J. F. Crawford v. American Title Insurance Company

AINSWORTH, Before GODBOLD SIMPSON, Judges. Circuit PER CURIAM: deciding closely Faced how federal courts should scrutinize state regulating prac schemes for determining that tices before McCarrofb-Férguson exemption, Title 15, U.S.C., 1012(b), anti from federal applies, the court trust district adopted approach of the road a middle scheme, statutory and held that the em- Here, practices monopolistic by McCarron-Ferguson the asserted business as defined agreements private purposes price-fixing litigation. Act and for were those of par- companies. between title insurance ties reproduced 2. The district court’s stipulated writing that the business of title Appendix hereto. scope of insurance insurance was within the 218 Alabama, 28A, separately of the defendants has Each Title of Code bodied fail- complaint to dismiss for moved spe- of the seq., 227 et for § relief upon a claim bring ure to state industry, was sufficient cific jurisdic- and lack of granted can be the ex- industry insurance within title matter, subject grounded argument over of tion rejected He emption. McCarron-Ferguson 15 upon the a class representing plaintiffs-appellants, 1011 purchasers, U.S.C. § insurance Alabama title et^seq. Statute, Code companion Alabama The McCarráíi-Ferguson provides 253, Alabama, 28A, Title —claimed part in relevant that “the Sherman Act control, specific appеllants to as applicable . to the busi- precedence general oper- over the takes — ness of insurance to the extent such prevent Insurance Alabama ates is regulated business law.” State any re- taking action Commissioner a, 15 U.S.C. To the extent fixing within rates or rate specting regulates by state business industry. insurance title law, the Sherman Act and other federal' precisely court The district antitrust laws are not applicable. This them in the issues, analyzed stated Court concludes that Ala- reached existing precedent,

light regulated bama has of title business decision. the correct we think was what insurance within the meaning of the district reason stated For McCarron Act so as to render the Sher- dismissing the action court, judgment its inapplicable and, man Act therefore, affirmed.3 motions the defendants should be granted. Affirmed. The McCarron renders the federal

