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August 23, 2003

22 Comments

1. 

   I am not very knowledgeable about antitrust law. Does it make a difference to your analysis that the state in assigning cases appears to exercise all the price-fixing characteristics of a monopoly? Can a buyer act “in restraint of trade” just as much as a seller does?

   Comment by Bill Day — August 23, 2003 @ 11:03 pm

2. 

   I am not very knowledgeable about antitrust law. Does it make a difference to your analysis that the state in assigning cases appears to exercise all the price-fixing characteristics of a monopoly? Can a buyer act “in restraint of trade” just as much as a seller does?

   Comment by Bill Day — August 23, 2003 @ 11:03 pm

3. 

   Good question, Bill.    The Supreme Court made it clear Supreme Court decision in FTC v. Superior Court Trial Lawyers Association that the Government’s position as a large buyer of services cannot be used to justify a group boycott by the assigned counsel, who were sellers of the services. 
   The Supreme Court adopted the reasoning of the Appeals Court below:

   They are individual business people supplying the same service to a customer, and as such may be capable, through a concerted restriction on output, of forcing that customer to pay a higher price for their service.   That the D. C. government, like the buyers of many other services and commodities, prefers to offer a uniform price to all potential suppliers does not alter in any way the anti-competitive potential of the petitioners’ boycott. The antitrust laws do not protect only purchasers who negotiate each transaction individually, instead of posting a price at which they will trade with all who come forward. [493 U.S. 411, 423]  

   The SCTLA Court also adopted the FTC’s analysis:

   “`[T]he city’s purchase of CJA legal services for indigents is based on competition. The price offered by the city is based on competition, because the city must attract a sufficient number of individual lawyers to meet its needs at that price. The city competes with other purchasers of legal services to obtain an adequate supply of lawyers, and the city’s offering price is an element of that competition. Indeed, an acknowledgement of this element of competition is implicit in the respondents’ argument that an increase in the CJA fee was `necessary to attract, and retain, competent lawyers.’ If the offering price had not attracted a sufficient supply of qualified lawyers willing to accept CJA assignments for the city to fulfill its constitutional obligation, then presumably the city would have increased its offering price or otherwise sought to make its offer more attractive. In fact, however, the city’s offering price before the boycott apparently was sufficient to obtain the amount and quality of legal services that it needed.'” 272 U.S. App. D.C., at 278, 856 F.2d, at 232.

   Also, as a matter of economics, Massachusetts is nowhere near a monopsonist when it comes to buying legal services.  The total amount it spends for the assigned counsel services is a rather small fraction of the market for legal services in the State.  Just as independent doctors cannot use a group boycott to get a large HMO to increase its fees, lawyers in separate practices cannot conspire together to force a buyer to increase its fees.  See my posting at http://blogs.law.harvard.edu/ethicalesq/2003/08/17#194 for a fuller antitrust treatment. 

   Comment by David Giacalone — August 24, 2003 @ 12:42 am

4. 

   Good question, Bill.    The Supreme Court made it clear Supreme Court decision in FTC v. Superior Court Trial Lawyers Association that the Government’s position as a large buyer of services cannot be used to justify a group boycott by the assigned counsel, who were sellers of the services. 
   The Supreme Court adopted the reasoning of the Appeals Court below:

   They are individual business people supplying the same service to a customer, and as such may be capable, through a concerted restriction on output, of forcing that customer to pay a higher price for their service.   That the D. C. government, like the buyers of many other services and commodities, prefers to offer a uniform price to all potential suppliers does not alter in any way the anti-competitive potential of the petitioners’ boycott. The antitrust laws do not protect only purchasers who negotiate each transaction individually, instead of posting a price at which they will trade with all who come forward. [493 U.S. 411, 423]  

   The SCTLA Court also adopted the FTC’s analysis:

   “`[T]he city’s purchase of CJA legal services for indigents is based on competition. The price offered by the city is based on competition, because the city must attract a sufficient number of individual lawyers to meet its needs at that price. The city competes with other purchasers of legal services to obtain an adequate supply of lawyers, and the city’s offering price is an element of that competition. Indeed, an acknowledgement of this element of competition is implicit in the respondents’ argument that an increase in the CJA fee was `necessary to attract, and retain, competent lawyers.’ If the offering price had not attracted a sufficient supply of qualified lawyers willing to accept CJA assignments for the city to fulfill its constitutional obligation, then presumably the city would have increased its offering price or otherwise sought to make its offer more attractive. In fact, however, the city’s offering price before the boycott apparently was sufficient to obtain the amount and quality of legal services that it needed.'” 272 U.S. App. D.C., at 278, 856 F.2d, at 232.

