Judgment-sharing agreements

Duke Law Journal

Volumn 58, Issue 5, 2009, Pages 747-825

  Leslie, Christopher R ^a  

^a UNIVERSITY OF CALIFORNIA   (United States)

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EID: 68049108339     PISSN: 00127086     EISSN: None     Source Type: Journal    
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References (393)

1. See, e.g., In re Visa Check/Mastermoney Antitrust Litig., 297 F. Supp. 2d 503, 507 (E.D.N.Y. 2003) ($3.4 billion settlement).
2. 15 U.S.C. § 15(a) (2006).
3. See 15 U.S.C. § 15b; see also, e.g., In re Vitamins Antitrust Litig., No. MISC 99- 197(TFH), 2000 WL 1475705, at *2-3 (D.D.C. May 9, 2000) (explaining that the plaintiffs' case survived a motion to dismiss in which fraudulent concealment tolled the statute of limitations, extending the period for which recovery was available); In re Catfish Antitrust Litig., 826 F. Supp. 1019, 1029 (N.D. Miss. 1993) ("[F]raudulent concealment tolls the Clayton Act's statute of limitations.").
4. Perma Life Mufflers, Inc. v. Int'l Parts Corp., 392 U.S. 134, 144 (1968) (White, J., concurring) ("[D]amages normally may be had from either or both defendants without regard to their relative responsibility for originating the combination or their different roles in effectuating its ends.");
5. Wilson P. Abraham Constr. Corp. v. Tex. Indus., Inc., 604 F.2d 897, 904 n.15 (5th Cir. 1979), aff'd sub nom. Texas Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630 (1981)
6. Wainwright v. Kraftco Corp., 58 F.R.D. 9, 11 (N.D. Ga. 1973) ("It is well settled that an antitrust action is a tort action and that in multi-defendant antitrust actions the co-conspirator joint tortfeasors are jointly and severally liable for the entire amount of damages caused by their acts." (citations omitted)).
7. E.g., Dee-K Enters., Inc. v. Heveafil Sdn. Bhd., 982 F. Supp. 1138, 1155 (E.D. Va. 1997).
8. Burlington Indus. v. Milliken & Co., 690 F.2d 380, 391 (4th Cir. 1982)
9. Flintkote Co. v. Lysfjord, 246 F.2d 368, 398 (9th Cir. 1957); A.B.A. Antitrust Section, Monograph no. 11, Contribution and Claim reduction in Antitrust Litigation 5 (1986)
10. see also Donald J. Polden & E. Thomas Sullivan, Contribution and Claim Reduction in Antitrust Litigation: A Legislative Analysis, 20 HARV. J. ON LEGIS. 397, 402-03 (1983) (discussing Burlington Industries).
11. Yosef J. Riemer, Note, Sharing Agreements Among Defendants in Antitrust Cases, 52 GEO. WASH. L. REV. 289, 304 (1984)
12. see also Hydrolevel Corp. v. Am. Soc'y of Mech. Eng'rs, Inc., 635 F.2d 118, 130 (2d Cir. 1980) ("[D]eduction of settlement proceeds before trebling would discourage settlement by making litigation relatively more profitable for plaintiffs: every dollar received in settlement would cause a three dollar reduction in the judgment at trial."), aff'd, 456 U.S. 989 (1982).
13. See A.B.A. Antitrust Section, Monograph no. 13, Treble-damages Remedy 15 (1986) ("Settling defendants rarely pay treble the overcharge resulting from their sales. Therefore, settlements have the potential of leaving the last co-conspirator in a suit liable for damages enormously greater than the overcharge caused by its sales pursuant to the conspiracy.")
14. Paula A. Hutchinson, Note, A Case Against Contribution in Antitrust, 58 TEX. L. REV. 961, 980 (1980) ("[T]he nonsettling defendants bear the risk that the plaintiff will settle with another defendant for less than the amount of damages directly attributable to it.").
15. United States v. Atl. Research Corp., 127 S. Ct. 2331, 2337-38 (2007) ("Contribution is defined as the 'tortfeasor's right to collect from others responsible for the same tort after the tortfeasor has paid more than his or her proportionate share, the shares being determined as a percentage of fault.'" (quoting Black's Law Dictionary 353 (8th ed. 1999))).
16. See, e.g., El Camino Glass v. Sunglo Glass Co., No. C-75-2492 AJZ, 1976 WL 1382, at *3 (N.D. Cal. Apr. 28, 1976); Sabre Shipping Corp. v. Am. President Lines, Ltd., 298 F. Supp. 1339, 1346 (S.D.N.Y. 1969).
17. Olson Farms, Inc. v. Safeway Stores, Inc., No. C 75-104, 1977 WL 1484, at *1 (D. Utah Oct. 25, 1977), aff'd, 649 F.2d 1370 (10th Cir. 1979).
18. Prof'l Beauty Supply, Inc. v. Nat'l Beauty Supply, Inc., 594 F.2d 1179, 1186 (8th Cir. 1979), abrogated by Tex. Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630 (1981).
19. Tex. Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630 (1981).
20. A.B.A. ANTITRUST SECTION, supra note 8, at 13-14.
21. E.g., Walker Distrib. Co. v. Lucky Lager Brewing Co., 323 F.2d 1, 8 (9th Cir. 1963) ("A plaintiff need not sue all conspirators; he may choose to sue but one."); Note, Contribution and Antitrust Policy, 78 MICH. L. REV. 890, 891 n.5 (1980) ("Similarly, the government need not sue all possible conspirators in a civil antitrust suit, and need not name all conspirators in a criminal antitrust indictment." (citing United States v. Gen. Motors Corp., 384 U.S. 127, 129 n.2 (1966); United States v. Gasoline Retailers Ass'n, 285 F.2d 688, 692 (7th Cir. 1961))).
22. See Edward D. Cavanagh, Contribution, Claim Reduction, and Individual Treble Damage Responsibility: Which Path to Reform of Antitrust Remedies?, 40 VAND. L. REV. 1277, 1284 (1987) ("For many firms, the risk of a catastrophic judgment is unacceptably high. .. .").
23. See Polden & Sullivan, supra note 6, at 403-08.
24. One possible alternative to full contribution is an option called "carve-out," which "permits reduction before trebling of a plaintiff's monetary claim against nonsettling defendants after one defendant has executed a settlement pact with plaintiffs." Mark McCareins, Carve-Out as an Answer to the Contribution Question in Private Antitrust Litigation, 58 WASH. U. L.Q. 975, 1008-09 (1980) (advocating carve-out).
25. Cavanagh, supra note 16, at 1281.
26. See Burlington Indus. v. Milliken & Co., 690 F.2d 380, 394 (4th Cir. 1982) ("[J]oint and several liability. .. has been the established doctrine of antitrust law for the better part of a century... which Congress has not seen fit to disapprove.").
27. See A.B.A. Antitrust Section, supra note 6, at 19 ("A sharing agreement is, in essence, contractual contribution.").
28. Mark Call Dickinson, Note, Contribution in Antitrust Treble Damage Actions, 6 J. CORP. L. 141, 163 (1980) ("The sharing agreement can be seen to be the equivalent of self-imposed rules of contribution....").
29. Dickinson, supra note 20, at 163.
30. Manual for complex litigation § 13.23 (4th ed. 2004).
31. Riemer, supra note 7, at 295; see also, e.g., In re Brand Name Prescription Drugs Antitrust Litig., Nos. 94 C 897, MDL 997, 1995 WL 221853, at *4 (N.D. Ill. Apr. 11, 1995) (mem.) (discussing a JSA using a modified market share approach); S. REP. NO. 96-428, at 4 (1979) ("The liability is... based on an assessment of the damages attributable to each defendant's specific relative benefit from the price-fixed sales weighted by the amount of the overcharge as reflected in its individual sales or purchases.").
32. Lisa Bernstein & Daniel Klerman, An Economic Analysis of Mary Carter Settlement Agreements, 83 GEO. L.J. 2215, 2270 n.149 (1995).
33. Jesse W. Markham, Jr., Corporate Compliance Ethics and Malpractice Prevention, 1526 PLI/CORP. 1387, 1401 (Jan.-Feb. 2006)
34. Dickinson, supra note 20, at 163 ("[M]any defendants involved in private treble damage actions have joined forces and entered into judgment sharing agreements."); Note, supra note 15, at 909 ("[S]haring agreements are fairly common among larger antitrust defendants in class action suits....").
35. Antitrust Damage Allocation: Hearings Before the Subcomm. on Monopolies and Commercial Law of the H. Comm. on the Judiciary, 97th Cong. 7 (1982) [hereinafter Antitrust Damage Allocation Hearings] (statement of A. Stephens Clay, Esq., Kilpatrick & Cody) ("At the beginning of any major antitrust litigation involving an alleged horizontal price fixing conspiracy among several defendants, defense counsel typically will meet with each other to determine if their clients are willing to enter into a so-called 'sharing agreement.'"); id. at 25-26 (statement of Stephen D. Susman, Esq., Susman & McGowan) (arguing that "in every major antitrust conspiracy case, one of the first things the defendants do is get together and see if they can enter into a sharing agreement" but noting that negotiations often do not result in JSAs); Antitrust Equal Enforcement Act of 1979, S. 1468: Hearings Before the Subcomm. on Antitrust, Monopoly and Business Rights of the S. Comm. on the Judiciary, 96th Cong. 85 (1979) [hereinafter Antitrust Equal Enforcement Act Hearings] (statement of Robert P. Taylor) (noting that the attempt to achieve a JSA "is one of the first things" that price-fixing defendants do); S. REP. NO. 96-428, at 41 (supplemental views of Sen. Metzenbaum & Sen. Kennedy) ("Large defendants often attempt, to reach liability sharing agreements among all defendants who go to trial.").
36. See Antitrust Damage Allocation Hearings, supra note 25, at 142 (statement of Robert P. Taylor, Esq., Pillsbury, Madison & Sutro); S. REP. NO. 96-428, at 2.
37. See Antitrust Equal Enforcement Act Hearings, supra note 25, at 121 (statement of Donald T. Hibner, Attorney) ("[Judgment-sharing] agreements are incredibly complex and difficult to negotiate. Where the defendants are few, of relatively the same size, and have relatively the same degree of innocence or guilt, such agreements are feasible. Where other factors are present, they are not.").
38. Antitrust Damage Allocation Hearings, supra note 25, at 142 (statement of Robert P. Taylor, Esq., Pillsbury, Madison & Sutro) ("In a great many cases, however, because of disparities in size, culpability, market share or other such factors, defendants are not able to negotiate sharing agreements."); id. at 232 n.14 (letter from Hon. Charles B. Renfrew, Pillsbury, Madison & Sutro, to members of the H. Subcomm. on Monopolies and Commercial Law) ("[P]rivate sharing agreements... frequently cannot be negotiated....").
39. Riemer, supra note 7, at 290 n.8 ("Because defendants often enter into sharing agreements on a confidential basis and then claim that the existence and terms of any such agreement are privileged as part of their joint defense, it is difficult to determine the extent to which sharing agreements are used." (citations omitted)); see also A.B.A. ANTITRUST SECTION, supra note 6, at 20 ("Unfortunately, there exists no helpful data measuring the frequency of use of sharing agreements."); infra notes 266-71 (advocating that JSAs should be discoverable).
