[Federal Register: September 21, 2005 (Volume 70, Number 182)]
[Notices]
[Page 55415-55422]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21se05-112]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Professional Consultants Insurance Company,
Inc.; Proposed Final Judgment and Competitive Impact Statement
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16(b)-(h), that a proposed Final Judgment,
Stipulation and Competitive Impact Statement have been filed with the
United States District Court for the District of Columbia in United
States v. Professional Consultants Insurance Company, Inc., Civil
Action No. 1:05CV01272. On June 28, 2005, the United States filed a
Complaint alleging that Professional Consultants Insurance Company,
Inc., violated Section 1 of the Sherman Act, 15 U.S.C. 1. The proposed
Final Judgment, filed the same time as the Complaint, requires
Professional Consultants Insurance Company, Inc., to end its illegal
information sharing activities and create a program to monitor its
compliance with the antitrust laws. A proposed Amended Final Judgment
was filed in substitution of, and to correct a drafting error in, the
originally filed proposed Final Judgment. Copies of the Complaint,
proposed Amended Final Judgment and Competitive Impact Statement are
available for inspection at the U.S. Department of Justice, Antitrust
Division, 325 Seventh Street, NW., Room 200, Washington, DC 20530 and
at the Office of the Clerk of the United States District Court for the
District of Columbia, 333 Constitution Avenue, NW., Washington, D.C.
20001.
Public comment is invited within 60 days of the date of this
notice. Such comments, and responses thereto, will be published in the
Federal Register and filed with the Court. Comments should be directed
to Mark Botti, Chief, Litigation I Section, United States Department of
Justice, 1401 H Street, NW., Suite 4000, Washington, DC 20530
(telephone: 202-307-0001).
Dorothy B. Fountain,
Deputy Director of Operations, Antitrust Division.
United States District Court for the District of Columbia
United States of America, Plaintiff, v. Professional Consultants
Insurance Company, Inc., Defendant
Case Number 1:05CV01272
Judge: Gladys Kessler
Deck Type: Antitrust
Date Stamp: 06/24/2005
Complaint
The United States of America, by its attorneys and acting under the
direction of the Attorney General of the United States, brings this
civil antitrust action to obtain equitable relief against Defendant
Professional Consultants Insurance Company, Inc. to prevent and
restrain violations of Section 1 of the Sherman Act, 15 U.S.C. 1. The
United States alleges as follows:
I. Jurisdiction and Venue
1. The United States brings this action to prevent and restrain
violations of Section 1 of the Sherman Act, 15 U.S.C. 1. The Court has
jurisdiction over the parties to this action and of the subject matter
pursuant to 15 U.S.C. 4 and 28 U.S.C. 1331, 1337 and 1345. Venue is
proper in this District because Defendant has so stipulated.
II. Defendant
2. Defendant Professional Consultants Insurance Company, Inc.
(``PCIC'') is a professional liability insurance company incorporated
under the laws of Vermont. PCIC's principal business is to provide
errors and omissions insurance coverage to its three shareholders,
which PCIC calls, and hereafter will be referred to as, its
``members.'' Each of PCIC's three members is a major actuarial
consulting firm doing business throughout the United States.
3. At all times relevant to this Complaint, PCIC has been managed
and operated by directors, officers, and providers of professional
services who concurrently served as directors, officers, or employees
of its members.
4. The PCIC members each employ hundreds of professional actuaries
throughout the country to serve, on a nationwide basis, clients that
require actuarial consulting services. Actuarial consultants are
professionals trained and skilled in mathematical and statistical
analysis and management of financial and economic risks. Their clients
are firms and organizations that require risk analysis and management
in various financial and other contexts, including pension plans and
other employee benefit plans organized to serve public or government
employees, private corporate employees, and members of labor unions.
5. Apart from their joint ownership and management of PCIC, the
three PCIC members operate actuarial consulting businesses separately
and independently of, and in competition with, each other. Each of the
three PCIC members is a major competitor of the others in the provision
of actuarial consulting services to employee benefit plans.
III. Trade and Commerce
6. At all times relevant to this Complaint, PCIC has provided
professional liability insurance coverage for claims against its
members arising from actuarial consulting businesses conducted by its
members, including the provision of actuarial consulting services to
employee benefit plans, throughout the United States. These activities
of PCIC and its members have been within the flow of, and have
substantially affected, interstate commerce.
7. Employee benefit plans engage PCIC's members and other actuarial
consulting firms to prepare actuarial risk valuations. Employee benefit
plans rely on the work of actuarial consultants to determine employee
benefit levels and employer contributions needed to fund the benefits.
An error or omission in the work performed by an actuarial consultant
can result in substantial monetary losses or other damages to the
employee benefit client.
8. To cover exposure to liability claims of clients arising out of
mistakes made in their actuarial work, PCIC members historically
obtained professional errors and omissions liability insurance. Since
the late 1980s and continuing to the present, PCIC has
[[Page 55416]]
annually provided each of its members with several millions of dollars
of such coverage. In addition, the members have individually purchased
substantial amounts of additional insurance coverage from commercial
insurance companies.
IV. Claim for Relief
9. Until recently, the PCIC members generally provided actuarial
consulting services to employee benefit clients under terms that did
not limit a client's rights to recover damages suffered as a result of
actuarial errors or omissions. Beginning in as early as the 1999-2000
time frame, PCIC, its members, and other actuarial consulting
competitors began to experience increasing severity and frequency of
liability claims arising out of their respective actuarial consulting
business. To address the increasing claims experience, the PCIC members
considered various ways to mitigate their exposure to liability claims,
including instituting or improving professional peer review and other
quality control procedures, as well as the use of contractual
limitations of liability, or ``LOL,'' in client engagement agreements.
10. Clients that accept LOL in their actuarial consulting
engagements are contractually bound to limitations on the amounts or
types of damages that may be recoverable as a result of actuarial
errors or omissions. Various formulations of LOL include liability
``caps'' precluding damages beyond a specified dollar amount,
limitations based on a multiple of fees charged to clients, and
limitations to ``direct damages,'' potentially precluding claims for
consequential or other types of damages.
11. In marketplace rivalry among actuarial consulting firms, LOL is
a significant basis of the firms' competition for clients and
prospective clients. All else equal, a firm that does not require LOL
can be at a significant competitive advantage in seeking a client's
business over a competing firm that does require LOL. To the extent
clients not disposed to accepting LOL can choose to engage actuarial
consulting firms that do not require LOL, firms that might otherwise
require LOL can be competitively disciplined or constrained from doing
so by the potential loss of clients to non-LOL firms.
