In Town Hotels Ltd. Partbership v. Marriott Inter., Inc.In Town Hotels Ltd. Partbership v. Marriott Inter., Inc.
MEMORANDUM OPINION AND ORDER
Pending is defendant Marriott International, Inc.’s motion to dismiss Counts IV and XIV [Docket 15] and defendant Aven-drá, LLC’s motion to dismiss all counts [Docket 18]. For the following reasons,
I. Background
The plaintiffs, In Town Hotels Limited Partnership and In Town Hotels, Inc. (collectively, “In Town Hotels”), brought suit against Marriott International, Inc. (Marriott) and Avendrá, LLC (Avendrá), alleging breach of contract, breach of fiduciary duty, negligence, and fraud arising out of Marriott’s management of the plaintiffs’ hotel, known as the Charleston Town Center Marriott (the Hotel). In an amended complaint, the plaintiffs further alleged that Marriott and Avendrá violated the West Virginia Unfair Practices Act (WVU-PA), W. Va.Code § 47-11A-3, as well as § 2(c) of the Robinson-Patman Act, 15 U.S.C. § 13(c), a federal antitrust provision which prohibits the payment and acceptance of commissions that are not in exchange for services rendered.
Because the court is considering motions to dismiss, the following facts are set out as alleged by the plaintiffs in the complaint. Fоr approximately twenty years the plaintiffs have contracted with Marriott to manage the plaintiffs’ Hotel. Under the terms of the contract, Marriott is granted unfettered authority to manage and control the Hotel. The contract purports to create an agency relationship between Marriott and In Town Hotels whereby Marriott has a fiduciary duty to operate the Hotel solely for the benefit of the plaintiffs. The contract provides that Marriott’s compensation for its services would consist solely of management fees as set forth in the agreement. For the purpose of their antitrust claim, the plaintiffs allege that Marriott, acting in conjunction with Avendrá, entered into exclusive or preferred contracts with vendors to provide goods to the Hotel. In so doing, Marriott and Avendrá solicited and received “sponsorship funds,” which were payments and rebates by vendors made in the course of selling, or in exchange for the opportunity to sell, goods to the Hotel. Marriott and Avendrá retained these payments and rebates for themselves and did not disclose them to the plaintiffs. As a consequencе, the plaintiffs allege, the Hotel has been restricted in its choice of vendors, has paid a higher price for goods than it would otherwise have paid, and has suffered vis-a-vis rival hotels (some of which are owned or managed by Marriott) that are not paying these higher prices.
According to the plaintiffs, this scheme violates, among other things, section 2(c) of the Robinson-Patman Act as well as the WVUPA, and entitles them to treble damages. Marriott moved to dismiss both of these claims. Marriott argues that the plaintiffs have failed to allege that they have suffered an antitrust injury and that without such an allegation they lack standing to bring a section 2(c) claim. In addition, Marriott argues that the plaintiffs have failed to allege an injury to a competitor, a requirement of § 47-11A-3 of the WVUPA. The plaintiffs respond that they have adequately plead the necessary injuries for both statutes.
Avendrá filed a separate motion to dismiss all claims against it. It joins in Marriott’s arguments regarding the Robinson-Patman Act and the WVUPA. It also claims that the contract specifically authorizes all of the alleged conduct, and thus that all counts should be dismissed. Finally, it argues that the bulk оf the plaintiffs’ claims are fraud-based and that these claims must be dismissed because the plaintiffs have failed to plead fraud with
The court will first address Marriott’s motion regarding the Robinson-Patman Act and the WVUPA. The court will then turn to Avendra’s additional grounds for dismissal.
II. Marriott’s Motion to Dismiss
A. Robinson-Patman Act section 2(c) Claim
The plaintiffs allege that Marriott’s receipt of undisclosed payments and rebates in the course of purchasing goods for the Hotel violates section 2(c) of the Robinson-Patman Act. Section 2(c) provides, in pertinent part, that:
It shall be unlawful for any person engaged in commerce, in the course of such commerce, to pay or grant, or to receive or accept, anything of value as a commission, brokerage, or other compensation, ... except for services rendered in connection with the sale or purchase of goods, wares, or merchandise ....
