Democracy or Dagher? What Liberals Would Want

• Author: William J. Curran
• DOI: 10.1177/0003603X1105600406
• Published date: 01 December 2011
• Date: 01 December 2011
• Subject Matter: Article

Democracy or Dagher?

What liberals would want

BYWILLIAM J. CURRAN III*

Although corporate capitalism and democracy can never be made

compatible, it is corporate capitalism, not democracy, that the present

Supreme Court strains to accommodate. Dagher illustrates how the

Court strained through a logic of corporate capitalism to

accommodate two competing petroleum firms so they could legally

conspire through their cartel to eliminate nationwide and some

global competition, in part by forming two joint ventures through

which the firms fixed prices of their respective products and

managed their production and marketing. Through decisions like

Dagher, the Court threatens a liberally conceived—but largely

illusory—democratic marketplace of competitive prices, as the Court

will likely continue its assault against the antitrust laws and its per se

rule and destroy legal principles that favor an authentically

democratic economic system and provide defenses against corporate

capitalism in democracy’s struggles with corporate incompatibilities.

KEY WORDS: Dagher, antitrust, per se rule, joint ventures, democracy,

corporate capitalism.

THE ANTITRUST BULLETIN:Vol. 56, No. 4/Winter 2011 :883

* Editor in Chief, The Antitrust Bulletin.

AUTHOR’S NOTE: I remain hugely indebted to John J. Flynn for his many amazingly

productive years of scholarly service to The Antitrust Bulletin, for his always wise

guidance, and for his personal encouragement. Although I often shared views with

John about the antitrust laws, we never differed over our differences, celebrating the

many more important things about life upon which we agreed, believing moral and

intellectual truth resided in life’s poetic beauty. For John Flynn has written, “For

those of us of Irish descent and concerned with . . . legal reasoning and the . . . moral

© 2011 by Federal Legal Publications, Inc.

The Sherman Act . . . [is] conducive to the preservation of our democratic

political and social institutions.1

Antitrust laws in general, and the Sherman Act in particular, are the

Magna Carta of free enterprise . . . [and] are as important . . . as the Bill of

Rights . . . .2

As a charter of freedom, the [Sherman Act] has a generality and adapt-

ability . . . desirable in constitutional provisions.3

I. INTRODUCTION

Must antitrust play a significant role in our democracy? Certainly,

past Supreme Court decisions suggest as much.4But if antitrust must,

and if our democracy would be vulnerable without it,5then our

884 :THE ANTITRUST BULLETIN:Vol. 56, No. 4/Winter 2011

content of law . . . and . . . economics, it is a fine compliment to label as poetry what

we understand intellectual inquiry to be . . . . For us, poetry is truth dwelling in

beauty.” John J. Flynn, Legal Reasoning, Antitrust Policy and the Social “Science”

of Economics, 33 ANTITRUST BULL. 713, 743 (1988). I am also greatly indebted to Mr.

Theodore P. Kovaleff for his kind invitation to present on April 22, 2009, to the

Columbia University Seminar on Law and Politics, a lecture entitled The Supreme

Court, Dagher, and Recent Antitrust Decisions: Political Ideology or Conserv-

ative Judicial Principle?

1N. Pac. R.R. v. United States, 356 U.S. 1, 4 (1958).

2United States v. Topco, 405 U.S. 596, 610 (1972).

3Appalachian Coals, Inc. v. United States, 288 U.S. 344, 359–60 (1933).

4See cases cited supra notes 1–3.

5That democracy itself has been vulnerable to antitrust laws as they

have been interpreted over Sherman Act history, sometimes by conservative

courts, sometimes by liberal courts, has been a recurring theme of my writ-

ings. See, e.g., William J. Curran III, Antitrust and the Rule of Reason: A Critical

Assessment, 28 ST. LOUIS U. L. J. 745, 770 (1984) (“[N]ew values, rather than

traditional competition and its mythical underpinnings, should be the funda-

mentals of a future society if participation in economic life is to be demo-

cratic, and if the accumulation of capital and its exploitation are to be

secondary . . . .”); William J. Curran III, Beyond Economic Concepts and Cate-

gories: A Democratic Refiguration of Antitrust Law, 31 ST. LOUIS U. L.J. 349,

372–73 (1987) (“Our society has selected capitalism through a process of elim-

ination, consciously rejecting alternatives believed to be outside the demo-

cratic tradition. But not all alternative economic systems are beyond the pale

of democracy; some harmonize self-interests not by capitalistic domination

democracy must surely be threatened by recent Supreme Court deci-

sions.6These decisions have undermined antitrust principle and land-

mark precedent7through a privileging of corporate capitalism,8with

the Court in one of these decisions, Texaco Inc. v. Dagher,9going so far

as to condone joint venture price fixing by ignoring that the venture

was part of a comprehensive corporate cartel’s scheme to eliminate

competition and to fix and make uniform, higher nationwide prices.

The Court ignored10 this cartel although through it defendants

Texaco and Shell Oil in 1998 created two joint ventures, agreeing that

one, Motiva Enterprises LLC, would operate for them in the eastern

DEMOCRACY OR DAGHER?:885

and social control, but by elevating social consciousness.”); William J. Curran

III, On Democracy and Economics, 33 ANTITRUST BULL. 753, 766–67 (1988) (“Since

morality has become economics, democracy cannot be complementary.

Democracy reflects obligation and duty, while economics reflects opportunity

and expediency.”); and William J. Curran III, Markets, Morals or Wealth? Delu-

sions of a Standardized Antitrust Value, 19 REV. INDUS. ORG.3, 7 (2001) (“Let us

consider the concepts behind the validation of markets and competition, then

show their incompatibility with democracy and justice.“).

6Other commentators have recently observed how the current Supreme

Court has accommodated corporate interests, thereby threatening public wel-

fare and democracy. See Jeffrey Rosen, Supreme Court Inc., N.Y. TIMES, Mar. 16,

2008 (Magazine), at 38; Adam Liptak, Justices Offer Receptive Ear to Business

Interests, N.Y. TIMES, Dec. 19, 2010, at A1; Ronald Dworkin, The “Devastating”

Decision, N.Y. REV. BOOKS, Feb. 25, 2010, at 39.

7See Richard M. Brunell, Overruling Dr. Miles: The Supreme Trade Com-

mission in Action, 52 ANTITRUST BULL. 475, 528 (2008) (“To be sure, the Supreme

Court has made many controversial policy-laden decisions under the Sher-

man Act . . . . But doubtless Senator Sherman would be surprised to learn that

the common law principles he expected the courts to apply include the disre-

gard of long-standing precedent and clear expressions of congressional

intent.”).

8See sources cited supra note 6.

9547 U.S. 1 (2006).

10 The Supreme Court chose to ignore the many incriminatory facts

about the cartel and the supporting conspiracies set forth in the court of

appeals decision, Dagher v. Saudi Ref. Inc., 369 F.3d 1108 (9th Cir. 2004), as

noted in Daniel R. Shulman, Texaco v. Dagher: Opportunities Missed and

Neglected, 52 ANTITRUST BULL. 539–49 (2007), and as emphasized throughout

this article.