Insulate SB, Inc. v. Advanced Finishing Systems

Insulate SB, Inc., a purchaser of fast-set spray foam equipment (FSE), filed this

antitrust class action alleging FSE manufacturer Graco Inc. and its subsidiary Graco

Minnesota Inc. (Graco) and a number of FSE distributors (Distributors) (collectively,

appellees) conspired to restrain trade in violation of federal antitrust law, see 15

U.S.C. § 1, et seq., and numerous state antitrust and consumer protection laws.

Insulate claims these conspiracies kept Graco’s competitors out of the market,

allowing Graco and the Distributors to charge artificially high prices. The district

court dismissed the action on the pleadings, 1 and with appellate jurisdiction under

28 U.S.C. § 1291, we affirm.

I. BACKGROUND2

Graco manufactures FSE and sells it to distributors, who then resell on the open

market to consumers like Insulate. Because there is no direct market for FSE,

distributors are key to its sale. Insulate purchased FSE from defendant distributor

Intech Equipment & Supply, L.L.C. and claims Graco’s anticompetitive practices

forced it to pay an artificially high price. In 2005, Graco purchased a competing FSE

manufacturer, Gusmer Corp., thus achieving a 65% share of the North American FSE

market, and in 2008, Graco purchased competitor GlasCraft, Inc., raising its market

share “to above 90%.”

Insulate alleges at some point “Graco agreed with its Distributors individually

and collectively to enter into exclusive dealing arrangements for the purpose of

1The Honorable Ann D. Montgomery, United States District Judge for the

District of Minnesota.

2Because this case was disposed on a motion to dismiss, we state the well-pled

facts as alleged in the complaint. See Zayed v. Assoc. Bank, N.A., 779 F.3d 727, 730

(8th Cir. 2015).

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keeping new and potential entrants out of the FSE market.” Insulate further alleges

“key Distributors” assisted Graco in advancing its anticompetitive scheme. In

October 2007, Graco sent a letter to its distributors citing the “best efforts” clause in

its distributor agreements and expressing its preference that distributors refrain from

adding non-Graco products. The letter stated:

It is our opinion that taking on an additional competitive product

line may significantly reduce the “best efforts” of a Graco distributor to

sell our Graco and Gusmer product lines. Graco realizes that a business

owner must make independent decisions regarding product lines

competitive to Graco and Gusmer product offerings. . . .

Should a distributor add a competitive product line, it will result

in an immediate review of our business relationship and may impact

access to specific products, changes in addendum status or possible

elimination of our distributor agreement. . . .

This position has been adopted by us unilaterally.

Insulate contends these distributor agreements kept potential competitor Gama

Machinery USA, Inc. from entering the FSE market. In January 2009, Foampak,

Inc.—a Graco distributor not named as a defendant—considered carrying Gama

products but chose not to after Graco executives met with Foampak’s president and

threatened to end its distributorship. “Considering it a better decision for its business,

Foampak acquiesced.” In February 2012, Graco sent a letter to its distributors

“reminding” them to not carry Gama products. Insulate alleges exclusive dealing

agreements allowed Distributors to “charge Contractors anticompetitive prices for

[FSE] and control geographic distribution areas and exclude new distributors from

such areas.”

In March 2008, Graco sued Gama alleging, among other things, theft of trade

secrets, and Gama counterclaimed alleging, among other things, Graco had

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unilaterally monopolized the FSE market in violation of Sherman Act Section 2,

15 U.S.C. § 2.

In 2013, the United States Federal Trade Commission (FTC) also drafted a

complaint against Graco accusing Graco of unlawfully acquiring its competitors in

violation of Clayton Act Section 7, id. § 18. Graco and the FTC entered a consent

agreement which confirmed Graco would not engage in any practice “that has the

purpose or effect of achieving Exclusivity with any Distributor.” The consent

agreement did “not constitute an admission by [Graco] that the law ha[d] been

violated,” and Graco emphasizes “the FTC did not allege” that Graco’s activities were

unlawful.

On June 14, 2013, after learning of the FTC complaint, Insulate filed the instant

suit. Insulate claimed Graco and a collection of FSE distributors, through

“agreements in restraint of trade,” conspired to reduce competition in violation of the

Sherman Act, the Clayton Act, and numerous states’ antitrust and consumer

protection laws. The district court granted the appellees’ motions to dismiss, finding

(1) Insulate’s federal claims were barred by the statute of limitations; (2) Insulate had

failed to state a claim on its federal causes of action; (3) Insulate, as a California

resident, could not bring state law claims for states other than California; and

(4) Insulate had not met the California antitrust statute of limitations and failed to

state a claim under California’s Unfair Competition Law.3 Insulate appeals.