APPENDIX antitrust laws inapplicable when state legislation generally proscribes, permits MEMORANDUM OPINION regulates or otherwise the conduct in Apr 1974) (Filed Omitted) 17, (Number and Title question and authorizes enforcement plaintiffs behalf themselves through a scheme of administrative su- others, bring this action under Sec- pervision. FTC v. National Casualty Co., 1 and 2 tions 15 560, 357 78 1260, U.S. S.Ct. 2 L.Ed.2d 2, against 1 and nine U.S.C. title in- §§ (1958); 1540 California League of Ind. companies agents. It is al- surance Ins. Pro. v. Aetna Co., Cas. and S. 175 leged engaged defendants in an F.Supp. 857 (N.D.Cal.1959); Commander conspiracy “unlawful combination and Leasing Co. v. Transamerica Title Ins. unreasonable restraint of trade and com- Co., (10th 477 F.2d 77 1973). Cir. raise, ... fix and main- merce Without prices gener- premiums Alabama tain has fees ally regulated title charged for the throughout issuance title insur- insurance period. relevant policies in Birmingham ance ‘Greater Insurance ” (Code Code of Alabama Alabama, It is Area.’ also alleged that Re- defend- compiled, 1971 have conspired Cumulative monopolize, Supplement) ants at- contains provisions numerous tempted to monopolize, applicable monop- have generally to all insurance companies such trade and commerce under olized provisions as other well same ap- law. 16, 1974). (N.D.Cal. See also adopting 75,322 basic the same October ¶ recent cases For Surety Casualty et analogous v. Aetna approach situations Meicler Equi 732; v. Addrisi 1975, al., see the court 506 F.2d adopted district the Alabama 5 Cir. Society United Chicago Title and Trust Assurance table Life following: Harrison 75,321 725, Cases, 1974, denied States, cert. 503 F.2d Company, ¶ Cir. Trade 1974-2 1590, 31, 1974); Mitgang v. Western L.Ed.2d July 95 S.Ct. (D.Kans. U.S. Cases, Company, Trade Insurance 1974-2 Title v. Brown charges. F.T.C. of rates companies.1 title plicable to Shoe, 384 U.S. 86 S.Ct. plaintiffs concede that Alabama Indeed 587; Institute, F.T.C. v. Cement L.Ed.2d regulated generally title insurance 68 S.Ct. 92 L.Ed. U.S. must, conceding, as they that title (also reh. den. is “insurance” within the here, importantly L.Ed. 1764. More Act). They the McCarron meaning of uniformly has been held that “a violation the contention that the' their case on rest Act is an ‘unfair method in alleged conduct this case has specific competition’ under the Federal Trade regulated by Alabama. This is not been Commission Act.” Federal Trade Com- question. the crucial Packing mission v. Beech-Nut 1957, Alabama enacted the Insur- 441, 150, 307; 66 L.Ed. Un- Law, ance Trade Practices now Title 28A ion Circulation Co. v. Federal Trade seq. 227 et That statute was enacted Commission, (CA 1957). 241 F.2d 652 expressly response to the McCarron necessary It is to conclude that the same (as stated in preamble. Act its Title 28A subject conduct would be 227). It specifically prohibits “all un- by the Alabama Insurance Commissioner of competition” fair methods (emphasis under the Alabama Trade Practices Law in the supplied) insurance, business of Supreme since the Court of Alabama has grants specific administrative and interpretation held that federal court powers supervisory to the Insurance terms used in similar federal statutes is pursuant Commissioner prohibi- to be followed. Jackson Securities & In- tion. State, Co. v. vestment 241 Ala. hardly It can argued (1941)(“Our using statute So.2d phrase “all competi unfair methods of defined by the a term federal courts may tion” not encоmpass unauthorized ordinarily having should be considered as agreements premium to fix rates or mo given courts, meaning thus those nopolistic practices charged in this with our conception if consistent of its case. It must be remembered that the meaning”); Avery Freight Lines, true draftmen of the model Insurance Trade Inc. v. Alabama Public Service Commis- Act, upon Practices which the Alabama sion, 267 Ala. 104 So.2d patterned, Act is specifically intended to (“In construing the terms and respond to the invitation of the McCar provisions of Alabama statutes derived ron Act to withdraw from federal con statutes, from federal such terms and (and concomitantly place trol control) under state usually provisions will be considered as very kind of conduct which having meaning given by the charged here.2 courts”). concludes, therefore, This Court (“un- terminology Moreover the same the Alabama Insurance Trade Practice competition”) had been fair methods Act, reaching itas does all unfair meth- of the Federal Trade used Section competition, places very ods con- (of which the Alabama Commission charged complaint in the duct within the Trade Practices Law is a Insurance of activities over which ambit the Insur- counterpart) interpreted been and has regulatory Commissioner has broad ance spectrum a broad of unauthorizеd cover powers. practices, including trade establishment Title 28A January became effective 2. The McCarron Act itself prompted However, prior predecessor, to that date its Court’s decision in United States Title as well as Article 10 of Article 7 South-Eastern Assn., Underwriters 322 U.S. Code, Title 10 of the Alabama contained simi- 64 S.Ct. 88 L.Ed. which itself provisions pertaining lar general- to insurance charges involved of violations of Sections 1 ly specifically and to title insurance which are and 2 of the Sherman Act. Regulation prior now codified Title 28A. materially 1972 was not different from that provided in the current Insurance Code. federal, whether joint Notwithstanding foregoing, plain- activity. That rate no rate pro- bureau specifi- tiff that Alabama has contends have visions been made for title insur- excepted (as cally title insurance well as (or ance insurance) for life or health and accident and health and accident life insurance not, does insurance) of this general from all insurance Court, provisions mean that regulations, including the Trade Prac- Trade applicable Practices are not argument upon Their is based tices Act. the Commissioner cannot enforce (provisions of Title 28A relat- Section provisions against those companies. particular ing kind Indeed, necessary conclusion is to the provisions relating over prevail insurance, contrary. title Since as well generally) and Section 253 as life insurance, and health and accident (charging Title 28A the Alabama Com- are not treated with respect duty of Insurance with the missioner administering to the establishment premium of rating provisions rates bureau general provisions fully apply. to other insurance applicable companies life, excepting but accident and health Accordingly, the Court concludes that insurance). and title Since Commis- the Alabama Insurance Trade Practices (so plaintiffs reason) Insurance sioner of 28A, (Title Law seq.) Section 227 et is charged duty is not with the of adminis- fully applicable and the McCarron Act tering pertaining rating laws to systems exemption from the federal antitrust (or title insurance life for for or health is therefore activated. Defendants’ insurance) he and accident has no au- motions granted are therefore and this thority enforce to the unfair methods of action dismissed. this view. Section 250 et competition provisions of Practices Law This rating organizations finds it impossible for certain such seq., the Trade companies. providing to accept types Done s/Seybourn Senior 17th ^[*] day ^[*] Judge of April, 1974. H. ^[*] Lynne insurance, of must be pari construed in ORDER DISMISSING THIS ACTION with seq., materia Section 227 et Practices Trade Law. When the rate (Number Omitted) (Filed 1974) and Title Apr 17, system was bureau first established predecessor to seq., Section 250 et of conformity In with the memorandum (Title 28, Title 28A seq.) Section 355 et contemporaneously of the Court the administration of “all laws now re- herewith, filed lating, relating, hereafter to insurance ordered, adjudged It is decreed rating systems” rates was a respon- be and this action the Court that sibility of Bureau of Rates and not hereby same is dismissed. Superintendent of Insurance. day April, 17th Done this nothing suggest There is that when s/Seybourn the Trade Practices Lynne Law was H. enacted in Judge Senior 1957 it was intended that Superin- charged tendent of Insurance was not GODBOLD, (dissenting): Judge Circuit enforcing provisions against with its all McCarron-Ferguson Act1 divided subject insurance companies to his con- up the field antitrust regard trol without super- whether regula permitted the states to take over making procedures rate vised had been enact tion of the ing business particular for the established kind of in- regulatory system. own Exist their Rating represent surance. bureaus ing repealed statutes2 were not were, exception, prohibition, as it 79-15, July March Act 1. Act of c. P.L. Sherman c. 2. The amended, amended, U.S.C. 1-7 §§ §§ 15 U.S.C. 1011-1015 Stat. 26 Stat. (1970); Act October Leasing mander Co. v. Ti Transamerica con- To the insurance. respect to (CA10, 477 F.2d 77 1973), tle Ins. all appli- made specifically they were trary, discussed, infra, that the Act regulation. of state absence considered cable federal antitrust inapplica renders law exemption is conditional This legislation when “generally pro ble the Act: 2(b) of in § contained scribes, permits or regulates otherwise be con Congress shall Act of No the conduct and authorizes super invalidate, impair, or strued through enforcement a scheme of admin any law enacted sede supervision.” hypothe On that istrative the business regulating purpose generalized reached the sis conclusion unless . . . regulated that Alabama “has the busi business relates of title ness insurance within the mean That Provided: [the insurance: ing of the McCarron Act so as to render Trade Sherman, Federal Clayton, and inapplicable.” applicable Acts] Commission Act came The McCarron hot on the the ex of insurance business heels of U. S. v. South-Eastern Under regulat such business tent Assn., writers 322 U.S. 64 S.Ct. law.3 by State ed (1944), 88 L.Ed. 1440 which held view, my a court faced with the for the first time that insurance was issue of whether a claim of a § subject ‍​‌​​‌‌​​​​‌​‌‌‌​​‌​‌​‌​​‌‌‌‌​​‌​​​​‌​‌‌‌‌​​‌‌‌‌‌‍under commerce the Com exemption is well founded must consider regulation, to federal par merce Clause merely whether the state regulat- ticularly the Sherman Act. present The ing insurance but whether it is doing so originally 2(b) was submitted to each adequately. The language of provi- proviso.4 House without the so, as illuminated legislative his- thought the might The Senate section tory, requires such inquiry. The pro- any that taken to mean state could nulli embodies the compromise viso which the (for fy example, the antitrust laws accepted Senate after rejecting this sec- simply a law passing permitting agree proviso. without tion accepted The Senate . generally ments between insurance com proviso only being after panies), and so amended the bill to ex it that carried told into the Act a re- clude Clayton Acts that quirement legislation state be ade- operation altogether.5 of § This quate. concept of adequacy is con- That left in three-year effect a moratori in the tained “to the extent” language in during um which time the antitrust laws closing phrase proviso. The suspended but after were required inquiry simply has not been apply to all would insurance activities no made in this case. The Court, District provided.6 matter what state laws The relying upon FTC v. National Casualty passed the bill House without 560, 357 78 S.Ct. 2 changes significance purposes.7 for our (1958); L.Ed.2d 1540 California League Independent Insurance compromise The Producers v. conference committee . Casualty Surety Co., Aetna & proviso 2(b). 175 contained the now in § (N.D.Cal., F.Supp. 1959); 857 time that Com- This was first lan- debate, amended, Cong.Rec. (1945). The 478 38 Stat. Senate c. Cong.Rec. appears at 91 12-27 and 44 and 29 version §§ §§ U.S.C. U.S.C. House (1945). (1970); Trade Federal Commis- Act, Septеmber 26, 1914, sion c. Senators Murdock and See the statements of amended, §§ U.S.C. 41-58 Stat. 479-480, Cong.Rec. Senator Ferguson, at (1970). Taft, Fergu- O’Mahoney and Senators (1945). Murdock at 485 son and 3. 15 U.S.C. passed appears the Senate 6. The version as (1945). Cong.Rec. 488 at 91 S.Rept. Cong., No. 79th 1st Sess. 4. See (1945). Cong.Rec. 1093 The House de- 7. 91 H.Rept. Cong., (1945); No. 79th 1st Sess. 978-979, Cong.Rec. appear 1027- at 91 bates (1945). printed The Senate version 1028, 1084-1094 day Congressional on the first Record industry from exempt the insurance in the bill. The appeared House guage finally The laws.10 Senate antitrust the amended bill without discuss passed only but McCarron proposal, ion,8 long it passed the Senate debated but that, ensure after amending it to day’s large The first debate was after hard.9 antitrust period, moratorium what kind law the with of state ly concerned the time. all of to insurance applied ousting jurisdic in federal succeed would emerged from day the second centered That tion. On debate res compromise that with the authority given permit committee states to the states exemption where in con urrected activities that would otherwise be regulating insurance. laws, rating themselves flict with federal only after receiv accepted it The Senate particular. in The debate the bureaus any just here, ing clarification day, pertinent established first jurisdiction. oust federal adequate state laws would oust fed law only in effect to remain jurisdiction. laws were federal debate concluded eral “ade state enacted unless the McCarron a state confirmed that when Senator regulation. put law could easily quate” not be aside States: by the view President This is also the Barkley: I should like D. took of the Act. Roosevelt Franklin Senator whether, connection, where signed law ask, he the bill into he stat- When occupy the field— attempt apply the antitrust laws would ed that States going inadequately by “except to the extent that the do but — legislation so as responsibility, through the form have assumed Act, the Sher- deprive effectively performing that re- and are their and the other acts of sponsibility, for the of” insur- man inter- Donovan, it is the Senator’s Regulation ance. of Insurance jurisdiction, report the conference 15 L. & Con- pretation the McCarron Under kind, legis- where the and note 25. temp.Prob. in a case deal adequately even to fails lature “adequacy” test of This is carried cover, attempts field it phrase act “to the extent” apply? still would acts these proviso. requires inquire It courts to my law, That is in- impact McCarron: of the state Senator strength terpretation. provisions of its substantive and efficacy procedures by of the which complete (1945). The Cong.Rec. 1444 91 effected, merely are and not to as- aрpendix to printed is day’s debate that some state certain law on the sub- opinion. this ject has been enacted. by the of the approval Senate This The twice on Court has ruled compromise culmi- committee meaning phrase of the “to the extent sharp difference with years two nated regulated that such business is not de- The earlier had House. Senate 11 case, law.” National One FTC v. proposals that would to act on clined (1945). of committee in the Cong.Rec. Senate but died on the 1395-1396 91 8. Cong.Rec. (1944). calendar. 90 8054 Cong.Rec. 1442-1444 and 1477-1489 9. 91 independent 11. An line of cases deals with (1945). power regulate whether state to tax insur inconclusive, companies impeded by The debates in 1943 were al- is ance Commerce then, later, leading though seemed the House more The cases are Prudential In Clause. 408, Benjamin, grant proposed exemp- Co. v. 328 U.S. 66 inclined to surance Cong.Rec. 1142, (1946) 89 10144-10152 90 L.Ed. 1342 and Robertson insurance. tion for S.Ct. (1943); California, and see also exten- 90 and 10659-10664 328 U.S. S.Ct. Appendix (1946). language sions of remarks of the Con- L.Ed. 1366 opinions There is these Record, A5272, beginning Congress gressional at A5377 the intent of in enact that passed give ing The House a bill with an McCarron was to the states and A5683. Cong. power exemption for insurance in the insurance field in 1944. 90 use of their full 6524-6557, 6417-6419, 6449-6456, legislatively up unavoidable limits of Rec. to course, Congress reported The bill was out Clаuse. Of Commerce 6559-6566 Casualty always 357 U.S. S.Ct. federal antitrust tended pertinent our (1958), apply is the “channels interstate 2 L.Ed.2d 1540 to commerce;” Casualty is a convincing a terse This is not National ar inquiry.12 it, rejected gument, in which the Court the Court not curiam per the activities ing contentions FTC which the two ruled problem proceeding before us. in that case not rule FTC was could did phrased question subjected regulation brief FTC its to state without be Whether the very broadly: the Commerce Clause. McCarron offense 560, 563-64, jurisdiction “upon the ousts FTC 78 S.Ct. L.Ed.2d U.S. laws prohibit- enactment of state 1542-43.14 mere ing practices such within boundaries theory FTC’s ran way. second 13 The did involved.” states case, like the statute in that one in The respond to that broad statement but present case, was an enactment of its determination considera restricted the National Association of Insurance more rejection of two narrow tion Commissioners’ “Model Unfair Trade presented by specific theories FTC. only It Practices Act for Insurance.” caveat, “Petitioner Court’s does not practices” prohibited “unfair trade gen- statutory provisions that the here argue indeed, erally, in words almost identical pretense,” were mere review under the FTC 5 of U.S.C. at at L.Ed.2d specific practices acts or fell Whether strongly suggests in some only rubric could within deter- appropriate. is adеquacy quiry into hearings. after Until a hearing mined inquiry how much there is must specific was no there wrong held was below, it does As discussed not seem be. argued The FTC defined. until the “pre the use word me that agencies administrative states’ had explaining aside a one-sentence tense” general “crystallized prohibition] [the arguing the FTC was not is to be what into ‘administrative elaboration of these judicial ruling as a enshrined applications in standards and individual argued identified as not proposition ” cases,’ there nowas at all. governing legal to be the adjudicated rejected ground The Court this on the measuring the sufficiency standard legislative history sup- did not legislation. state port “regula- distinction between that because theory was first FTC’s legislation.” tion” interstate some there What not decided Court is not be reached could practices two clear statements —that made bar the Com- law because argue that does not “[petitioner in- Clause, must have merce Co., 202, 1557, permit of insur- full state Ins. efit Life 387 U.S. 87 S.Ct. meant ance, provided (1967). that in the absence but it also 18 L.Ed.2d 673 legislation appropriate the state federal anti- case, 12. In the other FTC v. Travelers Health apply without ac- would additional trust 293, 717, Assn., 4 362 U.S. 80 S.Ct. L.Ed.2d by Congress. we What must the decide is tion (1960), by regula- 724 the Court held that state regulating statutes insur- state standard regulation by the tion meant state in 2(b) and whether the in statute § ance under disputed place. the acts took which Thus Ne- standard. that case meets braska could not render federal laws ineffec- cases considers Another line of what activi respect tive in other with states to the activi- business of insurance under the constitute ties domiciliary corporations by of Nebraska ties application 2(b) determine of other § declaring regulating it was the out-of- notably statutes, the federal secu most domiciliary corporations. activities of its state Securities, Inc., laws, v. National SEC rities Brief of Petitioner at 3. 13. 564, 453, 21 L.Ed.2d 668 89 S.Ct. 393 whether the federal (1969), determine and to grounds holding on similar our It affirmed 14. annuity contracts certain laws cover securities FTC, 243 Hosp. Ins. Co. Life. & in American companies, SEC v. Varia issued (CA5, 1957) companion Na- 719 F.2d Co., Annuity 359 U.S. 79 S.Ct. Ins. Life ble Casualty. tional (1959); SEC v. United Ben 640 3 L.Ed.2d 224 provisions conduct.” 175

