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NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports.  Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash-
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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 Kennedy delivered the opinion of the Court.
  The Federal Trade Commission filed an administrative
complaint against six of the nation's largest title insurance
companies, alleging horizontal price fixing in their fees for
title searches and title examinations.  One company settled
by consent decree, while five other firms continue to contest
the matter.  The Commission charged the title companies
with violating  5(a)(1) of the Federal Trade Commission
Act, 38 Stat. 719, 15 U. S. C. 45(a)(1), which prohibits
-[u]nfair methods of competition in or affecting commerce.-
One of the principal defenses the companies assert is state-
action immunity from antitrust prosecution, as contemplat-
ed in the line of cases beginning with Parker v. Brown, 317
U. S. 341 (1943).  The Commission rejected this defense, In
re Ticor Title Ins. Co., 112 F.T.C. 344 (1989), and the firms
sought review in the United States Court of Appeals for the
Third Circuit.  Ruling that state-action immunity was
available under the state regulatory schemes in question,
the Court of Appeals reversed.  922 F. 2d 1122 (1991).  We
granted certiorari.  502 U. S. ___ (1991).
                            I
  Title insurance is the business of insuring the record title
of real property for persons with some interest in the estate,
including owners, occupiers, and lenders.  A title insurance
policy insures against certain losses or damages sustained
by reason of a defect in title not shown on the policy or title
report to which it refers.  Before issuing a title insurance
policy, the insurance company or one of its agents performs
a title search and examination.  The search produces a
chronological list of the public documents in the chain of
title to the real property.  The examination is a critical
analysis or interpretation of the condition of title revealed
by the documents disclosed through this search.
  The title search and examination are major components
of the insurance company's services.  There are certain
variances from State to State and from policy to policy, but
a brief summary of the functions performed by the title
companies can be given.  The insurance companies exclude
from coverage defects uncovered during the search; that is,
the insurers conduct searches in order to inform the insured
and to reduce their own liability by identifying and exclud-
ing known risks.  The insured is protected from some losses
resulting from title defects not discoverable from a search
of the public records, such as forgery, missing heirs,
previous marriages, impersonation, or confusion in names.
They are protected also against errors or mistakes in the
search and examination.  Negligence need not be proved in
order to recover.  Title insurance also includes the obliga-
tion to defend in the event that an insured is sued by
reason of some defect within the scope of the policy's
guarantee.
  The title insurance industry earned $1.35 billion gross
revenues in 1982, and respondents accounted for 57 percent
of that amount.  Four of respondents are the nation's
largest title insurance companies:  Ticor Title Insurance
Co., with 16.5 percent of the market; Chicago Title Insur-
ance Co., with 12.8 percent; Lawyers Title Insurance Co.,
with 12 percent; and SAFECO Title Insurance Co. (now
operating under the name Security Union Title Insurance
Co.), with 10.3 percent.  Stewart Title Guarantee Co., with
5.4 percent of the market, is the country's eighth largest
title insurer, with a strong position in the West and
Southwest.
  The Commission issued an administrative complaint in
1985.  Horizontal price-fixing was alleged in these terms:
-`Respondents have agreed on the price to be charged
for title search and examination services or settlement
services through rating bureaus in various states.
Examples of states in which one or more of the Respon-
dents have fixed prices with other Respondents or other
competitors for all or part of their search and examina-
tion services or settlement services are Arizona,
Connecticut, Idaho, Louisiana, Montana, New Jersey,
New Mexico, New York, Ohio, Oregon, Pennsylvania,
Wisconsin and Wyoming.'-  112 F.T.C., at 346.
The Commission did not challenge the insurers' practice of
setting uniform rates for insurance against the risk of loss
from defective titles, but only the practice of setting uniform
rates for the title search, examination, and settlement,
aspects of the business which, the Commission alleges, do
not involve insurance.
  Before the Administrative Law Judge (ALJ), the respon-
dents defended against liability on three related grounds.
