author: Chief Justice Rehnquist

text:
    MARYLAND v. PRINGLE
    No. 02-809.
    Argued November 3, 2003
    Decided December 15, 2003

      Rehnquist, C. J., delivered the opinion for a unanimous Court.

      Gary E. Bair, Solicitor General of Maryland, argued the cause for petitioner. With him. on the briefs were J. Joseph Curran, Jr., Attorney General, and Kathryn Grill Graeff and Shannon E. Avery, Assistant Attorneys General.

      Sri Srinivasan argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Olson, Assistant Attorney General Chertoff, Deputy Solicitor General Dreeben, and Deborah Watson.

      Nancy S. Forster argued the cause for respondent. With her on the brief were Stephen E. Harris and Sherrie Glasser.

       Briefs of amici curiae urging reversal were filed for the State of Ohio et al. by Jim Petro, Attorney General of Ohio, Douglas R. Cole, State Solicitor, Stephen P. Carney, Senior Deputy Solicitor, and Diane Richards Brey, Deputy Solicitor, and by the Attorneys General for their respective jurisdictions as follows: William H. Pryor, Jr., of Alabama, Gregg Renkes. of Alaska, Christopher L. Morano of Connecticut, M. Jane Brady of Delaware, Mark J. Bennett of Hawaii, Lisa Madigan of Illinois, Richard P. leyoub of Louisiana, Michael A Cox of Michigan, Jeremiah W. (Jay) Nixon of Missouri, Mike McGrath.of Montana, Brian Sandoval of Nevada, Patricia A Madrid of New Mexico, W. A Drew Edmondson of Oklahoma, Anabelle Rodriguez of Puerto Rico, Henry Dargan McMaster of South Carolina, Larry Long of South Dakota, Greg Abbott of Texas, Mark L. Shurtleff of Utah, Jerry W. Kilgore of Virginia, and Darrell V. McGraw, Jr., of West Virginia; and for the Criminal Justice Legal Foundation by Kent S. Scheidegger and Charles L. Hobson. Steven R. Shapiro and Lisa Kemler filed a brief for the American Civil Liberties Union et al. as amici curiae urging affirmance.

   Chief Justice Rehnquist

delivered the opinion of the Court.

In the early morning hours a passenger car occupied by three men was stopped for speeding by a police officer. The officer, upon searching the ear, seized $763 of rolled-up cash from the glove compartment and five glassine baggies of cocaine from between the back-seat armrest and the back seat. After all three men denied ownership of the cocaine and money, the officer arrested each of them. We hold that the officer had probable cause to arrest Pringle — one of the three men.

At 3:16 a.m. on August 7,1999, a Baltimore County Police officer stopped a Nissan Maxima for speeding. There were three occupants in the car: Donte Partlow, the driver and owner, respondent Pringle, the front-seat passenger, and Otis Smith, the back-seat passenger. The officer asked Partlow for his license and registration. When Partlow opened the glove compartment to retrieve the vehicle registration, the officer observed a large amount of rolled-up money in the glove compartment. The officer returned to his patrol car with Partlow’s license and registration to check the computer system for outstanding violations. The computer check did not reveal any violations. The officer returned to the stopped car, had Partlow get out, and issued him an oral warning.

After a second patrol car arrived, the officer asked Partlow if he had any weapons or narcotics in the vehicle. Partlow indicated that he did not. Partlow then consented to a search of the vehicle. The search yielded $763 from the glove compartment and five plastic glassine baggies containing cocaine from behind the back-seat armrest. When the officer began the search the armrest was in the upright position flat against the rear seat. The officer pulled down the armrest and found the drugs, which had been placed between the armrest and the back seat of the car.

The officer questioned all three men about the ownership of the drugs and money, and told them that if no one admitted to ownership of the drugs he was going to arrest them all. The men offered no information regarding the ownership of the drugs or money. All three were placed under arrest and transported to the police station.

Later that morning, Pringle waived his rights under Miranda v. Arizona, 384 U. S. 436 (1966), and gave an oral and written confession in which he acknowledged that the cocaine belonged to him, that he and his friends were going to a party, and that he intended to sell the cocaine or “[u]se it for sex.” App. 26. Pringle maintained that the other occupants of the car did not know about the drugs, and they were released.

The trial court denied Pringle’s motion to suppress his confession as the fruit of an illegal arrest, holding that the officer had probable cause to arrest Pringle. A jury convicted Pringle of possession with intent to distribute cocaine and possession of cocaine. He was sentenced to 10 years’ incarceration without the possibility of parole. The Court of Special Appeals of Maryland affirmed. 141 Md. App. 292, 785 A. 2d 790 (2001).

The Court of Appeals of Maryland, by divided vote, reversed, holding that, absent specific facts tending to show Pringle’s knowledge and dominion or control over the drugs, “the mere finding of cocaine in the back armrest when [Prin-gle] was a front seat passenger in a car being driven by its owner is insufficient to establish probable cause for an arrest for possession.” 370 Md. 525, 545, 805 A. 2d 1016, 1027 (2002). We granted certiorari, 538 U. S. 921 (2003), and now reverse.

Under the Fourth Amendment, made applicable to the States by the Fourteenth Amendment, Mapp v. Ohio, 367 U. S. 643 (1961), the people are “to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, . . . and no Warrants shall issue, but upon probable cause ....” U. S. Const., Arndt. 4. Maryland law authorizes police officers to execute warrantless arrests, inter alia, for felonies committed in an officer’s presence or where an officer has probable cause to believe that a felony has been committed or is being committed in the officer’s presence. Md. Ann. Code, Art. 27, §594B (1996) (repealed 2001). A warrantless arrest of an individual in a public place for a felony, or a misdemeanor committed in the officer’s presence, is consistent with the Fourth Amendment if the arrest is supported by probable cause. United States v. Watson, 423 U. S. 411, 424 (1976); see Atwater v. Lago Vista, 532 U. S. 318, 354 (2001) (stating that “[i]f an officer has probable cause to believe that an individual has committed even a very minor criminal offense in his presence, he may, without violating the Fourth Amendment, arrest the offender”).

It is uncontested in the present case that the officer, upon recovering the five plastic glassine baggies containing suspected cocaine, had probable cause to believe a felony had been committed. Md. Ann. Code, Art. 27, §287 (1996) (repealed 2002) (prohibiting possession of controlled dangerous substances). The sole question is whether the officer had probable cause to believe that Pringle committed that crime.

The long-prevailing standard of probable cause protects “citizens from rash and unreasonable interferences with privacy and from unfounded charges of crime,” while giving “fair leeway for enforcing the law in the community’s protection.” Brinegar v. United States, 338 U. S. 160, 176 (1949). On many occasions, we have reiterated that the probable-cause standard is a “‘practical, nontechnical conception’” that deals with “ ‘the factual and practical considerations of everyday life on which reasonable and prudent men, not legal technicians, act.’ ” Illinois v. Gates, 462 U. S. 213, 231 (1983) (quoting Brinegar, supra, at 175-176); see, e. g., Ornelas v. United States, 517 U. S. 690, 695 (1996); United States v. Sokolow, 490 U. S. 1, 7-8 (1989). “[P]robable cause is a fluid concept — turning on the assessment of probabilities in particular factual contexts — not readily, or even usefully, reduced to a neat set of legal rules.” Gates, 462 U. S., at 232.

The probable-cause standard is incapable of precise definition or quantification into percentages because it deals with probabilities and depends on the totality of the circumstances. See ibid.; Brinegar, 338 U. S., at 175. We have stated, however, that “[t]he substance of all the definitions of probable cause is a reasonable ground for belief of guilt,” ibid, (internal quotation marks and citations omitted), and that the belief of guilt must be particularized with respect to the person to be searched or seized, Ybarra v. Illinois, 444 U. S. 85, 91 (1979). In Illinois v. Gates, we noted:

“As early as Locke v. United States, 7 Cranch 339, 348 (1813), Chief Justice Marshall observed, in a closely related context: ‘[T]he term “probable cause,” according to its usual acceptation, means less than evidence which would justify condemnation .... It imports a seizure made under circumstances which warrant suspicion.’ More recently, we said that ‘the quanta ... of proof’ appropriate in ordinary judicial proceedings are inapplicable to the decision to issue a warrant. Brinegar, 338 U. S., at 173. Finely tuned standards such as proof beyond a reasonable doubt or by a preponderance of the evidence, useful in formal trials, have no place in the [probable-cause] decision.” 462 U. S., at 235.

To determine whether an officer had probable cause to arrest an individual, we examine the events leading up to the arrest, and then decide “whether these historical facts, viewed from the standpoint of an objectively reasonable police officer, amount to” probable cause, Ornelas, supra, at 696.

In this case, Pringle was one of three men riding in a Nissan Maxima at 3:16 a.m. There was $763 of rolled-up cash in the glove compartment directly in front of Pringle. Five plastic glassine baggies of cocaine were behind the back-seat armrest and accessible to all three men. Upon questioning, the three men failed to offer any information with respect to the ownership of the cocaine or the money.

We think it an entirely reasonable inference from these facts that any or all three of the occupants had knowledge, of, and exercised dominion and control over, the cocaine. Thus, a reasonable officer could conclude that there was probable cause to believe Pringle committed the crime of possession of cocaine, either solely or jointly.

Pringle’s attempt to characterize this case as a guilt-by-association case is unavailing. His reliance on Ybarra v. Illinois, supra, and United States v. Di Re, 332 U. S. 581 (1948), is misplaced. In Ybarra, police officers obtained a warrant to search a tavern and its bartender for evidence of possession of a controlled substance. Upon entering the tavern, the officers conducted patdown searches of the customers present in the tavern, including Ybarra. Inside a cigarette pack retrieved from Ybarra’s pocket, an officer found six tinfoil packets containing heroin. We stated:

“[A] person’s mere propinquity to others independently suspected of criminal activity does not, without more, give rise to probable cause to search that person. Sibron v. New York, 392 U. S. 40, 62-63 (1968). Where the standard is probable cause, a search or seizure of a person must be supported by probable cause particularized with respect to that person. This requirement cannot be undercut or avoided by simply pointing to the fact that coincidentally there exists probable cause to search or seize another or to search the premises where the person may happen to be.” 444 U. S., at 91.

