FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JAMES DEHOOG; BRIAN BOUTELLER;

SHONNA BOUTELLER; CARLY 

BOWEN; TOM BUTTERBAUGH; ERICA 

I. CORONA; MARIA G. CORONA;

CHRIS DENNETT; JOHN DESBIENS;

MATTHEW JOHNSON; CYNTHIA A.

KREITZBERG; EDWARD LAWRENCE;

JERUSHA MALAER; ROBERT 

MALAER; MICHAEL MARTIN;

MICHAEL MCATEE; DAVID 

MILLIGAN; JEFF REEDER; RALPH 

REEDER; WADE SCAGLIONE; BETH H.

SILVERS; BRADLEY O. SILVERS;

PATRICE WADE,

Plaintiffs-Appellants,

v.

ANHEUSER-BUSCH INBEV SA/NV;

SABMILLER, PLC,

Defendants-Appellees.

No. 16-35912

D.C. No.

1:15-cv-02250-

CL

OPINION

Appeal from the United States District Court

for the District of Oregon

Ann L. Aiken, District Judge, Presiding

Argued and Submitted May 15, 2018

Portland, Oregon

Case 1:15-cv-02250-CL Document 119-1 Filed 09/26/18 Page 1 of 14
2 DEHOOG V. ANHEUSER-BUSCH

Filed August 8, 2018

Before: M. Margaret McKeown and Richard A. Paez, 

Circuit Judges, and Cynthia A. Bashant,* District Judge.

Opinion by Judge McKeown

SUMMARY**

Antitrust

The panel affirmed the dismissal of an action brought 

under § 7 of the Clayton Act by consumers and purchasers 

of beer, seeking to enjoin Anheuser-Busch InBev, SA/NV, 

from acquiring SABMiller, plc.

As a condition of approving the transaction, the U.S. 

Department of Justice required SABMiller to divest entirely 

its domestic beer business. Because the divestiture left 

SABMiller without a presence in the U.S. beer market, the 

consumers did not and could not plausibly allege that ABI’s 

acquisition of SABMiller would substantially lessen 

competition in that market. The panel held that the 

consumers therefore failed to state a claim under the Clayton 

Act.

* The Honorable Cynthia A. Bashant, United States District Judge 

for the Southern District of California, sitting by designation.

** This summary constitutes no part of the opinion of the court. It 

has been prepared by court staff for the convenience of the reader.

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DEHOOG V. ANHEUSER-BUSCH 3

COUNSEL

Joseph M. Alioto (argued) and Jamie L. Miller, Alioto Law 

Firm, San Francisco, California; Rachele R. Selvig and

Christopher L. Cauble, Cauble and Cauble LLP, Grants Pass, 

Oregon; Gil D. Messina, Messina Law Firm P.C., Holmdel, 

New Jersey; Jeffery K. Perkins, Law Offices of Jeffery K. 

Perkins, Tiburon, California; for Plaintiffs-Appellants.

Yonatan Even (argued), Cravath Swaine & Moore LLP,

New York, New York, for Defendants-Appellees.

OPINION

McKEOWN, Circuit Judge:

This case features a bevy of beer aficionados trying to 

undo the acquisition of one brewing behemoth by another. 

James DeHoog and other consumers and purchasers of beer 

(“Consumers”) appeal the district court’s dismissal of their 

private antitrust action to enjoin Anheuser-Busch InBev, 

SA/NV (“ABI”) from acquiring SABMiller, plc (“SAB”). 

Although the merger closed in October 2016 with the 

blessing of antitrust authorities, Consumers’ private suit 

persists.

Like the district court, we conclude that Consumers 

failed to state a claim under Section 7 of the Clayton Act, 

15 U.S.C. § 18. As a condition of approving the transaction, 

the U.S. Department of Justice (“DOJ”) required SAB to 

divest entirely its domestic beer business. Because the 

divestiture left SAB without a presence in the U.S. beer 

market, Consumers did not and could not plausibly allege 

Case 1:15-cv-02250-CL Document 119-1 Filed 09/26/18 Page 3 of 14
4 DEHOOG V. ANHEUSER-BUSCH

that ABI’s acquisition of SAB would substantially lessen 

competition in that market.

