Law Commons^™

Why Do Corporations Merge And Why Should Law Care?, Chris Sagers

Law Faculty Articles and Essays

Mergers and acquisitions are extraordinarily prevalent in the United States, generating massive expenditures every year. However, a serious empirical puzzle lies at the heart of all that activity. That empirical phenomenon's most remarkable feature by far is that even though it is well established in an extensive literature and implies far-reaching policy consequences, American law ignores it entirely.

Generations of researchers have failed to find evidence that merger and acquisition activity generates any lasting benefits for the combining firms' owners or anyone else. No one seriously doubts that efficiencies of scale or technological integration are real or that acquisitions sometimes …

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 …

Coty, Amazon, And The Future Of Vertical Restraints: Evolving Distribution Norms On Both Atlantic Shores, Chris Sagers

Law Faculty Articles and Essays

No abstract provided.

Platforms, American Express, And The Problem Of Complexity In Antitrust, Chris Sagers

Law Faculty Articles and Essays

Everything about Ohio v. American Express was wrong and the adoption of “two-sided platform” reasoning into American antitrust law might be one of its worst, most regrettable wrong turns in decades. That is not because the original theoretical model of two-sided interaction has anything wrong with it at all. It is rather that nothing could be gained by incorporating it that could be worth the result in the American Express case itself, or the difficulty that has likely been invited into antitrust litigation. The consequences are hard to predict, but they may be severely limiting to our already moribund antitrust …

Clarifications And Gratitude, Chris Sagers

Law Faculty Articles and Essays

Certain things in this book plainly require clarification to avoid misunderstanding. In fact, I think this little discussion was among three people who mostly agree with each other, except that the reviewers may not have known it because I failed to explain myself well enough. Because I didn't, they mostly didn't discuss what I always intended to be the book's real contribution and its most interesting material.

I start out in Part I by trying to restate what I see as the problem that is the book's only immediate concern. That restatement is a first draft for how I will …

#Lolnothingmatters, Chris Sagers

Law Faculty Articles and Essays

Institutions matter in antitrust, at least as much as ideas. Most antitrust arguments, and especially the contretemps currently enjoying some attention in the popular press, imagine that antitrust problems are short- or medium-term matters, and that they can be corrected with local doctrinal steps. I suggest there is a deeper problem, a phenomenon more deeply inherent in the nature of competition itself. The problem will cyclically recur, so long as institutional brakes are unavailable to keep it at bay. Specifically, it seems that competitive markets are difficult to preserve without some prospective, no-fault rule to control concentration for its own …

O’Bannon V. National Collegiate Athletic Association: Why The Ninth Circuit Should Not Block The Floodgates Of Change In College Athletics, Christopher Sagers, Michael A. Carrier

Law Faculty Articles and Essays

In O’Bannon v. National Collegiate Athletic Ass’n, then-Chief Judge Claudia Wilken of the U.S. District Court for the Northern District of California issued a groundbreaking decision, potentially opening the floodgates for challenges to National Collegiate Athletic Association (NCAA) amateurism rules. The NCAA was finally put to a full evidentiary demonstration of its amateurism defense, and its proof was found emphatically wanting. We agree with Professor Edelman that O’Bannon could bring about significant changes, but only if the Ninth Circuit affirms. We write mainly to address the NCAA’s vigorous pending appeal and the views of certain amici, and to explain our …

Ftc V. Lundbeck: Is Anything In Antitrust Obvious, Like, Ever?, Chris Sagers, Richard M. Brunell

Law Faculty Articles and Essays

In FTC v. Lundbeck, the Eighth Circuit affirmed a bench verdict finding a merger to monopoly, followed by a 1400% price increase, not only legal, but effectively not even subject to antitrust. The result followed from the district court's view that peculiarities in the market for hospital-administered drugs rendered it essentially immune from price competition. That being the case, the court found that even products very plainly substitutable on any traditional "functional interchangeability" analysis are not in the same "relevant market" for purposes of rules governing horizontal mergers. We think the court's analysis was incorrect for a number of …

Continuing The Conversation Of "The Economic Irrationality Of The Patent Misuse Doctrine", Christa J. Laser

Law Faculty Articles and Essays

This Article seeks to use economic tools and insights to find the best way for courts to construe or for Congress to modify the patent misuse doctrine. As the title suggests, it attempts to continue the conversation begun by Professor Mark Lemley in his often-cited Comment, The Economic irrationality of the Patent Misuse Doctrine.

