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May 21, 2007


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Bruce Boyden

The court's citation of Easterbrook is ironic given that he wrote this just a few weeks ago:

"[A] judicial order dismissing a complaint because the plaintiff did not plead facts has a short half-life. 'Any decision declaring "this complaint is deficient because it does not allege X" is a candidate for summary reversal, unless X is on the list in Fed. R. Civ. P. 9(b).' Kolupa v. Roselle Park District, 438 F.3d 713, 715
(7th Cir. 2006)."

Vincent v. City Colleges of Chicago (7th Cir. Apr. 30, 2007).

Joan A. Conway

Some very basics were obviously missing in the complaint: the complaint here furnishes no clue as to which of the four ILECs (much less which of their employees) supposedly agreed, or when and where the illicit agreement took place.

There was no oversight to drafting this Complaint by the Law office Chief of Litigation. What can I say, but to say there will be a next time, when someone is injured by this obvious Anti-trust violation.


Yea, but how often can one plead with enough particularity about a conspiracy when there is no chance one has access to the information regarding the conspiracy. What seems strange is that circumstantial evidence is enough for liability - you can establish liability with enough info about meetings, and price increases, but you can't get past a motion to dismiss now if that is all you plead?

Often the only evidence anyone outsided the conspiracy might have is the timing of price increases and complaints by customers.

This is a ridiculous holding that is going to be used by corporate interests to shield themselevs from antitrust liability.

I guess the whole plaintiffs' antitrust bar will have to rely on whistleblowers and former employees to even plead a case.


This is not just a pleading issue. Consider the issue of electronic discovery: should the defendant be required to move heaven and earth to find the electronic footprint of emails between X and Y persons.

There should probably be some combination of cost-sharing on a sliding scale, or perhaps a total budget for discovery or something based on the scale of the case. Then the parties would have to allocate the amount the court grants to them in a manner that they deemed cost effective. The court could just say: this is a $10mm case, total legal costs cannot exceed $3mm, so you, plaintiff, have a $1mm discovery budget to be shared 90/10 with the defendant. Have at it. But spend your Monopoly Money (your opponent's court-mandated Discovery Budget) wisely.

Randy Picker

yes, we talked about this case at lunch today; definitely would want to do the discovery budget and probably move towards some sort of cost-shifting in connection with it.


Since when does it require moving heaven and earth to copy electronic data? The burden that companies have is far less than it used to be in the pre-computer age. Digging up custodial emails of managers and sales people involved in price fixing and other sherman act violations takes little effort. The "burden" that these large companies with dedicated IT departmenst claim if often total BS in my experience.

What this will result in is dead weight loss and consumers being screwed more often then they already are.

Price fixers get away with it far more than they are burdened with fishing expeditions in situations where they have done no wrong. Plaintiffs attorneys don't want to waste anyone's time and money, especially our own.

Especially now, if Plaintiffs get passed a MTD, the burden should be squarely on the corporation to produce documents. Allowing Defendants to bill Plaintiffs for complyig with discovery would create the most perverse of incentives to lie about the expense of doing basic email seraches on servers.

Just because a few coporations have had to bear discovery costs in cases that they have won or settled quickly does not mean that society at large is better off allowing them to fix prices more often. You are just transferring costs onto consumers in that situation to please corproate interests which are already significantly overweighted in the law. Combine this with the fact that the Justice Department under Bush does Zero antitrust work, and you have a recipe for even more corporate exploitation of their control of particular markets.


The point missing in much of this conversation is whether the result in this case can be solely justified on a fair reading of Fed. R. Civ. P. 8 and 12(b)(6)? All of the justifications for the outcome are based on "policy" considerations relating to the "burden" and "cost" on the defendants to complete discovery. And as for that policy point, looking at the gross cost of discovery is an improper metric. Take for example a single plaintiff suing in a garden variety medical malpractice case, the cost of discovery for that plaintiff, as a percentage of her net value, might (actually will likely) exceed (by a non-trivial amount) the percentage that discovery will cost a corporation (or corporations) in terms of its (their) revenues facing a Section 1 suit. In other words, raw dollars doesn't tell you much.


Takes little effort to produce e-mail? Spoken like someone with no clue as to the realities of large corporations. In order for defense counsel (and in-house counsel) to fulfill their duties to the Court to participate in good faith, substantial time and effort goes into attempting to make sure that all electronic 'documents' are located which are responsive to overbroad discovery requests. You would not believe how much time, money, and other resources are thrown at such efforts. It truly is mind boggling.


Seriously, I can't imagine anyone who has been through major civil litigation suggesting electronic discovery does not cost a lot of time, effort, and money. If nothing else, it takes a lot of time for lawyers to review the 1,000,000 plus documents produced in these cases. That said, once you start requiring defendants to go to electronic backup tapes and hire forensic computer guys to turn over deleted material, you're talking real money.


Oh it takes time and some money, but nothing like defendants continuously cry about - not to mention the perverse incentives large defense firms have to overbill their corporate clients for doc review - funny how that rarely gets mentions when defendants whine about the cost of discovery.

And Ps have to produce too you know when we represent large plaintiffs as well. I understand exactly what it takes to get archival and search databases and review and produce. It is an unfortunate amount of the work I do.

That liability can be established by enough circumstantial evidence, but that circumstantial evidence can rarely be enough to get passed a MTD makes little sense, especially in this context where the conspirators have all the evidence, if any solid evidence exists, in their business records. It is amazing what some sales people and business managers will write to each other though. Funny how the fancy antitrust firms fail their clients in that regard too. "Reminder - don't write your competitors emails regarding your agreement to put a floor on prices."


The PSLRA already has this kind of impact in the securities law field. The only cases where you are likely to get enough pre-litigation discovery to meet its requirements in strict circuits, are those where you have an insider informant (who has likely violated legal duties in providing the information), and those where you buy the whole company and find support in the corporate records after the fact.

We seem to be moving to a legal context where you can't use smoke to bring litigation to get discovery to see if there was a fire.


Yea but the thing about securties fraud is that it is brought out into the light far more easily and frequently than even per se antitrust violations like price fixing. Public companies have duties to their shareholders and committing fraud that pisses off certain shareholders is far more easily discovered with their incentive to weed it out and the required financial reporting. Hell when a compnay restates its previously reported finaincials, it is assumed they'd only be doing so if it was material, so much of your work is done cefore you even file.

Antitrust on the other hand, all you have is cues from the Feds who take complaints from the companies being affected - and we all know how effective the DOJ has been at corporate regulation in the last 7 years. That is the only smoke their is in the price fixing world save a whistleblower- a pattern of complaints about lack of competition in commodity pricing and some circumstatial evidence about trade meetings and price raises. All the evidence lies with the conspirators.

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