UC Irvine Law Review

The First Amendment allows a business to sue its competitors even if the result of the suit would destroy them and lessen competition. It should not, however, protect a lawsuit that is designed primarily to inflict harm that is collateral to the proceedings. Unfortunately, courts have no solution for the case that simultaneously achieves both goals. As a result, they routinely fail to distinguish legitimate lawsuits from anticompetitive shams.

Sophisticated businesses are weaponizing litigation to inflict harm on their competitors and being rewarded with antitrust petitioning immunity thanks to the Noerr-Pennington doctrine. After decades of divergence between the courts and economists, the doctrine’s sham exception has been outsmarted. Economic analysis proves that the sham exception is woefully underinclusive and that more complex predatory suits are being inappropriately immunized. The Third Circuit’s recent AbbVie decision highlights how the existing sham standard sometimes forces courts into anticompetitive outcomes. My proposal is an aggressive, economically robust solution to properly and fairly prosecute predatory litigation.