Supreme Court of the United States Commons^™

Tying Law For The Digital Age, Daniel A. Crane

Articles

Tying arrangements, a central concern of antitrust policy since the early days of the Sherman and Clayton Acts, have come into renewed focus with re-spect to the practices of dominant technology companies. Unfortunately, tying law’s doctrinal structure is a self-contradictory and incoherent wreck. A con-ventional view holds that this mess is due to errant Supreme Court precedents, never fully corrected, that expressed hostility to tying based on faulty economic understanding. That is only part of the story. Examination of tying law’s origins and development shows that tying doctrine was built on a now-dated paradigm of what constitutes a tying arrangement. …

Jurisdiction Beyond Our Borders: United States V. Alcoa And The Extraterritorial Reach Of American Antitrust, 1909–1945, Laura Phillips Sawyer

Scholarly Works

Chapter in the book Antimonopoly and American Democracy by Daniel A. Crane and William J. Novak, eds., Oxford University Press, 2023.

In 1945, Judge Learned Hand wrote one of the most influential opinions in modern antitrust law. In declaring that the Aluminum Company of America (Alcoa) had illegally monopolized the industry for virgin aluminum and had participated in an illegal international cartel, Hand both revived and extended American antitrust law. The ruling is famous for several reasons: it narrowly defined the relevant market in favor of the government; it expanded the category of impermissible dominant firm conduct; it interpreted congressional …

Bibb Balancing: Regulatory Mismatches Under The Dormant Commerce Clause, Michael S. Knoll

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Courts and commentators have long understood dormant Commerce Clause doctrine to contain two types of cases: discrimination and undue burdens. This Article argues for a more nuanced understanding that divides undue burdens into single-state burdens—which arise from the application of a single state’s law alone—and mismatch burdens, which arise from legal diversity. Although the Supreme Court purports to apply Pike balancing in all undue-burden cases, we show that the Court’s approach in mismatch cases differs substantially. Specifically, unlike in single-state cases, balancing in mismatch cases involves an implicit and potentially problematic comparison by the Court between the challenged state’s regulation …

The Summary Judgment Revolution That Wasn't, Jonathan R. Nash, D. Daniel Sokol

Faculty Articles

The U.S. Supreme Court decided a trilogy of cases on summary judgment in 1986. Questions remain as to how much effect these cases have had on judicial decision-making in terms of wins and losses for plaintiffs. Shifts in wins, losses, and what cases get to decisions on the merits impact access to justice. We assemble novel datasets to examine this question empirically in three areas of law that are more likely to respond to shifts in the standard for summary judgment: antitrust, securities regulation, and civil rights. We find that the Supreme Court’s decisions had a statistically significant effect in …

A Miser’S Rule Of Reason: The Supreme Court And Antitrust Limits On Student Athlete Compensation, Herbert J. Hovenkamp

All Faculty Scholarship

The unanimous Supreme Court decision in NCAA v. Alston is its most important probe of antitrust’s rule of reason in decades. The decision implicates several issues, including the role of antitrust in labor markets, how antitrust applies to institutions that have an educational mission as well as involvement in a large commercial enterprise, and how much leeway district courts should have in creating decrees that contemplate ongoing administration.

The Court accepted what has come to be the accepted framework: the plaintiff must make out a prima facie case of competitive harm. Then the burden shifts to the defendant to produce …

Will The Supreme Court Recover Its Own Fumble? How Alston Can Repair The Damage Resulting From Ncaa's Sports League Exemption, Alan J. Meese

Faculty Publications

Horizontal restraints are unlawful per se unless a court can identify some redeeming virtue that such restraints may create. In National Collegiate Athletic Association v. Board of Regents of the University of Oklahoma (“NCAA”), the Supreme Court rejected this standard, refusing to condemn horizontal restraints on price and output imposed by the NCAA without specifying any possible redeeming virtues. The Court emphasized that other restraints not before the Court were necessary to create and maintain athletic competition like that supervised by the NCAA. This exemption for sports leagues ensures that all restraints imposed by such entities merit Rule …

Requiem For A Lightweight: How Ncaa Continues To Distort Antitrust Doctrine, Alan J. Meese

Faculty Publications

The Supreme Court speaks rarely about the meaning of the Sherman Act. When the Court does speak, its pronouncements have particular resonance and staying power among jurists, scholars, and enforcers. NCAA v. Board of Regents of the University of Oklahoma was such a case. There the Court assessed agreements reducing the output and increasing the prices of televised college football games. After announcing that restraints imposed by sports leagues are exempt from per se condemnation, the Court went on to invalidate the challenged agreements under the rule of reason because they produced significant economic harm without offsetting benefits. In so …

Equitable Defenses In Patent Law, Christa J. Laser

Law Faculty Articles and Essays

In patent law, “unenforceability” can have immense consequences. At least five equitable doctrines make up the defense of “unenforceability” as it was codified into the Patent Act in 1952: laches; estoppel; unclean hands; patent misuse; and according to some, inequitable conduct. Yet in the seventy years since incorporation of equitable defenses into the patent statute, the Supreme Court has not clarified their reach. Indeed, twice in the last four years, the Supreme Court avoided giving complete guidance on the crucial questions of whether, and when, such equitable defenses are available to bar damages in cases brought at law.

