What About Alternative Universes

I came across this article in the Wall Street Journal yesterday. And, as the official legal geek in this convocation of ours, it led me to think about contracts generally. The world of business revolves around contract language. Millions of dollars are spent by lawyers sitting in windowless conference rooms gloomily crafting arcane legalese to cover every contingency. Now, with an uncanny prescience (or is it more of a Nostradomus or Amazing Kreskin-like prediction), lawyers are eagerly anticipating intergalactic communications. This just seems silly, and one wonders how many billable hours were expended making sure that Bulgarian folk singers had their rights tied up in the event that satellite broadcasts of America’s Got Talent make their way to Jupiter. (We know the Germans love David Hasselhoff, but will he play on Neptune?)

In all seriousness, someone probably thought this was covering the bases, and ensuring that someone didn’t try to use some satellite transmission of data or the next internet to illicitly transmit programming. But, in all honesty, contracts never cover any contingency. Companies dissatisfied with the result of a contract will always find alternative interpretations that serve their own interests, and will go to court to fight it out. I had a case like this recently. A clause in the contract said if the selling company got sued for conduct pre-closing, they were on the hook for it. The selling company got sued for antitrust violations, and voluntarily settled. They seized on another provision of the contract, and argued that was the applicable one. After 3 years of depositions, briefs, and appeals, my side (the purchasing company) won. The cost was close to $5M, for a relatively small case (less than $40M on the hook). My point is that attempts to bullet-proof contracts don’t work within our legal system, and companies are stuck defending frivolous lawsuits based on attempts to endrun the meaning and language of agreements. I have no solution.
In the meantime, I will think about whether the Bulgarian throat-singers are bound in an imaginary world of my own creation. I think I have an argument either way.

Mike O’Malley Would Be Proud

OK, I study legal and diplomatic history. I work as an antitrust lawyer. I admit it, contrary to the masses (are there masses of historians?) I don’t really get into social history all that much. I tend to want to “fast-forward” through the gender, race and class issues sometimes. But sometimes, I think I’m wrong, and this is really the fascinating stuff.

Walter Friedman’s Birth of a Salesman is one of those moments. I can’t think of a book where someone has brought issues of gender home in a meaningful way. Some books (hmm, let’s say the author’s name rhymes with Schminkley), pay lip service to providing some attention to gender, race or ethnicity, and appear to do so with one eye on the politically correct clock. Friedman, conversely, really latches on to the image of masculinity as a desirable trait for salesman during this developmental period. Military imagery, hale-fellow well-met bonhomie, and other stock masculine traits were desirable, and inculcated into these commercial travelers and salesmen by the “scientific” sales managers. Women were courted by management as assets to their husband-salesmen, and instructed to provide support services, bribed with the promise of some household item.

Fascinating stuff–I may have to read these things more carefully. Mike, I stand corrected–perhaps we have more in to talk about than we thought!

What’s Going On With Antitrust Enforcement

So, I am sure you all have subscriptions to Global Competition Review (sitting right up there next to Entertainment Weekly, Us Weekly and Time, no doubt.)  I don’t have a subscription either, but I recently co-authored an article reviewing recent trends in antitrust enforcement, and making some predictions in the future.  I attach a link here for your reading pleasure.

The short version is that the agencies (DOJ and FTC) are gearing up for increased enforcement of the Sherman Act Section 2 (monopolies) and the FTC Act Section 5 (sort of a catch-all).  However, the rate of filing of private actions has diminished over the past year or so–we don’t know yet how the increased government intervention will play out, but the financial incentives are certainly there for non-dominant firms to “ride-along” with the government.  Our theory is that loss of access to capital credit markets has made companies risk- (and litigation-) adverse.

As required by my publisher, this is an extract from the 2010 Antitrust Review of the Americas- a www.GlobalCompetitionReview.com special report.

Well I am back in San Francisco (I should get an apartment here–if anyone can actually afford to live here).  Reading the Henry Ford book, about half-way done.  One of the key insights thus far is that automobile companies enjoyed an exalted status–sort of like tech companies like Microsoft or Apple enjoy now.  I am not sure that the car companies have the same cache now.  While most people understand the economic consequences of Ford or GM failing, I don’t think there is the same emotional reaction now as ten or twenty or fifty years ago would have engendered.

For example, GM is undergoing just a disastrous turn of events.  The Saturn deal is either dead or close to it, Hummer and Opel deals are sputtering, but while people are aware of it, there just does not seem to be any real sadness amongst the American people for the decline of this iconic American company.  OK, so the Saturn brand is only about 15 or 20 years old, and was never all that beloved (although it is odd that it never really took off).  I don’t remember the last time I saw an Opel, and Hummers?  Hardly an American classic. But it is the lack of any real national feeling about GM that shocks me.  Perhaps corporations have some life-cycle in anthropomorphic terms–that is, while they can continue in perpetuity legally, maybe there is an expiration date on their pre-eminence.  I realize that I am engaging in the most loose analysis, not grounded on any empirical data, but in thinking about other companies that had this sort of status, I can think of a number that have this sort of 75-year lifespan.

What would Mike O’Malley think of this?  Is this important/interesting, or just a stray random musing?  I think the former, but invite comments.