The Breyer Mistake

From Matt Stoller's Big: Stephen Breyer's Legacy of Destruction

“President Clinton has been misled into making a grave mistake in nominating to the Supreme Court Judge Stephen Breyer,” wrote former FTC official Charles Mueller, the then-editor of the Antitrust Law and Economics Review in 1994, on the eve of Breyer’s confirmation. “On the basis of his antitrust record, he is an unjust man. He is also one who is intellectually and politically committed to a set of ‘economic’ theories that are demonstrably false and that will callously reduce the standard of living of the average American family in the decades to come.”

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"There were a host of unanimous decisions following Trinko that gutted antitrust law. There was Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber, which privileged big businesses who wanted to drive their competitors out of a market by overpaying for supplies in high fixed capital industries (which is one reason there are shortages today!). There was Pacific Bell Telephone Co. v. linkLine Communications, Inc, in which monopolists were allowed to use a tactic called a ‘price squeeze’ in which they exploited control over a vital resource to destroy competition. It got so bad that Breyer served as the Democratic leader in what the New York Times came to call Supreme Court Inc, for its favoratism to big business. (If you want a full rundown of some of Breyer’s decisions on corporate power, this blog post is good.)

"Even Breyer’s ‘good’ decisions are a mess, because his faith in complex theoretical economics is overwhelming. Law professors joke about Breyer’s arbitrary ‘five part tests’ and weird attempts to clarify the law, which almost always makes things more complicated. In Actavis, for instance, Breyer wrote an opinion on whether pharmaceutical companies are allowed to pay competitors to stay off the market so they can keep their drug prices high, what is known as ‘pay for delay.’ Rather than just writing “No that’s a bribe and it’s a violation of antitrust law,’ Breyer said that every case had to be judged individually using an economic analysis of whether that particular arrangement might have some sort of efficiency benefit. It’s ridiculous, bribing someone to stay off the market should be the definition of an antitrust violation. Instead, Breyer’s sloppiness and unwillingness to state the obvious led to a decade of messy litigation, billions of extra costs in higher drug prices, and bitter unresolved Congressional debates."

 For more: A Brief History of Stephen Breyer Enabling Corporate Power