The opinion of the court was delivered by: GREENE
In this proceeding under the Tunney Act, 15 U.S.C. § 16(b)-(h), the Court must determine whether the entry of a consent decree, terminating an antitrust action brought by the United States, is in the public interest.
The government's complaint, filed July 14, 1979, alleged that the National Association of Broadcasters (NAB) violated Section 1 of the Sherman Act, 15 U.S.C. § 1, by its adoption and enforcement of certain Advertising Standards that regulated television advertising. The advertising provisions were part of NAB's Television Code, subscribed to by most of the nation's commercial television stations.
After the filing of the complaint, both parties moved for summary judgment. On March 3, 1982, on the basis of the parties' written submissions and after oral argument, the Court found one of the three sets of Advertising Standards challenged by the government to be unlawful per se. These provisions restricted the number of products an advertiser could promote in a commercial lasting over sixty seconds.
The validity of the remaining provisions, which limited the duration and frequency of commercial interruptions, was to be determined after trial.
NAB appealed the Court's decision to the Court of Appeals.
Thereafter, on July 16, 1982, while the appeal was pending, the parties submitted a proposed consent decree which, for present purposes, may be summarized as containing two principal provisions. First, NAB agrees to stop disseminating or enforcing all of the three questioned Advertising Standards. Second, the government promises not to object to an order from the Court of Appeals dismissing as moot and vacating this Court's order of March 3 adjudging NAB to be in violation of the Sherman Act.
In accordance with the Tunney Act, the purpose of which is to restrain the injudicious use of consent decrees in government-initiated antitrust cases, the government filed a competitive impact statement, and it received and filed with the Court public comments concerning the proposed decree.
In passing on the question whether the decree is in the public interest, two substantive issues deserve discussion.
Under Section 5(a) of the Clayton Act, 15 U.S.C. § 16(a), a final judgment rendered on behalf of the United States in a civil antitrust case becomes prima facie evidence against the defendant in any subsequent private action that might be brought against that defendant. The consent decree proposed in this case would deprive private parties of prima facie evidence in two conceivable ways. First, the termination of this action through settlement precludes a trial and possible judgment in favor of the government on the two sets of Advertising Standards reserved for trial by this Court's summary judgment ruling. Second, the settlement encourages nullification of the Court's order holding the multiple product restrictions in violation of the Sherman Act because, as indicated supra, it is part of the settlement agreement that NAB would seek, and the government would not oppose, the vacating of that order. After fully considering the matter, the Court has decided that these aspects of the settlement do not contravene the public interest.
The purpose of § 5(a) is to contribute to the deterrent effect of the antitrust laws by "upping the stakes" that may follow from anticompetitive practices. At the same time, private parties are aided by being able to take advantage of the government's special capacity for handling large and complex antitrust cases. See, e.g., Emich Motors Corp. v. General Motors Corp., 340 U.S. 558, 95 L. Ed. 534, 71 S. Ct. 408 (1951). Yet the "piggyback" use that private parties may make of prior antitrust judgments is modified by an exception for consent decrees entered "before any testimony has been taken." 15 U.S.C. § 16(a).
Congress apparently enacted this proviso in order to encourage defendants to settle promptly government-initiated antitrust claims and thereby to save the government the time and expense of further litigation. See, e.g., Fleer Corp. v. Topps Chewing Gum, Inc., 415 F. Supp. 176, 184 (E.D. Pa. 1976); Michigan v. Morton Salt, 259 F. Supp. 35, 59 (D. Minn. 1966); Homewood Theatre v. Loew's, Inc., 110 F. Supp. 398, 410-11 (D. Minn. 1952); Deluxe Theatre Corp. v. Balaban & Katz Corp., 95 F. Supp. 983, 986 (N.D. Ill. 1951).
This legislative policy favoring consent decrees is especially furthered by the circumstances that obtain in this case. As to the two sets of provisions reserved for trial, the terms of the decree provide virtually the same relief that the government could have hoped to achieve had it succeeded at trial -- yet the uncertainty, delay, and expense of a trial would be avoided. Moreover, no individual or enterprise has commented adversely with respect to the ramifications the decree may have for future private plaintiffs.
Finally, if the provision regarding vacating would be deemed unacceptable by this Court as negating the prima facie evidence effect of its earlier order -- by subsuming it within the exception to the prima facie evidence rule for consent decrees "entered before any testimony was taken"
-- this would be a hollow gesture. Approval of the decree without this element would be unlikely to yield a different result because under the authority of United States v. Munsingwear, 340 U.S. 36, 39-40, 95 L. Ed. 36, 71 S. Ct. 104 (1950), the Court of Appeals could be expected to dismiss for mootness and vacate the Court's order on its own initiative in any event. To the extent, then, that the decree is premised upon NAB's expectation that the government's acquiescence makes vacating certain, the Court would not be justified in jeopardizing an outcome that implements Congress's preference for consent decrees in order to vindicate the speculative interests of hypothetical private plaintiffs.
Action for Children's Television (ACT) has submitted comments recommending that the proposed judgment be revised to permit the continued enforcement of the NAB Code provisions that relate to children's advertising. It is ACT's view that the Court should disapprove the proposed judgment insofar as it invalidates those provisions of the Code that limit the number of commercial minutes for children's television and that regulate ...