SD3, LLC v. Black & Decker (U.S.) Inc. ( 2015 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-1746
SD3, LLC; SAWSTOP LLC,
Plaintiffs – Appellants,
v.
BLACK & DECKER (U.S.) INC.; BLACK & DECKER CORPORATION;
CHANG TYPE INDUSTRIAL CO., LTD.; DELTA POWER EQUIPMENT
CORP.; HITACHI KOKI CO., LTD.; HITACHI KOKI USA LTD.; MAKITA
CORPORATION; MAKITA U.S.A., INC.; MILWAUKEE ELECTRIC TOOL
CORP.; ONE WORLD TECHNOLOGIES, INC.; OWT INDUSTRIES, INC.;
ROBERT BOSCH GMBH; ROBERT BOSCH TOOL CORPORATION; RYOBI
TECHNOLOGIES, INC.; STANLEY BLACK & DECKER, INC.; TECHTRONIC
INDUSTRIES, CO., LTD.; TECHTRONIC INDUSTRIES NORTH AMERICA,
INC.; PENTAIR WATER GROUP, INC.; EMERSON ELECTRIC COMPANY;
PENTAIR, INC.,
Defendants – Appellees,
and
DEWALT INDUSTRIAL TOOLS; EMERSON ELECTRIC COMPANY, INC.;
PENTAIR CORPORATION; PORTER-CABLE CORPORATION; SKIL POWER
TOOLS,
Defendants.
----------------------------
AMERICAN ANTITRUST INSTITUTE; NATIONAL CONSUMERS LEAGUE,
Amici Supporting Appellants.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Claude M. Hilton, Senior
District Judge. (1:14−cv−00191−CMH−IDD)
Argued: May 12, 2015 Decided: September 15, 2015
Before WILKINSON, AGEE, and WYNN, Circuit Judges.
Affirmed in part, vacated in part, and remanded by published
opinion. Judge Agee wrote the opinion, in which Judge Wynn
joined. Judge Wynn wrote a separate concurring opinion. Judge
Wilkinson wrote an opinion concurring in part and dissenting in
part.
ARGUED: Joel Davidow, CUNEO GILBERT & LADUCA, LLP, Washington,
D.C., for Appellants. James Scott Ballenger, LATHAM & WATKINS,
LLP, Washington, D.C., for Appellees. ON BRIEF: Jonathan W.
Cuneo, Matthew E. Miller, CUNEO GILBERT & LADUCA, LLP,
Washington, D.C., for Appellants. John D. Harkrider, Richard B.
Dagen, AXINN, VELTROP & HARKRIDER LLP, Washington, D.C., Bernard
J. DiMuro, DIMURO GINSBERG PC, Alexandria, Virginia, for
Appellees Stanley Black & Decker, Incorporated, Black & Decker
(U.S.) Incorporated, and Black & Decker Corporation; Christopher
S. Yates, Christopher B. Campbell, Aaron T. Chiu, LATHAM &
WATKINS LLP, San Francisco, California, for Appellee Emerson
Electric Company; Paul Devinsky, Stefan M. Meisner, MCDERMOTT
WILL & EMERY LLP, Washington, D.C., for Appellees Hitachi Koki
USA Ltd. and Hitachi Koki Co., Ltd.; Lee H. Simowitz, Elizabeth
A. Scully, Katherine L. McKnight, BAKER & HOSTETLER LLP,
Washington, D.C., for Appellees Makita USA Incorporated and
Makita Corporation; David M. Foster, Washington, D.C., Layne E.
Kruse, Eliot Fielding Turner, FULBRIGHT & JAWORSKI LLP, Houston,
Texas, for Appellees Robert Bosch Tool Corporation and Robert
Bosch GmbH; James G. Kress, BAKER BOTTS L.L.P., Washington,
D.C., Scott W. Hansen, Steven P. Bogart, James N. Law, REINHART
BOERNER VAN DEUREN S.C., Milwaukee, Wisconsin, for Appellees
Milwaukee Electric Tool Corporation, One World Technologies,
Incorporated, OWT Industries, Incorporated, Ryobi Technologies,
Incorporated, Techtronics Industries Co., Ltd., and Techtronic
Industries North America, Incorporated. Seth D. Greenstein,
David D. Golden, CONSTANTINE CANNON LLP, Washington, D.C., for
Amici Curiae.
2
AGEE, Circuit Judge:
SD3, LLC and its subsidiary, SawStop, LLC (together,
“SawStop”), contend that several major table-saw manufacturers
conspired to boycott SawStop’s safety technology and corrupt a
private safety-standard-setting process, all with the aim of
keeping that technology off the market. Consequently, SawStop
sued nearly two dozen saw manufacturers and affiliated entities,
alleging that they violated § 1 of the Sherman Antitrust Act, 15
U.S.C. § 1. The district court dismissed SawStop’s amended
complaint based on, among other things, its belief that SawStop
had failed to plead facts establishing an unlawful agreement.
See SD3, LLC v. Black & Decker (U.S.), Inc., No. 11:14-cv-191,
2014 WL 3500674 (E.D. Va. July 15, 2014). SawStop appealed.
We agree with the district court that several parts of
SawStop’s case cannot go forward. SawStop’s complaint does not
plausibly allege any conspiracy to manipulate safety standards,
so we affirm the district court’s decision to dismiss SawStop’s
claims concerning standard-setting. Likewise, the complaint
fails to allege any facts at all against several corporate
parents and affiliates, so we affirm the district court’s
decision to dismiss all claims against those defendants.
But as to the remaining defendants, SawStop has alleged
enough to suggest a plausible agreement to engage in a group
boycott. Although that claim may not prove ultimately
3
successful at trial, or even survive summary judgment, the
complaint offers enough to survive the defendants’ motion to
dismiss. “[A] well-pleaded complaint may proceed even if it
strikes a savvy judge that actual proof of those facts is
improbable, and that a recovery is very remote and unlikely.” 1
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007). Thus, we
vacate the district court’s decision dismissing SawStop’s group-
boycott claim and remand for further proceedings.
I. Background
A. Relevant Facts
This appeal concerns a decision on a motion to dismiss, so
we draw the relevant facts only from allegations in SawStop’s
complaint and from sources incorporated into that complaint.
“In reviewing the dismissal of a complaint, we must assume all
well-pled facts to be true and draw all reasonable inferences in
favor of the plaintiff.” Cooksey v. Futrell, 721 F.3d 226, 234
(4th Cir. 2013). Keeping that standard in mind, we now consider
the relevant facts.
1 We have omitted any internal quotation marks, alterations,
emphasis, or citations here and throughout this opinion, unless
otherwise noted.
4
1.
In the 1990s, SawStop’s founder, Dr. Stephen Gass, created
a form of “active injury mitigation technology” (“AIMT”) meant
to prevent some hand and finger injuries on table saws. In
basic terms, Gass’ technology “detects contact between a person
and the blade and then stops and retracts the blade to mitigate
injury.” J.A. 83 ¶ 60. When this system works as it should, a
table-saw user who makes contact with the blade will suffer only
a small nick rather than more serious injury.
Gass and his co-inventors initially sought to capitalize on
their invention by pursuing licensing agreements with the major
table-saw manufacturers. The effort began in August 2000, when
SawStop first took a “prototype table saw” to a trade show to
publicly demonstrate the technology. J.A. 86 ¶ 66. That
demonstration spurred meetings with some table-saw
manufacturers, including S-B Power Tool Corp.; Black & Decker
(U.S.), Inc.; Emerson Electric Company; and Ryobi Technologies,
Inc. J.A. 86 ¶ 67. During these meetings, SawStop sought
royalties at “typical commercial rates” of about “8% of
wholesale prices” in any license agreement. J.A. 86 ¶ 65.
The technology “impressed” the manufacturers. J.A. 87
¶ 68. Ryobi, for instance, formed a team to determine whether
it could incorporate SawStop’s technology into its products;
Ryobi’s counsel wanted to adopt the technology “as fast as they
5
[could].” J.A. 87 ¶ 69. S-B Power Tool likewise expressed
interest in “going forward.” J.A. 88 ¶ 73. One Black & Decker
U.S. employee told Gass that he felt a licensing agreement was
“inevitable,” even though Black & Decker was “used to being able
to crush little guys.” J.A. 88 ¶ 76. Emerson’s then-president
also held in-person meetings with SawStop to discuss a potential
deal. J.A. 88-89 ¶ 77. Several manufacturers conducted
technical studies to evaluate SawStop’s effectiveness in
preventing table-saw accidents, which produced positive results.
J.A. 87-88 ¶¶ 70, 74.
Still, table-saw manufacturers also held reservations, one
of which was product liability exposure. If some manufacturers
adopted AIMT while others did not, then an issue could arise as
to whether the non-adopters might be sued for producing an
inherently unsafe product. J.A. 90 ¶ 81. But a lawyer for one
defendant noted that the AIMT technology might be deemed
infeasible, and therefore less relevant in product-liability
suits, if it did not enter the market for some period. J.A. 87-
88 ¶ 72.
Putting aside product liability, some saw manufacturers
held other concerns, including that engineering and cost factors
could render the technology infeasible. By all accounts,
SawStop had not yet tested its technology in the marketplace.
That testing would take some time, and SawStop itself estimated
6
that the device could not have been fully implemented on all
table saws until as late as 2008. J.A. 92 ¶ 90. At least one
industry insider also believed that SawStop’s AIMT could induce
consumers to dispense with other safety features. J.A. 87 ¶ 71.
Furthermore, AIMT did not prevent certain other common table-saw
injuries, like kickback. Id.SawStop’s licensing discussions did not produce any
immediate results. One manufacturer, S-B Power Tool, ended
licensing discussions in September 2001. J.A. 88 ¶ 75.
2.
In October 2001, table-saw manufacturers allegedly met and
“decide[d] how to respond, as an industry, to the SawStop
[t]echnology.” J.A. 89 ¶ 80. The meeting occurred in
conjunction with the annual meeting of the Power Tool Institute,
a trade association. Like the broader annual meeting, the
table-saw session drew representatives from across the industry,
including S-B Power Tool; Ryobi; Makita USA, Inc.; Emerson;
Porter-Cable Corp.; Hitachi Koki USA Ltd.; Black & Decker U.S.;
and Milwaukee Electric Tool Corp. J.A. 89 ¶ 79.
SawStop alleges that the October 2001 meeting gave birth to
a group boycott against SawStop. The manufacturers first
purportedly determined to take an “all” or “nothing” approach,
in which all table-saw manufacturers would adopt SawStop’s
technology or none would. J.A. 89-90 ¶ 80. Then, they
7
allegedly took the latter path: they “agree[d] not to purchase
technology licenses from [SawStop] or otherwise implement AIMT.”
J.A. 90 ¶ 80. “[N]o contrary views [were] articulated.” Id.By keeping SawStop out of the market, the manufacturers hoped
that “it would remain . . . at least plausible for [them] to
contend, in defending product liability lawsuits, that AIMT was
not viable.” J.A. 90 ¶ 81.
Ultimately, SawStop contends, the group boycott succeeded.
“[T]hose Defendants not yet in license negotiations with SawStop
refrained from requesting a license, [while] Defendants who were
already in negotiations found ways to abort them as
opportunities arose.” J.A. 91 ¶ 85.
According to the complaint, it took only a matter of months
for the few defendants who had been negotiating with SawStop to
find ways to end those discussions. In January 2002, for
instance, Ryobi had agreed to a non-exclusive licensing
agreement with an initial 3% royalty and a 5% to 8% escalator
clause. J.A. 91-92 ¶ 87. SawStop, however, identified a “minor
ambiguity” in the agreement and asked Ryobi to correct the
“error.” J.A. 92 ¶ 87. Although Ryobi’s counsel assured
SawStop that would happen, Ryobi instead ended negotiations
entirely; Ryobi stopped responding to SawStop’s communications,
and never explained its failure to communicate further. Id.Similarly, Emerson abruptly ended negotiations, “offering
8
pretextual reasons for its lack of interest.” J.A. 92 ¶ 88.
And Black & Decker U.S. offered a “disingenuous and not made in
good faith” offer: a 1% royalty, paired with an indemnification
provision that would have placed liability on SawStop for
“various risks.” J.A. 92 ¶ 89.
3.
Having failed to sign any manufacturer to a licensing
agreement, SawStop turned to a private safety-standard-setting
organization, Underwriters Laboratories, Inc. (“UL”), to advance
the AIMT product. In December 2002, Gass submitted a proposal
to UL suggesting that the organization modify its widely
accepted safety standards to require AIMT on all table saws.
J.A. 96 ¶ 104. UL in turn referred the proposal to Standards
Technical Panel 745 (“STP 745”), a subgroup of UL that sets
standards for table saws. J.A. 96 ¶ 104.
SawStop’s proposal to modify the UL standards failed, and
SawStop alleges that the failure traces to a second conspiracy,
which we will term the “standard-rejection conspiracy.” In
SawStop’s view, STP 745 was “under the firm control of the
Defendants,” as its members comprised “either employees of the
Defendants or . . . purportedly unaffiliated consultants . . .
who are aligned with the Defendants.” J.A. 97 ¶ 106. Thus, the
defendants allegedly “agreed to vote as a bloc” to “thwart” the
proposal. J.A. 97 ¶ 105. After the vote, the defendants are
9
said to have “promulgated falsehoods, factual distortions and
product defamation” to ensure that STP 745 would not adopt any
standard incorporating AIMT. J.A. 101 ¶ 123.
4.
Later, the defendants are alleged to have additionally
conspired to develop their own safety standards, purportedly to
impose unnecessary costs on SawStop and foreclose any wide
adoption of AIMT. SawStop says that the defendants implemented
this conspiracy in multiple stages. First, in October 2003,
several defendants -- Black & Decker Corp.; Hitachi; Pentair,
Inc.; Robert Bosch Tool Corp.; Robert Bosch GmbH; Ryobi; One
World Technologies Inc.; and Techtronics Industries Co., Ltd. --
formed a joint venture to develop blade avoidance technology.
J.A. 97 ¶ 109. SawStop maintains that this venture was a mere
“smokescreen” to “fend off” intervention from the Consumer
Products Safety Commission, a federal safety agency, and
constituted an “act of fraudulent concealment.” Id. The
venture failed to produce any results. Later, in November 2004,
four defendants -- Black & Decker Corp., Makita USA, Robert
Bosch Tool Corp., and Techtronic Industries North America --
formed another joint venture. J.A. 98 ¶ 111. This venture,
too, was alleged to be a fake effort “to develop a uniform blade
guard standard to preclude quality competition on blade guard
10
standards.” Id. Members of the Power Tool Institute also began
work on a new blade guard design around the same time.
This third conspiracy, which we will call the “contrived-
standards conspiracy,” led to two standards changes adopted by
UL in 2005 and 2007. The first change added certain anti-
kickback devices. The second “specified that the blade guard
should not be a hood, but rather a modular design with a top-
barrier element and two side-barrier guarding elements.” J.A.
99 ¶ 115. SawStop maintains that this second change is too
designed-focused and ineffective; it deduces that the change
must therefore serve an illegitimate purpose.
SawStop further believes that the manufacturers are trying
to extend the contrived-standards conspiracy abroad, as they
“control” the International Electrotechnical Commission, the
European counterpart to UL. J.A. 100 ¶ 122.
5.
SawStop maintains that all of the alleged conspiracies have
continued through today, and the defendants purportedly
communicate weekly “to maintain” the conspiracies. J.A. 100
¶ 121. Nonetheless, SawStop was eventually able to enter the
market by making its own table saws employing AIMT in 2004.
J.A. 95 ¶ 101. When SawStop filed its complaint, it sold three
types of these saws. J.A. 95-96 ¶ 102. The company represented
at oral argument that it now makes additional models.
