{"id":29209,"date":"2021-12-18T22:18:01","date_gmt":"2021-12-18T22:18:01","guid":{"rendered":"https:\/\/www.markhamlawfirm.com\/mystaging\/?page_id=29209"},"modified":"2025-03-29T02:38:08","modified_gmt":"2025-03-29T09:38:08","slug":"antitrust-exemptions-and-immunities-by-william-markham-2021","status":"publish","type":"page","link":"https:\/\/www.markhamlawfirm.com\/mystaging\/law-articles\/antitrust-exemptions-and-immunities-by-william-markham-2021\/","title":{"rendered":"Antitrust Exemptions and Immunities"},"content":{"rendered":"<p>[et_pb_section fb_built=&#8221;1&#8243; custom_padding_last_edited=&#8221;on|desktop&#8221; admin_label=&#8221;Top Image and Title Section&#8221; module_class=&#8221;inner-banner-sec&#8221; _builder_version=&#8221;4.27.4&#8243; background_image=&#8221;https:\/\/www.markhamlawfirm.com\/mystaging\/wp-content\/uploads\/2022\/02\/court-header-2.jpg&#8221; custom_padding=&#8221;120px||20px||false|false&#8221; custom_padding_tablet=&#8221;80px||20px||false|false&#8221; custom_padding_phone=&#8221;50px||||false|false&#8221; background_last_edited=&#8221;on|phone&#8221; locked=&#8221;off&#8221; collapsed=&#8221;off&#8221; global_colors_info=&#8221;{}&#8221;][et_pb_row module_class=&#8221;pstatic&#8221; _builder_version=&#8221;4.27.0&#8243; custom_padding=&#8221;||||false|false&#8221; global_colors_info=&#8221;{}&#8221;][et_pb_column type=&#8221;4_4&#8243; module_class=&#8221;pstatic&#8221; _builder_version=&#8221;4.16&#8243; global_colors_info=&#8221;{}&#8221;][et_pb_text admin_label=&#8221;Title&#8221; module_class=&#8221;leftborder&#8221; _builder_version=&#8221;4.27.4&#8243; text_font=&#8221;|900|||||||&#8221; text_text_color=&#8221;#ffffff&#8221; text_font_size=&#8221;29px&#8221; text_line_height=&#8221;1.1em&#8221; header_font=&#8221;|700||on|||||&#8221; header_text_align=&#8221;left&#8221; header_text_color=&#8221;#303030&#8243; header_font_size=&#8221;40px&#8221; header_line_height=&#8221;1.3em&#8221; header_2_font=&#8221;|700|||||||&#8221; header_2_text_align=&#8221;left&#8221; 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header_line_height_phone=&#8221;1.3em&#8221; header_line_height_last_edited=&#8221;on|desktop&#8221; header_2_text_align_tablet=&#8221;left&#8221; header_2_text_align_phone=&#8221;left&#8221; header_2_text_align_last_edited=&#8221;on|phone&#8221; header_2_font_size_tablet=&#8221;32px&#8221; header_2_font_size_phone=&#8221;24px&#8221; header_2_font_size_last_edited=&#8221;on|phone&#8221; header_3_font_size_tablet=&#8221;&#8221; header_3_font_size_phone=&#8221;21px&#8221; header_3_font_size_last_edited=&#8221;on|phone&#8221; text_orientation_tablet=&#8221;&#8221; text_orientation_phone=&#8221;&#8221; text_orientation_last_edited=&#8221;on|phone&#8221; header_2_text_shadow_style=&#8221;preset1&#8243; header_2_text_shadow_horizontal_length=&#8221;2px&#8221; header_2_text_shadow_vertical_length=&#8221;2px&#8221; header_2_text_shadow_blur_strength=&#8221;2px&#8221; header_2_text_shadow_color=&#8221;#303030&#8243; global_colors_info=&#8221;{}&#8221; custom_css_main_element_last_edited=&#8221;on|desktop&#8221; sticky_enabled=&#8221;0&#8243;]<\/p>\n<h1>\u201cAntitrust Exemptions and Immunities\u201d\u00a0<br \/>(By William Markham, \u00a92021)<\/h1>\n<p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=&#8221;1&#8243; admin_label=&#8221;Dynamic TOC Sidebar + Content&#8221; module_class=&#8221;content-sidebar-sec&#8221; _builder_version=&#8221;4.27.4&#8243; _module_preset=&#8221;default&#8221; custom_padding=&#8221;40px||60px||false|false&#8221; locked=&#8221;off&#8221; collapsed=&#8221;on&#8221; global_colors_info=&#8221;{}&#8221;][et_pb_row column_structure=&#8221;1_4,3_4&#8243; make_equal=&#8221;on&#8221; admin_label=&#8221;Dynamic TOC Sidebar + Main Text Part 2&#8243; _builder_version=&#8221;4.27.4&#8243; _module_preset=&#8221;default&#8221; custom_padding=&#8221;0px||0px||false|false&#8221; locked=&#8221;off&#8221; collapsed=&#8221;on&#8221; global_colors_info=&#8221;{}&#8221;][et_pb_column type=&#8221;1_4&#8243; module_class=&#8221;sidebar-col&#8221; _builder_version=&#8221;4.27.4&#8243; _module_preset=&#8221;default&#8221; global_colors_info=&#8221;{}&#8221;][et_pb_code admin_label=&#8221;Dynamic TOC Sidebar&#8221; _builder_version=&#8221;4.27.4&#8243; _module_preset=&#8221;default&#8221; global_colors_info=&#8221;{}&#8221;]<\/p>\n<div class=\"sidebar-wrap\"><\/div>\n<p>[\/et_pb_code][\/et_pb_column][et_pb_column type=&#8221;3_4&#8243; module_class=&#8221;sidebar-content-col&#8221; _builder_version=&#8221;4.27.4&#8243; _module_preset=&#8221;default&#8221; global_colors_info=&#8221;{}&#8221;][et_pb_text admin_label=&#8221;Main Text, Part II&#8221; _builder_version=&#8221;4.27.4&#8243; _module_preset=&#8221;default&#8221; text_font=&#8221;||||||||&#8221; text_text_color=&#8221;#000000&#8243; text_font_size=&#8221;18px&#8221; header_2_font=&#8221;|700|||||||&#8221; header_2_text_align=&#8221;left&#8221; header_2_text_color=&#8221;#000000&#8243; header_2_line_height=&#8221;1.2em&#8221; header_3_font=&#8221;|700||on|||||&#8221; header_3_text_color=&#8221;#000000&#8243; header_3_font_size=&#8221;30px&#8221; header_2_text_align_tablet=&#8221;left&#8221; header_2_text_align_phone=&#8221;left&#8221; header_2_text_align_last_edited=&#8221;on|desktop&#8221; header_2_font_size_tablet=&#8221;&#8221; header_2_font_size_phone=&#8221;27px&#8221; header_2_font_size_last_edited=&#8221;on|desktop&#8221; text_orientation_tablet=&#8221;&#8221; text_orientation_phone=&#8221;&#8221; text_orientation_last_edited=&#8221;on|desktop&#8221; global_colors_info=&#8221;{}&#8221;]<\/p>\n<h2 id=\"1\">Introduction<\/h2>\n<p>Over the years, Congress and the federal courts have established various immunities from federal antitrust law, removing from its reach specified commercial activities and even entire lines of commerce. Below I examine each of the antitrust immunities, describing its scope, underlying rationale, and intended purpose, and also noting any exceptions and qualifications that limit its applicability. For each immunity, I have also provided citations to the controlling statutory and case-law authorities as well as parenthetical quotations from them. I urge my readers to read the parenthetical quotations, since there is no better way to understand any law or doctrine than to read the original texts.<\/p>\n<p>No unifying principle can explain or anticipate which activities are exempt or immune from federal antitrust law, but most antitrust immunities exist to reconcile inconsistencies between federal antitrust law and some other law, such as the United States Constitution, a federal regulatory scheme, a state regulatory scheme, or the laws of a foreign government. Indeed, I can think of only one antitrust immunity that lies outside this rule &#8212; the blanket immunity afforded &#8220;the business of baseball&#8221; by Justice Holmes in a Supreme Court decision rendered in 1922.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_1');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_1');\" ><span id=\"footnote_plugin_tooltip_29209_1_1\" class=\"footnote_plugin_tooltip_text\">[1]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_1\" class=\"footnote_tooltip\">Justice Holmes&#8217; stated ground was that baseball was not &#8220;interstate commerce&#8221; of the kind that Congress was empowered to regulate by the U.S. Constitution&#8217;s Commerce Clause,&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_1');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_1').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_1', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>Since antitrust immunities largely serve to reconcile conflicting laws, and otherwise lack a unifying principle, I have organized my presentation of them below according to which kinds of laws they reconcile. That approach has helped me in the past to understand them better and to argue their merits in different cases with a larger view of the underlying purposes that justify them in the first place.<\/p>\n<p>I add an essential word of caution. It is <em>never<\/em> sound practice to assume after a short review that a particular activity or line of commerce enjoys an immunity from federal antitrust law. Immunities established by statute depend on the courts&#8217; sometimes changing interpretations of arcane or sparse statutory language. Immunities established by case law generally arise from the courts&#8217; ongoing, varying efforts to reconcile inconsistent laws and resolve the inherent contradictions of our federal system of governance. Complicating matters further, some immunities are conditional, and some are subject to important exceptions. For these reasons, no antitrust immunity can be properly understood or confidently invoked without first conducting a careful review of its controlling authorities, which I have provided in the footnotes below and urge my readers to consider as they read this note.<\/p>\n<p>To take one example among many, the McCarran-Ferguson Act<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_2');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_2');\" ><span id=\"footnote_plugin_tooltip_29209_1_2\" class=\"footnote_plugin_tooltip_text\">[2]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_2\" class=\"footnote_tooltip\">15 U.S.C. \u00a7\u00a7 1011-1012<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_2').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_2', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script>grants antitrust immunity to \u201cthe business of insurance,\u201d but only so far as it is regulated by state law.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_3');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_3');\" ><span id=\"footnote_plugin_tooltip_29209_1_3\" class=\"footnote_plugin_tooltip_text\">[3]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_3\" class=\"footnote_tooltip\">See 15 U.S.C.A. \u00a7 1012<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_3').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_3', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script>This provision might seem straightforward at first glance, but it always invites the following two inquiries: (1) whether an insurer\u2019s or some other defendant&#8217;s challenged practice can be properly characterized as &#8220;the business of insurance&#8221;; and, if so, (2) whether this practice is regulated by the laws of the state where the plaintiff challenges it. Either or both inquiries can sometimes give rise to knotty problems and close calls that the courts have worked out by a series of decisions. Before an insurer concludes that a particular practice is exempt from federal antitrust law, it should examine these matters carefully. I have provided a more complete discussion of this antitrust immunity below and mention it here only to reinforce my preceding point: antitrust immunities can prove to be a treacherous minefield to those who invoke them without first reading the controlling authorities that explain and qualify them.<\/p>\n<h2 id=\"2\">Four Kinds of Antitrust Immunity<\/h2>\n<p>Broadly speaking, Congress and the federal courts have recognized four kinds of antitrust immunity, which I briefly summarize directly below, and which I explain in detail in the ensuing sections of this article.<\/p>\n<p id=\"a\"><span style=\"text-decoration: underline;\"><em>Noerr-Pennington<\/em> Immunity for Petitioning Activity.<\/span><\/p>\n<p>In two landmark cases known as <em>Noerr <\/em>and <em>Pennington<\/em>, the Supreme Court confirmed that federal antitrust law does not abridge the constitutional right to &#8220;petition the government for redress,&#8221; which is protected by the First and Fourteenth Amendments of the U.S. Constitution. Accordingly, federal antitrust law does not prohibit or condemn any effort undertaken by one or more competitors to influence government policy or obtain any redress from any branch or agency of any federal or state government. The only recognized exceptions to this rule are a competitor&#8217;s fraud in an adjudicated proceeding (where the competitor, in furtherance of an anticompetitive scheme, misrepresents a material fact to a court or an administrative tribunal) and a competitor&#8217;s sham litigation (where the competitor, in furtherance of an anticompetitive scheme, brings baseless claims against a rival solely to harass the rival and without any prospect of obtaining the requested relief).<\/p>\n<p id=\"b\"><span style=\"text-decoration: underline;\">Limited State-Action Immunity.<\/span><\/p>\n<p>In a series of landmark decisions, the Supreme Court recognized antitrust immunity for activities properly authorized by a state government. To qualify, an act must be either (1) performed directly by an organ of state government (<em>i.e.<\/em>, a state legislature, a state executive such as the governor&#8217;s office or a state attorney general, or the state\u2019s courts); or (2) performed directly by a state agency and authorized by a state law that expressly declares or necessarily implies the state\u2019s intention to place such acts beyond the reach of federal antitrust law; or (3) performed by one or more private parties and actively supervised by a state or local agency in accordance with a state law that expressly declares or necessarily implies the state\u2019s intention to place such acts beyond the reach of federal antitrust law. But no state may authorize private parties to engage in conduct that violates federal antitrust law merely for the sake of their own enrichment. An authorizing state law must be one that the state enacts and enforces in furtherance of its sovereign power to regulate its own commerce or protect the health, safety, and welfare of those located within its territory.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_4');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_4');\" ><span id=\"footnote_plugin_tooltip_29209_1_4\" class=\"footnote_plugin_tooltip_text\">[4]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_4\" class=\"footnote_tooltip\">State-action immunity is a doctrine established and refined by a series of Supreme Court decisions to address the unresolved tension between Congress&#8217; supreme authority to enact laws in&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_4');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_4').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_4', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script>Relatedly, local government agencies cannot be held liable for antitrust damages under federal antitrust law, but they can be subjected to a federal antitrust injunction and ordered to pay attorney\u2019s fees and costs to a prevailing plaintiff that procures the injunction.<\/p>\n<p id=\"c\"><span style=\"text-decoration: underline;\">Express and Implied Federal Immunities<\/span><\/p>\n<p>Congress has enacted statutes that by express provision or necessary implication establish various antitrust exemptions for specified commercial activities, and the federal courts have decided how these statutory immunities must be interpreted and enforced. There are many such immunities: each one is distinctive and depends on its authorizing statute and how the courts have interpreted and enforced it. I have listed and generally described all of them below. Also, in 1922 the Supreme Court established a unique antitrust exemption for &#8220;the business of baseball,&#8221; which Congress subsequently modified only to permit major-league players to accept offers from rival clubs, but otherwise left intact, so that minor-league players and baseball fans are deprived of the protections of federal antitrust law.<\/p>\n<p id=\"d\"><span style=\"text-decoration: underline;\">Limited Immunities for Foreign Governments and Their Agencies.<\/span><\/p>\n<p>Subject to significant exceptions, no court of the United States will rule on a claim or defense that asks it to invalidate an act taken by a foreign sovereign power in its own territory, and no federal court will entertain any claim made against a foreign sovereign or any of its political subdivisions, except as expressly authorized by the Foreign Sovereign Immunities Act of 1976.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_5');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_5');\" ><span id=\"footnote_plugin_tooltip_29209_1_5\" class=\"footnote_plugin_tooltip_text\">[5]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_5\" class=\"footnote_tooltip\">28 U.S.C. \u00a7\u00a7 1604-1607<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_5').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_5', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script>The exceptions to these rules are very broad, and under them it is possible for a party to assert an antitrust claim against a foreign sovereign or its agency so long as the claim concerns strictly commercial activity that harms American exporters, American importers, or domestic American commerce. Nonetheless, the federal courts preserve broad discretion to defer to the State Department and to decline to entertain any such claim.<\/p>\n<p>I explain each of these categories more fully in the following sections of this article.<\/p>\n<h2 id=\"3\"><em>Noerr-Pennington<\/em> Immunity for Petitioning Activity<\/h2>\n<p>Antitrust law does not reach legitimate efforts to influence the government&#8217;s decisionmaking process or to seek redress from a government institution or agency (\u201cpetitioning activity\u201d), even when the avowed or apparent purpose of the effort is to obtain an official grant of a monopoly concession. This broad immunity is called \u201c<em>Noerr-Pennington<\/em> immunity,\u201d a term that refers to the two Supreme Court decisions that established it.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_6');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_6');\" ><span id=\"footnote_plugin_tooltip_29209_1_6\" class=\"footnote_plugin_tooltip_text\">[6]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_6\" class=\"footnote_tooltip\">See Octane Fitness, LLC v. ICON Health &amp; Fitness, Inc., 572 U.S. 545, 555\u201356 (2014) (\u201cUnder the Noerr\u2013Pennington doctrine\u2014established by Eastern Railroad Presidents Conference v. Noerr&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_6');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_6').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_6', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>Subject to the below exceptions, petitioning activity is a constitutional right protected by the First and Fourteenth Amendments of the U.S. Constitution. Absent a compelling interest, neither Congress nor any state legislature has the power to subject petitioning activity to antitrust prohibitions, nor was the Sherman Act ever intended to impose any such prohibition, which would not only infringe upon bedrock constitutional rights, but also impair the work of government institutions and agencies.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_7');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_7');\" ><span id=\"footnote_plugin_tooltip_29209_1_7\" class=\"footnote_plugin_tooltip_text\">[7]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_7\" class=\"footnote_tooltip\">See E. R. R. Presidents Conf. v. Noerr Motor Freight, Inc., 365 U.S. 127, 135 (1961) (\u201c[N]o violation of the [Sherman] Act can be predicated upon mere attempts to influence the passage or&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_7');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_7').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_7', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p><em>Noerr-Pennington<\/em> immunity thus safeguards charter rights guaranteed by the First and Fourteenth Amendments of the United States Constitution, which in pertinent part state the following:<\/p>\n<blockquote>\n<p>Congress shall make no law &#8230; abridging the freedom of speech &#8230; or the right of the people &#8230; to petition the Government for a redress of grievances.\u201d<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_8');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_8');\" ><span id=\"footnote_plugin_tooltip_29209_1_8\" class=\"footnote_plugin_tooltip_text\">[8]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_8\" class=\"footnote_tooltip\">Excerpt from the First Amendment of the U.S. Constitution.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_8').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_8', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>\u201cAll persons born or naturalized in the United States &#8230; are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States&#8230;.\u201d <span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_9');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_9');\" ><span id=\"footnote_plugin_tooltip_29209_1_9\" class=\"footnote_plugin_tooltip_text\">[9]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_9\" class=\"footnote_tooltip\">Excerpt from the Fourteenth Amendment of the U.S. Constitution.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_9').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_9', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p><strong>Excerpts from the First and Fourteenth Amendments of the United States Constitution<\/strong><\/p>\n<\/blockquote>\n<p>Congress and state legislatures therefore lack authority to enact competition laws that infringe upon these rights or, at best, they must have a compelling, clearly articulated reason for doing so that survives strict scrutiny &#8212; i.e., a compelling state interest accomplished by a narrowly drawn restriction on a constitutional right.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_10');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_10');\" ><span id=\"footnote_plugin_tooltip_29209_1_10\" class=\"footnote_plugin_tooltip_text\">[10]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_10\" class=\"footnote_tooltip\">See Williams-Yulee v. Fla. Bar, 575 U.S. 433, 442\u201344 (2015) (discussing standard of review for state or federal law that restricts a right guaranteed by the First Amendment, and holding that&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_10');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_10').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_10', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script>But neither Congress nor any state legislature has ever announced any such purpose or enacted any such law.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_11');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_11');\" ><span id=\"footnote_plugin_tooltip_29209_1_11\" class=\"footnote_plugin_tooltip_text\">[11]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_11\" class=\"footnote_tooltip\">See U.S. Futures Exch., L.L.C. v. Bd. of Trade of the City of Chicago, Inc., 953 F.3d 955, 960 (7th Cir. 2020) (\u201cThe [Noerr-Pennington] doctrine flows from First Amendment origins: antitrust laws&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_11');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_11').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_11', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>Even if Congress were to enact such a law, it would likely fail to survive strict scrutiny, since the law would inhibit members of the public from communicating with the government about their most important concerns.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_12');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_12');\" ><span id=\"footnote_plugin_tooltip_29209_1_12\" class=\"footnote_plugin_tooltip_text\">[12]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_12\" class=\"footnote_tooltip\">See id., 365 U.S. at 136\u201338 (\u201c[S]uch a holding would substantially impair the power of government to take actions through its legislature and executive that operate to restrain trade. In a&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_12');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_12').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_12', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>Accordingly, any market participant can seek redress from the government no matter what prohibitions might appear in the Sherman Act or any other antitrust law. A competitor or group of competitors can even request a government measure that is anticompetitive or monopolistic on its face or in probable effect.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_13');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_13');\" ><span id=\"footnote_plugin_tooltip_29209_1_13\" class=\"footnote_plugin_tooltip_text\">[13]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_13\" class=\"footnote_tooltip\"><em>See U.S. Futures Exch<\/em>., 953 F.3d 955, 960.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_13').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_13', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>Protected petitioning activity includes lobbying efforts, civil claims filed in court, administrative claims, publicity campaigns, and all other direct and indirect efforts to influence government policy or obtain specific acts from the government at any level \u2013 federal, state or local.