130 F. Supp. 3d 764
W.D.N.Y.2015Background
- Plaintiff RDC sues Biogen Idec U.S. Corp. over termination of their Avonex distribution contract.
- Defendant terminated RDC’s distributorship effective July 1, 2015, directing Avonex sales to the Big Three wholesalers only.
- Complaint asserts five claims: Donnelly Act violation, injunctive relief, anticipatory breach, breach of good faith and fair dealing, and declaratory relief.
- Court granted motion to dismiss under Rule 12(b)(6); preliminary injunction petitions denied.
- Court emphasizes industry context: Big Three dominate distribution and many pharmacies rely on them; termination could affect rural access to Avonex.
- Court holds that the complaint fails to plead a plausible reciprocal arrangement with the Big Three to restrain trade; thus Donnelly Act claim dismissed with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Donnelly Act claim is plausible. | D RDC argues a reciprocal arrangement existed with the Big Three. | Biogen contends unilateral action suffices lacks reciprocal arrangement. | Donnelly Act claim dismissed; no plausible reciprocal arrangement pled. |
| Whether unilateral distributor termination can violate Donnelly Act. | Unilateral exertion can fall within Donnelly Act. | Mobil Oil requires reciprocal relationship; unilateral acts fall outside statute. | Unilateral action alone is insufficient to plead Donnelly Act liability. |
| Whether the complaint adequately alleges a reciprocal, bipartite arrangement with the Big Three. | Alleges Big Three would benefit from the plan and could reassess volumes. | No specific factual misconduct by Big Three; termination could be independent. | No adequate factual basis for a reciprocal arrangement; claim dismissed. |
| Whether remaining claims survive after Donnelly Act dismissal. | Claims premised on Donnelly Act or bad-faith arrangement should proceed. | Without viable Donnelly Act claim or bad-faith conduct, other claims fail. | Remaining claims dismissed for lack of viable antitrust/bad-faith theory. |
| What pleading standard applies to circumstantial antitrust claims under Twombly/Iqbal. | Circumstantial evidence suffices for Donnelly Act claims. | Plaintiff must plead plausible facts; here it does not. | Pleading deemed insufficient; dismissal upheld. |
Key Cases Cited
- Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752 (U.S. 1984) (unilateral refusals generally allowed under the Colgate doctrine)
- Colgate & Co., 250 U.S. 300 (S. Ct. 1919) (Colgate doctrine: unilateral refusal to deal generally lawful)
- Mobil Oil Corp., 38 N.Y.2d 460 (N.Y. 1976) (reciprocal relationship required for Donnelly Act liability)
- In re Elevator Antitrust Litig., 502 F.3d 47 (2d Cir. 2007) (conspiracies must be inferred from behavior; labels insufficient)
- Anderson News, L.L.C. v. Am. Media, Inc., 680 F.3d 162 (2d Cir. 2012) (conspiracies generally proven through inferences from conduct)
- Yankees Entm’t & Sports Network, LLC v. Cablevision Sys. Corp., 224 F. Supp. 2d 657 (S.D.N.Y. 2002) (need to plead facts showing bilateral action or reciprocal relationship)
- Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard; not mere labels or speculation)
- Chambers v. Time Warner, Inc., 282 F.3d 147 (2d Cir. 2002) (consideration of integral documents in motion to dismiss when appropriate)