11
B. Proceedings Below
Based on the three purported conspiracies, SawStop filed a
complaint in February 2014 in the U.S. District Court for the
Eastern District of Virginia. The original three-count
complaint against 22 separate defendants alleged that the
manufacturer-defendants, conspiring with UL and the Power Tool
Institute, violated § 1 of the Sherman Act. After the
defendants moved to dismiss, however, SawStop filed a first
amended complaint -- the operative pleading on appeal --
dropping some defendants and adding three new counts under state
law. For convenience, we refer to the first amended complaint
as simply “the complaint.”
The district court dismissed SawStop’s complaint under
Federal Rule of Civil Procedure 12(b)(6) after identifying a
number of problems that it perceived in the facts alleged.
First, “Plaintiffs’ conspiracy allegations [were] belied by
their negotiating history with varying Defendants.” SD3, LLC,
2014 WL 3500674, at *3. In the district court’s view, SawStop
could not plausibly allege a refusal to deal when several
defendants had actually offered to deal, and the facts alleged
did not “tend[] to exclude” lawful explanations. Id. at *4.
Second, SawStop failed to allege anything as to several
defendants, instead choosing to lump them together in the
complaint without explanation. Id. Third, SawStop did not
12
allege “direct evidence” of agreement by referring to testimony
from a Ryobi engineer, David Peot. The district court found
that Peot’s testimony, when read in its full context, indicated
only that certain defendants launched a joint venture to develop
technology to prevent table-saw accidents. Id. at *5. Fourth,
SawStop had not established any harm from any of its alleged
conspiracies because the “purported motivation for the alleged
conspiracy is non-existent.” Id. And fifth, SawStop’s
standard-setting conspiracies alleged nothing more than ordinary
participation in trade groups, standard-setting organizations,
and joint ventures, which does not create antitrust liability.
Id. at *6.
SawStop timely appealed, challenging the district court’s
decision as to its three Sherman Act claims. SawStop does not
address the district court’s decision to dismiss its three
remaining state law claims. As to those claims, SawStop has
forfeited review, and we do not consider them. See Powell v.
Palisades Acquisition XVI, LLC, 782 F.3d 119, 127 (4th Cir.
2014). We have jurisdiction under 28 U.S.C. § 1291.
II. Standard of Review
“We review the district court’s grant of the defendants’
motion to dismiss de novo.” Johnson v. Am. Towers, LLC, 781
F.3d 693, 706 (4th Cir. 2015). “[W]e accept as true all well-
13
pled facts in the complaint and construe them in the light most
favorable to [SawStop].” United States v. Triple Canopy, Inc.,
775 F.3d 628, 632 n.1 (4th Cir. 2015). We do not, however,
“accept as true a legal conclusion couched as a factual
allegation.” Anand v. Ocwen Loan Servicing, LLC, 754 F.3d 195,
198 (4th Cir. 2014). Nor do we accept “unwarranted inferences,
unreasonable conclusions, or arguments.” United States ex rel.
Oberg v. Pa. Higher Educ. Assistance Agency, 745 F.3d 131, 136
(4th Cir. 2014). We can further put aside any “naked assertions
devoid of further factual enhancement.” Id.III. Allegations Against Parents and Affiliates
We begin by addressing a problem common to all counts of
the complaint.
A plaintiff in a § 1 case cannot assemble some collection
of defendants and then make vague, non-specific allegations
against all of them as a group. At trial, a § 1 plaintiff will
be required to make a “factual showing that each defendant
conspired in violation of the antitrust laws.” AD/SAT, Div. of
Skylight, Inc. v. Associated Press, 181 F.3d 216, 234 (2d Cir.
1999); cf. United States v. Foley, 598 F.2d 1323, 1336 (4th Cir.
1979) (examining whether a jury charge in a criminal antitrust
case “require[d] a sufficient involvement by each defendant”).
Thus, the complaint must forecast that factual showing, and if
14
it fails to allege particular facts against a particular
defendant, then the defendant must be dismissed. In other
words, the complaint must “specify how these defendants [were]
involved in the alleged conspiracy,” without relying on
“indeterminate assertions” against all “defendants.” In re
Travel Agent Comm’n Antitrust Litig., 583 F.3d 896, 905 (6th
Cir. 2009); see also Total Benefits Planning Agency, Inc. v.
Anthem Blue Cross & Blue Shield, 552 F.3d 430, 436 (6th Cir.
2008); In re Elevator Antitrust Litig., 502 F.3d 47, 50-51 (2d
Cir. 2007).
Nevertheless, SawStop means to bring claims against some
corporate parents -- including Hitachi Koki Co., Ltd.; Makita
Corporation; and Chang Type Industrial Co., Ltd. -- even though
no factual allegations are made against them. Instead, SawStop
nakedly alleges only that all of the corporate subsidiaries are
“dominated by, and [are] alter ego[s] of,” these corporate
parents. J.A. 73-78. That allegation offers only a legal
conclusion, and SawStop has alleged no facts suggesting the kind
of unity of interests that we usually require a party to plead
before permitting them to advance an alter ego theory. See,
e.g., C.F. Trust, Inc. v. First Flight Ltd. P’ship, 306 F.3d
126, 134 (4th Cir. 2002). “The fact that two separate legal
entities may have a corporate affiliation does not alter [the]
pleading requirement” to separately identify each defendant’s
15
involvement in the conspiracy. In re Aluminum Warehousing
Antitrust Litig., No. 13–md–2481 (KBF), 2015 WL 1344429, at *2
(S.D.N.Y. Mar. 23, 2015).
The complaint also fails to allege any facts pertaining to
certain of the corporate subsidiaries. In discussing the
alleged group boycott, for example, SawStop never mentions
Techtronic Industries North America, Inc.; OWT Industries, Inc.;
or Pentair Water Group, Inc. OWT Industries, Inc. and Pentair
Water Group also go unmentioned in SawStop’s allegations as to
the UL safety standards. A defendant obviously may not pursue
an antitrust claim against a defendant who is not alleged to
have done anything at all. Antitrust law doesn’t recognize
guilt by mere association, imputing corporate liability to any
affiliate company unlucky enough to be a bystander to its sister
company’s alleged misdeeds.
SawStop tries to tie other defendants to the purported
conspiracies with nothing more than conclusory statements, even
though those defendants entered the table-saw industry well
after these conspiracies allegedly began. Stanley Black &
Decker, Inc., for instance, is purportedly liable because
“persons speaking for [the company] have affirmed its
understanding of the purpose of [the conspiracies], and agreed
to participate in [them].” J.A. 99 ¶ 117. SawStop alleges the
same as to Delta Power Equipment, Inc. J.A. 99 ¶ 116.
16
“[U]nadorned conclusory allegations” like these are akin to no
allegations at all. Vitol, S.A. v. Primerose Shipping Co., 708
F.3d 527, 543 (4th Cir. 2013).
For these reasons, SawStop cannot proceed against all of
the defendants. In particular, Hitachi Koki Co., Ltd.; Makita
Corporation; Chang Type Industrial Co., Ltd.; OWT Industries,
Inc.; Pentair Water Group, Inc.; Stanley Black & Decker, Inc.;
and Delta Power Equipment, Inc. must be dismissed as to all
counts. The group-boycott claim against Techtronic Industries
North America, Inc. must also be dismissed. The district court
correctly dismissed these defendants because, at least as to
them, the “complaint was vague, never explained its case, and
lumped [them] together without sufficient detail.” Bates v.
City of Chicago, 726 F.3d 951, 958 (7th Cir. 2013).
We now consider whether SawStop has properly alleged an
antitrust conspiracy against the remaining manufacturers.
IV. Pleading a § 1 Conspiracy
Section 1 of the Sherman Antitrust Act prohibits “[e]very
contract, combination . . ., or conspiracy in restraint of
trade.” 15 U.S.C. § 1. “To establish a § 1 antitrust
violation, a plaintiff must prove (1) a contract, combination,
or conspiracy; (2) that imposed an unreasonable restraint of
17
trade.” N.C. State Bd. of Dental Exam’rs v. FTC, 717 F.3d 359,
371 (4th Cir. 2013).
This appeal principally concerns the first element, the
conspiracy. “[S]ection one’s prohibition against restraint of
trade applies only to concerted action, which requires evidence
of a relationship between at least two legally distinct persons
or entities.” Robertson v. Sea Pines Real Estate Cos., 679 F.3d
278, 284 (4th Cir. 2012). To be actionable, the defendants must
have specifically made a “conscious commitment to a common
scheme designed to achieve an unlawful objective.” Monsanto Co.
v. Spray-Rite Serv. Corp., 465 U.S. 752, 764 (1984). Not even
“conscious parallelism” is enough, Brooke Grp. Ltd. v. Brown &
Williamson Tobacco Corp., 509 U.S. 209, 227 (1993), as
“independent action is not proscribed by § 1,” Va. Vermiculite,
Ltd. v. Historic Green Springs, Inc., 307 F.3d 277, 280 (4th
Cir. 2002).
Accordingly, a plaintiff bringing a § 1 claim must first
plead an agreement to restrain trade. In Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 556 (2007), the Supreme Court explained
that such a plaintiff must plead “enough factual matter (taken
as true) to suggest that [the requisite] agreement was made.”
In other words, the complaint must contain “enough fact to raise
a reasonable expectation that discovery will reveal evidence of
illegal agreement.” Id. For this reason, “allegations of
18
parallel conduct [on the part of the defendants] . . . must be
placed in a context that raises a suggestion of a preceding
agreement, not merely parallel conduct that could just as well
be independent action.” Id. at 557. “[A] conclusory allegation
of agreement at some unidentified point [also] does not supply
facts adequate to show illegality.” Id.At bottom, Twombly applies a long-held principle in
antitrust law to the pleading stage: parallel conduct, standing
alone, does not establish the required agreement because it is
equally consistent with lawful conduct. The Twombly plaintiffs
asked the Court to reject that idea and assume a conspiracy
“exclusively” from action that seemed too coincidentally similar
to be independent. Id. at 565 n.11. The Court refused, and for
good reason. “Parallel conduct or interdependence,” after all,
is “just as much in line with a wide swath of rational and
competitive business strategy unilaterally prompted by common
perceptions of the market.” Id. at 554. Thus, the complaint in
Twombly failed because it rested only on “descriptions of
parallel conduct” that could be just as easily explained by
“natural, unilateral reaction[s]” from each defendant. Id. at
564, 566; see also Robertson, 679 F.3d at 289 (“Twombly required
contextual evidence to substantiate a speculative claim about
the existence and substance of a conspiracy.”).
19
For a § 1 claim to survive, then, a plaintiff must plead
parallel conduct and something “more.” Twombly, 550 U.S. at
557. That “more” must consist of “further circumstance[s]
pointing toward a meeting of the minds.” Id. Allegations could
suffice, for instance, where a plaintiff demonstrates that the
parallel behavior “would probably not result from chance,
coincidence, independent responses to common stimuli, or mere
interdependence unaided by an advance understanding among the
parties.” Id. at 556 n.4. Often “characterized as ‘parallel
plus’ or ‘plus factors,” Evergreen Partnering Grp., Inc. v.
Pactiv Corp., 720 F.3d 33, 45 (1st Cir. 2013), these facts must
be evaluated holistically, see Cont’l Ore Co. v. Union Carbide &
Carbon Corp., 370 U.S. 690, 699 (1962) (cautioning courts not to
“compartmentaliz[e] the various factual components” of an
antitrust case).
We do not take the approach that the dissent pursues, which
seems to parse each “plus factor” individually and ask whether
that factor, standing alone, would be sufficient to provide the
“more.” Cf. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551
U.S. 308, 310 (2007) (explaining that “courts must consider the
complaint in its entirety” to determine whether “all of the
facts alleged, taken collectively,” give rise to relevant
inferences, rather than asking “whether any individual
allegation, scrutinized in isolation, meets that standard”).
20
Actions that might seem otherwise neutral in isolation can take
on a different shape when considered in conjunction with other
surrounding circumstances. See William E. Kovacic, et al., Plus
Factors and Agreement in Antitrust Law, 110 Mich. L. Rev. 393,
426-34 (2011) (explaining why plus factors must be analyzed in
groups or “constellations”).
Importantly, Twombly’s requirement to plead something
“more” than parallel conduct does not impose a probability
standard at the motion-to-dismiss stage. See Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009). Courts must be careful, then, not to
subject the complaint’s allegations to the familiar
“preponderance of the evidence” standard. Text Messaging
Antitrust Litig., 630 F.3d 622, 629 (7th Cir. 2010). When a
court confuses probability and plausibility, it inevitably
begins weighing the competing inferences that can be drawn from
the complaint. But it is not our task at the motion-to-dismiss
stage to determine “whether a lawful alternative explanation
appear[s] more likely” from the facts of the complaint. Houck
v. Substitute Tr. Servs., Inc., 791 F.3d 473, 484 (4th Cir.
2015). Post-Twombly appellate courts have often been called
upon to correct district courts that mistakenly engaged in this
sort of premature weighing exercise in antitrust cases. See,
e.g., Evergreen Partnering Grp., 720 F.3d at 50; Erie Cnty.,
Ohio v. Morton Salt, Inc., 702 F.3d 860, 868-69 (6th Cir. 2012);
21
Anderson News, L.L.C. v. Am. Media, Inc., 680 F.3d 162, 189 (2d
Cir. 2012).
Similarly, courts must be careful not to import the
summary-judgment standard into the motion-to-dismiss stage. At
summary judgment in a § 1 case, a plaintiff must summon
“evidence tending to exclude the possibility of independent
action.” Twombly, 550 U.S. at 554; see also Monsanto, 465 U.S.
at 764; Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475
U.S. 574, 588 (1986). But the motion-to-dismiss stage concerns
an “antecedent question,” Twombly, 550 U.S. at 554, and “[t]he
‘plausibly suggesting’ threshold for a conspiracy complaint
remains considerably less than the ‘tends to rule out the
possibility’ standard for summary judgment,” Starr v. Sony BMG
Music Entm’t, 592 F.3d 314, 325 (2d Cir. 2010). Thus,
“[a]lthough Twombly’s articulation of the pleading standard for
§ 1 cases draws from summary judgment jurisprudence, the
standards applicable to Rule 12(b)(6) and Rule 56 motions remain
distinct.” In re Ins. Brokerage Antitrust Litig., 618 F.3d 300,
323 n. 21 (3d Cir. 2010). “[T]here is no authority . . . for
extending the [Monsanto/Matsushita] standard to the pleading
stage.” Erie Cnty., 702 F.3d at 869. Indeed, such an extension
would be wholly unrealistic, as “a plaintiff may only have so
much information at his disposal at the outset.” Robertson, 679
F.3d at 291. Here, for instance, SawStop was three months into
22
its case and had not conducted any discovery when the defendants
moved to dismiss. We can hardly expect it to have built its
entire case so early on.
We therefore consider whether the district court properly
applied this plausibility-focused standard.
V. Group Boycott
SawStop initially alleges a group boycott, which generally
constitutes a “concerted refusal[] by traders to deal with other
traders.” Klor’s, Inc. v. Broadway-Hale Stores, Inc., 359 U.S.
207, 212 (1959). Most often, group boycotts involve “horizontal
agreements among direct competitors” with the aim of injuring a
rival. NYNEX Corp. v. Discon, Inc., 525 U.S. 128, 135 (1998).
