Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Justice Department questions proposed limits on court-reporting contracts, (Aug 26, 2016)

By Edward L. Puzzo, J.D.

Restrictions on the ability of court reporters to enter third-party contracts should be imposed only where there is credible evidence of a significant risk of harm to the judicial process, and with a view towards avoiding discouraging innovative contract terms in deliver court-reporting services, the Department of Justice Antitrust Division has announced.

California Assemblyman Scott Wilk had sought the opinion of the Antitrust Division on the competitive effects of proposed state regulation of court-reporting services. The proposed legislation concerns contracts between local court reporters or court reporting service providers and third parties, such as insurance companies, for more than one deposition at a time. Assemblyman Wilk was concerned that the proposal to subject out-of-state court reporter service provider firms to the jurisdiction of the California Court Reporters Board could have the effect of banning or limiting the use of multi-case third-party contracts.

According to the Antitrust Division’s statement, state legislators should first consider whether multi-case contracting presents a significant risk to the integrity of the judicial process by evaluating, for example, any evidence of harm in states that currently do not restrict or prohibit multi-case contracts. Second, legislators could consider whether the existing regulatory scheme is sufficient to address any risk of harm. Third, legislators could assess the consumer cost of regulations that limit competition. Generally, consumers benefit when presented with a wider variety of goods and services. To make a fully informed decision, the legislature should consider the likelihood and magnitude of competitive harm in higher prices or lower quality that could result from additional regulation. If legislators make a considered judgment after weighing the competitive costs that there is a need for additional regulation, the Antitrust Division stated, legislators should determine whether the bill's provisions are narrowly tailored to curing the potential harm.

"Consumers benefit when a competitive marketplace presents them with a wider variety of services," said Renata Hesse, Acting Assistant Attorney General in charge of the Antitrust Division. "When analyzing legislation that could result in a ban or limitation of third-party court-reporting contracts, the California State Legislature should consider a company’s ability to realize significant savings under a third-party court-reporting contract and pass savings on to its customers."

News: Antitrust AntitrustDivisionNews CaliforniaNews