But before you report me to the ethics committee for violations of various duties, keep in mind that my conduct was fully sanctioned by the Bar. After all, my client was a mythical one and I was a potential lawyer existing only on the pages of the bar exam.

            I have been haunted since the bar exam by a nagging question: What was the point of the exam?   I had spent roughly $1400 in application fees and bar review courses and who knows how many hours in preparation for the exam. In addition, since I was teaching a class at the time, I no doubt traumatized my students as well. While I knew the chances of failing the exam were slim, given the 93% pass rate, I did not want to be in the minority that did not pass.   So, I spent a great deal of my few remaining days of freedom studying for an exam whose purpose was elusive to me.

            After answering the first essay exam question (the UCC one posed above), I had concluded that the bar exam’s purpose was to teach young lawyers to violate ethical standards, skimp on research, and give bright-line answers to questions that may have no bright line rules. Clearly, this was not the intended goal of the bar exam. But, then, what is the goal?

            I submit that the Bar Exam, as currently formulated, has no clear goal. Alternatively, if there is a clear goal that I am missing, then the goal is probably redundant to goals supposedly achieved in law school. Insofar as the exam adds nothing new to the formula, it should either be waived for law students who have demonstrated their competence in law school or it should be changed so that it fulfills a more useful, non-redundant purpose. As an added bonus, law students would save money by not having to invest in bar preparatory courses that instruct them on how to take an exam that evaluates useless or redundant standards. 

 Possible Goals of the Bar Exam

            I preliminary question must be: What are the goals of the bar exam?   I submit four alternatives: (1) to test the student’s ability to spot issues, thus getting the student to think like a lawyer; (2) to test the student’s knowledge of basic law, including areas in which the student will never practice; (3) to increase the Bar’s coffers through bar application fees, and; (4) to restrict the number of lawyers and thus raise the wage level of attorneys in Utah.     

            The fourth possible goal is the easiest to eliminate in the case of states like Texas and Utah.   Utah consistently has a pass rate above 80%, with Texas fairly close behind at 76%. Obviously, not many people are being eliminated from the market of attorneys able to practice in those states. Although I have no support for this, I suspect that those that do not pass may have not passed because they were having more pressing life issues at the time— not because they are incompetent. Nonetheless, a 20% fail rate is low.   Thus, if the goal is anticompetitive, the Utah and Texas Bars are amazingly incompetent monopolists.   In contrast, California and Puerto Rico are more successful at erecting barriers to entry, each having pass rates of less than 50%.

            Similarly, the bar application fee does not appear to be a valid reason for the bar exam. After all, administering an exam is a costly process, forcing admissions personnel to take time out of their lives to: (1) escort test takers to the bathroom so the test takers don’t collude and (2) walk up and down the examination room to increase the anxiety of already nervous test takers. Paying attorneys to read the examinations is also a costly proposition.   Clearly, a better alternative would be to require “initial” members to pay a $400 fee, and the fee would decrease after the first year.   The fees would be more valuable because the costs of the fees (the bar exam) would be eliminated.   Thus, fee acquisition does not appear to be a legitimate goal of the bar exam.

            Perhaps a more compelling argument is that the Bar Exam tests whether students are capable of thinking like lawyers, spotting issues and providing legal analysis of those issues based on the facts, the law, and the policies and implications of the combination. This would be a compelling argument were it not for the fact that most bar applicants just spent three years practicing these same skills.   What law student has not been asked: “What is the issue?,” either in a class or on an exam?   If students cannot spot issues and write essay exam answers by the time they take the bar exam, how on earth did they pass their classes?

            One possible answer is grade inflation. Because grade distributions are posted by professor, professors have an incentive not to fail people.   If a professor failed students, the following class of students would be less likely to take that professor’s courses. The implication would be that the professors who fail students would eventually end up with class rosters of zero students, thus eliminating classes that the professor wished to teach.   Moreover, no law student is going to tolerate a failing grade (because all law students are clearly above average and thus deserve grades no lower than an A-), and will thus challenge the professor.   No professor needs the abuse, and a safer route would be to give the student a stern warning of the student’s lack of performance: Namely, a B+.   The alternative, failing students, would cause many a law professor to be without congregations of students to whom they could preach, and tensions on law school faculties would rise as colleagues burst into each other’s offices and shouted, “what is the issue?”

