The plaintiff does not plead facts to show that this case is analogous to Key Enterprises. There are no facts set forth in the complaint that illustrate that MetLife's refusal to deal with Rocklyn is an attempt to fix prices, eliminate competition or perform any other illegal act.
Arbitrary and capricious business decision
The plaintiffs complain that MetLife's decision was "arbitrary" and "capricious." The Court notes that there is nothing in the relevant law that provides for judicial review of private business decisions on the basis that they are arbitrary or capricious. As long as the decision is not illegal, the judiciary will not review the business judgment of private entities.
The plaintiffs draw the Court's attention to the case of Eastman Kodak v. Southern Photo Materials Co., 273 U.S. 359, 71 L. Ed. 684, 47 S. Ct. 400 (1927). This case holds that where there is a violation of the Sherman Act forming the basis for recovery, the plaintiff may rely on circumstantial evidence to establish damages. Id. However, the issue of the plaintiffs' damages is not relevant at this stage of the proceedings.
Tortious interference with prospective contractual relations
The plaintiffs claim that MetLife's customers are prevented from entering into contracts with Rocklyn as a result of MetLife's decision not to list Rocklyn as a "preferred provider." The essence of the plaintiffs' argument is that MetLife has deprived its customers of the right to choose Rocklyn and has unfairly limited the customers' knowledge of available vendors.
In New York, a legitimate business motive excuses interference with precontractual relations as long as unlawful restraint of trade does not result or wrongful means, such as physical violence or fraud, are not employed by the defendant. See Sharma v. Skaarup Ship Management Corp., 699 F. Supp. 440, 446 (S.D.N.Y. 1988), aff'd, 916 F.2d 820 (2d Cir. 1990), cert. denied, 499 U.S. 907, 113 L. Ed. 2d 218, 111 S. Ct. 1109 (1991) (citing Guard-Life Corp. v. S. Parker Hardware Mfg. Corp., 50 N.Y.2d 183, 428 N.Y.S.2d 628, 406 N.E.2d 445 (1980)). The plaintiff has not alleged facts that would support a finding of unlawful restraint of trade or wrongful means.
Moreover, even if the plaintiffs were to state a cause of action in tort, there would be no independent basis of jurisdiction for the claim because there is no diversity of citizenship in this case. The Court declines to exercise supplemental jurisdiction in the absence of a federal case.
Additional comments of the plaintiff
The Plaintiff draws the Court's attention to New York CPLR § 103(c), allowing for improper form. This state statute, which eliminates the distinction between actions in law and actions in equity, is not relevant to the determination of this motion. Actions in this Court are governed by the Federal Rules of Civil Procedure. The relevant rule, 12(b)(6) discussed above, requires the most liberal construction of a complaint. That is the standard guiding the Court's determination of this motion.
Finally, Mr. Fogel objects to the MetLife's reliance on Denny v. Barber, 576 F.2d 465 (2d Cir. 1978) to support a request that leave to replead be denied. Mr. Fogel is correct in noting that Denny involves a securities action, not a Sherman Act action. This Court offers, by way of explanation, that certain principles may be applicable to more than one type of action. The principles of pleading and dismissal can apply similarly to many different causes of action. The Court will now address the issue of repleading.
Leave to replead
Rule 15(a) provides that "leave [to amend a pleading] shall be freely given when justice so requires." See also Gumer v. Shearson, Hammill & Co., 516 F.2d 283, 287 (2d Cir. 1974). Only "undue delay, bad faith, or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party . . . [or] futility of the amendment" will serve to prevent an amendment prior to trial. Foman v. Davis, 371 U.S. 178, 182, 9 L. Ed. 2d 222, 83 S. Ct. 227 (1962); accord Health-Chem Corp. v. Baker, 915 F.2d 805 (2d Cir. 1990); Reiter's Beer Distributors, Inc. v. Christian Schmidt Brewing Co., 657 F. Supp. 136, 141 (E.D.N.Y. 1987).
The party opposing the motion for leave to amend has the burden of establishing that an amendment would be prejudicial, Panzella v. Skou, 471 F. Supp. 303, 305 (S.D.N.Y. 1979), and "unless a proposed amendment is clearly frivolous or legally insufficient on its face, the substantive merits of a claim or defense should not be considered on a motion to amend." Lerman v. Chuckleberry Pub., Inc., 544 F. Supp. 966, 968 (S.D.N.Y. 1982), rev'd on other grounds sub nom., Lerman v. Flynt Distributing Co., 745 F.2d 123 (2d Cir. 1984), cert. denied, 471 U.S. 1054, 85 L. Ed. 2d 479, 105 S. Ct. 2114 (1985).
The Court finds that in this case, leave to replead is futile because an antitrust action cannot be based on the fact that one private company refused to do business with another.
For the foregoing reasons, the defendants' motion pursuant to Fed. R. Civ. P. 12(b)(6) to dismiss the complaint in its entirety against both defendants is granted and leave to replead is denied.
Dated: Uniondale, New York
December 31, 1994
ARTHUR D. SPATT
United States District Judge
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