Crownalytics, LLC v. Spins, LLC
| Decision Date | 25 April 2023 |
| Docket Number | Civil Action 22-cv-01275-NYW-SKC |
| Parties | CROWNALYTICS, LLC, Plaintiff, v. SPINS LLC, DAAP, LLC, and INFORMATION RESOURCES, INC., Defendants. |
| Court | U.S. District Court — District of Colorado |
ORDER ON MAGISTRATE JUDGE'S RECOMMENDATION
This matter is before the Court on the Recommendation of United States Magistrate Judge S. Kato Crews issued on March 3 2023, [Doc. 74], and the various Objections thereto. [Doc 77; Doc. 78, filed March 17, 2023]. For the following reasons, the Objections are respectfully SUSTAINED in part and OVERRULED in part and the Recommendation is ADOPTED in part.
A district court may refer a dispositive motion to a magistrate judge for recommendation. 28 U.S.C. § 636(b)(1)(B). The district court “must determine de novo any part of the magistrate judge's disposition that has been properly objected to.” Fed.R.Civ.P. 72(b)(3). “[A] party's objections to the magistrate judge's report and recommendation must be both timely and specific to preserve an issue for de novo review by the district court or for appellate review.” United States v. One Parcel of Real Prop., 73 F.3d 1057, 1060 (10th Cir. 1996).[1]Such specific objections permit “the district judge to focus attention on those issues-factual and legal-that are at the heart of the parties' dispute.” Id. at 1059.
Under Rule 12(b)(6), a court may dismiss a complaint for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). In deciding a motion under Rule 12(b)(6), the Court must “accept as true all well-pleaded factual allegations . . . and view these allegations in the light most favorable to the plaintiff.” Casanova v. Ulibarri, 595 F.3d 1120, 1124 (10th Cir. 2010). The plaintiff may not rely on mere labels or conclusions, “and a formulaic recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Rather, “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); see also Robbins v. Oklahoma, 519 F.3d 1242, 1247 (10th Cir. 2008) ( that plausibility refers “to the scope of the allegations in a complaint,” and that the allegations must be sufficient to nudge a plaintiff's claim(s) “across the line from conceivable to plausible”).
The Court draws the following facts from the Complaint and Jury Demand (the “Complaint”) [Doc. 1] and presumes they are true for purposes of this Order. This case revolves around data and data analytics in the market of natural and organic consumer packaged goods (“NOCPG”). [Doc. 1 at ¶ 4]. For purposes of background, in the NOCPG data market, providers collect and sell retail tracking data from various retail channels that are relevant to NOCPG manufacturers. [Id. at ¶ 22]. Defendants SPINS LLC (“SPINS”) and Information Resources, Inc. (“IRI”) are competitors in the NOCPG data market and have each “developed massive databases that are highly relevant to NOCPG customers.” [Id. at ¶¶ 6-8, 22].[2] There are only “three providers” in the NOCPG data market-SPINS, IRI, and non-party The Nielsen Company (“Nielsen”). [Id. at ¶¶ 22, 24].
In the NOCPG data analytics market, providers-i.e., third-party data analytics firms- analyze NOCPG data for NOCPG manufacturers. [Id. at ¶ 33]. Plaintiff Crownalytics, LLC (“Plaintiff” or “Crownalytics”) is a “data-agnostic analytics and insights consulting company” in the NOCPG data analytics market. [Id. at ¶¶ 4, 32]. SPINS and IRI also offer data analytics services to customers, but they are aware that their customers retain third-party data analytics firms to analyze the data purchased from SPINS and IRI. [Id. at ¶ 37]. According to Plaintiff, both SPINS and IRI offer their data as a standalone product, but in 2014, they began offering the “SPINS bundle,” which includes both SPINS data and IRI data; the IRI data is offered at a significant discount off of the price IRI charges customers for the data. [Id. at ¶ 26]. The SPINS bundle can only be purchased through SPINS. [Id.].
Crownalytics entered the data analytics market in 2016, at which time it analyzed NOCPG data provided by its customers that the customers had purchased from SPINS, IRI, and Nielsen. [Id. at ¶¶ 38, 45]. By 2020, there were at “least four independent competitors” aside from SPINS and IRI in the data analytics market-Crownalytics and non-parties TABS Analytics, Red Fox Analytics, and Bedrock Analytics. [Id. at ¶ 38]. At this time, Crownalytics and SPINS “had an extremely collaborative relationship.” [Id. at ¶ 49].
