As all the world knows, the Supreme Court of these United States has so far this term reached out its business-friendly arm to grasp the nettle of four antitrust cases — an extraordinary number. The cases themselves present portentous issues for the future of antitrust litigation. As all the world knows.
For the hardy souls still reading, congratulations! You doubtless already know the cases, the extraordinariness of their number, the issues they involve, and their portentousness. But, just in case a non-antitrust maven has gotten this far, here goes a quick summary:
- Bell Atlantic Corp. v. Twombly — The standard for pleading a price-fixing conspiracy. Must you give who-what-when-where particulars?
- Leegin Creative Leather Products, Inc. v. PSKS, Inc. — Does a manufacturer/distributor’s requiring resellers to charge minimum prices violate the Sherman Act per se?
- Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co. — Requirements for a "predatory buying" antitrust claim. Does the buyer have to lose money on the item that it bought too much of? Must it also stand a good chance of recouping the loss?
- Credit Suisse First Boston v. Billing — Do federal laws that regulate the buying and selling of securities (stocks, bonds, and the like) provide immunity for conduct that would otherwise violate federal antitrust law?
Most knowledgeable people lean towards thinking, I think, that the Court’s decisions will curtail the reach of antitrust law. The American Antitrust Institute, which favors broad application of antitrust principles, worries that the Court will leave antitrust laws "in a severely shrunken condition". Lookie here.
The Twombly case could have the widest impact, especially with respect to price-fixing class actions. Plaintiffs’ lawyers regard this variety of case the most attractive, especially if the Antitrust Division of the U.S. Department of Justice or, to a lesser extent, the Federal Trade Commission has brought a government enforcement action and won guilty pleas, indictments, or consent decrees from malefactors. Unlike their private counterparts, government lawyers can compel potential bad guys to produce documents and furnish other information before filing a case.
The gloomy prognisticators of the outcome in Twombly fear that it will make previous government action practically essential for private antitrust litigation, such that only "follow-on" civil cases can survive a motion to dismiss. I don’t share their despair.
I’ve long suspected that lax antitrust enforcement by federal agencies encourages dozens, if not thousands, of conspiracies to bloom. The hands-off approach during the 1980s and early 1990s — when the Antitrust Division mainly pursued small-time contractors who rigged bids on road projects — led inevitably, in my view, to an abundance of conspiracies to discover and prosecute when a more assertive administration came in.
Will the same thing happen again? Only time — not Twombly — will tell.