This sort of “naked concerted refusal occurs when the defendants
are not engaged in any significant integration of production or
distribution, and the only rationale for the restraint is the
elimination of additional, lower-cost, higher-quality, or more
innovative output from the market.” Phillip E. Areeda & Herbert
Hovenkamp, Fundamentals of Antitrust Law § 22.02a (4th ed. 2014
supp.). “[S]uch agreements . . . cripple the freedom of traders
and thereby restrain their ability to sell in accordance with
their own judgment.” Kiefer-Stewart Co. v. Joseph E. Seagram &
Sons, 340 U.S. 211, 213 (1951).
23
A.
The district court held that SawStop had not adequately
alleged an agreement to boycott. However, in reaching that
conclusion, the district court committed the two errors that we
earlier cautioned against.
First, it confused the motion-to-dismiss standard with the
standard for summary judgment. The district court twice cited
Matsushita -- the case defining the “tends to exclude” standard
for summary judgment -- as a basis for its ruling. See SD3,
LLC, 2014 WL 3500674, at *3, 4. It then mistakenly dismissed
certain claims because the facts alleged did not “tend[] to
exclude” independent action. Id. at *4. It made explicit
findings of fact -- including a finding that motive was “non-
existent” -- that were plainly contradicted by the terms of the
complaint. See J.A. 89-90 ¶¶ 80-81 (alleging motive). The
district court further required SawStop to definitively “show an
agreement,” SD3, LLC, 2014 WL 3500674, at *3, rather than asking
whether the allegations “plausibly suggest[ed]” such an
agreement, Twombly, 550 U.S. at 557. And it erroneously looked
to summary judgment cases to define the relevant standards.
See, e.g., SD3, LLC, 2014 WL 3500674, at *3 (citing Gtr.
Rockford Energy & Tech. Corp. v. Shell Oil Co., 998 F.2d 391,
396 (7th Cir. 1993)).
24
Second, the district court applied a standard much closer
to probability than plausibility. For instance, the district
court’s opinion adopts defendants’ characterizations of the
licensing negotiations and then draws unsurprisingly adverse
inferences against SawStop based on them. The district court
noted, for example, that Emerson had made a pre-conspiracy offer
to license, but believed that SawStop had made “no allegation
that Emerson rescinded that offer.” SD3, LLC, 2014 WL 3500674,
at *4. SawStop specifically alleged to the contrary that
“Emerson cut off all license negotiations with SawStop, offering
pretextual reasons for its lack of interest, and did not renew
them.” J.A. 92 ¶ 88. In much the same way, it concluded that a
“disingenuous” offer to license from Black & Decker USA was
inconsistent with conspiracy, SD3, LLC, 2014 WL 3500674, at *4,
without explaining why an offer that SawStop pled was intended
to be rejected was unavoidably inconsistent with a refusal to
license. On the whole, these inferences seem to have been
colored by the district court’s belief that SawStop was “a
technology with uncertain commercial viability and safety.” Id.
at *5.
In short, the district court imposed a heightened pleading
requirement -- but such a standard does not apply on a Rule
12(b)(6) motion, even in an antitrust case. See Marucci Sports,
L.L.C. v. Nat’l Collegiate Ath. Ass’n, 751 F.3d 368, 373 (4th
25
Cir. 2014); W. Penn Allegheny Health Sys., Inc. v. UPMC, 627
F.3d 85, 98 (3d Cir. 2010). This heightened pleading standard
was error. Instead, the district court should have asked
whether SawStop has alleged parallel action and something “more”
that indicates agreement, as Twombly provides.
Our de novo standard of review means that we can decide the
matter without deference to the lower court. Thus, we may apply
the appropriate, Twombly-based standard ourselves rather than
remanding to the district court for another attempt of its own.
See, e.g., Houck, 791 F.3d at 484-86; Triple Canopy, 775 F.3d at
637-40. Further, we enjoy the benefit of the parties’ briefs,
and can read and understand the complaint in the same way as
could the district court. Thus, we proceed to consider whether
SawStop has adequately alleged a group boycott.
B.
A plaintiff establishes parallel conduct when it pleads
facts indicating that the defendants acted “similarly.”
Petruzzi’s IGA Supermarkets, Inc. v. Darling-Delaware Co., 998
F.2d 1224, 1243 (3d Cir. 1993); see also Hyland v. HomeServices
of Am., Inc., 771 F.3d 310, 320 (6th Cir. 2014) (considering
whether the defendants’ actions were “uniform”).
SawStop adequately alleged parallel conduct. The similar
or uniform actions alleged are obvious: none of the defendants
ultimately took a license or otherwise implemented SawStop’s
26
technology. As a result, SawStop could not pursue its initial
business strategy of entering the market through a license
agreement with a major table-saw manufacturer. Such actions are
classically anticompetitive, as “parallel action that excludes
new entrants both facilitates price elevation and can slow
innovation.” C. Scott Hemphill & Tim Wu, Price Exclusion, 122
Yale L.J. 1182, 1185 (2013).
The manufacturers incorrectly insist that their conduct
must be deemed dissimilar at this stage because some licensing
negotiations continued after the conspiracy formed. The
district court agreed. See SD3, LLC, 2014 WL 3500674, at *4
(“The sequence of all of these events undermines the Plaintiffs’
group boycott allegations.”). So does the dissent.
But that argument misunderstands the nature of the alleged
boycott, while again confusing “probability” with
“plausibility.” The manufacturers could have achieved their
alleged objective of keeping SawStop off the market in any
number of ways: they could refuse any licensing discussions at
all, they could engage in spurious licensing discussions, see,
e.g., J.A. 93 ¶ 94, they could sign a license agreement and then
never implement it, or they could scare SawStop off with
commercially unreasonable offers. All of these actions could be
consistent with the boycott’s ultimate alleged objective,
exclusion from the marketplace. See Evergreen Partnering Grp.,
27
720 F.3d at 51 (faulting the district court for “improperly
weigh[ing] [the] defendants’ alleged[ly] inconsistent
responses”); Anderson News, 680 F.3d at 191 (holding that
defendants’ “varied” actions during the initial stages of the
alleged conspiracy did not render the existence of a conspiracy
implausible).
SawStop never alleged that the manufacturers agreed on a
common manner of preventing SawStop’s entry into the market.
That’s not surprising. Commercially sophisticated parties like
the defendants could well understand the red flags that would be
raised from a blanket, total refusal to negotiate. See, e.g.,
Am. Tobacco Co. v. United States, 328 U.S. 781, 800-01 (1946)
(detailing a price-fixing conspiracy in which the defendants
used a variety of differing methods to achieve the same ultimate
objective, an understood and settled price for tobacco).
SawStop might have become suspicious if all of the defendants
fled the negotiations en masse without any pretextual cover.
But if the defendants employed different courses of action, then
their conspiracy might better avoid detection. SawStop alleges
they did exactly that. See J.A. 94 ¶ 96 (“Defendants
fraudulently concealed the AIMT Boycott by, among other things,
giving separate excuses for not taking a license[.]”); J.A. 95
¶ 100 (“[SawStop]’s inquiries were met with silence, false
denials . . . and misleading explanations[.]”).
28
The dissent, however, is unwilling to credit SawStop’s
factual allegation that the different paths of negotiations were
themselves part of the claimed conspiratorial ruse. It contends
that, in crediting SawStop’s allegation, we “underestimate[] the
difficulty of getting a group of competitors to agree on a
course of action that separate contract negotiations may or may
not have shown to be in their best commercial interest.”
Dissenting op. at 85. But the same thing could be said about
most any alleged agreement between competing businesses -- and
yet the law has never embraced a presumption against business
agreements. Much of antitrust law is premised on such
agreements. More importantly, we are in no position at this
stage to make “estimates” of the sort the dissent posits. It
should hardly need to be said again that we must proceed “on the
assumption that all the allegations in the complaint are true
(even if doubtful in fact).” Twombly, 550 U.S. 555. “Rule
12(b)(6) does not countenance dismissals based on a judge’s
disbelief of a complaint’s factual allegations.” Colon Health
Ctrs. of Am., LLLC v. Hazel, 733 F.3d 535, 545 (4th Cir. 2013).
We must be careful not to rely on our own subjective
disbelief here, as even the acts that the manufacturers and the
dissent say are dissimilar might also be read to suggest
deception. Ryobi and Emerson, for example, suddenly ended
negotiations without sufficient explanation after proceeding all
29
the way to a draft license agreement. See J.A. 92 ¶¶ 77, 87-88.
This sort of abrupt and unexplained shift in behavior can
suggest that a defendant’s acts were not entirely independent,
as the shift came after the alleged October 2001 agreement to
launch the boycott. See, e.g., Toys “R” Us, Inc. v. FTC, 221
F.3d 928, 935 (7th Cir. 2000) (explaining that the defendants’
sudden “decision to stop dealing,” which was an “abrupt shift
from the past,” provided more reason to infer a horizontal
agreement). For its part, Black & Decker USA purportedly
tendered only a “disingenuous” offer that was “not made in good
faith.” J.A. 92 ¶ 89. Assuming that characterization is
accurate (as we must), few benign purposes would be served by
such an offer.
But the dissent would require more, even at this early
stage of the proceedings; it would find “parallel conduct” only
when defendants move in relative lockstep, achieving their
common anticompetitive ends (exclusion) only by substantially
identical means. So far as we can tell, this standard finds no
support in any existing authority.
The three decisions that the dissent cites do not support
the proposed rule, as they all involved non-parallel “ends.” One
involved inconsistent pricing in an alleged price-fixing
conspiracy, see City of Moundridge v. Exxon Mobil Corp., 429 F.
Supp. 2d 117, 131-32 (D.D.C. 2006), while another addressed
30
wildly varying surcharges (in both amount and timing) in an
alleged fuel-surcharge-fixing conspiracy, LaFlamme v. Societe
Air France, 702 F. Supp. 2d 136, 151 (E.D.N.Y. 2010). The last,
an appeal from a summary judgment decision, held only that the
defendant had not established conscious parallelism on the part
of one defendant; it assumed, however, that the actions alleged
were parallel. See Cosmetic Gallery, Inc. v. Schoeneneman
Corp., 495 F.3d 46, 54 (3d Cir. 2007). At best, these cases
stand for an unremarkable proposition: parallel conduct must
produce parallel results. And they further recognize the very
point so hotly contested by the dissent: parallel conduct “need
not be exactly simultaneous and identical in order to give rise
to an inference of agreement.” LaFlamme, 702 F. Supp. 2d at
151; cf. City of Moundridge v. Exxon Mobil Corp., Civil Action
No. 04-940 (RWR), 2009 WL 5385975, at *5 (D.D.C. Sept. 30, 2009)
(“Price-fixing can occur even though the price increases are not
identical in absolute or relative terms.”).
Our own precedent does not support the dissent’s view.
Take, for example, United States v. Foley, 598 F.2d 1323 (4th
Cir. 1979), in which a group of real estate brokers were
convicted of violating § 1 by conspiring to fix real estate
commissions. It seems an understatement to say that the Foley
defendants did not move in any way close to perfect tandem: some
defendants did not act to implement the commission-fixing
31
agreement until months after it formed, while at least one
defendant implemented the new commissions before the conspiracy
formed. Id. at 1332-34. Still other defendants only
“partially” joined, taking higher commissions when available but
otherwise pursuing lower ones. Id. Had Foley been decided
under the dissent’s framework, these “divergent paths to the
same end” (higher commissions) would apparently have required
reversal of the convictions. The Court, however, reached a
different result -- it affirmed all nine criminal convictions
after finding sufficient evidence of agreement. Id. at 1335.
Foley, then, effectively rejects the dissent’s proposed
methodology.
Lastly, we disagree that the dissent’s definition is needed
to avoid imposing antitrust liability on innocent activities.
The dissent proceeds as if a finding of parallel conduct
inexorably leads to liability. But Twombly’s foundational
principle is that parallel conduct, standing alone, is not
enough to impose antitrust liability. In other words, the
plaintiff’s initial showing of parallel conduct is only an
initial step in a multi-step process. It is the additional
steps required of an antitrust plaintiff that are meant to
ensure that innocent business activities are not tarred as
antitrust violations, whether at the motion-to-dismiss stage or
later.
32
Thus, we think it plain that SawStop alleged parallel
conduct. The remaining question is whether SawStop also pleads
the requisite “more” that “point[s] toward a meeting of the
minds.” Twombly, 550 U.S. at 557.
C.
SawStop has alleged the “more” necessary to move its
allegations of parallel conduct into the realm of plausibility.
The group-boycott claim pled in the complaint builds a
detailed story. SawStop identifies the particular time, place,
and manner in which the boycott initially formed, describing a
separate meeting held for that purpose during the Power Tool
Institute’s October 2001 annual meeting. See J.A. 89-90 ¶¶ 79-
81. The complaint names at least six specific individuals who
took part in forming the boycott, noting which defendant each
person ostensibly represented. See J.A. 89 ¶¶ 78-79. The
complaint further tells us the means by which the defendants
sealed their boycott agreement: a majority vote. See J.A. 89
¶ 80. And the complaint then explains how the manufacturers
implemented the boycott: refusing to respond to entreaties from
SawStop, going silent after long negotiations, or offering only
bad-faith terms that were intended to be rejected. Thus,
“[u]nlike the plaintiffs in Twombly . . ., [SawStop] clearly has
alleged an express agreement to restrain trade.” Watson Carpet
& Floor Covering, Inc. v. Mohawk Indus., Inc., 648 F.3d 452, 457
33
(6th Cir. 2011); cf. Swierkiewicz v. Sorema N.A., 534 U.S. 506,
514 (2002) (explaining that a Title VII complaint should not
have been dismissed where it “detailed the events leading to his
termination, provided relevant dates, and included the ages and
nationalities of at least some of the relevant persons involved
with his termination”).
Antitrust complaints, like SawStop’s, “that include
detailed fact allegations as to the ‘who, what, when and where’
of the claimed antitrust misconduct not surprisingly survive
dismissal.” William Holmes & Melissa Mangiaracina, Antitrust
Law Handbook § 9:14 (2014 supp.); see also Carrier Corp. v.
Outokumpu Oyj, 673 F.3d 430, 445 (6th Cir. 2012); Kendall v.
Visa U.S.A., Inc., 518 F.3d 1042, 1048 (9th Cir. 2008); cf.
Goldfarb v. Mayor & City Council of Balt., 791 F.3d 500, 511
(4th Cir. 2015) (“A complaint should not be dismissed as long as
it provides sufficient detail about the claim to show that the
plaintiff has a more-than-conceivable chance of success on the
merits.”). Detail in a complaint of “further circumstances
pointing toward a meeting of the minds” allays the suspicion
that the plaintiff is merely speculating a conspiracy into
existence from coincidentally similar action. Twombly, 550 U.S.
at 557. That, after all, was Twombly’s principal concern. See
Swanson v. Citibank, N.A., 614 F.3d 400, 405 (7th Cir. 2010) (“A
more complex case [like one] involving . . . antitrust
34
violations[] will require more detail, both to give the opposing
party notice of what the case is all about and to show how, in
the plaintiff’s mind at least, the dots should be connected.”).
The dissent contends that the complaint rests on a “casual
presumption” of liability. But that view overlooks the
complaint’s detailed account of the alleged events -- an account
that, again, we must take as true for Rule 12(b)(6) purposes.
Instead, the dissent seems to rely on a series of factual
suppositions that might “perhaps” explain the relevant parallel
conduct. But that approach forces us to ignore the factual
allegations that form the heart of SawStop’s complaint: a
particular meeting on a particular day with particular
participants making a particular agreement that generated the
conspiracy at issue. And by favoring its perception of the
relevant events over the narrative offered by the complaint, the
dissent makes the very mistake that the district court made,
recasting “plausibility” into “probability.”
