Embracing both faces of antitrust federalism: Parker and Arc America Corp.

Antitrust Law Journal

Volumn 68, Issue 1, 2000, Pages 29-44

  Burns, Jean Wegman ^a  

^a NONE

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EID: 0034399166     PISSN: 00036056     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (103)

1. 317 U.S. 341 (1943).
2. The Supreme Court has recently ruled upon the effects of federalism in federal labor, patent, and advertising law. See Alden v. Maine, 119 S. Ct. 2240 (1999) (dealing with federalism in a federal labor law case); College Savings Bank v. Florida Prepaid Postsecondary Education Expense Bd., 119 S. Ct. 2219 (1999) (applying federalism to a federal patent law case); Florida Prepaid Postsecondary Education Expense Bd. v. College Savings Bank, 119 S. Ct. 2199 (1999) (usingfederalism in deciding aLanham Act case). The ramifications of these decisions on antitrust law are discussed infra Part IV.
3. For a description of the two principal economic views of antitrust today (the Chicago School and the post-Chicago School), see Michael S. Jacobs, An Essay on the Normative Foundations of Antitrust Economics, 74 N.C. L. REV. 219, 226-32, 240-50 (1995).
4. See Jean Wegman Burns, Vertical Restraints, Efficiency, and the Real World, 62 FORDHAM L. REV. 597 (1993).
5. Parker, 317 U.S. at 350-52.
6. Id. at 350.
7. Id. at 351.
8. Id.
9. The line between state immunity from suit and state freedom from federal preemption is thin, if present at all. See HERBERT HOVENKAMP, FEDERAL ANTITRUST POLICY § 20.1 at 723 (2d ed. 1999) ("[T]he same fundamental concern underlies both preemption and the 'state action' [immunity] doctrine - namely that states will authorize unsupervised private conduct that impairs competition. A more forthright approach would be to merge the two . . . .").
10. See infra note 49 and accompanying text.
11. See HOVENKAMP, supra note 9, at 723 ("If the challenged statute does not compel what amounts to a per se violation, then it is usually not preempted.").
12. 490 U.S. 93 (1989).
13. Id. at 101-05. ARC California dealt specifically with the right of states to provide remedies in their state antitrust laws that supplement those in the federal law. However, the same principles of federalism allow states to supplement antitrust remedies through state statutory and common law relating to the larger area of unfair trade practices. See HOVENKAMP, supra note 9, at 723; Herbert Hovenkamp, State Antitrust in the Federal Scheme, 58 IND. L.J. 375, 378-79 (1983);
14. James May, The Role of the States in the First Century of the Sherman Act and the Larger Picture of Antitrust History, 59 ANTITRUST L.J. 93, 98 (1990).
15. 15 U.S.C. § 15.
16. Id. § 15(c)(a).
17. Id. § 16. Such equitable actions are also based on a state's common law right to represent its residents in a parens patriae capacity. However, for clarity, I refer to the state's statutory right to sue for damages in parens patriae cases as "parens patriae" cases and refer to the equitable representative actions as "equitable actions."
18. See Business Elecs. Corp. v. Sharp Elecs. Corp., 485 U.S. 717, 725 (1988).
19. For instance, the Assistant Attorney General in charge of the Department of Justice's Antitrust Division, 1981-83, stated: "[A]ll vertical arrangements should generally be presumed benign." William F. Baxter, The Viability of Vertical Restraints Doctrine, 75 CAL. L. REV. 933, 947 (1987); see also John J. Flynn, "Reaganomics" and Antitrust Enforcement: A Jurisprudential Critique, 1983 UTAH L. REV. 269, 289-94 (describing and critiquing the federal approach to vertical restraints). For a description of the Chicago School approach, see Richard A. Posner, The Chicago School of Antitrust Analysis, 127 U. PA. L. REV. 925 (1979). For more recent articles supporting the Chicago School approach, see Wesley J. Liebler, Resale Price Maintenance and Consumer Welfare: Business Electronics Corp. v. Sharp Electronics Corp., 36 UCLA L. REV. 889 (1989); Joseph G. Sidak, Debunking Predatory Innovation, 83 COLUM. L. REV. 1121, 1136-137 (1983).
20. For instance, the Assistant Attorney General in charge of the Department of Justice's Antitrust Division, 1981-83, stated: "[A]ll vertical arrangements should generally be presumed benign." William F. Baxter, The Viability of Vertical Restraints Doctrine, 75 CAL. L. REV. 933, 947 (1987); see also John J. Flynn, "Reaganomics" and Antitrust Enforcement: A Jurisprudential Critique, 1983 UTAH L. REV. 269, 289-94 (describing and critiquing the federal approach to vertical restraints). For a description of the Chicago School approach, see Richard A. Posner, The Chicago School of Antitrust Analysis, 127 U. PA. L. REV. 925 (1979). For more recent articles supporting the Chicago School approach, see Wesley J. Liebler, Resale Price Maintenance and Consumer Welfare: Business Electronics Corp. v. Sharp Electronics Corp., 36 UCLA L. REV. 889 (1989); Joseph G. Sidak, Debunking Predatory Innovation, 83 COLUM. L. REV. 1121, 1136-137 (1983).
