IN THE UNITED STATES DISTRICT COURT
MOTION FOR ENTRY OF JUDGMENT
Plaintiff, having filed its Complaint in the above-captioned case, and having filed this date a Stipulation and proposed Final Judgment, hereby moves this Court for entry of a Final Judgment against Defendants Mahle GmbH, Mahle, Inc. and Mabeg, e.V. (collectively "Mahle") and Defendants Metal Leve, S.A. and Metal Leve, Inc. (collectively "Metal Leve") ("Defendants"). By agreement of the parties, the Final Judgment against the Defendants provides for the payment of a civil penalty totaling $5,602,000 under Section 7A(g)(1) of the Clayton Act, 15 U.S.C. § 18a(g)(1).
STATEMENT OF POINTS AND AUTHORITIES
The Complaint in this action alleges that Defendant Mahle and Defendant Metal Leve, violated Section (a) of Title II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 ("Hart-Scott-Rodino Act" or "Act"), Section 7A of the Clayton Act, 15 U.S.C. § 18a, which requires certain acquiring persons and certain persons whose voting securities or assets are acquired to file notification with the Federal Trade Commission and the Department of Justice and to observe a waiting period before consummating certain acquisitions of voting securities or assets.
The Complaint specifically alleges that Defendant Mahle and Defendant Metal Leve were in continuous violation of the HSR Act each day at least for the period beginning on June 26, 1996, and ending on March 20, 1997. Section (g)(1) of the Hart-Scott-Rodino Act, Section 7A(g)(1) of the Clayton Act, 15 U.S.C. § 18a(g)(1), provides that any person who fails to comply with the Act shall be liable to the United States for a civil penalty of not more than $10,000 for each day during which such person is in violation of the Act. This amount was increased to a maximum civil penalty of $11,000 per day for violations on or after November 20, 1996, pursuant to the Debt Collection Act of 1996, Pub. L. 104-134 § 31001(s) (amending the Federal Civil Penalties Inflation Adjustment Act of 1990, 28 U.S.C. § 2461), and FTC Rule 1.98, 16 C.F.R. § 1.98, 61 Fed. Reg. 54549 (Oct. 21, 1996). Accordingly, the Complaint seeks "an appropriate civil penalty." As the Stipulation and proposed Final Judgment indicate, Defendant Mahle and Defendant Metal Leve have each agreed to pay $2,801,000 within 30 days of entry of the Final Judgment. The combined civil penalties for both Defendants total $5,602,000.(1)
The United States does not believe that the procedures of the Antitrust Procedures and Penalties Act ("APPA"), 15 U.S.C. § 16 (b)-(h), are required in this action. The APPA requires that any proposal for a "consent judgment" submitted by the United States in a civil case filed "under the antitrust laws" be filed with the court at least 60 days in advance of its effective date, published in the Federal Register and a newspaper for public comment, and reviewed by the court for the purpose of determining whether it is in the public interest. Key features of the APPA are preparation by the United States of a "competitive impact statement" explaining the proceeding and the proposed judgment, and the consideration by the court of the proposed judgment's competitive impact and its impact on the public generally as well as individuals alleging specific injury from the violation set forth in the Complaint.
The procedures of the APPA are not required in this action because the Complaint seeks, and the Final Judgment provides for, only the payment of civil penalties. A consent judgment in a case seeking only monetary penalties is not the type of "consent judgment" Congress had in mind when it passed the APPA. Civil penalties are intended to penalize the defendant for violating the law, and, unlike injunctive relief, have no "competitive impact," and no effect on other persons or on the public generally, within the context of the APPA. The legislative history of the APPA does not contain any indication that Congress intended to subject settlements of civil penalty actions to its competitive impact review procedures.
Thus, courts to date have not required use of APPA procedures in cases involving only the payment of civil penalties. Indeed, courts in this District have consistently entered consent judgments for civil penalties under the Hart-Scott-Rodino Act without employing APPA procedures.(2) Previously, in United States v. ARA Services, Inc., 1979-2 CCH Trade Cases ¶ 62,861 (E.D. Mo.), a consent judgment calling for both equitable relief and civil penalties was approved by the court on August 14, 1979, after the United States had taken the position in APPA proceedings that the civil penalties component of that judgment was not open to public objection. See 44 Fed. Reg. 41583 (July 17, 1979).(3) There are no circumstances favoring the use of APPA procedures in this case.
For the above reasons, the United States asks the Court to enter the Final Judgment in this case.
