S&W Forest Products Ltd v. Cedar Shake & Shingle Bureau et al, No. 2:2019cv00202 - Document 116 (W.D. Wash. 2019)
Court Description: ORDER denying Defendant Cedar Shake & Shingle Bureau's 87 FRCP 12(b)(2) Motion to Dismiss; denying Waldun Forest Products Ltd.'s 88 Motion to Dismiss; granting Defendant Anbrook Industries Ltd.'s 89 Motion to Dismiss the Sherman Act claim against all Defendants. Signed by Judge Marsha J. Pechman. (PM)
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S&W Forest Products Ltd v. Cedar Shake & Shingle Bureau et al Doc. 116 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 8 9 10 S&W FOREST PRODUCTS LTD, Plaintiff, 11 ORDER ON MOTIONS TO DISMISS v. 12 13 CASE NO. C19-202 MJP CEDAR SHAKE & SHINGLE BUREAU, et al., 14 Defendants. 15 16 17 18 19 20 21 22 The above entitled Court, having received and reviewed: 1. Defendants’ Motions to Dismiss (Dkt. Nos. 87, 88, 89), 2. Plaintiff’s Responses to Motions to Dismiss (Dkt. Nos. 94, 95), 3. Defendants’ Replies in Support of Motions to Dismiss (Dkt. Nos. 97, 99, 100), all supporting declarations and exhibits, and relevant portions of the record, rules as follows: IT IS ORDERED that Defendant Waldun Forest Products Ltd.’s FRCP 12(b)(2) motion is DENIED. 23 24 ORDER ON MOTIONS TO DISMISS - 1 Dockets.Justia.com 1 2 IT IS ORDERED that the FRCP 12(b)(6) motions to dismiss the Sherman Act claim against all Defendants are GRANTED. 3 4 IT IS FURTHER ORDERED that the motion to dismiss the breach of contract claim against Defendant Cedar Shake & Shingle Bureau is DENIED. Background 1 5 6 Defendant Cedar Shake & Shingle Bureau (“CSSB”) is the only trade association serving 7 the cedar shake and shingle industry. ¶ 19. The organization created, promotes and regulates its 8 “Certi-Label”™ labeling program, a quality control rating which grades different varieties of 9 shakes and shingles, and which Plaintiff alleges has become the standard in the “high-end” cedar 10 shake and shingle market. ¶¶ 2, 3. Co-Defendants Waldun Forest Products Ltd. (“Waldun”) and Anbrook Industries Ltd. 11 12 (“Anbrook”) are two of the largest mills in the industry and Plaintiff alleges that they have led a 13 consortium of the larger cedar shake and shingle member mills through a series of maneuvers 14 within CSSB intended to consolidate their power, fix prices on their products, and eliminate 15 bureau members attempting to price their products more competitively. ¶ 6. In a section of the 16 FAC labeled “The CSSB/Waldun/Anbrook Conspiracy to Restrain Trade,” Plaintiff alleges a 17 series of “anticompetitive actions” which include reducing the number of Board members, 18 defeating both term limits on CSSB directors and attempts to eliminate the weighted voting 19 system which favors the higher-producing mills, and granting the Board chair (currently the 20 president and CEO of Anbrook) the right to vote on all matters (instead of only voting to break 21 ties). ¶ 28. 22 23 1 24 All citations in this section are to the First Amended Complaint (“FAC”) at Dkt. No. 68. ORDER ON MOTIONS TO DISMISS - 2 1 According to Plaintiff, this anti-competitive conspiracy culminated in the “recusal” of its 2 representative from the Bureau’s Board of Directors and the company’s illegal termination from 3 the CSSB on December 21, 2018, an action which Plaintiff alleges was undertaken under false 4 pretenses and in violation of the Membership Agreement and the Bureau’s bylaws. ¶¶ 29-41. 5 That termination was preceded by a December 5, 2018 statement allegedly made by Curtis 6 Walker (president and CEO of Waldun) to a third party that “CSSB member mills should hold 7 their prices at consistent levels” and that “we just need to get rid of [the head of S&W].” ¶ 38. 8 Plaintiff has filed suit against all three Defendants for a violation of § 1 of the Sherman 9 Act (a conspiracy in restraint of trade), and against Defendant CSSB for breach of contract 10 related to its removal from the trade association. The complaint was originally filed on February 11 13, 2019 (Dkt. No. 1); Plaintiff later filed a First Amended Complaint (“FAC;” Dkt. No. 68) 12 which is the subject of these dismissal motions. All three Defendants move for dismissal under 13 FRCP 12(b)(6); co-Defendants Anbrook and Waldun have joined in CSSB’s motion in addition 14 to filing their own. Defendant Waldun also asserts a FRCP 12(b)(2) claim that this Court lacks 15 personal jurisdiction over it. Discussion 16 17 18 Standard of review Under FRCP 12(b)(6), the Court may dismiss a complaint for "failure to state a claim 19 upon which relief can be granted." In ruling on a motion to dismiss, the Court must construe the 20 complaint in the light most favorable to the non-moving party. Livid Holdings Ltd. v. Salomon 21 Smith Barney, Inc., 416 F.3d 940, 946 (9th Cir. 2005). The Court must accept all well-pleaded 22 allegations of material fact as true and draw all reasonable inferences in favor of the plaintiff. 