This report, available here, reviews US federal class actions from 2013-2018. It looks at various statistics regarding US federal class actions over the years (with lots of graphs and pics).
The Report provides a number of interesting insights without extensive analysis. It finds that:
(i) a mean number of 420 complaints are filed per year in the US;
(ii) most antitrust class actions that reached Final Approval did so within three to five years;
(iii) the mean settlement amount varied by year from about $25 million to $42 million, and the median amount varied by year from about $5 million to $11 million;
(iv) the total annual settlements ranged from about $1 billion to $5 billion per year;
(v) the cumulative total of settlements was $19.3 billion from 2013-2018.
While a mean average of 420 cases were filed a year between 2009 and 2018, there is significant variation year-on-year. This seems to be driven by the size of the industry and number of purchasers affected by the alleged unlawful activity. Thus, industries with large numbers of purchasers are more likely to have a higher number of filings if collusive activity is suspected—particularly under Section 1 of the Sherman Act. This is illustrated by In re: Domestic Airline Travel Antitrust Litigation with 111 historical related actions, and In re: Disposable Contact Lens Antitrust Litigation with 58 historical related actions.
Somewhat to my surprise, the authors identify only 43 cases won by defendants between 2013 and 2018 – 37 of which concluded before the trial stage. Most cases that are not successfully defended are solved via settlement – in 2016, 152 settlements reached final approval, while 171 settlements reached final approval in 2018. The median time from the filing of the complaint to the order granting final approval of the settlement is five years, and half of the settlements analysed reached final approval within three-five years of the case being filed.
Since 2013, USD 19.3 billion in settlements have been reached with defendants in antitrust cases. Across the six years of data analysed, the mean settlement amount is USD 31 million, and the median settlement amount is USD 7 million. However, since various claims can be brought for the same anticompetitive practice, this does not reflect the cartelists’ exposure. 11 cases recovered over $500 million of settlement funds for the class. For example, 14 individual settlements obtained $1.8 billion in compensation for victims from the practice sanctioned In re: Credit Default Swaps Antitrust Litigation. In 2018, high dollar settlements included USD 2.3 billion from 15 settlements In re: Foreign Exchange Benchmark Rates Antitrust Litigation and USD 504 million from 15 settlements In re: ISDAfix Antitrust Litigation.
During this timeframe, 92% of individual settlements were settled for amounts under USD 100 million. Over half of the total amount came from 14 settlements, each over $100M. Three settlements that reached final approval were settled for amounts over $500 million: King Drug Company of Florence v. Cephalon ($512M) in 2015, In re: Urethane Antitrust Litigation ($835M) in 2016, and In re: Credit Default Swaps Litigation ($595M) in 2016.
The paper also provides an idea of the incentives created by the possibility of contingency fees, under which the claimant’s lawyers may receive a percentage of whatever money is paid to the claimant by the respondent, but where the payment of any fees is conditional on claimants being awarded monetary damages. Attorneys’ fees and expenses were most often calculated as a percentage of the overall settlement fund addressed in the court order. The percentage of the settlement devoted to attorney fees and expenses seems to be inversely proportional to the amount of the settlement – attorney fees and expenses typically cover between 30-40% of the settlement for settlements below USD 10 million, but go down to c. 15% as settlements top one billion dollars.
For those in legal practice, you may like to know that the Report provides a breakdown of how many cases a long list of law firms participated in, and how much money they were awarded in the context of settlements.
This is a really interesting report on how antitrust class actions have developed in the US over the past decade. I would have enjoyed a bit more analysis, but the Report is already very informative. My only quibble is that I was unable to find a list of class action awards following a trial anywhere in the paper. If this is because there is none – i.e. everyone settles at some point – it would have been nice to see this spelled out at some point.