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Telephone giants AT&T Corp. and Verizon Communications Inc. should have known better than to get New York City lawyer Curtis Trinko upset about poor phone service. Angered by sporadic and often nonexistent service, Trinko filed a lawsuit that has made its way to the U.S. Supreme Court. The case has gotten major attention from corporate America by raising key antitrust issues. The high court, which has generally stayed away from antitrust disputes in recent years, will hear arguments Oct. 14 in Verizon Communications Inc. v. Law Offices of Curtis V. Trinko. “Its potential implications go way beyond the mind-numbing insularity of the Telecommunications Act,” said former solicitor general Seth Waxman at a recent briefing on the upcoming term by the National Legal Center for the Public Interest. Trinko’s lawsuit is one of a handful of significant business cases that the Court has already docketed for the fall term. Other cases include an unusual age discrimination suit, an Americans With Disabilities Act case arguing that addiction is a disability, and a case that questions whether smog-ridden Southern California cities can impose tougher air quality standards than the federal government. In the opening weeks of the new term, they will likely add more cases of significance to the business community. The Trinko case dates back to 1997, when the lawyer, a securities litigator, moved to new offices and signed up for phone service. The Telecommunications Act of 1996, which sought to force competition in the local and long-distance marketplace, had recently been passed. In New York City, the Bell Atlantic Corp. — now Verizon — was compelled to provide access to its local service wires to new local competitors. Long-distance giant AT&T was one of these rivals. By all accounts, it was not a smooth transition. Whether it was because of software glitches or Bell Atlantic’s reluctance to help its competitors, service got bollixed up to the point where, under pressure from the Federal Communications Commission, Bell Atlantic entered into a consent decree and paid $10 million to AT&T and other competitors. Meanwhile, Trinko had accepted an attractive offer from AT&T to provide his relatively small law office with both long-distance and local service at its new location on West 46th Street. Almost immediately, this decision turned into a nightmare. “Work orders got lost, we were cut off, we’d get service for a while, then lose it again,” says Trinko, who employs five attorneys and several support staff. “We live on the phone. It’s not good for your image, for your clients, if you have to call them on cell phones. We had two cell phones for the whole office.” When he complained, the story Trinko got from AT&T personnel was that “their hands are tied, they had to go through Bell Atlantic. No one else could touch Bell Atlantic’s equipment, they said.” With his irritation level rising, Trinko looked into the new telecommunications law and decided to take action. “I don’t normally file cases for myself,” he says. “I litigate for other people.” His first attention-getting tactic was to sue Bell Atlantic — not AT&T, the company whose customer he was. Bell Atlantic objected, asserting that the consent decree takes care of any problems it has with AT&T, and that it is unfair to also be pursued by one of AT&T’s customers. Trinko, says Verizon Deputy General Counsel John Thorne in his brief, “is an indirect purchaser asserting injury only as an indirect result of injury to the direct victim.” Trinko is excited at the prospect of watching his name get bandied around the high court, but he knew as soon as the justices granted review that he would not argue the case on his own behalf. ” ‘Physician, do not heal thyself’ is how I saw it,” says Trinko. “ No matter what kind of ego you have, when you are at the Supreme Court, you go for the A team.” In Trinko’s case, the A team is led by Donald Verrilli Jr., a partner in the D.C. office of Jenner & Block and a veteran advocate at the Supreme Court. Verrilli says that the case “has taken on a life of its own” and could have major impact on antitrust law. Representing Verizon is another high court veteran: Richard Taranto of D.C.’s Farr & Taranto. Solicitor General Theodore Olson will argue for the United States on Verizon’s side of the dispute. The substance of Trinko’s claim was that Bell Atlantic (Verizon) violated Section 2 of the Sherman Act by using its monopoly power to keep rivals out of the marketplace, thereby warranting treble damages and injunctive relief. His complaint was dismissed at the district court level, but the U.S. Court of Appeals for the 2nd Circuit reversed, finding not only that Trinko had standing, but that he was right about Section 2. “A monopolist has a duty to provide competitors with reasonable access to essential facilities,” the panel stated, adding that the company should not use its monopoly in its original “wholesale” market