ACPERA- Emerging Guidance and New Questions

ACPERA- Emerging Guidance and New Questions
by Kristen G. Marttila
Lockridge Grindal Nauen PLLP

The Antitrust Division of the Department of Justice has maintained a leniency program since 1978, through which those who cooperate with federal antitrust investigators (“leniency applicants”) can avoid criminal penalties.[1]  But before 2004, conspirators still faced a significant disincentive for cooperating with investigators: in any related civil litigation, a leniency applicant, like any other conspirator, would remain jointly and severally liable for treble damages resulting from the conspiracy.[2] 

Congress passed the Antitrust Criminal Penalty Enhancement and Reform Act of 2004 (“ACPERA”)[3] to provide increased incentives for antitrust whistleblowers.[4]  Under ACPERA, a civil defendant that has received criminal leniency from the Antitrust Division may, in a related civil antitrust action, limit its liability to single damages without joint and several liability, but only if it “has provided satisfactory cooperation to” the civil plaintiffs. [5]  In 2010, Congress amended ACPERA and extended the statute into 2020.[6] 

Though few cases have explored ACPERA’s contours, it is clear that ACPERA presents a critical strategic choice for defendants, and significant opportunities for plaintiffs and defendants alike.

What Is Satisfactory Cooperation?
“Satisfactory cooperation” involves far more than mere compliance with a defendant’s discovery obligations.[7]  Defendants must, at minimum, provide plaintiffs with “a full account” of all facts, as well as all documents or other items in the defendant’s possession, custody, or control, that are “potentially relevant to the civil action.”[8]  “ACPERA’s ‘use of the term ‘potentially relevant’ is intended to preclude a parsimonious view of the facts or documents” that must be produced.[9]  In addition, defendants seeking ACPERA protection must make themselves available for – and provide complete, truthful answers at – interviews, depositions, and trial.[10] 

Furthermore, ACPERA cooperation can be satisfactory only if it begins early in the civil litigation.[11]  Since at least 2010, when Congress amended ACPERA, courts have been explicitly required to consider the timeliness of an ACPERA applicant’s cooperation with civil plaintiffs.[12]  But even before the 2010 amendments, courts could consider the timeliness of a defendant’s cooperation in the civil suit, for at least two reasons.

First, the statutorily listed considerations are not exhaustive: even as originally enacted, Congress defined “satisfactory cooperation” to “include” – and not be limited to – providing facts, documents, and witnesses.  Thus, courts have always enjoyed the discretion to consider timeliness in determining ACPERA eligibility. 

Second, Congress intended from ACPERA’s inception that a leniency applicant must begin cooperating with an antitrust conspiracy’s “victims as they prepare and pursue their civil lawsuit.”[13]  As one pre-2010 decision acknowledged, “the value of an applicant’s cooperation diminishes with time.”[14]  Thus, where a defendant delays cooperation, it risks forfeiting ACPERA eligibility, no matter what cooperation it later provides.

Who Invokes ACPERA?
A co-conspirator who receives leniency from the Antitrust Division is not required to cooperate with civil plaintiffs.  Deciding whether, when, and how to cooperate with civil plaintiffs is a strategic matter for the leniency applicant.[15]  ACPERA does not permit a Court to force a leniency applicant to identify itself to plaintiffs or to provide any particular cooperation.[16] 

Indeed, some defendants who might otherwise qualify for ACPERA protection “determine that it is in their best interest to wait to provide cooperation — and accept the possibility of paying treble damages — before divulging incriminating information to plaintiffs.”[17]  For example, a defendant that thinks it can win dismissal, or for other reasons evaluates its risk of civil damages as relatively low, may reasonably decide to lie in the weeds rather than claiming ACPERA protection by providing timely, fulsome cooperation to plaintiffs.[18] 

An early, strategic decision to delay ACPERA cooperation carries consequences.  As litigation progresses without ACPERA cooperation, plaintiffs must increasingly shoulder costs that could have been lessened or avoided through cooperation.[19]  Such costs may include, for example, defending against motions to dismiss brought by the leniency applicant, investigating facts needed to successfully amend a complaint, agreeing to low-dollar icebreaker settlements in exchange for information from non-leniency-applicant defendants, or engaging in costly discovery and associated motion practice to gain access to evidence that would otherwise have been voluntarily provided via cooperation.  A court may consider such added expenses in determining whether delayed cooperation could nevertheless be “satisfactory.”[20]

Who Decides If Cooperation Is Satisfactory?
The court bears the responsibility of determining whether a leniency applicant has earned ACPERA’s protection, and implicitly possesses the ability to make any fact determinations necessary in that regard.[21]  One court recently held that this statutory duty precludes any reliance on an agreement by counsel that cooperation was satisfactory, and requires the court to make its own independent assessment of any cooperation.[22]  Before making that determination, however, the court must consider “any appropriate pleadings from” the plaintiffs regarding the adequacy of any cooperation.[23]   

When Is ACPERA Eligibility Determined?
Because the decision of whether to seek ACPERA protection is a strategic choice for defendants, a Court may assess the sufficiency of a defendant’s cooperation only after that defendant has invoked ACPERA’s protection.[24]  Apart from that common-sense limitation, though, ACPERA does not prescribe one single, appropriate time for the Court to determine ACPERA eligibility, and no clear answer has emerged from the case law thus far. 

