852 F. Supp. 2d 1215
C.D. Cal.2012Background
- RealPage files counterclaims against Yardi in a bid to challenge vertical cloud services competition.
- RealPage alleges Yardi used Voyager license power to coerce customers not to use RealPage Cloud and to stifle competition.
- Five clients are discussed; Client 1, Client 2, and Client 3 are referenced as key examples of interference and risk to RealPage.
- RealPage asserts a vertically integrated cloud services market (Vertical Cloud Market) with RealPage and Yardi as the two main competitors.
- Yardi moves to dismiss under Fed. R. Civ. P. 12(b)(6); the court grants in part and denies in part.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether RealPage adequately pleads a tying arrangement | RealPage contends tying exists via requirement not to use competing vertical clouds. | Yardi argues no tying because Voyager can be used without cloud hosting by RealPage. | Tying adequately pleaded; viable tying claim survives. |
| Whether RealPage sufficiently pleads market power and market definition for tying claim | RealPage defines Vertical Cloud Market and alleges power over customers via switching costs. | Yardi disputes market definition and demands stronger market-power proof at pleading stage. | Market definition and power pleaded plausibly; tying claim survives. |
| Whether RealPage plausibly pleads attempted monopolization | RealPage alleges dangerous probability of monopoly in Vertical Cloud Market aided by Yardi's power. | Yardi argues insufficient market-power and evidence of anticompetitive conduct. | Claim survives; facts show dangerous probability and anticompetitive conduct. |
| Whether RealPage pleads exclusive dealing and intentional interference with contract sufficiently | RealPage asserts exclusive dealing forecloses competition; interference with Client 1 and others. | RealPage overstates impact; Client 2 lacks actual breach; unnamed parties lack specificity. | Exclusive dealing survives; interference with contract as to Client 1 survives; as to Client 2 and unnamed third parties, granted with prejudice. |
Key Cases Cited
- Eastman Kodak Co. v. Image Tech. Serv., Inc., 504 U.S. 451 (U.S. 1992) (negative tying analysis permits tying claims if tied and tying products defined)
- Ill. Tool Works, Inc. v. Indep. Ink, Inc., 547 U.S. 28 (U.S. 2006) (tying must be evaluated in context, not always per se)
- Fortner Enter., Inc. v. U.S. Steel Corp., 394 U.S. 495 (U.S. 1969) (monopoly power standards and tying restraints)
- Tampa Elec. Co. v. Nashville Coal Co., 365 U.S. 320 (U.S. 1961) (exclusive dealing requires substantial foreclosure to violate Section 1)
- Newcal Indus., Inc. v. Ikon Office Solutions, 513 F.3d 1038 (9th Cir. 2008) (market definition and interchangeability guide antitrust pleading)
- Tanaka v. Univ. of S. Calif., 252 F.3d 1059 (9th Cir. 2001) (pleading a market definition must show interchangeability)
- Queen City Pizza, Inc. v. Domino’s Pizza, Inc., 124 F.3d 430 (3d Cir. 1997) (market definition and cross-elasticity for exclusive dealing)