California Dental Association: Not a quick look but not the full monty

Antitrust Law Journal

Volumn 67, Issue 3, 2000, Pages 495-557

  Calkins, Stephen ^a  

^a NONE

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EID: 0034423053     PISSN: 00036056     EISSN: None     Source Type: Journal    
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References (340)

1. 119 S. Ct. 1604 (1999) (CDA).
2. See London Slang 〈http://www.geezer.demon.co.uk〉 ("full monty - 'the whole lot,' 'all that is desired.' There are a few meanings proposed for the phrase 'the full monty,' but the most commonly accepted one is that it comes from a gambling term where the 'monte' (Spanish for mountain) is the kitty or 'pot' of money in the middle of the table. This has been changed to the spelling 'monty.'"); A Dictionary of Slang 〈http://www.peevish .u-net.com/slang/f.htm〉 ("The complete amount. The Monty can possibly be spelt with a capital M."). Thanks to Charles Lister for directing me away from the delightful film to these authorities.
3. See London Slang 〈http://www.geezer.demon.co.uk〉 ("full monty - 'the whole lot,' 'all that is desired.' There are a few meanings proposed for the phrase 'the full monty,' but the most commonly accepted one is that it comes from a gambling term where the 'monte' (Spanish for mountain) is the kitty or 'pot' of money in the middle of the table. This has been changed to the spelling 'monty.'"); A Dictionary of Slang 〈http://www.peevish .u-net.com/slang/f.htm〉 ("The complete amount. The Monty can possibly be spelt with a capital M."). Thanks to Charles Lister for directing me away from the delightful film to these authorities.
4. The party against whom an FTC administrative complaint is filed is known as a "respondent," but for ease of reading, this article will use the more familiar term, "defendant."
5. Section 10 of the Code is as follows: Although any dentist may advertise, no dentist shall advertise or solicit patients in any form of communication in a manner that is false or misleading in any material respect. In order to properly serve the public, dentists should represent themselves in a manner that contributes to the esteem of the public. Dentists should not misrepresent their training and competence in any way that would be false or misleading in any material respect. California Dental Ass'n v. FTC, 128 F.3d 720, 723 (9th Cir. 1997); 119 S. Ct. at 1608.
6. The CDA Judicial Council may issue advisory opinions setting forth its interpretations of the Code's principles. Although not binding interpretations, the opinions "'may be considered as persuasive by the trial body and any disciplinary proceedings under the CDA Bylaws.'" 128 F.3d at 723 n.1 (quoting the preamble to the Code). Among issued advisory opinions relating to advertising are the following: 2. A statement or claim is false or misleading in any material respect when it: a. contains a misrepresentation of fact; b. is likely to mislead or deceive because in context it makes only a partial disclosure of relevant facts; c. is intended or is likely to create false or unjustified expectations of favorable results and/or costs; d. relates to fees for specific types of services without fully and specifically disclosing all variables and other relevant factors; e. contains other representations or implications that in reasonable probability will cause an ordinarily prudent person to misunderstand or be deceived. 3. Any communication or advertisement which refers to the cost of dental services shall be exact, without omissions, and shall make each service clearly identifiable, without the use of such phrases as "as low as," "and up," "lowest prices," or words or phrases of similar import. 4. Any advertisement which refers to the cost of dental services and uses words of comparison or relativity - for example, "low fees" - must be based on verifiable data substantiating the comparison or statement of relativity. The burden shall be on the dentist who advertises in such terms to establish the accuracy of the comparison or statement of relativity. 8. Advertising claims as to the quality of services are not susceptible to measurement or verification; accordingly, such claims are likely to be false or misleading in any material respect. Id. at 723-24 (quoted at 119 S. Ct. at 1608 n.1).
7. According to the court of appeals, CDA's advertising guidelines declare that California state law "requires dentists offering discounts to list all of the following in the advertisement: 1. The dollar amount of the nondiscounted fee for the service; 2. Either the dollar amount of the discount fee or the percentage of the discount for the specific service; 3. The length of time that the discount will be offered; 4. Verifiable fees; and 5. Specific groups who qualify for the discount or any other terms and conditions or restrictions for qualifying for the discount." 128 F.3d at 724 (quoted at 119 S. Ct. at 1608 n.2).
8. 121 F.T.C. 190, 190 (1996); see News and Comment, Antitrust & Trade Reg. Rep. (BNA) 99 (1993). Chairman Steiger was joined by Commissioners Azcuenaga (the only independent), Owen, Starek, and Yao (the only Democrat). 4 Trade Reg. Rep. (CCH) ¶ 9562, at 16, 451-52 (June 24, 1998) (Commissioner terms). The complaint was the result of an investigation that had started much earlier. See Brief of Petitioner California Dental Ass'n in the United States Court of Appeals for the Ninth Circuit at 5 n.3 (investigation began in 1985) [hereinafter CDA Ninth Circuit Brief].
9. 121 F.T.C. 190, 190 (1996); see News and Comment, Antitrust & Trade Reg. Rep. (BNA) 99 (1993). Chairman Steiger was joined by Commissioners Azcuenaga (the only independent), Owen, Starek, and Yao (the only Democrat). 4 Trade Reg. Rep. (CCH) ¶ 9562, at 16, 451-52 (June 24, 1998) (Commissioner terms). The complaint was the result of an investigation that had started much earlier. See Brief of Petitioner California Dental Ass'n in the United States Court of Appeals for the Ninth Circuit at 5 n.3 (investigation began in 1985) [hereinafter CDA Ninth Circuit Brief].
10. Complaint ¶¶ 2, 9, California Dental Ass'n, 121 F.T.C. 190 (1996).
11. Id. ¶ 11.
12. 15 U.S.C. § 45(a) ("Unfair methods of competition, . . . and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful.").
13. 121 F.T.C. at 195 (initial decision).
14. Massachusetts Board of Registration in Optometry, 110 F.T.C. 549 (1988); see infra text at note 158.
15. 121 F.T.C. at 268, 270.
16. Judge Parker's Initial Decision is one of those old-fashioned opinions with endless numbered "findings of fact" followed by a much more abbreviated narrative comprising its "conclusions of law." This structure invited mischief. The 65 pages of "findings of fact" lent an air of thoroughness to the case, even though some factual issues that were later to be of interest to the Supreme Court had not been addressed. The 331 numbered "findings of fact" freely mix substantive declarations of market facts with simple recitation of trial episodes. Given the length of the decision, there are many examples of each. Factual conclusions address a variety of important issues. E.g., Finding 282: "From 1982 until 1993, CDA and its components have challenged hundreds of advertising representations which on their face are not false or deceptive. . . . Many dentists, whose advertising was challenged, agreed to modify it . . . ." Even more "findings" simply recorded testimony, the way any reporter might. E.g., Finding 179: "Dr. Miley . . . testified . . . ."; Finding 180: "Dr. Kinney . . . testified . . . ."; Finding 181: "Dr. Cowan . . . testified. . . ." Significantly, the listed "Findings of Fact" on "Economic Analysis" are almost exclusively reportorial. Particularly problematic, as subsequent developments would show, were two "Findings of Fact" that recited the testimony of defense economist Robert Knox: 322. Professor Knox testified that CDA's enforcement of its Code of Ethics with respect to advertising has no negative impact on competition in any dental market in California because it cannot erect any barriers to entry (i.e., an advantage which existing firms have over potential entrants) into any dental market in California (Tr. 1633). . . . . 326. Professor Knox concluded that even if CDA occasionally questions mem-ber advertisements which are not false or misleading in a material respect: "the activities of the California Dental Association with respect to their enforcement of their Code of Ethics relative to advertising has no impact on competition in any market in the State of California, particularly with respect to price and output" (Tr. 1640). 121 F.T.C. at 260; see also id. Finding 324 (Knox testified that scrutiny of dental advertising is procompetitive because false advertising harms competition).
17. 121 F.T.C. at 272. Judge Parker appears to have based this conclusion on his belief that any "problems experienced by dentists in opening a practice in California . . . do not pose an insurmountable obstacle to entry." Id. (citing James A. Langenfeld & John R. Morris, Analyzing Agreements Among Corporations: What Does the Future Hold?, 36 ANTITRUST BULL. 651, 677 (1991), which observed that entry prevents supracompetitive pricing).
18. 121 F.T.C. at 273: ("[T]he failure to establish the conditions for satisfaction of a Rule of Reason analysis is not fatal. See Mass. Board, 110 F.T.C. at 602 n.8: 'The Court [in FTC v. Indiana Federation of Dentists, 476 U.S. 447 (1986)] rejected the dentists' argument that the Commission erred in not making elaborate market power determinations . . . .'"). To this language Judge Parker appended a cryptic footnote: " 'Substantial market power is an essential ingredient of every antitrust case under the Rule of Reason,' Sanjuan v. American Bd. of Psychiatry and Neurology, Inc., 40 F.3d 247, 251 (7th Cir. 1994)."
19. 121 F.T.C. at 273.
20. Commissioner Starek filed a concurring opinion that disagreed only with the Commission's framework for analyzing the restraints. Commissioner Azcuenaga dissented from the finding of a substantive violation.
21. 121 F.T.C. at 296-97 (quoting Mass. Board, 110 F.T.C. at 605).
22. 121 F.T.C. at 308 ("The Supreme Court has made clear that the rule of reason contemplates a flexible inquiry, examining a challenged restraint in the detail necessary to understand its competitive effect. As will be seen, here, application of the rule of reason is simple and short.") (citations omitted). Although the Commission used the per se and rule of reason categories rather than the Mass. Board series of questions, see infra text accompanying note 158, it wrote that the result it reached was "not inconsistent" with its Mass. Board decision. Id. at 321 & n.26.
23. Id. at 316 ("As the third step in our quick look, we examine the efficiency justifications . . . ."); id. at 320 ("As our quick look under the rule of reason reveals, the advertising restrictions are likely to have anticompetitive effects.").
24. Id. at 301.
25. Id. at 302.
26. Id. at 308.
27. Id. at 311.
28. The Commission correctly observed that it has never been held, as Judge Parker appears to have believed, that only "insurmountable" entry barriers are cognizable in antitrust analysis. Id. at 315.
29. 433 U.S. 350, 383-84 (1977) ("[B]ecause the public lacks sophistication concerning legal services, misstatements that might be over-looked or deemed unimportant in other advertising may be found quite inappropriate in legal advertising. For example, advertising claims as to the quality of services - a matter we do not address today - are not susceptible of measurement or verification; accordingly, such claims may be so likely to be misleading as to warrant restriction.").
30. 121 F.T.C. at 318 (quoting Shapero v. Kentucky Bar Ass'n, 486 U.S. 466, 478 (1988) (quoting Zauderer v. Office of Disciplinary Counsel of Supreme Ct. of Ohio, 471 U.S. 626, 646 (1985))).
31. 121 F.T.C. at 319-20 (citation to Initial Decision omitted).
32. For a contemporaneous criticism of the Commission's CDA opinion, see Joseph Kattan, The Role of Efficiency Considerations in the Federal Trade Commission's Antitrust Analysis, 64 ANTITRUST L.J. 613 (1996).
33. Commissioner Azcuenaga asserted that Complaint Counsel had failed factually to prove its case, in part because they and Judge Parker had assumed that actions of local chapters were attributable to CDA, whereas the Commission had not found this, and, accordingly, had conducted an independent review of the record. 121 F.T.C. at 337. She asserted that "there is no empirical evidence in the record that CDA members advertise less frequently than dentists in California who are not members of CDA or that dentists in California advertise less than dentists in other states." Id. at 338; see also id. at 339 ("the record suggests that CDA has not deterred dentists in California from advertising"). Commissioner Azcuenaga questioned "whether the record provides a sufficient basis to find that CDA prohibits price advertising," id., and said that more fact finding and reflection was needed before CDA's non-price advertising restraints were condemned.
34. 128 F.3d at 731.
35. Id. (quoting CDA's Code of Ethics).
36. Id. at 725.
37. Id. at 728.
38. Id.
39. Id.
40. Id. at 729.
41. Id. at 730. The Ninth Circuit also relied upon Professor Hovenkamp's commentary on the Commission's CDA opinion to reason that restricting information was itself "a form of output limitation." Id. at 728 (citing PHILLIP E. AREEDA & HERBERT HOVENKAMP, ANTITRUST LAW 693-94 (Supp. 1997). Professor Hovenkamp had even wondered "whether the horizontal restrictions on non-price advertising really merited rule of reason treatment at all." ARREDA & HOVENKAMP, supra, at 693.
42. See American Med. Ass'n, 94 F.T.C. 701, 983 (1979), aff'd by an equally divided Court, 455 U.S. 676 (1982).
43. CDA's "Questions Presented" were as follows: The Federal Trade Commission . . . alleg[ed] that the California Dental Association ("CDA"), a non-profit professional association, violated Section 5 . . . by prohibiting member dentists . . . from engaging in false or misleading advertising. Despite the finding by the Administrative Law Judge that CDA's enforcement of its Code of Ethics "has no negative impact on competition," the Commission and the Court of Appeals held that CDA violated the antitrust laws. The two basic questions presented by this petition are: 1. Whether the Commission has jurisdiction over nonprofit professional associations. 2. Whether a nonprofit professional association violates the antitrust laws under the rule of reason when its advertising disclosure requirements are animated by procompetitive purposes, do not directly affect price or output, and have no negative impact on competition. Petition for Writ of Certiorari at i, California Dental Ass'n v. FTC, 119 S. Ct. 1604 (1999) (No. 97-1625).
44. 119 S. Ct. at 1612.
45. Id.
46. Id. at 1618.
47. Id. It left for the court of appeals whether or not to remand the case to the Commission "for a more extensive rule-of-reason analysis on the basis of an enhanced record." Id. at 1612 n.8. More than two months after the Court's decision, the FTC moved for remand. Motion of Respondent Federal Trade Commission for Remand, California Dental Ass'n v. FTC, No. 96-70409 (9th Cir. filed July 29, 1999). After receiving CDA's response opposing remand, and an FTC reply, the Ninth Circuit denied the FTC's request.
48. The Court's most recent analysis of per se/rule of reason issues was in Palmer v. BRG of Georgia, Inc., 498 U.S. 46 (1990) (per curiam) (horizontal division of markets between potential competitors is per se illegal).
49. 119 S. Ct. at 1618.
50. Id. at 1617 ("Had the Court of Appeals engaged in a painstaking discussion in a league with Justice Breyer's (compare his 14 pages with the Ninth Circuit's 8), and had it confronted the comparability of these restrictions to bars on clearly verifiable advertising, its reasoning might have sufficed to justify its conclusion. Certainly Justice Breyer's treatment of the antitrust issues here is no 'quick look.'").
51. For an antitrust decision for which a non-majority opinion (a concurrence in the judgment) is regularly cited, see Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 32 (1984) (O'Connor, J., concurring in the judgment) (with Burger, Ch. J., and Powell & Rehnquist, J.J.).
52. 15 U.S.C. § 45 (a) (2).
53. 15 U.S.C. § 44.
54. 121 F.T.C. at 290.
55. 405 F.2d 1011 (8th Cir. 1969).
56. Transcript of Argument Before the Supreme Court at 8, California Dental Ass'n v. FTC, 119 S. Ct. 1604 (1999) (No. 97-1625) [hereinafter Supreme Court Transcript]. All references to particular Justices are based on eyewitness accounts, because the Court transcript does not identify the Justice asking a question.
57. Cement Mfrs. Protective Ass'n v. United States, 268 U.S. 588 (1925).
58. Sugar Inst., Inc. v. United States, 297 U.S. 553 (1936).
59. Maple Flooring Mfrs. Ass'n v. United States, 268 U.S. 563 (1925).
60. Supreme Court Transcript, supra note 54, at 10.
61. Id. at 13.
62. Id. at 17.
63. 119 S. Ct. at 1611-12.
64. 121 F.T.C. at 289 (quoting American Medical Ass'n, 94 F.T.C. 701, 983 (1979), aff'd by an equally divided Court, 455 U.S. 676 (1982) (alterations after the first one in the original)); see also 121 F.T.C. at 290 ("we . . . review for ourselves whether CDA confers pecuniary benefits upon its members as a substantial part of its activities").
65. 128 F.3d at 725-26 ("The FTC has consistently held that it has jurisdiction over a nonprofit entity if a substantial part of the entity's total activities provides pecuniary benefits to its members. . . . The FTC's approach of looking at whether the organization provides tangible, pecuniary benefits to its members as a surrogate for 'profit' is a proper way of deciding which nonprofit organizations are subject to its jurisdiction.").
