BANXCorp. v. PARTNERS

• Decision Date: 28 March 2011
• Docket Number: Civil Action No. 10-4769 (SDW)(MCA)
• Parties: BANXCORP, Plaintiff, v. APAX PARTNERS, L.P., APAX PARTNERS LLP, BEN MERGER SUB, INC., BEN HOLDINGS, INC., APAX US VII, L.P., and APAX PARTNERS EUROPE MANAGERS LIMITED, Defendants.
• Court: U.S. District Court — District of New Jersey

BANXCORP, Plaintiff,

v. APAX PARTNERS, L.P., APAX PARTNERS LLP, BEN MERGER SUB,INC., BEN HOLDINGS, INC., APAX US VII, L.P.,and APAX PARTNERS EUROPE MANAGERS LIMITED, Defendants.

Civil Action No. 10-4769 (SDW)(MCA)

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

Dated : March 28 , 2011.

OPINION

WIGENTON, District Judge.

Before the Court is Defendants Apax Partners LLP ("Partners"), BEN Merger Sub, Inc., ("BEN Merger"), BEN Holdings, Inc., ("BEN Holdings"), Apax US VII, L.P., Apax Partners Europe Managers Limited ("collectively "foreign Defendants"), and Apax Partners, L.P.'s ("Apax") (collectively "Defendants"),¹ Motion to Dismiss Plaintiff, BanxCorp's ("BanxCorp" or "Plaintiff") Complaint for lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2)² and for failure to state a claim upon which relief may be granted pursuant to Federal Rule of Civil Procedure 12(b)(6).³ This Court has jurisdiction under 15 U.S.C. §§ 1 and 26, and 28 U.S.C. §§ 1331, 1337, and 1367. Venue is proper pursuant to 28 U.S.C. § 1391(b) and (c), and 15 U.S.C. §§ 15 and 22. The Motions are decided without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons stated below, this Court grants Apax's Motion to Dismiss.

FACTUAL AND PROCEDURAL BACKGROUND

BanxCorp, a Delaware Corporation, is a provider of bank rate tables listing interest rates from financial institutions. (Compl. ¶ 1.) Partners is a United Kingdom limited liability partnership. (Id. at ¶ 2.) Defendant Apax is a Delaware limited liability partnership and an advisor to Partners. (Id. at ¶¶ 3, 28.)⁴ Plaintiff alleges that Partners, which is not in the business of providing bank rate listings, (Id. ¶ 24), sought "to enter the market more rapidly by acquiring" BANKRATE, Inc.⁵ ("Bankrate"), an aggregator and supplier of bank rate listings, on July 22, 2009. (Id. at ¶¶ 24, 25.) Bankrate continued as the surviving corporation after the merger and became a wholly owned subsidiary of BEN Holdings. (Id. at ¶ 30.)

BanxCorp further alleges that Partners offered "Bankrate Insiders . . . certain sweetheart deals and cash payouts, so as to ensure their support in acquiring BANKRATE's monopoly giving [] [Partners] the inherent ability to fix prices in the relevant market throughout the United States by gaining control of BANKRATE's CARTEL." (Id. at ¶ 32; see also Id. at ¶ 38.) According to Plaintiff, "Defendants knew and agreed to act in concert with BANKRATE and in conjunction with the CARTEL" to fix prices, divide the market, and allocate customers, traffic and revenue. (Id. at ¶ 99.) Specifically, BanxCorp asserts that "Defendants have acquiesced and agreed to let BANKRATE sell Bank Rate Website Hyperlinks on behalf of itself and the members of the CARTEL at CPC [(cost per click)] prices they knew to be fixed pursuant to the conspiracy described above . . . ." (Id. at 100.)

Plaintiff filed a four-count Complaint against Defendants alleging: (1) an illegal restraint of trade in violation of § 1 of the Sherman Act, 15 U.S.C. § 1; (2) monopolization and attempted monopolization in violation of § 2 of the Sherman Act; (3) prohibited mergers and acquisitions in violation of § 7 of the Clayton Act, 15 U.S.C. § 15; and (4) contracts and combinations in restraint of trade in violation of § 56:9-3 of the New Jersey Antitrust Act, N.J. Stat. Ann. § 56:91 et seq. (West 2001).⁶ (Compl. ¶¶ 137-158.)

