The scope of antitrust process

Harvard Law Review

Volumn 104, Issue 3, 1991, Pages 668-746

  Elhauge, Einer Richard ^a  

^a University of California ^*

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EID: 0345840843     PISSN: 0017811X     EISSN: None     Source Type: Journal    
DOI: 10.2307/1341573     Document Type: Article

References (393)

1. See, e.g., Northern Pac. Ry. v. United States, 356 U.S. 1, 4 (1958). Which goal antitrust law should further in cases where these goals conflict is widely disputed. See infra pp. 697-98.
2. See New Motor Vehicle Bd. v. Orrin W. Fox Co., 439 U.S. 96, 110-11 (1978); Exxon Corp. v. Governor of Maryland, 437 U.S. 117, 133-34 (1978); Easterbrook, Antitrust and the Economics of Federalism, 26 J.L. & ECON. 23, 24-25 (1983); Garland, Antitrust and State Action: Economic Efficiency and the Political Process, 96 YALE L.J. 486, 499-501 (1987); Page, Antitrust, Federalism, and the Regulatory Process: A Reconstruction and Critique of the State Action Exemption After Midcal Aluminum, 61 B.U.L. REV. 1099, 1102-07 (1981).
3. See New Motor Vehicle Bd. v. Orrin W. Fox Co., 439 U.S. 96, 110-11 (1978); Exxon Corp. v. Governor of Maryland, 437 U.S. 117, 133-34 (1978); Easterbrook, Antitrust and the Economics of Federalism, 26 J.L. & ECON. 23, 24-25 (1983); Garland, Antitrust and State Action: Economic Efficiency and the Political Process, 96 YALE L.J. 486, 499-501 (1987); Page, Antitrust, Federalism, and the Regulatory Process: A Reconstruction and Critique of the State Action Exemption After Midcal Aluminum, 61 B.U.L. REV. 1099, 1102-07 (1981).
4. See New Motor Vehicle Bd. v. Orrin W. Fox Co., 439 U.S. 96, 110-11 (1978); Exxon Corp. v. Governor of Maryland, 437 U.S. 117, 133-34 (1978); Easterbrook, Antitrust and the Economics of Federalism, 26 J.L. & ECON. 23, 24-25 (1983); Garland, Antitrust and State Action: Economic Efficiency and the Political Process, 96 YALE L.J. 486, 499-501 (1987); Page, Antitrust, Federalism, and the Regulatory Process: A Reconstruction and Critique of the State Action Exemption After Midcal Aluminum, 61 B.U.L. REV. 1099, 1102-07 (1981).
5. The paradigm of conflict and accommodation has been used by Congress, see H.R. REP. No. 965, 98th Cong., 2d Sess. 7 (1984), reprinted in 1984 U.S. CODE CONG. & ADMIN. NEWS 4602, 4608, and by nearly every scholar to write in the area, see, e.g., Easterbrook, supra note 2, at 23-25; Garland, supra note 2, at 499-501; Jorde, Antitrust and the New State Action Doctrine: A Return to Deferential Economic Federalism, 75 CALIF. L. REV. 127, 227-29 (1987); Spitzer, Antitrust Federalism and Rational Choice Political Economy: A Critique of Capture Theory, 61 S. CAL. L. REV. 1293, 1293-94 (1988); Wiley, A Capture Theory of Antitrust Federalism, 99 HARV. L. REV. 713, 713-15, 729-39 (1986). The Supreme Court has also articulated the problem in terms of the conflict paradigm, see, e.g., Southern Motor Carriers Rate Conference, Inc. v. United States, 471 U.S. 48, 61 (1985); Orrin W. Fox, 439 U.S. at 110-11; City of Lafayette v. Louisiana Power & Light Co., 435 U.S. 389, 398-400 (1978), although the results reached in the cases, I hope to show, are explained more easily under another paradigm.
6. The paradigm of conflict and accommodation has been used by Congress, see H.R. REP. No. 965, 98th Cong., 2d Sess. 7 (1984), reprinted in 1984 U.S. CODE CONG. & ADMIN. NEWS 4602, 4608, and by nearly every scholar to write in the area, see, e.g., Easterbrook, supra note 2, at 23-25; Garland, supra note 2, at 499-501; Jorde, Antitrust and the New State Action Doctrine: A Return to Deferential Economic Federalism, 75 CALIF. L. REV. 127, 227-29 (1987); Spitzer, Antitrust Federalism and Rational Choice Political Economy: A Critique of Capture Theory, 61 S. CAL. L. REV. 1293, 1293-94 (1988); Wiley, A Capture Theory of Antitrust Federalism, 99 HARV. L. REV. 713, 713-15, 729-39 (1986). The Supreme Court has also articulated the problem in terms of the conflict paradigm, see, e.g., Southern Motor Carriers Rate Conference, Inc. v. United States, 471 U.S. 48, 61 (1985); Orrin W. Fox, 439 U.S. at 110-11; City of Lafayette v. Louisiana Power & Light Co., 435 U.S. 389, 398-400 (1978), although the results reached in the cases, I hope to show, are explained more easily under another paradigm.
7. The paradigm of conflict and accommodation has been used by Congress, see H.R. REP. No. 965, 98th Cong., 2d Sess. 7 (1984), reprinted in 1984 U.S. CODE CONG. & ADMIN. NEWS 4602, 4608, and by nearly every scholar to write in the area, see, e.g., Easterbrook, supra note 2, at 23-25; Garland, supra note 2, at 499-501; Jorde, Antitrust and the New State Action Doctrine: A Return to Deferential Economic Federalism, 75 CALIF. L. REV. 127, 227-29 (1987); Spitzer, Antitrust Federalism and Rational Choice Political Economy: A Critique of Capture Theory, 61 S. CAL. L. REV. 1293, 1293-94 (1988); Wiley, A Capture Theory of Antitrust Federalism, 99 HARV. L. REV. 713, 713-15, 729-39 (1986). The Supreme Court has also articulated the problem in terms of the conflict paradigm, see, e.g., Southern Motor Carriers Rate Conference, Inc. v. United States, 471 U.S. 48, 61 (1985); Orrin W. Fox, 439 U.S. at 110-11; City of Lafayette v. Louisiana Power & Light Co., 435 U.S. 389, 398-400 (1978), although the results reached in the cases, I hope to show, are explained more easily under another paradigm.
8. The "Constitution, and the Laws of the United States which shall be made in Pursuance thereof . . . shall be the supreme law of the Land . . . ." U.S. CONST. art. VI, cl. 2.
9. See California v. ARC Am. Corp., 109 S. Ct. 1661, 1665 (1989) (stating, in a case adjudicating the preemptive scope of federal antitrust law, that "state law is . . . preempted to the extent it . . . 'stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress'" (quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1941))).
10. Cf. Easterbrook, supra note 2, at 25 (describing state action doctrine as "inverse preemption").
11. See infra pp. 672-74.
12. See infra note 14 and pp. 674-75.
13. See infra pp. 675-76.
14. I define an actor as "politically accountable" if his or her authority can be traced to an election, appointment by elected officials, or through some chain of appointment starting with elected officials. Ongoing political accountability is not required; it is sufficient that the political process can influence the initial selection of personnel to exclude those with unacceptable policy preferences. For example, within the meaning used here, the term "politically accountable" embraces a state judge with life tenure who was appointed by elected officials. It also embraces a state administrator serving a fixed, nonrepeatable term who was appointed by a state official who was herself appointed by elected officials. Such retrospective or derivative accountability to political forces is a common hallmark of our political system. See THE FEDERALIST No. 39, at 241 (J. Madison) (C. Rossiter ed. 1961) ("It is sufficient for [a republic] that the persons administering it be appointed, either directly or indirectly, by the people . . . ." (emphasis in original)).
15. 317 U.S. 341 (1943).
16. See id. at 350-52.
17. See, e.g., Southern Motor Carriers Rate Conference, Inc. v. United States, 471 U.S. 48, 64 (1985); Community Communications Co. v. City of Boulder, 455 U.S. 40, 50-54 (1982); Goldfarb v. Virginia State Bar, 421 U.S. 773, 790-91 (1975).
18. To provide a rough sense of the magnitude and upward trend of litigation about antitrust state action immunity, I conducted a LEXIS search on November 15, 1990, for published federal opinions citing Parker v. Brown. The search, which encompassed opinions by federal district and appellate courts and the United States Supreme Court, uncovered a total of 670 cases. Only 83 of these opinions came down during 1943-70; 203 came down during 1971-80; and 384 came down during 1981-90. My examination of the Supreme Court cases reveals a total of 18 post-Parker cases actually adjudicating issues of state action immunity: two during 1943-70; seven during 1971-80; and nine during 1981-90.
19. See Hoover v. Ronwin, 466 U.S. 558, 567-69 (1984). The Supreme Court's approach suggests that the actions of state governors will also be per se immune, but it has left the issue open. See id. at 568 n.17.
20. 445 U.S. 97 (1980).
21. See id. at 105-06. An additional prong applies when & facial challenge is brought against a state statute or municipal ordinance. If the state action doctrine does not provide immunity, the statute or ordinance is facially preempted only if it authorizes or mandates conduct that per se violates the antitrust laws. See Fisher v. City of Berkeley, 475 U.S. 260, 264-65 (1986); Rice v. Norman Williams Co., 458 U.S. 654, 661 (1982). This prong does not apply when plaintiffs challenge a statute or ordinance as applied. See Fisher, 475 U.S. at 270 n.2; Rice, 458 U.S. at 662 & nn.7-8.
22. See Southern Motor Carriers Rate Conference, Inc. v. United States, 471 U.S. 48, 60-61, 62-63 (1985); Town of Hallie v. City of Eau Claire, 471 U.S. 34, 38-40 (1985); Hoover, 466 U.S. at 568-69; Community Communications Co. v. City of Boulder, 455 U.S. 40, 50-54 (1982).
23. See Southern Motor Carriers, 471 U.S. at 57, 60-61, 62-63; Hallie, 471 U.S. at 38-40; Hoover, 466 U.S. at 568-69; Boulder, 455 U.S. at 51-52.
24. See Hallie, 471 U.S. at 46-47 & n.10.
25. See Patrick v. Burget, 486 U.S. 94, 101-03 (1988) (evaluating whether supervision by various state agencies was sufficiently active); California Retail Liquor Dealers Ass'n v. Midcal Aluminum, Inc., 445 U.S. 97, 106 n.9 (1980) (stating in dicta that a law authorizing a state agency to fix liquor prices provides sufficient supervision).
26. See P. AREEDA & H. HOVENKAMP, ANTITRUST LAW ¶ 212.6, at 159-60 (Supp. 1989) (noting the question's "pervasive vexatiousness").
27. See Fuchs v. Rural Elec. Convenience Coop., 858 F.2d 1210, 1216 (7th Cir. 1988), cert. denied, 109 S. Ct. 1744 (1989); P. AREEDA & H. HOVENKAMP, supra note 22, ¶ 212.2, at 127-31, ¶ 212.gf, at 184-87.
28. See P. AREEDA & H. HOVENKAMP, supra note 22, ¶ 212.3, at 132 (noting that "application [of the clear authorization requirement] has proved difficult"); Hovenkamp & Mackerron, Municipal Regulation and Federal Antitrust Policy, 32 UCLA L. REV. 719, 740-44 (1985).
29. See P. AREEDA & H. HOVENKAMP, supra note 22, ¶ 212.3b, at 145-49.
30. See id. ¶ 212.7, at 164-66 (stating that defining adequate supervision has been "troublesome").
31. See id. at 166-67; see also, e.g., Patrick v. Burget, 486 U.S. 94, 103-04 (1988) (leaving open the issue whether judicial review can satisfy the active supervision requirement).
32. The Supreme Court recently granted certiorari to resolve a circuit conflict on this issue, see City of Columbia v. Omni Outdoor Advertising, Inc., 110 S. Ct. 3211 (1990), granting cert. to Omni Outdoor Advertising, Inc. v. Columbia Outdoor Advertising, Inc., 891 F.2d 1127 (4th Cir. 1989), which I discuss below at pp. 704-06.
33. As Congress put it: "The Court is open to criticism perhaps not so much for the results it has reached in individual cases, but rather for its failure to provide an analytical framework by which future state action cases can be predicted with reasonable certainty." H.R. REP. No. 965, supra note 3, at 7, reprinted in 1984 U.S. CODE CONG. & ADMIN. NEWS 4602, 4608.
34. See Wiley, supra note 3, at 731-33; Garland, supra note 2, at 502 & n.90.
35. See Easterbrook, supra note 2, at 29-33; Page, supra note 2, at 1128-31, 1134-36; Wiley, supra note 3, at 731; Wiley, Revision and Apology in Antitrust Federalism, 96 YALE L.J. 1277, 1279-80, 1282 (1987).
36. See Easterbrook, supra note 2, at 29-33; Wiley, supra note 3, at 715, 729, 733; Wiley, supra note 31, at 1279-80.
37. See Easterbrook, supra note 2, at 29-31; Wiley, supra note 3, at 733.
38. See, e.g., Easterbrook, supra note 2, at 36-38 & n.31; Garland, supra note 2, at 502 & n.90; Hovenkamp & Mackerron, supra note 24, at 747-58; Robinson, The Sherman Act as a Home Rule Charter, 2 SUP. CT. ECON. REV. 131, 147-52 (1983); Wiley, supra note 3, at 735.
39. See Community Communications Co. v. City of Boulder, 455 U.S. 40, 54-56 (1982).
40. See P. AREEDA & H. HOVENKAMP, supra note 22, ¶ 212.3c, at 152.
41. See Easterbrook, supra note 2, at 30, 38; Wiley, supra note 3, at 715, 730-31, 733-34.
42. In the 1970s, when case-by-case balancing tests were more in vogue, some commentators proposed that courts accommodate the conflict on an ad hoc basis by balancing the state interest in a challenged regulation against the federal interest in competition. See Slater, Antitrust and Government Action, 69 NW. U.L. REV. 71, 101-09 (1974); cf. Posner, The Proper Relationship Between State Regulation and the Federal Antitrust Laws, 49 N.Y.U. L. REV. 693, 703-14, 738 (1974) (proposing a somewhat more structured balancing test). Such proposals reveal but do not resolve the perceived conflict. They not only saddle judges with making open-ended choices without the guidance of any meaningful principles but also result in judgments that inevitably infringe either the federal or state interest put forth. Legally, these proposals have gone nowhere. The only Justice ever to suggest adopting a case-by-case balancing approach was Justice Blackmun, and even he has not repeated the suggestion since his opinion in Cantor v. Detroit Edison Co., 428 U.S. 579, 610-12 (1976) (Blackmun, J., concurring in the judgment).
43. In the 1970s, when case-by-case balancing tests were more in vogue, some commentators proposed that courts accommodate the conflict on an ad hoc basis by balancing the state interest in a challenged regulation against the federal interest in competition. See Slater, Antitrust and Government Action, 69 NW. U.L. REV. 71, 101-09 (1974); cf. Posner, The Proper Relationship Between State Regulation and the Federal Antitrust Laws, 49 N.Y.U. L. REV. 693, 703-14, 738 (1974) (proposing a somewhat more structured balancing test). Such proposals reveal but do not resolve the perceived conflict. They not only saddle judges with making open-ended choices without the guidance of any meaningful principles but also result in judgments that inevitably infringe either the federal or state interest put forth. Legally, these proposals have gone nowhere. The only Justice ever to suggest adopting a case-by-case balancing approach was Justice Blackmun, and even he has not repeated the suggestion since his opinion in Cantor v. Detroit Edison Co., 428 U.S. 579, 610-12 (1976) (Blackmun, J., concurring in the judgment).
