Leniency Applications and Limited Liability Under ACPERA

Aaron Gott

Of Counsel, Bona Law PC

Author: Jon Cieslak

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I recently wrote about the DOJ Antitrust Division’s Leniency Program, and the benefits it can provide to a company engaged in criminal antitrust conduct. Those benefits can extend beyond a company’s immunity agreement with the DOJ to the civil litigation that frequently follows a DOJ investigation. The civil law benefits of a successful leniency application are provided by the Antitrust Criminal Penalty Enhancement and Reform Act, Pub. L. No. 108-237, § 213(a)-(b), 118 Stat. 665, 66-67 (2004), commonly referred to by its acronym, ACPERA.

Originally passed in 2004, and made permanent by Congress in 2020, ACPERA provides additional incentives for companies engaged in criminal antitrust conduct to participate in the Leniency Program. ACPERA does so by altering the damages that can be recovered from a successful leniency applicant in two ways:

  1. it limits damages to the “actual” damages suffered by the plaintiffs, as opposed to the treble damages permitted by the Sherman Act; and
  2. it limits damages to those “attributable to the commerce done by the applicant,” rather than the commerce done by all defendants that joint-and-several liability makes relevant.

Combined, these alterations have an enormous effect on a company’s theoretical exposure. Consider a hypothetical cartel case where class plaintiffs prove that five defendants caused $1 billion in damages. Applying the Sherman Act’s trebled damages and joint-and-several liability, each defendant is theoretically liable for up to $3 billion (though that number will be reduced by the amounts paid by co-defendants). Now, imagine that one of the defendants was a successful leniency applicant and had a 20% market share. Under ACPERA, that defendant’s maximum exposure is reduced from $3 billion to just $200 million – a 93% reduction. In practical terms, the exposure reduction is significantly less when settlements and/or judgments against co-defendants are factored in, but it is still substantial.

ACPERA’s benefits, however, are not automatic for a successful leniency applicant. Rather, the company must also provide “satisfactory cooperation” to the plaintiff in the civil litigation, as determined by the court. So what does it mean to provide “satisfactory cooperation”? ACPERA imposes three requirements:

  1. providing “a full account to the claimant of all facts known to the applicant or cooperating individual, as the case may be, that are potentially relevant to the civil action;”
  2. “furnishing all documents or other items potentially relevant to the civil action that are in the possession, custody or control of the applicant or cooperating individual;” and
  3. “using its best efforts to secure and facilitate [cooperation] from cooperating individuals covered by the agreement.”

But what does that really mean? What qualifies as a “full account” of all “potentially relevant” facts? What does it mean to furnish all “potentially relevant” documents? What qualifies as “best efforts” to facilitate cooperation from individuals? No one really knows. To date, only one court has made a finding about whether a leniency applicant provided “satisfactory cooperation” to the civil plaintiffs. But even that case, In re Sulfuric Acid Antitrust Litigation, 231 F.R.D. 320 (N.D. Ill. 2005), provides little guidance because both plaintiffs and the leniency applicant agreed that the cooperation was satisfactory. Several other cases have addressed “satisfactory cooperation” obliquely—finding that it’s not relevant to class certification and it does not require an applicant to identify itself to plaintiffs at the outset of litigation—but have not made actual rulings on whether a leniency applicant meets the standard.

The dearth of case law on “satisfactory cooperation” stems from the nature in which the vast majority of antitrust cases are resolved: settlement. Leniency applicants—like most defendants—are generally settling their civil liability, eliminating the need for court rulings. Of course, given ACPERA’s protections, leniency applicants are generally obtaining more favorable settlements. So when considering whether to seek leniency from the DOJ, companies involved in criminal antitrust conduct should weigh the potential benefits of ACPERA as well.


Contributing Advisors

Jarod Bona

Partner, Bona Law PC