460 U.S. 1001 (1983), 82-952, Maryland v. United States

Docket Nº:No. 82-952
Citation:460 U.S. 1001, 103 S.Ct. 1240, 75 L.Ed.2d 472
Party Name:MARYLAND, et al., Appellants, v. UNITED STATES et al. TANDY CORPORATION, Appellant, v. UNITED STATES et al. NORTH AMERICAN TELEPHONE ASSOCIATION, Appellant, v. UNITED STATES et al. ILLINOIS, Appellant, v. UNITED STATES et al No.82-953 No.82-992 No.82-1001
Case Date:February 28, 1983
Court:United States Supreme Court

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460 U.S. 1001 (1983)

103 S.Ct. 1240, 75 L.Ed.2d 472

MARYLAND, et al., Appellants,









ILLINOIS, Appellant,






No. 82-952

United States Supreme Court.

February 28, 1983

On appeals from the United States District Court for the District of Columbia Circuit.


The judgment is affirmed.

Justice REHNQUIST, with whom THE CHIEF JUSTICE and Justice WHITE join, dissenting from summary affirmance.

These consolidated cases raise questions concerning the settlement of a civil antitrust suit brought by the United States against American Telephone & Telegraph Co. ("AT & T"). In January, 1982, the parties announced a settlement in the form of a consent decree. The proposed settlement was filed in the District Court for the District of Columbia, which ordered the start of procedures provided for in the Antitrust Procedures & Penalties Act, 15 U.S.C. § 16(b) et seq. ("the Act").

The Act provides:

"Before entering any consent judgment proposed by the United States under this Section, the court shall determine that the entry of such judgment is in the public interest." 15 U.S.C. § 16(e).

The District Court issued a lengthy opinion discussing the proposed decree. 552 F.Supp. 131 (D.D.C.1982). It found that most of the decree's provisions were in the public interest, but stated that it would not approve the decree unless the parties agreed to several changes. The parties acquiesced,

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and the District Court then approved and entered the amended decree and a final judgment dismissing the case.

The District Court allowed appellants to intervene for purposes of appealing the final judgment and certified their appeals for immediate consideration by this Court under the Expediting Act, 15 U.S.C. § 29(b).

In Nos. 82-952 and 82-1001, several states contend that the decree improperly preempts state regulation of the telephone industry. They contend their regulation of the industry is "state action" which is exempt from the Sherman Act under Parker v. Brown, 317 U.S. 341, 63 S.Ct. 307, 87 L.Ed. 315 (1943). Thus they do not appear to challenge the conclusion that this consent decree is in the public interest; they claim that the District Court lacked the authority to override state law by entering this consent decree.

The District Court reasoned that "[s]ince the conduct which is the subject of these lawsuits is ... well within the jurisdiction of the federal antitrust laws ... it would make no sense to hold that in providing a remedy for anticompetitive conduct the Court must refrain from interfering with state regulation[, and t]he same rationale applies to ... a consent decree." 552 F.Supp., at 158 and n. 111. I am troubled by the notion that a district court, by entering what is in essence a private agreement between parties to a lawsuit, invoke the Supremacy Clause powers of the Federal Government to preempt state regulatory laws. The District Court may well be correct, but I am not prepared to create a precedent in this Court by summarily affirming its decision. This is particularly true when it is not at all clear whether the summary affirmance disposes of the merits of the States' contentions.

In No. 82-953, a competitor of AT & T argues that the District Court should not have eliminated a requirement that Western Electric license its patents for a reasonable royalty to anyone who applies. It also contends that AT & T should not have been permitted to sell telephones through its Phone

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Center Stores because competitors, especially local telephone companies, will not be able to compete effectively. In No. 82-992, by contrast, an association of telephone manufacturers, does not object to permitting AT & T to sell telephones, but insists that local telephone companies should not be permitted to do so. These [103 S.Ct. 1242] appellants do challenge the District Court's conclusion that this settlement is in the public interest.

In order to review the determination that a settlement is in the public interest, it is first necessary to know what "the public interest" means. The Act itself is not very helpful. It does state that "the court may consider--

(1) the competitive impact of such judgment, including termination of alleged violations, provisions for enforcement and modification, duration or [sic] relief sought, anticipated effects of alternative remedies actually considered, and any other considerations bearing upon the adequacy of such judgment;

(2) the impact of entry of such judgment upon the public generally and individuals alleging specific injury from the violations set forth in the complaint including consideration of the public benefit, if any, to be derived from a determination of the issues at trial." 15 U.S.C. § 16(e) (emphasis supplied).

The legislative history reveals that the sponsors of the Act were concerned that the Department of Justice had settled some...

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