Case 2:20-cv-00424-RAJ Document 51 Filed 03/25/22 Page 1 of 9
`
`The Honorable Richard A. Jones
`
`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF WASHINGTON
`AT SEATTLE
`
`DEBORAH FRAME-WILSON, CHRISTIAN
`SABOL, SAMANTHIA RUSSELL, ARTHUR
`SCHAREIN, LIONEL KEROS, NATHAN
`CHANEY, CHRIS GULLEY, SHERYL
`TAYLOR-HOLLY, ANTHONY COURTNEY,
`DAVE WESTROPE, STACY DUTILL, SARAH
`ARRINGTON, MARY ELLIOT, HEATHER
`GEESEY, STEVE MORTILLARO, CHAUNDA
`LEWIS, ADRIAN HENNEN, GLENDA R.
`HILL, GAIL MURPHY, PHYLLIS HUSTER,
`and GERRY KOCHENDORFER, on behalf of
`themselves and all others similarly situated,
`
`Plaintiffs,
`
`v.
`AMAZON.COM, INC., a Delaware corporation,
`Defendant.
`
`No. 2:20-CV-00424-RAJ
`AMAZON.COM, INC.’S
`MOTION TO CLARIFY OR
`RECONSIDER PORTIONS OF
`THE COURT’S MARCH 11, 2022
`ORDER
`NOTE ON MOTION CALENDAR:
`March 25, 2022
`Oral Argument Requested
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`Case 2:20-cv-00424-RAJ Document 51 Filed 03/25/22 Page 2 of 9
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`TABLE OF CONTENTS
`
`INTRODUCTION ........................................................................................................................ 1
`
`I.
`
`II.
`
`PLAINTIFFS LACK STANDING FOR CLAIMS BASED ON PURCHASES
`FROM “NON-CONSPIRING RETAILERS,” AND PLAINTIFFS FAILED TO
`JOIN AS DEFENDANTS “CO-CONSPIRATOR” SELLERS. ...................................... 2
`
`A.
`
`B.
`
`Most Plaintiffs Lack Standing Based on Purchases from “Non-
`Conspiring Retailers.” ........................................................................................... 2
`
`Even as to Purchases from Sellers Alleged to Be “Co-Conspirators,”
`Plaintiffs Fail to Satisfy the Applicable Pleading Requirements. ......................... 4
`
`THE COURT’S DECISION ON ANTITRUST STANDING DID NOT
`ADDRESS WHETHER PLAINTIFFS HAVE STANDING TO ASSERT THEIR
`SHERMAN ACT SECTION 2 (MONOPOLIZATION) CLAIMS. ................................ 5
`
`CONCLUSION ............................................................................................................................. 6
`
`AMAZON’S MOTION TO CLARIFY (2:20-CV-00424-RAJ) - i
`
`Davis Wright Tremaine LLP
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`Case 2:20-cv-00424-RAJ Document 51 Filed 03/25/22 Page 3 of 9
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`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Cases
`
`In re American Express Anti-Steering Rules Antitrust Litigation,
`19 F. 4th 127 (2d Cir. 2021) ......................................................................................................3
`
`In re ATM Fee Antitrust Litig.,
`686 F.3d 741 (9th Cir. 2012) .....................................................................................................2
`
`In re Coordinated Pretrial Proceedings in Petroleum Products Antitrust
`Litigation,
`691 F.2d 1335 (9th Cir. 1982) ...................................................................................................4
`
`De Coster v. Amazon.com, Inc.,
`No. 2:21-cv-00693-RSM (W.D. Wash.) ....................................................................................6
`
`In re Ditropan XL Antitrust Litig.,
`2007 WL 2978329 (N.D. Cal. Oct. 11, 2007)............................................................................5
`
`Lenhoff Enters., Inc. v. United Talent Agency, Inc.,
`2015 WL 7008185 (C.D. Cal. Sept. 18, 2015) ..........................................................................5
`
`Lorenzo v. Qualcomm Inc.,
`603 F. Supp. 2d 1291 (S.D. Cal. 2009) ......................................................................................1
`
`Rebel Oil, Inc. v. Atl. Richfield Co.,
`51 F.3d 1421 (9th Cir. 1995) .....................................................................................................5
`
`Stanislaus Food Prods. Co. v. USS-Posco Indus.,
`2010 WL 3521979 (E.D. Cal. 2010) ..........................................................................................5
`
`United Food & Com. Workers Loc. 1776 & Participating Emps. Health &
