Law School 101: Understanding SCOTUS' Antitrust Ruling

Late last month, the US Supreme Court threw out an antitrust lawsuit against the 3 largest telcos, killing a class action lawsuit that accused AT&T, Verizon and Qwest of engaging in anticompetitive behavior to hinder competition. The case sets up some questions about how the SCOTUS ruling could impact the cable industry. Justice David Souter, writing for the majority, said that the idea that a conspiracy is conceivable is not enough for a suit to go forward—plaintiffs have to show that a conspiracy is actually plausible. It’s impossible to say simply whether this is good or bad for the industry since it would vary by the details of the case, how a court applies the ruling, etc… but it does set up some intriguing scenarios, particularly when it comes to retrans. If a cable op were to bring an antitrust case against multiple broadcasters alleging that they conspired to force the operator to pay a higher market rate for retrans rights, the complaint would need to do more than just allege that all the broadcasters were demanding higher fees than the market would justify, says Burt Braverman, partner for Davis Wright Tremaine. That could be difficult to do in some instances because that proof would perhaps not come out until the discovery portion of the case. For example, Braverman had a case several years ago in which a cable operator sued Northwest Bell and pre-breakup AT&T for conspiring to keep cable operators from attaching their coax to utility poles. While initially no written or documentary evidence, "when we conducted discovery, we did find some rather damning evidence and won that case at trial," he said. As for that theoretical retrans case, showing that broadcasters’ conduct is out of the ordinary or not necessarily consistent with their economic interest might be sufficient to keep the suit from being thrown out, Braverman suggests. Along the same lines, cable could also benefit from the ruling when it’s a defendant. The bottom line is that the SCOTUS ruling should help decrease frivolous lawsuits. "Given the cautious manner in which lower courts generally apply Supreme Court decisions, it does seem a safe assumption that most meritorious cases will still be able to get through the pleading gate and proceed to discovery," Braverman says.