must be examined through the rule of reason filter in order to fathom whether it constitutes a violation of section one of the Sherman Act.
V. ABC's SECURITY PLAN, THE McCARRAN-FERGUSON ACT AND THE RULE OF REASON
No different approach is mandated with respect to the insurance, as compared with the retirement, component of ABC's multi-employer benefit plans. The proponents of the present Motion for Reconsideration have presented insufficient data to permit a judgment whether or not the McCarran-Ferguson Act
exemption from the antitrust laws is applicable in this case. The specific terms of the insurance contract with Connecticut General Insurance Company are not clear. There has been no mention of what, if any, state regulations are applicable to the voluntary employee's beneficiary association established by plaintiffs. Therefore, it is impossible for this Court to determine whether ABC's Security Plan is exempt from the application of the antitrust laws under the McCarran-Ferguson Act.
However, in Travelers Insurance Co. v. Blue Cross of Western Pennsylvania, 481 F.2d 80 (3d Cir. 1973) (hereafter "Travelers"), the Court of Appeals for the Third Circuit clearly states that even if the McCarran-Ferguson exemption were inapplicable to a given insurance scheme and, thus, that plan was subject to scrutiny under the antitrust laws, it is possible for the insurance program to pass muster under the Sherman Act. See Travelers, supra, 481 F.2d at 84.
In considering the antitrust consequences of a given insurance plan (in Travelers the court evaluated a nonprofit hospitalization plan), the court did not apply a per se rule under section one of the Sherman Act. The court found that since the Blue Cross plan did not involve a vertical restraint of trade "which has achieved garden variety status" under section one of the Sherman Act, then the plan must be reviewed in order to determine whether any restraint on trade which the insurance scheme imposes is "reasonable." Travelers, supra, 481 F.2d at 84. Similarly, on its face, ABC's insurance plan does not involve a horizontal restraint of trade which has achieved "garden variety status" under section one of the Sherman Act. Id. ; See Jacobi, supra, 377 F. Supp. at 95-96. Hence, the antitrust consequences of ABC's insurance fund must be determined in light of the rule of reason.
VI. ABC's INSURANCE AND RETIREMENT PLANS WITHSTAND SCRUTINY UNDER THE ANTITRUST LAWS
There is no allegation that ABC's insurance plan violates the antitrust law in any respect other than it has been established by a multi-employer group in the absence of collective bargaining. There is no assertion that ABC's Security Plan has done "more than conduct its [insurance] business as every rational enterprise does, i.e. get the best deal possible" for the employee participants. Travelers, supra, 481 F.2d at 84. Finally, there is no averment that ABC or the insurance underwriter has required anything through the insurance program other than "the performance of obligations owed to the insured by the insurer under the insurance contract," e.g. the payment of sickness, life, or disability benefits. See Battle v. Liberty National Life Insurance Co., 493 F.2d 39, 50 (5th Cir. 1974). No ultra vires business is alleged to have been conducted through ABC's insurance plan. Given the information produced about the ABC Security Plan by the plaintiffs, and the lack of averments and evidence indicating anything other than the normal payment of insurance benefits by the insurer, I can only find that the ABC Security Plan does not violate section one of the Sherman Act.