12. When the PCIC members began to consider implementing LOL, they
recognized that unless and until LOL became a matter of widespread
usage throughout the actuarial consulting profession, firms
implementing LOL would face client resistance and potential loss of
business to firms that had not implemented LOL. A senior official of
one PCIC member noted that ``What I don't want to do is get so far
ahead of the market openly, without specific calculation that `now' is
the time, that we become a competitive target.'' Another PCIC member
was ``worried that they are way ahead * * * and fear that they are now
at a competitive disadvantage.'' Employees of the third PCIC member had
``reservations about adopting these procedures [LOL] too quickly * * *
[and] we don't want to lose clients by acting before our competitors
do.''
13. The PCIC members also recognized that efforts on their part to
implement LOL would be less exposed to client resistance and
competitive loss of business if other actuarial competitors also began
to implement LOL. To avoid being too far ``in front of the
competition'' in implementing LOL, they needed to obtain information
about what other actuarial consulting firms were doing or planning to
do. Thus, for example, employees of one PCIC member urged restraint in
implementing LOL, at least until the competitive situation could be
determined: ``We respectfully do not wish to be the first * * * to
adopt stringent limitations at the risk of losing our national
prominence, let alone a significant amount of business. The losses
could be devastating for some practices. Therefore, the [proposed]
effective date is left open until further information about our
competitors is known.''
14. Beginning as early as in 1999, the PCIC members discussed among
themselves their respective consideration and implementation of plans
to require LOL of their clients. These discussions took place on many
occasions and in several contexts, including at meetings of PCIC's
board of directors (comprised of senior officials of each of the PCIC
members), at various ``PCIC owners meetings'' (also attended by senior
officials of the PCIC members), in connection with a PCIC working group
called the ``PCIC Malpractice Avoidance Committee,'' and other formal
and informal communications among themselves.
15. In addition to enabling and facilitating LOL discussions among
the three PCIC members, PCIC sponsored, organized, and conducted a
series of profession-wide actuarial meetings, in March 2000, June 2001,
and January 2003. These profession-wide meetings were attended by
senior representatives not only of the PCIC members but also of five
other actuarial firms that competed for employee benefit clients on a
nationwide basis. At or in connection with each of these meetings, the
attendees exchanged information about plans or efforts to implement LOL
among actuarial consulting firms, including but not limited to the
following:
a. At the March 2000 profession-wide meeting, a number of LOL
implementation issues were discussed, including the use of dollar-based
limits or multiples of fees, and possible ways of dealing with clients
that resist the limitations. The use of LOL was described by one
attendee as a ``best practice'' that certain of the actuarial
consulting firms had begun using. Another attendee noted that ``there
was an argument made for inclusion of a standard [LOL] clause [in
client engagements]'' and that ``if more and more firms use this sort
of approach, it will become standard.''
b. At the June 2001 profession-wide meeting, ``a member of firms
discussed their own use of contractual safeguards and the clients'
acceptance.'' One of the attendees recounted: ``Most firms have either
begun implementing * * * or are actively considering [use of
contractual safeguards] * * * One firm stated that it had made a firm-
wide decision that it will no longer accept unlimited liability * * *
We also discussed some ideas about implementing contractual safeguards,
such as immediately requiring limitations for new clients and phasing
in the requirements for existing clients * * * There seemed to be a
consensus that * * * actuarial clients may complain about contractual
safeguards but will accept them as they become more widespread.''
c. Shortly after the June 2001 profession-wide meeting, a senior
official of one of the non-PCIC competitors at the meeting caused his
firm to begin considering LOL implementation. This official, as part of
the firm's consideration of LOL, requested and received from a PCIC
official sample LOL language to help the firm develop LOL terms for its
own client contracts.
16. In addition to the PCIC profession-wide meetings, PCIC and its
members engaged in numerous other LOL discussions with representatives
of other non-PCIC competitors, including but not limited to the
following:
a. In October 2001, a PCIC official communicated with an official
for one of the non-PCIC competitors that was represented at the PCIC
profession-wide meetings but had not begun to implement LOL. The PCIC
official advised that ``some consulting firms are beginning to
implement limits of liability'' and encouraged the non-PCIC firm to do
likewise: ``a strong argument
[[Page 55417]]
can be made that it is not in any firms' individual best interest to
avoid implementing reasonable contractual safeguards.'' The official of
the non-PCIC firm subsequently observed that the PCIC official ``feels
strongly about the limits of liability and was upset that we were not
seeking them,'' and thereafter the non-PCIC firm itself considered its
own implementation of LOL.
b. In late 2001, one of the PCIC members was in the process of
considering a proposed corporate policy to implement LOL, which it went
on to adopt in February 2002. In December 2001, to facilitate adoption
of the policy and acceptance among the firm's employees, a PCIC
official circulated to the firm's employees a memorandum providing
``HIGHLY CONFIDENTIAL'' information about competitor's use of LOL and
prospective plans to use LOL. The memorandum disclosed that the two
other PCIC members had already begun to require LOL of their clients;
that one of the non-PCIC competitors had plans to begin implementing
LOL; that another competitor was attempting to implement LOL; and that
yet another was ``strongly considering'' implementing LOL.
c. In early 2002, an employee benefit client of one of the PCIC
members refused to accept proffered LOL terms and decided to seek
competitive bids from other actuarial consulting firms in which LOL
would not be required. After one of the non-PCIC competitors that
attended the PCIC profession-wide meetings submitted a bid without LOL,
a PCIC official found out about the firm's bid, was unhappy that the
bid did not require LOL, and contacted a representative of the firm to
express his displeasure.
d. In April 2002, a PCIC official discussed profession-wide LOL
implementation with an official of a non-PCIC competitor. The PCIC
official apprised the non-PCIC competitor of ongoing LOL implementation
activities not only of the three PCIC members, but also those of two
other competitors. In return, the official of the non-PCIC competitor
disclosed LOL activities of his firm to the PCIC official.
e. At a professional association conference in September 2003,
senior officials of two of the PCIC members and that of a non-PCIC
competitor updated each other on the progress of their respective LOL
implementation efforts. In the wake of this conversation, the non-PCIC
official apprised a colleague at his firm of his discussions with the
PCIC competitors, and urged his colleague to ``push hard to get
liability limiting agreements wherever we can.''
17. Within the framework of the meetings and other communications
alleged above, PCIC, its members, and other actuarial consulting
competitors agreed among themselves to share competitively sensitive
information about each others' plans and efforts to implement LOL. The
sharing of this information eliminated or reduced competitive
uncertainties and concerns about the potential for losing clients to
firms not using LOL, and thus facilitated decisions of PCIC members and
other competitors to begin implementing LOL.
