Loren Data Corp v. GXS, Inc.
Filing
20
MEMORANDUM OPINION. Signed by Chief Judge Deborah K. Chasanow on 8/9/11. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
LOREN DATA CORP.
:
v.
:
Civil Action No. DKC 10-3474
:
GXS, INC.
:
MEMORANDUM OPINION
Presently pending and ready for review in this antitrust
case is the motion to dismiss filed by Defendant, GXS, Inc.
(ECF No. 9).
The issues have been fully briefed and the court
now rules, no hearing deemed necessary.
For
the
following
reasons,
the
motion
See Local Rule 105.6.
to
dismiss
will
be
granted.
I.
Background
A.
Factual Background1
Plaintiff Loren Data Corporation and Defendant GXS, Inc.
are Electronic Data Interchange providers.
Loren Data is a
California corporation with its principal place of business in
Indian Rocks Beach, Florida, while GXS is a Delaware corporation
with its principal place of business in Gaithersburg, Maryland.
1
The facts are taken from Loren Data’s initial complaint
(ECF No. 1) and the supplemental statement of facts in the
amended complaint. (ECF No. 13).
Electronic Data Interchange (“EDI”) is described by Loren
Data as “the electronic exchange of business data and documents,
such as purchase orders or invoices, in a standardized digital
format
that
systems.”
can
be
processed
(ECF No. 1 ¶ 1).
received,
and
ingested
via
the
Internet
by
computer
EDI messages are generated, sent,
into
enterprise
computing
systems
for
parties engaged in commercial trading, such as retailers and
suppliers,
shippers
vendors.
These
networks
called
and
messages
interconnected
Value
Added
to
receivers,
travel
each
Networks
and
over
other
(“VANs”)
a
manufacturers
system
with
that
of
network
are
and
private
protocols
secure.
For
example a shipper might send a purchase order formatted in EDI
over a VAN to its trading partners.
Although VANs are privately
owned, trading partners on different VANs can still communicate
with each other if their VANs are connected.
One common way
this occurs is through an interconnect jointly maintained by two
VAN providers; another option is through a commercial mailbox.
Plaintiff contends that it is long standing practice in the EDI
industry for VANs to grant “non-settlement peer Interconnects”
to each other to facilitate the flow of EDI data.
In a non-
settlement peer Interconnect, EDI messages are transferred from
one VAN to another with each VAN absorbing its own costs.
A
commercial mailbox is a paid service for transmitting messages
2
sent on one VAN to trading partners using a different VAN.
The
VAN typically charges for use of a commercial mailbox based on
the amount of data being transmitted.
Mailboxes also differ
from interconnects in that the messages are not delivered to the
receiving trading partner with the same ease and speed.
Loren Data and GXS both operate VANs.
Loren Data’s VAN has
the brand name of ECGrid and has been in operation for over ten
years.
It currently serves approximately 18,000 IDs (akin to
phone numbers or email addresses) primarily in North America.
GXS manages a significantly larger VAN branded as “TGMS” and
also controls the legacy VANs IE, InovisWorks, and Tradanet that
it
obtained
providers.
through
In
merger
2002
GXS’
or
acquisition
predecessor,
approximately 25% of the EDI IDs.
from
former
GEIS,
VAN
controlled
Since that time, GXS acquired
the Information Exchange (IE) VAN, a former division of IBM, and
it merged with Inovis.
Accordingly to Loren Data, it is now
generally accepted that GXS controls 50% or more of the EDI
market when measured by revenue, customer base, or IDs.
In November 2000, Loren Data approached GXS to request an
interconnect.
At that time GXS told Loren Data that it was in
the process of rewriting its VAN Interconnect Agreement and a
new agreement would be available soon.
In February 2001, while
the
regarding
parties
continued
negotiations
3
a
potential
interconnect, GXS made an EDI mailbox available to Loren Data as
a temporary measure.
Then in August 2001, GXS notified Loren
Data that it would not provide a peer interconnect to the GXS
network
and
that
Loren
Data’s
temporary
mailbox
would
be
terminated if Loren Data did not pay the $30,000 due in fees.
Loren Data’s mailbox was terminated two weeks later, and it was
forced to make alternate arrangements for its customers with
trading partners on the GXS VAN or lose their business.
In 2002
Loren Data made a similar request to interconnect with the GXS
Van that was also denied.
In February 2003, IBM contracted with Loren Data to provide
interconnect
outsourcing
for
its
Department of Defense EDI traffic.
federal
government
and
When GXS acquired IBM’s EDI
network in 2005, GXS honored the agreement for several years
and Loren Data was able to maintain its interconnect with the
former
IBM
VAN.
Loren
Data
alleges
that
the
contract
was
terminated on October 31, 2009, however, leaving Loren Data due
$24,832.89 in unpaid invoices.
In August 2003, one of Loren Data’s customers, Covisint,
required routing to GXS’ IDs and, thus, Loren Data had to settle
its outstanding accounts with GXS and initiate a new formal
agreement
with
GXS.
GXS
still
refused
to
provide
an
interconnect and instead set up a metered mailbox with manual
4
web
interfaces.
network
Loren
interfaces
Data
were
maintains
regularly
that
degraded
“GXS’
and
technical
modified
to
cripple the relationship, causing vexing, serious and damaging
system-wide failure with the Loren Data network” and that these
failures
would
not
have
occurred
if
permitted to interconnect with GXS.
Loren
Data
(Id. ¶ 19).
had
been
Loren Data
further alleges that during this time period GXS granted nonsettlement peer interconnects to other VANs, large and small,
and that because Loren Data was denied an interconnect it missed
market opportunities, attained reduced market footprint, lost
revenue, and incurred extraordinary expenses.
In March 2009, Inovis, Inc. offered Loren Data the option
to route to GXS’ customers through the InovisWorks VAN at a
monthly rate of $3500.00.
Loren Data accepted this agreement
and all its GXS traffic was re-routed through InovisWorks by
June 30, 2009.
Loren Data alleges that this arrangement was
only
better
marginally
than
the
metered
mailbox,
however,
because it resulted in a loss of message visibility and tracking
across networks, creating confusion and loss of name recognition
for Loren Data.
In addition, in June 2010, GXS announced the
completion
of
intent
renegotiate
to
its
merger
with
the
InovisWorks
terms
of
the
interconnect when it expired in May 2011.
5
and
expressed
Loren
its
Data/Inovis
In particular, GXS
expressed its intent to return to using a metered mailbox for
Loren
Data
current
messages.
mailbox
Loren
arrangement
Data
GXS
alleges
charges
that
it
through
$.04
per
its
kilo
character (kc) of transmitted data, amounting to as much as
$25,000-$30,000 per month in charges since 2001.
Under its
agreement with Inovis Loren Data was only charged $.01 per kc.
Loren Data further alleges that with a typical non-settlement
interconnect there is no charge per kc.
B.
