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United States Court of Appeals for the Ninth Circuit
October 6, 2014, Argued and Submitted, Pasadena, California; August 25, 2015, Filed
[*1189] BEA, Circuit Judge:
Where a large musical-instrument retailer pressures individual guitar manufacturers to set the lowest prices at which the manufacturers will permit any retailer to advertise the manufacturers' products—and each manufacturer acquiesces—can we infer the manufacturers conspired among themselves to fix prices?
Plaintiffs ask us to answer this question in the affirmative. They claim it is plausible to infer a price-fixing conspiracy based only on allegations that certain guitar manufacturers each adopted similar advertising policies ("parallel conduct") under circumstances that suggest the manufacturers agreed among themselves to adopt those policies ("plus factors"). But plaintiffs' plus factors are no more consistent with an illegal agreement than with rational and competitive business [**4] strategies, independently adopted by firms acting within an interdependent market. Plaintiffs' allegations of "merely parallel conduct that could just as well be independent action" are insufficient to state a claim under § 1 of the Sherman Act, 15 U.S.C. § 1. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 557, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007). And because plaintiffs' plus factors add nothing, we affirm the judgment of the district court dismissing plaintiffs' § 1 claim.
Plaintiffs, a putative class, purchased guitars and guitar amplifiers from defendant Guitar Center, Inc. ("Guitar Center"), the largest retail seller of musical instruments in the United States.2 The guitars and amplifiers were manufactured by five major manufacturers, defendants Fender Music Instruments Corp., Gibson Guitar Corp., Yamaha Corp. of America, Hoshino U.S.A., Inc., and Kaman Music Corp. ("manufacturer defendants"). In their present complaint, plaintiffs allege that between 2004 and 2009, Guitar Center and the manufacturer defendants—along with defendant trade association National Association of Music Merchants (NAMM)—conspired to implement and enforce minimum-advertised-price policies ("MAP policies") that fixed the minimum price at which any retailer could advertise the manufacturers' guitars and guitar [**5] amplifiers. According to plaintiffs, these MAP policies tended to raise retail prices and restrain competition. Plaintiffs allege that each manufacturer agreed with Guitar Center to adopt MAP policies and that the manufacturers agreed among themselves [*1190] to adopt the MAP policies proposed by Guitar Center. Plaintiffs claim this collection of agreements violates § 1 of the Sherman Act and the antitrust laws of Massachusetts and California.
Prior Federal Trade Commission Investigation and Settlement
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
798 F.3d 1186 *; 2015 U.S. App. LEXIS 14960 **; 2015-2 Trade Cas. (CCH) P79,274
IN RE: MUSICAL INSTRUMENTS AND EQUIPMENT ANTITRUST LITIGATION,JOSHUA RAMSEY; DAVID GIAMBUSSO; DWAYNE WIGGINS; JASON PARADISE; KATE MACWILLIAMSON; NIRANJAN PARIKH; PAULA JENNINGS; RYAN J. BIGG; MARK O'LEARY; CYNTHIA SEPULVEDA; RUSSELL D. MELTON; JERRY JOST; KEVIN GAGNEPAIN; JOSH PEARSON; JOHN PEARSON; MARY PEARSON; COLBY GILES; DAVID KEEL; WILLIAM S. POFF; ALLEN HALE; DANIEL T. SMITH; GERALD LOGSDON; AUGUSTIN CERVANTES; BENN FELTHEIMER; BRYAN ROACH; BRANDON ARMSTRONG; RICHARD TABAS; ALLEN HALE; KENNETH MANYIN; RUSSELL D. MELTON; JON BANDISH; MARK O'LEARY; ALEX TELLER; SCOTT COOK; JOSHUA SEILER; JOHAN EDWARD RIGOR; WALTER WITHERSPOON; ROBERT LESKO; SUZANNE ONDRE; LISA PRITCHETT, Plaintiffs-Appellants, v. NATIONAL ASSOCIATION OF MUSIC MERCHANTS, INC.; GUITAR CENTER, INC.; GUITAR CENTER STORES, INC.; FENDER MUSICAL INSTRUMENTS CORP.; YAMAHA CORPORATION OF AMERICA; GIBSON GUITAR CORPORATION; HOSHINO, U.S.A., INC.; KAMAN MUSIC CORPORATION, Defendants-Appellees.
Prior History: [**1] Appeal from the United States District Court for the Southern District of California. D.C. No. 3:09-md-02121-LAB-DHB. Larry A. Burns, District Judge, Presiding.
In re Nat'l Ass'n of Music Merchs., 2012 U.S. Dist. LEXIS 118827 (S.D. Cal., Aug. 17, 2012)
manufacturer, policies, Guitar, conspiracy, horizontal, prices, allegations, factors, retail price, competitors, plaintiffs', collusion, Music, amplifiers, illegal agreement, interdependent, majority opinion, vertical, Sherman Act, self-interest, conspire, motive, terms, district court, hub-and-spoke, Advertised, antitrust, meetings, restrain, retailer
Civil Procedure, Appeals, Standards of Review, De Novo Review, Pleadings, Complaints, General Overview, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Antitrust & Trade Law, Regulated Practices, Price Fixing & Restraints of Trade, Sherman Act, Cartels & Horizontal Restraints, Price Fixing, Vertical Restraints, Per Se Rule & Rule of Reason, Claims, Evidence, Inferences & Presumptions, Inferences, Federal Trade Commission Act