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§ 14.8 GIFT ANNUITIES AND ANTITRUST LAWSannuities are not violating the antitrust laws. 35 Specifically, agreeing to use,or using, the same annuity rate for the purpose of issuing one or more charitablegift annuities is not unlawful under any of the antitrust laws. Thisexemption extends to both federal and state law. The protection is not confinedto charities: it extends to lawyers, accountants, actuaries, consultants,and others retained or employed by a charitable organization when assistingin the issuance of a charitable gift annuity or the setting of charitable annuityrates.Moreover, this antitrust exemption also sweeps within its ambit the act ofpublishing suggested annuity rates. Thus, organizations—most notably, theAmerican Council on Gift Annuities—are not in violation of the antitrust lawsbecause they publish actuarial tables or annuity rates for use in issuing giftannuities.This legislation defines charitable gift annuity by cross-reference to the federaltax law definition of the term. 36 A state can override this legislation with its antitrustlaws. To do this, the state must have, by December 7, 1998, enacted a lawexpressly providing that the antitrust exemption does not apply with respect tothe otherwise protected conduct. 37The report of the House Committee on the Judiciary accompanying this legislation38 contains a discussion of the applicability of the antitrust laws to charitableorganizations: essentially, these laws apply when an organization is engagedin a “commercial transaction” with a “public service aspect.” The committee wasnot certain whether charitable gift annuities involve these types of transactions orare “pure charity.” In any event, the committee concluded that giving by meansof these annuities is “legitimate,” particularly since the IRS “approves and regulates”these instruments. 3935 15 U.S.C. § 37 et seq. This legislation was enacted as the Charitable Gift Annuity Antitrust Relief Act of 1995(109 Stat. 687; Pub. L. No. 104-63, 104th Cong., 1st Sess. (1995)). A short-term purpose of the statute was toend litigation, which involved an allegation that the use of the same annuity rate by various charitable organizationsconstitutes price-fixing and thus is a violation of the antitrust laws. Ritchie v. American Council on GiftAnnuities, Civ. No. 7:94-CV-128-X (N.D. Tex.). Nonetheless, this litigation persisted; see § 5.9, note 31. In asecond effort to derail this litigation, Congress passed the Charitable Donation Antitrust Immunity Act of 1997(111 Stat. 241; Pub. L. No. 105-26, 105th Cong., 1st Sess. (1997)). Nonetheless, this litigation has been concluded.Ritchie v. American Council on Gift Annuities, 943 F. Supp. 685 (N.D. Tex. 1996), appeal dismissedsub nom. Ozee v. American Council on Gift Annuities, 110 F.3d 1082 (5th Cir.), reh’g denied, 116 F.3d 1479(5th Cir.), cert. granted & judgment vacated, American Bible Soc’y v. Ritchie, 522 U.S. 1011 (1997), on remandsub nom. Ozee v. American Council on Gift Annuities, 143 F.3d 937 (5th Cir. 1998), cert. denied, AmericanBible Soc’y v. Ritchie, 526 U.S. 1064 (1999). See also Ozee v. American Council on Gift Annuities, 110F.3d 1082 (5th Cir.), cert. granted & judgment vacated, American Council on Gift Annuities v. Ritchie, 522U.S. 1011 (1997); Ozee v. American Council on Gift Annuities, 888 F. Supp. 1318 (N.D. Tex. 1995); Ritchiev. American Council on Gift Annuities, 1996 WL 743343 (N.D. Tex. 1996).36 See §§ 14.5, 14.6.37 A state law in effect on the date of enactment of this relief legislation (December 8, 1995) does not qualifyunder this override rule because it cannot expressly reference the provisions of the Charitable Gift AnnuityAntitrust Relief Act of 1995.38 H. Rep. No. 104-336, 104th Cong., 1st Sess. (1995).39 Id. at 3. In connection with the litigation referenced in note 37, the committee observed: “Allowing litigants touse the antitrust laws as an impediment to these beneficial activities should not be countenanced where, ashere, there is no detriment associated with the conduct. It is particularly difficult to see what anticompetitiveeffect the supposed setting of prices has in a context where the decision to give is motivated not by price butby interest in and commitment to a charitable mission.” Id. 503