23 Wyler Summit P’ship v. Turner Broad. Sys., 135 F.3d 658, 661 (9th Cir. 1998). 24 ORDER ON MOTIONS TO DISMISS - 3 1 Dismissal is appropriate where a complaint fails to allege "enough facts to state a claim to 2 relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A 3 claim is plausible on its face "when the plaintiff pleads factual content that allows the court to 4 draw the reasonable inference that the defendant is liable for the misconduct alleged." Aschcroft 5 v. Iqbal, 129 S. Ct. 1937, 1949 (2009). As a result, a complaint must contain "more than labels 6 and conclusions, and a formulaic recitation of the elements of a cause of action will not do." 7 Twombly, 550 U.S. at 555. 8 Timeliness 9 Preliminarily, the Court must address Plaintiff’s claim that neither of the motions to 10 dismiss filed by Anbrook or Waldun are “timely.” FRCP 15(a)(3) requires an answer or 11 responsive pleading within 14 days of the filing of a complaint. In ruling on Plaintiff’s earlier 12 request for a preliminary injunction against CSSB, the Court extended the responsive deadline to 13 30 days from the date of the ruling (see Dkt. No. 62), a ruling which Plaintiff contends only 14 pertained to CSSB. The motions to dismiss from co-Defendants Anbrook and Waldun were filed 15 20 days after the filing of Plaintiff’s FAC and Plaintiff argues that the Court should strike the 16 motions based on the six-day delay. 17 The request is denied. Waldun and Anbrook maintain that they thought the extension 18 applied to them as well; Plaintiff’s only evidence to the contrary is a minute entry in the docket 19 stating that “Defendant’s [singular] answer or response to Plaintiff’s complaint due 30 days 20 following the issuance of this ruling.” Id. The Court does not consider this definitive proof of 21 Plaintiff’s argument; it is neither a transcript of the Court’s oral ruling nor a written order. A six- 22 day filing delay, even if based on a misunderstanding, should not determine a substantive motion 23 such as this. 24 ORDER ON MOTIONS TO DISMISS - 4 1 FRCP 12(b)(2): Personal jurisdiction (Waldun only) Plaintiff makes no argument that there is general jurisdiction over Waldun; i.e., the 2 3 company is neither incorporated in Washington nor has its principle place of business in the 4 state. 5 6 7 8 9 Plaintiff does assert that the Court has specific jurisdiction over Waldun, however, an assertion which requires it to establish that: 1. Waldun “purposely directed activities” at the forum or availed itself of the privilege of conducting business here; 2. Its claim against Waldun “arises out of or relates to Defendant’s forum-related activities;” 10 3. The exercise of jurisdiction “comports with fair play and substantial justice.” 11 Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, 1128 (9th Cir. 2010). 12 Under the traditional test for specific jurisdiction, the Court finds that Plaintiff’s 13 complaint fails. In terms of “purposeful direction,” the case law in the Ninth Circuit requires an 14 intentional act, expressly aimed at the forum state, causing foreseeable harm in the forum. 15 Marvix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218, 1228 (9th Cir. 2011). First of all, as 16 discussed in greater detail infra (see “FRCP 12(b)(6): Failure to state a claim”), Plaintiff has 17 failed to successfully state a cause of action for a price-fixing conspiracy to restrain trade – much 18 less a conspiracy “expressly aimed at the forum state” – so it is moot whether Waldun’s alleged 19 “intentional price-fixing acts” were aimed at this forum. 20 Secondly, Plaintiff’s argument that Waldun’s membership in a Washington non-profit 21 (CSSB is a non-profit organization registered in the State of Washington) is sufficient contact 22 with this forum to justify the exercise of jurisdiction no longer represents the state of the law in 23 this area. The contacts with the forum must be specifically related to complained-of activity in 24 ORDER ON MOTIONS TO DISMISS - 5 1 order to establish specific jurisdiction (see Waite v. All Acquisition Corp., 901 F.3d 1307 (11th 2 Cir. 2018)). 