statutory F.Supp. . . . were at 860. No au thority was pretense,” and cited for concluding mere this proposition, legislative and the paragraph: history substantive “So far as we replete statements that can determine from ar records and states could not enacting cases, guments in these statutes proviso permitting certain acts 2(b) or conduct been render section satisfied.” The those acts or conduct indicates immune argument former that no Sherman going Clayton prohibit quality or ions.16 character of regula made. The latter was tions indicates in other circuits the In four cases going beyond the Court was its addressed the have courts rejection of the precise narrow two argu trigger statutes must be to effective how put light ments forward In FTC. 2(b) two of exemption. In these § statements, of these the Court could heavily appellants relied on what cases hardly have pre intended that the “mere urged had not in National FTC Cas- tense” characterization of what FTC had that the statutes “mere ualty, were argued was intended to be a defini argument rejected, pretense.” adjudication of interplay tive be relying large part courts on the the McCarron Act and tween statute a model League opin- in the California analysis utilized in 44 states.15 ion, reading was erroneous in its which district court convert- year a aWithin Casualty legis- National of both rejection of terse Casualty’s ed National history. lative legislation-regulation distinction FTC’s v. The In AFL-CIO Insurance Ohio any prohibition holding that a broad Board, (CA6 1971), Rating 451 F.2d 1178 purposes adequate for state was by the 93 34 409 U.S. S.Ct. Indepen- cert. ‍​‌​​‌‌​​​​‌​‌‌‌​​‌​‌​‌​​‌‌‌‌​​‌​​​​‌​‌‌‌‌​​‌‌‌‌‌‍denied League of 2(b). California of § (1972), an attack was 180 Casualty & L.Ed.2d v. Aetna Producers dent Surety Ohio’s, rate-setting system, brought on (N.D.Cal., F.Supp. 857 175 companies permitted National Casu- 1959). opinion cited rating to file rates boards which- and that “when proposition alty for unless go challenged into еffect would proscribes generally statute commission, and for which by the there part of the insur- on the conduct certain they restitution even if were sub regulation was no is state there companies” ance determined to be excessive.17 sequently It also said purposes § noted, F.2d at The court 451 where the state 2(b) is satisfied a “comprehensive state had scheme authorizes certain “permits or statute Clayton be Sherman or violations if footnote otherwise U.S. at 15. something public like ICC or state used L.Ed.2d mechanisms, rate-setting utility Cong.Rec. again (1945), permit it did not above, the Senate footnote As noted only “public regulations private regulation but thought original bill because amended by public authority,” Cong.Rec. written sanction states authorize agree- (1945). Private combinations amended Its violations. Sherman acceptable “provided were those combi- ments Clayton acts excluded open agreements nations 2(b) altogether. operation §of supervision agree- approved law. Public report Senators debate essential,” Cong.Rec. ments is O’Mahoney emphasized McCarron precise phrasing put content into the He thus insurance, not regulating legislation only state only part 2(b) that state stat- of the main satisfy § legislation, would just state “regulating the business of insurance” utes (print- (1945) 1444 Cong.Rec. 1443 91 See (emphasis added). by-the section were covered opinion). Senator appendix to this ed compromise, made attacking the Pepper, 17. Plaintiffs raised other contentions as to the concerning what strongest statements of the statute. weaknesses See 451 F.2d at Cong.Rec. permit. See 91 provision would 1180, Douglas of Justice dis- response 1481, 1480, 1478, 1485 senting certiorari, from the denial of 409 U.S. only O’Mahoney was that of Senator 917-918, 215, at 93 S.Ct. 34 L.Ed.2d at ISO- permit what states authorized 181.