40. See, e.g., Antitrust Damage Allocation Hearings, supra note 25, at 7 (statement of A. Stephens Clay, Esq., Kilpatrick & Cody); id. at 135 (statement of Robert P. Taylor, Esq., Pillsbury, Madison & Sutro); id. at 231 (letter from Hon. Charles B. Renfrew, Pillsbury, Madison & Sutro, to members of the H. Subcomm. on Monopolies and Commercial Law); id. at 266 (statement of Hubert L. Will, J., United States District Court for the Northern District of Illinois); id. at 444 (letter from Denis P. McInerney, Esq., Cahill, Gordon & Reindel, to Peter W. Rodino, Jr., Chairman, H. Comm. on the Judiciary); id. at 448 ("Private sharing agreements are lawful...."); id. at 474 (letter from James F. Rill, Esq., Collier, Shannon, Rill & Scott, to Peter W. Rodino, Jr., Chairman, H. Comm. on the Judiciary); id. at 479 (letter from Robert P. Taylor, Esq., Pillsbury, Madison & Sutro, to Peter W. Rodino, Jr., Chairman, H. Comm. on the Judiciary) ("Many lawyers believe that judgment sharing agreements are lawful and enforceable....")
41. Cavanagh, supra note 16, at 1326-27 (citing S. REP. NO. 97-359, at 2 (1982)).
42. See Antitrust Damage Allocation Hearings, supra note 25, at 467 (letter from William F. Baxter, Assistant Att'y Gen., Antitrust Division, Department of Justice, to Peter W. Rodino, Jr., Chairman, H. Comm. on the Judiciary) ("Of course, there is nothing in the Department's proposal that would negate the possibility of defendants entering into sharing agreements after the passage of the proposed legislation; in fact, the legislation may well create strong incentives among defendants to enter into such agreements to avoid the potential and divisive costs of contribution litigation.").
43. See S. REP. NO. 96-428, at 26 (1979).
44. MANUAL FOR COMPLEX LITIGATION, supra note 22, § 13.23.
45. A.B.A. ANTITRUST SECTION, ANTITRUST EVIDENCE HANDBOOK 61 (2d ed. 2002) ("Courts have upheld sharing agreements in antitrust cases against challenges to their validity." (citations omitted)).
46. see also Bernstein & Klerman, supra note 23, at 2270 n.149 ("Such agreements are generally upheld despite the fact that they will affect the defendants' trial strategy and their incentives to testify in particular ways at trial.").
47. Cimarron Pipeline Constr., Inc., v. Nat'l Council on Comp. Ins., Nos. CIV-89-822-T, CIV-89-1886-T, 1992 WL 350612, at *2 (W.D. Okla. Apr. 10, 1992).
48. See Hutchinson, supra note 8, at 961.
49. A.B.A. Antitrust Section, supra note 6, at 19 ("Sharing agreements are attractive to defendants precisely because they manage the risk of a potentially large judgment and dampen the competition for early, cheap settlements.").
50. See Antitrust Damage Allocation Hearings, supra note 25, at 37-38 (statement of Denis McInerney, Esq., Cahill, Gordon & Reindel). This is particularly true with antitrust class actions in which the class counsel has a vested interest in securing guaranteed money upfront, lest they be out their costs.
51. See, e.g., In re Brand Name Prescription Drugs Antitrust Litig., Nos. 94 C 897, MDL 997, 1995 WL 221853, at *4 (N.D. Ill. Apr. 11, 1995) (mem.) ("The plaintiffs 'take small amounts... at the beginning of the settlement process' and larger amounts as time progresses." (quotation error in original) (quoting The Antitrust Equal Enforcement Act: Hearings Before the S. Comm. on the Judiciary, 97th Cong. 482 (1982)))
52. Cavanagh, supra note 16, at 1288 n.67 (providing settlement figures in corrugated container litigation).
53. A.B.A. ANTITRUST SECTION, supra note 6, at 15-16 ("In fact, the plaintiffs openly announced that each settlement in the case would be at progressively higher rates, and each settlement agreement contained a 'most favored nation clause' that assured that succeeding settlements would be no more favorable." (footnote omitted)).
54. Note, supra note 15, at 907.
55. A.B.A. ANTITRUST SECTION, supra note 6, at 15.
56. Cavanagh, supra note 16, at 1294.
57. William Breit & Kenneth G. ElzingA, Antitrust penalty reform: an economic analysis 29 (1986).
58. McCareins, supra note 17, at 997.
59. Antitrust Damage Allocation Hearings, supra note 25, at 37-38 (statement of Denis McInerney, Esq., Cahill, Gordon & Reindel).
60. See Cavanagh, supra note 16, at 1289-90.
61. See Note, supra note 15, at 906 (discussing an example of a firm that acquiesced to global settlement).
62. Cavanagh, supra note 16, at 1294.
63. A.B.A. Antitrust Section, supra note 6, at 15 ("Thus, a competition develops among defendants to settle early in the case, when plaintiffs need money and settlements are cheap, which reduces the pool of remaining defendants and thereby further fuels the impetus to settle quickly.").
64. C. Douglas Floyd, Contribution Among Antitrust Violators: A Question of Legal Process, 1980 B.Y.U. L. REV. 183, 188
65. Jonathan M. Jacobson, Contribution Among Antitrust Defendants: A Necessary Solution to a Recurring Problem, 32 U. Fla. L. Rev. 217, 221 (1980)
66. Riemer, supra note 7, at 293-94(discussing Corrugated Container and pointing out that "[t]he settlement pressures were said to be so great that twenty-three defendants paid an amount of almost $300 million during a one-month settlement 'stampede'" (citing In re Corrugated Container Antitrust Litig., 84 F.R.D. 40, 41 (S.D. Tex. 1979), aff'd, 606 F.2d 319 (5th Cir. 1979))); Panic Aided Record Box Settlements, Legal Times (Wash., D.C.), May 7, 1979, at 1.
67. The term "majority" here means that the settling defendants were responsible for the majority of the alleged cartel's market share.
68. E.g., In re Corrugated Container Antitrust Litig., 84 F.R.D. at 41.
69. A.B.A. Antitrust Section, supra note 6, at 15 ("Towards the end of this settlement process, proponents claim, the few remaining defendants face potential liabilities so large that they cannot afford to take the risk of going to trial and losing, even if justifiably convinced that they are innocent of any wrongdoing.").
70. See, e.g., Antitrust Damage Allocation Hearings, supra note 25, at 134 (statement of Robert P. Taylor, Esq., Pillsbury, Madison & Sutro) ("I strongly believe that any rational legal system must distribute liability on some basis among all those who are responsible for it. It is manifestly unfair to require one company arbitrarily to shoulder the entire burden of compensating a plaintiff, while other equally responsible and perhaps more culpable companies are required to pay nothing in compensation of the plaintiff."); id. at 285 (statement of Hon. Barbara Jordan); A.B.A. ANTITRUST SECTION, supra note 6, at 13-14 ("Under the present law, it is possible for some violators to escape liability fully, by not being sued, or partially, by getting so-called 'sweetheart settlements.' Proponents of contribution legislation contend that this is also unfair.")
71. John Cirace, A Game Theoretic Analysis of Contribution and Claim Reduction in Antitrust Treble Damage Suits, 55 ST. JOHN'S L. REV. 42, 45 (1980) ("In general, whenever a defendant settles with the plaintiff for a sum less than three times the damages attributable to its acts, each remaining defendant faces an increased risk that it will be forced to bear more than its proportionate share of the damages.").
72. Jacobson, supra note 51, at 233 ("But is it fair to compel Olson Farms to pay three times the damage caused by the entire conspiracy when it was responsible for only eleven percent? Clearly not.").
73. See In re Brand Name Prescription Drugs Antitrust Litig., Nos. 94 C 897, MDL 997, 1995 WL 221853, at *4 (N.D. Ill. Apr. 11, 1995) (mem.) ("The relative culpability of the defendant is no longer pertinent. Instead, a sort of 'game theory' element emerges.").
74. Cavanagh, supra note 16, at 1290 ("The lack of contribution in antitrust cases permits the utilization of whipsaw tactics that result in defendants paying settlement amounts bearing no reasonable relationship to their degree of culpability or their benefits from the conspiracy.").
75. See Note, supra note 15, at 907 ("Defendants who settle early in the whipsaw usually pay far less than their share of the trebled liability-whether computed according to market shares or on some other basis-and non-settling defendants remain liable for the difference." (footnote omitted)).
76. See Antitrust Damage Allocation Hearings, supra note 25, at 38 (statement of Denis McInerney, Esq., Cahill, Gordon & Reindel) ("Consequently, it has become commonplace for late-settling defendants to be forced to contribute to settlements in amounts wholly disproportionate to their percentage of the questioned sales....").
77. See Prof'l Beauty Supply, Inc. v. Nat'l Beauty Supply, Inc., 594 F.2d 1179, 1185 (8th Cir. 1979) ("This possibility [of escaping all liability] significantly increases where a large or powerful tortfeasor has sufficient economic influence to prevent a plaintiff from including it as a defendant."), abrogated by Tex. Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630 (1981); Note, supra note 15, at 905-06 (citing the trial record in Cackling Acres, Inc. v. Olson Farms, Inc., 541 F.2d 242 (10th Cir. 1976)).
78. See Note, supra note 15, at 905 n.77 ("The plaintiff may be a blood relative of one of the potential defendants." (citing Norfolk & S. R.R. v. Beskin, 125 S.E. 678 (Va. 1924))).
79. See Dickinson, supra note 20, at 165 n.180 (noting that the plaintiff's strategy in Olson Farms, Inc. v. Safeway Stores, Inc., 649 F.2d 1370 (10th Cir. 1979), may have been "to obtain a speedy recovery and avoid costly litigation with numerous defendants, [by having] the plaintiff... select the smallest co-conspirator that in its estimation has sufficient assets to pay the potential judgment and file suit naming only that party as a defendant"). The court, however, did not acknowledge this point. See Olson Farms, 649 F.2d at 1380 (Holloway, J., concurring in part and dissenting in part) ("We do not have a record or evidence in the instant case indicating the reasons why Olson Farms was sued and the defendants-appellees were ignored.").
80. See, e.g., Walker Distrib. Co. v. Lucky Lager Brewing Co., 323 F.2d 1, 8 (9th Cir. 1963) ("A plaintiff need not sue all conspirators; he may choose to sue but one.").
81. The most famous instance is perhaps Olson Farms, in which the plaintiff sued only the smallest egg buyer in an alleged buyers' cartel and the defendant was held liable for damages far in excess to its business relationship with the plaintiff. See Olson Farms, 649 F.2d at 1380 (Holloway, J., concurring in part and dissenting in part).
82. See Prof'l Beauty Supply, 594 F.2d at 1185-86 ("There is an obvious lack of sense and justice in a rule which permits the entire burden of restitution of a loss for which two parties are responsible to be placed upon one alone because of the plaintiff's whim or spite, or his collusion with the other wrongdoer.")
83. Jacobson, supra note 51, at 238 ("It is unfair to allow plaintiffs to single out one defendant to satisfy the liability of many. It is unfair to compel a single defendant to pay treble damages for an entire industry's liability. And it is unfair to force a defendant to abandon its defense and settle simply because of the coercive impact of earlier settlements with more culpable parties.").
84. Dickinson, supra note 20, at 179; see also Antitrust Equal Enforcement Act Hearings, supra note 25, at 1-2 (statement of Sen. Bayh, Member, S. Comm. on the Judiciary) ("[W]e have to be aware that in a large antitrust suit... a small or medium-sized company could easily face legal responsibility on behalf of the entire industry... while larger, more culpable businesses go relatively free....").
85. See Antitrust Equal Enforcement Act Hearings, supra note 25, at 36-37 (statement of Sen. Bayh, Member, S. Comm. on the Judiciary); id. at 67 (statement of Donald G. Kempf, Jr.).