We held that the search warrant did not permit body searches of all of the tavern’s patrons and that the police could not pat down the patrons for weapons, absent individualized suspicion. Id., at 92.

This case is quite different from Ybarra. Pringle and his two companions were in a relatively small automobile, not a public tavern. In Wyoming v. Houghton, 526 U. S. 295 (1999), we noted that “a car passenger — unlike the unwitting tavern patron in Ybarra — will often be engaged in a common enterprise with the driver, and have the same interest in concealing the fruits or the evidence of their wrongdoing.” Id., at 304-305. Here we think it was reasonable for the officer to infer a common enterprise among the three men. The quantity of drugs and cash in the car indicated the likelihood of drug dealing, an enterprise to which a dealer would be unlikely to admit an innocent person with the potential to furnish evidence against him. In Di Re, a federal investigator had been told by an informant, Reed, that he was to receive counterfeit gasoline ration coupons from a certain Buttitta at a particular place. The investigator went to the appointed place and saw Reed, the sole occupant of the rear seat of the car, holding gasoline ration coupons. There were two other occupants in the car: Buttitta in the driver’s seat and Di Re in the front passenger’s seat. Reed informed the investigator that Buttitta had given him counterfeit coupons. Thereupon, all three men were arrested and searched. After noting that the officers had no information implicating Di Re and no information pointing to Di Re’s possession of coupons, unless presence in the car warranted that inference, we concluded that the officer lacked probable cause to believe that Di Re was involved in the crime. 332 U. S., at 592-594. We said “[a]ny inference that everyone on the scene of a crime is a party to it must disappear if the Government informer singles out the guilty person.” Id., at 594. No such singling out occurred in this ease; none of the three men provided information with respect to the ownership of the cocaine or money.

We hold that the officer had probable cause to believe that Pringle had committed the crime of possession of a controlled substance. Pringle’s arrest therefore did not contravene the Fourth and Fourteenth Amendments. Accordingly, the judgment of the Court of Appeals of Maryland is reversed, and the case is remanded for further proceedings not inconsistent with this opinion.

It is so ordered.

       Maryland law defines “possession” as “the exercise of actual or constructive dominion or control over a thing by one or more persons.” Md. Ann. Code, Art. 27, § 277(s) (1996) (repealed 2002).

       The Court of Appeals of Maryland dismissed the $763 seized from the glove compartment as a factor in the probable-cause determination, stating that “[m]oney, without more, is innocuous.” 370 Md. 524, 546, 805 A. 2d 1016, 1028 (2002). The court’s consideration of the money in isolation, rather than as a factor in the totality of the circumstances, is mistaken in light of our precedents. See, e. g., Illinois v. Gates, 462 U. S. 213, 230-231 (1983) (opining that the totality of the circumstances approach is consistent with our prior treatment of probable cause); Brinegar v. United States, 338 U. S. 160, 175-176 (1949) (“Probable cause exists where ‘the facts and circumstances within their [the officers’] knowledge and of which they had reasonably trustworthy information [are] sufficient in themselves to warrant a man of reasonable caution in the belief that’ an offense has been or is being committed”). We think it is abundantly clear from the facts that this case involves more than money alone.


source: Caselaw Access Project

author:
Justice Breyer
      Justice Scalia,

license: Public Domain

text:
    CASTRO v. UNITED STATES
    No. 02-6683.
    Argued October 15, 2003
    Decided December 15, 2003

      Breyek, J., delivered the opinion of the Court, in which REHNQUIST, C. J., and Stevens, O'Connor, Kennedy, Souter, and Ginsburg, JJ., joined, and in which Scalia and Thomas, JJ., joined as to Parts I and II. Scalia, J., filed an opinion concurring in part and concurring in the judgment, in which Thomas, J., joined, post, p. 385.

      Michael G. Frick, by appointment of the Court, post, p. 807, argued the cause and filed briefs for petitioner.

      Dan Himmelfarb argued the cause for the United States. With him on the brief were Solicitor General Olson, Assistant Attorney General Chertoff, Deputy Solicitor General Dreeben, and Nina Goodman.

        Paul Mogin and Lisa B. Kemler filed a brief for the National Association of Criminal Defense Lawyers as amicus curiae urging reversal.

   Justice Breyer

delivered the opinion of the Court.

Under a longstanding practice, a court sometimes treats as a request for habeas relief under 28 U. S. C. § 2255 a motion that a pro se federal prisoner has labeled differently. Such recharacterization can have serious consequences for the prisoner, for it subjects any subsequent motion under § 2255 to the restrictive conditions that federal law imposes upon a “second or successive” (but not upon a first) federal habeas motion. §2255, ¶ 8. In light of these consequences, we hold that the court cannot so recharacterize a pro se litigant’s motion as the litigant’s first §2255 motion unless the court informs the litigant of its intent to recharacterize, warns the litigant that the recharacterization will subject subsequent § 2255 motions to the law’s “second or successive” restrictions, and provides the litigant with an opportunity to withdraw, or to amend, the filing. Where these things are not done, a recharacterized motion will not count as a §2255 motion for purposes of applying §2255’s “second or successive” provision.

I

This case focuses upon two motions that Hernán O’Ryan Castro, a federal prisoner acting pro se, filed in federal court. He filed the first motion in 1994, the second in 1997.

A

The relevant facts surrounding the 1994 motion are the following:

(1) On July 5,1994, Castro filed a pro se motion attacking his federal drug conviction, a motion that he called a Rule 33 motion for a new trial. See Fed. Rule Crim. Proc. 33.

(2) The Government, in its response, said that Castro’s claims were “more properly cognizable” as federal habeas corpus claims, i. e., claims made under the authority of 28 U. S. C. § 2255. But, the Government added, it did not object to the court’s considering Castro’s motion as having invoked both Rule 33 and § 2255.

(3) The District Court denied Castro’s motion on the merits. In its accompanying opinion, the court generally referred to Castro’s motion as a Rule 33 motion; but the court twice referred to it as a § 2255 motion as well. App. 137-144.

(4) Castro, still acting pro se, appealed, but he did not challenge the District Court’s recharacterization of his motion.

(5) The Court of Appeals summarily affirmed. It said in its one-paragraph order that it was ruling on a motion based upon both Rule 33 and § 2255. Judgt. order reported at 82 F. 3d 429 (CA11 1996); App. 147.

B

The relevant facts surrounding the 1997 motion are the following:

(1) On April 18, 1997, Castro, acting pro se, filed what he called a §2255 motion. The motion included claims not raised in the 1994 motion, including a claim of ineffective assistance of counsel.

(2) The District Court denied the motion; Castro appealed; and the Court of Appeals remanded for further consideration of the ineffective-assistance-of-counsel claim. It also asked the District Court to consider whether, in light of the 1994 motion, Castro’s motion was his second § 2255 motion, rather than his first.

(3) On remand, the District. Court appointed counsel for Castro. It then decided that the 1997 motion was indeed Castro’s second §2255 motion (the 1994 motion being his first). And it dismissed the motion for failure to comply with one of § 2255’s restrictive “second or successive” conditions (namely, Castro’s failure to obtain the Court of Appeals’ permission to file a “second or successive” motion). § 2255, ¶ 8. The District Court granted Castro a certificate to appeal its “second or successive” determination. § 2253(c)(1).

(4) The Eleventh Circuit affirmed by a split (2-to-l) vote. 290 F. 3d 1270 (2002). The majority “suggested” and “urged” district courts in the future to “warn prisoners of the consequences of recharacterization and provide them with the opportunity to amend or dismiss their filings.” Id., at 1273,1274. But it held that the 1994 court’s failure to do so did not legally undermine its recharacterization. Hence, Castro’s current § 2255 motion was indeed his second habeas motion. Id., at 1274.

Other Circuits have taken a different approach. E.g., United States v. Palmer, 296 F. 3d 1135, 1145-1147 (CADC 2002) (announcing a rule requiring courts to notify pro se litigants prior to recharacterization and refusing to find the § 2255 motion before it “second or successive” since such notice was lacking). We consequently granted Castro’s petition for certiorari.

II

We begin with a jurisdictional matter. We asked the parties to consider the relevance of a provision in the federal habeas corpus statutes that says that the

“grant or denial of an authorization by a court of appeals to file a second or successive application ... shall not be the subject of a petition for... a writ of certiorari.” 28 U. S. C. § 2244(b)(3)(E).

After receiving the parties’ responses, we conclude that this provision does not bar our review here.

Castro’s appeal to the Eleventh Circuit did not concern an “authorization ... to file a second or successive application.” The District Court certified for appeal the question whether Castro’s § 2255 motion was his first such motion or his second. Castro then argued to the Eleventh Circuit that his §2255 motion was his first; and he asked the court to reverse the District Court’s dismissal of that motion. He nowhere asked the Court of Appeals to grant, and it nowhere denied, any “authorization ... to file a second or successive application.”

The Government argues that the Eleventh Circuit’s opinion had the effect of denying “authorization ... to file a second ... application” because the court said in its opinion that Castro’s motion could not meet the requirements for second or successive motions. 290 F. 3d, at 1273. For that reason, the Government concludes, the court’s, decision falls within the scope of the jurisdictional provision. Brief for United States 16.

In our view, however, this argument stretches the words of the statute too far. Given the context, we cannot take these words in the opinion as a statutorily relevant “denial” of a request that was not made. Even if, for argument’s sake, we were to accept the Government’s characterization, the argument nonetheless would founder on the statute’s requirement that the “denial” must be the “subject” of the cer-tiorari petition. The “subject” of Castro’s petition is not the Court of Appeals’ “denial of an authorization.” It is the lower courts’ refusal to recognize that this § 2255 motion is his first, not his second. That is a very different question. Cf. Adamo Wrecking Co. v. United States, 434 U. S. 275, 282-283 (1978) (statute barring court review of lawfulness of agency “emission standard” in criminal case does not bar court review of whether regulation is an “emission standard”).