44. See, e.g., Wiley, supra note 3, at 730-31, 739-40; see also Easterbrook, supra note 2, at 45-50 (arguing that doctrine should immunize any state or local regulation as long as the jurisdiction's residents bear its full costs); Page, supra note 2, at 1113-25 (arguing that any clearly articulated state regulation should trump conflicting federal antitrust law).
45. See Cirace, An Economic Analysis of the "State-Municipal Action" Antitrust Cases, 61 TEX. L. REV. 481, 486 (1982) (advocating preemption of regulations that are not the least restrictive means of addressing a substantial market failure); Spitzer, supra note 3, at 1318-25 (suggesting as a possible option antitrust preemption of any state or local regulation that offends antitrust values by causing inefficiency or transferring wealth from consumers to producers); Wiley, supra note 3, at 742-43 (advocating preemption of any anticompetitive state regulation evidencing the kind of producer capture and inefficiency that conflicts with the purposes of antitrust law). Professor Wiley is cited for both proposals because he explicitly frames his normative thesis as a choice. See id. at 715, 739-41.
46. See, e.g., 1 P. AREEDA & D. TURNER, ANTITRUST LAW ¶ 215c, at 98 (1978); Garland, supra note 2, at 508-12; Hovenkamp & Mackerron, supra note 24, at 758-67.
47. See, e.g., Page, supra note 2, at 1113-25, 1137-38; Wiley, supra note 3, at 768-69.
48. See, e.g., Wiley, supra note 3, at 731-36 (criticizing Page's proposal in part for failing to respect state policy judgments sufficiently).
49. See id. at 743, 748-64.
50. See Wiley, supra note 31, at 1279-80.
51. See id. at 1280 & n.15; see also Page, supra note 2, at 1131-34 & n.182 (summarizing and collecting sources).
52. See Business Elecs. Corp. v. Sharp Elecs. Corp., 485 U.S. 717, 724 (1988).
53. Cf. Page, supra note 2, at 1130-34 (justifying state regulation as necessary to correct "antitrust failure").
54. See Garland, supra note 2, at 499-501, 507-08; Jorde, supra note 3, at 247-50. Garland believes, however, that current doctrine is unjustified in failing to accord municipalities the same immunity accorded states. See Garland, supra note 2, at 502-07.
55. See Jorde, supra note 3, at 229, 247-50.
56. See id. at 250. No doubt the extent to which citizens exercise available opportunities is even more minimal.
57. Cf. Bi-Metallic Inv. Co. v. State Bd. of Equalization, 239 U.S. 441, 445 (1915) (holding that due process does not require an opportunity to be heard before a generally applicable rule is promulgated).
58. See W. Page, State Action and "Active Supervision" (forthcoming 36 ANTITRUST BULL. (1991)).
59. Garland, supra note 2, at 501.
60. See id. at 500.
61. See id.
62. Id. at 501, 508.
63. In response to Wiley's critique along these lines, see Wiley, supra note 31, at 1278-79, Garland has denied that his argument hinges on any inherent distinction between public and private action. See Garland, Antitrust and Federalism: A Response to Professor Wiley, 96 YALE L.J. 1291, 1294 (1987). Nonetheless, he provides no policy rationale for current doctrine or his distinction between a state decision to regulate through "state actors" and a state decision to delegate the authority to restrain trade to "private actors." In addition, his test can be applied only with, at a minimum, some formal understanding of how to distinguish state actors from private actors. See Garland, supra note 2, at 499-501, 507-08.
64. The corporate immunity claim may today seem fanciful, but the Supreme Court was presented with just such a claim in 1904, when the controlling stockholders of two competing railroad corporations argued that the combination of their stockholdings into one holding corporation was immune from federal antitrust law because it was authorized by state corporation law. See Northern Secs. Co. v. United States, 193 U.S. 197, 321-22, 326, 332-33, 344-45 (1904) (plurality opinion). The Supreme Court had no trouble rejecting this argument, with a plurality concluding that "no state can endow any of its corporations, or any combination of its citizens, with authority to restrain interstate or international commerce" in violation of the Sherman Act. Id. at 350. Although disagreeing on other grounds, the dissenters expressed no disagreement with this statement.
65. See Cohen, The Basis of Contract, 46 HARV. L. REV. 553, 562, 585-87 (1933); Wiley, A Capture Theory of Antitrust Federalism: Reply to Professors Page and Spikier, 61 S. CAL. L. REV. 1327, 1328 (1988).
66. See Cohen, The Basis of Contract, 46 HARV. L. REV. 553, 562, 585-87 (1933); Wiley, A Capture Theory of Antitrust Federalism: Reply to Professors Page and Spikier, 61 S. CAL. L. REV. 1327, 1328 (1988).
67. See Cohen, Property and Sovereignty, 13 CORNELL L.Q. 8, 12-14 (1927); Hale, Bargaining, Duress, and Economic Liberty, 43 COLUM. L. REV. 603, 603-06 (1943); Hale, Coercion and Distribution in a Supposedly Non-Coercive State, 38 POL. SCI. Q. 470, 470-79 (1923); Hale, Force and the State: A Comparison of "Political" and "Economic" Compulsion, 35 COLUM. L. REV. 149, 198-99 (1935).
68. See Cohen, Property and Sovereignty, 13 CORNELL L.Q. 8, 12-14 (1927); Hale, Bargaining, Duress, and Economic Liberty, 43 COLUM. L. REV. 603, 603-06 (1943); Hale, Coercion and Distribution in a Supposedly Non-Coercive State, 38 POL. SCI. Q. 470, 470-79 (1923); Hale, Force and the State: A Comparison of "Political" and "Economic" Compulsion, 35 COLUM. L. REV. 149, 198-99 (1935).
69. See Cohen, Property and Sovereignty, 13 CORNELL L.Q. 8, 12-14 (1927); Hale, Bargaining, Duress, and Economic Liberty, 43 COLUM. L. REV. 603, 603-06 (1943); Hale, Coercion and Distribution in a Supposedly Non-Coercive State, 38 POL. SCI. Q. 470, 470-79 (1923); Hale, Force and the State: A Comparison of "Political" and "Economic" Compulsion, 35 COLUM. L. REV. 149, 198-99 (1935).
70. See Cohen, Property and Sovereignty, 13 CORNELL L.Q. 8, 12-14 (1927); Hale, Bargaining, Duress, and Economic Liberty, 43 COLUM. L. REV. 603, 603-06 (1943); Hale, Coercion and Distribution in a Supposedly Non-Coercive State, 38 POL. SCI. Q. 470, 470-79 (1923); Hale, Force and the State: A Comparison of "Political" and "Economic" Compulsion, 35 COLUM. L. REV. 149, 198-99 (1935).
71. Parker v. Brown, 317 U.S. 341, 351 (1943).
72. Sometimes disputes about whether action is "public" or "private" center on whether the authority was truly "created" by the state and "delegated" to private parties or whether the state has merely "recognized" the authority "retained" by private parties. Cf. Goodman, Professor Brest on State Action and Liberal Theory, and a Postscript to Professor Stone, 130 U. PA. L. REV. 1331, 1338-39 (1982) (distinguishing delegation and permission). Such a rephrasing of the issue, however, does not illuminate it The debate over whether authority should be regarded as "delegated" or "retained" merely reproduces the debate over which sorts of authority should be regarded as "public" and which "private." The key for our purposes is that the state through its laws defines the authority (whether "delegated" or "retained") and stands ready to enforce that authority. A related formal approach might attempt to avoid these problems by regarding any exercise of authority by someone other than "the state" as private. Cf. id. at 1337-41 (distinguishing what the state authorizes from what it does). The problem with this approach is that the state always exercises authority through individuals. An approach that refuses to treat any exercise of delegated authority as state action thus eases the problem of defining state action at the cost of reducing it to a meaningless nullity. Alternatively, if some of these exercises of authority are regarded as exercises of authority by "the state" and others are not, see id. at 1338-39, then the approach again reproduces the problem of determining which exercises of authority are public and which private.
73. See, e.g., Brest, State Action and Liberal Theory: A Casenote on Flagg Bros. v. Brooks, 130 U. PA. L. REV. 1296, 1302 n.21 (1982) (collecting public law critiques); Horwitz, The History of the Public/Private Distinction, 130 U. PA. L. REV. 1423, 1426 n.14 (1982) (collecting private law critiques). An approach that could provide certainty is pure formalism. State action could be deemed to exist whenever the state labels the actor exercising authority an "official agent of the state." All other actors exercising state-enforced authority would be deemed private actors, and their actions would be subject to antitrust review. Such an approach would, however, plainly be unacceptable for the same reason it has proven unacceptable under constitutional state action doctrine: a state could avoid all substantive limits by placing the right label on those exercising the authority in question.
74. See, e.g., Brest, State Action and Liberal Theory: A Casenote on Flagg Bros. v. Brooks, 130 U. PA. L. REV. 1296, 1302 n.21 (1982) (collecting public law critiques); Horwitz, The History of the Public/Private Distinction, 130 U. PA. L. REV. 1423, 1426 n.14 (1982) (collecting private law critiques). An approach that could provide certainty is pure formalism. State action could be deemed to exist whenever the state labels the actor exercising authority an "official agent of the state." All other actors exercising state-enforced authority would be deemed private actors, and their actions would be subject to antitrust review. Such an approach would, however, plainly be unacceptable for the same reason it has proven unacceptable under constitutional state action doctrine: a state could avoid all substantive limits by placing the right label on those exercising the authority in question.
75. Chief Justice Burger is the only Justice ever to advocate relying on whether the challenged activity was proprietary or governmental, see City of Lafayette v. Louisiana Power & Light Co., 435 U.S. 389, 418-25 (1978) (Burger, C.J., concurring in the judgment), but the plurality in that case declined to accept his position, see 435 U.S. at 411-13, and the dissent harshly criticized it, see id. at 427, 432-34 (Stewart, J., dissenting, joined by White, Blackmun, and Rehnquist, JJ.). Subsequent cases have underscored this rejection by holding state action immunity inapplicable to various exercises of authority that are more regulatory than proprietary. See Patrick v. Burget, 486 U.S. 94 (1988) (adjudication of physician competence in a peer review hearing); Community Communications Co. v. City of Boulder, 455 U.S. 40 (1982) (ordinance prohibiting business expansion); California Retail Liquor Dealers Ass'n v. Midcal Aluminum, Inc., 445 U.S. 97 (1980) (statutory price-setting authority).
76. See Wells & Hellerstein, The Governmental-Proprietary Distinction in Constitutional Law, 66 VA. L. REV. 1073, 1073 & nn.1-8 (1980) (collecting critiques). The distinction breaks down in both directions. First, governments have long engaged in business activities and provided (and often charged for) various consumer services, such as transportation, education, garbage collection, electricity, and medical care. Second, it is hard to think of a governmental activity that has not or could not be performed by private persons. See Indian Towing Co. v. United States, 350 U.S. 61, 67-68 (1955). These problems have proven sufficient to force the Court to abandon the governmental-proprietary distinction in numerous fields, including tenth amendment law, see Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528, 545-47 (1985), intergovernmental tax immunity, see South Carolina v. Baker, 485 U.S. 505, 523 n.14 (1988), and governmental tort immunity, see W. KEETON, D. DOBBS, R. KEETON & D. OWEN, PROSSER AND KEETON ON TORTS § 131, at 1053-54 (5th ed. 1984).
77. See Wells & Hellerstein, The Governmental-Proprietary Distinction in Constitutional Law, 66 VA. L. REV. 1073, 1073 & nn.1-8 (1980) (collecting critiques). The distinction breaks down in both directions. First, governments have long engaged in business activities and provided (and often charged for) various consumer services, such as transportation, education, garbage collection, electricity, and medical care. Second, it is hard to think of a governmental activity that has not or could not be performed by private persons. See Indian Towing Co. v. United States, 350 U.S. 61, 67-68 (1955). These problems have proven sufficient to force the Court to abandon the governmental-proprietary distinction in numerous fields, including tenth amendment law, see Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528, 545-47 (1985), intergovernmental tax immunity, see South Carolina v. Baker, 485 U.S. 505, 523 n.14 (1988), and governmental tort immunity, see W. KEETON, D. DOBBS, R. KEETON & D. OWEN, PROSSER AND KEETON ON TORTS § 131, at 1053-54 (5th ed. 1984).
78. See, e.g., Frug, Property and Power (Book Review), 1984 AM. B. FOUND. RES. J. 673, 687-90 (listing ways municipalities can further the public interest as market participants). Any governmental market participation that generated monopoly profits for the public treasury would, moreover, seem indistinguishable from a governmental tax.
79. NCAA v. Tarkanian, 488 U.S. 179, 194 n.14 (1988).
80. See J. NOWAK, R. ROTUNDA & J. YOUNG, CONSTITUTIONAL LAW § 12.1(a), at 422 (3d ed. 1986).
81. See supra pp. 673-74.
82. The immunity accorded municipal restraints is discussed below at pp. 729-38. As will be evident after the discussion there, the analysis in Part II also applies to restraints authorized by the state and resulting from some mix of involvement by municipal officials and private actors.
83. See, e.g., Wiley, supra note 3, at 731 n.85.
84. L. TRIBE, AMERICAN CONSTITUTIONAL LAW § 18-1, at 1688 (2d ed. 1988) (emphasis in original).
85. See, e.g., Fisher v. City of Berkeley, 475 U.S. 260, 265 (1986) ("Legislation that would otherwise be pre-empted . . . may nonetheless survive if it is found to be state action immune from antitrust scrutiny . . . ." (emphasis added)).
86. See 324 Liquor Corp. v. Duffy, 479 U.S. 335, 343-45 (1987); California Retail Liquor Dealers Ass'n v. Midcal Aluminum, Inc., 445 U.S. 97, 105-06 (1980); Schwegmann Bros. v. Calvert Distillers Corp., 341 U.S. 384 (1951). Schwegmann invalidated only those portions of the state statute that went beyond the now-repealed exemption provided by the Miller-Tydings Act. See id. at 386-95; infra note 96.
87. See 324 Liquor, 479 U.S. at 344-45 & nn.6-8; Midcal, 445 U.S. at 105-06; Schwegmann, 341 U.S. at 389 ("private conduct"); see also Fisher, 475 U.S. at 267-69 (explaining Schwegmann and Midcal in these terms).
88. See 324 Liquor, 479 U.S. at 340 (appealing judicial and administrative enforcement of a suspended license and $1000 fine); Midcal, 445 U.S. at 100 (seeking to enjoin administrative enforcement that could lead to a fine or suspended license); Schwegmann, 341 U.S. at 385-86 (appealing a judicial injunction to comply with statute). For the contrasting constitutional position, see, for example, Shelley v. Kraemer, 334 U.S. 1, 19-20 (1948), which held that judicial enforcement of a racially restrictive covenant constitutes state action under the Constitution; and New York Times Co. v. Sullivan, 376 U.S. 254, 265 (1964), which held that judicial enforcement of tort law also constitutes state action.
89. See 324 Liquor, 479 U.S. at 337-38; Midcal, 445 U.S. at 99; see also Patrick v. Burget, 486 U.S. 94, 101-06 (1988) (holding that peer review mandated by state statute is not protected by antitrust state action immunity). In contrast, conduct by private parties mandated by statute or regulation is usually deemed state action under constitutional law. See, e.g., Skinner v. Railway Labor Executives' Ass'n, 109 S. Ct. 1402, 1411-12 (1989).
90. See 324 Liquor, 479 U.S. at 337-40; Midcal, 445 U.S. at 99-100; Schwegmann, 341 U.S. at 386-88. In contrast, the finding of constitutional state action in Shelley v. Kraemer, which continues to be controversial, see, e.g., Brest, supra note 64, at 1323 n.109, because it implies that constitutional review might apply to any private ordering enforced by the state, has been justified on the ground that it at least involved enforcement of a racially restrictive covenant against the wishes of a willing seller and buyer. See J. NOWAK, R. ROTUNDA & J. YOUNG, supra note 69, § 12.3, at 433-34.
