TWOMBLY AND COMMUNICATION: THE EMERGING DEFINITION OF CONCERTED ACTION UNDER THE NEW PLEADING STANDARDS

William H. Page

Journal of Competition Law and Economics, 2009, vol. 5, issue 3, 439-468

Abstract: After the Supreme Court's 2007 decision in Bell Atlantic Corp. v. Twombly, an antitrust plaintiff who tries to plead an agreement in restraint of trade under Section 1 of the Sherman Act must allege more than parallel conduct and an undefined “conspiracy.” Now, the complaint must include “enough factual matter (taken as true) to suggest that an agreement was made.” Although the Court insisted it was not imposing a heightened pleading standard, it did require antitrust plaintiffs to provide enough details to make the claimed agreement plausible. In this article, I examine an important substantive consequence of Twombly's pleading regime. In more than twenty reported cases, federal courts have applied the new pleading standard to complaints alleging horizontal concerted action under Section 1 of the Sherman Act. In doing so, the courts have had to address a crucial defect in the substantive law of agreement: the Supreme Court's traditional definitions of agreement, which Twombly itself simply repeated, are too vague to help litigants and courts distinguish between consciously parallel conduct and concerted action. In the course of applying Twombly, however, the lower courts have adopted a more meaningful definition, one that requires that the parties have communicated to each other in ways that facilitate the parallel conduct. This clarification of the standard has important implications for the role of discovery in pleading and resolving claims of concerted action.

Date: 2009
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Journal of Competition Law and Economics is currently edited by Nicholas Economides, Amelia Fletcher, Michal Gal, Damien Geradin, Ioannis Lianos and Tommaso Valletti

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