Mediating in the World of Antitrust: Part II

Antitrust litigation is increasingly international. Whether it’s the price-fixing of computer chips, LCD screens, diamonds or fertilizer, U.S. courts frequently assume jurisdiction over foreign defendants accused of conduct that affects U.S. competition. At the same time, these defendants, domestic or foreign, are inevitably facing the prospect of actions in other countries for the same “global conspiracies.”

How does this complicate the managing defendants’ expectations in efforts to mediate large antitrust matters in global industries? Can mechanisms developed in U.S. for settling cases where defendants face related litigation in different domestic jurisdictions provide guidance for resolving actions where defendants potentially face various claims on multiple continents?

Consider the 2011 Sullivan v. DB (DeBeers) settlement. The Third Circuit reviewed a class action settlement involving a diamond cartel. The settlement classes included both direct purchasers of rough gems and indirect purchasers of product from retailers or middlemen. Under the Supreme Court’s 1977 Illinois Brick, only the direct purchasers had federal claims. Some state statutes allow indirect purchasers to sue; others don’t. Still others only recognize indirect claims through state parens patriae suits. Still, the defendant wanted global peace—a settlement with all possible directs and indirects without consideration of whether each indirect purchaser in the settlement class actually had a “colorable” antitrust claim. The settlement would necessarily include plaintiffs who never would have standing to sue had they brought the action on their own. In approving, the Third Circuit en banc emphasized that “settlement agreements are creatures of private contract law;” concerns about defining a class for purposes of class action manageability and federal rule 23 requirements “evaporate” at settlement stage when a case will not be tried.

What about achieving international settlements this way? Can differences between jurisdictions be similarly disregarded in the interest of “global peace?” Current European Community recommendations regarding collective redress seem to show something else happening. They call for “a balanced approach to improve access to justice for citizens while avoiding a U.S.-style system of class actions and the risk of frivolous claims and abusive litigation.” The recommendations propose: “non-punitive” damages designed to address damages incurred (as opposed to the U.S. treble-damage model); contingency fees, considered incentives for abuse, are prohibited; “opt-in” methods for forming a class, rather than the U.S. “opt-out,” require a clearly identified plaintiff group, which the Commission regards as consistent with the rights of all parties. Thus, early creation of a settlement class without regards to whether each plaintiff actually has a claim is not contemplated. While the commission emphasizes the importance of ADR for antitrust disputes, these conditions suggest that plans for cross-border settlements involving U.S. and European actions have significant hurtles. Other variants pose issues. Canadian antitrust litigation (inevitably cross-border) is in throes of appeals about the standing of indirect purchasers to sue. In the UK, there’s a new “opt-out” proposal for collective actions (following the U.S. model).

Now in the U.S., case law is expanding merits analyses at the class certification stage, making cases more involved and expensive early on. Mediating international antitrust actions is bound to get even more challenging given the legal currents.

Part one can be read online at

About the author:

Lizbeth Hasse, Esq., a principal at Creative Industry Law, has based her practice in San Francisco for 30 years. A Fellow of the Chartered Institute of Arbitrators, she regularly mediates cases in the antitrust, complex business and intellectual property areas in the U.S. and internationally. She serves on BASF’s Mediation Services panel of mediators.