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_14');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_14');\" ><span id=\"footnote_plugin_tooltip_29209_1_14\" class=\"footnote_plugin_tooltip_text\">[14]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_14\" class=\"footnote_tooltip\">Noerr, 365 U.S. at 136 (petitioning activity includes any effort to influence or obtain relief from the legislature or executive branch of government);\u00a0id. at 139\u201340 (petitioning activity includes&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_14');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_14').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_14', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>Suppose, for example, that a private competitor (the \u201cpetitioner\u201d) asks a local town board to give it the exclusive right to provide a specified service within town limits, and for various reasons most residents of the town must procure this service from a local provider. Following its regular procedures, the board grants the request, issues corresponding ordinances and regulations, and thereby confers on the petitioner a monopoly over the service in question, exactly as the petitioner intended by making its request. On these facts, the petitioner\u2019s conduct cannot be challenged under the Sherman Act, since the petitioner did nothing other than seek redress from a government agency, and any such effort is entitled to <em>Noerr-Pennington<\/em> immunity from federal antitrust law.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_15');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_15');\" ><span id=\"footnote_plugin_tooltip_29209_1_15\" class=\"footnote_plugin_tooltip_text\">[15]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_15\" class=\"footnote_tooltip\"><em>See U.S. Futures Exch<\/em>., 953 F.3d at 960.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_15').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_15', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>In the foregoing scenario, the local board\u2019s own conduct must be reviewed under the doctrine of state-action immunity, but even if the local board&#8217;s grant of a monopoly concession did not qualify for state-action immunity, the local board could not be held liable for antitrust damages. The only antitrust remedy available in this circumstance would be an antitrust injunction and attorney&#8217;s fees granted under Section 16 of the Clayton Act.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_16');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_16');\" ><span id=\"footnote_plugin_tooltip_29209_1_16\" class=\"footnote_plugin_tooltip_text\">[16]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_16\" class=\"footnote_tooltip\">15 U.S.C. \u00a7 26.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_16').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_16', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<h3 id=\"e\"><strong>Exceptions to <em>Noerr-Pennington<\/em> Immunity: False Representations and Sham Litigation<\/strong><\/h3>\n<p>There are two narrow exceptions to <em>Noerr-Pennington<\/em> immunity: first, it does not protect a competitor\u2019s materially false representations of fact made in court or during an administrative adjudication; and, second, it does not protect \u201csham litigation\u201d \u2013 litigation brought in bad faith in order to harass a rival rather than to obtain redress from a court or administrative tribunal.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_17');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_17');\" ><span id=\"footnote_plugin_tooltip_29209_1_17\" class=\"footnote_plugin_tooltip_text\">[17]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_17\" class=\"footnote_tooltip\"><em>See U.S. Futures Exch<\/em>., 953 F.3d at 960 (\u201cNoerr-Pennington immunity is not absolute&#8230;. Exceptions exist for petitioners who present fraudulent misrepresentations or bring sham lawsuits.\u201d).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_17').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_17', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p><em>Exception for Fraudulent Representations.<\/em>\u00a0If a petitioner obtains anticompetitive redress in a court or administrative tribunal by making a false representation of material fact, its petitioning conduct is not entitled to <em>Noerr-Pennington<\/em> immunity and can constitute predicate conduct that supports an antitrust violation, so long as the other elements of the violation are in place.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_18');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_18');\" ><span id=\"footnote_plugin_tooltip_29209_1_18\" class=\"footnote_plugin_tooltip_text\">[18]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_18\" class=\"footnote_tooltip\">See U.S. Futures Exch., 953 F.3d at 960 (\u201cFraudulent misrepresentations made in an adjudicative proceeding before an administrative agency are not protected from antitrust liability. Those made in&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_18');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_18').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_18', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>For example, a competitor might obtain a patent by fraud, then sue in court to enforce it against a rival, alleging that it holds a valid patent, and that the defendant has infringed upon it. If the defendant can show that the plaintiff procured its patent by fraud, so that its allegations in the court proceeding are likewise fraudulent, the rival can defeat the plaintiff\u2019s patent claim and also establish predicate conduct for an antitrust violation (<em>e.g.<\/em>, the plaintiff has used its ill-gotten patent to restrain or monopolize commerce in violation of federal antitrust law).<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_19');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_19');\" ><span id=\"footnote_plugin_tooltip_29209_1_19\" class=\"footnote_plugin_tooltip_text\">[19]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_19\" class=\"footnote_tooltip\">See Walker Process Equip., Inc. v. Food Mach. &amp; Chem. Corp., 382 U.S. 172, 174 (1965) (\u201cThe enforcement of a patent procured by fraud on the Patent Office may be violative of \u00a7 2 of the&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_19');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_19').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_19', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p><em>Exception for Sham Litigation<\/em>. Sham litigation arises when a petitioner litigates a baseless claim in bad faith in order to harass or undermine a competitor by involving it in expense, burden, or delay. Where this occurs, the courts have found that the petitioner did not actually petition the government for relief, since it lacked any prospect of obtaining the requested relief, but instead brought and maintained its claims only to harass its rival. To qualify as \u201csham litigation,\u201d a plaintiff\u2019s claim must meet both of the following criteria: (1) the claim must be \u201cobjectively baseless,\u201d which means that it that lacks any reasonable basis in fact or law; and (2) the claim must also be \u201csubjectively baseless,\u201d which means that the plaintiff must have brought it to harass a rival rather than obtain the requested relief.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_20');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_20');\" ><span id=\"footnote_plugin_tooltip_29209_1_20\" class=\"footnote_plugin_tooltip_text\">[20]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_20\" class=\"footnote_tooltip\">See Pro. Real Est. Invs., Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49, 60\u201361 (1993) (\u201cPRE\u201d) (\u201cWe now outline a two-part definition of \u2018sham\u2019 litigation. First, the lawsuit must be&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_20');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_20').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_20', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>Of note, a claim is said to be \u201cobjectively baseless\u201d when the party asserting it lacks reasonable evidence to support its charging allegations, or when these allegations, even if true, would not render the defendant liable to the plaintiff under any arguable interpretation of any law or doctrine. In other words, an objectively baseless claim is one that no reasonable litigant would bring, since the claim cannot possibly succeed on the merits.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_21');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_21');\" ><span id=\"footnote_plugin_tooltip_29209_1_21\" class=\"footnote_plugin_tooltip_text\">[21]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_21\" class=\"footnote_tooltip\"><em>See PRE<\/em>, 508 U.S. at 60\u201361 (an \u201cobjectively baseless\u201d lawsuit is one \u201cthat no reasonable litigant could realistically expect success on the merits.\u201d).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_21').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_21', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>Some courts have ruled that a competitor\u2019s repeated complaints to numerous administrative tribunals constitute \u201csham\u201d petitioning, even if a few of them succeed, when the competitor is clearly indifferent to the outcome of its serial complaints and has made them only to harass a rival and delay its application for permission to engage in a regulated commercial activity.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_22');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_22');\" ><span id=\"footnote_plugin_tooltip_29209_1_22\" class=\"footnote_plugin_tooltip_text\">[22]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_22\" class=\"footnote_tooltip\">See California Motor Transp. Co. v. Trucking Unlimited, 404 U.S. 508, 511\u201312 (1972) (petitioners\u2019 purported petitioning conduct is a mere sham and therefore not entitled to Noerr-Pennington&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_22');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_22').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_22', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>The upshot is that the courts draw the following \u201cnice distinction\u201d when reviewing antitrust challenges to petitioning activity: a competitor may ask his government for a monopoly or trade restraint, but it exposes itself to antitrust liability if it seeks to restrain or monopolize commerce by making a material misrepresentation to a court or in an administrative adjudication, or by litigating a baseless claim to harass a rival and without any prospect of prevailing on the merits.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_23');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_23');\" ><span id=\"footnote_plugin_tooltip_29209_1_23\" class=\"footnote_plugin_tooltip_text\">[23]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_23\" class=\"footnote_tooltip\"><em>See U.S. Futures Exch.<\/em>, 953 F.3d at 960; <em>Hanover<\/em> <em>3201 Realty<\/em>, 806 F.3d at 180.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_23').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_23', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<h2 id=\"4\">Limited State-Action Immunity<\/h2>\n<p>Under certain circumstances, a state government can lawfully take or authorize acts that otherwise might be unlawful under federal antitrust law. This matter is governed by a series of Supreme Court decisions that explain how Congress&#8217; power to regulate commerce and enforce federal antitrust law interacts with each state&#8217;s prerogative to regulate its internal commerce and protect the health, safety, and welfare of those located within its territory.<\/p>\n<h3 id=\"f\"><strong>State Laws and Federal Laws Under Our Federal System: General Principles<\/strong><\/h3>\n<p>Each state in the United States has sovereign powers and can presumptively exercise general police powers to protect the health, safety, and welfare of its public.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_24');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_24');\" ><span id=\"footnote_plugin_tooltip_29209_1_24\" class=\"footnote_plugin_tooltip_text\">[24]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_24\" class=\"footnote_tooltip\">See Medtronic, Inc. v. Lohr, 518 U.S. 470, 475 (1996) (\u201cThroughout our history the several States have exercised their police powers to protect the health and safety of their citizens. Because&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_24');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_24').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_24', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>A state also has limited powers to regulate commerce within its territory (intrastate commerce) even when the regulation has some effect on interstate commerce.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_25');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_25');\" ><span id=\"footnote_plugin_tooltip_29209_1_25\" class=\"footnote_plugin_tooltip_text\">[25]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_25\" class=\"footnote_tooltip\">See Parker v. Brown, 317 U.S. 341, 359\u201360 (1943) (\u201cThe governments of the states are sovereign within their territory save only as they are subject to the prohibitions of the Constitution or as&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_25');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_25').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_25', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>Although vested with these powers, a state may not enact a law that is \u201crepugnant\u201d to a federal law, or whose exercise is incompatible with the enforcement of a federal law on the same topic.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_26');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_26');\" ><span id=\"footnote_plugin_tooltip_29209_1_26\" class=\"footnote_plugin_tooltip_text\">[26]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_26\" class=\"footnote_tooltip\">See Gibbons v. Ogden, 22 U.S. 1, 210\u201311 (1824) (Where \u201ca law passed by a State, in the exercise of its acknowledged sovereignty, comes into conflict with a law or treaty properly passed by&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_26');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_26').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_26', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<h3 id=\"g\"><strong>Congress\u2019s\u00a0Dormant Power Under the U.S. Constitution\u2019s Commerce Clause<\/strong><\/h3>\n<p>The foregoing principles have been used to establish the \u201cdormant power\u201d of the Commerce Clause of the U.S. Constitution,<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_27');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_27');\" ><span id=\"footnote_plugin_tooltip_29209_1_27\" class=\"footnote_plugin_tooltip_text\">[27]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_27\" class=\"footnote_tooltip\">See U.S. Constitution, Article I, Section 8, which in pertinent part empowers Congress \u201cto regulate Commerce with foreign Nations, and among the several States&#8230;.\u201d).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_27').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_27', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script> which holds that Congress\u2019 authority to regulate interstate commerce impliedly forbids any state to enact a law that either discriminates against interstate commerce or imposes unreasonable burdens on it.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_28');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_28');\" ><span id=\"footnote_plugin_tooltip_29209_1_28\" class=\"footnote_plugin_tooltip_text\">[28]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_28\" class=\"footnote_tooltip\">See Selevan v. New York Thruway Auth., 584 F.3d 82, 90 (2d Cir. 2009) (\u201cIn implementing the Commerce Clause, the Supreme Court has adhered strictly to the principle that the right to engage in&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_28');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_28').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_28', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>A state therefore cannot enact a law that discriminates against out-of-state commerce (<em>e.g.<\/em>, state laws that on their face or as practiced favor local suppliers over out-of-state suppliers). Nor can a state enforce a law or regulation that unreasonably burdens interstate commerce or results in the state\u2019s regulation of commerce that occurs entirely outside of its jurisdiction.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_29');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_29');\" ><span id=\"footnote_plugin_tooltip_29209_1_29\" class=\"footnote_plugin_tooltip_text\">[29]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_29\" class=\"footnote_tooltip\">See Selevan, 584 F.3d at 90 (\u201cA state statute or regulation may violate the dormant Commerce Clause only if it (1) clearly discriminates against interstate commerce in favor of intrastate commerce,&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_29');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_29').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_29', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<h3 id=\"h\"><strong>Federal Preemption<\/strong><\/h3>\n<p>Relatedly, a state loses its power to enforce a law when Congress enacts its own law that addresses the same subject-matter and expressly decrees or impliedly requires \u201cfederal preemption\u201d of all state laws on the same subject-matter.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_30');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_30');\" ><span id=\"footnote_plugin_tooltip_29209_1_30\" class=\"footnote_plugin_tooltip_text\">[30]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_30\" class=\"footnote_tooltip\">See Philip Morris Inc. v. Harshbarger, 122 F.3d 58, 67\u201368 (1st Cir. 1997) (to determine whether a federal law preempts state laws on the same subject-matter, the \u201ccrucial inquiry\u201d is whether&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_30');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_30').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_30', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<h3 id=\"i\"><strong>State-Action Immunity From Antitrust Liability<\/strong><\/h3>\n<p>Guided by these principles, the Supreme Court has found that the Sherman Act in particular and all federal antitrust law generally do not preempt state law or apply to the direct acts of a state government.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_31');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_31');\" ><span id=\"footnote_plugin_tooltip_29209_1_31\" class=\"footnote_plugin_tooltip_text\">[31]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_31\" class=\"footnote_tooltip\">See Parker, 317 U.S. at 350\u201351 (\u201cWe find nothing in the language of the Sherman Act or in its history which suggests that its purpose was to restrain a state or its officers or agents from&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_31');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_31').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_31', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script>This doctrine applies only to <em>laws and <\/em><em>direct acts<\/em> <em>of an organ of a state government<\/em> &#8212; <em>i.e.<\/em>, laws duly enacted and acts directly taken by a state legislature, a governor&#8217;s office, a state attorney general, or a state court.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_32');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_32');\" ><span id=\"footnote_plugin_tooltip_29209_1_32\" class=\"footnote_plugin_tooltip_text\">[32]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_32\" class=\"footnote_tooltip\"><em>See id<\/em>.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_32').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_32', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>In contrast,<em> the act of a state or local agency <\/em>is protected by state-action immunity only when it is expressly authorized by a state law that declares or necessarily implies the state&#8217;s intent to permit such acts even though they might otherwise violate, or be inconsistent with, federal antitrust law or the national policy in favor of competitive markets.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_33');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_33');\" ><span id=\"footnote_plugin_tooltip_29209_1_33\" class=\"footnote_plugin_tooltip_text\">[33]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_33\" class=\"footnote_tooltip\">See Cmty. Commc\u2019ns Co. v. City of Boulder, Colo., 455 U.S. 40, 51 (1982) (\u201c[M]unicipal conduct\u201d is immune from federal antitrust law only when undertaken \u201cpursuant to state policy to displace&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_33');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_33').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_33', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script>Even so, when a state agency takes acts that lack state-action immunity and violate federal antitrust law, it cannot be held liable for damages under federal antitrust law.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_34');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_34');\" ><span id=\"footnote_plugin_tooltip_29209_1_34\" class=\"footnote_plugin_tooltip_text\">[34]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_34\" class=\"footnote_tooltip\"><em>See<\/em> Local Government Antitrust Act of 1984, 15 U.S.C. \u00a7\u00a7 34-36 <\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_34').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_34', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script>, but it can be subjected to an antitrust injunction &#8212; i.e., an injunction granted under Section 16 of the Clayton Act, which is codified at 15 U.S.C. \u00a7 26.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_35');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_35');\" ><span id=\"footnote_plugin_tooltip_29209_1_35\" class=\"footnote_plugin_tooltip_text\">[35]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_35\" class=\"footnote_tooltip\"><em>See Lancaster Cmty. Hosp. v. Antelope Valley Hosp. Dist.<\/em>, 940 F.2d 397, 404 (9th Cir. 1991).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_35').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_35', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script>A plaintiff that obtains an antitrust injunction against a state agency can recover its attorney&#8217;s fees and costs from the agency.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_36');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_36');\" ><span id=\"footnote_plugin_tooltip_29209_1_36\" class=\"footnote_plugin_tooltip_text\">[36]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_36\" class=\"footnote_tooltip\">See id. (\u201c[The Local Government Antitrust Act of 1984] precludes the recovery of damages, costs, or attorneys fees, on the basis of 15 U.S.C. \u00a7\u00a7 15, 15a, or 15c, from local government entities.&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_36');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_36').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_36', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script>.<\/p>\n<p>Lastly, <em>the act of a private business<\/em> can also enjoy \u201cstate-action immunity\u201d from federal antitrust law, but only when the following two conditions are met: (1) the private act is expressly authorized by a state law that declares or necessarily implies the state&#8217;s intent to permit such acts even though they might otherwise violate, or be inconsistent with, federal antitrust law or the national policy in favor of competitive markets; and (2) a state agency must actively supervise all such private acts to ensure that they are properly performed in accordance with the state law that authorizes them.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_37');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_37');\" ><span id=\"footnote_plugin_tooltip_29209_1_37\" class=\"footnote_plugin_tooltip_text\">[37]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_37\" class=\"footnote_tooltip\">See California Retail Liquor Dealers Ass\u2019n v. Midcal Aluminum, Inc., 445 U.S. 97, 105 (1980) (establishing doctrine); F.T.C. v. Phoebe Putney Health Sys., Inc., 568 U.S. 216, 225 (2013) (\u201c[G]iven&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_37');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_37').