Case 1:20-cv-03589-JEB Document 114-1 Filed 03/10/21 Page 1 of 35
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLUMBIA
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`STATE OF NEW YORK, et al.,
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`Plaintiffs,
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`v.
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`FACEBOOK, INC.,
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`Defendant.
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`Case No. 1:20-cv-03589-JEB
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`
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`MEMORANDUM IN SUPPORT OF FACEBOOK, INC.’S
`MOTION TO DISMISS STATES’ PARENS PATRIAE COMPLAINT
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`Case 1:20-cv-03589-JEB Document 114-1 Filed 03/10/21 Page 2 of 35
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`TABLE OF CONTENTS
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`Page
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`TABLE OF AUTHORITIES .......................................................................................................... ii
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`INTRODUCTION ...........................................................................................................................1
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`BACKGROUND .............................................................................................................................3
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`ARGUMENT ...................................................................................................................................4
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`I.
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`II.
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`III.
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`THE STATES DO NOT HAVE PARENS PATRIAE STANDING ....................................4
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`LACHES BARS THE STATES’ CLAIMS .........................................................................8
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`THE STATES FAIL TO PLAUSIBLY ALLEGE THAT THE
`ACQUISITIONS OF INSTAGRAM AND WHATSAPP VIOLATED
`THE CLAYTON ACT .......................................................................................................12
`
`A.
`
`B.
`
`C.
`
`The States’ Claim That Facebook’s Acquisitions Of Non-
`Competitors Violated Section 7 Fails As A Matter Of Law ..................................13
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`The States Fail To Allege That Instagram Or WhatsApp Was
`Uniquely Situated To Compete With Facebook ....................................................18
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`Allegations Concerning “Intent” Cannot Satisfy The States’
`Pleading Burden .....................................................................................................20
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`IV.
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`THE STATES FAIL TO STATE A CLAIM UNDER SECTION 2 .................................22
`
`A.
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`B.
`
`C.
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`The States Fail To Plead A Cognizable Relevant Market .....................................22
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`The States Fail To Plead That Facebook Has Monopoly Power ...........................22
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`The States Fail To Allege Exclusionary Conduct ..................................................24
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`1.
`
`2.
`
`The States Fail To Allege That Any Facebook Acquisition
`Was Unlawful ............................................................................................25
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`The States’ Claim That Facebook’s 2011-2018 Policies
`Prevented Competitors From Making Unrestricted Use
`Of Its Proprietary Platform Fails As A Matter Of Law .............................28
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`3.
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`The States Have Not Pleaded Any Consumer Harm .................................28
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`CONCLUSION ..............................................................................................................................29
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`i
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`Case 1:20-cv-03589-JEB Document 114-1 Filed 03/10/21 Page 3 of 35
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`CASES
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`TABLE OF AUTHORITIES*
`
`Page
`
`Alberta Gas Chems. Ltd. v. E.I. DuPont de Nemours & Co., 826 F.2d 1235
`(3d Cir. 1987) .....................................................................................................................26
`
`* Alfred L. Snapp & Son, Inc. v. Puerto Rico, 458 U.S. 592 (1982) ..........................................1, 4, 6
`
`Antoine L. Garabet, M.D., Inc. v. Autonomous Techs. Corp., 116 F. Supp. 2d 1159