18. The agreement to share LOL information alleged above has
resulted in, among other things, the following effects:
a. Significant competition among PCIC members and other actuarial
consulting firms with respect to liability terms of contracting with
employee benefit clients has been restrained;
b. Employee benefit plan clients that have accepted LOL terms with
PCIC members or other actuarial consulting firms have been deprived of
the benefits of unrestrained competition in the setting of actuarial
consulting contract terms;
c. The use of LOL terms in actuarial consulting contracts with
employee benefit plans has been significantly more prevalent than would
have been the case in the presence of unrestrained competition among
the PCIC members and other actuarial consulting firms.
19. Unless permanently restrained and enjoined, PCIC and its
members are free to continue, maintain, or renew the above-described
sharing of competitively sensitive LOL information among themselves and
other actuarial consulting competitors, in violation of Section 1 of
the Sherman Act, 15 U.S.C. 1.
VI. Prayer for Relief
Wherefore, the Plaintiff United States of America prays:
1. Adjudge the Defendant PCIC and its members as constituting and
having engaged in an unlawful combination, or conspiracy in
unreasonable restraint of interstate trade and commerce in violation of
Section 1 of the Sherman Act, 15 U.S.C. 1;
2. Order that the Defendant PCIC, its members, and their respective
officers, directors, employees, successors, and assigns, and all other
persons acting or claiming to act on their behalf, be permanently
enjoined from engaging in, carrying out, renewing, or attempting to
engage in, carry out, or renew the combination and conspiracy alleged
herein, or any other combination or conspiracy having a similar purpose
or effect in violation of Section 1 of the Sherman Act, 15 U.S.C. 1;
3. Award to plaintiff its costs of this action and such other and
further relief as may be required and the Court may deem just and
proper.
Dated: June 24, 2005.
Respectfully Submitted,
For Plaintiff United States of America
-----------------------------------------------------------------------
R. Hewitt Pate,
Assistant Attorney General,
Antitrust Division.
-----------------------------------------------------------------------
J. Bruce McDonald,
Deputy Assistant Attorney General,
Antitrust Division.
-----------------------------------------------------------------------
Dorothy B. Fountain,
Deputy Director of Operations,
Antitrust Division.
-----------------------------------------------------------------------
Mark J. Botti (D.C. Bar 416948),
Chief, Litigation I Section,
Assistant Attorney General
-----------------------------------------------------------------------
Weeun Wage,
Jonathan B. Jacobs,
John P. Lohrer,
Michael A. Bishop (D.C. Bar 468693),
Barry L. Creech,
Barry J. Joyce,
Nicole S. Gordon,
Ryan J. Danks.
Litigation I Section,
Antitrust Division,
U.S. Department of Justice,
City Center Building,
1401 H Street, NW., Suite 4000,
Washington, DC 20530.
(202) 307-0001.
Facsimile: (202) 307-5802.
United States District Court for the District of Columbia
United States of America, Plaintiff v. Professional Consultants
Insurance Company, Inc., Defendant
Civil No. 1:05CV01272
Filed:
Amended Final Judgment
Whereas, Plaintiff, United States of America, filed its
Complaint on June 24, 2005, alleging Defendant's violation of
Section 1 of the Sherman Act, and Plaintiff and Defendant, by their
respective attorneys, have consented to the entry of this final
Judgment without trial or adjudication of any issue of fact or law,
and without the Final Judgment constituting any evidence against or
admission by Defendant, or any other entity, as to any issue of fact
or law;
And Whereas, Defendant agrees to be bound by the provisions of
this Final Judgment pending its approval by the Court;
And Whereas, the essence of this Final Judgment is the
prohibition of certain alleged information exchanging activities;
Now Therefore, before any testimony is taken, without trial or
adjudication of any
[[Page 55418]]
issue of fact or law, and upon consent of the parties, it is
ordered, adjudged and decreed:
I. Jurisdiction
This Court has jurisdiction over the subject matter of and the
parties to this action. For purposes of this Final Judgment only,
Defendant stipulates that the Complaint states a claim upon which
relief may be granted against Defendant under Section 1 of the
Sherman Act, as amended (15 U.S.C. 1).
II. Definitions
A. ``PCIC'' means Professional Consultants Insurance Company,
Inc., any of its successors and assigns, subsidiaries, divisions,
affiliates, partnerships, and joint ventures, and any of their
directors, officers, managers, agents, and employees when serving in
such capacity.
B. ``PCIC member'' or ``member'' means any current shareholder
of PCIC, any shareholder added to PCIC membership at any time during
the term of this Final Judgment, any of such shareholders'
successors and assigns, any of their subsidiaries, divisions,
partnerships, and any of their directors, officers, managers,
agents, and employees when serving in such capacity.
C. ``PCIC business requirements'' means rating, assessing, or
underwriting professional liability insurance for current PCIC
members or firms under consideration for PCIC membership; allowing
PCIC board members to make informed decisions about whether to
accept or deny membership as to prospective members; preparing
reinsurance submissions and responding to reinsurers' requests for
information; allowing PCIC board members to evaluate PCIC's risk
profile, the risk profile of firms under consideration for PCIC
membership and otherwise meet fiduciary obligations to PCIC;
allowing PCIC members to make informed decisions about continued
participation in PCIC or potential members to make informed
decisions about participating in PCIC; and responding to requests
for information by auditors and regulatory agencies.
D. ``Actuarial consulting services'' means any actuarial
services provided by actuarial consulting firms to any clients of
such firms, including but not limited to any such services relating
to employee benefit plans.
E. ``Aggregated information'' means information that reflects
aggregation of information as to different clients, transactions, or
service offerings. ``Aggregated information'' does not include
information that is specific to individual identifiable clients or
transactions.
F. ``Agreement'' means any agreement or understanding, formal or
informal, oral or written.
G. ``Communicate'' means to provide, disclose, disseminate,
solicit, share, or exchange information in any manner or form,
including by oral, written, or electronic means.
H. ``LOL'' means contractual limitations of liability in the
provision of actuarial consulting services.
I. ``LOL information'' means information about an actuarial
consulting firm's use of LOL and information regrading an actuarial
consulting firm's plans, policies or practices relating to its use
of LOL.
J. ``Prohibited LOL Information'' means current, client specific
information about an actuarial firm's use of LOLs and information
regarding an actuarial firm's current or future plans, policies or
practices relating to its use of LOLs.
