Hoover v. Ronwin, 466 U.S. 558 (1984)

Hoover v. Ronwin

No. 82-1474

Argued January 16, 1984
Decided May 14, 1984
466 U.S. 558

CERTIORARI TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

Syllabus

Respondent Ronwin (hereafter respondent) was an unsuccessful candidate for admission to the Arizona Bar in 1974. Pursuant to the Arizona Constitution, the Arizona Supreme Court has plenary authority to determine admissions to the bar. Under the Arizona Supreme Court Rules in effect in 1974, a Committee on Examinations and Admissions (Committee), appointed by the court, was authorized to examine applicants on specified subjects. The Rules required the Committee to submit its grading formula to the court prior to giving the examination. After grading the examination, the Committee was directed to submit its recommendations for the admission of applicants to the court, which then made the final decision to grant or deny admission to practice. Under the Rules, a rejected applicant was entitled to seek individualized review of the Committee’s adverse recommendation by filing a petition with the court. After the Arizona Supreme Court denied respondent’s petition for review, he ultimately filed this action in Federal District Court against the Arizona State Bar, members of the Committee (including petitioners), and others. Respondent alleged that petitioners had conspired to restrain trade in violation of § 1 of the Sherman Act by "artificially reducing the numbers of competing attorneys in the State." He argued that the Committee had set the grading scale on the examination with reference to the number of new attorneys it thought desirable, rather than with reference to some "suitable" level of competence. Petitioners contended that they were immune from antitrust liability under the state action doctrine of Parker v. Brown, 317 U.S. 341. The District Court dismissed the complaint on the ground, inter alia, of failure to state a justiciable claim. The Court of Appeals reversed, holding that, although petitioners ultimately might be able to show that they were entitled to state action immunity, the District Court should not have decided the issue on a motion to dismiss.

Held: The District Court properly dismissed the complaint for failure to state a claim on which relief could be granted. Pp. 567-582.

(a) Under Parker, when a state legislature adopts legislation, its actions constitute those of the State and ipso facto are exempt from the operation of the antitrust laws. A state supreme court, when acting in a legislative capacity, occupies the same position as that of a state legislature for purposes of the state action doctrine. Bates v. State Bar of Arizona, 433 U.S. 350. When the activity at issue is not directly that of the legislature or supreme court, but is carried out by others pursuant to state authorization, there must be a showing that the challenged conduct is pursuant to a clearly articulated state policy to replace competition with regulation, and the degree to which the state legislature or supreme court supervises its representative may be relevant to the inquiry. However, where the challenged conduct is in fact that of the state legislature or supreme court, the issues of "clear articulation" and "active supervision" need not be addressed. Pp. 567-569.

(b) In this case, the actions of the Committee with regard to the bar examination grading formula cannot be divorced from the Arizona Supreme Court’s exercise of its sovereign powers. Although the Arizona Supreme Court necessarily delegated the administration of the admissions process to the Committee, under the court’s Rules, the court itself retained the sole authority to determine who should be admitted to the practice of law in Arizona. Thus, the challenged conduct was in reality that of the Arizona Supreme Court, and is therefore exempt from Sherman Act liability under the state action doctrine. Cf. Bates v. State Bar of Arizona, supra. Pp. 569-574.

(c) Bates cannot be distinguished on the ground that the Arizona Supreme Court is not a petitioner in this case, and was not named as a defendant in the complaint, or on the ground that Parker is inapplicable because respondent is not challenging the Arizona Supreme Court’s conduct. The same situation existed in Bates. As in Bates, the real party in interest is the Arizona Supreme Court. The case law, as well as the State Supreme Court’s Rules, makes clear that the court made the final decision on each applicant. To allow Sherman Act plaintiffs to look behind the actions of state sovereigns and base their claims on perceived illegal conspiracies among the committees, commissions, or others who necessarily must advise the sovereign would emasculate the Parker v. Brown doctrine. Pp. 574-582.

686 F.2d 692, reversed.

POWELL, J., delivered the opinion of the Court, in which BURGER, C.J., and BRENNAN and MARSHALL, JJ., joined. STEVENS, J., filed a dissenting opinion, in which WHITE and BLACKMUN, JJ., joined, post, p. 582. REHNQUIST, J., took no part in the decision of the case.

O’CONNOR, J., took no part in the consideration or decision of the case.