
USCA1 Opinion

	




          February 25, 1993                            UNITED STATES COURT OF APPEALS                                For The First Circuit                                 ____________________        No. 92-1856                          SANDY RIVER NURSING CARE, ET AL.,                               Plaintiffs, Appellants,                                          v.                               AETNA CASUALTY, ET AL.,                                Defendants, Appellees.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                              FOR THE DISTRICT OF MAINE                     [Hon. Morton A. Brody, U.S. District Judge]                                            ___________________                                 ____________________                                        Before                                 Selya, Circuit Judge,                                        _____________                            Coffin, Senior Circuit Judge,                                    ____________________                              and Stahl, Circuit Judge.                                         _____________                                 ____________________            K.  Craig  Wildfang  with  whom  Wood  R.  Foster,  Jr.,  Anne  K.            ___________________              ______________________   ________        Weinhardt,  Sidney St. F. Thaxter, John D. Gleason, Vance K. Opperman,        _________   _____________________  _______________  _________________        Robert J. Schmit, Patrick N.  McTeague, and Barnet D. Skolnik were  on        ________________  ____________________      _________________        brief for appellants.            Richard G.  Parker with  whom Paul  W. Chaiken,  James E.  Kaplan,            __________________            ________________   ________________        Mark F. Horning,  Paul Macri,  Fredric W. Yerman,  Lewis V.  Vafiades,        _______________   __________   _________________   __________________        Michael L. McCluggage, Harold  J. Friedman, Carl F. Rella,  Stanley B.        _____________________  ___________________  _____________   __________        Block,  Robert  S. Frank,  Robert  F. Hanson,  William  A. Montgomery,        _____   ________________   _________________   ______________________        Michael A. Nelson, James van R. Springer, George Z.  Singal, Joseph E.        _________________  _____________________  _________________  _________        Coughlin, Paul H. Friedman, Randall B. Weill, Alfred C. Frawley, Peter        ________  ________________  ________________  _________________  _____        J.  Rubin, Lewis V. Vafiades, and Lewis  A. Noonberg were on brief for        _________  _________________      __________________        appellees.            Stephen L. Wessler, Deputy Attorney General, Francis E.  Ackerman,            __________________                           ____________________        Assistant  Attorney General,  and  Thomas D.  Warren, Deputy  Attorney                                           _________________        General, on brief for the State of Maine, amicus curiae.                                 ____________________                                  February 25, 1993                                 ____________________               COFFIN,  Senior Circuit  Judge.  Plaintiffs  are a  group of                        _____________________          Maine employers who claim  that the defendant insurance companies          illegally  conspired to  fix prices  and conduct  a boycott  in a          successful effort to coerce the state legislature into permitting          higher rates for workers'  compensation insurance.1  The district          court  granted  summary  judgment  for defendants  based  on  the          doctrines established in  Parker v. Brown,  317 U.S. 341  (1943),                                    ______    _____          and Eastern  R.R. Presidents  Conference v. Noerr  Motor Freight,              ____________________________________    ____________________          365  U.S. 127  (1961).2   The  court  concluded that  plaintiffs'          claimed damage -- the  additional cost of their insurance  -- was          attributable  to  the  legislation  rather than  to  the  alleged          conspiracy,  and  that,   consequently,  federal  antitrust  laws          provide no relief.               On appeal, plaintiffs contend that  the court erred both  in          construing their  claims and in immunizing  defendants' actions.           After carefully  reviewing the  record and pertinent  caselaw, we          conclude  that  the  district  court   properly  granted  summary          judgment for  defendants.  Although  we depart somewhat  from the          court's  analysis   --  finding  that   the  alleged   conspiracy          constituted a  per se violation of the Sherman Act, 15 U.S.C.   1                         ___ __                                        ____________________               1  Plaintiffs  sued  fifteen  insurance  companies  and  the          National  Council on  Compensation Insurance (NCCI),  a voluntary          association  of  insurers   that  is   a  state-licensed   rating          organization.               2 In briefest summary, these doctrines exempt from antitrust          liability  anticompetitive  actions  attributable  to  the state,          Parker, 317 U.S. at 350-52, and political activity by individuals          ______          seeking to influence  the passage or enforcement  of laws, Noerr,                                                                     _____          365 U.S. at 136-40.           --  we affirm the court's  holding that the  Parker doctrine bars                                                       ______          plaintiffs' requested relief.3                                         I.4               Workers'  compensation insurance has  long been an extremely          sensitive issue in Maine.   Regulation is strict.   All employers          who do not self-insure  are required to purchase such  insurance.          Insurers  are "required by Maine  Law to charge  only those rates          for workers'  compensation insurance which have  been filed with,          and  approved  by,  the  Maine  Superintendent  of  Insurance  in          conformance with Maine Law."  Complt.    32.  The businesses  and          the insurers both have been dissatisfied with the system.               At  least  since  1981,  NCCI  and  its  members have  taken          affirmative steps  to challenge  the allowable rates  as unfairly          low.    