O.E.M. Glass Network, Inc. v. Mygrant Glass Co.

436 F.Supp.3d 576

O.E.M. GLASS NETWORK, INC. and Brooklyn Wholesale Glass Inc., Plaintiffs,

v.MYGRANT GLASS COMPANY, INC., Interstate Glass of Amityville NY, LLC, Metro Glass Distributing, Inc., Xinyi Auto Glass North America Corp., Vitro, S.A.B. de C.V., Vitro Automotive Glass LLC, Fuyao Glass America Inc., Auto Temp Inc., and Sika Corporation, Defendants.

19-CV-742 (NGG) (LB)

United States District Court, E.D. New York.

Signed January 30, 2020

Filed January 31, 2020

James Joseph Kovacs, Pro Hac Vice, Constantine Cannon LLP, Washington, DC, Daniel James Vitelli, David Alan Scupp, Constantine Cannon LLP, New York, NY, Leah Judge, Constantine Cannon LLP, San Francisco, CA, for Plaintiffs.

Jesse Baird McKeithen, Pro Hac Vice, Donahue Fitzgerald LLP, Andrew Scott MacKay, Pro Hac Vice, Oakland, CA, Daniel P. Scholfield, Pro Hac Vice, James T. Shearin, Pro Hac Vice, Timothy G. Ronan, Pullman & Comley LLC, Bridgeport, CT, Kaveri Banka Arora, Venable LLP, Lisa M. Buckley, Pryor Cashman LLP, Jeffrey Andrew Rosenthal, Cleary, Gottlieb, Steen & Hamilton, Rena Andoh, Sheppard Mullin Richter & Hampton LLP, Adam Stewart Katz, Ryan William McNagny, Goldberg Segalla LLP, Heather M. Zimmer, Herrick, Feinstein LLP, Catherine Yunie Stillman, Baker & McKenzie LLP, New York, NY, Jerry Frank Hogue, Pro Hac Vice, White & Case LLP, David I. Gelfand, Pro Hac Vice, Kathleen W. Bradish, Pro Hac Vice, Cleary Gottlieb Steen & Hamilton LLP, Mark H. Hamer, Pro Hac Vice, Washington, DC, Michael W. Scarborough, Pro Hac Vice, Sheppard Mullin Richter & Hampton, Daniel Mason, Pro Hac Vice, Furth Salem Mason & Li LLP, San Francisco, CA, Matthew Blickensderfer, Pro Hac Vice, Gabriel Davis, Pro Hac Vice, Frost Brown Todd, LLC, Cincinnati, OH, for Defendants.

MEMORANDUM & ORDER

NICHOLAS G. GARAUFIS, United States District Judge

Plaintiffs O.E.M. Glass Network, Inc. and Brooklyn Wholesale Glass Inc. (collectively, "OEMGN" or "Plaintiffs") bring antitrust claims against Defendants Mygrant Glass Company, Inc. ("Mygrant"); Interstate Glass of Amityville NY, LLC and Metro Glass Distributing, Inc. (collectively, "Interstate"); Xinyi Auto Glass North America Corp. ("Xinyi"); Vitro, S.A.B. de C.V., Vitro Automotive Glass LLC, and Vitro Automotriz, S.A. de C.V. ("Vitro Automotriz," and, collectively with Vitro S.A.B. de C.V. and Vitro Automotive Glass LLC, "Vitro"); Fuyao Glass America Inc. ("Fuyao"); Auto Temp Inc. ("ATI"); and Sika Corporation ("Sika"). (Am. Compl. (Dkt. 99).) Plaintiffs allege that Defendants entered into an illegal conspiracy to eliminate OEMGN, a wholesaler of aftermarket auto glass, by orchestrating a group boycott among OEMGN's competitors and suppliers. (Id. ¶ 1.) Plaintiffs allege that this conduct amounts to a per se illegal group boycott (id. ), and that Defendants' conduct violates the Sherman Act and New York's Donnelly Act and constitutes tortious interference with OEMGN's prospective business relations (id. ¶ 6).

Currently pending before the court is Defendants' motion to dismiss Plaintiffs' Amended Complaint. (See Defs. Mot to Dismiss ("Mot.") (Dkt. 88); see also Aug. 21, 2019 Stip. & Order (Dkt. 102) (applying Defendants' fully briefed motion to Plaintiffs' Amended Complaint).) For the following reasons, Defendants' motion is GRANTED IN PART and DENIED IN PART.

I. BACKGROUND

A. Facts

The court takes the following statement of facts from Plaintiffs' Amended Complaint, the well-pleaded allegations of which the court generally accepts as true. See N.Y. Pet Welfare Ass'n v. City of New York , 850 F.3d 79, 86 (2d Cir. 2017).

1. The Parties

OEMGN is an aftermarket auto glass¹ wholesaler. (Am. Compl. ¶ 2.) It purchases aftermarket auto glass products from manufacturers and resells those products to consumers in the New York Metropolitan Area. (Id. )

Defendants Mygrant and Interstate (collectively, the "Wholesaler Defendants") are also aftermarket auto glass wholesalers that operate in the New York Metropolitan area. (Id. ¶¶ 22-23.) Mygrant is the largest independent aftermarket auto glass wholesaler in the United States; it owns and operates approximately 70 warehouses nationwide. (Id. ¶ 22.) According to Plaintiffs, Mygrant is "one of the only national wholesalers of aftermarket auto glass products" with sales totaling hundreds of millions of dollars per year. (Id. ¶¶ 22, 100.)

