7-5.100 Investigations
7-5.200 Standards for Initiating a Preliminary
Inquiry
7-5.210 Making a Request for Preliminary Inquiry
Authority
7-5.220 Federal Trade Commission Clearance
Procedure
7-5.230 Assistance From the Antitrust Division
7-5.300 Antitrust Grand Jury Investigations
7-5.310 Requesting a Grand Jury Investigation
7-5.400 Completing the Investigation and
Recommending Civil or Criminal suits
7-5.410 Preparation of Fact Memorandum
7-5.420 Civil Actions Generally
7-5.500 Procedures for Review of Case
Recommendations
7-5.600 Litigation
7-5.610 Disposition of Antitrust Actions
7-5.611 Plea Agreements
7-5.612 Settlements
7-5.613 Sentencing Recommendations
7-5.620 Appeals
Pursuant to 28 C.F.R. Sec. 0.40(a), the Assistant Attorney General in charge
of the Antitrust Division has supervisory authority over all investigations
involving possible violations of the antitrust laws. When a United States
Attorney wishes to conduct such an investigation, he/she must obtain the approval
of the Antitrust Division before beginning. The initial investigation of a
potential antitrust violation is called a preliminary inquiry.The Antitrust
Division's field office chiefs and their designated liaisons to specific United
States Attorney's offices are the United States Attorney's primary contacts
within the Antitrust Division regarding investigations and litigation.
See USAM 7-3.700. The Division's Deputy
Assistant Attorney General for Criminal Enforcement, Room 3214, Main Justice
(202-514-3543), may also be contacted.
Generally, a preliminary inquiry should be initiated if the facts presented
appear to support a legal theory of an antitrust violation and the investigation
will not duplicate other efforts of the Antitrust Division, the Federal Trade
Commission, or another United States Attorney. (Investigations of suspected
criminal antitrust violations may be initiated, where appropriate, through a
request for grand jury authority rather than through a request to conduct a
preliminary inquiry. See USAM 7-5.310.)
Based on these general guidelines, a request for preliminary inquiry
authority is reviewed, in the case of violations involving mergers and
acquisitions, by the Antitrust Division's Director of Operations, Room 3214, Main
Justice (202-514-3544), and in all other cases by the Antitrust Division's Deputy
Director of Operations, Room 3208, Main Justice (202-514-2562). If the request
meets these standards and clearance is obtained from the Federal Trade
Commission, see USAM 7-5.220, preliminary inquiry
authority is granted.
If a United States Attorney believes that a matter is appropriate for a
preliminary inquiry, a short memorandum (1-3 pages) should be prepared describing
the nature and scope of the suspect activity. The memorandum must contain
sufficient information to permit the Antitrust Division to evaluate the request,
obtain Federal Trade Commission clearance, and determine whether any section or
field office of the Antitrust Division or the Federal Trade Commission is
investigating, or has investigated, the same activity. NOTE: An instruction
sheet for preparing a Memorandum Seeking Preliminary Inquiry Authority is in the
Antitrust Resource Manual at 3. This memorandum
should be addressed to the Director or Deputy Director of Operations, Antitrust
Division, as noted in USAM 7-5.200. Approval,
subject to Federal Trade Commission clearance, should take no more than three
working days and may be expedited when necessary.
All requests to initiate new antitrust investigations must be cleared with
the Bureau of Competition of the Federal Trade Commission, in accordance with a
longstanding inter-agency agreement. The purpose of the inter-agency clearance
is to ensure that the two enforcement agencies, which have concurrent
jurisdiction in certain areas, do not duplicate efforts by conducting similar or
identical investigations. The Office of Operations will arrange to obtain
Federal Trade Commission clearance on behalf of the United States Attorney. An
investigation of criminal conduct, e.g., bid rigging or price fixing, is
invariably and promptly cleared by the Federal Trade Commission.
The discussion of investigating and proving price-fixing and bid-rigging
violations, see USAM 7-4.100, provides a
brief overview of antitrust investigative techniques. In addition, the Antitrust
Division, through its local field offices, see USAM 7-3.700, can provide advice regarding
investigative techniques and evidentiary issues unique to antitrust matters.
The Antitrust Division's Economic Litigation Section, Economic Regulatory
Section or Competition Policy Section, collectively the Economic Analysis Group
or EAG, can also provide economic analysis of particular issues, as well as
statistical assistance, if the investigation requires it, and can serve as, or
obtain, expert witnesses.
Pursuant to 28 C.F.R. Sec. 0.40(a), the Assistant Attorney General in charge
of the Antitrust Division must authorize any grand jury investigation of possible
antitrust violations. Consultation with the Deputy Assistant Attorney General
for Criminal Enforcement or the local field office may be desirable at the time
the United States Attorney's Office is formulating a request for grand jury
authorization.