`(C.D. Cal. 2000) .................................................................................................................10
`
`Asa Accugrade Inc. v. Am. Numismatic Ass’n, 370 F. Supp. 2d 213 (D.D.C. 2005) ....................24
`
`* Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ............................................................3, 6, 15, 29
`
`Brown Shoe Co. v. United States, 370 U.S. 294 (1962) ................................................................26
`
`California v. Am. Stores Co., 495 U.S. 271 (1990) ...................................................................9, 11
`
`Dresses for Less, Inc. v. CIT Grp./Commercial Servs., Inc., 2002 WL 31164482
`(S.D.N.Y. Sept. 30, 2002) ..................................................................................................19
`
`Fed. Home Loan Bank Bd. v. Elliott, 386 F.2d 42 (9th Cir. 1967) ................................................10
`
`Feitelson v. Google Inc., 80 F. Supp. 3d 1019 (N.D. Cal. 2015) .....................................................7
`
`Fraser v. Major League Soccer, L.L.C., 284 F.3d 47 (1st Cir. 2002) ...........................................18
`
`FTC v. H.J. Heinz Co., 246 F.3d 708 (D.C. Cir. 2001) ...........................................................14, 20
`
`FTC v. Steris Corp., 133 F. Supp. 3d 962 (N.D. Ohio 2015) ............................................16, 18, 20
`
`* Georgia v. Pennsylvania R.R. Co., 324 U.S. 439 (1945) .............................................................4, 5
`
`Ginsburg v. InBev NV/SA:
`
`
`
`
`
`649 F. Supp. 2d 943 (E.D. Mo. 2009), aff’d, 623 F.3d 1229 (8th Cir. 2010) ...................... 16
`
`623 F.3d 1229 (8th Cir. 2010) ...........................................................................................10
`
`* Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977) ...................................................................1, 4, 8
`
`Int’l Tel. & Tel. Corp. v. Gen. Tel. & Elecs. Corp., 518 F.2d 913 (9th Cir. 1975) .......................11
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`Intergraph Corp. v. Intel Corp., 195 F.3d 1346 (Fed. Cir. 1999) ..................................................25
`
`
`* Authorities principally relied upon are marked with an asterisk.
`
`ii
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`Case 1:20-cv-03589-JEB Document 114-1 Filed 03/10/21 Page 4 of 35
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`Kaiser Aluminum & Chem. Sales, Inc. v. Avondale Shipyards, Inc., 677 F.2d 1045
`(5th Cir. 1982) ....................................................................................................................11
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`Koker v. Aurora Loan Servicing, LLC, 915 F. Supp. 2d 51 (D.D.C. 2013) ..................................15
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`Kolon Indus. Inc. v. E.I. DuPont de Nemours & Co., 748 F.3d 160 (4th Cir. 2014) .....................24
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`Manitoba v. Bernhardt, 923 F.3d 173 (D.C. Cir. 2019) ..................................................................4
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`Midwestern Mach. Co. v. Nw. Airlines, Inc., 392 F.3d 265 (8th Cir. 2004) ....................................9
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`Missouri ex rel. Koster v. Harris, 847 F.3d 646 (9th Cir. 2017) .....................................................7
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`Mylan Pharm. Inc. v. Warner Chilcott Pub. Ltd. Co., 838 F.3d 421 (3d Cir. 2016) .....................24
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`Nat’l R.R. Passenger Corp. v. Morgan, 536 U.S. 101 (2002) .........................................................8
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`* Navajo Nation v. Wells Fargo & Co., 344 F. Supp. 3d 1292 (D.N.M. 2018) .........................5, 6, 7
`
`New York v. Kraft Gen. Foods, Inc., 862 F. Supp. 1030 (S.D.N.Y.), aff’d mem.,
`14 F.3d 590 (2d Cir. 1993)...................................................................................................8
`
`New York v. Microsoft Corp., 209 F. Supp. 2d 132 (D.D.C. 2002) .................................................5
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`* Pac. Bell Tel. Co. v. linkLine Commc’ns, Inc., 555 U.S. 438 (2009) ......................................25, 28
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`* Packaged Seafood Prods. Antitrust Litig., In re, 338 F. Supp. 3d 1079
`(S.D. Cal. 2018) ...............................................................................................................6, 7
`
`* Pennsylvania v. Kleppe, 533 F.2d 668 (D.C. Cir. 1976) .........................................................4, 5, 7
`
`Pro-Football, Inc. v. Harjo:
`
`
`
`
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`415 F.3d 44 (D.C. Cir. 2005) .............................................................................................12
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`567 F. Supp. 2d 46 (D.D.C. 2008), aff’d, 565 F.3d 880 (D.C. Cir. 2009) .................... 11-12
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`Puerto Rico v. Carpenter Co., 442 F. Supp. 3d 464 (D.P.R. 2020) ..........................................9, 10