21. For instance, the Assistant Attorney General in charge of the Department of Justice's Antitrust Division, 1981-83, stated: "[A]ll vertical arrangements should generally be presumed benign." William F. Baxter, The Viability of Vertical Restraints Doctrine, 75 CAL. L. REV. 933, 947 (1987); see also John J. Flynn, "Reaganomics" and Antitrust Enforcement: A Jurisprudential Critique, 1983 UTAH L. REV. 269, 289-94 (describing and critiquing the federal approach to vertical restraints). For a description of the Chicago School approach, see Richard A. Posner, The Chicago School of Antitrust Analysis, 127 U. PA. L. REV. 925 (1979). For more recent articles supporting the Chicago School approach, see Wesley J. Liebler, Resale Price Maintenance and Consumer Welfare: Business Electronics Corp. v. Sharp Electronics Corp., 36 UCLA L. REV. 889 (1989); Joseph G. Sidak, Debunking Predatory Innovation, 83 COLUM. L. REV. 1121, 1136-137 (1983).
22. For instance, the Assistant Attorney General in charge of the Department of Justice's Antitrust Division, 1981-83, stated: "[A]ll vertical arrangements should generally be presumed benign." William F. Baxter, The Viability of Vertical Restraints Doctrine, 75 CAL. L. REV. 933, 947 (1987); see also John J. Flynn, "Reaganomics" and Antitrust Enforcement: A Jurisprudential Critique, 1983 UTAH L. REV. 269, 289-94 (describing and critiquing the federal approach to vertical restraints). For a description of the Chicago School approach, see Richard A. Posner, The Chicago School of Antitrust Analysis, 127 U. PA. L. REV. 925 (1979). For more recent articles supporting the Chicago School approach, see Wesley J. Liebler, Resale Price Maintenance and Consumer Welfare: Business Electronics Corp. v. Sharp Electronics Corp., 36 UCLA L. REV. 889 (1989); Joseph G. Sidak, Debunking Predatory Innovation, 83 COLUM. L. REV. 1121, 1136-137 (1983).
23. For instance, the Assistant Attorney General in charge of the Department of Justice's Antitrust Division, 1981-83, stated: "[A]ll vertical arrangements should generally be presumed benign." William F. Baxter, The Viability of Vertical Restraints Doctrine, 75 CAL. L. REV. 933, 947 (1987); see also John J. Flynn, "Reaganomics" and Antitrust Enforcement: A Jurisprudential Critique, 1983 UTAH L. REV. 269, 289-94 (describing and critiquing the federal approach to vertical restraints). For a description of the Chicago School approach, see Richard A. Posner, The Chicago School of Antitrust Analysis, 127 U. PA. L. REV. 925 (1979). For more recent articles supporting the Chicago School approach, see Wesley J. Liebler, Resale Price Maintenance and Consumer Welfare: Business Electronics Corp. v. Sharp Electronics Corp., 36 UCLA L. REV. 889 (1989); Joseph G. Sidak, Debunking Predatory Innovation, 83 COLUM. L. REV. 1121, 1136-137 (1983).
24. Beginning with Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36 (1977), where the Supreme Court held that nonprice vertical restraints are to be judged under the rule of reason, the Court has made it substantially more difficult for a dealer to win a vertical case. In Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752 (1984), the Court raised the standard of what was necessary to prove the agreement element in a vertical case. In Business Electronics Corp. v. Sharp Electronics Corp., 485 U.S. 717 (1988), the Court raised the standard for the "fixing prices" element in a vertical case. In Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328 (1990), it ruled that a dealer lacked standing to challenge a rival company's maximum vertical price fixing. See Burns, supra note 4, at 610-16; Mark E. Roszkowski, The Sad Legacy of GTE Sylvania and Its "Rule of Reason": The Dealer Termination Cases and the Demise of Section 1 of the Sherman Act, 22 CONN. L. REV. 129, 183-86 (1989). Maxwell Blecher summed up the attitude of the plaintiffs' bar by saying that when dealers came to him with vertical restraint cases, "we give them a cold cup of coffee, validate their parking, and get them out pretty quickly." ABA Antitrust Spring Meeting Focuses on Federal, State, Foreign Enforcement, Antitrust & Trade Reg. Rep. (BNA) No. 1512, at 533 (Apr. 18, 1991).
