Article

Deterring Unenforceable Terms

Contract law doesn’t work the way most people—that is, most nonlawyers—think it works. People think that if they agree to a contract, they are bound by its terms—no matter if those terms are unfair or legally unenforceable. But that’s not correct. Although there is a default presumption that the law will enforce terms that parties agree to, courts can and do decline to enforce terms when they are contrary to statute, regulation, or common law.

This is a bad arrangement. Because people do not understand how enforceability works, contract drafters can include unenforceable terms and benefit from them even when they are contrary to law. Clearly unenforceable terms are used in a wide range of cases, and those terms impose costs on consumers and employees despite being formally toothless.

This Article argues for a change. The problems of unenforceable terms arise from the burden of determining whether a contractual provision is enforceable. The current law makes little effort to allocate or mitigate that burden. But in a common scenario—where a sophisticated actor drafts mass contracts for many unsophisticated counterparties—the drafter is much better positioned to determine the contract’s enforceability. The law should therefore penalize such drafters for including clearly unenforceable terms in their contracts. This Article describes the basic normative case for such a penalty, considers how it might best be designed, and assesses the opportunities and limitations in existing law for applying a penalty to deter the use of unenforceable terms in mass contracts.

Introduction

Contract law has a process problem.

The law governing contracts is full of protections for the people who are party to a contract. Over the centuries, judges at common law have determined that a variety of potential provisions are too unfair to permit. In the modern era, legislators have passed statutes that prohibit a wide range of terms. And regulators have promulgated rules to limit what companies can put in a contract.

But to enforce these protections, contract law often relies on a flawed procedure. The background norm in contract law is that a provision that is contrary to law will not be enforced in court. And that makes sense—where the terms of an agreement violate doctrine or public policy, there is a strong argument that the state should not enforce those terms. But, other than nonenforcement, there is no general default penalty for using unenforceable terms. Individual statutes or regulations may attach a penalty for using a particular term, such as when a statute creates a penalty for including contractual provisions purporting to waive the statute’s protections.1 1.See, e.g., 15 U.S.C. §§ 1693l, 1693m.Show More But absent such a specific regulation, the law does not penalize a party’s choice to include an unenforceable term in their contracts.

The problem is that this arrangement does little to prevent the use of unenforceable terms in the first place.2 2.See Margaret Jane Radin, Boilerplate: The Fine Print, Vanishing Rights, and the Rule of Law 147 (2013).Show More Most contracts do not get litigated. Most people, meanwhile, take the terms of the contracts they sign at face value, not realizing that a term may be unenforceable and carry no legal weight.3 3.See infra Section I.B.Show More As a result, a sophisticated drafter who puts unenforceable terms in their contracts may reap the benefit of those terms by influencing their counterparties’ behavior.4 4.Radin, supra note 2.Show More An employee who thinks they are bound by an unenforceable noncompete clause may decline to look for a better job; a consumer who thinks they are bound by an unenforceable liability waiver may not file a lawsuit even when they are entitled to damages.

And if the contract does end up in litigation, the term at issue is just rendered a nullity, making the drafter no worse off than if the term had not been included. On balance, then, contract drafters often are incentivized to include unenforceable terms and try to get whatever value out of them that they can, short of relying on them in court.5 5.Id.Show More

This arrangement is the result of a legal system that typically does not recognize a particular type of burden: the burden of learning what the law is and how it applies in a given context. To the contrary, courts embrace a clear legal fiction: that parties to a contract “are presumed to know the law.”6 6.E.g., R.L. Polk Printing Co. v. Smedley, 118 N.W. 984, 984 (Mich. 1908); BPP069, LLC v. Lindfield Holdings, LLC, 816 S.E.2d 755, 761 (Ga. Ct. App. 2018) (“[A]ll persons are presumed to know the law and therefore cannot be deceived by erroneous statements of law.” (quoting Lakeside Invs. Grp., Inc. v. Allen, 559 S.E.2d 491, 493 (Ga. Ct. App. 2002))).Show More As a result, although the law puts the onus on a contract drafter to write clear and intelligible terms,7 7.See, e.g., David Horton, Flipping the Script: Contra Proferentem and Standard Form Contracts, 80 U. Colo. L. Rev. 431, 437–38 (2009) (noting that the contra proferentem doctrine “deters imprecision” and describing its deterrent effects in the context of standard form contracts).Show More it does not typically penalize a drafter for writing unenforceable terms. The burden of understanding the enforceability of a term “lies where it falls,”8 8.Cf. Filosa v. Courtois Sand & Gravel Co., 590 A.2d 100, 102 (R.I. 1991) (“[W]here there is no negligence, the aggrieved party is no longer a plaintiff but is a victim of accidental misfortune, and one of the clearest and probably most draconian principles to evolve out of centuries of tort law is that accidental harm lies where it falls.” (citing Brown v. Kendall, 60 Mass. (6 Cush.) 292, 298 (1850))).Show More and if a tenant or an employee mistakenly thinks they are bound by a term, they generally just bear the cost of compliance.

But most people do not know the law. Contracts mediate huge portions of our lives, from our employment and our housing, to our communications and correspondence, to our leisure and entertainment. And the law makes little to no effort to ensure that those contracts’ terms actually create enforceable obligations. Instead, the law leaves it up to everyone to figure out for themselves what parts of their contracts they must listen to and what parts they can ignore. And what’s more, access to those who can help figure that out—i.e., lawyers—is incredibly unequal, with marginalized groups much less able to access legal assistance than those with more resources.9 9.See infra Section II.C.Show More

This arrangement should change. This Article contends that in the contemporary world of mass contracting, the law should reallocate the burden of learning and applying the law. In many private-law contexts, the law plays a role both in the efficient allocation of costs and in the protection of less sophisticated parties. But, I argue, in the world of mass contracting, the burdens of unenforceable terms are not efficiently allocated, and the result is harm to everyday consumers and employees who sign mass contracts.

