UNITED
STATES
v.
NATIONAL
AUTOMOBILE DEALERS ASSN.
Civil
Action No. 95 1804.
United
States District Court, District of Columbia.
June 28,
1996.
FINAL
JUDGMENT
HAROLD H.
GREENE, District Judge:
Plaintiff,
United States of America, filed its complaint on September 20, 1995.
Plaintiff and defendant, National Automobile Dealers Association
("NADA"), by their respective attorneys, have consented to the
entry of this Final Judgment without trial or adjudication of any issue
of fact or law. This Final Judgment shall not be evidence against nor an
admission by any party with respect to any issue of fact or law.
Therefore, before the taking of any testimony and without trial or
adjudication of any issue of fact or law herein, and upon consent of the
parties hereto, it is hereby ORDERED, ADJUDGED AND DECREED as follows:
I.
JURISDICTION
This
Court has jurisdiction of the subject matter of this action and of the
party consenting hereto. The complaint states a claim upon which relief
may be granted against defendant under Section 1 of the Sherman Act (15
U.S.C. § 1).
II.
DEFINITIONS
As used
in this Final Judgment:
A.
"Communication" means any exchange, transfer or dissemination
of information, regardless of the means by which it is accomplished.
B.
"Consumer" means any person who is an actual or potential
purchaser of any motor vehicle.
C.
"Dealer" means a person selling motor vehicles to consumers,
including each of its divisions, parents, subsidiaries, and affiliates.
D.
"Gross margin" means the difference between an automobile
manufacturer's suggested retail price for a motor vehicle and a dealer's
cost to purchase that vehicle from the manufacturer.
E.
"Manufacturer" means any person which manufactures motor
vehicles, including each of its divisions, parents, subsidiaries, and
affiliates.
F.
"NADA" means the National Automobile Dealers Association,
including each of its divisions, parents, subsidiaries, and affiliates,
and any person acting on behalf of any of them, except that NADA shall
not include
1.
NADA Charitable Foundation;
2.
Dealers Election Action Committee (DEAC);
3.
National Automobile Dealers Insurance Trust (NADIT);
4.
National Automotive Insurance and Service Agency, Inc. (NAISA);
5.
National Automobile Dealers Association Retirement Trust (NADART);
6.
NADA Services Corporation (NADASC);
7.
Salesperson Certification Program;
8.
American Truck Division (ATD).
G.
"Organization" means any corporation, firm, company, sole
proprietorship, partnership, joint venture, association, institute, or
other business, legal, or government entity.
H.
"Person" means any individual or natural person, corporation,
firm, company, sole proprietorship, partnership, joint venture,
association, institute, or other business, legal, or government entity,
and any employee or agent thereof.
I.
"Retail margin" means the difference between the price a
consumer pays to purchase a motor vehicle and a dealer's cost to
purchase that vehicle from the manufacturer.
III.
APPLICABILITY
A. This
Final Judgment applies to defendant and to each of its officers,
directors, agents, employees, committee or task force members,
successors, and assigns.
B.
Defendant shall require, as a condition of any merger with or
acquisition by any other organization, that the organization to which
defendant is to be merged or by which it is to be acquired agree to be
bound by the provisions of this Final Judgment.
IV.
PROHIBITED CONDUCT
Defendant
is hereby enjoined and restrained from:
A.
directly or indirectly entering into, adhering to, or enforcing any
agreement with any dealer to fix, stabilize or maintain the prices at
which motor vehicles may be sold or offered by any person for sale in
the United States to any consumer;
B.
urging, encouraging, advocating or suggesting that dealers adopt
specific prices, specific gross or retail margins, specific pricing
systems, specific markups, specific discounts, or specific policies
relating to the advertising of prices, invoices or costs for the sale of
motor vehicles by dealers in the United States;
C.
urging, encouraging, advocating or suggesting that dealers refrain from
adopting specific pricing systems or specific policies relating to the
advertising of prices, invoices or costs for the sale of motor vehicles
by dealers in the United States;
D.
urging, encouraging, advocating or suggesting that dealers (1) refuse to
do business with particular persons or types of persons, (2) reduce the
amount of business they do with particular persons or types of persons,
or (3) do business with particular persons or types of persons only on
specified terms;
E.
terminating from membership any dealer for reasons relating to that
dealer's price or prices, gross or retail margins, pricing systems,
markups, discounts, or specific policies relating to the advertising of
prices, invoices or costs for motor vehicles in the United States.
