Class 3: Modifications to the Structural Presumption
The development of the structural presumption after Philadelphia National Bank (1963) and the last major Supreme Court merger decision in General Dynamics (1974) is one of the more fascinating chapters in antitrust jurisprudence. There is probably no other area of the law where lower courts have departed from Supreme Court jurisprudence more radically over a period of about 30 years, without intervention from the Supreme Court or Congress. The tension between the body of modern (post 1975, or, more specifically, post 1982) lower court merger jurisprudence and the (1962-1975) Supreme Court merger jurisprudence gives many antitrust opinions its distinctive flavor in the form of extremely selective quotations. I am still amazed by then judge Thomas’ statement in U.S. v. Baker Hughes (1990) that
The Supreme Court has a adopted a totality-of-the-circumstances approach to the statute [§7 of the Clayton Act], weighing a variety or factors to determine the effects of particular transactions on competition.You don’t have to be a particularly literal reader of precendent to realize that nothing of that sort can be found in any of the Supreme Court merger cases. Of course, the Supreme Court has embraced more modern economic teachings in Sylvania, BMI, and Kodak, among others, but still, that’s a long way from a “totality of the circumstances” approach to §7 of the Clayton Act. Here are the .pdf slides of our last class on the modifications of the structural presumption after PNB.
Technorati Tags: Philadelphia National Bank, Supreme Court, General Dynamics, antitrust, cardozo
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February 20th, 2006 at 5:03 pm
A minor point: I’d suggest that the “modern” era of merger analysis began more or less with the introduction of the 1982 Merger Guidelines. Although General Dynamics is the last Supreme Court case, I don’t discern much of a Chicago School trend in courts’ merger approach until the introduction of the Guidelines. Also, the HSR premerger filing requirements effective in 1978 radically altered the merger enforcement landscape. For better or worse, our subsequent merger “jurisdprudence” consists mainly of arcane HSR practitioner lore and mystic occasional pronouncements from Greg Werden, with the odd district court or appellate decision offering sporadic guidance along the way.
February 20th, 2006 at 9:18 pm
I agree with your comment, Paul. In particular the HSR Act changed merger antitrust law from an almost entirely litigation-driven discipline to one with a strong emphasis on agency practice. I also agree that the 1982 Guidelines were a turning point in terms of incorporating more modern economic thought. (See the change in the post.)
February 21st, 2006 at 9:14 am
Another very minor correction. It was Justice Stewart in 1966 who said the only consistency he saw in Section 7 cases was that the government always wins. Justice Stevens was not on the Court at that time.
February 21st, 2006 at 9:17 am
I failed to state that Justice Stewart also got to write the majority opinion in General Dynamics.
February 21st, 2006 at 11:29 am
Oops…
Thanks for pointing this out, Harry.