3The district court also denied Insulate’s request for injunctive relief on its

federal antitrust claims. We do not reach the district court’s statute of limitations

decisions.

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II. DISCUSSION

A. Federal Antitrust Claims

1. Federal Antitrust Standing

“[T]he focus of the doctrine of ‘antitrust standing’ is somewhat different from

that of standing as a constitutional doctrine.” Associated Gen. Contractors of Cal.,

Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 535 n.31 (1983); cf. NicSand,

Inc. v. 3M Co., 507 F.3d 442, 449 (6th Cir. 2007) (en banc) (describing the doctrine

of antitrust standing as more rigorous than Article III standing and explaining courts

“must[] reject claims under [Federal Rule of Civil Procedure] 12(b)(6) when antitrust

standing is missing”). To bring a federal antitrust claim, “a private plaintiff must

demonstrate that he has suffered an ‘antitrust injury’ as a result of the alleged conduct

of the defendants.” In re Canadian Import Antitrust Litig., 470 F.3d 785, 791 (8th

Cir. 2006). An “antitrust injury” is an “injury of the type the antitrust laws were

intended to prevent . . . that flows from that which makes defendants’ acts unlawful.”

Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977). “[T]he

Supreme Court [has] held that a remote or ‘indirect’ purchaser was not a person

injured” under federal antitrust law. In re Midwest Milk Monopolization Litig., 730

F.2d 528, 529 (8th Cir. 1984) (citing Ill. Brick Co. v. Illinois, 431 U.S. 720, 735

(1977)).

The appellees claim Insulate, as an indirect purchaser of FSE, lacks standing

to bring its antitrust claims. Our court has suggested that indirect purchasers may

bring an antitrust claim if they allege the direct purchasers are “party to the antitrust

violation” and join the direct purchasers as defendants. Campos v. Ticketmaster

Corp., 140 F.3d 1166, 1170-71 & nn.3-4 (8th Cir. 1998). We now hold as much.

Because Insulate’s complaint alleges conspiracies between Graco and the Distributors

and names the Distributors as defendants, Insulate has adequately established it has

antitrust standing.

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2. Failure to State a Claim

The presence of antitrust standing does not answer the distinct question

whether Insulate has sufficiently stated a claim under Federal Rule of Civil Procedure

12(b)(6). Cf. Hutterville Hutterian Brethren, Inc. v. Sveen, 776 F.3d 547, 554 (8th

Cir. 2015).

“We review de novo the district court’s grant of a motion to dismiss under Rule

12(b)(6).” Retro Television Network, Inc. v. Luken Commc’ns, LLC, 696 F.3d 766,

768 (8th Cir. 2012). “[A] plaintiff’s obligation 4 to provide the grounds of his

entitlement to relief requires more than labels and conclusions, and a formulaic

recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 555 (2007) (internal marks omitted).

Given “the unusually high cost of discovery in antitrust cases,” id. at 558, “the

limited ‘success of judicial supervision in checking discovery abuse[,]’ and ‘the threat

[that] discovery expense will push cost-conscious defendants to settle even anemic

cases . . . ,’ the federal courts have been reasonably aggressive in weeding out

4On appeal, Insulate asks this court to take judicial notice of a number of

documents concerning the FTC and Gama actions—including the FTC complaint and

related documents, the district court’s order denying summary judgment to Graco in

the Gama suit, and a transcript of a deposition taken in the Gama suit—that Insulate

believes are “supportive of the plausibility of [its] claims.” Federal Rule of Evidence

201(b) allows this court to take judicial notice of public documents for the purpose

of noting undisputed adjudicative facts, but judicial notice is inappropriate to the

extent Insulate offers these documents for the “truth of the matters within them and

inferences to be drawn from them–matters which [Graco] disputes.” Kushner v.

Beverly Enters., 317 F.3d 820, 832 (8th Cir. 2003). We thus grant Insulate’s motion

for judicial notice of these documents to the extent we note the existence of and basic

facts surrounding these actions, but we decline to consider the documents as evidence

Graco actually engaged in any anticompetitive conduct alleged therein.

Insulate’s motion to supplement the record is denied.

