# Brief for the Respondents in Opposition — North Little Rock Transportation Co. v. Casualty Reciprocal Exchange > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386417_0251%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Brief for the Respondents in Opposition - **Published:** January 1, 1950 - **Citation:** 340 U.S. 823 ## Text No. 178 AUG 2 1950 CHARLES ELMORE CROPL SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1950 THE NORTH LITTLE ROCK TRANSPORTATION COMPANY, INC., Petitioner, versus CASUALTY RECIPROCAL EXCHANGE, et al., Respondents. BRIEF FOR RESPONDENTS NATIONAL BUREAU OF CASUALTY UNDERWRITERS, AETNA CASUALTY & SURETY CO., ET AL., IN OPPOSITION TO PETITION FOR WRIT OF CERTIORARI James B. Donovan, New York, N. Y. Epwarp L. Wricurt, Little Rock, Ark. Attorneys for Respondents BL ALENT ERE AE IEF ORR IIT AS INDEX Ne ch pi eae ROSA SAS SEN ON EERO Somarany OF ARGUMENT. ......cccccccccccssccccee ARGUMENT: (1) The Sherman Act is inapplicable to co- operative action among insurers in rate making and related matters, to the extent that such ac- tivities are regulated by State law............. (A) Background of the applicable prin- ciples and statutes. ......... cess eeeeeees (B) Wholly apart from the McCarran Act, rating combinations do not violate the Sherman Act if they are regulated by State law; by that statute, Congress expressly de- clared that State regulation of the insurance business is in the public interest, and pro- vided that the States may permit, under public regulation, rating combinations and other activities which might otherwise vio- late the Sherman Act..........ceseeeeees (II) The acts of these respondents were au- thorized and regulated by valid State laws...... (III) The motion for summary judgment was properly granted ...........ceeeecccecceeees EES ERE TE OE PETE EO Oe ON TORT EARS ae ape ge CRE aN RC OOM LY AR SONIC ERFE LITRE REPEL MG PPE FINE OME OE EL EI IAIN AI AOI ane Citations” CasEs: Associated Press v. United States, 332 U. 8. 392 < | rraaes Feats PEECTLREREXTL LLL LEA Clark Distilling Co. v. Western Maryland Ry. Co., 242 U. S. 311 (1917).......... SOS eee ree Clark Oil Co. v. Phillips Petrolewm Co., 148 F. 2d 580 (8th Cir. 1945), cert. denied 326 U. S. 734 ¢ erererereerrrrrr er reer erie Tite Connecticut Light & Power Co. v. Federal Power Commission, 324 U.S. 515 (1945) ...........4.. Davis v. Department of Labor, 317 U.S. 429 (1942) Field v. Barber Asphalt Paving Co., 194 U. 8. 618 SE kia. + deere hcacepepesheows cededves seeds International Salt Co. v. United States, 332 U. S. Fe CIE I ck So sisikecauddnnss sauneesnaabestees Keogh v. Chicago & Northwestern Railway Co., . sie. eS St. | rrr ere re ere ee Knickerbocker Ice Co. v. Stewart, 253 U. 8. 149 fo. eeeeT CPE P ET OT TTT eR t ET TET Terie Madeirense Do Brasil S/A v. Stulman-Emrick Lumber Co., 147 F. 2d 399 (2d Cir. 1945), cert. denied 325 U. S. 861 (1945) ............eeeees McLean Trucking Co. v. United States, 321 U.S. 67 rrr oer rer ster ee eer National Union Fire Ins. Co. v. Dickinson, 128 Ark. 367, 194 B. W. 264 (1917) 0... cece cceess New York Central Securities Corp. v. United States, 287 U. 8. 12 (1982) ........ceccceececs 11-12 16 9,13 14 DRIEST RAE A ect IAL nO EN Duo eA aR ae RR 8 8 ITPRE BRT ERAN ROL BG RUN Oe Bera st ar PAGE North Little Rock Transportation Co. v. Casualty Reciprocal Exchange, et al., 85 F. Supp. 961 (E. D. Ark. 1949) ; 181 F. 2d 174 (8th Cir. 1950). 2 Olsen v. Smith, 195 U. S. 332 (1904).............. 8 Osborn v. Ozlin, 310 U. S. 53 (1940)............. 9 Panhandle East. Pipe Line Co. v. Public Service Commission, 332 U. S. 507 (1947)............. 11 Parker v. Brown, 317 U. S. 341 (1943)........... 8 Parker v. Motor Boat Sales, 314 U.S. 244 (1941)... 12 Prudential Insurance Co. v. Benjamin, 328 U. S. Se Ene eee Nee Ck Nae Eetaeee eer eaeens 9, 12, 13 Railroad Commission of Texas v. Pullman Co., 312 Se SEED. Dieu eaWocbaneeubanbaeuees 15-16 Railroad Commission of Texas v. Rowan & Nichols Oil Co., 310 U. S. 573; 311 U. S. 615 (1940).... 16 Red Cross Line v. Atlantic Fruit Co., 264 U. 8. 109 SR cy Ra EE KES IR LER Ee FIA eednh Heh be ies 12 Robertson v. California, 328 U. S. 440 (1946).... 11 Sunshine Anthracite Coal Co. v. Adkins, 310 U. S. I cs rah te Eek aoe y / 13 Terminal Warehouse Co. v. Pennsylvania R.R. Co., ee Se SE ida bond bsckeahevnéinens 16 United States v. South-Eastern Underwriters As- sociation, 322 U. S. 533 (1944) ............ 6, 9, 10, 14 United States Navigation Co. v. Cunard S.S. Co., A i I er re eee 15 Walling v. Richmond Screw Anchor Co., 154 F. 2d 780 (2d Cir. 1946), cert. denied, 328 U. S. 870 16 Rte Pen” ia 2 y 4 STATUTES: iv McCarran Act, 15 U. S. C. 1011-1015; 59 Stat. 33, 34; P. L. 15, 79th Cong., Ist Sess., c. 20, Sees. 1-5, as amended, P. L. 238, 80th Cong., Ist Sess., ¢. SON pr re Serre FRE ro ers. 7, 8, 9, 10, 11, 12, 13, 14 Sherman Act, 15 U. S. C. 1; ¢. 