First, they maintained that the challenged conduct is
exempt from antitrust scrutiny under the McCarran-
Ferguson Act, 59 Stat. 34, 15 U. S. C. 1012(b), which
confers antitrust immunity over the -business of insurance-
to the extent regulated by state law.  Second, they argued
that their collective ratemaking activities are exempt under
the Noerr-Pennington doctrine, which places certain -[j]oint
efforts to influence public officials- beyond the reach of the
antitrust laws.  Mine Workers v. Pennington, 381 U. S. 657,
670 (1965); Eastern Railroad Presidents Conference v. Noerr
Motor Freight, Inc., 365 U. S. 127, 136 (1961).  Third,
respondents contended their activities are entitled to state-
action immunity, which permits anticompetitive conduct if
authorized and supervised by state officials.  See California
Retail Liquor Dealers Assn. v. Midcal Aluminum Inc., 445
U. S. 97 (1980); Parker v. Brown, 317 U. S. 341 (1943).  As
to one State, Ohio, the respondents contended that the
rates for title search, examination, and settlement had not
been set by a rating bureau.
  Title insurance company rates and practices in thirteen
States were the subject of the initial complaint.  Before the
matter was decided by the ALJ, the Commission declined to
pursue its complaint with regard to fees in five of these
States, Louisiana, New Mexico, New York, Oregon, and
Wyoming.  Upon the recommendation of the ALJ, the
Commission did not pursue its complaint with regard to
fees in two additional States, Idaho and Ohio.  This left six
States in which the Commission found antitrust violations,
but in two of these States, New Jersey and Pennsylvania,
the Commission conceded the issue on which certiorari was
sought here, so the regulatory regimes in these two States
are not before us.  Four States remain in which violations
were alleged:  Connecticut, Wisconsin, Arizona, and
Montana.
  The ALJ held that the rates for search and examination
services had been fixed in these four States.  For reasons
we need not pause to examine, the ALJ rejected the
McCarran-Ferguson and Noerr-Pennington defenses.  The
ALJ then turned his attention to the question of state-
action immunity.  A summary of the ALJ's extensive
findings on this point is necessary for a full understanding
of the decisions reached at each level of the proceedings in
the case.
  Rating bureaus are private entities organized by title
insurance companies to establish uniform rates for their
members.  The ALJ found no evidence that the collective
setting of title insurance rates through rating bureaus is a
way of pooling risk information.  Indeed, he found no
evidence that any title insurer sets rates according to
actuarial loss experience.  Instead, the ALJ found that the
usual practice is for rating bureaus to set rates according to
profitability studies that focus on the costs of conducting
searches and examinations.  Uniform rates are set notwith-
standing differences in efficiencies and costs among individ-
ual members.
  The ALJ described the regulatory regimes for title
insurance rates in the four States still at issue.  In each
one, the title insurance rating bureau was licensed by the
State and authorized to establish joint rates for its mem-
bers.  Each of the four States used what has come to be
called a -negative option- system to approve rate filings by
the bureaus.  Under a negative option system, the rating
bureau filed rates for title searches and title examinations
with the state insurance office.  The rates became effective
unless the State rejected them within a specified period,
such as 30 days.  Although the negative option system
provided a theoretical mechanism for substantive review,
the ALJ determined, after making detailed findings
regarding the operation of each regulatory regime, that the
rate filings were subject to minimal scrutiny by state
regulators.
  In Connecticut the State Insurance Department has the
authority to audit the rating bureau and hold hearings
regarding rates, but it has not done so.  The Connecticut
rating bureau filed only two major rate increases, in 1966
and in 1981.  The circumstances behind the 1966 rate
increase are somewhat obscure.  The ALJ found that the
Insurance Department asked the rating bureau to submit
additional information justifying the increase, and later
approved the rate increase although there is no evidence
the additional information was provided.  In 1981 the
Connecticut rating bureau filed for a 20 percent rate
increase.  The factual background for this rate increase is
better developed though the testimony was somewhat
inconsistent.  A state insurance official testified that he
reviewed the rate increase with care and discussed various
components of the increase with the rating bureau.  The
same official testified, however, that he lacked the authority
to question certain expense data he considered quite high.
  In Wisconsin the State Insurance Commissioner is
required to examine the rating bureau at regular intervals
and authorized to reject rates through a process of hearings.
Neither has been done.  The Wisconsin rating bureau made
major rate filings in 1971, 1981, and 1982.  The 1971 rate
filing was approved in 1971 although supporting justifica-
tion, which had been requested by the State Insurance
Commissioner, was not provided until 1978.  The 1981 rate
filing requested an 11 percent rate increase.  The increase
was approved after the office of the Insurance Commission-
er checked the supporting data for accuracy.  No one in the
agency inquired into insurer expenses, though an official
testified that substantive scrutiny would not be possible
without that inquiry.  The 1982 rate increase received but
a cursory reading at the office of the Insurance Commis-
sioner.  The supporting materials were not checked for
accuracy, though in the absence of an objection by the
agency, the rate increase went into effect.