On
Procedural Background
December
13,
2010,
Loren
Data
filed
a
complaint in federal district court alleging that:
six
count
(1) GXS
violated section 1 of the Sherman Act, 15 U.S.C § 1, by entering
into contracts, combinations and/or conspiracies in restraint of
trade or commerce; (2) GXS violated section 2 of the Sherman
Act, 15 U.S.C. § 2, by attempting to create a monopoly in the
EDI industry; (3) GXS violated section 2 of the Sherman Act by
willfully acquiring and possessing monopoly power in the EDI
industry and using its monopoly power to exclude competition;
(4) GXS violated Maryland Antitrust law, Md. Code Ann., Com. Law
§ 11-204; (5) GXS is liable for tortious inference with Loren
Data’s
business
relationships;
contracts with Loren Data.
and
(6)
(ECF No. 1).
GXS
breached
its
On February 3, 2011,
GXS filed a motion to dismiss the complaint for failure to state
6
a claim and lack of subject matter jurisdiction.
Loren
Data
subsequently
supplemental
filed
statement
of
an
amended
facts
claims
from
complaint
but
its
(ECF No. 9).
adding
otherwise
original
a
simply
incorporating
the
complaint.
(ECF No. 13.)
The parties have stipulated that GXS’ motion to
dismiss and Loren Data’s opposition may be deemed to apply to
the first amended complaint.
II.
(ECF Nos. 16, 17).
Standard of Review
The purpose of a motion to dismiss pursuant to Fed.R.Civ.P.
12(b)(6)
is
to
test
the
sufficiency
of
the
plaintiff’s
complaint.
See Edwards v. City of Goldsboro, 178 F.3d 231, 243
(4th
1999).
Cir.
Except
in
certain
specified
cases,
a
plaintiff’s complaint need only satisfy the “simplified pleading
standard” of Rule 8(a), Swierkiewicz v. Sorema N.A., 534 U.S.
506, 513 (2002), which requires a “short and plain statement of
the
claim
showing
Fed.R.Civ.P.
requires
a
that
8(a)(2).
pleader
is
Nevertheless,
‘showing,’
entitlement to relief.”
544, 555 n.3 (2007).
the
rather
than
a
entitled
“Rule
blanket
to
relief.”
8(a)(2)
still
assertion,
of
Bell Atl. Corp. v. Twombly, 550 U.S.
That showing must consist of more than “a
formulaic recitation of the elements of a cause of action” or
“naked
assertion[s]
devoid
of
further
7
factual
enhancement.”
Ashcroft
v.
Iqbal,
129
S.Ct.
1937,
1949
(2009)(internal
citations omitted).
In its determination, the court must consider all well-pled
allegations in a complaint as true, Albright v. Oliver, 510 U.S.
266, 268 (1994), and must construe all factual allegations in
the light most favorable to the plaintiff.
See Harrison v.
Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir.
1999)(citing Mylan Labs., Inc. v. Matkari, 7 F.3d 1130, 1134
(4th Cir.
1993)).
The
court
need
not,
however,
accept
unsupported legal allegations, Revene v. Charles County Comm’rs,
882 F.2d 870, 873 (4th Cir. 1989), legal conclusions couched as
factual allegations, Iqbal, 129 S.Ct. at 1950, or conclusory
factual allegations devoid of any reference to actual events,
United Black Firefighters v. Hirst, 604 F.2d 844, 847 (4th Cir.
1979).
See
also
(4th Cir. 2009).
Francis
v.
Giacomelli,
588
F.3d
186,
193
“[W]here the well-pleaded facts do not permit
the court to infer more than the mere possibility of misconduct,
the complaint has alleged, but it has not ‘show[n] . . . that
the pleader is entitled to relief.’”
(quoting Fed.R.Civ.P. 8(a)(2)).
Iqbal, 129 S.Ct. at 1950
Thus, “[d]etermining whether a
complaint states a plausible claim for relief will . . . be a
context-specific task that requires the reviewing court to draw
on its judicial experience and common sense.”
8
Id.
III. Analysis
A.
Sherman Act Claims
1.
Section 1 of the Sherman Act
Count I of Loren Data’s complaint alleges a violation of
Section
1
of
the
Sherman
Act,
15
U.S.C.
§ 1.
Section
1
prohibits “[e]very contract, combination in the form of trust or
otherwise,
or
conspiracy,
in
restraint
of
trade
or
among the several States, or with foreign nations.”
contends
that
Loren
Data
has
failed
to
state
a
commerce
Id.
claim
GXS
under
section 1 because neither the alleged facts nor any reasonable
inference therefrom shows a contract or agreement to conspire
between GXS and other EDI providers.
In response, Loren Data
argues
with
that
GXS’
refusal
to
deal
Loren
Data
while
simultaneously combining to allow all other VANS to interconnect
constitutes
a
group
boycott
section 1 of the Sherman Act.
and
is
a
per
se
violation
of
(ECF No. 14, at 2).
“Section one of the Sherman Act applies only to concerted
action;
unilateral
conduct
is
excluded
from
its
purview.”
Oksanen v. Page Mem’l Hosp., 945 F.2d 696, 702 (4th Cir. 1991)
(citing Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752,
761 (1984)), cert. denied, 502 U.S. 1074 (1992).
As the United
States Court of Appeals for the Fourth Circuit emphasized in
Virginia Vermiculite, Ltd v. Historic Green Springs, Inc, 307
9
F.3d 277, 282 (4th Cir. 2002), cert. denied, 538 U.S. 998 (2003),
“concerted
activity
susceptible
to
sanction
by
section
1
is
activity in which multiple parties join their resources, rights,
or economic power together in order to achieve an outcome that,
but for the concert, would naturally be frustrated by their
competing interests (by way of profit-maximizing choices).”
The pleading requirements to state a claim for violation of
section 1 are quite clear.
enough
factual
matter
agreement was made.”
plead
an
agreement
Section 1 “requires a complaint with
(taken
as
true)
to
suggest
Twombly, 550 U.S. at 556.
by
alleging
direct
evidence, or a combination of the two.
or
that
an
A plaintiff may
circumstantial
West Penn Allegheny
Health Sys., Inc. v. UPMC, 627 F.3d 85, 99-100 (3d Cir. 2010).
The Supreme Court in Twombly further held “[a]n allegation of
parallel conduct and a bare assertion of conspiracy will not
suffice.
Without
more,
parallel
conduct
does
not
suggest
conspiracy, and a conclusory allegation of agreement at some
unidentified
point
does
not
supply
illegality.”
550 U.S. at 556-57.
facts
adequate
to
show
In dicta, the Twombly court
indicated that a section 1 claim should include information as
to the specific time and place of the illicit agreement and the
names of the parties to the agreement.
Id. at n.10.
Subsequent
decisions from the courts of appeal have dismissed claims under
10
section 1 for failure to provide these specific details about
the agreement.
See, e.g., Total Benefits Planning Agency, Inc.
v. Anthem Blue Cross & Blue Shield, 552 F.3d 430, 437 (6th Cir.
