Court Opinion

ID: 9427118
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:19:47.751166+00
Date Added: 2024-06-11T17:23:05.035854
License: Public Domain

Mr. Chief Justice Burger,
concurring in the Court’s opinion in Part I and in the judgment.
This case turns, or ought to, on the District Court’s explicit conclusion,1 unchallenged here, that “'[t]hese plaintiff cities are engaging in what is clearly a business activity; activity in which a profit is realized.” There is nothing in Parker v. Brown, 317 U. S. 341 (1943), or its progeny, which suggests that a proprietary enterprise with the inherent capacity for economically disruptive anticompetitive effects should be exempt from the Sherman Act merely because it is organized under state law as a municipality. Parker was a case involving a suit against state officials who were administering a state program which had the conceded purpose of replacing competition in a segment of the agricultural market with a regime of governmental regulation. The instant lawsuit is entirely different. It arises because respondent took the perfectly natural step of answering a federal antitrust complaint— *419filed by competitors — with a counterclaim alleging serious violations of the Sherman Act.
There is nothing in this record to support any assumption other than that this is an ordinary dispute among competitors in the same market. It is true that petitioners are municipalities, but we should not ignore the reality that this is the only difference between the Cities and any other entrepreneur in the economic community. Indeed, the injuries alleged in petitioners’ complaint read as a litany of economic woes suffered by a business which has been unfairly treated by a competitor:
“As a direct and proximate result of the unlawful conduct hereinabove alleged, plaintiffs have: (1) been prevented from and continue to be prevented from profitably expanding their businesses; (2) lost and continue to< lose the profits which would have resulted from the operation of an expanded, more efficient and lower cost business; (3) been deprived of and continue to be deprived of economies in the financing and operation of their systems; (4) sustained and continue to sustain losses in the value of their businesses and properties; and (5) incurred and continue to incur excessive costs and expenses they otherwise would not have incurred.” App. 14. (Emphasis added.)
It strikes me as somewhat remarkable to suggest that the same Congress which “meant to deal comprehensively and effectively with the evils resulting from contracts, combinations and conspiracies in restraint of trade,” Atlantic Cleaner & Dyers, Inc. v. United States, 286 U. S. 427, 435 (1932), would have allowed these petitioners to complain of such economic damage while baldly asserting that any similar harms they might unleash upon competitors or the economy are absolutely beyond the purview of federal law. To allow the defense asserted by the petitioners in this case would inject a wholly arbitrary variable into a “fundamental national economic pol*420icy,” Carnation Co. v. Pacific Conference, 383 U. S. 213, 218 (1966), which strongly disfavors immunity from its scope. See United States v. Philadelphia Nat. Bank, 374 U. S. 321, 350-351 (1963); California v. FPC, 369 U. S. 482, 485 (1962).
As I indicated, concurring in Cantor v. Detroit Edison Co., 428 U. S. 579, 604 (1976), “in interpreting Parker, the Court has heretofore focused on the challenged activity, not upon the identity of the parties to the suit.” Such an approach is surely logical in light of the fact that the Congress which passed the Sherman Act very likely never considered the kinds of problems generated by Parker and the cases which have arisen in its wake. E. g., Bates v. State Bar of Arizona, 433 U. S. 350 (1977); Cantor, supra; Goldfarb v. Virginia State Bar, 421 U. S. 773 (1975); see Slater, Antitrust and Government Action: A Formula for Narrowing Parker v. Brown, 69 Nw. U. L. Rev. 71, 84 (1974). It is even more dubious to assume that the Congress specifically focused its attention on the possible liability of a utility operated by a subdivision of a State. Not only were the States generally considered free to regulate commerce within their own borders, see, e. g., United States v. E. C. Knight Co., 156 U. S. 1 (1895); Kidd v. Pearson, 128 U. S. 1 (1888), but manufacturing enterprises, in and of themselves, were not taken to be interstate commerce. Id., at 20.
By the time Parker was decided, however, this narrow view of “interstate commerce” had broadened via the “affection doctrine” to include intrastate events which had a sufficient effect on interstate commerce. See NLRB v. Fainblatt, 306 U. S. 601, 605, and n. 1 (1939); cf. Hospital Building Co. v. Rex Hospital Trustees, 425 U. S. 738, 743 (1976). Given this development, and the Court’s interpretation of “person” or “persons” in the Sherman Act' to include States and municipalities, ante, at 394-397, along with the trend of allowing the reach of the Sherman Act to expand with broadening conceptions of congressional power under the Commerce Clause, see *421Rex Hospital Trustees, supra, at 743 n. 2, one might reasonably wonder how the Court reached its result in Parker.
The holding in Parker is perfectly understandable, though, in light of the historical period in which the case was decided. The Court had then but recently emerged from the era of substantive due process, and was undoubtedly not eager to commence a new round of invalidating state regulatory laws on federal principles. See Verkuil, State Action, Due Process and Antitrust: Reflections on Parker v. Brown, 75 Colum. L. Rev. 328, 331-334 (1975). Responding to this concern, the Parker Court’s interpretation of legislative intent reflects a “polic[y] of signal importance in our national traditions and governmental structure of federalism.” Ante, at 400.
“In a dual system of government in which, under the Constitution, the states are sovereign, save only as Congress may constitutionally subtract from their authority, an unexpressed purpose to nullify a state’s control over its officers and agents is not lightly to be attributed to Congress.” Parker, 317 U. S., at 351.
The Parker decision was thus firmly grounded on principles of federalism, the ambit of its inquiry intoi congressional purpose being defined by the Court’s view of the requirements of “a dual system of government.” 2
This mode of analysis is as sound today as it was then, and I am surprised that neither the plurality opinion nor the dissents focus their attention on this aspect of Parker. Indeed, *422it is even, more puzzling that so much judicial energy is expended here on deciding a question not presented by the parties or by the facts of this case: that is, to what extent the Sherman Act impinges generally upon the monopoly powers of state and local governments. As I suggested at the outset, the issue here is whether the Sherman Act reaches the proprietary enterprises of municipalities.3
The answer to the question presented ought not to be so difficult. When Parker was decided there was certainly no question that a State’s operation of a common carrier, even without profit and as a “public function,” would be subject to federal regulation under the Commerce Clause. United States v. California, 297 U. S. 175, 183-186 (1936) (“[W]e think it unimportant to say whether the state conducts its railroad in its 'sovereign’ or in its 'private’ capacity.” Id., at 183); see Parden v. Terminal R. Co., 377 U. S. 184, 189-193 (1964); California v. Taylor, 353 U. S. 553, 568 (1957). Likewise, it had been held in Ohio v. Helvering, 292 U. S. 360 (1934), that a State, upon engaging in business, became subject to a federal statute imposing a tax on those dealing in intoxicating liquors, although States were not specifically mentioned in the statute. In short, the Court had already recognized, for purposes of federalism, the difference between a State’s entrepreneurial personality and a sovereign’s decision— as in Parker — to replace competition with regulation.4
