The U.S. Supreme Court has unanimously overturned an appeals court ruling that found a New York law firm had the right to sue Verizon Communications Inc. based on antitrust law.
The ruling signaled a loss for local phone providers and consumers seeking to sue the regional Bell operating companies and possibly recover triple damages based on the Sherman Antitrust Act.
“While we are disappointed in the Supreme Court’s decision in this particular case, we believe it does not foreclose the ability of competitive service providers to pursue antitrust actions against the Bell companies, though under narrower circumstances than we believe warranted,” said H. Russell Frisby Jr., CEO of the CompTel/ASCENT Alliance, a trade group representing phone companies competing with Verizon and the other Bells.
In a previous antitrust case known as Goldwasser vs. Ameritech, a federal appeals court judge said the antitrust laws would add nothing to the oversight provided by the Telecommunications Act of 1996.
Supreme Court Justice Antonin Scalia said in the decision released today where a regulatory structure exists to deter anticompetitive behavior, "the additional benefit to competition provided by antitrust enforcement will tend to be small, and it will be less plausible that the antitrust laws contemplate such scrutiny."
In the antitrust case filed in 2000, the law firm of Curtis V. Trinko alleged Verizon provided bad service to the firm's local phone company, AT&T Corp. AT&T leased network components from Verizon.
Supreme Court Justice John Paul Stevens said in concurring remarks, "AT&T, as the direct victim of Verizon's alleged misconduct, is in a far better position than respondent … [Trinko] to vindicate the public interest in enforcement of the antitrust laws."
In an antitrust case, plaintiffs can recover triple the amount of damages awarded. For example, if a judge or jury awarded $50,000 in damages, a plaintiff may recover $150,000.
