Tuesday, April 10, 2007
Posted by D. Daniel Sokol
Professor Daniel Crane of Cardozo Law School (of recent fame on this blog for his excellent Antitrust Antifederalism article) is filing a law professors' amicus brief in Cascade v. PeaceHealth, a 9th Circuit case on bundled discounts. This is in response to the following (rather unusual) request by the 9th Cir. panel:
The court invites supplemental briefs by any amicus curiae addressing the following issue raised in this appeal: Whether a plaintiff who seeks to establish the predatory or anticompetitive conduct element of an attempted monopolization claim under § 2 of the Sherman Act by showing that the defendant offered bundled discounts to the defendant's customers must prove that the defendant's prices were below an appropriate measure of the defendant's costs. If so, what is the appropriate measure of costs and how should the trial court instruct the jury on the matter of costs? If not, what standard should the trial court instruct the jury to use to determine whether the bundled discounts are predatory or anticompetitive?
The Crane brief answers the first question yes. It argues in favor of a discount reallocation screen (the plaintiff must show that the competitive product was priced below cost after reallocation of discounts from the monopoly product) and advocates average variable cost as the appropriate measure of cost.
The brief will be on behalf of a group of law professors. It is due to be filed next Thursday (April 19). Anyone wishing to review a draft of the brief should email Dan.