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On Jan. 9, 2006, 3rd U.S. Circuit Court of Appeals Judge Samuel Alito will appear before the Senate Judiciary Committee to determine whether he ultimately will be elevated to the U.S. Supreme Court. No doubt, at that hearing, there will be considerable time and energy devoted to the nominee’s views on abortion, the right of privacy, prisoners’ rights and other civil rights issues that have pervaded the extensive press coverage of his nomination. Hopefully, some time will be spent addressing another important issue — Alito’s views and record on antitrust issues. Arguably, such issues have a much greater impact not only on corporations doing business throughout the United States, but on every person who purchases a product or service regulated by the antitrust laws — which is everyone. In that sense, the antitrust umbrella is larger to all Americans than, for example, abortion rights, which do not necessarily touch the lives of every citizen. HINTS AND LEANINGS Does Alito have experience either litigating or deciding antitrust issues? The answer to that question is a resounding yes. It is fair to say that he probably has had more antitrust experience than any justice now sitting on the Supreme Court had before being nominated, with the exception of Justice John Paul Stevens. Since joining the 3rd Circuit in 1990, Alito has presided in 12 cases resulting in published opinions that have addressed substantive antitrust issues. He is the author of two antitrust opinions and joined the dissent to the en banc decision in the LePage’s v. 3M case, which reversed the majority panel on which he had served. When he was with the U.S. Solicitor General’s Office from 1981 to 1985, he appeared on the brief (but did not argue) in the important Cargill v. Monfort case. There, the Supreme Court agreed with the government that a competitor cannot sue to block a merger of other competitors unless it shows an antitrust injury. The court further held that increased competition is not enough. The Court, however, refused to accept the government’s argument proposing a per se rule to deny competitors standing to challenge mergers based on possible predatory pricing. Indeed, the government had even stated in its brief that “[i]ncreasingly, less efficient firms that would suffer from such competition are turning to antitrust complaints to block efficient, and thus procompetitive mergers … . In our view, there is cause for particular skepticism when a competitor asserts this basis [post-merger predatory pricing] for standing [to challenge a merger].” The statement is rather odd considering the government routinely reaches out to the same competitors to obtain their views when reviewing such mergers. Surveying the large body of antitrust cases on which Alito participated, what can be discerned about his views on antitrust issues? It can be said with some certainty that his views have tended to drift hard toward the conservative side, meaning he strictly interprets the antitrust laws. This is particularly true as to antitrust standing. In all but one of his published cases, the plaintiff’s antitrust claims were dismissed prior to trial. In many, the antitrust claims were dismissed on a motion for summary judgment despite what seemed to be disputed factual and related expert issues concerning antitrust market and injury questions. AUTHORED OPINIONS Alito has authored two published majority antitrust opinions: Miller v. Indiana Hospital and Barton & Pittinos v. SmithKline. Both cases involved unanimous decisions. In Miller, in 1991 he reversed the district court’s finding that state-action immunity existed where a doctor was denied hospital staff privileges. Alito found no proof of active state supervision over the private privilege determination. The decision was not surprising considering that the only argument made by the plaintiff to support active state supervision was the alleged ability of the doctor to appeal the hospital’s decision to various state agencies. Alito found that no such substantive appeal rights appeared to exist under the statute in question or judicial interpretations of it. He also found that whatever state review did take place of the initial private privilege determination did not address the merits of the denial. The 1997 opinion of Barton & Pittinos v. SmithKline offers perhaps the greatest insight as to his antitrust leanings and philosophy. In that case, the plaintiff had marketed a vaccine produced by SmithKline to nursing homes until various pharmacists who were also selling the vaccine persuaded SmithKline not to sell to the plaintiff through another company known as GIV. The plaintiff argued this was a conspiracy to boycott in violation of Section 1 of the Sherman Act. The district court found no such violation, and Alito, for the unanimous court, affirmed. He found that the market as defined by the plaintiff did not include the plaintiff as a competitor in the sale of the product at issue (i.e. the vaccine). Alito found that the “realities of competition” in the case revealed that pharmacists against which the plaintiff allegedly competed not only marketed the product but sold the vaccine itself. The unlicensed plaintiff did not (and could not) sell the vaccine directly but only passed the orders on to GIV to fill. Therefore, Alito stated the plaintiff could not be a competitor against the pharmacists who actually sold (but also marketed) the vaccine to consumers. This arguably fine distinction was expressed as follows by Alito: “But the question presented