            An alternative answer is one I think the Bar would support: Namely, that certain Texas schools are of such good quality that most students from those schools can issue spot and write effective essay exam answers.   If true, this would, by implication, mean that the people who do not pass are not from these Texas schools.   But this does not support the need for a bar exam: It supports the argument that there should be no bar exam (at least for students hailing from Texas law schools).   In other words, because Texas law students are quality “outputs”, they should be exempted from taking the Texas Bar, much like Wisconsin students are quality “outputs” and are thus exempted from taking the Wisconsin Bar. Non Texas applicants could take a bar exam to insure that they are able to spot issues and write essays.

            However, the Wisconsin model presents some questions. First, what about reciprosity between states? If Texas does not have a Bar exam, then how are Texas students going to waive in to DC? I suspect that this is not an issue for the majority of Texas students. I would suspect that most Texas graduates remain in Texas.   Those that do not could always take the bar exam along with the non- Texas applicants.   But, if we believe that the bar exam serves some purpose, then we should not do away with it all together. Thus, we must look for another answer. 

            A final possible reason to have a bar exam is to test the applicants’ knowledge of basic law. Students in Texas get tested on approximately twenty-three different subject categories. Why stop there? Texas could have easily added Antitrust Law, Intellectual Property, Immigration Law, Labor Law, and so on.    It seems arbitrary to add some topics and not others.   You could argue of course, that certain classes have universal practicality: Evidence, for example.    But this clearly is not true for family law, unless perhaps Texas lawyers have higher divorce rates than lawyers in other states and need to be prepared. While there may be many useful concepts learned in a course in family law, it does seem arbitrary to place that subject on the bar exam while excluding others.

            The topics listed on the bar exam caused many students to only take courses which are covered on the exam. As a law student, I would many times ask my fellow students why they did not take course X, in which they were very interested.   The answer was inevitably “the Bar,” and the need to have a background in one of the covered topics. Alternatively, many rebels only took course which seemed interesting, or took courses from professors who had actual teaching skills, or some combination of the two. These students sometimes paid dearly in the summer, as they would be forced to watch a paid BarBri lecturer from a law school which they did not attend outline the basics of the courses they did not take in law school. A more efficient method of accomplishing the same goal would be to require students to take law school classes in whatever the Bar wanted the students to study without forcing them to take an expensive review course in preparation for a needless examination.   Eighteen weeks of class would provide a more in-depth examination of the topic than one day in Bar-Bri. And it would cost less.   The drawback would be that students would be unable to take the courses in which they are interested, which would make the second and third years of law school much like the first. It would also dramatically impinge upon the academic freedom of the professor conducting the course, and foreclose opportunities for students who choose not to practice in areas tested on the bar exam.

            Thus far I have only addressed the essay exam. But what about the multiple choice portion of the exam?   Clearly, one has to spot the relevant issues and know the relevant law in order to distinguish between answer “D” and answer “C”. But how often are issues so clearly articulated in reality? Moreover, how often in reality would a new attorney be required to give a “yes” or “no” or some other finite, discrete set of possibilities off the top of her head? In addition, given the pervasiveness of bar review courses which guide students as to the pitfalls of various examiners’ trickery, the multiple choice portion fails to test anything other than how well BarBri prepared the student.

            I may have overlooked some other, more noble goal. Perhaps the Bar Exam is a character building exercise to determine how students react under pressure.   I can answer that quite simply: Whenever I was faced with time pressure on the muti-state portion of the exam, I chose “B.” I figured I would get 20% of the guesses correct, assuming a random distribution of answers.   I have been unable to transfer this skill into my work at the Justice Department because I was never asked a multiple choice question.   I suspect that the Bar Exam is equally poor at determining how other applicants react to time pressure. 

  A More Useful Exam

           Given the current exam’s inability to test the applicant’s skills as a budding attorney, the logical question is how to create a more useful examination. Alternatively, perhaps we should rid ourselves of the exam altogether.

            Again, eliminating the exam is not necessarily a bad idea: Most Texas bar applicants are Texas law school graduates wishing to stay within the state.   Given the outstanding quality of Texas law schools, it may be wasteful to administer an exam.   Thus, a model such as Wisconsin’s seems efficient in the case of Texas.

