ground that Plaintiff has alleged neither a proper monopoly nor
the requisite intent to monopolize. The Joint Motion also seeks
dismissal of state law claims on preemption grounds. Finally
dismissal of all Labor Act claims is sought as against all
The Labor Management Committee, Karo, Nelson and SMACNA have
each submitted individual motions to dismiss on the ground that
the complaint fails to allege sufficient factual allegations to
state a claim against these defendants. Finally, Local 28 and
Harrington have submitted a motion seeking dismissal of
Plaintiffs state law claims.
In response to the motions, Plaintiff argues that it has
alleged facts in the complaint sufficient to survive a motion to
I. General Legal Principles
A. Standards for Motion to Dismiss
A motion to dismiss is properly granted only if "it appears
beyond doubt that the plaintiff can prove no set of facts in
support of his claim which would entitle him to relief." Conley
v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80
(1957); Bernheim v. Litt, 79 F.3d 318, 321 (2d Cir. 1996).
When ruling on a motion to dismiss, the court must accept as
true all factual allegations in the complaint. All reasonable
inferences must be drawn in favor of the non-moving party.
Hamilton Chapter of Alpha Delta Phi, Inc. v. Hamilton College,
128 F.3d 59, 62 (2d Cir. 1997). It is not for the court to
"weigh the evidence that might be presented at trial; the Court
must merely determine whether the complaint itself is legally
sufficient . . ." Rodolico v. Unisys Corp., 96 F. Supp.2d 184,
186 (E.D.N.Y. 2000).
II. Disposition of the Joint Motion
The Joint Motion first seeks dismissal of Plaintiff's
antitrust claims. Such claims are alleged in the form of
violations of Section 1 and 2 of the Sherman Act,
15 U.S.C. § 1, 2. Additionally, the Joint Motion seeks dismissal of state
law tort claims and Labor Act claims. The court considers each
argument in turn.
A. Section of the Sherman Act
1. Legal Principles
To state a claim pursuant to Section 1 of the Sherman Act, a
plaintiff must show a combination or concerted action between at
least two distinct entities which action constitutes an
unreasonable restraint on trade. Tops Markets, Inc. v. Quality
Markets, Inc., 142 F.3d 90, 95-96 (2d Cir. 1998); Capital
Imaging Assoc., P.C., v. Mohawk Valley Medical Assoc., Inc.,
996 F.2d 537, 542 (2d Cir. 1993). The restraint alleged must be
unreasonable either under a "per se" analysis or under the
"rule of reason." Id.; see Bogan v. Hodgkins, 166 F.3d 509,
513 (2d Cir.), cert. denied, 528 U.S. 1019, 120 S.Ct. 526, 145
L.Ed.2d 407 (1999).
Per se illegal conduct is that which is so egregious as to
constitute a violation of law without the necessity of showing
an effect on competition. NYNEX Corp. v. Discon, Inc.,
525 U.S. 128, 133-34, 119 S.Ct. 493, 142 L.Ed.2d 510 (1998);
Bogan, 166 F.3d at 513; Gregoris Motors v. Nissan Motor
Corp., 630 F. Supp. 902, 906 (E.D.N.Y. 1986). Among conduct
falling within the per se rule are price fixing, territorial
market division and certain group boycotts involving concerted
refusals to deal. NYNEX Corp., 525 U.S. at 133; Capital
Imaging, 996 F.2d at 542-43. Only conduct that is "manifestly
anticompetitive" is designated as per se illegal. The majority
of cases do not fall within the
per se category. Bogan, 166 F.3d at 514; see also CDC
Technologies, Inc. v. IDEXX Laboratories, Inc., 186 F.3d 74, 79
(2d Cir. 1999) (only a "handful" of practices are per se
illegal); National Camp Assoc., Inc. v. American Camping
Assoc., Inc., 2000 WL 1844764 *5 (S.D.N.Y. December 15, 2000)
(noting Supreme Court's refusal to extend the class of
agreements to which a per se analysis applies).
Conduct that does not fall within the per se rule is subject
to the rule of reason analysis. Application of this doctrine
requires a plaintiff to prove not mere injury to plaintiff as a
competitor but antitrust injury, i.e., actual damage to
competition within the relevant market. Capital Imaging, 996
F.2d at 542-43; Gregoris Motors, 630 F. Supp. at 906. A
plaintiff that fails to demonstrate actual injury to competition
may nonetheless show antitrust injury by showing that the
defendant possessed "market power," — the ability to inhibit
competition on a market-wide basis. Such power is defined as the
power to "raise prices significantly above the competitive level
without losing all of one's business." CDC Technologies, 186
F.3d at 81, quoting, Capital Imaging, 996 F.2d at 546; see
Tops Markets, 142 F.3d at 96.
