Antitrust MDL Against Mobile Carriers Dismissed

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Lawsuits alleging four large mobile carriers conspired to artificially increase and fix the price of text message rates was dismissed by the Seventh Circuit Court of Appeals.

Friday, April 10, 2015 - Plaintiffs that claimed a number of large wireless companies of conspiring to artificially raise the pay-per-message price for text messaging received a final blow from the Seventh Circuit Court of Appeals when the three-judge panel reviewing their case did not revive the lawsuits, ending multidistrict litigation. The MDL, which was initially filed in December of 2008, had survived previous bids from the defense to toss the case before the Seventh Circuit before it was finally dismissed on Thursday.

The court‘s ruling hinged on a series of emails sent between a T-Mobile executive and an employee at another carrier that allegedly supported the claims of price-fixing. The judges concluded that the emails in question, upon which much of the case relied, did not stand as ample evidence that the mobile carriers were involved in a price-fixing scheme.

The mobile carriers involved in the lawsuit include AT&T Mobility LLC, Sprint Corp., T-Mobile USA Inc., and Verizon Wireless LLC. In a previous ruling that continued the MDL in 2011, the Seventh Circuit referenced a recent U.S. Supreme Court decision against Bell Atlantic Corp. to keep the MDL alive. However, the court maintained that the plaintiffs still lacked definite evidence against the carriers. The lawsuits went on with only circumstantial evidence supporting their claims.

The plaintiffs in the case alleged that the four mobile carriers had conspired to artificially inflate and maintain their rates for text messaging, a violation of antitrust laws under the Sherman Act. The agreements to make the antitrust pact among the companies were allegedly made at the CTIA industry meeting where pricing decisions are discussed among the carriers.

The plaintiffs also referenced a raise in prices among the carriers to go against industry-wide drops in text messaging rates over the same span of time. The complaint claims that the prices were far more complex before the alleged price-fixing scheme went into place, after which most of the rates became identical. Although there was almost no cost to the carriers to process text messages, the per text rate during the time of question popped up to 20 cents per message. This constituted a price increase nearly a third higher that the previous cost.

Even with the dismissal of the evidence and the MDL along with it, the 2011 ruling concerning the case is influential as it allowed an antitrust case with no "smoking gun" evidence to proceed. This may allow for circumstantial evidence to meet a standard of proof legitimate enough to litigate against future defendants accused of price-fixing. The closest element the plaintiff‘s case had to a smoking gun were the series of emails, which were dismissed in the recent ruling as inconclusive at best.

Although this break between circumstantial and hard evidence was what ultimately ended the text messaging antitrust case, the fact that it was allowed to continue to this point is relevant to the progression of future antitrust cases with similarly evidenced claims. Also the judge who made the ruling, Judge Richard Ponser, is an experienced and respected judge in antitrust litigation and his decision to allow the progression of the lawsuit on mostly circumstantial evidence will go on to set a significant precedent concerning antitrust litigation in the future.