*423I see nothing in the last 35 years to question this conclusion. In fact, the Court's recent decision in National League of Cities v. Usery, 426 U. S. 833 (1976), which rekindled a commitment to tempering the Commerce Clause power with the limits imposed by our structure of government, employs language strikingly similar to the words of Mr. Chief Justice Stone in Parker:
“It is one thing to recognize the authority of Congress to enact laws regulating individual businesses necessarily subject to the dual sovereignty of the government of the Nation and of the State in which they reside. It is quite another to uphold a similar exercise of congressional authority directed, not to private citizens, but to States as States. We have repeatedly recognized that there are attributes of sovereignty attaching to every state government which may not be impaired by Congress, not because Congress may lack an affirmative grant of legislative authority to reach the matter, but because the Constitution prohibits it from exercising the authority in that manner.” 426 U. S., at 845.
The National League of Cities opinion focused its delineation of the “attributes of sovereignty” alluded to above on a determination as to whether the State's interest involved “ 'functions essential to separate and independent existence.' ” Ibid., *424quoting Coyle v. Oklahoma, 221 U. S. 559, 580 (1911). It should be evident, I would think, that the running of a business enterprise is not an integral operation in the area of traditional government functions. See Alfred Dunhill of London, Inc. v. Cuba, 425 U. S. 682, 695-696 (1976); Bank of United States v. Planters’ Bank of Georgia, 9 Wheat. 904, 907 (1824). Indeed, the reaffirmance of the holding in United States v. California, supra, by National League of Cities, supra, at 854 n. 18, strongly supports this understanding. Even if this proposition were not generally true, the particular undertaking at issue here — the supplying of electric service — has not traditionally been the prerogative of the State. Jackson v. Metropolitan Edison Co., 419 U. S. 345, 352-353 (1974).5
Following the path outlined above should lead us to a logical destination: Petitioners should be treated, for purposes of applying the federal antitrust laws, in essentially the same manner as respondent. This is not to say, of course, that the conduct in which petitioners allegedly engaged is automatically subject to condemnation under the Sherman Act. As the Court recognized in Cantor v. Detroit Edison Co., 428 U. S., at 592-598, state-regulated utilities pose special analytical problems under Parker. It may very well be, for example, that a State, acting as sovereign, has imposed a system of governmental control in order “to avoid the consequences of unre*425strained competition.” Cantor, supra, at 595. This is precisely what occurred in Parker, and there is no question that a utility’s action taken pursuant to the command of such an “act of government,” Parker, 317 U. S., at 352, would not be prohibited by the Sherman Act.
I agree with the plurality, then, that “ [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.” Goldfarb, 421 U. S., at 790. (Emphasis added.) But this is only the first, not the final step of the inquiry, for Cantor recognized that “all economic regulation does not necessarily suppress competition.” 428 U. S., at 595. “There is no logical inconsistency between requiring such a firm to meet regulatory criteria insofar as it is exercising its natural monopoly powers and also to comply with antitrust standards to the extent that it engages in business activity in competitive areas of the economy.” Id., at 596.
I would therefore remand, directing the District Court to take an additional step beyond merely determining — as the plurality would — that any area of conflict between the State’s regulatory policies and the federal antitrust laws was the result of a “state policy to displace competition with regulation or monopoly public service.” 6 Ante, at 413. This supple*426mental inquiry would consist of determining whether the implied exemption from federal law “was necessary in order to make the regulatory Act work, 'and even then only to the minimum extent necessary.’ ” 428 U. S., at 597.7
Mr. Justice Stewart, with whom Mr. Justice White, Mr. Justice Blackmun,* and Mr. Justice Rehnquist join, dissenting.
In Parker v. Brown, 317 U. S. 341, a California statute restricted competition among raisin growers in order to keep the price of raisins artificially high. The Court found that California’s program did not violate the antitrust laws but was “an act of government which the Sherman Act did not undertake to prohibit.” Id., at 352. Parker v. Brown thus made clear that “where a restraint upon trade or monopolization is the result of valid governmental action, as opposed to private action, no violation of the [Sherman] Act can be made out.” Eastern Railroad Presidents Conf. v. Noerr Motor Freight, Inc., 365 U. S. 127, 136.
The principle of Parker v. Brown controls this case. The petitioners are governmental bodies, not private persons, and their actions are “act[s] of government” which Parker v. Brown held are not subject to the Sherman Act. But instead of applying the Parker doctrine, the Court today imposes new *427and unjustifiable limits upon it. According to the plurality, governmental action will henceforth be immune from the antitrust laws1 only when “authorized or directed” by the State “pursuant to state policy to displace competition with regulation or monopoly public service.” Ante, at 414, 413. Such a “direction” from the State apparently will exist only when it can be shown “ 'from the authority given a governmental entity to operate in a particular area, that the legislature contemplated the kind of action complained of.’ ” Ante, at 415. By this exclusive focus on a legislative mandate the plurality has effectively limited the governmental action immunity of the Parker case to the acts of a state legislature. This is a sharp and I think unjustifiable departure from our prior cases.
The Chief Justice adopts a different approach, at once broader and narrower than the plurality’s. In his view, municipalities are subject to antitrust liability when they engage in “proprietary enterprises,” ante, at 422, but apparently retain their antitrust immunity for other types of activity. But a city engaged in proprietary activity is to be treated as if it were a private corporation: that is, it is immune from the antitrust laws only if it shows not merely that its action was “ 'required by the State acting as sovereign’ ” but also that such immunity is “ 'necessary in order to make the [State’s] regulatory Act work.’ ” Ante, at 425, 426. The Chief Justice’s approach seems to me just as mistaken as the plurality’s.
*428I
The fundamental error in the opinions of the plurality and The Chief Justice is their failure to recognize the difference between private activities authorized or regulated by government on the one hand, and the actions of government itself on the other.
A
In determining whether the actions of a political subdivision of a State as well as those of a state legislature are immune from the Sherman Act, we must interpret the provisions of the Act “in the light of its legislative history and of the particular evils at which the legislation was aimed.” Apex Hosiery Co. v. Leader, 310 U. S. 469, 489. Those “particular evils” did not include acts of governmental bodies. Rather, Congress was concerned with attacking concentrations of private economic power unresponsive to public needs, such as “these great trusts, these great corporations, these large moneyed institutions.” 21 Cong. Rec. 2562 (1890).2
