Document: 540 U.S. 398 VERIZON COMMUNICATIONS INC.v.LAW OFFICES OF CURTIS V. TRINKO, LLP. No. 02-682. Supreme Court of United States. Argued October 14, 2003. Decided January 13, 2004. The Telecommunications Act 1996 imposes upon an incumbent local exchange carrier (LEC) the obligation to share its telephone network with competitors, 47 U. S. C. § 251(c), including duty provide access individual elements on "unbundled" basis, see 251(c)(3). New entrants, so-called competitive LECs, combine and resell these unbundled (UNEs). Petitioner Verizon Communications Inc., LEC in York State, has signed interconnection agreements rivals such as AT&T, 252 obliges it do, detailing terms which will make available. Part Verizon's 251(c)(3) UNE is provision operations support systems (OSS), without a rival cannot fill customers' orders. agreement, approved by Public Service Commission (PSC), authorization long-distance service, Federal (FCC), each specified mechanics OSS would be met. When LECs complained that was violating obligation, PSC FCC opened parallel investigations, led imposition financial penalties, remediation measures, additional reporting requirements Verizon. Respondent, service customer then filed this class action alleging, inter alia, had filled rivals' orders discriminatory basis part anticompetitive scheme discourage customers from becoming or remaining violation 2 Sherman Act, 15 2. District dismissed complaint, concluding respondent's allegations deficient assistance failed satisfy 2's requirements. Second Circuit reinstated antitrust claim. Held: Respondent's complaint alleging breach LEC's competitors does not state claim under Act. Pp. 405-416. (a) no effect application traditional principles. Its saving clause—which provides "nothing . shall construed modify, impair, supersede applicability any laws," 152, note—preserves claims established standards, but create new go beyond those standards. 405-407. (b) activity respondent complains violate pre-existing leading case imposing liability for refusal deal Aspen Skiing Co. v. Highlands Corp., 472 585, concluded defendant's termination voluntary agreement plaintiff suggested willingness forsake short-term profits achieve end. at near outer boundary liability, present fit within limited exception recognized. Because allege ever engaged course dealing rivals, prior conduct sheds light whether lapses legally compelled were anticompetitive. Moreover, defendant turned down competitor's proposal sell own retail price, suggesting calculation future monopoly price higher, whereas reluctance interconnect cost-based rate compensation available uninformative. More fundamentally, refused competitor product already sold retail, here offered pursuant are public, provided compulsion considerable expense. Court's conclusion change even if considered law "essential facilities" doctrine crafted some lower courts. indispensable requirement invoking unavailability facilities"; where exists, virtue serves purpose. 407-411. (c) Traditional principles do justify adding few existing exceptions proposition there aid competitors. Antitrust analysis must always attuned particular structure circumstances industry issue. exists regulatory designed deter remedy harm, benefit competition enforcement tend small, less plausible laws contemplate scrutiny. Here subject oversight PSC, both agencies responded failure raised fines other burdens Against slight benefits intervention weighed realistic assessment costs. Allegations violations duties technical extremely numerous, hence difficult courts evaluate. Applying regime can readily result "false positive" mistaken inferences chill very protect. Matsushita Elec. Industrial Zenith Radio 475 574, 594. 411-416. 305 F. 3d 89, reversed remanded. SCALIA, J., delivered opinion Court, REHNQUIST, O'CONNOR, KENNEDY, GINSBURG, BREYER, JJ., joined. STEVENS, concurring judgment, SOUTER THOMAS, joined, post, p. 416. 1 CERTIORARI TO THE UNITED STATES COURT APPEALS FOR SECOND CIRCUIT. Richard G. Taranto argued cause petitioner. With him briefs John Thorne, Michael K. Kellogg, Mark Hansen, Aaron M. Panner, Henry B. Gutman. 3 Solicitor General Olson States et al. amici curiae urging reversal. brief Acting Assistant Attorney Pate, Deputy Clement, Jeffrey A. Lamken, Catherine O'Sullivan, Nancy Garrison, David Seidman. 4 Donald Verrilli, Jr., respondent. Alice McInerney, Bruce Spiva, Ian Heath Gershengorn, Marc Goldman, Elaine J. Goldenberg, Chester T. Kamin.* 5 JUSTICE SCALIA Court. 6 1996, Pub. L. 104-104, 110 Stat. 56, certain companies order facilitate market entry establishes complex monitoring enforcement. In we consider incumbent's states 26 209. 