25. Beginning with Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36 (1977), where the Supreme Court held that nonprice vertical restraints are to be judged under the rule of reason, the Court has made it substantially more difficult for a dealer to win a vertical case. In Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752 (1984), the Court raised the standard of what was necessary to prove the agreement element in a vertical case. In Business Electronics Corp. v. Sharp Electronics Corp., 485 U.S. 717 (1988), the Court raised the standard for the "fixing prices" element in a vertical case. In Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328 (1990), it ruled that a dealer lacked standing to challenge a rival company's maximum vertical price fixing. See Burns, supra note 4, at 610-16; Mark E. Roszkowski, The Sad Legacy of GTE Sylvania and Its "Rule of Reason": The Dealer Termination Cases and the Demise of Section 1 of the Sherman Act, 22 CONN. L. REV. 129, 183-86 (1989). Maxwell Blecher summed up the attitude of the plaintiffs' bar by saying that when dealers came to him with vertical restraint cases, "we give them a cold cup of coffee, validate their parking, and get them out pretty quickly." ABA Antitrust Spring Meeting Focuses on Federal, State, Foreign Enforcement, Antitrust & Trade Reg. Rep. (BNA) No. 1512, at 533 (Apr. 18, 1991).
26. See Robert M. Langer, A Cautionary Tale: State Enforcer's Perspective on Vertical Restraints, ANTITRUST, Spring 1994, at 9 ("During the 1980s it was the states that constantly reminded the . . . antitrust world that vertical restraints were not of historical interest only. The states did so, notjust with tough talk, but with action. The many national resale price maintenance cases of the Multistate Antitrust Task Force of NAAG [National Association of Attorneys General] have returned tens of millions of dollars to consumers."); see also May, supra note 13, at 99.
27. Well-established and sophisticated consumer organizations, such as Consumers Union, the American Association of Retired Persons, Consumer Federation of America, the National Council of Senior Citizens, and Public Citizen's Congress Watch, all publicly supported moves to strengthen the federal antitrust laws regarding vertical pricing restraints. For a summary of the action of the state attorneys general and the consumer dislike of vertical pricing restraints and distrust of the Chicago economic efficiency model, see Burns, supra note 4, at 630-37.
28. See, e.g., Toy Retailer and Makers Settle State Claims with Cash and Toy Giveaways to Children, 76 Antitrust & Trade Reg. Rep. (BNA) No. 1912, at 620 (June 3, 1999) (reporting payment of over $50 million by toy manufacturers to settle a vertical price-fixing case brought by 44 state AGs); New York v. Reebok Int'l, 96 F.3d 44 (2d Cir. 1996) (affirming settlement of 50 state parens patriae actions under which defendants agreed to pay $9.5 million in damages and expenses). For a listing of earlier State AG cases, see Burns, supra note 4, at 636-37 n.174.
29. 495 U.S. 271 (1990).
30. Id. at 284-85. The Court made its ruling despite arguments from the federal government that state lawsuits would destroy predictability and reduce the FTC's negotiating strength in the merger field. Id. at 297 (Kennedy, J., concurring).
31. See Cargill, Inc. v. Monfort of Colo., Inc., 479 U.S. 104 (1986) (holding that competitor lacks standing to enjoin merger of two rivals absent a showing of likely post-merger exclusionary conduct); Brunswick Corp v. Pueblo Bowl-O-Mat, 429 U.S. 477, 481-83 (1977) (holding that competitor lacked standing to seek damages due to merger involving rival where no evidence indicated competition would be injured); see also Joseph F. Brodley, Antitrust Standing in Private Merger Cases: Reconciling Private Incentives and Public Enforcement Goals, 94 MICH. L. REV. 1, 3-10 (1995).
32. See Brodley, supra note 25, at 35-38.
33. In particular, the states showed greater concern for the impact of mergers on employment and consumer prices than the federal agencies did. See David W. Barnes, Federal and State Philosophies in the Antitrust Law of Mergers, 56 GEO. WASH. L. REV. 263 (1988) (comparing the 1984 DOJ Merger Guidelines with those adopted by NAAG in 1987); Jonathan Ross, State Antitrust Enforcement, Mergers, and Politics, 41 WAYNE L. REV. 71, 81-87 (1994) (comparing the 1993 NAAG Guidelines with the 1992 U.S. Merger Guidelines).
34. In particular, the states showed greater concern for the impact of mergers on employment and consumer prices than the federal agencies did. See David W. Barnes, Federal and State Philosophies in the Antitrust Law of Mergers, 56 GEO. WASH. L. REV. 263 (1988) (comparing the 1984 DOJ Merger Guidelines with those adopted by NAAG in 1987); Jonathan Ross, State Antitrust Enforcement, Mergers, and Politics, 41 WAYNE L. REV. 71, 81-87 (1994) (comparing the 1993 NAAG Guidelines with the 1992 U.S. Merger Guidelines).
