Additional information-Continued statements.. Letter, January 10, 1953, to Fayette B. Dow, with enclosure_ Service Pipe Line Co.-Continued Letter, December 2, 1950, to J. L. Burke, enclosing summary Page 275 1231 1220 1211 371 371 379 382 Memorandum, December 23, 1954, to J. L. Burke.. Sibole, B. P.: Letter, April 9, 1943, to Attorney General, enclosing report-- Sun Pipe Line Company of Illinois: Report to Attorney General____ Yorty, W. F.: Letter, October 4, 1955, to C. W. Emken.... Letter, April 11, 1957, to Harold D. McCoy, enclosing report Sunderland, Thomas E., letter, July 11, 1952, to J. L. Burke. Beard, C. D., letter, January 4, 1957, to Henry J. Amend_-_-_- Letter, April 6, 1943, to Hon. Francis Biddle, with enclosure Letter from Tom C. Clark, April 16, 1943, to J. W. Emisən.... Estimated pipeline department profit-balance sheet, December Distribution of restricted funds: Memorandum, March 11, 1954, from R. E. Nelson, Jr... 385 387 384 513 513 514 515 516 373 351 1003 248 249 249 1219 1218 1219 1214 883 Wilson & McIlvaine: Young, C. A., telegram, June 29, 1944, to W. R. Boyd. Board, Charles W.: Letter, January 16, 1956, to James E. Moss... 920 920 CONSENT DECREE PROGRAM OF THE DEPARTMENT OF JUSTICE MONDAY, OCTOBER 21, 1957 HOUSE OF REPRESENTATIVES, ANTITRUST SUBCOMMITTEE OF THE The subcommittee met, pursuant to notice, at 10:30 a. m., in room Present: Representatives Celler (chairman) and Keating. Also present: Herbert N. Maletz, chief counsel; Kenneth R. Harkins, cocounsel; Milton Eisenberg, associate counsel; and Julian H. Singman, assistant counsel. The CHAIRMAN. The subcommittee will come to order. The chairman and my distinguished colleague, Mr. Keating, wish to read statements. My statement is a little lengthy, but I think it is essential that it be read into the record. Today the Antitrust Subcommittee commences public hearings in its study of the consent decree program of the Department of Justice. The purpose of the subcommittee's study was set forth in the letter of inquiry I sent to Assistant Attorney General Hansen on April 3, 1957. In this letter I stated: In its study the committee will seek to ascertain how effective consent decrees have been to eliminate the conditions that caused the Government to institute its antitrust proceeding, and to restore a competitive climate in the industries concerned. In addition, the committee is interested in the effects of consent decrees upon competitors of the defendants. Related to these objectives is the necessity for an analysis of the procedures the Department of Justice uses to dispose of antitrust litigation on consent of the parties, and a consideration of whether specific legislation by the Congress with respect to these procedures would be desirable. I notice Judge Hansen has entered the room. Judge, we are reading some preliminary statements, please be patient. At the present time the only statutory provision directly related to antitrust consent decrees is contained in section 5 of the Clayton Act. That section provides that in no case shall a consent decree, entered before testimony is taken, in a case brought by the Government, be available as prima facie evidence to help private parties recover antitrust damages for injuries caused by the defendants. The hearings that start today are the first phase of a series of hearings to be held by the subcommittee in order to examine in detail particular consent judgments. The consent decree with which these hearings will be concerned, for the most part, will be the oil pipeline judgment entered in United States v. Atlantic Refining Company, et al., Civil Action No. 14060, District Court, District of Columbia, December 23, 1941, which covers 20 major oil companies and their 52 -pipeline companies. In subsequent hearings the subcommittee will devote particular attention to the antitrust problems that are presented by other consent judgments. I am not unmindful of the fact that on October 11, 1957, many months after the subcommittee had commenced its investigation of the enforcement of this decree, the Department of Justice instituted four proceedings in the District of Columbia that allege violations of this decree. Nor am I unmindful that these proceedings were brought by the Department of Justice in the shadow of these public hearings, which had been publicly announced on September 19. I do want to make clear that it is not the intention of the subcommittee in these hearings to interfere with or prejudice in any way any litigation that is pending in the Department of Justice. I feel that it is essential, nonetheless, that the subcommittee, in the discharge of its legislative and investigative responsibilities, examine in detail the activities involved in enforcement of the oil pipeline decree. In order to discharge its responsibilities, the subcommittee must ascertain how this decree was negotiated, the circumstances that surround its acceptance by the parties to the litigation, compliance with its terms by the defendants, and its enforcement by the Department of Justice. To do otherwise would be precedent for a situation where ultimately Congress could find itself in a position where it would be unable to investigate into the enforcement of the antitrust laws by the Department of Justice. By