Antitrust Counseling

How Much Does it Cost to Litigate an Antitrust Case?

June 5, 2014 | Bona Law PC

If you ask this question to an antitrust lawyer, you will receive some form of “it depends” in response. That’s true. It does depend. And you will inevitably follow up with, “What does it depend upon?” Let’s see if we can begin to answer that question.

What we are discussing here is not a class-action antitrust lawsuit, but an antitrust claim by one business or individual against another. Class-action antitrust cases usually incorporate some contingency-fee approach and are lawyer-centered rather than client-centered cases. That is, the plaintiff law firms act as “private-attorney generals” to enforce the antitrust laws through the class-action vehicle. Those cases are very different than the typical case brought by a company against its competitor, supplier, or customer. You can read our article on defending against class certification in antitrust cases here.

Antitrust cases are expensive. Usually. But if managed effectively, they don’t need to cost nearly as much as they did when big law firms held a virtually monopoly on the cases by convincing clients that only they had the requisite resources to file such a massive claim.

With the combination of technological advancements and third-party providers, I believe that, in many instances, hiring a big law firm to run your antitrust case is a costly mistake. We’ll get into that more below.

I am not going to get into actual numbers here because fees and other costs vary and will change over time. But if you are considering antitrust litigation, studying the components of an antitrust lawsuit will help you (1) understand what you are paying for and (2) figure out how to reduce your costs.

Below are the primary-cost drivers of an antitrust case. Of course, every case is different and a lot can come up in litigation that is unexpected and unusual. That keeps it interesting, but also increases cost variances. The list below doesn’t hit everything, but I hope it helps you.

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The Antitrust Laws Encourage Stealing

April 22, 2014 | Bona Law PC

That’s right, the antitrust laws care so much about competition that they even prohibit agreements among competitors to not steal. In a society that morally condemns stealing, this is counter-intuitive (and a good reason to learn a little bit about antitrust).

You might wonder now whether I will engage in some philosophy gymnastics to convince you that stealing is okay. No, but I will provide a concrete example, then offer some advice. Not as fun, but perhaps more useful.

So California is abuzz with recently released documents in an antitrust class action by employees against giant Silicon Valley employers like Google, Inc., Apple Inc., Intel Corp and Adobe Systems Inc. The case is scheduled for trial soon and news reports suggest a settlement is likely.

Update: As expected, the parties have reportedly agreed to settle the antitrust case.

What happened? The class-action employees accused major Silicon Valley employers of agreeing not to steal each other’s employees. If true, that’s kind of a big deal under the antitrust laws.

It doesn’t sound so bad, right? How can anyone get any work done if everyone is trying to steal everyone’s employees? And it just seems impolite. Competitors are so tough on each other—can’t we have just a little bit of dignity and not try to hire away your competitor’s employees? The sort of war that can ensue among competing employers for a scarce resource—quality technology employees—can make a truce very tempting.

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How Should the Antitrust Laws Analyze Loyalty Discounts and Bundled Rebates?

March 17, 2014 | Bona Law PC

In the most recent issue of The Antitrust Law Journal, attorney Sean P. Gates describes several possible approaches to these discounts, analyzing the good and the bad for each. His article, Antitrust by Analogy: Developing Rules for Loyalty Rebates and Bundled Discounts, is really quite good.

I identified this article as a must-read in a previous blog post, and finally had the opportunity to review it over the weekend (Note: I had been busy starting a new law firm, so fell behind on my reading). I am glad that I did. Since most of the country is having winter this year, I won’t point out that I read it on my San Diego outdoor patio while enjoying the whiff of freshly-cut lawn, the sight of palm trees, and the distraction of whether to eat a delicious orange right off the tree. I won’t mention it even though after many years in Minnesota—I put in my cold time—I would feel justified in doing so.

Anyway, I recommend the article generally, but more specifically for the following people: (1) antitrust attorneys that are into exclusionary conduct; (2) non-antitrust attorneys with clients that sell in a distribution network (including to retailers); (3) business people involved in pricing and marketing decisions for their company; and (4) antitrust law students that are looking for a good review of various types of exclusionary conduct.

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I Left BigLaw to Start My Own Law Firm . . . Today

March 10, 2014 | Bona Law PC

I am excited to announce that after a dozen years of big-law practice, I am leaving DLA Piper to start my own law firm—Bona Law PC. I believe that through Bona Law I can offer clients the legal services of the best law firms, but in a much more efficient way. I am headquartered in the San Diego, California area, but expect to continue to practice nationally.

My family, friends, and former co-workers have commented lately that I seem very happy—maybe even giddy. It is true. I am as enthusiastic about the practice of law—and life—as I have ever been. I have a wonderful supportive family and am about to embark on a journey that marries my entrepreneurial spirit with a profession that I love. I feel like I am living the dream.

After years of analyzing other markets for antitrust matters, I finally sat down and analyzed my own. My conclusion is the legal market has structurally changed such that the largest law firms are concentrating more and more on their biggest clients and developing such diseconomies of scale that they are no longer competitive for most businesses. Unless a company can provide these law firms with a minimum volume of work, the firms are unlikely to offer a competitive price for their services.

First, matters with less volume could create conflict issues, which are a significant and costly issue for large law firms. Without sufficient volume, it just isn’t worth it for firms to discount their already high prices.

Second, large law firms have huge fixed overhead—leases, management, marketing departments, etc. Moreover, many (probably most) of them have excess capacity, which means that they are paying a lot of attorneys that aren’t billing as many hours as the firm would like. So volume is a big deal.

