IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

Judge William J. Martínez

Civil Action No. 11-cv-02435-WJM

NATIONAL ASSOCIATION OF INVESTORS CORPORATION, a Michigan non-profit

corporation

Plaintiff

v.

BIVIO, Inc., a Delaware corporation

BIVIO SOFTWARE ARTISANS, Inc., a Colorado corporation,

ROBERT NAGLER, an individual

Defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ 

MOTION TO DISMISS AND GRANTING PLAINTIFF’S REQUEST 

FOR LEAVE TO FILE AN AMENDED COMPLAINT

Plaintiff National Association of Investors Corporation (“Plaintiff”) brings this

action against Defendants Bivio, Inc, Bivio Software Artisans, Inc., and Robert Nagler

(collectively “Defendants”) alleging various state law contract claims as well as two antitrust claims under the Sherman Act, 15 U.S.C. § 1 et seq. (Compl. (ECF No. 1) at 5-9.) 

Before the Court is Defendants’ Motion to Dismiss (“Motion”). (ECF No. 6.) For the

reasons set forth below, the Motion is granted in part and Plaintiff’s request for leave to

file an amended complaint is granted. 

I. LEGAL STANDARD

Defendants move to dismiss this action pursuant to Federal Rule of Civil

Procedure 12(b)(1), (3), (6), and (7). However, the Court’s ruling in this Order examines

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only Defendants’ arguments with respect to whether Plaintiff has stated a claim upon

which relief could be granted, as required by Rule 12(b)(6). Therefore, the only relevant

legal standard is that for a Rule 12(b)(6) motion. 

The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test “the

sufficiency of the allegations within the four corners of the complaint after taking those

allegations as true.” Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir. 1994). To

survive a Rule 12(b)(6) motion, "[t]he complaint must plead sufficient facts, taken as

true, to provide ‘plausible grounds’ that discovery will reveal evidence to support the

plaintiff’s allegations.” Shero v. City of Grove, Okla., 510 F.3d 1196, 1200 (10th

Cir.2007) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1974, 167

L.Ed.2d 929 (2007)). “The court's function on a Rule 12(b)(6) motion is not to weigh

potential evidence that the parties might present at trial, but to assess whether the

plaintiff’s complaint alone is legally sufficient to state a claim for which relief may be

granted.” Sutton v. Utah State Sch. for the Deaf & Blind, 173 F.3d 1226, 1236 (10th

Cir.1999) (citation omitted).

II. FACTUAL BACKGROUND

The relevant facts, as pled in Plaintiff’s Complaint, are as follows:

In March 2010, Plaintiff brought suit against Defendants in this Court for breach

of contract alleging that Bivio breached a 2006 Strategic Alliance Agreement (the

“Original Action”). (Compl. ¶ 11.) On August 2, 2011, the parties attended a settlement

conference with U.S. Magistrate Judge Michael E. Hegarty. (Id. ¶ 13.) At the

settlement conference, the parties agreed to resolve their dispute and signed a

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“Material Terms of Settlement Agreement” contract (“MTSA”). (Id.) Paragraph 7 of the

MTSA stated: “The parties agree to a mutual nondisparagement clause.” (Compl. Ex.

A.) Paragraph 8 of the MTSA provided that the parties shall cooperate in the

preparation of a formal settlement agreement. (Compl. ¶ 15.) The Original Action was

dismissed based on this settlement. (Id. ¶ 23.) 

After the settlement conference, the parties attempted to negotiate the terms of

the formal settlement agreement. After exchanging drafts, the parties agreed on all

terms except the text of the non-disparagement clause. (Id. ¶ 17.) The failure to agree

on a non-disparagement clause has prevented execution of the formal agreement. (Id.

¶ 21.) 

On these facts, Plaintiff brings the following claims: (1) breach of contract; (2)

declaratory relief; (3) intentional interference with contract; (4) attempted

monopolization in violation of Section 2 of the Sherman Act; and (5) conspiracy to

restrain trade in violation of Section 1 of the Sherman Act. (Compl. pp. 5-9.) Plaintiff

seeks damages in the amount of $160,000 (the amount Defendant was to pay pursuant

to the terms of the MTSA), a declaration that Defendants’ obligations under the MTSA

are binding, punitive damages against Defendant Nagler, and costs and fees. (Id. at 9.)

Shortly before this action was filed, Defendants filed a declaratory judgment

action in Boulder County District Court against Plaintiff and ICLUB, a wholly-owned

subsidiary of Plaintiff who was a party to the Original Action. (ECF No. 6-1.) The

Boulder County action seeks a declaratory judgment regarding the parties’ obligations

under the MTSA. (Id. at 2.) 

