Insulate SB, Inc. v. Abrasive Products & Equipment, 0:13-cv-02664

Background

Insulate SB, Inc., a California spray-foam contractor, sued Graco (Minn.) and about 32 alleged distributors in a putative class action alleging antitrust violations tied to Graco’s 2005 acquisition of Gusmer and 2008 acquisition of GlasCraft and related distributor conduct.
Plaintiffs allege Graco eliminated rivals, closed their facilities, raised prices, reduced product options, and secured distributor exclusivity agreements and conspiratorial boycotts to exclude new entrants (e.g., Gama/PMC reentry).
The FTC filed a complaint against Graco in April 2013 and entered a consent order prohibiting Graco from implementing exclusivity policies; the October 2007 letter and the New Jersey litigation (Graco v. PMC/Gama) were publicly filed and referenced.
Insulate filed this federal suit in June 2013 asserting Sherman Act (Sections 1 & 2), Clayton Act (Sections 3 & 7), multiple state antitrust and consumer-protection claims, and seeking damages and injunctive relief including divestiture and distributor quotas.
Graco and distributor defendants moved to dismiss under Rule 12(b)(6) arguing (inter alia) that federal antitrust damages claims are time-barred and that the complaint fails to plead concerted conduct; the court granted dismissal with prejudice and denied discovery motions as moot.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether federal antitrust damages claims are time‑barred	Limitations tolled by fraudulent concealment; continuing violation restarts the clock	Causes of action accrued by at least 2005–2008; limitations expired before 2013 filing	Claims for damages under Sherman/Clayton are time‑barred; tolling doctrines do not apply
Applicability of fraudulent-concealment tolling	Defendants concealed the conspiracy until FTC suit in 2013	Plaintiff had inquiry notice earlier (post‑acquisitions, NJ litigation)	Plaintiff failed to exercise due diligence; public NJ counterclaim and market facts gave notice
Continuing-violation doctrine for price‑fixing / exclusion claims	Ongoing compliance and later letters and supra‑competitive sales are new overt acts restarting limitations	Post‑agreement acts were mere reaffirmations or inertial consequences, not new overt acts	No adequately pleaded new overt acts; continuing-violation doctrine does not save claims
Sufficiency of conspiracy / exclusivity allegations under Twombly/Iqbal	Alleged Distributor coordination, market allocation, and boycott; October 2007 letter shows concert	Allegations are conclusory; October 2007 letter shows unilateral Graco policy and independent distributor decisions	Complaints are conclusory and fail to plead concerted action with factual particularity; Counts I–V dismissed for failure to state a claim
Availability of injunctive relief (quota, prohibition on exclusivity, divestiture)	Equitable relief necessary to restore competition	Remedies are duplicative of FTC order, impractical, or too drastic; divestiture improper for private plaintiff	Requested equitable remedies denied: duplicative injunction, quotas inappropriate, divestiture barred as drastic and unavailable to private end‑user
Standing for out‑of‑state statutory claims	Class issues should be addressed at certification; standing premature	Named plaintiff must establish Article III standing pre‑certification for each state claim	Plaintiff lacks Article III standing to assert state claims outside California; state claims dismissed (including California antitrust claims as time‑barred)

Key Cases Cited

Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard for pleading)
Ashcroft v. Iqbal, 556 U.S. 662 (legal conclusions not presumed true at pleading stage)
Klehr v. A.O. Smith Corp., 521 U.S. 179 (continuing violation rule restarts limitations for new overt acts)
Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321 (antitrust accrual principles)
Varner v. Peterson Farms, 371 F.3d 1011 (8th Cir.) (antitrust limitations / continuing act analysis)
Midwestern Machinery Co. v. Northwest Airlines, 392 F.3d 265 (8th Cir.) (continuing violation, meetings/fine‑tuning as overt acts)
Concord Boat Corp. v. Brunswick Corp., 207 F.3d 1039 (8th Cir.) (post‑merger acts as inertial consequences do not restart limitations)
Lomar Wholesale Grocery, Inc. v. Dieter's Gourmet Foods, Inc., 824 F.2d 582 (8th Cir.) (continuing violations analysis in pricing context)
Pacific Bell Tel. Co. v. Linkline Commc'ns, Inc., 555 U.S. 438 (courts should not impose detailed duties to deal or act as central planners)
Ginsburg v. InBev NV/SA, 623 F.3d 1229 (8th Cir.) (divestiture is drastic remedy and generally not available to private end‑users)
In re Beef Indus. Antitrust Litig., 600 F.2d 1148 (8th Cir.) (notice from others' litigation can trigger accrual)