United States District Court, D. Delaware
W. Shaw, Esq., Andrew E. Russell, Esq., and Nathan R.
Hoeschen, Esq., Shaw Keller LLP, Wilmington, DE; David Boies,
Esq., Boies Schiller Flexner LLP, Armonk, NY; James P.
Denvir, Esq., Amy J. Mauser, Esq., Christopher G. Renner,
Esq., Michael S. Mitchell Esq., Jonathan Shaw, Esq., and
William Bloom, Esq., Boies Schiller Flexner LLP, Washington,
D.C. Attorneys for Plaintiff International Construction
J. Baldwin, Esq. and Ryan C. Cicoski, Esq., Potter Anderson
& Corroon LLP, Wilmington, DE; Robert G. Abrams, Esq.,
Gregory J. Commins, Jr., Esq., Danyll W. Foix, Esq., and
Carey S. Busen, Esq., Baker & Hostetler LLP, Washington,
D.C. Attorneys for Defendant Caterpillar Inc Henry E.
Gallagher, Jr., Esq., Connolly Gallagher LLP, Wilmington, DE;
Quentin R Wittrock, Esq. and Richard C. Landon, Esq., Gray
Plant Mooty, Minneapolis, MN. Attorneys for Associated
Auction Services, LLC and Ziegler Inc.
S. Kraft, Esq. and Brian A. Biggs, Esq., DLA Piper LLP US,
Wilmington, DE; David H. Bamberger, Esq., DLA Piper LLP US,
Washington, D.C; Adam I. Steene, Esq., DLA Piper LLP US, New
York, NY. Attorneys for Komatsu America Corp.
Duncan Grant, Esq. and James H. S. Levine, Esq., Pepper
Hamilton LLP, Wilmington, DE; Jeremy Heep, Esq., Robin P.
Sumner, Esq., and Melissa Hatch O'Donnell, Esq., Pepper
Hamilton LLP, Philadelphia, PA. Attorneys for Defendant
Thompson Tractor Company, Inc.
Dominick T. Gattuso, Esq., Heyman Enerio Gattuso &
Hirzel, LLP, Wilmington, DE 19801; Niels P. Murphy, Esq.,
Gerry A. Giurato, Esq., and Murphy & Anderson, PA,
Jacksonville, FL. Attorneys for Defendant Ring Power
ANDREWS, U.S. DISTRICT JUDGE.
International Construction Products LLC ("ICP")
asserts claims against defendants Caterpillar Inc., Komatsu
America Corp., Associated Auction Services LLC, Ziegler Inc.,
Thompson Tractor Company, Inc., and Ring Power Corporation
for antitrust violations under the Sherman Act § 1
(Counts 1-2) and for tortious interference, civil conspiracy,
and aiding and abetting tortious conduct under state law
(Counts 3-10). (D.I. 162). Presently before the Court are
Defendants' motions to dismiss the second amended
complaint. (D.I. 180, D.I. 182, D.I. 183, D.I. 188, D.I. 190,
D.I. 191, D.I. 194). All Defendants request dismissal
pursuant to Fed.R.Civ.P. 12(b)(6) for failure to state a
claim. In addition, Ziegler, Thompson Tractor, and Ring Power
request dismissal pursuant to Fed.R.Civ.P. 12(b)(2) for lack
of personal jurisdiction. For the reasons set forth herein,
the motions to dismiss filed by Associated Auction Services,
Ziegler, Thompson Tractor, and Ring Power are granted, and
the motions to dismiss filed by Caterpillar and Komatsu are
granted in part and denied in part.
initiated this action on January 29, 2015. In the original
complaint, ICP asserted antitrust and state law claims
against Caterpillar, Komatsu, Volvo Construction Equipment
North America, LLC, and Associated Auction Services. (D.I. 1
at ¶¶ 1, 113-52). The antitrust claims arose under
Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1
and 2, and Sections 3 and 7 of the Clayton Act, 15 U.S.C.
§§ 14 and 18.
