State Antitrust Enforcement: Its’ Evolution and Future Direction

• Author: Alan D. Maness
• DOI: 10.1177/0003603X8202700403
• Published date: 01 December 1982
• Date: 01 December 1982
• Subject Matter: Article

The Antitrust Bulletin/Winter 1982

State antitrust enforcement:

its' evolution and future direction

BY

ALAN

D. MANESS*

821

State antitrust enforcement went through several dramatic changes

from

1974 to 1982. This article charts its growth and decline during

this period by measuring the number

of

actions filed by state antitrust

programs, their funding and staffing. These measures indicate that

state antitrust activity rapidly increasedfrom 1974 to 1980 but has

declined during the eighties because state antitrust programs lost

federal funding and political support. This article also considers the

changing focus

of

state antitrust enforcement by examining the type

of

defendant and substantive violation prosecuted, client represented, and

relief sought in state antitrust actions. This examination shows that

state antitrust enforcement shifted

from

multidistrict, treble damage

suits against large, out-of-state enterprises to actions against small,

in-state businesses.

To explain the political and fiscal forces that have shaped state

antitrust enforcement, this article compares antitrust enforcement in

states with appointed attorneys general to that in states with elected

ones, and among states with different funding sources

for

their

programs. Based on these comparisons, it is argued that state

attorneys general can overcome state antitrust's present political and

fiscal crisis by bringing more consumer damage (parens patriae) suits

and using revolving funds to finance enforcement.

•Attorney, U.S. Department

of

Justice, Antitrust Division, Washing-

ton,

D.C.

©1983 by Federal Legal Publications. Inc.

822 The antitrust bulletin

It is argued that state antitrust programs will make their greatest

contribution to society by maximizing consumer welfare. They can do

this by bringing actions against local price-fixers and bid-riggers,

policing anticompetitive state regulation, and educating small

businessmen and consumers about antitrust.

This article offers suggestions

for

ensuring the long-term fiscal

stability

of

state antitrust, including cooperative efforts designed to

increase enforcement efficiency and modifications in revolving funds.

The article concludes with the observation that state antitrust

programs have provided a unique brand

of

locally oriented

enforcement and this contribution will be lost unless state attorneys

general act to achieve political and fiscal stability

for

these programs.

Introduction

In 1978 most observers

of

state antitrust enforcement agreed that

state antitrust programs had undergone a "revival,'" and that

antitrust enforcement was "good politics" at the state level.2In

the four years since these optimistic observations, however, there

has been a change in the political climate surrounding state

antitrust programs, and federal grants-in-aid to these programs

have been eliminated. These political and fiscal problems have

raised doubts about the continued vitality

of

state antitrust

enforcement.3

Project, Reviving State Antitrust Enforcement; The Problems

With Putting New Wine in Old Wine Skins, 4J. CORP. LAW 547, 549

(1979).

2Miles, Current Trends in State Antitrust Enforcement, 47

A.B.A.

ANTITRUST L. J. 1343, 1345 (1979).

[1980] ANTITRUST &TRADE

REG.

REP.

(BNA)

No.

967,

at

0-7

(June

5, 1980).

State antitrust 823

Part

One

of

this article considers the evolution

of

state

antitrust enforcement from 1974 to 1982 and the forces which

shaped it during this period." As a preliminary matter, variations

in the level

of

state antitrust enforcement during this period are

measured by comparing the total staffing and funding for the

state antitrust programs and the number

of

actions filed by these

programs.

It

is argued that the increase in state antitrust enforce-

ment during the seventies can be explained by a favorable

political climate and a concomitant increase in fiscal support for

this enforcement, and its decline during the eighties is the result

of

funding cutbacks and a loss

of

political support.

Part

One examines the changing focus

of

state antitrust

enforcement during the period under consideration by making a

year-by-year comparison

of

the type of defendant and substantive

violation prosecuted, client represented, and relief sought in state

antitrust actions. Astate-to-state comparison

of

state antitrust

enforcement follows the year-by-year comparison. The enforce-

ment patterns in states that have different sources

of

funding-

federal grants, state appropriations, or revolving funds'

-and

that use different methods to select their attorneys

general-elec-

tion or

appointment-are

compared.

Part

One

of

the article concludes with a discussion

of

the

forces that have shaped state antitrust and the methods for

controlling the effects

of

these forces. The information furnished

4

The

information for this article was taken from two sets

of

reports by the National Association

of

Attorneys General (NAAG) on

state antitrust, the Antitrust Bulletin (unpublished) [hereinafter cited as

NAAG At. Buli.] that covers state antitrust developments from April

1974 to March 1980, and the

ANTITRUST

REPORT

[hereinafter cited as

NAAG

AT.

REP.]

that covers state antitrust from December 1980 to the

present.

5In a jurisdiction with a revolving fund, apart

of

the recoveries

generated in an antitrust action are credited to an account from which

expenses for future enforcement will be paid. National Association

of

Attorneys General, Committee on the Office

of

Attorney General,

Antitrust Revolving Funds (Mar. 1978) (unpublished) [hereinafter cited

as NAAG-COAG At. Rev. Funds (Mar. 1978)].