Dated: June 19, 1997
M. Howard Morse (D.C. Bar No. 384793)
1. The Stipulation, attached hereto (Attachment A), provides that maximum civil penalties accrue from June 26, 1996 "through the date of the filing by Defendants of an application to divest with the Federal Trade Commission pursuant to the Agreement Containing Consent Order In the Matter of Mahle GmbH (Federal Trade Commission File No. 961-0085) and pursuant to the Federal Trade Commission rule 2.41(f), 16 C.F.R. § 2.41(f), which application to divest is subsequently approved by the Federal Trade Commission and pursuant to which application to divest the divestiture proposed in the application is accomplished as approved by the Federal Trade Commission." (Stipulation at 1.b.i-ii.) The civil penalty of $5,602,000 represents the maximum amount of civil penalties of $10,000 a day from June 26, 1996, through November 19, 1996 plus $11,000 a day from November 20, 1996, through March 20, 1997, the date the Defendants filed their Application for Approval of Divestiture. The application was approved by the Federal Trade Commission on June 4, 1997. See June 4, 1997 letter from Donald S. Clark, Secretary Federal Trade Commission, to Deborah L. Feinstein, counsel for Defendants (Attachment B). Counsel for Defendants represented to plaintiff that the divestiture was accomplished as approved on June 17, 1997 and acknowledged that the stipulated civil penalties total $2,801,000 for each of Mahle and Metal Leve. See June 17, 1997 letter from Deborah L. Feinstein to Robert N. Cook (Attachment C).
2. See, e.g., United States v. Figgie Int'l, Inc., 1997-1 CCH Trade Cases ¶ 71,766 February 18, 1997 (D.D.C.); United States v. Foodmaker, Inc., Civil Action No. 96-1879, August 26, 1996 (D.D.C.); United States v. Titan Wheel International, Inc., Civil Action No. 96-1040, May 10, 1996 (D.D.C.); United States v. Automatic Data Processing, Inc., Civil Action No. 96-0606, April 10, 1996 (D.D.C.); United States v. Sara Lee Corporation, Civil Action No. 96-0196, February 9, 1996 (D.D.C.); United States v. Pennzoil Company, 1994-2 CCH Trade Cases ¶ 70,760 (D.D.C.); United States v. Atlantic Richfield Company, 1992-1 CCH Trade Cases ¶ 69,695 (D.D.C.); United States v. Aero Limited Partnership, 1991-1 CCH Trade Cases ¶ 69,451 (D.D.C.); United States v. Atlantic Richfield Company, 1991-1 CCH Trade Cases ¶ 69,318 (D.D.C.); United States v. Equity Group Holdings, 1991-1 CCH Trade Cases ¶ 69,320 (D.D.C.); United States v. Service Corporation International, 1991-1 CCH Trade Cases ¶ 69,290 (D.D.C.); United States v. Reliance Group Holdings, Inc., 1990-2 CCH Trade Cases ¶ 69,428 (D.D.C.); United States v. Baker Hughes, Inc., 1990-1 CCH Trade Cases ¶ 68,976 (D.D.C.); United States v. Tengelmann-Warenhandelsgesellschaft, 1989-1 CCH Trade Cases ¶ 68,623 (D.D.C.); United States v. Lonrho, PLC, 1988-2 CCH Trade Cases, ¶ 68,232 (D.D.C.); United States v. Roscoe Moss Corp., 1988-1 CCH ¶ 68,040 (D.D.C.); United States v. Trump, 1988-1 CCH Trade Cases ¶ 67,968 (D.D.C.); United States v. First City Financial Corp., Ltd., 1988-1 CCH Trade Cases ¶ 67,967 (D.D.C.); United States v. Wickes Companies, Inc., 1988-1 CCH Trade Cases ¶ 67,966 (D.D.C.). In each case, the United States noted the issue in a motion for entry of judgment, explaining to the court that it believed the APPA inapplicable.
3. In the first case brought under the Hart-Scott-Rodino Act, United States v. Coastal Corp., 1985-1 CCH Trade Case ¶ 66,425 (D.D.C.), the United States -- noting its view that the APPA was not applicable -- chose to employ the APPA procedures, believing that those procedures would in that particular case help describe to the public the circumstances and events that gave rise to the complaint and final judgment. 49 Fed. 36455 (Sept. 17, 1984). In one other civil penalties case under the Hart-Scott-Rodino Act, the APPA procedures were followed. In United States v. Bell Resources Ltd., 1986-2 CCH Trade Cases ¶ 67,321 (S.D.N.Y.), the complaint sought injunctive relief in addition to civil penalties.