III. Applicability
A. This Final Judgment applies to PCIC, as defined above each
consenting PCIC member individually, and all other persons in active
concert or participation with PCIC who receive actual notice of this
Final Judgment by personal service or otherwise.
B. PCIC shall require, as a condition of membership in PCIC,
that each PCIC member consent to be bound by the Judgment,
throughout the term of the Judgment, regardless of whether the
member continues or discontinues PCIC membership or whether PCIC
continues or ceases to exist as an entity.
IV. LOL Provisions
A. PCIC shall not communicate LOL information to any PCIC member
or other representative of PCIC, or to any representative of any
PCIC member, except as limited to the following extent:
1. PCIC's Antitrust Compliance Office, to be established by PCIC
pursuant to ] V.A. of this Final Judgment, and/or an independent
third party working with PCIC's Antitrust Compliance Office, and in
a format approved by PCIC's Antitrust Compliance Office, may
communicate historical and aggregated LOL information to members of
PCIC's board of directors (including alternate directors),
professional and administrative service providers working for PCIC,
and the respective senior management of PCIC's members regularly
involved in decision-making with respect to PCIC's business
requirements, solely for purposes of an only as reasonably necessary
to accomplish PCIC business requirements. PCIC's Antitrust
compliance Office may also communicate historical and aggregated LOL
information to a prospective member of PCIC if requested by the
prospective member for the purpose of making an informed decision
about participating in PCIC.
2. LOL information communicated pursuant to ] IV.A.1. of this
Final Judgment shall be labeled ``Confidential; Disclosure and Usage
Subject to PCIC's Antitrust Compliance Office,'' and shall be
preserved and maintained by PCIC's Antitrust Compliance Office ready
for possible inspection by or production to the United States.
3. Except to serve a purpose for which the information was
communicated pursuant to ] IV.A.1., recipients of LOL information
communicated pursuant to ] IV.A.1 shall not further communicate any
such information to any other PCIC member or to any representative
of any other provider of actuarial consulting services, and shall
not further communicate or use any such information in any manner.
B. A PCIC member may communicate to PCIC's Antitrust compliance
Office and/or the independent third party, not more than twice per
calendar year, historical and aggregated information about its usage
of LOLs, solely for purposes of and only as reasonably necessary to
accomplish PCIC's business requirements.
C. PCIC shall not require any member to adopt, implement,
maintain, or engage in any policies, plans, or practices relating to
LOL usage, except that:
1. PCIC may use historical and aggregated LOL information to
accomplish PCIC's business requirements.
2. PCIC may deny or exclude a member as to professional
liability insurance coverage in excess of $15 million, but only if:
(a) Reinsurance to be obtained by PCIC for the denied or
excluded coverage is conditioned upon usage of LOL and the member
does not satisfy the conditions,
(b) Reinsurance to be obtained by PCIC for the denied for
excluded coverage is not otherwise reasonably commercially available
at a reasonable price,
(c) At the members' request, PCIC will continue to provide the
member with primary coverage of not less than $15 million,
(d) PCIC provides the United States with written notice of the
facts and circumstances of such denial or exclusion within ten
business days of the denial or exclusion to the member, and
(e) PCIC preserves and maintains ready for possible inspection
or production all PCIC communications with reinsurers or members and
other records relating to the exclusion or denial.
D. PCIC and its members shall not:
1. Enter into or participate in any agreement between or among
any of themselves with respect to any actual or potential usage of
LOL, provided that the United States will not assert a violation of
this provision based solely on parallel conduct of the PCIC members.
2. Enter into or participate in any agreement with any
representatives of any non-member providers of actuarial consulting
services with respect to any actual or potential usage of LOL.
3. Communicate with any representatives of any member or non-
member providers of actuarial consulting services with respect to
any Prohibited LOL Information.
E. Notwithstanding any provisions of this Final Judgment:
1. PCIC may obtain client-specific LOL information from a PCIC
member to the extent reasonably necessary to discuss a specific
actual or threatened professional liability claim against the
member, even if the LOL information is Prohibited LOL Information.
2. PCIC members are not prohibited from unilaterally disclosing
LOL information, including Prohibited LOL Information, to clients or
prospective clients, to the press or news media, and in connection
with SEC or other regulatory filings, or LOL information that is in
the public domain. Moreover, PCIC members are not prohibited from
disclosing or receiving LOL information, including Prohibited LOL
Information, when conducting business with another actuarial
consulting firm in a vendor-vendee relationship, or when
communicating with affiliated actuarial consulting firms based in
other countries.
[[Page 55419]]
3. PCIC and its members are not prohibited from engaging in
conduct protected under the Noerr-Pennington doctrine.
4. PCIC members are not prohibited from conducting due diligence
with respect to LOLs in connection with an actual or contemplated
(a) acquisition of another actuarial consulting firm; (b) purchase
of an actuarial consulting business from another actuarial
consulting firm; or (c) sale of an actuarial consulting business to
another actuarial consulting firm. Moreover, to the extent
reasonably necessary, PCIC members are not prohibited from
conducting due diligence with respect to LOLs in connection with an
evaluation of whether to become a shareholder or member of an
insurance company (captive or not) other than PCIC.
F. Nothing in this Final Judgment shall prohibit or interfere
with PCIC's right to grant or deny coverage, or admit or deny new
members, for any reason unrelated to a current or prospective PCIC
member's use of LOLs.
V. Antitrust Compliance and Notification
A. PCIC shall establish an Antitrust Compliance Office,
including appointment of an Antitrust Compliance Officer, within 30
days of entry of this Final Judgment, as follows:
1. The Antitrust Compliance Office established by PCIC shall be
staffed and maintained independently of PCIC's members.
2. Each PCIC Antitrust Compliance Officer appointed pursuant to
] V.A. shall be an attorney with substantial experience with the
antitrust laws and shall not have any other responsibilities with
respect to PCIC's operations.
B. Each Antitrust Compliance Officer appointed pursuant to ]
V.A. shall be responsible for establishing and implementing an
antitrust compliance program for PCIC and ensuring PCIC's compliance
with this Final Judgment, including the following:
1. The PCIC Compliance Officer shall furnish a copy of this
Final Judgment (a) within thirty (30) days of entry of this Final
Judgment to each director or officer of PCIC, each representative of
a PCIC member working with PCIC, and each individual who receives
LOL information pursuant to ] IV.A.1, and (b) within thirty (30)
days to each person who succeeds to any such position.
2. The PCIC Compliance Officer shall obtain from each person
designated in ] V.B.1. of this Final Judgment a signed certification
that the person has read, understands, and agrees to comply with the
provisions of this Final Judgment, to the best of his/her knowledge
at the time the certification is made is not aware of any violation
of this Final Judgment by PCIC that has not already been reported to
the PCIC Compliance Officer, and understands that failure to comply
with this Final Judgment may result in conviction for criminal
contempt of court.
