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Five Things To Know About Antitrust Class Action Lawsuits

[ 0 ] Aug. 25, 2014 | SBO Editor


antitrust

By Kellie Lerner & Meegan Hollywood

Robins, Kaplan, Miller & Ciresi L.L.P

As a small business owner, you often wear multiple hats while juggling the many demands of operating your own company.  While the end goal of this balancing act is to increase revenue and maximize profitability, many small businesses neglect an obscure but profitable revenue stream—recoveries from antitrust class action settlements.  While businesses routinely receive notice of these settlements, business owners often ignore them based on the mistaken belief that the amount of time and effort to file a claim exceeds the amount of any potential recovery.  To the contrary, however, responding to antitrust class action notice takes mere minutes, but can add thousands of dollars to your company’s bottom line.

To take advantage of future revenue opportunities from class action settlements, these are the five things you should know about antitrust class action lawsuits.

1. Antitrust Violations Raise Supply Costs To Small Businesses

Competition drives our economy and fosters an entrepreneurial spirit.  As such, antitrust laws are designed to protect small businesses from the harmful effects of anticompetitive conduct, such as unlawful monopolization and collusion by the large, powerful companies from which they purchase goods.  In fact, small businesses are often the first and most directly affected victims of anticompetitive activity because suppliers control the price, availability and other essential inputs that small businesses need to transact business and make products.  Thus, when suppliers engage in anticompetitive behavior, small businesses face higher prices, lower quality products, poor service and fewer options.  The result is higher costs and lower profit margins.

2. Antitrust Violations Occur In Every Industry, Including Yours

Antitrust cartels increase the cost of doing business by billions of dollars each year.  While many small businesses may wonder whether, and how, antitrust law relates to their businesses, antitrust laws apply to virtually all industries.  In recent years, billions of dollars have been recovered in criminal and civil antitrust cases that involve a multitude of industries, including those involving agriculture, construction, electronics, shipping services, food and beverage, health care, chemicals, retail and automobile parts.  As a small business owner, you should, therefore, be aware that antitrust violations may affect your business at any time.

3. You Can Obtain Money From Antitrust Settlements At No Cost

An antitrust class action lawsuit is one brought on behalf of many similarly situated plaintiffs (in legal parlance, “class members”), which alleges that a company or companies have engaged in anticompetitive practices.  While some antitrust lawsuits go to trial, many settle beforehand.  When a class action lawsuit settles, notice is sent to class members to advise them of the pending settlement and their rights.  All class members in an antitrust class action are entitled to recover a portion from the monetary settlement.

Generally, a claim form is sent some time after the notice of the settlement.  Businesses often ignore these claim forms because of the mistaken belief that they are not worth the time to complete.  Yet, in a recent distribution of combined settlements in a high-profile antitrust case, the average monetary recovery was $67,850.42.  In that same case, some class members received checks as high as $20 million.  To be sure, claim forms in antitrust class actions are worth the time to complete.

Moreover, class counsel and the claims administrator are always available to assist class members with the claims process at no charge.  Similarly, settlement websites offer a great deal of information for participating class members.  Class members should, however, be cautious about engaging the services of class action refund companies.  While these companies boast “settlement recovery services,” they typically take up to 30% of a class member’s recovery as a fee.  There is no cost to engage class counsel or the claims administrator for assistance.

4. You May Also Benefit From Filing Your Own Class Action Lawsuit

There are occasions when it makes sense for a small business to step forward as a “named” plaintiff, or “class representative” in a class action lawsuit.  Generally, one or several named plaintiffs are chosen to represent the entire class.  As such, class representatives have the opportunity to be at the forefront of the litigation and drive the case.  Indeed, named plaintiffs are kept informed about significant developments in the case and work with class counsel to make important strategic decisions throughout the course of the litigation.  While class representatives receive legal services from highly experienced class counsel at no cost, they provide class counsel with invaluable industry knowledge and insight.  Significantly, class representatives also have the opportunity to receive an incentive award at the conclusion of the case, if successful, for all of their hard work.

Whatever level of involvement a small business chooses, one thing is certain:  participation in antitrust class action lawsuits allows businesses to take a stand and serve the public good.

5. You Should Always Report Suspected Antitrust Violations

Small businesses are the lifeblood of our economy and fair competition is critical to their success.  If you have information about a potential antitrust violation, submit your concern to the Department of Justice’s Citizen Complaint Center (See http://www.justice.gov/atr/contact/newcase.html).  Further information about this process is located on the Antitrust Division’s website.  Of course, you may also contact your attorney, or another attorney who specializes in antitrust, to determine whether you have any legal recourse to address a potential antitrust violation.

About the Authors

Kellie Lerner is a Partner in the Antitrust and Trade Regulation Practice of Robins, Kaplan, Miller & Ciresi L.L.P.  She has more than a decade of experience litigating high stakes antitrust disputes in federal courts throughout the country.  She can be reached at klerner@rkmc.com.

Meegan Hollywood is an Associate in the Antitrust and Trade Regulation Practice of Robins, Kaplan, Miller & Ciresi L.L.P.  She can be reached at mfhollywood@rkmc.com.

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Category: Features