419 F.Supp.3d 791
D. Del.2019Background
- Plaintiff International Construction Products LLC (ICP) alleges a conspiracy led by Caterpillar (and joined by Komatsu, certain Caterpillar dealers, and Associated Auction Services) to force IronPlanet to stop providing hosted-services to ICP so ICP could not enter the new heavy construction equipment market.
- ICP contracted with Lonking to distribute new equipment via ICPDirect.com, to be hosted by IronPlanet; IronPlanet primarily operated in the used equipment market and repudiated its contract with ICP in spring 2014.
- Alleged means of coercion: (1) dealer withholding/redirecting consignments of used equipment to pressure IronPlanet, and (2) merger leverage (Associated Auction Services/ IronPlanet) to bring IronPlanet under Caterpillar-affiliated control. The merger completed in 2015.
- ICP brought Sherman Act §1 group-boycott claims and multiple state-law tort claims in a second amended complaint; Defendants moved to dismiss under Rules 12(b)(2) and 12(b)(6).
- Court dismissed all claims against Dealer Defendants (Ziegler, Ring Power, Thompson Tractor) for lack of personal jurisdiction; dismissed Associated Auction Services for failure to state an antitrust claim (antitrust claims against it with prejudice; state claims without prejudice); denied dismissal of antitrust claims against Caterpillar and Komatsu (state-law claims against them dismissed without prejudice).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction over dealer defendants (conspiracy theory) | ICP: in-state actions by co-conspirators (Istituto Bancario test) permit imputing acts to out-of-state dealers | Dealers: no substantial in-forum act in Delaware; conspiracy acts occurred elsewhere | Dismissed for lack of personal jurisdiction — ICP failed Istituto Bancario prong requiring a substantial in-forum act |
| Direct evidence of an agreement to boycott IronPlanet | Four documents (emails, draft letter, PowerPoint) constitute direct evidence of an agreement to withhold equipment | Documents are at most expressions of concern, leverage, or negotiation — not explicit agreements | Not direct evidence — documents require inference and fall short of the clarity required for direct proof of an illegal agreement |
| Circumstantial proof (parallel conduct + plus factors) | ICP: manufacturers and some dealers made near-contemporaneous threats to IronPlanet; plus factors (motive, acting against self-interest, traditional-conspiracy indicators) exist | Defendants: conduct is unilateral communications and not sufficiently parallel or conspiratorial; Associated Auction Services cannot be parallel because it does not supply equipment | Court finds ICP adequately pleaded parallel threats and plus factors as to Caterpillar and Komatsu (and enough dealer allegations to proceed), but Associated Auction Services cannot be charged with parallel conduct and claim fails against it |
| Analytical standard: per se vs. rule of reason; market pleading | ICP: boycott of marketplace is per se unlawful group boycott (or at least plausibly unlawful) | Defendants: novel multi-level conspiracy implicates rule of reason; ICP must plead a relevant geographic market | Court declines to decide per se v. rule of reason at this stage; because antitrust pleading otherwise plausible, antitrust claims against Caterpillar and Komatsu survive; rule-of-reason market pleading deficiency noted but not dispositive here |
| State-law tort claims and choice-of-law pleading | ICP: asserted multiple state-law claims (tortious interference, civil conspiracy, aiding/abetting) without specifying which state(s) govern | Defendants: ICP failed to identify applicable state law(s) or plead elements with Rule 8 specificity | Court dismisses state-law counts without prejudice for insufficient pleading and failure to identify governing state law; warns claims must be repleaded with choice-of-law and substantive detail |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard for conspiracy claims)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (legal conclusions not entitled to deference in Rule 12(b)(6) review)
- Istituto Bancario Italiano SpA v. Hunter Eng'g Co., 449 A.2d 210 (Del. 1981) (test for conspiracy-based personal jurisdiction under Delaware law)
- NYNEX Corp. v. Discon, Inc., 525 U.S. 128 (1998) (limits per se rule in boycott context to horizontal agreements among competitors)
- North Pac. Ry. Co. v. United States, 356 U.S. 1 (1958) (description of per se rule for certain restraints)
- Klor's, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207 (1959) (group boycott in forbidden category of restraints)
- Burtch v. Millberg Factors, Inc., 662 F.3d 212 (3d Cir. 2011) (elements of a §1 Sherman Act claim)
- Lifewatch Servs., Inc. v. Highmark Inc., 902 F.3d 323 (3d Cir. 2018) (parallel conduct plus ‘plus factors’ framework for inferring agreement)