Recognizing this congressional intent, the Court in Parker v. Brown held that the antitrust laws apply to private and not governmental action. The program there at issue was in *429fact established by California’s legislature, and not by one of its political subdivisions. But the Court nowhere held that the actions of municipal governments should not equally be immune from the antitrust laws. On the contrary, it expressly equated “the state or its municipality.” 317 U. S., at 351. The Parker opinion repeatedly and carefully3 emphasized that California’s program was not the action of “private persons, individual or corporate.” Id., at 350.4 The distinction established in Parker v. Brown was not one between actions of a state legislature and those of other governmental units. Rather, the Court drew the line between private action and governmental action.
There can be no doubt on which side of this line the petitioners’ actions fall. “Municipal corporations are instrumentalities of the State for the convenient administration of government within their limits.” Louisiana ex rel. Folsom v. Mayor of New Orleans, 109 U. S. 285, 287; cf. Reynolds v. Sims, 377 U. S. 533, 575.5 They have only such powers as are delegated them by the State of which they are a subdivision, and when they act they exercise the State’s sovereign power. Avery v. Midland County, 390 U. S. 474, 480; Breard v. *430Alexandria, 341 U. S. 622, 640. City governments are not unaccountable to the public but are subject to direct popular control through their own electorates and through the state legislature.6 They are thus a far cry from the private accumulations of wealth that the Sherman Act was intended to regulate.
B
The plurality today advances two reasons for holding nonetheless that the Parker doctrine is inapplicable to municipal governments. First, the plurality notes that municipalities cannot claim the State’s sovereign immunity under the Eleventh Amendment. Ante, at 412. But this is hardly relevant to the question of whether they are within the reach of the Sherman Act. That question must be answered by reference to congressional intent, and not constitutional principles that apply in entirely different situations.7 And if constitutional analogies are to be looked to, a decision much more directly related to this case than those under the Eleventh Amendment is National League of Cities v. Usery, 426 U. S. 833. That case, like this one, involved an exercise of Congress’ power under the Commerce Clause, and held that States and their political subdivisions must be given equal deference. Id., at 855-856, n. 20. The plurality does not advance any basis for its disregard of National League of Cities and its *431reliance instead on the basically irrelevant body of law under the Eleventh Amendment.
Secondly, the plurality relies on Goldjarb v. Virginia State Bar, 421 U. S. 773. The Goldjarb case, however, did not overrule Parker v. Brown but rather applied it. Goldjarb concerned a scheme regulating economic competition among private parties, namely, lawyers. The Court held that this “private anticompetitive activity,” 421 U. S., at 792, could not be sheltered under the umbrella of the Parker doctrine unless it was compelled by the State. Since the bar association and State Bar could show no more than that their minimum-fee schedule “complemented” actions of the State, id., at 791, the scheme was not immune from the antitrust laws. Cf. Schwegmann Bros. v. Calvert Distillers Corp., 341 U. S. 384.
Unlike Goldjarb, this case does not involve any anticompetitive activity by private persons. As noted in Bates v. State Bar of Arizona, 433 U. S. 350, 361, actions of governmental bodies themselves present “an entirely different case” falling squarely within the rule of Parker v. Brown. Although the State Bar in Goldjarb was “a state agency for some limited purposes,” 421 U. S., at 791, the price fixing it fostered was for the private benefit of its members and its actions were essentially those of a private professional group. Cf. Asheville Tobacco Board of Trade, Inc. v. FTC, 263 F. 2d 502, 508-510 (CA4). Unlike a city, the Virginia State Bar surely is not “a political subdivision of the State.” 8
By requiring that a city show a legislative mandate for its activity, the plurality today blurs, if indeed it does not erase, this logical distinction between private and governmental action. In Goldfarb and in Cantor v. Detroit Edison Co., 428 U. S. 579, the Court held that private action must be compelled by the state legislature in order to escape the reach of the Sherman Act. State compulsion is an appropriate require*432ment when private persons claim that their anticompetitive actions are not their own but the State’s, since a State cannot immunize private anticompetitive conduct merely by permitting it.9 But it is senseless to require a showing of state compulsion when the State itself acts through one of its governmental subdivisions. See New Mexico v. American Petrofina, Inc., 501 F. 2d 363, 369-370 (CA9).
C
The separate opinion of The Chief Justice does not rely on any distinctions between States and their political subdivisions. It purports to find a simpler reason for subjecting the petitioners to antitrust liability despite the fact that they are governmental bodies, namely, that Parker v. Brown does not protect “a State’s entrepreneurial personality.” Ante, at 422.10 But this distinction is no more substantial a basis for disregarding the governmental action immunity in this case than the reasons advanced by the plurality.
A State may choose to regulate private persons providing certain goods or services, or it may provide the goods and services itself. The State’s regulatory body in the former case, or a state-owned utility in the latter, will necessarily make economic decisions. These decisions may be responsive to similar concerns, and they may have similar anticompetitive effects.11 Yet, according to The Chief Justice, the former *433type of governmental decision is immune from antitrust liability while the latter is not.
There is no basis for this distinction either in the Sherman Act itself or in our prior cases interpreting it. To the contrary, Parker v. Brown established that governmental actions are not regulated by the Sherman Act. See supra, at 428-430. And, as this Court has previously said:
“ ‘Government is not partly public or partly private, depending upon the governmental pedigree of the type of a particular activity or the manner in which the Government conducts it.’ Federal Crop Insurance Corp. v. Merrill, 332 U. S. 380, 383-384. On the other hand, it is hard to think of any governmental activity on the ‘operational level,’ our present concern, which is ‘uniquely governmental,’ in the sense that its kind has not at one time or another been, or could not conceivably be, privately performed.” Indian Towing Co. v. United States, 350 U. S. 61, 67-68.
Nonetheless The Chief Justice would treat some governmental actions as governmental for purposes of the antitrust laws, and some as if they were not governmental at all.
Moreover, the scope of the immunity envisioned by The Chief Justice is virtually impossible to determine. The distinction between “proprietary” and “governmental” activities has aptly been described as a “quagmire.” Id., at 65. The “distinctions [are] so finespun and capricious as to be almost incapable of being held in the mind for adequate formulation.” Id., at 65-68. The separate opinion of The Chief Justice does nothing to make these distinctions any more substantial or understandable.12 Indeed, even a mo-*434merit’s consideration of the range of services provided today by governments shows how difficult it is to determine whether or not they are “proprietary.” For example, if a city or State decides to provide water service to its citizens at cost on a monopoly basis, is its action to be characterized as “proprietary”? Whether it is “proprietary” or not, it is surely an act of government, as are the petitioners’ actions in this case. Cf. Lowenstein v. Evans, 69 F. 908 (CC S. C.).13 But The Chief Justice, like the plurality, ignores what seems to me the controlling distinction in this case, that between private and governmental action.
II
