MR. CHIEF JUSTICE BURGER delivered the opinion of the Court.
We granted certiorari to decide whether a minimum-fee schedule for lawyers published by the Fairfax County Bar Association and enforced by the Virginia State Bar violates § 1 of the Sherman Act, 26 Stat. 209, as amended, 15 U. S. C. § 1. The Court of Appeals held that, although the fee schedule and enforcement mechanism substantially restrained competition among lawyers, publication of the schedule by the County Bar was outside the scope of the Act because the practice of law is not "trade or commerce," and enforcement of the schedule by the State Bar was exempt from the Sherman Act as state action as defined in Parker v. Brown, 317 U.S. 341 (1943).
In 1971 petitioners, husband and wife, contracted to buy a home in Fairfax County, Va. The financing agency required them to secure title insurance; this required a title examination, and only a member of the Virginia State Bar could legally perform that service.
The fee schedule the lawyers referred to is a list of recommended minimum prices for common legal services. Respondent Fairfax County Bar Association published the fee schedule although, as a purely voluntary association of attorneys, the County Bar has no formal power to enforce it. Enforcement has been provided by respondent Virginia State Bar which is the administrative agency
Because petitioners could not find a lawyer willing to charge a fee lower than the schedule dictated, they had their title examined by the lawyer they had first contacted. They then brought this class action against the State Bar and the County Bar
After a trial solely on the issue of liability the District Court held that the minimum-fee schedule violated the Sherman Act.
Both respondents argued that their actions were also exempt from the Sherman Act as state action. Parker v. Brown, supra. The District Court agreed that the Virginia State Bar was exempt under that doctrine because it is an administrative agency of the Virginia Supreme Court, and more important, because its "minor role in this matter . . . derived from the judicial and `legislative command of the State and was not intended to operate or become effective without that command.' " The County Bar, on the other hand, is a private organization and was under no compulsion to adopt the fee schedule recommended by the State Bar. Since the County Bar chose its own course of conduct the District Court held that the antitrust laws "remain in full force and effect as to it." The court enjoined the fee schedule, 15 U. S. C. § 26, and set the case down for trial to ascertain damages. 15 U. S. C. § 15.
The Court of Appeals reversed as to liability. 497 F.2d 1 (CA4 1974). Despite its conclusion that it "is abundantly clear from the record before us that the fee schedule and the enforcement mechanism supporting it act as a substantial restraint upon competition among attorneys practicing in Fairfax County," id., at 13, the Court of Appeals held the State Bar immune under Parker v. Brown, supra, and held the County Bar immune because the practice of law is not "trade or commerce" under the Sherman Act. There has long been judicial recognition of a limited exclusion of "learned professions" from the scope of the antitrust laws, the court said; that exclusion is based upon the special form
Alternatively, the Court of Appeals held that respondents' activities did not have sufficient effect on interstate commerce to support Sherman Act jurisdiction. Petitioners had argued that the fee schedule restrained the business of financing and insuring home mortgages by inflating a component part of the total cost of housing, but the court concluded that a title examination is generally a local service, and even where it is part of a transaction which crosses state lines its effect on commerce is only "incidental," and does not justify federal regulation.
We granted certiorari, 419 U.S. 963 (1974), and are thus confronted for the first time with the question of whether the Sherman Act applies to services performed by attorneys in examining titles in connection with financing the purchase of real estate.
Our inquiry can be divided into four steps: did respondents engage in price fixing? If so, are their activities in interstate commerce or do they affect interstate commerce? If so, are the activities exempt from the Sherman Act because they involve a "learned profession?" If not, are the activities "state action" within the meaning of Parker v. Brown, 317 U.S. 341 (1943), and therefore exempt from the Sherman Act?
The County Bar argues that because the fee schedule is merely advisory, the schedule and its enforcement mechanism do not constitute price fixing. Its purpose, the argument continues, is only to provide legitimate information to aid member lawyers in complying with Virginia professional regulations. Moreover, the County Bar contends that in practice the schedule has not had the effect of producing fixed fees. The facts found by the trier belie these contentions, and nothing in the record suggests these findings lack support.
