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Citing disbarred lawyeras agrudging acceptance of responsibility,a judge bars readmission in federal court


Abortion aabolitionistsa seek equal protection rights for fetuses, prosecutions of women


Teen charged in deadly fire challenges police use of Google searches to find suspects


Judge who wasnat satisfied with plea deal kicks entire prosecutoras office off the case


Federal judge rules for drug distributors in opioid trial, says case fails under West Virginia nuisance law


Overturning precedent, top Iowa court limits nuisance suits against hog farms


How to take a self-deposition to arighta your future


Judge limits Metaas refiled brief to 5 footnotes after complaining of local rule violation


How the decision overturning Roe v. Wade affects insurance coverage for abortions and related litigation


As 2 top state courts allow abortion limits, court filing says a third canat stop sale of abortion pills


Asylum-seeker reflects on ABA pro bono assistance in pursuing American dream


Weekly Briefs: Old arrest warrant found in Emmett Till case; former White House counsel subpoenaed


State officials cite Dobbs as reason to support anti-sodomy law, transgender-treatment ban


Lawyer who once directed corporate law at Apple pleads guilty to insider trading


SCOTUS will decide case that could strip state courts of power to review congressional voting maps


House committee approves record $675M in funding for civil legal services


Judge Ketanji Brown Jackson sworn in as Justice Breyer officially retires; Biden accuses SCOTUS of aoutrageous behaviora


Supreme Court blocks order intended to increase Black voting power in Louisiana, grants cert


Cassidy Hutchinsonas testimony undermines possible Trump defense in potential criminal case, experts say


Some BigLaw firms will cover travel costs for abortions


Chemerinsky: Supreme Court gun ruling puts countless firearms regulations in jeopardy


Judge removed from duty after alleged aGov. MeMawa reference, courtroom profanity, sua sponte order


Authors of a50 Lessons for Happy Lawyersa share some top tips


Lawyer gets suspension after posting secret nude photos of his then-wife


Top California court will consider employer liability for take-home COVID-19 infections


AT&T/Time Warner: Rube Goldberg Machines, Bob Dylan Quotes and a Shifting View of Video Programming Competition

My partners Mark Palchick and Marty Stern have written a good article on the District of Columbia's recent antitrust ruling rejecting the U.S. Justice Department's efforts to block AT&T's acquisition of Time Warner.

AT&T/Time Warner DOJ Smack Down: You Don't Need a Weatherman to Know Which Way the Wind Is Blowing.

Interesting stats from their article:
  • The District Court's opinion is 172 pages long.
  • There are over 20 exclamation points!
  • References to Rube Goldberg machines.
  • And at least one quote from Bob Dylan.
Here is the takeaway from their article:
The evidence adduced at trial also seemed to contradict a central concern of the Open Internet rules -- that broadband distributors will block access to rival video sources. The court found that distributors have a strong incentive to maximize distribution of video programming on their networks, not curtail it.
If you read nothing else in the opinion, and want a plain English description and a clear distillation of the current state of the programming supply and distribution markets, and the cut-throat, highly competitive, knock-down, drag-out negotiations between programmers and distributors, complexity, warts and all, peruse pages one through forty of the opinion.  It is a wonderful distillation of how the sausage is made.  While there are many, one key take-away from that discussion is that there is no more amust havea national programming, which is now a mere marketing term, and the absence of particular channels on an MVPD platform does not preclude the ability of MVPDs to compete in the marketplace.
 Clearly, according to the judge, the market is shifting away from MVPD competition and the traditional cable and broadcast advertising markets based on linear, live programming and gross eyeballs to a market focused on data-driven targeted advertising, driving data usage through subscriber video consumption, and on the competition between wireline and wireless providers to be the broadband delivery method of choice.  a[A]s Nobel laureate Bob Dylan correctly observed,a noted the court, aaYou don't need a weatherman to know which way the wind blows.aa
Mark Palchick and Marty Stern are partners in the Communications, Technology & Media practice of law firm Womble Bond Dickinson in Washington, D.C. They are co-authors of the firmas Communications, Tech & Media Review blog.

