Becoming the target of an antitrust lawsuit is a daunting prospect for any business. Antitrust lawsuits are often time-consuming and expensive to defend, and the consequences of losing a case can be severe. Under the Sherman Act (the primary federal antitrust statute), a prevailing plaintiff is entitled to treble damages, injunctive relief, and compensation for the costs of bringing the case, including attorneys' fees. In all but the smallest cases, awards can skyrocket into the many millions of dollars. Antitrust cases can also involve significant reputational harm. In the case of certain conduct deemed per se illegal, like price fixing or bid rigging, there may even be criminal liability.
Although all antitrust cases are different and require individualized strategy and analysis, there are some high-level considerations that apply in virtually all cases. This alert provides an overview of these considerations.
1. Engage Qualified Litigation Counsel and Plan Litigation Budget
The first step in responding to an antitrust lawsuit should be to engage counsel with experience defending antitrust lawsuits. Where possible, defendants should consider engaging counsel with experience in the industry in which their business operates. [More...]
2. Issue Written Litigation Hold Notices
Both plaintiffs and defendants have a duty to preserve documents and other information that may be relevant to a dispute once they reasonably anticipate litigation. To comply with this duty, parties should issue written litigation hold letters to key employees and document custodians to ensure that relevant materials are retained and not destroyed as part of routine document deletion. [More...]
3. Consider a Motion for Change of Venue or Motion to Consolidate
If a case is pending in federal court, there are several mechanisms through which a defendant can seek to have the case moved to a different court or consolidated with related cases. A motion for a change of venue can be brought under 28 U.S.C. § 1404 to transfer the case for "the convenience of parties and witnesses" to a different judicial district where the case could have originally been brought. [More...]
4. Assess the Legal and Factual Sufficiency of the Complaint
Antitrust complaints can have both legal and factual flaws. Legal problems arise when the facts alleged in the complaint, even when taken as true, do not establish a violation of the laws. In other words, it may be that what the plaintiff says is illegal is not actually illegal. [More...]
5. Begin the Initial Fact Investigation
If the complaint has any merit, the company should direct outside counsel to conduct a privileged, intensive internal investigation to learn the facts, find and preserve evidence, and identify witnesses before the plaintiffs do. This investigation should include review of key correspondence and agreements, and interviews with key employees. [More...]
6. Consider Engaging an Economist
Testimony from economic experts often plays a key role in antitrust litigation. Experts in antitrust litigation testify not just on questions of damages, but also on liability: Has the challenged conduct in fact caused harm to competition in the form of reduced choice or quality, or increased prices? Can other market factors explain the alleged harms? Are there procompetitive benefits associated with the defendant's actions that outweigh any harms and make the challenged conduct lawful? [More...]
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For More Information
To evaluate how you may be impacted by this information, please contact one of the authors, a member of Polsinelli's Antitrust practice, or your Polsinelli attorney.