"Leegin is a triumph of pragmatism"

Josh Wright —  13 April 2008

That is what Judge Posner has to say about Leegin in his new book, How Judges Think.   I’m only a few chapters in, but so far, its a fascinating read.  I’ll probably blog some more about parts of the book later.  In particular, I’ve been thinking recently about how the complexity of substantive antitrust analysis affects judicial decision-making.  But for now I wanted to just post an excerpt from the book containing Posner’s description of Leegin (TOTM posts on Leegin are here):

The earlier case [ed: Dr. Miles]  had held that agreements by which a manufacturer places a floor under his distributors’ resale price are a per se violation of the Sherman Act, on the ground that they have the same effect as if the retailers had gotten together and decided to fix a minimum price at which to sell the good.  That was wrong as a matter of economics, because a manufacturer has no interesting in allowing his distributors to cartelize distribution, thus restricting his access to his customers.  If the manufacturer places a floor under his retailers’ prices, it is because the floor serves his interest in competing more effectively against other manufacturers, as by encouraging the retailers to provide presale services to customers for the manufacturer’s good.  So Dr. Miles was rightly overruled.  But the overruling, and its rightness, owed nothing to legalist thinking.  A venerable precedent was overruled because it was bad economics.  Leegin is a triumph of pragmatism.

Posner also describes Bell Atlantic v. Twombly (p. 53-54) as a pragmatic decision, noting that “nothing in the repertoire of legalism could have decided it, especially in favor of the position in the majority opinion” and concluding that “right or wrong, the decision in Bell Atlantic pragmatic rather than legalist.”  If Leegin is a “triumph of pragmatism,” is the continuing vitality of Jefferson Parish’s “per se” prohibition against tying a failure of pragmatism?  If my prediction is correct, whether pragmatic or otherwise, it won’t be too long before Jefferson Parish joins Dr. Miles.