The 1992 Colorado Antitrust Act: Per Se Bidrigging and Key Issues
| Jurisdiction | Colorado,United States |
| Citation | Vol. 10 No. 1993 Pg. 2229 |
| Pages | 2229 |
| Publication year | 1993 |
1993, October, Pg. 2229. The 1992 Colorado Antitrust Act: Per Se Bidrigging and Key Issues
This article addresses statute of limitations and monetary redress issues in the context of a hidden bidrigging conspiracy in which certain of the contracts involved, although objects of the conspiracy, were let beyond the facially applicable statutory limitations periods. In this situation, litigating in state court under the Colorado Antitrust Act of 1992(fn1) ("1992 Act") may be far more advantageous, especially for victimized governmental entities, than bringing a similar action in federal court under the Sherman and Clayton Acts.(fn2)
In 1927, Colorado's initial antitrust act(fn3) was called out on strikes by the U.S. Supreme Court.(fn4) After a thirty-year hiatus, the Colorado General Assembly scratched out an infield hit by enacting the Restraint of Trade and Commerce Act(fn5) ("1957 statute"). In practice, this second Colorado antitrust law was not much used for monetary redress because its actual damages provision(fn6) was deemed inferior to the federal treble damage remedy that included mandatory costs of suit and attorney fees.(fn7)
After another thirty-five years elapsed, the legislature finally hit a home run with the 1992 Act. Under this third Colorado antitrust statute, treble damages are available for per se offenses such as bidrigging and price fixing,(fn8) and various costs and fees may be awarded to prevailing parties.(fn9) For these reasons alone, an increase can be expected in the overall number of civil antitrust actions filed in state court alleging per se violations. However, such offenses are also the very ones most likely to be carried out "under cover" over a long period of time,(fn10) thus causing large amounts of damages to be incurred(fn11) by victims before the injuries are discovered.(fn12) Accordingly, both the statute of limitations and remedies provisions applicable to state court suits alleging such violations will take on increased importance under the new law.
In view of the foregoing, prospective antitrust plaintiffs now must make careful choices regarding whether to file per se cases in federal or state court. In doing so, they must evaluate: (1) whether the 1992 Act, the 1957 statute or both govern the conduct alleged; (2) the relative merits of the respective federal and state statutes of limitations; and (3) how the various remedies possibly available under applicable Colorado antitrust law compare with the federal treble damage remedy.
The 1992 Act became effective on July 1 of that year and applies, inter alia, to civil causes of action accruing on or after that date.(fn13) In turn, "accrual" of such a cause of action is statutorily defined as taking place "when the circumstances giving rise to the cause of action are discovered or should have been discovered in the exercise of reasonable diligence."(fn14) Thus, where a plaintiff brings suit under the 1992 Act alleging a per se unlawful bidrigging conspiracy, it can be assumed that defendants will seek partially or wholly to avoid application of that law in an effort to gain a perceived advantage under the shorter three-year statute of limitations(fn15) or more limited actual damages remedy(fn16) of the 1957 statute.
More specifically, defendants likely will attempt to prove that the continuing offense alleged either actually was, or should have been, discovered by the plaintiff prior to July 1, 1992. If they succeed, the new law would not apply and the 1957 statute presumably would govern. Alternatively, there may be instances in which it is clear that actual discovery occurred on or after July 1, 1992, but defendants will seek to establish that, in the exercise of reasonable diligence, discovery of the ongoing violation should have been made before then. By its very terms, the 1992 Act would apply to the conduct occurring on or after July 1, 1992, but, if defendants are successful in their efforts, the 1957 statute seemingly would govern the activity preceding that date. Where there is no dispute that both actual and putative discovery of the lengthy conspiracy occurred only on or after the effective date of the 1992 Act, the Act would apply to all the conduct at issue.
Whether and to what extent the 1992 Act, the 1957 statute or both govern the challenged activity will affect what, if any, statute of limitations applies and whether treble damages and recoupment of payments are available in the lawsuit. The remainder of this article focuses primarily on these issues.
Federal antitrust law and the 1992 Act both provide four-year statutes of limitations for monetary redress in civil antitrust actions.(fn17) However, the running of those statutes is suspended during the pendency(fn18) of a respective federal or state "related" governmental antitrust case (that is, where the civil claims are based in whole or in part on the government's action), and for one year(fn19) thereafter (the "hiatus period").(fn20) Significantly, though, the running of the state antitrust statute of limitations is not suspended during the pendency of or hiatus period following a "related" federal governmental antitrust case,(fn21) and viceversa.(fn22)
Treble damages under federal antitrust law may be recovered only on claims which "accrue" within the four-year civil statutory limitations period.(fn23) A federal cause of action accrues and the statute begins to run each time the plaintiff is injured by an act of the defendant and the damages become determinable (non-speculative and provable).(fn24) This is significant because, as noted above, by their very nature most bidrigging conspiracies are lengthy.(fn25) Consequently, the four-year civil limitations period facially applicable to federal treble damage actions---even where suspended due to a related federal criminal action---ordinarily is insufficient to encompass all offending activity.
Thus, if an injured victim of bidrigging is to be able to sue under federal antitrust law for all damages suffered as a result of the ongoing conspiracy, it must find a way to "toll" the running of the Clayton Act statute of limtations. One means of doing so is pursuant to the equitable doctrine of fraudulent concealment. Under that doctrine, where the wrongdoers use "wrongful" or "fraudulent" means to conceal their violation, the federal statute of limitations is tolled until the victim actually discovers, or in the exercise of "due" or reasonable diligence could have discovered, the fact of its injury.(fn26) The rationale for such rule is that violators should not be able to cause their unlawful conduct to be hidden and then, when it is finally discovered, raise the statute of limitations as a defense.(fn27)
Under the 1992 Act, the Colorado antitrust limitations period also begins to run when the cause of action accrues.(fn28) As previously indicated, though, the 1992 Act expressly defines accrual as occurring when the underlying circumstances actually are, or in the exercise of reasonable diligence should have been, discovered(fn29)---the so-called "discovery" rule. Accordingly, the present Colorado statute of limitations is quite different in operation from the federal one. It is more akin to the federal fraudulent concealment doctrine, but without the necessity for having to establish the element of wrongful or fraudulent means of concealment by defendants.
Given the differences in when the federal and state limitations periods commence running, and the additional element necessary to toll the federal statute, proceeding in state court under the 1992 Act can be quite advantageous to the plaintiff in cases involving...
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