The problematic incentives posed by unenforceable terms have long been recognized.10 10.See, e.g., Radin, supra note 2; Lee A. Pizzimenti, Prohibiting Lawyers from Assisting in Unconscionable Transactions: Using an Overt Tool, 72 Marq. L. Rev. 151, 158 (1989); Bailey Kuklin, On the Knowing Inclusion of Unenforceable Contract and Lease Terms, 56 U. Cin. L. Rev. 845, 846–47 (1988); Warren Mueller, Residential Tenants and Their Leases: An Empirical Study, 69 Mich. L. Rev. 247, 248 (1970).Show More But the time is ripe for a reconsideration of this basic feature of how our legal system handles contracts. Over the last decade, new empirical research has illustrated the breadth and depth of the problem of unenforceable terms—a problem that remained mostly anecdotal until recently.11 11.See infra Part I. On the lack of robust evidence before the last decade or so, see Meirav Furth-Matzkin, On the Unexpected Use of Unenforceable Contract Terms: Evidence from the Residential Rental Market, 9 J. Legal Analysis 1, 5 (2017) [hereinafter Furth-Matzkin, Unexpected Use] (“[T]here has been so far very little empirical investigation into the prevalence of unenforceable terms in consumer contracts.”).Show More Unenforceable terms are widespread, with studies confirming their ubiquity across economic sectors including housing,12 12.David A. Hoffman & Anton Strezhnev, Leases as Forms, 19 J. Empirical Legal Stud. 90, 90–91 (2022); see also Furth-Matzkin, Unexpected Use, supra note 11, at 17–23 (detailing contract provisions in lease housing contracts that courts have found to be unenforceable or that are prohibited by state statutes).Show More employment,13 13.Evan P. Starr, J.J. Prescott & Norman D. Bishara, Noncompete Agreements in the US Labor Force, 64 J.L. & Econ. 53, 60, 81 (2021) [hereinafter Starr et al., Noncompete Agreements].Show More and recreation.14 14.Edward K. Cheng, Ehud Guttel & Yuval Procaccia, Unenforceable Waivers, 76 Vand. L. Rev. 571, 577 (2023).Show More And new empirical research also demonstrates the effect of those terms.15 15.See Tess Wilkinson-Ryan, The Perverse Consequences of Disclosing Standard Terms, 103 Cornell L. Rev. 117, 139–49, 139 nn.105–10 (2017) (surveying research); Meirav Furth-Matzkin & Roseanna Sommers, Consumer Psychology and the Problem of Fine-Print Fraud, 72 Stan. L. Rev. 503, 516 (2020) (explaining that laypeople may be discouraged from breaking a contract, even if they suspect the contract is unfair, because they assume written contracts are binding); Meirav Furth-Matzkin, The Harmful Effects of Unenforceable Contract Terms: Experimental Evidence, 70 Ala. L. Rev. 1031, 1044–51, 1053–56 (2019) [hereinafter Furth-Matzkin, Harmful Effects] (showing through experiments that unenforceable terms adversely affect tenants’ behavioral intentions and legal predictions); Evan Starr, J.J. Prescott & Norman Bishara, The Behavioral Effects of (Unenforceable) Contracts, 36 J.L. Econ. & Org. 633, 651–55, 659–66 (2020) [hereinafter Starr et al., Behavioral Effects] (suggesting that noncompetes have an effect on behavior regardless of their enforceability, and that noncompetes are associated with longer employee tenure and reduced likelihood of leaving for a competitor). For examples of older evidence in this vein, see also Dennis P. Stolle & Andrew J. Slain, Standard Form Contracts and Contract Schemas: A Preliminary Investigation of the Effects of Exculpatory Clauses on Consumers’ Propensity to Sue, 15 Behav. Scis. & L. 83, 91–93 (1997) (finding that consumers tend to believe that all contract terms are enforceable and that exculpatory language in form contracts appears to deter consumers’ propensity to seek compensation); Curtis J. Berger, Hard Leases Make Bad Law, 74 Colum. L. Rev. 791, 815–16 (1974) (explaining that “[u]ninformed or misinformed parties to a contract are easily terrorized or disarmed into foregoing their rights and remedies”); Mueller, supra note 10, at 248, 272–74 (suggesting that “the bulk of tenants [do] not appear to question the validity of terms found in their leases”).Show More Both consumers and employees are likely to feel bound by contract terms that they have assented to, regardless of those terms’ legality, and even if they have not read the terms before signing.16 16.See infra Part I (surveying research).Show More There is thus now an established, increasingly robust literature documenting that unenforceable terms pose a real problem, and one that is common in the contemporary economy.

Unenforceable terms have also been highlighted by the recent actions of agencies and advocates.17 17.See infra Section I.C.Show More Terms that are frequently unenforceable, like noncompete agreements and liability waivers, are at the center of recent actions by the White House,18 18.Exec. Order No. 14036, 86 Fed. Reg. 36987, 36987, 36992 (July 9, 2021) (discussing noncompete agreements).Show More Federal Trade Commission (“FTC”),19 19.Non-Compete Clause Rule, 89 Fed. Reg. 38342, 38342 (May 7, 2024) (to be codified at 16 C.F.R. pts. 910, 912). But see Ryan, LLC v. Fed. Trade Comm’n, 746 F. Supp. 3d 369, 390 (N.D. Tex. 2024) (“The [Non-Compete] Rule shall not be enforced or otherwise take effect on its effective date of September 4, 2024, or thereafter.”), appeal docketed, No. 24-10951 (5th Cir. Oct. 24, 2024).Show More National Labor Relations Board (“NLRB”),20 20.Memorandum GC 23-08 from Jennifer A. Abruzzo, Gen. Couns., Nat’l Lab. Rels. Bd., to All Reg’l Dirs., Officers-in-Charge, and Resident Officers, Nat’l Lab. Rels. Bd. (May 30, 2023), https://nlrbresearch.com/pdfs/09031d4583a87168.pdf [https://perma.cc/D6QA-2‌RPG].Show More and Consumer Financial Protection Bureau (“CFPB”).21 21.Registry of Supervised Nonbanks That Use Form Contracts to Impose Terms and Conditions That Seek to Waive or Limit Consumer Legal Protections, 88 Fed. Reg. 6906, 6906 (proposed Feb. 1, 2023) [hereinafter Registry of Supervised Nonbanks That Use Form Contracts].Show More And significantly, policymakers and advocates are beginning to focus not only on rendering bad contract terms unenforceable, but also on penalizing drafters for including those provisions in the contracts to begin with.22 22.See infra Section I.C.Show More

Between this empirical work and recent policy developments, unenforceable terms are now in the spotlight. But that spotlight’s focus has often been somewhat granular, examining one particular term or context rather than the problem of unenforceable terms writ large.23 23.The FTC’s recent policy actions, for instance, focus only on noncompetes in employment contracts, while the CFPB’s actions focus on waivers in consumer finance. CompareNon-Compete Clause Rule, 89 Fed. Reg. at 38342 (providing that it is an unfair method of competition to enter into noncompete clauses with workers after the Rule’s effective date), with Registry of Supervised Nonbanks That Use Form Contracts, supra note 21 (proposing that nonbanks be required to register with the CFPB if they use contract terms designed to waive consumers’ legal protections or limit how consumers enforce their rights).Show More The idea of a general penalty for using unenforceable terms, meanwhile, has come up before, but typically only in passing.24 24.See, e.g., Furth-Matzkin & Sommers, supra note 15, at 544–45 (suggesting “statutory damages for fine-print fraud” as part of a set of policy solutions); Radin, supra note 2, at 147–48 (mentioning the possibility of fines as a component of a public regulatory regime for boilerplate terms). A more thorough consideration of an affirmative cause of action can be found in Brady Williams’s Unconscionability as a Sword: The Case for an Affirmative Cause of Action, 107 Calif. L. Rev. 2015, 2041, 2043–45, 2047 (2019), which argues for developing an affirmative remedy in the context of unconscionable contract provisions.Show More

This Article picks up where those conversations leave off and considers the merits of a penalty for using unenforceable terms in mass contracts of adhesion. It argues for a general, affirmative prohibition on clearly unenforceable terms in contracts offered by a sophisticated drafter to large numbers of unsophisticated counterparties.

