"The effect," the Court continued, "is all one whether the decree has been entered after litigation or by consent" (United States v. Swift & Company, 286 U. S. 106, 114-115). To "effectuate *** the basic purpose of the original consent decree," courts may approve modifications after entry (Chrysler Corporation v. United States, 316 U. S. 556, 562). But if the party opposing modification can, in the language of the recent Ford case, show "actual disadvantage" or "the persistence of an inequality" stemming from the proposed change, the terms of the original decree must stand intact (Ford Motor Company v. United States, 335 U. S. 303, 322).

Against this legal background, just how extensively has the consent settlement device been employed since the first consent decrees, some 51 years ago, in United States v. Otis Elevator Co. ((9th Cir. 1906) Decrees and Judgments in Federal Antitrust Cases 107)?

A short answer is that, from fiscal 1953 through fiscal 1957, the percentage of consent judgments to civil cases terminated has ranked some 13 points lower than the figure for the only comparable period of enforcement activity-and no higher than the figure for all the years since the Sherman Act's passage.

Let me begin with a bit of history. In 1940, the Temporary National Economic Committee reported that of approximately 270 proceedings instituted in equity, over half had resulted in settlements by negotiation (Hamilton and Till, Antitrust in Action, T. N. E. C. Monograph No. 16, p. 88 (1940)). After Assistant Attorney General Arnold's 1938 signal for increased use of the consent judgment settlements (Report of the Attorney General 65-66 (1938))-however, the percentage increased sharply. Thus, according to a 1952 report of the Department of Justice

of 171 civil antitrust actions terminated between 1935 and 1950, 134 (or 78 percent) were settled by consent judgments and 37 were tried (report of the Department of Justice to the Subcommittee on Monopoly of the Senate Select Committee on Small Business, May 23, 1952).

From 1953 on, however, the percentage of consent judgments drops. Judge Barnes reported some three points lower than the 1935-50 78-percent figure when he appeared before a congressional committee in 1956. He stated that

between ** May 1, 1953, and March 1 of this year, of the 106 civil cases terminated, 80 resulted in consent judgments. Perhaps to the surprise of many, this proportion is somewhat smaller than preceding years (statement by Assistant Attorney General Stanley N. Barnes before Subcommittee No. 5 of the House Select Committee on Small Business, March 29, 1956).

For fiscal years 1947 through 1957, 72 percent of all civil-case terminations were by means of consent decrees. This decrease in recent years accounts for the figures tabulated by the Attorney General's Committee To Study the Antitrust Laws. The committee reported that

* from 1935 to date (1955), 72 percent of civil actions brought were terminated by consent decrees (report of the Attorney General's National Committee To Study the Antitrust Laws, 360 (1955)).

To sum up, compare-as table No. I before you, does-consent data for the last 5 years with like data for a period of similar enforcement activity by the Division. In the period 1940 through 1943, 96 civil cases were terminated; 82 of these were ended by means of con

sent decree. Thus, consent decrees accounted for 85.4 percent of the terminations.

The chart I have reference to is the one with the large black area. Since fiscal 1953, however, 121 of the 168 terminations were by means of consent settlement. This means that 72 percent of all civil cases terminated from fiscal 1953 through 1957 ended by consent. This 72-percent figure stands some 13 percent lower than the figure for the 4-year period 1940-43-a period comparable at least in terms of pace of enforcement activity. And this 72-percent figure stands no higher than the percentage for the entire history of antitrust enforcement.

With the extent of consent settlement's use in mind, just how are consent judgments negotiated?

Within the administrative structure of the Antitrust Division, the terms of a civil judgment resulting after trial are the initial responsibility of the members of the trial staff. When the defendants wish to settle the case against them without trial, they are instructed to submit a proposed decree to the trial staff; their draft uses the prayer of the complaint as a guide to the Government's desires for relief.

Of course, defendants' counsel may discuss with the trial staff their views on relief terms before they submit the initial proposal, but the Division adheres to the practice of defendant-initiated consent-settlement drafts to avoid any implication of coercion occasioned by an accompanying criminal action and to retain flexibility until actual negotiation begins.

Also, some defendants' attorneys find it preferable to submit their views first. Two prominent attorneys engaged in private antitrust practice write:

Experienced counsel, however, will find occasions when it is desirable to prepare the initial draft themselves, in order that it may embody a more complete expression of their own views and approach as the basis for further negotiation. This is sometimes more effective than the alternative of picking away at a draft prepared by Government attorneys (Segal and Mullinix, Administration and Enforcement (symposium on the Attorney General's Committee report), 104 U. Pa. L. Rev. 285, 296 (1956)).