15 U.S.C. § 18(c) (West 2003). This provision has been described as a “prolix and obscure statute [which] is a model of bad drаfting.” XIV Herbert Hovenkamp,
Antitrust Law
¶ 2362, at 219 (1999) [hereinafter Hovenkamp]. Thankfully, the Supreme Court has provided a useful explanation of the intent and function of section 2(c). In
FTC v. Henry Broch & Co.,
In response to this practice, Congress passed section 2(c) of the Robinson-Pat-man Act, which prohibits brokerage or similar payments in the absence of services rendered for those payments. “Congress in its wisdom phrased section 2(c) broadly, not only to cover the other methods then in existence but all other means by which brokerage could be used to effect price discrimination.”
Id.
Indeed, the Court noted that “the [Congressional] debates on the bill show clearly that section 2(c) was intended to proscribe other practices such as the ‘bribing’ of a seller’s broker by the buyer.”
Id.
at 169 n. 6,
In this case, the plaintiffs allege that Marriott, acting in conjunction with Aven-drá, received rebates and payments — so-called “sponsorship funds” — from vendors
The private cause of action for antitrust violations is provided in section 4 of the Clayton Act, which states that “any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States.” 15 U.S.C. § 15(a) (West 2003). According to the Supreme Court, this means that not every private party who is somehow injured as a result of conduct forbidden by the antitrust laws has standing to bring a private antitrust suit. Rather, an antitrust plaintiff “must prove antitrust injury, which is to say injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful.”
Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.,
It is important to clearly distinguish between the elements of the substantive antitrust violation and the antitrust injury requirement. In certain cases an antitrust plaintiff must prove, as part of the substantive antitrust claim, that the conduct in question injured competition as a whole. For example, a plaintiff seeking to prove a unilateral monopoly under section 2 of the Sherman Act, 15 U.S.C. § 2, must prove that the defendant’s conduct actually “pose[s] a danger of monopolization.”
Copperweld Corp. v. Indep. Tube Corp.,
Regardless of whether the defendant has violated section 2(c), however, the question remains whether the plaintiff has standing to bring suit for that violation.
The focus point of the disagreement between the plaintiffs and the defendant lies in their understandings of what constitutes antitrust injury in the context of a claim under section 2(c). Marriott contends that antitrust injury requires proof that the plaintiffs’ injury resulted from “a competi
tion-reducing
aspect or effect of the defendant’s behavior.”
Id.
at 344,
There is force to both parties’ positions, and the caselaw does not provide a clear resolution of the issue. The Supreme Court cases discussing the antitrust injury requirement illustrate the ambiguity in the caselaw on this point. For example, in
Brunswick,
the Court first defines antitrust injury as “injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful.”
The defendants argue that regardless of any additional purposes of the specific antitrust provision at issue, the Supreme Court has made clear that injury to competition is always a necessary part of antitrust injury. For example, in
Brunswick,
after describing an antitrust injury as “injury of the type the antitrust laws were intended to prevent,” the Court immediately went on to say that “[t]he injury should reflect the anticompetitive effect either of the violation or of anticompetitive acts made possible by the violation.”
The court does not agree that these statements from
Brunswick
and
Atlantic Richfield
resolve the matter. While the Court in
Brunswick
and
Atlantic Richfield
seems to assume that preventing injury to competition is always the purpose of the antitrust provision in question, both cases involve the Sherman Act, not the Robinson-Patman Act. In this case, which involves an antitrust provision that was not designed to protect competition, but rather to protect individual competitors, this court concludes that the abоve statements from
Brunswick
and
Atlantic Richfield
are not relevant. Instead, the fundamental rule from both cases is that the court must “ensure[ ] that the harm claimed by the plaintiff corresponds to the rationale for finding a violation of the antitrust laws in the first place.”
Id.
at 342,
Cases directly addressing the issue of antitrust injury in the context of section 2(c) claims have reached different conclusions about the meaning of antitrust injury. Some cases hold that a competitive injury must be proven to satisfy the antitrust injury requirement.
