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Todd v. Exxon Corp. - 275 F.3d 191 (2d Cir. 2001)

Rule:

On a motion to dismiss for failure to state a claim, the appellate court construes the complaint in the light most favorable to the plaintiff, accepting the complaint's allegations as true. A complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief. Thus, the issue is not whether a plaintiff will ultimately prevail but whether the claimant is entitled to offer evidence to support the claims.

Facts:

Roberta Todd alleged that the oil companies regularly shared detailed information regarding compensation paid to nonunion managerial, professional, and technical (MPT) employees and used this information in setting the salaries at artificially low levels. Todd sought money damages and equitable relief pursuant to § 1 of the Sherman Act. The district court granted the oi companies’ motion to dismiss the complaint for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6). Todd appealed.

Issue:

Did the district court err in ruling that Todd failed to state a claim pursuant to Fed. R. Civ. P. 12(b)(6)?

Answer:

Yes

Conclusion:

The appellate court determined that Todd adequately alleged a Sherman Act violation for an unlawful information exchange under the rule of reason analysis. Todd alleged a plausible product market; the district court erred by (1) requiring that the different MPT jobs be interchangeable with one another, (2) rejecting Todd’s allegation about industry-specific experience, and (3) failing to consider allegations about industry recognition. Todd supported the contention that the market was susceptible to tacit coordination by the oil companies because (1) the market was sufficiently concentrated, (2) the oil companies had in effect manufactured a form of fungibility through sophisticated comparison techniques, and (3) the supply of labor had an inherently inelastic quality. Todd also sufficiently alleged an antitrust injury and the anticompetitive potential of the information exchange.

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