Antitrust Doj Areeda Per Se Rule of Reason

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Education andTraining Series

The "Rule of Reason" n AntitrustAnalysis General Issuesederal Judicial enter


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TH FEDERAL JUDICIAL CENTERBoard

The Chief Justice of the UnITed StatesChairmanJudge John D. Butzner, rUnited States Court of Appealsfor the Fourth Circuit

Chief Judge William S SeSSionsUnited States District CourtWestern District of TexasJudge Cornelia G. KennedyUnited States Court oj Appealsfor the Sixth Circuit

Judge Donald S VoorheesUnited States District COUrtWestern District of WashingtonJudge Aubrey E Robinson, Jr.United States District CourtDistrict of Columbia

Judge Lloyd D. GeorgeUnited States Bankruptcy CourtDistrict of NevadaWilliam E FoleyDirector of the AdministrativeOffice of the United States Courts

DirectorLeo LevinDeputy DirectorCharles W Nihan

Division DirectorsKenneth C. Crawford William B. EldridgeContinuing Education Researchand TrainingJack R Buchanan Alice L O'DonnellInnovations Inter-Judicial Affairsnd S}'stems Development and Information Services

Assistant DirectorRussell R Wheeler

152 H Street. NW.Washington. D.C. 20005Telephone 202/633 6011


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THE "RULE OF REASON" IN ANTITRUST ANALYSIS:GENERAL ISSUES

Phi l l ip AreedaHarvard UniversitySchool of LawCambridge, MassachusettsJune, 1981

This work has been developed as a study aid and inconjunction with a program sponsored by the FederalJudicia l Center s Division of Continuing Education andTraining. t is being produced in th is format becauseof the in te res t the topic continues to generate. Thestatements, conclusions, and points of view are thoseof the author. The Center s educational programs aredesigned to allow the presentation of a variety of view-points, perspectives, and conclusions. On matters ofpolicy, the Center speaks only through i t s Board.


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Cite as P Areeda, he "Rule of Reason"in Anti t rust Analysis: General Issues(Federal Judicia l Center 1981)

FJC-ETS-81-1


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T BLE OF CONTENTS

INTRODUCTION . . 1I . ELEMENTS OF RE SON BLENESS . . 2

A. Basic Inqu i r ies . . . . . . . . . 2B. Competi t ive Harm. . . . . . . . . 3C. Redeeming Vir tues . . . . . 5D. Less Res t r i c t ive Alte rna t ives . . . . 8E. Intention . . . . . . . . . . . . 11F. Adminis t rat ive Convenience. . . . 13G. Horizonta l -Ver t ica l Class i f ica t ion . . 16H Common Purpose or Coerced Agreement . 17

I I . PER SE R TION LE . . 19I I I . PER SE VS. RULE OF REASON. 25

A. Core Contras t s ; Ca tegor iza t ion Impulses . 25B. Per Se Rules: Varia t ions , Qual i f i ca t ions ,Exceptions, Defin i t ions . . . . . . . 27C. Rule of Reason Can Be Severe: Limit ing Factual Inqu i r ies and Jury Role . . 37

NOTES 45

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INTRODUCTIONThe Sherman Act proh ib i t i on aga ins t every agreement

in r e s t r a i n t of t rade has been unders tood by the federa lcour t s s ince the 1911 Standard Oil dec is ion to forbidonly unreasonable r e s t r a i n t s . l However, Standard Oilreconci led ea r l i e r ca tegor ica l p roh ib i t ions with i t sown ru le of reason by dec la r ing some r e s t r a i n t s i nhe ren t ly unreasonable or , as l a t e r cour t s put it per seunlawful . I t i s the main purpose o f t h i s b r i e f essayto exp la in the ways in which the dichotomy between perse and ru l e of reason t reatment i s usua l ly overs ta tedand can confuse the unwary. e do so in Par t I I I ,a f te r beginning by ( I ) address ing the components o f theru l e of reason inqui ry , fol lowed with b r i e f comments onfour common confus ions (the s ign i f i cance of adminis t ra t iveconvenience, s t a t e o f mind, hor izon ta l -ve r t i ca l dichotomies and the necess i ty o f agreement , and ( I I ) con-s ide r ing the ra t iona le fo r per se ru les by re fe rence tothe proh ib i t i on of pr i ce f ix ing .

Th s monograph s adapted from VI P. Areeda, Ant i t rus tLaw, Ch. 14 ( for thcoming) which i s the con t inua t ion o fP. Areeda D Turner , Ant i t rus t Law (5 vo l s . , L i t t l eBrown Co. 1978, 1980).


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IELEMENTS OF RE SON BLENESS

A. Basic Inqui r ies .How does one go about applying the ru le of reason ?

I t sure ly cannot be suff ic ien t to see tha t col lect iveaction has rest ra ined a party ' s future freedom ofuni la te ra l act ion. s Chicago Board of Trade2 pointedout , every contract res t ra ins . In an oft-quoted passagefrom tha t case, Just ice Brandeis contrasted the regulat ion and perhaps promotion of competition with i t ssuppression and perhaps destruction. The Court referredto the business charac te r i s t ics of the par t icu la rmarket, the market condi t ions before and af te r thechallenged re s t ra in t , actual or probable ef fec t s , theevi l which the r es t r a in t was designed to correct andthe purpose of the actors .

The inquiry seems three-pronged. (1) What harm tocompeti t ion resu l t s or may resu l t from the col laborators 'ac t iv i t ies? (2) What i s the object they are t rying toachieve and i s t a leg i t imate and s ignif icant one?That i s , what are the nature and magnitude of the

redeeming vir tues of the challenged collaborat ion?(3) Are there other and be t te r ways by which the col laborators can achieve the i r legit imate objectives withfewer harms to competition? That i s , are there lessr es t r i c t ive al ternat ives to the challenged res t ra in t?

s di f f i cu l t as they are, those inqui r ies are mucheasier than the f inal judgment which depends upon somekind of weighing and balancing of pluses and minuses.

2


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Fortunately a sat is fying resolut ion i s possible in agood number of cases where one of the three elements iss ignif icant and the others are not. Where, for examplethe competi t ive harm seem l ike ly to occur and to bes ignif icant in magnitude i f t does occur t is easyto condemn the res t ra in t tha t serves no possible ors ignif icant redeeming vir tue or for which there is aclearly preferable and less res t r ic t ive al ternat iveSimilarly t seems easy to permit tha t res t ra in t whichseems l ike ly to achieve redeeming vir tues of s ignif icantmagnitude where the competi t ive effects seem ei therunlikely to occur or unlikely to be s ignif icant inmagnitude i f they do occur. But solut ions are elusivewhere allowing the re s t ra in t would threaten competi t ionwith s ignif icant harm of substant ia l magnitude butwhere preventing t would apparently deprive society ofs ignif icant and substant ia l ben ef i ts . hen we areunable to quantify and weigh the harms and benefi ts inthe par t icu la r case we must consider administrat iveconvenience in operating the judic ia l system or estimatesabout the balance of harm and vir tue in the general i tyof similar cases.B. Competitive Harm.

The importance of th i s inquiry cannot be exaggerated.Only af ter seeing the possible ways in which a challengedres t ra in t might impair competition can one est imate theprobabil i ty of occurrence judge the l ike ly magnitudedecide what evidence might be probative or formulatetentat ive presumptions to guide the disposit ion of thecase.

Sometimes the competi t ive th rea t wil l be ratherobvious. hen two formerly competing se l lers dis t r ibu te


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the i r product through a single agent with the power tose t the f inal price, they have eliminated price competit ion among themselves. On the other hand, the effectsof product standardizat ion are more subtle. Supposetha t the producers of phonographs eliminate one or morepossible products by, for example, agreeing tha t phonographs wil l be standardized a t 33 rpm. Such standardizat ion would deprive some consumers of a productthey might l ike, might exclude a r ival , and might easethe capacity of each producer to observe the other sprice and thus fac i l i t a te oligopolis t ic pricing,3

s a more remote example, suppose tha t the threete levision networks agree tha t each would se t aside twoprime-time hours each week for quali ty cul tural programming" and also establ ish a procedure for noncompetitive scheduling of such programs so tha t will ingviewers would have an opportunity to watch a l l of them.The ef fec t would be to deprive producers of customaryprogramming of a port ion of the i r previous market andalso to deprive some consumers of the addit ional customaryprogramming which they otherwise would have had. sth i s i l lus t ra t ion makes clear, however, finding someposs ibi l i ty of competi t ive harm i s not to find tha t theharm wil l be s ignif icant in character or magnitude.Perhaps the effects of the qual i ty program se t asidewould seem insubstantial in view of the volume ofcustomary programming remaining. Similarly, a jo intsales agency or component standardization among firmsinvolving a t r iv ia l percentage of the market would haveno rea l ef fec t in view of the very large number ofremaining se l le rs .


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c. Redeeming vir tuesSome res t ra in ts are naked In the sense tha t they

are to ta l ly lacking in any claim to redeeming vi r tueIn tha t event even a modest tendency to impair competi-t ion may be suff ic ien t for condemnation because societyloses nothing benefic ia l when t condemns the nakedres t ra in t

Where the part ies claim a purpose other than thesuppression of competition for i t s own sake w mustask whether the purpose i s Illegitimate whether ther es t r a in t actual ly helps achieve tha t legit imate purposeand whether tha t purpose could be achieved jus t as wellby a substant ia l ly less res t r ic t ive approach. I t i sonly a lf legitimate purpose tha t can redeem a r es t r a in t and legit imacy l i e s in consis tency with the law general lyand consistency with the premises of the an t i t rus t lawsin par t icu la r

Suppose tha t book publishers were to agree tha tthey would publish only pol i t ica l works approved by acent ral committee which they established. Their s ta tedpurpose was to forego publishing defamatory superf ic ia lor unsound books. I suggest tha t such a purpose wouldbe i l l eg i t imate for t deprives the reading public oftha t divers i ty of pUblication for which w value competi-t ion and impedes tha t freedom of pol i t ica l debate whichis vi t a l in a democratic society.

