Search Site
Menu
The Federal Antitrust Law Exemption for State Action

Federal antitrust laws are considered inapplicable to economic regulation by the States. In Parker v. Brown, 317 U.S. 341 (1943), the Supreme Court reasoned that in the “dual system of government” of the United States, any subtraction by Congress from the sovereign powers of the states must be explicitly stated. Nothing in the Sherman Act (the first federal antitrust law) or in the legislative history of the Sherman Act indicated a Congressional intent to subject state regulatory activities to the Sherman Act.

Federal antitrust laws, thus, are directed at private conduct generally rather than state conduct, and state action in effect is exempted from federal antitrust law. To the extent that anticompetitive conduct can be shown to be the result of state activity, federal antitrust laws will be considered inapplicable.

The state action doctrine has provided the basis for rulings that various types of conduct were permissible under federal antitrust laws due to state involvement. For example, bar association conduct regarding lawyers has been considered exempt state action due to the bar’s function in enforcing rules of the state’s Supreme Court. Awards of exclusive state contracts have been considered exempt from application of federal antitrust laws despite the anticompetitive effect of such awards.

The state action doctrine has limits. Thus, actions of a municipality may not be considered exempt from application of federal antitrust laws unless the actions can be tied to requirements or policies of the state or its agencies. Before anticompetitive actions of a municipality or other entity may be deemed exempt under the state action doctrine from federal antitrust law, it must be shown that the actions were taken pursuant to a clearly expressed state policy. For example, a general grant of home rule to a local government has been considered insufficient to shield the local government’s actions from application of federal antitrust law.

Specificity in a state’s policy to displace competition is required to shield activities from federal antitrust law under the state action doctrine. If there is such specificity, then even private anticompetitive activity may be permissible under the state action doctrine if it is shown that the activity was pursuant to a clearly announced state policy and was actively supervised by the state.

Copyright 2012 LexisNexis, a division of Reed Elsevier Inc.

Contact a Dedicated Texas Business Lawyer To Schedule a Consultation
Call 281-367-1222 or contact us online to schedule a meeting.

Strong In Action

  • Spring 2019

    The Strong Firm represents borrower in $42.3 million HUD construction loan for multifamily real estate development in Walton County, Florida.

    Read More
  • Spring 2019

    The Strong Firm acts as legal counsel for borrower in $32.1 million HUD construction loan for multifamily real estate development in Conroe, Texas.

    Read More
  • Spring 2019

    The Strong Firm aids borrower in $31.7 million HUD construction loan for multifamily real estate development in Nueces County, Texas.

    Read More
  • Spring 2019

    The Strong Firm represents borrower in the refinancing of a $3.57 million commercial mortgage-backed security for a commercial office facility in Montgomery County, Texas.

    Read More
  1. 1
  2. 2
  3. 3
  4. 4
  5. 5
  • Peer Rated 2019 Award

Recent Blog Posts

Legislation Authorizes Paid Sick Leave for Workers Suffering from Coronavirus

New legislation passed in response to the COVID-19 pandemic allows certain workers to receive paid sick leave even if their employer previously did not provide it. In March, the federal government enacted the Families First Coronavirus Response Act (FFCRA). This law assists employers that give their employees paid time off
Read More
Legislation Authorizes Paid Sick Leave for Workers Suffering from Coronavirus

Lenders Suspend Home Foreclosures Due to COVID-19, But What Happens Next?

Many large financial institutions are suspending foreclosures because of the massive economic damage caused by COVID-19. Some banks have stopped proceedings indefinitely. Others have set time limits for foreclosure suspensions such as 60 or 90 days. Even as health and financial issues remain uncertain, this is a good time for
Read More
Lenders Suspend Home Foreclosures Due to COVID-19, But What Happens Next?

How Can I Create Estate Planning Documents During the Pandemic?

Even in its first few weeks, the COVID-19 pandemic caused many people to examine or reassess what is most important to them. The need to prepare in case of an emergency or untimely death has been highlighted by the tragic losses occurring around the country. What can you do if
Read More
How Can I Create Estate Planning Documents During the Pandemic?

Complying with Corporate Annual Meeting Requirements during the COVID-19 Quarantine

How do you hold a corporate annual meeting when the entire country is in lockdown? On the surface, it might seem like a simple matter of using a favorite video conferencing tool and perhaps checking to see if it’s been hacked. Annual meetings for corporations are more than get-togethers. They
Read More
Complying with Corporate Annual Meeting Requirements during the COVID-19 Quarantine
  • Video Vault


    Watch videos done by our legal team to gain a better understanding of your legal needs. Our lawyers give video insight into areas such as Real Estate, Business Law, Mergers & Acquisitions and much more.

Pay Retainer Online

Use our easy-to-use and secure online payment feature.
We accept all major credit cards.

Pay Your Retainer

Contact us

Quick Contact Form