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95 Harv. L. Rev. 435 (1981-1982)
Antitrust Immunity for State Action after Lafayette

handle is hein.journals/hlr95 and id is 453 raw text is: COMMENTS ANTITRUST IMMUNITY FOR STATE ACTION AFTER LAFAYETTE* by Phillip Areeda** Sovereign states acting anticompetitively are usually immune from federal antitrust scrutiny. The Supreme Court recently limited this state action immunity in City of Lafayette v. Louisiana Power & Light Co., which subjects municipal power companies to the antitrust laws unless their anticompetitive acts are authorized by a state with an intent to displace the antitrust laws. In this Comment, Professor Areeda explores the implications of Lafayette, which raises the specter of undue antitrust scrutiny of governmental acts; such scrutiny, with its attendant threat of treble damages, might burden public treasuries, paralyze local decisionmaking, and weaken our federalism. He argues that these results can be avoided by narrowly defining the governmental entities that require Lafay- ette authorization, by generously defining what constitutes suffi- cient authority, and by relying on remedies other than treble damages against public bodies or officials. N its 1978 decision in City of Lafayette v. Louisiana Power Light Co.,' the Supreme Court held that a municipal power company was subject to antitrust liability unless its allegedly anticompetitive behavior was authorized by the state pursuant to a policy to displace the antitrust laws.2 That decision limited the scope of the state action immunity from the antitrust laws and raised two ominous specters: public officials or treasuries burdened by enormous treble damages, and federal courts forced to review the actions of state and local agencies for procedural or substantive irregularities.3 Fortunately, although these burdens on federalism are poten- tially severe, they are not compelled by Lafayette. Part I of this Comment outlines the development of the state action immunity from antitrust law; Part II states the Lafayette holding and the issues it leaves open; Part III con- siders when state authorization of anticompetitive activity is required; Part IV explores the meaning of authority and the implications for federal scrutiny of state and local governmen- * An elaboration of the analysis of this Comment appears in P. AREEDA, ANTI- TRUST LAw ch. 2B (Supp. 1982). ** Langdell Professor of Law, Harvard University. Harvard, A.B., 1951; LL.B., '954. 1 435 U.S. 389 (1978). 2 See id. at 413 (Part II of opinion of Brennan, J.). 3 There are also implications for private parties involved with these governmental bodies, but they are not the subject of this Comment.

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