No, California's program is not illegal. The federal law against monopolies, the Sherman Act, was written to stop private companies from teaming up to fix prices, not to stop a state government from passing a law. Since California's government created this program, it's considered 'state action' and is immune from that law. Also, the program doesn't violate the Constitution's rules on trade between states because California was trying to solve a serious local problem—its most important farm industry was collapsing. The U.S. government even had similar policies to help farmers and had given loans to support California's plan, so the state wasn't interfering with federal goals.

No, California's raisin rule does not break federal laws or the Constitution. The state is allowed to make this rule as part of its power to control farming in the state. The big federal law against businesses working together to control prices (the Sherman Act) doesn't stop states from making their own rules like this. California's rule also doesn't go against another federal law about farming because it actually works with the federal government's ideas. Finally, the rule doesn't break the Constitution's rule about fair business between states because it's focused on California's raisin business and doesn't unfairly hurt businesses in other states. California made this rule as part of its job as a state government, which the Sherman Act wasn't meant to stop.

We find nothing in the language of the Sherman Act or in its history which suggests that its purpose was to restrain a state or its officers or agents from activities directed by its legislature

In Parker, the Supreme Court held that the Sherman Act was not "intended to restrain state action or official action directed by a state."

In Parker the Supreme Court held that the Sherman Act did not prevent the state of California from establishing a program that restricted competition among growers and maintained prices in the distribution of agricultural products.

"[A] state does not give immunity to those who violate the Sherman Act by authorizing them to violate it, or by declaring that their action is lawful."

The rate bureaus responded that their conduct was exempt from the federal antitrust laws by virtue of the state action doctrine.

The court held that the state "as sovereign, imposed the restraint as an act of government which the Sherman Act did not undertake to prohibit."

In a dual system of government in which, under the Constitution, the states are sovereign, save only as Congress may constitutionally subtract from their authority, an unexpressed purpose to nullify a state's control over its officers and agents is not lightly to be attributed to Congress.

—the Supreme Court held that Congress did not intend for the antitrust laws to apply to states acting in their capacities as sovereigns.

The plaintiffs further assert that the only defense potentially available to the Attorney General is the implied state-action immunity found

In Airline Car Rental, the defendant sought dismissal under Rule 12 (b)(6) based on the affirmative defense that the claim was barred by the state action doctrine.

No, the state program does not violate the Sherman Act or the Commerce Clause. The Sherman Act is directed against individual, not state, action; therefore, a state-imposed restraint of trade, as an act of government, is not prohibited by the Act. Furthermore, the program does not violate the Commerce Clause because it is a regulation of a matter of legitimate local concern that does not conflict with, and is in fact consistent with, the policy of Congress to stabilize agricultural markets. The Court reasoned that the Sherman Act's history and text show an intent to prohibit private combinations in restraint of trade, not sovereign acts of a state legislature. Here, the program's authority came from the legislative command of the state, not from a private agreement. Regarding the Commerce Clause, the Court found that while the program did affect interstate commerce, its regulation of the sale of raisins from producer to packer was an intrastate transaction. More importantly, the state's interest in preventing the economic collapse of a vital local industry was substantial. Crucially, the federal government, through the Agricultural Marketing Agreement Act and loans from the Commodity Credit Corporation, had established a policy that aided and encouraged such stabilization efforts, meaning the state's program did not conflict with but rather complemented federal policy.

No, the California prorate program does not violate the Sherman Act, the Agricultural Marketing Agreement Act, or the Commerce Clause. The program is a valid exercise of the state's sovereign power to regulate its agricultural industry. The Sherman Act does not intend to restrain state action or official action directed by a state. The program does not conflict with the Agricultural Marketing Agreement Act as it operates with the collaboration of federal officials and is supported by federal loans. Lastly, the program does not violate the Commerce Clause because it is a matter of local concern, does not discriminate against interstate commerce, and aligns with federal policy to stabilize agricultural markets. The state, acting as a sovereign, imposed the restraint as an act of government, which the Sherman Act did not undertake to prohibit.

Parker v. Brown

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