A WSJ editorial takes note of the concurrence in the 7-1 Credit Suisse First Boston v. Billing decision yesterday: "After the initial purchase, the prices of newly issued stocks or bonds are determined by competition among the vast multitude of other securities traded in a free market," Justice Stevens wrote. "To suggest that an underwriting syndicate can restrain trade in that market by manipulating the terms of IPOs is frivolous." [Legal Times; WSJ; SCOTUSblog analysis and roundup]
But I was more impressed with Justice Breyer's point, which tracks points made in Judge Easterbrook's classic law review article The Limits of Antitrust:
"Antitrust plaintiffs may bring lawsuits throughout the Nation in dozens of different courts with different nonexpert judges and different nonexpert juries...[T]here is no practical way to confine antitrust suits so that they challenge only activity of the kind the investors seek to target, activity that is presently unlawful and will likely remain unlawful under the securities law. Rather, these factors suggest that antitrust courts are likely to make unusually serious mistakes in this respect."
This point should hardly be confined to the interrelationship between antitrust and securities regulation, however. Courts are poorly situated to decide a wide variety of matters on which they pass judgment: appropriate automobile design, warnings on drug labels and other drug-safety issues, the standard of care in medicinal judgment calls, among other matters where courts have shown a disturbing propensity to make expensive mistakes. The judicial modesty shown by the court in Billing after decades of judicial aggrandizement is pleasantly surprising—and one hopes the same modesty is shown elsewhere in the legal system.