225 regulation Thus the major first two automobile cases to deal insurance,” although adequacy with tests of the it was not state insur- “as ex regulation stringent tensive ance under the pre- as some of “mere rejected phrase states.” It other tense” argument National Casualty de- the court quali that should consider the clared that the courts were not to make ty regulatory id., inquiry of the system, at an into the statutes’ effective- or whether its standards ness but requirements nevertheless made such an in- effectively had been quiry. They rejected enforced any qualita- id. at 1184. also In point this last it tive test of the analysis relied for its statutes in on legislative history grounds of the of the that the possible McCar best stat- ron upon AFL-CIO, an ute is not unreported required. Ohio 451 case from 1181, 1183; the Middle at District of F.2d Tennessee and a Commander Leasing, report 1960 F.2d at agree Senate ATI Judiciary Com mittee’s Antitrust Subcommitteе which McCarron Act does not require the best Casualty, discussed National possible id.18 statute. But it require does one is efficacious. Leasing Co. v. Trans- Commander The next circuit case to address ade Title Ins. 477 F.2d 77 america quacy actually centered on a different 1973), brought price- (CA10, plaintiffs attack, whether regulated acts were against title insurance com- fixing action part of the business of insurance.19 ease, here, the panies. In that unlike Travelers Ins. Co. v. Blue Cross of West subject insurers were to the state title Pennsylvania, ern 481 F.2d 80 (CA3, rate-setting regulatory system and the 1973). Blue Cross charged with mo restraint of trade act contained nopolizing the hospital insurance market injunction private public dam- both executing contracts with local hospi remedies, action id. 83. The court age tals. The required contracts were by the “The ‘State Colorado has concluded: state insurance commissioner and were only regulated the title insurance not business, approved by prior his office to their tak great has done so in but ing Although effect. the court notes Id. As Ohio AFL-CIO detail.’” Ohio AFL-CIO says dictum by relying tried to save his suit plaintiff even ineffective and regula unenforced pretense” phrase “mere Na- on jurisdiction, tion ousts goes that, rejected Casualty. court tional that Pennsylvania to hold insurance com citing Ohio and Prudential AFL-CIO subject panies to “aggressive state Co., supra, holding footnote Ins. regulation.” F.2d at 83. “pretense” allegation “does not Equitable up In Addrisi v. Life Assurance when aforementioned Colo- stand S., (CA9, 1974), U. F.2d regulatory statutes are examined.” rado Soc. said, present denied 420 “Our task is cert. U.S. S.Ct. It later (1975), L.Ed.2d 400 reh. only whether the denied determine State of Col- regulated business of title L.Ed.2d orado insurance, alleged plaintiff that defendant used and not to determine whether illegal financing tie-in between home could be an better and more done,” id., poli and cash effectively value life at 84. The court loans The court’s willing it was not cies. consideration go stated brief, relying argument regu- about whether state issue McCarron better, wholly League on California and Ohio could be done but it con- lation It great had done a observes California cluded that Colorado AFL-CIO. code, particularly a sec- adequate. and that that was has an deal quasi-legislative pronouncement, Such a Weinberger, cal Center Greater Miami v. that, given inaccurate one at is to be (CA5 and an 1975). 517 F.2d legislative weight little as a barometer of in- 11, supra. 19. See footnote See the discussion Mount Sinai Medi- tent. 226 Assn., “Unfair Practices.” It then Health supra, entitled

