Thursday, May 23, 2013

A Cost-Cutting Solution to the Discovery Burdens of Antitrust Disputes

Posted by D. Daniel Sokol

James Bo Pearl & J. Hardy Ehlers (O’Melveny & Myers) offer A Cost-Cutting Solution to the Discovery Burdens of Antitrust Disputes.

ABSTRACT: Litigating an antitrust case has always been a costly endeavor for all parties involved. Just in the last 30 years, sprawling cases such as Microsoft, Intel, and price-fixing cases involving LCDs, vitamins, and memory have chewed up hundreds of millions of dollars in fees and expert costs. There are myriad reasons for the staggering expense: The scope of these cases often comprises all aspects of a defendants' business, a searching inquiry of the relevant markets at issue, and battles between pricey economists who conduct vast econometric market studies to support their side's view of the case. And while the unrelenting explosion of electronic data has affected all litigation segments to some extent, it has impacted antitrust litigation in a particularly profound way. Rapidly expanding discovery costs now force settlements in situations where, in the past, defendants might make the pragmatic business decision to litigate when they believed they did nothing wrong.

The costs do not impact only defendants. Plaintiffs' lawyers who in the past may have worked a case from the ground up may be more hesitant to invest in a multi-year discovery battle. Such attorneys may be more likely to simply trail government investigations in which a plea deal portends a higher likelihood of a success.

As it stands now, the law is not well situated to rein in the mushrooming discovery costs.

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