3. Upon learning of any potential violation of any provision of
this Final Judgment, the PCIC Compliance Officer shall forthwith
take appropriate action to terminate or modify the activity so as to
comply with this Final Judgment. Any such action shall be reported
in the annual compliance report required by ] V.B.4. of this Final
Judgment.
4. For each year during the term of this Final Judgment, on or
before the anniversary date of this Final Judgment, the PCIC
Compliance Officer shall file with the United States a report as to
the fact and manner of its compliance with the provisions of this
Final Judgment. In addition, the report must identify any individual
who received LOL information pursuant to ] IV.A.1.
C. PCIC shall require, as a condition of membership in PCIC,
that each PCIC member agree to establish an antitrust compliance
program within 90 days of the entry of this Final Judgment, or with
respect to a new PCIC member within 90 days of membership. Each PCIC
member's antitrust compliance program must include the policies and
procedures described in ] V.B.1-4.
D. PCIC shall cause to be published a written notice in the form
attached an Appendix to this Final Judgment, in Pensions &
Investments and in Pensions & Investments Online, within sixty (60)
days of the entry of this Final Judgment.
VI. Compliance Inspection
A. For purposes of determining or securing compliance with this
Final Judgment, or of determining whether this Final Judgment should
be modified or vacated, and subject to any legally recognized
privilege, from time to time duly authorized representatives of the
United States Department of Justice, including consultants and other
persons retained by the United States shall, upon written request of
a duly authorized representative of the Assistant Attorney General
in charge of the Antitrust Division, and on reasonable notice to the
PCIC and its members, be permitted:
1. Access during PCIC's and its members' office hours to inspect
and copy, or at the United States' option, to require PCIC and its
members to provide copies of all books, ledgers, accounts, records,
and documents in their possession, custody, or control, relating to
any matters contained in this Final Judgment; and
2. To interview, either informally or on the record, PCIC's and
its members' officers, employees, or other representatives, who may
have their individual counsel present, regarding such matters. The
interviews shall be subject to the reasonable convenience of the
interviewee and without restraint or interference by PCIC or its
members.
B. Upon the written request of a duly authorized representative
of the Assistant Attorney General in charge of the Antitrust
Division, PCIC and its members shall submit written reports and
interrogatory responses, under oath if requested, relating to any of
the matters contained in this Final Judgment as may be requested.
C. No information or documents obtained by the means provided in
this section shall be divulged by the United States to any person
other than an authorized representative of the executive branch of
the United States, except in the course of legal proceedings to
which the United States is a party (including grand jury
proceedings), or for the purpose of securing compliance with this
Final Judgment, or as otherwise required by law.
D. If at this time information or documents are furnished by
PCIC or a PCIC member to the United States, PCIC or the member
represents and identifies in writing the material in any such
information or documents to which a claim of protection may be
asserted under Rule 26(c)(7) of the Federal Rules of Civil
Procedure, and PCIC or the member marks each pertinent page of such
material, ``Subject to claim of protection under Rule 26(c)(7) of
the Federal Rules of Civil Procedure,'' then the United States shall
give ten (10) calendar days notice prior to divulging such material
in any legal proceeding (other than a grand jury proceeding).
VII. Retention of Jurisdiction
This Court retains jurisdiction to enable any party or any PCIC
member that consents to be bound by this Final Judgment to apply to
this Court at any time for further orders and directions as may be
necessary or appropriate to carry out or construe this Final
Judgment, to modify any of its provisions, to enforce compliance,
and punish violations of its provisions.
VIII. Public Interest Determination
Entry of this Final Judgment is in the public interest.
IX. Term
This Final Judgment shall expire ten (10) years after the day of
its entry.
Dated:-----------------------------------------------------------------
Court approval subject to procedures of Antitrust Procedures and
Penalties Act, 15 U.S.C. 16.
-----------------------------------------------------------------------
United States District Judge
Appendix
On June 24, 2005, the United States Department of Justice filed
a civil suit alleging that Professional Consultants Insurance
Company (``PCIC'') has engaged in certain practices in violation of
Section 1 of the Sherman Act. PCIC is a Vermont-based captive
insurance company that provides professional liability insurance to
three actuarial consulting firms (hereafter referred to as
``PCIC``). PCIC has agreed to entry of a civil consent decree to
settle this matter. The consent decree does not constitute evidence
or admission by any party with respect to any issue of fact or law.
The consent decree applies to PCIC and its consenting members, as
well as their directors, officers, managers, agents, and employees.
The Justice Department's suit alleges that PCIC and its members
engaged in the sharing of competitively sensitive information
relating to the use of contractual limitations of liability (or
``LOL'') in actuarial consulting engagements with pension funds and
other employee benefit plans. The consent decree is aimed at
prohibiting PCIC and its members from sharing LOL information among
themselves, or with other providers of actuarial consulting
services.
Among other things, the consent decree prohibits PCIC and its
members from
[[Page 55420]]
communicating among themselves with respect to LOL information,
except to a specified extent and subject to safeguards reflecting
PCIC's reasonable need for use of LOL information to provide its
members with professional liability insurance coverage. The consent
decree also prohibits PCIC and its members from entering into or
participating in any agreement, among themselves or with any other
providers of actuarial consulting services, with respect to any
actual or potential use of LOL; and it prohibits PCIC and its
members from communicating with other providers of actuarial
consulting services with respect to any firm's current or future
plans, policies, or practices relating to the use of LOLs. Under the
consent decree, PCIC must require, as a condition of PCIC
membership, that its members be fully bound by the terms of the
decree. In addition, the consent decree also requires PCIC and its
members to establish antitrust compliance programs and notification
procedures.
Interested persons may address comments to Mark J. Botti, Chief,
Litigation I Section, Antitrust Division, U.S. Department of
Justice, 1401 H Street, NW., Suite 4000, Washington, DC 20530,
within 60 days of the date of this notice.
United States District Court for the District of Columbia
United States of America, Plaintiff v. Professional Consultants
Insurance Company, Inc., Defendant
CASE NUMBER: 1:05CV01272
JUDGE: Gladys Kessler
DECK TYPE: Antitrust
DATE STAMP:
Competitive Impact Statement
Plaintiff United States of America (``United States''), pursuant
to the Antitrust Procedures and Penalties Act (``APPA''), 15 U.S.C.
