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December 22, 2022

Venue Changes for State Antitrust Enforcement

The $1.7 trillion government-wide omnibus spending bill announced by Congress on Tuesday incorporates a provision, entitled the State Antitrust Enforcement Venue Act (“the State AG Venue Act”), which could significantly alter the antitrust litigation landscape for companies.  The State AG Venue Act, which passed in the Senate in June, will help ensure that state attorneys general have their pick of venue to pursue antitrust enforcement cases.  This exposes defendants to the risk of duplicative litigation across several districts.

The current law permits the Judicial Panel on Multidistrict Litigation to consolidate multiple cases that have one or more common question of law or fact into a single district for litigation, with an exception for cases brought by the federal government.  The State AG Venue Act, which marks the only substantive antitrust reform passed by this Congress, extends that exception to antitrust cases brought by state attorneys general.  Thus, the legislation would exempt states from having their cases consolidated and transferred over their objections.

This change will likely result in increased disadvantages for antitrust defendants, particularly large companies that face multiple simultaneous cases in different courts.  These companies may face heightened legal costs resulting from dispersed litigation from the federal government, private parties, and multiple states.  Meanwhile, state attorneys general will gain the right to litigate in their home districts, where they hold a home-court advantage.

States have shown increased willingness to bring cases alone, without the aid of the federal agencies, and the State AG Venue Act may further embolden aggressive antitrust enforcement.  For example, New York Attorney General Letitia James filed a lawsuit against CVS for alleged tying (albeit in state court).  As James Donohue III, Special Counsel to the Attorney General of Pennsylvania has stated, “[Y]ou can expect the [attorneys general] to vigorously enforce the antitrust laws to protect their interests.”1Leah Nylen, States to Keep Policing Mergers with Impact on Consumers, State Bottom Line, Pennsylvania Official Says, Mlex (Apr. 4, 2017),  The National Association of Attorneys General applauded the State AG Venue Act for helping states to “actively [pursue] significant antitrust enforcement actions” and granting states “equal footing” with the federal government in their enforcement efforts.2Support for the State Antitrust Enforcement Venue Act of 2021, National Association of Attorneys General (June 18, 2021),  The State AG Venue Act will give these eager players greater tools, and it will foster even more litigation.