*1 showing of do not pretext a weak increasing does not prices real reason con- of a a reasonable inference support interde- real was reason whether show Granted, Therefore, we held that some spiracy. alle- conspiracy. or a pendence individually was insufficient this evidence accompanied by pretext gations more,” together, taken but “without evidence or traditional other provide not evidence does aforementioned a reasonable to create economic evidence summary “more” to survive necessary such conspiracy. Because of a inference short, all of this evidence is here, judgment. any evi- lacking is other evidence interdependence as with consistent with preclude is insufficient pretext dence such, not it does tend conspiracy, summary judgment. that the Choco- possibility to exclude the Summary as a lawfully. of the Evidence acted D. late Manufacturers
Whole exactly Although analysis does not our as a
Considering Court’s, evidence agree we mirror District whole, to create a failed the Plaintiffs the evi- the District Court’s conclusion: judg- the Chocolate summary reasonable inference calls for in this case dence likely more than not con Manufac- Manufacturers of the Chocolate ment favor chocolate to fix the U.S. spired prices turers. cases where to other Compared
market. summary should judgment
we decided y. Plaintiffs’ case granted, have been reasons, af- will foregoing For we Glass, Flat relatively weak. here Cf. judg- summary firm the District Court’s (reversing summary judg F.3d at ment. part on based ment the defendants re price increases
evidence about competitors
quired cooperation suspiciously price increases
coordinated meetings in time to and communica
close conspirators); Petruz involving the
tions
zi’s, (reversing at 1234-37 sum
mary judgment for defendants based LLC; LLC, SD3, Sawstop testimony a “code” about on witness Plaintiffs-Appellants, among compete not to defendants existing and about discussions of accounts meetings; fixing trade association
price (U.S.) INC.; Black BLACK & DECKER conspirator in which a taped conversations Chang Type Corporation; & Decker by the company “play told another Ltd.; Co., Delta Power Industrial rules”; showing and economic evidence Co., Equipment Corp.; Hitachi Koki explanation for the that the rational Ltd.; Ltd.; Hitachi Koki USA Makita conspiracy). data an unlawful price was U.S.A., Inc.; Corporation; Makita Corp.; Electric One foreign con- Milwaukee Tool Evidence of a disconnected Inc.; In Technologies, OWT possession of advance World spiracy, limited dustries, Inc.; GmbH; information, Robert Bosch opportunities mere pricing Ryo Corporation; Robert Tool conspire suspect meetings or con- Bosch without Inc.; Stanley Technologies, Black bi pricing, versations about conduct Inc.; Industries, Decker, conduct, Techtronic & pre-conspiracy consistent with *2 Co., Ltd.; Techtronic Industries North
America, Inc.; Group, Pentair Water
Inc.; Company; Emerson Electric
Pentair, Inc., Defendants-Appellees, Tools;
Dewalt Industrial Emerson Elec Company, Inc.;
tric Corpora Pentair
tion; Corporation; Porter-Cable Skil Tools,
Power Defendants. Institute;
American Antitrust National League,
Consumers Amici
Supporting Appellants.
No. 14-1746.
United Court of Appeals, States
Fourth Circuit.
Argued: May 2015.
Decided: Sept. 2015.
As Amended on Rehearing
in Part Oct. *5 Davidow, Joel
ARGUED: Cuneo Gilbert Laduca, LLP, D.C., & Washington, for Appellants. James Scott La- Ballenger, Watkins, LLP, D.C., & Washington, tham Appellees. for ON BRIEF: Jonathan W. Cuneo, Miller, Matthew E. Cuneo Gilbert Laduca, LLP, D.C., Washington, & Appellants. Harkrider, John D. Richard Axinn, B. Dagen, Veltrop & Harkrider LLP, D.C., Washington, Bernard DiMu- J. ro, PC, Alexandria, Dimuro Ginsberg Vir- ginia, Appellees Stanley Black Deck- & er, (U.S.) Incorporated, Black & Decker Incorporated, and Black & Corpo- Decker *6 ration; Yates, Christopher Christopher S. Chiu, B. Campbell, Aaron T. Latham & LLP, Francisco, California, Watkins San for Appellee Company; Emerson Electric Devinsky, Meisner, Paul Stefan M. LLP, Emery McDermott Will & Washing- ton, D.C., for Appellees Hitachi Koki USA Co., Ltd.; Ltd. Hitachi Koki and Lee H. Simowitz, Elizabeth A. Scully, Katherine McKnight, LLP, L. Baker Hostetler & D.C., Washington, Appellees for Makita Incorporated Corpora- USA and Makita tion; Foster, D.C., Washington, David M. Kruse, Layne Turner, E. Eliot Fielding LLP, Houston, Fulbright & Jaworski Tex- as, Appellees for Robert Bosch Cor- Tool poration GMBH; and Robert Bosch James Kress, L.L.P., G. Baker Washington, Botts D.C., Hansen, Bogart, W. Scott Steven P. Law, James N. Reinhart Boerner Van Milwaukee,' Wisconsin, any manipu- allege S.C., plausibly to. Deuren standards, safety affirm the late so we Corpo- Electric Tool Milwaukee Appellees court’s decision to dismiss SawS- district Incorpo- ration, Technologies, One World concerning standard-setting. top’s claims Industries, Ryo- rated, Incorporated, OWT Likewise, allege complaint any fails Incorporated, Techtronics Technologies, bi corporate par- against facts at all several Ltd., Co., and Indus- Techtronic Industries affiliates, so we affirm the district ents America, Seth Incorporated. tries North all claims decision to dismiss court’s Golden, Greenstein, D. Constan- David D. against those defendants. D.C., LLP, Washington, tine Cannon Amici Curiae. defendants, remaining But as suggest alleged enough to has WILKINSON, AGEE, Before in a engage group plausible agreement WYNN, Judges. Circuit may Although that claim boycott. trial, or even prove ultimately successful judgment, summary survive enough offers to survive the defendants’ well-pleaded com- motion to dismiss. “[A] may even if it strikes a plaint proceed savvy judge proof actual of those facts recovery improbable, very and that Corp. unlikely.”1 Bell Atl. remote and AGEE, Judge: Circuit 544, 556, Twombly, 550 U.S. S.Ct. SD3, SawStop, subsidiary, (2007). Thus, LLC and 167 L.Ed.2d we (together, “SawStop”), contend that LLC court’s vacate district decision dismiss- manufacturers claim major ing SawStop’s group-boycott several table-saw re- .and boycott SawStop’s safety proceedings. mand for further conspired to safety- technology corrupt a private Background I. all the aim standard-setting process, technology keeping that off the market. Relevant Facts A. nearly two Consequently, sued This concerns a decision appeal en dozen saw manufacturers and affiliated dismiss, motion to so we draw the relevant tities, § they 1 of the alleging violated allegations in SawStop’s facts Act, § 1. Sherman Antitrust U.S.C. incorporated complaint and from sources SawStop’s amend district court dismissed reviewing “In complaint. into *7 on, among based other ed complaint, of a we must assume dismissal SawStop that had failed to things, belief well-pled to be true and draw all all facts establishing agree facts an unlawful plead plain- in favor of the reasonable inferences SDS, Decker ment. See LLC v. Black & Futrell, Cooksey tiff.” (U.S.), Inc., 11:14-cv-191, 2014 WL No. (4th Cir.2013). Keeping that standard in (E.D.Va. 15, 2014). July SawStop mind, we now consider the relevant facts. appealed. 1. agree court
We with the district founder, 1990s, Dr. parts SawStop’s go SawStop’s cannot In the several case Gass, Stephen created a form “active SawStop’s complaint forward. does not opinion, any throughout unless otherwise quotation and this 1. We have omitted internal marks, alterations, emphasis, citations here noted. (“AIMT”) dents, injury mitigation technology” produced positive which results. ¶¶ 70, finger meant some' hand and J.A. 87-88' 74. prevent terms, In injuries table basic saws. Still, table-saw manufacturers also held technology Gass’ “detects contact between reservations, one of which product was person stops and then and and blade liability If exposure. some manufacturers mitigate injury.” the blade retracts adopted not, AIMT while others did then ¶ system J.A. 83 60. When this works as an issue could arise as to whether the non- should, user table-saw who makes adopters might producing be sued for will contact with the blade suffer ¶81. inherently unsafe product. J.A. 90 injury. small nick rather than more serious lawyer But a for one defendant noted the AIMT technology might be deemed sought Gass his initially and co-inventors infeasible, and therefore less relevant capitalize on their invention pursuing suits, product-liability if it did not enter licensing agreements major with the table- the market for period. some J.A. 8788 saw began manufacturers. The effort ¶ 72. August SawStop when took a first “prototype table saw” to a show trade Putting product liability, aside saw some publicly technology. demonstrate the J.A. concerns, manufacturers held other includ- ¶ spurred 66. That demonstration ing that engineering and cost factors could meetings some table-saw manufactur- technology By render the infeasible. all ers, including S-B Power Corp.; Tool accounts, not yet had tested its (U.S.), Inc.; Black & Decker Emerson technology marketplace. in the That test- Company; Ryobi Electric time, Technolo- ing would take some ¶ gies, During Inc. 86 67. J.A. these meet- itself estimated the device not could ings, SawStop sought royalties “typical fully implemented have been on all table ¶ commercial rates” of about “8% of whole- until late saws as 2008. J.A. 90. sale prices” any license agreement. industry least one At insider also believed ¶ J.A. 86 65. AIMT SawStop’s could induce con- dispense safety sumers to with other fea- The technology “impressed” manu- ¶ Furthermore, 87 71. tures. J.A. AIMT ¶ facturers. J.A. for in- Ryobi, 87 68. prevent certain other did common ta- stance, formed a team determine injuries, ble-saw like kickback. Id. incorporate SawStop’s whether it could SawStop’s licensing discussions did not technology products; Ryobi’s into its coun- produce any sel immediate results. man- adopt technology wanted to One “as ¶ ufacturer, Tool, fast S-B Power ended licens- they J.A. 87 S-B [could].” 69. ing in September discussions 2001. J.A. expressed Power Tool likewise interest ¶ ¶ 75. “going forward.” J.A. 88 73. One Black
& employee Decker U.S. told that he Gass licensing felt a agreement was “inevit- ' able,” though even Black & Decker was October table-saw manufactur- being guys.” “used to able to crush met allegedly little ers how to “decide[d] *8 ¶ J.A. respond, 88 76. Emerson’s to then-president industry, SawStop ¶ in-person also meetings SawStop [technology.” meeting held with J.A. 80. to a potential conjunction discuss deal. 88-89 in with J.A. occurred the annual (cid:127) ¶ Institute, 77. Several manufacturers Tool meeting conducted' of the Power a SawStop’s technical studies to evaluate ef- annu- trade association. Like broader in preventing rep- fectiveness acci- meeting, table-saw al the table-saw session drew communications, SawStop’s to industry, sponding in- across the from resentatives Tool; Ryobi; explained Makita its failure to commu- Power and never cluding S-B Emerson; Corp.; USA, Porter-Cable Inc.; Similarly, Emerson nicate further. Id Ltd.; Black & Decker Koki USA Hitachi “offering pre- negotiations, ended abruptly Corp. Tool U.S.; Electric and Milwaukee its lack of interest.” textual reasons for ¶89 79. J.A. ¶88. & U.S. Black Decker J.A. 92 And and made “disingenuous a not 2001 offered alleges that the October SawStop group boycott royalty, paired 1% meeting good birth to faith” offer: a gave first manufacturers SawStop. The indemnification against provision with an take an “all” or to purportedly determined liability SawStop for placed have all “nothing” in which table-saw approach, ¶ risks.” 92 89. “various J.A. SawStop’s adopt
manufacturers would J.A. 89-90 none would.