86. See, e.g., Note, supra note 15, at 907-10.
87. See, e.g., Cavanagh, supra note 16, at 1290. This does not seem particularly surprising given that the plaintiff's burden of proof in private litigation is lower than the government's in a criminal prosecution. Also, new evidence may have come to light between the criminal and civil proceedings. For example, Cargill, a provider of food and agricultural products, escaped criminal liability for its participation in the citric acid price-fixing conspiracy because definite evidence came to light too late. Compare In re Citric Acid Litig., 191 F.3d 1090, 1106 (9th Cir. 1999) (noting that the government declined to prosecute Cargill and affirming summary judgment for Cargill in a follow-on civil suit), with David Barboza, Archer Daniels Executive Said To Tell of Price-Fixing Talks with Cargill Counterpart, N.Y. TIMES, June 17, 1999, at C6 (showing that Cargill participated in a price-fixing conspiracy).
88. A.B.A. Antitrust Section, supra note 6, app. A at 53 (Report of the Section on Proposed Amendment of the Clayton Act to Permit Contribution in Damage Actions); see also Antitrust Equal Enforcement Act Hearings, supra note 25, at 66-67 (statement of Donald G. Kempf, Jr.) ("The fact of the matter is that today antitrust settlements are being entered into which bear no necessary relationship to whether or not the defendants engaged in any improper conduct or whether or not the plaintiffs suffered any damage.").
89. See Cavanagh, supra note 16, at 1290.
90. See Note, supra note 15, at 908 ("By the latter stages of the whipsaw, a company directly responsible for only a small fraction of a plaintiff's damages may alone face liability for damages caused by an entire industry."); see also, e.g., id. at 904 ("Although Olson Farms was the smallest of the price-fixers by sales, the plaintiffs sued that company alone for treble damages. The judgment Olson Farms eventually paid amounted to twenty-four times the damages immediately caused by the company's egg purchases.").
91. See id. at 906.
92. See, e.g., A.B.A. ANTITRUST SECTION, supra note 6, at 20-23.
93. In re Brand Name Prescription Drugs Antitrust Litig., Nos. 94 C 897, MDL 997, 1995 WL 221853, at *4 (N.D. Ill. Apr. 11, 1995) (mem.).
94. Manual for complex litigation, supra note 22, § 13.23.
95. Cf. Note, supra note 15, at 910 (discussing how a contribution rule would reduce whipsawing).
96. A.B.A. Antitrust Section, supra note 6, app. A at 68 (Minority Report on Contribution) ("If plaintiffs truly are using their leverage arising from defendants' joint and several liability in an abusive manner, defendants already have at their disposal the weapon needed to redress the imbalance. Sharing agreements, enthusiastically endorsed in the Majority Report, can provide desired protection and without creating disabling uncertainty.").
97. Dickinson, supra note 20, at 187-90.
98. See Antitrust Equal Enforcement Act Hearings, supra note 25, at 69 (statement of Donald G. Kempf, Jr.) ("[Contribution] improves the deterrent force of our price-fixing laws. Violators will not go unpunished, as they can now.").
99. Prof'l Beauty Supply, Inc. v. Nat'l Beauty Supply, Inc., 594 F.2d 1179 (8th Cir. 1979), abrogated by Tex. Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630 (1981).
100. See, e.g., Riemer, supra note 7, at 312 ("Risk-neutral potential violators are unlikely to be less deterred under a sharing agreement because the resulting reduced amount of potential liability is offset by the increased probability of having to make at least some payments.").
101. See S. REP. NO. 96-428, at 9 (1979) ("[I]n a regulatory scheme, where one of the goals is to deter destructive or illegal behavior, the best way to do so is to require that all of those responsible for the wrong pay their part of the liability. This ensures that no one gets out of the suit without paying for the wrong committed.").
102. See, e.g., Antitrust Damage Allocation Hearings, supra note 25, at 233 (letter from Hon. Charles B. Renfrew, Esq., Pillsbury, Madison & Sutro, to members of the H. Subcomm. on Monopolies and Commercial Law).
103. See id. at 118 (statement of Donald T. Hibner, Jr.) ("Most businessmen are not aware of contribution or noncontribution. What is a deterrent, and what they know about, are treble damages, fines, imprisonment, and class actions."); A.B.A. ANTITRUST SECTION, supra note 6, at 24-25 ("Proponents also claim that the threat of criminal liability and to a lesser extent treble damages, not joint and several liability, are the true deterrents to price fixing and other anticompetitive activity. As one attorney testified, '[a]ny corporate executive foolish enough to engage in such activities in the face of those risks would hardly be deterred by the lack of a contribution statute.'" (alteration in original) (quoting Antitrust Damage Allocation Hearings, supra note 25, at 39 (statement of Denis McInerney, Esq., Cahill, Gordon & Reindel))).
104. See A.B.A. Antitrust Section, supra note 6, at 25 ("[P]roponents claim that joint and several liability can overdeter conduct which is subject to antitrust scrutiny but may be procompetitive or competitively neutral."); A.B.A. Antitrust Section, supra note 8, at 30-35, 40-44.
105. See Note, supra note 15, at 911 ("Excessive penalties can cause businesses to shun competitive practices lying close to the borderline of impermissible conduct... for example... refus[ing] to release price information for fear that it may be interpreted as price-fixing.").
106. See, e.g., United States v. U.S. Gypsum Co., 438 U.S. 422, 441 (1978) ("[There exists] the distinct possibility of overdeterrence; salutary and procompetitive conduct lying close to the borderline of impermissible conduct might be shunned by businessmen who chose to be excessively cautious in the face of uncertainty regarding possible exposure to criminal punishment for even a good-faith error of judgment."); see also S. REP. NO. 96-428, at 18 (1979).
107. Tex. Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630, 636-37 (1981) (citing U.S. Gypsum Co., 438 U.S. at 441-42).
108. See, e.g., Arth Main St. Drugs v. Beer Distribs. of Ind., Inc., No. F 77-73, 1978 WL 1357, at *3 (N.D. Ind. June 8, 1978) (mem.) (asserting that the treble damages could bankrupt antitrust defendants).
109. see also Edward D. Cavanagh, Detrebling Antitrust Damages: An Idea Whose Time Has Come?, 61 TUL. L. REV. 777, 793 (1987) ("Where actual damages are high, mandatory trebling may impair a firm's ability to compete after judgment.").
110. Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 346 (1971).
111. See Antitrust Damage Allocation Hearings, supra note 25, at 19 (statement of Stephen D. Susman, Esq., Susman & McGowan).
112. A.B.A. ANTITRUST SECTION, supra note 6, at 39.
113. Frank H. Easterbrook, William M. Landes & Richard A. Posner, Contribution Among Antitrust Defendants: A Legal and Economic Analysis, 23 J.L. & ECON. 331, 354 (1980).
114. E.g., Riemer, supra note 7, at 315 ("[T]he fact that sharing agreements affect the terms of settlements is irrelevant to the goal of compensation. These agreements may affect the ultimate apportionment of a judgment among defendants, but they do not, in any way, cause a reduction in the amount of the judgment that a plaintiff can recover." (footnotes omitted)).
115. See Easterbrook et al., supra note 95, at 365 ("A rule of no contribution creates competition among defendants to settle rather than litigate. Each defendant dreads being the last to settle, because every time one defendant settles the expected liability of the remainder increases. The plaintiff can use this fear to obtain a larger aggregate settlement under a nocontribution rule than he could expect to obtain if all of the defendants litigated.").
116. See A.B.A. Antitrust Section, supra note 6, at 40 ("Economic analysis suggests that the rule of no contribution produces higher aggregate settlements by fostering competition among defendants to settle early.").
117. See David Boies, Courting Justice 320-54 (2004) (discussing the auction houses price-fixing class action lawsuit)
118. Cavanagh, supra note 16, at 1327 n.271 ("[I]n the In re Antibiotics Antitrust Cases, the five defendants entered into a sharing agreement and thereby avoided any 'rush to settlement.'").
119. See Antitrust Equal Enforcement Act Hearings, supra note 25, at 94-96 (testimony of Harold Kohn, Attorney).
120. See Antitrust Damage Allocation Hearings, supra note 25, at 237 (testimony of William W. Schwarzer, J., Northern District of California) ("I think that it is probably true that the cases would be settled at lower amounts than now because of the decline in the plaintiff's leverage.").
121. In re Brand Name Prescription Drugs Antitrust Litig., Nos. 94 C 897, MDL 997, 1995 WL 221853, at *4 (N.D. Ill. Apr. 11, 1995) (mem.).
122. A.B.A. ANTITRUST SECTION, supra note 6, at 19.
123. see also Antitrust Damage Allocation Hearings, supra note 25, at 142 (statement of Robert P. Taylor, Esq., Pillsbury, Madison & Sutro) ("Although diverse, such agreements typically apportion liability under some agreedupon formula, often market share, and provide that if any signatory defendant settles it must require the plaintiff to reduce any judgment obtained against the other signatories by the settling defendant's percentage share under the agreement or alternatively to remain contractually responsible to the other signatories for any difference.").
124. Riemer, supra note 7, at 306 ("[B]ecause a settling defendant is relieved of liability to the non-settling defendants only if the settlement agreement contains a claim reduction or carve-out provision, defendants will have little incentive to settle unless plaintiffs agree to such a provision." (footnote omitted)).
125. See S. REP. NO. 96-428, at 36 (1979) (supplemental views of Sen. Metzenbaum & Sen. Kennedy).
126. Antitrust Damage Allocation Hearings, supra note 25, at 270 (testimony of Hubert L. Will, J., Northern District of Illinois).
127. Mark D. Plevin, Avoiding Problems in Joint Defense Groups, 23 LITIGATION 41, 44 (1996)
128. see also Antitrust Damage Allocation Hearings, supra note 25, at 7 (statement of A. Stephens Clay, Esq., Kilpatrick & Cody) ("Such an agreement provides, among other things, that no defendant will settle unless the plaintiffs surrender their claim for damages attributable to that defendant's sales."); Antitrust Equal Enforcement Act Hearings, supra note 25, at 121 (statement of Donald T. Hiber) ("If a defendant settles, he must insure that the plaintiffs will not seek recovery from others based upon alleged overcharges on the settling defendant's sales. If the settling defendant does not 'remove his sales from suit' he will be liable to the remaining defendants.").
129. H. Robert Halper, The Unsettling Problems of Settlement in Antitrust Damage Cases, 32 ANTITRUST L.J. 98, 99-100 (1966).
130. Antitrust Damage Allocation Hearings, supra note 25, at 93 (statement of Harold E. Kohn, Esq., Kohn, Savett, Marion & Graf, P.C.) (stating that contribution rights among antitrust defendants would "in many instances" make settlement "impossible").
131. See S. REP. NO. 96-428, at 25.
132. See, e.g., Cimarron Pipeline Constr. v. Nat'l Council on Comp. Ins., Nos. CIV-89-822-T, CIV-89-1886-T, 1992 WL 350612, at *2 (W.D. Okla. Apr. 10, 1992).
133. Indeed, one of the purported justifications for JSAs is that they forestall settlements. For example, one source argues that "a judgment-sharing agreement may be appropriate where there is a meritorious defense and the defendants want to make sure that none of the other defendants settle." Edward D. Cavanagh, Antitust, 5 BUSINESS AND COMMERCIAL LITIGATION IN FEDERAL COURTS § 61, § 61.7 (Robert L. Haig ed., 2d ed. 2008). While Professor Cavanaugh supports JSAs when the defendants have a meritorious defense, the settlement-precluding effect of a JSA exists regardless of whether the defendants have a meritorious defense.