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_37', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<h3 id=\"l\"><strong>Bullet-Point Summary<\/strong><\/h3>\n<p>The foregoing principles are complicated because our federal system of government is complicated. The bullet points can nevertheless be quickly summarized:<\/p>\n<ul>\n<li>First, the U.S. Constitution vests supreme authority in Congress to enact laws that govern interstate commerce. Relatedly, each state\u2019s authority to regulate a given matter can be preempted by a federal law, but only if it is clear that Congress, by enacting the law, intended to preempt state laws on the same subject-matter. No such preemption was intended or accomplished by Congress&#8217; enactment of the Sherman Act or any other federal antitrust law. The Constitution therefore permits each state to regulate its internal commerce and protect the health, safety, and welfare of those located within its borders, but a state cannot enact laws that discriminate against interstate commerce or unduly burden it. The bottom line is that each state can regulate its own commerce and protect those within its jurisdiction, so long as it takes reasonable care not to impose unreasonable burdens on the flow of interstate commerce &#8212; <em>i.e.<\/em>, so long as its laws and regulations do not (1) purposefully or unreasonably favor local concerns over out-of-state concerns; (2) impede interstate commerce in ways not reasonably related to legitimate local regulation; or (3) purport to regulate wholly out-of-state commerce. Offending state laws can be challenged on these grounds.<\/li>\n<li>Neither the Sherman Act, nor any other federal antitrust law prohibits or regulates any act directly taken by a sovereign state &#8212; <em>i.e.<\/em>, by a state legislature, a Governor&#8217;s office, a state attorney general&#8217;s office, or a state courthouse.<\/li>\n<li>A state agency\u2019s acts enjoy state-action immunity only if the acts are expressly authorized by a state law that declares or necessarily implies that such acts may be taken despite any prohibition set forth in federal antitrust law. Regardless, no state agency can be held liable for damages under federal antitrust law, but a stage agency can be regulated by an antitrust injunction (<em>i.e.,<\/em> an injunction issued under Section 16 of the Clayton Act) and ordered to pay attorney\u2019s fees and costs incurred by a plaintiff to procure the injunction (as is authorized under Section 16 of the Clayton Act, which is codified at 15 U.S.C. \u00a7 26).<\/li>\n<li>Private acts enjoy state-action immunity when the following two conditions are met: (1) the acts are expressly authorized by a state law that declares or necessarily implies that any such act may be taken despite any prohibition set forth in federal antitrust law; and (2) a state agency must enforce the authorizing state law and actively supervise the private acts that it authorizes. But no state can enact a law that merely authorizes private parties to monopolize or restrain trade without any view to regulating intrastate commerce or protecting the health, safety or welfare of those located in the state.<\/li>\n<li>Lastly, the term &#8220;state agency,&#8221; as used here, refers to <em>any<\/em> political subdivision of a state government, such as a state regulatory agency, a municipality, a county board, etc. This can raise difficult judgment calls when a local agency delegates authority to, say, a hospital board or some other quasi-public agency dominated by private economic actors.<\/li>\n<\/ul>\n<h2 id=\"5\">Express and Implied Antitrust Immunities Established by Federal Law<\/h2>\n<p>Congress has promulgated various laws that confer limited or conditional immunity from federal antitrust law, and the federal courts have interpreted and applied these immunities and also established one of their own &#8212; the immunity that is incongruously and indefensibly granted to the &#8220;business of baseball.&#8221;<\/p>\n<h3 id=\"m\"><strong>Statutory Immunities<\/strong><\/h3>\n<p>The principal statutory immunities are as follows:<\/p>\n<ul>\n<li><span style=\"text-decoration: underline;\">The \u201cbusiness of insurance<\/span>,\u201d but only so far as it is regulated by state law.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_38');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_38');\" ><span id=\"footnote_plugin_tooltip_29209_1_38\" class=\"footnote_plugin_tooltip_text\">[38]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_38\" class=\"footnote_tooltip\"><em>See <\/em>McCarran-Ferguson Act of 1945, which is codified at 15 U.S.C. \u00a7\u00a7 1011-1012.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_38').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_38', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/li>\n<li><span style=\"text-decoration: underline;\">Export associations<\/span> whose dealings cause no harm to other American exporters, American importers, or domestic American commerce.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_39');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_39');\" ><span id=\"footnote_plugin_tooltip_29209_1_39\" class=\"footnote_plugin_tooltip_text\">[39]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_39\" class=\"footnote_tooltip\"><em>See <\/em>Webb-Pomerene Act of 1918, which is codified at 15 U.S.C. \u00a7\u00a7 61-65; <em>see also <\/em>Export Trading Company Act of 1982, which is codified at 15 U.S.C. \u00a7 6a.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_39').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_39', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/li>\n<li><span style=\"text-decoration: underline;\">American export activity<\/span> that causes no harm to any American exporter, American importer, or domestic American commerce.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_40');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_40');\" ><span id=\"footnote_plugin_tooltip_29209_1_40\" class=\"footnote_plugin_tooltip_text\">[40]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_40\" class=\"footnote_tooltip\"><em>See <\/em>Foreign Trade Antitrust Improvements Act of 1982, which is codified at 15 U.S.C. \u00a7 6a.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_40').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_40', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/li>\n<li><span style=\"text-decoration: underline;\">International ocean commerce<\/span> regulated by the Shipping Act of 1984.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_41');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_41');\" ><span id=\"footnote_plugin_tooltip_29209_1_41\" class=\"footnote_plugin_tooltip_text\">[41]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_41\" class=\"footnote_tooltip\">46 U.S.C. \u00a7\u00a7 1701-1720<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_41').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_41', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/li>\n<li><span style=\"text-decoration: underline;\">Labor-union activity<\/span>.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_42');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_42');\" ><span id=\"footnote_plugin_tooltip_29209_1_42\" class=\"footnote_plugin_tooltip_text\">[42]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_42\" class=\"footnote_tooltip\"><em>See <\/em>Norris-LaGuardia Act of 1932, which is codified at 29 U.S.C. \u00a7\u00a7 101-115, as well as Section 6 of the Clayton Act of 1914, which is codified at 15 U.S.C. \u00a7 17.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_42').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_42', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/li>\n<li><span style=\"text-decoration: underline;\">Agricultural and fishing cooperatives<\/span> formed to market and sell farm and fish products.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_43');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_43');\" ><span id=\"footnote_plugin_tooltip_29209_1_43\" class=\"footnote_plugin_tooltip_text\">[43]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_43\" class=\"footnote_tooltip\"><em>See <\/em>Section 6 of the Clayton Act and the Capper-Volstead Act of 1922, which is codified at 7 U.S.C. \u00a7 291.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_43').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_43', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/li>\n<li><span style=\"text-decoration: underline;\">Healthcare providers\u2019 procedures for peer review<\/span>.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_44');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_44');\" ><span id=\"footnote_plugin_tooltip_29209_1_44\" class=\"footnote_plugin_tooltip_text\">[44]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_44\" class=\"footnote_tooltip\"><em>See<\/em> Health Care Quality Improvement Act of 1986, which is codified at 42 U.S.C. \u00a7\u00a7 11111 <em>et seq<\/em>.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_44').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_44', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/li>\n<li><span style=\"text-decoration: underline;\">Activity that supports national security<\/span> and has been approved by the Department of Justice and the FTC, including commercial activity that contribute to the \u201cexpansion of productive capacity and supply beyond levels needed to meet essential civilian demand.\u201d<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_45');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_45');\" ><span id=\"footnote_plugin_tooltip_29209_1_45\" class=\"footnote_plugin_tooltip_text\">[45]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_45\" class=\"footnote_tooltip\"><em>See<\/em> 50 U.S.C. \u00a7 2062<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_45').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_45', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/li>\n<li><span style=\"text-decoration: underline;\">Joint research and development conducted by small businesses <\/span>and approved by the Small Business Administration.(<span style=\"text-decoration: underline;\">((<\/span><em>See<\/em> 15 U.S.C. \u00a7 638.<span style=\"text-decoration: underline;\">)))<\/span><\/li>\n<li><span style=\"text-decoration: underline;\">One newspaper\u2019s acquisition of a failing newspaper,<\/span> provided that the acquired newspaper&#8217;s independent operations remain intact, and subject to express approval from the United States Department of Justice.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_46');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_46');\" ><span id=\"footnote_plugin_tooltip_29209_1_46\" class=\"footnote_plugin_tooltip_text\">[46]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_46\" class=\"footnote_tooltip\"><em>See<\/em> Newspaper Preservation Act in 1970, which is codified at 15 U.S.C. \u00a7\u00a7 1801-1804.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_46').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_46', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/li>\n<li><span style=\"text-decoration: underline;\">Bank mergers<\/span>, which are governed by the Bank Merger Act of 1966.<u><span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_47');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_47');\" ><span id=\"footnote_plugin_tooltip_29209_1_47\" class=\"footnote_plugin_tooltip_text\">[47]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_47\" class=\"footnote_tooltip\"><\/u><em>See<\/em> 12 U.S.C.\u00a7 1828c.<span style=\"text-decoration: underline;\"><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_47').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_47', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/span><\/li>\n<li><span style=\"text-decoration: underline;\">Soft-drink distribution agreements<\/span>.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_48');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_48');\" ><span id=\"footnote_plugin_tooltip_29209_1_48\" class=\"footnote_plugin_tooltip_text\">[48]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_48\" class=\"footnote_tooltip\"><em>See<\/em> Soft Drink Interbrand Competition Act, which is codified at 15 U.S.C. \u00a7\u00a7 3501\u20133503.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_48').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_48', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/li>\n<li><span style=\"text-decoration: underline;\">Gift annuities<\/span>.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_49');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_49');\" ><span id=\"footnote_plugin_tooltip_29209_1_49\" class=\"footnote_plugin_tooltip_text\">[49]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_49\" class=\"footnote_tooltip\"><em>See<\/em> Charitable Donation Antitrust Immunity Act of 1997, which is codified at 15 U.S.C. \u00a7 37(a).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_49').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_49', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/li>\n<li><span style=\"text-decoration: underline;\">Medical-resident matching<\/span>.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_50');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_50');\" ><span id=\"footnote_plugin_tooltip_29209_1_50\" class=\"footnote_plugin_tooltip_text\">[50]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_50\" class=\"footnote_tooltip\"><em>See<\/em> Pension Funding Equity Act of 2004, which is codified at 15 U.S.C. \u00a7 37b(b)(2).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_50').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_50', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/li>\n<\/ul>\n<h3 id=\"n\"><strong>The Business of Baseball<\/strong><\/h3>\n<p>In a ruling in 1922, the Supreme Court established a general exemption from federal antitrust law for \u201cthe business of baseball.\u201d<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_51');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_51');\" ><span id=\"footnote_plugin_tooltip_29209_1_51\" class=\"footnote_plugin_tooltip_text\">[51]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_51\" class=\"footnote_tooltip\">See Federal Baseball Club v. National League, 259 U.S. 200, 208-09 (1922) (finding that the \u201cbusiness of baseball\u201d did not constitute interstate commerce that Congress had authority to regulate);&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_51');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_51').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_51', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>The baseball exemption is an outlier. It was granted by Justice Holmes in a Supreme Court decision in 1922 on the ground that baseball was not &#8220;interstate commerce&#8221; of the kind that Congress could lawfully regulate under the Constitution&#8217;s Commerce Clause.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_52');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_52');\" ><span id=\"footnote_plugin_tooltip_29209_1_52\" class=\"footnote_plugin_tooltip_text\">[52]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_52\" class=\"footnote_tooltip\"><em>See Federal Baseball<\/em>, 259 U.S. 200, 208-09 (1922).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_52').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_52', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script>Thereafter, the Supreme Court <em>abrogated<\/em> this approach to Commerce Clause,<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_53');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_53');\" ><span id=\"footnote_plugin_tooltip_29209_1_53\" class=\"footnote_plugin_tooltip_text\">[53]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_53\" class=\"footnote_tooltip\">See Wickard v. Filburn, 317 U.S. 111, 124 (1942) (\u201cThe commerce power is not confined in its exercise to the regulation of commerce among the states. It extends to those activities intrastate which&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_53');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_53').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_53', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script>but in two subsequent decisions it expressly <em>preserved<\/em> the baseball exemption, finding that participants in the baseball industry had relied on the exemption for so long that they would suffer an injustice if it were removed retroactively by an unexpected court decision: instead, the Supreme Court ruled, the baseball exemption could be properly repealed or modified only by a new act of legislation passed by Congress.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_54');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_54');\" ><span id=\"footnote_plugin_tooltip_29209_1_54\" class=\"footnote_plugin_tooltip_text\">[54]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_54\" class=\"footnote_tooltip\"><em>See <\/em><em>Toolson, <\/em>346 U.S. 356\u201357; <em>Flood<\/em>, 407 U.S. at 283.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_54').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_54', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>More than forty years later, Congress finally afforded limited relief by enacting the Curt Flood Act of 1998, which granted antitrust protections only for the &#8220;employment of major league baseball players to play baseball at the major league level.&#8221;<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_55');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_55');\" ><span id=\"footnote_plugin_tooltip_29209_1_55\" class=\"footnote_plugin_tooltip_text\">[55]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_55\" class=\"footnote_tooltip\"><em>See <\/em>the Curt Flood Act of 1998, which is codified at 15 U.S.C. \u00a7 26b.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_55').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_55', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script>But Congress otherwise declined to repeal the baseball exemption, and the federal courts have repeatedly ruled that, absent any such act of Congress, the baseball exemption must remain intact so far as it was not repealed by the Curt Flood Act.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_56');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_56');\" ><span id=\"footnote_plugin_tooltip_29209_1_56\" class=\"footnote_plugin_tooltip_text\">[56]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_56\" class=\"footnote_tooltip\"><em>See, e.g., City of San Jose v. Off. of the Com&#8217;r of Baseball<\/em>, 776 F.3d 686, 690\u201391 (9th Cir. 2015).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_56').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_56', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>Of note, the 1922 ruling in <em>Federal Baseball <\/em>suggested that baseball could be properly reviewed under <em>state antitrust law &#8212;\u00a0 <\/em>a point emphasized by a leading authority on antitrust law.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_57');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_57');\" ><span id=\"footnote_plugin_tooltip_29209_1_57\" class=\"footnote_plugin_tooltip_text\">[57]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_57\" class=\"footnote_tooltip\">See Phillip E. Areeda (late) &amp; Herbert Hovenkamp, Antitrust Law: An Analysis of Antitrust Principles and Their Application \u00b6251. (4th and 5th Editions 2015-2021) (\u201c\u201d[B]eginning with Justice&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_57');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_57').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_57', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script>But here too the federal courts denied this relief, finding that baseball is interstate and national in character and thus requires uniform antitrust regulation (!)<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_58');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_58');\" ><span id=\"footnote_plugin_tooltip_29209_1_58\" class=\"footnote_plugin_tooltip_text\">[58]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_58\" class=\"footnote_tooltip\">See Major League Baseball v. Crist, 331 F.3d 1177, 1185 (11th Cir. 2003) (finding that baseball is interstate in character and therefore requires uniform national regulation, and that the chosen&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_58');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_58').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_58', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script>The federal courts have thus gone out of their way to place baseball in a no-man&#8217;s land of antitrust impunity that is not granted to any other sport or other kind of professional entertainment.<\/p>\n<p>The owners of major-league baseball teams thus enjoy a singular immunity from both federal and state antitrust protection. The result is that minor-league baseball players, baseball fans, and candidate cities lack <em>any<\/em> antitrust protection. This gap in the law arose because of a 1922 court ruling whose precepts have since been abrogated, and it remains in place because Congress has failed to rescue baseball from the superseded court ruling, except to afford major-league players antitrust protections when negotiating big-league employment contracts. Fans, cities, and minor-leaguers have thus been left to fend for themselves without basic antitrust protections. Baseball, a distinctly American sport, thus lacks the time-honored American remedy for marketplace abuses &#8212; antitrust remedies. It is long past time to end this indefensible anomaly.<\/p>\n<h3 id=\"o\"><strong>The Business of Insurance<\/strong><\/h3>\n<p>As briefly noted above, the McCarran-Ferguson Act of 1945 (15 U.S.C. \u00a7\u00a7 1011-1012) establishes a significant antitrust exemption for the \u201cbusiness of insurance\u201d: the principal federal antitrust statutes \u2013 the Sherman Act, the Clayton Act, and the FTC Act \u2013 do not reach any insurance activity that is regulated by the state where it is challenged.<\/p>\n<p>Of note, the McCarran-Ferguson Act does not exempt insurance companies (insurers), but only their insurance activities (the \u201cbusiness of insurance\u201d). An insurer therefore cannot receive McCarran-Ferguson immunity if it is sued for an antitrust violation that it allegedly committed when engaged in some other kind of commerce, but only when the challenge concerns its insurance transactions and closely related matters that it must perform in order to engage in them.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_59');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_59');\" ><span id=\"footnote_plugin_tooltip_29209_1_59\" class=\"footnote_plugin_tooltip_text\">[59]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_59\" class=\"footnote_tooltip\">see Grp. Life &amp; Health Ins. Co. v. Royal Drug Co., 440 U.S. 205, 210\u201311 (1979) (\u201cThe statutory language [of the McCarran-Ferguson Act] does not exempt the business of insurance companies from&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_59');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_59').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_59', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>The business of insurance therefore concerns activities by which an insurer assumes and &#8220;spreads&#8221; specified risks in exchange for fees.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_60');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_60');\" ><span id=\"footnote_plugin_tooltip_29209_1_60\" class=\"footnote_plugin_tooltip_text\">[60]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_60\" class=\"footnote_tooltip\"><em>See id.<\/em><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_60').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_60', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>Applying this rule, the courts have found that the business of insurance principally concerns (1) insurance contracts (or insurance policies) between an insurer and its insureds, including their negotiation, essential terms and conditions, interpretation, and enforcement; (2) the rates (prices) that insurers charge for different kinds of insurance contracts; (3) insurers\u2019 advertising of insurance contracts; (4) the licensing of insurers and their agents; and (5) other, closely related tasks.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_61');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_61');\" ><span id=\"footnote_plugin_tooltip_29209_1_61\" class=\"footnote_plugin_tooltip_text\">[61]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_61\" class=\"footnote_tooltip\"><em>See Sec. &amp; Exch. Comm&#8217;n v. Nat&#8217;l Sec., Inc.