2008).
In addition to pleading the existence of an agreement, the
plaintiff must prove that the conspiracy or combination to which
the defendant was a party imposed an unreasonable restraint on
trade.
Courts
unreasonable
generally
under
one
of
evaluate
three
whether
a
approaches:
restraint
is
“(1)
se
per
analysis, for obviously anticompetitive restraints, (2) quicklook analysis, for those with some procompetitive justification,
and (3) the full “rule of reason,” for restraints whose net
impact on competition is particularly difficult to determine.”
Continental Airlines, Inc. v. United Airlines, Inc., 277 F.3d
499, 508-09 (4th Cir. 2002).
are
permitted
to
make
Under the per se approach, courts
“categorical
judgments
that
certain
practices, including price fixing, horizontal output restraints,
and
market-allocation
agreements,
are
illegal
per
se.”
Id.
(citing Northwest Wholesale Stationers, Inc. v. Pac. Stationery
& Printing Co., 472 U.S. 284, 289 (1985)).
“Practices suitable
for per se analysis have been found over the years to ‘be ones
that would always or almost always tend to restrict competition
and decrease output,’ and that are not ‘designed to increase
11
economic efficiency and render markets more, rather than less,
competitive.’”
Id. (quoting Broad. Music, Inc. v. CBS, 441 U.S.
1, 19-20 (1979)).
there
is
a
When a practice qualifies for per se analysis
“conclusive
unreasonable.”
presumption
a
the
restraint
is
See Arizona v. Maricopa Cnty. Med. Soc'y, 457
U.S. 332, 343-45 (1982).
contrast,
that
Under the rule of reason approach, by
factfinder
must
“decide
whether
under
all
the
circumstances of the case the restrictive practice imposes an
unreasonable restraint on competition.”
reason
analysis
requires
a
detailed
Id. at 343.
analysis
of
Rule of
“the
facts
peculiar to the business, the history of the restraint, and the
reasons why it was imposed.”
Continental Airlines, Inc., 277
F.3d at 509 (quoting Nat’l Soc’y of Prof’l Engr’s v. United
States, 435 U.S. 679, 692 (1978)).
The intermediary level of
analysis, quick-look, is appropriate for practices that have an
obvious
anticompetitive
impact
upon
obvious procompetitive justifications.
a
quick
look,
but
also
Id.
Loren Data has not alleged adequate facts to establish that
GXS
contracted,
combined,
boycott Loren Data.
allegations
contracts,
that
or
conspired
with
other
VANs
to
The complaint contains only the conclusory
“Defendant
combinations,
GXS,
and/or
Inc.
has
conspiracies
in
entered
into
restraint
of
trade and/or commerce” and that it “combined with other EDI
12
providers to provide peer non-settlement interconnects to the
exclusion of Loren Data.”
(ECF No. 1 ¶ 28).
The complaint does
not identify the parties with whom GXS agreed to restrain trade,
the time or place at which such an agreement was reached, or the
specific
contours
of
such
agreement.
Inserting
the
word
“combine” into its allegation is not enough to state a claim
under section 1.
Elsewhere
Loren
Data
alleges
that
GXS
provided
peer
interconnects to other VANS, (see ECF No. 1 ¶ 20 (alleging that
GXS
provided
interconnects
to
Sterling,
Inovis,
Easylink,
NuBridges, Advanced Communications Systems, I-Connect, and York
Worldwide)), but Loren Data does not allege that these VANs
failed to provide peer interconnects to Loren Data, that they
were ever forced to deny interconnects by GXS, or that they
agreed to deny interconnects to Loren Data.
To the contrary,
Loren Data alleges that “it has been granted Interconnects with
every other VAN.”
(Id. ¶ 6).
Agreements between other VANs to
establish peer connects with GXS do not constitute an agreement
to boycott Loren Data.
To the extent Loren Data intended to
allege that other VANs agreed that GXS would boycott Loren Data,
this is an agreement lacking any substance as GXS does not need
the permission or consent of third parties to decide whether it
will do business with Loren Data.
13
See Monsanto Co. v. Spray-
Rite Serv. Corp., 465 U.S. 752, 761 (1984) (“Independent action
is not proscribed.
A manufacturer of course generally has a
right to deal, or refuse to deal, with whomever it likes, as
long as it does so independently. . . . And a distributor is
free to acquiesce in the manufacturer’s demand in order to avoid
termination.”).
Loren
Data’s
argument
that
horizontal
group
boycotts
constitute per se violations of section 1 is irrelevant because
Loren Data has not alleged any facts to suggest the existence of
a horizontal group boycott.
At most Loren Data has alleged GXS
was boycotting Loren Data and other VANs did not try to stop GXS
from doing so.2
Single party boycotts are not per se violations
of the Sherman Act.
2.
Counts
Section 2 of the Sherman Act
II
and
III
of
Loren
Data’s
complaint
allege
violations of section 2 of the Sherman Act, 15 U.S.C. § 2.
Section
2
makes
it
illegal
to
“monopolize,
or
attempt
to
monopolize, or combine or conspire with any other person or
2
In its first amended complaint Loren Data alleges that GXS
has “let it be known that it will not permit any other VAN that
interconnects with GXS to enter into an agreement with Loren
Data that is similar to Loren Data’s current agreement with
Inovis.” (ECF No. 13 ¶ k). No further details are alleged to
indicate how, when, or to whom this intention was conveyed or
how GXS intends to carry out its intent. This allegation is far
from adequate to allege an illegal boycott or any other form of
conspiracy to restrain trade.
14
persons, to monopolize any part of the trade or commerce among
the several States, or with foreign nations[.]”
The
elements
of
claims
alleging
15 U.S.C. § 2.
monopolization
monopolization are quite similar.
and
attempted
To state a monopolization
claim, a plaintiff must show possession of monopoly power in a
relevant
market,
willful
acquisition,
or
maintenance
of
that
power in an exclusionary manner as distinguished from growth or
development
as
acumen,
historic
or
a
consequence
of
accident,
superior
and
product,
antitrust
causal
business
injury.
United States v. Grinnell Corp., 384 U.S. 563, 570-71 (1966);
Advanced Health-Care Servs., Inc. v. Radford Cmty. Hosp., 910
F.2d 139, 147 (4th Cir. 1990).
To state a claim for attempted
monopolization, a plaintiff must demonstrate:
intent
to
monopolize
the
relevant
market;
(1) a specific
(2)
predatory
or
anticompetitive acts in furtherance of the intent; and (3) a
dangerous
McQuillan,
probability
506
U.S.
of
447,
success.
456
Spectrum
(1993);
In
re
Sports,
Inc.
Microsoft
v.
Corp.
Antitrust Litig., 333 F.3d 517 (4th Cir. 2003).
a.
