Case 2:20-cv-00424-RAJ Document 59 Filed 05/16/22 Page 1 of 30
`
`The Honorable Richard A. Jones
`
`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF WASHINGTON
`AT SEATTLE
`
`Case No. 2:20-cv-00424-RAJ
`AMAZON.COM, INC.’S
`MOTION TO DISMISS SECOND
`AMENDED COMPLAINT
`
`NOTE ON MOTION CALENDAR:
`July 22, 2022
`Oral Argument Requested
`
`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.
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`Case 2:20-cv-00424-RAJ Document 59 Filed 05/16/22 Page 2 of 30
`
`TABLE OF CONTENTS
`
` Page
`
`INTRODUCTION ........................................................................................................................ 1
`BACKGROUND .......................................................................................................................... 4
`A.
`The Court’s Ruling on Amazon’s Motion to Dismiss the First Amended
`Complaint .............................................................................................................. 4
`The Second Amended Complaint’s Theories of Liability .................................... 4
`B.
`ARGUMENT ................................................................................................................................ 6
`I.
`Plaintiffs Have Not Cured the First Amended Complaint’s Standing Defects. ................ 6
`A.
`Plaintiffs Fail to Satisfy the Requirements for Co-Conspirator Standing............. 6
`B.
`Plaintiffs Lack Standing to Assert Claims Based on Purchases from Non-
`Conspiring Sellers under an Umbrella Theory. .................................................. 12
`Plaintiffs Lack Article III Standing to Assert Claims Based on Purchases
`from Third-Party Sellers from Whom Plaintiffs Did Not Purchase. .................. 15
`Plaintiffs’ Attempt to Revive Their Sherman Act, Section 1 Per Se Claims Fails. ........ 17
`Plaintiffs’ Sherman Act, Section 2 Claims Fail to Allege Anticompetitive Conduct
`Because the Fair Pricing Policy’s Plain Language Contradicts Plaintiffs’
`Allegations. ..................................................................................................................... 19
`Plaintiffs Fail to Allege that Each Third-Party Seller Has Market Power and Each
`of the Alleged Vertical Conspiracies Resulted in Anticompetitive Effects. ................... 21
`Plaintiffs’ Cartwright Act Claim Fails for the Same Reasons Their Claims Under
`the Sherman Act Fail. ..................................................................................................... 23
`CONCLUSION ........................................................................................................................... 24
`
`C.
`
`II.
`III.
`
`IV.
`
`V.
`
`AMAZON’S MOTION TO DISMISS (2:20-CV-00424-RAJ) - i
`
`Davis Wright Tremaine LLP
`LAW OFFICES
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`Case 2:20-cv-00424-RAJ Document 59 Filed 05/16/22 Page 3 of 30
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`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Cases
`
`2238 Victory Corp. v. Fjallraven USA Retail, LLC,
`2021 WL 76334 (S.D.N.Y. Jan. 8, 2021) ................................................................................18
`
`In re Abbott Labs. Norvir Anti-Trust Litig.,
`2007 WL 1689899 (N.D. Cal. June 11, 2007) .........................................................................15
`
`In re Am. Express Anti-Steering Rules Antitrust Litig.,
`19 F.4th 127 (2d Cir. 2021) ...............................................................................................13, 14
`
`Antoine L. Garabet, M.D., Inc. v. Autonomous Techs. Corp.,
`116 F. Supp. 2d 1159 (C.D. Cal. 2000) .............................................................................14, 15
`
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009) .................................................................................................................20
`
`Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters,
`459 U.S. 519 (1983) ......................................................................................................... passim
`
`In re ATM Antitrust Fee Litig.,
`686 F.3d 741 (9th Cir. 2012) ...................................................................................6, 10, 11, 12
`
`Bell Atl. Corp. v. Twombly,
`550 U.S. 544 (2007) .................................................................................................................20
`
`Broad. Music, Inc. v. Columbia Broad. Sys., Inc.,
`441 U.S. 1 (1979) .....................................................................................................................18
`
`In re Cipro Cases I & II,
`61 Cal. 4th 116 (2015) .............................................................................................................23
`
`Cont’l T.V., Inc. v. GTE Sylvania Inc.,
`433 U.S. 36 (1977) ...................................................................................................................18
`
