Court Opinion

ID: 6993711
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:29:29.028859+00
Date Added: 2024-06-11T16:09:41.860165
License: Public Domain

LUTTIG, Circuit Judge,
concurring:
I agree with the majority that TFWS’ suit is not barred by the Eleventh Amendment and that it is inappropriate on the record before us to decide the. Twenty First Amendment question. I also must ultimately agree with the majority that the Maryland statute at issue is preempted by the Sherman Act as a hybrid restraint of trade — at least under the authority of the Supreme Court’s decision in 324 Liquor v. Duffy, 479 U.S. 335, 107 S.Ct. 720, 93 L.Ed.2d 667 (1987). I believe it possible, however, although the State of Maryland certainly does not make the argument, that the Supreme Court in 82k Liquor misunderstood its own prior precedents in Fisher v. City of Berkeley, 475 U.S. 260, 106 S.Ct. 1045, 89 L.Ed.2d 206 (1986), Schwegmann Bros. v. Calvert Distillers Corp., 341 U.S. 384, 71 S.Ct. 745, 95 L.Ed. 1035 (1951), and California Retail Liquor Dealers Ass’n v. Midcal Aluminum, Inc., 445 U.S. 97, 100 S.Ct. 937, 63 L.Ed.2d 233 (1980), in holding that the regulations in that case in fact constituted a so-called hybrid restraint. Under a proper understanding of the precedents upon which 82k Liquor itself was assertedly based, I believe that the regulations at issue in that case — like those in the case before us— represent classic unilateral state action, which is, of course, exempt from the Sherman Act.
As the Supreme Court explained in Fisher, “there can be no liability under § 1 [of the Sherman Act] without an agreement.” Fisher, 475 U.S. at 266, 106 S.Ct. *2141045. Thus, in that case, the Court held that a local ordinance establishing rent controls did not violate the Sherman Act because the ordinance constituted unilateral action by the government, with no agreement between private parties. Id. at 269-70, 106 S.Ct. 1045. And the Court distinguished Schwegmann and Midcal as cases that involved not unilateral action, but, rather, “hybrid” restraints, “where private actors [were] ... granted a degree of private regulatory power,” and state-imposed “nonmarket mechanisms ... enforce[d] private marketing decisions.” Id. at 268-69, 106 S.Ct. 1045. That is, in the Louisiana and California schemes at issue in those cases, private parties independently reached pricing agreements, which the state then authorized and enforced.*
Here, as in Fisher, I believe the Maryland statute is unilateral action because there is no voluntary agreement, independently reached, between private parties that is either authorized or enforced by the state. In fact, there is no “agreement” at all. Rather, and simply, the state imposed requirements upon the private wholesalers unilaterally, that they post and hold, and refrain from volume discounts — requirements which we have no reason to think they themselves would have agreed to independently. For this reason, the Maryland regulations are materially distinguishable from those at issue in Schwegmann and Midcal, in which state action cloaked affirmative, private, anticompetitive business agreements.
I must acknowledge, however, that the Maryland regulations before us are not materially different from the regulations in 32k Liquor, and consequently that the majority cannot be faulted for its conclusion that the former may be properly considered forms of hybrid restraint. But I cannot help but wonder whether the Court in 32k Liquor misunderstood its own precedents in Fisher, Schwegmann, and Mid-cal, in holding that the New York regulations then before the Court really were hybrid, as opposed to unilateral, restraints. The Court’s very brief textual and footnote treatment of the question of whether there was a “ ‘contract, combination ... or conspiracy in restraint of trade,’ ” bordered on the perfunctory. See 324 Liquor, 479 U.S. at 345 & n. 8, 107 S.Ct. 720 (quoting 15 U.S.C. § 1). And the Court did not even attempt to compare and contrast the New York regulations with the various regulatory schemes at issue in Fisher, Schweg-mann, and Midcal. It invoked its observation in Fisher that private actors had been granted “ ‘a degree of private regulatory power,’ ” id. at 345 n. 8, 107 S.Ct. 720 (quoting Fisher, 475 U.S. at 268, 106 S.Ct. 1045), and it seemed thereafter simply to assume uncritically that private parties before them actually had been afforded “a degree of private regulatory power” of the kind that the Court said would be prohibited in Fisher and held was prohibited in Schwegmann and Midcal.
The wholesalers in 32k Liquor indeed did possess “a degree of private regulatory power” as a result of the New York regulation, as do the wholesalers in the present case. But it was not, there, and it is not here, the kind of private regulatory power referenced in Fisher and proscribed in Schwegmann or Midcal. The private regulatory power at issue in those cases was the power of private parties independently to set prices via an agreement — that is, via concerted action. No comparable power was conferred upon the private parties by the state in 32k Liquor. Nor is any such power exercised or authorized here. In my view, this case, like 32k Liquor, involves classic unilateral state action — not hybrid state and private conduct — and Maryland’s regulatory scheme should therefore not be subject to the Sherman Act.
*215I find confirmation of this in the fact that the observation made by the Court in Fisher to contrast the Berkeley regulations from those in Schwegmann and Mid-cal is equally apt here to distinguish the Maryland regulations from the typical hybrid restraint:
A restraint imposed unilaterally by government does not become concerted action within the meaning of the[Sherman Act] simply because it has a coercive effect upon parties who must obey the law. The ordinary relationship between the government and those who must obey its regulatory commands whether they wish to or not is not enough to establish a conspiracy.
Id. at 267,106 S.Ct. 1045.
I would not even raise the issue of the precedential correctness of 321 Liquor but for what I believe is its deceptive significance. Continuation of this interpretive error — if that it be — is not without consequence. Carried forward, what might be wholly unintended could result in significant areas of unilateral state action being' regarded as hybrid state/private action, and therefore potentially in violation of the Sherman Act when it is not, and in derogation of what should be obvious state plenary authority.

 In Schwegmann, a Louisiana statute authorized “a distributor and retailer to make a 'contract' fixing the resale price” and enforced the contract even against a seller who was not a party to it. Schwegmann, 341 U.S. at 386-87, 71 S.Ct. 745 (emphasis added). Likewise, in Midcal, the challenged statute prohibited wine merchants from selling to retailers at a price other than that set "either in an effective price schedule or in an effective fair trade contract.” Midcal, 445 U.S. at 99, 100 S.Ct. 937 (emphasis added).