647, Sec. 1, 26 Stat. ON os hcp cnc es hs Ee Ae oe 1, 5, 6, 8, 15,17 Act No. 116, Ark. Laws, 1947 (Sees. 66-417-66-433, cS ey rrr ere rr yer ee 13, 15 CoNnGRESSIONAL MATERIAL: 91 Cong. Res. 1442 (1945) .......ccccscccecssvcee 91 Cong. Rec. 1443 (1945) ....... ccc cceccccccees 91 Cong. Bec. 1481 (1945)... 26. occ cccceneens 91 Cong. Rec. 1486 (1945) ..... 0... ccesecscsevees H. R. Bills 3269, 3270, 78th Cong., Ist Sess. ....... Joint Hearings on 8. 1362, H. R. 3269, H. R. 3270 before the Subcommittees of the Committees on the Judiciary, 78th Cong., 1st and 2nd Sess., is Den rE een ett ere ere yo Si. 190K, THs Com, Tat Bethe soci evccsecsanves H. R. Rep. No. 68, 79th Cong., 1st Sess. (1945)..... H. R. Rep. No. 143, 79th Cong., Ist Sess. (1945)... H. R. Rep. No. 213, 79th Cong., Ist Sess. (1945)... Sen. Rep. No. 20, 79th Cong., Ist Sess. (1945)..... Sen. Rep. No. 1112, 78th Cong., 2nd Sess. (1944)... a owe wo oo wowowroveo eon eS MISCELLANEOUS: Clark and Samenow, The Summary Judgment, 38 Wake Fe Bee Ce io ka hee soe ebes cidinesnes 16 10 Fed. Rules Service (1948) (Amendments) SOV ERC is ok ow chide hen esexianee nese 16 3 Moore, Federal Practice, (1938) Sec. 56.04...... 16 Proceedings, National Ass’n. of Insurance Com- missioners, 77th Sess. (1946) pp. 212, 353-421... 14 3 Ark. L. Rev. 55, 61 (1948-1949) ..............66. 8, 14 OT Cad. Eee. TEA IE is cvs ke Ae dd vise tvcuen 8, 14 SB Gan. Ts 5. OS CI a vc ce dcdviediadevssaviecss 6 No. 178 Supreme Court of the United States OCTOBER TERM, 1950 s Tue Nortu Lirtitze Rock TRaNnspPorta- TIoN Company, Inc., Petitioner, versus . CasuaLty Recrprocat ExcHancg, et al., Respondents. BRIEF FOR RESPONDENTS NATIONAL BUREAU OF CASUALTY UNDERWRITERS, AETNA CASUALTY & SURETY CO., ET AL., IN OPPOSITION TO PETI.- TION FOR WRIT OF CERTIORARI Statement This is an action for treble damages and injunctive relief, based upon an alleged violation of Section 1 of the Sherman Act. The case was commenced on August 17, 1948 by the filing of a summons and complaint. Petitioner thereafter, and before joinder of issue, conducted explora- tory examinations of varivus persons to determine whether its complaint should be amended (R. 26-150). The complaint was not amended. The verified answer of these respondents, in addition to admissions and denials, contained a separate and complete a 2 affirmative defense. All parties thereafter agreed upon the truth of the facts contained in that affirmative defense, together with certain additional facts (R. 15, 25, 151-155). Virtually all the facts are matters of public record (R. 225). The Insurance Commissioner of Arkansas, by the At- torney General of that State, intervened on February 11, 1949. The Commissioner upheld the conduct and legal contentions of the respondents and asked for dismissal of the complaint (R. 24, 25). Motions by the respondents for summary judgment were argued before the District Court on February 15, 1949, on which date the Court also held a pre-trial hearing. The Court found that there was no genuine issue as to any material fact and that all such facts were before the Court. The Court framed the legal questions and ordered the sub- mission of written briefs (R. 219). On September 8, 1949 the Court granted the motions of respondents in all respects, stating the material facts and the reasons for its decision in a written opinion reported in 85 F. Supp. 961. The Court of Appeals for the Bighth Circuit unanimously affirmed, its opinion being reported in 181 F. 2d 174. The Facts Petitioner is a taxicab company operating in and about Little Rock, Arkansas. The first-named respondent is the Casualty Reciprocal Exchange, an insurer transacting the business of casualty insurance in the State of Arkansas and elsewhere. The other respondents are the National Bureau of Casualty Underwriters (an unincorporated association) and forty-nine casualty insurance companies which are among its members and subscribers. The Casualty Recipro- cal Exchange is not a member of or subscriber to the Na- tional Bureau. Every respondent is authorized to transact its respective business in the State of Arkansas (R. 221, 222, 16, 19, 25, 155). TREEPSOE TAI AS SRIRAM LER SA YP RE 4s — _—_ 3 Respondent National Bureau of Casualty Underwriters (hereinafter referred to as ‘‘The National Bureau’’) is a voluntary, non-profit, unincorporated association of stock companies engaged in casualty insurance. It is a ‘‘rating organization’’; in conformity with law, it secures and analyses data and thereafter establishes for its members (and for other insurers subscribing to its rating services) proper underwriting rules, classifications for risks, policy provisions and other forms, manual rates, minimum pre- miums and rating plans (R. 221, 16, 25, 155). Under the Constitution and