The Court’s decision in this case marks an extraordinary intrusion into the operation of state and local government in this country. Its impact can hardly be overstated.
A
Under our federal system, a State is generally free to allocate its governmental power to its political subdivisions as it wishes.14 A State may decide to permit its municipalities to exercise its police power without having to obtain approval of each law from the legislature.15 Such local self-government *435serves important state interests. It allows a state legislature to devote more time to statewide problems without being burdened with purely local matters, and allows municipalities to deal quickly and flexibly with local problems. But today’s decision, by demanding extensive legislative control over municipal action, will necessarily diminish the extent to which a State can share its power with autonomous local governmental bodies.
This will follow from the plurality’s emphasis on state legislative action, and the vagueness of the criteria it announces.16 First, it is not clear from the plurality opinion whether a municipal government’s actions will be immune from the Sherman Act if they are merely “authorized” by a state legislature or whether they must be legislatively “directed” in order to enjoy immunity. While the plurality uses these terms interchangeably, they can have very different meanings. See Cantor v. Detroit Edison Co., 428 U. S., at 592-593. A municipality that is merely “authorized” by a state statute to provide a monopoly service thus cannot be certain it will not be subject to antitrust liability if it does so.
Second, the plurality gives no indication of how specifically the legislature’s “direction” must relate to the “action complained of.” Reference to the facts of this case will show how elusive the plurality’s test is. Stripped to its essentials, the counterclaim alleged that the petitioners engaged in sham litigation, maintained their monopolies by debenture covenants, foreclosed competition by long-term supply contracts, *436and tied the sale of gas and water to the sale of electricity. Broadly speaking, these actions could be characterized as bringing lawsuits, issuing bonds, and providing electric and gas service, all of which are activities authorized by state statutes.17 But in affirming the judgment of the Court of Appeals the Court makes evident that it does not consider these statutes alone a sufficient “mandate” to the cities.
On the other hand, the plurality states that a city need not “point to a specific, detailed legislative authorization before it properly may assert a Parker defense to an antitrust suit.” Ante, at 415. Thus, it seems that the petitioners need not identify a statute compelling each lawsuit, each contract, and each debenture covenant.18 But what intermediate showing *437of legislative authorization, approval, or command will meet the plurality’s test I am unable to fathom.19
Finally, state statutes often are enacted with little recorded legislative history,20 and the bare words of a statute will often be unilluminating in interpreting legislative intent. For example, do the Louisiana statutes permitting the petitioners to operate public utilities21 “contemplate” that the petitioners might tie the sale of gas to the sale of electricity? Do those statutes, indeed, “contemplate” that electric service will be provided to city residents on a monopoly basis? Without legislative history or relevant statutory language, any answer to these questions would be purely a creation of judicial imagination.22
*438As a practical result of the uncertainties in today’s opinions,23 and of the plurality’s emphasis on state legislative action, a prudent municipality will probably believe itself compelled to seek passage of a state statute requiring it to engage in any activity which might be considered anticompetitive. Each time a city grants an exclusive franchise, or chooses to provide a service itself on a monopoly basis, or refuses to grant a zoning variance to a business,24 or even — as alleged in this case — brings litigation on behalf of its citizens, state legislative action will be necessary to ensure that a federal court will not subsequently decide that the activity was not “contemplated” by the legislature. Thus, the effect of today’s decision is greatly to impair the ability of a State to delegate governmental power broadly to its municipalities.25 Such extensive interference with the fundamentals of state government is not a proper function of the federal judiciary.26
B
Today’s decision will cause excessive judicial interference not only with the procedures by which a State makes its governmental decisions, but with their substance as well. *439States should be “accorded wide latitude in the regulation of their local economies,” New Orleans v. Dukes, 427 U. S. 297, 303, and in “the manner in which they will structure delivery of those governmental services which their citizens require.” National League of Cities v. Usery, 426 U. S., at 847. The antitrust liability the Court today imposes on municipal governments will sharply limit that latitude.
First, the very vagueness and uncertainty of the new test for antitrust immunity is bound to discourage state agencies and subdivisions in their experimentation with innovative social and economic programs.27 In the exercise of their powers local governmental entities often take actions that might violate the antitrust laws if taken by private persons, such as granting exclusive franchises, enacting restrictive zoning ordinances, and providing public services on a monopoly basis. But a city contemplating such action in the interest of its citizens will be able to do so after today only at the risk of discovering too late that a federal court believes that insufficient statutory “direction” existed, or that the activity is “proprietary” in nature.
Second, the imposition of antitrust liability on the activities of municipal governments will allow the sort of wide-ranging inquiry into the reasonableness of state regulations that this Court has forsworn.28 For example, in New Orleans v. Dukes, supra, a city ordinance which, to preserve the character of a historic area, prohibited the sale of food from pushcarts unless the vendor had been in business for at least eight years, was challenged under the Equal Protection Clause of the Fourteenth Amendment. The Court upheld the constitutional validity of the ordinance. But it now appears that if Dukes had proceeded under the antitrust laws and claimed that the ordinance was an unreasonably anticompetitive limit *440on the number of pushcart vendors, he might well have prevailed unless New Orleans could establish that the Louisiana Legislature “contemplated” the exclusion of all but a few pushcart vendors from the historic area. The “wide latitude” of the States “in the regulation of their local economies,” exercised in Dukes by the city to which this power to regulate had been delegated, could thus be wholly stifled by the application of the antitrust laws.
C
Finally, today’s decision will impose staggering costs on the thousands of municipal governments in our country. In this case, a not atypical antitrust action, the respondent claimed that it had suffered damages of $180 million as a result of only one of the antitrust violations it alleged. Trebled, this amounts to $540 million on this claim alone, to be recovered from cities with a combined population (in 1970) of about 75,000.29 A judgment of this magnitude would assure bankruptcy for almost any municipality against which it might be rendered.30 Even if the petitioners ultimately prevail, their citizens will have to bear the rapidly mounting *441costs of antitrust litigation through increased taxes or decreased services.31 The prospect of a city closing its schools, discharging its policemen, and curtailing its fire department in order to defend an antitrust suit would surely dismay the Congress that enacted the Sherman Act.32
For all of the reasons discussed in this opinion, I respectfully dissent.

