By Joseph N. Hosteny of Niro, Scavone, Haller & Niro
In Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955 (2007), the Supreme Court considered a challenge to the adequacy of a complaint alleging antitrust violations by the Baby Bells. When AT&T was broken up in 1983, the Baby Bells became independent telephone companies; they were all allowed to provide local, but not long distance, telephone services. Congress enacted legislation in 1996, allowing the Baby Bells to provide long distance telephone services. But that legislation imposed several conditions: The Baby Bells were required to share their networks with competitors, and to provide them with certain services, including network connections and network leases, and local telephone services, which they could resell to end users.
In 2002, William Twombly, as a plaintiff in an antitrust case, sued the Baby Bells, alleging that they had conspired to restrain trade in violation of the Sherman Antitrust Act by inflating the charges for local telephone and Internet services. His complaint also alleged on information and belief that the Baby Bells entered into a contract or conspiracy to prevent competitive entry into their respective local telephone markets.
The Supreme Court ruled that the allegations in Mr. Twombly’s complaint didn't cut it. It agreed with the district court that an allegation of parallel action was insufficient to state a claim, because it was logic...