Roadmap to Motion to Dismiss Post-Twombly
The case, Babyage.com, Inc. v. Toys “R” Us, Inc., gives an interesting roadmap for what must be alleged in order to survive a motion to dismiss in a post-Twombly world. The case concerns retail-price maintenance after Leegin; the allegations were that a dominant retailer (Babys “R” Us) strong-armed high-end baby-goods manufacturers to adopt and enforce RPM in an effort to exclude price-cutting internet retailers from the market. Here is a taste:
Therefore, Plaintiffs have stated enough facts to suggest the existence of several relevant markets in which competition has been harmed. Plaintiffs’ allegations are not only consistent with the existence of “high-end baby and juvenile strollers,” “high-end high chairs,” “high-end breast pumps,” “high-end baby bedding,” “high-end car seats,” and “high-end infant carriers” markets, but they suggest the existence of those markets. They do this by asserting facts about interchangeability and cross-elasticity of demand that explain why the proffered markets are not larger than Plaintiffs allege them to be. Put another way, their allegation that, for each market, a hypothetical monopolist could profitably raise prices on all in-product markets for a short time, constitute enough heft to raise the satisfaction of the relevant-market element beyond a speculative level.
Here is a pdf of the decision in the Eastern District of Pennsylvania. An article with background on the case is here. HT to Maria Dimoscato.
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