The Year in Review: #17. Extreme Makeover

For all the talk about the importance of stare decisis during John Roberts' confirmation hearings, the Roberts Court hasn't been shy about making bold changes to existing precedents in at least one area of the law--antitrust.

The Court kicked off the year by setting a stringent new standard for plaintiffs to prove predatory buying in Weyerhaeuser v. Ross-Simmons Hardwood Lumber.

The Court ruled that a plaintiff that alleges anticompetitive activity on the supply side must prove both that the defendant's activity led to below-cost sales and that the defendant was likely to later recoup those losses by squeezing out competitors and then raising its prices.

And that was just the beginning. In Bell Atlantic v. Twombly the Court made it harder for allegations of price-fixing to survive summary judgment.

The Court dumped a 50-year-old standard--which allowed a claim that simply alleged parallel conduct between defendants to go forward to trial. Now plaintiffs must plead specific facts that point to an agreement to fix prices.

"It's not fair to have defendants overburden the plaintiff to the point you drive them out of court, and at the same time, it's not fair for the plaintiff to extort a settlement by demanding massive discovery," says Michael Simon, partner at Perkins Coie. "The Supreme Court is trying to craft a solution."

The Court then handed IPO underwriters immunity under the antitrust laws in Credit Suisse Securities v. Billing, ruling that securities regulations pre-empt antitrust law in this area.

Justice Breyer said the high likelihood courts would make errors in this complex area of overlapping regulation--and thus wrongfully award treble damages--would deter investment banks from underwriting IPOs, which is antithetical to the pro-competition purpose of antitrust laws.

Finally, the Court did away with the century-old prohibition on price floors in Leegin Creative Leather Products v. PSKS, ruling that a luxury handbag maker could set a minimum price at which retailers could sell its products.

Adele Nicholas

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