D.R. Ward Const. Co. v. Rohm and Haas Co.

• Decision Date: 30 May 2006
• Docket Number: No. MDL NO. 1684.,No. 2:05-CV-4157-LDD.,MDL NO. 1684.,2:05-CV-4157-LDD.
• Citation: 470 F.Supp.2d 485
• Parties: D.R. WARD CONSTRUCTION CO., et al., Plaintiffs v. ROHM AND HAAS CO., et al., Defendants.
• Court: U.S. District Court — Eastern District of Pennsylvania

470 F.Supp.2d 485

D.R. WARD CONSTRUCTION CO., et al., Plaintiffs v. ROHM AND HAAS CO., et al., Defendants.

No. MDL NO. 1684.

No. 2:05-CV-4157-LDD.

United States District Court, E.D. Pennsylvania.

May 30, 2006.

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Krishna B, Narine, Law Office of Krishna B. Narine, Elkins Park, PA, for Plaintiffs Pro se.

Stephen W. Armstrong, Montgomery Mccracken Walker & Rhoads LLP, Steven E. Bizar, Buchanan Ingersoll, P.C., Peter Breslauer, Montgomery Mccracken Walker & Rhoads LLP, Philadelphia, PA, Jeremy J. Calsyn, Cleary Gottlieb Steen & Hamilton, LLP, Washington, DC, Andre L. Dennis, Stradley, Ronon, Stevens & Young LLP, Nancy J. Gellman, Conrad O'Brien Gellman & Rohn PC, Phila, John G. Harkins, Jr., Harkins Cunningham, Philadelphia, PA, Alan Kanzer, Alston & Bird LLP (N.Y.), Torsten M. Kracht, Alston & Bird LLP, New York City, Wayne A. Mack, Duane Morris LLP, Thomas J. McGarrigle, Lathrop B. Nelson, III, Montgomery McCracken Walker and Rhoads, L.L.P., Valerie Brand Pipano, Reed Smith LLP, Steven A. Reed, Harkins Cunningham, Philadelphia, PA, Brian E. Roof, Frantz Ward LLP, Cleveland, OH, Richard L. Scheff, Montgomery Mccracken Walker & Rhoads LLP, Howard D. Scher, Buchanan Ingersoll, PC, Colleen Healy Simpson, Harkins Cunningham LLP, Francis X. Taney, Jr., Buchanan Ingersoll PC, Catherine N. Walto, Rawle & Henderson LLP, Philadelphia, PA, for Defendants.

MEMORANDUM OPINION

DAVIS, District Judge.

Presently before the Court are defendants' joint motion to dismiss the second amended indirect purchaser complaint (Doc. No. 16), plaintiffs' brief in opposition (Doc. No. 28), and defendants' response thereto (Doc. No. 33). For the following reasons, this Court grants defendants' motion in part and denies defendants' motion in part.

I. Factual and Procedural History

This action was commenced by complaint on August 4, 2005. (Doc. No. 1). On March 1, 2006, plaintiffs D.R. Ward Construction, Anna C. Furney, and David Pearman ("plaintiffs"), indirect purchasers of products containing plastics additives, filed a second amended complaint on behalf of an alleged class of Arizona, Tennessee, and Vermont entities that indirectly purchased plastics additives from defendants, various manufacturers and distributors of plastics additives, between January 1990 and January 2003. (See Second Am. Compl., Doc. No. 24, at ¶¶ 1, 34). Plaintiffs allege that defendants conspired to fix, maintain, or stabilize the price of plastics additives and to allocate markets in Arizona, Tennessee, and Vermont for the sale of plastics additives. (See Second Am. Compl., at ¶¶ 2, 25-27, 48, 55, 67). Plaintiffs assert causes of action under the antitrust statutes of Arizona,¹ Tennessee,² and Vermont ("state antitrust claims"),³ and under the common law theory of unjust enrichment. (Id., at ¶¶ 47-75).

II. Discussion

Defendants' motion to dismiss consists of three primary arguments. First, defendants argue that plaintiffs lack standing to bring their state antitrust claims; defendants reason that the Supreme Court's standing analysis in Associated Gen. Contractors, Inc. v. California State Council of Carpenters, 459 U.S. 519, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983) (hereafter "AGC "), applies to plaintiffs' state antitrust claims, and that the injury suffered by plaintiffs, as indirect purchasers, is to remote to satisfy this standing analysis. (See Def. Br., at 4-15). Second, defendants argue that plaintiffs' antitrust claim under. Tennessee law fails as a matter of law because plaintiffs' second amended complaint lacks factual allegations to indicate that Tennessee commerce was substantially impacted by defendants' conduct. (Id., at 15-17). Third, defendants argue that plaintiffs fail to state a claim for unjust enrichment under Arizona, Tennessee, and Vermont law for a variety of reasons, including the failure to allege a direct benefit, the failure to allege a causal relationship between the conferral of the benefit and the detriment to plaintiffs, and the derivative (if not parasitic) relationship between an unjust enrichment claim based upon antitrust conduct and a state antitrust claim. (Id., at 18-22).