 The District Court did not, of course, make a formal finding of fact to this effect since the counterclaim was disposed of on the basis of pleadings. Nonetheless, the District Court could reasonably conclude, as a matter of law, that these ..Cities are engaging in business activities which have as their aim the production of revenues in excess of costs. It certainly is the case that the Cities are attempting to provide a public service, but it is likewise undeniable that they seek to do so in the most profitable way. The Cities allege in their complaint, for, example, that they have “been prevented from profitably expanding their businesses.” App. 14. While it is correct that the Cities are ordinarily constrained from applying their net earnings as a private corporation would, this does not detract from their competitive posture .and resulting incentive to engage in anticompetitive practices.

 Our conceptions of the limits imposed by federalism are bound to evolve, just as our understanding of Congress' power under the Commerce Clause has evolved. Consequently, since we find it appropriate to allow the ambit of the Sherman Act to expand with evolving perceptions of congressional power under the Commerce Clause, a similar process should occur with respect to “state action’^ analysis under Parker. That is, we should not treat the result in the Parker case as cast in bronze; rather, the scope of the Sherman Act's power should parallel the developing concepts of American federalism.

 1 use the term “proprietary” only to focus attention on the fact that all of the parties are in a competitive relationship such that each should be constrained, when necessary, by the federal antitrust laws. It is highly unlikely that Congress would have meant to impose liability only on some of these parties, when each possesses the means to thwart federal antitrust policy.

