December 2007 Vol. 106 No. 3 THE REVIEW

Is There a Dormant Extraterritoriality Principle?: Commerce Clause Limits on State Antitrust Laws

Michael J. Ruttinger

State antitrust laws ordinarily supplement federal law by providing a cause of action for anticompetitive activity that occurs in the state. Some states, however, have construed their antitrust regimes to reach conduct that occurs outside the state’s boundaries. Such regulation raises significant federalism and Commerce Clause concerns by creating possible extraterritorial liability for conduct with virtually no in-state effect. This Note examines two Commerce Clause standards that may limit the degree to which state antitrust laws may exercise extraterritorial force—the “dormant” or “negative” Commerce Clause and the so-called “Extraterritorial Principle.” Unfortunately, the dormant Commerce Clause test, as articulated in Pike v. Bruce Church, Inc., is an overly malleable and ineffective limit. In contrast, the Extraterritoriality Principle is a powerful per se restraint; however, the Supreme Court has not provided clear guidance for when to apply the rule. Accordingly, this Note advocates an “Inconsistency Principle” as the best way to understand the Court’s concern with extraterritorial regulation. State antitrust laws should not have extraterritorial force when they would impose inconsistent legal obligations on the out-of-state defendant.

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