Antitrust Economics as Science after Daubert
| Date | 01 December 1997 |
| Author | Charles D. Weller |
| Published date | 01 December 1997 |
| DOI | 10.1177/0003603X9704200403 |
| Subject Matter | Domestic Antitrust |
The Antitrust BuLLetinlWinter1997
Antitrust
economics as
science
after
Daubert
BY
CHARLES
D.
WELLER
*
871
Economics is a "sufficiently certain discipline upon which to rest
major policy conclusions." "In many cases the theory is so
weLL
grounded that we can be certain, or
virtuaLLy
so,
of
its reliability. "
-Robert
Bork'
"In crucial areas such as the world economy. or the 'microeconomy'
of
business. markets. producers. and consumers. we hardly have
anything yet that deserves to be
caLLed
folklore. let alone theory."
"[T[here are few areas where right action depends as much on
right theory as it does in economics: yet in few areas is accepted
theory as inadequate to the demands
of
practice
and
policy or to
what we
actuaLLy
know."
-Peter
Drucker-
*
Partner
at
Baker
&Hostetler, Cleveland, Ohio.
R.
BORK,
THE
ANTITRUST
PARADOX
118, 117 (1978).
P.
DRUCKER,
THE
AGE
OF
DISCONTINUITY
142,
137
(1968).
Peter
Drucker
is
"the
preeminent
management
thinker
of
our
time"
according
to
Theodore
Levitt, then
editor
of
the Harvard Business Review.
(Quoted
in
Bennett,
Management Guru,
WALL
ST. J., July 28, 1987, at 1.) He has
been
called
"the seminal thinker on 20th-century
business
organization."
Gendron,
Flashes
of
Genius, 18
INC.
30 (1996).
© 1998 by Federal Legal Publications. Inc.
872
The antitrust bulletin
I.
Introduction
Antitrust and economics have had a long and interesting rela-
tionship,
sometimes
close,
sometimes
distant,
sometimes
hot,
sometimes
cold,
but, as
Professor
Bork
and
Professor
Drucker
illustrate, always provocative. In 1977, for example, the Supreme
Court cautioned
that"
'in
the real economic world rather than an
economist's
hypothetical model,' the
latter's
drastic simplifica-
tions generally must be abandoned."3 In the 1980s, economics,
particularly
Chicago
school
econornics.s
became
the
primary
policy
basis
for
federal
antitrust
enforcement."
Then
in 1992,
the
Supreme
Court
pulled
back
by
not
relying
exclusively
on
economic theory in Kodak»
The 1993 Supreme Court Daubert? decision concerns evidence
and scientific testimony, and does not specifically involve either
antitrust or economics. Nonetheless, it has important and perhaps
profound implications for both because economics is a form
of
scientific testimony."
Illinois Brick Co. v. Illinois, 431 U.S. 720,
741-42
(1977), quot-
ing Hanover Shoe, Inc. v. United Shoe Machinery Corp., 392 U.S. 481,
493 (1968).
4See, e.g., Posner, The Chicago School
of
Antitrust Analysis, 127
U. PA. L.
REV.
925, 932 (1979) ("the proper lens for viewing antitrust
problems is price theory").
Rule &Meyer, An Antitrust Enforcement Policy to Maximize the
Economic Wealth
of
All Consumers, 33
ANTITRUST
BULL.
677, 679 (1989).
6
Eastman
Kodak Co. v. Image
Technical
Services,
504
U.S. 451
(1992).
Daubert v. Merrell Dow Pharmaceuticals, Inc., 125 L.Ed.2d
469
(1993). See generally Levy, Scientific Evidence After Daubert, 22 LmGA-
nON 48 (1995).
Daubert was the basis for excluding economic expert testimony in
two
antitrust
cases, for example, In re
Aluminum
Phosphide
Antitrust
Litigation, 893 F. Supp. 1497 (D. Kan. 1995) and City
of
Tuscaloosa v.
Harcros Chemicals, Inc., 877 F. Supp. 1504 (N.D. Ala. 1995). See also
Hockett &Hinman, Admissibility
of
Expert Testimony in Antitrust Cases:
Does
Daubert
Raise
a
New
Barrier
to
Entry
for
Economists?,
10
ANTITRUST
40 (1996).
Daubert
873
Daubert changed the standards and procedures for allowing,
or
excluding,
scientific
expert
testimony.
Daubert
ended
the
70-year-old
Frye?
"let-it-all-in,
cross-examination-cures-all"
approach
that, as a
practical
matter,
granted
economists
'?
and
other
scientific experts relatively easy access to the
courtroom,
and
replaced
it
with
a
much
more
practical
and
restrictive
approach: "exclude-the-expert"
if
the proposed testimony is
not
shown to be both scientifically valid, and relevant to the particu-
lar
dispute before the court.
In the Supreme
Court's
words,
"the
Rules
of
Evidence.
. .
assign to the trial judge the task
of
ensuring that an expert's testi-
mony
both rests on a reliable
foundation
and is relevant to
the
task at hand."!'
The
Supreme
Court's
rationale for this landmark
change
regarding scientific experts was incisive and pragmatic:
the
courts and the Federal Rules
of
Evidence,
after
all, are
not
designed for the "search for cosmic understanding,"
but
for the
"particularized resolution
of
legal disputes."12
This article focuses on some
of
the practical implications
of
Daubert for judges and for litigators on both sides
of
an antitrust
case, whether proposing, or opposing, an economic
expert's
testi-
mony. The article also suggests that Daubert is more simply and
more soundly applied by recognizing the fundamental similarity
of
scientific method and legal method as fact-driven disciplines
that rigorously interact with theory.
Finally,
the
article
explores
a
number
of
implications
of
Daubert's requirement that economics meet scientific standards,
including the dubious viability in
today's
economy
of
the 33-year-
9
Frye
v.
United
States,
293
F. 1013,
1014
(D.C. Cir. 1923).
10 BORK, supra
note
1, at 8
("Basic
microeconomic
theory
is
of
course
a
science");
M.
Friedman,
Essay on the Methodology
of
Positive
Economics,
ESSAYS
IN
POSITIVE
ECONOMICS
3, 4
(1953)
(economics
"is,
or
can
be, an
'objective
science,'
in
precisely
the
same
way
as any
of
the
physical
sciences");
R.
POSNER,
ANTITRUST
ANALYSIS:
AN
ECONOMIC
PER-
SPECfIVE
3
(1976)
(the
"science
of
economics").
II
Daubert, 125
L.Ed.2d
at
485
(footnote
omitted).
12 [d.
(footnote
omitted).
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