Distribution, Competition, and Antitrust / IP Law

Twombly’s Teeth

Occasionally a would-be plaintiff (or counter-claimant) asks whether one can file an antitrust claim and then get some discovery to back it up.

This is not a good game plan.

In Eastman v. Quest Diagnostics Inc., 2016 U.S. Dist. LEXIS 1282 (N.D. Cal. Jan. 6, 2016) (Orrick, J.), the plaintiffs sought pre-complaint discovery from the defendant, including its fee-for-service pricing for the years 2013 and 2015 for six geographic areas.  The court refused to allow such discovery.  Citing Twombly’s concerns about the expense of antitrust discovery, the court wrote that “[t]he Rule 8 screening function would be rendered toothless if [plaintiff] were entitled to pre-complaint discovery in order to fish for conduct that gives rise to an antitrust violation.” (cit. omit.).

The court noted that not all the information necessary to plead a plausible claim was in the hands of the defendant.  Nor was it clear how the pricing information would be sufficient, on its own, to enable plaintiffs to cure the deficiencies in their complaint, because plaintiffs would still lack pricing information for the defendant’s competitors, and “would lack a coherent and plausible explanation as to why it is appropriate to assume that Quest’s pricing is attributable to its alleged antitrust violations.”

In antitrust cases, perhaps more than in others, it is important to gather the facts first before filing the claim.

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About Howard Ullman

Antitrust, competition, and IP law enthusiast.

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