The Evolving Role of Business Torts in Antitrust Litigation

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CHAPTER I

THE EVOLVING ROLE OF BUSINESS

TORTS IN ANTITRUST LITIGATION

Many violations of the antitrust laws do not involve attempts

to injure competitors. Indeed, “hard core” antitrust violations –

such as price-fixing, bid-rigging and schemes to allocate

customers, territories or markets among competitors – benefit

competitors at the expense of consumers and the competitive

process. In other cases, especia lly those involving exclusionary

conduct by a dominant firm, actions designed to injure

competitors a lso may threaten competition. This chapter traces

the evolution of the role of business torts a nd unfair competition

in pr ivate civil antitr ust litiga tion. Chapter II reverses the lens,

examining the applica tion of antitr ust principles to business tort

claims. – Eds.

A. Introduction

Antitrust and business tort laws cover much common territory. Both

regulate the commercial conduct of marketplace participants, including

manufacturers, distributors, retailers and consumers, and both establish

norms for competitive relationships as well as relationships between

buyers and sellers.

It is thus not surprising that antitrust and business torts are frequently

involved in the same litigation. This may occur in several ways. A

plaintiff may join a business tort claim with an antitrust claim, either as

an alternative theory of recovery for the same wrong, as a claim based on

a separate but related wrong, or as a claim based on a wrong that

constitutes a part of a pattern of anticompetitive conduct.

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Additionally, a

business tort may be offered as proof of anticompetitive or exclusionary

conduct in support of a claim under sections 1 or 2 of the Sherman Act.

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Conversely, a claim of tortious interference may be based on wrongful

conduct that also creates or perpetuates an unlawful restraint of trade.

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1

. See 2A PHILLIP E. AREEDA, HERBERT HOVENKAMP, ROGER D. BLAIR &

CHRISTINE PIETTE DURRANCE, ANTITRUST LAW ¶ 392g (3d ed. 2007).

2

. 15 U.S.C. §§ 1, 2; see infra Parts D, E.

3

. See Chapter II , Part F.3; see also RESTATEMENT (SECOND) OF TORTS

§ 768(1)(c) cmt. f (1979) (an intent to unreasonably restrain competition

4 Business Torts and Unfair Competition Hand book

Although these two areas of the law are at times consistent, they

have developed separately and reflect different economic and social

policy concerns. Contrasting unfair competition and antitrust law, the

Fifth Circuit has remarked:

[T]he purposes of antitrust law and unfair competition law generally

conflict. The thrust of antitrust law is to prevent restraints on

competition. Unfair competition is still competition and the purpose of

the law o f unfair competition is to impose restraints on that

competition. The law of unfair competition tends to protect a business

in the monopoly over the loyalty of its employees and its customer

lists, while the general purpose of the antitrust laws is to promote

competition by freeing from monopoly a firm’s sources o f labor and

markets for its products.

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The Seventh Circuit has observed that “[c]ompetition is a ruthless

process. A firm that reduces cost and expands sales injures rivals—

sometimes fatally. . . . These injuries to rivals are byproducts of vigorous

competition, and the antitrust laws are not balm for rivals’ wounds.”

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Going further, Judge Easterbrook has characterized competition as “a

gale of creative destruction. . .and it is through the process of weeding

out the weakest firms that the economy as a whole receives the greatest

boost. Antitrust law and bankruptcy law go hand in hand.”

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can support a tortious interference claim); Caller-Times Publ’g Co. v.

Triad Commc’ns, 855 S.W.2d 18, 21-22 (Tex. App. 1993) (same; citing

RESTATEMENT).

4

. Northwest Power Prods. v. O mark Indus., 576 F.2d 83, 88 (5th Cir.

1978).

5

. Ball Mem’l Hosp. v. Mut. Hosp. Ins. Co., 784 F.2d 1325, 1338 (7th Cir.

1986) (Easterbrook, J.); see also NYNEX Corp. v. Discon, Inc., 525 U.S.

128, 137 (1998) (“At the same time, other laws, for example, ‘unfair

competition’ laws, provide remedies for various ‘competitive practices

thought to be offensive to proper standards of business morality.’ 3 P.

AREEDA & H. HOVENKAMP, ANTITRUST LAW ¶ 651d, p.78 (1996))”;

Brooke Group v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 225

(1993) (“Even an act of pure malice by one business competitor against

another does not, without more, state a claim under the federal antitrust

laws.”).

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. Frank H. Easterbrook, When Is It Worthwhile to Use Courts to Sea rch for

Exclusionary Conduct?, 20 03 COLUM. BUS. L. REV. 345, 345-46; see a lso

Frank H. Easterbrook, The Limits of Antitrust, 63 TEX. L. REV. 1, 5

(1984).