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`* Rambus Inc. v. FTC, 522 F.3d 456 (D.C. Cir. 2008) .....................................................................24
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`Rebel Oil Co., Inc. v. Atl. Richfield Co., 51 F.3d 1421 (9th Cir. 1995) .........................................22
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`* Reveal Chat Holdco, LLC v. Facebook, Inc., 471 F. Supp. 3d 981
`(N.D. Cal. 2020).........................................................................................................2, 8, 10
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`S. Pac. Commc’ns Co. v. AT&T Co., 556 F. Supp. 825 (D.D.C. 1982), aff’d,
`740 F.2d 980 (D.C. Cir. 1984) ...........................................................................................25
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`iii
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`Saint Alphonsus Med. Ctr.-Nampa Inc. v. St. Luke’s Health Sys., Ltd.,
`778 F.3d 775 (9th Cir. 2015) .............................................................................................17
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`Samsung Elecs. Co. v. Panasonic Corp., 747 F.3d 1199 (9th Cir. 2014) .................................. 9-10
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`Satsky v. Paramount Commc’ns, Inc., 7 F.3d 1464 (10th Cir. 1993) ..............................................6
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`Standard Oil Co. v. United States, 221 U.S. 1 (1911) ...................................................................26
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`Steves & Sons, Inc. v. JELD-WEN, Inc., --- F.3d ---, 2021 WL 630521
`(4th Cir. Feb. 18, 2021) ......................................................................................................14
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`Sunbeam Television Corp. v. Nielsen Media Research, Inc., 763 F. Supp. 2d 1341
`(S.D. Fla. 2011), aff’d, 711 F.3d 1264 (11th Cir. 2013)....................................................26
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`Taleff v. Sw. Airlines Co., 828 F. Supp. 2d 1118 (N.D. Cal. 2011) ...............................................10
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`Tenneco, Inc. v. FTC, 689 F.2d 346 (2d Cir. 1982) .......................................................................16
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`Tobacco/Governmental Health Care Costs Litig., In re, 83 F. Supp. 2d 125
`(D.D.C. 1999) ......................................................................................................................7
`
`United States v. Aetna Inc., 240 F. Supp. 3d 1 (D.D.C. 2017) ......................................................16
`
`United States v. Anthem, Inc., 236 F. Supp. 3d 171 (D.D.C. 2017) ..............................................14
`
`* United States v. Baker Hughes Inc., 908 F.2d 981 (D.C. Cir. 1990) .......................................13, 14
`
`United States v. Columbia Steel Co., 334 U.S. 495 (1948) ...........................................................27
`
`United States v. E.I. DuPont de Nemours & Co., 351 U.S. 377 (1956) ........................................22
`
`United States v. Grinnell Corp., 384 U.S. 563 (1966) ...................................................................22
`
`United States v. H & R Block, Inc., 833 F. Supp. 2d 36 (D.D.C. 2011) ........................................14
`
`United States v. Marine Bancorporation, Inc., 418 U.S. 602 (1974) ......................................16, 17
`
`* United States v. Microsoft Corp., 253 F.3d 34 (D.C. Cir. 2001) .................................21, 24, 27, 28
`
`United States v. Siemens Corp., 621 F.2d 499 (2d Cir. 1980) .......................................................16
`
`Utah Div. of Consumer Prot. v. Stevens, 398 F. Supp. 3d 1139 (D. Utah 2019) .............................8
`
`* Verizon Commc’ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398
`(2004) ...........................................................................................................................24, 28
`
`Walgreen Co. v. AstraZeneca Pharm. L.P., 534 F. Supp. 2d 146 (D.D.C. 2008) ................... 22-23
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`Walker Process Equip., Inc. v. Food Mach. & Chem. Corp., 382 U.S. 172 (1965) ......................22
`
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`Washington v. Chimei Innolux Corp., 659 F.3d 842 (9th Cir. 2011) ..............................................5
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`Washington v. Franciscan Health Sys., 388 F. Supp. 3d 1296 (W.D. Wash. 2019) ...............12, 13
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`Yamaha Motor Co. v. FTC, 657 F.2d 971 (8th Cir. 1981) ............................................................16
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`Z Techs. Corp. v. Lubrizol Corp., 753 F.3d 594 (6th Cir. 2014) .....................................................9
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`
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`STATUTES AND RULES
