Antitrust Division Relationships with State Attorneys General

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CHAPTER XII

ANTITRUST DIVISION RELATIONSHIPS WITH

STATE ATTORNEYS GENERAL

State attorneys general (“state AGs”) enforce antitrust laws, in

addition to the Antitrust Division and the Federal Trade Commission

(FTC). State AGs separately enforce both federal and state antitrust laws

and cooperate with federal agencies in course doing so. The following

describes (A) state AGs’ antitrust enforcement role and (B) cooperation

between state AGs and the Antitrust Division.

A. Antitrust Enforcement by State Attorneys General

1. State Attorneys General Statutory Authority

State AGs may bring civil enforcement actions under either federal

or state law.1 Under federal law, state AGs have the authority to bring

suit as representatives of three different constituencies. First, state AGs

are authorized to bring civil federal actions on behalf of their state as

direct purchasers of goods or services, seeking injunctive relief under

Section 16 of the Clayton Act2 and damages under Section 4.3 Second,

1. State AGs also have criminal authority under federal and state law, which

is outside the scope of this text. For a discussion of state attorneys

general’s criminal enforcement, see ABA SECTION OF ANTITRUST LAW,

STATE ANTITRUST ENFORCEMENT HANDBOOK 109-34 (2d ed. 2008)

[hereinafter State Antitrust Enforcement Handbook].

2. 15 U.S.C. §26.

3. Id. § 15; see also Georgia v. Pa. R.R., 324 U.S. 439, 443 (1945);

Hawaii v. Standard Oil Co., 405 U.S. 251, 261-64 (1972) (recognizing

that a state is a “person” under Sections 4 and 16 of the Clayton Act and

holding that Section 4 does not authorize a state to sue as parens patriae

for damages to the state’s general economy). Cities and other political

subdivision of a state are also considered “persons.” See, e.g.,

Chattanooga Foundry & Pipe Works v. Atlanta, 203 U.S. 390, 396

(1906). Where a direct purchaser is a state agency or institution, rather

than the state itself, state law determines whether the state AG can bring

suit on behalf of suc h agency or institution. See, e.g., Pennsyl vania v.

Milk Indus. Mgmt. Corp., 812 F. Supp. 500, 507 (E.D. Pa. 1992); Alaska

v. Chevron Chem. Co., 669 F.2d 1299, 1302 (9th Cir. 1982).

300 DOJ Civil Antitrust Practice and Procedure Manual

enacted in 1976 as part of the Hart-Scott-Rodino Antitrust Improvements

Act (HSR Act), Section 4(c) of the Clayton Act authorizes state AGs as

parens patriae to bring damage actions on behalf of natural persons

residing in their states, not corporations or similar entities, injured as a

result of an antitrust violation. 4 Third, state AGs may also bring federal

injunction actions as parens patriae based on injury to their general

economies under Section 16 of the Clayton Act and common law.5

Dual enforcement of antitrust laws by federal and state governments

is beneficial because of the increased allocation of resources to ensuring

competition, state knowledge of local markets and consumer concerns,

and added diverse points of view.6

Most states have enacted an antitrust statute of general application

prohibiting combinations and conspiracies in restraint of trade.7 These

statutes generally authorize state AGs to seek treble damages, civil

penalties, injunctive relief, and attorneys’ fees, and costs on behalf of the

state, natural persons residing within the state, state agencies and

institutions, and political subdivisions. These statutes also enable state

antitrust investigations by authorizing state AGs to issue civil

investigative demands to compel oral testimony, production of

documents, and responses to written interrogatories from individuals and

corporations.8 In applying these laws, many states have statutory

4. 15 U.S.C. §15c. Section 4C was enacted after Hawaii v. Standard Oil, to

allow state AGs to act as parens patriae.

5. See, e.g., Georgia, 324 U.S. at 447-48 (“the interests of the State are not

confined to those which are proprietary; they embrace the so-called

‘quasi-sovereign’ interests whi ch, in the words of Georgia v. Tenn.

Copper Co., 206 U.S. 230, 237 (1907), are ‘independent of and behind

the titles of its citizens, in all the earth and air within its domain.’”).

6. See American Bar Association, As Mergers Boom, So Does Enforcement,

Agencies Tell ABA at Antitrust Law Conference, AB A (Apr. 12, 2016),

http://www.americanbar.org/news/abanews/aba-ne ws-

archives/2016/04/as_mergers_boom_so.html; STEPHEN D. HOUCK, NAT’L

STATE ATT’YS GEN. PROGRAM OF COLUMB IA LAW SCH., TRANSITION

REPORT: THE STATE OF STATE ANTITRUS T ENFORCEMENT (Oct. 7, 2009),

http://www.antitrustinstitute.org/sites/default/files/Ho uck%20Commentar

y_091620091152.pdf.

7. See ABA SECTION OF ANTITRUST LAW, STATE ANTITRUST PRACTICE AND

STATUTES, INTRODUCTION (5th ed. 2014); see also State Laws, 6 Trade

Reg. Rep. (CCH) ¶ 30,000.

8. See generally ABA SECTION OF ANTITRUST LAW, 1-8 ANTITRUST LAW

DEVELOPMENTS § C.2.b (8th ed. 2017) [hereinafter Antitrust Law

Developments].