Public Power - November/December 2007 - (Page 32)

The High Court’s Antitrust Thunderbolts adequate specificity. The Erickson court said: “Federal Rule of Civil Procedure 8(a)(2) requires only ‘a short and plain statement of the claim showing that the pleader is entitled to relief.’ Specific facts are not necessary; the statement need only ‘give the defendant fair notice of what the … claim is and the grounds upon which it rests.’’ It must be stressed that the court cited Twombly and quoted Conley v. Gibson, which it had limited in Twombly. What lower courts are to make of all of this is hard to tell, but Erickson indicates that the Supreme Court did not think it was changing the basic pleading rules. However, the result leaves lower courts considerable leeway on which complaints to accept. Law firms throughout the country are aware of Twombly and will have a strategic weapon available in claiming that opponents’ complaints are inadequate to delay decisions and potentially defeat them, and to make plaintiff’s litigation more expensive and more complicated. Likewise, in Twombly, the Supreme Your Total IT Solution At Associated Systems Incorporated (ASI), we know that system efficiency is vital to success. So, we provide utilities with innovative, versatile solutions to best meet their individualized needs. From accounting and finance to billing and customer service, ASI provides value by allowing you to service your customers better. For more information, visit www.assocsys.com or call 888-232-1239. Court did not purport to be changing substantive antitrust law or the applicability of conscious parallelism to prove illegal joint action. Whatever the opinion’s negative attitudes toward antitrust or plaintiffs’ litigation may be, the court does not purport to be changing the law. Twombly plus Trinko—Twombly and Trinko have similarities. Both are big antitrust cases. Twombly is a Sherman Act Section 1 case addressed to illicit joint action in restraint of trade. Trinko is a Section 2 case addressed to acts of monopolization. In both, the court found apparently noncorrectible deficiencies in the complaints. Both Twombly and Trinko were brought as class action cases in which plaintiffs sued to vindicate the rights of broad segments of the public, with each class member having a small claim, but with large aggregate claims. Both cases were brought against Baby Bells. In both, predictably, if plaintiffs had won or settled, the plaintiffs’ lawyers would have been well paid. In Trinko, the named plaintiff was a law firm. Successful antitrust plaintiffs are entitled to collect their legal fees from defendants. Both the court’s Twombly and Trinko decisions appear to be influenced by the court’s distaste for “strike suits” targeting well-heeled defendants, that are sometimes mainly brought, it is alleged, for the benefit of law firms. Certainly, nobody can justify frivolous litigation (although what is frivolous is often in the eye of the beholder). In a different time, the court might have been influenced by its recognition of antitrust law as our “charter of economic liberty,” as the Supreme Court has called it, viewing plaintiff’s litigation as playing a powerful, positive role in securing antitrust enforcement. Today, the court appears more concerned that unfounded litigation may unduly burden defendants, inhibiting defendants from aggressive competition and innovation. In justifying the need for complaints to show plausible allegations of justifications for relief, the Twombly court emphasizes the high costs of discovery (often a full 90 percent of litigation costs): The briefs of the defendants, the solicitor general, and of allied business interests (as amici) were replete with assertions of the problems of untoward litigation. They argued that it was unfair to defendants and deleterious to the public and the economy for plaintiffs to be able to plead just enough to allow them to force discovery of defendants’ documents and to examine their executives in the hopes that they would find sufficient evidence of wrongdoing to prove their case or extort a settlement. For example, the U.S. Chamber of Commerce and other corporate entities submitted an amici brief to the Court stating that the “practical consequences” of the court of appeals’ ruling allowing the complaint to be heard is that by alleging parallel conduct,” plaintiffs “could impose colossal expense on defendants and subject them to blackmail settlements; …encourag[ing] still more abusive cases; adversely affect[ing] businesses that had done no wrong…Because of the risk that massive class actions will be filed solely to pressure defendants to settle, rather than to endure enormous discovery costs, even though the claims have no merit, it is proper for courts to scrutinize such cases more carefully than cases that do not entail such risks.” The brief alleged that the “impetus for cases like this one…brought by a law firm that is part of the organized plaintiffs’ classaction bar…is not actual suspicion of wrongdoing, but the hope that the thinnest of allegations…will survive motions to dismiss and begin to put pressure on defendants to settle complex litigation.” It quotes former Attorney General Dick Thornburgh, calling class actions “judicial weapons of mass destruction,…[that] promise such devastating consequences that even the most innocent of defendants must settle or risk mass destruction.” Less flamboyantly written, the solicitor general’s government brief alleged that accepting plaintiffs’ conclusory allegations of an agreement or conspiracy of parallel conduct would “simply take up the time of a number of other people…representing an in terrorem increment of the settlement value.” It said that alleging “a sufficient factual predicate is the price of entry, even to discovery.” It is of some note that recently the solicitor general, although attorney for the PUBLIC POWER 32 NOVEMBER-DECEMBER 2007

Table of Contents Feed for the Digital Edition of Public Power - November/December 2007

Public Power - November/December 2007 Contents Washington Focus 10 Questions Connecting with the Customer Through Automation AMR or AMI? The High Court’s Antitrust Thunderbolts California’s Push for Demand-Response Plug-In Partners Get Plugged In Wiring Up for Double-Digit Growth For Engineers Safety Community Broadband For Governing Boards DEED Customer Service Hometown Connections Index to Advertisers Parting shot

Public Power - November/December 2007

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