<\/em>, 393 U.S. 453, 460, 89 S. Ct. 564, 568\u201369, 21 L. Ed. 2d 668 (1969).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_61').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_61', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>Other activities performed by insurers do not qualify, including an insurer\u2019s issuance of a variable annuity contract (under which the annuitant bears all of the risk);<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_62');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_62');\" ><span id=\"footnote_plugin_tooltip_29209_1_62\" class=\"footnote_plugin_tooltip_text\">[62]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_62\" class=\"footnote_tooltip\">see <em>Sec. &amp; Exch. Comm\u2019n v. Variable Annuity Life Ins. Co. of Am.<\/em>, 359 U.S. 65, 73 (1959).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_62').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_62', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script>an insurer\u2019s use of its own network of pharmacies to lessen its own costs when fulfilling its obligations to insureds;<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_63');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_63');\" ><span id=\"footnote_plugin_tooltip_29209_1_63\" class=\"footnote_plugin_tooltip_text\">[63]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_63\" class=\"footnote_tooltip\"><em>see Royal Drug<\/em>, 440 U.S. 205, 214 (1979).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_63').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_63', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script>and other arrangements by which insurers lessen their costs to fulfill obligations to their insureds.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_64');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_64');\" ><span id=\"footnote_plugin_tooltip_29209_1_64\" class=\"footnote_plugin_tooltip_text\">[64]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_64\" class=\"footnote_tooltip\">see, e.g., Pireno v. New York State Chiropractic Association, 650 F.2d 387 (2d Cir. 1981); St. Bernard Hospital v. Hospital Service Assn. of New Orleans, Inc., 618 F.2d 1140, 1145 (5th Cir. 1980);&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_64');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_64').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_64', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>In some cases, it is not obvious whether the insurer\u2019s challenged practice is part of the business of insurance, but the best litmus test is usually to determine whether the practice entails the insurer\u2019s assumption of risks otherwise borne by its insureds in exchange for fees; the more removed its practice is from this essential work, the less likely it is to be deemed the business of insurance that qualifies for McCarran-Ferguson immunity so long as it is subject to state regulation where it is challenged.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_65');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_65');\" ><span id=\"footnote_plugin_tooltip_29209_1_65\" class=\"footnote_plugin_tooltip_text\">[65]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_65\" class=\"footnote_tooltip\"><em>See<\/em> <em>Royal Drug<\/em>, 440 U.S. at 211.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_65').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_65', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<h3 id=\"p\"><strong>Implied Federal Immunities<\/strong><\/h3>\n<p>The federal courts have also found that federal antitrust law can be partly or wholly displaced by federal regulatory schemes, such as the Securities Exchange Act of 1934, which regulates stock exchanges and broker-dealers of securities. An implied immunity from antitrust law is disfavored, however, and so far as possible the courts try to reconcile federal antitrust law with federal regulatory schemes.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_66');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_66');\" ><span id=\"footnote_plugin_tooltip_29209_1_66\" class=\"footnote_plugin_tooltip_text\">[66]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_66\" class=\"footnote_tooltip\">See Silver v. New York Stock Exch., 373 U.S. 341, 357 (1963) (\u201cThe Securities Exchange Act contains no express exemption from the antitrust laws&#8230;. This means that any repealer of the&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_66');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_66').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_66', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<h2 id=\"6\">Limited Immunity for Foreign Governments and Their Agencies<\/h2>\n<p>Special rules govern antitrust claims brought against a foreign government or its agency (<em>i.e.<\/em>, a political subdivision of a sovereign foreign government). The common-law doctrine of acts of state governs any claim that challenges acts committed by a sovereign government in its own territory, and all other claims against foreign governments and their agencies are governed by a highly technical federal statute entitled the Foreign Sovereign Immunities Act.<\/p>\n<h3 id=\"q\"><strong>The Doctrine of Acts of State<\/strong><\/h3>\n<p>The doctrine of acts of state bars any claim that challenges an act directly taken by a sovereign foreign government within its own territory. Here is how the Supreme Court explained acts of state in a landmark case decided in 1897:<\/p>\n<blockquote>\n<p>Every sovereign State is bound to respect the independence of every other sovereign State, and the courts of one country will not sit in judgment on the acts of the government of another done within its own territory. Redress of grievances by reason of such acts must be obtained through the means open to be availed of by sovereign powers as between themselves.<\/p>\n<p>&nbsp;<\/p>\n<p><strong><em>Underhill v. Hernandez<\/em>, 168 U.S. 250, 252 (1897).<\/strong><\/p>\n<\/blockquote>\n<p>Federal courts in the United States decline to review or adjudicate any such act, since doing so would encroach upon the prerogatives and powers of the Executive Branch or the Legislative Branch of the federal government, which are responsible for establishing and conducting the foreign policy of the United States.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_67');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_67');\" ><span id=\"footnote_plugin_tooltip_29209_1_67\" class=\"footnote_plugin_tooltip_text\">[67]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_67\" class=\"footnote_tooltip\">See W.S. Kirkpatrick &amp; Co. v. Env&#8217;t Tectonics Corp., Int\u2019l, 493 U.S. 400, 404 (1990) (In earlier times, the doctrine of acts of state \u201crest[ed] upon the highest considerations of&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_67');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_67').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_67', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>More specifically, the doctrine bars any claim or defense by which a litigant asks a federal court in the United States to invalidate an official act of a sovereign foreign government taken within its own territory: no American court will entertain any such claim or defense.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_68');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_68');\" ><span id=\"footnote_plugin_tooltip_29209_1_68\" class=\"footnote_plugin_tooltip_text\">[68]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_68\" class=\"footnote_tooltip\">See id. 493 U.S. at 405 (\u201c[T]he act of state doctrine [is] applicable [when] the relief sought or the defense interposed would have required a court in the United States to declare invalid the&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_68');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_68').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_68', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>In one decision that has since been strongly criticized, the Ninth Circuit invoked the doctrine to justify its refusal to subject the operations of OPEC to federal antitrust law notwithstanding their profound effect on domestic American commerce.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_69');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_69');\" ><span id=\"footnote_plugin_tooltip_29209_1_69\" class=\"footnote_plugin_tooltip_text\">[69]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_69\" class=\"footnote_tooltip\">See Int&#8217;l Ass&#8217;n of Machinists &amp; Aerospace Workers, (IAM) v. Org. of Petroleum Exporting Countries (OPEC), 649 F.2d 1354, 1361\u201362 (9th Cir. 1981), disapproved of by Siderman de Blake&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_69');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_69').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_69', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<h3 id=\"r\"><strong>The Doctrine of Sovereign Immunity and The Foreign Sovereign Immunities Act 1976<\/strong><\/h3>\n<p>Sovereign immunity is an ancient immunity by which independent nation-states respected one another\u2019s sovereignty and declined to permit a citizen of any nation-state to bring suit in his home country against a foreign government.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_70');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_70');\" ><span id=\"footnote_plugin_tooltip_29209_1_70\" class=\"footnote_plugin_tooltip_text\">[70]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_70\" class=\"footnote_tooltip\">See Samantar v. Yousuf, 560 U.S. 305, 311 (2010) (&#8220;The doctrine\u00a0of\u00a0foreign\u00a0sovereign\u00a0immunity developed as a matter of common law&#8230;. [I]n Schooner Exchange v. McFaddon, 7 Cranch 116, 3&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_70');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_70').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_70', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>This doctrine evolved over time. In the United States, when a federal court received a private claim against a foreign government, it was required to heed the guidance of the State Department, which from 1952 onward purported to observe the \u201crestrictive\u201d version of sovereign immunity to decide whether the claim could proceed: under this doctrine, a foreign sovereign could be sued in a U.S. federal court on a claim that concerned its commercial activity in the United States, but not on a claim that concerned its sovereign or &#8220;public&#8221; acts.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_71');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_71');\" ><span id=\"footnote_plugin_tooltip_29209_1_71\" class=\"footnote_plugin_tooltip_text\">[71]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_71\" class=\"footnote_tooltip\">See Tachiona v. Mugabe, 169 F. Supp. 2d 259, 268\u201373 (S.D.N.Y. 2001), aff\u2019d in part, rev\u2019d in part and remanded sub nom. Tachiona v. United States, 386 F.3d 205 (2d Cir. 2004) (provided extended&nbsp;&#x2026; <span class=\"footnote_tooltip_continue\"  onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_71');\">Continue reading<\/span><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_71').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_71', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>But the State Department did not always follow its own stated guidelines, often preferring instead to use an <em>ad hoc<\/em> approach, by which it found ways to permit claims against disliked adversaries and to reject those made against friendly allies. Its guidance on these matters, which was binding on federal courts, lacked consistent reasoning or a sufficient regard for the commercial rights of American citizens wronged by the practices of foreign governments and their agencies.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_72');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_72');\" ><span id=\"footnote_plugin_tooltip_29209_1_72\" class=\"footnote_plugin_tooltip_text\">[72]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_72\" class=\"footnote_tooltip\"><em>See id<\/em>.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_72').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_72', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>Federal judges, members of Congress, and various commentators expressed their misgivings about this practice, and Congress eventually intervened to enact the Foreign Sovereign Immunities Act of 1976, which is codified at 28 U.S.C. \u00a7\u00a7 1604-1607, and which replaced the State Department\u2019s inconsistently applied restrictive version of sovereign immunity.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_73');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_73');\" ><span id=\"footnote_plugin_tooltip_29209_1_73\" class=\"footnote_plugin_tooltip_text\">[73]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_73\" class=\"footnote_tooltip\"><em>See id.<\/em><\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_73').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_73', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script>The principal aim was to afford predictable rules, so that Americans engaged in foreign commerce or affected by it would have a clear understanding of their rights under American law against foreign sovereigns that caused them harm in commercial dealings.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_74');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_74');\" ><span id=\"footnote_plugin_tooltip_29209_1_74\" class=\"footnote_plugin_tooltip_text\">[74]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_74\" class=\"footnote_tooltip\"><em>id<\/em>.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_74').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_74', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<p>The Foreign Sovereign Immunities Act is codified at 28 U.S.C. \u00a7\u00a7 1604-1607 and seemingly inverts the ancient rule on sovereign immunity. Under this law, foreign governments and their political subdivisions (collectively, \u201cforeign sovereigns\u201d), cannot be sued in a United States federal court for (1) punitive damages in any case or (2) claims other than the following categories of claims, all of which are expressly allowed, and which apparently cover many if not most kinds of claims:<\/p>\n<ul>\n<li>Waiver of Sovereign Immunity. Any claim that a foreign sovereign defendant permits to be maintained against it in the United States (waiver of immunity).<\/li>\n<li>Commercial Claims. Any claim that arises from a foreign sovereign\u2019s commercial activity in the United States or its commercial activity abroad that has had a \u201cdirect effect in the United States.\u201d<\/li>\n<li>Recovery of Ill-Gotten Property. Any claim against a foreign sovereign to recover property taken in violation of international law (or its fruits), so long as the ill-gotten property is either (a) located in the United States and used in commercial activity; or (b) held by a foreign sovereign that engages in commercial activity in the United States.<\/li>\n<li>Vindicating Property Rights. Any claim against a foreign sovereign to establish either (a) a right to real property located in the United States; or (b) a right by succession to any property located in the United States.<\/li>\n<li>Torts. Any claim against a foreign sovereign for a tort committed by its officer or employee during the course of duty; but any such claim is limited to compensatory damages for harm to a person or property in the United States.<\/li>\n<li>Compelling Arbitration. Any claim against a foreign sovereign to compel arbitration proceedings authorized by a contract.<\/li>\n<li>Maritime Liens. Admiralty proceedings to enforce a maritime lien for commercial debt against a foreign sovereign\u2019s vessel or cargo.<\/li>\n<li>Damages for Acts of Terrorism. Any claim against a foreign sovereign to recover losses for physical injury or death caused by an act of terrorism committed or abetted by the sovereign\u2019s officer or employee during the course of duty.<\/li>\n<li>Counterclaims. Certain counterclaims made by a counterclaimant whom the foreign sovereign has sued in a federal district court.<\/li>\n<\/ul>\n<p>In other words, foreign sovereigns cannot be sued in a U.S. federal court for punitive damages or claims not expressly allowed under 28 U.S.C. \u00a7\u00a7 1605-1607, but the allowed claims are for various kinds of commercial claims, property claims, torts, maritime liens, arbitration orders, acts of terrorism, and counterclaims, as well as any claim for which a foreign sovereign has waived its sovereign immunity. That is a far cry from ancient sovereign immunity, which protected each foreign sovereign from all claims that a private citizen might wish to bring against it in his home country. Under the Foreign Sovereign Immunities Act, private American citizens can sue foreign sovereigns in U.S. federal court for many if not most kinds of claims, but subject to the specific limitations described above. A private American citizen therefore can usually sue a foreign sovereign or its agency for any antitrust claim that concerns commercial activity in the United States or commercial activity abroad that has had a direct, substantial effect on domestic commercial activities.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_75');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_75');\" ><span id=\"footnote_plugin_tooltip_29209_1_75\" class=\"footnote_plugin_tooltip_text\">[75]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_75\" class=\"footnote_tooltip\"><em>See <\/em>28 U.S.C. \u00a7\u00a7 1604-1607.<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_75').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_75', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<h3 id=\"s\"><strong>The Doctrine of Judicial Comity<\/strong><\/h3>\n<p>Nonetheless, the federal courts have discretion to decline to adjudicate an antitrust challenge to commercial activity that occurs in the foreign commerce of the United States and is therefore subject to federal antitrust law, but is more appropriately resolved by a foreign tribunal in accordance with its own laws. This discretionary immunity is often referred to as \u201cjudicial comity\u201d and affords antitrust immunity on a case-by-case basis when (1) the foreign tribunal has the stronger interest in applying its own laws to the case in question; or (2) the United States intervenes in the case to affirm that its foreign policy favors referring the case to the foreign tribunal for resolution according to its own laws.<span class=\"footnote_referrer\"><a role=\"button\" tabindex=\"0\" onclick=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_76');\" onkeypress=\"footnote_moveToReference_29209_1('footnote_plugin_reference_29209_1_76');\" ><span id=\"footnote_plugin_tooltip_29209_1_76\" class=\"footnote_plugin_tooltip_text\">[76]<\/span><\/a><span id=\"footnote_plugin_tooltip_text_29209_1_76\" class=\"footnote_tooltip\"><em>See<\/em> <em>F. Hoffmann-La Roche Ltd. v. Empagran S.A.<\/em>, 542 U.S. 155, 163\u201366 (2004).<\/span><\/span><script type=\"text\/javascript\"> jQuery('#footnote_plugin_tooltip_29209_1_76').tooltip({ tip: '#footnote_plugin_tooltip_text_29209_1_76', tipClass: 'footnote_tooltip', effect: 'fade', predelay: 0, fadeInSpeed: 200, delay: 400, fadeOutSpeed: 200, position: 'top center', relative: true, offset: [-7, 0], });<\/script><\/p>\n<hr \/>\n<p>Article by <a href=\"https:\/\/www.markhamlawfirm.com\/mystaging\/our-team\/william-markham\/\" target=\"_blank\" rel=\"noopener noreferrer\">William Markham<\/a>, San Diego Attorney. \u00a9 2021.<\/p>\n<p>[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n<div class=\"speaker-mute footnotes_reference_container\"> <div class=\"footnote_container_prepare\"><p><span role=\"button\" tabindex=\"0\" class=\"footnote_reference_container_label pointer\" onclick=\"footnote_expand_collapse_reference_container_29209_1();\">References<\/span><span role=\"button\" tabindex=\"0\" class=\"footnote_reference_container_collapse_button\" style=\"display: none;\" onclick=\"footnote_expand_collapse_reference_container_29209_1();\">[<a id=\"footnote_reference_container_collapse_button_29209_1\">+<\/a>]<\/span><\/p><\/div> <div id=\"footnote_references_container_29209_1\" style=\"\"><table class=\"footnotes_table footnote-reference-container\"><caption class=\"accessibility\">References<\/caption> <tbody> \r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_1\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_1');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>1<\/a><\/th> <td class=\"footnote_plugin_text\">Justice Holmes&#8217; stated ground was that baseball was not &#8220;interstate commerce&#8221; of the kind that Congress was empowered to regulate by the U.S. Constitution&#8217;s Commerce Clause, so that Congress\u2019 Sherman Act could not reach any aspect of &#8220;the business of baseball.&#8221; <em>See Federal Baseball Club v. National League,<\/em> 259 U.S. 200, 208-09 (1922). That approach to the Commerce Clause has long since been abrogated, but the Supreme Court has allowed the baseball exemption to remain in place on the doubtful ground that Congress has chosen not to disturb Justice Holmes&#8217; ruling, and that Congress rather than a court should repeal his expansive exemption of the business of baseball from federal antitrust law, lest a court ruling upset the settled expectations of ballclub owners. <em>See <\/em><em>Toolson v. New York Yankees, Inc.<\/em>, 346 U.S. 356, 356\u201357 (1953) (holding that the baseball industry had relied for longer than thirty years on the baseball exemption established in\u00a0<em>Federal Baseball<\/em>, and that in consequence Congress alone could properly restore prospective antitrust protections for any activity that is part of the \u201cbusiness of baseball,\u201d since to act otherwise would undermine the reasonable expectations developed by those in the baseball industry who had acted in reliance on its exemption from antitrust law);\u00a0<em>Flood v. Kuhn<\/em>, 407 U.S. 258, 283 (1972) (stating same grounds as\u00a0<em>Toolson<\/em> in a longer opinion). Congress, for its part, enacted a law in 1998 that afforded a very limited repeal of the baseball exemption: it permits major-league ballplayers to entertain employment offers from rival clubs and thus ended the owners&#8217; use of the &#8220;reserve clause,&#8221; which until then was always included in ballplayers&#8217; contracts and authorized each team to nix any rival employment offer made to any player on the team. Otherwise, the baseball exemption remains in effect, placing all other aspects of the business of baseball beyond the reach of federal antitrust law. At the same time, the federal courts have not permitted state antitrust laws to regulate baseball, ruling that to do so would likely subject baseball to inconsistent rulings. <em>See<\/em>\u00a0<em>Major League Baseball v. Crist<\/em>, 331 F.3d 1177, 1185 (11th Cir. 2003). But any such ruling cannot be reconciled with Justice Holmes&#8217; grant of a federal exemption: if baseball is not interstate commerce, then it must be intrastate commerce that each state can regulate. On this matter I believe that the Supreme Court has ruled incorrectly: the onus should be on Congress to enact a statutory exemption for baseball if it wishes to place this business beyond the reach of federal antitrust law. In the meantime, the business of baseball enjoys a singular, indefensible exemption from antitrust law that has harmed minor-league players, fans, cities, and others. I address the baseball exemption to antitrust below.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_2\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_2');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>2<\/a><\/th> <td class=\"footnote_plugin_text\">15 U.S.C. \u00a7\u00a7 1011-1012<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_3\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_3');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>3<\/a><\/th> <td class=\"footnote_plugin_text\">See 15 U.S.C.A. \u00a7 1012<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_4\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_4');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>4<\/a><\/th> <td class=\"footnote_plugin_text\">State-action immunity is a doctrine established and refined by a series of Supreme Court decisions to address the unresolved tension between Congress&#8217; supreme authority to enact laws in furtherance of its enumerated powers, such as the Sherman Act and other federal antitrust statutes, and each state&#8217;s sovereign authority to regulate its own affairs and internal commerce.