`Welfare Fund v. Teikoku Pharma USA, Inc.,
`74 F. Supp. 3d 1052 (N.D. Cal. 2014) .......................................................................................5
`
`AMAZON’S MOTION TO CLARIFY (2:20-CV-00424-RAJ) - ii
`
`Davis Wright Tremaine LLP
`LAW OFFICES
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`Seattle, WA 98104-1610
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`Case 2:20-cv-00424-RAJ Document 51 Filed 03/25/22 Page 4 of 9
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`INTRODUCTION
`Clarification or reconsideration of the Court’s motion to dismiss Order (Dkt. 48) is
`warranted because the Court’s Order addressed the issue of antitrust standing for only a subset of
`Plaintiffs and claims. A complete ruling on antitrust standing is particularly important because
`antitrust standing “is a threshold requirement that every plaintiff must satisfy to bring a private
`suit under the federal antitrust laws.” Lorenzo v. Qualcomm Inc., 603 F. Supp. 2d 1291, 1300
`(S.D. Cal. 2009).
`The Court found that Plaintiffs have antitrust standing to pursue claims “as direct
`purchasers of alleged antitrust co-conspirators” and, “[b]ased on this,” concluded that it “need
`not address Plaintiffs’ standing under an umbrella theory.” Dkt. 48 at 8. But Plaintiffs admit
`that they did not all purchase from alleged “co-conspirators,” nor are their claims as pled limited
`to such purchases. As a result, the co-conspirator standing doctrine does not provide a basis for
`permitting all Plaintiffs, or the Complaint as a whole, to proceed. To be clear, Amazon
`strenuously disagrees with the notion that sellers in its store are “co-conspirators,” and will show
`why that allegation by Plaintiffs is baseless. But recognizing that, for purposes of this motion,
`Plaintiffs’ allegations must be accepted as true, they do not resolve the antitrust standing issue.
`Plaintiffs’ brief incorrectly treated co-conspirator and umbrella standing theories as if
`they were interchangeable and did not clearly distinguish between those Plaintiffs who purchased
`from third-party sellers who sell on Amazon—the sellers who Plaintiffs label as alleged “co-
`conspirators”—and those who purchased from other e-commerce retailers. Dkt. 19 at 5–7. But
`at least fifteen of the twenty-one named Plaintiffs assert claims based solely on purchases from
`e-commerce retailers who even Plaintiffs admit were not co-conspirators. The Court’s Order did
`not address the antitrust standing of these fifteen Plaintiffs. And their ability to proceed with
`their claims depends entirely on an umbrella theory which Plaintiffs acknowledge the Ninth
`Circuit has never before recognized.
`
`AMAZON’S MOTION TO CLARIFY (2:20-CV-00424-RAJ) - 1
`
`Davis Wright Tremaine LLP
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`Case 2:20-cv-00424-RAJ Document 51 Filed 03/25/22 Page 5 of 9
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`Further, while there are six Plaintiffs who do allege that they made purchases from
`alleged “co-conspirators,” these Plaintiffs also have not met the pleading requirements to
`establish antitrust standing, given that the only conspiracy claims left in this case following the
`Court’s ruling are claims of separate vertical conspiracies. To proceed with such claims on the
`basis of co-conspirator standing, Ninth Circuit law requires Plaintiffs to join as defendants the
`alleged “co-conspirator” sellers. Plaintiffs’ Complaint fails to do that.
`Finally, co-conspirator standing provides no basis for Plaintiffs to proceed on their
`monopolization and attempted monopolization claims, which are not conspiracy claims.
`Because the Court’s Order found standing based only on alleged “co-conspirator” purchases, it
`did not address whether any Plaintiffs have antitrust standing to assert Sherman Act, Section 2
`claims. Because co-conspirator standing cannot apply to Section 2 claims, which are based on
`unilateral conduct by a single firm, the direct purchaser rule is a bar to Plaintiffs’ antitrust
`standing for their Section 2 claims.
