Opinion ID: 329749
Heading Depth: 1
Heading Rank: 1

Heading: the parker doctrine: delineation of antitrust immunity of state governmental entities

Text: 9 In Parker v. Brown, supra, the Supreme Court reviewed a California program for marketing agricultural commodities produced in the state. The program was designed to restrict competition among growers of grapes used to produce raisins and to maintain prices to packers. The program's object was to conserve the agricultural wealth of the State and to prevent economic waste in the marketing of agricultural products of the state. The Supreme Court assumed that had the program been the product of a purely private combination it would have violated the antitrust laws. Id. 317 U.S. at 350, 63 S.Ct. 307. 10 However, the Court found that California's program derived its authority and its efficacy from the legislative command of the state and was not intended to operate or become effective without that command. Id. Thus, the anti-competitive effect of the program was unquestionably the result of a conscious decision by the state legislature that such a result was in the best interest of the state. The measures that restricted competition were adopted pursuant to the explicit directive of the state legislature. In this context, where the state as sovereign, imposed the restraint as an act of government, Id. at 352, 63 S.Ct. at 314, the Court held that the Sherman Act was inapplicable. Defendants argue for a broad construction of Parker, contending that so long as they were performing governmental functions or were acting within the scope of their authority, they are shielded from antitrust liability under Parker. 11 The Supreme Court was recently provided with the opportunity to review its decision in Parker. In Goldfarb v. Virginia State Bar, --- U.S. ---, 95 S.Ct. 2004, 44 L.Ed.2d 572 (1975), decided after the district court's judgment in the case at bar, the Court was confronted with the question of whether a minimum fee schedule published by the Fairfax County Bar Association and enforced by the Virginia State Bar constituted price fixing in violation of section 1 of the Sherman Act, 15 U.S.C. § 1 (1970). Both the district court and the Court of Appeals had held that the State Bar was immune from antitrust liability under Parker. 12 The Supreme Court noted that the State Bar was a state agency by law. Id. at ---, 95 S.Ct. 2014. However, the Court stated that the Bar's status as a state agency for limited purposes did not shield it from antitrust liability when it engaged in monopolistic activity for the benefit of its members. The Court indicated that under Parker, (t)he threshold inquiry in determining if an anticompetitive activity is state action of the type the Sherman Act was not meant to proscribe is whether the activity is required by the State acting as sovereign. Id. at ---, 95 S.Ct. at 2015. 13 The Court found that the Commonwealth of Virginia could not be said to have directed the State Bar's anticompetitive activities. The State Bar was unable to point to any state statute requiring the activities in question or even mentioning fees, advisory fee schedules or the kind of minimum price schedule enforced by the State Bar. The Court concluded: 14 It is not enough that, as the County Bar puts it, anticompetitive conduct is prompted by state action; rather, anticompetitive activities must be compelled by direction of the State acting as a sovereign. Id. 15 We read Goldfarb as holding that, absent state authority which demonstrates that it is the intent of the state to restrain competition in a given area, Parker-type immunity or exemption may not be extended to anti-competitive government activities. Such an intent may be demonstrated by explicit language in state statutes, or may be inferred from the nature of the powers and duties given to a particular government entity. We proceed to an analysis of the statutory authority of those defendants-appellees in the light of the foregoing principles.