66. Brief for the Respondent at Heading I, California Dental Ass'n v. FTC, 119 S. Ct. 1604 (1999) (No. 97-1625) [hereinafter SG Brief]; id. at 8; see also Supreme Court Transcript, supra note 54, at 32 (Mr. Wallace) ("As long as the pecuniary benefit that they're engendering for their members is a substantial part of the organization's total activities rather than incidental to some noncommercial activity . . . ."). The SG argued that because "the word 'profit' is capable of the construction that the FTC has placed on it . . . that construction is entitled to deference" under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-44 (1984) (citing Mississippi Power & Light Co. v. Mississippi, 487 U.S. 354, 380-82 (1988) (Scalia, J., concurring)). SG Brief at 11. CDA responded that Chevron was inapplicable because Congressional intent was clear, and it protested that the Commission had not sought Chevron deference before the Ninth Circuit - even admitting at oral argument that deference isn't owed on this sort of jurisdictional question - and thus the Court could "ignore" the argument. Reply Brief of Petitioner, CDA, at 8-9 & n.8 [hereinafter CDA Supreme Court Reply Brief]. The FTC of course participated in writing the SG's brief, which bears the names of the FTC General Counsel and Assistant General Counsel and two FTC attorneys, but for simplicity this article will refer simply to the "SG's" brief. For a good review of this Chevron dispute that argues vigorously against deference to "peripheral jurisdictional issues," see Ernest Gellhorn & Paul Verkuil, Delegation: What Should We Do About It? Controlling Chevron-Based Delegations, 20 CARDOZO L. REV. 989 (1999).
67. SG Brief, supra note 64, at 9; cf. id. Heading I.A.
68. Supreme Court Transcript, supra note 54, at 35-36: QUESTION: Mr. Wallace, may I seek this clarification? You are trying to get some kind of a handle on pecuniary benefits by using the word substantiality. [Yes] But you've used that to modify activities. Perhaps what it should modify is the business benefits . . . . [M]aybe the substantiality belongs with what is the benefit to the business of the dentists rather than the activity. Or doesn't it matter? MR. WALLACE: Well, I did not choose the formulation that I used. I was quoting the commission's formulation and -QUESTION: A problem counsel is often faced with, yes. (Laughter.)
69. 119 S. Ct. at 1610.
70. Id. at 1611 ("There is . . . no apparent reason to let the statute's application turn on meeting some threshold percentage of activity for this purpose, or even satisfying a softer formulation calling for a substantial part of the nonprofit entity's total activities to be aimed at its members' pecuniary benefit.").
71. Id. at 1611 n.6. The Court reserved on whether the FTC has jurisdiction over some nonprofit organizations that do not confer economic benefits on for-profit members, and on "whether a purpose of contributing to profit only in a presumed sense, as by enhancing professional educational efforts, would implicate the Commission's jurisdiction." Id.
72. Id. at 1611.
73. The Solicitor General's CDA brief bears the names of the Solicitor General and two lawyers in his office, the Assistant Attorney General, the FTC's General Counsel and two lawyers in her office, and an attorney from the FTC's Bureau of Competition. The Commission opinion in CDA was authored by Chairman Pitofsky and joined by two other Commissioners. Commissioners Azcuenaga and Starek filed separate opinions that concurred in the Commission majority's finding of jurisdiction.
74. See, e.g., FTC v. Sperry & Hutchinson Co., 405 U.S. 233, 246 (1972) ("[W]e must look to its [the FTC's] opinion, not to the arguments of its counsel, for the underpinning of its order. 'Congress has delegated to the administrative official and not to appellate counsel the responsibility for elaborating and enforcing statutory commands.'" (quoting Investment Co. Institute v. Camp, 401 U.S. 617, 628 (1971)); SEC v. Chenery Corp., 318 U.S. 80, 88 (1943) (review of the validity of SEC order is confined to the grounds upon which the Commission based its action). Ironically, CDA had protested that an SG argument concerning jurisdiction (that the Commission was entitled to Chevron deference) had not been made below and thus the Court was "entitled to ignore" it. CDA Supreme Court Reply Brief, supra note 64, at 9 (citing Schiro v. Farley, 510 U.S. 222, 228-29 (1994)).
75. Supreme Court Transcript, supra note 54, at 34.
76. Id.
77. Motion of California Dental Association for a Briefing Schedule and for Oral Argument, No. 96-70409 (9th Cir. filed Oct. 22, 1999).
78. 119 S. Ct. at 1613-14 (citing Jack Carr & Frank Mathewson, The Economics of Law Firms: A Study in the Legal Organization of the Firm, 33 J.L. & ECON. 307, 309 (1990); George A. Akerlof, The Market for 'Lemons': Quality Uncertainty and the Market Mechanism, 84 Q.J. ECON. 488 (1970); Hayne Leland, Quacks, Lemons, and Licensing: A Theory of Minimum Quality Standards, 87 J. POL. ECON. 1328, 1330 (1979)); 1 BARRY R. FURROW ET AL., HEALTH LAW § 3-1, at 86 (1995); Robert G. Evans, Professionals and the Production Function: Can Competition Policy Improve Efficiency in the Licensed Professions?, in OCCUPATIONAL LICENSURE AND REGULATION 235-36 (Simon Rottenberg ed., 1980). The Court did not discuss the literature showing that prices of professional services tend to be lower where advertising is more freely permitted, see, e.g., RONALD BOND ET AL., EFFECTS OF RESTRICTIONS ON ADVERTISING AND COMMERCIAL PRACTICE IN THE PROFESSIONS: THE CASE OF OPTOMETRY (1980); Lee Benham & Alexandra Benham, Regulating Through the Professions: A Perspective on Information Control, 18 J.L. & ECON. 421 (1975).
79. 119 S. Ct. at 1613-14 (citing Jack Carr & Frank Mathewson, The Economics of Law Firms: A Study in the Legal Organization of the Firm, 33 J.L. & ECON. 307, 309 (1990); George A. Akerlof, The Market for 'Lemons': Quality Uncertainty and the Market Mechanism, 84 Q.J. ECON. 488 (1970); Hayne Leland, Quacks, Lemons, and Licensing: A Theory of Minimum Quality Standards, 87 J. POL. ECON. 1328, 1330 (1979)); 1 BARRY R. FURROW ET AL., HEALTH LAW § 3-1, at 86 (1995); Robert G. Evans, Professionals and the Production Function: Can Competition Policy Improve Efficiency in the Licensed Professions?, in OCCUPATIONAL LICENSURE AND REGULATION 235-36 (Simon Rottenberg ed., 1980). The Court did not discuss the literature showing that prices of professional services tend to be lower where advertising is more freely permitted, see, e.g., RONALD BOND ET AL., EFFECTS OF RESTRICTIONS ON ADVERTISING AND COMMERCIAL PRACTICE IN THE PROFESSIONS: THE CASE OF OPTOMETRY (1980); Lee Benham & Alexandra Benham, Regulating Through the Professions: A Perspective on Information Control, 18 J.L. & ECON. 421 (1975).
80. 119 S. Ct. at 1613-14 (citing Jack Carr & Frank Mathewson, The Economics of Law Firms: A Study in the Legal Organization of the Firm, 33 J.L. & ECON. 307, 309 (1990); George A. Akerlof, The Market for 'Lemons': Quality Uncertainty and the Market Mechanism, 84 Q.J. ECON. 488 (1970); Hayne Leland, Quacks, Lemons, and Licensing: A Theory of Minimum Quality Standards, 87 J. POL. ECON. 1328, 1330 (1979)); 1 BARRY R. FURROW ET AL., HEALTH LAW § 3-1, at 86 (1995); Robert G. Evans, Professionals and the Production Function: Can Competition Policy Improve Efficiency in the Licensed Professions?, in OCCUPATIONAL LICENSURE AND REGULATION 235-36 (Simon Rottenberg ed., 1980). The Court did not discuss the literature showing that prices of professional services tend to be lower where advertising is more freely permitted, see, e.g., RONALD BOND ET AL., EFFECTS OF RESTRICTIONS ON ADVERTISING AND COMMERCIAL PRACTICE IN THE PROFESSIONS: THE CASE OF OPTOMETRY (1980); Lee Benham & Alexandra Benham, Regulating Through the Professions: A Perspective on Information Control, 18 J.L. & ECON. 421 (1975).
81. 119 S. Ct. at 1613-14 (citing Jack Carr & Frank Mathewson, The Economics of Law Firms: A Study in the Legal Organization of the Firm, 33 J.L. & ECON. 307, 309 (1990); George A. Akerlof, The Market for 'Lemons': Quality Uncertainty and the Market Mechanism, 84 Q.J. ECON. 488 (1970); Hayne Leland, Quacks, Lemons, and Licensing: A Theory of Minimum Quality Standards, 87 J. POL. ECON. 1328, 1330 (1979)); 1 BARRY R. FURROW ET AL., HEALTH LAW § 3-1, at 86 (1995); Robert G. Evans, Professionals and the Production Function: Can Competition Policy Improve Efficiency in the Licensed Professions?, in OCCUPATIONAL LICENSURE AND REGULATION 235-36 (Simon Rottenberg ed., 1980). The Court did not discuss the literature showing that prices of professional services tend to be lower where advertising is more freely permitted, see, e.g., RONALD BOND ET AL., EFFECTS OF RESTRICTIONS ON ADVERTISING AND COMMERCIAL PRACTICE IN THE PROFESSIONS: THE CASE OF OPTOMETRY (1980); Lee Benham & Alexandra Benham, Regulating Through the Professions: A Perspective on Information Control, 18 J.L. & ECON. 421 (1975).
82. 119 S. Ct. at 1613-14 (citing Jack Carr & Frank Mathewson, The Economics of Law Firms: A Study in the Legal Organization of the Firm, 33 J.L. & ECON. 307, 309 (1990); George A. Akerlof, The Market for 'Lemons': Quality Uncertainty and the Market Mechanism, 84 Q.J. ECON. 488 (1970); Hayne Leland, Quacks, Lemons, and Licensing: A Theory of Minimum Quality Standards, 87 J. POL. ECON. 1328, 1330 (1979)); 1 BARRY R. FURROW ET AL., HEALTH LAW § 3-1, at 86 (1995); Robert G. Evans, Professionals and the Production Function: Can Competition Policy Improve Efficiency in the Licensed Professions?, in OCCUPATIONAL LICENSURE AND REGULATION 235-36 (Simon Rottenberg ed., 1980). The Court did not discuss the literature showing that prices of professional services tend to be lower where advertising is more freely permitted, see, e.g., RONALD BOND ET AL., EFFECTS OF RESTRICTIONS ON ADVERTISING AND COMMERCIAL PRACTICE IN THE PROFESSIONS: THE CASE OF OPTOMETRY (1980); Lee Benham & Alexandra Benham, Regulating Through the Professions: A Perspective on Information Control, 18 J.L. & ECON. 421 (1975).
83. 119 S. Ct. at 1613-14 (citing Jack Carr & Frank Mathewson, The Economics of Law Firms: A Study in the Legal Organization of the Firm, 33 J.L. & ECON. 307, 309 (1990); George A. Akerlof, The Market for 'Lemons': Quality Uncertainty and the Market Mechanism, 84 Q.J. ECON. 488 (1970); Hayne Leland, Quacks, Lemons, and Licensing: A Theory of Minimum Quality Standards, 87 J. POL. ECON. 1328, 1330 (1979)); 1 BARRY R. FURROW ET AL., HEALTH LAW § 3-1, at 86 (1995); Robert G. Evans, Professionals and the Production Function: Can Competition Policy Improve Efficiency in the Licensed Professions?, in OCCUPATIONAL LICENSURE AND REGULATION 235-36 (Simon Rottenberg ed., 1980). The Court did not discuss the literature showing that prices of professional services tend to be lower where advertising is more freely permitted, see, e.g., RONALD BOND ET AL., EFFECTS OF RESTRICTIONS ON ADVERTISING AND COMMERCIAL PRACTICE IN THE PROFESSIONS: THE CASE OF OPTOMETRY (1980); Lee Benham & Alexandra Benham, Regulating Through the Professions: A Perspective on Information Control, 18 J.L. & ECON. 421 (1975).
84. 119 S. Ct. at 1613-14 (citing Jack Carr & Frank Mathewson, The Economics of Law Firms: A Study in the Legal Organization of the Firm, 33 J.L. & ECON. 307, 309 (1990); George A. Akerlof, The Market for 'Lemons': Quality Uncertainty and the Market Mechanism, 84 Q.J. ECON. 488 (1970); Hayne Leland, Quacks, Lemons, and Licensing: A Theory of Minimum Quality Standards, 87 J. POL. ECON. 1328, 1330 (1979)); 1 BARRY R. FURROW ET AL., HEALTH LAW § 3-1, at 86 (1995); Robert G. Evans, Professionals and the Production Function: Can Competition Policy Improve Efficiency in the Licensed Professions?, in OCCUPATIONAL LICENSURE AND REGULATION 235-36 (Simon Rottenberg ed., 1980). The Court did not discuss the literature showing that prices of professional services tend to be lower where advertising is more freely permitted, see, e.g., RONALD BOND ET AL., EFFECTS OF RESTRICTIONS ON ADVERTISING AND COMMERCIAL PRACTICE IN THE PROFESSIONS: THE CASE OF OPTOMETRY (1980); Lee Benham & Alexandra Benham, Regulating Through the Professions: A Perspective on Information Control, 18 J.L. & ECON. 421 (1975).
85. The Court quoted almost all of footnote 17 from the landmark decision applying antitrust to legal services, Goldfarb v. Virginia State Bar, 421 U.S. 773, 788-89 n.17 (1985): The fact that a restraint operates upon a profession as distinguished from a business is, of course, relevant in determining whether that particular restraint violates the Sherman Act. It would be unrealistic to view the practice of professions as interchangeable with other business activities, and automatically to apply to the professions antitrust concepts which originated in other areas, the public service aspect, and other features of the professions, may require that a particular practice, which could properly be viewed as a violation of the Sherman Act in another context, be treated differently. (quoted at 119 S. Ct. at 1613 n.10). It is revealing that the 5-4 splits in CDA and Florida Bar v. Went For It, Inc., 515 U.S. 618 (1995), which upheld Florida's 30-day bar on lawyer solicitation of accident victims, were identical except that Justices Breyer and Souter traded places. The Chief Justice and Justices O'Connor, Scalia, and Thomas were in both majorities; Justices Stevens, Kennedy, and Ginsburg dissented in both. The Chief Justice and Justices O'Connor, Scalia, and Souter (with Justice White; Justice Thomas had not yet replaced Justice Marshall) were also together in the Chief Justice's opinion for the Court in Gentile v. State Bar of Nevada, 501 U.S. 1030 (1991), which emphasized the legitimacy of much state regulation of lawyer speech. Florida Bar turned on the protection of lawyer communications as commercial speech, but issues obviously overlap. See generally Daniel Halberstam, Commercial Speech, Professional Speech, and the Constitutional Status of Social Institutions, 147 U. PA. L. REV. 771, 858-59 (1999) (review of commercial speech doctrine and its underpinnings, with a sympathetic review of Florida Bar); Alex Kozinski & Stuart Banner, Who's Afraid of Commercial Speech?, 76 VA. L. REV. 627 (1990) (unabashed defense of commercial speech) ; Fred S. McChesney, Commercial Speech in the Professions: The Supreme Court's Unanswered Questions and Questionable Answers, 134 U. PA. L. REV. 45 (1985) (advertising is important to lawyer competition); Frederick Schauer, Commercial Speech and the Architecture of the First Amendment, 56 U. CIN. L. REV. 1181 (1988) (worrying about the too-casual protection of commercial speech); Marc David Lawlor, Note, Ivory Tower Paternalism and Lawyer Advertising: The Case of Florida Bar v. Went For It, Inc., 40 ST. Louis U. L.J. 895 (1996) (criticizing the case).