35. See Walter Adams & James W. Brock, Antitrust, Ideology, and the Arabesque of Economic Theory, 66 U. COLO. L. REV. 257, 258-59, 292-93 (1995); Brodley, supra note 25, at 9-10; Thomas Krattenmaker & Robert Pitofsky, Antitrust Merger Policy and the Reagan Administration, 33 ANTITRUST BULL. 211, 226 (1988).
36. See Walter Adams & James W. Brock, Antitrust, Ideology, and the Arabesque of Economic Theory, 66 U. COLO. L. REV. 257, 258-59, 292-93 (1995); Brodley, supra note 25, at 9-10; Thomas Krattenmaker & Robert Pitofsky, Antitrust Merger Policy and the Reagan Administration, 33 ANTITRUST BULL. 211, 226 (1988).
37. For summaries of the state merger challenges, see Robert Roach, Bank Mergers and the Antitrust Laws: The Case for Dual State and Federal Enforcement, 36 WM. & MARY L. REV. 95 (1994); Ross, supra note 27, at 78-86, 119 n.171; David A. Zimmerman, Why State Attorneys General Should Have a Limited Role in Enforcing the Federal Antitrust Law of Mergers, 48 EMORY L. REV. 337, 344-51 (1999). A state may not sue for money damages due to injury to the state's overall economy. Hawaii v. Standard Oil Co., 405 U.S. 251, 263-64 (1972). Professor Brodley suggests the states' merger enforcement has been limited because states are unable to recover damages in merger cases, as they are in the parens patriae cases. Brodley, supra note 25, at 38-44.
38. For summaries of the state merger challenges, see Robert Roach, Bank Mergers and the Antitrust Laws: The Case for Dual State and Federal Enforcement, 36 WM. & MARY L. REV. 95 (1994); Ross, supra note 27, at 78-86, 119 n.171; David A. Zimmerman, Why State Attorneys General Should Have a Limited Role in Enforcing the Federal Antitrust Law of Mergers, 48 EMORY L. REV. 337, 344-51 (1999). A state may not sue for money damages due to injury to the state's overall economy. Hawaii v. Standard Oil Co., 405 U.S. 251, 263-64 (1972). Professor Brodley suggests the states' merger enforcement has been limited because states are unable to recover damages in merger cases, as they are in the parens patriae cases. Brodley, supra note 25, at 38-44.
39. The state antitrust laws are collected in ABA ANTITRUST LAW SECTION, STATE ANTITRUST PRACTICE AND STATUTES (1990). The differences between the federal antitrust laws and the state antitrust laws are described in ABA, ANTITRUST LAW SECTION: MONOGRAPH No. 15, ANTITRUST FEDERALISM: THE ROLE OF STATE LAW 67-93 (1988). Other than the indirect-purchaser remedy, Professor Hovenkamp lists the statute of limitations as the only other significant difference between most state antitrust laws and their federal counterparts. HOVENKAMP, supra note 9, § 20.8.
40. The state antitrust laws are collected in ABA ANTITRUST LAW SECTION, STATE ANTITRUST PRACTICE AND STATUTES (1990). The differences between the federal antitrust laws and the state antitrust laws are described in ABA, ANTITRUST LAW SECTION: MONOGRAPH No. 15, ANTITRUST FEDERALISM: THE ROLE OF STATE LAW 67-93 (1988). Other than the indirect-purchaser remedy, Professor Hovenkamp lists the statute of limitations as the only other significant difference between most state antitrust laws and their federal counterparts. HOVENKAMP, supra note 9, § 20.8.
41. ARC America Corp., 490 U.S. at 99.
42. The states that permit indirect-purchaser lawsuits are listed in William H. Page, The Limits of State Indirect Purchaser Suits: Class Certification in the Shadow of Illinois Brick, 67 ANTITRUST L.J. 1, 2 nn.8 & 9 (1999).
43. See HOVENKAMP, supra note 9, § 16.6d (describing the debate); Ronald W. Davis, Indirect Purchaser Litigation: ARC America's Chickens Come Home to Roost on the Illinois Brick Wall, 65 ANTITRUST L.J. 375 (1997); Robert G. Harris & Lawrence A. Sullivan, Passing On the Monopoly Overcharge: A Comprehensive Policy Analysis, 128 U. PA. L. REV. 269 (1979); Herbert Hovenkamp, The Indirect-Purchaser Rule and Cost-Plus Sales, 103 HARV. L. REV. 1717 (1990); William M. Landes & Richard A. Posner, The Economics of Passing On: A Reply to Harris and Sullivan, 128 U. PA. L. REV. 1274 (1980).