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`Clayton Act, 15 U.S.C. § 12 et seq. ............................................................................2, 4, 8, 12, 25
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`§ 7, 15 U.S.C. § 18 ..................................................................................2, 9, 12, 13, 14, 15,
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`16, 17, 18, 22, 25, 26
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`
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`§ 16, 15 U.S.C. § 26 ...............................................................................................4, 8, 9, 10
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`Sherman Act, 15 U.S.C. § 1 et seq. ...........................................................................................2, 26
`
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`§ 2, 15 U.S.C. § 2 .................................................................................2, 3, 9, 20, 22, 26, 28
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`Fed. R. Civ. P. 12(b)(6)....................................................................................................................8
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`
`
`ADMINISTRATIVE MATERIALS
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`U.S. Dep’t of Justice & Fed. Trade Comm’n, Horizontal Merger Guidelines
`(2010) .................................................................................................................................17
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`
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`OTHER MATERIALS
`
`Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law:
`
`
`(1998) .................................................................................................................................19
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`
`
` (4th ed. 2020) ........................................................................................................12, 17, 26
`
`Mem. Amicus Curiae of the United States Regarding Microsoft Corp.’s Mot.
`for Dismissal of the Non-Settling States’ Demand for Equitable Relief,
`New York v. Microsoft Corp., No. 98-cv-1233 (D.D.C. Apr. 15, 2002) .......................... 8-9
`
`Richard A. Posner, Antitrust Policy and the Supreme Court: An Analysis of the
`Restricted Distribution Horizontal Merger and Potential Competition
`Decisions, 75 Colum. L. Rev. 282 (1975) .........................................................................17
`
`17 Charles A. Wright et al., Federal Practice and Procedure (1988) .............................................6
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`v
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`INTRODUCTION
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`The complaint filed by the State Attorneys General does not and cannot assert that their
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`citizens paid higher prices, that output was reduced, or that any objective measure of quality
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`declined as a result of Facebook’s challenged actions. Instead, the States, even more explicitly
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`than the Federal Trade Commission (“FTC”), ground their lawsuit in public policy concerns –
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`digital privacy, for example – that are not competition-law concerns. And, like the FTC, the
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`States focus their attacks on what Facebook did long ago: its acquisitions of Instagram (2012)
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`and WhatsApp (2014), and its refusal to assist rivals by giving them free and unfettered access to
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`its proprietary Platform (2011-2018). These two acquisitions and the Platform policies were
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`openly disclosed at the time, and the acquisitions were carefully reviewed and cleared by the
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`FTC. For nearly a decade (six years for WhatsApp), the States did not think there was a
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`competitive problem with any of these things. Their afterthought claims are brought by the
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`wrong parties, are untimely, and are empty as a matter of antitrust law.
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`The States’ complaint fails on multiple grounds.
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`First, the States lack standing to bring this case. They sue not as federal law enforcers or
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`for injuries suffered by the States themselves but as “parens patriae” on behalf of their citizens.
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`To have standing to sue in that capacity, the States must allege not only cognizable antitrust
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`injury to their citizens but also a quasi-sovereign interest that is distinct from any citizen injury.
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`See Illinois Brick Co. v. Illinois, 431 U.S. 720, 733 n.14 (1977); Alfred L. Snapp & Son, Inc. v.
