MLA freed of 56-year-old Dept. of Justice decree

First published in Landings, September, 2014.

On July 21, representatives of the Maine Lobstermen’s Association and the U.S. Department of Justice met before the Honorable D. Brock Hornby, United States District Court Judge, at the district Courthouse in Portland. There both parties spoke about the reasons that the consent decree declared against the MLA in 1958 should be removed. There was no acrimony involved; both sides agreed that it was in the public interest to remove the constraints on the MLA imposed by the decree so many years ago. As it turned out, Judge Hornby was a colleague of Judge Edward Gignoux, in front of whom the initial case was tried. We present here selections from the July court transcript.

Michele Cano, for the United States Department of Justice Antitrust Division:

After more than a half a century the MLA now seeks to terminate the final judgment, and the United States supports this request. The 1958 final judgment long ago accomplished its purpose and is no longer necessary to protect competition. The Maine lobster industry has changed significantly since the final judgment was entered, and the Sherman Act has been amended several times, making the terms of the final judgment obsolete.

The MLA, its members, and all lobstermen remain fully bound by a more robust Sherman Act than existed back in 1958. Moreover, the final judgment may be deterring the MLA from engaging in legitimate, lawful advocacy and education efforts related to fisheries management.

Mary Ann Mason, Crowell & Moring, Washington, D.C., for the MLA:

I think it’s notable that the Department of Justice not only concurs with the Maine Lobstermen’s Association’s request but, in addition, in its papers the department has noted that it believes that the final judgment may in fact be deterring the Maine Lobstermen’s Association from engaging in legitimate, lawful activities. And on behalf of the Maine Lobstermen’s Association, I’d like to emphasize that in fact the final judgment does burden the work of the association.

So we come to the question of why we are making this request. And the reason is that the Maine Lobstermen’s Association has an important voice to bring, but it is burdened by the need to remain a co-op, which is a taxable entity. The Maine Lobstermen’s Association has been planning to undertake a corporate reorganization that would allow it to become a trade association under the federal and state tax laws, and it cannot do that until the final judgment is removed.

Judge Hornby:

You must know, even though you’re from out of state, those who argued that the lobstering is very important to Maine, historically, economically, culturally, it’s part of our identity, it’s on our license plates. And if you travel, not just in this country but other places, you see Maine lobster in virtually every restaurant menu. So it really – I think when other people hear the word Maine probably the next word that comes with it is lobster.

He makes mention of Judge Edward Gignoux, who he knew himself as a young lawyer.

And at the time Judge Gignoux was 41 years old; he was the ninth judge ever to be appointed in this district. President Washington, George Washington, appointed the first judge in 1789, and Judge Gignoux was the ninth judge….So then we fast forward obviously now to 2014, 56 years, and it’s interesting to think about all the changes, not just space travel and Sputnik beyond, but computers, the Internet, smartphones, iPads, and more important for the lobstering industry, I expect, are things like GPS and fisheries management, even the change from wooden to metal and plastic traps they use now out in the bay. And as both of you pointed out, the change in the antitrust laws are pretty interesting from, what was it, a misdemeanor at the time of this decree? [To] now a felony, and I think the maximum fine is now a hundred million dollars for a corporation, and it used to be $50,000, I think.

Finally, Judge Hornby rules.

The Government has agreed to the defendant’s characterization of the restraints of legal activity that are being imposed, and given all the changes that have occurred here and the law and lobstering and fisheries management and the environment, the changes for the parties, one being deceased, the other reorganizing, I conclude that terminating this decree does not disserve the public interest but it is within the reaches of the public interest and, therefore, I do grant the agreed-to motion.