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4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE
9 10 RAMON DIEGO DIEGO, CASE NO. C21-0304JLR 11 Plaintiff, ORDER v. 12 APOORVA META, et al., 13 Defendants. 14
15 I. INTRODUCTION 16 Before the court are (1) pro se Plaintiff Ramon Diego Diego’s complaint against 17 Apoorva Meta, Maplebear Incorporated (“Instacart”), Timothy Cook, Apple Corporation 18 (“Apple”), Sundar Pichai, Sundar Pichai Alphabet Corporation (“Google”), The Kroger 19 Company (“Kroger”), and Costco Wholesale Corporation (“Costco”) (collectively, 20 “Defendants”) (Compl. (Dkt. # 4)); and (2) Magistrate Judge Brian A. Tsuchida’s order 21 granting Mr. Diego Diego in forma pauperis (“IFP”) status and recommending that the 22 court reviews this action pursuant to 28 U.S.C. § 1915(e)(2)(B) (IFP Order (Dkt. # 3)). 1 Under 28 U.S.C. § 1915(e), courts have authority to review IFP complaints and must 2 dismiss them if, “at any time,” a complaint is determined to be frivolous, malicious, fails 3 to state a claim on which relief may be granted, or seeks monetary relief from a defendant
4 who is immune from such relief. 28 U.S.C. § 1915(e)(2). As discussed below, Mr. 5 Diego Diego’s complaint falls within the category of pleadings that fail to state a claim. 6 Accordingly, the court DISMISSES Mr. Diego Diego’s complaint with leave to amend. 7 II. BACKGROUND 8 Mr. Diego Diego brings suit against Defendants for violating §§ 1 and 2 of the
9 Sherman Antitrust Act, 15 U.S.C. §§ 1 et seq. (“Sherman Act”). (See Compl.) Mr. Diego 10 Diego alleges that Defendants “have formed a cartel which operates an online 11 grocery-ordering and-delivery [sic] service directed at consumers.” (Id. at 3.) 12 Specifically, he takes issue with Defendants “fraudulently classifying its workers as 13 independent contractors,” which allows them to “evade[] the employer-paid portion of
14 Federal employment taxes and other Federally mandated employer costs.” (Id.) These 15 “ill-gotten” savings allegedly allow Defendants to offer services at a cheaper price. (Id.) 16 Mr. Diego Diego alleges that each “cartel member knowingly and willfully participates” 17 in the arrangement. (Id. at 4.) 18 In particular, Mr. Diego Diego focuses on the “fraudulent classification of
19 [Defendants’] workers.” (See id. at 4-6.) He alleges that Defendants exercise “[d]irect 20 control” over workers through the “Shopper App” that dictates how workers fill orders 21 and the sequence of their deliveries. (Id. at 4-5.) Yet, despite this high level of control, 22 Defendants still qualify these workers as independent contractors. (Id. at 6.) Because of 1 this classification, Mr. Diego Diego alleges that Defendants do not provide worker’s 2 compensation; fail to adhere to federal wage and hour requirements; and do not provide or 3 verify that workers have automotive insurance. (Id. at 7-9.) Mr. Diego Diego additionally
4 singles out Kroger for engaging in class discrimination by employing some of these 5 workers at its “Curbside Pickup service.” (Id. at 9-10.) Lastly, Mr. Diego Diego alleges 6 that Instacart utilizes its “billions of dollars from private equity firms” to “subsidize free 7 or below-cost delivery in their quest to build a customer base for the cartel.” (Id. at 10.) 8 Mr. Diego Diego seeks injunctive relief requiring (1) Defendants to reclassify their
9 workers as employees and (2) Apple and Google to deactivate the Instacart application on 10 their respective platforms. (Id. at 11.) He also seeks $150 million in damages “for 11 damage to and lost opportunity for the plaintiff’s business.” (Id.) Lastly, he asks for 12 restitution “for all fraudulently classified workers.” (Id.) 13 III. ANALYSIS
14 Title 28 U.S.C. § 1915(e)(2)(B) authorizes a district court to dismiss a claim filed 15 IFP “at any time” if it determines: (1) the action is frivolous or malicious; (2) the action 16 fails to state a claim; or (3) the action seeks relief from a defendant who is immune from 17 such relief. See 28 U.S.C. § 1915(e)(2)(B). Section 1915(e)(2) parallels the language of 18 Federal Rules of Civil Procedure 12(b)(6). Lopez v. Smith, 203 F.3d 1122, 1126-27 (9th
19 Cir. 2000). The complaint therefore must allege facts that plausibly establish the 20 defendant’s liability. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-57 (2007). 21 Because Mr. Diego Diego is a pro se plaintiff, the court must construe his pleadings 22 liberally. See McGuckin v. Smith, 974 F.2d 1050, 1055 (9th Cir. 1992). But even 1 liberally construed, Mr. Diego Diego’s complaint fails to plausibly establish the 2 Defendants’ liability under the Sherman Act or raise his “right to relief above the 3 speculative level.” See Twombly, 550 U.S. at 555.