`
Maintaining a Monopoly
GXS argues that Loren Data has failed to state a claim for
monopolization in count III because it has not alleged facts to
show that GXS lacked a legitimate business justification for the
challenged actions or even that GXS failed to deal with Loren
15
Data in an anti-competitive fashion.
Data
has
market
failed
for
monopoly.
to
the
allege
supposed
a
GXS also argues that Loren
relevant
monopoly,
or
product
that
or
GXS
geographic
possessed
a
(ECF No. 9-1, at 21-38).
1)
Possession of Monopoly Power in Relevant Market
Monopoly power is defined as “the power to control prices
or
exclude
competition.”
United
States
Nemours & Co., 351 U.S. 377, 391 (1956).
v.
E.I.
du
Pont
de
“Proof of a relevant
market is the threshold for a Sherman Act § 2 claim.
The
plaintiff must establish the geographic and product market that
was monopolized.”
Consul, Ltd. v. Transco Energy Co., 805 F.2d
490, 493 (4th Cir. 1986) (citing cases), cert. denied, 481 U.S.
1050
(1987).
The
requirements
for
the
relevant
geographic
market were explained by the Fourth Circuit in Consul:
[T]he geographic market should consist of an
area in which the defendants operate and
which the plaintiff can reasonably turn to
for supplies.” [RCM Supply Co. v. Hunter
Douglas, Inc.,] 686 F.2d [1074] at 1077 [4th
Cir. 1982] (emphasis in original). See Tampa
Electric Co. v. Nashville Coal Co., 365 U.S.
320,
327-34
(1961).
The
penultimate
question, towards which this preliminary
inquiry into market definition is directed,
is whether the defendant has market power:
the ability to raise prices above levels
that would exist in a perfectly competitive
market.
The geographic demarcation should
not be too tightly drawn, unless clear
evidence exists that potential competitors
outside
the
region
are
hindered
from
entering. A market drawn too tightly, either
16
in geographic terms that exclude potential
suppliers or in product terms that exclude
potential substitutes, creates the illusion
of market power where none may exist.
Id. at 494-95 (internal footnote omitted).
“In sum, ‘a relevant
market, then is the narrowest market which is wide enough so
that products from adjacent areas or from other producers in the
same
area
cannot
compete
included in the market.’”
on
substantial
parity
with
those
Int'l Wood Processors v. Power Dry,
Inc., 792 F.2d 416, 430 (4th Cir. 1986) (quoting L. Sullivan,
Handbook of the Law of Antitrust § 12, at 41 (1977)).
At the pleading stage, Loren Data need only identify a
geographic market that could meet this criteria.
Loren Data
seems determined, however, to comply with this straightforward
pleading requirement in the most circuitous fashion.
notes,
neither
the
original
complaint
nor
the
As GXS
supplemental
statement of facts in the amended complaint contain a clear
statement
amended
of
the
relevant
geographic
market.
complaint
contains
allegations
such
as
Instead,
“Loren
the
Data’s
market is primarily (more than 95%) with trading partners in
North America,” (ECF No. ¶ 6), and that “50% of [GXS’] customers
were based in the United States.”
Loren Data also alleges,
however, that a “smaller portion of Loren Data’s business was in
the United Kingdom” (id.) and references GXS’ VAN in the UK.
(Id. ¶ 8).
From these allegations it is not entirely clear
17
whether Loren Data maintains that the relevant geographic market
is North America or that the relevant market is North America
and
the
United
complaint
Kingdom.
included
(ECF No. 1,
at
a
Additionally,
section
2-4),
this
while
section
did
original
“Relevant
entitled
the
Market”
not
delineate
the
geographic limits of the relevant market; it merely discussed
the EDI industry in generic terms.
It is only in Loren Data’s
opposition to the motion to dismiss that it unequivocally states
“Loren
Data
America.”
competes
with
(ECF No. 24).
GXS
in
the
EDI
market
in
North
Ordinarily a plaintiff cannot rely on
allegations not made in the actual complaint to survive a motion
to dismiss.
In this case, one could discern that North America
is the relevant market from the allegations in the complaint,
but it is not the only conclusion that could be drawn.
But
because Loren Data’s claim has other failings, it need not be
determined whether the inconclusive statements as to geographic
market are adequate to state a claim.
With respect to the product market, competing products are
in the same market if they are readily substitutable for one
another.
See Brown Shoe Co. v. United States, 370 U.S. 294, 325
(1962) (“the outer boundaries of a product market are determined
by
the
reasonable
interchangeability
of
use
or
the
cross-
elasticity of demand between the product itself and substitutes
18
for it.”).
broader
Well-defined submarkets may also exist within a
market,
“which,
in
themselves,
markets for antitrust purposes.”
constitute
product
Id. (citing United States v.
E.I. du Pont de Nemours & Co., 353 U.S. 586, 593-95 (1957)).
“The
boundaries
examining
such
of
such
a
practical
submarket
indicia
as
may
be
determined
industry
or
by
public
recognition of the submarket as a separate economic entity, the
product's peculiar characteristics and uses, unique production
facilities, distinct customers, distinct prices, sensitivity to
price changes, and specialized vendors.”
Id.
Here, Loren Data identifies the Electronic Data Interchange
industry as the relevant product market in which GXS allegedly
possesses monopoly power by controlling at least 50% of the
market.
(ECF No. 1 ¶¶ 5, 35, and B).
explains
details
regarding
industry and its contours.
the
The complaint further
Electronic
Data
Interchange
Whether this industry constitutes a
submarket for antitrust purposes is a factual allegation that
ultimately should be determined by the factfinder, but at this
stage it cannot be said that Loren Data has failed to plead a
relevant product market in terms sufficient to state a claim.
GXS also argues that control of only fifty percent of the
market
is
monopoly.
inadequate
as
a
matter
of
law
to
constitute
a
(See ECF No. 9-1, at 37 (citing United States v.
19
Microsoft
Corp.,
253
F.3d
34,
51
(D.C.
Cir.
2001),
Colo.
Interstate Gas Co. v. Natural Gas Pipeline Co. of Am., 885 F.2d
683, 694 n.18 (10th Cir. 1989), Spirit Airlines, v. Nw. Airlines,
431 F.3d 917, 935-36 (6th Cir. 2005)).
It is true that some
courts have held that 50% or 60% of market share, absent other
relevant factors, is not enough to demonstrate the existence of
monopoly power.
See, e.g., PepsiCo, Inc. v. Coca-Cola, Co., 315
F.3d 101, 109 (2d Cir. 2002) (“absent additional evidence, such
as an ability to control prices or exclude competition, a 64
percent market share is insufficient to infer monopoly power.”);
In
re
Se.
Milk
Antitrust
Litig.,
730
F.Supp.2d
804,
822
(E.D.Tenn. 2010) (“As a general rule, however, monopoly power
requires proof of more than 60% market power.”).
