Opinion ID: 186414
Heading Depth: 2
Heading Rank: 1

Heading: Has Covad Distinguished Trinko?

Text: 12 At the outset Covad contends its complaint is materially different from the complaint in Trinko, and should be reinstated in its entirety, because the complaint in Trinko stated only the narrowest of claims, whereas its complaint alleged the defendant ILEC: (1) engaged in a vast array of anticompetitive conduct; and (2) sought to export its monopoly power to a downstream market. Covad also maintains (3) the district court erroneously held the 1996 Act implicitly granted antitrust immunity for a carrier regulated by the 1996 Act — an interpretation specifically rejected by the Supreme Court in Trinko, 540 U.S. at 406, 124 S.Ct. 872. 13 Covad's first distinction is legally irrelevant. A violation of § 2 of the Sherman Act requires, in addition to the possession of monopoly power in the relevant market, the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident. Id. at 407, 124 S.Ct. 872. Accordingly, a would-be monopolist... comes within the condemnation of the Sherman Act [only] when it engages in `anticompetitive conduct.' Caribbean Broad. Sys., 148 F.3d at 1087; see Trinko, 540 U.S. at 407, 124 S.Ct. 872. Therefore, as Bell Atlantic argues, whether a particular allegation states a claim under the Sherman Act depends entirely upon the competitive significance of the conduct alleged, and not at all upon the number or detail of the allegations recited in the complaint. 14 Covad's second distinction of Trinko, that Bell Atlantic attempted to leverage monopoly power from one market into another, is equally unavailing. As Bell Atlantic is quick to point out, the Court in Trinko rejected a similar argument, see 540 U.S. at 415 n. 4, 124 S.Ct. 872 (holding theory of second-market leveraging presupposes anticompetitive conduct, which in this case could only be the refusal-to-deal claim we have rejected). If Covad does not allege any anticompetitive conduct in Bell Atlantic's acquisition or maintenance of monopoly power, then it is of no moment whether Bell Atlantic allegedly exercised monopoly power in two markets rather than in one. 15 Covad's final point, namely, that the district court erroneously granted Bell Atlantic implied antitrust immunity insofar as it is regulated by the 1996 Act, simply misstates the holding of the district court. Although that court [could] not help but note in a dictum the fundamental incompatibility between the remedial scheme of the 1996 Act and the remedies available under the Sherman Act — as would the Supreme Court in Trinko, see 540 U.S. at 406, 124 S.Ct. 872 (1996 Act is a good candidate for implication of antitrust immunity, to avoid the real possibility of judgments conflicting with the agency's regulatory scheme) — that was not in the district court's view dispositive of Covad's antitrust claims. 201 F.Supp.2d at 133. Indeed, as Bell Atlantic notes, the district court did not need to consider whether the 1996 Act granted Bell Atlantic, as an ILEC, implicit antitrust immunity because it had already held Covad's allegations that Bell Atlantic had violated the 1996 Act did not give rise to an antitrust claim. See id. at 130-33. 16 Because Covad fails either to distinguish Trinko or to show the district court's analysis is inconsistent with that decision, we review Covad's complaint in light of the Supreme Court's holding that the 1996 Act did not alter preexisting antitrust standards. 540 U.S. at 406-07, 124 S.Ct. 872. That Bell Atlantic's alleged conduct may violate the 1996 Act does not, of course, mean that same conduct cannot violate the Sherman Act. The question to which we now turn, therefore, is whether any of the conduct alleged in Covad's complaint, regardless whether it violated the 1996 Act, violated § 2 of the Sherman Act. 17