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At NICASTRO LAW, L.L.C., we pride ourselves in doing the best job for our Clients. We are very careful with our Client's money. It is not always about going to court and getting the "winning" verdict and getting "our" name in the newspaper, but by saving the Client money in attorney fees and "winning" by getting the best possible overall result for our Client by settlement. At the same time, we are not strangers by any means to the courtroom and have tried many cases by both bench and jury trial when there was no feasible way to settle in our Client's best interests. We have copied a sampling of some of our winning published cases. We have three cases listed here, two of which went through the criminal court and then the appeals court. One made case law on the issue of voluntary confessions, Commonwealth v. Coleman, 49 Mass. App. Ct. 150, 727 N.E.2d 103 (April 21, 2000), and was published in the Northeast Reporter. The other Commonwealth v. Montrond, 725 N.E.2d 1087 (Mass.App.Ct. Mar 29, 2000), concerned the issue of constructive possession in a gun case, which was printed in the Rescripts. We also have included a civil case, Galgani v. Bethany Health Care Center, which involved two pharmacists who were found to have been victims of age discrimination in the workplace. They initially lost their case when they presented it for review at the Massachusetts Commission Against Discrimination (MCAD). Our firm took the case and had it overturned on appeal. We then took it through to a three day-trial and won damages and attorney fees for the clients. All cases were published in the Massachusetts Lawyers Weekly.
Commonwealth v. Coleman, 49 Mass. App. Ct. 150, 727 N.E.2d 103 (April 21, 2000).
NOTICE FROM THE COURT: The slip opinions and orders posted here are subject to formal revision and are superseded by the advance sheets and bound volumes of the Official Reports. This preliminary material will be removed from the Bulletin Board once it is printed in the Official Reports advance sheets. If you find a typographical error or other formal error, please notify the Reporter of Decisions, Supreme Judicial Court, Room 1407, Boston, MA 02108; (617) 557-1030.
Suffolk. November 18, 1999. - April 21, 2000.
Present: Porada, Kaplan, & Gillerman, JJ.
Constitutional Law, Admissions and confessions. Practice, Criminal, Admissions and confessions, Voluntariness of confession. Evidence, Admissions and confessions.
Complaint received and sworn to in the South Boston Division of the District Court Department on February 21, 1997.
A pretrial motion to suppress evidence was heard by Robert C. Rufo, J., and, on transfer to the Dorchester Division, the case was tried before Sarah B. Singer, J.
Christine M. Nicastro for the defendant.
Kristine Luongo Tammaro, Assistant District Attorney, for the Commonwealth.
The defendant Titus Coleman appeals from his District Court conviction under G. L. c. 269, Sect. 10(a), for illegal possession of a handgun. Agreeing with the defendant's contention, we hold that the judge erred in failing to suppress statements secured by the police from the defendant in the course of a custodial interrogation conducted without the necessary Miranda warnings. Accordingly, we shall reverse the conviction for a new trial.
1. Sergeant Mark Gillespie, the sole witness for the Commonwealth at the suppression hearing, testified that around 6:00 P.M., January 6, 1997, he and other Massachusetts Bay Transportation Authority officers, including officers Christopher Baker and Michael Adamson, responding to a call, went to the Andrew Square "T" station and commenced efforts to find the person who had fired a weapon in the station.
The police continued to work on the case, and some two weeks later, on January 19, 1997, Gillespie and the two other officers already named went to 5 Dever Street, in the Dorchester section of Boston, the address of Janice Flemon, the defendant's aunt, with whom the defendant was then living. Entering the living room of the house, Gillespie introduced himself to Flemon and told her the purpose of the visit, to speak with the defendant. There were others in the living room and hallway. The defendant was out of the house on an errand, but soon appeared.
Gillespie asked Flemon whether a more private place was available and she directed him to a bedroom nearby. The defendant entered with the officers. The room measured eleven by twelve feet. The defendant sat on the edge of the bed with Officer Baker sitting alongside. Gillespie and Officer Adamson remained standing, blocking the door of the room, now closed. The officers were white men, about six feet tall, the defendant black, aged nineteen, educated to grade eleven.
Gillespie testified that by the time of this interview the defendant Coleman had become "the focus of th[e] investigation." In effect he communicated this fact to the defendant by stating promptly that he had a "theory" of the case about which he was confident, namely: the defendant had fired a handgun in the station intending to scare members of the Columbia Point Dogs gang who were pursuing and threatening him, but without intending, so Gillespie said, actually to strike anyone. The gun used, with four unspent rounds, had been retrieved on the night of the episode at a street near the site.
As proof of his theory, Gillespie produced a fingerprint card which, he told the defendant, showed the defendant's fingerprint taken from the clip of the gun. In truth, as Gillespie conceded in his testimony, the Commonwealth had no such fingerprint evidence; Gillespie had knowingly uttered a falsehood (in which the other officers presumably acquiesced). The defendant responded to the fingerprint ruse by admitting he had "touched" the gun. He continued denying he had fired it.
Gillespie said he did not believe the defendant's denial, and he repeated he believed the defendant had fired the gun. However, said Gillespie, the defendant could be confronted with much more serious charges than untargeted firing. He said the police were trying to find Christopher Jaundoo, a member of the Columbia Point Dogs gang, a formidable enemy, much feared. Jaundoo might decide to "cooperate" with the police and assert that the defendant had fired at him intending to strike and kill him. Even if the police did not themselves believe this assertion, they might charge the defendant, and be justified in charging him, with an assault with intent to murder in line with Jaundoo's claim. Gillespie went on to urge the defendant to tell the truth, to confess, in order to avoid grave peril. Quite clearly, the defendant was to realize that if he confessed, he need not fear the intervention of Jaundoo; the police would take care of it.
Gillespie pushed further to induce a confession: if the defendant persisted in denials, he would be arrested and handcuffed and taken in on the spot in front of his aunt and others; if he confessed, he would not be arrested but would rather be summoned into court "without handcuffs or shackles on him."
2. The issue on this appeal is whether the colloquy described by Sergeant Gillespie figures as a "custodial interrogation" of the defendant, the term being defined as "questioning initiated by law enforcement officers after a person has been taken into custody or otherwise deprived of his freedom of action in any significant way." Miranda v. Arizona, 384 U.S. 436, 444 (1966). A situation of custodial interrogation would call for "procedural safeguards effective to secure the [person's] privilege against self-incrimination": thus the safeguard of Miranda warnings about constitutional rights. Ibid.
We follow the customary four-point approach to questions of this order suggested by Commonwealth v. Bryant, 390 Mass. 729, 737 (1984).
(1) Place of interrogation. As the questioning, haranguing, and confrontation began and wore on on January 19, there was a measure of physical oppressiveness caused by the presence and deployment of the three officers in a small room, with the way to the closed door shadowed by the questioner himself. The situation was to a degree "isolating and coercive." See Commonwealth v. Gallati, 40 Mass. App. Ct. 111, 113 (1996).