  In Arizona the Insurance Director was required to
examine the rating bureau at least once every five years.
It was not done.  In 1980 the State Insurance Department
announced a comprehensive investigation of the rating
bureau.  It was not conducted.  The rating bureau spent
most of its time justifying its escrow rates.  Following
settlement in 1981 of a federal civil suit challenging the
joint fixing of escrow rates, the rating bureau went out of
business without having made any major rate filings,
though it had proposed minor rate adjustments.
  In Montana the rating bureau made its only major rate
filing in 1983.  In connection with it, a representative of the
rating bureau met with officials of the State Insurance
Department.  He was told that the filed rates could go into
immediate effect though further profit data would have to
be provided.  The ALJ found no evidence that the additional
data were furnished.
  To complete the background, the ALJ observed that none
of the rating bureaus are now active.  The respondents
abandoned them between 1981 and 1985 in response to
numerous private treble damage suits, so by the time the
Commission filed its formal complaint in 1985, the rating
bureaus had been dismantled.  The ALJ held that the case
is not moot, though, because nothing would preclude
respondents from resuming the conduct challenged by the
Commission.  See United States v. W. T. Grant Co., 345
U. S. 629, 632-633 (1953).
  These factual determinations established, the ALJ
addressed the two-part test that must be satisfied for state-
action immunity under the antitrust laws, the test we set
out in California Retail Liquor Dealers Assn. v. Midcal
Aluminum, Inc., 445 U. S. 97 (1980).  A state law or
regulatory scheme cannot be the basis for antitrust immuni-
ty unless, first, the State has articulated a clear and
affirmative policy to allow the anticompetitive conduct, and
second, the State provides active supervision of anticompeti-
tive conduct undertaken by private actors.  Id., at 105.  The
Commission having conceded that the first part of the test
was satisfied in the four States still at issue, the immunity
question, beginning with the hearings before the ALJ and
in all later proceedings, has turned upon the proper
interpretation and application of Midcal's active supervision
requirement.  The ALJ found the active supervision test
was met in Arizona and Montana but not in Connecticut or
Wisconsin.
  On review of the ALJ's decision, the Commission held
that none of the four states had conducted sufficient
supervision, so that the title companies were not entitled to
immunity in any of those jurisdictions.  The Court of
Appeals for the Third Circuit disagreed with the Commis-
sion, adopting the approach of the First Circuit in New
England Motor Rate Bureau, Inc., v. FTC, 908 F. 2d 1064
(1990), which had held that the existence of a state regula-
tory program, if staffed, funded, and empowered by law,
satisfied the requirement of active supervision.  Id., at
1071.  Under this standard, the Court of Appeals for the
Third Circuit ruled that the active state supervision
requirement was met in all four states and held that the
respondents' conduct was entitled to state action immunity
in each of them.
  We granted certiorari to consider two questions:  First,
whether the Third Circuit was correct in its statement of
the law and in its application of law to fact, and second,
whether the Third Circuit exceeded its authority by
departing from the factual findings entered by the ALJ and
adopted by the Commission.  Before this Court, the parties
have confined their briefing on the first of these questions
to the regulatory regimes of Wisconsin and Montana, and
focused on the regulatory regimes of Connecticut and
Arizona in briefing on the second question.  We now reverse
the Court of Appeals under the first question and remand
for further proceedings under the second.
                           II
  The preservation of the free market and of a system of
free enterprise without price fixing or cartels is essential to
economic freedom.  United States v. Topco Associates, Inc.,
405 U. S. 596, 610 (1972).  A national policy of such a
pervasive and fundamental character is an essential part of
the economic and legal system within which the separate
States administer their own laws for the protection and
advancement of their people.  Continued enforcement of the
national antitrust policy grants the States more freedom,
not less, in deciding whether to subject discrete parts of the
economy to additional regulations and controls.  Against
this background, in Parker v. Brown, 317 U. S. 341 (1943),
we upheld a state-supervised market sharing scheme
against a Sherman Act challenge.  We announced the
doctrine that federal antitrust laws are subject to superses-
sion by state regulatory programs.  Our decision was
grounded in principles of federalism.  Id., at 350-352.
