Case 1:21-md-02989-CMA Document 413 Entered on FLSD Docket 09/21/2021 Page 1 of 49
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF FLORIDA
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`CASE NO. 21-2989-MDL-ALTONAGA/Torres
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`IN RE:
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`JANUARY 2021 SHORT SQUEEZE
`TRADING LITIGATION
`____________________________________/
`
`This Document Relates to:
`
`ALL ANTITRUST ACTIONS
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`ANTITRUST PLAINTIFFS’ OPPOSITION TO
`DEFENDANTS’ MOTION TO DISMISS THE COMPLAINT
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`Case 1:21-md-02989-CMA Document 413 Entered on FLSD Docket 09/21/2021 Page 2 of 49
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`I.
`II.
`III.
`IV.
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`V.
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`TABLE OF CONTENTS
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`Page(s)
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`INTRODUCTION .............................................................................................................. 1
`FACTUAL BACKGROUND ............................................................................................. 2
`LEGAL STANDARD ......................................................................................................... 3
`ARGUMENT ...................................................................................................................... 4
`A.
`Plaintiffs Plead a Plausible Conspiracy in Violation of § 1 of the Sherman Act .... 4
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`B.
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`C.
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`D.
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`E.
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`F.
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`G.
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`Defendants’ Anticompetitive Agreement is Per Se Unlawful ............................... 21
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`Plaintiffs’ Allegations Suffice Under the Quick Look Approach .......................... 28
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`Plaintiffs’ Allegations Satisfy the Rule of Reason ................................................ 28
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`Plaintiffs’ Claims Are a Paradigmatic Antitrust Injury ......................................... 31
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`Plaintiffs’ Antitrust Claims Are Not Precluded by Federal Securities Laws ........ 32
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`Peak 6/E*TRADE Holdings/RH Markets cannot be dismissed ........................... 39
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`CONCLUSION ................................................................................................................. 40
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`Case 1:21-md-02989-CMA Document 413 Entered on FLSD Docket 09/21/2021 Page 3 of 49
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`Cases
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`TABLE OF AUTHORITIES
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`Page(s)
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`Am. Soc. of Mech. Engineers, Inc. v. Hydrolevel Corp., 456 U.S. 556 (1982) ..............................39
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`Am. Tobacco Co. v. United States, 328 U.S. 781 (1946) .........................................................11, 15
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`Anderson News, L.L.C. v. Am. Media, Inc., 680 F.3d 162 (2d Cir. 2012) .....................................10
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`Anderson News, L.L.C. v. Am. Media, Inc., 899 F.3d 87 (2d Cir. 2018) .........................................9
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`Anderson v. Shipowners Ass’n of the Pac. Coast, 272 U.S. 359 (1926) ........................................24
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`Apex Oil Co. v. DiMauro, 822 F.2d 246 (2d Cir.) .........................................................................11
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`Arandell Corp. v. Centerpoint Energy Servs., Inc., 900 F.3d 623 (9th Cir. 2018) ..................39, 40
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`Arizona v. Maricopa Cnty. Med. Soc’y, 457 U.S. 332 (1982) .......................................................21
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`Ashcroft v. Iqbal, 556 U.S. 662 (2009) ....................................................................................3, 4, 5
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`Austin v. Blue Cross & Blue Shield of Ala., 903.F.2d 1385 (11th Cir. 1990) ................................32
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`Auto. Alignment & Body Serv., Inc. v. State Farm Mut. Auto. Ins. Co., 953 F.3d
`707 (11th Cir. 2020) ...................................................................................................................8
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`Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) .................................................................. passim
`
`Beltz Travel Serv., Inc. v. Int'l Air Transp. Ass’n, 620 F.2d 1360 (9th Cir. 1980) ........................15
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`In re Blue Cross Blue Shield Antitrust Litig., 308 F. Supp. 3d 1241 (N.D. Ala.