technology or 3. ¶ Then, took latter they allegedly 80. purchase tech- “agree[d] not to path: they any Having sign failed to manufacturer [SawStop] from or other- nology licenses turned licensing agreement, SawStop to a ¶ J.A. 90 80. AIMT.” implement wise organi- safety-standard-setting to private contrary views articulated.” [were] “[N]o Laboratories, zation, Inc. Underwriters market, of the By SawStop out keeping Id. In (“UL”), AIMT product. to advance the that “it would hoped the manufacturers proposal December Gass submitted plausible for [them] ... at least remain organization suggesting to UL contend, defending liability law- product widely accepted safety stan- modify its suits, AIMT was not viable.” J.A. on all table saws. require dards to AIMT ¶ 81. ¶ in turn 104. referred J.A. 96 UL contends, Ultimately, SawStop Panel 745 to Standards Technical proposal succeeded.- Defen- group boycott “[T]hose (“STP 745”), a that sets subgroup UL negotiations with yet license dants not ¶ 104. for saws. J.A. 96 standards table li- requesting SawStop refrained SawStop’s modify the UL proposal cense, who al- Defendants were [while] failed, SawStop alleges standards ways found to abort ready negotiations conspiracy, failure traces to a second arose.” opportunities them J.A. “standard-rejection term the which we will ¶ 85. view, SawStop’s In STP conspiracy.” complaint, to the took According “under the firm control of the Defen- was months the few defendants a matter of dants,” comprised as its “either members negotiating with who had been pur- or ... employees the Defendants ways find to end those discussions. consultants ... who portedly unaffiliated instance, January Ryobi had Defendants.” J.A. 97 aligned agree- agreed licensing to a non-exclusive ¶ Thus, allegedly 106. the defendants royalty initial a 5% ment with an 3% to vote as a bloc” “thwart” “agreed ¶87. 91-92 to 8% escalator clause. J.A. ¶ vote, J.A. 105. After the proposal. however, identified “minor am- SawStop, “promul- are said the defendants Ryobi biguity” agreement in the and asked falsehoods, ¶ gated factual distortions “error.” Al- to correct the J.A. that STP product defamation” ensure assured though Ryobi’s counsel incorpo- any standard adopt 745 would happen, Ryobi that would instead ended ¶ 123. entirely; re- AIMT. J.A. 101 negotiations Ryobi stopped rating *9 4. SawStop further believes that the manu- trying facturers are to extend the con- Later, alleged the defendants are abroad, trived-standards additionally conspired develop they “control” International Electro-' standards, safety purportedly their own Commission, European technical coun- impose unnecessary SawStop costs on and ¶ terpart to UL. J.A. 122. any adoption foreclose wide of AIMT. SawStop says imple- that the defendants 5. conspiracy multiple mented in stages. this SawStop maintains that all of the al- First, in October several defen- leged conspiracies have through continued Hitachi; Corp.; dants —Black & Decker today, and the defendants purportedly Pentair, Inc.; Corp.; Robert Bosch Tool weekly communicate “to maintain” the GmbH; Ryobi; Robert Bosch One World ¶ conspiracies. J.A. 121. Nonethe- Inc.; Technologies and Techtronics Indus- less, SawStop eventually was able to enter Co., joint tries Ltd.—formed a venture to by making the market its own table saws develop technology. blade avoidance J.A. ¶ employing ¶ AIMT 2004. J.A. 101. SawStop 109. maintains this SawStop When filed its it complaint, sold venture was a mere “smokescreen” to types three of these J.A. saws. 95-96 “fend off” intervention the Consumer ¶ company represented The at oral Commission, Safety Products a federal argument it now makes additional safety agency, and an constituted “act of models. fraudulent The concealment.” Id. venture Later, produce any
failed to results. Proceedings B. Below November four defendants —Black & USA, Corp., Decker Makita Robert Bosch Based on three purported conspira- cies, Corp., Tool and Techtronic SawStop Industries filed a complaint Febru- joint ary North America—formed ven- another 2014 in U.S. District Court for the ¶ venture, too, ture. J.A. 98 111. This Virginia. Eastern original District The alleged develop was fake effort “to complaint against be three-count 22 separate guard pre- a uniform blade standard to defendants the manufacturer- quality competition guard defendants, clude on conspiring blade with UL and the Institute, § standards.” Id. Members of the Power Power Tool 1 of violated began Tool Institute also on a work new Act. After the Sherman defendants moved guard dismiss, however, design blade around the same time. filed a first plead- amended complaint operative —the conspiracy, This third which we will call ing appeal dropping some defendants — conspiracy,” “contrived-standards led adding three new counts under state two changes by adopted standards UL convenience, law. For we to the refer first in 2005 change and 2007. first added amended “the com- complaint simply certain anti-kickback devices. The second plaint.” “specified guard that the blade should not hood, but rather a design SawStop’s modular The district court dismissed top-barrier with a element two side- under Federal Rule Civil ¶ 12(b)(6) guarding identifying barrier elements.” J.A. 99 115. Procedure after change problems maintains that this number of that it perceived second ineffective; First, too designed-focused alleged. the facts “Plaintiffs’ con- change allegations deduces that therefore their spiracy [were] belied illegitimate purpose. history negotiating varying serve Defen- *10 422 v. 3500674, [SawStop].” .States Tri SDS, LLC, able to United 2014 WL
dants.” 628, Inc., 632 1 775 F.3d n. view, ple Canopy, SawStop court’s In the district *3. however, (4th Cir.2015). not, We do “ac a to deal allege refusal plausibly not could couched as a cept legal conclusion as true actually had of- several defendants when v. Ocwen Loan allegation.” factual Anand deal, alleged the facts did fered to (4th LLC, 195, 198 754 F.3d Servicing, explana- lawful to exclude” “tend[] not Cir.2014). accept do we “unwarrant Second, Nor failed SawStop Id. *4. tions. conclusions, inferences, unreasonable ed as to several defen- allege anything to rel. Oberg ex arguments.” United States lump them to- dants, choosing instead Agency, Higher Educ. Assistance v. Pa. explana- without complaint in the gether (4th Cir.2014). 131, We can 745 136 F.3d Third, SawStop allege did not tion. Id. any “naked assertions put further aside by refer- agreement evidence” “direct enhancement.” of further factual Ryobi devoid engineer, from a ring testimony Id. court found that Peot. The district David full read in its testimony, when
Peot’s Parents Allegations Against III. context, only that certain defen- indicated and Affiliates develop joint venture to launched dants prevent table-saw accidents. technology begin by addressing problem com- We Fourth, SawStop had estab- not Id. at *5. complaint. mon to all counts any alleged any harm from lished § in a 1 case cannot plaintiff A “purported moti- conspiracies because collection of defendants assemble some conspiracy is non- alleged for the vation vague, non-specific allega make and then fifth, SawStop’s stan- Id. And existent.” group. tions all of as a At against them alleged nothing dard-setting conspiracies trial, required plaintiff §a 1 will be in trade ordinary participation than more showing a “factual that each defen make standard-setting organizations, groups, conspired dant violation of antitrust ventures, does not create joint which AD/SAT, Skylight, Div. Inc. v. laws.” at *6. liability. Id. (2d Press, 216, 181 234 Associated F.3d SawStop timely appealed, challenging Cir.1999); Foley, United States 598 cf. three court’s decision to its the district (4th Cir.1979) (examining F.2d Act claims. does Sherman charge jury in a criminal anti whether the district court’s decision to dis- address “require[d] involve trust case a sufficient remaining state claims. its three law miss defendant”). Thus, the com ment each claims, SawStop has forfeited As to those plaint showing, must forecast that factual review, and we not consider them. See do to allege particular and if it fails facts LLC, XVI, Acquisition v. Palisades Powell defendant, against then the particular Cir.2014). (4th F.3d We must be other defendant dismissed. § jurisdiction under 28 U.S.C. words, “specify how involved these defendants [were] II. of Review Standard relying on “in conspiracy,” without all against of determinate assertions” “defen grant review the district court’s ‘We Agent de In re Travel Comm’nAnti motion dismiss dants.” defendants’ (6th Towers, LLC, Litig., 781 trust 583 F.3d Cir. novo.” Johnson v. Am. (4th Cir.2015). 2009); Planning accept see also Total “[W]e F.3d Benefits Cross & complaint Agency, in the Inc. v. Anthem Blue Blue well-pled as true all facts (6th Cir.2008); Shield, favor 552 F.3d light and construe them in the most Litig., to tie Elevator Antitrust tries other In re defendants *11 (2d Cir.2007). purported conspiracies the nothing 50-51 conclusory statements, more than even Nevertheless, SawStop to means though those defendants entered the table- corporate par some bring against claims industry saw well after conspiracies these Ltd.; Co., Hitachi Koki including ents— Decker, allegedly began. Stanley & Black Chang Type Indus Corporation; Makita Inc., instance, is purportedly liable be- Co., Ltd.; Industries trial and Teehtronic “persons cause speaking company] for [the Co., though allega no factual Ltd.—even understanding have affirmed its of the Instead, against tions are made them. of purpose conspiracies], and agreed [the of SawStop nakedly alleges only that all ¶ participate to 99 117. [them].” J.A. corporate are “dominated subsidiaries SawStop alleges the same to Delta Pow- of,” ego[s] these by, corpo alter [are] ¶ er Equipment, Inc. J.A. 99 116. “[U]na- parents. allegation rate J.A. 73-78. That conclusory allegations” dorned like these conclusion, only legal a offers Vitol, to at allegations akin no all. of alleged suggesting no the kind has facts Co., Shipping S.A. v. Primerose 708 F.3d usually require that we unity of interests (4th Cir.2013). 527, 543 plead to to party permitting before them reasons, SawStop For these pro- cannot See, ego theory. an e.g., advance alter against ceed all the defendants. In Trust, P’ship, Flight C.F. Inc. v. First Ltd. Co., Ltd.; particular, Hitachi Koki Makita (4th Cir.2002). “The 306 F.3d 134 Co., Corporation; Chang Type Industrial may separate legal fact that two entities Ltd.; Industries, Inc.; OWT Pentair Wa- corporate have a affiliation does not alter Inc.; Decker, Group, Stanley ter Black & requirement” separately pleading [the] Inc.; and Equipment, Delta Power Inc. pleading require each identify .defendant’s must be dismissed as to all counts. The separately identify ment each defen group-boycott against claims Teehtronic Litig., dant’s Antitrust No. 13-md-2481 America, Industries North Inc. and Teeh- (S.D.N.Y. (KBF), *2 WL Co., tronic Industries Ltd. must also be 23, 2015). Mar. correctly dismissed. The district court any allege also fails to because, dismissed these defendants certain pertaining corporate facts them, “complaint least as to was vague, discussing case, subsidiaries. explained never and lumped boycott, group example, SawStop never together without sufficient detail.” [them] City Chicago, mentions Teehtronic Bates v. 726 F.3d Industries North (7th Cir.2013). America, Inc.; Industries, Inc.; or OWT Group, Pentair Water Inc. OWT Indus- We now consider whether has tries, Inc. Group and Pentair Water also an properly alleged conspiracy antitrust go SawStop’s allegations unmentioned in remaining against manufacturers. safety A as to the UL standards. defen- § Pleading Conspiracy IV. obviously may pursue
dant
not
antitrust
against
claim
a defendant who is not al-
Section of
Sherman Antitrust
leged
have done
at all. Anti-
anything
contract,
“[e]very
prohibits
Act
combina
recognize guilt by
trust
law doesn’t
mere
...,
tion
or
in restraint of
association, imputing corporate liability to
§
1§
1. “To
trade.”