V.
LIMITING CONDITIONS
A.
Nothing in this Final Judgment shall prohibit defendant from:
1.
continuing to disseminate specific valuation information in the
N.A.D.A. Official Used Car Guide;
2.
engaging in collective actions to procure government action when
such actions are protected under the Noerr-Pennington doctrine, as
established by Eastern Railroad Presidents Conference v. Noerr
Motor Freight, Inc. [1961 TRADE CASES ¶ 69,927], 365 U.S. 127,
81 S.Ct. 523 (1961) and United Mine Workers v. Pennington
[1965 TRADE CASES ¶ 71,462], 381 U.S. 657, 85 S.Ct. 1585 (1965);
3.
presenting the views, opinions or concerns of its members on topics
to manufacturers, dealers, consumers or other interested parties,
provided that such activities do not violate any provision contained
in Part IV. above;
4.
conducting surveys or gathering statistical facts or other facts and
data relating to dealers, publishing or disseminating such
information in written materials, studies, reports, seminars or
programs, or otherwise providing information to manufacturers,
dealers, consumers or other interested parties in accordance with Maple
Flooring Mfrs. Ass'n v. United States, 268 U.S. 563 (1925) and
its progeny, provided that such activities do not violate any
provision contained in Part IV. above;
5.
participating in bona fide dispute resolution activities, including
but not limited to AUTOCAP, involving complaints by specific
consumers or dealers arising from specific transactions to which
such consumers or dealers are parties;
6.
disseminating information about, or encouraging compliance with, any
laws and government regulations including, but not limited to, tax
laws, Federal Trade Commission rules and guides, Internal Revenue
Service cash reporting requirements, and Federal Reserve Board
regulations.
B.
Nothing in this Final Judgment shall prohibit any individual dealer,
acting alone and not on behalf of or in concert with defendant or any of
defendant's officers, directors, agents, employees, committee or task
force members, successors, or assigns, from negotiating any terms of the
dealer's business relationship with any manufacturer, including a
manufacturer's policies.
VI.
NOTIFICATION PROVISIONS
Defendant
is ordered and directed:
A. to
publish the Final Judgment and a written notice, in the form attached as
Appendix A to this Final Judgment, in Automotive Executive within sixty
(60) days of the entry of this Final Judgment; and
B. to
send a written notice, in the form attached as Appendix A to this Final
Judgment, to each dealer who becomes a member of NADA within ten (10)
years of entry of this Final Judgment and who was not previously given
such notice. Such notice shall be sent within thirty (30) days after the
dealer becomes a member of NADA.
VII.
COMPLIANCE PROGRAM
Defendant
is ordered to establish and maintain an antitrust compliance program
which shall include designating, within 30 days of entry of this Final
Judgment, an Antitrust Compliance Officer with responsibility for
implementing the antitrust compliance program and achieving full
compliance with this Final Judgment. The Antitrust Compliance Officer
shall, on a continuing basis, be responsible for the following:
A.
furnishing a copy of this Final Judgment within thirty (30) days of
entry of the Final Judgment to each of defendant's officers, directors,
employees, and committee or task force members, except for employees
whose functions are purely clerical or manual and members of committees
or task forces that do not address issues related to the sale or
purchase of automobiles;
B.
furnishing in a timely manner a copy of this Final Judgment to any
person who succeeds to a position described in Section VII(A);
C.
arranging for an annual briefing to each person designated in Sections
VII(A) or (B) on the meaning and requirements of this Final Judgment and
the antitrust laws;
D.
obtaining from each person designated in Sections VII(A) or (B),
certification that he or she (1) has read and, to the best of his or her
ability, understands and agrees to abide by the terms of this Final
Judgment; (2) is not aware of any violation of the Final Judgment that
has not been reported to the Antitrust Compliance Officer; and (3)
understands that any person's failure to comply with this Final Judgment
may result in an enforcement action for civil or criminal contempt of
court against NADA and/or any person who violates this Final Judgment;
E.
maintaining (1) a record of all certifications received pursuant to
Section VII(D); (2) a file of all documents related to any alleged
violation of this Final Judgment; and (3) a record of all non-privileged
communications related to any such violation, which shall identify the
date and place of the communication, the persons involved, the subject
matter of the communication, and the results of any related
investigation;
F.
reviewing the final draft of each speech and policy statement made by
any officer, director, employee, or committee or task force member in
order to ensure its adherence with this decree;
G.
reviewing the purpose for the formation or creation of each committee
and task force in order to ensure its adherence with this decree;
H.
reviewing the content of each letter, memorandum, and report written by
or on behalf of any director in his or her capacity as an NADA director
or on NADA stationery in order to ensure its adherence with this decree.