7 * Inc. serving State. Before Verizon,1 like enjoyed exclusive franchise area. sought "uproo[t]" LECs' introduce place. FCC, 535 467, 488 (2002). Central 251(c) AT&T Corp. Iowa Utilities Bd., 525 366, 371 (1999), basis. (UNEs), recombined belonging LECs. 8 Verizon, taken two significant steps Act's framework direction increased competition. First, obliged 252, (Because could agree terms, open issues subjected compulsory arbitration §§ 252(b) (c).) 1997, regulator, York's AT&T. 9 Second, advantage opportunity enter (from they long been excluded). That required satisfy, among things, 14-item checklist statutory requirements, includes compliance network-sharing duties. 271(d)(3)(A) (c)(2)(B). Checklist item two, example, "[n]ondiscriminatory accordance requirements" 271(c)(2)(B)(ii). Whereas regulator approves approval applies (FCC). December 1999, 271 York. 10 set used services ensure quality. As relevant here, sends through electronic interface ordering system, completes filling order, confirmation back same interface. Without 11 late regulators many going unfilled, functions. series consent decree FCC.2 Under decree, undertook "voluntary contribution" Treasury amount $3 million, Rcd. 5415, 5421, ¶ 16 (2000); orders, incurred $10 million. performance measurements penalties continued noncompliance. June 2000, terminated decree. Enforcement Bureau Announces Bell Atlantic Has Satisfied Consent Decree Regarding Electronic Ordering Systems (June 20, 2000), http://www. fcc.gov/eb/News_Releases/bellatlet.html (all Internet materials visited Dec. 12, 2003, Clerk file). next month relieved heightened requirement. Order Addressing Issues, MCI WorldCom, Atlantic-New York, Nos. 00-C-0008, 00-C-0009, 99-C-0949, 2000 WL 1531916 (N. Y. July 27, 2000). 12 Respondent Law Offices Curtis Trinko, LLP, City firm, day after entered Southern behalf itself similarly situated customers. See App. 12-33. later amended, id., 34-50, alleged thus impeding ability compete service. See, e.g., 34-35, 46-47, ¶¶ 1, 2, 52, 54. According "has [competitive LEC] phone timely manner, all, substantial number ., systematically inform LECs] status their orders." Id., 39, 21. forth single example "failure adequate LECs]," namely, resulted 40, 22. It asserted improper "behavior respect providing loop" "deter potential [of rivals] switching." 47, 57, 35, damages injunctive relief provisions Clayton 38 731, 15, 26. also 202(a) 1934, 48 1064, 151 seq., law. 13 entirety. portion, Appeals part, 113 We granted certiorari, question erred reversing dismissal claims. 538 905 (2003). II 14 To decide case, first determine what (if any) large LECs—above basic responsibilities all carriers, assuring portability rights-of-way, 251(b)(2), (4). sharing offer three kinds access. Already noted, perhaps most intrusive, UNEs "just, reasonable, nondiscriminatory" 251(c)(3), phrase interpreted mean reflecting long-run incremental cost. S., 495-496. A facilities LEC, simply purchase wholesale them consumers. 251(c)(2), incumbents allow physical "collocation"—that is, permit locate install equipment premises—which makes feasible UNEs. 251(c)(6). Congress created duties, however, automatically lead enforced means Indeed, detailed ordinarily raises regulated entities shielded scrutiny altogether implied immunity. e. g., National Assn. Securities Dealers, 422 694 (1975); Gordon Stock Exchange, 659 (1975). respects up good candidate implication immunity, avoid real possibility judgments conflicting agency's "that might voiced exercising jurisdiction laws." supra, 734. Congress, precluded interpretation. Section 601(b)(1) antitrust-specific clause amendments made 143, note. This bars finding put point, preserves "claims standards." Brief Amici Curiae Supporting Neither Party 02-7057, Covad (CADC), 8. 17 But just standards; equally inconsistent clause's mandate nothing "modify, applicability" laws. turn, then, violates III 18 alleges denied limit entry. If allegation so declares firm "monopolize" "attempt monopolize." Ibid. settled offense requires, addition possession power market, "the willful acquisition maintenance distinguished growth development consequence superior product, business acumen, historic accident." Grinnell 384 563, 570-571 (1966). mere power, concomitant charging prices, only unlawful; important element free-market system. charge prices—at least short period— attracts "business acumen" place; induces risk taking produces innovation economic growth. safeguard incentive innovate, found unlawful unless accompanied conduct. 19 Firms may acquire establishing infrastructure renders uniquely suited serve Compelling firms source tension underlying purpose law, since lessen monopolist, rival, invest economically beneficial facilities. Enforced requires act central planners, identifying proper quantity, dealing—a role ill-suited. compelling negotiation between supreme evil antitrust: collusion. Thus, general matter, "does restrict recognized right [a] trader manufacturer entirely private business, freely exercise his independent discretion parties whom he deal." Colgate & Co., 250 300, 307 (1919). 