Legal Definitions - Parker doctrine

Parker doctrine

The Parker doctrine, also known as state-action immunity, is a legal principle that exempts states and certain state-authorized entities from federal antitrust laws. It recognizes that states, in their role as sovereigns, have the authority to regulate their own economies, even if those regulations might restrict competition. This doctrine ensures that federal antitrust laws do not interfere with a state's legitimate governmental functions and policy choices.

For this immunity to apply, the anticompetitive conduct must be undertaken pursuant to a clearly articulated and affirmatively expressed state policy to displace competition. Furthermore, when the conduct is carried out by non-sovereign actors (like municipalities or private parties acting under state compulsion), the state must also provide active supervision of the anticompetitive conduct.

• Example 1: State Board Regulating Professions

  Imagine a state's Board of Funeral Directors, composed of licensed professionals appointed by the governor, issues regulations that set minimum prices for certain funeral services and restrict the advertising methods funeral homes can use. These regulations, if enacted by private businesses, would likely violate federal antitrust laws by limiting competition.

  How it illustrates the term: The Board, acting as an instrumentality of the state and implementing a clearly articulated state policy to regulate the funeral industry, would likely be immune under the Parker doctrine. The state's sovereign power to regulate a profession is being exercised, even if it has an anticompetitive effect on the market.

• Example 2: Municipal Utility with State Authorization

  A state passes a law authorizing its cities to establish and operate their own public water utilities, granting them exclusive rights to provide water services within their municipal boundaries. A city then creates a municipal water company that becomes the sole provider of water to all residents and businesses within its limits, preventing any private water companies from competing.

  How it illustrates the term: The city, acting under a clear legislative grant of authority from the state, is implementing a state-sanctioned policy to manage public utilities. As long as the state's policy is clearly articulated, the city's exclusive provision of water services would likely be protected by the Parker doctrine from antitrust challenges, as it is a direct exercise of state-delegated authority.

• Example 3: Private Entity Under State Compulsion and Supervision

  A state legislature passes a law requiring all licensed land surveyors to join a specific state-chartered professional organization. This organization, under the direct oversight and approval of a state regulatory commission, then establishes a mandatory fee schedule for various surveying services, which all members must adhere to. This prevents individual surveyors from competing on price.

  How it illustrates the term: While a private professional organization setting prices would typically be an antitrust violation, here it is compelled by state law and actively supervised by a state regulatory body. The state has a clearly articulated policy to regulate the land surveying profession, and its active supervision ensures that the private organization is acting in accordance with state policy, not merely its own private interests. This scenario would likely qualify for Parker doctrine immunity.