U.S.C.
establish
unlucky
violation,
any
company
enough
affiliate
a plaintiff
prove
(1)
bystander
contract, combination,
company’s
be a
to its
conspiracy;
sister
(2)
imposed
restraint
alleged misdeeds.
an unreasonable
.
ade-
facts
point
supply
fied
does
[also]
Bd
Dental
N.C. State
of trade.”
(4th
illegality.”
Id.
FTC,
quate
show
Exam’rs
Cir.2013).
bottom, Twombly
long-
applies
At
plead
principle in antitrust law to
held
principally concerns
appeal
This
conduct,
alone,
standing
stage: parallel
ing
element,
conspiracy. “[Sec
first
required agreement
not establish
does
against restraint
prohibition
one’s
tion
lawful
consistent with
equally
because
action,
to concerted
applies only
trade
Twombly plaintiffs asked
conduct. The
*12
relationship
of a
requires evidence
which
reject that idea and assume a
the Court to
per
legally
at
two
distinct
least
between
“exclusively”
action that
Robertson v. Sea Pines
or entities.”
sons
in
coincidentally
to be
too
similar
seemed
(4th
278,
Cos.,
F.3d
284
Estate
679
Real
11,
565 n.
127 S.Ct.
dependent.
Id. at
Cir.2012).
actionable, the defen
To be
refused,
good
1955.
Court
a “con
made
specifically
must have
dants
interdepen
conduct
reason.
“Parallel
or
ato
common scheme
commitment
scious
dence,”
all,
“just much in
after
as
line
objective.”
to
an
designed
achieve
unlawful
competi
a wide
of rational and
swath
Corp.,
Spray-Rite
v.
Serv.
Monsanto Co.
unilaterally
strategy
prompt
tive business
1464,
752, 764,
79
104
465
S.Ct.
U.S.
market.”
by
perceptions
ed
common
of the
(1984). Not
L.Ed.2d 775
even “conscious
554,
Thus,
com
at
127
1955.
Id.
S.Ct.
enough,
Grp.,
Brooke
Ltd.
parallelism” is
Twombly
failed
it rested
plaint
because
Corp.,
Tobacco
v. Brown & Williamson
parallel
of
“descriptions
conduct”
227,
2578,
209,
113 S.Ct.
125
509 U.S.
just
explained by
could
as easily
that
be
(1993),
action
“independent
168
as
L.Ed.2d
“natural, unilateral
from each
reaction[s]”
1,”
Vermiculite,
§by
Va.
proscribed
not
564, 566,
1955;
defendant.
Id. at
127 S.Ct.
Inc.,
Springs,
v.
307
Ltd. Historic Green
Robertson, 679
at
see also
F.3d
289
Cir.2002).
(4th
277,
F.3d
280
(“Twombly required
evidence to
contextual
speculative claim about the
substantiate a
plaintiff
a
Accordingly,
bringing
of
conspiracy.”).
existence and substance
a
plead
agreement
§ 1 claim must first
an
a
Corp.
survive, then,
§
In Bell
v.
For
1 claim to
to restrain trade.
Atlantic
conduct,
544, 556,
parallel
127
plaintiff
plead
U.S.
S.Ct.
must
Twombly, 550
(2007),
1955,
Supreme
something
Twombly,
“more.”
ing explanations!)]”). stop “decision to fendants’ sudden deal- ing,” “abrupt which was an shift dissent, however, unwilling provided more to infer a past,” reason allegation' to credit factual SawStop’s agreement). part, horizontal For its Black paths negotiations the different were purportedly & Decker tendered USA *16 conspirato themselves of the claimed part “not “disingenuous” offer that was made that, in crediting rial ruse. It contends ¶92 good Assuming in faith.” J.A. 89. SawStop’s allegation, we “underestimate[ ] (as is accurate that characterization we difficulty competi of getting group the must), would benign purposes few agree tors to on a course of action that by served an offer. such separate negotiations may may contract or more, require not have in best com But the dissent would shown to be their stage of Dissenting op. early proceedings; mercial at even at this the interest.” 450. only when thing “parallel But the could be said about it would find conduct” same any lockstep, com move relative alleged agreement most between defendants anticompetitive yet achieving law their common peting businesses—and the has (exclusion) only by substantially way iden- to perfect ends close tandem: some defen tell, tical far as we can this means. So dants not act to implement did the com support any existing standard finds no mission-fixing agreement until months af authority. formed, ter it while at least one defendant implemented commissions the new before decisions that dis The three at formed. Id. 1332-34. support sent proposed cites do not Still other only “partially” defendants rule,- they all involved non-parallel joined, taking commissions higher when pricing “ends.” One involved inconsistent but available pursuing otherwise lower in an alleged price-fixing conspiracy, see Foley ones. Id. Had been decided under City Moundridge Corp., v. Exxon Mobil framework, the dissent’s “divergent these (D.D.C.2006), F.Supp.2d 131-32 paths to the same (higher end” commis wildly varying while another addressed sions) apparently required re (in surcharges timing) amount both Court, versal of the convictions. The alleged conspira an fuel-surcharge-fixing however, reached a different result —it af France, cy, Societe LaFlamme v. Air firmed all nine criminal convictions after (E.D.N.Y.2010). F.Supp.2d finding agreement. sufficient evidence of last, appeal summary an from a judgment Foley, then, Id. at effectively 1335. re decision, held that the had defendant jects proposed methodology. the dissent’s not parallelism established conscious we Lastly, disagree that defendant; assumed, dissent’s part it of one however, imposing definition needed to avoid anti- par that the actions were liability trust on innocent activities. The allel. Gallery, See Cosmetic Inc. v. (3d dissent if proceeds finding parallel Corp., Sehoeneman Cir.2007). inexorably best, liability. conduct leads to But At these cases stand for Twombly’s principle foundational is that proposition: parallel unremarkable con conduct, alone, parallel standing is not parallel duct must produce results. And enough impose liability. antitrust they recognize very further so point words,' plaintiffs other showing initial hotly parallel contested the dissent: parallel conduct is only step an initial exactly conduct “need not be simultaneous multi-step process. It is the additional give and identical in order to to an rise LaFlamme, steps required plaintiff of an agreement.” inference of are meant ensure that business 151; F.Supp.2d City Moundridge .innocent cf. activities are not tarred as antitrust viola- Corp., Exxon Mobil Civil 04- Action No. tions, 940(RWR), whether the motion-to-dismiss 2009 WL at *5 (D.D.C. 2009) stage later. Sept. (“Price-fixing can occur though price even increases Thus, think plain we identical in absolute or relative alleged parallel remaining conduct. The terms.”). question pleads is whether also requisite “point[s] “more” that toward precedent
Our own
does not
support
of the
Take,
meeting
Twombly,
minds.”
example,
dissent’s view.
United
557, 127
U.S. at
S.Ct.
(4th
States v. Foley,
brokers 1 violating by § were convicted of conspiring to fix real estate commissions. has the “more” alleged It seems an that say necessary paral understatement to move its of allegations the Foley any defendants did not plausibility. move in lel conduct into the realm of
430 (4th Balt., 500, 791 F.3d 511 pled claim the Council group-boycott The Cir.2015) (“A not be dis- complaint should story. SawS- a detailed
complaint builds
time,
long
provides
as it
sufficient
place, missed
particular
the
top identifies
claim to
that
detail about the
show
the
initially
the boycott
and manner in which
has
a more-than-conceivable
plaintiff
formed,
separate meeting
a
describing
merits.”).
on the
Detail
chance
success
the Power
purpose during
held for that
complaint
in a
of “further circumstances
meet
2001 annual
Tool Institute’s October
minds”
meeting
¶¶
a
of the
pointing toward
com
The
See J.A. 89-90
ing.
allays
suspicion
plaintiff
The
that
the
six
individu
specific
at least
plaint names
merely
a
into exis-
speculating
conspiracy
boycott,
forming
the
part
took
als who
coincidentally
from
action.
tence
similar
each
osten
person
which
noting
defendant
557,
Twombly,
¶¶
at
431
detailed al- not
complaint’s
believe the
“forecast evidence”
support
doesn’t
its theo
Robertson,
legations,
skepticism
that
does not
ry,
291,
but
679
F.3d
SawStop’s
“conclusory.”
allegations
render the
See
complaint
by referencing
does so
testimo
(ex-
681,
(the
not smaller
(7th Cir.2002).
event,
which,
any
651,
“minds”
in
656
Fewer
post-2004 actions—
in
market.
in the
“meet”
a concentrated
complaint— must
fully
are
discussed
not
evaluating
complaint implies
manu-
that the table-
help in
the
And the
much
not
concentrated,
is so
the de
saw market
potential motives.
facturers’
of
purportedly
here
control 85%
fendants
“who, what, where,
if
Even
the
¶¶44,
see,
48;
e.g.,
market.
J.A.
81
when,
enough, the com
why”
and
were not
Starr,
(listing
defen
directly it. address The court district re involving In viola “per only cases se” in passing marked SawStop that had Act, however, tions of the Sherman this boycott to establish a orga “fail[ed] naked anti-competitive essentially pre harm is nized for concerted refusal to deal.” SD3, LLC, agreements prac 3500674, sumed. or 2014 “[C]ertain at WL *5. It did “pernicious further, tices” have such a effect on not the discuss issue and offered competition” they conclusively- that “are cursory citation to Northwest to be unreasonable presumed and there similarly Wholesale. manufacturers illegal assert, fore elaborate as to inquiry without explanation, without that precise they the harm” that caused. allege any per “failed to se violation of the TFWS, 198, Schaefer, Inc. v. 242 209 F.3d Sherman Act.” Response Br. 58. (4th Cir.2001). agree that Claims such the competitive Because issue of harm is anticompetitive
ments
...
“lacked
effects
briefed,
inadequately
and
because
dis-
simply
irrelevant.”
In re Cardizem trict
opinion
gives
court’s
likewise
us no
(6th
896,
Litig.,
CD Antitrust
332 F.3d
909
guidance, we cannot
that
decide
issue or
.2003).
Cir
affirm on that basis.
