## Facts

- The Pennsylvania Liquor Control Board (LCB) issued beer-pricing regulations, codified at 40 Pa. Code §§ 11.201 and 11.202, governing how beer manufacturers set and change prices charged to Pennsylvania distributors.
- The regulations restricted a manufacturer’s ability to increase prices for a distributor within 180 days after the manufacturer reduced prices, and also tied the restriction to the introduction of new branding or packaging.
- The regulations required statewide uniformity in price reductions: if a manufacturer reduced its price for one distributor, it had to reduce its price for all distributors in Pennsylvania.
- Anheuser Busch, Inc., a national brewer selling beer into Pennsylvania, alleged the regulations eliminated meaningful price competition among manufacturers and restrained trade in violation of § 1 of the Sherman Act.
- Anheuser Busch sued state officials responsible for administration and enforcement (members of the LCB and the Commissioner of the Pennsylvania State Police), seeking declaratory and prospective injunctive relief to stop enforcement of the regulations.
- The parties filed cross-motions for summary judgment. Defendants argued, among other defenses, Parker/state-action immunity, sovereign immunity, lack of a substantial effect on interstate commerce, and requested Pullman abstention.

## Issues

1. Whether the LCB’s beer-pricing regulations were exempt from Sherman Act scrutiny under the state-action doctrine (Parker immunity) as applied through the Midcal framework.
2. Whether sovereign immunity barred the suit against state officials where the plaintiff sought only prospective declaratory and injunctive relief.
3. Whether the regulations had a sufficient effect on interstate commerce to support federal jurisdiction under the Sherman Act.
4. Whether Pullman abstention was appropriate as a reason for the federal court to refrain from deciding the Sherman Act challenge.
5. Whether the regulations constituted an unlawful restraint of trade under § 1 of the Sherman Act by restricting manufacturer price competition.

## Decision

- The court granted Anheuser Busch’s motion for summary judgment and denied defendants’ cross-motion.
- The court held the challenged pricing rules were not shielded by Parker state-action immunity because the restraints were not shown to be a clearly articulated state policy to displace competition and were not subject to the type of active state supervision required under Midcal and related Supreme Court precedent.
- The court rejected sovereign-immunity arguments to the extent the action sought prospective declaratory and injunctive relief against state officials responsible for enforcement.
- The court found the interstate commerce requirement satisfied because the regulations controlled the pricing terms under which an out-of-state/national manufacturer sold beer into Pennsylvania and affected competitive conditions in that market.
- The court declined to abstain under Pullman and proceeded to decide the federal antitrust claim.
- The court declared the regulations invalid under § 1 of the Sherman Act and enjoined their enforcement.

## Legal Principles

- Parker/state-action immunity does not automatically apply to anticompetitive conduct carried out by a state agency; the restraint must satisfy the Midcal requirements: (1) a clearly articulated and affirmatively expressed state policy to displace competition, and (2) active supervision by the state.
- A general grant of authority to regulate alcoholic beverages does not, by itself, establish a clearly articulated legislative decision to impose specific price restraints that displace competition for antitrust purposes.
- Regulatory schemes that functionally freeze or standardize private pricing can constitute a restraint of trade actionable under Sherman Act § 1, particularly where private actors retain a role in setting prices within a state-imposed framework.
- Sovereign immunity does not bar federal-court suits against state officials for prospective declaratory and injunctive relief to halt ongoing enforcement of an allegedly unlawful regulatory scheme (Ex parte Young-type relief).
- Sherman Act jurisdiction is met when the challenged conduct substantially affects interstate commerce, including regulation of pricing and distribution terms for products moving through interstate channels.
- Pullman abstention is generally aimed at avoiding unnecessary constitutional rulings based on unresolved state-law questions; it is not a general basis to delay decision of a federal statutory antitrust claim where state-law clarification would not remove the need to decide the federal issue.

## Conclusion

In Anheuser Busch, Inc. v. Goodman, the Middle District of Pennsylvania held that LCB regulations restricting beer manufacturers’ pricing changes and requiring uniform statewide price reductions unlawfully restrained trade under Sherman Act § 1. The court ruled the regulations were not protected by Parker/Midcal state-action immunity, allowed the suit for prospective relief against enforcing officials, found a sufficient interstate commerce effect, declined abstention, and entered declaratory and injunctive relief barring enforcement of the rules.


Anheuser Busch, Inc. v. Goodman, 745 F. Supp. 1048 (1990)