Similarly, the defendants have not averred any irregularity in the operation of ABC's retirement fund. The harmful or illegal effect of the fund is said to be the creation of uniform fringe benefit rates among open shop contractors. Uniform fringe benefits supposedly give open shop contractors a decided bidding advantage over those contractors who utilize unionized journeymen and laborers. If this proposition is viewed in conjunction with the defendants' contention that the plaintiffs have also conspired and combined to set uniform wage rates among themselves, then the detrimental competitive effect of one, if not both, tactics should be reflected in the Bureau of Labor and Department of Labor statistics comparing union and nonunion wage rates. However, those statistics reflect a great disparity and distribution in the wages paid by nonunion contractors, whereas there is a much greater uniformity in wages paid to unionized employees. See Exhibits C-E to Plaintiffs' Rebuttal to the September 9, 1976 Brief of Defendants on the Issue Whether the Court Should Reconsider its August 5, 1976 Order on the Defendants' Amended Counterclaim. Insofar as it might be charged that nonunion contractors pay uniformly lower rates, the defendants' counterclaims stressed the use of uniform fringe benefits and wage rates (which should be reflected in uniform hourly rates paid by nonunion contractors for each journeyman/laborer category), to depress wages and not merely the fact that nonunion journeymen may receive lower rates overall. The antitrust law does not require that open and closed shop contractors pay identical wages and/or submit identical bids for any given construction project. To the extent that the unions are concerned about a conspiracy to depress wages through open shop contractors' alleged failure to comply with federal and state prevailing wage rates, the Court has refused to grant summary judgment.
However, in the absence of either an illegal purpose or anticompetitive effect, I must find that the ABC Retirement Plan does not violate the antitrust laws. Such a result is consistent with the federal policy to encourage private pension plans through ERISA, as will be noted later in this opinion.
VII. NO CONSPIRACY TO FIX UNIFORM WAGES ON PRIVATE PROJECTS
Despite the assurances of the defendants that a conspiracy exists among several of the plaintiffs to set uniform wage rates on private construction projects, the Court must find that no such conspiracy exists. No evidence of any conspiracy has been presented by the defendants. In addition, the Court has not been provided with any statistical data from which it could infer the existence of a conspiracy to set such uniform rates. The statistical data submitted shows a wide divergence in the wages paid in each job category by nonunion contractors. While the defendants assert that within certain, undesignated, ranges, some ABC members are paying uniform rates, defendants have made no effort either to obtain the data necessary to convince the Court of its theory, or to produce evidence presently in their possession for the Court's review. The defendants cannot perpetually sit on their hands and expect the Court to delay the ballgame simply because they refuse either to warm up or pitch.
Since no data has been presented in support of a supposed conspiracy to fix uniform wages on private projects, and no good faith effort has been expended in gathering such information for the Court to review, I have no option but to grant the plaintiffs' motion for reconsideration on this issue and to enter summary judgment on behalf of the plaintiffs.
VIII. ACCOMMODATION OF CONFLICTING FEDERAL POLICIES
Use of the rule of reason in reviewing defendants' claim that ABC's insurance policy violates the federal antitrust laws is consistent with the approach taken by the Supreme Court of the United States in Silver v. New York Stock Exchange, 373 U.S. 341, 83 S. Ct. 1246, 10 L. Ed. 2d 389 (1963) (hereafter "Silver"). In Silver the Court considered "whether and to what extent the federal antitrust laws apply to securities exchanges regulated by the Securities Exchange Act of 1934." 83 S. Ct. at 1249. Mr. Justice Goldberg, writing for the Court, wrestled with the difficult problem of the need to reconcile "pursuit of the antitrust aim of eliminating restraints on competition with the effective operation of a public policy contemplating that securities exchanges will engage in self-regulation which may well have anticompetitive effects in general and in specific applications." 83 S. Ct. at 1253. The Court found that:
The Securities Exchange Act contains no express exemption from the antitrust laws or, for that matter, from any other statute. This means that any repealer of the antitrust laws must be discerned as a matter of implication and "[it] is a cardinal principle of construction that repeals by implication are not favored. Repeal is to be regarded as implied only if necessary to make the Securities Exchange Act work, and even then only to the minimum extent necessary. This is the guiding principle to reconciliation of the two statutory schemes. (citations omitted) 83 S. Ct. at 1257.
Despite the Court's holding that the statutory scheme presented by the Securities Exchange Act was not sufficiently pervasive to totally exempt securities exchanges from the antitrust laws, the Court found:
[Under] the aegis of the rule of reason, traditional antitrust concepts are flexible enough to permit the Exchange sufficient breathing space within which to carry out the mandate of the Securities Exchange Act. (citations omitted) 83 S. Ct. at 1259.