Public-Private Divide in Parker State-Action Immunity

Posted by Social Science Research Network

Public-Private Divide in Parker State-Action Immunity

Sina Safvati Akin Gump Strauss Hauer & Feld, L.L.P.)

Abstract:      The US Supreme Court’s jurisprudence on Parker state-action immunity from federal antitrust laws has remained largely muddled since its inception. The Court recently attempted to bring clarity to the doctrine in North Carolina Board of Dental Examiners v. FTC, holding that state occupational licensing boards with a controlling number of active market participants are subject to the same active supervision requirement as private actors performing state governmental functions. Given that most state licensing boards are comprised of active market participants in the industry they are charged with regulating, state licensing boards can no longer assume they are immune from antitrust suits.

In response, states have been scrambling to reassess the composition and oversight of their regulatory bodies in order to reduce antitrust liability for board members. In addition, litigants are bringing more claims against these boards for alleged antitrust violations. Lower courts are left with the task of determining whether these boards are closer to private actors or to prototypical state agencies. For those boards classified as private, lower courts are left with the task of determining whether the regulatory regimes overseeing the boards’ anticompetitive conduct satisfy the active supervision requirement.

In light of these rapid developments, however, doctrinal confusion about Parker immunity persists. This confusion largely stems from the Court’s failure to formally adopt a rule of decision incorporating the two bedrock principles that have explained Parker immunity doctrine since its inception: financial disinterest and political accountability. In pursuit of bringing much-needed clarity to the doctrine, this Comment makes a descriptive case, inspired by Professor Einer Elhauge’s seminal article on Parker immunity, that Parker immunity jurisprudence has been shaped by inquiring into the functional purposes the public-private distinction serves in the context of delegating state power to municipalities, prototypical state agencies, and private entities. This Comment will argue that the U.S. Supreme Court should formally adopt a rule of decision inspired by the principles of financial disinterest and political accountability to govern Parker immunity doctrine. The Comment will lastly incorporate this rule of decision and square it directly with the Court’s recent opinion in North Carolina Board of Dental Examiners v. FTC.