Parallel Federal/State Antitrust Investigations

Posted by D. Daniel Sokol

Stephen D. Houck (Menaker & Herrmann LLP) explores Parallel Federal/State Antitrust Investigations

ABSTRACT: Most state antitrust enforcement actions are brought by a single state acting on its own rather than jointly with other states or the federal agencies. The broad antitrust jurisdiction of state attorneys general, however, does overlap significantly with that of the two federal antitrust enforcement agencies. According to one study, approximately 25 percent of state antitrust cases have had at least some relationship to federal enforcement efforts.

Those matters in which both federal and state antitrust authorities do take an interest usually have significant impacts across state lines and even international borders. The parallel federal/state investigations to which they give rise present unique challenges for all concerned, including counsel for the subjects as well as the participating enforcers. It is important, therefore, to understand how they work, how to take advantage of the opportunities they present, and how to avoid the pitfalls.

Defense counsel often dread the prospect of having to deal with two sets of enforcement officials. My own experience is that, despite some inefficiency, parallel investigations generally lead to a sounder enforcement decision because of the interchange of views among enforcement officials with varying perspectives. Parallel investigations also provide additional entry points for outside counsel to ensure that their views are heard and considered and to overcome potential bias within a single agency. Moreover, well-coordinated parallel investigations substantially increase the likelihood of a common resolution-invariably a desirable result for everyone concerned.