`In re Coordinated Pretrial Proceedings in Petroleum Prods. Antitrust Litig.,
`691 F.2d 1335 (9th Cir. 1982) .......................................................................................9, 10, 14
`
`Costco Wholesale Corp. v. AU Optronics Corp.,
`2014 WL 4723880 (W.D. Wash. Sept. 23, 2014) ....................................................................14
`
`Dickson v. Microsoft Corp.,
`309 F.3d 193 (4th Cir. 2002) .............................................................................................21, 22
`
`AMAZON’S MOTION TO DISMISS (2:20-CV-00424-RAJ) - ii
`
`Davis Wright Tremaine LLP
`LAW OFFICES
`920 Fifth Avenue, Suite 3300
`Seattle, WA 98104-1610
`206.622.3150 main · 206.757.7700 fax
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`Case 2:20-cv-00424-RAJ Document 59 Filed 05/16/22 Page 4 of 30
`
`In re Ditropan XL Antitrust Litig.,
`2007 WL 2978329 (N.D. Cal. Oct. 11, 2007)............................................................................9
`
`Edifecs Inc v. TIBCO Software, Inc.,
`756 F. Supp. 2d 1313 (W.D. Wash. 2010) ...............................................................................19
`
`Epic Games, Inc. v. Apple Inc.,
`2021 WL 4128925 (N.D. Cal. Sept. 10, 2021) ........................................................................23
`
`In re EpiPen Direct Purchaser Litig.,
`2022 WL 1017770 (D. Minn. Apr. 5, 2022) ......................................................................21, 22
`
`FTC v. Mylan Labs., Inc.,
`62 F. Supp. 2d 25 (D.D.C. 1999) .............................................................................................15
`
`Gross v. New Balance Athletic Shoe, Inc.,
`955 F. Supp. 242 (S.D.N.Y. 1997) ..........................................................................................14
`
`Hanover Shoe, Inc. v. United Shoe Mach. Corp.,
`392 U.S. 481 (1968) ...................................................................................................................6
`
`Harkins Amusement Enters., Inc. v. Gen. Cinema Corp.,
`850 F.2d 477 (9th Cir.1988) ......................................................................................................8
`
`Ill. Brick Co. v. Illinois,
`431 U.S. 720 (1977) ......................................................................................................... passim
`
`Ixchel Pharma., LLC v. Biogen,
`9 Cal.5th 1130 (2020) ..............................................................................................................23
`
`Jain Irrigation, Inc. v. Netafim Irrigation, Inc.,
`386 F. Supp. 3d 1308 (E.D. Cal. 2019)....................................................................................23
`
`Jones v. Micron Tech. Inc.,
`400 F. Supp. 3d 897 (N.D. Cal. 2000) ...............................................................................14, 16
`
`Lazy Y Ranch Ltd. v. Behrens,
`546 F.3d 580 (9th Cir. 2008) ...................................................................................................20
`
`Leeder v. Nat’l Ass’n of Realtors,
`2022 WL 1307100 (N.D. Ill. May 2, 2022) .............................................................................11
`
`Leegin Creative Leather Prods., Inc. v. PSKS, Inc.,
`551 U.S. 877 (2007) .................................................................................................................18
`
`Lenhoff Enters., Inc. v. United Talent Agency,
`2015 WL 7008185 (C.D. Cal. Sept. 18, 2015) ......................................................................7, 8
`
`AMAZON’S MOTION TO DISMISS (2:20-CV-00424-RAJ) - iii
`
`Davis Wright Tremaine LLP
`LAW OFFICES
`920 Fifth Avenue, Suite 3300
`Seattle, WA 98104-1610
`206.622.3150 main · 206.757.7700 fax
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`Case 2:20-cv-00424-RAJ Document 59 Filed 05/16/22 Page 5 of 30
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`Marion Diagnostics Ctr., LLC v. Becton Dickinson & Co.,
`29 F.4th 337 (7th Cir. 2022) ..............................................................................................16, 17
`
`In re Microsoft Corp. Antitrust Litig.,
`127 F. Supp. 2d 728 (D. Md. 2001), aff’d, 309 F.3d 193 (4th Cir. 2002) .................................9
`
`Mid-West Paper Prods. Co. v. Cont’l Grp., Inc.,
`596 F.2d 573 (3d Cir. 1979).....................................................................................................14
`
`Monoper v. Boeing Co.,
`104 F. Supp. 3d 1170 (W.D. Wash. 2015) ...............................................................................19
`
`In re Nat’l Football League’s Sunday Ticket Antitrust Litig.,
`933 F.3d 1136 (9th Cir. 2019) ...................................................................................................6
`
`NCAA v. Alston,
`141 S. Ct. 2141 (2021) .............................................................................................................18
`
`Nelsen v. King Cty.,
`895 F.2d 1248 (9th Cir. 1990) .................................................................................................15