Part I provides a brief history of the doctrine of patent misuse. Part II begins with a premise that a partial economic equilibrium can be achieved by attempting to match Congress's intended patent scope with the actual patent scope, even assuming that economic tools can never …

Standardization And Markets: Just Exactly Who Is The Government, And Why Should Antitrust Care?, Christopher L. Sagers

Law Faculty Articles and Essays

We take for granted that the basic choice in public policy is between allocation of resources by government bureaucracy, on the one hand, or allocation by markets, on the other. But that dichotomy is false, and at least under contemporary circumstances it is more accurate to describe the choice as between allocation by one kind of bureaucracy and allocation by a different kind of bureaucracy. This poses a problem for our antitrust policy, because it lacks any coherent guidance as to how to address those entities and transactions that are not governmental but are also not simply market-governed. This paper …

Why Copperweld Was Actually Kind Of Dumb: Sound, Fury, And The Once And Still Missing Antitrust Theory Of The Firm?, Chris Sagers

Law Faculty Articles and Essays

Since even before Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984), it has been thought that antitrust needs some "theory of the firm" to inform its application of a "single-entity" defense in Sherman Act section 1 litigation. Not only is that sense mistaken, it is emblematic of the deep misdirection of contemporary antitrust. It shows just how far antitrust has forgotten that it is a law, a practical tool to implement policy choices made through our system of government. Much too much of the time, it seems to fancy itself rather an abstract policy seminar to be …

Much Ado About Possibly Pretty Little: Mccarran-Ferguson Repeal In The Health Care Reform Effort, Christopher L. Sagers

Law Faculty Articles and Essays

Since 1945, the McCarran-Ferguson Act (MFA) has shielded the “business of insurance” from antitrust liability, so long as the challenged conduct is “regulated by State Law” and does not constitute “boycott, coercion, or intimidation.” This law, like the dozens of other statutory antitrust exemptions that still exist for other industries, has more or less always been controversial, and efforts to repeal it date back more than thirty years. This Essay asks two questions: (1) what consequences the pending repeal measures might have if one of them becomes law; and (2) what a close examination of this effort might teach us …

Rarely Tried, And . . . Rarely Successful: Theoretically Impossible Price Predation Among The Airlines, Christopher L. Sagers

Law Faculty Articles and Essays

Two large bodies of literature bearing on the competitive health of the deregulated airlines are in sharp conflict: (1) the volumes of judicial and academic output to the effect that the phenomenon of predatory pricing is, as a practical matter, impossible; and (2) the similarly massive body of industry-specific theory and empirical evidence that predation not only occurs in airline markets, but has been a key tool to preserve market power held by the surviving legacy carriers. This article seeks to establish from the latter that the former is a poor basis for policy, especially if there is nothing really …

Dagher, American Needle, And The Evolving Antitrust Theory Of The Firm: What Will Become Of Section 1?, Christopher L. Sagers

Law Faculty Articles and Essays

This summer, on the last regularly scheduled sitting of its October 2008 Term, the Supreme Court granted certiorari in a case that could have far-reaching consequences throughout the law of Sherman Act Section 1. In the case under review, American Needle, Inc. v. NFL, the Seventh Circuit, by unanimous panel decision, entered a striking ruling in the long-running debate over whether professional sports leagues can be “single entities” under Copperweld. The court not only said yes, but did so in what is possibly the most likely context in which the member teams could have competed with one another - the …

Competition Come Full Circle? Pending Legislation To Repeal The U.S. Railroad Exemption, Christopher L. Sagers

Law Faculty Articles and Essays

Repeal of the railroad antitrust exemptions has been advocated ever since deregulation of that industry, and bills have been introduced twice to do it. However, there is no particular reason yet to believe railroad exemption repeal will occur in this Congress. The pending bills have not progressed far and have failed before, and they are opposed by the industry. But even if they progress, and assuming there is not also some significant change to the overall railroad regulatory framework, it seems unlikely that antitrust litigation will be very successful or that it will much change the status quo in rail …

