The Merchant Plaintiffs
I. BACKGROUND
A. Procedural History
On July 9, 2018, following the Supreme Court's decision in Ohio v. American Express Co., --- U.S. ----,
Under the original briefing schedule set by the court, Amex was to serve its motions for summary judgment-one as to the allegations of one-sided and Amex-only markets, and one "additional" motion as to the allegation of a two-sided market that includes all general purpose credit and charge cards ("GPCC")-on the Merchant Plaintiffs by no later than August 17, 2018. (See July 10, 2018, Order.) On August 6, 2018, Amex requested that it "be given leave to file a summary judgment motion directed to the Merchant Plaintiffs' allegations regarding competitive harm in a two-sided market after the new discovery is complete." (Aug. 6, 2018, Letter (Dkt. 815) at 2.) The court granted Amex's request and set the briefing schedule on the motion for summary judgment as to the Merchant Plaintiffs' claims on the two-sided, all-GPCC market to take place following the completion of additional fact discovery. (See Aug. 6, 2018, Min. Entry; Aug. 17, 2018, Order.)
The briefing schedule for Amex's original motion for summary judgment, which is as to the Merchant Plaintiffs' other alleged relevant markets, remains in place. Accordingly, on August 17, 2018, Amex served on the Merchant Plaintiffs a motion to dismiss or, in the alternative, for summary judgment ("Amex's Motion"). (See Amex Mem. in Supp. of Mot. to Dismiss.) Amex did not answer the amended complaint. Ten days later, the Merchant Plaintiffs wrote to Amex to express their view that, because Amex's Motion "does not seek dismissal of any cause of action," service of the motion did not toll Amex's responsibility to answer the complaint. (Aug. 27, 2018, Letter from MPs to Amex (Dkt. 828 at ECF p.64).) Following an exchange of letters, the Merchant Plaintiffs offered Amex a compromise by which Amex would "answer just a handful of paragraphs" and "submit any defenses or affirmative defenses and also indicate whether it will seek a trial by jury." (Sept. 4, 2018, Letter from MPs to Amex (Dkt. 828 at ECF p.74).) Amex refused (Sept 5, 2018, Letter from Amex to MPs (Dkt. 828 at ECF p.76) ) and this motion followed.
B. The Motion to Compel
As stated above, the Merchant Plaintiffs seek an order from the court compelling
II. LEGAL STANDARD
Federal Rule of Civil Procedure 12(a)(4) provides that service of a Rule 12 motion suspends the movant's time to file a responsive pleading until fourteen days after the court issues a decision on the motion. While Rule 12 does not explicitly contemplate the filing of a partial motion to dismiss-i.e., "a motion to dismiss only certain claims," Lombardo v. Dr. Seuss Enters., L.P., No. 16-CV-9974 (AKH),
III. DISCUSSION
The court's analysis proceeds as follows. First, the court considers the central question of whether Amex's Motion is a motion to dismiss or a motion for summary judgment. If Amex's Motion is properly classified as a motion to dismiss, then the court must deny the Motion to Compel because, as both sides agree, the submission of a Rule 12 motion tolls the time in which the movant must respond to all allegations in the operative complaint. If, however, Amex's Motion is properly classified as a motion for summary judgment, the court must consider the second question-whether Amex should be able to move for summary judgment without having answered the amended complaint.
A. Whether Amex's Motion Is a Motion to Dismiss or a Motion for Summary Judgment
Under Rule 12, a defendant may move to dismiss any or all of the claims in a complaint prior to submitting his answers and defenses. See Fed. R. Civ. P. 12(b). In order to determine whether a motion falls under Rule 12, the court must therefore ask whether the motion seeks dismissal of any claim in the complaint. If the answer is no, then the motion-even if styled as a
The Merchant Plaintiffs contend that Amex's Motion is actually a motion for summary judgment disguised as a motion to dismiss. They submit that Amex's Motion, rather than seeking to dismiss any of the claims made by the Merchant Plaintiffs in their amended complaint, "attacks only evidentiary formulations of the relevant market while leaving the causes of action under §§ 1 and 2 of the Sherman Act unchallenged." (MPs Reply to Amex Opp'n ("MPs Reply") (Dkt. 829) at 1 (emphasis added); see Mot. to Compel at 4.) The Merchant Plaintiffs point out the fact that, "[e]ven if Amex's [M]otion is granted, [they] can still pursue each of their Counts or causes of action based on the unchallenged assertions of a two-sided credit card relevant market." (Mot. to Compel at 2.) Accordingly, they argue, Amex's Motion does not actually seek to dismiss any "claim" and thus it cannot be construed as a Rule 12 motion to dismiss. (See MPs Reply at 1.) They additionally argue that Amex's Motion "cites to factual material from outside the [amended c]omplaint," something that makes it "on its face a partial motion for summary judgment pursuant to Rule 56(a)." (Id. )
Starting from the unchallenged proposition that a "partial motion to dismiss will suspend the time to answer those claims or counterclaims that are not subject to the motion," Amex argues that the submission of its motion suspended its time to answer the amended complaint because Amex "seek[s] partial dismissal of all claims based on three of [the Merchant] Plaintiffs' four alleged market definitions." (Amex Opp'n at 1-2 (first quoting Barbagallo v. Marcum LLP,
Although the court is loath to insert decision trees within decision trees, the court has broken its analysis of the central question raised by the Motion to Compel into four further inquiries: first, how to define the word "claim"; second, delineating the "claims" made by the Merchant Plaintiffs in the amended complaint; third, whether Amex's Motion seeks dismissal of any "claims"; and fourth, whether a party may move to dismiss part of a "claim."
