Maximizing Recovery in the Antitrust Claims Administration Process

Antitrust, Competition & Trade Regulation Update

Date: August 19, 2015

The antitrust laws aim to redress injuries caused by violations of the competition laws, including providing monetary awards to harmed businesses. However, because companies typically are not interested in enmeshing themselves in protracted and complex antitrust litigation, especially with their business partners, most participate in an antitrust lawsuit as unnamed and uninterested putative class members. Company counsel often are only distantly aware of cases in which their clients are represented by class counsel as part of a multidistrict price-fixing class action.

This dynamic changes when a case (or a portion thereof) settles. Settling defendants pay into large, multimillion-dollar settlement funds that are distributed to qualified class members who choose to participate in the claims process. This money ought to reflect overcharges or other harms inflicted on purchasers (adjusted for some negotiated settlement discount) and is “free” for the taking, subject to some effort to submit a claim.

This bulletin examines the dynamics of the claims administration process and suggests why corporate counsel should pay attention. A damaged company’s goal is to fairly maximize its recovery. To do so requires identifying opportunities to submit claims and understanding how to avoid common mistakes that diminish rightful recoveries.

The claims administration process is predictable, but companies are often caught unprepared. While companies and their counsel often have some limited knowledge of major litigation in their industries, they often first become aware of a potential recovery when a claims administrator sends them a claim notice.

At this point, a settlement agreement typically has been fully negotiated and executed, but not yet approved. Before funds can be disseminated, parties are given an opportunity to opt out (i.e., to file a lawsuit outside the class), and the court overseeing the litigation must approve the settlement and certify a settlement class. While this is an important part of the process, the opt-out opportunity and associated strategy are beyond the scope of this bulletin.

One common mistake companies make is to ignore the claims process. A significant gap in time – sometimes more than a year – can occur between the initial notice and the deadline to submit a claim. As a result, claims can “gather dust” and be ignored or forgotten. Thus, counsel should consider tracking claim filing deadlines.

Further, a significant amount of work may be necessary to submit a claim. An initial assessment should be done to determine whether the likely recovery is sufficiently large to justify the time required to prepare a detailed claim. Moreover, that assessment should consider how difficult it may be to document a claim. Companies with substantial claims will likely require more time and resources to prepare a detailed claim and should plan accordingly.

Another common mistake is to treat the claims process as a ministerial function. Class members submit claim forms to a claims administrator – which sounds simple enough. As the name suggests, a claims administrator is a company hired by the settling parties to escrow the settlement funds, administer the process of providing notice to affected parties, qualify claims and, ultimately, distribute the funds. Successful claims administration depends on having access to information about the total amount of commerce impacted by the alleged conspiracy and the related qualified claims. While the litigation discovery process will provide an administrator with some information – for example, who should receive notices – that information can be incomplete or even incorrect. As a result, claims administrators rely heavily upon claimants’ submissions to determine the amount of funds to be disbursed. Therefore, companies submitting claims need to understand what data are necessary to quantify a claim.

Another consideration is missing or archived data. It is not uncommon for a settlement to cover sales that occurred many years before the claim’s submission date. Accessing electronically stored information can be difficult (and expensive), or it simply may no longer exist. In such cases, it may be necessary to estimate or extrapolate sales in a credible and empirically based manner and defer to the claims administrator to qualify them in the recovery process.

Missing business entities present another challenge. While the defendant may provide the claims administrator with data that identify customers, that data may misidentify the proper parties. A company should not assume that because some but not all of its business units received claim notices that the notices correctly identify which entities are entitled to the recovery.

Finally, it is a misconception that participating in the claims process is bad for a future business relationship with the settling defendant and therefore is not worth the business risk to submit a claim. By the time a defendant has agreed to a settlement and funded it, its role in the process is effectively over. Settling defendants are unlikely to know or care who submitted a claim.

In sum, paying attention to the claims administration process and making a well-reasoned cost-benefit assessment about participating can pay off.


For more information, please contact:

Karyn A. Booth

Daniel Ferrel McInnis

Jason D. Tutrone


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