MARJORIE WEBSTER JR. COL., v. Middle States Ass'n of C. & SS

• Decision Date: 30 June 1970
• Docket Number: No. 23351.,23351.
• Citation: 432 F.2d 650
• Parties: MARJORIE WEBSTER JUNIOR COLLEGE, INC., a corporation v. MIDDLE STATES ASSOCIATION OF COLLEGES AND SECONDARDY SCHOOLS, INC., a corporation, Appellant.
• Court: U.S. Court of Appeals — District of Columbia Circuit

432 F.2d 650 (1970)

MARJORIE WEBSTER JUNIOR COLLEGE, INC., a corporation v. MIDDLE STATES ASSOCIATION OF COLLEGES AND SECONDARDY SCHOOLS, INC., a corporation, Appellant.

No. 23351.

United States Court of Appeals, District of Columbia Circuit.

Argued December 17, 1969.

Decided June 30, 1970.

Certiorari Denied December 21, 1970.

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Mr. Herbert Plaut, New York City, filed a brief on behalf of Pace College, as amicus curiae urging reversal.

Mr. F. William Andres, Boston, Mass., filed a brief on behalf of New England Association of Colleges and Secondary Schools, Inc., as amicus curiae urging reversal.

Mr. Peter P. Walsh, Jr., Trenton, N. J., filed a brief on behalf of The Association of Independent Colleges and Universities in New Jersey, as amicus curiae urging reversal.

Mr. Harry V. Lamon, Jr., Atlanta, Ga., filed a brief on behalf of Southern Association of Colleges and Schools, Inc., as amicus curiae urging reversal.

Mr. L. Dow Nichol, Jr., Chicago, Ill., filed a brief on behalf of North Central Association of Colleges and Secondary Schools, as amicus curiae urging reversal.

Mr. Robert A. Mills, Harrisburg, Pa., filed a brief on behalf of Pennsylvania Association of Colleges and Universities, as amicus curiae urging reversal.

Mr. William F. Hennessey, Seattle, Wash., filed a brief on behalf of Northwest Association of Secondary and Higher Schools, Inc., as amicus curiae urging reversal.

Mr. Herman I. Orentlicher, Washington, D. C., entered an appearance for American Association of University Professors, as amicus curiae urging reversal.

Mr. George M. Courts Oulahan, Washington, D. C., with whom Messrs. Charles S. Rhyne, Benjamin P. Lamberton, III, and Robert H. Culp, Rhyne & Rhyne, Washington, D. C., were on the brief, for appellant.

Mr. C. William Tayler, Washington, D. C., with whom Mr. Edwin R. Schneider, Jr., Washington, D. C., was on the brief, for appellee.

Messrs. John P. Tracey and Peter L. Wolff, Washington, D. C., filed a brief on behalf of the American Bar Association and the Association of American Law Schools, as amici curiae urging reversal.

Mr. John Merrill Scott, Sebastopol, Cal., filed a brief on behalf of Western Association of Schools and Colleges, as amicus curiae urging reversal.

Before BAZELON, Chief Judge, and LEVENTHAL and MacKINNON, Circuit Judges.

Certiorari Denied December 21, 1970. See 91 S.Ct. 367.

BAZELON, Chief Judge:

Middle States Association of Colleges and Secondary Schools, Inc., is a voluntary nonprofit educational corporation, the successor to an unincorporated association of the same name established in 1887. Its general purposes are to aid and encourage the development of quality in secondary schools and institutions of higher education located within its geographical domain (New York, New Jersey, Pennsylvania, Delaware, Maryland, and the District of Columbia) or outside of the continental United States. Chief among its activities is that of accrediting member institutions and applicants for membership.¹ Marjorie Webster Junior College, Inc., is a proprietary junior college for women located in the District of Columbia. In 1966, it applied to Middle States for accreditation. Relying upon a policy statement of the Federation of Regional Accrediting Commissions of Higher Education,² and upon its own past practice,³ Middle States refused to consider Marjorie Webster for accreditation because the latter was not "a nonprofit organization with a governing board representing the public interest." Following this refusal, Marjorie Webster brought suit to compel its consideration for accreditation without regard to its proprietary character. The District Court found Middle States' refusal to consider proprietary institutions of higher education for accreditation a violation of § 3 of the Sherman Act⁴ and of the developing common law regarding exclusion from membership in private associations; in addition, it found that Middle States' activities in the field of accreditation were sufficiently under the aegis of the Federal Government as to make applicable the limitations of the Due Process Clause; and that to deny accreditation to all proprietary institutions solely by reason of their proprietary character was arbitrary and unreasonable, in violation of the Fifth Amendment. Concluding, finally, that continued denial of consideration for accreditation would result in irreparable injury to Marjorie Webster, the District Court enjoined Middle States from denying Marjorie Webster accreditation solely because of its proprietary character, and ordered it to accredit Marjorie Webster if it should otherwise qualify for accreditation under Middle States' standards.⁵ On the application of Middle States, we stayed the District Court's order pending our determination of this appeal. For the reasons hereafter set forth, we conclude that the Sherman Act is not applicable to Middle States' conduct as indicated by the present record; that the circumstances are not such as to warrant judicial interference with the accreditation and membership policies of Middle States; and that, assuming the Due Process Clause to be applicable, Marjorie Webster has not sustained its burden of showing the irrationality of the policy in question as applied to bar consideration of Marjorie Webster for accreditation. Accordingly, we reverse the judgment of the District Court.