1. What Is a "Claim"?
The Second Circuit defines a "claim" as "a set of facts giving rise to one or more legal rights." Schwartz v. Eaton,
Neither side may evade this rule with artful pleading. For example, a plaintiff bringing multiple claims under one legal cause of action cannot simply collapse all of his distinct claims into one central "count," thereby proofing his complaint from a partial motion to dismiss. On the flip side, a defendant may not simply seek adjudication of facts in a complaint that are not dispositive of any of the pleas for legal redress. In order to define the "claims" in a complaint-and thus determine whether a motion seeks dismissal of any or all of these claims-the court must look beyond any formal distinctions among "counts," "causes of action," and "claims," and examine the facts alleged and the legal relief sought
2. What Are the "Claims" in the Amended Complaint?
As set forth above, the amended complaint asserts claims based on three causes of action. (Am. Compl. ¶¶ 68-85.) First, to establish monopolization in violation of § 2, the Merchant Plaintiffs must prove that Amex (1) possessed monopoly power in the relevant market, and (2) willfully acquired or maintained that monopoly power. See New York ex rel. Schneiderman v. Actavis PLC,
The fact that a relevant market must be determined in order to find a Sherman Act violation does not, however, mean that there are twelve "claims" in the amended complaint, one for each cause of action based on the four separate alleged markets. Rather, as set forth above, a "claim" is a set of facts that can support liability for the defendant under a cause of action. Here, there is not one cause of action that depends on the existence of a certain type of market, and a separate cause of action for a different type of market; instead, each set of alleged facts-the monopolistic activity, the attempted monopolistic activity, and the restraint on competition-requires the existence of, but is not affected by the identity of, an underlying relevant market. In seeking to "dismiss" the Merchant
In the end, the Merchant Plaintiffs' allegations related to the "relevant market" do not change the harms alleged, nor do they change the causes of action under which relief is sought. Accordingly, the Merchant Plaintiffs' amended complaint states three claims: one for each set of facts pursuant to which Amex allegedly harmed the Merchant Plaintiffs, each of which supports relief under a different Sherman Act cause of action.
3. Does Amex's Motion Seek to Dismiss a "Claim"?
Amex's Motion seeks dismissal of "all claims based on three of Plaintiffs' four alleged market definitions." (Amex Opp'n at 1; accord Amex Mem. in Supp. of Mot to Dismiss at 3.) As set forth in the previous section of this opinion, such a motion does not actually seek dismissal of any "claims" in the amended complaint. The two-sided market theory can support liability under all three causes of action, and there is no "different set of facts" under the two-sided market theory for which the Merchant Plaintiffs are claiming an entitlement to relief. The Merchant Plaintiffs are thus correct that the two-sided market theory is an "alternative evidentiary formulation[ ] of the relevant market" rather than a separate claim unto itself. (See MPs Reply at 1.) Amex's Motion, which purports to seek "dismissal or summary judgment for all claims based on ... three relevant markets-those with one-sided or Amex-only market definitions"-thus does not seek dismissal of any claims at all. (Amex. Mem. in Supp. of Mot. to Dismiss at 3; see id. at 8, 18.) Amex's Motion would be a motion to dismiss if it sought to foreclose all paths to liability under a certain cause of action; since it does not, it is properly thought of as a motion for partial summary judgment.
