But what of the situation in which a client seeks counseling, rather than presentation of a dispute to a figure authorized to make a decision? In this context, Brad Wendel foregrounds the difficulty that “must be faced in any complex regulatory arena in which a client may seek the assistance of a lawyer to avoid a legal prohibition or penalty through careful planning.” As already noted earlier in this series, one of Wendel’s targets is abusive tax shelters that are supported by spurious legal advice. In my career as a Dallas practitioner, I saw the collapse of a very fine competitor firm for this very type of conduct and one of its responsible partners sentenced to a lengthy prison stay. In some ways, these cases are easy to analyze in ethical terms ex post facto because they are threaded with bogus transactions. Such is not always the case, though—there are plenty of regulatory regimes in which transactional structures can be manipulated so as to defeat a rule’s background justifications. 

Over 100 years ago, in Dr. Miles Medical v. John D. Park & Sons, the Supreme Court held that it is per se illegal for a manufacturer to agree with its distributor to set the minimum price the distributor can charge for the manufacturer’s goods. The case arose from a common fact situation in distribution systems—namely, a downstream party is a “price cutter,” which irritates other participants selling at that party’s level of distribution (e.g., wholesale or retail) and the manufacturer, in reaction, tries to stifle the discounter. As the Dr. Miles court described this typical scenario, “The contracting wholesalers or jobbers covenant that they will sell to no one who does not come with [the manufacturer’s] license to buy, and that they will not sell below a minimum price dictated by [the manufacturer].” In consequence, “all competition between retailers is destroyed, for each such retailer can obtain his supply only by signing one of the uniform contracts prepared for retailers, whereby he covenants not to sell to anyone who proposes to sell again unless the buyer is authorized in writing by the complainant, and not to sell at less than a standard price named in the agreement. Thus all room for competition between retailers, who supply the public, is made impossible.” Speaking in what we now think of as “antitrust” terms, the court noted, “That these agreements restrain trade is obvious.”