BACKGROUND

ABI, whose brands include Budweiser, Stella Artois, and 

Michelob Ultra, is the largest producer and seller of beer in 

the United States, comprising roughly 46 percent of the U.S. 

market share. At the time of this suit, SAB was a 

multinational brewing company that operated in the United 

States exclusively through a joint venture with Molson 

Coors Brewing Company (“Molson”).1 The SAB/Molson 

joint venture, MillerCoors, LLC (“MillerCoors”), was the 

second-largest producer and seller of beer in the United 

States, controlling roughly 25 percent of the U.S. market 

share.2

In November 2015, ABI and SAB announced the terms 

of a $107 billion acquisition of SAB by ABI. As part of the 

transaction, ABI also announced a contingent agreement 

with Molson: upon completion of ABI’s acquisition of SAB, 

SAB would completely divest its interest in MillerCoors. 

Per the terms of the agreement, Molson would acquire

SAB’s 50 percent voting interest and 58 percent economic 

interest in MillerCoors, making MillerCoors a whollyowned subsidiary of Molson. Molson would maintain full 

control of the business operations and resulting economic 

benefits of MillerCoors. In short, ABI would acquire SAB 

1 Molson, the world’s third largest brewer, is not a defendant.

2 SAB and Molson each held 50 percent of the governance rights in 

MillerCoors. The DOJ approved the MillerCoors joint venture in 2008. 

MillerCoors brands include Miller Lite, Coors Light, Blue Moon, and 

Zima.

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DEHOOG V. ANHEUSER-BUSCH 5

but not before spinning off SAB’s ownership in MillerCoors 

(i.e., SAB’s U.S. interests) to Molson.

After reviewing the proposed transaction for its effect on 

competition, on July 20, 2016, the DOJ reached a settlement 

with ABI to allow the acquisition to move forward. ABI was 

required to divest SAB’s entire U.S. business—including 

SAB’s ownership in MillerCoors—such that the settlement 

would “prevent any increase in the concentration in the U.S. 

beer industry.” The settlement also prohibited ABI from 

acquiring beer distributors or brewers without allowing for 

DOJ review of the acquisition’s likely competitive effects 

and prevented ABI from engaging in certain anticompetitive practices. According to the DOJ, the settlement 

would “help preserve and promote competition” in the U.S. 

beer industry.

That same day, the DOJ Antitrust Division filed a civil 

lawsuit against ABI in the U.S. District Court for the District 

of Columbia to block the transaction, on the ground that the 

acquisition violated Section 7 of the Clayton Act, along with 

the proposed settlement, which—if approved by the court—

“would resolve the competitive harm alleged in the 

lawsuit.”3 The filings complied with the requirements of the 

Antitrust Procedures and Penalties Act (“the Tunney Act”), 

a part of the federal government’s review of certain mergers 

and acquisitions. 15 U.S.C. § 16. Pursuant to the Tunney 

Act, the DOJ published the terms of the settlement and a 

competitive impact statement in the Federal Register and 

gave the public 60 days to submit comments. Id. § 16(d).

3 See United States v. Anheuser-Busch InBev SA/NV, No. 1:16-cv01483 (D.D.C.).

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6 DEHOOG V. ANHEUSER-BUSCH

After consideration of the public comments, the DOJ and 

several international competition authorities cleared the 

transaction, which closed on October 10, 2016. Molson then 

promptly announced that it had completed its acquisition of 

SAB’s interest in MillerCoors. At the time of this opinion, 

one Tunney Act procedure remains outstanding: the U.S. 

District Court for the District of Columbia must determine 

whether entry of the settlement “is in the public interest.” Id. 

