News Archive
PRIVATE ANTITRUST CASES INCREASE AGAIN IN 2008 -- FILINGS ARE AT THEIR HIGHEST LEVEL IN 25 YEARS
Andrew E. Abere, Ph.D.
Senior Economist, PEG
Introduction
In 2008, we reported on trends in private antitrust litigation over the period from 2004 to 2007. We noted that while the number of cases filed was roughly constant from 2003 to 2004, it had steadily increased each year from 2004 through 2007. The 967 cases filed in 2006 was the largest number filed in the prior twenty years, and 2007 was the first year since 1985 in which more than 1,000 cases were filed.1 As a year has passed since our last report, we decided to examine more recent trends. We were especially interested to see what effect the recent economic downturn might have had, if any, on case filings.
 ( click to enlarge ) Figure 1: Private Antitrust Cases Filed in U.S. District Courts 2003-2008 |
 ( click to enlarge ) Figure 2: U.S. Government Antitrust Cases Filed in U.S. District Courts 2003-2008 |
2008 vs. 2007
In Figure 1, we present the data on the number of private antitrust cases filed in Federal district courts from 2003 to 2008. The number of private antitrust cases filed jumped 26 percent to 1,287 in 2008 from 1,018 in 2007. This followed a more modest 5 percent increase from 2006 to 2007. The number of private cases filed is now at its highest level since 1983, when 1,192 cases were filed. On the surface, it does not appear that the economic recession that began at the end of 2007 put a damper on private case filings.2 As our data end in September 2008, though, it may be too soon to conclude much of anything if there is a lag between changes in economic activity and case filings. On the other hand, it may be that case filings are counter-cyclical. The last peak in the number of filings occurred in the year ended September 1983, which followed a 16-month recession that ended in November 1982.3
We were curious to know whether the recent increase in the number of private antitrust cases was related to the level of Federal enforcement. Often, a private case against a defendant may be a "follow-on" case to a successful government action against the same defendant.4 In Figure 2, we present the data on the number of U.S. government antitrust cases (criminal and civil) filed in Federal district courts between 2003 and 2008. The number of U.S. government antitrust cases filed jumped from 36 in 2007 to 52 in 2008, an increase of 44 percent.5 This followed virtually no change from 2006 (37 cases) to 2007. The number of government cases filed is now at its highest level since 2000, when 90 cases were filed. In prior analyses of longer trends (1980 to 2007), we have concluded the level of private enforcement did not seem to be strongly related to the level of government enforcement.6 It remains to be seen if the concomitant increases in both types of cases from 2007 to 2008 represent a meaningful change in that relationship or are just anomalies.
Following our last report, a number of antitrust attorneys wrote to us suggesting the increases in private case filings from 2004 to 2007 may have been the result of different plaintiffs' attorneys filing multiple "copycat" cases alleging the same or similar violations, which were subsequently consolidated by the U.S. Judicial Panel on Multidistrict Litigation (the MDL Panel).7 As a result, the number of cases filed may overstate the number of "unique" cases. If the filing of multiple "copycat" cases is a recent phenomenon, then this may explain some or even all of the sharp increase in private filings in the last several years. An analysis of this phenomenon would require more involved research of individual cases, which is beyond the scope of this report.
Conclusion
Private antitrust litigation, as measured by the number of cases filed in Federal district courts, has continued to increase sharply in the last several years. The number of private cases filed is now at its highest level in 25 years. One factor that has been posited for this recent increase is the practice of different plaintiffs' attorneys filing multiple "copycat" cases alleging the same or similar violations. The import of this may depend on one's perspective. From the perspective of a practitioner or law firm manager, more cases due to copycat filings may mean there is greater demand for the services of attorneys for both plaintiffs and defendants. From a policymaker's perspective, however, more cases due to copycat filings may not mean there has been an increase of the number of antitrust violations or the amount of substantive antitrust enforcement.
1 Data are from the Administrative Office of the United States Courts. Data from 1980 to 1991 are for the year ended June 30 and data from 1992 to 2008 are for the year ended September 30.
2 "Business Cycle Expansions and Contractions," National Bureau of Economic Research, http://www.nber.org/cycles/ (Accessed on 08/11/2009).
3 "Business Cycle Expansions and Contractions," National Bureau of Economic Research, http://www.nber.org/cycles/ (Accessed on 08/11/2009).
4 See Thomas M. Kauper and Edward A. Snyder, "Private Antitrust Cases That Follow on Government Cases," in White, ed., Private Antitrust Litigation: New Evidence, New Learning (Cambridge: MIT Press, 1988).
5 U.S. government cases include both civil and criminal filings as well as cases where the U.S. government was a plaintiff or a defendant.
6 We do caution that the number of government cases may be an imperfect measure of government enforcement.
7 The MDL Panel consists of seven sitting federal judges who are appointed to serve by the Chief Justice of the United States. According to its website, the job of the MDL Panel is to (1) determine whether civil actions pending in different federal districts involve one or more common questions of fact such that the actions should be transferred to one federal district for coordinated or consolidated pretrial proceedings; and (2) select the judge or judges and court assigned to conduct such proceedings. "An Overview of the United States Judicial Panel on Multidistrict Litigation," United States Judicial Panel on Multidistrict Litigation, http://www.jpml.uscourts.gov/General_Info/general_info.html (Accessed on 08/11/2009).