tion footnote permit- held the conduct is court says state’s inability .whether to ef- irrelevant, fectively prohibited is reach ted оr out-of-state mail order event, citing in either satisfied business with no 2(b) is assets or employees § AFL-CIO, 451 F.2d at 1178. There the state rendered regulation Ohio not legislative new consideration of the sufficient to jurisdiction is no history oust FTC under 2(b). and no adequacy discussion of or § or of whether the court effectiveness Turning to circuit, American them 2(b) pro- under the consider need Hosp. & Life FTC, Ins. Co. v. 243 F.2d viso. (CA5, 1957), 719 was affirmed First, circuits, Supreme remaining theOf Court with National Casualty. appear This and D.C. Circuits not to court only Seventh was presented with and only ruled on exemp- have ruled on McCarron Act interstate commerce The argument. Second and Tenth Circuits tion. We have gone off on various procedural or have ruled on the effect of McCarron on collateral issues in other of the Federal Arbitration application McCarron cases.20 applies. insurance contracts. It toAct The most recent case is Life Ins. Meicler v. Aet Republican Co. v. Hamilton Casualty Co., Co., Surety na 506 (CA2, Life Ins. 408 F.2d 732 Nat’l. F.2d 606 1975). (CA5, put Plaintiffs had 1969), Co., v. been and Hart Orion Ins. 453 higher into a risk (CA10, category by 1971). their The Fourth auto F.2d Cir- cuit, company. Every when faced with a challenge company in to a put state refused to approving them system of rate sched- state’s classification, pursuant low risk ules, that the all held rates were in fact set plan state insurance required officials and that by state the antitrust high risk only classification because pri- reached activities of driving bad their records. wrong The persons so that no brunt of vate had been attack attempt their was an slip It thus did not reach done. the McCar- through 3(b), McCarron’s the exception we ron have. Allstate Ins. Lainer, (CA4, 1966). 361 F.2d 870 boycott, Co. for coercion and intimidation.21 Eighth Circuit’s decision in North 15 They U.S.C. § asserted that Transpo. Rock Casualty they being boycotted Little Co. v. Re- the state Exchange, (CA8, ciprocal companies. 181 F.2d 174 We held that the 1950), best, appellant boycott provision obscure was aimed at such acts challenging apparently validity against competitors, used agents, of when business, Act itself. The court also and others McCarron ultimate the held the rate-setting board became consumers. also considered instrumentality state, question! at least somewhat more purposes generally. Noting constitution’s complaint monpolies. prohibition Travelers unclear on whether it meant FTC, Assn. v. (CA8, Health F.2d 820 companies’ state’s insurance acts were 1962), on remand from pursuant to or in violation of the statu in FTC v. decision tory rating system, Travelers (1) it said if Liberty Family Battle v. Nat. Life. American Life Ins. Assur. Co. F.2d v. Blue (CA5, 1974), Fla., Inc., (CA5, 1973) cert. denied F.2d Cross charge (1975), (trial (monopolization L.Ed.2d 807 based on Blue Cross’ court granted 12(b)(6) motion; Rule provision “coordination benefits” remand failed be findings; adequate more record restraint of cause the able, trade was not unreason deter mine whether all); no defendants were so there was violation at the business insurance). FTC, American Gen. Ins. Co. v. 496 F.2d 197 (CA5, 1974) (FTC sought injunction against provides 21. This section that the Sherman Act merger companies; of insurance denial af apply any agreements to or acts of because ‍​‌​​‌‌​​​​‌​‌‌‌​​‌​‌​‌​​‌‌‌‌​​‌​​​​‌​‌‌‌‌​​‌‌‌‌‌‍firmed of Commission’s failure to ex boycott, intimidation, coercion or the moratori- remedies); haust its own administrative provisions um and other notwithstanding. rating to authorize state statute, then this was pursuant price of by which systems heart of activity was at concerted (2) supervision under of if in be set regulation; could exemption for officials, avoiding rigors thus it, were in of then the acts avoidance laws, marketplace. argument The of of the state antitrust violation accepted by Congress opin The to and regulated such conduct. made which the character of insurance was is not an adequacy not hold that ion does prices produce Id., competitive fi Presumably at 734. court issue. nancially companies insecure insurance or question did not reach the felt undermining adequate. (By the essential function state laws were thus statutes, Although contracts.25 Con to the Alabama of insurance comparison state-super authorize stronger prоvisions, gress wished laws have far Texas rate-setting, opposed it was as public for civil and criminal vised providing as ever.26 price-fixing private penalties.)22 Summarizing, independent I find no Contemporary observers assumed that history legislative of the of the review Act provided the McCarron for state-su least National Act since at McCarron pervised rate-setting and state regula court, Casualty.23 including No the Su tion, including prohibition, of other ac Casualty, Court National preme the scope tivities within of the federal out, laid and re considered antitrust laws. Most significantly this legislative develop to the flow of ferred included the National Association of In leading to the final form ments Commissioners, surance which drafted specific debates discussed or that became the McCarron Act27 here.24 well as model rate-regulating and practices trade acts. The Although the McCarron Act turned Insurance authority reg- the state broad Committee Council over insurance, Governments, principal purpose adopted a pro- and ulate statute, regulation having two district court The cases cited 22. valid law, force enforcement, majority anything plus do not add new. Harrison means a which deals Co., Chicago ‘affirmatively’ effectively activitiy and Title Insurance 1974-2 Trade with the 98,022 Reports (D.Kan.1974), Regulation under and which the in governed businеss according the same conclusion directed reaches as the District to stated case, present Special Legislation, almost same Committee on standards.” relying upon cases, Alliance, language, Preliminary the same American Mutual Memo- Casualty, League upon California Effect National Com- Re the the Insurance randum Leasing. Robinson-Patman, Mitgang Clayton, mander v. Western Title In- Business of the Regulation Reports (Chicago, 1974-2 Trade surance and Federal Trade Commission Acts 98,024 (N.D.Cal.,1974) 1945) quoted July follows California at in Council of State Committee, League holding Governments, from the same court suffi- Insurance “Revision general exception Systems Regulation: to create the cient Insurance of State Report opinion notes, however, Recommendations,” (December law. regulates 1946) California now rates title at 5. Council of State Govern- present law so that “state law at committee came ments’ insurance to the same fully complained by plain- Systems covers the area of State conclusion. Revision tiffs.” 21-22. particular exchange 25. See in between quoted extensively that case the FTC Ferguson Pepper Cong.Rec. Senators in 91 history legislative not cite but did (1945). pertinent rely here dis- material particular 26. See in the comments of Senator appendix and included in the cussed bill, O’Mahonеy, co-sponsor in 91 opinion. Cong.Rec. (1945). 1485 and 1486 regulators Both insurance and executives now, Systems, I do supra, Act in read McCarron of State 27. See Revision foot- require that state if it be effective See note at 4. also comments of Sena- inapplicable. A Cong.Rec. (1945) federal law com- Ferguson, is to render tor Walter, Representative Cong.Rec. of the American Mutual Alliance re- mittee 978 and “regulated by ported state law” meant “a applies part price-fixing simi that to only took a proposals, NAIC the moted insurers, only designed to meet system regulatory The state title view.28 lar of competition reaches unfair the Council farther NAIC and contemplated problems, practice and not rating trade a state had Governments of State price-fixing. vice of corresponding to Sherman hardcore system, board these are some of specifics, Turning and an to price-fixing, on prohibitions empowered to shortfalls: commissioner insurance Clay analogous to provisions (1) only regulations enforce point The are and Rob Commission ton, Trade Federal general prohibitions any “unfair Acts.29 competition” inson-Patman of or “unfair or method de- practice” ceptive act in §§ stat- This takes me to the Alabama part 247. These are of the Model Unfair regulatory utes. The Alabаma scheme Insurance, Practices Act as Trade excludes title insurance from specifically Alabama, 28A, adopted Tit. 227— §§ rate-setting system applicable state 249(1). Although the Act declares unfair other lines to most of insurance. Tit. competition prac- of and trade methods 28A, 253. being state-super- There no § 228, there prohibited, appears § tices rate-making, rely vised defendants penalty for conduct which is be no direct state law prohibiting unfair meth- practice trade method of competition an unfair ods of regulating 28A, competition. “general Tit. triggering 2(b) § exemption. § statute Code, section of the Insurance put penalty” forward the possibility need criminal only sanctions for willful vi- type provides regulation of state of of Title penal- 28A for which no olations price-fixing trigger will is a § n rating provided. 243(3) system, otherwise Sections ty board is although it is not enumerate practices unfair trade argument. least, unreasonable At an if penalty 15§ is statutory specifically scheme is for which employed is suggests, This incorporated. by negative from the rate-making system different Congress implication, penalty mind, § seemed to has no have in it provisions to other adequate an price- application deterrent must Unfair Trade Practices Act. fixing there must Model be painstaking scrutiny to see if it meets that standard. (2) Price-fixing is not enumerated un- so it becomes an unfair der Insofar as it relates to price-fixing unfair practice or method of com- trade companies, title the overall only by way procedures speci- petition system just is a dubious one.30 As dis cussed, provides 247. That section rate-setting § fied mechanism Ala hearing where the insurance insurance, utilizes notice bama for most lines of 28A, reason 250-313, believe commissioner is the §§ Tit. kind Con engaged is unfair expected company trade gress instituted, to have hearing If after practice. commis- required, perhaps but it does apply price-fixing insurance, finds has oc- sioner to title 253. dis ('And, below, and that is an unfair trade curred part regu cussed other may find, he so but system still no latory pertinent, practice, here and the upon rested its decision District Court position is con- committee’s The insurance 28. regulation the title insurance business Systems, supra, state in its Revision tained Regulation aspects general. of other of that in business, 24. footnote comprehensive and exten- however granted commis- powers 29. adequacy sive, of an anti- contribute cannot Act for Practices Unfair Trade sions system respect regulatory §to trust designed n Insurance match hardly intended that state Acts. Clayton, Robinson-Patman FTC and policies, licensing agents, the form supra, Systems, footnote of State Revision See companies, like, capital structure 21-22. relationship to whether feder- have was to regulate law would antitrust activi- al or are con- subject we with which matter ties part insurers. price-fixing title is cerned penalty provided is past, present for acts My adequacy concern about the of this The company or future. appeal can regulatory system heightened by con finding to a state circuit court and sidering the statutory pattern from Appeals, thence Court of Civil which it was drawn. The statute was part of the National Association of In commis (3) get enforcement To proposal, surance Commissioners’ attorney sioner, acting through gen providing included a statute for rate-set an court for eral, petition state must ting supervision. under state The as enforcing injunction But an injunction. sumption promoters of the of these com com of the issue on the record plementary does model acts was that rate-set findings. hearing and his ting missioner’s would be handled under the rate- cause, receive can good the court statute, setting For thus triggering important, More evidence. new 2(b) exemption regard with § to the whether the anew must consider court 2(b) Act. Section would be question in unfair. The find is practice triggered as to all other federal antitrust no original hearing given are of the ings by the Unfair Trade Practices cоurt is, weight.31 If the circuit particular Act.33 The Unfair Trade Practices Act practice injunction enjoins designed supplement was to a rate-set previ act course, only prospective. No statute, just ting as the creation of the A subject penalty. to com is ously done designed only was supplement FTC to injunction subject appeal. can pany displace not to the Sherman and Clayton Act remedies.34 procedure This To hold now repeated must be for adequate that this statute is regulat for every person charged with committing ing price-fixing is give practice. an unfair more defer trade Where a dif- ence than its person promoters ferent drafters and is involved the statute con- ever no intended.35 authority tains for the commissioner bypass the succinctly, response Put hearing § defendants’ is respect with they they to conduct if have done what previously are held to be an un- doing trade practice. they fair accused of have violated Ala- (4) private law, There are no for as well as federal actions bama so that particular price-fixing in or unfair trade rejecting should be satisfied. § general.32 practices argument stated, for the reasons I Compare 31. general part with policy this the ap- against deceptive rule for insurance ad- peals vertising). from decisions and orders of the com- In all prac- three of these cases the missioner, 47(5), gives prima § complained specifically facie ef- tice of was enumerat- decision, presuma- fect to the commissioner’s practice ed. Where the has not been deter- bly covering questions both of fact practice, and conclu- mined to be an unfair trade sions of law. Such decisions can specifically empowered be reversed commissioner only rights” or modified if hearings “substantial determinations, were hold and make such prejudiced question law, findings on a likely implied private it is even less that an contrary weight evidence, remedy of the or the would be found. arbitrary capri- commissioner’s action was 33. Systems, Revision of State supra, footnote cious. 24, at 21-22. states, 32. The courts of two other both of 34. Systems, Revision of supra, State footnote which enacted variations of the model statute 24, at 10—11. The Council of State Govern- question, contrary have here come to results ments’ committee viewed supple- the FTC as a implied of whether there is an mentary mechanism, and considered the Un- private remedy for violations of fair Trade simply Practices Act meeting practices. Greenberg enumerated unfair trade scope agency, id., of the at 21. Ala- Equitable Society v. Life Assurance adopted bama this scheme as to all lines of U.S., Cal.App.3d Cal.Rptr. save title and accident and health. (1973) (implied remedy); Retail Clerks Welfare 28A, Tit. Co., Casualty Fund v. Continental 71 N.J.Su per. (1961) (no noted, implied supra, 176 A.2d 524 rem As footnote the Council edy); cf., Fidelity reading Carver v. Union Life Ins. also believed from its legislative App.2d history regulatory 37 Ohio systems N.E.2d state must be (1973) (insurer adequate trigger O.O.2d 170 held to contract on Revisions of representations advertisements, Systems based in 21-22. troubled defendants courts are am thus implement bound to liability damages provided treble what