§ 16(e). In making that determination, the court may “take 

such other action in the public interest as the court may deem 

appropriate.” Id. § 16(f).

Parallel to the government’s antitrust enforcement 

efforts, on December 1, 2015, Consumers filed a private 

antitrust action against ABI and SAB in the District of 

Oregon, seeking to enjoin the acquisition.4 Consumers 

likewise alleged that the proposed acquisition violated 

Section 7 of the Clayton Act, “in that the effect of the 

proposed acquisition may be substantially to lessen 

competition, or to tend to create a monopoly in the 

production and sale of beer in the United States.” More 

specifically, Consumers alleged that the acquisition 

threatened to cause them “loss and damage in the forms of 

higher prices, fewer services, fewer competitive choices, 

diminished product quality and product diversity, [and] 

suppression and destruction of smaller competitors through 

exclusive distribution arrangements . . .” Consumers further 

claimed that the acquisition would “increase ABI’s buying 

power” globally. Although Molson was not a named 

defendant, Consumers made a corollary allegation regarding 

Molson’s acquisition of SAB’s interest in MillerCoors: 

“Given the resulting change in management and Molson’s 

4 Consumers are “twenty-three consumers and purchasers of beer in 

the United States” who reside in Oregon, California, and Washington.

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DEHOOG V. ANHEUSER-BUSCH 7

new increased size and scope in the United States market 

following the ABI-SAB acquisition, Molson’s management 

is likely to have incentives to change its practices to match 

ABI’s.”

The district court dismissed the complaint for failure to 

state a claim. The court found that Consumers failed to 

allege that the acquisition would increase ABI’s market 

power in the U.S. beer market; allegations regarding 

Molson’s future conduct in the ownership of MillerCoors 

were too speculative to state a claim for relief against ABI; 

and allegations concerning ABI’s buying power were too 

vague to state a plausible claim. In dismissing with 

prejudice, the court concluded that any amendment to the 

complaint would be futile because Consumers “cannot 

plausibly allege that the challenged transaction will increase 

either ABI’s market share or the concentration of firms in 

the U.S. beer market.” By securing the complete divestiture 

of MillerCoors, the DOJ had reached a settlement to prevent 

increased concentration in the U.S. beer industry.

ANALYSIS

This appeal centers on a longstanding antitrust law that 

empowers the public to sue to block allegedly 

anticompetitive mergers. Section 7 of the Clayton Act 

generally prohibits business acquisitions whose effect “may 

be substantially to lessen competition, or tend to create a 

monopoly” in a relevant market. 15 U.S.C. § 18. In 

addition, “[a]ny person” may “sue for and have injunctive 

relief . . . against threatened loss or damage by a violation 

of” Section 7, as long as the standard equitable principles for 

injunctive relief are met. Id. § 26.

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8 DEHOOG V. ANHEUSER-BUSCH

I. CONSUMERS FAILED TO STATE A CLAIM UNDER THE 

CLAYTON ACT

Our de novo review of a dismissal under Federal Rule of 

Civil Procedure 12(b)(6) is limited to the complaint, 

materials incorporated into the complaint by reference, and 

matters of which the court has taken judicial notice. See 

Metzler Inv. GMBH v. Corinthian Coll., Inc., 540 F.3d 1049, 

1061 (9th Cir. 2008).5 We benchmark Consumers’ claims 

against the now-familiar standard of Twombly and Iqbal: “a 

complaint must contain sufficient factual matter, accepted as 

true, to ‘state a claim to relief that is plausible on its face.’” 

Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell 

Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). 

Those factual allegations “must be enough to raise a right to 

relief above the speculative level.” Twombly, 550 U.S. at 

555.

Section 7 of the Clayton Act requires Consumers to “first 

establish a prima facie case that a merger is anticompetitive.” 

