Antitrust Proceduralism

It's that time of day when after two cups of coffee I start having ideas that I will likely never bring to fruition. (It's also the time of day when I'm most vulnerable to suggestions that I take on new projects, when two symposium pieces and a paper in the course of the next six months sounds completely do-able. Spencer asks (post below) how to say "no"; my personal answer is, stay off the caffeine. I've been looking for a new year's resolution . . .)

But here's an idea on which I wonder if anybody has comments: Antitrust Proceduralism. I recently canvassed the surprisingly broad body of writing on schools of antitrust thought, including what are sometimes almost silly debates about whether the writer's forebears were more influential in the development of the law than were another writer's forebears. (My dad can beat up your dad!) I find myself thinking that none of the schools of economic thought are the leading candidates for greatest influence on the modern state of federal antitrust law. Rather, it is the antitrust proceduralists, led by none other than retired Justice David Souter. (To acknowledge two intellectual debts: Amy Wildermuth (Utah) wrote a short piece a few years back in the Northwestern Law Review's online journal, "Colloquy," comparing Twombly with another Souter procedural decision, and bemoaning his getting both wrong. When I read that, I thought instead of the Cal Dental/Twombly duo of opinions, in which the procedural rules the Court adopted, in both cases in opinions by Souter, arguably have a greater impact on antitrust enforcement than any substantive rule of law. My co-author and mentor Mark Anderson also influenced my thinking on Cal Dental.)

For example, consider the fury over Leegin (reversing Dr. Miles). What change in the law really has been wrought? With much respect to the furious, resale price maintenance has functionally been subject to the rule of reason, or even a rule of per se legality, since Colgate in 1919. All the Dr. Miles rule did was pad the pockets of capable corporate counsel, who advised clients in distribution agreements to insert the words "you must or else" instead of "would you please" in the paragraph of the agreement relating to retail pricing.

But Cal Dental takes an enormous class of agreements with a clear and direct impact on prices and output and subjects them to nearly the full rule of reason. The substantive legal standard is no different from what it used to be, but the ability of plaintiffs -- even the government -- to bring cases challenging advertising restrictions, no-competitive-bidding agreements, joint distributorships, certain kinds of information sharing agreements (other examples?) is dramatically curtailed vis-a-vis the world of the quick look. And little needs to be said about Twombly, a decision that many thoughtful antitrust proceduralists abhor. (I don't personally bemoan Twombly, but I may be the only one. Even the usual suspects on the anti-enforcement side tend to be quiet about the case, or applaud the result while saying it is badly reasoned.)

What school of thought drives these decisions? Maybe there's a little bit of Neo-Chicago in all this. Consistent with that idea, Mark and I described the application of the error-cost framework (while not adopting the Neo-Chicago label) in Twombly. I need to investigate further to see whether the same arguments underlie Cal Dental, but I don't think so. At least the false positive language was not employed there.

So would the argument hold? Does it need to be tested empirically first? Or perhaps this a no-duh proposition, which can be resolved by quoting Sir Henry Maine: "Substance is secreted in the interstices of procedure."