subtle informed difficult prove first place win market purpose restrain trade appears clear violation law necessary untraveled roads end left open worn one closed international salt supra judgment appeals affirmed footnotes app district original judgment entered petitioner entitled appeal directly vacated district judgment reconsideration light recent decision goldfarb virginia state bar reconsideration district original judgment supp dc petitioner appealed appeals section remained effect time trial provided section engineer compete unfairly another engineer attempting obtain employment advancement professional engagements competitive bidding shall solicit submit engineering proposals basis competitive bidding competitive bidding professional engineering services defined formal informal submission receipt verbal written estimates cost proposals terms dollars man days work required percentage construction cost measure compensation whereby prospective client may compare engineering services price basis prior time one engineer one engineering organization selected negotiations disclosure recommended fee schedules prepared various engineering societies considered constitute competitive bidding engineer requested submit fee proposal bid prior selection engineer firm subject negotiation satisfactory contract shall attempt procedure changed conform ethical practices successful shall withdraw consideration proposed work principles shall applied engineer obtaining services professions app addition society code ethics see supra society board directors adopted various professional policy statements policy statement issued make clear beyond doubt society opposed competitive bidding engineering projects policy statement replaced policy permits price quotations certain types engineering work particular research development projects although society argues never enforced ban competitive bidding reply brief petitioner district specifically found record support finding nspe members actively pursue course policing adherence competitive bid ban direct indirect communication members prospective clients finding challenged clearly erroneous selected engineer may accordance society canons ethics negotiate satisfactory fee arrangement client negotiations unsuccessful client may withdraw selection approach new engineer entire defense pleaded answer reads follows principles standards contained nspe code ethics particularly contained part nspe code ethics set reasonable necessary public health safety welfare insofar affected work professional engineers serve public interest experience demonstrated competitive bidding professional engineering services inconsistent securing recipients services economical projects structures testing calculating designing economical efficient structures methods construction complex difficult expensive cheaper easier design specify inefficient unnecessarily expensive structures methods construction consequently professional engineers required competitive pressures submit bids order obtain employment services inevitable tendency offer professional engineering services lowest possible price although may result lowering cost professional engineering services inevitably result increasing overall cost decreasing efficiency structures projects require professional engineering design specification work experience also demonstrated competitive bidding instances situations results award work performed lowest bidder regardless factors ability experience expertise skill capability learning like awards case professional engineers endanger public health welfare safety aforesaid reasons provisions nspe code ethics set event unreasonable restraint interstate trade commerce app appeals struck portion district decree ordered society state consider competitive bidding unethical app reasoned provision intrusive necessary achieve fulfillment governmental interest ibid government petitioned review decision section sherman act set forth ed provides every contract combination form trust otherwise conspiracy restraint trade commerce among several foreign nations declared illegal legality agreement regulation determined simple test whether restrains competition every agreement concerning trade every regulation trade restrains bind restrain essence chicago board trade see also topco associates read narrowest possible way commercial contract deemed violate see cong rec comments sherman see generally thorelli federal antitrust policy fourth reason favour contracts may happen instances wherein may useful beneficial case old man finding circumstances either body mind likely loser continuing trade case better part consideration selling custom may procure livelihood might probably lost trading longer eng see also freight congress exempted certain industries full reach sherman act see ed act agricultural cooperatives ed act insurance act rail motor carrier bureaus ed newspaper joint operating agreements without going detail briefly surveying whole field may accuracy said dread enhancement prices wrongs thought flow undue limitation competitive conditions caused contracts acts individuals corporations led matter public policy prohibition treating illegal contracts acts unreasonably restrictive competitive conditions either nature character contract act surrounding circumstances justify conclusion entered performed legitimate purpose reasonably forwarding personal interest developing trade contrary character give rise inference presumption entered done intent wrong general public limit right individuals thus restraining free flow commerce tending bring evils enhancement prices considered public policy throughout opinion emphasis economic conceptions instance description treatment engrossing forestalling statutes noted contracts illegal face later recognized reasonable tended promote competition pointed report attorney general national committee study antitrust laws standard oil gave courts discretion interpreting word every section discretion confined consideration whether case conduct reviewed act constitutes undue restraint competitive conditions monopolization attempt monopolize standard permits courts decide whether conduct significantly unreasonably anticompetitive character effect makes obsolete prevalent arguments whether monopoly arrangements socially preferable competition particular industry example high fixed costs risks cutthroat competition similar