44. See HOVENKAMP, supra note 9, § 16.6d (describing the debate); Ronald W. Davis, Indirect Purchaser Litigation: ARC America's Chickens Come Home to Roost on the Illinois Brick Wall, 65 ANTITRUST L.J. 375 (1997); Robert G. Harris & Lawrence A. Sullivan, Passing On the Monopoly Overcharge: A Comprehensive Policy Analysis, 128 U. PA. L. REV. 269 (1979); Herbert Hovenkamp, The Indirect-Purchaser Rule and Cost-Plus Sales, 103 HARV. L. REV. 1717 (1990); William M. Landes & Richard A. Posner, The Economics of Passing On: A Reply to Harris and Sullivan, 128 U. PA. L. REV. 1274 (1980).
45. See HOVENKAMP, supra note 9, § 16.6d (describing the debate); Ronald W. Davis, Indirect Purchaser Litigation: ARC America's Chickens Come Home to Roost on the Illinois Brick Wall, 65 ANTITRUST L.J. 375 (1997); Robert G. Harris & Lawrence A. Sullivan, Passing On the Monopoly Overcharge: A Comprehensive Policy Analysis, 128 U. PA. L. REV. 269 (1979); Herbert Hovenkamp, The Indirect-Purchaser Rule and Cost-Plus Sales, 103 HARV. L. REV. 1717 (1990); William M. Landes & Richard A. Posner, The Economics of Passing On: A Reply to Harris and Sullivan, 128 U. PA. L. REV. 1274 (1980).
46. See HOVENKAMP, supra note 9, § 16.6d (describing the debate); Ronald W. Davis, Indirect Purchaser Litigation: ARC America's Chickens Come Home to Roost on the Illinois Brick Wall, 65 ANTITRUST L.J. 375 (1997); Robert G. Harris & Lawrence A. Sullivan, Passing On the Monopoly Overcharge: A Comprehensive Policy Analysis, 128 U. PA. L. REV. 269 (1979); Herbert Hovenkamp, The Indirect-Purchaser Rule and Cost-Plus Sales, 103 HARV. L. REV. 1717 (1990); William M. Landes & Richard A. Posner, The Economics of Passing On: A Reply to Harris and Sullivan, 128 U. PA. L. REV. 1274 (1980).
47. See Burns, supra note 4, at 617-30 (giving an overview of these state remedies).
48. With respect to the federalism protection of these remedies, see supra notes 9-13 and accompanying text. With respect to the focus of these state remedies, see Burns, supra note 4, at 619-24, 627-29.
49. Id. at 619-24. For statutory references, see id. at 620, nn.97-101.
50. Id. at 624-27.
51. Id. at 602-16.
52. Id. at 627-29. Similarly, the state common law of tortious interference with contract may provide a dealer or a competitor with a remedy not available in antitrust. In doing so, the state law typically does not reject competition per se but tempers it with concerns for protection of contracts and preservation of business ethics. See Gary Myers, The Differing Treatment of Efficiency and Competition in Antitrust and Tortious Interference Law, 77 MINN. L. REV. 1097 (1993) (arguing that tortious interference law should be limited to the extent it conflicts with antitrust). But see Marina Lao, Tortious Interference and the Federal Antitrust Law of Vertical Restraints, 83 IOWA L. REV. 35 (1997).
53. Id. at 627-29. Similarly, the state common law of tortious interference with contract may provide a dealer or a competitor with a remedy not available in antitrust. In doing so, the state law typically does not reject competition per se but tempers it with concerns for protection of contracts and preservation of business ethics. See Gary Myers, The Differing Treatment of Efficiency and Competition in Antitrust and Tortious Interference Law, 77 MINN. L. REV. 1097 (1993) (arguing that tortious interference law should be limited to the extent it conflicts with antitrust). But see Marina Lao, Tortious Interference and the Federal Antitrust Law of Vertical Restraints, 83 IOWA L. REV. 35 (1997).
54. See supra notes 5-8 and accompanying text.
55. See FTC v. Ticor Title Ins. Co., 504 U.S. 621, 634 (1992) (stating that the purpose of the state action doctrine "is not to determine whether the State has met some normative standard, such as efficiency, in its regulatory practices"); Town of Hallie v. City of Eau Claire, 471 U.S. 34, 38 (1985) (noting that the Sherman Act "was intended to prohibit private restraints of trade," not to "'nullify a state's control over its officers and agents' in activities directed by the legislature"); Community Communications Co. v. City of Boulder, 455 U.S. 40, 53 (1982) ("The Parker state-action exemption reflects Congress' intention to embody in the Sherman Act the federalism principle that the States possess a significant measure of sovereignty under our Constitution."). One of the ironies of history is that while states now use their Parker immunity to engage in activity that the federal government may condemn, the actual California law challenged in Parker, while likely contrary to the principles of the federal antitrust laws, was in accord with the then-existing federal agricultural laws. In reaction to the Depression, the federal government had enacted legislation that, like the state law, limited the quantities of agricultural products marketed. Parker, 317 U.S. at 352-53.
