Me Too @ Cato’s Constitution Day

Josh Wright —  14 September 2010

Like Larry, I’ll be at Cato on Constitution Day.  TOTM will be well represented.  While Larry covers Jones v. Harris and mutual funds, I’ll have my sights on the Roberts Court’s recent decision in American Needle v. NFL.   See you there!

The abstract of my paper (co-authored with Judd Stone), Antitrust Formalism is Dead!  Long Live Antitrust Formalism! Some Antitrust Implications of American Needle v. NFL , is here:

Antitrust observers and football fans alike awaited the Supreme Court’s decision in American Needle v. National Football League for months – inspiring over a dozen articles, and even one from the quarterback of the defending champion New Orleans Saints. Yet the implications of the Court’s decision, effectively narrowing the scope of the “intra-enterprise immunity” doctrine to firms with a complete “unity of interests,” are unclear. While some depict the decision as a schism from the last several decades of antitrust law, we explain why this interpretation is meritless and discuss the practical impact of the Court’s holding. The Court’s antitrust jurisprudence over the past several decades, including that of the Roberts Court and American Needle, has broadly embraced rules that are both relatively easy to administer as well as conscious of the error costs of deterring pro-competitive conduct. Intra-enterprise immunity potentially provided such a “filter” that enabled judges to dismiss a non-trivial subset of meritless claims prior to costly discovery. The doctrine, however, proved notoriously difficult to consistently apply in situations involving common organizational structures. Consistent with error-cost principles that have been the lodestar of the Court’s recent antitrust output, American Needle gave the Court an opportunity to effectively abandon intra-enterprise immunity in favor of the Twombly “plausibility” standard. Rather than marking a drastic change in antitrust jurisprudence, therefore, American Needle should be viewed as the Supreme Court substituting an unreliable screening mechanism in favor of a more cost-effective alternative.

3 responses to Me Too @ Cato’s Constitution Day


    @ Walter: care to convert that into an argument, or some evidence that the single entity test was working? The paper cites a substantial amount of evidence that it was not. But if I’m missing some “reality” that is pertinent to the claim, I’d like to know what you had in mind.


    “American Needle should be viewed as the Supreme Court substituting an unreliable screening mechanism in favor of a more cost-effective alternative.”

    At the price of completely ignoring reality.

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  1. Cato Constitution Day — Thurs. Sept. 16 - September 16, 2010

    […] On Thursday the Cato Institute will be holding its annual day-long Constitution Day symposium, which is also a celebration of the publication of the ninth volume of the annual Cato Supreme Court Review. I’ll be moderating (stepping in for Roger Pilon) on the second afternoon panel, which will cover three business-related cases recently decided by the Court: Jones v. Harris on mutual fund fees, Free Enterprise Fund v. PCAOB on one of the terms of the Sarbanes-Oxley law, and American Needle v. NFL on the scope of antitrust exemption. All three principal panelists are well-known bloggers: Larry Ribstein of Illinois (Jones) and Josh Wright of George Mason (American Needle) at Truth on the Market, and Hans Bader of CEI (Free Enterprise Fund) at Open Market (he’s also guestblogged on the PCAOB case right here). The event is open to the public, but reservations are required. More: Larry Ribstein, Josh Wright. […]