`2018) ........................................................................................................................................24
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`Broad. Music, Inc. v. Columbia Broad. Sys., Inc., 441 U.S. 10 (1979) .............................22, 25, 29
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`Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364 (11th Cir. 1997) ........................4
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`Brown v. Pro Football, Inc., 518 U.S. 231 (1996) ........................................................................24
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`Cal. Dental Ass’n v. Fed. Trade Comm’n, 526 U.S. 756 (1999) ...................................................28
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`Cement Mfrs. Protective Ass’n v. United States, 268 U.S. 588 (1925) ...........................................7
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`ChoiceParts, LLC v. Gen. Motors Corp., 203 F. Supp. 2d 905 (N.D. Ill. 2002) .....................16, 27
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`City of Tuscaloosa v. Harcros Chems., 158 F.3d 548 (11th Cir. 1998) ........................8, 11, 13, 14
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`Conley v. Gibson, 355 U.S. 41 (1957) .............................................................................................4
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`Cont’l Ore Co. v. Union Carbide and Carbon Corp., 370 U.S. 690 (1962) ...................................5
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`Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752 (1984) .........................................21, 39, 40
`
`In re Credit Default Swaps Antitrust Litig., No. 13md2476 (DLC), 2014 WL
`4379112 (S.D.N.Y. Sept. 4, 2014) ...........................................................................................34
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`Credit Suisse Securities (USA) LLC v. Billing, 551 U.S. 264 (2007) .................................... passim
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`Dahl v. Bain Capital Partners, LLC, 589 F. Supp. 2d 112 (D. Mass. 2008) .................................37
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`DeLong Equip. Co. v. Wash. Mills Abrasive Co., 887 F.2d 1499 (11th Cir. 1989).........................5
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`In re Delta/Airtran Baggage Fee, 245 F. Supp. 3d 1343 (N.D. Ga. 2017) ................................8, 11
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`In re Delta/AirTran Baggage Late Fee, 733 F. Supp. 2d at 1348 (N.D. Ga. 2017) .........................8
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`In re Diisocyanates Antitrust Litig., No. 18-1001, 2020 WL 1140244 (W.D. Pa.
`Mar. 9, 2020)............................................................................................................................18
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`In re Disposable Contact Lens Antitrust Litig., 215 F. Supp. 3d 1272 (M.D. Fla.
`2016) ................................................................................................................................ passim
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`Elec. Trading Grp., LLC v. Banc of Am. Sec. LLC, 588 F.3d 128 (2d Cir. 2009) ................. passim
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`Erickson v. Pardus, 551 U.S. 89 (2007) ..........................................................................................3
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`ES Dev., Inc. v. RWM Enters., Inc., 939 F.2d 547 (8th Cir. 1991) ................................................33
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`In re Ethylene Propylene Diene Monomer (EPDM) Antitrust Litig., 681 F. Supp.
`2d 141 (D. Conn. 2009) ...........................................................................................................19
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`Fed. Trade Comm’n v. Ind. Fed’n of Dentists, 476 U.S. 447 (1986) ............................................30
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`In re Fla. Cement & Concrete Antitrust Litig., 746 F. Supp. 2d 1291 (S.D. Fla.
`2010) ..............................................................................................................................9, 10, 39
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`Fla. Power & Light Co. v. Allis Chalmers Corp., 85 F.3d 1514 (11th Cir. 1996) ........................40
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`In re Flat Glass Antitrust Litig., 385 F.3d 350 (3d Cir. 2004).....................................11, 12, 15, 16
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`In re Generic Pharm. Pricing Antitrust Litig., 338 F. Supp. 3d 404 (E.D. Pa.
