Ronwin v. State Bar

686 F.2d 692
Court of Appeals for the Ninth Circuit·Decided December 14, 1981·No. No. 80-5004·Published·Cited by 29 cases

Opinions

HATTER, District Judge:

Ronwin sued the Arizona State Bar (“Bar”) and the individual members (and their spouses) of the Committee on Examinations and Admissions of the Arizona Supreme Court (“Committee”), alleging that they had violated federal antitrust laws in grading the 1974 Arizona bar examination that Ronwin failed. The district court denied Ronwin’s motion for recusal and dismissed the action for failure to state a claim, lack of jurisdiction, and lack of standing. We affirm the denial of the recusal motion, but reverse the dismissal decision as to the individual committee members 1 and remand for further proceedings.

I

FACTS

Ronwin took the Arizona bar examination in February, 1974. He was notified two months later that he had failed the examination. The Arizona Supreme Court refused to review his exam, and the United States Supreme Court denied certiorari. See Ronwin v. Committee on Examination and Admissions, 419 U.S. 967, 95 S.Ct. 231, 42 L.Ed.2d 183 (1974).2

[695] Ronwin filed this antitrust action in March, 1978, alleging that defendants violated section 1 of the Sherman Act, 15 U.S.C. § 1, by illegally restricting competition among attorneys practicing in Arizona. The essence of Ronwin’s complaint is that the Committee graded the exam to admit a predetermined number of persons, without reference to “achievement by each bar applicant of a pre-set standard [of competence].” For purposes of their motion to dismiss, defendants did not challenge the accuracy of Ronwin’s allegations.3

At the time Ronwin took the bar exam, the Committee was authorized to determine whether bar applicants possessed the “necessary qualifications and . . . fulfilled] the requirements prescribed by the [Bar] board of governors as approved by [the Arizona Supreme Court] .. . . ” Ariz.Sup.Ct. Rule 28(a) (1978) (amended in 1975 to create two separate committees). The Committee consists of seven active members of the State Bar who, upon the recommendation of the Bar’s Board of Governors, are appointed by the Arizona Supreme Court. Id. As Ron-win noted in paragraph II of his complaint, the State Bar is a private entity to which all Arizona lawyers belong, and the individual defendants were members of “the Committee . . . and, as such, presided over and conducted the process by which applicants for membership in [the] Bar were examined. ...”

II

DISMISSAL OF RONWIN’S ACTION

The district court gave three reasons for dismissing the action: (1) the complaint failed to state a claim upon which relief could be granted; (2) the court lacked jurisdiction over the subject matter; and (3) Ronwin lacked standing to seek the relief requested. These reasons will be discussed seriatim.

A. Failure to State a Claim — State-Action Immunity

The district court’s ruling that Ronwin had failed to state a claim was apparently based on its acceptance of defendants’ argument that bar grading procedures are immune from federal antitrust laws. Relying primarily on Bates v. State Bar of Arizona, 433 U.S. 350, 97 S.Ct. 2691, 53 L.Ed.2d 810 (1977), the defendants argue that, even assuming, arguendo, the grading formula was anticompetitive, the Committee’s status as a state agent renders its actions absolutely immune from antitrust liability. We disagree.

In Bates, the Supreme Court held that a disciplinary rule adopted by the Arizona Supreme Court and enforced by the Arizona state bar, which prohibited lawyers from advertising, did not violate the federal antitrust laws under the state-action exemption first announced in Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943). 433 U.S. at 359-61, 97 S.Ct. at 2696-97. The Court stressed that the real party in interest was the Arizona Supreme Court because it had adopted the challenged restraint. Because the challenged restraint had been specifically adopted by the state acting, through the State Supreme Court, as sovereign, it therefore reflected a clear and affirmative articulation of state policy. Id. at 361-62, 97 S.Ct. at 2697-98. In the present case, by contrast, the challenged restraint was not adopted or directly authorized by the Arizona Supreme Court.

In a more analogous case, the Supreme Court held that the activities of a county and a state bar association in publishing and enforcing a minimum-fee schedule were not shielded by the state-action exemption. Goldfarb v. Virginia State Bar, [696] 421 U.S. 773, 788-92, 95 S.Ct. 2004, 2013-15, 44 L.Ed.2d 572 (1975). The Court stated:

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. Parker v. Brown, 317 U.S. at 350-352 [63 S.Ct. at 313-14]; Continental Co. v. Union Carbide, 370 U.S. 690, 706-07 [82 S.Ct. 1404, 1414-15, 8 L.Ed.2d 777] (1962). Here we need not inquire further into the state-action question because it cannot fairly be said that the State of Virginia through its Supreme Court Rules required the anticompetitive activities of either respondent. Respondents have pointed to no Virginia statute requiring their activities; state law simply does not refer to fees, leaving regulation of the profession to the Virginia Supreme Court; although the Supreme Court’s ethical codes mention advisory fee schedules they do not direct either respondent to supply them, or require the type of price floor which arose from respondents’ activities.... It is not enough that, as the County Bar puts it, anticompetitive conduct is “prompted” by state action; rather, anticompetitive activities must be compelled by direction of the State acting as a sovereign.

Id. at 790-91, 95 S.Ct. at 2014-15.

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