The dissent underscores the weakness in its position by
mischaracterizing the factual allegations in SawStop’s complaint
as “conclusory” in an effort to avoid them. It may be that the
dissent doesn’t believe the complaint’s detailed allegations,
but that skepticism does not render the allegations
“conclusory.” See Iqbal, 556 U.S. at 681 (explaining
allegations cannot be called “conclusory” merely because a judge
35
views them as “extravagantly fanciful,” “unrealistic,” or
“nonsensical”). Indeed, just two weeks after Twombly, the
Supreme Court reversed one of our sister circuits for making
much the same error. See Erickson v. Pardus, 551 U.S. 89, 90
(2007) (reversing dismissal of a complaint as “conclusory” where
the complaint alleged harm only by saying that prison officials
“endanger[ed] his life” by taking away needed treatment). And,
as a practical matter, demanding more than the particularized
allegations that SawStop offered here would compel an antitrust
plaintiff to plead evidence -- and we have already expressly
refused to impose such a requirement. See Robertson, 679 F.3d
at 291.
In any event, we observe that SawStop not only alleges the
“who, what, when, and where” in its complaint, but also the
“why.” “[M]otivation for common action” is a key circumstantial
fact. Einer R. Elhauge & Damien Geradin, Global Antitrust Law
and Economics 837 (2007); see also Hyland, 771 F.3d at 320
(listing “common motive to conspire” as a potential plus
factor); Mayor & City Council of Balt. v. Citigroup, Inc., 709
F.3d 129, 136 (2d Cir. 2013) (same). According to the
complaint, the defendants here were motivated to conspire out of
a fear of product-liability exposure: if one manufacturer
adopted the technology, then non-adopting manufacturers could
face liability exposure from their failure to employ AIMT.
36
Thus, under SawStop’s theory, the manufacturers conceived a
group boycott to keep AIMT off the market, thereby preventing
its use as a design alternative in product-liability cases. And
even though a complaint need not “forecast evidence” to support
its theory, Robertson, 679 F.3d at 291, SawStop’s complaint does
so by referencing testimony from Peot (the former Ryobi
engineer), who agrees that non-adopting manufacturers “could”
have been in “real legal trouble” if a major manufacturer had
adopted AIMT. Transcript of Trial at 4-125, Osorio v. One World
Techs. Inc., No. 06-CV-10725 (D. Mass. Feb. 25, 2010), ECF No.
137 (cited at J.A. 89 ¶ 80). The complaint further describes
statements in which Black & Decker’s counsel is alleged to have
said that product liability could be lessened “if a couple of
years passed without implementation of the SawStop
[t]echnology.” J.A. 87 ¶ 72.
The defendants insist that this alleged motive is
implausible, and the dissent agrees. They theorize that, if
SawStop’s theory of motive were true, one would have expected
all of the manufacturers to take a license once SawStop began
making its own AIMT-equipped saws in 2004. The complaint
indicates that course of events did not occur.
Once more, the manufacturers’ argument -- embraced by the
dissent -- seems to misconstrue the complaint’s allegations.
SawStop entered the market as a peripheral player. See
37
Appellant’s Br. 44 (“SawStop’s sales . . . did not even
constitute 1% of total industry sales of table saws in the
United States[.]”). Thus, the manufacturers were still
conceptually able to argue that SawStop was peddling a fringe
technology, as reflected in its “marginaliz[ed]” market
position. See J.A. 90 ¶ 81; see, e.g., Osorio v. One World
Techs., Inc., 659 F.3d 81, 87-88 (1st Cir. 2011) (describing
defendant’s argument that SawStop’s technology was not viable).
Indeed, the fact that the conspiracy did not include every
player in the table-saw industry implies that the conspirators
were concerned with major manufacturers taking a license, not
smaller ones. Thus, the defendants’ post-2004 actions -- which,
in any event, are not fully discussed in the complaint -- are
not much help in evaluating the manufacturers’ potential
motives.
Even if the “who, what, where, when, and why” were not
enough, the complaint also describes a number of communications
among the defendants. Allegations of communications and
meetings among conspirators can support an inference of
agreement because they provide the means and opportunity to
conspire. See, e.g., Evergreen Partnering Grp., Inc., 720 F.3d
at 49; Hyland, 771 F.3d at 320; Mayor & City Council of Balt.,
709 F.3d at 136. Here, in addition to discussing the October
2001 meeting where the alleged conspiracy formed, the complaint
38
describes phone calls, meetings, and discussions among the
various conspirators. Such “allegation[s] identif[y] a
practice, not illegal in itself, that facilitates [an antitrust
conspiracy] that would be difficult for the authorities to
detect.” Text Messaging, 630 F.3d at 628; accord Todd v. Exxon
Corp., 275 F.3d 191, 213 (2d Cir. 2001); see also Sharon E.
Foster, LIBOR Manipulation and Antitrust Allegations, 11 DePaul
Bus. & Com. L.J. 291, 304 (2013) (“Facilitating practices . . .
may evidence the plus factors necessary to establish the
inference of an agreement.”).
A market in which sales power is concentrated in the hands
of the few can also facilitate coercion. See, e.g., Evergreen
Partnering Grp., 720 F.3d at 48; Todd, 275 F.3d at 208; In re
High Fructose Corn Syrup Antitrust Litig., 295 F.3d 651, 656
(7th Cir. 2002). Fewer “minds” must “meet” in a concentrated
market. And the complaint implies that the table-saw market is
so concentrated, as the defendants here purportedly control 85%
of that market. J.A. 81 ¶¶ 44, 48; see, e.g., Starr, 592 F.3d
at 323 (listing the defendants’ control of 80% of the market as
a relevant plus factor). Further, the complaint describes ways
in which the manufacturers attempted to hide their actions,
including a mutual agreement not to “leave a paper trail.” See
J.A. 93-94 ¶¶ 92-97. These alleged attempts by the
manufacturers to hide their actions could suggest that the
39
defendants knew their actions “would attract antitrust
scrutiny,” Starr, 592 F.3d at 324; in other words, the alleged
facts suggest consciousness of guilt. Those actions give us
further reason to conclude that a group boycott is plausibly
alleged. 2
D.
Generally, “[i]n addition to establishing a conspiracy, a
successful plaintiff must also show . . . that the conspiracy
produced adverse, anti-competitive effects within the relevant
product and geographic market.” Terry’s Floor Fashions, Inc. v.
Burlington Indus., Inc., 763 F.2d 604, 611 n.10 (4th Cir. 1985).
In a viable complaint, “the plaintiff must allege, not only an
injury to himself, but an injury to the market as well.” Agnew
v. Nat’l Collegiate Ath. Ass’n, 683 F.3d 328, 335 (7th Cir.
2012); accord Todd, 275 F.3d at 213. “Actual anticompetitive
effects include, but are not limited to, reduction of output,
2 SawStop also argued that the complaint alleged sufficient
direct evidence of a conspiracy to avoid dismissal. See
Robertson, 679 F.3d at 289 (holding that a complaint can state a
§ 1 claim if it alleges “direct evidence” of the agreement
itself); but see Am. Chiropractic Ass’n v. Trigon Healthcare,
Inc., 367 F.3d 212, 226 (4th Cir. 2004) (indicating that
“smoking gun” direct evidence is “extremely rare in antitrust
cases”). As SawStop’s complaint meets “Twombly’s requirements
with respect to allegations of illegal parallel conduct,”
Robertson, 679 F.3d at 290, we need not determine whether
SawStop has adequately alleged direct evidence.
40
increase in price, or deterioration in quality.” Jacobs v.
Tempur-Pedic Int’l, Inc., 626 F.3d 1327, 1339 (11th Cir. 2010).
In cases involving “per se” violations of the Sherman Act,
however, this anti-competitive harm is essentially presumed.
“[C]ertain agreements or practices” have such a “pernicious
effect on competition” that they “are conclusively presumed to
be unreasonable and therefore illegal without elaborate inquiry
as to the precise harm” that they caused. TFWS, Inc. v.
Schaefer, 242 F.3d 198, 209 (4th Cir. 2001). Claims that such
agreements “lacked anticompetitive effects . . . are simply
irrelevant.” In re Cardizem CD Antitrust Litig., 332 F.3d 896,
909 (6th Cir. 2003).
Although the manufacturers contend that SawStop failed to
allege anticompetitive harm, SawStop maintains that its alleged
group boycott violates the Sherman Act per se -- such that no
separate allegations of harm were necessary. “[I]n some
circumstances a group boycott may be considered a per se
violation.” Precision Piping & Instruments, Inc. v. E.I. du
Pont de Nemours & Co., 951 F.2d 613, 617 n.4 (4th Cir. 1991).
And the alleged agreement here comes close to the “paradigmatic
boycott,” in which “a group of competitors” (here, the
manufacturers) take “collective action” (here, the refusal to
license or implement) that “may inhibit the competitive vitality
of rivals” (here, SawStop). NYNEX Corp., 525 U.S. at 135; see
41
also Nw. Wholesale Stationers, Inc. v. Pac. Stationery &
Printing Co., 472 U.S. 284, 294 (1985) (explaining that per se
illegal boycotts “often cut off access to a supply, facility, or
market necessary to enable the boycotted firm to compete and
frequently the boycotting firms possessed a dominant position in
the relevant market”).
Despite the facial appeal of SawStop’s per se argument,
neither the manufacturer’s brief nor the district court’s
opinion directly address it. The district court remarked only
in passing that SawStop had “fail[ed] to establish a naked
boycott organized for a concerted refusal to deal.” SD3, LLC,
2014 WL 3500674, at *5. It did not discuss the issue further,
and offered only a cursory citation to Northwest Wholesale. The
manufacturers similarly assert, without explanation, that
SawStop “failed to allege any per se violation of the Sherman
Act.” Response Br. 58.
Because the issue of competitive harm is inadequately
briefed, and because the district court’s opinion likewise gives
us no guidance, we cannot decide that issue or affirm on that
basis. If the manufacturers so choose, however, they may again
raise the issue of competitive harm before the district court on
remand so that it may fully consider and discuss the question
with the benefit of proper argument.
42
E.
In sum, SawStop’s complaint is very different from the one
seen in Twombly, which rested solely on “descriptions of
parallel conduct and not on any independent allegation of actual
agreement.” Twombly, 550 U.S. at 564; see also id. at 548(“[T]he question . . . is whether a § 1 complaint can survive
when it alleges . . . certain parallel conduct . . . , absent
some factual context suggesting agreement[.]” (emphasis added)).
SawStop’s complaint alleges an actual agreement to boycott in
detail and does not rely, as in Twombly, on parallel conduct
alone. The dissent’s observation to the contrary is,
respectfully, simply an inaccurate reading of Twombly. See
Dissenting Op. 75. In particular, the Supreme Court directly
rejected the dissent’s reading of the Twombly complaint:
“Although in form a few stray statements sp[oke] directly of
agreement, on fair reading these [were] merely legal conclusions
resting on the prior allegations.” Twombly, 550 U.S. at 564.
The Supreme Court was explicit in finding that the Twombly
complaint did not contain “any independent allegation of actual
agreement among the ILECs.” Id.As to the district court, it erred by applying a summary-
judgment standard to SawStop’s group boycott claim and by
confusing “plausibility” with “probability.” Again, because the
complaint pleads parallel conduct in conjunction with
43
“circumstance[s] pointing toward a meeting of the minds,”
Twombly, 550 U.S. at 557, SawStop has adequately alleged the
agreement needed to support a Sherman Act § 1 conspiracy. Of
course, it remains to be seen whether SawStop has also
adequately alleged any requisite harm to the market.
Our decision should not be mistaken for an endorsement of
the ultimate merits of SawStop’s case. At this point, SawStop’s
prospects for success are largely irrelevant, as “[a] lawsuit
need not be meritorious to proceed past the motion-to-dismiss
stage.” Ringgold-Lockhart v. Cnty. of Los Angeles, 761 F.3d
1057, 1066 (9th Cir. 2014). In fact, “a well-pleaded complaint
may proceed even if it strikes a savvy judge that actual proof
of those facts is improbable, and that a recovery is very remote
and unlikely.” Twombly, 550 U.S. at 556; accord Cardigan
Mountain Sch. v. N.H. Ins. Co., 787 F.3d 82, 89 (1st Cir. 2015);
N.J. Carpenters Health Fund v. Royal Bank of Scotland Grp., PLC,
709 F.3d 109, 125 (2d Cir. 2013); cf. Iqbal, 556 U.S. at 681(“[W]e do not reject these bald allegations on the ground that
they are unrealistic or nonsensical.”). To dismiss SawStop’s
complaint because of some initial skepticism would be to
mistakenly “collapse discovery, summary judgment[,] and trial
into the pleading stages of a case.” Petro-Hunt, L.L.C. v.
United States, 90 Fed. Cl. 51, 71 (2009).
44
Our decision also is not meant to afford SawStop a license
for unlimited discovery. Like the dissent, we are well aware of
the substantial cost that discovery in an antitrust case can
impose, Twombly, 550 U.S. at 558-59, and recognize that the cost
largely falls on the defendants. When not appropriately
managed, that cost can have an extortionate effect, compelling
some defendants to enter early settlements even in meritless
suits. But we are neither the Advisory Committee on the Rules
of Civil Procedure, nor the Supreme Court, nor Congress. We
must take the rules as we find them.
District courts possess a number of tools -- including
limitations on discovery or consideration of a timely motion for
summary judgment -- to combat any sort of predatory discovery.
See Federal Judicial Center, Manual for Complex Litigation
§ 30.1 (4th ed. 2004) (“Effective management of antitrust
litigation requires identifying, clarifying, and narrowing
pivotal factual and legal issues as soon as practicable[.]”).
Although tools like these do not permit us to give the benefit
of the doubt to groundless claims, Twombly, 550 U.S. at 559,
they confirm that our antitrust jurisprudence cannot be driven
solely by fears about the expense of modern antitrust
litigation. We have faith that district courts possess both the
will and the ability to make good use of available case-
45
management mechanisms, employing them as needed to preserve a
level playing field -- particularly in antitrust cases. 3
VI. Standard-Setting Conspiracies
In addition to its group-boycott claim, SawStop alleges two
separate but related conspiracies concerning private standard-
setting -- the standard-rejection conspiracy and the contrived-
standards conspriacy. Industry particpants allegedly used their
influence over UL to prevent the private organization from
adopting AIMT as a required safety device. The defendants then
purportedly encouraged UL to adopt other standards that imposed
needless costs on SawStop and insulated the defendants from
liability.
We find that the complaint does not plausibly establish
either conspiracy. Although the standard-rejection and
contrived-standards conspiracies are separately alleged, they
fail for the same fundamental reason: the facts alleged imply
nothing beyond ordinary participation in lawful standard-setting
processes. Thus, in contrast to its group-boycott claim,
3 Many of the same allegations that carry SawStop’s
complaint past a motion to dismiss –- the “who, what, when, and
where” –- may substantially focus the discovery in a way that
was not possible in Twombly. See id. at 560 n.6 (noting the
difficulty and expense of discovery directed toward “some
illegal agreement” “between unspecific persons” “at some point
over seven years.”).
46
SawStop’s standards-focused conspiracies fail to allege the
“more” necessary to raise an inference of agreement.
A.
Standard-setting organizations are voluntary membership
organizations whose participants develop “technical
specifications to ensure that products from different
manufacturers are compatible with each other,” address certain
threshold safety concerns, or serve other beneficial functions.
Microsoft Corp. v. Motorola, Inc., 696 F.3d 872, 875 (9th Cir.
2012). These organizations have enjoyed a rather complicated
relationship with antitrust law. “[M]embers of such
associations often have economic incentives to restrain
competition and [] the product standards set by such
associations have a serious potential for anticompetitive harm.”
Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492,
500 (1998); see also Soc’y of Mech. Eng’rs v. Hydrolevel Corp.,
456 U.S. 556, 571 (1982). As a result, “private standard-
setting associations have traditionally been objects of
antitrust scrutiny.” Allied Tube, 486 U.S. at 500.
Still, such ventures can also have “decidedly
procompetitive effects” by encouraging “greater product
interoperability,” generating “network effects,” and building
“incentives to innovate.” Princo Corp. v. Int’l Trade Comm’n,
616 F.3d 1318, 1335 (Fed. Cir. 2010); accord Lotes Co., Ltd. v.
47
Hon Hai Precision Indus. Co., 753 F.3d 395, 400 (2d Cir. 2014);
Broadcom Corp. v. Qualcomm Inc., 501 F.3d 297, 308 (3d Cir.
2007). “As a result, one can hardly infer anticompetitive
intent to exclude from rule making alone[.] . . . Antitrust
must therefore seek out the exceptional case, where rule making
is used to facilitate collusion or the exclusion of rivals whose
competitiveness or innovation threatens the relevant decision
makers.” Areeda & Hovenkamp, supra, § 22.06b.
Courts have found standard-setting organizations and their
members to have violated the antitrust laws in some cases, but
those cases are relatively few and far between. Of most
relevance here, “an entity may be prosecuted for an antitrust
violation on the basis of improper coercion of a standards-
setting body.” Coalition for ICANN Transparency, Inc. v.
VeriSign, Inc., 611 F.3d 495, 506 (9th Cir. 2010). Allied Tube
is the oft-cited example of that concept. In that case, the
defendant deliberately packed a standard-setting panel with paid
supporters who then banned a competing product. Allied Tube,
486 U.S. at 496. Coalition for ICANN Transparency is another
example. There, the Ninth Circuit found potential antitrust
liability when a powerful corporation allegedly used vexatious
litigation and financial pressure to coerce a standards
organization into providing advantages to that defendant.
Coalition for ICANN Transparency, 611 F.3d at 501, 506.
48
The common thread in the few cases finding liability in the
private standard-setting context is unique, external pressure
applied to achieve an anti-competitive end. “[T]he principal
concern has been the use of standards setting as a predatory
device . . . ; normally there is a showing that the standard was
deliberately distorted by competitors of the injured party,
sometimes through lies, bribes, or other improper forms of
influence, in addition to a further showing of market
foreclosure.” DM Research, Inc. v. Coll. of Am. Pathologists,
170 F.3d 53, 57-58 (1st Cir. 1999). In other words, a plaintiff
must ordinarily show that the standard-setting activity had a
market-closing effect that was committed “through the use of
unfair, or improper practices or procedures.” Clamp-All Corp.
v. Cast Iron Soil Pipe Inst., 851 F.2d 478, 488 (1st Cir. 1998)
(Breyer, J.).
In the usual case, neither the standard-setting
organization nor its participants will run afoul of antitrust
law when they use ordinary processes to adopt unexceptional
standards. It is “axiomatic that a standard setting
organization must exclude some products, and such exclusions are
not themselves antitrust violations.” Golden Bridge Tech., Inc.
v. Motorola, Inc., 547 F.3d 266, 273 (5th Cir. 2008); see also
Gtr. Rockford Energy & Tech. Corp., 998 F.2d at 396 (“The
failure of a private, standard-setting body to certify a product
49
is not, by itself, a violation of § 1.”); Plant Oil Powered
Diesel Fuel Sys., Inc. v. ExxonMobil Corp., 801 F. Supp. 2d
1163, 1193 (D.N.M. 2011) (holding that the plaintiff did not
plausibly allege an antitrust conspiracy based on the
defendant’s mere opposition to a particular standard). “To hold
otherwise would stifle the beneficial functions of such
organizations[.]” Golden Bridge Tech., 547 F.3d at 273.
Similarly, it is not problematic, standing alone, for market
participants to try to influence the standard-setting process
through the organization’s ordinary procedures. See Clamp-All
Corp., 851 F.2d at 488.
B.
SawStop never alleges that UL’s normal procedures were
thwarted, or that the defendants engaged in some form of
external misconduct. Instead, it asks us to infer malfeasance
because some of the defendants’ representative served on the
relevant standard-setting panel. But SawStop provides no
authority drawing that sort of naked inference, and we have
found none. “Certifiers may reasonably believe that they can do
their job properly (a job that benefits consumers) only if all
interested parties are allowed to present proposals, frankly
present their views, and vote.” Id.
SawStop’s complaint takes issue with UL’s actions largely
because the organization is alleged to have erred in rejecting
50
SawStop’s proposed standard and selecting another one. The
unstated assumption of this argument is that, lacking a valid
“technical” justification, the only remaining explanation must
be an antirust conspiracy.
Even if UL’s ultimate decision can be called “wrong,” that
mistake alone does not indicate concerted action to manipulate
the result. “[S]tandard-setting bodies sometimes err,” but
simple error creates no reason for liability without some
further indication that the organization’s activities are
“merely a ploy to obscure a conspiracy against competing
producers.” Consol. Metal Prods., Inc. v. Am. Petroleum Inst.,
846 F.2d 284, 294 (5th Cir. 1988); see also DM Research, 170
F.3d at 57 (“Merely to say that the standards are disputable or
have some market effects has not generally been enough to
condemn them as ‘unreasonable’ under the Sherman Act.”); Moore
v. Boating Indus. Ass’ns, 819 F.2d 693, 711-13 (7th Cir. 1987)
(finding no evidence of an actionable conspiracy despite the
jury’s finding that the association was “unreasonable and
arbitrary” in setting standards); cf. Brookins v. Int’l Motor
Contest Ass’n, 219 F.3d 849, 854 (8th Cir. 2000) (“So long as
IMCA made game-defining rules decisions based upon its purposes
as a sports organization, an antitrust court need not be
concerned with the rationality or fairness of those
decisions.”); M & H Tire Co. v. Hoosier Racing Tire Corp., 733
51
F.2d 973, 984 (1st Cir. 1984) (“We discern no duty to provide an
absolutely objective or scientific basis for decision.”).
“[A]ntitrust is not concerned with whether a standard might be
unreasonable as an abstract proposition.” Areeda & Hovenkamp,
supra, § 22.06c.
If antitrust suits were permitted to go forward based
solely on an allegation that the standard-setting body erred,
courts would be cast into the role of standard-setting appellate
bodies. Consol. Metal Prods., 846 F.2d at 297. Any
disagreement big or small with the ultimate adoption of a safety
standard would, to follow SawStop’s reasoning, create potential
antitrust liability. “Not only would this tax the abilities of
the federal courts, but fear of treble damages and judicial
second-guessing would discourage the establishment of useful
industry standards.” Id.Beyond its error-based allegations, the complaint’s only
assertions of concerted action are conclusory and non-specific:
“a collective decision was made,” or the defendants “agreed to
vote as a bloc,” or non-SawStop designs were a “smokescreen.”
J.A. 96-97 ¶¶ 103, 105, 109. The complaint identifies no fact
other than consistent votes against SawStop’s proposal (and for
the other designs) to establish the alleged illegal agreements.
That would be parallel conduct, but such conduct is equally
consistent with legal behavior. After all, even if SawStop is
52
right that technical reasons did not support the standard-
setting organizations decisions, other non-anticompetitive
explanations remain. See, e.g., Golden Bridge Tech., 547 F.3d
at 272-73 (“[T]he existence of an independent financial motive
to [change the standard] might be an independent reason for each
Appellee company to support [the change].”); Advanced Tech.
Corp., Inc. v. Instron, Inc., 925 F. Supp. 2d 170, 179 (D. Mass.
2013) (dismissing a complaint where “[t]he crux of [the
plaintiff’s] antitrust claim [wa]s simply that competitors in a
market declined to support a standard that would promote another
competitor’s technology”).
Lastly, we note that SawStop does not allege the sort of
anticompetitive objectives that are ordinarily seen in standard-
setting cases. Usually, standard-setting cases are brought when
products are effectively excluded from the market by adopted
safety standards. Here, SawStop largely complains that it could
not use the standard-setting process to impose its own product
on everyone else. The anticompetitive harms of a “refusal to
impose” are much harder to identify. Nothing that UL or the
standards-setting groups did barred SawStop’s AIMT-equipped saws
from the market, as SawStop’s entry into the competitive table-
saw market establishes. From all appearances, SawStop remains
free to offer its saws with the UL seal of approval, along with
its perceived market advantage of also offering AIMT on those
53
saws. And if UL’s newer standards generate some additional
costs, those costs are common to each member of the industry who
chooses to make a UL-compliant table saw. We see nothing
anticompetitive or exclusionary in that.
The district court thus did not err in granting the
defendants’ motions to dismiss on the standard-setting claims.
VII.
For the reasons described above, the district court
correctly dismissed the standard-setting claims as to all the
defendants. The district court also correctly dismissed the
group-boycott claims against Hitachi Koki Co., Ltd.; Makita
Corporation; Chang Type Industrial Co., Ltd.; OWT Industries,
Inc.; Pentair Water Group, Inc.; Stanley Black & Decker, Inc.;
Delta Power Equipment, Inc.; and Techtronic Industries North
America, Inc. However, the district court erred in dismissing
the group-boycott claims against the remaining defendants.
Therefore, the district court’s decision dismissing
SawStop’s complaint is
AFFIRMED IN PART, VACATED IN PART,
AND REMANDED FOR PROCEEDINGS
CONSISTENT WITH THIS OPINION.
54
WYNN, Circuit Judge, concurring:
“Judges ought to remember that their office is jus dicere,
and not jus dare—to interpret law, and not to make law, or give
law.” Francis Bacon, “Essay LVI: Of Judicature,” Essays (1625),
reported in Richard Whately, Bacon’s Essays With Annotations 511
(1857). Here, the judiciously well-reasoned majority opinion
resists the temptation to move beyond our limited role and into
the colorful realm of policy. Respectfully, the dissenting
opinion strays beyond our limited review here and encroaches on
policy issues best left to other branches of government.
I.
First, rather than confront the issues actually in play,
the dissenting opinion dresses up points of agreement as dire
rifts. The dissent asserts, for example, that plaintiffs “seek
to achieve through litigation a monopoly for their product” and
claims that the majority opinion “turns a blind eye” to
“anticompetitive impulse[s]” driving SawStop’s claims. Post at
70, 96. The dissenting opinion claims that the majority opinion
“ignores all [the benefits of ventures such as standards setters
and trade groups] in its rush to flatten pleading standards,
make communications perilous, and consign antitrust law to
isolationist ends.” Id. at 97. Thus, the dissent takes the
policy view that today’s opinion will doom “American companies”
to “competitive disadvantage at the very time global commercial
55
interactions are becoming more commonplace.” Id. Nonsense
(beyond the obvious problem that a competitive disadvantage is
meaningful only in the context of a comparison with America’s
global competitors, many of whom also have antitrust laws).
The majority opinion fully accords with the view that
“[j]oint ventures, standard-setting organizations, and trade
association meetings may allow individuals of different
specialties to benefit from each other’s expertise. These fora
may prove invaluable for efficient and effective product
development.” Post at 96. As the majority opinion plainly
states, “such ventures” can have “decidedly procompetitive
effects by encouraging greater product interoperability,
generating network effects, and building incentives to
innovate.” Ante at 47 (quotation marks and citations omitted).
The majority opinion in no uncertain terms affirms the district
court’s dismissal of SawStop’s standards-setting-related claims—
a crucial fact relegated to a dissenting footnote.
Second, rather than address SawStop’s complaint as it is
written, the dissenting opinion employs verbiage like
“commercial interactions” to revise the complaint so as to omit
the allegations of a secret agreement to refuse to deal. Again
sounding in policy, the dissenting opinion asserts that the
majority “drape[s] innocent commercial activity in sinister
garb” because the complaint “hardly bespeaks a collective
56
agreement not to deal.” Post at 67, 73. Thus, the dissenting
opinion editorializes that due to the majority opinion, “HOLDING
OR ATTENDING [A] TRADE ASSOCIATION MEETING WILL INCREASE YOUR
EXPOSURE TO ANTITRUST SUITS.” Id. at 68 (emphasis added).
Yet, when read with a judicious eye, SawStop’s complaint
clearly alleges that Defendants entered into a secret agreement
to refuse to deal at a trade association meeting—not just that
Defendants “held” or “attended” such meetings. Indeed, the
complaint plainly bespeaks a collective agreement not to deal.
Specifically, the complaint alleges, among other things:
• “In conjunction with the [Power Tool Institute] annual
meeting, a separate meeting of representatives of
table saw manufacturers was held. Attendees at the
meeting included, but were not necessarily limited to,
Domeny (on behalf of SBTC and Bosch), Peot (on behalf
of Ryobi, TIC and affiliates), Stanley Rodrigues (for
Makita), Ray Mayginnes (for Emerson), David V. Keller
(of Porter-Cable, who also spoke for Pentair and
DICM), Steven Karaga (for Hitachi), and
representatives of B&D and Milwaukee Electric. Mr.
Domeny, at the time, was the Chair of the [Power Tool
Institute]’s Product Liability Committee, and chaired
the meeting.” J.A. 89 ¶ 79 (emphasis added).
• “At the meeting, Mr. Domeny and the other participants
expressed concerns that if one manufacturer adopted
SawStop Technology, then all manufacturers would be
subject to greater liability in future product
liability cases. Mr. Peot shared this concern.
[Power Tool Institute]’s table saw manufacturers
determined at that meeting that they would decide how
to respond, as an industry, to the SawStop Technology.
A consensus was reached that (1) all should take a
SawStop license and/or implement AIMT, or (2) none
take it or otherwise implement AIMT; since if one or
more took a license and/or offered a product with
AIMT, the others would be more vulnerable to product
57
liability. It was also agreed that collective action
would proceed only if all, or at least a substantial
majority, of participants voted to participate.
Members also discussed developing something like
SawStop Technology, without having to pay a royalty to
Dr. Gass. The consensus reached by the attendees,
with no contrary views articulated, was that industry
members would collectively agree not to purchase
technology licenses from Plaintiffs or otherwise
implement AIMT.” J.A. 89-90 ¶ 80 (emphasis added and
citations omitted).
• “The consensus reached at the meeting was based on a
calculated economic determination that the
manufacturers would, collectively, fare better by
collectively agreeing to marginalize SawStop and AIMT,
than by allowing the marketplace to determine whether
any manufacturers did business with SawStop or
otherwise implemented AIMT. The Defendants believed
that bringing AIMT into the mass market would have
catastrophic product liability consequences for them.
Purchasers of their existing and prior inventories of
table saws (and, perhaps, other products) would point
to the viability of AIMT as evidence that other
products were inherently unsafe because they lacked
AIMT. Defendants believed that, in the short term, if
SawStop was unable to obtain a major manufacturing
partner, it would not be able to produce or market a
meaningful quantity of saws with its AIMT – this way,
the major manufacturers could continue to earn current
profit margins on their existing inferior product
lines without paying royalties to Plaintiffs, and it
would remain (for the time being) at least plausible
for the major manufacturers to contend, in defending
product liability lawsuits, that AIMT was not viable.
Thus, Defendants’ business calculation was that they,
collectively, would fare better by marginalizing
SawStop and AIMT, than by working with SawStop and/or
otherwise adopting AIMT.” J.A. 90 ¶ 81.
• “It was agreed at the meeting and thereafter that all
discussions concerning a collaborative response to
SawStop would be confidential and concealed from
persons other than [Power Tool Institute] members who
manufactured table saws. It was further agreed that,
going forward, information relevant to SawStop and
table saw product liability defense issues would only
58
be shared among those industry participants who
affirmatively agreed to act collectively in response
to SawStop.” J.A. 90 ¶ 82 (emphasis added).
