Spinner Consulting LLC v. Stone Point Capital LLC

• Decision Date: 13 April 2021
• Docket Number: No. 20-3355,20-3355
• Parties: SPINNER CONSULTING LLC, Plaintiff-Appellant, v. STONE POINT CAPITAL LLC, Defendant-Appellee.
• Court: U.S. Court of Appeals — Second Circuit

SPINNER CONSULTING LLC, Plaintiff-Appellant, v. STONE POINT CAPITAL LLC, Defendant-Appellee.

No. 20-3355

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

April 13, 2021

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT'S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION "SUMMARY ORDER"). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 13^th day of April, two thousand twenty-one.

PRESENT: RICHARD C. WESLEY, SUSAN L. CARNEY, WILLIAM J. NARDINI, Circuit Judges.

FOR PLAINTIFF-APPELLANT:

WILLIAM DUNNEGAN (Laura Scileppi, on the brief), Dunnegan & Scileppi LLC, New York, NY.

FOR DEFENDANT-APPELLEE:

JONATHAN M. HERMAN (Kaleb McNeely, on the brief), Dorsey & Whitney LLP, New York, NY.

Appeal from a judgment of the United States District Court for the District of Connecticut (Arterton, J.).

UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the judgment entered on September 30, 2020, is AFFIRMED.

Spinner Consulting LLC ("Spinner") appeals from the dismissal of its complaint alleging that Stone Point Capital LLC ("Stone Point"), a private equity firm, participated in a conspiracy to fix the price of certain bankruptcy support services. Spinner alleges that Stone Point caused one of its funds to acquire a controlling stake in Bankruptcy Management Solutions, Inc. ("BMS"), in order to participate in a previously established horizontal price-fixing conspiracy between BMS and its competitors in the bankruptcy support services market, and that Stone Point subsequently directed BMS's continued participation in the alleged conspiracy. We assume the parties' familiarity with the underlying facts, procedural history, and arguments on appeal, to which we refer only as necessary to explain our decision to affirm.

To state a price-fixing conspiracy claim under section one of the Sherman Act, plaintiffs must plead "enough factual matter (taken as true) to suggest that an agreement was made." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007).¹ To meet this requirement and state a "plausible" claim to relief, "an allegation of parallel conduct and a bare assertion of conspiracy will not suffice." Id. The parallel conduct "must be placed in a context that raises a suggestion of a preceding agreement." Id. at 557. The same is true for antitrust claims brought under Connecticut and California law. See Conn. Gen. Stat. § 35-44b ("It is the intent of the General Assembly that in construing sections 35-24 to 35-46, inclusive, the courts of this state shall be guided by interpretations given by the federal courts to federal antitrust statutes."); Reserve Realty, LLC v. Windemere Reserve, LLC, 335 Conn. 174, 185-86 (2020) (explaining that § 35-26 "was patterned after federal antitrust law" and that, asdirected by Conn. Gen. Stat. § 35-44b, the court would analyze a § 35-26 claim based upon the law governing claims under Sherman Act § 1); Name.Space, Inc. v. Internet Corp. for Assigned Names & Numbers, 795 F.3d 1124, 1131 n.5 (9th Cir. 2015) (affirming dismissal of Cartwright Act claim based upon proper dismissal of Sherman Act horizontal conspiracy claim because "the analysis under the Cartwright Act is identical to that under the Sherman Act"); In re Auto. Antitrust Cases I & II, 204 Cal. Rptr. 3d 330, 351 n.15 (Cal. Ct. App. 2016) ("In antitrust actions brought under the Cartwright Act, we look to interpretations of its federal law counterpart, the Sherman Antitrust Act . . . .").

On de novo review, we conclude that Spinner's complaint fails to plausibly allege Stone Point's participation in a horizontal price-fixing conspiracy. Spinner's complaint is devoted almost entirely to describing the conduct of BMS and its competitors. It outlines a price-fixing conspiracy allegedly begun by BMS and its competitors sometime before 2011, and claims that Stone Point learned of and chose to join the conspiracy by acquiring BMS between May 2016 and April 2017. Spinner's primary non-conclusory allegation regarding Stone Point is that Stone Point directed BMS to continue using the pricing model purportedly established as part of the conspiracy between BMS and its competitors—and which had been in place for approximately six years before Stone Point's acquisition of BMS.²

Even assuming arguendo...