Or consider the IIsplitsll by which competing filmexhibitors agree not to bid against each other for ther ight to exhibi t motion pictures suppl ied by variousdis t r ibu tors Several courts have apparently thoughttha t the objec t of obtaining a lower purchase price wasdesirable even when achieved by a conspiracy.4 Suchcourts were making an elementary error : they were


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assuming tha t the lowering of pr ices by consplracyamong buyers served consumer in te res ts , forget t ing tha tthe objec t of the an t i t rus t laws is not t rans i to rycheapness but free market resu l ts . The court would nothave made a simi lar mistake had t been faced with anagreement among law firms to Ifsplit l recruitment ofyoung lawyers in order to reduce the price (salary)paid them. S

Appraising the legitimacy of a re s t ra in t s objectivewas the subject of the Supreme Court 's decision in the6Professional Engineers case. Competing professionalengineers agreed--in the form of a rule promulgated bythe i r associa t ion-- that they would not engage in pricebidding for work but t ha t a member would discuss pricewith a cl ient only af ter he had been selected for aproject . This r es t r a in t c lear ly reduced price competi t ionamong the engineers, and tha t indeed was the i r objective,for they defended the r es t r a in t on the ground tha t tprevented excessive price competi t ion which would haveled to in fe r io r engineering work endangering the publicsafety . n condemning the res t ra in t , the lower courtsrefused to make a f inding of fact about the re la t ionshipof price competition to in fe r io r engineering or of poorengineering to the public safety . This resu l t andapproach was affirmed by the Supreme Court.

Although the Court used rule of reason ra ther thanper se terminology, i t s re ject ion of the defendant 'sclaim of redeeming vir tue c lear ly was not based on thefacts of the part icular case, because the Court affirmedthe condemnation of the associa t ion s rule without anyf indings about whether price bidding would have led toqual i ty degradation and harm to the public . The Courtmight have said, although t did not, tha t historyteaches us tha t ca r te l price f ixing not general ly


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necessary to assure product quali ty; nor would t besuff ic ien t to do so, given the fact tha t some marginalproducers would be tempted to shade quali ty, no matterhow high the price . The Court seemed to say tha t thequal i ty-protect ion claim was i l l eg i t imate in principlebecause inconsistent with the the Sherman Act 's mandateof competition. The defense i t s e l f res ts on the premisetha t the r es t r a in t will in fact increase prices andthus re jects the Sherman Act 's in t r ins ic premise tha tcompetition in price and qual i ty is desirab

This resul t is not the l eas t b i t surprising, butfive members of the Court used broad language tha tmight seem too categorical . The Court explained tha tthe rule of reason is not hospitable to every claimwithin the realm of reason but only to matters bearingon the competitive signif icance of a res t ra int . TheCourt suggested tha t we are not to inquire whether ther es t r a in t accomplished an objective tha t was in thepublic in teres t but only whether the r es t r a in t actual lyserved to increase competition. Such a rul ing seemsquite jus t i f iab le when appraising substant ia l res t ra in tsthough perhaps too l imit ing when appraising s l ightres t ra ints . Bear in mind tha t even a s l ight res t ra in tcan be unreasonable when unjust i f ied. Whether theCourt meant to be so categorical i s not clear ; in anyevent, the general language need not confine the courtswhen confronted with a case where the r es t r a in t i s farless egregious than the engineers ' clear attempt tokeep pr ices high.o indicate the possible implicat ions of Professional Engineers language, re turn to the hypothet icalagreement among the three networks to se t aside t imefor quali ty program. Is the objective of more diversete levis ion programming legit imate in principle under


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Engineers? At r s t blush, t appeals to a broaderclaim of the IIpublic i n t e res t without obviously servingto increase competi t ion. Yet, one might wonder whethertha t objective might be legi t imate enough and substant ia lenough n the l ight of the re la t ive modesty of theres t ra in t created. The l as t query could be avoided i fwe may express cul tura l diversi ty n terms of increasedcompeti t ion. The economic argument would be tha t thete levis ion industry exhibi t s th i s market fa i lure :given tha t government al locat ion l imits the number ofchannels and tha t each s ta t ion or network seeks tomaximize i t s advert is ing revenues and therefore i t saudience for each broadcast hour, cul tural servicestha t viewers and advert i sers are ready to support arenot offered (unlike newspapers which can simultaneouslyprovide cul ture and comic s t r ips ) . I t would then beargued tha t the time set-aside for qual i ty correctsth i s market lure and thereby brings about a more

competitive resu l t . without necessari ly adoptingth is argument, I am suggesting tha t the Engineerslanguage may generate increased efforts to characterizevarious public in te res t jus t i f ica t ions as increasingcompeti t ion n the sense tha t they are correct ingvarious kinds of market faiD Less Rest r ic t ive Alternat ives.

Grant the defendants a legit imate objective.Grant tha t the r es t r a in t is necessary n the sense tha tt t ru ly serves tha t legi t imate objective. s t i l l , onemust ask whether there is a s res t r ic t ive way toaccomplish tha t objective or, s ta ted another way,whether the res t r ic t ion is lIreasonably necessary toachieve i t .


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Some commentators have read the Supreme Court 'sSylvania decision7 as denying the significance of lessre t r ic t ive al ternat ives. That case involved a so-cal led

location res tr ic t ion which prevented a dealer fromse l l ing the manufacturer 's product from any locat ionother than those approved by the manufacturer. Fromtha t locat ion, however, the dealer was free to se l l toany customer, wherever located. Although locat ionl imitat ions are less res t r ic t ive than customer ort e r r i to r i a l l imi ta t ions on those to whom one may se l l ,the Court held the former governed by the ea r l i e rSchwinn rule8 forbidding the l a t te r , and then overruledSchwinn. However, the Court 's fai lure to make anythingturn on the defendant's choice of the less res t r ic t ivel imi ta t ion does not imply indifference to the relat iveseveri ty of re la ted res t ra ints . Rather, the Courtdecided tha t such a difference was an insuff ic ientbasis for a per se condemnation of one while allowingthe other. Both were to be t rea ted by the rule ofreason. But the Supreme Court i t s e l f did not decidethe reasonableness of the res t ra in t before i t . nremand the res t ra in t was held reasonable, par t ly on theground tha t the locat ion res t r ic t ion was one of theleas t res t r ic t ive forms of control l ing intrabrand9competl t lon.

The key di f f icul ty ln examining less res t r ic t iveal ternat ives l i es in deciding how refined a dis t inct ionto make among the possible al ternat ives avai lable tothe defendants. Imagine a jo int research venture amongthe twenty equal-sized members of an industry andsuppose tha t there would be s ignif icant benefi ts throughthe elimination of wasteful duplication and through theachievement of scale economies in research. Obviously,the possible competitive harm--impairment of r ivalry in


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research--would be reduced i f the collaboration were inthe form, say, of four jo int ventures among groups off ive firms each. In order to require tha t less re s t r i c -t ive a l ternat ive how sure must we be tha t equal benefi t swould be achieved by such smaller-scale collaboration?

nd i f the defendants had original ly chosen to use foursuch ventures, should we require f ive of four firmseach or ten of two firms each? That i s one can frequently conceive of a less res t r ic t ive approach. Yet, torequire the very l eas t res ct ive choice might in te r fe rewith the legit imate objectives a t issue without, a t themargin, adding tha t much to competition. nd tha t i swhy courts occasional ly speak not of the "least" re s t r i c -t ive but merely of a "less" res t r ic t ive al ternat ive .Even then, those objecting to a res t ra in t can f requentlyimagine a less res t r ic t ive al ternat ive . n al ternat iveformula i s perhaps clearer In cal l ing only for ra thergross comparisons between the course chosen by thepart ies and the other courses of action tha t might havebeen chosen. Some courts ask only tha t the challengedr es t r a in t be "reasonably necessary" to achieve a l eg i t i -mate objective. I t would not be i f equal benefi t scould be obtained through substant ia l ly ss res t r ic t iveroutes. Yet, a r es t r a in t can be "reasonably necessary"even though some less res t r ic t ive al ternat ive exis ts .This "reasonably necessary" formula thus highlights theneed for a discr iminat ing judgment about the allegedlyless r es t r i c t ive al ternat ives: how much worse for thepart ies ; how much be t te r for society; enough differenceto be reasonable grounds for condemning what the part iesdid?


