P (Twombley) filed a claim under ยง1 of the Sherman Act against D (Bell Atlantic) which requires P to show that D entered into a conspiracy to thwart the demonopolization of their respective markets.
P instead showed in their complaint that D restrained trade and engaged in anticompetitive practices. These practices are not illegal in themselves. It must be proven that the Ds agreed among themselves to do this.
P showed "parallel conduct" - D preventing competitors from entering the market and failure of any D to attempt to compete in the market area of any other D.
Procedural History:
District court dismissed P's complaint concluding that parallel business conduct allegations taken alone do not state a claim.
Second Circuit reversed, found P's complaint valid.
SCOTUS reversed, dismissed P's complaint.
Issues:
Can an antitrust claim survive a motion to dismiss when it only alleges that the monopolists engaged in certain parallel conduct unfavorable to competition, absent some factual context suggesting conspiracy or agreement to do so?
Are there any other times besides fraud and mistake cases when complaints that conform to FRCP 8(a)(2) are insufficient?
Holding/Rule:
An antitrust claim cannot survive a motion to dismiss when it only alleges that the monopolists engaged in certain parallel conduct unfavorable to competition, if there is no factual context suggesting conspiracy or agreement to do so.
An antitrust claim is insufficient if it only conforms to FRCP 8(a)(2); it must include some contextual facts that make the claim plausible.
Reasoning:
The factual allegations must be enough to raise a right to relief above the speculative level on the assumption that all the allegations in the complaint are true.
At the summary judgment stage, an antitrust P's offer of conspiracy evidence must tend to rule out the possibility that the Ds were acting independently.
Something beyond the mere possibility of impropriety must be alleged so that Ps with groundless claims cannot be allowed to take up the time of other people during the discovery phase.
Antitrust discovery is very expensive; the threat of this expense will push cost-conscious Ds to settle even weak cases.
Conley's "no set of facts" doctrine needs to be retired and replaced.
Nothing in the complaint intimates that the resistance to the upstarts was anything more than the natural, unilateral reaction of each D intent on keeping its regional dominance.
If alleging parallel decisions to resist competition were enough to imply an antitrust conspiracy, pleading an antitrust violation against almost any group of competing businesses would be a sure thing.
There is a plausible explanation for the noncompetition of the Ds -- each was sitting tight, expecting their neighbors to do the same.
"We do not require heightened fact pleading of specifics, but only enough facts to state a claim to relief that is plausible on its face. Because the Ps have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed."
Dissent:
The simplified notice pleading standard of the FRCP relies on liberal discovery rules and summary judgment motions to define disputed facts and issues and to dispose of unmeritorious claims.
The fact that the Sherman Act authorizes the recovery of 3x damages and attorney's fees for successful plaintiffs indicates that Congress intended to encourage private enforcement of the law.
