Seth Wenig/AP Photo
Tim Wu as a candidate for lieutenant governor in New York, September 2014
Last Friday afternoon, the Justice Department’s Antitrust Division settled a merger challenge between two of the three dominant companies in the market for residential door locks and digital security equipment. The settlement allows Assa Abloy, a serial acquirer, to buy one of its two rivals, Spectrum, for $4.4 billion, with minimal divestitures to a third party named Fortune Brands, financial penalties if the divestiture doesn’t complete in a certain time frame, and a trustee to monitor compliance.
It was a bit of a head-scratcher. Jonathan Kanter, the head of the Antitrust Division, has expressed disinterest in so-called “behavioral remedies,” which approve mergers with conditions attached. “Complex settlements, whether behavioral or structural, suffer from significant deficiencies,” Kanter said to the New York State Bar Association in January 2022. “In my view, when the division concludes that a merger is likely to lessen competition, in most situations we should seek a simple injunction to block the transaction.”
In this case, Kanter did try to block the transaction; the trial had been going on for several weeks. And then the Antitrust Division suddenly reversed direction and agreed to a settlement that looked mostly like what Assa Abloy offered in the first place. What gives?
The answer is bound up with the problem with Democratic judges, who in the Biden era have been picked with an eye toward diversity, regarding either race or gender or experience (Biden has nominated a lot of public defenders). Those are all laudable goals. But diversity of worldview never seems to come up in the selection process. As Caroline Fredrickson laid out in the Prospect recently, Biden “has advanced few candidates with a background or even apparent disposition to challenge the anti-regulatory economic agenda and fight corporate consolidation.” As a result, one of Biden’s biggest initiatives—changing the government’s posture around corporate power—is being stymied by his own appointments.
One way to begin to change this is with a big splash: nominating Tim Wu, the former White House competition czar now teaching law at Columbia University. Here’s a candidate who marries the elite credentials that often tip the scales on judicial appointments with the mindset to drive change in how the judiciary perceives political economy. (It also bears mentioning that he is not white.)
The result of the kind of judges Biden has placed on the federal bench can be found on page 7 of the Assa Abloy settlement agreement. The Antitrust Division acknowledges that the settlement will not resolve all of its concerns about risks to competition, and that only blocking the merger would do so. However, it reads, “Based on the totality of circumstances and risks associated with this litigation … the United States has agreed to the proposed Final Judgment” (emphasis added).
Those risks become clear when you read Matt Stoller’s summary of the case, written before the settlement. He attended the trial, which didn’t have a jury but was to be decided by the judge, Ana C. Reyes, a Biden appointee who was hearing her very first case.
Democratic presidents, including Biden, have maintained a blind spot when it comes to corporate power.
Aside from the trial being a manifestation of the elite condescension that oozes through Washington like a plague, it was clear that Judge Reyes, a Latina corporate lawyer who did pro bono work helping asylum seekers before being appointed, was going to ignore Supreme Court precedent that the government gets to determine whether a divestiture fix is appropriate. “Fortune is being advised by very smart people,” Reyes asked during the trial. “Why would they do this if it’s going to be unprofitable?”
A ruling along those lines would have damaged government attempts to block future mergers, since the companies merging could just propose half-a-loaf fixes and get a judge to bless them, no matter how badly they end up working. The late-Friday news dump of a settlement and the language contained in it suggests that the Antitrust Division knew that too. “Judge Ana Reyes was confused about the law and hostile to checks on corporate power,” Stoller told me. “Not only was she going to rule against antitrust enforcers, she was going to write a precedent-setting opinion that would have made enforcement more difficult going forward.”
Again, this was a Biden judge, who was either unaware of or willfully ignoring Supreme Court precedent on core facets of antitrust enforcement. Judge Reyes, whose former law firm counts Google, the Carlyle Group, and Eli Lilly as clients, seemed more interested in figuring out the business problem of whether a new third-party competitor could be viable than the harm to competition at issue in the case.
This isn’t an isolated incident. The same day that the Assa Abloy case settled, a Clinton judge named B. Lynn Winmill dismissed an FTC lawsuit against a data broker alleged to have sold precise geolocation data for millions of cellphones, claiming lack of evidence that this would harm the consumer. (The case was brought up in the context of how location data could track women to abortion clinics, which would obviously create harm.) Obama judge Robert Wilkins signed on to a ruling throwing out a monopolization case against Facebook last week, stating that “many innovations may seem anti-competitive at first but turn out to be the opposite, and the market often corrects even those that are anti-competitive,” a rather stunning claim. Another Obama judge named Victor Allen Bolden blocked the Antitrust Division from presenting evidence in a wage-fixing case, and then dismissed it, citing … lack of evidence!
You can certainly find good judges making good rulings here and there, but the judges appointed by Democratic presidents, including Biden, have maintained this blind spot when it comes to corporate power. This is a product of a system that has been set up to funnel a certain kind of person onto the federal bench.
Judges are selected by a combination of recommendations from congressional Democrats and the White House counsel’s office. Democrats in Congress have recommendation committees that are typically overrun with corporate lawyers, who pick from a pool of elite friends and those with the right credentials. Among the public defenders and civil rights lawyers Biden has chosen are also union-busting labor attorneys, corporate BigLaw partners, and immigration prosecutors. As of last year, Biden had only nominated two people with labor or economic justice backgrounds to federal courts, according to the Alliance for Justice.
When it comes to judicial nominations, questions like who people clerked for, what law schools they went to, and what BigLaw firms they signed up with seem to matter more than what their views are on the role of regulation, or the impact of consolidation, or how they interpret the plain text of the Sherman Antitrust Act. There’s been a disturbing trend of judicial nominees building as little a factual record as possible to get through Senate confirmation (or in the case of far-right loons like Matthew Kacsmaryk, hiding that record), offering no window into their actual views. Republicans solved this by funneling everything through the Federalist Society, which ensures that every GOP nominee is a committed right-wing fanatic. Democrats do it by picking nominees with the largest possible pile of elite credentials, and it leads to a corporate court.
Wu would break this streak. Now, he actually does have those elite markers. He clerked for Judge Richard Posner, a conservative, and Justice Stephen Breyer, a liberal. He has a Harvard Law degree. He’s a member of the American Academy of Arts and Sciences. He teaches at an Ivy League university. But he also has defined ideas on issues where the rest of the judiciary is simply deficient. He has written about the law as it relates to the corporation, and actually worked in policy, another sorely lacking trait in our nation’s judiciary.
There is currently a vacant district court seat in the Southern District of New York where Wu lives. This could be a stepping stone to a seat on the Second Circuit Court of Appeals, which has no vacancy currently.
More important than just Wu would be a greater attention to the economic side of the ledger when selecting judges. As Binyamin Appelbaum wrote last year, Democrats have shown no interest in finding antitrust experts to be judicial nominees. In the 1980s, Ronald Reagan did exactly the opposite, stuffing the federal bench with Chicago school libertarians.
Diversity can be seen in many forms. Biden has done a mostly good job getting vacancies filled (though the absence of Dianne Feinstein is throwing a wrench in that), and in breaking down some of the usual barriers for who is elevated to a judgeship. But as the Assa Abloy case shows, his agenda is at risk because he hasn’t carried that out in the economic context. Tim Wu would be a great start, but he’s really just one name. There’s a difference between a token appointment and a priority. Biden can show in the next couple of years a willingness to make his economic policies match his judicial policies.