134. Cimarron Pipeline Constr. v. Nat'l Council on Comp. Ins., Nos. CIV-89-822-T, CIV-89- 886-T, 1992 WL 350612 (W.D. Okla. Apr. 10, 1992).
135. See Antitrust Damage Allocation Hearings, supra note 25, at 94-95 (statement of Harold E. Kohn, Esq., Kohn, Savett, Marion & Graf).
136. Jeffrey M. Perloff, Daniel L. Rubinfeld & Paul Ruud, Antitrust Settlements and Trial Outcomes, 78 REV. ECON. & STAT. 401, 407 (1996).
137. Joseph L. Alioto, The Economics of a Treble Damage Case, 32 ANTITRUST L.J. 87, 92 (1966) ("[A] war of attrition [is] carried on as an accepted method of defence by the large defendants and their attorneys; any suggestion that the plaintiff may not be adequately financed will result in stretching out the pretrial process by various devices.").
138. MANUAL FOR COMPLEX LITIGATION, supra note 22, § 13.21 ("Such partial settlements may provide funds needed to pursue the litigation....")
139. see also Antitrust Damage Allocation Hearings, supra note 25, at 8 (statement of A. Stephens Clay, Esq., Kilpatrick & Cody) ("Partial settlements, or settlements with fewer than all the defendants, have served as a crucial preliminary step in achieving comprehensive settlements of complex antitrust litigation.").
140. S. REP. NO. 96-428, at 40 (1979) (supplemental views of Sen. Metzenbaum & Sen. Kennedy) ("Allowing contribution would discourage... settlements and make it much more difficult for the plaintiff to ultimately prevail. The more difficulty the plaintiff faces, the less likely such suits will be brought, the less likely plaintiffs will succeed, and the less likely would-be violators will be deterred." (alteration in the original) (quoting Alabama v. Bluebird Body Co., No. 75-23-N, slip op. at 5 (M.D. Ala. May 18, 1979))).
141. See, e.g., John M. Connor, Global price fixing 314 (2001) ("Boies & Schiller filed a civil price-fixing suit in U.S. District Court in Dallas, Texas on behalf of several direct purchasers of bulk vitamins in March 1998. It would be more than one year before the government indicted Hoffmann-La Roche, BASF, and others for the same crimes.").
142. See In re Folding Carton Antitrust Litig., 84 F.R.D. 245, 266 (N.D. Ill. 1979) ("Nonetheless, it can also be said that prior criminal proceedings are generally narrower in scope than any civil action and helpful, from a discovery viewpoint, only in the beginning. Where all or most of the defendants plead Nolo soon after indictments have been handed down, government evidence gathering comes to a halt and the civil plaintiffs must do considerable discovery work on their own.").
143. See, e.g., id. at 252.
144. see also ALBA CONTE & HERBERT B. NEWBERG, NEWBERG ON CLASS ACTIONS § 18:57 (4th ed. 2002) ("Plaintiffs' counsel will usually seek, initially at least, to recover damages based on the entire alleged conspiracy period, when it is longer than four years....").
145. Antitrust Damage Allocation Hearings, supra note 25, at 28 (statement of Stephen D. Susman, Esq., Susman & McGowan).
146. See 15 U.S.C. § 1 (2006) ("Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court.").
147. Gilbert Geis, White Collar Criminal: The Heavy Electrical Equipment Antitrust Case in 1961, in White-collar criminal 103, 107 (Gilbert Geis ed., 1968).
148. see also, e.g., James B. Lieber, Rats in the grain: the dirty tricks and trials of archer daniels midland 221 (2000) (discussing the lysine cartel and measures taken to conceal the cartel).
149. John Gibeaut, Antitrust American Style, A.B.A. J., Apr. 2004, at 55, 58 ("Cartels are especially hard to detect because members can reach secret agreements under the cover of social connections, trade associations, mutual business contacts and other legitimate circumstances.").
150. Geis, supra note 126, at 107 (second alteration in original) (quoting Administered Prices: Hearings Before the Subcomm. on Antitrust and Monopoly of the S. Comm. on the Judiciary, 87th Cong. pt. 27 (1961)).
151. See, e.g., LIEBER, supra note 126, at 155-56.
152. See Christopher R. Leslie, Cartels, Agency Costs, and Finding Virtue in Faithless Agents, 49 WM. & MARY L. REV. 1621, 1641-48 (2008).
153. Cécile Aubert, Patrick Rey & William E. Kovacic, The Impact of Leniency and Whistle- Blowing Programs on Cartels, 24 Int'l J. Indus. Org. 1241, 1260 (2006) (explaining that cartel members take notes because cartel "agreements may be very complex, due to the variety of products and prices involved, and to the number of possible contingencies; limited memory may then call for keeping notes about the agreement").
154. see also, e.g., Christopher Mason, the Art of the Steal 142 (2003) (describing a price fixer who "thought it wise to keep a record of [price-fixing] discussions in case of any unforeseen repercussions")
155. Douglas Frantz, Private Files Fuel an Art Auction Inquiry, N.Y. TIMES, Oct. 8, 2000, at A1 (describing notes that were taken in the Christie's case that were handed over to the Department of Justice).
156. MASON, supra note 131, at 140-41 (providing the entire series of events in the Christie's case in detail).
157. See id. at 142.
158. Wayne D. Brazil, Civil Discovery: Lawyers' Views of Its Effectiveness, Its Principal Problems and Abuses, 1980 AM. B. FOUND. RES. J. 787, 811-13.
159. See Alioto, supra note 118, at 92-93.
160. See, e.g., In re Linerboard Antitrust Litig., 296 F. Supp. 2d 568, 575 (E.D. Pa. 2003).
161. See, e.g., Boies, supra note 99, at 340 ("After our meeting with the Christie's lawyers, Richard, Phil, and I sat down to try to structure a settlement offer that would induce Christie's to pay the class a substantial amount of money and, equally important, provide us with the evidence we were missing to establish a buyers' commission conspiracy.").
162. Halper, supra note 109, at 113 n.25 ("[A settling antitrust] defendant might agree to make specific information available, or allow plaintiff to interview its employees.").
163. Boies, supra note 99, at 242 n.*.
164. Manual for complex litigation, supra note 22, § 13.21.
165. Dickinson, supra note 20, at 180-81.
166. This notion is consistent with the observation that "post discovery settlements are more likely to reflect the true value of the claim and be fair." Lazy Oil Co. v. Witco Corp., 166 F.3d 581, 588 (3d Cir. 1999) (alteration omitted) (quoting Bell Atl. Corp. v. Bolger, 2 F.3d 1304, 1314 (3d Cir. 1993)).
167. See Antitrust Damage Allocation Hearings, supra note 25, at 51 (statement of John F. Seiberling, Member, H. Comm. on the Judiciary) ("[F]rom the practical standpoint of a plaintiff's lawyer, it is going to be extremely difficult for him to proceed to collect evidence if everyone is liable for his pro rata share."); MANUAL FOR COMPLEX LITIGATION, supra note 22, § 13.23 ("[Sharing agreements] also create a disincentive for defendants to make available evidence indicating liability on the part of codefendants.").
168. Bernstein & Klerman, supra note 23, at 2270 n.149.
169. A dominant strategy exists if a player is better off picking a particular option regardless of which course the player's partner selects. Conversely, if a player could be better off changing the decision after learning the player's partner's choice, then no choice dominates the other under all circumstances and there is no dominant strategy and no true prisoner's dilemma.
170. Christopher R. Leslie, Trust, Distrust, and Antitrust, 82 TEX. L. REV. 515, 558 (2004).
171. Christopher R. Leslie, Antitrust Amnesty, Game Theory, and Cartel Stability, 31 J. CORP. L. 453, 465-66 (2006)
172. [15] U.S.C. § 1 note (2006) (Antitrust Enforcement Enhancements and Cooperation Incentives). In essence, the Amnesty Program eliminates both treble damages and joint and several liability for the first firm to confess.
173. Late-confessing firms also generally must sacrifice at least one executive, who must serve prison time. See Leslie, supra note 130, at 1660-61.
174. Gary R. Spratling, Detection and Deterrence: Rewarding Informants for Reporting Violations, 69 GEO. WASH. L. REV. 798, 799 (2001).
175. Kathryn K. Dyer & Garrett M. Liskey, Antitrust Violations, 45 AM. CRIM. L. REV. 195, 224 (2008).
176. CONNOR, supra note 121, at 509.
177. Spratling, supra note 152, at 800.
178. A.B.A. Antitrust Section, Antitrust Compliance: Perspectives And Resources For Corporate Counselors 49 (2005)("This 'winner-takes-all' dynamic generates tension and mistrust among cartel members.").
179. See Cirace, supra note 55, at 54-55.
180. Cavanagh, supra note 16, at 1302.
181. A.B.A. Antitrust Section, supra note 6, at 14 ("Although it has been suggested that a plaintiff may target a particular defendant to satisfy the judgment for anticompetitive purposes, there is no evidence to suggest that judgments have been disproportionately or unfairly executed on a widespread basis.").
182. Antitrust Damage Allocation Hearings, supra note 25, at 13 (testimony of Stephen D. Susman, Esq., Susman & McGowan) ("There is no empirical evidence that any antitrust settlement or judgment has ever bankrupted a defendant."); id. at 473 (statement of James F. Rill, Esq., Collier, Shannon, Rill & Scott) ("I am not aware of any instance in which a company has been forced into bankruptcy because of the execution of an adverse judgment rendered in an antitrust lawsuit."); id. at 477 (statement of Robert P. Taylor) ("I am not aware of any situation in which a defendant has been forced into bankruptcy by having to satisfy an antitrust judgment."); A.B.A. ANTITRUST SECTION, supra note 6, at 14 ("The Subcommittee has also been given few, if any, examples in which small defendants were forced to shoulder grossly disproportionate liability for nationwide conspiracies." (quoting Staff of the H. Comm. on the Judiciary, 98th Cong., Proposed Legislation to Allocate Damages Among Defendants in Private Antitrust Litigation (Comm. Print 1983), reprinted in 44 Antitrust & Trade Reg. Rep. (BNA) 280 (Feb. 10, 1983))).
183. A.B.A. Antitrust Section, supra note 6, at 17 ("Unfortunately, there is no systematic data which allows one to quantify the frequency or amounts of so-called coerced settlements.")
184. Cavanagh, supra note 16, at 1301 ("A careful review of the legislative debates concerning damage allocation reform suggests that the unfairness arguments have been generated by a few well-publicized cases. The problem is hence not as pervasive as it might appear at first glance.").
185. A.B.A. Antitrust Section, supra note 6, at 18.
186. See, e.g., Olson Farms, Inc. v. Safeway Stores, Inc., 649 F.2d 1370, 1372-73 (10th Cir. 1979) (examining Olson Farms's claim for contribution against Safeway Stores after Olson Farms had been previously found liable as the sole defendant in an antitrust suit).
187. Dickinson, supra note 20, at 172 (citing Peter G. Corbett, Apportionment of Damages and Contribution Among Coconspirators in Antitrust Treble Damage Actions, 31 FORDHAM L. REV. 111, 111 (1962)).
188. see also Antitrust Damage Allocation Hearings, supra note 25, at 236 (testimony of William W. Schwarzer, J., Northern District of California) ("[I]n most antitrust cases, the plaintiffs tend to join all of those prospective or alleged wrongdoers who are solvent and are likely to be in a financial position to make a contribution, so it is not going to be a very common case in which a defendant will need to bring in additional parties, people that are obviously left out.").
189. Jacobson, supra note 51, at 235 ("In the typical complex price-fixing class action, plaintiffs almost invariably join all conceivable parties....").