in this appeal is whether B&P was in competition with the pharmacists, not whether ‘the [marketing] program’ was. In order to hold that B&P was in competition with the pharmacists, we would have to conclude that what B&P offered was reasonably interchangeable with what the pharmacists offered. We agree with the district court that the record cannot support such a determination. B&P’s role in the program was limited to marketing the vaccine; without GIV, there was no vaccine, only information about it. Thus, the nursing homes (the consumers in the relevant market here) were able to abandon the pharmacists in favor of the SKB/GIV/B&P program, but they could not have abandoned the pharmacists in favor of B&P alone. Doing so would have left the pharmacists without the most important part of the package of goods and services offered by SKB, GIV and B&P together: the vaccine itself. Consequently, there was no cross-elasticity of demand as between the pharmacists’ offerings and B&P’s offerings; no matter how much the pharmacists raised the price of the package of the goods and services that they offered, the nursing homes could not have switched to B&P.” Whether Alito would have found GIV to be the proper plaintiff is not clear, since GIV only sold the vaccine but did not market it as well, and the pharmacists did both. OTHER CASES The other significant antitrust case involving Alito was LePage’s v. 3M. In that 2002 matter, the jury found that 3M (with 90 percent of the market) had engaged in exclusionary conduct, including bundled rebates, in violation of Section 2 of the Sherman Act. After a lengthy trial, the jury rendered a verdict in favor of LePage’s for $68 million after trebling. Alito, along with Judge Morton I. Greenberg, set aside the jury’s verdict, finding neither anticompetitive conduct nor effect from the evidence presented. Judge Dolores K. Sloviter dissented, finding the majority’s strained reasoning “novel,” that it “usurps the jury’s province to decide facts,” and stated the ruling would “weaken Section 2 of the Sherman Act to the point of impotence.” The case was then heard by the entire 3rd Circuit en banc, which vacated the panel’s decision and reinstated the jury verdict. Sloviter wrote the majority’s scholarly opinion. Alito, along with now Chief Judge Anthony J. Scirica, joined Greenberg’s lengthy dissent. There are approximately nine other substantive antitrust cases that Alito served on panels. Many of these cases involved standing issues in which the 3rd Circuit found no standing. Notably, in all those cases except one, the antitrust claims were not allowed to proceed to trial. That singular case was Brader v. Allegheny Hospital. There, Alito in 1995 joined then-Chief Judge Sloviter in reversing the district court’s granting of a motion to dismiss (not summary judgment) in another staff privileges case. The unanimous court found that the interstate commerce requirement was satisfied there and antitrust injury had been adequately pled. In 1993, Alito dissented in the Ticor Title v. FTC rate-setting case. He stated that the McCarran-Ferguson Act insurance antitrust exemption should also apply to the processing of title insurance and that the majority had essentially engaged in judicial activism in not finding, so, “[w]hether the majority’s decision represents sound antitrust policy, I do not believe it is supported by the language, structure or legislative history of the McCarran-Ferguson Act.” What conclusions can be reached about Alito’s views from this large body of antitrust opinions? Simply stated, Alito interprets precedent strictly and narrowly applies the reaches of the antitrust laws. He does not appear to give private antitrust plaintiffs the benefit of the doubt, particularly as to the issues of standing or injury, even in the context of summary judgment. As shown in the LePage’s and Ticor cases, he is not swayed by jury verdicts or daunted by the contrary views of a majority of his colleagues. In doing so, he often appears to be saying that the plaintiff was not the proper plaintiff to bring the case, not that there were no antitrust violations at play. Based on his joining the Brader case, it appears he is willing to give a plaintiff the chance to develop a discovery record if the essential elements are adequately pled. Alito seems to share Supreme Court Chief Justice John Roberts’s views that standing issues are paramount and should be strictly enforced no matter how egregious the conduct presented. Therefore, if Alito is confirmed, plaintiffs counsel would be well advised to pick their plaintiffs carefully in anticipation of the likely collaboration between Roberts and Alito on the issue of standing. In conclusion, one could even go so far as to pose the question of whether Alito believes that the antitrust laws are best left largely enforced by the government and not by private plaintiffs, in light of the views expressed in the Cargill brief and the decisions, for example, in Barton, Ticor, and LePage’s. Perhaps the senators should also ask Alito that question at the January hearings. Carl W. Hittinger is chairman of the antitrust and unfair competition group and a member of the litigation department at Stevens & Lee’s Philadelphia office, where he concentrates his practice in complex commercial litigation with particular emphasis on antitrust matters. Hittinger is also a frequent lecturer and writer on antitrust issues and has extensive experience counseling clients on all aspects of civil and criminal antitrust law.

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