Moreover, reading the statute as the Government suggests would produce troublesome results. It would ereate procedural anomalies, allowing review where the lower court decision disfavors, but denying review where it favors, the Government. Cf. Stewart v. Martinez-Villareal, 523 U. S. 637, 641-642 (1998) (allowing the Government to obtain review of a decision that a habeas corpus application is not “second or successive”). It would close our doors to a class of habeas petitioners seeking review without any clear indication that such was Congress’ intent. Cf. Felker v. Turpin, 518 U. S. 651, 660-661 (1996). And any such conclusion would prove difficult to reconcile with the basic principle that we “read limitations on our jurisdiction to review narrowly.” Utah v. Evans, 536 U. S. 452, 463 (2002).

We conclude that we have the power to review Castro’s claim, and we turn to the merits of that claim.

III

Federal courts sometimes will ignore the legal label that a pro se litigant attaches to a motion and recharacterize the motion in order to place it within a different legal category. See, e. g., Raineri v. United States, 233 F. 3d 96, 100 (CA1 2000); United States v. Detrich, 940 F. 2d 37, 38 (CA2 1991); United States v. Miller, 197 F. 3d 644, 648 (CA3 1999); Raines v. United States, 423 F. 2d 526, 528, n. 1 (CA4 1970); United States v. Santora, 711 F. 2d 41, 42 (CA5 1983); United States v. McDowell, 305 F. 2d 12, 14 (CA6 1962); Henderson v. United States, 264 F. 3d 709, 711 (CA7 2001); McIntyre v. United States, 508 F. 2d 403, n. 1 (CA8 1975) (per curiam); United States v. Eatinger, 902 F. 2d 1383, 1385 (CA9 1990) (per curiam); United States v. Kelly, 235 F. 3d 1238, 1242 (CA10 2000); United States v. Jordan, 915 F. 2d 622, 625 (CA11 1990); United States v. Tindle, 522 F. 2d 689, 693 (CADC 1975) (per curiam). They may do so in order to avoid an unnecessary dismissal, e. g., id., at 692-693, to avoid inappropriately stringent application of formal labeling requirements, see Haines v. Kerner, 404 U. S. 519, 520 (1972) (per curiam), or to create a better correspondence between the substance of a pro se motion’s claim and its underlying legal basis, see Hughes v. Rowe, 449 U. S. 5, 10 (1980) (per curiam); Andrews v. United States, 373 U. S. 334 (1963).

We here address one aspect of this practice, namely, certain legal limits that nine Circuits have placed on recharac-terization. Those Circuits recognize that, by recharacteriz-ing as a first § 2255 motion a pro se litigant’s filing that did not previously bear that label, the court may make it significantly more difficult for that litigant to file another such motion. They have consequently concluded that a district court may not recharacterize a pro se litigant’s motion as a request for relief under § 2255 — unless the court first warns the pro se litigant about the consequences of the recharacter-ization, thereby giving the litigant an opportunity to contest the recharacterization, or to withdraw or amend the motion. See Adams v. United States, 155 F. 3d 582, 583 (CA2 1998) (per curiam); United States v. Miller, supra, at 646-647 (CA3); United States v. Emmanuel, 288 F. 3d 644, 646-647 (CA4 2002); In re Shelton, 295 F. 3d 620, 622 (CA6 2002) (per curiam); Henderson v. United States, supra, at 710-711 (CA7); Morales v. United States, 304 F. 3d 764, 767 (CA8 2002); United States v. Seesing, 234 F. 3d 456, 463 (CA9 2000); United States v. Kelly, supra, at 1240-1241 (CA10); United States v. Palmer, 296 F. 3d, at 1146 (CADC); see also 290 F. 3d, at 1273, 1274 (case below) (suggesting that courts provide such warnings).

No one here contests the lawfulness of this judicially created requirement. The Government suggests that Federal Rule of Appellate Procedure 47 provides adequate underlying legal authority for the procedural practice. Brief for United States 42. It suggests that this Court has the authority to regulate the practice through “the exercise” of our “supervisory powers” over the Federal Judiciary. E. g., McNabb v. United States, 318 U. S. 332, 340-341 (1943). And it notes that limiting the courts’ authority to recharac-terize, approximately as the Courts of Appeals have done, “is likely to reduce and simplify litigation over questions of characterization, which are often quite difficult.” Brief for United States 42.

We agree with these suggestions. We consequently hold, as almost every Court of Appeals has already held, that the lower courts’ recharacterization powers are limited in the following way:

The limitation applies when a court recharacterizes a pro se litigant’s motion as a first § 2255 motion. In such circumstances the district court must notify the pro se litigant that it intends to recharacterize the pleading, warn the litigant that this recharacterization means that any subsequent §2255 motion will be subject to the restrictions on “second or successive” motions, and provide the litigant an opportunity to withdraw the motion or to amend it so that it contains all the § 2255 claims he believes he has. If the court fails to do so, the motion cannot be considered to have become a § 2255 motion for purposes of applying to later motions the law’s “second or successive” restrictions. § 2255, ¶ 8.

IV

The District Court that considered Castro’s 1994 motion failed to give Castro warnings of the kind we have described. Moreover, this Court’s “supervisory power” determinations normally apply, like other judicial decisions, retroactively, at least to the case in which the determination was made. McNabb, supra, at 347 (applying new supervisory rule to case before the Court). Hence, given our holding in Part III, supra, Castro’s 1994 motion cannot be considered a first §2255 motion, and his 1997 motion cannot be considered a “second or successive” motion — unless there is something special about Castro’s case.

The Government argues that there is something special: Castro failed to appeal the 1994 recharacterization. According to the Government, that fact makes the 1994 recharacter-ization valid as a matter of “law of the case.” And, since the 1994 recharacterization is valid, the 1997 § 2255 motion is Castro’s second, not his first.

We do not agree. No Circuit that has considered whether to treat a §2255 motion as successive (based on a prior unwarned recharacterization) has found that the litigant’s failure to challenge that recharacterization makes a difference. See Palmer, supra, at 1147; see also Henderson, 264 F. 3d, at 711-712; Raineri, 233 F. 3d, at 100; In re Shelton, supra, at 622. That is not surprising, for the very point of the warning is to help the pro se litigant understand not only (1) whether he should withdraw or amend his motion, but also (2) whether he should contest the recharacterization, say, on appeal. The “lack of warning” prevents his making an informed judgment in respect to the latter just as it does in respect to the former. Indeed, an unwarned pro se litigant’s failure to appeal a recharacterization simply underscores the practical importance of providing the warning. Hence, an unwarned recharacterization cannot count as a § 2255 motion for purposes of the “second or successive” provision, whether the unwarned pro se litigant does, or does not, take an appeal.

The law of the case doctrine cannot pose an insurmountable obstacle to our reaching this conclusion. Assuming for argument’s sake that the doctrine applies here, it simply “expresses” common judicial “practice”; it does not “limit” the courts’ power. See Messenger v. Anderson, 225 U. S. 436, 444 (1912) (Holmes, J.). It cannot prohibit a court from disregarding an earlier holding in an appropriate case which, for the reasons set forth, we find this case to be.

The judgment of the Court of Appeals is vacated, and the case is remanded for further proceedings consistent with this opinion.

So ordered.

Justice Scalia,

with whom Justice Thomas joins, concurring in part and concurring in the judgment.

I concur in Parts I and II of the Court’s opinion and in the judgment of the Court. I also agree that this Court’s consideration of Castro’s challenge to the status of his re-characterized motion is neither barred by nor necessarily resolved by the doctrine of law of the case.

I write separately because I disagree with the Court’s laissez-faire attitude toward recharacterization. The Court promulgates a new procedure to be followed if the district court desires the recharacterized motion to count against the pro se litigant as a first 28 U. S. C. § 2255 motion in later litigation. (This procedure, by the way, can be ignored with impunity by a court bent upon aiding pro se litigants at all costs; the only consequence will be that the litigants’ later §2255 submissions cannot be deemed “second or successive.”) The Court does not, however, place any limits on when recharacterization may occur, but to the contrary treats it as a routine practice which may be employed “to avoid an unnecessary dismissal,” “to avoid inappropriately stringent application of formal labeling requirements,” or “to create a better correspondence between the substance of a pro se motion’s claim and its underlying legal basis.” Ante, at 381-382. The Court does not address whether Castro’s motion filed under Federal Rule of Criminal Procedure 33 should have been recharacterized, and its discussion scrupulously avoids placing any limits on the circumstances in which district courts are permitted to recharacterize. That is particularly regrettable since the Court’s new recharacter-ization procedure does not include an option for the pro se litigant to insist that the district court rule on his motion as filed; and gives scant indication of what might be a meritorious ground for contesting the recharacterization on appeal.

In my view, this approach gives too little regard to the exceptional nature of recharacterization within an adversarial system, and neglects the harm that may be caused pro se litigants even when courts do comply with the Court’s newly minted procedure. The practice of judicial recharacterization of pro se litigants’ motions is a mutation of the principle that the allegations of a pro se litigant’s complaint are to be held “to less stringent standards than formal pleadings drafted by lawyers.” Haines v. Kerner, 404 U. S. 519, 520 (1972) (per curiam). “Liberal construction” of pro se pleadings is merely an embellishment of the notice-pleading standard set forth in the Federal Rules of Civil Procedure, and thus is consistent with the general principle of American jurisprudence that “the party who brings a suit is master to decide what law he will rely upon.” The Fair v. Kohler Die & Specialty Co., 228 U. S. 22, 25 (1913). Our adversary system is designed around the premise that the parties know what is best for them, and are responsible for advancing the facts and arguments entitling them to relief.

