Seventh Circuit States that Allegations of Direct Evidence of an Agreement in an Antitrust Lawsuit is Not Essential to Survive Twombly

January 26, 2011

In a recent opinion authored by Judge Posner, the Seventh Circuit refined the standards for surviving motions to dismiss under Twombly. In that case-In re Text Messaging Antitrust Litigation-the plaintiffs claimed that major cellular-phone providers conspired to fix prices of text-messaging services. The plaintiffs' complaint alleged that the defendants implemented a policy of "co-opetition" by exchanging price information at trade-association meetings, increasing prices despite falling costs, and simultaneously adopting a common pricing structure. The Seventh Circuit affirmed the district court's denial of a motion to dismiss, and concluded that the plaintiffs' complaint provided a sufficiently plausible case of price fixing to meet Twombly and Iqbal pleading standards. The court noted that even though the second amended complaint did not have a "smoking gun," the post-Twombly law does not require that the allegations "compel an inference of conspiracy," and continues to allow plaintiffs to rely on circumstantial evidence at the pleading stage.

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