3 The Court has already mentioned (and will discuss in more detail infra) the insufficiency 4 of the allegations of intentional acts of price-fixing. To the extent that the alleged intentional 5 acts concern the “group boycott/wrongful termination” of S&W, jurisdiction is still lacking. 6 Waldun is a British Columbia corporation, as are Anbrook and S&W – even if Plaintiff were 7 able to allege facts adequate to establish that Waldun conspired with Anbrook to wrongfully 8 terminate the company from the CSSB as a means of restraining S&W from conducting business 9 (which it has not), there are no allegations that any of the activities related to that agreement took 10 place in (or were aimed at) the forum state. Plaintiff does not even allege that the meeting at 11 which it was terminated from the association took place in Washington. Traditional personal 12 jurisdiction is lacking. 13 However, there is a statutory jurisdictional provision in the Sherman Act which permits 14 service worldwide for Sherman Act claims. See 15 U.S.C. § 22 (§ 12 of the Sherman Act). 15 Antitrust litigation employs a “national contacts” analysis for jurisdiction which simply requires 16 minimum contacts with the U.S. sufficient to satisfy due process in order to find personal 17 jurisdiction in any district. Action Embroidery Corp. v. Atlantic. Embroidery, Inc., 368 F.3d 18 1174, 1180 (9th Cir. 2004). 19 Waldun attempts to evade jurisdiction on this basis by citing an 11th Circuit case which 20 held that, unless service is made under the Sherman Act, jurisdiction cannot be established on the 21 “national contacts” basis permitted under the statute. Gen. Cigar Holdings, Inc. v. Altadis, S.A., 22 205 F.Supp.2d 1335, 1340 (S.D.Fla. 2002); aff’d, 54 F.App’x 492 (11th Cir. 2002). Here, 23 24 ORDER ON MOTIONS TO DISMISS - 6 1 Plaintiff served Waldun under the Hague Convention, not the Sherman Act, and Waldun argues 2 that this disqualifies S&W from relying on a “national contacts” analysis. 3 This Court declines to adopt the 11th Circuit rule or Waldun’s argument. No other 4 jurisdiction besides the 11th has followed the rule (it has only even been cited once since 2002). 5 Plaintiff’s claims against Waldun are made under the Sherman Act, which authorizes nationwide 6 service of process; the Court fails to see how (in terms of either fundamental fairness or due 7 process) it makes any difference whether the service is actually made “under” the Sherman Act. 8 The statute reads 9 10 11 Any suit, action, or proceeding under the antitrust laws against a corporation may be brought not only in the judicial district whereof it is an inhabitant, but also in any district wherein it may be found or transacts business; and all process in such cases may be served in the district of which it is an inhabitant, or wherever it may be found. 12 15 U.S.C.S. § 22 (emphasis supplied). “All process… may be served” as long as the suit is 13 “under the antitrust laws;” the provision says nothing about “only service made under this 14 statute.” Plaintiff adequately asserts the requisite transaction of business throughout the U.S. by 15 Waldun in its complaint (see FAC at ¶ 15), and the Court is satisfied that personal jurisdiction 16 over the Defendant exists under a “national contacts” analysis. 17 FRCP 12(b)(6): Failure to state a claim 18 First Claim: Sherman Act § 1 violation 19 Successfully pleading a violation of § 1 of the Sherman Act (15 U.S.C. et seq.) requires 20 three elements: 21 1. A contract, combination or conspiracy for the purpose of 22 2. “Unreasonably” restraining trade 23 3. Which affects interstate commerce. 24 ORDER ON MOTIONS TO DISMISS - 7 1 T.W. Electrical Service, Inc. v. Pac. Electrical Contractors Assoc’n, 809 F.2d 626, 632-33 (9th 2 Cir. 1987). 3 4 The fatal flaw in Plaintiff’s pleadings is its inability to state facts which are either (1) sufficient to allege a conspiracy or (2) sufficient to establish a per se conspiracy. 5 The Ninth Circuit has held that 6 …to allege an agreement between antitrust co-conspirators, the complaint must allege facts such as a “specific time, place, or person involved in the alleged conspiracies” to give a defendant seeking to respond to allegations of a conspiracy an idea of where to begin. 7 8 9 10 Kendall v. Visa U.S.A., Inc., 518 F.3d 1042, 1047 (9th Cir. 2008)(quoting Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1970 at n.10). 