SUPREME COURT OF THE UNITED STATES

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No. 91-72

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FEDERAL TRADE COMMISSION, PETITIONER v. TICOR TITLE INSURANCE COMPANY et al.

on writ of certiorari to the united states court of appeals for the third circuit

[June 12, 1992]

Justice O'Connor , with whom Justice Thomas joins, The Court does not dispute that each of the States at issue in this case could have supervised respondents' joint ratemaking; rather, it argues that "the potential for state supervision was not realized in fact." Ante, at 14. Such anafter the fact evaluation of a State's exercise of its supervisory powers is extremely unfair to regulated parties. Liability under the antitrust laws should not turn on how enthusiastically a state official carried out his or her statutory duties. The regulated entity has no control over the regulator, and very likely will have no idea as to the degree of scrutiny that its filings may receive. Thus, a party could engage in exactly the same conduct in two States, each of which had exactly the same policy of allowing anticompetitive behavior and exactly the same regulatory structure, and discover afterward that its actions in one State were immune from antitrust prosecution, but that its actions in the other resulted in treble damage liability.

Moreover, even if a regulated entity could assure itself that the State will undertake to actively supervise its rate filings, the majority does not offer any guidance as to what level of supervision will suffice. It declares only that the State must "pla[y] a substantial role in determining the specifics of the economic policy." Ante, at 11. That standard is not only ambiguous, but it also runs the risk of being counterproductive. The more reasonable a filed rate, the less likely that a State will have to play any role other than simply reviewing the rate for compliance with statutory criteria. Such a vague and retrospective standard, combined with the threat of treble damages if that standard is not satisfied, makes "negative option" regulation an unattractive option for both States and the parties they regulate.

Finally, it is important to remember that antitrust actions can be brought by private parties as well as by government prosecutors. The resources of state regulators are strained enough without adding the extra burden of asking them to serve as witnesses in civil litigation and respond to allegations that they did not do their job.

For these reasons, as well as those given by The Chief Justice, I dissent.