(2) Focus on defendant. Gillespie testified that the police investigation had become focused on the defendant -- the police, in other words, believed the defendant to be presumptively responsible for the shooting. However, "the subjective beliefs held by law enforcement officers are irrelevant in the determination whether a person being questioned is in custody for purposes of the receipt of Miranda warnings, except to the extent that those beliefs influence the objective conditions surrounding an interrogation." Commonwealth v. Morse, 427 Mass. 117, 123-124 (1998). See United States v. Ventura, 85 F.3d 708, 711-712 (1st Cir. 1996). "[A] police officer's subjective view that the individual under questioning is a suspect, if undisclosed, does not bear upon the question whether the individual is in custody for purposes of Miranda . . .[s]ave as they [the suspicions] are communicated or otherwise manifested to the person being questioned . . .." Stansbury v. California, 511 U.S. 318, 324 (1994). Again, "[a]n officer's knowledge or beliefs may bear upon the custody issue if they are conveyed, by word or deed, to the individual being questioned," but "[t]hose beliefs are relevant only to the extent they would affect how a reasonable person in the position of the individual being questioned would gauge the breadth of his or her 'freedom of action.'" Id. at 325, quoting from Berkemer v. McCarty, 468 U.S. 420, 440 (1984).
In the present case, the officers' belief that the defendant was guilty of firing the gun was unmistakably and forcefully conveyed to him. Gillespie announced at the beginning he had a theory that the defendant had committed a crime, and he supported this theory by the false attribution of the fingerprint. At once the defendant would understand he was the prime suspect. His "freedom" was thus threatened and limited. This was followed by the defendant's admission that he had in fact handled the gun; further sustained pressure elicited the final, full confession. (3) Nature of interrogation. The questioning was aggressive and persistent. The defendant's denials were scorned and overridden. Indeed, the interview was largely one-sided; there was little contribution by the defendant. Although voices may not have been raised, and a conversational tone maintained, the substance of what was said was harsh and intended by the questioner to be so. The interrogatory part of "custodial interrogation" looks to "any words or actions on the part of the police (other than those normally attendant to arrest and custody) that the police should know are reasonably likely to elicit an incriminating response from the suspect," Rhode Island v. Innis, 446 U.S. 291, 301 (1980), and such was the interrogation here.
(4) Possibility of ending interview. The consequences of the defendant's simply getting up and leaving the room in the midst of the interrogation (if permitted), were so dire and so plainly put to the defendant, that he was effectively tied down by psychological forces. For if the defendant reached the outdoors, he would be arrested and handcuffed on the spot and would then face the prospect of confronting very serious charges in addition to the obvious one of unlawful possession. The police manipulation with the fingerprint card suggests that their search for Jaundoo and the threat of his accusation may also have been fabrications, but the defendant could not bank on this. The Jaundoo story, true or false, acted as another lock on his freedom to act. In this setting any suggestions to the defendant that he might leave would be meaningless mouthings.
We conclude that on all counts taken together the record discloses a custodial interrogation where Miranda warnings were required but unfortunately not given. The judge's findings supporting a contrary view were in a material part unfaithful to the testimony at the suppression hearing. The judge stated, "I did not credit the testimony of the defendant that he was told he would be charged with attempted murder if he did not confess to shooting the gun at Andrew Station . . . ." This overlooks and makes no mention of the testimony by Gillespie himself that he had told the defendant he could be prosecuted for assault with intent to murder on Jaundoo's putative claim he had been shot at. So also the judge found that Gillespie said he would not arrest the defendant, but omits that this treatment was conditioned on the defendant's confessing. The findings accept an unrealistically bland interpretation of the interview, suggesting that the defendant was at liberty to leave at any time: lacking was analytic attention to the forces evident in the testimony that operated on the defendant and tended to immobilize him. The conclusions of law cite the Bryant case but without a pursuit of the Bryant factors, point by point, that would, we think, have led the judge to an opposite result.
"The basic inquiry is whether, from the point of view of the defendant, the interrogation took place in a coercive environment." Commonwealth v. Conkey, 430 Mass. 139, 144 (1999). It did so in the present case.
The order denying the motion to suppress is reversed. The judgment is reversed and the verdict is set aside.
Commonwealth v. Montrond, 725 N.E.2d 1087 (Mass. App. Ct. March 29, 2000).
Where a defendant has been convicted of unlawful possession of a firearm and ammunition, the convictions must be reversed and judgments entered for the defendant, as it was improper to convict the defendant solely on the basis of "consciousness of guilt" evidence.
"The defendant [Bruce Montrond] asserts that his motion for a required finding of not guilty of unlawful possession of a firearm in violation of G.L.c. 269, Sect. 10(a), and of possession of ammunition in violation of G.L.c. 269, Sect. 10(h), was wrongly denied. We agree.
"Proof of possession requires "'control and power," ... exclusive or joint ..., or, in the case of "constructive possession," knowledge coupled with the ability and intention to exercise dominion and control.' ... The record reflects abundant circumstantial evidence of suspicious activity or consciousness of guilt on the part of the defendant. 'Actions ... that indicate consciousness of guilt on the part of the defendant ... together with other evidence, may be sufficient to prove guilt.' ... Here, however, there was no other evidence to prove guilt. ... The defendant's behavior alone lacked the evidentiary basis required to establish ability and intention to exercise dominion and control.
"Judgments reversed. Verdicts set aside. Judgments for the defendant."
Commonwealth v. Montrond (Lawyers Weekly No. 81-238-00) (2 pages) (Appeals Court - Unpublished) (No. 98-P-2022) (March 29, 2000).
Where two complainant pharmacists have alleged that they were wrongfully fired by a respondent health care provider in violation of G.L.c. 151B because of their age, I find their claim to have merit and that the stated non-discriminatory reasons for the terminations put forward by the respondent are merely pretextual.
"M.G.L. chapter 151B, section 4(1B) prohibits discrimination on the basis of age in the workplace. Pursuant to the analysis set forth in Blare v. Husky Injection Molding Systems Boston, Inc., 419 Mass. 437 (1995), complainant has the burden of establishing a prima facie case of age discrimination in employment. Complainants must show evidence that: (1) they are members of a class protected by G.L.c. 151B; (2) they performed their job at an acceptable level; (3) they were terminated; and (4) their employer sought to fill their position by hiring another individual with qualifications similar to the complainants.
"Complainants [Elsie and the now-deceased John Galgani] were members of a protected class based on their ages as of September 27, 1994. Both were performing their jobs at an acceptable level.
"Complainants allege that [supervisor Ken] Amato terminated them from their permanent part-time pharmacist positions at their September 27, 1994, meeting, and that, although respondent [Bethany Health Care] offered them per diem work, its offer was only for sporadic and occasional work, and not a steady one day a week position. Respondent alleges it did not terminate complainants, but rather eliminated their part-time position and offered them the option of a per diem position. I conclude, based on the evidence, that respondent terminated complainants from their permanent, part-time positions and offered them the opportunity to come in on an 'as needed' basis merely as a face saving afterthought.
"I also conclude that subsequent to complainants' termination, respondent sought to fill their positions by hiring another individual with similar qualifications as a replacement for complainants. Complainants have thus established prima facie cases of age discrimination.
"In order to rebut the presumption created by the prima facie case, respondent articulates two nondiscriminatory reasons for its treatment of complainants: their lack of computer skills and unwillingness to acquire them as was necessitated by OBRA legislation, and the economics of operating the pharmacy. Respondent presented evidence that it terminated complainants because they lacked the computer skills required for OBRA compliance and were unwilling to be trained on the computer. There was evidence presented that although complainants' part-time positions were eliminated, Amato offered them a per diem position at the September 27, 1994 meeting. Respondent asserts this was a cost effective measure taken for a legitimate business reason: the financial health of the pharmacy.
"Complainants have demonstrated that respondent's stated reasons for terminating complainants' permanent part time positions were pretexts. With respect to respondent's claim that complainants lacked computer skills and refused to acquire them, a preponderance of the credible evidence showed that this could not have been respondent's real reason for terminating complainants. Complainants' performance evaluations indicated their performance was satisfactory, as did Amato's testimony. The record contains neither documentation nor warnings as to problems with their performance, despite the requirement of the same in respondent's Employee Handbook. What is more, the evidence established complainants were willing to learn to use the computer. Complainant Elsie Galgani's testimony regarding herself, Theresa Lewis's testimony regarding Elsie and John Galgani, and Amato's own notes regarding John Galgani indicate complainants' desire and efforts to acquire relevant computer skills. Respondent made minimal efforts to train them, however, and did not give them meaningful opportunities to acquire necessary skills. Thus respondent's assertion that it terminated complainants because they lacked computer skills and the desire to acquire such skills is inconsistent with respondent's behavior at the relevant time.
"Likewise, respondent's assertion that it terminated complainants to maintain the pharmacy's cost effectiveness is a pretext. The evidence showed that respondent realized no cost saving by terminating complainants' employment, rather than reducing their hours, because it replaced complainants and the costs of operating the pharmacy actually increased.
"Finally, Amato informed complainants at their September 27, 1994 meeting that he wanted them to retire. Although it occurred at a very significant moment, that single remark might not be independently sufficient to support a conclusion that respondent acted out of age bias. But Amato's comment, coupled with the pretextual nature of respondent's asserted reasons for complainants' termination, supports the conclusion that respondent violated the statute.
"I conclude that complainants have proven by a preponderance of the evidence that respondent's stated reasons for terminating complainant are a pretext and that respondent terminated complainants' employment in violation of M.G.L.c. 151B, section 4(1B)."
"On the basis of Elsie Galgani's testimony and that of Linda Galgani and Santiago Hernandez, I am persuaded complainant Elsie Galgani suffered emotional distress as a result of being terminated and is entitled to an award of $25,000.00. Additionally, based on the testimony of Linda Galgani and Hernandez, as well as the testimony of Carmen Cortese, I find complainant John Galgani suffered significant emotional distress and that his estate is entitled to an award of $40,000.00 to compensate him for the emotional distress he suffered.
"I also conclude that complainants are entitled to compensation for lost wages. The estate of complainant John Galgani is entitled to an award of $4,335.33, the amount he would have earned working eight hours a week as a per diem pharmacist from September 27, 1994 until November 4, 1995. Complainant Elsie Galgani is entitled to an award of $22,343.47, the amount she would have earned working eight hours a week as a per diem pharmacist from September 27, 1994 until December 1997, when the pharmacy closed.
"Additionally, complainant Elsie Galgani is entitled to the award of the gold pin, awarded by respondent as recognition for twenty-five years of service, that she was months away from receiving at the time of her termination."
Galgani, et al. v. Bethany Health Care (Lawyers Weekly No.
) (15 pages) (Schwarz, Hearing Commissioner) (MCAD) Christine M. Nicastro for the complainants; Francis J. O'Connor for the respondent (Docket Nos. 94-BEM-1990 and 94-BEM-1991).
The following comments are from an article published in the May, 2000, issue of the Massachusetts Lawyers Weekly on the above-referenced case of Coleman.
Where a judge failed to suppress statements which the police secured from a defendant during a custodial investigation conducted without necessary Miranda warnings, this constituted reversible error.
Having said this, we vacate the defendant's conviction for illegal possession of a handgun and order the scheduling of a new trial.
"We follow the customary four-point approach to questions of this order suggested by Commonwealth v. Bryant, 390 Mass. 729, 737 (1984)."
"As the questioning, haranguing, and confrontation began and wore on on January 19, [1997,] there was a measure of physical oppressiveness caused by the presence and deployment of the three officers in a small room, with the way to the closed door shadowed by the questioner himself. The situation was to a degree 'isolating and coercive.' ..."
"In the present case, the officers' belief that the defendant was guilty of firing the gun was unmistakably and forcefully conveyed to him. Gillespie announced at the beginning he had a theory that the defendant had committed a crime, and he supported this theory by the false attribution of [a] fingerprint. At once the defendant would understand he was the prime suspect. His 'freedom' was thus threatened and limited. This was followed by the defendant's admission that he had in fact handled the gun; further sustained pressure elicited the final, full confession."
"The questioning was aggressive and persistent. The defendant's denials were scorned and overridden. Indeed, the interview was largely one-sided; there was little contribution by the defendant. Although voices may not have been raised, and a conversational tone maintained, the substance of what was said was harsh and intended by the questioner to be so. The interrogatory part of 'custodial interrogation' looks to 'any words or actions on the part of the police (other than those normally attendant to arrest and custody) that the police should know are reasonably likely to elicit an incriminating response from the suspect,' ... and such was the interrogation here."
"The consequences of the defendant's simply getting up and leaving the room in the midst of the interrogation (if permitted), were so dire and so plainly put to the defendant, that he was effectively tied down by psychological forces. For if the defendant reached the outdoors, he would be arrested and handcuffed on the spot and would then face the prospect of confronting very serious charges in addition to the obvious one of unlawful possession. The police manipulation with the fingerprint card suggests that their search for [Christopher] Jaundoo [a gang member and enemy of the defendant] and the threat of his accusation may also have been fabrications, but the defendant could not bank on this. The Jaundoo story [that the defendant had fired at him, trying to kill him,] true or false, acted as another lock on his freedom to act. In this setting any suggestions to the defendant that he might leave would be meaningless mouthings."
"We conclude that on all counts taken together the record discloses a custodial interrogation where Miranda warnings were required but unfortunately not given. The judge's findings supporting a contrary view were in a material part unfaithful to the testimony at the suppression hearing. The judge stated, 'I did not credit the testimony of the defendant that he was told he would be charged with attempted murder if he did not confess to shooting the gun at Andrew Station. ...' This overlooks and makes no mention of the testimony by Gillespie himself that he had told the defendant he could be prosecuted for assault with intent to murder on Jaundoo's putative claim he had been shot at. So also the judge found that Gillespie said he would not arrest the defendant, but omits that this treatment was conditioned on the defendant's confessing. The findings accept an unrealistically bland interpretation of the interview, suggesting that the defendant was at liberty to leave at any time: lacking was analytic attention to the forces evident in the testimony that operated on the defendant and tended to immobilize him. The conclusions of law cite the Bryant case but without a pursuit of the Bryant factors, point by point, that would, we think, have led the judge to an opposite result.
"'The basic inquiry is whether, from the point of view of the defendant, the interrogation took place in a coercive environment.' ... It did so in the present case.
"The order denying the motion to suppress is reversed. The judgment is reversed and the verdict is set aside."
Commonwealth v. Coleman (Lawyers Weekly No. 11-072-00) (10 pages) (Kaplan, J.) (Appeals Court) Pretrial suppression motion heard by Rufo, J.; case tried before Singer, J., in the District Court. Christine M. Nicastro for the defendant; Kristine Luongo Tammaro for the commonwealth (Docket No. 98-P-1330).
Where a plaintiff taxi driver has charged the defendant dispatch company with misclassifying him as an independent contractor, the plaintiff cannot satisfy the test for employee status, so the defendant is entitled to summary judgment.
“[T]he three part test that determines whether an individual is an employee or an independent contractor must be undertaken only if the plaintiff is providing a service for the defendant. In this case, the summary judgment record fails to provide any evidence that Nippon or Kubinec were providing services for Top Cab. Indeed, the facts suggest just the opposite relationship, i.e., Nippon pays a modest weekly fee to be a member of a dispatch ‘service,’ without which it could not lawfully operate a taxi even though it owns a medallion. Under Rule 403, all taxis operating in Boston must belong to an authorized cab association, such as Top Cab, which is, in turn, required to provide dispatch services, including GPS, to members to qualify as a dispatch service. It is true that Top Cab provided dispatches, i.e., potential passengers to its members; however, Top Cab’s members were not required to accept a dispatch. In fact, Top Cab’s dispatches constituted only approximately 9.95% of all fares driven by Top Cab members in 2010.
“While it may be the case that if some number of Top Cab’s members repeatedly refused dispatches and no cabs were willing to pick up potential passengers calling in to Top Cab, with the result that over time, the public stopped calling, then Top Cab might cease to be an attractive dispatch service to members. Top Cab’s members might then choose to belong to one of the other several dispatch services available to Boston medallion owners. Top Cab therefore might be said to receive an incidental benefit when some member accepted a dispatch. However, more importantly for this case, Top Cab received no income from that dispatch. Indeed, it received only the same weekly payment from its members regardless of whether dispatches were accepted or passengers simply hailed member cabs from the street. Moreover, in the real world taxi drivers compete for fares, and it is Top Cab that provides the service of offering dispatches to its members, in addition to the service of providing and maintaining the communications and GPS equipment that every medallion owner must have in its cab.
“[I]n this case, Kubinec had already established himself as an independent entrepreneur before entering into any agreement with the defendants. He owned his own taxicab and medallion before contracting with City Cab or Top Cab. Kubinec decided when to drive that cab and where he would drive it. Even when Top Cab sent him dispatches regarding passengers in need of his services, he was not required to accept them. Kubinec’s passengers paid him, and he did not remit any part of the fare to Top Cab. When he became dissatisfied with Top Cab, he joined a different dispatch service and continued his taxicab business. Top Cab has met its burden under the third prong of the independent contractor test.
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Justia › US Law › US Case Law › US Supreme Court › Volume 555 › Pacific Bell Telephone Co. v. linkLine Communications, Inc.
PACIFIC BELL TELEPHONE CO. V. LINKLINECOMMUNICATIONS, INC.
Petitioners (hereinafter AT&T) own infrastructure and facilities needed to provide “DSL” service, a method of connecting to the Internet at high speeds over telephone lines. As a condition for a recent merger, the Federal Communications Commission requires AT&T to provide wholesale DSL transport service to independent firms at a price no greater than the retail price of AT&T’s DSL service. The plaintiffs in this case, respondents here, are independent Internet service providers that compete with AT&T in the retail DSL market in California. The plaintiffs do not own all the facilities needed to supply DSL service, and must lease wholesale DSL transport service from AT&T. They filed suit under §2 of the Sherman Act, asserting that AT&T unlawfully “squeezed” their profit margins by setting a high price for the wholesale DSL transport service it sells and a low price for its own retail DSL service. This maneuver allegedly placed the plaintiffs at a competitive disadvantage, allowing AT&T to maintain monopoly power in the DSL market. AT&T moved for judgment on the pleadings, arguing that the plaintiffs’ claims were foreclosed by Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U. S. 398, 410, in which this Court held that a firm with no antitrust duty to deal with its rivals has no obligation to provide those rivals with a “sufficient” level of service. The District Court found that AT&T had no antitrust duty to deal with the plaintiffs, but nonetheless denied the motion, holding that Trinko did not address price-squeeze claims. The court certified its order for interlocutory appeal on the question whether Trinko bars price-squeeze claims when the parties are required to deal by federal communications law, but not antitrust law. The Ninth Circuit affirmed, holding that Trinko did not address the viability of price-squeeze claims, and thus the plaintiffs’ complaint stated a potentially valid §2 claim.
1. The case is not moot. The plaintiffs now agree that their claims must meet the Brooke Group test for predatory pricing, apparently apart from their price-squeeze theory. That test established two requirements for predatory pricing: below-cost retail pricing and a “ ‘dangerous probability’ ” that the defendant will recoup any lost profits, see Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U. S. 209, 222–224. Despite the plaintiffs’ new position, the parties continue to seek different relief: AT&T seeks reversal of the decision below and dismissal of the complaint, while the plaintiffs seek leave to amend their complaint to allege a Brooke Group claim. It is also not clear that the plaintiffs have unequivocally abandoned their price-squeeze claims. Prudential concerns favor answering the question presented; absent a decision on the merits, the Circuit conflict that this Court granted certiorari to resolve would persist. Pp. 5–7.
2. A price-squeeze claim may not be brought under §2 when the defendant has no antitrust duty to deal with the plaintiff at wholesale. Pp. 7–17.
(a) Businesses are generally free to choose the parties with whom they will deal, as well as the prices, terms, and conditions of that dealing. See United States v. Colgate & Co., 250 U. S. 300, 307. But in rare circumstances, a dominant firm may incur antitrust liability for purely unilateral conduct, such as charging “predatory” prices. Brooke Group, supra, at 222–224. There are also limited circumstances in which a firm’s unilateral refusal to deal with its rivals can give rise to antitrust liability. See Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U. S. 585, 608–611. Here, plaintiffs do not allege predatory pricing, and the District Court concluded that there was no antitrust duty to deal. Plaintiffs challenge a different type of unilateral conduct in which a firm “squeezes” its competitors’ profit margins. This requires the defendant to operate in both the wholesale (“upstream”) and retail (“downstream”) markets. By raising the wholesale price of inputs while cutting its own retail prices, the defendant can raise competitors’ costs while putting downward pressure on their revenues. Price-squeeze plaintiffs assert that defendants must leave them a “fair” or “adequate” margin between wholesale and retail prices. Pp. 7–9.
(b) Where there is no duty to deal at the wholesale level and no predatory pricing at the retail level, a firm is not required to price both of these services in a manner that preserves its rivals’ profit margins. Pp. 9–12.
(1) Any challenge to AT&T’s wholesale prices is foreclosed by a straightforward application of Trinko. The claim in Trinko addressed the quality of Verizon’s support services, while the claims in this case challenge AT&T’s pricing structure. But for antitrust purposes, there is no meaningful distinction between price and nonprice components of a transaction. The nub of the complaint in both cases is identical—the plaintiffs alleged that the defendants (upstream monopolists) abused their power in the wholesale market to prevent rival firms from competing effectively in the retail market. But a firm with no antitrust duty to deal in the wholesale market has no obligation to deal under terms and conditions favorable to its competitors. See Trinko, supra, at 410. Had AT&T simply stopped providing DSL transport service to the plaintiffs, it would not have run afoul of the Sherman Act. Thus, it was not required to offer this service at the wholesale prices the plaintiffs would have preferred. Pp. 9–10.
(2) The other component of a price-squeeze claim is the assertion that the defendant’s retail prices are “too low.” Here too plaintiffs’ claims find no support in existing antitrust doctrine. “[C]utting prices in order to increase business often is the very essence of competition.” Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U. S. 574, 594. To avoid chilling aggressive price competition, the Court has carefully limited the circumstances under which plaintiffs can state a Sherman Act claim by alleging that the defendant’s prices are too low. See Brooke Group, supra, at 222–224. The complaint at issue here has no allegation that AT&T’s conduct met either Brooke Group requirement. Recognizing a price-squeeze claim where the defendant’s retail price remains above cost would invite the precise harm the Court sought to avoid in Brooke Group: Firms might raise retail prices or refrain from aggressive price competition to avoid potential antitrust liability. See 509 U. S., at 223. Pp. 11–12.
(c) Institutional concerns also counsel against recognizing such claims. This Court has repeatedly emphasized the importance of clear rules in antitrust law. Recognizing price-squeeze claims would require courts simultaneously to police both the wholesale and retail prices to ensure that rival firms are not being squeezed. Courts would be aiming at a moving target, since it is the interaction between these two prices that may result in a squeeze. Moreover, firms seeking to avoid price-squeeze liability will have no safe harbor for their pricing practices. The most commonly articulated standard for price squeezes is that the defendant must leave its rivals a “fair” or “adequate” margin between wholesale and retail prices; this test is nearly impossible for courts to apply without conducting complex proceedings like rate-setting agencies. Some amici argue that a price squeeze should be presumed if the defendant’s wholesale price exceeds its retail price. But if both the wholesale price and the retail price are independently lawful, there is no basis for imposing antitrust liability simply because a vertically integrated firm’s wholesale price is greater than or equal to its retail price. Pp. 12–15.
(d) The District Court on remand should consider whether an amended complaint filed by the plaintiffs states a claim upon which relief may be granted under the pleading standard articulated in Bell Atlantic Corp. v. Twombly, 550 U. S. 544, 561–563; whether plaintiffs should be given leave to amend their complaint to bring a Brooke Group claim; and such other matters properly before it. Pp. 15–17.
The plaintiffs in this case, respondents here, allege that a competitor subjected them to a “price squeeze” in violation of §2 of the Sherman Act. They assert that such a claim can arise when a vertically integrated firm sells inputs at wholesale and also sells finished goods or services at retail. If that firm has power in the wholesale market, it can simultaneously raise the wholesale price of inputs and cut the retail price of the finished good. This will have the effect of “squeezing” the profit margins of any competitors in the retail market. Those firms will have to pay more for the inputs they need; at the same time, they will have to cut their retail prices to match the other firm’s prices. The question before us is whether such a price-squeeze claim may be brought under §2 of the Sherman Act when the defendant is under no antitrust obligation to sell the inputs to the plaintiff in the first place. We hold that no such claim may be brought.
This case involves the market for digital subscriber line (DSL) service, which is a method of connecting to the Internet at high speeds over telephone lines. AT&T[Footnote 1] owns much of the infrastructure and facilities needed to provide DSL service in California. In particular, AT&T controls most of what is known as the “last mile”—the lines that connect homes and businesses to the telephone network. Competing DSL providers must generally obtain access to AT&T’s facilities in order to serve their customers.
Until recently, the Federal Communications Commission (FCC) required incumbent phone companies such as AT&T to sell transmission service to independent DSL providers, under the theory that this would spur competition. See In re Appropriate Framework for Broadband Access to Internet over Wireline Facilities, 20 FCC Rcd. 14853, 14868 (2005). In 2005, the Commission largely abandoned this forced-sharing requirement in light of the emergence of a competitive market beyond DSL for high-speed Internet service; DSL now faces robust competition from cable companies and wireless and satellite services. Id., at 14879–14887. As a condition for a recent merger, however, AT&T remains bound by the mandatory interconnection requirements, and is obligated to provide wholesale “DSL transport” service to independent firms at a price no greater than the retail price of AT&T’s DSL service. In re AT&T Inc. and BellSouth Corp., 22 FCC Rcd. 5662, 5814 (2007).
In July 2003, the plaintiffs brought suit in District Court, alleging that AT&T violated §2 of the Sherman Act, 15 U. S. C. §2, by monopolizing the DSL market in California. The complaint alleges that AT&T refused to deal with the plaintiffs, denied the plaintiffs access to essential facilities, and engaged in a “price squeeze.” App. 18–19. Specifically, plaintiffs contend that AT&T squeezed their profit margins by setting a high wholesale price for DSL transport and a low retail price for DSL Internet service. This maneuver allegedly “exclude[d] and unreasonably impede[d] competition,” thus allowing AT&T to “preserve and maintain its monopoly control of DSL access to the Internet.” Ibid.
In Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U. S. 398, 410 (2004), we held that a firm with no antitrust duty to deal with its rivals at all is under no obligation to provide those rivals with a “sufficient” level of service. Shortly after we issued that decision, AT&T moved for judgment on the pleadings, arguing that the plaintiffs’ claims in this case were foreclosed by Trinko. The District Court held that AT&T had no antitrust duty to deal with the plaintiffs, App. to Pet. for Cert. 77a–85a, but it denied the motion to dismiss with respect to the price-squeeze claims, id., at 86a–90a. The court acknowledged that AT&T’s argument “has a certain logic to it,” but held that Trinko “simply does not involve price-squeeze claims.” Id., at 86a. The District Court also noted that price-squeeze claims have been recognized by several Circuits and “are cognizable under existing antitrust standards.” Id., at 89a, and n. 27.
At the District Court’s request, plaintiffs then filed an amended complaint providing greater detail about their price-squeeze claims. AT&T again moved to dismiss, arguing that price-squeeze claims could only proceed if they met the two established requirements for predatory pricing: below-cost retail pricing and a “ ‘dangerous probability’ ” that the defendant will recoup any lost profits. See Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U. S. 209, 222–224 (1993). The District Court did not reach the issue whether all price-squeeze claims must meet the Brooke Group requirements, because it concluded that the amended complaint, “generously construed,” satisfied those criteria. App. to Pet. for Cert. 46a–49a, 56a. The court also certified its earlier order for interlocutory appeal on the question whether “Trinko bars price squeeze claims where the parties are compelled to deal under the federal communications laws.” Id., at 56a–57a.
On interlocutory appeal, the Court of Appeals for the Ninth Circuit affirmed the District Court’s denial of AT&T’s motion for judgment on the pleadings on the price-squeeze claims. 503 F. 3d 876 (2007). The court emphasized that “Trinko did not involve a price squeezing theory.” Id., at 883. Because “a price squeeze theory formed part of the fabric of traditional antitrust law prior to Trinko,” the Court of Appeals concluded that “those claims should remain viable notwithstanding either the telecommunications statutes or Trinko.” Ibid. Based on the record before it, the court held that plaintiffs’ original complaint stated a potentially valid claim under §2 of the Sherman Act.
Judge Gould dissented, noting that “the notion of a ‘price squeeze’ is itself in a squeeze between two recent Supreme Court precedents.” Id., at 886. A price-squeeze claim involves allegations of both a high wholesale price and a low retail price, so Judge Gould analyzed each component separately. He concluded that “Trinko insulates from antitrust review the setting of the upstream price.” Id., at 886–887. With respect to the downstream price, he argued that “the retail side of a price squeeze cannot be considered to create an antitrust violation if the retail pricing does not satisfy the requirements of Brooke Group, which set unmistakable limits on what can be considered to be predatory within the meaning of the antitrust laws.” Id., at 887 (citing Brooke Group, supra, at 222–224). Judge Gould concluded that the plaintiffs’ complaint did not satisfy these requirements because it contained no allegations that the retail price was set below cost and that those losses could later be recouped. 503 F. 3d, at 887. Judge Gould would have allowed the plaintiffs to amend their complaint if they could, in good faith, raise predatory pricing claims meeting the Brooke Group requirements. Ibid.
We granted certiorari, 554 U. S. ___ (2008), to resolve a conflict over whether a plaintiff can bring price-squeeze claims under §2 of the Sherman Act when the defendant has no antitrust duty to deal with the plaintiff. See Covad Communications Co. v. Bell Atlantic Co., 398 F. 3d 666, 673–674 (CADC 2005) (holding that Trinko bars such claims). We reverse.
This case has assumed an unusual posture. The plaintiffs now assert that they agree with Judge Gould’s dissenting position that price-squeeze claims must meet the Brooke Group requirements for predatory pricing. They ask us to vacate the decision below in their favor and remand with instructions that they be given leave to amend their complaint to allege a Brooke Group claim. In other words, plaintiffs are no longer pleased with their initial theory of the case, and ask for a mulligan to try again under a different theory. Some amici argue that the case is moot in light of this confession of error. They contend that “[w]ith both petitioners and respondents now aligned on [the same] side of the question presented, no party with a concrete stake in this case’s outcome is advocating for the contrary position.” Brief for COMPTEL 6.
Second, it is not clear that the plaintiffs have unequivocally abandoned their price-squeeze claims. In their brief and at oral argument, the plaintiffs continue to refer to their “pricing squeeze claim.” See Brief for Respondents 13. They appear to acknowledge that those claims must meet the Brooke Group requirements, but it is not clear whether they believe the necessary showing can be made in at least partial reliance on the sort of price squeeze theory accepted by the Court of Appeals. At one point, for example, the plaintiffs suggest that “the DSL transport price” may be pertinent to their claims going forward under the theory of Judge Gould’s dissent; that opinion, however, concluded that Trinko “in essence takes the issu[e] of wholesale pricing out of the case.” 503 F. 3d, at 886. Given this ambiguity, the case before us remains a live dispute appropriate for decision. Cf. Friends of Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U. S. 167, 189 (2000) (a party’s voluntary conduct renders a case moot only if it is “ ‘absolutely clear’ ” the party will take that course of action).
Amici also argue that we should dismiss the writ of certiorari because of the “lack of adversarial presentation” by an interested party. Brief for COMPTEL 7. To the contrary, prudential concerns favor our answering the question presented. Plaintiffs defended the Court of Appeals’ decision at the certiorari stage, and the parties have invested a substantial amount of time, effort, and resources in briefing and arguing the merits of this case. In the absence of a decision from this Court on the merits, the Court of Appeals’ decision would presumably remain binding precedent in the Ninth Circuit, and the Circuit conflict we granted certiorari to resolve would persist. Two amici have submitted briefs defending the Court of Appeals’ decision on the merits, and we granted the motion of one of those amici to participate in oral argument. 555 U. S. ___ (2008). We think it appropriate to proceed to address the question presented.
Section 2 of the Sherman Act makes it unlawful to “monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations.” 15 U. S. C. §2. Simply possessing monopoly power and charging monopoly prices does not violate §2; rather, the statute targets “the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.” United States v. Grinnell Corp., 384 U. S. 563, 570–571 (1966).
As a general rule, businesses are free to choose the parties with whom they will deal, as well as the prices, terms, and conditions of that dealing. See United States v. Colgate & Co., 250 U. S. 300, 307 (1919). But there are rare instances in which a dominant firm may incur antitrust liability for purely unilateral conduct. For example, we have ruled that firms may not charge “predatory” prices—below-cost prices that drive rivals out of the market and allow the monopolist to raise its prices later and recoup its losses. Brooke Group, 509 U. S., at 222–224. Here, however, the complaint at issue does not contain allegations meeting those requirements. App. 10–24.
The challenge here focuses on retail prices—where there is no predatory pricing—and the terms of dealing—where there is no duty to deal. Plaintiffs’ price-squeeze claims challenge a different type of unilateral conduct in which a firm “squeezes” the profit margins of its competitors. This requires the defendant to be operating in two markets, a wholesale (“upstream”) market and a retail (“downstream”) market. A firm with market power in the upstream market can squeeze its downstream competitors by raising the wholesale price of inputs while cutting its own retail prices. This will raise competitors’ costs (because they will have to pay more for their inputs) and lower their revenues (because they will have to match the dominant firm’s low retail price). Price-squeeze plaintiffs assert that defendants must leave them a “fair” or “adequate” margin between the wholesale price and the retail price. In this case, we consider whether a plaintiff can state a price-squeeze claim when the defendant has no obligation under the antitrust laws to deal with the plaintiff at wholesale.
1. A straightforward application of our recent decision in Trinko forecloses any challenge to AT&T’s wholesale prices. In Trinko, Verizon was required by statute to lease its network elements to competing firms at wholesale rates. 540 U. S., at 402–403. The plaintiff—a customer of one of Verizon’s rivals—asserted that Verizon denied its competitors access to interconnection support services, making it difficult for those competitors to fill their customers’ orders. Id., at 404–405. The complaint alleged that this conduct in the upstream market violated §2 of the Sherman Act by impeding the ability of independent carriers to compete in the downstream market for local telephone service. Ibid.
We held that the plaintiff’s claims were not actionable under §2. Given that Verizon had no antitrust duty to deal with its rivals at all, we concluded that “Verizon’s alleged insufficient assistance in the provision of service to rivals” did not violate the Sherman Act. Id., at 410. Trinko thus makes clear that if a firm has no antitrust duty to deal with its competitors at wholesale, it certainly has no duty to deal under terms and conditions that the rivals find commercially advantageous.
In this case, as in Trinko, the defendant has no antitrust duty to deal with its rivals at wholesale; any such duty arises only from FCC regulations, not from the Sherman Act. See supra, at 8. There is no meaningful distinction between the “insufficient assistance” claims we rejected in Trinko and the plaintiffs’ price-squeeze claims in the instant case. The Trinko plaintiffs challenged the quality of Verizon’s interconnection service, while this case involves a challenge to AT&T’s pricing structure. But for antitrust purposes, there is no reason to distinguish between price and nonprice components of a transaction. See, e.g., American Telephone & Telegraph Co. v. Central Office Telephone, Inc., 524 U. S. 214, 223 (1998) (“Any claim for excessive rates can be couched as a claim for inadequate services and vice versa”). The nub of the complaint in both Trinko and this case is identical—the plaintiffs alleged that the defendants (upstream monopolists) abused their power in the wholesale market to prevent rival firms from competing effectively in the retail market. Trinko holds that such claims are not cognizable under the Sherman Act in the absence of an antitrust duty to deal.
The District Court and the Court of Appeals did not regard Trinko as controlling because that case did not directly address price-squeeze claims. 503 F. 3d, at 883; App. to Pet. for Cert. 86a; see also Brief for COMPTEL 27–30. This is technically true, but the reasoning of Trinko applies with equal force to price-squeeze claims. AT&T could have squeezed its competitors’ profits just as effectively by providing poor-quality interconnection service to the plaintiffs, as Verizon allegedly did in Trinko. But a firm with no duty to deal in the wholesale market has no obligation to deal under terms and conditions favorable to its competitors. If AT&T had simply stopped providing DSL transport service to the plaintiffs, it would not have run afoul of the Sherman Act. Under these circumstances, AT&T was not required to offer this service at the wholesale prices the plaintiffs would have preferred.
2. The other component of a price-squeeze claim is the assertion that the defendant’s retail prices are “too low.” Here too plaintiffs’ claims find no support in our existing antitrust doctrine.