Monopoly power
is a factual determination, however, and courts consider many
factors beyond percentage of market share including:
“the size
and
into
strength
of
competing
firms,
freedom
of
entry
the
field, pricing trends and practices in the industry, ability of
consumers
to
substitute
comparable
goods
on
outside the market, and consumer demand factors.”
services
from
Weiss v. York
Hosp., 745 F.2d 786, n.72 (3d Cir. 1984) (citing. L. Sullivan,
Handbook of the Law of Antitrust §§ 22-32 (1977)), cert. denied,
470
U.S.
1060
(1985).
Loren
Data’s
complaint
included
allegations relating to many of these factors, and, thus, the
20
claim
cannot
be
dismissed
based
on
Loren
allege a market share greater than 60%.
de
Nemours
&
Co.
v.
Kolon
Indus.,
Data’s
failure
to
See also E.I. du Pont
Inc.,
637
F.3d
435,
443 (4th Cir. 2011) (“Because market definition is a deeply factintensive inquiry, courts hesitate to grant motions to dismiss
for
failure
to
plead
a
relevant
product
market.”)
(citing
cases).
2)
Willful Exclusionary Conduct
The possession of monopoly power does not violate section 2
of the Sherman Act unless it is accompanied by an element of
willful anticompetitive conduct.
Verizon Commc’ns, Inc. v. Law
Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 407 (2004).
Where the alleged anticompetitive conduct is conduct that would
constitute a per se violation of section 1 of the Sherman Act,
willfulness
plaintiff
is
must
legitimate
defendant
presumed.
For
other
demonstrate
that
the
business
engaged
willingness
to
reasons
in
forsake
for
alleged
violations,
defendant
its
a
did
not
have
or
that
the
conduct
exclusionary
conduct
manifesting
“a
short-term
profits
to
an
achieve
anticompetitive end” and “a distinctly anticompetitive bent.”
Id. at 409.
reasonable
Loren Data alleges that GXS denied Loren Data
access
intentionally
used
to
its
the
GXS
position
21
as
network
an
of
essential
clients
facility
and
to
control EDI market prices and to harm and eliminate horizontal
competition.
argues
that
refuse
to
(ECF No. 1 ¶ 36).
the
deal
alleged
with
facts
Loren
In its motion to dismiss, GXS
demonstrate
Data
because
that
GXS
GXS
had
did
not
legitimate
business reasons for its actions and because the GXS VAN is not
an essential facility.
(ECF No. 9-1, at 21-27).
First, as to the allegation that GXS denied Loren Data
reasonable access to the GXS network of clients, “as a general
rule, businesses are free to choose the parties with whom they
will deal, as well as the prices, terms, and conditions of that
dealing.”
See United States v. Colgate & Co., 250 U.S. 300, 307
(1919).
The
antitrust
duty
Supreme
to
deal
Court
has
with
“held
its
rivals
that
a
firm
with
no
at
all
is
under
no
obligation to provide those rivals with a sufficient level of
service.”
Pacific Bell Tel. Co. v. Linkline Commc’ns, Inc., 555
U.S. 438, 129 S.Ct. 1109, 1115 (2009) (citing Verizon Commc’ns
Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 410
(2004)).
The Court further held that a firm “certainly has no
duty to deal under terms and conditions that the rivals find
commercially advantageous.”
The rationale behind this rule was
set forth in Trinko:
Firms
may
acquire
monopoly
power
by
establishing an infrastructure that renders
them
uniquely
suited
to
serve
their
customers. Compelling such firms to share
22
the source of their advantage is in some
tension with the underlying purpose of
antitrust law, since it may lessen the
incentive for the monopolist, the rival, or
both
to
invest
in
those
economically
beneficial facilities. Enforced sharing also
requires antitrust courts to act as central
planners, identifying the proper price,
quantity, and other terms of dealing-a role
for which they are ill suited. Moreover,
compelling negotiation between competitors
may
facilitate
the
supreme
evil
of
antitrust: collusion.
540 U.S. at 407.
Nevertheless, “[t]here are also limited circumstances in
which a firm’s unilateral refusal to deal with its rivals can
give rise to antitrust liability.”
Pacific Bell Tel. Co., 129
S.Ct. at 1119 (citing Aspen Skiing Co. v. Aspen Highlands Skiing
Corp., 472 U.S. 585, 608-611 (1985)).
In Aspen Skiing, the
Court found that a rival’s refusal to deal with its competitor
violated section 2 because the defendant’s conduct revealed a
distinctly anticompetitive bent.
472 U.S. at 608-611.
In other
words, Aspen Skiing recognized an affirmative duty to deal where
refusal
to
do
so
would
result
in
an
important
change
in
competitive market with negative consequences for consumers.
a
In
Aspen Skiing, the defendant owned three out of the four mountain
ski areas in the Aspen region.
For many years the defendant had
cooperated with the owner of the fourth ski area to offer a
combined multi-day, all area ski ticket with proceeds split in
23
accordance with purchasers’ use of lifts at the four areas.
Over time the defendant demanded a greater percentage of the
profits and ultimately cancelled the joint ticket and refused
even to sell lift tickets at retail price to the owner of the
fourth area.
In upholding the jury finding that defendant’s
conduct violated section 2, the Court reasoned that “the jury
may well have concluded that [the defendant] elected to forgo
these
short-run
benefits
because
it
was
more
interested
in
reducing competition . . . over the long run by harming its
smaller competitor.”
Id. at 608.
A claim of refusal to deal is only cognizable if it harms
competition generally and not solely the competitor challenging
the monopolist’s action.
See Rural Tel. Serv. v. Feist Publ’ns,
957 F.2d 765, 768 (10th Cir.), cert. denied, 506 U.S. 984 (1992);
U.S.
v.
Microsoft
Corp.,
253
F.3d
34,
58
(D.C.
Cir.
2001)
(“[alleged anticompetitive conduct] must harm the competitive
process and thereby harm consumers.
In contrast, harm to one or
more competitors will not suffice.”).
In addition, the duty to
deal is more likely to be recognized where the defendant is
ending
a
long-standing
relationship
with
a
competitor,
see,
e.g., High Tech. Careers v. San Jose Mercury News, 996 F.2d 987,
991 (9th Cir. 1993), or where the monopolist’s aid is essential.
See, e.g., Olympia Equip. Leasing Co. v. Western Union Tel., 802
24
F.2d 217, 219 (7th Cir. 1986) (“A monopolist is not required to
subsidize its competitors by doing their selling for them.”),
cert. denied, 480 U.S. 934 (1987).
As its primary argument for dismissal, GXS argues that it
has not refused to deal with Loren Data.
GXS notes that the
complaint identifies three current connections between the Loren
Data VAN and the GXS VAN, (ECF No. 9-1, at 23 (citing ECF No. 1
¶
10)),
and
that
Loren
Data
has
not
alleged
that
GXS
will
discontinue all connections in the future, only that GXS wants
to renegotiate the terms and may charge more for access to its
VAN.
has
(Id. at 24).
refused
to
In response, Loren Data contends that GXS
deal
on
certain
occasions
by
refusing
Loren
Data’s requests for interconnects and by countering the $3500
per month offer of InovisWorks to connect to GXS through its VAN
with
an
offer
to
use
GXS’
mailbox
for
$13,000
per
month.
