Law Commons^™

State Rejection Of Federal Law, Thomas B. Bennett

Faculty Publications

Sometimes the United States Supreme Court speaks, and states do not follow. For example, in 2003, the Arizona Supreme Court agreed to "reject" a decision of the U.S. Supreme Court, because no "sound reasons justif[ied] following" it. Similarly, in 2006, Michigan voters approved a ballot initiative that, according to the legislature that drafted it, sought "at the very least to freeze' the state's ... law to prevent" state courts from following a ruling of the U.S. Supreme Court. Surprising though this language may be, there is nothing nefarious about these cases. Cooper v. Aaron this is not. Unlike more notorious …

The Limits Of Antitrust In The 21st Century, Thomas A. Lambert

Faculty Publications

Antitrust is having a moment. Commentators and policymakers, both progressive and conservative, are calling for increased antitrust enforcement to address all manner of social ills. From technology platforms' power over speech and encroachments on user privacy to wage stagnation in more concentrated labor markets, to competition softening from ever-larger index funds, to growing income inequality, reduced innovation, and threats to democracy itself - the list of maladies for which antitrust has been proposed as a remedy goes on and on.

This Article revisits The Limits of Antitrust in light of the current antitrust moment. Part I describes the central components …

Specialty Drugs And The Health Care Cost Crisis, Sharona Hoffman, Isaac D. Buck

Faculty Publications

Specialty drugs, often dispensed by specialty pharmacies, are among the most expensive drugs on the market. They are significant contributors to the American health care cost problem, but in many ways they escape public and regulatory scrutiny. Surprisingly, medications are designated as specialty drugs by pharmacy benefit managers (PBMs), entities that are part of the insurance industry, rather than by the Food and Drug Administration or medical authorities.

Specialty drugs have thus far received little attention in the legal literature. Yet, they raise important legal and regulatory questions. For example, there are no federal government rules (and only a handful …

Evidence-Based Lawyer Regulation, Elizabeth Chambliss

Faculty Publications

The legal profession is losing its authority over the regulation of legal services. Recent changes in antitrust law have put state bar associations under a spotlight. Competition from technology companies and concerns about access to justice have increased political pressure for market liberalization. Independent research is challenging the unique value of lawyers’ services, even in formal legal proceedings, and this research is increasingly well-organized and well-funded at the national level. The organized bar is asleep at the wheel and ill-prepared to respond.

This Article argues that the United States is moving toward evidence-based lawyer regulation, and suggests strategies for equipping …

The "Evergreening" Metaphor In Intellectual Property Scholarship, Erika Lietzan

Faculty Publications

This article is a plea for changes in the scholarly dialogue about "evergreening" by drug companies. Allegations that drug companies engage in "evergreening" are pervasive in legal scholarship, economic scholarship, medical and health policy scholarship, and policy writing, and they have prompted significant policymaking proposals. This Article was motivated by concern that the metaphor has not been fully explained and that policymaking in response might therefore be premature. It canvasses and assesses the scholarly literature-more than 300 articles discussing or mentioning "evergreening." It catalogues the definitions, the examples, and the empirical studies. Scholars use the term when describing certain actions …

Calm Down About Common Ownership, Thom Lambert, Michael E. Sykuta

Faculty Publications

Proponents of additional antitrust intervention to police common ownership simply have not made their case. Their theory as to why current levels of intra-industry diversification would cause consumer harm is implausible and the empirical evidence they say demonstrates such harm is both scant and methodologically suspect. The policy solutions they have proposed for dealing with the purported problem would radically rework an industry that has provided substantial benefits to investors, raising the costs of portfolio diversification and enhancing agency costs at public companies. Courts and antitrust enforcers should reject their calls for additional antitrust intervention to police common ownership.

Matsushita At Thirty: Has The Pendulum Swung Too Far In Favor Of Summary Judgment?, Edward D. Cavanagh

Faculty Publications

(Excerpt)

The Supreme Court's ruling in Matsushita Electric Industrial Co. v. Zenith Radio Corp. marked the end of judicial hostility to Rule 56 motions and effectively legitimized the use of summary judgment in antitrust cases. The 5-4 decision dramatically altered the antitrust litigation landscape both procedurally and substantively. Procedurally, the decision underscored the trans-substantive nature of summary judgment, making clear that summary judgment is as appropriate in complex antitrust cases as in any other area of the law. Matsushita also made clear that the legal standards for summary judgment mirror the legal standards for directed verdict at trial. In …

