This article is part of a Chronicle. See more from this Chronicle
Jan 01, 2007
Issue: In Bell Atlantic Corp. v. Twombly, the issue before the Supreme Court was whether a complaint states a claim under 1 of the Sherman Antitrust Act, 15 U.S.C. 1, when it alleges that defendants engaged in parallel conduct, and also makes a bare allegation of conspiracy, without alleging facts which, if proved true, would constitute a conspiracy under law. Essentially, the court was asked to decide if parallel conduct, coupled with a bare allegation of conspiracy, would be enough to defeat a defendant’s motion to dismiss under Fed. R. Civ. P. 12(b)(6).
Factual and Procedural Background: Plaintiffs initially brought suit alleging that the defendants had conspired to not compete with each other, and to prevent entry from new competitors, in specific geographic markets for telephone and internet services. In support of their complaint the plaintiffs had alleged that the defendants engaged in “parallel conduct,” which they argued “would be anomalous in the absence of an agreement not to compete.” In the district court decision below, the court had held that the plaintiffs failed to allege facts sufficient to constitute a conspiracy, and that the allegations of parallel conduct alone would not support a claim for conspiracy under 1 of the Sherman Act. The District Court noted that “allowing simple allegations of parallel conduct to entitle plaintiffs to discovery circumvents both 1’s requirement of a conspiracy, and Rule 8’s requirement that complaints state claims on which relief can be granted.” The District Court further held that “allegations of plus factors “were required to provide defendants notice of the plaintiff’s theory of the alleged conspiracy.” Based on this standard, the District Court held that the facts alleged were not sufficient to show that the defendants actions were based on an agreement rather than each defendant’s own self-interest. Consequently the court granted the defendants motion to dismiss under Fed. R. Civ. P. 12(b)(6). See Twombly v. Bell Atlantic Corp., 313 F. Supp. 2d 174 (S.D.N.Y. 2003).
On Appeal: The United States Court of Appeals for the Second Circuit reversed the district court’s decision, and concluded that the District Court had applied the wrong standard. The Court of Appeals held that allegations of parallel conduct along with the plaintiff’s bare allegation of conspiracy was indeed sufficient to state a claim under 1 of the Sherman Act. Specifically the Court of Appeals noted that the pleading requirements of Fed. R. Civ. P. 8 were very permissive, and that they had consistently rejected arguments that antitrust claims called for more rigorous pleading standards. Petitioners sought review of this decision and the U.S. Supreme Court granted certiorari on June 26, 2006. The Court heard oral argument on November 27, 2006.
Decision: The Court issued its decision on May 21, 2007, reversing the Second Circuit’s ruling. The Court held that a mere allegation of conspiracy coupled with an assertion of parallel conduct, without more, would not survive a motion to dismiss.