91. See Old Dearborn Distrib. Co. v. Seagram-Distillers Corp., 299 U.S. 183, 193-98 (1936) (upholding a state statute requiring business to sell a brand at the prices set by fair trade contracts whether or not they were parties to the contract).
92. 324 Liquor, 479 U.S. at 344-45 (quoting Midcal, 445 U.S. at 105-06).
93. See id. at 345 n.8 (quoting Fisher v. City of Berkeley, 475 U.S. 260, 268 (1986)).
94. Of course, a rich literature supports the proposition that the financial interest of suppliers in resale prices is often procompetitive. See sources cited supra note 46. It cannot be denied, however, that suppliers have a financial interest and that the argument that this interest is procompetitive has so far failed to persuade the Supreme Court to eliminate the per se rule against vertical price restraints.
95. See 324 Liquor, 479 U.S. at 344 n.6, 345; Midcal, 445 U.S. at 105-06 & n.9.
96. 15 U.S.C. § 1 (1988).
97. See, e.g., Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 761, 763 (1984).
98. 475 U.S. 260 (1986).
99. See id. at 266-67. Although Fisher involved a municipal ordinance, the Court made clear that the doctrine it was announcing would apply equally to the unilateral commands of state or local governments. See id. at 265-70.
100. Id. at 267 (citation omitted).
101. See 324 Liquor Corp. v. Duffy, 479 U.S. 335, 341-43 (1987); California Retail Liquor Dealers Ass'n v. Midcal Aluminum, Inc., 445 U.S. 97, 102-03 (1980); Schwegmann Bros. v. Calvert Distillers Corp., 341 U.S. 384, 386 (1951).
102. The Court bas long held that there is no agreement under the Sherman Act when a supplier announces resale prices and refuses to deal with buyers who fail to comply. See, e.g., Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 761 (1984). In such cases, it concludes, no "meeting of the minds" between the buyer and supplier exists. Id. at 764 & n.9.
103. See generally P. AREEDA & H. HOVENKAMP, supra note 22, ¶ 209.1, at 88-89, 93-94, 95 (concluding that there was no agreement in Midcal, Schwegmann, or 324 Liquor).
104. Fisher, 475 U.S. at 267-68 (citations omitted).
105. See id. at 268-69.
106. Id. at 269.
107. The Court's manipulation of the concept of an agreement is highlighted by the formal inconsistency with its prior analysis in Schwegmann. The first case to hold that the state action doctrine did not immunize a resale price statute, Schwegmann also presented the question whether the restraint was immune under the now-repealed Miller-Tydings Act, ch. 690, tit. 8, 50 Stat. 673, 693 (1937), repealed by Consumer Goods Pricing Act of 1975, Pub. L. No. 94-145, 89 Stat. 801, which then immunized "contracts or agreements" fixing resale prices. The Court there concluded that the restraint was not an agreement because the retailers had not agreed to the resale prices set by suppliers under the statute. See Schwegmann Bros. v. Calvert Distillers Corp., 341 U.S. 384, 387-90 (1951). Thus, the same restraint deemed a non-agreement under the Miller-Tydings Act satisfies the agreement requirement of the Sherman Act under current doctrine.
108. The Court made this clear in 324 Liquor, a post-Fisher decision, when it rejected the argument that statutory vertical price restraints were not agreements under § 1 of the Sherman Act on the ground that the statute granted a degree of private regulatory authority to private actors. See 324 Liquor Corp. v. Duffy, 479 U.S. 335, 345 n.8 (1987) (citing Fisher).
109. 421 U.S. 773 (1975).
110. 370 U.S. 690 (1962).
111. See Goldfarb, 421 U.S. at 776 & n.2, 789-90.
112. Id. at 791-92 (citations omitted).
113. Continental Ore, 370 U.S. at 703 n.11. To be precise, the governmental agent was a corporate subsidiary of the defendant. See id. at 692.
114. Id. at 706-07.
115. Id. at 707.
116. Goldfarb, 421 U.S. at 791.
117. Continental Ore, 370 U.S. at 707.
118. See Goldfarb, 421 U.S. at 790-91; Continental Ore, 370 U.S. at 706. Goldfarb also supported its conclusion that state agency status did not shield the state bar from antitrust review by citing Gibson v. Berryhill, 411 U.S. 564, 578-79 (1973), which held that a state board composed of self-employed optometrists would violate due process by conducting hearings on whether to revoke the licenses of competitors. See Goldfarb, 421 U.S. at 791. This reliance is instructive for two reasons. First, Gibson explicitly based its holding on the pecuniary interest of the board's members in excluding competitors. This suggests that the Goldfarb Court was also focusing on financial interest and viewed it as the factor that rendered the state agency "private" for antitrust purposes. Second, comparing Goldfarb to Gibson underscores the divergence of constitutional and antitrust state action doctrine: the financial interest that prevents state agency action from being treated as state action for antitrust purposes does not prevent it from being treated as state action for constitutional purposes. In fact, it forms the basis for a constitutional violation only possible if state action is present.
119. 486 U.S. 492 (1988).
120. See id. at 499-502.
121. See id. at 499.
122. See id. at 498 & n.2, 500.
123. See id. at 495-96.
124. Id. at 501.
125. See id.
126. Later in Allied Tube the Court suggested that political accountability might sometimes be relevant, stating that "where, as here, the restraint is imposed by persons unaccountable to the public and without official authority, many of whom have personal financial interests in restraining competition, we have no difficulty concluding that the restraint has resulted from private action." Id. at 502. As discussed in Part IV, political accountability may in fact be relevant to determining whether financially disinterested restraints are immune from antitrust scrutiny. See infra pp. 738-46. It seems unlikely, however, that the Court intended to suggest that political accountability might be sufficient to render a financially interested actor immune from antitrust review, particularly since the Court mentions the two other factors, but not the lack of accountability, when it initially concludes the association is private. This issue is explored below at pp. 712-17, which argues that accountable but financially interested actors should not be immune and collects case law supporting that proposition.
127. The Court provided further evidence of this with its decision in Washington State Electrical Contractors Association v. Forrest, 488 U.S. 806 (1989) (mem.), vacating and remanding 839 F.2d 547 (9th Cir. 1988). Forrest involved an antitrust suit brought against a minimum wage regulation promulgated by a state council. The council was officially established by statute and exercising state-delegated regulatory authority, but six of its seven voting members were representatives of employees and employers, see Washington State Elec. Contractors Ass'n v. Forrest, 839 F.2d 547, 549 (9th Cir. 1988), vacated and remanded, 488 U.S. 806 (1989), and thus financially interested. Although the Ninth Circuit recognized that no active supervision would be required if the state council was a state agency for purposes of state action doctrine, the court "perceive[d] certain problems when a state agency is staffed with individuals who represent private interests." Id. at 553. It then held that in any event the council was immune because it was adequately supervised by various other officials. See id. at 553-55. The Supreme Court vacated and remanded for reconsideration in light of Patrick v. Burget, 486 U.S. 94 (1988), which clarified the showing necessary to show active supervision. See Forrest, 488 U.S. at 806. This decision may have simply reflected the Court's desire to clean up the Ninth Circuit's active supervision case law. But it is often the practice of the Court to deny certiorari rather than vacate and remand for reconsideration in cases where it is confident the judgment is correct. Because the judgment would have clearly been correct if the state council was entitled to the same immunity as typical state agencies, the Court's decision to vacate and remand is consistent with the view that financial interests disable an entity from being treated as a state agency for the purposes of state action doctrine.
128. Allied Tube, 486 U.S. at 501 (quoting Town of Hallie v. City of Eau Claire, 471 U.S. 34, 45 (1085)).
129. 471 U.S. 48 (1985).
130. Id. at 64. Specifically, a Mississippi statute authorizing a state agency to set "just and reasonable" trucking rates was sufficient authorization to immunize a scheme whereby the state agency permitted trucking companies to agree collectively on the rates they would submit to the agency even though the statute itself did not authorize such collective ratemaking. See id. at 63-66.
131. Id. at 64.
132. See, e.g., Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381, 398-99 (1940); Mashaw, Prodelegation: Why Administrators Should Make Political Decisions, 1 J.L. ECON. & ORG. 81, 82, 91-99 (1985) (cataloging reasons for allowing broad delegation).
133. Southern Motor Carriers, 471 U.S. at 64.
134. Since all that must be clearly shown under Southern Motor Carriers is a general intent to create a regulatory agency, it would be remarkable if a neutral state agency ever lacked sufficient authorization.
135. See Lease Lights, Inc. v. Public Serv. Co., 849 F.2d 1330, 1333-35 (roth Cir.), cert. denied, 488 U.S. 1019 (1988).
136. See, e.g., Llewellyn v. Crothers, 765 F.2d 769, 774 (9th Cir. 1985).
137. See P. AREEDA & H. HOVENKAMP, supra note 22, ¶ 212.3b, at 145-49.
138. See Llewellyn, 765 F.2d at 774-75. Piercing immunity only when regulators act in bad faith would not be much of a limitation because plaintiffs could still raise antitrust suits against any regulatory action by challenging the subjective motivations of the regulators.
139. See Lease Lights, 849 F.2d at 1334.
140. See, e.g., Cantor v. Detroit Edison Co., 428 U.S. 579, 592-95 (1976); Goldfarb v. Virginia State Bar, 421 U.S. 773, 790-91 (1975); Northern Secs. Co. v. United States, 193 U.S. 197, 345-46 (1904). Commentators also seem to vary the intensity of authorization demanded according to the financial interest of the actor. Compare 1 P. AREEDA & D. TURNER, supra note 41, ¶ 214a, at 80-82 (stressing the need for dear authorization in a discussion of cases that involved financially interested restraints) with P. AREEDA & H. HOVENKAMP, supra note 22, ¶ 212.3b, at 145-49 (stressing the need to interpret the authorization requirement loosely in a discussion of cases that involved restraints imposed by neutral state agencies).
141. See Town of Hallie v. City of Eau Claire, 471 U.S. 34, 46 n.10 (1984).
142. See P. AREEDA & H. HOVENKAMP, supra note 22, ¶ 212.7, at 166 (collecting cases).
143. Hallie, 471 U.S. at 47.
144. 479 U.S. 335, 344-45 & n.7 (1987).
145. 486 U.S. 94, 100-05 (1988).
146. Id. at 101; see also id. ("[T]he active supervision requirement mandates that the State exercise ultimate control over the challenged anticompetitive conduct").
147. See id. at 101-05; 324 Liquor, 479 U.S. at 344-45 & n.7.
148. Patrick, 486 U.S. at 101 (quoting 324 Liquor, 479 U.S at 345 n.7).
149. In both Patrick and 324 Liquor, the private persons controlling the challenged restraints were financially interested. In Patrick they were doctors who competed with the doctor whose hospital privileges they terminated. See id. at 96-98. In 324 Liquor they were wholesalers with financial interests in the resale prices of their retailers. See 479 U.S. at 337-40.
150. Patrick, 486 U.S. at 101. The Court also quoted Hallie to the effect that "'[w]here a private party is engaging in the anticompetitive activity, there is a real danger that he is acting to further his own interests, rather than the governmental interests of the State'" and that a "'private party . . . may be presumed to be acting primarily on his or its own behalf.'" Id. at 100 (quoting Town of Hallie v. City of Eau Claire, 471 U.S. 34, 45, 47 (1984)).
151. 466 U.S. 558 (1984).
152. See id. at 564-65, 569-70 & n.19.
153. See id. at 561-64 & n.11, 572-73, 575-78.
154. "Even if Committee members had decided to grade more strictly, under the grading formula approved by the court, for the purpose of reducing the total number of lawyers admitted to practice, the court knew and approved the number of applicants. This was the definitive action." Id. at 576 n.28 (emphasis in original); see also id. at 578 n.31 (emphasizing that the plaintiff did not claim a conspiracy against himself in particular but solely a "'conspiracy to limit the number' of applicants admitted").
155. See id. at 389 n.12 (Stevens, J., dissenting).
156. See Patrick v. Burget, 486 U.S. 94, 100-01 (1988) (stressing the need to have a state official determine whether the anticompetitive act accords with state policy); see also Fisher v. City of Berkeley, 475 U.S. 260, 269 (1986) (holding open the possibility that privately set restraints "ostensibly under the absolute control of government officials" might be subject to antitrust scrutiny). Cantor also seems to establish the proposition in text. Cantor involved a claim that an electric utility's practice of distributing free light bulbs created an illegal tie between light bulbs and electricity sales that foreclosed competition in the unregulated light bulb market. The Court held that even though the practice was described in a rate tariff approved by the state agency regulating electricity sales, the utility was not immune from antitrust liability because under the circumstances agency approval did not indicate that state policy favored the practice but rather that it was neutral on the issue. See Cantor v. Detroit Edison Co., 428 U.S. 579, 581-85, 594 (1976); id. at 604-05 (Burger, C.J., concurring in part); 1 P. AREEDA & D. TURNER, supra note 41, ¶ 214, at 82-83, 87-89. Although Professors Areeda and Turner state that allegations of routine rubberstamping should ordinarily not oust Parker immunity, see id. ¶ 213c, at 75, they agree that a privately set restraint cannot be immunized by agency inaction, see id. ¶ 213f, at 77-79, or even by agency approval unless the agency considers the anticompetitive effects of the restraint and makes an affirmative policy decision that the restraint is desirable as a matter of state policy, see id. ¶ 214, at 80-89. They thus apparently mean only to exclude allegations that agencies lacked an adequate basis for their substantive decisions to restrain competition, see id. at 85-86, or have been "captured" by financially interested parties. I agree that state action immunity requires only that a neutral state agency actually made a substantive decision in favor of the challenged restraint and that the doctrine thus excludes challenges to the adequacy of a neutral agency's consideration of anticompetitive effects. I also agree, for reasons explained below at pp. 717-19, that courts should not deny antitrust immunity because of "capture."
157. Patrick, 486 U.S. at 101.
158. The requirement of financial interest does not exclude nonprofit corporations, for nonprofit status does not preclude firms from reaping financial profits by restraining trade. It only disables them from distributing those profits to investors. See Hansmann, Reforming Nonprofit Corporation Law, 129 U. PA. L. REV. 497, 501 (1981). The Court has thus correctly held that nonprofit corporations are fully subject to the Sherman Act. See NCAA v. Board of Regents of the Univ. of Okla., 468 U.S. 85, 100 n.22 (1984). Nonprofit corporations may, however, in some instances be exempted from the Robinson-Patman Act, see 15 U.S.C. § 13(c) (1988), or the Federal Trade Commission Act, see id. § 44.
159. See, e.g., R. BORK, THE ANTITRUST PARADOX 90-91, 110-12 (1978).
160. See, e.g., Lande, Wealth Transfers as the Original and Primary Concern of Antitrust: The Efficiency Interpretation Challenged, 34 HASTINGS L.J. 65, 74-77, 82-106, 142-51 (1982).
161. See, e.g., Pitofsky, The Political Content of Antitrust, 127 U. PA. L. REV. 1051, 1053-58 (1979).
162. See 21 CONG. REC. 2460 (1890) (remarks of Sen. Sherman) ("I admit that it is difficult to define in legal language the precise line between lawful and unlawful combinations. This must be left for the courts to determine in each particular case."); id. at 4099 (Rep. Bland); id. at 4089 (Rep. Culberson); id. at 3148 (Sen. Edmunds); id. at 2558 (Sen. Turpie). For similar comments by the principal drafter of §§ 1-2 of the Sherman Act, see Edmunds, The Interstate Trust and Commerce Act of 1800, 194 N. AM. REV. 801, 813 (1911).