20 However, "[t]he high value have placed refuse unqualified." 601 (1985). circumstances, cooperate constitute cautious recognizing exceptions, because uncertain forced difficulty remedying firm. before us today principles, one. 21 based understandably places greatest reliance, Skiing, supra. ski area consisted four mountain areas. defendant, who owned areas, plaintiff, fourth, cooperated years issuance joint, multiple-day, all-area ticket. After repeatedly demanding proceeds, canceled joint concerned skiers bypass offering, tried variety increasingly desperate measures re-create ticket, point offering buy tickets price. 593-594. that. upheld jury verdict reasoning well [the defendant] elected forgo short-run more interested reducing over run harming smaller competitor." 608. 22 liability. significance decision cease participation cooperative venture. 608, 610-611. unilateral (and presumably profitable) Similarly, unwillingness renew ticket compensated revealed distinctly bent. 23 Skiing. voluntarily done absent compulsion. Here, therefore, motivation deal—upon prompted zeal malice. contrast cases difference pricing behavior. higher. tells about dreams monopoly. 24 specific nature compels different fundamental way. retail—to oversimplify slightly, lift representing bundle skiers. Otter Tail Power States, 410 366 (1973), another relied respondent, (power transmission network), 370-371, 377-378. contrast, allegedly withheld otherwise marketed public. imposed "something brand new"—"the leasing elements." 528. exist deep bowels Verizon; brought out consumers expense effort. implemented possible—indeed, one complaint.3 25 conclude insufficient refusal-to-deal precedents. unchanged courts, generally Areeda, Essential Facilities: An Epithet Need Limiting Principles, 58 841 (1989). never doctrine, 611, n. 44; 428 (opinion J.), find need either recognize repudiate here. suffices purposes note said facility should federal agency effective compel regulate scope terms." P. Areeda H. Hovenkamp, Law, 150, 773e (2003 Supp.). believes existence supports case. think opposite: extensive unnecessary impose judicial extent argument distinct argument, reject it. IV Finally, believe attention context awareness regulation. "careful account pervasive regulation characteristic industry." Citizens Nat. Bank, 86, 91 IA 240c3 (2d ed. "[A]ntitrust sensitively reflect distinctive legal setting applies." Concord Boston Edison 915 2d 17, (CA1 1990) (Breyer, J.) (internal quotation marks omitted). 27 One factor importance harm. Where Where, "[t]here built into performs function," Silver 373 341, 358 (1963), worth sometimes disadvantages. Just see, 730-735, consideration deciding expansion contours 28 demonstrates how, "regulation significantly diminishes likelihood major harm." 25. Consider, restrictions potentially lucrative allowed place, behavior market. Authorization state-by-state satisfaction 271's checklist, noted nondiscriminatory applications now Columbia. Authorizes SBC Provide Long Distance Illinois, Indiana, Ohio Wisconsin (Oct. 2003), http://hraunfoss. fcc.gov/edocs_ public/attachmatch/DOC-239978A1.pdf. 29 FCC's discussed great length commitments UNEs, OSS. re Application In-Region, InterLATA State 3953, 3989-4077, 82-228 (1999) (Memorandum Opinion Order) (hereinafter Application). Those enforceable continuing oversight; meet condition deficiency corrected, suspension revocation approval. 271(d)(6)(A). "Performance Assurance Plan" (PAP). Telephone 197 R. 4th 266, 280-281 1999) (Order Adopting Amended PAP) PAP). PAP, became binding approval, event described having PAP authorization, "a strong post-entry section checklist," prevented "`backsliding.'" 3958-3959, 8, 12. 30 response suit vivid how operates. several deficiencies servicing responded. soon fine, sophisticated gauge remediation, weekly failure. earlier, daily short, steward function. 31 weigh best applying "can difficult" illicit exclusion, legitimate competition, myriad." Microsoft 253 34, (CADC 2001) (en banc) (per curiam). Mistaken resulting false condemnations "are especially costly, protect." 594 (1986). cost positives counsels against undue false-positive sufficient alacrity exclusion. evaluate, highly technical, likely given incessant, complex, constantly changing interaction implementing obligations. asserting threatened "death thousand cuts," omitted)—the identification surely daunting task generalist court. Judicial seem destined distort investment layer interminable litigation, atop litigation routes actively pursued 32 Even problem did exist, consisting 251 be, above-cost predatory schemes, "beyond practical tribunal control." Brooke Group Ltd. Brown Williamson Tobacco 509 209, 223 (1993). Effective require supervision Professor got exactly right: "No court explain adequately reasonably supervise. deemed irremedia[ble] when assume day-to-day controls agency." 