56. Where the state itself acts, through the state legislature or state supreme court, the state's conduct is automatically immune without a showing of authority or supervision. See Hoover v. Ronwin, 466 U.S. 558, 569 (1984). Where the state acts through a state agency, political subdivision, or municipality, there is a further requirement that the state clearly express (although not necessarily compel) a policy to displace competition. See Southern Motor Carriers Rate Conference v. United States, 471 U. S. 48, 57-62 (1985). Thus, a municipality is not automatically immune from antitrust suit under the Parker doctrine. See City of Lafayette v. Louisiana Power & Light Co., 435 U.S. 389, 408-13 (1978); see also 15 U.S.C. § 35 (adding, in 1984, a provision to the federal antitrust laws that precludes private parties from recovering damages from municipalities). In suits against state agencies or divisions, courts often must make a preliminary finding as to whether the particular agency or division is the "state." See HOVENKAMP, supra note 9, § 20.4.
57. Ticor, 504 U.S. at 634-53; California Retail Liquor Dealers Ass'n v. Midcal Aluminum, Inc., 445 U.S. 97, 105-06 (1980).
58. To the extent state officials overstep their authority, the remedy is to be found under criminal law, not the federal antitrust laws. City of Columbia v. Omni Outdoor Adver., Inc., 499 U.S. 365, 374-79 (1991).
59. See Frank H. Easterbrook, Antitrust and the Economics of Federalism, 26 J.L. & ECON. 23, 32-36 (1983); Thomas M. Jorde, Antitrust and the New State Action Doctrine: A Return to Deferential Economic Federalism, 75 CAL. L. REV. 227, 232-33 (1987).
60. See Frank H. Easterbrook, Antitrust and the Economics of Federalism, 26 J.L. & ECON. 23, 32-36 (1983); Thomas M. Jorde, Antitrust and the New State Action Doctrine: A Return to Deferential Economic Federalism, 75 CAL. L. REV. 227, 232-33 (1987).
61. See Omni Outdoor, 499 U.S. at 374-79; Town of Hallie, 471 U.S. at 36; Southern Motor Carriers, 471 U.S. at 57-62; Municipal Util. Bd. of Albertville v. Alabama Power Co., 934 F.2d 1493 (11th Cir. 1991).
62. See Omni Outdoor, 499 U.S. at 374-79; Town of Hallie, 471 U.S. at 36; Southern Motor Carriers, 471 U.S. at 57-62; Municipal Util. Bd. of Albertville v. Alabama Power Co., 934 F.2d 1493 (11th Cir. 1991).
63. See Omni Outdoor, 499 U.S. at 374-79; Town of Hallie, 471 U.S. at 36; Southern Motor Carriers, 471 U.S. at 57-62; Municipal Util. Bd. of Albertville v. Alabama Power Co., 934 F.2d 1493 (11th Cir. 1991).
64. See supra note 2. Each of the three cases was a 5-4 decision, with a sharply worded dissent.
65. Alden, 119 S. Ct. at 2263 (holding that states are immune from private lawsuits based on federal statutes, even where the lawsuits are brought in state court). Earlier, in Seminole Tribe of Florida v. Florida, 517 U.S. 44, 56-72 (1996), the Court had held that, absent a state's consent to being sued, a state was immune from suit brought in federal court under a federal statute.
66. Alden, 119 S. Ct. at 2263.
67. 119 S. Ct. at 2267; College Savings Bank, 119 S. Ct. at 2223.
68. The Court held that to act constitutionally, Congress must make "unmistakably clear" its intention to abrogate state immunity, do so in order to secure Fourteenth Amendment protections, and tailor the federal legislation so that the remedy provided in a lawsuit against a state is proportionate with the preventive aim. Florida Prepaid, 119 S. Ct. at 2205-208. With respect to the federal antitrust laws, the second requirement is arguably satisfied to the extent a state takes a private party's property without due process, but see id. at 2208 (suggesting that merely taking a firm's profits is not sufficient), but the first requirement currently is missing and the third is likely not met because a treble damage remedy is argubly out of proportion to any harm. In addition, in Florida Prepaid, the Court noted that Congress had undertaken no study regarding the availability of state remedies or the incidence of state violation of federal law. Id. at 2208-210. In antitrust, both such studies currently are also missing.
69. College Savings Bank, 119 S. Ct. at 2224-225 (holding unconstitutional federal law expressly making states subject to Lanham Act); Florida Prepaid, 119 S. Ct. at 2205-210 (holding unconstitutional federal law expressly making states subject to federal patent statutes).
70. College Savings Bank, 119 S. Ct. at 2224-225 (holding unconstitutional federal law expressly making states subject to Lanham Act); Florida Prepaid, 119 S. Ct. at 2205-210 (holding unconstitutional federal law expressly making states subject to federal patent statutes).