  The principle of freedom of action for the States, adopted
to foster and preserve the federal system, explains the later
evolution and application of the Parker doctrine in our
decisions in Midcal, supra, and Patrick v. Burget, 486 U. S.
94 (1988).  In Midcal we invalidated a California statute
forbidding licensees in the wine trade from selling below
prices set by the producer.  There we announced the two-
part test applicable to instances where private parties
participate in a price fixing regime.  -First, the challenged
restraint must be one clearly articulated and affirmatively
expressed as state policy; second, the policy must be
actively supervised by the State itself.-  Midcal, 445 U. S.,
at 105 (internal quotation marks omitted).  Midcal confirms
that while a State may not confer antitrust immunity on
private persons by fiat, it may displace competition with
active state supervision if the displacement is both intended
by the State and implemented in its specific details.  Actual
state involvement, not deference to private price fixing
arrangements under the general auspices of state law, is
the precondition for immunity from federal law.  Immunity
is conferred out of respect for ongoing regulation by the
State, not out of respect for the economics of price restraint.
In Midcal we found that the intent to restrain prices was
expressed with sufficient precision so that the first part of
the test was met, but that the absence of state participation
in the mechanics of the price posting was so apparent that
the requirement of active supervision had not been met.
Ibid.
  The rationale was further elaborated in Patrick v. Burget.
In Patrick it had been alleged that private physicians
participated in the State's peer review system in order to
injure or destroy competition by denying hospital privileges
to a physician who had begun a competing clinic.  We
referred to the purpose of preserving the State's own
administrative policies, as distinct from allowing private
parties to foreclose competition, in the following passage:
-The active supervision requirement stems from the
recognition that where a private party is engaging in
the anticompetitive activity, there is a real danger that
he is acting to further his own interests, rather than
the governmental interests of the State. . . . The re-
quirement is designed to ensure that the state-action
doctrine will shelter only the particular anticompetitive
acts of private parties that, in the judgment of the
State, actually further state regulatory policies.  To
accomplish this purpose, the active supervision require-
ment mandates that the State exercise ultimate control
over the challenged anticompetitive conduct. . . . The
mere presence of some state involvement or monitoring
does not suffice. . . . The active supervision prong of the
Midcal test requires that state officials have and
exercise power to review particular anticompetitive acts
of private parties and disapprove those that fail to
accord with state policy.  Absent such a program of
supervision, there is no realistic assurance that a
private party's anticompetitive conduct promotes state
policy, rather than merely the party's individual
interests.-  486 U. S., at 100-101 (internal quotation
marks and citations omitted).
Because the particular anticompetitive conduct at issue in
Patrick had not been supervised by governmental actors, we
decided that the actions of the peer review committee were
not entitled to state-action immunity.  Id., at 106.
  Our decisions make clear that the purpose of the active
supervision inquiry is not to determine whether the State
has met some normative standard, such as efficiency, in its
regulatory practices.  Its purpose is to determine whether
the State has exercised sufficient independent judgment
and control so that the details of the rates or prices have
been established as a product of deliberate state interven-
tion, not simply by agreement among private parties.  Much
as in causation inquiries, the analysis asks whether the
State has played a substantial role in determining the
specifics of the economic policy.  The question is not how
well state regulation works but whether the anticompetitive
scheme is the State's own.
  Although the point bears but brief mention, we observe
that our prior cases considered state-action immunity
against actions brought under the Sherman Act, and this
case arises under the Federal Trade Commission,  Act.  The
Commission has argued at other times that state-action
immunity does not apply to Commission action under 5
of the Federal Trade Commission Act, 15 U. S. C. 45.  See
U. S. Bureau of Consumer Protection, Staff Report to the
Federal Trade Commission on Prescription Drug Price
Disclosures, Chs. VI (B) and (C) (1975); see also Note, The
State Action Exemption and Antitrust Enforcement under
the Federal Trade Commission Act, 89 Harv. L. Rev. 715
(1976).  A leading treatise has expressed its skepticism of
this view.  See 1 P. Areeda & D. Turner, Antitrust Law
-218 (1978).  We need not determine whether the antitrust
statutes can be distinguished on this basis, because the
Commission does not assert any superior pre-emption
authority in the instant matter.  We apply our prior cases
to the one before us.