face since and intended given McCarron Act. never reason to think Our they were responsibility charged doing cannot be discharged what are if we upon insist blindfolding quandary might exist had legal. That ourselves. permissive defendants acted under rating system which was in board purposes.

adequate its But APPENDIX appear to come within the ambit would CONGRESSIONAL Brown, v. Parker 317 U.S. RECORD —SENATE (1943), 87 L.Ed. 315 and Con so intended.36 See Allstate Ins. Co. gress Regulation of the Business of Insur- Lanier, supra. Report ance —Conference prefer I appellate hold at the President, Mr. McCARRON. Mr. creaky machinery level that the state’s move that the proceed Senate to the con- inadequate minimum, on its face. At a I sideration of the report conference on would remand the to the case District 340, express Senate the intent of for consideration of adequacy Congress with regu- reference to the statutory light scheme in the lation of the business of insurance. Act, findings. and for detailed I to; The motion agreed would direct the District Court to con proceeded Senate to consider the report. extent, sider on remand the if any, The actually which the commissioner has PRESIDING (Mr. uti OFFICER Ful- bright in meager chair). lized the enforcement is on given adoption him.37 power report. O’Mahoney quoted by language invalidated an act of 36. Senator law shall not be Congress autho- that states could not relates Parker v. Brown rize Sherman “unless such 351, violations, Cong. 317 U.S. at insurance.” See 91 to the business of Cong.Rec. 1484; at 91 see also the com- 63 87 L.Ed. at 1482 and S.Ct. Rec. ments of Senators Barkley Pepper responded O’Mahoney (1945). at 1480 Senator Ferguson during did not involve a statute like 1487 Parker v. Brown and of Senator 1486-1487 Act, only Cong.Rec. (1945). references this second proposed 91 McCarron O’Mahoney “adequacy” regu- (1945). Although day of state Senator of debate to 1480 point, respond generally his numerous Bark- to that were made Senator did not lation ley, supervi- light necessity Cong.Rec. and 1488. In for state to the references day’s sion, supra, emphasis make it clear that in that debate on rate-set- see footnote systems regulatory only supervisory ting in violation of the Sherman otherwise wrong appeal scope Where the an ultimate I think this reference to within the companies’ cooper- negate requirement Congress complained dis- of is insurance does not day prohibiting trade,” submitting rates to a state official for first that state laws ation in approval, cussed the apply. Noerr doctrine should and restraints of “combinations Cong.Rec. adequate. (1945), Railroad Presidents Conference must be Eastern Noerr Motor 523, Freight, U.S. S.Ct. represent 37. Plaintiffs to us that the commis- reh. denied 365 5 L.Ed.2d injunction against sioner has never secured an 5 L.Ed.2d price-fixing, any indeed has never cited insur- Moreover, Congress may not have contem- company price-fixing. ance comment I need not adequacy judicial plated regulatory review of the of state upon whether lack of enforcement authorizing rate-setting systems facially cause a will effective statute not to in violation of federal law. On otherwise trigger 2(b). instance, In this where the stat- day report on the conference second of debate suspect face, inadequate ute is if not on its rate-making that would Senate considered against price- absence of enforcement directed law, otherwise be in violation fixing is at least circumstantial evidence of point reiterated Senator Murdock inadequacy. any In the absence of case law Congrеss always re- context was adequacy, on courts will be better able to de- power specific provision to make tained the adequate termine what statutes are if trial perform- regulation if the states’ for insurance compile courts various statutes have been utilized. informative records on how the argu- satisfactory to it. This ance were 2(b), provides which ment was based on § Congress should affected take President, Mr. MURDOCK. Mr. will action at all? any yield question? for a the Senator No; they will not MeCARRON. Mr. yield. Mr. MeCARRON. be affected. Mr. MURDOCK. I understand the As They Mr. will not be ELLENDER. report which is now before affected? Senate, provides it 3-year for a mor- atorium, which ending is fixed as is correct. That MeCARRON. Mr. January invoking President, Mr. let me make one state- the Sherman Act and the placed which I think ment should be provides they again it here. It should be stated the Record period in force after without here, report as was stated in the part affirmative action on the óf the House, went which I read Congress, except regulatory matters that— been relating have enacted the States It is not the intention of subjects covered those acts— legislation enactment During the morato- Mr. MeCARRON. any power reg- clothe the States Regulatory rium. acts be enacted must or tax the business of ulate by the several in each of the sev- that which beyond had been held to Otherwise the eral States. antitrust acts prior possess to the decision Unit- January effective after become ed States Court in the South- MURDOCK. But Mr. is it not eastern Underwriters Association case. purpose bill does not the bill Briefly, your committee is of the accomplish this— provide we should for the continued regulation and taxation of accomplishes It MeCARRON. Mr. States, subject, however, always, years moratorium for 3 oper- set controlling the limitations out in the mentioned, of the acts namely, ation of the United decisions States Act, Act, Clayton Sherman Antitrust Court, as, instance, Allgeyer Act, the Federal Trade Commission as (165 578); Louisiana U.S. St. Louis amended, Cot- An- Robinson-Patman Compress (260 Co. v. Arkansas ton U.S. tidiscrimination Act. 346); and Connecticut General Insurance during Mr. MURDOCK. So (303 77). Co. v. Johnson intended, not, moratorium is is it expression part That should be made a affirmatively step shall the States words, explanation. of this other we regulation of the insurance business? powers give to the no more than States MeCARRON. That is correct. Mr. had, they previously those and we take Mr. MURDOCK. And it is intended from them. none expiration that on the of the moratorium Mr. HATCH Mr. WHITE ad- Act, Clayton Act, dressed the Chair. other acts again mentioned will be- I first yield Mr. MeCARRON. effective except— come from New Mexico. Senator as Except MeCARRON. Mr. glad I shall be HATCH. Mr. defer provided themselves have regula- States сolleague my the Senator from Maine. tions. Mr. WHITE. I thank the Senator Mr. MURDOCK. I thank the Senator. New Mexico. from President, Mr. ELLENDER. Mr. will yield? the Senator President, let me ask Senator Mr. yield. I report repre- from Nevada whether Mr. MeCARRON. part complete agreement sents Mr. At ELLENDER. the end of the conferees. period 3-year taxing regula- will the powers of the tory anywise States be in It does. Mr. MeCARRON. subject report

