Duty Free Americas, Inc. v. The Estee Lauder Companies, Inc.
2015 U.S. App. LEXIS 13837
| 11th Cir. | 2015Background
- Duty Free Americas (DFA) operated duty-free stores in many U.S. international airports, competing for limited airport retail leases; Estée Lauder was the dominant supplier of beauty products in that channel.
- DFA purchased Estée Lauder products until mid-2008, when Estée Lauder eliminated travel-retail price differentials; DFA ceased buying Estée Lauder products and later sought to resume a relationship, which Estée Lauder refused.
- During multiple airport RFPs (Newark, Boston, Orlando, Atlanta), Estée Lauder communications (and statements by DFA competitors) noting DFA lacked Estée Lauder authorization were cited by airports as relevant to awarding leases.
- DFA sued in the Southern District of Florida alleging: attempted monopolization under §2 of the Sherman Act; contributory false advertising under §43(a) of the Lanham Act; and tortious interference under Florida law; the district court dismissed; DFA appealed.
- The Eleventh Circuit affirmed, holding DFA failed to plead plausible anticompetitive conduct, failed to allege contributory participation in false statements, and failed to plead improper methods sufficient for tortious interference; it also found DFA lacked standing to seek injunctive relief regarding Estée Lauder’s contractual requirements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Estée Lauder’s refusal to deal and related conduct states an attempted-monopolization claim under §2 | Estée Lauder refused to resume dealing and engaged in exclusionary practices (full-line forcing, tying, display/inventory requirements) intended to harm DFA and preserve monopoly power | A unilateral refusal to deal is generally lawful; DFA terminated the relationship; Aspen Skiing and Otter Tail are distinguishable; allegations do not show predatory or anticompetitive conduct harming competition | Dismissed — plaintiff failed to plead predatory or anticompetitive conduct; refusal-to-deal theories did not fit Aspen/Otter Tail; no plausible anticompetitive harm alleged |
| Whether Estée Lauder’s communications (and competitors’ statements) constituted anticompetitive disparagement supporting §2 liability | Statements to airports disparaging DFA’s ability to sell Estée Lauder products and its projections were false, material, and intended to exclude DFA | Disparagement of a competitor ordinarily does not establish antitrust liability absent allegations showing clear falsity and competitive harm; alleged statements are not shown to be demonstrably false or to have harmed market competition | Dismissed — no adequately pleaded clearly false statements or factual nexus showing harm to competition; competition among bidders remained robust |
| Whether §43(a) of the Lanham Act permits contributory liability and whether Estée Lauder is contributorily liable for competitors’ allegedly false statements | §43(a) allows contributory false-advertising claims; Estée Lauder knew of and enabled the false statements by its favored operators and thus is contributorily liable | Even if contributory liability exists, DFA failed to plead facts showing Estée Lauder knowingly induced, controlled, or materially participated in the alleged false statements | Court: A contributory false-advertising doctrine is cognizable under §43(a), but Dismissed — DFA failed to allege knowing inducement or material participation by Estée Lauder |
| Whether DFA stated a Florida tortious-interference claim based on Estée Lauder’s conduct in RFPs | Estée Lauder induced competitors to make misrepresentations and communicated misleading information to airports, intentionally and unjustifiably interfering with DFA’s prospective contracts | Estée Lauder did not make the alleged disparaging statements; mere silence or statements vouching for customers do not imply disparagement; competitors acted to advance their own legitimate interests | Dismissed — complaint lacks factual allegations that Estée Lauder made or induced improper statements; competitive conduct was privileged absent improper means |
Key Cases Cited
- Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (recognizes narrow exception to refusal-to-deal where a firm abandons a voluntary, profitable course of dealing to harm competition)
- Verizon Commc’ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (limits Aspen Skiing to a narrow set of facts; affirms general rule allowing unilateral refusals to deal)
- Otter Tail Power Co. v. United States, 410 U.S. 366 (vertical-integration/foreclosure holding, distinct factual predicate from ordinary supplier refusal-to-deal)
- Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844 (endorses contributory liability in trademark context; used as analogy for contributory Lanham Act theories)
- Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447 (elements for attempted monopolization: predatory or anticompetitive conduct, specific intent, dangerous probability of success)
- Lexmark Int’l, Inc. v. Static Control Components, Inc., 134 S. Ct. 1377 (discusses proximate-cause/prudential limitations on Lanham Act standing and scope of private remedies)