VIII.
CERTIFICATION
A. Within
75 days of the entry of this Final Judgment, defendant shall certify to
plaintiff whether the defendant has designated an Antitrust Compliance
Officer and has distributed the Final Judgment in accordance with
Section VI(A) above.
B. For
ten years after the entry of this Final Judgment, on or before its
anniversary date, the defendant shall file with the plaintiff an annual
statement as to the fact and manner of its compliance with the
provisions of Sections VI and VII.
C. If
defendant's Antitrust Compliance Officer learns of any violations of any
of the terms and conditions contained in this Final Judgment, defendant
shall immediately take appropriate action to terminate or modify the
activity so as to comply with this Final Judgment.
IX.
PLAINTIFF ACCESS
A. For
the purpose of determining or securing compliance with this Final
Judgment, and for no other purpose, duly authorized representatives of
plaintiff shall, upon written request of the Attorney General or the
Assistant Attorney General in charge of the Antitrust Division, and on
reasonable notice to the defendant, made to its principal office, be
permitted, subject to any legally recognized privilege:
1.
access during the defendant's office hours to inspect and copy all
records and documents in the possession or under the control of
defendant, which may have counsel present, relating to any matters
contained in this Final Judgment; and
2. to
interview the defendant's officers, employees and agents, who may
have counsel present, regarding any such matters. The interviews
shall be subject to the defendant's reasonable convenience.
B. Upon
the written request of the Attorney General or the Assistant Attorney
General in charge of the Antitrust Division made to defendant at its
principal office, defendant shall submit such written reports, under
oath if requested, with respect to any of the matters contained in this
Final Judgment as may be requested, subject to any legally recognized
privilege.
C. No
information or documents obtained by the means provided in this Section
VIII shall be divulged by any representative of the Department of
Justice to any person other than a duly authorized representative of the
Executive Branch of the United States, except in the course of legal
proceedings to which the United States is a party, or for the purpose of
securing compliance with this Final Judgment, or as otherwise required
by law.
D. If at
the time information or documents are furnished by defendant to
plaintiff, defendant represents and identifies in writing the material
in any such information or documents to which a claim of protection may
be asserted under Rule 26(c)(7) of the Federal Rules of Civil Procedure,
and defendant marks each pertinent page of such material, "Subject
to claim of protection under Rule 26(c)(7) of the Federal Rules of Civil
Procedure," then ten (10) days' notice shall be given by plaintiff
to defendant prior to divulging such material in any legal proceeding
(other than a grand jury proceeding), so that defendant shall have an
opportunity to apply to this Court for protection pursuant to Rule
26(c)(7) of the Federal Rules of Civil Procedure.
X.
DURATION OF FINAL JUDGMENT
Except as
otherwise provided hereinabove, this Final Judgment shall remain in
effect until ten (10) years from the date of entry.
XI.
CONSTRUCTION, ENFORCEMENT, MODIFICATION AND COMPLIANCE
Jurisdiction
is retained by the Court for the purpose of enabling any of the parties
to this Final Judgment to apply to this Court at any time for such
further orders or directions as may be necessary or appropriate for the
construction or carrying out of this Final Judgment, for the
modification of any of its provisions, for its enforcement or
compliance, and for the punishment of any violation of its provisions.
XII.
PUBLIC INTEREST
Entry of
this Final Judgment is in the public interest.
APPENDIX A
On
September 20, 1995, the Antitrust Division of the United States
Department of Justice filed a civil suit that alleged that the National
Automobile Dealers Association ("NADA") had engaged in certain
practices that violated one section of the antitrust laws. NADA denies
that its conduct violated the law. However, in order to avoid the delay,
expense and burden of protracted litigation, NADA, without admitting any
violation of the law and without being subject to any monetary
penalties, has agreed to the entry of a civil Consent Order to settle
this matter. This Consent Order applies to NADA and all of its officers,
directors, employees, agents, and committee and task force members, but
not to dealers acting on their own.
