Supreme Court Requests Solicitor General Brief in Telecom Antitrust Case

January 22, 2008. The Supreme Court issued an order asking the Department of Justice's (DOJ) Office of the Solicitor General (OSG) to submit an amicus curiae brief in Pacific Bell v. Linkline, App. Ct. No. 07-512. See, Orders List [8 pages in PDF] at page 4.

The U.S. Court of Appeals (9thCir) issued its divided opinion [22 pages in PDF] on September 11, 2007. The majority opinion states that the issue is whether the Supreme Court's January 13, 2004, opinion [22 pages in PDF] in Verizon v. Trinko, 540 U.S. 398, "bars a plaintiff from claiming a violation of § 2 of the Sherman Antitrust Act by virtue of an alleged price squeeze perpetrated by a competitor who also serves as the plaintiff’s supplier at the wholesale level, but who has no duty to deal with the plaintiff absent statutory compulsion. We conclude that it does not, and affirm the order of the district court denying judgment on the pleadings."

The Supreme Court held in Verizon v. Trinko that a claim alleging a breach of an ILEC's duty under the 1996 Telecom Act to share its network with competitors does not state a violation of Section 2 of the Sherman Act.

See also, story titled "Supreme Court Holds That There is No Sherman Act Claim in Verizon v. Trinko" in TLJ Daily E-Mail Alert No. 815, January 14, 2004.

See also, Supreme Court Docket.

A group of economists submitted a amicus brief last month urging the Supreme Court to grant certiorari and reverse the Court of Appeals. This group includes Robert Crandall, William Baumol, Greg Sidak, Jeffrey Eisenach, Robert Bork, and others.

They write that the question is "Whether a plaintiff states a claim under section 2 of the Sherman Act by alleging that the defendant -- a vertically integrated retail competitor with an alleged monopoly at the wholesale level but no antitrust duty to provide the wholesale input to competitors -- engaged in a ``price squeeze´´ by leaving insufficient margin between wholesale and retail prices to allow the plaintiff to compete."

They argue that the Court of Appeals opinion is inconsistent with the Supreme Court's opinion in Verizon v. Trinko. They also argue that it would alter the principle that antitrust law exists to advance consumer welfare.