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The Rule of Reason

Friday, May 30, 2003 :::

The Culture: Reading between the lines of the Jessica Lynch story

I just don't get it. It is a well know fact that US prisoners of war in Iraq prior to Saddam's fall were not treated with kid gloves. Beatings were standard fare. The tenets of the Geneva convention were all but ignored. Yet joining the reflexively leftist BBC, the AP now reports that Army Pfc. Jessica Lynch captors would have been just fine had her rescuers been unarmed and attempted to rescue her in broad daylight.

You know what--warfare is all about overwhelming force. You bring as much force to bear on a target as you can, to insure that victory is academic. Had Pfc. Lynch's rescuers been unprepared for whatever contingency they might have faced, there would be howling over the needless casualties to save one soldier.

Besides, in all the coverage, I never heard any claim that there was significant resistance to the rescue operation. By my military background, the operation was a textbook POW rescue operation. I say the criticism of the Pfc. Lynch rescuers is just "feet of clay," nothing more an attempt to smear a successful mission for the simple fact that it was successful, and the people back home were inspired by it.

Cheap.

::: posted by Nicholas Provenzo at 11:38 AM | link | donate |
 

Thursday, May 29, 2003 :::

The Culture: Moore Website Hacked

Dumb Celebs reports that big lefty Michael Moore's website was hacked earlier this week by opponents of his so-called documentary "Bowling for Columbine."

I do not condone hacking, but Micheal Moore is as much a fraud as his so-called documentary. What I think Moore really deserves is a documentary on him. Heck, I'd pay money to see that.

::: posted by Nicholas Provenzo at 11:39 PM | link | donate |
 

Antitrust News: Microsoft, AOL Time Warner Settle Suit

This in from the AP.

Microsoft Corp. will pay AOL Time Warner $750 million and let the media company license its browsing software for seven years in a settlement to resolve an antitrust lawsuit against the software giant, the companies announced Thursday.

The settlement also calls for Microsoft to license its digital media technology to AOL, as well as work with the company to promote digital media initiatives.

Microsoft will provide technical information to AOL to ensure that its products run effectively on the Windows operating system.

The agreement resolves a lawsuit AOL filed against Microsoft in January 2002 on behalf of its subsidiary, Netscape Communications. The complaint was one of several private antitrust lawsuits still pending against Microsoft over anticompetitive behavior.

AOL had alleged in the lawsuit that Microsoft used anticompetitive business practices to ensure the dominance of its Internet Explorer browsing software over Netscape's software. AOL argued that Microsoft made deals with computer manufacturers and others to shut out Netscape and quash competition.
I'm in the wrong business. Defending antitrust victims from unjust attacks is not nearly as lucrative as suing them.

::: posted by Nicholas Provenzo at 5:57 PM | link | donate |
 

Rights and Reason: Muslim Woman Sues to Wear Veil for License

A Muslim woman has brought suit against the state of Florida for threatening to revoke her drivers license after she refused to remove her veil for her drivers license photo. The question at bar is if Florida has a compelling interest in regulating drivers that overrides the religious protections afforded one of its citizens. Florida's own conduct in issuing drivers licenses would indicate it does not, as it routinely issues drivers licenses without photos. According to the ACLU, which is representing the woman in court:

Florida officials issued more than 800,000 temporary licenses and/or driving permits - without photographs - in the past five years to individuals in a variety of different categories. Convicted drunk drivers with revoked licenses are legally allowed to drive in Florida using only driving permits without photographs, as are foreign nationals, those who failed their eye or written exams and military personnel.
A drivers license may serve as a proxy for an ID, but in fact, it is nothing more than a license to operate a motor vehicle on government highways. Such a license should not demand invading an individual's privacy if they wish to maintain it.

If the question before the court was regarding the woman's passport, for example, I would probably side with the woman having to remove her veil if she wished to be issued a passport on the grounds that a passport serves as a form of identification and demands the means to physically identify the person in question. But then again, perhaps an individual who objected to having their photo taken could simply provide fingerprints or DNA. If it takes forever to process them, that's their own fault, but I think it is at least possible to provide them reasonable accommodations as they act on their convictions.

In my mind, this particular dispute is an open and shut case. We'll see if the court sees it that way.

UPDATE: This jucy tidbit from the Smoking Gun:

Turns out the Florida woman who is suing for the right to wear a Muslim headdress in a driver's license photograph has previously been subjected to an, um, unveiled government portrait. Following her 1997 conversion to Islam, Sultaana Freeman (formerly Sandra Keller) was arrested in Decatur, Illinois for battering a foster child. Freeman, 35, pleaded guilty in 1999 to felony aggravated battery and was sentenced to 18 months probation. As a result of the conviction, state officials removed two foster children from Freeman's care.
And of course, they got pictures.

