Corporate & Securities Law

Roadmap to Motion to Dismiss Post-Twombly

By Manfred Gabriel

The case, Babyage.com, Inc. v. Toys “R” Us, Inc., gives an interesting roadmap for what must be alleged in order to survive a motion to dismiss in a post-Twombly world. The case concerns retail-price maintenance after Leegin; the allegations were that a dominant retailer (Babys “R” Us) strong-armed high-end baby-goods manufacturers to adopt and enforce RPM in an effort to exclude price-cutting internet retailers from the market. Here is a taste:

Therefore, Plaintiffs have stated enough facts to suggest the existence of several relevant markets in which competition has been harmed. Plaintiffs? allegations are not only consistent with the existence of ?high-end baby and juvenile strollers,? ?high-end high chairs,? ?high-end breast pumps,? ?high-end baby bedding,? ?high-end car seats,? and ?high-end infant carriers? markets, but they suggest the existence of those markets. They do this by asserting facts about interchangeability and cross-elasticity of demand that explain why the proffered markets are not larger than Plaintiffs allege them to be. Put another way, their allegation that, for each market, a hypothetical monopolist could profitably raise prices on all in-product markets for a short time, constitute enough heft to raise the satisfaction of the relevant-market element beyond a speculative level.

Here is a pdf of the decision in the Eastern District of Pennsylvania. An article with background on the case is here. HT to Maria Dimoscato.

Full post as published by Antitrust Review on June 05, 2008 (boomark / email).