(ECF No. 14, at 13).
As a general matter, GXS is correct that a refusal to deal
at the terms and conditions desired by a plaintiff does not
violate the Sherman Act.
See Abcor Corp. v. AM Int’l Inc., 916
F.2d 924, 929-30 (4th Cir. 1990) (holding that defendant had not
engaged in anti-competitive behavior when it enacted policy that
shifted costs of maintaining inventory to a competitor who had
previously gotten a “free ride”); Lauren Sand & Gravel, Inc. v.
25
CSX Transp., Inc., 924 F.2d 539, 544-45 (4th Cir.), cert. denied,
502 U.S. 814 (1991); Morris Commc’ns Corp. v. PGA Tour, Inc.,
364 F.3d 1288, 1296 (11th Cir. 2004) (“Section 2 of the Sherman
Act does not require [defendant] to give its product freely to
its competitors.”).
There need not be an outright refusal to
deal, however, if a defendant offers only unreasonable terms for
access to an essential facility under its control.
Hudson
Ry.
(2d Cir.
Co.
v.
1990).
Consol.
Thus,
Rail
while
Corp.,
Loren
902
Data’s
F.2d
Delaware &
174,
complaint
179-80
has
not
stated facts to support the allegation that GXS has refused
entirely to deal, if Loren Data has pleaded facts to establish
that
GSX’
VAN
is
an
essential
facility
and
that
the
terms
offered by GSX were unreasonable, its claim for monopolization
may survive.
The essential facilities doctrine has never been expressly
rejected or adopted by the Supreme Court, Trinko, 540 U.S. at
410, but has been cited and relied upon by the courts of appeal.
See, e.g., MCI Commc’ns v. Am. Tel. & Tel. Co., 708 F.2d 1081,
1132–33 (7th Cir.), cert. denied, 464 U.S. 891 (1983); Laurel
Sand & Gravel, Inc., 924 F.2d at 544; Delaware & Hudson Ry. Co.,
902
F.2d
at
179-80.
In
order
to
establish
a
violation
of
section 2 using this doctrine, four elements must be proven:
(1) control by the monopolist of the essential facility; (2) the
26
inability of the competitor seeking access to practically or
reasonably
facility
duplicate
to
the
the
facility;
competitor;
and
(4)
monopolist to provide the facility.
F.2d
at
544.
To
be
(3)
essential,
the
the
denial
of
feasibility
the
of
the
Laurel Sand & Gravel, 924
“a
facility
need
not
be
indispensable; it is sufficient if duplication of the facility
would
be
economically
inflicts
a
severe
infeasible
handicap
on
and
if
denial
potential
of
market
its
use
entrants.”
Fishman v. Estate of Wirtz, 807 F.2d 520, 539 (7th Cir. 1986).
Other
courts
“merely
have
helpful,
viability,”
Am.
explained
but
that
vital
to
Inc.
v.
the
Online,
the
facility
claimant’s
GreatDeals.Net,
must
not
be
competitive
49
F.Supp.2d
851, 862 (E.D.Va. 1999), and that a plaintiff must show “more
than inconvenience or even some economic loss” stemming from the
lack
of
essential.
access
to
the
facility
to
establish
that
it
is
Advance Health-Care Servs. v. Giles Mem’l Hosp., 846
F.Supp. 488, 498 (W.D.Va. 1994).
Moreover, the owner of an
essential facility is not obligated to make it available under
whatever terms the competitor wishes; the owner need only offer
access under reasonable terms.
924 F.2d at 544.
See Laurel Sand & Gravel, Inc.,
Terms are not unreasonable simply because they
will reduce a competitor’s profits.
Id.
Indeed as the Seventh
Circuit has explained, “the most economical route is not an
27
essential facility when other routes are available.”
Midwest
Gas Servs., Inc. v. Indiana Gas Co., Inc., 317 F.3d 703, 714
(7th Cir. 2003) (citing Endsley v. City of Chicago, 230 F.3d 276,
683 (7th Cir. 2000)) (holding that defendant’s refusal to allow
plaintiff
to
interconnect
to
its
gas
pipeline
network
where
other routes were available to transport the gas to its end
destination did not constitute denial of access to an essential
facility).
Here, Loren Data has not alleged facts to establish that
GXS is liable pursuant to the essential facilities doctrine.
Although Loren Data tries to argue that without an interconnect
to the GSX VAN it cannot continue its business operations, the
alleged facts do not demonstrate that the GXS VAN is essential
or that Loren Data has not been offered reasonable means of
access.
First, Loren Data acknowledges that there are at least
36 VANs aside from GXS, as well as other means of transferring
EDI
from
one
trading
partner
to
another.
In
addition,
the
complaint alleges that Loren Data has successfully worked around
GXS’ refusal to provide an interconnect for the past ten years,
by using a metered mailbox and by interconnecting with other
VANs that can interconnect with GXS’ customers.
There are also
no alleged facts from which one can conclude that the terms
28
offered
by
GXS
for
Loren
Data
to
connect
via
a
commercial
mailbox are unreasonable.
b.
In
Attempted Monopoly
contrast
to
claims
of
actual
monopolization,
to
establish attempted monopoly under section 2 a plaintiff must
demonstrate that the defendant had specific intent to monopolize
and a dangerous probability of success at achieving monopoly
power.
(4th Cir.
In re Microsoft Antitrust Litig., 333 F.3d 517, 534
2003).
Specific
intent
may
defendant’s anticompetitive practices.
be
inferred
from
the
M & M Med. Supplies &
Serv., Inc. v. Pleasant Valley Hosp., Inc., 981 F.2d 160, 166
(4th Cir. 1992) (citing Abcor, 916 F.2d at 927; Gen. Indus. Corp.
v. Hartz Mountain Corp., 810 F.2d 795, 802 (8th Cir. 1987)).
But
where there are legitimate business reasons motivating a refusal
to deal, the requisite intent for an attempt to monopolize claim
is not met.
See J.H. Westerbeke Corp. v Onan Corp., 580 F.Supp.
1173 (D.Mass. 1984).
GXS contends that Loren Data has failed to state a claim
for attempted monopolization because it has not alleged facts to
show specific intent or a dangerous probability of success.
As
discussed above, the conduct that Loren Data alleges does not
demonstrate that GSX had an intent to monopolize.
GSX does
business with other VAN providers, large and small, including
29
offering them interconnects.
Loren Data has also not alleged
facts to establish a dangerous probability that GXS will succeed
in establishing a monopoly.
The requirements for establishing a
dangerous probability of success were set forth in M & M Medical
Supplies and Service, Inc..
