703 F.Supp.3d 862
N.D. Ill.2023Background
- Plaintiffs are farmers and farms who own John Deere tractors and allege Deere and its independently owned dealerships conspired to withhold dealer-only diagnostic software, parts, and repair information ("Repair Tools") to force customers into Deere-authorized repair channels.
- Deere provides Repair Tools (e.g., Dealer Service ADVISOR, DTAC, PIPs) only to authorized dealerships; a pared-down Customer Service Advisor is available to customers but is allegedly inadequate and costly.
- Plaintiffs allege the withholding raised prices, delayed repairs, and foreclosed independent repair competition, producing supracompetitive profits on repair parts and services.
- Deere moved for judgment on the pleadings under Rule 12(c), arguing lack of Article III and antitrust standing, Illinois Brick/direct-purchaser problems, failure to plead relevant markets (especially a Kodak-style single-brand aftermarket), and defects in each §1 and §2 claim.
- The Court viewed the complaint in plaintiffs’ favor, held the pleadings adequate at this stage, and denied Deere’s motion in full.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Article III standing (traceability) | Plaintiffs allege they purchased Deere Repair Services from Deere-affiliated dealerships and that dealerships are co-conspirators. | Deere contends plaintiffs failed to allege they bought from dealerships involved in the alleged conspiracy, so injury is not traceable. | Court: Allegations (and counsel admission) suffice at pleading stage; traceability pled—standing present. |
| Applicability of Illinois Brick/direct-purchaser rule | Illinois Brick doesn’t apply because plaintiffs are the first purchasers of the allegedly inflated Repair Services (no pass-on), or because dealerships are co-conspirators (conspiracy exception). | Deere argues Illinois Brick bars indirect purchasers and that plaintiffs must join the co-conspirator dealerships as defendants. | Court: Illinois Brick inapplicable on facts pled (no pass-on); conspiracy exception applies; under these facts dealerships need not be joined. |
| Requirement to join co-conspirator dealerships | Plaintiffs need not name/join dealerships; conspiracy exception allows suit against Deere alone when plaintiffs bought from conspirator dealers. | Deere cites circuits requiring joinder of intermediate co-conspirators and argues costs/limits favor joinder. | Court: Seventh Circuit precedent and factual posture permit proceeding against Deere without joining all dealerships given no pass-on and that joinder would not advance Illinois Brick rationales. |
| Relevant markets — primary (tying) market | Plaintiffs define primary market as the U.S. market for agricultural equipment ("Tractor Market") and allege Deere commands substantial share. | Deere contends the primary market definition is too broad/indefinite and must be precise at pleading stage. | Court: Plaintiffs sufficiently alleged the rough contours and Deere’s substantial share (≈55–63% in segments) — adequate for pleading. |
| Relevant markets — Kodak-type single-brand aftermarket | Plaintiffs: Kodak theory applies — bait-and-switch and/or lack of customer information (customers locked-in; Deere concealed or made repair info unavailable), so Deere can have aftermarket power. | Deere: Kodak should be limited to post-sale policy changes or only where seller affirmatively hid policies; lack-of-information theory is insufficient. | Court: Kodak applies; Complaint plausibly alleges both a policy-change/bait-and-switch theory and lack-of-information (with Deere’s primary-market power), so aftermarket market alleged plausibly. |
| §1 claims (per se hub-and-spoke/group boycott/tying) — conspiracy allegations | Plaintiffs rely on vertical agreements plus circumstantial evidence (dealer contracts, shared trade/lobbying activity, parallel conduct, economic incentives) to infer a horizontal rim and a common scheme. | Deere argues plaintiffs fail to plead horizontal agreements among dealerships; vertical-only arrangements are lawful; alternative innocent explanations exist. | Court: Viewing allegations holistically and accepting reasonable inferences, plaintiffs pled sufficient circumstantial (plus) factors to plausibly infer a common commitment/vertical-plus-horizon scheme; §1 counts survive. |
| §1 tying (appreciable market power) | Plaintiffs allege Deere has appreciable economic power in the Tractor Market and an economic interest in repair services; tying claim thus plausible. | Deere disputes market definition and sufficiency of market power allegations. | Court: Allegations of Deere’s market share and aftermarket conduct suffice to plead appreciable power and a plausible tying claim. |
| §2 claims (monopolization, leveraging, attempted monopolization, conspiracy to monopolize) | Plaintiffs allege Deere has monopoly power in the aftermarket by controlling access to repair tools and thereby excluding competition. | Deere argues it is not the repair-service provider (dealerships are), so Deere lacks monopoly power; alleged conduct is procompetitive or legally insufficient. | Court: Allegations that Deere controls repair tools and thus excludes competition plausibly plead monopoly power and anticompetitive conduct under §2 (Kodak-type aftermarket theory). |
Key Cases Cited
- Ill. Brick Co. v. Illinois, 431 U.S. 720 (1977) (bars recovery by indirect purchasers in a distribution pass-on chain absent an exception)
- Eastman Kodak Co. v. Image Technical Services, 504 U.S. 451 (1992) (single‑brand aftermarket: lack of primary-market power does not preclude aftermarket power where customers are locked‑in or lack lifecycle-cost information)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standard for antitrust conspiracies requires plausible allegations, not mere parallel conduct)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility standard clarified for pleadings)
- Marion Healthcare, LLC v. Becton Dickinson & Co., 952 F.3d 832 (7th Cir. 2020) (conspiracy exception discussion; co-conspirator rule in Seventh Circuit)
- Marion Diagnostic Ctr., LLC v. Becton Dickinson & Co., 29 F.4th 337 (7th Cir. 2022) (Article III traceability and direct-purchaser issues in antitrust context)
- Paper Sys., Inc. v. Nippon Paper Co., 281 F.3d 629 (7th Cir. 2002) (conspiracy/co-conspirator analyses in Illinois Brick context)
- Loeb Indus. Inc. v. Sumitomo Corp., 306 F.3d 469 (7th Cir. 2002) (distinguishing Illinois Brick when no pass-on and conspiracy affects price directly)
- Toys "R" Us v. FTC, 221 F.3d 928 (7th Cir. 2000) ("ringmaster" concept and inference of horizontal agreement from vertical agreements and common enforcement)
- United States v. Grinnell Corp., 384 U.S. 563 (1966) (monopoly power defined as the power to control prices or exclude competition)