So last Friday, the Department of Justice formally filed an appeal of the trial court’s ruling in its fight against NAR with the US Court of Appeals for the DC Circuit. This was as obvious and as predictable as the sun rising in the East. I wrote about that in a special public VIP post here.
While I’ve been looking for the actual brief that the DOJ filed with the Court of Appeals, I don’t think it’s available to the public just yet. So in the meantime, I decided to have some fun with AI on this, while learning the capabilities of ChatGPT.
So here is what the AI thinks is likely to happen.
The first question I asked ChatGPT is: “Is an interim agreement between the DOJ and the defendant in the absence of a public hearing legally enforceable?”
An interim agreement between the DOJ and a defendant in an antitrust case may be legally enforceable if it meets the requirements of the Tunney Act. However, such agreements do not become final until after the court has conducted a public hearing and approved the settlement.
Under the Tunney Act, the DOJ must file any proposed antitrust settlement with the court and allow for a period of time for public comments. The court must then conduct a public hearing to determine whether the settlement is in the public interest. If the court approves the settlement, it becomes effective immediately, and the defendant must comply with its terms.
In some cases, the DOJ and the defendant may enter into an interim agreement while the Tunney Act process is ongoing. This may be done to preserve the status quo or to avoid further harm to consumers. However, any interim agreement must still comply with the requirements of the Tunney Act, including the requirement that the court conduct a public hearing and approve the settlement before it becomes final and enforceable.
Therefore, an interim agreement between the DOJ and a defendant may be legally enforceable in the absence of a public hearing, but only if the court later approves the settlement after conducting a public hearing and finding that it is in the public interest. [Emphasis added]
Since nothing in the trial record suggests that the district court conducted a public hearing or found that enforcing the no-investigation interim settlement is in the public interest, I’m thinking the Court of Appeals likely reverses.
But let’s continue.
I read the Tunney Act. Well… I skimmed it. So I asked my AI assistant to see if it would do the research for me. Here’s my question: “What actions by the government are specifically required by the Tunney Act?”
The Tunney Act specifically requires the government to take the following actions when seeking court approval for an antitrust settlement:
- File the proposed settlement and any other relevant documents with the court.
- Publish the proposed settlement and any other relevant documents in the Federal Register and a newspaper of general circulation.
- Allow for a period of at least 60 days for public comments on the proposed settlement.
- Consider and respond to any public comments received on the proposed settlement.
- Request that the court conduct a public hearing to determine whether the proposed settlement is in the public interest.
- Provide notice of the public hearing to the public, including the publication of notice in the Federal Register and a newspaper of general circulation.
- Present evidence and arguments at the public hearing to support the proposed settlement.
- Consider and respond to any further comments or evidence submitted at the public hearing.
- Obtain court approval of the proposed settlement after the court has considered all relevant factors, including the impact of the proposed settlement on competition and the public interest.
Once the proposed settlement has been approved by the court, the defendant must comply with its terms. [Emphasis added]
Again, since the trial record from the lower court is missing any evidence that the emphasized required actions were taken by the DOJ… primarily because the DOJ withdrew from the settlement agreement… I think it’s pretty straightforward that the Tunney Act requirements were not met, which means the settlement is not legally valid.
Now we get to the heart of the matter. I asked ChatGPT: “If the DOJ withdraws from the settlement under Tunney Act, are interim settlement agreements enforceable?”
If the DOJ withdraws from a proposed settlement under the Tunney Act, any interim settlement agreements that were entered into while the Tunney Act review was ongoing may no longer be enforceable. This is because the interim agreements are often contingent upon the final approval of the proposed settlement by the court.
If the DOJ withdraws from the proposed settlement, it means that the settlement has not received final approval from the court, and any interim agreements that were entered into are no longer enforceable. The defendant would need to negotiate a new settlement with the DOJ and undergo the Tunney Act review process again before a new settlement could take effect.
