SOMERS v. QVC, INC.

District Court, E.D. Pennsylvania·Decided September 23, 2021·No. 2:19-cv-04773·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

SUZANNE SOMERS, et al., : CIVIL ACTION Plaintiffs, : : v. : : QVC, INC., : NO. 19-cv-04773 Defendant. :

MEMORANDUM

KENNEY, J. September 23, 2021 This case concerns QVC’s alleged monopolization of the direct response television programming market and exercise of control over the sale of nutritional supplements in that market in breach of QVC’s obligations to Plaintiffs, Suzanne Somers and SLC Sweet, Inc. (“Plaintiffs”). Presently before the Court is Defendant’s Motion for Partial Summary Judgment on Counts V and IX. ECF No. 63. Plaintiffs have sued QVC for allegedly intentionally removing Plaintiffs as sellers of nutritional supplements in the direct response television programming market (the “T.V. Market”), so that QVC could protect sales of HSN’s preferred provider of nutritional supplements, Andrew Lessman. Plaintiffs claim QVC acted to monopolize the television programming nutritional supplement market and engaged in anticompetitive, exclusionary, and predatory conduct. In addition to their antitrust claims, Plaintiffs assert claims against QVC for unfair competition, fraud, promissory estoppel, violations of the UCC, and breach of the parties’ Agreement. Plaintiffs intend to establish that QVC’s actions caused Plaintiffs over $20 million in damages. Defendant responds that this case is a straightforward commercial contract dispute that Plaintiffs have twisted into a business tort and antitrust lawsuit. QVC claims that there is no genuine dispute of material fact and Plaintiffs’ antitrust and business tort claims fail as a matter of law. QVC also argues it expended significant efforts in its performance under the terms of its

Agreement with Plaintiffs, did not breach any provisions of the Agreement, appropriately terminated the Agreement, and that Plaintiffs are not entitled to any damages. I. BACKGROUND Plaintiffs in this case are actress and entrepreneur Suzanne Somers and her affiliated company, SLC Sweet, Inc, which sells products such as clothing, jewelry, and books. ECF No. 65 ¶¶ 1 & 3. Defendant is QVC, Inc., a multi-platform retailer that sells products through direct response television programming, online retail, and other channels. ECF No. 63-2 ¶ 6. Plaintiffs allege that Defendant QVC and the Home Shopping Network (“HSN”) acted in tandem to control the sale of nutritional supplements in the T.V. Market and eliminate competitor vendors in that market, including Plaintiffs. See generally ECF No. 7. The claimed monopoly began in

July 2017, when QVC’s parent, Qurate, acquired HSN. Id. at ¶ 26. Plaintiffs estimate that HSN and QVC together control ninety-five percent of the T.V. Market. Id. Plaintiffs claim that after Qurate acquired HSN, QVC suppressed the sale of Plaintiffs’ products to protect this illegal monopoly and advance the career of HSN’s provider of nutritional supplements, Andrew Lessman. Id. Prior to 2017, Ms. Somers sold nutritional supplements on Evine, another home shopping television network. Pl. Statement of Undisputed Facts ¶ 9; Def. Statement ¶¶ 9-19. In December 2016, a QVC vendor contacted Rich Yoegel, QVC’s Vice President of Merchandising, to see whether QVC would be interested in doing business with SLC. Def. Statement ¶ 20. In early 2017, the parties negotiated a merchandising agreement over several weeks. Def. Statement ¶ 25. On March 17, 2017, SLC notified Evine it was terminating their relationship. Def. Statement ¶ 29. On March 21, 2017, SLC and QVC signed a Merchandising Agreement (the “Agreement”) for SLC to sell nutritional supplements on QVC. Joint Undisputed Fact No. 7.

Caroline Somers, Suzanne’s daughter-in-law and the President of SLC, signed the Agreement on behalf of SLC. Joint Undisputed Fact No. 8. In March 2017, QVC placed its first purchase orders with SLC, totaling approximately $1.3 million. Joint Undisputed Fact No. 9. Andrew Lessman sells nutritional supplements on QVC and HSN. Joint Undisputed Fact No. 2. His company ProCaps was one of HSN’s largest vendors before the Liberty/HSN acquisition, and still is one of HSN’s largest vendors today. Joint Undisputed Fact No. 10. Andrew Lessman has an agreement with HSN which provides that the parties to the agreement intend him to be the sole provider of nutritional supplements on HSN. ECF No. 69 at 8; ECF No. 83 at 4. In July 2017, Liberty Interactive announced the HSN acquisition. Joint Undisputed Fact

No. 4. ln December 2017, Liberty Interactive formally completed the HSN acquisition and comes to own 100% of QVC and 100% of HSN. Joint Undisputed Fact No. 5. II. PROCEDURAL HISTORY SLC and Suzanne Somers initiated this action against QVC on October 15, 2019, alleging breach of contract, wrongful rejection of goods, failure to use best efforts, anticipatory repudiation, unfair competition, fraud, promissory estoppel, intentional interference with contractual relations, unfair business practices, and violation of the Sherman Act. ECF No. 1. Plaintiffs then filed an Amended Complaint on December 20, 2019. ECF No. 7. Defendant filed a Motion to Dismiss for Failure to State a Claim on January 24, 2021 (ECF No. 8), which the Court denied. ECF No. 18. Defendant filed its Answer on March 18, 2020 (ECF No. 19), and the case proceeded through discovery. On May 7, 2021, Plaintiffs filed a Partial Summary Judgment Motion, seeking summary judgment on Count I (Breach of Contract) and Count II (Violation of the UCC). ECF No. 65.

Defendant also brought a Partial Summary Judgment Motion seeking judgment in its favor on Counts I, III, IV, V, VI, VII, VIII and IX. ECF No. 63. On August 24, 2021, the Court denied Plaintiffs’ Motion (ECF No. 65) in its entirety and denied Defendant’s Motion (ECF No. 63) as to Counts I, III, IV, VI, VII, and VIII.1 Presently before the Court is Defendant’s Motion for Partial Summary Judgment as to Counts V (Violation of CA Business and Professions Code § 17200) and IX (Violation of § 2 of the Sherman Act). ECF No. 65. III. JURISDICTION AND LEGAL STANDARD The Court has jurisdiction over this matter under 28 U.S.C. § 1331 as it arises under the laws of the United States. This Court also has subject matter jurisdiction under 28 U.S.C. § 1332 because the matter in controversy exceeds the sum of $75,000 and is between citizens of

different states. Summary judgment will be granted “against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The party moving for summary judgment bears the burden of demonstrating that “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); see Celotex, 477 U.S. at 322–23. If the movant sustains its burden,

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