However, in the middle of 2021, “both IRI and SPINS suddenly and simultaneously moved to restrict third-party data analytics services providers'-including Crownalytics's-access to their databases.” [Id. at ¶ 52]; see also [id. at ¶¶ 53-67]. Specifically, on May 5, 2021, IRI sent Crownalytics a cease-and-desist letter demanding that Crownalytics immediately discontinue all use of IRI data. [Id. at ¶ 55]. Plaintiff alleges that it responded to the cease-and-desist letter “informing IRI that it had not engaged in any of the wrongdoing alleged in that letter,” but that it would comply with IRI's request.[3][Id. at ¶ 56]. And around that time, SPINS created a new “partnership model” wherein customers who purchased data from SPINS but who planned to engage third-party data analytics firms to analyze the data “would only be permitted to purchase static ‘extracts' of those data to share with their chosen data analytics provider.” [Id. at ¶¶ 57, 59]. These extracts would include inferior data and would be priced to significantly increase the cost to the customer using a competing data analytics company. [Id.]. Crownalytics alleges that these extracts are “virtually useless” for the services performed by third-party data analytics firms. [Id. at ¶ 61]. It further alleges that if customers wanted to “avoid this degradation in data access and increase in data analysis cost,” [id. at ¶ 65], “all the customer ha[d] to do [was] switch to SPINS as its data analytics services provider.” [Id. at ¶ 64].
As a result of this alleged anticompetitive conduct, customers were “coerced to leave Crownalytics” and potential new customers opted not to engage Crownalytics. [Id. at ¶ 69].
Customers began using SPINS for data analytics services, and SPINS began charging prices that were “much higher” than Crownalytics had charged. [Id. at ¶ 76]. Defendants' actions have caused companies to exit the data analytics market, “leaving customers with only Defendants as their choices for data analytics services.” [Id. at ¶ 79].
Crownalytics initiated this civil action on May 23, 2022 against SPINS, DAAP, and IRI. See generally [id.]. Plaintiff asserts ten causes of action in this case: (1) a group boycott claim under § 1 of the Sherman Act against all Defendants (“Claim One”), [id. at ¶¶ 88-107]; (2) a unilateral refusal-to-deal claim under § 2 of the Sherman Act against SPINS (“Claim Two”), [id. at ¶¶ 108-20]; (3) a unilateral refusal-to-deal claim under § 2 of the Sherman Act against IRI (“Claim Three”), [id. at ¶¶ 121-33]; (4) a tying claim under §§ 1 and 2 of the Sherman Act against all Defendants (“Claim Four”), [id. at ¶¶ 134-48]; (5) a conspiracy to monopolize claim under § 2 of the Sherman Act against all Defendants (“Claim Five”), [id. at ¶¶ 149-59]; (6) a group boycott and concerted refusal to deal claim under the Colorado Antitrust Act (“CAA”) against all Defendants (“Claim Six”), [id. at ¶¶ 160-62]; (7) a unilateral refusal to deal claim under the CAA against SPINS and IRI (“Claim Seven”), [id. at ¶¶ 163-66]; (8) a tying claim under the CAA against all Defendants (“Claim Eight”), [id. at ¶¶ 166-68]; (9) a claim for tortious interference with existing and prospective business relationships against SPINS (“Claim Nine”), [id. at ¶¶ 16981]; and (10) a breach of contract claim against SPINS (“Claim Ten”), [id. at ¶¶ 182-94]. Plaintiff seeks injunctive and monetary relief. See generally [id. at 37].[4] On July 8, 2022, SPINS and DAAP jointly moved to dismiss all claims against them in this case, see [Doc. 40 (the “SPINS Motion to Dismiss”)], as did IRI. See [Doc. 42 the (“IRI Motion to Dismiss”)]. The Honorable Raymond P. Moore referred the Motions to Dismiss to the Honorable S. Kato Crews for recommendation. See [Doc. 43].[5]On March 3, 2023, Judge Crews issued a Recommendation on the Motions to Dismiss. See [Doc. 74]. Judge Crews recommends that each Motion be granted in part and denied in part; specifically, he recommends that the Motions be granted insofar as they seek dismissal of Claims Two, Three, Seven, and Nine. [Id. at 13-14, 19-21]. However, he also concludes that Plaintiff adequately alleges facts supporting the remaining six claims and recommends that the Motions to Dismiss be denied to the extent they request dismissal of those claims. [Id. at 5-19, 21-22].
All Defendants objected to Judge Crews's Recommendation, [Doc. 77; Doc. 78], but Crownalytics did not. On March 31, 2023, Crownalytics filed Plaintiff's Consolidated Response to Defendants' Objections to the Magistrate Judge's Recommendation on Defendants' Motions to Dismiss [Doc. 81]. The Court addresses the Parties' arguments below.
The Court first briefly addresses those portions of the Recommendation to which no objections have been filed. The Recommendation states that objections must be filed within fourteen days after service on the Parties. See [Doc. 74 at 23]; see also 28 U.S.C. § 636(b)(1)(C). The Recommendation was served on March 3, 2023. See ...
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