436 F.Supp.3d 576
E.D.N.Y.2020Background
- Plaintiff O.E.M. Glass Network, Inc. (OEMGN) is an aftermarket auto-glass wholesaler who alleges large wholesalers Mygrant and Interstate orchestrated a group boycott to eliminate OEMGN by pressuring manufacturers and other wholesalers to stop selling to OEMGN.
- OEMGN first learned of the alleged campaign in Jan. 2014 from a Carlite sales rep who said Mygrant and Interstate were applying "significant pressure" on manufacturers and demanded OEMGN's supplier list.
- OEMGN alleges manufacturers (Vitro, Xinyi, Fuyao, ATI) and supplier Sika refused or curtailed sales to OEMGN after pressure from the Wholesaler Defendants; specific incidents and dates (e.g., Vitro reduced/ceased sales by 2015; Xinyi explicitly refused on May 12, 2015) are pleaded.
- OEMGN sued under Sherman Act § 1 (antitrust), New York Donnelly Act (state antitrust), and for tortious interference with prospective business relations; defendants moved to dismiss under Rule 12(b)(6).
- The court (Garaufis, J.) granted the motion in part and denied it in part: federal and state antitrust claims against Sika were dismissed as time-barred; all other federal, state antitrust claims and the tortious interference claim (including against Sika) survived.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Statute of limitations for antitrust claims (Sika, Xinyi) | Continuing conspiracy/reaffirmations make claims timely; overt acts occurred within 4 years | Initial refusals occurred before limitations period so claims are time-barred | Xinyi: timely (explicit refusal communicated May 12, 2015). Sika: time-barred (initial explicit refusal in early 2014; later contacts were reaffirmations) |
| Sufficiency of pleading a horizontal agreement between Mygrant and Interstate | Alleged direct and circumstantial evidence (Marino's bragging re: coordination, Carlite reports, dates, quotes) plausibly show agreement | Allegations are conclusory and amount to parallel conduct | Court found the detailed direct and circumstantial allegations sufficient to plausibly infer a horizontal agreement; claim survives dismissal |
| Sufficiency of pleading a hub-and-spoke/group-boycott involving manufacturers | Manufacturer refusals plus plus-factors (common motive, interfirm communications, actions against self-interest) support inference of vertical and horizontal coordination | Alleged conduct is merely independent, lawful refusals to deal (parallel conduct) | Court held allegations (detailed conversations, dates, quotes, market-wide knowledge) sufficient to plausibly plead a hub-and-spoke/group-boycott; claims survive |
| State-law claims (Donnelly Act; tortious interference) | Donnelly tracks Sherman Act; tortious interference pleaded via intentional coercion and canceled/blocked orders | Dismiss Donnelly if federal claims fail; tortious interference insufficiently specific | Donnelly claims dismissed only as to Sika (time-barred); other Donnelly claims survive. Tortious interference claim adequately pleaded and survives |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (articulates federal pleading "plausibility" standard)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (antitrust pleading requires factual allegations that plausibly suggest agreement; parallel conduct alone insufficient)
- Gelboim v. Bank of Am. Corp., 823 F.3d 759 (2d Cir. 2016) (discusses plus-factors and pleading conspiracy in antitrust cases)
- United States v. Apple, Inc., 791 F.3d 290 (2d Cir. 2015) (explains hub-and-spoke conspiracy structure and liability requirements)
- Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752 (1984) (agreement requires evidence of a "conscious commitment to a common scheme")
- Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321 (1971) (antitrust accrual and continuing violation principles)
- Klehr v. A.O. Smith Corp., 521 U.S. 179 (1997) (each overt act restarting limitations period when it inflicts new injury)
- Nw. Wholesale Stationers, Inc. v. Pac. Stationery & Printing Co., 472 U.S. 284 (1985) (certain concerted refusals to deal/group boycotts may be per se unlawful)
- Keurig Green Mountain Single-Serve Coffee Antitrust Litig., 383 F. Supp. 3d 187 (S.D.N.Y. 2019) (illustrative decision finding detailed exclusionary-agreement allegations sufficient at pleading stage)
- L-7 Designs, Inc. v. Old Navy, LLC, 647 F.3d 419 (2d Cir. 2011) (court accepts well-pleaded factual allegations as true on motion to dismiss)