`2018) ............................................................................................................................15, 18, 19
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`Geneva Pharms. Tech. Corp. v. Barr Labs. Inc., 386 F.3d 485 (2d Cir. 2004) .............................29
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`Gordon v. N.Y. Stock Exch., Inc., 422 U.S. 659 (1975) .................................................................34
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`California ex rel. Harris v. Safeway Inc., 651 F.3d 1118 (9th Cir. 2011) (en banc) .....................28
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`In re High Fructose Corn Syrup Antitrust Litig., 295 F.3d 651 (7th Cir. 2002) .......................8, 19
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`In re High-Tech Emp. Antitrust Litig., 856 F. Supp. 2d 1103 (N.D. Cal. 2012) ...........................21
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`Hosp. Bldg. Co. v. Trustees of Rex Hosp., 425 U.S. 738 (1976) .....................................................4
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`Image Tech. Servs. v. Eastman Kodak Co., 125 F3d 1195 (9th Cir. 1997) ...................................30
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`In re Ins. Brokerage Antitrust Litig., 618 F.3d 300 (3d Cir. 2010)..................................................6
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`In re Interest Rate Swaps Antitrust Litig., 261 F. Supp. 3d 430 (S.D.N.Y. 2017).........................34
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`Interstate Cir. v. United States, 306 U.S. 208 (1939) ..............................................................14, 26
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`Jack Walters & Sons Corp. v. Morton Bldg., Inc., 737 F.2d 698 (7th Cir. 1984) ...........................7
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`Jackson v. Wal-Mart Stores, Inc., 753 F. App’x 866 (11th Cir. 2018) ............................................4
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`Jacobs v. Tempur-Pedic Int’l, Inc., 626 F.3d 1327 (11th Cir. 2010) .......................................23, 31
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`Jennings v. BIC Corp., 181 F.3d 1250 (11th Cir. 1999) ................................................................40
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`Jones v. Micron Tech. Inc., 400 F. Supp. 3d 897 (N.D. Cal. 2019).................................................8
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`Kotteakos v. United States, 328 U.S. 750 (1946) ...........................................................................26
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`Leegin v. Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877 (2007) ................................23
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`Lenox MacLaren Surgical Corp. v. Medtronic, Inc., 847 F.3d 1221 (10th Cir.
`2017) ..................................................................................................................................39, 40
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`Levine v. Cent. Fla. Med. Affiliates, Inc., 72 F.3d 1538 (11th Cir. 1996) .....................................25
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`In re Loc. TV Advert. Antitrust Litig., No. 18 C 6785, 2020 WL 6557665 (N.D. Ill.
`Nov. 6, 2020) .............................................................................................................................5
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`In re LTL Shipping Servs. Antitrust Litig., No. 1:08-MD-01895-WSD, 2009 WL
`323219 (N.D. Ga. Jan. 28, 2009) ...............................................................................................8
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`Mandeville Island Farms, Inc. v. Am. Crystal Sugar Co., 334 U.S. 219 (1948) ...........................24
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`In re Marine Hose Antitrust Litig., MDL No. 1888, 2009 WL 10692670 (S.D. Fla.
`May 26, 2009) ..........................................................................................................................40
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`Mayor & City Council of Balt., Md. v. Citigroup, Inc., Nos. 08-cv-7746 (BSJ), 08-
`cv-7747 (BSJ), 2010 WL 430771 (S.D.N.Y. Jan. 26, 2010) ...................................................37
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`In re: McCormick & Co., Inc., 217 F. Supp. 3d 124 (D.D.C. 2016) .............................................16
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`Merck-Medco Managed Care, LLC v. Rite Aid Corp., No. 98-2847, 1999 WL
`691840 (4th Cir. 1999) .............................................................................................................11
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`Mitchael v. Intracorp, Inc., 179 F.3d 847 (10th Cir. 1999) ...........................................................39
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`In re Musical Instruments & Equip. Antitrust Litig., 798 F.3d 1186 (9th Cir. 2015) ..........4, 11, 26
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`N. Jackson Pharm., Inc. v. Express Scripts Inc., 345 F. Supp. 2d 1279 (N.D. Ala.
