PRINTER'S NO. 15
No. 21 Session of 2001
INTRODUCED BY MELLOW, O'PAKE, WAGNER, MUSTO, STOUT, KASUNIC, FUMO, BODACK, BOSCOLA, COSTA, HUGHES, KITCHEN, KUKOVICH, LAVALLE, LOGAN, SCHWARTZ, STACK, TARTAGLIONE, WILLIAMS AND WOZNIAK, JANUARY 22, 2001
REFERRED TO JUDICIARY, JANUARY 22, 2001
AN ACT 1 Prohibiting unreasonable restraints of trade; imposing 2 penalties; and providing for enforcement. 3 TABLE OF CONTENTS 4 Section 1. Short title. 5 Section 2. Declaration of policy. 6 Section 3. Definitions. 7 Section 4. Unreasonable restraints of trade. 8 Section 5. Penalties. 9 Section 6. Injunctive relief. 10 Section 7. Private cause of action. 11 Section 8. Exemptions. 12 Section 9. Investigation. 13 Section 10. Consistency with Federal law. 14 Section 11. Effective date. 15 The General Assembly of the Commonwealth of Pennsylvania 16 hereby enacts as follows: 17 Section 1. Short title.
1 This act shall be known and may be cited as the Pennsylvania 2 Antitrust Act. 3 Section 2. Declaration of policy. 4 The General Assembly finds and declares that the purpose of 5 this act is to promote the public benefits of a competitive 6 economic environment and to protect the economic welfare of 7 consumers, businesses and the Commonwealth. 8 Section 3. Definitions. 9 The following words and phrases when used in this act shall 10 have the meanings given to them in this section unless the 11 context clearly indicates otherwise: 12 "Attorney General." Includes a designated deputy Attorney 13 General. The term does not include a private attorney or law 14 firm. 15 "Business of insurance." That business of insurance 16 conducted by an insurance company, association or reciprocal, 17 nonprofit hospital plan corporation, nonprofit professional 18 health service plan, health maintenance organization, fraternal 19 benefits society or any risk-assuming preferred provider 20 organization or nonrisk-assuming preferred provider organization 21 not governed and regulated under the Employee Retirement Income 22 Security Act of 1974 (Public Law 93-406, 88 Stat. 829). 23 "Person." An individual, partnership, corporation, 24 association or other entity individually or as a part of an 25 alleged class, or through its officers, agents, employees or 26 attorneys or those acting in concert with the person. The term 27 includes a political subdivision. 28 "Political subdivision." Includes an agency, a board, a 29 commission or an authority of a political subdivision. 30 "Reasonable cause to believe." The totality of facts and 20010S0021B0015 - 2 -
1 circumstances are sufficient to warrant belief by a person of 2 reasonable caution that further investigation is necessary. The 3 term does not require the Attorney General to establish probable 4 cause or a prima facie case. 5 "Trade secret." Anything which constitutes, represents, 6 evidences or records secret or confidential scientific, 7 technical, merchandising, production, management or commercial 8 information. 9 Section 4. Unreasonable restraints of trade. 10 A contract, combination or conspiracy in restraint of trade 11 or commerce in this Commonwealth is unlawful. 12 Section 5. Penalties. 13 (a) Criminal penalty.-- 14 (1) A partnership, corporation, association or other 15 entity which violates section 4 commits a felony of the third 16 degree and shall, upon conviction, be sentenced to pay a fine 17 of not more than $1,000,000. 18 (2) An individual who violates section 4 commits a 19 felony of the third degree and shall, upon conviction, be 20 sentenced to pay a fine of not more than $100,000 or to 21 imprisonment for not more than three years, or both. 22 (b) Enforcement.--The Attorney General shall have standing 23 and authority to prosecute an action for a criminal penalty. 24 (c) Alternative civil penalty.--In lieu of criminal 25 prosecution under subsection (b), the Attorney General may elect 26 to bring an action for a civil penalty. In an action under this 27 subsection: 28 (1) An individual who violates section 4 shall be liable 29 for a penalty of not more than $100,000 for each violation 30 and for the cost of suit, including a reasonable attorney 20010S0021B0015 - 3 -
