Antitrust violations

American Criminal Law Review

Volumn 45, Issue 2, 2008, Pages 195-232

  Dyer, Kathryn K ^a   Liskey, Garrett M ^a  

^a NONE

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EID: 44949206428     PISSN: 01640364     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (269)

1. 15 U.S.C. §§ 1-7 (2000, Supp. IV. 2004).
2. See Nat'l Soc'y of Prof'l Eng'rs v. United States, 435 U.S. 679, 695 (1978) ("The Sherman Act reflects a legislative judgment that ultimately competition will produce not only lower prices, but also better goods and services."); Am. Column & Lumber Co. v. United States, 257 U.S. 377, 400 (1921) (holding that the purpose of the Act is to "maintain free competition in interstate commerce").
3. 15 U.S.C. § 1.
4. Bus. Elecs. Corp. v. Sharp Elecs. Corp., 485 U.S. 717, 723 (1988) (discussing judicial interpretation of the Sherman Act).
5. See 2 PHILLIP E. AREEDA & HERBERT HOVENKAMP, ANTITRUST LAW § 303 (2d. ed. 2000) [hereinafter AREEDA & HOVENKAMP 2000].
6. See id. § 303e2-3 (differentiating between criminal and civil antitrust cases).
7. Courts consistently refer to the breadth of the Act and note that Congress expected courts to give shape to the broad language of § 1 of the Act by creating a common law of antitrust. See Nat'l Soc'y of Prof'l Eng'rs, 435 U.S. at 688 (declaring that Congress did not intend the text of the Act to delineate the full meaning of the Act or its application); United States v. S.-E. Underwriters Ass'n, 322 U.S. 533, 553 (1944) (stressing "sweeping" language of Act; case superceded by McCanan-Ferguson Act, 15 U.S.C. § 1011, on other grounds); see also AREEDA & HOVENKAMP 2000, supra note 5, § 303e (discussing the development of antitrust common law).
8. The Act includes a number of common law terms to assist the courts in determining whether it has been violated. See Rudolph J. Peritz, The 'Rule of Reason' in Antitrust Law: Property Logic in Restraint of Competition, 40 HASTINGS L.J. 285, 304 n.95 (1989) (noting Senator Edmunds, a proponent of the Act, recognized that "'monopoly' is a technical term known to the common law," and that because the United States does not ordinarily have any federal common law, the Act "extend[s] the common law principles. . .to international and interstate commerce in the United States" (quoting S.-E. Underwriters Ass'n, 322 U.S. at 576 n.5)).
9. A number of commentators have questioned the use of "unelaborated common law words" in the Act. See PHILLIP E. AREEDA & LOUIS KAPLOW, ANTITRUST ANALYSIS 44 (5th ed. 1997) [hereinafter AREEDA & KAPLOW]. The debate centers on whether Congress intended to define special classes of prohibited conduct, or whether Congress intended the courts to interpret the statute through the use of "certain customary techniques of judicial reasoning, [for example, to] consider the reasoning and results of other common law courts, and develop, refine, and innovate in the dynamic common law tradition." Id.
10. Appalachian Coals, Inc. v. United States, 288 U.S. 344, 359-60 (1933) (recognizing that the Act rejects "mechanical or artificial" restrictions, in favor of general phrases interpreted to "attain its fundamental objects"), overruled on other grounds by Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984).
11. The Department of Justice ("DOJ") has the power to prosecute criminal violations via § 1 and § 2 of the Sherman Act, § 3 of the Robinson-Patman Act, and § 14 of the Clayton Act. "[C]riminal prosecution in general and imprisonment in particular have been confined to instances of outrageous conduct of undoubted illegality." AREEDA & HOVENKAMP 2000, supra note 5, 303b.
12. See Theatre Enters, v. Paramount Film Distrib. Corp., 346 U.S. 537, 540-541 (1954) (stating the "crucial question" is whether the challenged anticompetitive conduct "stem[s] from independent decision or from an agreement, tacit or express"); Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 768 (1984) (explaining that conscious commitment to a common scheme designed to achieve an unlawful objective constitutes requisite agreement and that proof of a § 1 conspiracy must include evidence tending to exclude the possibility of independent action); Standard Oil Co. v. United States, 221 U.S. 1, 51-62 (1911) (discussing concerted action requirement for violation under § 1 of the Act); In re Baby Food Antitrust Litig., 166 F.3d 112, 117 (3d Cir. 1999) (describing the existence of an agreement as the "hallmark" of a § 1 claim and finding no violation where there was insufficient evidence of a conspiracy). Cf. United States v. Gravely, 840 F.2d 1156, 1161 (4th Cir. 1988) (holding a violation may be established even where conspiracy is unsuccessful). At the pleading stage, a claimant must provide "enough fact to raise a reasonable expectation that discovery will reveal evidence of illegal agreement" Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007) (holding that asserting a § 1 violation "requires a complaint with enough factual matter (taken as true) to suggest that an agreement was made"). The Court specifically held that an allegation of parallel conduct and a bare assertion of conspiracy is not enough for a plaintiff to satisfactorily state a claim under § 1 of the Sherman Act; the parallel conduct "must be placed in a context that raises suggestion of a preceding agreement, not merely parallel conduct that could just as well be independent action." Id. at 1966.
13. Arizona v. Maricopa County Med. Soc'y, 457 U.S. 332, 342-43 (1982) (explaining that all agreements in restraint of trade would be unlawful under the literal language of the Act and concluding that Congress intended to analyze and rule as unlawful only those agreements that are unreasonable); see also Standard Oil Co., 221 U.S. at 10 (explaining the use of the rule of reason to assess reasonableness).
14. U.S. DEP'T OF JUSTICE, DEP'T OF JUSTICE ANTITRUST MANUAL Ch.2.A.1 (Supp. 2000-1) [hereinafter DOJ ANTITRUST MANUAL], available at http://www.usdoj.gov/atr/foia/divisionmanual/ch2.htm (last visited Jan. 22, 2008).
15. See United States v. U.S. Gypsum Co., 438 U.S. 422, 435 (1978) (holding that proof of the defendant's state of mind or intent is an element of a criminal antitrust offense). In U.S. Gypsum Co., the Court held that "action undertaken with knowledge of its probable consequences and having the requisite anticompetitive effects can be a sufficient predicate for a finding of criminal liability under the antitrust laws." Id. at 444. The Court analyzed the defendants' activities in U.S. Gypsum Co. under the "rule of reason" standard, rather than the "per se" rule. See infra Section II.B. (discussing differences between rule of reason and per se tests) and Section II.D. (discussing how intent requirement for criminal liability may differ under the two tests).
16. 15 U.S.C. § 1 (2000); see Primetime 24 Joint Venture v. Nat'l Broad. Co., 219 F.3d 92, 103 (2d Cir. 2000) (holding that the conspiracy element can only be satisfied if there is "a combination of some form of concerted action between at least two legally distinct economic entities" (quoting Capital Imaging Assocs. v. Mohawk Valley Med. Assocs., 996 F.2d 537, 542 (2d Cir. 1993))).
17. See United States v. Hayter Oil Co., 51 F.3d 1265, 1270 (6th Cir. 1995) (stating that proof of overt act is not required; rather, proof that defendant knowingly entered into illegal agreement is sufficient); see also Summit Health, Ltd. v. Pinhas, 500 U.S. 322, 330 (1991) ("Because the essence of any violation of §1 is the illegal agreement itself-rather than the overt acts performed in furtherance of it - proper analysis focuses not on actual consequences, but rather upon the potential harm that would ensue if the conspiracy were successful.").
18. See Summit Health, 500 U.S. at 330 ("The essence of any violation of § 1 is the illegal agreement itself."); see also United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 223-24 n.59 (1940) (finding that a violation may be established even if conspirators' only action was an agreement to conspire without means to accomplish their objective); United States v. MMR Corp., 907 F.2d 489, 495 (5th Cir. 1990) (stating that the government must only prove that the defendants accepted an invitation to join conspiracy aimed at unlawfully restraining trade, not that formal, express terms of agreement were clearly understood by conspirators); United States v. Gravely, 840 F.2d 1156, 1161 (4th Cir. 1988) (stating that violation may be established even if conspiracy is unsuccessful).
19. See Nynex Corp. v. Discon, Inc., 525 U.S. 128, 133 (1998) (noting that only agreements that unreasonably restrain trade are prohibited by the Act).
20. Bus. Elecs. Corp. v. Sharp Elecs. Corp., 485 U.S. 717, 731 (1988) (explaining that the phrase "restraint o[f] trade" is dynamic and evolves with new circumstances and wisdom).
21. See N. Pac. Ry. v. United States, 356 U.S. 1, 5 (1958) (stating that price fixing, division of markets, group boycotts and tying arrangements are inherently unlawful because of their "pernicious effect on competition"); see also United States v. Reading Co., 253 U.S. 26, 59 (1920) (holding that the consequences of a company's control of two competing interstate carriers and two coal companies was elimination of competition between these companies and prospects for outside competition).
22. See Cal. Dental Ass'n v. FTC, 526 U.S. 756, 780-81 (1999) (asserting "[t]here is generally no categorical line drawn between restraints that give rise to an intuitively obvious inference of anticompetitive effect and those that call for more detailed treatment" and what is required is an inquiry into the "circumstances, details, and logic of a restraint").
23. Cont'l Airlines, Inc. v. United Airlines, Inc., 277 F.3d 499, 509 (4th Cir. 2002) (citing 11 HERBERT HOVENKAMP, ANTITRUST LAW § 1911a (1998)).
24. 310 U.S. 150 (1940).
25. N. Pac. Ry., 356 U.S. at 5 (holding that "there are certain agreements or practices which because of their pernicious effect on competition and lack of any redeeming virtue are conclusively presumed to be unreasonable and therefore illegal without elaborate inquiry as to the precise harm they have caused or the business excuse for their use"); see also Nynex Corp., 525 U.S. at 133 (holding that certain kinds of agreements are unlawful per se because they "will so often prove so harmful to competition and so rarely prove justified that the antitrust laws do not require proof that an agreement of that kind is, in fact, anticompetitive in the particular circumstances").
26. Arizona v. Maricopa County Med. Soc'y, 457 U.S. 332, 342-43 (1982) (explaining that under the literal language of the Act, all agreements in restraint of trade would be unlawful and concluding that Congress intended to analyze and rule as unlawful only those agreements that are unreasonable); see State Oil Co. v. Khan, 522 U.S. 3, 10 (1997) (holding that some types of restraints of trade have such predictable and pernicious anticompetitive effects and such limited potential for pro-competitive benefits that they are deemed unlawful per se); see also Bogan v. Hodgkins, 166 F.3d 509, 514 (2d Cir. 1999) (explaining that the court's familiarity with a particular pernicious restraint allows it to condemn the restraint without applying the rule of reason).
27. See United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 224 (1940) ("[A] conspiracy to fix prices violates [§ 1 of the Act] though no overt act is shown, though it is not established that the conspirators had the means available for the accomplishment of their objective, and though the conspiracy embraced but a part of the interstate or foreign commerce of the community."); see also Freeman v. San Diego Ass'n of Realtors, 322 F.3d 1133, 1144 (9th Cir. 2003) ("The dispositive question generally is not whether any price fixing [, a per se offense,] was justified, but simply whether it occurred.").
28. E.g., Pace Elecs., Inc. v. Canon Computer Sys., Inc., 213 F.3d 118, 123 (3d Cir. 2000) (stating that "[the per se] standard, which is based on considerations of 'business certainty and litigation efficiency,' allows a court to presume that certain limited classes of conduct have an anticompetitive effect without engaging in the type of involved, market-specific analysis ordinarily necessary to reach such a conclusion"). See generally Peter Nealis, Per Se Legality: A New Standard in Antitrust Adjudication Under the Rule of Reason, 61 OHIO ST. L.J. 347, 383 (2000) (advocating adoption of a "per se legality standard" over the use of rule of reason analysis because it decreases the costs of antitrust cases and lessens chance of a false positive determination of antitrust violation).
29. See Socony-Vacuum Oil Co., 310 U.S. at 223 (declaring per se illegal any agreement "formed for the purpose and with the effect of raising, depressing, fixing, pegging, or stabilizing the price of a commodity in interstate or foreign commerce"); see also Todd v. Exxon Corp., 275 F.3d 191, 198 (2d Cir. 2001) (holding that "[t]raditional 'hard-core' price fixing remains per se unlawful . . ."); United States v. Andreas, 216 F.3d 645, 667 (7th Cir. 2000) (finding per se illegal a sales volume allocation agreement, an output restriction, that necessarily furthered a practice of price fixing). But see Texaco, Inc. v. Dagher, 547 U.S. 1, 5-6 (2006) (holding that although horizontal price-fixing agreements are per se unlawful, sale of gasoline by joint venture under different brand names at the same price did not constitute price fixing in "the antitrust sense" and must be challenged under a rule of reason analysis).
30. See Palmer v. BRG of Ga., Inc., 498 U.S. 46, 49 (1990) (holding an agreement between competing providers of bar review courses to allocate territories in order to minimize competition was per se illegal); see also United States v. Visa U.S.A., Inc., 344 F.3d 229, 238 (2d Cir. 2003) (stating that "[c]ertain arrangements, such as price fixing and market division, are considered unreasonable per se . . . ."); United States v. Brown, 936 F.2d 1042, 1045 (9th Cir. 1990) (finding market allocation agreement among horizontal competitors restricting each company's ability to compete for others' billboard sites "a classic per se antitrust violation"). The FTC and the circuit courts, backed by the DOJ, are split on the matter of whether patent settlements, in conjunction with reverse payments, constitute horizontal market allocation agreements, which are per se violations of section one of the Sherman Act. See Schering-Plough Corp. v. FTC, 402 F.3d 1056 (11th Cir.), cert. denied, 126 S.Ct. 2929 (2006); John E. Osborn, Settlements are Legitimate, NAT'L L.J., September 18, 2006, at 22. The Eleventh Circuit in Schering-Plough Corp. v. FTC held that "[s]imply because a brand-name pharmaceutical company holding a patent paid its generic competitor money cannot be the sole basis for a violation of antitrust law," thus asserting the legality of patent settlements in conjunction with reverse payments. Schering-Plough Corp., 402 F.3d at 1076. Advocates of this type of settlement agreements assert their cost savings through the reduction in patent litigation. The FTC and other opponents argue these settlements harm consumers by creating higher prices and reducing the availability of generic drugs on the market. The Sixth Circuit is alone in holding patent settlement agreements and reverse payments to be per se antitrust violations. In re Cardizem CD Antitrust Litigation, 332 F.3d 896, 907-08 (6th Cir. 2003) (holding that "[t]here is simply no escaping the conclusion that the Agreement . . . was, at its core, a horizontal agreement to eliminate competition in the market for Cardizem CD throughout the entire United States, a classic example of a per se illegal restraint of trade").