`For these reasons, and as explained more fully below, Amazon respectfully requests that
`the Court clarify or reconsider its Order on antitrust standing.
`I.
`Plaintiffs Lack Standing for Claims Based on Purchases from “Non-Conspiring
`Retailers,” and Plaintiffs Failed to Join as Defendants “Co-Conspirator” Sellers.
`A.
`Most Plaintiffs Lack Standing Based on Purchases from “Non-Conspiring
`Retailers.”
`
`In the Ninth Circuit, antitrust standing based on the co-conspirator exception to Illinois
`Brick does not apply to customers who purchase from “non-conspiring retailers” because “the
`price paid by a plaintiff must be set by the conspiracy and not merely affected by the setting of
`another price.” In re ATM Fee Antitrust Litig., 686 F.3d 741, 754 (9th Cir. 2012); see also Dkt.
`29 at 2–4. Plaintiffs allege third-party sellers on Amazon are its co-conspirators, and the Court
`concluded that Plaintiffs pleaded standing to sue Amazon on that basis alone. Amazon strongly
`disagrees that its sellers are co-conspirators, but recognizes that the Court must accept Plaintiffs’
`allegation as true for purposes of this Motion. Even so, unless the Court also rules on umbrella
`standing, its opinion would permit certain named Plaintiffs (and proposed class members) to
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`AMAZON’S MOTION TO CLARIFY (2:20-CV-00424-RAJ) - 2
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`Davis Wright Tremaine LLP
`LAW OFFICES
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`Seattle, WA 98104-1610
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`Case 2:20-cv-00424-RAJ Document 51 Filed 03/25/22 Page 6 of 9
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`proceed without pleading facts sufficient to establish standing because they assert claims based
`on purchases from retailers not alleged to be co-conspirators. With respect to such purchases,
`there is no “co-conspirator standing.”
`At least fifteen of the twenty-one named Plaintiffs assert claims based on products they
`purchased from “non-conspiring retailers.”1 For example, the claims include purchases of a
`ROKU from Best Buy, FAC ¶ 48, a car roof rack from REI, id. ¶ 51, and lotion from CVS, id.
`¶ 58. Best Buy, REI, and CVS are not alleged to be Amazon third-party sellers or co-
`conspirators. Antitrust standing as to these purchases therefore cannot be based on Plaintiffs
`having purchased from alleged “co-conspirators.” Instead, Plaintiffs claim that the prices these
`non-conspirators set were affected by the alleged conspiracies—an umbrella theory of standing.
`Consistent with the Plaintiffs who have been named, the alleged class definition also
`depends on umbrella standing. Plaintiffs allege that the “impact of Amazon’s restraint on its
`third-party sellers is not limited to the third-party sellers’ sales.” FAC ¶ 39 (emphasis added).
`Plaintiffs define “Class Products” to include products purchased from retailers who are not
`alleged to be “co-conspirators.” Plaintiffs expressly allege: “to qualify as a Class Product, it is
`not necessary that the product sold through a competing retail ecommerce channel be sold by an
`Amazon third-party seller.” FAC ¶ 34 (emphasis added).
`Because the claims of most of the named Plaintiffs and the class definition would require
`the Court to accept Plaintiffs’ umbrella theory of standing, the Court must address this issue.
`Failing to do so would be manifest error. Amazon’s motion to dismiss briefing, and the Second
`Circuit’s recent decision in In re American Express Anti-Steering Rules Antitrust Litigation, 19
`F. 4th 127, 134 (2d Cir. 2021), submitted as supplemental authority, show why the Court should
`reject umbrella standing. Dkt. 18 at 9–10; Dkt. 29 at 2–4; Dkt. 42.
`
`1 These plaintiffs are Deborah Frame-Wilson, First Am. Compl. (“FAC”), Dkt. 15 ¶ 46; Samanthia Russell, id. ¶ 48;
`Arthur Scharein, id. ¶ 49; Nathan Chaney, id. ¶ 51; Chris Gulley, id. ¶ 52; Sheryl Taylor-Holly, id. ¶ 53; Anthony
`Courtney, id. ¶ 54; Dave Westrope, id.¶ 55; Stacy Dutill, id. ¶ 56; Sarah Arrington, id. ¶ 57; Mary Elliott, id. ¶ 58;
`Chaunda Lewis, id. ¶ 61; Adrian Hennen, id. ¶ 62; Glenda R. Hill, id. ¶ 63; and Phyllis Huster, id. ¶ 65.
