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January 7, 2000


The opinion of the court was delivered by: Barrington D. Parker, Jr., District Judge.


This is a civil antitrust class action brought under the Clayton Act, 15 U.S.C. § 15, et seq., seeking relief on behalf of consumers who purchased shoes made and distributed by Nine West Group, Inc. ("Nine West"). The complaint alleges a vertical and horizontal price-fixing conspiracy in violation of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1. Before this Court is defendants' motion to dismiss the complaint for failure to state a claim upon which relief can be granted and for failure to plead fraud with particularity. See Fed.R.Civ.P. 12(b)(6) and 9(b).


In deciding a motion under Rule 12(b)(6), the Court is required to accept as true all factual allegations in the complaint and construe those allegations in the plaintiff's favor. See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); Easton v. Sundram, 947 F.2d 1011, 1014-15 (2d Cir. 1991). The following facts are construed accordingly.

This action consolidates some twenty-five class actions filed against Nine West and various retailers. Plaintiffs are individuals suing on behalf of themselves and other consumers who purchased Nine West shoes after January 1, 1988. Defendants are Nine West, a manufacturer and retailer of women's shoes, and ten department store chains*fn1 that sell Nine West shoes*fn2 to the public. Plaintiffs contend that Nine West engaged in a horizontal and vertical price-fixing conspiracy with the department store defendants and other unnamed co-conspirators to fix the minimum prices of Nine West shoes in violation of § 1 of the Sherman Act.

Beginning in 1988, plaintiffs contend that representatives of the Department Store defendants and Nine West meet regularly at semi-annual trade shows to set the minimum retail prices on various styles for the upcoming season, to determine which Nine West styles would be sold to the public at a discount during the season, and on which dates these events would occur.

Plaintiffs allege that defendants created what they termed "Off-Limits Lists" which included the minimum prices on dozens of styles of Nine West Shoes and contained various restrictions on sale of the shoes including "breakdates," "promotional windows," "minimum prices," and "promotional prices." The "breakdates" referred to the date when certain shoes first could be sold regularly at a discount by the defendants. The "promotional windows" were the specific dates on which shoes could be sold at reduced prices, and what those prices should be. For all other shoes not on the "Off-Limits Lists," defendants agreed not to sell below the "keystone" price, an industry term meaning twice the wholesale cost.

Plaintiffs allege that defendants' conspiracy operated horizontally and vertically. Count I of the complaint accuses defendants of horizontal price-fixing which resulted from agreements between Nine West and its direct competitors, the Department Store defendants. Count II alleges vertical price-fixing between the Department Store defendants and Nine West, as their supplier of Nine West shoes.

According to the complaint, defendants enforced their agreement on prices against other Nine West retailers "through a farranging system of policing and coercion." Complaint ¶ 78. Plaintiffs allege a system involving monitoring prices to ensure compliance, and threats by Nine West to cut off or delay shipments to any store that did not adhere to the agreed upon prices. Plaintiffs claim that other Nine West retailers who complied with these prices became willing or unwilling co-conspirators.

Plaintiffs assert that as a result of defendants' conspiracy, "(a) prices charged for Nine West Shoes sold to Plaintiffs and the Class have been raised, fixed or stabilized at artificially high and non-competitive levels; (b) Plaintiffs and other members of the Class have been deprived of the benefits of free, open and unrestricted competition in the purchase of Nine West Shoes; and (c) competition in sale of Nine West Shoes has been unlawfully restrained, suppressed and eliminated." Complaint ¶¶ 89 & 94. The complaint alleges that members of the class have suffered "injury to their business and their property." Id. Specifically, plaintiffs claim they have paid "excessive, non-competitive prices for Nine West shoes as a direct result of defendants' price-fixing." Plaintiffs' Memorandum of Law in Opposition to Defendants' Motion to Dismiss at 3.

This motion challenges the sufficiency of the complaint. Defendants argue that it should be dismissed because (1) plaintiffs have not pled antitrust injury, (2) the complaint fails to plead facts sufficient to put the individual defendants on notice of the fraud and conspiracy claims against each of them, and (3) plaintiffs' claims are limited by the four-year statute of limitations. For the reasons set forth below, the motion to dismiss is denied.