“[C]utting prices in order to increase business often is the very essence of competition.” Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U. S. 574, 594 (1986). In cases seeking to impose antitrust liability for prices that are too low, mistaken inferences are “especially costly, because they chill the very conduct the antitrust laws are designed to protect.” Ibid.; see also Brooke Group, 509 U. S., at 226; Cargill, Inc. v. Monfort of Colo., Inc., 479 U. S. 104, 121–122, n. 17 (1986). To avoid chilling aggressive price competition, we have carefully limited the circumstances under which plaintiffs can state a Sherman Act claim by alleging that prices are too low. Specifically, to prevail on a predatory pricing claim, a plaintiff must demonstrate that: (1) “the prices complained of are below an appropriate measure of its rival’s costs”; and (2) there is a “dangerous probability” that the defendant will be able to recoup its “investment” in below-cost prices. Brooke Group, supra, at 222–224. “Low prices benefit consumers regardless of how those prices are set, and so long as they are above predatory levels, they do not threaten competition.” Atlantic Richfield Co. v. USA Petroleum Co., 495 U. S. 328, 340 (1990).
In the complaint at issue in this interlocutory appeal, App. 10–24, there is no allegation that AT&T’s conduct met either of the Brooke Group requirements. Recognizing a price-squeeze claim where the defendant’s retail price remains above cost would invite the precise harm we sought to avoid in Brooke Group: Firms might raise their retail prices or refrain from aggressive price competition to avoid potential antitrust liability. See 509 U. S., at 223 (“As a general rule, the exclusionary effect of prices above a relevant measure of cost either reflects the lower cost structure of the alleged predator, and so represents competition on the merits, or is beyond the practical ability of a judicial tribunal to control without courting intolerable risks of chilling legitimate price cutting”).
1. Institutional concerns also counsel against recognition of such claims. We have repeatedly emphasized the importance of clear rules in antitrust law. Courts are ill suited “to act as central planners, identifying the proper price, quantity, and other terms of dealing.” Trinko, 540 U. S., at 408. “ ‘No court should impose a duty to deal that it cannot explain or adequately and reasonably supervise. The problem should be deemed irremedia[ble] by antitrust law when compulsory access requires the court to assume the day-to-day controls characteristic of a regulatory agency.’ ” Id., at 415 (quoting Areeda, Essential Facilities: An Epithet in Need of Limiting Principles, 58 Antitrust L. J. 841, 853 (1989)); see also Town of Concord v. Boston Edison Co., 915 F. 2d 17, 25 (CA1 1990) (Breyer, C. J.) (“[A]ntitrust courts normally avoid direct price administration, relying on rules and remedies . . . that are easier to administer”).
It is difficult enough for courts to identify and remedy an alleged anticompetitive practice at one level, such as predatory pricing in retail markets or a violation of the duty-to-deal doctrine at the wholesale level. See Brooke Group, supra, at 225 (predation claims “requir[e] an understanding of the extent and duration of the alleged predation, the relative financial strength of the predator and its intended victim, and their respective incentives and will”); Trinko, supra, at 408. Recognizing price-squeeze claims would require courts simultaneously to police both the wholesale and retail prices to ensure that rival firms are not being squeezed. And courts would be aiming at a moving target, since it is the interaction between these two prices that may result in a squeeze.
Perhaps most troubling, firms that seek to avoid price-squeeze liability will have no safe harbor for their pricing practices. See Town of Concord, supra, at 22 (antitrust rules “must be clear enough for lawyers to explain them to clients”). At least in the predatory pricing context, firms know they will not incur liability as long as their retail prices are above cost. Brooke Group, supra, at 223. No such guidance is available for price-squeeze claims. See, e.g., 3B P. Areeda & H. Hovenkamp, Antitrust Law ¶767c, p. 138 (3d ed. 2008) (“[A]ntitrust faces a severe problem not only in recognizing any §2 [price-squeeze] offense, but also in formulating a suitable remedy”).
“[H]ow is a judge or jury to determine a ‘fair price?’ Is it the price charged by other suppliers of the primary product? None exist. Is it the price that competition ‘would have set’ were the primary level not monopolized? How can the court determine this price without examining costs and demands, indeed without acting like a rate-setting regulatory agency, the rate-setting proceedings of which often last for several years? Further, how is the court to decide the proper size of the price ‘gap?’ Must it be large enough for all independent competing firms to make a ‘living profit,’ no matter how inefficient they may be? . . . And how should the court respond when costs or demands change over time, as they inevitably will?” Town of Concord, supra, at 25.
Some amici respond to these concerns by proposing a “transfer price test” for identifying an unlawful price squeeze: A price squeeze should be presumed if the upstream monopolist could not have made a profit by selling at its retail rates if it purchased inputs at its own wholesale rates. Brief for American Antitrust Institute (AAI) 30; Brief for COMPTEL 16–19; see Ray v. Indiana & Mich. Elec. Co., 606 F. Supp. 757, 776–777 (ND Ill. 1984). Whether or not that test is administrable, it lacks any grounding in our antitrust jurisprudence. An upstream monopolist with no duty to deal is free to charge whatever wholesale price it would like; antitrust law does not forbid lawfully obtained monopolies from charging monopoly prices. Trinko, supra, at 407 (“The mere possession of monopoly power, and the concomitant charging of monopoly prices, is not only not unlawful; it is an important element of the free-market system”). Similarly, the Sherman Act does not forbid—indeed, it encourages—aggressive price competition at the retail level, as long as the prices being charged are not predatory. Brooke Group, 509 U. S., at 223–224. If both the wholesale price and the retail price are independently lawful, there is no basis for imposing antitrust liability simply because a vertically integrated firm’s wholesale price happens to be greater than or equal to its retail price.
2. Amici assert that there are circumstances in which price squeezes may harm competition. For example, they assert that price squeezes may raise entry barriers that fortify the upstream monopolist’s position; they also contend that price squeezes may impair nonprice competition and innovation in the downstream market by driving independent firms out of business. See Brief for AAI 11–15; Town of Concord, supra, at 23–24.
The problem, however, is that amici have not identified any independent competitive harm caused by price squeezes above and beyond the harm that would result from a duty-to-deal violation at the wholesale level or predatory pricing at the retail level. See 3A P. Areeda & H. Hovenkamp, Antitrust Law ¶767c, p. 126 (2d ed. 2002) (“[I]t is difficult to see any competitive significance [of a price squeeze] apart from the consequences of vertical integration itself”). To the extent a monopolist violates one of these doctrines, the plaintiffs have a remedy under existing law. We do not need to endorse a new theory of liability to prevent such harm.
Lastly, as mentioned above, plaintiffs have asked us for leave to amend their complaint to bring a Brooke Group predatory pricing claim. We need not decide whether leave to amend should be granted. Our grant of certiorari was limited to the question whether price-squeeze claims are cognizable in the absence of an antitrust duty to deal. The Court of Appeals addressed only AT&T’s motion for judgment on the pleadings on the plaintiffs’ original complaint.[Footnote 4] For the reasons stated, we hold that the price-squeeze claims set forth in that complaint are not cognizable under the Sherman Act.
Plaintiffs have also filed an amended complaint, and the District Court concluded that this complaint, generously construed, could be read as alleging conduct that met the Brooke Group requirements for predatory pricing. App. to Pet. for Cert. 47a–52a, 56a. That order, however, applied the “no set of facts” pleading standard that we have since rejected as too lenient. See Bell Atlantic Corp. v. Twombly, 550 U. S. 544, 561–563 (2007). It is for the District Court on remand to consider whether the amended complaint states a claim upon which relief may be granted in light of the new pleading standard we articulated in Twombly, whether plaintiffs should be given leave to amend their complaint to bring a claim under Brooke Group, and such other matters properly before it. Even if the amended complaint is further amended to add a Brooke Group claim, it may not survive a motion to dismiss. For if AT&T can bankrupt the plaintiffs by refusing to deal altogether, the plaintiffs must demonstrate why the law prevents AT&T from putting them out of business by pricing them out of the market. Nevertheless, such questions are for the District Court to decide in the first instance. We do not address these issues here, as they are outside the scope of the question presented and were not addressed by the Court of Appeals in the decision below. See Cutter v. Wilkinson, 544 U. S. 709, 718, n. 7 (2005) (“[W]e are a court of review, not of first view”).