to leverage a competitive advantage in the new “retail” market for local service. Verizon, joined by other corporations and the Bush administration, complained that the 2nd Circuit ruled too broadly, and that antitrust laws should come into play only if a company’s actions are exclusionary or predatory. Upholding the ruling will impose a new requirement on companies to affirmatively help their competitors, they say — far more than what the antitrust law requires. “Forced sharing dampens incentives to invest,” says Thorne. The monopoly leveraging part of the 2nd Circuit’s ruling is also a threat to business, Verizon’s allies argue, because it, too, would prohibit business practices that fall short of anticompetitive conduct. “The decision below would open new frontiers of liability for successful enterprises in a range of industries,” the Washington Legal Foundation argues in a brief on Verizon’s side authored by Kirkland & Ellis D.C. partner Steven Bradbury. But Trinko has allies as well, including 13 states, the District of Columbia, and Puerto Rico. In a brief authored by New York Solicitor General Caitlin Halligan, they argue that “antitrust remedies must remain available to further competition in local telecommunications markets.” The Consumers Union and Consumer Federation of America also support Trinko, arguing in a brief that it is “vital that consumers, who are often the immediate focus and always the ultimate victims of anticompetitive conduct, have standing to vindicate their rights under the antitrust laws.” The brief was written by Michel McNeely, special counsel in the D.C. office of Gray Cary Ware & Freidenrich. Other cases docketed for the fall term so far: • General Dynamics Land Systems Inc. v. Cline, No. 02-1080, asks: If whites can claim they are victims of “reverse discrimination” under civil rights laws aimed at protecting minorities, can younger workers make the same claim under laws that protect older workers against discrimination? The case was brought under the Age Discrimination in Employment Act of 1967 by a class of workers between ages 40 and 49 who claimed older workers unfairly received more benefits than they did. In 1997, defense contractor General Dynamics cut costs by offering full retirement health benefits only to those workers who had 30 years of service and were over 50 as of July 1. The ADEA protects all workers 40 and older from age bias, so the 40-49 class claimed it was victimized, because they were not given the same enhanced benefits granted to over-50s. The 6th Circuit agreed, triggering the appeal. Employer groups fear that if the 6th Circuit’s decision is upheld, efforts to help older workers nearing retirement will be too dangerous to undertake because companies will be vulnerable to legal attack by younger workers who are over 40. By the same token, AARP, which represents workers 50 and older, is also concerned about the impact of a high court ruling upholding the 6th Circuit. Employers might resolve the disparity in the treatment of older and younger workers protected by the ADEA by eliminating benefits for both, said AARP lawyer Danial Kohrman at a recent briefing. “We are concerned that it could be the engine to justify the stripping of benefits for all workers over 40.” The case will be argued Nov. 12. • Raytheon Co. v. Hernandez, No. 02-749, is the next in a series of Americans With Disabilities Act cases before the Court. The case, set for argument Oct. 8, involves Joel Hernandez, an employee who resigned under threat of firing in 1991 after testing positive for cocaine use on the job at the Hughes Missile Systems Co. in Arizona (since purchased by Raytheon). After what Hernandez claims was a successful drug and alcohol rehabilitation, he reapplied for a job with his former employer, but was turned down. Hernandez claimed he was discriminated against because of his former addiction. A 9th Circuit panel agreed that the employer’s action violated the ADA. Raytheon claims its across-the-board rule against rehiring fired employees does not violate the law. • Engine Manufacturers Association v. South Coast Air Quality Management District, No. 02-1343, concerns Southern California’s efforts to curtail air pollution from older buses and trucks. These efforts will be on the line as engine manufacturers and other businesses claim that the federal Clean Air Act pre-empts such local regulation. The 9th Circuit last year upheld a 2001 district court ruling that said the federal law does not pre-empt local air pollution rules, so California could enforce the new requirements, mainly aimed at forcing local governments to buy more fuel-efficient buses and trucks. Automobile and oil-related companies are urging the high court to overturn the ruling, which they say could lead to differing emission standards nationwide. A version of this article first appeared in the October issue of the American Lawyer Media magazine Corporate Counsel.

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