If, based upon evidence initially presented to the United States Attorney or
at the conclusion of a preliminary inquiry, the United States Attorney believes
that there is sufficient evidence to proceed to the grand jury, the United States
Attorney should request authority to conduct a grand jury investigation from the
Assistant Attorney General in charge of the Antitrust Division. The request for
grand jury authority should be in the form of a brief memorandum sent to the
Deputy Assistant Attorney General for Criminal Enforcement, Room 3214, Main
Justice (202-514-3543) for review. See Antitrust
Resource Manual 4 for instructions on preparing a Memorandum Seeking Grand
Jury Authority. If this grand jury memo initiates the investigation, i.e., if
no preliminary inquiry was required, the Deputy Assistant Attorney General for
Criminal Enforcement will seek Federal Trade Commission clearance based upon the
grand jury request memorandum. The Deputy A
ssistant Attorney General then submits it to the Assistant Attorney General, who
approves or disapproves the request. The United States Attorney is advised
promptly of the decision. This approval process generally takes no more than
three working days, and may be expedited where necessary.
In the course of a grand jury investigation of other criminal conduct, a
United States Attorney often also will develop evidence of antitrust violations.
Such evidence may support either inclusion of antitrust counts in an indictment
charging other crimes or indictment on antitrust charges alone. As soon as such
evidence is identified, the United States Attorney should contact the chief of
the local Antitrust Division field office (or that office's United States
Attorney liaison), or the Deputy Assistant Attorney General for Criminal
Enforcement, to apprise him/her of the possible antitrust violations, and to
determine that no office of the Antitrust Division or the Federal Trade
Commission is investigating the same conduct. Although, under these
circumstances, further development of the evidence regarding the antitrust
violations through the grand jury does not require authorization by the Assistant
Attorney General, subsequent consideration of any proposed antitrust cases or c
ounts may be expedited by keeping the Antitrust Division generally apprised of
antitrust developments.
As the United States Attorney develops evidence that may establish a
violation of the antitrust laws, he/she should begin to determine what count or
counts will be recommended and how the investigation might be concluded. The
Deputy Assistant Attorney General for Criminal Enforcement, field office chiefs
and liasons, and other contacts within the Antitrust Division are available for
consultation in this regard.
Three tasks usually are undertaken at the conclusion of an investigation.
First, the United States Attorney determines whether to proceed with criminal or
civil antitrust charges and selects the defendants to be recommended for
prosecution. Second, the United States Attorney may, at his/her discretion, give
counsel for the potential antitrust defendants an opportunity to present their
views to the prosecutors. Finally, the United States Attorney and the staff
prepare a brief prosecution memorandum and pleadings for the antitrust charges.
See USAM 7-5.410. This fact memorandum
should be received by the Deputy Assistant Attorney General for Criminal
Enforcement if criminal charges are contemplated, or the Director or Deputy
Director of Operations if civil charges are contemplated, at least two weeks
before the case is scheduled to be filed.
Upon receipt of the fact memorandum, the Deputy Assistant Attorney General
for Criminal Enforcement, the Director of Operations, or Deputy Director of
Operations will assess the merits of the antitrust charges. This review will
focus primarily upon whether the facts as set forth meet the legal and policy
requirements for an antitrust violation. Assessment of the weight of the
evidentiary support for the antitrust charges and litigation strategy will be
left to the United States Attorney. The Assistant Attorney General in charge of
the Antitrust Division makes the final decision whether to seek an indictment,
file a civil suit or decline prosecution.
The fact memorandum should be prepared by the United States Attorney's staff
as a brief summary statement of the factual and legal basis for the proposed
charges. See Antitrust Resource Manual at 5 for
instructions on preparing a Criminal Case Fact Memorandum. The purpose of the
fact memorandum is to serve as a vehicle for consideration of the case in the
review process, including identification of any antitrust policy issues that the
case may raise.
The fact memorandum should be prepared after any meetings with defense counsel,
and, if appropriate, allowing the "targets" to appear before the grand jury.
The memorandum should be forwarded to the Antitrust Division accompanied by
all pleadings (indictments, informations or complaints as well as any proposed
plea agreements or consent decrees) in the matter and a draft press release.
Sample pleadings and press releases are available from the Deputy Assistant
Attorney General for Criminal Enforcement, the Office of Operations and from the
field offices.
