Dormant Doctrine Research Articles

One Toke Too Far: The Demise of the Dormant Commerce Clause's Extraterritoriality Doctrine Threatens the Marijuana-Legalization Experiment

This Article argues that the pending feuds between neighboring states over marijuana decriminalization demonstrate the need for a strict doctrine limiting a state’s regulatory authority to its own borders. Precedent recognizes that the dormant Commerce Clause (DCC) “precludes the application of a state statute to commerce that takes place wholly outside the State’s borders, whether or not the commerce has effects within the state.” This prohibition protects “the autonomy of the individual States within their respective spheres” by dictating that “[n]o state has the authority to tell other polities what laws they must enact or how affairs must be conducted.” But this principle was called into doubt last summer by the Tenth Circuit, which concluded that this “most dormant doctrine in [DCC] jurisprudence” had withered and died from nonuse. The Tenth Circuit’s conclusion, which approved Colorado’s purported direct regulation of coal-fired power generation in Nebraska, ironically coincided Nebraska’s (and Oklahoma’s) attempt to enjoin Colorado’s pot-friendly laws. Nebraska contends that Colorado’s commercial pot market allows marijuana to “flow...into [Nebraska], undermining [its] own marijuana ban[], draining [its] treasur[y], and placing stress on [its] criminal justice system[].” While Colorado celebrated its new-found power to impose its legislative judgments on Nebraskans, the festivities might be short lived. Colorado failed to recognize the impact the extraterritorial doctrine’s apparent demise will have on its own marijuana-legalization experiment. If Colorado is empowered to regulate coal burning in Nebraska because of its effects in Colorado, what prevents Nebraska from projecting its own laws across the border to regulate Colorado marijuana transactions that affect a substantial number of Nebraskans?

Re-Pricing Through Disruption in Oligopolies with Tacit Collusion: A Framework for Abuse of Collective Dominance Law

This paper proposes an understanding of abuse of collective dominance or shared monopolization that does not outlaw oligopolistic tacit collusion as such, but that reputes abusive a set of tactics adopted by tacitly colluding oligopolists exposed to disruption. As much as deviation is an internal force likely to undermine tacit collusion, disruption is a powerful external force that can cause a return to the competitive equilibrium. The sources of disruption may be technological (eg radical innovation), economic (eg entry of a low-cost player) or legal (eg tax reform). But disruption may never deliver its pro-competitive promises if oligopolists tinker to restore a collusive equilibrium. This paper suggests that competition agencies (“agencies”) could use the dormant doctrine of abuse of collective dominance to illegalize oligopolists’ conduct that seeks to “re-price” through disruption, and elude its pro-competitive effect. This rationalized definition of abuse of collective dominance would both promote legal certainty by clarifying the messy state of the law in this field, and ensure economic efficiency by giving agencies a market-triggered ex post remedy in mature oligopolies with lethargic M&A activity.This paper is divided in IV sections. First, it explains the case for more ex post enforcement in oligopolistic markets with tacit collusion (I). Second, it describes how disruption can undermine tacit collusion, and what oligopolists can do to overcome the competitive effect of disruption (II). Third, it discusses the pros and cons of this approach through the error costs framework initially delineated by Easterbrook (III). Fourth, it skims through EU cases decided at Member State level, to gain a better understanding of the existing antitrust policies on collective dominance (IV).