Antitrust Agencies and the Budget Shutdown: The Lights Are On in Some Corners
Parts of the federal government began to shut down on December 22, 2018, after Congress and President Trump could not agree on a continuing resolution to provide funding. While Congress funded many agencies in a September 2018 appropriations bill, that bill did not fund the Department of Justice or the Federal Trade Commission (among other agencies). As a result, the shutdown is having a significant impact on the activities of the antitrust agencies.
On December 28, 2018, the FTC posted online that it is "closed due to the lapse in government funding," the website will not be updated and all FTC events are postponed until further notice. The FTC provided limited details about operations during the shutdown.
- Premerger Notification Office (PNO): Both the FTC and DOJ premerger offices will be open regular hours to receive Hart-Scott-Rodino (HSR) Act filings. PNO staff will not answer emails or calls regarding the HSR rules or filing procedures. Also, the PNO will not grant early termination of waiting periods during the shutdown.
- Consumer Protection Online Services: Websites like the National Do Not Call Registry and Identitytheft.gov will not be available during the shutdown.
- Filings and FOIA Requests: Public comments, e-filings and FOIA requests can be submitted, but the FTC will take no action until the government reopens.
Based on a plan originally released for fiscal year 2017–2018, the FTC is expected to begin furloughing employees on a rolling basis following an "orderly shutdown" of the agency's operations. Based on that prior plan, the FTC is expected to handle matters in the following ways:
- Hart-Scott-Rodino (HSR) Investigations: Where HSR investigations are running up against a statutory waiting period after which the parties are free to close, the FTC likely will continue those investigations if it determines that failure to challenge before consummation "will result in substantial impairment of the government's ability to secure effective relief at a later time." Matters that are not up against a deadline—e.g., where the investigation is ongoing, but the parties have not complied with any Second Request—will be put on hold during the shutdown.
- Nonmerger Bureau of Competition Investigations: All nonmerger investigations likely will be suspended.
- Bureau of Consumer Protection matters: Support for consumer protection matters likely will be evaluated on a case-by-case basis "focusing on the cases where there is the highest threat of immediate harm and on cases where the harm is ongoing."
- ALJ Litigation: The Commission may cancel ALJ hearings except where a matter is "necessary to protect a vital Commission litigation position in a matter involving a threat to life or property and requiring continued action."
- Pending Litigation: In pending litigation brought by either the Bureau of Competition or the Bureau of Consumer Protection where preliminary relief has already been granted or will not be sought, FTC attorneys will seek suspensions or similar relief though courts may not grant it. Staff may continue working to meet upcoming deadlines if necessary to protect the Commission's interests in the litigation.
- Other Agency Activities: A number of other ongoing agency activities almost certainly will be suspended during the shutdown, including policy and advocacy work (reports, guidelines, economic research, etc.) and participation in certain international bodies that promote competition or consumer protection enforcement.
Following the shutdown, DOJ posted its shutdown contingency plan for fiscal year 2019, which includes some specific comments about the Antitrust Division's operations. According to the plan, the Antitrust Division will except 144 attorneys from furlough.
- HSR Matters: Work will continue to prepare cases that must be filed due to HSR or statute-of-limitations deadlines if no extension or waiver can be obtained and Division "leadership determines that allowing a proposed merger to go forward without objection would pose a reasonable likelihood of peril to property in which the United States has an immediate interest." The DOJ's plan does not explain how the Antitrust Division will determine whether a merger proposes such a risk.
- Criminal Litigation: Work will continue and employees in the Antitrust Division will be excepted from furlough to support both ongoing criminal trials as well as proceedings with scheduled court dates (e.g., arraignments, pleas and sentencing hearings).
- Civil Litigation: Continuances will be sought in civil litigation, but if a continuance cannot be obtained, Antitrust Division employees will be excepted from furlough for work on those cases.
© Arnold & Porter Kaye Scholer LLP. 2019 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.