Advisory opinion concluding that the proposed Code of Conduct of the Association of Trial Lawyers of America does not appear likely to have a significant anticompetitive effect and therefore, to violate Section 5 of the FTC Act

812 	FEDERAL TRADE COMMISSION DECISIONS
114 F.T.C.
The proposed Code of Conduct of the Association of Trial
Lawyers 	of America 	does 	not appear 	likely to 	have 	a
significant anticompetitive effect and therefore, to violate
Section 5 of the FTC Act. [Association of Trial Lawyers of
America, P894002}
January 2, 1991
Dear Mr. Herman:
This letter responds to your request for a Federal Trade Commission
("FTC" or "Commission") advisory opinion concerning the proposed
Code of Conduct ("Code") of the Association of Trial Lawyers of
America ("ATLA"). The Commission understands that ATLA is a
voluntary national bar association of approximately 65,000 trial
lawyers, most of whom represent injured victims in civil actions and
defendants in criminal cases. You have requested that the Commission
advise ATLA whether its proposed Code complies with Section 5 of
the Federal Trade Commission Act. 1 ATLA has conditionally ap-
proved the Code, but has made implementation dependent upon a
favorable evaluation by the Commission.
The federal antitrust laws do not prohibit professional associations
from adopting reasonable ethical codes designed to protect the public.
Such self-regulatory activity serves legitimate purposes, and in most
cases can be expected to benefit, rather than to injure, competition
and consumers of professional services. We note in this regard that
ATLA has stated that its Code "was developed to respond to growing
public criticism of abusive forms of solicitation and client representa-
tion by members of the legal profession." 2
In some instances, however, particular ethical restrictions can
unreasonably restrict competition and thereby violate the antitrust
laws. Even ethical restrictions that appear reasonable on their face
may be interpreted or applied in an anticompetitive manner. Our
approval of any particular Code provision does not extend, of course,
to anticompetitive interpretations or applications of that provision.
1 This opinion letter addresses only the proposed Code as set forth in Exhibit A (Revised) (Tab 2) of ATLA's
January 13, 1989 filing. It does not address Sections 4 or 7 of the proposed Code, except to note that those
sections do not raise antitrust concerns.
2 Letter from Bill Wagner, President, ATLA, to Donald S. Clark, Secretary, FTC (Jan. 13, 1989),

813
812
ADVISORY OPINION
CODE PROVISIONS
Code Enforcement
We begin our analysis by noting that the proposed Code may have a
significant impact on how ATLA members compete with one another.
An ATLA Code violation could lead to internal discipline by ATLA, 8
and to the extent that ATLA confers substantial benefits on its
members, the threat of loss of those benefits will give members an
incentive to abide by the Code. In addition, an ATLA member may
legitimately fear that disciplinary action will affect his reputation.
Finally, professionals are likely to regard their association's profes-
sional norms as authoritative even if the association's disciplinary
sanctions do not include the possibility of loss of license. 4 Thus, the
proposed Code, if adopted, is likely to guide the conduct of ATLA
members.
Section 1: Uninvited Solicitations
Section 1 of the proposed Code states that no ATLA member shall
personally, or through a representative, contact any injured party or
an aggrieved survivor in an attempt to solicit a potential client when
there has been no request for such contact from or on behalf of the
injured party, an aggrieved survivor, or a relative or friend of either. It
is the Commission's understanding that Section 1 is intended to apply
only to direct, personal contact between a lawyer (or his representa-
tive) and an injured party, and that it does not restrict advertising or
written communication. 5
Direct solicitation by lawyers, like advertising, can be a useful
source of information about a consumer's legal rights and remedies,
and also can provide information about the terms and availability of
legal services. Depending on the approach of the individual lawyer or
his agent, personal solicitation also can provide an opportunity for the
potential purchaser of services to ask questions of the seller.
Section 1 of the proposed Code is intended to protect persons
particularly vulnerable to undue influence from being pressured to
3 ATLA's letter of January 13, 1989, cited Bylaw II1(3)(d) for the proposition that if the proposed Code is
adopted and an ATLA member violates it, the violation will "serve as a basis for a complaint against the
member under the disciplinary procedures of the ATLA Bylaws." This Bylaw provides that a member may be
expelled, suspended, or censured for "unethical conduct, or for . • misconduct which brings discredit to said
member, The Association, or the profession of law."
4 Goldfarb v. Virginia State Bar Associatwn, 421 U.S. 773, 791 n. 21 (1975).
5 For example, under the Code, a lawyer or his representative, would be permitted to send targeted mail. A
prohibition against targeted mailings would clearly be problematic from an antitrust standpoint. Cf Shapero
v. Kentucky Bar Ass'n, 108 S. Ct. 1916 (1988).