16(b)-(h), files this Competitive Impact Statement relating to the
proposed Amended Final Judgment submitted for entry in this civil
antitrust proceeding.
I. Nature and Purpose of the Proceeding
On June 24, 2005, the United States filed a civil antitrust
Complaint against Professional Consultants Insurance Company, Inc.
(``PCIC''), alleging that PCIC, three actuarial consulting firms
that own and manage PCIC, and other actuarial consulting firms
agreed among themselves to share competitively sensitive information
about their use of contractual limitations of liability in violation
of Section 1 of the Sherman Act.
The United States has also filed a proposed Amended Final
Judgment,\1\ designed to prevent the continuation and eliminate the
anticompetitive effects of the violation alleged in the Complaint.
The proposed Amended Final Judgment, which is explained more fully
below, aims to prevent PCIC and its members from sharing limitations
of liability information among themselves, or with other providers
of actuarial consulting services, in a manner that may significantly
lessen competition.
---------------------------------------------------------------------------
\1\ At the same time the Complaint was filed, the United States
also filed a Stipulation and a proposed Final Judgment. In
substitution of, and to correct a drafting error in, the originally
filed proposed Final Judgment, the United States and PCIC jointly
filed a proposed Amended Final Judgment concurrently with the filing
of the Competitive Impact Statement.
---------------------------------------------------------------------------
The United States and PCIC have stipulated that the proposed
Amended Final Judgment may be entered after compliance with the
APPA. Entry of the proposed Amended Final Judgment would terminate
this action, except that the Court would retain jurisdiction to
construe, modify, or enforce the provisions of the proposed Amended
Final Judgment and to punish violations thereof.
II. Description of the Events Giving Rise to the Alleged Violation
A. PCIC, Its Members, and the Actuarial Consulting Marketplace
PCIC is a professional liability insurance company owned and
managed jointly by three actuarial consulting firms (which call
themselves, and are hereinafter referred to as, PCIC ``members'').
PCIC's principal business is to provide errors and omissions
insurance coverage to its members, each of which is a major
nationwide provider of actuarial consulting services. The clients of
PCIC's members are firms and organizations that require actuarial
financial risk analysis and management, including pension funds and
other employee benefit plans serving public or government employees,
private corporate employees, and members of labor unions.
Apart from their joint ownership and management of PCIC, the
three PCIC members are major competitors of each other, particularly
in the provision of actuarial consulting services to employee
benefit plans. In addition to the PCIC members, six other actuarial
consulting firms compete on a nationwide basis to provide actuarial
services to employee benefit plans. Actuarial consulting firms gauge
their competitive positions based on their shares of clients among
industry-published lists of the 1,001 largest U.S. employee benefit
plans. Based on recent data obtained by the United States, the three
PCIC members' combined share of the top 1,000 plans is about 35
percent, and the combined share of all nine national competitors is
about 96 percent.
The actuarial consulting firms also evaluate their market
positions with reference to three distinct types of employee benefit
clients: plans established by corporations or private companies
(referred to as ``corporate plans''); plans of public or government
entities (``public plans''); and plans established by labor
organizations and funded by multiple employers (``multi-employer
plans''). Recent data indicates that the PCIC members collectively
account for about 40 percent of all corporate plans among the top
1,000 plans, and that the combined share of PCIC members and three
other firms exceeds 90 percent. One PCIC member and four other firms
have about 92 percent of the top 1,000 public plans. Two PCIC
members and three other firms have about 91 percent of the top 1,000
multiemployer plans.
B. Anticompetitive Exchange of Information on Limitations of Liability
As alleged in the Complaint, the work performed by actuarial
consulting firms for employee benefit clients include risk
valuations used to determine employee benefit levels and employer
contributions needed to fund the benefits. In such cases, an
actuarial error or omission can result in substantial monetary
losses or other damages to the client. Until recently, PCIC's
members generally served their clients under terms that did not
limit a client's right to recover damages suffered as a result of
actuarial errors or omissions. To cover exposure to liability claims
of clients arising out of mistakes made in their actuarial work, the
members historically obtained professional errors and omissions
liability insurance.
As actuarial consulting firms began to experience increasing
severity and frequency of liability claims in 1999-2000, the PCIC
members considered ways to mitigate their exposure to liability
claims. Among other things, they considered instituting or improving
professional peer review and other quality control procedures, and
they considered using contractual limitations of liability, or
``LOL,'' in client engagement agreements. Clients accepting LOL are
contractually bound to limitations on the amounts or types of
damages that may be recoverable as a result of actuarial errors or
omissions.
The Complaint alleges that the PCIC members recognized that it
made a difference whether they implemented LOL unilaterally or
collectively, and whether they did so with or without a broad
profession-wide movement toward LOL. They understood that unless and
until LOL became a matter of widespread usage throughout the
actuarial consulting profession, firms implementing LOL would face
client resistance and potential loss of business to firms that had
not implemented LOL. They also recognized that efforts on their part
to implement LOL would be less exposed to client resistance and
competitive loss of business if other actuarial competitors also
began to implement LOL.
To avoid being ``in front of the competition,'' the PCIC members
sought to obtain information about their competitors' plans with
respect to LOL. To facilitate the use of LOL by other competitors,
they also sought to make others aware of their own LOL
implementation efforts. Accordingly, beginning as early as in 1999,
the PCIC members engaged in numerous discussions among themselves
and with non-PCIC competitors, including at a series of PCIC-
sponsored profession-wide meetings, at which the firms disclosed to
each other their respective ongoing and prospective LOL
implementation policies, plans, and practices. This widespread
sharing of LOL information was not motivated by any purpose of
improving marketplace efficiency in the provision of actuarial
consulting services, and in fact provided actuarial clients with no
procompetitive benefits in their purchase of actuarial consulting
services.
As alleged in the Complaint, PCIC, its members, and other
actuarial consulting competitors unlawfully agreed among themselves
to share competitively sensitive information about each other's
plans and efforts to implement LOL. The challenged
[[Page 55421]]
exchange of LOL information facilitated at least tacit coordination
of competitor's decisions to implement LOL. The major actuarial
consulting firms have tended to concentrate their businesses among
three client categories--corporate, public, and multi-employer--in a
way that has resulted in extremely high concentrations of sales
among just a few consulting firms in each of those categories.