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meritless antitrust claims at the pleading stage,” NicSand, 507 F.3d at 450 (second

alteration in original) (quotation omitted) (quoting Twombly, 550 U.S. at 559). Cf.

In re Text Messaging Antitrust Litig., 630 F.3d 622, 625-26 (7th Cir. 2010) (“When

a district court by misapplying the Twombly standard allows a complex case of

extremely dubious merit to proceed, it bids fair to immerse the parties in the

discovery swamp . . . and by doing so create irrevocable as well as unjustifiable harm

to the defendant.”).

On appeal, Insulate challenges the dismissal of three federal antitrust claims:

(1) conspiracy to restrain trade through the use of exclusionary agreements in

violation of Sherman Act Section 1; (2) “attempt and conspiracy to” “acquire,

maintain, and enhance Graco’s monopoly power” in violation of Sherman Act Section

2; and (3) “use of exclusionary contracts to substantially lessen competition” in

violation of Clayton Act Section 3.5 As relevant to this case, the critical element of

each claim is concerted action—i.e., the existence of a contract or conspiracy. See

15 U.S.C. §§ 1, 2, 14. “[T]o satisfy the concerted action requirement, the plaintiff

must demonstrate that the defendants shared a ‘unity of purpose or a common design

and understanding, or a meeting of the minds.’” Impro Prods., Inc. v. Herrick, 715

F.2d 1267, 1273 (8th Cir. 1983) (quoting Am. Tobacco Co. v. United States, 328 U.S.

781, 810 (1946)). Pleading only “parallel conduct” or other conduct “merely

consistent with [an] agreement” is not sufficient to show a conspiracy. Twombly, 550

U.S. at 557 (emphasis added).

Insulate can satisfy the concerted action requirement by showing “two or more

persons entered into either an express or implied agreement.” Impro, 715 F.2d at

1273 (discussing Sherman Act claims); see also In re Wholesale Grocery Prods.

Antitrust Litig., 752 F.3d 728, 734 (8th Cir. 2014); Roland Mach. Co. v. Dresser

5Insulate also brought a price-fixing claim against all defendants and

monopolization and unlawful acquisition claims solely against Graco but has

expressly abandoned these claims on appeal.

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Indus., Inc., 749 F.2d 380, 392 (7th Cir. 1984) (“In order to prevail on its [Clayton

Act] section 3 claim, [the plaintiff] will have to show . . . that there was an agreement,

though not necessarily an explicit agreement.”). Insulate claims to have pled the

existence of both express anticompetitive contracts and implied exclusivity

agreements. After a thorough review of the complaint, we conclude Insulate has not

pled “enough factual matter (taken as true) to suggest that an agreement was made,”

Twombly, 550 U.S. at 556.

a. Written Exclusivity Agreements

Insulate, quoting Insignia Systems, Inc. v. News America Marketing In-Store,

Inc., 661 F. Supp. 2d 1039, 1062 (D. Minn. 2009), argues the “Appellees entered into

written exclusive dealing contracts” that are “‘sufficient to establish a contract or

conspiracy for the purposes of . . . exclusive dealing claims.’” (Alteration in original).

The complaint does not support this argument. Insulate appears to rely on Graco’s

2007 letter as evidence of these “written exclusive dealing contracts.” Because the

complaint does not allege the Distributors signed any agreement consenting to the

letter’s terms or otherwise expressly agreed to its terms, there was no “‘meeting of the

minds,’” Impro, 715 F.2d at 1273 (quoting Am. Tobacco, 328 U.S. at 810), so the

letter alone cannot constitute a written exclusive-dealing contract.

Insulate additionally suggests Graco and the Distributors’ preexisting

distributorship contracts are express contracts not to compete because, in its 2007

letter, Graco referenced the contracts’ “best efforts clause.” Graco’s unilateral

announcement of its decision not to supply distributors who also sell competing

products did not transform a prior innocuous distributor agreement into a contract for

exclusive dealing. See, e.g., United States v. Colgate & Co., 250 U.S. 300, 307

(1919) (determining a manufacturer’s later request that its products not be sold below

certain prices did not transform preexisting sales agreements between the

manufacturer and its distributors into agreements not to compete); Concord Boat

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Corp. v. Brunswick Corp., 207 F.3d 1039, 1058 (8th Cir. 2000) (explaining, although

defendant’s discount program may have created “de facto exclusive dealing

arrangements,” the discount agreements themselves “were not exclusive contracts”).