This is where I come in.

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Does My Company’s Loyalty-Discount Program Violate Antitrust and Competition Laws?

January 22, 2014 | Bona Law PC

This article is cross-posted in both English and French at Thibault Schrepel’s outstanding competition blog Le Concurrentialiste. Like most antitrust issues today, questions about loyalty discounts are relevant across the globe as competition regimes and courts grapple with the best way to address them.

Companies like to reward their best customers with discounts. It happens everywhere from the local sandwich shop to markets for medical devices, pharmaceutical products, airline tickets, computers, consumer products, and many other products and services.

Customers like loyalty-discount programs (or rebates) because they get more for less. And the reason so many companies offer them is because they are successful.

Everyone wins, right?

Usually. But the program could very well violate antitrust and competition laws in the United States, the European Commission, or other jurisdictions.

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Even Individual Real-Estate Investors Can Violate The Antitrust Laws

January 6, 2014 | Bona Law PC

When you think about a government antitrust investigation, you probably picture monopoly accusations against large companies like Microsoft in the 90’s and early 2000’s or AT&T in the 70’s and 80’s. Or perhaps you imagine a global price-fixing cartel like that depicted in the movie The Informant.

In any event, the target in your mind is a big company, along with their officers and executives, and perhaps some sales people.

The Department of Justice actions against individual real-estate investors in Northern California should shatter those preconceptions. Over the last few weeks, the Antitrust Division of the DOJ has announced a series of plea agreements arising out of its antitrust investigations into bid rigging at real-estate-foreclosure auctions for certain Northern California counties.

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Building an Antitrust and Competition Policy: Where to Begin

December 26, 2013 | Bona Law PC

Let’s pretend that you are starting the new year with an exciting opportunity: You were just named general counsel of a multi-national corporation with several market-leading products.

You received lots of congratulations, high-fives, and kudos during holiday parties and family get-togethers, but you can’t help but start to think about the arduous task ahead.

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Breaking Up The Music-Teachers’ Cartel

December 18, 2013 | Bona Law PC

Little Johnny finally has a chance for some decent-priced piano lessons, thanks to the diligence of your Federal Trade Commission.

On Monday, December 16, 2013 the FTC slammed the full weight of its antitrust authority against the Music Teachers National Association (MTNA) and their vicious cartel to make little Susie pay more for her violin lessons.

The Association entered into a consent decree with the FTC, addressing the following provisions in their code of ethics: “The teacher shall respect the integrity of other teachers’ studios and shall not actively recruit students from another studio.”

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The Anatomy of a Per-Se-Antitrust Violation

December 15, 2013 | Bona Law PC

The Internet didn’t fall down after my first post, so I thought I’d try another.

In the US, certain conduct is so obviously anticompetitive that antitrust law labels it per se illegal. These restraints lack redeeming pro-competitive value in almost all instances, so the law allows plaintiffs an important short-cut to pleading and proving such a claim.

The short-cut is that a plaintiff asserting a per-se-antitrust claim need not demonstrate anticompetitive harm. The law presumes such harm. This is huge because this element is one of the most difficult and expensive to prove.

Proving anticompetitive harm is often tough. Plaintiffs usually start by defining the relevant product and geographic markets. This is obvious is some cases; difficult and disputed in others.

Within that defined market, the plaintiff will then usually have to show market or monopoly power, then actual competitive harm in that market that exceeds any competitive benefits from the challenged restraint. It doesn’t always go like this, but that is the typical journey.

Proving all of this almost always requires expert economic testimony, which is—again—almost always disputed by defendants’ economic expert.

So this anticompetitive harm element can become quite burdensome and expensive. That is why fitting a case into a per-se-antitrust package is so valuable for a plaintiff, and risky for a defendant.

Price-fixing agreements usually come to mind as the prototypical per se antitrust violation (keep in mind that antitrust views agreements to limit volume as effectively the same thing). Other examples are market-allocation agreements and certain boycotts.

Let’s talk about market-allocation agreements—as price-fixing is a bit too obvious—so we can see how dangerously easy it is for this per-se-antitrust violation to develop.

Market allocation is an antitrust problem because competitors are agreeing not to compete. The most simple market-allocation agreement is geographic—“you take customers West of the Mississippi, and we will take the ones to the East.”

But sometimes it develops more subtly.

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I Started An Antitrust Blog

December 13, 2013 | Bona Law PC

Welcome. My name is Jarod Bona and this is my new antitrust blog—The Antitrust Attorney Blog. My antitrust and competition practice is global, but I am fortunate to live in Sunny San Diego with my wonderful wife and son. If you’ve never been to San Diego, I highly recommend it.

I am starting this blog to participate in the “market-place of ideas,” primarily on antitrust and competition issues. But I will probably dabble in other areas too, as—like most antitrust lawyers—I do more than just antitrust. Indeed, after my clerkship, I started my career as an appellate attorney in Washington, DC, and I continue to litigate non-antitrust cases in both appellate and trial courts.

I graduated from Harvard Law School in 2001, then clerked in Minneapolis for Judge James B. Loken of the United States Court of Appeals for the Eighth Circuit. I then joined the Appellate and Constitutional Law Group of Gibson Dunn in Washington, DC before moving to California and eventually DLA Piper. I also spent several years in DLA Piper’s Minneapolis office. Update: I now work for my own law firm–Bona Law PC.

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