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III. ANALYSIS

Defendants raise the following arguments in the Motion: (1) Plaintiff’s Complaint

fails to state a claim for Sherman Act violations; (2) Plaintiff’s Complaint fails to

establish that its claims meet the $75,000 minimum for federal diversity jurisdiction; (3)

Plaintiff’s Complaint fails to name an indispensible party, ICLUB, whose participation

would destroy diversity jurisdiction; and (4) the Court should abstain from exercising its

jurisdiction over this matter pursuant to Colorado River Water Conservation Dist. v.

United States, 424 U.S. 800, 817-18 (1976). 

A. Sherman Act Claims

Plaintiff’s Complaint brings two anti-trust claims under the Sherman Act: (1)

Count IV—Attempted Monopolization in violation of Section 2; and (2) Count

V—Conspiracy to Restrain Trade in violation of Section 1. (Compl. at 7-8.) The Court

will address each of these claims in turn below.

1. Attempted Monopolization

Plaintiff alleges that Defendants violated Section 2 of the Sherman Act by

attempting to force Plaintiff to enter into a settlement agreement that contained an anticompetitive non-disparagement clause. (Compl. ¶¶ 42-46.) 

Section 2 of the Sherman Act prohibits monopolization or attempted

monopolization of any part of interstate trade or commerce. 15 U.S.C. § 2. In this

circuit, a plaintiff bringing an attempted monopolization claim must allege the following: 

(1) that the defendant has engaged in predatory or anti-competitive conduct; (2) with a

specific intent to monopolize; and (3) a “dangerous probability” of achieving monopoly

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power. Christy Sports LLC v. Deer Valley Resort Co., 555 F.3d 1188, 1992 (10th Cir.

2009). The third element requires consideration of “the relevant market and the

defendant's ability to lessen or destroy competition in that market.” Id. 

Plaintiff’s allegations of anti-competitive conduct appear in paragraphs 18 and 19

of the Complaint: 

18. NAIC takes the position that any nondisparagement clause in the definitive agreement must have

an element of falsity — because in the absence of such a

falsity element, NAIC could not carry out its mandate. In

one example of Bivio’s refusal to cooperate, Bivio refused to

consider NAIC’s concerns that any disparagement clause

had to allow NAIC to make truthful comments to its

members — especially if Bivio did something to jeopardize

its members. On August 30, 2011, NAIC made the

underlined comments below on the non-disparagement

section:

Non-Disparagement. No Party, nor its

officers, directors, employees, agents or

affiliates, shall at any time directly or indirectly,

orally, in writing or through any other medium,

make any statements, assertions or allegations

concerning any other Party or its products

which are disparaging and false. This

paragraph was is not intended to restrict

honest and fair competition between bivio and

ICLUB. [Note — we need some qualified here

— because otherwise the provision is a S. 1

violation of the Sherman Act. Restrictions

against comparative advertising are per se

illegal where the parties have market power. 

Also, what happens if bivio (or NAIC) steals

money from customers or does something else

egregious?]

19. Another example of Bivio’s breach of paragraph

8 of the MTSA, is the fact that Bivio insisted on a per se

illegal prohibition of truthful advertising between ICLUB and

Bivio — even though together these entities have in excess

of 80% of the Relevant Market. NAIC and ICLUB take the

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position that making truthful statements about a competitor’s

products, even if negative, is a required element of

competition — and that any prohibition on such truthful

statements violated the Sherman Act. 

(Compl. at 4-5.) 

The Court finds it difficult to determine whether these allegations state a Section

2 claim because these two paragraphs are confusing and contradictory. Plaintiff

alleges that Defendants demanded a per se illegal non-disparagement clause because

Defendants wanted to prohibit truthful advertising. (Compl. ¶ 19.) However, the only

example of language proposed by Defendants—the non-underlined section of the

second paragraph in ¶ 18—appears to allow truthful advertising. In this section,

Defendants proposed that the parties agree not to make any “statements, assertions, or

allegations” against the other party that are both “disparaging and false.” (Compl. ¶ 18.) 

Defendants also proposed that the non-disparagement clause was “not intended to

restrict honest and fair competition.” (Id.) Defendants’ proposed language would not

prohibit truthful advertising, even if it is disparaging. 

Thus, the Court finds that Plaintiff has failed to plead sufficient facts showing that

Defendants engaged in anti-competitive conduct by demanding that Plaintiff enter into

an agreement that contained a non-disparagement clause that would prohibit truthful

comparative advertising. To the extent Plaintiff is alleging that the proposed language

quoted in ¶ 18 is anti-competitive, Plaintiff has failed to cite authority showing that an

agreement not to make false statements about a competitor would violate the Sherman

Act. 