Regulations of the National Bureau, every member and subscriber must comply with its determinations except (a) when such compliance is established to be in violation of law, or (b) when such insurer is ordered or permitted to act otherwise by public governmental authority duly empowered by law to issue such order or permission. Upon proper application, any stock company engaged in casualty insurance may become a member of the National Bureau. Any insurer engaged in such insurance may become a subscriber and under National Bureau Regulations it must receive rating services without discrimination. However, only members may vote in Bureau meetings and be represented on Bureau com- mittees (R. 222, 16, 25, 155). Pursuant to applicable law, the National Bureau is licensed and authorized to act as a rating organization for automobile liability insurance and other kinds of insurance by the State of Arkansas and by every other State pro- viding for the licensing of such an organization (R. 222, 18, 25, 155). From July 24, 1946 to May 16, 1948 petitioner was in- sured by respondent Casualty Reciprocal Exchange for automobile liability insurance covering its taxicab opera- tions. While the permissible loss ratio for such insurance is 64%, the losses incurred by petitioner during that period amounted to 136.1%. The Exchange accordingly canceled its policy effective May 16, 1948 (R. 222, 20, 25, 155). 4 Petitioner sought insurance from three other com- panies but each declined to accept such a risk. It then applied to the Arkansas Automobile Assigned Risk Plan, a cooperative undertaking by all insurers licensed to trans- act such business in Arkansas, under which each insurer agrees to accept an equitable number of risks which other- wise would be unable to obtain insurance. The Plan was organized in 1947 pursuant to Arkansas laws and with the approval of the Commissioner of Insurance for that State; it is similar to other such Plans in other States. Petitioner was assigned by the Plan to respondent Aetna Casualty and Surety Company, a member of the National Bureau. The Aetna accepted the risk and issued a policy effective May 16, 1948, agreeing with petitioner to receive an initial premium with the final premium to be computed when proper rate-making data became available (R. 222, 18, 20, 25, 155). In order to obtain such data, the Aetna thereafter requested Casualty Reciprocal Exchange (through its rep- resentatives, Heart of America Insurance Agency, Inc.) to furnish to the Aetna a statement of the accident experi- ence of petitioner under the Casualty Reciprocal Exchange policies. Such exchanges of rating data are necessary and customary within the industry in order to enable rating organizations and insurers to determine rates which are in accordance with the standards established by law. Certain incomplete data was furnished to the Aetna by the Ex- change. In conformity with National Bureau procedures, the Aetna as a member submitted this data to the Bureau and requested it to establish a rate for the risk. After pre- liminary calculations by the National Bureau on the data submitted, at the request of petitioner the Arkansas Insur- ance Department obtained and sent to the Bureau what was stated to be complete information on petitioner’s experience under the Casualty Reciprocal Exchange policies. On the basis of that information the National Bureau calculated a rate for the risk in accordance with an appropriate rating TAT ERMA ites Beds HSS PLS ST SEGA RNR OR Sg Od EOE » a plan, which was on file in the Arkansas Insurance Depart- ment and was effective in accordance with applicable provi- sions of law. The precise rate established for petitioner and the basis of its calculation were filed by the National Bureau in the Arkansas Insurance Department on or about July 16, 1948 (R. 223, 20, 25, 155). According to the latest available statistics filed in the Arkansas Insurance Department, members and subscribers of the National Bureau write approximately 56% of all automobile liability insurance written in the State of Ar- kansas. In addition to National Bureau companies, there are carriers writing such insurance in Arkansas which are (a) members or subscribers of the Mutual Casualty Insur- ance Rating Bureau, another licensed rating organization similar to the National Bureau, or (b) insurers which are neither members of nor subscribers to any rating bureau and write such insurance at rates independently established by each insurer (R. 224, 19, 155-158). 