The Supreme Court/The Supreme Court.iso/pc/ascii/1991/91_72/91_72.zd2

Text File | 1992-06-11 | 4KB | 73 lines

SUPREME COURT OF THE UNITED STATES
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No. 91-72
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FEDERAL TRADE COMMISSION, PETITIONER v.
TICOR TITLE INSURANCE COMPANY et al.
on writ of certiorari to the united states court of
appeals for the third circuit
[June 12, 1992]

  Justice O'Connor, with whom Justice Thomas joins,
dissenting.
  Notwithstanding its assertions to the contrary, the Court
has diminished the States' regulatory flexibility by creating
an impossible situation for those subject to state regulation.
Even when a State has a -clearly articulated policy-
authorizing anticompetitive behavior-which the Federal
Trade Commission concedes was the case here-and even
when the State establishes a system to supervise the
implementation of that policy, the majority holds that a
federal court may later find that the State's supervision was
not sufficiently -substantial- in its -specifics- to insulate the
anticompetitive behavior from antitrust liability.  Ante, at
11.  Given the threat of treble damages, regulated entities
that have the option of heeding the State's anticompetitive
policy would be foolhardy to do so; those that are compelled
to comply are less fortunate.  The practical effect of today's
decision will likely be to eliminate so-called -negative
option- regulation from the universe of schemes available
to a State that seeks to regulate without exposing certain
conduct to federal antitrust liability.
  The Court does not dispute that each of the States at
issue in this case could have supervised respondents' joint
ratemaking; rather, it argues that -the potential for state
supervision was not realized in fact.-  Ante, at 14.  Such an
after-the-fact evaluation of a State's exercise of its supervi-
sory powers is extremely unfair to regulated parties.
Liability under the antitrust laws should not turn on how
enthusiastically a state official carried out his or her
statutory duties.  The regulated entity has no control over
the regulator, and very likely will have no idea as to the
degree of scrutiny that its filings may receive.  Thus, a
party could engage in exactly the same conduct in two
States, each of which had exactly the same policy of
allowing anticompetitive behavior and exactly the same
regulatory structure, and discover afterward that its actions
in one State were immune from antitrust prosecution, but
that its actions in the other resulted in treble-damage
liability.
  Moreover, even if a regulated entity could assure itself
that the State will undertake to actively supervise its rate
filings, the majority does not offer any guidance as to what
level of supervision will suffice.  It declares only that the
State must -pla[y] a substantial role in determining the
specifics of the economic policy.-  Ante, at 11.  That stan-
dard is not only ambiguous, but it also runs the risk of
being counterproductive.  The more reasonable a filed rate,
the less likely that a State will have to play any role other
than simply reviewing the rate for compliance with statu-
tory criteria.  Such a vague and retrospective standard,
combined with the threat of treble damages if that standard
is not satisfied, makes -negative option- regulation an
unattractive option for both States and the parties they
regulate.
  Finally, it is important to remember that antitrust
actions can be brought by private parties as well as by
government prosecutors.  The resources of state regulators
are strained enough without adding the extra burden of
asking them to serve as witnesses in civil litigation and
respond to allegations that they did not do their job.
  For these reasons, as well as those given by The Chief
Justice, I dissent.