unusual conditions continental explained rule reason standard follows rule factfinder weighs circumstances case deciding whether restrictive practice prohibited imposing unreasonable restraint competition analyzed market impact vertical restraints noting complexity potential simultaneous reduction intrabrand competition stimulation interbrand competition competitive impact economic analysis emphasized throughout opinion see generally attorney general report supra bork rule reason per se concept price fixing market division yale sullivan law antitrust society also points competition form bargaining engineer customer allowed canon ethics engineer initially selected see supra contends prohibition competitive bidding regulates timing competition thus making case analogous chicago board trade upheld exchange rule forbade exchange members making purchases close day session price closing bid price indeed petitioner reprinted government brief case demonstrate solicitor general regarded exchange rule form price fixing reply brief petitioner find reliance chicago board trade misplaced two reasons first petitioner claim mistakenly treats negotiation single seller single buyer equivalent competition two potential sellers second even accept society equation bargaining price competition concern chicago board trade formulation proper test used judging legality agreement formulation unquestionably stresses impact competition whatever one view application rule reason case see sullivan supra considered exchange regulation price information positive effect competition district findings preclude similar conclusion concerning effect society regulation course express view truth assertion although might noted society allowed competitive bidding types engineering projects country see supra one time allowed competitive bidding engineering work foreign countries required laws regulations practices foreign country app rule called clause abolished indeed congress decided require competitive bidding government purchases engineering services brooks act supp requires government use method selecting engineers similar society traditional method see supra society relies heavily brooks act evidence ban competitive bidding reasonable argument without merit brooks act even purport exempt engineering services antitrust laws reasonableness individual purchaser decision seek lower prices competition authorize vendors conspire impose decision purchasers courts instance upheld marketing restraints related safety product provided anticompetitive effect reasonably ancillary seller main purpose protecting public harm product liability see tripoli wella en banc cf continental see supra see app petitioner contends judgment unconstitutional prior restraint speech unconstitutional prohibition free association thus goldfarb although bar association believed fee schedule accurately reflected ethical price levels nonetheless enjoined adopting publishing distributing future schedules minimum suggested fees goldfarb virginia state bar supp ed see also national assn real estate boards instance society argues injunction read prohibiting opposing repeal statutes brooks act see supra prohibition violate principles doctrine see eastern railroad presidents conf noerr motor freight mine workers pennington terms injunction contains prohibition indeed government contends othing judgment prevents nspe members attempting influence governmental action brief justice blackmun justice rehnquist joins concurring part concurring judgment join parts iii opinion concur judgment join part ii least moment reach far appears intimating ante ethical rule overall anticompetitive effect promulgated professional society forbidden sherman act view decision goldfarb virginia state bar properly left flexibility considering apply traditional sherman act concepts professions long consigned certainly case require us decide whether rule reason applied professions ever take account benefits increased competition even accepting petitioner assertion product quality one benefit maintenance quality engineering services requires engineer bid made full acquaintance scope client desired project brief petitioner petitioner society rule still grossly overbroad petitioner concedes tr oral arg forbids simultaneous consultation client several engineers even client provides complete information scope nature desired project requesting price information secure price estimate project client must purport engage single engineer long engagement continues member society permitted discuss project client order provide comparative price information though fix prices directly though customer retains option rejecting particular engineer offer beginning negotiations another engineer forced process sequential search inevitably increases cost gathering price information hence dampen price competition without calibrated role play preventing uninformed bids society rule overbroad aspect noted judge leventhal prevents dissemination competitive price information regard real property improvements prior engagement single engineer regardless sophistication purchaser complexity project procedures evaluating price information app skepticism going case shaping rule reason narrow last majority arises fact may ethical rules de minimis anticompetitive effect yet important profession proper ordering medical association prescription standards minimum competence licensing certification may lessen number entrants bar association regulation permissible forms price advertising nonroutine legal services limitation solicitation see bates state bar arizona may also effect reducing price competition acknowledging professional services may differ significantly business services nature competition services may vary ante holding ethical norms pass muster rule reason promote competition certain leaves enough elbowroom realistic application sherman act professional services always applied rule reason rigor even commercial businesses see appalachian coals chicago board trade sullivan law antitrust bork antitrust paradox intimate view correctness decisions chief justice burger concurring part dissenting part concur judgment extent sustains finding violation sherman act dissent portion judgment prohibiting petitioner stating published standards ethics view competitive bidding unethical first amendment guarantees right express position right impaired cloak remedial judicial action