4 As a threshold matter, Mr. Diego Diego does not include any factual allegations 5 on how he is involved in this action and thus fails to establish antitrust standing. To 6 establish antitrust standing, a plaintiff must plead the existence of an antitrust injury, 7 which is comprised of “(1) unlawful conduct, (2) causing an injury to the plaintiff, (3) 8 that flows from that which makes the conduct unlawful, and (4) that is of the type the
9 antitrust laws were intended to prevent.” Glen Holly Entm’t, Inc. v. Tektronix, Inc., 352 10 F.3d 367, 372 (9th Cir. 2003) (internal quotation marks omitted). Additionally, the 11 injured party must be “a participant in the same market as the alleged malefactors.” Id. 12 Mr. Diego Diego’s only reference to himself in his complaint is when he sought 13 damages for “lost opportunity for [his] business.” (Compl. at 11.) It is additionally
14 unclear whether Mr. Diego Diego is a “fraudulently classified worker[].” (See id.) This 15 is insufficient to establish standing. 16 Moreover, Mr. Diego Diego fails to state a claim under either section of the 17 Sherman Act. To state a claim under § 1 of the Sherman Act, the plaintiff must first 18 establish three elements: “(1) an agreement or conspiracy among two or more persons
19 or distinct business entities; (2) by which the persons or entities intend to harm or 20 restrain competition; and (3) which actually injures competition.”1 Oltz v. St. Peter’s 21
1 This inquiry is known as the “rule of reason” analysis, as opposed to per se liability, 22 which is “reserved for only those agreements that are ‘so plainly anticompetitive that no 1 Cmty. Hosp., 861 F.2d 1440, 1445 (9th Cir. 1988). A plaintiff “may not merely recite 2 the bare legal conclusion that competition has been restrained unreasonably.” Les 3 Shockley Racing, Inc. v. Nat’l Hot Rod Ass’n, 884 F.2d 504, 508 (9th Cir. 1989).
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4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON 8 AT SEATTLE
9 10 RAMON DIEGO DIEGO, CASE NO. C21-0304JLR 11 Plaintiff, ORDER v. 12 APOORVA META, et al., 13 Defendants. 14
15 I. INTRODUCTION 16 Before the court are (1) pro se Plaintiff Ramon Diego Diego’s complaint against 17 Apoorva Meta, Maplebear Incorporated (“Instacart”), Timothy Cook, Apple Corporation 18 (“Apple”), Sundar Pichai, Sundar Pichai Alphabet Corporation (“Google”), The Kroger 19 Company (“Kroger”), and Costco Wholesale Corporation (“Costco”) (collectively, 20 “Defendants”) (Compl. (Dkt. # 4)); and (2) Magistrate Judge Brian A. Tsuchida’s order 21 granting Mr. Diego Diego in forma pauperis (“IFP”) status and recommending that the 22 court reviews this action pursuant to 28 U.S.C. § 1915(e)(2)(B) (IFP Order (Dkt. # 3)). 1 Under 28 U.S.C. § 1915(e), courts have authority to review IFP complaints and must 2 dismiss them if, “at any time,” a complaint is determined to be frivolous, malicious, fails 3 to state a claim on which relief may be granted, or seeks monetary relief from a defendant
4 who is immune from such relief. 28 U.S.C. § 1915(e)(2). As discussed below, Mr. 5 Diego Diego’s complaint falls within the category of pleadings that fail to state a claim. 6 Accordingly, the court DISMISSES Mr. Diego Diego’s complaint with leave to amend. 7 II. BACKGROUND 8 Mr. Diego Diego brings suit against Defendants for violating §§ 1 and 2 of the
9 Sherman Antitrust Act, 15 U.S.C. §§ 1 et seq. (“Sherman Act”). (See Compl.) Mr. Diego 10 Diego alleges that Defendants “have formed a cartel which operates an online 11 grocery-ordering and-delivery [sic] service directed at consumers.” (Id. at 3.) 12 Specifically, he takes issue with Defendants “fraudulently classifying its workers as 13 independent contractors,” which allows them to “evade[] the employer-paid portion of
14 Federal employment taxes and other Federally mandated employer costs.” (Id.) These 15 “ill-gotten” savings allegedly allow Defendants to offer services at a cheaper price. (Id.) 16 Mr. Diego Diego alleges that each “cartel member knowingly and willfully participates” 17 in the arrangement. (Id. at 4.) 18 In particular, Mr. Diego Diego focuses on the “fraudulent classification of
