§5.14 2. The Issue Of Interpretation

JurisdictionNew York

2. The Issue of Interpretation

The question of whether an antitrust defendant has violated a consent decree often depends on the interpretation given to a certain provision of the decree. Consent decrees are interpreted in the same fashion as contracts and are subject to similar canons of construction.528

An example of the interplay between violations and interpretations can be found in United States v. Martin Linen Supply Co.529 The original consent decree in Martin prohibited defendant linen suppliers from “threatening, coercing, inducing or attempting to induce any linen rental supplier to refrain while in business, from furnishing linen supplies to any customer.”530 The United States petitioned for criminal and civil contempt charges against the defendants for violations of the consent decree.531

The district court found that the defendants were not in violation of the consent decree because it “[did] not prevent [Defendants] from threatening competitors with economic reprisals to persuade them to refrain from soliciting [Defendants’] customers.”532

The circuit court interpreted “furnishing” more broadly than the lower court, stating that it is used “to describe the business in which the respondents are engaged” and, therefore, “furnish linen supplies” “should be interpreted to mean that the defendants are prohibited from using threats, coercion and inducements to persuade their competitors to refrain from ‘doing business’ with any customer.”533 Therefore, the defendants’ threat of reprisal was a violation if it was intended to cause the defendants’ competitors to refrain from competing or “doing business.”534 The case was remanded for a determination of this factual issue.535

However, where the terms of a consent decree are ambiguous, “resort to the circumstances surrounding the formation of the consent decree in order to construe its terms . . . is proper.” In Sportsman, Inc. v. Wolverine World Wide, Inc. et al.,536 a refusal to sell case, the court held that the context in which the consent decree negotiations took place demonstrated that the defendant was not required to sell to the plaintiff equipment of a competitor who was unrelated to the original allegations.


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Notes:

[528] . United States v. ITT Cont’l Baking Co., 420 U.S. 223, 238 (1975) (“Since a consent decree or order is to be construed for enforcement purposes basically as a contract, reliance upon certain aids to construction is proper, as with any other contract.”); United States...

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