A. Characterization of Motion

Defendants' motion to dismiss is properly styled a Rule 12(b)(6) motion to dismiss. See, e.g., Maio v. Aetna, Inc., 221 F.3d 472, n. 7 (3d Cir.2000) (treating motion to dismiss for lack of antitrust standing as Rule 12(b)(6) motion); In re Warfarin Sodium Antitrust Litig., 214 F.3d 395, 397-399 (3d Cir.2000) (evaluating antitrust standing under Rule 12(b)(6) rubric). Under Rule 12(b)(6), defendants bear the burden of showing that no claim has been stated. See Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir.1991). Thus, a Rule 12(b)(6) motion may be granted only when it is clear, after allocating the burden of proof, that plaintiff can prove no set of facts in support of the claim which would entitle her to relief. See Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Robb v. City of Philadelphia, 733 F.2d 286, 290 (3d Cir.1984). In applying this standard, this Court "must take all the well pleaded allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the pleadings, the plaintiff may be entitled to relief." Colburn v. Upper Darby Township, 838 F.2d 663, 665-66 (3d Cir.1988). However, this Court need not credit bald assertions or legal conclusions in deciding a motion to dismiss. See, e.g., Morse v. Lower Merion School Dist., 132 F.3d 902, 907 (3d Cir. 1997).

B. State Antitrust Claims

Defendants contend that plaintiffs' claims under the AAA, the TTPA, and the VCFA fail as a matter of law for lack of prudential antitrust standing, based upon the Supreme Court's analysis in AGC, 459 U.S. 519, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983). (See Def. Br., at 4-15). Defendants also argue that plaintiffs' claim under the TTPA must be dismissed for the additional reason of failing to allege a substantial effect on Tennessee trade or commerce. (Id., at 15-18).

1. Standing

The question of whether a plaintiff has standing to bring a cause of action in federal court is a jurisdictional issue, a "threshold question in every federal case." Warth v. Seldin, 422 U.S. 490, 498, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975). Standing to sue in federal court is a "federal question." Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 804, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985). The resolution of this federal question presents a different analysis than the question of whether a party has standing to sue in state court. Id. Thus, even when a federal court sits in diversity jurisdiction, a plaintiff must meet the federal, standing requirement. See, e.g., Wheeler v. Travelers Ins. Co., 22 F.3d 534, 537 (3d Cir.1994); Federal Kemper Ins. Co. v. Rauscher, 807 F.2d 345, 352 (3d Cir.1986) (noting that "question of justiciability" of claim under state law "is a federal issue to be determined only by federal law").

The concept of standing is composed of constitutional and prudential considerations. To achieve standing, a plaintiff "must satisfy both the case and controversy requirements of Article III of the [United States] Constitution and certain prudential requirements." See, e.g., Wheeler, 22 F.3d at 537.

a. Constitutional Standing

The constitutional dimension of the standing doctrine ensures that a party has an actual "case or controversy" to meet the justiciability demands of Article III. To satisfy the constitutional requirements for standing, a plaintiff must allege: (1) injury in fact; (2) a causal nexus between the injury and the challenged conduct; and (3) the likelihood that a favorable judicial decision will redress the injury. See, e.g., Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992); Joint Stock Society v. UDV North America, Inc., 266 F.3d 164, 175 (3d Cir. 2001). These requirements ensure that a plaintiff has a "personal stake" in the outcome of the proceedings. See, e.g., Simon v. Eastern Ky. Welfare Rights Org., 426 U.S. 26, 38-40, 96 S.Ct. 1917, 48 L.Ed.2d 450 (1976).

This Court finds that, when read in a light most favorable to plaintiffs, the allegations in plaintiffs' amended complaint meet the standard for constitutional standing, the "`irreducible constitutional minimum' of standing." Trump Hotels & Casino Resorts, Inc. v. Mirage Resorts, Inc., 140 F.3d 478, 484 (3d Cir.1998). Plaintiffs allege that they paid inflated prices for products with plastics additives due to an overcharge on plastics additives which was passed on to them from the intervening links within the distribution chain, that plaintiffs' overpayment for products containing plastics additives was caused by the conspiracy among defendants to charge inflated prices for plastics additives, and that judicial relief will compensate plaintiffs for these injuries, restoring plaintiffs to the position they were in prior to the price-fixing scheme. (See Second Am. Compl., at ¶¶ 1-2, 25-28, 47-72); see, e.g., AGC, 459 U.S. at 535 n. 31, 103 S.Ct. 897 (distinguishing between prudential and constitutional standing requirements and noting that any harm to the antitrust plaintiff "is sufficient to satisfy the constitutional standing requirement of injury in fact"). Tellingly, defendants do not assert that plaintiffs lack constitutional standing, but, instead, limit their argument in favor of dismissal to plaintiffs' failure to meet prudential standing considerations.

b. Prudential Standing

The doctrine of prudential standing augments the constitutional dimensions, of standing in federal court. Prudential standing consists of "`a set of judge-made rules forming an integral part of judicial self-government.'" See, e.g., Joint Stock Soc'y v. UDV North America, Inc., 266 F.3d 164, 179 (3d Cir.2001). These rules...