11 Plaintiff’s FAC is deficient in this regard. The vast majority of its allegations 12 (particularly ¶ 28 which contains its lengthy laundry list of “anticompetitive acts”) consist of 13 simply appending the conclusory phrase “conspiring to” to a list of actions taken by Anbrook, 14 Waldun, or CSSB which S&W alleges were undertaken to diminish the power of (or eliminate) 15 “competitor member mills.” ¶ 28 of the FAC contains no allegation describing a “time, place or 16 person involved in the alleged conspiracies.” It is textbook conclusory pleading and it cannot 17 suffice to successfully allege the conspiracy required by § 1 of the Sherman Act. 18 19 20 21 22 Plaintiff’s pleading regarding the “conspiracy to terminate” it from the Bureau is similarly vague and generic. Plaintiff alleges: Prior to the vote to terminate S&W, defendant Waldun through Curtis Walker and defendant Anbrook through Board chairperson Brooke Meeker conspired with one or more other CSSB directors to present false and defamatory information to the CSSB Board… and to exclude Intertek chief inspector Wayne Rourke from participating in that meeting. 23 24 ORDER ON MOTIONS TO DISMISS - 8 1 2 3 4 In furtherance of their conspiracy to terminate S&W as a CSSB member mill, defendants Waldun and Anbrook through their chief executives colluded with other members of the CSSB Board of Directors to deny S&W any notice of the charges against it or opportunity to defend itself… [and] these co-conspirators directed CSSB Executive Director Lynn Christensen to issue a Notice of Recusal to S&W Sales Manager Sanjna Hothi… 5 Id. at ¶¶ 39, 40. No facts are plead regarding when or where Waldun and Anbrook met to plot 6 this agreement, what was discussed, or who the “one or more other CSSB directors” might be. 7 This is exactly the kind of conclusory pleading which Twombly and Iqbal were intended to 8 prevent. 9 The one specific “time, place and person” instance which Plaintiff does plead is the 10 December 5, 2018 conversation between Waldun’s president and CEO Curtis Walker and a 11 member of the Watkins Sawmill. The specific facts alleged here are: 12 13 14 15 Curtis Walker stated that CSSB member mills should hold their prices at consistent levels. He expressed anger about S&W’s willingness to compete on price for shake and shingle products. He became very agitated during his comments about S&W and stated: “yeah, well we just need to get rid of [the head of S&W].” 16 FAC at ¶ 38. This is simply a report of one man talking, and inadequate for purposes of pleading 17 a conspiracy. A conspiracy by definition must consist of two or more people. There is no 18 allegation that Walker solicited the other party to the conversation to “hold their prices at 19 consistent levels” or “get rid of” S&W, and no allegation that Walker had similar conversations 20 (much less an agreement) with anyone else. 21 Alternatively, Plaintiff argues that CSSB is a “presumptive conspiracy” and that its 22 actions are per se anticompetitive. A finding that Plaintiff has plead a per se Sherman Act 23 violation would relieve it of the obligation to allege adequate facts to establish a conspiracy. The 24 ORDER ON MOTIONS TO DISMISS - 9 1 default inquiry into antitrust allegations follows a “rule of reason” analysis; i.e., did the action(s) 2 impose an “unreasonable restraint” on trade? See Standard Oil Co. v. United States, 221 U.S. 1 3 (1911). However, “agreements or practices which because of their pernicious effect on 4 competition and lack of any redeeming virtue are conclusively presumed to be unreasonable and 5 therefore illegal without elaborate inquiry as to the precise harm… or the business excuse for 6 their use” are considered “per se” anticompetitive. Northern Pacific R. Co. v. United States, 356 7 U.S. 1, 5 (1958). The decision to apply the per se rule turns on "whether the practice facially appears to be one that would always or almost always tend to restrict competition and decrease output . . . or instead one designed to 'increase economic efficiency and render markets more, rather than less, competitive.'" Broadcast Music, Inc. v. Columbia Broadcasting System, Inc., 441 U.S. 1, 19-20 (1979) (citations omitted). See also National Collegiate Athletic Assn. v. Board of Regents of University of Oklahoma, 468 U.S. 85, 103-104 (1984) ("Per se rules are invoked when surrounding circumstances make the likelihood of anticompetitive conduct so great as to render unjustified further examination of the challenged conduct"). 8 9 10 11 12 13 14 Nw. Wholesale Stationers, Inc. v. Pac. Stationery & Printing Co., 472 U.S. 284, 289-90 (1985). 