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E Intention.In some ways, in tent ion and purpose are the most

confusing ideas in a l l of ant i t rus t law. Firs t , as aprerequis i te to i l l ega l i ty in some s i tuat ions , a requlre-ment of a cer ta in in tent ion is f requently superfluous,for the competitive impact of the conduct can be ful lyjudged without reference to the ac tor s s ta te of mind.Second, even worse, ta lk of intent ion frequently masksa fa i lure to analyze the conduct. The judge or juryseems more comfortable in looking to the defendant 'ss ta te of mind rather than to the more complex analysisof whether his market behavior is desirable or not.Third, even when intent ion is relevant, the t r ibunalmay fa i l to define what in tent ion t is looking for:an in tent to perform an act ; an in tent to do an actwith knowledge tha t t wil l have a cer ta in impact onthe pla in t i f f or the market; an in tent to affec t thepla int i ; an in tent to affect the t rade in one 's ownproduct; or an in tent to affect in an adverse way theoveral l market? Fourth, frequently the t r ibunal fa i l sto dist inguish properly between an i l l i c i t anticompeti-t ive in tent and a lawful competitive in tent . Courts orjur ies sometimes act as i f the desire to gain businessor to win business from a r ival is something other thanlawful competition which i s , af ter a l l , the process oft rying to prevai l over r iva ls . The fact which contami-nates such an in tent is the ef for t to prevai l by impropermeans. o be sure, purpose or in tent ion can i l luminatethe propriety of the means chosen, especial ly where theconduct i s competitively ambiguous. Thus, the t r ibunalconfronted with a res t ra in t may properly inquire intothe defendant 's purpose as a means of ident ifying


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poss ib l e redeeming v i r tues . That i s , the defendantsare in the bes t pos i t ion to t e l l us what l eg i t imateobjec t ive s they alm. This search i s not merely forthe defendants ' subjec t ive in ten t ion but for a aim o fj u s t i f i ca t i on . withou t such a j u s t i f i ca t i on , one mightsay t ha t the defendants ' purpose in adopt ing a r e s t r a i n tmust have been unlawful . But it seems more s ghtforward to say a r e s t r a in t i s unreasonable when noredeeming v i r t u e 1S cla imed to j u s t i fy it

Suppose, however, t ha t the defendants ' sub jec t ivei n t en t ion (lito harm r i va l s seems to d i f fe r from theclaimed objec (lito se rve customers be t t e r ) . Ofcourse, the di f fe rence may be super f i c i a l : serv ingcustomers be t t e r does harm r i va l s . But 1mag1ne asub jec t ive i n t en t ion s t a t ed with utmost c l a r i t y : Itourob jec t i s to harm r i va l s by means which we can p laus ib ly

aim to bene t customers but which we know do not .cour t might reasonably decide to forego the complex

1nqu1ry i n to whether customers are bene f i t ed o r not andsimply accept defendants ' word t ha t they are not .

Neverthe ss , the ques t ion judges i s t h i s : 1Ssuch a "smoking gunll so r a re in t r u s t l i t i g a t i o nt ha t the search it i s not worthwhile? Bear in mindt ha t it i s such a search t ha t so of ten makes a n t i t r u s tl i t i g a t i o n in te rminab le with the massive discovery or

a l t ha t threatens to overburden the system. Yetjudges are unders tandably r e l u c t a n t to exclude anythingt ha t might be r e levan t . nd it i s even d i f f i c u l t toexclude the seemingly i r r e l e va n t fragment when a par typromises to connect it up with some other seeminglyi r r e l e va n t fragment about i n t en t i o n to pa in t a meaningfulp ic tu re . At the very l eas t , the cour ts can c l e a r ly gomuch fu r the r than they have in de with grea te rc l ty the na ture o f the unlawful i n t en t i o n in pa r t i c u l a r


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circumstances and in turn ing d i r e c t ly to the appraisa lof conduct .

One example of the l a s t s tep under Sherman Act klS t e Second C l r cu l t dec ls lon In t e Ber ey case.

The lower cour t had allowed the jury to f ind c e r t a i nconduct unlawful on the bas i s of an improper in ten t ,while the Court o f Appeals simply he ld the conduct tobe pr iv i l eged compet i t ion as to which i n t en t i o n wasi r r e levant .

In summary, a claim of l eg i t imate business purposemay bear on the ana lys is of a chal lenged r e s t r a in t int h ree ways. Fi r s t , a t a mlnlmum, t shows t ha t thedefendant ' s i n t en t i o n i s not who ant icompet i t ive ,prevents the infe rence of any ant icompet i t ive i n t en t ionfrom the chal lenged conduct alone, and probably helpsreso lve any other ambiguous evidence about i n t en t ion Inthe defendant ' s favor. Second, a good in ten t ion ,whether or not exculpatory as such, bears on the pred ic -t i on o f e f fec t s . A l eg i t imate and innocent explana t ionof the chal lenged conduct shows t ha t a r a t i o n a l defendanthas a reason fo r ac t ing o the r than a t t a inment o f anant icompet i t ive e f f e c t . without necess ly provingthe absence o f such e f f e c t s , a good i n t en t ion reducesthe l i ke l ihood t ha t de t r imenta l e f fec t s are presen t .Third , a good i n t en t i o n reduces the l ike l ihood t h a t thecha l l enged conduct i s , on balance , de t r imenta l . Whateverthe de t r imenta l e f fec t s or tendencies might be, thecha l l enged conduct cannot be unequivocal ly ant icompet i t ivewhen t a lso serves l eg i t imate bus iness purposes .F. Admini s t ra t ive Convenience.

Is adminis t ra t ive convenience l in admin i s te r ingl ega l ru les r e levan t to the wise formulat ion of the


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appropriate legal rule? n affirmative answer seemsc both in principle and practice, especial ly whenthe issue is impl ic i t . Once made express, however, theproposit ion tha t adminis t rabi l i ty properly affects ruleformulation has apparently troubled several courts .For example, the marginal cost t e s t for predatoryp cing jus t i f i e s i t s express departure from an a lstandard because there is no pract icable way for thecourt to apply the ideal . The Seventh Circui t recog-nized the u t i l i t y of the marginal cost t e s t but declaredtha t the court could not countenance a departure from

2the ideal merely for the convenience of the courts.The court then reached the same resul t as the marginalcost standard required. Another court took the sameview and supplemented the marginal cost t e s t with asearch for an improper in tent , which was not found. 3The s ixth Circui t faced with a magazine dis t r ibu torterminat ing a subdealer acknowledged the di f f icul ty offorcing the defendant to appoint subdealers and ofdefining the terms of dealing. 4 Nevertheless thecourt declared tha t the administrat ive di f f icul ty indeciding upon the terms of ver t ica l dealing was insuc ground for denying the pla in t i f f ' s r ight II

There is here an obvious dilemma. On the one handone must not burden the courts , l i t igants , or actorsplanning t he i r affa i rs with rules whose applicationdepends on tha t which cannot be known or determinedeffect ively . On the other hand, administrative di f f icul -

es are always present and cannot serve as an excusefor ignoring a l l potent ia l ly serious anticompetitlvethreats . Indeed, judges are understandably re luctantto deny a r igh t or remedy merely because of administrat ivedi f f i cu l t i e s . This judic ia l impulse has cer ta inly beenref lected in the courts ' will ingness to implement


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cons t i tu t iona l mandates such as reapport ionment o rdesegregated schooling notwi ths tanding enormous adminis-t r a t i ve d i f f i c u l t i e s . By comparison, d i f f i c u l t i e s inapply ing a n t i t r u s t ru les must seem mere c h i l d s play .Moreover, an otherwise super ior l ega l ru le su re ly oughtnot to be r e j ec t ed merely because it i s s l i g h t l y mored i f f i c u l t to adminis ter .

Yet, it 1S an unW1se ru le t h a t cannot be co n s i s t en t ly app l ied without c h i l l i ng des i rab le compet i t ivefo rces . ru le t h a t cannot be i n t e l l i gen t l y appl iedi nv i t e s confus ion and quixot ic r e s u l t s . Such tendenciesproduce r e s u l t s t ha t are themselves con t ra ry to thes t a tu to ry purpose. t may a l so be poin ted ou t t h a t thes t a tu t e o f frauds , s t a tu t e o f l imi t a t ions , laches , theparo l evidence ru le , and many s imi la r doc t r ines r e f l e c tthe a l toge ther customary and hard ly novel or excep t iona l not ion t h a t adminis t ra t ive convenience may i t s e l fbe an element o f j u s t i c e . In the a n t i t r u s t world inpa r t i c u l a r , the i nab i l i t y o f the cour ts to make concretejudgments about pa r t i c u l a r matters in pa r t i c u l a r casesi s f requen t ly the bas i s e i the r for per se ru les whichmakes inqui ry to those mat te rs l ega l ly i r r e l e va n t orfor powerful presumptions which a l low excep t iona lproofs to cont ro l but which govern othe r c a s e s - - a l l 1nthe name o f adminis t ra t ive convenience.

The ques t ion i s not one t ha t can be resolved by anappeal to absolutes . t i s r a th e r a ques t ion o f judgmentabout (1) the r e l a t i ve wisdom o f a l t e rn a t i v e approachesor ru les , (2) the r e l a t i ve ad min i s t r ab i l i t y o f eachsuch ru le , (3) the consequences of uncer ta in ty orerroneous app l i ca t ion on the p a r t i e s market behavior ,on the burden o f l i t i ga t i on , and on soc ie ty , and,bear ing on the l a s t poin t , (4) the r e l a t i ve grav i ty o fthe an t i soc ia l consequences t h a t might flow from uncon-


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t ro l led behavior adjusted for i t s frequency, and (5) therelat ive gravity and frequency of the antisocial consequences of exceSS1ve or erroneous control of suchbehavior.G Horizontal-Vertical Classification.

Agreements restraining trade are customarilydivided into "horizontal" agreements among competitorsand "vert ical" agreements between suppliers and customers.Horizontal agreements threaten the achievement of ant i t rus t goals by eliminating competition among the p r t ic i -pants and thereby allowing them to enhance the i r col lect ive prof i t s to the detriment of consumers. That sameunhappy end might also be sought by horizontal agreements which preempt suppliers or outlets and therebyexclude other actual or potential competitors. Thel t te r type of exclusion might also be practiced by thesingle firm through i t s vert ical arrangement withsuppliers or customers. And ver t ica l res tr ints on thedist r ibut ion of a single brand might have the effect off c i l i t t ing collaboration among manufacturers or ofl imit ing competition th t would otherwise occur at,say, the re t i l level. At the same time, the jus t i f ic -t ion for some vert ical res tr ints (for example, te r r i -tor i l l imits on dealers ' resale of a given brand l5sometimes resembles th t for a related horizontalres t r in t (for example, t e r r i to r i l l imits on sale of abranded good made by a joint venture formed by competingf 1rms16) .