86. The Court quoted almost all of footnote 17 from the landmark decision applying antitrust to legal services, Goldfarb v. Virginia State Bar, 421 U.S. 773, 788-89 n.17 (1985): The fact that a restraint operates upon a profession as distinguished from a business is, of course, relevant in determining whether that particular restraint violates the Sherman Act. It would be unrealistic to view the practice of professions as interchangeable with other business activities, and automatically to apply to the professions antitrust concepts which originated in other areas, the public service aspect, and other features of the professions, may require that a particular practice, which could properly be viewed as a violation of the Sherman Act in another context, be treated differently. (quoted at 119 S. Ct. at 1613 n.10). It is revealing that the 5-4 splits in CDA and Florida Bar v. Went For It, Inc., 515 U.S. 618 (1995), which upheld Florida's 30-day bar on lawyer solicitation of accident victims, were identical except that Justices Breyer and Souter traded places. The Chief Justice and Justices O'Connor, Scalia, and Thomas were in both majorities; Justices Stevens, Kennedy, and Ginsburg dissented in both. The Chief Justice and Justices O'Connor, Scalia, and Souter (with Justice White; Justice Thomas had not yet replaced Justice Marshall) were also together in the Chief Justice's opinion for the Court in Gentile v. State Bar of Nevada, 501 U.S. 1030 (1991), which emphasized the legitimacy of much state regulation of lawyer speech. Florida Bar turned on the protection of lawyer communications as commercial speech, but issues obviously overlap. See generally Daniel Halberstam, Commercial Speech, Professional Speech, and the Constitutional Status of Social Institutions, 147 U. PA. L. REV. 771, 858-59 (1999) (review of commercial speech doctrine and its underpinnings, with a sympathetic review of Florida Bar); Alex Kozinski & Stuart Banner, Who's Afraid of Commercial Speech?, 76 VA. L. REV. 627 (1990) (unabashed defense of commercial speech) ; Fred S. McChesney, Commercial Speech in the Professions: The Supreme Court's Unanswered Questions and Questionable Answers, 134 U. PA. L. REV. 45 (1985) (advertising is important to lawyer competition); Frederick Schauer, Commercial Speech and the Architecture of the First Amendment, 56 U. CIN. L. REV. 1181 (1988) (worrying about the too-casual protection of commercial speech); Marc David Lawlor, Note, Ivory Tower Paternalism and Lawyer Advertising: The Case of Florida Bar v. Went For It, Inc., 40 ST. Louis U. L.J. 895 (1996) (criticizing the case).
87. The Court quoted almost all of footnote 17 from the landmark decision applying antitrust to legal services, Goldfarb v. Virginia State Bar, 421 U.S. 773, 788-89 n.17 (1985): The fact that a restraint operates upon a profession as distinguished from a business is, of course, relevant in determining whether that particular restraint violates the Sherman Act. It would be unrealistic to view the practice of professions as interchangeable with other business activities, and automatically to apply to the professions antitrust concepts which originated in other areas, the public service aspect, and other features of the professions, may require that a particular practice, which could properly be viewed as a violation of the Sherman Act in another context, be treated differently. (quoted at 119 S. Ct. at 1613 n.10). It is revealing that the 5-4 splits in CDA and Florida Bar v. Went For It, Inc., 515 U.S. 618 (1995), which upheld Florida's 30-day bar on lawyer solicitation of accident victims, were identical except that Justices Breyer and Souter traded places. The Chief Justice and Justices O'Connor, Scalia, and Thomas were in both majorities; Justices Stevens, Kennedy, and Ginsburg dissented in both. The Chief Justice and Justices O'Connor, Scalia, and Souter (with Justice White; Justice Thomas had not yet replaced Justice Marshall) were also together in the Chief Justice's opinion for the Court in Gentile v. State Bar of Nevada, 501 U.S. 1030 (1991), which emphasized the legitimacy of much state regulation of lawyer speech. Florida Bar turned on the protection of lawyer communications as commercial speech, but issues obviously overlap. See generally Daniel Halberstam, Commercial Speech, Professional Speech, and the Constitutional Status of Social Institutions, 147 U. PA. L. REV. 771, 858-59 (1999) (review of commercial speech doctrine and its underpinnings, with a sympathetic review of Florida Bar); Alex Kozinski & Stuart Banner, Who's Afraid of Commercial Speech?, 76 VA. L. REV. 627 (1990) (unabashed defense of commercial speech) ; Fred S. McChesney, Commercial Speech in the Professions: The Supreme Court's Unanswered Questions and Questionable Answers, 134 U. PA. L. REV. 45 (1985) (advertising is important to lawyer competition); Frederick Schauer, Commercial Speech and the Architecture of the First Amendment, 56 U. CIN. L. REV. 1181 (1988) (worrying about the too-casual protection of commercial speech); Marc David Lawlor, Note, Ivory Tower Paternalism and Lawyer Advertising: The Case of Florida Bar v. Went For It, Inc., 40 ST. Louis U. L.J. 895 (1996) (criticizing the case).
88. The Court quoted almost all of footnote 17 from the landmark decision applying antitrust to legal services, Goldfarb v. Virginia State Bar, 421 U.S. 773, 788-89 n.17 (1985): The fact that a restraint operates upon a profession as distinguished from a business is, of course, relevant in determining whether that particular restraint violates the Sherman Act. It would be unrealistic to view the practice of professions as interchangeable with other business activities, and automatically to apply to the professions antitrust concepts which originated in other areas, the public service aspect, and other features of the professions, may require that a particular practice, which could properly be viewed as a violation of the Sherman Act in another context, be treated differently. (quoted at 119 S. Ct. at 1613 n.10). It is revealing that the 5-4 splits in CDA and Florida Bar v. Went For It, Inc., 515 U.S. 618 (1995), which upheld Florida's 30-day bar on lawyer solicitation of accident victims, were identical except that Justices Breyer and Souter traded places. The Chief Justice and Justices O'Connor, Scalia, and Thomas were in both majorities; Justices Stevens, Kennedy, and Ginsburg dissented in both. The Chief Justice and Justices O'Connor, Scalia, and Souter (with Justice White; Justice Thomas had not yet replaced Justice Marshall) were also together in the Chief Justice's opinion for the Court in Gentile v. State Bar of Nevada, 501 U.S. 1030 (1991), which emphasized the legitimacy of much state regulation of lawyer speech. Florida Bar turned on the protection of lawyer communications as commercial speech, but issues obviously overlap. See generally Daniel Halberstam, Commercial Speech, Professional Speech, and the Constitutional Status of Social Institutions, 147 U. PA. L. REV. 771, 858-59 (1999) (review of commercial speech doctrine and its underpinnings, with a sympathetic review of Florida Bar); Alex Kozinski & Stuart Banner, Who's Afraid of Commercial Speech?, 76 VA. L. REV. 627 (1990) (unabashed defense of commercial speech) ; Fred S. McChesney, Commercial Speech in the Professions: The Supreme Court's Unanswered Questions and Questionable Answers, 134 U. PA. L. REV. 45 (1985) (advertising is important to lawyer competition); Frederick Schauer, Commercial Speech and the Architecture of the First Amendment, 56 U. CIN. L. REV. 1181 (1988) (worrying about the too-casual protection of commercial speech); Marc David Lawlor, Note, Ivory Tower Paternalism and Lawyer Advertising: The Case of Florida Bar v. Went For It, Inc., 40 ST. Louis U. L.J. 895 (1996) (criticizing the case).
89. The Court quoted almost all of footnote 17 from the landmark decision applying antitrust to legal services, Goldfarb v. Virginia State Bar, 421 U.S. 773, 788-89 n.17 (1985): The fact that a restraint operates upon a profession as distinguished from a business is, of course, relevant in determining whether that particular restraint violates the Sherman Act. It would be unrealistic to view the practice of professions as interchangeable with other business activities, and automatically to apply to the professions antitrust concepts which originated in other areas, the public service aspect, and other features of the professions, may require that a particular practice, which could properly be viewed as a violation of the Sherman Act in another context, be treated differently. (quoted at 119 S. Ct. at 1613 n.10). It is revealing that the 5-4 splits in CDA and Florida Bar v. Went For It, Inc., 515 U.S. 618 (1995), which upheld Florida's 30-day bar on lawyer solicitation of accident victims, were identical except that Justices Breyer and Souter traded places. The Chief Justice and Justices O'Connor, Scalia, and Thomas were in both majorities; Justices Stevens, Kennedy, and Ginsburg dissented in both. The Chief Justice and Justices O'Connor, Scalia, and Souter (with Justice White; Justice Thomas had not yet replaced Justice Marshall) were also together in the Chief Justice's opinion for the Court in Gentile v. State Bar of Nevada, 501 U.S. 1030 (1991), which emphasized the legitimacy of much state regulation of lawyer speech. Florida Bar turned on the protection of lawyer communications as commercial speech, but issues obviously overlap. See generally Daniel Halberstam, Commercial Speech, Professional Speech, and the Constitutional Status of Social Institutions, 147 U. PA. L. REV. 771, 858-59 (1999) (review of commercial speech doctrine and its underpinnings, with a sympathetic review of Florida Bar); Alex Kozinski & Stuart Banner, Who's Afraid of Commercial Speech?, 76 VA. L. REV. 627 (1990) (unabashed defense of commercial speech) ; Fred S. McChesney, Commercial Speech in the Professions: The Supreme Court's Unanswered Questions and Questionable Answers, 134 U. PA. L. REV. 45 (1985) (advertising is important to lawyer competition); Frederick Schauer, Commercial Speech and the Architecture of the First Amendment, 56 U. CIN. L. REV. 1181 (1988) (worrying about the too-casual protection of commercial speech); Marc David Lawlor, Note, Ivory Tower Paternalism and Lawyer Advertising: The Case of Florida Bar v. Went For It, Inc., 40 ST. Louis U. L.J. 895 (1996) (criticizing the case).
90. 119 S. Ct. at 1613.
91. Id.
92. Id. at 1616.
93. Id. at 1615; see also id. at 1614-15 ("Whether advertisements that announced discounts for, say, first-time customers, would be less effective at conveying information relevant to competition if they listed the original and discounted prices for checkups, X-rays, and fillings, than they would be if they simply specified a percentage discount across the board, seems to us a question susceptible to empirical but not a priori analysis.").
94. 128 F.3d at 728.
95. 119 S. Ct. at 1616 (quoting 128 F.3d at 728).
96. 119 S. Ct. at 1616.
97. Id. (citations omitted).
98. The Solicitor General might have been more pointed in his comments on this subject. See infra note 292.
99. Brief of Appellant CDA, California Dental Ass'n, FTC Dkt. No. 9259, at 27-28 [hereinafter CDA Commission Brief]; see infra Part IV.C.1 (a).
100. CDA Commission Brief, supra note 87, at Heading V.B "The Evidence Does Not Support The ALJ's Finding That CDA 'Bans' Truthful Advertising."
101. Id. at 46. CDA claimed that dental services are an "experience good" for which there is an information "asymmetry," and it cited Bates for the proposition that "unverifiable quality or performance claims, 'under some circumstances, might well be deceptive or misleading to the public, even false,'" but this discussion was merely supportive of CDA's assertion that it challenged only ads which were believed to be false or misleading. Id. at 44-46.
102. Reply Brief of Appellant CDA, California Dental Ass'n, FTC Dkt. No. 9259, at 20 [hereinafter CDA Commission Reply Brief].
103. During oral argument before the Commission, Complaint Counsel was asked about dentists' Yellow Pages advertising, and responded as follows: An important thing to note is that most of these exhibits and excerpts from dental advertising were put in the record by complaint counsel, and the reason being is that they actually do show a high level of adherence . . . . Let me give you one example . . . . There are over 1100 individual listings in the San Francisco Yellow Pages for dentists, but there are only six advertising senior citizen discounts. As best we can tell, only three of them are CDA members. [W] e are not really sure how many of these cases CDA has actually gone after . . . . But based on the evidence in the record, it suggests they have probably gone after the vast majority of even those. Transcript of Oral Argument, California Dental Ass'n, FTC Dkt. No. 9259, at 34-35 [hereinafter Commission Transcript].
104. CDA Commission Reply Brief, supra note 90, at 21-22: These exhibits demonstrate that consumers incontrovertibly have ready access to dental advertisements that: • make so-called "comfort and caring claims" designed to appeal or assuage consumer fears and or previous negative dental experiences; • make so-called "superiority claims" designed to set the advertising dentist apart from his or her competitors or to separate the advertising dentist from consumer perceptions concerning dentists; • make so-called "quality claims" designed to set the advertising dentist apart from his or her competitors or to separate the advertising dentist from consumer perceptions concerning dentists; • claim that the fees of the advertising dentist are "low" or "affordable" or use terms or phrases of similar import; • offer "senior discounts" and other similar "across-the-board discounts" without specifying all fee variables; and • use "state of the art" or "modern" or terms and phrases of similar import.
105. 121 F.T.C. at 316. CDA's argument that its activities were "procompetitive" was based principally on the assertion that Judge Parker had found (see supra note 14) (1) no negative effect on competition and (2) "'that scrutiny of dental advertising is procompetitive because advertising which is false or misleading has a negative impact on competition." CDA Commission Brief, supra note 87, at 27 (quoting ALJ Finding 324) (emphasis omitted). As part of a discussion asserting that CDA does not "ban[] truthful advertising," id. at 34, CDA asserted that it "encourages full disclosure of price information." Id. at 36 (emphasis omitted). Other than citing one witness who said the disclosure requirements are not burdensome, id. at 37, there is no assertion, let alone citation of evidence, that dentists actually engage in any of the kind of detailed discount advertising theoretically permitted by CDA. For discount and nondiscount advertising, CDA claimed that it prevented only advertising reasonably believed to be "false or misleading in a material respect." Id. at 46. This part of CDA's argument was relatively perfunctory; the heart of the argument concerned market power.
106. Commission Transcript, supra note 91, at 4-5.
107. Id. at 67. But cf. id. at 64 (CDA argued because there is "asymmetric information," comparative advertising may lead them to an inferior dentist who will discourage them from ever again seeking dental care).
108. When Chairman Pitofsky sought to examine competitive effects, he discussed a hypothetical advertisement of a 10% senior citizen discount. CDA's counsel responded that such an advertisement would "[n]ot necessarily" violate CDA's ethics code. (CDA's counsel claimed that the decision would be made by CDA's component societies, for which CDA should not be held responsible. Id. at 18. "Some of the component societies take that [a state regulation] to mean that unless you have all of the prices in the advertisement, you violated the false and misleading standard. Other components take the position that it is impractical to do that and, therefore, they do not find violation." Id. at 12-13.) When Pitofsky asked for the justification for banning a truthful claim of a 10% discount, CDA's counsel responded that "there may not be anything wrong with" such an ad. Id. at 65. Chairman Pitofsky pressed counsel on whether a ban on such advertising would be "questionable" under the antitrust laws. Counsel responded that there is no antitrust problem because "what the advertising ban is, it is false and misleading, so it is a question of interpretation." Id. at 66.
109. CDA Commission Brief, supra note 87, at 63 (quoting initial decision). Perhaps inspired by Commissioner Azcuenaga's dissent, CDA made more of an argument that its requirements procompetitively "increase[d] the amount of information provided to consumers," id. at 32-33, but this assertion was made without much elaboration. CDA's principal argument was that limitations were imposed by state law, not CDA, and CDA's requirements were not burdensome.
110. CDA Commission Reply Brief, supra note 90, at 12.
111. Id. at 26 ("Under the circumstances, the FTC's assertion that CDA proscribes truthful and/or nondeceptive advertising is not supported by substantial evidence.").
112. Even in its reply brief, CDA's position was founded upon a claimed failure of factual proof: "Although the Commission and FTC staff speculate that the disclosure effectively bar across-the-board discounts (Br. at 43), neither point to a single instance in which a dentist desired to advertise a discount but could not because of the burden of making the disclosures." Id. at 25 (emphasis in original; footnote omitted). The Ninth Circuit wrote that CDA "contends that claims about quality are inherently unverifiable and therefore misleading," and explained that this would not justify banning all quality claims without regard to whether they are false or misleading. 128 F.3d at 728. Although inartfully phrased, the Ninth Circuit probably did not mean that CDA was seeking to justify a complete ban on quality claims, since CDA's briefs and its litigation before the Commission made no such claim.
113. See supra note 92.
114. CDA Commission Brief, supra note 87, at 5.
115. CDA's petition for certiorari justified its restrictions with a more general claim that it was "preventing false and misleading advertising." See Petition for Writ of Certiorari at i (Questions Presented), 21.
116. Brief of Petitioner, CDA, No. 97-1625, at 33 (Subheading II.A.2) [hereinafter CDA Supreme Court Brief].
117. Id. at 36 n.11 (citing AMERICAN DENTAL ASSOCIATION, THE 1990 SURVEY OF DENTAL SERVICES RENDERED 25-29 (1994)).
118. Id. at 37.
119. Id. at Heading II.B.2.C ("CDA's substantiation policies prevent misleading professional advertising and increase consumer information."). LEXIS and Westlaw checks of Supreme Court filings reveal no other document that used the term "substantiation."
120. Robert B. Reich, Preventing Deception in Commercial Speech, 54 N.Y.U. L. REV. 775, 801, 803 (1979) (quoted at CDA Supreme Court Brief, supra note 104, at 38-39).
121. CDA Supreme Court Brief, supra note 104, at 38.
122. See supra note 92 and accompanying text.
123. CDA Supreme Court Brief, supra note 104, at 5-6, 40.
124. Id. at 40. CDA highlighted Friedman v. Rogers, 440 U.S. 1, 3 (1978), a case it did not cite to the Commission or the Ninth Circuit, as an example of an approach properly permitting communication only of underlying factual information. CDA's reply brief argued that "CDA guidelines on quality ads are directed only at those that contain unverifiable claims" and (citing another article not cited to the Commission or the Ninth Circuit) that sellers of "complex services" can use "subjective claims . . . to give erroneous 'signals' of quality." CDA Supreme Court Reply Brief, supra note 64, at 13.