Will Kavanaugh's "Modern Approach" Change The Trajectory of Supreme Court Antitrust Jurisprudence?

Justice Kennedy swearing in Brett Kavanaugh to D.C. Circuit
In my last post, I discussed one of Judge Kavanaugh's antitrust opinions, in which he argued for a "modern approach" to antitrust law.  Others have similarly commented on Kavanaugh's willingness to modernize antitrust law by discarding outdated precedent and creating clear guidelines.  Professor Stephen Calkins notes that "modern" appears six times in Kavanaugh's dissent in Anthem and four times in Whole Foods.  In the latter case, Kavanaugh critiques older antitrust cases as "relics" with "loose" or "free-wheeling" analysis.  According to Kavanaugh modern approach, antitrust cases that have not "stood the test of time," should be pushed "to the jurisprudence sidelines."

Would this "modern approach" to antitrust law change the direction of the Supreme Court's jurisprudence?  It is hard to say.  After all, Justice Kennedy, whom Kavanaugh is nominated to replace, was himself a modernizer of antitrust law.  

Justice Kennedy authored the majority opinion in Brooke Group v. Brown & Williamson Tobacco, which heightened the standards for predatory pricing.  Kennedy held that a plaintiff must show that a defendant's price was below cost and that the defendant would be able to raise prices and "recoup" those loses after competitors left the market.  This modern standard is so hard to meet, that there have been virtually no successful predatory price cases after Kennedy's 1993 decision.

In Leegin Creative Leather Products v. PSKS, Justice Kennedy reversed 100-years of antitrust precedent in holding that resale price maintenance would no longer be considered per se illegal.  In so ruling, Justice Kennedy looked to modern "economic analysis," which showed that vertical retail price restraints could be procompetitive.  Rather than continuing to follow outdated precedent, Kennedy explained that the Sherman Act should be treated as a "common-law statute" which can "evolve[] to meet the dynamics of present economic conditions."  Kennedy was willing to overrule established precedent because "subsequent cases [and modern economic analysis] have undermined their doctrinal underpinnings."

Similarly, Kennedy joined the majority in Twombly in changing the pleading standards for antitrust cases.  That decision was based, in part, on the "costs of modern federal antitrust litigation and the increasing caseload of the federal courts."  Two years later, Kennedy himself was the author of the majority opinion in Iqbal which confirmed that Twombly's heightened pleading standards apply to all cases.   Together, Twombly and Iqbal represent the most significant change, or modernization, of civil procedure in decades.

Given Justice Kennedy's willingness to discard outdated precedent and modernize antitrust law based on our current understanding of economic principles, Judge Kavanaugh's "modern" approach to antitrust law will likely simply be an extension of Justice Kennedy's jurisprudence, rather than a new approach.  This is not altogether surprising considering that Judge Kavanaugh was a clerk for Justice Kennedy on the Supreme Court in 1993--the same year that Justice Kennedy created the modern standards for predatory pricing in Brooke Group.

Does Kavanaugh's Dissenting Opinion in an Antitrust Case Portend His Views on Abortion?

Roe v. Wade to be "settled law."

What constitutes precedent and when can it be overruled were at issue in the D.C. Circuit's recent decision to block the Anthem-Cigna merger.  Judge Kavanaugh dissented from the majority's opinion in that case, and he was criticized by the majority for not properly respecting Supreme Court precedent.

Can we learn anything from his dissent about whether and to what extent he considers established Supreme Court precedent to be binding or persuasive authority?

The Anthem-Cigna Antitrust Case

The Obama Department of Justice and multiple states sued to stop the merger of Anthem and Cigna, two of the nation's larges health insurance providers.  The government argued that the merger would substantially lessen competition in the market for employers purchasing insurance.  After a six-week trial, the D.C. District Court agreed and enjoined the merger under Section 7 of the Clayton Act.