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`Puerto Rico, 458 U.S. 592, 602 (1982). The States have alleged no such quasi-sovereign
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`interest. They assert only the rights of citizens who have brought their own cases – flawed as
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`they are – elsewhere in the federal court system. Their complaint should therefore be dismissed.
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`See infra Part I.
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`Case 1:20-cv-03589-JEB Document 114-1 Filed 03/10/21 Page 8 of 35
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`Second, the States’ claims based on Facebook’s acquisitions are barred by the doctrine of
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`laches, or unfair delay. The States waited far too long to act – far longer than the four years that
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`is the outer limit of the yardstick for laches when States and private parties sue under federal
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`antitrust laws. Facebook would be unfairly prejudiced if the case were allowed to proceed. Both
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`the inordinate delay after the States’ claims accrued in 2012 (Instagram) and 2014 (WhatsApp),
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`and the prejudice to Facebook if this challenge were allowed to proceed now, after Facebook
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`invested billions of dollars and set business strategy in reliance on the governments’ decisions,
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`are apparent on the face of the complaint, which should therefore be dismissed. Another federal
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`district court so held last year in dismissing similar claims under the doctrine of laches. See
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`Reveal Chat Holdco, LLC v. Facebook, Inc., 471 F. Supp. 3d 981, 990-92 (N.D. Cal. 2020)
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`(dismissing Clayton Act Section 7 and Sherman Act Section 2 claims in putative class action
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`because laches barred a “challenge [to] Facebook’s 2012 and 2014 acquisitions of Instagram and
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`WhatsApp”). See infra Part II.
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`Third, the States fail to state a plausible claim under Section 7, for two basic reasons. To
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`begin, they have alleged only that Instagram and WhatsApp were potential competitors and have
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`only speculated that these potential rivals could have brought benefits to competition and
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`consumers. The only support for this speculation is a small handful of emails and messages
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`reflecting Facebook executives’ own speculation about what might happen in the future with
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`these and many other potential rivals. This is insufficient as a matter of law. Moreover, no court
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`has adopted the theory the States seek to enshrine in law for the first time. The States’ complaint
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`fails even to check the boxes of, much less allege facts to satisfy, the test the FTC itself has
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`proposed for similar “potential competitor” claims. There are no pleaded facts sufficient to
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`establish that, at the time of the acquisitions, it was likely that either Instagram or WhatsApp was
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`2
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`poised to enter the claimed relevant product market, and even less basis for an entirely
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`implausible claim that they were the only potential entrants capable of bringing the benefits of
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`competition to consumers. See infra Part III.
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`Fourth, the States’ Section 2 claim tracks the FTC’s parallel claim, and their complaint
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`likewise fails to plead the elements of that claim. The States’ market-definition allegations
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`(which mirror those of the FTC essentially verbatim) and the States’ assertions that Facebook has
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`monopoly power fail to pass muster under Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007).
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`Nor do the States allege exclusionary conduct under settled antitrust standards: the States’ “buy-
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`or-bury” theme, accompanied by vague assertions that the impact of an entire course of conduct
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`was greater than the sum of its parts, does not relieve the States of the obligation to plead facts
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`establishing that Facebook’s actions violated a duty under the antitrust laws and harmed
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`competition. The States provide additional atmospherics but rely almost entirely on the same
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`three lawful actions challenged by the FTC; they allege no facts establishing a plausible claim
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`that Facebook engaged in unlawful exclusionary conduct that harmed competition and ultimately
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`consumers. See infra Part IV.
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`BACKGROUND
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`The background relevant to both the instant motion and the parallel motion to dismiss the
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`FTC action is set forth in the Memorandum in Support of Facebook’s Motion To Dismiss FTC’s
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`Complaint, Case No. 1:20-cv-03590-JEB (D.D.C. Mar. 10, 2021) (“FTC Br.”). The States’
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`divergent and supplemental factual allegations are discussed below at Parts III and IV.
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`3
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`ARGUMENT
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`I.
