Case Information
*1 10-0261-cv Astra Media Group, LLC v. Clear Channel Taxi Media, LLC
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SUMMARY ORDER Rulings by summary order do not have precedential effect. Citation to a summary order filed on or after January 1, 2007, is permitted and is governed by Fedеral Rule of Appellate Procedure 32.1 and this court’s Local Rule 32.1.1. When citing a summary order in a document filed with this court, a party must cite either the Federal Appendix or an electronic database (with the notation “summary order”). A party citing a summary order must serve a copy of it on any party not represented by counsel.
At a stated term of the United States Court оf Appeals for the Second Circuit, held at the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New York, on the 15 th day of February, two thousand eleven.
PRESENT:
AMALYA L. KEARSE,
RALPH K. WINTER,
PETER W. HALL,
Circuit Judges .
______________________________________________
Astra Media Group, LLC,
Plaintiff-Appellant ,
v. 10-0261-cv Clear Channel Tаxi Media, LLC, and The New York City Taxi and Limousine Commission,
Defendants-Appellee s.
______________________________________________
FOR APPELLANT: D AVID W. P HILLIPS , LeClair Ryan, New York, NY. FOR APPELLEES: D ONNA M. D OBLICK (Emily Bab Kirsch and James
C. Martin, on the brief ) Reed Smith LLP, *2 Pittsburgh, PA, for Defendant-Appellee Clear Channel Taxi Media, LLC .
M ORDECAI N EWMAN (Larry A. Sonnenshein, Sheryl R. Neufeld, on the brief ), for Michael A. Cardozo, Corporation Counsel of the City of New York, New York, NY, for Defendant-Appellee New York City Taxi & Limousine Commission .
Astrа Media Group, LLC appeals from the judgment of United States District Court for
the Southern District of New York (Buchwald,
J
.) dismissing its complaint against Clear
Channel Taxi Media, LLC under Federal Rule of Civil Procedure 12(b)(6) and granting
summary judgment against it on its claims against the New York City Taxi and Limousine
Commission (“TLC”).
[1]
Although we
AFFIRM
the district court’s dismissal of Astra Media’s
Sherman Act claim against Clear Channel for reasons similar to those given by the distriсt court
in its opinion,
Astra Media Group, LLC v. Clear Channel Taxi Media, LLC
,
*3
The district court dismissed Astra Media’s claim that Clear Channel engaged in predatory
pricing in violation of Sеction 2 of the Sherman Act, 15 U.S.C. § 2. We review dismissals under
Rule 12(b)(6)
de novo
.
Famous Horse Inc. v. 5th Ave. Photo Inc.
,
Reviewing this portion of the complaint
de novo
, we agree with the district court that the
predatory pricing claim is insufficiently pled. A defendant’s pricing practice violates the
Sherman Act only if the plaintiff can “prove that the prices complained of are below an
appropriate measure of [the defendant’s] costs.”
Brooke Group Ltd. v. Brown & Williamson
Tobacco Corp.
,
To begin with, Astra Media fails to allege plausibly that Clear Channel’s price with respect to the Disney Theatrical bid was below cost. The complaint is silent with respect to what price Clear Channel ultimately charged Disney or what Clear Channel’s actual costs were. Instead, Astra Media simply states that $170 per taxicab per month “is close tо the industry *4 standard” cost for contracts such as Disney’s and that, to the extent Clear Channel priced below this, Clear Channel was carrying advertising below its actual cost. These assertions arе both conclusory. First, Astra Media provides no facts to support its contention that $170 is actually close to the standard industry cost. It is unclear from the complaint whether the industry standard is higher or lower than $170 or by how much. Second, it gives no basis to infer reasonably that Clear Channel—which, as the largest supplier of taxi-tops in New York City, may enjoy substantial economies of scale—has the same cost structure as the rest of the industry. Astra Media, therefore, failed properly to plead that Clear Channel’s prices were below an appropriate measure of its costs. [2]
That said, even if the complaint did contain adequate factual assertions about Clear
Channel’s price and cost with respect to Disney, these assertions are still limited to a single bid
for a single contract. In a business environment in which the competing parties have entered into
numerous contracts with numerous parties for the provision of rented advertising space,
[3]
an
allegation that one of those contracts provides below-cost prices for services is insufficient to
allege predatory pricing. An inferencе of predation will only arise when a defendant engages in
economically irrational activity; and when that activity principally involves pricing, it is
economically irrational only if it hurts a defendant’s bottom line. Phillip Areeda and Donald
*5
F. Turner,
Predatory Pricing and Related Practices Under Section 2 of the Sherman Act
, 88
Harv. L. Rev. 697, 703 (1975) (sacrifice of short-run profits is a necessary cоndition of
predation);
see also Buffalo Courier-Express, Inc. v. Buffalo Evening News, Inc.
,
The presence of this federal Sherman Act сlaim in the complaint was the sole alleged basis for removing the case from state court. See Def.’s Notice of Removal, April 20, 2009, Dkt. No. 1. Without that claim or the federal discrimination claim that was also dismissed, Astra Media’s action would not have been removable to federal court. 28 U.S.C. § 1441(b). Having dismissed Astra Media’s Sherman Act and federal discrimination claims, the district court was left with only the state-law claims, which were “otherwise non-removable” to federal court, and the district court had discretion to “remand” to the state court “all matters in which State law predominate[d].” Id. § 1441(c); see also § 1367(c)(3) (district court has discretion to exercise supplemental jurisdiction over related state-law claims when it “has dismissed all claims over which it has original jurisdiction”). In this case, the district сourt should have exercised its discretion to remand.
Although sections 1441(c) and 1367(c) are permissive rather than mandatory, we have
generally held that where all the federal claims have been dismissed at a relatively early stage,
the district court should decline to exercise supplemental jurisdiction over pendent state-law
claims. This has been especially true where the state law governing these claims is unsettled.
e.g.
,
Giordano v. City of New York
,
Here, it appears that Astra Media's remaining claims raise unsettled questions of state
law. Perhaps most importantly, there is a question as to whether the New York courts have
adopted—or wоuld adopt—the
Iqbal
pleading standard, under which several of Astra Media's
claims were dismissed by the district court. In addition, the contours of New York law
governing claims of tortious interference with contract are not entirely clear.
Compare Guard-
Life Corp. v. S. Parker Hardware Manufacturing Corp.
,
Accordingly, the portion of the district court’s judgment dismissing Astra Media’s Sherman Act and federal discrimination claims are AFFIRMED , but the remainder of the judgment is VACATED and the state-law claims are REMANDED to the district court for entry of an order remanding the state-law claims to the state court from which the action was removed.
FOR THE COURT: Catherine O’Hagan Wolfe, Clerk
Notes
[1] We assume the parties’ familiarity with the facts, procedural histоry, and issues on appeal.
[2] Because we determine that Astra Media did not sufficiently plead this element of predatory pricing, there is no need for us to consider the sufficiency оf the complaint with respect to the claim’s second element—recoupment.
[3] The complaint demonstrates throughout that both Clear Channel and Astra Media contracted with vаrious different advertisers to rent space on their taxi-tops. See, e.g. , Compl. ¶ 81 ( “[a] number of valid contracts also existed between Astra Media and advertisers who agreed to advertise on Astra Media rooftops.”); id ¶ 3 (stating that Clear Channel “at all times relevant herein” had over 70 percent of the taxi-top market).