Vanderbilt Law Review

First Page



In February 1986 the United States Supreme Court in Fisher v. Berkeley' upheld the validity of a municipal rent control ordinance against a contention that the Sherman Act preempted the ordinance. In an eight-to-one decision, the Court effectively gave the coup de grace to its earlier attempt to apply the federal antitrust laws to municipalities and political subdivisions. It also may have finally ended the remarkable series of disingenuous state-action decisions that had become an almost regular part of the Court's calendar since Goldfarb v. Virginia State Bar' in 1975.Fisher holds a promise of restoring to the state-action exemption a simplicity and predictability not seen since Parker v. Brown.

This Article examines the origin, history, and scope of the state-action doctrine of federal antitrust law-a doctrine exempting state legislation and other (generally regulatory) activity from invalidation by the federal antitrust laws. The Article describes the ways in which the Court increasingly confused and elaborated that doctrine. The Article examines in particular how the Court's recent decisions involving the relation of federal antitrust law to municipal legislation spun a web of confusion and uncertainty from which the Court itself has been forced to withdraw; how the lower federal courts refused to apply the Court's state-action precedents with which they disagreed; and how even the Congress was provoked into action to undo some of the uncertainties engendered by these decisions. The examination of the state-action doctrine attempts to identify the concerns underlying the Court's recent state-action decisions and to show why the series of state-action decisions since 1975 has been a failure. The Article also attempts to delineate the proper reach of federal antitrust law and to provide a reasoned basis for its conclusions. The analysis includes an assessment of Fisher v. Berkeley and its ramifications for the relation between federal antitrust law and the regulatory laws of states and local governments. Finally, the Article proposes legislation that provides an optimum reconciliation of the free market policies underlying the federal antitrust laws and the internal governing autonomy to which the states are entitled.