            Another alternative is a one day “performance” based test. Many states have implemented performance tests as an addendum to the essay and the multistate exam.   The performance exam as currently rendered consists of one or two 90 minute “skills” questions. Each applicant receives a case file and a library, and is assigned a task and must apply the research provided to them to perform the task.   But the performance test is given after two days of “essay” writing and multiple choice.   Since these two elements appear to be pointless, a more efficient exam could be administered.

            I propose a one day, six hour performance examination.   The applicants could be given two “cases”, complete with legal research (some of which would be useless while other portions applicable), a set of relevant facts, and a laptop in order to answer the question in legible font. The applicants could be given three hours per case.   This would allow for more reasoned and thorough answers to determine the applicant’s ability to analyze facts and the law. This should be sufficient to determine whether the student is a good candidate for admission and should be permitted to take the vows in the priesthood, clergy or ministry of the legal profession. At the end of the examination, each student would receive a reprimand from his or her imaginary firm, stating that the student is not generating sufficient billables. I can think of no exam that could be more realistic.

            But even this drastic proposal has one flaw: It fails to take the BarBri factor out of the equation.   For those you who have not taken a bar exam in a while, BarBri is the leading bar preparation course.   In every state, BarBri has former law students taking bar exams, memorizing questions, and then submitting the information to BarBri for compilation.   BarBri knows what each state likes to test on, and structures its lectures accordingly.   Most students sign up for BarBri, and each pays $2495 for the honor of sitting and listening to several law professors lecture on topics on which they have been paid to lecture.   It is not unlike law school, except that the BarBri professors are often videotape. Many may no longer be with us in this life. Moreover, BarBri provides schedules to follow, tests to take, and other forms of preparation.   BarBri is thus ever-present for most first-time examination takers. As the student representative will tell you your first year of law school, you are “so screwed” without BarBri. That’ll be $2495, please.

            However, it would be hard for one to imagine how BarBri might prepare students for the performance test, especially if the substantive law changes consistently and randomly from year to year.   Topics could be on any facet of law, since the only guiding force for the students would be the cases provided in their case files: Anything from Antitrust to Maritime law to Intellectual property could be asked. This would prevent BarBri from preparing the student in any way, except possibly that BarBri might teach the student how to write a memo.   If the student did not learn that skill in law school, then she deserves to pay BarBri $2495 for the learning experience. Still, the performance test does not eliminate many of the administrative costs of the exam. Moreover, many students, out of fear, would continue to pay BarBri just to relearn how to write a memo the “BarBri” way.  

            A final alternative could be a return to the articling process.   In the days of yesteryear, depending upon how far back one goes, budding lawyers studied for a year or more under the supervision of a more experienced attorney either just after leaving the farm, high school, college, or after graduating from a law school.   These more experienced attorneys would work closely with the new lawyer, and would determine the new lawyer’s competency to practice law after a year.   This articling method could work in Texas as well.   New attorneys could apprentice either as a clerk for a judge, an associate in a law firm, or even in a government position. Their immediate supervisor(s) would write a letter to the Bar at the end of the year, commenting on the applicant’s ability to practice law.  

            There are two problems with this method, however. First, the articling system could be abused by senior attorneys, who could use it to force the candidate to be a slave with the explicit sanction of the bar (rather than do so implicitly by the present practice of imposing slavery by the device of calling the candidate an “associate”). Moreover, the training is likely to range from outstanding to wholly inadequate, or the useless by using the candidate as a runner for the supervising attorney or as office help in operating the copying machines, keeping the office clean and making sure the coffee is hot.   There is even the risk that the candidate might be called an “intern,” and we all know what can happen to and by persons called interns. While a complaint process might be established to curb abuse and maintain some minimal level of competence of those who would train the young, the hassle of the bar doing so may be more than it is worth.

            A second concern is that articling could result in a law firm not adequately training the candidate or simply passing along the incompetent to prey upon the public. It may be too much trouble to provide adequate training or to insure the less than competent do not become members of the legal profession. While the firm will likely not employ the unworthy candidate after the period of articling, some poor member of the public may well employ the candidate to their regret. On the other hand, the truly creative and independent candidate might find themselves at odds with the firm where they spend their year of servitude. Such a circumstance might deprive the public of a lawyer who will make a difference because the establishment does not often appreciate those who do make a difference.