   Also, as a matter of economics, Massachusetts is nowhere near a monopsonist when it comes to buying legal services.  The total amount it spends for the assigned counsel services is a rather small fraction of the market for legal services in the State.  Just as independent doctors cannot use a group boycott to get a large HMO to increase its fees, lawyers in separate practices cannot conspire together to force a buyer to increase its fees.  See my posting at http://blogs.law.harvard.edu/ethicalesq/2003/08/17#194 for a fuller antitrust treatment. 

   Comment by David Giacalone — August 24, 2003 @ 12:42 am

5. 

   Dear David:

   First, I suggeest that you review, in full, the background material available at http://www.bristolcpcs.org

   Then I suggest you review my listing in Martindale-Hubbel, and review the case Care and Protection of Vivian.

   If you are willing to do those background activities, in part to review my credentials, we can have a civil discourse.

   As a practical matter, the number of attorneys willing to work at the not-quite break even rate offered for all appointed work except murder cases, is declining each year, the numbers of cases per attorney is increasing, and the years of experience of the attorneys who take the cases is also declining.

   What this says is that the poor get second class service.

   In a way, I am swimming upstream. I already had ten years of practice and several years of family law experience and several reported decisions before I took my first appointment.

   In order to “break even” I use a home office, no staff (that is right — I do all my own word processing; a typing speed left over from working my way through law school as a transcriber makes this possible), and limit the percentage of appointments in my practice load.

   In fact, independent contractors who take legal work are treated worse then all other indpendent contractors by the Commonwealth of Massachusetts; check out G.L. 211D SEc. 12. NO other vendor is penalized on “timeliness” or denied interest when the state pays late.

   Further, by his veto, Romney has guarenteed that the arm of the state which is responsible for processing and authorizing payment – CPCS – will run out of funds by April 1, 2003 next year; CPCS has responsibility without authority, unlike most executive branch agencies.

   Still more – when a judge’s lobby faxes me an appoint ment to represent a child who is a legal orphan (their parents rights have been terminated, and their adoptive parents have returned them to the state), typically I represent these children for a MINIMUM of six years, and often ten or more years as the only source of independent protection against abuse by the state these kids have.

   A few judges know I feel so strongly about this that I seem to be the appointee of choice. I don’t take these cases out of “market forces”.

   Guess what. I take them because I actually care.

   Why should I be financially abused and treated as a second class citizen because of this? My appellate practice generates an average rate of $150.00 per hour. There are only so many hours in a day.

   Therefore, I lose $111 for every appointment I take to protect a child from the callous disregard of the state.

   I have found children the state lost.

   I have made sure that pacements worked, advocated for proper edudcation, etc. etc. etc.

   I have also had to refinance my home 5 times.

   Frankly, your argument sounds like the argument of a clueless rich white guy.

   I suggest you read an excellent book titled the Children of Wilder.

   The impact of the social experiement inaugerated under Clinto with the so called “Adoption and Safe Families Act” (ASFA) is nothing short of fascism, and as bad as the so-called Indian Child Placement Act. Creation of legal orphans will haunt this society as surely as AIDS.

   Deborah Sirotkin Butler, Esq.
   AmberPaw@aol.com
   781-641-9939 (office phone)
   19 Overlook Road
   Arlington, MA 02474

   CAll me anytime. I am NOT anonymous and I am not going away in the push for due process and equal rights for the poor and working class.

   Comment by Deborah Sirotkin Butler, Esq. — August 25, 2003 @ 8:41 pm

6. 

   Dear David:

   First, I suggeest that you review, in full, the background material available at http://www.bristolcpcs.org

   Then I suggest you review my listing in Martindale-Hubbel, and review the case Care and Protection of Vivian.

   If you are willing to do those background activities, in part to review my credentials, we can have a civil discourse.

