Law Commons^™

The Constitutional Moment That Wasn't: 1912-1914 And The Meaning Of The Sherman Act, Alan J. Meese

Popular Media

No abstract provided.

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 …

The Case For "Unfair Methods Of Competition" Rulemaking, Rohit Chopra, Lina M. Khan

Faculty Scholarship

A key feature of antitrust today is that the law is developed entirely through adjudication. Evidence suggests that this exclusive reliance on adjudication has failed to deliver a predictable, efficient, or participatory antitrust regime. Antitrust litigation and enforcement are protracted and expensive, requiring extensive discovery and costly expert analysis. In theory, this approach facilitates nuanced and fact-specific analysis of liability and well-tailored remedies. But in practice, the exclusive reliance on case-by-case adjudication has yielded a system of enforcement that generates ambiguity, drains resources, privileges incumbents, and deprives individuals and firms of any real opportunity to participate in the process of …

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 …

The Rule Of Reason, Herbert J. Hovenkamp

All Faculty Scholarship

Antitrust’s rule of reason was born out of a thirty-year (1897-1927) division among Supreme Court Justices about the proper way to assess multi-firm restraints on competition. By the late 1920s the basic contours of the rule for restraints among competitors was roughly established. Antitrust policy toward vertical restraints remained much more unstable, however, largely because their effects were so poorly understood.

This article provides a litigation field guide for antitrust claims under the rule of reason – or more precisely, for situations when application of the rule of reason is likely. At the time pleadings are drafted and even up …

The Antitrusting Of Patentability, Saurabh Vishnubhakat

Faculty Scholarship

Deciding a patent’s validity is costly, and so is deciding it incorrectly. Judges and juries must expend significant resources in order to reach a patent validity determination that is properly informed by the relevant facts. At the same time, patent validity determinations reached quickly and cheaply may conserve resources today while creating future costs. Wrongly preserving an invalid patent can distort the competitive market and enable abuses, such as nuisance litigation. Meanwhile, wrongly striking down a valid patent can undermine incentives for continued investment and commercialization in knowledge assets. Courts facing patent validity issues have begun to strike this balance …

The Ncaa And The Rule Of Reason, Herbert J. Hovenkamp

All Faculty Scholarship

This brief essay considers the use of antitrust’s rule of reason in assessing challenges to rule making by the NCAA. In particular, it looks at the O’Bannon case, which involved challenges to NCAA rules limiting the compensation of student athletes under the NCAA rubric that protects the “amateur” status of collegiate athletes. Within that rubric, the Ninth Circuit got the right answer.

That outcome leads to a broader question, however: should the NCAA’s long held goal, frequently supported by the courts, of preserving athletic amateurism be jettisoned? Given the dual role that colleges play, that is a complex question, raising …

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 …

Antitrust Balancing, Herbert J. Hovenkamp

All Faculty Scholarship

Antitrust litigation often confronts situations where effects point in both directions. Judges sometimes describe the process of evaluating these factors as “balancing.” In its e-Books decision the Second Circuit believed that the need to balance is what justifies application of the rule of reason. In Microsoft the D.C. Circuit stated that “courts routinely apply a…balancing approach” under which “the plaintiff must demonstrate that the anticompetitive harm…outweighs the procompetitive benefit.” But then it decided the case without balancing anything.

The term “balancing” is a very poor label for what courts actually do in these cases. Balancing requires that two offsetting effects …

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 …

Living With Monsanto, 2015 Mich. St. L. Rev. 559 (2015), Daryl Lim

Faculty Scholarly Works

Bowman v. Monsanto Co. signaled the end of an era of seed saving. Farmers must buy new seed for replanting or risk patent infringement. The familiar rhetoric of oppressed farmers belies the fact that Monsanto’s success rests in part on farmers prizing its innovations. Current trends indicate that this reliance on Monsanto will continue. The Supreme Court correctly found for Monsanto. However, future cases must iron out the kinks in the Bowman decision. Despite the Court’s best intentions, inadvertence cannot shield farmers from patent infringement. The Court must also make it clear that patentees cannot use licensing restrictions to claw …

