## Facts

- State public service commissions in North Carolina, Georgia, Mississippi, and Tennessee regulated intrastate motor common-carrier rates.
- Carriers had to submit proposed intrastate rates to the commissions; rates could become effective automatically after a set period unless the commission intervened, and in some situations required affirmative approval.
- Each state permitted, but did not require, carriers to engage in collective ratemaking by coordinating rate proposals through private “rate bureaus.”
- Collective submissions were encouraged for administrative efficiency, but individual carriers remained free to file independent rates and were not bound to follow bureau proposals.
- The United States alleged the rate bureaus’ joint rate proposals constituted price-fixing in violation of the Sherman Act.
- The rate bureaus asserted state-action (Parker) immunity because their conduct occurred under state authorization and oversight.

## Issues

1. Whether private rate bureaus’ collective ratemaking, authorized but not compelled by state law, can qualify for Parker state-action immunity from the Sherman Act.
2. Whether the Midcal two-part test applies to private actors seeking Parker immunity.
3. Whether “compulsion” by the state is required to satisfy Midcal’s “clearly articulated and affirmatively expressed” state-policy prong.
4. Whether the state commissions’ regulatory control over intrastate rates constituted “active supervision” under Midcal.

## Decision

- The Supreme Court reversed the court of appeals.
- The Court held that the Midcal two-part test governs Parker immunity for private parties.
- The Court rejected a compulsion requirement for private conduct to receive Parker immunity.
- The Court held that a state policy may be “clearly articulated” even if it permits, rather than compels, the anticompetitive conduct, when anticompetitive effects are a foreseeable result of the policy.
- The Court concluded the commissions actively supervised the challenged conduct because they exercised ultimate authority over rates, including the power to approve, reject, or modify proposed rates and to conduct hearings.

## Legal Principles

- Parker immunity for private parties is assessed under Midcal: (1) a clearly articulated and affirmatively expressed state policy, and (2) active state supervision.
- The “clearly articulated” requirement does not require the state to compel the anticompetitive conduct; authorization is sufficient when anticompetitive effects are a foreseeable consequence of the state’s regulatory scheme.
- Active supervision requires the state to exercise ultimate control and final decision-making authority over the challenged restraint, not merely to permit private coordination.
- Where a state commission can approve, reject, or modify rates and otherwise controls whether rates take effect, collective ratemaking may be treated as implementation of state policy rather than private price-fixing.

## Conclusion

The Court held that state-action immunity can protect private collective ratemaking authorized by state law, even without state compulsion, so long as the state has clearly articulated a policy that foreseeably permits anticompetitive effects and actively supervises the resulting private conduct.


S. Motor Carriers Rate Conference, Inc. v. United States, 471 U.S. 48 (1985)