Alleging a proper relevant market is critical to a plaintiffs
antitrust case. Hayden Pub. Co., Inc. v. Cox Broadcasting
Corp., 730 F.2d 64, 69-70 (2d Cir. 1984) (proof of the "impact
upon competition in a relevant market is an absolutely essential
element of the rule of reason case"), quoting, Kaplan v.
Burroughs Corp., 611 F.2d 286, 291 (9th Cir. 1979). An
appropriate relevant market is one is which there is reasonable
interchangeability in use between a product and substitutes.
Hayden Publishing, 730 F.2d at 70-71; Pepsico, Inc. v.
Coca-Cola Co., 1998 WL 547088 *5 (S.D.N.Y. August 27, 1998);
see United States v. E.I. du Pont de Nemours & Co.,
351 U.S. 377, 393, 76 S.Ct. 994, 100 L.Ed. 1264 (1956) (market definition
depends upon "how far buyers will go to substitute one commodity
for another"). Commodities that are reasonably interchangeable
for the same or similar uses are considered to be in the same
market for antitrust purposes. Hayden Publishing, 730 F.2d at
70. Because market definition involves determination of
interchangeability or the "cross-elasticity" of demand, the
question of whether or not plaintiff has set forth a properly
defined market usually involves resolution of questions of fact.
E.g., Pepsico, Inc. v. Coca-Cola Co., 1998 WL 547088 6
(S.D.N.Y. August 27, 1998).
Application of the rule of reason analysis requires a
plaintiff initially, to show proof of market injury. The burden
then shifts to defendant to show legitimate pro-competitive
reasons for the challenged conduct. Thereafter, it is for the
plaintiff to demonstrate that defendant's objective could have
been furthered by actions less prejudicial to competition.
Capital Imaging, 996 F.2d at 543.
Like the determination of the relevant market, application of
a rule of reason analysis is necessarily fact-specific. CDC
Technologies, 186 F.3d at 80; KMB Warehouse Distribs., Inc. v.
Walker Mfg. Co., 61 F.3d 123, 127 (2d Cir. 1995) (under rule of
reason analysis, "factfinder weighs all of the circumstances of
a case in deciding whether a restrictive practice should be
prohibited"), quoting, Continental T.V., Inc. v. GTE Sylvania,
Inc., 433 U.S. 36, 49, 97 S.Ct. 2549, 53 L.Ed.2d 568 (1977). To
reach a proper determination "the court must ordinarily consider
the facts peculiar to the business to which the restraint is
applied; its condition before and after the restraint was
imposed and its effect, actual or probable." Capital Imaging,
996 F.2d at 543, quoting, Chicago Bd. of Trade v. United
States, 246 U.S. 231, 238, 38 S.Ct. 242, 62 L.Ed. 683 (1918).
The "factfinder must decide the overarching question of whether
the challenged action purports to promote or destroy
competition." Capital Imaging, 996 F.2d at 543.
2. Plaintiff States A Claim Under Section 1 of the Sherman
Plaintiff argues that it alleges group boycott conduct
sufficient to apply a per se analysis as well as conduct that
runs afoul of a rule of reason analysis. Both theories are
As to the per se illegal boycott, the court holds that the
facts alleged may well constitute a type of illegal agreement
described by the Supreme Court in Fashion Originators' Guild of
America, Inc. v. FTC, 312 U.S. 457, 61 S.Ct. 703, 85 L.Ed. 949
(1941) and discussed by the Court in NYNEX, 525 U.S. at
135-36, 119 S.Ct. 493. Resolution of whether or not such an
illegal agreement exists among the defendants here requires a
factual inquiry, however, that the court cannot now undertake.
Ultimately, the facts may not bear out such a finding. The court
holds only that such a claim must await further factual
As to the rule of reason theory, the court holds, as a
threshold matter, that the relevant market alleged by Plaintiff
is sufficient to state a claim at this juncture. Plaintiff has
identified adequately both a relevant product and a relevant
geographic market. While Defendants take issue with Plaintiffs
definition — particularly its limitation to jobs costing more
than $150,000 — the court finds it inappropriate to reject
Plaintiffs market on the pleadings. At this stage, the market
alleged is reasonable.
After the taking of testimony, the court may well hold that
Plaintiffs limitation on the market does not make economic
sense. That determination, however, cannot be made at this time.