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`THE STATES DO NOT HAVE PARENS PATRIAE STANDING
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`To prosecute this action the States must have standing, or the legal right to proceed. See
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`Manitoba v. Bernhardt, 923 F.3d 173, 178 (D.C. Cir. 2019) (“A State’s standing depends on the
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`capacity in which it initiates a lawsuit.”). The States claim standing to sue under Section 16 of
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`the Clayton Act, 15 U.S.C. § 26, purportedly as parens patriae “to protect the economic
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`wellbeing of their states and residents,” Compl. ¶ 18, ECF No. 70. But the complaint’s factual
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`allegations fail to support parens patriae standing, which requires both actionable antitrust injury
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`to the States’ citizens and also harm to the States’ own distinct quasi-sovereign interests. See
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`Georgia v. Pennsylvania R.R. Co., 324 U.S. 439, 447, 450-51 (1945) (recognizing parens patriae
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`standing under Section 16 where “the economy of Georgia and the welfare of her citizens have
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`seriously suffered” such that Georgia had “‘quasi-sovereign’ interests” “apart from that of
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`particular individuals”). This cannot simply be a hand-wave argument that, where citizens are
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`affected, states suffer too. See Alfred L. Snapp, 458 U.S. at 602 (“A quasi-sovereign interest must
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`be sufficiently concrete to create an actual controversy between the State and the defendant.”).
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`The States fail to establish standing, and the case must be dismissed, because there are no
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`facts alleged to show that Facebook injured any of the States’ concrete, quasi-sovereign interests.
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`The States have no sovereign interest in enforcement of the federal antitrust laws, see Illinois
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`Brick, 431 U.S. at 733 n.14, and they assert no pecuniary or proprietary interest “apart from the
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`interests of particular private parties,” Alfred L. Snapp, 458 U.S. at 607; see Pennsylvania v.
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`Kleppe, 533 F.2d 668, 673 (D.C. Cir. 1976) (“states suing parens patriae are limited to causes in
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`which the state itself can be said to have a quasi-sovereign interest”; affirming dismissal).
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`“Examples of quasi-sovereign interests include abating a public nuisance, preventing
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`environmental pollution, or avoiding economic damage of such severity and pervasiveness that it
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`4
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`causes injury not only to individual citizens, but to the welfare, prosperity, and economic
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`standing of the State as a whole.” Navajo Nation v. Wells Fargo & Co., 344 F. Supp. 3d 1292,
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`1311 (D.N.M. 2018) (dismissing complaint for failure to establish parens patriae standing).
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`Because the States’ complaint is based solely on supposed economic harm – and not other harms
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`to citizens’ general health or welfare, see Compl. ¶¶ 18-19 – the States are required to allege
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`facts establishing that the alleged conduct caused “severe and generalized” harm to each State’s
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`economy. Kleppe, 533 F.2d at 675. Allegations like the States’ have never been held to meet
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`that standard. For example, the Supreme Court recognized a state’s quasi-sovereign interest in
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`disrupting an alleged rail freight price-fixing conspiracy based on facts demonstrating the
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`pervasive impact of railroad rates on all sectors of the state’s World War II-era economy. See
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`Georgia, 324 U.S. at 450 (anticompetitive rates could “stifle, impede, or cripple old industries
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`and prevent the establishment of new ones,” thus “arrest[ing] the development of a State or
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`put[ting] it at a decided disadvantage”). These were serious harms distinct from those suffered
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`by the ratepayers themselves. A similar impact on “competition within the state” – given the
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`pervasive reliance of enterprises in each of the United States on “PCs running on Microsoft
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`software” – was recognized as a basis for parens patriae standing in New York v. Microsoft
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`Corp., 209 F. Supp. 2d 132, 149-55 (D.D.C. 2002) (addressing parens patriae standing in dicta
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`because Microsoft’s belated argument was “hobbled at the outset by the existing law of the
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`case”).