Saint Alphonsus Med. Ctr.-Nampa Inc. v. St. Luke’s Health 

Sys., Ltd., 778 F.3d 775, 783 (9th Cir. 2015). In practical 

terms, this means adequately alleging facts that an 

acquisition creates “an appreciable danger” or “a reasonable 

probability” of anticompetitive effects in the relevant 

market. Id. at 788; FTC v. Warner Commc’ns Inc., 742 F.2d 

1156, 1160 (9th Cir. 1984).6 Consumers’ allegations do not 

belly up to this bar.

5 Consumers’ motion to take judicial notice of government 

documents, court filings, press releases, and undisputed matters of public 

record concerning the ABI-SAB transaction (Dkt. No. 17) is granted.

6 The parties agree that the relevant product market is the production 

and sale of beer, and the relevant geographic market is the United States.

Case 1:15-cv-02250-CL Document 119-1 Filed 09/26/18 Page 8 of 14
DEHOOG V. ANHEUSER-BUSCH 9

A. BECAUSE OF THE DIVESTITURE, ABI DID NOT 

ACQUIRE AN ACTUAL COMPETITOR IN THE U.S.

BEER MARKET

Consumers’ frontline allegations are that the acquisition 

eliminated SAB as an “actual . . . competitor in the United

States.” But as the district court correctly found, ABI’s 

acquisition of SAB did not create a reasonable probability of 

anticompetitive effects in the U.S. beer market because ABI 

did not acquire any business interests in the U.S. beer 

market. Pre-transaction, SAB operated in the United States 

exclusively through its joint venture MillerCoors. As a 

condition of closing the acquisition, SAB divested 

completely its interests in MillerCoors to Molson. By 

requiring full divestiture of SAB’s U.S. interests, the DOJ 

ensured that the acquisition will not create “any increase in 

the concentration in the U.S. beer industry.”

Faced with a similar ABI acquisition, we recently 

affirmed dismissal of a Section 7 suit for failure to state a 

claim, albeit in an unpublished disposition. See Edstrom v. 

Anheuser-Busch InBev SA/NV, 647 F. App’x 733 (9th Cir. 

2016), cert. denied, 137 S. Ct. 258 (2016).7 In that case, beer 

purchasers sought to enjoin ABI and Constellation Brands, 

Inc. (“Constellation”) from acquiring Grupo Modelo S.A.B. 

de C.V. (“Modelo”). Under the terms of that agreement, 

“ABI would purchase Modelo but grant Constellation an 

irrevocable, exclusive license to import Modelo brands into 

the United States.” Id. at 735. ABI retained no right to sell 

Modelo beer in the United States. Id. Because “the 

7 Although our decision in Edstrom is not precedential and we do 

not rely on it here, it is instructive as to the reality of a transaction where 

ABI acquired no interests in the U.S. market. See Ninth Circuit Rule 

36-3.

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10 DEHOOG V. ANHEUSER-BUSCH

challenged transaction d[id] not increase ABI’s market share 

or the concentration of the U.S. beer market,” we concluded 

that “Plaintiffs failed to plausibly allege a prima facie case 

that the challenged transaction is anticompetitive.” Id. So 

too, here. The challenged transaction did not increase ABI’s 

market share because ABI acquired no interests in the United 

States. The concentration of the U.S. beer market stayed 

precisely the same because MillerCoors remained in the 

market as a competitor (with SAB’s share transferred fully 

to Molson).

Since SAB did not compete in the market before the 

transaction except as MillerCoors, and MillerCoors still 

competes in the market, Clayton Act cases addressing the 

elimination of an actual competitor in a relevant market—

and a concomitant increase in market concentration—are 

inapposite.8 Consumers argue that these cases “establish the 

illegality of any nontrivial acquisition of a competitor, 

whether or not the acquisition was likely either to bring 

about or shore up collusive or oligopoly pricing” in a highly 

concentrated market like the U.S. beer market. See Hospital 

Corp of America v. FTC, 807 F.2d 1381, 1386 (7th Cir. 