814 	FEDERAL TRADE COMMISSION DECISIONS
114 F.T.C.
purchase legal services. 6 As the Supreme Court reasoned in Ohralik
v. Ohio State Bar Association, 436 U.S. 447, 457-58, 465 (1978), in-
person solicitation by lawyers may actually disserve the individual and
societal interest in informed and reliable decisionmaking where it
discourages persons needing counsel from engaging in a critical and
unhurried comparison of the terms and availability of legal services.
Such in-person solicitation
may exert pressure and often demands an immediate response, without providing an
opportunity for comparison or reflection. The aim and effect of in-person solicitation
may be to provide a one-sided presentation and to encourage speedy and perhaps
uninformed decisionmaking; there is no opportunity for intervention or counter-
education by agencies of the Bar, supervisory authorities, or persons close to the
solicited individual.
Id. at 457. The potential for overreaching is significantly greater
when a lawyer, "a professional trained in the art of persuasion,"
personally solicits a prospective client who may be physically or
emotionally overwhelmed by the circumstances giving rise to the need
for legal services. Id. at 465.
A 	more 	narrowly 	tailored 	restriction 	on 	injurious 	solicitation
practices may readily be contemplated, and indeed has been adopted
in at least one jurisdiction. 7 A broad ban may nonetheless be justified
if a narrower restriction (such as the one adopted by the District of
Columbia Court of Appeals) 	would be 	ineffective-because, 	for
example, direct solicitation "is not visible or otherwise open to public
scrutiny" and, as a result, may be "virtually immune to effective
oversight" unless banned entirely. Id. at 466.
This is a plausible contention that cannot either be credited or
rejected without further factual inquiry. For example, we presently
have no evidence on the prevalence of abusive in-person solicitation
practices by trial lawyers, or the likely success (or failure) of narrower
restrictions aimed at remedying such abuses. Although Section 1 of
the proposed Code could be interpreted or applied in an anticompeti-
6 The Commission has recognized this type of public interest rationale in trade regulation rules such as those
governing door-to-door sales, 16 CFR 429, and funeral industry practices, 16 CFR 453.
7 The District of Columbia's Rules of Professional Conduct permit uninvited in-person solicitation so long as:
(1) the solicitation does not involve false or misleading statements or claims; (2) the solicitation does not
involve the use of undue influence; and (3) the potential client's apparent physical or mental condition would
not prevent him or her from exercising "reasonable, considered judgment" when selecting a lawyer. Rule
7.l(b), Rules of Professional Conduct, District of Columbia Court of Appeals, adopted March 1, 1990 (effective
date January 1, 1991). ln American Medu;al Association, 94 FTC 701 (1979), affd, 638 F.2d 443 (2d Cir.
l 980), affd mem. by an equally divided C.m1·t, 455 U.S. 676 (1982), the FTC ordered the AMA to cease and
desist froin banning all solicitation, but permitted it t-0 proscribe uninvited, in-person solicitation of persons
who, because of their particular circumstances, are vulnerable to undue influence.

