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Boy was Judge Richard Posner of the U.S. Court of Appeals for the Seventh Circuit eager to weigh in on antitrust pleading standards in the post-Twombly age! A mere four weeks after several wireless carriers filed a request for permission to pursue an interlocutory appeal of Chicago federal district court judge Matthew Kennelly’s refusal to dismiss a price-fixing class action against them, Judge Posner produced a 13-page ruling that not only affirms Judge Kennelly’s ruling, but seems to lower the bar for antitrust complaints in the Seventh Circuit. And he did it without merits briefing or oral argument from the parties. The quick action is particularly noteworthy because a separate Seventh Circuit panel is considering the Twombly pleading standard in an interlocutory appeal in the In re Potash antitrust class action. That case has already been fully briefed and argued, and awaits a ruling. The Posner opinion, written on behalf of a panel that also included Judges Diane Wood and John Tinder, comes in a case alleging a conspiracy among wireless carriers to fix prices for text messages. Judge Kennelly dismissed the plaintiffs’ first complaint, but ruled that their amended complaint, which included allegations that the carriers discussed pricing at their trade association meetings, could proceed. The defendants–Verizon, AT&T Mobility, Sprint, and T-Mobile–then sought leave to appeal Judge Kennelly’s ruling in a Dec. 2 petition to the Seventh Circuit. The Posner panel responded with surprising alacrity, suggesting that some judges on the Seventh Circuit have been waiting for an opportunity to address the pleading standards set by the U.S. Supreme Court in Bell Atlantic v. Twombly and extended in Ashcroft v. Iqbal. “Pleading standards in federal litigation are in ferment after Twombly and Iqbal,” Judge Posner wrote. “This court has only twice discussed the application of Twombly to antitrust violations, and in both cases only in passing.” After spending seven pages justifying the panel’s decision to accept the interlocutory appeal, Posner needed only a few more to gladden the hearts of antitrust plaintiffs in the Seventh Circuit by putting a plaintiffs-friendly spin on Twombly pleading standards. The opinion concludes that, in this case, the plaintiffs offered sufficient circumstantial evidence of an antitrust conspiracy by disclosing meetings of the carriers and a parallel and uniform rise in text messaging prices. “The second amended complaint alleges a mixture of parallel behaviors, details of industry structure, and industry practices, that facilitate collusion,” the judge wrote. “There is nothing incongruous about such a mixture. If parties agree to fix prices, one expects that as a result they will not compete in price–that’s the purpose of price fixing. Parallel behavior of a sort anomalous in a competitive market is thus a symptom of price fixing, though standing alone it is not proof of it; and an industry structure that facilitates collusion constitutes supporting evidence of collusion.” Co-lead plaintiffs counsel Mary Jane Fait of Wolf, Haldenstein, Adler, Freeman & Herz told us Judge Posner apparently wanted to clarify that it’s still possible, post-Twombly, to plead an antitrust case with a showing of parallel pricing plus and circumstantial evidence. “He thought there was substantial confusion,” Fait said. “He thought this circuit, and perhaps by extension other circuits, needed clarification.” Verizon is represented by Winston & Strawn; Kellogg Huber Hansen Todd Evans & Figel; and Schiff Hardin. Sprint has Williams & Connolly; T-Mobile is represented by Davis Polk & Wardwell; and AT&T has Sidley Austin. Defense counsel either didn’t return our calls or declined comment.

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