If the manufacturers
choose, however, they may again
so
raise
Although the manufacturers
contend
competitive
the issue of
harm before the
allege anticompeti
that
failed
district court on
it may
remand so
harm,
al
SawStop maintains that its
tive.
fully
the question
consider
discuss
leged group boycott violates the Sherman
of proper argument.
the benefit
per
separate allega
Act
se—such that no
necessary.
tions of harm were
some
“[I]n
E.
boycott
circumstances a
con
group
may be
per
Pip
sum,
SawStop’s
sidered
se violation.” Precision
complaint
very dif
ing
Instruments,
&
Inc. v. E.I.
de
in
du Pont
ferent
from the one
Twombly,
seen
(4th
Co.,
613,
Nemours &
617 4
solely
“descriptions
n.
which rested
on
of par
Cir.1991).
alleged agreement
independent
And the
allel conduct and not on any
“paradigmatic boy
here comes
allegation
agreement.”
close to
actual
Twom
cott,”
564,
1955;
group
competitors”
bly,
which “a
550 U.S.
127 S.Ct.
see
manufacturers)
(here,
(“[T]he
548,
take
also
127
1955
“collective
id. at
S.Ct.
(here,
action”
refusal to
im
1
question
complaint
§
license or
...
is whether a
plement)
“may
competitive
inhibit the
can
when it
...
alleges
survive
certain
(cid:127) (here,
vitality
...,
SawStop). parallel
rivals”
some
conduct
absent
factual
Corp.,
NYNEX
U.S. at
S.Ct.
suggesting agreement[.]” (empha
context
493;
Stationers,
added)).
see also Nw. Wholesale
sis
SawStop’s complaint alleges
Co.,
Stationery
agreement
Inc. v. Pac.
&
472 an
Printing
boycott
actual
detail
rely,
Twombly,
U.S.
105 S.Ct.
86 L.Ed.2d
not
as in
par
does
on
(1985)
illegal
(explaining
per
se
allel
alone. The
observa
conduct
dissent’s
boycotts
is,
contrary
simply
“often cut off
to a
tion
supply,
respectfully,
access
to the
facility,
necessary
Twombly.
reading
market
enable
inaccurate
See
boycotted firm compete
Op.
particular,
446. In
frequently Dissenting
Su
boycotting
possessed
preme
directly rejected
firms
the dissent’s
dominant
Court
market”).
position
reading
Twombly complaint:
the relevant
of the
“Al
nonsensical.”).
com
SawStop’s
To dismiss
stray
a few
statements
though in form
skepticism
initial
fair read
because of some
agreement,
plaint
directly
sp[oke]
mistakenly
discov
merely
“collapse
conclusions
be to
legal
ing these [were]
Twom
trial
into
allegations.”
ery, summary judgment^] and
resting
prior
on the
564, 127
1955. The
of a
Petro
bly,
pleading stages
S.Ct.
case.”
U.S.
States,
explicit
finding
Hunt,
was
Fed.Cl.
Supreme Court
L.L.C. v. United
(2009).
contain
did not
Twombly
allegation of actual
“any independent
afford
decision also is
meant to
Our
Id.
among
ILECs.”
agreement
discovery.
SawStop a
license
unlimited
*21
court,
by
it erred
As to the district
dissent,
of the
Like the
we are well aware
summary-judgment standard
applying in an anti-
discovery
substantial cost that
by con-
boycott claim and
SawStop’s group
Twombly, 550 U.S.
impose,
trust case can
“probability.”
fusing
“plausibility”
1955,
558-59,
recognize
at
127 S.Ct.
and
complaint
paral-
pleads
Again, because
largely
falls on the defen-
cost
conjunction with “circum-
lel conduct in
appropriately managed,
When not
dants.
meeting
toward a
of the
pointing
effect,
stanced
that cost can have
extortionate
minds,”
557,
550
at
127
Twombly,
U.S.
early
defendants to enter
compelling some
1955, SawStop
adequately al-
has
S.Ct.
But
settlements even meritless suits.
support
leged
agreement needed
Advisory
are
on
we
neither
Committee
course,
conspiracy.
§ 1
Act
Of
Sherman
Procedure,
the Su-
the Rules of Civil
nor
SawStop
seen
has
remains to be
whether
Court,
Congress.
preme
nor
We
harm
alleged any requisite
adequately
also
take the
as we find them.
rules
to the market.
of
possess
District
a number
courts
discovery
or
including limitations
tools—
not mistak
Our decision should
be
timely
for sum-
consideration of
motion
en for an endorsement of the ultimate
mary judgment
any
combat
sort
—to
point,
At this
SawStop’s
merits of
case.
discovery. See
Judicial
predatory
Federal
large
SawStop’s
prospects
success
Center,
Complex Litigation
Manual for
irrelevant,
not
ly
as
need
“[a] lawsuit
(“Effective
(4th
2004)
manage-
§ 30.1
ed.
past
proceed
meritorious to
the motion-to-
litigation requires
ment of antitrust
identi-
Ringgold-Lockhart
v.
stage.”
dismiss
fying,
narrowing pivotal
clarifying,
1057,
Cnty.
Angeles,
Los
761 F.3d
1066
legal
praeti-
factual
issues
soon as
(9th Cir.2014).
fact,
well-pleaded
In
“a
cable[.]”). Although tools
these do not
like
complaint may proceed
if it strikes a
even
us to
permit
give the benefit of the doubt
savvy judge
proof
that actual
of those facts
claims,
groundless
Twombly,
550 U.S.
improbable,
recovery
very
and that
559,
1955, they
at
S.Ct.
confirm
unlikely.” Twombly,
remote and
550 U.S.
jurisprudence
our
cannot be driv-
antitrust
556,
1955;
Cardigan
127 S.Ct.
accord
solely by
expense
en
fears about the
Co.,
N.H.
Mountain Sch. v.
Ins.
787 F.3d
(1st
litigation.
modern
have faith
Cir.2015);
We
Carpenters
N.J.
possess
that district
the will
courts
both
Royal
Health
v.
Fund
Bank
Scotland
109, 125 (2d
good
make
of avail-
PLC,
Cir.2013);
ability
and the
use
Grp.,
mechanisms, em-
case-management
able
Iqbal, 556 U.S.
“[Mjembers of such associations often have
Standard-Setting Conspiracies
VI.
economic incentives to
competition
restrain
product
[ ]
set
standards
such
group-boycott
addition
associations have
serious potential for
claim,
alleges two
but
separate
anticompetitive harm.” Allied Tube &
concerning private
conspiracies
related
Head, Inc.,
v.
Corp.
Conduit
Indian
standard-rejection
standard-setting —the
492, 500,
U.S.
108 S.Ct.
100 L.Ed.2d
conspiracy and the contrived-standards
(1988);
Soc’y
see also
Eng’rs
Mech.
conspiracy.
Industry participants alleged-
Hydrolevel
Corp.,
456 U.S.
ly
prevent
used their influence over
toUL
(1982).
1935, 72 L.Ed.2d
S.Ct.
As a
private organization
adopting
result, “private standard-setting associa
safety
AIMT
a required
device. The
objects
tions
traditionally
have
been
of an
purportedly encouraged
defendants then
Tube,
scrutiny.”
titrust
Allied
486 U.S. at
to adopt
imposed
UL
other standards that
500,
predatory there is device B. deliberately showing that the standard was alleges that normal never UL’s injured the competitors distorted of thwarted, procedures or that the de- were lies, bribes, through or party, sometimes engaged some form of external fendants influence, of improper other forms addi Instead, misconduct. it asks us to infer showing of market fore tion to a further Coll,. malfeasance defen- because some the Research, DM Inc. v. closure.” representative rele- dants’ served the (1st 53, Pathologists, Am. 170 F.3d 57-58 standard-setting panel. But vant Cir.1999). words, In plaintiff other must no provides authority drawing that sort of standard-setting the ordinarily show that inference, naked and we have found none. activity market-closing had a effect reasonably may believe that “Certifiers unfair, committed.“through use of was the (a they job job can do properly their improper practices procedures.” or or consumers) if all only benefits interested Pipe Iron Clamp-All Corp. Cast Soil parties are to present proposals, allowed (1st Cir.1988) 478, Inst., F.2d 488 851 views, frankly present their and vote.” Id. J.). (Breyer, ease, SawStop’s complaint usual the takes with the neither issue organization par largely nor standard-setting organiza- its UL’s actions because alleged rejecting will run afoul of law tion is to have erred ticipants selecting they ordinary processes adopt SawStop’s use standard and proposed when to assumption It is The unstated unexceptional standards. “axiomatic another one. that, setting argument lacking that a a valid “tech- organization standard this
437 justification, only remaining reasoning, nical” ex- SawStop’s create potential anti- conspiracy. be an planation must antirust liability. trust “Not would this tax courts, the abilities of the federal fear but Even if UL’s can ultimate decision damages judicial treble second- “wrong,” be called that mistake alone does guessing discourage would the establish- manipulate not indicate concerted action to industry ment of useful standards.” Id. the result. bodies “[S]tandard-setting Beyond its err,” allegations, error-based but simple sometimes error creates complaint’s only assertions of liability no reason for without further concerted some conclusory action are non-specific: “a organization’s indication activities made,” collective “merely ploy decision was or de- obscure a bloc,” fendants against competing producers.” “agreed vote as a Consol. or Prods., Inst., non-SawStop designs Metal Inc. v. were a Am. Petroleum “smokes- ¶¶ (5th 103, Cir.1988); 294 creen.” J.A. 96-97 846 F.2d see also 109. The Research, complaint identifies no fact (“Merely DM F.3d at 57 other than con- say against sistent votes SawStop’s proposal that the standards are or disputable (and designs) other general have some market effects has not establish agreements. ly enough illegal been to condemn as ‘un That them conduct, Act.”); parallel reasonable’ under but such equal- Sherman conduct is Ass’ns, ly with Boating legal Moore v. consistent Indus. behavior. After (7th Cir.1987) all, if SawStop right 711-13 even (finding no evi that technical support dence reasons did not conspiracy despite of an actionable the standard-set- ting decisions, jury’s finding organizations that the association was other non- See, anticompetitive explanations and arbitrary” setting “unreasonable remain. standards); Tech., e.g., Bridge Brookins v. Motor Golden 272- Int’l F.3d at cf. (8th (“[T]he Ass’n, Contest existence of an fi- independent F.3d Cir. 2000) (“So nancial long game- [change motive the standard] IMCA made might independent be an defining upon rules decisions reason each based Appellee company purposes sports organization, support an anti [the change].”); trust court need not be Advanced Tech. Inc. v. Corp., concerned Instron, Inc., decisions.”); rationality F.Supp.2d fairness those (D.Mass.2013) (dismissing M & H Tire Co. v. Racing Hoosier Tire *24 (1st Cir.1984) crux Corp., plaintiffs] F.2d where anti- “[t]he [the (“We duty simply no trust claim that provide competitors [wa]s discern to an abso in a to lutely objective support or scientific market declined a standard basis for deci sion.”). that promote competitor’s is not another “[Antitrust concerned with technology”). standard might whether a be unreasonable proposition.” as an abstract Areeda & Lastly, we note that not SawStop does supra, § Hovenkamp, 22.06c. allege objec- of anticompetitive the sort If go antitrust suits permitted ordinarily were to that tives are seen in standard- solely forward based on an allegation setting Usually, standard-setting cases. standard-setting body erred, the brought courts cases products are when are effec- cast would be into the role of tively standard- excluded from the market setting appellate safety Here, bodies. Metal adopted Consol. standards.