Under the
Consent Order, NADA may not enter into, adhere to, or enforce any
agreement with any dealer to fix the prices at which new cars are sold
or offered. NADA is also prohibited from recommending that dealers (1)
adopt specific prices or pricing policies, specific margins, or specific
advertising policies relating to prices or costs for automobile sales,
(2) refrain from adopting specific pricing systems or specific policies
relating to the advertising of prices or costs for automobile sales,
such as invoice advertising, and (3) refuse to do business or reduce the
amount of business they do with particular people or types of people.
NADA is further prohibited from terminating from membership any dealer
based upon that dealer's prices or specific policies relating to the
advertising of prices or costs for automobile sales. Failure to comply
with this Consent Order may result in conviction for criminal contempt
of court.
This
Consent Order does not prohibit NADA from continuing certain activities,
including publishing the N.A.D.A. Official Used Car Guide, lobbying
before legislatures and regulatory agencies, offering dispute resolution
programs, including the AUTOCAP program, educating members on compliance
with laws and regulations, and presenting dealers' views to
manufacturers, consumers or other interested parties in ways that do not
otherwise violate the Consent Order.
Competitive
Impact Statement [FN*]
FN*
This does not constitute a portion of the final judgment.--CCH.
The
United States of America, pursuant to Section 2 of the Antitrust
Procedures and Penalties Act ("APPA"), 15 U.S.C. § 16(b),
submits this Competitive Impact Statement regarding the proposed Final
Judgment submitted for entry in this civil antitrust proceeding.
I. Nature
and Purpose of the Proceeding
On
September 20, 1995, the United States filed a civil antitrust complaint
under Section 4 of the Sherman Act, as amended, 15 U.S.C. § 4, alleging
that the defendant, the National Automobile Dealers Association
("NADA"), entered into agreements intended to lessen
competition in the retail automobile industry in violation of Section 1
of the Sherman Act, 15 U.S.C. § 1. Specifically, the complaint alleges
that the NADA, through its officers and directors:
(a)
Agreed to orchestrate a group boycott in an attempt to coerce automobile
manufacturers to decrease the discounts offered to large volume buyers
and to eliminate consumer rebates;
(b)
Agreed to urge its dealer members to maintain new vehicle inventories at
levels equal to 15-30 days' supply;
(c)
Solicited and obtained agreements from member dealers not to engage in
invoice advertising; and
(d)
Agreed to urge its members not to do business with automobile brokers.
The
complaint seeks relief that would prevent the NADA from continuing or
renewing the alleged practices and agreements, or engaging in other
practices or agreements that would have a similar purpose or effect.
On
September 20, 1995, the United States and the NADA also filed a
stipulation in which they consented to the entry of a proposed Final
Judgment that would prohibit the NADA from engaging in certain
anticompetitive practices, and would require the NADA to implement an
antitrust compliance program. The proposed Final Judgment provides all
of the relief that the United States seeks in the Complaint.
The
United States and the NADA have agreed that the Court may enter the
proposed Final Judgment after compliance with the Antitrust Procedures
and Penalties Act ("APPA"), 15 U.S.C. § 16(b)-(h), provided
the United States has not withdrawn its consent. Entry of the proposed
Final Judgment will terminate the action, except that the Court will
retain jurisdiction over the matter proceedings to construe, modify, or
enforce the Final Judgment, or to punish violations of any of its
provisions.
II.
Description of Practices Giving Rise to the Alleged Violation of the
Antitrust Laws
The NADA
is a national trade association, headquartered in McLean, Virginia, that
represents approximately 84% of the franchised new car and truck dealers
in the United States. Franchised dealers purchase new cars and trucks
from manufacturers pursuant to franchise agreements, and in turn sell
those cars and trucks and provide related services to consumers. The
members of the NADA compete with each other and with other car and truck
dealers to sell motor vehicles and other auto products and services to
consumers. Dealers compete by offering different prices, quality of
service, and selection of cars. NADA's members had retail sales of
products and services of approximately $375 billion in 1993.
