Antitrust Enforcement Venue Act of 2021: The Risk of Antitrust Balkanization
Antitrust litigation is far from an easy subject but the risk of fragmentation of antitrust litigation deserves some attention given the latest legislative activity happening in the House of Representatives. This is why it is important to understand why Representative Buck’s ‘State Antitrust Enforcement Venue Act of 2021’ bill represents a distortion of the American judicial system with bad spillover effects for the preservation of coherent antitrust litigation outcomes, and thus, the rule of law.
To date, the Judicial Panel on Multidistrict Litigation (JPML) plays a critical role in multistate litigation as it provides for the possibility to have a dynamic distribution of cases among judges in the best interest of the case. The JPML is composed of seven federal district court judges with substantial experience in complex litigation. As such, the composition of this panel ensures that the venue related decisions affecting cases that undergo the JPML scrutiny process are rigorous and subjected to a high standard decision making the process free of corporate and/or political interference. The existence of the JPML and the possibility to centralize cases that arise from a common set of facts is essential in a federal judicial system where there is a risk to have contradictory pretrial rulings. In fact, this process and the ability to move a case to a different venue promotes judicial efficiency and ensures due process rights. It also ensures that litigation outcomes are coherent and not fragmented on a state by state level.
Antitrust is a field of law that often benefits from the existence of the JPML and the ability to centralize a case. Indeed, it is well-known that antitrust litigation frequently involves multiple states and corporations that operate at a national level. In practice this means that litigation often involves multiple states which, absent the possibility to centralize under one venue, would risk having balkanized antitrust judgements with multiple and divergent outcomes on the same facts. Hence, the fact that antitrust cases initiated by states under federal law may be subject to the JPML ensures that all state level antitrust litigation is resolved in the most efficient manner, especially when multiple states are involved in the case.
Well, according to Rep. Buck’s venue bill, antitrust state litigation would be carved out from the JPML process, leaving antitrust jurisprudence at risk of balkanization. Moreover, if this bill passes, antitrust litigation may also be at risk from politicization eventually undermining the rule of law.
At the state level, if this legislation passes, the one-stop shop litigation option that currently exists will be eliminated. In practice, this means that businesses facing antitrust litigation won’t be able to consolidate the multiple claims under a single fair proceeding; but also that multiple federal courts could potentially deliver conflicting judgements. Eventually, the multiplicity of outcomes and judgments would make the rule of law unworkable and incoherent. For instance, class action plaintiffs and State AGs may bring identical claims based on identical facts on behalf of an identical set of consumers but in different district courts. The judicial system has sought to avoid such scenarios because of the risk of divergent judgments, including damages awards and restitution, by allowing such cases to be consolidated where appropriate.
In fact, the balkanization of judicial decisions and the efficacy of litigation is what Congress had in mind when passing legislation allowing defendants to request consolidation of cases to the JPML. This is the main reason why it is difficult to comprehend the motivations behind the introduction of the bill.
It is true that when the United States federal government initiates antitrust enforcement actions it can remain in the court it selected to litigate the case according to the applicable legislation. This is particularly important to ensure the efficacy of the resolution of these cases, to ensure coherence of litigation outcomes, and to avoid having federal cases being combined with private right of action cases which traditionally run very slowly. But federal antitrust cases are not exposed to the same fragmentation risk that multistate antitrust cases are, thus they are not subjected to the JPML process. In fact, in antitrust litigation, DoJ only seeks injunctive relief and federal cases are not at risk of ending with inconsistent or conflicting remedies.
Claiming that differentiating state antitrust enforcement actions from federal antitrust enforcement action is bad for litigation demonstrates little understanding of the challenges that exist in multistate litigation, and fails to acknowledge that adopting legislation impacting litigation rules should always put the rule of law first. The fact that the press release accompanying the introduction of the bill refers to a court as a ‘home-field advantage’ speaks in and of itself as to how little attention this bill has put on the need to unequivocally preserve the rule of law where the parties’ proximity to the court has no impact on the treatment they will receive.
The U.S. court system continuously faces challenges in ensuring that the rule of law reigns in court proceedings, and improvements are always welcome. However, when it comes to antitrust multidistrict litigation, the adoption of the consolidation process of multistate claims through the JPML has offered a wise solution free from political and corporate influence in the decision making process, and should not be changed. Rep. Buck’s bill proposing to carve out state antitrust action from this JPML system represents a step backwards that will undermine the rule of law, and open the possibility for cases to become politically influenced. The risk is high and the consequences are very damaging for a democracy where the court systems play a pivotal role.