Antitrust 1986-87: Power and Access (Part II)

AuthorJohn Deq Briggs,Stephen Calkins
DOI10.1177/0003603X8703200307
Published date01 September 1987
Date01 September 1987
Subject MatterArticle
The Antitrust Bulletin/Fall 1987
Antitrust 1986-87:
power and access (Part II)
BY
JOHN
DEQ. BRIGGS·
and
STEPHEN
CALKINS··
699
This is the second part
of
a review of the year in antitrust. Two
themes emerge from a review of that year: power and access.
Part
I of this article, which was published in the previous issue of The
Antitrust Bulletin,Idiscussed issues
of
market power, institutional
power, and the power of ideas.
It
was seen that market power has
become the central issue in antitrust litigation, although few
courts thoroughly understand the concept. Among antitrust insti-
Partner, Howrey &Simon, Washington, D.C.
Visiting Associate Professor, University
of
Pennsylvania Law
School, Philadelphia, Pennsylvania, and Associate Professor, Wayne
State University Law School, Detroit, Michigan.
AUTHORS' NOTE: This article is a revised and updated version
of
re-
marks delivered at The Conference Board's 26th Conference on Anti-
trust Issues in Today's Economy, March 5, 1987. With contributions
from and revisions by Professor Calkins,
Mr.
Briggs prepared Part
II.
The author thanks Martin Adelman and C. N. C. Fishman
for
their
review
of
the manuscript, but
of
course absolves them
of
responsibility
for any errors.
Briggs &Calkins, Antitrust 1986-87: Power and Access (Part I),
32
ANTITRUST
BULL.
275 (1987).
S/ 1987 by
Federal
LegalPublications, Inc.
700 The antitrust bulletin
tutions, three
players-state
attorneys general, the Congress, and
the Federal Trade
Commission-are
more vigorous today than
they were before. And in academia, scholars are questioning the
benefits of mergers, refining the "Chicago school" analysis, and
continuing research in theoretical economics.
The focus
of
Part
II of this review shifts from "power" to the
second theme: access. The past year saw the continued develop-
ment and application of a number of legal principles that effec-
tively deny plaintiffs full access to the judicial machinery of
antitrust.
It
is becoming increasingly difficult to satisfy the
threshold requirement, in many antitrust suits,
of
establishing a
conspiracy, and courts are regarding summary motions with
favor. Standing continues to bar many complaints. Numerous
plaintiffs are being barred by the Noerr-Pennington' and state-
action exemptions, although here there are some notable excep-
tions. Even antitrust law's commerce requirement, once regarded
as largely irrelevant, is a basis on which some courts are dismiss-
ing suits. Courts also have begun dismissing suits in deference to
arbitration provisions, which enjoy newfound respectability.
Access
A.
Conspiracy
1. CAPACITY TO CONSPIRE Two years ago, in Copperweld
Corp. v. Independence Tube Corp.,' the Supreme
Court
held
that aparent and its wholly owned subsidiary do not have the
capacity to conspire, because they are a single economic entity.
This ruling has been almost uniformly followed in the federal
2See Eastern R.R. Presidents Conference v. Noerr Motor Freight,
Inc., 365 U.S. 127 (1961); United Mine Workers
of
Am. v. Pennington,
381 U.S. 657 (1965).
467 U.S. 752 (1984).
Antitrust 1986-87 701
courts,
and
has generally been extended to encompass mere
majority ownership.' However, state courts are not necessarily
required to follow federal antitrust principles, and two states'
courts have held that, in analyzing their own state laws, they
are not bound by federal
precedents-and
they have applied
neither the holding nor the rationale of
Copper
weld. 5
An unresolved question under Copperweld is the capacity of
commonly owned corporations to conspire. Although a Virginia
district court held that such subsidiaries are capable of conspir-
4E.g., Novatel Communications, Inc. v. Cellular Tel. Supply, Inc.,
1986-2 Trade Cas. (CCH)
~
67,412 (N.D. Ga. 1986) (parent corporation
is not capable
of
conspiring with its
51OJo-owned
subsidiary); Cutters
Exch., Inc. v. Durkoppwerke
GmbH,
1986-1 Trade Cas. (CCH)
~
67,039 (M.D. Tenn. 1986) (manufacturer, its wholly owned exclusive
distributor,
and
two
of
the distributor's employees were incapable
of
conspiring to terminate the manufacturer's previous distributor). But
see St.
Joseph's
Hosp., Inc. v. Hospital Corp.
of
Am.,
795 F,2d 948,
956
(lIth
Cir. 1986) (plaintiff should be able to amend complaint to
plead facts showing that wholly owned subsidiary with entirely separate
board
of
directors had an " 'independent personal stake' in the outcome
of the conspiracy") (quoting Tunis Bros. Co. v.
Ford
Motor Co., 763
F,2d 1482, 1496 (3d Cir. 1985), vacated, 106 S. Ct. 1509 (1986), rein-
stated on remand, 5
TRADE
REG.
REP.
(CCH)
~
67,636 (3d Cir. July 15,
1987»; cf. Rothery Storage &Van Co. v. Atlas VanLines, Inc., 792 F,2d
210,214-15 (D.C. Cir. 1986) (Bork,
J.)
(dictum
that
where moving com-
pany's
board
of
directors was comprised largely
of
competing carrier
agents,
board
action constituted aconspiracy), cert. denied, 107 S. Ct.
880 (1987); Sonitrol of Fresno, Inc. v. American Tel. &Tel. Co.,
1986-1
Trade Cas. (CCH)
~
67,080, at 62,566 n.2 (D.D.C. 1986) (noting ruling
by special master requiring ownership sufficient to compel a merger be-
fore treating partially owned subsidiary as effectively wholly owned).
Louisiana Power &Light Co. v. United Gas Pipe Line
Co.,
493
So. 2d 1149, 1986-2 Trade Cas. (CCH)
~
67,272 (La. 1986); People v.
Schwartz, 5
TRADE
REG.
REP.
(CCH)
~
67,581 (N.Y. Sup. Ct. Oct. 17,
1986) (Donnelly Act is broader than Sherman Act).
But
see American
Credit
Card
Tel. Co. v. National Pay Tel.
Corp.,
504 So. 2d 486 (Fla.
Dist. Ct. App. 1987) (applying Copperwe/d); Ford
Motor
Co. v. Lyons,
137 Wis. 2d 397, 405 N. W.2d 354 (Wis. Ct. App. 1987) (same).

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