`
`NorthBay Healthcare Grp., Inc. v. Kaiser Found. Health Plan, Inc.,
`2017 WL 5059299 (N.D. Cal. Dec. 17, 2017) ...........................................................................8
`
`Oliver v. Am. Express Co.,
`2020 WL 2079510 (E.D.N.Y. 2020)........................................................................................14
`
`In re Online DVD Rental Antitrust Litig.,
`2011 WL 1629663 (N.D. Cal. Apr. 29, 2011) .........................................................................14
`
`Paladin Assocs. v. Mont. Power Co.,
`328 F.3d 1145 (9th Cir. 2003) ...............................................................................................7, 8
`
`Rebel Oil, Inc. v. Atl. Richfield Co.,
`51 F.3d 1421 (9th Cir. 1995) .................................................................................................7, 8
`
`Sonterra Capital Master Fund Ltd. v. Barclays,
`366 F. Supp.3d 516 (S.D.N.Y. 2018).......................................................................................12
`
`Spokeo, Inc. v. Robbins,
`578 U.S. 330 (2016) .............................................................................................................7, 15
`
`Staley v. Gilead Scis. Inc.,
`2022 WL 1158006 (N.D. Cal. Apr. 19, 2022) ...........................................................................7
`
`Stanislaus Food Prods. Co. v. USS-Posco Indus.,
`2010 WL 3521979 (E.D. Cal. 2010) ..........................................................................................9
`
`AMAZON’S MOTION TO DISMISS (2:20-CV-00424-RAJ) - iv
`
`Davis Wright Tremaine LLP
`LAW OFFICES
`920 Fifth Avenue, Suite 3300
`Seattle, WA 98104-1610
`206.622.3150 main · 206.757.7700 fax
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`Case 2:20-cv-00424-RAJ Document 59 Filed 05/16/22 Page 6 of 30
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`Terminalift, LLC v. Int’l Longshore & Warehouse Union Local 29,
`2013 WL 215479 (S.D. Cal. May 17, 2013) ..............................................................................8
`
`In re Vitamins Antitrust Litig.,
`2001 WL 855463 (D.D.C. July 2, 2001)..................................................................................14
`
`Statutes
`
`Sherman Act, 15 U.S.C. § 1 ................................................................................................... passim
`
`Sherman Act, 15 U.S.C. § 2 ................................................................................................... passim
`
`Cartwright Act, Cal. Bus. & Prof. Code §§ 16700–16770 ........................................................5, 23
`
`D.C. Code § 28-4102 .....................................................................................................................20
`
`Idaho Code § 48-603(19) ...............................................................................................................20
`
`Iowa Admin. Code r. 61-31.1(714) ................................................................................................20
`
`La. Stat. Ann. § 29.732 ..................................................................................................................20
`
`Mo. Code Regs. tit. 15, §§ 60-8.030(1)(B)–(C).............................................................................20
`
`N.C. Gen. Stat. § 75-38(a) .............................................................................................................20
`
`Tex. Bus. & Com. Code Ann. § 17.46(b)(27)................................................................................20
`
`AMAZON’S MOTION TO DISMISS (2:20-CV-00424-RAJ) - v
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`Davis Wright Tremaine LLP
`LAW OFFICES
`920 Fifth Avenue, Suite 3300
`Seattle, WA 98104-1610
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`Case 2:20-cv-00424-RAJ Document 59 Filed 05/16/22 Page 7 of 30
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`INTRODUCTION
`Plaintiffs’ Second Amended Complaint (“SAC”) continues to challenge policies that
`promote low competitive prices for consumers shopping in Amazon’s store. The antitrust laws
`encourage such policies, rather than condemn them. Mindful of the Court’s prior ruling on its
`motion to dismiss the First Amended Complaint (“FAC”), Amazon does not seek to reargue points
`the Court decided. Instead, Amazon moves to dismiss the SAC because Plaintiffs lack standing to
`assert their antitrust claims for reasons the Court did not previously reach, and because the plain
`language of Amazon’s Marketplace Fair Pricing Policy, which the Court did not previously
`consider, contradicts the core allegations that form the basis for Plaintiffs’ claims. The Court
`should dismiss the SAC for the following reasons:
`First, Plaintiffs lack standing. In prior briefing, Plaintiffs 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 in Amazon’s store—the sellers
`Plaintiffs label as “co-conspirators”1—and those who purchased from other online retailers.
