Source: http://topics.law.cornell.edu/wex/sherman_antitrust_act?quicktabs_3=1
Timestamp: 2013-12-10 19:40:00
Document Index: 741698936

Matched Legal Cases: ['§ 1011', '§ 1012', '§ 1013', '§ 1', '§ 1', '§ 2', '§ 2', '§ 1', '§ 2', '§ 1', '§ 1']

Sherman Antitrust Act | LII / Legal Information Institute
In insurance law, the McCarran-Ferguson Act of 1945, 15 U.S.C. §§ 1011-15 vested regulatory authority of the insurance industry on the states; thus, the federal reach of the Sherman Act, the Clayton Act, and the Federal Trade Commission Act is applicable to the “business of insurance” only to the extent where: (1) such business is not regulated by state law [§ 1012], or (2) there are insurer or acts of, “boycott, coercion, or intimidation” [§ 1013]. For the full text of the McCarran-Ferguson Act, see: http://www.law.cornell.edu/uscode/html/uscode15/usc_sup_01_15_10_20.htmlDefinition from Nolo’s Plain-English Law DictionaryA federal antitrust law, enacted in 1890, that prohibits direct or indirect interference with interstate trade. This Act was amended by the Clayton Act in 1914.Definition provided by Nolo’s Plain-English Law Dictionary.August 19, 2010, 5:24 pm In Hartford Fire Insurance Co. v. California (1993), the United States Supreme Court held that the Sherman Act applies to foreign business conduct meant to cause a “substantial effect” in the United States, even if that conduct was legal in the country in which is occurred. In the case, United States-based insurance and reinsurance companies agreed with London-based reinsurance companies to pressure the Insurance Services Office in the United States to change standard forms in a way that made it more difficult for insureds to make insurance claims. The conduct in question did not violate British law, but it would have run contrary to federal anti-monopoly law under the Sherman Antitrust Act. Nineteen states, including California, brought suit against the insurance companies for conspiracy to violate § 1 of the Sherman Antitrust Act. The British reinsurance companies argued that the case against them should be dismissed in federal court because application of the Sherman Act against them would violate principles of international comity. The Supreme Court, in an opinion by Justice Souter, concluded that the domestic insurance companies’ alleged conduct was not immunized from antitrust liability by the McCarran-Ferguson Act, nor did principles of international comity preclude the federal district court from having jurisdiction over the foreign insurers’ conduct. The Sherman Antitrust Act made every contract, combination, or conspiracy in unreasonable restraint of interstate or foreign commerce illegal. The federal district court had jurisdiction over Sherman Act claims, especially since the London reinsurance companies engaged in conspiracies that would have substantially affected the insurance market in the United States. As for principles of international comity, the Supreme Court did not find the need to apply these principles, since there was no true conflict between US law and foreign (UK) law.
Hartford Fire Insurance Co. v. California (1993)
“The meaning of the term ‘contract, combination … or conspiracy’ is informed by the ‘ “basic distinction” ’ in the Sherman Act ‘ “between concerted and independent action” ’ that distinguishes § 1 of the Sherman Act from § 2. Copperweld, 467 U.S., at 767, 104 S.Ct. 2731 (quoting Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 761, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984)). Section 1 applies only to concerted action that restrains trade. Section 2, by contrast, covers both concerted and independent action, but only if that action ‘monopolize[s],’ 15 U.S.C. § 2, or ‘threatens actual monopolization,’ Copperweld, 467 U.S., at 767, 104 S.Ct. 2731, a category that is narrower than restraint of trade. Monopoly power may be equally harmful whether it is the product of joint action or individual action.
“Congress used this distinction between concerted and independent action to deter anticompetitive conduct and compensate its victims, without chilling vigorous competition through ordinary business operations. The distinction also avoids judicial scrutiny of routine, internal business decisions.
“Thus, in § 1 Congress ‘treated concerted behavior more strictly than unilateral behavior.’ Id., at 768, 104 S.Ct. 2731. This is so because unlike independent action, ‘[c]oncerted activity inherently is fraught with anticompetitive risk’ insofar as it ‘deprives the marketplace of independent centers of decisionmaking that competition assumes and demands.’ Id., at 768-769, 104 S.Ct. 2731. And because concerted action is discrete and distinct, a limit on such activity leaves untouched a vast amount of business conduct. As a result, there is less risk of deterring a firm’s necessary conduct, courts need only examine discrete agreements; and such conduct may be remedied simply through prohibition. See Areeda & Hovenkamp ¶ 1464c, at 206. Concerted activity is thus ‘judged more sternly than unilateral activity under § 2,’ Copperweld, 467 U.S., at 768, 104 S.Ct. 2731. For these reasons, § 1 prohibits any concerted action ‘in restraint of trade or commerce,’ even if the action does not ‘threate[n] monopolization,’ Ibid. And therefore, an arrangement must embody concerted action in order to be a ‘contract, combination … or conspiracy’ under § 1.” J. Stevens, American Needle, Inc. v. National Football League, 130 S.Ct. 2201, 2208-2209 (2010).
American Needle, Inc. v. National Football League (2010)