See, e.g., Hansel ‘N Gretel Brand, Inc. v. Savitsky,
No. 94 Civ. 4027,
On the one hand, the court in Bunker Ramo explained that “[a]s envisioned by Congress and interpreted by the courts, section 2(c) is designed to protect and promote competition among businesses competing at the same functional level in thе marketing chain.” Id. at 533. Similarly, the court in Federal Paper Board Co. stated that “[e]ven though there is evidence in the legislative history that Congress may have additionally intended for section 2(c) to prohibit commercial bribery, it appears that the main purpose of section 2(c) was to close the ‘brokerage’ loophole in the laws regulating price discrimination.” Id. at 1388 (citations omitted). The court then concluded that “[i]n light of the primary purpose of section 2(c), this court believes that the antitrust injury requirement ... requires a plaintiff suing for treble damages for violations of section 2(c) to show that the probable affect of the discrimination would be to allow the favored competitor to draw sales or profits from him, the unfavored competitor.” Id. (quotations omitted). Generally speaking, then, these courts reason that because section 2(c) was “primarily” intended to protect competitors against price discrimination resulting from dummy brokers, the antitrust injury requirement in the context of section 2(c) requires a showing of an injury flowing from this practice.
Other courts have not interpreted the goals of section 2(c) so narrowly. In contrast to the above-сited cases, the court in
Edison Electric Institute
claimed that “[i]n enacting section 2(c), Congress had at least
two
objectives: to prevent large buyers from extracting hidden price discounts from suppliers in the form of ‘dummy brokerage’ payments; and to prohibit commercial bribery that tended to undermine the fiduciary relationship between a buyer and its agent,”
In the course of reaching this conclusion, the court discussed the purposes behind section 2(c). The court noted that while one main purpose behind section 2(c) was to prevent large buyers from using dummy brokers to circumvent discriminatory price prohibitions, Congress also intended section 2(c) to protect the fiduciary relationship between a broker and his client.
Id.
at 991-92. The court noted several passages from the legislative history to section 2(c) that the Supreme Court had cited in
Henry Broch & Co.,
There is a merchant in Virginia representing potato growers. He sells thousаnds of cars of potatoes a year, and our investigation has disclosed that he had a secret contract with a large mass corporate chain buyer by which he obligated himself to sell every car of those potatoes of those farmers to this large buyer .... This man representing the farmers sold those potatoes to that mass buyer, fixing the price himself, and what did he get out of it? He got a secret rebate of$2.50 to $5 on every car that the farmers knew nothing about .... That is the kind of dummy-brokerage arrangement we are trying to prohibit in this bill.
Stephen Jay,
This court concludes that it is a mistake to focus solely on the dummy brokerage/price discrimination purpose behind section 2(c). It may be the case that the dummy brokerage/price discrimination purpose fits more easily with the pro-competition purposes of antitrust law generally.
7
But this court’s job is to apply the law as written, not to second-guess the wisdom or efficacy of the statutes passed by Congress. Looking at the text and legislative history of section 2(c), there is no justification for implying that section 2(c) has only pro-competition purposes. As explained in
Stephen Jay,
one of the purposes of section 2(c) was to protect against “the corruption of an agency relationship.”
Id.
at 993. It is certainly debatable whether concern over the corruption of the agency relationship is a matter that appropriately belongs in the antitrust laws,
see
Keller W. Allen
&
Meriwether D. Williams,
Commercial Bribery, Antitrust Injury and Section 2(c) of the Robinson-Patman Anti-Discrimination Act,
27 Gonz. L.Rev. 167,177-78 (1990-91), but to date Congress has neither repealed nor rewritten section 2(c).
See
Hovenkamp ¶ 2340a, at 118 (noting that “[v]ery few statutes have survived such long-lived and unrelenting criticism as has been directed against the Robinson-Patman Act”). Accordingly, the court concludes that in the context of a claim under section 2(c), the antitrust injury standing requirement is met when a plaintiff alleges an injury flowing from “the corruption of an agency relationship.”
