Andrew I. Gavil presents a thoughtful and illuminating portrait of the evolution of the rule of reason in United States antitrust law since Standard Oil. While the rule of reason, as initially embodied in Standard Oil Co. v. United States and Board of Trade of Chicago v. United States (“Chicago Board of Trade”), may have once been an invitation to make any and all arguments about the competitive nature of a given restraint, Gavil rightly points out that this is no longer the case. As currently employed, the rule-of-reason analysis is typically quite structured. The plaintiff must first show that the defendant’s action had an anticompetitive effect. If she can do this, then the defendant has the burden to prove that its action has a procompetitive benefit. If, and only if, the court finds that both sides have met their initial burden, will the court proceed to balance the two effects.
Of course, the evidence of anti- and procompetitive effects for any particular conduct is always far from perfect. Whenever evidence is imperfect, we know from decision theory (Bayes’ rule) that one’s prior beliefs about the plausibility of anti- or procompetitive effects will be important (and will be more important the less perfect the evidence). Thus, one can think of the per se rule in antitrust as just an extreme form of the rule of reason, in which the court’s prior beliefs dictate the decision. For example, a court’s prior belief that price-fixing is anticompetitive may be so strong that the evidence required to overcome that prior belief (establishing a procompetitive effect on balance) would have to be enormously powerful. One way to express the justification for the per se rule is that the probability that such evidence will exist is so small that it is not worth examining it. In that light, one can also view the structured rule of reason approach as one that should (although, in practice may not) reflect a similar paradigm in less extreme cases: we require stronger evidence of anticompetitive effects for conduct that we think are less likely to be anticompetitive and are more receptive to procompetitive effects arguments in such cases.
It has been well established in the economics literature that the antitrust laws have been used strategically to undermine the competitive market process, whether the alleged abuses were based in fact or not. It should, then, come as no surprise that the origins of one of the most famous decisions in antitrust jurisprudence, the 1911 judgment by the Supreme Court against Standard Oil, can be traced back to an alliance of rivals that had seen their business interests hurt by John D. Rockefeller, Sr.’s innovative entrepreneurship. In fact, the judgment seemed to confirm early fears attributed to “[m]ost economists in the late 19th century . . . [that] the law would impede attainment of superior efficiency promised by new forms of industrial organization.” Others concluded later that “the enforcement of the Sherman Act over the past 95 years has probably reduced industrial competitiveness.”
On that occasion more than a century ago–an event that has been called “the mother of all monopolization cases”–the Court decided unanimously (with Justice Harlan concurring in part and dissenting in part ) that the U.S. government had the right to impose “broader and more controlling remedies,” including the dissolution of an entire corporate entity, in announcing that they henceforth would apply a “rule of reason” in evaluating alleged antitrust law violations.
Even its more stalwart defenders are concerned that capitalism is in crisis. Alan Greenspan conceded a “flaw” in his free-market beliefs. The Financial Times, in 2012, invited Arundhati Roy and Occupy Wall Street to share a dialogue with high-level officials and leading economists over the crisis in capitalism.
The crisis in capitalism might have come as a shock to some, but not to many middle- and lower-income households. Well before 2008, middle-class Americans saw little gains in income, despite gains in productivity. When mass unemployment came, the middle class shrank further. America’s social net, U.S. Senator Bernie Sanders described in his historic speech, is threadbare. America’s infrastructure is crumbling. Primary and secondary education for many families is inadequate. Incarcerations, home foreclosures, underwater mortgages, the number of people in poverty, and the public’s dissatisfaction with Congress are at record highs. With America’s debt in the trillions of dollars, a larger fiscal crisis looms. Many Americans in 2012 were dissatisfied with the United States’ moral and ethical climate (68 percent surveyed), the federal government’s size and power (69 percent), and the state of America’s economy (83 percent). Given the dissatisfaction, it is a wonder why more people are not protesting.
In September 2010, Iranian engineers detected that a sophisticated computer worm, known as Stuxnet, had infected and damaged industrial sites across Iran, including its uranium enrichment site, Natanz. In just a few days, a sophisticated computer code was able to accomplish what six years of United Nations Security Council resolutions could not. Not a single missile was launched, nor any tanks deployed, yet the computer worm effectively set back the Islamic Republic’s nuclear program by two years and destroyed roughly one-fifth of its nuclear centrifuges. The worm itself included two major components. One was designed to send Iran’s nuclear centrifuges spinning out of control, damaging them. The other component seemed right out of the movies; “the computer program . . . secretly recorded what normal operations at the nuclear plant looked like, then played those readings back to plant operators, like a pre-recorded security tape in a bank heist, so that it would appear that everything was operating normally while the centrifuges were actually tearing themselves apart.”
