Allied Tube & Conduit Corp. v. Indian Head, Inc.

Background

A national maker of steel electrical conduit led a campaign within a private standards group that writes the National Electrical Code. The rival maker had developed plastic polyvinyl chloride conduit and sought approval in the Code. The steel interests recruited and paid new association members to attend an annual meeting, told them when and how to vote, and the membership rejected approval by a four-vote margin. The plastic maker sued, claiming the conduct unlawfully restrained trade under the Sherman Act; a jury found harm in the marketplace.

Reasoning

The central question was whether industry participants who shape private model codes can claim immunity from antitrust suits that result from the standards’ marketplace effects. The Court said the Noerr line of cases protects political petitioning but does not shield commercial activity where economically interested members exercise decisionmaking authority in a private association of market participants. Because the Association had members with economic motives and the conduct biased the standard-setting process, the Court held Noerr immunity unavailable in this case.

Real world impact

The decision means private standards bodies and firms that vote on model codes face possible antitrust exposure for standards’ marketplace effects, especially when industry representatives control decisions. Companies may be chilled from participating or may avoid voting, and rivals who lose in a code process can bring antitrust claims. The Court left open detailed liability rules, so courts will apply antitrust standards to these processes going forward.

Dissents or concurrances

One Justice dissented, arguing the ruling misapplied prior immunity decisions, warned it will chill expert participation in code-making, and urged that existing exceptions for sham or fraudulent petitioning are enough to police abuses.