A Solution In Search Of A Problem At The Biologics Frontier, Erika Lietzan

Faculty Publications

This short paper comments on Professor Carrier's new article, Biologics: The New Antitrust Frontier. His article makes a profound initial contribution to a new area of scholarship, based on a large body of prior work considering antitrust issues relating to small molecule drugs. But Professor Carrier’s article, like my own forthcoming piece on innovation and competition in the biologics marketplace, is inherently speculative. We are making our best judgments about the nature of a still emerging marketplace and likely conduct in that marketplace, based on our understandings of a new regulatory framework that is itself still emerging, the broader legal …

Why And How The Supreme Court Should Have Decided O’Bannon V Ncaa, Matthew J. Mitten

Faculty Publications

Despite requests by both parties, the United States Supreme Court refused to grant a writ of certiorari in O’Bannon v. NCAA, the first federal appellate court decision holding that an NCAA student-athlete eligibility rule violates section 1 of the Sherman Act. The Ninth Circuit ruled that NCAA rules prohibiting intercollegiate athletes from receiving any revenue from videogames and telecasts incorporating their names, images, or likenesses unreasonably restrain economic competition among its member universities in the college education market in which these athletes purchase higher education services and sell their athletic services, which violates federal antitrust law. Circuit court rulings …

The Uncharted Waters Of Competition And Innovation In Biological Medicines, Erika Lietzan

Faculty Publications

In 2010, Congress fundamentally changed how federal law encourages the discovery and development of certain new medicines and for the first time authorized less expensive “duplicates” of these medicines to be approved and compete in the marketplace. The medicines at issue are biological medicines, generally made from, or grown in, living systems. Many of the world’s most important and most expensive medicines for serious and life–threatening diseases are biological medicines.

We have a profound interest in understanding and evaluating the impact of this legislation on innovation and competition. Scholars and courts considering this question may be tempted to reason from, …

The Law Of 180-Day Exclusivity, Erika Lietzan, Julia Post

Faculty Publications

In 1984, Congress created a statutory pathway for approval of generic drug applications and included an incentive for generic applicants to challenge the patents claiming the reference drugs on which they based their applications. The first generic applicant to file an ANDA with a patent challenge is eligible for 180 days of generic market exclusivity. This article is the fourth in a series of articles describing the resulting body of law, as interpreted and applied by FDA (in regulations, guidances, citizen petition responses, and individual decisions awarding and denying exclusivity) and the courts. The heart of the article is section …

Recognizing The Limits Of Antitrust: The Roberts Court Versus The Enforcement Agencies, Thom Lambert, Alden F. Abbott

Faculty Publications

In his seminal 1984 article, The Limits of Antitrust, Judge Frank Easterbrook proposed that courts and enforcers adopt a simple set of screening rules for application in antitrust cases, in order to minimize error and decision costs and thereby maximize antitrust's social value. Over time, federal courts in general, and the U.S. Supreme Court in particular, under Chief Justice Roberts have in substantial part adopted Easterbrook's "limits of antitrust" approach, thereby helping to reduce costly antitrust uncertainty. Recently, however, antitrust enforcers in the Obama Administration (unlike their predecessors in the Reagan, Bush, and Clinton Administrations) have been less attuned to …

Antitrust Federalism And State Restraints Of Interstate Commerce: An Essay For Herbert Hovenkamp, Alan J. Meese

Faculty Publications

No abstract provided.

Defining Unreasonably Exclusionary Conduct: The 'Exclusion Of A Competitive Rival' Approach, Thom Lambert

Faculty Publications

Unreasonably exclusionary conduct, the element common to monopolization and attempted monopolization offenses under Section 2 of the Sherman Act, remains essentially undefined. Federal courts, including the U.S. Supreme Court, have purported to define the term, but the definitions they have offered are so indeterminate as to be, in the words of one prominent commentator, “not just vague but vacuous.” Seeking to fill the void left by the courts, antitrust scholars have in recent years proposed four universal definitions of unreasonably exclusionary conduct. Each, however, is deficient: One would fail to deter a substantial amount of anticompetitive conduct, and the other …

Antitrust Law And Economic Theory: Finding A Balance, Edward D. Cavanagh

Faculty Publications

Over the past forty years, the federal courts have relied more and more on economic theory to inform their antitrust analyses. Economic theory has indeed provided guidance with respect to antitrust issues and assisted the courts in reaching rational outcomes. At the same time, infusion of economic evidence into antitrust cases has made these cases more complex, lengthier, more expensive to litigate, and less predictable.

