Justia Antitrust & Trade Regulation Opinion Summaries

Articles Posted in Communications Law
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Comcast and its subsidiaries allegedly “cluster” cable television operations within a region by swapping their systems outside the region for competitor systems inside the region. Plaintiffs filed a class-action antitrust suit, claiming that Comcast’s strategy lessens competition and leads to supra-competitive prices. The district court required them to show that the antitrust impact of the violation could be proved at trial through evidence common to the class and that damages were measurable on a classwide basis through a “common methodology.” The court accepted only one of four proposed theories of antitrust impact: that Comcast’s actions lessened competition from “overbuilders,” i.e., companies that build competing networks in areas where an incumbent cable company already operates. It certified the class, finding that the damages from overbuilder deterrence could be calculated on a classwide basis, even though plaintiffs’ expert acknowledged that his regression model did not isolate damages resulting from any one of the theories. In affirming, the Third Circuit refused to consider Comcast’s argument that the model failed to attribute damages to overbuilder deterrence because doing so would require reaching the merits of claims at the class certification stage. The Supreme Court reversed: the class action was improperly certified under Rule 23(b)(3). The Third Circuit deviated from precedent in refusing to entertain arguments against a damages model that bore on the propriety of class certification. Under the proper standard for evaluating certification, plaintiffs’ model falls far short of establishing that damages can be measured classwide. The figure plaintiffs’ expert used was calculated assuming the validity of all four theories of antitrust impact initially advanced. Because the model cannot bridge the differences between supra-competitive prices in general and supra¬competitive prices attributable to overbuilder deterrence, Rule 23(b)(3) cannot authorize treating subscribers in the Philadelphia cluster as members of a single class. View "Comcast Corp. v. Behrend" on Justia Law

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Comcast and its subsidiaries allegedly “cluster” cable television operations within a region by swapping their systems outside the region for competitor systems inside the region. Plaintiffs filed a class-action antitrust suit, claiming that Comcast’s strategy lessens competition and leads to supra-competitive prices. The district court required them to show that the antitrust impact of the violation could be proved at trial through evidence common to the class and that damages were measurable on a classwide basis through a “common methodology.” The court accepted only one of four proposed theories of antitrust impact: that Comcast’s actions lessened competition from “overbuilders,” i.e., companies that build competing networks in areas where an incumbent cable company already operates. It certified the class, finding that the damages from overbuilder deterrence could be calculated on a classwide basis, even though plaintiffs’ expert acknowledged that his regression model did not isolate damages resulting from any one of the theories. In affirming, the Third Circuit refused to consider Comcast’s argument that the model failed to attribute damages to overbuilder deterrence because doing so would require reaching the merits of claims at the class certification stage. The Supreme Court reversed: the class action was improperly certified under Rule 23(b)(3). The Third Circuit deviated from precedent in refusing to entertain arguments against a damages model that bore on the propriety of class certification. Under the proper standard for evaluating certification, plaintiffs’ model falls far short of establishing that damages can be measured classwide. The figure plaintiffs’ expert used was calculated assuming the validity of all four theories of antitrust impact initially advanced. Because the model cannot bridge the differences between supra-competitive prices in general and supra¬competitive prices attributable to overbuilder deterrence, Rule 23(b)(3) cannot authorize treating subscribers in the Philadelphia cluster as members of a single class. View "Comcast Corp. v. Behrend" on Justia Law

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The Telecommunications Act of 1996 requires incumbent local exchange carriers to lease to new competitive LECs, unbundled, at cost, facilities and services (elements) that the FCC deems necessary to provide local telephone service, 47 U.S.C. 251(c)(3), (d)(2). Section 271 requires "Bell operating" companies that seek to provide long-distance service, such as AT&T, to make available a competitive checklist of services to facilitate competition in the local phone service market. In response to regulatory developments, Kentucky competitive LECs asked the state commission to require AT&T to continue de-listed elements. The commission agreed. A district court enjoined enforcement and ordered the commission to calculate the amount a competitive LEC owed AT&T for services obtained at the unlawfully imposed rate. The commission issued another order requiring AT&T to provide de-listed elements at a regulated rate. The court entered another injunction. The Sixth Circuit affirmed, upholding conclusions that the commission may not require continued unbundling of de-listed elements; that FCC regulations do not require AT&T to provide to competitive LECs equipment known as a line splitter; and that FCC regulations do not require AT&T to provide unbundled access to high-speed fiber-optic loops in new service areas. LECs, upon request, must package unbundled network elements provided under section 251 with elements mandated only by section 271View "Bellsouth Telecomm., Inc. v. KY Pub. Serv. Comm'n" on Justia Law

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Plaintiffs, a putative class of retail cable and satellite television subscribers, brought suit against television programmers and distributors alleging that programmers' practice of selling multi-channel cable packages violated Section 1 of the Sherman Act, 15 U.S.C. 1. At issue was whether the district court properly granted programmers' and distributors' motion to dismiss plaintiffs' third amended complaint with prejudice because plaintiffs failed to allege any cognizable injury to competition. The court held that the complaint's allegations of reduced choice increased prices addressed only the element of antitrust injury, but not whether plaintiffs have satisfied the pleading standard for an actual violation. Therefore, absent any allegations of an injury to competition, the court held that the district court properly dismissed the complaint for failure to state a claim. View "Brantley, et al. v. NBC Universal, Inc., et al." on Justia Law

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The hospital opposed a proposed medical office building by lobbying public officials, conducting a public relations campaign, offering incentives to discourage prospective tenants, and making negative statements about the developer. Prospective tenants withdrew from conditional agreements and approvals were denied. The developer sued, alleging antitrust violations under the Sherman Act, 15 U.S.C. 2. The district court dismissed. The Seventh Circuit affirmed, citing the Noerr-Pennington doctrine, under which efforts to petition government are shielded from liability, and rejecting a claim of "sham." Even if the hospital made material misrepresentations during and relating to village board proceedings, which were legislative in nature, those misrepresentations are legally irrelevant because those meetings were inherently political in nature. The public relations campaign was inextricably intertwined with efforts before the board. The hospitalâs contacts with other healthcare providers constituted mere speech that is not actionable under the Sherman Act. No reasonable trier of fact could conclude from the record that the successful effort to convince physicians not to relocate their practices constituted predatory conduct forbidden by the antitrust laws.