`Dkt. 19 at 5–7. The SAC makes clear that many of the purchases on which Plaintiffs’ claims
`depend were from retail stores such as Walmart, Target, Costco, REI, and CVS that sell online,
`but do not sell in Amazon’s store. Because these sellers are not even alleged to be antitrust “co-
`conspirators,” antitrust standing to assert claims based on purchases from these sellers cannot be
`based on a co-conspirator theory and must be analyzed separately. But whether Plaintiffs’ claims
`are based on purchases from alleged conspiring or non-conspiring sellers, Plaintiffs lack antitrust
`standing.
`For claims based on purchases from alleged co-conspirator sellers, Plaintiffs have failed to
`satisfy the requirements for antitrust standing based on a co-conspirator theory because, among
`other things, they have not joined the alleged “co-conspirator” sellers as defendants, as Ninth
`
`1 To be clear, no evidence supports Plaintiffs’ allegation that the almost two million sellers in Amazon’s
`store, selling hundreds of millions of different products ranging from lotions to staplers to spark plugs, are
`Amazon’s “co-conspirators.” But even accepting that allegation as true for purposes of this motion,
`Plaintiffs still do not have antitrust standing.
`AMAZON’S MOTION TO DISMISS (2:20-CV-00424-RAJ) - 1
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`Case 2:20-cv-00424-RAJ Document 59 Filed 05/16/22 Page 8 of 30
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`Circuit law requires. In addition, the claims in the SAC based on purchases from alleged co-
`conspirator sellers rest on a pass-on theory of liability, alleging that the fees and commissions that
`Amazon charges third-party sellers for offering products in Amazon’s store are “baked into the
`prices” that third-party sellers charge when selling outside Amazon’s store as a result of the former
`parity provision and the Fair Pricing Policy. SAC ¶ 125. Ninth Circuit law does not permit co-
`conspirator standing based on a pass-on theory of liability because of the unacceptable risk of
`duplicative recovery that would arise if the alleged co-conspirators later brought claims of their
`own and succeeded in proving they were not co-conspirators.
`Plaintiffs’ claims based on purchases from sellers not alleged to be co-conspirators—online
`sellers like Walmart, Target, Costco, REI, and CVS, and the countless other sellers that sell
`products online—violate the bright-line rule that only direct purchasers of an alleged antitrust
`violator have antitrust standing. To get around this rule, Plaintiffs have argued that they have
`antitrust standing based on an umbrella theory—that is, the policies that govern sales in Amazon’s
`store supposedly created a price umbrella that caused consumers to pay higher prices outside
`Amazon’s store, even on purchases from sellers not alleged to be co-conspirators. Dkt. 19 at 6.
`In addition to alleging injury unprecedented in scope across the entire internet and affecting nearly
`every product sold there, this theory is inconsistent with Supreme Court precedent because there
`is no direct causal connection between the policies that govern sales in Amazon’s store and the
`independent pricing decisions of Walmart, Target, Costco, REI, and CVS, and the countless other
`online sellers that do not sell in Amazon’s store. Moreover, Plaintiffs lack both Article III and
`antitrust standing to sue based on purchases of products from sellers other than the sellers from
`which Plaintiffs purchased.