They  have  sought review  of  the  Superintendent's rate          decisions in  court, see, e.g., National  Council on Compensation                               ___  ____  _________________________________          Ins.  v.  Superintendent  of  Ins.,  481   A.2d  775  (Me.  1984)          ____      ________________________          (affirming  Superintendent's   disapproval  of  a  requested rate          increase  of 27.5%;  NCCI had  claimed that  statistical evidence          showed that a 110% increase was warranted), and consistently have          lobbied for legislation that  would reduce statutory benefits and          permit insurers to charge higher rates.  Neither their litigation                                        ____________________               3  The complaint  sought  injunctive relief  in addition  to          damages, but neither the district  court nor the parties  devoted          attention to  this request.  We  note only that, in  light of our          analysis,  we see no basis  upon which plaintiffs  may be awarded          injunctive relief.               4  We draw  heavily  from the  district court's  well-stated          description  of   the  recent  history  of   the  Maine  workers'          compensation system.                                            -3-          nor lobbying proved successful during the period relevant to this          litigation.               Indeed,  to  the contrary,  the  Maine  legislature in  1985          enacted the "Workers' Compensation Competitive Rating Act," which          directed  that workers'  compensation  insurance rates  be rolled          back at least 8% and  frozen at that level until 1987.   Me. Rev.          Stat.  Ann. tit. 24-A,    2331-2357 (1985) (repealed).  Under the          Act,  insurers were  prohibited  from  requesting rate  increases          exceeding  10% in  1987, 1988  and  1989.   Id.  at    2355.   In                                                      ___          addition, the 1985 Act declared that it was intended, inter alia:                                                                _____ ____               1.  . . . To prohibit price fixing agreements and other               anticompetitive behavior by insurers.               . . .                3.  . . . To promote price competition among insurers .               . . .           Id. at   2332.          ___               The insurers challenged the 1985 act in court.  Although the          Maine Superior Court  determined that the  rate ceilings were  so          low that they were confiscatory, the court held that the ceilings          were not unconstitutional because  insurers were free to withdraw          from  the market  for workers'  compensation insurance  in Maine.          National Council on Compensation  Ins. v. Superintendent of Ins.,          ______________________________________    ______________________          CV-85-459  (Sup.  Ct.  May  14,  1987)  (Alexander,  J.),  appeal                                                                     ______          dismissed, 538  A.2d 759  (Me. 1988)  (dismissed as moot  because          _________          1987 legislation repealed 1985 Act).               In this lawsuit,  plaintiffs assert that defendants,  unable          to  achieve  their goals  legally,  resorted  to improper  means.          Plaintiffs  contend that  defendants  allegedly conspired  to fix                                         -4-          prices at a higher-than-lawful  rate and to conduct a  boycott of          the  Maine workers'  compensation  market  to induce  legislation          authorizing rate increases.  As early as 1986,  plaintiffs claim,          defendants   jointly   began   refusing   to   insure   employers          voluntarily,  requiring  them  to  obtain  workers'  compensation          coverage through  the "residual" or "involuntary"  system.  Every          insurer  authorized to  write workers'  compensation  policies in          Maine is required by state law to participate in the "involuntary          market" and,  thus, to share the  underwriting responsibility for          employers   otherwise   unable   to   obtain  coverage.5      The          conspirators  allegedly  increased  the  pressure  on  the  Maine          legislature to  act when, between  late summer and  October 1987,          virtually all workers' compensation insurers in Maine prepared to          withdraw from the state.               To  avert the  crisis  that  would  occur  if  all  workers'          compensation  insurers left,  Governor John  McKernan convened  a          special  session  of  the  legislature   devoted  exclusively  to          reviewing and reforming Maine's workers' compensation system.  In          short order, the legislature approved the "Workers'  Compensation          Rating Act" (deleting the word "competitive" that had been in the          title of the 1985 Act), Me. Rev. St. Ann. tit. 24-A,    2361-2374          (West 1990 and 1992 Supp.).  The 1987 Act removed the limitations          on rate increases contained in the 1985 Act.  It authorized  NCCI          to  act as agent for its member insurance companies by submitting                                        ____________________               5 Plaintiffs  seem to suggest  that the  shift of  employers          from  the voluntary  to the  involuntary market  was in  some way          detrimental to them, but they do not explain how.                                         -5-          joint  rate proposals  on their behalf  to the  Superintendent of          Insurance,  who  is  the  ultimate  decisionmaker  on  the  rates          insurers may charge.  Insurers are permitted, however, to deviate          below the rate approved by the Superintendent.               In 1988,  1989 and  1990, the insurers  collectively applied          for rates beyond the limits allowed  in the 1985 Act.  Each year,          the  Superintendent rejected  the requested  rate  increases, but          authorized lower increases  that still exceeded the 10%  caps set          by the 1985 legislation.  Plaintiffs contend that, as part of the          insurers'   continuing    price-fixing   conspiracy,   defendants          unlawfully agreed to charge only the maximum rates allowed by the          Superintendent.               Through this lawsuit, plaintiffs seek recovery of damages in          the amount of  the increased  premiums they have  paid since  the          1987 Act was passed  and defendants began charging higher  rates.          The district court concluded that this  relief was barred because          the alleged harm  was directly traceable to the  1987 legislation          and the approval of rate increases by the Maine Superintendent of          Insurance.    