31. The decision in Schering-Plough significantly challenged the FTC's attempts to prevent companies from entering into such settlement agreements. The FTC commissioned a study that found an increase in the number of settlements between patent holders and generic manufacturers involving reverse payments and agreements to delay market entry between fiscal year 2005 and 2006. Stephen Labaton, New View of Antitrust Law: See No Evil, Hear No Evil, N.Y. TIMES, May 5, 2006, at C5.
32. In order to combat the proliferation of these agreements, the FTC has begun an evaluation of its strategy in Schering-Plough and is considering changing its tactics. Theresa Agovino, FTC to Keep Fighting Generic Settlements, CHI. TRIB., Sept. 3, 2006, at 3.
33. An example of what has followed is the case of Bristol-Myers Squibb Co. and Sanofi-Aventis SA, companies which negotiated a patent settlement in 2006 with Apotex Inc., the generic manufacturer of their drug Plavix. Because of 2003 FTC sanctions against Bristol-Myers Squibb Co., the agreement, unlike most patent settlement and reverse payment agreements, was subject to FTC review. Christopher Bowe & Stephanie Kirchgaessner, Plavix Deal is Little Relief for Bristol and Sanofi, FIN. TIMES, July 10, 2006, available at 2006 WLNR 11998963.
34. While conducting its review, a DOJ criminal investigation ensued as to the truth of the information Bristol-Myers Squibb provided to the FTC about the agreement with Apotex. As a result of this investigation, the FTC blocked the settlement agreement. Christopher Bowe, Plavix Reprieve for Bristol/Sanofi, FIN. TIMES, Sept. 1, 2006, at 15. Sanofi and Bristol-Myers filed for a preliminary injunction to prevent Apotex from selling the generic product. After a series of appeals regarding the preliminary injunction, a New York district court in 2007 held that a permanent injunction is warranted. See Sanofi-Synthelabo v. Apotex Inc., 492 F. Supp. 2d 353, 397 (S.D.N.Y. 2007) (concluding that: (i) Apotex infringed Sanofi's patent, (ii) Apotex failed to prove by clear and convincing evidence that the patent was invalid or unenforceable, and (iii) Sanofi is entitled to a permanent injunction). Apotex's appeal is pending at the time of this writing.
35. See Klor's, Inc. v. Broadway-Hale Stores, 359 U.S. 207, 212 (1959) (defining group boycotts as "concerted refusals by traders to deal with other traders" and labeling per se illegal a group boycott by manufacturers, distributors and defendant-retailer based on a conspiracy to either not sell or sell only at discriminatory prices and highly unfavorable terms); Toys "R" Us, Inc. v. FTC, 221 F.3d 928, 936 (7th Cir. 2000) (listing criteria under which a group boycott can be held per se illegal). But see Brookins v. Int'l Motor Contest Ass'n, 219 F.3d 849, 854 (8th Cir. 2000) (stating that "precedent limits the per se rule in the boycott context to cases involving horizontal agreements among direct competitors" (quoting Nynex Corp. v. Discon, Inc., 525 U.S. 128, 135 (1998))); Minn. Ass'n of Nurse Anesthetists v. Unity Hosp., 208 F.3d 655, 659 (8th Cir. 2000) (holding that there is not a per se illegal antitrust boycott when one supplier enters into an exclusive supply agreement with one customer, even though the supplier's competitors are foreclosed from that customer for the life of the contract).
36. See Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 9 (1984) ("It is far too late in the history of our antitrust jurisprudence to question the proposition that certain tying arrangements pose an unacceptable risk of stifling competition and therefore are unreasonable 'per se.'"), abrogated by Ill. Tool Works Inc. v. Indep. Ink, Inc., 547 U.S. 28 (2006) (reversing previous cases that asserted tying arrangements involving patented products were per se unlawful without requiring proof of sufficient market power, and holding that "in all cases involving a tying arrangement, the plaintiff must prove that the defendant has market power in the tying product"); see also Janet L. McDavid & Eric J. Stock, Antitrust Law: Supreme Court Rulings, NAT'L L.J., June 2006, at 14 (writing that "[p]laintiffs in tying cases must now generally present affirmative evidence of market power in order to meet their burden of proof and to move past the summary judgment stage, instead of being permitted to rely upon simplistic presumptions that place that burden on the patentholder").
37. DOJ ANTITRUST MANUAL, supra note 12, § 7-6.120.
38. See Cal. Dental Ass'n v. FTC, 224 F.3d 942, 947 (9th Cir. 2000) (explaining that the rule of reason analysis consists of three parts: (i) a determination of whether the persons or entities to the agreement intend to harm or restrain competition; (ii) a determination of whether an actual injury to competition occurs; and (iii) a determination of whether the restraint is unreasonable as determined by balancing the problematic effects of the restraint against any justifications or pro-competitive effects of the restraint).
39. See Broad. Music, Inc. v. CBS, 441 U.S. 1, 8 (1979) (applying rule of reason to blanket copyright licenses because there existed valid pro-competitive justifications for the restraint); see also United States v. U.S. Gypsum Co., 438 U.S. 422, 442-43 n.16 (1978) (noting that the exchange of price data between competitors does not always have anticompetitive effects but may actually increase market competition and economic efficiency; therefore such exchange agreements should be subject to rule of reason and not per se analysis); Paladin Assocs. Inc. v. Montana Power Co., 328 F.3d 1145, 1155 (9th Cir. 2003) (stating that, when a defendant advances plausible arguments that a practice enhances overall efficiency and makes markets more competitive, per se treatment is inappropriate and the rule of reason applies); Nat'l Hockey League Players' Ass'n v. Plymouth Whalers Hockey Club, 325 F.3d 712, 718-19 (6th Cir. 2003) (comparing per se analysis with the rule of reason).
40. See Nat'l Collegiate Athletic Ass'n v. Bd. of Regents of Univ. of Okla., 468 U.S. 85, 104 n.26 (1984) (claiming that there is often no "bright line separating per se from rule of reason analysis"); Terry Calvani, The Rule of Reason and the Per Se Rule: Some Thoughts on the Rule of Reason, SE47 ALI-ABA 25 (2000) (noting that the traditional dichotomy between rule of reason and per se analysis continues to deteriorate).
41. In Chi. Bd. of Trade v. United States, 246 U.S. 231, 238 (1918), the Court provided the classic definition of the rule of reason standard: [T]he true test of legality is whether the restraint imposed is such as merely regulates and perhaps thereby promotes competition or whether it is such as may suppress or even destroy competition. To determine that question the court must ordinarily consider the facts peculiar to the business to which the restraint is applied; its condition before and after the restraint was imposed; the nature of the restraint and its effect, actual or probable. The history of the restraint, the evil believed to exist, the reason for adopting the particular remedy, the purpose or end sought to be attained, are all relevant facts. Id.; see also United States v. Brown Univ., 5 F.3d 658, 669 n.8 (3d Cir. 1993) (noting that the contours of the traditional rule of reason inquiry have remained largely unchanged since first defined in Chi. Bd. of Trade).
42. See Perceptron Inc. v. Sensor Adaptive Machs., Inc., 221 F.3d 913, 918 (6th Cir. 2000) (finding a "reasonable" non-competition covenant ancillary to the sale of a business to be, on balance, pro-competitive because it allows the buyer to retain the business' goodwill); see also United States v. Alston, 974 F.2d 1206, 1209 (9th Cir. 1992) (stating that "[it is] true that in a very narrow class of cases, market arrangements involving horizontal restraints are nevertheless analyzed under the rule of reason rather than the per se approach. Such cases, however, involve industries 'in which horizontal restraints on competition are essential if the product is to be available at all'" (quoting Nat'l Collegiate Athletic Ass'n, 468 U.S. at 101)).
43. See U.S. Gypsum Co., 438 U.S. at 422 (distinguishing the exchange of price information, the "gray zone of socially acceptable and economically justifiable business conduct" from per se illegal conduct); see also Maple Flooring Mfrs. Ass'n v. United States, 268 U.S. 563, 582-84 (1925) (noting that certain types of price information exchanges may help to "avoid the waste which inevitably attends the unintelligent conduct of economic enterprise"); cf. In re Coordinated Pretrial Proceedings in Petroleum Prods. Antitrust Litig., 906 F.2d 432, 447 (9th Cir. 1990) ("Information exchanges help to establish an antitrust violation only when either (1) the exchange indicates the existence of an express or tacit agreement to fix or stabilize prices, or (2) the exchange is made pursuant to an express or tacit agreement that is itself, a violation of § 1 under a rule of reason analysis.").
44. See State Oil Co. v. Khan, 522 U.S. 3, 18 (1997) (holding that there is insufficient economic justification for per se invalidation of vertical maximum price fixing (overruling Albrecht v. Herald Co., 390 U.S. 145 (1968))). The Supreme Court held that vertical maximum price fixing, where a supplier or manufacturer requires dealers of its products to charge at or below a maximum price, is not a per se violation, but rather should be analyzed under the rule of reason standard. See id. at 7; see also William Kolasky, California Dental Ass'n v. FTC: The New Antitrust Empiricism, 14 ANTITRUST 68 (1999) (contending that the Supreme Court's holding in Cal. Dental Ass'n v. FTC, 526 U.S. 756 (1999) was in accord with the DOJ's four-step approach for assessing vertical restraints, which asks: (i) is the restraint likely to exclude the object of the restraint from the market?; (ii) is there any "plausible" efficiency justification for the alleged restraint?; (iii) is the restraint likely to create or maintain market power?; and (iv) are there any restraints that are not reasonably necessary to achieve the claimed efficiencies?).
45. See generally Mark Hansen, It's Not Business As Usual: Oil Company's Appeal Fuels Antitrust Reversal of Warren Court Decision on Price Agreements, 84 A.B.A. J. 40 (Jan. 1998) (discussing consequences of State Oil Co. in allowing manufacturers to prevent price gouging by dealers). But see MCA Television Ltd. v. Pub. Interest Corp., 171 F.3d 1265, 1278 (11th Cir. 1999) (finding State Oil Co. rejects only the use of a per se standard with vertical maximum price fixing while finding a "block booking" contract, a tying arrangement, to be per se illegal).
46. See Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 127 S.Ct. 2705, 2725 (2007) (holding that application of per se rule is unwarranted as to vertical agreements to fix minimum resale prices and that vertical price restraints are instead to be judged according to the rule of reason (overruling Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U.S. 373 (1911))). In Leegin, the owner of a Texas women's clothing store claimed that Leegin, a manufacturer and distributor of leather goods, illegally entered into agreements with retailers to set prices for its products. See id. at 2710-2711. In overturning nearly 100-year-old precedent, the Court said that the reasons upon which Dr. Miles relied do not justify a per se rule: the Court in Dr. Miles failed to discuss the business reasons that would motivate a manufacturer at that time to make use of vertical price restraints, and the Court treated vertical agreements a manufacturer makes with its distributor as analogous to a horizontal combination among competing distributors, a notion the Court has since rejected. Id. at 2714. The Court concluded that "vertical agreements establishing minimum resale prices can have either procompetitive or anticompetitive effects, depending upon the circumstances in which they are formed" and that the rule of reason is the appropriate standard to judge vertical price restraints. Id. at 2717-2720.
47. See Bogan v. Hodgkins, 166 F.3d 509, 514 (2d Cir. 1999) (explaining that the Court has sanctioned the use of quick look intermediate scrutiny if the conduct is a "naked restriction" but does not fit into one of the classic per se categories); see also Law v. Nat'l Collegiate Athletic Ass'n, 134 F.3d 1010, 1020 (10th Cir. 1998) (utilizing quick look analysis to find that use of salary caps for coaches was naked price restraint); David Balto, Some Observations on California Dental Association v. FTC, 14 ANTITRUST 64, 66 (1999) (stating that the "quickness" of the inquiry needs to be "calibrated to the clarity of the anticompetitive effect of the restraints at issue"); Kolasky, supra note 38, at 70 (contending that the court in Cal. Dental Ass'n corrected the "misimpression" of some courts that "'quick look' analysis was a separate category, or variant, of the rule of reason, as opposed to simply a description of how detailed a rule of reason inquiry is necessary in any given case"). Compare Nat'l Collegiate Athletic Ass'n, 468 U.S. at 101 (holding that policies of the NCAA constituted a naked restraint tending to increase price and restrict output, shifting the burden to the defendant to present a pro-competitive justification for the restraint, but not requiring the "detailed market analysis" of a full rule of reason analysis), with Cal. Dental Ass'n v. FTC, 526 U.S. 756, 770 (1999) (holding that "quick look" analysis was inappropriate where the anticompetitive effects of the restraint on advertising practices were not obvious, and therefore the procompetitive effects should have been considered without shifting burden to the defendant), and Brown Univ., 5 F.3d at 669 (rejecting quick look analysis for rule of reason approach because of social considerations attendant to the financial aid practices of institutions of higher education).
48. See generally Stephen Calkins, California Dental Association: Not a Quick Look But Not the Full Monty, 67 ANTITRUST L.J. 495, 531 (2000) (characterizing Cal. Dental Ass'n as a setback for the "'quick look' antitrust movement").
49. See, e.g., Cal. Dental Ass'n, 526 U.S. at 770 (stating that quick look analysis is appropriate when "an observer with even a rudimentary understanding of economics could conclude that the arrangements in question would have an anticompetitive effect on customers and markets").
50. See Nat'l Collegiate Athletic Ass'n v. Bd. of Regents of Univ. of Okla., 468 U.S. 85, 101 (1984), (allowing consideration of pro-competitive justifications after finding a naked price restraint). See generally James A. Keyte, What It Is and How It Is Being Applied: The "Quick Look" Rule of Reason, 11 ANTITRUST L.J. 21 (1998) (explaining the quick look rule and analyzing its current applications).