It is worth noting that the court ultimately has the authority to approve or reject a proposed settlement, even if the DOJ has withdrawn from it. If the court determines that the proposed settlement is still in the public interest, it may still approve the settlement, and any interim agreements that were entered into may become enforceable. [Emphasis added]
Since ChatGPT likes to do a lot of “maybe, if this then that, and depends” kind of answers, I think the “may no longer be enforceable” is about as straight an answer we’re likely to get from an AI.
We know that the court did not approve the final proposed settlement, even after the DOJ withdrew, so that won’t apply here. Since interim agreements are “often contingent upon final approval” — which makes all kinds of sense — they are not valid and not enforceable.
But what if the no-investigation settlement was not contingent? That’s NAR’s position, and the lower court agreed with that.
So I asked ChatGPT about that: “Could an interim settlement agreement be not contingent on final approval of the proposed settlement under Tunney Act?”
An interim settlement agreement could potentially be structured in a way that is not contingent upon the final approval of the proposed settlement under the Tunney Act. However, this would be highly unusual, as the purpose of the Tunney Act review process is to ensure that any proposed antitrust settlement is in the public interest and that the terms of the settlement adequately address the anticompetitive concerns at issue in the case.
Typically, interim settlement agreements are negotiated while the final settlement is being reviewed under the Tunney Act, and they are intended to maintain the status quo or to address urgent concerns while the review is ongoing. As such, interim agreements are usually contingent upon the final approval of the proposed settlement by the court.
If an interim settlement agreement were not contingent upon the final approval of the proposed settlement under the Tunney Act, it would likely require a separate legal mechanism for enforcement, as the Tunney Act review process is specifically designed to ensure that proposed antitrust settlements are in the public interest and adequately address anticompetitive concerns. Without Tunney Act review and court approval, the enforceability of any settlement agreement would be uncertain. [Emphasis added]
As expected, not a definitive straight answer. But boy, that seems fatal to NAR’s case on appeal.
First, any interim agreement not being contingent would be “highly unusual.” It also makes zero sense practically or logically. So that’s a problem.
Second, even if the interim agreement were somehow not contingent, in an antitrust context, that agreement is on shaky ground. The whole point of the Tunney Act is to ensure that any settlement is in the public interest, and there are specific steps that have to be followed before such a determination can be made. The judge in the lower court did not issue any finding that enforcing the interim agreement is in the public interest, and many of the specific steps were not followed.
The main conclusion to be drawn, I think, is that ChatGPT is a lot of fun. It’s also quite useful in research. Frankly, the most useful thing I got from using AI here was reference to sources. I asked ChatGPT for sources for its answers and got this list back:
- The Tunney Act (15 U.S.C. § 16) – This is the federal law that sets forth the requirements for court review and approval of proposed antitrust settlements.
- United States v. Microsoft Corp., 56 F.3d 1448 (D.C. Cir. 1995) – In this case, the D.C. Circuit Court of Appeals held that the Tunney Act requires the government to file the proposed settlement with the court, allow for a period of public comment, and obtain court approval before the settlement can take effect.
- Federal Trade Commission, Bureau of Competition, Policy Statement on the Commission’s Role in the Re-Approval Process for Proposed Final Judgments, 67 Fed. Reg. 60,827 (2002) – This policy statement explains the FTC’s procedures for obtaining court approval of proposed antitrust settlements, which are similar to those required by the Tunney Act.
- United States v. SBC Commc’ns Inc., 489 F. Supp. 2d 1 (D.D.C. 2007) – In this case, the court explained the procedures required by the Tunney Act, including the filing of the proposed settlement with the court, the publication of notice in the Federal Register and a newspaper of general circulation, and the conduct of a public hearing to determine whether the proposed settlement is in the public interest.
That’s not bad for 2 minutes of work! This is the kind of work I used to do as a summer intern at a law firm; do research and then summarize the key findings.
I’ll have to explore this new AI tool in more detail in the future, but boy, it’s impressive so far.
The secondary conclusion, of course, that can be fairly drawn is that NAR will lose in the DC Court of Appeals. One can never be certain with lawsuits, and ChatGPT never likes to give definitive answers, but… yeah… looks bad for NAR on this particular case.
PS: Am I the only one who finds this video amusing as hell, but terrifying as well?