 Towards a more sane approach

            The bar exam, in its current formulation, does little to determine whether the bar applicant is competent as an attorney.   Instead, the bar exam fills the coffers of bar review course and unnecessarily inflicts emotional and financial distress on the applicants. 

            It is no answer to say that we have always done it this way (we haven’t) or that since we had to go through it, why shouldn’t the new applicants?   Applicants shouldn’t be forced to endure the same pointless process as those endured by graduate students, pledges to fraternities, and new members of athletic teams. 

            Instead, the bar examination should fulfill some important purpose. Namely, it should determine which applicants are competent in the practice of law, and which are not.   Given the unrealistic nature of the current examination, it cannot possibly fulfill that purpose.   A performance exam without the useless essay and multiple choice portions of the bar exam would be a better, more efficient screening device.   Failing that, an articling process might serve the same purpose, determining whether an applicant, after working in the “real world” for a while, is competent in the practice of law.   If none of these approaches are appealing, then perhaps the bar exam should be banished from Texas for applicants hailing from Texas schools. We could presume that Texas applicants are competent and save the students thousands of dollars each in bar review courses.   This would allow BarBri employees to find more useful work other than the taking of bar examinations and reduce the excessive levels of anxiety and monetary costs to applicants forced to watched videotaped lectures from professors both living and dead.

           (fyi: a footnoted version of this opinion editorial, which I authored in 1998, will be supplied upon request.  -DB) 

I don’t like cartels because they pervert the marketplace not only in terms of price signals and irrational investment, but also because they tend to kill innovation.   Someone asked me why antitrust laws are harsher against cartels than monopolies. Monopolies may have other reasons for their existence (superior business acumen, innovation, etc.), but cartels do not possess any purpose but to raise price and restrict output.   Note that Saudi Arabia is concerned about oil prices NOT because it is worried about our economic health, but because the price is clearly over the monopoly price and THAT is causing serious substitution away to other alternatives (of which environmentalists would approve).   In other words, the Saudis are worried that overcharging will lead to long term substitution away from petroleum, which is not in its interests.

While I’d be fine with naturally high oil prices (such that innovation would invest in environmentally friendly technologies), any investment now is under a huge cloud of uncertainty. Will OPEC increase production? What will happen with speculation (which by all accounts has been causing serious manipulation of oil prices)? In other words, we are not talking about a real market, mostly due to the existence of a cartel and what is taking place in the commodities markets.

 As a practical matter, there are obvious hurdles. Clearly there would be extreme reluctance on the part of any Assistant Attorney General to take such a bold step. The White House would not look appreciatively at such a suit, as it would require some serious collaborate efforts by other countries to support such a suit, at least politically. 

In addition, there are the issues involved in whether or not OPEC member countries would withdraw capital from the U.S. or any EU states deciding to bring an antitrust action against OPEC members. At the very least, it could spark threats of economic retaliation and other repercussions. 

And, of course, the oil prices are not only OPEC’s doing. We have serious problems with oil speculation, and Congress is considering legislation to boost margin requirements. Refining capacity is perking up, based in part on projections that there is a 100% probability of oil prices greater than $60 barrel for just about forever. Oh, and then there’s our action in Iraq, which has caused serious volatility in the market.

As far as I’m concerned, however, cartels are evil. No exceptions. And it does not bother me that the cartel is run by foreign countries. I would love to see what kind of interesting discovery would occur if U.S. antitrust enforcement officials investigated OPEC and after the raiding of state oil company offices by European officials. 

 While we are at it, we could investigate whether U.S. oil companies are sharing in the monopoly rents. While Exxon and other companies are making record profits, I suspect that a lot of their revenues are likely concealed through exorbitant salaries and inefficient capital investment.   Or at least that is how it works in seriously concentrated industries. 

International cartels do untold damage because they are not deterred. They are not deterred because they are subject to a variety of immunities, such as the Act of State Doctrine. And, until recently, no country in the world subjects cartels to treble damages. And until recently, only the U.S. has offered hard prison time for cartel members. Thus, the rewards always exceed the risks by orders of magnitude. See John M. Connor and Darren Bush, How to Block Cartel Formation and Price Fixing: Using Extraterritorial Application of the Antitrust Laws as a Deterrence Mechanism, 112 Penn St. L. Rev. 813 (2008). 

Of course, none of these thoughts would have fit into the op-ed.

