Source: http://docs.justia.com/cases/federal/district-courts/north-carolina/ncwdce/3:2008cv00578/54522/52/
Timestamp: 2014-10-22 12:14:09
Document Index: 195351470

Matched Legal Cases: ['§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 6', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1', '§ 1']

ORDER denying 36 Motion to Dismiss Plaintiff's First Amended Complaint; denying 36 Motion to Strike for Milliken & Company v. CNA Holdings, Inc. et al :: Justia Dockets & Filings Justia.com
> Milliken & Company v. CNA Holdings, Inc. et al
Milliken & Company v. CNA Holdings, Inc. et al
ORDER denying 36 Motion to Dismiss Plaintiff's First Amended Complaint; denying 36 Motion to Strike. Signed by District Judge Richard Voorhees on 8/8/2011. (tmg)
3:08-CV-578
CNA HOLDINGS, INC. and CELANESE )
AMERICAS CORPORATION,
THIS MATTER is before the Court on Defendants’ Motion to Dismiss Plaintiff’s First
Amended Complaint and Strike Certain Allegations in Plaintiff’s Amended Complaint (Doc.
#36) filed May 12, 2009; Plaintiff’s Memorandum in Opposition to Defendants’ Motion to
Dismiss Plaintiff’s First Amended Complaint (Doc. #41) filed June 5, 2009; and Defendants’
Reply to Plaintiff’s Memorandum (Doc. #44) filed June 26, 2009. This matter is now ripe for
The following facts are taken from Plaintiff’s Complaint and are deemed to be true for
purposes of this motion. Randall v. United States, 30 F.3d 518, 522 (4th Cir. 1994). This action
alleges a conspiracy among manufacturers of polyester staple fiber (“PSF”), a raw material for
yarns and many textile products, to fix prices and allocate customers in the United States from
late 1994/early 1995 through January 2001. Am. Compl. ¶ 1; 28-29.
Plaintiff Milliken & Company (“Milliken”) is a company that manufactures various
textile products and purchases PSF directly from Defendants. Am. Compl. ¶ 7. Defendant CNA
Holdings, Inc., f/k/a Hoechst Celanese Corporation (“Hoechst Celanese”) sold PSF from its
facilities in North Carolina and South Carolina from before 1995 until 1998. Am. Compl. ¶ 8.
Defendant Celanese Americas Corporation, f/k/a Hoechst Corporation (“Hoechst Corporation”)
is a holding company that is the sole shareholder of Hoechst Celanese since 1987. Am. Compl. ¶
9. The other members of the alleged conspiracy–all leading suppliers of PSF in the United
States–are Wellman, Dupont/DAK, and Nan Ya. Am. Compl. ¶ 28.
In the mid-1990s, the price of PSF declined as a result of lessening demand and
increasing supply in the market. Am. Compl. ¶¶ 35-38. To combat the steady decrease in price,
Defendants along with the leading PSF suppliers in the United States–Wellman; DuPont/DAK;
and Nan Ya–entered into a conspiracy to fix prices and allocate customers. Am. Compl. ¶ 28.
The conspiracy continued even after Defendants sold most, but not all, of their PSF business to
KoSa. Am. Compl. ¶ 48. Throughout the entire conspiracy period, these conspirators agreed to
allocate customers to prevent or limit price competition among themselves in the sale of PSF.
Am. Compl. ¶ 28. These conspirators also agreed during this time to coordinate price increases
in the market, including coordination of their price announcements in April 1995, June 1997,
October 1999, and January 2000. Am. Compl. ¶¶28; 39-42; 46. Thus, Plaintiff alleges a
conspiracy that took place between “late 1994 or early 1995 and continued until approximately
January 2001.” Am. Compl. ¶ 2.
Defendants and their co-conspirators allegedly carried out their conspiracy through direct
conversations with each other. One such conversation took place in the fall of 1994 or early 1995
during a trip to a hunting club in Georgia that was organized by a PSF broker. Am. Compl. ¶ 45.