Mr. be of the several signed by WHITE. Is the part conferees on the States which relate to the the Sen- all the taxation such business. ate? Yes; Mr. signed (b) McCARRON. it is act No shall be con-

all of them. invalidate, impair, strued to any supersede by any law enacted for the President, Mr. O’MAHONEY. Mr. purpose regulating the business of in- yield? will the Senator surance, imposes or which a fee or tax I yield. Mr. McCARRON. business, upon such spe- unless such act going to re- Mr. O’MAHONEY. was cifically relates to the business of insur- that, as I mark listened to the Senator Provided, January ance: That after when he read from the committee re- 1948, 2, 1890, July amended, the act of as port, reading I noticed that he was Act, known as the Sherman and the act report Judiciary of the House Com- 15, 1914, amended, of October known to the House mittee on the occasion as the Sep- and the act of reported the bill was when House. tember known as the Federal Mr. McCARRON. That is correct. amended, Trade Commission coursе, Mr. O’MAHONEY. Of applicable to the business of insurance report conference has deviated from the to the extent that such business is not reported which was the House regulated by State law. Committee, Judiciary so that the lan- January mean that after Does that guage the Senator has read does not in may determine whether the States modify any language or alter any way and the other the Sherman acts or not report. to the business of in- applicable become No; McCARRON. Mr. I do not in- surance? implied. that it should be so tend President, ques- Mr. HATCH. Mr. The answer to that Mr. McCARRON. going propound During 3-year tion I was to the Sen- is “Yes.” may, ator from Nevada arises in connection if see moratorium subparagraph (b) so, page legislation with 2 of the fit to do enact for ' report, reading regulation. conference as follows: they of If do enact purpose legislation, extent that such (b) Nothing contained in this act shall regulate they will have taken the busi- inapplica- render the said Act Sherman respective insurance in the ness of States any agreement coerce, boycott, ble to under the Anti-trust out from Act, Sherman intimidate, coercion, boycott, or or act of Act, Clayton and the other acts. intimidation. or during the moratorium the do If States There is no moratorium all at legislation regulatory pur- not enact matters, those is thеre? January poses, then on the Sher- No; there is no McCARRON. Mr. Act, Act, Clayton and the other man at all as to moratorium them. immediately applicable. become acts will President, Mr. PEPPER. Mr. will the President, Mr. PEPPER. Mr. does yield? Senator necessarily mean that not we would yield. I Mr. McCARRON. legislatures State give to the several Mr. I hastily PEPPER. have read and outlines of the character power, report, I am a little but dis- define, to determine which we do not turbed what I have discovered in enacted for the a Federal law whether (b). begin- section 2. I paragraph of read all protection of all business 2(a): ning with section monopolies restraints of kinds American shall be effective in the trade (a) insurance, The Sec. business of therein, Union? person engaged every shall That would go Supreme bill does not defeat the Court McCARRON. Mr. decision. will far. The Senator recall the Underwriters case. The Southeastern Mr. McCARRON. moratorium startling. was It created con- decision continued; would not be but if in the in the insurance business be- sternation meantime the reg- States themselves had by previous decisions cause rendered dur- ulated the insurance, business of past years ing more we were and Clayton Sherman Acts and the other ‍​‌​​‌‌​​​​‌​‌‌‌​​‌​‌​‌​​‌‌‌‌​​‌​​​​‌​‌‌‌‌​​‌‌‌‌‌‍to believe entitled business of acts would not become effective. insurance was not to be classified as in- President, Mr. FERGUSON. Mr. will Supreme commercе. The terstate Court yield? the Senator specifically, the United direct- yield. I McCARRON. Mr. emphatically put it into ly, the cate- Mr. I FERGUSON. believe that a put of interstate commerce. It gory as to the statement fair construction of Act, squarely under the Sherman act helpfulness add to the Act, Clayton pend- acts. The and other the Senator what from Nevada has said. ing purpose creating bill is for the are things certain There which a State years for 3 in order that moratorium cannot interfere It with. cannot inter- of insurance not be inter- business shall application with the fere of the Sherman by any power Federal under fered any agreement boycott, coerce, Clayton or the either Sherman intimidate, or an act of boycotting, during period So of moratori- Act. coercion, or intimidation. the various may um States themselves at any Not McCARRON. time. Mr. steps to regulate business take insurance. Mr. any FERGUSON. Not at time. President, I Mr. PEPPER. Mr. have Mr. Nor is the McCARRON. control question. specified one further While I those matters believe of under an- the decision of the acts titrust removed at time. eminently correct, and that it was Mr. FERGUSON. That is correct. example justice long delayed, too After expired, moratorium has if a wish anything to see done which do has not legislated on subjects State destroy the will effectiveness that de- by the three covered acts to which refer- If there are reasons which cision. make made, has been ence those acts shall be years a moratorium proper under applicable to the business of insurance. ,end understanding insofar But as the concerned period of time legislated other acts subject, the three shall acts apply. go effect, good, but, well Mr. President, O’MAHONEY. Mr. concerned, far as I am I shall so not the yield? will Senator to until postponing January consent Mr. yield. McCARRON. I law, the effective of the date and Mr. I O’MAHONEY. believe the Sen- according privilege to the the of Michigan from a ator went little further enacting some mild of legislation form was than his intention when he said that they may regulatory, call thereby which legislated the if States have certain defeating the of the purpose Supreme things place. will take The bill says if defeating decision and the act it- Court regulated. the States have Apparently the conference report self. Mr. than had I had FERGUSON. I reference to goes further understood it to legislation dealing regulation a with stop with It does not moratorium go. taxes. years. end of 3 At the end of 3 at the years the moratorium continue if Mr. attempts O’MAHONEY. The bill regulated the meantime a State had in provide for a to moratorium. I ask any business to extent the whatever. attention of the the Senator Flori- applicability the operation the of order I may give my

da in that him Clayton Sherman Antitrust and the interpretation of bill. Act? While the Southeastern Underwriters pending an- was in the I think the Supreme