`
`AMAZON’S MOTION TO CLARIFY (2:20-CV-00424-RAJ) - 3
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`Davis Wright Tremaine LLP
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`920 Fifth Avenue, Suite 3300
`Seattle, WA 98104-1610
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`Case 2:20-cv-00424-RAJ Document 51 Filed 03/25/22 Page 7 of 9
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`B.
`
`Even as to Purchases from Sellers Alleged to Be “Co-Conspirators,”
`Plaintiffs Fail to Satisfy the Applicable Pleading Requirements.
`Although the Court concluded that Plaintiffs have antitrust standing to assert claims
`against Amazon based on their purchases from “alleged co-conspirators,” Dkt. 48 at 8, Plaintiffs
`cannot proceed on such claims as currently pled because they have failed to join those alleged
`“co-conspirators” as defendants. Ultimately, the premise that all third parties that elect to sell
`products in Amazon’s stores are automatically “co-conspirators” demonstrates the absurdity of
`Plaintiffs’ allegations, and Amazon strenuously disagrees with that contention. The Ninth
`Circuit nevertheless requires their joinder because Plaintiffs rely on the conspiracy allegations as
`the basis for standing. In In re Coordinated Pretrial Proceedings in Petroleum Products
`Antitrust Litigation, 691 F.2d 1335 (9th Cir. 1982), the Ninth Circuit held that to establish
`standing based on an alleged vertical conspiracy, where Plaintiffs’ claim would otherwise be
`barred by Illinois Brick, joinder of the alleged co-conspirators “is required to prevent a serious
`risk of multiple liability.” Id. at 1342.
`The Court’s Order on the motion to dismiss presents exactly the situation in which the
`Ninth Circuit held joinder is required. The Court dismissed claims of a per se illegal horizontal
`conspiracy, holding that “Plaintiffs have not plausibly alleged a horizontal agreement between
`Amazon and third-party sellers as ‘competitors,’” and Plaintiffs “have not alleged any facts
`supporting a horizontal agreement between . . . the third-party sellers.” Dkt. 48 at 13. The Court
`further held that Plaintiffs’ allegation that Amazon policies restrict third-party sellers’ prices on
`external sites “connotes a vertical relationship, one in which Amazon is not competing with
`third-party sellers, but rather setting requirements as a condition for platform access.” Id. at 12.
`Based on these principles, Plaintiffs can proceed only on the basis of separate vertical
`conspiracies between Amazon and each of the third-party sellers from whom Plaintiffs allege
`they purchased products. Id. at 11–12. By failing to join those sellers as parties, Plaintiffs are
`simply covering up the fact that their case does not involve a single alleged horizontal
`conspiracy, but rather multiple, independent, vertical ones.
`
`AMAZON’S MOTION TO CLARIFY (2:20-CV-00424-RAJ) - 4
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`Case 2:20-cv-00424-RAJ Document 51 Filed 03/25/22 Page 8 of 9
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`In these circumstances, where the third-party sellers’ role as alleged “co-conspirators”
`with Amazon is essential to Plaintiffs’ standing, the Ninth Circuit’s decision in Petroleum
`Products requires that they be named as defendants. Other courts in this Circuit agree, likewise
`holding that alleged “coconspirator intermediaries, whose participation must be demonstrated if a
`vertical conspiracy is to be proved and Illinois Brick circumvented, must be named as
`defendants.” In re Ditropan XL Antitrust Litig., 2007 WL 2978329, at *4 (N.D. Cal. Oct. 11,
`2007); see also Stanislaus Food Prods. Co. v. USS-Posco Indus., 2010 WL 3521979, at *10
`(E.D. Cal. 2010) (“In a vertical conspiracy, plaintiff must name the direct seller as a party
`defendant.”). Because Plaintiffs have not joined the alleged “co-conspirators,” their claims
`should be dismissed.
