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While $185 million in fines might seem like a heavy punishment, it’s the least of Hynix’s worries after agreeing Thursday to plead guilty to illegal price fixing. The computer chip maker now faces a bevy of plaintiffs lawyers working with the blessing of the Department of Justice, and it’s not alone. Federal prosecutors routinely expect the plaintiff bar — not a frequent Bush administration ally — to be the ones who seek payback for the victims of companies that admit to price fixing. Consumers “are well-represented in court and are in the midst of obtaining settlements,” Deputy Assistant Attorney General Scott Hammond said Thursday. “That’s certainly something we rely upon.” Through its increasingly aggressive prosecutions, the Justice Department also provides the plaintiff bar with ammunition for a growing number of large antitrust suits. What’s evolved is a mutually beneficial relationship that’s made antitrust work increasingly attractive to plaintiff firms, including some smaller shops who’ve been squeezed out of securities fraud litigation by changes in the law. And it’s a growth industry — barring a reversal in antitrust enforcement policy — with global reach. Plaintiffs lawyers have capitalized in recent years on antitrust investigations in Canada and Europe, too. “Both the federal and state agencies are being more aggressive, and the private plaintiff bar has picked up on the same trend,” said Donn Pickett, a partner with Bingham McCutchen who represents antitrust defendants. Not all antitrust cases are built on the government’s back, but guilty pleas like those from Hynix and Infineon — which signed a similar agreement for $160 million last fall — are potent weapons for plaintiffs lawyers. “It may help in advancing the private litigation,” said Joseph Tabacco, a partner with Berman DeValerio Pease Tabacco Burt & Pucillo who represents plaintiffs in a class action against Hynix. “When you have both the payment of significant money and the plea of guilty — it will obviously help our case.” PLAINTIFF BAR’S COMEBACK The Hynix suit is one of many such cases built upon recent prosecutions. In times of less aggressive government action, the plaintiff bar has had a more difficult time. “During the Reagan years, for example, there was no antitrust enforcement,” said Solomon Cera, a partner with the San Francisco plaintiff firm Gold Bennett Cera & Sidener. Therefore, Cera said, his firm in the 1980s intensified its focus on securities fraud class actions. But now, with an active Justice Department — including an antitrust amnesty program that allows companies to rat out co-conspirators — and aggressive enforcement agencies in Europe and Canada, about half his firm’s caseload is antitrust work. Dennis Gilardi, who administers class action settlements, agreed. “What I’m observing is that there are firms that are going back to antitrust that had their roots in antitrust.” And they’re not alone. “There are people trying to get into the field,” said Robert Van Nest, a partner at Keker & Van Nest who represents civil and criminal antitrust defendants. The field has become particularly attractive to firms whose practices were hurt by the Private Securities Litigation Reform Act of 1995, as well as those who fear future tort reform measures. Van Nest says plaintiffs lawyers are trying to influence government prosecutions. “The civil guys campaign for the criminal guys to do stuff,” he said. Plaintiffs lawyers disagree, and argue that federal and state antitrust laws are designed to give the plaintiff bar an enforcement role by allowing plaintiffs to collect treble damages on cases built around work done by government prosecutors. State and federal antitrust laws “encourage the private sector to help government lawyers in prosecuting antitrust claims,” said Eugene Crew, a partner with Townsend and Townsend and Crew. He said a statute of limitations that extends for one year past the close of government actions “allows the plaintiff firm to sit and wait until the government case runs its course.” Prosecutors make this explicit in plea agreements such as the Infineon deal. “In light of the civil cases filed against defendant — which potentially provide for a recovery of a multiple of actual damages, the United States agrees that it will not seek a restitution order for the offense charged.” “That is a standard paragraph in all of the major cartel cases we’ve filed in the last several years,” said Phillip Warren, chief of the Justice Department’s San Francisco antitrust division, which runs the major criminal antitrust enforcements. In fact, the computer chip class action plaintiffs can’t do much in federal court until the government is finished. U.S. District Judge Phyllis Hamilton has stayed discovery in In re DRAM Antitrust Litigation, 02-01486, while government lawyers complete their investigation. FEEDING FRENZY Antitrust plaintiffs lawyers say they don’t just wait for government lawyers to do the work. Whenever a criminal case is filed — or a company enters into a federal amnesty program — firms around the country rush to file suit. Once they do, a series of negotiations, legal proceedings and disputes ensue to figure out who gets the privilege of lead counsel status. Lawyers say this allows smaller firms to lead a case in a way that is impossible with securities fraud suits, where lead counsel is determined by the size of the losses claimed by the lawyer’s clients. “There isn’t a lead counsel structure, and it isn’t necessarily the case that the lawyer with the biggest plaintiff gets lead status,” said Michael Lehmann, a plaintiffs lawyer with the Furth Firm. “It’s much more egalitarian in that sense.” With more firms able to compete — and companies operating internationally — the antitrust field has rapidly changed. Suits are no longer focused solely on U.S. price-fixing scandals. “As more foreign companies become players in the U.S. economy, the kind of cartelized businesses that have been operating for years around the world didn’t change the way they did things,” said Francis Scarpulla, a longtime San Francisco plaintiffs lawyer. “In some countries, price fixing is very common.” Until 1995, Scarpulla said, he had never sued a foreign company for antitrust violations; since then, he’s rarely filed a suit without an overseas defendant. Susan Kupfer, a former law professor who represents antitrust plaintiffs with the firm Glancy Binkow & Goldberg, calls this “the dark side of globalization.” Kupfer said the profession is slowly moving from an insular, male-dominated field to one more open to women attorneys. She and Bruce Simon, a partner with Cotchett, Pitre, Simon & McCarthy, said the field is also opening to new ideas. But plaintiffs lawyers worry that lobbying by corporations and the defense bar to weaken antitrust statutes will once again drive the plaintiff bar into dormancy. “The antitrust ox is being gored,” Crew said, “and it’s been gored for years by members of the defense bar.”

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