190. Prof'l Beauty Supply, Inc. v. Nat'l Beauty Supply, Inc., 594 F.2d 1179, 1189 (8th Cir. 1979) (Hanson, J., dissenting in part), abrogated by Texas Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630 (1981).
191. Cavanagh, supra note 16, at 1290; see also id. at 1302 (discussing the "degree of culpability" among price-fixing conspirators).
192. If there is any firm that is "more culpable," it is the ringleader. But the ringleader is not necessarily the firm with the greatest market share. Also, it can be difficult to determine who the ringleader is. Leslie, supra note 149, at 480.
193. A.B.A. Antitrust Section, supra note 6, app. A at 69 (Minority Report on Contribution)
194. see also Antitrust Damage Allocation Hearings, supra note 25, at 7 (statement of A. Stephens Clay, Esq., Kilpatrick & Cody) (discussing the need for cooperation from each member of a price-fixing conspiracy); A.B.A. Antitrust Section, supra note 6, at 21 ("For a cartel to be stable and effective, it must control enough of the production capacity of an industry so that when its members raise prices and correspondingly reduce output, outsiders cannot take up the slack.")
195. Cavanagh, supra note 16, at 1296 ("[T]he success of a conspiracy depends on the participation of all members. In this 'one for all and all for one' atmosphere, it is difficult to assess individual liability based on degree of participation or benefits derived. In effect, responsibility is indivisible, and the concept of contribution is somewhat artificial.").
196. Hutchinson, supra note 8, at 982 ("A policy holding all participants responsible for the effects of a concerted scheme is particularly appropriate in the antitrust area since, by economic necessity, the success of an anticompetitive scheme often depends on the participation of each. In a real sense, each defendant has caused the entire amount of damages." (footnote omitted)). As Justice White noted in Perma Life Mufflers, Inc. v. International Parts Corp., 392 U.S. 134 (1968), "neither defendant, if he acted alone, could be charged with the violation; some degree of participation by both is essential to create a combination within the reach of § 1 of the Sherman Act," id. at 144 (White, J., concurring).
197. S. REP NO. 96-428, at 29 (1979) (supplemental views of Sen. Metzenbaum & Sen. Kennedy).
198. Corbett, supra note 164, at 116 (citing City of Atlanta v. Chattanooga Foundry & Pipeworks, 127 F. 23, 25-26 (6th Cir. 1903)).
199. Easterbrook et al., supra note 95, at 339 ("The first thing to be noted about the fairness issue is that the party claiming to have been unfairly treated is himself an intentional wrongdoer.")
200. see also Floyd, supra note 51, at 213 ("[C]ontribution is inappropriate in the case of intentional wrongdoers....").
201. This Article does not address unintentional violations, which are theoretically possible and have unique arguments in support of contribution. See Wilson P. Abraham Constr. Corp. v. Tex. Indus., Inc., 604 F.2d 897, 906-08 (5th Cir. 1979) (Morgan, J., concurring in part and dissenting in part) (arguing in favor of awarding contribution to unintentional antitrust violaters), aff'd sub nom. Tex. Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630 (1981).
202. See, e.g., Tex. Indus., 451 U.S. at 633 n.4; USX Corp. v. Penn Cent. Corp., 738 N.E.2d 13, 19 (Ohio Ct. App. 2000) ("The evidence presented to the trial court showed that B & LE pleaded no contest to a criminal indictment for violating the Sherman Act by engaging in the iron ore conspiracy. .. .").
203. For example, after being the only party sued in an antitrust conspiracy, Olson Farms turned around and sued its co-conspirators, "alleging that they were participants in the unlawful conspiracy and thus liable to Olson Farms for contribution in respect to the judgment arising out of the original action." Dickinson, supra note 20, at 151. If Olson Farms wanted to avoid the joint and several liability conundrum, it could have easily obeyed the law.
204. See Easterbrook et al., supra note 95, at 364 ("[T]he prospective antitrust violator can avoid the harshness of the no-contribution rule simply by complying with the antitrust laws.").
205. Note, supra note 15, at 903-04 n.73.
206. Antitrust Equal Enforcement Act Hearings, supra note 25, at 6 (testimony of John Shenefield, Assistant Att'y Gen., Antitrust Division, Department of Justice) ("When one considers this possibility from the standpoint of an innocent defendant, who could not afford to risk putting its innocence to the test, there is indeed an unfairness which contribution rules such as this one might ameliorate."); S. REP NO. 96-428, at 19 (1979) ("[I]t is necessary to balance the desire to terminate antitrust cases in as rapid a manner as possible with the rights of the defendants to utilize the courts to assert their innocence.").
207. See Antitrust Equal Enforcement Act Hearings, supra note 25, at 72 (statement of Robert P. Taylor, Attorney) ("Because Utah-Idaho believed itself to be totally innocent of wrongdoing, the company was extremely reluctant to enter into a judgment sharing agreement based upon sales.").
208. See id. at 51 (testimony of Lowell E. Sachnoff, Attorney); see also, e.g., id. at 68 (statement of Donald G. Kempf Jr.) (discussing the need for defendants to be able to litigate their individual antitrust cases on the merits).
209. See Antitrust Damage Allocation Hearings, supra note 25, at 91 (statement of Harold E. Kohn, Esq., Kohn, Savett, Marion & Graf, P.C.) ("[T]he ancient maxim is: 'Equity is not concerned about contributions among persons who are engaged in an illegal activity.'").
210. See, e.g., Jacobson, supra note 51, at 221 (discussing In Re Corrugated Container Antitrust Litigation, 84 F.R.D. 40, 41 (S.D. Tex.), aff'd, 606 F.2d 319 (5th Cir. 1979)).
211. Laura J. Lodawer, Note, Contribution in Antitrust Actions: Is Fairness Reason Enough?, 14 LOY. U. CHI. L.J. 575, 586 (1983) (same).
212. But see Note, Contribution in Private Antitrust Actions, 93 HARV. L. REV. 1540, 1543-44 (1980) ("[E]x ante equity cannot eliminate ex post inequity, for the ex post unfairness of a nocontribution rule remains regardless of the state of affairs ex ante.").
213. Antitrust Damage Allocation Hearings, supra note 25, at 509 (letter from Lawrence A. Sullivan, Earl Warren Professor of Public Law, University of Chicago, The Law School, to Peter W. Rodino, Jr., Chairman, H. Comm. on the Judiciary).
214. See Status Report, U.S. Dep't of Justice Antitrust Div., Status Report: An Overview of Recent Developments in the Antitrust Division's Criminal Enforcement Program 7-10 (2004), available at http://www.usdoj.gov/atr/public/guidelines/202531.pdf (discussing the basics of the Antitrust Division's amnesty program).
215. See A.B.A. Antitrust Section, supra note 6, app. A at 66 (Minority Report on Contribution)
216. Floyd, supra note 51, at 206 ("The more serious concern is that the settlement strategy employed by plaintiffs' counsel has operated in practice to permit larger and more culpable defendants to settle early, leaving smaller and innocent ones facing liability for an entire industry in a nationwide class action suit as a result."); supra notes 67-69 and accompanying text.
217. see also A. Mitchell Polinsky & Steven Shavell, Contribution and Claim Reduction Among Antitrust Defendants: An Economic Analysis, 33 STAN. L. REV. 447, 449 (1981) ("[T]he no contribution rule achieves deterrence by imposing greater risks on innocentparties.").
218. A.B.A. Antitrust Section, supra note 6, app. A at 66 (Minority Report on Contribution).
219. See Polinsky & Shavell, supra note 184, at 461 ("Defendants who are confident that they have committed no violations. .. will tend to be relatively optimistic. .. .").
220. Floyd, supra note 51, at 192.
221. See S. REP NO. 96-428, at 37 (1979) (supplemental views of Sen. Metzenbaum & Sen. Kennedy) ("We have been presented with absolutely no evidence that the larger, more 'culpable' defendants routinely settle price-fixing suits early in the litigation."); A.B.A. ANTITRUST SECTION, supra note 6, app. A at 66 (Minority Report on Contribution) ("Whether such a dilemma has been so frequent and serious a phenomenon as to require legislative solution has not been proved. Certainly such a settlement approach does not comport with traditional litigation strategy.").
222. see also Antitrust Damage Allocation Hearings, supra note 25, at 8 (statement of A. Stephens Clay, Esq., Kilpatrick & Cody) ("Speaking from experience, I can tell you that plaintiffs do not prefer to try their cases against the most innocent or the poorest defendants.").
223. Floyd, supra note 51, at 206 ("It seems unlikely that plaintiffs' counsel would deliberately pursue a strategy of settling with larger, more culpable, and more financially responsible defendants at bargain rates in order that they might preserve their claims against innocent defendants who would be unable to discharge a jury verdict against them in any event.").
224. See supra notes 70-72 and accompanying text.
225. S. REP. NO. 96-428, at 38 (supplemental views of Sen. Metzenbaum & Sen. Kennedy) ("Plaintiffs have no interest in forcing a small company to bear the burden of lengthy and extraordinarily expensive litigation and the risk of bankruptcy."); id. at 37 ("Professor Rose points out that 'it is not known whether plaintiffs settle early with the larger defendants with any frequency. Moreover, it seems unlikely that plaintiffs would select large, more culpable defendants for easy treatment and consciously shift the burden of the judgment to smaller firms.'" (quoting Jonathan Rose, Professor, Sandra Day O'Connor Coll. of Law, Ariz. State Univ., Address at the ABA Antitrust Section Meeting (Aug. 13, 1979))).
226. Easterbrook et al., supra note 95, at 343 ("At all events, there is no apparent reason why antitrust plaintiffs could generally seek to obtain disproportionately large recoveries from the smaller or less responsible defendants. If a plaintiff settles for a small amount with the larger defendants and proceeds to trial against the smaller defendants, he increases his risk that any judgment will be unsatisfied.").
227. Riemer, supra note 7, at 307 ("There is much evidence that plaintiffs do consider the financial condition of particular defendants in evaluating possible settlement terms."); see also, e.g., In re Linerboard Antitrust Litig., 321 F. Supp. 2d 619, 632 (E.D. Pa. 2004) (mentioning the plaintiff's assertion that the defendant's financial situation was a factor that affected the settlement amount).
228. Antitrust Damage Allocation Hearings, supra note 25, at 93 (statement of Harold E. Kohn, Esq., Kohn, Savett, Marion & Graf, P.C.) ("We have been settling cases with small businessmen who happen to be caught up in a conspiracy involving larger businessmen. We invariably settle for a much lesser figure with the small businessman.")
229. Riemer, supra note 7, at 294 n.33 ("Indeed, there is much evidence supporting the conclusion that plaintiffs consider a defendant's ability to pay in negotiating settlements and are likely to be satisfied with proportionately smaller recoveries from smaller defendants.").
230. See Hutchinson, supra note 8, at 984 ("Since a strong market power is often crucial to the plaintiff's case, it seems unlikely that a plaintiff would, without some qualms, allow a powerful defendant to buy its peace cheaply.").
231. Polinsky & Shavell, supra note184, at 455-56 ("[A] firm with large assets might expect to pay a disproportionately large share of joint damages since it might predict that the plaintiff will choose to collect a disproportionate share of joint damages from it.").
