Hoover v. Ronwin

Citation80 L.Ed.2d 590,466 U.S. 558,104 S.Ct. 1989
Decision Date14 May 1984
Docket NumberNo. 82-1474,82-1474
PartiesCharles R. HOOVER et al., Petitioners v. Edward RONWIN
CourtUnited States Supreme Court
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, 63 S.Ct. 307, 87 L.Ed. 315. 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 legisla- ture for purposes of the state-action doctrine. Bates v. State Bar of Arizona, 433 U.S. 350, 97 S.Ct. 2691, 53 L.Ed.2d 810. 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.

Charles R. Hoover, pro se, for petitioners.

Edward Ronwin, for respondent pro se.

Lawrence G. Wallace, Washington, D.C., for the U.S. as amicus curiae, by special leave of Court.

Justice POWELL delivered the opinion of the Court.

This case presents the question whether the state-action doctrine of immunity from actions under the Sherman Act applies to the grading of bar examinations by the Committee appointed by, and according to the Rules of, the Arizona Supreme Court.

I

Respondent Ronwin was an unsuccessful candidate for admission to the Bar of Arizona in 1974. Petitioners were four members of the Arizona Supreme Court's Committee on Examinations and Admissions (Committee).1 The Arizona Constitution vests authority in the court to determine who should be admitted to practice law in the State. Hunt v. Maricopa County Employees Merit System Comm'n, 127 Ariz. 259, 261-262, 619 P.2d 1036, 1038-1039 (1980); see also Ariz.Rev.Stat.Ann. § 32-275 (1976). Pursuant to that authority, the Arizona Supreme Court established the Committee to examine and recommend applicants for admission to the Arizona Bar.2 The Arizona Supreme Court Rules, adopted by the court and in effect in 1974,3 delegated certain responsibilities to the Committee while reserving to the court the ultimate authority to grant or deny admission. The Rules provided that the Committee "shall examine applicants" on subjects enumerated in the Rules and "recommend to th[e] court for admission to practice" applicants found to have the requisite qualifications. Rule 28(a) (1973).4 They also authorized the Committee to "utilize such grading or scoring system as the Committee deems appropriate in its discretion," 5 and to use the Multi-State Bar Examination. Rule 28(c) VII A (1973), as amended, 110 Ariz. xxvii, xxxii (1974). Even with respect to "grading or scoring," the court did not delegate final authority to the Committee. The Rules directed the Committee to file the formula it intended to use in grading the examination with the court 30 days prior to giving the examination.6 Also, after grading the examination and compiling the list of those applicants whom it con- sidered qualified to practice law in the State, the Committee was directed to submit its recommendations to the court for final action. Rule 28(a). Under the Rules and Arizona case law, only the court had authority to admit or deny admission.7 Finally, a rejected applicant was entitled to seek individualized review of an adverse recommendation of the Committee by filing a petition directly with the court.8 The Rules required the Committee to file a response to such a petition and called for a prompt and fair decision on the applicant's claims by the Arizona Supreme Court.

Ronwin took the Arizona bar examination in February 1974.9 He failed to pass, the Committee recommended to the Arizona Supreme Court that it deny him admission to the Bar, and the court accepted the recommendation. Ronwin petitioned the court to review the manner in which the Committee conducted and graded the examination. In particular, he alleged that the Committee had failed to provide him with model answers to the examination, had failed to file its grading formula with the court within the time period specified in the Rules, had applied a "draconian" pass-fail process, had used a grading formula that measured group, rather than individual, performance, had failed to test applicants on an area of the law on which the Rules required testing, and had conducted the examination in a "pressure-cooker atmosphere." He further alleged that the Committee's conduct constituted an abuse of discretion, deprived him of due process and equal protection, and violated the Sherman Act.10 The court denied his petition and two subsequent petitions for rehearing.11 Ronwin then sought review of the Arizona Supreme Court's action in this Court. We denied his petition for certiorari. 419 U.S. 967, 95 S.Ct. 231, 42 L.Ed.2d 183 (1974).

Some four years later, in March 1978, Ronwin filed this action in the United States District Court for the District of Arizona. Petitioners were named as defendants in the suit in their capacity as individual members of the Committee.12 Ronwin renewed his complaint that petitioners had conspired to restrain trade in violation of § 1 of the Sherman Act, 26 Stat. 209, 15 U.S.C. § 1, by "artificially reducing the numbers of competing attorneys in the State of Arizona." 13 The gist of Ronwin's argument is that the Committee of which petitioners constituted a majority had set the grading scale on the February examination with reference to the number of new attorneys they thought desirable, rather than with reference to some "suitable" level of competence. Petitioners moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief could be granted, and under Federal Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction. In particular, petitioners alleged that, acting as a Committee, they were immune from antitrust liability under Parker v. Brown, 317...

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