163. Cf. Easterbrook, Statutes' Domain, 50 U. CHI. L. REV. 533, 540-43 (1983). I differ from Easterbrook, who treats a statute's domain as effectively unlimited when it delegates "common law" authority to judges, see id. at 544-47, in that I believe that the Sherman Act gives judges common law authority but limits its domain to devising standards for judging anticompetitive restraints by financially interested actors.
164. See 21 CONG. REC. 4101 (1890) (remarks of Rep. Heard); id. at 1768 (Sen. George); id. at 138 (Sen. Turpie); 20 CONG. REC. 1457-58 (1889) (Sen. Jones); Antitrust Planks of the Democratic Party Platform (June 5, 1888) and the Republican Party Platform (June 19, 1888) [hereinafter Antitrust Planks], reprinted in T. MCKEE, THE NATIONAL CONVENTIONS AND PLATFORMS OF ALL POLITICAL PARTIES 1789-1905, at 235, 241 (1906).
165. See 21 CONG. REC. 2459-60 (1890) (remarks of Sen. Sherman) (quoting with approval opinions suggesting that the states could create monopolies but that companies could not usurp privileges not conferred by law by combining into one on their own).
166. See 1 E. KINTNER, THE LEGISLATIVE HISTORY OF THE FEDERAL ANTITRUST LAWS AND RELATED STATUTES 23 n.1.151 (1978).
167. 21 CONG. REC. 2728 (1890).
168. 20 CONG. REC. 1458 (1889); see also sources cited infra notes 158, 166-67.
169. The remarks of Representative Heard are instructive: [Business combinations] extort millions from the citizens of this Republic without adding one cent of value to our productions or one iota of increase to our prosperity. In fact, the very object of these giant schemes . . . is not to increase the volume of supply, and thus less[e]n the cost of any useful commodity, but rather to repress, reduce, and control the volume of every article that they touch, so that the cost to consumers is increased while the expenditure for production is lessened, and thereby their profit secured.
170. CONG. REC. 4101 (1890). For similar statements, see id. at 4098 (Rep. Taylor); id. at 2457 (Sen. Sherman).
171. 21 CONG. REC. 2728 (1890) (remarks of Sen. Hoar); 20 CONG. REC. 1457 (1889) (Sen. Jones).
172. 20 CONG. REC. 1458 (1889) (remarks of Sen. Jones); Antitrust Planks, supra note 153, at 235; cf. 21 CONG REC. 2457 (1890) (Sen. Sherman) (attacking combinations that "increase the profits of the producer at the cost of the consumer").
173. 21 CONG. REC. 5959 (1890) (remarks of Rep. Anderson); id. at 4101 (Rep. Heard); id. at 4098 (Rep. Taylor); id. at 2646 (Sen. Reagan); id. at 2614 (Sen. Coke); id. at 1766 (Sen. George); 20 CONG. REC. 1457-58 (1889) (Sen. Jones); Antitrust Planks, supra note 153, at 235.
174. 21 CONG. REC. 1766 (1890) (remarks of Sen. George); 20 CONG. REC. 1459 (1889) (Sen. George); cf. id. at 2602 (Sen. George) (stressing the need to protect the public from being "plundered" by business combinations).
175. Id. at 4101 (remarks of Rep. Heard); id. at 2461 (Sen. Sherman quoting Sen. George); id. at 1768 (Sen. George).
176. Id. at 1457-58 (remarks of Sen. Jones); 21 CONG. REC. 2460 (1890) (Sen. Sherman).
177. Indeed, the only congressional discussion of a financially disinterested restraint imposed by politically unaccountable parties suggests that Congress did not intend the Sherman Act to cover such restraints. See infra note 337 and accompanying text.
178. The legislative history is ambiguous on whether the Sherman Act was intended to cover financially interested combinations by labor unions and farmers' associations. Some congressmen argued that such combinations should not be covered because they were needed to combat business combinations. See 21 CONG. REC. 2606 (1890) (remarks of Sen. Stewart); id. at 2561 (Sen. Teller). Others argued that, since the Act would prohibit business combinations, it ought to prohibit the labor and agricultural combinations opposed to business combinations as well. See, e.g., id. at 2726-27 (Sen. Edmunds); id. at 2562 (Sen. Reagan). Although at one point the Senate, meeting as a Committee of the Whole, passed an amendment exempting labor and farmer combinations, see id. at 2612, this exemption was deleted by the Senate Judiciary Committee in drafting the version that was eventually enacted, see S. 1, 51st Cong., 1st Sess., 21 CONG. REC. 3152-53 (1890). The reason for this is unclear. It may have indicated a victory for the views of Senator Edmunds, who was the principal drafter. See 1 E. KINTNER, supra note 155, at 23 & n.1.151. It may have indicated that the Committee thought a jurisdictional change narrowing the Act to combinations that restrained trade "among the several States," id. at 275-76, eliminated the problem as a practical matter because farmers and unions seldom restrained interstate transactions directly. Or it may have simply indicated a desire to sidestep a thorny issue that might hinder enactment by punting the issue to the courts. Today, the issue whether the Sherman Act itself exempts labor or agricultural combinations has largely been mooted because a variety of subsequent federal statutes provide explicit or implicit exemptions. See generally P. AREEDA & H. HOVENKAMP, supra note 22, ¶¶ 228-229, at 210-33 (discussing antitrust exemptions for labor unions and agricultural and fishermen's cooperatives). What is interesting for our purposes is that, although the congressmen who passed the Sherman Act differed on the desirability of permitting labor and agricultural combinations, absent some exemption or jurisdictional exclusion many congressmen viewed these financially interested restraints as falling within the statute. None, in contrast, expressed the view that the financially disinterested restraints of governmental decisionmakers might be covered.
179. 21 CONG. REC. 2457 (1890). Senator Sherman also remarked: It is sometimes said of these combinations that they reduce prices to the consumer by better methods of production, but all experience shows that this saving of cost goes into the pockets of the producer. The price to the consumer depends upon the supply, which can be reduced at pleasure by the combination. . . . The aim is always for the highest price that will not check demand. Id. at 2460.
180. See, e.g., 21 CONG. REC. 6116 (1890) (remarks of Sen. Vest) (asserting that railroad combinations "fix the price of rates to suit themselves, without regard to the public at large or the consumers of the country"); id. at 4102 (Rep. Fithian) (arguing that trusts "enhance the price of commodities to the people beyond an honest profit"); id. at 4098 (Rep. Taylor) ("I am opposed to trusts . . .; they toil not . . . and yet they accumulate their numberless millions from the toil of others. They lay burdens,
181. Justices and commentators operating within the conflict and accommodation paradigm have viewed the legislative history differently. They stress that in 1890, when the Sherman Act was enacted, congressional authority to regulate interstate commerce was narrowly defined. See, e.g., Cantor v. Detroit Edison Co., 428 U.S. 579, 632-40 (1976) (Stewart, J., dissenting); Easterbrook, supra note 2, at 40-41; Slater, supra note 38, at 84-86; Werden & Balmer, Conflicts Between State Law and the Sherman Act, 44 U. PITT. L. REV. 1, 49-58 (1982). A conflict between federal and state law, they argue, has arisen only because the scope of the Sherman Act has expanded along with the expansion in Congress' commerce clause authority. Some conclude from this that Congress affirmatively intended not to interfere with state regulation and that the present conflict should thus be resolved in favor of the states. See Cantor, 428 U.S. at 632-35 (Stewart, J., dissenting). Others resolve the conflict in favor of federal competition policy, emphasizing that the Sherman Act's jurisdictional expansion is premised on the Court's conclusion that Congress intended the Sherman Act to reach to the full extent of its commerce clause power. See Werden & Balmer, supra, at 56-58. Finally, some argue that the Sherman Act Congress could not have had any meaningful intent about bow to resolve a conflict that arose after its time and that courts must thus reach their own conclusions about how to accommodate the conflict now presented. See Easterbrook, supra note 2, at 40-41; Slater, supra note 38, at 85-86. I reject this approach for three reasons. First, as should be evident from the foregoing, this focus on the status of interstate commerce jurisdiction in 1890 can lead to a variety of conflicting conclusions and thus provides no useful guidance in addressing current doctrinal questions. Second, although the narrowness of Congress' jurisdiction in 1890 precluded many potential conflicts, it did not avoid them all. After all, state corporate and common law authorized and often enforced the very trusts and restraints of trade Congress was outlawing. See P. AREEDA & L. KAPLOW, ANTITRUST ANALYSIS ¶ 131, at 47-48 (4th ed. 1988); 1 E. KINTNER, supra note 155, at 10-11. Where trusts, corporations, or other businesses effectuated restraints on interstate commerce, Congress clearly intended to enjoin them and to nullify any state law enforcement or authorization. See supra note 59 (describing how in the most contemporaneous state action decision, Northern Secs. Co. v. United States, 193 U.S. 197 (1904), the Supreme Court held that the Sherman Act invalidated a holding corporation authorized by state law). The failure of the legislative history to address less traditional forms of state legal involvement in interstate commerce is probably due to the fact that direct state "regulation" of interstate commerce was forbidden at the time. See L. TRIBE, supra note 73, § 6-4, at 406-07. Third, and more generally, changed circumstances are no cause for discarding evidence of congressional intent. The best one can do is to identify the policy concerns Congress had, defined as those concerns were by the (jurisdictional) context of the time, and apply those identified policy concerns to the changed context Although the past jurisdictional context helps explain why the legislative history does not contain more specific statements of congressional intent regarding state regulation, it does not alter the basic nature of Congress' policy concern: a desire to curb financially interested restraints. There is no difficulty applying this intent to the full extent of Congress' present regulatory authority.
182. Justices and commentators operating within the conflict and accommodation paradigm have viewed the legislative history differently. They stress that in 1890, when the Sherman Act was enacted, congressional authority to regulate interstate commerce was narrowly defined. See, e.g., Cantor v. Detroit Edison Co., 428 U.S. 579, 632-40 (1976) (Stewart, J., dissenting); Easterbrook, supra note 2, at 40-41; Slater, supra note 38, at 84-86; Werden & Balmer, Conflicts Between State Law and the Sherman Act, 44 U. PITT. L. REV. 1, 49-58 (1982). A conflict between federal and state law, they argue, has arisen only because the scope of the Sherman Act has expanded along with the expansion in Congress' commerce clause authority. Some conclude from this that Congress affirmatively intended not to interfere with state regulation and that the present conflict should thus be resolved in favor of the states. See Cantor, 428 U.S. at 632-35 (Stewart, J., dissenting). Others resolve the conflict in favor of federal competition policy, emphasizing that the Sherman Act's jurisdictional expansion is premised on the Court's conclusion that Congress intended the Sherman Act to reach to the full extent of its commerce clause power. See Werden & Balmer, supra, at 56-58. Finally, some argue that the Sherman Act Congress could not have had any meaningful intent about bow to resolve a conflict that arose after its time and that courts must thus reach their own conclusions about how to accommodate the conflict now presented. See Easterbrook, supra note 2, at 40-41; Slater, supra note 38, at 85-86. I reject this approach for three reasons. First, as should be evident from the foregoing, this focus on the status of interstate commerce jurisdiction in 1890 can lead to a variety of conflicting conclusions and thus provides no useful guidance in addressing current doctrinal questions. Second, although the narrowness of Congress' jurisdiction in 1890 precluded many potential conflicts, it did not avoid them all. After all, state corporate and common law authorized and often enforced the very trusts and restraints of trade Congress was outlawing. See P. AREEDA & L. KAPLOW, ANTITRUST ANALYSIS ¶ 131, at 47-48 (4th ed. 1988); 1 E. KINTNER, supra note 155, at 10-11. Where trusts, corporations, or other businesses effectuated restraints on interstate commerce, Congress clearly intended to enjoin them and to nullify any state law enforcement or authorization. See supra note 59 (describing how in the most contemporaneous state action decision, Northern Secs. Co. v. United States, 193 U.S. 197 (1904), the Supreme Court held that the Sherman Act invalidated a holding corporation authorized by state law). The failure of the legislative history to address less traditional forms of state legal involvement in interstate commerce is probably due to the fact that direct state "regulation" of interstate commerce was forbidden at the time. See L. TRIBE, supra note 73, § 6-4, at 406-07. Third, and more generally, changed circumstances are no cause for discarding evidence of congressional intent. The best one can do is to identify the policy concerns Congress had, defined as those concerns were by the (jurisdictional) context of the time, and apply those identified policy concerns to the changed context Although the past jurisdictional context helps explain why the legislative history does not contain more specific statements of congressional intent regarding state regulation, it does not alter the basic nature of Congress' policy concern: a desire to curb financially interested restraints. There is no difficulty applying this intent to the full extent of Congress' present regulatory authority.
183. See, e.g., P. SAMUELSON & W. NORDHAUS, ECONOMICS 502-49 (12th ed. 1985).
184. See, e.g., Cirace, supra note 40, at 491-95.
185. See, e.g., Brown v. Hartladge, 456 U.S. 45, 56 & n.7 (1982) ("[O]ur tradition of political pluralism is partly predicated on the expectation that voters will pursue their individual good through the political process, and that the summation of these individual pursuits will further the collective welfare."). I later address the possibility that politically accountable actors will be disproportionately influenced by some affected interests, see infra pp. 717-29, and then consider the possibility that not all affected interests will be represented, see infra pp. 739-38. In the civic republican account, disinterested accountable actors are trusted not because of their ability to aggregate and weigh the affected personal interests accurately, but because their participation in political debate and lack of corruption enables them to transcend those personal interests and discover or define the "true" public interest. See M. TUSHNET, RED, WHITE, AND BLUE: A CRITICAL ANALYSIS OF CONSTITUTIONAL LAW 11-17 (1988). Because this account recognizes that financial self-interest can corrupt civic virtue, see id. at 11, it is not inconsistent with my thesis. The influence of civic republicanism on the Court is, however, in doubt. Compare id. at 13 (suggesting little if any impact on the Court) with Sunstein, Interest Groups in American Public Law, 38 STAN. L. REV. 29, 49-68 (1985) (arguing that many judicial doctrines aim to promote civic republicanism).
186. See supra note 116.
187. The Supreme Court has in fact vacated a decision conferring state action immunity on a board which had employer and employee representation but no consumer representation. See id.
188. In resolving some technical line-drawing questions about financial interest, such as whether an administrator should be regarded as financially interested when her husband owns stock in a financially interested corporation, antitrust courts may be well advised to look to the existing standards for judging self-interest contained in various recusal statutes.
189. Under current doctrine the Court could reach this conclusion by determining that the restraint was really that of the doctors rather than that of the state legislature. Cf. 1 P. AREEDA. & D. TURNER, supra note 41, ¶ 214b, at 83-84 (concluding that immunity should not apply when the government is the "victim" of a restraint). For the same reasons, efforts by financially, interested actors to procure governmental action by coercing the government with restraints of trade merit no antitrust petitioning immunity. So the Court has held. See FTC v. Superior Court Trial Lawyers Ass'n, 110 S. Ct. 768, 776 (1990). On the other hand, where the only coercion is of a type contemplated by the political process - such as threatening to withhold votes or campaign financing - the coercion does not eliminate the assurance that ordinarily attends the political process and both the petitioning and any resulting law should receive antitrust immunity. Whether that political process should be reformed (for example, through tight controls on campaign contributions) raises issues beyond the scope of this Article.
190. 110 S. Ct. 3211 (1990), granting cert. to Omni Outdoor Advertising, Inc. v. Columbia Outdoor Advertising, Inc., 891 F.2d 1127 (4th Cir. 1989).