71. Alden, 119 S. Ct. at 2255 ("We reject any contention that the substantive federal law by its own force necessarily overrides the sovereign immunity of the state.").
72. Florida Prepaid, 119 S. Ct. at 2210-211.
73. College Savings Bank, 119 S. Ct. at 2226-230 (overruling Parden v. Terminal Ry. of Ala. State Stocks Dept., 377 U.S. 184 (1964)).
74. Id. (holding that the State of Florida did not waive sovereign immunity by selling and advertising a for-profit educational investment vehicle).
75. See Omni Outdoor, 499 U.S. at 374-75, 379; Parker, 317 U.S. at 351-52; see also City of Lafayette, 435 U.S. at 418 (Burger, C.J., concurring). Most lower courts have rejected any market-participant exception to Parker immunity. See, e.g., Automated Salvage Trans., Inc. v. Wheelabrator Environ. Sys., Inc., 155 F.3d 59, 79-80 (2d Cir. 1998); Paragould Cablevision v. City of Paragould, 930 F.2d 1310, 1312 (8th Cir. 1992); Lancaster Community Hosp. v. Antelope Valley Hosp. Dist., 940 F.2d 397, 402 n.9 (9th Cir. 1991). But see Genentech, Inc. v. Eli Lilly & Co., 998 F.2d 931, 948 (Fed. Cir. 1993) (dicta).
76. See Omni Outdoor, 499 U.S. at 374-75, 379; Parker, 317 U.S. at 351-52; see also City of Lafayette, 435 U.S. at 418 (Burger, C.J., concurring). Most lower courts have rejected any market-participant exception to Parker immunity. See, e.g., Automated Salvage Trans., Inc. v. Wheelabrator Environ. Sys., Inc., 155 F.3d 59, 79-80 (2d Cir. 1998); Paragould Cablevision v. City of Paragould, 930 F.2d 1310, 1312 (8th Cir. 1992); Lancaster Community Hosp. v. Antelope Valley Hosp. Dist., 940 F.2d 397, 402 n.9 (9th Cir. 1991). But see Genentech, Inc. v. Eli Lilly & Co., 998 F.2d 931, 948 (Fed. Cir. 1993) (dicta).
77. The dealer protection laws and common law dealer remedies, in particular, are contrary to the federal antitrust approach to vertical restraints. See Burns, supra note 4, at 639-41 (summarizing the criticisms to the state dealer protections).
78. See supra notes 45 & 46 and accompanying text.
79. A realist might argue that the Supreme Court upheld the state law in Parker precisely because the state law was consistent with the then-current federal view of the need to regulate agricultural production. See supra note 41.
80. See Einer R. Elhauge, The Scope of Antitrust Process, 104 HARV. L. REV. 667 (1991); Jorde, supra note 45; William H. Page & John E. Lopatka, State Regulation in the Shadow of Antitrust: FTC v. Ticor Title Insurance Co., 3 SUP. CT. ECON. REV. 189 (1993); John S. Wiley Jr., A Capture Theory of Antitrust Federalism, 99 HARV. L. REV. 713 (1986). Interestingly, these various scholars disagree among themselves on exactly how antitrust federalism should be limited.
81. See Einer R. Elhauge, The Scope of Antitrust Process, 104 HARV. L. REV. 667 (1991); Jorde, supra note 45; William H. Page & John E. Lopatka, State Regulation in the Shadow of Antitrust: FTC v. Ticor Title Insurance Co., 3 SUP. CT. ECON. REV. 189 (1993); John S. Wiley Jr., A Capture Theory of Antitrust Federalism, 99 HARV. L. REV. 713 (1986). Interestingly, these various scholars disagree among themselves on exactly how antitrust federalism should be limited.
82. See Einer R. Elhauge, The Scope of Antitrust Process, 104 HARV. L. REV. 667 (1991); Jorde, supra note 45; William H. Page & John E. Lopatka, State Regulation in the Shadow of Antitrust: FTC v. Ticor Title Insurance Co., 3 SUP. CT. ECON. REV. 189 (1993); John S. Wiley Jr., A Capture Theory of Antitrust Federalism, 99 HARV. L. REV. 713 (1986). Interestingly, these various scholars disagree among themselves on exactly how antitrust federalism should be limited.
83. See supra notes 19, 25, & 26 and accompanying text.
84. See William M. Landes & Richard A. Posner, Should Indirect Purchasers Have Standing to Sue Under the Antitrust Laws? An Economic Analysis of the Rule of Illinois Brick, 46 U. CHI. L. REV. 602, 613 (1979).
85. I realize that this is a heretical admission for a law professor to make.
86. See Jacobs, supra note 3, at 242 (noting that post-Chicagoans agree with Chicagoans that economic efficiency should be the sole goal of antitrust but are willing to concede that some markets do not function perfectly).