Moreover, competitive turn-over of clients occurred relatively
infrequently, and the consulting firms do not appear to have
competed broadly or vigorously to take established clients away from
each other. Given these conditions, unilateral attempts to implement
LOL by any of the firms would have been competitively disruptive,
prompting clients to seek competitive alternatives and potentially
leading to abandonment of established client-consultant
relationships. Such competitive disruption, from the consulting
firms' perspective, would have been undesirable in causing erosion
or shifting of the historical patterns of concentration and
stability within the client categories, which could lead to
increased price competition. Indeed, one purpose of the challenged
conduct was to facilitate the use of LOL as a profession-wide
``standard'' while avoiding this competitive response, and its
actual effect was to induce numerous clients to accept LOL that
otherwise would not have done so.
III. Explanation of the Proposed Amended Final Judgment
The purpose of the proposed Amended Final Judgment is to prevent
PCIC and its members from sharing LOL information among themselves,
or with other providers of actuarial consulting services, in a
manner that may significantly lessen competition. Application of the
proposed Amended Final Judgment extends not only to PCIC but also to
its members, through a requirement that PCIC obtain consent of its
members to be bound by the proposed Amended Final Judgment as a
condition of PCIC membership. The term of the proposed Amended Final
Judgment is ten years from the date of its entry.
The proposed Amended Final Judgment Final Judgment seeks to
prevent PCIC and its members from engaging in anticompetitive
communications and uses of LOL information while at the same time
allowing certain PCIC business requirements for LOL information that
do not raise significant competitive concerns. PCIC and its members
are thus constrained from communicating about their usage of LOL to
the extent of and subject to specified limitations and safeguards as
to allow PCIC's continued operation as a provider of professional
liability insurance. PCIC is prohibited from requiring its members
to implement LOL, also subject to limited allowances for PCIC to
engage in reasonable business activities as a professional liability
insurer.
The proposed Amended Final Judgment prohibits PCIC and its
members from entering into or participating in any agreements among
themselves or with any other provider of actuarial consulting
services, as to any actual or potential use of LOL. In addition,
PCIC and its members are barred from communicating with other
providers of actuarial consulting services as to any firm's current
or future plans, policies, or practices relating to the use of LOL.
Other provisions of the proposed Amended Final Judgment require PCIC
and its members to institute antitrust compliance programs, and to
follow specified antitrust compliance and notification policies and
procedures.
IV. Remedies Available to Potential Private Litigants
Section 4 of the Clayton Act, 15 U.S.C. 15, provides that any
person who has been injured as a result of conduct prohibited by the
antitrust laws may bring suit in federal court to recover three
times the damages the person has suffered, as well as costs and
reasonable attorneys' fees. Entry of the proposed Amended Final
Judgment will neither impair nor assist the bringing of any private
antitrust damage action. Under the provisions of Section 5(a) of the
Clayton Act, 15 U.S.C. 16(a), the proposed Final Judgment has no
prima facie effect in any subsequent private lawsuit that may be
brought against the Defendants.
V. Procedures Available for Modification of the Proposed Amended
Final Judgment
The United States and Defendants have stipulated that the
proposed Amended Final Judgment may be entered by the Court after
compliance with the provisions of the APPA, provided that the United
States has not withdrawn its consent. The APPA conditions entry upon
the Court's determination that the proposed Amended Final Judgment
is in the public interest.
The APPA provides a period of at least sixty days preceding the
effective date of the proposed Amended Final Judgment within which
any person may submit to the United States written comments
regarding the proposed Amended Final Judgment. Any person who wishes
to comment should do so within sixty days of the date of publication
of this Competitive Impact Statement in the Federal Register. All
comments received during this period will be considered by the
Department of Justice, which remains free to withdraw its consent to
the proposed Amended Final Judgment at any time prior to the Court's
entry of judgment. The comments and the response of the United
States will be filed with the Court and published in the Federal
Register. Written comments should be submitted to:
Mark J. Botti,
Chief, Litigation I Section,
Antitrust Division,
United States Department of Justice,
1401 H Street, NW., Suite 4000,
Washington, DC 20530.
The proposed Amended Final Judgment provides that the Court retains
jurisdiction over this action, and the parties may apply to the Court
for any order necessary or appropriate for the modification,
interpretation, or enforcement of the proposed Amended Final Judgment.
VI. Alternatives to the Proposed Amended Final Judgment
The United States considered, as an alternative to the proposed
Amended Final Judgment, proceeding to a full trial on the merits of its
Complaint. The United States is satisfied, however, that the relief
contained in the proposed Amended Final Judgment will reestablish and
maintain competition among actuarial consulting firms with respect to
liability terms of contracting with clients. In so doing, entry of the
proposed Amended Final Judgment will avoid the time, expense and
uncertainty of a full trial on the merits of the government's
Complaint.
The United States considered, but did not require as an element of
the negotiated settlement, prohibiting PCIC members from enforcing LOL
terms that they have already obtained from clients. The United States
concluded that barring the PCIC members from enforcing existing LOL
terms is not necessary to remediate anticompetitive effects of the
challenged conduct. In this respect, the harm to clients resulting from
anticompetitive imposition of LOL is prospective and uncertain, and as
the great majority of actuarial clients do not experience faulty
actuarial work, would arise only infrequently. Rather than seeking
broadly to prohibit the enforcement of existing LOL terms, the United
States believes it sufficient that clients against whom LOL terms may
ultimately be advanced will then have the opportunity to assert
invalidation of the terms as having been unlawfully imposed.
The United States also considered but did not require the PCIC
members to be barred from prospectively implementing LOL in new client
engagements for a period of time, as a means of restoring market
conditions pre-dating the conduct challenged in the Complaint. The
United States determined such a measure to be unnecessary because at
the present time significant competitive alternatives continue to exist
for clients seeking to avoid LOL. One non-PCIC competitor, the largest
actuarial consulting firm serving multi-employer clients, has to date
chosen not to implement LOL. Another of the non-PCIC firms, which is
the second leading competitor as to public clients and the third
leading competitor as to corporate clients, has implemented a
relatively less onerous form of LOL that purports to confine recovery
to direct damages, rather than the more commonly used limitation to a
fixed dollar amount or multiple of fees. Certain other firms that have
begun implementing LOL have done so under policies that make
[[Page 55422]]
allowances for clients to avoid LOL in their contract negotiations.
VII. Standard of Review Under APPA for the Proposed Amended Final
Judgment
The APPA requires that proposed consent judgments in antitrust
cases brought by the United States be subject to a sixty-day comment
period, after which the Court shall determine whether entry of the
proposed Final Judgment ``is in the public interest.'' 15 U.S.C.