Although many vert ical arrangements have characteri s t i cs distinguishing them in important ways from thebulk of horizontal arrangements,17 horizontal andvert ical res t r in ts do not always threaten competition


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in different ways, or cal l for different analysis . Thehorizonta l -ver t ica l c lass i f ica t ion is often helpful andconvenient. But there i s no need to define watert ightand mutually exclusive classes of res t ra ints . Whetherhorizontal or ver t ica l the question is always one ofcompeti t ive effects and redeeming vir tues . The horizontal ver t ica l dis t inct ion i s relevant only insofar as tbears on the assessment of competitive evi ls or jus t i f ica-t ions .H Common Purpose or Coerced Agreement.

We have been emphasizing and t rying to understandthe nature of the "unreasonable res t ra in t of t rade"tha t Sherman Act 1 is understood to prohibi t . However,1 does not forbid trade res t ra in ts as such but onlythe "conspiracy" (or "contractll or "combination") inres t ra in t of t rade. We cannot pursue the conspiracyissue here, but only note br ie f ly tha t the courts haveregularly embraced within the conspiracy concept tha tunila tera l action which compels an "agreed" course ofaction by another. Consider the firm which threatensi t s r iva l "Join with me in fixing price or be ruined. 1IReluctant assent by the r iva l forms a conspiracy.similarly, consider the supplier who says to a customer,III will not se l l you gasoline unless you buy your t i re sfrom me 1I The buyer who assents has joined a conspiracy.

The language of conspiracy may seem odd, especial lyin the l a t t e r case, where we seem to observe unila tera lexert ion of power by the supplier. But my immediatepurpose is not to jus t i fy the usage but only to remindthe reader tha t the reach of l!s conspiracy provisioncan be quite broad. Indeed, t i s sometimes stretchedto reach entire ly unila tera l conduct by pretending tha t


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the actor has conspired with those he has hired tocarry out his wil l or with member of the s me corporatefamily, such as wholly-owned subsidiary. But th t i s

18another story.


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I I .PER SE RATIONALE

Every reader of th i s monograph is aware tha tprice f ixing is unlawful per se. I This proposit ion 1S

clear enough although we shall see in Part I I I tha tthere are some di f f icul t ies in defining IIprice fixingand tha t the kinds of inqui r ies excluded by the persell character izat ion may vary quite a lo t . Here, weput those di f f i cu l t i e s to one side and focus on hardcore agreements among competitors f ixing a minimumprice or maximum output. such an agreement will becondemned without proof tha t the defendants have affectedprice or have the power to affect price and with vi r tua l lyno room for exculpation. That th is is the case isbr ie f ly sketched below before turning to the question:why should the powerless conspiracy be condemned a ta l l?

In 1897 the Supreme Court was faced with an agreementamong eighteen lroads control l ing r a i l t ra f f ic westof the Mississippi River. The ra i l roads had created anassociation which would f ix fre ight ra tes for a l l ofthem, thus undoubtedly res t ra ining each member's subsequent freedom to t rade. The Supreme Court condemnedthe r es t r a in t because condemned every r es t r a in twithout exception. 19 The Court then cut-back the sweepof i t s condemnation of every res t ra int in three, d d' 20 t dsteps: 1 t excepte 1n 1rect res t ra1nts , sugges etha t res t ra in ts val id a t common law were not ShermanAct res t ra in ts a t al l ,21 and then announced theso-cal led rule of reason 1n the Standard Oil case of

19


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1911: lithe standard of reason was intended to bethe measure for determining whether, in agiven case, a part icular act had or had not broughtabout the wrong against which the s ta tu te provided. I22

But Standard oi l purported to reconcile the resul tsof the early cases by proclaiming tha t the rule ofreason did not save tha t which was inherently unreasonable, and the case was so in terpre ted in TrentonPotter ies where the Supreme Court refused to be drawnin to consideration of whether the prices fixed by agroup of businessmen were or were not Ireasonable. 23Not only are the c r i t e r i a of reasonableness elusive,but to lera t ion of pr ice f ixing implies continuoussupervision. The price or the circumstances may changesuch tha t yesterday 's reasonable price is no longerreasonable today. The Supreme Court concluded tha tuniform price f ixing by those control l ing in any subs t an t i a l manner a t rade or business was prohibiteddespite the reasonableness of the part icular pricesagreed upon. Observe tha t the Trenton defendants didhave market power, as did the price-f ix ing defendantsin the famous Socony decision of 1940. 24 The defendantsthere were found to have affected prices . Nevertheless,the Court made clear tha t nei ther power nor ef fec t wasrequired to establ ish the violat ion.

But why should society invoke expensive prosecutorialmachinery or impose burdensome sanctions on those whocause no harm? To be sure, the powerless conspiracyref lec ts an attempt to res t ra in t rade, but ShermanAct l lacks an expl ic i t attempt clause. In any event,the class ic concept of attempt requires tha t there bepower to bring about the forbidden resul t .

Of course, the conspirators believe tha t they havepower, else they would not engage in the ac t iv i ty . In


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tha t sense, the conspiracy demonstrates a dangerousprocl ivi ty . But tha t alone would not seem suff ic ien tgrounds for punishing those who are mistaken.

However, the c r i t i ca l point is not whether the lawshould or should not condemn the harmless r es t r a in t buthow the law should proceed in the face of uncertainty.n inquiry into power i s not socia l ly cost less , but

requires the expenditure of social resources of courtsand lawyers to prove or disprove the power of thepar t ies . There i s no good reason to make tha t expendi-ture i f the conduct in question to ta l ly lacks redeemingvir tue such tha t the only thing to be said in thedefendants ' favor i s tha t they t r ied to harm the publicbut might possibly have lacked the power to do so.

One immediately sees then tha t the presence orabsence of redeeming vir tues i s the c r i t i ca l inquiry.I f redeeming vir tues are absent, then we know tha tsociety loses nothing by condemning the res t ra in t evenwithout inquir ing into the power of the col laborators .On the other hand, i f redeeming vir tues are present,then condemning the powerless collaborat ion wouldsacrif ice those social benefi t s without increasingcompeti t ion. Observe tha t the inquiry must be two-pronged: are there social benefi t s to be at ta inedthrough price f ixing e i ther in the par t icu la r case orin the general i ty of cases? A negative answer forevery case tha t we can think of creates a very strongbase for condemning price fixing categorically.

Whether there are any social benef i ts to be achievedthrough private pr ice f ixing is not a topic tha t can bedeveloped in th i s monograph. I refer the reader to a

d e1 here. 25 1 th a tconC1se 1SCUSS10n sew My conc US10n 1Ssocial benef i t from private pr ice f ixing is conceivablein some rare circumstances but is ra ther unlikely in


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frequency or magnitude and i s always hard to prove.Furthermore, the achievement of any such benefi t i salways premised on the existence of power to af fec tprices; otherwise, the asserted benefits could not beobtained a t a l l . And where there i s such power, t isl ike ly to be exercised in the par t ies in teres t ratherthan in the publ ic s interest . Finally, the ident i f i cation of such benefits in practice is exceedinglydi f f icul t . Whether or not the reader agrees with theseconclusions, they are unquestionably a t the heart ofthe per se condemnation of private price fixing.

To sum up, the premises for per se condemnation ofprivate price fixing are these. (1) Such price fixingi s tempting to businessmen but dangerous to society;tha t i s , the conduct is highly pernicious. (2) Theconceivable social benefits are few in principle, smallin magnitude, speculative in occurrence, and alwayspremised on the existence of price-f ixing power whichi s l ikely to be exercised adversly to the public in teres t .(3) Toleration implies a burden of continuous supervisionby the courts which consider themselves i l l - su i ted fortha t purpose. (4) Although a social jus t i f ica t ionwould seldom be vindicated in fact , even i f suffic ientin principle, t will be asserted in every case andthus complicate l i t iga t ion and weaken the force of theprohibit ion. (5) categorical prohibit ion offers aclear instruct ion to businessmen, warrants strongsanctions against violators, and thus diminishes thel ikelihood that the pernicious practice of price fixingwill take place. The key points are the f i r s t two, andwithout them there 1S no jus t i f ica t ion for categoricalcondemnation.

Some courts have apparently jus t i f ied a per seprohibit ion solely by reference to the administrative


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inconvenience of t ry ing to make a more refined judgment1nt e part1cu ar case. 26 But t h' S seems c I ear I yerroneous ( jus t as t i s also erroneous to fa i l to giveweight to administrat ive convenience in ru le formulation).The administrat ive dif f icu l ty of assessing a par t icu la rac t s competitive merits or demerits can jus t as eas i lyjus t i fy a rule of per se lega l i ty as a rule of per sei l lega l i ty . One can only choose between them on thebasis of a generalized judgment about the balance ofharm or benefi t in the preponderance of cases of thesor t before the courts . Of course, such judgments willnecessari ly be rough in character and subject to revi-sion over t ime in the l ight of improved knowledge oranalysis .