Even though the complaint contains several conclusory references to a contract,

the alleged facts do not suggest Graco entered into explicit exclusivity agreements

with any of the Distributors. See Twombly, 550 U.S. at 555 (“[A] plaintiff’s

obligation to provide the grounds of his entitlement to relief requires more than labels

and conclusions.” (internal marks omitted)).

b. Implied Agreements

Insulate, pointing to Graco’s 2007 and 2012 letters and some distributors’

resulting compliance, proposes the “Appellees’ conduct provides . . . circumstantial

evidence of anticompetitive agreements.” 6 However, in both the 2007 and 2012

letters, Graco simply stated its policy of not selling to distributors who also sold

competitors’ products.

The federal antitrust laws “do[] not restrict the long recognized right of [a]

manufacturer engaged in an entirely private business, freely to exercise his own

independent discretion as to parties with whom he will deal; and, of course, he may

announce in advance the circumstances under which he will refuse to sell.” Colgate,

250 U.S. at 307. Under the “Colgate doctrine,” “[a] manufacturer . . . generally has

a right to deal, or refuse to deal, with whomever it likes, as long as it does so

6Insulate’s complaint states the appellees entered into both an overarching huband-

spoke conspiracy and multiple small conspiracies between Graco and each of its

distributors. The parties dispute whether Insulate adequately alleged a hub-and-spoke

conspiracy. Because we conclude Insulate’s complaint does not sufficiently allege

any conspiracy—whether widespread or on an individual basis—we do not reach this

issue.

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independently.” Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 761-63

(1984) (citing Colgate, 250 U.S. at 307); accord Corner Pocket of Sioux Falls, Inc.

v. Video Lottery Techs., Inc., 123 F.3d 1107, 1111-12 (8th Cir. 1997). Indeed, a

“manufacturer can announce its [policy] in advance and refuse to deal with those who

fail to comply. And a distributor is free to acquiesce in the manufacturer’s demand

in order to avoid termination.” Monsanto, 465 U.S. at 761.

To allege the existence of a conspiracy adequately, Insulate must present

something beyond the mere fact that Graco stated its policy and the Distributors

complied. In United States v. Parke, Davis & Co., 362 U.S. 29 (1960), the Supreme

Court explained that plaintiffs can prove concerted action by showing a manufacturer

took some action “beyond mere announcement of his policy and the simple refusal

to deal[ and] employ[ed] other means which effect adherence to his” policies. Id. at

44; see, e.g., Monsanto, 465 U.S. at 765 (holding defendant’s attempts to force its

distributors to comply with its resale price policy went beyond the Colgate doctrine’s

limits); Parke, Davis, 362 U.S. at 33-36, 45 (deciding a company that policed the

implementation of its resale price policy and individually met with each of its

wholesalers and retailers to ensure compliance exceeded Colgate). Yet Colgate

protects a manufacturer who communicates a policy and then terminates distribution

agreements with those who violate that policy. See Colgate, 250 U.S. at 307; Roland,

749 F.2d at 393 (“The mere announcement of [an exclusive-dealing] policy, and the

carrying out of it by canceling [a] noncomplying dealer, would not establish an

agreement.”); see also, e.g., Lovett v. Gen. Motors Corp., 998 F.2d 575, 577, 579 (8th

Cir. 1993) (explaining the plaintiff’s evidence that a manufacturer decreased its

supply to a noncompliant distributor and told the distributor to “reconsider” its

noncompliant activities was not sufficient to support the jury’s finding of a

conspiracy and reversing the district court’s denial of judgment as a matter of law to

the manufacturer).

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Attempting to distinguish Colgate, Insulate maintains the appellees took

actions to enforce their agreements that went “‘beyond [the] mere announcement of

[a] policy and the simple refusal to deal,’” quoting Parke, Davis, 362 U.S. at 44. But

the complaint does not describe any conduct suggesting an agreement between Graco

and the Distributors. While the complaint makes some vague references to concerted

action among “key Distributors,” Insulate does not provide any factual allegations

beyond the bare conclusion that there was a conspiracy. The complaint does not

allege when the agreements occurred or even identify which of the distributors named

as defendants—if any—are among the “key Distributors” who were party to the

agreements. Without some supporting factual allegations, these conclusions are

insufficient. See Twombly, 550 U.S. at 557 (“[A] conclusory allegation of agreement

at some unidentified point does not supply facts adequate to show illegality.”); In re

Elevator Antitrust Litig., 502 F.3d 47, 50-51 (2d Cir. 2007) (per curiam) (dismissing

plaintiff’s complaint because the complaint generally recounted antitrust violations

“without any specification of any particular activities by any particular defendant; it

is nothing more than a list of theoretical possibilities, which one could postulate

without knowing any facts whatever” (quotation and marks omitted)); accord

Twombly, 550 U.S. at 565 n.10 (doubting whether a complaint “mention[ing] no

specific time, place, or person involved in the alleged conspiracies” would adequately

state a claim).

