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Gn Netcom, Inc. v. Plantronics, Inc.

United States District Court, Third Circuit

September 23, 2013

GN NETCOM, INC., Plaintiff,

Joseph J. Farnan, Jr., Esq., Brian E. Farnan, Esq., Michael J. Farnan, Esq., FARNAN LLP, Wilmington, DE, Christopher S. Finnerty, Esq., Jeffrey S. Patterson, Esq., Michael R. Murphy, Esq., Morgan T. Nickerson, Esq., NELSON MULLINS RILEY & SCARBOROUGH, LLP, Boston, MA, Attorneys for Plaintiff GN Netcom, Inc.

Richard L. Horwitz, Esq., John A. Sensing, Esq., POTTER ANDERSON & CORROON LLP, Wilmington, DE, Jonathan M. Jacobson, Esq., Chul Pak, Esq., David H. Reichenberg, Esq., Robert Corp, Esq., WILSON SONSINI GOODRICH & ROSATI PC, New York, NY, Attorneys for Defendant Plantronics, Inc.


LEONARD P. STARK, District Judge.

Plaintiff GN Netcom, Inc. ("GN" or "Plaintiff") filed this action on October 12, 2012, accusing Defendant Plantronics, Inc. ("Plantronics"or "Defendant") of monopolization, attempted monopolization, restraint of trade, and tortious interference with business relations. (D.I. 1) On December 5, 2012, Plantronics moved to dismiss the Complaint under Rule 12(b)(6) for failure to state a claim. (D.I. 8) The Court conducted a hearing on June 24, 2013. (D.I. 19) (hereinafter "Tr.") For the reasons set forth below, the Court will deny Plantronics' motion.


The sufficiency of pleadings for non-fraud cases is governed by Rule 8 of the Federal Rules of Civil Procedure, which requires "a short and plain statement of the claim showing that the pleader is entitled to relief" When presented with a Rule 12(b)(6) motion to dismiss for failure to state a claim, the Court is required to conduct a two-part analysis. See Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir. 2009). First, the Court separates the factual and legal elements of a claim, accepting "all of the complaint's well-pleaded facts as true, but [disregarding] any legal conclusions." Id. at 210-11. This first step requires the Court to draw all reasonable inferences in favor of the non-moving party. See Maio v. Aetna, Inc., 221 F.3d 472, 500 (3d Cir. 2000). However, the Court is not obligated to accept as true "bald assertions, " Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997) (internal quotation marks omitted), "unsupported conclusions and unwarranted inferences, " Schuylkill Energy Res., Inc. v. Pennsylvania Power & Light Co., 113 F.3d 405, 417 (3d Cir. 1997), or allegations that are "self-evidently false, " Nami v. Fauver, 82 F.3d 63, 69 (3d Cir. 1996).

Second, the Court must determine "whether the facts alleged in the complaint are sufficient to show that the plaintiff has a plausible claim for relief.' Fowler, 578 F.3d at 211 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 556 U.S. at 678. This is a context-specific determination, requiring the Court "to draw on its judicial experience and common sense." Id. at 679. At bottom, "[t]he complaint must state enough facts to raise a reasonable expectation that discovery will reveal evidence of [each] necessary element" of a claim. Wilkerson v. New Media Tech. Charter Sch. Inc., 522 F.3d 315, 321 (3d Cir. 2008) (internal quotation marks omitted).

"[W]hen the allegations in a complaint, however true, could not raise a claim of entitlement to relief, this basic deficiency should... be exposed at the point of minimum expenditure of time and money by the parties and the court." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 558 (2007) (internal quotation marks omitted). Finally, although a non-fraud claim need not be pled with particularity or specificity, that claim must "give the defendant fair notice of what the... claim is and the grounds upon which it rests." Id. at 555.


With respect to the monopolization and attempted monopolization claims, Plantronics contends that GN has failed to: (1) allege an antitrust injury; and (2) properly define the relevant market. For the restraint of trade claim, Plantronics alleges that GN has failed to allege any anticompetitive conduct. Plantronics also contends that GN has not stated a claim for tortious interference.

A. Antitrust Injury

In order to sue for an antitrust violation, a plaintiff must demonstrate that it has suffered an antitrust injury. See Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977). To establish an antitrust injury, a plaintiff must show: "(1) harm of the type the antitrust laws were intended to prevent; and (2) injury to the plaintiff that flows from that which makes the defendant's acts unlawful." Race Tires America, Inc. v. Hoosier Racing Tire Corp., 614 F.3d 57, 76 (3rd Cir. 2010); see also Brunswick, 429 U.S. at 489.

1. Harm

An "[a]ntitrust analysis must always be attuned to the particular structure and circumstances of the industry at issue." ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254, 283 (3d Cir. 2012). As such, the Court begins its analysis by examining the industry in which the parties compete, taking as true the well-pleaded factual allegations of the Complaint. The Complaint alleges a specialized market for headsets sold to Contact Centers in the United States. (Complaint at ¶ 6) Plantronics' headsets currently account for over 75% of headset sales in this market. ( Id. at ¶ 26) According to GN, a "vast majority" of Contact Centers purchase their headsets through a limited network of approximately 20 ...

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