This Day in Legal History: Clayton Antitrust Act Passed
On October 15, 1914, Congress passed the Clayton Antitrust Act, a landmark piece of legislation aimed at strengthening U.S. antitrust law and curbing anti-competitive business practices. The Act was designed to build upon the Sherman Antitrust Act of 1890, which had proven inadequate in addressing certain forms of corporate behavior that undermined market fairness. Unlike the Sherman Act, which broadly prohibited monopolistic conduct, the Clayton Act identified specific practices as illegal when they substantially lessened competition or created a monopoly.
The law targeted interlocking directorates—situations where the same individuals served on the boards of competing companies—recognizing such arrangements as fertile ground for collusion. It also outlawed price discrimination that lessened competition, exclusive dealing contracts that restricted a buyer’s ability to purchase from competitors, and mergers or acquisitions that threatened market competition. Another critical provision banned tying agreements, where the sale of one product was conditioned on the purchase of another, potentially unrelated, product.
The Clayton Act was notable for providing more detailed guidance to businesses and regulators, reducing ambiguity that had plagued the enforcement of the Sherman Act. It also allowed for both government and private parties to seek injunctive relief and recover damages, increasing the avenues for challenging anti-competitive behavior. Importantly, labor unions and agricultural organizations were exempted from the Act’s provisions, a significant shift from previous antitrust enforcement that had often targeted labor as a “combination in restraint of trade.”
This legislative move reflected the progressive era’s push to check corporate power and protect consumers and smaller businesses from monopolistic abuses. The Federal Trade Commission Act, passed just weeks earlier, worked in tandem with the Clayton Act to provide an institutional mechanism—the FTC—for enforcement. Together, these laws marked a turning point in the federal government’s role in regulating the economy and ensuring competitive markets.
The U.S. Supreme Court will hear arguments today in a case challenging Louisiana’s congressional map, a dispute that could undermine Section 2 of the Voting Rights Act—a key provision prohibiting electoral practices that dilute minority voting power, even without direct evidence of racist intent. The controversy centers on Louisiana’s post-2020 redistricting, initially producing a map with only one Black-majority district despite Black residents comprising about a third of the state’s population. A federal judge sided with Black voters who challenged the map, prompting lawmakers to draw a new version adding a second Black-majority district.
That revision sparked a separate lawsuit from white voters who claimed the new map unfairly diminished their voting influence. A three-judge panel agreed, ruling the map relied too heavily on race and violated the Equal Protection Clause. The state, which had previously defended the redrawn map, has now reversed course and is urging the justices to bar race-conscious districting entirely.
This marks the second time the Court will hear arguments in the case this year, after sidestepping a decision in June. With its 6-3 conservative majority, the Court could issue a ruling that weakens Section 2, building on a 2013 decision that nullified another major part of the Voting Rights Act. However, a 2023 decision saw Chief Justice Roberts and Justice Kavanaugh side with liberals in upholding Section 2 in an Alabama case. The outcome could impact congressional control, with Democrats warning that as many as 19 districts could be redrawn if Section 2 is curtailed.
By way of brief background, Section 2 of the Voting Rights Act prohibits any voting practice or procedure that results in discrimination based on race, color, or membership in a language minority group. Originally passed in 1965 and strengthened by Congress in 1982, the provision allows voters to challenge laws that either deny the right to vote outright (“vote deprivation”) or weaken the effectiveness of their vote (“vote dilution”), even if no discriminatory intent can be proven. Courts reviewing Section 2 claims consider the totality of circumstances to determine whether minority voters have an equal opportunity to participate in elections and elect candidates of their choice. In redistricting cases, plaintiffs must show that minority voters are numerous and politically unified enough to elect a representative, and that white voters typically vote as a bloc to defeat them. The Supreme Court has clarified over time that states aren’t required to maximize minority districts, but race-based line drawing must strike a balance between avoiding racial discrimination and complying with equal protection principles. As other parts of the Voting Rights Act have been weakened, Section 2 has taken on even greater importance in protecting minority voting rights.
US Supreme Court to hear case that takes aim at Voting Rights Act | Reuters
Elon Musk’s $56 billion Tesla compensation package heads to the Delaware Supreme Court today, marking the final stage of a high-stakes corporate legal battle. A lower court struck down the record-setting pay plan in January 2024, ruling that Tesla’s board was not sufficiently independent and that shareholders lacked vital information when they approved the deal in 2018. Chancellor Kathaleen McCormick of the Delaware Court of Chancery found the award unfair and applied strict legal scrutiny, igniting criticism from business leaders who argue Delaware courts are increasingly hostile to entrepreneurs.
In response to the ruling, some companies—including Tesla—relocated their legal incorporation from Delaware to states like Texas and Nevada, where corporate governance laws are more lenient. This exodus, dubbed “Dexit,” prompted Delaware lawmakers to revise the state’s corporate statutes in an attempt to retain business charters.
Musk’s legal team contends that McCormick misapplied the law and ignored evidence that Tesla shareholders were fully informed when they approved the deal. They argue the board’s decision should have been reviewed under the more deferential “business judgment” standard. Despite the setback, Musk remains in line to receive billions under a replacement compensation plan approved in August, aimed at retaining him as Tesla shifts focus to robotics and autonomous technology.
Tesla’s board also proposed a $1 trillion future compensation framework, underscoring confidence in Musk’s leadership, even as the company faces slowing EV demand and stiff competition from China. The Delaware justices will also weigh whether Tesla must pay $345 million in legal fees to the shareholder who brought the lawsuit. The Court typically takes months to issue a decision.
Musk’s legal fight over $56 billion payday from Tesla enters final stage | Reuters
Australia’s High Court upheld the government’s decision to deny far-right U.S. commentator Candace Owens a visa, citing concerns that her presence could incite social discord. Owens had applied for a visa to conduct a speaking tour in late 2024, but Home Affairs Minister Tony Burke rejected the request, referencing her history of controversial remarks—including Holocaust denial and Islamophobic statements. Owens challenged the decision, arguing that it violated the implied freedom of political communication in Australia’s Constitution. The court unanimously disagreed, emphasizing that this freedom is not an absolute personal right and that the Migration Act’s restrictions served a legitimate purpose in safeguarding public order.
The judges found that Owens’ record of inflammatory commentary—touching on issues such as race, religion, gender, and public health—posed a significant risk of social division. The ruling also noted that denying her visa was consistent with protecting Australia’s national interest and social cohesion. As a result, Owens was ordered to pay the government’s legal costs.
Far-right US influencer Candace Owens loses legal fight to enter Australia | Reuters
A federal judge ruled that the Trump administration defied a prior court order by reintroducing nearly identical immigration-related conditions for states to receive FEMA emergency preparedness grants. Judge William Smith, based in Rhode Island, had previously struck down the original grant conditions, which required state cooperation with federal immigration enforcement. After his ruling, the Department of Homeland Security issued new grant documents with the same conditions, adding a clause that they would only take effect if the ruling was overturned. Smith rejected this workaround, stating that it was not a good faith attempt at compliance but a coercive tactic to pressure states into supporting federal immigration efforts.
He ordered the administration to remove the conditions by the following week, emphasizing that states should not be forced to choose between upholding their policies and losing critical disaster funding. The judge characterized the move as an unlawful effort to bully states, not a legitimate policy revision. DHS did not immediately comment on the ruling. The case is one of several legal challenges brought by Democratic-led states aimed at halting parts of Trump’s immigration agenda through the courts.
Trump administration flouted court order on FEMA grant funding, US judge rules | Reuters