Stephen Jay,
In this case, the plaintiffs allege that Marriott served as the agent for In Town Hotels in procuring and purchasing goods and supplies for the hotel. In its capacity as the agent of In Town Hotels, Marriott received undisclosed payments and rebates from vendors for the opportunity to sell goods to In Town Hotels. These allegations fit the terms of section 2(c), which renders it unlawful “for any person engaged in commerce, in the course of such commerce, ... to receive or accept, anything of value as a commission, brokerage, or other compensation, ... except for services rendered in connection with the sale or purchase of goods, wares, or merchandise.” 15 U.S.C. § 13(c). It is also useful to compare the plaintiffs’ allegations
The plaintiffs allege that they were injured by this conduct in two ways: (1) they were deprived of the rebates and payments to which they were entitled, and (2) they lost business vis-a-vis their competitors, because they paid higher prices for their hotel supplies. 8 These injuries are typical harms caused by commercial bribery in the form of corruption of the agency relationship, and thus are injuries of the type that section 2(c) was intended to prevent. Accordingly, the plaintiffs have adequately alleged an antitrust injury, which gives them standing under section 4 of the Clayton Act to bring this private action. 9 Marriott’s motion to dismiss Count XIV is DENIED.
B. West Virginia Unfair Practices Act Claim
The plaintiffs also bring suit under a provision of the WVUPA, which states in pertinent part:
The secret payment or allowance of rebates, refunds, commissiоns, or unearned discounts, whether in the form of money or otherwise, or secretly extending to certain purchasers, special services, or privileges not extended to all purchasers purchasing upon like terms and conditions, to the injury of a competitor and where such payment or allowance tends to destroy competition, is an unfair trade practice ....
There are no West Virginia decisions interpreting this statute, but similar or identical Unfair Practice Acts exist in other jurisdictions. The court will therefore refer to caselaw in these jurisdictions for assistance in interprеting West Virginia’s UPA. Courts interpreting UPAs have generally held that a payment or rebate “to the injury of a competitor” includes injuries to the competitors of the party receiving the payment or rebate as well as the competitors of the party providing the payment or rebate.
See, e.g., ABC Int’l Traders, Inc. v. Matsushita Elec. Corp. of Am.,
It is true that the factual scenario presented by the plaintiffs’ allegations is atypical for a claim under Unfair Practices Acts such as West Virginia’s. UP As typically protect competitors of the seller from injury due to secret rebates given to buyers by that seller, or protect competitors of a buyer from injury due to secret rebates given that buyer by a seller. Courts have characterized Unfair Practices Acts as “prohibit[ing] sellers from giving secret discounts to certain purchasers when the discount ‘injures a competitor and tends to destroy competition.’ ”
Am. Booksellers Ass’n v. Barnes & Noble, Inc.,
This case is different, as it involves allegations of a secret premium, not a secret rebate. In Town Hotels does not allege, of course, that it received a secret rebate (nobody complains about unknowingly saving money), nor does it allege that its competitors received a secret rebаte in their purchase of goods. Rather, In Town Hotels in essence alleges that it incurred a secret premium on the goods it purchased. Specifically, In Town Hotels alleges that “it is restricted in its choice of and access to independent vendors and consequently has paid prices for goods, wares and merchandise that were higher than it would have paid in the absence of Defendants’ kickback scheme.” (Compl.t 176.) The idea here is that Marriott paid a premium for the goods it purchased from vendors on behalf of In Town Hotels, and that this premium was the benefit received by the vendors in exchange for their payments or rebates to Marriott. In other words, In Town Hotels paid above-market rates for goods, and Marriott and the vendors profited by splitting the difference.
Of course, the fact that this ease is not like most UPA cases does not mean that the plaintiffs have failed to state a claim— they may have struck upon a novel application of the law. The question is whether their claim meets the terms of the statutory language. The statute prohibits “[t]he secret payment or allowance оf rebates, refunds, commissions, or unearned discounts ... to the injury of a competitor and where such payment or allowance tends to destroy competition.” W. Va. Code § 47-11A-3. Here, the plaintiffs do allege a secret payment and allowance of commissions and rebates, namely payments and rebates paid to Marriott by
As explained above, the plaintiffs allege that they are in competition with Marriott, because Marriott owns, operates, or franchises other hotels. (Comply 178.) The plaintiffs further allege that as a result of the secret payments received by Marriott, In Town Hotels paid a higher price for goods than did its competitor hotels, some of which are owned or operated by Marriott. Accepting these allegations as true, the court agrees with the plaintiffs that the secret commissions operated “to the injury of a competitor” (In Town Hotels) of the party receiving the payment (Marriott). Furthermore, the commissions tended to destroy competition. The alleged secret commissions removed In Town Hotels’ purchase of goods from the competitive process and thereby eliminated competition in the provision of goods to the Hotel. Accepting the allegations as true, In Town Hotels’ purchase of goods was not based on the best price for the goods in question, but rather on which vendor was willing to pay Marriott the sponsorship fee.
