Key Notes:

  • Since the Supreme Court’s Twombly decision, plaintiffs in antitrust cases have faced a “heightened” pleading standard. But how effectively does it screen cases?
  • Our study of motion to dismiss practice post-Twombly in “stand-alone” antitrust cases in the Sixth Circuit shows that the majority of defendants file such motions and they are successful around half of the time.
  • The increased likelihood of disposing of unsupported antitrust claims before spending significant time and money on litigation makes filing a motion to dismiss in stand-alone antitrust cases almost always worth the effort.

Your company has been sued in an antitrust lawsuit in the Sixth Circuit. Wouldn’t you like to know what’s likely to happen?

This issue of Antitrust Law Update attempts to measure the likely, or at least average, results that occur as a result of initial motions practice in such cases.

Over the last 12 years, district courts have applied the heightened pleading standard of Bell Atlantic Corp. v. Twombly in antitrust cases. In that case, the U.S. Supreme Court redefined the standard for pleading by requiring complaints to be plausible and contain specific factual allegations beyond simple notice pleading.

Twombly affects how plaintiffs allege claims in their complaints. But has it had any effect on motions to dismiss for failure to state a claim? To answer this question, we analyzed motions to dismiss in antitrust cases filed in the Sixth Circuit during a five-year period. Our analysis shows that motions to dismiss for failure to state a claim are not only common, but often successful.

Twombly and the Antitrust Motion to Dismiss

Since the Supreme Court’s decision in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), plaintiffs have had a higher pleading burden. The Court held that Rule 8(a)(2) of the Federal Rules of Civil Procedure requires plaintiffs to plead specific, fact-based allegations to establish a plausible claim for relief. Complaints that merely state conclusory allegations or simply enumerate the elements of a cause of action will not survive a motion to dismiss.

Twombly’s heightened pleading requirements have opened the door for more successful motions to dismiss in antitrust cases. Antitrust defendants can now dispose of unsupported allegations before spending significant time and money to defend against antitrust claims.

Our Study and Methodology

The purpose of our analysis is to examine Twombly’s effect on motion to dismiss practice in antitrust cases in the Sixth Circuit. Only cases meeting the following criteria were included in the analysis:

  • it was filed between January 1, 2013 and December 31, 2017,
  • it was filed in one of the district courts in the Sixth Circuit, and
  • it was a unique case (i.e., “stand-alone”) filing.

Our analysis excluded cases that were:

  • follow-ons from a previously filed case,
  • bound for multidistrict litigation (MDL), or
  • transferred to a district outside the Sixth Circuit.

We reasoned that most of the excluded cases were the result of criminal price-fixing investigations and prosecutions for which motions to dismiss were highly unlikely to be effective. If a set of complaints was filed together by the same plaintiffs on the same day, it was considered one case for purposes of this analysis. Likewise, a single case that appeared twice on a docket because it was reassigned between divisions in the same district was counted as one case.

Cases that met the criteria were then scrutinized based on whether the defendant filed a motion to dismiss for failure to state a claim. If a motion to dismiss was filed, three factors were considered:

  • whether the plaintiff amended the complaint after the motion was filed,
  • whether the motion was granted, and
  • whether the plaintiff appealed an order granting the motion to dismiss.

When a dismissal was appealed, the results of the appeal were also reviewed.

Motions to Dismiss Are the Sixth Circuit Norm

During the five years we examined, 275 antitrust cases were filed in the Sixth Circuit. Thirty-eight of those cases met the above criteria, while the remaining 237 cases were excluded because they were either follow-on cases, bound for MDL, or transferred to another district. The large number of exclusions was due principally to the substantial number of auto part price-fixing cases transferred to the Eastern District of Michigan and consolidated into a single MDL.

Of the 38 unique cases we analyzed, a motion to dismiss was filed in 25 cases. In eight cases, the plaintiffs amended the complaints after the defendants filed the motions to dismiss. Ten of the motions were granted in their entirety for failure to state an antitrust claim, and an eleventh motion was granted on the monopolization claim but denied on the other antitrust claims. Five of these decisions were appealed, and the Sixth Circuit affirmed all five dismissals. Nine of the motions to dismiss were denied because the court found the antitrust claims were sufficiently pleaded.

The remaining five motions were decided for reasons outside the Twombly analysis. One case was dismissed because the antitrust claims were precluded by a prior settlement agreement. One motion was denied as moot because the plaintiff moved for leave to file an amended complaint. Three cases were either settled or the plaintiff voluntarily dismissed before the court ruled on the motions to dismiss.

Motions to Dismiss Are Worth the Effort

The Twombly pleading standard has made it more difficult for plaintiffs to establish a plausible claim for relief, leading an increasing number of defendants to file early dispositive motions. Over the past five years, such motions were filed in the majority of unique antitrust cases in the Sixth Circuit. Given that dismissal was granted in over half the cases where the decision was based on a Twombly analysis, filing a motion to dismiss antitrust claims is almost always worth the effort.