  The respondents contend that principles of federalism
justify a broad interpretation of state-action immunity, but
there is a powerful refutation of their viewpoint in the
briefs that were filed in this case.  The State of Wisconsin,
joined by Montana and 34 other States, has filed a brief as
amici curiae on the precise point.  These States deny that
respondents' broad immunity rule would serve the States'
best interests.  We are in agreement with the amici
submission.
  If the States must act in the shadow of state-action
immunity whenever they enter the realm of economic
regulation, then our doctrine will impede their freedom of
action, not advance it.  The fact of the matter is that the
States regulate their economies in many ways not inconsis-
tent with the antitrust laws.  For example, Oregon may
provide for peer review by its physicians without approving
anticompetitive conduct by them.  See Patrick, supra, at
105.  Or Michigan may regulate its public utilities without
authorizing monopolization in the market for electric light
bulbs.  See Cantor v. Detroit Edison Co., 428 U. S. 579, 596
(1976).  So we have held that state-action immunity is
disfavored, much as are repeals by implication.  Lafayette
v. Louisiana Power & Light Co., 435 U. S. 389, 398-399
(1978).  By adhering in most cases to fundamental and
accepted assumptions about the benefits of competition
within the framework of the antitrust laws, we increase the
States' regulatory flexibility.
  States must accept political responsibility for actions they
intend to undertake.  It is quite a different matter, howev-
er, for federal law to compel a result that the States do not
intend but for which they are held to account.  Federalism
serves to assign political responsibility, not to obscure it.
Neither federalism nor political responsibility is well served
by a rule that essential national policies are displaced by
state regulations intended to achieve more limited ends.
For States which do choose to displace the free market with
regulation, our insistence on real compliance with both
parts of the Midcal test will serve to make clear that the
State is responsible for the price fixing it has sanctioned
and undertaken to control.
  The respondents contend that these concerns are better
addressed by the requirement that the States articulate a
clear policy to displace the antitrust laws with their own
forms of economic regulation.  This contention misappre-
hends the close relation between Midcal's two elements.
Both are directed at ensuring that particular anticompe-
titive mechanisms operate because of a deliberate and
intended state policy.  See Patrick, supra, at 100.  In the
usual case, Midcal's requirement that the State articulate
a clear policy shows little more than that the State has not
acted through inadvertence; it cannot alone ensure, as
required by our precedents, that particular anticompetitive
conduct has been approved by the State.  It seems plain,
moreover, in light of the amici curiae brief to which we
have referred, that sole reliance on the requirement of clear
articulation will not allow the regulatory flexibility that
these States deem necessary.  For States whose object it is
to benefit their citizens through regulation, a broad doctrine
of state-action immunity may serve as nothing more than
an attractive nuisance in the economic sphere.  To oppose
these pressures, sole reliance on the requirement of clear
articulation could become a rather meaningless formal
constraint.
                           III
  In the case before us, the Court of Appeals relied upon a
formulation of the active supervision requirement articulat-
ed by the First Circuit:
-`Where . . . the state's program is in place, is staffed
and funded, grants to the state officials ample power
and the duty to regulate pursuant to declared stan-
dards of state policy, is enforceable in the state's courts,
and demonstrates some basic level of activity directed
towards seeing that the private actors carry out the
state's policy and not simply their own policy, more
need not be established.'-  922 F. 2d, at 1136, quoting
New England Motor Rate Bureau, Inc. v. FTC, 908 F.
2d 1064, 1071 (CA1 1990).
Based on this standard, the Third Circuit ruled that the
active supervision requirement was met in all four states,
and held that the respondents' conduct was entitled to
state-action immunity from antitrust liability.  992 F. 2d, at
1140.
  While in theory the standard articulated by the First
Circuit might be applied in a manner consistent with our
precedents, it seems to us insufficient to establish the
requisite level of active supervision.  The criteria set forth
by the First Circuit may have some relevance as the
beginning point of the active state supervision inquiry, but
the analysis cannot end there.  Where prices or rates are
set as an initial matter by private parties, subject only to a
veto if the State chooses to exercise it, the party claiming
the immunity must show that state officials have undertak-
en the necessary steps to determine the specifics of the
price-fixing or ratesetting scheme.  The mere potential for
state supervision is not an adequate substitute for a
decision by the State.  Under these standards, we must
conclude that there was no active supervision in either
Wisconsin or Montana.