125. 119 S. Ct. at 1614-15.
126. 121 F.T.C. at 318. The Commission cited, among other things, its Policy Statement on Deception, 103 F.T.C. 174, 181 (1984) (appended to Cliffdale Associates, Inc., 103 F.T.C. 110 (1984)). That Statement explains that certain kinds of advertisements are "unlikely to deceive consumers acting reasonably," and points in particular to "subjective claims" and "correctly stated opinion claims." It also indicates that "[t]he Commission generally will not pursue cases involving obviously exaggerated or puffing representations, i.e., those that the ordinary consumers do not take seriously." Id. Although the Commission has a substantiation policy, which requires advertisers and their agencies to "have a reasonable basis for advertising claims before they are disseminated," this applies only to claims that "make objective assertions." FTC Policy Statement Regarding Advertising Substantiation, 104 F.T.C. 648, 839 (1983) (appended to Thompson Medical Co., 104 F.T.C. 648, 839 (1983)).
127. Cf. Fashion Originators' Guild v. ETC, 312 U.S. 457 (1941) (condemning an association that was "in reality an extra-governmental agency, which prescribes rules for the regulation and restraint of interstate commerce, and provides extra-judicial tribunals for determination and punishment of violations, and thus 'trenches upon the power of the national legislature and violates the the statute"') (quoting Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 242 (1989)).
128. 119 S. Ct. at 1616 n.14.
129. Id. at 1616; see supra note 27.
130. 119 S. Ct. at 1616.
131. See David Balto, Some Observations on California Dental Association v. FTC, ANTITRUST, Fall 1999, at 64.
132. Market power and its role in antitrust are nicely discussed in Michael S. McFalls, The Role and Assessment of Classical Market Power in Joint Venture Analysis, 66 ANTITRUST L.J. 651 (1998).
133. The debate is thoroughly discussed in William E. Cohen, Per se Illegality and Truncated Rule of Reason: The Search for a Foreshortened Antitrust Analysis (FTC Staff Discussion Draft, Nov. 1997) 〈http://www.ftc.gov/opp/jointvent/persepap.htm〉, and ABA ANTITRUST SECTION, THE RULE OF REASON (forthcoming). Other useful contributions include Edward Correia, Joint Ventures: Issues in Enforcement Policy, 66 ANTITRUST L.J. 737 (1998), and James A. Keyte, What It Is and How It Is Being Applied: The "Quick Look" Rule of Reason, ANTITRUST, Summer 1997, at 21.
134. The debate is thoroughly discussed in William E. Cohen, Per se Illegality and Truncated Rule of Reason: The Search for a Foreshortened Antitrust Analysis (FTC Staff Discussion Draft, Nov. 1997) 〈http://www.ftc.gov/opp/jointvent/persepap.htm〉, and ABA ANTITRUST SECTION, THE RULE OF REASON (forthcoming). Other useful contributions include Edward Correia, Joint Ventures: Issues in Enforcement Policy, 66 ANTITRUST L.J. 737 (1998), and James A. Keyte, What It Is and How It Is Being Applied: The "Quick Look" Rule of Reason, ANTITRUST, Summer 1997, at 21.
135. The debate is thoroughly discussed in William E. Cohen, Per se Illegality
136. The debate is thoroughly discussed in William E. Cohen, Per se Illegality and Truncated Rule of Reason: The Search for a Foreshortened Antitrust Analysis (FTC Staff Discussion Draft, Nov. 1997) 〈http://www.ftc.gov/opp/jointvent/persepap.htm〉, and ABA ANTITRUST SECTION, THE RULE OF REASON (forthcoming). Other useful contributions include Edward Correia, Joint Ventures: Issues in Enforcement Policy, 66 ANTITRUST L.J. 737 (1998), and James A. Keyte, What It Is and How It Is Being Applied: The "Quick Look" Rule of Reason, ANTITRUST, Summer 1997, at 21.
137. Few can resist the allure of the phrase "quick look." That is one of its problems.
138. Cf. LEWIS CARROLL, ALICE IN WONDERLAND 163 (Norton Critical Ed. 1971) ("'When I use a word,' Humpty Dumpty said, in a rather scornful tone, 'it means just what I choose it to mean - neither more nor less.'").
139. 15 U.S.C. § 1 ("Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal.").
140. Board of Trade of City of Chicago v. United States, 246 U.S. 231, 238 (1918) ("But the legality of an agreement or regulation cannot be determined by so simple a test, as whether it restrains competition. Every agreement concerning trade, every regulation of trade, restrains. To bind, to restrain, is of their very essence.").
141. 246 U.S. at 238.
142. ABA ANTITRUST SECTION, ANTITRUST LAW DEVELOPMENTS 53 (4th ed. 1997) (footnotes omitted); see also, e.g., Law v. NCAA, 134 F.3d 1010, 1019 (10th Cir. 1998) ("Under this approach, the plaintiff bears the initial burden of showing that an agreement had a substantially adverse effect on competition. If the plaintiff meets this burden, the burden shifts to the defendant to come forward with evidence of the procompetitive virtues of the alleged wrongful conduct. If the defendant is able to demonstrate procompetitive effects, the plaintiff then must prove that the challenged conduct is not reasonably necessary to achieve the legitimate objectives or that those objectives can be achieved in a substantially less restrictive manner. Ultimately, if these steps are met, the harms and benefits must be weighed against each other in order to judge whether the challenged behavior is, on balance, reasonable.") (citations omitted); K.M.B. Warehouse Distribs., Inc. v. Walker Mfg. Co., 61 F.3d 123, 127 (2d Cir. 1995) (same).
143. E.g., United States v. Brown Univ., 5 F.3d 658, 668 (3d Cir. 1993) (citations omitted). The use of market power to screen meritorious cases from frivolous ones was advocated with particular vigor by now-Judge Easterbrook. See, e.g., Frank H. Easterbrook, The Limits of Antitrust, 63 TEX. L. REV. 1 (1984).
144. See, e.g., Assam Drug Co. v. Miller Brewing Co., 798 F.2d 311 (8th Cir. 1986) (affirming summaryjudgment because Miller Beer, with a 19.1% market share, lacked market power); see also Richard Steuer, The Turning Points in Distribution Law, 35 ANTITRUST BULL. 467, 513-18 (1990); cf. Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2 (1984) (tying case finding that defendant with market share of approximately 30% lacked market power).
145. For an empirical demonstration that courts almost always dispose of rule of reason cases without reaching the stage of balancing procompetitive and anticompetitive effects, see Michael A. Carrier, The Real Rule of Reason: Bridging the Disconnect (unpublished manuscript on file with the author).
146. 441 U.S. 1 (1979).
147. NYNEX Corp. v. Discon, Inc., 525 U.S. 128 (1998) (vertical boycotts); State Oil Co. v. Khan, 522 U.S. 3 (1997) (maximum resale prices); Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Co., 472 U.S. 284 (1985) (certain group boycotts); NCAA v. Board of Regents, 468 U.S. 85 (1984) (certain necessary restraints). But cf. Palmer v. BRG of Georgia, Inc., 498 U.S. 46 (1990) (horizontal market division); FTC v. Superior Ct. Trial Lawyers Ass'n, 493 U.S. 411 (1990) (horizontal price fixing). For a commentary suggesting that Khan is a significant rejection of the value of trader freedom, see Alan J. Meese, Economic Theory, Trader Freedom, and Consumer Welfare: State Oil Co. v. Khan and the Continuing Incoherence of Antitrust Doctrine, 84 CORNELL L. REV. 763 (1999).
148. 435 U.S. 679 (1978) (Stevens, J.).
149. 404 F. Supp. 457 (D.D.C. 1975), aff'd in part and remanded in part, 555 F.2d 978 (D.C. Cir. 1977).
150. Brief for the United States, National Society of Professional Engineers v. United States, 435 U.S. 679 (1978) (No. 76-1767).
151. Professional Engineers, 435 U.S. at 681.
152. Id. at 696.
153. Id. at 692-93.
154. Compare, e.g., Arizona v. Maricopa County Med. Soc'y, 457 U.S. 332, 357, 362 (1982) (Powell, J., dissenting) (per se) and Catalano, Inc. v. Target Sales, Inc. 446 U.S. 643, 647 (1980) (per curiam) (same) with, e.g., Indiana Fed'n of Dentists, 476 U.S. 447, 458 (1986) (citing Professional Engineers for proposition that Court has been "slow to condemn rules adopted by professional associations as unreasonable per se") and Community Communications Co. v. City of Boulder, 455 U.S. 40, 60, 65-66 (1982) (Rehnquist, J., dissenting) (Professional Engineers limits factors that may be considered under rule of reason).
155. Supreme Court Transcript, supra note 54, at 29.
156. 468 U.S. 85 (1984).
157. Id. at 109-10.
158. Id. at 109.
159. See infra at notes 154-57 and accompanying text.
160. 468 U.S. at 110 & n.42.
161. See Wesley J. Liebeler, Horizontal Restrictions, Efficiency, and the Per Se Rule, 33 UCLA L. Rev. 1019 (1986) (agreement should have been per se illegal).
162. NCAA, 468 U.S. at 111-13.
163. 476 U.S. 447 (1986).
164. Id. at 459.
165. Id. at 460 (quoting NCAA v. Board of Regents, 468 U.S. 85, 109-10 (1984)).
166. Id. at 461 (quoting PHILLIP E. AREEDA, ANTITRUST LAW ¶ 1511, at 429 (1986), where market power was described as "but a 'surrogate for detrimental effects'").
167. Id. at 460.
168. Id. at 461-62 ("A concerted and effective effort to withhold (or make more costly) information desired by consumers for the purpose of determining whether a particular purchase is cost justified is likely enough to disrupt the proper functioning of the price-setting mechanism of the market that it may be condemned even absent proof that it resulted in higher prices or, as here, the purchase of higher priced services, than would occur in its absence.") (citation to Professional Engineers omitted).
169. Brief for the United States as Amicus Curiae, NCAAv. Board of Regents [hereinafter Amicus Brief.] Earlier steps were taken by the Federal Trade Commission. See American Med. Ass'n, 94 F.T.C. 701, 1004 (1979) (Clanton, Comm'r) ("the contours of the analysis required under the rule or reason will vary somewhat depending upon the nature of the restraint"), aff'd, 638 F.2d 443 (2d Cir. 1980), aff'd by an equally divided Court, 455 U.S. 676 (1982); Michigan State Med. Soc'y, 101 F.T.C. 191, 292 (1983) (Clanton, Comm'r) ("Where horizontal arrangements so closely relate to prices or fees as they do here, a less elaborate analysis of competitive effects is required." (citing Professional Engineers)).
170. Amicus Brief, supra note 154, at 7 n.6 (citing LAWRENCE SULLIVAN, ANTITRUST 192 (1977); Phillip Areeda, The "Rule of Reason" in Antitrust Analysis: General Issues 37-38 (Federal Judicial Center June 1981)).
171. Amicus Brief, supra note 154, at 7 n.6 (citing LAWRENCE SULLIVAN, ANTITRUST 192 (1977); Phillip Areeda, The "Rule of Reason" in Antitrust Analysis: General Issues 37-38 (Federal Judicial Center June 1981)).
172. An efficiency justification exists if the challenged restraint increases the quantity or quality, or reduces the cost, of overall output - e.g., by creating a new product, improving the operation of a market, or reducing production or marketing costs - and is reasonably necessary to achieve such efficiencies.
173. Brief for the National Collegiate Athletic Ass'n as Amicus Curiae in Support of Reversal, CDA, No. 97-1625, at 16 [hereinafter NCAA Amicus Brief] (footnote in original).
174. 110 F.T.C. 549, 604 (1988) (Calvani, Cmm'r). The most vigorous criticism of the FTC's "Mass. Board" approach is Joseph Kattan, The Role of Efficiency Considerations in the Federal Trade Commission's Antitrust Analysis, 64 ANTITRUST L.J. 613 (1996); see also John E. Lopatka, Antitrust and Professional Rules: A Framework for Analysis, 28 SAN DIEGO L. REV. 301, 375-79 (1991) (preferring more weight to market power). The approach is defended with equal vigor in Timothy J. Muris, The Federal Trade Commission and the Rule of Reason: In Defense of Massachusetts Board, 66 ANTITRUST L.J. 773 (1998); Timothy J. Muris, The New Rule of Reason, 57 ANTITRUST L.J. 859 (1989); and James L. Langenfeld & Louis Silvia, Federal Trade Commission Horizontal Restraint Cases: An Economic Perspective, 61 ANTITRUST L.J. 653 (1993).
175. 110 F.T.C. 549, 604 (1988) (Calvani, Cmm'r). The most vigorous criticism of the FTC's "Mass. Board" approach is Joseph Kattan, The Role of Efficiency Considerations in the Federal Trade Commission's Antitrust Analysis, 64 ANTITRUST L.J. 613 (1996); see also John E. Lopatka, Antitrust and Professional Rules: A Framework for Analysis, 28 SAN DIEGO L. REV. 301, 375-79 (1991) (preferring more weight to market power). The approach is defended with equal vigor in Timothy J. Muris, The Federal Trade Commission and the Rule of Reason: In Defense of Massachusetts Board, 66 ANTITRUST L.J. 773 (1998); Timothy J. Muris, The New Rule of Reason, 57 ANTITRUST L.J. 859 (1989); and James L. Langenfeld & Louis Silvia, Federal Trade Commission Horizontal Restraint Cases: An Economic Perspective, 61 ANTITRUST L.J. 653 (1993).
176. 110 F.T.C. 549, 604 (1988) (Calvani, Cmm'r). The most vigorous criticism of the FTC's "Mass. Board" approach is Joseph Kattan, The Role of Efficiency Considerations in the Federal Trade Commission's Antitrust Analysis, 64 ANTITRUST L.J. 613 (1996); see also John E. Lopatka, Antitrust and Professional Rules: A Framework for Analysis, 28 SAN DIEGO L. REV. 301, 375-79 (1991) (preferring more weight to market power). The approach is defended with equal vigor in Timothy J. Muris, The Federal Trade Commission and the Rule of Reason: In Defense of Massachusetts Board, 66 ANTITRUST L.J. 773 (1998); Timothy J. Muris, The New Rule of Reason, 57 ANTITRUST L.J. 859 (1989); and James L. Langenfeld & Louis Silvia, Federal Trade Commission Horizontal Restraint Cases: An Economic Perspective, 61 ANTITRUST L.J. 653 (1993).
177. 110 F.T.C. 549, 604 (1988) (Calvani, Cmm'r). The most vigorous criticism of the FTC's "Mass. Board" approach is Joseph Kattan, The Role of Efficiency Considerations in the Federal Trade Commission's Antitrust Analysis, 64 ANTITRUST L.J. 613 (1996); see also John E. Lopatka, Antitrust and Professional Rules: A Framework for Analysis, 28 SAN DIEGO L. REV. 301, 375-79 (1991) (preferring more weight to market power). The approach is defended with equal vigor in Timothy J. Muris, The Federal Trade Commission and the Rule of Reason: In Defense of Massachusetts Board, 66 ANTITRUST L.J. 773 (1998); Timothy J. Muris, The New Rule of Reason, 57 ANTITRUST L.J. 859 (1989); and James L. Langenfeld & Louis Silvia, Federal Trade Commission Horizontal Restraint Cases: An Economic Perspective, 61 ANTITRUST L.J. 653 (1993).
178. 110 F.T.C. 549, 604 (1988) (Calvani, Cmm'r). The most vigorous criticism of the FTC's "Mass. Board" approach is Joseph Kattan, The Role of Efficiency Considerations in the Federal Trade Commission's Antitrust Analysis, 64 ANTITRUST L.J. 613 (1996); see also John E. Lopatka, Antitrust and Professional Rules: A Framework for Analysis, 28 SAN DIEGO L. REV. 301, 375-79 (1991) (preferring more weight to market power). The approach is defended with equal vigor in Timothy J. Muris, The Federal Trade Commission and the Rule of Reason: In Defense of Massachusetts Board, 66 ANTITRUST L.J. 773 (1998); Timothy J. Muris, The New Rule of Reason, 57 ANTITRUST L.J. 859 (1989); and James L. Langenfeld & Louis Silvia, Federal Trade Commission Horizontal Restraint Cases: An Economic Perspective, 61 ANTITRUST L.J. 653 (1993).