Even before the 324-84 House vote last month, President Bush pledged a veto, saying OPEC might retaliate against U.S. interests overseas or cut oil production further. But he didn't have to make good on that promise. Senate Republicans held the line for him, last week threatening a filibuster that Democrats couldn't break. That effectively killed the bill and, for now, any hope that the United States would finally start treating oil the same way it does computer chips, vitamins, rubber and all other products.

OPEC may call itself an "organization," but everyone knows that it is, pure and simple, a cartel that manipulates markets, restricts output and fixes prices. The United States and the European Union have vigorously prosecuted other multinational cartels for doing the same thing in the vitamin, lysine, computer chip and elevator/escalator markets. Swiss healthcare company F. Hoffmann-La Roche, for instance, paid a $500-million fine to the U.S. in 1999 for its part in a years-long scheme to raise prices on vitamin products. Just last year, British Airways and Korean Air each paid a $300-million fine to the U.S. for fixing international cargo rates.

But when it comes to oil, the U.S. gets squeamish. For nearly 50 years, the members of OPEC have openly operated as a cartel. OPEC's statutory provisions even state that its mission is "the coordination and unification of the petroleum policies of member countries and the determination of the best means for safeguarding their interests, individually and collectively."

The cartel's economic effect on the U.S. has been devastating, dating from the oil embargo in the 1970s, which led to the first U.S. fuel shortage since World War II, to today's unstoppable escalation of pump prices. Just in the last three years, crude prices rose from $54 to nearly $140 a barrel -- which means U.S. spending on imported oil has gone from about $185 billion a year to an expected $440 billion this year. Much of that excess is winding up in the pockets of OPEC members, increasing their global economic and political power.

High gas prices have now gone from consumer irritation to a serious threat to our national economic health. Our antitrust laws are tailor-made to help out in such a crisis.

OPEC is clearly a "combination or conspiracy" that restrains trade in violation of the Sherman Act. Unfortunately, over the years, courts have made it nearly impossible to use the act against OPEC, whose members claim they are sovereign nations and thus immune from such prosecution. But OPEC's behavior is commercial, not governmental or diplomatic. It is perfectly appropriate for Congress to remove these legal obstacles. Foreign businesses and individuals have long been subject to U.S. antitrust laws -- even for conduct overseas, if it has substantial effect on commerce here. So should OPEC.

Imagine suing OPEC members for the amount they overcharged for petroleum products the U.S. government purchased. Then triple that amount -- for that is what can be awarded to consumers injured by cartel activity. Imagine the seizure of OPEC assets to pay this award, such as Venezuelan government-owned Citgo headquarters in Houston or Saudi Arabia's Aramco assets in New York.

Imagine criminal charges filed against key cartel individuals when they come to the U.S. And imagine Justice Department officials compelling OPEC and its co-conspirators to disclose documents that might bring to light exactly how this cartel has functioned. Might this information show a relationship between OPEC and U.S. oil companies?

If we are afraid of OPEC, remember that our decades of putting up with this cartel have done nothing to reduce oil prices.

The bill Congress proposed was actually somewhat cautious. It didn't allow private suits for damages but gave enforcement jurisdiction exclusively to the Justice Department. Under the Bush administration, the attorney general seems unlikely to have used this authority anyway, but all that could change come January, when a new president and new Congress get to work. Job One for them should be to look past the fear-mongering rhetoric and enact this important piece of legislation.

At the very least, passage of this bill would send this loud and clear message to OPEC: Competition -- the basis of free enterprise and economic organization throughout most of the world -- ought to be the norm for producing oil just as it is for producing anything else.

Of course the DOJ had clients.  We called them “the people.”

But to the extent that Stracher is correct and that we in the academy are somehow behaving badly, perhaps the blame should not lie within just academe.  Maybe the blame lies with the Bar.  The articling system could be viewed as a barrier to entry.  So, too, can the bar.  It serves no practical purpose, except to teach one how to commit malpractice (e.g., I can’t consult the statute in a UCC question, so I’ll tell you what I think the law is.)  So we perhaps teach the law and the intellectual issues to a greater degree because the Bar tells us to do so (although I have the luxury of not teaching a single bar course).  Erecting the entry barrier and then shoving students through it serves as a powerful signal as to what the Bar views as important.  Thus, if the Bar values things such as an understanding of economics and client relations, it has a lousy way of showing it.