• “At, or within a period of months following the
October 2001 meeting, each of Defendants Bosch, Ryobi,
Makita, Hitachi, Pentair, Emerson and Milwaukee
Electric, and entities affiliated with them, had
agreed to enter into a boycott (the ‘AIMT Boycott’) of
SawStop’s intellectual property, by collectively (1)
refusing to license SawStop technology, and (2)
agreeing not to otherwise implement AIMT.” J.A. 90-91
¶ 83 (emphasis added).
• “During this time frame, in which [Power Tool
Institute]’s table saw manufacturers voted to respond
collectively to SawStop Technology, those Defendants
not yet in license negotiations with SawStop refrained
from requesting a license, and the Defendants who were
already in negotiations found ways to abort them as
opportunities arose.” J.A. 91 ¶ 85 (emphasis added).
In other words, SawStop’s complaint alleges a specific meeting
in which Defendants agreed to refuse to deal with SawStop and to
keep that pact a secret. Around the same time, Defendants
refrained from seeking SawStop’s technology or, if in licensing
negotiations with SawStop, found ways to abort them. The
dissenting opinion’s dismissive characterization of these
detailed allegations as mere “conclusory assertions,” post at
71, thus plainly misses the mark.
On the contrary, SawStop’s allegations squarely conform to
what we require Sherman Act § 1 plaintiffs to plead. “To
establish a § 1 antitrust violation, a plaintiff must prove, and
therefore plead, (1) a contract, combination, or conspiracy; (2)
that imposed an unreasonable restraint of trade.” Robertson v.
59
Sea Pines Real Estate Companies, Inc., 679 F.3d 278, 284 (4th
Cir. 2012) (Wilkinson, J.) (quotation marks and citation
omitted). Further, “Iqbal and Twombly do not require a
plaintiff to prove his case in the complaint.” Id. at 291.
Instead, the complaint “need only allege facts sufficient to
state elements of the claim.” Id. (quotation marks and
citations omitted). And at the Rule 12(b)(6) stage, which is
where we are, the complaint is to be “construed liberally so as
to do substantial justice.” Pub. Employees’ Ret. Ass’n of Colo.
v. Deloitte & Touche LLP, 551 F.3d 305, 311 (4th Cir. 2009)
(Wilkinson, J.) (quotation marks and citation omitted).
In its revisionist account of SawStop’s allegations, the
dissenting opinion essentially turns the Rule 12(b)(6) standard
on its head. “A motion to dismiss under Rule 12(b)(6) tests the
sufficiency of a complaint; importantly, it does not resolve
contests surrounding the facts, the merits of a claim, or the
applicability of defenses.” Republican Party of N.C. v. Martin,
980 F.2d 943, 952 (4th Cir. 1992). Instead, “a well-pleaded
complaint may proceed even if it strikes a savvy judge that
actual proof of the facts alleged is improbable and that a
recovery is very remote and unlikely.” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 556 (2007) (quotation marks and citation
omitted).
60
Despite our crystal-clear mandate in reviewing this Rule
12(b)(6) dismissal, the dissenting opinion nevertheless attacks
the complaint in a light least favorable to SawStop, viewing the
facts and reasonable inferences in the light most favorable to
Defendants. For example, the dissenting opinion opines that
“[i]gnoring the many practical reasons for declining [SawStop]’s
offers, the majority hones in on the fear of product liability
as the key motivation behind defendants’ alleged boycott.” Post
at 91. Yet, the majority opinion rightly focuses on the
products liability reasoning—because SawStop specifically
alleges it. See, e.g., J.A. 89-91. We are thus not at liberty
to swap that pled reasoning out for other “practical reasons” we
might make up out of whole cloth. A further example: The
dissenting opinion asserts that “it was consistent with each
manufacturer’s best interest to reject an expensive, unproven,
undeveloped, and possibly unsafe technology. Each defendant
could easily have arrived at this business decision on its own.”
Post at 90. But SawStop alleges that they didn’t arrive at that
decision independently. Instead, the complaint specifically
alleges that Defendants expressly agreed to refuse to deal and
to keep that agreement secret. See, e.g., J.A. 89-91. Ignoring
such specific allegations to SawStop’s detriment is nothing shy
of an all-out perversion of the generous lens through which we
61
must view the complaint. Pub. Employees’ Ret. Ass’n of Colo.,
551 F.3d at 311.
Finally, the dissenting opinion focuses on its own policy
preferences, thereby abandoning this Court’s limited role—which
is simply to assess whether SawStop plausibly alleges the
elements of its Section 1 claim. Because the majority opinion
sticks to its limited role, it steers clear of considering
things like different “approach[es]” in a “globalized
marketplace,” whether the word “‘conspiracy’ is bound to stoke
paranoia,” or the appropriate amount of “lag time” in “product
development.” Post at 66, 79, 91.
The dissenting opinion sees itself in no way so bound and
thus insists, for example, that “[h]ere, plaintiffs are the ones
acting anti-competitively.” Post at 70. It is simply not our
job in reviewing a Rule 12(b)(6) motion to assess which party’s
conduct we deem more pro-competitive. In refusing to stick to
our limited role, the dissenting opinion engages in breathtaking
judicial activism.
“As the Supreme Court has repeatedly emphasized, . . .
Congress is the policymaker—not the courts.” In re Sunterra
Corp., 361 F.3d 257, 269 (4th Cir. 2004). See also, e.g.,
Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A., 530
U.S. 1, 13-14 (2000) (“Achieving a better policy outcome . . .
is a task for Congress, not the courts.”). It is thus
62
inappropriate to suggest, for example, that, as a matter of law,
a boycott conspiracy may not be motivated by liability concerns.
Congress can pencil such categorical limitations into the
Sherman Act; we cannot.
The dissenting opinion embarks on yet another odyssey into
policy, as well as assumptions untethered to reality, much less
the complaint at issue here, when it asserts that “[t]hese days
secrets are harder to keep. A secret is something that is held
by only one. Or maybe two. But twenty-two? Managers everywhere
must be relieved to learn from my concurring colleague that you
can let twenty-two people in on a secret and have nothing leak
out.” Post at 87. Yet in reviewing a complaint for Rule
12(b)(6) purposes, we may not peer into a crystal ball and
decide how many people we personally believe can keep a secret
and kick complaints out of court on such a basis.
Moreover, to the extent the dissenting opinion suggests
that a large, multi-firm conspiracy by definition cannot exist,
it is simply uninformed. Large antitrust conspiracies have not
only existed but have been caught—a perfect example being the
famous international vitamin scandal of the 1990s—which involved
21 firms engaged in a conspiracy that lasted over a decade:
From 1988 to 1992 21 chemical manufacturers
headquartered in seven nations joined . . . vitamins
cartels . . . . Sales by these cartels exceeded $30
billion . . . . The pharmaceutical manufacturers
involved became virtually addicted to the infusion of
63
monopoly profits, giddy financial results that
prompted the conspirators to continue their
clandestine activities for up to 15 years. These
illegal activities persisted in the face of [among
other things] several public prosecutions of parallel
conspiracies [and] multiple antitrust investigations .
. . . The conspirators simply burrowed deeper and
developed more elaborate methods of subterfuge.
John M. Connor, The Great Global Vitamins Cartels 8, available
at http://ssrn.com/abstract=885968.
In other words, large, multi-player conspiracies involving
elaborate ruses can indeed exist as a matter of law and fact.
And here, SawStop alleges that one did, and that it undertook a
group boycott to freeze SawStop technology out of the
marketplace. In refusing to accept those allegations, as we
must at this stage, the dissenting opinion plainly oversteps its
bounds.
II.
In sum, courts exist to resolve disputes, not to pervert
procedural rules into swords with which to fight policy battles.
And today, we do not confront whether SawStop should ultimately
succeed on its boycott claim. Instead, we confront only
whether, when viewing SawStop’s complaint with an unjaundiced
eye and using the proper standard, we can say that it has made
allegations sufficient to withstand a motion to dismiss for
failure to state such a claim. It has. Accordingly, with all
64
due respect for the dissenting view, I join in the judicious and
well-reasoned majority opinion.
65
WILKINSON, Circuit Judge, concurring in part and dissenting in
part:
The majority’s view of modern commerce is unfortunate. It
takes an isolationist approach in which each business must all
but lock itself in semi-solitary or risk the taint of antitrust
claims. Whatever validity the isolationist approach may once
have had, it is profoundly injurious in an increasingly
interconnected, necessarily collaborative, and globalized
marketplace. The majority rightly observes that agreement is the
crux of an antitrust claim, but it has made mere communication
the touchstone of liability. Ante at 29.
The majority rejects this as a statement of policy, ante at
45, 56, but it is hardly that. It is rather a statement of
consequences that flow from the majority’s refusal to follow the
Supreme Court’s decision in Bell Atlantic Corp. v. Twombly, 550
U.S. 544 (2007), which established pleading requirements for a
Sherman Act Section 1 complaint. The Supreme Court lacks the
institutional resources to ensure full compliance with its
decisions. Among other things, it has room on its docket for a
limited number of cases, and the Twombly decisions from the
lower courts may be routinely pitched as pertaining to no more
than the particulars of an individual complaint.
It just may be, however, that the institutional limitations
at the Court impart institutional obligations on the courts of
66
appeals to respect in fullest measure the highest Court’s
approach. In this obligation, I believe the majority has
defaulted. I shall show throughout how it has failed to follow
Twombly at every turn. I would suggest, most respectfully, that
the majority has committed basic conceptual errors and that the
consequences of those errors, which the majority prefers not to
face and to dismiss as policy, are regrettable. Most
regrettable, however, is the treatment of a Supreme Court
decision, even a controversial one, at the hands of this court.
Among Twombly’s insights was that markets, every bit as
much as conspiracies, play a significant role in governing
commercial conduct. See 550 U.S. at 557. Twombly counsels that
we not leap to pejorative explanations when legitimate business
considerations are more likely at play. Id. at 554. The fact
that Sherman Act conspiracies in restraint of trade do assuredly
continue to exist does not mean that we should rush too quickly
to drape innocent commercial activity in sinister garb.
The majority, however, adopts the reverse sequence. It
fashions a template for the frustrated market participant:
Whenever routine business decisions don’t go your way, for
whatever reason, simply claim an industry conspiracy under the
Sherman Act and the courts will infer malfeasance. But such
casual presumptions of antitrust infractions can only chill
communications among companies, which in turn may hinder product
67
development, innovative joint ventures, and useful trade
association conclaves. WARNING: HOLDING OR ATTENDING THIS TRADE
ASSOCIATION MEETING WILL INCREASE YOUR EXPOSURE TO ANTITRUST
SUITS.
The chilling effect is most acute when the majority
considers independent market-driven behavior to be parallel
conduct warranting antitrust scrutiny. Parallel industry conduct
is, of course, the lynchpin of many a Sherman Act Section 1
claim. The majority’s cardinal conceptual error lies in the
adoption of an ends-based approach to parallel conduct in a
circumstantial antitrust case. See infra Part II.A. The end of
course is the fact that a plaintiff’s product was not adopted.
But the products most likely to meet the end of rejection are
those of the least utility or those that would cause the most
expense. The majority thus uses its ends-based analysis to
reward the least marketable products with the greatest
possibility of litigation success. WARNING: FAILURE TO ADOPT
THIS PRODUCT FOR WHATEVER REASON WILL INCREASE YOUR EXPOSURE TO
ANTITRUST SUITS.
This treatment of ends and means in antitrust litigation
undermines the Twombly decision. An analysis of means rather
than ends is the most sensitive tool we possess to measure the
plausibility of a complaint. See Twombly, 550 U.S. 544. And
here, the means by which the so-called conspiracy was carried
68
out paint a clear picture of non-parallel conduct. The complaint
is the best evidence of that. After SD3 introduced its product,
certain defendants entered into licensing negotiations that
continued well after the alleged group boycott agreement. Some
of them offered to license the technology, again after the
supposed agreement, and were rebuffed by SD3. Other negotiations
yielded no offers, with one defendant leaving the table saw
industry altogether. The vast majority of named defendants are
not even mentioned in SD3’s account of the supposedly “parallel”
behavior. Their negotiation posture, which would seem well
within plaintiffs’ knowledge, is nowhere set forth or detailed.
While the majority highlights cases in which plaintiffs
successfully alleged parallel conduct, none of them features
disparate actions such as these. If defendants’ behavior
qualifies as parallel conduct, then plainly divergent actions
among competitors in any field will now give rise to antitrust
claims. This is but part and parcel of the majority’s attempt to
impose a presumption of guilt on antitrust defendants who now
must bear the burden of proving a negative when the burden
properly lies with the party bringing the claim.
It is no accident that Twombly itself was an antitrust
decision. For what we confront in antitrust law is a perfect
storm of treble damages, large discovery costs, and relaxed
pleading standards. It is the three factors in combination that
69
pose a threat to legitimate marketplace behavior. The Supreme
Court in Twombly sought to calm the waters by addressing the
latter two. The majority, however, adds to the turbulence by
sanctioning complaints that would in all likelihood have failed
even under pre-Twombly standards. Here, plaintiffs are the ones
acting anti-competitively. They seek to achieve through
litigation a monopoly for their product that neither the table
saw market nor contractual negotiations would yield. The result,
as noted, is that marketplace failures will increasingly lead to
litigation success. And that is only the beginning of the
difficulty.
The majority appears to believe that the full course of
discovery is the proper mechanism for winnowing out meritless
claims. In many fields, that observation would be correct. The
bone of contention in federal civil litigation is most
frequently over summary judgment versus trial. In antitrust law,
however, the flashpoint is often over motions to dismiss versus
summary judgment. For the Supreme Court has clearly recognized
that in the area of antitrust it is the threat of steep
litigation costs that produces deleterious consequences in and
of itself, no matter who the victor in the antitrust marathon
may ultimately prove to be.
As Twombly emphasized, discovery costs have escalated
dramatically since the adoption of the Federal Rules. Twombly,
70
550 U.S. at 558-60; see Brian T. Fitzpatrick, Twombly and Iqbal
Reconsidered, 87 Notre Dame L. Rev. 1621, 1638 (2012).
Multiplying electronic and paper records, combined with
increased regulatory obligations, have caused discovery costs to
mount even further since the issuance of Twombly itself. Before
we impose these climbing costs on companies, there must exist
confidence that the claims leveled against them allege actual
facts that make conspiracy and other illicit intentions
plausible. SD3 fails to clear this bar, but still the majority
just piles it on.
I.
A.
The majority’s approach to Twombly tells an old
intermediate appellate story. The majority alights on a minor
motif of that Supreme Court decision, while leaving its main
point wholly unobserved. The Court made clear in Twombly, and
reiterated in Iqbal, that a plaintiff must allege enough factual
content in the complaint to render his legal claim for relief
“plausible on its face” in order to survive a motion to dismiss
under Rule 12(b)(6). Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(citing Twombly, 550 U.S. at 570). Plausibility requires “more
than a sheer possibility that a defendant acted unlawfully.” Id.(citation omitted). SD3’s complaint cannot clear this hurdle.
Its conclusory assertions that defendants agreed to an industry-
71
wide “boycott” of its product are fully consistent with, and
most plausibly reflect, independent and legitimate business
decisions. Put simply, the majority proceeds as if Twombly were
at most persuasive authority, and not very persuasive authority
at that.
