State Antitrust Enforcement Actions Exempt From Multi-District Litigations
06/13/2023On June 5, 2023, the Judicial Panel on Multidistrict Litigation (the “Panel”) held that recent changes to 28 U.S.C. § 1407(g), extending a limitation on multi-district consolidation to state-attorney-general complaints, applied to already pending cases and thus precluded the state-led antitrust actions against Google from proceeding with other cases in a multidistrict litigation.
Multidistrict litigation is a procedural mechanism allowing for related cases filed in different federal courts to be consolidated before a single judge for pretrial proceedings. Under Section 1407(g), federal antitrust enforcers (i.e. DOJ and FTC) have long been exempt from this mechanism, but state antitrust enforcers (e.g., state attorneys general) were not. That changed in December 2022, when, as part of the 2023 omnibus spending package, Congress amended Section 1407(g).
Prior to that change, in 2020, 16 states and Puerto Rico filed a lawsuit in Texas federal court against Google alleging that Google’s online advertising practices violated, among other things, antitrust law. In 2021, Google successfully sought to transfer the case to New York federal court, where it was consolidated with related private lawsuits as a multidistrict litigation.
In February 2023, the states sought to remove their case from the multidistrict litigation and have it returned to Texas federal court pursuant to the changes to Section 1407(g). Google opposed, arguing that the Section 1407(g) amendments should not apply because they came after the states’ cases had been transferred into the multidistrict litigation.
The Panel disagreed. Although Congress had not addressed retroactivity in amending Section 1407(g) and there is a general presumption against applying statutory amendments retroactively, “procedural” changes (i.e. those that do not impair existing rights, increase a party’s liability for past conduct, or impose new duties) are typically applied retroactively. Order 2–3 (applying Landgraf v. USI Film Prods., 511 U.S. 244 (1994)). The Panel also rebuffed Google’s use of legislative history. Although earlier versions of the amendment had addressed retroactivity, the later omission likely reflected a political compromise and did not reveal “where the compromise was struck.” Id. at 3 (quoting Landsgraf, 511 U.S. at 256). Thus, the Panel removed the state suits from the multidistrict litigation and sent them back to Texas federal court.
When a company’s policy or widespread practice is challenged as an antitrust violation, it can yield numerous cases filed by numerous plaintiffs in numerous districts. As it relates to government litigation, the changes to Section 1407(g) increase the risk of having to litigate multiple antitrust cases across the country simultaneously, which can be enormously burdensome and expensive, as well as risk inconsistent judgments.