51. See United States v. Brown Univ., 5 F.3d 658, 668-69 (3d Cir. 1993) (stating that, under the abbreviated rule of reason analysis, defendant must initially defeat the presumption of an anticompetitive effect to justify full rule of reason scrutiny and force the DOJ to demonstrate that less restrictive alternative exists); Bogan, 166 F.3d at 514 (stating that under quick look analysis, defendant may demonstrate pro-competitive justification for the restraint and force court to proceed to full rule of reason analysis (citing Brown Univ., 5 F.3d at 668-69)).
52. Cal. Dental Ass'n., 526 U.S. at 780-81.
53. Id. at 779-81 (discussing the spectrum of adequate reasonableness analysis and predicting the expansion of quick look over time as more restraints can be confidently presumed anticompetitive).
54. See Calkins, supra note 40, at 531-35 (citing the Court's reliance on factors that potentially narrow application of the quick look analysis). Indeed, after this ruling, courts have been wary to apply a pure "quick look" analysis at the summary judgment stage of a particular litigation. See Cont'l Airlines, Inc. v. United Airlines, Inc., 277 F.3d 499, 511 (4th Cir. 2002) (stating that court could not find single instance in which Supreme Court approved a quick look analysis when a party had received less than a full evidentiary hearing).
55. U.S. CONST. art. 1, § 8, cl. 3 ("The Congress shall have power . . . [t]o regulate commerce . . . among the several states.").
56. See e.g., United States v. Romer, 148 F.3d 359, 364 n.1 (4th Cir. 1998) (explaining the government's success in demonstrating an interstate commerce nexus is both a critical jurisdictional fact and an element of the substantive offense under the Act); United States v. Fitapelli, 786 F.2d 1461, 1462 (11th Cir. 1986) (calling the nexus between the defendants' illegal business activities and interstate commerce the sine qua non of establishing jurisdiction under § 1 of the Sherman Act).
57. See McLain v. Real Estate Bd., 444 U.S. 232, 241 (1980) (finding broad reach of the Commerce Clause corresponds to that of the Act); see also Summit Health, Ltd. v. Pinhas, 500 U.S. 322, 328-29 (1991) (stating that "as the dimensions and complexity of our economy have grown, the federal power over commerce, and the concomitant coverage of the Sherman Act, have experienced similar expansion"); Romer, 148 F.3d at 365 (examining "all . . . conceivable links to interstate commerce," including the location of transaction and immediate parties).
58. McLain, 444 U.S. at 241-42; see also United States v. Giordano, 261 F.3d 1134, 1138 (11th Cir. 2001) (discussing "flow" [in commerce] and "effects" [on commerce] theories); United States v. Nukida, 8 F.3d 665, 670-71 (9th Cir. 1993) (stating government can prove nexus with interstate commerce either by showing that products were "in commerce" or that defendant's action "had an actual economic impact on commerce").
59. Romer, 148 F.3d at 365 (describing the "in commerce" test as applicable where the defendant's activities lie directly in the flow of interstate commerce).
60. United States v. Fischbach & Moore, Inc., 750 F.2d 1183, 1192 (3d Cir. 1984) (citing McLain, 444 U.S. at 244). In Fischbach & Moore, Inc., contracting services were determined to be interstate commerce activities because contractors often ordered substantial amounts of material from out of state to be delivered directly to job sites. Id. at 1192. But see Fitapelli, 786 F.2d at 1463 (holding jurisdiction under the "in the flow of commerce" theory is not established where the activities of the defendant's customer were in the flow of interstate commerce but the defendant's activities were not). The indictment in Fitapelli alleged only that the defendant's customer generated solid waste, a consequence of activities within the flow of commerce, but not that defendant's activities were within the flow of commerce. Id.
61. Fischbach & Moore, Inc., 750 F.2d at 1192 (quoting McLain, 444 U.S. at 245-46); see also Hammes v. AAMCO Transmissions, Inc., 33 F.3d 774, 780 (7th Cir. 1994) (stating McLain standard clearly differentiates between "substantial" and "insubstantial" effects).
62. See Summit Health, Ltd. v. Pinhas, 500 U.S. 322, 330 (1991) (holding that the hospital's boycott of single surgeon produced sufficient effect on interstate commerce to satisfy nexus requirement, and reasoning that a hospital that treats patients and purchases supplies from other states is not engaged in purely local trade practices). But see United States v. ORS, Inc., 997 F.2d 628, 631-32 (9th Cir. 1993) (holding bare allegation that defendants' business activities were within flow of, or substantially affected, interstate commerce was not enough to satisfy nexus requirement when only intrastate activities were discussed in the indictment).
63. 444 U.S. 232, 242 (1980).
64. AREEDA & HOVENKAMP 2000, supra note 5, § 266i2.
65. Anesthesia Advantage, Inc. v. Metz Group, 912 F.2d 397, 400-01 (10th Cir. 1990).
66. Compare McLain, 444 U.S. at 242-43 ("Petitioners need not make the more particularized showing of an effect on interstate commerce caused by the alleged conspiracy to fix commission rates, or by those other aspects of respondents' activity that are alleged to be unlawful."), with McLain, 444 U.S. at 246 ('To establish federal jurisdiction in this case, there remains only the requirement that respondents' activities which allegedly have been infected by a price-fixing conspiracy be shown 'as a matter of practical economics' to have a not insubstantial effect on the interstate commerce involved." (quoting Hospital Bldg. Co. v. Trustees of Rex Hosp., 425 U.S. 738, 745 (1976))).
67. See Anesthesia Advantage, 912 F.2d at 400-01 (discussing circuit split).
68. The Third, Fourth, Ninth, and Eleventh Circuits have followed the broader interpretation. See Brader v. Allegheny Gen. Hosp., 64 F.3d 869 (3d Cir. 1995) (discussing broad interpretation of interstate commerce and holding that claim of wrongful termination of staff privileges and resulting limitation on ability to serve patients in the relevant market sufficient to satisfy "interstate commerce" requirement at complaint stage); United States v. Romer, 148 F.3d 359, 365 (4th Cir. 1998) (discussing broad conception of what constitutes interstate commerce, and finding the requirement met where bid-rigging was driven by the financial interests of out-of-state lenders); United States v. ORS, Inc., 997 F.2d 628, 629-30, n.4 (9th Cir. 1993) (noting circuit split and stating, "[t]o meet the 'effect on commerce test' the government need only allege that ORS's business activities have a substantial effect on interstate commerce" (quoting McLain, 444 U.S. at 242-43)); United States v. Giordano, 261 F.3d 1134, 1139 (11th Cir. 2001) (acknowledging that "this circuit requires only that the defendant's general business activities, not the specific anti-competitive conduct in question, have a substantial effect on interstate commerce").
69. The First, Second, Fifth, Sixth, Seventh, Eighth and Tenth Circuits interpret McLain more narrowly. See Borschow Hosp. & Med. Supplies, Inc. v. Cesar Castillo Inc., 96 F.3d 10, 17 (1st Cir. 1996) (asserting that plaintiff must be injured by anti-competitive act to have standing under antitrust law (citing Wells Real Estate, Inc. v. Greater Lowell Bd. of Realtors, 850 F.2d 803,814 (1st Cir. 1988))); see also Hamilton Chapter of Alpha Delta Phi v. Hamilton Coll., 128 F.3d 59, 66 (2d Cir. 1997) (finding that McLain necessitates an inquiry about "whether the aspects of the defendant's business that are infected by the allegedly unlawful conduct can reasonably be expected, as a matter of practical economics, to have a not insubstantial effect on interstate commerce"); Ancar v. Sara Plasma, Inc., 964 F.2d 465, 469 (5th Cir. 1992) (finding that plaintiff establishes jurisdiction under the Act by claiming that certain illegal agreements in the defendant's plasmaphersis business affect interstate commerce); Rao v. Pontiac Gen. Hosp., 835 F.2d 879 (6th Cir. 1987) (stating that because "infected portion" of defendant's business did not affect the interstate hospital business, its conduct was beyond the reach of the Act); Hammes v. AAMCO Transmissions, Inc., 33 F.3d 774, 780 (7th Cir. 1994) (holding that the "Sherman Act requires [a] substantial, at least not insubstantial, effect on interstate commerce, either by the antitrust violation itself, or by the activities affected by the antitrust violation"); Huelsman v. Civic Ctr. Corp., 873 F.2d 1171, 1175 (8th Cir. 1989) (stating "plaintiff must demonstrate that the defendant's alleged unlawful conduct, and not the defendant's general activities, substantially affects interstate commerce" (citing Hayden v. Bracy, 744 F.2d 1338, 1343 n.2 (8th Cir. 1984))); Anesthesia Advantage, Inc., 912 F.2d at 401 (stating "[plaintiffs] must (1) identify a 'relevant' aspect of interstate commerce, and (2) specify its relationship to the defendant's activities alleged to be 'infected' with illegality").
70. 500 U.S. 322 (1991). Summit Health involved a suit brought by an ophthalmological surgeon alleging that a Los Angeles hospital, its owner, and medical staff conspired to exclude him from the city's market for ophthalmological services because he refused to follow an unnecessarily expensive procedure used at the hospital. Id. at 324-25. The Supreme Court held that the alleged illegal activity had a sufficient nexus to interstate commerce to establish jurisdiction under the Act, reasoning that the alleged conspiracy, if successful, would cause reduction in provision of ophthalmological services in both local and interstate markets. Id. at 329-33.
71. Id. at 336 (Scalia, J., dissenting) ("Today the Court could have cleared up the confusion created by McLain . . . . Instead, it compounds the confusion by rejecting the two competing interpretations of McLain and adding yet a third candidate to the field . . . . To determine Sherman Act jurisdiction it looks neither to the effect on commerce of the restraint, nor to the effect on commerce of the defendants' infected activity, but rather, it seems, to the effect on commerce of the activity from which the plaintiff has been excluded.").
72. See id. at 329-32. The Court ultimately concluded that sufficient nexus with interstate commerce had been established. See also AREEDA & HOVENKAMP 2000, supra note 5, § 266f2 (analyzing Summit Health majority's reasoning).
73. AREEDA & HOVENKAMP 2000, supra note 5, § 266h.
74. See generally Ronald A. Cass & Keith N. Hylton, Antitrust Intent, 74 S. CAL. L. REV. 657 (2001) (identifying the legal standards applied in antitrust law and arguing that the structure of many legal rules can be understood by focusing on the goal of minimizing the costs of legal errors).
75. 438 U.S. 422 (1978). The defendants in Gypsum had been convicted of engaging in a price-fixing conspiracy. In affirming reversal of the conviction, the Supreme Court held, inter alia, that: (i) intent is a necessary element in a criminal offense under the Act; and (ii) the defendants' exchanges of price information, allegedly to match competition's prices (within the permissible bounds of the Robinson-Patman Act), were not exempt from scrutiny under the Act; but (iii) the trial judge erred by instructing jurors that they could infer intent from effect on prices. Id. at 433-35.
76. See U.S. Gypsum Co., 438 U.S. at 435 (finding state of mind or intent to be element of criminal offense which must be established by evidence, and not by inference from proof of effect on prices). Note that the Gypsum Court adopted criminal law's "bifurcated" treatment of mens rea, allowing intent to be established by a showing of purpose to bring about an anticompetitive result or inferred from the defendant's knowledge of the probable consequences of his or her conduct. Id. at 444-45 & n.21.
77. Gypsum involved an exchange of price information that the Court found illustrative of the "gray zone of socially acceptable and economically justifiable business conduct." Id. at 441.
78. The Gypsum Court acknowledged the difficulty in distinguishing an activity such as the exchange of price information, which is not always anticompetitive, from activities proscribed as illegal per se by the Act because of their unquestionably anticompetitive effect. Id. at 440-42 & n.16.
79. Id. at 444.
80. Id. at 435.
81. See United States v. Brown, 936 F.2d 1042, 1046-47 (9th Cir. 1990) (finding that eliminating proof of intent required by Gypsum with respect to per se illegal market allocation agreement accords with precedent); United States v. Coop. Theatres of Ohio, Inc., 845 F.2d 1367, 1373 (6th Cir. 1988) (requiring only proof that defendant knowingly entered conspiracy and not of knowledge of probable anticompetitive effects with respect to per se illegal customer allocation agreement); United States v. Cargo Serv. Stations, Inc., 657 F.2d 676, 682-83 (5th Cir. 1981) (finding the government did not have to prove specific intent to unreasonably restrain trade with respect to per se illegal price fixing agreement and distinguishing Gypsum as involving more than mere price fixing).
82. See United States v. Hayter Oil Co., 51 F.3d 1265, 1270 (6th Cir. 1995) (arguing that the government must prove only that agreement existed during statute of limitations period and that defendant knowingly entered agreement where defendants were accused of conspiring to fix retail gasoline prices); United States v. All Star Indus., 962 F.2d 465, 474 (5th Cir. 1992) (stating that, to meet intent requirement government must prove beyond a reasonable doubt that defendants knowingly and willfully formed, joined or participated in a combination or conspiracy to rig bids); Brown, 936 F.2d at 1046 (holding that "[w]here per se conduct is found, a finding of intent to conspire to commit the offense is sufficient; a requirement that intent go further and envision actual anti-competitive results would reopen the very questions of reasonableness which the per se rule is designed to avoid" (quoting United States v. Koppers Co., 652 F.2d 290, 296 n.6 (2d Cir. 1981))); United States v. Suntar Roofing, Inc., 897 F.2d 469, 474-75 (10th Cir. 1990) (holding that government must prove that defendant was aware of conspiracy's purpose and was willing participant).
83. EARL W. KINTNER & JOSEPH P. BAUER, FEDERAL ANTITRUST LAW § 65.2 (1980) (stating that federalism, economic, or regulatory interests, often statutorily codified, may collide with and displace antitrust law).
84. See Palmer v. BRG of Ga., Inc., 498 U.S. 46, 50 n.7 (1990) (stating that antitrust conspiracies may continue in time beyond original conspiratorial agreements until conspiracy's objectives are either abandoned or succeed (citing United States v. Kissel, 218 U.S. 601, 608-09 (1910))); cf. United States v. Andreas, 216 F.3d 645, 669 (7th Cir. 2000) (holding that a defendant who pretended to agree to enter a conspiracy but had no intent to honor the conspiracy could not be convicted of a crime).
85. See United States v. U.S. Gypsum Co., 438 U.S. 422, 430-31 (1978) (discussing defendant's withdrawal from conspiracy defense).