Twombly is particularly important here, for the Supreme
Court in that case addressed the meaning of plausibility in the
context of a conspiracy allegation based on descriptions of
parallel conduct. The Court instructed that “when allegations of
parallel conduct are set out in order to make a § 1 claim, they
must be placed in a context that raises a suggestion of a
preceding agreement, not merely parallel conduct that could just
as well be independent action.” Twombly, 550 U.S. at 557. “Even
‘conscious parallelism,’ a common reaction of ‘firms in a
concentrated market that recognize their shared economic
interests and their interdependence with respect to price and
output decisions’ is ‘not in itself unlawful.’” Id. at 553-54(citations omitted). Nor should a court infer “that the
companies had agreed among themselves to do what was only
natural anyway.” Id. at 566. Thus, a plaintiff fails to
adequately plead his claim that a defendant unlawfully conspired
under Section 1 if there exists an “obvious alternative
explanation” for the defendant’s conduct that renders the
72
prohibited explanation implausible. Iqbal, 556 U.S. at 682(citation omitted); Twombly, 550 U.S. at 567.
This could not be more clear. In light of Twombly’s
directives, SD3’s allegations fall well short of the
plausibility requirement. The complaint hardly bespeaks a
collective agreement not to deal. Instead, it most plausibly
reflects typical market forces at work and rational business
choices being made -- the kind of things that happen every day.
Why did the manufacturers not adopt SD3’s product? Perhaps they
realized the technology was too nascent to license, in short
unproven. Perhaps it would not have been cost effective for the
manufacturers to incorporate it. Or perhaps SD3’s incipient
product actually increased the risk of injury to consumers.
These varied market explanations may well have been different
for different companies. They reflect business decisions of the
most common and ordinary character. They are “obvious
alternative explanations” and have not been sufficiently
rebutted by any valid assertions of a preceding agreement to
collude. All the behavior described by SD3 “was not only
compatible with, but indeed was more likely explained by,
lawful, unchoreographed free-market behavior.” Iqbal, 556 U.S.
at 680 (quoting Twombly, 550 U.S. at 567).
In the majority’s eyes, however, the above discussion is
all wasted effort, merely “practical reasons” and “factual
73
suppositions” that must not be considered. Ante at 35, 61.
Instead, we should take plaintiffs’ allegations at face value
and call it a day. It is certainly true that we assume the truth
of factual allegations at the motion-to-dismiss stage. Twombly,
550 U.S. at 572 (citations omitted). Even after accepting
plaintiffs’ claims as true, however, the court must further
analyze whether those allegations are “plausible” under Twombly.
Id. at 556. The majority refuses to undertake this second, more
analytic step. My concurring colleague simply wishes it away.
There is a time warp here, a nostalgia for the old pleading ways
and days. Those earlier standards were easier on us, I admit.
But our nostalgia now flies in the face of a controlling Supreme
Court decision.
SD3’s boycott claim is not “plausible” for the same reasons
Twombly’s was not plausible. SD3’s boycott claim is hardly
distinguishable from the very allegations that the Supreme Court
rejected in Twombly. According to the complaint in that case,
defendants -- who, like the defendants here, owned a significant
share of the market -- agreed to “engage in parallel conduct”
and “prevent competitive entry.” Twombly, 550 U.S. at 550-51,
550 n.1. The complaint charged that the defendants’ “‘compelling
common motivation’ to thwart plaintiffs’ competitive efforts
naturally led them to form a conspiracy.” Id. at 551. If these
allegations sound familiar, it is because they almost perfectly
74
parrot the claims made by SD3 in its complaint. SD3 argued that
the defendants -- at least the few named defendants it actually
bothered to discuss -- “agreed among themselves to collectively
refuse” SD3’s licensing offers “based on a calculated economic
determination” that they would fare better in the marketplace if
SD3 were excluded. J.A. 71, 90. If Twombly’s complaint could not
pass as well-pleaded, then SD3’s should not fare any better.
The majority claims that the complaint in Twombly “rested
solely on descriptions of parallel conduct, and not on any
independent allegation of actual agreement.” Ante at 43
(citation and internal quotation marks omitted). This is simply
incorrect. The majority overlooks the actual language in the
Twombly complaint: “Defendants had compelling common motivations
to include in their unlawful horizontal agreement an agreement
that each of them would engage in a course of concerted conduct
calculated to prevent effective competition from [plaintiffs] .
. . .” Amended Complaint at ¶ 50, Twombly v. Bell Atl. Corp.,
313 F. Supp. 2d 174 (S.D.N.Y. 2003); see also id. at ¶ 51
(noting that defendants “have agreed not to compete with one
another”). To be sure, after Twombly complaints have sought
length in the hope that courts would mistake such length for
substance. But the substance here is thin gruel. The complaint’s
allegation of an agreement is weaker than in Twombly, boiling
down to a contention that the defendants met at a trade
75
association meeting followed by the inconvenient fact for the
majority that non-parallel conduct ensued.
In fact, the Twombly complaint was much stronger than the
one in this case and it went much further. That complaint relied
on evidence that defendants refused to provide plaintiffs with
network connections and services of equal quality, that they
billed plaintiffs’ customers in a manner to ruin plaintiffs’
customer relations, that they refused plaintiffs access to
certain facilities and delayed the provision of network elements
after plaintiffs had invested tens of billions of dollars.
Twombly, 313 F. Supp. at 177-78. Despite this support for
plaintiffs’ conspiracy allegations, the Court maintained that
each defendant “had reason to want to avoid dealing with
plaintiffs,” and each defendant “would attempt to keep
plaintiffs out, regardless of the actions of the other”
defendants. Twombly, 550 U.S. at 566. Defendants’ actions in
Twombly, like defendants’ actions in this case, were “just as
much in line with a wide swath of rational and competitive
business strategy unilaterally prompted by common perceptions of
the market.” Id. at 554 (citation omitted). Consequently,
plaintiffs’ conspiracy claims in both cases “stop short of the
line between possibility and plausibility.” Id. at 557 (citation
omitted). If only the plaintiffs in Twombly could have called
upon this court to refashion their complaint.
76
B.
But, insists the majority, “[t]o dismiss SawStop’s
complaint because of some initial skepticism would be to
mistakenly ‘collapse discovery, summary judgment[,] and trial
into the pleading stages of a case.’ . . . District courts
possess a number of tools . . . to combat any sort of predatory
discovery.” Ante at 45-46 (citation omitted). That approach is
astonishing, for it is precisely what Twombly warned against:
“It is no answer to say that a claim just shy of a plausible
entitlement to relief can, if groundless, be weeded out early in
the discovery process . . . given the common lament that the
success of judicial supervision in checking discovery abuse has
been on the modest side.” Twombly, 550 U.S. at 559 (citation
omitted).
The majority’s assurance that of course district courts can
control discovery is the sort of appellate wand-waving that
ignores every reality on the ground. Trial judges are busy; they
must set priorities. Many understandably feel that time is
better spent in trial or in dealing with dispositive motions to
dismiss or for summary judgment than in wading into the big
muddy of discovery disputes. There is the temptation, and it is
again an understandable one, to say to the parties, “Folks, go
work this out among yourselves.” The problem has become even
more acute with the advent of e-discovery. Modern electronic
77
devices generate and record a great variety and volume of
information. It is now easier and faster to store evidence,
which in turn has spawned greater opportunities for discovery
requests and conflict. Regulatory mandates from governments at
every level add to the store of both paper and electronic files.
All of this makes companies more and more vulnerable to open-
ended discovery requests. The majority pays no more than lip
service to what has become a serious problem. Its casualness
stands in contrast to the gravity of the Twombly Court’s
concern.
To overlook this concern is to resurrect the dangers that
Twombly sought to lay to rest. Conley v. Gibson was doubtless
correct when decided. See 355 U.S. 41 (1957), abrogated by
Twombly, 550 U.S. 544. It made sense to skip through the
pleadings on the theory that discovery would somehow sort it all
out. See id. at 47-48. But times have changed. Although the
majority pooh-poohs “the expense of modern antitrust
litigation,” ante at 46, it is altogether legitimate for the
Supreme Court to take cognizance of the shifting interplay
between causes of action (here Sherman Act Section 1 claims) and
the Federal Rules (here those of pleading and discovery). Thus,
the Court in Twombly sought to shield defendants from what it
later described as the “heavy costs of litigation in terms of
efficiency and expenditure of valuable time and resources” by
78
allocating the plausibility burden to those who allege unlawful
conduct. Iqbal, 556 U.S. at 685.
The Court understood what the majority does not: that an
antitrust complaint is often too tempting to pass up. It
provides a tantalizing weapon for parties whose business
endeavors are going badly. The term “conspiracy” is bound to
stoke paranoia, and to kindle an effort to pin on others the
blame for business failures of one’s own. The treble damages
awards of antitrust actions are a further temptation for
floundering companies armed with the knowledge that defendants
would rather settle than face the prospect of such damages,
especially with the attendant high litigation costs. See
Twombly, 550 U.S. at 558-59. Twombly sought to reduce these
dangers in language of no moment to the majority: “It is only by
taking care to require allegations that reach the level
suggesting conspiracy that we can hope to avoid the potentially
enormous expense of discovery . . . .” Id. at 559. So much for
that hope: the majority just loads it on.
II.
A.
With its inverted version of Twombly, the majority allows
plaintiffs to contort normal marketplace behavior into a
potential antitrust violation. Even by the majority’s diluted
pleading standard, however, SD3’s group boycott claim fails as
79
its complaint plainly alleges non-parallel conduct. The majority
bases its contrary conclusion on an expansive definition of
parallel conduct focused solely on a perceived uniformity of
ends without regard to dissimilarity of means. The majority
observes: “The similar or uniform actions alleged are obvious:
none of the defendants ultimately took a license or otherwise
implemented SawStop’s technology.” Ante at 26-27. The
defendants’ vastly “different courses of action” are seen as
part of some grand scheme to conceal the underlying conspiracy.
Ante at 28. By that logic, the majority would find parallel
conduct as long as defendants all allegedly reached the same end
-- not adopting a product -- regardless of how the dealings
between plaintiffs and defendants proceeded or fell apart.
Such an ends-based focus misses the entire point of
Twombly, which is to determine whether allegedly anticompetitive
conduct “stems from independent decision or from an agreement,
tacit or express.” Twombly, 550 U.S. at 553 (citation omitted).
If defendants act in parallel whenever they arrive at the same
general end or outcome, then parallel conduct will embrace
independent but identical business decisions borne by market
forces -- precisely the conduct that Twombly excluded from
antitrust liability. In distinguishing horizontal conspiracies
from innocuous coincidences, the means matter. That competitors
80
travelled divergent paths to the same end reflects the absence,
not the presence, of illicit coordination or agreement.
Certainly, direct evidence of a collusive end would amount
to a plausible Section 1 claim. See American Chiropractic Ass’n
v. Trigon Healthcare, Inc., 367 F.3d 212, 226 (4th Cir. 2004)
(“Direct evidence in antitrust cases is explicit and requires no
inferences to establish the proposition or conclusion being
asserted.”). By contrast, when plaintiffs rely on circumstantial
evidence of conspiracy, as in Twombly and the case at hand, the
ends-based approach carries an unacceptably high risk of finding
parallel conduct in wildly disparate behaviors motivated by
independent economic concerns. With its over-inclusive sweep,
the majority erodes the long-recognized right of one party not
to deal with another. Monsanto Co. v. Spray-Rite Service Corp.,
465 U.S. 752, 761 (1984). As long as competitors respond in the
same way to an unappealing offer or product, a business’s
refusal to deal now becomes part of parallel conduct potentially
triggering antitrust liability.
The assumption running throughout the complaint is that
SawStop was the only product anyone could have thought of
adopting. No other business decision could have been reasonable.
Therefore, defendants’ rejection of SawStop must have been part
of a group boycott. Case closed. We are not told exactly why
SD3’s product was demonstrably superior to other competing
81
products in terms of cost effectiveness and safety, such that
only one business decision with respect to it was conceivable.
The naked assumption of its irresistible appeal and inevitable
adoption operates in a comparative vacuum. But defendants faced
comparative decisions. They had to weigh options. The majority’s
ready acceptance of SD3’s unsupported superiority assumption is
part of the fallacy of its ends-based perspective, namely that
any ultimate refusal to adopt is nothing more than one more
instance of parallel behavior.
A means-based analysis, one that focuses on the means by
which the so-called conspiracy was carried out, is the most
sensitive gauge of parallel conduct and complaint plausibility.
The majority contends the dissent would find parallel conduct
“only when defendants move in relative lockstep” or “by
substantially identical means.” Ante at 30. Not so. A focus on
means-based analysis comes nowhere close to requiring identical
means. As circumstantial evidence of a conspiracy, the
similarity of conduct lies along a spectrum. Beyond a certain
point, starkly dissimilar means render a secret agreement among
competitors less plausible. The majority dismisses this means-
based analysis, apparently because dissimilar means “might also
be read to suggest deception” rather than independent business
activity. Ante at 29. The majority thus sets a nifty trap: if
defendants engage in similar means, it’s collusion; if they
82
engage in dissimilar means, it’s deceit. Given those options,
businesses should either keep to themselves or close up shop.
For good reason then, courts have shied away from the
majority’s ends-driven conception of parallel conduct and
instead required more specific similarities. See, e.g., Cosmetic
Gallery, Inc. v. Schoeneman Corp., 495 F.3d 46, 54 (3d. Cir.
2007) (deeming uniform refusal to sell insufficient to show
conscious parallelism because one distributor decided not to
deal prior to the alleged agreement); LaFlamme v. Societe Air
France, 702 F. Supp. 2d 136, 151 (E.D.N.Y. 2010) (casting doubt
on parallel conduct claim where defendants engaged in disparate
strategies at different times); City of Moundridge v. Exxon
Mobil Corp., 429 F. Supp. 2d 117, 131-32 (D.D.C. 2006)
(expressing skepticism towards an allegation of parallel conduct
based on evidence that defendants did no more than exchange
information). Although the majority insists these cases
foundered on findings of “non-parallel ends,” their common
failing was in fact patently disparate means. Ante at 30-31
(emphasis added) (internal quotation marks omitted).
Turning to the means here, there is simply nothing parallel
about separate licensing discussions proceeding along separate
timetables with different results and different motivations. SD3
alleges that defendants collectively agreed not to license its
technology in October 2001. J.A. 89-90. Defendants then
83
supposedly “found ways to abort” the negotiations and conceal
their agreement by “giving separate excuses.” J.A. 91, 94. As
stated in the complaint, however, three defendants continued to
negotiate with SD3 after October 2001 while the fourth, Bosch,
ended negotiations a month before and restarted discussions
years later. J.A. 88, 92. Ryobi sent a signed non-exclusive
licensing agreement to SD3 in January 2002 -- three months after
the so-called collective refusal to deal. J.A. 91-92. The
contract offered a 3% royalty initially that would increase to
5%-8% if the technology proved successful on the market. J.A.
91-92. SD3 refused to accept what appear to be generous terms
based on a minor wording issue. J.A. 92. Emerson offered the
same royalty rate as Ryobi and participated in negotiations for
several months after October 2001, eventually ending talks and
leaving the table saw industry altogether the following year.
J.A. 56-57, 97. Six months after the alleged refusal to deal,
Black & Decker offered SD3 a licensing agreement with a 1%
royalty. J.A. 92. SD3 balked at what it considered unreasonably
stingy terms for its untested and undeveloped technology. Id. If
all this is parallel conduct and evidence of a refusal to deal,
well then anything will qualify.
And yet, despite all this, the agreement is repeatedly
characterized as a refusal to deal. E.g., ante at 27-28. How can
this be? Defendants did deal and did offer to purchase SD3’s
84
technology. How were the eighteen defendants not discussed in
the complaint supposed to deal when, insofar as the complaint is
concerned, they were never even approached?