9] On or about August 17, 1948 and without further com- munication with respondents or the Arkansas Insurance Department, petitioner commenced this action. The com- plaint describes the foregoing as a ‘‘pattern of action fol- lowed under a contract or conspiracy between them in restraint of trade or commerce among the several states’’ and in violation of Section 1 of the Sherman Act. Treble damages and certain injunctive relief are demanded in the complaint (R. 224, 7, 8). Summary of Argument The courts below correctly decided, in accordance with the decisions of this Court, that: 1. The Sherman Act is inapplicable to cooperative action among insurers in rate making and related matters, to the extent that such activities are regulated by State law; REMMI EDM AR Tia PIERRE Gay PMO EA TPE AMEE IEEE SOME PMN RY BZ RNY Leg LI 6 2. The acts of these respondents were authorized and regulated by valid State laws; and 3. The motion for summary judgment should be granted. ARGUMENT POINT I The Sherman Act is inapplicable to co operative action among insurers in rate making and related matters, to the extent that such activities are regulated by State law. (A) Background of the applicable principles and statutes. On June 5, 1944 this Court determined for the first time that (a) an insurance company conducting a substantial part of its business across State lines is engaged in ‘‘com- merce among the several States’’ and is subject to regula- tion by Congress under the Commerce Clause of the Con- stitution and (b) the Sherman Antitrust Act is applicable to the business of insurance. United States v. South- Eastern Underwriters Association, 322 U.S. 533. While the S. E. U. A. case was pending before the Court, there were introduced in both Houses of Congress com- panion bills to exempt the business of insurance from the Sherman and Clayton Antitrust Acts. H. R. 3270, 8. 1362, 78th Cong., 1st Sess., introduced respectively on September 20 and 21, 1943. See Note (1943) 32 Geo. L. J. 66. These bills were still being considered at joint public meetings of House and Senate Judiciary Subcommittees when the S. E. U. A. decision was rendered. Joint Hearings on S. 1362, H. R. 3269, and H. R. 3270 before Subcommittees of Committees on the Judiciary, 78th Cong., Ist and 2nd Sess., Parts 1-6. On January 18, 1945 Senators McCarran and Ferguson introduced a proposal by the National Associa- tion of Insurance Commissioners. After prolonged debate and substantial amendment, it passed both Houses and was SRE ARS SR NRE RLU aN SE ERIS METI OME TESA ROR sel tang MERU TE AME 0 OR 7 approved by President Roosevelt on March 9, 1945. P. L. No. 15, 79th Cong., Ist Sess., Ch. 20, Sees. 1-5 (March 9, 1945) ; 59 Stat. 33, 34; 15 U.S. C. 1011-1015. The pertinent text of the statute as enacted (hereinafter referred to as ‘‘The McCarran Act’’) is as follows: ‘‘See. 1. Congress hereby declares that the con- tinued regulation and taxation by the several States of the business of insurance is in the public interest and that silence on the part of the Congress shall not be construed to impose any barrier to the regulation or taxation of such business by the several States. ‘*Sec. 2.(a) The business of insurance, and every person engaged therein, shall be subject to the laws of the several States which relate to the regulation or taxation of such business. ‘*(b) No Act of Congress shall be construed to in- validate, impair, or supersede any law enacted by any State for the purpose of regulating the business of insurance, or which imposes a fee or tax upon such business, unless such Act specifically relates to the business of insurance: provided, That after January 1, 1948, the Act of July 2, 1890, as amended, known as the Sherman Act, and the Act of October 15, 1914, as amended, known as the Clayton Act, and the Act of September 26, 1914, known as the Federal Trade Commission Act, as amended, shall be applicable to the business of insurance to the extent that such business is not regulated by State law. *‘Sec. 3.(a) Until January 1, 1948 the Act of July 2, 1890 as amended known as the Sherman Act, and the Act of October 15, 1914, as amended, known as the Clayton Act, and the Act of September 26, 1914, known as the Federal Trade Commission Act, as amended, and the Act of June 19, 1936, known as the Robinson-Patman Antidiscrimination Act, shall not apply to the business of insurance or to acts in the conduct thereof. ‘*(b) Nothing contained in this Act shall render the said Sherman Act inapplicable to any agreement to boycott, coerce, or intimidate, or act of boycott, coercion, or intimidation. > ‘ eee Se negic Pests fe My et Rb ELE LUE CELLS IP MES LORIN OP ATA SHED EE POT IP NYE RUM AE BRONTE aE SN EA ? 