## Facts

- Consumers of text-messaging services brought consolidated class actions alleging major wireless carriers conspired to fix text-message prices in violation of Sherman Act § 1.
- Defendants included large nationwide carriers such as Verizon Wireless, AT&T Mobility, Sprint Nextel, and T-Mobile.
- Plaintiffs alleged defendants engaged in closely timed, parallel price increases and converged on uniform or near-uniform per-message pricing, despite alleged falling costs.
- Plaintiffs alleged a highly concentrated market with barriers to entry and repeated opportunities for coordination through trade-association participation, leadership councils, and industry meetings.
- Plaintiffs alleged defendants exchanged pricing information and adopted similar pricing structures that plaintiffs claimed lacked a competitive justification.
- The district court dismissed an earlier complaint but denied defendants’ Rule 12(b)(6) motion to dismiss the second amended complaint under Twombly.
- The district court certified an interlocutory appeal under 28 U.S.C. § 1292(b) on whether the complaint satisfied Twombly’s plausibility standard.

## Issues

1. Whether denial of a Twombly-based Rule 12(b)(6) motion can present a “controlling question of law” appropriate for interlocutory appeal under 28 U.S.C. § 1292(b).
2. Whether the second amended complaint plausibly alleged an agreement to fix prices under Sherman Act § 1, as required by Twombly and Iqbal.

## Decision

- The Seventh Circuit granted permission to take the interlocutory appeal under § 1292(b).
- The court held the appeal presented a controlling legal question because it involved the meaning and application of an unsettled pleading standard, not merely a routine case-specific dispute.
- On the merits, the court affirmed the district court’s denial of the motion to dismiss.
- The court held the complaint plausibly alleged a § 1 price-fixing conspiracy by combining allegations of parallel pricing with market structure, opportunities to coordinate, and information exchanges that supported an inference of concerted action.
- The court emphasized that direct evidence of an express agreement is not required at the pleading stage; circumstantial allegations can suffice to permit discovery.

## Legal Principles

- Under Twombly/Iqbal, a complaint must plead enough factual matter to support a reasonable inference of liability and to justify imposing discovery burdens; conclusory allegations and mere parallel conduct alone are insufficient.
- In Sherman Act § 1 cases, plaintiffs need not plead “direct” evidence or the precise terms of an express agreement; plausibility may be shown through contextual and circumstantial facts suggesting a concerted plan.
- Parallel pricing can be lawful oligopolistic behavior; plausibility increases when parallelism is coupled with allegations of facilitating practices (such as information exchanges) and market conditions that make collusion more likely.
- An interlocutory appeal may be appropriate under § 1292(b) when a case raises a controlling legal question about an unsettled standard whose resolution may materially advance the litigation.

## Conclusion

The Seventh Circuit treated the scope of Twombly’s antitrust pleading standard as a controlling legal question suitable for interlocutory review and held that plaintiffs plausibly alleged a § 1 text-messaging price-fixing conspiracy based on parallel pricing plus factual context indicating possible coordination, allowing the case to proceed to discovery.


In re Text Messaging Antitrust Litig., 630 F.3d 622 (7th Cir. 2010)