The court  relied  on  the well-established  Parker                                                                     ______          principle,  see  317  U.S.  at  350-52,  that  injury  caused  by                      ___          anticompetitive  state   action  is  not  compensable  under  the          antitrust  laws.   The  court further  believed that  defendants'          actions were protected  by the  Noerr doctrine, see  365 U.S.  at                                          _____           ___          136-40,  which  exempts from  antitrust liability  the collective          efforts of private actors to promote anticompetitive legislation.                                         -6-               Plaintiffs  argue on  appeal that  the district  court erred          because it  mistakenly attributed their asserted  injury to state          action.     They  contend  that  they  were  harmed  not  by  the          legislation  itself  but  by  defendants'  ongoing conspiracy  to          obtain  and  charge  higher  rates.    Parker,  they  insist,  is                                                 ______          therefore inapplicable.  They  further assert that Noerr provides                                                             _____          no  immunity   for  defendants  because  the  alleged  conspiracy          involved classic  anticompetitive economic  conduct --  a boycott          and  price-fixing  --  rather  than political  activity  such  as          lobbying or petitioning.               Defendants  respond that,  regardless of  the nature  of the          conspiracy,  which  they  admitted  solely for  purposes  of  the          summary judgment  proceedings, they  cannot  be assessed  damages          based  on the premium increases authorized by state law.  Because          that  is the  only  injury  for  which  plaintiffs  seek  relief,          defendants  maintain that  the district  court correctly  granted          summary judgment.                                         II.               The issues  we face on this  appeal are matters of  law, and          our standard of review is therefore de novo.  Liberty Mutual Ins.                                                        ___________________          Co. v.  Commercial Union  Ins. Co., 978  F.2d 750, 757  (1st Cir.          ___     __________________________          1992).  Although plaintiffs repeated at oral argument a complaint          earlier made to the  district court that they had  had inadequate          time to develop the  facts through discovery, we  do not see  how          additional investigation could have affected the summary judgment          decision.    Defendants  have  admitted, for  purposes  of  their                                         -7-          motion, that  they conspired to withdraw from  the Maine workers'          compensation  market.    Plaintiffs identify  no  other  possibly          discoverable  fact that  would  be material  to the  legal issues          before  us.  We note,  moreover, that they  have not appealed the          district court's denial of  their motion for additional discovery          time.               Plaintiffs  make a  related  claim that  the district  court          erred  in repeatedly failing  to construe their  complaint in the          light  most favorable  to  them, arguing  that  this standard  of          scrutiny -- normally applicable to motions to dismiss --  applies          here because defendants conceded the material factual allegations          of  the  complaint.    This  claim  also  is  irrelevant  to  our          disposition.   As  our analysis  in the  following  sections will          demonstrate,  plaintiffs' appeal  fails no  matter  how liberally          their allegations concerning defendants' conspiracy are construed          because the  specific relief they seek  is barred as a  matter of          law.                                           III.               We begin  our analysis with an  aspect of the case  that has          engendered  some confusion,  but apparently no  real disagreement          among the parties.   In the concluding paragraph of  its opinion,          the district  court stated that "[t]he  defendants' conspiracy to          press for legislation permitting them  to charge higher rates  --          which  in and of itself caused Plaintiffs  no injury -- is immune          under Noerr."  Opinion at 22.  The State of  Maine construed this                _____          statement  and similar  references  elsewhere in  the opinion  as                                         -8-          holding  that  private actors  lawfully  may  employ a  concerted          economic  boycott  to  influence  a   legislative  determination.          Disturbed  by this  specific  holding, the  State sought  and was          granted permission to file an amicus brief limited to urging that          we reverse the ruling.               We have  some doubt  that the  district  court intended  the          broad  statement attributed to it  by the State.   Regardless, at          this  point, the State's  position meets with  no opposition from          any  party.   Plaintiffs and  defendants all  agree that  private          actors who conduct  an economic boycott  violate the Sherman  Act          and may be held responsible  for direct marketplace injury caused                                           _________________________          by  the  boycott, even  if the  boycotters'  ultimate goal  is to          obtain  favorable  state action.    This view,  we  find, clearly          reflects Supreme Court precedent.               In  Noerr,  the  Supreme   Court  held  that  the  defendant                   _____          railroads could associate for  the purpose of waging  a publicity          campaign  designed to  secure legislative  action harmful  to the          truckers with whom they competed, without implicating the Sherman          Act prohibition against combinations in restraint of trade.   365          U.S. at 136-37.   The  Court observed that,  in a  representative          democracy, individuals  must have  the ability to  "freely inform          the  government  of  their wishes,"  id.  at  137,  and they  are                                               ___          permitted   to  do  so   even  if  their   motives  are  entirely          anticompetitive,  id. at  139-40.   