When the initial draft is prepared by defense attorneys, valuable time of the Trial or Judgment Section may be saved for other tasks. Although this is the usual practice of the Division, it is not an unchangeable rule; special circumstances, such as an impecunious defendant with inexperienced antitrust counsel, might warrant the submission of an initial draft by the Division.

When the proposed consent judgment has been prepared to the satisfaction of defendants and the trial staff, the draft is reviewed by the Judgments and Judgment Enforcement Section.

One purpose of this review is to insure more uniformity of approach in decree provisions than might otherwise be achieved by the drafts of various trial staffs. Since any judgment provision used once by the Division is often the basis of requests-in court and in negotiation-for similar terms by other defendants, it is desirable that the Division adopt similar methods to cope with similar economic problems.

The Judgment Section's review insures the success of this endeavor. This procedure also permits fresh insight to correct drafting oversights and to point out unseen problems. The Judgment Section staff has had long experience in drafting and observing the results of par

ticular judgment terms. Careful attention to detail here often avoids requests for judicial exposition or modification of the terms of the decree.

The Division reinstituted in 1954 a policy of precomplaint negotiations and this procedure has been applied to several large antitrust cases with measurable success. Prefiling negotiation in itself is not a technique new to the Antitrust Division. In the second half of the 1920's a large proportion of our cases-about a quarter of them—were handled by this procedure.

In the 1930's, however, this method of handling antitrust litigation fell into disuse. In 1939, it was revived after a fashion, and continued to be employed through 1942. During this latter period, prefiling negotiations were usually conducted after companion criminal cases had already been brought and were pending in court. The prefiling negotiations of the civil case, many felt, were only a step in the settlement of the criminal prosecutions.

Our current policy with respect to prefiling consent judgment negotiations is very different from that policy which obtained from 1939 through 1942. Today's policy relates primarily to situations which are the subject of civil rather than criminal prosecution. In no instance is the sanction of the criminal law used to coerce the settlement of a civil case, and consent judgment negotiations are carried out entirely separately from, and independently of, negotiations relating to correlated prospective criminal proceedings.

The purpose of the new policy is to adjust civil antitrust controversies before they come to court, not to force, by means of criminal cases, the disposal of pending civil cases.

Under our policy, in some cases which appear to us to be adapted to its use, the Division after it has investigated a particular situation and prepared a proposed complaint, notifies the prospective defendants of the intention of filing a civil complaint against them. In general terms, we outline to the proposed defendants the nature and the ground of our charges. If the prospective defendants care to start negotiations toward a possible decree in advance of the filing of our complaint, we are ready to meet them at the conference table.

Our effort is to work out a consent decree disposing of the questions raised by the complaint, keeping constantly in mind adequate safeguards for the public interest. Efforts to work out consent decrees prior to the time the complaint is filed have not been successful in all instances, but they have been successful in a sufficient number of the cases where we have followed this procedure to show that it offers substantial advantages, both to the defendants and to the Government.

Prefiling negotiation permits quick discussion and settlement of the economic and legal issues of the case without the rigidity and the publicity of an already filed complaint. The complaint is filed as originally drawn except in the unusual case where negotiations have shown that one of the Government's claims could not have been established.

Negotiating procedures aside, consent settlements have advantages and disadvantages to both the Government and defendants.

To the Government, the consent-settlement procedure is a great asset because of the rapidity with which former undesirable practices in an industry may be transformed into a program for healthy and vigorous competition.

(Table No. I referred to above is as follows:)

TABLE #I

COMPARISON OF CONSENT SETTLEMENT PERCENTAGES

90

85

100

5 8 8 6 5 5 8 8 8 8 8 8 8

20

15

55

80

75

70

65

60

95

5

0

Total Percentages

1940 1943

84.5%

1953 - 1957

72 %

I have prepared figures indicating the average time taken in terminating litigated cases and consent-decree cases for the fiscal years 1951 through 1957.

As is indicated in table No. 2 before you, for 74 litigated cases, the average time lapse from complaint to final disposition (that is, entry of a judgment no longer subject to appeal) was 59.27 months; the

comparable time for 139 consent cases was 32.86 months. Thus on the average 2 more years are required to try a case than to obtain the same or similar relief by means of consent settlement.

(Table No. II referred to is as follows:)

The CHAIRMAN. Judge Hansen, do you want to have these tables inserted in the record?

Mr. HANSEN. I would like to, each one that is presented. Thank you, sir.

The CHAIRMAN. They will be put in the record.