There were two main issues on appeal: (1) whether courts can consider efficiencies as a defense to illegality under Section 7; and (2) whether the District Court erred in holding that Anthem's purported efficiencies were sufficient to overcome the anticompetitive effects of the merger.  Anthem argued that the court had overlooked the cost savings that could be generated from the larger combined entity negotiating more favorable rates with healthcare providers.

In a 2-1 decision, the D.C. Circuit affirmed the lower court's ruling.  The majority expressed some skepticism about whether efficiencies could be an ultimate defense to Section 7 illegality because of the Supreme Court's 1967 decision in FTC v. Procter & Gamble, 386 U.S. 568 (1967), that "possible economies cannot be used as a defense to illegality." 

The majority noted that, despite the "clear holding of Procter & Gamble," which has not been explicitly overruled, some courts of appeals had recognized the use of efficiencies evidence in rebutting a prima facie case.  In the Anthem-Cigna case, however, the D.C. Circuit sidestepped the issue by assuming that, even if efficiencies could be a defense, the District Court did not clearly err in rejecting Anthem's efficiencies defense.  The majority also doubted whether there would be any such efficiencies or that any cost savings would be passed along to the employers.

Judge Kavanaugh's Dissent

Judge Kavanaugh wrote a dissenting opinion in which he determined the District Court erred by not considering that the combined Anthem-Cigna would have been able to negotiate lower provider rates, which he believed would be passed through to employers.

In reaching his dissenting opinion, Kavanaugh first argued that, despite the language from Procter & Gamble, efficiencies could be considered in a Section 7 case under a "modern" antitrust analysis.  Describing the history of merger enforcement under antitrust law, Kavanaugh explained that in the 1960s the Supreme Court construed Section 7 to prohibit virtually any horizontal mergers, but subsequently cut those precedents back beginning with its 1974 decision in United States v. General Dynamics Corp., 415 U.S. 486 (1974).  Thus, Kavanaugh argued that the D.C. Circuit is bound by this "modern approach taken by the Supreme Court" rather than the precise language in the outdated decision in Procter & Gamble.

The majority criticized Kavanaugh's "wishful assertion" that the older Procter & Gamble precedent could be "disregarded ... because it preceded the 'modern approach'" that Kavanaugh preferred.   "Put differently, our dissenting colleague applies the law as he wishes it were, not as it currently is."  Even if the Supreme Court has not recently opined on the issue, explained Judge Rogers for the majority,"it still is not a lower court's role to ignore on-point precedent so as to adhere to what might someday become Supreme Court precedent."

What Does This Mean?

The majority's critique of Kavanaugh's respect for precedent may foreshadow some of the questions he will be asked during his confirmation hearings, especially with respect to Roe v. Wade.  Of course, if confirmed as a Supreme Court Justice, Kavanaugh would not be in the position of a lower court constrained by binding precedent, as he was in the Anthem-Cigna merger.  Instead, he truly would be in a position to decide "what might someday become Supreme Court precedent."

Is the DOJ's Approval of AT&T's Acquisition of Time Warner Conditioned on the sale of CNN?

Cartoon tweeted by President Trump in August 2017
According to several news outlets, the Department of Justice has called on AT&T and Time Warner to sell DirectTV or Turner Broadcasting, which includes CNN, in order to gain approval of AT&T's $84.5 billion acquisition of Time Warner.

The New York Times reports that executives at AT&T and Time Warner are bewildered at the request because the proposed deal is a vertical merger.  When approving Comcast's similar acquisition of NBC Universal, under the Obama administration, the DOJ and FCC imposed several conditions on Comcast's business practices to prevent Comcast from withholding content from rivals.  The New York Times explains that these "behavioral remedies" are typical in vertical mergers, but "[t]he Justice Department's demands for divestitures would be a major change in antitrust policy..."