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_5\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_5');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>5<\/a><\/th> <td class=\"footnote_plugin_text\">28 U.S.C. \u00a7\u00a7 1604-1607<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_6\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_6');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>6<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Octane Fitness, LLC v. ICON Health &amp; Fitness, Inc.<\/em>, 572 U.S. 545, 555\u201356 (2014) (\u201cUnder the <em>Noerr\u2013Pennington<\/em> doctrine\u2014established by <em>Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc.<\/em>, 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961), and <em>United Mine Workers v. Pennington<\/em>, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965)\u2014defendants are immune from antitrust liability for engaging in conduct (including litigation) aimed at influencing decisionmaking by the government.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_7\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_7');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>7<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See E. R. R. Presidents Conf. v. Noerr Motor Freight, Inc.<\/em>, 365 U.S. 127, 135 (1961) (\u201c[N]o violation of the [Sherman] Act can be predicated upon mere attempts to influence the passage or enforcement of laws.\u201d); <em>United Mine Workers of Am. v. Pennington<\/em>, 381 U.S. 657, 670 (1965) (\u201c<em>Noerr<\/em> shields from the Sherman Act a concerted effort to influence public officials regardless of intent or purpose&#8230;. Joint efforts to influence public officials do not violate the antitrust laws even though intended to eliminate competition. Such conduct is not illegal, either standing alone or as part of a broader scheme itself violative of the Sherman Act.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_8\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_8');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>8<\/a><\/th> <td class=\"footnote_plugin_text\">Excerpt from the First Amendment of the U.S. Constitution.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_9\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_9');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>9<\/a><\/th> <td class=\"footnote_plugin_text\">Excerpt from the Fourteenth Amendment of the U.S. Constitution.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_10\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_10');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>10<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> <em>Williams-Yulee v. Fla. Ba<\/em>r, 575 U.S. 433, 442\u201344 (2015) (discussing standard of review for state or federal law that restricts a right guaranteed by the First Amendment, and holding that &#8220;a State may restrict the speech of a judicial candidate only if the restriction is narrowly tailored to serve a compelling interest.&#8221;).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_11\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_11');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>11<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See U.S. Futures Exch., L.L.C. v. Bd. of Trade of the City of Chicago, Inc.<\/em>, 953 F.3d 955, 960 (7th Cir. 2020) (\u201cThe [<em>Noerr-Pennington<\/em>] doctrine flows from First Amendment origins: antitrust laws do not supersede the people\u2019s right to petition their government in favor of a desired monopoly.\u201d); <em>Noerr<\/em>, 365 U.S. at 136\u201338 (\u201c[T]he Sherman Act does not prohibit two or more persons from associating together in an attempt to persuade the legislature or the executive to take particular action with respect to a law that would produce a restraint or a monopoly&#8230;. [S]uch a construction of the Sherman Act would raise important constitutional questions. The right of petition is one of the freedoms protected by the Bill of Rights, and we cannot, of course, lightly impute to Congress an intent to invade these freedoms. Indeed, such an imputation would be particularly unjustified&#8230;.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_12\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_12');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>12<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See id<\/em>., 365 U.S. at 136\u201338 (\u201c[S]uch a holding would substantially impair the power of government to take actions through its legislature and executive that operate to restrain trade. In a representative democracy such as this, these branches of government act on behalf of the people and, to a very large extent, the whole concept of representation depends upon the ability of the people to make their wishes known to their representatives. To hold that the government retains the power to act in this representative capacity and yet hold, at the same time, that the people cannot freely inform the government of their wishes would impute to the Sherman Act a purpose to regulate, not business activity, but political activity, a purpose which would have no basis whatever in the legislative history of that Act&#8230;. [O]f at least equal significance, such a construction of the Sherman Act would raise important constitutional questions. The right of petition is one of the freedoms protected by the Bill of Rights, and we cannot, of course, lightly impute to Congress an intent to invade these freedoms. Indeed, such an imputation would be particularly unjustified in this case in view of all the countervailing considerations enumerated above.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_13\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_13');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>13<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See U.S. Futures Exch<\/em>., 953 F.3d 955, 960.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_14\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_14');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>14<\/a><\/th> <td class=\"footnote_plugin_text\"><em>Noerr<\/em>, 365 U.S. at 136 (petitioning activity includes any effort to influence or obtain relief from the legislature or executive branch of government);\u00a0<em>id.<\/em> at 139\u201340 (petitioning activity includes any publicity campaign undertaken to influence decisionmaking by any governmental authority); <em>California Motor Transp. Co. v. Trucking Unlimited<\/em>, 404 U.S. 508, 510 (1972) (petitioning activity includes claims made to any court or administrative agency, since the right of petition includes &#8220;the approach of citizens or groups of them to administrative agencies (which are both creatures of the legislature, and arms of the executive) and to courts, the third branch of Government. Certainly the right to petition extends to all departments of the Government. The right of access to the courts is indeed but one aspect of the right of petition.&#8221;).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_15\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_15');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>15<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See U.S. Futures Exch<\/em>., 953 F.3d at 960.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_16\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_16');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>16<\/a><\/th> <td class=\"footnote_plugin_text\">15 U.S.C. \u00a7 26.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_17\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_17');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>17<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See U.S. Futures Exch<\/em>., 953 F.3d at 960 (\u201cNoerr-Pennington immunity is not absolute&#8230;. Exceptions exist for petitioners who present fraudulent misrepresentations or bring sham lawsuits.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_18\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_18');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>18<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See U.S. Futures Exch.<\/em>, 953 F.3d at 960 (\u201cFraudulent misrepresentations made in an adjudicative proceeding before an administrative agency are not protected from antitrust liability. Those made in a legislative, political setting, however, enjoy immunity.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_19\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_19');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>19<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Walker Process Equip., Inc. v. Food Mach. &amp; Chem. Corp.<\/em>, 382 U.S. 172, 174 (1965) (\u201cThe enforcement of a patent procured by fraud on the Patent Office may be violative of \u00a7 2 of the Sherman Act provided the other elements necessary to a \u00a7 2 case are present. In such event the treble damage provisions of \u00a7 4 of the Clayton Act would be available to an injured party.\u201d); <em>see also Nobelpharma AB v. Implant Innovations, Inc.<\/em>, 141 F.3d 1059, 1070 (Fed. Cir. 1998) (fraud on the patent office can rise to the level of predicate antitrust conduct when the fraud entails a \u201cclear intent to deceive,\u201d such as a positive misrepresentation of material fact or the knowing concealment of material information, but not mere \u201cinequitable conduct\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_20\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_20');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>20<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Pro. Real Est. Invs., Inc. v. Columbia Pictures Indus., Inc.<\/em>, 508 U.S. 49, 60\u201361 (1993) (\u201cPRE\u201d) (\u201cWe now outline a two-part definition of \u2018sham\u2019 litigation. First, the lawsuit must be objectively baseless in the sense that no reasonable litigant could realistically expect success on the merits. If an objective litigant could conclude that the suit is reasonably calculated to elicit a favorable outcome, the suit is immunized under <em>Noerr<\/em>, and an antitrust claim premised on the sham exception must fail. Only if challenged litigation is objectively meritless may a court examine the litigant\u2019s subjective motivation. Under this second part of our definition of sham, the court should focus on whether the baseless lawsuit conceals an attempt to interfere directly with the business relationships of a competitor, through the use of the governmental process\u2014as opposed to the outcome of that process\u2014as an anticompetitive weapon.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_21\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_21');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>21<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See PRE<\/em>, 508 U.S. at 60\u201361 (an \u201cobjectively baseless\u201d lawsuit is one \u201cthat no reasonable litigant could realistically expect success on the merits.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_22\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_22');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>22<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See California Motor Transp. Co. v. Trucking Unlimited<\/em>, 404 U.S. 508, 511\u201312 (1972) (petitioners\u2019 purported petitioning conduct is a mere sham and therefore not entitled to Noerr-Pennington immunity, when petitioners \u201cinstituted [numerous] proceedings and actions [against a rival] with or without probable cause, and regardless of the merits of the cases\u201d in order to overwhelm the rival and thereby deprive it of its own access to the courts or administrative tribunals); <em>see also Hanover 3201 Realty, LLC v. Vill. Supermarkets, Inc.<\/em>, 806 F.3d 162, 180 (3d Cir. 2015) (\u201cWe agree with the approach to [sham litigation]&#8230; adopted by the Second, Fourth, and Ninth Circuits. As stated in <em>Noerr<\/em> itself, the ultimate purpose of this inquiry is to determine whether the petitioning activity is a \u2018mere sham to cover what is actually nothing more than an attempt to interfere directly with the business relationships of a competitor.\u2019 The best way to make that determination depends on whether there is a single filing or a series of filings. Where there is only one alleged sham petition&#8230;. <em>Professional Real Estate<\/em> requires a showing of objective baselessness before looking into subjective motivations in order to prevent any undue chilling of First Amendment activity. In contrast, a more flexible standard is appropriate when dealing with a pattern of petitioning. Not only do pattern cases often involve more complex fact sets and a greater risk of antitrust harm, but the reviewing court sits in a much better position to assess whether a defendant has misused the governmental process to curtail competition. As a result, even if a small number of the petitions turn out to have some objective merit, that should not automatically immunize defendants from liability.\u201d); <em>but cf. U.S. Futures Exch.<\/em>, 953 F.3d at 964\u201365 (\u201cWe do not agree California Motor provides a separate rubric to use whenever a \u201cpattern\u201d of sham filings is alleged. The First Circuit rejected this same reading of <em>California Motor<\/em> recently in <em>Puerto Rico Telephone Co. v. San Juan Cable LLC<\/em>, 874 F.3d 767 (2017), splitting from the four circuit opinions cited [above]&#8230;. We stand with the First Circuit&#8230;. We, too, find little logic in concluding a petitioner loses the right to file an objectively reasonable petition merely because it chooses to exercise that right more than once in the course of pursuing its desired outcome&#8230;. As the [Supreme] Court made clear in <em>PRE<\/em> [cited above], the sham exception\u2019s objective component is indispensable and <em>California Motor<\/em> does not suggest otherwise.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_23\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_23');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>23<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See U.S. Futures Exch.<\/em>, 953 F.3d at 960; <em>Hanover<\/em> <em>3201 Realty<\/em>, 806 F.3d at 180.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_24\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_24');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>24<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Medtronic, Inc. v. Lohr<\/em>, 518 U.S. 470, 475 (1996) (\u201cThroughout our history the several States have exercised their police powers to protect the health and safety of their citizens. Because these are primarily, and historically, matters of local concern, the States traditionally have had great latitude under their police powers to legislate as to the protection of the lives, limbs, health, comfort, and quiet of all persons.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_25\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_25');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>25<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> <em>Parker v. Brown<\/em>, 317 U.S. 341, 359\u201360 (1943) (\u201cThe governments of the states are sovereign within their territory save only as they are subject to the prohibitions of the Constitution or as their action in some measure conflicts with powers delegated to the National Government, or with Congressional legislation enacted in the exercise of those powers. This Court has repeatedly held that the grant of power to Congress by the Commerce Clause did not wholly withdraw from the states the authority to regulate the commerce with respect to matters of local concern, on which Congress has not spoken. A fortiori there are many subjects and transactions of local concern &#8230; which are within the regulatory and taxing power of the states, so long as state action serves local ends and does not discriminate against [interstate] commerce, even though the exercise of those powers may materially affect it.&#8221;).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_26\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_26');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>26<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> <em>Gibbons v. Ogden<\/em>, 22 U.S. 1, 210\u201311 (1824) (Where \u201ca law passed by a State, in the exercise of its acknowledged sovereignty, comes into conflict with a law or treaty properly passed by Congress,\u201d the state law \u201cmust yield\u201d to the federal law, since the Supremacy Clause of the U.S. Constitution requires this outcome, and therefore \u201c[i]n every such case, the act of Congress, or the treaty, is supreme; and the law of the State, though enacted in the exercise of powers not controverted, must yield to it.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_27\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_27');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>27<\/a><\/th> <td class=\"footnote_plugin_text\">See U.S. Constitution, Article I, Section 8, which in pertinent part empowers Congress \u201cto regulate Commerce with foreign Nations, and among the several States&#8230;.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_28\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_28');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>28<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Selevan v. New York Thruway Auth.<\/em>, 584 F.3d 82, 90 (2d Cir. 2009) (\u201cIn implementing the Commerce Clause, the Supreme Court has adhered strictly to the principle that the right to engage in interstate commerce is not the gift of a state, and that a state cannot regulate or restrain it. It flows from this principle that the negative or dormant implication of the Commerce Clause prohibits state taxation or regulation that discriminates against or unduly burdens interstate commerce and thereby impedes free private trade in the national marketplace.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_29\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_29');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>29<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Selevan<\/em>, 584 F.3d at 90 (\u201cA state statute or regulation may violate the dormant Commerce Clause only if it (1) clearly discriminates against interstate commerce in favor of intrastate commerce, (2) imposes a burden on interstate commerce incommensurate with the local benefits secured, or (3) has the practical effect of extraterritorial control of commerce occurring entirely outside the boundaries of the state in question.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_30\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_30');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>30<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Philip Morris Inc. v. Harshbarger<\/em>, 122 F.3d 58, 67\u201368 (1st Cir. 1997) (to determine whether a federal law preempts state laws on the same subject-matter, the \u201ccrucial inquiry\u201d is whether \u201cCongress intend[ed] to exercise its constitutionally delegated authority to set aside the laws of a State?\u201d \u2013 which is answered by considering \u201cthe explicit statutory language and the structure and purpose of the statute\u201d and, where a state police power is concerned, by assuming that \u201cfederal law does not supersede a state\u2019s historic police powers unless that is the clear and manifest purpose of Congress.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_31\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_31');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>31<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Parker<\/em>, 317 U.S. at 350\u201351 (\u201cWe find nothing in the language of the Sherman Act or in its history which suggests that its purpose was to restrain a state or its officers or agents from activities directed by its legislature. In a dual system of government in which, under the Constitution, the states are sovereign, save only as Congress may constitutionally subtract from their authority, an unexpressed purpose to nullify a state\u2019s control over its officers and agents is not lightly to be attributed to Congress. The Sherman Act makes no mention of the state as such, and gives no hint that it was intended to restrain state action or official action directed by a state&#8230;. There is no suggestion of a purpose to restrain state action in the Act\u2019s legislative history.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_32\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_32');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>32<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See id<\/em>.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_33\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_33');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>33<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Cmty. Commc\u2019ns Co. v. City of Boulder, Colo.<\/em>, 455 U.S. 40, 51 (1982) (\u201c[M]unicipal conduct\u201d is immune from federal antitrust law only when undertaken \u201cpursuant to state policy to displace competition with regulation or monopoly public service,\u201d and this policy must be \u201cclearly articulated and affirmatively expressed.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_34\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_34');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>34<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> Local Government Antitrust Act of 1984, 15 U.S.C. \u00a7\u00a7 34-36 <\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_35\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_35');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>35<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Lancaster Cmty. Hosp. v. Antelope Valley Hosp. Dist.<\/em>, 940 F.2d 397, 404 (9th Cir. 1991).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_36\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_36');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>36<\/a><\/th> <td class=\"footnote_plugin_text\">S<em>ee id.<\/em> (\u201c[The Local Government Antitrust Act of 1984] precludes the recovery of damages, costs, or attorneys fees, on the basis of 15 U.S.C. \u00a7\u00a7 15, 15a, or 15c, from local government entities. However, the provision that mandates that costs and attorneys fees be awarded to plaintiffs who substantially prevail in actions for injunctive relief is 15 U.S.C. \u00a7 26.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_37\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_37');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>37<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See California Retail Liquor Dealers Ass\u2019n v. Midcal Aluminum, Inc.<\/em>, 445 U.S. 97, 105 (1980) (establishing doctrine); <em>F.T.C. v. Phoebe Putney Health Sys., Inc<\/em>., 568 U.S. 216, 225 (2013) (\u201c[G]iven the fundamental national values of free enterprise and economic competition that are embodied in the federal antitrust laws, state-action immunity is disfavored&#8230;. Consistent with this preference, we recognize state-action immunity only when it is clear that the challenged anticompetitive conduct is undertaken pursuant to a regulatory scheme that is the State\u2019s own. Accordingly, closer analysis is required when the activity at issue is not directly that of the State itself, but rather is carried out by others pursuant to state authorization. When determining whether the anticompetitive acts of private parties are entitled to immunity, we employ a two-part test, requiring first that the challenged restraint be one clearly articulated and affirmatively expressed as state policy, and second that the policy be actively supervised by the State.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_38\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_38');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>38<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See <\/em>McCarran-Ferguson Act of 1945, which is codified at 15 U.S.C. \u00a7\u00a7 1011-1012.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_39\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_39');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>39<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See <\/em>Webb-Pomerene Act of 1918, which is codified at 15 U.S.C. \u00a7\u00a7 61-65; <em>see also <\/em>Export Trading Company Act of 1982, which is codified at 15 U.S.C. \u00a7 6a.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_40\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_40');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>40<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See <\/em>Foreign Trade Antitrust Improvements Act of 1982, which is codified at 15 U.S.C. \u00a7 6a.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_41\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_41');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>41<\/a><\/th> <td class=\"footnote_plugin_text\">46 U.S.C. \u00a7\u00a7 1701-1720<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_42\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_42');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>42<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See <\/em>Norris-LaGuardia Act of 1932, which is codified at 29 U.S.C. \u00a7\u00a7 101-115, as well as Section 6 of the Clayton Act of 1914, which is codified at 15 U.S.C. \u00a7 17.