Agreement May Settle Suit against Architects

By Johnson, David | THE JOURNAL RECORD, July 7, 1990 | Go to article overview

Agreement May Settle Suit against Architects


Johnson, David, THE JOURNAL RECORD


By David Johnson WASHINGTON - The Justice Department has filed a suit against the American Institute of Architects, contending that the professional group unreasonably restrained price competition.

At the same time, lawyers for the department and the institute filed a proposed agreement that, if accepted by a federal district judge, would settle the government's lawsuit against the institute, which represents 54,000 architects.

In filing suit against the professional association, the department invoked the Sherman Antitrust Act, which was enacted in 1890 to break up industrial monopolies. The act has been successfully applied by the Justice Department and the Federal Trade Commission against professional associations, including those representing civil engineers, accountants, and lawyers.

The Justice Department also employed the antitrust act against the architect's group in 1972 in a case involving price quotations on bids.

Thursday's action, which grows out of an investigation begun in the Reagan adminstration, represented a much broader complaint of anti-competitive activity, Justice Department officials said.

Antitrust lawyers outside the government said that the filing of the suit also reflects the increased aggressiveness of the antitrust division, now headed by James Rill. He is regarded by antitrust lawyers as more pragmatic than his predecessors in the Reagan administration, who were sometimes thought of as strong adherents of free market economic theories and turned the antitrust division into the one of the more moribund units of the department.

Justice Department lawyers said they hoped the suit would lead to increased price competition for the sale of architectural services like planning, designing, and supervising construction of office towers, hospitals, airports, and industrial parks.

``It is certainly important from our perspective to let people in various professions know that competition plays an important role in the professions as it does in any industry,'' said Robert E. Bloch, the chief of the professions and intellectual property section of the department's antitrust division.

But a lawyer for the architect's group insisted that price competition already exists in the profession and said the suit would probably not lead to a reduction in fees.

``Our position has always been that no laws were violated and the filing does not establish that any laws were violated,'' said David K. Perdue, associate general counsel for the Institute, which represents about two-thirds of the registered architects in the United States. ``I don't foresee a significant effect on the practice of architecture.''

Architects are already cutting fees in New York in response to the virtual evaporation of significant new construction projects, a situation that is having ripple effects elsewhere in the country.

The antitrust division's increased aggressiveness has become apparent in a number of recent cases. Last year, for instance, it initiated an investigation into whether some elite East Coast colleges fixed prices in setting tuition.

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