Stuxnet, to date, is the most sophisticated cyber weapon ever deployed. It acted as a “collective digital Sputnik moment,” bringing to light the important cybersecurity challenges the world faces. What makes cyber attacks so destructive is their ability to travel through the Internet and attack the structures it rests upon. Governments, industrial and financial companies, research institutions, and billions of citizens worldwide heavily populate these global networks. In fact, much of public and private life depends on functioning telecommunications and information-technology infrastructures. Thus, what we deemed to be one of the greatest successes of the twenty-first century, a global communication infrastructure, has now become our biggest vulnerability.
Responding to Courtney G. Joslin, Protecting Children (?): Marriage, Gender, and Assisted Reproductive Technology, 83 S. Cal. L. Rev. 1177 (2010).
In her article, Courtney G. Joslin persuasively argues that the children born via assisted reproductive technology (“ART”) are placed at a serious financial disadvantage under the law. Joslin is right to point out that parentage provisions that apply only to children born to heterosexual married couples disadvantage nonmarital children of ART financially as well as emotionally and developmentally. Joslin’s solution is to propose extending to such children what she terms the “consent = legal parent” rule, meaning that “any individual, regardless of gender, sexual orientation, or marital status, who consents to a woman’s insemination with the intent to be a parent is a legal parent of the resulting child.” Such a rule removes a period of time during which a child is unprotected by the lack of legal recognition of a parent. This response identifies an ambiguity in and proposes a clarification of Joslin’s consent = legal parent rule with regard to conception, and with regard to consent during the period after conception and before birth.
Critics of the individual mandate to purchase health care insurance make a simple but seemingly compelling argument. If the federal government can require people to buy insurance because that would be good for their health, then the government can require people to buy all sorts of things that are good for their health, like broccoli or membership in an exercise club.
To avoid the prospect of the ultimate nanny state, U.S. district court judges in Florida and Virginia concluded that while the federal government may regulate economic activity, it may not regulate economic inactivity. Thus, once you decide to purchase health care insurance, the government can regulate the terms of your insurance policy. However, you cannot be forced to purchase the policy in the first place. To breach the activity-inactivity line, wrote Judge Roger Vinson, would invite all kinds of well-intended, but liberty-destroying, laws.
On May 19, 2008, the United States Court of Appeals for the Fourth Circuit held that an alien was foreclosed from establishing that alleged ineffective assistance of counsel deprived him of his right to due process, as aliens do not possess any constitutional right to effective assistance of counsel in immigration proceedings, and thus any ineffectiveness of privately retained counsel cannot be imputed to the government for purposes of establishing a violation of the Fifth Amendment. On its face, the holding of the Fourth Circuit regarding this issue seems spectacularly uninteresting—immigration proceedings have long been recognized to be civil in nature, and thus the Sixth Amendment does not provide any right to counsel. Without a constitutional right to counsel, there can be no constitutional violation if privately retained counsel performs ineffectively, as there will be no nexus in those circumstances between the counsel’s ineffectiveness and the state action required for invoking the Constitution. Notwithstanding this seemingly straight-forward analysis, the Fourth Circuit joined just one other court, the Court of Appeals for the Seventh Circuit, in finding that ineffective assistance of counsel in immigration proceedings does not constitute a violation of an alien’s right to due process. Every other court of appeals that addressed this issue has found that, although the Sixth Amendment does not guarantee a right to counsel in immigration proceedings, ineffective assistance of counsel may render the proceedings so fundamentally unfair and so impeding the presentation of an alien’s case that the ineffectiveness could deprive an alien of his right to due process under the Fifth Amendment. These courts have reached this conclusion in a perfunctory fashion, without squarely reconciling Supreme Court precedent that seems to argue strongly against the possibility that the ineffective assistance of counsel may constitute a violation of due process in circumstances where the Constitution does not provide a right to counsel.
In the waning days of the Bush administration, the Department of Labor (“DOL”) issued Interpretive Bulletin 08-1 (“IB 08-1”) concerning the legal obligations of employee benefit plan fiduciaries when they invest the plan assets they control. Specifically, IB 08-1 addresses plan fiduciaries’ duties in the context of “economically targeted investing,” the investment of plan assets in pursuit of benefits for third parties rather than for plan participants and their beneficiaries. IB 08-1 revises prior regulations on economically targeted investing issued early in the Clinton administration.
The assets held in trust by employee benefit plan fiduciaries represent compensation earned by plan participants. In accordance with the duty of loyalty codified by the Employee Retirement Income Security Act of 1974 (“ERISA”), such assets must be invested with single-minded concern for the welfare of the participants and their beneficiaries. Economically targeted investing contravenes ERISA’s duty of loyalty by permitting, indeed encouraging, plan trustees to invest plan assets to generate ancillary benefits for persons other than the participants whose labor is embodied in those assets.
Responding to Judge Arthur L. Alarcón, Remedies for California’s Death Row Deadlock, 80 S. Cal. L. Rev. 697 (2007).
Responding to Jean Rosenbluth, Would Californians Have the Courage of Their Convictions in the Face of Fully Functioning Death Penalty?, 81 S. Cal. L. Rev. Postscript 1 (2008).