The only allegations in the complaint that come close to suggesting a

conspiracy are those concerning Foampak. The complaint avers Graco, after learning

Foampak was considering taking on a competitive product line, flew two “top

executives” to Foampak’s headquarters to meet with Foampak executives. At this

meeting, Graco threatened to end Foampak’s distributorship, so Foampak chose not

to carry a competitive product. Insulate compares Graco’s actions here to similar

behavior in Monsanto, which the Supreme Court found exceeded the Colgate

doctrine’s limits. See Monsanto, 465 U.S. at 765 (explaining Monsanto’s multiple

attempts to force distributor compliance with its resale price policy by threatening

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termination and “complain[ing] to [a] distributor’s parent company” were sufficient

to support the jury’s finding of an agreement).

Assuming Insulate’s complaint sufficiently alleges an agreement between

Foampak and Graco, Insulate cannot challenge this conspiracy because it has not

named Foampak as a defendant. See Campos, 140 F.3d at 1170-71 & nn.3-4. The

complaint does allege Foampak had “communications with fellow Distributors,”

broadly implying these other distributors may have been part of the alleged Graco-

Foampak conspiracy. But again Insulate does not identify any other distributor by

name, suggest when these communications occurred, or provide any other specific

factual allegation that would create an inference that an agreement was made.7

Ultimately, Insulate’s complaint fails sufficiently to allege concerted action.

The complaint repeatedly asserts Graco and an unnamed set of distributors generally

conspired to restrain trade, but these assertions are not enough. “[A] naked assertion

of conspiracy . . . gets the complaint close to stating a claim, but without some further

factual enhancement it stops short of the line between possibility and plausibility of

entitlement to relief.” Twombly, 550 U.S. at 557 (internal marks omitted). Insulate

has not provided the “factual enhancement” necessary to move its complaint forward.

7Insulate additionally references Graco’s dealings with the FTC, suggesting we

should infer Graco’s wrongdoing from the FTC’s investigation and consent

agreement. The FTC’s complaint, however, alleged Graco unlawfully acquired

competitors under Clayton Act Section 7, conduct not relevant to the conspiracy

claims alleged here. Further, the FTC consent agreement explicitly stated Graco had

made no admission of guilt. We thus decline to presume Graco violated federal

antitrust laws based on the mere existence of this settlement of a different antitrust

dispute.

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B. State Law Claim

1. Minnesota Antitrust Claim

Insulate appeals the dismissal of its claim under the Minnesota Antitrust Law

of 1971, Minn. Stat. § 325D.49 et seq., contending the district court erroneously

concluded Insulate, as a non-citizen of Minnesota, could not bring this claim.

Assuming without deciding Insulate can bring a claim under Minnesota antitrust law,

we affirm the dismissal because Insulate failed to state its claim adequately. See

Phipps v. FDIC, 417 F.3d 1006, 1010 (8th Cir. 2005) (“We may affirm the district

court’s dismissal on any basis supported by the record.”). Because “Minnesota

antitrust law is generally interpreted consistently with federal antitrust law,” Lorix v.

Crompton Corp., 736 N.W.2d 619, 626 (Minn. 2007) (en banc), and Insulate agrees

our analysis of its federal claims also applies to its Minnesota claim, Insulate’s

Minnesota antitrust claim also must be dismissed for failure to state a claim.8

2. California Claims

Insulate appeals the dismissal of its California antitrust and unfair competition

claims.

Minnesota law differs from federal law 8 in one material respect: Minnesota

allows indirect purchasers to sue manufacturers for antitrust violations. See Lorix,

736 N.W.2d at 626-27. Minnesota still imposes some “prudential limits” on antitrust

plaintiffs, including a showing of proximate cause. Id. at 631. Assuming Insulate has

alleged an anticompetitive agreement between Graco and Foampak, Insulate still

lacks standing under Minnesota law to challenge this agreement because it only

purchased FSE from Intech and has not pled any injury traceable to a Graco-Foampak

conspiracy. To the extent Insulate alleges in its brief a Minnesota monopolization

claim against Graco individually, there is nothing in the pleadings or record

mentioning this claim, and we will not consider that claim for the first time on appeal.

