Question: The Federal Trade Commission filed an administrative complaint against six

The Federal Trade Commission filed an administrative complaint against six of the nation's title insurance companies. The complaint alleged that the title insurers engaged in horizontal price-fixing in their setting of uniform rates for title searches and title examinations. The challenged uniform rate-setting for title searches and title examinations occurred in various states through rating bureaus organized by the title insurers. These rating bureaus allegedly would set standard rates for search and examination services notwithstanding possible differences in efficiencies and costs as between individual title insurance companies. Though privately organized, these rating bureaus and the rates they set were potentially subject to oversight by the various states in which they operated. In Wisconsin and Montana, two of the states in which price-fixing was alleged to have occurred, the rating bureaus filed rates with state agencies that operated under the so-called negative option rule. This rule provided that the rates became effective unless they were rejected by the appropriate Wisconsin or Montana agency within a set time.
At most the state agencies checked the rate filings for mathematical accuracy. Some rates were unchecked altogether. Reviewing the administrative law judge's decision in the administrative proceeding, the FTC commissioners concluded that price-fixing occurred and that the state action exemption argued for by the title insurers did not apply. On appeal, the Third Circuit Court of Appeals held that the state action exemption shielded the title insurers' from antitrust liability for the price-fixing that occurred in Wisconsin and Montana. Was the Third Circuit correct?

Sale on SolutionInn
  • CreatedJuly 16, 2014
  • Files Included
Post your question