Antitrust Consent Decrees—A Review and Evaluation of the First Seven Years under the Antitrust Procedures and Penalties Act

• Published date: 01 June 1982
• DOI: 10.1177/0003603X8202700202
• Date: 01 June 1982
• Author: Eric J. Branfman
• Subject Matter: Article

The Antitrust Bulletin/Summer 1982 303

Antitrust consent

decrees-a

review

and evaluation

of

the first seven years

under the Antitrust Procedures and

Penalties Act

BY ERIC J. BRANFMAN*

I.

Introduction

For many years, most civil antitrust cases brought by the Anti-

trust Division

of

the Justice Department have been resolved by

consent decree.' From time to time, some

of

these decrees have

been attacked as failing to protect the public interest. 2But courts

• Bergson, Borkland, Margolis & Adler, Washington, D.C.

AUTHOR'S NOTE: The author acknowledges the invaluable research as-

sistance

of

Jonathan Sewall.

1Exhibit E to Draft Testimony

of

William F. Baxter, Assistant

Attorney General for Antitrust, Fiscal Year 1983 Budget Hearings; see

note 188infra. See also M. Handler,

Antitrust-Myth

and Reality in an

Inflationary Era, 50 N.Y.U.L.

REV.

211, 240 (1975); Note, The

ITT

Dividend: Reform

of

Department

of

Justice Consent Decree Proce-

dures, 73

COL.

L.

REV.

594, 595 (1973);

H.R.

Rep. No. 93-1463, 93d

Cong., 1st Sess. (1973), reprinted at

[1974]

U.S.

CODE

CONGo

AND

ADM.

NEWS

6535, 6536.

2E.g., Cascade Nat. Gas Corp. v. El Paso Nat. Gas Co., 386 U.S.

129 (1967); United States v.

I.T.&T.

Corp., 349 F. Supp. 22 (D. Conn.

©)982 by Federal Legal Publications, Inc.

304 : The antitrust bulletin

were loath to reject a proposed disposition

of

a case endorsed by

both parties. Thus, with exceedingly rare exception, any decree

agreed to by the Antitrust Division and defendant was entered by

the district court, following the Supreme Court's dictum in Sam

Fox Publishing Co. v. United States:3"sound policy would

strongly lead us to decline to assess the wisdom

of

the Govern-

ment's judgment in negotiating and accepting the

...

consent

decree, at least in the absence

of

any claim

of

bad faith or

malfeasance on the part

of

the Government in so acting.":

Public criticism

of

the consent decree process came to a head

after the

IT&T

settlements in 1971.5Despite charges raised at

confirmation hearings for Attorney General Kleindienst" that the

administration had settled the cases (presumably on terms favor-

able to defendant) because

of

IT&T's offer to help finance the

1972 Republican National Convention

and/or

because the Justice

Department believed that further relief would impose "hardship"

on

IT&T,

the district court refused to set aside the decrees.'

In an effort to restore public confidence in the antitrust

settlement process by requiring courts independently to scrutinize

each decree under a "public interest" standard, rather than

1972),

aff'd

memo

sub nom. Nader V. United States, 410 U.S. 909

(1974).

3366 U.S. 683 (1961).

4[d. at 689.

5United States V. I.T.&T. Corp.,

1971

Trade Cas.

,~

73,665-67 (D.

Conn. 1971). See 120

CONGo

REC.

20862 (remarks

of

Sen. Tunney)

(1974).

6Hearings on the Nomination

of

Richard G. Kleindienst to be

Attorney General Before the Senate Comm. on the Judiciary, 92d

Cong., 2d Sess. (1972).

7United States v. I.T.&T. Corp., 349 F. Supp. 22 (D. Conn. 1972),

aff'd

memo

sub nom. Nader V. United States, 410 U.S. 909 (1974).

Antitrust consent decrees 305

"rubber stamping" it," Congress enacted the Antitrust Procedures

and Penalties Act (APPA).9 In addition to requiring ajudicial

determination of "public interest" prior to entry

of

the decree

and establishing optional procedures to be utilized by the court in

making such determination," the APPA requires that the Anti-

trust Division publish the text

of

the decree and certain back-

ground information about its formulation,

II

provides for public

comment concerning the decree within a 60-day period," and

requires the defendant to disclose any communications it has had

concerning the decree with federal officials or employees. 13

The APPA went into effect on December 21, 1974. Between

that date and July 25, 1981, 180 proposed consent decrees were

filed with United States District Courts subject to the act. This

article, based on a review

of

those proposed decrees, will examine

the procedure and practice under the act, and will consider the

extent to which the APPA has served in practice to achieve the

goals established by its framers.

8The House Report refers to "judicial rubber stamping"

of

consent decrees as "one

of

the abuses sought to be remedied" by the act.

H.R. Rep. No. 93-1463, 93d Cong., 1st Sess. 5 (1973). See also

120

CONGo

REc. 10762, 10764-65 (remarks of Rep. Jordan) (1974). The

Senate Report refers to the district court's duty to "make an indepen-

dent determination as to whether or not the entry

of

aproposed consent

decree is in the public interest

....

" S. Rep. No. 93-298, 93d Cong.,

1st Sess. 5 (1973).

915 U.S.C. §§ 16 (b)-(h); Pub. L. 93-528. This article deals only

with section 2

of

Pub. L. 93-528. Section 3 increases penalties for

violations

of

the Sherman Act and sections 4-7 revise the Expediting

Act.

10 15 U.S.C. §§ 16(e),(f).

II

15 U.S.C. §§ 16(b),(c).

12 15 U.S.C. §16(d).

13 15 U.S.C. §16(g). This provision excludes communications

solely between defendant's counsel

of

record and the Justice Depart-

ment. See text accompanying note 47 infra.