In doing so, the Article brings to bear normative concerns from both within and outside of traditional private-law theory. In particular, the problem of unenforceable terms implicates both the traditional private-law goal of cost minimization as well as the public-law goal of access to justice. That is because the question of how to approach unenforceable terms can be thought of as a question of how the law ought to distribute the costs of acquiring and applying legal knowledge. The law under the status quo makes no effort to allocate these costs, which is why there is a problem: the signers of mass adhesive contracts are unlikely to know that unenforceable terms carry no legal weight, and so may change their behavior to accommodate those terms even if doing so causes them loss or injury.

There are two basic paths that could address that problem: the signers of mass contracts can acquire and apply the legal knowledge necessary to understand terms’ enforceability, or the drafters of those contracts can acquire and apply the legal knowledge necessary to prevent unenforceable terms from being included in the first place. Comparing those options, it is clear that the party who can more cheaply manage the costs of legal knowledge is the drafter. The drafter in this scenario is both a sophisticated actor (who likely already has counsel) and one who is able to amortize the cost of legal analysis over many transactions.

Placing the burden on the drafter to issue only binding, valid terms also mitigates serious inequities under the status quo. Access to legal knowledge and legal institutions in the United States is not equally distributed.25 25.See infra Part II.Show More Marginalized groups in the United States face the double bind of higher-than-average legal needs and lower-than-average income and wealth to use to manage those needs.26 26.See infra Part II.Show More The inequities that these individuals and communities experience when it comes to the civil justice system both reflect and reinforce racial and gender inequality.27 27.See, e.g., Kathryn A. Sabbeth & Jessica K. Steinberg, The Gender of Gideon, 69 UCLA L. Rev. 1130, 1143–48, 1150–61 (2023); Tonya L. Brito, Kathryn A. Sabbeth, Jessica K. Steinberg & Lauren Sudeall, Racial Capitalism in the Civil Courts, 122 Colum. L. Rev. 1243, 1268–77 (2022).Show More These legal problems will often center around transactions and relationships that are mediated by contract and involve a power imbalance—with a landlord, employer, or health care provider, for instance—and so may implicate many substantive contract law doctrines that are designed to protect less powerful individuals.28 28.See infra Part II.Show More Restricting unenforceable terms thus avoids compounding injustice, in which a person’s existing marginalization prevents them from obtaining the assistance necessary to prevent further injury.

A general penalty for unenforceable terms is the natural development of the “contract as thing” perspective introduced by Arthur Leff more than fifty years ago.29 29.See Arthur Allen Leff, Contract as Thing, 19 Am. U. L. Rev. 131, 131–32, 147–52, 155 (1970); see also Douglas G. Baird, The Boilerplate Puzzle, 104 Mich. L. Rev. 933, 933–37 (2006) (comparing the legal treatment of boilerplate and fine print contract terms to “hidden” attributes of products).Show More Mass contracts of adhesion, ubiquitous in the modern world, are more like off-the-shelf purchased products than the bespoke negotiated instruments that contract doctrine developed around. As Leff wrote, “[i]f . . . a particular contract is a mass-produced inalterable thing, then the words that make it up are just elements of the thing, like wheels and carburetors.”30 30.Leff, supra note 29, at 153.Show More But the doctrine of unenforceability does not treat unenforceable words like wheels or carburetors, or even like other words that a company may utter about its products. A sports equipment company may face liability if its advertisement falsely touts “the highest-rated safety features on the market,” but if its contract says “the company is not liable for any damages resulting from your use of our products,” the standard approach of non-enforceability provides no penalty—even if that statement is, legally speaking, false.

In this way, the world of unenforceable contract terms is one of the last vestiges of the “caveat emptor” doctrine that has long been excised from many other areas of the law.31 31.See infra Part II.Show More Faced with unenforceable terms in a contract, consumers are simply left to their own recognizance. Affirmatively prohibiting clearly unenforceable terms in mass contracts would allow signers to rely on the bindingness of the terms they assent to without being lawyers—just as we can rely on the functionality of the cars we buy without being engineers or the safety of the medicines we purchase without being physicians.

The Article proceeds as follows. First, Part I surveys the research regarding the use of unenforceable terms and their effects on the general public. Part II then builds out the normative argument for penalizing the use of unenforceable terms in mass contracts. Part III considers questions of how such a penalty would be designed, such as how to construct a liability rule and which parties it should cover. Part IV then considers resources in existing law that could be used to combat unenforceable terms short of passing new legislation.