In fact, the court has discovered one case holding (albeit indirectly) that a UPA covers the type of conduct alleged here. The case involved a prosecution for making a false statement on a tax return.
United States v. Di Girolamo,
In sum, the court concludes that the plaintiffs have adequately alleged a violation of W. Va.Code § 47-11A-3. Marriott’s motion to dismiss this count is therefore DENIED.
III. Avendra’s Motion to Dismiss
The other defendant, Avendrá, filed a motion to dismiss all of the counts against it. For the reasons discussed below, the court concludes that Avendrá is only entitled to dismissal of Count VI (fraud).
A. Dismissal based on the terms of the Contract
Avendrá first argues that all claims must be dismissed because the contract between In Town Hotels and Marriott specifically permits Marriott to (1) purchase inventories and supplies from itself or from Marriott affiliates such as Avendrá, and (2) make a reasonable profit on such transactions. Accordingly, Avendrá argues, the profits obtained by Marriott and Avendrá from purchasing hotel supplies are specifically permitted by the contract. According to Avendrá, Marriott’s and Avendra’s receipt of these profits cannot possibly constitute a breach of contract, breach of fiduciary duty, commercial bribery in violation of the Robinson-Patman Act, or any of thе other claims alleged. Avendrá bases this argument on language from section 1.02 of the Management Agreement between Marriott and In Town Hotels. That section provides, under the heading “Delegation of Authority,” that Marriott “shall have discretion and control ... in all matters relating to the manage
The plaintiffs respond by pointing to other sections of the Management Agreement that, they contend, prohibit Marriott from retaining profits related to their management of the Hotel except as provided in the management fee provision of the Agreement. Specifically, section 5.01.A of the Agreement provides that Marriott “will retain, as a management fee for services performed hereunder, an amount ... equal to twenty percent (20%) of Operating Profit.” (Compl. App. A, at 13.) Latеr, in section 5.01.D, the Agreement provides that “[n]o charges or fees are to be paid by [In Town Hotels] to [Marriott] except as provided in the Agreement....” (Compl. App. A, at 15.)
Considering only the face of the Agreement, the court cannot conclusively determine whether the Agreement expressly permits the payments alleged to be wrongful in this case. There is some force to Avendra’s argument that the phrase “purchases from [Marriott] and its affiliates shall be at competitive prices” contemplates that Marriott and its affiliates are permitted to profit from sales of supplies to the Hotel. The language of section 5.01.D of the Agreement, however, appears to restrict Marriott’s compensation to the management fee set out in the Agreement. This suggests that Marriott’s and Avendra’s receipt of these payments and rebates may not be permitted. Without some factual development in the case regarding specific details of the relationship between Marriott and In Town Hotels, the context and nature of the alleged rebates and payments received by Marriott and Avendrá, the course of dealing of the parties, and the standard practice in the industry, the court cannot resolve the tension between these two parts of the Agreement. The contract does not unambiguously authorize the allegedly wrongful rebates and payments to Marriott and Avendrá. At this stage of the proceedings, Avendrá is not entitled to dismissal of the counts against it based on the language of the contract. 12
B. Pleading Fraud with Particularity
Second, Avendrá argues that the claims for fraud, violations of the WVUPA, and aiding and abetting a breach of fiduciary duty must be dismissed because (1) all of these are fraud-based claims and (2) the plaintiffs have not plead fraud with particularity as required by Rule 9(b).
