Bell Atlantic v. Twombly: Supreme Court Tightens Pleading Standards in Antitrust Conspiracy Cases

The United States Supreme Court yesterday overturned the 50-year-old pleading standard from Conley v. Gibson and held—7 to 2—that antitrust conspiracy allegations must be “plausible” to survive a motion to dismiss. The decision will make it significantly more difficult for antitrust claims predicated solely on consciously parallel conduct to avoid dismissal prior to discovery.

Plaintiffs in Bell Atlantic v. Twombly alleged that the Baby Bell telephone companies violated Section 1 of the Sherman Act by conspiring to thwart competition for local telephone service. Although the complaint was sprinkled with allegations of “agreement” and “conspiracy,” the claims rested “on descriptions of parallel conduct and not on any independent allegation of actual agreement.” Each of the Baby Bells was alleged to have acted in parallel in trying to thwart entry by potential competitors. In addition, allegedly none of the Baby Bells attempted to expand their geographic territory into that of any other Baby Bell—even though the Telecommunications Act of 1996 allowed the possibility for such competition.

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