Orchard Supply Hardware LLC v. Home Depot USA, Inc.

939 F. Supp. 2d 1002, 2013 WL 1563228, 2013 U.S. Dist. LEXIS 53214
CourtDistrict Court, N.D. California
DecidedApril 12, 2013
DocketCase No. 12-cv-06361-JST
StatusPublished
Cited by7 cases

This text of 939 F. Supp. 2d 1002 (Orchard Supply Hardware LLC v. Home Depot USA, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Orchard Supply Hardware LLC v. Home Depot USA, Inc., 939 F. Supp. 2d 1002, 2013 WL 1563228, 2013 U.S. Dist. LEXIS 53214 (N.D. Cal. 2013).

Opinion

ORDER GRANTING MOTION TO DISMISS WITHOUT PREJUDICE

JON S. TIGAR,. District Judge.

I. INTRODUCTION

Plaintiff Orchard Supply Hardware (“Plaintiff’) brings a Complaint (“the Complaint”) against Defendants Home Depot USA, Inc., (“Home Depot”), Milwaukee Electric Tool Corporation (“METCo”) and Makita USA, Inc. (“Makita”) for violations of Section 1 of the federal Sherman Act (“Sherman Act”), violation of California’s Cartwright Act, violations of California’s Unfair Competition Law (“UCL”), tortious interference with existing contracts, and tortious interference with prospective economic relations. Dkt. No. 1. The Court has considered the papers and the arguments of the parties at oral argument held April 4, 2013. For the reasons that follow, the Court concludes that the Complaint fails to allege sufficient facts to state a viable cause of action, and must be dismissed without prejudice.

[1006]*1006II. BACKGROUND

A. Factual and Procedural Background

For the purposes of a motion to dismiss, the Court adopts the following factual allegations from Plaintiffs Complaint.

Plaintiff owns and operates a chain of all-purpose general hardware stores throughout California and is a retail competitor of Defendant Home Depot. Complaint, ¶¶ 1 & 16. Defendant Home Depot is currently the largest, and is a dominant, seller of hardware products in the United States. Id., ¶ 84. Defendants METCo and Makita are each suppliers of power tools that distribute their products to consumers through retail hardware stores such as Plaintiff Orchard Supply Hardware and Defendant Home Depot. Id., ¶¶ 2 & 110. Collectively, Defendants METCo and Makita control between nine and 50 percent of the market share of various power tools. Id., ¶ 7. Within North America, METCo and Makita aré the “predominant suppliers of professional power tools,” which are those tools sought by tradesmen and other professional customers. Id., ¶ 2,12,122-24.

On June 7, 2012, Home Depot executive Craig Menear publicly announced that Defendant Home Depot would enter into “exclusive-supplier contracts with key suppliers, so that it would become the principal or only supplier of the single most important kind of core hardware product— professional power tools and related accessories.” Id., ¶ 111. Within a week, Defendant Makita gave notice that it would stop selling power tools to Orchard. Id., ¶¶ 17, 112. Two weeks later, Defendant METCo also informed Plaintiff that it “would cease to make further sales of any of its products to Orchard.” Id., ¶¶ 17, 113. Another power tool supplier, Black & Decker Dewalt (“Black & Decker”), disclosed to Plaintiff that Defendant Home Depot had also- requested that Black & Decker refuse to deal with Plaintiff, but that Black & Decker had refused. Id., ¶ 114. In response, Black & Decker claims that Defendant Home Depot has lessened its purchases of Black & Decker products and had begun placing them in disadvantageous locations in its retail outlets. Id.

Plaintiff filed this Complaint on December 14, 2012. Dkt. No. 1. Defendants filed a Motion to Dismiss in February, which the Court now considers. Dkt. No. 30.

B. Jurisdiction

Plaintiffs first two causes of action arise under federal law, Section 1 of the Sherman Antitrust Act. 15 U.S.C. § 1. The Court has exclusive jurisdiction over those claims pursuant to Section 4 of the Clayton Act. 15 U.S.C. § 15. Subject-matter jurisdiction is therefore proper pursuant to 28 U.S.C. § 1331. Since the remaining causes of action arise from the same “nucleus of operative fact” as the Sherman Act claims, this Court can, and hereby does, exercise supplemental jurisdiction over those claims pursuant to 28 U.S.C. § 1367(a).

C. Legal Standard

“Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir.2008). Dismissal is also proper where the complaint alleges facts that demonstrate that the complaint is barred as a matter of law. See Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir.1990); Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir.1980).

For purposes of a motion to dismiss, “all allegations of material fact are taken as true and construed in the light most favor[1007]*1007able to the nonmoving party.” Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir.1996). However, -“[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a Plaintiffs’ obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). “To be entitled to the presumption of truth, allegations in a complaint or counterclaim may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir.2011) cert. denied, — U.S. -, 132 S.Ct. 2101, 182 L.Ed.2d 882 (U.S.2012). “The factual allegations that are taken as true must plausibly suggest ah entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.” Id. To survive a motion to dismiss, a pleading must allege “enough fact to raise a reasonable expectation that discovery will reveal evidence” to support the allegations. Twombly, 550 U.S. at 556, 127 S.Ct. 1955.

“Dismissal with prejudice and without leave to amend is not appropriate unless it is clear on de novo review that the complaint could not be saved by amendment.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir.2003).

III. DISCUSSION
A. Sherman Act

Section 1 of the Sherman Act prohibits “unreasonable restraints” of trade. State Oil Co. v. Khan,

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Maui Jim, Inc. v. Smartbuy Guru Enters.
386 F. Supp. 3d 926 (E.D. Illinois, 2019)
Hughes v. Ester C Co.
330 F. Supp. 3d 862 (E.D. New York, 2018)
Bay Area Surgical Management LLC v. Aetna Life Insurance
166 F. Supp. 3d 988 (N.D. California, 2015)

Cite This Page — Counsel Stack

Bluebook (online)
939 F. Supp. 2d 1002, 2013 WL 1563228, 2013 U.S. Dist. LEXIS 53214, Counsel Stack Legal Research, https://law.counselstack.com/opinion/orchard-supply-hardware-llc-v-home-depot-usa-inc-cand-2013.