There S no general formula by which one can saywhat balance of harms and benefi t s jus t i f i e s categoricalprohibit ion, although one can specify the questionstha t might be asked. Is there a reasonable l ikelihoodtha t conduct of the kind in question can benefi t theeconomy? Are pernicious effects l ike ly to accompanymost concrete manifestations of th is kind of conduct?I f pernicious effects are l ike ly to be frequent, are la t ive ly absolute prohibi t ion might be jus t i f iablewhenever benefi t s are infrequent, or benefi t s l ike ly tooccur most frequently are re la t ively small, or anys ignif icant benefi t s tha t do occur are readi ly detectable(and therefore proper subjects of an exception to ageneral condemnation). Similar ly, i f s ignif icantsocial benefi ts are l ike ly to be frequent, a re la t ivelyabsolute permission might be jus t i f iable whenever theharms are infrequent , or such harms are re la t ive lysmall, or any s ignif icant harms are readi ly detectable(and thus grounds for an exception to the generalto lera t ion) .


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he more one examines per se rules and the i rpremises, the clearer t becomes th t they are a speciesof 1) st re decis is and of 2) presumptions of varyingst rengths.


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1PER SE VS RULE OF REASON

A Core Contrasts; Categorization Impulses.An obstacle to the sensible analysis of res t ra in ts

of trade i s the dichotomy between per se and rule ofreason cases and the misconceptions of each which wil lbe discussed in subsequent paragraphs.The opposed concepts are c lear enough In the i rcore i l lus t ra t ions An act tha t i s unlawful whenevert occurs and regardless of the circumstances may be

said to be unlawful per se . By contras t , wherelega l i ty depends upon an appraisal of the circumstancesof a challenged act , the case i s said to be governed bythe rule of reason. II Thus defined, the two categoriesare indeed opposed. But use of these categories canhave the pernicious effec t of confusing the unwary.The confusion ar ises from several sources. The dichotomybetween the per se and ru le of reason categories i sl ess sharp than f i r s t appears. The courts often saytha t tying agreements are unlawful per se and yetrecognize the i r lega l i ty in some circumstances. Theysay tha t a pract ice i s subject to the rule of reasonand yet condemn t very readi ly in most of i t s manifesta-t ions . They say tha t boycotts are unlawful per se andthen manipulate the defini t ion of boycottll to excludecerta in pract ices tha t seem to be boycotts.

We are not suggesting tha t the courts are beingwhimsical or fa i th less to the i r mission. Rather, theyare responding quite in te l l igen t ly to the c lass i f ica t ion

25


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s t ra i t jacket with which they have bound themselves andwhich they have di f f icul ty escaping for four in te r re la tedreasons. Firs t the cause eas ies t for lawyers to seeis precedent: the cases and especial ly Supreme Courtcases use the per se idea and the rule of reason contrastand thus seem to impose tha t dichotomy on lower orl a te r courts. Second, the posture of l i t iga t ion oftenseems to require an early pigeon-holing instead of morerefined analysis of how a challenged practice re la testo ant i t rus t goals. A pla in t i f f understandably wishesto al lege and prove as l i t t l e as possible. e wil l t ryto f i t the defendant 's conduct, of which he complains,into a per se category. The defendant wil l of courseres i s t the class i f ica t ion in an ef for t to jus t i fy hisconduct and perhaps even to end the su i t of thosepla in t i f f s who lack the energy, time, money or evidenceto al lege and prove the existence of an "unreasonable"res t ra in t of t rade. Accordingly, the courts frequentlyfind themselves dealing with alleged res t ra in ts interms of class i f ica t ion schemes tha t are often arguedabout abstract ly and without much relevance to theprobable effects or jus t i f ica t ions of the challengedconduct. Third, such abstract arguments about c lass i f i -cat ion often assume l i t t l e real understanding of thepurposes of ant i t rus t law or the competitive significanceof par t icu la r pract ices . Such arguments are thereforecongenial to those lawyers and judges who have not hadthe opportunity to probe very deeply into the analysisof ant i t rus t problems.Fourth, judges and l i t igants often have the misconception tha t the c lass i f ica t ion per se or rule ofreason, necessar i ly determines what must be alleged andproved in the par t icu la r case, what must be made the


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subject of detailed findings, or what must be submittedto the jury.

In the next several paragraphs, w show that perse rules are much looser in the i r condemnation than 1Soften supposed, that the rule of reason can be muchmore severe than is commonly assumed, and tha t thecategorizat ion does not determine, and often obscures,what should be alleged, proved, or submitted to theJury. To cr i tc ize class if ica t ions , however, 1S not tosuggest tha t courts should be more hospitable to certainpract ices . Rather, t suggests tha t w should demystifyant i t rus t jargon and do a bet ter job of saying what wmeanB Per Se Rules: Variations, Qualificat ions,Exceptions, and Defini t ions.

Summary seeming inconsistencies in the applicat ionof per se rules and in the use of per se language canreadily be explained. For one thing, "per se i l l egal i tyexpresses quite different degrees of preclusion ofcertain facts or pol ic ies in the par t icu la r case.Secondly, exceptions to per se condemnations are expresslyadopted. Thirdly, the conduct tha t i s subject to agiven per se rule wi l l be defined with varying degreesof inclusiveness. such definit ions often ref lec t thefactual inquiries and policy considerations whichsuperf icial ly seem to be precluded by the existence ofa per se rule . Indeed, in each of the preceding threerespects , the courts are responding in varying degreesto the factual inquiries and policy considerations tha twould be invoked in a rule of reason inquiry concerningthe challenged conduct.


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Varying in tensi ty . At base the notion of per sei l l ega l i ty excludes considerat ion-- to ta l ly or beyondsome degree--of some factor tha t might otherwise seemrelevant . To characterize a r es t r a in t as unlawful IIpersell may mean only tha t the court will dispense withproof of actual harmful effects in the part icular case.Or t may mean tha t the court will not require anyproof of power to create harmful effects . Or t canalso go so far as to mean tha t the challenged conductS unlawful without the poss ib i l i ty of any exculpation

or jus t i f ica t ion in the part icular case. At i t s fu l les tflowering t might preclude consideration of everythingbeyond the name of the conduct. For example pricef ixing among competitors is condemned with the greates tseveri ty although there may be exceptions and f lexibi l i tyin the def ini t ion even there. Boycotts are also condemnedseverely but with enormous f lexibi l i ty in the def ini t ionof the category. Tie-ins are often said to be i l l egalper se but some consideration of power and effec t arebui l t into the def ini t ion of the prohibited conduct.In each of these instances moreover the court ' srecept ivi ty to exceptions and narrowing definit ionsvaries widely with the part icular nature of the challengedconduct of i t s probable effec t in the general i ty ofcases and the nature of the claimed defense.

I t is hardly surpris ing tha t the nuances of suchvar ia t ions cannot be captured in a single contras tbetween a per se rule and the rule of reason.

Express exceptions. What is most surpris ing tothe l inguis t ic pur is t S tha t some conduct can be bothlIunlawful per sell and yet lawful 1n the par t icu la rcase. That resul t can be s ta ted 1n ei ther of two forms

( I ) l y is unlawful per se except tha t t islawful in s i tuat ion Zll; or


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( I I ) l Iy which i s defined to exclude s i tua t ion 2i s unlawful per se.

A court ' s choice between these forms of statementdepends upon the apparent room for maneuver in thedefini t ion as i l lus t ra ted below. Here we focus on theexpress exception which highlights the nature of ruleformulation very neatly.

Consider what an in te l l igent court could reasonablyhave in mind when t declares a cer ta in pract ice unlawfulper se. n the one hand courts using th is languageclear ly mean to address more than the speci f ic actuals i tuat ion before them. Indeed the per se character iza-t ion usual ly emerges only af ter the courts have hadsome considerable experience in appraising a par t icu la rpract ice . 27 n the other hand the reasonable judgecondemning pract ice Y with per se language cannot meanto condemn without speci f icat ion or analysis a l lunconsidered varia t ions of tha t pract ice in everypossible context . Even general formulations tha tattempt to define categories of factors tha t should beconsidered or excluded must be subject to the samereservations. sensi t ive judges have no di f f icul tyrecognizing these points . And occasional ly a judgespeaks expressly to i t , as did Judge Van Dusen in theJerrold Electronics case:

Any judic ia l ly , as opposed to legis la t ively ,declared per se rule i s not conclusively bindingon th is court as to any se t of facts not basic lythe same as those in the cases in which the rulewas applied. In laying down a rule a court wouldbe in effect , s ta t ing tha t in a l l the possibles i tuat ions t can think of t i s unable to seeany redeeming vir tue in . [the pract ice involved]which would make them reasonable Therefore


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while the per se rule should be followed in almosta l l cases, the court must always be conscious ofthe fact tha t a case might ar ise in which the

indicate tha t an in jus t ice would be done bybl indly accepting the per se rule., ,28Does th i s mean tha t per se rules are merely rules

of s decis is , tha t only the precise pract icespreviously adjudged without redeeming vir tue can becondemned per se? In a sense, the answer is affirmative,but the per se idea is not quite so l imited. anypract ices are close enough to those previously condemnedas without redeeming vir tue and without any plausiblenew claim of redeeming vi r tue tha t they can readi lyf i t within the previous condemnation.

Jerrold is a frank recognition of the room forexceptions to an apparently applicable per se condemnation.I t makes clear tha t so-cal led per se rules are simplyexamples of the presumptions tha t exis t throughoutant i t rus t law. Of course, presumptions come 1n var10USbreadths and strengths, and so do per se rules , as weshal l see.

