Antitrust and the New State Action Doctrine: A Return to Deferential Economic Federalism

Abstract

Some amount of conflict is inevitable between federal antitrust laws and state economic regulation. Written in broad strokes, federal antitrust prohibits combinations in restraint of trade or monopolization of markets, and thus confirms competition in free markets as the fundamental principle governing the national economy.' In the eloquent words of the Supreme Court, [federal antitrust law] rests on the premise that the unrestrained interaction of competitive forces will yield the best allocation of our economic resources, the lowest prices, the highest quality and the greatest material progress, while at the same time providing an environment conducive to the preservation of our democratic political and social institutions.2 State economic regulation, on the other hand, usually supplants competition and free markets. For example, states commonly regulate utilities, license professions, zone property, limit taxicab permits, or place other price or entry controls upon selected businesses. Although state regulation is often designed to correct perceived market failures,3 much of it is economically inefficient and thus in conflict with federal antitrust policy.4 If strict preemption standards were applied to this conflict betweeen federal antitrust laws and state economic regulation, the supremacy clause of the Constitution would require the wholesale invalidation of