Def.'s Mot. to Strike ¶ 6. In support, Defendant cites decisions of the Second Circuit, the Eighth Circuit, and a Kentucky district court. Def.'s Br. Supp. Mot. to Strike 5-6 (citing Lipsky v Commonwealth United Corp., 551 F.2d 887 (2d Cir. 1976); Data Processing Fin. & Gen. Corp. v. IBM, 430 F.2d 1277 (8th Cir. 1970) (per curiam); and Hyland v. Homeservices of Am. Inc., No. 3:05-cv-612-R, 2007 WL 1959157 (W.D. Ky. June 28, 2007)). As Plaintiff succinctly observes, however, Defendant's argument is foreclosed by Sixth Circuit precedent. Pl.'s Resp. to Def.'s Mot. 6-7 (citing United States v. Cohen, 946 F.2d 430 (6th Cir. 1991)).
Indeed, it has been specifically established that a private party cannot premise a treble damage action under Section 4 upon violations of a government consent decree. Paul M. Harrod Co. v. A.B. Dick Co., 194 F. Supp. 502, 504 (N.D.Ohio 1961);See also, Sound, Inc. v. American Tel. Tel. Co., [1979-2] Trade Cas. ¶ 62,974, at 79,547-48 (S.D.Iowa 1979, aff'd, 631 F.2d 1324 (8th Cir. 1980)); Cinema Service Corp. v. Twentieth Century-Fox Film Corp., 477 F. Supp. 174, 177-78 (W.D.Pa. 1979); Control Data Corp. v. International Business Machines Corp., 306 F. Supp. 839, 846 (D.Minn. 1969), aff'd, 430 F.2d 1277, 1278 (8th Cir. 1970). Plaintiff attempts to distinguish Paul M. Harrod by suggesting that it turns on the fact that references to the consent decree would prejudice the jury and that references to it were readily excisable.
As the district court explained, strangers to a consent decree generally do not have standing to enforce a consent decree. See Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 750, 95 S.Ct. 1917, 44 L.Ed.2d 539 (1975); Data Processing Fin. Gen. Corp. v. Int'l Bus. Machs. Corp., 430 F.2d 1277 (8th Cir. 1970) (per curiam), aff'g Control Data Corp. v. Int'l Bus. Machs. Corp., 306 F.Supp. 839 (D.Minn. 1969). In order for a third party to be able to enforce a consent decree, the third party must, at a minimum, show that the parties to the consent decree not only intended to confer a benefit upon that third party, but also intended to give that third party a legally binding and enforceable right to that benefit.
This effect is similar to that caused by IBM's past practices of offering tabulating and computer equipment only for lease and not for sale. These practices also spawned antitrust litigation, resulting in a 1935 injunction and a 1956 consent decree. See Control Data Corp. v. IBM Corp., 306 F. Supp. 839 (D.Minn. 1969), aff'd, 430 F.2d 1277 (8th Cir. 1970). We also disagree with the district court's view that AMI admitted that leasing companies "compete with IBM and constrain IBM's ability to set prices or exclude competition in the market for new large scale main frame computers."
This principle has been applied frequently in antitrust cases. See, e.g., Data Processing Financial Gen'l Corp. v. IBM Corp., 430 F.2d 1277, 1278 (8th Cir. 1970) (per curiam); Cinema Service Corp. v. Twentieth Century-Fox Film Corp., 477 F. Supp. 174, 177-78 (W.D.Pa. 1979). To reject it would be to turn every consent decree into a statute.
In United States v. Swift Co., 286 U.S. 106, 52 S.Ct. 460, 76 L.Ed. 999 (1932), for example, the Court summarily rejected the contention that a consent decree should be considered a contract for purposes of determining whether the courts have the power to modify such a decree absent the parties' consent. And, in Control Data Corp. v. International Business Machines Corp., 306 F. Supp. 839 (D.Minn. 1969), aff'd, 430 F.2d 1277 (8th Cir. 1970), the court rejected the argument that a consent decree should be treated as a contract for purposes of determining whether a third party beneficiary action could be maintained for breach of that contract. As Professor Handler has pointed out, treating consent decrees differently in distinct contexts is not inconsistent:
( E. g., Buckeye Co. v. Hocking Valley Co. (1925) 269 U.S. 42, 46 S.Ct. 61, 70 L.Ed. 155; United States v. ASCAP (2d Cir. 1965) 341 F.2d 1003; Control Data Corp. v. IBM Corp. (D.Minn. 1969) 306 F. Supp. 839, aff'd sub nom. Data Processing Financial General Corp. v. IBM Corp. (8th Cir. 1970) 430 F.2d 1277. See Dahl, Inc. v. Roy Cooper Co. (9th Cir. 1971) 448 F.2d 17, 20.
Generally, non-parties have no right of action based upon a settlement or consent decree. Data Processing Financial General Corp. v. Int'l Business Machines Corp., 430 F.2d 1277 (8th Cir. 1970). It has been held that a consent decree is not enforceable directly or in collateral proceedings by those who were not parties to it even though they were intended to be benefited by it. Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 95 S.Ct. 1917, 44 L.Ed.2d 539 (1975).
The rationale for strictly limiting standing to sue for violation of antitrust consent decrees was stated in a pre- Blue Chip decision: "To permit enforcement of an antitrust consent decree by third parties in reality makes the decree a statute continuing perhaps in perpetuity, and one withal not enacted by Congress." Control Data Corp. v. IBM Corp., 306 F.Supp. 839, 846 (D.Minn. 1969), aff'd, 430 F.2d 1277 (8th Cir. 1970); see Gautreaux v. Pierce, 707 F.2d 265, 273 (7th Cir. 1983) (antitrust consent decree creates enforceable rights in plaintiff only) (Posner, J., concurring). The Blue Chip statement is not limited solely to government antitrust consent decrees, as that case was itself a suit for violation of the securities law.
E.g., Baush Machine Tool Co. v. Aluminum Co. of America, 79 F.2d 217, 226 (2d Cir. 1935); Cinema Service Corp. v. Twentieth Century-Fox Film Corp., 477 F.Supp. 174, 178 (W.D.Pa. 1979); Kunc v. ARA Services, Inc., 414 F.Supp. 809, 812 (W.D.Okla. 1976); Control Data Corp. v. International Business Machines Corp., 306 F.Supp. 839, 843 (D.Minn. 1969), aff'd, 430 F.2d 1277 (8th Cir. 1970). The purpose of excluding consent decrees from the scope of Section 5(a) of the Clayton Act, and from use as evidence in subsequent cases, is to encourage the use of consent decrees to settle antitrust suits.