A corporation engaged in the business of shipping and transporting bulk liquid chemicals brought an action to recover damages incurred as a result of defendants’ alleged conspiracy to, among other things, fix the price of international shipments of liquid chemicals, allocate customers, rig bids, and eliminate competitors, including plaintiff, by targeting their customers and employing predatory pricing tactics in violation of Section 1 of the Sherman Antitrust Act. Plaintiff commenced the lawsuit after filing for bankruptcy.
Defendants moved to dismiss the complaint on multiple grounds, including that plaintiff lacked standing to pursue the claims and that plaintiff failed to sufficiently state a claim for predatory pricing. Defendants argued that because plaintiff was not a customer of defendants and did not compete in the same market as defendants it lacked standing under the antitrust laws. While recognizing that the plaintiff operated in an entirely different geographical region than the defendants, the court rejected the argument because the complaint alleged that the conspiracy covered “the entire parcel tanker industry.” The court reasoned that facts obtained in discovery could enable the plaintiff to show “interconnectedness” between the routes plaintiff operated and the routes defendants operated. Accordingly, dismissal at the pleading stage was not warranted.
Defendants’ challenge to plaintiff’s predatory pricing claim was also found to be deficient. Defendants based their argument on plaintiff’s failure to plead that (i) defendants’ set their prices below their “average variable costs”, and (ii) there was a likelihood that defendants would be able to recoup such costs later on. While the court found support for defendants’ position in the recent United States Supreme Court decision in Weyerhauser Co. v. Ross-Simmons Hard-Wood Lumber, Co., No. 05-381 549 U.S. ___ (2007), it ruled that the burden defendants sought to impose on plaintiff, even after Weyerhauser, did not apply at the pleading stage. Accordingly, after noting that a heavier burden would arise at the summary judgment stage, the court ruled that plaintiff was not required to allege the specific terms of the defendants’ alleged predatory pricing in the complaint and denied the motion to dismiss the claim. (In re Parcel Tanker Shipping Services Antitrust Litigation, 2007 WL 1346921 (D. Conn. May 4, 2007))