191. 317 U.S. 341, 351-52 (1943).
192. See Eastern R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 138-40 (1961).
193. See Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 502 n.7 (1988).
194. P. AREEDA & H. HOVENKAMP, supra note 22, ¶ 203.3b, at 34.
195. Id. ¶ 203.3c, at 35.
196. See Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 764 & n.9, 765 (1984).
197. See Hoover v. Ronwin, 466 U.S. 558, 580 (1984).
198. See P. AREEDA & H. HOVENKAMP, supra note 22, ¶ 203.3c, at 35-39. They conclude that the conspiracy exception should not apply unless a government official "(1) Accepts a bribe; (2) Decides out of personal bias and for no other reason; (3) Decides in favor of a personal financial interest in privity with or perhaps even closely allied to that of one or more of the plaintiff's rivals." Id. at 39. Cases (1) and (3) are clearly cases where the government official is financially interested and thus "private" within the meaning of state action doctrine articulated above. Case (2) is not, but although Areeda and Hovenkamp suggest that the "conspiracy" label would not be "inapt" where an official decides out of personal bias, they also stress that the difficulties of inquiring into bias should probably foreclose such inquiries. Id. at 36.
199. This applies to the Noerr co-conspirator exception as well. Similarly, with respect to the claimed "commercial" exception to Noerr, governmental actions in response to a petition should not be considered "commercial" unless the government or its officials have a financial interest in the action. After all, Allied Tube cited both the commercial and co-conspirator exceptions to Noerr to support the proposition that "[t]he dividing line between restraints resulting from governmental action and those resulting from private action may not always be obvious." Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 501-02 (1988). This suggests that those exceptions are meant to help define the line between governmental and private restraints and as such should conform to the same process view that informs that line more generally.
200. The rejected claims include assertions that retraining competition resulted in reasonable prices, see United States v. Trenton Potteries Co., 273 U.S. 392, 395-401 (1927), deterred unfair copying, see Fashion Originators' Guild of Am. v. FTC, 312 U.S. 457, 467-68 (1941), avoided unsafe construction, see National Soc'y of Professional Eng'rs v. United States, 435 U.S. 679, 695-96 (1978), or improved the quality of dental care, see FTC v. Indiana Fed'n of Dentists, 476 U.S. 447, 462-64 (1986).
201. Professional Eng'rs, 435 U.S. at 690; see also NCAA v. Board of Regents of the Univ. of Okla., 468 U.S. 85, 101 n.23 (1984) ("[G]ood motives will not validate an otherwise anticompetitive practice.").
202. See, e.g., Professional Eng'rs, 435 U.S. at 692, 695.
203. See, e.g., United States v. Topco Assocs., 405 U.S. 596, 611-12 (1972); Trenton Potteries, 273 U.S. at 397-98; United States v. Trans-Missouri Freight Ass'n, 166 U.S. 290, 331-32 (1897).
204. See, e.g., Indiana Dentists, 476 U.S. at 462-63; Professional Eng'rs, 435 U.S. at 694-95. For example, the Sherman Act condemns not the possession of monopoly power but its attainment or preservation through nonproductive means. See, e.g., United States v. Grinnell Corp., 384 U.S. 563, 570-71 (1966).
205. Indeed, the availability of disinterested political forums for altering market operations may be necessary to justify the Court's refusal to admit public interest defenses by financially interested antitrust defendants: it enables the Court to point to some alternative avenue for relief. One might argue that those seeking to deviate from a regime of market competition should be forced to petition Congress. It seems unlikely, however, that Congress ever intended to retain a monopoly on enacting deviations from market competition. Nor, at least for state-set restraints without effects outside state boundaries, is there any reason to believe that Congress would generally be better than states at determining when anticompetitive deviations are warranted. See Hovenkamp & Mackerron, supra note 24, at 768-76 (arguing that, absent economies of scale in regulation, the optimal regulator is the smallest one encompassing the affected interests). See generally J. CHOPER, JUDICIAL REVIEW AND THE NATIONAL POLITICAL PROCESS 247-49 (1980) (collecting noneconomic sources supporting federalism on related grounds).
206. See Page, supra note 2, at 1128-36; see also Easterbrook, supra note 2, at 30-33 (making a similar critique); Wiley, supra note 3, at 731, 733-36, 738-79 (same).
207. See Page, supra note 2, at 1113-25.
208. See Kreimer, Allocational Sanctions: The Problem of Negative Rights in a Positive State, 132 U. PA. L. REV. 1293, 1310-12 (1984).
209. On the other hand, I wholeheartedly endorse Wiley's critique of the clear authorization requirement's role in policing administrative delegation. See Wiley, supra note 3, at 731-36. The Supreme Court has, however, effectively scuttled antitrust review of administrative delegation by weakening the dear authorization requirement where disinterested agency action is at issue. See supra pp. 691-93.
210. See S. REP. No. 829, 51st Cong., 1st Sess. (1890); H.R. REP. No. 4165, 50th Cong., 2d Sess. (1889); H.R. REP. No. 3112, 50th Cong., 1st Sess. (1888).
211. See Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 146-47, 151, 156-57 (1989).
212. See, e.g., Tumey v. Ohio, 273 U.S. 510, 523 (1927) (finding due process violated when the adjudicator had a personal pecuniary interest in outcome); see also supra note 107 (discussing Gibson v. Berryhill, 411 U.S. 564 (1973)). Similarly, a state's power to prohibit or regulate a certain form of speech in content-neutral ways does not allow the state to make the empirical judgment that its officials can be trusted with unbridled discretion to regulate that speech in content-neutral ways. See City of Lakewood v. Plain Dealer Publishing Co., 486 U.S. 750, 770 (1988).
213. Of course, unlike the states, Congress is free to conclude that its general judgment that self-interested combinations are likely to harm the public interest does not apply in particular circumstances. See, e.g., Gordon v. New York Stock Exchange, 422 U.S. 659, 683-86 (1975) (concluding that the Securities Exchange Act, 15 U.S.C. §§ 78a-78ll (1988), immunized a New York Stock Exchange rule); 15 U.S.C. § 17 (1988) (exempting labor organizations).
214. See Page, supra note 2, at 1137-38. Page responds that a state legislature is unlikely to pass such a statute and that "clear articulation" cannot be vague. Id. Efforts to encourage business collaboration seem increasingly popular, however, and one can easily imagine a state clearly articulating the view (supported by many economists) that the monopoly profits resulting from allowing cartels would lead to an increase in innovation that would improve efficiency and consumer welfare more than would the allocative efficiency resulting from competition. See, e.g., J. SCHUMPETER, CAPITALISM, SOCIALISM AND DEMOCRACY 81-106 (1943).
215. The example was posed by Frank Michelman during a talk I gave at Harvard Law School. In addition to the antitrust problems such a statute would face, the statute might not survive constitutional review. See Sunstein, Naked Preferences and the Constitution, 84 COLUM. L. REV. 1689, 1689-1733 (1984).
216. See supra note 17.
217. See, e.g., Wiley, supra note 3, at 729 n.75.
218. See, e.g., Broadcast Music, Inc. v. CBS, 441 U.S. 1, 8 & n.11 (1979).
219. See a CONG. REC. 2457, 2459 (1890) (remarks of Sen. Sherman); id. at 2563 (Sen. Sherman); id. at 3152 (Sen. Hoar).
220. See supra note 169 (noting that congressional commerce clause authority was narrow in 1890).
221. Congress may have been concerned, in that era before Erie Railroad v. Tompkins, 304 U.S. 64 (1938), that federal courts would not apply the same common law as state courts. But this seems unlikely if Congress were truly convinced that the common law uniformly condemned anticompetitive restraints of trade. The real concern, if any, about federal common law was more likely that the federal courts would be less aggressive than the most aggressive of the states.
222. See, e.g., People v. North River Sugar Ref. Co., 121 N.Y. 582, 24 N.E. 834 (1890) (voiding a corporate charter because of anticompetitive corporate activities); State ex rel. Attorney Gen. v. Standard Oil Co., 49 Ohio St. 137, 184-89, 30 N.E. 279, 290-91 (1892) (holding the Standard Oil trust agreement unlawful). This state power was well recognized by many congressmen. See, e.g., 21 CONG. REC. 4101 (1890) (remarks of Rep. Heard); id. at 4093 (Rep. Wilson); id. at 2571 (Sen. Teller); id. at 2467-68 (Sen. Hiscock); id. at 2567-68 (Sen. Hoar); id. at 2459 (Sen. Sherman); 20 CONG. REC. 1460 (1889) (Sens. Eustis and George).
223. See P. AREEDA & L. KAPLOW, supra note 169, ¶ 131, at 47-48; 1 E. KINTNER, supra note 155, at 11.
224. See 1 E. KINTNER, supra note 155, at 10; see also 21 CONG. REC. 4092 (1890) (statement of Rep. Wilson).
225. See ch. 647, 26 Stat. 209 (1890) (codified as amended at 15 U.S.C. §§ 1-7 (1988)).
226. See H.R. REP. No. 1707, 51st Cong., 1st Sess. 1 (1890).
227. Easterbrook, supra note 2, at 38, 49.
228. See M. OLSON, THE LOGIC OF COLLECTIVE ACTION 11, 15-16 (1971).
229. Putting the burden of seeking governmental action on these parties seems even more justifiable if one believes, as many economists argue, that financially interested producer groups have a systemic advantage in obtaining legislation favorable to their interests. See infra pp. 717-18.
230. Easterbrook, supra note 2, at 28, 34-35, 43-45.
231. See id. at 44.
232. Capture theory bolsters this conclusion because it predicts that states are particularly likely to enact inefficient regulation when the informational costs of individual assessment outweigh the individual costs of inefficiency. See infra pp. 717-18.
233. Rather than providing a rationale, Easterbrook relies on "casual empiricism," noting, for example, that "Illinois offers inducements to stop migration to the Sunbelt." Easterbrook, supra note 2, at 43. But as those of us living in California are well aware, desirable locations often produce no-growth movements designed to reduce the influx of new residents. See generally Briffault, Our Localism: Part I - The Structure of Local Government Law, 90 COLUM. L. REV. 1, 39-58 (1990) (describing the use of exclusionary zoning). The more formal empirical studies cited by Easterbrook measure the effects on choices among municipalities, see Easterbrook, supra note 2, at 44 n.46, 45 n.47, which are less likely to affect access to family, friends, and jobs than are choices among states. Moreover, to the extent competition among states is important, putting the burden of moving on financially interested businesses seems justifiable. For businesses, the differences in the inefficiency costs associated with different regulatory regimes are likely to be relatively large compared with the informational costs. The costs of changing regulatory regimes are also often relatively low: they may merely involve reincorporating in another state or putting a choice-of-law provision in commercial contracts. Finally, states generally have greater incentives to compete for businesses than they do for residents, because businesses increase employment and tax revenues. Thus, even if "exit" is more important than "voice," Easterbrook's theory still embodies a misallocation of burden because he has misallocated the burden of "exit" as well as the burden of "voice."
234. The Sherman Act Congress was sensitive to these concerns. See, e.g., 21 CONG. REC. 5959 (1890) (remarks of Rep. Hill).
235. True, federal antitrust law itself affords only post-injury relief and imposes on plaintiffs the burden of detecting violations and seeking judicial action. But the antitrust law contains numerous features specifically designed to address those problems. Most notably, the Sherman Act provides criminal sanctions, and plaintiffs proving violations can recover treble damages and litigation expenses. See 15 U.S.C. §§ 1-3, 15 (1988). It thus strongly deters market injuries from ever occurring by adjusting for the possibility of nondetection, richly compensates plaintiffs who suffer market injuries from proven violations, and provides powerful monetary incentives to litigate and overcome the burdens of seeking judicial action. Moreover, because the only defense allowed is that a restraint on balance furthers competition, see supra pp. 706-07, federal antitrust law encourages lawsuits by providing more certainty than could be provided if the question was whether the restraint advanced the public interest loosely defined. Finally, Congress authorizes and funds enforcement of its antitrust laws by the Justice Department and the Federal Trade Commission. If the availability of state remedies alone immunized a restraint from federal antitrust liability, all these mechanisms for policing the self-interested imposition of market injury would be rendered ineffective.
236. 435 U.S. 389 (1978).
237. Id. at 406.
238. Id.
239. 428 U.S. 579 (1976).
240. See id. at 584-85.
241. See 324 Liquor Corp. v. Duffy, 479 U.S. 335, 345 n.7 (1987).
242. See Goldfarb v. Virginia State Bar, 421 U.S. 773, 776 n.2, 789 & nn.18-19 (1975).
243. See Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 702 n.11 (1962).
244. See Patrick v. Burget, 486 U.S. 94, 103-04 (1988).
245. See Bolt v. Halifax Hosp. Medical Center, 851 F.2d 1273, 1182-84 (11th Cir. 1988), vacated en banc and per curium, 874 F.2d 755 (11th Cir. 1989), cert. denied, 110 S. Ct. 1960 (1990); P. AREEDA & H. HOVENKAMP, supra note 22, ¶ 212.7, at 174; Note, Judicial Review as Midcal Active Supervision, 57 FORDHAM L. REV. 403, 404-05, 423 (1988).
246. See Bolt, 851 F.2d at 1282-84; P. AREEDA & H. HOVENKAMP, supra note 22, ¶ 212.7, at 174; Note, supra note 232, at 416-21.
247. See Bolt, 851 F.2d at 1280, 1283-84.
248. Cf. P. AREEDA & H. HOVENKAMP, supra note 22, ¶ 212.9, at 185-86 (noting the in terrorem effect on competition of a restraint that takes effect before judicial review).
249. Although the Supreme Court recently made clear that Congress did not intend to displace state antitrust law, it also made clear that Congress did intend to supplement it. See California v. ARC Am. Corp., 109 S. Ct. 1661, 1665 (1989).
250. See, e.g., M. OLSON, supra note 213, at 33-36; Peltzman, Toward a More General Theory of Regulation, 19 J.L. & ECON. 211, 212 (1976); Stigler, The Theory of Economic Regulation, 2 BELL J. ECON. & MGMT. SCI. 3 (1971).
251. See, e.g., M. OLSON, supra note 213, at 33-36; Peltzman, Toward a More General Theory of Regulation, 19 J.L. & ECON. 211, 212 (1976); Stigler, The Theory of Economic Regulation, 2 BELL J. ECON. & MGMT. SCI. 3 (1971).
252. A third disadvantage suffered by diffusely interested groups and individuals is that voting normally requires a choice among a limited set of candidates who offer a package of positions, of which some are more important to the voter than others. Even a perfectly informed voter can thus often do no better than to choose between candidates based on the issues that intensely interest the voter, even though a candidate's stands on other issues harm the voter in more diffuse ways. To the extent this happens, the diffuse interests can be systematically underrepresented even if voters face no collective action problem in informing themselves and taking the time to vote.
253. See M. OLSON, supra note 215, at 127-28. The mechanisms of capture include making campaign contributions, influencing the information voters or government officials receive, and mobilizing group members to vote or write letters. Diffusely interested groups will go underrepresented because they have a harder time collecting the resources to monitor developing issues, make campaign contributions, present information to voters or officials, and keep group members informed. Their members may also rationally decide that their diffuse interests are not worth the effort of reading, writing, or voting about the issues.
254. For sources, see Spitzer, supra note 3, at 1304 n.54; and Wiley, supra note 3, at 724 & n.49.
255. Requiring a governmental process can, in fact, be counterproductive because it provides a means of enforcing cartels. See Easterbrook, supra note 2, at 29-31; Wiley, supra note 3, at 733.