1.
Agreement Concerning Inventory Levels
In recent
years, automobile manufacturers have used certain sales and marketing
practices designed to stimulate car sales, including fleet subsidies and
consumer rebates. Fleet subsidies are discounts offered to purchasers of
large quantities of cars, such as rental car companies and large
corporations. These discounts can be larger than the discounts offered
to franchised dealers. Fleet purchasers often resell fleet vehicles
directly to the public or to non-franchised automobile dealers, who in
turn sell them to the public. Prior to 1991, many fleet vehicles were
sold in the same year as new cars of the same model year. Fleet
vehicles, therefore, directly competed with new vehicle sales, but fleet
cars were sometimes offered at prices thousands of dollars less than
similar new cars. During the late 1980's and early 1990's, the NADA
objected to manufacturers' practices of offering substantial fleet
discounts. The NADA claimed that fleet subsidies created a class of
vehicles that, because of their lower prices and mileage, unfairly
increased competition with new vehicle sales.
The NADA
also objected to manufacturers' use of consumer rebates to stimulate
sales. Consumer rebates are cash incentives offered by manufacturers
directly to consumers. In recent years, manufacturers have increased the
amount and frequency of consumer rebates that they offered to entice
consumers to purchase new automobiles. During the time period covered by
the Complaint, many analysts estimated that consumer rebates saved
consumers as much as $1,000 per car. Many franchised dealers believe
that when manufacturers offer rebates to consumers, franchised dealers
are forced to offer their own rebates to consumers who purchase cars
immediately before or after the rebate period. During the late 1980's
and early 1990's, the NADA repeatedly urged manufacturers to give
franchised dealers, rather than consumers, all discounts and incentives
designed to stimulate sales.
In
September, 1989, the NADA's president drafted a document entitled
"An Open Letter to All Dealers" ("Open Letter"). The
Open Letter claimed that manufacturers' use of fleet subsidies had
contributed to automobile dealers' financial difficulties. It also
discussed the NADA's attempts to convince consumer manufacturers not to
offer rebates to consumes, and instead to give all incentives to
dealers. The Open Letter concluded with a recommendation that all
automobile dealers reduce their inventories to a 15-30 day supply of new
vehicles. The letter then stated that the NADA would "advise
dealers immediately of any movement by their franchisers which will
assist dealers."
Dealers
customarily have substantially more than 15-30 days' supply of new cars
in inventory at any given time. Sixty to ninety days' supply is more
typical. A dealer that unilaterally reduced its inventory by a
substantial amount would risk losing sales to other dealers that
maintain greater selection of cars. If dealers collectively reduced
inventories, however, they could lower their inventory costs without
losing sales to competing dealers. Such an action would adversely affect
manufacturers, which would see a dramatic reduction in orders.
On
October 23, 1989, the NADA president wrote a letter to Oregon dealers in
which he called the Open Letter the NADA's "first response" to
manufacturers who made little or no compromise with the NADA. The Open
Letter was unanimously endorsed by the NADA's Executive Committee and
board of directors and published in the October 30, 1989 issue of
Automotive News as a two page advertisement. It was also published in
the NADA's official publication, Automotive Executive, and sent to
numerous representatives of the media and major automobile
manufacturers.
At the
NADA's 1990 Annual Convention, the NADA president claimed that the had
been unable to obtain any concessions from manufacturers until after the
Open Letter was published and dealers responded by cutting their new car
orders. He further observed that: "Twenty-five thousand
dealerships--doing anything more or less together--is bound to come to
the attention of our suppliers."
The
Complaint alleges that the Open Letter reflected an agreement by the
NADA to reduce and maintain inventory levels equal to 15-30 day's supply
unless and until automobile manufacturers adopted policies more
favorable to dealers. An agreement by a trade association to recommend
that all dealers maintain a particular inventory level is a per se
violation of section 1 of the Sherman Act. An agreement by a trade
association to boycott a supplier by encouraging its members to withhold
or reduce orders is also a per se violation of the Sherman Act.
2.
Agreement Concerning Advertising
Invoice
advertising is advertising that reveals the dealer's invoice or cost to
purchase a vehicle, or offers to sell the vehicle to the public at price
based upon the dealer's invoice or cost to purchase the vehicle. The
Complaint alleges that the NADA has frequently expressed its opposition
to invoice advertising, at least in part because it believes that such
advertising leads to lower retail selling prices for new vehicles.
