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Mar 29, 2007
Issue: The issue presented to the court in Credit Suisse is what constitutes the appropriate standard for implying antitrust immunity in the context of the potential conflict with federal securities laws.
Factual and Procedural Background: Plaintiffs (now respondents), investors who had purchased stocks during the course of initial public offerings, or shortly after such offerings, brought suit in the United States District Court for the Southern District of New York against several investments banks in the business of underwriting IPOs as well as other institutional investors. The plaintiffs alleged that the defendants had conspired to compel IPO customers to pay excessive consideration or commissions to purchase specific stocks and had also conspired to drive up the aftermarket prices for these stocks. Among the plaintiffs’ claims, they alleged that these actions constituted violations of federal antitrust law. The defendants (now petitioners) moved to dismiss the antitrust claims, arguing that the antitrust laws did not apply to transactions that were comprehensively regulated under federal securities laws. The district court granted the defendants’ motion to dismiss. The district court held that antitrust immunity was appropriate in this case, noting that much of the alleged conduct was expressly permitted by the securities laws, and that the SEC was empowered to regulate such conduct. The court further noted that if there were no antitrust immunity this would conflict with the SEC’s statutory power to permit activity that might be contrary to the antitrust laws.
On Appeal: Plaintiffs appealed this ruling and the United States Court of Appeals for the Second Circuit vacated the district court’s dismissal. The Second Circuit held that in analyzing cases in which antitrust immunity is asserted, the appropriate action is to attempt to “reconcile” the two statutory regimes, in this case the antitrust and securities laws, without having the securities regime completely drive the antirust laws from the regulatory field. The Second Circuit held that antitrust immunity could only arise from either (1) Congressional intent to repeal the antitrust laws in a specific area, or (2) implied antitrust immunity arising from specific conflicts in law. The court held that neither applied to the present case. Petitioners sought a writ of certiorari to the U.S. Supreme Court to resolve the question of implied antitrust immunity in the context of highly regulated securities transactions. The Court granted certiorari, and the parties filed briefs. Several amici curiae also submitted briefs including the United States which submitted a brief in support of the petitioner. The Supreme Court heard oral argument in this case on March 27, 2007.
Decision: The Supreme Court issued its decision on June 18, 2007, and held that there was implied immunity in this area. The court held, “we must interpret the securities laws as implicitly precluding the application of the antitrust laws to the conduct alleged in this case.”