86. See id. at 463-64 (finding confession, along with other methods, constitutes withdrawal); Morton's Mkt. Inc. v. Gustafson's Dairy, Inc., 198 F.3d 823, 839 (11th Cir. 1999) (noting that the resignation from business may constitute effective withdrawal); United States v. Nippon Paper Indus., 62 F. Supp. 2d 173, 190 (D. Mass. 1999) (finding that resuming competitive activity communicates withdrawal).
87. U.S. Gypsum Co., 438 U.S. at 464-65; accord Morton's Mkt., Inc., 198 F.3d at 839 (concluding that defendant's sale of dairy, cessation of participation in price-fixing activities, and communication of sale to other dairies constituted withdrawal).
88. See United States v. Antar, 53 F.3d 568, 583 (3d Cir. 1995) (stating that "if the defendant has not completely severed his ties with the enterprise, then in order to establish a prima facie case, he must demonstrate either that he gave notice to his co-conspirators that he disavows the purpose of the craispiracy or that he did acts inconsistent with the object of the conspiracy"); United States v. Eisen, 974 F.2d 246, 269 (2d Cir. 1992) (holding defendant-attorney did not withdraw from conspiracy because, despite resignation, he continued to receive a percentage of profits derived from pre-resignation conspiratorial activities); United States v. Pippin, 903 F.2d 1478, 1481-82 (11th Cir. 1990) (holding that conspirator not only must inform co-conspirator of refusal to participate in future bid-rigging, but also must refuse to honor terms of previous agreements concerning such conspiracy).
89. 18 U.S.C. § 3282 (2000).
90. See Grunewald v. United States, 353 U.S. 391, 396-97 (1957) (discussing scope of conspiracy for statute of limitations purposes); Morton's Mkt., Inc., 198 F.3d at 837 (explaining that "[w]ithdrawal, therefore, is not a complete defense to the charge of conspiracy. It becomes a complete defense only when coupled with the defense of the statute of limitations. The statute of limitations begins to run upon the conspirator's withdrawal from the conspiracy"); Antar, 53 F.3d at 584 (stating statute of limitations begins to run upon withdrawal from the conspiracy).
91. See Grunewald, 353 U.S. at 397 (explaining that "the crucial question in determining whether the statute of limitations has run is the scope of the conspiratorial agreement . . ."); United States v. Dynalectric Co., 859 F.2d 1559, 1564 (11th Cir. 1988) (stating that one must look to the conspiratorial agreement to determine conspiracy's objectives).
92. See Grunewald, 353 U.S. at 405-06 (holding prosecution barred by statute of limitations because an agreement to conceal the conspiracy after its accomplishment was not found to have been part of the conspiratorial agreement). But see United States v. Mann, 161 F.3d 840, 857-59 (5th Cir. 1998) (holding concealment is sometimes a necessary part of a conspiracy, so that statements made solely to aid the concealment are in fact made during and in furtherance of the charged conspiracy).
93. See In re Grand Jury Proceedings, 797 F.2d 1377, 1380 (6th Cir. 1986) (stating that, "an indictment for the parent conspiracy sweeps within its terms the lesser active progeny, and the latter cannot be tried again. Similarly, the trial of one offspring agreement is a trial on part of the passive parent, and the whole cannot be subsequently prosecuted" (citing Braverman v. United States, 317 U.S. 49, 54 (1942))); cf. Albernaz v. United States, 450 U.S. 333, 343 (1981) (holding that consecutive sentences imposed in drug case for violation of two conspiracy statutes did not violate Double Jeopardy Clause, and that multiple sentences are constitutional where Congress intended to impose multiple punishments).
94. In re Grand Jury Proceedings, 797 F.2d at 1385.
95. Id. at 1385 (rejecting defendant's attempt to invoke the double jeopardy clause after finding that multiple conspiracies involving bid-rigging constituted separate offenses); see also United States v. Sargent Elec. Co., 785 F.2d 1123, 1130 (3d Cir. 1986) (finding multiple conspiracies existed where separate bid-rigging decisions were made before each bid and where the bidders involved varied according to purchaser preferences).
96. 467 U.S. 752 (1984). See generally Thomas McNamara, Comment, Defining a Single Entity for Purposes of Section 1 of the Sherman Act Post Copperweld: A Suggested Approach, 22 SAN DIEGO L.R. 1245 (1985).
97. Copperweld, 467 U.S. at 769 (abandoning "intra-enterprise conspiracy" doctrine); see, e.g., Chase v. Northwest Airlines Corp., 49 F. Supp. 2d 553, 563 (E.D. Mich. 1999) (holding that airline ticketing corporation was agent of Northwest Airlines, and, for purposes of Copperweld analysis, the two were considered a single entity); Sanscap Abrasives Corp. v. Swiss Indus. Abrasive Group, 68 F. Supp. 2d 853, 859 (N.D. Ohio 1999) (holding manufacturer and distributor could not conspire; antitrust action was therefore barred by single-entity doctrine).
98. See, e.g., Freeman v. San Diego Ass'n of Realtors, 322 F.3d 1133, 1147-49 (9th Cir. 2003) (discussing factors to guide single-entity inquiry); Weiss v. York Hosp., 745 F.2d 786, 813 (3d Cir. 1984) (staring civil plaintiff must prove that two or more distinct entities agreed to take action against him in order to prove a § 1 violation).
99. Copperweld, 467 U.S. at 771; see e.g., Boulware v. Nev. Dep't of Human Res., 960 F.2d 793, 797 (9th Cir. 1992) (finding hospital and its wholly owned subsidiary could not form "combination or conspiracy" for purposes of the Act); Greenwood Utils. Comm'n v. Miss. Power Co., 751 F.2d 1484, 1496 (5th Cir. 1985) (ruling wholly owned subsidiaries of single parent corporation are incapable of conspiring among themselves).
100. See Copperweld, 467 U.S. at 767. Variations on the corporate single entity theme have raised questions in several contexts, including the proper Copperweld analysis for a professional association. See e.g., DM Research, Inc., v. Coll. of Am. Pathologists, 170 F.3d 53, 57 (1st Cir. 1999) (declining to resolve question of whether an association can conspire with its own members because of variable circumstances in each case).
101. See Scandinavian Satellite Sys., AS v. Prime TV Ltd., 291 F.3d 839, 846 (D.C. Cir. 2002) (citing basic principle that "ownership, alone, of capital stock in one corporation by another, does not create an identity of corporate interest between the two companies" sufficient to invoke Copperweld analysis). Compare Siegel Transfer, Inc. v. Carrier Express, Inc., 54 F.3d 1125, 1133 (3d Cir. 1995) (concluding that railroad could not conspire with subsidiary in which it owned 99.92% of stock), and Total Benefit Servs., Inc. v. Group Ins. Admin., Inc., 875 F. Supp. 1228, 1239 (E.D. La. 1995) (finding that a parent could not conspire with a 95% owned subsidiary), and Bell Atl. Bus. Sys. Servs. v. Hitachi Data Sys. Corp., 849 F. Supp. 702, 706 (N.D. Cal. 1994) (holding parent corporation and its 80% owned subsidiary were single entity for purposes of the Act), with Free v. Abbott Labs., Inc., 176 F.3d 298, 299-300 (5th Cir. 1999) (stating Copperweld does not exclude federal antitrust liability where conspirator is a partially owned subsidiary rather than wholly owned), aff'd, 529 U.S. 333 (2000), and Bascom Food Prods. Corp. v. Reese Finer Foods, Inc., 715 F. Supp. 616, 630 n.19 (D.N.J. 1989) (suggesting that a less than wholly owned subsidiary and its parent corporation would not be considered single entity), and Am. Vision Ctrs., Inc. v. Cohen, 711 F. Supp. 721, 723 (E.D.N.Y. 1989) (stating that former officers and directors who had owned fifty-four percent of corporation's stock could not use single entity defense when charged with violating § 1 of the Act for forming competing corporation).
102. See Computer Identics Corp. v. S. Pac. Co., 756 F.2d 200, 204-05 (1st Cir. 1985) (finding that, where subsidiary is not wholly owned, jury must find defendant acted as one entity); see also Freeman 322 F.3d at 1147-49 (discussing factors to guide single-entity inquiry).
103. See Mitchael v. Intracorp., Inc., 179 F.3d 847, 857 (10th Cir. 1999) (stating that single entity determination is based on whether entities have "complete unity of interest" and whether their objectives are "common, not disparate," constituting a single corporate consciousness); Bankers Ins. Co. v. Fla. Residential Prop. & Cas. Joint Underwriting Ass'n, 137 F.3d 1293, 1295-96 (11th Cir. 1998) (holding that executive director, counsel, and director of association acted unilaterally because their interests were convergent); Chi. Prof'l Sports Ltd. P'ship. v. NBA, 95 F.3d 593, 597-98 (7th Cir. 1996) (finding NBA teams could be a single entity despite having different and independent centers of interest); Sullivan v. NFL, 34 F.3d 1091, 1099 (1st Cir. 1994) (finding NFL teams to be separate entities capable of conspiring for antitrust purposes because they compete against each other for sale of ownership interests, demonstrating diversity of interests). Courts disagree as to whether a hospital has the capacity to conspire with its medical staff. Compare Oksanen v. Page Mem'l Hosp., 945 F.2d 696, 702-03 (4th Cir. 1991) (holding that, although technically separate entities, Board of Trustees and medical staff of hospital comprise single entity for purposes of peer review process), and Weiss v. York Hosp., 745 F.2d 786, 814-15 (3d Cir. 1984) (stating that hospital and medical staff constitute single entity where staff is empowered to make staff privilege decisions on behalf of hospital, thereby functioning as officer would for corporation), with Capital Imaging Assocs. P.C. v. Mohawk Valley Med. Assocs., 996 F.2d 537, 544-45 (2d Cir. 1993) (finding physicians and hospital association have separate economic interests and did not act as a single entity), and Bolt v. Halifax Hosp. Med. Ctr., 891 F.2d 810, 818-19 (11th Cir. 1990) (finding hospital and staff are separate entities because their interests diverged), and Oltz v. St. Peter's Cmty. Hosp., 861 F.2d 1440, 1450 (9th Cir. 1988) (finding interests of hospital and anesthesiologists, who were independent contractors, sufficiently independent to permit finding of conspiracy).
104. City of Mt. Pleasant v. Associated Elec. Coop., 838 F.2d 268, 275 (8th Cir. 1988) (noting that finding defendant corporations capable of conspiring together would "impose grave legal consequences upon organizational distinctions that are of de minimis meaning and effect" (quoting Sunkist Growers v. Winckler & Smith Citrus Prods. Co., 370 U.S. 19, 29 (1962))). Although the defendants were technically separate corporations, the court held that they were part of a single enterprise, a rural electric cooperative, and therefore could not conspire among themselves. City of Mt. Pleasant, 838 F.2d at 277.
105. See Williams v. I.B. Fischer Nevada, 999 F.2d 445 (9th Cir. 1993) (per curiam) (finding that fast food franchisor and its franchisees were a single entity); Century Oil Tool, Inc. v. Prod. Specialties, Inc., 737 F.2d 1316, 1317 (5th Cir. 1984) (finding that two separate corporations under common ownership and control of three persons constitute single entity); see also Guzowski v. Hartman, 969 F.2d 211, 214 (6th Cir. 1992) (finding that two racetracks with common ownership could not conspire). But see Fishman v. Estate of Wirtz, 807 F.2d 520, 541 n.19 (7th Cir. 1986) (finding that Copperweld defense was not applicable to two corporations with mere "common control," where extent of majority shareholder's control of corporations and commonality of interests between the two corporations are unclear, and noting that commonality of interest is less clear than with parent corporation and its wholly owned subsidiary).
106. See Century Oil Tool, Inc., 737 F.2d at 1317 (finding that two corporations commonly owned by three persons were incapable of conspiring with each other). The Court declined to specify the point at which common ownership would fade into a plurality of independent owners, making the companies independent actors for purposes of § 1 of the Act. Id. at 1317 n.1.
107. See Freeman v. San Diego Ass'n of Realtors, 322 F.3d 1133, 1147 (9th Cir. 2000) (stating that single entity rule applies to subsidiaries owned by a common parent (citing Thomsen v. W. Elec. Co., 680 F.2d 1263, 1265-66 (9th Cir.1982))); Advanced Health-Care Servs., Inc. v. Radford Cmty. Hosp., 910 F.2d 139, 146 (4th Cir. 1990) (holding two subsidiaries wholly owned by same parent corporation are incapable of conspiring among themselves). But see Mitchael, 179 F.3d at 857 (declining to extend Copperweld holding to require that wholly owned subsidiary and its wholly owned sister be considered as single entity).
108. The Restatement (Second) of Agency explains: (1) A master is subject to liability for the torts of his servants committed while acting in the scope of their employment. (2) A master is not subject to liability for the torts of his servants acting outside the scope of their employment, unless. . .(d) the servant purported to act or to speak on behalf of the principal and there was reliance upon apparent authority, or he was aided in accomplishing the tort by the existence of the agency relation. RESTATEMENT (SECOND) OF AGENCY § 219 (1958). Respondeat superior issues are also discussed in the CORP. CRIM. LIABILITY article in this issue.
109. See United States v. Automated Med. Lab., 770 F.2d 399, 407 (4th Cir. 1985) (stating that "'scope of employment' has been broadly defined to include acts on the corporation's behalf in performance of the agent's general line of work" (citing United States v. Hilton Hotels Co., 467 F.2d 1000, 1004 (9th Cir. 1972))); United States v. Koppers, 652 F.2d 290, 298 (2d Cir. 1981) (stating that, for corporation to be held liable for agent's actions, agent must have such responsibility that her conduct could be assumed to represent corporation; she need not be "high managerial agent"); United States v. Am. Radiator & Standard Sanitary Corp., 433 F.2d 174, 204-05 (3d Cir. 1970) (defining "acts within scope of employment" as those "done on behalf of a corporation and directly related to the performance of the type of duties the employee has general authority to perform," and "apparent authority" as authority a reasonable person would assume agent would have, "judging from his position with the company, the responsibilities previously entrusted to him, and the circumstances surrounding his past conduct").
110. See Vernon v. S. Cal. Edison Co., 955 F.2d 1361, 1369 (9th Cir. 1992) (stating that imposition of liability upon corporation is appropriate as long as employee is acting within scope of his employment (citing United States v. Portac, Inc., 869 F.2d 1288, 1293 (9th Cir. 1989))); Hilton Hotels, 467 F.2d at 1004 (finding defendant liable for agent's participation in boycott, despite corporate policy to purchase supplies based solely on price, quality, and service); Am. Radiator, 433 F.2d at 204-05 (ruling defendant's strict anti-fraternization policy prohibiting even social contact between agents and competitors did not preclude finding defendant habile for agent's participation in price-fixing conspiracy); see also Robert E. Bloch, Compliance Programs and Criminal Antitrust Litigation: A Prosecutor's Perspective, 57 ANTITRUST 223, 229 (1988) (stating that corporations cannot absolve themselves of liability by arguing that compliance programs establish lack of intent to violate antitrust laws).