Several interpretive …

Platforms And The Rule Of Reason: The American Express Case, Herbert J. Hovenkamp

All Faculty Scholarship

In Ohio v. American Express Co., the Supreme Court applied antitrust’s rule of reason to a two-sided platform. The challenge was to an “anti-steering” rule, a vertical restraint preventing merchants from shifting customers who offered an AmEx card from to a less costly alternative such as Visa or Mastercard.

A two-sided platform is a business that depends on relationships between two different, noncompeting groups of transaction partners. For example, a printed periodical such as a newspaper earns revenue by selling both advertising and subscriptions to the paper itself. Success depends on a platform’s ability to maintain the appropriate balance …

Prophylactic Merger Policy, Herbert J. Hovenkamp

All Faculty Scholarship

An important purpose of the antitrust merger law is to arrest certain anticompetitive practices or outcomes in their “incipiency.” Many Clayton Act decisions involving both mergers and other practices had recognized the idea as early as the 1920s. In Brown Shoe the Supreme Court doubled down on the idea, attributing to Congress a concern about a “rising tide of economic concentration” that must be halted “at its outset and before it gathered momentum.” The Supreme Court did not explain why an incipiency test was needed to address this particular problem. Once structural thresholds for identifying problematic mergers are identified there …

The Lottery Docket, Daniel Epps, William Ortman

Law Faculty Research Publications

No abstract provided.

Beyond Brooke Group: Bringing Reality To The Law Of Predatory Pricing, C. Scott Hemphill, Philip J. Weiser

Publications

This Feature offers a roadmap for bringing and deciding predatory pricing cases under the Supreme Court’s restrictive Brooke Group decision. Brooke Group requires a plaintiff to show that the defendant set a price below cost and had a sufficient likelihood of recouping its investment in predation. This framework, which was adopted without any contested presentation of its merits, has endured despite its flaws. Beyond this framework, the Court opined in dicta that predation is implausible.

We identify points of flexibility within the Court’s framework that permit an empirically grounded evaluation of the predation claim. Under the price-cost test, a plaintiff …

The Proposed Separation Of Powers Restoration Act Goes Too Far, Jack M. Beermann

Shorter Faculty Works

If passed, the Separation of Powers Restoration Act would require federal courts conducting judicial review of agency action to decide “de novo all relevant questions of law, including the interpretation of constitutional and statutory provisions and rules.” Although I have long been highly critical of Chevron, see, e.g., Jack M. Beermann, End the Failed Chevron Experiment Now: How Chevron Has Failed and Why It Can and Should be Overruled, 42 Conn. L. Rev. 9 (2010), and also have misgivings about Auer deference, I fear that the proposed Act goes too far in completely eliminating deference to agency legal determinations.

Inside The Taft Court: Lessons From The Docket Books, Barry Cushman

Journal Articles

For many years, the docket books kept by certain of the Taft Court Justices have been held by the Office of the Curator of the Supreme Court. Though the existence of these docket books had been brought to the attention of the scholarly community, access to them was highly restricted. In April of 2014, however, the Court adopted new guidelines designed to increase access to the docket books for researchers. This article offers a report and analysis based on a review of all of the Taft Court docket books held by the Office of the Curator, which are the only …

Balancing Effects Across Markets, Daniel A. Crane

Articles

In Philadelphia National Bank (PNB), the Supreme Court held that it is improper to weigh a merger's procompetitive effects in one market against the merger's anticompetitive effects in another. The merger in question, which ostensibly reduced retail competition in the Philadelphia area, could not be justified on the grounds that it increased competition against New York banks and hence perhaps enhanced competition in business banking in the mid-Atlantic region. I will refer to the Supreme Court's prohibition on balancing effects across markets as a "market-specificity" rule. Under this rule, efficiencies that may counterbalance anticompetitive aspects must be specific to …

