The opinion of the court was delivered by: Hurley, District Judge
Defendant Thermasol ("Defendant" or "Thermasol") moves to dismiss the complaint brought by Worldhomecenter.com ("Plaintiff" or "WHC") for failure to state a claim, pursuant to Federal Rule of Civil Procedure ("Rule") 12(b)(6). In the Complaint, WHC seeks an order enjoining Thermasol from engaging in further allegedly unlawful acts that violate the Sherman Act, 15 U.S.C. §§ 1, 2; the Donnelly Act, New York General Business Law § 340; and the New York Deceptive Trade Practices Act ("DTPA"), New York General Business Law § 349.
Plaintiff also seeks damages with regard to the alleged unlawful conduct. For the reasons set forth herein, the Court GRANTS in part and DENIES in part Defendant's motion to dismiss.
In crafting the following summary of facts, the Court accepts all of factual allegations in the Complaint as true.
WHC is a corporation organized under the laws of New York, with its principal place of business in Lynbrook, New York. It is an on-line retailer of home improvement products, though its website, "Homecenter.com." Thermasol is a corporation organized under the laws of Delaware, with its principal place of business in Simi Valley, California. It manufactures and sells products for kitchen and bathrooms exclusively to its authorized dealers.
WHC is a distributor of Thermasol's products. It purchases Thermasol products from both exclusive and independent distributors for online resale to WHC's customers. Because of the relatively low overhead and maintenance associated with on-line retailing, WHC alleges that it is able to sell Thermasol products to consumers at sharp discounts compared to traditional display-room retailers.
WHC has distributed Thermasol products for several years. On November 12, 2004, Thermasol issued a Minimum Advertised Price ("MAP") program to its distributors that serves as the basis for the present suit. The letter, including typographical and grammatical errors, is reproduced below in its entirety:
The Internet is a remarkable resource. It provides product information and awareness like nothing before. Yet, as amazing as the Internet is, it has one success-robbing negative . . . margin erosion. This erosion is unnecessary and diminishes your opportunities to profit from features and benefits consumers seek. Patented innovations such as; FastStart, ProHeat, and NoTouch, along with Ambiance and Lifetime Warranties were designed to give you, the ThermaSol Distributor, leading edge products that provide superior margins. And most importantly, you can feel confident knowing you are selling the very best.
To no address this margin erosion would be irresponsible, hence we have created a Minimum Advertising Pricing (MAP) policy.
Compliance to the MAP policy is mandatory beginning January 1, 2005.
The Minimum Advertised Price is as follows: ThermaSol products may not be advertised for less than 20% off ...