  The respondents point out that in Wisconsin and Mon-
tana the rating bureaus filed rates with state agencies and
that in both States the so-called negative option rule
prevailed.  The rates became effective unless they were
rejected within a set time.  It is said that as a matter of law
in those States inaction signified substantive approval.
This proposition cannot be reconciled, however, with the
detailed findings, entered by the ALJ and adopted by the
Commission, which demonstrate that the potential for state
supervision was not realized in fact.  The ALJ found, and
the Commission agreed, that at most the rate filings were
checked for mathematical accuracy.  Some were unchecked
altogether.  In Montana, a rate filing became effective
despite the failure of the rating bureau to provide addition-
al requested information.  In Wisconsin, additional informa-
tion was provided after a lapse of seven years, during which
time the rate filing remained in effect.  These findings are
fatal to respondents' attempts to portray the state regulato-
ry regimes as providing the necessary component of active
supervision.  The findings demonstrate that, whatever the
potential for state regulatory review in Wisconsin and
Montana, active state supervision did not occur.  In the
absence of active supervision in fact, there can be no state-
action immunity for what were otherwise private price
fixing arrangements.  And as in Patrick, the availability of
state judicial review could not fill the void.  Because of the
state agencies' limited role and participation, state judicial
review was likewise limited.  See Patrick, 486 U. S., at
103-105.
  Our decision in Southern Motor Carriers Rate Conference,
Inc. v. United States, 471 U. S. 48 (1985), though it too
involved a negative option regime, is not to the contrary.
The question there was whether the first part of the Midcal
test was met, the Government's contention being that a
pricing policy is not an articulated one unless the practice
is compelled.  We rejected that assertion and undertook no
real examination of the active supervision aspect of the
case, for the Government conceded that the second part of
the test had been met.  Id., at 62, 66.  The concession was
against the background of a district court determination
that, although submitted rates could go into effect without
further state activity, the State had ordered and held rate-
making hearings on a consistent basis, using the industry
submissions as the beginning point.  See United States v.
Southern Motor Carriers Rate Conference, Inc., 467 F. Supp.
471, 476-477 (ND Ga. 1979).  In the case before us, of
course, the Government concedes the first part of the
Midcal requirement and litigates the second; and there is
no finding of substantial state participation in the rate
setting scheme.
  This case involves horizontal price fixing under a vague
imprimatur in form and agency inaction in fact.  No
antitrust offense is more pernicious than price fixing.  FTC
v. Superior Court Trial Lawyers Assn., 493 U. S. 411, 434,
n.16 (1990).  In this context, we decline to formulate a rule
that would lead to a finding of active state supervision
where in fact there was none.  Our decision should be read
in light of the gravity of the antitrust offense, the involve-
ment of private actors throughout, and the clear absence of
state supervision.  We do not imply that some particular
form of state or local regulation is required to achieve ends
other than the establishment of uniform prices.  Cf.
Columbia v. Omni Outdoor Advertising, Inc., 499 U. S. ___
(1991) (city billboard zoning ordinance entitled to state-
action immunity).  We do not have before us a case in
which governmental actors made unilateral decisions
without participation by private actors.  Cf. Fisher v.
Berkeley, 475 U. S. 260 (1986) (private actors not liable
without private action).  And we do not here call into
question a regulatory regime in which sampling techniques
or a specified rate of return allow state regulators to
provide comprehensive supervision without complete
control, or in which there was an infrequent lapse of state
supervision.  Cf. 324 Liquor Corp. v. Duffy, 479 U. S. 335,
344, n.6 (1987) (a statute specifying the margin between
wholesale and retail prices may satisfy the active supervi-
sion requirement).  In the circumstances of this case,
however, we conclude that the acts of the respondents in
the States of Montana and Wisconsin are not immune from
antitrust liability.
                           IV
  In granting certiorari we undertook to review the further
contention by the Commission that the Court of Appeals
was incorrect in disregarding the Commission's findings as
to the extent of state supervision.  The parties have focused
their briefing on this question on the regulatory schemes of
Connecticut and Arizona.  We think the Court of Appeals
should have the opportunity to reexamine its determina-
tions with respect to these latter two States in light of the
views we have expressed.
  The judgment of the Court of Appeals is reversed and the
case is remanded for further proceedings consistent with
this opinion.
                                      It is so ordered.