Central District of California Holds That Criminal Amnesty Recipients not Entitled to ACPERA Benefits in Parallel Civil Action Where Cooperation in Civil Action Untimely

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In a groundbreaking decision, the Central District of California became the first court to hold that antitrust violators who received amnesty from criminal prosecution were not entitled to the damages-limiting benefits of the Antitrust Criminal Penalty Enhancement and Reform Act of 20041 ("ACPERA") in a parallel civil litigation.  In re Aftermarket Automotive Products Antitrust Litigation, 09 MDL 2007 (C.D. Cal. Aug. 26, 2013).   Specifically, the court determined that, notwithstanding their status as criminal amnesty recipients under the Department of Justice’s Antitrust Division’s ("DOJ") Corporate Leniency Program, civil defendants – a parent company and its subsidiary –  were not entitled to receive a reduction in damages under ACPERA because they had failed to provide timely cooperation to plaintiffs in the civil litigation.

By way of background, Congress enacted ACPERA to increase the penalties for antitrust violators and to assist prosecutors and the victims of antitrust violations in pursuing the wrongdoers.  Price-fixing conspiracies are notoriously difficult to detect without cooperation from at least one participant in the illegal scheme.  In order to encourage cartel members to self-report illegal activity to the DOJ, the DOJ has long employed a corporate "leniency" policy, which provides amnesty to the first conspiracy participant that reports the criminal activity and cooperates with the DOJ.

As a further inducement to the cartel member to turn itself and its co-conspirators in, and to assist the victims in recovering their losses, ACPERA gives the leniency applicant the option of limiting its civil damages exposure by cooperating with the plaintiffs.  Instead of being jointly and severally liable for three times the amount of all damages caused by all members of the conspiracy, as otherwise required by Section 4(a) of the Clayton Act (15 U.S.C. § 15(a)) and governing case law, a leniency applicant that has cooperated satisfactorily with the civil plaintiffs is liable only for actual – not treble – damages and, in addition, only for damages from its own product sales – not from the sales of its co-conspirators.  ACPERA §213(A). 

However, in order to qualify for these ACPERA benefits, the leniency applicant must show that it provided "satisfactory cooperation" to plaintiffs in the civil action, "which cooperation shall include:"

(1) "providing a full account to the claimant of all facts known to the applicant . . . that are potentially relevant to the civil action;"

(2) "furnishing all documents or other items potentially relevant to the civil action that are in the possession, custody or control of the applicant . . . wherever they are located;" and

(3) "using its best efforts” to procure and facilitate cooperating individuals to be available for interviews, depositions or testimony and to respond “completely and truthfully, without making any attempt either falsely to protect or falsely to implicate any person or entity and without intentionally withholding any potentially relevant information."

In In re Aftermarket Automotive Products Antitrust Litigation, the court emphasized that a critical factor in determining whether the ACPERA applicant’s cooperation is satisfactory is the "timeliness of the applicant’s initial cooperation with the claimant.” It further noted that mere compliance with discovery obligations under the federal rules was not tantamount to satisfactory cooperation under ACPERA.  Ultimately, the court concluded that the amnesty applicants were not entitled to ACPERA benefits because, notwithstanding numerous proffers and the production of tens of thousands of pages of documents, they failed to timely provide plaintiffs with a "full account of facts potentially relevant to the conspiracy."

1. Pub. L. No. 108-237,  § 213(a)-(b), 118 Stat. 661, 666-669 (June 22, 2004), as amended by Pub. L. No. 111-190, 124 Stat. 1275 (June 9, 2010).

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