Recharacterization is unlike “liberal construction,” in that it requires a court deliberately to override the pro se litigant’s choice of procedural vehicle for his claim. It is thus a paternalistic judicial exception to the principle of party self-determination, born of the belief that the “parties know better” assumption does not hold true for pro se prisoner litigants.

I am frankly not enamored of any departure from our traditional adversarial principles. It is not the job of a federal court to create a “better correspondence” between the substance of a claim and its underlying procedural basis. But if departure from traditional adversarial principles is to be allowed, it should certainly not occur in any situation where there is a risk that the patronized litigant will be harmed rather than assisted by the court’s intervention. It is not just a matter of whether the litigant is more likely, or even much more likely, to be helped rather than harmed. For the overriding rule of judicial intervention must be “First, do no harm.” The injustice caused by letting the litigant’s own mistake lie is regrettable, but incomparably less than the injustice of producing prejudice through the court’s intervention.

The risk of harming the litigant always exists when the court recharacterizes into a first §2255 motion a claim that is procedurally or substantively deficient in the manner filed. The court essentially substitutes the litigant’s ability to bring his merits claim now, for the litigant’s later ability to bring the same claim (or any other claim), perhaps with stronger evidence. For the later § 2255 motion will then be burdened by the limitations on second or successive petitions imposed by the Antiterrorism and Effective Death Penalty Act of 1996, 110 Stat. 1214. A pro se litigant whose non-§2255 motion is dismissed on procedural grounds and one whose recharacterized §2255 claim is denied on the merits both end up as losers in their particular actions, but the loser on procedure is better off because he is not stuck with the consequences of a § 2255 motion that he never filed.

It would be an inadequate response to this concern to state that district courts should recharacterize into first § 2255 motions only when doing so is (1) procedurally necessary (2) to grant relief on the merits of the underlying claim. Ensuring that these conditions are met would often enmesh district courts in fact- and labor-intensive inquiries. It is an inefficient use of judicial resources to analyze the merits of every claim brought by means of a questionable procedural vehicle simply in order to determine whether to recharacterize— particularly in the common situation in which entitlement to relief turns on resolution of disputed facts. Moreover, even after that expenditure of effort the district court cannot be certain it is not prejudicing the litigant: the court of appeals may not agree with it on the merits of the claim.

In other words, even fully informed district courts that try their best not to harm pro se litigants by recharacterizing may nonetheless end up doing so because they cannot predict and protect against every possible adverse effect that may flow from recharacterization. But if district courts are unable to provide this sort of protection', they should not re-characterize into first §2255 motions at all. This option is available under the Court’s opinion, even though the opinion does not prescribe it.

The Court today relieves Castro of the consequences of the recharacterization (to wit, causing his current § 2255 motion to be dismissed as “second or successive”) because he was not given the warning that its opinion prescribes. I reach the same result for a different reason. Even if one does not agree with me that, because of the risk involved, pleadings should never be recharacterized into first §2255 motions, surely one must agree that running the risk is unjustified when there is nothing whatever to be gained by the recharacterization. That is the situation here. Castro’s Rule 33 motion was valid as a procedural matter, and the claim it raised was no weaker on the merits when presented under Rule 33 than when presented under §2255. The re-characterization was therefore unquestionably improper, and Castro should be relieved of its consequences.

Accordingly, I concur in the judgment of the Court.


author: Justice O’Connor

text:
    SECURITIES AND EXCHANGE COMMISSION v. EDWARDS
    No. 02-1196.
    Argued November 4, 2003
    Decided January 13, 2004

      O’Connor, J., delivered the opinion for a unanimous Court.

      Solicitor General Olson argued the cause for petitioner. With him on the briefs were Deputy Solicitor General Kneedler, Matthew D. Roberts, Meyer Eisenberg, Jacob H. Stillman, and Susan S. McDonald.

      Michael K. Wolensky argued the cause for respondent. With him on the brief was Ethan H. Cohen

      Briefs of amici curiae urging reversal were filed for AARP by Stacy Canan, Deborah M. Zuckerman, and Michael R. Schuster; for the North American Securities Administrators Association, Inc., by Mark J. Davis;
        for the Public Investors Arbitration Bar Association, Inc., by Joseph C. Long; and for Securities Regulators for the State of Florida et al. by Cynthia K. Maynard.

   Justice O’Connor

delivered the opinion of the Court.

“Opportunity doesn’t always knock . . . sometimes it rings.” App. 113 (ETS Payphones promotional brochure). And sometimes it hangs up. So it did for the 10,000 people who invested a total of $300 million in the payphone sale- and-leaseback arrangements touted by respondent under that slogan. The Securities and Exchange Commission (SEC) argues that the arrangements were investment contracts, and thus were subject to regulation under the federal securities laws. In this case, we must decide whether a moneymaking scheme is excluded from the term “investment contract” simply because the scheme offered a contractual entitlement to a fixed, rather than a variable, return.

I

Respondent Charles Edwards was the chairman, chief executive officer, and sole shareholder of ETS Payphones, Inc. (ETS). ETS, acting partly through a subsidiary also controlled by respondent, sold payphones to the public via independent distributors. The payphones were offered packaged with a site lease, a 5-year leaseback and management agreement, and a buyback agreement. All but a tiny fraction of purchasers chose this package, although other management options were offered. The purchase price for the payphone packages was approximately $7,000. Under the leaseback and management agreement, purchasers received $82 per month, a 14% annual return. Purchasers were not involved in the day-to-day operation of the payphones they owned. ETS selected the site for the phone, installed the, equipment, arranged for connection and long-distance service, collected coin revenues, and maintained and repaired the phones. Under the buyback agreement, ETS promised to refund the full purchase price of the package at the end of the lease or within 180 days of a purchaser’s request.

In its marketing materials and on its Web site, ETS trumpeted the “incomparable pay phone” as “an exciting business opportunity,” in which recent deregulation had “open[ed] the door for profits for individual pay phone owners and operators.” According to ETS, “[v]ery few business opportunities can offer the potential for ongoing revenue generation that is available in today’s pay telephone industry.” App. 114-115 (ETS brochure); id., at 227 (ETS Web site); see id., at 13 (Complaint ¶¶ 37-38).

The payphones did not generate enough revenue for ETS to make the payments required by the leaseback agreements, so the company depended on funds from new investors to meet its obligations. In September 2000, ETS filed for bankruptcy protection. The SEC brought this civil enforcement action the same month. It alleged that respondent and ETS had violated the registration requirements of §§ 5(a) and (c) of the Securities Act of 1933, 68 Stat. 684, 15 U. S. C. §§ 77e(a), (c), the antifraud provisions of both § 17(a) of the Securities Act of 1933, 114 Stat. 2763A-452, 15 U. S. C. § 77q(a), and § 10(b) of the Securities Exchange Act of 1934, 48 Stat. 891, as amended, 114 Stat. 2763A-454, 15 U. S. C. § 78j(b), and Rule 10b-5 thereunder, 17 CFR § 240.10b-5 (2003). The District Court concluded that the payphone sale-and-leaseback arrangement was an investment contract within the. meaning of, and therefore was subject to, the federal securities laws. SEC v. ETS Payphones, Inc., 123 F. Supp. 2d 1349 (ND Ga. 2000). The Court of Appeals reversed. 300 F. 3d 1281 (CA11 2002) (per curiam). It held that respondent’s scheme was not an investment contract, on two grounds. First, it read this Court’s opinions to require that an investment contract offer either capital appreciation or a participation in the earnings of the enterprise, and thus to exclude schemes, such as respondent’s, offering a fixed rate of return. Id., at 1284-1285. Second, it held that our opinions’ requirement that the return on the investment be “derived solely from the efforts of others” was not satisfied when the purchasers had a contractual entitlement to the réturn. Id., at 1285. We conclude that it erred on both grounds.

II

“Congress’ purpose in enacting the securities laws was to regulate investments, in whatever form they are made and by whatever name they are called.” Reves v. Ernst & Young, 494 U. S. 56, 61 (1990). To that end, it enacted a broad definition of “security,” sufficient “to encompass virtually any instrument that might be sold as an investment.” Ibid. Section 2(a)(1) of the 1933 Act, 15 U. S. C. § 77b(a)(l), and § 3(a)(10) of the 1934 Act, 15 U. S. C. §78c(a)(10), in slightly different formulations which we have treated as essentially identical in meaning, Reves, supra, at 61, n. 1, define “security” to include “any note, stock, treasury stock, security future, bond, debenture,... investment contract,... [or any] instrument commonly known as a ‘security.’” “Investment contract” is not itself defined.

The test for whether a particular scheme is an investment contract was established in our decision in SEC v. W. J. Howey Co., 328 U. S. 293 (1946). We look to “whether the scheme involves an investment of money in a common enterprise with profits to come solely from the efforts of others.” Id., at 301. This definition “embodies a flexible rather than a static principle, one that is capable of adaptation to meet the countless and variable schemes devised by those who seek the use of the money of others on the promise of profits.” Id., at 299.

In reaching that result, we first observed that when Congress included “investment contract” in the definition of security, it “was using a term the meaning of which had been crystallized’' by the state courts’ interpretation of their “‘blue sky’” laws. Id., at 298. (Those laws were the precursors to federal securities regulation and were so named, it seems, because they were “aimed at promoters who ‘would sell building lots in the blue sky in fee simple.’ ” 1 L. Loss & J. Seligman, Securities Regulation 36, 31-43 (3d ed. 1998) (quoting Mulvey, Blue Sky Law, 36 Can. L. Times 37 (1916)).) The state courts had defined an investment contract as “a contract or scheme for ‘the placing of capital or laying out of money in a way intended to secure income or profit from its employment,”’ and had “uniformly applied” that definition to “a variety of situations where individuals were led to invest money in a common enterprise with the expectation that they would earn a profit solely through the efforts of the promoter or [a third party].” Howey, supra, at 298 (quoting State v. Gopher Tire & Rubber Co., 146 Minn. 52, 56, 177 N. W. 937, 938 (1920)). Thus, when we held that “profits” must “come solely from the efforts of others,” we were speaking of the profits that investors seek on their investment, not the profits of the scheme in which they invest. We used “profits” in the sense of income or return, to include, for example, dividends, other periodic payments, or the increased value of the investment.

