678 F. App'x 27
2d Cir.2017Background
- Plaintiffs (Wacker et al.) sued JPMorgan and related entities alleging monopolization and anticompetitive conduct in the long‑dated silver futures market under Sherman Act § 2 and NY GBL § 340.
- The District Court dismissed the federal and state antitrust claims under Rule 12(b)(6), finding plaintiffs failed to plausibly plead willful acquisition/maintenance of monopoly power, uneconomic bidding, and appropriate benchmarking.
- Plaintiffs appealed, arguing the complaint adequately alleged predatory/uneconomic bids, anticompetitive intent, and a plausible relevant market (long‑dated silver futures).
- The Second Circuit reviewed de novo and applied Twombly/Iqbal pleading standards for antitrust claims (no heightened pleading for antitrust).
- The Court held the complaint sufficiently alleged willful maintenance/acquisition of monopoly power and that factual disputes about the benchmark and market definition are inappropriate to resolve on a motion to dismiss.
- The Second Circuit vacated the dismissal and remanded for further proceedings, leaving antitrust‑injury and other merits questions for the district court after discovery.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether complaint plausibly alleges willful acquisition/maintenance of monopoly power ( §2) | Alleged uneconomic bids on specific dates show intent to rig prices and forsake short‑term profit to gain anticompetitive advantage | Plaintiffs failed to plead specifics (amounts, counterparties, concrete uneconomic bids) to show anticompetitive intent or exclusionary conduct | Reversed: allegations (dates/transactions and conduct) suffice at pleading stage to plausibly allege willful acquisition/maintenance of monopoly power |
| Adequacy of pleading uneconomic bids and counterparties | Need not identify counterparties or quantify JP Morgan’s profits; facts provided raise expectation discovery will reveal illegality | District Court said plaintiffs lacked specificity on bid/ask amounts and counterparties, so claims were speculative | Reversed: plaintiffs need only allege sufficient facts to make discovery likely to reveal evidence; detailed dollar amounts or counterparty IDs not required at pleading stage |
| Use of SIFO benchmark to allege artificially tight spreads | SIFO is a reasonable benchmark to compare expected spreads; plaintiffs pleaded its use and dates of deviation | District Court rejected SIFO as unrelated without factual record to support that conclusion | Reversed: evaluating benchmark is fact‑intensive and improper at pleading stage; district court erred in rejecting SIFO on motion to dismiss |
| Relevant market definition (long‑dated silver futures) | Plaintiffs plausibly defined a market of long‑dated silver futures where JP Morgan allegedly exerted control | JP Morgan contended market definition was improper and disputed at motion to dismiss | Affirmed that the pleaded market is plausible at pleading stage; market definition is fact‑intensive and may be revisited after discovery |
Key Cases Cited
- Apotex Inc. v. Accordia Therapeutics, 823 F.3d 51 (2d Cir. 2016) (de novo review of 12(b)(6) dismissals)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard: plausible on its face)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading requirement to raise claim above speculative level)
- PepsiCo, Inc. v. Coca‑Cola Co., 315 F.3d 101 (2d Cir. 2002) (elements of §2 monopolization claim)
- United States v. Grinnell Corp., 384 U.S. 563 (1966) (willful acquisition/maintenance element under §2)
- Verizon Commc'ns Inc. v. Law Offices of Curtis V. Trinko, 540 U.S. 398 (2004) (monopoly power requires anticompetitive conduct)
- Atl. Richfield Co. v. USA Petroleum Co., 495 U.S. 328 (1990) (antitrust injury requirement)
- Starr v. Sony BMG Music Entm’t, 592 F.3d 314 (2d Cir. 2010) (no need for detailed factual allegations at 12(b)(6))
- Concord Assocs., L.P. v. Entm’t Props. Trust, 817 F.3d 46 (2d Cir. 2016) (no heightened pleading standard in antitrust cases)
- Anderson News, L.L.C. v. Am. Media, Inc., 680 F.3d 162 (2d Cir. 2012) (fact‑specific questions cannot be resolved on pleadings)
- Todd v. Exxon Corp., 275 F.3d 191 (2d Cir. 2001) (market definition is fact‑intensive; courts hesitate to dismiss on that basis)
- Weyerhaeuser Co. v. Ross‑Simmons Hardwood Lumber Co., 549 U.S. 312 (2007) (predatory pricing/bidding framework discussed; applicability beyond manufacturing not decided)