Reuters reports: "Trump, who has accused Time Warner's CNN and other media outlets of being unfair to him, criticized the deal on the deal on the campaign trial last year and vowed that as president his Justice Department would block it."

The Financial Times reports: "'Its all about CNN,' said one person with direct knowledge of the talks between the company and the DOJ, adding that the regulator made it clear to AT&T that if it sold CNN the deal would go through."

An unnamed source is quoted by Politico as saying: "The only reason you would divest CNN would be to kowtow to the president because he doesn't like the coverage.  It would send a chilling message to every news organization in the country."

In July, the New York Times reported that White House advisers had discussed using the deal as "a potential point of leverage over their adversary" CNN.  This reporting prompted Democratic Senators to warn against political intervention.  "Any political interference in antitrust enforcement is unacceptable" wrote Senator Amy Klobuchar to Attorney General Jeff Sessions, according to a CBS story.  Her Minnesota colleague Al Franken stated "The Trump Administration's war against the media must not influence the fate of the transaction."

On Sunday, Kellyanne Conway said that the Trump administration is not interfering with the Justice Department's review of the deal.

To make matters more complicated, today DOJ sources apparently told Fox News that it was AT&T who offered to divest CNN, but that the DOJ rejected this offer.  But according to CNN, the AT&T CEO denies this, stating: "Throughout this process, I have never offered to sell CNN and have no intention of doing so."

Apart from the "he said, she said" reporting, there are obvious political and First Amendment implications to this story, as well as antitrust concerns.  This will be the first major decision for Makan Delrahim, the newly appointed antitrust chief at DOJ.  Delrahim voiced tentative support for the deal prior to his nomination, but is said to be looking at it more closely now that he is in office.  Even before the news came out today, analysts said that the AT&T/TimeWarner deal "could be an early test of Delrahim's public perception as an independent official."


If Republicans Allow A Hearing on Merrick Garland's Nomination, They Should Ask Him About Teeth Whitening


Before becoming a judge on the D.C. Circuit, Merrick Garland was an attorney at Arnold & Porter and a professor at Harvard Law School, where he taught antitrust law.  He wrote several articles for the Harvard Law Review and Yale Law Journal on the scope of judicial review for administrative regulations and the state action doctrine.  In the articles, Mr. Garland argued for a deferential, non-intrusive role for the judiciary.  Courts should review administrative regulations to ensure fidelity to the intent of Congress and should not preempt the policy decisions of states through antitrust law or by restricting the state action doctrine.

The state action doctrine immunizes state regulations from challenges under the Sherman Act.  In order to receive immunity, the challenged restraint must be "clearly articulated" as state policy and "actively supervised" by the state.  California Retail Liquor Dealers Association v. Midcal Aluminum, Inc., 445 U.S. 97, 105 (1980).  At the time Garland wrote his article, some had argued that the state action doctrine should be narrowed to allow for the preemption of "economically inefficient" state regulations, especially when the regulations originated from the political efforts of private parties who stand to benefit from the restraint.

Garland, however, argued against such a revision, explaining:
The judiciary should not interfere under the aegis of the antitrust laws with a state's political decision, however misguided it may be, to substitute regulation for the operation of the market.  Despite protestations, the revisionist proposal is little more than a return to the era the Court left behind when it repudiated Lochner v. New York.  The substitution of 'antitrust' for 'due process' and 'economic efficiency' for 'liberty of contract' does not make the assault on democratic politics any more palatable.
Garland, Antitrust and State Action: Economic Efficiency and the Political Process, 96 Yale L.J. 486, 487-88 (1987).

Thirty years later, this same debate about economic liberty and the state action doctrine has resurfaced in the context of occupational licensing--specifically teeth whitening.

Like many professionals, dentists are licensed and regulated by state dental boards.  Those who are not licensed are prohibited by state law from practicing dentistry.  There is some dispute, however, about whether teeth whitening procedures -- i.e. shining an LED lamp into the mouth of a patient after application of a peroxide-based whitener -- can be performed by non-dentists.  Not surprisingly, dentists say no.