There is no reason to distinguish between promises of fixed returns and promises of variable returns for purposes of the test, so understood. In both cases, the investing public is attracted by representations of investment income, as purchasers were in this case by ETS’ invitation to “ ‘watch the profits add up.’ ” App. 13 (Complaint ¶ 38). Moreover, investments pitched as low risk (such as those offering a “guaranteed” fixed return) are particularly attractive to individuals more vulnerable to investment fraud, including older and less sophisticated investors. See 2 S. Rep. No. 102-261, App., p. 326 (1992) (Staff Summary of Federal Trade Commission Activities Affecting Older Consumers). Under the reading respondent advances, unscrupulous marketers of investments could evade the securities laws by picking a rate of return to promise. We will not read into the securities laws a limitation not compelled by the language that would so undermine the laws’ purposes.

Respondent protests that including investment schemes promising a fixed return among investment contracts conflicts with our precedent. We disagree. No distinction between fixed and variable returns was drawn in the blue sky law cases that the Howey Court used, in formulating the test, as its evidence of Congress’ understanding of the term. 328 U. S., at 298, and n. 4. Indeed, two of those cases involved an investment contract in which a fixed return was promised. People v. White, 124 Cal. App. 548, 550-551, 12 P. 2d 1078, 1079 (1932) (agreement between defendant and investors stated that investor would give defendant $5,000, and would receive $7,500 from defendant one year later); Stevens v. Liberty Packing Corp., 111 N. J. Eq. 61, 62-63, 161 A. 193, 193-194 (1932) (“ironclad contract” offered by defendant to investors entitled investors to $56 per year for 10 years on initial investment of $175, ostensibly in sale and leaseback of breeding rabbits).

None of our post-Howey decisions is to the contrary. In United Housing Foundation, Inc. v. Forman, 421 U. S. 837 (1975), we considered whether “shares” in a nonprofit housing cooperative were investment contracts under the securities laws. We identified the “touchstone" of an investment contract as “the presence of an investment in a common venture premised on a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others,” and then laid out two examples of investor interests that we had previously found to be “profits.” Id., at 852. Those were “capital appreciation resulting from the development of the initial investment” and “participation in earnings resulting from the use of investors’ funds.” Ibid. We contrasted those examples, in which “the investor is ‘attracted solely by the prospects of a return’ ” on the investment, with housing cooperative shares, regarding which the purchaser “is motivated by a desire to use or consume the item purchased.” Id., at 852-853 (quoting Howey, supra, at 300). Thus, Forman supports the commonsense understanding of “profits” in the Howey test as simply “financial returns on... investments.” 421 U. S., at 853.

Concededly, Forman’s illustrative description of prior decisions on “profits” appears to have been mistaken for an exclusive list in a case considering the scope of a different term in the definition of a security, “note.” See Reves, 494 U. S., at 68, n. 4. But that was a misreading of Forman, and we will not bind ourselves unnecessarily to passing dictum that would frustrate Congress’ intent to regulate all of the “countless and variable schemes devised by those who seek the use of the money of others on the promise of profits.” Howey, supra, at 299.

Given that respondent’s position is supported neither by the purposes of the securities laws nor by our precedents, it is no surprise that the SEC has consistently taken the opposite position, and maintained that a promise of a fixed return does not preclude a scheme from being an. investment contract. It has done so in formal adjudications, e. g., In re Abbott, Sommer & Co., 44 S. E. C. 104 (1969) (holding that mortgage notes, sold with a package of management services and a promise to repurchase the notes in the event of default, were investment contracts); see also In re Union Home Loans (Dec. 16, 1982), 26 S. E. C. Docket 1517, 1519 (report and order regarding settlement, stating that sale of promissory notes secured by deeds of trust, coupled with management services and providing investors “a specified percentage return on their investment,” were investment contracts), and in enforcement actions, e. g., SEC v. Universal Service Assn., 106 F. 2d 232, 234, 237 (CA7-1939) (accepting SEC’s position that an investment scheme promising “assured profit of 30% per annum with no chance of risk or loss to the contributor” was a security because it satisfied the pertinent substance of the Howey test, “‘[t]he investment of money with the expectation of profit through the efforts of other persons’ ”); see also SEC v. American Trailer Rentals Co., 379 U. S. 594, 598 (1965) (noting that “the SEC advised” the respondent that its “sale and lease-back arrangements,” in which investors received “a set 2% of their investment per month for 10 years,” “were investment contracts and therefore securities” under the 1933 Act).

The Eleventh Circuit’s perfunctory alternative holding, that respondent’s scheme falls outside the definition because purchasers had a contractual entitlement to a return, is incorrect and inconsistent with our precedent. We are considering investment contracts. The fact that investors have bargained for a return on their investment does not mean that the return is not also expected to come solely from the efforts of others. Any other conclusion would conflict with our holding that an investment contract was offered in Howey itself. 328 U. S., at 295-296 (service contract entitled investors to allocation of net profits).

We hold that an investment scheme promising a fixed rate of return can be an “investment contract” and thus a “security” subject to the federal securities laws. The judgment of the United States Court of Appeals for the Eleventh Circuit is reversed, and the case is remanded for further proceedings consistent with this opinion.

It is so ordered.

       Because the Court of Appeals ordered the complaint dismissed, we treat the case as we would an appeal from a successful motion to dismiss and accept as true the allegations in the complaint. SEC v. Zandford, 535 U. S. 813, 818 (2002); Saudi Arabia v. Nelson, 507 U. S. 349, 351, 354 (1993).


author: Justice Scalia Justice Stevens,

text:
    VERIZON COMMUNICATIONS INC. v. LAW OFFICES OF CURTIS V. TRINKO, LLP
    No. 02-682.
    Argued October 14, 2003
    Decided January 13, 2004

      Scalia, J., delivered the opinion of the Court, in which Rehnquist, C. J., and O’Connor, Kennedy, Ginsburg, and Breyer, JJ., joined. Stevens, J., filed an opinion concurring in the judgment, in which Souter and Thomas, JJ., joined, post, p. 416.

      Richard G. Taranto argued the cause for petitioner. With him on the briefs were John Thorne, Michael K. Kellogg, Mark C. Hansen, Aaron M. Panner, and Henry B. Gutman.

      Solicitor General Olson argued the cause States et al. as amici curiae urging reversal. With him on the brief were Acting Assistant Attorney General Pate, Deputy Solicitor General Clement, Jeffrey A. Lamken, Catherine G. O’Sullivan, Nancy C. Garrison, and David Seidman.

      Donald B. Verrilli, Jr., argued the cause for respondent. With him on the brief were Alice Mclnerney, Bruce V. Spiva, Ian Heath Gershengorn, Marc A. Goldman, Elaine J. Goldenberg, and Chester T. Kamin.

      Briefs of amici curiae urging reversal were filed for the Commonwealth of Virginia et al. by Jerry W. Kilgore, Attorney General of Virginia, William H. Hurd, State Solicitor, Maureen Riley Matsen and William E. Thro, Deputy State Solicitors, Judith Williams Jagdmann, Deputy Attorney General, C. Meade Browder, Jr., Senior Assistant Attorney General, and Sarah Oxenham Allen and Raymond L. Doggett, Jr., Assistant Attorneys General, and by the Attorneys General for their respective States as follows: William H. Pryor, Jr., of Alabama, M. Jane Brady of Delaware, Steve Carter of Indiana, Jon Bruning of Nebraska, Peter W. Heed of New Hampshire, W. A. Drew Edmondson of Oklahoma, and Mark L. Shurtleff of Utah; for BellSouth Corp. et al. by Stephen M. Shapiro, John E. Muench, Jeffrey W. Sarles, Marc Gary, Marc W. F. Galonsky, and William M. Schur; for the Communications Workers of America by Patrick M. Scanlon, Andrew D. Roth, and Laurence Gold; for the Telecommunications Industry Association by Donald I. Baker; for United Parcel Service, Inc., et al. by Drew S. Days III, W. Stephen Smith, Beth S. Brinkmann, Paul T. Friedman, and Peter M. Kreindler; for the United States Telecom Association by William T. Lake, James F. Rill, James W. Olson, and Michael T. McMenamin; and for the Washington Legal Foundation by Steven G. Bradbury, Daniel J. Popeo, and David A Price.

      Briefs of amici curiae urging affirmance were filed for the State of New York et al. by Eliot Spitzer, Attorney General of New York, Caitlin J. Halligan, Solicitor General, Michelle Aronowitz, Deputy Solicitor General, Daniel J. Chepaitis, Assistant Solicitor General, and Jay L. Himes, Susanna M. Zwerling, Richard L. Schwartz, and Keith H. Gordon, Assistant Attorneys General, by Robert J. Spagnoletti, Corporation Counsel of the District of Columbia, and by the Attorneys General for their respective jurisdictions as follows: Terry Goddard of Arizona, Richard Blumen-thal of Connecticut, G. Steven Rowe of Maine, J Joseph Curran, Jr., of Maryland, Michael A Cox of Michigan, Mike Hatch of Minnesota, Jeremiah W. (Jay) Nixon of Missouri, Mike McGrath of Montana, Hardy Myers of Oregon, Anabelle Rodriguez of Puerto Rico, William Sorrell of Vermont, Darrell V. McGraw, Jr., of West Virginia, and Peggy A Lauten-schlager of Wisconsin; for Allegiance Telecom, Inc., et al. by Richard M. Rindler, Eric J. Branfman, Rebecca P. Dick, Christopher A Holt, and Richard Metzger; for the American Antitrust Institute by Jonathan L. Rubin and Albert A Foer; for AT&T Corp. et al. by David W. Carpenter and Stephen T. Perkins; for the Consumers Union et al. by Michael D. McNeely and Patrick J. O’Connor; for Covad Communications Co., Inc., by Alfred C. Pfeiffer, Jr.; for Economics Professors by Carter G. Phillips and C. Frederick Beckner III; for Law Professors by Steven Semeraro; for the National Association of State Utility Consumer Advocates by Gerald A Norlander and Robert S. Tongren; and for Z-Tel Technologies, Inc., by Christopher J. Wright.

