Public afforded chance to comment on ‘comprehensive’ proposed state antitrust law

By Jon Campisi | Jun 14, 2013

The Senate Judiciary Committee is scheduled to solicit input from citizens and others

during a public hearing at the capitol later this month to address the proposed creation of a state antitrust law.

Pennsylvania currently lacks such legislation on the books.

The hearing, slated to take place on June 25, will give individuals the opportunity to weigh in on Senate Bill 848, a proposal that is being sponsored by State Sen. Stewart Greenleaf, who chairs the Judiciary Committee, where the measure was referred to earlier this spring.

The proposal, which in a previous session was introduced as S.B. 1565, is being called a comprehensive antitrust law, which, perhaps most importantly, would give the state Attorney General the ability to file a civil action over an alleged antitrust violation.

Currently, the Pennsylvania Attorney General’s Office is only authorized to bring federal actions to recover damages for consumers and state agencies, but cannot subpoena documents, may lose control over litigation, and can be in danger of not being able to recover damages.

In announcing the proposed legislation, Greenleaf points out that the Attorney General’s Office is often unable to fully investigate issues involving collusion because it has no way to compel production of documents and testimony, which is problematic, since one of the key violations of antitrust laws, a conspiracy to restrain trade, involves secretive conduct.

Today, the state Attorney General’s Office can only investigate a case by getting witnesses and targets to voluntarily provide information, a rare occurrence.

The senator also notes that the Attorney General’s Office has to bring an antitrust case in a federal venue, as opposed to in a state court, where it can be “dragged into federal multi-district litigation in a distant court where the litigation is controlled by a committee of lawyers appointed by the court. These lawyers may not have the interests of Pennsylvania consumers or State agencies as a priority,” Greenleaf wrote in a Senate memorandum sent around to his colleagues on March 14.

As for the claim that the Attorney General’s Office often has difficulty recovering damages in federal antitrust cases, Greenleaf attributed this to the fact that federal law prohibits collecting damages by indirect purchasers.

“Where the unlawful conduct, especially price fixing, occurs upstream in the chain of distribution from the parties the Commonwealth and consumers deal with directly, Pennsylvania may not recover damages,” Greenleaf wrote. “This means that where there is an agreement to fix prices of a product among manufacturers, and that product is sold to wholesalers, then to retailers, before being purchased by the Commonwealth or consumers, the [Attorney General’s] Office cannot collect damages.”

Greenleaf says that the purpose of a comprehensive state antitrust law would be to allow for a “full and fair” recovery in cases arising from antitrust injuries, and to provide the authorities with the proper investigative tools that would help them achieve this objective.

Greenleaf’s proposal would make illegal any contract, conspiracy or combination in restraint of trade and any monopolization in restraint of trade.

The measure would also make illegal mergers or acquisitions that substantially lessen competition in any line of commerce.

Finally, it would provide criminal penalties for obstructing or failing to comply with a subpoena and for knowingly removing or falsifying documents asked to be produced.

Jurisdiction over such cases would be given to Commonwealth Court, a lower-tier appellate court under the state’s Superior Court that handles matters such as election disputes and other specific legal appeals.

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