Supreme Court Docket Report - June 23, 2008

Originally published June 23, 2008

Keywords: Sherman Act, Verizon

Communications, Trinko, Pacific Bell, linkLine Communications,

AT&T California, antitrust telecommunications, price

squeeze, monopolist, pregnancy discrimination, General

Electric, Gilbert, Hulteen

The Supreme Court granted certiorari today in two cases of

interest to the business community:

Antitrust/TelecommunicationsóSection 2

Price Squeeze Claims

Title VIIóPregnancy Discrimination

ActóTreatment of Preenactment Leaves

Antitrust/TelecommunicationsóSection 2 Price Squeeze

Claims

The confluence of the Sherman Act and the interconnection

provisions of the Telecommunication Act of 1996 prompted the

Supreme Court's decision in Verizon Communications,

Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398

(2004). In Trinko, the Court held that a plaintiff did

not state a claim under Section 2 of the Sherman Act against a

monopolist that refused to offer its facilities to a competitor

despite a statutory and regulatory requirement that it do so

where no independent antitrust duty existed. Trinko,

however, left open the question whether a plaintiff was also

barred from bringing a price squeeze claim against a regulated

telecommunications provider. The courts of appeals are divided

on the issue, and the Supreme Court today granted certiorari in

Pacific Bell Telephone Co. v. linkLine Communications,

Inc., No. 07-512, to resolve the lower court conflict.

The Court's resolution of this matter is of significant

interest to the business community, particularly to companies

operating in regulated industries. If the Court allows price

squeeze claims to proceed, it will expose regulated monopolists

to burdensome antitrust suits, thereby deterring socially

desirable vertical integration and ultimately harming consumers

who will be deprived of the foregone economic efficiencies.

Pacific Bell, doing business as AT&T California, sold

wholesale DSL access to independent internet service providers

while also providing DSL access on a retail basis to consumers.

Accordingly, AT&T California served as both a supplier and

a competitor to the plaintiff, linkLine Communications, which

alleged that AT&T California created a price squeeze by

charging it a high wholesale price relative to the prices at

which AT&T California provided retail DSL services.

AT&T California moved to dismiss the claim under

Trinko. It acknowledged that FCC regulations required

it to provide DSL services to rivals such as linkLine, but it

argued that Trinko...