Justice Breyer’s opinion wins this term’s good housekeeping award, as it cleans up a messy doctrinal landscape. CSFB outlines a straightforward four prong test, and it methodically applies each element to the Silver, Gordon, and NASD decisions. The four prong test for deciding whether a sectoral regulation (here, the securities laws) preempt the background regulation provided by the antitrust laws is as follows:

1. Legal regulatory authority
2. Exercise of that authority
3. Core subject matter
4. Incompatibility

Against that standard, it is fairly clear to see that CSFB followed the Gordon and NASD precedents.

	Authority	Exercise	Subject Matter	Incom-patibility	AT Applies
Silver	(–)	(–)	(+/-)	(–)	(+)
Gordon	(+)	(+)	(+)	(+)	(–)
NASD	(+)	(+)	(+)	(+)	(–)
CSFB	(+)	(+)	(+)	(+) Key	(–)

A straightforward test may still be difficult to apply, as this one clearly is. Elements (3) and (4) are not only fact intensive but also require a consideration of legislative history. The former makes early disposition of a case difficult, and the latter is fraught with uncertainty. That said, the clear formulation of the test will at least help to structure the inquiry.

As a matter of doctrine, the Supreme Court clearly sees the antitrust laws as background regulation. Where more specific “foreground” regulation exists and is applied, the antitrust laws no longer apply. In other words, antitrust applies to (more or less) unregulated markets. That is certainly one way of dealing with the problem of conflicting regulation, and now, after CSFB, the rules have become somewhat more predictable.

But is the immunity carve-out necessarily the best way to address the issue of conflicting regulation? I am not sure about that.

• First, as a general matter, Thomas has a point when he insists that a grant of immunity is first and foremost a legislative decision. If Congress wants to replace the antitrust laws in an area of regulation, it can certainly do so. Express exemptions exist for labor, insurance, agricultural cooperatives, export associations, baseball, and other professional sports. The securities industry, as far as I can see, is not on the list.
• Second, and this is a more case specific argument, Stevens is right that syndication is such a basic and almost always procompetitive activity that under a rule of reason analysis there is no plausible way in which the banks could have violated the Sherman Act in a market with tens of thousands of traded securities.

On balance, the opinion reaches the correct result, and it provides structural guidance for future immunity cases, both of which is, of course, commendable. Yet there is this nagging feeling that (i) the court did ignore an express savings clause, and (ii) that a decision about immunity in this industry was not required.

UPDATE: See also Danny Sokol’s analysis and Thom Lambert’s post at TOTM.

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