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`By contrast, where challenged conduct affects only individual citizens – even many of
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`them – there is no basis for the States to pursue those claims as parens patriae. See Washington
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`v. Chimei Innolux Corp., 659 F.3d 842, 847 (9th Cir. 2011) (to bring a claim in its parens patriae
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`capacity, the sovereign must allege both “injury to a sufficiently substantial segment of its
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`5
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`population” and “an interest apart from the interests of particular private parties”); Satsky v.
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`Paramount Commc’ns, Inc., 7 F.3d 1464, 1469 (10th Cir. 1993) (“[p]arens patriae standing has
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`been explained on the ground that the plaintiff state is not merely advancing the rights of
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`individual injured citizens”) (quoting 17 Charles A. Wright et al., Federal Practice and
`
`Procedure § 4047, at 223 (1988)).
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`For example, in Navajo Nation, the plaintiff Nation (treated the same as a state for these
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`purposes) alleged that “one of the biggest banks in the United States” had “systematically preyed
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`on Navajo tribal members,” harming the Nation’s citizens. 344 F. Supp. 3d at 1298, 1300.
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`Nevertheless, because the Nation’s claims were “based on allegations that Defendants harmed
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`individual tribal members,” and the Nation “fail[ed] to describe any separate harm to its quasi-
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`sovereign interests,” the court dismissed its federal statutory claims. Id. at 1312-13 (emphasis
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`added). Similarly, in In re Packaged Seafood Products Antitrust Litigation, the court dismissed
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`a claim, based on the allegation that citizens of the Cherokee Nation had overpaid for packaged
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`tuna, for want of plausible allegations that there was “injury to the Cherokee Nation” apart from
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`overpayments by those citizens. 338 F. Supp. 3d 1079, 1096-97 (S.D. Cal. 2018).
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`Here, the States have made no fact-based claim of any “interest apart from the interests of
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`particular private parties.” Alfred L. Snapp, 458 U.S. at 607. They assert (¶ 18) an interest in
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`“the economic wellbeing of their states,” but that is a legal conclusion – a “formulaic recitation”
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`of an “element” of a parens patriae cause of action – supported by no facts and thus entitled to
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`no weight on a motion to dismiss. Twombly, 550 U.S. at 555-56. And the States allege no more:
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`they do not even assert that Facebook’s conduct threatens some State economic interest. Rather,
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`they allege only that some of their citizens who use Facebook have had a supposedly lower
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`“quality” experience. See Compl. ¶¶ 235, 247-250. Taking those allegations as true says
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`Case 1:20-cv-03589-JEB Document 114-1 Filed 03/10/21 Page 13 of 35
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`nothing of any “severe and generalized” harm to the States’ economies, Kleppe, 533 F.2d at 675,
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`or of any injury to the “welfare, prosperity, and economic standing of the State as a whole,”
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`Navajo Nation, 344 F. Supp. 3d at 1311 (emphasis added).
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`The conclusion that the States are not appropriate plaintiffs is reinforced by the fact that
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`their allegedly aggrieved citizens can and have sought relief for the same supposed injuries.
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`Other private plaintiffs have filed numerous consumer class actions alleging almost exactly the
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`same facts and legal theories as those alleged by the States.1 The existence of citizens “capable
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`of bringing suit to redress these injuries” should “prevent” the States “from bringing suit as
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`parens patriae.” In re Tobacco/Governmental Health Care Costs Litig., 83 F. Supp. 2d 125, 134
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`(D.D.C. 1999) (granting motion to dismiss); see also, e.g., Missouri ex rel. Koster v. Harris, 847
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`F.3d 646, 652 (9th Cir. 2017) (affirming dismissal; noting “parens patriae standing is
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`inappropriate where an aggrieved party could seek private relief”; collecting cases); Kleppe, 533
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`F.2d at 675 (stating that parens patriae standing is rarely appropriate in “the presence or absence
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`of a more appropriate party or parties capable of bringing the suit”); In re Packaged Seafood,
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`338 F. Supp. 3d at 1097 (“perhaps the proper recourse is for individual consumers to join
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`putative class actions . . . or bring their own claims”).