`2004) ..........................................................................................................................................9
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`N. Pac. Ry. Co. v. United States, 356 U.S. 1 (1958) ................................................................21, 23
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`In re Nasdaq Mkt-Makers Antitrust Litig., 894 F. Supp. 703 (S.D.N.Y. 1995).........................7, 35
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`Nat’l Bancard Corp. v. VISA U.S.A., Inc., 779 F.2d 592 (11th Cir. 1986) ....................................29
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`Nat’l Coll. Ath. Ass’n v. Alston, 141 S.Ct. 2141 (2021) ................................................................28
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`Nat'l Coll. Ath. Ass'n v. Bd. of Regents of Univ. of Okla., 468 U.S. 85 .........................................31
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`In re Nat’l Football League’s Sunday Ticket Antitrust Litig., 933 F.3d 1136 (9th
`Cir. 2019) .....................................................................................................................22, 23, 32
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`Nat’l Soc’y of Prof’l Eng’rs v. United States, 435 U.S. 679 (1978) ..............................................23
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`Newcal Indus., Inc. v. Ikon Off. Sol., 513 F.3d 1038 (9th Cir. 2008) ............................................31
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`Ohio v. Am. Express Co., 138 S. Ct. 2274 (2018) .......................................................28, 29, 30, 31
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`Persian Gulf Inc. v. BP W. Coast Prods. LLC, 324 F. Supp. 3d 1142 (S.D. Cal.
`2018) ..........................................................................................................................................4
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`In re Plasma-Derivative Protein Therapies Antitrust Litig., 764 F. Supp. 2d 991
`(N.D. Ill. 2011).....................................................................................................................5, 13
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`Polk Bros. v. Forest City Enters., 776 F.2d 185 (7th Cir. 1985) ...................................................22
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`Procaps S.A. v. Patheon Inc., 36 F. Supp. 3d 1306 (S.D. Fla. 2014) ......................................22, 29
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`Procaps S.A. v. Patheon, Inc., 845 F.3d 1072 (11th Cir. 2016) ..............................................23, 25
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`In re Publication Paper Antitrust Litigation, 690 F.3d 51 (2d Cir. 2012) .....................................24
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`Radovich v. Nat’l Football League, 352 U.S. 445 (1957) .............................................................24
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`In re Salmon, Case No. 19-21551-CIV-ALTONAGA/Louis, 2021 WL 1109128
`(S.D. Fla. Mar. 23, 2021) ................................................................................................. passim
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`Schine Chain Theatres, Inc. v. United States, 334 U.S. 110 (1948) ..............................................33
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`SD3, LLC v. Black & Decker (U.S.) Inc., 801 F.3d 412 (4th Cir. 2015) .........................................1
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`Seagood Trading Corp. v. Jerrico, Inc., 924 F.2d 1555 (11th Cir. 1991) .......................................5
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`Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497 (2001) ..................................................2
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`Spain v. Brown & Williamson Tobacco Corp., 363 F.3d 1183 (11th Cir. 2004).............................4
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`Spanish Broad. Sys. of Fla., Inc. v. Clear Channel Commc’ns., Inc., 376 F.3d
`1065 (11th Cir. 2004) ...............................................................................................................13
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`Starr v. Sony BMG Music Entm’t, 592 F.3d 314 (2d Cir. 2010) .....................................................5
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`State Oil v. Khan, 522 U.S. 3 (1997) .............................................................................................23
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`In re Terazosin Hydrochloride Antitrust Litig., 352 F.Supp.2d 1279 (S.D. Fla.
`2005) ........................................................................................................................................22
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`Texaco Inc. v. Dagher, 547 U.S. 1 (2006) .....................................................................................25
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`Todd v. Exxon Corp., 275 F.3d 191 (2d Cir. 2001) .................................................................29, 30
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`Tops Mkts. Inc. v. Quality Mkts. Inc., 142 F.3d 90 (2d Cir. 1998) ................................................29
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`Toys “R” Us, Inc. v. Fed. Trade Comm’n., 221 F.3d 928 (2000) ...........................................26, 27
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`United Am. Corp. v. Bitmain, Inc., No. 18-CV-25106, 2021 WL 1807782 (S.D.