Because Plaintiff’s Complaint fails to allege that Defendants engaged in antiCase 1:11-cv-02435-WJM-BNB Document 37 Filed 05/15/12 USDC Colorado Page 6 of 9
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competitive conduct, the Court finds that the Complaint fails to state a claim for violation

of Section 2 of the Sherman Act. In its Opposition to the Motion to Dismiss, Plaintiff

requests that it be granted leave to amend if the Court decides to grant the Motion with

respect to Plaintiff’s Sherman Act claims. (ECF No. 7 at 4.) The Tenth Circuit has held

that the Court “may dismiss without granting leave to amend when it would be futile to

allow the plaintiff an opportunity to amend his complaint.” Brereton v. Bountiful City

Corp., 434 F.3d 1213, 1219 (10th Cir. 2006). Because the Court cannot say that

permitting the filing of an amended complaint would be futile in this case, Plaintiff’s

request to amend its Complaint is granted with respect to its Section 2 claim. 

2. Conspiracy to Restrain Trade

Plaintiff alleges that Defendants violated Section 1 of the Sherman Act by

attempting to form a conspiracy to restrain trade through Defendants’ alleged insistence

on a “per se unlawful agreement to limit competition.” (Compl. ¶¶ 47-51.) Section 1 of

the Sherman Act provides as follows:

Every contract, combination in the form of trust or otherwise,

or conspiracy, in restraint of trade or commerce among the

several States or with foreign nations, is declared to be

illegal.

15 U.S.C. § 1. 

Defendant moves to dismiss this claim and argues that Plaintiff has failed to

allege a contract, combination or conspiracy sufficient to state a claim for a Section 1

violation. (ECF No. 6 at 3.) An essential element of any Section 1 claim is a showing of

concerted action. Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 767-

68 (1984). That is, Section 1 applies only to agreements between two or more

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businesses or persons; it does not cover unilateral conduct. Fisher v. City of Berkeley,

475 U.S. 260, 266 (1986) (“Even where a single firm’s restraints directly affect prices

and have the same economic effect as concerted action might have, there can be no

liability under § 1 in the absence of agreement.”); See also Monsanto Co. V. SprayRite Serv. Corp., 465 U.S. 752, 761 (1984) (noting that it is fundamental that a plaintiff

establish an agreement between two or more persons to restrain trade; unilateral

conduct is not prohibited by § 1); Gregory v. Fort Bridger Rendezvous Ass’n, 448 F.3d

1195, 1200 (10th Cir. 2006) (“Section 1 has been interpreted as prohibiting only

concerted, multilateral action.”). 

Plaintiff’s Complaint alleges that Defendants’ insistence on a non-disparagement

clause that would prohibit truthful marketing was “an attempted conspiracy to restrain

trade—in violation of Section 1 of the Sherman Act.” (Compl. ¶ 50.) However, Plaintiff

fails to cite—and the Court has been unable to locate—any authority showing that there

is a cause of action for attempted conspiracy. Rather, the fact that Plaintiff alleges that

the conspiracy was only attempted implicitly if not expressly shows that there was no

actual concerted action. Accordingly, the Court finds that Plaintiff’s Complaint fails to

state a claim for a Section 1 violation. As with the Section 2 claim, the Court cannot

say that it would be futile to allow amendment and, therefore, Plaintiff is granted leave

to amend her Section 1 claim. 

B. All Remaining Arguments

Plaintiff alleges that the Court has jurisdiction over this matter under both the

federal question doctrine, 28 U.S.C. § 1331, as well as based on complete diversity

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between the parties pursuant to 28 U.S.C. § 1332. The only federal claims in this

action are Plaintiff’s Sherman Act claims, which are discussed above, and which the

Court has granted Plaintiff leave to amend. The remainder of the arguments raised in

Defendants’ Motion assume that the Sherman Act claims have been dismissed by the

Court. If Plaintiff’s amended complaint states a Sherman Act claim under either

Section 1 or Section 2, Defendants’ remaining arguments are likely moot. Therefore,

the Court declines to address these issues until it can determine fully and finally

whether Plaintiff can state a claim under the Sherman Act. Accordingly, all remaining

arguments in Defendants’ Motion to Dismiss are denied without prejudice to

Defendants re-asserting these arguments in any subsequent motion. 

IV. CONCLUSION

For the reasons set forth above, Defendants’ Motion to Dismiss is GRANTED in

part and DENIED in part. Plaintiff’s Sherman Act claims—Counts IV and V—are

DISMISSED without prejudice. Plaintiff is GRANTED leave to file an amended

complaint consistent with this Order not later than May 29, 2012. 

Dated this 15 day of May, 2012. th

BY THE COURT:

 

William J. Martínez 

United States District Judge

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