Tuesday, May 1, 2018

College admissions and (versus) antitrust law, in the Atlantic. Legal status of a medical style match?

The Atlantic has an article on college admissions, saying it could be made to work better if only (and only if) colleges were exempted from antitrust law.

The Best Ways to Fix College Admissions Are Probably Illegal:
Cooperation among selective schools would make students’ lives easier. It would also likely run afoul of federal antitrust law.

The article provides an interesting summary of ideas being floated to reform college admissions: e.g. a medical residency style match, or a lottery, or a coordinated reduction in merit scholarships. (Those don't all address the same issues, of course.)

Regarding antitrust, I'm no lawyer, and the DOJ has clearly shown an anti-trust interest in some aspects of college admissions, particularly including early decision admissions, but the article doesn't offer deep insight into which aspects of college admissions, or college admissions reform, might or might not be defensible without legislative relief.

Regarding a college admissions process that might resemble the medical match, the article says
"Those who follow admissions closely tend to think that such a system would ease the pressures on students, parents, and schools. But, alas, antitrust law prohibits it—it would produce a level of cooperation that the federal government would likely find unacceptable. (The medical-residency match program is legal because Congress granted it an antitrust exemption about 15 years ago.)"

But the relevant law exempting the medical match from being a per se violation of the antitrust laws is section 207 added in conference to the Pension Funding Equity Act of 2004 Public Law 108-218.  The legislative language is preceded by a Congressional Finding, which states in part:
Congressional finding:
"(E) Antitrust lawsuits challenging the matching process, regardless of their merit or lack thereof, have the potential to undermine this highly efficient, pro-competitive, and long-standing process. "

The Congressional finding also praises the medical match for solving the unravelling of medical appointments to very early dates.

So, particularly if early admissions turns out to have anti-trust difficulties, to my non-lawyerly eyes the Congressional language suggests that Congress and the courts might continue to find that medical style matches are not violations of antitrust laws, even in new applications like college admissions (and of course school choice, which may include private charter schools as well as municipal schools).

I ran this by my favorite law professor Kim Krawiec, who confirms that I'm no lawyer and writes
"Hi Al — with the caveat that I’m not an antitrust specialist, I think that your conclusion could be right, but I wouldn’t rely too much on section 207 as evidence. My read of section 207 is that it’s application is quite clearly limited to medical residency matches. So I don’t think the language there would have any particular sway with courts weighing the legality of matches in other settings. Nonetheless, restraints on trade are not always illegal under antitrust law, even without an explicit exemption. Specifically, courts may consider procompetitive and (rarely) social welfare justifications in favor of restraints on trade. The hurdle is pretty high, especially for social welfare arguments, but they’re more likely to be entertained in educational settings than elsewhere, I think. A case on point is U.S. v. Brown https://law.justia.com/cases/federal/appellate-courts/F3/5/658/626013/

"The case may be an outlier in some ways, since it involves diversity in admissions, but I find this language instructive:
 It may be that institutions of higher education "require that a particular practice, which could properly be viewed as a violation of the Sherman Act in another context, be treated differently." Goldfarb v. Virginia, 421 U.S. 773, 788 n. 17, 95 S. Ct. 2004, 2013 n. 17, 44 L. Ed. 2d 572 (1975). 
It is most desirable that schools achieve equality of educational access and opportunity in order that more people enjoy the benefits of a worthy higher education. There is no doubt, too, that enhancing the quality of our educational system redounds to the general good. To the extent that higher education endeavors to foster vitality of the mind, to promote free exchange between bodies of thought and truths, and better communication among a broad spectrum of individuals, as well as prepares individuals for the intellectual demands of responsible citizenship, it is a common good that should be extended to as wide a range of individuals from as broad a range of socio-economic backgrounds as possible. It is with this in mind that the Overlap Agreement should be submitted to the rule of reason scrutiny under the Sherman Act.

"So, the fact that Congress once concluded that the benefits of matching outweighed any antitrust concerns bodes well, I think, in the sense that it is always easier to convince Congress to extend a successful practice to a new area than to convince them to adopt an entirely new method that has no track record. But, I don’t think that a court would be comfortable extending the 108-218 exemption to other settings w/o congressional approval.  "

HT: Muriel Niederle

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