815
812
ADVISORY OPINION
tive manner, we currently have no basis for concluding that Section 1
would likely have an anticompetitive effect.
Section 2: Uninvited Presence at Accident Scenes
Section 2 states that no ATLA member shall go to the scene of an
event that caused injury unless requested to do so by an injured party,
an aggrieved survivor, or a relative of either.
A lawyer who anticipates being retained by an injured party or
survivor might want to go to the scene of an accident as soon as
possible in order to locate or interview witnesses or examine the
accident site for helpful clues about the accident. It is possible that
lawyers who do field investigations soon after the accident have found
such investigations to be the most efficient way to gather information
relevant to representing their clients. If that is so, then a ban on
accident scene visitation may raise some lawyers' costs of doing
business, which could have an adverse effect on competition.
Section 2 may be a prophylactic provision intended to prevent
abusive personal solicitation of accident victims or survivors. This goal
is entirely compatible with the antitrust laws. But Section 2 may be
overbroad to the extent it prevents A TLA members from visiting the
scene of an injury-causing event even when there is no danger that
such solicitation could occur. Because there is no time limit in Section
2, it would preclude a lawyer from visiting the scene of an accident
even after the accident victims or aggrieved survivors have been
removed from the scene. Section 2, therefore, may have an unreason~
ably anticompetitive effect.
Section 3: Media Appearances
Section 3 would prohibit an ATLA member (other than a bar
association 	designee) 	from 	initiating 	a television 	appearance 	or
commenting to any news media concerning an injury-causing event
within 10 days of the event unless the member forgoes any financial
return resulting from the compensation of those injured or killed.
It is possible that this rule could have the effect of limiting the flow
of truthful, nondeceptive information to people who may benefit from
it and in circumstances that could limit potential problems associated
with in-person solicitations. We understand, however, that this rule is
designed to ensure that attorneys who appear on television or in other
news media, ostensibly as disinterested commentators on the legal
consequences 	of injury-causing events, 	have 	no 	direct 	financial

816 	FEDERAL TRADE COMMISSION DECISIONS
114 F.T.C.
incentive to use this occasion to solicit clients or to attempt to
prejudice potential jurors. That purpose is valid, but because we do not
have sufficient information to permit us to weigh the countervailing
effects, we currently have no basis for concluding that Section 3
would likely have an anticompetitive effect.
It is also our understanding that Section 3 would not prohibit
advertising on television or in other news media. If Section 3 .were
. interpreted as a ban on advertising within 10 days of an injury-
causing event, it could restrict competition unreasonably and violate
the antitrust laws.
Section 5: False or Misleading Advertising
Section 5 would prohibit ATLA members from personally, or
through a representative, making false or misleading representations
of trial experience or past results of litigation. We recognize that
professional associations have an important role to play in policing
false and deceptive advertising because of their professional expertise
and their interest in protecting the image of the profession. Although
it is possible to interpret the term "misleading advertising" so broadly
as to prohibit virtually any representations about past experience or
litigation, which could lead to anticompetitive results, on its face this
provision is not a violation of the antitrust laws.
Section 6: Personal Contact to Advise of Unrecognized L€gal Claim
Section 6 would prohibit an ATLA member from initiating personal
contact with anyone other than a client, former client, relative, or
close friend to advise them of the possibility of an unrecognized legal
claim for damages, unless the attorney forgoes any financial interest
in the compensation of the injured party.
This provision could harm consumers by decreasing an ATLA
member's incentive to inform potential clients of unrecognized legal
claims, which decreases the likelihood that injured parties will seek
and obtain redress for their injuries. On the other hand, a lawyer's
initiation of personal contact to apprise a potential client of an
unrecognized legal claim, like in-person solicitation, may involve "the
coercive force of the personal presence of a trained advocate" and
"pressure on the potential client for an immediate yes-or-no answer."
Zauderer v. 	Office of Disciplinary Counsel, 471 U.S. 626, 642
(1985). Although Section 6, like Section 1, could be interpreted or

817
812
ADVISORY OPINION
applied in an anticompetitive manner, we currently have no basis for
concluding that Section 6 would likely have an anticompetitive effect.
CONCLUSION
While Section 2 of the Code may be somewhat overbroad, the other
provisions of the Code do not appear likely on their face to have a
significant anticompetitive effect and, therefore, to violate Section 5
of the FTC Act. If those provisions are interpreted or applied in an
anticompetitive manner, then the proposed Code could unreasonably
hinder competition among lawyers who handle personal injury cases,
and thus violate Section 5 of the FTC Act. 8
This advisory opinion, like all those issued by the Commission, is
limited to the proposed conduct described in the petition being
considered. 9 It does not constitute approval for specific instances of
implementation of the Code that may become the subject of litigation
before 	the 	Commission 	or any 	court, 	since 	interpretations 	and
enforcement of the Code in particular situations may prove to cause
significant injury to competition and consumers, and thereby violate
the Federal Trade Commission Act. The Commission maintains the
right to reconsider the questions involved and, with notice to the
requesting party in accordance with Section 1.3(b) of the Commis-
sion's Rules of Practice, to rescind or revoke its opinion.
Copies of your request and this response are being placed on the
public record pursuant to Section 1.4 of the Commission's Rules of
Practice.
By direction of the Commission, Commissioner Owen recused and
Commissioner Starek not participating.
Letter of Request
January 13, 1989
Dear Mr. Clark:
Pursuant to the procedures set forth in 16 CFR 1.2, the Association
8 The Commission has successfully challenged a professional association's restriction on truthful,
nondeceptive advertising and solicitation under Section 5 of the FTC Act. See AMA, supra. In addition, the
Commission has obtained numerous consent orders from professional groups requiring them to cease and
desist from imposing restrictions on truthful, nondeceptive advertising. lf ATLA adopts the proposed Code and
the Code results in substantial anticompetitive effects, the Commission may take such actions as would be in
the public interest.
9 In preparing an advisory _opinion, it is the Commission's practice to rely on infonnation provided by the
.requesting entity, and not to conduct an independent investigation.

