Jeffrey Jacobovitz Participates in Panel Entitled, "Discovery Nuances Abound in Parallel Criminal and Civil Matters"

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June 24, 2013

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District of Columbia

Complex issues that arise out of parallel antitrust civil litigation and criminal investigations were debated among attorneys who represent plaintiffs, defendants, and the government in a panel discussion in Washington DC today.

While civil litigation plaintiffs do not like to have their cases delayed when the Department of Justice (DoJ) initiates a criminal investigation, working with the agency can be beneficial to plaintiffs according to Barbara Hart, Chief Operating Officer of Lowey Dannenberg Cohen & Hart. She said she believes that plaintiffs’ counsel should not try to “reinvent the wheel” by attempting to go it alone, but instead, she advised that they take advantage of the DoJ’s legwork; even sitting down alongside the government at depositions should they be permitted.

“Letting other people do your work for you” is enticing said Hart, but she warned that if plaintiffs’ counsel later reach the settlement table and “haven’t done [their] homework”, they may have trouble finding clients.

An “ongoing dialogue” between the plaintiffs and the enforcer is in everyone’s interest, according to Katie Hellings, Assistant Chief of the DoJ Antitrust Division’s National Criminal Enforcement Section as she mentioned the agency’s desire to minimize its intervention. A stay or pause in the civil case is almost always sought by the DoJ and granted by judges. Hellings noted that a stay is not forever, but the government will ask for whatever is necessary to protect their grand jury investigation.

It does not take much for a judge to allow a stay said Baker & McKenzie partner Doug Tween, but he cautioned against any overreaching by the DoJ and cited a recent example of an impatient judge in New York refusing a stay request by the Securities and Exchange Commission in a similar type case.

Hellings also called attention to some of the extra ‘tools’ the DoJ has that civil litigants do not; among them are search warrants, extradition treaties, and leniency applications. “The defendant is not required to cooperate with civil litigants” as part of their leniency agreement with the DoJ said Hellings, but Hart argued a different interpretation of the law. Those who sign a leniency agreement with the DoJ must “stand naked before the world” and “tell everything [they] know that is relevant”, and leaving out any information, whether or not related specifically to the government’s case, would be a breach of the leniency agreement.

As more and more national competition authorities seek to rein-in international cartels, Tween warned companies of a “death by a thousand cuts” as each authority imposes its own penalty. Panel moderator and partner at Arnall Golden Gregory, Jeffrey Jacobovitz questioned if plaintiffs were worried about being the last ones to get their piece of the pie and their ability to collect damages. Defendants claiming they have already paid the government is a common defense argument noted Hart, but it is “not going to win the day”, and she could not recall having seen a case where the DoJ had vanquished defendants ability to pay civil litigants.

Another layer of complexity is introduced when such foreign national authorities launch investigations said James Cooper, a partner at Arnold & Porter. Tween warned defendants of transferring documents to the US even for attorney review because that might place the files within the DoJ’s subpoena grasp. He recommended advising clients not to move documents from their jurisdiction once an investigation is apparent in order to avoid subpoenas or possible obstruction charges.

The DoJ has ways of obtaining foreign documents and frequently cooperates with foreign agencies, said Hellings.

by J.T. Kohrs in Washington DC