4. Can Amex's Motion Still Be Classified as a Motion to Dismiss Even Though It Does Not Seek Dismissal of a "Claim"?
As the Second Circuit has long held, "part only of a single claim cannot be adjudicated with finality." Rieser v. Baltimore & Ohio R.R. Co.,
First, the cases that Amex cites to bolster its mistaken argument about Rule 12 do not actually support Amex's reading of the law. (Cf. id. at 2-3.) As the Merchant Plaintiffs point out, in all of these cases the defendants-unlike Amex-actually did move to dismiss separate claims. (See MPs Reply at 1-2.) For example, in Decker v. Massey-Ferguson, Ltd.,
Second, it is of no moment that Amex's Motion targets "more than a 'significant portion of the complaint.' " (See Amex Opp'n at 3 (quoting Lombardo,
Third, the efficiency concerns that Amex raises are not well taken. It is true that, in some circumstances, permitting the defendant to defer its answer is necessary to
Finally, the court wishes to address Amex's statement that "[f]iling Rule 12 and Rule 56 motions together in the alternative is accepted practice in this Circuit." (Amex Opp'n at 3.) That is true enough-where a defendant seeks to dismiss a claim, he may also move for summary judgment on that claim if he believes material outside the pleadings is required to establish his entitlement to judgment as a matter of law. See, e.g., EVO Merch. Servs., LLC v. Fire USA Inc., No. 12-CV-6152 (LDW),
* * *
Under Amex's conception of Rule 12, the tail wags the dog. Amex's proposed rule would permit parties to move to dismiss part of a complaint on the basis that any one of the plaintiffs legal theories is faulty. That formulation of Rule 12 would warp the doctrine and make it much easier for a defendant to avoid answering a well-pleaded complaint where otherwise necessary. Because Rule 12 requires dismissal of a "claim," and because Amex does not seek to dismiss any "claims" in the amended complaint, Amex's Motion cannot be considered a motion to dismiss.
Having established above that Amex's Motion is not a motion to dismiss, but rather a motion for partial summary judgment, the question becomes one of remedy. The Merchant Plaintiffs desire an order from this court requiring Amex to file its answer and defenses to the amended complaint within seven days. (Mot. to Compel at 4.) Amex argues that no answer is needed because "the lack of an answer to Plaintiffs' new conclusory allegations will ... not affect the progress of this case." (Amex Opp'n at 4.) While Amex may well be correct that "Amex's additional reports ... will say far more about Amex's positions than any answer would" (id. ), the court will still require Amex to answer the entirety of the amended complaint prior to moving for summary judgment later this fall. It would appear that Amex is not prepared to move to dismiss or for summary judgment as to allegations of a two-sided, all-GPCC market until after discovery; accordingly, the court cannot dismiss or grant summary judgment on any claim at this point. The deadline to answer the complaint is thus not tolled pursuant to Rule 12(a)(4) and Amex must answer the complaint. The court agrees with the Merchant Plaintiffs that, if the court were to hold otherwise, it would send a signal that "no defendant would ever have to answer the complaint." (MPs Reply at 2.)
Rather than order an answer within 7 days as requested by the Merchant Plaintiffs, the court will strike a balance between that request and the normal limit under Rule 12(a)(1) and grant Amex 14 days in which to answer and submit defenses to the amended complaint.
IV. CONCLUSION
For the foregoing reasons, the Merchant Plaintiffs' Motion to Compel (Dkt. 828) is GRANTED. American Express's anticipated Motion to Dismiss is DENIED WITHOUT PREJUDICE and the pending briefing schedule for that motion is terminated. American Express is DIRECTED to file its answer and defenses to the amended complaint within 14 days of the entry of this memorandum and order. The court understands that it previously set a briefing schedule for American Express's anticipated motion for summary judgment as to the two-sided, all-GPCC market; nevertheless, the court DIRECTS the Merchant Plaintiffs and American Express to consult with Magistrate Judge Ramon E. Reyes as to whether any adjustments to the briefing schedule are necessary, given the court's decision in this memorandum and order. The parties are further DIRECTED to advise the court of any adjustments they believe should be made to the briefing schedule for American Express's anticipated motion or motions for summary judgment.
SO ORDERED.
Notes
The Merchant Plaintiffs are Ahold USA., Inc., Albertson's LLC, The Great Atlantic & Pacific Tea Company, Inc., BI-LO, LLC, CVS Pharmacy Inc., H.E. Butt Grocery Co., Hy-Vee, Inc., The Kroger Co., Meijer, Inc., Publix Super Markets, Inc., Raley's Inc., Rite Aid Corp., Rite Aid Hdqtrs. Corp., Safeway Inc., Supervalu, Inc. and Walgreen Co.
Although the court ultimately decides that Amex's pending partial motion to dismiss or, in the alternative, for summary judgment is not properly consider a motion to dismiss, the court refers to this motion as a "motion to dismiss" in its citations because that is how Amex refers to it. (See Amex Mem. in Supp. of Mot. to Dismiss at 1.)a
The court recognizes that concerns of judicial economy may be more apt where the partial motion to dismiss strikes at a larger portion of claims in the complaint, though this is not a dispositive factor in analyzing whether a motion tolls the time in which to respond to the complaint. See Ricciuti,