  1.  See, e.g., 15 U.S.C. §§ 1693l, 1693m. ↑
  2.  See Margaret Jane Radin, Boilerplate: The Fine Print, Vanishing Rights, and the Rule of Law 147 (2013). ↑
  3.  See infra Section I.B. ↑
  4.  Radin, supra note 2. ↑
  5.  Id. ↑
  6.  E.g., R.L. Polk Printing Co. v. Smedley, 118 N.W. 984, 984 (Mich. 1908); BPP069, LLC v. Lindfield Holdings, LLC, 816 S.E.2d 755, 761 (Ga. Ct. App. 2018) (“[A]ll persons are presumed to know the law and therefore cannot be deceived by erroneous statements of law.” (quoting Lakeside Invs. Grp., Inc. v. Allen, 559 S.E.2d 491, 493 (Ga. Ct. App. 2002))). ↑
  7.  See, e.g., David Horton, Flipping the Script: Contra Proferentem and Standard Form Contracts, 80 U. Colo. L. Rev. 431, 437–38 (2009) (noting that the contra proferentem doctrine “deters imprecision” and describing its deterrent effects in the context of standard form contracts). ↑
  8.  Cf. Filosa v. Courtois Sand & Gravel Co., 590 A.2d 100, 102 (R.I. 1991) (“[W]here there is no negligence, the aggrieved party is no longer a plaintiff but is a victim of accidental misfortune, and one of the clearest and probably most draconian principles to evolve out of centuries of tort law is that accidental harm lies where it falls.” (citing Brown v. Kendall, 60 Mass. (6 Cush.) 292, 298 (1850))). ↑
  9.  See infra Section II.C. ↑
  10.  See, e.g., Radin, supra note 2; Lee A. Pizzimenti, Prohibiting Lawyers from Assisting in Unconscionable Transactions: Using an Overt Tool, 72 Marq. L. Rev. 151, 158 (1989); Bailey Kuklin, On the Knowing Inclusion of Unenforceable Contract and Lease Terms, 56 U. Cin. L. Rev. 845, 846–47 (1988); Warren Mueller, Residential Tenants and Their Leases: An Empirical Study, 69 Mich. L. Rev. 247, 248 (1970). ↑
  11.  See infra Part I. On the lack of robust evidence before the last decade or so, see Meirav Furth-Matzkin, On the Unexpected Use of Unenforceable Contract Terms: Evidence from the Residential Rental Market, 9 J. Legal Analysis 1, 5 (2017) [hereinafter Furth-Matzkin, Unexpected Use] (“[T]here has been so far very little empirical investigation into the prevalence of unenforceable terms in consumer contracts.”). ↑
  12.  David A. Hoffman & Anton Strezhnev, Leases as Forms, 19 J. Empirical Legal Stud. 90, 90–91 (2022); see also Furth-Matzkin, Unexpected Use, supra note 11, at 17–23 (detailing contract provisions in lease housing contracts that courts have found to be unenforceable or that are prohibited by state statutes). ↑
  13.  Evan P. Starr, J.J. Prescott & Norman D. Bishara, Noncompete Agreements in the US Labor Force, 64 J.L. & Econ. 53, 60, 81 (2021) [hereinafter Starr et al., Noncompete Agreements]. ↑
  14.  Edward K. Cheng, Ehud Guttel & Yuval Procaccia, Unenforceable Waivers, 76 Vand. L. Rev. 571, 577 (2023). ↑
  15.  See Tess Wilkinson-Ryan, The Perverse Consequences of Disclosing Standard Terms, 103 Cornell L. Rev. 117, 139–49, 139 nn.105–10 (2017) (surveying research); Meirav Furth-Matzkin & Roseanna Sommers, Consumer Psychology and the Problem of Fine-Print Fraud, 72 Stan. L. Rev. 503, 516 (2020) (explaining that laypeople may be discouraged from breaking a contract, even if they suspect the contract is unfair, because they assume written contracts are binding); Meirav Furth-Matzkin, The Harmful Effects of Unenforceable Contract Terms: Experimental Evidence, 70 Ala. L. Rev. 1031, 1044–51, 1053–56 (2019) [hereinafter Furth-Matzkin, Harmful Effects] (showing through experiments that unenforceable terms adversely affect tenants’ behavioral intentions and legal predictions); Evan Starr, J.J. Prescott & Norman Bishara, The Behavioral Effects of (Unenforceable) Contracts, 36 J.L. Econ. & Org. 633, 651–55, 659–66 (2020) [hereinafter Starr et al., Behavioral Effects] (suggesting that noncompetes have an effect on behavior regardless of their enforceability, and that noncompetes are associated with longer employee tenure and reduced likelihood of leaving for a competitor). For examples of older evidence in this vein, see also Dennis P. Stolle & Andrew J. Slain, Standard Form Contracts and Contract Schemas: A Preliminary Investigation of the Effects of Exculpatory Clauses on Consumers’ Propensity to Sue, 15 Behav. Scis. & L. 83, 91–93 (1997) (finding that consumers tend to believe that all contract terms are enforceable and that exculpatory language in form contracts appears to deter consumers’ propensity to seek compensation); Curtis J. Berger, Hard Leases Make Bad Law, 74 Colum. L. Rev. 791, 815–16 (1974) (explaining that “[u]ninformed or misinformed parties to a contract are easily terrorized or disarmed into foregoing their rights and remedies”); Mueller, supra note 10, at 248, 272–74 (suggesting that “the bulk of tenants [do] not appear to question the validity of terms found in their leases”). ↑
  16.  See infra Part I (surveying research). ↑
  17.  See infra Section I.C. ↑
  18.  Exec. Order No. 14036, 86 Fed. Reg. 36987, 36987, 36992 (July 9, 2021) (discussing noncompete agreements). ↑
  19.  Non-Compete Clause Rule, 89 Fed. Reg. 38342, 38342 (May 7, 2024) (to be codified at 16 C.F.R. pts. 910, 912). But see Ryan, LLC v. Fed. Trade Comm’n, 746 F. Supp. 3d 369, 390 (N.D. Tex. 2024) (“The [Non-Compete] Rule shall not be enforced or otherwise take effect on its effective date of September 4, 2024, or thereafter.”), appeal docketed, No. 24-10951 (5th Cir. Oct. 24, 2024). ↑
  20.  Memorandum GC 23-08 from Jennifer A. Abruzzo, Gen. Couns., Nat’l Lab. Rels. Bd., to All Reg’l Dirs., Officers-in-Charge, and Resident Officers, Nat’l Lab. Rels. Bd. (May 30, 2023), https://nlrbresearch.com/pdfs/09031d4583a87168.pdf [https://perma.cc/D6QA-2‌RPG]. ↑
  21.  Registry of Supervised Nonbanks That Use Form Contracts to Impose Terms and Conditions That Seek to Waive or Limit Consumer Legal Protections, 88 Fed. Reg. 6906, 6906 (proposed Feb. 1, 2023) [hereinafter Registry of Supervised Nonbanks That Use Form Contracts]. ↑
  22.  See infra Section I.C. ↑
  23.  The FTC’s recent policy actions, for instance, focus only on noncompetes in employment contracts, while the CFPB’s actions focus on waivers in consumer finance. Compare Non-Compete Clause Rule, 89 Fed. Reg. at 38342 (providing that it is an unfair method of competition to enter into noncompete clauses with workers after the Rule’s effective date), with Registry of Supervised Nonbanks That Use Form Contracts, supra note 21 (proposing that nonbanks be required to register with the CFPB if they use contract terms designed to waive consumers’ legal protections or limit how consumers enforce their rights). ↑
  24.  See, e.g., Furth-Matzkin & Sommers, supra note 15, at 544–45 (suggesting “statutory damages for fine-print fraud” as part of a set of policy solutions); Radin, supra note 2, at 147–48 (mentioning the possibility of fines as a component of a public regulatory regime for boilerplate terms). A more thorough consideration of an affirmative cause of action can be found in Brady Williams’s Unconscionability as a Sword: The Case for an Affirmative Cause of Action, 107 Calif. L. Rev. 2015, 2041, 2043–45, 2047 (2019), which argues for developing an affirmative remedy in the context of unconscionable contract provisions. ↑
  25.  See infra Part II. ↑
  26.  See infra Part II. ↑
  27.  See, e.g., Kathryn A. Sabbeth & Jessica K. Steinberg, The Gender of Gideon, 69 UCLA L. Rev. 1130, 1143–48, 1150–61 (2023); Tonya L. Brito, Kathryn A. Sabbeth, Jessica K. Steinberg & Lauren Sudeall, Racial Capitalism in the Civil Courts, 122 Colum. L. Rev. 1243, 1268–77 (2022). ↑
  28.  See infra Part II. ↑
  29.  See Arthur Allen Leff, Contract as Thing,
    19