Any  other conclusion  "would                            ___          impute to the  Sherman Act  a purpose to  regulate, not  business          activity, but political  activity, a purpose which would  have no                                         -9-          basis whatever in the  legislative history of  the Act."  Id.  at                                                                    ___          137.               Noerr does not  protect from  antitrust liability,  however,               _____          all actions designed to influence government.  The Court has made          ___          it clear  that certain  "combinations normally held  violative of          the Sherman  Act," id. at 136,  including price-fixing agreements                             ___          and  boycotts, are  not "outside the  coverage of  the .  . . Act          simply because  [their] objective was the  enactment of favorable          legislation," FTC v. Superior Court Trial Lawyers Ass'n, 493 U.S.                        ___    __________________________________          411, 424 (1990).  See also Allied Tube & Conduit  Corp. v. Indian                            ___ ____ ____________________________    ______          Head, Inc., 486 U.S. 492, 503-04 (1988);  Noerr, 365 U.S. at 136.          __________                                _____          In  other  words,  a  classic  economic  restraint  of  trade  is          actionable even if its primary purpose is political.               This limitation on the Noerr doctrine was  fully explored in                                      _____          Trial Lawyers, a  case closely  analogous to the  one before  us.          _____________          Trial  Lawyers  involved a  boycott organized  by members  of the          ______________          District  of Columbia criminal defense bar.  The attorneys agreed          not  to  accept  any  court appointments  to  represent  indigent          criminal defendants in order to force the District's City Council          to  raise the  hourly rate  of pay  for court-appointed  criminal          defense   work.    The  Supreme  Court   held  that  the  boycott          constituted  a "plain violation of  the antitrust laws," 493 U.S.          at 428, and that "[o]ur decision in Noerr in no way detracts from                                              _____          this  conclusion," id.  at  424.   Noerr,  the Court  emphasized,                             ___             _____          involved "mere  attempts to influence the  passage or enforcement          of laws,"  id. (quoting Noerr,  365 U.S. at  135), not an  actual                     ___          _____                                         -10-          restraint on price  and output, id. at 423.   The Noerr exception                                          __                _____          to  antitrust liability  thus  was inapplicable  to the  lawyers'          boycott.  Id. at 428.                    ___               The district court here  sought to distinguish Trial Lawyers                                                              _____________          from   the  case  before  it,  at  least  in  part,  because  the          anticompetitive  conspiracy there was directed at the government,          the  District   of  Columbia   City  Council,  as   a  commercial          participant.  Opinion  at 20-21.  The court appeared  to view the          government's role  as a purchaser  as significant to  the Supreme          Court's conclusion that Noerr immunity was unavailable:                                  _____               The  goal  of  the  trial lawyers'  conspiracy  was  to               inflict economic pain on  the government, forcing it to               pass  legislation.     In  this   case,  however,   the               Defendants' alleged conspiracy was not intended to harm               the government  as  a  commercial  participant  in  the               marketplace, only to prompt it  to pass anticompetitive               legislation.          Opinion at 21.   Consequently, the district court seemed  to say,          the conspiracy in this case was protected by Noerr.                                                       _____               Trial  Lawyers does  not establish  a "government-as-market-               ______________          participant" exception to Noerr.   What was significant about the                                    _____          concerted activity  there was  not  that the  government was  the          purchaser, but  that the defendants  had sought to  influence the          government through an economic boycott that directly affected the          marketplace by,  inter alia,  constricting the supply  of lawyers                           _____ ____          available to  represent indigent criminal defendants.   The Court          emphasized  that  Noerr   provides  immunity  when  the   alleged                            _____          restraint of trade is  imposed by the government as  the intended                                         _________________          consequence  of  the  defendants'  concerted  activity.    It  is          ___________                                         -11-          inapplicable when private actors  impose the challenged restraint          of  trade  through  a  boycott or  other  traditionally  unlawful          economic  measure, even  when  the boycott's  sole purpose  is to          instigate favorable governmental action.               Whether  the  boycotted purchaser  is  the  government or  a          private individual  is  irrelevant;  the  significant  factor  is          direct market effect.               The restraint  of trade that was  implemented while the               boycott  lasted  would  have  had  precisely  the  same               anticompetitive consequences during that period even if               no legislation had been enacted.  In Noerr, the desired                                                    _____               legislation  would  have created  the restraint  on the               truckers'  competition;  in  this  case  the  emergency               legislative response to  the boycott put an  end to the               restraint.          Trial Lawyers, 493 U.S. at 425.          _____________               Here,  too,  the defendants  allegedly employed  an economic          boycott that  beyond doubt  "`constituted a classic  restraint of          trade within the  meaning of Section 1 of the Sherman Act,'" id.,                                                                       ___          493 U.S. at  422 (quoting  Court of  Appeals, 856  F.2d 226,  234          (1988)).  