179. 4 Trade Reg. Rep. (CCH) ¶ 13,109, at 20,600 (footnote omitted): First, the Department determines whether the joint venture would likely have any anticompetitive effect in the market or markets in which the joint venture proposes to operate or in which the economic integration of the parties' operations occurs (the "joint venture markets"). Second, the Department determines whether the joint venture or any of its restraints would likely have an anticompetitive effect in any other market or markets ("spillover markets") in which the joint venture members are actual or potential competitors outside of the joint venture. Third, using the analysis described in Section 3.5 of the Guidelines, the Department analyzes the likely competitive effects of any nonprice vertical restraints imposed in connection with the joint venture. The Department will not challenge a joint venture if under the first three steps, the Department concludes that the joint venture would not likely have any significant anticompetitive effects. If, however, the Department's analysis under the first three steps reveals significant anticompetitive risks, then, under step 4, the Department considers whether any procompetitive efficiencies that the parties claim would be achieved by the joint venture would outweigh the risk of anticompetitive harm.
180. See, e.g., Joe Sims, Developments in Agreements Among Competitors, 58 ANTITRUST L.J. 433, 439 (1989): I have heard Mr. Zuckerman and his counterparts at the Department explain that there are serious and significant distinctions. But does it matter? Do you care, do I care, does anybody care? We are at the "head of a pin" stage, unfortunately, and I don't think "rules" like these are likely to be too useful.
181. See supra note 20.
182. Klein said that the Division asks three questions: [1] Is this "the type of restraint that is currently recognized by the courts as being a per se violation, such as an unadorned agreement to fix prices, curtail output, or divide markets?" If so, it is illegal. [2] If we conclude that a horizontal agreement that directly limits competition on price or output between or among competitors is not per se illegal, we then inquire whether there's a procompetitive justification for the agreement. We put that question to the party defending the agreement, and we expect a response that doesn't merely speculate about the existence of efficiencies, but rather comes forward with real-world evidence - factual evidence, expert economic evidence, and preferably both - to support the claim . . . . And, if we find that the proffered procompetitive justifications are unsubstantiated, we conclude that the agreement should be struck down. [3] [I]f we find there are significant procompetitive benefits to the agreement, we then . . . seek to determine whether its likely anticompetitive effects outweigh its procompetitive benefits. This weighing and balancing . . . often requires an elaborate market analysis, unless, of course, there is convincing evidence of a direct market effect on price or output. But in either event, the key point I want to stress here is that only if there are real procompetitive benefits should there be any need to show actual anticompetitive effects. Joel I. Klein, A Stepwise Approach to Antitrust Review of Horizontal Agreements, Address Before the ABA Antitrust Section Semi-Annual Fall Policy Program (Nov. 7, 1996) 〈http://www.usdoj.gov/atr/public/speeches/jikaba.htm〉, reprinted in [Current Comment] Trade Reg. Rep. (CCH) ¶ 50,157 [hereinafter Klein, Stepwise Speech).
183. Joel I. Klein, Point: A "Stepwise" Approach for Analyzing Horizontal Agreements Will Provide a Much Needed Structure for Antitrust Review, ANTITRUST, Spring 1998, at 41; William J. Kolasky, Jr., Counterpoint: The Department of Justice's "Stepwise" Approach Imposes Too Heavy a Burden on Parties to Horizontal Agreements, ANTITRUST, Spring 1998, at 31, cited in NCAA Amicus Brief, supra note 157, at 17 & 19, and CDA, 119 S. Ct. at 1617 n.15.
184. Joel I. Klein, Point: A "Stepwise" Approach for Analyzing Horizontal Agreements Will Provide a Much Needed Structure for Antitrust Review, ANTITRUST, Spring 1998, at 41; William J. Kolasky, Jr., Counterpoint: The Department of Justice's "Stepwise" Approach Imposes Too Heavy a Burden on Parties to Horizontal Agreements, ANTITRUST, Spring 1998, at 31, cited in NCAA Amicus Brief, supra note 157, at 17 & 19, and CDA, 119 S. Ct. at 1617 n.15.
185. 629 F.2d 1351 (5th Cir. 1980) (Goldberg, J.). The Realty Multi-List court said that the form of analysis it outlined was "quite similar to that first envisioned under the rule of reason by Judge Taft in his opinion in United States v. Addyston Pipe & Steel Co., 85 F. 271 (6th Cir. 1898), aff'd, 175 U.S. 211 (1899)." 629 F.2d at 1375 n.49.
186. 629 F.2d at 1372 n.39 (quoting LAWRENCE SULLIVAN, ANTITRUST 192 (1977)).
187. The Seventh Circuit was just a little quicker than the District Court of Connecticut, which declined to take a "quick look" at market effects in a price-fixing case in United States v. Stop & Shop Cos., 1985-2 Trade Cas. (CCH) ¶ 66,689 (D. Conn. 1984).
188. 744 F.2d 598 (7th Cir. 1984).
189. Id. at 603.
190. 744 F.2d 588 (7th Cir. 1984).
191. 961 F.2d 667 (7th Cir. 1992) (Easterbrook, J.).
192. 134 F.3d 1010 (10th Cir. 1998).
193. 961 F.2d at 676.
194. Id. at 674 ("Unless there are sound justifications, the court condemns the practice without ado, using the 'quick look' version of the Rule of Reason advocated by Professor Areeda and by the Solicitor General's brief in NCAA. See 668 U.S. at 109-11 nn.39 & 42; Phillip E. Areeda, 7 Antitrust Law ¶ 1508 (1986)."). Professor Areeda suggested that a restraint "of the kind that has been regarded as very serious and usually without recognized redeeming virtue . . . may nevertheless avoid summary condemnation if the defendant claims justification of the kind which a 'quick look' - usually at the arguments alone - shows to be legitimate in principle and capable of being proved satisfactorily." 7 PHILLIP E. AREEDA, ANTITRUST LAW 428-29 (1986).
195. Id. at 674 ("Unless there are sound justifications, the court condemns the practice without ado, using the 'quick look' version of the Rule of Reason advocated by Professor Areeda and by the Solicitor General's brief in NCAA. See 668 U.S. at 109-11 nn.39 & 42; Phillip E. Areeda, 7 Antitrust Law ¶ 1508 (1986)."). Professor Areeda suggested that a restraint "of the kind that has been regarded as very serious and usually without recognized redeeming virtue . . . may nevertheless avoid summary condemnation if the defendant claims justification of the kind which a 'quick look' - usually at the arguments alone -shows to be legitimate in principle and capable of being proved satisfactorily." 7 PHILLIP E. AREEDA, ANTITRUST LAW 428-29 (1986).
196. On remand, the NBA argued that it should be treated as a single entity rather than a cartel. The district court disagreed, but the Seventh Circuit, again in an opinion by Judge Easterbrook, ruled that "the NBA is sufficiently integrated that its superstation rules may not be condemned without analysis under the full Rule of Reason." 95 F.3d 593, 600 (7th Cir. 1996). The Court added that "[substantial market power is an indispensable ingredient of every claim under the full Rule of Reason." Id. Previous opinions by Judge Easterbrook had treated arguments for a "quick look" relatively unsympathetically. In Illinois Corporate Travel, Inc. v. American Airlines, Inc., 806 F.2d 722, 727 (7th Cir. 1986) (Easterbrook, J.), the Seventh Circuit had affirmed the denial of a preliminary injunction. After addressing claims of per se illegality, the court continued by looking at at "short form or quick look Rule of Reason analysis" that looks directly at alleged adverse effects. The plaintiff did not fare well. "Unless the practice 'almost always' makes consumers worse off, it is not subject to condemnation without more detailed study of its effects - including proof of market power and actual injury." Id. at 727 (quoting Broadcast Music). Polk Bros. v. Forest City Enterprises, 776 F.2d 185 (7th Cir. 1985) (Easterbrook, J.), reversed a denial of an injunction to enforce a covenant that reserved to each of two parties the right to sell certain products. The court essentially ruled that the restraints were ancillary rather than naked, so they were not per se illegal and had to be judged under the rule of reason. The court mentioned the "quick look" only briefly, making the same point as in Illinois Corporate Travel. The court stressed the importance of market power to the rule of reason: "The first step in any Rule of Reason case is an assessment of market power. Unless the firms have the power to raise price by curtailing output, their agreement is unlikely to harm consumers, and it makes sense tc understand their cooperation as benign or beneficial." Id. at 191 (citations omitted). A plaintiff's attempt to invoke the "quick look" also met with no success in U.S. Healthcare Inc. v. Healthsource, Inc., 986 F.2d 589 (1st Cir. 1993). The First Circuit, in an opinion by Judge Boudin, wrote that in NCAA and IFD the Supreme Court had "actually contracted the per se rule by refusing to apply it to horizontal agreements that involved price and output fixing . . . or the setting of other terms of trade . . . . " Id. at 594-95. The "quick look" had no applicability to the case before the court, which involved exclusive dealing that could be judged only under the normal rule of reason.
197. 134 F.3d at 1020.
198. See id. at 1024 (Another court "erred as a matter of law to the extent that the court tried to free the NCAA . . . from its burden of showing that the procompetitive justificatior for a restraint on trade outweigh its anticompetitive effects. The Supreme Court . . . mad it clear that the NCAA still shoulders that burden . . . and we hold that the NCAA faile to provide sufficient evidence to carry its burden in this case.") (citation omitted).
199. Detroit Auto Dealers Ass'n, 111 F.T.C. 417 (1989), aff'd in part and remanded, 95 F.2d 457 (6th Cir. 1992), modified on remand, 119 F.T.C. 891 (1995), remanded with direction for a hearing for further modification, 84 F.3d 787 (6th Cir. 1996).
200. 955 F.2d at 471.
201. In contrast, Judge Ryan wrote a vigorous opinion explaining that he would have affirmed the Commission's decision in its entirety. Id. at 473 (Ryan, J., concurring in part and dissenting in part).
202. 5 F.3d 658 (3d Cir. 1993).
203. Id. at 669; followed, Bogan v. Hodgkins, 166 F.3d 509, 514 n.6 (2d Cir. 1999) (quick look inappropriate because defendant had set forth "sound allegations of procompetitive benefit").
204. 5 F.3d at 678; see also 119 S. Ct. at 1613 (citing Brown University as "finding full rule-of-reason analysis required where universities sought to provide financial aid to needy students and noting by way of contrast that the agreements in National Soc. of Professional Engineers and Indiana Federation of Dentists 'embodied a strong economic self-interest of the parties to them.'") (quoting Brown University, 5 F.3d at 677-78).
205. 92 F.3d 781 (9th Cir. 1996).
206. Id. at 789.
207. 119 S. Ct. at 1612.
208. Id. This language was quoted in Granite Partners, L.P. v. Bear, Stearns & Co., 7 Trade Reg. Rep. (CCH) ¶ 72,604, at 85,435 (S.D.N.Y. July 29, 1999), where the court, having denied per se review because the antitcompetitive impact of a conspiracy was "neither obvious nor easily ascertainable," refused to "engage in yet another form of truncated antitrust analysis."
209. 119 S. Ct. at 1613.
210. Id.; see also id. at 1617 ("The obvious anticompetitive effect that triggers abbreviated analysis has not been shown.").
211. 128 F.3d at 728.
212. 119 S. Ct. at 1615 n.12; see also id. at 1615 ("the court's adversion to empirical evidence at the moment of this implicit burden-shifting underscores the leniency of its enquiry into evidence of the restrictions' anticompetitive effects").
213. Id. at 1615 n.12 ("The point is that before a theoretical claim of anticompetitive effects can justify shifting to a defendant the burden to show empirical evidence of procompetitive effects, as quick-look analysis in effect requires, there must be some indication that the court making the decision has properly identified the theoretical basis for the anticompetitive effects and considered whether the effects actually are anticompetitive. Where, as here, the circumstances of the restriction are somewhat complex, assumption alone will not do.").
214. See William J. Kolasky, California Dental Ass'n v. FTC: The New Antitrust Empiricism, ANTITRUST, Fall 1999, at 68.
215. 119 S. Ct. at 1613.
216. Id. at 1615; see also id. (court of appeals "indirectly acknowledged the plausibility of procompetitive justifications"); id. at 1617 (criticizing the court of appeals for giving no weight to an "at least equally plausible suggestion"); id. ("the plausibility of competing claims about the effects of the proffessional advertising restrictions rules out the indulgently abbreviated review to which the Commission's order was treated").
217. NCAA Amicus Brief, supra note 157, at 5; see also id. at 6 ("If a defendant can state a facially plausible procompetitive justification for the challenged restraint, the 'quick look' should be over and the restraint examined in full. A defendant should not have to produce factual support sufficient to prevail after a full rule-of-reason analysis before the plaintiff is put to its proof of actual anticompetitive effects."); id. at 16 ("a defendant can terminate the 'quick look' and return to the full rule of reason by advancing a plausible procompetitive justification for the challenged restraint"); see also Brief of the American Dental Association et al. as Amici Curiae in Support of Petitioners, CDA, Dkt. 97-1625, at 20 n.10 [hereinafter ADA Amicus Brief] ("Other courts of appeals have faithfully followed this Court's teaching that quick-look analysis is inappropriate unless a restraint is inherently suspect and unsupported by any procompetitive justification."). The NCAA properly acknowledged its special interest as a party that had lost a flexible rule of reason case, a phase of which continued. Law v. NCAA, 134 F.3d 1010 (10th Cir. 1998). The Supreme Court eventually denied the NCAA's petition for certiorari from that decision. 119 S. Ct. 65 (1998).
218. See supra notes 162-63 and accompanying text.
219. The SG disagreed and distinguished the cases on which the NCAA relied. "Neither case suggests that an exhaustive market analysis is required whenever a defendant asserts a procompetitive theory." SG Brief, supra note 64, at 34 n.27; see also Brief of the States of Arizona et al. as Amici Curiae in Support of Respondent, CDA, No. 97-1625, at 19 (objecting to the suggestion that "a mere assertion of a pro-competitive justification by the defendant should automatically require a thorough market analysis").
220. 119 S. Ct. at 1617 (quoting PHILLIP AREEDA, ANTITRUST LAW ¶ 1507, at 402 (1986)).
221. Id. at 1617 n.15 (citing Kolasky, supra note 163, at 43; Thomas A. Piraino, Jr., Making Sense of the Rule of Reason: A New Standard for Section 1 of the Sherman Act, 47 VAND. L. REV. 1753, 1771 (1994)).
222. 119 S. Ct. at 1617 n.15 ("But see Klein . . . (examination of procompetitivejustifications 'is by no means a full scrutiny of the proffered efficiency justification. It is, rather, a hard look at the justification to determine if it meets the defendant's burden of coming forward with - but not establishing - a valid efficiency justification.')."). In fact, Klein almost surely agrees with the Court's observation that there is a sliding scale. Cf. Klein, Stepwise Speech, supra note 162, at 6 (the Court has "made clear that there is 'often no bright line separat[ing] per se from Rule of Reason analysis'" (quoting NCAA, 468 U.S. at 104 n.26) (brackets by Klein)).
223. NCAA Amicus Brief, supra note 157, at 18 (citations omitted); The "stepwise approach" now favored by the Antitrust Division also would permit a summary finding of liability unless the defendant proves "with real world evidence - factual evidence, expert economic evidence, or preferably both" - that the restraint actually serves a procompetitive purpose. This is too much. Requiring defendants to prove the benefits of their conduct before plaintiffs show that conduct actually harms competition stands the procompetitive principles of the antitrust laws on their head. This burden-shifting standard presents a particularly acute risk of deterring innovative, proconsumer collaboration. Kolasky, supra note 163, at 43 ("The fundamental problem with the Department's stepwise approach is that it proposes in the case of certain horizontal agreements to dispense with a critical step of this analysis and to impose on the defendant the burden of proving 'with real world evidence - factual evidence, expert economic evidence, or preferably both -' that the restraint serves a procompetitive purpose, even in the absence of any showing that the restraint is likely to cause any substantial harm to competition.") (citations omitted).
224. Brief for the Federal Trade Commission in Opposition to Certiorari, CDA, Dkt. 97-1625, at 20. The SG's subsequent brief refrained from citing Klein.
225. 93 F.3d 1055 (2d Cir. 1996), vacated and remanded, 525 U.S. 128 (1998).
226. Brief for the United States and the FTC as Amici Curiae, NYNEX Corp. v. Discon, Inc., No. 96-1570 (1998) (opposing certiorari) 〈http://www.usdoj.gov/atr/cases/f1600/ 1612.htm>. The SG agreed that the Second Circuit was mistaken when it suggested that Klor's, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207 (1959), could make certain non-horizontal boycotts per se illegal, but he rationalized the Second Circuit's outcome as a proper application of a version of the rule of reason: [T]he approach suggested by the court of appeals here is consistent with that suggested by this Court's opinions in [Indiana Federation of Dentists and NCAA]. In those cases, the court indicated that, once the defendants' conduct has been shown to be anticompetitive based on its character or its effects, the conduct will be deemed to be unreasonable without any extensive market analysis, unless the defendants advance an adequate procompetitive justification. Brief at 16. The SG cited AAG Klein's "Stepwise" speech and added that the Division "uses such an approach to analyze certain types of horizontal restraints." Id. at 17. The SG's suggestion and AAG Klein's "Stepwise" approach were criticized as "turning the ordinary antitrust burden of proof upside down." Brief of Amicus Curiae GTE Corp. in Support of Petitioners, NYNEX Corp., No. 96-1570, at 13.
