United States: When Are Universities And Executive Agencies "State Actors" For Antitrust Immunity?

More than fifty years ago, the Supreme Court formalized the "state-action antitrust immunity" doctrine ─ a judge-made rule that certain state governmental conduct is immune from challenge under the federal antitrust laws. Since then, the courts have had a love-hate relationship with "Parker" immunity. The difficulties of that relationship are particularly important to public colleges and universities, which face antitrust claims in a variety of contexts, from trademark licensing to bar exam preparation to "no poaching" arrangements.

A little background illustrates the problem.

On the one hand, "Parker" immunity is grounded in principles of federalism and the recognition that "nothing in the language of the Sherman Act . . . suggests that its purpose was to restrain a state or its officers or agents from activities directed by its legislature."[1] Thus, otherwise anticompetitive actions are deemed "immune" from challenge under the antitrust laws when those actions constitute "an act of government."[2] The enactment of legislation that mandates an anticompetitive restraint, for example, is ipso facto immune from antitrust scrutiny.[3]

On the other hand, the Supreme Court also is driven by the view that the "[a]ntitrust laws in general, and the Sherman Act in particular, are the Magna Carta of free enterprise."[4] As such, "state action immunity is disfavored"[5] and a state cannot confer immunity on non-sovereign actors by "authorizing them to violate it, or by declaring that their action is lawful."[6]

The easiest case for state-action immunity is when a state legislature (or a court acting in a legislative capacity[7]) enacts legislation that, on its face, specifically and directly seeks to restrain competition. Thus, in Parker, the Court granted immunity to a state-mandated "prorate program" that limited the sale of raisins by individual farmers to prop up prices.[8] State legislative schemes are thus ipso facto immune from antitrust challenge.[9]

Where the courts have struggled is how to define when officials, agencies, or entities other than a state legislature (or courts acting in a "legislative" capacity) are "acting as a sovereign" and entitled to state-action immunity. The principal concern is to prevent the "national policy in favor of competition" from being subverted by "private price-fixing arrangement[s]" covered in the "gauzy cloak of state involvement"[10] while still preserving the categorical immunity for true state action.

In a series of cases dealing with private actors or "substate" governments, the Court has held that immunity requires that the challenged restraint be "clearly articulated and affirmatively expressed as state policy" and, in the case of private parties, "'actively supervised' by the State itself."[11] And in 2015, the Supreme Court stepped in once again, holding that a legislatively-created board "controlled by active market participants" should be deemed a "non-sovereign actor" for purposes of Parker immunity.[12] The Court stated that the "governmental character" of such an entity (denominated a "state agency" by the legislature) did not necessarily render the agency a "sovereign" entitled ipso facto to Parker immunity.[13] But that still begs the question of when state executive agencies—such as state universities—are treated as "the State" and entitled to Parker immunity ipso facto. Some lower court decisions held or suggested that state-level executive agencies, including universities, are immune,[14] although at least one argued that the Supreme Court's decisions on local government apply.[15]

Against this background, the District Court for the Middle District of North Carolina recently denied a motion by the University of North Carolina seeking dismissal of antitrust claims on the ground of Parker immunity.[16] In Seaman v. Duke Univ., the plaintiff alleged that officials at UNC and Duke unlawfully agreed not to "poach" each other's faculty. UNC moved to dismiss, arguing that, as a matter of North Carolina law, it is a constitutional, executive-level agency and, therefore, "the State" for purposes of Parker immunity.[17] Plaintiffs countered that ipso facto immunity applies only to legislative action and that all other state actors must satisfy the more factually intensive scrutiny under Cal. Retail Liquor Dealers.

