Antitrust 08/05/2021

Congress Should Support Due Process by Opposing the Venue Act

Chris Marchese
Chris Marchese Counsel

Earlier this summer, the House Judiciary Committee released six antitrust bills that seek to radically upend the United States’ longstanding approach to policing competition in the marketplace. While five bills are highly controversial and were approved by the Committee along largely partisan lines, one—the Venue Act—snuck by lawmakers of both parties. Despite its deceptively mundane-sounding name, the bill intentionally deprives defendants in antitrust cases of their due process rights and stretches the judiciary’s already-overwhelmed resources thin. Congress should oppose it.

Defendants Deserve a Fair Trial in a Neutral Forum

First, some background. Under the U.S. Constitution and federal law, defendants to a lawsuit may transfer cases pending against them from:

  • state courts to federal courts when federal law is at issue;
  • federal courts in one state to federal courts in other state when the latter has personal jurisdiction over the defendants; and
  • multiple federal courts to one federal court when the cases all involve the same questions of law or fact. 

The reason is simple: The Constitution’s framers worried that state courts would be biased against out-of-state defendants, especially when the plaintiff hails from the courts’ state, and wanted to protect their right to a fair trial heard in a neutral forum. Decades later, Congress, responding to the rise of widespread interstate travel and business transactions, tried to effectively use resources by allowing the judiciary to consolidate similar lawsuits in one court.

The Venue Act Strips Defendants in Antitrust Cases of Due Process

The Venue Act strips only some defendants of those due-process protections: businesses sued under federal antitrust law by state attorneys general. In those cases, the bill would prohibit defendants from transferring their case anywhere other than where the state AG chose. The reason is simple: State AGs prefer to sue businesses in their home courts, where they—like the framers—believe they’ll have a friendlier audience and thus an easier time winning.

While state courts are often just as capable as federal courts, neither the Constitution’s framers nor subsequent congresses trusted them to always provide a fair, neutral forum. Rather than decide when certain cases should be heard in certain courts, Congress has long left that decision to defendants: If they believe a state court will give them a fair shake, they needn’t transfer the case to federal court within or outside the state.

But often defendants do transfer cases. The interest of justice is best served by empowering defendants to protect themselves. A defendant transferring their case to a more neutral jurisdiction is a right at the cornerstone of our judicial system. It is concerning that the Venue Act treats this right like an inconvenience that needs to be speedily done away with. 

The Venue Act Wastes Taxpayer Money & Judicial Resources Just to Punish Popular Businesses

The clear application of the Venue Act is less benign than many of its supporters realize. Restricting the rights of particular defendants to transfer their cases opens the door to expensive lawsuits on the same issues across the country. That would be ruinous for many businesses to defend against, even if they are innocent of the charges against them. Allowing particular cases to be fought in dozens of jurisdictions at once would lead to tremendous costs to the taxpayer. The Venue Act would make cases cost far more to litigate and the outcomes would be unclear or completely contradictory.

Director Mauskopf of the Administrative Office of the United States Courts sent a letter to the House in July outlining some of these concerns. As the letter explains, the Venue Act would:

  • Open the door for “inconsistent rulings”;

  • Require “duplicative” discovery processes;

  • Reduce cooperation and increase inefficiencies.

The bill’s proponents laud it for increasing the speed by which antitrust cases will be processed. But speed is not the standard to which we hold our judicial system. The laws that Congress passes should incentivise the pursuit of truth and justice, not impatience. The American people are best served when states or the federal government pursue a case based on the merits of that case, coordinate effectively with relevant bodies, and when the rights of defendants are enthusiastically protected. The wastefulness and recklessness inherent in the Venue Act ensures that even if one state is successful in a suit against a defendant, it will be overturned in two others, leaving the process back at square one. The losers in that scenario are the taxpayer and American businesses. 

A Double-Edged Sword

As is true with many well-intentioned bills, their ultimate efficacy is determined by the law of unintended consequences. As the sponsor of the bill saw fit to highlight during the rollout of the Venue Act, the prime targets for this legislation are American technology companies. Proponents of the bill must then ask themselves if they are comfortable rewriting a process that has stood firm for close to a half-century and awarding state attorneys general the ability to browbeat any private company they want into submission. Diminishing the due-process rights of all defendants in order to target one group in particular will inevitably lead to the targeting of other groups. 

At the very least, the judiciary should be consulted before such massive changes are made to its ability to seek justice. As it stands, the Venue Act would drain the judiciary’s depleted resources, undermine the due-process rights of defendants, and open the door for a wave of politically motivated lawsuits against law-abiding Americans.

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