There the Fourth Circuit explained:
The
third
element
of
attempted
monopolization, a dangerous probability of
success, must be shown to be substantial and
real. Market share is relevant, but its
relevance is tempered by evidence of the
other two elements of the claim. Compelling
evidence of an intent to monopolize or of
anticompetitive conduct reduces the level of
market share that need be shown. Conversely,
weak evidence of the other two elements
requires a showing of significant market
share.
A
rising
share
may
show
more
probability of success than a falling share.
Other factors must be considered, such as
ease of entry, which heralds slight chance
of success, or exclusionary conduct without
the
justification
of
efficiency,
which
enhances the likelihood of success.
981 F.2d at 168 (citing generally 3 Philip Areeda & Donald F.
Turner, Antitrust Law ¶ 835, at 346-48 (1978)).
Loren Data alleges that GXS has conducted “an aggressive
campaign” in the last decade to control and monopolize the EDI
communications market and identifies two examples in support:
(1) GXS’ acquisition of a division of IBM in 2005; and (2) its
merger with Inovis in 2010.
(ECF No. 1 ¶ 7).
Putting aside
Loren Data’s characterizations, two acquisitions in a ten year
period
with
no
allegation
of plans
30
for
future
mergers
or
acquisitions do not suggest that GXS is on the path to market
domination.
refusal
to
Loren Data further attempts to characterize GXS’
grant
Loren
Data
an
interconnect
iteration of GXS’ monopolization goals.
as
the
latest
The problem with this
argument is that Loren Data simultaneously alleges that GXS has
granted interconnects to every other VAN, large or small, and
that GXS has refused to grant an interconnect to Loren Data for
the past ten years.
(Id. ¶ 6).
GXS is not likely to gain
monopoly control over the industry if it refuses to deal with
only one of 36 available VAN networks.
Moreover the fact that
GXS has granted interconnects to so many other VANs makes it
unlikely that GXS’ denial of an interconnect to Loren Data will
have a negative impact on competition in the relevant market.
For all these reasons, Loren Data has not stated a claim
for monopolization or attempted monopolization under section 2
of the Sherman Act.
B.
Maryland State Law Claims
GXS argues that if the federal claims are dismissed, the
state law claims must also be dismissed for lack of subject
matter jurisdiction.
GXS argues, first, that Loren Data did not
allege supplemental jurisdiction over the state law claims and,
second, that once the federal antitrust claims are dismissed
there is no reason for the court to exercise jurisdiction over
31
the state law claims.
(ECF No. 9-1, at 43-44).
Loren Data did
not respond to these arguments in its opposition.
Counts IV, V, and VI of Loren Data’s complaint arise under
Maryland
state
law.
Title
28
U.S.C.
§
1367
grants
federal
courts supplemental jurisdiction over state law claims that are
related to claims for which the court has original jurisdiction.
GXS argues that Loren Data’s failure to invoke this statute in
its complaint is fatal and precludes the court from exercising
jurisdiction over the state law claims.
Ordinarily a party
should provide “a short plain statement of the grounds upon
which the court’s jurisdiction depends.”
of
Frederick,
191
F.3d
394,
399
Pinkley Inc. v. City
(4th
Cir.
1999)
(citing
Fed.R.Civ.P. 8(a)(1)), cert. denied, 528 U.S. 1155 (2000).
The
Fourth Circuit went on to note in Pinkley:
there is some authority that in the absence
of
an
affirmative
pleading
of
a
jurisdictional basis a federal court may
find that it has jurisdiction if the facts
supporting jurisdiction have been clearly
pleaded.
‘The pleading can either refer to
the appropriate jurisdictional statute or
contain factual assertions that, if proved,
establish jurisdiction.’
Id.
(quoting
1997)).
§
1367
2
Moore’s
Federal
Practice
§
8.03[3]
(3d
ed.
Consequently, Loren Data’s failure to invoke 28 U.S.C.
does
not
mandate
dismissal
of
its
state
law
claims.
Furthermore, although diversity jurisdiction is not referenced
32
in the body of its complaint, Loren Data’s civil cover sheet
indicates
its
intent
to
invoke
diversity
jurisdiction,
identifies the parties as having diverse citizenship, and states
a
total
amount
in
ECF No. 1-1).
controversy
in
excess
of
$75,000.
(See
The complaint also alleges facts to support
diversity jurisdiction for some claims.
For this reason, the
merits of Loren Data’s state law claims should be considered.
1.
Maryland Antitrust Law Claim
Count IV alleges a violation of Maryland’s antitrust law,
Md. Code Ann. § Com. Law §§ 11-204(a)(1)-(3).
204(a)(1)
and
11-204(a)(2)
mirror
sections
1
Sections 11and
2
of
the
Sherman Act and are interpreted concordantly with the Sherman
Act.3
n.4
havePOWER, LLC v. Gen. Elec. Co., 183 F.Supp.2d 779, 785
(D.Md.
2002)
(recognizing
that
Md.
Code
Ann.,
Com.
Law
§ 11-202(a)(2) expressly states the General Assembly’s intent
that when construing the antitrust subtitle, courts should “be
guided by the interpretation given by the federal courts to the
3
Md. Code Ann. § Com. Law § 11-204(a)(1) provides that a
person may not “[b]y contract, combination, or conspiracy with
one or more other persons, unreasonably restrain trade or
commerce.”
§ 11-204(a)(2) provides that a person may not
“[m]onopolize, attempt to monopolize, or combine or conspire
with one or more other persons to monopolize any part of the
trade or commerce within the State, for the purpose of excluding
competition or of controlling, fixing, or maintaining prices in
trade or commerce.”
33
various
federal
statues
dealing
with
the
same
or
similar
matters, including . . . 15 U.S.C. §§ 1 though 7.”); Natural
Design,
Inc.
v.
Rouse
Co.,
302
Md.
47,
53
and
67
(1984)
(“Section 11-204(a)(1) of the Maryland Act is essentially the
same as § 1 of the Sherman Antitrust Act” and “Section 11204(a)(2) is analogous to § 2 of the Sherman Act”).
When an
antitrust claim fails under federal law, that claim will also
fail
under
the
analogous
Maryland
state
antitrust
law.
Hinkleman v. Shell Oil Co., 962 F.2d 372, 379 (4th Cir. 1992).
Accordingly, Loren Data’s claims that GXS has violated §§ 11204(a)(1) and (2) must be dismissed.
Loren Data has not alleged a violation of federal law that
directly parallels Md. Code Ann., Com. Law § 11-204(a)(3).
subsection provides that one may not:
Directly or indirectly discriminate in price
among purchasers of commodities or services
of like grade and quality, if the effects of
the discrimination may:
(i) Substantially lessen competition;
(ii) Tend to create a monopoly in any line
of trade or commerce; or
(iii)
Injure,
destroy,
or
prevent
competition with any person who grants or
knowingly
receives
the
benefit
of
the
discrimination or with customers of either
of them[.]
34
This
This subsection mirrors section 13(a) of the Robinson Patman
Act,
15
U.S.C.