Prods., F.2d at Any disagree- 297. largely complains that it the could use ment small big adop- or with the ultimate standard-setting process to own impose its safety would, tion of a standard follow product everyone to on else. The anticom- law, law, give to make interpret and not impose” to of “refusal petitive harms Bacon, “Essay LVI: Of Francis Ju- Nothing that UL law.” identify. much harder (1625), dicature,” in Rich- Essays reported groups did barred standards-setting or the Anno- Essays Bacon’s With Whately, ard from the AIMT-equipped saws SawStop’s (1857). Here, judiciously the tations com- entry into the market, SawStop’s as opinion the majority resists well-reasoned market establishes. petitive table-saw beyond our limited temptation move SawStop remains appearances, all From policy. into the colorful realm role and seal of saws with the UL offer its free to dissenting opinion strays the Respectfully, perceived with market along approval, here and en- beyond our limited review on those' offering AIMT of also advantage on best left other policy croaches issues gen- if newer standards And UL’s saws. government. costs, branches those costs are additional erate some industry member of the to each common I. UL-compliant make a table chooses to
who anticompetitive or nothing We see saw. First, the rather than confront issues exclusionary in that. dissenting actually play, opinion not err in court thus did up points agreement The district dire dresses asserts, to dis- defendants’ motions granting example, The dissent rifts. standard-setting claims. through to achieve plaintiffs miss “seek product” for their litigation monopoly
VII. majority opinion “turns and claims above, the reasons described For the im- eye” “anticompetitive a blind correctly the stan- court dismissed district driving SawStop’s claims. Post pulséis]” all the defen- dard-setting claims as to opinion dissenting 454. The claims correctly The district court also dants. majority opinion “ignores all [the against group-boycott claims dismissed set- of ventures such standards benefits Co., Ltd.; Corpora- Koki Makita Hitachi trade in its rush flatten groups] ters and Co., Ltd.; tion; Chang Type Industrial standards, make communications pleading Industries, Inc.; Pentair Water OWT law to iso- perilous, consign Decker, Inc.; Inc.; Stanley Black & Group, Thus, lationist ends.” Id. Inc.; Equipment, Techtronic Delta Power today’s view that policy takes the dissent Inc.; America, Tech- Industries North companies” opinion will doom “American However, Co., Industries Ltd. tronic very at the “competitive disadvantage dismissing erred in court district global commercial interactions are be- time remain- against claims group-boycott Id. Non- commonplace.” more coming ing defendants. (beyond problem that a sense the obvious disadvantage meaningful competitive
Therefore, the district court’s decision comparison in the context of a dismissing SawStop’s complaint *25 global competitors, many of America’s PART, IN IN VACATED AFFIRMED laws). whom also have antitrust PART, REMANDED FOR PRO- AND fully accords majority opinion with THIS CONSISTENT WITH CEEDINGS ventures, “[j]oint standard- the view OPINION organizations, and trade association setting WYNN, concurring: Judge, Circuit meetings may allow individuals different each other’s ex- to benefit from ought specialties that their “Judges remember dicere, may prove invaluable jus These fora jus pertise. dare —to office is and not for efficient product and effective develop- necessarily to, (on limited Domeny ment.” Post at 455. majority As the behalf of Bosch), (on SBTC and Peot states, opinion plainly “such ventures” can behalf of Ryobi, affiliates), TIC and “decidedly procompetitive by effects (for Stanley Rodrigues Makita), Ray encouraging greater product interoperabil- (for Mayginnes Emerson), David Y. ity, effects, network generating and build- (of Keller Porter-Cable, who also ing incentives to innovate.” Ante at 455 spoke DICM), for Pentair and Steven omitted). (quotation marks and citations (for Karaga Hitachi), and representa- The majority opinion in no uncertain terms tives of B & D and Milwaukee Elec- affirms the district court’s dismissal of tric. Mr. Domeny, time, at the was SawStop’s standards-setting-related the Chair of the [Power Insti- Tool claims—a relegated crucial fact to a dis- tute]^ Product Liability Committee, senting footnote. and chaired the meeting.” J.A. 89
Second, ¶ rather than SawStop’s added). address 79 (emphasis complaint written, as it is the dissenting (cid:127) “At the meeting, Mr. Domeny and the opinion verbiage employs like “commercial other participants expressed concerns ” interactions to revise the complaint so if one manufacturer adopted as to omit allegations of a secret SawStop Technology, then all manu- agreement to refuse to deal. Again facturers subject would be greater sounding policy, the dissenting opinion liability in product future liability asserts that the majority “drapefs] inno- cases. Mr. Peot shared this concern. cent commercial activity garb” sinister [Power Tool Institute]’s table saw complaint because the “hardly bespeaks a manufacturers determined at agreement collective not to deal.” Post meeting that they would decide how to Thus, the dissenting opinion edi- respond, industry, as an to the SawS- torializes that due to majority opinion, top Technology. A consensus was “HOLDING OR ATTENDING [A] (1) reached that all take a should TRADE ASSOCIATION MEETING implement license and/or WILL INCREASE YOUR EXPOSURE AIMT, (2) none take it or other- TO ANTITRUST SUITS.” Id. at 443 implement AIMT; wise if one since added). (emphasis or more took a license offered and/or Yet, judicious when read with eye, product AIMT, with the others SawStop’s complaint clearly alleges that would be product more vulnerable to Defendants entered into a agree- secret liability. It agreed was also that col- ment to refuse to deal at a trade associa- lective action proceed only all, if tion meeting just that Defendants —not or at least a substantial majority, of “held” or “attended” meetings. such In- participants voted to participate. deed, the complaint plainly bespeaks a col- Members developing also discussed agreement lective not to deal. something like Technology,
Specifically, alleges, without having to pay royalty to Dr. among things: other Gass. The consensus reached (cid:127) conjunction “In attendees, Tool contrary [Power with no views meeting, separate articulated,
Institute] annual industry was that mem- meeting representatives of table collectively agree bers would not to *26 saw manufacturers was purchase held. Atten- technology from licenses included, dees at meeting but were implement Plaintiffs or otherwise It was fur- ¶ table saws. manufactured add- (emphasis 89-90 J.A. AIMT.” forward, that, omitted). going in- agreed ther citations and ed SawStop and to meet- relevant at the (cid:127) formation reached consensus “The liability defense product calculated econom- on a table saw based ing was among manufactur- that shared ic be would determination issues by fare collectively, better would, ers af- industry who participants those marginalize to agreeing collectively collectively agreed firmatively to act AIMT, allowing by than SawStop and SawStop.” J.A. response to to determine whether marketplace added). ¶ (emphasis with did business any manufacturers “At, period of months (cid:127) or within implemented otherwise SawStop or meeting, following October believed Defendants The AIMT. Bosch, Ryobi, Defendants each of market the mass into AIMT bringing Pentair, and Hitachi, Emerson Makita, liabil- catastrophic product would Electric, affili- and entities Purchas- Milwaukee for them. ity consequences agreed to enter them, invento- prior and had existing ated with their ers of (and, (the other perhaps, boycott Boycott’) ‘AIMT saws of table into a ries viability point would by col- products) property, SawStop’s intellectual prod- that other as evidence of AIMT (1) to license SawS- refusing lectively because inherently unsafe ucts were (2) not to agreeing technology, and top be- Defendants AIMT. lacked they J.A. 90- implement AIMT.” otherwise term, that, if SawS- short lieved added). ¶ (emphasis 91 83 man- major obtain unable to top was frame, (cid:127) in which time “During this not partner, would ufacturing saw table Institute]’s Tool [Power meaning- market produce able respond collec- voted to manufacturers with its AIMT— of saws quantity ful those Technology, SawStop tively to major manufacturers way, this negoti- yet in license Defendants profit earn current continue to could SawStop refrained from (cid:127) ations with inferior existing margins their license, the Defen- and requesting a royalties paying lines without product negotia- (for already in Plaintiffs, remain dants who were it would ways them as plausible to abort being) at least found time tions ¶ contend, major manufacturers arose.” J.A. opportunities lawsuits, liability product added). defending (emphasis Thus, De- viable. AIMT was not alleg- words, SawStop’s complaint In other calculation was fendant’s business Defendants meeting which specific es a fare collectively, would better they, SawStop and with agreed to refuse deal AIMT, SawStop and marginalizing Around pact a secret. keep by working with than and/or from time, refrained Defendants same J.A. 90 adopting AIMT.” otherwise or, if in li- technology seeking SawStop’s ¶ 81. SawStop, found censing negotiations meeting (cid:127) agreed at the “It was opin- dissenting to abort them. ways con- that all discussions thereafter of these characterization dismissive ion’s response to cerning a collaborative “eonclusory as mere allegations detailed be conftdential misses assertions,” plainly thus post than persons other concealed the mark. who members Institute] Tool [Power *27 On contrary, SawStop’s the allegations SawStop, viewing the facts and reasonable squarely conform to what require we Sher inferences in the light most favorable to § man plaintiffs Act to plead. “To es Defendants. For example, the dissenting § violation, tablish a 1 antitrust plaintiff opines opinion that “[ignoring the many (1) prove, plead, therefore a practical reasons for declining [SawStopJs contract, combination, (2) conspiracy; or offers, the majority hones in on the fear of imposed an unreasonable restraint of product liability key as the motivation be- trade.” Robertson v. Sea Pines Real Es hind defendants’ boycott.” alleged Post at e Inc., 278, tat Companies, 679 F.3d Yet, 453. majority the opinion rightly fo- (4th Cir.2012) J.) (Wilkinson, (quotation cuses on the products liability reasoning— omitted). Further, marks and citation “Iq because SawStop specifically alleges, it. Twombly bal and require do not a plaintiff See, e.g., J.A. 89-91. We are thus not at prove his complaint.” case the Id. at liberty to swap that pled reasoning out for Instead, 291. complaint the “need “practical other might reasons” we make allege facts sufficient to state elements of up out of whole cloth. A further example: (quotation Id. claim.” marks and cita The dissenting opinion asserts that “it was omitted). 12(b)(6) tions And at the Rule consistent with each manufacturer’s best stage, are, which is where we the com interest reject an expensive, unproven, plaint is to be “construed liberally so as to undeveloped, possibly unsafe technolo- justice.” do substantial Pub. Employees’ gy. Each defendant Ret. Ass’n could easily Colo. v. Deloitte have ar- & Touche LLP, (4th Cir.2009) (Wil rived at this business decision on its own.” J.) kinson, (quotation marks and citation Post at 452. But SawStop alleges that omitted). they didn’t arrive at that decision indepen- Instead, dently. the complaint specifically
In its revisionist account of SawStop’s
alleges that
expressly
Defendants
allegations,
agreed
opinion
dissenting
essen-
tially
12(b)(6)
to refuse to deal
keep
turns the Rule
and to
agree-
standard on
its
“A
See,
head.
motion to dismiss under
ment secret.
e.g.,
Rule
J.A.
Ignor-
89-91.
12(b)(6) tests
sufficiency
of a com-
ing
specific
such
allegations to SawStop’s
plaint;
importantly,
it
does
resolve
detriment
nothing shy
is
of an all-out per-
surrounding
facts,
contests
the merits
version of
generous
through
lens
which
claim,
of a
or the applicability of defenses.”
551 we
F.3d at 311.
Republican
Martin,
Party
N.C. v.