April 2015, the Defendants filed a motion to dismiss the
original complaint, which I granted on January 21, 2016.
(D.I. 27, D.I. 28, D.I. 30, D.I. 33). The counts based on the
Sherman Act § 1, Clayton Act § 3, and state law
were dismissed without prejudice. But the counts based on the
Sherman Act § 2 and Clayton Act § 7 were dismissed
with prejudice. (D.I. 45, D.I. 46).
February 4, 2016, ICP filed a motion for reconsideration and
leave to amend. (D.I. 49). ICP proposed to amend the
complaint as to the claims dismissed without prejudice and
asked the court to reconsider its dismissal of claims with
prejudice. Defendants opposed the motion for reconsideration
and filed a motion to dismiss the amended complaint. (D.I.
54). On August 22, 2016, 1 denied the motion for
reconsideration and granted in part and denied in part the
motion to dismiss. (D.I. 64, D.I. 65). Specifically, I did
not dismiss the group boycott claims under the Sherman Act
§ 1 but did dismiss the exclusive dealing claims under
the Sherman Act § 1 and all claims under the Clayton Act
§ 3. (D.I. 64, D.I. 65).
February 24, 2017, I entered a scheduling order that provided
for phased discovery. (D.I. 95). Phase I, which was completed
by August 24, 2017, included discovery into the "alleged
agreement to boycott IronPlanet." (Id. at
¶ 3(a)(i); D.I. 115). On August 25, 2017, the day after
the close of Phase 1 discovery, ICP filed a motion for leave
to file a second amended complaint. (D.I. 123). The second
amended complaint dropped Volvo as a defendant but added Ring
Power, Ziegler, and Thompson Tractor. (D.I. 123-3 at 1).
Volvo was formally dismissed from the case by stipulation on
December 1, 2017. (D.I. 147). On September 26, 2018, 1
granted the motion for leave over Defendants' objections,
and ICP filed its second amended complaint that same day.
(D.I. 139, D.I. 160, D.I. 161, D.I. 162).
The Relevant Market and Players
antitrust claims are concerned with the market for "new
heavy construction equipment." (D.I. 162 at ¶ 29).
ICP imports into and distributes in the United States new
heavy construction equipment made by foreign manufacturers.
(Id. at ¶ 61). Caterpillar and Komatsu (the
"Manufacturer Defendants") are in the business of
manufacturing new heavy construction equipment. (Id.
at ¶¶ 8-9, 28). Historically, new heavy
construction equipment is sold to end users through local
equipment dealers. (Id. at ¶¶ 22-23, 36).
Ziegler, Ring Power, and Thompson Tractor (the "Dealer
Defendants") are three of the forty-eight Caterpillar
equipment dealers located in the United States. (Id.
at ¶¶ 11-13, 46).
addition to selling new heavy construction equipment through
their local dealerships, the Dealer Defendants sell used
heavy construction equipment through consignment with online
marketplaces. The second amended complaint identifies
Associated Auction Services, IronPlanet, Ritchie Brothers,
and EquipmentOne as online marketplaces for the sale of used
heavy construction equipment. (Id. at ¶¶
10, 55, 57, 70). IronPlanet is the largest online marketplace
in the United States for the sale of used heavy construction
equipment and, according to ICP, offers features for which
the other online marketplaces are not adequate substitutes.
(Id. at ¶¶ 50, 54-55). Although Associated
Auction Services is owned in part by Caterpillar and some of
its equipment dealers, Caterpillar's equipment dealers
are not required to use Associated Auction Services for
consignments of used equipment. (Id. at ¶¶
10, 47). Indeed, less than a quarter of the Caterpillar
equipment dealers located in the United States use Associated
Auction Services exclusively for the disposal of their used
heavy construction equipment. (Id. at ¶ 89).
Some Caterpillar equipment dealers, including the Dealer
Defendants, use IronPlanet to sell used heavy construction
equipment. (Id. at ¶ 47).
ICP Enters the Relevant Market
2013, ICP contracted with Lonking Holdings Ltd., a Chinese
manufacturer of new heavy construction equipment, to serve as
Lonking's master distributor in the United States. (D.I.