STANDARD OF REVIEW

The adequacy of pleadings is governed by Fed. R. Civ. P. 8(a)(2), which requires that a Complaint allege "a short and plain statement of the claim showing that the pleader is entitled to relief." See also Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (stating that Rule 8 "requires a 'showing' rather than a blanket assertion of an entitlement to relief."). In considering a Motion to Dismiss under Fed. R. Civ. P. 12(b)(6), the Court must "'accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief."' Phillips, 515 F.3d at 231 (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002)). However, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)) ("Twombly"). As the Supreme Court has explained To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a "probability requirement," but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are "merely consistent with" a defendant's liability, it "stops short of the line between possibility and plausibility of 'entitlement to relief.'"

Iqbal, 129 S. Ct. at 1949 (quoting Twombly, 550 U.S. at 556-57, 70) (internal citations omitted). Determining whether the allegations in a complaint are "plausible" is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 129 S. Ct. at 1950. If the "well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct," the complaint should be dismissed for failing to "show[] that the pleader is entitled to relief as required by Rule 8(a)(2). Id.

Although the Third Circuit has instructed that antitrust complaints should be liberally construed, "they [are not] exempt from the federal rules." Commonwealth of Pa. ex. rel. Zimmerman v. PepsiCo, Inc., 836 F.2d 173, 179 (3d Cir. 1988) (quoting Sims v. Mack Truck Corp., 488 F. Supp. 592, 608 (E.D. Pa. 1980)). According to the Supreme Court in Twombly, "[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his[/her] 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." 550 U.S. at 555 (internal citations omitted). Furthermore, the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Id. The Court further stated that an antitrust complaint must plead "enough factual matter (taken as true) to suggest that an agreement was made. Asking for plausible grounds to infer an agreement does not impose a probability requirement at the pleading stage; it simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of illegal agreement." Id. at 556. The Third Circuit summarized the Twombly pleading standard as follows: "'stating . . . a claim requires a complaint with enough factual matter (taken as true) to suggest' the required element." Phillips, 515 F.3d at 234 (quoting Twombly, 550 U.S. at 556).

DISCUSSION

Apax, the sole remaining Defendant, moves to dismiss BanxCorp's claims for violation of §§ 1 and 2 of the Sherman Act, § 7 of the Clayton Act, and NJ. Stat. Ann § 56:9-3, the New Jersey Antitrust Act. It asserts that Plaintiff has failed to allege any specific facts to support its claims and that Plaintiff lacks standing. On the other hand, Plaintiff argues that the Motion should be denied because it has adequately stated a claim under §§ 1 and 2 of the Sherman Act and § 7 of the Clayton Act.

A. Illegal Restraint of Trade under § 1 of the Sherman Act

Plaintiff alleges that "Defendants entered into a contract, combination or conspiracy in restraint of trade to achieve monopoly power, fix prices, divide markets and allocate customers, traffic and revenues with competitors in the market for Bank Rate Websites . . . ." (Compl. ¶ 138). Section 1 of the Sherman Act provides that "[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal." 15 U.S.C. § 1. But "[s]ince virtually all business agreements restrain trade to some extent, § 1 of the Sherman Act has been construed to make illegal only those contracts that constitute unreasonable restraints of trade." Yeager's Fuel v. Pa. Power & Light Co., 953 F. Supp. 617, 653 (E.D. Pa. 1997) (quoting Orson, Inc. v. Miramax Film Corp., 79 F.3d 1358, 1366 (3d Cir. 1996)) (internal quotations omitted). To establish a claim under § 1, Plaintiff must show that: "(1) the defendants contracted, combined or conspired among each other; (2) the combination or conspiracy produced anti-competitive effects within the relevant product and geographic markets; (3) the objects of the conduct pursuant to that contract or conspiracy were illegal; and (4) the plaintiffs were injured as a proximate result of that conspiracy." Ideal Dairy Farms v. John Labbatt, Ltd., 90 F.3d 737, 748 n.5 (3d Cir. 1996).

Apax maintains that Plaintiff has not pled any facts showing that it engaged in any antitrust activity. This Court agrees. While Twombly does not "require heightened fact pleading of specifics," the plaintiff must come forward with "enough facts to state a claim to relief that is plausible on its face." 550 U.S. at 570. Although BanxCorp is not required to assert "detailed factual allegations" in its complaint, id. at 555, it has an obligation to provide "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action" is insufficient. Id. (internal citations omitted). "A...