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May 07, 2018

The End of Perpetual Consent Decrees: DOJ Announces New Antitrust Initiative

On April 25, 2018, the Department of Justice announced a new initiative to terminate over 1,000 open antitrust consent decrees. Modern antitrust consent decrees typically have a “sunset” provision in which an open judgment terminates upon a specified date — usually 10 years from entry of the judgment. But this practice only dates back to 1979. Earlier judgments had no set expiration date, and many are still open on courts’ dockets.

In its press release, the DOJ said each and every one of the nearly 1,300 “legacy” judgments will be assigned to a DOJ Antitrust Division attorney. The assigned attorney will examine the court documents, internal case files and publicly available information to determine whether ongoing judicial supervision is necessary and appropriate. Many of these cases unnecessarily clog courts’ dockets, cause uncertainty for businesses and actually elicit, rather than prevent, anticompetitive market conditions. For example, firms bound by perpetual decrees may be unfairly prevented from adopting policies that, if adopted by rival firms and analyzed under the “rule of reason,” may be entirely lawful and procompetitive. The Antitrust Division already has identified 26 open cases — some over 90 years old — that are likely subject to termination.

Termination Process

Once the assigned attorney determines that termination of an outstanding judgment is appropriate, the Antitrust Division will post the name of the related case with a link to the relevant judgment on the DOJ’s public website. The Antitrust Division will then solicit public comments for 30 days. After the public comment period closes, the Antitrust Division will evaluate the case and the comments and — if it deems appropriate — file a motion with the applicable court to terminate the judgment.

The cases the Antitrust Division has identified thus far come only from two federal courts: the District Court for the District of Columbia and the District Court for the Eastern District of Virginia. Presently, the oldest case subject to termination is United States of America v. The Noland Company, Inc., et al., entered April 19, 1926 (with a substituted final decree entered June 2, 1926). This case involved allegations of price fixing and other collusion between and among businesses engaged in the dealing of plumbing supplies. The final order “perpetually restrain[s] and enjoin[s]” the defendants from engaging in certain specified, anticompetitive conduct.

Department of Justice as Antitrust Enforcers

In a speech on April 26, Assistant Attorney General for the Antitrust Division Makan Delrahim emphasized this initiative is in furtherance of his view of the DOJ as “enforcers” of antitrust law, not “regulators.” In his words, AAG Delrahim is “deeply skeptical” that Congress ever intended that the DOJ or the courts would indefinitely oversee businesses that enter into consent decrees. “Perpetual consent decrees,” AAG Delrahim says, “call to mind the famous line from the Eagles song, ‘Hotel California’: You can check out any time you like, but you can never leave.” Though in some cases it has taken nearly a century, businesses under a “legacy” judgment finally will be able to leave.

In his speech, AAG Delrahim also mentioned that terminating “legacy” judgments is one of “several initiatives [that] are now underway at the Division.” Companies or individuals who have questions or concerns about new DOJ antitrust policies or programs should consult with legal counsel.

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