Anthony Joseph Scirica

“ Simply because the state officials might conspire with a private party to stifle competition does not mean that the action loses immunity. See id. at 350-51 ("We find nothing in the language of the Sherman Act or in its history which suggests that its purpose was to restrain a state or its officers or agents from activities directed by its legislature.") .↑ In doing so, we join other federal courts which have held the Multistate Settlement Agreement is entitled to Noerr-Pennington immunity, though we recognize these cases did not involve identical facts. ”

“ In Asheville Tobacco, the Court of Appeals for the Fourth Circuit held that where a state statute authorized the creation of local tobacco boards to regulate tobacco sales at auctions, and where the states did not continue to supervise the decisions of these boards, the board's actions were not protected by Parker immunity. This principle has also been applied in state granted monopoly cases. ”

“ The Parker doctrine relies heavily on the clarity of the State's goals and actions. "States must accept political responsibility for the actions they intend to undertake." FTC v. Ticor Title Ins. Co., 504 U.S. 621, 636, 119 L. Ed. 2d 410, 112 S.C.t. 2169 (1992) . The key question is whether the allegedly anticompetitive restraint may be considered the product of sovereign state action. If it is not, then even if sectors of state government are involved, the activity will not constitute "state action" under the Parker doctrine and will not receive immunity. ”

“ For example, if a participating tobacco company lost 10% of its market share to a new entrant or other company that did not sign the Multistate Settlement Agreement, it may be able to reduce its payments by as much as 24%. ”

“ Since Midcal, other courts have found that if a state creates or sanctions a monopoly or cartel through its sovereign powers, but does not regulate the resulting prices, the resulting anticompetitive behavior should not be granted immunity. In Wheately, we held that because the Virgin Islands Alcoholic Beverages Fair Trade Law did not grant the power to "approve, disapprove, or modify the prices fixed by private persons," the program could not meet the active supervision prong of Midcal and was not immune under Parker. ”

“ The Court has made clear that a pure restriction on output is anticompetitive and in the absence of special circumstances, [24] would violate the antitrust laws. NCAA, 468 U.S. at 85 (recognizing that output restrictions may be permissible if required in order to market the product at all) . By limiting production, the cartel is able to raise prices above competitive levels. ”

“ As noted, we hold we must apply the Midcal test. Although the States satisfy Midcal's "clear articulation" prong, they fail the second prong requiring them to actively supervise the anticompetitive restraints causing injury. Because private participants in state action enjoy Parker immunity only to the extent the States enjoy immunity, the defendants are not shielded by Parker. [56] Therefore, consistent with the Supreme Court's treatment of hybrid restraints, we hold defendants are not immune under the Parker immunity doctrine. ”

“ Defendants contend an antitrust analysis is unnecessary if we find either Noerr-Pennington or Parker immunity applies. But plaintiffs argue that immunity cannot attach to per se antitrust violations. We disagree. ”

“ The state legislatures also demonstrated their approval in most of the States by passing implementing legislation. See Cal. Aviation Inc., 806 F.2d at 909 n.5 (noting that statutes passed afterwards are evidence of pre-existing state policy to allow anticompetitive behavior) . Even before the settlement, legislatures of some states targeted the tobacco industry by putting pressure on the Attorney General or Governor to bring suit. ”

“ We have recognized, for example, that 'there is often no bright line separating per se from rule of reason analysis,' since 'considerable inquiry into market conditions' may be required before the application of any so-called 'per se' condemnation is justified. ”

“ In Midcal, the challenged "restraints" were state statutes on pricing and resale price maintenance. But there were several other ways in which the State of California regulated the wine industry. See, e.g., Cal. Bus & Prof. Stat. Ann. §§ 25600-67 (West 1964) . [47] California actively supervised when, where, and to whom wine or other alcoholic beverages could be sold, [48] the markings and signs on labels, [49] penalties for underage use, [50] and advertisements, including prohibiting advertising to minors. ”

“ Ill. Brick Co. v. Illinois, 431 U.S. 720, 735, 97 S.C.t. 2061, 52 L. Ed. 2d 707 (1977) ("The antitrust laws will be more effectively enforced by concentrating the full recovery for the overcharge in the direct purchasers rather than by allowing every plaintiff potentially affected by the overcharge to sue only for the amount it could show was absorbed by it.") . ”

“ See FTC Report on Competition and the Financial Impact of the Proposed National Tobacco Settlement 34 (September 1997) .↑ This baseline payment is subject to the Inflation Adjustment, the Volume Adjustment, the Previously Settled States Reduction, the Non-Settling States Reduction, the NPM Adjustment, the offset for miscalculated or disputed payments described in subsection XI (i) , the Federal Tobacco Legislation Offset, the Litigating Releasing Parties Offset, and the offsets for claims over described in subsections XII (a) (4) (B) and XII (a) (8) . ”

“ Midcal, 445 U.S. 97, 63 L. Ed. 2d 233, 100 S.C.t. 937) .↑ See, e.g., Maryland Seeks Billions From Tobacco Firms for Medicaid Costs, Washington Post, May 2, 1996, at B5 (quoting Maryland Attorney General Joseph Curran's press conference where he stated, " [The tobacco companies] have knowingly peddled a killer product, and their victims come to hospitals just like this to be treated and to die. Now we will take them to a courthouse to seek justice for their deceitful conduct.") ; Kendrick Blackwood, Iowa Sues Over Costs of Smoking; 22 Tobacco Groups Named Defendants, Omaha World Herald, Nov. ”