A purely advisory fee schedule issued to provide guidelines, or an exchange of price information without a showing of an actual restraint on trade, would present us with a different question, e. g., American Column Co. v. United States, 257 U.S. 377 (1921); Maple Flooring Assn. v. United States, 268 U.S. 563, 580 (1925). But see United States v. National Assn. of Real Estate Boards, 339 U.S. 485, 488-489, 495 (1950). The record here, however, reveals a situation quite different from what would occur under a purely advisory fee schedule. Here a fixed, rigid price floor arose from respondents' activities: every lawyer who responded to petitioners' inquiries adhered to the fee schedule, and no lawyer asked for additional information in order to set an individualized fee. The price information disseminated did not concern past standards, cf. Cement Mfrs. Protective Assn. v. United States, 268 U.S. 588 (1925), but rather minimum fees to be charged in future transactions, and those minimum rates were increased over time. The fee schedule was enforced through the prospect of professional discipline from the State Bar, and the desire of attorneys to comply with announced professional norms, see generally American Column Co., supra, at 411;
Moreover, in terms of restraining competition and harming consumers like petitioners the price-fixing activities found here are unusually damaging. A title examination is indispensable in the process of financing a real estate purchase, and since only an attorney licensed to practice in Virginia may legally examine a title, see n. 1, supra, consumers could not turn to alternative sources for the necessary service. All attorneys, of course, were practicing under the constraint of the fee schedule. See generally United States v. Container Corp., supra, at 337. The County Bar makes much of the fact that it is a voluntary organization; however, the ethical opinions issued by the State Bar provide that any lawyer, whether or not a member of his county bar association,
The County Bar argues, as the Court of Appeals held, that any effect on interstate commerce caused by the fee schedule's restraint on legal services was incidental and remote. In its view the legal services, which are performed wholly intrastate, are essentially local in nature and therefore a restraint with respect to them can never substantially affect interstate commerce. Further, the County Bar maintains, there was no showing here that the fee schedule and its enforcement mechanism increased fees, and that even if they did there was no showing that such an increase deterred any prospective homeowner from buying in Fairfax County.
These arguments misconceive the nature of the transactions actions at issue and the place legal services play in those transactions. As the District Court found,
See United States v. Yellow Cab Co., 332 U.S. 218, 228-229 (1947).
Given the substantial volume of commerce involved,
The fact that there was no showing that home buyers were discouraged by the challenged activities does not mean that interstate commerce was not affected. Otherwise, the magnitude of the effect would control, and our cases have shown that, once an effect is shown, no specific magnitude need be proved. E. g., United States v. McKesson & Robbins, Inc., 351 U.S. 305, 310 (1956). Nor was it necessary for petitioners to prove that the fee schedule raised fees. Petitioners clearly proved that the fee schedule fixed fees and thus "deprive[d] purchasers or consumers of the advantages which they derive from free competition." Apex Hosiery Co. v. Leader, 310 U.S. 469, 501 (1940). See United States v. Socony-Vacuum Oil Co., 310 U.S. 150 (1940).
Where, as a matter of law or practical necessity, legal services are an integral part of an interstate transaction, a restraint on those services may substantially affect commerce for Sherman Act purposes. Of course, there may be legal services that involve interstate commerce in other fashions, just as there may be legal services that
The County Bar argues that Congress never intended to include the learned professions within the terms "trade or commerce" in § 1 of the Sherman Act,
In arguing that learned professions are not "trade or commerce" the County Bar seeks a total exclusion from antitrust regulation. Whether state regulation is active or dormant, real or theoretical, lawyers would be able to adopt anticompetitive practices with impunity. We cannot find support for the proposition that Congress intended any such sweeping exclusion. The nature of an occupation, standing alone, does not provide sanctuary from the Sherman Act, Associated Press v. United States, 326 U.S. 1, 7 (1945), nor is the public-service aspect of professional practice controlling in determining whether § 1 includes professions. United States v. National Assn. of Real Estate Boards, 339 U. S., at 489. Congress intended to strike as broadly as it could in § 1 of the Sherman Act, and to read into it so wide an exemption as that urged on us would be at odds with that purpose.
