I explained in an earlier blog post that a criminal antitrust case had reached the Supreme Court where defendants convicted of bid rigging at public real estate foreclosure auctions had challenged the constitutionality of the per se rule.  On Monday, the Supreme Court declined to review the criminal antitrust convictions, leaving in place the per se rule in criminal antitrust cases.

As usual, the Supreme Court offered no explanation for denying cert in this case.  There is a Law 360 article on the case by Anne Cullen, January 13, 2020, Justices Skip Case Over ‘Per Se’ Rule In Antitrust Convictions, (behind paywall).

The defendants were joined in seeking Supreme Court review by amicus briefs filed by the National Association of Criminal Defense Lawyers and the Due Process Institute.  All of the briefs, including the brief of the United States, can be found in this earlier post:  Cartel Capers: Supreme Court Review Sought For Per Se Rule in Criminal Cases, October 30, 2019.

My short argument for why the per se rule is unconstitutional in a criminal case is:

There are three elements to a Section 1 Sherman Act offense: 1) an agreement; 2) in restraint of trade, 3) that affects interstate or foreign trade or commerce.  In a rule of reason civil antitrust case the jury decides all three elements, including whether the agreement was in restraint of trade (i.e. procompetitive or anticompetitive).  In a criminal case, however, the jury is instructed by the court that the agreement [if proven] is a restraint of trade and their job is only to find whether the defendant knowingly joined the charged agreement.  The language of Section 1 of the Sherman Act, however, is the same for a civil or criminal violation; so it is odd, in an oddly unconstitutional way, that in a criminal Sherman Act case the jury does not decide the fundamental element of whether the agreement was “in restraint of trade.”

While the per se rule has been long established, the defendants, in their brief to the Supreme Court, make clear there is another constitutional rule that takes precedence: the jury must find the defendants guilty beyond a reasonable doubt on every element of the crime. As entrenched as the per se rule may be, it must give way to this constitutional requirement.

The per se rule snuck under the radar if you will because it was established at a time when there was no real chance of anyone going to jail for an antitrust crime and long predates the more recent Supreme Court recognition of the constitutional requirement that juries find every element of a crime beyond a reasonable doubt.  Times have changed, as evidenced by the Antitrust Division, DOJ January 13, 2020 press release:  Former Air Cargo Executive Extradited From Italy for Price-Fixing.

There is another issue in antitrust law that comes to my mind.  In the no-poach cases the litigants try to win the heart of the Judge as to whether the case will be tried as a per se case (plaintiffs win), or the rule of reason (defendants win).  If the question is “Did the agreement restrain trade?” (and that is the question in an antitrust case), it seems the jury should decide the question.  In a criminal antitrust case, the constitution demands it.

I don’t think this issue will go away.  My friend James Backstrom sent me this quote from the esteemed (to those of us of a certain generation) Soupy Sales: “The path to change rarely is a straight line.”

More fodder for the blog.  I am also working on a longer article on this issue for the Antitrust, UCL and Privacy section of the California Lawyers Association, journal “Competition.”

Thanks for reading.

Bob Connolly             bob@reconnollylaw.com

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