 Mr. Justice Stewart’s dissent, post, at 433-434, attempts to blunt this analysis by noting that the “nongovernmental-governmental” distinction was criticized in Indian Towing Co. v. United States, 350 U. S. 61 (1955). I suggest no more, however, than what is obvious from our past cases: Petitioners’ business activities are not entitled to per se exemption from the *423Sherman Act. This much ought to be quite clear from United States v. California, 297 U. S. 175 (1936), where the State operated a railroad, albeit without profit, and as a “public function.” I cannot comprehend why the Cities here should be treated in a different manner. The only authority which Mr. Justice Stewart cites to the contrary, Lowenstein v. Evans, 69 F. 908 (CC SC 1895), was a case in which a State’s complete monopolization of the liquor industry was challenged as violating the Sherman Act. But in that circumstance the State clearly directed the creation of a monopoly, thus bringing the matter within the Parker rationale. Compare Ohio v. Helvering, 292 U. S. 360 (1934).

 Such an ascertainment dovetails precisely with the law of Louisiana. There it is recognized that the powers of a municipal corporation are both public and private: As to the former, the city represents the State, discharging duties incumbent upon the State; as to the latter, it represents pecuniary and proprietary interests of individuals, and is held to the same responsibility as a private person. Hall v. Shreveport, 157 La. 589, 594, 102 So. 680, 681 (1925). A long line of Louisiana cases dealing explicitly with the subject of municipally owned electrical utilities holds that cities are to be governed by the same rules applicable to private corporations and individuals. See Hicks v. City of Monroe Utilities Comm’n, 237 La. 848, 112 So. 2d 635 (1959); Elias v. Mayor of New Iberia, 137 La. 691, 69 So. 141 (1915); Hart v. Lake Providence, 5 La. App. 294 (1926); Bannister v. City of Monroe, 4 La. App. 182 (1926).

 While I agree with the plurality that a State may cause certain activities to be exempt from the federal antitrust laws by virtue of an articulated policy to displace competition with regulation, I would require a strong showing on the part of the defendant that the State so intended. Thus, I would not be satisfied, as the plurality and Court of Appeals apparently are, that the highest policymaking body in the State of Louisiana merely “contemplated” the activities being undertaken by the cities. See ante, at 415. I would insist, as the Court did in Goldfarrb v. Virginia State Bar, 421 U. S. 773, 791 (1975), that the State compel the anticompetitive activity. Moreover, I would have the Cities demonstrate that the exemption was not only part of a regulatory scheme to supersede competition, but that it was essential to the State’s plan. Consequently, *426I do nob disagree with the terms of the plurality’s remand as such; I would simply ask for a stronger showing on the part of the Cities. I join the judgment, however, and the directions of the remand, because they represent at a minimum what I believe we should demand of petitioners.

 In Cantor this mode of analysis effectively answered Detroit Edison’s claim that it was required by state law to engage in the allegedly anticompetitive activities. We “infer[red] that the State’s policy [was] neutral on the question whether a utility should, or should not, have such a program,” 428 U. S., at 585 (opinion of Stevens, J.) (emphasis added), 604M305 (opinion of Burger, C. J.), and consequently it could not be said that an exemption “was necessary in order to make the regulatory Act work.”