`Fla. Mar. 31, 2021) ....................................................................................................................5
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`United States v. Akwuba, 7 F.4th 1299 (11th Cir. 2021) ...........................................................7, 15
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`United States v. Apple, Inc., 791 F.3d 290 (2d Cir. 2015) .............................................9, 21, 26, 27
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`United States v. eBay, Inc., 968 F. Supp. 2d 1030 (N.D. Cal. 2013) .............................................21
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`United States v. Falstaff Brewing Corp., 410 U.S. 526 (1973) .......................................................8
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`United States v. Gen. Motors Corp., 384 U.S. 127 (1996) ......................................................24, 26
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`United States v. Socony-Vacuum Oil Co., 310 U.S. 150 (1940) ..............................................25, 32
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`United States v. Topco Assocs., Inc., 405 U.S. 596 (1972)............................................................21
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`United States v. Vernon, 723 F.3d 1234 (11th Cir. 2013) ...............................................................7
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`Universal Express, Inc. v. U.S. Sec. Exchange Comm’n, 177 F. App’x 52 (11th
`Cir. 2006) .................................................................................................................................37
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`In re Urethane Antitrust Litig., 913 F. Supp. 2d 1145 (D. Kan. 2012)..........................................16
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`Verizon Commc’ns, Inc. v. Law Offs. of Curtis V. Trinko, LLP, 540 U.S. 398
`(2004) .......................................................................................................................................34
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`West Penn Allegheny Health System, Inc. v. UPMC, 627 F.3d 85 (3d Cir. 2010) ..........................5
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`White Motor Co. v. United States, 372 U.S. 253 (1963) ................................................................29
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`Williamson Oil Co. v. Philip Morris USA, 346 F.3d 1287 (11th Cir. 2003) .............................9, 10
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`Statutes
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`Clayton Act, 15 U.S.C. § 15 ....................................................................................................33, 34
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`Copyright Act, 17 U.S.C. § 1 .........................................................................................................25
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`Dodd-Frank Wall Street Reform and Consumer Protection Act, 124 Stat. 1376 .................. passim
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`Securities Exchange Act, 15 U.S.C. § 78a ............................................................................. passim
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`Sherman Act, 15 U.S.C. § 3 .....................................................................................................1, 3, 5
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`Other Authorities
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`AREEDA & HOVENKAMP, ANTITRUST LAW (2d ed. 2003) ........................................................10, 30
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`HOVENKAMP, ANTITRUST LAW (2d ed. 2005) ..........................................................................22, 28
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`AREEDA, ANTITRUST LAW (2d ed. 2007) .......................................................................................21
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`POSNER, ANTITRUST LAW (2d ed. 2001) ........................................................................................19
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`SEC, Thinking About Investing in the Latest Hot Stock? (Jan. 30, 2021),
`https://www.sec.gov/oiea/investor-alerts-and-bulletins/risks-short-term-
`trading-based-socialmedia-investor-alert .................................................................................38
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`Case 1:21-md-02989-CMA Document 413 Entered on FLSD Docket 09/21/2021 Page 9 of 49
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`I.
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`INTRODUCTION
`Plaintiffs’ Corrected Consolidated Class Action Complaint (the “CCAC”) plausibly alleges
`that Defendants entered an agreement, on or about January 27, 2021, to restrict retail investors
`from purchasing the Relevant Securities1 in violation of Section 1 of the Sherman Act, 15 U.S.C.
`§ 1. While not required, the CCAC goes further by alleging the “who, what, where, and when” of
`Defendants’ agreement—it explains how the financial services market is extraordinarily
`susceptible to collusion, how Defendants had the motive and opportunity to enter into the
`anticompetitive agreement, and how they monitored and enforced their agreement. See SD3, LLC
`v. Black & Decker (U.S.) Inc., 801 F.3d 412, 430 (4th Cir. 2015) (“Antitrust complaints . . . that
`include detailed fact allegations as to the who, what, when and where of the claimed antitrust
`misconduct not surprisingly survive dismissal”) (citations and internal quotation marks omitted).