The language of § 1 of the Sherman Act, of course, contains no exception. "Language more comprehensive is difficult to conceive." United States v. South-Eastern Underwriters Assn., 322 U.S. 533, 553 (1944). And our cases have repeatedly established that there is a heavy presumption against implicit exemptions, United States v. Philadelphia National Bank, 374 U.S. 321, 350-351 (1963); California v. FPC, 369 U.S. 482, 485 (1962). Indeed, our cases have specifically included the sale of services within § 1. E. g., American Medical Assn. v. United States, 317 U.S. 519 (1943); Radovich v. National Football League, 352 U.S. 445 (1957). Whatever else it may be, the examination of a land title is a service; the exchange of such a service for money is "commerce"
In the modern world it cannot be denied that the activities of lawyers play an important part in commercial intercourse, and that anticompetitive activities by lawyers may exert a restraint on commerce.
In Parker v. Brown, 317 U.S. 341 (1943), the Court held that an anticompetitive marketing program which "derived its authority and its efficacy from the legislative command of the state" was not a violation of the Sherman Act because the Act was intended to regulate private practices and not to prohibit a State from imposing a restraint as an act of government. Id., at 350-352; Olsen v. Smith, 195 U.S. 332, 344-345 (1904). Respondent State Bar and respondent County Bar both seek to avail themselves of this so-called state-action exemption.
The threshold inquiry in determining if an anticompetitive activity is state action of the type the Sherman Act was not meant to proscribe is whether the activity is required by the State acting as sovereign. Parker v. Brown, 317 U. S., at 350-352; Continental Co. v. Union Carbide, 370 U.S. 690, 706-707 (1962). Here we need not inquire further into the state-action question because it cannot fairly be said that the State of Virginia through its Supreme Court Rules required the anticompetitive activities of either respondent. Respondents have pointed to no Virginia statute requiring their activities; state law simply does not refer to fees leaving regulation of the profession to the Virginia Supreme Court; although the Supreme Court's ethical codes mention advisory fee schedules they do not direct either respondent to supply them, or require the type of price floor which arose from respondents' activities.
The fact that the State Bar is a state agency for some limited purposes does not create an antitrust shield that allows it to foster anticompetitive practices for the benefit of its members.
We recognize that the States have a compelling interest in the practice of professions within their boundaries, and that as part of their power to protect the public health, safety, and other valid interests they have broad power to establish standards for licensing practitioners and regulating the practice of professions. We also recognize that in some instances the State may decide that "forms of competition usual in the business world may be demoralizing to the ethical standards of a profession." United States v. Oregon State Medical Society, 343 U.S. 326, 336 (1952). See also Semler v. Oregon State Board of Dental Examiners, 294 U.S. 608, 611-613 (1935). The interest of the States in regulating lawyers is especially great since lawyers are essential to the primary governmental function of administering justice, and have historically been "officers of the courts." See Sperry v. Florida ex rel. Florida Bar, 373 U.S. 379, 383 (1963); Cohen v. Hurley, 366 U.S. 117, 123-124 (1961); Law Students Research Council v. Wadmond, 401 U.S. 154,
The judgment of the Court of Appeals is reversed and the case is remanded to that court with orders to remand to the District Court for further proceedings consistent with this opinion.
Reversed and remanded.
MR. JUSTICE POWELL took no part in the consideration or decision of this case.
Briefs of amici curiae urging affirmance were filed by James D. Fellers and H. Blair White for the American Bar Assn.; by Richard C. McFarlain for the National Organization of Bar Counsel; by Leroy Jeffers for the State Bar of Texas; by Warren H. Resh for the State Bar of Wisconsin; by E. Robert Wallach and Walter J. Robinson for the Bar Association of San Francisco; and by Owen Rall and Peter M. Sfikas for the American Dental Assn.
