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Private plaintiffs may be deterred from filing long-shot antitrust claims against big corporations because of a major Supreme Court ruling issued Monday. By a 7-2 vote in Bell Atlantic v. Twombly, the Court said “a bare assertion of conspiracy will not suffice” to get beyond the summary judgment stage in claims under Section 1 of the Sherman Act. The decision, while not establishing a brand-new standard, was viewed as a significant victory for big business in efforts to stave off class-action antitrust lawsuits. Justice David Souter, writing for the majority, voiced the same concern about “discovery abuse” that businesses have expressed concerning private antitrust litigation. “The threat of discovery expense will push cost-conscious defendants to settle even anemic cases,” Souter wrote. The decision stemmed from a suit brought by Milberg Weiss & Bershad on behalf of a class of local telephone and internet service subscribers claiming that Bell Atlantic and other regional phone companies had agreed not to compete on each other’s turf, and had engaged in other “parallel conduct” aimed at discouraging upstart carriers from breaking into the business. The district court dismissed the complaint, but the U.S. Court of Appeals for the 2nd Circuit revived it, triggering concern that the high court might approve a more permissive rule for antitrust plaintiffs. But the Souter majority relieved those fears. “Because the plaintiffs here have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed,”Souter wrote, adding that he is only requiring “enough facts to state a claim to relief that is plausible on its face.” Verizon Communications, the successor to Bell Atlantic, issued a statement applauding the decision. “The Supreme Court’s decision embraces an important principle about protecting the freedom of firms to make unilateral decisions on what markets to enter or not enter,” said John Thorne, Verizon senior vice president and deputy general counsel. Other antitrust experts also saw it as a victory for antitrust defendants. “Overall, good news for business, bad news for plaintiffs and class-action lawyers,” said Edward Schwartz, a partner at DLA Piper. “The decision should discourage plaintiffs from filing antitrust conspiracy claims based upon nothing more than evidence of parallel conduct and a hope that more will turn up in discovery.” John Peirce of Bryan Cave said, “American business has dodged a bullet.” But he added that Souter’s standard is still low enough that the decision won’t discourage legitimate antitrust lawsuits. Justice John Paul Stevens, who often recalls his days as an antitrust lawyer in Chicago before he joined the Court, wrote a strong dissent, joined in part by Justice Ruth Bader Ginsburg. Stevens said the majority had weakened not only antitrust laws but the pleading requirements of the Federal Rules of Civil Procedure, which are the basis for the antitrust standard as well. Stevens also displayed little sympathy for defendants on the issue of discovery abuse. “The transparent policy concern that drives the decision,” wrote Stevens, “is the interest in protecting antitrust defendants — who in this case are some of the wealthiest corporations in our economy — from the burdens of pretrial discovery.”
Tony Mauro can be contacted at [email protected].

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