1 fee. 2 (2) A partnership, corporation, association or other 3 entity which violates section 4 shall be liable for a penalty 4 of not more than $1,000,000 for each violation and for the 5 cost of the suit, including a reasonable attorney fee. 6 (d) Factors to be considered.--In determining the 7 appropriate sanctions to be imposed under this section, the 8 court shall consider at least the following factors: 9 (1) The prior criminal record of the violator. 10 (2) The size and amount of the contract involved, if 11 any. 12 (e) Disposition of fines and penalties.--Criminal fines and 13 civil penalties collected under this section shall be paid into 14 the State Treasury. 15 (f) Limitation of action.--An action under this section must 16 be commenced within four years after the violation of this act 17 is committed. 18 (g) Double jeopardy.--A criminal prosecution or an action 19 solely for a civil penalty under this section may not be brought 20 against a person previously charged by information or indictment 21 with a criminal violation of 62 Pa.C.S. Ch. 45 (relating to 22 antibid-rigging), or of a Federal antitrust statute, if the 23 prosecution is based upon substantially the same conduct upon 24 which a prosecution under this section could be based and 25 jeopardy has attached under the prosecution. 26 (h) Other actions.--An action under this section does not 27 bar administrative sanctions, a civil action for injunctive 28 relief under section 6 or a civil action for damages or 29 injunctive relief under section 7. 30 Section 6. Injunctive relief. 20010S0021B0015 - 4 -
1 (a) Action by Attorney General.--The Attorney General may 2 bring a civil action against any person to restrain the conduct 3 prohibited by this act. 4 (b) Commencement of action.--An action under this section 5 must be commenced within four years after the violation of this 6 act is committed. 7 Section 7. Private cause of action. 8 (a) Cause of action.-- 9 (1) A person directly injured in business or property as 10 a result of an act prohibited by this act shall have a right 11 to bring a civil action for damages or injunctive relief. 12 (2) The Commonwealth, whether a direct or indirect 13 purchaser, when injured in its business or property as a 14 result of an act prohibited by this act, shall have the right 15 to bring a civil action for damages or injunctive relief. In 16 an action by the Commonwealth as an indirect purchaser, the 17 court shall take necessary steps, including transfer and 18 consolidation, to avoid duplicate liability for the same 19 injury. 20 (3) Neither the Commonwealth nor any person may maintain 21 or continue to maintain a civil action under this act based 22 on any transactions or occurrences if a final judgment as to 23 which all appeals have been exhausted has been entered in an 24 action by or on behalf of the Commonwealth or of the person, 25 under the antitrust laws of the United States or another 26 state for injury arising from the same transactions, 27 occurrences or circumstances. 28 (b) Limitation of action.--A cause of action arises under 29 this section at the time the conduct in violation of this act is 30 discovered or should have been discovered or, for a continuing 20010S0021B0015 - 5 -
1 violation, at the time the latest violation of this act is 2 discovered or should have been discovered. An action under this 3 section must be brought within four years of the date when the 4 cause of action arises. During the pendency of an action under 5 section 5 and for one year after the action is completed, the 6 limitation under this subsection is tolled if the action under 7 this section is based in whole or in part on any matter 8 complained of in the action under section 5. If the running of 9 the statute of limitations in respect of a cause of action 10 arising under this section is tolled under this subsection, any 11 action to enforce that cause of action shall be barred unless 12 commenced either within the period of suspension or within four 13 years after the cause of action accrued. 14 (c) Damages.--Damages recoverable under this act by the 15 Commonwealth and by any person shall be actual damages sustained 16 plus the cost of suit, including reasonable attorney fees. If 17 the circumstances warrant, damages recoverable under this act by 18 any person may be three times the actual damages sustained plus 19 taxable costs and reasonable attorney fees. Damages are subject 20 to the following: 21 (1) Neither the Commonwealth nor any person shall be 22 awarded any damages, including treble damages, if a court of 23 another jurisdiction has already entered judgment on a claim 24 by the Commonwealth or the person arising out of the same 25 transaction or occurrence. 26 (2) If the conduct which gives rise to a violation of 27 this act also gives rise to a violation of 62 Pa.C.S. Ch. 45 28 (relating to antibid-rigging), the amount awarded as civil 29 damages or compensation under this act shall not duplicate 30 the amount awarded under 62 Pa.C.S. Ch. 45. 20010S0021B0015 - 6 -