19 [Defendants’] workers.” (See id. at 4-6.) He alleges that Defendants exercise “[d]irect 20 control” over workers through the “Shopper App” that dictates how workers fill orders 21 and the sequence of their deliveries. (Id. at 4-5.) Yet, despite this high level of control, 22 Defendants still qualify these workers as independent contractors. (Id. at 6.) Because of 1 this classification, Mr. Diego Diego alleges that Defendants do not provide worker’s 2 compensation; fail to adhere to federal wage and hour requirements; and do not provide or 3 verify that workers have automotive insurance. (Id. at 7-9.) Mr. Diego Diego additionally
4 singles out Kroger for engaging in class discrimination by employing some of these 5 workers at its “Curbside Pickup service.” (Id. at 9-10.) Lastly, Mr. Diego Diego alleges 6 that Instacart utilizes its “billions of dollars from private equity firms” to “subsidize free 7 or below-cost delivery in their quest to build a customer base for the cartel.” (Id. at 10.) 8 Mr. Diego Diego seeks injunctive relief requiring (1) Defendants to reclassify their
9 workers as employees and (2) Apple and Google to deactivate the Instacart application on 10 their respective platforms. (Id. at 11.) He also seeks $150 million in damages “for 11 damage to and lost opportunity for the plaintiff’s business.” (Id.) Lastly, he asks for 12 restitution “for all fraudulently classified workers.” (Id.) 13 III. ANALYSIS
14 Title 28 U.S.C. § 1915(e)(2)(B) authorizes a district court to dismiss a claim filed 15 IFP “at any time” if it determines: (1) the action is frivolous or malicious; (2) the action 16 fails to state a claim; or (3) the action seeks relief from a defendant who is immune from 17 such relief. See 28 U.S.C. § 1915(e)(2)(B). Section 1915(e)(2) parallels the language of 18 Federal Rules of Civil Procedure 12(b)(6). Lopez v. Smith, 203 F.3d 1122, 1126-27 (9th
19 Cir. 2000). The complaint therefore must allege facts that plausibly establish the 20 defendant’s liability. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555-57 (2007). 21 Because Mr. Diego Diego is a pro se plaintiff, the court must construe his pleadings 22 liberally. See McGuckin v. Smith, 974 F.2d 1050, 1055 (9th Cir. 1992). But even 1 liberally construed, Mr. Diego Diego’s complaint fails to plausibly establish the 2 Defendants’ liability under the Sherman Act or raise his “right to relief above the 3 speculative level.” See Twombly, 550 U.S. at 555.
4 As a threshold matter, Mr. Diego Diego does not include any factual allegations 5 on how he is involved in this action and thus fails to establish antitrust standing. To 6 establish antitrust standing, a plaintiff must plead the existence of an antitrust injury, 7 which is comprised of “(1) unlawful conduct, (2) causing an injury to the plaintiff, (3) 8 that flows from that which makes the conduct unlawful, and (4) that is of the type the
9 antitrust laws were intended to prevent.” Glen Holly Entm’t, Inc. v. Tektronix, Inc., 352 10 F.3d 367, 372 (9th Cir. 2003) (internal quotation marks omitted). Additionally, the 11 injured party must be “a participant in the same market as the alleged malefactors.” Id. 12 Mr. Diego Diego’s only reference to himself in his complaint is when he sought 13 damages for “lost opportunity for [his] business.” (Compl. at 11.) It is additionally
14 unclear whether Mr. Diego Diego is a “fraudulently classified worker[].” (See id.) This 15 is insufficient to establish standing. 16 Moreover, Mr. Diego Diego fails to state a claim under either section of the 17 Sherman Act. To state a claim under § 1 of the Sherman Act, the plaintiff must first 18 establish three elements: “(1) an agreement or conspiracy among two or more persons
19 or distinct business entities; (2) by which the persons or entities intend to harm or 20 restrain competition; and (3) which actually injures competition.”1 Oltz v. St. Peter’s 21
1 This inquiry is known as the “rule of reason” analysis, as opposed to per se liability, 22 which is “reserved for only those agreements that are ‘so plainly anticompetitive that no 1 Cmty. Hosp., 861 F.2d 1440, 1445 (9th Cir. 1988). A plaintiff “may not merely recite 2 the bare legal conclusion that competition has been restrained unreasonably.” Les 3 Shockley Racing, Inc. v. Nat’l Hot Rod Ass’n, 884 F.2d 504, 508 (9th Cir. 1989).
