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Supreme Court Denies Cert in Antitrust Case

The Supreme Court denied cert yesterday in Truck-Rail Handling Inc. v. Burlington Northern & Sante Fe Railway Co., U.S., No. 07-693 (HT: Danny Sokol), where the 9th Circuit had affirmed summary judgment for the railroad company on the grounds that the plaintiff had not adequately defined relevant product markets.

BNSF leased its terminal facilities to the plaintiffs, which included a “transload service agreement” as a condition of the lease. The plaintiffs sued under both Section 1 and 2 of the Sherman Act for price fixing, monopolization, attempted monopolization, and conspiracy to monopolize. The plaintiffs argued that the relevant market was “BNSF transload terminals” and “transload services provided to BNSF shippers.” The district court, and ultimately the 9th Circuit, rejected the market definition as “unduly narrow” because it was not defined relative to end consumer preferences for a product or group of products.

The BNA news reports the questions presented for cert as the following:

  1. Is a properly defined relevant market necessary to prove under Section 1 a tying claim — either under the per se illegality rule or the rule of reason?
  2. Is the 9th Circuit’s decision contrary to the decisions in Northern Pacific Ry Co. v. U.S., Simpson v. Union Oil Co., and International Salt Co. v. U.S., in which the Court granted summary judgment in favor of the plaintiffs when defendants had “tied” their leases to coerce independent businesses to abdicate their independent judgment regarding their prices and choices of products and services sold?

I’m not surprised at all that the Court did not grant cert in BNSF. I have argued previously that the Roberts Courts’ track record thus far suggests that it is interested in taking antitrust cases which qualify as “low hanging fruit.” Generally, this has meant that the Court will take on issues where there is both a consensus on economic theory and knowledge concerning the practice at issue and an opportunity to “fix” some area in the law that has caused significant confusion. In the paper referenced above, I predicted that in the short term the Court will take a horizontal merger case and a tying case which presents an opportunity to overrule Jefferson Parish and get rid of the per se rule altogether, and in the longer term (next 3-4 years) will take a reverse payment case as our economic and empirical knowledge develop (perhaps along with a Circuit split). I just don’t see the issues presented in BNSF concerning the general principles of market definition as that interesting or especially significant relative to the big picture issues available to the Court should it decide to dedicate further resources to antitrust cases. Or maybe with all the antitrust activity coming from the Roberts Court lately, maybe they just need a break.

 
 
 
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