1 (d) Costs in injunction actions.--In an injunction action in 2 which the plaintiff substantially prevails, the court shall 3 award the cost of suit, including a reasonable attorney fee. 4 (e) Liability.--Liability under this section shall be joint 5 and several. Persons subject to liability under this act shall 6 be entitled to contribution in accordance with 42 Pa.C.S. Ch. 83 7 Subch. B (relating to contribution among tort-feasors). 8 (f) Notice to Attorney General.--Within ten days of filing a 9 complaint under this section, the plaintiff shall serve a copy 10 of the complaint upon the Attorney General by registered mail. A 11 copy of the certificate of service shall be filed with the 12 court. 13 (g) Collateral estoppel.--A criminal conviction for a 14 violation of section 4 shall be prima facie evidence as to 15 liability of the convicted participants in a civil action under 16 this section. This subsection does not apply to pleas of no 17 contest or to consent decrees. Nothing contained in this 18 subsection shall be construed to impose a limitation on the 19 application of collateral estoppel. 20 (h) Authority of Attorney General.--The Attorney General has 21 authority under this section: 22 (1) To bring all actions on behalf of the Commonwealth. 23 (2) To bring an action as parens patriae on behalf of 24 individuals who: 25 (i) have suffered an injury to their property by 26 reason of a violation of this act; and 27 (ii) resided in this Commonwealth when the violation 28 occurred. 29 (3) To bring an action on behalf of a political 30 subdivision, if requested to do so by the political 20010S0021B0015 - 7 -
1 subdivision. 2 Section 8. Exemptions. 3 (a) Sovereign immunity.--The Commonwealth shall not be 4 liable in actions under this act. Commonwealth officials and 5 employees acting in their official capacities shall not be 6 liable for penalties under section 5 or for damages, costs and 7 attorney fees under section 7. 8 (b) Governmental and official immunity.--Political 9 subdivisions shall not be liable in actions under this act. 10 Officials and employees of political subdivisions acting in 11 their official capacities shall not be liable for penalties 12 under section 5 or for damages, costs and attorney fees under 13 section 7. 14 (c) State action.--Conduct which results from a clearly 15 articulated and affirmatively expressed State policy and which 16 is actively supervised by the Commonwealth shall not constitute 17 a violation of this act. 18 (d) Labor organizations.--The existence and operation of a 19 labor organization and the exercise of lawful activities of a 20 labor organization shall not constitute a violation of this act. 21 (e) Cooperative associations.--The collective activities of 22 an agricultural or a horticultural cooperative association to 23 process, prepare for market, handle and market members' 24 products, whether or not the activities restrain competition 25 among the members of the association, shall not constitute a 26 violation of this act. 27 (f) Business of insurance.--This act does not apply to the 28 business of insurance to the extent that the business: 29 (1) is regulated by the Insurance Commissioner; and 30 (2) does not constitute a boycott, coercion or 20010S0021B0015 - 8 -
1 intimidation or an agreement to boycott, coerce or 2 intimidate. 3 (g) Public utilities.-- This act does not apply to 4 activities of, or to the rates charged by, an electric 5 cooperative corporation, as defined in 15 Pa.C.S. Ch. 73 6 (relating to electric cooperative corporations), or a public 7 utility, as defined in 66 Pa.C.S. § 102 (relating to 8 definitions), to the extent that those activities or rates are 9 subject to the review of the Pennsylvania Public Utility 10 Commission or a comparable Federal agency. Upon the filing of a 11 complaint against a public utility under this act, the public 12 utility may request from Commonwealth Court a declaratory order 13 outlining the extent to which the activity or rates subject to 14 the complaint are subject to the review of the commission; or, 15 if the public utility's conduct or activities are subject 16 primarily to the jurisdiction of a comparable Federal agency, 17 the public utility may request from that agency a declaratory 18 order outlining the extent to which the activity or rates 19 subject to the complaint are subject to the review of the 20 comparable Federal agency. This public utility exemption is in 21 addition to other exemptions granted to public utilities in this 22 act. 23 (h) Regulated financial institutions.--This act does not 24 apply to any institution subject to the Bank Holding Company Act 25 of 1956 (70 Stat. 133, 12 U.S.C. § 1841 et seq.), section 10 of 26 the Home Owners' Loan Act (48 Stat. 128, 12 U.S.C. § 1467a), the 27 Bank Merger Act (Public Law 86-463, 74 Stat. 129), the Federal 28 Deposit Insurance Act (64 Stat. 873, 12 U.S.C. §§ 1728(b) and 29 1811 et seq.; 18 U.S.C. §§ 215 and 709), the act of November 30, 30 1965 (P.L.847, No.356), known as the Banking Code of 1965, or 20010S0021B0015 - 9 -
