AAI Urges Fourth Circuit to Correct District Court’s Erroneous Readings of Supreme Court Precedent that Risk Giving Free Pass to Monopolists in Regulated Industries
On March 20, 2023, AAI filed an amicus brief in the Fourth Circuit in support of NTE Carolinas’ appeal of the district court’s grant of summary judgment on its Section 2 claims against Duke Energy. The brief argues that the district court made two crucial mistakes in its analysis that mandate reversal — failing to consider the cumulative anticompetitive effects of Duke Energy’s conduct in thwarting development of NTE’s competing electricity generating plant and applying an incorrect and overly stringent test for NTE’s refusal to deal claim.
On the first issue, AAI pointed out that the district court opinion wrongly required that each aspect of Duke Energy’s conduct in obstructing the Reidsville plant individually satisfy the requirements for Section 2 liability. AAI argued that this analysis ignored entirely the cumulative effect of the conduct and thus failed to follow clear precedent from the Supreme Court. AAI noted that the failure to do so in this case was particularly problematic because NTE alleged a series of interrelated and mutually reinforcing actions as part of Duke Energy’s self-described “combat strategy” to “stop the NTE train.”
On the refusal to deal issue, AAI argued that the district court misapplied the Supreme Court precedent in both Trinko and Aspen Skiing by requiring that NTE show a voluntary prior course of conduct at a retail price. In so doing, the district court misread Trinko as granting blanket immunity for monopolists in regulated industries and read unnecessary, fact-specific requirements into the Aspen Skiing analysis of refusal to deal claims. AAI argued that the district court, by making regulation outcome determinative, improperly transformed Trinko from a shield against new kinds of antitrust liability into a sword that attacks even well-established antitrust violations. AAI further noted that the district court’s narrow focus on the “voluntariness” of Duke Energy’s prior course of dealing incorrectly applied the analysis in Aspen Skiing.
AAI noted that these misreadings led the district court to overlook clear evidence of anticompetitive intent and effect. As a result, the district court made no demand on Duke Energy to provide any procompetitive justification for its conduct. AAI argued that, given these mistakes, the grant of summary judgment on NTE’s Section 2 claims should be reversed.
The brief was written by AAI Vice President of Legal Advocacy Kathleen Bradish, with assistance from AAI Research Fellow Mathew Simkovits.
Read the full brief here.