Antitrust Immunities and Defenses

• Pages: 45-58

45

CHAPTER III

ANTITRUST IMMUNITIES AND DEFENSES

As both the electric and gas industries have moved from a regulated

to a partially deregulated environment, firms in these industries have had

to adjust their business activities to take into account applicable federal

and state antitrust laws. This adjustment requires consideration of both

the potential sources of antitrust liability, and the defenses and

immunities that are available to rebut antitrust claims.

Firms operating in regulated industries are accustomed to avoiding

antitrust liability under the Sherman and Clayton Acts because of the

existence of certain i mmunities. However, the same behavior that might

be protected or even encouraged when done in a regulated environment

could lead to antitrust exposure when pursued in an unregulated

environment. As deregulation progresses at different paces in different

areas of the country, the nature and scope of remaining immunity could

differ.

When private parties make decisions, the risk of antitrust liability is

far greater than when regulators make the decisions. This, of course, is

not to say that there is no antitrust risk when regulators are involved, as

numerous cases attest. It is only a reminder that risk comes in degrees,

and the degree of risk for antitrust liability is rising sharply with

deregulation of the energy markets.

A. State Action Immunity

The state action doctrine exempts certain conduct from the antitrust

laws because of a decision by a state to displace competition with

regulation. In California Retail Liquor Dealers Ass’n v. Midcal

Aluminum, Inc.,

1

the Supreme Court established a two-prong test for

determining when the doctrine applies: the state must (1) clearly

articulate its intention of displacing competition and (2) actively

supervise the conduct in question.

2

1. 445 U.S. 97 (1980).

2. Id. at 105-06.