FTC Chair Khan Calls for State Antitrust Actions to be Exempt From Transfers to Multidistrict Litigation
Last week, FTC Chair Lina Khan once again demonstrated her willingness to step out of the conventional box with an endorsement of legislation designed to invigorate enforcement of the antitrust laws.
What makes Khan’s endorsement unconventional is that the antitrust enforcers that would benefit from the legislation are state attorneys general, not the FTC. It is a rare event to see a federal antitrust enforcer call for the expansion of the prerogatives of state antitrust enforcers.
In a letter to Senators Durbin, Klobuchar, Grassley and Lee, Khan expressed her support for the State Antitrust Enforcement Venue Act of 2021, which Khan believes “would equip state enforcers to litigate antitrust lawsuits with greater speed and efficiency and would entitle them to rights that federal enforcers already enjoy.” The Act would amend the multidistrict legislation (“MDL”) statute, 28 U.S.C. § 1407, which authorizes federal courts to conduct multidistrict litigation.
Section 1407 of the MDL statue empowers the Judicial Panel on Multidistrict Litigation to transfer civil actions pending in different federal courts to a single federal court for coordinated or consolidated pretrial proceedings. The statute, however, exempts cases in which “the United States is a complainant arising under the antitrust laws.” See 28 U.S.C. 1407(g). The Judicial Panel has no authorization to transfer those cases. By contrast, the Judicial Panel can transfer cases in which state attorneys general bring antitrust claims as parens patriae on behalf of residents of their states. According to Khan, this enables defendants to “seek to get state antitrust lawsuits transferred and consolidated under the statute, where state cases may be joined with private lawsuits and be subject to delays.”
In May 2021, Representative Ken Buck of Colorado introduced The State Antitrust Enforcement Venue Act to address the different treatment of federal and state enforcers under the MDL statute. The Act would exempt antitrust actions brought by states, aligning their treatment under the statute with cases brought by the United States. According to Khan, this would allow “states to regain greater control over the venue in which their antitrust cases are litigated.” Khan also commented that the rationale for exempting antitrust actions brought by the United States applies equally to actions brought by states.
This blog has written about the FTC’s recent efforts to energize antitrust enforcement under Khan’s chairmanship (see, for example, here, here, here, and here). What makes Khan’s letter notable is that it demonstrates a holistic commitment to antitrust enforcement even beyond actions brought by the FTC. It will be interesting to see if future acts of camaraderie by antitrust enforcers will help lead to a more empowering statutory framework.
Written by David A. Scupp
Edited by Gary J. Malone