111. See United States v. Basic Constr. Co., 711 F.2d 570, 573 (4th Cir. 1983) (arguing that corporation is criminally liable if its agents were acting within scope of actual or apparent authority, and for benefit of corporation, regardless of whether acts were contrary to stated policy or specific instructions); United States v. Cadillac Overall Supply Co., 568 F.2d 1078, 1090 (5th Cir. 1978) (holding corporation criminally liable for agent's participation in consumer allocation agreement, despite instructions from president "not to engage in 'holding hands' with competitors"); Hilton Hotels, 467 F.2d at 1004 (finding defendant liable for purchasing agent's participation in boycott, despite instructions given to agent on two occasions not to participate); see also United States v. Bi-Co Pavers, Inc., 741 F.2d 730, 737 (5th Cir. 1984) (holding corporation criminally liable for agent's bid-rigging activities where corporate officer was aware of such activities but failed to object); Cont'l Baking Co. v. United States, 281 F.2d 137, 149 (6th Cir. 1960) (finding defendant criminally liable for agents' price fixing activities despite instructions to agents not to discuss prices with competitors, where superiors were aware of such activities but failed to object).
112. See Am. Soc'y of Mech. Eng'rs, Inc. v. Hydrolevel Corp., 456 U.S. 556, 573-74 (1982) (holding nonprofit corporation promulgating engineering and industry codes liable for agents' self-serving antitrust violation); cf. Union City Barge Line, Inc. v. Union Carbide Corp., 823 F.2d 129, 139 (5th Cir. 1987) (refusing to extend respondeat superior doctrine to hold employer liable where acts of employee were outside the scope of employment, because employee acted "only in his behalf, never at the behest of, or with the slightest semblance of authority from, [employer]").
113. The Robinson-Patman Act, 15 U.S.C. § 13(b) (2005). The Robinson-Patman Act prohibits predatory pricing, and deems such pricing unacceptable if the price discrimination substantially lessens competition. Id. The meeting competition defense requires that the price be offered in good faith to meet, not beat the competitor's price. Id. Section 13(b) provides: [t]hat nothing herein contained shall prevent a seller rebutting [a charge of price discrimination] by showing that his lower price or the furnishing of services or facilities to any purchaser or purchasers was made in good faith to meet an equally low price of a competitor, or the services or facilities furnished by a competitor. Id. For a criticism of the Robinson-Patman Act on economic efficiency grounds, see generally ROBERT H. BORK, THE ANTITRUST PARADOX: A POLICY AT WAR WITH ITSELF, 394-401 (1993) (arguing that the meeting competition defense results in inefficiency, because competitor can only meet - not beat - rival's price, and possible "desirability of price discrimination" is lost). Cf Volvo Trucks N. Am. Inc. v. Reeder-Simco GMC Inc., 546 U.S. 164, 180-181 (2006) (holding that a plaintiff in a price discrimination case must demonstrate that differential pricing challenged under the Robinson-Patman Act actually harmed competition, and asserting Volvo's selective discounting may actually stimulate competition between brands, which serves the "'broader policies of the antitrust laws'" (quoting Brooke Group Ltd. v, Brown & Williamson Tobacco Corp., 509 U.S. 209, 220 (1993))).
114. Standard Oil Co. v. FTC, 340 U.S. 231, 250 (1951) (discussing when a defendant may appropriately invoke the "meeting competition" defense).
115. 438 U.S. 422 (1978).
116. The defendants in U.S. Gypsum Co. engaged in inter-seller price verification, in which manufacturers would call competing sellers to determine the price being offered to a specific customer. Id. at 457.
117. See id. at 458-59 (explaining that the Sherman Act is the primary source of "the broader antitrust policies that have been laid down by Congress" (quoting Automatic Canteen Co. v. FTC, 346 U.S. 61, 74 (1953))).
118. See id. (stating that result of inter-seller verification was concerted price-fixing agreement which lies at core of the Act's prohibitions).
119. See U.S. Gypsum Co., 438 U.S. at 454.
120. See Reserve Supply Corp. v. Owens-Corning Fiberglass Corp., 971 F.2d 37, 41-42 (7th Cir. 1992) (explaining that the Court declined to craft a rigid test for application of this defense because "the facts and circumstances of the particular case, not abstract theories or remote conjectures" should govern its application, but setting forth indicia of good faith, including whether: (i) the seller received reports of similar discounts from other customers, (ii) the seller was threatened with a termination of purchases if the discount was not met, (iii) the seller made efforts to corroborate the reported discount by seeking documentary evidence or appraising its reasonableness in terms of market data, and (iv) the seller had past experience with the buyer); U.S. Gypsum Co., 438 U.S. at 454 (identifying factors relevant to determination of seller's good faith).
121. See U.S. Gypsum Co., 438 U.S. at 456-57 (discussing problems of inter-seller verification in oligopolistic market and finding that it may not always meet requirement of good faith corroboration); see also United States v. Gravely, 840 F.2d 1156, 1162 (4th Cir. 1998) (stating that inter-seller verification warrants suspicion, because the most likely consequence of price list exchanges is stabilization of industry prices).
122. For use of the "meeting competition" defense in civil cases, see Wallace v. Bank of Bartlett, 55 F.3d 1166, 1169 (6th Cir. 1995) (holding publication of fee schedules to be within legitimate business interests, and thus not facilitating collusion); see also Bristol Steel & Iron Works, Inc. v. Bethlehem Steel Corp., 41 F.3d 182, 188 (4th Cir. 1994) (finding that deviation from price list was intended to meet competition, where evidence established that discounts were in response to market competitors).
123. 317 U.S. 341, 351 (1943).
124. Id. The Parker Court held: [i]n a dual system of government in which, under the Constitution, the states are sovereign, save only as Congress may constitutionally subtract from their authority, an unexpressed purpose to nullify a state's control over its officers and agents is not lightly to be attributed to Congress. Id. The Court recognized that nothing in the language or history of the Act indicates a purpose to restrain legislatively-directed activities, and consequently that federal antitrust laws may be displaced by state regulations based on principles of federalism and state sovereignty. Id.; see also FTC v. Ticor Tide Ins. Co., 504 U.S. 621, 635 (1992) (stating that principles of federalism require federal antitrust laws be subject to suppression by state regulatory programs); City of Columbia v. Omni Outdoor Adver., Inc., 499 U.S. 365, 370 (1991) (explaining that doctrines of immunity from antitrust laws rely on principles of federalism and state sovereignty); Patrick v. Burget, 486 U.S. 94, 99 (1988) (discussing holding in Parker that Act is not intended "to restrain state action or official action directed by a state"); Cal. Retail Liquor Dealers Ass'n v. Midcal Aluminum, Inc., 445 U.S. 97, 103-04 (1980) (finding immunity for state regulatory programs grounded in federal structure); cf. Mass. Food Ass'n v. Mass. Alcoholic Beverages Control Comm'n, 197 F.3d 560, 565-66 (1st Cir. 1999) (holding statute limiting number of liquor stores owned by single entity fell under state action immunity doctrine). The court stated that the Association's argument might benefit consumers, but that judges should not second guess policy decisions of democratically elected legislature. Id.
125. While compulsion is often the best evidence of displacement by state regulation, anticompetitive activities need not be compelled where the state policy is clearly articulated. See S. Motor Carriers Rate Conference, Inc. v. United States, 471 U.S. 48, 58 (1985) (emphasizing that success of antitrust action should depend upon nature of activity challenged rather than on identity of defendant). The Tenth Circuit interprets this holding as implying that immunity should be available to private parties acting under the compulsion of a political subdivision. Zimomra v. Alamo Rent-A-Car, Inc., 111 F.3d 1495, 1500-01 (10th Cir. 1997) (finding that the same test for state action immunity applies, regardless of the identity of the named defendant(s)).
126. AREEDA & HOVENKAMP, 2000 supra note 5, at § 222b (discussing underpinnings of state action immunity doctrine); see also S. Motor Carriers, 471 U.S. at 62 (explaining that, under "clearly articulated" doctrine, conduct that was either intended or contemplated by legislature is considered to be state-authorized); Zimomra, 111 F.3d at 1499 (discussing "clearly articulated" doctrine).
127. See Neo Gen Screening, Inc., v. New England Newborn Screening Program, 187 F.3d 24, 28 (1st Cir. 1999) (holding creation of monopoly for newborn screening programs by Massachusetts executive branch was protected from federal antitrust laws under Parker doctrine).
128. See Midcal Aluminum, Inc., 445 U.S. at 105 (finding Parker doctrine immunized the conduct of private party). However, a "cooperative agreement" between a federal entity and private contractor does not automatically immunize the private party from antitrust laws. See Thomas v. Network Solutions, Inc., 176 F.3d 500, 508-09 (D.C. Cir. 1999) (noting that in private contractor's dealings with National Science Foundation, a federal entity, no federalism concerns existed, and federal instrumentality doctrine did not immunize anticompetitive practices simply because they were "pursuant to a government contract"). Complementing the Parker doctrine, the federal instrumentality doctrine immunizes "the United States, [as well as] its agencies and officials" from the Act. See Sea-Land Serv., Inc. v. Alaska R.R. 659 F.2d 243, 246 (D.C. Cir. 1981).
129. See Town of Hallie v. City of Eau Claire, 471 U.S. 34, 38 (1985) (noting that, unlike states, municipalities "are not beyond the reach of the antitrust laws. . .because they are not themselves sovereign" unless they meet a more strenuous test). But cf. Town of Neenah Sanitary Dist No. 2 v. City of Neenah, 647 N.W2d 913, 921 n.8 (Wisc. Ct. App. 2002) (noting that "much of the force of [Town of Hallie] which hold[s] that municipalities are not immune from antitrust liability unless acting pursuant to a clearly articulated and affirmatively expressed state policy to displace competition, have been prospectively overruled with the enactment of the Local Government Antitrust Act of 1984, Pub.L. No. 98-544, 98 Stat. 2750 (1984)" (citing Sakamoto v. Duty Free Shoppers, Ltd., 764 F.2d 1285, 1288 (9th Cir. 1985))). The Local Government Antitrust Act of 1984 is codified at 15 U.S.C. §§ 34-36. The general rule is that antitrust damages are not recoverable from any local government. See Opdyke Inv. Co. v. City of Detroit 883 F.2d 1265, 1265 (6th Cir. 1989) ("[The Local Government Antitrust Act] - described by Congress as an act to 'clarify' the application of the Clayton Act to the official conduct of local governments - established as a general rule that antitrust damages are not recoverable from any local government"). The remedy is limited to injunctive relief.
130. See Patrick v. Burget, 486 U.S. 94, 100 (1988) (citing Cal. Retail Liquor Dealers Ass'n v. Midcal Aluminum, Inc., 445 U.S. 97, 105 (1980)). The Fifth Circuit, in Surgical Care Ctr. of Hammond v. Hosp. Serv. Dist. No. 1 of Tangipahoa Parish, declined to extend Parker immunity to a hospital service district although authorized by state statute, because the legislature "did not make sufficiently clear an intent to exercise its authority to insulate its creature of state government from the constraints of the Sherman Antitrust Act." 171 F.3d 231, 232 (5th Cir. 1999).
131. 445 U.S. 97 (1980).
132. Id. at 105.
133. Id. (quoting City of Lafayette v. La. Power & Light Co., 435 U.S. 389, 410 (1978) (plurality opinion)); cf. Yeager's Fuel, Inc. v. Pa. Power & Light Co., 22 F.3d 1260, 1266-67 (3d Cir. 1994) (holding that state policy need not be aimed at restraining competition; it is enough if this is simply "the 'foreseeable result' of what the statute authorizes" (quoting City of Columbia v. Omni Outdoor Adver. Inc., 499 U.S. 365, 373 (1981))).
134. Midcal Aluminum, Inc., 445 U.S. at 105 (concluding that system for wine pricing was not "actively supervised" when the state simply authorized price setting and enforced prices established by private parties without review (quoting City of Lafayette, 435 U.S. at 410) (plurality opinion)); see also TFWS, Inc. v. Schaefer, 242 F.3d 198, 211 (4th Cir. 2001) (concluding that state liquor regulatory scheme, which required liquor wholesalers to post prices and adhere to them, was not actively supervised by the state, because the wholesalers had discretion to determine their posted prices).
135. See FTC v. Ticor Tide Ins. Co., 504 U.S. 621, 634 (1992) (finding that active supervision requirement requires that the state exercise ultimate control over anticompetitive conduct by reviewing acts of private parties and disapproving those that fail to accord with state policy); see also A.D. Bedell Wholesale Co., Inc. v. Philip Morris Inc., 263 F.3d 239, 260 (3d Cir. 2001) (requiring that state conduct independent review and approval for activity to constitute state action); N. Star Steel Co. v. MidAmerican Energy Holdings Co., 184 F.3d 732, 738 (8th Cir. 1999) (stating that active supervision by state requires independent judgment and control over regulated activity).
136. Ticor Title Ins., 504 U.S. at 634 (quoting Patrick v. Burget, 486 U.S. 94, 100-01 (1988)). In Ticor Title Ins., the Court refused to apply the state action doctrine to an insurance rate-setting system regulated by the state, where rates were automatically approved unless rejected by state commissions within a set period of time. Id. at 638-39; see also A.D. Bedell Wholesale Co., 263 F.3d at 260 (no state action without adequate supervision; "It is the conduct that violates the antitrust laws that states must 'actively supervise' in order for Parker immunity to attach."). Compare Liquor Corp. v. Duffy, 479 U.S. 335, 344-45 (1987) (asserting state action doctrine does not cover legislatively mandated liquor-pricing system where state itself neither sets prices nor reviews reasonableness of price schedules), and Canterbury Liquors & Pantry v. Sullivan, 16 F. Supp. 2d 41, 45-46 (D. Mass. 1998) (finding that commission enforcing liquor license and pricing statute was engaged in per se violation of Act, and therefore not covered by state action immunity), with Yeager's Fuel, Inc., 22 F.3d at 1271 (finding that state action immunity covers legislatively mandated energy conservation programs that include electric rate reduction for high-efficiency homes, where state bureau approved rate, considered complaints about rate, and decided it served energy conservation purposes), and DFW Metro Line Servs. v. SW Bell Tel., 988 F.2d 601, 606-07 (5th Cir. 1993) (holding that state action doctrine covers public utility rate schedule mandated by state, where record and published opinions of state regulatory agency showed numerous inquiries into reasonableness of rates, as well as other broad-based rate making proceedings), and Nugget Hydroelectric v. Pac. Gas & Elec. Co., 981 F.2d 429, 435 (9th Cir. 1992) (noting that state action doctrine covered utility's refusal to agree to contract modifications under force majeure clause, as permitted by state regulations, where published decisions demonstrated state commission's policy of reviewing force majeure claims and settlement agreements involving utilities and private parties).