In short, all four discussed defendants were willing to
deal with SD3 but their negotiations broke down at various times
for various reasons, not least because SD3 demanded more than
defendants were willing to offer. The record shows no refusal to
deal, much less parallel means to that end. It is not plausible
to think that the defendants’ disparate actions were somehow a
carefully choreographed plan to exclude SD3 from the market. By
supposing it possible, the majority severely underestimates the
difficulty of getting a group of competitors to agree on a
course of action that separate contract negotiations may or may
not have shown to be in their best commercial interest. It would
be quite a feat of stage management, moreover, to have some of
those competitors actually extend generous but different
licensing offers at different times to the very party that was
the subject of the supposed group boycott. This is the type of
claim on the far margins of conceivability that Twombly
condemned.
The Hail Mary nature of SD3’s complaint is underscored by
the fact that only four of twenty-two named defendants are even
so much as discussed in the allegations (the “twenty-two” figure
comes from the original complaint as one defendant somehow
85
failed to appear in the amended version). Compare J.A. 30
(original complaint) with J.A. 70 (amended complaint). Indeed,
even the majority chides plaintiffs for “assembl[ing] some
collection of defendants and then mak[ing] vague, non-specific
allegations against all of them as a group.” Ante at 14.
Even plaintiffs appear to realize how tenuous their claim
of parallel conduct is. In contrast to the original complaint,
SD3’s amended complaint collapses its description of the various
negotiations and timelines to create an illusion of uniformity.
Compare J.A. 55-58 (original complaint) with J.A. 88-93 (amended
complaint). While the original version details each of the
discussed defendant’s negotiation history in a separate section,
plaintiffs’ second effort weaves those divergent strands into
one vague narrative, obscuring dates and distinctions along the
way. Id.This attempt at obfuscation hardly inspires confidence in
SD3’s promise that discovery will bolster its claims. Even with
its artful redrafting, however, SD3 falls short of the bare
minimum required for alleging a group boycott. To hold otherwise
is to use antitrust law to badly skew the market forces normally
at play in contract negotiations. From now on, defendants
decline to deal with an entity proposing any new design feature
of product development at their peril. They also cannot refuse
to purchase a product in the course of licensing negotiations
86
because that too, under the majority’s rubric, is grounds for
possible antitrust liability if others arrive independently at a
similar business judgment. Again, SD3’s attempt to achieve
through litigation more than what markets or contracts would
ever independently confer is precisely the kind of abuse of
Sherman Act claims that Twombly sought to prohibit.
B.
The majority believes that all the non-parallel behavior
and disparate means of proceeding were hatched in secret. The
concurrence makes much of the fact that the meeting among table
saw manufacturers was “secret.” Ante at 56-58. In fact, no fewer
than four times does the concurring opinion refer to the alleged
agreement not to deal as a “secret agreement” or a “pact [kept]
secret.” Id. This is manifestly a cover for the fact that my
concurring colleague is unable to point to the traces of an
agreement, hoping, I suppose, that a fishing expedition will
unearth them.
But there is a larger problem here. These days secrets are
harder to keep. A secret is something that is held by only one.
Or maybe two. But twenty-two? Managers everywhere must be
relieved to learn from my concurring colleague that you can let
twenty-two people in on a secret and have nothing leak out.
We also run into a significant collective action difficulty
here. The larger the alleged conspiracy, the larger the number
87
of alleged participants that need to be brought into line both
as to the object and execution of the conspiracy as well as the
need to keep it secret. The vast number of antitrust cases
involve a much smaller number of conspirators, and it is telling
that my concurring friend must venture back to the 1990s even to
find an inapposite situation. The concurrence again labels the
dissent’s discussion of collective action problems a foray into
policy. It is not. It is an inquiry into plausibility, which
Twombly absolutely requires that we undertake. The failure to do
this is but one more example of the majority’s failure to follow
that decision.
C.
Assuming, though only for the sake of argument, that
plaintiffs had properly alleged parallel conduct, the amended
complaint still fails to show the “something more” needed to
turn conscious parallelism into a plausible conspiracy. Twombly,
550 U.S. at 560. The majority contends that the “more” necessary
to nudge SD3’s group boycott claim across the goal line is the
complaint’s identification of “the particular time, place, and
manner in which the boycott initially formed, describing a
separate meeting [among table saw manufacturers] held for that
purpose during the Power Tool Institute’s October 2001 annual
meeting.” Ante at 33 (citation omitted). This, we are told, is
“the heart of SawStop’s complaint.” Ante at 35.
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But perfectly lawful trade association meetings do in fact
take place on a particular day at a particular time for a
particular purpose. And the majority’s assertion that table saw
manufacturers broke off in a “separate meeting” in the course of
a larger trade convention is nothing more than a description of
ordinary conduct. Indeed, it would be unusual for a bar
association meeting, health care convention, or any other
industry-wide gathering not to break out into more specialized
subgroups to discuss matters of common interest. We need not
coin the term “breakout discussion liability” to note that these
sessions have long been a staple of business and professional
life, and the majority has now made even this form of
communication more perilous.
Courts have recognized behavior contrary to defendants’
economic interests as a plus factor for showing concerted
action. See, e.g., Hyland v. HomeServices of America, Inc., 771
F.3d 310, 320 (6th Cir. 2014). It is hard to see how any
defendant in this case acted against its economic interest. SD3
boldly asserts that, but for the boycott, all table saw
manufacturers would have licensed its technology. J.A. 92. There
is little support for such inflated self-confidence. Plaintiffs
conceded that any licensing agreements could not have taken
effect until 2004, and that its technology would not have been
fully implemented until 2008 -- years after it demanded
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industry-wide acceptance. J.A. 92. Defendants were also
concerned that the new technology could actually increase hand
injuries, discourage the use of blade guards, and fail to
address “kickback” injuries. J.A. 87, 101. Despite the lukewarm
reception, SD3 set its royalty rate at approximately 8% of
wholesale prices, a costly gamble for manufacturers operating on
often thin and always uncertain profit margins. Response Br. 1;
J.A. 86. For all these reasons, it was consistent with each
manufacturer’s best interest to reject an expensive, unproven,
undeveloped, and possibly unsafe technology. Each defendant
could easily have arrived at this business decision on its own.
One recalls the World’s Fairs at the end of the nineteenth
and beginning of the twentieth century. They were held almost
annually, most often serving as the epicenter for a brisk
competition among participating countries to produce the most
creative and technologically advanced exhibitions. It was then,
as now, a time of unusual inventiveness. The fairs were humming
with booths, tables, exhibits, and displays all designed to show
off new technologies and create a buzz about new products. Some
of those products succeeded spectacularly; a far larger number
cratered. The point is simply that manufacturers should be able
to take into account the time it takes, after the initial hype,
for an invention to become one of practical and marketable
utility that would not expose consumers to injury or
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manufacturers to liability. The majority, however, takes no
cognizance of lag time, which not only exists, as it always has,
in product development but in the most highly touted medical
discoveries. Yet consciousness of lag time is something no
prudent business is without.
Ignoring the many practical reasons for declining SD3’s
offers, the majority hones in on the fear of product liability
as the key motivation behind defendants’ alleged boycott. Ante
at 37-39. This, we are told, is the “why.” 1 Ante at 37.
Defendants counter that no manufacturer rushed to adopt SawStop
technology even after SD3 began producing its own saws in 2004.
Response Br. 32. The majority answers on plaintiffs’ behalf:
SD3 remained too small a player in the table saw market to pose
a significant threat in products liability suits. Ante at 38.
Yet the earlier products liability cases involving SawStop
technology focused on the “mechanical feasibility,” not the
1
In making this point, the majority credits scraps of
testimony from David Peot cherry-picked by SD3 while it ignores
the district court’s diligent review of the full trial
transcript. Ante at 37. When read in full, Peot’s testimony
focused on defendants’ joint venture, formed years after the
alleged group boycott. J.A. 134-40. Far from revealing a
collective refusal to deal, Peot clarified that defendants
planned “to use whatever technology we felt would be best to
prevent table saw accidents. There were no limitations that I
can remember one way or the other.” J.A. 140. This discrepancy
is emblematic of plaintiffs’ attempt to conjure a conspiracy and
of the majority’s willingness to overlook the holes in the
narrative.
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market share, of a “safer alternative design.” Osorio v. One
World Technologies Inc., 659 F.3d 81, 85 (1st Cir. 2011)
(citation omitted). Different design features anywhere in use
are routinely used comparatively in products liability
litigation. SD3’s entry into the market should have put
defendants at a serious disadvantage in products liability
suits. J.A. 90. And yet still defendants refused to bite at
SD3’s product. Either they were never motivated by product
liability concerns in the first place or those concerns were
outweighed by other drawbacks (too costly, ineffective, or
unsafe) to licensing SawStop technology.
Of course, if manufacturers miscalculate in failing to
adopt safer technologies, products liability lies in wait. But
products liability and antitrust law each serve different and
valid interests. Nothing is to be gained by scrambling them in a
way that has the two bodies of law working at cross purposes
such that manufacturers are forbidden, on pain of antitrust
liability, from discussing and weighing product liability
concerns.
D.
By casting product liability concerns as the driver of
anticompetitive conduct, the majority risks curtailing
communication critical to technological development. We would
seemingly want manufacturers to be concerned about products
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liability. Products liability law exists to make businesses
cognizant of the risks their products create and to encourage
them to take steps to avoid such liability. Open and honest
dialogue among competitors can help locate product
vulnerabilities and formulate solutions, hopefully leading to
improved consumer safety. But the majority forces the defendants
into yet another a double bind: They face product liability
suits either for refusing to use what SD3 alleges is a safer
product or for adopting an untested product that could well fail
to work as advertised. The industry would have been foolish not
to discuss the risks either way. It makes little sense to dampen
such discussions prematurely with the specter of antitrust
liability.
Working together, whether cooperating in a joint venture or
simply exchanging information at a trade association meeting,
can not only save industry participants -- and therefore
consumers -- time and money but can also spawn innovations that
no participant could have achieved alone. Given the speed at
which product development now moves and the increased
specialization of many industries, “much innovation today is
likely to require lateral and horizontal linkages as well as
vertical ones.” Thomas M. Jorde & David J. Teece, Rule of Reason
Analysis of Horizontal Arrangements: Agreements Designed to
Advance Innovation and Commercialize Technology, 61 Antitrust
93
L.J. 579, 590 (1993). Particularly for smaller firms with
limited resources or in patent-heavy industries, professional
conclaves offer an efficient means of acquiring information. In
an ever more complex world, sharing information becomes vital to
the holistic perspectives so crucial for highly specialized
companies to keep pace. To that end, sharing information assists
American industry in the increasingly competitive global
marketplace.
To take but one example, industry-wide coordination has
been a driving force for technological progress in American
semiconductor manufacturing. In 1987, semiconductor producers
established a consortium that pooled resources and gathered
information from across what was then a stagnant industry.
Thomas M. Jorde & David J. Teece, Innovation, Cooperation and
Antitrust, 4 Berkeley Tech. L.J. 1, 35 (1989). Since then,
semiconductor manufacturers not only reduced the size of their
circuits -- from 500 nanometers (nm) to 45 nm -- but they also
more than quadrupled the number of transitors, or amplifiers, in
semiconductor chips. Rahul Kapoor & Patia J. McGrath, Unmasking
the Interplay Between Technology Evolution and R&D
Collaboration: Evidence from the Global Semiconductor
Manufacturing Industry, 1990-2010, 43 Res. Pol’y 555, 559
(2014).
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Standard-setting bodies offer similar advantages. See
Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492,
500-01 (1988). Compatibility standards make markets more
efficient by making parts interchangeable, benefitting both
producers and consumers who want to change products or shop
around. Joseph Farrell & Garth Saloner, Standardization,
Compatibility, & Innovation, 16 Rand J. Econ. 70, 70-71 (1985).
And properly devised safety standards both provide consumers
some guarantee of minimum safety and encourage producers to
adopt safer albeit more expensive features, buoyed by the hope
that consumers may realize these products are more expensive
because they are safer to use. The standards thus help to
prevent cheaper, shoddy or unsafe products from undercutting
manufacturers trying to protect consumer welfare. These and many
other benefits to consumers and competition alike can accrue
from standardization.
I commend the majority for recognizing some of the virtues
of standard-setting organizations. 2 Ante at 48. In doing so,
however, it gets caught in a contradiction: the majority
acknowledges the monopolistic aims in plaintiffs’ standard-
2I thus concur in Part VI of the majority opinion
dismissing SD3’s challenge to the actions of the standard-
setting organization, Underwriters Laboratories, Inc. (UL). I
also concur in Part III rejecting SD3’s claims against a number
of defendants simply lumped into a conspiracy through nothing
more than conclusory allegations.
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setting conspiracy claim but turns a blind eye to the same
anticompetitive impulse driving SD3’s group boycott allegation.
Compare ante at 51-54 with ante at 37. Its opinion fails to
comprehend the totality of what SD3 aims to achieve here.
When taken in its entirety, plaintiffs’ use of antitrust
law strikes at the heart of even the most constructive
horizontal cooperation. I recognize that collaboration may shade
into collusion, the very evil that the Sherman Act was designed
to prevent. See, e.g., Am. Soc’y of Mech. Eng’rs, Inc. v.
Hydrolevel Corp., 456 U.S. 556 (1982) (finding liability where
competitors incorrectly declared product unsafe to exclude it
from market); Radiant Burners, Inc. v. Peoples Gas Light & Coke
Co., 364 U.S. 656 (1961) (finding valid cause of action when
competitors excluded innovative product from market through non-
objective safety standards).
And yet many minds may be better than one. Joint ventures,
standard-setting organizations, and trade association meetings
may allow individuals of different specialties to benefit from
each other’s expertise. These fora may prove invaluable for
efficient and effective product development. Those efficiencies
in turn generate reduced costs of doing business that can then
be passed along to the consumer in the form of reduced prices
and better products. Some forms of collaborative endeavors, in
other words, are not so inherently conspiratorial that their
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benefits can be overlooked. The majority ignores all this in its
rush to flatten pleading standards, make communications
perilous, and consign antitrust law to isolationist ends. It is
an odd time for the majority to assume a more isolationist
stance. It raises the risk that antitrust law will render
American companies comparatively incommunicative and thus at a
competitive disadvantage at the very time global commercial
interactions are becoming more commonplace.
III.
I have seldom read a complaint where so many defendants
were named in the complaint (twenty-two) and so few were
actually discussed (four). I have seldom seen a complaint in
which a supposed group boycott fell apart for so many reasons
and in so many directions. Even applying the most generous
assumptions, one is hard pressed to find a plausible group
boycott claim in defendants’ divergent and market-explicable
conduct. After all, SD3 has not been excluded from the
marketplace. Its SawStop technology is currently available
through its own production. Though it would have liked to corner
the market through the industry’s leading manufacturers and
standard-setting organization, it had no right to establish what
was in effect a monopoly all its own. SD3 aims to force all
manufacturers, through its group boycott claim, to adopt its
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technology at its prices and to have the industry’s standard-
setting organization do the same.
It is disappointing that such a skimpy complaint pressing
such anticompetitive ends should be allowed to traduce the
Twombly standard and coopt antitrust law for the precise
monopolistic purposes that the Sherman Act was designed to
prevent. The fallout will disable American companies from all
sorts of cooperative communication, from the most innocuous to
the most productive. If the complaint had spun even a remotely
plausible narrative of impermissible collusion, I should have
been the first to wave it through the Twombly gates. See, e.g.,
Robertson v. Sea Pines Real Estate, 679 F.3d 278 (4th Cir.
2012). But I cannot conspire with my colleagues in the demise of
the Twombly decision. For the reasons stated above, I
respectfully dissent.
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