For these reasons, the court declines to dismiss for failure to
allege a proper relevant market. Accord National Communications
Association v. AT & T, 808 F. Supp. 1131, 1134 (S.D.N.Y. 1992)
(motion to dismiss for improper market definition appropriate
only where market alleged makes "no economic sense under any set
of facts"), quoting, Theatre Party Associates v. Shubert Org.,
Inc., 695 F. Supp. 150, 154 (S.D.N.Y. 1988); Michael Anthony
Jewelers, Inc. v. Peacock Jewelry, Inc., 795 F. Supp. 639, 647
(S.D.N.Y. 1992) (motion to dismiss based upon improper market
definition appropriate only where proposed market definition is
Plaintiffs restraint of trade argument alleges conduct similar
to that held subject to the antitrust laws in cases like Allen
Bradley Co. v. Electrical Workers, 325 U.S. 797, 65 S.Ct. 1533,
89 L.Ed. 1939 (1945) and Connell Construction Co., Inc. v.
Plumbers and Steamfitters Local Union No. 100, 421 U.S. 616, 95
S.Ct. 1830, 44 L.Ed.2d 418 (1975). In Allen Bradley, the Court
condemned agreements requiring that contractors purchase
equipment only from manufacturers that had agreements with a
particular union. Allen Bradley, 325 U.S. at 799-801, 65 S.Ct.
1533. In Connell Construction, the Supreme Court held that a
union could violate the antitrust laws by demanding that a
general contractor employ only subcontractors that employed
union members. Connell Construction, 421 U.S. at 624-25, 95
S.Ct. 1830; see also Wickham Contracting Co., Inc. v. Board of
Educ. of the City of New York, 715 F.2d 21, 27 (2d Cir. 1983)
(union antitrust liability could be established by showing that
the union demanded that work be contracted exclusively to firms
using particular union's workers). The conduct alleged here
appears to fall within the type of conduct prohibited by the
cases referred to immediately above and therefore states a
The court notes that the issue of whether or not particular
conduct constitutes a violation of Section 1 of the Sherman Act,
either under a per se or rule of reason analysis, requires a
clear understanding of the factual circumstances of the
particular industry alleged to have been harmed. Additionally,
the court must examine the conduct of the parties to determine a
variety of issues, not the least of which is intent. Such
matters are particularly ill-suited for disposition in the
context of a motion to dismiss. Taking all of Plaintiffs
allegations as truthful, the court holds that Cool Wind has more
than satisfied the requirements for pleading a violation of
Section 1 of the Sherman Act. All grounds raised in the Joint
Motion in support of dismissal of such a claim are rejected.
B. Section 2 of the Sherman Act: Monopolization Claims
1. Legal Principles
In addition to pleading a violation of Section 1 of the
Sherman Act, Plaintiff alleges a Section 2 violation in the form
of alleged monopolization and intent to monopolize. Like
Plaintiffs Section 1 claim, Plaintiffs Section 2 claim must be
supported by a showing of an appropriate relevant market and
antitrust injury. See Brunswick Corp. v. Pueblo Bowl-O-Mat,
Inc., 429 U.S. 477, 488, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977);
Michael Anthony Jewelers, 795 F. Supp. at 645. Additionally,
Section 2 requires a showing of: "(1) possession of monopoly
power in the relevant market and (2) the willful acquisition of
that power as distinguished from the growth or development of a
business as a consequence of a superior product, business acumen
or historical accident." Tops Markets, 142 F.3d at 97,
quoting, United States v. Grinnell Corp., 384 U.S. 563,
570-71, 86 S.Ct. 1698, 16 L.Ed.2d 778 (1966); Michael Anthony
Jewelers, 795 F. Supp. at 645.
"Monopoly power, also referred to as market power, is the
power to control prices or exclude competition." Tops Markets,
142 F.3d at 96-97, quoting, E.I. duPont de Nemours, 351 U.S.
at 391, 76 S.Ct. 994. A plaintiff shows monopoly power directly
by evidence of actual price control or exclusion of competition.
Market power is shown inferentially by demonstrating that the
defendant has a large percentage of the relevant market. Tops
Markets, 142 F.3d at 98. An inference of monopoly power can be
made only after "full consideration of the relationship between
market share and other relevant market characteristics," such as
strength of competition, probable development in the industry,
barriers to entry, the nature of the alleged anticompetitive
conduct and the elasticity of consumer demand. Id. at 98.
