The Supreme Court should reject an appeal from Duke Energy of an antitrust case it lost in lower courts, the Office of the Solicitor General said in a brief filed Dec. 1 (24-917).

The 4th U.S. Circuit Court of Appeals found in August 2024 that Duke’s alleged anticompetitive conduct against NTE Energy — an independent power producer serving municipal customers in North Carolina — warranted another look in a lower court, which sided with the other parties. Duke filed a petition for review at the Supreme Court in February. (See 4th Circuit Remands Duke Energy Market Power Lawsuit Filed by NTE.)

“This appeal arises out of a campaign by an established monopolist to stop a more efficient rival from disturbing its long-dominant hold over a regional energy market,” OSG said.

The beneficiary of a government grant of a monopoly more than a century ago, Duke has controlled the wholesale power market in the Carolinas for decades. Barriers to entry — including the high cost of power plants and the paucity of anchor clients big enough to help finance a competitor’s generator — have helped it keep that monopoly.

“By dissuading such customers from switching to a potential competitor, an entrenched monopolist can prevent new entrants from gaining a foothold in the region — without creating a better product, producing a better service or implementing a general price cut,” OSG said. “The summary-judgment record would support a finding that that is exactly what happened here.”

Duke’s old power plants were not competitive with NTE’s, which used newer technology to produce electricity at a cheaper rate, so when the IPP tried to build one in in the Carolinas, Duke targeted the competition itself, OSG argued.

“Petitioner recognized that this new plant would be viable only if respondent could sell power to the city of Fayetteville, the one sizable customer in the area whose contract was coming due,” OSG said. “Petitioner therefore took a variety of steps intended to deter Fayetteville from switching to a new supplier.”

Duke has not sought review of the underlying facts of the case, in which the 4th Circuit found that the various acts it took added up to what a jury could find to be an anticompetitive campaign, OSG noted.

“When a monopolist engages in a coordinated campaign to squelch competition, no circuit holds that each discrete aspect of the defendant’s conduct must be analyzed in isolation,” OSG said. “Instead, courts uniformly agree, consistent with this court’s precedent, that a holistic analysis is appropriate in circumstances like these. The petition for a writ of certiorari should be denied.”

Duke’s petition for the Supreme Court to review the case argues that, on their own, none of its actions were illegal, saying the 4th Circuit effectively found that “0+0=1.”

“The district court found that antitrust math is no different from ordinary arithmetic. If an antitrust plaintiff pleads a series of independently lawful acts, each of which does not violate this court’s precedents, those acts cannot together add up to some nebulous antitrust violation,” Duke said in its petition. “The Court of Appeals concluded otherwise, embracing a ‘monopoly broth’ theory prominent in the 1960s to 1980s but long since discarded.”

The Supreme Court needs to intervene to restore antitrust law to the principles that have governed in more recent decades, the company argued. It overhauled how to prove monopolization under the Sherman Act starting in the 1990s.

“It replaced open-ended standards and generalized questions of anticompetitive intent with clear rules for particular categories of conduct,” Duke said. “That doctrinal shift has provided much needed certainty for businesses and judges alike and has prevented antitrust law from chilling vigorous competition in the marketplace. Antitrust plaintiffs have long resisted that shift.”

The U.S. Chamber of Commerce, the NC Chamber Legal Institute and the Business Roundtable filed an amicus brief taking Duke’s side.

“In just a few short months, the decision below has already been cited dozens of times in briefs and decisions across the country as plaintiffs urge lower courts to disregard this court’s discrete doctrinal standards in favor of ‘holistic’ analyses,” they said.

Allowing the 4th Circuit’s finding to stand would supercharge that trend with antitrust plaintiffs filing allegations of “complex” anticompetitive schemes that cannot satisfy the court’s clear tests and would thus be “dead on arrival” in other circuits, they added.