7 The moratorium period in the Act, originally to end January 1, 1948, subsequently was extended by Congress to June 30, 1948. P. L. No. 238, 80th Cong., Ist Sess. ch. 326, appr. July 25, 1947. During and after the moratorium every State and Terri- tory (with the single exception of Idaho), and Congress for the District of Columbia, enacted or revised various regula- tory laws concerning the business of casualty insurance. See Notes (1949) 3 Ark. L. Rev. 55 and (1947) 47 Col. L. Rev. 1314. As in Arkansas, all of these authorize rating organi- zations and other cooperative rating activities, under public supervision. There can be no doubt but that the object of these statutes was to accept the invitation of Congress expressed in the McCarran Act, to preserve State regula- tion and to render inapplicable the Federal antitrust laws. q (B) Wholly apart from the McCarran Act, rating combinations 4 do not violate the Sherman Act if they are regulated by : State law; by that statute, Congress expressly declared that ; State regulation of the insurance business is in the public 3 interest, and provided that the States may permit, under ; public regulation, rating combinations and other activities 3 which might otherwise violate the Sherman Act. | For purposes of the following discussion, we shall as- sume that the rating activities of the National Bureau are such that in ordinary interstate industries they would con- stitute a violation of the Sherman Act. We also shall as- sume, as we shall hereinafter demonstrate, that the Ar- kansas legislature has found it to be in the public interest to authorize such activities under State regulation, and that no Federal regulation exists in the field. Under such circumstances, the State-regulated activities do not violate the Sherman Act. The acts authorized and regulated by the State are as effective as its acts and the Federal courts will not impute to Congress an intention to nullify what the State legislature has determined to be in the interests of its citizens. Parker v. Brown, 317 U. S. 341; Olsen v. Smith, 195 U. S. 332; Field v. Barber Asphalt ty Say, a * 3 ‘ 2 ae i ——— 9 Paving Co., 194 U. S. 618, 619, 624. See also United States y. South-Eastern Underwriters Association, 322 U. S. at 562. The text and legislative history of the McCarran Act demonstrates that Congress has intended that the States should have plenary and exclusive power to regulate the business of insurance. See McCarran Act, Secs. 1 and 2; Sen. Rep. No. 1112, parts 1 and 2, September 20, 1944, 78th Cong., 2nd Sess.; Sen. Rep. No. 20, Jan. 24, 1945, H. R. Rep. No. 68, Feb. 8, 1945, H. R. Rep. No. 143, Feb. 13, 1940, H. R. Rep. No. 213, Feb. 22, 1945, 79th Cong., 1st Sess. In exempting the business of insurance from the anti- trust laws ‘‘to the extent that it is regulated by State law’’, Congress further intended that if the States determined that State-regulated rating bureaus and similar activities are in the public interest, such acts could not be held to violate the Sherman Act or the other enumerated statutes.* See 91 Cong. Ree. 1442, 1443, 1481, 1486 (1945). The right of Congress to permit regulation by govern- mental authority, rather than by the free forces of competi- tion is well established. McLean Trucking Co. v. United States, 321 U. S. 67. It is equally well established that gov- ernment has a special relation to insurance and that the business has ‘‘long been withdrawn from the benefits and caprices of free competition’. Osborn v. Ozlin, 310 U.S. 53, 65. Prudential Insurance Co. v. Benjamin The history of the McCarran Act and the legislative purposes of its enactment were thoroughly examined by this Court in the case of Prudential Insurance Co. v. Benjamin, 328 U. S. 408. An insurance company protested an annual *The sole exceptions to the foregoing are boycott, coercion and intimidation, which are not involved in this ease (R. 227). WEAR tiun.t. — —_ . a Ee 10 tax levied by South Carolina on foreign insurers (but not on domestic companies) as a condition of being author- ized to do business within the State. The tax amounts to three per cent of the aggregate of premiums received from business done in South Carolina, regardless of its inter- state or local character. Citing the S. EF. U. A. decision, the insurer contended that the tax was an unconstitutional dis- crimination against interstate commerce in favor of local business. This Court unanimously upheld the tax. The late Mr. Justice Rutledge traced the winding paths of the previous decisions, commenting that ‘‘the history of the commerce clause has been one of very considerable judicial oscillation’’, 328 U. S. at 420. The authorities cited by Prudential were distinguished on the ground that in none of them had Congress acted or purported to act, either by way of consenting to the State’s tax or otherwise. The Court stated (Id. at 424): ‘‘None of the decisions conceded, because none in- volved any question of the power of Congress to make conclusive its own mandate concerning what is commerce. But apart from that function of defin- ing the outer boundary of its power, whenever Con- gress’ judgment has been uttered affirmatively to contradict the Court’s previously expressed view that specific action taken by the states in Congress’ silence was forbidden by the commerce clause, this body has accommodated its previous judgment to Congress’ expressed approval.”’ Since there was no contention by Prudential that com- merce was not involved, the Court would give effect to the positive expression by the McCarran Act that the ‘‘con- tinued regulation and taxation by the several States of the business of insurance’’ is in accord with Congress’ policy. The court thus rejected the argument of Prudential that the Commerce Clause ‘‘of its own force’’, and without reference to any action by Congress, forbids discriminatory State taxation of interstate commerce. 11 Reviewing the McCarran Act, the Court found that it was the intention of Congress to ‘‘put the full weight of its power behind existing and future state legislation to sus- tain it from any attack under the commerce clause to what- ever extent this may be done with the force of that power behind it, subject only to the exceptions expressly provided for.’’ The Court declared (Id. pp. 430, 431): ‘*Moreover, in taking this action [enactment of the McCarran Act] Congress must have had full knowl- edge of the nation-wide existence of state systems of regulation and taxation; of the fact that they differ greatly in the scope and character of the regulations imposed and of the taxes enacted; and of the further fact that many, if not all, include features which, to some extent, have not been applied generally to other interstate business. Congress could not have been unacquainted with these facts and its purpose was evidently to throw the whole weight of its power behind the state systems, notwithstanding these variations. ”’ South Carolina and Congress had acted in complete coordination to sustain the tax, the Court noted, and it is therefore ‘‘reinforced by the exercise of all the power of government residing in our scheme’’. Id. at pp. 435, 436. The judgment of the Supreme Court of South Carolina, upholding the tax, accordingly was affirmed. Other pertinent decisions of this Court are in accord. See Robertson v. California, 328 U. S. 440, 457, 462; Pan- handle East. Pipe Line Co. v. Pub. Serv. Comm’n., 332 U. 8S. 507, 521. Arguments of Petitioner Petitioner has assailed the McCarran Act as unconstitu- tional, principally upon the ground that Conzress has unlawfully delegated its legislative power to the States. Analysis of the brief shows that in support of this argument petitioner relies upon only one decision, i.e., Knickerbocker 12 Ice Co. v. Stewart, 253 U. 8. 149. The Knickerbocker case and its related predecessors deal solely with the principles of maritime jurisdiction under admiralty law, and cannot be cited as authority in any other field. Parker v. Motor Boat Sales, 314 U. S. 244, 247; Red Cross Line v. Atlantic Fruit Co., 264 U. S. 109, 124; Davis v. Dept. of Labor, 317 U. S. 249, 252, 255. This was made manifest by the Court itself in the Knickerbocker opinion, when it disclaimed any intention to impair the doctrine of Congressional consent to State legislation as expounded in Clark Distilling Co. v. Western Maryland Ry. Co., 242 U.S. 311. Noting that the Clark case was concerned with the power of Congress under the Commerce Clause, this Court declared (253 U. S. at 166): ‘‘Here we are concerned with a wholly different constitutional provision [Article 3, Section 2]—one which for the purpose of securing harmony and uniformity, pre- scribes a set of rules, empowers Congress to legislate to that end, and prohibits material interference by the states.”’ The Court was careful to point out that the ‘‘distinction between the indicated situation created by the Constitution relative to maritime affairs and the one resulting from the mere grant of power to regulate commerce without more, should not be forgotten... . ’’ Id. at 161. In any event, this Court has declared that no invalid delegation of power is contained in the McCarran Act. Prudential Ins. Co. v. Benjamin, 328 U. S. 408, 433, 438. The only other constitutional argument made by peti- tioner is that ‘‘Congress cannot suspend a general law for a period of time except under war powers’’. This contention is as obscure as it is irrelevant. A hodgepodge of conflict- ing decisions are cited in the petition (pp. 10-12), most of which serve only to confuse whatever point petitioner is seeking to make. Congress did not ‘‘suspend a general law’’; it rendered the Sherman Act inapplicable to the insurance business until June 30, 1948 and inapplicable to it thereafter ‘‘to the extent that such business is regulatec by State law”’. ——__ 13 It is well established, of course, that Congress may grant any such exemptions from the anti-trust laws, McLean Trucking Co. v. United States, 321 U. S. 67, 69; Sunshine Anthracite Coal Co. v. Adkins, 310 U. S. 381, 396; N. Y. Central Securities Corp. v. United States, 