Had  these or other plaintiffs sought injunctive relief          during  the boycott period, or  had they sought  damages based on          the boycott's direct market effects (such as reduced availability          of insurance or higher  prices resulting from reduced competition          during  the  boycott  period),  they  would  have  had  a  viable          antitrust  claim.   These  plaintiffs, however,  explicitly  have          disclaimed any request for relief based on injury occurring while                                         -12-          the boycott was in place, before the Maine Legislature passed the          1987 Act.6               In all likelihood, it was the plaintiffs' decision to pursue          only post-legislation damages that influenced the  district court          to state broadly that defendants were immune from liability.  The          court  correctly  recognized  that  a  conspiracy  to  press  for          legislation  permitting  defendants  to charge  higher  rates was          permissible unless it was implemented through an actual restraint          on trade.   Because  plaintiffs sought  no direct  market damages          from  the boycott, the court evidently treated the boycott not as          a  prohibited  restraint  of  trade  but  as  a  lobbying  effort          equivalent  to the  unethical  and deceptive  publicity  campaign          waged by the defendants in Noerr.                                     _____               In so  doing,  the court  may  have overstated  its  holding          unintentionally, permitting the inference drawn by the government          that the boycott itself was being held immune under Noerr.  As we                                                              _____          have  explained, such a holding would conflict with Supreme Court          caselaw.    Defendants'  boycott  plainly constituted  a  per  se                                                                    ___  __          violation  of  the Sherman  Act  even though  plaintiffs  seek no          marketplace damages resulting from it.                                         IV.               The  central  issue  before  us is  whether  plaintiffs  may          recover  damages based  on the  higher rates  they have  paid for          workers'  compensation  insurance  since  enactment of  the  1987                                        ____________________               6 We offer no view as to whether plaintiffs would  have been          able to prove damages from a constriction of supply or absence of          price competition resulting from the conspiracy.                                         -13-          legislation.   The district  court  ruled that  the state  action          doctrine  of Parker v. Brown, 317 U.S. 341, precluded such relief                       ______    _____          because  the   rate  increases  were  authorized   by  the  Maine          Legislature,   and  adopted  and   implemented  by   the  state's          Superintendent of Insurance.               In Parker, "[r]elying on  principles of federalism and state                  ______          sovereignty, [the Supreme  Court] held that  the Sherman Act  did          not apply to anticompetitive restraints imposed by the States `as          an  act  of  government.'"   City  of  Columbia  v. Omni  Outdoor                                       __________________     _____________          Advertising, Inc., 111 S. Ct. 1344, 1349 (1991) (quoting  Parker,          _________________                                         ______          317 U.S. at 352).   The district court believed that  the actions          of  the legislature  and  Superintendent of  Insurance superseded          defendants' previous conduct, rendering the rate hikes "an act of          government" immune  under Parker rather than  an injury inflicted                                    ______          by defendants' conspiracy.                Plaintiffs offer  two reasons  why the Parker  doctrine does                                                      ______          not bar the relief they seek.  First, in an argument more heavily          utilized  in the  district  court, plaintiffs  maintain that  the          defendants'  use of  unlawful  activity to  coerce the  favorable          legislation makes the Parker  doctrine inapplicable.  Because the                                ______          legislature unlawfully  was pressured  to act, they  contend, the          statute   may   not  be   used   to   insulate  defendants   from          responsibility.   Second, plaintiffs  argue that  it was  not the          legislation simply  permitting rate  hikes that harmed  them, but          the defendants'  longstanding  conspiracy to  charge the  maximum          possible rates.                                         -14-               Neither  of  these  arguments  is  persuasive.    The  first          contention,  that the defendants'  coercive conduct circumscribes          the effect of the legislature's actions, is directly contradicted          by  Supreme Court precedent.  In a  recent case, Omni, 111 S. Ct.                                                           ____          at 1352, the Court reaffirmed its previously stated determination          that  Parker  immunity  turns   on  who  imposed  the  challenged                ______                        ___          restraint, not why:                         ___               "[W]here the action complained of . . . was that of the               State  itself,  the  action  is  exempt  from antitrust               liability regardless  of the State's motives  in taking               the action."          Id.  at 1352-53 (quoting Hoover  v. Ronwin, 466  U.S. 558, 579-80          ___                      ______     ______          (1984)).               Omni rejected a proposed  conspiracy exception to the Parker               ____                                                  ______          doctrine  that  would   have  denied  immunity  when   government          employees were  involved as  conspirators with private  actors in          the challenged restraint of trade.  The Court considered possible          methods   for  defining  a  conspiracy  exception,  including  an          approach  that  would  make   Parker  inapplicable  only  if,  in                                        ______          connection with  the governmental action in  question, bribery or          some other  violation of state  or federal law  were established.          Id.  at 1353.  