Document ID: ./input/supremecourt_opinions/opinions/14pdf/13-534_19m2.pdf
Page Number: 14.0

Cite as:  574 U. S. ____ (2015) 

9 

Opinion of the Court 

See  Goldfarb,  supra,  at  790;  see  also  1A  P.  Areeda  &  H. 
Hovencamp,  Antitrust  Law  ¶226,  p.  180  (4th  ed.  2013) 
(Areeda &  Hovencamp).  The question is not whether the
challenged  conduct  is  efficient,  well-functioning,  or  wise.
See Ticor, supra, at 634–635.  Rather, it is “whether anti­
competitive  conduct  engaged  in  by  [nonsovereign  actors]
should be deemed state action and thus shielded from the 
antitrust  laws.”    Patrick  v.  Burget,  486  U. S.  94,  100 
(1988).

To answer this question, the Court applies the two-part
test  set  forth  in  California  Retail  Liquor  Dealers  Assn.  v. 
Midcal  Aluminum,  Inc.,  445  U. S.  97,  a  case  arising  from
California’s  delegation  of  price-fixing  authority  to  wine
merchants.  Under  Midcal,  “[a]  state  law  or  regulatory
scheme cannot be the basis for antitrust immunity unless, 
first,  the  State  has  articulated  a  clear  policy  to  allow  the 
anticompetitive  conduct,  and  second,  the  State  provides
active supervision of [the] anticompetitive conduct.”  Ticor, 
supra, at 631 (citing Midcal, supra, at 105). 

Midcal’s  clear  articulation  requirement  is  satisfied
“where  the  displacement  of  competition  [is]  the  inherent, 
logical,  or  ordinary  result  of  the  exercise  of  authority
delegated  by  the  state  legislature.    In  that  scenario,  the 
State  must  have  foreseen  and  implicitly  endorsed  the 
anticompetitive effects as consistent with its policy goals.” 
Phoebe  Putney,  568  U. S.,  at  ___  (slip  op.,  at  11).    The 
active  supervision  requirement  demands,  inter  alia,  “that 
state officials have and exercise power to review particular
anticompetitive  acts  of  private  parties  and  disapprove 
those that fail to accord with state policy.”  Patrick, supra, 
U. S., at 101. 

The  two  requirements  set  forth  in  Midcal  provide  a 

proper analytical framework to resolve the ultimate ques­
tion whether an anticompetitive policy is indeed the policy
of  a  State.    The  first  requirement—clear  articulation—
rarely  will  achieve  that  goal  by  itself,  for  a  policy  may