137. 471 U.S. 34 (1985).
138. Id. at 47 (explaining that "there is little or no danger that [a municipality] is involved in a private price-fixing arrangement," and eliminating the second prong of the Midcal test). The Court assumed that the risk of self-interested behavior is diminished because the municipality is empowered by the State, and is therefore subject to the policies of the State.
139. Id. Fisichelli v. Town of Methuen, 956 F.2d 12, 14 (1st Cir. 1992) (explaining municipalities draw legal life from state law when state provides municipality with general grant of authority to take actions of general sort in question).
140. City of Columbia v. Omni Outdoor Adver., Inc., 499 U.S. 365, 372-73 (1991) (explaining how state authorization for municipal action can be established without explicit statutory authorization (quoting Hallie, 471 U.S. at 41-42)); see also Consol. Television Cable Serv., Inc. v. City of Frankfurt, 857 F.2d 354, 358 (6th Cir. 1988) (defining cable television entity as municipal agent where company was created by city pursuant to state law clearly authorizing municipal regulation of cable television services, despite foreseeable restraint on competition). But see Elec. Inspectors, Inc. v. Vill. of E. Hills, 320 F.3d 110, 120 (2d Cir. 2003) (acknowledging "well established [principle] that a municipality may not fall back on its general police or 'home-rule' powers to immunize anticompetitive regulations" (citing Cmty. Commc'ns Co. v. City of Boulder, 455 U.S. 40 (1982))); Hertz Corp. v. City of New York, 1 F.3d 121, 128-29 (2d Cir. 1993) (finding that, where city regulates car rental rates under "home-rule" authority, rather than pursuant to any clearly articulated state policy, such regulations are not protected by state action immunity).
141. Hallie, 471 U.S. at 46-47 (holding state supervision of municipal action unnecessary, because the danger that municipality will seek to further parochial public interests at the expense of overriding state goals is prevented by requirement that municipality act pursuant to "clearly articulated" state policy); see also Omega Homes Inc. v. City of Buffalo, 171 F.3d 755, 756 (2d Cir. 1999) (per curiam) (holding tht City of Buffalo's award of exclusive contract to two private contractors is immune from federal antitrust laws under state immunity doctrine, and that state legislature "contemplated the displacement of market forces" when delegating general authority to municipalities for urban renewal); Redwood Empire Life Support v. County of Sonoma, 190 F.3d 949, 954-55 (9th Cir. 1999) (finding Sonoma County's exclusive contract with emergency service provider protected from antitrust laws under state action immunity doctrine, and that statute authorizing exclusive contract made it foreseeable that other EMS providers would be excluded from emergency services market); Earles v. State Bd. of Certified Pub. Accountants of La., 139 F.3d 1033, 1041 (5th Cir. 1998) (holding that state governing board for CPAs was functionally similar to municipality, and was thus exempted from active-supervision prong of test for evaluating whether board was entitled to state action immunuty from antitrust liability); S. Disposal, Inc. v. Tex. Waste Mgmt., 161 F.3d 1259, 1263 (10th Cir. 1998) (holding that Solid Waste Management Act "clearly articulated and affirmatively expressed" state policy of allowing regulation instead of competition in area of waste disposal services).
142. 499 U.S. 365 (1991) (holding city council action restricting competition in local billboard business immune from federal antitrust laws, notwithstanding alleged conspiracy between city officials and billboard corporation).
143. Omni Outdoor Adver., 499 U.S. at 379 (holding state action defense applicable, despite proof of conspiracy between city officials and private actor, because the Act "condemns trade restraints, not political activity").
144. Id. (recognizing that any action qualifying as state action is ipso facto exempt from operation of antitrust laws, except possibly when state acts as a market participant); cf. Limeco, Inc. v. Div. of Lime of Miss. Dep't of Agric. & Commerce, 778 F.2d 1086, 1086-87 (5th Cir. 1985) (finding that the State of Mississippi's entry into private lime market was protected by state action immunity of Parker).
145. See Omni Outdoor Adver., 499 U.S. at 379 (holding that a state cannot "give immunity to those who violate the Sherman Act by authorizing them to violate it, or by declaring that their action is lawful" (quoting Parker v. Brown, 317 U.S. 341, 351 (1943))).
146. E. R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 137-38 (1961).
147. See id. at 137. ("To hold that the government retains the power to act in [a] representative capacity [on behalf of the people] and yet hold, at the same time, that the people cannot freely inform the government of their wishes, would impute to the Sherman Act a purpose to regulate, not business activity, but political activity." (citing Parker v. Brown, 317 U.S. 341, 351 (1943))). Both the Parker and Noerr-Pennington doctrines seek to protect the constitutional freedom to petition, and bar the Act's application to otherwise legally sanctioned or constitutionally protected conduct. See id. at 138.
148. See United Mine Workers of Am. v. Pennington, 381 U.S. 657, 670 (1965) (asserting that "a concerted effort to influence public officials regardless of intent or purpose," is immune from the Act); Noerr Motor Freight, 365 U.S. at 135 ("[N]o violation of the Act can be predicated upon mere attempts to influence the passage or enforcement of laws."); see also City of Columbia v. Omni Outdoor Adver. Inc., 499 U.S. 365, 379 (1991) (explaining that it would be inconsistent with the principles of a democracy to grant antitrust immunity to state actions while denying it to those petitioning the government to take such action).
149. The First Amendment guarantees the right to petition the government U.S. CONST. amend. I. Specifically, the Supreme Court has concluded that the Act should not disqualify people from taking a public position to inform and influence government as doing so would unduly restrict government action, and such a result would interfere with First Amendment rights. Cal. Motor Transp. Co. v. Trucking Unlimited, 404 U.S. 508, 510-11 (1972); cf. Davric Maine Corp. v. Rancourt 216 F.3d 143, 148 n.7 (1st Cir. 2000) (discussing but finding it unnecessary to determine whether the doctrine applies to state antitrust statutes as a "creature" of the First Amendment rather than an interpretation of the Sherman Act not applicable to state statutes because Maine's statute mirrored the federal statute).
150. E.g., Cal. Motor Transp., 404 U.S. at 510 (explaining that action predicated upon attempt to influence the legislative and executive branches is immune because government must remain free to act in a representative fashion, and because the freedom to petition is protected by the Bill of Rights). But see Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 501 (1988) (determining that private bodies that effectively dictate government policy cannot be viewed as quasi-legislative, and attempts to influence such bodies are therefore not entitled to Noerr-Pennington immunity).
151. E.g., Mariana v. Fisher, 338 F.3d 189, 199 (3d Cir. 2003) (holding Attorney General's actions in initiating lawsuit and lobbying for related legislation were petitioning activities protected from antitrust liability pursuant to the Noerr-Pennington doctrine).
152. Eg., Sanghvi v. City of Claremont 328 F.3d 532, 542 (9th Cir. 2003) (asserting city and local officials granted Noerr-Pennington immunity when petitioning to prevent expansion of Alzheimer's care faculty); A Fisherman's Best Inc. v. Recreational Fishing Alliance, 310 F.3d 183, 189 (4th Cir. 2002) (Recreational Fishing Alliance's solicitation of governmental action to keep long line fishing vessels from using the Maritime Center and to avoid additional fishing by out-of-state vessels off the coast of Charleston protected by Noerr-Pennington doctrine).
153. See Armstrong Surgical Qr., Inc. v. Armstrong County Mem'l Hosp., 185 F.3d 154, 158 (3d Cir. 1999) (finding no liability where all of plaintiff's injuries resulted from actions taken in accord with state regulation). Some circuits have held that certain agreements and combinations normally held to violate the Act such as price-fixing agreements and boycotts, are not immunized merely because their objective was the enactment of favorable legislation. E.g., Sandy River Nursing Care v. Aetna Cas., 985 F.2d 1138, 1143 (1st Cir. 1993) (holding Noerr-Pennington doctrine inapplicable when private actors impose a challenged restraint through a boycott or other traditionally unlawful economic measure, even where the purpose of the boycott is to instigate favorable government action).
154. See Bayou Fleet Inc. v. Alexander, 234 F.3d 852, 859 (5th Cir. 2000) (noting that Noerr-Pennington immunity "applies to any concerted effort to sway public officials, regardless of the private citizen's intent"); Armstrong Surgical Ctr., 185 F.3d at 162 (stating that remedy for bribery, fraud, or deceit lies with laws that forbid such conduct, and cannot be premised on the willingness of courts to look behind state action in the context of antitrust litigation); cf. In re Brand Name Prescription Drugs Antitrust Litig., 186 F.3d 781, 789 (7th Cir. 1999) (noting pharmaceutical industry action to oppose a price-control law, or propose an alternative law, would not have violated federal antitrust laws, although Noerr-Pennington immunity did not apply, because defendants took "anticompetitive action in advance of government's adopting the industry's anticompetitive proposal").
155. See E. R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 144 (1961) (explaining that a railroad was making a genuine effort to influence legislation and law enforcement and was not therefore, engaged in a mere sham petition aimed at interfering with the business relations of a competitor); see also Primetime 24 Joint Venture v. Nat'l Broad. Co., 219 F.3d 92, 100-01 (2d Cir. 2000) (discussing application of sham exception); Armstrong Surgical Ctr., 185 F.3d at 158 n.2 (same); cf. Prof. Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49, 62-63 (1993) (holding that, because Columbia Pictures had probable cause to sue for copyright infringement, its action was not a sham). The sham exception is also available for legitimate pre-litigation action. See McGuire Oil Co. v. Mapco, Inc., 958 F.2d 1552, 1558-60 (11th Cir. 1992) (holding that a petroleum wholesaler's pre-litigation threats of suit were immunized under the Noerr-Pennington doctrine as an attempt to litigate under Alabama law to prevent defendant's below-cost sales). But see Cardtoons L.C. v. Major League Players Ass'n, 208 F.3d 885, 893 (10th Cir. 2000) (holding that, because immunity is based on the right to petition, and because there was no actual petition to the government in this case, defendants were not entitled to immunity); In re Cardizem CD Antitrust Litig., 105 F. Supp. 2d 618, 640 (E.D. Mich. 2000) (rejecting Noerr-Pennington antitrust immunity for drug company which claimed that pre-litigation anticompetitive activity was "incidental" to a patent infringement litigation).
156. Noerr Motor Freight, 365 U.S. at 144. However, the Court has refused to recognize a "conspiracy" exception to the doctrine for liability for private citizens who conspire with elected officials to eliminate competition. See City of Columbia v. Omni Outdoor Adver. Inc., 499 U.S. 365, 383 (1991) (refusing to find a conspiracy exception and refusing to invalidate lobbying that produced a self-serving agreement with a public official).
157. 508 U.S. 49 (1993).
158. Id. at 63 (holding that because Columbia Pictures had probable cause to sue for copyright infringement, its action was not a sham); see also Bayou Fleet, Inc., 234 F.3d at 862 (deciding that, because defendant's lobbying activity achieved favorable results, it was, by definition, not objectively baseless for purposes of applicability of the sham exception); Cheminor Drugs Ltd. v. Ethyl Corp., 168 F.3d 119, 123 (3d Cir. 1999) (declining to carve out a new exception to Noerr-Pennington immunity based on misrepresentation, and ruling that, if the allegedly misrepresented facts do not infect the core of the claim and the government's resulting actions, the petition will receive Noerr-Pennington immunity); Kottle v. Northwest Kidney Ctrs., 146 F.3d 1056, 1060 (9th Cir. 1998) (explaining that Noerr-Pennington immunity does not extend to parties whose misrepresentations deprive the litigation of its legitimacy); cf. Baltimore Scrap Corp. v. David J. Joseph Co., 237 F.3d 394, 401-02 (4th Cir. 2001) (recognizing that the question whether a fraud exception to Noerr-Pennington immunity exists remains unresolved).
159. See Columbia Pictures Indus., Inc., 508 U.S. at 60-61 (explaining that the second prong probes subjective motivations, and focuses on whether the baseless lawsuit conceals "an attempt to interfere directly with the business relationships of a competitor"). The Court declined to reach the question of whether the governmental process was being used as an anticompetitive weapon, because the first prong of the test was not met. Id. at 65.
160. The statutes that govern a number of regulated industries provide either express or implied immunity from the antitrust laws. See, e.g., Capper-Volstead Act, 7 U.S.C. §§ 291-92 (2000) (granting limited immunity for joint marketing activities of agricultural cooperatives); Clayton Act, 15 U.S.C. § 17(6) (allowing general exemption for activities involving formation and operation of labor unions). But cf. Securities Exchange Act of 1934, 15 U.S.C. § 78a-ll (stating nothing about effects of antitrust laws on securities regulation).
161. See LAWRENCE ANTHONY SULLIVAN, HANDBOOK OF THE LAW OF ANTITRUST § 239 (1977): [i]t is important to recognize that there is no single conception which defines the scope of the exemption for a regulated industry. Although one can draw on case law from one industry for guidance as to outcome in another, there are, in a sense, as many sets of exemption doctrines as there are industries subject to state or federal regulation. Id.
162. See United States v. Bessemer & Lake Erie R. Co., 717 F.2d 593, 600 (D.C. Cir. 1983) (holding that the scope of immunity under Interstate Commerce Act, 49 U.S.C. § 10706(a)(5)(A), is restricted to "those actions actually taken 'in conformity with' the rate agreement and the terms and conditions laid down by the [Interstate Commerce Commission]").
163. See Pinney Dock & Transp. Co. v. Penn Cent. Corp., 838 F.2d 1445, 1458-59 (6th Cir. 1988) (noting in a transportation industry case that, "[s]o long as defendants stay within the framework of the rate agreement and conform their rates to those approved by the [Interstate Commerce] Commission, it cannot make a difference that their underlying intent may be anti-competitive").
