The short answer to the statute-of-limitations question is that an antitrust action must be commenced “within four years after the cause of action accrued.” (15 U.S.C. § 15b). And the antitrust cause of action accrues when the defendant acts in violation of the antitrust laws and injures plaintiff.
But it isn’t always this simple. Sometimes the statute of limitations doesn’t start running right away, even when the antitrust defendant actually injures the plaintiff. Unlike the victim of a battery—maybe a punch to the face—a victim of the antitrust laws doesn’t always know that he or she or it (i.e. a corporation) suffered injury from an anticompetitive act.
This is called the discovery rule and it isn’t unique to antitrust. There are other types of claims in which the victim doesn’t even know about the injury. Fraud is a good example. The victim may not know that he or she has been swindled. When they find out about the fraud, the statute of limitations may have passed. But if the cause of action doesn’t accrue until discovery, the victim will still have the standard time period to file a lawsuit.
The discovery rule could also apply to a medical malpractice case—the sort of case we don’t handle. Like a fraud injury, the victim may be walking around totally oblivious to an injury. Maybe during a surgery the doctor’s Fitbit Blaze watch fell off and landed in the patient? The doctor, none the wiser because he or she was concentrating so hard, simply didn’t notice. Presumably a Fitbit left in the body causes some sort of medical injury, so when the patient/victim finds out about it, the cause of action begins to accrue. Of course, I don’t know if Fitbits are often left in bodies because we don’t do medical malpractice work.
Not all courts apply the discovery rule in antitrust cases: Check out this article by Michael Christian and Eric Buetzow if you have a Law360 subscription. Of course, even if a Court applies the injury rule to the exclusion of the discovery rule (and they sometimes do), a plaintiff could still invoke fraudulent concealment to postpone accrual of many antitrust claims.
You will likely see a fraudulent concealment count in any case involving a long-lasting conspiracy. That is because the nature of a conspiracy—in most cases—is to hide the anticompetitive conduct. Most antitrust claims where a discovery rule would be useful are ones in which a plaintiff could likely invoke fraudulent concealment.
Fraudulent concealment means that the defendants are purposely trying to hide their bad conduct, with an intent to deceive the victims.
So, for example, if there are a group of competitors that are engaged in a price-fixing conspiracy and they also cover up the conspiracy, it is likely that a Court will find that the conspirators committed a fraudulent concealment such that the antitrust cause of action doesn’t begin to accrue until the victim discovers the conspiracy.
You will see claims of fraudulent concealment in many antitrust complaints. Of course, if you are an antitrust plaintiff, you may have to show that you exercised diligence during the concealment period.
Similar to the discovery rule, there is a “speculative damages” delay to the accrual of the antitrust statute of limitations, when it isn’t clear for a period of time that the plaintiff has actually been injured.
A pending governmental investigation—civil or criminal—could also delay the limitations period, during the investigation plus another year. Of course, there are some complications about certain actions, including damage actions, so consult with your antitrust attorney about this one.
Another common statute of limitations’ exception is for “continuing violations.”
In an antitrust context, the continuing violation exception might work like this: A group of competitors conspire together for eight years to knock out any competition through illegal anticompetitive acts—a group boycott. So long as plaintiff suffered a new injury from a “new and independent overt act” within the limitations period, the statute of limitations period begins to run from that new and independent act, not the beginning of the conspiracy.
Of course, if the conspirators hid their conduct for all or part of the eight years, the group-boycott victim might also invoke fraudulent concealment.
Finally, a defendant can plead the equitable doctrine of laches against antitrust injunctive relief where the antitrust plaintiff unreasonably delayed the lawsuit to the defendant’s detriment.
Important: The statute of limitations can eliminate a claim that would normally have merit. My description above provides the general contours of the issues that come up when analyzing the federal antitrust statute of limitations. But it isn’t always this simple.
So if you are a plaintiff with a prospective antitrust claim, you better move quickly or you could lose it. If you are an antitrust defendant, you should consider whether you can invoke the statute of limitations or laches as a defense. If you want to discuss, feel free to contact us.
And if you haven’t seen it yet, check out the first issue of the Bona Law Newsletter.