A group of large corporations is trying to persuade the Senate Judiciary Committee to enact legislation that could save the firms hundreds of millions of dollars by making retroactive a proposed new system for determining antitrust damages.
The campaign has been spearheaded by the Mead Corp., which has been found guilty on price-fixing charges and faces damages that could run as high as $750 million in connection with a huge case known as the Corrugated Container antitrust litigation.
Prominent lawyers representing Mead and several other corporations with pending cases have been bombarding Judiciary Committee members with arguments to amend a proposed antitrust bill in a way that could reduce their liabilities.
"I can't recall seeing this many blue-chip lawyers involved in anything short of a bar association convention," one veteran Senate aide said.
The issue will be considered by the Senate committee tomorrow when it takes up S. 995, the Antitrust Equal Enforcement Act of 1981. No senator has publicly said he would try to amend the measure to include the retroactivity provision, but at least one reportedly is considering doing so.
The bill itself has some opposition. Introduced by Sen. Strom Thurmond (R-S.C.), and backed by Sens. Max Baucus (D-Mont.), Dennis DeConcini (D-Ariz.), Howell Heflin (D-Ala.), and Paul Laxalt (R-Nev.), the bill would revise the methods used for dividing damages among defendants in civil antitrust suits. In current form the bill would apply to cases started after it becomes law.
Individual price-fixers would be permitted to spread costs of antitrust judgments among all companies involved in a conspiracy and would be allowed to sue other defendants to obtain a "contribution" to a court judgment, a method to force conspirators to pay their proportional share of the total liability.
According to Sen. Howard Metzenbaum (D-Ohio), the bill would undermine antitrust enforcement "by making settlements more difficult for plaintiffs to achieve" and by making antitrust litigation more complex. The National Association of Attorneys General is also opposed the bill, but most observers think its passage is likely.
Assistant Attorney General for Antitrust William F. Baxter said recently that the administration favored expanding the bill beyond price fixing to antitrust violations in general, and is preparing legislation to accomplish that.
But Baxter refuses to take a position on the retroactivity question, as has the U.S. Chamber of Commerce, which, along with the American Bar Association Antitrust Section, the Business Roundtable and other business groups, supports the legislation.
Baxter calls the retroactivity matter "a highly controversial, judgmental political problem."
But prominent lawyers are lobbying heavily for the retroactivity provision.
Representing Mead Corp., the Dayton, Ohio, paper products and printing company with sales of about $2.5 billion, is Alan Wiseman of the Washington firm of Howrey & Simon, who called retroactivity fair and "constitutionally sound."
"To delay corrective legislation by making it applicable only to future cases is unnecessary and unfair, especially when the abuses S. 995 is designed to remedy are widespread in pending cases," Wiseman argued.
The corrugated paper case was a class action involving 37 defendants and over 200,000 plaintiffs who sued the paper products manufacturers for price fixing. Thirty six defendants settled out of court for payments totaling $320 million, now worth over $400 million with interest added.
But Mead elected to go to trial and a year ago lost a jury verdict and is awaiting a court judgment on damages. If the legislation were made retroactive, Mead could reduce or potentially eliminate the penalties it may face by revising the basic damages formula, based largely on market share, that led the other companies accused in the suit to settle the claims against them.
Arguing against the anttitrust law changes, Stephen D. Susman, chairman of a committee representing plaintiffs in the corrugated container case, wrote to Thurmond that "S. 995 is the worst type of special interest legislation.
"Retroactive application of special interest legislation to protect a known price-fixer would scandalously compromise the integrity of the legislative process. It would usurp the role of a jury that labored long and hard to arrive at a fair result," Susman wrote.
Defendants in two other antitrust cases are also pushing for retroactivity, however: Georgia-Pacific Corp., Weyerhauser Co. and Willamette Industries Inc., involved in a suit against plywood manufacturers, and Milliken & Co., accused in a price-fixing conspiracy case in the textile industry.
Milliken and Georgia-Pacific have retained Robert H. Bork, former U.S. solicitor general and now a member of the Washington office of Kirkland & Ellis, who argued in a letter to senators that the change in law "would not complicate a pending case any more than it would complicate future cases.
"If that complication is a price worth paying for equity and justice in future litigation, it is worth paying in present litigation."
Former Attorney General Griffin Bell has also been arguing Mead's position, while noted New York antitrust lawyer Ira Millstein and former Carter administration domestic policy adviser Stuart Eizenstat are representing opponents of the retroactivity proposal.
Noted constitutional scholar Charles Alan Wright of the University of Texas Law School disagrees with the Bork position. In a letter prepared at the request of lawyers representing International Paper Co., Wright said that "what seems 'clear' to Bork, seems fraught with doubt and uncertainty to me."