164. United States v. Phila. Nat'l Bank, 374 U.S. 321, 350-51 (1963).
165. See Am. Agric. Movement, Inc. v. Bd. of Trade of City of Chi., 977 F.2d 1147, 1160-61 (7th Cir. 1992) (stating that a Commodities Futures Trading Commission regulation was not so pervasive as to immunize trading exchange activities), rev'd in part on other grounds sub nom. Sanner v. Bd. of Trade of City of Chi., 62 F.3d 918 (7th Cir. 1995) (finding trial court's dismissal of complaint on grounds of antitrust standing was premature).
166. 422 U.S. 694 (1975).
167. Id. at 721-22; see also In re Stock Exchs. Options Trading Antitrust Litig., 317 F.3d 134, 148 (2d Cir. 2003) (finding that the Exchange Act "impliedly repeals §1 of the Sherman Act with respect to the listing and trading of equity options, because the implied repeal is necessary to preserve the authority of the SEC to regulate that conduct"); Finnegan v. Campeau Corp., 915 F.2d 824, 829 (2d Cir. 1990) (asserting that antitrust laws are implicitly repealed insofar as they are inconsistent with securities regulations).
168. See also discussion infra Part IV.C. (discussing international enforcement).
169. Foreign Trade Antitrust Improvements Act of 1982, 15 U.S.C. § 6a (2000). The Act does not cover conduct in foreign trade or commerce - other than import trade or commerce - unless such conduct "has a direct, substantial and reasonably foreseeable effect" on domestic or import trade or on a person in the United States who is engaged in export trade. Id. The Foreign Trade Antitrust Improvements Act essentially immunizes American firms from antitrust liability for foreign activities that affect only foreign interests.
170. See United States v. Nippon Paper Indus. Co., Ltd. (Nippon II), 109 F.3d 1, 4 (1st Cir. 1997) (holding that the United States could institute criminal proceedings against a foreign company for solely extraterritorial conduct having a substantial effect on the United States market); see also Caribbean Broad. Sys., Ltd. v. Cable & Wireless PLC, 148 F.3d 1080, 1086-87 (D.C. Cir. 1998) (holding the Foreign Trade Antitrust Improvements Act applicable where a defendant's anticompetitive activities injured American companies by raising prices for advertising bought on foreign radio stations); United States v. Aluminum Co. of Am., 148 F.2d 416, 443-44 (2d Cir. 1945) (holding a Canadian corporation in violation of § 1 of the Act for an agreement to stay out of the United States market); Eskofot A/S v. E.I. Du Pont de Nemours & Co., 872 F. Supp. 81, 85 (S.D.N.Y. 1995) (reasoning that, because the Act continues to apply to import trade or commerce activities, a plaintiff need only allege actions having any anticompetitive effect on U.S. commerce, rather than direct substantial, and reasonably foreseeable effect required by Foreign Trade Antitrust Improvements Act). See also Turicentro, S.A. v. Am. Airlines Inc., 303 F.3d 293, 306-07 (3d Cir. 2002) (discussing other circuits' treatment of nature of injuries necessary to sustain a claim under Sherman Act).
171. See Nippon II, 109 F.3d at 8 (explaining that comity considerations did not excuse defendant's conspiracy and price-rigging in the United States, because the activity with which the defendants were charged was illegal in both the United States and Japan); see also Shell Offshore, Inc. v. Heeremac, 33 F. Supp. 2d 1111, 1113 (S.D. Tex. 1999) (explaining that, where two multinational companies disputed claims under an American statutory scheme, and nothing in the case put the United States and England at odds as sovereigns, comity considerations were irrelevant). Comity is "the recognition which one nation allows within its territory to the legislative, executive, or judicial acts of another nation, having due regard both to international duty and convenience, and to the rights of its own citizens, or of other persons who are under the protection of its laws." Hilton v. Guyot, 159 U.S. 113, 164 (1895). Much of the antitrust enforcement in the international sphere has discussed the issue of "positive comity": [u]nder [positive comity] agreements, the antitrust authority of one country makes a preliminary determination that there are reasonable grounds for an antitrust investigation, typically in a case in which a corporation based in that country appears to have been denied access to the markets of another country. It then refers the matter, along with the preliminary analysis, to the antitrust authority whose home markets are most directly affected by the matter under investigation. After consultation with the foreign antitrust authority, and depending on what conclusions the foreign authority reaches and what action it takes, the referring antitrust authority can accept the foreign authority's conclusions, seek to modify them, or pursue its own action. International Antitrust Enforcement: Hearings on S521-48 Before the Subcomm. on Antitrust, Business Rights, and Competition of the Senate Comm. on the Judiciary, 105th Cong. (1998) (statement of Joel I. Klein, Assistant Attorney General, Antitrust Division, U.S. Department of Justice) [hereinafter Klein Statement I].
172. The "foreign sovereign compulsion" defense protects private party actions taken within a foreign nation if the foreign government's laws legally compelled the party's actions. See Trugman-Nash Inc. v. New Zealand Dairy Bd., 954 F. Supp. 733, 736 (S.D.N.Y. 1997) (holding that an "actual and material" conflict between American and New Zealand law entitled defendants to invoke foreign sovereign compulsion immunity).
173. See Filetech S.A. v. France Telecom S.A., 157 F.3d 922, 932 (2d Cir. 1998) (discussing a stringent standard for successfully establishing immunity based on comity, and reversing dismissal of charges based on international comity grounds against an international company engaged in selling marketing lists).
174. Id. (quoting In re Maxwell Commc'ns Corp., 93 F.3d 1036, 1050 (2d Cir. 1996)).
175. 549 F.2d 597 (9th Cir. 1976). The Timberlane factors are: (i) the degree of conflict with foreign law or policy; (ii) the nationality or allegiance of the parties and their place of business; (iii) the likelihood that compliance could be achieved by enforcement in either state; (iv) the effects on the countries involved; (v) whether there was an explicit intention to harm United States commerce or the foreseeability of such effect; and (vi) where the conduct occurred. Id. at 614. In Trugman-Nash, the Southern District of New York relied heavily on these factors in dismissing a civil case on grounds of comity and foreign sovereign compulsion. 954 F. Supp. at 737. In that case, domestic importers of New Zealand cheeses brought suit against the New Zealand Dairy Board and two domestic holding companies, complaining of a price-fixing arrangement in violation of the Act. Id. at 736. The court found a "material conflict between American antitrust law and New Zealand law" sufficient to establish the defense. Id.
176. See Am. Rice, Inc. v. Ark. Rice Growers Coop. Ass'n, 701 F.2d 408, 413 (5th Cir. 1983) (listing factors relevant to exercise of extraterritorial jurisdiction, which include: "the citizenship of the defendant, the effect on United States commerce, and the existence of a conflict with foreign law.").
177. See Hartford Fire Ins. Co. v. California, 509 U.S. 764, 798-99 (1993) (declining to address the Timberlane factors where no conflict existed between American and British law). Hartford Fire involved a conspiracy by British insurers to effect the price of insurance policies in the United States; a majority of the Court concluded that the allegedly anticompetitive conduct sufficiently affected American commerce to warrant extraterritorial application of the Act. Id. at 770-74.
178. The Federal Trade Commission Act, 15 U.S.C. §§ 41-58 (2000) established the FTC and gave it broad powers to enforce the federal antitrust laws.
179. The statutes enforced by the Antitrust Division include: the Act, 15 U.S.C. §§ 1-7; Wilson Tariff Act, 15 U.S.C. §§ 8-11; Clayton Antitrust Act [includes the Robinson-Patman Act], 15 U.S.C. §§ 12-27; Expediting Acts, 15 U.S.C. § 29; Antitrust Civil Process Act, 15 U.S.C. §§ 1311-1314; and 28 U.S.C. § 1927 (outlining counsel's liability for excessive costs). See HERBERT HOVENKAMP, FEDERAL ANTITRUST POLICY, §§ 15.1, 15.2 (3d ed. 2005) [hereinafter HOVENKAMP] (discussing separate and overlapping areas of authority of the Division and the FTC);
180. see also ANTITRUST COUNSELING AND LITIGATION TECHNIQUES §§ 52-65 Julian O. Von Kalinowski, ed. (1997) (providing detailed step-by-step analysis of criminal antitrust litigation).
181. 15 U.S.C. § 1. Although § 3 of the Robinson-Patman Act also imposes criminal penalties for various violations of the price discrimination restrictions, prosecutions under this act are infrequent. See AREEDA & KAPLOW, supra note 7, at § 138(b) ("The fact is that novel interpretations or great departures have seldom, if ever, occurred in criminal cases, which prosecutors have usually reserved for defendants whose knowing behavior would generally be recognized as deserving of criminal sanctions.").
182. See DOJ ANTITRUST MANUAL, supra note 12; see also HOVENKAMP, supra note 171, § 15.1a., at 585; AREEDA & KAPLOW, supra note 7.
183. Only nine of the fifty-six corporate fines of $10 million or more have been sanctioned against domestic corporations. U.S DEP'T OF JUSTICE, ANTITRUST DIVISION SHERMAN ACT VIOLATIONS YIELDING A CORPORATE FINE OF $10 MILLION OR MORE, through Aug. 1, 2007, http://www.usdoj.gov/atr/public/criminal/225540.htm (last visited Jan. 22, 2008);
184. see also Thomas O. Barnett, Assistant Attorney General, Antitrust Division, DOJ, Global Antitrust Enforcement, Address at the Georgetown Law Global Antitrust Enforcement Symposium (Sept. 26, 2007), http://www.usdoj.gov/ atr/public/speeches/226334.htm (last visited Jan. 22, 2008) [hereinafter Barnett Address] (90 percent of the $1.9 billion in criminal fines imposed during the past five years has been from international activity);
185. U.S. DEP'T OF JUSTICE, ANTITRUST DIV., WORKLOAD STATISTICS, FY 1997-2006, http:// www.usdoj.gov/atr/public/workstats.htm (last visited Jan. 22, 2008) (providing statistical breakdown of cases pursued by the Division for fiscal years 1997 through 2006).
186. Without releasing the total amount of fines DOJ has accumulated to date from leniency program: The Antitrust Division's leniency program continues to be our greatest source of cartel evidence. The Antitrust Division has had great success combining vigorous criminal prosecution with our leniency program in order to increase the likelihood of cartel detection and prosecution. Barnett Address, supra note 174.
187. See ABA SECTION OF ANTITRUST LAW, 1998 ANNUAL REVIEW OF ANTITRUST LAW DEVELOPMENTS (1999) (describing Antitrust Division's revised leniency policy);
188. ABA SECTION OF ANTITRUST LAW, ANTITRUST LAW DEVELOPMENTS 750-51 (5th ed. 2002) (describing Antitrust Division's leniency policies for individuals and corporations);
189. see also Constance K. Robinson, Get-Out-of-Jail Free Cards: Amnesty Development in the United States & Current Issues, 8 SEDONA CONF. J. 29, 29-30 (Fall 2007) (discussing the evolution of the DOJ's amnesty program and issues of leniency).
190. See U.S. DEP'T OF JUSTICE, ANTITRUST DIV., CORPORATE LENIENCY POLICY (August 10, 1993) [hereinafter CORPORATE LENIENCY POLICY], http://www.usdoj.gov/atr/public/guidelines/0091.pdf (last visited Jan. 22, 2008);
191. see also Gary R. Spratling, The Corporate Leniency Policy: Answers to Recurring Questions, Address at ABA Antitrust Section 1998 Spring Meeting (April 1, 1998), http://www.usdoj.gov/atr/public/speeches/1626.htm (last visited Jan. 22, 2008) (explaining the Antitrust Division's rationale in revising its corporate leniency policy).
192. See CORPORATE LENIENCY POLICY, supra note 177;
193. see also Gary R. Spratling, Making Companies an Offer They Shouldn't Refuse: The Antitrust Division's Corporate Leniency Policy - An Update, Address Before the Bar Association of the District of Columbia's 35th Annual Symposium on Associations and Antitrust (Feb. 16, 1999) (discussing potential benefits to corporations that take advantage of the Division's
194. See R. Hewitt Pate, Acting Assistant Attorney General, Antitrust Division, U.S. Department of Justice, Anti-Cartel Enforcement, "The Core Antitrust Mission," May 16, 2003, http://www.usdoj.gov/atr/public/speeches/ 201199.pdf (last visited Jan. 22, 2008);
195. see also Glenn Harrison & Matthew Bell, Recent Enhancements in Antitrust Criminal Enforcement: Bigger Sticks and Sweet Carrots, 6 HOUS. BUS. & TAX L.J. 207, 215-17 (2006) (discussing the success of the Amnesty Program).
196. See Spratling, supra note 178, (explaining that, as a result of the Corporate Leniency Program, the Antitrust Division is likely to uncover a second separate conspiracy every time they open a cartel investigation). Currently, more than half of the cartel investigations presently being considered by grand juries were initiated as a result of leads generated during investigations of a completely separate market. Id.
197. Barnett Address, supra note 174 (describing the benefits of the Corporate Leniency Program).
198. See CORPORATE LENIENCY POLICY, supra note 177 (describing the Leniency Policy for Individuals, which grants leniency to individuals reporting illegal antitrust activity before an investigation has begun if three conditions are met: (i) at the time the individual comes forward to report the illegal activity, the Antitrust Division has not received information about the illegal activity being reported from any other source; (ii) the individual reports the wrongdoing with candor and completeness and provides full, continuing and complete cooperation throughout the Division's investigation; and (iii) the individual did not coerce another party to participate in the illegal activity and clearly was not the leader in, or originator of, the activity);
199. see also ABA SECTION OF ANTITRUST LAW, supra note 176, at 751-53 (discussing Corporate Leniency Policy).
200. United States v. Southwest Bus Sales, Inc., 20 F.3d 1449, 1451 (8th Cir. 1994) (finding mail fraud and bid rigging were offenses of "similar character"); see also United States v. Frost, 125 F.3d 346 (6th Cir. 1997) (holding other charges may be brought in addition to antitrust violation charges). See generally the MAIL AND WIRE FRAUD, OBSTRUCTION OF JUSTICE, and PERJURY articles in this issue.
201. 999 F.2d 194 (7th Cir. 1993).