818 	FEDERAL TRADE COMMISSION DECISIONS
114 F.T.C.
of Trial Lawyers of America ("ATLA") respectfully requests an
advisory opinion from the Federal Trade Commission as to the legality
under the federal antitrust laws of a Code of Conduct which prohibits
various forms of unethical conduct by ATLA members.
The ATLA Code of Conduct, conditionally approved by the ATLA
membership on July 31, 1988, was developed to respond to growing
public criticism of abusive forms of solicitation and client representa-
tion by members of the legal profession. The Code principally was
designed as a client protection measure to restrict solicitation of
clients in circumstances where they are particularly vulnerable and
under severe emotional and physical duress.
In addition, the Code was designed to improve ATLA's image as a
lobbying organization. The negative publicity and popular outcry
surrounding the phenomenon of lawyers rushing to mass disaster
scenes threatened to snowball into a crusade for short-sighted tort
reforms, which would disadvantage ATLA members and consumers of
legal services. ATLA recognized that the better approach was to use
the controversy as an impetus to formulate much-needed rules to
protect consumers from the conduct of unscrupulous attorneys. Above
all, ATLA wanted to take the lead in "cleaning-up" the image of the
legal profession.
ATLA requests a favorable advisory opinion from the Commission
in order to implement the Code of Conduct. An advisory opinion is
necessary because the application of federal antitrust laws to codes of
ethics, such as the ATLA Code, has been unpredictable and uncertain.
There is no clear Commission or court precedent to guide a voluntary
professional organization which takes action to prohibit unethical
practices through the adoption of rules which apply only to its
members. Without a favorable Commission opinion, ATLA will be
unable to 	implement the 	Code. 	Thus, 	it is 	important that the
Commission clarify its position on the reach of the antitrust laws to
the adoption of the Code of Conduct as a credible means of curbing
professional misconduct. 1
Initially, ATLA requested review of the Code of Conduct by the
Department of Justice pursuant to the business review procedures of
28 CFR 50.6. (See letters of June 16, 1988 and September 6, 1988,
Tabs 1 and 2). However, on September 19, 1988, the Department of
1 It is ATLA's position that an advisory opinion from the Commission would offer the most reliable guidance
to ATLA and other professional organizations similarly situated. However, if the Commission determines that
an advisory opinion is not warranted, ATLA alternatively requests the issuance of an advisory opinion from the
ITC staff pursuant to 16 CFR l.l(b).