        Robert H. Bork filed a brief for the Project to Promote Competition and Innovation in the Digital Age as amicus curiae.

   Justice Scalia

delivered the opinion of the Court.

The Telecommunications Act of 1996, Pub. L. 104-104, 110 Stat. 56, imposes certain duties upon incumbent local telephone companies in order to facilitate market entry by competitors, and establishes a complex regime for monitoring and enforcement. In this case we consider whether a complaint alleging breach of the incumbent’s duty under the 1996 Act to share its network with competitors states a claim under § 2 of the Sherman Act, 26 Stat. 209.

Petitioner Verizon Communications Inc. is the incumbent local exchange carrier (LEC) serving New York State. Before the 1996 Act, Verizon, like other incumbent LECs, enjoyed an exclusive franchise within its local service area. The 1996 Act sought to “uproo[t]” the incumbent LECs’ monopoly and to introduce competition in its place. Verizon Communications Inc. v. FCC, 535 U. S. 467, 488 (2002). Central to the scheme of the Act is the incumbent LEC’s obligation under 47 U. S. C. § 251(c) to share its network with competitors, see AT&T Corp. v. Iowa Utilities Bd., 525 U. S. 366, 371 (1999), including provision of access to individual elements of the network on an “unbundled” basis. § 251(c)(3). New entrants, so-called competitive LECs, resell these unbundled network elements (UNEs), recombined with each other or with elements belonging to the LECs.

Verizon, like other incumbent LECs, has taken two significant steps within the Act’s framework in the direction of increased competition. First, Verizon has signed interconnection agreements with rivals such as AT&T, as it is obliged to do under § 252, detailing the terms on which it will make its network elements available. (Because Verizon and AT&T could not agree upon terms, the open issues were subjected to compulsory arbitration under §§ 252(b) and (c).) In 1997, the state regulator, New York’s Public Service Commission (PSC), approved Verizon’s interconnection agreement with AT&T.

Second, Verizon has taken advantage of the opportunity provided by the 1996 Act for incumbent LECs to enter the long-distance market (from which they had long been excluded). That required Verizon to satisfy, among other things, a 14-item checklist of statutory requirements, which includes compliance with the Act’s network-sharing duties. §§ 271(d)(3)(A) and (c)(2)(B). Checklist item two, for example, includes “[n]ondiscriminatory access to network elements in accordance with the requirements” of § 251(c)(3). § 271(c)(2)(B)(ii). Whereas the state regulator approves an interconnection agreement, for long-distance approval the incumbent LEC applies to the Federal Communications Commission (FCC). In December 1999, the FCC approved Verizon’s § 271 application for New York.

Part of Verizon’s UNE obligation under § 251(c)(3) is the provision of access to operations support systems (OSS), a set of systems used by incumbent LECs to provide services to customers and ensure quality. Verizon’s interconnection agreement and long-distance authorization each specified the mechanics by which its OSS obligation would be met. As relevant here, a competitive LEC sends orders for service through an electronic interface with Verizon’s ordering system, and as Verizon completes certain steps in filling the order, it sends confirmation back through the same interface. Without OSS access a rival cannot fill its customers’ orders.

In late 1999, competitive LECs complained to regulators that many orders were going unfilled, in violation of Verizon’s obligation to provide access to OSS functions. The PSC and FCC opened parallel investigations, which led to a series of orders by the PSC and a consent decree with the FCC. Under the FCC consent decree, Verizon undertook to make a “voluntary contribution” to the U. S. Treasury in the amount of $3 million, 15 FCC Red. 5415,5421, ¶ 16 (2000); under the PSC orders, Verizon incurred liability to the competitive LECs in the amount of $10 million. Under the consent decree and orders, Verizon was subjected to new performance measurements and new reporting requirements to the FCC and PSC, with additional penalties for continued noncompliance. In June 2000, the FCC terminated the consent decree. Enforcement Bureau Announces that Bell Atlantic Has Satisfied Consent Decree Regarding Electronic Ordering Systems in New York (June 20, 2000), http://www. fcc.gov/eb/News_Releases/bellatlet.html (all Internet materials as visited Dec. 12,2003, and available in Clerk of Court’s case file). The next month the PSC relieved Verizon of the heightened reporting requirement. Order Addressing OSS Issues, MCI WorldCom, Inc. v. Bell Atlantic-New York, Nos. 00-C-0008, 00-C-0009, 99-C-0949, 2000 WL 1531916 (N. Y. PSC, July 27, 2000).

Respondent Law Offices of Curtis V. Trinko, LLP, a New York City law firm, was a local telephone service customer of AT&T. The day after Verizon entered its consent decree with the FCC, respondent filed a complaint in the District Court for the Southern District of New York, on behalf of itself and a class of similarly situated customers. See App. 12-33. The complaint, as later amended, id., at 34-50, alleged that Verizon had filled rivals’ orders on a discriminatory basis as part of an anticompetitive scheme to discourage customers from becoming or remaining customers of competitive LECs, thus impeding the competitive LECs’ ability to enter and compete in the market for local telephone service. See, e.g., id., at 34-35, 46-47, ¶¶1, 2, 52, 54. According to the complaint, Verizon “has filled orders of [competitive LEC] customers after filling those for its own local phone service, has failed to fill in a timely manner, or not at all, a substantial number of orders for [competitive LEC] customers . .. , and has systematically failed to inform [competitive LECs] of the status of their customers’ orders.” Id., at 39, ¶ 21. The complaint set forth a single example of the alleged “failure to provide adequate access to [competitive LECs],” namely, the OSS failure that resulted in the FCC consent decree and PSC orders. Id., at 40, ¶ 22. It asserted that the result of Verizon’s improper “behavior with respect to providing access to its local loop” was to “deter potential customers [of rivals] from switching.” Id., at 35, 47, ¶¶ 2, 67. The complaint sought damages and injunctive relief for violation of § 2 of the Sherman Act, 15 U. S. C. § 2, pursuant to the remedy provisions of §§ 4 and 16 of the Clayton Act, 38 Stat. 731, as amended, 15 U. S. C. §§ 15, 26. The complaint also alleged violations of the 1996 Act, § 202(a) of the Communications Act of 1934, 48 Stat. 1064, as amended, 47 U. S. C. § 151 et seq., and state law.

The District Court dismissed the complaint in its entirety. As to the antitrust portion, it concluded that respondent’s allegations of deficient assistance to rivals failed to satisfy the requirements of § 2. The Court of Appeals for the Second Circuit reinstated the complaint in part, including the antitrust claim. 305 F. 3d 89, 113 (2002). We granted certiorari, limited to the question whether the Court of Appeals erred in reversing the District Court’s dismissal of respondent’s antitrust claims. 538 U. S. 905 (2003).

II

To decide this case, we must first determine what effect (if any) the 1996 Act has upon the application of traditional antitrust principles. The Act imposes a large number of duties upon incumbent LECs — above and beyond those basic responsibilities it imposes upon all carriers, such as assuring number portability and providing access to rights-of-way, see 47 U. S. C. §§ 261(b)(2), (4). Under the sharing duties of § 261(c), incumbent LECs are required to offer three kinds of access. Already noted, and perhaps most intrusive, is the duty to offer access to UNEs on “just, reasonable, and nondiscriminatory” terms, § 251(c)(3), a phrase that the FCC has interpreted to mean a price reflecting long-run incremental cost. See Verizon Communications Inc. v. FCC, 535 U. S., at 495-496. A rival can interconnect its own facilities with those of the incumbent LEC, or it can simply purchase services at wholesale from the incumbent and resell them to consumers. See §§ 251(c)(2), (4). The Act also imposes upon incumbents the duty to allow physical “collocation” — that is, to permit a competitor to locate and install its equipment on the incumbent’s premises — which makes feasible interconnection and access to UNEs. See § 251(c)(6).

That Congress created these duties, however, does not automatically lead to the conclusion that they can be enforced by means of an antitrust claim. Indeed, a detailed regulatory scheme such as that created by the 1996 Act ordinarily raises the question whether the regulated entities are not shielded from antitrust scrutiny altogether by the doctrine of implied immunity. See, e. g., United States v. National Assn. of Securities Dealers, Inc., 422 U. S. 694 (1975); Gordon v. New York. Stock Exchange, Inc., 422 U. S. 659 (1975). In some respects the enforcement scheme set up by the 1996 Act is a good candidate for implication of antitrust immunity, to avoid the real possibility of judgments conflicting with the agency’s regulatory scheme “that might be voiced by courts exercising jurisdiction under the antitrust laws.” United States v. National Assn. of Securities Dealers, Inc., supra, at 734.

Congress, however, precluded that interpretation. Section 601(b)(1) of the 1996 Act is an antitrust-specific saving clause providing that “nothing in this Act or the amendments made by this Act shall be construed to modify, impair, or supersede the applicability of any of the antitrust laws.” 110 Stat. 143, 47 U. S. C. § 152, note. This bars a finding of implied immunity. As the FCC has put the point, the saving clause preserves those “claims that satisfy established antitrust standards.” Brief for United States and the Federal Communications Commission as Amici Curiae Supporting Neither Party in No. 02-7057, Covad Communications Co. v. Bell Atlantic Corp. (CADC), p. 8.