See Horras v. Am. Capital Strategies, Ltd., 729 F.3d 798, 803 n.3 (8th Cir. 2013).

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As with its Minnesota claim, Insulate has failed to state a claim under

California’s Cartwright Antitrust Act, Cal. Bus. & Prof. Code § 16700 et seq. “A

long line of California cases has concluded that the Cartwright Act is patterned after

the Sherman Act and both statutes have their roots in the common law.

Consequently, federal cases interpreting the Sherman Act are applicable to problems

arising under the Cartwright Act.” Marin Cnty. Bd. of Realtors, Inc. v. Palsson, 549

P.2d 833, 835 (Cal. 1976) (in bank); see also Corwin v. Los Angeles Newspaper Serv.

Bureau, Inc., 484 P.2d 953, 959 (Cal. 1971) (in bank) (“[F]ederal decisions

interpreting section 3 [of the Clayton Act] are applicable to section 16727 [of the

Cartwright Act].”). Because Insulate has not sufficiently pled a claim under federal

antitrust law, Insulate also has not stated a claim under the Cartwright Act. See, e.g.,

nSight, Inc. v. PeopleSoft, Inc., 296 Fed. App’x 555, 557 n.3 (9th Cir. 2008)

(unpublished memorandum) (“nSight’s monopolization and attempted

monopolization claims under the Cartwright Act fail for the same reasons as its

[Sherman Act] Section 2 claim.”).

Insulate similarly has failed to state a claim under California’s Unfair

Competition Law (UCL), Cal. Bus. & Prof. Code § 17200 et seq. The UCL

“prohibits unfair competition, including unlawful, unfair, and fraudulent business

acts.” Korea Supply Co. v. Lockheed Martin Corp., 63 P.3d 937, 943 (Cal. 2003).

The district court found Insulate failed to state a claim under the UCL’s unlawful

prong because Insulate did not allege a violation of the antitrust laws. Insulate now

claims the appellees engaged in both unlawful and unfair business practices.

As discussed above, Insulate has not sufficiently pled the appellees violated

any antitrust law and thus has no claim under the UCL’s unlawful prong. See Davis

v. HSBC Bank Nev., N.A., 691 F.3d 1152, 1168, 1171 (9th Cir. 2012) (explaining

“[t]o be ‘unlawful’ under the UCL, the [defendant’s] advertisements must violate

another ‘borrowed’ law” and affirming the dismissal of the plaintiff’s UCL claim

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because he failed to plead adequately a violation of California’s False Advertising

Law (quoting Cel-Tech Commc’ns, Inc. v. Los Angeles Cellular Tele. Co., 973 P.2d

527, 539-40 (Cal. 1999))).

Insulate also failed to plead a violation of the UCL’s unfair prong. In the

antitrust context, “the word ‘unfair’ . . . means conduct that threatens an incipient

violation of an antitrust law, or violates the policy or spirit of one of those laws

because its effects are comparable to or the same as a violation of the law, or

otherwise significantly threatens or harms competition.” Cel-Tech, 973 P.2d at 544.

Here, Insulate has only pled actions consistent with Graco’s “right to deal, or refuse

to deal, with whomever it likes,” Monsanto, 465 U.S. at 761, which is not unfair

conduct. See Orchard Supply Hardware LLC v. Home Depot USA, Inc., 967 F. Supp.

2d 1347, 1364 (N.D. Cal. 2013) (“[A]cts permissible under antitrust laws ‘cannot be

deemed unfair under the unfair competition law,’ at least not where a plaintiff alleges

that the acts are unfair for the same reason it argues that they violate antitrust law.”

(quoting Chavez v. Whirlpool Corp., 113 Cal. Rptr. 2d 175, 184 (Cal. Ct. App.

2001))).

While “it is one thing to be cautious before dismissing an antitrust complaint

in advance of discovery, [it is] quite another to forget that proceeding to antitrust discovery can be expensive.” Twombly, 550 U.S. at 558 (internal citation omitted).



Insulate has not pled sufficient facts to allow its case to proceed to discovery. We affirm the dismissal of Insulate’s claims.