202. Id. at 198-99 (finding that because the "mail fraud was directly related to [the] price fixing scheme, and was not a separate course of conduct," the sentence should be in accord with the underlying offense); see also Steven A. Steinbach & Regina G. Maloney, The Silver Lining for Defendants in Cases of Antitrust Sentencing, BUS. CRIMES BULL.: COMPLIANCE AND LITIG., Jan. 1996, at 4 (discussing Rubin).
203. See Robinson, supra note 176, at 29; see also Press Releases, U.S. Dep't of Justice, Antitrust Div., http://www.usdoj.gov/atr/ public/press_releases/2007/index07.htm (last visited Jan. 22, 2008) (offering updates covering the Antitrust Division's ongoing criminal antitrust prosecutions and convictions).
204. See Scott D. Hammond, Deputy Assistant Attorney General for Criminal Enforcement, Antitrust Division, U.S. Dep't of Justice, Recent Developments, Trends, and Milestones in the Antitrust Division's Criminal Enforcement Program, Address Before the ABA Section of Antitrust Law Cartel Enforcement Roundtable (Nov. 16, 2007), http://www.usdoj.gov/atr/public/ speeches/227740.pdf (last visited Jan. 22, 2008) [hereinafter Hammond, Recent Developments].
205. Id.
206. Id.
207. See infra Section V (discussing the increase in fines under the Sherman Act).
208. Hammond, Recent Developments, supra note 187.
209. U.S. DEP'T OF JUSTICE, ANTITRUST DIV., PROTOCOL FOR INCREASED STATE PROSECUTION OF CRIMINAL ANTITRUST OFFENSES [hereinafter STATE PROSECUTION PROTOCOL], http://www.usdoj.gov/atr/public/guidelines/ 0618.htm (last visited Jan. 22, 2008); see also 15 U.S.C. § 15(c) (2000) (authorizing state attorneys general to bring civil federal actions and injunctions on behalf of the citizens and economies of their states).
210. But see Richard A. Posner, Antitrust in the New Economy, 68 ANTITRUST L.J. 925, 940-42 (2001) (advocating stripping states of the authority to bring federal or state antitrust cases, except in those situations where a similarly situated private firm would be able to sue).
211. See AMERICAN BAR ASSOCIATION, STATE ANTITRUST PRACTICE AND STATUTES, at 1-22 (3d ed. 2004).
212. E.g., VA. CODE ANN. §§ 59.1-59.15 (2001) (describing appropriate penalties for particular situations).
213. Several state statutes also provide for forfeiture of a company's corporate charter or restrict a violator's right to do business in the state; however, these provisions are rarely applied. See WILLIAM T. LIFLAND, STATE ANTITRUST LAW, (2007) § 8.02[1].
214. E.g., MASS. GEN. LAWS, ch. 93, § 1 (1997) (requiring interpretation in conformity with federal laws).
215. See generally AMERICAN BAR ASSOCIATION, STATE ANTITRUST PRACTICE AND STATUTES, supra note 193, at 1-22 to 1-23.
216. Typically, these statutes do not require that the price discrimination substantially lessen competition (as required by the Robinson-Patman Act), instead endorsing liability for any lessening of competition. See id.
217. Id. at 1-23. Only Connecticut North Dakota, and Washington do not possess criminal jurisdiction for any antitrust violation. Id.
218. E.g., KY. REV. STAT. ANN. § 365.990(2) (West 2002).
219. E.g., COLO. REV. STAT. ANN. § 6-4-117(3) (West 2002).
220. E.g., MASS. GEN. LAWS ch. 93, § 12 (1997);
221. WASH. REV. CODE ANN. § 19.86.090 (West 2005).
222. E.g., ARIZ. REV. STAT. ANN. § 44-1408(B) (West 2004);
223. see also STATE ANTITRUST PRACTICE AND STATUTES, supra note 193, at 1-22 to 1-24.
224. See LIFLAND, supra note 194, § 8.02[1] at 8-6 (detailing illustrative fine schedules and describing relative leniency of state penalties). "There have been relatively few reported cases in which criminal penalties have been imposed by state courts under the state antitrust laws." Id. at 8-8.
225. See, e.g., MINN. STAT. § 325D.56 (1996) (seven years); NEV. REV. STAT. §§ 193.130, 598A.280 (1997) (classifying Chapter 598A violations as category D felonies carrying a maximum prison term penalty of four years);
226. N.M. STAT. ANN. § 57-1-6 (Michie 1995) (five years).
227. Eg., IOWA CODE ANN. § 551.4 (West 1997) (defining violation as serious misdemeanor carrying maximum prison term penalty of one year);
228. MD. CODE ANN., COM. LAW I § 11-212 (2000) (limiting prison penalties to one year or less);
229. WYO. STAT. ANN. § 40-4-104 (Michie 2003) (limiting prison penalties to one year or less).
230. See LIFLAND, supra note 194, § 8.01 at 8-4 (describing unusual and extreme penalties for antitrust violations and infrequency with which these penalties are imposed).
231. See STATE PROSECUTION PROTOCOL, supra note 192 ("The Department has developed a program for increased prosecution by State Attorneys General of some criminal antitrust matters that have been previously prosecuted by the United States. This protocol defines the circumstances where [the Antitrust Division] may transfer prosecutorial responsibility, including the relevant evidence, for certain antitrust offenses to State Attorneys General.").
232. See id. (discussing criteria to determine whether state prosecution is appropriate).
233. See, e.g., Hartford Fire Ins. v. California, 509 U.S. 764 (1993) (involving nineteen state attorney generals in coordinated action).
234. U.S. DEP'T OF JUSTICE, ANTITRUST DIV., PROTOCOL FOR COORDINATION IN MERGER INVESTIGATIONS BETWEEN THE FEDERAL ENFORCEMENT AGENCIES AND STATE ATTORNEYS GENERAL, http://www.usdoj.gov/atr/public/ guidelines/1773.htm (last visited Jan. 22, 2008).
235. 15 U.S.C. §§ 6201-6212 (2000). Under the Act, the Antitrust Division and the FTC are authorized to cooperate with foreign antitrust authorities to obtain investigative information. Such cooperation was previously impossible due to confidentiality provisions in the Antitrust Civil Process Act, the FTC Act, and grand jury secrecy rules. See generally Clinton Signs Bill to Help Enforcers Obtain Foreign-Located Antitrust Evidence, DAILY REPORT FOR EXECUTIVES (BNA) (NOV. 3, 1994) (announcing passage and outlining provisions of the Act).
236. See Hammond, Recent Developments, supra note 187.
237. Id.
238. Id.
239. Scott D. Hammond, Director of Crim. Enforcement Antitrust Div., U.S. Department of Justice, The Fly on the Wall Has Been Bugged - Catching an International Cartel in the Act, Address before the International Law Congress 2001 EU Competition Law (May 15, 2001), http://www.usdoj.gov/atr/public/ speeches/8280.pdf (last visited Jan. 22, 2008) [hereinafter Hammond Address].
240. Id.
241. Scott D. Hammond, Summary Overview of the Antitrust Division's Criminal Enforcement Program, Address at the New York Bar Association Annual Meeting (Jan. 23, 2003), http://www.usdoj.gov/atr/public/ speeches/200686.pdf (last visited Jan. 22, 2008).
242. Hammond, Recent Developments, supra note 187.
243. See Barnett Address, supra note 174 ("More than ninety percent of the $1.9 billion in criminal fines imposed in Antitrust Division cases during the past five years has been in connection with the prosecution of international cartel activity. Because of the international nature of many cartels - a typical international cartel consists of a U.S. company and three or four of its competitors that are market leaders in Europe, Asia and throughout the world - enforcement takes on a global dimension.").
244. See Press Release, Antitrust Div., U.S. Dep't of Justice, Court Accepts British Airways/Korean Air Lines Plea (Aug. 23, 2007), http://www.usdoj.gov/atr/public/press_releases/2007/225437.htm (last visited Jan. 22, 2008).
245. See Press Release, Antitrust Div., U.S. Dep't of Justice, British Airways Plc and Korean Airlines Co. Ltd. Agree to Plead and Pay Criminal Fines Totaling $600 Million For Fixing Prices on Passenger and Cargo Flights (Aug. 1, 2007), http://www.usdoj.gov/atr/public/press_releases/2007/224928.pdf (last visited Jan. 22, 2008).
246. See Hammond, Recent Developments, supra note 187.
247. Id.
248. Id. In pursuing the case against the original eight executives charged in the antitrust conspiracy, nationals of the United Kingdom, France, Italy, and Japan, the Division obtained cooperation from multiple foreign competition authorities. Press Release, Antitrust Div., U.S. Dep't of Justice, Eight Executives Arrested on Charges of Conspiring to Rig Bids, Fix Prices, and Allocate Markets for Sales of Marine Hose, http://www.usdoj.gov/opa/ pr/2007/May/07_at_322.html (last visited Jan. 22, 2008).
249. For example, in 1994, the Antitrust Division brought criminal charges against General Electric ("GE"), alleging that it conspired to fix the list prices of industrial diamonds with DeBeers Centenary Co. ("DeBeers"). United States v. Gen. Elec. Co., 869 F. Supp. 1285 (S.D. Ohio 1994). The government's case was "largely circumstantial due in part to [its] inability to obtain discovery abroad." William J. Baer, Pretrial Considerations in United States v. General Electric, Address at the ABA, Antitrust Section, Criminal Antitrust Law and Procedure Workshop (Feb. 23-24, 1995) (commenting on General Electric trial). The district court granted GE's motion for acquittal, finding that the government failed to establish the existence of a conspiracy. Gen. Elec. Co., 869 F. Supp. at 1301.
250. See Hammond, Recent Developments, supra note 187.
251. Id. In both situations, multiple agencies across countries coordinated to obtain and execute search warrants and conduct arrests. The Division also uses the resources of INTERPOL, border watches, and extradition. Id.
252. ICN, History, http://www.internationalcompetitionnetwork.org/index.php/ en/about-icn/history (last visited Jan. 22, 2008). The founding nations were Australia, Canada, European Union, France, Germany, Israel, Italy, Japan, Korea, Mexico, South Africa, United Kingdom, United States, and Zambia. Id.
253. ICN, About the ICN, http://www.internationalcompetitionnetwork.org/index. php/en/about-icn (last visited Jan. 22, 2008).
254. See Barnett Address, supra note 174.
255. See ICN, Operational Framework, adopted June 25, 2003 in Merida, Mexico, http://www.international-competitionnetwork.org/index.php/en/about-icn/ operational-framework (last visited Jan. 22, 2008).
256. See Deborah Platt Majoras, Deputy Assistant Attorney General Antitrust Div., Antitrust Going Global in the 21st Century, Address before the Federal Bar Association Corporate and Association Counsels Division and the American Corporation Counsel Association Northeast Ohio Chapter (Oct. 17, 2002) (discussing antitrust enforcement and the continued need for coordinated effort internationally), http://www.usdoj.gov/atr/public/ speeches/200418.pdf (last visited Jan. 22, 2008).
257. Id.
258. Press Release, ICN, Competition Authorities Agree to Develop Merger and Unilateral Conduct Guidance, Emphasize Co-operation, Outreach, Implementation (June 1, 2007), http://www.internationalcompetition-network.org/index.php/en/ newsroom/2007/06/1/28 (last visited Jan. 22, 2008).
259. Press Release, ICN, Fifth Annual International Competition Network Conference Sends Clear Signal to Step Up and Improve the International Fight Against Cartels (May 5, 2006), http://www.internationalcompetition-network.org/ index.php/en/newsroom/2006705/5/26 (last visited Jan. 22, 2008).
260. Press Release, ICN, New Merger Review Standards Issued by International Competition Network: Third Annual Conference Wraps Up With Focus on Cartels and Capacity Building (April 24, 2004), http://www.internationalcompetitionnetwork. org/index.php/en/newsroom/2004/04/22/7 (last visited Jan. 22, 2008).
261. 15 U.S.C. § 1 (2000, Supp. IV. 2004). Note that although the statute sets a ceiling on fines for each offense, convictions on multiple counts increase cumulative fines. See U.S. SENTENCING GUIDELINES MANUAL § 2R1.1(b) (2007) [hereinafter U.S.S.G. MANUAL];
262. Melanie Sabo, Congress Poised to Bolster Criminal Antitrust Penalties, THE ANTITRUST SOURCE, May, 2004, www.abanet.org/antitrust/at-source/04/05/sabo.pdf (last visited Jan. 22, 2008) (explaining that the motive for the amendment is Congress' intent to align penalties for antitrust violators with increase penalties available for securities fraud violations as a result of Sarbanes-Oxley).
263. See 18 U.S.C. § 3553(a); United States v. Booker, 543 U.S. 220 (2005).
264. See Booker, 543 U.S. at 245; see also Kimbrough v. United States, 2007 WL 4292040, at *10, (U.S. Dec. 10, 2007) ("[W]hile [the federal sentencing statute] still requires a court to give respectful consideration to the Guidelines, see Gall v. United States, 2007 WL 4292116 (U.S. Dec. 10, 2007), Booker 'permits the court to tailor the sentence in light of other statutory concerns as well.' Booker, 543 U.S. at 245-46.").
265. U.S.S.G. MANUAL § 2R1.1.
266. Id. § 2R1.1(a).
267. Id. § 2R1.1(b)(1). In addressing the scope of the "non-competitive bid" enhancement the Seventh Circuit ruled that it was applicable only in cases involving actual bid-rotation and not ordinary price-fixing. United States v. Heffernan, 43 F.3d 1144, 1149-50 (7th Cir. 1994). But see United States v. Romer, 148 F.3d 359, 371 (4th Cir. 1998) (declining to follow Heffernan distinction limiting section 2R1.1(b)(1) to bid-rotation cases).
268. There has been debate concerning how to calculate "the amount of commerce affected." Compare United States v. Hayter Oil Co., 51 F.3d 1265, 1273 (6th Cir. 1995) ("[T]he volume of commerce attributable to a particular defendant convicted of price-fixing includes all sales of the specific types of goods or services which were made by the defendant or his principal during the period of the conspiracy, without regard to whether individual sales were made at the target price."), with United States v. Andreas, 216 F.3d 645, 677 (7th Cir. 2000) (disagreeing with Hayter insofar as it implies that all sales during the time period of the price-fixing conspiracy should be counted for purposes of section 2R1.1 simply because they occurred during the period of the conspiracy).
269. U.S.S.G MANUAL § 2R1.1(b)(2) (providing increased adjustments to base offense level according to the volume of commerce involved).