Princeton Economics Group, Inc.

Andrew E. Abere, Ph.D.
Senior Economist, PEG

Introduction

In 2009, we reported on trends in private antitrust litigation in the U.S. over the period from 2003 to 2008. We noted that in 2008 the number of private cases filed reached 1,287, which was its highest level since 1983.¹ As some time has passed since our last report, we decided to examine more recent trends. We were especially interested to see what effect the recent economic recession might have had, if any, on case filings.

2009 vs. 2008

( click to enlarge ) Figure 1: Private Antitrust Cases Filed in U.S. District Courts 2004-2009

( click to enlarge ) Figure 2: U.S. Government Antitrust Cases Filed in U.S. District Courts 2004-2009

In Figure 1, we present the data on the number of private antitrust cases filed in Federal district courts from 2004 to 2009. As we noted in our last report, the number of private antitrust cases filed jumped 26 percent to 1,287 in 2008 from 1,018 in 2007. This was the highest level since 1983, when 1,192 cases were filed.² At the time, it did not appear that the economic recession that began at the end of 2007 had put a damper on private case filings.³ We did note that as our data ended in September 2008, it may have been too soon to conclude much of anything if there is a lag between changes in economic activity and case filings.

The recent upward trend in private case filings through 2008, however, sharply reversed course in 2009. From 2008 to 2009, the number of private cases fell more than 38 percent, from 1,287 to 792. This was the lowest level since 2003, when 729 cases were filed. The decrease in 2009 coincided with the recent contraction in the United States economy, as real gross domestic product fell 2.4 percent from 2008 to 2009.⁴ It certainly seems likely that the downturn in economic activity played an important, if not the most important, role in the decrease in the number of cases filed. One can view private antitrust litigation as a form of investment, and gross private domestic investment fell 23.2 percent from 2008 to 2009.⁵

As in the past, we were curious to know whether the change in the number of private antitrust cases was related to any change in the level of Federal enforcement. Often private cases may follow government cases or even just investigations. 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 2004 and 2009 (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). The number of U.S. government antitrust cases filed fell from 52 in 2008 to 49 in 2009, a decrease of 6 percent. Even with this decrease, this level is still higher than during any year from 2004 through 2007. It seems unlikely that this modest decrease in U.S. government cases filed played much of a role, if any, in the sharp decrease the number of private cases filed.

Conclusion

Private antitrust litigation, as measured by the number of cases filed in Federal district courts, declined sharply in 2009 after increasing steadily during the preceding several years. The number of private cases filed is now at its lowest level since 2004. Even with this sharp decrease, private cases still comprise more than 90 percent of all (private and U.S. government) antitrust cases filed in Federal district courts. It seems likely the decrease observed in 2009 was due in large part to the continuing contraction of the U.S. economy. Recently, the economy has shown some growth, as in the fourth quarter of 2009 real gross domestic product increased at an annual rate of 5.6 percent while gross private domestic investment increased at an annual rate of 46.1 percent.⁶ It remains to be seen if this upturn will lead to an increase in private case filings in 2010. We will provide another update as soon as data become available.