849 F. Supp. 2d 1055
D. Colo.2012Background
- Christou founded multiple Denver SOCO clubs (The Church, Vinyl, and others) and is affiliated with additional venues; the SOCO district centers on electronic dance music and live DJ performances.
- Beatport, co-founded by Roulier, operates an online EDM marketplace; Beta Nightclub is a Denver venue run by Beta and Roulier.
- Allegations claim Beatport and Beta leveraged Beatport’s market position to coerce DJs to perform only at Beta, foreclosing SOCO’s clubs from the market for A-list DJ performances.
- Plaintiffs assert nine claims including unlawful tying, monopolization, attempted monopolization, conspiracy, theft of trade secrets, and RICO; some claims target Beatport, Beta, and Roulier.
- Market definitions proposed: (a) digital downloads of DRM-free, high-fidelity EDM (global); (b) live performances by A-list DJs (Denver metro with global reach via Beatport).
- The court sua sponte addresses standing, market definition sufficiency, and then rules on each claim, granting Christou’s antitrust standing dismissal while allowing other claims to proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are the relevant markets adequately defined for antitrust claims? | Plaintiffs define two markets with no reasonable substitutes and low cross-elasticity. | Plaintiffs fail to address interchangeability/cross-elasticity adequately for submarkets. | Courts find market definitions adequate; proceed with antitrust analysis. |
| Does Beatport/ Beta have market power and can tying be shown? (Unlawful tying) | Tying between EDM downloads and DJ performances coerces market foreclosure. | Insufficient power in tying market and insufficient foreclosure evidence. | Plausible tying claim remains against Beatport/Beta; standing issues resolved in favor of SOCO for antitrust claim. |
| Does Christou have antitrust standing on his own behalf? | Christou alleges injury to business/property and reputational harms affecting SOCO and related properties. | Christou lacks direct antitrust injury; harms are not redressable. | Christou dismissed for lack of antitrust injury; SOCO clubs may proceed. |
| Do claims for Monopoly and Attempted Monopoly survive? | Beta and Roulier control a dominant share and engaged in anticompetitive activity to monopolize the market for A-list DJ performances. | Defendants are purchasers, not suppliers; insufficient barriers/durability and lack of specific intent. | Monopoly and attempted monopoly claims survive, with adequate allegations of barriers, durability, and intent. |
| Do Conspiracy to Monopolize and Conspiracy to Eliminate Competition claims survive? | Common ownership, cross-promotion, and coordinated acts show a conspiracy to restrain trade. | Conspiracies among related entities/employees are improper or insufficiently pled under Twombly/Copperweld. | Claims 4 and 5 survive; Court denies motions to dismiss the conspiracy claims. |
| Is the RICO claim viable against the defendants? | Enterprise engaged in wire/mail fraud and related predicate acts with a pattern of racketeering. | Predicate acts inadequately pled with Rule 9(b) specificity; no valid enterprise. | RICO claim dismissed for failure to plead predicate acts with particularity. |
Key Cases Cited
- Brown Shoe Co. v. United States, 370 U.S. 294 (1962) (market definition requires reasonable interchangeability and cross-elasticity)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility pleading standard for antitrust claims)
- Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (U.S. 1984) (intra-corporate conspiracy doctrine; limits on conspiracies within a single corporate family)