Market Power Without Market Definition, Daniel A. Crane

Articles

Antitrust law has traditionally required proof of market power in most cases and has analyzed market power through a market definition/market share lens. In recent years, this indirect or structural approach to proving market power has come under attack as misguided in practice and intellectually incoherent. If market definition collapses in the courts and antitrust agencies, as it seems poised to do, this will rupture antitrust analysis and create urgent pressures for an alternative approach to proving market power through direct evidence. None of the leading theoretic approaches—such as the Lerner Index or a search for supracompetitive profits—provides a robust …

The Tempting Of Antitrust: Robert Bork And The Goals Of Antitrust Policy, Daniel A. Crane

Articles

Of all Robert Bork’s many important contributions to antitrust law, none was more significant than his identification of economic efficiency, disguised as consumer welfare, as the sole normative objective of U.S. antitrust law. The Supreme Court relied primarily on Bork’s argument that Congress intended the Sherman Act to advance consumer welfare in making its landmark statement in Reiter v. Sonotone that “Congress designed the Sherman Act as a ‘consumer welfare prescription.’” This singular normative vision proved foundational to the reorientation of antitrust law away from an interventionist, populist, Brandeisian, and vaguely Jeffersonian conception of antitrust law as a constraint on …

Actavis, The Reverse Payment Fallacy, And The Continuing Need For Regulatory Solutions, Daniel A. Crane

Articles

The Actavis decision punted more than it decided. Although narrowing the range of possible outcomes by rejecting the legal rules at the extremes and opting for a rule of reason middle ground, the opinion failed to grapple with the most challenging issues of regulatory policy raised by pharmaceutical patent settlements. In particular, it failed to clearly delineate the social costs of permitting and disallowing patent settlements, avoided grappling with the crucial issues of patent validity and infringement, and erroneously focused on “reverse payments” as a distinctive antitrust problem when equally or more anticompetitive settlements can be crafted without reverse payments. …

Post-Sale And Related Distribution Restraints Involving Ip Rights, Herbert J. Hovenkamp

All Faculty Scholarship

This book of CASES AND MATERIALS ON INNOVATION AND COMPETITION POLICY is intended for educational use. The book is free for all to use subject to an open source license agreement. It differs from IP/antitrust casebooks in that it considers numerous sources of competition policy in addition to antitrust, including those that emanate from the intellectual property laws themselves, and also related issues such as the relationship between market structure and innovation, the competitive consequences of regulatory rules governing technology competition such as net neutrality and interconnection, misuse, the first sale doctrine, and the Digital Millennium Copyright Act (DMCA). Chapters …

"The Magna Carta Of Free Enterprise" Really?" , Daniel A. Crane

Articles

In U.S. v. Topco Associates, Inc., Justice Thurgood Marshall announced that "[a] ntitrust laws in general, and the Sherman Act in particular, are the Magna Carta of free enterprise.", In The Antitrust Constitution, Thomas Nachbar takes seriously the idea that federal antitrust laws serve a constitutional function. He argues that, contrary to common assumptions, the antitrust laws cannot be understood merely as a form of economic utilitarianism. Rather, they serve the additional purpose of preventing "regulatory harm," the assertion of law-like control over the conduct of others outside the sphere of one's own property interests.

Antitrust And The Judicial Virtues, Daniel A. Crane

Articles

Although commentators frequently debate how judges should decide antitrust cases substantively, little attention has been paid to theories of judicial virtue in antitrust decision making. This essay considers four pairings of virtues: (1) striving for substantive purity versus conceding to institutional realism; (2) incrementalism versus generalism; (3) presenting a unified face versus candidly conceding differences among judges on an appellate panel; and (4) adhering strictly to stare decisis versus freely updating precedents to reflect evolving economic learning or conditions. While recognizing the complexities that sometimes pull judges in the opposite direction, this Article gives the nod to institutional realism, incrementalism, …

Antitrust’S State Action Doctrine And The Ordinary Powers Of Corporations, Herbert J. Hovenkamp

All Faculty Scholarship

The Supreme Court has now agreed to review the Eleventh Circuit's decision in Phoebe-Putney, which held that a state statute permitting a hospital authority to acquire hospitals implicitly authorized such acquisitions when they were anticompetitive – in this particular case very likely facilitating a merger to monopoly. Under antitrust law’s “state action” doctrine a state may in fact authorize such an acquisition, provided that it “clearly articulates” its desire to approve an action that would otherwise constitute an antitrust violation and also “actively supervises” any private conduct that might fall under the state’s regulatory scheme.

