Federalism and Concurrent Jurisdiction in Global Markets: Why a Combination of National and State Antitrust Enforcement is a Model for Effective Economic Regulation

Jones, Katherine Mason | January 1, 2010

The focus of the article is on the proper role of U.S. state governments in regulating international business. The specific issue analyzed is the desirability of having state attorneys general enforce federal antitrust laws in global markets concurrently with federal antitrust regulators. Congress granted state officials this power in 1976. In 2009, however, a large proportion of the world’s commerce is now conducted in international, rather than national markets. This development has led Judge Richard A. Posner and others to advocate that the states be stripped of their statutory power to enforce federal antitrust laws on behalf of their residents as parens patriae. The argument has an initial appeal in light of a long judicial inclination to see state involvement in either “interstate commerce or “international affairs” as a threat to the ability of the United States to formulate a coherent national economic policy. Thus, the issue forms part of a larger question currently facing U.S. policy makers: How can the United States best transform the hodgepodge of state and federal economic regulation implemented during the New Deal into an effective regulatory regime for the global markets of the 21st Century? In taking on the controversial debate over the role of state attorneys general in antitrust enforcement, the article draws upon recent legal and historical scholarship on federalism to argue that globalization requires a paradigm change in concepts of U.S. federalism. While many assume that increasing international economic integration makes state participation in economic regulation with international implications inherently problematic, the article demonstrates that, to the contrary, states have an important role to play in the regulation of international business. States have a long history of challenging the federal government in a way that has promoted a robust national dialogue on matters of public policy. In addition, states have historically played and should continue to play a vital role in safeguarding the health, safety, and welfare of the American public. Historical research reveals that the view of state governments as protectors of the public interest formed an important part of the Founders’ vision. Globalization may suggest that states are not capable of carrying out this function independently of the federal government. But the fact that today’s “local” threats to state residents now often spring from international sources does not suggest that states should renounce their traditional role as guardians of the public welfare. Indeed, it makes that role all the more important.