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CITIZENSFORVOLUNTARYTRADE

OFFICIAL REPORTS

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CVT Reports No. 4/ July-August2004

The Solicitor General of the United States is arguablythe mostprominentnon-Cabinet, non-military officer in the federalgovernment. Although subordinate to the attorney general, it is the

solicitor general who conducts the executive branch’s importantbusiness before the Supreme Court and other federal appellatecourts. Even when the governmentis not a party to a case, thesolicitor general, either by his own initiative or by judicialinvitation, will submit briefs and participate in oral arguments inimportant Supreme Court cases. The solicitor general evenmaintains a second working office in the Supreme Court building(the Vice President is the only other official who maintains officesin two branches of the government.) Given all this, it’s no surprisethat many in the legal community refer to the solicitor general asthe “tenth justice” of the Supreme Court.Theodore Olson recently resigned as solicitor general after threeyears. Olson’s appointment to the position by President Bush wasnot unexpected: Olson successfully represented then-Gov. Bush inthe two Supreme Court cases that arose from the contested 2000election in Florida. Before that he was a senior Justice Departmentofficial in the Reagan administration and a longtime partner at thelaw firm of Gibson, Dunn & Crutcher.During the recently concluded term of the Supreme Court,Olson’s office participated in four cases dealing with the antitrustlaws, only one of which the government was an actual party in. Hepersonally argued one case as a friend-of-the-court, or

amicus curiae

.But even when General Olson did not appear individually, the

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This report was prepared by CVT staff. The staff thanks S.M. Oliva, Tom Ciavarella,Nicholas Provenzo, Doug Messenger, Nicholas Fobe, Rick Merritt, Roger Blakelock,Howard Bashman, and Judge Roy Snyder.

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”Reviewing the Supreme Court’s Year in Antitrust” July-August 2004

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power and

gravitas

of his office remained at the center of the

Supreme Court’s decision-making. In all four of the antitrust cases,the position explicated by Ted Olson’s office carried the day. Moreremarkably, in all four cases combined,there was only

onedissenting vote

. Contrary to the common portrayal of the SupremeCourt as a five-to-four, sharply divided partisan entity, the 2003

Term’s quartet of antitrust cases reveal a Court in near-perfectlockstep with the executive branch.None of the four cases makes for exciting historical narrative.The first deals with the fallout of Congress’ epic 1996 rewrite of thenation’s telecommunications laws; the second addresses the PostalService’s amenability to antitrust suits; the third looks at the plightof foreign companies against an alleged conspiracy of vitaminmanufacturers; and the fourthrepresentsthe latest chapter in thetechnology industry’s antitrust wars: A disputeover discoveryrules. Despite the lack of popular excitement, each case producedan important statement on the scope and application of the nation’santitrust laws, and the solicitor general’s role in shaping the Court’sconsensus on these issues speaks an often-overlooked truth: Whenit comes to much of the Supreme Court’s docket, the Court oftenspeaks with one voice—that of the Office of the Solicitor General.This report summarizes and criticizes each of the four antitrustcases decided by the Supreme Court this past term, with anemphasis on the solicitor general’s position and arguments. Thecases are presented in the order they were decided:

VerizonCommunications Inc. v. Law Offices of Cutis V. Trinko, LLP

(decided January 13, 2004);

Postal Service v. Flamingo Industries (USA) Ltd.

(February 25, 2004);

F. Hoffman-LaRoche Ltd. v. Empagran S.A.

(June14, 2004); and

Intel Corp. v. Advanced Micro Devices, Inc.

(June 21,2004).

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Verizon Communications Inc. v. Law Offices ofCurtis V. Trinko, LLP

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Introduction

In 1996, Congress passed the Telecommunications Act

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(the

1996 Act), which was intended to “de-monopolize” the telephoneindustry by requiring local telephone companies to open theirnetworks to competitors. The Act created a wholesale telephoneservice market, where the incumbent local carrier would sell theirtelephone service to one or more rivals, who would then resellservices to the consumer. A rival carrier could also choose to buildits own network and connect it to the incumbent’s network at ratescontrolled by the applicable state utility regulator. As a thirdoption, the rival could lease the incumbent’s network on an a lacarte or “unbundled” basis.When the 1996 Act was adopted, NYNEX was the incumbenttelephone carrier in New York State. Today, following a series ofmergers, NYNEX is known asVerizon. In 1997, following theterms of the 1996 Act, Verizon obtained regulatory approval fromNew York of an agreement to connect its network to that of AT&T.Verizon also obtained approval from the Federal CommunicationsCommission, in 1999, to offer long distance telephone service,which required Verizon, among other things, to offer rivals“nondiscriminatory access” to its telephone network in New York.Later in 1999, AT&T, a rival, complained that Verizon was notfulfilling its obligations under the agreements described above.Specifically, AT&T said that orders it placed on behalf of its NewYork retail customers were not being processed by Verizon’scomputers. Verizon said this was due to a software error. InMarch 2000, following an investigation, the FCC and New Yorkofficials issued orders requiring Verizon to remedy the situationand pay fines of $3 million to the federal government and $10million to AT&T and other affected rivals. By July 2000, Verizonwas processing wholesale orders without incident, and thegovernment orders were terminated.One day after the FCC entered its March 2000 order, a NewYork law firm, the Law Offices of Curtis V. Trinko, LLP (hereinafter

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No. 02-682.

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Public Law 104-104.