    Am. U. L. Rev. 131, 131–32, 147–52, 155 (1970); see also Douglas G. Baird, The Boilerplate Puzzle, 104 Mich. L. Rev. 933, 933–37 (2006) (comparing the legal treatment of boilerplate and fine print contract terms to “hidden” attributes of products). ↑

  30.  Leff, supra note 29, at 153. ↑
  31.  See infra Part II. ↑

Political Mootness

Congress and the executive have engaged in major clashes over the scope of their powers, particularly involving Congress’s subpoena power and power of the purse. In the last two decades, none of these disputes with the government represented on both sides of the “v” has ended in a final judgment on the merits. This Article develops the concept of “political mootness.” As elections take place and the parties in interest to litigation change, cases become politically moot. In the judiciary, political mootness manifests in three ways: legal mootness, separation-of-powers settlements conditional on vacatur of judicial opinions, or executive discretion in intra-branch prosecutions.

But political mootness also affects the coordinate branches. Through a series of original interviews,** **.This Article draws in part on interviews conducted by the author with confidential sources. Out of respect to the confidential nature of these interviews, and to preserve promises of anonymity made to sources, the Virginia Law Review did not independently verify the content of these interviews. Representations concerning the substance of these interviews are the sole responsibility of the author.Show Morethis Article shows that Congress self-constrains its authority preemptively to avoid litigation. Congress is aware that litigation threatens to drag out disputes beyond its electoral mandate and so pivots to use less than the full scope of its authority. These interviews also reveal a widespread practice of “friendly subpoenas,” requested by putative witnesses for legal, political, or other cover. Although Congress appears to have significant authority, when executive witnesses are truly recalcitrant, that authority is at its lowest potency.

With this broader context for inter-branch conflicts, this Article returns to take on the role of adjudication in those conflicts. Adjudication performs neither law declaration nor dispute resolution when the United States is represented on both sides. Instead, this Article argues, adjudication is a forum for tripartite dialogue about the structural constitution’s boundaries. In this frame, some aspects of political mootness are desirable, but other aspects have entrenched structural disadvantages that Congress faces. This Article offers some proposals to strengthen Congress’s position in disputes with the executive, while taking advantage of some of political mootness’s features.

Introduction

In times of divided government, high-stakes conflicts between the political branches erupt. Sometimes it’s constitutional hardball.1 1.Mark Tushnet, Constitutional Hardball, 37 J. Marshall L. Rev. 523, 523 (2004) (naming the phenomenon where “political claims and practices—legislative and executive initiatives—that are without much question within the bounds of existing constitutional doctrine and practice but that are nonetheless in some tension with existing pre-constitutional understandings”).Show More Other times, it’s a constitutional showdown.2 2.See generally Eric A. Posner & Adrian Vermeule, Constitutional Showdowns, 156 U. Pa. L. Rev. 991, 991 (2008) (“Showdowns occur between the President and the courts, between Congress and the courts, as well as between the President and Congress. Indeed, some showdowns involve all three branches simultaneously, or threaten to do so.”).Show More And sometimes, it’s constitutional no-ball.3 3.See Matthew Callahan & Reuben Fischer-Baum, Where the Trump Administration Is Thwarting House Oversight, Wash. Post (Oct. 11, 2019), https://www.washingtonpost.com/gr‌aphics/2019/politics/trump-blocking-congress (cataloguing Trump Administration refusals to comply with congressional subpoenas).Show More Since the George W. Bush Administration, the House has subpoenaed sitting cabinet officials and former White House Counsels; it has investigated a former President’s involvement with a riot on the Capitol; and it has sought to enforce its power of the purse through shutdowns. The executive branch has pushed back, using claims of executive privilege, enforcement discretion, or other tools.4 4.See infra Part I.Show More In some, but importantly not all,5 5.See infra Part II.Show More instances, the House has called on the federal judiciary to back its use of authority. What goes into the decision to initiate litigation? And what function does that litigation serve?

This Article examines the role of adjudication in apex separation-of-powers disputes: cases brought by Congress against the president and intra-branch prosecutions. I argue that these cases become “politically moot” when elections result in unified government and the interested parties to the case change. Political mootness, I will show, is a concept with legal and political dimensions. It has some positive features, but it can also entrench structural disadvantages that burden Congress when it takes on the executive.

The Article is focused on “apex powers” disputes.6 6.See Aziz Z. Huq, Legal or Political Checks on Apex Criminality: An Essay on Constitutional Design, 65 UCLA L. Rev. 1506, 1511–14 (2018) (embracing the looseness of the term “apex criminality” to describe offenses committed by high-level officials).Show More This includes a subset of separation-of-powers cases that implicate core constitutional powers: litigation between the political branches as parties and intra-branch prosecutions. I include, for example, when a House committee sues to enforce a subpoena against White House officials.7 7.I exclude suits where government actors are not parties on both sides of the litigation, which would include challenges over whether congressional legislation impermissibly infringes on executive power. I draw this line because federal courts operate differently when adjudicating disputes between branches as parties to litigation. See Z. Payvand Ahdout, Separation-of-Powers Avoidance, 132 Yale L.J. 2360, 2363, 2365–66 (2023).Show More Critically, this set of cases includes power issues such as congressional subpoena power, the scope of governmental privileges and immunities, and the line between Congress’s appropriations power and the president’s enforcement discretion.

It turns out that in the last two decades, these cases have never reached a final judgment on the merits. As these cases take a protracted path through the judiciary, they do so against the backdrop of election cycles. With time, the parties in interest change. The House moves from Democratic to Republican control or the presidency changes hands. Scholarship has accounted for the ways elections change, for example, the positions that the Justice Department takes in litigation8 8.See, e.g., Cristina M. Rodríguez, The Supreme Court, 2020 Term—Foreword: Regime Change, 135 Harv. L. Rev. 1, 4 (2021); Michael R. Dreeben, Stare Decisis in the Office of the Solicitor General, 130 Yale L.J.F. 541, 552 (2021); Margaret H. Lemos & Deborah A. Widiss, The Solicitor General, Consistency, and Credibility, 100 Notre Dame L. Rev. 621, 623–24 (2025) (examining multiple explanations for the Solicitor General’s changes in positions).Show More or the incentives that elected officials have in initiating or dropping litigation.9 9.Zachary D. Clopton & Katherine Shaw, Public Law Litigation and Electoral Time, 2023 Wis. L. Rev. 1513, 1514.Show More But what about the cases that are already in federal court? How do they end?

