Blaming the D.C. Circuit for Regulatory Failure?

Josh Wright —  9 April 2010

Washington Post columnist Steve Pearlstein offers a novel explanation for “regulatory failure.”  The D.C. Circuit, has, Pearlstein asserts, “has intimidated, undermined and demoralized the regulatory apparatus” by giving insufficient deference to regulators and “opinions that routinely ignore the plain language of statute and the clear intent of Congress.”   Pearlstein holds up three Republican appointees as examples of this sort of runaway anti-regulatory judicial activism.  Strong stuff.  What’s the evidence?  Pearlstein relies on the recent Comcast v. FCC, an opinion authored by Judge Tatel (Clinton appointee, in case you were wondering).  It is also worth noting that two of the judges cited have taken senior status and only Kavanaugh joined recently.  Pearlstein then refers to the D.C. Circuit’s review of the Federal Trade Commission’s case against Rambus.  He describes it as follows:

And last year, Judge Williams went through 24 pages of hair-splitting logic to explain why the Federal Trade Commission was out of bounds when it tried to discipline a tech company for enhancing its monopoly in a certain chipmaking process by deceiving an industry standard-setting body. According to Williams, the fact that its deceit “merely” enabled a monopolist to charge higher prices doesn’t constitute illegal anti-competitive behavior.

Eh, I don’t think Rambus supports Pearlstein’s thesis at all.  Turns out, a monopolist engaging in deception that “merely” results in higher prices but does not exclude competitors is not the world of antitrust law according to Judge Williams, but is the state of antitrust law according to the Supreme Court’s 9-0 unanimous decision in NYNEX.  As I point out in Why the Supreme Court Was Correct to Deny Certiorari in FTC v. Rambus, if Rambus had ex ante monopoly power prior to its allegedly deceptive acts, even assuming that those acts resulted in violation of RAND commitments and higher prices, NYNEX commands that an antitrust violation requires injury to the competitive process and not just increased prices.  There can be reasonable debate over whether the D.C. Circuit was correct that the FTC did not meet its burden of showing the requisite exclusion and the occurrence of an illegal act not immunized by unanimous Supreme Court law.  But the critique that the D.C. Circuit was willy-nilly avoiding the law here is misplaced.