the mere filing of a case the Attorney General could remove from congressional scrutiny widespread areas of activities in his department. Consent decrees normally are permanent injunctions of the court and as such remain operative for indefinite periods. This particular decree has been in effect since 1941. Proceedings commenced in 1957 that allege violations of the decree may not be used to shield from congressional examination that intervening history of the Department of Justice's efforts to enforce the decree. Withal, it shall be our intention, throughout our study, to conduct the public hearings in such a manner that the separate responsibilities of the enforcement officials and the Congress may be accommodated. Disposition of antitrust litigation by consent judgment, historically, has been a major part of the Department of Justice's total effort to enforce the antitrust laws. This is reflected in the Attorney General's committee report in 1955 that- from 1935 to date, 72 percent of the civil actions brought were terminated by consent decrees. In 1956, of the 45 civil antitrust proceedings terminated, 29 were terminated by consent judgments. There are several reasons that impel disposition of antitrust litigation by consent judgment. Defendants in civil actions brought by the Government are motivated by the desire to avoid treble-damage liability in proceedings that subsequently may be brought by private parties who have been injured in the course of the activities that are 1 under Government attack. Another motivation is the desire by the defendants to avoid the adverse publicity that attends a Government victory in an antitrust proceeding. Further, there is a normal desire on the part of the defendants to avoid the substantial expenses that are required in the prosecution of complex antitrust litigation. The Government, on the other hand, is motivated by the desire to achieve a maximum utilization of the limited staff that is available for antitrust prosecutions. The Government, also, is motivated to agree to a consent judgment in order to reduce expenditures. Limited appropriations make it desirable for the Government to dispose of as great a number of cases as is possible with a minimum expenditure of funds. Disposition of antitrust litigation by the consent of the parties, however, also involves substantial problems. First, a consent settlement. by its very nature involves the process of compromise in the negotiations by attorneys for each side. These negotiations take place in an atmosphere that is free from scrutiny by the public and the judiciary. In such circumstances, a question frequently arises as to whether in any particular instance the consent decree has resulted in a compromise of the public interest. Over the years, substantial criticisms have been leveled at the consent-decree program and the procedures that surround negotiation of the decrees. Outstanding are criticisms that flow from the fact that the entire process is surrounded by secrecy. Normally, the details of negotiations and the results sought are known only by the Government and the defendants. In most instances the court, without independent examination, accepts the decree on the representation of the parties. The element of secrecy that surrounds the entire consent-decree program may be contrary to the general policy established by Congress that antitrust enforcement proceedings shall be public. Pursuant to this policy, the Congress in 1913 required that in the taking of depositions of witnesses for use in any civil action under the Sherman Actthe proceeding shall be open to the public as freely as our trials are in open court; and no order excluding the public from attendance in any such proceedings shall be valid or enforceable.' In its report on that act, this very House Judiciary Committee stated: Everything pertaining to our courts should have the greatest publicity. Secret hearings would surround our courts with a mystery of doubt and eventually bring them into disrepute. If our courts are to retain the confidence and respect of the country generally, their conduct must be entirely free from any suspicion of star-chamber proceedings. 2 Another criticism of the consent decree program has been that such decrees deprive the courts of an opportunity to perform their function in the enforcement of the antitrust laws. Although a consent decree is entered as a judgment of the court, thoroughgoing judicial scrutiny of the meaning of its provisions and its impact is virtually nonexistent under present procedures. 137 Stat. 731, Mar. 3, 1913; 15 U. S. C. 30. 2 H. Rept. No. 1356, 62d Cong., 3d sess., p. 2. 98505-57-pt. 1, vol. 1-2 Conference report, House Report No. 753, 82d Congress, 1st session, Independent Offices Appropriation Act, 1952- Conference report, House Report No. 869, 82d Congress, 1st Gentry, C. A., letter, June 22, 1944, to William R. Boyd. Gillette, Hon. Guy M., a Senator from the State of Iowa, letter, Feb- Letter, November 5, 1941, to Harry T. Klein.. Letter, December 11, 1941, to Harry T. Klein.. Chronological history of negotiations of Exploratory Committee Meeting of the Exploration Committee, February 10... 1329 Memorandum of conference, February 11.. Report of Exploratory Committee, February 14.. |