Clear Inarticulation-State Action Antitrust Immunity and State Agencies: Neo Gen Screening, Inc. V. New England Newborn Screening Program

By Keppner, Shane L. | Brigham Young University Law Review, January 1, 2000 | Go to article overview

Clear Inarticulation-State Action Antitrust Immunity and State Agencies: Neo Gen Screening, Inc. V. New England Newborn Screening Program


Keppner, Shane L., Brigham Young University Law Review


I. INTRODUCTION

In Parker v. Brown,1 the Supreme Court held that states are immune from federal antitrust law for their actions as sovereigns. This has come to be known as the Parker Doctrine or the state action doctrine. In Parker, a raisin distributor, Porter Brown, challenged a 1940 California regulation that raised prices and restricted the supply of California raisins. The Court found that the Sherman Act contained neither a hint nor a suggestion of any intention "to restrain state action or official action directed by a state."2 Therefore, California's regulation of the raisin industry was immune from federal antitrust scrutiny. Because of this desire to defer to state sovereignty, states were found to be immune from federal antitrust actions.

Predictably, applying the state action doctrine can be confusing. As one court noted, "[O]f late, the state action doctrine has become a road well-traveled by the Court. Its signposts, however, remain less than clear."3 Unfortunately, the well-traveled road of the state action doctrine splits off into meandering paths that are not so welltraveled. The path of state action antitrust immunity for actions taken by state agencies is one of the more difficult paths to follow, and the signposts that do exist are often confusing. As state reliance on state agency decision making becomes more prevalent, establishing clear guidelines for applying state action immunity to state agencies becomes increasingly important.

The rules and requirements governing state action immunity are different according to the category in which an actor is placed. The Supreme Court has established three categories that are used to determine how state action immunity should be applied. The first category includes acts of the state acting as sovereign. The actions of the state legislature and state supreme court fit into this category4 and are considered ipso facto immune from antitrust laws.5 The second category includes acts taken by political subdivisions. The acts of municipalities have been placed in this category.6 Their actions are immune from antitrust liability only where a clearly articulated state policy authorizes their actions.7 The final category includes acts taken by private actors pursuant to state regulations.8 Private actors are immune under the state action doctrine only when they act pursuant to a clearly articulated state policy and the state actively supervises the anticompetitive conduct.9

The Supreme Court has not clearly explained how to categorize actions taken by a state agency. Consequently, lower courtsparticularly the United States Courts of Appeals-have attempted to decide the issue without guidance and, not surprisingly, have arrived at different conclusions. In Neo Gen Screening, Inc. v. New England Newborn Screening Program,10 the First Circuit held that the actions of state executive agencies should be viewed as the actions of the state acting as a sovereign, thereby treating state agencies like state legislatures and state supreme courts and rendering state agencies immune from antitrust liability.11 In contrast, the Sixth and Second Circuits have applied the clear articulation requirement to state agency action, determining that the actions of state agencies should be placed in the same category as actions taken by municipalities or political subdivisions.12

This Note will argue that the First Circuit correctly determined state agencies' actions to be the actions of the state acting as a sovereign and that the actions of state agencies should not be subject to the clear articulation requirement. The clear articulation requirement should not be used because it burdens state agencies by making regulation more difficult, costly, and time consuming. Under the clear articulation requirement, when deciding whether antitrust immunity can be granted to state agencies, courts must search for a statutory provision plainly showing that "the legislature contemplated the kind of action complained of. …

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