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24 Antitrust 58 (2009-2010)
Recent Trends in Federal Antitrust Class Action Cases

handle is hein.journals/antitruma24 and id is 260 raw text is: DE VELOPMENTS Recent Trends in Federal Antitrust Class Action Cases BY DONALD W. HAWTHORNE -7E LIVE IN INTERESTING TIMES for antitrust class actions, with plaintiffs, defendants, and courts grappling with changing standards for pleading and class certification, the impact of the Class Action Fairness Act (CAFA), the Obama administration's enforce- ment agenda, the internationalization of cartel enforcement, and skepticism in the courts and the prior administration about traditional Section 2 theories. While the full impact of these challenges will only emerge over time in court rulings and tactical decisions of parties, this article provides an initial assessment of the state of the anti- trust class action by focusing on trends in antitrust class action cases filed in federal courts between 2007 and 2009, triggering events for the cases, the nature of claims alleged, the industries at issue, and outcomes of motion practice in early stages of litigation. Case Filings The number of antitrust class action cases filed in federal courts is now in steep decline after rising substantially dur- ing the past decade: 208 antitrust class actions were filed in 1999, and the number grew to 766 by 2008, but 2009 wit- nessed a precipitous decline to 375, and filings for 2010 will return to the level of a decade earlier at the current rate.' Many factors may account for this trend, most notably the heightened pleading standard in Twombly.2 In attempting to understand this shifting antitrust land- scape, pleading practices in federal class action cases make it difficult to see the antitrust forest for the trees, as promising cases attract flurries of follow-on lawsuits and make simple numerical analysis of case filings unrevealing. To address this problem, this article is based on a systematic analysis of plead- Donald W. Hawthorne is Counsel in the Litigation Department of Debevoise & Plimpton LLP He has represented defendants in numerous antitrust class actions. The author wishes to thank Car Almo Wint, Ahmet Bayazitoglu, John Nichols, Gus Hotis, and Peter Kim for their assistance. ings that groups related cases together, reducing the 1,811 federal antitrust class action cases filed between January 1, 2007, and December 31, 2009, to 121 distinct lead cases.' Study of these lead cases affords better insight into how plain- tiffs are pleading their antitrust class action claims today and how those claims are faring in light of recent developments. Triggering Events The results reinforce the received wisdom that civil antitrust class actions follow from government price-fixing investiga- tions. That phenomenon has now assumed a global scale, however, as precursor government investigations are as like- ly to be initiated by foreign enforcers as by the U.S. Depart- ment of Justice. Nearly 60 percent of antitrust class actions arose from a prior government enforcement action, domestic or foreign: 41 began with DOJ investigations, 13 in which the DOJ acted alone and 28 in concert with other enforcers; Federal Trade Commission investigations contributed to 10 cases, 6 acting alone and 4 with other enforcers; and state-level enforcement preceded 14 cases, 6 acting alone and 8 with other enforcers. The most notable change in triggering events is the increas- ing significance of international enforcement. European Com- mission enforcement actions preceded 24 private class action case filings, ranking second to DOJ enforcement as a trigger- ing event. The EC acted alone in 5 cases and cooperated with other enforcers in 19 cases. Investigations by other national enforcers also served as triggering events in whole or part for 20 cases, including actions by the United Kingdom's Fair Trading Commission, the Canadian Competition Bureau, and the Korea Fair Trade Commission. The data also show increasing coordination of interna- tional enforcement efforts: in at least 19 cases, or nearly one- third of those filed after U.S. enforcement actions, foreign enforcers cooperated with U.S. enforcers. Clearly, the U.S. antitrust plaintiffs' bar monitors both U.S. and foreign gov- ernment enforcement actions, and defense counsel should expect that foreign enforcement actions may trigger U.S. class actions where jurisdictional standards are satisfied. EC enforcement actions also may trigger U.S. cases at an earlier date than U.S. investigations that proceed in tandem, given that foreign investigatory procedures-such as dawn raids- may publicize an investigation at an earlier stage than in the United States. In re Cathode Ray Tube (CRT) Antitrust Litigation is rep- resentative of the international origins of many U.S. cases.' The complaint alleged that many defendant manufacturers were under investigation by enforcement agencies, including the DOJ, EC, Japan Fair Trade Commission, and Korea Fair Trade Commission, and several foreign enforcers publicly announced their investigations of CRT price-fixing before the DOJ's investigation was reported. Other types of triggering events gave rise to 49 cases. Plaintiffs and their antitrust counsel appear to focus in par- ticular on dominant market leaders' use of distribution sys- 58 - ANTITRUST

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