Raising The Price Of Pork In Texas: A Few Thoughts On Ghosh, Bush, And The Future Of Antitrust Immunity, Christopher L. Sagers

Law Faculty Articles and Essays

Shubha Ghosh and Darren Bush were personally involved in real-world opposition to the Love Field airline terminal deal, organizing petitioning efforts in Congress and otherwise trying to get it stopped.My comments here basically ride two horses, because Ghosh and Bush raise two important and intriguing problems. First, I think the problem in the Love Field case and other case law they discuss is really just the problem with all of federal antitrust. Antitrust is in a dire state across the board. Lately, we seem near the completion of its euthanasia, which happened pretty much as Adams and Brock predicted, although …

Clash Of The Titans: Collisions Of Economic Regulations And The Need To Harmonize Prescriptive Jurisdiction Rules, Milena Sterio

Law Faculty Articles and Essays

Part I of this article describes regulatory clashes involving different states' public laws, and then focuses on certain areas of law, including antitrust, securities, and Internet commerce and publishing, where such clashes are most likely to take place. Part II focuses on the different solutions to this regulatory puzzle invoked by scholars, advocating either territorial-based or substance-based approaches. Part III then critiques the two approaches, while emphasizing the need to address the issue from a global perspective, that is, by seeking to harmonize jurisdiction-allocating rules on an international level.

The Demise Of Regulation In Ocean Shipping: A Study In The Evolution Of Competition Policy And The Predictive Power Of Microeconomics, Christopher L. Sagers

Law Faculty Articles and Essays

Over its 140 year history, ocean liner shipping has almost always enjoyed an antitrust exemption permitting price-fixing cartels of ocean carriers. The exemption was premised on the belief that problems of cost and capacity inherent in the trade can be resolved only by horizontal collusion. Now that that exemption has been whittled away by deregulatory efforts, the pre- and post-deregulation evidence presents one of the world's rare opportunities for natural experiment on the behavior and effectiveness of collusive cartel pricing. Moreover, because normal and effective competition never really existed prior to 1998, the normative foundation of the antitrust exemption was …

Antitrust Immunity And Standard Setting Organizations: A Case Study In The Public-Private Distinction, Chris Sagers

Law Faculty Articles and Essays

This paper uses an ongoing issue of local legal doctrine as a case study to provide insights into a problem of larger political philosophy: the problem whether the difference between "public" and "private" should be made to matter and, indeed, whether there is a difference at all. The case study is as follows: In our system, state governments are free to fashion their own trade policies in virtually any manner they choose. During the past century there has evolved a complex range of relationships between government and the businesses regulated by those policies, the result often being that businesses themselves …

The Legal Structure Of American Freedom And The Provenance Of The Antitrust Immunities, Christopher Sagers

Law Faculty Articles and Essays

It is a reflection of the subtle relationship between legal doctrine and the larger social context it regulates that, on occasion, some humble point of mere theory proves to be the lynchpin of a serious social problem. Often the most pernicious aspect of such a situation will be the very obscuriyy that causes courts to overlook it.

That is emphatically the case with the issue addressed in this paper. Confusion persists over the seemingly academic question whether the so-called "Noerr-Pennington" or "petitioning" immunity, a doctrine in antitrust law which protects persons from being sued when they seek action from their …

An Implied Cause Of Action Under The Real Estate Settlement Procedures Act, Chris Sagers

Law Faculty Articles and Essays

This Note contends that consumers should have a private damages action under section 10. Part I discusses the method federal courts currently employ to determine whether a private cause of action should be recognized under a given federal statute. Part II applies this standard to section 10, and it argues that, although the federal courts currently exhibit a fairly restrictive attitude toward implication of remedies, an action should be implied under section 10 because the Real Estate Settlement Procedures Act of 1974 (RESPA) was enacted at a time when Congress relied on a more permissive judicial implication doctrine. Finally, Part …