What's in it for you? The "State-Action" Exemption to Federal Antitrust Law and The U.S. Supreme Court’s Decision of North Carolina Board of Dental Examiners v. Federal Trade Commission

Alcohol regulations are not as sacrosanct as they used to be.  Shortly after the Twenty-first Amendment was ratified, Supreme Court Justice Louis Brandeis declared, and the rest of America agreed, that state alcohol laws were impervious to legal challenge.  

What a difference 80 years can make!  As demonstrated by the Costco Wholesale  and TFWS  cases, federal antitrust laws under certain circumstances may not only be the basis of a legal challenge against state regulatory requirements, but in the right circumstances may trump state alcohol laws. 

A bulwark against such challenges historically has been the "state-action defense," i.e., the doctrine of jurisprudence providing that a state agency’s conduct -- when expressly authorized by state lawmakers -- is immune from federal antitrust challenge.  However, the U. S. Supreme Court’s decision this year in North Carolina Board of Dental Examiners v. Federal Trade Commission  is the latest in a series of recent cases that appear to be restricting the scope and application of the state-action doctrine.

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This article is published in the May 2015 issue of Fintech Focus. For more information, click here.

Author - Richard M Blau, Chair GrayRobinson’s Alcohol Industry Team