16(e)(1). In making that determination, the Court shall consider:
(A) the competitive impact of such judgment, including
termination of alleged violations, provisions for enforcement and
modification, duration of relief sought, anticipated effects of
alternative remedies actually considered, whether its terms are
ambiguous, and any other competitive considerations bearing upon the
adequacy of such judgment that the court deems necessary to a
determination of whether the consent judgment is in the public
interest; and
(B) the impact of entry of such judgment upon a competition in
the relevant market or markets, upon the public generally and
individuals alleging specific injury from the violations set forth
in the complaint including consideration of the public benefit, if
any, to be derived from a determination of the issues at trial.
15 U.S.C. 16(e)(1)(A) and (B). As the United States Court of Appeals
for the District of Columbia Circuit has held, the APPA permits a court
to consider, among other things, the relationship between the remedy
secured and the specific allegations set forth in the government's
complaint, whether the decree is sufficiently clear, whether
enforcement mechanisms are sufficient, and whether the decree may
positively harm third parties. See United States v. Microsoft Corp., 56
F.3d 1448, 1458-62 (D.C. Cir. 1995).
``Nothing in this section shall be construed to require the court
to conduct an evidentiary hearing or to require the court to permit
anyone to intervene.'' 15 U.S.C. 16(e)(2). Thus, in conducting this
inquiry, ``[t]he court is nowhere compelled to go to trial or to engage
in extended proceedings which might have the effect of vitiating the
benefits of prompt and less costly settlement through the consent
decree process.'' 119 Cong. Rec. 24,598 (1973) (statement of Senator
Tunney.\2\ Rather:
\2\ See United States v. Gillette Co., 406 F. Supp. 713, 716 (D.
Mass. 1975) (recognizing it was not the court's duty to settle;
rather, the court must only answer ``whether the settlement achieved
[was] within the reaches of the public interest).'' A ``public
interest'' determination can be made properly on the basis of the
Competitive Impact Statement and Response to Comments filed by the
Department of Justice pursuant to the APPA. Although the APPA
authorizes the use of additional procedures, 15 U.S.C. 16(f), those
procedures are discretionary. A court need not invoke any of them
unless it believes that the comments have raised significant issues
and that further proceedings would aid the court in resolving those
issues. See H.R. Rep. No 93-1463, 93rd Cong., 2d Sess. 8-9 (1974),
reprinted in 1974 U.S.C.C.A.N. 6535, 6538.
---------------------------------------------------------------------------
[a]bsent a showing of corrupt failure of the government to
discharge its duty, the Court, in making it public interest finding,
should* * * carefully consider the explanations of the government in
the competitive impact statement and its responses to comments in
order to determine whether those explanations are reasonable under
the circumstances.
United States v. Mid-America Dairymen, Inc., 1977-1 Trade Cas. (CCH) ]
61,508, at 71,980 (W.D. Mo. 1977).
Accordingly, with respect to the adequacy of the relief secured by
the decree, a court may not ``engage in an unrestricted evaluation of
what relief would best serve the public.'' United States v. BNS, Inc.,
858 F.2d 456, 462 (9th Cir. 1988) (citing United States v. Bechtel
Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see also Microsoft, 56 F.3d
at 1460-62. Courts have held that:
[t]he balancing of competing social and political interests
affected by a proposed antitrust consent decree must be left, in the
first instance, to the discretion of the Attorney General. The
court's role in protecting the public interest is one of insuring
that the government has not breached its duty to the public in
consenting to the decree. The court is required to determine not
whether a particular decree is the one that will best serve society,
but whether the settlement is ``within the reaches of the public
interest.'' More elaborate requirements might undermine the
effectiveness of antitrust enforcement by consent decree.
Bechtel, 648 F.2d at 666 (emphasis added) (citations omitted).\3\
---------------------------------------------------------------------------
\3\ Cf. BNS, 858 F.2d at 464 (holding that the court's
``ultimate authority under the [APPA] is limited to approving or
disapproving the consent decree''); Gillette, 406 F. Supp. at 716
(noting that, in this way, the court is constrained to ``look at the
overall picture not hypercritically, nor with a microscope, but with
an artist's reducing glass''). See generally Microsoft, 56 F.3d at
1461 (discussing whether ``the remedies [obtained in the decree are]
so inconsonant with the allegations charged as to fall outside of
the `reaches of the public interest' '').
---------------------------------------------------------------------------
The proposed Final Judgment, therefore, should not be reviewed
under a standard of whether it is certain to eliminate every
anticompetitive effect of a particular practice or whether it mandates
certainty of free competition in the future. Court approval of a final
judgment requires a standard more flexible and less strict than the
standard required for a finding of liability. ``[A] proposed decree
must be approved even if it falls short of the remedy the court would
impose on its own, as long as it falls within the range of
acceptability or is `within the reaches of public interest.' '' United
States v. AT&T, 552 F. Supp. 131, 151 (D.D.C. 1982) (citations omited)
(quoting Gillette, 406 F. Supp. at 716), aff'd sub nom. Maryland v.
United States, 460 U.S. 1001 (1983); see also United States v. Alcan
Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 1985) (approving the
consent decree even though the court would have imposed a greater
remedy).
Moreover, the Court's role under the APPA is limited to reviewing
the remedy in relationship to the violations that the United States has
alleged in its Complaint; the APPA does not authorize the Court to
``construct [its] own hypothetical case and then evaluate the decree
against that cast.'' Microsoft, 56 F.3d at 1459. Because the ``court's
authority to review the decree depends entirely on the government's
exercising its prosecutorial discretion by bringing a case in the first
place,'' it follows that ``the court is only authorized to review the
decree itself,'' and not to ``effectively redraft the complaint'' to
inquire into other matters that the United States did not pursue. Id.
at 1459-60.
VIII. Determinative Documents
There are no determinative materials or documents within the
meaning of the APPA that were considered by the United States in
formulating the proposed Final Judgment.
Dated: September --, 2005.
Washington, DC.
Respectfully submitted,
Mark J. Botti,
Chief, Litigation I Section.
-----------------------------------------------------------------------
Weeun Wang,
Ryan Danks,
U.S. Department of Justice, Antitrust Division, Litiation I Section,
1401 H Street, NW., Suite 4000, Washington, DC 20530, 202-307-0001.
Certificate of Service
I hereby certify that I served a copy of the foregoing Competitive
Impact Statement via facsimile and first class United States mail, this
12th day of September, 2005, on: Paul C. Cuomo, Esq., Howrey LLP, 1299
Pennsylvania Avenue, NW., Washington, DC 20004-2402, Fax (202) 383-
6610, Attorney for Defendant PCIC.
/s/--------------------------------------------------------------------
Ryan J. Danks,
Attorney, United States Department of Justice.
[FR Doc. 05-18703 Filed 9-20-05; 8:45 am]
BILLING CODE 4410-11-M