819	ADVISORY OPINION
812
Justice advised ATLA counsel that since the Code "is presently being
investigated by the Federal Trade Commission . . . the Antitrust
Division has agreed to allow the Commission to handle this inquiry."
(Tab 4) ATLA counsel immediately contacted the FfC staff and
forwarded to them copies of the materials filed with the Department
of Justice. In a letter dated September 15, 1988, ATLA counsel
requested that the FfC convert its investigation into an advisory
opinion proceeding since the DOJ filing had antedated the commence-
ment of the FfC investigation. (Tab 8)
A meeting with FfC staff was held on September 28, 1988. At the
request of the FfC staff, 	ATLA voluntarily provided extensive
, ·information and documentation relating to the origins, vote, and
reasons for promulgation of the Code. ATLA also provided informa-
tion on ATLA demographics, membership, affiliates, organization and
other documents. (For the Commission's convenience, copies of the
ATLA Information Response of October 27, 1988 accompany this
letter.) (Tab 5)
In December 1988, FfC staff advised ATLA counsel that they had
completed their investigation. ATLA counsel was further advised that
the staff would not convert this matter to an advisory opinion
proceeding as ATLA counsel had requested. Instead, the FfC staff
indicated that, if ATLA filed a formal request for an advisory opinion
from the Commission, FfC staff would recommend that the Bureau of
Competition terminate its investigation of ATLA. Now that ATLA has
filed for an advisory opinion, it is our expectation that the staff will
recommend termination of the FfC investigation and the matter will
be ripe for the FfC to review the Code of Conduct under advisory
opinion procedures.
To facilitate our request for a favorable advisory opinion, we have
enclosed all of the documents that were presented to both the
Department of Justice and the FfC staff to assist in the evaluation of
the ATLA Code of Conduct. The materials include a narrative,
documents 	concerning 	the 	creation 	and 	adoption 	of the 	Code,
information about the Association, its services, and its membership. In
addition, we direct the Commission's attention to the legal memoran-
dum annexed to our June 16, 1988 letter to the Department of Justice
which provides an antitrust analysis of the ATLA Code. (Tab 1)
ATLA believes that it is entitled to a favorable advisory opinion
since 	implementation of the Code does 	not raise 	any antitrust
concerns. ATLA is a voluntary professional society without market

820 	FEDERAL TRADE COMMISSION DECISIONS
114 F.T.C.
power in any relevant market. A showing of market power is a
prerequisite to a finding of an antitrust violation under the rule of
reason, which clearly governs this case.
The Code is motivated by ethical rather than commercial concerns
and is narrowly drafted to protect clients and potential clients from
solicitation when they are under severe physical and mental distress
and particularly vulnerable to undue influence .
.The Code, in most respects, parallels ethical provisions already in
place in most states and reflects an effort by ATLA to publicly declare
that it expects its members to adhere to the highest ethical standards
concerning client representation. When the Code is implemented,
violation of its provisions by an ATLA member only will serve as a
basis for a complaint against the member under the disciplinary
procedures of the ATLA Bylaws. (Bylaw III(3)(d)).
In order to update the information previously filed with the FTC,
Tab 6 contains a copy of a Resolution of the ATLA Board of
Governors approved on November 11, 1988 which clarifies that the
Code of Conduct will not be implemented by ATLA until the FTC
issues a favorable ruling.
Under these circumstances, ATLA requests the FTC to issue a
formal advisory opinion approving implementation of the Code of
Conduct. In the event that the Commission finds that some portions of
the Code raise antitrust concerns, we request specific comments
relating to individual Code provisions so that conforming amendments
can be implemented and presented to the ATLA membership for
ratification.
Respectfully submitted,
Bill Wagner
Enclosures
EXHIBIT A (REVISED)
ASSOCIATION OF TRIAL LAWYERS OF AMERICA
Code of Conduct
Kansas City, Missouri
July 31, 1988
1. No ATLA member shall in person, or through a representative, contact any
injured party, or an aggrieved survivor in an attempt to solicit a potential client when

821
812
ADVISORY OPINION
there has been no request for such contact from or on the behalf of the injured party,
an aggrieved survivor, or a relative or friend of either.
2. No ATLA member shall go to the scene ~f an event which caused injury unless
requested to do so by an injured party, an aglirieved survivor, or a relative of either.
3. No ATLA member shall initiate a television appearance or initiate any comment
to any news media concerning an event causing injury within IO days of the event
unless the member foregoes any financial return from the compensation of those
injured or killed, provided, however, that an individual designated by a bar association
to state the official position of such bar association may initiate such media contact to
communicate such position.
4. No ATLA member shall personally, or through an associate attorney, file a
complaint with a specific ad damnum amount unless required by local rules of court.
If such amount is stated, it shall be based upon good faith evaluation of facts which
the member can demonstrate.
5. No ATLA member shall personally, or through a representative, make
representations of trial experience or past. results of litigation either of which is in any
way false or misleading.
6. No ATLA member shall personally, or through a representative, initiate personal
contact with a potential client (who is not a client, former client, relative or close
personal friend) for the purpose of advising that individual of the possibility of an
unrecognized legal claim for damages unless the member foregoes any financial
interest in the compensation of the injured party.
7. No ATLA member shall file or maintain a frivolous suit, issue, or position.
However, no ATLA member should refrain from urging or arguing any suit, issue or
position that is believed in good faith to have merit.