Corporate & Securities Law

Me Too @ Cato’s Constitution Day

Like Larry, I’ll be at Cato on Constitution Day.  TOTM will be well represented.  While Larry covers Jones v. Harris and mutual funds, I’ll have my sights on the Roberts Court’s recent decision in American Needle v. NFL.   See you there!

The abstract of my paper (co-authored with Judd Stone), Antitrust Formalism is Dead!  Long Live Antitrust Formalism! Some Antitrust Implications of American Needle v. NFL , is here:

Antitrust observers and football fans alike awaited the Supreme Court?s decision in American Needle v. National Football League for months ? inspiring over a dozen articles, and even one from the quarterback of the defending champion New Orleans Saints. Yet the implications of the Court?s decision, effectively narrowing the scope of the ?intra-enterprise immunity? doctrine to firms with a complete ?unity of interests,? are unclear. While some depict the decision as a schism from the last several decades of antitrust law, we explain why this interpretation is meritless and discuss the practical impact of the Court?s holding. The Court?s antitrust jurisprudence over the past several decades, including that of the Roberts Court and American Needle, has broadly embraced rules that are both relatively easy to administer as well as conscious of the error costs of deterring pro-competitive conduct. Intra-enterprise immunity potentially provided such a ?filter? that enabled judges to dismiss a non-trivial subset of meritless claims prior to costly discovery. The doctrine, however, proved notoriously difficult to consistently apply in situations involving common organizational structures. Consistent with error-cost principles that have been the lodestar of the Court?s recent antitrust output, American Needle gave the Court an opportunity to effectively abandon intra-enterprise immunity in favor of the Twombly ?plausibility? standard. Rather than marking a drastic change in antitrust jurisprudence, therefore, American Needle should be viewed as the Supreme Court substituting an unreliable screening mechanism in favor of a more cost-effective alternative.

Full post as published by Truth on the Market on September 15, 2010 (boomark / email).