 As the plurality acknowledges, ante, at 393 n. 8, Parker v. Brown did not create any exemption from the antitrust laws, but simply recognized that it was the intent of Congress that the Sherman Act should not apply to governmental action. It is thus hard to understand why the plurality invokes the doctrine that exemptions from the antitrust laws will not be lightly implied by subsequent enactment of a regulatory statute. This rule, which effects the accommodation of two federal statutes and rests on the principle that implied repeals are not favored, has no relevance to the Parker doctrine, which is based on an interpretation of the Sherman Act itself.

 See also, e. g., 20 Cong. Rec. 1458 (1889) (“the practice, now becoming too common, of large corporations, and of single persons, too, of large wealth, so arranging that they dictate to the people of this country what they shall pay when they purchase, and what they shall receive when they sell”); 21 Cong. Rec. 2728 (1890) (“t-ransaction[s] the only purpose of which is to extort from the community, monopolize, segregate, and apply to individual use, for the purposes of individual greed, wealth which ought properly and lawfully and for the public interest to be generally diffused over the whole community”); id., at 3147 (remarles of Sen. George).
That the Sherman Act was enacted to deal with combinations of individuals and corporations for private business advantage has long been recognized by this Court. Eastern Railroad Presidents Conf. v. Noerr Motor Freight, Inc., 365 U. S. 127, 135-136; Apex Hosiery Co. v. Leader, 310 U. S., at 492-493, and n. 15; Standard Oil Co. v. United States, 221 U. S. 1, 50, 58.

 See Cantor v. Detroit Edison Co., 428 U. S. 579, 591, and n. 24.

 The Court assumed that California’s program would violate the Sherman Act “if it were organized and made effective solely by virtue of a contract, combination or conspiracy of private persons, individual or corporate,” but noted that the program “was never intended to operate by force of individual agreement or combination.” 317 U. S., at 350. The Court found nothing in the Sherman Act or its legislative history to suggest that “it was intended to restrain state action or official action directed by a state”; rather, the Act was intended “to suppress combinations to restrain competition and attempts to monopolize by individuals and corporations.” Id,., at 351. It was “a prohibition of individual and not state action.” Id., at 352.

 See also, e. g., Trenton v. New Jersey, 262 U. S. 182, 185-186; Hunter v. Pittsburgh, 207 U. S. 161, 178; The Mayor v. Bay, 19 Wall. 468, 475; Bradford v. Shreveport, 305 So. 2d 487 (La.).

 Cf. Barnes v. District of Columbia, 91 U. S. 540, 544-545; The Mayor v. Bay, supra, at 475; East Hartford v. Hartford Bridge Co., 10 How. 511. Under Louisiana law the petitioners’ powers are subject to complete legislative control. See Bradford v. Shreveport, supra.

 That the particular factual and legal context is all important is shown by the fact that under other provisions of the Constitution a municipality is equated with a State. E. g., Waller v. Florida, 397 U. S. 387 (Double Jeopardy Clause); Avery v. Midland County, 390 U. S. 474, 480 (Fourteenth Amendment); Trenton v. New Jersey, supra (Impairment of Contract Clause). See also Doran v. Salem Inn, Inc., 422 U. S. 922, 927 n. 2 (28 U. S. C. §1254 (2)).

 Worcester v. Street R. Co., 196 U. S. 539, 548.

 See Schwegmann Bros. v. Calvert Distillers Corp., 341 U. S. 384; Northern Securities Co. v. United States, 193 U. S. 197, 346.

 However, the District Court’s “conclusion,” ante, at 418, that the petitioners’ electric utility service was a business activity engaged in for profit was not supported by any evidence (since the case was decided on a motion to dismiss) and is indeed challenged here by the petitioners in their reply brief.

 Of course, the fact — heavily relied upon both by the plurality and The Chief Justice — that the actions of cities may have anticompetitive effects misses the point. The whole issue before the Court today is whether conduct that would concededly subject a private individual to liability *433because of its anticompetitive nature is proscribed by the antitrust laws when undertaken by a city.

 In various places, the separate opinion of The Chief Justice refers to “ ‘business activities] ... in which a profit is realized/ ” to “pro*434prietary enterprises,” to activities which have “the inherent capacity for economically disruptive anticompetitive effects,” to those which are not “integral operation [s] in the area of traditional government functions,” and to those not “the prerogative of the State.”

 This case, involving a state liquor monopoly, was cited with approval in Parker v. Brown, 317 U. S., at 352.

 See, e. g., Lockport v. Citizens for Community Action, 430 U. S. 259, 269; Avery v. Midland County, 390 U. S., at 481-482.

 Local self-government is broadest in “home rule” municipalities, which can be almost entirely free from legislative control in local matters. See Vanlandingham, Municipal Home Rule in the United States, 10 Wm. & Mary L. Rev. 269 (1968). Although the petitioners are not home rule cities, Louisiana’s Constitution has a home rule provision, La. Const. of 1974, Art. 6, §§ 5, 6; La. Const. of 1921, Art. XIV, §§22, 40 (e), as *435do the constitutions or statutes of at least 33 other States. Note, Antitrust Law and Municipal Corporations, 65 Geo. L. J. 1547, 1559 n. 77 (1977).

 While The Chief Justice has not joined those portions of the plurality opinion that discuss what is necessary to show that a challenged activity was required by the State, he would apparently require a still stronger, and hence less justifiable, showing of state legislative compulsion. Ante, at 425-426, n. 6.