case Court Mr. O’MAHONEY. will when be clear deprive effort was made to court swer agree- are jurisdiction by which, out that there certain passing in point a I bill effect, normally in be made provided that which can the Sherman and ments Clayton which are in the insurance business apply Acts should not interest, might which any way, shape, public business of but conceiv- law, of the ably or form. be a violation prohibits agree- combinations and which actively Mr. Knowing PEPPER. how in restraint of trade. ments companies my State fought opposed bill, me I because PEPPER. it not be better I Mr. Would agreements, it. those remember if there are should are legitimatized, be identified Mr. was not O’MAHONEY. That bill statute? pending provides enacted. The for a It with quite agree moratorium. contains a declaration Mr. I O’MAHONEY. period Senator, that for of time the Sherman and I endeavored to Acts, Clayton as well best very my ability as the to induce other acts, apply. shall Congress committees of to write into the specific anti- exemptions law from the Section 4 declares that the law, prevail I unable to but was trust Act, National Labor Relations the Fair Judiciary the Committee on Act, Labor Standards and the Merchant prevail unable оn the floor of the Marine apply. Nothing Act shall in the But have now we this declara- Senate. proposed act shall be construed affect particular to these respect that with tion application. words, their In other there Act, acts, the the Clayton Sherman positive is a declaration that those three Federal no Trade Commission specific Federal laws which were enacted Congress be act of construed to apply apply commerce passed the law invalidate also to insurance. regulation taxing Then we have a clear recommendation insurance, pro- then business principle viso. decision Southeastern Underwrit- read Mr. PEPPER. Will the Senator ers case. proviso? Now, respect to the section to provides Mr. O’MAHONEY. It refers, the Senator himself it fol- January these several after lows the declaration in very first sec- acts— “Congress hereby tion declares that regulation the continued taxation is, PEPPER. That Mr. the several States the business of in- Act. public surance is in the interest.” So Mr. They O’MAHONEY. Yes. “shall we now endeavor to convey power applicable” is positive decla- —there recognize States —to ration-—“to the business of insurance to it, I say, convey should rather than it— extent that such reg- business is recognize to regulation. as desirable the law,” by ulated State as by stаted Mr. Will PEPPER. the Senator one House Members of the confer- yield? Nevada interpret committee. ence I that be to a clear statement if the yield. Mr. that I States McCARRON. do regulate, power of Congress regu- Mr. PEPPER. Does that mean that clearly late enunciated. I do not con- States can their own laws defeat may in and legislate come beyond the grant power to be a ceive limit State legislation. by permissive legisla- to authorize obviously adverse combinations tion Mr. McCARRON. To the extent that against public would be inter- regulate. which State does not est. Mr. WHITE. To the extent that the saying Am I correct in PEPPER. regulate.

Mr. State does not proviso which under the Senator that President, Mr. MURDOCK. Mr. does read, it if a State made an of- just has fense, the Senator from posi- Maine take the State, under the laws of the that, tion under the report, it combinations restraint of engage in necessary becomes for the trade, Antitrust Act could Sherman again act affirmatively, subsequent apply to combinations and restraints any State action taken? companies engaged in trade busi- all; Mr. WHITE. Not at that is not that State? Is not what it ness my view of matter at all. My view means? may regulate. If, is that ever, State how- No; that, I Mr. O’MAHONEY. think goes only point State bureau, rating example, formerly indicated, then these Federal statutes among companies, agreement thrоughout apply the whole beyond field supervision and under scope of the activity. State’s State, permitted. be Mr. McCARRON. That is a correct may That Mr. PEPPER. relate to the statement. together filing of proper getting Mr. MURDOCK. any Without subse- obtaining certain statistical in- data quent part Congress? action it, and disseminating formation that, all Mr. WHITE. Without subsequent legal but the effect of the proviso part Congress. action on the just the Senator has read is that a Mr. MURDOCK. I think absolutely prevent can applica- therein State lies a very important bility of the Sherman Antitrust feature of this whole agree matter. I Clayton Act to insurance companies thoroughly the doing the Senator from Maine business in the passing State insofar step the States picture which will act make affirma- combinations tively and act regulation, they may of trade restraints unlawful in that As do so. practical matter, Senator from As a Wyoming we know State. said, we convey no authority, the States cannot we and will not en- simply recognize right their regulate. these these force as they Insofar fail to cover the same companies. ground covered by the Sherman Act and President, (cid:127)Mr. WHITE. Mr. is it not those acts become ef- clear perfectly force and effect again. fective may Federal applica- of these statutes Mr. President, BARKLEY. Mr. applicable and shall be will ble tо whatever yield? the Senator occupy the State law fails to extent engage ground regulation? As I Mr. McCARRON. yield. it, jurisdictions. there are two take Mr. ask, BARKLEY. I should like to connection, in this whether, where States always Mr. McCARRON. There are. attempt to occupy the field—but do it State, WHITE. There is the Mr. au- inadequately by going through the — to act to whatever extent thorized seems legislation form of so as to deprive the proper. Clayton Act, the Mr. McCARRON. That is correct. jurisdiction, other acts of their it is the Mr. WHITE. Then interpretation Senator’s Federal the confer- Government can in, come report and ence that in a does case of kind, taxation, general regulation, legislature adequately fails and all where thing, I sort of think attempts deal the field it to States to should even cover, regulate, but I think apply? that now these acts still would that in- brought, surance been by the deci- my McCARRON. inter- Mr. That is the Supreme Court, sion of up to the bar pretation. Clayton Act and the Sherman President, I wish Mr. PEPPER. Mr. should give we the insurance myself report to the before it address to companies immunity from applicabil- on, very appreciate and I should is acted ity of those acts. might go be to over if allowed much Mr. McCARRON. I am willing that I would have opportunity. so the matter go over, should but I should present disposed time I am not At up like to call it tomorrow. go through matter without аd- let Mr. it. PEPPER. That dressing myself right. is all I appreciate the Senator’s consideration. The PRESIDING OFFICER. The PRESIDING agreeing is on question to the OFFICER. conference Without objection, the consideration report. of the con- report go ference will over. President, PEPPER. Mr. Mr. I wish myself subject, then, to the to address simply delay have to I shall the Sen-

and ate, I wish report. because to discuss the frank; be I think the conference

I shall practically destroys

report the effect decision, MORGAN, and I am Plaintiff-Appellee, Dolta Jo that. At least I wish to have go into it. I do not know of time FLETCHER, Administrator, C. James emergency requires which the re- Space National Aeronautics agreed to Ad- this afternoon. I port ministration, al., Defendants-Appel- et appreciate the privilege should of con- lants. sidering the matter a little. Mr. McCARRON. The Senator is cor- No. 74-2566. regarding 3-year moratorium,

rect Appeals, United Court of beyond that he is in error. but Fifth Circuit. Mr. PEPPER. expect would not Aug. Senators, even if had power, report floor, change the and I am Rehearing and Rehearing En Banc willing provided to have perfectly a 3 or Denied Oct. year moratorium, 4 or but I am not willing to see the decision of the Su- emasculated. I wish

preme Court

study the matter give my before I can Otherwise, it. I certainly

consent myself to address to it.

wish

Mr. McCARRON. Just one Senator, yield then I shall over, report may go so far as op-

I am concerned. Does the Senator

pose regulation State of insurance? oppose

Mr. PEPPER. I do is not inconsistent with operation ‍​‌​​‌‌​​​​‌​‌‌‌​​‌​‌​‌​​‌‌‌‌​​‌​​​​‌​‌‌‌‌​​‌‌‌‌‌‍ Sherman antitrust Act. On matters of

Case Details

Case Name: J. F. Crawford v. American Title Insurance Company

Court Name: Court of Appeals for the Fifth Circuit

Date Published: Aug 27, 1975

Citation: 518 F.2d 217

Docket Number: 74-2242

Court Abbreviation: 5th Cir.