Part I documents a concept I call “political mootness.” In the judiciary, political mootness takes three forms. First, and most straightforwardly, some of these cases are rendered legally moot when the parties in control change. The issue in the case is no longer “live,” thus precluding judicial review. For example, in an appropriations challenge, a new president may not continue to spend funds in the way the House alleged was ultra vires.10 10.See, e.g., Yellen v. U.S. House of Representatives, 142 S. Ct. 332 (2021) (vacating as legally moot the dispute over border wall funding initiated by the House during the first Trump Administration); Petition for a Writ of Certiorari at 11, Yellen, 142 S. Ct. 332 (No. 20-1738) (“Following the change in Administration, and consistent with the President’s discretion that ‘no more American taxpayer dollars be diverted to construct a border wall,’ [the Department of Defense] has canceled all border-wall projects and discontinued using any of the challenged funds for any further construction.” (quoting Proclamation No. 10142, 86 Fed. Reg. 7225 (Jan. 27, 2021))).Show More

Second, political mootness comes to fruition when the parties negotiate separation-of-powers settlements. When elections result in a rotation of power that puts the same political party in control of both the House and the White House, they often reach a settlement conditional on universal vacatur of every opinion in the case.11 11.This has one qualified exception. See infra Section I.B.Show More Although this separation-of-powers settlement has become the dominant resolution in modern apex litigation, this is the first Article to identify its existence and incorporate it into structural constitutional scholarship. It is somewhat surprising that cases that receive so much attention—from litigation over President Obama’s allegedly ultra vires funding of the Affordable Care Act (“ACA”)12 12.See U.S. House of Representatives v. Burwell, 130 F. Supp. 3d 53, 63 (D.D.C. 2015).Show More to that over former White House Counsel Don McGahn’s categorical refusal to testify before Congress13 13.See Comm. on the Judiciary, U.S. House of Representatives v. McGahn, 415 F. Supp. 3d 148, 153 (D.D.C. 2019).Show More—still have discoveries to be unearthed. This may be because too often, attention is focused on the Supreme Court (or, more accurately, on anticipation of the Supreme Court’s review). But these cases may never get there. Across cases, buried in dockets, is evidence of a separation-of-powers agreement between the branches of government that leaves much to be uncovered.

Third, political mootness manifests in intra-branch criminal cases. Almost from their inception, the prosecutions of then-former President Trump prompted commentary and anxiety about whether the cases could resolve before the November 2024 election.14 14.See, e.g., James D. Zirin, Can Trump Conceivably Beat the Legal Clock—and the Rap?, The Hill (Oct. 9, 2023, 1:30 PM), https://thehill.com/opinion/judiciary/4244738-can-trump-c‌onceivably-beat-the-legal-clock-and-the-rap/ [https://perma.cc/LC75-KFQT] (“The D.C. claim of presidential immunity is unlikely to win dismissal of the case, but it may succeed in delaying his D.C. trial, now scheduled for March 4, to a date known only in Neverland.”); David A. Graham, The Cases Against Trump: A Guide, The Atlantic (Jan. 6, 2025), https://ww‌w.theatlantic.com/ideas/archive/2025/01/donald-trump-legal-cases-charges/675531.Show More Of course, they did not. And upon President Trump’s election, the Special Counsel consulted binding Department of Justice (“DOJ”) policy, which became binding on the courts: a sitting president cannot be prosecuted.15 15.1 Jack Smith, Final Report on the Special Counsel’s Investigations and Prosecutions 1 (2025), https://www.justice.gov/storage/Report-of-Special-Counsel-Smith-Volume-1-Januar‌y-2025.pdf [https://perma.cc/3UAE-553F].Show More

Political mootness is borne of a design feature of American democracy: time. In the political branches, time plays a constraining role on authority. Through fixed and regular elections, the Constitution places a time limit on the power of any individual president or member of Congress. But time operates in a different direction (and more indirectly) in the judicial branch. It is not fixed and regular elections that constrain federal judges with life tenure. Instead, one constraining and fundamental feature of our democratic judicial system16 16.See Judith Resnik, Judicial Selection and Democratic Theory: Demand, Supply, and Life Tenure, 26 Cardozo L. Rev. 579, 590 (2005) (“[B]eing a judge within democratic governments ought to entail a set of practices distinct from that of judging in nondemocratic polities.”).Show More is that every party is guaranteed process.17 17.U.S. Const. amend. V.Show More But process takes time. When protracted judicial process converges with elections, the result is political mootness. As the parties in interest to litigation change, their political interests no longer align with the legal interests they sought to vindicate.

To understand the role adjudication plays in apex litigation, we must understand what it means for Congress to choose to go to court. Through a series of original interviews with individuals who conducted the investigation for the House Select Committee to Investigate the Attack on the Capitol (“the Committee”), Part II examines their investigatory strategy and legal decision-making.18 18.I set out to understand the Select Committee’s investigative and legal decision-making and how, in particular, that decision-making was informed by the timeline of the investigation. I spoke with senior staffers who had worked for the Committee. Some individuals’ roles were exclusively for the Committee, others served broader roles in the House and had the Committee within their portfolios. Most individuals served in a legal capacity. I also spoke with senior staffers with experience in the Senate to understand the similarities and differences between House and Senate investigations and litigation. I recognize that the pool of individuals—generally related to the Committee’s work, serving in a legal role, and willing to speak with me—may suffer from selection bias. Although I used semi-structured interviews, I make no claims about interview design or comprehensiveness. I include them to add some context from congressional decision-makers, a contingent that is not often heard from directly in legal scholarship concerning the separation of powers. Cf. David E. Pozen, The Leaky Leviathan: Why the Government Condemns and Condones Unlawful Disclosures of Information, 127 Harv. L. Rev. 512, 520 n.21 (2013) (using interviews with sources inside the executive branch to add “texture” to an analysis of governmental leaks). I also assured the individuals anonymity.Show More Through these interviews, Part II shows that, first, familiar words like “subpoena” and “contempt” do not have the same meaning within Congress as they do in federal court. Second, there is a widespread use of so-called “friendly subpoenas” in congressional investigations. These are subpoenas that are requested by putative witnesses for legal, political, or social cover. On the outside, these subpoenas look no different from subpoenas of truly recalcitrant witnesses. But this means that the House is not as aggressive with its power as it appears to outside observers. Indeed, Part II further shows that the House self-constrains its authority in part because of the specter of political mootness. These interviews show some evidence of the structural disadvantage the House suffers from in disputes with the executive. They demonstrate the House’s need for an ally to back its use of power. But these interviews also show how recalcitrant witnesses can use courts and legal process (or the mere threat of them) to run out the clock on a congressional investigation.