287 U. S. 12. In enacting the McCarran Act Congress saw fit to keep alive ‘‘the hand of state regulatory bodies’’ in the matter of public supervision of a major interstate industry. Connecticut L. dé P. Co. v. Federal Power Com’n., 324 U.S. 515, 530. We accordingly submit that Congressional col- laboration of this order, established to implement a policy determined by Congress in its legislative discretion, is free from constitutional defect. Prudential Ins. Co. v. Benjamin, 328 U. S. 408; Connecticut L. & P. Co. v. Federal Power Com’n., supra. POINT Il The acts of these respondents were authorized and regulated by valid State laws. The lower courts have found and it is uncontested, that the respondents’ acts of which petitioner complains were authorized and regulated by Act No. 116, Arkansas Laws 1947 (R. 227, 237). The Arkansas rating law provides the system of regu- lation most common in the United States. In broad outline it provides that: 1. Rates must meet certain standards; 2. All rates must be filed with the State Commis- sioner of Insurance, who is granted various powers if rates fail to meet the statutory standards; 3. Companies may combine in rating matters but only if their organizations for such purposes are li- censed and supervised by the State. a 14 Such a system of regulation for various lines of insur- ance existed in many of the States at the time of the S. E. U. A. decision and passage of the McCarran Act. During the moratorium granted by Congress, the National Asso- ciation of Insurance Commissioners and an All-Industry Committee met to consider a model form of rate regulatory law. After months of debate the model law was drafted and agreed upon (the sole disagreement being with respect to one word not relevant to this case). It is this model law which was enacted by the Arkansas legislature and most other States, and was adopted with varying amend- ments in almost all remaining jurisdictions. See 47 Col. L. Rev. 1314, 1321 (1947); 3 Ark. L. Rev. 55, 61 (1949); Proceedings, National Assn. of Insurance Commissioners, 77th Sess., pp. 212, 353-412 (1946). The significance of enacting such model legislation will be apparent to the Court as establishing the reasonable- ness and legality of the law. Such considerations were weighed by the Supreme Court of Arkansas in National Union Fire Ins. Co. v. Dickinson, 128 Ark. 367 at 380, 194 S. W. 254. In upholding the legality of a rating law relat- ing to fire insurance, Wood, J. declared: ‘But the fact that the method adopted by the Ar- kansas bureau is modeled after a bill that was recom- mended by the National Convention of Insurance Commissioners and enacted into law in several of the States is a cogeat argument in support of the con- tention of the appellees that the method of the Arkansas bureau is not arbitrary or unreasonable.”’ Petitioner makes no effort to support its statement that the statute violates the State Constitution and the State antitrust laws. These points were examined and dismissed by the Courts below (R. 227, 238). ae 15 POINT III The motion for summary judgment was properly granted. There is in effect in Arkansas a comprehensive rate regulatory statute enacted by the State with the express consent of the Federal government. Under that statute rates charged in Arkansas must not be ‘‘excessive, inade- quate or unfairly discriminatory’’. Methods of challenging rates, in addition to the required review by the Commis- sioner before they go into effect, are provided. By this action, petitioner seeks to use the treble damage provisions of the Sherman Act to challenge the legality of its established premium rate and to be awarded ‘‘dam- ages.’’ This cannot be done. Even assuming a violation of the Sherman Act, the rate in effect under the Arkansas statutes is the legal rate and petitioner is not entitled to question it in proceedings under the Sherman Act. Keogh v. Chicago & Northwestern Railway Co. et al., 260 U. S. 156. In addition to the damages sought by petitioner, the complaint also prays for certain injunctive relief. This lat- ter plea is obviously an attempt to have the Federal courts assume the proper duties and responsibilities of the Insur- ance Coinmissioner of the State of Arkansas. No such plea ean be granted. The statute provides adequate means for the determination and correction of abuses and the Com- missioner possesses the necessary data and ample powers to hear and determine any complaint. Any order or deci- sion of the Commissioner is subject to judicial review in the State courts. See Section 5 and Subsection 6(d), Section 9 and Subsection 17(c) of Act No. 116, Arkansas Laws 1947. Federal courts will not attempt by injunction to usurp the authority and assume the responsibilities of duly consti- tuted administrative officials. United States Navigation Co., Inc. v. Cunard S. 8. Co., 284 U. 8. 