It  ultimately concluded that  any such limitation          ___          would  be,  at   best,  an  imprecise  way  to   determine  which          anticompetitive state  actions should be  exempted from antitrust          liability.               Such unlawful activity has no necessary relationship to               whether  the  governmental  action  is  in  the  public               interest.   A mayor is guilty of accepting a bribe even               if  he  would and  should  have  taken,  in the  public               interest, the same action for which the bribe was paid.                                         -15-               . . . To  use unlawful political influence as  the test               of legality of  state regulation undoubtedly vindicates               (in a rather blunt  way) principles of good government.               But the statute  we are construing  is not directed  to               that end.          Id.          ___               The  holding in  Omni  fully embraces  plaintiffs'  tendered                                ____          coercion  exception.   Allegations  of  coercion,  like those  of          conspiracy,   implicate  only   the  off-limits   issue   of  the          legislators' motivation.   Omni  reaffirms that the  state action                                     ____          protection provided by Parker is not vulnerable to such claims.                                 ______                Plaintiffs' second  theory bears  down more closely  on the          1987  legislation.   Because the  statute does  not mandate  that                                                              _______          insurers charge the maximum  rates allowed by the Superintendent,          but  merely eliminated the caps imposed by the repealed 1985 Act,          plaintiffs maintain  that  the higher  rates by  which they  were          damaged  resulted  from  defendants'  conspiracy  to  charge  the          maximum  rates  and not  from the  legislature's adoption  of the          statute.  We detect two problems with this argument.               First, the  manner in which plaintiffs  asserted this theory          before the district court differed in a subtle, yet  significant,          way  from  the  approach  adopted  on  appeal.    Throughout  the          proceedings before the district court, plaintiffs emphasized that          they alleged injury from a conspiracy initiated in the summer and          fall of 1987 to violate the 1985 legislation, which promoted open                                      ____          competition    in   the    workers'    compensation   market.                   Plaintiffs  do  not claim  that  they  were injured  by               actions  mandated by  the  1987  legislation.   Indeed,               plaintiffs allege  not only that  the conspiracy  began               before the 1987 legislation  was even enacted, but that                                         -16-               the  objective   of  the   conspiracy  was   that  very                    _________               enactment.   Plaintiffs in  fact allege that  they were               injured by  defendants' conspiracy to violate  the 1985                                                                  ____               legislation.    It is  therefore  the 1985  legislation               against which state action claims must be tested.          Plaintiffs' Memorandum in Opposition to Defendants'  Joint Motion          for Summary Judgment, at 18 n.11 (emphasis in original).               At oral argument on  the summary judgment motion, plaintiffs          again  asserted that it had  been unlawful for  the defendants to          conspire to increase prices  while the 1985 legislation governed.          See  App.  at  720.    When  the  district  court  asked why  the          ___          defendants' actions were not protected in light of their  "acting          within the framework set  up by the legislature in  the enactment          of rates,"  plaintiffs' counsel responded  that "one needs  to be          clear on the time frame."  Id. at 729.  He continued:                                     ___               At the time the  conspiracy was hatched and effectuated               in summer and fall of 1987, the policy of the  State of               Maine  was  open competition  in  workers'  comp.   The               policy of the State of Maine was, "Go compete with each               other."                    And these defendants  had a private agreement,  in               effect, not to compete and to boycott consumers and the               state.          Id.          ___               Thus, the argument to the  district court focused on conduct          leading  up to the 1987 act:  the defendants unlawfully conspired          to  charge higher rates, and obtained permission to do so through          unlawful  means,  making  the  new  rates  wholly   a  result  of          defendants' unlawful conduct.   Moreover, the plaintiffs  argued,          even though the specific  harm for which they sought  damages did          not  occur until  after  the law  was  changed and  higher  rates                                         -17-          authorized, defendants  had to be held responsible  so that their          past  illegal  conduct  would  not  be  immunized  retroactively.          Failing to hold them liable, plaintiffs argued,               would  lead to the  anomalous result  that unsuccessful                                                          ____________               boycotts  (i.e.  boycotts  which  do  not  successfully                          ____               coerce   governmental   action)   would  be   antitrust               violations, but that successful boycotts (i.e. boycotts                                    __________           ____               to which government succumbs in order to avoid chaos or               disaster) would be immunized.          Plaintiffs'  Memorandum  in  Opposition,  at  35-36 (emphasis  in          original) (footnote omitted).7               The argument on appeal  unquestionably adds a new dimension.          Plaintiffs  now contend  that,  after passage  of  the 1987  act,          defendants again violated antitrust  laws by conspiring to refuse          to  sell  below   the  new  maximum  rates  established   by  the          Superintendent of Insurance.   That agreement is  not entitled to          state action immunity, plaintiffs suggest, because  the provision          in  the 1987  Act  allowing independent  ratesetting demonstrates          that  state  policy  still  favors  competition.    