## Facts

- The United States brought a criminal antitrust case against the South-Eastern Underwriters Association (SEUA), an association of nearly 200 stock fire insurance companies, and 27 individuals.
- SEUA members controlled about 90% of the stock fire insurance and related (“allied lines”) sold in Alabama, Florida, Georgia, North Carolina, South Carolina, and Virginia.
- A federal grand jury indicted defendants for (1) conspiring to restrain interstate trade by fixing and maintaining noncompetitive premium rates and related terms and (2) conspiring to monopolize trade in the same insurance lines, in violation of §§ 1 and 2 of the Sherman Act.
- The indictment alleged coordinated practices including fixing premium rates and agents’ commissions; using boycotts and coercion to force nonmembers to comply; restricting access to reinsurance; disparaging nonmembers; and punishing agents and insureds who dealt with non-SEUA companies.
- The alleged conduct involved interstate activity, including insurers incorporated in different states than where policies were sold and the movement of money and documents across state lines.
- The district court sustained a demurrer and dismissed the indictment on the theory that insurance was not “commerce” subject to federal regulation under the Sherman Act, and the United States appealed.

## Issues

1. Whether the business of insurance conducted substantially across state lines is “commerce among the several States” within Congress’s Commerce Clause power.
2. Whether the Sherman Act applies to alleged interstate insurance rate-fixing and monopolization schemes.
3. Whether prior decisions treating insurance contracts as noncommerce foreclosed applying federal antitrust law to interstate insurance.

## Decision

- The Supreme Court reversed the dismissal of the indictment (4–3).
- The Court held that an insurer conducting substantial business transactions across state lines engages in interstate commerce subject to congressional regulation.
- The Court held that the alleged conspiracies to fix noncompetitive insurance rates and to monopolize interstate insurance trade fall within §§ 1 and 2 of the Sherman Act.
- The Court rejected an implied exemption for insurance, concluding Congress did not intend to exclude the business of insurance from the Sherman Act’s coverage.

## Legal Principles

- Insurance transactions that form a substantial, continuous course of business across state lines may be treated as interstate commerce for Commerce Clause purposes.
- Federal antitrust prohibitions on conspiracies in restraint of trade and conspiracies to monopolize apply when the challenged conduct targets interstate insurance markets.
- Prior cases upholding state authority over insurance regulation and taxation do not control the separate question of Congress’s affirmative power to regulate interstate insurance and apply federal statutes to it.

## Conclusion

The Court held that interstate insurance is commerce subject to federal regulation and that the Sherman Act reaches conspiracies by insurers to fix rates and monopolize insurance markets, requiring reinstatement of the federal antitrust indictment.


United States v. S.-E. Underwriters Ass’n, 322 U.S. 533 (1944)