Mocking the Public Interest: Congress Restores Meaningful Judicial Review of Government Antitrust Consent DecreesVermont Law Review (2007)
AbstractOn 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 such 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.” It also provided that in making the “public interest” determination, the court had the discretion to consider such factors as the “competitive impact” of the proposed judgment; the court, however, was not required to consider these factors. 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, without giving deference to the executive branch's view that the public interest would best be served by a proposed settlement. Courts, however, declined to adopt a de novo standard of review. Instead, they settled on a narrower standard: a proposed consent decree should be entered if it was “within the reaches of the public interest,” giving some deference to the executive branch's view that the proposed settlement was in the public interest. Courts adopted this deferential standard in order to preserve consent decrees as an effective enforcement mechanism. De novo judicial review, in their view, would convert the settlement process virtually into a trial on the merits and thereby strip that process of much of its value. Though deferential, this “within the reaches of the public interest” standard preserved an independent and meaningful role for the courts. Judges emphasized that they were not acting as rubber stamps for the executive branch by approving settlements no matter how tainted or inadequate. Proposed settlements were instead scrutinized to determine whether they were reasonably calculated to protect competition. The great majority of proposed consent decrees were entered after such scrutiny. In a number of cases, however, courts performed an important mediation role by refusing to approve proposed decrees unless appropriate modifications were made. Moreover, it is likely that the very prospect of searching judicial scrutiny was an important deterrent to efforts to use political heft to “swing sweetheart deals.” 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. Congress had acquiesced for decades in the deferential “within the reaches of the public interest” standard of review, but the toothless “mockery” standard represented a major threat to vigorous enforcement of federal antitrust law. The overwhelming majority of government antitrust actions are settled by consent decrees. Such settlements thus are an important-perhaps the single most important-component of antitrust law enforcement. Judicial oversight of this process is a key safeguard against corrupt or inadequate deals struck by the executive branch. Such oversight both deters and provides a means to reject bad deals when they are made. The “mockery” standard posed a serious threat to effective judicial oversight of the settlement process, and therefore posed a threat to vigorous enforcement of federal antitrust law. 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. Its provisions are twofold. First, there is an express congressional finding that the “mockery” standard is not a correct construction of Congress's intent that courts must *596 determine whether proposed settlements are in the public interest, and that the purpose of the amendments to the Tunney Act is to restore meaningful judicial review. Second, the Act of 2004 amends the Tunney Act to make it mandatory-not merely discretionary-for courts to consider various factors in making the public interest determination. The amendments do not mandate any particular standard of judicial review. 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. A corollary to this thesis is that judges should issue written opinions that explain, in a transparent manner, how they evaluated the now-mandatory list of factors that they must consider in deciding whether settlements are in the public interest. Part I of this Article discusses the original Tunney Act and the “within the reaches of the public interest” standard of review developed by the courts in the early decades after passage of the Act. Part II reviews the decisions in the D.C. Circuit that established the narrower “mockery ofjudicial power” standard of review. Part III analyzes the text and legislative history of the amendments to the Tunney Act, which are intended to overturn the “mockery” standard. Part IV discusses the reasons why the proper standard of review under the amended Tunney Act is the “within the reaches of the public interest” standard.
Citation InformationLloyd C. Anderson, Mocking the Public Interest: Congress Restores Meaningful Judicial Review of Government Antitrust Consent Decrees, 31 Vermont Law Review 593 (2007).