2 15 16 17 18 19 Plaintiff has two theories to advance in support of its argument that CSSB’s actions were facially restrictive of competition. The first is that that the Defendants were engaged in a conspiracy to fix prices. The problem with this theory is that, outside of Walker’s isolated comment, there are no facts alleged which support this allegation. Plaintiff asserts that every “anticompetitive act” it complains of (see FAC at ¶ 28) was in service of a plan to fix prices, but 20 21 22 23 2 The Supreme Court in Nw. Wholesale went on to say that “[w]hen the plaintiff challenges expulsion from a joint buying cooperative, some showing must be made that the cooperative possesses market power or unique access to a business element necessary for effective competition.” Id. at 298. Both parties devote considerable briefing to whether Plaintiff has adequately plead a “relevant market” for Sherman Act purposes. The Court declines to reach that issue in light of the ruling that Plaintiff has failed to plead sufficient facts related to its allegations of a conspiracy in restraint of trade to entitle it to relief. 24 ORDER ON MOTIONS TO DISMISS - 10 1 there is no evidence adduced that such a plan actually existed; e.g., facts related to the time, 2 place or content of any meetings between “co-conspirators,” nor any sales/market statistics 3 tending to establish that prices were being maintained at artificially high levels. 4 Plaintiff argues that it is not required to prove “naked price-fixing;” that its “detailed 5 price-fixing allegations (including Curtis Walker’s admissions)” provide “relevant context” and 6 “strongly suggest that terminating S&W was part of a broader anticompetitive strategy.” Dkt. 7 No. 94, Response to CSSB Mtn at 10. But the problem is that, outside of Walker’s statement 8 (which, standing alone, is at best proof of Walker’s opinion on the subject, not proof of price- 9 fixing) nothing is alleged which makes the allegation of price-fixing plausible. 10 The other legal ground on which Plaintiff seeks to prove out its “per se anticompetitive” 11 theory is its termination from CSSB, which it attempts to paint in an antitrust light as a “group 12 boycott.” While the Court finds that Plaintiff has adequately plead that there were improprieties 13 in the process by which it was terminated (see “Second Claim: Breach of Contract” analysis 14 infra), that is not the same thing as properly alleging an anticompetitive act, particularly a per se 15 anticompetitive act. Plaintiff’s desire to plausibly imply that the termination was motivated by 16 its refusal to “get on board” the price-fixing train is severely undercut by its inability to produce 17 any evidence (besides the ineffectual Walker quote) that a price-fixing conspiracy existed. 18 This approach is further undercut by the undisputed fact that CSSB did have the right, 19 under the Agreement, to terminate members under certain circumstances. Plaintiff alleges that 20 its termination was procedurally improper and based on false pretenses; CSSB asserts that it was 21 simply fulfilling its mandate to protect the industry and the public from shoddy and/or deceptive 22 practices and improper use of its valuable Certi-Label™ process. While this litigation is not at a 23 point where the Court is required to ascertain who has the more meritorious position, the fact that 24 ORDER ON MOTIONS TO DISMISS - 11 1 there is a potentially legitimate business motive for CSSB’s actions is sufficient to defeat 2 Plaintiff’s Sherman Act claim even at this early stage. 3 4 5 6 Allegations of facts that could just as easily suggest rational, legal business behavior by the defendants as they could suggest an illegal conspiracy are insufficient to plead a violation of the antitrust laws. Bell Atlantic, 127 S. Ct. at 1964-66 & n.5 (explaining that an antitrust complaint must cross the threshold not only between "conclusory and factual" but also between "the factually neutral and the factually suggestive"). 7 Kendall v. Visa U.S.A., Inc., 518 F.3d 1042, 1049 (9th Cir. 2008). 8 The bottom line is that properly pleading a per se Sherman Act violation presents a high 9 bar, as the Supreme Court has explained: 10 11 12 13 14 15 16 17 18 19 20 Resort to per se rules is confined to restraints, like those mentioned, "that would always or almost always tend to restrict competition and decrease output." [citation omitted] To justify a per se prohibition a restraint must have "manifestly anticompetitive" effects, GTE Sylvania, supra, at 50, 97 S. Ct. 2549, 53 L. Ed. 2d 568, and "lack . . . any redeeming virtue," Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Co., 472 U.S. 284, 289, 105 S. Ct. 2613, 86 L. Ed. 2d 202 (1985) (internal quotation marks omitted). As a consequence, the per se rule is appropriate only after courts have had considerable experience