Public Power - November/December 2007 - (Page 35)

underwriters were immune from antitrust attack in setting the terms for marketing and distributing securities issuances by jointly agreeing on commissions and the terms of future company issuances, because these matters are subject to potentially conflicting regulation by the Securities and Exchange Commission. The court appears willing to make significant antitrust law changes, providing reduced consumer protection. Remedies—The Twombly and Trinko decisions will make it easier for lower courts to dismiss antitrust and other complaints that they do not think should win, but many complaints should survive. However, the cases hold lessons for those concerned with and dependent upon antitrust enforcement, including public power utilities. If we are correct that the Supreme Court’s Twombly and Trinko decisions can be explained to a significant degree by court concerns about abusive and ill founded litigation, the solution for plaintiffs who must bring suit to vindicate their essential rights is to articulate in their complaints (and throughout trial) the extent of their own and public injuries and why their opponents’ legitimate business interests will not be harmed by granting plaintiffs relief. Plaintiffs should make supported allegations that allowing the case to go forward will not stifle innovation or legitimate competition. Plaintiffs should meet all of the underlying concerns that may motivate courts to rule adversely to their positions, regardless of the extent to which doing so is technically required. Most of the court’s concerns should be easy to satisfy. Public power utilities and their lawyers do not bring suits for attorney benefit. Public power exists to benefit the public. It seeks fair access to facilities, joint company arrangements, markets and information in order to foster competition and to survive—again for the benefit of the public. Denials of our rights do not promote investment and innovation. They promote excess profits and monopolization. Moreover, public power claims are usually brought to allow public power utilities to invest in facilities, participate fairly in markets and eliminate noncompetitive pricing. Granting relief allowing public power investment often increases available infrastructure financing, benefiting all consumers. Enron did not reinvest the profits from its market-distorting actions in new plant or distribute them to the public, but public power does. In Otter Tail or in Florida Power & Light, defendants could show no innovation that would come from their refusals to transmit. Rather, they wanted to insulate their existing markets from competition. Where antitrust law is often rooted in speculative applications of sophisticated economic principles, a strong factual showing that defendants’ actions hurt competition should carry the day. Those subject to antitrust abuse must carefully consider potential agency and state remedies. The flip side of Trinko and Credit Suisse and, to a lesser extent, of Twombly, is that the court is leaving more antitrust enforcement to administrative agencies. A failure of agencies to exercise that authority on a reasoned basis may be held on appeal to be an abuse of discretion. Especially in light of Trinko and Credit Suisse, in court cases, plaintiffs should show that meaningful relief is not available from administrative agencies. Trinko and Twombly suggest that public power should place emphasis on joint ownership (as many public power utilities are doing). They show the importance of joint action agencies. Although there are risks to making investments, if the Supreme Court is signaling that it will enforce the antitrust laws more loosely, this will create greater market risks of high prices. Therefore, there will be added benefits to participation in markets as owners. ❚ Robert Jablon, a partner in the Washington law firm of Spiegel & McDiarmid, has represented public power utilities extensively in antitrust, power supply, transmission and regulatory matters. Katharine Mapes was a summer associate with Spiegel & McDiarmid and is attending Harvard Law School. www.APPAnet.org NOVEMBER-DECEMBER 2007 35 http://www.APPAnet.org

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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