`As Plaintiffs allege, Defendants simultaneously imposed restrictions on their stock trading
`platforms leaving retail investors with no option but to sell or hold the Relevant Securities.
`Defendants did so to suppress the prices of the Relevant Securities and enable Defendant Citadel
`Securities to offload its highly speculative short positions. Plaintiffs allege facts constituting direct
`evidence of the agreement—including emails and communications between high level executives
`at Robinhood, Apex, E*Trade, and Citadel—where Defendants explicitly agreed to restrict the
`purchase of the Relevant Securities. Such direct evidence establishes a per se violation of the
`Sherman Act, and the Court need not draw any further inferences. For Rule 12 purposes the inquiry
`ends there. Nevertheless, Plaintiffs allege additional circumstantial evidence involving all
`Defendants that, when viewed as a whole, plausibly suggest an agreement. These allegations are
`more than sufficient at the pleading stage and Defendants’ Motion to Dismiss (ECF No. 408; the
`“MTD”) should be denied.
`The MTD attacks the CCAC on three grounds. First, Defendants assert that the CCAC fails
`to set forth allegations of an anticompetitive agreement. Defendants are incorrect. The CCAC is
`replete with facts which when proven at trial will constitute evidence—both direct and
`circumstantial—that Defendants entered an anticompetitive agreement to restrict the Relevant
`
`
`1 The Relevant Securities include the following: GameStop (GME); AMC Entertainment (AMC);
`Bed Bath & Beyond (BBY); Blackberry (BB); Express (EXPR); Koss (KOSS); Nokia (NOK);
`Tootsie Roll Industries (TR) and Trivago NV (TRVG). ¶ 6. References to paragraph numbers in
`this brief denote paragraphs in the CCAC (ECF No. 388) unless otherwise indicated.
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`Securities. Second, Defendants claim that the CCAC fails to set forth an antitrust violation either
`under the per se rule or the rule of reason. Here too Defendants’ arguments fail. The determination
`of whether the per se test applies is premature at the pleading stage. Even so, the CCAC sets forth
`a paradigmatic antitrust injury—an agreement to reduce output—that is a per se violation of
`Section 1 of the Sherman Act. Even under the rule of reason, the allegations in the CCAC should
`be sustained. Lastly, Defendants argue that the securities laws preempt Plaintiffs’ antitrust claims.
`Not so. There is no repugnancy between antitrust law and securities law here. Even assuming
`arguendo that there were, Congress has already determined that Plaintiffs’ antitrust claims should
`move forward by embedding into the Dodd-Frank Act an expansive savings clause applicable to
`Plaintiffs’ claims. 12 U.S.C. § 5303 (2012).
`In short, Plaintiffs allege an overarching conspiracy and each Defendants’ role in it..
`Plaintiffs’ allegations detail when Defendants entered into the alleged agreement, including the
`names of key individuals, when the agreements were reached and enforced, and how the
`agreements were implemented. While Defendants offer alternative explanations, these questions
`are not appropriately resolved at the pleading stage, but rather at a later stage in the litigation.2
`Thus, Plaintiffs’ CCAC satisfies Rule 8 and Defendants’ MTD should be denied in its entirety.
`II.
