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The U.S. Supreme Court on May 21 rendered the following decisions: The justices ruled, 7-2, that a plaintiff filing an antitrust suit under the Sherman Act must allege specific facts in the complaint showing that the defendants had participated in a conspiracy. Bell Atlantic Corp. v. Twombly, No. 05-1126. William Twombly filed a class action on behalf of telephone and Internet service subscribers, claiming that the regional companies created in the aftermath of the breakup of AT&T in the early 1980s had violated Section 1 of the Sherman Act, which prohibits “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations.” The complaint alleged that the local telephone companies had conspired not to compete with one another and had engaged in other “parallel conduct” aimed at discouraging upstart carriers from breaking into the business. Under the Telecommunications Act of 1996, local phone companies were to open their monopoly markets to competition. In return, they could enter the long-distance market. At the time, the four defendant companies controlled more than 90% of the market for local phone service: Bell Atlantic Corp., BellSouth Corp., Qwest Communications International Inc. and SBC Communications Inc. A New York federal judge dismissed the case, saying the lawsuit contained no direct factual allegations of conspiracy. The 2d U.S. Circuit Court of Appeals reversed, holding that those filing the lawsuit had stated “a plausible claim of conspiracy.” The court ruled that Twombly’s pleading, which inferred a conspiracy by the defendants’ “parallel conduct,” was sufficient. The justices reversed, ruling that a complaint under the Sherman Act should be dismissed “when it alleges that major telecommunications providers engaged in certain parallel conduct unfavorable to competition, absent some factual context suggesting agreement, as distinct from identical, independent action.” Writing on behalf of the court, Justice David H. Souter said, “Because the plaintiffs here have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed,” he wrote, adding that he is only requiring “enough facts to state a claim to relief that is plausible on its face.” Souter’s opinion was joined by Chief Justice John G. Roberts Jr. and justices Antonin Scalia, Anthony M. Kennedy, Clarence Thomas, Stephen G. Breyer and Samuel A. Alito Jr. Justices John Paul Stevens and Ruth Bader Ginsburg dissented. SCHOOLS AND EDUCATION The justices ruled unanimously that parents of children with special needs have independent, enforceable rights under the Individuals With Disabilities in Education Act and can therefore represent themselves in IDEA litigation. Winkelman v. Parma City School District, No. 05-983. Jacob Winkelman has autism spectrum disorder. After the local school district proposed placing him in a public elementary school, his parents filed a complaint alleging that the district had failed to provide Jacob with a free appropriate public education, as required by IDEA. Pending the resolution of these challenges, the Winkelmans enrolled Jacob in a private school at their own expense. An Ohio federal court ruled that the district had provided Jacob with a free appropriate public education. The 6th Circuit dismissed the Winkelmans’ appeal, saying Jacob had to be represented by counsel. The court said that the right to a free appropriate public education “belongs to the child alone.” Therefore, “any right on which the [parents] could proceed on their own behalf would be derivative” of the child’s right. The justices reversed. Writing on behalf of the court, Kennedy said parents have legal rights under IDEA. “They are, as a result, entitled to prosecute IDEA claims on their own behalf,” he said. “It is not a novel proposition to say that parents have a recognized legal interest in the education and upbringing of their child.” He added, “a parent of a child with a disability has a particular and personal interest” in pursuing equal opportunities for the child. TAXATION The justices held unanimously that only the U.S. Tax Court may review refusals by the Internal Revenue Service to reduce interest payments on people who underpay their taxes. Hinck v. U.S., No. 06-376. In 1986, John Hinck was a limited partner in an entity called Agri-Cal Venture Associates. Along with his wife, Pamela, Hinck filed a joint return for 1986 reporting his share of losses from the partnership. The Internal Revenue Service (IRS) proposed adjustments to deductions the partnership had claimed. In 1990, the IRS issued a final notice disallowing tens of millions of dollars of deductions. While the partnership sought administrative review of this decision, the Hincks made an advance remittance of $93,890 to the IRS toward any personal deficiency that might result from a final adjustment. The IRS then imposed additional liability: $16,409 in tax and $21,669 in interest. The IRS applied the Hincks’ advance remittance to this amount and refunded them the balance of $55,812. The Hincks filed a claim contending that, because of IRS errors and delays, the interest assessed against them should be abated under 26 U.S.C. 6404(e)(1), which permits the U.S. Treasury Secretary to abate interest that accrues on unpaid federal income taxes if the interest assessment is due to IRS error or delay. The U.S. Court of Federal Claims granted the government’s motion to dismiss, and the Federal Circuit affirmed, holding that, according to Section 6404(h), the Tax Court has exclusive “jurisdiction over any action brought by a taxpayer . . . to determine whether the Secretary’s failure to abate . . . was an abuse of discretion.” The justices affirmed, holding that the terms of Section 6404(h) control all requests for review of Section 6404(e)(1) decisions, including the forum for adjudication. In enacting Section 6404(h), Roberts wrote on behalf of the court, Congress set out a carefully circumscribed, time-limited, plaintiff-specific provision, which also precisely defined the appropriate forum. Taxpayers could “effortlessly evade” these specific limitations by bringing interest-abatement claims as tax refund actions. CIVIL PRACTICE The justices held unanimously that they do not have jurisdiction to consider a lawsuit brought by a former employee of U.S. Senator Mark Dayton who alleged that his employer had violated the Family and Medical Leave Act and the Fair Labor Standards Act. Office of Senator Dayton v. Hanson, No. 06-618. Brad Hanson worked in the Fort Snelling, Minn., office of former U.S. Senator Mark Dayton, D-Minn. On being dismissed in 2002, Hanson sued Dayton’s office under the Congressional Accountability Act of 1995, seeking back pay and money for damages from the government. Hanson said he was fired after telling the senator of his need for an operation to correct a cardiac arrhythmia. Dayton’s office sought to dismiss the suit, claiming it was barred by the U.S. Constitution’s speech and debate clause, which insulates legislative actions from judicial scrutiny. The District of Columbia federal court denied the office’s motion and the D.C. Circuit affirmed. The justices reversed. Under Section 412 of the Congressional Accountability Act, the high court can review lower court rulings on the constitutionality of the act. But in this case, Stevens wrote on behalf of the justices, the court lacked jurisdiction under Section 412 because “Neither the order of the District Court denying appellant’s motion to dismiss nor the judgment of the Court of Appeals affirming that order can fairly be characterized as a ruling ‘upon the constitutionality’ of any provision of the Act.”

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