A properly pled claim of attempted monopolization requires a
showing of predatory or anticompetitive conduct along with a:
"(1) dangerous probability of success in monopolizing a given
product market and (2) specific intent to destroy competition or
build monopoly." Nifty Foods Corp. v. Great Atlantic and
Pacific Tea Co., Inc., 614 F.2d 832, 841 (2d Cir. 1980),
quoting, Times-Picayune Publishing Co. v. United States,
345 U.S. 594, 73 S.Ct. 872, 97 L.Ed. 1277 (1953); see Tops
Markets, 142 F.3d at 98.
2. Plaintiff States A Claim Under Section 2 of the Sherman
The Joint Motion's attack to the Section 2 Sherman Act claim
finds fault with Plaintiffs defined relevant market as well as
with Cool Wind's factual characterization of each Defendants'
role in that market. As set forth above, the court rejects any
attack based upon an improperly drawn relevant market. As to the
latter ground urged in support of
dismissal, the court is in no position, at this juncture, to
properly characterize the role played by each party. The
complaint is sufficient to state a claim and all motions to
dismiss the monopolization claims are hereby denied.
C. State Law Tort Claims
The Joint Motion seeks dismissal of state law tortious
interference claims on the ground that such claims are preempted
by federal labor law pursuant to San Diego Trades Council v.
Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959). In
Garmon, the Supreme Court held that state law may not be used
to exert jurisdiction over claims that are based upon activities
protected by Section 7 of the Labor Act or those prohibited as
unfair labor practices under Section 8 of the Labor Act. In such
cases, state law must defer to the "exclusive competence" of the
National Labor Relations Board — even in cases where the NLRB
has not exercised its jurisdiction. San Diego Trades Council,
359 U.S. at 245, 79 S.Ct. 773. Plaintiff counters dismissal
arguing that Garmon preemption applies only to the Union
defendant and, further, that it has alleged tortious conduct
beyond that which might be prohibited as an unfair labor
practice by the Labor Act.
The court disagrees with the notion that Garmon applies only
to the Union defendant. Although not decided by the Second
Circuit, the court agrees with the Courts of Appeal for the
Fourth and Ninth Circuit and holds that preemption depends not
on the identity of the defendant but, rather, on the nature of
the claim asserted. See Richardson v. Kruchko & Fries,
966 F.2d 153, 156-57 (4th Cir. 1992); Lumber Production Industrial
Workers Local 1054 v. West Coast Industrial Relations
Association, Inc., 775 F.2d 1042, 1049 (9th Cir. 1985); accord
Volentine v. Bechtel, Inc., 27 F. Supp.2d 728, 735-36 (E.D.Tex.
1998), aff'd mem., 209 F.3d 719 (5th Cir.), cert. denied,
___ U.S. ___, 121 S.Ct. 46, 148 L.Ed.2d 16 (2000).
Accordingly, to the extent that Plaintiffs tortious
interference claims are based upon the same facts that would
give rise to a Labor Act claim, the court would dismiss such
claims. Plaintiff argues, however, that this is not the case and
creates a factual issue. The procedural posture of the case,
therefore, makes dismissal premature. The court will await full
factual development before ruling on the preemption issue. If
after such development it appears that the claims are factually
duplicative, the court will dismiss the state law tortious
interference claims. The court defers decision on this issue,
however, and, at this time, denies the motion to dismiss the
state law claims.
D. Labor Act Claims
Defendants argue that claims pursuant to the Labor Act may be
asserted only against Local 28 and are therefore improperly
asserted against the remaining defendants. Plaintiff makes no
response to this particular argument and apparently concedes the
point. Accordingly, to the extent that any Labor Act claims are
asserted against any defendant other than Local 28, such claims
III. All Other Motions
Several defendants have submitted memoranda of law in support
of individual motions to dismiss. These memoranda argue that the
factual allegations of the complaint are insufficient to state a
claim against each submitting defendant. To survive a motion to
dismiss, an antitrust plaintiff alleging conspiracy must set
forth "either direct or inferential allegations respecting all
the material elements necessary to sustain recovery under some
viable legal theory." In re Nine West
Shoes Antitrust Litigation, 80 F. Supp.2d 181, 191 (S.D.N.Y.
2000). The court has reviewed each submission and holds that
questions of fact preclude the grant of any motion to dismiss.
Accordingly, each individual motion to dismiss is denied.
For the reasons set forth above, the motion to dismiss the
Labor Act claims against all defendants other than the Union is
granted. The motions to dismiss are, in all other respects,
The parties are directed to contact the Magistrate Judge
assigned to this matter so that discovery may proceed. The Clerk
of the Court is to terminate all motions to dismiss as set forth
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