## Facts

- The United States brought a civil antitrust action against AT&T, Western Electric, and Bell Labs, alleging monopolization and attempted monopolization in telecommunications markets under § 2 of the Sherman Act.
- The government asserted that AT&T’s integrated structure—control of local operating companies plus ownership of Western Electric (manufacturing) and Bell Labs (R&D and technical standards)—enabled it to maintain and extend monopoly power.
- Trial to the court began in January 1981; the government presented a lengthy case-in-chief including close to 100 witnesses and large volumes of documents and stipulations.
- After the government rested, defendants moved to dismiss under Fed. R. Civ. P. 41(b), arguing the government had failed to show a right to relief.
- The government’s evidence included alleged exclusionary practices such as pressuring operating companies to buy from Western Electric, using standards and design control to disadvantage rivals, and employing procurement and interconnection policies that foreclosed competing equipment suppliers.

## Issues

1. What standard governs a Rule 41(b) motion to dismiss at the close of the plaintiff’s evidence in a bench trial.
2. Whether the government’s evidence, with reasonable inferences drawn in its favor, was legally sufficient to support findings of monopoly power and exclusionary conduct under § 2 of the Sherman Act.

## Decision

- The court denied defendants’ Rule 41(b) motion.
- The court treated the motion similarly to a directed-verdict/judgment-as-a-matter-of-law inquiry, declining to resolve close credibility disputes against the government and giving the government reasonable inferences.
- The court held the government introduced sufficient evidence of dominance in key telecommunications markets and of conduct that could be found exclusionary rather than merely efficient or regulatorily justified.
- The court emphasized it was not finally deciding the merits, but determining only that the record required defendants to proceed with their evidence.

## Legal Principles

- In a nonjury trial, Rule 41(b) permits dismissal after the plaintiff’s case if, on the facts and law, the plaintiff has shown no right to relief.
- When the Rule 41(b) determination turns on complex factual disputes and competing inferences, the court may assess whether the plaintiff has presented evidence that, if credited, could support judgment, rather than prematurely resolving contested credibility and justification questions.
- A § 2 monopolization case may be supported by proof of monopoly power plus exclusionary conduct that maintains or extends that power; integration and network-management justifications do not immunize conduct if the facts could support a finding of foreclosure beyond legitimate technical or regulatory needs.
- Evidence that a vertically integrated firm used purchasing pressure, technical standards, design control, or interconnection/procurement rules to disadvantage rivals can support an inference of exclusionary maintenance of monopoly power.

## Conclusion

The court refused to dismiss the government’s § 2 case at the close of its evidence, holding that the record—viewed with reasonable inferences favorable to the government—was sufficient to permit findings of monopoly power and exclusionary conduct, requiring defendants to present their defense.


United States v. Am. Tel. & Tel. Co., 524 F. Supp. 1336 (D.D.C. 1981)