   As a practical matter, the number of attorneys willing to work at the not-quite break even rate offered for all appointed work except murder cases, is declining each year, the numbers of cases per attorney is increasing, and the years of experience of the attorneys who take the cases is also declining.

   What this says is that the poor get second class service.

   In a way, I am swimming upstream. I already had ten years of practice and several years of family law experience and several reported decisions before I took my first appointment.

   In order to “break even” I use a home office, no staff (that is right — I do all my own word processing; a typing speed left over from working my way through law school as a transcriber makes this possible), and limit the percentage of appointments in my practice load.

   In fact, independent contractors who take legal work are treated worse then all other indpendent contractors by the Commonwealth of Massachusetts; check out G.L. 211D SEc. 12. NO other vendor is penalized on “timeliness” or denied interest when the state pays late.

   Further, by his veto, Romney has guarenteed that the arm of the state which is responsible for processing and authorizing payment – CPCS – will run out of funds by April 1, 2003 next year; CPCS has responsibility without authority, unlike most executive branch agencies.

   Still more – when a judge’s lobby faxes me an appoint ment to represent a child who is a legal orphan (their parents rights have been terminated, and their adoptive parents have returned them to the state), typically I represent these children for a MINIMUM of six years, and often ten or more years as the only source of independent protection against abuse by the state these kids have.

   A few judges know I feel so strongly about this that I seem to be the appointee of choice. I don’t take these cases out of “market forces”.

   Guess what. I take them because I actually care.

   Why should I be financially abused and treated as a second class citizen because of this? My appellate practice generates an average rate of $150.00 per hour. There are only so many hours in a day.

   Therefore, I lose $111 for every appointment I take to protect a child from the callous disregard of the state.

   I have found children the state lost.

   I have made sure that pacements worked, advocated for proper edudcation, etc. etc. etc.

   I have also had to refinance my home 5 times.

   Frankly, your argument sounds like the argument of a clueless rich white guy.

   I suggest you read an excellent book titled the Children of Wilder.

   The impact of the social experiement inaugerated under Clinto with the so called “Adoption and Safe Families Act” (ASFA) is nothing short of fascism, and as bad as the so-called Indian Child Placement Act. Creation of legal orphans will haunt this society as surely as AIDS.

   Deborah Sirotkin Butler, Esq.
   AmberPaw@aol.com
   781-641-9939 (office phone)
   19 Overlook Road
   Arlington, MA 02474

   CAll me anytime. I am NOT anonymous and I am not going away in the push for due process and equal rights for the poor and working class.

   Comment by Deborah Sirotkin Butler, Esq. — August 25, 2003 @ 8:41 pm

7. 

   I wish to correct two typos:

   CPCS will run out of funds, due to Romney’s vetos, approximately 4/1/04 (not 03), pretty obviously —

   And I forgo about $111.00 per HOUR when I take an appointment. I only take 1 in 4 of the private folk who want to hire me these days, due to my extreme concern about the impact of ASFA on DSS policy and the discrimination I see visited upon citizens of the commonwealth merely because they have trouble affording housing, and cannot afford private counsel…or happen to be legal orphans created by the state.

   Do feel free to call me at 781-641-9939 or to mail me at 19 Overlook Road, Arlington 02474 or to fax me at 781-641-3769. I do not know who your anonymous “straw man” was but I am while vulnerable to typos, most definitely NOT anonymous.

   Comment by Deborah Sirotkin Butler, Esq. — August 25, 2003 @ 9:18 pm

8. 

   I wish to correct two typos:

   CPCS will run out of funds, due to Romney’s vetos, approximately 4/1/04 (not 03), pretty obviously —

   And I forgo about $111.00 per HOUR when I take an appointment. I only take 1 in 4 of the private folk who want to hire me these days, due to my extreme concern about the impact of ASFA on DSS policy and the discrimination I see visited upon citizens of the commonwealth merely because they have trouble affording housing, and cannot afford private counsel…or happen to be legal orphans created by the state.

   Do feel free to call me at 781-641-9939 or to mail me at 19 Overlook Road, Arlington 02474 or to fax me at 781-641-3769. I do not know who your anonymous “straw man” was but I am while vulnerable to typos, most definitely NOT anonymous.

   Comment by Deborah Sirotkin Butler, Esq. — August 25, 2003 @ 9:18 pm

9. 