Despite Bar protestations to the contrary, another issue is that realms of law are highly specialized.  It would be impossible for a law school to provide on the job training that would prepare students for all possible realms of practice.  Thus, we are back bellying up to the Bar, who are not inclined to supervise every law student we have. 

Also, take note of law firm hiring practices.  The top law firms boast of hiring the top 10%, regardless of course selection.  They value law review over clinics and clerkships over other experiences.  The people who pay the overhead for this place, the students, read that signal loud and clear, and yet we are to blame for the output.  I believe ours is a derived demand, a function of the signals that the Bar sends to our students. 

In short (a good closing after a long soliloquy), I reject this notion that there is a distinction between the intellect and the practical.  And to the extent that lawyers are frustrated with what we are doing with our students given limited resources, they need to look no further than to themselves for the answer. 

Best, Darren

With respect to the proposal of postgraduate work (also known as the articling process), in the daze of my youth I wrote a piece entitled “why have a bar exam?” calling for the abolishment of the bar exam.  For some reason the Utah Bar J. refused to publish it.  One proposal I considered was the articling process.  This is what I wrote:

            A final alternative [to the bar exam, which I advocate abolishing] could be a return to the articling process.   In the days of yesteryear, depending upon how far back one goes, budding lawyers studied for a year or more under the supervision of a more experienced attorney either just after leaving the farm, high school, college, or after graduating from a law school.   These more experienced attorneys would work closely with the new lawyer, and would determine the new lawyer’s competency to practice law after a year.   This articling method could work in Utah as well.   New attorneys could apprentice either as a clerk for a judge, an associate in a law firm, or even in a government position.  Their immediate supervisor(s) would write a letter to the Bar at the end of the year, commenting on the applicant’s ability to practice law.  

            There are two problems with this method, however.  First, the articling system could be abused by senior attorneys, who could use it to force the candidate to be an indentured servant with the explicit sanction of the bar (rather than do so implicitly by the present practice of imposing indentured servitude by the device of calling the candidate an “associate”).  Moreover, the training is likely to range from outstanding to wholly inadequate, or the useless by using the candidate as a runner for the supervising attorney or as office help in operating the copying machines, keeping the office clean and making sure the coffee is hot.   There is even the risk that the candidate might be called an “intern,” and we all know what can happen to and by persons called interns.  While a complaint process might be established to curb abuse and maintain some minimal level of competence of those who would train the young, the hassle of the bar doing so may be more than it is worth.

            A second concern is that articling could result in a law firm not adequately training the candidate or simply passing along the incompetent to prey upon the public.  It may be too much trouble to provide adequate training or to insure the less than competent do not become members of the legal profession.  While the firm will likely not employ the unworthy candidate after the period of articling, some poor member of the public may well employ the candidate to their regret.  On the other hand, the truly creative and independent candidate might find themselves at odds with the firm where they spend their year of servitude.  Such a circumstance might deprive the public of a lawyer who will make a difference because the establishment does not often appreciate those who do make a difference.

The Honorable Arlen Specter, Chairman

Committee on the Judiciary

United States Senate

711 Hart Building

Washington, DC 20510

The Honorable Patrick J. Leahy,

Ranking Member

Committee on the Judiciary

United States Senate

433 Russell Senate Office Bldg.

Washington, DC 20510

The Honorable F. James Sensenbrenner, Jr., Chairman

Committee on the Judiciary

United States House of Representatives

2449 Rayburn House Office Building

Washington, DC 20515

The Honorable John Conyers, Jr, Ranking Member

Committee on the Judiciary

United States House of Representatives

2426 Rayburn House Office Building

Washington, DC 20515

Dear Honorable Sirs:

I am writing in response to a letter issued to your respective offices dated September 8,

2006. The letter (hereafter D/FW response letter)(1), signed by well-respected attorneys in

the law offices of Hogan & Hartson, LLP and Vinson & Elkins, LLP, attempts to address

issues that were raised in a letter submitted by myself and other antitrust law professors

to you on August 29, 2006 (“Antitrust Professors’ letter). Unfortunately, the DFW

response letter fails to address few if any of our substantive issues.

