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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