With this richer understanding of what happens outside, before, and during apex litigation, Part III turns back to political mootness and what it means for the role of adjudication in apex disputes. Focusing on the special problem of separation-of-powers settlements, Part III argues that courts engage in neither law declaration nor dispute resolution when they are called on to adjudicate apex disputes. Rather than dismissing these cases as outside of the judicial role, Part III calls for recasting the role that courts play as a participant in tripartite constitutional dialogue and reframes the legal outputs of these cases in terms of constitutional dialogue. Part IV turns to the normative, arguing that within the frame of dialogue, some aspects of political mootness are desirable. But political mootness is also subject to abuse. Part IV suggests some ways to address its shortcomings, while capitalizing on its advantages.

Structural constitutional scholarship is in need of a conceptual frame and vocabulary to discuss structural constitutional litigation between the three branches of government. That conceptual frame cannot be sheared of its politics. Political mootness is one conceptual structure that helps us better understand the modern fractures, allocations, and distribution of power between our three branches of government.

  1. ** This Article draws in part on interviews conducted by the author with confidential sources. Out of respect to the confidential nature of these interviews, and to preserve promises of anonymity made to sources, the Virginia Law Review did not independently verify the content of these interviews. Representations concerning the substance of these interviews are the sole responsibility of the author. ↑
  2.  Mark Tushnet, Constitutional Hardball, 37 J. Marshall L. Rev. 523, 523 (2004) (naming the phenomenon where “political claims and practices—legislative and executive initiatives—that are without much question within the bounds of existing constitutional doctrine and practice but that are nonetheless in some tension with existing pre-constitutional understandings”). ↑
  3.  See generally Eric A. Posner & Adrian Vermeule, Constitutional Showdowns, 156 U. Pa. L. Rev. 991, 991 (2008) (“Showdowns occur between the President and the courts, between Congress and the courts, as well as between the President and Congress. Indeed, some showdowns involve all three branches simultaneously, or threaten to do so.”). ↑
  4.  See Matthew Callahan & Reuben Fischer-Baum, Where the Trump Administration Is Thwarting House Oversight, Wash. Post (Oct. 11, 2019), https://www.washingtonpost.com/gr‌aphics/2019/politics/trump-blocking-congress (cataloguing Trump Administration refusals to comply with congressional subpoenas). ↑
  5.  See infra Part I. ↑
  6.  See infra Part II. ↑
  7.  See Aziz Z. Huq, Legal or Political Checks on Apex Criminality: An Essay on Constitutional Design, 65 UCLA L. Rev. 1506, 1511–14 (2018) (embracing the looseness of the term “apex criminality” to describe offenses committed by high-level officials). ↑
  8.  I exclude suits where government actors are not parties on both sides of the litigation, which would include challenges over whether congressional legislation impermissibly infringes on executive power. I draw this line because federal courts operate differently when adjudicating disputes between branches as parties to litigation. See Z. Payvand Ahdout, Separation-of-Powers Avoidance, 132 Yale L.J. 2360, 2363, 2365–66 (2023). ↑
  9.  See, e.g., Cristina M. Rodríguez, The Supreme Court, 2020 Term—Foreword: Regime Change, 135 Harv. L. Rev. 1, 4 (2021); Michael R. Dreeben, Stare Decisis in the Office of the Solicitor General, 130 Yale L.J.F. 541, 552 (2021); Margaret H. Lemos & Deborah A. Widiss, The Solicitor General, Consistency, and Credibility, 100 Notre Dame L. Rev. 621, 623–24 (2025) (examining multiple explanations for the Solicitor General’s changes in positions). ↑
  10.  Zachary D. Clopton & Katherine Shaw, Public Law Litigation and Electoral Time, 2023 Wis. L. Rev. 1513, 1514. ↑
  11.  See, e.g., Yellen v. U.S. House of Representatives, 142 S. Ct. 332 (2021) (vacating as legally moot the dispute over border wall funding initiated by the House during the first Trump Administration); Petition for a Writ of Certiorari at 11, Yellen, 142 S. Ct. 332 (No. 20-1738) (“Following the change in Administration, and consistent with the President’s discretion that ‘no more American taxpayer dollars be diverted to construct a border wall,’ [the Department of Defense] has canceled all border-wall projects and discontinued using any of the challenged funds for any further construction.” (quoting Proclamation No. 10142, 86 Fed. Reg. 7225 (Jan. 27, 2021))). ↑
  12.  This has one qualified exception. See infra Section I.B. ↑
  13.  See U.S. House of Representatives v. Burwell, 130 F. Supp. 3d 53, 63 (D.D.C. 2015). ↑
  14.  See Comm. on the Judiciary, U.S. House of Representatives v. McGahn, 415 F. Supp. 3d 148, 153 (D.D.C. 2019). ↑
  15.  See, e.g., James D. Zirin, Can Trump Conceivably Beat the Legal Clock—and the Rap?, The Hill (Oct. 9, 2023, 1:30 PM), https://thehill.com/opinion/judiciary/4244738-can-trump-c‌onceivably-beat-the-legal-clock-and-the-rap/ [https://perma.cc/LC75-KFQT] (“The D.C. claim of presidential immunity is unlikely to win dismissal of the case, but it may succeed in delaying his D.C. trial, now scheduled for March 4, to a date known only in Neverland.”); David A. Graham, The Cases Against Trump: A Guide, The Atlantic (Jan. 6, 2025), https://ww‌w.theatlantic.com/ideas/archive/2025/01/donald-trump-legal-cases-charges/675531. ↑
  16.  1 Jack Smith, Final Report on the Special Counsel’s Investigations and Prosecutions 1 (2025), https://www.justice.gov/storage/Report-of-Special-Counsel-Smith-Volume-1-Januar‌y-2025.pdf [https://perma.cc/3UAE-553F]. ↑
  17.  See Judith Resnik, Judicial Selection and Democratic Theory: Demand, Supply, and Life Tenure, 26 Cardozo L. Rev. 579, 590 (2005) (“[B]eing a judge within democratic governments ought to entail a set of practices distinct from that of judging in nondemocratic polities.”). ↑
  18.  U.S. Const. amend. V. ↑

  19.  I set out to understand the Select Committee’s investigative and legal decision-making and how, in particular, that decision-making was informed by the timeline of the investigation. I spoke with senior staffers who had worked for the Committee. Some individuals’ roles were exclusively for the Committee, others served broader roles in the House and had the Committee within their portfolios. Most individuals served in a legal capacity. I also spoke with senior staffers with experience in the Senate to understand the similarities and differences between House and Senate investigations and litigation. I recognize that the pool of individuals—generally related to the Committee’s work, serving in a legal role, and willing to speak with me—may suffer from selection bias. Although I used semi-structured interviews, I make no claims about interview design or comprehensiveness. I include them to add some context from congressional decision-makers, a contingent that is not often heard from directly in legal scholarship concerning the separation of powers. Cf. David E. Pozen, The Leaky Leviathan: Why the Government Condemns and Condones Unlawful Disclosures of Information, 127 Harv. L. Rev. 512, 520 n.21 (2013) (using interviews with sources inside the executive branch to add “texture” to an analysis of governmental leaks). I also assured the individuals anonymity. ↑