The District Court held, without any detailed explanation, that UNC's status as a "constitutionally-established entity" was not enough to give rise to ipso facto immunity.[18] Confusingly, it went on to hold that "the question of ipso facto immunity" required "development of a factual record" and, therefore, could be renewed on summary judgment.[19]

The Court did not explain what "facts" could be needed for an ipso facto status. And the suggestion may itself reflect the confusion in the case law as to when a state agency is somehow not "sovereign." Indeed, the Court in Seaman acknowledged that "there is a substantial ground for difference of opinion" on the "controlling question" of how UNC's constitutional status affects its potential liability under the Sherman Act and, therefore, it certified the question to the Fourth Circuit.[20] The Circuit, however, declined to take the interlocutory appeal.[21]

As things stand now, UNC may be subject to lengthy, expensive, and potentially unnecessary antitrust litigation. As other courts have noted, the burden of antitrust litigation is enormous and can have its own harmful, chilling effect on lawful conduct.[22] It remains to be seen whether the District Court will ameliorate the potential burden by, for example, limiting initial discovery to whatever "facts" are deemed relevant to a renewed analysis of Parker immunity on summary judgment.


[1] Parker v. Brown, 117 U.S. 341, 351 (1943).

[2] Id. at 350. Although discussed as an "immunity," there is no affirmative carve-out for state action. Rather, the "immunity" arises from the statutory language, which the Court construed not to reach state governmental action.

[3] Id.

[4] U.S. v. Topco Assocs., Inc., 405 U.S. 596, 610 (1972).

[5] FTC v. Phoebe Putney Health Sys., Inc., 133 S.Ct. 1003, 1010 (2013).

[6] Parker, 117 U.S. at 351.

[7] Bates v. State Bar of Arizona, 433 U.S. 350 (1977).

[8] Id. at 350.

[9] Hoover v. Ronwin, 466 U.S. 558, 567-68 (1984).

[10] Cal. Retail Liquor Dealers Ass'n v. Midcal Aluminum, Inc., 445 U.S. 97, 106 (1980).

[11] Id. at 105; FTC v. Phoebe Putney Health Sys., Inc., 133 S.Ct. 1003, 1011 (2013).

[12] N. Carolina State Bd. of Dental Examiners v. F.T.C., 135 S.Ct. 1101, 1110 (2015).

[13] Id. at 1111.

[14] E.g., Saenz v. Univ. Interscholastic League, 487 F.2d 1026, 1027 (5th Cir. 1973); Neo Gen Screening, Inc. v. New England Newborn Screening Program, 187 F.3d 24, 29 (1st Cir.1999); Charley's Taxi Radio Dispatch Corp. v. SIDA of Hawaii, Inc., 810 F.2d 869, 876 (9th Cir.1987); Deak–Perera Hawaii, Inc. v. Dep't of Transp., 745 F.2d 1281, 1283 (9th Cir.1984); S. Carolina State Bd. of Dentistry v. F.T.C., 455 F.3d 436, 442 n. 6 (4th Cir.2006); Pharm. & Diagnostic Servs., Inc. v. Univ. of Utah, 801 F.Supp. 508, 513 (D .Utah 1990); Bd. of Governors of Univ. of N. Carolina v. Helpingstine, 714 F.Supp. 167, 176 (M.D.N.C.1989).

[15] Builders Flooring Connection, LLC v. Brown Chambless Architects, Inc. 2014 WL 197679, at *4 (M.D. Ala. 2014).

[16] Seaman v. Duke Univ., 2016 WL 1043473 (2016).

[17] It also argued, under Columbia v. Omni Outdoor Advertising, Inc., 499 U.S. 365 (1991) that it did not lose that immunity by allegedly conspiring with Duke, a non-state actor. That case holds that there is no "conspiracy" exception to Parker immunity. Id. at 382-84.

[18] Id. at *1.

[19] Id.

[20] Id.

[21] Roper v. Seaman, 16-182 (4th Cir.), Dkt. No. 14 (June 3, 2016).

[22] Race Tires of Am., Inc. v. Hoosier Racing Tires Corp., 614 F.3d 57, 73 (3d Cir. 2010).

When Are Universities And Executive Agencies "State Actors" For Antitrust Immunity?

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions