TYNTEC INC.

v.

SYNIVERSE TECHNOLOGIES, LLC

A review of the papers, record, precedent, and scholarly literature reveals that the magistrate judge’s report and recommendation (Doc. 240) warrants adoption. However, the circumstance justifies a few comments on some points the plaintiff raises in objection and on the report in general. First, the argument that tyntec inherited a “preexisting voluntary and . . . profitable”¹ course of dealing by virtue of Iris’s contract assignment is weak, at best.2 (Doc. 250 at 20–1) Because a course of dealing, considered in the antitrust context, sheds “light upon the motivation of [the] refusal to deal,” Verizon Commc’ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 409 (2004), the course of dealing between Iris and Syniverse imputes no probative course of dealing to tyntec and

Corp., 731 F. 3d 1064, 1071 (10th Cir. 2013). Further, “the bringing of a lawsuit . . . may provide a sound business reason for . . . terminating [business] relations.” House of Materials, Inc. v. Simplicity Pattern Co., 298 F. 2d 867, 871 (2d Cir. 1962)). And Syniverse provides several other reasons for the decision to discontinue a peering relationship. Thus, because tyntec initiated the peering offers a year after suing

Syniverse and because Syniverse states a reasonable basis for refusing to deal, Syniverse’s refusal to accept tyntec’s eleventh-hour peering offers displays no “willingness to sacrifice short-term profits” within the contemplation of Section 2. Therefore, Syniverse’s rejection of tyntec’s proposals constitutes no ongoing refusal to deal and serves no useful evidentiary function. * * *

Section 2 of the Sherman Act provides, “Every person who shall 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, . . . shall be deemed guilty of a felony.” Although monopolistic behavior typically comprises collusive or conspiratorial conduct, antitrust law recognizes in a limited circumstance the potential for monopolistic behavior to manifest in unilateral conduct. An anticompetitive refusal to deal is one of these limited circumstances. But “refusal to deal” jurisprudence comes shrouded in “weak” and precarious doctrinal justification. ROBERT H. BORK, THE ANTITRUST PARADOX: A POLICY AT WAR WITH ITSELF 346 (1993) (“[T]he doctrinal justifications for the differences in [refusal to deal] outcome[s] appear weak.”). Accordingly, a posture of restraint should guide the analysis of antitrust liability for a refusal to deal. This is not to suggest that “refusal to deal” jurisprudence lacks any proper place in antitrust jurisprudence or serves no benefit in averting monopolistic conduct; rather, this is to suggest that “refusal to deal” jurisprudence needs no further muddling –– an inevitable result if unwarranted liability is imposed in a case such as tyntec’s. Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985), a seminal precedent for “refusal to deal” doctrine (and a case on which tyntec heavily relies), falls “at or near the outer boundary of § 2 liability,” as characterized in Verizon Commc’ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 409 (2004), which circumscribes Aspen within its idiosyncratic facts and which consequently constricts “refusal to deal” liability. Eleventh Circuit precedent further constricts the boundary of “refusal to deal” liability and narrows the conduct that falls within the boundary. See, e.g., Morris Communications Corp. v. PGA Tour, Inc., 364 F. 3d 1288 (11th Cir. 2004); Covad

Communications Co. v. BellSouth Corp., 374 F. 3d 1044 (11th Cir. 2004). At whatever undescribed boundary “refusal to deal” liability might lie following Aspen, Trinko, Morris, Covad, Novell, and similar precedent, Syniverse’s business conduct –– pervaded by deliberative, understandable, reasonable, and lucid efficiency justifications –– falls somewhere outside the boundary of Section 2 liability. tyntec’s action stands consequentially distinct from Aspen, some of which distinctions warrant remark.³ The parties in Aspen shared a longstanding business relationship that created a “joint venture”; Syniverse and tyntec were essentially strangers until the assignment of Iris’s contract. The parties in Aspen shared a

Syniverse and tyntec, Syniverse’s conduct was foreseeable and anticipatorily announced. The Aspen defendant’s conduct inflicted monetary loss on the defendant; Syniverse’s conduct guaranteed higher profit.⁴ The Aspen defendant refused to sell products to the competitor at a retail price despite the defendant’s selling to others in the relevant market at a retail price; Syniverse offered to tyntec services at precisely the “retail” price offered to entities similarly situated to tyntec.5 The Aspen defendant’s refusal generated disgruntled consumers who lacked a meaningful, alternative product option; Syniverse’s refusal generated one potentially dissatisfied

Given these differences, permitting liability for Syniverse’s conduct is to mistakenly permit the proverbial camel to pass through the unusually impassable “narrow-eyed needle of refusal to deal doctrine.” Novell, 731 F. 3d at 1074. “[T]he limits on the administrative capacities of courts to police market . . . transactions,”7 the judiciary’s duty to foster predictable rules and results on which a business can rely, and the “presumption of freedom [ ] appropriate to a free market economy”8 –– even taken singularly, but especially taken collectively –– commend judicial restraint unless distinct evidence reveals the refusal as predatory. As Novell states, “If the doctrine . . . must err still to some slight degree, perhaps it is better that it should err on the side of firm independence.” 731 F. 3d at 1076.

In sum, tyntec fails to establish a causal link between Syniverse’s ostensibly “anti-competitive refusal” and injury to consumers and competition, Syniverse’s

STEVEND.MERRYDAY [...]

UNITED STATES DISTRICT JUDGE