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In re Text Messaging Antitrust Litigation

United States District Court for the Northern District of Illinois · Civil Procedure

Civil ProcedureSummary JudgmentSpoliationAntitrustSherman Act section 1summary judgmentcircumstantial evidenceparallel conduct

Facts

Plaintiffs alleged that AT&T, Sprint, T-Mobile, Verizon, and CTIA conspired from 2005 to 2008 to raise pay-per-use text message prices first to ten cents, then fifteen cents, and finally twenty cents. The carriers did in fact raise their prices over time, but at different dates, and the record showed each company performed internal analyses and had internal debate before making the increases. Plaintiffs relied on parallel pricing, carrier interactions at CTIA meetings and related events, expert opinions about industry structure, and a T-Mobile email in which Adrian Hurditch wrote that the pricing move was "colusive [sic] and opportunistic." Plaintiffs also sought spoliation sanctions based on missing T-Mobile emails and notebooks and alleged destruction of CTIA materials.

Issue

Whether plaintiffs produced enough evidence to create a genuine issue of material fact that defendants entered into a section 1 conspiracy to fix pay-per-use text messaging prices rather than acting independently. Also, whether plaintiffs were entitled to an adverse inference and sanctions based on alleged spoliation by T-Mobile and CTIA.

Rule

In a section 1 case relying on circumstantial evidence, plaintiffs must offer evidence that reasonably tends to prove a conscious commitment to a common scheme and tends to rule out the possibility that defendants acted independently; evidence equally consistent with lawful competition, including mere parallel conduct or opportunity to conspire, is insufficient. For an adverse inference based on spoliation in the Seventh Circuit, the movant must show intentional destruction of evidence in bad faith, meaning destruction for the purpose of hiding adverse information relevant to proof of an issue at trial.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Four regional makers of commercial ice machines based in Milwaukee, Phoenix, Atlanta, and Newark each raised the list price of a replacement filter from $18 to $24 over an eight-month period. Discovery shows each company prepared its own internal pricing memo and managers debated customer reaction before implementing the increase.

In a § 1 price-fixing suit based on circumstantial evidence, which is the strongest argument for summary judgment for the defendants?

Explanation. The majority held that parallel price increases, even if conscious, are insufficient standing alone. To survive summary judgment, plaintiffs must produce evidence that reasonably tends to rule out independent action and tends to prove a conscious commitment to a common unlawful scheme. Internal studies and debate are consistent with ordinary business decision-making, not necessarily conspiracy.