“Authorization” in the context of …

A Neo-Chicago Perspective On Antitrust Institutions, Daniel A. Crane

Articles

It has long been fashionable to categorize antitrust by its "schools." From the Sherman Act's passage to World War II, there were (at least) neo-classical marginalism, populism, progressivism, associationalism, business commonwealthism, and Brandeisianism. From World War II to the present, we have seen (at least, and without counting the European Ordo-Liberals) PaleoHarvard structuralism, the Chicago School, Neo-Harvard institutionalism, and Post -Chicagoans. So why not Neo-Chicago? I am already on record as suggesting the possible emergence of such a school, so it is too late for me to dismiss the entire "schools" conversation as window-dressing. This Symposium is dedicated to defining …

Antitrust And The Movement Of Technology, Herbert J. Hovenkamp

All Faculty Scholarship

Patents create strong incentives for collaborative development. For many technologies fixed costs are extremely high in relation to variable costs. A second feature of technology that encourages collaborative development is the need for interoperability or common standards. Third, in contrast to traditional commons, intellectual property commons are almost always nonrivalrous on the supply side. If ten producers all own the rights to make a product covered by a patent, each one can make as many units as it pleases without limiting the number that others can make. That might seem to be a good thing, but considered ex ante it …

Markets In Merger Analysis, Herbert J. Hovenkamp

All Faculty Scholarship

Antitrust merger policy suffers from a disconnect between its articulated concerns and the methodologies it employs. The Supreme Court has largely abandoned the field of horizontal merger analysis, leaving us with ancient decisions that have never been overruled but whose fundamental approach has been ignored or discredited. As a result the case law reflects the structuralism of a bygone era, focusing on industrial concentration and market shares, largely to the exclusion of other measures of competitive harm, including price increases. Only within the last generation has econometrics developed useful techniques for estimating the price impact of specific mergers in differentiated …

Antitrust's "Jurisdictional" Reach Abroad, Herbert J. Hovenkamp

All Faculty Scholarship

In its Arbaugh decision the Supreme Court insisted that a federal statute’s limitation on reach be regarded as “jurisdictional” only if the legislature was clear that this is what it had in mind. The Foreign Trade Antitrust Improvement Act (FTAIA) presents a puzzle in this regard, because Congress seems to have been quite clear about what it had in mind; it simply failed to use the correct set of buzzwords in the statute itself, and well before Arbaugh assessed this requirement.

Even if the FTAIA is to be regarded as non-jurisdictional, the constitutional extraterritorial reach of the Sherman Act is …

The Firm As Cartel Manager, Herbert J. Hovenkamp, Christopher R. Leslie

All Faculty Scholarship

Antitrust law is the primary legal obstacle to price fixing, which is condemned by Section 1 of the Sherman Act. Firms that engage in price fixing may try to reduce their probability of antitrust liability in a number of ways. First, members of a price-fixing conspiracy go to great lengths to conceal their illegal activities from antitrust enforcers. Second, because Section 1 condemns only concerted action, firms may structure their relationship to appear to be the action of a single entity that is beyond the reach of Section One.

In its American Needle decision the Supreme Court held that the …

Resale Price Maintenance: Consignment Agreements, Copyrighted Or Patented Products And The First Sale Doctrine, Herbert J. Hovenkamp

All Faculty Scholarship

The rule of reason adopted for resale price maintenance in the Supreme Court’s Leegin decision, which upset the century old Dr. Miles rule of per se illegality, requires some reconsideration of a number of issues about antitrust treatment of RPM. Under the old per se rule, bona fide “consignment” agreements were not covered by Section 1 of the Sherman Act at all because there was said to be no qualifying “agreement” between the supplier and the dealer. Rather the dealer was simply said to be acting as an agent of the seller. However, insofar as RPM produces competitive dangers, such …

American Needle And The Boundaries Of The Firm In Antitrust Law, Herbert J. Hovenkamp

All Faculty Scholarship

In American Needle the Supreme Court unanimously held that for the practice at issue the NFL should be treated as a “combination” of its teams rather than a single entity. However, the arrangement must be assessed under the rule of reason. The opinion, written by Justice Stevens, was almost certainly his last opinion for the Court in an antitrust case; Justice Stevens had been a dissenter in the Supreme Court’s Copperweld decision 25 years earlier, which held that a parent corporation and its wholly owned subsidiary constituted a single “firm” for antitrust purposes. The Sherman Act speaks to this issue …

American Needle: The Sherman Act, Conspiracy, And Exclusion, Herbert J. Hovenkamp

All Faculty Scholarship

This essay, part of a colloquium in the CPI Antitrust Journal, explores the meaning and significance of the Supreme Court’s decision in American Needle v. NFL. The Supreme Court held that for purposes of the dispute at hand the NFL should be treated as a collaboration of its member teams rather than a single entity. The factors that the Supreme Court considered most important were, first, that the NFL’s member teams are individually owned profit making entities who compete with each other in at least some economic markets, such as that for the sale of apparel bearing NFL symbols. …