`Second, Plaintiffs’ new allegations in the SAC regarding the Fair Pricing Policy are
`implausible because they contradict the plain language of that policy and what it requires. Even
`on a motion to dismiss, the Court should not accept as true allegations that contradict the policy’s
`plain language. The language of Amazon’s Fair Pricing Policy itself belies the SAC’s allegations
`that the policy prohibits lower prices outside Amazon’s store. Amazon’s Fair Pricing Policy
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`AMAZON’S MOTION TO DISMISS (2:20-CV-00424-RAJ) - 2
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`Case 2:20-cv-00424-RAJ Document 59 Filed 05/16/22 Page 9 of 30
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`prohibits “Setting a price on a product or service that is significantly higher than recent prices
`offered on or off Amazon.” By its terms, the policy permits sellers in Amazon’s store to offer
`lower prices outside Amazon’s store; what it prohibits is price gouging in Amazon’s store by
`sellers offering products at “significantly higher” prices than recent prices on and off Amazon.
`And nothing in the policy requires third-party sellers to add Amazon fees to the cost of their
`products when they sell outside Amazon’s store; if sellers can charge lower prices to consumers,
`then the policy does not prevent them from doing so. There is nothing illegal about a policy that
`prohibits price gouging (as many state laws do), and Plaintiffs’ conclusory assertions to the
`contrary are not enough to survive dismissal.
`Third, the Court should dismiss the SAC because it fails to allege market power or
`anticompetitive effects. Because Plaintiffs’ claims are based on allegations of almost two million
`separate vertical conspiracies relating to the pricing of hundreds of millions of different products
`(again, the SAC’s reach is unprecedented in scope), Plaintiffs must allege facts suggesting that
`each alleged conspiratorial agreement between Amazon and a third-party seller is likely to result
`in an anticompetitive effect. To do so requires alleging that each third-party seller has market
`power to bring about such effect—otherwise, the effects that Plaintiffs purport to condemn could
`not be the result of any “conspiracy.” Plaintiffs fail to allege that any of the third-party sellers
`have market power or that any of the agreements they challenge—let alone all of them—had an
`anticompetitive effect.
`Finally, Plaintiffs’ re-pleaded claims alleging a per se violation of Section 1 of the Sherman
`Act and the California Cartwright Act continue to fail for the reasons this Court has held. The
`policies that form the basis of Plaintiffs’ claims relate to a vertical relationship, not a horizontal
`one. Plaintiffs lack any authority to say that policies such as those at issue in this case would fall
`into one of the narrow categories subject to per se prohibition. Any antitrust claims directed at
`such policies, whether under federal or state law, must be analyzed under the rule of reason.
`
`AMAZON’S MOTION TO DISMISS (2:20-CV-00424-RAJ) - 3
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`Case 2:20-cv-00424-RAJ Document 59 Filed 05/16/22 Page 10 of 30
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`A.
`
`BACKGROUND
`The Court’s Ruling on Amazon’s Motion to Dismiss the First Amended
`Complaint
`The Court granted in part and denied in part Amazon’s motion to dismiss Plaintiffs’ First
`Amended Complaint. The Court held:
` Plaintiffs have antitrust standing to pursue claims “as direct purchasers of alleged
`antitrust co-conspirators,” Dkt. 48 at 8;
` Plaintiffs failed to state a per se Sherman Act, Section 1 claim because the former
`parity provision and the Fair Pricing Policy govern vertical—not horizontal—
`relationships and, to the extent there are vertical and horizontal aspects to the
`relationship between Amazon and third-party sellers in Amazon’s store, those
`hybrid relationships are subject to the rule of reason, id. at 11–13; and
` Plaintiffs’ Sherman Act, Section 2 monopolization and attempted monopolization
`claims were viable because the Fair Pricing Policy allegedly “requires sellers to add
`Amazon’s fees to the cost of their products when they sell them on all external
`platforms,” id. at 20.
`The Court also dismissed all state-law claims for failure to allege sufficient facts to establish the
`elements of each claim. Id. at 24 & n.3. The Court allowed Plaintiffs to file a Second Amended
`Complaint to address the pleading deficiencies the Court identified. Id. at 25–26.