On
several occasions between 1989 and 1994, an officer of the NADA
contacted automobile manufacturers to complain about dealers who had
engaged in invoice advertising. The NADA officer also complained
directly to the dealers in question about the advertisements. He used
NADA letterhead and referred to his position with the NADA in a manner
that suggested that the was acting on behalf of NADA in communicating
his complaints and seeking agreement from the dealers. In some
instances, the NADA officer obtained the dealers' agreement not to
engage in further invoice advertising. Such an agreement by a trade
association or its members not to engage in certain types of advertising
is a per se violation of the antitrust laws.
3.
Agreement To Boycott Brokers
Automobile
brokers generally buy new vehicles from franchised dealers at discounted
prices and resell the vehicles directly to the public in competition
with franchised dealers. On numerous occasions, the NADA has expressed
its dissatisfaction with competition by brokers. In 1994 a task force
appointed by the NADA's Board of Directors issued a report urging
dealers to boycott automobile brokers. The report recommended that
dealers "Refuse to do business with brokers or buying services.
They inevitably do harm to new vehicle gross margin potential."
Although the NADA eventually revised the report to eliminate that
recommendation, the original version of the report was first
disseminated to over 200 dealer representatives and other individuals
active in the automobile industry. An agreement by a trade association
or its members not to do business with other competitors or customers
for purposes of restricting price competition is a per se violation of
the Sherman Act.
III.
Explanation of the Proposed Final Judgment
The
parties have stipulated that the Court may enter the proposed Final
Judgment at any time after compliance with the APPA. The proposed Final
Judgment states that it shall not constitute an admission by either
party with respect to any issue of fact or law. Section III of the
proposed Final Judgment provides that it shall apply to the NADA and
each of its officers, directors, agents, employees, committee and task
force members, and successors, and any organization that acquires or
merges with the NADA.
Section
IV of the Proposed Final Judgment contains five categories of prohibited
conduct. Section IV(A) contains a general prohibition against any
agreements by the NADA with dealers to fix, stabilize or maintain prices
at which motor vehicles may be sold or offered in the United States to
any consumer. Sections IV(B)-(E) address the specific activities of the
NADA and its officers and directors that were the source of the
antitrust violations.
Section IV(B) of the Proposed Final Judgment prohibits the NADA from urging,
encouraging, advocating, or suggesting that dealers adopt specific
margins, specific discounts, or specific policies relating to the
advertising of prices or dealer costs of motor vehicles. Similarly,
Section IV(C) prohibits the NADA from discouraging dealers from adopting
specific pricing systems or specific policies relating to the
advertising of prices or dealer costs of motor vehicles. Sections IV(B)
and (C) prohibit the NADA from urging or encouraging members to make
uniform or collective decisions with respect to key areas in which they
compete, such as prices or advertisements.
Section IV(D) prohibits the NADA from urging dealers to refuse to do business
with particular types of persons, to reduce their business with
particular types of persons, or to do business with particular persons
only on specified terms. This provision is intended to prohibit the NADA
from using the threat of a group boycott to attempt to pressure
manufacturers into changing policies. It will also bar the NADA from
urging dealers to reduce or eliminate the amount of business they do
with particular types of buyers, such as brokers. Finally, Section IV(E)
prohibits the NADA from terminating the membership of any dealer for
reasons relating to that dealer's pricing or advertising of prices or
dealer costs.
Section V
of the Proposed Final Judgment contains certain limiting provisions that
clarify the scope of the prohibitions in Section IV. Section V
identifies specific NADA activities that are unlikely to restrict
competition and are not prohibited by the decree. Specifically, Section
V(A) provides that the NADA may (1) continue to disseminate specific
valuation information in the N.A.D.A. Official Used Car Guide; (2)
engage in collective action to procure government action, such as
lobbying activities, when those actions are immune from antitrust
challenge under the Noerr-Pennington doctrine; (3) present the views,
opinions, or concerns of its members on topics to manufacturers,
dealers, consumers, or other interested parties, provided that such
activities do not violate any provision contained in Part IV; (4)
conduct surveys, and gather and disseminate information, in accordance
with Maple Flooring Mfrs. Ass'n v. United States, 268 U.S. 563
(1925) and its progeny; (5) participate in bona fide dispute resolution
activities involving the parties to specific transactions; and (6)
disseminate information about laws and government regulations that
affect dealers, and encourage dealers to comply with those laws. Section
V(B) clarifies that nothing in the proposed Final Judgment limits
individual dealers' rights to act independently.
