The First Amendment and Antitrust Law

A recent case gives us the opportunity to write about one of the most infrequently asserted First Amendment rights: the right to petition the government for a redress of grievances.  The right shows up in a surprising place: federal antitrust law.

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A cable company called OneLink provides cable TV to people in Puerto Rico via traditional coaxial cable.  Another company, Puerto Rico Telephone Company (“PRTC”), wanted to compete with OneLink for cable-TV subscribers by offering IPTV to residents of Puerto Rico.  (IPTV stands for internet protocol television, and it is a way to stream live TV over the internet.)  OneLink petitioned the regulatory agencies, and government officials and tribunals, including the Commonwealth of Puerto Rico and the federal courts, “to deny, slow down, or otherwise impede PRTC’s efforts” because OneLink was “not eager to face competition” from PRTC.  Eventually, PRTC prevailed and was able to offer IPTV.

PRTC then went on the offensive, suing OneLink for violating federal antitrust laws.  PRTC claimed that OneLink engaged in monopolistic and attempted-monopolistic behavior when it filed 24 separate petitions with the regulatory agency.  (OneLink did not prevail on any of those 24 petitions.)  PRTC claimed that OneLink was trying to keep them out of the market, and that such anticompetitive behavior is prohibited by federal law.

In the 1960s, the Supreme Court held that federal antitrust law does not prohibit conduct that consists of petitioning the government.  Animating the Supreme Court’s decisions was the First Amendment.  The law cannot prohibit what the First Amendment protects: petitioning the government.  The two famous cases about this concept are called Noerr and Pennington, and so this concept is called the “Noerr-Pennington” doctrine (or sometimes “Noerr-Pennington immunity”).  In essence, if all a company is doing is “petitioning the government”—including filing lawsuits with a court or petitions with government agencies—the company is not violating federal law.

But there is an exception if the company’s conduct is a “sham.”  For a lawsuit (or a petition) to be a “sham,” it must be both objectively baseless and brought in bad faith.  Thus, federal antitrust law will prohibit only truly frivolous “petitioning” done with the intention to take advantage of government processes for anticompetitive purposes.  That’s as high of a bar as it sounds.

Okay, back to the Puerto Rico cable-TV dispute.  OneLink responded to PRTC’s lawsuit by claiming that its 25 losing petitions were all protected by the Noerr-Pennington doctrine, and thus that it had not violated federal antitrust laws.  Because each of OneLink’s 24 petitions was “objectively reasonable,” the First Circuit sided with OneLink and dismissed the case.

(If you’d like to learn more about Noerr-Pennington, we recommend an FTC report from 2006.)

Case: Puerto Rico Telephone Co. v. San Juan Cable LLC, No. 16-2132 (1st Cir. Oct. 31, 2017) (opinion here)

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