`Because the Court’s decision on antitrust standing addressed only a subset of Plaintiffs’
`claims, Amazon filed a motion for clarification or reconsideration. Dkt. 51. Amazon’s motion
`was pending when Plaintiffs filed the SAC.
`
`The Second Amended Complaint’s Theories of Liability
`B.
`The SAC centers on two Amazon policies. The first is a provision that Amazon removed
`from its Business Services Agreement in March 2019 prohibiting sellers from discriminating
`against Amazon customers by setting higher prices or worse terms in Amazon’s store than sellers
`set for customers in other stores. Rummage Decl., Ex. A. The second is Amazon’s Fair Pricing
`Policy prohibiting sellers from price gouging customers in Amazon’s store. The policy provides
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`AMAZON’S MOTION TO DISMISS (2:20-CV-00424-RAJ) - 4
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`LAW OFFICES
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`Case 2:20-cv-00424-RAJ Document 59 Filed 05/16/22 Page 11 of 30
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`that, if Amazon sees pricing practices that “harm customer trust,” including a third-party seller
`offering a product at a price “significantly higher than recent prices offered on or off Amazon,”
`Amazon “can remove the Buy Box, remove the offer, suspend the ship option, or, in serious or
`repeated cases, suspending or terminating selling privileges.” Id., Ex. B. The policy references
`recent market prices generally—not the specific prices charged by the third-party sellers in other
`stores.2
`
`The SAC contains amended allegations describing the named Plaintiffs, consumers who
`shop for retail products—ranging from staplers to tomato seeds to robot vacuums—from different
`retailers. SAC ¶¶ 66–86. Although Plaintiffs all shop in Amazon’s store, they base their claims
`entirely on purchases from other online retailers, many of whom are not alleged to be Amazon
`third-party sellers and therefore not alleged co-conspirators. Id. ¶ 54. For example, Plaintiff Sheryl
`Taylor-Holly bases her claims on her purchase of a stapler from Walmart, id. ¶ 73; Plaintiff
`Anthony Courtney bases his claims on a backpack he purchased from Fingerhut, id. ¶ 74; and
`Plaintiff Dave Westrope bases his claims on spark plugs he bought from a seller on eBay, id. ¶ 75.
`Walmart, Fingerhut, and eBay are not alleged to be third-party sellers in Amazon’s store; Plaintiffs
`expressly allege that their claims are “not limited to the third-party sellers’ sales.” Id. ¶ 59.
`Plaintiffs have also tried to re-plead a per se antitrust violation under the Sherman Act, id.
`¶¶ 224–235, and a claim under California’s Cartwright Act, id. ¶¶ 276–284. And they have added
`a new claim for conspiracy to monopolize. Id. ¶¶ 265–275.
`
`2 When the SAC describes the Fair Pricing Policy, it includes cites to an article describing the policy from
`a website called Feedvisor, https://feedvisor.com/university/amazon-pricing-policy. Dkt. 15 ¶ 4 n.13; id.
`¶ 7 nn.21–22. Despite the title, those cites are not to the actual Fair Pricing Policy. Rather than rely on
`characterization, Amazon has submitted the actual policy with its motion, as explained below.
`
`AMAZON’S MOTION TO DISMISS (2:20-CV-00424-RAJ) - 5
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`Davis Wright Tremaine LLP
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`Case 2:20-cv-00424-RAJ Document 59 Filed 05/16/22 Page 12 of 30
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`I.
`
`ARGUMENT
`Plaintiffs Have Not Cured the First Amended Complaint’s Standing Defects.
`A.
`Plaintiffs Fail to Satisfy the Requirements for Co-Conspirator Standing.
`As a general rule, only consumers who purchase products directly from a defendant have
`standing to sue under Sections 1 and 2 of the Sherman Act. Ill. Brick Co. v. Illinois, 431 U.S. 720,
`732–35 (1977) (§ 1); Hanover Shoe, Inc. v. United Shoe Mach. Corp., 392 U.S. 481, 491–93
`(1968) (§ 2).3 The Court articulated a narrow exception to this rule in its motion to dismiss
`decision: “when co-conspirators have jointly committed the antitrust violation, a plaintiff who is
`the immediate purchaser from any of the conspirators is directly injured by the violation.” Dkt. 48
`at 8 (quoting In re Nat’l Football League’s Sunday Ticket Antitrust Litig., 933 F.3d 1136, 1157
`(9th Cir. 2019)). This Court held that because “Plaintiffs allege they are direct purchasers of
`antitrust conspirators,” they “have established standing as direct purchasers of alleged antitrust co-
`conspirators.” Id. As explained below, the allegations in the SAC do not establish antitrust
`standing under the co-conspirator exception, for reasons the Court has not addressed.