Defining the conduct. The second demonstration ofthe exible and barely presumptive character of per serules l i e s in the def ini t ion of the covered conduct.Rules governing IIprice fixing," "boycotts,1I or "t ie-inst ldo not clearly define the conduct tha t will be socharacterized, and the confusion increases as one movesaway from the paradigm tha t generated the per se approachin the f i r s t place. That def ini t ional problems areinevitable can be eas i ly seen. Grant, for example,tha t v i r tua l ly a l l horizontal agreements among competi torsult imately affec t price in some way tha t some of theseeffects wil l be beneficial , and at leas t some of thebene al arrangements are readi ly ident i able and


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uncontaminated by any harmful incidents. Accordingly,a categorical prohibi t ion of a l l agreements affectingprice would forbid identif iable and wholly beneficialarrangements tha t promote the goals of the ant i t rus tlaws. I t follows tha t a sensible per se rule againstprice fixing cannot embrace a l l conduct affect ingprlce . A necessary predicate for the rule, therefore,i s a more narrow and precise def ini t ion of the categorically prohibited conduct.

Courts approach tha t defin i t ional task in a varietyof ways. One approach, clearly erroneous, is l inguist ic .I t asks whether the conduct before the court can bereasonably described as, say, a Hboycott.H This l inguist i c approach may be the cour t s only recourse whenin terpre t ing a s ta tutory term whose leg is la t ive purposeis far from clear . 29 But when applying a judge-maderule, the court is capable of recognizing the originalra t ionale for the rule and is indeed duty bound to doso. Accordingly, the courts should, as many do, definethe scope of a judge-made prohibi tory rule in terms ofthe policies tha t gave t l i fe and tha t continue toglve t vi ta l i ty . wo examples may be helpful here.

The court faced with an alleged t i e - in tha t i ssaid to be unlawful per se must, i f there be any doubtabout i t , ask whether the challenged conduct ought tobe condemned. That i s , the court must decide whetherthe reasons for re la t ive ly categorical histor icalcondemnation of t ie - ins apply to the s i tuat ion beforei t . I f the answer is negative, the court may hold tha tthe challenged conduct does not const i tu te a t i e - in a ta l l . Thus, a package t ransact ion with substantialjust i f icat ions or with few apparent harmful effects maybe said not to be a Htie_in H 30 Of course, t might becleaner and clearer to say tha t harmful effects are a


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prerequis i te for i l l ega l i ty or tha t jus t i ed t ie - insare lawful, but the immediate point is tha t courtsachieve the same end by varying the def ini t ion of a perse classi f icat ion. Of course, th i s creates some confusionbecause the def ini t ional perimeters do not alwayscorrespond closely with the policy judgment aboutneeded effects or permitted jus t i f ica t ions .

The courts applying ant i - ty ing rules are oftenseen to be applying a r ig id rule in a mechanical l inguist i c way. sometimes they are doing jus t tha t . Moreoften, they ut i l i ze any obvious f lexibi l i ty in thedef ini t ion, or create some less obvious f lexibi l i ty , Inthe e f for t to conform the scope of the prohibi t ion tothe underlying pol ic ies a t issue. And as we havesuggested, the courts sometimes create express exceptionsto so-cal led per se rules .

The sensible approach lS to put in the per secategory tha t which belongs there--namely tha t conductwhose balance of harm and vir tue is always predominantlyharmful. The Supreme Court said jus t tha t in i t srecent BMI decision:

liTo the Court of Appeals and CBS the blanketl icense involves price f ixing in the l i t e ra lsense: the composers and publishing houses havejoined together into an organization tha t se ts i t sprice for the blanket l icense t se l ls . But th i si s not a question simply of determining whethertwo or more potent ia l competi tors have l i t e ra l lyf ixed a price . s generally used in the ant i t rus tf ie ld , ' p r ice fixing' is a short-hand way of

describing certain categories of business behaviorto which the per se rule has been held applicable.The Court of Appeals' l i t e r a l approach does notalone establ ish tha t th i s part icular pract ice is


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one o f those types or t ha t t i s p la in ly a n t i compet i t ive and very l i ke ly without ' redeemingv i r t u e . Li te ra lnes s i s overly s impl i s t i c andof t en overbroad. I t i s only a f t e r cons iderable exper ience wi th c e r t a i n business re l a t ioh ipst h a t cour ts c l a s s i fy them as per se v io la t ions .We have never examined a prac t i ce l i ke t h i s onebefore . , ,31Of course, one must be wary about the j ud i c i a l

freedom allowed by BMI. Once f reed by MI from the perse v ise , a cour t may be too e a s i l y persuaded of redeemingv i r tues t ha t do not e x i s t . An example o f the l a t t e r 1Sthe Ninth C i r c u i t s Cata lano dec is ion . 32 The cour theld t ha t t was not unlawful per se for beer wholesa le rsto agree to e l imina te defe rred payment terms previous lygranted:

"The f ix ing o f c re d i t terms . 1S not mani fe s t lyant i -compet i t ive . [A]n agreement to e l imina tec re d i t could sharpen compet i t ion wi th r espec t topr ice by removing a ba r r i e r perceived by somese l l e r s to market entry . Moreover, compet i t ioncould be fos t e red by the increased v i s i b i l i t y o fpr1ce made poss ib l e by the agreement to e l imina tec re d i t . [Such agreements may v io la t e theSherman Act] when made pursuant to a consciouspurpose to f ix pr ices or as p a r t o f an overa l lscheme to r e s t r a i n compet i t ion. At t h i sjunc ture of the proceedings t has not been es tab l i shed t ha t the agreement was ente red in to withthe purpose , or had the e f fec t , o f r e s t r a i n i n gpr ice compet i t ion in the indus t ry . Wecannot say t ha t c re d i t term f ix ing 'would alwaysor almost always t end to r e s t r i c t and decrease

33output . '


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The court seemed wrong on several grounds. Firs t , tis almost impossible to prove tha t the effects arebeneficial or detrimental without a considerable periodof observation; over time, however, other forces wouldobscure the meaning of the data. Furthermore, fixingcredi t terms would almost always tend to res t r ic t ordecrease output, because l imit ing credi t is ident icalin i t s economic ef fec t to increasing price, which doestend to have output-depressing effects . with respectto the possible jus t i f ica t ions , moreover, one woulddoubt tha t the collaborators were engaged in th i spract ice for the purpose of increasing the i r pricecompetition. In principle , the cour t s apparentlyaccepted jus t i f ica t ion permits an agreement eliminatingcompetition on credit , warranties, and every otherterms of the t ransact ion except nominal price. But tis those very elements of the t ransaction on which somemodicum of competition is l ikely to occur in an otherwiseoligopolis t ic market. The cour t s economic analysistherefore seems erroneous.

Accepting the cour t s perception of possiblejus t i f ica t ions , however, a bet ter statement of theapproach might be this : the alleged conspiracy toeliminate credi t is presumptively unlawful, unless thedefendants can bear the very substantial burden ofpersuasion that the effect of the conspiracy is toincrease competition. Unless the defendant is able tomake a strong preliminary showing, I would say tha t nomaterial issue of fact has been presented and wouldgrant summary judgment for the pla in t i f f . )

In any event, the Ninth Circuit decision was 34correct ly reversed per curiam by the Supreme court .Another Ninth Circui t decision, ow pending before

the Supreme Court, presents a more di f f icul t issue. In


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, , d' 1 35 hArlzona v. Marlcopa County e lca Soclety, t e courtrefused to grant summary judgment condemning per secer ta in actions by a group of physicians tha t arguablyput a maximum l i d on charges made to health lnsurers .Now one might condemn the defendants out of hand on theground tha t the f ixing of a maximum price disto themarket and therefore ought to be condemned. On theother hand, there has been an obvious explosion ofmedical cos , par t ly a t t r ibutable to the existence ofth i rd party lnsurers, such tha t neither the patient northe insurer has a strong incentive to re s i s t excesscharges. One might therefore think there was somevir tue in an effor t , even among physicians, to put acei l ing on medical charges.

Unfortunately, one may doubt the bona fides ofphysicians acting in the i r own se l f - in teres t . And eveni f one were persuaded tha t they had acted sel s ly-perhaps on proof tha t the prescribed prices were lowerthan previously prevail ing prices--how could the courtbe assured tha t future adjustments would not transformthe original maximum in to a non-competitive minimum,unless the court i t se l f were to decide from time totime upon the amount of a "reasonable price?" Theremay be no reasonably administrable standard for supervis ing the defendants ' act iv i t ies . In tha t event,given the ever-present danger tha t producers with powerwil l f ix prices in the i r s sh in teres t rather thanin the publ in te res t , an absolute condemnation mayremain appropriate. (Again, the reader wil l observethe relevance of !tease of administrat ion in formulatinga legal ru le .

Thus, we see agaln tha t conduct arguably within ageneral per se category may have a plausible or evenpersuasive claim to redeeming vir tue in the par t icular


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circumstances. Of course , the pa r t i c u l a r pro-compet i t iveimpact m y be adjudged i l l e g i t im a te 1n pr1nc1punl ike ly to be achieved in prac t i ce by the res in t ,always o r most always achievab 1n l e ss res c t iveway, o r perhaps so r a re and so d i f f i c u l t to i den t i fy 1nprac t i ce or to con t ro l as not to be worth inquir ingin to .

