Chapter III. Public Policy Rationales Underlying the Doctrine

• Pages: 35-45

35

CHAPTER III

PUBLIC POLICY RATIONALES

UNDERLYING THE DOCTRINE

As reflected in the Supreme Court’s decisions, the rationale for the

state action doctrine appears to be rooted in considerations of federalism

and state sovereignty—that is, that Congress did not intend to restrain

certain state regulatory activities in passing the Sherman Act.1

Federalism has been defined as “the assignment of dual responsibilities

for governing to lower and higher levels of government.”2 The goal of

federalism “is a system in which there is sensitivity to the legitimate

interests of both State and National Governments, and in which the

National Government, anxious though it may be to vindicate and protect

federal rights and federal interests, always endeavors to do so in ways

that will not unduly interfere with the legitimate activities of the States.”3

Some, however, have argued that the concept of federalism does not

adequately—or even accurately—describe the policy rationale for the

1. “This refrain runs through Supreme Court jurisprudence up through its

most recent state action opinion.” FTC STAFF, REPORT OF THE STATE

ACTION TASK FORCE 5 (2003) [hereinafter FTC STATE ACTION REPORT];

see also, e.g., FTC v. Ticor Title Ins. Co, 504 U.S. 621, 633 (1992) (“Our

decision [in Parker] was grounded in principles of federalism.”); City of

Columbia v. Omni Outdoor Adver., 499 U.S. 365, 372 (1991) (“[I]n order

to prevent Parker from undermining the very interests of federalism it is

designed to protect, it is necessary to adopt a concept of authority broader

than what is applied to determine the legality of the mun icipality’s action

under state law.”); Town of Hallie v. City of Eau Claire, 471 U.S. 34, 38

(1985) (“In Parker, relying on principles of federalism and state

sovereignty, the Court refused to construe the Sherman Act as applying to

the anticompetitive conduct of a State acting through its legislature.”).

2. Robert P. Inman & Daniel L. Rubinfeld, Making Sense of the Antitrust

State Action Doctrine: Balancing Political Participation and Economic

Efficiency in Regulatory Federalism, 75 TEX. L. REV. 1203, 1204 (1997).

3. Younger v. Harris, 401 U.S. 37, 44 (1971).