Discovery and Expert Testimony

• Pages: 189-206

CHAPTER VIII

DISCOVERY AND EXPERT TESTIMONY

Although courts have concluded that the application of the state

action doctrine is a “question of law,”1 predicate factual issues may have

to be determined before the court can rule on the defense. Those issues

may, in turn, require at least some discovery. State action discovery may

be relevant to or calculated to lead to the discovery of admissible

evidence concerning, (1) whether the challenged restraint is “‘one clearly

articulated and affirmatively expressed as state policy’” and (2) whether

that policy is “‘actively supervised’ by the State itself.”2 The limited

nature of these two tests might limit the scope of admissible evidence.

The first prong of the state action doctrine—whether the state policy

is clearly articulated and affirmatively expressed as state policy—rarely,

if ever, presents factual issues requiring discovery. The inquiry is an

objective one “for the fundamental reason that the subjective motivation

of public decision makers is irrelevant to state antitrust immunity

analysis.”3 The irrelevance of the motivation of state actors is a necessary

consequence of the doctrinal underpinning of the doctrine:

1. See, e.g., Andrx Pharms., Inc. v. Elan Corp., 421 F.3d 1227, 1232 (11th

Cir. 2005); Telecor Commc’ns, Inc. v. Southwestern Bell Tel. Co., 305

F.3d 1124, 1139 (10th Cir. 2002); North Star Steel Co. v. MidAmerican

Energy Holdings Co., 184 F.3d 732, 738 (8th Cir. 1999); Yeager’s Fuel v.

Pa. Power & Light Co., 22 F.3d 1260, 1265 (3d Cir. 1994); Berger v.

Cuyahoga Cnty. Bar Ass’n, 983 F.2d 718, 721 (6th Cir. 1993); Grason

Elec. Co. v. Sacramento Mun. Util. Dist., 770 F.2d 833, 835 (9th Cir.

1985).

2. Cal. Retail Liquor Dealers Ass’n v. Midcal Aluminum, 445 U.S. 97, 105

(1980) (quoting City of Lafayette v. La. Power & Light Co., 435 U.S. 389,

410 (1978)).

3. Hancock Indus. v. Schaeffer, 811 F.2d 225, 234 (3d Cir. 1987) (citing

Hoover v. Ronwin, 466 U.S. 558, 581 n.34 (1984)); see also Buckley

Const., Inc. v. Shawnee Civic & Cultural Dev. Auth., 933 F.2d 853, 856

(10th Cir. 1991); Llewellyn v. Crothers, 765 F.2d 769, 774 (9th Cir. 1985).

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190 State Action Practice Manual

Parker was not written in ignorance of the reality that determination of

“the public interest” in the manifold areas of gover nment regulation

entails not merely economic and mathematical analysis but value

judgment, and it was not meant to shift that judgment from elected

officials to judges and juries.4

Thus, as the Supreme Court stated in City of Columbia, “if the courts

were to apply a subjective test: not whether the action was in the public

interest, but whether the officials involved thought it to be so . . . [t]his

would require the sort of deconstruction of the governmental process and

probing of the official ‘intent’ that we have consistently sought to

avoid.”5 This is consistent with the principle the Court has stated

repeatedly outside the antitrust arena: “it [is] not consonant with our

scheme of government for a court to inquire into the motives of

legislators.”6

In analyzing whether the first prong of the state action defense has

been established, courts limit themselves to the usual sources for

determining the intent of government legislators and officials, including

statutes, rules, regulations, legislative history, court decisions, and

administrative rulings and pronouncements.7 However, there is a general

view, not tied to antitrust, that it is inappropriate to consider statements

4. City of Columbia v. Omni Outdoor Adver., 499 U.S. 365, 377 (1991).

5. Id.

6. Tenney v. Brand hove, 341 U.S. 367, 377 (1951) (citing Fletcher v. Peck,

10 U.S. (6 Cranch) 87, 130-31 (1810)).

7. See, e.g., First Am. Title Co. v. Devaugh, 480 F.3d 438, 447 (6th Cir. 2007)

(state statute and “obvious and uncontested realities” of which legislature

was aware when enacti ng statute); Telecor Commc’ns, Inc. v. Southwestern

Bell Tel. Co., 305 F.3d 1124, 1149 (10th Cir. 2002) (state constitution,

statutes, and case law); Electrical Inspectors, Inc. v. Vill. o f East Hills, 320

F.3d 110, 120-21 (2d Cir. 2002) (state statute and regulations pr omulgated

thereunder); Columbia Steel Casting Co. v. Portland Gen. Elec. Co., 111

F.3d 1427, 1437-38 (9th Cir. 1997) (relying on state statutes and public

orders of public utility commission); TEC Cogenera tion v. Fla. Power &

Light Co., 76 F.3d 1560, 1568 (11th Cir.), modified on reh’g, 86 F.3d 1028

(11th Cir. 1996) (state statutes and regulatory rules, agency proceedings

and orders, and Florida Supreme Court case law); Praxair, Inc. v. Fla.

Power & Light Co., 64 F.3d 609, 611-12 (11th Cir. 1995) (state statutes,

case law, and regulatory provisions); Hardy v. City Optical, 39 F.3d 765

(7th Cir. 1994) (state statute and regulatio n); Yeager’s Fuel v. Pa. Power &

Light Co., 22 F.3d 1260, 1266-70 (3d Cir. 1994) (statutes, state

administrative rules, and public utility commission repo rts, rulings, and

public statements).