This Article argues that courts need to restore the balance between facts and economic theory in undertaking antitrust analysis. The problem is not that judges and juries cannot reach good outcomes in antitrust cases, but …

Section 2 Enforcement And The Great Recession: Why Less (Enforcement) Might Mean More (Gdp), Alan J. Meese

Faculty Publications

The Great Recession has provoked calls for more vigorous regulation in all sectors, including antitrust enforcement. After President Obama took office, the Antitrust Division of the Department of Justice abandoned the Bush Administration’s standard of liability under section 2 of the Sherman Act, which forbids unlawful monopolization, as insufficiently interventionist. Based on the premise that similarly lax antitrust enforcement caused and deepened the Great Depression, the Obama Administration outlined a more intrusive and consumer-focused approach to section 2 enforcement as part of a larger national strategy to combat the “extreme” economic crisis the nation was then facing.

This Essay draws …

Making Sense Of Twombly, Edward D. Cavanagh

Faculty Publications

(Excerpt)

In May 2007, the United States Supreme Court decided Bell Atlantic Corp. v. Twombly and sent shockwaves throughout the federal civil justice system. Reversing the Second Circuit, the Court held that an antitrust complaint that alleged mere parallel behavior among rival telecommunications companies, coupled with stray averments of agreement that amounted merely to legal conclusions, failed as a matter of law to state a claim for conspiracy in violation of § 1 of the Sherman Act and had been properly dismissed by the trial court. The Court then proceeded to (1) redefine the concept of notice pleading by "retiring" …

Appropriate Liability Rules For Tying And Bundled Discounting, Thom Lambert

Faculty Publications

This article asserts a comprehensive response to Elhauge’s provocative arguments. With respect to tying, the article shows that governing Supreme Court precedent does not deem the non-foreclosure “power” effects of the practice to be anticompetitive and that those effects are unlikely to reduce social welfare in the long run, especially after accounting for dynamic efficiencies. With respect to bundled discounting, the article shows that Elhauge’s proposed liability rule is both inapposite to consumer harm and inadministrable and that both “linked” market foreclosure and a form of below-cost pricing are necessary for anticompetitive harm and should therefore be prerequisites to antitrust …

Revisiting Search Engine Bias, Eric Goldman

Faculty Publications

Questions about search engine bias have percolated in the academic literature for over a decade. In the past few years, the issue has evolved from a quiet academic debate to a full-blown regulatory and litigation frenzy. At the center of this maelstrom is Google, the dominant market player.

This Essay looks at changes in the industry and political environment over the past half-dozen years that have contributed to the current situation. This essay supplements my prior contribution to the literature, a 2006 essay entitled Search Engine Bias and the Demise of Search Engine Utopianism.

The Roberts Court And The Limits Of Antitrust, Thom Lambert

Faculty Publications

This article first describes the fundamental limits of antitrust and the decision-theoretic approach such limits inspire. It then analyzes the Roberts Court’s antitrust decisions, explaining how each coheres with the decision-theoretic model. Finally, it predicts how the Court will address three issues likely to come before it in the future: tying, loyalty rebates, and bundled discounts.

Book Review: Reviewing Part Iii Of Innovation For The 21st Century: Harnessing The Power Of Intellectual Property And Antitrust Law, Dennis D. Crouch

Faculty Publications

I have very much enjoyed reading Professor Michael Carrier's important new book on the intersection of law and innovation, and greatly appreciate his contributions to the field. In this short essay, I will focus my discussion on my sole area of expertise—patent law. Carrier takes-on the subject of patents in Part III of his book. I agree with most of what Carrier writes. To make this essay more interesting, I focus on some of our areas of apparent disagreement.

Debunking The Purchaser Welfare Account Of Section 2 Of The Sherman Act: How Harvard Brought Us A Total Welfare Standard And Why We Should Keep It, Alan J. Meese

Faculty Publications

The last several years have seen a vigorous debate among antitrust scholars and practitionersa bout the appropriates tandardf or evaluating the conduct of monopolists under section 2 of the Sherman Act. While most of the debate over possible standards has focused on the empirical question of each standard's economic utility, this Article undertakes a somewhat different task: It examines the normative benchmark that courts have actually chosen when adjudicating section 2 cases. This Article explores three possible benchmarks-producer welfare, purchaser welfare, and total welfare-and concludes that courts have opted for a total welfare normative approach to section 2 since the …

The Private Antitrust Remedy: Lessons From The American Experience, Edward D. Cavanagh

Faculty Publications

(Excerpt)