::: posted by Nicholas Provenzo at 1:08 AM | link | donate |
 

Wednesday, May 28, 2003 :::

Antitrust News: Baseball Wins Again

Yesterday the U.S. Court of Appeals for the Eleventh Circuit thwarted the Florida attorney general’s effort to prosecute Major League Baseball for supposed antitrust violations arising from the now-aborted plan to contract two franchises. While the Court of Appeals’ ruling was a total vindication of baseball, the judges made little effort to hide their official disdain for Major League Baseball’s antitrust exemption. The opening of Circuit Judge Tjoflat’s opinion states things succinctly:

For better or worse, professional baseball has long enjoyed an exemption from the antitrust laws. The scope of this exemption – a judge-made rule premised upon dubious rationales and labeled an “aberration” by the Supreme Court – has been the subject of extensive litigation over the years. In this case, we are called upon to address two key issues: (1) the effect of the federal rule upon state antitrust law and (2) whether the exemption extends beyond antitrust prosecutions into the realm of mere investigations. With regard to the first issue, we hold that the federal exemption preempts state antitrust law. As for the second issue, we hold that the Florida Attorney General cannot proceed with the investigation in this case. This holding is based upon the Fourth Amendment and state law rather than the antitrust exemption. In this vein, our analysis differs significantly from that of the district court, although we ultimately affirm its decision.


In November 2001, MLB owners voted to contract two franchises. The Miami-based Florida Marlins and the Tampa Bay Devil Rays were among the possible contraction candidates, although the Montreal Expos and Minnesota Twins thought to be the favored choices of MLB management. The Florida attorney general then issued a “civil investigative demand,” essentially a political call for prosecuting baseball to curry favor with voters and the media. The idea was to drown baseball in document production and deposition requests to convince them not to contract the Marlins or Devil Rays. As it turns out, no team would face immediate contraction, as MLB’s 2002 labor agreement with its players union tabled any contraction until the expiration of the five-year pact. Simultaneously, however, MLB filed suit against Florida to prevent the civil investigation from going forward.

Businesses generally don’t have to justify closing down failing operations, and even the Eleventh Circuit acknowledged MLB had perfectly valid business reasons for closing the Marlins or Devil Rays. Thus, Florida’s only legal remedy to stop contraction would be to claim a violation of the antitrust laws. Since baseball already enjoys a federal antitrust exemption, Florida tried to claim that state antitrust law could still be applied to MLB. The theory here is that the federal exemption merely removes baseball from the scrutiny of federal antitrust laws, leaving a gap the states may fill with their own regulation. The Eleventh Circuit correctly rejected this theory, relying on the Constitution’s Supremacy Clause as giving baseball “a universal exemption in the name of uniformity.”

Of course, it’s unclear to me how the antitrust laws would prevent contraction in the first place. The antitrust laws might prevent certain activities, such as a league preventing a team from moving to another city (as was the case with the NFL’s Oakland-L.A.-Oakland Raiders), but outright contraction is hardly an affront to traditional antitrust theory. Think of it this way. As outlined by MLB in 2001, contraction would involve the remaining MLB teams collectively purchasing two franchises and liquidating them. In other business contexts, this is hardly an unusual or illegal practice. For example, if McDonald’s were to close one of its failing stores by buying back its franchise from the local owner, it’s doubtful anyone would claim the antitrust laws were violated. But as I noted above, Florida’s case was more about political populism than enforcing the law.

The one curious thing about the Eleventh Circuit’s opinion is its argument that the baseball antitrust exemption—a Supreme Court ruling later written into law by Congress—is somehow illegitimate as a matter of law. The Court of Appeals seems particularly concerned with judicial activism in antitrust, as seen in this passage discussing legislative intent:

Any discussion of whether Congress meant to immunize the business of Baseball from all antitrust law (as opposed to federal antitrust law) is, of course, fanciful because Congress never conveyed its preference one way or the other. The exemption is entirely judge-made, although some decisions have attempted to cloak this disturbing fact in the language of Congressional intent.


Arguing the baseball exemption lacks legitimacy because its “judge made” is intellectually dishonest. All antitrust law is “judge made.” The two principle rules of antitrust analysis—the per se rule and the rule of reason—are fabrications of the Supreme Court, not the mandate of Congress. For more than 100 years, the courts and unelected federal agencies have been given a blank check to write, amend, and enforce the antitrust laws at will without oversight or restriction. It is the judges who bear a large share of the responsibility for this, by not only refusing to strike down the antitrust laws as facially unconstitutional (which they are), but also by indulging every politicized antitrust theory offered by government prosecutors. The Eleventh Circuit considers the baseball exemption an “aberration,” yet the courts permit the Federal Trade Commission to apply the antitrust laws to such things as “superpremium ice cream” manufacturers and private membership associations. This is hardly consistent reasoning.