F.Supp.2d
417,
§ 13(a).
420
See
(D.Md.
Soth
v.
1996);
Baltimore
Berlyn,
Inc.
Sun
Co.,
v.
Gazette
Newspapers, 223 F.Supp.2d 718, 741-42 (D.Md. 2002).
4
To state a
claim for price discrimination under the Robinson Patman Act, a
plaintiff must allege that (1) the commodity or service was sold
in
interstate
commerce;
(2)
the
services
or
goods
sold
to
plaintiff were of the same grade or quality as those sold to
others;
(3)
plaintiff
the
and
defendant
others;
discriminated
and
(4)
the
prohibited effect on competition.
496
U.S.
543,
556
(1990);
in
price
between
discrimination
had
a
Texaco, Inc. v. Hasbrouch,
Mikeron,
Inc.
v.
Exxon
Co.,
264
F.Supp.2d 268, 275 (D.Md. 2003).
The same requirements apply to
claims
§
stating
a
violation
of
11-204(a)(3)
of
Maryland’s
antitrust law, absent the requirement of an interstate nexus.
Here, Loren Data has failed to state a claim under § 11204(a)(3) because it has not alleged a prohibited effect on
competition.
With
respect
to
this
count,
Loren
Data’s
allegation is nothing more than a recitation of the statutory
language with no additional facts to distinguish this claim from
any of the other antitrust violations alleged.
And as discussed
above, Loren Data has not alleged facts that show that GXS has
or is attempting to obtain monopoly power, or that GXS’ actions
35
have had or will have a negative effect on competition.
For all
these reasons, count IV will be dismissed.
2.
Tortious Interference
Count V alleges that GXS tortiously interfered with Loren
Data’s business relationships.
A tortious interference claim
under Maryland law requires proof of intentional acts “done with
the unlawful purpose to cause . . . damage and loss to the
plaintiffs
justifiable
in
their
cause
lawful
on
the
constitutes malice[.]”
Evander
&
Assocs.,
part
of
without
the
right
defendants
or
which
Alexander & Alexander Inc. v. B. Dixon
Inc.,
quotations omitted).
business,
336
Md.
635,
655
(1994)
(internal
“Wrongful or unlawful acts include common
law torts and violence or intimidation, defamation, injurious
falsehood or other fraud, violation of criminal law, and the
institution
or
threat
of
groundless
prosecutions in bad faith.”
civil
because
foreseeably
the
impinge
defendant’s
upon
relations with others.”
or
criminal
K & K Mgmt. v. Lee, 316 Md. 137,
166 (1989) (internal quotations omitted).
simply
suits
a
breach
The tort does not lie
of
contracting
contract
party’s
“would
economic
Alexander & Alexander Inc., 336 Md.
at 656.
The complaint does not identify the specific wrongful acts
upon which Loren Data is relying for its claim.
36
GXS contends
that the only potential wrongful acts alleged are the antitrust
violations
and
because
these
claims
are
tortious interference claim also fails.
47).
being
dismissed
the
(ECF No. 9-1, at 46-
Loren Data concedes that its antitrust allegations were
one basis for its wrongful interference claim but argues that
the complaint contains other allegations of conduct that could
constitute
wrongful
interference.
Specifically, Loren Data lists:
(ECF
No.
14,
at
28).
(1) GXS’ general denial of the
industry standard settlement interconnect; (2) GXS’ breach of
Loren Data’s contract with Inovis by discontinuing Loren Data’s
interconnect
with
Tradanet
in
the
United
Kingdom;
(3)
GXS’
failure to service IBM’s contract with the Department of Defense
under
which
Loren
Data
was
a
subcontractor;
(4)
GXS’
interference with Loren Data’s client relations; (5) and GXS
persistent
refusal
to
grant
an
appropriately
configured
interconnect after settlement in the Covisint matter.
None
of
these
allegations
identify
conduct
that
has
(Id.).
been
recognized as wrongful or unlawful for the purpose of stating a
claim for tortious interference.
Loren Data’s failure to allege
a wrongful act is fatal to its tortious interference claim.
3.
Breach of Contract
Finally, count VI alleges that GXS is liable for breach of
contract.
The original complaint alleged only that GXS “is in
37
breach of its contracts with the Plaintiff both in its long-term
relationship
and
in
(ECF No. 1 ¶ 45).
its
current
contract
with
Inovis,
Inc.”
The supplemental statement of facts in the
amended complaint elaborates on this claim and identifies two
specific contracts that GXS allegedly breached.
¶ 11).
(ECF No. 13
For the first identified contract, Loren Data alleges
damages
of
$24,832.49;
no
amount
of
damages
is
alleged
for
breach of the second contract.
Assuming
state
a
that
claim
Loren
for
Data
breach
has
of
alleged
contract,
adequate
it
has
facts
not
to
alleged
adequate damages for the court to exercise independent diversity
jurisdiction over this count.
28 U.S.C. § 1332(a) gives federal
district courts diversity jurisdiction only for civil actions
where the amount in controversy “exceeds the sum or value of
$75,000.”
below
the
Count VI alleges an amount of damages significantly
statutory
threshold.
Typically
claims
can
be
aggregated to satisfy the minimum threshold, but because the
remainder of Loren Data’s counts will be dismissed for failure
to state a claim, and count VI does not satisfy the minimum
threshold
on
its
own,
the
court
merely
supplemental jurisdiction over this count.
58 F.3d 106, 109-10 (4th Cir. 1995).
possesses
potential
Shanaghan v. Cahill,
As noted therein, 28 U.S.C.
§ 1367(c)(3) provides that “the district courts may decline to
38
exercise supplemental jurisdiction over a claim . . . if . . .
the district court has dismissed all claims over which it has
original jurisdiction.”
primarily
on
Dismissal is favored in cases turning
questions
of
state
law,
because
“[n]eedless
decisions of state law [by federal courts] should be avoided
both as a matter of comity and to promote justice between the
parties,
by
procuring
applicable law.”
trial
them
a
surer-footed
reading
of
United Mine Workers of America v. Gibbs, 383
U.S. 715, 726 (1966).
before
for
or
even
Particularly in a case, such as this one,
discovery,
has
begun,
“the
balance
of
factors . . . point[s] toward declining to exercise jurisdiction
over the remaining state-law claims.”
Carnegie-Mellon Univ. v.
Cohill, 484 U.S. 343, 350, n.7 (1988); see also Taylor v. Giant
Food, Inc., 438 F.Supp.2d 576, 580 (D.Md. 2006).
Thus,
without
the
breach
prejudice
for
of
lack
contract
of
count
subject
will
matter
be
dismissed
jurisdiction.
Loren Data will be free to pursue this claim upon filing suit in
an appropriate state court.
39
IV.
Conclusion
For the foregoing reasons, the motion to dismiss filed by
Defendant GXS, Inc. will be granted.
A separate order will
follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
40
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