Civil antitrust actions are usually brought under Sections 1 and 2 of the
Sherman Act (15 U.S.C. Secs. 1 and 2), Section 7 of the Clayton Act (merger
cases) (15 U.S.C. Sec. 18), and Section 4A of the Clayton Act (Federal antitrust
damage actions) (15 U.S.C. Sec. 15a). Few civil actions are initiated by United
States Attorneys. Given the more complex issues of antitrust policy and analysis
involved, civil cases generally rely upon "Rule of Reason" analysis. See
USAM 7-4.100; USAM
7-4.200. Such analysis requires substantial economic input and evaluation.
The Director or Deputy Director of Operations, or the local Antitrust Division
field office, can provide advice to United States Attorneys contemplating the
filing of a civil antitrust action.
After drafting the fact memorandum, pleadings and a press release, the
package is sent to the Deputy Assistant Attorney General for Criminal
Enforcement, or for civil cases to the Director or Deputy Director of Operations,
for review. (As previously noted, sample pleadings and press releases are
available from the Deputy Assistant Attorney General for Criminal Enforcement,
the Office of Operations, and the field offices.)
Upon review, and after consultation with the United States Attorney, the
Deputy Assistant Attorney General for Criminal Enforcement, or the Director or
Deputy Director of Operations, will submit his/her recommendation to the
Assistant Attorney General. This process generally will take no more than ten
working days and may be expedited where necessary. See USAM 7-5.400.
Only in rare circumstances, where significant and novel issues are raised,
will counsel for the potential defendants be provided with an opportunity to meet
with the Assistant Attorney General. Generally, the Deputy Assistant Attorney
General for Criminal Enforcement (or another appropriate Division official in
cases involving civil matters) will meet with counsel for a proposed defendant,
if such a meeting is requested.
The United States Attorney will be informed immediately when a final decision
is made by the Assistant Attorney General. The approval papers, signed
pleadings, and any other additional information that will be required for filing
will be sent to the United States Attorney.
When the case is filed, the United States Attorney's office should
immediately inform the Deputy Assistant Attorney General for Criminal Enforcement
(or for civil cases the Director or Deputy Director of Operations) of that fact
so that he/she may authorize issuance of the press release. The United States
Attorney's office also should inform the Deputy Assistant Attorney General for
Criminal Enforcement (or the Director or Deputy Director of Operations in civil
cases) of the docket number and the judge assigned to the case.
Pursuant to 28 C.F.R. Sec. 0.40(a), the Assistant Attorney General in charge
of the Antitrust Division has supervisory authority over all antitrust suits
brought by the Department. Although the United States Attorney's office handling
a particular case is responsible for all pre-trial and trial activities,
consultation with the Deputy Assistant Attorney General for Criminal Enforcement
in criminal cases, or the Director or Deputy Director of Operations in civil
cases, is required whenever issues of antitrust policy or novel issues of
antitrust law are raised in litigation.
Disposition of a criminal antitrust case by plea or dismissal must be
approved by the Assistant Attorney General in charge of the Antitrust Division
after review by the Deputy Assistant Attorney General for Criminal Enforcement.
Disposition of a civil antitrust action by settlement or dismissal must also be
approved by the Assistant Attorney General in charge of the Antitrust Division
after review by the Director or Deputy Director of Operations. Such approval may
be obtained orally through the Deputy Assistant Attorney General for Criminal
Enforcement or the Director or Deputy Director of Operations.
Plea agreements require the approval of the Assistant Attorney General where
counts are being dismissed, companies are being promised no further prosecution,
or particular sentences are being recommended. The Deputy Assistant Attorney
General for Criminal Enforcement must be advised of any proposed plea agreement
before it is finalized.
Civil settlements require the approval of the Assistant Attorney General
where charges are being dismissed, particular injunctive relief is being
recommended, or a claim for damages is being compromised. Civil antitrust
settlements must also follow the procedures established by the Antitrust
Procedures and Penalties Act. See 15 U.S.C. Secs. 16(b)-(h). The
Director or Deputy Director of Operations must be advised of any proposed civil
settlement before it is finalized.
Sentencing recommendations should be consistent with the U.S. Sentencing
Commission Guidelines for sentencing antitrust violations. USSG ڈR1.1.
Sentencing recommendations must be approved by the Assistant Attorney General,
through the Deputy Assistant Attorney General for Criminal Enforcement, prior to
their submission to the Probation Office.
The Antitrust Division's Appellate Section is responsible for handling all
appeals in antitrust cases. At the conclusion of a case that may involve an
appeal, the United States Attorney should consult with the Division's Appellate
Section through the Deputy Assistant Attorney General for Criminal Enforcement
for criminal cases, or the Director or Deputy Director of Operations for civil
cases.
| October 1997
| USAM Chapter 7-5
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