Dworkinian Antitrust

• Author: John O. McGinnis & Andrew M. Meerkins
• Position: George C. Dix Professor, Northwestern Pritzker School of Law/Associate, Shook, Hardy & Bacon LLP
• Pages: 1-59

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Dworkinian Antitrust

John O. McGinnis* & Andrew M. Meerkins**

ABSTRACT: In this paper we offer a jurisprudential explanation of the

structure and evolution of antitrust law, arguing that it provides the best

example of Ronald Dworkin’s famous theory of integrity in action. Dworkin’s

jurisprudence describes antitrust law strikingly well because it chooses right

answers by considering what guiding principle best fits and justifies the

relevant law. In antitrust, the principle of consumer-welfare promotion

provides the best fit for antitrust statutes as a whole because, although

legislators mentioned other objectives, they did not believe they were in conflict

with the first and overriding objective of consumer welfare. Moreover, even if

other principles—say, the protection of small businesses—can compete with

consumer-welfare promotion in terms of fit, such other principles cannot

compete in terms of justification, because they cannot be coherently achieved

by judges in antitrust cases and are better undertaken by other kinds of

legislation. In contrast, legal positivism—the dominant jurisprudential

theory to which Dworkin’s integrity played the foil—cannot explain antitrust

law, because antitrust decisions often cannot be generated by the sparse

statutory text available, even when combined with policy discretion.

Dworkinian jurisprudence thus explains why court decisions in antitrust rely

on economic principles rather than statutory text or ad hoc policy. Economic

principles provide the most reliable and consistent path to promoting

consumer welfare. This distinctive jurisprudence also explicates many

unusual features of antitrust doctrine. For instance, the Supreme Court is

unusually willing to overrule long-established cases, lower courts sometimes

fail to follow older Supreme Court precedent, and courts treat Department of

Justice guidelines in the area as powerful determinants of their own decisions.

This breakdown of the hierarchy of precedent and the judicial/executive

branch cross-pollination cannot be understood through the positivist

framework. If economic principles are immanent in law , however, these

practices make sense. When the pull of such principles is strong, both the

executive and judiciary at all levels are engaged in a joint enterprise of

explaining and applying the economics to challenged business practices and

agreements, rather than guarding rival areas of policy discretion as typical in

our separation-of-powers system.

Dworkin’s integrity is not only the best explanation of antitrust jurisprudence,

but also an attractive jurisprudence in this area. As a general matter,

2 IOWA LAW REVIEW [Vol. 102:1

Dworkin’s theory has been sharply criticized as unworkable, because it is

argued that judges have no way of discovering the principles that ought to

guide their decision-making. Moreover, people simply disagree about the

principles’ content or application. While these criticisms have substantial

merit in fields like constitutional law, in antitrust, microeconomics does

provide consensus principles that can be relatively objectively applied to decide

cases.

I. INTRODUCTION .................................................................................... 3

II. ANTITRUST’S JURISPRUDENTIAL EVOLUTION ....................................... 9

A. ANTITRUST’S FORMATIVE YEARS .................................................. 9

B. PROGRESSIVES, NEW DEALERS, AND THE WARREN AND BURGER

COURT: A DOCTRINAL THICKET ................................................ 12

C. CONSUMER WELFARE, CONSENSUS, AND THE CHICAGO SCHOOL .. 18

III. DWORKIN’S JURISPRUDENCE OF PRINCIPLE ....................................... 21

A. LAW AS INTEGRITY AND THE MYTH OF JUDICIAL DISCRETION ...... 21

1. Rules Versus Principles ................................................... 22

2. Principles Versus Policies ............................................... 23

3. Doing Integrity ................................................................ 24

4. Reading Statutes with Integrity ...................................... 27

B. ATTACKS ON INTEGRITY ............................................................ 28

IV. INTEGRITY AND ANTITRUST ............................................................. 31

A. THE DWORKINIAN FIT AND JUSTIFICATION OF CONSUMER

WELFARE IN MODERN ANTITRUST .............................................. 31

1. Antitrust’s Fit with Consumer Welfare ............................ 31

2. Consumer Welfare as a Dworkinian Justification ........... 35

B. INTEGRITY EXPLAINS MODERN ANTITRUST JURISPRUDENCE ........ 37

1. The Supreme Court’s Willingness to Discard

Precedent ......................................................................... 38

2. The Supreme Court’s Willingness to Ignore Bad

Precedents ....................................................................... 39

3. Lower Courts’ Willingness to Innovate .......................... 40

4. The Weakness of Separation Powers in Antitrust ......... 41

C. TRANSCENDING INTEGRITY’S CRITICS ......................................... 43

V. SOME OBJECTIONS AND PROBLEMS ..................................................... 45

A. ECONOMIC PRINCIPLES AS DWORKINIAN PRINCIPLES ................... 45

B. ECONOMIC PRINCIPLES AS OBJECTIVE PRINCIPLES ....................... 46

C. HARDEST CASES ......................................................................... 48

2016] DWORKINIAN ANTITRUST 3

VI. CONSENSUS IN THE COURTS ............................................................. 49

A. DATA ........................................................................................ 50

B. ANTITRUST AS PERCENTAGE OF THE DOCKET .............................. 53

C. DISSENT RATE IN ANTITRUST CASES ........................................... 55

VII. INTEGRITY’S PROVINCE ..................................................................... 56

A. REQUIREMENTS ......................................................................... 57

B. AREAS LIKELY SUITABLE FOR INTEGRITY ..................................... 57

VIII. C ONCLU SION .................................................................................. 59

“In view of these circumstances, it must be confessed that there is no

consistent or intelligible policy embodied in our law by which public officials

and business men may distinguish bona fide pursuit of industrial efficiency

from an illicit program of industrial empire building.”

—Robert H. Jackson & Edward Dumbauld1

“[T]here is widespread agreement today among courts, antitrust-enforcement

agencies, and antitrust practitioners and scholars about the goals of the

antitrust enterprise. . . . [M]ost contentious issues in antitrust are

nonideological and no longer require appealing to endogenous preferences or

foundational views about the legitimacy of the capitalist order . . . .”

—Daniel A. Crane2

I. INTRODUCTION

Justice Jackson and Professor Crane were talking about the same

statutes—and they were both right. America’s competition law dramatically

changed course in the 20th century. Once trumpeted as a populist rallying

cry, antitrust now is the law that most relentlessly reflects economic analysis.

Yet this shift did not flow from statutory revisions by Congress, but from a new

way of interpreting the same statutes by the courts and the executive branch.

The federal judiciary, at times taking its lead from the Department of Justice

Antitrust Division and the Federal Trade Commission (“FTC”), now sketches

the boundaries of our competition law. It does so with a sparse statutory

framework that provides concepts that appear to defy precise definition like

* George C. Dix Professor, Northwestern Pritzker School of Law. Thanks to Robert

Burns, Josh Fischman, Andrew Koppelman, Stephane Mechoulan, Lindsey Simon, and

participants in workshops at Northwestern and William and Mary law schools for comments, and

to Joseph Delich for research assistance.

** Associate, Shook, Hardy & Bacon LLP.

1. Rob ert H . Jac kson & Edw ard D umbau ld, Monopolies an d the Courts, 86 U. PA. L. REV. 231,

237 (1938).

2. See Daniel A. Crane, Technocracy an d Antitrust, 86 TEX. L. REV. 1159, 1211–12 (2008)

(citation omitted).