`II.
`The Court’s Decision on Antitrust Standing Did Not Address Whether Plaintiffs
`Have Standing to Assert Their Sherman Act Section 2 (Monopolization) Claims.
`
`The Court’s Order also did not resolve whether Plaintiffs have antitrust standing to
`proceed with their monopolization and attempted monopolization claims under Sherman Act,
`Section 2. Antitrust standing for those claims cannot rest on co-conspirator standing, because
`monopolization and attempted monopolization claims, by definition, rest on single-firm
`unilateral conduct. Dkt. 29 at 4; see also Rebel Oil, Inc. v. Atl. Richfield Co., 51 F.3d 1421, 1443
`(9th Cir. 1995) (“To pose a threat of monopolization, one firm alone must have the power to
`control market output and exclude competition.”); United Food & Com. Workers Loc. 1776 &
`Participating Emps. Health & Welfare Fund v. Teikoku Pharma USA, Inc., 74 F. Supp. 3d 1052,
`1076 (N.D. Cal. 2014) (“A monopoly, by definition, consists of a single firm, and both
`monopolization and attempted monopolization are single-firm violations.”). “District courts in
`the Ninth Circuit routinely apply th[e] concept” that “a claim under § 2 requires the power to be
`in one entity rather than shared among multiple entities.” Lenhoff Enters., Inc. v. United Talent
`Agency, Inc., 2015 WL 7008185, at *3 (C.D. Cal. Sept. 18, 2015). Illinois Brick bars Plaintiffs’
`
`AMAZON’S MOTION TO CLARIFY (2:20-CV-00424-RAJ) - 5
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`Davis Wright Tremaine LLP
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`920 Fifth Avenue, Suite 3300
`Seattle, WA 98104-1610
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`Case 2:20-cv-00424-RAJ Document 51 Filed 03/25/22 Page 9 of 9
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`Section 2 claims because Plaintiffs do not allege purchases from Amazon, the alleged monopolist
`and the only party alleged to have violated Section 2 of the Sherman Act. Dkt. 18 at 8–10.2
`
`CONCLUSION
`For the reasons set forth above, and in Amazon’s prior submissions, Amazon requests
`that the Court clarify or reconsider its Order to hold that: (1) Plaintiffs have antitrust standing
`for their Sherman Act, Section 1 claim only for claims based on direct purchases from alleged
`“co-conspirators” and only to the extent they join them as defendants; and (2) Plaintiffs, as
`indirect purchasers, lack antitrust standing to sue Amazon under Sherman Act, Section 2.
`
`DATED this 25th day of March, 2022.
`
`Davis Wright Tremaine LLP
`s/ Stephen M. Rummage
`Stephen M. Rummage, WSBA #11168
`MaryAnn Almeida, WSBA #49086
`920 Fifth Avenue, Suite 3300
`Seattle, WA 98104-1610
`Telephone: (206) 757-8136
`Fax: (206) 757-7136
`E-mail: steverummage@dwt.com
`E-mail: maryannalmeida@dwt.com
`Paul, Weiss, Rifkind, Wharton & Garrison LLP
`s/ Karen L. Dunn
`Karen L. Dunn (pro hac vice)
`William A. Isaacson (pro hac vice)
`Amy J. Mauser (pro hac vice)
`Martha L. Goodman (pro hac vice)
`2001 K Street, NW
`Washington, D.C.
`Telephone: (202) 223-7300
`Fax: (202) 223-7420
`E-mail: kdunn@paulweiss.com
`E-mail: wisaacson@paulweiss.com
`E-mail: amauser@paulweiss.com
`E-mail: mgoodman@paulweiss.com
`Attorneys for AMAZON.COM, Inc.
`
`2 Plaintiffs’ counsel have filed a separate action, De Coster v. Amazon.com, Inc., No. 2:21-cv-00693-RSM (W.D.
`Wash.), in which the Plaintiffs are asserting claims based on purchases in Amazon’s store. That case is before Judge
`Martinez.
`
`AMAZON’S MOTION TO CLARIFY (2:20-CV-00424-RAJ) - 6
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`Davis Wright Tremaine LLP
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