Trinko holds that a defendant with no antitrust duty to deal with its rivals has no duty to deal under the terms and conditions preferred by those rivals. 540 U. S., at 409–410. Brooke Group holds that low prices are only actionable under the Sherman Act when the prices are below cost and there is a dangerous probability that the predator will be able to recoup the profits it loses from the low prices. 509 U. S., at 222–224. In this case, plaintiffs have not stated a duty-to-deal claim under Trinko and have not stated a predatory pricing claim under Brooke Group. They have nonetheless tried to join a wholesale claim that cannot succeed with a retail claim that cannot succeed, and alchemize them into a new form of antitrust liability never before recognized by this Court. We decline the invitation to recognize such claims. Two wrong claims do not make one that is right.
The Court of Appeals assumed that any duty to deal arose only from FCC regulations, 503 F. 3d, at 878–879, n. 6, and the question on which we granted certiorari made the same assumption. Even aside from the District Court’s reasoning, App. to Pet. for Cert. 77a–85a, it seems quite unlikely that AT&T would have an antitrust duty to deal with the plaintiffs. Such a duty requires a showing of monopoly power, but—as the FCC has recognized, 20 FCC Rcd., at 14879–14887—the market for high-speed Internet service is now quite competitive; DSL providers face stiff competition from cable companies and wireless and satellite providers.
Like the Court of Appeals, 503 F. 3d, at 880, amici argue that price-squeeze claims have been recognized by Circuit Courts for many years, beginning with Judge Hand’s opinion in United States v. Aluminum Co. of America, 148 F. 2d 416 (CA2 1945) (Alcoa). In that case, the Government alleged that Alcoa was using its monopoly power in the upstream aluminum ingot market to squeeze the profits of downstream aluminum sheet fabricators. The court concluded: “That it was unlawful to set the price of ‘sheet’ so low and hold the price of ingot so high, seems to us unquestionable, provided, as we have held, that on this record the price of ingot must be regarded as higher than a ‘fair price.’ ” Id., at 438. Given developments in economic theory and antitrust jurisprudence since Alcoa, we find our recent decisions in Trinko and Brooke Group more pertinent to the question before us.
We note a procedural irregularity with this case: Normally, an amended complaint supersedes the original complaint. See 6 C. Wright & A. Miller, Federal Practice & Procedure §1476, pp. 556–557 (2d ed. 1990). Here, the District Court addressed the amended complaint in its 2005 order, App. to Pet. for Cert. 36a–52a, but the court only certified its 2004 order—addressing the original complaint—for interlocutory appeal, id., at 56a–57a. Both parties, as well as the Solicitor General, have expressed confusion about whether the amended complaint and the 2005 order are properly before this Court. See Brief for Petitioners 9, n. 6 (noting “some ambiguity” about which order was certified); Brief for United States 17 (“[I]t is unclear whether the 2005 Order and the amended complaint are properly at issue in this interlocutory appeal”); Brief for Respondents 8–10. The Court of Appeals majority did not address any of the District Court’s holdings from the 2005 order, so we decline to consider those issues at this time.
I would accept respondents’ concession that the Ninth Circuit majority’s “price squeeze” holding is wrong, I would vacate the Circuit’s decision, and I would remand the case in order to allow the District Court to determine whether respondents may proceed with their “predatory pricing” claim as set forth in Judge Gould’s dissenting Ninth Circuit opinion. linkLine Communications, Inc. v. SBC California, Inc., 503 F. 3d 876, 887 (2007).
A “price squeeze” claim finds its natural home in a Sherman Act §2 monopolization case where the Government as plaintiff seeks to show that a defendant’s monopoly power rests, not upon “skill, foresight and industry,” United States v. Aluminum Co. of America, 148 F. 2d 416, 430 (CA2 1945) (Alcoa), but upon exclusionary conduct, United States v. Grinnell Corp., 384 U. S. 563, 576 (1966). As this Court pointed out in Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U. S. 398 (2004), the “ ‘ means of illicit exclusion, like the means of legitimate competition, are myriad.’ ” Id., at 414 (quoting United States v. Microsoft Corp., 253 F. 3d 34, 58 (CADC 2001) (en banc) (per curiam)). They may involve a “course of dealing” that, even if profitable, indicates a “willingness to forsake short-term profits to achieve an anticompetitive end.” Trinko, supra, at 409. See, e.g., Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U. S. 585, 610–611 (1985); Complaint in United States v. International Business Machines Corp., Civil Action No. 69 Civ. 200 (SDNY, filed Jan. 17, 1969), ¶20(c), reprinted in F. Fisher, J. McGowan, & J. Greenwood, Folded, Spindled, and Mutilated: Economic Analysis and U. S. v. IBM 357 (1983). And, as Judge Hand wrote many years ago, a “price squeeze” may fall within that latter category. Alcoa, supra, at 437–438. As a matter of logic, it may be that a particular price squeeze can only be exclusionary if a refusal by the monopolist to sell to the “squeezed customer” would also be exclusionary. But a court, faced with a price squeeze rather than a refusal to deal, is unlikely to find the latter (hypothetical) question any easier to answer than the former.
I would try neither to answer these hypothetical questions here nor to foreshadow their answer. We have before us a regulated firm. During the time covered by the complaint, petitioners were required to provide wholesale digital subscriber line (DSL) transport service as a common carrier, charging “just and reasonable” rates that were not “unreasonabl[y] discriminat[ory].” 47 U. S. C. §§201(b), 202(a) (2000 ed.). And, in my view, a purchaser from a regulated firm (which, if a natural monopolist, is lawfully such) cannot win an antitrust case simply by showing that it is “squeezed” between the regulated firm’s wholesale price (to the plaintiff) and its retail price (to customers for whose business both firms compete). When a regulatory structure exists to deter and remedy anticompetitive harm, the costs of antitrust enforcement are likely to be greater than the benefits. See Town of Concord v. Boston Edison Co., 915 F. 2d 17, 26–29 (CA1 1990). Cf. 3 P. Areeda & D. Turner, Antitrust Law ¶¶834–836, pp. 344–355 (1978) (whether a particular course of conduct counts as “exclusionary” for antitrust purposes depends upon a host of factors, including, for example, the market position of the defendant, the nature of the market, and the nature of the defendant’s conduct).
Unlike Town of Concord, the regulators here controlled prices only at the wholesale level. See 915 F. 2d, at 29. But respondents do not claim that that regulatory fact makes any difference; and rightly so, for as far as I can tell, respondents could have gone to the regulators and asked for petitioners’ wholesale prices to be lowered in light of the alleged price squeeze. Cf. FPC v. Conway Corp., 426 U. S. 271, 279 (1976); 3 Areeda & Turner, supra, ¶726e, at 219–220.
Respondents now seek to show only that the defendant engaged in predatory pricing, within the terms of this Court’s decision in Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U. S. 209 (1993). The District Court can determine whether there is anything in the procedural history of this case that bars respondents from asserting their predatory pricing claim. And if not, it can decide the merits of that claim. As I said, I would remand the case so that it can do so.