Citation. 550 U.S. 544 (2007)
Brief Fact Summary.
Respondents filed a complaint on behalf of a proposed class of telephone service subscribers in federal district court, alleging that Petitioners violated Section 1 of the Sherman Act. The district court dismissed the complaint for failure to state a claim; the United States Court of Appeals for the Second Circuit reversed. The United States Supreme Court granted certiorari to address the proper pleading standard.
Synopsis of Rule of Law.
A complaint must allege enough facts to state a claim to relief that is plausible on its face.
Respondents filed a complaint in federal district court alleging that the Petitioners violated federal antitrust laws by conspiring to restrain trade and engaging in anticompetitive “parallel conduct” and also by agreeing not to compete. Finding that the complaint was based only on allegations of parallel conduct by the Petitioners, the district court dismissed the complaint for failure to state a claim. The United States Court of Appeals for the Second Circuit reversed. The United States Supreme Court granted certiorari to address the proper pleading standard for pleading an antitrust conspiracy through allegations of parallel conduct.
Did Respondents’ complaint, which alleged anti-competitive parallel conduct but no facts suggesting that an agreement was made, state a claim under Section 1 of the Sherman Act?
No. In order to state a claim for relief under Section 1 of the Sherman Act, the complaint must include enough factual material to suggest that an agreement was made.
The dissent argued the Respondents had alleged an agreement, which was not even denied because the complaint was dismissed in advance of the Petitioners’ answer, and that Respondents, in this case, should have had the opportunity to engage in at least some discovery by deposing at least one responsible executive representing the Petitioners.
A plaintiff’s complaint attacked by a Federal Rule of Civil Procedure 12(b)(6) motion to dismiss must provide more than labels and conclusions; factual allegations must be enough to raise a right to relief above the speculative level. In the case of a claim under Section 1 of the Sherman Act, stating a claim requires allegations that, taken as true, allege enough factual matter to suggest that an agreement was made.