AAI has helped plaintiffs win a resounding victory on the liability standards courts apply when plaintiffs allege anticompetitive refusals to deal and a course of conduct that has cumulative anticompetitive effects.
On August 5, 2024, in Duke Energy v. NTE Carolinas, the Fourth Circuit reversed a district court’s grant of summary judgment on NTE Carolinas’ Section 2 claims. NTE Carolinas had argued that Duke Energy engaged in a complex multi-pronged “combat strategy” meant to exclude it as a new, highly efficient competitor in energy generation. AAI believed NTE’s claims presented genuine issues for trial and filed an amicus brief urging reversal.
The Fourth Circuit agreed with AAI, embracing arguments in AAI’s brief. It held that the district court made critical errors in its Section 2 analysis. First, the district court failed to consider the cumulative anticompetitive effects of Duke Energy’s actions to hinder the development of NTE’s competing electricity plant. Second, it found the district court applied an incorrect and overly stringent standard for evaluating NTE’s refusal to deal claim.
On the first issue, the Fourth Circuit agreed with AAI and plaintiffs that the district court incorrectly required each of Duke Energy’s actions to individually meet Section 2 liability requirements, ignoring the cumulative impact of these actions as part of a coordinated strategy to block NTE’s project. As the Fourth Circuit described in detail, this approach contradicts established Supreme Court precedent, which emphasizes the combined effects of anticompetitive conduct. The court rejected any notion of “court-made subcategories” of anticompetitive conduct and instead affirmed that it is “foundational” to Section 2 caselaw that the “anticompetitive conduct must be considered as a whole.” The opinion observes that the alleged acts must not be considered in isolation but “together as the parts of a single plan” and emphasizes that the “plan may make the parts unlawful.”
On the refusal to deal claim, the Fourth Circuit found, consistent with AAI’s position, that the district court misapplied the Supreme Court’s rulings in Trinko and Aspen Skiing by demanding that NTE demonstrate a voluntary prior course of conduct and refusal to sell at a retail price. It also rejected a “voluntariness” requirement as giving regulated industries too much insulation from antitrust enforcement. Trinko did not “adopt a rule that unlawful refusals to deal were impossible in regulated markets,” the appellate court reasoned, but rather affirmed that regulatory oversight is one “factor” in the antitrust analysis.
The AAI brief was written by AAI Vice President of Legal Advocacy Kathleen Bradish, with assistance from former AAI Research Fellow Mathew Simkovits.
