Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U.S. 49, 7 (1993)

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Cite as: 508 U. S. 49 (1993)

Opinion of the Court

The Courts of Appeals have defined "sham" in inconsistent and contradictory ways.3 We once observed that "sham" might become "no more than a label courts could apply to activity they deem unworthy of antitrust immunity." Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U. S. 492, 508, n. 10 (1988). The array of definitions adopted by lower courts demonstrates that this observation was prescient.

II

PRE contends that "the Ninth Circuit erred in holding that an antitrust plaintiff must, as a threshold prerequisite

3 Several Courts of Appeals demand that an alleged sham be proved legally unreasonable. See McGuire Oil Co. v. Mapco, Inc., 958 F. 2d 1552, 1560, and n. 12 (CA11 1992); Litton Systems, Inc. v. American Telephone & Telegraph Co., 700 F. 2d 785, 809-812 (CA2 1983), cert. denied, 464 U. S. 1073 (1984); Hydro-Tech Corp. v. Sundstrand Corp., 673 F. 2d 1171, 1177 (CA10 1982); Federal Prescription Service, Inc. v. American Pharmaceutical Assn., 214 U. S. App. D. C. 76, 85, 89, 663 F. 2d 253, 262, 266 (1981), cert. denied, 455 U. S. 928 (1982). Still other courts have held that successful litigation by definition cannot be sham. See, e. g., Eden Hannon & Co. v. Sumitomo Trust & Banking Co., 914 F. 2d 556, 564-565 (CA4 1990), cert. denied, 499 U. S. 947 (1991); South Dakota v. Kansas City Southern Industries, Inc., 880 F. 2d 40, 54 (CA8 1989), cert. denied sub nom. South Dakota v. Kansas City Southern R. Co., 493 U. S. 1023 (1990); Columbia Pictures Industries, Inc. v. Redd Horne, Inc., 749 F. 2d 154, 161 (CA3 1984).

Other Courts of Appeals would regard some meritorious litigation as sham. The Sixth Circuit treats "genuine [legal] substance" as raising merely "a rebuttable presumption" of immunity. Westmac, Inc. v. Smith, 797 F. 2d 313, 318 (1986) (emphasis added), cert. denied, 479 U. S. 1035 (1987). The Seventh Circuit denies immunity for the pursuit of valid claims if "the stakes, discounted by the probability of winning, would be too low to repay the investment in litigation." Grip-Pak, Inc. v. Illinois Tool Works, Inc., 694 F. 2d 466, 472 (1982), cert. denied, 461 U. S. 958 (1983). Finally, in the Fifth Circuit, "success on the merits does not . . . preclude" proof of a sham if the litigation was not "significantly motivated by a genuine desire for judicial relief." In re Burlington Northern, Inc., 822 F. 2d 518, 528 (1987), cert. denied sub nom. Union Pacific R. Co. v. Energy Transportation Systems, Inc., 484 U. S. 1007 (1988).

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