13
The court will first dispose of
The only claim that Avendrá has identified which
is
clearly subject to Rule 9(b) requirements is the claim for fraud itself. Avendrá is entitled to dismissal of this claim, as the plaintiffs have failed tо plead this claim with particularity as against Avendrá. Under Rule 9(b), “[i]n all aver-ments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity.” The Fourth Circuit has explained that “the ‘circumstances’ required to be pled with particularity under Rule 9(b) are ‘the time, place, and contents of the false representations, as well as the identity of the person making the misrepresentation and what he obtained thereby.’ ”
Harrison v. Westinghouse Savannah River Co.,
In its count for fraud, the plaintiffs allege that the defendants, including Avendrá, made false and misleading material statements and omissions, knowing that the statements were untrue, misleading, or lacking in material facts. Additionally, the plaintiffs allege that the defendants committed fraud by obtaining and retaining undisclosed kickbacks though their purchasing activities. The fraud
As to affirmative misrepresentations, Avendrá argues that the plaintiffs have failed to allege any such misrepresentation with particularity, as required by Rule 9(b). Avendrá correctly points out that while the complaint alleges generally that the defendants made false representations, the complaint does not specifically identify a single false representation made by Avendrá to In Town Hotels. The complaint alleges, for example, that “[djefen-dants have committed fraud ... by giving false information ... regarding related party transactions.” (Comply 119.) But the plaintiffs do not provide any specific examples of such information provided by Avendrá to In Town Hotels. This would leave Avendrá without knowledge of what information, if any, that it provided to In Town Hotels the plaintiffs believe to be false. The other allegations of affirmative misrepresentations fare no better. These allegations of affirmative misrepresentations by Avendrá to In Town Hotels lack the specificity necessary to provide Aven-drá with “the particular circumstances for which [it] will have to prepare a defense at trial,”
Harrison,
As for the allegations of material omissions, the plaintiffs correctly point out that when the allegation of fraud relates to an omission rather than an affirmative misrepresentation, less particularity is required.
See, e.g., Shaw v. Brown & Williamson Tobacco Corp.,
Finally, the plaintiffs allege fraud based on Avendra’s obtaining and retaining undisclosed payments related to purchasing activities. The court is unsure how this allegation fits in any way within the elements of common law fraud, which, generally speaking, are: “ ‘(1) that the act claimed to be fraudulent was the act of the defendant or induced by him; (2) that it was material and false; that plaintiff relied
In sum, the plaintiffs have failed to plead fraud with particularity as required by Rule 9(b), warranting the dismissal of Count VI (fraud). The plaintiffs’ other claims are not necessarily fraud-based and thus need not be plead with particularity. Finally, the contract does not unambiguously authorize the conduct alleged here. Accordingly, Avendrá is not entitled to dismissal of any of the remaining claims at this time.
IV. Conclusion
For the foregoing reasons, the court concludes that the plaintiffs have adequately alleged antitrust injury for their claim under section 2(c) of the Robinson-Patman Act and have adequately alleged the elements of a violation of the West Virginia Unfair Practices Act. In addition, Avendra’s arguments for dismissal of the claims against it are without merit, with the exception that the plaintiffs’ fraud claim against Avendrá is not plead with particularity as required by Rule 9(b). Accordingly, the court DENIES Marriott’s motion to dismiss Counts IV and XIV, GRANTS Avendra’s motion to dismiss as to Count VI (fraud) and DENIES that motion as to all other counts.
The court DIRECTS the Clerk to send a copy of this Order to counsel of record and any unrepresented party, and DIRECTS the Clerk to post this published opinion at htt'pj/ioww.wvsd.uscourts.gov.
Notes
. If it did, then the Fourth Circuit’s decision in Metrix Warehouse would provide a quick resolution to the antitrust injury requirement in this case.
. The only circuit court decision arguably adopting this approach is
Larry R. George Sales Co. v. Cool Attic Corp.,
Certain aspects of the court's reasoning appear to support the defendant's position. For example, the court stated that "[rjecovery and damages under the antitrust law is available to those who have been directly injured by the lessening of competition.” Id. at 271. At another point, however, the court stated that “[ojnly if Plaintiff was in the same business and in competition with [either the manufaсturer or the distributor] ... would he have standing.” Id. at 272. This implies that injury to an individual competitor, regardless of injury to competition as a whole, would suffice for antitrust injury standing. The lack of clarity on this point is understandable, as the plaintiff in Cool Attic lacked standing under either theory of antitrust injury. Because of the ambiguities in Cool Attic regarding the precise contours of antitrust injury, this court does not rely on that case.