227. NYNEX Corp. v. Discon, Inc., 525 U.S. 128 (1998) (only horizontal group boycotts can be illegal per se). In his brief on the merits, the SG supported vacating the judgment and limiting Klor's to horizontal group boycotts. Brief for the United States and the FTC as Amici Curiae in Support of Vacating the Judgment, NYNEX Corp., No. 96-1570. The brief does not cite AAG Klein's writings.
228. See supra notes 15-16 and accompanying text.
229. Supra note 14. The finding of no market power was supported by what counsel characterized as the ALJ's finding of "no impact on competition." Commission Transcript, supra note 91, at 12.
230. The "three contentions" CDA's counsel sought to establish at oral argument are quoted supra text at note 94.
231. CDA Commission Brief, supra note 87, at 3, 5, 7, 8-10, 12, 13, 14-16, 18-25, 28-34.
232. Id. at i. Subheadings include "CDA's Activities Cannot Be 'Inherently Suspect' Because CDA Does Not Possess And Cannot Exercise Market Power," "The ALJ's Finding That CDA Lacks Market Power Refutes The Complaint's Anticompetitive Theory," "The ALJ's Citation of Mass. Board . . . Is Inapposite Because Market Power Was Present in Mass. Board," and ". . . The Commission Should State Explicitly That There Is a Market Power Screen."
233. Id. at 8-9 ("Based on the testimony of CDA's economic expert, Dr. Robert Knox, Judge Parker made the following findings of fact: •'[T]hat CDA's enforcement of its Code of Ethics with respect to advertising has no negative impact on competition. . . .") (emphasis added by CDA's counsel) (footnote appended to "Knox" notes that "The economic testimony of Dr. Knox is unrebutted."); 14-15 ("Judge Parker made the following findings of fact: •' [t]hat CDA's enforcement of its Code of Ethics with respect to advertising has no negative impact on competition . . . .") (emphasis added by CDA's counsel); 27; 33-34.
234. Id. at 5, 7, 10, 12 (twice), 19, 21, 24 n.6, 27, 28, 35 (three times); 53, 83.
235. CDA Commission Reply Brief, supra note 90, at i-ii.
236. Id. at 6: At trial, Complaint Counsel elected not to call an economist to offer expert testimony concerning whether and to what extent CDA possessed market power, entry barriers, or the effects, if any, of CDA's activities in a properly-defined market. Complaint Counsel could have called the economist they designated as their expert prior to trial, Dr. John E. Kwoka, if they believed his testimony would support their anticompetitive theory. Significantly, Complaint Counsel refused to present Dr. Kwoka for a deposition and withdrew Dr. Kwoka from their witness list at trial. That was Complaint Counsel's prerogative.
237. Id. at 15 (Finding 322), 26 (Findings 322 & 326).
238. Id. at 6, 19, 22, 28, 31. CDA's counsel justified its misquotation of Judge Parker's reporting of testimony (by the omitting of the words "Professor Knox testified") as follows (quoted in its entirety, with emphasis in the original): Realizing that Judge Parker's Findings of Fact with respect to the unrebutted economic evidence devastate their case, Complaint Counsel attempt to dismiss these findings as merely recounting the testimony of CDA's economic expert. (CAB at 64 n.50.) Apparently, Complaint Counsel take the disingenuous position that Judge Parker's Findings of Fact are irrelevant and superfluous padding mysteriously appended to the Initial Decision for no useful purpose. Of course, it would serve no purpose to recount the testimony of a particular witness in a Finding of Fact except to find that that testimony constituted a fact. Moreover, it is clear that Judge Parker did not merely restate testimony in his Findings Fact that he considered unsupported or irrelevant. Judge Parker's Findings of Fact with respect to the testimony of Dr. Knox are based on findings proposed by CDA. (Compare F. 322-327 with RPF 288-294, 297-298, 300-308.) As the Initial Decision explains on its first page: This decision is based on the transcript of the testimony, the exhibits which I have received in evidence, and the proposed findings of fact and conclusions of law and answers thereto filed by the parties. I have adopted several proposed findings verbatim. Others have been adopted in substance. All other findings are rejected either because they are not supported by the record or because they are irrelevant. (ID at 1) (emphasis supplied). When one compares Judge Parker's Findings of Fact with CDA's proposed findings it is clear that, with respect to the testimony of Dr. Knox, Judge Parker adopted certain of CDA's proposed findings verbatim, that he adopted the substance of others, and that he declined to adopt other findings or portions thereof. Id. at 31-32.
239. CDA's briefs first three headings said that (1) use of the per se rule was error, (2) "applying a 'quick-look' analysis" was error, and (3) CDA did not violate "the traditional rule of reason" because its activities "have no anticompetitive effect" and "there can be no antitrust violation in view of low entry barriers." CDA Ninth Circuit Brief, supra note 7.
240. Id. at 20. See also Reply Brief of Petitioner California Dental Ass'n in the United States Court of Appeals for the Ninth Circuit at 13 (No. 96-70409) [hereinafter CDA Ninth Circuit Reply Brief] ("Under the traditional rule of reason analysis, the FTC must define a relevant market, properly analyze entry conditions in the market, and establish an adverse effect on competition.").
241. CDA Ninth Circuit Brief, supra note 7, at 44.
242. Id. at 2, 6, 7-8, 10, 20, 24, 45, 50-54.
243. Id. at 20 (summary of argument); 48 ("Prior to trial, the FTC withdrew their only economist designated as a witness from their witness list and the FTC presented no economic testimony at trial."); CDA Ninth Circuit Reply Brief, supra note 218, at 5 n.2 ("the FTC failed to call any economist as a witness").
244. Altered findings 322 and 326 were featured as centered quotations once each, CDA Ninth Circuit Brief, supra note 7, at 6-7, and were quoted or paraphrased at least an additional nine times, id. at 2, 8, 18, 20, 37, 39, 46, 51 & 55. Finding 322 also was once featured as a centered quotation with the words "Professor Knox testified" retained. Id. at 47. In its Reply Brief, CDA again featured altered but otherwise full quotations, CDA Ninth Circuit Reply Brief, supra note 218, at 2-3, and quoted or paraphrased this language twice, id. at 14 & 23. As it had before the Commission, CDA defended its misquoting of the ALJ's reportorial findings concerning expert witness Knox by arguing that "[t]he ALJ clearly adopted that portion of Professor Knox's testimony contained in his findings." Id. at 19.
245. Id. at 8-13.
246. Id. at 13-17.
247. Id. at 18-21.
248. Id. at 21-22.
249. CDA Supreme Court Brief, supra note 104, at iii.
250. Id. at 32.
251. One or both of the Findings of Fact 322 and 326 were quoted in full (except for the mention that the thoughts were Professor Knox's) twice, id. at 7 & 27, and were quoted or paraphrased an additional eight times, see id. at 2 (the antitrust issue in the case is said to be whether "a prohibition against false and misleading advertising, which has been affirmatively found to have no impact on competition, [can] nonetheless violate the antitrust laws"), id. at 13, 15 (twice), 41-44.
252. Id. at 41.
253. CDA Supreme Court Reply Brief, supra note 64, at Heading II.B.
254. Justice Scalia was echoing a theme associated with, among others, Judge Easterbrook. See supra note 128.
255. See supra Part IV.C.1. 234 See supra Part III.B.
256. 119 S. Ct. at 1613 (citing Law v. NCAA and Chicago Professional Sports, which are discussed supra text at notes 170-76).
257. NCAA Amicus Brief, supra note 157, at 12.
258. 119 S. Ct. at 1617 (citation to NCAA omitted) (quoting PHILLIP E. AREEDA, ANTITRUST LAW § 1507, at 402 (1986)).
259. The one point on which the Court took a more economics-oriented approach concerned non-discount advertising. In response to the Ninth Circuit's suggestion that preventing the promoting of patient comfort may affect output because fewer consumers would obtain non-emergency care, the Court observed that "restricting such advertising would reduce the demand for dental services, not the supply; and it is of course the producers' supply of a good in relation to demand that is normally relevant in determining whether a producer-imposed output limitation has the anticompetitive effect of artificially raising prices." 119 S. Ct. at 1616.
260. Id. at 1612; see also id. at 1613 (same).
261. Id. at 1613 n.9; see also id. at 1615 (reference to possibility that any "costs to competition" from CDA's rules might be "outweighed by gains to consumer information (and hence competition)").
262. Id. at 1613 n.9 (citing, with a "cf.," FTC v. Algoma Lumber Co., 291 U.S. 67, 79-80 (1934)); cf. FTC v. Colgate-Palmolive Co., 380 U.S. 374, 380 (1965) (most recent case previously to cite Algoma Lumber).
263. In response to the Court's decision in FTC v. Raladam Co., 283 U.S. 643 (1931), that a deceptive practice was not illegal unless it had the requisite connection with competition, Congress overruled the case through the 1938 Wheeler-Lea Amendments, Act of March 21, 1938, ch. 49, § 3, 52 Stat. 111, which extended the FTC Act to cover "unfair or deceptive acts or practices."
264. 291 U.S. at 78.
265. Id.
266. 119 S. Ct. 493, 497 (1998) (Breyer, J.) (unanimous opinion that discusses without reservation the application of the per se rule in Fashion Originators' Guild of Am., Inc. v. FTC, 312 U.S. 457 (1941), and Klor's, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207 (1959) (which the Court read as a horizontal boycott case)).
267. See supra text accompanying note 158.
268. CDA Commission Brief, supra note 87, at ii-iii ("The ALJ's Application of Mass. Board is Erroneous;" "CDA's Activities Are Not 'Inherently Suspect.'").
269. See supra note 91.
270. 468 U.S. at 110.
271. Broadcast Music, Inc. v. CBS, 441 U.S. 1, 19-20 (1979).
272. 121 F.T.C. at 307-08 (quoting BMI, 441 U.S. at 19-20).
273. CDA Ninth Circuit Brief, supra note 7, at 44 (citation to American Ad Management omitted).
274. Vogel v. American Soc'y of Appraisers, 744 F.2d 598 (7th Cir. 1984); General Lease-ways, Inc. v. National Truck Leasing Ass'n, 744 F.2d 588 (7th Cir. 1984); see supra text at notes 167-69.
275. Lawv. NCAA, 134 F.3d 1010, 1019 (10th Cir. 1998) (discussed supra text accompanying notes 175-76).
276. The Supreme Court noted approvingly that Justice Breyer had written 14 pages compared with the Ninth Circuit's 8. 119 S. Ct. at 1617. This must have been an apples and oranges comparison, since the Ninth Circuit used 8 pages of F.3d, whereas Justice Breyer used only just over 6 pages of the Supreme Court Reporter (Justice Souter used 101/2). But Judge Parker, Chairman Pitofsky, and dissenting Commissioner Azcuenaga each wrote enough pages in the FTC Reports (79, 50, and 291/2, respectively) to win any quantity-based contest, even after one adjusts for the fewer words on a page of the FTC Reports.
277. In an introductory overview of antitrust analysis, the Commission observed that the rule of reason "enquiry need not be conducted in great depth and elaborate detail in every case, for sometimes a court may be able to determine the anticompetitive character of a restraint easily and quickly by what has come to be known as a 'quick look' review." 121 F.T.C. at 298 (citing Indiana Federation of Dentists and NCAA). To the same effect, the Commission added that the full-blown rule of reason review "can take place expeditiously under a 'quick look' approach." Id. at 299. And in its conclusion, the Commission observed that CDA's non-price restraints "are entitled to a quick look under an individualized examination of the competitive benefits and burdens they entail." Id. at 333.
278. Immediately before it began its detailed scrutiny of the conduct at issue and its context, the Commission explained what it would be doing: The Supreme Court has made clear that the rule of reason contemplates a flexible inquiry, examining a challenged restraint in the detail necessary to understand its competitive effect. As will be seen, here, application of the rule of reason is simple and short. The anticompetitive effects of CDA's advertising restrictions are sufficiently clear, and the claimed efficiencies sufficiently tenuous, that a detailed analysis of market power is unnecessary to reaching a sound conclusion, and, in any event, CDA clearly had sufficient power to inflict competitive harm. 121 F.T.C. at 308 (citation to NCAA omitted). Although the alliterative "simple and short" may suggest inaccurately that the Commission did not devote substantial time and thought to the matter, the discussion of market power makes clear that the Commission was really just explaining why it found unavailing CDA's claim that the Commission shouldn't proceed without requiring Complaint Counsel to retain a testifying economist who could help define scores of localized geographic markets.
279. Id. at 308.
280. 128 F.3d at 727 (citation omitted): In this case, the FTC applied an abbreviated, or "quick look," rule of reason analysis designed for restraints that are not per se unlawful but are sufficiently anticompetitive on their face that they do not require a full-blown rule of reason inquiry. See NCAA ("The essential point is that the rule of reason can sometimes be applied in the twinkling of an eye."). It allows the condemnation of a "naked restraint" on price or output without an "elaborate industry analysis."
281. Id. at 729-30 ("Although the Commission did not engage in a detailed analysis of market power, . . . we conclude that they [its conclusions] suffice under the quick look rule of reason in light of the nature of the restraints involved. . . . Given the facially anticompetitive nature of both the price and nonprice advertising restrictions, the evidence of the CDA's large market share and influence justifies finding a violation under the quick look rule of reason.").
282. Id. at 728.
283. 119 S. Ct. at 1614.
284. Id. at 1617.
285. Id.
286. Id. at 1618.
287. 435 U.S. at 693.
288. 441 U.S. at 19-20. The Commission wrote, about non-price restraints, that it "cannot say with equal confidence that, as a facial matter, CDA's concerns are unrelated to the public service aspect of its profession, or that 'the practice facially appears . . . .'" 121 F.T.C. at 307.
289. 128 F.3d at 727 (citing NCAA).
290. Cf. BRYAN A. GARNER, A DICTIONARY OF MODERN LEGAL USAGE 236 (1987) ("Face," in "on its face," "refers to the inscribed side of a document. It means 'in the words of, in the plain sense of' . . . . The phrase is sometimes used figuratively of things other than documents. E.g., 'A libel is harmful on its face.'"). That antitrust "facial unreasonableness" does not really refer to the words of a document was understood by Professor Areeda: The inelegant phrase, reminiscent of facially unconstitutional statutes, may seem to focus attention on the words on the face of an agreement. Rather, [United States v. Realty Multi-List, 629 F.2d 1351 (5th Cir. 1980)] meant that judgments can sometimes be made on the basis of the parties' arguments in the light of what the judges know about the economy and in the light of such modes information as may be available at the beginning of the lawsuit. 7 AREEDA, supra note 173, at 405.
291. Cf. BRYAN A. GARNER, A DICTIONARY OF MODERN LEGAL USAGE 236 (1987) ("Face," in "on its face," "refers to the inscribed side of a document. It means 'in the words of, in the plain sense of' . . . . The phrase is sometimes used figuratively of things other than documents. E.g., 'A libel is harmful on its face.'"). That antitrust "facial unreasonableness" does not really refer to the words of a document was understood by Professor Areeda: The inelegant phrase, reminiscent of facially unconstitutional statutes, may seem to focus attention on the words on the face of an agreement. Rather, [United States v. Realty Multi-List, 629 F.2d 1351 (5th Cir. 1980)] meant that judgments can sometimes be made on the basis of the parties' arguments in the light of what the judges know about the economy and in the light of such modes information as may be available at the beginning of the lawsuit. 7 AREEDA, supra note 173, at 405.
292. 128 F.3d at 729.
293. Id. at 729 (footnote omitted).
294. 121 F.T.C. at 301 ("Although this may sound like an innocuous regulation that does no more than enhance the truthfulness of the information conveyed, in its enforcement CDA effectively precluded advertising that characterized a dentist's fees as being low, reasonable, or affordable, as well as advertising of across-the-board discounts."); cf. id. at 340, 342, 347, 352 (Azcuenaga, Comm'r, dissenting) (CDA's code is unobjectionable "on its face").
295. 128 F. 3d at 727.
296. CDA Supreme Court Brief, supra note 104, at 33.
297. Id. at 32 (quoting from three opinions that discuss limiting the "quick look" but that do not refer to examining restraints "on their face").
298. Id. at 45.
299. 119 S. Ct. at 1613.
300. See supra Part IV.C.1 (c).
301. NCAA Amicus Brief, supra note 157, at 16.
302. WEBSTER'S NEW WORLD DICTIONARY 1091 (2d College Ed. 1982).
303. THE AMERICAN HERITAGE COLLEGE DICTIONARY (3d ed. 1993).
304. See supra notes 192-94.
305. 119 S. Ct. at 1615 n.12.