232. Easterbrook et al., supra note 95, at 343.
233. See S. REP NO. 96-428, at 37 (supplemental views of Sen. Metzenbaum & Sen. Kennedy) ("Neither have we seen any evidence demonstrating that small defendants are ultimately forced to settle against their will for unreasonable amounts because of earlier settlements by larger defendants."); A.B.A. Antitrust Section, supra note 6, at 14 ("The Subcommittee has also been given few, if any, examples in which small defendants were forced to shoulder grossly disproportionate liability for nationwide conspiracies." (quoting Staff of the H. Comm. on the Judiciary, 98th Cong., supra note 160))
234. Easterbrook et al., supra note 95, at 364 ("Nor is there persuasive evidence that some identifiable class of antitrust violators, such as small firms, are systematically at a disadvantage under the no-contribution rule compared to a contribution rule.")
235. see also Antitrust Equal Enforcement Act Hearings, supra note 25, at 60 (testimony of Lowell E. Sachnoff, Attorney) (discussing the willingness of plaintiffs' attorneys to settle for smaller amounts with smaller defendants).
236. See, e.g., Riemer, supra note 7, at 307 n.133 (discussing a memorandum filed by the plaintiffs in In re Chicken Antitrust Litigation, 560 F. Supp. 943 (N.D. Ga. 1979), in which "plaintiffs expressed willingness to settle with defendant H&H Poultry for less than the [amount] being demanded of other defendants because H&H was 'hovering on the brink of bankruptcy'" (quoting the memorandum))
237. see also Antitrust Damage Allocation Hearings, supra note 25, at 95 (statement of Harold E. Kohn, Esq., Kohn, Savett, Marion & Graf, P.C.) ("There is not one recorded or unrecorded instance where any small businessman was put out of business by any price-fixing case or any settlement in a price-fixing case."); S. REP NO. 96- 428, at 37 (supplemental views of Sen. Metzenbaum & Sen. Kennedy) ("We have been presented with absolutely no evidence that the larger, more 'culpable' defendants routinely settle price-fixing suits early in the litigation. Neither have we seen any evidence demonstrating that small defendants are ultimately forced to settle against their will for unreasonable amounts because of earlier settlements by larger defendants.").
238. FED. R. CIV. P. 23(e).
239. See, e.g., In re Warner Commc'ns Sec. Litig., 618 F. Supp. 735, 746 (S.D.N.Y. 1985)
240. See A.B.A. Antitrust Section, supra note 6, at 14 ("After hearing extensive testimony on the issue, a House Subcommittee Staff Report concluded: 'The Subcommittee is aware of no case in which a small, relatively less culpable defendant has actually paid an outlandish judgment resulting in bankruptcy.'" (quoting Staff of the H. Comm. on the judiciary, 98th Cong., supra note 160)).
241. Am. Soc'y of Mech. Eng'rs v. Hydrolevel Corp., 456 U.S. 556, 572 (1982) (citation omitted); accord Pfizer v. India, 434 U.S. 308, 314 (1978); Ill. Brick Co. v. Illinois, 431 U.S. 720, 746 (1977).
242. A.B.A. ANTITRUST SECTION, supra note 6, at 27-28.
243. See Cavanagh, supra note 91, at 813 ("The Georgetown data indicate that 88.2% of the antitrust cases surveyed settled.").
244. See supra notes 96-106 and accompanying text.
245. See, e.g., Hutchinson, supra note 8, at 971-72 (discussing the availability of contribution as a factor in a business's cost-benefit analysis before entering a price-fixing conspiracy).
246. See, e.g., Easterbrook et al., supra note 95, at 353 ("Yet even if these conditions do not obtain, the choice between contribution and no contribution is not affected, at least as a first approximation, because that choice does not affect the total damages assessed for unlawful joint action but only the distribution of the damages (ex post, and sometimes ex ante) among those who participate in the joint action.").
247. Polinsky & Shavell, supra note 184, at 450-52 (calculating the business incentives both with and without contribution rules but keeping the probability of detection constant). Congress, too, assumed no effect on the amount of money the plaintiff could recover. See S. REP NO. 96-428, at 2 (1979) ("S. 1468 would not, however, change the principle of joint and several liability and thus would not impair the plaintiff's rights vis-à-vis any defendant."). That is incorrect. See supra notes 96-106 and accompanying text.
248. See supra notes 39-54 and accompanying text.
249. See supra notes 125-46 and accompanying text.
250. Polinsky & Shavell, supra note 184, at 450-51
251. I have made the probability under the contribution regime 80 percent instead of 100 percent to reflect the uncertainty that any member of the cartel will be held liable.
252. Polinsky & Shavell, supra note 184, at 450 ("Risk neutral firms consider only the 'expected value' of a risky situation-that is, the magnitude of the risk discounted by its probability.").
253. See BREIT & ELZINGA, supra note 45, at 34.
254. A.B.A. ANTITRUST SECTION, supra note 6, at 28.
255. see also Cavanagh, supra note 16, at 1307 ("[I]f a firm is risk averse a contribution rule may provide less deterrence."). Yet even before the development of modern economics and congressional enactment of the Sherman Act in 1890, courts had long recognized that a low likelihood of being held liable for all of the damages may be a better deterrent than allocating financial responsibility among all the wrongdoers. See Rhea v. White, 40 Tenn. (3 Head) 90, 91 (1859) ("[T]here can be no contribution between wrongdoers. The reason of this is, that they may be intimidated from committing the wrong, by the danger of each being made responsible for all the consequences.").
256. See Hutchinson, supra note 8, at 976 ("The desire that the business survive probably provides a restraint powerful enough to outweigh even an owner's strong profit motive. Smaller businesses, even more than their larger counterparts, can ill afford the cost of antitrust violations, particularly under a no-contribution rule.").
257. Wilson P. Abraham Constr. Corp. v. Tex. Indus., Inc., 604 F.2d 897, 901 (5th Cir. 1979), aff'd sub nom. Texas Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630 (1981).
258. Cavanagh, supra note 16, at 1309 ("Whether firms are, in fact, risk averse has generated much scholarly debate but has produced no consensus.").
259. Easterbrook et al., supra note 95, at 352 n.50 ("We conclude that the extent and intensity of risk aversion among firms is an unsettled empirical question.").
260. See, e.g., Steven Shavell, Risk Sharing and Incentives in the Principal and Agent Relationship, 10 Bell J. Econ. 55, 56-57 (1979) (presenting theoretical model of firms' risk aversion).
261. E.g., Kenneth G. Elzinga & William Breit, The antitrust penalties: a study in law and economics 128-29 (1976).
262. Hutchinson, supra note 8, at 974 n.81 ("Empirical data supports the existence of risk aversion among a significant population of the business community.").
263. see also Antitrust Damage Allocation Hearings, supra note 25, at 450 (letter from Lowell Sachnoff, Esq., Sachnoff Weaver & Rubenstein, Ltd, to Peter W. Rodino, Jr., Chairman, H. Comm. on the Judiciary) ("Top level corporate managers are intensely risk averse. .. .").
264. Geoffrey C. Hazard, Jr., The Settlement Black Box, 75 B.U. L. REV. 1257, 1267 (1995) (arguing that, in the context of class action settlements, "[m]ost people are risk averse, preferring a certain resolution to an uncertain opportunity").
265. Polinsky & Shavell, supra note 184, at 452 n.18.
266. See Cirace, supra note 55, at 49 n.20.
267. See Cavanagh, supra note 16, at 1309 ("A respectable body of literature urges that corporate managers are risk averse.").
268. Dickinson, supra note 20, at 188 ("[P]revailing economic theory. .. labels modern managers as generally risk averse.").
269. See Charles A. Bane, The electrical equipment conspiracies 314-15 (1973). While some commentators have suggested that firms breaking the law may actually have a preference for risk, A.B.A. Antitrust Section, supra note 6, at 29 ("[W]hen considering the behavior of firms which are prone to violate the law, an assumption of risk preference might even be appropriate. .. ."), firms in illegal cartels are not necessarily risk seekers because pricefixing may have a positive expected value even under bad conditions, such as when the cartel is exposed and its members are held liable, see, e.g., Robert H. Lande, Why Antitrust Damage Levels Should Be Raised, 16 LOY. CONSUMER L. REV. 329, 341 n.48 (2004) ("[R]esearch demonstrates that the international vitamin cartel generated the largest total of antitrust fines and penalties in history, which are calculated to be between $4.4 and $5.6 billion. But the cartel's monopoly profits in all areas of the world were $9 to $13 billion." (quoting Brief for Professors Darren Bush et al. as Amici Curiae Supporting Respondents at 4, Empagran, S.A. v. F. Hoffman-LaRoche, Ltd., 542 U.S. 155 (2004) (No. 03-724), 2004 WL 533933)).
270. This statement assumes a constant probability of detection. To the extent that JSAs reduce the probability of detection, signatories to JSAs could arguably be risk neutral.
271. See Antitrust Equal Enforcement Act Hearings, supra note 25, at 62 (statement of Lowell E. Sachnoff).
272. Antitrust Damage Allocation Hearings, supra note 25, at 13 (testimony of Stephen D Susman, Esq., Susman & McGowan).
273. Neal Kumar Katyal, Conspiracy Theory, 112 YALE L.J. 1307, 1342-43 (2003).
274. Geis, supra note 126, at 150.
275. Antitrust Equal Enforcement Act Hearings, supra note 25, at 50 (statement of Lowell E. Sachnoff) ("With contribution, the same businessman who can sit down with his competitors and fix prices for a product can simply add another item on the agenda; that is, since we can get contribution, if we are caught, we can then lay off another cost of business, among our competitors, because we aren't faced with the serious penalty of joint and several liability.").
276. Cavanagh, supra note 16, at 1314 ("Deterrence may be weakened if price-fixers are permitted to allocate damages among themselves rather than face liability for all damages inflicted by a conspiracy.").
277. Antitrust Equal Enforcement Act Hearings, supra note 25, at 27-28 (statement by John Shenefield, United States Assistant Att'y Gen., Antitrust Division, Department of Justice) ("By amending this system so that each conspirator is liable only for that portion of total damages attributable to his own conduct, potential price-fixers may be more able to predict in advance their maximum liability and may have reduced incentives to interfere with the successful functioning of the conspiracy, since a suit by a single plaintiff against any conspirator may well involve all conspirators in suits for contribution.").
278. Cavanagh, supra note 16, at 1297 ("In addition, because a contribution rule makes individual liability more certain, it is easier, at least in theory, to develop a cost-benefit analysis regarding a company's illegal acts.").
279. Antitrust Damage Allocation Hearings, supra note 25, at 12 (statement of Stephen D Susman, Esq., Susman & McGowan) ("In addition, the no-contribution rule helps prevent the type of cost-benefit analysis of potential price fixing that would so easily occur if each defendant knew in advance that it will have to pay a predictable share of the conspiracy damages.").
280. See A.B.A. Antitrust Section, supra note 6, at 24 ("Opponents claim that if potential wrongdoers knew in advance the amount of their potential liability, which would ordinarily be much less than the potential liability of the conspiracy as a whole, the balance against the expected return of the crime would more often tip in favor of violating the law."). Because contribution provides firms a way to reduce uncertainty, one early court rejected contribution in antitrust cases, "believ[ing] that the deterrent effect of the antitrust laws may be increased by not permitting defendants to redistribute the cost of an antitrust violation." El Camino Glass v. Sunglo Glass Co., No. C-75-2492 AJZ, 1976 WL 1382, at *3 (N.D. Cal. Apr. 28, 1976). Although some contribution proponents have asserted that price-fixers do not engage in cost-benefit analysis, see, e.g., Antitrust Damage Allocation Hearings, supra note 25, at 233 (letter from Hon. Charles B. Renfrew, Pillsbury, Madison & Sutro, to members of the H. Subcomm. on Monopolies and Commercial Law), the weight of theoretical and empirical evidence suggests that price fixers do, see id. at 449 (letter from Lowell Sachnoff, Esq., Sachnoff Weaver & Rubenstein, Ltd, to Peter W. Rodino, Jr., Chairman, H. Comm. on the Judiciary).
