Thank you for sharing!

Your article was successfully shared with the contacts you provided.
WASHINGTON � For a small window into the newly constituted Roberts Court, consider the just-ended term’s antitrust decisions. Despite their different factual circumstances and legal issues, the decisions generally share one unifying theme, agree plaintiff and defense practitioners: They limit access to recourse under the antitrust laws. Whether it’s antitrust, securities, employment, habeas corpus or even religion, this is a court that has insisted this term on strict adherence to time limits, narrow standing rules and tougher pleading requirements. “Across a wide variety of areas, a theme is this court has decided to cut back people’s access to courts,” said constitutional law scholar Pamela Karlan of Stanford Law School. In the antitrust context, “This has been a tough Supreme Court term for antitrust plaintiffs, particularly those attempting to bring an antitrust claim for treble damages in the securities context,” said Wesley R. Powell, a partner in the global competition practice in Richmond, Va.-based Hunton & Williams’ New York office. But it has also been a “banner year for antitrust jurisprudence” because of the number and importance of the cases decided, added Paolo Morante, an antitrust and trade partner in DLA Piper’s Baltimore office. And although one expert opinion sees the justices’ efforts as restricting access to courts, another sees those efforts as bringing an out-of-kilter system back into balance. “The theme which unites some of the antitrust and nonantitrust decisions is that a substantial majority of justices are very skeptical of huge, sprawling litigation and the tactics of the plaintiffs’ class action bar,” said antitrust litigator Roy T. Englert Jr., partner in Washington’s Robbins Russell Englert Orseck & Untereiner. “I think we’re seeing that cut across the usual ideological lines on the court,” he added. Albert Foer, president of the American Antitrust Institute, agreed, with chagrin. “The bottom line is it appears it will be far more difficult for people who think they are being harmed by anti-competitive behavior to gain access to the court system,” said Foer. “And, private antitrust enforcement, which has been thought to count for 90% or more of cases brought, is becoming endangered.” Chipping away So why is it that the high court has been making it more difficult for plaintiffs to bring antitrust cases? There is often a fine line between aggressive competition on the merits and anti-competitive behavior, said W. Stephen Smith, an antitrust litigator in the Washington office of Morrison & Foerster. Antitrust rules need to be structured to reach the anti-competitive conduct, he said, without deterring the aggressive pro-competitive conduct. “If you look at this term and back a term or two, the court wants to make sure the lower courts read the antitrust law and apply it in a way that’s designed to err on the side of ensuring the pro-competitive conduct is encouraged,” he said. “If you go back 30 years in antitrust jurisprudence, you would certainly say the balance was the other way.” Since 1979, the court has been slowly chipping away at old rules to change that presumption, added Smith. “In these last three terms, there is an acceleration in some sense of that trend,” he said. “The court has taken more cases that have given it the opportunity to clarify the law in that way.” Smith and others also believe the decisions this term, in particular, reflect the justices’ increasing belief that competition issues are better resolved in the marketplace than in the judicial system. “You see expressly and implicitly in their opinions the concern that antitrust litigation is a long and costly process for all parties, including the courts,” said Smith. The marketplace, he and others contend, will resolve many issues and more efficiently. “I think the court is saying, ‘Let’s reserve antitrust for those issues where it’s clear there is a competitive problem and it’s clear the marketplace isn’t the best means to address the problem.’ “ Or, he added, as in the term’s case involving a conflict between antitrust and securities regulation, a regulatory body is the better resolution. While Smith believes the high court has been headed in the right direction in this area for some time now, Foer of the American Antitrust Institute does not share that belief. “Over a period of years, as the court has become more conservative, it has become more sensitive to the cost of litigation and the threat that the antitrust laws present to business,” he said. “They tend to focus on a small number of cases that really are abusive. But the pendulum has swung to the point where the court has changed the antitrust doctrines over the last 30 years or so and now they’re working on procedures � standing and antitrust injury; what it takes to get past a summary judgment motion, and now a motion to dismiss.” The decisions reflect a distrust of juries and of lower courts’ competency to manage class certification in a way to avoid improper class actions, he said. “Instead of taking the judiciary to task, they’re simply taking all these issues away from the courts,” said Foer. Unless an antitrust case involves a per se, or automatic, violation of antitrust laws, antitrust claims always have been difficult for plaintiffs to bring and win, according to Foer. Most of this term’s antitrust rulings are “outcome-determinative decisions, masquerading as procedural decisions,” he said. “[Former Justice] Potter Stewart once said the only sense he could make