256. Wiley, supra note 3, at 731 & n.85.
257. See id. at 715-28.
258. Id. at 743. Under Wiley's test, a regulation that is the product of capture would fail antitrust efficiency review and be preempted whenever the regulation (1) "restrains market rivalry," (2) "is not protected by a federal antitrust exemption," and (3) "does not respond directly to a substantial market inefficiency." Id.
259. Whether a capture test is a better means of determining when laws are likely to be against the public interest than a test which focuses on personal financial interest is a matter I address below at pp. 723-29. The point here is merely that capture theory does not demonstrate that there is no process distinction between disinterested politically accountable decisionmakers and financially interested ones. Indeed, even disinterested decisionmakers known to be captured should be less likely to restrain trade in ways that harm the public interest than decisionmakers with direct financial interests because the former still face some (although perhaps less effective) political pressure from the interests adversely affected by a restraint. See infra note 247.
260. Moreover, economic theorists have shown that the competition among interest groups to influence disinterested accountable processes can lead to efficient laws. See Becker, A Theory of Competition Among Pressure Groups for Political Influence, 98 Q.J. ECON. 371, 386-88, 396 (1983).
261. In fact, the interest group model of regulation predicts that: no interest group is likely to have its demand for regulation completely satisfied; most rules will consist of compromises in which no single group actually "captures" the process. Legislators will maximize their own well-being by distributing political favors among various groups so as to equalize their net marginal returns from all sources. Spitzer, supra note 3, at 1304-05 & nn.61-62 (collecting sources).
262. Wiley, supra note 3, at 743. This is quite different from the public/private distinction Wiley draws regarding remedies, which he explains in terms of underlying policies. See id. at 773-76.
263. See supra pp. 679-82.
264. See Wiley, supra note 3, at 729-39.
265. See Sunstein, Lochner's Legacy, 87 COLUM. L. REV. 873, 874-83, 917-19 (1987).
266. Wiley adopts a similarly unexplained private/public distinction by allowing only the state to offer a market imperfection defense. See Wiley, supra note 3, at 751-64. Private parties would apparently still be subject to the antitrust doctrine that they cannot defend restraints on the ground that competition does not work. See supra p. 706.
267. See Wiley, supra note 31, at 1277-78, 1282 n.29. In addition to being inconsistent with state action doctrine, the whole premise of capture theory - that antitrust courts should police efforts by self-interested producers to lobby for anticompetitive laws - runs counter to the Noerr doctrine, which immunizes precisely such self-interested petitioning efforts from antitrust review. See Eastern R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 139-40 (1961).
268. See Wiley, supra note 3, at 715.
269. See id. at 715-19.
270. Id. at 722-23 (emphasis in original).
271. Id. at 730.
272. Id. at 715, 719-23.
273. Id. at 723-28; see also Easterbrook, The Supreme Court, 1983 Term - Foreword: The Court and the Economic System, 98 HARV. L. REV. 4, 52-54 (1984) (making the same argument).
274. See Wiley, supra note 3, at 715; Wiley, supra note 31, at 1278, 1283 n.29.
275. See supra note 59 (discussing Northern Secs. Co. v. United States, 193 U.S. 197 (1904)).
276. 195 U.S. 332 (1904).
277. See id. at 340, 344-45 (holding the Sherman Act inapplicable to a claim that the governor was restraining trade by refusing to grant a pilot's license).
278. See Parker v. Brown, 317 U.S. 341, 351 (1943).
279. See id. at 352.
280. See id. at 352, 346-47.
281. Ten of the cases are discussed above in Part II: Schwegmann Bros. v. Calvert Distillers Corp., 341 U.S. 384 (1951); Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690 (1962); Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975); Cantor v. Detroit Edison Co., 428 U.S. 579 (1976); California Retail Liquor Dealers Association v. Midcal Aluminum, Inc., 445 U.S. 97 (1980); Hoover v. Ronwin, 466 U.S. 558 (1984); Southern Motor Carriers Rate Conference, Inc. v. United States, 471 U.S. 48 (1985); Fisher v. City of Berkeley, 475 U.S. 260 (1986); 324 Liquor Corp. v. Duffy, 479 U.S. 335 (1987); and Patrick v. Burget, 486 U.S. 94 (1988). Rounding out the 13 are Bates v. State Bar, 433 U.S. 350, 359-62 (1977), which immunized a ban on attorney advertising that was promulgated by a financially disinterested state supreme court, New Motor Vehicle Board v. Orrin W. Fox Co., 439 U.S. 96, 109-10 (1978), which immunized a restraint on establishing new auto dealerships pending a hearing that could be triggered by competitors where a financially disinterested state board controlled the duration of the restraint, and FTC v. Indiana Federation of Dentists, 476 U.S. 447, 465 (1986), in which the Court declined to immunize a horizontal agreement by financially interested dentists to withhold x-rays from insurers where, even if the use of x-rays by insurers was against state policy, state officials did not approve the dentists' collective restraint.
282. See supra note 151 and accompanying text.
283. See supra pp. 698-701. Spitzer's suggestion that courts judge all restraints by whether they are efficient or transfer wealth from consumers to producers suffers the same defect See Spitzer, supra note 3, at 1318-25. Efficiency or distributive justice may be proper standards for judging a restraint once we know it was created by a person with a financial incentive to restrain trade, but they are not proper standards for judging all restraints. Prohibitions on prostitution, for example, impose a restraint that is clearly based on moral or social grounds. It would be anomalous and meaningless to judge such a restraint by whether it promotes economic efficiency or, by restricting entry by new prostitutes less capable of avoiding detection, transfers wealth from johns to pimps and practicing prostitutes. Nothing in the legislative history suggests Congress intended antitrust standards to apply so broadly. Moreover, it seems particularly unwise to use antitrust law to judge the substantive merit of state and local regulation given the widespread controversy over what the substantive standards of antitrust are and the even more widespread admission that Congress had little idea what substantive standards it expected to be applied. See supra note 151 and accompanying text. It is one thing for Congress to appoint courts as the policemen of self-interested market behavior with a general command to do good; it is quite another for Congress to appoint courts as the general policemen of governmental action without specifying what they should be policing.
284. See 21 CONG. REC. 2560 (1890) (remarks of Sen. Teller) ("It is suggested by a Senator near by, 'Suppose the trusts control the State.' I do not know that they are any more likely to control a State than they are to control this body or any other legislative body."). A related problem is the lack of any reason to view capture as a problem only when an attack on state regulation can be framed as an antitrust violation. Restraints on competition are not the only product of capture: capture can occur whenever small intensely interested groups are pitted against large mildly interested groups. Indeed, to many it explains the success of the National Rifle Association despite large majorities favoring gun control. The problem of capture is thus not special to antitrust and far too general to be resolved by it. If judges should police governmental processes to correct for capture, it would make more sense to do so by means (such as constitutional review or general statutory interpretation) that could apply to all captured lawmaking. Moreover, policing capture under antitrust law leaves open the possibility of capturing Congress to change antitrust standards. See Baxter, The Political Economy of Antitrust, in THE POLITICAL ECONOMY OF ANTITRUST 3, 3-4 (R. Tollison ed. 1979) (arguing that many aspects of antitrust reflect the self-interested exercise of political influence because they retard efficiency). The main reason Wiley gives for putting capture review under the antitrust laws rather than the Constitution - Congress' ability to overrule disfavored judicial decisions, see Wiley, supra note 3, at 779 - may thus be a vice rather than a virtue under capture theory. Nor is it clear that state and local governments are more susceptible to capture than Congress. Although some argue that the smaller size of states renders them more susceptible to capture, see R. POSNER, THE FEDERAL COURTS: CRISIS AND REFORM 173 (1985), the theoretical basis for this link between size and susceptibility to capture is unclear, see infra pp. 727-28 (arguing that increasing transaction costs can increase capture). Moreover, the greater ease of "exiting" state and local governments may make them less susceptible to capture. See R. POSNER, ECONOMIC ANALYSIS OF LAW § 19.6, at 504 (3d ed. 1986). The empirical evidence is far from clear. See Kitch, Regulation and the American Common Market, in REGULATION, FEDERALISM, AND INTERSTATE COMMERCE 9, 36-45 (A. Tarlock ed. 1981) (arguing that federal regulators have in fact enacted more anticompetitive legislation than states). The only congressional statement on the issue seemed to regard the susceptibility of federal and state legislation to capture as equivalent. See 21 CONG. REC. 2560 (1890) (remarks of Sen. Teller).
285. See 21 CONG. REC. 2560 (1890) (remarks of Sen. Teller) ("It is suggested by a Senator near by, 'Suppose the trusts control the State.' I do not know that they are any more likely to control a State than they are to control this body or any other legislative body."). A related problem is the lack of any reason to view capture as a problem only when an attack on state regulation can be framed as an antitrust violation. Restraints on competition are not the only product of capture: capture can occur whenever small intensely interested groups are pitted against large mildly interested groups. Indeed, to many it explains the success of the National Rifle Association despite large majorities favoring gun control. The problem of capture is thus not special to antitrust and far too general to be resolved by it. If judges should police governmental processes to correct for capture, it would make more sense to do so by means (such as constitutional review or general statutory interpretation) that could apply to all captured lawmaking. Moreover, policing capture under antitrust law leaves open the possibility of capturing Congress to change antitrust standards. See Baxter, The Political Economy of Antitrust, in THE POLITICAL ECONOMY OF ANTITRUST 3, 3-4 (R. Tollison ed. 1979) (arguing that many aspects of antitrust reflect the self-interested exercise of political influence because they retard efficiency). The main reason Wiley gives for putting capture review under the antitrust laws rather than the Constitution - Congress' ability to overrule disfavored judicial decisions, see Wiley, supra note 3, at 779 - may thus be a vice rather than a virtue under capture theory. Nor is it clear that state and local governments are more susceptible to capture than Congress. Although some argue that the smaller size of states renders them more susceptible to capture, see R. POSNER, THE FEDERAL COURTS: CRISIS AND REFORM 173 (1985), the theoretical basis for this link between size and susceptibility to capture is unclear, see infra pp. 727-28 (arguing that increasing transaction costs can increase capture). Moreover, the greater ease of "exiting" state and local governments may make them less susceptible to capture. See R. POSNER, ECONOMIC ANALYSIS OF LAW § 19.6, at 504 (3d ed. 1986). The empirical evidence is far from clear. See Kitch, Regulation and the American Common Market, in REGULATION, FEDERALISM, AND INTERSTATE COMMERCE 9, 36-45 (A. Tarlock ed. 1981) (arguing that federal regulators have in fact enacted more anticompetitive legislation than states). The only congressional statement on the issue seemed to regard the susceptibility of federal and state legislation to capture as equivalent. See 21 CONG. REC. 2560 (1890) (remarks of Sen. Teller).
286. See 21 CONG. REC. 2560 (1890) (remarks of Sen. Teller) ("It is suggested by a Senator near by, 'Suppose the trusts control the State.' I do not know that they are any more likely to control a State than they are to control this body or any other legislative body."). A related problem is the lack of any reason to view capture as a problem only when an attack on state regulation can be framed as an antitrust violation. Restraints on competition are not the only product of capture: capture can occur whenever small intensely interested groups are pitted against large mildly interested groups. Indeed, to many it explains the success of the National Rifle Association despite large majorities favoring gun control. The problem of capture is thus not special to antitrust and far too general to be resolved by it. If judges should police governmental processes to correct for capture, it would make more sense to do so by means (such as constitutional review or general statutory interpretation) that could apply to all captured lawmaking. Moreover, policing capture under antitrust law leaves open the possibility of capturing Congress to change antitrust standards. See Baxter, The Political Economy of Antitrust, in THE POLITICAL ECONOMY OF ANTITRUST 3, 3-4 (R. Tollison ed. 1979) (arguing that many aspects of antitrust reflect the self-interested exercise of political influence because they retard efficiency). The main reason Wiley gives for putting capture review under the antitrust laws rather than the Constitution - Congress' ability to overrule disfavored judicial decisions, see Wiley, supra note 3, at 779 - may thus be a vice rather than a virtue under capture theory. Nor is it clear that state and local governments are more susceptible to capture than Congress. Although some argue that the smaller size of states renders them more susceptible to capture, see R. POSNER, THE FEDERAL COURTS: CRISIS AND REFORM 173 (1985), the theoretical basis for this link between size and susceptibility to capture is unclear, see infra pp. 727-28 (arguing that increasing transaction costs can increase capture). Moreover, the greater ease of "exiting" state and local governments may make them less susceptible to capture. See R. POSNER, ECONOMIC ANALYSIS OF LAW § 19.6, at 504 (3d ed. 1986). The empirical evidence is far from clear. See Kitch, Regulation and the American Common Market, in REGULATION, FEDERALISM, AND INTERSTATE COMMERCE 9, 36-45 (A. Tarlock ed. 1981) (arguing that federal regulators have in fact enacted more anticompetitive legislation than states). The only congressional statement on the issue seemed to regard the susceptibility of federal and state legislation to capture as equivalent. See 21 CONG. REC. 2560 (1890) (remarks of Sen. Teller).
287. See 21 CONG. REC. 2560 (1890) (remarks of Sen. Teller) ("It is suggested by a Senator near by, 'Suppose the trusts control the State.' I do not know that they are any more likely to control a State than they are to control this body or any other legislative body."). A related problem is the lack of any reason to view capture as a problem only when an attack on state regulation can be framed as an antitrust violation. Restraints on competition are not the only product of capture: capture can occur whenever small intensely interested groups are pitted against large mildly interested groups. Indeed, to many it explains the success of the National Rifle Association despite large majorities favoring gun control. The problem of capture is thus not special to antitrust and far too general to be resolved by it. If judges should police governmental processes to correct for capture, it would make more sense to do so by means (such as constitutional review or general statutory interpretation) that could apply to all captured lawmaking. Moreover, policing capture under antitrust law leaves open the possibility of capturing Congress to change antitrust standards. See Baxter, The Political Economy of Antitrust, in THE POLITICAL ECONOMY OF ANTITRUST 3, 3-4 (R. Tollison ed. 1979) (arguing that many aspects of antitrust reflect the self-interested exercise of political influence because they retard efficiency). The main reason Wiley gives for putting capture review under the antitrust laws rather than the Constitution - Congress' ability to overrule disfavored judicial decisions, see Wiley, supra note 3, at 779 - may thus be a vice rather than a virtue under capture theory. Nor is it clear that state and local governments are more susceptible to capture than Congress. Although some argue that the smaller size of states renders them more susceptible to capture, see R. POSNER, THE FEDERAL COURTS: CRISIS AND REFORM 173 (1985), the theoretical basis for this link between size and susceptibility to capture is unclear, see infra pp. 727-28 (arguing that increasing transaction costs can increase capture). Moreover, the greater ease of "exiting" state and local governments may make them less susceptible to capture. See R. POSNER, ECONOMIC ANALYSIS OF LAW § 19.6, at 504 (3d ed. 1986). The empirical evidence is far from clear. See Kitch, Regulation and the American Common Market, in REGULATION, FEDERALISM, AND INTERSTATE COMMERCE 9, 36-45 (A. Tarlock ed. 1981) (arguing that federal regulators have in fact enacted more anticompetitive legislation than states). The only congressional statement on the issue seemed to regard the susceptibility of federal and state legislation to capture as equivalent. See 21 CONG. REC. 2560 (1890) (remarks of Sen. Teller).
288. See, e.g., Kreimer, supra note 195, at 1335-38 (describing the problems).
289. See id. at 1337. For example, a judge who believes that without subversive influences proper governments would not adopt inefficient regulations will reach different conclusions than one who believes that proper governments advance noneconomic values at the expense of efficiency.
290. See Spitzer, supra note 3, at 1303-08, 1310-13, 1315-18 (collecting and describing literature extending capture theory beyond instances of producer capture).
