By: Robert Connolly (Cartel Capers)
In the coming months there will be many proposals advanced to amend the Sherman Act. My offering is to amend Section 1 with this text: “Price fixing, bid rigging and market/customer allocation are per se illegal.” You may think the Sherman Act already says this. It does not. The text simply states “restraints of trade” are illegal. The Supreme Court has held that these three words somehow created two distinct substantive rules of law: the per se rule and the rule of reason. The Antitrust Division has argued successfully defended criminal antitrust convictions based on the per se rule arguing: “it is as if the Sherman Act reads price fixing and bid rigging are illegal.” But, the Sherman Act does not say that. Because the statute does not set forth a per se rule, whether the agreement was a restraint of trade is an element of the offense. There have been recent challenges to the constitutionality of the per se rule in criminal antitrust cases because the judge, not the jury, makes the finding of whether this element of the offense has been proven. The per se rule takes away from the jury the question of whether the agreement in question was a “restraint of trade.” So far, the constitutional attacks on the per se rule have been rejected by trial and appellate courts based on clear precedent upholding the per se rule. Two recent Supreme Court cases, however, have strengthened my view that a textualist reading of the Sherman Act will result in the Supreme Court finding that the Sherman Act does not create a per se rule. It is for the jury to decide whether the alleged agreement (if proven) constitutes a restraint of trade.