1986). Yet with the exception of the potential competitor 

cases, discussed below, Consumers’ cited cases involve the 

removal of an actual competitor from the relevant market.

MillerCoors remains as a competitor in the market.

8 See, e.g., United States v. Pabst Brewing Co., 384 U.S. 546, 550

(1966) (merger of “two very large brewers competing against each other 

in 40 States”); United States v. Von’s Grocery Co., 384 U.S. 270, 277 

(1966) (merger of “two of the most successful and largest [grocery 

stores] in the area” to create the second largest grocery store in Los 

Angeles); United States v. Aluminum Co. of Am., 377 U.S. 271, 281 

(1964) (acquisition of “an aggressive competitor” in the same market).

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DEHOOG V. ANHEUSER-BUSCH 11

B. ABI DID NOT ACQUIRE A POTENTIAL 

COMPETITOR “POSITIONED AT THE EDGE OF THE 

MARKET, CONTINUALLY THREATENING TO 

ENTER”

Recognizing the reality that ABI did not acquire an 

actual competitor, Consumers claimed in summary fashion 

that the acquisition would eliminate SAB as a “potential

competitor.” (Emphasis added). The claim is doomed from 

the start because the potential competitor theory lacks factual 

allegations in the complaint. Indeed, by alleging that ABI 

and SAB were actual competitors, Consumers undermine 

their assertion that the brewers were potential competitors. 

Taking Consumers’ factual allegations as true, as we must at 

this stage, SAB was not a potential competitor with ABI. 

See In re Tracht Gut, LLC, 836 F.3d 1146, 1150 (9th Cir. 

2016) (we accept as true all factual allegations in the 

complaint, but “do[] not have to accept as true conclusory 

allegations in a complaint”). Instead, before the transaction 

and divestiture, SAB was an actual competitor through its 

joint venture MillerCoors.

Consumers’ effort on appeal to recast SAB as a 

“potential competitor . . . so positioned on the edge of the 

market that it exerted beneficial influence on competitive 

conditions in the market” fails. United States v. Falstaff 

Brewing Corp., 410 U.S. 526, 532–33 (1973). SAB was not 

poised on the edge of the market “continually threatening to 

enter.” United States v. Penn-Olin Chem. Co., 378 U.S. 158, 

173 (1964). Nor was SAB “eager[] to enter that market.” 

United States v. El Paso Nat. Gas Co., 376 U.S. 651, 660 

(1964). SAB had already entered the market, through the 

MillerCoors joint venture. SAB’s beneficial influence on 

competitive conditions in the market thus was through 

MillerCoors, an entity still competing in the market today.

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12 DEHOOG V. ANHEUSER-BUSCH

Consumers did not allege in their complaint that SAB 

was a potential competitor because of “the ever-looming 

threat of the possible end of the [SAB-Molson] joint venture 

[MillerCoors] and the resulting re-entry of the parents.” But 

such a claim also would be futile because allegations 

regarding the potential dissolution of MillerCoors and its 

competitive effects would be entirely speculative. See 

Twombly, 550 U.S. at 555.

C. ALLEGATIONS CONCERNING THE NEW 

MILLERCOORS’ DISTRIBUTION PRACTICES ARE 

TOO SPECULATIVE TO STATE A CLAIM

Consumers make one last speculative argument: Posttransaction, MillerCoors—now a wholly-owned subsidiary 

of Molson—will adopt the distribution practices of ABI. 

Consumers provide no support for that assertion.9 Merely 

stating that “it is likely that a 100 percent Molson Coorsowned MillerCoors will follow ABI’s lead in its dealings 

with distributors,” without more, is insufficient. See Iqbal,

556 U.S. at 678 (emphasizing that “labels and conclusions” 

are not enough to survive a motion to dismiss). This 

9 After briefing on the motion to dismiss, Consumers filed a 

supplemental declaration with an attached letter written by the American 

Antitrust Institute regarding potential post-merger coordination in the 

U.S. beer market. That letter was not incorporated into the complaint. 