with the type of restraint at issue, [citation omitted] and only if courts can predict with confidence that it would be invalidated in all or almost all instances under the rule of reason. [citation omitted] It should come as no surprise, then, that "we have expressed reluctance to adopt per se rules with regard to restraints imposed in the context of business relationships where the economic impact of certain practices is not immediately obvious." [citation omitted] 21 Leegin Creative Leather Prods. v. PSKS, Inc., 551 U.S. 877, 885-86, 886-87 (2007)(emphasis 22 supplied). None of the factors mentioned above is present here – the acts alleged are not 23 “manifestly uncompetitive,” this Court has not had “considerable experience with the type of 24 ORDER ON MOTIONS TO DISMISS - 12 1 restraint at issue” (nor has Plaintiff cited to cases addressing similar situations), and the 2 economic impact of the actions of which Plaintiff complains are “not immediately obvious.” 3 Plaintiff has failed to adequately plead a per se Sherman Act violation, which means it 4 must rely on a “rule of reason” analysis to support its allegations. The requirements of 5 successfully meeting the “rule of reason” test return Plaintiff to the necessity of establishing the 6 “conspiracy/combination/contract” element cited supra, a requirement which its FAC fails to 7 meet. 8 9 On this basis, the Court will GRANT the Defendants’ motion to dismiss as regards the first cause of action in Plaintiff’s FAC. 10 Second Claim: Breach of Contract 11 Defendant CSSB seeks dismissal of this cause of action on the grounds that the FAC is 12 devoid of any allegations of a specific breach; i.e., which provisions of their contract were 13 violated. But, as Plaintiff points out, the Agreement incorporates the organization’s bylaws, and 14 this Court has already found that Plaintiff has adequately alleged that (1) the notice provision of 15 the bylaws was violated by the “non-noticed” termination meeting, and (2) the “recusal” of 16 Plaintiff’s representative from the Board was an ultra vires act not sanctioned by the bylaws. 17 Dkt. No. 65, Order Granting Preliminary Injunction at 5-7. 18 Furthermore, the bylaws require that termination of membership be “for cause;” either a 19 failure to comply with [the] Bylaws,… its Member Agreement, or any of the policies, procedures, rules and regulations adopted by resolution of the CSSB Members or the Board of Directors… or for conduct detrimental to CSSB or its Members. 20 21 22 FAC at ¶ 54. By Plaintiff’s allegations, the termination was made under false pretenses and thus 23 was not “for cause” – clearly a violation of Defendant’s contractual agreement with its members. 24 ORDER ON MOTIONS TO DISMISS - 13 1 2 3 4 5 Defendant CSSB also seeks dismissal of this claim on the basis of a “limitation of liability” provision in the Agreement which states: Limited Liability for [CSSB]. [CSSB] shall not be liable for special, incidental, indirect or consequential damages of any kind whatsoever, whether alleged to have resulted, directly or indirectly, from a breach by [CSSB] of this Agreement o[r] other contract, negligence, or other tort or otherwise. 6 Dkt. No. 11-2, Agreement, ¶ 13. 7 Not surprisingly, Plaintiff indicates that it intends to challenge this aspect of its 8 membership contract as unconscionable when raised as a defense in CSSB’s answer. Defendant 9 argues that the determination of the validity of this clause is purely a matter of law, but if it 10 intends to imply that the Court should resolve the issue at this stage of the proceedings, the Court 11 disagrees and declines to do so. 12 The motion to dismiss the breach of contract claim is DENIED. 13 Conclusion 14 Plaintiff has established personal jurisdiction over Defendant Waldun Industries, Ltd. 15 based on a “national contacts” analysis, as it is permitted to do on the basis of its Sherman Act 16 claim. Plaintiff has alleged sufficient facts to state a plausible claim for relief on its breach of 17 contact action against Defendant CSSB. 18 However, Plaintiff has failed to allege sufficient facts to plausibly claim relief under the 19 Sherman Act against the named Defendants, and that claim will be dismissed pursuant to FRCP 20 12(b)(6). 21 22 23 24 ORDER ON MOTIONS TO DISMISS - 14 1 The clerk is ordered to provide copies of this order to all counsel. 2 Dated August 7, 2019. A 3 4 Marsha J. Pechman United States Senior District Judge 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 ORDER ON MOTIONS TO DISMISS - 15
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