291. See id. at 1311-12.
292. See id. at 1317. In response to Spitzer's attack, Wiley has essentially abandoned producer capture as a process test; he now argues that the two substantive policies of antitrust are efficiency and distributive justice for consumers and that producer capture is useful "evidence" that one of those policies has been infringed. See Spitzer, supra note 3, at 1299 n.38, 1317 n.102; Wiley, supra note 60, at 1333-39. But, as the rent control example suggests, it is not clear why producer capture should be regarded as more probative evidence of inefficient regulation than successful organization by any group. On the other hand, producer capture does seem to be probative if the goal of antitrust is not efficiency but protecting against transfers of wealth from consumers to producers. But Wiley offers no reason why producer capture should be regarded as evidence necessary rather than simply relevant to a judicial determination of the ultimate issue whether the regulation violates the substantive policy of distributive justice for consumers.
293. To take two different sorts of examples, assume that under moral standards it is undesirable for a racist majority to vent its prejudice through legislation punishing a racial minority and that under efficiency standards it is undesirable for a majority to enact legislation confiscating the wealth of a minority. In either case, the ability of the minority to block the legislation must be deemed desirable (under the stipulated standards of desirability) even if the legislation would confer benefits on many by injuring a few.
294. Possible examples include antitrust or, according to Posner, the common law. See R. POSNER, ECONOMIC ANALYSIS OF LAW, supra note 270, § 8.1, at 219-33. To a radical, the efficiency of the common law may simply demonstrate that the most economically productive members of society have disproportionate influence on judges, who usually come from their same economic class.
295. This critique of Wiley's proposal applies as well to the proposals advocating judicial case-by-case balancing of state regulatory interests against federal competition policy. See supra note 38.
296. See generally J. CHOPER, supra note 192, at 4-59 (arguing, in part based on numerous empirical studies, that despite various defects in the political process, the elected branches are better than the Supreme Court at reflecting the will of the majority of voters). Of course, when a state has delegated policymaking authority to state judges with life tenure, capture review does not substitute a judicial process of dedsionmaking for a political one: it substitutes a federal judicial process for a state one. But capture theory provides no grounds for believing federal judges will make better decisions than state judges with similar job security. And though a state could not change federal capture review, a state can always revoke a delegation of policymaking authority to state judges if the state becomes displeased with the results.
297. Cf. Rubin, Common Law and Statute Law, 11 J. LEGAL STUD. 205, 211-13 (1982) (describing how the structure of litigation can influence the evolution of case law). The problems confronting large groups may be ameliorated by the ability to finance litigation collectively through fees payable out of class action funds. But class actions will not always be possible, see Chayes, The Supreme Court, 1981 Term - Foreword: Public Law Litigation and the Burger Court, 96 HARV. L. REV. 4, 30-39 (1982) (outlining obstacles), and the risk of losing and earning no fees will discourage others, see P. AREEDA & L. KAPLOW, supra note 169, ¶ 527, at 871 n.29. Even when class actions are brought, class action attorneys have incentives to secure settlements with favorable fee arrangements even though class members might prefer other settlements or further litigation. See Coffee, Understanding the Plaintiff's Attorney, 86 COLUM. L. REV. 669, 671-72 & n.5, 714-20 (1986).
298. Cf. Rubin, Common Law and Statute Law, 11 J. LEGAL STUD. 205, 211-13 (1982) (describing how the structure of litigation can influence the evolution of case law). The problems confronting large groups may be ameliorated by the ability to finance litigation collectively through fees payable out of class action funds. But class actions will not always be possible, see Chayes, The Supreme Court, 1981 Term - Foreword: Public Law Litigation and the Burger Court, 96 HARV. L. REV. 4, 30-39 (1982) (outlining obstacles), and the risk of losing and earning no fees will discourage others, see P. AREEDA & L. KAPLOW, supra note 169, ¶ 527, at 871 n.29. Even when class actions are brought, class action attorneys have incentives to secure settlements with favorable fee arrangements even though class members might prefer other settlements or further litigation. See Coffee, Understanding the Plaintiff's Attorney, 86 COLUM. L. REV. 669, 671-72 & n.5, 714-20 (1986).
299. Cf. Rubin, Common Law and Statute Law, 11 J. LEGAL STUD. 205, 211-13 (1982) (describing how the structure of litigation can influence the evolution of case law). The problems confronting large groups may be ameliorated by the ability to finance litigation collectively through fees payable out of class action funds. But class actions will not always be possible, see Chayes, The Supreme Court, 1981 Term - Foreword: Public Law Litigation and the Burger Court, 96 HARV. L. REV. 4, 30-39 (1982) (outlining obstacles), and the risk of losing and earning no fees will discourage others, see P. AREEDA & L. KAPLOW, supra note 169, ¶ 527, at 871 n.29. Even when class actions are brought, class action attorneys have incentives to secure settlements with favorable fee arrangements even though class members might prefer other settlements or further litigation. See Coffee, Understanding the Plaintiff's Attorney, 86 COLUM. L. REV. 669, 671-72 & n.5, 714-20 (1986).
300. Lower court judges do, however, have some ongoing accountability to the extent they are interested in promotion to higher courts. Cf. W. SHUGHART, ANTITRUST POLICY AND INTEREST-GROUP POLITICS 7, 133 (1900) (citing studies suggesting that judges are more likely to decide antitrust cases "in the government's favor when vacancies exist on higher courts and increased opportunities for promotion are perceived"). Granted, the chances of promotion are often slight. See R. POSNER, ECONOMIC ANALYSIS OF LAW, supra note 270, § 19.7, at 505-06. But they may not be much smaller than the chances of an incumbent legislator losing her seat. See Tushnet, Schneider & Kovner, Judicial Review and Congressional Tenure, 66 TEX. L. REV. 967, 972-83 (1988). To some extent, the political accountability of both judges and legislators may be marked by "retrospective responsiveness" to the political forces that first won them office. Id. at 984-85.
301. Lower court judges do, however, have some ongoing accountability to the extent they are interested in promotion to higher courts. Cf. W. SHUGHART, ANTITRUST POLICY AND INTEREST-GROUP POLITICS 7, 133 (1900) (citing studies suggesting that judges are more likely to decide antitrust cases "in the government's favor when vacancies exist on higher courts and increased opportunities for promotion are perceived"). Granted, the chances of promotion are often slight. See R. POSNER, ECONOMIC ANALYSIS OF LAW, supra note 270, § 19.7, at 505-06. But they may not be much smaller than the chances of an incumbent legislator losing her seat. See Tushnet, Schneider & Kovner, Judicial Review and Congressional Tenure, 66 TEX. L. REV. 967, 972-83 (1988). To some extent, the political accountability of both judges and legislators may be marked by "retrospective responsiveness" to the political forces that first won them office. Id. at 984-85.
302. Lower court judges do, however, have some ongoing accountability to the extent they are interested in promotion to higher courts. Cf. W. SHUGHART, ANTITRUST POLICY AND INTEREST-GROUP POLITICS 7, 133 (1900) (citing studies suggesting that judges are more likely to decide antitrust cases "in the government's favor when vacancies exist on higher courts and increased opportunities for promotion are perceived"). Granted, the chances of promotion are often slight. See R. POSNER, ECONOMIC ANALYSIS OF LAW, supra note 270, § 19.7, at 505-06. But they may not be much smaller than the chances of an incumbent legislator losing her seat. See Tushnet, Schneider & Kovner, Judicial Review and Congressional Tenure, 66 TEX. L. REV. 967, 972-83 (1988). To some extent, the political accountability of both judges and legislators may be marked by "retrospective responsiveness" to the political forces that first won them office. Id. at 984-85.
303. See Rubin, supra note 280, at 211-13. Within capture theory, then, the choice between the political and judicial process turns in part on difficult empirical questions about the costs of informing and organizing different groups and the relative costs of organizing for lobbying versus litigation. See id. at 221-22. To the extent one believes that special interest groups mainly capture agencies and legislatures by influencing the information they receive, see Macey, Promoting Public-Regarding Legislation Through Statutory Interpretation: An Interest Group Model, 86 COLUM. L. REV. 223, 230-31 (1986), the same phenomenon would seem to apply to the judicial process. One distinction is that at least two opposing views will be represented (though perhaps unequally) in every litigated case. This will not, however, always ensure adequate consideration of all affected interests. The fact that most vertical restraint cases involve manufacturers and terminated dealers, for example, may have led the Supreme Court to adopt antitrust rules that pay insufficient attention to the interests of consumers and nonterminated dealers. Moreover, repeat players with concentrated interests are likely to spend more than members of large diffuse groups on litigation efforts to influence the information courts receive and to settle cases involving information likely to lead to unfavorable precedent.
304. To be sure, many issues will be unforeseeable and thus hard to influence through "appointment capture." Another difficulty with appointment capture is that the appointed judge will vote on a large number of issues. Many groups may thus have equivalent potential interests, so that none can gain an advantage. The overall effect may be socially positive. For example, it may be that businesses that would otherwise push for inefficient regulation protecting their industry will settle on appointing a pro-efficiency judge because as a general policy efficiency will advance each business's interests. Nonbusiness, pro-equity groups may, however, still claim appointment capture in this example. See supra note 177.
305. 410 U.S. 113 (1973).
306. Professor Macey, for example, though not taking account of the possibility of judicial capture, justifies separation of powers on the ground that it increases the transaction costs of capture. See Macey, Transaction Costs and the Normative Elements of the Public Choice Model: An Application to Constitutional Theory, 74 VA. L. REV. 471, 494-505 (1988).
307. See Landes & Posner, The Independent Judiciary in an Interest-Group Perspective, 18 J.L. & ECON. 875, 877-85 (1975). Landes and Posner also claim that judges enforce statutes embodying interest group deals to maintain their general independence. See id. at 885. Macey's response to Landes and Posner basically disputes their claim about judicial incentives. See Macey, supra note 285, at 496-99. But this does not disprove the point that increasing the costs of legal change makes legal change more valuable and interest group activity more likely. One need only modify Landes and Posner's claim as follows. Judicial review (whether truly independent, prone to enforce statutory deals, or subject to capture itself) increases the transaction costs of securing a legal change that survives judicial review. This makes such legal changes more valuable. Given certain assumptions, the increased value will increase interest group incentives to seek legal change more than the increased transaction costs decrease their incentives. Cf. Landes & Posner, supra, at 880-85 (showing that, under certain assumptions, the extra durability an independent judiciary will confer on legislation will outweigh the extra costs). This modified analysis does, however, have two problems. First, if seeking legal change that survives judicial review takes a long time and requires substantial investments, then risk aversion and the discounting of future profits may decrease the value of the investment Second, if judges are truly independent and utilize their independence to increase costs for legal change that reflects capture more than it increases costs for legal change that "undoes" capture, then interest group activity may be discouraged. I thus do not claim that more active judicial review would encourage interest group activity. I make the more modest
308. Judges can avoid this only if they can somehow increase the transaction costs for "private interest" group petitioning more than for "public interest" group petitioning. But this, I argue above, is impossible through capture review without normative standards that could, if agreed upon, be applied directly to legal outcomes. On the other hand, I agree with Macey that traditional statutory interpretation, which interprets statutes according to their articulated purposes even when they deviate from the underlying interest group bargains, can selectively discourage interest group capture without requiring courts to determine whether statutes are captured or "public-regarding." See Macey, supra note 282, at 227, 238, 250-56.
309. See Landes & Posner, supra note 286, at 888-89 (arguing that legislation requiring annual action is less valuable to captors).
310. Take, for example, an industry of four producers who seek monopoly pricing. The best solution for the producers would be a statute that delegates the authority to fix prices to themselves, for then they could easily adjust prices to maximize profits as costs and demand change. Otherwise they must settle for a statute that fixes rates directly or delegates ratesetting authority to a disinterested state agency, in which case the producers must either repeatedly capture the legislature or state agency to adjust prices over time or settle for rates that will not maximize profits if the demand and cost curves shift.
311. Cf. Macey, supra note 282, at 244-46 (arguing that judicial review can optimize but not eliminate the agency costs of representative government).
312. A community can be financially interested in exploiting its market power against outsiders even though that power in part exploits consumers residing inside the community because the monopoly profits garnered from the outsiders may outweigh (and even compensate for) the loss to the inside consumers. Similarly, a business corporation is ordinarily financially interested in its restraints even though some of its shareholders are also consumers of its products.
313. If buyers within a governmental unit collectively enjoy monopsony power against out-of-state sellers, the unit might exploit that power with price ceilings. Sometimes the government can create market power against outsiders by restraining competition in selling or buying. For example, a city might be able to create market power for resident laborers by restricting the ability of employers to hire nonresidents. If those employers are predominantly outsiders and cannot easily move their facilities from the city, then the city will have created market power against outsiders. Or a city might prohibit outsiders from buying resources, goods, or services existing or produced within city limits. If those resources or means of producing goods or services are predominantly owned by outsiders and cannot easily be moved outside the city, then the city has created a monopsony power (by excluding competing buyers) that exploits outsiders.
314. The relevant government official need not have a personal financial interest if she represents those who do. Cf. City of Lafayette v. Louisiana Power & Light Co., 435 U.S. 389, 403 (1978) (stating that decisions designed to maximize benefits for a city's constituency are no less likely to harm the national economic well-being than are decisions to maximize benefits for a corporation's shareholders); Ward v. Town of Monroeville, 409 U.S. 57 (1972) (holding that due process was violated when, sitting as a traffic court judge, a town's mayor assessed fines constituting a major portion of the town's income).
315. See Hovenkamp & Mackerron, supra note 24, at 775-76 (advocating spillover preemption for municipal regulations lacking active state supervision).
316. See R. HALE, FREEDOM THROUGH LAW 544-45 (1952).
317. See J. BUCHANAN & G. TULLOCK, THE CALCULUS OF CONSENT 113-14 (1962).
318. See D. MUELLER, PUBLIC CHOICE II 155 (1989).
319. Cf. Eule, Laying the Dormant Commerce Clause to Rest, 91 YALE L.J. 425, 460-68 (1982) (proposing similar review under the dormant commerce clause).
320. See M. TUSHNET, supra note 172, at 80-82.
321. Moreover, the Court's prior experience under the dormant commerce clause suggests it will have trouble determining whether a law disproportionately burdens outsiders. See, e.g., L. TRIBE, supra note 73, § 6-6, at 415.
322. Constitutional review is also provided under the privileges and immunities clause, the equal protection clause, and the right to travel. To simplify the exposition, I use "dormant commerce clause review" to refer to the combination of constitutional doctrines under which courts review state and municipal laws with out-of-state effects.
323. See Levmore, Interstate Exploitation and Judicial Intervention, 69 VA. L. REV. 563, 575-626 (1983). Parker v. Brown itself involved a state production control that seemed to exploit monopoly power and was sustained under the dormant commerce clause. But the common explanation for that holding is that Congress implicitly approved the state restraint See, e.g., id. at 627-28.
324. Cf. Dean Milk Co. v. City of Madison, 340 U.S. 349, 354-56 (1951) (using dormant commerce clause review to strike down a municipal ordinance that did affect out-of-state interests). Nor is there much other constitutional review. See Holt Civic Club v. City of Tuscaloosa, 439 U.S. 60, 66-75 (1978) (upholding municipal regulation of nonresidents).
325. See City of Lafayette v. Louisiana Power & Light Co., 435 U.S. 389, 391-92 & n.6 (1978).
326. Id. at 404. The Court reasoned that the city might, for example, "increase the cost of electric service to these customers [in another city]. Moreover, a municipality conceivably might charge discriminatorily higher rates to such captive customers outside its jurisdiction . . . . Both of these practices would provide maximum benefits for its constituents, while disserving the interests of the affected customers." Id.
327. Id. at 403.
328. Although the Lafayette opinion is perhaps more famous for other portions that garnered only a plurality, the analysis described above commanded five votes.