The appropriate timing may vary case by case.  Though some courts have suggested in dicta that an ACPERA determination is never appropriate before determining liability or damages,[25] where a defendant invokes ACPERA protection early – for example, by pleading it as an affirmative defense – and a defendant fails to begin cooperating in a timely manner, ACPERA does not require a court to wait until the conclusion of a case before entering an order that the defendant has forfeited ACPERA benefits.[26] 

But the reverse is not true: a defendant is never entitled to an early ruling that it has earned to ACPERA benefits, even if it begins cooperating promptly and fully.  Because satisfactory cooperation necessarily must be assessed over the entire course of the lawsuit – for example, ACPERA explicitly requires defendants to make witnesses available and provide truthful, non-evasive testimony even through trial, if necessary[27] – a defendant affirmatively seeking a ruling that it is entitled to ACPERA benefits must wait at least until the case has been resolved on its merits.[28]

Where an early ruling is possible, the clarity it provides will assist both sides to assess the strength of their claims prior to trial, propose relevant jury instructions or verdict forms, and, potentially, settle their claims.  

Case law applying ACPERA is still somewhat sparse. But given the statute’s potentially significant implications for both defendants and plaintiffs, courts no doubt will have ample opportunity to explore what constitutes satisfactory cooperation, and when such a determination is appropriate.

-Kristen Marttila is an associate at Lockridge Grindal Nauen PLLP in Minneapolis. She represents plaintiffs in antitrust and other complex cases nationwide. 


[1] U.S. Gov’t Accountability Office, GAO-11-619, CRIMINAL CARTEL ENFORCEMENT: STAKEHOLDER VIEWS ON IMPACT OF 2004 ANTITRUST REFORM ARE MIXED, BUT SUPPORT WHISTLEBLOWER PROTECTION 7 (July 2011), available at http://www.gao.gov/assets/330/321794.pdf (last visited Nov. 7, 2014) (hereinafter “GAO Report”).

[2] Id. at 2. 

[3] Pub. L. No. 108-237, § 213(a)-(b), 118 Stat. 661, 666-668 (June 22, 2004).

[4] Oracle Am., Inc. v. Micron Tech., Inc., 817 F. Supp. 2d 1128, 1132 (N.D. Cal. 2011) (quoting 150 Cong. Rec. S3613 (2004) (statement of Sen. Hatch). 

[5] Pub. L. No. 108-237, § 213(a)-(b), 118 Stat. 661, 666-668 (June 22, 2004), as amended by Pub. L. No. 111-190, 124 Stat. 1275 (June 9, 2010), codified as amended at 15 U.S.C. § 1 note (“ACPERA”)

[6] Pub. L. No. 111-190, § 3, 124 Stat. 1275 (June 9, 2010).

[7] In re Aftermarket Automotive Lighting Prods. Antitrust Litig., 2013 WL 4536569, *4 (C.D. Cal. Aug. 26, 2013).

[8] ACPERA § 213(a)-(b) (emphasis added).

[9] In re Aftermarket Automotive Lighting Prods. Antitrust Litig., 2013 U.S. Dist. LEXIS 125287 (C.D. Cal. Aug. 26, 2013) (quoting 150 Cong. Rec. H 3658 (June 2, 2004) (remarks of Rep. Sensenbrenner).

[10]  ACPERA § 213(a)-(b).

[11] ACPERA § 213(c); Oracle, 817 F. Supp. 2d at 1133 (quoting 150 Cong. Rec. S3614). 

[12] Pub. L. No. 111-190, § 3, 124 Stat. 1275 (June 9, 2010).

[13] 150 Cong. Rec. 3614 (statement of Sen. Hatch) (emphasis added).  See also 150 Cong. Rec. S3614 (statement of Sen. Hatch) (“Importantly, this limitation on damages is only to corporations and executives if they provide adequate and timely cooperation to . . . private plaintiffs.”); 150 Cong. Rec. H3659 (statement of Rep. Scott); 150 Cong. Rec. H3659 (statement of Rep. Conyers). 

[14] In re TFT-LCD (Flat Panel) Antitrust Litig., 618 F. Supp. 2d 1194, 1196 (N.D. Cal. 2009).  

[15] In re TFT-LCD, 618 F. Supp. 2d at 1195.

[16] Id.  

[17] GAO Report at 31. 

[18] Id

[19] In re TFT-LCD, 618 F. Supp. 2d at 1196.

[20] Id.

[21] ACPERA § 213(b). 

[22] In re Polyurethane Foam Antitrust Litig., 2014 U.S. Dist. LEXIS 161020, at *196-97 (N.D. Ohio 2014)

[23] Id.

[24] In re TFT-LCD (Flat Panel) Antitrust Litig., 618 F. Supp. 2d 1194, 1195 (N.D. Cal. 2009). 

[25] In re TFT-LCD (Flat Panel), 618 F. Supp. 2d at 1195-96; Oracle, 817 F. Supp. 2d at 1133.

[26] In re Aftermarket Automotive Lighting Prods. Antitrust Litig. (“In re Auto Lights”), 2103 WL 4536569 (finding, before summary judgment motions were argued, that the leniency applicant forfeited its ACPERA eligibility based on conduct early in the civil litigation). 

[27] ACPERA § 213(b).

[28] In re Polyurethane Foam Antitrust Litig., 2014 U.S. Dist. LEXIS 161020, at *196-97 (N.D. Ohio 2014) (declining to definitively assess or even make “an informed guess” regarding ACPERA eligibility at class certification and disagreeing with defendant’s contention that such a preliminary determination was necessary to determine whether common issues will predominate in assessing damages).

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