Defendants Xinyi, Vitro, Fuyao, and ATI are manufacturers of aftermarket auto glass products. (Id. ¶¶ 24-27.) Defendant Sika is a manufacturer of products containing urethane, a chemical adhesive used in the installation of some aftermarket auto glass products. (Id. ¶ 30.) Xinyi, Vitro, Fuyao, and ATI and Sika (collectively, the "Manufacturer Defendants") sell their products to wholesalers like Plaintiffs and the Wholesaler Defendants. (Id. ¶ 31.)

2. The Alleged Conspiracy

Plaintiffs allege that OEMGN differentiates itself from its competitors by offering lower prices and that this "presents a disruptive threat to entrenched wholesalers" like the Wholesaler Defendants. (Id. ¶ 2.) According to Plaintiffs, the Wholesaler Defendants responded to this threat by refusing to purchase from manufacturers that deal with OEMGN and by pressuring manufacturers and other wholesalers to boycott OEMGN. (Id. ¶¶ 3, 5.)

OEMGN first learned of the alleged conspiracy in January 2014 from a sales representative at Carlite, a non-party auto glass manufacturer. (Id. ¶¶ 36, 38.) At that time, the Carlite employee informed OEMGN that the Wholesaler Defendants were applying "significant pressure" to Carlite to stop selling glass to OEMGN. (Id. ¶ 38.) In order to avoid being "punish[ed]" by the Wholesaler Defendants, the Carlite employee demanded that OEMGN provide a list of its suppliers to relay to Mygrant. (Id. ¶ 38.) A different Carlite employee subsequently told OEMGN that Mygrant wanted to ensure that there "would be one less guy in town," and that Mygrant intended to "get competitors out of the area." (Id. ¶ 39.) Mygrant had allegedly indicated, however, that Interstate was an "acceptable competitor." (Id. ) OEMGN thought it "had no choice but to comply with Carlite's demand" and "reluctantly" shared its list of suppliers with Carlite. (Id. ¶ 40.) The Carlite representative said he would share the list with Mygrant because he had to "defend [himself] with two major customers that have concerns." (Id. )

Plaintiffs allege that each of the Manufacturer Defendants, along with at least two additional non-parties, participated in the conspiracy orchestrated by the Wholesaler Defendants to boycott OEMGN.

a. Vitro

OEMGN began regularly purchasing aftermarket auto glass products from Vitro in approximately January 2014. (Id. ¶ 43.) Shortly after the relationship began, OEMGN placed an order with Vitro that never arrived. (Id. ) A few months later, in or around July 2014, an employee of a non-party manufacturer allegedly informed OEMGN that "there was a Vitro delivery that was supposed to come [to OEMGN] and went to Mygrant." (Id. )

On June 18, 2014, a sales representative from Carlite recounted a conversation he had with Interstate's owner, Angelo Marino, during which Mr. Marino allegedly admitted that the Wholesaler Defendants pressured Vitro to halt its sales to OEMGN. (Id. ¶ 44.) Mr. Marino allegedly said that "[OEMGN] is not going to make it" because Mygrant had been "pretty successful in making sure no one sells [to OEMGN]." (Id. ) On October 20, 2014, Vitro's General Manager allegedly informed OEMGN that both Wholesaler Defendants had pressured Vitro to stop its sales to OEMGN. (Id. ¶ 45.) Vitro subsequently reduced its sales to OEMGN, before completely cutting off sales to OEMGN sometime in 2015. (Id. ¶¶ 45-46.)

Near the end of 2015, Vitro's General Manager informed OEMGN that Vitro would not be selling to OEMGN to avoid putting its Mygrant account "at risk." (Id. ¶ 47.) He said that multiple wholesalers complained about Vitro selling to OEMGN, but that "the one that concerned [him] the most [wa]s Mygrant." (Id. ¶ 47.) In January 2016, the same manager stated that a high-level employee at Mygrant told him not to sell to OEMGN. (Id. ¶ 48.) He also confirmed that Vitro was "selling a lot of product" to Mygrant. (Id. )

b. ATI

Plaintiffs allege that OEMGN has unsuccessfully attempted to purchase ATI aftermarket auto glass products on several occasions. (Id. ¶ 50.) Specifically, the Amended Complaint alleges that "[i]n or around December 2013, in concert with Mygrant and Interstate, ATI agreed to boycott all sales of its aftermarket auto glass products to OEMGN." (Id. ¶ 51.) ATI has not sold to OEMGN since that time, despite repeated inquiries, and has allegedly "taken measures to preclude OEMGN from purchasing ATI-manufactured glass through alternate channels." (Id. )

OEMGN allegedly heard of ATI's decision to boycott OEMGN during a call with a Carlite sales representative on December 17, 2013. (Id. ¶ 52.) The representative informed OEMGN that he had recently spoken with Matthew Fassler, co-owner of ATI, who had expressed concern about losing a "bazillion dollars' worth of [Mygrant's] business" if ATI did not boycott OEMGN. (Id. ) Mr. Fassler also allegedly said that selling to OEMGN may not be "worth the risk ... of losing[ ] Mygrant's business." (Id. )

OEMGN attempted to buy ATI-manufactured glass products from another wholesaler, non-party Auto Glass Outlet ("AGO"). (Id. ¶ 53.) AGO initially agreed; in January 2014, however, AGO informed OEMGN that it would not complete the sale because Douglas Fassler, the other co-owner of ATI, told AGO it would not sell to it if products were passed on to OEMGN. (Id. ¶ 54.) Mr. Fassler further told AGO that "Mygrant was on [its] back not to give glass to anybody who support[s] OEMGN" and that, if it AGO sold ATI products to OEMGN, ATI would be "in big trouble with Mygrant." (Id. ¶ 54.) Similarly, OEMGN sought to purchase ATI glass through non-party C-Auto Glass, Inc. ("C-Auto"), another non-party wholesaler. (Id. ¶ 55.) In a January 29, 2014 email, however,...