Conclusion. We thus see t ha t so -ca l l ed per seru les are nothing more mysterious o r spec ia l thanpresumpt ions o f varying s t r eng th and breadth . And weare about to suggest t ha t the so -ca l l ed ru le o f reasona lso conta ins with in i t s e l f numerous presumpt ions o fvarying s t r eng th and bread th . The t h rus t o f t h i sdiscuss ion 1S two-fold. Fi r s t , the a n t i t r u s t t r ibuna lshould not be automat ica l ly fu l e i the r o f cons ider ing

fac t o r f ac to r in per se case o r re fus ing to cons iderit in ru le o f reason case. Second, we might c l a r i f your th inking and enhance the unders tanding o f andbusiness by dropping per se and ru le o f reason terminologya l toge ther . I t would be much carer for example, tosay t ha t "agreed pr ices among competi tors wi l l becondemned without proof o f power o r e f fec t , withoutcons ide ra t ion o f the pr ice magnitude, and with nodefense for the pa r ty ' s des i re to e l imina te compe t i onfor i t s own sake , but power and e f f e c t and j u s t i ca t ionwi l l be cons idered when, say, iminat ion o fcompet i t ion among the co l labora to r s f ac i l i t a t e s lowercos t produc t ion or d i s t r i bu t ion . I

We do not mean to sugges t t ha t the quoted propos i t i on1S t o t a l l y f ree o f ambiguity or capable o f automaticapp l ica t ion . But it does focus a t t en t ion on somethingmore than the de lus ive s impl ic i ty o f pr ice f ix ing andit ind ica tes t ha t the appra isa l o f what cons t i tu t esl eg i t imate jus f i ca t ion wi l l be c r i t i c a l element 1n


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many cases. Too often, invocation of a "per se" formulainvi tes only befuddlement.C Rule of Reason Can Be Severe: LimitingFactual Inguiries and Jury Role.

ny contrast of paradigms overstates the differencebetween a per se rule and the rule of reason. Just asthe former is not always so t ight ly prohibi t ive as isusually supposed, the rule of reason is not so opentextured and hospitable to a claim or defense as isoften thought. That something i s not unlawful per sedoes not always require refined fact finding or balancing;indeed, a part icular defense may be rejected categoricallyor presumptively within the general ambit of a rule ofreason. Similarly, the fact tha t conduct may be unlawfulunder the rule of reason does not necessari ly mean tha tmerely al leging tha t conduct should be suff ic ien t tore s i s t a summary disposi t ion of such a claim.

Instantaneous jUdgment. The fact tha t a practice1S not categorical ly unlawful in a l l or most of i t smanifestations certain ly does not mean tha t t 1Suniversal ly lawful. For example, jo int buying orse l l ing arrangements are not unlawful per se, but acourt would not hesi tate in enjoining a domestic jo intse l l ing arrangement by which, say, Ford and GeneralMotors dis t r ibuted the i r automobiles national ly througha single se l l ing agent. Even without a t r i a l thejudge wil l know tha t these two large firms are majorfactors in the automobile market, tha t such jo intse l l ing would eliminate important price competitionbetween them, tha t they are quite substantial enough todis tr ibute the i r products independently, and that onecan hardly imagine a pro-competitive jus t i f ica t ion


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actual ly probable in fact or strong enough in principleto make th is part icular jo int se l l ing arrangementIfreasonablelt under Sherman Act l. We need not arguea t the moment tha t the judge can take lI judicial notice llof such obvious t ru ths and give judgment against thearrangement on the pleadings alone; the summary presentat ions appropriate to a motion for a summary judgmentwould be suff ic ien t to establ ish the points necessaryfor such immediate condemnation.) The essentia l pointi s tha t the rule of reason can sometimes be applied inthe twinkling of an eye.

Categorical or presumptive rules within the ruleof reason. The rule of reason does not necessari ly orrepeatedly welcome every argument within the realm ofreason. Some claims or defenses--or some aspects ofthem--will be seen as inconsis tent with the premises ofthe an t i t rus t laws and will therefore be re jected inpr inciple . Others wil l be seen as acceptable in pr inciplebut def ic ient enough in some respect for the general i tyof cases to be categorically or presumptively re jected.We pause br ief ly on a few i l lus t ra t ions .

I l legi t imate object ive. The re ject ion of a defensein principle can be i l lus t ra ted by the Fashion Originators Guild of America FOGA)36 and Professional Engineerscases. Although the former case spoke in per se language,both i l l us t ra t e a single decisional process.

FOGA involved a combination of clothing designerswho collec t ively refused to deal with dis tr ibutors ormanufacturers dealing in unauthorized Ifcopies." Theres t ra in ts were both severe and intrusive. The keyissue before the Supreme Court was whether the FederalTrade Commission had erred in refusing to admit evidenceabout the respondent 's purposes and about the evils of"design pira t ing. The Court 's language i s often


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interpreted to say tha t such conduct is always i l l egaland ent i re ly without regard to the actors purposes.Although this reading may be indeed the correct one,the Court spoke in narrower terms dicta t ing the ident ica lcondemnation of the FOG actors under the rule ofreason. Even without detai led evidence about the evi lsof design pira t ing, the Court declared tha t even i f itwere a t o r t under the law of every State, i t s eliminationwould not jus t i fy the intense r es t r a in t before theCourt. Indeed, it l a te r came to be held tha t copyingwas affirmatively protected by federal law against anycontrary s ta te law. 7The point is tha t the rule of reason does notalways require deta i led admission of evidence about analleged jus t i f ica t ion in order to decide upon i t slegit imacy in terms of the purposes of the an t i t rus tlaws. In the FOG s i tuat ion the resul ts can be thesame, regardless of whether one ta lks per se or rule ofreason language. The difference i s tha t the court canbe clearer and more sharply focused in rul ing wisely onthe part icular jus t i f ica t ion before it ra ther thant rying to speak more generally of pract ices not analyzedin the ins tant case. By the same token, when the courtdoes use per se language, the presumption againstlega l i ty is probably stronger in subsequent cases,although we have suggested tha t it does not precludel a te r exceptions and qual i f ica t ions .

A similar i l lus t ra t ion is provided by the Prosional Engineers case discussed ear l i e r in th i s paper.Other categorical or presumptive rules . Legitimacyin principle does not necessari ly mean tha t a defenseshould be heard in a part icular case. Suppose, forexample, tha t a cer ta in patent would not be l icensed a ta l l unless the l icensor were permitted to impose a


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certain restra int on the l icensee 's use of that patent .Assume also that the l icense res tr ic t ion has no ef fec tother than l imiting the competition made possible bythe l icense. Such a l icense res t r ic t ion would noteliminate any competition that would otherwise occur.But an essent ia l predicate for that conclusion was theassumed refusal of the patentee to grant an unrestr ictedlicense. Nevertheless, a court might appropriatelyrefuse to hear evidence about the patentee's s tate ofmind--not because t is i rrelevant or unacceptable inprinciple, but because t i s d i f f icul t to prove ordisprove in the generali ty of cases. Apart from l imitedobject ive data, the patentee ' s own testimony would bethe usual evidence, and t m y be too contaminated bybias to be re l iable . For the moment we need not decidethe ultimate issue. I t is enough to see that a courtmight appropriately consider whether the patentee ' ss ta te of mind should generally be ignored in appraising, . 38a l lcense res tr lc t lon.

Tie-ins offer another i l lustra t ion. The supplierof a machine m y be allowed to require the customer tobuy a second product from that supplier where t rulynecessary to guarantee the proper functioning of themachine. But the courts will not hear th is qualitycontrol defense to a t i e in when proper functioning canbe achieved through a less res t r ic t ive alternative.Where the supplier can define specif ications of thesecond product to ensure proper functioning of themachine, tha t less res t r ic t ive al ternat ive wil l bepreferred by the courts, which will then re jec t thequality control defense. Not only will the courtimpose the general rule tha t an adequate less res t r ic t iveal ternat ive eliminates the defense. I t will also adoptgeneral guidelines defining what constitutes an adequate


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less res t r ic t ive al ternat ive. To be sure, doubtfulcases will remain and wil l have to be judged on the i rpeculiar facts , but the courts will and should developgeneral rules th t wil l dispose summarily--withoutt r i l or refined fact-f inding--of many cases. s anexample, the quali ty control defense wil l not be furtherconsidered once t appears in the pleadings or aff idavi tsth t the necessary character is t ics of the second productcan be defined with a specif ication comprehensible toan industr ial user of a machine, i f adequate functioningwith an appropriate second product has been accepted inthe marketplace.Once again, the point is th t a general willingnessto hear a par t icu lar defense does not and should notpreclude the courts from adopting general rules governingthe applicat ion or re ject ion of th t defense in specif ied39classes of cases.

Facial unreasonableness . Another i l lus t r t ionof the speedy applicat ion of the rule of reason is the40Fif th Circui t decision in the Realty Multi-List case.Defendant re l tors exchanged l i s t ings of propertyavailable for sale such th t l l the part icipants couldmake l l the propert ies avai lable to l l prospectivepurchasers. ny re l tor who was not allowed to p r t ic i -pate could not serve his buyer or se l l e r cl ients aswell as part icipants could and was therefore t acompetitive disadvantage. Under the so-cal led AssociatedPress rule,41 the par t ic ipants would be required undercertain market conditions to admit competing real torson reasonable terms. Defendants admitted re l tors whomaintained full- t ime offices open during usual businesshours, who were determined by the defendants to bef inancial ly responsible, and who subscribed $1000 tothe mUlti- l is t organiza t ion. On summary judgment, the


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court held each res t r ic t ion unreasonable on i t s face:one could be a responsible broker without having anoff ice fu l ly attended; there was no need for greatert rustworthiness than s ta te l icensing required (andperhaps vague private standards were too open to abuse);and the $1000 was unrelated to the organiza t ion scosts . Although certa in market conditions were to beexplored on remand, the Court applied the rule ofreason quite summarily_