`FACTUAL BACKGROUND
`Leading up to January 27, 2021, retail investors, including Plaintiffs, had been utilizing
`Brokerage Defendants’ platforms to invest in certain stocks (i.e., the Relevant Securities) that,
`based on their research and observation, appeared to be undervalued. ¶ 6. As word of these
`undervalued stocks began to spread, more and more retail investors purchased the Relevant
`Securities causing their share prices to skyrocket. ¶¶ 185, 188-91. Meanwhile, as alleged in the
`CCAC, Citadel Securities, as a market maker, acquired massive short positions in the Relevant
`Securities by taking the sell side of these transactions. ¶¶ 192, 216. (cid:3680)ese short positions exposed
`Citadel Securities to infinite losses if the price of the Relevant Securities continued to rise – which
`
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`2 Plaintiffs’ dismissal of other entities is not a concession that a conspiracy did not occur. Plaintiffs
`voluntarily dismissed those defendants without prejudice. ECF Nos. 319, 380, 396-398, 400-402,
`404. Voluntary dismissal without prejudice is not an adjudication on the merits and carries no
`weight as to the credibility of Plaintiffs’ claims, particularly the voluntary dismissal of other parties
`to the action. See Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 505 (2001) (“Rule
`41(a), which, in discussing the effect of voluntary dismissal by the plaintiff, makes clear that an
`‘adjudication upon the merits’ is the opposite of a ‘dismissal without prejudice’”).
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`is exactly what happened. ¶¶ 157, 406. At the close of market on January 27, 2021, GME’s share
`price increased over 130% from the previous day, while shares of AMC rose over 300%. ¶ 190.
`Rather than cut their losses, Citadel Securities acquired even larger short positions in the
`Relevant Securities after the market closed on January 27, 2021, and did so with the knowledge
`that prices of the Relevant Securities would soon fall. ¶¶ 13, 295. In an unprecedented move, on
`January 28, 2021, Brokerage Defendants imposed purchasing restrictions on some or all of the
`Relevant Securities, which resulted in an immediate and significant price depreciation of the once
`booming stocks. ¶¶ 14-15, 234, 254, 256-66. As a result of the restrictions, retail investors were
`forced to either hold or sell their shares of the Relevant Securities. ¶¶ 16, 235. Plummeting share
`prices and loss of investor confidence forced many retail investors, including Plaintiffs, to sell their
`shares of the Relevant Securities at prices lower than they otherwise would have but for
`Defendants’ collusive behavior, thereby sustaining damages. ¶¶ 16, 27, 32, 37, 41, 255.
`As alleged in the CCAC, Citadel Securities conspired with the Brokerage Defendants and
`the Clearing Defendants to prevent retail investors from purchasing shares of the Relevant
`Securities to artificially suppress share prices so that Citadel Securities could cover its short
`positions and mitigate its potential losses. ¶¶ 14-15, 295-361. In support of Plaintiffs’ claims that
`Defendants conspired to restrain trade in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1,
`Plaintiffs not only allege direct evidence, but also circumstantial evidence—including numerous
`“plus factors” that, when taken together, plausibly demonstrate Defendants’ collusion. ¶¶ 362-440.
`III. LEGAL STANDARD
`“[A] complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual
`allegations[.]” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). Rule 8(a)(2) requires only a
`short and plain statement of a claim for relief to “‘give the defendant fair notice of what
`the . . . claim is and the grounds upon which it rests.’” Erickson v. Pardus, 551 U.S. 89, 93 (2007)
`(quoting Twombly, 550 U.S. at 555); see Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (“To survive
`a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state
`a claim to relief that is plausible on its face’”). (cid:3680)ere are no “heightened” pleading standards for
`antitrust cases. Twombly, 550 U.S. at 570; see also In re Disposable Contact Lens Antitrust Litig.,
`215 F. Supp. 3d 1272, 1300 (M.D. Fla. 2016) (“Twombly does not impose a heightened pleading
`requirement on antitrust complaints.”).
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`3
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`Case 1:21-md-02989-CMA Document 413 Entered on FLSD Docket 09/21/2021 Page 12 of 49
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`Under Rule 12(b)(6) “[w]hen reviewing a motion to dismiss, a court construes the
`complaint in the light most favorable to the plaintiff and takes the factual allegations as true.” In
`re Salmon, Case No. 19-21551-CIV-ALTONAGA/Louis, 2021 WL 1109128, at *9 (S.D. Fla. Mar.