Living With Monsanto, Daryl Lim

Faculty Scholarly Works

Bowman v. Monsanto Co. signaled the end of an era of seed saving. Farmers must buy new seed for replanting or risk patent infringement. The familiar rhetoric of oppressed farmers belies the fact that Monsanto’s success rests in part on farmers prizing its innovations. Current trends indicate that this reliance on Monsanto will continue. The Supreme Court correctly found for Monsanto. However, future cases must iron out the kinks in the Bowman decision. Despite the Court’s best intentions, inadvertence cannot shield farmers from patent infringement. The Court must also make it clear that patentees cannot use licensing restrictions to claw …

Brief Of Amici Curiae Antitrust Law Professors In O'Bannon V. Ncaa, Thomas C. Arthur, Amitai Aviram, Edward D. Cavanagh, Jorge L. Contreras, Daniel A. Crane, Susan Beth Farmer, Herbert Hovenkamp, Keith N. Hylton, Michael S. Jacobs, Alan J. Meese, Salil K. Mehra, William H. Page, Gary R. Roberts, D. Daniel Sokol, Alexander Volokh

Faculty Scholarship

On November 21, 2014, 15 professors of antitrust law at leading U.S. universities submitted an amicus brief in the O'Bannon v. NCAA 9th Circuit appeal in support of the NCAA. They have an interest in the proper development of antitrust jurisprudence, and they agree that the court below misapplied the “less restrictive alternative” prong of the rule of reason inquiry for assessing the legality of restraints of trade under Section 1 of the Sherman Act, 15 U.S.C. § 1. They are concerned that the district court’s approach to the antitrust rule of reason, if affirmed, would grant undue authority to …

The Economics Of The Restatement And Of The Common Law, Keith N. Hylton

Faculty Scholarship

Perhaps the most optimistic view of the American Law Institute's Restatement project was provided at its inception by Benjamin Cardozo:

When, finally, it goes out under the name and with the sanction of the Institute, after all this testing and retesting, it will be something less than a code and something more than a treatise. It will be invested with unique authority, not to command, but to persuade. It will embody a composite thought and speak a composite voice. Universities and bench and bar will have had a part in its creation. I have great faith in the power of …

Anticompetitive Patent Settlements And The Supreme Court's Actavis Decision, Herbert J. Hovenkamp

All Faculty Scholarship

In FTC v. Actavis the Supreme Court held that settlement of a patent infringement suit in which the patentee of a branded pharmaceutical drug pays a generic infringer to stay out of the market may be illegal under the antitrust laws. Justice Breyer's majority opinion was surprisingly broad, in two critical senses. First, he spoke with a generality that reached far beyond the pharmaceutical generic drug disputes that have provoked numerous pay-for-delay settlements.

Second was the aggressive approach that the Court chose. The obvious alternatives were the rule that prevailed in most Circuits, that any settlement is immune from antitrust …

Antitrust Principles Affecting Franchise Law, Daniel A. Crane

Book Chapters

Antitrust law in the United States intersects with franchise law in a number of complex ways. Falling afoul of antitrust law can be costly-antitrust violations give rise to treble damages and, in the extreme, even criminal penalties. Further, the antitrust principles governing franchise relationships are in a state of transition. The upshot is that careful attention to emerging antitrust norms is critical for students of franchise law.

Use Of Dominance, Unlawful Conduct, And Causation Under Section 36 Of The New Zealand Commerce Act: A U.S. Perspective, Maurice Stucke

Scholarly Works

The proper interpretation of the abuse of dominance provisions in Section 36 of the New Zealand Commerce Act has been a matter of controversy. The courts of New Zealand have taken a view of the requirements of this important provision of competition law in a narrow and formal manner that makes it very difficult to take enforcement action against conduct which has a net anticompetitive effect, but which has no, or at best minimal, business or procompetitive justification. We offer this white paper to provide a United States perspective to suggest that the current counterfactual test applied by the courts …

Leegin, The Rule Of Reason, And Vertical Agreement, Herbert J. Hovenkamp

All Faculty Scholarship

The Supreme Court’s Leegin decision overturned the longstanding rule of per se illegality for resale price maintenance and applied a rule of reason. One might think that the question whether a vertical “agreement” exists between a manufacturer and a dealer should not be affected by the mode of analysis to be applied after an agreement is found. First one asks whether an agreement exists, and determines whether the per se rule or rule of reason applies only after receiving an affirmative answer. Nevertheless, ever since Colgate the Supreme Court has generally taken a more restrictive approach on the agreement issue …

Vertical Restraints, Dealers With Power, And Antitrust Policy, Herbert J. Hovenkamp

All Faculty Scholarship

The Supreme Court’s Leegin decision has now brought the rule of reason to all purely vertical intrabrand distribution restraints. But the rule of reason does not mean per se legality and occasions for anticompetitive vertically imposed restraints may still arise. Of all those that have been suggested the most plausible are vertical restraints imposed at the behest of a powerful dealer or group (cartel) of dealers.