Claims. The propositions discussed above are jus tas applicable to claims as to defenses. The fact tha talleged conduct can violate the ant i t rus t laws undersome circumstances within the rule of reason suggeststo some courts and commentators tha t deta i led findingsor t r i a l are required once a complaint names the conductand s ta tes the legal conclusion tha t t unreasonablyres t ra ins t rade (or monopolizes or whatever). But th i sis jus t as erroneous as allowing a defendant to have at r i a l on his quali ty control defense without f i r s tshowing the kinds of facts tha t would allow i t Thecourt should i ns i s t tha t a claimant specify those morepar t icu la r facts , circumstances or theories which wouldbe suf f ic ient to lead the t r ibunal to hold tha t thechallenged res t ra in t is unreasonable. Even a desire togive a pla in t i f f ful l opportuni t ies for discoveryshould not save him from having to s ta te one or moretheories to sustain his sui t And a t l eas t a f ter areasonable time for discovery, summary disposi t ion isappropriate i f the facts developed through discoveryfa i l to support a claim or defense. 42

Conclusion: qualify the impulse to categorize:Of course, one understands the impulse to speak cate-gor ical ly . o leave any opening i s to leave room fordefendants to claim jus t i f ica t ion for ra ther clearly


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unlawful res t ra in ts and to demand submission of theissues to the jury in damage or criminal cases. Butthat impulse can disappear once the judges real ize thatthey have the authori ty to define what is a legi t imateobjective capable of redeeming an unlawful res t ra in t .nd jus t as the judges can say tha t protect ion against

quali ty degradation cannot jus t i fy an agreed ruleagainst competitive bidding, they can also say tha tqual i ty protect ion i s (or might be) an excuse for somel imited res t ra in ts but not for others. The point i sthat a rule of reason inquiry and conclusion can, andlargely should, be (1) made by the judge and (2) oftenwithout need for detailed evidence or evidentiaryfindings. Those resul ts can be accomplished withoutcategorical language. nd although categorical languagedoes not prevent l a te r qual if icat ion l t tends toconfuse lower court judges and to s teer them intos t e r i l e defin i t ional inquiries and away from purposiveanalysis of the objects of the ant i t rus t laws. Inpart icular , categorical propositions about the scope ofpermitted jus t i f ica t ion may be entire ly correct whenapplied to serious res t ra in ts but inappropriate whenapplied to very modest res t ra ints .

One final complication in the use and applicat ionof per se rules needs to be highlighted: the i r relat ion-ship to the respect ive roles of judge and jury in thet r1a nt1trust cases. Some cour s seem 0 th0 43 t t 1nkthat conduct not governed by a per se rule must bejudged ent i rely by the jury, when there is one. Buttha t view seems wrong. Even in criminal cases thecourts have not hesitated to deny the jury the power todecide, for example, tha t price f ixing is lawfullyreasonable. The judge with tha t power also has theauthori ty to create lesser presumptions that , say, a


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part icular jus t i f ica t ion is or is not adequate inpr inciple to excuse otherwise unlawful conduct or isnot powerful enough, even i f proved, to excuse thepar t icu la r conduct challenged in the instant case.That is the fact tha t something i s not unlawful per sedoes not necessari ly me n tha t every question of i t seffect jus t i f ica t ion or avai lable al ternat ives mustbe decided by the jury.


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NOT S

1 . Standard o i l Co. v uni ted Sta tes , 221 U.S. 1(1911) .

2. Chicago Board o f Trade v . United Sta tes , 246U.S. 231 (1918).

3. See P. Areeda, Ant i t rus t Analysis 262 (3ded. 1981).

4. Admiral Theatre Corp. v. Douglas Theatre Co.,437 F.Supp. 1268, 1293 (D Neb. 1977), a f f d on othergrounds, 585 F.2d 877, 893 (8th Cir . 1978).

5. For a b r i e f analys is o f buying ca r t e l s seeAreeda book, note 3, a t 343 n.20.

6. National soc ie ty o f Profess iona l Engineers v .uni ted Sta tes , 435 U.S. 679 (1978).

7. cont inenta l T.V. v. GT sylvania , 433 U.S. 36(1977) .

8. uni ted S ta tes v. Arnold, Schwinn Co., 388U.S. 365 (1967).

9. con t inen ta l T.V. v. GT Sylvania, 461 F.Supp.1046 (N.D. Cal. 1978).

10. Berkey Photo v . Eastman Kodak Co., 603 F.2d263 (2nd Cir . 1979), ce r t . denied, 444 U.S. 1093 (1980).

11. See I I I P. Areeda D. Turner, Ant i t rus t Law715 (1978).

12. Chi l l i co the Sand Gravel Co. v . Mart inMarie t t a Corp. , 615 F.2d 427, 432 (7th Cir . 1980).13. Richte r Concrete Corp. v. Hil l top Basic

Resources, F.Supp. (S.D. Ohio 1981).14. Byars v. Bluff Ci ty News Co., 609 F.2d 843,

864 n.57 (6th Cir . 1979).45


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15. See continental case, note 7.16. See United States v. Topco Associates, 405

U.S. 596 (1972).17. See Areeda book, note 3, a t ~ ~ 5 0 2 5 0 3 .18. See id . a t ~ 3 3 419. United States v. Trans-Missouri Freight Assn.,

166 U.S. 290 (1897).20. Hopkins v. united States, 171 U.S. 578 (1898).21. united States v. Joint-Traff ic Assn., 171

U.S. 505 (1898).22. Standard Oil case, note 1 .23. United States v. Trenton Potter ies Co., 273

U.S. 392 (1927).24. united states v. Socony-Vacuum oi l Co., 310

U.S. 150 (1940).25. See Areeda book, note 3, a t 322-329.26. E.g, Topco case, Note 16.27. For example, in White Motor Co. v. united

States, 372 U.S. 253 (1963), the Supreme Court reversedthe lower cour t s holding tha t the res t ra in t s involvedwere unlawful per se. The Court said, we do not knowenough of the economic and business stuff out of whichthese arrangements emerge to be cer ta in [of the i rpurpose or effect] . . . . e need to know more than wedo about the actual impact of these arrangements oncompetit ion to decide whether they . should beclass i f ied as per se violat ions of the Sherman Act.

28. united states v. Jerrold Electronics Corp.,187 F. Supp. 545, 556 (E.D. Pa. 1960), a f f d mem., 365U.S. 567 (1961).

29. This seemed to be the case 1n s t . Paul Fire& Marine Ins. Co. v. BarrYI 438 U.S. 531 1978)1 wherethe Supreme Court read "boycott" very broadly. Thisseverely narrowed an express exception to a sta tutoryexemption from the ant i t rus t laws.


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30. E.g. , Pr inc ipe v. McDonald's Corp. , 631 F.2d303 (4th Cir . 1980), ce r t . denied, U.S. (1981).

31. MI v. CBS, 441 U.S. 1, 8-10 (1979).32. Catalano v. Target Sales , 605 F.2d 1097 (9th

Cir . 1979).33. Id. a t 1099-1100.34. 446 U.S. 643 (1980).35. 643 F.2d 553 (9th Cir . 1980), ce r t . granted.36. Fashion Orig ina tors Guild of America v. FTC,

312 U.S. 457 (1941).37. Sears , Roebuck Co. v. s t e i f f e l Co. 376

U.S. 225 (1964).38. This i s not to say whether a pa r t i cu la rpaten t l i cense r e s t r i c t i on should be allowed or prohibi ted.t i s only to suggest t ha t prohib i t i on or permission

could genera l ly depend on fac tors other than the pa r t i cu la rpa t en t ee s s t a t e of mind.

39. There i s a mildly analogous i ssue of theproper role of appel la te judges in reviewing decisionso f t r i a l cour ts o r o f the Federa l Trade Commission.Reviewing cour ts should not be r e luc tan t to def inere l evant presumptions, to de ta i l the elements o f whati s re levant , and where necessary for c l a r i t y to makethe f ina l judgment o f "reasonableness of conduct forthe purposes of the an t i t r u s t laws.

40. United Sta tes v. Real ty Mult i -Lis t , 629 F.2d1351 (5th Cir . 1980).

41. Associated Press v . United States , 326 U.S. 1(1945) .42. See Areeda Turner book, note 11, a t ~ ~ 3 1 4 3 1 8 .

43. Id. a t ~ 3 1 5 .


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THE FEDERAL JUDICI L CENTERThe Federal Judicial Center is the research, development, andtraining arm of the federal judicial system. It was established byCongress in 1967 (28 U.s.c. 620-629), on the recommenda-tion of the Judicial Conference of the United States.y statute, the Chief Justice of the United States is chairman

of the Center s Board, which also includes the Director of theAdministrative Office of the United States Courts and sixjudges elected by the Judicial Conference.The Center s Continuing Education and Training Divisionconducts seminars, workshops, and short courses for all thirdbranch personnel. These programs range from orientation seminars for judges to on-site management training for supportingpersonnel.The Research Division undertakes empirical and exploratoryresearch on federal judicial processes, court management, andsentencing and its consequences, usually at the request of theJudicial Conference and its committees, the courts themselves, orother groups in the federal court system.

The Innovations and Systems Development Division designsand helps the courts implement new technologies, generally underthe mantle of Courtran I I a multipurpose, computerized courtand case management system developed by the division.The Inter Judicial Affairs and Information Services Divisionmaintains liaison with state and foreign judges and judicialorganizations. The Center s libra ry, which specializes in judicialadministration is located within this division.The Center s main facility is the historic Dolley MadisonHouse, located on Lafayette Square in Washington, D.C.Copies of Center publications can be obtained from theCenter s Information Services office, 1520 H Street , N. W >Washington. D.C. 20005; the telephone number is 202/633-6365 .


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Antitrust Doj Areeda Per Se Rule of Reason

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Transcript of Antitrust Doj Areeda Per Se Rule of Reason