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The following table, for each year from 1940 through December 10,
1958, compares with the number of cases that ended in consent decrees
or litigated judgments. From this table it is clear that the Antitrust
Division's recent enforcement program has consisted predominantly
of negotiated settlements, and the brunt of the program has been borne
by the Judgments and Judgment Enforcement Section.

Importance of consent decrees as a means of settling antitrust actions (1940–58)

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Source: Antitrust Division, Department of Justice. The Antitrust Division reported it
had no records for the years 1944-46 inclusive.

At the hearings representatives of the Antitrust Division explained
that the increase in the relative number of consent decrees had its
basis in part on a policy decision to achieve as broad an application
of the antitrust laws as is possible within the limits permitted by
available appropriations.28 Assistant Attorney General Victor R.
Hansen pointed out that since 1952 complaints received by the Anti-
trust Division had almost doubled while at the same time the Divi-
sion's appropriation had increased by less than $150,000. He sub-
mitted the following table which compares the number of complaints
received and actions instituted by the Antitrust Division with the
budget appropriation made available for antitrust enforcement:

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Hearings, p. 16. See also remarks of former Assistant Attorney General Barnes on
arch 29, 1956, in Hearings, Distribution Problems, Small Business Committee, House of
Pesentatives, 84th Cong., 2d sess., p. 3. Mr. Barnes stated: "Initially the Division is
in a vise between increasing complaints of violations and decreasing appropriations."

Time saved by the limited Antitrust Division personnel through negotiated rather than litigated judgments, with consequent wider application of available funds also contributes to the growth in the number of consent decrees. Antitrust cases present one of the most protracted forms of litigation. Proof of economic issues is painstakingly difficult as well as expensive. Consent settlements, on the other hand, avoid most of these costs. In this connection, commentators on the Swift case have pointed out:

• 29

In view of the extensiveness and variety of the distributive facilities in question *** as well as the number of products, immense amounts of data would have been necessary to support either side had the case been contested * * * determining what part of the overhead of these facilities should be allocated to the cost of each product would lead to interminable argument with little prospect of reaching satisfying conclusion. But painstaking demonstration is not necessary for informal compromise. Through the consent decree, issues on which proof would be almost impossible in a contested suit may be settled by stipulation. [Emphasis supplied.]

At the hearings, Assistant Attorney General Hansen submitted tables that indicated the average time taken in terminating litigated cases as compared with consent decree cases for fiscal years 1951 through 1957. For 74 litigated cases the average time lapse from complaint to final disposition 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 relief by means of a consent settlement.30 The tables submitted to the committee at the hearings are as follows: 31

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NOTE.-For 142 cases terminated during the period 1951-57 by consent settlement, the average elapsed time per case was 32 months.

* Isenbergh and Rubin, Antitrust Enforcement Through Consent Decrees, 53 Harv. L. Cited in hearings, p. 430.

Rev. 386, 390-391 (1940).

30 Hearings, p. 14.

Hearings, p. 15.

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NOTE.-For 74 litigated cases terminated during the period 1951-57, the average elapsed time per case was 59.27 months.

Judge Hansen also pointed out that in 4 recent cases, hearings on relief after completion of the trial consumed an average elapsed time of over 18 months.32 On the basis of his statistical analysis, Judge Hansen concluded: 33

This saving of time in obtaining relief provides correlative administrative advantages to the Division. Since savings in time generally spell like savings of men and resources, consent settlements mean lower costs to the Division per judgment entered.

Negotiations

Initial responsibility for consent-settlement negotiations rests with the staff of the Litigating Section that is responsible for conduct of the case. Since one of the principal objectives of the consent-decree procedure is to eliminate the time and expense incident to trial preparations involved in the furnishing of voluminous documents and records by defendants and their examination and analysis by the Government, a compromise by consent decree is ordinarily reached at a relatively early stage in the litigation. In the typical civil antitrust action, the consent decree will usually be entered shortly after the filing of the complaint and before the use of discovery procedures. Similarly, where the Government commences a criminal action which the defendant wishes to settle, then

if agreement is reached, a consent decree will be entered in a
civil proceeding instituted for that purpose, and the prose-
cution terminated by a nolle pros.34

In cases that involve a number of defendants, some may agree to terminate the proceedings by acceding to most of the relief demanded by the Government, while, at the same time, other defendants may wish to litigate to a finish the legal or factual questions involved. In such circumstances, current Department practice is to negotiate such consent judgments with fewer than all defendants even though ultimately less drastic relief may be awarded against the litigating defendants than against those who had entered into a consent decree.

