Why Copperweld Was Actually Kind of Dumb: Sound, Fury, and the Once and Still Missing Antitrust Theory of the Firm?

22 Pages Posted: 22 Feb 2011  

Chris Sagers

Cleveland-Marshall College of Law, Cleveland State University

Date Written: February 22, 2011

Abstract

Since even before Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (1984), it has been thought that antitrust needs some "theory of the firm" to inform its application of a "single-entity" defense in Sherman Act section 1 litigation. Not only is that sense mistaken, it is emblematic of the deep misdirection of contemporary antitrust. It shows just how far antitrust has forgotten that it is a law, a practical tool to implement policy choices made through our system of government. Much too much of the time, it seems to fancy itself rather an abstract policy seminar to be dabbled in by the federal bench and its academic support staff. The point to be made specifically in this paper is one small part of that argument. Copperweld has generally been thought of as a watershed, a decision so obviously right and so reasonable in its analysis that it is not thought about very critically. But if it was so wise, one might have thought that single-entity decisions in the lower courts would become more principled and more coherently linked to clearly stated goals than they had been before. At the very least, they should seem different than the pre-Copperweld cases. And yet, they do not. Single-entity cases before and after Copperweld are largely indistinguishable, setting out the same ad hoc, subjective, and usually pretty shallow reasoning, with no obvious connection drawn to specified goals. The paper takes this fact as evidence that engaging in this sort of complex institutional analysis at such an early stage -- often enough at some point of early summary disposal, with little or no discovery -- is unwise.

Keywords: Copperweld, American Needle, Single Entity, Sherman Act, Section 1, Antitrust, Competition, Competition Policy, Joint Venture, Integration, Professional Sports, Sports Leagues, Major Leagues

JEL Classification: D23, K2, K21, L1, L14, L2, L22, L23, L24, L4, L41, L83

Suggested Citation

Sagers, Chris, Why Copperweld Was Actually Kind of Dumb: Sound, Fury, and the Once and Still Missing Antitrust Theory of the Firm? (February 22, 2011). Villanova Sports and Entertainment Law Journal, Vol. 17, 2011; Cleveland-Marshall Legal Studies Paper No. 11-206. Available at SSRN: https://ssrn.com/abstract=1767339

Chris Sagers (Contact Author)

Cleveland-Marshall College of Law, Cleveland State University ( email )

2121 Euclid Avenue, LB 138
Cleveland, OH 44115-2214
United States

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