Opinion ID: 2514006
Heading Depth: 1
Heading Rank: 3

Heading: The Federal Antitrust State Action Immunity Doctrine

Text: ¶ 8 The Sherman Antitrust Act, 15 U.S.C. § 1, expresses our national policy against concerted activity that results in monopolies and restraints of trade. [2] However, in our federal system of dual sovereigns, federal law against anti-competitive conduct is not applied to governmental activities of the sovereign states. Parker v. Brown, supra , enunciated the doctrine of state action immunity from federal antitrust liability. Analyzing and interpreting the federal antitrust statute, Parker found no suggestion of congressional intent to restrain state action directed by state statute. 317 U.S. at 350-51, 63 S.Ct. at 313. Relying on fundamental principles of federalism and preemption, Parker concluded that the federal antitrust statute did not undertake to prohibit restraint on competition imposed by a sovereign state as an act of government. 317 U.S. at 352, 63 S.Ct. at 314. See also, Milton Handler, Antitrust, 78 Columbia L.R. 1363, 1374-80 (1978). ¶ 9 For purposes of federal antitrust law, a sovereign state can also immunize a municipality's conduct. However, to afford immunity to a municipality, the state must do something more than simply direct the municipality's conduct. City of Lafayette, La. v. Louisiana Power & Light Co., 435 U.S. 389, 414-15, 98 S.Ct. 1123, 1137-38, 55 L.Ed.2d 364 (1978). The state action immunity doctrine will protect a municipality's anti-competitive conduct from federal antitrust liability only where 1) there is a clearly expressed state policy to displace competition with municipal regulation and 2) the anti-competitive regulation is supervised by the state. California Retail Liquor Dealers Assoc. v. Midcal Aluminum, Inc., 445 U.S. 97, 105, 100 S.Ct. 937, 943, 63 L.Ed.2d 233 (1980). The first prong of this two-prong analysis is satisfied if the restraint on competition is a foreseeable result of the activity authorized by state statute. City of Columbia v. Omni Outdoor Advertising, Inc., 499 U.S. 365, 373, 111 S.Ct. 1344, 1350, 113 L.Ed.2d 382 (1991). The second prong is satisfied if the municipality actively supervises the regulation. Town of Hallie v. City of Eau Claire, 471 U.S. 34, 47, 105 S.Ct. 1713, 1720, 85 L.Ed.2d 24 (1985).