But just as the 1996 Act preserves claims that satisfy existing antitrust standards, it does not create new claims that go beyond existing antitrust standards; that would be equally inconsistent with the saving clause’s mandate that nothing in the Act “modify, impair, or supersede the applicability” of the antitrust laws. We turn, then, to whether the activity of which respondent complains violates pre-existing antitrust standards.

Ill

The complaint alleges that Verizon denied interconnection services to rivals in order to limit entry. If that allegation states an antitrust claim at all, it does so under §2 of the Sherman Act, 15 U. S. C. § 2, which declares that a firm shall not “monopolize” or “attempt to monopolize.” Ibid. It is settled law that this offense requires, in addition to the possession of monopoly power in the relevant market, “the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.” United States v. Grinnell Corp., 384 U. S. 563, 570-571 (1966). The mere possession of monopoly power, and the concomitant charging of monopoly prices, is not only not unlawful;.it is an important element of the free-market system. The opportunity to charge monopoly prices — at least for a short period— is what attracts “business acumen” in the first place; it induces risk taking that produces innovation and economic growth. To safeguard the incentive to innovate, the possession of monopoly power will not be found unlawful unless it is accompanied by an element of anticompetitive conduct.

Firms may acquire monopoly power by establishing an infrastructure that renders them uniquely suited to serve their customers. Compelling such firms to share the source of their advantage is in some tension with the underlying purpose of antitrust law, since it may lessen the incentive for the monopolist, the rival, or both to invest in those economically beneficial facilities. Enforced sharing also requires antitrust courts to act as central planners, identifying the proper price, quantity, and other terms of dealing — a role for which they are ill suited. Moreover, compelling negotiation between competitors may facilitate the supreme evil of antitrust: collusion. Thus, as a general matter, the Sherman Act “does not restrict the long recognized right of [a] trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal.” United States v. Colgate & Co., 250 U. S. 300, 307 (1919).

However, “[t]he high value that we have placed on the right to refuse to deal with other firms does not mean that the right is unqualified.” Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U. S. 585, 601 (1985). Under certain circumstances, a refusal to cooperate with rivals can constitute anticompetitive conduct and violate § 2. We have been very cautious in recognizing such exceptions, because of the uncertain virtue of forced sharing and the difficulty of identifying and remedying anticompetitive conduct by a single firm. The question before us today is whether the allegations of respondent’s complaint fit within existing exceptions or provide a basis, under traditional antitrust principles, for recognizing a new one.

The leading case for § 2 liability based on refusal to cooperate with a rival, and the case upon which respondent understandably places greatest reliance, is Aspen Skiing, supra. The Aspen ski area consisted of four mountain areas. The defendant, who owned three of those areas, and the plaintiff, who owned the fourth, had cooperated for years in the issuance of a joint, multiple-day, áll-area ski ticket. After repeatedly demanding an increased share of the proceeds, the defendant canceled the joint ticket. The plaintiff, concerned that skiers would bypass its mountain without some joint offering, tried a variety of increasingly desperate measures to re-create the joint ticket, even to the point of in effect offering to buy the defendant’s tickets at retail price. Id., at 593-594. The defendant refused even that. We upheld a jury verdict for the plaintiff, reasoning that “[t]he jury may well have concluded that [the defendant] elected to forgo these short-run benefits because it was more interested in reducing competition . . . over the long run by harming its smaller competitor.” Id., at 608.

Aspen Skiing is at or near the outer boundary of § 2 liability. The Court there found significance in the defendant’s decision to cease participation in a cooperative venture. See id., at 608, 610-611. The unilateral termination of a voluntary (and thus presumably profitable) course of dealing suggested a willingness to forsake short-term profits to achieve an anticompetitive end. Ibid. Similarly, the defendant’s unwillingness to renew the ticket even if compensated at retail price revealed a distinctly anticompetitive bent.

The refusal to deal alleged in the present case does not fit within the limited exception recognized in Aspen Skiing. The complaint does not allege that Verizon voluntarily engaged in a course of dealing with its rivals, or would ever have done so absent statutory compulsion. Here, therefore, the defendant’s prior conduct sheds no light upon the motivation of its refusal to deal — upon whether its regulatory lapses were prompted not by competitive zeal but by anticompetitive malice. The contrast between the cases is heightened by the difference in pricing behavior. In Aspen Skiing, the defendant turned down a proposal to sell at its own retail price, suggesting a calculation that its future monopoly retail price would be higher. Verizon’s reluctance to interconnect at the cost-based rate of compensation available under § 251(c)(3) tells us nothing about dreams of monopoly.

The specific nature of what the 1996 Act compels makes this case different from Aspen Skiing in a more fundamental way. In Aspen Skiing, what the defendant refused to provide to its competitor was a product that it already sold at retail — to oversimplify slightly, lift tickets representing a bundle of services to skiers. Similarly, in Otter Tail Power Co. v. United States, 410 U. S. 366 (1973), another case relied upon by respondent, the defendant was already in the business of providing a service to certain customers (power transmission over its network), and refused to provide the same service to certain other customers. Id:, at 370-371, 377-378. In the present case, by contrast, the services allegedly withheld are not otherwise marketed or available to the public. The sharing obligation imposed by the 1996 Act created “something brand new” — “the wholesale market for leasing network elements.” Verizon Communications Inc. v. FCC, 535 U. S., at 528. The unbundled elements offered pursuant to § 251(c)(3) exist only deep within the bowels of Verizon; they are brought out on compulsion of the 1996 Act and offered not to consumers but to rivals, and at considerable expense and effort. New systems must be designed and implemented simply to make that access possible — indeed, it is the failure of one of those systems that prompted the present complaint.

We conclude that Verizon’s alleged insufficient assistance in the provision of service to rivals is not a recognized antitrust claim under this Court’s existing refusal-to-deal precedents. This conclusion would be unchanged even if we considered to be established law the “essential facilities” doctrine crafted by some lower courts, under which the Court of Appeals concluded respondent’s allegations might state a claim. See generally Areeda, Essential Facilities: An Epithet in Need of Limiting Principles, 58 Antitrust L. J. 841 (1989). We have never recognized such a doctrine, see Aspen Skiing Co., 472 U. S., at 611, n. 44; AT&T Corp. v. Iowa Utilities Bd., 525 U. S., at 428 (opinion of Breyer, J.), and we find no need either to recognize it or to repudiate it here. It suffices for present purposes to note that the indispensable requirement for invoking the doctrine is the unavailability of access to the “essential facilities”; where access exists, the doctrine serves no purpose. Thus, it is said that “essential facility claims should ... be denied where a state or federal agency has effective power to compel sharing and to regulate its scope and terms.” P. Areeda & H. Ho-venkamp, Antitrust Law, p. 150, ¶ 773e (2003 Supp.). Respondent believes that the existence of sharing duties under the 1996 Act supports its case. We think the opposite: The 1996 Act’s extensive provision for access makes it unnecessary to impose a judicial doctrine of forced access. To the extent respondent’s “essential facilities” argument is distinct from its general § 2 argument, we reject it.

IV

Finally, we do not believe that traditional antitrust principles justify adding the present case to the few existing exceptions from the proposition that there is no duty to aid competitors. Antitrust analysis must always be attuned to the particular structure and circumstances of the índústry at issue. Part of that attention to economic context is an awareness of the significance of regulation. As we have noted, “careful account must be taken of the pervasive federal and state regulation characteristic of the industry.” United States v. Citizens & Southern Nat. Bank, 422 U. S. 86, 91 (1975); see also IA P. Areeda & H. Hovenkamp, Antitrust Law, p. 12, ¶ 240c3 (2d ed. 2000). “[Antitrust analysis must sensitively recognize and reflect the distinctive economic and legal setting of the regulated industry to which it applies.” Concord v. Boston Edison Co., 915 F. 2d 17, 22 (CA1 1990) (Breyer, C. J.) (internal quotation marks omitted).

One factor of particular importance is the existence of a regulatory structure designed to deter and remedy anticom-petitive harm. Where such a structure exists, the additional benefit to competition provided by antitrust enforcement will tend to be small, and it will be less plausible that the antitrust laws contemplate such additional scrutiny. Where, by contrast, “[t]here is nothing built into the regulatory scheme which performs the antitrust function,” Silver v. New York Stock Exchange, 373 U. S. 341, 358 (1963), the benefits of antitrust are worth its sometimes considerable disadvantages. Just as regulatory context may in other cases serve as a basis for implied immunity, see, e. g., United States v. National Assn, of Securities Dealers, Inc., 422 U. S., at 730-735, it may- also be a consideration in deciding whether to recognize an expansion of the contours of §2.

The regulatory framework that exists in this case demonstrates how, in certain circumstances, “regulation significantly diminishes the likelihood of major antitrust harm.” Concord v. Boston Edison Co., supra, at 25. Consider, for example, the statutory restrictions upon Verizon’s entry into the potentially lucrative market for long-distance service. To be allowed to enter the long-distance market in the first place, an incumbent LEC must be on good behavior in its local market. Authorization by the FCC requires state-by-state satisfaction of §271’s competitive checklist, which as we have noted includes the nondiscriminatory provision of access to UNEs. Section 271 applications to provide long-distance service have now been approved for incumbent LECs in 47 States and the District of Columbia. See FCC Authorizes SBC to Provide Long Distance Service in Illinois, Indiana, Ohio and Wisconsin (Oct. 15, 2003), http://hraunfoss. fcc.gov/edocs_ public/attachmatch/DOC-239978Al.pdf.