4 Instead, a plaintiff must “at a minimum, sketch the outline of the antitrust violation with 5 allegations of supporting factual detail,” including “proof of the relevant geographic and 6 product markets and demonstration of the restraint’s anticompetitive effects within those 7 markets.” Id. Mr. Diego Diego’s complaint states summarily that Defendants “have 8 formed a cartel” and vaguely describes the roles of each Defendant but offers no factual
9 allegations as to an “agreement or conspiracy” amongst them. (Compl. at 3.) The 10 complaint says nothing about Defendants’ intent to harm or restrain competition or how 11 their supposed conspiracy actually injures competition in the relevant market. (See id.) 12 Thus, Mr. Diego Diego fails to state a claim under Sherman Act § 1. 13 The same is true for Mr. Diego Diego’s claim under Sherman Act § 2. Section 2
14 of the Sherman Act makes it illegal to “monopolize . . . any part of the trade or 15 commerce among the several states.” 15 U.S.C. § 2. To state a claim for 16 monopolization under § 2, the plaintiff must allege facts that, if true, will prove “(1) the 17 possession of monopoly power in the relevant market and (2) the willful acquisition or 18 maintenance of that power as distinguished from growth or development as a
19 consequence of a superior product, business acumen, or historic accident.” Eastman 20 //
21 elaborate study of the industry is needed to establish their illegality.’” Texaco Inc. v. Dagher, 547 U.S. 1, 5 (2006) (quoting Nat’l Soc. of Pro. Eng’rs v. United States, 435 U.S. 679, 692 22 (1978)). The complaint does not allege per se liability. (See Compl.) 1 Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 480 (1992). “To safeguard the 2 incentive to innovate, the possession of monopoly power will not be found unlawful 3 [under § 2] unless it is accompanied by an element of anticompetitive conduct.” Verizon
4 Comm’cns Inc. v. Law Offs. of Curtis V. Trinko, LLP, 540 U.S. 398, 407 (2004). The 5 complaint delves into how Defendants2 improperly categorize their workers and violate 6 wage or benefits law; commit tax fraud; engage in insurance fraud; perpetuate class 7 discrimination amongst workers; and fraudulently represent a SEC security. (See Compl. 8 at 4-10.) But the complaint contains no factual allegations establishing Defendants’
9 monopoly power in the relevant market or how that power is distinguishable from regular 10 growth or development; nor does it allege anticompetitive conduct. (See id.) Thus, the 11 court concludes that the complaint fails to state a claim against Defendants and dismisses 12 his complaint pursuant to 28 U.S.C. § 1915(e)(2)(B). 13 When a court dismisses a pro se plaintiff’s complaint, the court must give the
14 plaintiff leave to amend unless it is absolutely clear that amendment could not cure the 15 defects. Lucas v. Dep’t of Corr., 66 F.3d 245, 248 (9th Cir. 1995). Thus, the court 16 grants Mr. Diego Diego fourteen (14) days to file an amended complaint that properly 17 addresses the pleading deficiencies identified in this order. If Mr. Diego Diego fails to 18 //
19 // 20 2 The complaint repeatedly attributes all actions to “the cartel” of Defendants. (See Compl. at 3-9.) It is not clear whether Defendants are jointly classifying workers as independent 21 contractors. (See id.) Thus, the court adopts the complaint’s allegation that Defendants are all involved in the alleged misdeeds but encourages Mr. Diego Diego to be more specific in 22 pleading which entity has committed which act. 1 timely comply with this order or fails to file an amended complaint that corrects the 2 identified deficiencies, the court will dismiss his complaint without leave to amend. 3 IV. CONCLUSION
4 For the foregoing reasons, the court DISMISSES Mr. Diego Diego’s complaint for 5 failure to state a claim under 28 U.S.C. § 1915(e)(2)(B) with leave to amend within 6 fourteen (14) days of the filing of this order. 7 Dated this 25th day of March, 2021. 8 A 9 10 JAMES L. ROBART United States District Judge 11 12 13 14 15 16 17 18
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