. Several other cases are sometimes cited by courts as holding that injury to competition need not be alleged to satisfy antitrust injury for a section 2(c) claim, but these cases do not address the antitrust injury standing requirement directly and thus are not reliable precedent on point. For example, in
Fitch v. Kentucky-Tennessee Light & Power Co.,
. The plaintiffs quote at length from the court's decision in
Philip Monis.
This court has not discussed that case extensively, in part because the court does not fully endorse the reasoning in
Philip Morris.
For example, the court in
Philip Morris
declined to impose a "competitive injury” requirement on section 2(c) plaintiffs because, among other things, it concluded that commercial bribery always injures competition.
See Philip Morris,
. Indeed, as indicated in footnotes 2 and 3, no circuit court has directly addressed this issue.
. Stephen Jay simply hоlds the converse — that alleged commercial bribery that does not involve corruption of the agency relationship does not violate section 2(c).
. Although for that matter, it is not clear whether even this aspect of section 2(c) fits within the broader goals of the antitrust laws. Even as to its dummy brokerage/price discrimination function, section 2(c), like the Robinson-Patman Act as a whole, has been roundly criticized for being out of step with, and in some cases in direct conflict with, the general pro-competition aims of the antitrust laws. See Hovenkamp ¶ 2301 (explaining that price discrimination by a supplier among various dealers is not, absent market power, harmful to competition); id. ¶ 2362, at 234 (results under section 2(c) "can be quite at odds with general antitrust goals”).
. This second injury — the loss of business visa-vis competitors — sounds something like a "competitive injury.” Of course, this court has concluded that competitive injury need not be plead as part of the antitrust injury requirement in a section 2(c) claim. Accordingly, the court need not, and does not, evaluate whether this second allegation would satisfy that requirement. Some courts imposing a competitive injury standing requirement in section 2(c) claims have held that similar allegations are sufficient; others have held that such allegations are insufficient.
Compare Hansel ‘N Gretel Brand, Inc.,
. Marriott also argues that the plaintiffs fail to adequately allege antitrust injury because they do not allege facts sufficient to define the relevant market in which competition was impaired. Because the court has concluded that an injury flowing from a reduction in competition need not be alleged to satisfy the antitrust injury requirement in the context of section 2(c), the plaintiffs of course need not define the relevant market in which competition has been reduced.
. Section 47-11A-3 is actually a criminal statute that makes this conduct a misdemean- or. The plaintiffs may pursue a private cause of action based on this statute because West Virginia law creates a private right of action for unfair trade practices. See W. Va.Code § 47-11A-9.
. Marriott cites
Marco Marine
for the contrary proposition that UPAs only cover injury to a competitor of the party granting the rebate, not the party receiving the rebate. But
Marco Marine
holds to the contrary. The court specifically rejected the defendant’s contention that the Act "does not apply to buyers who receive secret allowances of unearned discounts, but only to the sellers who provide them.”
Id.
at 214,
. In addition to this general argument that the contract explicitly permits the alleged wrongful conduct, Avendrá presents several arguments that depend necessarily on the court accepting this conclusion. For example, Avendrá argues that the claim for aiding and abetting a breach of fiduciary duty must be dismissed because there can be no breach of fiduciary duty in the first place when the contract explicitly permits the conduct alleged. As the court has rejected the premise upon which all of thesе arguments rely, they are likewise without merit and do not warrant further discussion.
. In its memorandum in support of its motion to dismiss, Avendrá initially states that the plaintiffs must comply with Rule 9(b) in their claims for "fraud, violations of the West Virginia Unfair Practices Act, and breaches of fiduciary duties .... ” (Avendrá Memo, at 4.) At the conclusion of this argument, however, Avendrá states that "[bjecause all of the claims against Avendrá allege intentional, fraudulent conduct, Plaintiff's failure to satis
. When, as here, the plaintiff relies on a contract in its complaint, and indeed includes a copy of that contract as an attachment to the complaint, “it [is] proper for the district court to consider it in ruling on [a] motion to dismiss.”
Darcangelo v. Verizon Comms., Inc.,
. Indeed, Avendrá was not created until years after the Agreement was signed.