   Deborah, Thank you for taking the time to write at length.  I can tell that you care, and I hope we can have a civil conversation.   As I have said many times on this site, I strongly favor a significant increase in the assigned counsel rates in Massachusetts.  In fact, I have written twice to the Boston Globe, but my letters were not published.  This morning, I wrote to Gov. Romney asking him to find a way to increase bar advocate fees.   Where we differ is whether any group of lawyers can decide they are above the law and engage in a group boycott.   I say no.
   If it were not for this disagreement, I think we’d have a lot in common to talk about, especially our work for children.  I do not want to have a contest as to who is the bigger martyr, but before you dismiss me as a “clueless rich white guy,” please consider the following and perhaps let your colleagues know that I am not writing from an ivory tower: 

   [Note from the Editor:  I have decided to delete most of the personal history part of my response to Deborah from this thread, and instead send it to her directly.   After reading it again, I felt that it sounded too much like self-congratulation.  The most relevant portion notes, as I have said elsewhere, that (after a decade doing antitrust law in D.C.) I moved to NYS in 1988, in order to represent children in Family Court, and to establish a divorce mediation practice.  For the last decade of my practice (prior to retiring for health reasons), the vast majority of my work was as an assigned counsel for children, called a Law Guardian.  We worked for $25 out of court (where most of the hours were spent) and $40 in court. . . . . For the last 3 years of my practice, all of my work was as a court-assigned law guardian.  It was a choice, my choice.” 

   I have read a lot of the material on the Bristol County website, and have communicated by email with the “webmaster” Tom Workman several times at length.  Lawyers who take assigned work for the indigent from the Government do so knowing the risks and hassles, and knowing their own values and goals.  Each lawyer has to make the decision for himself or herself whether to contine taking cases.    They can lobby together, and educate the public together, but they cannot use the coercive tool of a group boycott.   
   Thanks again for writing and for caring about your clients.  s/David     

   Comment by David Giacalone — August 25, 2003 @ 9:36 pm

10. 

    Deborah, Thank you for taking the time to write at length.  I can tell that you care, and I hope we can have a civil conversation.   As I have said many times on this site, I strongly favor a significant increase in the assigned counsel rates in Massachusetts.  In fact, I have written twice to the Boston Globe, but my letters were not published.  This morning, I wrote to Gov. Romney asking him to find a way to increase bar advocate fees.   Where we differ is whether any group of lawyers can decide they are above the law and engage in a group boycott.   I say no.
    If it were not for this disagreement, I think we’d have a lot in common to talk about, especially our work for children.  I do not want to have a contest as to who is the bigger martyr, but before you dismiss me as a “clueless rich white guy,” please consider the following and perhaps let your colleagues know that I am not writing from an ivory tower: 

    [Note from the Editor:  I have decided to delete most of the personal history part of my response to Deborah from this thread, and instead send it to her directly.   After reading it again, I felt that it sounded too much like self-congratulation.  The most relevant portion notes, as I have said elsewhere, that (after a decade doing antitrust law in D.C.) I moved to NYS in 1988, in order to represent children in Family Court, and to establish a divorce mediation practice.  For the last decade of my practice (prior to retiring for health reasons), the vast majority of my work was as an assigned counsel for children, called a Law Guardian.  We worked for $25 out of court (where most of the hours were spent) and $40 in court. . . . . For the last 3 years of my practice, all of my work was as a court-assigned law guardian.  It was a choice, my choice.” 

    I have read a lot of the material on the Bristol County website, and have communicated by email with the “webmaster” Tom Workman several times at length.  Lawyers who take assigned work for the indigent from the Government do so knowing the risks and hassles, and knowing their own values and goals.  Each lawyer has to make the decision for himself or herself whether to contine taking cases.    They can lobby together, and educate the public together, but they cannot use the coercive tool of a group boycott.   
    Thanks again for writing and for caring about your clients.  s/David     

    Comment by David Giacalone — August 25, 2003 @ 9:36 pm

11. 

    David states in his most recent update:

    “The State is surely offering no more than it believes is necessary to obtain the desired amount of services.”

    This is just not the case. The state behaves just like any classical monopolist would behave. You first capture a significant enough piece of the marketplace so that you can unilaterally set rates, without regard for any free market influence. Then you exercise that market power to set rates in a fashion that could not exist in a free market environment.

