The Response: The Supreme Court
The Supreme Court is an active participant in a continuous policy-making process that establishes the judicial-business environment in which contemplated mergers are abandoned, consummated, and even torn asunder. Just as the Court may frame far-reaching and unpredictable social policy when it decides upon the constitutionality of a particular action such as school segregation, so too in its interpretation of statutory law, such as Section 7, it may establish an environment that influences subsequent actions of the Congress, the antitrust agencies, and the business community. Moreover, the Supreme Court is a political body, which in its interpretations and decisions puts forth its own political and economic preferences. 1
The Court may narrowly or broadly interpret statutes, close loopholes or leave them open, change previous Court decisions, or take a position that would require new legislation to alter. By its grant or denial of certiorari, it chooses those cases it wishes to hear, and refuses to hear those it does not. (For example, it can refuse to hear an appeal of a case won by an antitrust agency in a lower court.) On the other hand, the Supreme Court, like every other court, must wait until cases are brought to it. The antitrust agencies, because of their severely limited personnel resources, can only investigate a small fraction of the total number of mergers in a given period, and then challenge only a small percentage of that number. 2 Therefore the agencies must carefully select those cases that are considered worth the expenditure of time and effort--those that are considered necessary in order to test a legal principle or establish a legal precedent, thereby expanding or contracting the legal environment of business. Further, they must challenge only those mergers that they have a reasonable chance of winning, lest they encourage a disregard of their very existence by corporate executives and Congressmen frequently intimidated by big business.