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- NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
- being done in connection with this case, at the time the opinion is issued.
- The syllabus constitutes no part of the opinion of the Court but has been
- prepared by the Reporter of Decisions for the convenience of the reader.
- See United States v. Detroit Lumber Co., 200 U. S. 321, 337.
-
- SUPREME COURT OF THE UNITED STATES
-
- Syllabus
-
- FEDERAL TRADE COMMISSION v. TICOR TITLE
- INSURANCE CO. et al.
- certiorari to the united states court of appeals for
- the third circuit
- No. 91-72. Argued January 13, 1992-Decided June 12, 1992
-
- Petitioner Federal Trade Commission filed an administrative complaint
- charging respondent title insurance companies with horizontal price
- fixing in setting fees for title searches and examinations in violation
- of 5(a)(1) of the Federal Trade Commission Act. In each of the four
- States at issue-Connecticut, Wisconsin, Arizona, and
- Montana-uniform rates were established by a rating bureau licensed
- by the State and authorized to establish joint rates for its members.
- Rate filings were made to the state insurance office and became
- effective unless the State rejected them within a specified period.
- The Administrative Law Judge held, inter alia, that the rates had
- been fixed in all four States, but that, in Wisconsin and Montana,
- respondents' anticompetitive activities were entitled to state-action
- immunity, as contemplated in Parker v. Brown, 317 U.S. 341, and
- its progeny. Under this doctrine, a state law or regulatory scheme
- can be the basis for antitrust immunity if the State (1) has articulat-
- ed a clear and affirmative policy to allow the anticompetitive conduct
- and (2) provides active supervision of anticompetitive conduct under-
- taken by private actors. California Retail Liquor Dealers Assn. v.
- Midcal Aluminum, Inc., 445 U.S. 97, 105. The Commission, which
- conceded that the first part of the test was met, held on review that
- none of the States had conducted sufficient supervision to warrant
- immunity. The Court of Appeals reversed, holding that the existence
- of a state regulatory program, if staffed, funded, and empowered by
- law, satisfied the active supervision requirement. Thus, it concluded,
- respondents' conduct in all the States was entitled to state-action
- immunity.
-
- Held:
- 1.State-action immunity is not available under the regulatory
- schemes in Montana and Wisconsin. Pp.8-16.
- (a)Principles of federalism require that federal antitrust laws be
- subject to supersession by state regulatory programs. Parker, supra,
- at 350-352; Midcal, supra; Patrick v. Burget, 486 U.S. 94. Midcal's
- two-part test confirms that States may not confer antitrust immunity
- on private persons by fiat. Actual state involvement is the precondi-
- tion for immunity, which is conferred out of respect for the State's
- ongoing regulation, not the economics of price restraint. The purpose
- of the active supervision inquiry 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 intervention. Although this immunity doctrine was
- developed in actions brought under the Sherman Act, the issue
- whether it applies to Commission action under the Federal Trade
- Commission Act need not be determined, since the Commission does
- not assert any superior pre-emption authority here. Pp.8-11.
- (b)Wisconsin, Montana, and 34 other States correctly contend
- that a broad interpretation of state-action immunity would not serve
- their best interests. The doctrine would impede, rather than ad-
- vance, the States' freedom of action if it required them to act in the
- shadow of such immunity whenever they entered the realm of
- economic regulation. Insistence on real compliance with both parts
- of the Midcal test serves to make clear that the States are responsi-
- ble for only the price fixing they have sanctioned and undertaken to
- control. Respondents' contention that such concerns are better
- addressed by the first part of the Midcal test misapprehends the
- close relation between Midcal's two elements, which are both directed
- at ensuring that particular anticompetitive mechanisms operate
- because of a deliberate and intended state policy. A clear policy
- statement ensures only that the State did not act through inadver-
- tence, not that the State approved the anticompetitive conduct. Sole
- reliance on the clear articulation requirement would not allow the
- States sufficient regulatory flexibility. Pp.11-13.
- (c)Where prices or rates are initially set by private parties,
- subject to veto only if the State chooses, the party claiming the
- immunity must show that state officials have undertaken the neces-
- sary steps to determine the specifics of the price-fixing or ratesetting
- scheme. The mere potential for state supervision is not an adequate
- substitute for the State's decision. Thus, the standard relied on by
- the Court of Appeals in this case is insufficient to establish the
- requisite level of active supervision. The Commission's findings of
- fact demonstrate that the potential for state supervision was not
- realized in either Wisconsin or Montana. While most rate filings
- were checked for mathematical accuracy, some were unchecked
- altogether. Moreover, one rate filing became effective in Montana
- despite the rating bureau's failure to provide requested information,
- and additional information was provided in Wisconsin after seven
- years, during which time another rate filing remained in effect.
- Absent active supervision, there can be no state-action immunity for
- what were otherwise private price-fixing arrangements. And state
- judicial review cannot fill the void. See Patrick, supra, at 103-105.
- This Court's decision in Southern Motor Carriers Rate Conference,
- Inc. v. United States, 471 U.S. 48, which involved a similar negative
- option regime, is not to the contrary, since it involved the question
- whether the first part of the Midcal test was met. This case involves
- horizontal price fixing under a vague imprimatur in form and agency
- inaction in fact, and it should be read in light of the gravity of the
- antitrust offense, the involvement of private actors throughout, and
- the clear absence of state supervision. Pp.13-16.
- 2.The Court of Appeals should have the opportunity to reexamine
- its determinations with respect to Connecticut and Arizona in order
- to address whether it accorded proper deference to the Commission's
- factual findings as to the extent of state supervision in those States.
- P.16.
- 922 F.2d 1122, reversed and remanded.
-
- Kennedy, J., delivered the opinion of the Court, in which White,
- Blackmun, Stevens, Scalia, and Souter, JJ., joined. Scalia, J., filed
- a concurring opinion. Rehnquist, C. J., filed a dissenting opinion, in
- which O'Connor and Thomas, JJ., joined. O'Connor, J., filed a
- dissenting opinion, in which Thomas, J., joined.
-