I.

Appellee strongly urges, and the court below concluded,⁶ that once it be determined that appellee is engaging in "trade," restraint of that "trade" by appellant's conduct is subject to the limitations of the Sherman Act.⁷ If this were the ordinary case of a trade association alleged to have transgressed the bounds of reasonable regulation designed to mitigate the evils afflicting a particular industry,⁸ this reasoning might be conclusive.⁹ But in our view, the character of the defendant association, and the nature of the activities that it regulates, require a finer analysis.

Despite the broad wording of the Sherman Act,¹⁰ it has long been settled that not every form of combination or conspiracy that restrains trade falls within its ambit.¹¹ For the language of the Act, although broad, is also vague; and in consequence of that vagueness, "perhaps not uncalculated, the courts have been left to give content to the statute, and in the performance of that function it is appropriate that courts should interpret its word in light of its legislative history and of the particular evils at which the legislation was aimed."¹² The Act was a product of

the era of "trusts" and of "combinations" of businesses and of capital organized and directed to control of the market by suppression of competition in the marketing of goods and services, the monopolistic tendency of which had become a matter of public concern.

Apex Hosiery Co. v. Leader, 310 U.S. 469, 492-493, 60 S.Ct. 982, 84 L.Ed. 1311 (1940). "The Court in Apex recognized that the Act is aimed primarily at combinations having commercial objectives and is applied only to a very limited extent to organizations, like labor unions, which normally have other objectives."¹³

That appellant's objectives, both in its formation and in the development and application of the restriction here at issue, are not commercial is not in dispute.¹⁴ Of course, when a given activity falls within the scope of the Sherman Act, a lack of predatory intent is not conclusive on the question of its legality.¹⁵ But the proscriptions of the Sherman Act were "tailored * * * for the business world,"¹⁶ not for the noncommercial aspects of the liberal arts and the learned professions.¹⁷ In these contexts, an incidental restraint of trade, absent an intent or purpose to affect the commercial aspects of the profession,¹⁸ is not sufficient to warrant application of the antitrust laws.

We are fortified in this conclusion by the historic reluctance of Congress to exercise control in educational matters.¹⁹ We need not suggest that this reluctance is of such depth as to immunize any conceivable activity of appellant from regulation under the antitrust laws.²⁰ It is possible to conceive of restrictions on eligibility for accreditation that could have little other than a commercial motive; and as such, antitrust policy would presumably be applicable.²¹ Absent such motives, however, the process of accreditation is an activity distinct from the sphere of commerce; it goes rather to the heart of the concept of education itself.²² We do not believe that Congress intended this concept to be molded by the policies underlying the Sherman Act.

II.

The increasing importance of private associations in the affairs of individuals and organizations has led to substantial expansion of judicial control over "The Internal Affairs of Associations not for Profit."²³ Where membership in, or certification by, such an association is a virtual prerequisite to the practice of a given profession, courts have scrutinized the standards and procedures employed by the association notwithstanding their recognition of the fact that professional societies possess a specialized competence in evaluating the qualifications of an individual to engage in professional activities.²⁴ The standards set must be reasonable, applied with an even hand, and not in conflict with the public policy of the jurisdiction.²⁵ Even where less than complete exclusion from practice is involved, deprivation of substantial economic or professional advantages will often be sufficient to warrant judicial action.²⁶

The extent of judicial power to regulate the standards set by private professional associations, however, must be related to the necessity for intervention.²⁷ Particularly when, as here, judicial action is predicated not upon a legislative text but upon the developing doctrines of the common law, general propositions must not be allowed to obscure the specific relevant facts of each individual case. In particular, the extent to which...