Mocking the Public Interest: Congress Restores Meaningful Judicial Review of Government Antitrust Consent Decrees
University of Akron - School of Law
October, 20 2008
U of Akron Legal Studies Research Paper No. 08-06
Vermont Law Review, Vol. 31, p. 593, 2007
On June 22, 2004, President Bush signed into law the Antitrust Criminal Penalty Enhancement and Reform Act of 2004. Although no public fanfare accompanied passage of this Act, it contains important provisions designed to restore a meaningful role for the courts in the settlement of antitrust lawsuits brought by the U.S. government.
Over three decades ago, in response to concern that antitrust settlements might be tainted by corruption, yet routinely rubber-stamped by the courts, Congress passed the Tunney Act. This Act provided that before entering a consent decree proposed by the government in an antitrust action, "the court shall determine that the entry of such judgment is in the public interest." The plain language of the Tunney Act appeared to require judges to make a de novo determination of whether a proposed antitrust consent decree was in the public interest, but the courts settled on a narrower standard that gave some deference to the executive branch's view of the public interest.
This decades-long consensus unraveled in the 1990s in a string of decisions by the United States Court of Appeals for the District of Columbia. These decisions arose from antitrust actions that the United States brought against the computer software colossus, Microsoft Corporation. The D.C. Circuit ruled that, in making the substantive determination whether a proposed consent decree was in the public interest, judicial review was limited to whether the decree made a "mockery of judicial power." Under this standard, the court's role appeared to be merely ministerial in nature: a proposed decree must be entered with little regard for whether the judge thought it was in the public interest, unless it was so inadequate as to suggest actual wrongdoing by the government. A retreat to the days of judicial rubber-stamping was under way.
A bipartisan effort was launched in the U.S. Senate to overturn the D.C. Circuit's mockery standard and restore meaningful judicial oversight. The product of that effort is the Act of 2004. It explicitly rejects the mockery standard and then amends the Tunney Act to make it mandatory - not merely discretionary - for courts to consider various factors in making the public interest determination.
The thesis of this Article is that the amendments should be construed to restore the standard to the one to which Congress had acquiesced to in the decades before the "mockery" standard burst upon the scene; that the proper role of the court is to determine whether a proposed consent decree is "within the reaches of the public interest"; and while a court should afford some deference to the executive branch's decision to settle on the proposed terms, it should also exercise close scrutiny of whether the proposed consent decree is reasonably calculated to protect competition.
Number of Pages in PDF File: 23
Keywords: antitrust, consent decrees, judicial review
JEL Classification: K1
Date posted: October 21, 2008