SD3, LLC v. Black & Decker (U.S.) Inc.
2015 U.S. App. LEXIS 16412
| 4th Cir. | 2015Background
- SawStop (SD3) developed AIMT (active injury mitigation technology) that stops/retracts table-saw blades on human contact; it sought licenses from major table-saw manufacturers beginning in 2000 but obtained no industry-wide agreement.
- In October 2001, SawStop alleges a breakout meeting of table-saw manufacturers at a Power Tool Institute event where attendees agreed (by majority vote) on an industry response: either all adopt AIMT or none would, and they agreed to keep discussions confidential.
- Following that meeting, several manufacturers allegedly aborted or stalled licensing negotiations (e.g., Ryobi, Emerson, Black & Decker) or made bad-faith offers; SawStop alleges a resulting group boycott that delayed AIMT adoption.
- SawStop also petitioned Underwriters Laboratories (UL) to require AIMT; it alleges defendants controlled UL panels and conspired to reject SawStop’s proposal and adopt alternative standards to disadvantage SawStop.
- Procedurally, the district court dismissed SawStop’s amended complaint under Rule 12(b)(6) for failure to plausibly plead a §1 agreement; on appeal the Fourth Circuit affirmed dismissal of the standard‑setting claims and some defendants but vacated dismissal of the group‑boycott claim as to the remaining defendants and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the complaint plausibly alleges a §1 conspiracy (group boycott) | SawStop: pleads meeting, who attended, majority vote, motive (product‑liability concern), and post‑meeting conduct (stalling, bad‑faith offers) as "parallel conduct +" | Defendants: conduct is independent business judgment, varied negotiation outcomes, and Twombly requires more than alleged parallelism | Court: Allegations (who/what/when/where/why, plus communications, market concentration, concealment) plausibly plead agreement; vacate dismissal of group‑boycott claim and remand |
| Whether the complaint plausibly alleges manipulation of private standard‑setting (UL) | SawStop: defendants controlled UL panels, voted as a bloc, promulgated distortions, and adopted contrived standards to foreclose AIMT | Defendants: ordinary participation in standards process, alternative technical justifications, no external coercion alleged | Court: Dismissed standard‑setting claims as implausible; allegations equal lawful advocacy and error, not improper coercion |
| Whether claims against certain corporate parents/affiliates survive pleading rules | SawStop: seeks to impute liability to parents/affiliates as alter egos and groups | Defendants: plaintiffs lumped many entities without specific factual allegations tying them to the conspiracy | Court: Affirmed dismissal of several parents/affiliates for failure to plead particularized facts or alter‑ego support |
| Whether plaintiff adequately alleged anticompetitive harm (rule‑of‑reason vs. per se) | SawStop: group boycott is a per se violation so market‑harm allegations are unnecessary | Defendants: SawStop did not allege market harm and per se treatment is inappropriate | Court: Did not resolve harm issue on appeal (insufficient briefing); left open for district court on remand |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (requires antitrust complaints to plead parallel conduct plus additional facts suggesting agreement)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility standard for pleadings; courts must accept well‑pleaded factual allegations but need not accept legal conclusions)
- Monsanto Co. v. Spray‑Rite Serv. Corp., 465 U.S. 752 (1984) (agreement requires conscious commitment to a common scheme)
- Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492 (1988) (antitrust scrutiny of standard‑setting when standards are manipulated to exclude rivals)
- Nw. Wholesale Stationers, Inc. v. Pac. Stationery & Printing Co., 472 U.S. 284 (1985) (discusses per se treatment of certain concerted refusals to deal)
- Klor’s, Inc. v. Broadway‑Hale Stores, Inc., 359 U.S. 207 (1959) (classic definition of group boycott as a concerted refusal to deal)