162 at ¶¶ 65, 97). ICP planned to sell the new
equipment directly to end users through ICPDirect.com, an
internet store that would be hosted and supported by
IronPlanet. (Id. at ¶ 66). On March 3, 2014,
ICP and IronPlanet signed a services agreement, called a
Hosted Site Agreement, which memorialized the plan.
(Id. at ¶ 69). ICP announced its partnership
with IronPlanet the same day. (Id. at ¶ 74).
Because IronPlanet operated exclusively in the used equipment
market, its agreement with ICP was its first and only foray
into the new equipment market. (Id. at ¶ 70).
Thus, the only new equipment that would be available on
IronPlanet would belong to ICP. As the complaint
acknowledges, "The Manufacturer Defendants and the
Dealer Defendants do not themselves sell new heavy
construction equipment through IronPlanet, and had no
interest in competing with ICP to do so." (Id.
at ¶ 112).
IronPlanet and Associated Auction Services Merge
Auction Services and IronPlanet have held merger discussions
in the past. (D.I. 162 at ¶ 87). These merger
discussions were renewed in February 2014, before ICP
announced its partnership with IronPlanet. (Id. at
¶ 85). Associated Auction Services is owned in part by
Caterpillar and some of its equipment dealers, including
Ziegler. (Id. at ¶¶ 10-13). IronPlanet is
owned in part by the Manufacturer Defendants, another
manufacturer, venture capital firms, and certain Caterpillar
dealers, including Ring Power. (Id. at ¶ 119).
Caterpillar, Komatsu, and Ring Power were minority investors
in IronPlanet. (Id. at ¶ 60). In 2015,
Associated Auction Services and Iron Planet completed the
merger. (Id. at ¶ 10).
to second amended complaint, Caterpillar wanted to block
ICP's entry as a competitor into the market for new heavy
construction equipment by forcing IronPlanet to discontinue
its relationship with ICP. (D.I. 162 at ¶¶ 97,
101). To achieve this goal, Caterpillar used two tools: the
consignment of used heavy construction equipment by its
equipment dealers and a potential merger with Associated
Auction Services. According to ICP, Caterpillar's
equipment dealers would withhold or consign used heavy
construction equipment as a stick or carrot respectively, to
induce IronPlanet to end its business relationship with ICP.
(Id. at ¶ 102). In addition, Caterpillar would
either force the merger to bring IronPlanet under its control
or threaten to block the merger, which was a transaction
IronPlanet desired. (Id. at ¶¶ 101-102).
Finally, the Dealer Defendants agreed to join the conspiracy
because Caterpillar requires exclusivity from its dealers,
and Associated Auction Services joined the conspiracy because
it is owned by Caterpillar and some of its equipment dealers.
(Id. at ¶ 131). The complaint does not
elaborate on Komatsu's role in the conspiracy.
Nevertheless, the complaint alleges that it agreed to
participate in the conspiracy to protect its investments in
IronPlanet. (Id. at ¶ 121).
STANDARD OF REVIEW
Rule 12(b)(6), a party may move to dismiss a complaint for
failure to state a claim upon which relief can be granted.
Fed.R.Civ.P. 12(b)(6). To survive the motion to dismiss, the
complaint must contain sufficient factual matter "to
state a claim to relief that is plausible on its face."
Ashcroft v. Iqbal,556 U.S. 662, 677-78 (2009)
(quoting Bell Atl. Corp. v. Twombly,550 U.S. 544,
570 (2007)). The factual allegations do not have to be
detailed, but they must provide more than labels,
conclusions, or a "formulaic recitation" of the
claim elements. Twombly, 550 U.S. at 555. In
assessing the plausibility of a claim, the court must accept
all well-pleaded factual allegations in the complaint as true
and draw all reasonable inferences in favor of the plaintiff.
In re Rockefeller Ctr. Prop., Inc. Sec. Litig., 311
F.3d 198, 215 (3d Cir. 2002). The court's review ...