474; Railroad Com’n 16 of Texas v. Pullman Co., 312 U. 8, 496 at 500, 501; Railroad Commission of Texas v. Rowan & Nichols Oil Co., 310 U.S. 573, 311 U. S. 615; See Terminal Warehouse Co. v. Penn. R. R. Co., 297 U. S. 500 at 513, 514. The answer of these respondents set forth detailed facts constituting an affirmative defense (R. 15-21). Those facts describe the nature and pertinent operations of the National Bureau, the company respondents, the Arkansas Auto- mobile Assigned Risk Plan, and the exact details of all dealings between these respondents and petitioner. The truth of these facts has been attested by the sworn state- ments of the appropriate officers among these respondents, has been admitted by all parties, has been attested by the Arkansas Commissioner of Insurance and has been estab- lished by the trial court. (R. 23, 155, 25, 221-225). In addition, a stipulation as to the truth of certain additional facts was entered into between petitioner and these re- spondents and filed with the District Court (R. 151-180). The District Court found that all material facts were in evidence and that no genuine issue exists as to any material fact (R. 225). These circumstances present precisely the type of situa- tion in which a motion for summary judgment pursuant to Rule 56 is appropriate. Designed as an expeditious pro- cedural device to obtain prompt justice for all parties in litigation, the Rule was intended to be used when there exists no genuine dispute as to any material fact and only questions of law are presented. Madeirense Do Brasil S/A v. Stulman-Emrick Lumber Co., 147 F. 2d 399 (C. A. 2), cert. denied 325 U. S. 861; Walling v. Richmond ‘'crew Anchor Co., 154 F. 2d 780 (C. A. 2), cert. deniec 328 U. 8. 870; 3 Moore, Federal Practice, Sec. 56.04 (1938) ; Clark and Samenow, The Summary Judgment, 38 Yale L. J. 423 (1929). See also, 10 Fed. Rules Serv., (Amend- ments) XCVII-XCVIII (1948). It has been specifically upheld as appropriate in cases under the anti-trust laws. Intern’l Salt Co. v. United States, 332 U. 3. 392; Associated 17 Press v. United States, 326 U. 8.1; Clark Oil Co. v. Phillips Petroleum Co., 148 F. 2d 580 (C. A. 8), cert. denied 326 U. S. 734. Conclusion The acts of these respondents were in accordance with statutes constituting due exercise of the governmental powers of the United States and the State of Arkansas. Respondents have not violated Section 1 of the Sherman Act, which is inapplicable to the acts of which petitioner complains. In view of the foregoing, counsel for these respondents respectfully submit that the petition should be denied in all respects. Respectfully submitted, James B. Donovan, New York, N. Y. Epwarp L. Wricur, Little Rock, Ark. Attorneys for respondents Nationa, Bureau or CasuaLty Unprerwriters, AETNA CasuALTY anD Surety Company, AMERICAN GENERAL IN- SURANCE CoMPpaANy, AMERICAN GUARANTEE AND Liasmity Insurance CoMPANYy, AMERICAN Surety Company or New York, Arex InpEM- nity Company, Assocratep Emptoyers Luoyns, Bankers InpemMNity Insurance Company, Carotina Casuauty Insurance Company, THE Century InpEeMNity Company, CoLumBIA Casusity Company, CommerciaL CasuALTy Insurance Company, Commercia, Stanparp Insurance Company, Tue Connecticut In- DEMNITY Company, Eactz Inpemniry Com- PRE ROG AEST ROR G IIS! II LOTR TOES AI! AINE EA ETE to TERNATIONAL, 18 pany, EmMpLoyers CasuaLty Company, Factory Murvuat Liasmity Insurance CoMPANY OF America, THe Fiperity anp Casuatty Com- pany or New York, Fipetity anp Deposit Company or MaryLand, Firemen’s Funp In- DEMNITY CoMPANY, GENERAL INSURANCE Cor- PORATION, GLENS Fauus InpDEMNITY COMPANY, Guiose INDEMNITY Company, Great AMERICAN InpeMNITY Company, Hartrorp ACCIDENT AND InpeMNiITY Company, THE Home INDEMNITY Company or New York, Lonpon GuaARANTEE anp AccipeENtT Company, Limirep, Manurac- TURERS AND MrercHants INDEMNITY COMPANY, Maryianp CasuaLty Company, MassacHUSETTS Bonp1NnG AND InsuRANCE Company, THE METRO- POLITAN CasuaLtTy INsuRANCE CoMPANY oF NEW York, Nationa AUTOMOBILE AND CASUALTY Insurance Company, Nationa, Surety Cor- PORATION, New AMSTERDAM CasuaLTy CoM- pany, New York Casuatty Company, THE Ocean ACCIDENT AND GUARANTEE CORPORATION, Limitep, Pactric EmMpioyers INsurANCE Com- PANY, PHorenrx InpeMNITyY Company, RoyaL InpemMnity Company, Service Casuatty Com- PANY oF New York, Stanparp Accipen? [n- SURANCE CoMPANY, TRADERS AND GENERAL [N- SURANCE Company, THE TRAVELERS INDEMNITY Company, THe Travecers InsuRANCE CoMPANY, Untrep Nationa Inpemnity Company, UNITED States Casuatty Company, Unirep STATES Fivetiry aNnp Guaranty Company, ZURICH GeneraL ACCIDENT AND LiaBiLity INSURANCE Company, Limitep, CoNsoLipaTED UNDER- writERS, Highway INsuraNcE UNDERWRITERS. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386417_0251%3A2. Public record. Not legal advice.