Finally,
dissenting
opinion
(4th
focuses
Cir.1992).
F.2d
Instead, “a
policy
own
preferences,
thereby
well-pleaded complaint may proceed even
abandoning this Court’s limited
if it
role—
savvy
strikes a
judge
proof
that actual
simply
of the
which is
facts
assess whether
improbable
and that
a recovery
very
plausibly
unlikely.”
alleges
remote
elements of its Sec-
Bell Atlantic Corp. v. Twombly, 550 U.S.
tion 1 claim.
the majority opinion
Because
544, 556,
steers,
127 S.Ct.
The being the example insists, caught perfect exam- been and thus way so bound —a of the scandal the ones international vitamin “[h]ere, famous plaintiffs that ple, in engaged 21 firms at 70. It involved Post 1990s—which anti-competitively.” acting over a decade: reviewing a Rule lasted conspiracy job a not our simply is party’s which 12(b)(6) assess to motion man- 21 chemical to From 1988 pro-competitive. more deem we conduct in seven na- headquartered ufacturers role, the to our limited refusing to stick In cartels.... ... joined vitamins tions breathtaking engages opinion dissenting bil- exceeded by $30 these cartels Sales activism. judicial manufac- pharmaceutical .... The lion repeatedly has virtually Court addict- Supreme “As involved became turers policy- Congress is the profits, ... emphasized, monopoly infusion of ed to the re Sunterra In courts.” prompted maker —not the financial results giddy Cir.2004). (4th 257, 269 F.3d their clan- Corp., 361 conspirators to continue Ins. also, Underwriters e.g., years. to 15 up See activities destine Hartford N.A., Bank, Planters v. Union illegal persisted Co. These activities L.Ed.2d 1, 13-14, 120 S.Ct. several things] U.S. [among other face of (2000) policy out- (“Achieving a better conspira- parallel prosecutions of public Congress, not a task for investiga- ... multiple come [and] cies courts.”). sug- inappropriate It is thus simply bur- conspirators .... The tions law, that, as a matter example, gest, for more developed deeper and rowed motivated may not be conspiracy boycott subterfuge. a methods of elaborate pencil Congress can by liability concerns. Connor, Vita- The Great Global M. John into the Sher- limitations categorical such http://ssrn. available mins Cartels Act; man we cannot. com/abstract=885968. yet dissenting opinion embarks con- words, multi-player large, In other policy, into well odyssey another can ruses in- involving spiracies elaborate much reality, assumptions untethered law and a fact. exist as matter deed here, when at issue less the did, here, that one alleges And “[tjhese hard- days secrets are asserts boycott a group it undertook and that something that is keep. A secret is er to technology out of mar- freeze But maybe only Or two. by held one. those alle- refusing accept In ketplace. everywhere Managers twenty-two? stage, this must at gations, as we concurring my be relieved learn oversteps its plainly dissenting opinion peo- twenty-two you can let colleague bounds. nothing leak and have in on a ple secret reviewing at 451. Yet out.” Post II. 12(b)(6) we purposes, complaint for Rule crystal ball decide may peer into sum, disputes, to resolve courts exist believe personally we many people how rules into procedural swords pervert not to out complaints kick keep can secret battles. And fight policy with which court on such basis. whether SawS- today, do not confront we boy- on its ultimately succeed Moreover, dissenting top should extent the to the Instead, confront we claim. cott large,, that a multi-firm suggests opinion whether, viewing SawStop’s com- exist, it when cannot definition eye using unjaundiced plaint with con- Large antitrust simply uninformed. standard, proper say we can that it gation, has I believe the majority has default- made allegations sufficient to ed. I withstand shall throughout show how it has motion to dismiss for failure to state failed such to follow Twombly at every turn. I a claim. It has. with all Accordingly, suggest, due respectfully, most that the respect view, for the dissenting join I in majority has committed basic conceptual *29 judicious and errors majority well-reasoned and that the consequences of those errors, opinion. which the majority prefers not to face and to dismiss policy, regretta- are WILKINSON, Judge, Circuit ble. regrettable, however, Most is the concurring in part dissenting in part: treatment of a Supreme decision, Court even a one, controversial at the majority’s The hands of view of modern com- this court. merce is unfortunate. It takes an iso- approach
lationist
in which each business
Among Twombly’s insights was that
must all but lock itself in semi-solitary or markets, every bit as much as conspira-
risk the taint of antitrust claims. Whatev-
cies, play a significant role in governing
validity
er
isolationist approach may
commercial conduct.
557,
See 550
U.S.
had,
once have
profoundly injurious
in
The majority this aas statement commercial activity in garb. sinister policy, of ante at hardly but it is It that. a rather statement of conse- majority, however, adopts the re- The quences that flow from majority’s re- sequence. verse It fashions a template for fusal to follow Supreme Court’s deci- the frustrated market participant: When- sion in Bell Atlantic Corp. Twombly, ever routine business decisions don’t go 550 U.S. 127 S.Ct. 167 L.Ed.2d your way, reason, for whatever simply (2007), which pleading established re- claim industry conspiracy under the quirements Sherman Act Section Sherman Act and the courts will infer mal- complaint. Supreme The Court lacks the feasance. But such casual presumptions institutional resources to ensure full com- of antitrust can only infractions chill com- pliance with its Among decisions. other among munications companies, which in things, it has room on docket its for a may turn product hinder in- development, cases, limited number of and the Twombly joint ventures, novative and useful trade decisions from the lower may courts association conclaves. WARNING: routinely pitched as pertaining to no more HOLDING OR THIS ATTENDING particulars than the of an individual com- TRADE ASSOCIATION MEETING plaint. WILL INCREASE YOUR EXPOSURE TO ANTITRUST SUITS. be, just may however,
It institu- tional limitations at impart the Court chilling insti- The is most effect acute when obligations tutional on the ap- courts of the majority independent considers mar- peals to respect in fullest measure the ket-driven behavior to be parallel conduct highest approach. Court’s In this warranting obli- antitrust scrutiny. in- Parallel cases majority highlights course, While is, lynchpin of
dustry conduct successfully alleged paral- plaintiffs which 1 claim. Section Act many Sherman dispa- conduct, of them features none lel conceptual error cardinal majority’s The If defendants’ as these. actions such rate ap- an ends-based adoption lies in the conduct, then qualifies parallel behavior circumstan- in a parallel conduct proach competi- among divergent actions plainly II.A. Part case. See antitrust tial infra give now rise any field will tors plain- fact that of course is the end The part but This is claims. But adopted. product was tiffs attempt impose majority’s of the parcel the end likely to meet most products defen- guilt on antitrust presumption utility or the least are those of rejection bear burden now must dants who expense. the most that would cause those prop- the burden negative when proving ends-based majority thus uses *30 the claim. bringing party erly lies with the least marketable reward the analysis to Twombly was that itself It is no accident of possibility greatest the products con- For what we an antitrust decision. FAIL- litigation success. WARNING: of perfect storm in antitrust law is front PRODUCT FOR ADOPT THIS TO URE costs, discovery large damages, treble IN- WILL REASON WHATEVER It is the standards. pleading relaxed ANTI- TO YOUR EXPOSURE CREASE pose that combination three factors in SUITS. TRUST marketplace behavior. legitimate threat to means in ends and treatment of This sought to Twombly Supreme The Court the Twom- litigation undermines antitrust latter by addressing the the calm waters rather analysis An of means decision. bly however, adds to the majority, The two. tool most sensitive we is the than ends complaints that by sanctioning turbulence of plausibility to measure the possess even in all failed would likelihood Twombly, 550 U.S. complaint. Here, See standards. pre-Twombly under here, by the means And S.Ct. 1955. acting anti-eompeti- are ones plaintiffs the conspiracy was carried liti- through the They which so-called seek to achieve tively. non-parallel picture product of their paint monopoly a clear gation out the evi- market nor contrac- complaint is best the saw The neither table conduct. result, The yield. would negotiations introduced tual After SD3 of that. dence noted, failures will marketplace entered into defendants product, certain litigation success. increasingly lead to that continued well licensing negotiations of the diffi- beginning And that is boycott agreement. alleged group after culty. to license the tech- them offered Some supposed agree- again nology, to believe that majority appears The after Other ment, SD3. and were rebuffed proper discovery is the full course of offers, with yielded no one negotiations out winnowing meritless mechanism for industry saw leaving table fields, defendant many In observation claims. majority of named The vast altogether.. The bone of contention be correct. not even mentioned litigation frequently are is most civil defendants federal “parallel” trial. supposedly judgment of the versus summary account SD3’s over however, law, flashpoint negotiation posture, Their antitrust behavior. sum- versus to dismiss plaintiffs’ within often over motions would seem well which Court Supreme mary judgment. For forth or de- is nowhere set knowledge, that in the area recognized clearly has tailed. it is the threat steep litigation with, consistent and most plausibly reflect, produces costs that conse- independent deleterious legitimate business deci- itself, quences in and of no matter who the sions. Put simply, majority proceeds victor may antitrust marathon ulti- as if Twombly were at most persuasive mately to be. prove authority, and not very persuasive authori- ty at that. Twombly
As emphasized, discovery dramatically Twombly costs have escalated since the is particularly important here, adoption of the Federal for the Twombly, Supreme Rules. Court in that case ad 558-60, 1955; U.S. 127 S.Ct. dressed the meaning see of plausibility in the Brian T. Fitzpatrick, Twombly context of a Iqbal allegation based Reconsidered, 1621, descriptions 87 Notre of parallel Dame L.Rev. conduct. (2012). Multiplying Court electronic and allegations “when .instructed records, paper parallel combined with increased conduct set out in order claim, § regulatory obligations, make a they have caused discov- must be placed in a ery costs to mount even context further since that raises a suggestion pre of a Twombly ceding agreement, issuance itself. merely Before we parallel con impose these duct that climbing just costs on could companies, as well independent there must exist confidence that action.” Twombly, the claims 550 U.S. at against allege leveled them S.Ct. 1955. “Even actual facts ‘conscious parallelism,’ *31 that make a common and other illicit in- reaction of ‘firms in a concen pláusible. tentions trated SD3 fails to clear that recognize this market their shared bar, but majority just still the economic piles it on. interests and their interdepen dence with respect price to output ” decisions’ is ‘not in itself unlawful.’ Id. at
I.
553-54,
(citations
omitted).
S.Ct. 1955
A.
Nor should
court
infer “that
compa
agreed
nies had
among themselves to do
majority’s
The
approach to Twombly
what was only natural anyway.”
at
Id.
tells an old intermediate appellate story.
566,
Thus,
adopt SD3’s
very allegations
guishable from'
nascent
was too
technology
ized the
Twombly.
rejected
Supreme Court
it
Perhaps
license,
unproven.
in short
case,
in that
complaint
to the
According
cost effective
been
not have
here,
who, like the defendants
per
it. Or
defendants —
incorporate
manufacturers
market—
of the
share
significant
owned
in
actually
product
incipient
SD3’s
haps
conduct”
parallel
“engage
agreed
consumers.
injury to
risk
creased the
Twombly,
entry.”
competitive
“prevent
may
explanations
market
varied
These
550-51,
1, 127
n.
S.Ct.
at
550 U.S.
com
different
different
have been
well
the de-
charged that
1955.
decisions of
business
They reflect
panies.