With respect to the competition issues, the D/FW response letter is mistaken in its

characterization of our positions in the Antitrust Professors’ letter. First, the D/FW

response letter states that through-ticketing will create a “Southwest effect” in Love

Field. The Antitrust Professors’ letter stated clearly that the “only procompetitive

benefits stem from the relaxation of through-ticketing restrictions in the short run and the

complete elimination of the Wright Amendment in the long term.” In short, we already

acknowledged that fact, although one question that ought to be raised is whether there are

less restrictive alternatives to achieve the benefits of through-ticketing as well as other

potential benefits. For example, the competitive benefits of through-ticketing will likely

be reduced given the reduction in gates that will limit the expansion capability of

Southwest at Love Field. In other words, the disciplinary effect of the “Southwest effect”

will be hampered to some degree. Thus, one less restrictive alternative would be to

eliminate the gate restriction provision in the proposed legislation. The D/FW response

letter does not address this issue.

Moreover, the extent of the “Southwest effect” could depend crucially on whether new

entrants can initiate service at Love Field. As discussed in the Antitrust Professors’

letter, “such additional service, likely provided by a low cost carrier (LCC), would

potentially have the effect of reducing fares while expanding service options for

passengers flying to and from the DFW metropolitan area.”(2) Indeed, Pinnacle Airlines

found the status quo sufficiently attractive to start entering before the Compromise was

made public.

Second, the D/FW response letter mentions that the Antitrust Professors’ letter is “simply

wrong” about the ability of the incumbent carriers at Love Field to blockade entry.

Clearly, the agreement essentially provides for the restriction of entry before the

termination of the Wright Amendment. Post-Wright, the restrictions as to gates and the

like do not go away. Moreover, insofar as the proposed legislation confers power upon

the parties to implement the legislation, there is likely an issue of implied immunity.

This latter issue is also addressed in detail in the Antitrust Professors’ letter.

The Antitrust Professors’ letter also mentioned that competition in the offering of air

passenger service on a particular route has some degree of time-sensitivity. For example,

suppose Southwest offers flights on a particular route at 9 a.m., 1 p.m., and 4 p.m.

Suppose further that these are the optimal times for business travelers. Southwest’s use of

gates at these optimal times may preclude competitors from offering services at those

times regardless of the Love Field Master plan. Nothing in the Master Plan appears to

address that issue. Additionally, the D/FW response letter suggests DFW is a substitute

airport to Love Field in terms of potential entry. This is also an issue we addressed in our

letter where we note that Love Field’s location perhaps makes it a superior choice to

business travelers located in Dallas.

Third, the D/FW response letter’s characterization of the Noerr-Pennington doctrine is

not compelling.(3) While I do not wish to delve into a determination of whether the

negotiation of the agreement is exempt from antitrust scrutiny under Noerr, I do wish to

note that the Noerr exemption would depend largely upon how the agreement is

characterized. If the agreement goes beyond the petitioning of Congress, Noerr may not

apply.

The D/FW response letter also mentions state action doctrine as an exemption implicated

by the proposed legislation.(4) I am skeptical as to the application of that doctrine to

federal law given that state action doctrine is a principle of federalism. I am, of course,

cognizant of the implied immunity and primary jurisdiction issues inherent in the

promulgation of federal legislation. In fact, the Antitrust Professors’ letter raises these

issues in great detail with respect to the Love Field agreement.

Apart from the D/FW response letter’s challenge to our antitrust analysis, I wish to

emphasize other components of the D/FW response letter that are troubling. First, the

D/FW response letter acknowledges that outright repeal of the Wright Amendment could

confer competitive benefits. However, the D/FW response letter notes that one must

consider the environmental effects of the agreement, and other costs and benefits that are

unrelated to competition.

In part, I agree with this approach, as I am on record as noting that Congress should

weigh the costs and benefits of any proposed legislation.(5) However, the weighing of

costs and benefits is not done in a vacuum. Instead, less restrictive alternatives should be

considered. In other words, if it is possible to achieve the same positive effects with

fewer costs, then this less restrictive alternative might be a better solution than the one

originally proposed.

For example, one of the arguments weighing in favor of the destruction of gates and

restriction of competition at Love Field relates to noise pollution. Certainly, having

fewer flights and fewer gates at Love Field will reduce noise, post termination of the

Wright Amendment. However, there are less restrictive alternatives to this approach.

