Howard Hess Dental Laboratories Inc. v. Dentsply International, Inc.

602 F.3d 237, 602 F. Supp. 3d 237, 2010 U.S. App. LEXIS 7894
CourtCourt of Appeals for the Third Circuit
DecidedApril 16, 2010
Docket08-1693, 08-1694
StatusPublished
Cited by405 cases

This text of 602 F.3d 237 (Howard Hess Dental Laboratories Inc. v. Dentsply International, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Howard Hess Dental Laboratories Inc. v. Dentsply International, Inc., 602 F.3d 237, 602 F. Supp. 3d 237, 2010 U.S. App. LEXIS 7894 (3d Cir. 2010).

Opinion

OPINION OF THE COURT

FISHER, Circuit Judge.

These two antitrust cases, brought by two dental laboratories against an artificial tooth manufacturer and many of its dealers, are before us for the second time. In the first of the two cases, we must decide whether the District Court properly denied the plaintiffs’ motion for summary judgment on their monopolization claim against the manufacturer as well as the Court’s denial of the plaintiffs’ motion for reconsideration of its summary judgment ruling and subsequent dismissal of their complaint. In the second case, we must decide whether the District Court properly dismissed the plaintiffs’ conspiracy to restrain trade and conspiracy to monopolize claims against both the manufacturer and its dealers for failure to state a claim. Although for slightly different reasons than those articulated by the District Court, we agree with the District Court’s conclusions and will affirm its rulings.

I.

These appeals arise from two related antitrust cases filed in the United States District Court for the District of Delaware: Howard Hess Dental Laboratories, Inc. v. Dentsply International, Inc. (“Hess”) and Jersey Dental Laboratories v. Dentsply *244 International, Inc. (“Jersey Dental”). 1 Because we set forth the factual background of both cases in great detail in a prior appeal, see Howard Hess Dental Labs. Inc. v. Dentsply Int’l, Inc., 424 F.3d 363 (3d Cir.2005) (“Hess I”), we recite here only those facts required for the resolution of this appeal.

The plaintiffs in both cases are two dental laboratories (referred to in this opinion as the “Plaintiffs”). One of the defendants in both Hess and Jersey Dental, Dentsply International, Inc., manufactures artificial teeth, among other things, which it sells to the Plaintiffs and other laboratories through a network of authorized dealers (referred to in this opinion as the “Dealers”), several of which are named defendants only in Jersey Dental. The Plaintiffs use Dentsply’s artificial teeth to make dentures. In both cases, the Plaintiffs essentially allege that Dentsply “foreclosed its competitors’ access to [D]ealers by explicitly agreeing with some [D]ealers that they will not carry certain competing brands of teeth and by inducing other [D]ealers not to carry those competing brands of teeth” and that Dentsply, “by agreement [with] its [D]ealers, ... set[ ] the [Dealers’ resale prices.” Hess I, 424 F.3d at 367. In so doing, the Plaintiffs allege, Dentsply “caused [the] Plaintiffs to purchase Dentsply’s teeth at artificially high prices and lose profits from unrealized sales of Dentsply’s competitors’ teeth.” Id.

The Plaintiffs brought the Hess suit against Dentsply in 1999, alleging several antitrust conspiracies and seeking both monetary and injunctive relief. The District Court granted Dentsply’s subsequent motion for summary judgment on the Plaintiffs’ damages claim, concluding that the Plaintiffs lacked standing under Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977). In 2001, the Plaintiffs brought the Jersey Dental suit against Dentsply as well as several of its Dealers, again alleging several antitrust conspiracies and again asking for damages and injunctive relief, and the District Court again dismissed the Plaintiffs’ damages claims on the basis of Illinois Brick. The District Court also denied the Plaintiffs’ motion for leave to amend their complaint, concluding that the proposed amendment would be futile. The Plaintiffs thereafter brought an interlocutory appeal in this Court.

On appeal, we affirmed in part and reversed in part. Hess I, 424 F.3d 363. We held that in Hess the Plaintiffs could not recover damages under a coconspirator exception or a control exception to Illinois Brick and could not recover non-overcharge damages. In Jersey Dental, we held that the Plaintiffs did not have statutory standing to recover lost profits damages but that they did have statutory standing to recover damages from Dents-ply for its alleged price-fixing conspiracy with its Dealers. While we adopted a “limited” general coconspirator exception to Illinois Brick, we found that exception inapplicable to the Plaintiffs, and thus concluded that they could not pursue damages under the coconspirator exception. Hess I, 424 F.3d at 383-84. In summary, we held that the Plaintiffs could not recover any damages in Hess and most damages in Jersey Dental. We concluded that the Plaintiffs did have standing under the co-conspirator exception for overcharge damages “caused by the alleged retail price-fixing conspiracy, although not for the alleged exclusive-dealing conspiracy.” Id. at 384 (footnote omitted).

On remand, the Plaintiffs filed a five-count amended complaint in Jersey Dental. *245 In Count One, they re-alleged their conspiracy to restrain trade claim under Section 1 of the Sherman Act. Counts Two and Three asserted conspiracies to monopolize under Section 2 of the Sherman Act against the Dealers and Dentsply, respectively. Count Two sought damages as well as injunctive and declaratory relief while Count Three sought only injunctive and declaratory relief. Counts Four and Five asserted conspiracies to restrain trade under Section 1 of the Sherman Act against the Dealers and Dentsply, respectively, again seeking both damages as well as injunctive relief as to the Dealers and only injunctive and declaratory relief as to Dentsply. Motion practice ensued. In Jersey Dental, the Dealers moved to dismiss Counts Two and Four of the amended complaint under Federal Rule of Civil Procedure 12(b)(6), as did Dentsply as to Counts Three and Five. In Hess, the Plaintiffs moved for summary judgment on their monopolization claim under Section 2 of the Sherman Act against Dentsply. The District Court denied the Plaintiffs’ summary judgment motion in Hess and granted both the Dealers’ and Dentsply’s respective motions to dismiss in Jersey Dental, and dismissed Counts Two through Five of the amended complaint. 2 Howard Hess Dental Labs., Inc. v. Dentsply Int’l, Inc., 516 F.Supp.2d 324 (D.Del.2007) (“Howard Hess I”).

The Plaintiffs in Hess subsequently filed what they styled as a motion to supplement the record and to amend the District Court’s summary judgment ruling, asking for permission to provide the District Court with evidence to show the existence of anticompetitive injury. Meanwhile, in Jersey Dental the Plaintiffs moved for certification of appealability of the District Court’s dismissal of their claims in the amended complaint. In ruling on the motion to amend and the motion for certification,

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602 F.3d 237, 602 F. Supp. 3d 237, 2010 U.S. App. LEXIS 7894, Counsel Stack Legal Research, https://law.counselstack.com/opinion/howard-hess-dental-laboratories-inc-v-dentsply-international-inc-ca3-2010.