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_43\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_43');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>43<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See <\/em>Section 6 of the Clayton Act and the Capper-Volstead Act of 1922, which is codified at 7 U.S.C. \u00a7 291.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_44\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_44');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>44<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> Health Care Quality Improvement Act of 1986, which is codified at 42 U.S.C. \u00a7\u00a7 11111 <em>et seq<\/em>.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_45\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_45');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>45<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> 50 U.S.C. \u00a7 2062<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_46\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_46');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>46<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> Newspaper Preservation Act in 1970, which is codified at 15 U.S.C. \u00a7\u00a7 1801-1804.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_47\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_47');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>47<\/a><\/th> <td class=\"footnote_plugin_text\"><\/u><em>See<\/em> 12 U.S.C.\u00a7 1828c.<span style=\"text-decoration: underline;\"><\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_48\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_48');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>48<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> Soft Drink Interbrand Competition Act, which is codified at 15 U.S.C. \u00a7\u00a7 3501\u20133503.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_49\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_49');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>49<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> Charitable Donation Antitrust Immunity Act of 1997, which is codified at 15 U.S.C. \u00a7 37(a).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_50\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_50');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>50<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> Pension Funding Equity Act of 2004, which is codified at 15 U.S.C. \u00a7 37b(b)(2).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_51\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_51');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>51<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Federal Baseball Club v. National League,<\/em> 259 U.S. 200, 208-09 (1922) (finding that the \u201cbusiness of baseball\u201d did not constitute interstate commerce that Congress had authority to regulate); <em>see also<\/em><em>Toolson v. New York Yankees, Inc.<\/em>, 346 U.S. 356, 356\u201357 (1953) (holding that the baseball industry had relied for longer than thirty years on the baseball exemption established in <em>Federal Baseball<\/em>, and that in consequence Congress alone could properly restore prospective antitrust protections for any activity that is part of the &#8220;business of baseball,&#8221; since to act otherwise would undermine the reasonable expectations developed by those in the baseball industry who had acted in reliance on its exemption from antitrust law); <em>Flood v. Kuhn<\/em>, 407 U.S. 258, 283 (1972) (stating same grounds as <em>Toolson<\/em> in a longer opinion).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_52\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_52');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>52<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Federal Baseball<\/em>, 259 U.S. 200, 208-09 (1922).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_53\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_53');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>53<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Wickard v. Filburn<\/em>, 317 U.S. 111, 124 (1942) (\u201cThe commerce power is not confined in its exercise to the regulation of commerce among the states. It extends to those activities intrastate which so affect interstate commerce&#8230;.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_54\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_54');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>54<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See <\/em><em>Toolson, <\/em>346 U.S. 356\u201357; <em>Flood<\/em>, 407 U.S. at 283.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_55\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_55');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>55<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See <\/em>the Curt Flood Act of 1998, which is codified at 15 U.S.C. \u00a7 26b.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_56\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_56');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>56<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See, e.g., City of San Jose v. Off. of the Com&#8217;r of Baseball<\/em>, 776 F.3d 686, 690\u201391 (9th Cir. 2015).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_57\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_57');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>57<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> Phillip E. Areeda (late) &amp; Herbert Hovenkamp,<em> Antitrust Law: An Analysis of Antitrust Principles and Their Application<\/em> \u00b6251. (4th and 5th Editions 2015-2021) (\u201c\u201d[B]eginning with Justice Holmes\u2019s decision in Federal Baseball Club, the basis of the Supreme Court\u2019s refusal to apply the Sherman Act was that baseball was not \u2018commerce.\u2019 Since the \u2018commerce\u2019 language in the Sherman Act tracks that in the Commerce Clause, that holding was tantamount to one that the Commerce Clause did not permit Congress to regulate organized baseball. But the function of the Commerce Clause is to allocate regulatory power as between the federal government and the states. As a result, <em>Federal Baseball Club<\/em> is best read not as an antitrust policy decision that baseball should not be regulated but as a conclusion that in the assignment of regulatory powers, the power to regulate baseball fell to the states rather than to the federal government.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_58\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_58');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>58<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> <em>Major League Baseball v. Crist<\/em>, 331 F.3d 1177, 1185 (11th Cir. 2003) (finding that baseball is interstate in character and therefore requires uniform national regulation, and that the chosen regulation is to deny baseball antitrust protections, except for contract negotiations between major-league players at major-league teams.).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_59\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_59');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>59<\/a><\/th> <td class=\"footnote_plugin_text\"><em>see Grp. Life &amp; Health Ins. Co. v. Royal Drug Co.<\/em>, 440 U.S. 205, 210\u201311 (1979) (\u201cThe statutory language [of the McCarran-Ferguson Act] does not exempt the business of insurance companies from the scope of the antitrust laws. The exemption is for the \u2018business of insurance,\u2019 not the \u2018business of insurers\u2019\u201d); <em>Sec. &amp; Exch. Comm\u2019n v. Nat\u2019l Sec., Inc.<\/em>, 393 U.S. 453, 459\u201360 (1969) (\u201cThe statute did not purport to make the States supreme in regulating all the activities of insurance companies; its language refers not to the persons or companies who are subject to state regulation, but to laws \u2018regulating the business of insurance.\u2019 Insurance companies may do many things which are subject to paramount federal regulation; only when they are engaged in the \u2018business of insurance\u2019 does the statute apply.\u201d).<\/p>\n<p>Whether an insurer\u2019s challenged practice constitutes an insurance activity sometimes gives rise to difficult judgment calls, but over time the courts have settled on a reasonably clear standard, finding that the business of insurance means the spreading of risk, or, more precisely, the insurer\u2019s assumption of a specified risks otherwise borne by its insureds in exchange for fees.(((<em>See Royal Drug<\/em>, 440 U.S. at 211 (\u201cThe primary elements of an insurance contract are the spreading and underwriting of a policyholder\u2019s risk. It is characteristic of insurance that a number of risks are accepted, some of which involve losses, and that such losses are spread over all the risks so as to enable the insurer to accept each risk at a slight fraction of the possible liability upon it.\u201d) (<em>quoting<\/em> G. Couch, <em>Cyclopedia of Insurance Law<\/em> \u00a7 1:3 (2d ed. 1959)).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_60\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_60');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>60<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See id.<\/em><\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_61\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_61');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>61<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Sec. &amp; Exch. Comm&#8217;n v. Nat&#8217;l Sec., Inc.<\/em>, 393 U.S. 453, 460, 89 S. Ct. 564, 568\u201369, 21 L. Ed. 2d 668 (1969).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_62\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_62');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>62<\/a><\/th> <td class=\"footnote_plugin_text\">see <em>Sec. &amp; Exch. Comm\u2019n v. Variable Annuity Life Ins. Co. of Am.<\/em>, 359 U.S. 65, 73 (1959).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_63\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_63');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>63<\/a><\/th> <td class=\"footnote_plugin_text\"><em>see Royal Drug<\/em>, 440 U.S. 205, 214 (1979).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_64\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_64');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>64<\/a><\/th> <td class=\"footnote_plugin_text\"><em>see, e.g., Pireno v. New York State Chiropractic Association<\/em>, 650 F.2d 387 (2d Cir. 1981); <em>St. Bernard Hospital v. Hospital Service Assn. of New Orleans, Inc.<\/em>, 618 F.2d 1140, 1145 (5th Cir. 1980); <em>Bartholomew v. Virginia Chiropractors Association<\/em>, 612 F.2d 812, 819 (4th Cir. 1979); <em>Hoffman v. Delta Dental Plan of Minnesota<\/em>, 517 F. Supp. 564, 569 (D. Minn. 1981).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_65\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_65');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>65<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> <em>Royal Drug<\/em>, 440 U.S. at 211.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_66\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_66');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>66<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Silver v. New York Stock Exch.<\/em>, 373 U.S. 341, 357 (1963) (\u201cThe Securities Exchange Act contains no express exemption from the antitrust laws&#8230;. This means that any repealer of the antitrust laws must be discerned as a matter of implication, and it is a cardinal principle of construction that repeals by implication are not favored. Repeal is to be regarded as implied only if necessary to make the Securities Exchange Act work, and even then only to the minimum extent necessary.\u201d); <em>Gordon v. New York Stock Exch., Inc.<\/em>, 422 U.S. 659, 682 (1975) (\u201cThis Court has considered the issue of implied repeal of the antitrust laws in the context of a variety of regulatory schemes and procedures. Certain axioms of construction are now clearly established. Repeal of the antitrust laws by implication is not favored and not casually to be allowed. Only where there is a plain repugnancy between the antitrust and regulatory provisions will repeal be implied.\u201d); <em>Phonetele, Inc. v. Am. Tel. &amp; Tel. Co.<\/em>, 664 F.2d 716, 726 (9th Cir. 1981), <em>modified<\/em>, (9th Cir. Mar. 15, 1982) (\u201c[A]ntitrust immunities are to be strictly construed and not lightly inferred. An implied immunity may be found only where there is a convincing showing of clear repugnancy between the antitrust laws and the regulatory system.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_67\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_67');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>67<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See W.S. Kirkpatrick &amp; Co. v. Env&#8217;t Tectonics Corp., Int\u2019l<\/em>, 493 U.S. 400, 404 (1990) (In earlier times, the doctrine of acts of state \u201crest[ed] upon the highest considerations of international comity and expediency,\u201d but in the modern era it is honored because of \u201cthe strong sense of the Judicial Branch that its engagement in the task of passing on the validity of foreign acts of state may hinder the [other Branches\u2019] conduct of foreign affairs.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_68\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_68');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>68<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See id<\/em>. 493 U.S. at 405 (\u201c[T]he act of state doctrine [is] applicable [when] the relief sought or the defense interposed would have required a court in the United States to declare invalid the official act of a foreign sovereign performed within its own territory.\u201d).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_69\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_69');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>69<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Int&#8217;l Ass&#8217;n of Machinists &amp; Aerospace Workers, (IAM) v. Org. of Petroleum Exporting Countries (OPEC)<\/em>, 649 F.2d 1354, 1361\u201362 (9th Cir. 1981), <em>disapproved of by Siderman de Blake v. Republic of Argentina<\/em>, 965 F.2d 699 (9th Cir. 1992) (&#8220;The act of state doctrine is applicable in this case. The courts should not enter at the will of litigants into a delicate area of foreign policy which the executive and legislative branches have chosen to approach with restraint. The issue of whether the [Foreign Sovereign Immunities Act] allows jurisdiction in this case need not be decided, since a judicial remedy is inappropriate regardless of whether jurisdiction exists. Similarly, we need not reach the issues regarding the indirect-purchaser rule, the extra-territorial application of the Sherman Act, the definition of \u201cperson\u201d under the Sherman Act, and the propriety of injunctive relief.&#8221;).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_70\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_70');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>70<\/a><\/th> <td class=\"footnote_plugin_text\">See <i>Samantar v. Yousuf<\/i>, 560 U.S. 305, 311 (2010) (&#8220;The <span id=\"co_term_3970\" class=\"co_concept_13_20 MultiColor--default\">doctrine<\/span>\u00a0of\u00a0<span id=\"co_term_3972\" class=\"co_concept_25_31 co_concept_25_50 MultiColor--default\">foreign<\/span>\u00a0<span id=\"co_term_3973\" class=\"co_concept_33_41 co_concept_33_50 co_concept_25_50 MultiColor--default\">sovereign<\/span>\u00a0<span id=\"co_term_3974\" class=\"co_concept_43_50 co_concept_33_50 co_concept_25_50 MultiColor--default\">immunity<\/span> developed as a matter of common law&#8230;. [I]n <em>Schooner Exchange v. McFaddon<\/em>, 7 Cranch 116, 3 L.Ed. 287 (1812), Chief Justice Marshall concluded that the United States had impliedly waived jurisdiction over certain activities of <span id=\"co_term_4042\" class=\"co_concept_25_31 MultiColor--default\">foreign<\/span> sovereigns. The Court&#8217;s specific holding in\u00a0<em>Schooner Exchange<\/em> was that a federal court lacked jurisdiction over a national armed vessel of the emperor of France,\u00a0but the opinion was interpreted as extending virtually absolute immunity to\u00a0<span id=\"co_term_4083\" class=\"co_concept_25_31 MultiColor--default\">foreign<\/span> sovereigns as a matter of grace and comity.&#8221;).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_71\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_71');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>71<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See Tachiona v. Mugabe<\/em>, 169 F. Supp. 2d 259, 268\u201373 (S.D.N.Y. 2001), <em>aff\u2019d in part, rev\u2019d in part and remanded sub nom. Tachiona v. United States<\/em>, 386 F.3d 205 (2d Cir. 2004) (provided extended discussion of these matters); <em>see also<\/em> 26 Dep\u2019t State Bull. 984 (1952) (establishing the State Department\u2019s adoption of the restrictive version of sovereign immunity).<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_72\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_72');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>72<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See id<\/em>.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_73\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_73');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>73<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See id.<\/em><\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_74\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_74');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>74<\/a><\/th> <td class=\"footnote_plugin_text\"><em>id<\/em>.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_75\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_75');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>75<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See <\/em>28 U.S.C. \u00a7\u00a7 1604-1607.<\/td><\/tr>\r\n\r\n<tr class=\"footnotes_plugin_reference_row\"> <th scope=\"row\" id=\"footnote_plugin_reference_29209_1_76\" class=\"footnote_plugin_index pointer\" onclick=\"footnote_moveToAnchor_29209_1('footnote_plugin_tooltip_29209_1_76');\"><a role=\"button\" tabindex=\"0\" class=\"footnote_plugin_link\" ><span class=\"footnote_index_arrow\">&#8593;<\/span>76<\/a><\/th> <td class=\"footnote_plugin_text\"><em>See<\/em> <em>F. Hoffmann-La Roche Ltd. v. Empagran S.A.<\/em>, 542 U.S. 155, 163\u201366 (2004).<\/td><\/tr>\r\n\r\n <\/tbody> <\/table> <\/div><\/div><script type=\"text\/javascript\"> function footnote_expand_reference_container_29209_1() { jQuery('#footnote_references_container_29209_1').show(); jQuery('#footnote_reference_container_collapse_button_29209_1').text('\u2212'); } function footnote_collapse_reference_container_29209_1() { jQuery('#footnote_references_container_29209_1').hide(); jQuery('#footnote_reference_container_collapse_button_29209_1').text('+'); } function footnote_expand_collapse_reference_container_29209_1() { if (jQuery('#footnote_references_container_29209_1').is(':hidden')) { footnote_expand_reference_container_29209_1(); } else { footnote_collapse_reference_container_29209_1(); } } function footnote_moveToReference_29209_1(p_str_TargetID) { footnote_expand_reference_container_29209_1(); var l_obj_Target = jQuery('#' + p_str_TargetID); if (l_obj_Target.length) { jQuery( 'html, body' ).delay( 0 ); jQuery('html, body').animate({ scrollTop: l_obj_Target.offset().top - window.innerHeight * 0.2 }, 380); } } function footnote_moveToAnchor_29209_1(p_str_TargetID) { footnote_expand_reference_container_29209_1(); var l_obj_Target = jQuery('#' + p_str_TargetID); if (l_obj_Target.length) { jQuery( 'html, body' ).delay( 0 ); jQuery('html, body').animate({ scrollTop: l_obj_Target.offset().top - window.innerHeight * 0.2 }, 380); } }<\/script>","protected":false},"excerpt":{"rendered":"<p>\u201cAntitrust Exemptions and Immunities\u201d\u00a0(By William Markham, \u00a92021)Introduction Over the years, Congress and the federal courts have established various immunities from federal antitrust law, removing from its reach specified commercial activities and even entire lines of commerce. Below I examine each of the antitrust immunities, describing its scope, underlying rationale, and intended purpose, and also noting [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":48,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"<p>Introduction. Over the years, Congress and the federal courts have established various immunities and exemptions from federal antitrust law, removing from its reach various lines of commerce and commercial activities. Crucially, some of these immunities are conditional or partial<\/p><p>Below I cover the main points and generally explain the different exemptions and immunities that currently exist. Bear in mind that antitrust exclusions and immunities raise complicated issues and often turn on obscure doctrines or the proper interpretation of highly technical statutes. If you have heard or read somewhere that your business or profession is not subject to federal antitrust law, make doubly sure of the point before relying on it.<\/p><p>To take one example among many, the McCarran-Ferguson Act (15 U.S.C. \u00a7\u00a7 1011-1012) exempts from the reach of federal antitrust law \u201cthe business of insurance\u201d but only so far as it is regulated by state law.(((See 15 U.S.C.A. \u00a7 1012))) This provision might seem straightforward at first glance, but it always invites the following two inquiries: (1) whether an insurer\u2019s challenged practice can be properly characterized as the business of insurance (i.e., insurance activities); and (2) whether this practice is regulated by the laws of the state where the plaintiff challenges it. Either or both inquiries can sometimes give rise to knotty problems and close calls that the courts have worked out by a series of decisions. Before an insurer concludes that a particular practice is exempt from federal antitrust law, it should examine these matters carefully.<\/p><p><strong>Four Kinds of Antitrust Immunities and Exemptions. <\/strong>Broadly speaking, there are four kinds antitrust exemptions and immunities, all of which are established by federal statutes or federal case law:<\/p><p>(1) Petitioning Activity, i.e., antitrust immunity for efforts to influence government decision-making or to obtain redress from any government institution or agency. This immunity or privilege is called \u201cNoerr-Pennington immunity\u201d and is named after two Supreme Court decisions that established it.<\/p><p>(2) State-Regulated Activity, i.e., antitrust immunity for certain business activities that are regulated by a state government in a manner that is inconsistent with the federal policy in favor of competition (\u201cstate-action immunity\u201d). This doctrine, established and refined by a series of Supreme Court decisions, arises from the confusing clash between each state\u2019s power to regulate its own affairs and Congress\u2019 power to regulate interstate commerce. Relatedly, local government agencies cannot be held liable for antitrust damages, but can be subjected to a federal antitrust injunction and ordered to pay attorney\u2019s fees and costs to a prevailing plaintiff that procures the injunction.<\/p><p>(3) Statutory Exemptions and Implied Immunities, i.e., exemptions established by various federal statutes and immunities established by various decisions of the Supreme Court. This is a catch-all category for numerous exemptions and immunities. If you are concerned about a particular activity, skip ahead (insert) to see the specific exemptions and immunities that are currently recognized by federal law.<\/p><p>(4) Foreign Immunities, i.e., immunity for (a) acts taken by a foreign sovereign government; (b) activities in foreign commerce that are subject to federal antitrust law, but are more appropriately reviewed under the law of a foreign jurisdiction; and (c) activities of American exporters that have no effect on other American exporters, American importers, or domestic American commerce. A significant exception to these doctrines arises when a foreign government intervenes to favor its own exporters in ways that harm American exporters, American importers, or domestic American commerce.<\/p><p>I explain each of these categories more fully in the following sections of this article.<\/p><p><strong>Petitioning Activity. T<\/strong>he <em>Noerr-Pennington<\/em> Immunity. Antitrust law does not reach legitimate efforts to seek redress from a government institution or agency (\u201cpetitioning activity\u201d), even when the avowed or apparent purpose of the effort is to obtain an official grant of a monopoly concession.