Coordinating Private Class Action and Public Agency Enforcement of Antitrust Law

52 Pages Posted: 7 Sep 2005

Date Written: August 2005

Abstract

This essay sketches a new approach to ameliorating the problem of coordinating the use of private class actions and public policing to enforce American antitrust law. Achieving the optimal joint level of enforcement from any system that teams public and private law enforcers requires a coordination mechanism to assure not only that each makes the appropriately motivated and proportionate investment of resources and effort, but also that their respective contributions are properly synchronized and combined. Our proposal addresses this double-sided coordination problem. Its key elements are (i) mandatory-litigation class action; (ii) total enforcement license initially vested with the public enforcer; (iii) auction of private license to enforce class action; (iv) auction proceeds deposited with and distributed by the court for compensatory purposes; and (v) public enforcer option to buy back the private license at the winning bid price. We suggest that our approach is superior to the current practice of judicial coordination (through, for example, statutory interpretation, pre-emption, and class action prerequisites), which suffers from high information costs, and to proposals for reform that give public enforcers the option of "first refusal" or of intervening to take some control over the class action, which regulate only private enforcers.

JEL Classification: K00, K21, K41

Suggested Citation

Rosenberg, Michael and Sullivan, James Patrick, Coordinating Private Class Action and Public Agency Enforcement of Antitrust Law (August 2005). Harvard Law and Economics Discussion Paper No. 523. Available at SSRN: https://ssrn.com/abstract=795524 or http://dx.doi.org/10.2139/ssrn.795524

Michael Rosenberg (Contact Author)

Harvard Law School ( email )

1575 Massachusetts
Hauser 406
Cambridge, MA 02138
United States
617-496-4558 (Phone)
617-495-1110 (Fax)

James Patrick Sullivan

Harvard Law School ( email )

1575 Massachusetts
Hauser 406
Cambridge, MA 02138
United States

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