1. Standard on a Motion to Dismiss

Dismissal of a complaint pursuant to Fed.R.Civ.P. 12(b)(6) is permitted "`only where it appears beyond doubt that the plaintiff can prove no set of facts in support of the claim which would entitle him to relief.'" Scotto v. Almenas, 143 F.3d 105, 109-10 (2d Cir. 1998) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)); see also Still v. DeBuono, 101 F.3d 888, 891 (2d Cir. 1996). A district court's function on a motion to dismiss under Rule 12(b)(6) is to assess the legal feasibility of the challenged claims. Cooper v. Parsky, 140 F.3d 433, 440 (2d Cir. 1998); Kopec v. Coughlin, 922 F.2d 152, 155 (2d Cir. 1991). The issue "is not whether a plaintiff will ultimately prevail, but whether the claimant is entitled to offer evidence to support the claims." Scheuer, 416 U.S. at 236, 94 S.Ct. 1683.

In antitrust cases in particular, "`dismissals prior to giving the plaintiff ample opportunity for discovery should be granted very sparingly.'" George Haug Co. v. Rolls Royce Motor Cars Inc., 148 F.3d 136, 139 (2d Cir. 1998) (quoting Hospital Building Co. v. Trustees of Rex Hosp., 425 U.S. 738, 746, 96 S.Ct. 1848, 48 L.Ed.2d 338 (1976)). Nonetheless, "`[i]t is not . . . proper to assume that the [plaintiff] can prove facts that it has not alleged or that the defendants have violated the antitrust laws in ways that have not been alleged.'" Id. (quoting Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 526, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983)).

An antitrust complaint must "`adequately . . . define the relevant product market, . . . allege antitrust injury, [and] . . . allege conduct in violation of the antitrust laws.'" Rock TV Entertainment, Inc. v. Time Warner, Inc., No. 97 Civ. 0161(LMM), 1998 WL 37498, at *2 (S.D.N.Y. Jan. 30 1998) (quoting Sage Realty Corp. v. ISS Cleaning Services Group, Inc., 936 F. Supp. 130, 135 (S.D.N.Y. 1996)). The burden on a plaintiff alleging federal antitrust violations, however, is no greater than the burden imposed on other claimants under the Federal Rules of Civil Procedure. Gross v. New Balance Athletic Shoe, Inc., 955 F. Supp. 242, 244 (S.D.N.Y. 1997). Our Circuit has stated that "a short plain statement of a claim for relief which gives notice to the opposing party is all that is necessary in antitrust cases, as in other cases under the Federal Rules." George C. Frey Ready-Mixed Concrete, Inc. v. Pine Hill Concrete Mix Corp., 554 F.2d 551, 554 (2d Cir. 1977). Compare, e.g., Newburger, Loeb & Co. v. Gross, 365 F. Supp. 1364, 1367-68 (S.D.N.Y.), aff'd in part, rev'd in part on other grounds, 563 F.2d 1057 (2d Cir. 1977) ("skeletal" allegations sufficient), with, e.g., Heart Disease Research Foundation v. General Motors Corp., 463 F.2d 98, 100 (2d Cir. 1972) ("a bare bones statement of conspiracy or of injury under the antitrust laws without any supporting facts permits dismissal.").

2. Federal Antitrust Laws

Section 1 of the Sherman Act provides in relevant part that subject to certain limitations "[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations is declared to be illegal." 15 U.S.C. § 1. Section 4 of the Clayton Act allows private enforcement of the antitrust laws and broadly defines the class of persons who may maintain a private damage action.*fn3 Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 529, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983) [hereinafter "AGCC"]. The statute provides:

Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney's fee.

15 U.S.C. § 15.

In light of the statute's broad language, additional analysis is required to determine whether or not a particular private plaintiff is a proper party to bring a private antitrust action. AGCC, 459 U.S. at 534 & n. 31, 103 S.Ct. 897. The Supreme Court has identified several factors to consider in determining whether a particular plaintiff has "antitrust standing." Id. at 537-44, 103 S.Ct. 897. They include: (1) the causal connection between an antitrust violation and the alleged harm suffered by the plaintiff; (2) the nature of plaintiff's antitrust injury; (3) the directness or indirectness of the asserted injury; (4) the existence of an identifiable class of persons other than plaintiff who were more direct victims of the antitrust violation, and (5) the potential for duplicative recovery or complex apportionment of damages. Id. at 537-44, 103 S.Ct. ...

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