Regardless, the letter was addressed to the DOJ Antitrust Division to 

encourage the agency to order pro-competitive remedies if it approved 

the merger, some of which the DOJ adopted in its settlement agreement 

with ABI. See Press Release, U.S. Dep’t of Justice, Justice Department 

Requires Anheuser-Busch InBev to Divest Stake in MillerCoors and 

Alter Beer Distributor Practices as Part of SABMiller Acquisition

(July 20, 2016), available at https://www.justice.gov/opa/pr/justicedepartment-requires-anheuser-busch-inbev-divest-stake-millercoorsand-alter-beer.

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DEHOOG V. ANHEUSER-BUSCH 13

allegation is a classic speculative conclusion. General 

allegations regarding past acquisitions in the market, which 

prompted distinct DOJ remedies, do not alter the equation. 

The bottom line is that the complaint offers only speculation 

as to how a MillerCoors operated solely by Molson, as 

opposed to by Molson and SAB, will do business.10 Such 

speculation “stops short of the line between possibility and 

plausibility of entitlement to relief.” Twombly, 550 U.S. at 

557 (alteration and internal quotation marks omitted).11

In view of our conclusion that Consumers do not have a 

viable Clayton Act claim, we need not reach Consumers’ 

claim for injunctive relief.

II. THE DISTRICT COURT DID NOT ABUSE ITS 

DISCRETION IN DISMISSING THE COMPLAINT WITH 

PREJUDICE

The only remaining question is whether Consumers’ 

complaint could be “saved by amendment.” Kendall v. Visa 

U.S.A., Inc., 518 F.3d 1042, 1051 (9th Cir. 2008). 

Ultimately, the district court did not abuse its discretion in 

concluding that Consumers could not plead around the 

elephant in the room. See Missouri ex rel. Koster v. Harris,

847 F.3d 646, 655–56 (9th Cir. 2017). Since SAB divested 

its interests in the U.S. beer market, the transaction could not 

increase ABI’s market share or the concentration of that 

market. As the district court aptly observed, the DOJ 

10 Molson is not a defendant in this action. But if Molson conducts 

its MillerCoors business in the U.S. beer market in violation of the 

antitrust laws, it does so at the risk of private and public antitrust 

enforcement suits.

11 Consumers do not appeal the district court’s decision that 

allegations about ABI’s buying power are too speculative.

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14 DEHOOG V. ANHEUSER-BUSCH

reached a settlement to “prevent increased concentration” in 

the market. While Consumers contend that the settlement 

only partially remedies their alleged injuries, they curiously 

did not submit public comments opposing the settlement, as 

they were entitled to do. See 15 U.S.C. § 16(d).

Consumers’ new arguments on appeal underscore that 

any amendment to their complaint would be futile. 

Consumers argue that they would add factual allegations 

regarding SAB’s role in the relevant market managing 

MillerCoors as a joint venture, or (perhaps contradicting 

themselves), on the “edge of the market.” Given the legal 

deficiencies in applying the “actual competitor” and 

“potential competitor” theories to the present facts, further

allegations would not salvage the complaint.

Consumers also assert that they would add allegations 

regarding the closing of a MillerCoors brewery in Eden, 

North Carolina in September 2015. According to 

Consumers, the shuttered brewery once brewed on a contract 

basis for competitor Pabst and its closure “increased market 

concentration to presumptively illegal levels.” However, 

Consumers do not explain why a brewery closed by 

MillerCoors months before ABI announced its proposed 

acquisition of SAB has anything to do with the merger, as 

opposed to being merely the product of MillerCoors’ 

independent business judgment. The weakness of these 

proposed amendments underscores that the district court was 

within its discretion to dismiss the complaint with prejudice.

AFFIRMED.

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