<\/p><p>Subject to the below exceptions, petitioning activity is a constitutional right protected by the First and Fourteenth Amendments of the U.S. Constitution, and neither Congress nor any state legislature has the power to subject petitioning activity to antitrust prohibitions, nor was the Sherman Act ever intended to impose any such prohibition, which would not only infringe upon bedrock constitutional rights, but would impair the work of government institutions and agencies. This broad immunity is called \u201cNoerr-Pennington immunity,\u201d a term that refers to the two Supreme Court decisions that established it.(((See Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545, 555\u201356 (2014) (\u201cUnder the Noerr\u2013Pennington doctrine\u2014established by Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961), and United Mine Workers v. Pennington, 381 U.S. 657, 85 S.Ct. 1585, 14 L.Ed.2d 626 (1965)\u2014defendants are immune from antitrust liability for engaging in conduct (including litigation) aimed at influencing decisionmaking by the government.\u201d); E. R. R. Presidents Conf. v. Noerr Motor Freight, Inc., 365 U.S. 127, 135 (1961) (\u201c[N]o violation of the [Sherman] Act can be predicated upon mere attempts to influence the passage or enforcement of laws.\u201d); United Mine Workers of Am. v. Pennington, 381 U.S. 657, 670 (1965) (\u201cNoerr shields from the Sherman Act a concerted effort to influence public officials regardless of intent or purpose.... Joint efforts to influence public officials do not violate the antitrust laws even though intended to eliminate competition. Such conduct is not illegal, either standing alone or as part of a broader scheme itself violative of the Sherman Act.\u201d).)))<\/p><p>Noerr-Pennington immunity thus safeguards charter rights guaranteed by the First and Fourteenth Amendments of the United States Constitution, which in pertinent part state the following:<\/p><blockquote><p>Congress shall make no law ... abridging the freedom of speech ... or the right of the people ... to petition the Government for a redress of grievances.\u201d (((First Amendment of the U.S. Constitution.)))<\/p><p>\u201cAll persons born or naturalized in the United States ... are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States....\u201d (((Fourteenth Amendment of the U.S. Constitution.)))<\/p><\/blockquote><p>Congress and state legislatures therefore lack authority to enact competition laws that infringes upon these rights or, at best, they must have a compelling, clearly articulated reason for doing so that comes within one of the few narrow exceptions to the First Amendment. But neither Congress nor any state legislature has ever announced any such purpose or enacted any such law.(((See U.S. Futures Exch., L.L.C. v. Bd. of Trade of the City of Chicago, Inc., 953 F.3d 955, 960 (7th Cir. 2020) (\u201cThe [Noerr-Pennington] doctrine flows from First Amendment origins: antitrust laws do not supersede the people\u2019s right to petition their government in favor of a desired monopoly.\u201d); Noerr, 365 U.S. at 136\u201338 (\u201c[T]he Sherman Act does not prohibit two or more persons from associating together in an attempt to persuade the legislature or the executive to take particular action with respect to a law that would produce a restraint or a monopoly.... [S]uch a construction of the Sherman Act would raise important constitutional questions. The right of petition is one of the freedoms protected by the Bill of Rights, and we cannot, of course, lightly impute to Congress an intent to invade these freedoms. Indeed, such an imputation would be particularly unjustified....\u201d).)))<\/p><p>In addition, any such law would unduly interfere with government work by inhibiting members of the public from communicating with government institutions, agencies, and officers.(((See id., 365 U.S. at 136\u201338 (\u201c[T]he Sherman Act does not prohibit two or more persons from associating together in an attempt to persuade the legislature or the executive to take particular action with respect to a law that would produce a restraint or a monopoly.... [S]uch a holding would substantially impair the power of government to take actions through its legislature and executive that operate to restrain trade. In a representative democracy such as this, these branches of government act on behalf of the people and, to a very large extent, the whole concept of representation depends upon the ability of the people to make their wishes known to their representatives. To hold that the government retains the power to act in this representative capacity and yet hold, at the same time, that the people cannot freely inform the government of their wishes would impute to the Sherman Act a purpose to regulate, not business activity, but political activity, a purpose which would have no basis whatever in the legislative history of that Act.... [O]f at least equal significance, such a construction of the Sherman Act would raise important constitutional questions. The right of petition is one of the freedoms protected by the Bill of Rights, and we cannot, of course, lightly impute to Congress an intent to invade these freedoms. Indeed, such an imputation would be particularly unjustified in this case in view of all the countervailing considerations enumerated above.\u201d).)))<\/p><p>Accordingly, any market participant can seek redress from the government no matter what prohibitions might appear in the Sherman Act or any other antitrust law. A competitor or group of competitors can even request a government measure that is anticompetitive or monopolistic on its face or in probable effect.(((See U.S. Futures Exch., 953 F.3d 955, 960.)))<\/p><p>Protected petitioning activity includes lobbying efforts, civil claims filed in court, administrative claims, publicity campaigns, and all other direct and indirect efforts to influence government policy or obtain specific acts from the government at any level \u2013 federal, state or local.(((See insert cite.)))<\/p><p>Suppose, for example, that a private competitor (the \u201cpetitioner\u201d) asks a local town board to give it the exclusive right to operate a specified service within town limits. For various reasons, most residents of the town must procure this service from a local provider. Following its regular procedures, the board grants the request, issues corresponding ordinances and regulations, and thereby confers on the petitioner a monopoly over the service in question, exactly as the petitioner intended by making its request. On these facts, the petitioner\u2019s conduct cannot be challenged under the Sherman Act, since the petitioner did nothing other than seek redress from a government agency, and any such effort is entitled to Noerr-Pennington immunity from federal antitrust law.(((See U.S. Futures Exch., 953 F.3d at 960.)))<\/p><p>In the foregoing scenario, the local board\u2019s own conduct must be reviewed under the doctrine of state-action immunity, which is explained below, nor can a local board ever be held liable for antitrust damages even if its conduct fails to satisfy the standards for state-action immunity, a point that is also explained below.<\/p><p><strong>Exceptions to Noerr-Pennington Immunity: False Representations and Sham Litigation<\/strong>. There are two narrow exceptions to Noerr-Pennington immunity: it does not protect a competitor\u2019s materially false representations of fact in a court or administrative tribunal; and it does not protect \u201csham litigation\u201d \u2013 litigation brought in bad faith in order to harass a rival rather than to obtain redess from a court or administrative tribunal.(((See U.S. Futures Exch., 953 F.3d at 960 (\u201cNoerr-Pennington immunity is not absolute.... Exceptions exist for petitioners who present fraudulent misrepresentations or bring sham lawsuits.\u201d).)))<\/p><p><span style=\"text-decoration: underline;\">Exception for Fraudulent Representations<\/span>.\u00a0If a petitioner obtains anticompetitive redress in a court or administrative tribunal by making a false representation of material fact, its petitioning conduct is not entitled to Noerr-Pennington immunity and can constitute predicate conduct that supports an anitrust violation, so long as the other elements of the violation are in place.(((See U.S. Futures Exch., 953 F.3d at 960 (\u201cFraudulent misrepresentations made in an adjudicative proceeding before an administrative agency are not protected from antitrust liability. Those made in a legislative, political setting, however, enjoy immunity.\u201d).)))<\/p><p>For example, a competitor might obtain a patent by fraud, then sue in court to enforce it against a rival, alleging that it holds a properly acquired, valid patent, which the defendant has infringed. If the defendant can show that the plaintiff procured its patent by fraud, so that its allegations in the court proceeding are likewise fraudulent, the rival can thereby defeat the plaintiff\u2019s patent claim and also establish predicate conduct for an antitrust violation (e.g., the plaintiff has used its ill-gotten patent to restrain or monopolize commerce in violation of federal antitrust law). (((See Walker Process Equip., Inc. v. Food Mach. & Chem. Corp., 382 U.S. 172, 174 (1965) (\u201cThe enforcement of a patent procured by fraud on the Patent Office may be violative of \u00a7 2 of the Sherman Act provided the other elements necessary to a \u00a7 2 case are present. In such event the treble damage provisions of \u00a7 4 of the Clayton Act would be available to an injured party.\u201d); see also Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d 1059, 1070 (Fed. Cir. 1998) (fraud on the patent office can rise to the level of predicate antitrust conduct when the fraud entails a \u201cclear intent to deceive,\u201d such as a positive misrepresentation of material fact or the knowing concealment of material information, but not mere \u201cinequitable conduct\u201d).)))<\/p><p><span style=\"text-decoration: underline;\">Exception for Sham Litigation.<\/span>\u00a0Sham litigation arises when a petitioner brings a court claim in bad faith in order to harass or undermine a competitor by involving it in expense, burden, or delay, rather than to obtain redress from a court or administrative agency. To qualify as \u201csham litigation,\u201d a plaintiff\u2019s claim must meet both of the following criteria: (1) the claim must be \u201cobjectively baseless,\u201d which means that it that lacks any reasonable basis in fact or law; and (2) the must also be \u201csubjectively baseless,\u201d which means that the competitor brought it not to obtain the requested relief, but to harass a rival.(((See Pro. Real Est. Invs., Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49, 60\u201361 (1993) (\u201cPRE\u201d) (\u201cWe now outline a two-part definition of \u2018sham\u2019 litigation. First, the lawsuit must be objectively baseless in the sense that no reasonable litigant could realistically expect success on the merits. If an objective litigant could conclude that the suit is reasonably calculated to elicit a favorable outcome, the suit is immunized under Noerr, and an antitrust claim premised on the sham exception must fail. Only if challenged litigation is objectively meritless may a court examine the litigant\u2019s subjective motivation. Under this second part of our definition of sham, the court should focus on whether the baseless lawsuit conceals an attempt to interfere directly with the business relationships of a competitor, through the use of the governmental process\u2014as opposed to the outcome of that process\u2014as an anticompetitive weapon.\u201d).)))<\/p><p>Of note, a claim is said to be \u201cobjectively baseless\u201d when the party asserting it lacks reasonable evidence to support its charging allegations, or when these allegations, even if true, would not render the defendant liable to the plaintiff under any arguable interpretation of any law or doctrine. In other words, an objectively baseless claim is one that no reasonable litigant would bring, since the claim cannot possibly succeed on the merits.(((PRE, 508 U.S. at 60\u201361 (an \u201cobjectively baseless\u201d lawsuit is one \u201cthat no reasonable litigant could realistically expect success on the merits.\u201d).)))<\/p><p>Some courts have ruled that a competitor\u2019s repeated complaints to numerous administrative tribunals constitute \u201csham\u201d petitioning, even if a few of them succeeded, when the competitor was clearly indifferent to the outcome of its serial complaints and made them only to harass a rival and delay its application for permission to engage in a regulated commercial activity.(((See California Motor Transp. Co. v. Trucking Unlimited, 404 U.S. 508, 511\u201312 (1972) (petitioners\u2019 purported petitioning conduct is a mere sham and therefore not entitled to Noerr-Pennington immunity, when petitioners \u201cinstituted [numerous] proceedings and actions [against a rival] with or without probable cause, and regardless of the merits of the cases\u201d in order to overwhelm the rival and thereby deprive it of its own access to the courts or administrative tribunals); see also Hanover 3201 Realty, LLC v. Vill. Supermarkets, Inc., 806 F.3d 162, 180 (3d Cir. 2015) (\u201cWe agree with the approach to [sham litigation]... adopted by the Second, Fourth, and Ninth Circuits. As stated in Noerr itself, the ultimate purpose of this inquiry is to determine whether the petitioning activity is a \u2018mere sham to cover what is actually nothing more than an attempt to interfere directly with the business relationships of a competitor.\u2019 The best way to make that determination depends on whether there is a single filing or a series of filings. Where there is only one alleged sham petition.... Professional Real Estate requires a showing of objective baselessness before looking into subjective motivations in order to prevent any undue chilling of First Amendment activity. In contrast, a more flexible standard is appropriate when dealing with a pattern of petitioning. Not only do pattern cases often involve more complex fact sets and a greater risk of antitrust harm, but the reviewing court sits in a much better position to assess whether a defendant has misused the governmental process to curtail competition. As a result, even if a small number of the petitions turn out to have some objective merit, that should not automatically immunize defendants from liability.\u201d); but cf. U.S. Futures Exch., 953 F.3d at 964\u201365 (\u201cWe do not agree California Motor provides a separate rubric to use whenever a \u201cpattern\u201d of sham filings is alleged. The First Circuit rejected this same reading of California Motor recently in Puerto Rico Telephone Co. v. San Juan Cable LLC, 874 F.3d 767 (2017), splitting from the four circuit opinions cited [above].... We stand with the First Circuit.... We, too, find little logic in concluding a petitioner loses the right to file an objectively reasonable petition merely because it chooses to exercise that right more than once in the course of pursuing its desired outcome.... As the [Supreme] Court made clear in PRE [cited above], the sham exception\u2019s objective component is indispensable and California Motor does not suggest otherwise.\u201d).)))<\/p><p>The upshot is that the courts draw the following \u201cnice distinction\u201d when reviewing antitrust challenges to petitioning activity: a competitor may ask his government for a monopoly or trade restraint, but it exposes itself to antitrust liability if it seeks the same outcome by making a material misrepresentation to a court or administrative tribunal, or by litigating a baseless claim to harass a rival and without any prospect of prevailing on the merits.(((See U.S. Futures Exch., 953 F.3d at 960; Hanover 3201 Realty, 806 F.3d at 180.)))<\/p><p><strong>State Laws and Federal Laws Under Our Federal System: General Principles<\/strong>. Each State in the United States has sovereign powers and can presumptively exercise general police powers to protect the health, safety, and welfare of its public.(((See Medtronic, Inc. v. Lohr, 518 U.S. 470, 475 (1996) (\u201cThroughout our history the several States have exercised their police powers to protect the health and safety of their citizens. Because these are primarily, and historically, matters of local concern, the States traditionally have had great latitude under their police powers to legislate as to the protection of the lives, limbs, health, comfort, and quiet of all persons.\u201d).)))<\/p><p>A State also has limited powers to regulate commerce within its territory (intrastate commerce) even when the regulation has some affect on interstate commerce.(((See also Parker, 317 U.S. at 359\u201360 (1943) (\u201cThe governments of the states are sovereign within their territory save only as they are subject to the prohibitions of the Constitution or as their action in some measure conflicts with powers delegated to the National Government, or with Congressional legislation enacted in the exercise of those powers. This Court has repeatedly held that the grant of power to Congress by the Commerce Clause did not wholly withdraw from the states the authority to regulate the commerce with respect to matters of local concern, on which Congress has not spoken. A fortiori there are many subjects and transactions of local concern ... which are within the regulatory and taxing power of the states, so long as state action serves local ends and does not discriminate against [interstate] commerce, even though the exercise of those powers may materially affect it.\").)))<\/p><p>Although vested with these powers, a State may not enact a law that is \u201crepugnant\u201d to a federal law, or whose exercise is incompatible with the enforcement of a federal law on the same topic.(((Gibbons v. Ogden, 22 U.S. 1, 210\u201311 (1824) (Where \u201ca law passed by a State, in the exercise of its acknowledged sovereignty, comes into conflict with a law or treaty properly passed by Congress,\u201d the state law \u201cmust yield\u201d to the federal law, since the Supremacy Clause of the U.S. Constitution requires this outcome, and therefore \u201c[i]n every such case, the act of Congress, or the treaty, is supreme; and the law of the State, though enacted in the exercise of powers not controverted, must yield to it.\u201d).)))<\/p><p><strong>The Dormant Power of the U.S. Constitution\u2019s Commerce Clause<\/strong>. The foregoing principles have been used to establish the \u201cdormant power\u201d of the Commerce Clause of the U.S. Constitution(((See U.S. Constitution, Article I, Section 8, which in pertinent part empowers Congress \u201cto regulate Commerce with foreign Nations, and among the several States....\u201d).))), which holds that Congress\u2019 authority to regulate interstate commerce impliedly forbids any State to enact a law that either discriminates against interstate commerce or imposes unreasonable burdens on it. Selevan v. New York Thruway Auth., 584 F.3d 82, 90 (2d Cir. 2009) (\u201cIn implementing the Commerce Clause, the Supreme Court has adhered strictly to the principle that the right to engage in interstate commerce is not the gift of a state, and that a state cannot regulate or restrain it. It flows from this principle that the negative or dormant implication of the Commerce Clause prohibits state taxation or regulation that discriminates against or unduly burdens interstate commerce and thereby impedes free private trade in the national marketplace.\u201d).)))<\/p><p>A State therefore cannot enact a law that discriminates against out-of-state commerce (e.g., state laws that on their face or as practiced favor local suppliers over out-of-state suppliers). Nor can a State enforce a law or regulation that unreasonably burdens interstate commerce or results in the State\u2019s regulation of commerce that occurs entirely outside of its jurisdiction.(((See Selevan, 584 F.3d at 90 (\u201cA state statute or regulation may violate the dormant Commerce Clause only if it (1) clearly discriminates against interstate commerce in favor of intrastate commerce, (2) imposes a burden on interstate commerce incommensurate with the local benefits secured, or (3) has the practical effect of extraterritorial control of commerce occurring entirely outside the boundaries of the state in question.\u201d).)))<\/p><p><strong>Federal Preemption<\/strong>. Relatedly, a state loses its power to enforce a law when Congress enacts its own law that addresses the same subject-matter and expressly decrees or impliedly requires \u201cfederal preemption\u201d of all state laws on the same subject-matter.(((See Philip Morris Inc. v. Harshbarger, 122 F.3d 58, 67\u201368 (1st Cir. 1997) (to determine whether a federal law preempts State laws on the same subject-matter, the \u201ccrucial inquiry\u201d is whether \u201cCongress intend[ed] to exercise its constitutionally delegated authority to set aside the laws of a State?\u201d \u2013 which is answered by considering \u201cthe explicit statutory language and the structure and purpose of the statute\u201d and, where a state police power is concerned, by assuming that \u201cfederal law does not supersede a state\u2019s historic police powers unless that is the clear and manifest purpose of Congress.\u201d).)))<\/p><p><strong>State-Action Immunity From Antitrust Liability<\/strong>. Guided by these principles, the Supreme Court has found that the Sherman Act in particular and all federal antitrust law generally do not preempt state law or apply to the direct acts of a State government.(((See Parker v. Brown, 317 U.S. 341, 350\u201351 (1943) (\u201cWe find nothing in the language of the Sherman Act or in its history which suggests that its purpose was to restrain a state or its officers or agents from activities directed by its legislature. In a dual system of government in which, under the Constitution, the states are sovereign, save only as Congress may constitutionally subtract from their authority, an unexpressed purpose to nullify a state\u2019s control over its officers and agents is not lightly to be attributed to Congress. The Sherman Act makes no mention of the state as such, and gives no hint that it was intended to restrain state action or official action directed by a state.... There is no suggestion of a purpose to restrain state action in the Act\u2019s legislative history.\u201d).)))<\/p><p>This doctrine applies only to direct acts of a state government.(((See id.))) In contrast, the acts of local agencies are protected by state-action immunity only when they are expressly authorized by a State law or public policy.(((See Cmty. Commc\u2019ns Co. v. City of Boulder, Colo., 455 U.S. 40, 51 (1982).))) The rationale is that \u201cwe are a Nation of States, a principle that makes no accommodation for sovereign subdivisions of States.\u201d (((id.))). The issue has repeatedly arisen after a local agency has granted an exclusive concession to a particular service-provider, and the arrangement is challenged as a restraint of trade or unlawful monopolization.(((See id. (\u201c[M]unicipal conduct\u201d is immune from federal antitrust law only when undertaken \u201cpursuant to state policy to displace competition with regulation or monopoly public service,\u201d and this policy must be \u201cclearly articulated and affirmatively expressed.\u201d).))).<\/p><p>Relatedly, local government agencies cannot be held liable for antitrust damages (((See Local Government Antitrust Act of 1984, 15 U.S.C. \u00a7\u00a7 34-36 ))), but they can be enjoined by a federal antitrust injunction.(((See Lancaster Cmty. Hosp. v. Antelope Valley Hosp. Dist., 940 F.2d 397, 404 (9th Cir. 1991) \u201c[The Local Government Antitrust Act of 1984] precludes the recovery of damages, costs, or attorneys fees, on the basis of 15 U.S.C. \u00a7\u00a7 15, 15a, or 15c, from local government entities. However, the provision that mandates that costs and attorneys fees be awarded to plaintiffs who substantially prevail in actions for injunctive relief is 15 U.S.C. \u00a7 26.\u201d).))).If a plaintiff obtains an antitrust injunction against a local agency, it can recover its attorney\u2019s fees.(((See id.))).<\/p><p>The standard is more demanding for private commercial activity that is apparently authorized by a State law. Such activity enjoys \u201cstate-action immunity\u201d from federal antitrust law only if two conditions are met: (1) the State, acting in furtherance of its legitimate police powers, must have \u201cclearly articulated and affirmatively expressed\u201d a public policy that supplants or limits Congress\u2019 national policy in favor of competition; and (2) the State must actively supervise implementation of its law and private commercial activity authorized by it.