It’s no secret to those of us who’ve been defending antitrust cases for a number of years that economic expert witnesses are a more important part of the defense team than ever before. Triers of fact often must evaluate complex economic analyses of the competitive effect of sophisticated business strategies. According to Judge Richard Posner of the Seventh Circuit — an antitrust expert — the task facing the average judge or juror is overwhelming:
Econometrics is such a difficult subject that it is unrealistic to expect the average judge or juror to be able to understand all the criticisms of an econometric study, no matter how skillful the econometrician is in explaining the study to a lay audience.
So what effect does economic complexity have on the likelihood that an antitrust case will be appealed? Is the judge’s decision more likely not to be appealed — or to be affirmed if it is appealed — if the judge has at least basic training in antitrust economics? Until recently, there was no empirical evidence on these important questions.
Two antitrust scholars, Professor Joshua Wright and Professor Michael Baye, have filled that gap in an important new study, Is Antitrust Too Complicated for Generalist Judges? The Impact of Economic Complexity & Judicial Training on Appeals, which will appear in an upcoming issue of the Journal of Law & Economics. Professor Wright is an Assistant Professor of Law at George Mason University’s School of Law, and Professor Baye holds professorships in Business, and in Business Economics and Public Policy at Indiana University’s Kelley School of Business. The professors’ study has been discussed in Core Economics, the Antitrust and Competition Policy Blog, Legal Theory Blog, and most recently, Business Wire. Professor Wright has been blogging the study for some time as it came together on his antitrust blog, Truth on the Market, here, here, and here.
The study is more than worth a complete read, but here’s a summary. The professors collected every published decision involving the merits of an antitrust claim between 1996 and 2006 — 714 decisions, including both district judges and administrative law judges. The researchers coded the cases by type of claim, as well as collecting data on the education and experience of the judges involved. Next, the professors searched for certain terms in the decisions in order to separate cases involving factually complex economic testimony from factually simpler cases. Finally, the study identified judges who had attended basic economic training classes at the George Mason University Law and Economics Center.
Professors Wright and Baye concluded that in cases not involving complex econometric data, the decisions of judges who had attended economic training programs were significantly less likely to be appealed, and less likely — when they were appealed — to be reversed. Interestingly, previous experience deciding antitrust cases was not an adequate substitute for economics training when it came to improving judicial decision-making. Responding to criticism that economics education programs for judges were biased towards politically conservative, free-market based economic theories, the researchers concluded that "trained" judges’ decisions performed equally well whether the judge was a Democratic or Republican President’s nominee.
Like most good research, the study suggests a number of follow-up questions – join me below the jump to see what some of those are.
First, the professors conclude that a party’s perception of the chance of proving error, and the monetary stakes involved, are the primary motivators of appeal. However, separately analyzing civil and criminal cases might prove enlightening.
Second, although the study notes that data on trial judges’ post-graduate educational experience was collected, the study doesn’t seem to answer the question of whether a judge’s undergraduate or post-graduate study of economics has an even stronger correlation with non-appeal and/or affirmance on appeal than judicial economics training classes.
Third, the professors noted that because appellate panels involve "multiple decision-makers, each with potentially different political ideologies and economic training," it was difficult to control for the characteristics of individual appellate judges in analyzing the performance of district judges’ decisions on appeal. Given the considerable literature on appellate decision-making, this represents a potentially fertile ground for extending the study’s conclusions. What effect do appellate judges with an economics background have on antitrust appeals?
Finally, the study’s conclusions are based solely on the complexity of factual economic data — not on the simplicity or complexity of the legal issues involved. It would shed important light on the study’s conclusions to analyze whether particular appeals in the study’s database turned on factual issues and deferential standards of review, or on predominantly legal issues reviewed by appellate courts de novo.
Professors Wright and Baye are to be commended for a major contribution to understanding trial court and appellate decision-making in antitrust law.