281. See, e.g., id. at 233 (letter from Hon. Charles B. Renfrew, Pillsbury, Madison & Sutro, to members of the H. Subcomm. on Monopolies and Commercial Law).
282. See, e.g., id. at 145 (statement of Robert P. Taylor, Esq., Pillsbury, Madison & Sutro); id. at 233 (letter from Hon. Charles B. Renfrew, Pillsbury, Madison & Sutro, to members of the H. Subcomm. on Monopolies and Commercial Law).
283. Lande, supra note 222, at 341 n.48.
284. See Christopher R. Leslie, De Facto Detrebling: The Rush to Settlement in Antitrust Class Action Litigation, 51 ARIZ. L. REV. 1009, 1035-36 (2008).
285. See, e.g., BANE, supra note 222, at 234, 314-15.
286. Antitrust Damage Allocation Hearings, supra note 25, at 81 (testimony of Harold E. Kohn, Esq., Kohn, Savett, Marion & Graf, P.C.) (stating that the movement to create a statutory right to contribution in price-fixing cases "originated a few years ago with a very small group of companies in the forest products industry who were engaged in probably the most extensive series of price-fixing conspiracies this country has seen since the electrical conspiracies of 20 years ago in the early 1960's").
287. See id.; id. at 145 (statement of Robert P. Taylor, Esq., Pillsbury, Madison & Sutro).
288. See, e.g., Fireman's Fund Ins. Co. v. W. Nat'l Mut. Group, 851 F. Supp. 1361, 1365-66 (D. Minn. 1994); Cimarron Pipeline Constr. v. Nat'l Council on Comp. Ins., Nos. CIV-89-822-T, CIV-89-1886-T, 1992 WL 350612, at *2 (W.D. Okla. Apr. 10, 1992) ("The deterrent effect of the severe penalties imposed upon a party convicted of committing antitrust violations cannot be deemed to be outweighed by the benefits of a sharing agreement as the Plaintiffs contend.").
289. Cimarron Pipeline Constr., 1992 WL 350612, at *2.
290. See, e.g., Antitrust Damage Allocation Hearings, supra note 25, at 145 (statement of Robert P. Taylor, Esq., Pillsbury, Madison & Sutro) ("[O]ne must consider the danger that exposure to massive liability may deter desirable, pro-competitive business behavior."); Note, supra note 181, at 1545 ("Indeed, prohibition of contribution could overdeter corporations from performing acts bordering upon antitrust violations but beneficial to society."); supra notes 87-90 and accompanying text.
291. See Polinsky & Shavell, supra note 184, at 462-63.
292. Antitrust Equal Enforcement Act Hearings, supra note 25, at 17 (testimony of John Shenefield, Assistant Att'y Gen., Antitrust Division, Department of Justice) ("In the pricefixing area, however, I don't have the same kind of concern. I think where you are dealing with a per se violation of the law and one that is easy to define, one that everybody agrees is harmful, that the question of overdeterrence is probably not so serious."); A.B.A. ANTITRUST SECTION, supra note 6, at 25 ("[I]t is highly questionable whether unambiguously criminal conduct such as hard core price fixing can ever be overdeterred.").
293. Breit & Elzinga, supra note 45, at 35 ("If horizontal price fixing could be correctly defined, the problem of overdeterrence could not occur since horizontal price fixing has little if any social benefit.").
294. Cavanagh, supra note 16, at 1297 ("The argument that the present system overdeters is more theoretical than real....[T]he primary target of the no-contribution rule is horizontal price-fixing, which has no socially useful benefits and hence cannot be overdeterred.").
295. The risks of overdeterring beneficial behavior seem greatest in Section Two cases and in Section One cases involving vertical restraints. In the context of Section Two of the Sherman Act-which condemns unilateral conduct characterized as monopolization or attempted monopolization-an efficient competitor could theoretically be deterred from competing aggressively but legitimately. While this risk is real, it is unaffected by the presence or absence of JSAs because there are rarely multiple defendants in Section Two cases. Because JSAs are not seen in Section Two litigation, condemning them is unlikely to chill the zeal of an aggressive competitor. In contrast, Section One cases involving restraints generally involve multiple defendants. Vertical restraints are more likely to increase efficiency than horizontal restraints and thus antitrust should be more concerned about deterring efficient vertical agreements. But JSAs appear not in vertical restraint cases, but rather in horizontal price-fixing cases. See, e.g., In re Cement & Concrete Antitrust Litig., 817 F.2d 1435, 1439 (9th Cir. 1987).
296. Antitrust Damage Allocation Hearings, supra note 25, at 466 (letter from William F. Baxter, Assistant Att'y Gen., Antitrust Division, Department of Justice, to Peter W. Rodino, Jr., Chairman, H. Comm. on the Judiciary); see also id. at 9 (testimony of Stephen D. Susman, Esq., Susman & McGowan) ("Everyone admits, however, that there is nothing socially useful about price fixing, and therefore you could not only triple damages, quadruple, tenfold, twentyfold damages, and there would be no danger whatsoever of deterring socially useful conduct.").
297. Texaco Inc. v. Dagher, 547 U.S. 1, 8 (2006).
298. [15] U.S.C. §§ 4301-05 (2006).
299. See infra notes 256-58 and accompanying text.
300. Hutchinson, supra note 8, at 978 ("Had Congress been concerned with ensuring that defendants not pay more than the damages they actually caused, it would have limited the liability to that amount. Instead, it enacted a provision whose most salient features are deterrent: the provision magnifies the defendant's penalty and, by overcompensating plaintiffs, induces them to bring suit.").
301. Tex. Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630, 639 (1981) ("Moreover, it is equally clear that the Sherman Act and the provision for treble-damages actions under the Clayton Act were not adopted for the benefit of the participants in a conspiracy to restrain trade.").
302. Phillip A. Proger & Deborah Platt Herman, The Price of Price Fixing Through International Cartels, 1999 BUS. L. INT'L 24, 48 (quoting In re Brand Name Prescription Drugs Antitrust Litig., Nos. 94 C 897, MDL 997, 1995 WL 221853, at *4 (N.D. Ill. Apr. 11, 1995) (mem.)).
303. Riemer, supra note 7, at 316 ("Current antitrust doctrine establishes that sharing agreements do not violate the Sherman Act.").
304. See infra notes 300-02 and accompanying text.
305. See, e.g., Mary B. Cranston & John S. Kingdon, Judgment Sharing Agreements, 1985 Research Project of the Civil Practice and Procedure Committee, ABA SEC. ANTITRUST L. 8 (1985) (on file with the Duke Law Journal) ("A sharing agreement does not necessarily lessen any deterrent value to the treble damages remedy since it is negotiated and executed after any alleged wrongdoing and the filing of a lawsuit.")
306. Riemer, supra note 7, at 314 ("Common-law principles of contracts also suggest that, because sharing agreements are entered into only after the occurrence of a violation, such agreements cannot contravene the policy of deterrence." (footnote omitted)). The assumption is reasonable given that most publicly known JSAs were apparently negotiated after litigation was filed. See, e.g., Antitrust Equal Enforcement Act Hearings, supra note 25, at 71 (statement of Robert P. Taylor) (discussing the Western Asphalt litigation).
307. Discovery in some products liability litigation has revealed judgment-sharing agreements that have been in place for over two decades before being disclosed during litigation. See, e.g., Plaintiffs' Response to Defendants' Memorandum of Law in Opposition to Production of Joint Defense Agreement at 1, In re Welding Fume Rod Prod. Liab. Litig., No. 1:03-CV-17000, 2005 WL 5408315 (N.D. Ohio Dec. 5, 2005), 2005 WL 3671330.
308. See Reimer, supra note 7, at 313 ("A risk-averse firm, weighing the value and risks of violating the antitrust laws, likely has no assurance that the other potential co-conspirators will agree to enter into a sharing agreement if, after the violation, they are sued by the injured parties.").
309. See, e.g., id. at 313 n.175.
310. Civil Remedies Issues: Hearings Before the Antitrust Modernization Commission 14-15 (2005) (statement of Harry M. Reasoner, Esq., Vinson & Elkins L.L.P.), http://govinfo.library.unt.edu/amc/commission_hearings/pdf/Reasoner.pdf.
311. See supra note 29 and accompanying text.
312. See, e.g., BANE, supra note 222, at 234.
313. [15] U.S.C. § 46(b) (2006).
314. See, e.g., Geneva Pharm. Tech. Corp. v. Barr Labs., Inc., Nos. 98 Civ. 861 RWS, 99 Civ. 3607 RWS, 2003 WL 1345136, at *5 (S.D.N.Y. Mar. 19, 2003).
315. Geneva Pharm. Tech. Corp. v. Barr Labs., Inc., No. 98 Civ. 861 RWS, 2003 WL 135653, at *2 (S.D.N.Y. Jan. 16, 2003) (mem.); In re Terazosin Hydrochloride Antitrust Litig., No. 991317 MDL, 2002 WL 31761289, at *1 (S.D. Fla. Mar. 1, 2002).
316. See Antitrust Damage Allocation Hearings, supra note 25, at 150 (testimony of Harold E. Kohn, Esq., Kohn, Savett, Marion & Graf, P.C.) ("In many cases, the plaintiffs don't even know the terms of [the JSA].")
317. Cranston & Kingdon, supra note 257, at 2 ("The challenges that have thus far been made by plaintiffs' counsel have been either attempts to discover the contents of the agreement, or to void the agreement altogether as contrary to public policy. So far, neither challenge has proved successful in court.").
318. A.B.A. Antitrust section, supra note 35, at 61 (noting that "courts have refused to order production of [judgment-sharing] agreements in discovery" (citations omitted)).
319. In re Brand Name Prescription Drugs Antitrust Litigation, 1995 WL 221853, at *4. 270. See, e.g., Geneva Pharm. Tech. Corp., 2003 WL 135653, at *2.
320. 270. See, e.g., Geneva Pharm. Tech. Corp., 2003 WL 135653, at *2
321. See Manual for Complex litigation, supra note 22, § 13.23 ("Sharing agreements should be discoverable. Once the agreement is made known, it may be possible to structure partial settlements to take its terms into account.").
322. See, e.g., Geneva Pharm. Tech. Corp., 2003 WL 135653, at *2.
323. See United States v. Skeddle, 989 F. Supp. 890, 900 (N.D. Ohio 1997) (noting that the attorney-client privilege only protects communications necessary for providing legal advice).
324. United States v. Zolin, 491 U.S. 554, 562-63 (1989).
325. Fed. R. Civ. P. 26(b)(3)(B) ("If the court orders discovery. .. it must protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of a party's attorney or other representative concerning the litigation.").
326. See Zolin, 491 U.S. at 562-63.
327. Cf. Manual for Complex Litigation, supra note 22, § 13.23 ("In presenting settlement agreements for judicial approval, however, the parties are obliged to make full disclosure of all terms and understandings, including any side agreements. The settling parties may request that certain terms not be disclosed to other parties, but must justify this to the court.").
328. Restatement (second) of contracts § 178(1) (1981).
329. Antitrust Damage Allocation Hearings, supra note 25, at 10 (testimony of Stephen D. Susman, Esq., Susman & McGowan) (arguing that judicial enforcement of a JSA "would be against public policy, because it would encourage and facilitate a crime").
330. Cf. Riemer, supra note 7, at 314 ("Although courts uniformly hold that contracts indemnifying a party for a subsequent illegal act are void, courts have long upheld contracts to indemnify a party for an illegal act that has already been committed." (footnotes omitted)).