Consequently,          plaintiffs contend that  defendants should be held liable for the          rate increases.8                                        ____________________               7  As we  made clear in  Section III,  the response  to this          argument is that unlawful boycotts with direct marketplace impact          will result  in accountability for the  market injury, regardless                                                  ______          of their success in inducing governmental action.               8 We note that some  portions of plaintiffs' appellate brief          retain the focus on the 1985 legislation:               Plaintiffs   do   not    challenge   the    Defendants'               "participation  in  ratesetting  proceedings"  in  1988               after  the 1987 legislation  was enacted  repealing the               1985 Competitive Rating Act.  What Plaintiffs challenge               is  Defendants' conspiracy begun in 1986 and 1987, at a                               __________               time   when  Maine  law  specifically  prohibited  such                                         -18-               This link between plaintiffs'  conspiracy allegation and the          1987  Act never  was offered  to the  district court;  indeed, as          noted above, plaintiffs  expressly disclaimed  the new  statute's          relevance to the  Parker issue.  The conspiracy achieved success,                            ______          plaintiffs  asserted, when  the  State enacted  the law  allowing          higher  premiums.    See  Memorandum  in  Opposition  to  Summary                               ___          Judgment, at 2-3 (quoted in  District Court Opinion, at 3).   Led          by these  arguments, the district court  never considered whether          the defendants could be held responsible for the rate increases -          - despite authorization  of those rates by  the state --  if they          had conspired not to deviate below the maximum rate.               Whether plaintiffs sufficiently preserved this argument need          not unduly detain us, however, because the theory is in any event          unavailing.   When the  legislature enacted the  1987 statute, it          did not simply eliminate the ceiling on the permissible rates for          workers' compensation insurance, but it also  moved away from the          state's previous pro-competitive policy toward  ratesetting.  The          1987 Act  provided for joint rate  filings9 and, in  our view, it                                        ____________________               conspiracies, to  constrict supply, to fix  prices, and               to boycott consumers in order  to coerce the removal of                                    __________________________________               the existing price ceiling.               __________________________          Plaintiffs' Brief at 31 (additional emphasis added).               9 It did so  somewhat indirectly through repeal of  the 1985          Act, which meant that the  joint ratemaking provisions that  then          existed  for  all lines  of insurance  sold  in Maine  again were          applicable  to workers'  compensation  insurance.   In 1989,  the          legislature revised  the general  insurance ratemaking system  to          encourage  competition, leaving  the joint  ratemaking provisions          applicable only to the  workers' compensation providers.  Compare                     ____                                           _______          Me. Rev. Stat. Ann. tit.  24-A,   2309 (West 1990) with  Me. Rev.                                                             ____          Stat. Ann. tit. 24-A,   2309 (West Supp. 1992).                                         -19-          must  be construed  as  implicitly condoning  an agreement  among          insurers to  charge the  rates they  jointly propose,  subject to          approval  by the  Superintendent.   When  insurers work  together          within  a state regulatory system to advocate rates that they all          presumably  believe  are  appropriate  for  workers' compensation          insurance, we  fail to see  how it could be  illegal price fixing          for them also subsequently  to agree to charge the  rates allowed          by the state, particularly when the approved rates fall below the          jointly proposed rates.               At a  minimum, it  must be lawful  for insurers to  agree to          charge  the approved  rate where,  as here,  the Superintendent's          obligation is to establish rates that are "[j]ust and reasonable"          and "[b]ased only  on a  just and reasonable  profit."  Me.  Rev.          Stat.  Ann. tit. 24-A,    2363 (7)(A)(1),  (2).   Thus, while the          statute  stipulates  that  these rates  set  the  upper  limit on          permissible charges, id.  at   2362,  the expectation clearly  is                               ___          that  the Superintendent's rates are the ones that generally will          be appropriate  for, and  thus used  by, all insurers.   In  this          context,  the legislature  evidently  viewed the  sort of  "price          fixing" alleged by plaintiffs as  benign; notably absent from the          1987 statute is a provision contained in the 1985 Act prohibiting          insurers from agreeing  "to adhere  to or  use a  rate or  rating          plan," id. at   2347 (2) (1985) (repealed).                 ___               Plaintiffs  rely  on the  provision  allowing  downward rate          deviation to  support their claim that  defendants' conspiracy to          charge  a uniform  rate was  unauthorized and,  consequently, not                                         -20-          immunized  under Parker.  But  the fact that  insurers may charge                           ______                                ___          less than the approved  rate is of little significance when it is          juxtaposed with  the uniform approach  to ratemaking that  is the          overriding characteristic of  the reformed system.   On its  own,          the  permissive provision  certainly does  not establish  a state          policy favoring  competitive  pricing.    Moreover,  the  Supreme          Court,  in  Southern Motor  Carriers  Rate  Conference v.  United                      __________________________________________     ______          States,  471 U.S. 48 (1985), explicitly held that Parker immunity          ______                                            ______          is  available to private parties  acting pursuant to  a regime of          collective ratemaking that  is authorized, though not  compelled,          by the state.               