There are a variety of measures that could mitigate noise pollution associated with airport

growth, such as noise limitations, restrictions on plane size, or the imposition of fines and

fees. Noise pollution is also a function of the type of aircraft flying into Love Field. The

newer, quieter passenger jets that would be utilized in an expanded Southwest presence

and by new entrants create less noise and pollution that most of the cargo jets (typically

older aircraft like DC-10s) that currently utilize Love Field.(6)

Second, the agreement is portrayed as a compromise between warring factions. That may

be the case, but other stakeholders are implicated here who are not part of this agreement,

have had no say in this agreement, and who are injured by this agreement. Specifically,

this agreement implicates competition beyond the reaches of the state of Texas. As the

Antitrust Professors’ letter stated, “Any passenger seeking to fly to the DFW area or

through the DFW area from a city outside the Wright Amendment territory is affected by

the Wright Amendment restriction.” In short, this is an issue of interstate commerce, with

effects outside the state of Texas. It is not just a local issue between two airlines and two

cities.

The debate fostered by the Antitrust Professors’ letter and the D/FW response letter

suggests need for Congress to approach the proposed legislation restricting competition at

Love Field with care. The D/FW response letter fails to address any of the concerns

raised in our initial letter. Thus, I can only conclude my letter as I did the previous one:

Namely, the “proposed agreement and legislation confers few, if any benefits to

consumers, while producing significant anticompetitive effects. In particular, the

agreement as structured would nullify any procompetitive effect arising from the

elimination of the Wright Amendment. In particular, it would likely cause a reduction in

service, an increase in fares, and the eradication of any potential competition in the

provision of air passenger service to and from the DFW metropolitan area. It should,

therefore, not be blessed with any sort of antitrust immunity, express or implied. Instead,

the least restrictive alternative (and the one conferring the most consumer benefit) is the

eradication of the Wright Amendment without the underlying proposed agreement.”

Very truly yours,

Darren Bush

Assistant Professor of Law

University of Houston Law Center

Notes:

1

According to the Dallas Morning News, the law firm of Hogan & Hartson represents D/FW while Vinson

& Elkins represents the City of Dallas and Southwest Airlines. See Sudeep Reddy and Robert Dodge,

Texans Working Overtime on Wright, available at http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/091306dnbuswright.273d53b.html.

See also Maria Recio, Panel Plans Wright Vote, available at

http://www.dfw.com/mld/dfw/business/15507201.htm. (“A day before the letter was sent, Hogan

& Hartson got a 10 percent, or $2,000 per month, boost in pay and half-year extension from D/FW.”) If true,

this information was not disclosed in the letter. In fairness, I disclose that I do not represent anyone in the

matter of the Wright Amendment repeal and the Love Field Agreement. I am thus speaking solely on my

own behalf as a scholar of antitrust law & economics and airline deregulation.

2

A memo from the DOJ on the Love Field agreement accurately makes this claim. See also Entry and

Competition in the U.S. Airline Industry: Issues and Opportunities, Transportation Research Board, Special

Report 255, (1999), p. 52.

3

See Eastern R.R. Presidents Conference v. Noerr Motor Freight, 365 U.S. 127 (1961). Noerr held that the

exercising of the right of association for the political purpose of influencing legislation is immune from

Sherman Act challenge. However, “[t]here may be situations in which a publicity campaign, ostensibly

directed toward influencing governmental action is a mere sham to cover what is actually nothing more

than an attempt to interfere directly with the business relationships of a competitor." 365 U.S. at 144.

4

See Parker v. Brown, 317 U.S. 341 (1943); see also F.T.C. v. Ticor Title Ins. Co., 504 U.S. 621, 632-633

(1992)(Noting that in Parker, the Supreme Court “announced the doctrine that federal antitrust laws are

subject to supersession by state regulatory programs. Our decision was grounded in principles of

federalism.”)

5

See Darren Bush, Gregory K. Leonard, and Stephen Ross, A Framework for Policymakers to Analyze

Proposed and Existing Antitrust Immunities and Exemptions: Report Prepared by Consultants to the

Antitrust Modernization Commission, available at

http://www.amc.gov/commission_hearings/pdf/IE_Framework_Overview_Report.pdf.

6

See Eric Torbenson and Suzanne Marta, Who’s Making Noise at Love?, available at

http://www.dallasnews.com/sharedcontent/dws/bus/wright/stories/050306dnbusnoise.2c41a23.html.