Monday, June 23, 2008

Article Examines Antitrust Division’s Thinking on Attempt to Repeal Amnesty Agreement Article Examines DOJ's Thinking - The DOJ Antitrust Division’s often-criticized decision to revoke an amnesty agreement with Stolt-Nielsen shipping company is the subject of a detailed and engaging article in Corporate Counsel, available on, which provides a window into the DOJ’s thinking during the dispute.

Stolt-Nielsen Amnesty Revocation Questioned - A judge found that the DOJ had “no reasonable basis” for canceling the amnesty agreement, and dismissed the indictment of Stolt-Nielsen. The article, however, suggests that the DOJ’s actions were not entirely unreasonable, and provides a detailed look at the progression of the DOJ’s thinking. For example, the DOJ "had obtained evidence that the company had continued its activities until at least as late as the second half of 2002" even though the company had discovered the unlawful activity in March 2002, and the DOJ believed that “the company had not been truthful about its continued participation in the cartel.”

When the revocation of the amnesty agreement was challenged in court, however, Stolt pointed out that the agreement provided amnesty to all conduct prior to the signing of the agreement on January 15, 2003. In addition, one focus of the hearing was the credibility of the government’s witnesses:

[The Judge] questioned why the prosecutors relied on the testimony of "the very co-conspirators whom defendants had reported to the division." He noted their lenient sentences, which ranged from no jail time to four months, compared to
the average sentence of 30 months for antitrust violations. And he spent eight pages of his 35-page ruling detailing his problem with each witness. Some attacked or contradicted each other; some contradicted previous statements they had given to the grand jury or other agencies; and some just changed their stories.

DOJ Remains Convinced - Deputy Assistant Attorney General Scott Hammond stated that Stolt’s behavior after it discovered the wrongdoing was the worst he has seen by a party granted amnesty and “remains convinced that the government was right,” but stated that the division will tighten up the language in its amnesty letters in the future.

Future Fairness - While companies seeking amnesty should carefully scrutinize the terms of any proposed amnesty agreement, it doesn’t appear that their treatment by the DOJ will be unfair as some had feared after the decision to revoke Stolt’s amnesty was initially announced. As a former DOJ trial attorney, and in my dealings with DOJ antitrust attorneys while in private practice (as recently as last week), I have always been impressed with government attorneys’ scrupulous efforts to uphold the rule of law, as well as their passion for their jobs. Sometimes their passion and their desire to punish what they perceive as inequity or wrongdoing can result in overreaching, but the multiple layers of bureaucracy provide strong checks on any overzealous advocacy by government attorneys. As the article shows, Stolt-Nielsen may be the exception that proves the rule. also provided a timeline of events and an article about Stolt’s internal investigation.

Related post: Chocolate Makers Allegedly Fixed Prices (mentioning the Stolt-Nielsen case).


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