Hartford Fire Insurance Co. v. California (U.S. Supreme Court)

Under the McCarran-Ferguson Act, insurance companies are generally exempt from federal regulation—including the federal antitrust laws—except “to the extent that such business is not regulated by State Law.” The Act also contains an exception allowing claims for any “act of boycott” under the Sherman Act. The court of appeals held that our clients, a group of domestic insurance companies, could nonetheless be sued for federal antitrust violates because they allegedly conspired with foreign reinsurers (who are not regulated by state law) and because it deemed the alleged conspiracy to be a boycott under the Sherman Act. We persuaded the Supreme Court to grant certiorari and reverse in part. Agreeing with our arguments, the Court held that domestic insurers do not lose their immunity by cooperating with foreign reinsurers. The Court also clarified the distinction between a boycott, which involves a refusal to deal, and a cartelization, which is an agreement to seek particular terms in a deal, and remanded for further proceedings on that issue.