306. See supra Part IV.C.2.
307. See supra Part IV.A.3.
308. Supra text at note 157.
309. Amicus Brief at 10; see also id. at 12-13 ("Where the practice at issue is shown to pose high anticompetitive risks because, on its face, it restricts output or restrains price competition, a court can and should address the above efficiency questions without conducting a 'full' rule of reason analysis of market definition and market power. If at any point it becomes clear that the collaborators have no viable, significant efficiency justification, a facially suspect restraint can be condemned without further inquiry.") (citation omitted).
310. NCAA Amicus Brief, supra note 157, at 16.
311. 7 AREEDA, supra note 173, at 429.
312. It has been suggested that the antitrust rule of reason should mimic employment discrimination cases involving employee discharges: after the plaintiff establishes a prima facie case of discrimination, an employer must articulate a "legitimate, nondiscriminatory reason for its actions." This articulation shifts the burden back to the plaintiff to show that the articulated reasons are mere pretext. Howard H. Chang et al., Some Economic Principles for Guiding Antitrust Policy Towards Joint Ventures, 1998 COLUM. BUS. L. REV. 223, 280 & n.116 (citing BARBARA L. SCHLEI & PAUL GROSSMAN, EMPLOYMENT DISCRIMINATION LAW 597-603 (2d ed. 1983)), summarized and relied upon, NCAA Amicus Brief, supra note 157, at 16 n.6. The comparison to employment discrimination law actually serves to caution against giving undue weight to a merely plausible antitrust justification. In employee discharge discrimination cases, the plaintiff's initial burden is "not onerous." Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 253 (1981). The plaintiff simply shows that he or she is in a protected class, was discharged from a job for which he or she was qualified, and was replaced by a person outside the protected group. 1 BARBARA LINDEMANN & PAUL GROSSMAN, EMPLOYMENT DISCRIMINATION LAW 847 (3d ed. 1996). The defendant's burden is even lighter. Indeed, "an employer can almost always articulate a valid, objective reason for the discharge." SCHLEI & GROSSMAN, 2D ED., supra, at 597; see also SCHLEI & GROSSMAN, 3D ED., supra, at 853 ("Employers normally have little difficulty articulating a legitimate, nondiscriminatory reason . . . ."). This initial skirmishing merely sets the stage for what disparate treatment employment discrimination is all about: disputing whether those articulated reasons are a pretext concealing discrimination. Id. at 853-57. A different structure is used for disparate impact employment discrimination litigation. Here the plaintiff has the serious initial burden of showing that an employment policy or practice has a significantly disproportionate adverse impact on a protected class. Id. at 89. The defendant then has correspondingly serious burdens of production and persuasion to show that the policy or practice is justified as '"job-related for the position in question and consistent with business necessity.'" Id. at 87, 106-110 (quoting statute). Here, mere plausibility will not do; this is not just stage setting. The essence of disparate impact employment discrimination litigation is this dispute between proof of effect and proof of justification. See generally Kingsley R. Browne, The Civil Rights Act of 1991: A "Quota Bill," a Codification of Griggs, a Partial Return to Wards Cove, or All of the Above?, 43 CASE W. RES. L. REV. 287 (1993). (Even if a defendant satisfies those burdens, a disparate-impact plaintiff may still prevail by proving the existence of a satisfactory alternative policy or practice without a discriminatory impact that the employer refuses to adopt. SCHLEI & GROSSMAN, 3D ED. at 111-13.) If employment discrimination litigation should provide a model for antitrust, one has to choose which model. The plaintiff and defendant each could have light initial burdens, which would leave the heavy lifting for a later stage. Alternatively, the plaintiff and defendant each could be held to a more demanding standard. But one cannot reasonably demand a substantial showing from the plaintiff, something trivial from the defendant, and then something overwhelming from the plaintiff.
313. It has been suggested that the antitrust rule of reason should mimic employment discrimination cases involving employee discharges: after the plaintiff establishes a prima facie case of discrimination, an employer must articulate a "legitimate, nondiscriminatory reason for its actions." This articulation shifts the burden back to the plaintiff to show that the articulated reasons are mere pretext. Howard H. Chang et al., Some Economic
314. It has been suggested that the antitrust rule of reason should mimic employment discrimination cases involving employee discharges: after the plaintiff establishes a prima facie case of discrimination, an employer must articulate a "legitimate, nondiscriminatory reason for its actions." This articulation shifts the burden back to the plaintiff to show that the articulated reasons are mere pretext. Howard H. Chang et al., Some Economic Principles for Guiding Antitrust Policy Towards Joint Ventures, 1998 COLUM. BUS. L. REV. 223, 280 & n.116 (citing BARBARA L. SCHLEI & PAUL GROSSMAN, EMPLOYMENT DISCRIMINATION LAW 597-603 (2d ed. 1983)), summarized and relied upon, NCAA Amicus Brief, supra note 157, at 16 n.6. The comparison to employment discrimination law actually serves to caution against giving undue weight to a merely plausible antitrust justification. In employee discharge discrimination cases, the plaintiff's initial burden is "not onerous." Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 253 (1981). The plaintiff simply shows that he or she is in a protected class, was discharged from a job for which he or she was qualified, and was replaced by a person outside the protected group. 1 BARBARA LINDEMANN & PAUL GROSSMAN, EMPLOYMENT DISCRIMINATION LAW 847 (3d ed. 1996). The defendant's burden is even lighter. Indeed, "an employer can almost always articulate a valid, objective reason for the discharge." SCHLEI & GROSSMAN, 2D ED., supra, at 597; see also SCHLEI & GROSSMAN, 3D ED., supra, at 853 ("Employers normally have little difficulty articulating a legitimate, nondiscriminatory reason . . . ."). This initial skirmishing merely sets the stage for what disparate treatment employment discrimination is all about: disputing whether those articulated reasons are a pretext concealing discrimination. Id. at 853-57. A different structure is used for disparate impact employment discrimination litigation. Here the plaintiff has the serious initial burden of showing that an employment policy or practice has a significantly disproportionate adverse impact on a protected class. Id. at 89. The defendant then has correspondingly serious burdens of production and persuasion to show that the policy or practice is justified as '"job-related for the position in question and consistent with business necessity.'" Id. at 87, 106-110 (quoting statute). Here, mere plausibility will not do; this is not just stage setting. The essence of disparate impact employment discrimination litigation is this dispute between proof of effect and proof of justification. See generally Kingsley R. Browne, The Civil Rights Act of 1991: A "Quota Bill," a Codification of Griggs, a Partial Return to Wards Cove, or All of the Above?, 43 CASE W. RES. L. REV. 287 (1993). (Even if a defendant satisfies those burdens, a disparate-impact plaintiff may still prevail by proving the existence of a satisfactory alternative policy or practice without a discriminatory impact that the employer refuses to adopt. SCHLEI & GROSSMAN, 3D ED. at 111-13.) If employment discrimination litigation should provide a model for antitrust, one has to choose which model. The plaintiff and defendant each could have light initial burdens, which would leave the heavy lifting for a later stage. Alternatively, the plaintiff and defendant each could be held to a more demanding standard. But one cannot reasonably demand a substantial showing from the plaintiff, something trivial from the defendant, and then something overwhelming from the plaintiff.
315. It has been suggested that the antitrust rule of reason should mimic employment discrimination cases involving employee discharges: after the plaintiff establishes a prima facie case of discrimination, an employer must articulate a "legitimate, nondiscriminatory reason for its actions." This articulation shifts the burden back to the plaintiff to show that the articulated reasons are mere pretext. Howard H. Chang et al., Some Economic Principles for Guiding Antitrust Policy Towards Joint Ventures, 1998 COLUM. BUS. L. REV. 223, 280 & n.116 (citing BARBARA L. SCHLEI & PAUL GROSSMAN, EMPLOYMENT DISCRIMINATION LAW 597-603 (2d ed. 1983)), summarized and relied upon, NCAA Amicus Brief, supra note 157, at 16 n.6. The comparison to employment discrimination law actually serves to caution against giving undue weight to a merely plausible antitrust justification. In employee discharge discrimination cases, the plaintiff's initial burden is "not onerous." Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 253 (1981). The plaintiff simply shows that he or she is in a protected class, was discharged from a job for which he or she was qualified, and was replaced by a person outside the protected group. 1 BARBARA LINDEMANN & PAUL GROSSMAN, EMPLOYMENT DISCRIMINATION LAW 847 (3d ed. 1996). The defendant's burden is even lighter. Indeed, "an employer can almost always articulate a valid, objective reason for the discharge." SCHLEI & GROSSMAN, 2D ED., supra, at 597; see also SCHLEI & GROSSMAN, 3D ED., supra, at 853 ("Employers normally have little difficulty articulating a legitimate, nondiscriminatory reason . . . ."). This initial skirmishing merely sets the stage for what disparate treatment employment discrimination is all about: disputing whether those articulated reasons are a pretext concealing discrimination. Id. at 853-57. A different structure is used for disparate impact employment discrimination litigation. Here the plaintiff has the serious initial burden of showing that an employment policy or practice has a significantly disproportionate adverse impact on a protected class. Id. at 89. The defendant then has correspondingly serious burdens of production and persuasion to show that the policy or practice is justified as '"job-related for the position in question and consistent with business necessity.'" Id. at 87, 106-110 (quoting statute). Here, mere plausibility will not do; this is not just stage setting. The essence of disparate impact employment discrimination litigation is this dispute between proof of effect and proof of justification. See generally Kingsley R. Browne, The Civil Rights Act of 1991: A "Quota Bill," a Codification of Griggs, a Partial Return to Wards Cove, or All of the Above?, 43 CASE W. RES. L. REV. 287 (1993). (Even if a defendant satisfies those burdens, a disparate-impact plaintiff may still prevail by proving the existence of a satisfactory alternative policy or practice without a discriminatory impact that the employer refuses to adopt. SCHLEI & GROSSMAN, 3D ED. at 111-13.) If employment discrimination litigation should provide a model for antitrust, one has to choose which model. The plaintiff and defendant each could have light initial burdens, which would leave the heavy lifting for a later stage. Alternatively, the plaintiff and defendant each could be held to a more demanding standard. But one cannot reasonably demand a substantial showing from the plaintiff, something trivial from the defendant, and then something overwhelming from the plaintiff.
316. It has been suggested that the antitrust rule of reason should mimic employment discrimination cases involving employee discharges: after the plaintiff establishes a prima facie case of discrimination, an employer must articulate a "legitimate, nondiscriminatory reason for its actions." This articulation shifts the burden back to the plaintiff to show that the articulated reasons are mere pretext. Howard H. Chang et al., Some Economic Principles for Guiding Antitrust Policy Towards Joint Ventures, 1998 COLUM. BUS. L. REV. 223, 280 & n.116 (citing BARBARA L. SCHLEI & PAUL GROSSMAN, EMPLOYMENT DISCRIMINATION LAW 597-603 (2d ed. 1983)), summarized and relied upon, NCAA Amicus Brief, supra note 157, at 16 n.6. The comparison to employment discrimination law actually serves to caution against giving undue weight to a merely plausible antitrust justification. In employee discharge discrimination cases, the plaintiff's initial burden is "not onerous." Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 253 (1981). The plaintiff simply shows that he or she is in a protected class, was discharged from a job for which he or she was qualified, and was replaced by a person outside the protected group. 1 BARBARA LINDEMANN & PAUL GROSSMAN, EMPLOYMENT DISCRIMINATION LAW 847 (3d ed. 1996). The defendant's burden is even lighter. Indeed, "an employer can almost always articulate a valid, objective reason for the discharge." SCHLEI & GROSSMAN, 2D ED., supra, at 597; see also SCHLEI & GROSSMAN, 3D ED., supra, at 853 ("Employers normally have little difficulty articulating a legitimate, nondiscriminatory reason . . . ."). This initial skirmishing merely sets the stage for what disparate treatment employment discrimination is all about: disputing whether those articulated reasons are a pretext concealing discrimination. Id. at 853-57. A different structure is used for disparate impact employment discrimination litigation. Here the plaintiff has the serious initial burden of showing that an employment policy or practice has a significantly disproportionate adverse impact on a protected class. Id. at 89. The defendant then has correspondingly serious burdens of production and persuasion to show that the policy or practice is justified as '"job-related for the position in question and consistent with business necessity.'" Id. at 87, 106-110 (quoting statute). Here, mere plausibility will not do; this is not just stage setting. The essence of disparate impact employment discrimination litigation is this dispute between proof of effect and proof of justification. See generally Kingsley R. Browne, The Civil Rights Act of 1991: A "Quota Bill," a Codification of Griggs, a Partial Return to Wards Cove, or All of the Above?, 43 CASE W. RES. L. REV. 287 (1993). (Even if a defendant satisfies those burdens, a disparate-impact plaintiff may still prevail by proving the existence of a satisfactory alternative policy or practice without a discriminatory impact that the employer refuses to adopt. SCHLEI & GROSSMAN, 3D ED. at 111-13.) If employment discrimination litigation should provide a model for antitrust, one has to choose which model. The plaintiff and defendant each could have light initial burdens, which would leave the heavy lifting for a later stage. Alternatively, the plaintiff and defendant each could be held to a more demanding standard. But one cannot reasonably demand a substantial showing from the plaintiff, something trivial from the defendant, and then something overwhelming from the plaintiff.
317. It has been suggested that the antitrust rule of reason should mimic employment discrimination cases involving employee discharges: after the plaintiff establishes a prima facie case of discrimination, an employer must articulate a "legitimate, nondiscriminatory reason for its actions." This articulation shifts the burden back to the plaintiff to show that the articulated reasons are mere pretext. Howard H. Chang et al., Some Economic Principles for Guiding Antitrust Policy Towards Joint Ventures, 1998 COLUM. BUS. L. REV. 223, 280 & n.116 (citing BARBARA L. SCHLEI & PAUL GROSSMAN, EMPLOYMENT DISCRIMINATION LAW 597-603 (2d ed. 1983)), summarized and relied upon, NCAA Amicus Brief, supra note 157, at 16 n.6. The comparison to employment discrimination law actually serves to caution against giving undue weight to a merely plausible antitrust justification. In employee discharge discrimination cases, the plaintiff's initial burden is "not onerous." Texas Dep't of Community Affairs v. Burdine, 450 U.S. 248, 253 (1981). The plaintiff simply shows that he or she is in a protected class, was discharged from a job for which he or she was qualified, and was replaced by a person outside the protected group. 1 BARBARA LINDEMANN & PAUL GROSSMAN, EMPLOYMENT DISCRIMINATION LAW 847 (3d ed. 1996). The defendant's burden is even lighter. Indeed, "an employer can almost always articulate a valid, objective reason for the discharge." SCHLEI & GROSSMAN, 2D ED., supra, at 597; see also SCHLEI & GROSSMAN, 3D ED., supra, at 853 ("Employers normally have little difficulty articulating a legitimate, nondiscriminatory reason . . . ."). This initial skirmishing merely sets the stage for what disparate treatment employment discrimination is all about: disputing whether those articulated reasons are a pretext concealing discrimination. Id. at 853-57. A different structure is used for disparate impact employment discrimination litigation. Here the plaintiff has the serious initial burden of showing that an employment policy or practice has a significantly disproportionate adverse impact on a protected class. Id. at 89. The defendant then has correspondingly serious burdens of production and persuasion to show that the policy or practice is justified as '"job-related for the position in question and consistent with business necessity.'" Id. at 87, 106-110 (quoting statute). Here, mere plausibility will not do; this is not just stage setting. The essence of disparate impact employment discrimination litigation is this dispute between proof of effect and proof of justification. See generally Kingsley R. Browne, The Civil Rights Act of 1991: A "Quota Bill," a Codification of Griggs, a Partial Return to Wards Cove, or All of the Above?, 43 CASE W. RES. L. REV. 287 (1993). (Even if a defendant satisfies those burdens, a disparate-impact plaintiff may still prevail by proving the existence of a satisfactory alternative policy or practice without a discriminatory impact that the employer refuses to adopt. SCHLEI & GROSSMAN, 3D ED. at 111-13.) If employment discrimination litigation should provide a model for antitrust, one has to choose which model. The plaintiff and defendant each could have light initial burdens, which would leave the heavy lifting for a later stage. Alternatively, the plaintiff and defendant each could be held to a more demanding standard. But one cannot reasonably demand a substantial showing from the plaintiff, something trivial from the defendant, and then something overwhelming from the plaintiff.