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`To be sure, the claims of the individual and class plaintiffs are themselves flawed on their
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`face. See, e.g., Feitelson v. Google Inc., 80 F. Supp. 3d 1019, 1028-29 (N.D. Cal. 2015) (holding
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`that general allegations of “threatened harm to innovation and consumer choice” are “entirely too
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`conclusory and speculative” to establish antitrust injury). But those defects do not improve the
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`1 The States themselves have filed notices of related cases concerning nine such private
`actions. ECF No. 5 (Dec. 9, 2020); ECF No. 6 (Dec. 9, 2020); ECF No. 9 (Dec. 11, 2020); ECF
`No. 14 (Dec. 14, 2020); ECF No. 56 (Dec. 22, 2020); ECF No. 85 (Jan. 6, 2021); ECF No. 86
`(Jan. 6, 2021); ECF No. 109 (Jan. 29, 2021); ECF No. 110 (Jan. 29, 2021).
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`Case 1:20-cv-03589-JEB Document 114-1 Filed 03/10/21 Page 14 of 35
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`States’ argument for proceeding here. The absence of cognizable antitrust injury to their citizens
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`is likewise grounds for dismissal of the States’ suit. See Illinois Brick, 431 U.S. at 733 n.14
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`(explaining that parens patriae suits create “no new substantive liability” under the antitrust
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`laws, but instead are a “procedural device” for states to act “on behalf of their citizens”); Utah
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`Div. of Consumer Prot. v. Stevens, 398 F. Supp. 3d 1139, 1147 (D. Utah 2019) (granting motion
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`to dismiss parens patriae action where state alleged only “that its citizens share the general
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`interests it has identified” in preventing fraudulent business practices, without alleging anything
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`more than an “indirect and amorphous” harm in fact).
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`II.
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`LACHES BARS THE STATES’ CLAIMS
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`The States’ belated claims for equitable relief are barred by the doctrine of laches, which
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`applies where a plaintiff “unreasonably delays in filing a suit” resulting in “prejudice” to the
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`defendant. See, e.g., Nat’l R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 121-22 (2002).
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`Where, as here, the delay and the resulting harm to the defendant are clear on the face of the
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`complaint, federal courts will apply the doctrine to dismiss the claims under Federal Rule of
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`Civil Procedure 12(b)(6). See Reveal Chat, 471 F. Supp. 3d at 991-92.
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`
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`The States proceed under Section 16 of the Clayton Act, which permits “[a]ny person” to
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`seek injunctive relief “against threatened loss or damage by a violation of the antitrust laws . . .
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`when and under the same conditions and principles as injunctive relief against threatened conduct
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`that will cause loss or damage is granted by courts of equity.” 15 U.S.C. § 26. The States, as
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`“any person,” are therefore like any other private litigant and are subject to the same doctrinal
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`limitations. See New York v. Kraft Gen. Foods, Inc., 862 F. Supp. 1030, 1033 (S.D.N.Y.) (New
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`York treated like any other “private party”), aff’d, 14 F.3d 590 (2d Cir. 1993) (table); Mem.
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`Amicus Curiae of the United States Regarding Microsoft Corp.’s Mot. for Dismissal of the Non-
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`Settling States’ Demand for Equitable Relief at 4, New York v. Microsoft Corp., No. 98-cv-1233
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`Case 1:20-cv-03589-JEB Document 114-1 Filed 03/10/21 Page 15 of 35
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`(D.D.C. Apr. 15, 2002) (“[The states] do not stand on equal footing with the United States as
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`enforcers of the federal antitrust laws. . . . In pursuing injunctive relief, . . . the States appear
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`before the Court as private parties, not as sovereign law enforcers.”). And the Supreme Court
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`has noted that, when a plaintiff challenges an acquisition under Section 16, “equitable defenses
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`such as laches . . . may protect consummated transactions from belated attacks.” California v.
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`Am. Stores Co., 495 U.S. 271, 295-96 (1990); see id. at 298 (Kenne