    If you practice criminal law in the Commonwealth of Massachusetts, especially in the major felony cases, you have no choice but to capitulate to the state’s terms.

    The evil of a monopoly is that even if a specific person “opts out” (eg changes careers), the next participant is subjected to the same “illegal” monopolistic influence (I put “illegal” in quotes, because the state government seems to be immune from prosecution in these matters).

    The complaints of attorneys standing up (as they recently asked that the law be enforced, and that they be paid AS THE LAW REQUIRES within 30 days). I cannot for the life of me see how attorneys might be criticized for not extending credit (with no interest to be paid them, another little “special” provision of the way they are treated, different from every other “vendor”), when the law requires that they be paid, and states in plain language that attorneys are entitled to be paid in 30 days (MGL ch 211D sec 12).

    Like most successful monopolists, the first thing you do once you establish the monopoly is protect it, by making sure that no one can challenge you. The Commonwealth of Massachusetts has structured the whole system so that they get the same control over the attorneys as they would have if they were employees (the IRS factors would likely determine bar advocates to be employees, not contractors, IMHO), while offering no benefits and no ability to contract with the state.

    Like most monopolists, the terms are “take it or leave it”, and any contractual terms are adhesion terms in the most draconian form.

    Comment by Thomas Workman — August 26, 2003 @ 4:33 pm

12. 

    David states in his most recent update:

    “The State is surely offering no more than it believes is necessary to obtain the desired amount of services.”

    This is just not the case. The state behaves just like any classical monopolist would behave. You first capture a significant enough piece of the marketplace so that you can unilaterally set rates, without regard for any free market influence. Then you exercise that market power to set rates in a fashion that could not exist in a free market environment.

    If you practice criminal law in the Commonwealth of Massachusetts, especially in the major felony cases, you have no choice but to capitulate to the state’s terms.

    The evil of a monopoly is that even if a specific person “opts out” (eg changes careers), the next participant is subjected to the same “illegal” monopolistic influence (I put “illegal” in quotes, because the state government seems to be immune from prosecution in these matters).

    The complaints of attorneys standing up (as they recently asked that the law be enforced, and that they be paid AS THE LAW REQUIRES within 30 days). I cannot for the life of me see how attorneys might be criticized for not extending credit (with no interest to be paid them, another little “special” provision of the way they are treated, different from every other “vendor”), when the law requires that they be paid, and states in plain language that attorneys are entitled to be paid in 30 days (MGL ch 211D sec 12).

    Like most successful monopolists, the first thing you do once you establish the monopoly is protect it, by making sure that no one can challenge you. The Commonwealth of Massachusetts has structured the whole system so that they get the same control over the attorneys as they would have if they were employees (the IRS factors would likely determine bar advocates to be employees, not contractors, IMHO), while offering no benefits and no ability to contract with the state.

    Like most monopolists, the terms are “take it or leave it”, and any contractual terms are adhesion terms in the most draconian form.

    Comment by Thomas Workman — August 26, 2003 @ 4:33 pm

13. 

