Immunity from Regulatory Price Squeeze Claims: From Keogh, Parker, and Noerr to Town of Concord and Beyond

On September 21, 1990, the First Circuit handed down its decision in Town of Concord, Massachusetts v. Boston Edison Co. This case, the most recent in a growing line of court of appeals decisions examining the antitrust implications of public utility rate structures, represents the first time a United States court of appeals has unequivocally stated that an antitrust action based upon a “price squeeze” could not be maintained against a utility whose wholesale and retail rates were both fully regulated. Town of Concord notwithstanding, the courts are far from agreeing whether investor-owned electric or natural gas utilities are immune from federal antitrust liability arising from rates approved by the appropriate state or federal regulators, nor have they been able to agree on the reasoning used to support a given answer. The Supreme Court has yet to grant certiorari and decide the issue. This Note explores both the price squeeze as an economic and legal phenomenon and three legal doctrines supporting antitrust immunity for fully regulated utility rates-the Keogh “filed rate” doctrine, the Parker “state action” doctrine, and the Noerr-Pennington “political action” doctrine -in light of the First Circuit\u27s decision in Town of Concord, as well as other recent decisions examining the applicability of federal antitrust law to regulated utility rates. Part II provides an overview of those aspects of public utility economics and regulation that are relevant to this inquiry. Part III discusses the price squeeze, both in theory and in practice, in regulated and unregulated industries. Part IV outlines the origins and evolution of the filed rate, state action, and political action doctrines as well as their applicability to regulatory price squeeze claims brought against electric and natural gas utilities. Finally, Part V offers some concluding remarks on the past, present, and future of this niche of antitrust law