 La. Rev. Stat. Ann. § 33:621 (West 1951):
“The inhabitants of the city shall continue a body politic and corporate by its present name and, as such, . . . may sue and be sued; . . . may acquire by condemnation or otherwise, construct, own, lease, and operate and regulate public utilities within or without the corporate limits of the city subject only to restrictions imposed by general law for the protection of other communities; . . . [and] may borrow money on the faith and credit of the city by issue or sale of bonds, notes, or other evidences of debt
See also La. Rev. Stat. Ann. §§ 33:1326 (West 1951), 33:4162, 33:4163 (West 1966).

 The plurality’s suggestion that the Louisiana Legislature has expressed a state policy that the activities of cities should be subject to the antitrust laws, ante, at 414-415, n. 44, and 416, is both erroneous and irrelevant. Louisiana Rev. Stat. Ann. § 33:1334 (G) (West Supp. 1977) applies not to municipalities but only to utility commissions created jointly by several cities or counties; there is no comparable statute applicable to the petitioners. Moreover, the applicability of the federal antitrust laws is a matter of federal, not state, law; conversely, a State’s restrictions on municipal action are a matter of state, not federal, law. A State can no more bring a person’s conduct within the coverage of federal law when Congress has not done so than it can exempt a person’s conduct from the operation of federal law if Congress has provided otherwise. Cf. Schwegmann Bros. v. Calvert Distillers Corp., 341 U. S. 384.

 The Court imposes yet another unwarranted limitation upon governmental immunity from the antitrust laws. Apparently, a municipality can claim immunity only if the state legislature has mandated its action “pursuant to state policy to displace competition with regulation or monopoly public service.” Ante, at 413 (plurality opinion); see ante, at 425 (opinion of Burger, C. J.). Even had the Louisiana State Legislature passed a law specifically compelling the petitioners to litigate in an effort to prevent respondent from constructing its nuclear generating facility, compelling them to insert restrictive covenants in their debentures, and compelling the tying arrangements complained of, could such a law fairly be described as “displac[ing] competition with regulation or monopoly public service”? Would the Court thus deny the cities immunity for their actions even if they were compelled by the State which controlled them?

 See M. Price & H. Bitner, Effective Legal Research 73, 103 (3d ed. 1969).

 See n. 17, supra.

 This problem of statutory interpretation is exacerbated by the fact that today’s decision will have “retroactive” application in two senses. First, antitrust liability can be premised on actions that have occurred in the past. Second, many of the statutes governing contemporary and future municipal activities were enacted years ago. Thus, municipalities will b'e faced with the difficult problem of establishing their antitrust immunity based on statutes that were enacted without any foreknowledge of the criteria announced by the Court today.

 The vagueness of the test proposed in the separate opinion of The Chief Justice, see supra, at 433-434, will only add to the confusion of a city trying to protect itself from antitrust liability.

 See Whitworth v. Perkins, 559 F. 2d 378 (CA5).

 By imposing antitrust liability on “proprietary” governmental activities, the test adopted in the opinion of The Chief Justice would further deter States from choosing to provide services themselves rather than regulating others.

 See Sailors v. Board of Education, 387 U. S. 105; Williams v. Eggleston, 170 U. S. 304, 310; see also Baker v. Carr, 369 U. S. 186, 289-290, and n. 23, and cases cited (Frankfurter, J., dissenting).
The plurality’s emphasis on legislative action also leaves in doubt the status of state delegations of power to administrative agencies, unless they, too, can show that the legislature “directed” their actions. This, of course, defeats the whole purpose of establishing such agencies.

 See New State Ice Co. v. Liebmann, 285 U. S. 262, 311 (Brandeis, J., dissenting).

 Ferguson v. Skrupa, 372 U. S. 726.

 U. S. Department of Commerce, Burean of the Census, 1970 Census of Population, Number of Inhabitants, United States Summary, Table 31 (1971).

 The Court indicates that the remedy of treble damages might not be “appropriate” in antitrust actions against a municipality. Ante, at 401-402, and n. 22. But the language of § 4 of the Clayton Act, 15 U. S. C. § 15 (1976 ed.), is mandatory on its face: It requires that "[a]ny person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws . . . shall recover threefold the damages by him sustained” (emphasis supplied). Cf., e. g., 35 U. S. C. § 284. And the legislative history cited by Mr. Justice Blackmun, post, at 443 n. 2, demonstrates that Congress has understood the treble-damages provision to be mandatory and has refused to change it. The Court does not say on what basis a district court could possibly disregard this clear statutory command. Cf. Perma Life Mufflers, Inc. v. International Parts Corp., 392 U. S. 134.

 Legal fees to defend one current antitrust suit have been estimated as at least one-half million dollars a month. N. Y. Times, June 27, 1977, p. 41, col. 6; id., Sept. 4, 1977, section 3, p. 5, col. 1.

 Treble-damages liability can, of course, be ruinous to a private corporation as well. But a private corporation, organized for the purpose of seeking private profit, is surely very different from a city providing essential governmental functions, and shareholders do not stand in the same relation to their corporation as do residents or taxpayers to the city in which they live. An investment in a corporation is essentially a business decision; a shareholder takes the risks of corporate losses in the hope of corporate profits. A citizen’s relationship to his city government is obviously far different. .