In re Text Messaging Antitrust Litigation
46 F. Supp. 3d 788
N.D. Ill.2014Background
- Plaintiffs sue on behalf of those who paid fee-per-text-message for PPU SMS from AT&T, Sprint, T-Mobile, Verizon, and CTIA, alleging a Sherman Act §1 conspiracy to fix prices.
- The dispute centers on PPU SMS pricing increases from ten cents to twenty cents between 2005 and 2008, not bundled plans.
- Plaintiffs contend high-level carrier officers coordinated increases using CTIA meetings and sham analyses to justify pricing moves; defendants argue independent profit-maximizing analyses within an environment not conducive to collusion.
- The case history includes prior dismissal of the original complaint, amendment of the complaint, denial of a second motion to dismiss, and Seventh Circuit affirmation on interlocutory appeal.
- Plaintiffs allege spoliation: destruction or loss of emails and notebooks, including Hurditch-Roddy emails and Roddy’s notebooks, with requests for adverse-inference sanctions.
- The court resolves the motions: grants summary judgment for defendants, denies plaintiffs’ spoliation sanctions/adverse inference, and grants leave to file a surreply.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether spoliation entitles adverse inference | Plaintiffs claim bad-faith destruction of emails/notebooks warrants adverse inference. | Seventh Circuit requires intentional destruction for bad faith; evidence here is insufficient. | Adverse inference denied; spoliation not shown in required bad-faith form. |
| Whether CTIA/destruction evidence supports conspiracy | Desautels’ emails and CTIA deletions could prove collusion. | No showing that missing CTIA materials were destroyed to hide adverse information. | No triable issue; insufficient evidence CTIA destruction demonstrates conspiracy. |
| Whether there is genuine issue of material fact for Sherman Act §1 | Economic and non-economic evidence show parallel conduct plus factors suggesting conspiracy. | Evidence shows independent action and parallel conduct; no meeting of the minds. | Summary judgment for defendants; evidence does not preclude independent action. |
| Whether Hurditch email constitutes direct evidence | Hurditch email stating 'collusive' shows outright price-fixing admission. | Email is not direct evidence of a price-fixing agreement; Hurditch lacked involvement. | Hurditch email not direct evidence; insufficient to defeat summary judgment. |
| Whether court should permit surreply on pretext justification | Surreply shows pretextual rationale for price increases toward bundled plans. | Surreply does not create material disputes; parallel conduct remains unmoved. | Surreply granted, but does not create triable issue; summary judgment stands. |
Key Cases Cited
- Faas v. Sears, Roebuck & Co., 532 F.3d 633 (7th Cir. 2008) (bad-faith destruction required for adverse inference)
- Bracey v. Grondin, 712 F.3d 1012 (7th Cir. 2013) (stringent bad-faith standard for spoliation inferences)
- Norman-Nunnery v. Madison Area Technical Coll., 625 F.3d 422 (7th Cir. 2010) (adverse inference requires intent to hide adverse information)
- Everett v. Cook Cnty., 655 F.3d 723 (7th Cir. 2011) (spoliation standards and adverse-inference considerations)
- Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752 (Supreme Court 1984) (direct evidence can prove price-fixing; circumstantial evidence requires inference of conspiracy)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (S. Ct. 2007) (antitrust claims require plausible inference against mere parallelism)
- Omnicare, Inc. v. UnitedHealth Grp., Inc., 629 F.3d 697 (7th Cir. 2011) (ambiguous evidence requires additional indications of agreement)
- High Fructose Corn Syrup Antitrust Litig., 295 F.3d 651 (7th Cir. 2002) (coterminous plus factors used to infer conspiracy; caution against mere parallelism)
- Toys “R” Us, Inc. v. FTC, 221 F.3d 928 (7th Cir. 2000) (parallel conduct with no meeting of the minds not enough)
- Park v. City of Chicago, 297 F.3d 606 (7th Cir. 2002) (record-retention violations do not automatically trigger adverse inference)
- Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752 (1984) (direct evidence of conspiracy is powerful; circumstantial evidence must exclude independent action)