Regulation of Business – Sherman Act – Concerted Refusals to Deal Not Illegal Per Se
The government sought an injunction restraining the members of an organization of independent insurance agents responsible for writing nearly 80 percent of the fire insurance in the Cleveland, Ohio, area from carrying out association regulations. Adherence to the rules was challenged as a conspiracy in restraint of trade and an attempt to monopolize in violation of sections 1 and 2 of the Sherman Act. The regulations were designed to prevent the members from representing (1) mutual insurance companies, (2) branch office companies which contribute to the agents a portion of their overhead expense and, (3) insurance companies which operate branch offices and solicit or sell direct to the insured. The restrictions were enforced by threat of membership forfeiture. These rules, the government pleaded, amounted to concerted refusals to deal, i.e., boycotts, and as such were alleged to be illegal per se. The defendant contended that “the restraints imposed are reasonable in the light of the circumstances in which they operate.” On motion by both parties for summary judgment, held, the rule of reason must be applied to determine the legality of concerted refusals to deal. United States v. Insurance Board of Cleveland, (N.D. Ohio 1956) 144 F. Supp. 684.