`
`(i)
`
`The Transactions at Issue in the SAC Include Purchases from
`“Non-Conspiring” Sellers.
`In the Ninth Circuit, antitrust standing based on the co-conspirator exception does not apply
`to consumers who made purchases from non-conspiring sellers 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 Antitrust Fee Litig., 686 F.3d 741, 754 (9th Cir. 2012). The SAC does not confine itself
`to alleged conspiring sellers, instead alleging that the “impact of Amazon’s restraint on its third-
`party sellers and ultimately consumers is not limited to the third-party sellers’ sales.” SAC ¶ 59.
`Not all Plaintiffs allege that they have made purchases from a third-party seller, and Plaintiffs
`define “Class Products” to include purchases from non-conspirator sellers. Id. ¶ 54 (“to qualify as
`a Class Product, it is not necessary that the product sold through a competing retail e-commerce
`
`3 With respect to quoted material, unless otherwise indicated, all brackets, ellipses, footnote call numbers,
`internal quotations, and citations have been omitted for readability. All emphasis is added unless otherwise
`indicated.
`
`AMAZON’S MOTION TO DISMISS (2:20-CV-00424-RAJ) - 6
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`Davis Wright Tremaine LLP
`LAW OFFICES
`920 Fifth Avenue, Suite 3300
`Seattle, WA 98104-1610
`206.622.3150 main · 206.757.7700 fax
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`Case 2:20-cv-00424-RAJ Document 59 Filed 05/16/22 Page 13 of 30
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`channel be sold by an Amazon third-party seller”).
`With no factual basis for standing, a number of Plaintiffs have resorted to speculation.
`Plaintiffs have added allegations to the SAC speculating that they are all potential future direct
`purchasers of alleged co-conspirator sellers—suggesting they may have antitrust standing in the
`future. SAC ¶¶ 66–86. Speculative future purchases do not satisfy Article III standing, much less
`antitrust standing. Article III standing requires injury that is “actual or imminent, not conjectural
`or hypothetical.” Spokeo, Inc. v. Robbins, 578 U.S. 330, 337–40 (2016); see also Staley v. Gilead
`Scis. Inc., 2022 WL 1158006, at *8–9 (N.D. Cal. Apr. 19, 2022) (plaintiffs did not have Article III
`standing because, despite assertion that “there is a significant probability that they will take one or
`more of Defendants’ drugs in the future,” plaintiffs had not in the past and there was no indication
`they were likely to in the future, making possibility “too remote and not sufficiently concrete”).
`
`(ii)
`
`Plaintiffs’ New Conspiracy to Monopolize Claim Does Not Create
`Co-Conspirator Standing for the Sherman Act, Section 2 Claims.
`The co-conspirator theory of standing does not apply to claims of monopolization and
`attempted monopolization, which are claims directed at single-firm conduct. 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.”). To attempt to
`cure that legal defect, Plaintiffs added to the SAC a claim for “conspiracy to monopolize.” SAC
`¶¶ 265–275. “To state a claim for conspiracy to monopolize in violation of § 2, Plaintiff must
`sufficiently plead the following: ‘(1) the existence of a combination or conspiracy to monopolize;
`(2) an overt act in furtherance of the conspiracy; (3) the specific intent to monopolize; and
`(4) causal antitrust injury.’” Lenhoff Enters., Inc. v. United Talent Agency, 2015 WL 7008185, at
`*3 (C.D. Cal. Sept. 18, 2015) (quoting Paladin Assocs. v. Mont. Power Co., 328 F.3d 1145, 1158
`(9th Cir. 2003)). Plaintiffs fail to allege facts sufficient to satisfy these elements.
`“Ninth Circuit case law holds that to sufficiently state a claim under § 2 for conspiracy to