Southern Motor  Carriers involved  a challenge to  the joint               ________________________          activities of motor  common carrier rate  bureaus in four  states          where carriers were permitted to  agree on rate proposals  before          their  submission  to  state agencies.    In  the  course of  its          decision, the Court reaffirmed the two-pronged  test set forth in          California Retail Liquor Dealers  Ass'n v. Midcal Aluminum, Inc.,          _______________________________________    _____________________          445   U.S.  97,   105   (1980),  for   determining  whether   the          anticompetitive  conduct  of  private  parties  within  a   state          regulatory scheme is shielded from the antitrust laws:               First, the challenged restraint  must be "`one  clearly               articulated  and  affirmatively   expressed  as   state               policy.'"   Second, the  State must  supervise actively               any private anticompetitive conduct.          471 U.S. at 57 (citations omitted).               The  justices  then  considered  whether the  actions  of  a          private party  can be attributed  to a clearly  articulated state          policy, within the meaning of the Midcal test's first prong, even                                            ______                                         -21-          if  the  state does  not  compel  the challenged  anticompetitive          activity.  Id. at  59-60.  The Court  observed that a  compulsion                     ___          requirement would reduce the range of alternatives available to a          state  that  wished to  regulate  a  given  industry  --  thereby          negatively affecting  principles of federalism  -- while  perhaps          also causing greater restraints on trade -- thereby impairing the                       _______          goal of the antitrust  laws to ensure "unfettered  competition in          the marketplace," id. at 61.  Declining to "believe that Congress                            ___          intended  to resolve  conflicts between  two competing  interests          [federalism  and  competition]   by  impairing  both  more   than          necesssary," id., the  Court concluded that "a  state policy that                       ___          expressly permits,  but does not  compel, anticompetitive conduct                    _______          may  be `clearly articulated' within  the meaning of Midcal," id.                                                               ______   ___          (emphasis in original).               In  this  case,  it  is manifestly  clear  that  defendants'          ratemaking activities meet both  prongs of the Midcal test.   The                                                         ______          new scheme was  adopted by the legislature, fulfilling  the state          policy prong of the test, and the Superintendent's involvement in          reviewing    and   modifying   the   insurers'   proposed   rates          unquestionably  meets  prong two's  requirement  of active  state          supervision.    Indeed,  plaintiffs  expressly  acknowledge  that          Midcal is  satisfied with respect to  the ratemaking proceedings.          ______          See  Reply Brief,  at  19 n.15.    Plaintiffs instead  hammer  on          ___          defendants'   "converting   the   results  of   that   ratemaking          proceeding,  i.e. a schedule of maximum or ceiling prices, into a                       ____               _______          private agreement to  uniformly charge the maximum price,  and to          _______                                         -22-          refuse  to deal at  prices below that  level."  Id.  (emphasis in                                                          ___          original).               This argument misfires because it fails to take into account          the  changed landscape.  Even  if defendants violated the Sherman          Act in  the late summer and  early fall of 1987  by conspiring to          raise the maximum prices they could charge beyond those permitted          by  the 1985  Act, it  does not  necessarily  follow that  it was          unlawful  for  them to  agree  to  charge  the rate  subsequently          approved  by the Superintendent pursuant  to the 1987  Act.  Once          the legislature  acted in November 1987,  defendants' conduct had          to be assessed in  light of the new state policy  and procedures.          As  we   have  discussed,  the  1987   Act  endorsed  cooperative          ratesetting and anticipated that most, if not all, insurers would          charge  the newly  authorized  rates.   Accordingly, the  damages          sought  by  plaintiffs  --  the differential  between  the  rates          allowed  under  the  1985  Act  and  the  new  rates  charged  by          defendants under the 1987 Act  -- must be viewed as a  product of          state action.   The district court  therefore correctly concluded          that, under Parker,  defendants may not  be held accountable  for                      ______          this claimed injury.                                         V.                In summary,  we hold  that the  economic  boycott and  price          fixing conspiracy allegedly conducted by defendants in the summer          and  early fall  of 1987  constituted a per  se violation  of the                                                  ___  __                                         -23-          Sherman  Act,  and  did  not  fall  within  the  Noerr doctrine's                                                           _____          protection for  concerted activity  designed to  elicit favorable          legislation.   But plaintiffs have not  sought damages for direct          marketplace injury inflicted by that conspiracy.               The monetary damages alleged by plaintiffs --  the amount of          increase in their workers' compensation insurance rates under the          1987 statutory scheme allegedly coerced by  defendants -- are not          recoverable  from the  insurers.   Because  the state  authorized          collective  ratemaking  and  closely supervised  the  setting  of          higher  rates,  any  agreement  among defendants  to  charge  the          maximum  authorized  rates  is  permissible,  and defendants  are          immune from liability for the increase under the Parker doctrine.                                                           ______               Affirmed.                ________                                         -24-
