Wednesday, May 28, 2008, 1:11 PM

The Reshaping of Antitrust

Randy Picker of the University of Chicago Law School has posted a paper entitled "Twombly, Leegin and the Reshaping of Antitrust" on the SSRN website. The article looks at four antiturst cases from the Supreme Court's 2006 Term (Weyerhaeuser, Twombly, Leegin, and Credit Suisse), all of which have been discussed in this blog. Below are a few interesting quotes from the article:

The Court’s 2006 Term was an unusually active one for antitrust as the Court decided four substantial antitrust cases. Each of the cases will undoubtedly attract substantial academic attention. The overall direction of the four cases is reasonably clear: plaintiffs face greater regulatory obstacles to reaching the court system (Credit Suisse), are more likely to get tossed from court without reaching a jury once they get there (Twombly), and will have to work harder to make outsubstantive antitrust liability (Weyerhaeuser and Leegin).

...

Twombly and Leegin are each, in their own ways, blockbusters. Twombly will appear in case after case, as antitrust defendants try to rely on its new tougher rules for FRCP 12(b)(6) motions. Twombly represents a preference for blunt instruments over sharp edges. The central problem confronted by Twombly is discovery run amok. The Court has the tools in its hands to control that by rewriting the discovery
rules and overturning lower court decisions implementing those rules. Twombly suggests that the Court believes that refinement of those rules will fail in controlling discovery and it is willing to pay the price that private plaintiffs will have no good way to get at the best-hidden antitrust conspiracies.

...

Leegin is really a two-issue case: (1) as a matter of first consideration, should contractual minimum RPM be treated as per se illegal or should it instead receive rule-of-reason treatment?; and (2) if rule-of-reason treatment is appropriate, should the Court nonetheless adhere to the result of per se illegality established in Dr. Miles? On the first issue, the Court returned to 1628, the date of Coke upon Littleton, which Dr. Miles cited for the general proposition that restraints on alienation were invalid. The Court seemed skeptical that a nearly 300-year old analysis should have sufficed in 1911 and saw no basis for that nearly a century later (“[t]he general restraint onalienation … tended to evoke policy concerns extraneous to thequestion that controls here”). With the analysis in Dr. Miles itself pushed to the side, the Court then turned to a fresh consideration of the policies at stake in minimum resale price
maintenance. That took the Court to the defining feature of modern antitrust analysis, namely the role of economics in understanding how we should evaluate particular practices. As has been the Court’s pattern in other cases moving practices away from per se illegality and towards rule-of-reason analysis, the Court cited the extensive literature arguing that minimum RPM can have procompetitive benefits.

...

That is a question of stare decisis and Leegin ends up in an all-out fight
over stare decisis in antitrust. That is new: the Court has been overturning old decisions in antitrust for some time and has done so with little stare decisis fanfare. That suggests that the dispute over stare decisis in Leegin is just a convenient forum for the larger dispute over stare decisis that is percolating through a divided Court. I don't have a full-blown theory of stare decisis but I do suggest why the Court has been mistaken to treat stare decisis in statutory cases differently from that in constitutional cases. The Court has made too little of one of its critical tools in shaping statutes, namely, the power to set a default point for subsequent congressional action. Once we treat the Court's decisions as inputs in subsequent lawmaking, there is greater reason to think that the Court should have a uniform approach to stare decisis across the Constitution and statutes.

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