Judge Easterbrook On Section 8 Director Interlocks And Antitrust Injury

Although Section 8 of the Clayton Act, 15 U.S.C. § 19, which prohibits competing corporations from sharing directors or officers, is an important concern for the business community, the statute has received surprisingly little attention from government enforcers or judicial opinions in recent years.  Therefore, when two of the leading antitrust voices on the federal bench – Judges Easterbrook and Posner of the U.S. Court of Appeals for the Seventh Circuit – offer a perspective on Section 8, it is worth noting.

On June 13, 2012, in a unanimous opinion authored by Judge Easterbrook (joined by Judges Posner and Bauer), the Seventh Circuit reversed and remanded with instructions to enter judgment for defendants a shareholders' derivative suit alleging that Sears Roebuck & Co. violated Section 8 by having on its Board of Directors two individuals who also served on the boards of Sears competitors.  Robert F. Booth v. Crowley, No. 10-3285 (7th Cir. June 13, 2012)