Understandably, many states would rather not have to prosecute their claims alongside private litigants in a court that might be outside of their home state. States also worry that transfer to a federal MDL will slow down their individual litigation. To that end, in a June 2021 letter from the National Association of Attorneys General (NAAG) to the leaders of the congressional committees with jurisdiction over antitrust matters, 52 AGs (including those from the District of Columbia, Guam, the Northern Marina Islands, and Puerto Rico) expressed their support for H.R. 3460 and S. 1787 and called for passage of the Act, urging Congress to provide states with the same carveout from MDL transfer and consolidation already enjoyed by the federal government.¹

The Administrative Office of the United States Courts (AOUSC), the government agency responsible for supporting the federal courts, took a position on the Act that was in stark contrast to that of the AGs. In a July 19, 2021, letter to House Minority Leader Kevin McCarthy, the AOUSC’s director provided a laundry list of concerns with a law that would restrict the federal courts’ ability to centralize antitrust actions brought by states. In describing the importance of the federal courts’ practice of jointly adjudicating antitrust claims brought by states and private litigants, the AOUSC director emphasized that states are similarly situated to private litigants in federal antitrust litigation given the types of direct and indirect injury claims they both can uniquely raise. The director made clear that the AOUSC felt that the Act could lead to “inconsistent rulings [that] may complicate proceedings and sow confusion not only among the courts and parties, but also in the marketplace.”

While states many times have good reason to collaborate and combine resources – and often do so in complex litigation – potentially divergent interests among the states can hamper such efforts and thus cannot necessarily be relied upon by defendants. To that end, the AOUSC director’s letter notes that “[c]ollaboration between private plaintiffs and State Attorneys General also may be reduced, particularly if the States retain outside counsel to prosecute their antitrust claims. Such counsel may have attorneys’ fees or other incentives inconsistent with close coordination with the MDL.” This letter, from an otherwise under-the-radar agency responsible for administration of the federal courts, drew a strongly worded response from the Act’s congressional sponsors.²

Potential implications of the Act

If passed, the current version State Antitrust Enforcement Venue Act could undermine what Congress originally intended to avoid by including the provisions of section 1407 at issue in the first place: a situation where multiple states are litigating the same or similar antitrust claims against any one defendant in courts all over the country, resulting in an inefficient use of judicial time and resources, as well as possibly leading to inconsistent results. The legislative history behind section 1407(h), makes clear that lawmakers were concerned about the possibility that businesses could face 50 different lawsuits in 50 different states and actually expressed their belief that it would be unfair to make them do so.³

States, though, are not completely at the jurisdictional mercy of antitrust defendants under the current section 1407 regime. For starters, antitrust claims brought by states solely under state law would not be subject to federal MDL transfer or consolidation. Without raising a federal antitrust cause of action, removal would not be viable on subject matter jurisdiction grounds.⁴ This might be one reason that, in the District of Columbia’s May 2021 antitrust action filed against a major online platform, the District only alleged violations of the D.C. Code, not of federal antitrust law.⁵

In addition to states having control over their own pleadings, federal district court judges have significant discretion over whether or not to transfer or consolidate actions into an MDL. A district court judge, often located in the same state as the AG, would very likely be reticent to send an AG to a far-flung MDL court without careful consideration and a determination of there being a substantial probability of judicial economy and efficiency. This tension has been at the heart of a jurisdictional fight currently playing out in multistate antitrust litigation led by the state of Texas against a major search engine company over the company’s online display advertising. In May, a federal district court judge in Texas denied the search engine’s motion to transfer the litigation to the Northern District of California. But, in August, the JPML ordered the litigation to be consolidated with similar litigation in the Southern District of New York.⁶

Why it matters

With Congress now back from its August recess, conversations on Capitol Hill around federal antitrust reforms will likely resume. While many pieces of proposed antitrust reform legislation are unlikely to be advanced in the legislative process, a simple piece of legislation with bipartisan support, like the State Antitrust Enforcement Venue Act, could become a vehicle for an easy consensus “win” for lawmakers. In addition to what appears to be a genuine bipartisan appetite for changes to antitrust law that embolden enforcers to go after “Big Tech,” in-state pressure from AGs who want to expand their own antitrust enforcement position could be a significant motivating factor for federal lawmakers to support a law like the State Antitrust Enforcement Venue Act.

States are increasingly placing themselves at the forefront of national antitrust litigation. That trend shows no signs of abating, as evidenced by a majority of states recently requesting federal appropriations to fund the expansion of their antitrust enforcement capabilities.⁷ If they have not already done so, companies should assess what a new state antitrust litigation paradigm could look like under the State Antitrust Enforcement Venue Act. Businesses should be prepared for potential scenarios where they are required to litigate similar antitrust claims brought by the federal government, state AGs, and private litigants over the same underlying issues, in multiple venues. Companies might also assess their working relationships with specific AG offices that could play a constructive role in organizing multistate antitrust litigation. In the interim, or if the pending legislation does not ultimately become law, companies should expect AGs to file complaints asserting only state-based antitrust claims that, without federal causes of action, could avoid transfer to and consolidation with federal MDL proceedings.

1. See National Association of Attorneys General, Press Release and letter (June 18, 2021), www.naag.org. The AGs from Alabama, American Samoa, Arizona, and the U.S. Virgin Islands did not sign on to the letter.
2. See letter from Roslynn Mauskopf, Director of the Administrative Office of the United States Courts to U.S. House Minority Leader Kevin McCarthy (July 19, 2021), www.docketbird.com.
3. Legislative History of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, Pub. L. No. 94-435, 90 Stat. 1383 (1976).
4. See Mississippi ex rel. Hood v. AU Optronics Corp., 571 U.S. 161 (2014) (ruling that states’ parens patriae claims cannot be removed to federal court under the Class Action Fairness Act).
5. Complaint, District of Columbia v. Amazon.com, Inc., No. 2021-CA-001775-B (D.C. Super. Ct. 2021).
6. See Transfer Order, In re Digital Advertising Antitrust Litigation, MDL No. 3010 (Aug. 10, 2021), www.jpml.uscourts.gov.
7. NAAG, Press Release and letter (May 10, 2021), www.naag.org.