(((See California Retail Liquor Dealers Ass\u2019n v. Midcal Aluminum, Inc., 445 U.S. 97, 105 (1980) (establishing doctrine); F.T.C. v. Phoebe Putney Health Sys., Inc., 568 U.S. 216, 225 (2013) (\u201c[G]iven the fundamental national values of free enterprise and economic competition that are embodied in the federal antitrust laws, state-action immunity is disfavored.... Consistent with this preference, we recognize state-action immunity only when it is clear that the challenged anticompetitive conduct is undertaken pursuant to a regulatory scheme that is the State\u2019s own. Accordingly, closer analysis is required when the activity at issue is not directly that of the State itself, but rather is carried out by others pursuant to state authorization. When determining whether the anticompetitive acts of private parties are entitled to immunity, we employ a two-part test, requiring first that the challenged restraint be one clearly articulated and affirmatively expressed as state policy, and second that the policy be actively supervised by the State.\u201d).)))<\/p><p><strong>Bullet-Point Summary<\/strong>. The foregoing principles are complicated because our federal system of government is complicated. The bullet-points can nevertheless be quickly summarized:<\/p><p>1. The U.S. Constitution vests supreme authority in Congress to enact laws that govern interstate commerce, but permits each State to regulate its internal commerce.<\/p><p>2. In addition, each State wields general police powers that authorize it to protect the health, safety, and welfare of those within its jurisdiction. A State cannot use these powers in ways that discriminate against out-of-state commerce or unduly burden it.<\/p><p>3. A State\u2019s authority to regulate a given matter can be preempted by a federal law, but only if it is clear that Congress, by enacting the law, intended to preempt state laws on the same subject-matter.<\/p><p>4. Congress has not passed any antitrust law that preempts each State\u2019s limited authority to regulate its own internal commerce.<\/p><p>5. Neither the Sherman Act, nor any other federal antitrust law prohibits or regulates any act directly take by a sovereign State (e.g., a State legislature enacting a law or a State Governor executing State laws).<\/p><p>6. A local agency\u2019s acts are immune from federal antitrust law only if authorized by a State law or public policy, and in no event can it be held liable for antitrust damages under federal law, but it can be regulated by an antitrust injunction and ordered to pay attorney\u2019s fees and costs incurred by a plaintiff to procure the injunction.<\/p><p>7. Where a State law or local agency authorizes private conduct that arguably violates federal antitrust law, the conduct receives \u201cstate-action immunity\u201d from antitrust only when the following two conditions are met: (1) the conduct is authorized under a State law or public policy that clearly articulates the State\u2019s intention to displace Congress\u2019 national policy in favor of competition; and (2) the State or a local agency must actively enforce the law and supervise the private conduct that it authorizes.<\/p><p><strong>Federal Statutory Exemptions<\/strong>. Congress has passed statutes and the federal courts have issued decisions that establish narrow, express exemptions to federal antitrust law. The principal statutory exemptions are as follows:<\/p><ul><li>The \u201cbusiness of insurance,\u201d but only so far as it is regulated by state law(((the McCarran-Ferguson Act of 1945, which is codified at 15 U.S.C. \u00a7\u00a7 1011-1012))).<\/li><li>Export associations whose dealings cause no harm to other American exporters, American importers, or domestic American commerce =(((the Webb-Pomerene Act of 1918, which is codified at 15 U.S.C. \u00a7\u00a7 61-65 and the Export Trading Company Act of 1982, which is codified at 15 U.S.C. \u00a7 6a))).<\/li><li>American export activity that causes no harm to any American exporter, American importer, or domestic American commerce(((The Foreign Trade Antitrust Improvements Act of 1982, which is codified at 15 U.S.C. \u00a7 6a))).<\/li><li>International ocean commerce regulated by the Shipping Act of 1984(((46 U.S.C. \u00a7\u00a7 1701-1720))).<\/li><li>Labor-union activity(((the Norris-LaGuardia Act of 1932, which is codified at 29 U.S.C. \u00a7\u00a7 101-115, as well as Section 6 of the Clayton Act of 1914, which is codified at 15 U.S.C. \u00a7 17))).<\/li><li>Agricultural and fishing cooperatives formed to market and sell farm and fish products(((Section 6 of the Clayton Act and the Capper-Volstead Act of 1922, which is codified at 7 U.S.C. \u00a7 291))).<\/li><li>Healthcare providers\u2019 procedures for peer review(((the Health Care Quality Improvement Act of 1986, which is codified at 42 U.S.C. \u00a7\u00a7 11, 111))).<\/li><li>Activity that supports national security and has been approved by the Department of Justice and the FTC, including commercial activity that contribute to the \u201cexpansion of productive capacity and supply beyond levels needed to meet essential civilian demand\u201d(((50 U.S.C. \u00a7 2062))).<\/li><li>Joint research and development conducted by small businesses and approved by the Small Business Adminstration(((15 U.S.C. \u00a7 638))).<\/li><li>One newspaper\u2019s acquisition of a failing newspaper whose independent operations it leaves intact, and subject to express approval from the United States Department of Justice(((the Newspaper Preservation Act in 1970, which is codified at 15 U.S.C. \u00a7\u00a7 1801-1804))).<\/li><li>Bank mergers, which are governed by the Bank Merger Act of 1966(((12 U.S.C.\u00a7 1828c))).<\/li><li>Soft-drink distribution agreements (((The Soft Drink Interbrand Competition Act, which is codified at 15 U.S.C. \u00a7\u00a7 3501\u20133503))).<\/li><li>Gift annuities(((The Charitable Donation Antitrust Immunity Act of 1997, which is codified at 15 U.S.C. \u00a7 37(a).<\/li><li>Medical-resident matching (per the Pension Funding Equity Act of 2004, which is codified at 15 U.S.C. \u00a7 37b(b)(2))).<\/li><\/ul><p>The federal courts have also established one further exemption from federal antitrust law for \u201cthe business of baseball.\u201d(((<em>See Federal Baseball Club v. National League<\/em>, 259 U.S. 200, 209 (1922) (finding that the \u201cbusiness of baseball\u201d did not constitute interstate commerce that Congress had authority to regulate.)))<\/p><p>The baseball exemption is an outlier. It was granted by Justice Holmes in a Supreme Court decision in 1922 on the ground that baseball is a game, but not commerce that can be regulated by Congress(((see id.))), but that assertion can no longer be maintained in light of the evolution of both baseball itself and federal law on the Commerce Clause. Regardless, the decision suggests that baseball can be properly reviewed under state antitrust law(((<em>See<\/em> Phillip E. Areeda (late) & Herbert Hovenkamp, <em>Antitrust Law: An Analysis of Antitrust Principles and Their Application<\/em> \u00b6251. (4th and 5th Editions 2015-2021) (\u201c\u201d[B]eginning with Justice Holmes\u2019s decision in Federal Baseball Club, the basis of the Supreme Court\u2019s refusal to apply the Sherman Act was that baseball was not \u2018commerce.\u2019 Since the \u2018commerce\u2019 language in the Sherman Act tracks that in the Commerce Clause, that holding was tantamount to one that the Commerce Clause did not permit Congress to regulate organized baseball. But the function of the Commerce Clause is to allocate regulatory power as between the federal government and the states. As a result, Federal Baseball Club is best read not as an antitrust policy decision that baseball should not be regulated but as a conclusion that in the assignment of regulatory powers, the power to regulate baseball fell to the states rather than to the federal government.\u201d); <em>but cf. Major League Baseball v. Crist<\/em>, 331 F.3d 1177, 1185 (11th Cir. 2003) (finding that baseball is interstate in character and therefore requires uniform national regulation Preempting state antitrust law thus seems anomalous.\u201d).)))<\/p><p>The federal courts have also found that federal antitrust law can be partly or wholly displaced by federal regulatory schemes, such as the Securities Exchange Act of 1934, which regulates stock exchanges and broker-dealers of securities. An implied immunity from antitrust law is disfavored, however, and so far as possible the courts try to reconcile federal antitrust law with federal regulatory schemes.(((<em>See Silver v. New York Stock Exch.<\/em>, 373 U.S. 341, 357 (1963) (\u201cThe Securities Exchange Act contains no express exemption from the antitrust laws.... This means that any repealer of the antitrust laws must be discerned as a matter of implication, and it is a cardinal principle of construction that repeals by implication are not favored. Repeal is to be regarded as implied only if necessary to make the Securities Exchange Act work, and even then only to the minimum extent necessary.\u201d); <em>Gordon v. New York Stock Exch., Inc.<\/em>, 422 U.S. 659, 682 (1975) (\u201cThis Court has considered the issue of implied repeal of the antitrust laws in the context of a variety of regulatory schemes and procedures. Certain axioms of construction are now clearly established. Repeal of the antitrust laws by implication is not favored and not casually to be allowed. Only where there is a plain repugnancy between the antitrust and regulatory provisions will repeal be implied.\u201d); <em>Phonetele, Inc. v. Am. Tel. & Tel. Co.<\/em>, 664 F.2d 716, 726 (9th Cir. 1981), <em>modified<\/em>, (9th Cir. Mar. 15, 1982) (\u201c[A]ntitrust immunities are to be strictly construed and not lightly inferred. An implied immunity may be found only where there is a convincing showing of clear repugnancy between the antitrust laws and the regulatory system.\u201d).)))<\/p><p><strong>The Antitrust Exemption for the Business of Insurance<\/strong>. As briefly noted above, the McCarran-Ferguson Act of 1945 (15 U.S.C. \u00a7\u00a7 1011-1012) establishes a significant antitrust exemption for the \u201cbusiness of insurance\u201d: the principal federal antitrust statutes \u2013 the Sherman Act, the Clayton Act, and the FTC Act \u2013 do not reach any insurance activity that is regulated by the state where it is challenged.<\/p><p>Of note, the McCarran-Ferguson Act of 1945 does not exempt insurance companies (insurers), but only their insurance activities (the \u201cbusiness of insurance\u201d). An insurer therefore cannot receive McCarran-Ferguson immunity if it is sued for an antitrust violation that it allegedly committed when engaged in some other kind of commerce, but only when the challenge concerns its insurance transactions and closely related matters that it must perform in order to engage in them.(((<em>See Grp. Life & Health Ins. Co. v. Royal Drug Co.<\/em>, 440 U.S. 205, 210\u201311 (1979) (\u201cThe statutory language [of the McCarran-Ferguson Act] does not exempt the business of insurance companies from the scope of the antitrust laws. The exemption is for the \u2018business of insurance,\u2019 not the \u2018business of insurers\u2019\u201d); <em>Sec. & Exch. Comm\u2019n v. Nat\u2019l Sec., Inc.<\/em>, 393 U.S. 453, 459\u201360 (1969) (\u201cThe statute did not purport to make the States supreme in regulating all the activities of insurance companies; its language refers not to the persons or companies who are subject to state regulation, but to laws \u2018regulating the business of insurance.\u2019 Insurance companies may do many things which are subject to paramount federal regulation; only when they are engaged in the \u2018business of insurance\u2019 does the statute apply.\u201d).<\/p><p>Whether an insurer\u2019s challenged practice constitutes an insurance activity sometimes gives rise to difficult judgment calls, but over time the courts have settled on a reasonably clear standard, finding that the business of insurance means the spreading of risk, or, more precisely, the insurer\u2019s assumption of a specified risks otherwise borne by its insureds in exchange for fees.(((<em>See Grp. Life & Health Ins. Co. v. Royal Drug Co.<\/em>, 440 U.S. 205, 211 (1979) (\u201cThe primary elements of an insurance contract are the spreading and underwriting of a policyholder\u2019s risk. It is characteristic of insurance that a number of risks are accepted, some of which involve losses, and that such losses are spread over all the risks so as to enable the insurer to accept each risk at a slight fraction of the possible liability upon it.\u201d) (quoting G. Couch, Cyclopedia of Insurance Law \u00a7 1:3 (2d ed. 1959)).)))<\/p><p>The business of insurance therefore concerns activities by which an insurer assumes of specified risks in exchange for fees and sometimes must bear losses when the risked event occurs and harms its insured.(((See id.)))<\/p><p>Applying this rule, the courts have found that the business of insurance principally concerns (1) insurance contracts (or insurance policies) between an insurer and its insureds, including their negotiation, essential terms and conditions, interpretation, and enforcement; (2) the rates (prices) that insurers charge for different kinds of insurance contracts; (3) insurers\u2019 advertising of insurance contracts; (4) the licensing of insurers and their agents; and (5) other, closely related tasks.(((<em>See Sec. & Exch. Comm'n v. Nat'l Sec., Inc.<\/em>, 393 U.S. 453, 460, 89 S. Ct. 564, 568\u201369, 21 L. Ed. 2d 668 (1969).)))<\/p><p>Other activities performed by insurers do not qualify, including an insurer\u2019s issuance of a variable annuity contract (under which the annuitant bears all of the risk)(((<em>See Sec. & Exch. Comm\u2019n v. Variable Annuity Life Ins. Co. of Am.<\/em>, 359 U.S. 65, 73 (1959).))); an insurer\u2019s use of its own network of pharmacies to lessen its own costs when fulfilling its obligations to insureds(((<em>See Grp. Life & Health Ins. Co. v. Royal Drug Co.<\/em>, 440 U.S. 205, 214 (1979).))); and other arrangements by which insurers lessen their costs to fulfill obligations to their insureds(((<em>See, e.g., Pireno v. New York State Chiropractic Association<\/em>, 650 F.2d 387 (2d Cir. 1981);<em> St. Bernard Hospital v. Hospital Service Assn. of New Orleans, Inc.<\/em>, 618 F.2d 1140, 1145 (5th Cir. 1980); <em>Bartholomew v. Virginia Chiropractors Association<\/em>, 612 F.2d 812, 819 (4th Cir. 1979); <em>Hoffman v. Delta Dental Plan of Minnesota<\/em>, 517 F. Supp. 564, 569 (D. Minn. 1981).))).<\/p><p>In some cases, it is not obvious whether the insurer\u2019s challenged practice is part of the business of insurance, but the best litmus test is usually to determine whether the practice entails the insurer\u2019s assumption of risks otherwise borne by its insureds in exchange for fees; the more removed its practice is from this essential work, the less likely it is to be deemed the business of insurance that qualifies for McCarran-Ferguson immunity so long as it is subject to state regulation where it is challenged.(((<em>See Grp. Life & Health Ins. Co. v. Royal Drug Co.<\/em>, 440 U.S. 205, 211 (1979).))).<\/p><p><strong>Foreign Immunities<\/strong>. Special rules govern antitrust claims brought against a foreign government or its agency (political subdivision). The common-law doctrine of acts of state governs any claim that challenges acts committed by a sovereign government in its own territory. All other claims against foreign governments and their agencies are governed by a highly technical federal statute entitled the Foreign Sovereign Immunities Act.<\/p><p><strong>Acts of State<\/strong>. The doctrine of acts of state bars any claim that challenges an act directly taken by a sovereign foreign government within its own territory. Here is how the Supreme Court explained acts of state in a landmark case decided in 1897:<\/p><blockquote><p>Every sovereign State is bound to respect the independence of every other sovereign State, and the courts of one country will not sit in judgment on the acts of the government of another done within its own territory. Redress of grievances by reason of such acts must be obtained through the means open to be availed of by sovereign powers as between themselves.<\/p><p><em>Underhill v. Hernandez<\/em>, 168 U.S. 250, 252 (1897).<\/p><\/blockquote><p>Federal courts in the United States decline to review or adjudicate any such act, since doing so would encroach upon the prerogatives and powers of the Executive and Legislative Branches of the federal government, which are responsible for establishing and conducting the foreign policy of the United States.(((<em>See W.S. Kirkpatrick & Co. v. Env't Tectonics Corp., Int\u2019l<\/em>, 493 U.S. 400, 404 (1990) (In earlier times, the doctrine of acts of state \u201crest[ed] upon the highest considerations of international comity and expediency,\u201d but in the modern era it is honored because of \u201cthe strong sense of the Judicial Branch that its engagement in the task of passing on the validity of foreign acts of state may hinder the [other Branches\u2019] conduct of foreign affairs.\u201d).)))<\/p><p>More specifically, acts of state bars any claim or defense by which a litigant asks a federal court in the United States to invalidate an official act of a sovereign foreign government taken within its own territory: no American court will entertain any such claim or defense.(((Id. 493 U.S. at 405 (\u201c[T]he act of state doctrine [is] applicable [when] the relief sought or the defense interposed would have required a court in the United States to declare invalid the official act of a foreign sovereign performed within its own territory.\u201d).)))<\/p><p><strong>Sovereign Immunity and the Foreign Sovereign Immunities Act 1976<\/strong>. Sovereign immunity is an ancient immunity, by which independent nation-states respected one another\u2019s sovereignty and declined to permit a citizen of any nation-state to bring suit in his home country against a foreign government.(((insert cite)))<\/p><p>This doctrine evolved over time. In the United States, when a federal court received a private claim against a foreign government, it was required to heed the guidance of the State Department, which from 1952 onward purported to use the \u201crestrictive\u201d version of sovereign immunity to decide whether the claim could proceed: under this doctrine, a foreign sovereign could be sued in a U.S. federal court on a claim that concerned its commercial activity in the United States, but not on a claim that concerned its sovereign acts.(((<em>See Tachiona v. Mugabe<\/em>, 169 F. Supp. 2d 259, 268\u201373 (S.D.N.Y. 2001), <em>aff\u2019d in part, rev\u2019d in part and remanded sub nom. Tachiona v. United States<\/em>, 386 F.3d 205 (2d Cir. 2004) (provided extended discussion of these matters); see also 26 Dep\u2019t State Bull. 984 (1952) (establishing the State Department\u2019s adoption of the restrictive version of sovereign immunity).)))<\/p><p>But the State Department did not always follow its own stated guidelines, often preferring instead to use an ad hoc approach, by which it found ways to permit claims against disliked adversaries and to reject those made against friendly allies. Its guidance on these matters, which was binding on federal courts, lacked consistent reasoning or a sufficient regard for the commercial rights of American citizens wronged by the practices of foreign governments and their agencies.(((<em>See id.<\/em>)))<\/p><p>Federal judges, members of Congress, and various commentators expressed their misgivings, and Congress eventually intervened to enact the Foreign Sovereign Immunities Act of 1976, which is codified at 28 U.S.C. \u00a7\u00a7 1604-1607, and which replaced the State Department\u2019s inconsistently applied restrictive version of sovereign immunity.(((See id.))) The principal aim was to afford predictable rules so that Americans engaged in foreign commerce (or affected by it) would have a clear understanding of their rights under American law against foreign sovereigns that caused them harm in commercial dealings.(((id.)))<\/p><p><strong>The Foreign Sovereign Immunities Act<\/strong> is codified at 28 U.S.C. \u00a7\u00a7 1604-1607 and seemingly inverts the ancient rule on sovereign immunity. Under this law, foreign governments and their political subdivisions (collectively, \u201cforeign sovereigns\u201d), cannot be sued in a United States federal court for (1) punitive damages in any case or (2) claims other than the following categories of claims, all of which are expressly allowed, and which apparently cover many if not most kinds of claims:<\/p><ul><li><span style=\"text-decoration: underline;\">Waiver of Sovereign Immunity<\/span>. Any claim that a foreign sovereign defendant permits to be maintained against it in the United States (waiver of immunity).<\/li><li><span style=\"text-decoration: underline;\">Commercial Claims<\/span>. Any claim that arises from a foreign sovereign\u2019s commercial activity in the United States or its commercial activity abroad that has had a \u201cdirect effect in the United States.\u201d<\/li><li><span style=\"text-decoration: underline;\">Recovery of Ill-Gotten Property<\/span>. Any claim against a foreign sovereign to recover property taken in violation of international law (or its fruits), so long as the ill-gotten property is either (a) located in the United States and used in commercial activity; or (b) held by a foreign sovereign that engages in commercial activity in the United States.<\/li><li><span style=\"text-decoration: underline;\">Vindicating Property Rights<\/span>. Any claim against a foreign sovereign to establish either (a) a right to real property located in the United States; or (b) a right by succession to any property located in the United States.<\/li><li><span style=\"text-decoration: underline;\">Torts<\/span>. Any claim against a foreign sovereign for a tort committed by its officer or employee during the course of duty; but any such claim is limited to compensatory damages for harm to a person or property in the United States.<\/li><li><span style=\"text-decoration: underline;\">Compelling Arbitration<\/span>. Any claim against a foreign sovereign to compel arbitration proceedings authorized by a contract.<\/li><li><span style=\"text-decoration: underline;\">Maritime Liens<\/span>. Admiralty proceedings to enforce a maritime lien for commercial debt against a foreign sovereign\u2019s vessel or cargo.<\/li><li><span style=\"text-decoration: underline;\">Damages for Acts of Terrorism<\/span>. Any claim against a foreign sovereign to recover losses for physical injury or death caused by an act of terrorism committed or abetted by the sovereign\u2019s officer or employee during the course of duty.<\/li><li><span style=\"text-decoration: underline;\">Counterclaims<\/span>. Certain counterclaims made by a counterclaimant whom the foreign sovereign has sued in a federal district court.<\/li><\/ul><p>In other words, foreign sovereigns cannot be sued in a U.S. federal court for punitive damages or claims not expressly allowed under 28 U.S.C. \u00a7\u00a7 1605-1607, but can be sued for any of the above-listed claims, which broadly speaking include claims for breach of contract in any commercial matter, other commercial claims, property claims, torts, maritime liens, arbitration orders, acts of terrorism, and counterclaims, as well as any claim for which a foreign sovereign has waived its sovereign immunity.<\/p><p>That is a far cry from ancient sovereign immunity, which protected each foreign sovereign from all claims that a private citizen might wish to bring against it in his home country. Under the Foreign Sovereign Immunities Act, however, private American citizens can sue foreign sovereigns in U.S. federal court for many if not most kinds of claims, but subject to the specific limitations described above.)))<\/p><p>A private American citizen can therefore sue a foreign sovereign for any antitrust claim that arises from the foreign sovereign\u2019s commercial activity in the United States or its commercial activity abroad if it has had a direct effect on the domestic commerce in the United States.(((insert<\/p><p>\u00a0<\/p><p>\u00a0<\/p><p>Relatedly, the federal courts also have discretion to decline to adjudicate an antitrust challenge to commercial activity that occurs in the foreign commerce of the United States, is therefore subject to federal antitrust law, but is more appropriately resolved by a foreign tribunal in accordance with its own laws. This discretionary immunity is often referred to as \u201cjudicial comity\u201d and affords antitrust immunity on a case-by-case basis when (1) the foreign tribunal has the stronger interest in applying its own laws to the case in question; or (2) the United States intervenes in the case to affirm that its foreign policy favors referring the case to the foreign tribunal for resolution according to its own laws.(((insert cites.)))<\/p>","_et_gb_content_width":"","footnotes":""},"class_list":["post-29209","page","type-page","status-publish","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.8 (Yoast SEO v24.8.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Antitrust Exemptions and Immunities - Explained<\/title>\n<meta name=\"description\" content=\"This article explains all available antitrust immunities and exemptions. 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