Supreme Court Rules for Baby Bells

SUPREME COURT RULES FOR BABY BELLS
[SOURCE: Wall Street Journal, AUTHOR: Mark H. Anderson mark.anderson@dowjones.com and Michael A. Pollock michael.pollock@dowjones.com]
The U.S. Supreme Court Monday put the brakes on an antitrust conspiracy lawsuit against several Baby Bell companies, ruling 7-2 that the plaintiffs had failed to present enough facts for the case to survive in federal court. "Because the plaintiffs here have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed," Justice David Souter wrote in the majority opinion. "We think that nothing contained in the complaint invests either the action or inaction alleged with a plausible suggestion of conspiracy," he added. The ruling reverses a lower court opinion that had allowed a lawsuit against Bell Atlantic Corp., BellSouth Corp., Qwest Communications International Inc., and SBC Communications Inc. (Bell Atlantic is now Verizon Communications Inc. and SBC bought AT&T Inc. and the renamed company, AT&T, merged with BellSouth. And isn't there just a little bit of irony in that?) The case alleged the companies engaged in an anticompetitive conspiracy to restrict competition in the local telephone and broadband Internet markets. The lawsuit was still early in its litigation. At oral arguments, the companies and the U.S. Justice Department urged the Supreme Court to set private antitrust lawsuit standards high enough to bar expensive legal discovery in a cases with questionable merit. That position was accepted by the high court's ruling, which not only reversed the lower court but definitely said the lawsuit should be thrown out. "Today's decision is the fifth in a series of Supreme Court decisions establishing that firms will not be challenged under antitrust for making independent choices that benefit consumers," said John Thorne, a senior vice president at Verizon Communications. Mr. Thorne added the case will let telecommunications companies continue to have "the freedom to decide when and how to enter new markets." The justices were deciding whether the plaintiffs in the case -- a proposed class-action for customers since 1996 federal telecommunications law changes -- must allege specific anticompetitive acts that are suspicious enough to warrant consideration for a trial. Justice John Paul Stevens and Ruth Bader Ginsburg dissented, arguing the case should have at least been allowed to proceed to discovery so a court could review evidence in the case. "Directing that the case be dismissed without even looking at any of that evidence marks a fundamental -- and unjustified -- change in the character of pretrial practice," Justice Stevens wrote.
http://online.wsj.com/article/SB117975608272309469.html?mod=djemTECH
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