329. 455 U.S. 40 (1982).
330. All 50 states have home rule provisions. See Hovenkamp & Mackerron, supra note 24, at 748 n.182 (citing statutes).
331. See Boulder, 455 U.S. at 54-57 & n.20.
332. 475 U.S. 260 (1986).
333. See id. at 270 n.2.
334. See supra pp. 686-87.
335. For such review to be effective in policing financially interested decisionmaking, the Court will have to recognize monopolization claims not only when the municipality itself has (or will have) monopoly or monopsony power, but also when those who reside within the municipality have (or will have) monopoly or monopsony power against nonresidents. Even then, this review may be somewhat narrower than the full extent of the financial interest concern because proving monopolization or attempted monopolization may, absent particularly egregious conduct, require a showing of "substantial" or "significant" market power. See 3 P. AREEDA & D. TURNER, supra note 41, ¶¶ 800-815, at 289-304, ¶¶ 831-836, at 335-55. The rationale for this limitation is practical: unilateral exercises of modest market power (for example, pricing by the corner convenience store) are so ubiquitous that subjecting them to plenary antitrust scrutiny would impose excessive litigation costs and deter much desirable conduct. See id. ¶ 813, at 301, ¶ 833d, at 342. Ordinary businesses are instead provided with some safe harbor by limiting the Sherman Act either to conduct they can easily avoid (such as conspiracies or obviously egregious conduct) or to broader forms of anticompetitive conduct by actors with substantial market power. This practical rationale for limiting antitrust review of certain modest unilateral business decisions despite the businesses' financial interest seems equally applicable to municipalities that may routinely exercise or create modest market power via unilateral regulation.
336. The restraint in Fisher necessarily affected any nonresident landlords and any nonresidents who might have been able to rent in Berkeley (in part because more housing might have been built) had there not been rent control. The litigants did not argue that the rent control plan constituted a monopsonistic exploitation of nonresident landlords by resident tenants.
337. Pub. L. No. 98-544, §§ 3-4, 98 Stat. 2750 (codified at 15 U.S.C. §§ 35-36 (1988)).
338. 471 U.S. 34 (1985).
339. See id. at 41-44, 46-47.
340. Compare Will v. Michigan Dep't of State Police, 109 S. Ct. 2304, 2309-11 (1989) (holding that neither states nor state officials acting in their official capacities are subject to damages for constitutional violations under 42 U.S.C. § 1983) with 15 U.S.C. §35(a) (1988) (exempting from antitrust damages "any local government, or official or employee thereof acting in an official capacity").
341. Because home rule statutes are insufficient authorization under Boulder, the authorization requirement has more bite for municipalities than for state agencies. Indeed, it seems more than likely that the type of legislation typically enacted to create regulatory agencies will (unlike home rule statutes) always be sufficiently specific to satisfy their authorization requirement. See supra pp. 691-93.
342. See L. TRIBE, supra note 73, § 6-33, at 524-25. The burden of seeking upper-level governmental action is thus placed on the party seeking to restrain competition under both antitrust and commerce clause review. Cf. supra pp. 712-17 (arguing that the burden of seeking governmental action should be placed on the party seeking to restrain competition).
343. One difference is that, even when financially interested, state and local governments are immune from damages. See supra p. 735. This is arguably justified by three factors: (1) a reluctance to inflict penalties on taxpayers who may not benefit from the anticompetitive restraint and may in fact be hurt as consumers; (2) the greater visibility of public action, which decreases the need for deterrence; and (3) the fear that damages will excessively deter desirable state and local regulation because state or local officials have no personal profit motive spurring them to act despite the financial risk of damages. See Wiley, supra note 3, at 773-75 (offering variations of these three reasons as a functional justification for immunizing public action from damages).
344. See Town of Hallie v. City of Eau Claire, 471 U.S. 34, 41-44 (1985). Indeed, in Hallie, the claim was precisely that the town of Hallie had illegally acquired and exploited a local monopoly in sewage treatment against other cities. See id. at 36-37.
345. At least, "the legislative history of the Sherman Act reveals no evidence of an express Congressional intent to apply the antitrust laws to either state or local governments." H.R. REP. No. 965, supra note 3, at 4, reprinted in 1984 U.S. CODE CONG. & ADMIN. NEWS 4602, 4605 (emphasis added).
346. See id. at 8, reprinted in 1984 U.S. CODE CONG. & ADMIN. NEWS 4602, 4609 (citing "testimony that a local government's policy may at times be antithetical to the principles underlying antitrust theory, which seeks to prevent private interests from increasing profits as a function of curtailing competition"); see also Hallie, 471 U.S. at 45 (observing that a municipality is presumed to act "in the public interest" whereas a private party is presumed to act "primarily on his or its own behalf").
347. Of course, they often can and do create market power against their residents by restraining competition within municipal limits.
348. See supra pp. 730-31.
349. See Coase, The Problem of Social Cost, 3 J.L. & ECON. 1, 2-8 (1960). This is because, if efficiency is defined as wealth-maximization, the economic gain from an inefficient outcome is less than the economic loss. Thus, there will always exist an amount that those who would lose by an inefficient outcome would pay those who would gain that can induce agreement to avoid the inefficiency and improve the situations of both. This does not necessarily mean that the same efficient outcome will occur regardless of the legal rule chosen. See Hovenkamp, Marginal Utility and the Coase Theorem, 75 CORNELL L. REV. 783, 785 (1990). Because the allocation of legal entitlements itself can affect the wealth of the concerned parties, it may alter their ability or willingness to pay (or accept payment) to alter outcomes. Where it does, the choice of legal rule itself affects which outcome is "efficient" under the wealth-maximization definition. For similar reasons, the Coase theorem cannot guarantee that zero transaction costs and perfect bargaining will (irrespective of the legal rule chosen) lead to the most desirable outcome if utility maximization or distributional justice is the measure of social desirability. See id. at 798-808. For a discussion of distributional issues, see note 331 below.
350. See Coase, The Problem of Social Cost, 3 J.L. & ECON. 1, 2-8 (1960). This is because, if efficiency is defined as wealth-maximization, the economic gain from an inefficient outcome is less than the economic loss. Thus, there will always exist an amount that those who would lose by an inefficient outcome would pay those who would gain that can induce agreement to avoid the inefficiency and improve the situations of both. This does not necessarily mean that the same efficient outcome will occur regardless of the legal rule chosen. See Hovenkamp, Marginal Utility and the Coase Theorem, 75 CORNELL L. REV. 783, 785 (1990). Because the allocation of legal entitlements itself can affect the wealth of the concerned parties, it may alter their ability or willingness to pay (or accept payment) to alter outcomes. Where it does, the choice of legal rule itself affects which outcome is "efficient" under the wealth-maximization definition. For similar reasons, the Coase theorem cannot guarantee that zero transaction costs and perfect bargaining will (irrespective of the legal rule chosen) lead to the most desirable outcome if utility maximization or distributional justice is the measure of social desirability. See id. at 798-808. For a discussion of distributional issues, see note 331 below.
351. See Cooter, Marks & Mnookin, Bargaining in the Shadow of the Law: A Testable Model of Strategic Behavior, 11 J. LEGAL STUD. 225, 225-27, 242-47 (1982).
352. See id. at 232-33, 241.
353. See Inman & Rubinfeld, A Federalist Fiscal Constitution for an Imperfect World: Lessons from the United States, in FEDERALISM: STUDIES IN HISTORY, LAW, AND POLICY 79, 88-89 (H. Scheiber ed. 1988). Further, relegating cities to the protection of Coasian bargains is more justifiable than requiring such bargaining from consumers. A purpose of antitrust, in addition to efficiency, is protecting consumers from having their wealth expropriated by producers' anticompetitive combinations. See Lande, supra note 149. Even if Coasian bargaining could avoid all inefficient outcomes in the event a state delegated restraint authority to interested businesses, the payments consumers would have to make to producers to avoid inefficient restraints would still constitute an unjustifiable transfer of wealth. When a state delegates restraint authority to cities, on the other hand, cities are within both the potentially exploiting and exploited classes. Transfer payments among them inflict no obvious harm to antitrust goals. Moreover, the bargaining will often take the form of agreements to avoid protectionist retaliation. Such bargains can advance efficiency without any unjustifiable wealth transfer.
354. See cases cited supra notes 187-88.
355. See, e.g., FTC v. Superior Court Trial Lawyers Ass'n, 110 S. Ct. 768, 780-82 (1990) (refusing to consider a defense that a restraint aimed at increasing prices could not have done so because the defendants lacked market power); Klor's, Inc. v. Broadway-Hale Stores, 359 U.S. 207, 213 (1959) (refusing to consider a defense that a restraint injuring a defendant's competitor could not have affected competition because numerous other competitors were left in the market).
356. See Trial Lawyers, 110 S. Ct. at 780-81 & n.16.
357. I also put aside the set of issues concerning claims that, although the defendant is financially interested in the restraint, its financial interest is procompetitive. Manufacturers in vertical restraint cases might, for example, argue that their financial interest is furthered by making dealers more rather than less competitive. See Bork, The Rule of Reason and the Per Se Concept, 75 YALE L.J. 373, 403 (1966). This argument often has force but is addressed (and properly so) in the context of determining the content rather than scope of antitrust review.
358. 21 CONG. REC. 2726 (1890) (remarks of Sen. Edmunds) ("tyrannies"); id. at 2457, 2462 (Sen. Sherman) ("king," "emperor," "dictating," and "controlling"); id. at 3147 (Sen. George); id, at 4101 (Sen. Heard); id. at 2570 (Sen. Sherman).
359. See id. at 2658-59; 20 CONG. REC. 1459 (1889). To be sure, the legislative history is not as clear as it might be because some senators expressed concern that an unenacted version of the Act might cover temperance society boycotts. See Note, The Scope of Noerr Immunity for Direct Action Protestors, 89 COLUM. L. REV. 662, 672-73 (1989). But no one argued that the statute should cover such boycotts.
360. FTC v. Indiana Fed'n of Dentists, 476 U.S. 447, 459 (1986); see also cases cited supra notes 187-88.
361. 435 U.S. 679 (1978).
362. Id. at 690.
363. Id. at 696 n.22.
364. See Tripoli Co. v. Wella Corp., 425 F.2d 933 (3d Cir. 1970).
365. Professional Eng'rs, 435 U.S. at 696 n.22.
366. Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 501 (1988).
367. Id. at 500.
368. See Note, supra note 337, at 670 n.48, 678 n.93 (collecting cases).
369. See, e.g., Allied Tube, 486 U.S. at 505-07 & n.10.
370. See id.
371. See Eastern R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 138-40 (1961).
372. 312 U.S. 457 (1941).
373. Id. at 465.
374. In Molinas v. National Basketball Association, 190 F. Supp. 341 (S.D.N.Y. 1961), for example, a federal district court dismissed an antitrust suit against a team and league that had suspended a player for gambling. See id. at 244. This was literally a boycott by the league teams and posed concerns about extra-governmental activity, but the team and league also had no apparent financial interest in depriving themselves of players unjustifiably. For other cases dismissing antitrust suits against disinterested leagues, see Neeld v. National Hockey League, 594 F.2d 1297 (9th Cir. 1979); and Manok v. Southeast District Bowling Association, 306 F. Supp. 1215 (C.D. Cal. 1969). When, on the other hand, the Ladies Professional Golf Association suspended a player for alleged cheating, the restraint was condemned as per se unlawful. See Blalock v. Ladies Professional Golf Ass'n, 359 F. Supp. 1260, 1266 (N.D. Ga. 1973). Here the members of the association, other players who competed with the suspended player, did have a financial interest in excluding their rival whether or not she cheated.
375. 458 U.S. 886 (1982). The position that the antitrust laws should condemn all noncommercial boycotts per se was ably argued, before Claiborne Hardware, in Bird, Sherman Act Limitations on Noncommercial Concerted Refusals to Deal, 1970 DUKE L.J. 247, 275-88.
376. Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 508-09 (1988); accord FTC v. Superior Court Trial Lawyers Ass'n, 110 S. Ct. 768, 776-78 (1990).
377. See Coons, Non-Commercial Purpose as a Sherman Act Defense, 56 NW. U.L. REV. 705, 747 (1962). Another approach is for courts to focus on whether the restraint embodies a simple agreement to do X, an agreement to enforce that agreement against members who do not do X, or (in the worst case) an agreement to force others to do X by inflicting economic injury on them if they do not. Cf. Barber, Refusals to Deal Under the Federal Antitrust Laws, 103 U. PA. L. REV. 847, 872 (1955) (laying out a similar approach). But it is plain that even the "worst case" type of restraint can be valid under Claiborne Hardware. Moreover, the first type of agreement is not categorically more benign or less "extra-governmental" than the others. A simple "self-regulatory" agreement, such as an agreement not to prescribe Laetrile, does, after all, lessen consumers' ability to procure that drug and Laetrile manufacturers' ability to sell it.
378. See Missouri v. National Org. for Women, Inc., 620 F.2d 1301 (8th Cir.), cert. denied, 449 U.S. 842 (1980).
379. See Barr v. National Right to Life Comm., Inc., 1981-2 Trade Cas. (CCH) ¶ 64,315 (M.D. Fla. 1981).
380. See International Longshoremen's Ass'n v. Allied Int'l, Inc., 456 U.S. 212 (1982); cf. Doubts on Idaho Abortion Bill, San Fran. Chron., Mar. 30, 1990, at A18, col. 4 (reporting the National Organization for Women's threat to organize a boycott of Idaho potatoes if Idaho enacted a law restricting abortion); Garchik, Personals, San Fran. Chron., Mar. 30, 1990, at A10, col. 4 (reporting the National Rifle Association's efforts to organize a boycott of entertainers who support gun control).
381. Such an approach was suggested in Coons, supra note 355, at 749, 755. Interestingly, the Sherman Act Senate at one point did approve an amendment exempting "combinations among persons for the enforcement and execution of the laws of any State." 21 CONG. REC. 2658 (1890). However, for reasons that are unclear, the amendment was dropped when the Senate Judiciary Committee redrafted the bill. See 1 E. KINTNER, supra note 155, at 275-76.
382. See FTC v. Indiana Fed'n of Dentists, 476 U.S. 447, 465 (1986); Fashion Originators' Guild of Am. v. FTC, 312 U.S. 457, 468 (1941).
383. See FTC v. Superior Court Trial Lawyers Ass'n, 110 S. Ct. 768, 775 (1990).
384. The adjudicatory questions might be reassessed de novo by antitrust courts. But antitrust courts may be less competent in making policy decisions about enforcement discretion. And one may hesitate to place on antitrust courts the burden of supervising private adjudication and enforcement for any allegedly illegal activity.
385. 456 U.S. 212 (1982).
386. See 29 U.S.C. § 158(b)(4) (1988) (prohibiting secondary boycotts as an unfair labor practice by unions).
387. See Longshoremen's, 456 U.S. at 226-17.
388. Why actions under 42 U.S.C. § 1983 (1988) or Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403 U.S. 388 (1971), should not be sufficient enforcement is a question Claiborne Hardware does not answer.
389. See Longshoremen's, 456 U.S. at 222 n.17.
390. Under this principle Claiborne Hardware may not have come out the same way if, after obtaining a limited injunction against constitutional violators, civil rights activists started a punitive boycott.
391. Sunstein, Interpreting Statutes in the Regulatory State, 103 HARV. L. REV. 405, 469 (1989).
392. Such restraints would seem unjustifiable if the government affirmatively decided that regulation was inappropriate. But one might hesitate before finding antitrust liability for restraints imposed in the interim before the government takes affirmative action.
393. See generally Coons, supra note 355, at 713-26 (collecting common law cases).