    Tom, I again thank you for taking the time to exchange views.  You are, however, making arguments that go to the equities and politics of the fee dispute, but not to the legality of the group boycott under the antitrust law. 
    (1) Whether you like it or not, under the antitrust law, a State can set whatever price it wants when it buys goods or services.   As you suggest, it has “sovereign immunity” under the antitrust law (It can even immunize private activity under the “State Action” doctirne when it clearly sets policy in an area and regulates it). 
    (2) You can call the State a monopolist or monopsonist, but under antitrust and economic analysis, it in reality — as the Supreme Court noted in SCTLA — has a relatively small part of the total market for legal services in the state.  You do not get to segment the market into legal specialties and subspecialties. 
    (3)  We both know that there is a great difference between assigned counsel and “employees.”   Having worked as both a government lawyer and as assigned counsel, I know the difference.   I’d love to see some legal precedent for your assertion about the IRS position.    In NYS, it is the local assigned counsel panel that is the primary opponent whenever the State or County tries to open a public defender office instead of relying on independent practitioners.  They want the work, even at the supposedly “below market” fees.   
    Are you ready to become a Massachusetts civil servant?   Until you are an employee of the state, you need to follow the antitrust law when joining into activities with your competitors.   You cite the 30-day invoice payment rule, but the fact that a buyer is breaking a law does not justify a group boycott against it by the sellers of the service.  Each seller has to decide whether to continue to do business with the buyer.  It happens everyday in the real world (firms choose to look elsewhere for their customers; they write off bad accounts; they offer different services, etc.).  Lawyers do not get a special immunity from the dynamics of supply and demand.  You complain that Massachusetts has too much buying power, but how big would the market for your services even be, if indigents had to pay for their own lawyers?  What would the fee level be for criminal defense counsel if 90% of their potential clients were indigents?  How many lawyers would have to switch to other specialties?
    You can say that is “unfair,” but every other profession and industry must abide by those rules and market forces.  Even the broadest industry exemption — the insurance exemption in the McCarran-Ferguson Act — specifically retains antitrust authority over boycotts, refusals to deal, and coercive conduct.   The Congress and the Courts have no sympathy for such conduct.
    (4) It is not unlawful to be a monopoly seller or buyer, and it never has been.  Talking about draconian terms of adhesion goes to the fairness of the contract, and on that issue you need to join together to lobby, not boycott, for better terms.   If the public truly wants to see higher fees for assigned counsel, the Legislature should be amenable. 
    I feel strongly about this, Tom, because I do not like any profession or industry acting as if it is above the law — even laws they do not like or that seem unfair.  I especially expect my profession and my colleagues to follow the law. 
     

    Comment by David Giacalone — August 26, 2003 @ 6:32 pm

14. 

    Tom, I again thank you for taking the time to exchange views.  You are, however, making arguments that go to the equities and politics of the fee dispute, but not to the legality of the group boycott under the antitrust law. 
    (1) Whether you like it or not, under the antitrust law, a State can set whatever price it wants when it buys goods or services.   As you suggest, it has “sovereign immunity” under the antitrust law (It can even immunize private activity under the “State Action” doctirne when it clearly sets policy in an area and regulates it). 
    (2) You can call the State a monopolist or monopsonist, but under antitrust and economic analysis, it in reality — as the Supreme Court noted in SCTLA — has a relatively small part of the total market for legal services in the state.  You do not get to segment the market into legal specialties and subspecialties. 
    (3)  We both know that there is a great difference between assigned counsel and “employees.”   Having worked as both a government lawyer and as assigned counsel, I know the difference.   I’d love to see some legal precedent for your assertion about the IRS position.    In NYS, it is the local assigned counsel panel that is the primary opponent whenever the State or County tries to open a public defender office instead of relying on independent practitioners.  They want the work, even at the supposedly “below market” fees.   
    Are you ready to become a Massachusetts civil servant?   Until you are an employee of the state, you need to follow the antitrust law when joining into activities with your competitors.   You cite the 30-day invoice payment rule, but the fact that a buyer is breaking a law does not justify a group boycott against it by the sellers of the service.  Each seller has to decide whether to continue to do business with the buyer.  It happens everyday in the real world (firms choose to look elsewhere for their customers; they write off bad accounts; they offer different services, etc.).  Lawyers do not get a special immunity from the dynamics of supply and demand.  You complain that Massachusetts has too much buying power, but how big would the market for your services even be, if indigents had to pay for their own lawyers?  What would the fee level be for criminal defense counsel if 90% of their potential clients were indigents?  How many lawyers would have to switch to other specialties?
    You can say that is “unfair,” but every other profession and industry must abide by those rules and market forces.  Even the broadest industry exemption — the insurance exemption in the McCarran-Ferguson Act — specifically retains antitrust authority over boycotts, refusals to deal, and coercive conduct.   The Congress and the Courts have no sympathy for such conduct.
    (4) It is not unlawful to be a monopoly seller or buyer, and it never has been.  Talking about draconian terms of adhesion goes to the fairness of the contract, and on that issue you need to join together to lobby, not boycott, for better terms.   If the public truly wants to see higher fees for assigned counsel, the Legislature should be amenable. 
    I feel strongly about this, Tom, because I do not like any profession or industry acting as if it is above the law — even laws they do not like or that seem unfair.  I especially expect my profession and my colleagues to follow the law. 
     

    Comment by David Giacalone — August 26, 2003 @ 6:32 pm

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