The New York Antitrust Bureau, together with the New York Attorney General’s Appeals and Opinions Bureau, filed two Supreme Court amicus briefs earlier this week. In both Leegin and Credit Suisse, New York argues positions adverse to those asserted by the Justice Department’s Antitrust Division. We have the briefs for download here: Leegin, Credit Suisse.

The Leegin amicus brief argues that

The available empirical data support Dr. Miles’s common-sense conclusion that minimum RPM agreements, by directly eliminating price competition, produce the very anticompetitive effect that the antitrust laws seek to avoid: raising consumer prices. …[A]s the economic literature on which petitioner relies acknowledges, the laws succeeded: consumer prices were higher in States that permitted minimum RPM agreements than in States that did not.

By contrast, no empirical evidence shows that minimum RPM agreements have offsetting benefits for consumers. Petitioner relies on a body of economic literature that speculates as to the possible procompetitive effects of minimum RPM agreements. But as Judge Easterbrook has explained, “no economic model is worth much without testing.” … Despite widespread academic interest in the subject, no one has answered Judge Easterbrook’s call for empirical research. … Untested economic hypotheses, whether promising or not, are no basis for overturning this Court’s longstanding precedent.

Even if one could imagine hypothetical scenarios in which a minimum RPM agreement might, on balance, benefit consumers, countervailing interests justify continued adherence to the per se prohibition. Bright-line rules avert litigation by providing clear guidance to businesses that want to avoid antitrust violations. And litigation under a per se rule is far less costly, and far more manageable, for all parties than litigation under a rule of reason. These considerations outweigh any hypothetical imperfections in the per se rule that petitioner asserts.

Here is a synopsis of the argument in the Credit Suisse amicus brief:

This Court should affirm the Second Circuit’s rejection of implied antitrust immunity here. There is no “convincing showing of clear repugnancy between antitrust laws and the [SEC’s] regulatory system” in this case warranting an implied repeal of antitrust laws. See National Gerimedical Hospital and Gerontology Ctr. v. Blue Cross of Kansas City, 452 U.S. 378, 388 (1981). To the contrary, the conduct challenged as anticompetitive in this case has been consistently prohibited by both the antitrust laws and the SEC’s regulatory scheme. As both the district court and the Second Circuit found, the gravamen of the [Complaint] is petitioners’ alleged conspiracy to inflate the aftermarket prices of IPO shares by imposing anticompetitive charges, as well as engaging in impermissible aftermarket “laddering” and “tie-in” arrangements. The SEC has never permitted these anticompetitive activities and lacks the statutory authority to do so….

Moreover, there is no basis in law or reason for the blanket antitrust immunity that petitioners seek, and their arguments supporting immunity are not persuasive. First, immunity is not required by this Court’s decision in Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (2004).

Second, contrary to the suggestion of the United States as amicus curiae, the core conduct alleged here – conspiracy to manipulate IPO aftermarket prices – is not “inextricably intertwined” with collaborative activities that are otherwise authorized by the securities laws. …

Third, if, as petitioners contend, the allegations in the Complaint are overbroad, that would not justify the blanket antitrust immunity they seek here. As the court of appeals concluded, the district court has ample tools available to assure that petitioners are not prejudiced by evidence of the lawful underwriter conduct that allegedly formed the backdrop for the conspiracy. Alternatively, if this Court were to conclude that the district court cannot provide such assurance, the appropriate remedy would not be to immunize the entire IPO aftermarket process from antitrust scrutiny. Instead, the remedy would be to remand the case with directions to the district court to remove from the Complaint any suggestion that respondents are alleging that collaborative activities authorized under the securities laws are illegal under the antitrust laws, and to permit respondents to clarify that these activities merely formed the backdrop for the alleged unlawful aftermarket price-boosting schemes. …

Finally, petitioners are mistaken in suggesting that the Second Circuit’s decision, which preserves the legal standard that has been in place since Congress adopted the Sherman Act in 1890, poses a new threat to this country’s capital markets. The court’s denial of implied antitrust immunity is not new, but instead is supported by both reason and longstanding precedent.

HT to Jay Himes for providing copies of the briefs.

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