Section
VI of the Proposed Final Judgment requires the NADA to publish a notice
describing the Final Judgment in Automotive Executive, the NADA's
automobile industry trade publication, within 60 days after this
proposed Final Judgment is entered, and to send a copy of the notice to
each dealer who becomes a member of the NADA during the ten-year life of
this Final Judgment.
Sections
VII and VIII require the NADA to set up an antitrust compliance program
to ensure that the NADA's members are aware of and comply with the
limitations in the proposed Final Judgment and antitrust laws. They
require the NADA to designate an antitrust compliance officer and to
furnish a copy of the Final Judgment, together with a written
explanation of its terms, to each of its officers, directors,
non-clerical employees, and members of committees and task forces that
address issues related to the purchase and sale of automobiles. The NADA
is also required to review the final draft of each speech and policy
statement by each officer, director, employee, and committee and task
force member, as well as the content of each letter, memorandum and
report written by or on behalf of each director in his capacity as NADA
director, in order to ensure adherence to the Final Judgment.
Section
IX of the Proposed Final Judgment provides that, upon request of the
Department of Justice, the NADA shall submit written reports, under
oath, with respect to any of the matters contained in the Final
Judgment. Additionally, the Department of Justice is permitted to
inspect and copy all books and records, and to interview officers,
directors, employees and agents of the NADA.
The
Government believes that the proposed Final Judgment is fully adequate
to prevent the continuation or recurrence of the violations of Section 1
of the Sherman Act alleged in the Complaint, and that disposition of
this proceeding without further litigation is appropriate and in the
public interest.
IV.
Remedies Available to Potential Private Litigants
Section 4
of the Clayton Act, 15 U.S.C. § 15, provides that any person who has
been injured as a result of conduct prohibited by the antitrust laws may
bring suit in federal court to recover three times the damages the
person has suffered, as well as costs and reasonable attorneys fees.
Entry of the proposed Final Judgment will neither impair nor assist the
bringing of any private antitrust damage action. Under the provisions of
Section 5(a) of the Clayton Act, 15 U.S.C. § 16(a), the Final Judgment
has no prima facie effect in any subsequent private lawsuit that may be
brought against the defendant.
V.
Procedures Available for Modification of the Proposed Final Judgment
The
United States and the defendant have stipulated that the proposed Final
Judgment may be entered by the Court after compliance with the
provisions of the APPA, provided that the United States has not
withdrawn its consent.
The APPA
provides a period of at least 60 days preceding the effective date of
the proposed Final Judgment within which any person may submit to the
United States written comments regarding the proposed Final Judgment.
Any person who wants to comment should do so within 60 days of the date
of publication of this Competitive Impact Statement in the Federal
Register. The United States will evaluate the comments, determine
whether it should withdraw its consent, and respond to the comments. The
comments and the response of the United States will be filed with the
Court and published in the Federal Register.
Written
comments should be submitted to: Mary Jean Moltenbrey, Chief, Civil Task
Force II, U.S. Department of Justice, Antitrust Division, 315 7th
Street, N.W., Room 300, Washington, D.C. 20530.
Under
Section X of the proposed Final Judgment, the Court will retain
jurisdiction over this matter for the purpose of enabling either of the
parties to apply to the Court for such further orders or directions as
may be necessary for the construction, implementation, modification, or
enforcement of the Final Judgment, or for the punishment of any
violations of the Final Judgment.
VI.
Alternatives to the Proposed Final Judgment
The only
alternative to the proposed Final Judgment considered by the Government
was a full trial on the merits and on relief. Such litigation would
involve substantial cost to the United States and is not warranted,
because the proposed Final Judgment provides appropriate relief against
the violations alleged in the Complaint.
VII.
Determinative Materials and Documents
No particular materials
or documents were determinative in formulating the proposed Final
Judgment. Consequently, the Government has not attached any such
materials or documents to the proposed Final Judgment.
Summary
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