conduct of large private civil lawsuits. conduct of large private civil lawsuits primary focus:...

CONDUCT OF LARGE PRIVATE CIVIL LAWSUITS

Conduct of Large Private Civil Lawsuits

• Primary Focus: Settlement

• Secondary Focus: Summary Judgment

Order of Proceedings

• Preliminary Negotiations

• Complaint

• Motion to Dismiss Part or All

• Investigation & Discovery

• Summary Judgment Motions

• Trial Prep/Negotiations

Investigation & Discovery: Interactive Process

• Legal Research Set of Relevant Facts to Investigate

• Discovery of Facts More Detailed Legal Qs to Research

• Theories Change as Get More Info

Investigation & Discovery: Goals

• Defendant– Limit Info Going to Plaintiff– Identify D Theory of Case (& Support)– Identify Evidence Key to P Theory of Case

• Plaintiff: Find Evidence Sufficient to Survive Summary Judgment– Evidence Consistent w P Theory– Evidence Inconsistent w D Theory

Investigation & Discovery: Finding Evidence

• Witness Interviews• Early Interrogatories

– Contentions– I.D. Witnesses & Documents

• Document Review (Most Important)• Depositions• Later Interrogatories: What Evidence

Supports Claims

Order of Proceedings

• Preliminary Negotiations

• Complaint

• Motion to Dismiss Part or All

• Investigation & Discovery

• Summary Judgment Motions

• Trial Prep/Negotiations

THEMES OF THIS COURSE

1. Power of Attorneys & Legal Academics to Change the Law

HISTORICAL TRENDS

• 1945-75: Anti-Big Business Ideology

• 1975-92: “Antitrust Revolution”

• 1992-2000: Line-Drawing and Some Counter-Revolution

• 2001 : ???



2. Use of Economics in Legal Argument




3. Conducting Complex Civil Litigation




3. Conducting Complex Civil Litigation

ATTORNEYS MATTER A LOT

INTRODUCTION TO THE ECONOMICS

OF ANTITRUST

ASSUMPTIONS OF CLASSICAL ECONOMICS

• PEOPLE ACT RATIONALLY TO MAXIMIZE THEIR OWN INTERESTS

ASSUMPTIONS OF CLASSICAL ECONOMICS

• PEOPLE ACT RATIONALLY TO MAXIMIZE THEIR OWN INTERESTS

• RESOURCES MOVE TO MOST VALUABLE USE IF VOLUNTARY EXCHANGE PERMITTED

““VALUE”VALUE”

MEASURED BY AGGREGATE CONSUMER WILLINGNESS TO

PAY FOR THINGS

““EFFICIENCY”EFFICIENCY”

EXPLOITING ECONOMIC RESOURCES TO MAXIMIZE

“VALUE”

Given these definitions …

• Voluntary transactions are “efficient”



• Free market is “efficient”– allows sequences of transactions

– resources end up w those who most value them



• Free market is “efficient”– allows sequences of transactions

– resources end up w those who most value them

• Interference with market by government or cartel is “inefficient”

PROBLEMS WITH ASSUMPTIONS

• DEFINITION OF “VALUE”

• PEOPLE OFTEN IRRATIONAL


• DEFINITION OF “VALUE”

–CONSUMER CULTURE

–DEPENDS ON INCOME DISTRIBUTION

–MORE $ = MORE VOTES


• PEOPLE OFTEN IRRATIONAL

–OFTEN APPEAR TO ACT AGAINST SELF-INTEREST

–OFTEN PERCEIVE SELVES ACTING AGAINST SELF-INTEREST


• Raise Qs About Normative Use of Theory– Claims that results of comp. market always

desirable

– Claims that interference w comp. market always bad


• Raise Qs About Normative Use of Theory

• Theory Often Describes World Pretty Well


• Raise Qs About Normative Use of Theory

• Theory Often Describes World Pretty Well

• ME: Works Best if Addressing Basic Consumer Items

DEMAND CURVE:

GENERALLY BUY MORE OF GOOD THE LESS IT COSTS

DEMANDDemand

0

5

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Q

P P

DEMAND CURVE:GENERALLY BUY MORE OF GOOD

THE LESS IT COSTS:

• SUBSTITUTION EFFECT

• INCOME EFFECT


THE LESS IT COSTS

• SUBSTITUTION EFFECT: AS GOOD BECOMES CHEAPER, BUY IT INSTEAD OF ALTERNATIVES

• INCOME EFFECT


THE LESS IT COSTS

• SUBSTITUTION EFFECT

• INCOME EFFECT: AS GOOD BECOMES CHEAPER, PURCHASING POWER INCREASES, SO BUY MORE

DEMAND CURVE:GENERALLY BY MORE OF GOOD

THE LESS IT COSTS

EXCEPTIONS (RARE):

• INFERIOR GOODS

• LUXURY GOODS


THE LESS IT COSTSEXCEPTIONS:

• INFERIOR GOODS: GOODS YOU BUY MORE OF, THE LESS $ YOU HAVE

• LUXURY GOODS


THE LESS IT COSTSEXCEPTIONS:

• INFERIOR GOODS

• LUXURY GOODS: GOODS YOU BUY BECAUSE OF THE HIGH PRICE

FACTORS AFFECTING DEMAND

• PERSONAL TASTE• INCOME

• PRICE OF COMPLEMENTARY GOODS

• PRICE OF SUBSTITUTES


• PERSONAL TASTE

• INCOME• PRICE OF COMPLEMENTARY GOODS



• PERSONAL TASTE

• INCOME

• PRICE OF COMPLEMENTARY GOODS


DEMANDDemand

0

5

10

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Q

P P

TYPES OF PRODUCER COSTS

• FIXED v.VARIABLE COSTS

• TOTAL v. AVERAGE COSTS

• MARGINAL COST

FIXED v. VARIABLE COSTS

• FIXED COSTS: DO NOT VARY IN SHORT RUN

• VARIABLE COSTS

FIXED v. VARIABLE COSTS

• FIXED COSTS: DO NOT VARY IN SHORT RUN

• VARIABLE COSTS: VARY WITH LEVEL OF PRODUCTION

TOTAL v. AVERAGE COST

• TOTAL COST: ALL COSTS ASSOCIATED WITH PRODUCT LINE

• AVERAGE COST



• AVERAGE COST: MEAN COST PER ITEM PRODUCED



• AVERAGE COST: MEAN COST PER ITEM PRODUCED– AVERAGE TOTAL COST

– AVERAGE VARIABLE COST

MARGINAL COST =

ADDITIONAL COST OF PRODUCING

ONE MORE UNIT

ALL COSTS INCLUDE “NORMAL” PROFIT

SUPPLY CURVE =MARGINAL COST CURVE

FOR INDUSTRY AS A WHOLE

SUPPLY & DEMANDDemand

0

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P P

FACTORS AFFECTING FACTORS AFFECTING SUPPLY CURVESUPPLY CURVE

• TECHNOLOGICAL CHANGE

FACTORS AFFECTING FACTORS AFFECTING SUPPLY CURVESUPPLY CURVE

• TECHNOLOGICAL CHANGE

• INPUT PRICES


0

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P P

PRODUCERS’ GOAL

MARGINAL REVENUE =

MARGINAL COST

PRODUCERS’ GOAL

IN COMPETITIVE MARKET

MARGINAL REVENUE =

PRICE =

MARGINAL COST


0

5

10

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Q

P P

OPTIMUM CONDITIONS FOR COMPETITIVE EQUILIBRIUM• FUNGIBLE PRODUCT

• SUPPLIERS CAN’T AFFECT EACH OTHERS PRICING/OUTPUT

• MOBILITY/EQUALITY OF RESOURCE AVAILABILITY

• GOOD INFORMATION/LOW TRANSACTION COSTS