The treble damage remedy has been a centerpiece of private antitrust enforcement since the enactment of the Sherman Act in 1890. Aware that government resources were limited, Congress created the private right of action as a complement to public enforcement to assure the detection and prosecution of antitrust offenders. The private right of action has proven to be a very potent weapon in the civil enforcement arsenal. It is the very potency of the private remedy, however, that has made the private right of action a target of criticism by defendants and, more recently, the courts. Indeed, in the …

A Decision-Theoretic Rule Of Reason For Minimum Resale Price Maintenance, Thom Lambert

Faculty Publications

This article evaluates these approaches from the perspective of decision theory and, finding each lacking, proposes an alternative approach to structuring the rule of reason governing RPM. Part II sets forth the decision-theoretic perspective, which seeks to maximize the net benefits of liability rules by minimizing the sum of decision and error costs. Part III then evaluates, from the standpoint of decision theory, the proposed approaches to evaluating instances of RPM. Part IV proposes an alternative evaluative approach that is more consistent with decision theory’s insights.

Plurality Of Political Opinion And The Concentration Of Media In The United States, William B. Fisch

Faculty Publications

This paper reviews regulatory efforts of the U.S. federal govern- ment to promote viewpoint diversity in broadcast media (radio, television, cable, and satellite) in the face of increasing concentration of ownership of such media, and the impact on such efforts of the free- doms of speech and press embodied in the First Amendment to the federal constitution. With respect to this issue, the regulatory work has been done overwhelmingly by the Federal Communications Commis- sion, operating under an act of Congress which has been amended from time to time to push the FCC in particular directions. The anti- trust laws …

Dr. Miles Is Dead. Now What?: Structuring A Rule Of Reason For Minimum Resale Price Maintenance, Thom Lambert

Faculty Publications

This article critiques six approaches that have been proposed for evaluating minimum RPM and offers an alternative approach. The six approaches critiqued are (1) the Brandeisian, unstructured rule of reason; (2) Judge Posner's rule of per se legality; (3) the approach advocated by 27 states in the recent Nine West case; (4) the approach adopted by the Federal Trade Commission in that case; (5) the approach advocated by economists William Comanor and F.M. Scherer; and (6) the approach proposed in the Areeda & Hovenkamp Antitrust Law treatise. Finding each of these approaches deficient, the article proposes an alternative evaluative approach …

Are Issuers Of And Dealers In Securities Immune From Lawsuits Arising Under Federal And State Antitrust Laws?, Hannibal Travis

Faculty Publications

Conduct potentially subject to regulatory scrutiny by federal agencies such as the Securities Exchange Commission (SEC) is not necessarily immune from antitrust liability. The Supreme Court previously held that an anticompetitive conspiracy in the mutual fund industry was immune from antitrust liability because the SEC had the primary statutory authority to prohibit or permit such conspiracies. This case raises the question of whether another alleged conspiracy—to restrict the availability of certain initial public offerings of securities (IPOs)—is similarly immune.

Conservation Cartels: How Competition Policy Conflicts With Environmental Protection, Jonathan H. Adler

Faculty Publications

The alleged purpose of antitrust law is to improve consumer welfare by proscribing actions and arrangements that reduce output and increase prices. Conservation seeks to improve human welfare by maximizing the long-term productive use of natural resources, a goal that often requires limiting consumption to sustainable levels. While conservation measures might increase prices in the short run, they enhance consumer welfare by increasing long-term production and ensuring the availability of valued resources over time. That is true whether the restrictions are imposed by a private conservation cartel or a government agency. Insofar as antitrust law fails to take this into …

Tweaking Antitrust's Business Model , Thom Lambert

Faculty Publications

This essay evaluates Hovenkamp's suggestions, concluding that most are sound, that a few might be slightly revised to enhance their effectiveness or administrability, and that a couple are downright unwise. In particular, the essay criticizes Hovenkamp's call for abandonment of the indirect purchaser rule and his proposed test for identifying exclusionary conduct under Section 2 of the Sherman Act.

The 'Failure To Mitigate' Defense In Antitrust, Thom Lambert

Faculty Publications

The article begins with the premise that any failure to mitigate defense should aim to minimize the sum of three costs: the costs associated with inefficient behavior by defendants, the costs associated with inefficient behavior by plaintiffs, and the administrative costs of claim adjudication. If cost minimization is the goal, then whether a failure to mitigate defense exists, and the content of the antitrust plaintiff’s mitigation requirement, should differ depending on the type of damages the plaintiff is seeking to recover. The bulk of this article discusses how the defense should apply to different damages claims.The article proceeds as follows: …