out of merger cases was the government always wins,” said Foer. “Today the rule is big business always wins.” Policy and procedure The four cases decided this term involved predatory buying, pleading, implied immunity from antitrust laws, and vertical price-fixing (such as between a manufacturer and a retailer). In all cases, the antitrust plaintiff lost. The cases generally fall into two categories, said DLA Piper’s Morante and others: those dealing with economic policy or principles, and those dealing with procedural or administrative issues. In Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., No. 05-381, a unanimous court held that a two-part test for recovery on a predatory-pricing claim also applies to a predatory-buying claim because they are analytically similar. The test for predatory pricing, announced by the high court in 1993, was the hallmark of cases in which the justices voiced increasing skepticism with predatory-pricing claims, according to some antitrust experts. The 1993 decision cut back on antitrust liability and will do the same, they say, in the predatory-buying context because it is a test that few antitrust plaintiffs can meet. Leegin Creative Leather Products Inc. v. PSKS Inc., No. 06-480, brought to the court another traditional area of antitrust law viewed by the justices increasingly as more harmful than helpful to competition: vertical restraints. Leegin Creative Leather Products Inc., which markets a line of clothing and requires its retailers to agree not to sell its products at a discount, was successfully sued by PSKS for violating the Sherman Antitrust Act by engaging in vertical price-fixing � a per se, or automatic, antitrust violation. Leegin successfully sought to overturn the per se rule, which the high court had announced in a 1911 decision, Dr. Miles Medical Co. v. John D. Parks & Sons, 220 U.S. 373, and replace it with the so-called rule of reason. Antitrust experts generally consider 1976 to be the watershed year for vertical restraints. The court in that year decided that nonprice vertical restraints were not per se illegal and should be analyzed under the rule of reason. In the next 30 years, plaintiffs’ challenges to vertical restraints became much more difficult. Enter the Dr. Miles rule � long considered a pro-consumer rule. Weyerhaeuser and Leegin are purely economic policy cases, said Englert. “Although the Weyerhaeuser decision was welcome and somewhat doctrinally important, it wasn’t a difficult case about what’s the right answer,” explained Englert. “It was really more about the court taking this rather singular decision of the 9th Circuit.” Regardless of whether it was the right answer, the decision did provide a bright-line rule and certainty, said antitrust scholar Edward Cavanagh of St. John’s University School of Law. Of all the antitrust cases before the court this term, Morante added, Leegin offered the justices the most direct opportunity to address economic principles as opposed to procedural or administrative issues. Economists, he said, have widely adopted the view that abandoning the per se rule for the rule of reason would not harm consumers because vigorous interbrand competition would ensure that consumer prices would be disciplined. Cavanagh said that the case presented a “very, very fundamental consumer issue.” If the purpose of antitrust laws is to protect consumers, retail price maintenance, he said, is not consumer friendly. But Justice Anthony M. Kennedy, writing for a 5-4 majority, said that the economic literature was “replete” with pro-competitive justifications for overturning the Dr. Miles rule, and concerns about standing by high court precedent were not significant. The court’s other two antitrust decisions � Credit Suisse v. Billing, No. 05-1157, and Bell Atlantic Corp v. Twombly, No. 05-1126 � fall into the procedure/administration category. If Leegin was the most important in the economic category, Twombly is the giant in the other. In fashioning a new standard for what plaintiffs must plead to state a Sherman Act Section 1 claim, a 7-2 court not only raised the bar for plaintiffs but overruled a bedrock decision of civil procedure, Conley v. Gibson, 355 U.S. 41 (1957). Twombly had little new to say about antitrust behavior, said Morante, but appears to have gone beyond what was strictly necessary for the court to decide the issues before it. “It seems to have undone a long-standing principle of procedural law with respect to what a complaint needs to allege beyond the antitrust arena. It’s in a posture aimed at limiting recourse to the courts not just in antitrust but more broadly,” he said. Cavanagh agreed, adding, “It’s going to enable courts, in antitrust and in cases like civil rights, to get rid of cases on the pleadings because they think they’re thin rather than give plaintiffs an opportunity to get discovery.” Credit Suisse held, 7-1, that securities laws preclude antitrust liability in an antitrust class action against a syndicate formed to underwrite initial public offerings of high-tech companies. “In addition to reducing antitrust exposure for securities firms, the decision could have implications for the reach of the antitrust laws in other areas of pervasive federal regulation when the legislative scheme is silent concerning antitrust immunity,” said Morante. Antitrust law is a “resilient phenomenon that waxes and wanes over time,” said Foer. Right now, it is waning, but, he added, “It keeps coming back because it’s the way between heavy regulation and no regulation.”

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.