The North Carolina State Board of Dental Examiners, for example, issued cease-and desist letters to non-dentists offering teeth whitening services.  When the Federal Trade Commission brought a lawsuit against the Board claiming that it was improperly seeking to protect its members from competition, the Board argued it was immune under the state action doctrine because it was a government agency.

The case went all the way to the United States Supreme Court, which held in a 6-3 decision that the Board was not immune because it was not "actively supervised" by the state.  North Carolina State board of Dental Examiners v. Federal Trade Commission, __ U.S. __, 135 S.Ct. 1101 (2015).  In clarifying and narrowing the state action doctrine, the Court explained: "When a State empowers a group of active market participants to decide who can participate in its market, and on what terms, the need for supervision is manifest."

In another case decided a few months later, teeth whiteners challenged a ruling by the Connecticut State Dental Commission that only a licensed dentist could shine the LED light into the mouths of customers during teeth whitening procedures.  Instead of an antitrust case, this was a constitutional challenge based on the Equal Protection and Due Process Clause.  The Second Circuit Court of Appeals rejected the challenge, however, finding that there was a rational basis to uphold the regulation because, however tenuous, there was at least some evidence that LED lights may cause some harm to some consumers.  Sensational Smiles, LLC v. Jewel Mullen, 793 F.3d 281 (2015).  

After noting that this was not an antitrust case, the Second Circuit explained that even if the true purpose of the regulations was naked economic protectionism, that still would be constitutional.  
Much of what states do is to favor certain groups over others on economic grounds.  We call this politics.  Whether the results are wise or terrible is not for us to say, as favoritism of this sort is certainly rational in the constitutional sense...
To hold otherwise would be to interpret the Fourteenth Amendment in a way that is destructive to federalism and to the power of the sovereign states to regulate their internal economic affairs. As Justice Holmes wrote over a century ago, a[t]he 14th Amendment does not enact Mr. Herbert Spencer's Social Statics.a Lochner v. New York, 198 U.S. 45, 75, 25 S.Ct. 539, 49 L.Ed. 937 (1905) (Holmes, J., dissenting)
The Second Circuit's Sensational Smiles decision has been criticized, particularly from the right.  A few weeks ago, George Will devoted an entire column attacking the teeth whitening cartel and arguing for more aggressive judicial review of economic regulations.  If the Supreme Court refused to take the appeal, Will argued, government would have "an unlimited licence ... to impede access to professions, reward rent seekers and punish consumers, thereby validating Americans' deepening disdain for government."

While the Supreme Court recently declined the cert petition in Sensational Smiles, this issue is likely to come before the Court in the next few years because there is a clear Circuit split between the Second and Tenth Circuit on one side and the Fifth, Ninth and Sixth Circuits on the other side, who reject economic protectionism as a rational basis for regulation under the Fourteenth Amendment.

While I do not presume to know how Judge Garland would answer these questions today, it is noteworthy that he previously argued that courts should defer to state policy decisions even if the decision was economically inefficient and the product of political pressure from market participants.  Both the Second Circuit's opinion and Garland's law review article argue that scrutinizing these types of economic regulations would lead to a return of the discredited "Lochner era," where a conservative Supreme Court invalidated New Deal legislation based on notions of economic liberty.

This would be an ideal avenue of questioning for Judge Garland as a Supreme Court nominee:
  • "Do you agree that naked economic protectionism is a legitimate basis for government action?" 
  • "Have your views on the state action doctrine changed since you wrote that law review article?"
  • "What role does economic theory have in the judicial review of state or federal regulations?"
  • "Do you think the current Supreme Court is in danger of returning to the Lochner era?" 
  • "Where do you get your teeth whitened?" 
But since the Republicans do not appear willing to hold a hearing, all that we can do is read a 30 year-old law review article and speculate as to how Judge Garland would answer these questions.


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