“
motivation’
common
‘compelling
fendants’
ordinary character.
the most common
efforts
competitive
plaintiffs’
thwart
explana
alternative
“obvious
They are
conspiracy.”
to form a
naturally led them
sufficiently rebut
apd
not been
tions”
allega-
If
1955.
these
S.Ct.
at
Id.
preceding
aof
assertions
any valid
by
ted
they
familiar, it
because
sound
tions
All the behavior
to collude.
agreement
made
the claims
parrot
perfectly
almost
only compati
“was not
by SD3
described
that the
argued
complaint. SD3
in its
SD3
likely ex
more
was
with,
indeed
but
ble
named defen-
least the few
defendants —at
lawful,
free-
unchoreographed
by,
plained
discuss—
actually
bothered
dants
at
Iqbal,
U.S.
behavior.”
market
collectively
among themselves
“agreed
Twombly, 550 U.S.
(quoting
To it on. majority just loads lay to the sought to Twombly dangers cor doubtless was v. Gibson Conley rest. 41, 78 355 U.S. See decided.
rect when
II.
(1957),
by
abrogated
2 L.Ed.2d
S.Ct.
A.
It
1955.
127 S.Ct.
U.S.
Twombly, 550
pleadings
through the
skip
made sense
Twombly,
of
version
its inverted
With
discovery
some
would
theory that
on the
to contort
majority
plaintiffs
allows
47-48, 78
See id. at
out.
it all
how sort
poten-
into
marketplace behavior
normal
Al
changed.
times
But
S.Ct. 99.
ma-'
by the
Even
violation.
antitrust
tial
“the ex
pooh-poohs
majority
though
standard, howev-
pleading
diluted
jority’s
ante
litigation,”
antitrust
modern
pense of
its
claim fails as
boycott
er,
group
SD3’s
for the
legitimate
altogether
434, it is
con-
alleges wm-parallel
complaint plainly
of
cognizance
to take
Court
Supreme
contrary
con-
majority bases
The
duct.
of action
causes
between
interplay
shifting
paral-
of
expansive definition
an
on
clusion
claims) and
(here
Act Section
Sherman
perceived
solely on a
focused
conduct
lel
(here
pleading
those of
Rules
the Federal
to dis-
regard
without
uniformity
ends
Thus,
in Twom
the Court
discovery).
majority ob-
similarity of means.
from what
sought to shield defendants
bly
actions
uniform
“The similar
serves:
“heavy
costs
as
it later described
of the defen-
none
alleged are obvious:
efficiency
expen
in terms of
litigation
or other-
ultimately took a license
dants
and resources”
time
of valuable
diture
technology.”
SawStop’s
implemented
wise
those
plausibility
burden
allocating
vastly “dif-
defendants’
at 427. The
Ante
Iqbal,
conduct.
unlawful
allege
who
part
of action”
seen
courses
ferent
1937.
685, 129S.Ct.
atU.S.
un-
conceal the
grand scheme
of some
majority
understood what
The Court
By
427.
Ante at
derlying conspiracy.
that an antitrust
does not:
parallel
majority
would find
logic,
It
pass up.
provides
tempting
often too
allegedly
long as defendants all
conduct
whose
parties
for
tantalizing weapon
adopting
end—not
the same
reached
badly. The
going
endeavors are
business
dealings
how the
product
regardless
—
para-
bound
stoke
“conspiracy” is
term
proceed-
and defendants
plaintiffs
between
pin
an effort
noia,
to kindle
apart.
fell
ed or
business failures
others the blame
misses
focus
an ends-based
Such
damages awards
The treble
one’s own.
is to deter-
Twombly, which
point of
entire
temptation
are a further
actions
anticompetitive
allegedly
whether
mine
armed
floundering companies
decision
independent
“stems from
conduct
rather
knowledge
defendants
express.”
tacit or
agreement,
or from
dam-
of such
prospect
face the
settle than
127 S.Ct.
550 U.S. at
Twombly,
high
attendant
with the
ages, especially
omitted).
act in
(citation
If defendants
Twombly, 550 U.S.
costs. See
litigation
the same
they arrive at
whenever
parallel
Twombly sought
558-59, 127 S.Ct.
*34
outcome,
con-
parallel
then
or
end
general
of no
language
in
dangers
these
to reduce
identi-
but
independent
will embrace
duct
by
only
“It
majority:
is
to the
moment
by market
decisions borne
cal business
allegations
taking
require
care
Twom-
conduct that
precisely
conspiracy
suggesting
level
reach the
forces—
liability.
antitrust
bly excluded from
enor-
potentially
hope to avoid
we can
conspiracies
559, distinguishing horizontal
Id. at
discovery....”
expense of
mous
coincidences,
innocuous
the means matter. They
to weigh
had
options.
majori-
The
competitors
That
travelled divergent paths
ty’s ready acceptance of
unsupport-
SD3’s
absence,
to the same end reflects the
superiority
ed
assumption is
part
presence,
of illicit coordination or
fallacy of
its ends-based perspective,
agreement.
namely that any ultimate
to adopt
refusal
nothing
more than one more instance of
Certainly, direct evidence
aof
collusive
parallel behavior.
end would amount to a plausible Section 1
claim. See
Chiropractic
American
Ass’n
A
analysis,
means-based
one that focus-
Healthcare, Inc.,
Trigon
212,
es
the means
which the so-called
(4th Cir.2004) (“Direct
evidence
an-
out,
was carried
most
titrust cases is explicit and requires no
gauge
sensitive
parallel
conduct and
inferences to establish
proposition
or
complaint plausibility. The majority con-
asserted.”).
conclusion
contrast,
being
By
tends the dissent would
parallel
find
con-
plaintiffs rely
when
on circumstantial evi-
“only
duct
when defendants move'in rela-
of conspiracy,
dence
inas
Twombly and
lockstep”
tive
“by
substantially identical
hand,
case at
approach
ends-based
means.” Ante at 429. Not so. A focus on
an unacceptably
carries
high risk of find-
analysis
means-based
comes nowhere close
ing parallel
conduct
wildly disparate
to requiring identical means. As circum-
behaviors
by independent
motivated
eco-
stantial evidence of a conspiracy, the simi-
nomic concerns. With its
larity
over-inclusive
of conduct
along
lies
a spectrum.
sweep,
majority
erodes the long-recog- Beyond a certain point, starkly dissimilar
nized right of
party
one
not to deal with means render
agreement
a secret
among
another. Monsanto Co. v. Spray-Rite
competitors
plausible.
less
majority
The
Corp.,
Service
465 U.S.
104 S.Ct. dismisses this
analysis,
means-based
ap-
(1984).
defendants undeveloped and its untested Moundridge v. terms for times); City at different of con- parallel this is If all F.Supp.2d technology. Id. Corp., Exxon Mobil deal, well skepti to (D.D.C.2006) of a refusal (expressing and evidence duct 131-32 con parallel of allegation qualify. will anything cism towards then did defendants that on evidence based duct this, agreement all the yet, despite And information). Al exchange no more than to as a refusal characterized repeatedly these cases insists majority though the this How can at 427-28. E.g., deal. ante “non-parallel of findings foundered offer to and did did deal Defendants be? in fact failing was ends,” common their How were technology. SD3’s purchase Ante at 428-29 means. disparate patently in not discussed eighteen defendants the added) (internal quotation (emphasis when, inso- to supposed deal complaint the omitted). marks concerned, they far as the here, there is means to the Turning approached? never were even li- separate parallel about nothing simply along sepa- short, defendants four proceeding discussed censing all discussions results and their different with deal with SD3 but willing timetables to rate were alleges that SD3 times at various motivations. broke down negotiations different li- not to collectively agreed reasons, SD3 not least because defendants for various 2001. J.A. technology October were will- cense than defendants more demanded supposedly then Defendants 89-90. refusal no The record shows to offer. ing negotiations the to abort” ways “found that deal, parallel less means much by “giving sepa- agreement conceal their the plausible think It is not end. As stated 94. J.A. rate excuses.” some- were disparate actions defendants’ however, three defendants complaint, the to ex- choreographed plan carefully a how Oc- with SD3 negotiate continued to after By supposing market. the clude SD3 from Bosch, fourth, ended 2001 while tober severely underes- majority possible, month and restarted a negotiations before group a of difficulty getting timates Ryo- later. J.A. years discussions of action agree on course competitors to licensing signed non-exclusive bi sent may or negotiations separate contract January 2002—three agreement SD3 in their best to be not have shown may collective refusal the so-called months after quite It interest. commercial contract offered The J.A. 91-92. to deal. moreover, to management, stage feat initially would increase royalty a 3% actually competitors those have some of suc- technology proved if the to 5%-8% licensing of- but different generous extend 91-92. SD3 the market. J.A. cessful on very party times fers at different gener- appear to be accept what refused to supposed group subject of the that was the wording issue. on minor ous terms based claim on type boycott. This is royal- the same offered J.A. 92. Emerson Twombly conceivability that margins far negoti- participated Ryobi ty rate as condemned. months October for several ations after com- nature SD3’s Mary Hail 2001, eventually ending leaving talks by the fact plaint is underscored fol- industry altogether the table saw named defendants twenty-two four of 56-57, 97. Six months year. J.A. lowing allega- much as discussed in so deal, even Black refusal & after (the comes “twenty-two” figure tions licensing agreement SD3 a Decker offered one defendant complaint as original SD3 balked royalty. J.A. 92. 1% *36 appear somehow failed to in the amended B.
version). Compare J.A. (original com- The majority believes that all the non- (amended plaint) with J.A. 70 complaint). parallel behavior disparate means of Indeed, even the majority plaintiffs chides proceeding were hatched in secret. The for “assembling] some collection of defen- concurrence makes much of the fact that dants and then mak[ing] vague, non-specif- the meeting among table saw manufactur- ic allegations against all of them as a ers was “secret.” Ante at fact, 438-40. In group.” Ante at 422. no fewer than four times does the concur- ring opinion refer to agree- Even plaintiffs appear to realize how ment not to deal as a “secret agreement” tenuous their claim of parallel conduct is. or a “pact [kept] secret.” Id. This is mani- original contrast complaint, SD3’s festly a cover for the fact my concur- amended complaint collapses its descrip- ring colleague is point unable to to the tion of the negotiations various and time- traces of agreement, an I hoping, suppose, lines to create an illusion of uniformity. that a fishing expedition will unearth them. Compare J.A. (original 55-58 complaint) But there is larger problem here. (amended with J.A. 88-93 complaint). These days secrets harder to keep. A original While the version details each of secret is something that is held the discussed negotiation defendant’s his- one. maybe Or two. But twenty-two? tory in a separate section, plaintiffs’ sec- Managers everywhere must be relieved to ond effort weaves those divergent strands learn my concurring colleague that narrative, into one vague obscuring dates you can let twenty-two people in on a and distinctions along way. Id. secret and nothing leak out. This attempt at hardly obfuscation in- We also run into a significant collective spires confidence in promise SD3’s action difficulty here. larger al- discovery will bolster its claims. Even leged conspiracy, larger the number of with its artful redrafting, however, SD3 alleged participants that need to be falls short of the bare minimum required brought into line both as to object for alleging a group boycott. To hold oth- execution of the conspiracy as well as the erwise is to use antitrust law badly skew need to keep secret. The vast number the market forces normally at play con- of antitrust cases involve a much smaller tract negotiations. on, From now defen- number conspirators, and it is telling dants decline to deal with entity propos- my concurring friend must venture ing any new design product feature of back to the 1990s even to find an inappo- development at peril. their They also can- site situation. The again concurrence la- purchase refuse a product in the bels the dissent’s discussion collective course of licensing negotiations because problems action foray policy. into It is too, under majority’s rubric, is not. It is an inquiry into plausibility, grounds possible liability if which Tivombly absolutely requires that others arrive independently aat similar we undertake. The failure do this is judgment. business Again, SD3’s attempt but one more example of the majority’s through litigation achieve more than failure to follow that decision. what markets or contracts would ever in- C.
