Since 1945 the McCarran-Ferguson Act has exempted the “business of insurance” from the federal antitrust laws to “the extent that such business is not regulated by State law.” This Note questions whether the ongoing attempts by members of Congress to repeal the antitrust exemption for the business of insurance is good policy. In assessing the implications of repeal, this Note analyzes whether the addition of federal antitrust enforcement would be compatible with the increasingly regulated health insurance industry. As a case study, this Note applies the implied antitrust immunity framework developed by the Supreme Court in Billing v. Credit Suisse to Massachusetts’ insurance regulations. This Note argues that the implied immunity doctrine, in seeking to determine how Congress would have intended two regulatory systems to interact, can function as a prudential tool to aid Congress when it seeks to either alter the reach of the antitrust laws or create regulations that assume the func.
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Urban Law Annual Journal of Urban and Contemporary Law
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SSRN Electronic Journal
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Journal of Risk and Uncertainty
The antitrust exemptions provided by the McCarran-Ferguson Act are often identified as the cause of a variety of problems that have plagued the property-liability insurance industry in the last decade. In particular, proponents of repeal of the Act suggest that it has facilitated anticompetitive behavior by insurers, which in turn contributed to the liability and auto insurance crises of the 1980s. We examine industry structure, behavior, and performance and assess possible market imperfections that may justify price regulation and special antitrust treatment. We find that the major barrier to effective competition is state rate regulation rather than anticompetitive behavior. We examine evidence on the causes of the liability and auto insurance crises and conclude that they are readily explained by changes in market conditions and regulatory constraints rather than anticompetitive behavior. While there is no need for the broad antitrust exemptions contained in the Act, there is a danger that repeal will lead to more inefficient price regulation unless reform of the Act includes restrictions on state rate regulation. We propose reform legislation that both narrows the industry's antitrust exmption and promotes competition.
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The Review of Austrian Economics
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This is a legal note on issues of the federal common law of remedies, specifically common law remedies applied by the federal courts in the context of antitrust actions. The note, building on my previous research around the Supreme Court's clarification of the scope of the Erie Doctrine in Clearfield Trust Co. v. United States, 318 U.S. 363 (1943), looks at the implications and limitations on the ability of the federal courts to craft common law remedies in the present antitrust environment. Taking as case studies the decision of the Eighth Circuit's decision in Travelers v. IADA Services (8th Cir. 2007) and the decision of the Second Circuit in Chemung Canal Trust Co. v. Sovran Bank / Maryland (2d Cir. 1991), the note considers the implication for the antitrust litigant and the "great diversity in results" that would subvert the antitrust regime and its principal anticompetitive objectives by constraining the ability of federal courts to craft remedies. Additionally, issues of federalism, judicial restraint, and exceptions to the Erie Doctrine's attendant limitations on the development of "general federal common law" are considered. Abstract: Antitrust law, codified under the Sherman Antitrust Act and the Clayton Antitrust Act, among other provisions of federal law, plays a key role in the regulation of corporations, the actions of the free market, and in the functioning of modern corporations. This Note seeks to examine antitrust remedies-both those provided under statute and those conceived of at common law-in relation to another corpus of law: the federal common law. While historically "maligned" and severely restrained in the notable Supreme Court decision of Erie Railroad Company v. Tompkins, federal common law persists in a limited number of areas and for a variety of purposes, but especially in certain enclaves where federal concerns have been held to uniquely predominate. This Note looks at these issues of federal common law, along with parallel concerns of preemption, in the context of antitrust remedies, using the Supreme Court's qualification of Erie generally in Clearfield Trust Company v. United States and its later discourse in the context of the antitrust remedy of contribution in Texas Industries v. Radcliff Materials to guide an analysis of some foundational concerns presented by the federal common law. Finally, this Note considers more contemporary circuit applications of Texas Industries and two competing approaches advanced by those circuits as a prism to consider common law remedies and the extent to which the federal common law today may provide an avenue to relief in the absence of an express grant of authority by federal statute. Together, this Note seeks to proffer insight for parties to an antitrust action who collectively ponder: what remedies exist beyond those expressly stated in the statute and how does the federal common law shape the development of those remedies? What are the limitations on remedies and how do we (or should we) proceed in the absence of express remedial schemes in the statute itself? Program: Juris Doctor, William & Mary Law School
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