`23, 2021) (citing Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1369 (11th Cir.
`1997)); Jackson v. Wal-Mart Stores, Inc., 753 F. App’x 866, 869 (11th Cir. 2018) (“Iqbal tells us
`we must assume the truth of all well-pleaded allegations except legal conclusions, regardless of
`whether evidence may ultimately support them.”). “A motion to dismiss is granted only when the
`movant demonstrates ‘beyond doubt that the plaintiff can prove no set of facts in support of his
`claim which would entitle him to relief.’” Spain v. Brown & Williamson Tobacco Corp., 363 F.3d
`1183, 1187 (11th Cir. 2004) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957). Particularly in
`antitrust cases, where “‘the proof is largely in the hands of the alleged conspirators,’ dismissals
`prior to giving the plaintiff ample opportunity for discovery should be granted very sparingly.”
`Hosp. Bldg. Co. v. Trustees of Rex Hosp., 425 U.S. 738, 746 (1976) (citation omitted).3
`IV. ARGUMENT
`A.
`Plaintiffs Plead a Plausible Conspiracy in Violation of § 1 of the Sherman Act
`To state a claim under Section 1 of the Sherman Act, Plaintiffs need not plead “detailed
`factual allegations.” Twombly, 550 U.S. at 555. “Proof” of an agreement is not required at the
`pleading stage. See Persian Gulf Inc. v. BP W. Coast Prods. LLC, 324 F. Supp. 3d 1142, 1147 (S.D.
`Cal. 2018) (“(cid:3680)e issue before the Court is whether Plaintiff pleaded sufficient facts to provide a
`plausible basis from which to infer ‘an agreement, tacit or express.’”) (citation omitted). (cid:3680)e
`standard merely “asks for more than a sheer possibility that a defendant has acted unlawfully.”
`Iqbal, 556 U.S. at 678 (emphasis added).
`An agreement in restraint of trade can be established: (i) by direct evidence showing the
`existence of an agreement; (ii) through circumstantial evidence, i.e., a combination of parallel
`conduct and “plus factors,” defined as “economic actions and outcomes that are largely
`inconsistent with unilateral conduct but largely consistent with explicitly coordinated action[;]” or
`(iii) through a combination of direct and circumstantial evidence. In re Musical Instruments &
`
`
`3 Remarkably, Defendants criticize the sufficiency of the CCAC on the basis that Plaintiffs had
`access to some documents. That is not the standard under Rule 8—the CCAC should be judged on
`its face, and it is of no moment that Plaintiffs have obtained access to some documents. Further,
`Defendants omit that many documents were shared only after the consolidated complaint was
`filed.
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`4
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`Case 1:21-md-02989-CMA Document 413 Entered on FLSD Docket 09/21/2021 Page 13 of 49
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`Equip. Antitrust Litig., 798 F.3d 1186, 1194 (9th Cir. 2015); DeLong Equip. Co. v. Wash. Mills
`Abrasive Co., 887 F.2d 1499, 1508 (11th Cir. 1989) (citation omitted).
`Plaintiffs are not required to allege an explicit agreement or specific communications
`among Defendants. See DeLong, 887 F.3d at 1515. Plaintiffs’ claims should be viewed as a whole;
`“[t]he character and effect of a conspiracy are not to be judged by dismembering it and viewing its
`separate parts, but only by looking at it as a whole.” Cont’l Ore Co. v. Union Carbide and Carbon
`Corp., 370 U.S. 690, 699 (1962)) (citation omitted, alteration in original).
`Here, Plaintiffs allege, with particularity, facts constituting direct and circumstantial
`evidence. When viewed together this evidence strongly supports the inference that Defendants
`illegally conspired to restrict retail trading in order to profit from their short sale positions in the
`Relevant Securities in violation of Section 1 of the Sherman act.4 See 15 U.S.C. §