Although a vertical distribution restraint resembles a dealer cartel in that both limit intraband competition, a manufacturer restraining the distribution of its product shuns the excess dealer profits a dealer cartel would seek. Accordingly, …

Network Neutrality After Comcast: Toward A Case-By-Case Approach To Reasonable Network Management, Christopher S. Yoo

All Faculty Scholarship

The Federal Communications Commission’s recent Comcast decision has rejected categorical, ex ante restrictions on Internet providers’ ability to manage their networks in favor of a more flexible approach that examines each dispute on a case-by-case basis, as I have long advocated. This book chapter, written for a conference held in February 2009, discusses the considerations that a case-by-case approach should take into account. First, allowing the network to evolve will promote innovation by allowing the emergence of applications that depend on a fundamentally different network architecture. Indeed, as the universe of Internet users and applications becomes more heterogeneous, it is …

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 …

Network Neutrality, Consumers, And Innovation, Christopher S. Yoo

All Faculty Scholarship

In this Article, Professor Christopher Yoo directly engages claims that mandating network neutrality is essential to protect consumers and to promote innovation on the Internet. It begins by analyzing the forces that are placing pressure on the basic network architecture to evolve, such as the emergence of Internet video and peer-to-peer architectures and the increasing heterogeneity in business relationships and transmission technologies. It then draws on the insights of demand-side price discrimination (such as Ramsey pricing) and the two-sided markets, as well as the economics of product differentiation and congestion, to show how deviating from network neutrality can benefit consumers, …

The Effects Test: Extraterritoriality’S Fifth Business, Austen L. Parrish

Articles by Maurer Faculty

American laws increasingly regulate the conduct of foreigners abroad. The growth in extraterritorial laws, in no small part, can be traced to the effects test - a doctrine that instructs courts to presume that Congress intended to regulate extraterritorially when foreign conduct is found to have a substantial effect within the United States. For many scholars and lawyers, the effects test is the doctrinal lynchpin for determining the geographic reach of domestic laws. Territorial limits on legislative jurisdiction, on the other hand, are seen as anachronistic; a remnant of a pre-modern, pre-globalized world.

This article takes a different, more skeptical …

Market Power Requirement In Antitrust Rule Of Reason Cases: A Rhetorical History, The, Mark R. Patterson

Faculty Scholarship

The requirement that an antitrust plaintiff show market power in rule of reason cases has an uninspiring history and unconvincing justifications. Such a requirement has never been adopted by the Supreme Court, and is currently imposed by only the Seventh and Fourth Circuits. Indeed, the requirement was never imposed very widely, despite frequent claims to the contrary. More significantly, the Seventh Circuit cases that initially established the requirement, and that continue to be cited for it, did so with misleading citations to cases from other circuits. Furthermore, the justifications that have been offered for the requirement have generally been either …

Uneasy Labeling, Deborah A. Widiss

Articles by Maurer Faculty

No abstract provided.

From Surrogates To Stories: The Evolution Of Federal Merger Policy, Robert H. Lande, James Langenfeld

All Faculty Scholarship

This article traces the evolution of federal merger policy. It documents how merger enforcement originally was largely based upon very strong structural presumptions. These presumptions gradually eroded and other factors became more and more important in enforcement decisions. Today meger enforcement essentially consists of structural safe harbors and a full rule of reason analysis for any merger not within these safe harbors.

Retail Price Ceilings And The Rule Of Reason, Jay Conison

Law Faculty Publications

No abstract provided.

Lawmaking As An Expression Of Self, George P. Fletcher

Faculty Scholarship

In this lecture I should like to encourage an attitude toward legal phenomena that stresses both tradition and change as an expression of meaning, particularly as an expression of national legal identity. I will illustrate this thesis with some specific examples of substantive rules in American and in German law. In the latter part of the lecture, I shall turn to the choice of language as a parallel expression of identity within a particular legal system.