1 the act of December 14, 1967 (P.L.746, No.345), known as the 2 Savings Association Code of 1967. 3 (i) Federal or State exempt activities.--Activity or conduct 4 authorized by or exempt from Pennsylvania statutory or common 5 law, or exempt from the provisions of the antitrust laws of the 6 United States, shall be exempt from the provisions of this act. 7 This section shall specifically apply to any activity or conduct 8 authorized by the board of the Ben Franklin Partnership Fund, as 9 authorized by the act of July 2, 1993 (P.L.439, No.64), known as 10 the Ben Franklin/IRC Partnership Act. Any activity or conduct 11 subject to any other Federal statute which limits, modifies or 12 otherwise affects the applicability of one or more provisions of 13 the Federal antitrust statutes, or Federal judicial opinions 14 interpreting those statutes, shall, to that extent, be exempt 15 from this act. 16 (j) Not-for-profit health care facilities.--Any agreement or 17 conduct by a not-for-profit health care facility, which reduces 18 health care costs and passes the reductions on to consumers, 19 shall not constitute a violation of this act. 20 Section 9. Investigation. 21 (a) General power.--If the Attorney General has reasonable 22 cause to believe that a violation of this act has occurred, the 23 Attorney General has authority to investigate on behalf of the 24 Commonwealth, its citizens or a political subdivision. 25 (b) Attendance and production of documents.--Prior to the 26 institution of a civil action, the Attorney General is 27 authorized to require the attendance and testimony of witnesses 28 and the production of documents. Prior to the issuance of a 29 subpoena under this section, the Attorney General must make a 30 request for information. A request for information must state 20010S0021B0015 - 10 -
1 the subject matter of the investigation, the conduct 2 constituting the alleged violation which is under investigation 3 and the provisions of this act applicable to the alleged 4 violation. A request for documentary material must describe the 5 material to be produced with reasonable particularity so as to 6 fairly identify the documents demanded, provide a return date 7 within which the material is to be produced and identify the 8 member of the Attorney General's staff to whom the material 9 shall be given. For this purpose, the Attorney General may issue 10 subpoenas, examine witnesses and receive evidence. If a person 11 objects to or otherwise fails to comply with a subpoena or 12 request for testimony, the Attorney General may file in 13 Commonwealth Court an action to enforce the subpoena or request. 14 Notice of hearing the action and a copy of all pleadings must be 15 served upon the person, who may appear in opposition. 16 (c) Confidentiality.-- 17 (1) Any testimony taken or material produced shall be 18 kept confidential by the Attorney General except that the 19 Attorney General may use that information: 20 (i) in a judicial proceeding; 21 (ii) if the disclosure is authorized by the court 22 for good cause shown; or 23 (iii) if confidentiality is waived by the person 24 being investigated and by the person who has testified, 25 answered interrogatories or produced materials. 26 (2) At the Attorney General's discretion, the Attorney 27 General may disclose information discovered under this 28 section to the United States Department of Justice, the 29 Federal Trade Commission, another state or territory of the 30 United States or another agency of the Commonwealth, upon the 20010S0021B0015 - 11 -
1 prior certification of an appropriate official of the 2 recipient that the information will be maintained in 3 confidence other than use for official purposes and that the 4 recipient will abide by the provisions of paragraph (1). 5 Trade secrets may not be disclosed by the Attorney General 6 without the approval of Commonwealth Court, after notice to 7 the person who produced the information. 8 (3) The Attorney General may use information, including 9 documents, obtained under this section in an action brought 10 under this act or Federal antitrust statutes; however, 11 information relating to trade secrets may not be made public 12 in an action without the approval of the court in which the 13 action is pending, after notice to the person who produced 14 the information. 15 (d) Limitation on use.--No criminal prosecution under this 16 act may be brought by the Attorney General based principally 17 upon information or documents obtained in a civil investigation 18 under this section. 19 (e) Wrongful disclosure of information.--A person who 20 publishes or communicates any procedure, testimony or material 21 produced, which is required to be kept confidential under this 22 section, commits a misdemeanor of the third degree. 23 Section 10. Consistency with Federal law. 24 The provisions of this act which parallel provisions of 25 Federal antitrust statutes shall be construed consistently with 26 pertinent Federal statutes and Federal judicial opinions 27 interpreting those Federal statutes. 28 Section 11. Effective date. 29 This act shall take effect July 1, 2002. L11L12SFL/20010S0021B0015 - 12 -