853. requested equitable "[p]reliminarily permanently enjoi[n] [Verizon] loop [rivals] conditions favorable" enjoys. 49-50. unlikely enforcer obligations.4 33 34 respect, much ambitious than attempts "to eliminate monopolies inheritors AT&T's franchises." 476 (emphasis added). seeks merely prevent monopolization. serious mistake conflate goals. indeed "Magna Carta free enterprise," Topco Associates, 405 596, 610 (1972), give judges carte blanche insist monopolist alter way doing whenever approach yield greater fails Act.5 35 Accordingly, judgment reversed, remanded further proceedings consistent opinion. 36 ordered. Notes: Briefs ofamici reversal Commonwealth Virginia Jerry W. Kilgore, Virginia, William Hurd, Solicitor, Maureen Riley Matsen E. Thro, Solicitors, Judith Williams Jagdmann, General, Meade Browder, Senior Sarah Oxenham Allen Raymond Doggett, Attorneys respective follows: Pryor, Alabama, Jane Brady Delaware, Steve Carter Jon Bruning Nebraska, Peter Heed Hampshire, Drew Edmondson Oklahoma, Shurtleff Utah; BellSouth Stephen Shapiro, Muench, Sarles, Gary, Galonsky, Schur; Workers America Patrick Scanlon, Andrew D. Roth, Laurence Gold; Industry Association I. Baker; Parcel Service, Days III, Smith, Beth Brinkmann, Paul Friedman, Kreindler; Telecom Lake, James Rill, Olson, McMenamin; Washington Legal Foundation Steven Bradbury, Daniel Popeo, Price. affirmance Eliot Spitzer, Caitlin Halligan, Michelle Aronowitz, Chepaitis, Jay Himes, Susanna Zwerling, Schwartz, Keith Gordon, Robert Spagnoletti, Corporation Counsel Columbia, jurisdictions Terry Goddard Arizona, Blumenthal Connecticut, Rowe Maine, Joseph Curran, Maryland, Cox Michigan, Mike Hatch Minnesota, Jeremiah (Jay) Nixon Missouri, McGrath Montana, Hardy Myers Oregon, Anabelle Rodríguez Puerto Rico, Sorrell Vermont, Darrell McGraw, West Peggy Lautenschlager Wisconsin; Allegiance Telecom, Rindler, Eric Branfman, Rebecca Dick, Christopher Holt, Metzger; American Institute Jonathan Rubin Albert Foer; Carpenter Perkins; Consumers Union McNeely O'Connor; Alfred Pfeiffer, Jr.; Economics Professors Phillips Frederick Beckner III; Semeraro; Utility Consumer Advocates Gerald Norlander Tongren; Z-Tel Technologies, Wright. Bork Project Promote Competition Innovation Digital Age amicus curiae. NYNEX subsequently merged Corporation, entity retained name; merger produced use "Verizon" refer Directing Improvements Wholesale Performance,MCI 363378 Feb. 11, 2000); Market Adjustments Amending Performance Plan, 517633 Mar. 23, 5413 (2000) (Order); 5415 (Consent Decree). relies uponUnited Terminal Railroad St. Louis, 224 383 (1912), Associated Press 326 (1945). These involved concerted action, presents concerns amenable estimation forces: requiring outsider admission club. thought "monopoly leveraging" theory (a barely 24, 10). disagree. dispensed "dangerous probability success" monopolizing second erred,Spectrum Sports, McQuillan, 506 447, 459 event, leveraging presupposes conduct, rejected. Our disposition petitioner's alternative contention lacks standing. SeeSteel Better Environment, 523 83, 97, (1998); Passenger Passengers, 414 453, 456 (1974). 37 THOMAS join, judgment. usually wise begin standing maintain action. received unsatisfactory adversely affects customers, treble damages, "any person injured property." 15. threshold presented whether, assuming truth allegations, "person" meaning 4. 39 unquestionably text statute literally. eschewed literal reading 4, particularly indirect relationship misconduct plaintiff's injury. Gen. Contractors Cal., Carpenters, 519, 529-535 (1983). cases, avoiding duplicate recoveries hand, danger apportionment other," weighs heavily 543-544. interpretation adhered Justice Holmes' observation "general tendency regard least, step." Pacific Darnell-Taenzer Lumber 245 531, 533 (1918). 40 I step Although contends injuries were, Blue Shield Va. McCready, 457 465, 479 (1982), illegal ends," remains whatever injury suffered purely derivative suffered. And reason, suit, unlike runs duplicative damages. determining monetary harm caused inferior portion attributable misconduct, possible prohibited offset, any, room recovery whole, daunting. direct victim far better position vindicate public interest Denying leave undetected unremedied, "in keeping trials judicially manageable limits." Contractors, 543. 41 my our reverse Appeals. merits until advanced carrier.

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