Of course, one can’t fault the Eleventh Circuit too much for despising the baseball exemption. The Court’s only trying to reconcile the exemption with the theory of morality posited by the antitrust laws, a theory nicely described by the Court as follows: “the antitrust laws form the bedrock of our capitalist system premised upon competition, and that anticompetitive conduct harms consumer welfare.” As CAC has always maintained, this is just plain wrong. Capitalism is a system premised upon individual rights as the bedrock of society. Baseball is entitled to its antitrust exemption, not because it deserves special privilege, but because every business is entitled to the protection of basic economic freedom. Resolving the conflict between the antitrust laws and the baseball exemption should be resolved by repealing the antitrust laws, not by repealing the baseball exemption.

::: posted by Skip Oliva at 3:20 PM | link | donate |
 

Tuesday, May 27, 2003 :::

Antitrust News: Daily Roundup

The Justice Department is staying out of the latest round of Microsoft appeals, meaning the Solicitor General won't file any briefs in the D.C. Circuit appeal brought by Massachusetts and West Virginia seeking greater sanctions against Microsoft. It's a fairly cowardly act by the federal government, leaving Microsoft to fend for itself in defense of an antitrust settlement the Justice Department is charged with enforcing. I suspect the Justice Department—and by extension, the White House—is implicitly bowing to political criticism from members of Congress, including key Republicans, who felt the Antitrust Division went too easy on Microsoft in the settlement.

In other news, this morning the U.S. Supreme Court granted certiorari in a civil antitrust lawsuit brought against the United States Postal Service. The Ninth Circuit previously held the Post Office could stand trial for antitrust claims, because the agency was not covered by the sovereign immunity granted to government agencies. Solicitor General Ted Olson is arguing the case for the USPS, which the justices will hear next fall. I'll have more to say on this case later after I have a chance to review the file.

Finally, my colleague Arthur Silber takes on William Safire and Glenn Reynolds, who've both recently argued in favor of government control of private media companies. Arthur demolishes the intellectual argument against "Big Media" and also discusses my recent advocacy in the federal antitrust "settlement" with Village Voice Media and New Times Media.

::: posted by Skip Oliva at 4:54 PM | link | donate |
 

Antitrust News: CAC to FTC: Hands off New Mexico Doctors

Alexandria, VA—Today the Center for the Advancement of Capitalism (CAC) filed public comments on the Federal Trade Commission's (FTC) consent order in the case of Carlsbad Physician Association, Inc. (CPA), a New Mexico corporation formed to allow its members to negotiate on par with health insurance groups. CAC argued that the FTC's antitrust enforcement efforts violate the rights of doctors and will harm the quality of medical care in America.

The FTC’s complaint charged CPA and eight physicians who constitute the company’s members with illegal price fixing for their attempt to collectively bargain with health insurance companies. Under the proposed consent order, the six doctors are effectively prevented from engaging in any collective bargaining activity for a period of 20 years and CPA will be forcibly dissolved.

"CAC has been closely monitoring the FTC's antitrust enforcement efforts against physicians for over a year. Like earlier prosecutions, every aspect of the FTC's case against these doctors is deficient and crumbles upon proper examination,” says Nicholas Provenzo, CAC chairman." "The FTC's antitrust enforcers claim that recognizing a doctor's right to negotiate his fees in concert with other doctors will hurt patients by increasing costs. The FTC should instead observe the effect of its own actions."

"The FTC has made it clear that the only price strategy it would allow doctors to pursue is one that forces them to see more patents for less money," says Provenzo. "This violates the rights of doctors to control the manner in which they work. In addition, reducing the monetary incentive doctors receive for providing care to their patents can hardly be said to be in the patient's best interest."

"Patents already feel like cogs in a vast, uncaring machine," says Provenzo. "The FTC's crusade against doctors will only increase that feeling. It will drive doctors out of medicine and leave patents with a declining standard of care."

“This case represents the government at its worst—prosecuting innocent citizens whose only ‘crime’ is attempting to assert their right to freely negotiate fees paid in exchange for their skills, while claiming that this somehow protects the marketplace,” says CAC Senior Fellow Sean Oliva, who wrote the Center’s comments. "The FTC's mandate is to protect the market—not destroy it, yet the FTC's consent order is confirmed, the marketplace for medicine will be seriously damaged."

A copy of the CAC comment letter in PDF format can be downloaded at: http://www.capitalismcenter.org/Campaigns/Antitrust/CAC_Comment_on_NMCPA.pdf

::: posted by Nicholas Provenzo at 9:01 AM | link | donate |
 

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