The FCC’s § 271 authorization order for Verizon to provide long-distance service in New York discussed at great length Verizon’s commitments to provide access to UNEs, including the provision of OSS. In re Application by Bell Atlantic New York for Authorization Under Section 271 of the Communications Act To Provide In-Region, InterLATA Service in the State of New York, 15 FCC Red. 3953, 3989-4077, ¶¶ 82-228 (1999) (Memorandum Opinion and Order) (hereinafter In re Application). Those commitments are enforceable by the FCC through continuing oversight; a failure to meet an authorization condition can result in an order that the deficiency be corrected, in the imposition of penalties, or in the suspension or revocation of long-distance approval. See 47 U. S. C. § 271(d)(6)(A). Verizon also subjected itself to oversight by the PSC under a so-called “Performance Assurance Plan” (PAP). See In re New York Telephone Co., 197 P. U. R. 4th 266, 280-281 (N. Y. PSC, 1999) (Order Adopting the Amended PAP). The PAP, which by its terms became binding upon FCC approval, provides specific financial penalties in the event of Verizon’s failure to achieve detailed performance requirements. The FCC described Verizon’s having entered into a PAP as a significant factor in its § 271 authorization, because that provided “a strong financial incentive for post-entry compliance with the section 271 checklist,” and prevented “‘backsliding.’” In re Application 3958-3959, ¶¶8, 12.

The regulatory response to the OSS failure complained of in respondent’s suit provides a vivid example of how the regulatory regime operates. When several competitive LECs complained about deficiencies in Verizon’s servicing of orders, the FCC and PSC responded. The FCC soon concluded that Verizon was in breach of its sharing duties under § 251(c), imposed a substantial fine, and set up sophisticated measurements to gauge remediation, with weekly reporting requirements and specific penalties for failure. The PSC found Verizon in violation of the PAP even earlier, and imposed additional financial penalties and measurements with daily reporting requirements. In short, the regime was an effective steward of the antitrust function.

Against the slight benefits of antitrust intervention here, we must weigh a realistic assessment of its costs. Under the best of circumstances, applying the requirements of §2 “can be difficult” because “the means of illicit exclusion, like the means of legitimate competition, are myriad.” United States v. Microsoft Corp., 253 F. 3d 34, 58 (CADC 2001) (en banc) (per curiam). Mistaken inferences and the resulting false condemnations “are especially costly, because they chill the very conduct the antitrust laws are designed to protect.” Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U. S. 574, 594 (1986). The cost of false positives counsels against an undue expansion of §2 liability. One false-positive risk is that an incumbent LEC’s failure to provide a service with sufficient alacrity might have nothing to do with exclusion. Allegations of violations of § 251(c)(3) duties are difficult for antitrust courts to evaluate, not only because they are highly technical, but also because they are likely to be extremely numerous, given the incessant, complex, .and constantly changing interaction of competitive and incumbent LECs implementing the sharing and interconnection obligations. Amici States have filed a brief asserting that competitive LECs are threatened with “death by a thousand cuts,” Brief for New York et al. as Amici Curiae 10 (internal quotation marks omitted) — the identification of which would surely be a daunting task for a generalist antitrust court. Judicial oversight under the Sherman Act would seem destined to distort investment and lead to a new layer of interminable litigation, atop the variety of litigation routes already available to and actively pursued by competitive LECs.

Even if the problem of false positives did not exist, conduct consisting of anticompetitive violations of §251 may be, as we have concluded with respect to above-cost predatory pricing schemes, “beyond the practical ability of a judicial tribunal to control.” Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U. S. 209, 223 (1993). Effective remediation of violations of regulatory sharing requirements will ordinarily require continuing supervision of a highly detailed decree. We think that Professor Areeda got it exactly right: “No court should impose a duty to deal that it cannot explain or adequately and reasonably supervise. The problem should be deemed irremedia[ble] by antitrust law when compulsory access requires the court to assume the day-to-day controls characteristic of a regulatory agency.” Areeda, 58 Antitrust L. J., at 853. In this case, respondent has requested an equitable decree to “ [preliminarily and permanently enjoi[n] [Verizon] from providing access to the local loop market... to [rivals] on terms and conditions that are not as favorable” as those that Verizon enjoys. App. 49-50. An antitrust court is unlikely to be an effective day-to-day enforcer of these detailed sharing obligations.

* * *

The 1996 Act is, in an important respect, much more ambitious than the antitrust laws. It attempts “to eliminate the monopolies enjoyed by the inheritors of AT&T’s local franchises.” Verizon Communications Inc. v. FCC, 535 U. S., at 476 (emphasis added). Section 2 of the Sherman Act, by contrast, seeks merely to prevent unlawful monopolization. It would be a serious mistake to conflate the two goals. The Sherman Act is indeed the “Magna Carta of free enterprise,” United States v. Topco Associates, Inc., 405 U. S. 506, 610 (1972), but it does not give judges carte blanche to insist that a monopolist alter its way of doing business whenever some other approach might yield greater competition. We con-dude that respondent’s complaint fails to state a claim under the Sherman Act.

Accordingly, the judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.

It is so ordered.

Justice Stevens,

with whom Justice Souter and Justice Thomas join, concurring in the judgment.

In complex cases it is usually wise to begin by deciding whether the plaintiff has standing to maintain the action. Respondent, the plaintiff in this case, is a local telephone service customer of AT&T. Its complaint alleges that it has received unsatisfactory service because Verizon has engaged in conduct that adversely affects AT&T’s ability to serve its customers, in violation of § 2 of the Sherman Act. 15 U. S. C. §2. Respondent seeks from Verizon treble damages, a remedy that § 4 of the Clayton Act makes available to “any person who shall be injured in his business or property.” 15 U. S. C. § 15. The threshold question presented by the complaint is whether, assuming the truth of its allegations, respondent is a “person” within the meaning of § 4.

Respondent would unquestionably be such a “person” if we interpreted the text of the statute literally. But we have eschewed a literal reading of §4, particularly in cases in which there is only an indirect relationship between the defendant’s alleged misconduct and the plaintiff’s asserted injury. Associated Gen. Contractors of Cal., Inc. v. Carpenters, 459 U.S. 519, 529-535 (1983). In such cases, “the importance of avoiding either the risk of duplicate recoveries on the one hand, or the danger of complex apportionment of damages on the other,” weighs heavily against a literal reading of §4. Id., at 543-544. Our interpretation of §4 has thus adhered to Justice Holmes’ observation that the “general tendency of the law, in regard to damages at least, is .not to go beyond the first step.” Southern Pacific Co. v. Darnell-Taenzer Lumber Co., 245 U. S. 531, 533 (1918).

I would not go beyond the first step in this case. Although respondent contends that its injuries were, like the plaintiff’s injuries in Blue Shield of Va. v. McCready, 457 U. S. 465, 479 (1982), “the very means by which ... [Verizon] sought to achieve its illegal ends,” it remains the case that whatever antitrust injury respondent suffered because of Verizon’s conduct was purely derivative of the injury that AT&T suffered. And for that reason, respondent’s suit, unlike McCready, runs both the risk of duplicative recoveries and the danger of complex apportionment of damages. The task of determining the monetary value of the harm caused to respondent by AT&T’s inferior service, the portion of that harm attributable to Verizon’s misconduct, whether all or just some of such possible misconduct was prohibited by the Sherman Act, and what offset, if any, should be allowed to make room for a recovery that would make AT&T whole, is certain to be daunting. AT&T, as the direct victim of Verizon’s alleged misconduct, is in a far better position than respondent to vindicate the public interest in enforcement of the antitrust laws. Denying a remedy to AT&T’s customer is not likely to leave a significant antitrust violation undetected or unremedied, and will serve the strong interest “in keeping the scope of complex antitrust trials within judicially manageable limits.” Associated Gen. Contractors, 459 U. S., at 543.

In my judgment, our reasoning in Associated General Contractors requires us to reverse the judgment of the Court of Appeals. I would not decide the merits of the § 2 claim unless and until such a claim is advanced by either AT&T or a similarly situated competitive local exchange carrier.

       In 1996, NYNEX was the incumbent LEC for New York State. NYNEX subsequently merged with Bell Atlantic Corporation, and the merged entity retained the Bell Atlantic name; a further merger produced Verizon. We use “Verizon” to refer to NYNEX and Bell Atlantic as well.

       Order Directing Improvements To Wholesale Service Performance, MCI WorldCom, Inc. v. Bell Atlantic-New York, Nos. 00-C-0008, 00-C-0009, 2000 WL 363378 (N. Y. PSC, Feb. 11, 2000); Order Directing Market Adjustments and Amending Performance Assurance Plan, MCI WorldCom, Inc. v. Bell Atlantic-New York, Nos. 00-C-0008, 00-C-0009, 99-C-0949, 2000 WL 517633 (N. Y. PSC, Mar. 23, 2000); Order Addressing OSS Issues, MCI WorldCom, Inc. v. Bell Atlantic-New York, Nos. 00-C-0008, 00-C-0009, 99-C-0949, 2000 WL 1531916 (N. Y. PSC, July 27, 2000); In re Bell Atlantic-New York Authorization Under Section 271 of the Communications Act to Provide In-Region, InterLATA Service In the State of New York, 15 FCC Red. 5413 (2000) (Order); id., at 5415 (Consent Decree).

       Respondent also relies upon United States v. Terminal Railroad Assn, of St. Louis, 224 U. S. 383 (1912), and Associated Press v. United States, 326 U. S. 1 (1945). These eases involved concerted action, which presents greater anticompetitive concerns and is amenable to a remedy that does not require judicial estimation of free-market forces: simply requiring that the outsider be granted nondiscriminatory admission to the club.

       The Court of Appeals also thought that respondent’s complaint might state a claim under a “monopoly leveraging” theory (a theory barely discussed by respondent, see Brief for Respondent 24, n. 10). We disagree. To the extent the Court of Appeals dispensed with a requirement that there be a “dangerous probability of success” in monopolizing a second market, it erred, Spectrum Sports, Inc. v. McQuillan, 506 U. S. 447, 459 (1993). In any event, leveraging presupposes anticompetitive conduct, which in this case could only be the refusal-to-deal claim we have rejected.

       Our disposition makes it unnecessary to consider petitioner’s alternative contention that respondent lacks antitrust standing. See Steel Co. v. Citizens for Better Environment, 523 U. S. 83, 97, and n. 2 (1998); National Railroad Passenger Corporation v. National Assn. of Railroad Passengers, 414 U. S. 453, 456 (1974).