"The Supreme Court of Appeals may, from time to time, prescribe, adopt, promulgate and amend rules and regulations organizing and governing the association known as the Virginia State Bar, composed of the attorneys at law of this State, to act as an administrative agency of the Court for the purpose of investigating and reporting the violation of such rules and regulations as are adopted by the Court under this article to a court of competent jurisdiction for such proceedings as may be necessary, and requiring all persons practicing law in this State to be members thereof in good standing."
" `purely for his own advancement, intentionally and regularly bills less than the customary charges of the bar for similar services . . . [in order to] increase his business with resulting personal gain, it becomes a form of solicitation contrary to Canon 27 and also a violation of Canon 7, which forbids the efforts of one lawyer to encroach upon the employment of another.' " App. 30.
In 1969 the State Bar published a second fee-schedule report that, as it candidly stated, "reflect[ed] a general scaling up of fees for legal services." The report again stated that no local bar association was bound by its recommendations; however, respondent County Bar again quickly moved to publish an updated minimum-fee schedule, and generally to raise fees. The new schedule stated that the fees were not mandatory, but tempered that by referring again to Opinion 98. This time the schedule also stated that lawyers should feel free to charge more than the recommended fees; and to avoid condemnation of higher fees charged by some lawyers, it cautioned County Bar members that "to . . . publicly criticize lawyers who charge more than the suggested fees herein might in itself be evidence of solicitation . . . ."
"[I]t is clear from the record that all or nearly all of the [County Bar] members charged fees equal to or exceeding the fees set forth in the schedule for title examinations and other services involving real estate." 497 F.2d 1, 12 (CA4 1974).
" `A significant reason for the inability of [petitioners] to obtain legal services . . . for less than the fee set forth in the Minimum Fee Schedule . . . was the operation of the minimum fee schedule system.' " Id., at 4.
"It is abundantly clear from the record before us that the fee schedule and the enforcement mechanism supporting it act as a substantial restraint upon competition among attorneys practicing in Fairfax County." Id., at 13.
" `The lawyers have slowly, but surely, been committing economic suicide as a profession.' " Virginia State Bar, Minimum Fee Schedule Report 1962, p. 3, App. 20.
"Rules and regulations defining practice of law and prescribing codes of ethics and disciplinary procedure.—The Supreme Court of Appeals may, from time to time, prescribe, adopt, promulgate and amend rules and regulations:
"(a) Defining the practice of law.
"(b) Prescribing a code of ethics governing the professional conduct of attorneys at law and a code of judicial ethics.
"(c) Prescribing procedure for disciplining, suspending, and disbarring attorneys at law."
In addition, the Supreme Court of Virginia, has inherent power to regulate the practice of law in that State. Button v. Day, 204 Va. 547, 132 S.E.2d 292 (1963). See Lathrop v. Donohue, 367 U.S. 820 (1961).
"[i]n determining the customary charges of the Bar for similar services, it is proper for a lawyer to consider a schedule of minimum fees adopted by a Bar Association, but no lawyer should permit himself to be controlled thereby or to follow it as his sole guide in determining the amount of his fee." Rules for Integration of the Virginia State Bar, 171 Va. xvii, xxiii. (Emphasis supplied.) In 1970 the Virginia Supreme Court amended the 1938 rules in part, and adopted the Code of Professional Responsibility, effective January 1, 1971. 211 Va. 295 (1970). Certain of its provisions also dealt with the fee-setting procedure. In EC 2-18 lawyers were told again that fees vary according to many factors, but that "[s]uggested fee schedules and economic reports of state and local bar associations provide some guidance on the subject of reasonable fees." 211 Va., at 302. In DR 2-106 (B), which detailed eight factors that should be considered in avoiding an excessive fee, one of the factors was "[t]he fee customarily charged in the locality for similar legal services." DR 2-106 (B) (3). 211 Va., at 313.