Opinion ID: 794138
Heading Depth: 4
Heading Rank: 3

Heading: The inapplicability of Johnson to the antitrust context

Text: 160 As an initial matter, prosecuting a typical TILA claim is vastly different from prosecuting an antitrust claim because of the sheer complexity of the latter. For example, in Snowden, the plaintiff engaged in deferred deposit transactions, where a customer tenders a check to the store that is cashed for a service fee with the understanding that the check will not be negotiated until some later, agreed upon time. 290 F.3d at 633. The plaintiff alleged in her complaint that: (1) the deferred deposit transactions with [the defendant] were loans; and (2) that the service fee charged by [the defendant] for such transactions constituted interest. Id. at 635. As a result, the plaintiff asserted that the defendant had violated, inter alia, the TILA. 161 In a cases such as Snowden, there is a specific transaction at issue. Whether there is a TILA violation usually hinges on whether the facts about that transaction do or do not establish a violation of the TILA. This is not a particularly difficult analysis. As one commentator has summarized, in TILA cases, one must be cognizant of the type of credit being extended as well as the terms of the credit contract to determine which disclosures, in addition to the APR and finance charge, are required under TILA and any other applicable Federal and state laws. Matthew A. Edwards, Empirical and Behavioral Critiques of Mandatory Disclosure: Socioeconomics and the Quest for Truth in Lending, 14 Cornell J.L. & Pub. Pol'y 199, 216 (2005). By contrast, whether a company's action constitutes an antitrust violation is usually a complicated question of fact. The law that then applies to those facts is equally complex. This complexity of prosecuting an antitrust claim is confirmed by the unopposed experts' affidavits provided by Plaintiffs, which describe the great expense and labor required by such a case. 162 Three of Plaintiffs' experts — Howard J. Sedran, an attorney with twenty-six (26) years of experience litigating class actions including antitrust actions; J. Owen Todd, a former justice of the Massachusetts Superior Court; and John C. Beyer, an economist — agree that to prosecute their antitrust claims successfully, Plaintiffs will have to undertake an elaborate factual inquiry that includes: 163 defining the relevant product market, defining the relevant geographic market, establishing the market power of defendants and the manner in which they exercised such power; the effects of potential competition within the relevant markets; the impact of conduct on any non-incumbent cable providers in the relevant market; analyzing the swapping agreements alleged in the Complaint, as well as merger and purchase of asset transactions that defendants may have been involved in relating to the alleged monopolization conduct; reviewing and analyzing the increases in cable subscription rates over time; establishing Comcast's alleged monopoly overcharges in relevant markets; and further calculating the named plaintiffs' damages. 164 Beyer estimates that expert witness fees alone will cost a minimum of $300,000, which could exceed in excess of $600,000 depending on the implementation of the factual inquiry. Beyer avers that [d]irect costs (travel, communications, computer analysis, etc.) would be an additional expense, which generally is 12-15 percent of professional service costs. Sedran avers that based on my experience in complex antitrust cases, it is reasonable to expect that competent attorneys would be required to expend several million dollars of attorneys' time and hundreds of thousands of dollars in expenses, including expert witness fees. Additionally, as stated earlier, according to Plaintiffs' expert affidavits, an individual recovery here will range from a few hundred dollars to a few thousand dollars at most. 165 The complexity of an antitrust case generally, and the complexity and cost required to prosecute a case against Comcast specifically, undermine the Johnson court's rationales for supporting a bar to class arbitration. Johnson first asserts that a class action does not necessarily provide greater incentives for private enforcement actions in the TILA context. Yet, Plaintiffs have provided uncontested and unopposed expert affidavits demonstrating that without some form of class mechanism — be it class action or class arbitration — a consumer antitrust plaintiff will not sue at all. For example, Todd avers that [d]ue to the small value of the individual consumer/subscriber's claim, retaining expert witnesses is completely unrealistic and impractical on an individual claim basis. Furthermore, due to the complexity of antitrust cases, including a case of this kind, the individual consumer/subscriber's cases would be extremely compromised, and effectively precluded, without the testimony of expert witnesses. 166 Johnson's second assertion — that the availability of attorney's fees provides the necessary incentive for private enforcement actions — similarly finds little to no purchase in the antitrust context. A plaintiff's attorney in the consumer antitrust context would be required to invest a large initial outlay in time and money, including opportunity costs 20 — estimated in the hundreds of thousands of dollars — for only a portion of an individual plaintiff's recovery, which at most is a few thousand dollars. Then, factoring in the uncertainty of success, the appeal for an attorney to take on an individual plaintiff's antitrust claim shrinks even further. As two commentators have noted: 167 [t]he court decisions striking class action prohibitions have all emphasized that many small-dollar claims are simply not feasible if brought individually. In essence, these cases recognize ... that by increasing plaintiffs' transaction costs, defendants can induce them to accept lower settlements or even drop their claims altogether. Citing the Supreme Court's oft-stated justification for supporting class actions, courts invalidating class action prohibitions explain that it is often not rational for individual consumers or attorneys to bring small claims, whether through litigation or arbitration. 168 Jean B. Sternlight & Elizabeth J. Jensen, Using Arbitration to Eliminate Consumer Class Actions: Efficient Business Practice or Unconscionable Abuse?, 67-SPG Law & Contemp. Probs. 75, 85-86 (2004). In his affidavit, Sedran succinctly puts it this way: [i]t should not surprise anyone that a qualified attorney would not pursue a few individual cases on a contingent basis where even a victory would result in the loss of millions of dollars of time and expense. 21 169 If, as a practical matter, there will be no inventive for private enforcement of antitrust claims by consumers, the Johnson court's third assertion — that any decrease in private enforcement actions will be redressed by administrative enforcement — becomes even more suspect. When Congress enacts a statute that provides for both private and administrative enforcement actions, Congress envisions a role for both types of enforcement. Otherwise, Congress would not have provided for both. Weakening one of those enforcement mechanisms seems inconsistent with the Congressional scheme. Eliminating one of them entirely is surely incompatible with Congress's choice. 170 In summary, we find Johnson's rationale for allowing arbitration to move forward in the TILA context despite a bar on the use of class mechanisms unpersuasive when applied to Plaintiffs' antitrust claims. Because of the presence of the bar on class mechanisms in arbitration, Plaintiffs cannot be compelled to arbitrate their antitrust claims, both state and federal, if that bar remains in place. 171