dependently confer precisely the kind of abuse of Sherman Act claims that Assuming, Twom- though only for the sake of bly sought prohibit. argument, that plaintiffs properly had al- inflat for such support little There is com- conduct, amended *37 leged parallel conceded Plaintiffs self-confidence. “something ed the to show fails still plaint not could agreements licensing any that parallelism conscious turn to needed more” its that and until effect taken have Twombly, 550 conspiracy. plausible a
into fully im been not have technology would majority The 1955. 560, 127 S.Ct. U.S. it de years after until plemented necessary to 2008— “more” the that contends J.A. acceptance. industry-wide manded across claim boycott group SD3’s nudge that concerned were also 92. Defendants identifica- complaint’s is the line the goal actually increase could technology new the time, and place, particular “the tion of of blade the use injuries, discourage hand initially boycott the in which manner in “kickback” to address and fail guards, meeting separate describing a formed, luke the Despite 101. J.A. juries. for held manufacturers] [among table saw royalty rate its reception, SD3 set warm Insti- Tool the Power during purpose a prices, 8% of wholesale approximately meeting.” 2001 annual October tute’s operating for manufacturers costly gamble (cid:127) omitted). This, we (citation Ante at profit always uncertain and often thin on com- SawStop’s of told, heart “the is 1; For J.A. 86. Br. Response margins. Ante at plaint.” reasons, consistent with it was all these trade association lawful perfectly But reject interest best manufacturer’s each a particu- on place take in fact meetings do and undeveloped, expensive, unproven, a particular for time particular at a day lar Each defen technology. unsafe possibly majority’s assertion the And purpose. busi at this easily have arrived could dant inoff broke manufacturers saw that table on its own. decision ness of a the course meeting” “separate a the end Fairs at recalls World’s One nothing more is trade convention larger of beginning and the nineteenth of ordinary conduct. of description a than al- held They were century. twentieth for a bar Indeed, be unusual it would serving as annually, most often most care conven- meeting, health association among competition a for brisk epicenter gathering industry-wide tion, any other produce countries participating specialized into more out to break not ad- technologically creative most of common matters to discuss subgroups now, then, It was exhibitions. vanced term not coin need We interest. fairs The unusual inventiveness. of time liability” to note discussion “breakout booths, tables, exhib- humming with were staple long been have sessions these off to show its, designed all and displays life, ma- and the professional business about buzz technologies -create new form of this made even now has jority products those Some products. new perilous. more communication larger a far spectacularly; succeeded simply con point behavior recognized cratered. have number Courts to take be able interests manufacturers should economic trary to defendants’ takes, time it after showing concerted action. account into plus factor become for an invention hype, initial See, v. HomeServices e.g., Hyland utility (6th and marketable practical Cir. America, Inc., F.3d one injury expose consumers not any defendant that would 2014). see how It is hard majori- liability. The manufacturers against its economic or case in this acted lag cognizance however, takes no that, ty, boldly but asserts SD3 interest. exists, always as it time, which manufacturers table saw all boycott, in the but development has, product technology. J.A. licensed highly most touted medical discoveries. liability and antitrust law each serve dif- Yet lag consciousness of time is something ferent and valid interests. Nothing is to be no prudent business without. gained by scrambling them in way has the two bodies of law working at cross Ignoring many practical reasons for purposes such that manufacturers are for- offers, declining SD3’s majority hones bidden, pain of antitrust liability, from product on the fear of liability as the discussing and weighing product liability key motivation behind defendants’ concerns. *38 boycott. This, Ante at 481-32. we are told, “why.”1 is the Ante 431. Defen- D. dants counter that no manufacturer rushed adopt SawStop technology even after By casting product liability concerns as began SD3 producing its own saws in 2004. the driver of anticompetitive conduct, the Response Br. 32. The majority answers majority risks curtailing communication plaintiffs’ behalf: SD3 remained too critical to technological development. We small a player in the table saw market to would seemingly want manufacturers to be pose a significant products threat in liabili- concerned about products liability. Prod- ty suits. Ante at 431. Yet the earlier ucts liability law exists to make businesses products liability cases involving SawStop cognizant of the products risks their create technology focused on the “mechanical fea- and to encourage them to take steps to sibility,” share, not the market of a “safer avoid liability. such Open and honest dia- design.” alternative Osorio v. One World logue among competitors can help locate Inc., Technologies (1st product vulnerabilities and formulate solu- Cir.2011) (citation omitted). Different de- tions, hopefully leading to improved con- sign anywhere in features use are routine- sumer safety. But the majority forces the ly used comparatively products liability yet defendants into another a double bind: litigation. entry SD3’s into the market They product face liability suits either for should put have defendants at a serious refusing to use what alleges SD3 is a safer disadvantage in products liability suits. product or for adopting an prod- untested J.A. yet 90. And still defendants refused uct that could well fail to work as adver- to bite at product. SD3’s they Either tised. The industry have fool- been were never by motivated product liability ish not to discuss the risks way. either It concerns in place the first or those con- makes little sense to dampen such discus- cerns were outweighed by other draw- sions prematurely the specter of anti- (too costly, backs ineffective, unsafe) or liability. trust licensing SawStop technology. Working together, whether cooperating course,
Of if manufacturers miscalculate joint venture or simply exchanging failing adopt safer technologies, prod- information at a trade meeting, association ucts liability lies in But products wait. can not only save industry participants— point, In making this majority planned credits defendants "to use whatever technol- scraps testimony from cherry- David Peot ogy prevent we felt would be best to table saw picked by ignores SD3 while it the district accidents. There were no limitations that I diligent court's review of the full trial tran- can way remember one or the other.” J.A. script, full, Ante at 431. When read in Peot’s discrepancy 140. This plain- emblematic testimony joint focused on defendants’ ven- attempt tiffs’ conjure and of ture, years formed group after the majority's willingness to overlook the boycott. J.A. 134-40. revealing Far holes narrative. deal, collective refusal to Peot clarified that Industry, Manufacturing money Semiconductor consumers—time and therefore (2014). 555, 559 1990-2010, Pol’y that no 43 Res. innovations spawn also can
but
alone.
achieved
could
participant
ad-
Standard-setting bodies offer similar
develop-
product
which
speed
Given the
Tube & Conduit
Allied
vantages. See
special-
increased
and the
moves
ment now
Head, Inc.,
U.S.
Indian
Corp. v.
industries, “much innova-
many
ization of
500-01,
100 L.Ed.2d
108 S.Ct.
lateral and
require
likely to
today is
tion
make
(1988). Compatibility standards
well as vertical
linkages as
horizontal
making parts
more efficient
markets
J.
& David
M. Jorde
Thomas
ones.”
benefitting
produc-
both
interchangeable,
Hori-
Analysis
Teece,
Reason
Rule
change
want
who
ers and consumers
De-
Agreements
Arrangements:
zontal
Farrell
Joseph
shop
around.
products
Com-
Innovation
signed Advance
Standardization,
Saloner,
Com-
& Garth
L.J.
Antitrust
Technology, 61
mercialize
Innovation,
Rand J. Econ.
&
patibility,
(1993). Particularly for smaller
579, 590
(1985).
devised
properly
And
70, 70-71
patent-
inor
limited resources
firms with
*39
provide consumers
both
safety standards
of-
industries,
conclaves
professional
heavy
safety and
minimum
guarantee
some
infor-
acquiring
means of
fer an efficient
adopt
albeit
to
safer
encourage producers
world,
complex
In an ever more
mation.
features, buoyed by the
expensive
more
to the
vital
sharing information becomes
these
may realize
consumers
hope that
highly
so crucial
perspectives
holistic
they
expensive
more
because
are
products
To
keep pace.
companies
specialized
help
thus
use. The standards
safer
assists
end,
information
sharing
shoddy
prod-
or unsafe
cheaper,
prevent
increasingly com-
in
industry
American
try-
undercutting manufacturers
ucts from
marketplace..
global
petitive
These
welfare.
consumer
ing
protect
industry-wide
example,
one
but
To take
and
to consumers
many other benefits
and
driving
force
has been
coordination
stan-
can accrue from
alike
competition
in American semi-
technological progress
dardization.
In
semi-
manufacturing.
conductor
a consor-
producers established
conductor
recognizing
majority for
I
commend
gathered
pooled resources
tium
standard-setting
of the virtues
some
then a
what was
from across
information
so,
doing
435.
organizations.2 Ante
&
M. Jorde
industry. Thomas
stagnant
however,
caught in a contradiction:
gets
Innovation,
Teece,
Cooperation
David J.
monopolis-
acknowledges the
majority
1, 35
Antitrust, Berkeley Tech.
L.J.
standard-setting con-
plaintiffs’
tic aims
then,
manu-
(1989). Since
semiconductor
eye to
a blind
claim but turns
spiracy
them
the size of
only reduced
facturers
driving
impulse
anticompetitive
same
(nm) to 45
500 nanometers
circuits—from
Compare
allegation.
boycott
group,
SD3’s
quadrupled
than
they also more
nm—but
opin-
431. Its
ante at
at 436-38 with
ante
transistors,
amplifiers,
the number
totality of what
comprehend
ion
fails
Pa-
Kapoor &
Rahul
chips.
semiconductor
here.
to achieve
aims
SD3
Interplay
McGrath, Unmaski-ng the
tia J.
use
entirety, plaintiffs’
taken
its
When
R & D
Technology Evolution
Between
of even
the heart
law strikes
of antitrust
the Global
Evidence
Collaboration:
from
claims
rejecting SD3’s
in Part III
majority
concur
Part Vi of
I
concur in
thus
simply
of defendants
against a number
challenge
the ac-
dismissing
opinion
SD3’s
nothing
conspiracy through
lumped into
Un-
standard-setting organization,
tions of
allegations.
conclusory
Laboratories,
(UL).
than
I also
more
Inc.
derwriters
the most constructive
coopera
horizontal
complaint in which a supposed group boy-
tion.
I recognize that collaboration may- cott fell apart for so many reasons and in
collusion,
shade into
very
evil that the
so many directions. Even applying the
Sherman Act was designed to prevent.
generous
most
assumptions, one is hard
See, e.g.,
Soc’y
Am.
Eng’rs, Inc. v. pressed to
a plausible
find
group boycott
of Mech.
Hydrolevel Corp.,
456 U.S.
102 S.Ct.
claim in defendants’ divergent and market-
(1982)
III.
I have seldom read a complaint where so
many defendants were named com-
plaint (twenty-two) and so few were actual- (four).
ly discussed I have seldom seen a