32 Hearings, p. 15: United States v. General Electric Co., 115 F. Supp. 835; United States v. International Boxing Club, 150 F. Supp. 397; United States v. United Shoe Machinery Corp., 110 F. Supp. 295; United States v. Aluminum Co. of America, 91 F. Supp. 333.

33 Hearings, p. 16.

Katz, The Consent Decree-Antitrust Administration, 53 Harv. L. Rev., 415, 423

The burden of initiating negotiations and preparing a first draft of the provisions of a consent decree in an antitrust action rests upon the defendant. The normal procedure was explained to the committee in the following terms by Assistant Attorney General Hansen: 35

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.

*

Exceptional circumstances may justify disregard of this procedure. The appearance, for example, of "** an impecunious defendant with inexperienced antitrust counsel, might warrant the submission of an initial draft by the Division." 36 The procedure is varied, also, in the event that the Department decides that prefiling negotiations are appropriate. In this connection it will be observed that in 1954 the Antitrust Division reinstituted the policy of undertaking negotiations for settlement of antitrust cases before the commencement of a civil action.

In such a case the Government first approaches the defendants to notify them in advance about the contemplated action and to outline in general terms the gist of its grievance. Then, as Assistant Attorney General Hansen stated:

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.37

Since 1942 it had been contrary to Department of Justice procedures to enter into negotiations for settlement of cases by consent decree prior to the filing of the Government's complaint.38 Prefiling negotiation of consent decrees, however, had been practiced before, especially during the 1920's. Approximately one-fourth of all antitrust cases in the latter part of the twenties were disposed of by consent decrees, the terms of which were reached through prefiling negotiations.39

Whether prefiling negotiations will be permitted or not in any given case largely result from recommendations of the trial staff of the

35 Hearings, p. 11. Cf., however, Hamilton & Till, TNEC Monograph No. 16, p. 90 (1940): "In its procedure the formal position of the Government is that the matter is voluntary. It cannot dictate terms; the initiative must come from the industry; its task is no more than to accept a preferred arrangement which accords with the law. In fact, it plays no such passive role.'

36 Hearings, p. 11.

87 Hearings, p. 12. 38 Hearings, p. 12. Hearings, p. 12.

Antitrust Division. In its statement to the committee, the Department said: 40

Procedures applicable to prefiling negotiations have not been formally promulgated. During the course of an investigation being made by the Antitrust Division, the concerns being investigated can write to the Division and request negotiation of a consent judgment before a complaint is filed. The staff in charge of the investigation will, at the time the complaint is submitted for approval recommend for or against prefiling negotiations. The Attorney General will pass upon this recommendation when he approves the complaint. If the complaint is signed and prefiling negotiations are authorized, the proposed defendants will be notified and they will be asked to discuss the matter with the investigating staff or other authorized personnel. If the proposed defendants upon being advised of the terms of the complaint still desire to undertake negotiations they are asked to follow the same procedures applicable to postfiling negotiations.

In the event that the prefiling negotiations are concluded to the satisfaction of both parties, the antitrust complaint and the decree embodying the negotiated settlement are filed at one and the same time.

There has been considerable criticism of the prefiling negotiation procedures. In his dissent to the 1955 Report of the Attorney General's National Committee To Study the Antitrust Laws, Louis B. Schwartz, for example, said: "1

The report recommends that the Department of Justice enter into negotiations with prospective defendants for consent decrees. Such a practice will certainly have the advantage claimed for it in the majority report, namely, "increased cooperation between business and Government," saving time and money. What it will also do is whittle away the last remnants of judicial control and public scrutiny in this area, and involve the Government in bargaining with a law violator not only as to the relief but also as to the nature of the accusation to be made against him. The proposal opens the possibility that the Government's complaint will be modified so as to be consistent with the relief that defendant is prepared to consent to. But the settlement of an antitrust case ought not to be a simple matter of bargaining between the Department and the defendant. [Emphasis supplied.]

Generally, after the defendants have submitted a draft of their proposals, a period of extensive negotiations commences with the representatives of the Department of Justice over the final provisions of the decree. Although on occasion outsiders may be consulted by the Antitrust Division,2 the circumstances that surround agreement on the final terms of the decree are highly secret. The public is ex

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40 Hearings, p. 3750.

B. Schwartz, Dissent to Report, Attorney General's National Committee To Antitrust Laws, printed in hearings before the Antitrust Subcommittee of the ittee on the Judiciary on Current Antitrust Problems, 84th Cong., 1st sess., pp. 247, 255 (1955).

ion has followed the practice, when formulating terms of relief for consent obtaining where appropriate the view of competitors, suppliers and cusendant." Hearings, p. 21.

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