318. See supra Part III.
319. In the Court's defense, the Solicitor General (with the FTC) should have pointed out the novelty of the justifications on which CDA was relying. For some reason (one can speculate about the inevitable challenges when an agency and the SG's office jointly prepare a brief), the SG did not adequately make this point. With respect to quality claims, he merely pointed to a First Amendment case's teaching about the importance of making government regulators distinguish the truthful from the false, and said that this "admonition is even more apt in the context of industry self-regulation." SG Brief, supra note 64, at 42 (citing Shapero v. Kentucky Bar Ass'n, 486 U.S. 466, 478 (1988)). With respect to the "net increased advertising of discounts" argument, the SG wrote as follows: Petitioner nonetheless speculates (Br. 36) that its member dentists, even if effectively (and reasonably) precluded from advertising across-the-board discounts by its restrictions, should be able to comply with a requirement that advertised discounts on individual services be accompanied by a litany of disclosures. The Commission, however, exercising its expertise in the effects of advertising claims, found that "the truthful offer of a discount from the price ordinarily charged by a dentist for services is not deceptive." Pet. App. 85a. It also noted that petitioner's restrictions went far beyond any restriction that would be necessary to prevent dentists from engaging in "chicanery" such as selectively inflating the price from which the discount is computed. Ibid. Id. at n.28. Ironically, CDA complained about the Commission's failure to claim Chevron deference to its assertion of jurisdiction until its Supreme Court merits brief, and wrote that the Court was "entitled to ignore the Commission's belated embrace of this argument." CDA Supreme Court Reply Brief, supra note 64, at 9. CDA cited Schiro v. Farley, 510 U.S. 222, 228-29 (1994), where the Court observed that it "ordinarily do[es] not review claims made for the first time in this Court." Indeed, the same month that the Court issued its CDA opinion it declined to address an argument raised for the first time in an opposition to certiorari. I.N.S. v. Aguirre-Aguirre, 119 S. Ct. 1439, 1449 (1999) (contention that there were errors in translation).
320. Another source of caution is the confidence with which advocates in CDA pointed to NCAA and IFD as, for instance, "prime examples of the type of conduct that qualifies for 'quick look' review." NCAA Amicus Brief, supra note 157, at 8. The NCAA now states that in the NCAA case, "colleges pooled their sales of televised football games in a way that inevitably restricted output, and, by setting a single price scale for that restricted output, effectively fixed prices as well." Id. at 9. When the NCAA case was before the Court, however, that distinguished institution retained eminent counsel (Frank H. Easterbrook) who argued that the challenged restraints must be judged under the full-blown rule of reason because they improved quality and increased competition. Brief for the Petitioner, NCAA. Had mere "plausibility" been the test, NCAA never would have passed. Similarly, the American Dental Association argued in a CDA amicus brief that "[u]nlike the rules at issue in those cases [NCAA and IFD], the ethical canons of the CDA are supported by strong procompetitive justifications." ADA Amicus Brief, supra note 195, at 19 n.9. When IFD was before the Court, however, that distinguished association argued that the Seventh Circuit had correctly upheld the challenged rules under the full-blown rule of reason. Brief Amicus Curiae of the American Dental Ass'n in Support of Respondent Indiana Federation of Dentists. The point is not that there is anything improper about an entity finding itself on the losing case and then attempting, in future litigation, to distinguish that case. The changing perspectives serve only as a reminder of how easily a "plausibility" test could be passed.
321. Motion of California Dental Association for A Briefing Schedule and for Oral Argument, No. 96-70409 (filed Oct. 22, 1999).
322. 119 S. Ct. at 1618.
323. Id. at 1617.
324. E.g., CDA Supreme Court Brief, supra note 104, at 42-44; CDA Supreme Court Reply Brief, supra note 64, at 14.
325. 128 F.3d at 726, 728.
326. SG Brief, supra note 64, at 29-30.
327. 119 S. Ct. at 1612.
328. See supra note 41.
329. See, e.g., Fall River Dyeing & Finishing Corp., 482 U.S. 27, 42 (1987); FCC v. Allentown Broadcasting Corp., 349 U.S. 358, 364 (1955); Universal Camera Corp. v. NLRB, 340 U.S. 474, 493 (1951); Corn Prods. Ref. Co. v. FTC, 324 U.S. 726, 739 (1945) ("The weight to be attributed to the facts proven or stipulated, and the inferences to be drawn from them, are for the Commission to determine, not the courts." (citations omitted)); FTC v. A.E. Staley Mfg. Co., 324 U.S. 746, 758 (1945); Hospital Corp. of Am. v. FTC, 807 F.2d 1381, 1385-86 (7th Cir. 1986).
330. Peter L. Strauss, One Hundred Fifty Cases Per Year: Some Implications of the Supreme Court's Limited Resources for Judicial Review of Agency Action, 87 COLUM. L. REV. 1093, 1118-22 (1987).
331. Many commentators have advocated sliding scales of one form or another. See, e.g., supra note 200; 7 PHILLIP E. AREEDA, ANTITRUST LAW ch. 15 (1986 & Supp. (with Herbert Hovenkamp)); Stephen Calkins, The October 1989 Supreme Court Term and Antitrust: Power, Access, and Legitimacy, 59 ANTITRUST L.J. 339, 348-50 (1991); Thomas G. Krattenmaker, Per Se Violations in Antitrust Law: Confusing Offenses with Defenses, 77 GEO. L.J. 165 (1988); cf. Thomas E. Kauper, The Sullivan Approach to Horizontal Restraints, 75 CALIF. L. REV. 893, 905-08 & nn.70-71 (1987) (merit in a market power but not a market share screen; market power should be inferable from conduct). Two of the more recent helpful contributions to thinking about these issues are C. Frederick Beckner III & Steven C. Salop, Decision Theory and Antitrust Rules, 67 ANTITRUST L.J. 41 (1999), and Robert H. Lande & Howard P. Marvel, Manipulating the Rules of Competition: A Third General Category of Collusion (unpublished manuscript on file with author). Subsequent to the drafting of this article, the FTC and the Antitrust Division issued for comment Draft Antitrust Guidelines for Collaborations Among Competitors (Oct. 1, 1999) 〈http://www.ftc.gov/os/1999/9910/jointventureguidelines.htm〉. Those draft Guidelines retain a prominent role for the per se rule and a version of the rule of reason that can be applied "without a detailed market analysis." Id. § 3.2-3. The draft has attracted considerable attention and engendered some controversy. The antitrust agencies will have to review with care the comments they receive as they consider whether the lines they are drawing are sufficiently clear and helpful.
332. Many commentators have advocated sliding scales of one form or another. See, e.g., supra note 200; 7 PHILLIP E. AREEDA, ANTITRUST LAW ch. 15 (1986 & Supp. (with Herbert Hovenkamp)); Stephen Calkins, The October 1989 Supreme Court Term and Antitrust: Power, Access, and Legitimacy, 59 ANTITRUST L.J. 339, 348-50 (1991); Thomas G. Krattenmaker, Per Se Violations in Antitrust Law: Confusing Offenses with Defenses, 77 GEO. L.J. 165 (1988); cf. Thomas E. Kauper, The Sullivan Approach to Horizontal Restraints, 75 CALIF. L. REV. 893, 905-08 & nn.70-71 (1987) (merit in a market power but not a market share screen; market power should be inferable from conduct). Two of the more recent helpful contributions to thinking about these issues are C. Frederick Beckner III & Steven C. Salop, Decision Theory and Antitrust Rules, 67 ANTITRUST L.J. 41 (1999), and Robert H. Lande & Howard P. Marvel, Manipulating the Rules of Competition: A Third General Category of Collusion (unpublished manuscript on file with author). Subsequent to the drafting of this article, the FTC and the Antitrust Division issued for comment Draft Antitrust Guidelines for Collaborations Among Competitors (Oct. 1, 1999) 〈http://www.ftc.gov/os/1999/9910/jointventureguidelines.htm〉. Those draft Guidelines retain a prominent role for the per se rule and a version of the rule of reason that can be applied "without a detailed market analysis." Id. § 3.2-3. The draft has attracted considerable attention and engendered some controversy. The antitrust agencies will have to review with care the comments they receive as they consider whether the lines they are drawing are sufficiently clear and helpful.
333. Many commentators have advocated sliding scales of one form or another. See, e.g., supra note 200; 7 PHILLIP E. AREEDA, ANTITRUST LAW ch. 15 (1986 & Supp. (with Herbert Hovenkamp)); Stephen Calkins, The October 1989 Supreme Court Term and Antitrust: Power, Access, and Legitimacy, 59 ANTITRUST L.J. 339, 348-50 (1991); Thomas G. Krattenmaker, Per Se Violations in Antitrust Law: Confusing Offenses with Defenses, 77 GEO. L.J. 165 (1988); cf. Thomas E. Kauper, The Sullivan Approach to Horizontal Restraints, 75 CALIF. L. REV. 893, 905-08 & nn.70-71 (1987) (merit in a market power but not a market share screen; market power should be inferable from conduct). Two of the more recent helpful contributions to thinking about these issues are C. Frederick Beckner III & Steven C. Salop, Decision Theory and Antitrust Rules, 67 ANTITRUST L.J. 41 (1999), and Robert H. Lande & Howard P. Marvel, Manipulating the Rules of Competition: A Third General Category of Collusion (unpublished manuscript on file with author). Subsequent to the drafting of this article, the FTC and the Antitrust Division issued for comment Draft Antitrust Guidelines for Collaborations Among Competitors (Oct. 1, 1999) 〈http://www.ftc.gov/os/1999/9910/jointventureguidelines.htm〉. Those draft Guidelines retain a prominent role for the per se rule and a version of the rule of reason that can be applied "without a detailed market analysis." Id. § 3.2-3. The draft has attracted considerable attention and engendered some controversy. The antitrust agencies will have to review with care the comments they receive as they consider whether the lines they are drawing are sufficiently clear and helpful.
334. Many commentators have advocated sliding scales of one form or another. See, e.g., supra note 200; 7 PHILLIP E. AREEDA, ANTITRUST LAW ch. 15 (1986 & Supp. (with Herbert Hovenkamp)); Stephen Calkins, The October 1989 Supreme Court Term and Antitrust: Power, Access, and Legitimacy, 59 ANTITRUST L.J. 339, 348-50 (1991); Thomas G. Krattenmaker, Per Se Violations in Antitrust Law: Confusing Offenses with Defenses, 77 GEO. L.J. 165 (1988); cf. Thomas E. Kauper, The Sullivan Approach to Horizontal Restraints, 75 CALIF. L. REV. 893, 905-08 & nn.70-71 (1987) (merit in a market power but not a market share screen; market power should be inferable from conduct). Two of the more recent helpful contributions to thinking about these issues are C. Frederick Beckner III & Steven C. Salop, Decision Theory and Antitrust Rules, 67 ANTITRUST L.J. 41 (1999), and Robert H. Lande & Howard P. Marvel, Manipulating the Rules of Competition: A Third General Category of Collusion (unpublished manuscript on file with author). Subsequent to the drafting of this article, the FTC and the Antitrust Division issued for comment Draft Antitrust Guidelines for Collaborations Among Competitors (Oct. 1, 1999) 〈http://www.ftc.gov/os/1999/9910/jointventureguidelines.htm〉. Those draft Guidelines retain a prominent role for the per se rule and a version of the rule of reason that can be applied "without a detailed market analysis." Id. § 3.2-3. The draft has attracted considerable attention and engendered some controversy. The antitrust agencies will have to review with care the comments they receive as they consider whether the lines they are drawing are sufficiently clear and helpful.
335. Many commentators have advocated sliding scales of one form or another. See, e.g., supra note 200; 7 PHILLIP E. AREEDA, ANTITRUST LAW ch. 15 (1986 & Supp. (with Herbert Hovenkamp)); Stephen Calkins, The October 1989 Supreme Court Term and Antitrust: Power, Access, and Legitimacy, 59 ANTITRUST L.J. 339, 348-50 (1991); Thomas G. Krattenmaker, Per Se Violations in Antitrust Law: Confusing Offenses with Defenses, 77 GEO. L.J. 165 (1988); cf. Thomas E. Kauper, The Sullivan Approach to Horizontal Restraints, 75 CALIF. L. REV. 893, 905-08 & nn.70-71 (1987) (merit in a market power but not a market share screen; market power should be inferable from conduct). Two of the more recent helpful contributions to thinking about these issues are C. Frederick Beckner III & Steven C. Salop, Decision Theory and Antitrust Rules, 67 ANTITRUST L.J. 41 (1999), and Robert H. Lande & Howard P. Marvel, Manipulating the Rules of Competition: A Third General Category of Collusion (unpublished manuscript on file with author). Subsequent to the drafting of this article, the FTC and the Antitrust Division issued for comment Draft Antitrust Guidelines for Collaborations Among Competitors (Oct. 1, 1999) 〈http://www.ftc.gov/os/1999/9910/jointventureguidelines.htm〉. Those draft Guidelines retain a prominent role for the per se rule and a version of the rule of reason that can be applied "without a detailed market analysis." Id. § 3.2-3. The draft has attracted considerable attention and engendered some controversy. The antitrust agencies will have to review with care the comments they receive as they consider whether the lines they are drawing are sufficiently clear and helpful.
336. Many commentators have advocated sliding scales of one form or another. See, e.g., supra note 200; 7 PHILLIP E. AREEDA, ANTITRUST LAW ch. 15 (1986 & Supp. (with Herbert Hovenkamp)); Stephen Calkins, The October 1989 Supreme Court Term and Antitrust: Power, Access, and Legitimacy, 59 ANTITRUST L.J. 339, 348-50 (1991); Thomas G. Krattenmaker, Per Se Violations in Antitrust Law: Confusing Offenses with Defenses, 77 GEO. L.J. 165 (1988); cf. Thomas E. Kauper, The Sullivan Approach to Horizontal Restraints, 75 CALIF. L. REV. 893, 905-08 & nn.70-71 (1987) (merit in a market power but not a market share screen; market power should be inferable from conduct). Two of the more recent helpful contributions to thinking about these issues are C. Frederick Beckner III & Steven C. Salop, Decision Theory and Antitrust Rules, 67 ANTITRUST L.J. 41 (1999), and Robert H. Lande & Howard P. Marvel, Manipulating the Rules of Competition: A Third General Category of Collusion (unpublished manuscript on file with author). Subsequent to the drafting of this article, the FTC and the Antitrust Division issued for comment Draft Antitrust Guidelines for Collaborations Among Competitors (Oct. 1, 1999) 〈http://www.ftc.gov/os/1999/9910/jointventureguidelines.htm〉. Those draft Guidelines retain a prominent role for the per se rule and a version of the rule of reason that can be applied "without a detailed market analysis." Id. § 3.2-3. The draft has attracted considerable attention and engendered some controversy. The antitrust agencies will have to review with care the comments they receive as they consider whether the lines they are drawing are sufficiently clear and helpful.
337. Many commentators have advocated sliding scales of one form or another. See, e.g., supra note 200; 7 PHILLIP E. AREEDA, ANTITRUST LAW ch. 15 (1986 & Supp. (with Herbert Hovenkamp)); Stephen Calkins, The October 1989 Supreme Court Term and Antitrust: Power, Access, and Legitimacy, 59 ANTITRUST L.J. 339, 348-50 (1991); Thomas G. Krattenmaker, Per Se Violations in Antitrust Law: Confusing Offenses with Defenses, 77 GEO. L.J. 165 (1988); cf. Thomas E. Kauper, The Sullivan Approach to Horizontal Restraints, 75 CALIF. L. REV. 893, 905-08 & nn.70-71 (1987) (merit in a market power but not a market share screen; market power should be inferable from conduct). Two of the more recent helpful contributions to thinking about these issues are C. Frederick Beckner III & Steven C. Salop, Decision Theory and Antitrust Rules, 67 ANTITRUST L.J. 41 (1999), and Robert H. Lande & Howard P. Marvel, Manipulating the Rules of Competition: A Third General Category of Collusion (unpublished manuscript on file with author). Subsequent to the drafting of this article, the FTC and the Antitrust Division issued for comment Draft Antitrust Guidelines for Collaborations Among Competitors (Oct. 1, 1999) 〈http://www.ftc.gov/os/1999/9910/jointventureguidelines.htm〉. Those draft Guidelines retain a prominent role for the per se rule and a version of the rule of reason that can be applied "without a detailed market analysis." Id. § 3.2-3. The draft has attracted considerable attention and engendered some controversy. The antitrust agencies will have to review with care the comments they receive as they consider whether the lines they are drawing are sufficiently clear and helpful.
338. 119 S. Ct. at 1618 (Breyer, J., dissenting).
339. Although the FTC/DOJ Draft Antitrust Guidelines for Collaborations Among Competitors, supra note 304, retain a version of the rule of reason that can be applied "without a detailed market analysis," the term "quick look" is conspicuously absent. But cf. Robert Pitofsky, FTC Chairman, Joint Venture Guidelines: Views from One of the Drafters, Remarks Before ABA Section of Antitrust Law at 4 (Nov. 11-12, 1999) (draft Guidelines reject an absolute market power screen "for purposes of quick look or for rule of reason treatment") 〈http://www.ftc.gov/speeches/pitofsky/jvg991111.htm〉.
340. 121 F.T.C. at 311.