Antitrust’s Interdependence Paradox

Introduction

Price-fixing conspiracies are the “supreme evil” that Congress intended antitrust laws to deter and to punish.1 1.See Verizon Commc’ns, Inc. v. Law Offs. of Curtis V. Trinko, LLP, 540 U.S. 398, 408 (2004) (describing collusion as “the supreme evil of antitrust”).Show More Because price fixers face ten-year prison sentences, criminal fines, and private liability often measured in the hundreds of millions of dollars, price-fixing conspirators generally undertake elaborate measures to conceal their collusion. Consequently, direct evidence of collusion is rarely available, and private plaintiffs must rely on circumstantial evidence to prove their antitrust cases.

Remarkably, federal courts have applied an unproven economic theory to effectively immunize the most likely price-fixing conspiracies from antitrust liability. Price-fixing cartels are more probable in concentrated markets with very few firms, generally called oligopoly markets. Price fixing requires coordination and concealment, which are easier in oligopoly markets. Recent antitrust opinions, however, have made it significantly more difficult for antitrust plaintiffs to prove collusion through circumstantial evidence in precisely these markets, the ones most prone to price-fixing conspiracies. This creates a paradox in antitrust law: the most likely conspiracies are the hardest to prove.

The predicament flows from judicial misapplication of interdependence theory. Interdependence describes the phenomenon of businesses pricing their products based on predicting how their competitors will respond.2 2.See 6 Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law: An Analysis of Antitrust Principles and Their Application ¶ 1410a, at 71 (4th ed. 2017) (“‘Interdependence’ refers to a state of affairs in which each person’s actions depend on his perception of how others will act.”).Show More Interdependence theory predicts that firms in a concentrated market may be able to “coordinat[e] their pricing without an actual agreement to do so.”3 3.In re Text Messaging Antitrust Litig., 782 F.3d 867, 871 (7th Cir. 2015).Show More Invoking this interdependence theory, federal courts assert that price-fixing conspiracies are unlikely to occur in concentrated markets because the rival firms do not need to conspire: they can simply observe each other from a distance. Consequently, judges discount circumstantial evidence of collusion when price-fixing defendants operate in market structures that are the most conducive to price fixing. As a result, price-fixing conspirators are often insulated from antitrust liability.4 4.See Louis Kaplow, Competition Policy and Price Fixing 133–45 (2013); see also William H. Page, Pleading, Discovery, and Proof of Sherman Act Agreements: Harmonizing Twombly and Matsushita, 82 Antitrust L.J. 123, 130 & n.36 (2018) (describing Kaplow’s “paradox of proof”).Show More

Part I of this Article explains how antitrust plaintiffs must often prove price fixing through circumstantial evidence. This generally requires the plaintiffs to show that the defendants raised their prices in unison and that these parallel price increases were the result of collusion, not independent decision-making. Plaintiffs prove the second step by presenting evidence of plus factors, which are facts and circumstances that make it more likely that price rises were produced by collusion rather than independent parallel action. Courts have long recognized market structure as an important plus factor because concentrated markets are more susceptible to illegal cartelization. Firms in such markets will find it easier to negotiate their cartel agreement, to exclude non-cartel rivals from the market, to enforce their illegal accord, and to conceal their price-fixing conspiracy from antitrust officials and consumers.

Part II explains how courts have also assumed that price-fixing conspiracies do not occur in concentrated markets. Using interdependence theory, several courts have eliminated market concentration as a plus factor even though market concentration facilitates price-fixing conspiracies. Moreover, courts have invoked interdependence theory to drain a wide variety of plus factors of their probative value. And courts sometimes disparage expert testimony that explains why the proffered plus factors point to collusion. Ultimately, courts have imposed heightened evidentiary burdens to prove price-fixing claims in oligopoly markets without providing any guidance on how to satisfy these heightened burdens.

Part III demonstrates that—despite what interdependence theory predicts—firms in concentrated markets still need to conspire to fix prices. An explicit conspiracy has many advantages over relying on interdependence: prices can be more easily fixed, negotiated, and renegotiated with actual conversations among rival firms; cartels can create enforcement mechanisms, which interdependence lacks; and actual conspirators can avoid miscommunications, which can destabilize price-raising aspirations based on interdependence. Empirical evidence shows unquestionably that firms in concentrated markets do, in fact, conspire to fix prices.

Part IV discusses how federal courts misapprehend the relationship between interdependence theory and plus factors. Interdependence theory does not negate plus factors; plus factors disprove interdependence theory. Plus factors help judges and juries “distinguish between innocent interdependence and illegal conspiracy.”5 5.Blomkest Fertilizer, Inc. v. Potash Corp. of Sask., 203 F.3d 1028, 1043 (8th Cir. 2000) (en banc) (Gibson, J., dissenting).Show More The fact that defendants are in a concentrated market represents an important plus factor because concentrated markets facilitate price-fixing collusion. But this evidence must be supplemented by other plus factors. More effort should be undertaken to educate federal judges about how price-fixing conspiracies actually operate. This would reduce the risk of courts invoking interdependence theory to discount plus factors, especially those that are unrelated to market concentration.

  1.  See Verizon Commc’ns, Inc. v. Law Offs. of Curtis V. Trinko, LLP, 540 U.S. 398, 408 (2004) (describing collusion as “the supreme evil of antitrust”). ↑

  2.  See 6 Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law: An Analysis of Antitrust Principles and Their Application ¶ 1410a, at 71 (4th ed. 2017) (“‘Interdependence’ refers to a state of affairs in which each person’s actions depend on his perception of how others will act.”). ↑

  3.  In re Text Messaging Antitrust Litig., 782 F.3d 867, 871 (7th Cir. 2015). ↑

  4.  See Louis Kaplow, Competition Policy and Price Fixing 133–45 (2013); see also William H. Page, Pleading, Discovery, and Proof of Sherman Act Agreements: Harmonizing Twombly and Matsushita, 82 Antitrust

    L.J

    . 123, 130 & n.36 (2018) (describing Kaplow’s “paradox of proof”). ↑

  5.  Blomkest Fertilizer, Inc. v. Potash Corp. of Sask., 203 F.3d 1028, 1043 (8th Cir. 2000) (en banc) (Gibson, J., dissenting). ↑

©Virginia Law Review Association. All rights reserved.