87. See supra note 21; see also Warren S. Grimes, Brand Marketing, Intrabrand Competition, and the Multibrand Retailer: The Antitrust Law of Vertical Restraints, 64 ANTITRUST L.J. 83, 96-99 (1995) (arguing that intrabrand competition is an important economic factor in certain markets).
88. See Adams & Brock, supra note 28, at 302-09, 316-25 (arguing that merger decisions must ultimately be made on the basis of value judgments because economic theory cannot provide the answer).
89. See Burns, supra note 4, at 630-39, 642-46; Jacobs, supra note 3, at 250-65 (arguing that there is insufficient empirical evidence to support either the Chicagoans or the post-Chicagoans and that ultimate choice of lawmakers may depend upon normative value judgments). By keeping the per se rule for resale price maintenance intact, the Supreme Court itself has signaled its own uncertainty regarding the benefits of vertical pricing restraints. See supra note 17. In the tying area, the Court has similarly indicated that it is uncertain that economic models always reflect reality. See Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451 (1992).
90. See supra note 64.
91. See John J. Flynn, The "Is" and "Ought" of Vertical Restraints after Monsanto Co. v. Spray-Rite Service Co., 71 CORNELL L. REV. 1095, 1138 (1986); Eleanor M. Fox, The Modernization of Antitrust: A New Equilibrium, 66 CORNELL L. REV. 1140, 1146 (1981); Robert H. Lande, Wealth Transfers as the Original and Primary Concern of Antitrust: The Efficiency Interpretation Challenged, 34 HASTINGS L.J. 65, 68 (1982).
92. See John J. Flynn, The "Is" and "Ought" of Vertical Restraints after Monsanto Co. v. Spray- Rite Service Co., 71 CORNELL L. REV. 1095, 1138 (1986); Eleanor M. Fox, The Modernization of Antitrust: A New Equilibrium, 66 CORNELL L. REV. 1140, 1146 (1981); Robert H. Lande, Wealth Transfers as the Original and Primary Concern of Antitrust: The Efficiency Interpretation Challenged, 34 HASTINGS L.J. 65, 68 (1982).
93. See John J. Flynn, The "Is" and "Ought" of Vertical Restraints after Monsanto Co. v. Spray- Rite Service Co., 71 CORNELL L. REV. 1095, 1138 (1986); Eleanor M. Fox, The Modernization of Antitrust: A New Equilibrium, 66 CORNELL L. REV. 1140, 1146 (1981); Robert H. Lande, Wealth Transfers as the Original and Primary Concern of Antitrust: The Efficiency Interpretation Challenged, 34 HASTINGS L.J. 65, 68 (1982).
94. See supra note 16.
95. See Adams & Brock, supra note 28, at 322 (noting that "'social welfare' does not depend on material goods alone. Instead it includes other aspects of life which people value and which they consider contribute to the quality of life"); Burns, supra note 4, at 642-46;
96. Herbert Hovenkamp, Distributive Justice and the Antitrust Laws, 51 GEO. WASH. L. REV. 1, 20-23 (1982).
97. The federal government has experimented with a fair number of competition-eliminating regulations in various industries over the years, with varying success. See Easterbrook, supra note 45, at 31.
98. See Burns, supra note 4, at 602-16.
99. With respect to federalism's role in enhancing democracy and citizen participation in government, Professor Jorde makes the argument eloquently: Citizen participation in government is a fundamental value justifying our federalist system of government. . . . When government operates on a smaller scale, individuals can participate more effectively and more directly. Proximity increases access, communication, and accountability between citizens and public officials. Jorde, supra note 45, at 231; see also Herbert Hovenkamp, Antitrust Policy After Chicago, 84 MICH. L. REV. 213, 249, 255 (1985) (observing that voters, if they desire, are entitled to have irrational and inconsistent laws and that some economists want a free market everywhere but in the legislature).
100. See Paul Van Dam, Developments in Consumer Protection: The States' View, 60 ANTITRUST L.J. 133, 134-35 (1991) ("We hear from consumers every day by the droves.").
101. See Burns, supra note 4, at 626-27.
102. New State Ice Co. v. Liebermann, 285 U.S. 262, 311 (1932) (Brandeis J., dissenting) ("It is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country."). To use a more prosaic, but antitrust-related, adage: no one has a monopoly on the truth.
103. See James A. Brickley et al., The Effects of Franchise Termination Laws, 34 J.L. & ECON. 101, 117-26 (1991) (comparing, empirically, the amount of franchising in states with franchise laws to those without such laws); Easterbrook, supra note 45, at 28-29 (arguing that Parker-shielded state regulations allow for experimentation and competition among states); Page, supra note 32, at 19-27 (describing the outcomes in states that have permitted indirect-purchaser lawsuits).