331. See St. Paul Ins. Cos. v. Talladega Nursing Home, Inc., 606 F.2d 631, 633-34 (5th Cir. 1979). But see Cranston & Kingdon, supra note 257, at 9-10 ("First, a sharing agreement does not provide for complete indemnification or exemption from responsibility. All parties do bear a relative share of responsibility for the alleged wrongdoing and are not insured against all liability." (footnotes omitted)).
332. The agreements are not perfect, as some individuals may violate the agreement, but they have a stabilizing influence.
333. Leslie, supra note 148, at 568.
334. 15 U.S.C. § 1 (2006).
335. R.D. Imports Ryno Indus. v. Mazda Distribs., 807 F.2d 1222, 1224 (5th Cir. 1987).
336. FTC v. Cement Inst., 333 U.S. 683, 714 (1948)
337. see also Leslie, supra note 148, at 577-78 (explaining the cartel-stabilizing effects of base-point pricing). Base-point pricing is a practice in which transportation costs (which are ultimately factored into the price the consumer pays) are calculated as though all items are shipped from a single location). Aaron S. Edlin, Do Guaranteed-Low-Price Policies Guarantee High Prices, and Can Antitrust Rise to the Challenge?, 111 HARV. L. REV. 528, 554 n.7 (1997). This prevents firms from cheating on a price-fixing agreement by cutting transportation costs.
338. See, e.g., Catalano, Inc. v. Target Sales, Inc., 446 U.S. 643, 650 (1980) (holding that agreements to eliminate short-term trade credit are anti-competitive); Cement Inst., 333 U.S. at 721 (upholding the Federal Trade Commission's conclusion that the base-point pricing system is an unfair trade practice).
339. Texaco Inc. v. Dagher, 126 S. Ct. 1276, 1279 (2006) (alteration in original) (quoting State Oil Co. v. Khan, 522 U.S. 3, 10 (1997)).
340. Nw. Wholesale Stationers, Inc. v. Pac. Stationery & Printing Co., 472 U.S. 284, 289-90 (1985) (quoting Broad. Music, Inc. v. Colum. Broad. Sys., Inc., 441 U.S. 1, 19-20 (1979)).
341. United States v. Topco Assocs., Inc., 405 U.S. 596, 607-08 (1972) (citation omitted); see also Broad. Music, Inc., 441 U.S. at 9 (quoting Topco Assocs., Inc., 405 U.S. at 607-08); Maricopa County Med. Soc'y, 457 U.S. 332, 344 (1982) ("Once experience with a particular kind of restraint enables the Court to predict with confidence that the rule of reason will condemn it, it has applied a conclusive presumption that the restraint is unreasonable.")
342. State Oil Co. v. Khan, 522 U.S. 3, 10 (1997) (quoting Maricopa County, 457 U.S. at 344); Atl. Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 342 (1990) (same); FTC v. Superior Court Trial Lawyers Ass'n, 493 U.S. 411, 433 (1990) (same).
343. See, e.g., Broad. Music, Inc., 441 U.S. at 10 ("[E]xperience hardly counsels that we should outlaw the blanket license as a per se restraint of trade."); Appalachian Coals v. United States, 288 U.S. 344, 377 (1933) ("Nothing in theory or experience indicates that the selection of a common selling agency to represent a number of producers should be deemed to be more abnormal than the formation of a huge corporation bringing various independent units into one ownership."); cf. NCAA v. Bd. of Regents, 468 U.S. 85, 100 (1984) ("[W]e have decided that it would be inappropriate to apply a per se rule to this case. This decision is not based on a lack of judicial experience with this type of arrangement. .. .").
344. N. Pac. Ry. Co. v. United States, 356 U.S. 1, 5 (1958).
345. United States v. Arnold, Schwinn & Co., 388 U.S. 365 (1967).
346. See Donald E. Knebel, Antitrust Counseling: The Five Factors of Antitrust Liability, 9 J. CORP. L. 359, 362 (1984) (noting the lack of evidence in Arnold, Schwinn & Co.).
347. Chi. Bd. of Trade v. United States, 246 U.S. 231, 238 (1918).
348. See supra notes 149-56 and accompanying text. In theory, a firm cannot get amnesty if the government has already initiated an investigation into suspected price-fixing. However, if the government has not developed sufficient evidence to prosecute and the first confessing firm provides such evidence, then that firm can get amnesty or a particularly attractive deal. See Leslie, supra note 130, at 1659-60 (discussing Christie's deal in the auction house price-fixing case).
349. The firm would not have to pay the plaintiff anything if the suit is dismissed or the defendants prevail at summary judgment, the probability of which increases if the members of the cartel successfully conceal the incriminating evidence of price fixing.
350. A per se legal rule is also inappropriate because the parties may have already negotiated the JSA but have waited to sign and date it until litigation is imminent, at which point all parties execute the previously concealed JSA.
351. Cimarron Pipeline Constr. v. Nat'l Council on Comp. Ins., Nos. CIV-89-822-T, CIV-89- 1886-T, 1992 WL 350612, at *3 (W.D. Okla. Apr. 10, 1992) (discussing In re San Juan Dupont Plaza Hotel Fire Litig., 129 F.R.D. 424 (D.P.R. 1989)).
352. See Jones Knitting Corp. v. Morgan, 361 F.2d 451, 459 (3d Cir. 1966).
353. See Antitrust Damage Allocation Hearings, supra note 25, at 28 (testimony of Stephen D. Susman, Esq., Susman & McGowan).
354. See Westinghouse Elec. Corp. v. Gulf Oil Corp., 588 F.2d 221, 226 (7th Cir. 1978) ("Most price fixing conspiracies are established through circumstantial evidence.").
355. See, e.g., Todd v. Exxon Corp., 275 F.3d 191, 198 (2d Cir. 2001) ("[A] horizontal pricefixing agreement may be inferred on the basis of conscious parallelism, when such interdependent conduct is accompanied by circumstantial evidence and plus factors."); Southway Theatres, Inc. v. Ga. Theatre, Co., 672 F.2d 485, 501 (5th Cir. 1982) ("The rule of 'conscious parallelism and plus factors' has governed proof of much conspiratorial conduct up through the present." (citation omitted)).
356. Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 227 (1993).
357. Todorov v. DCH Healthcare Auth., 921 F.2d 1438, 1456 (11th Cir. 1991).
358. See Blomkest Fertilizer, Inc. v. Potash Corp. of Sask., Inc., 203 F.3d 1028, 1033 (8th Cir. 2000) ("An agreement is properly inferred from conscious parallelism only when certain 'plus factors' exist." (citations omitted)); In re Baby Food Antitrust Litig., 166 F.3d 112, 121 (3d Cir. 1999) ("In the absence of direct evidence, the plaintiffs may nevertheless support their claim with circumstantial evidence of conscious parallelism.")
359. Wallace v. Bank of Bartlett, 55 F.3d 1166, 1168 (6th Cir. 1995) ("[P]arallel pricing, without more, does not itself establish a violation. ... Courts require additional evidence which they have described as 'plus factors.'").
360. See Interstate Circuit, Inc. v. United States, 306 U.S. 208, 222 (1939) ("Compliance with the [film distributors'] proposals involved a radical departure from the previous business practices of the industry and a drastic increase in admission prices of most of the subsequent-run theatres.").
361. Wallace, 55 F.3d at 1168 (citations omitted).
362. The congressional debate about contribution yielded this exchange: Mr. SEIBERLING. Doesn't the very existence of a sharing agreement tend to reinforce charges of conspiracy or cartel? Mr. KOHN. No, the evidence is not permitted. No lawyer would waste time trying to put it in. No judge would permit it. Antitrust Damage Allocation Hearings, supra note 25, at 150 (testimony of Harold E. Kohn, Esq., Kohn, Savett, Marion & Graf, P.C.).
363. Manual for complex litigation, supra note 22, § 13.23 (footnote omitted).
364. See FED. R. EVID. 411 ("Evidence that a person was or was not insured against liability is not admissible upon the issue whether the person acted negligently or otherwise wrongfully.").
365. See Ikerd v. Lapworth, 435 F.2d 197, 208 (7th Cir. 1970).
366. Williams v. Bennett, 689 F.2d 1370, 1391 (11th Cir. 1982).
367. FED. R. EVID. 411 advisory committee's note.
368. Williams, 689 F.2d at 1391.
369. Courts also fear that evidence of insurance coverage "would result in extravagant verdicts" because juries believe that the defendant will not have to pay out of its own pocket. Kiernan v. Van Schaik, 347 F.2d 775, 781 (3d Cir. 1965). This is a particular concern in tort litigation in which the jury can award punitive damages. The risk of a runaway jury awarding excessive damages is less in antitrust cases because an antitrust jury only calculates compensatory damages, which the judge trebles. An antitrust jury is generally not asked to "send a message" to defendants. Further, JSAs are distinguishable from insurance coverage on this front, as well. Courts may worry that juries will award a sympathetic plaintiff more money if the jurors believe the defendant will not be personally responsible because an insurance company will pay. But a JSA does not allow a liable price-fixing defendant to completely shift financial responsibility to an absent, deep-pocketed third party. The defendant remains responsible for the JSA-stipulated percentage of total antitrust damages paid by all of the signatories to the JSA, including settlement payments and jury awards. In short, informing the jury about the JSA should not lead to an inappropriate increase in damages awarded by juries in price-fixing cases.
370. See In re Citric Acid Litig., 191 F.3d 1090, 1102 (9th Cir. 1999) ("Parallel pricing is a relevant factor to be considered along with the evidence as a whole; if there are sufficient other 'plus' factors, an inference of conspiracy can be reasonable.").
371. See Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1965-66 (2007) (holding that a valid claim under Section One of the Sherman Act based on allegations of parallel conduct requires "enough factual matter" that "raises a suggestion of a preceding agreement, not merely parallel conduct"); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-88 (1986) (holding that, to survive a motion for summary judgment, a plaintiff must show evidence that likely excludes "competing inferences of independent action or collusive action").
372. See Christopher R. Leslie, Rational Irrationality 41-42 (unpublished manuscript, on file with the Duke Law Journal) (arguing that, "if the plaintiff's theory of the case conflicts with the judge's own view of how businesses operate, the latter will prevail even if the plaintiff provides strong evidence to support its allegations").
373. Cal. Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508, 511 (1972).
374. See, e.g., Primetime 24 Joint Venture v. Nat'l Broad. Co., 219 F.3d 92, 100 (2d Cir. 2000); McGuire Oil Co. v. Mapco, Inc., 958 F.2d 1552, 1560 (11th Cir. 1992); Colum. Pictures Indus., Inc. v. Prof'l Real Estate Investors, Inc., 944 F.2d 1525, 1528-29 (9th Cir. 1991); Coastal States Mktg., Inc. v. Hunt, 694 F.2d 1358, 1367 (5th Cir. 1983) ("[I]t would be absurd to hold that [petitioning immunity] does not protect those acts reasonably and normally attendant upon effective litigation.").
375. See, e.g., Standard Oil Co. v. United States, 283 U.S. 163, 169 (1930) (stating, in holding that a settlement agreement did not violate antitrust laws, that "[a]ny agreement between competitors may be illegal if part of a large plan to control interstate markets"); In re Tamoxifen Citrate Antitrust Litig., 277 F. Supp. 2d 121, 130 (E.D.N.Y. 2003) ("Plaintiffs can establish a Sherman Act violation by alleging facts from which it can be inferred that [defendants] entered into the Settlement Agreement in bad faith and used the agreement to restrain or monopolize trade.").