During the trip, Troy Stanley, an employee of Defendants reached an agreement with David
Whitley, an employee of Wellman. Am. Compl. ¶ 45. The gravamen of the agreement was that
Defendants would not undercut Wellman’s price quote for PSF to Milliken and that Defendants
would not increase the volume of their PSF sales to Milliken. Am. Compl. ¶ 45. Stanley
allegedly had a similar conversation with Brad Dutton of Nan Ya concerning the pricing of PSF
for Johnson & Johnson and the way in which this pricing might impact prices for Milliken. Am.
Compl. ¶ 48. In support of its conspiracy claim, Plaintiff names specific employees of
Defendants involved in the conspiracy–Troy Stanley, Tom Nixon, and Grover Smith. Am.
Compl. ¶ 14. Plaintiff also names employees of the other entities involved in the alleged
conspiracy: David Whitley, an employee of Wellman; two employees of DAK–Jim Netzel and
Sonny Walker; and two employees of Nan Ya–Brad Dutton and David Lin. Am. Compl. ¶¶ 44,
48. These conspirators also used PSF brokers, such as David Poole, for the purpose of
facilitating their conspiracy, relying on such brokers as conduits to share information in
furtherance of the conspiracy. Am. Compl. ¶ 45.
In sum, Plaintiff’s Complaint identifies the following information about the alleged
conspiracy: (1) the parties involved in the conspiracy, (2) the names of several employees of
each of the conspirators who participated in the conspiracy, (3) the product involved in the
conspiracy, (4) the geographic market impacted by the conspiracy, (5) the approximate time
period of the conspiracy, (6) the specific ways that the Defendants and their partners-in-crime
implemented their conspiracy, and (7) the victims of the conspiracy. Additionally, Plaintiff’s
Complaint describes with some detail one of the meetings between the conspirators.
Rule 8(a)(2) of the Federal Rules of Civil Procedure requires a complaint to contain a
“short and plain statement of the claim showing that the pleader is entitled to relief.” To satisfy
this requirement, a plaintiff must plead “enough facts to state a claim to relief that is plausible on
its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausbility
that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, ___ U.S. ___, 129 S.
Ct. 1937, 1949 (May 18, 2009). While mere labels and legal conclusions are insufficient to state
a claim, on a motion to dismiss the Court “must accept as true all well-pleaded allegations and
view the complaint in the light most favorable to [the plaintiff].” Hatfill v. New York Times Co.,
416 F.3d 320, 329 (4th Cir. 2005).
The Supreme Court explained in Twombly that “heightened fact pleading of specifics” is
not required to state an antitrust conspiracy claim. Twombly, 550 U.S. at 570. Indeed, “[a]sking
for plausible grounds to infer an agreement does not impose a probability requirement at the
pleading stage; it simply calls for enough fact to raise a reasonable expectation that discovery
will reveal evidence of illegal agreement” Id. at 556.1 See also In re Air Cargo Shipping Servs.
Antitrust Litig., No. MD 06-1775 (JG) (VVP), 2008 WL 5958061, *8 (E.D.N.Y. Sept. 26, 2008)
(holding that “plaintiffs are not required to plead every detail of every meeting or every
communication, secret or otherwise, that took place between the defendants, nor must they
allege in great detail each defendant’s role in the conspiracy”); In re OSB Antitrust Litig., No.
06-826, 2007 WL 2253419, *5 (E.D. Pa. Aug. 3, 2007) (“Twombly does not . . . require
Plaintiff’s to prove their allegations before taking discovery.”). Thus, to satisfy the standard
Two weeks after issuing Twombly, in Erickson v. Pardus, 551 U.S. 89 (2007), the
Supreme Court clarified that Twombly did not signal a switch to fact-pleading in the federal
courts. Rather, Erickson reaffirmed that under Rule 8 “[s]pecific facts are not necessary; the
statement need only ‘give the defendant fair notice of what the . . . claim is and the grounds upon
which it rests.’” 551 U.S. at 93 (quoting Twombly, 550 U.S. at 555, 127 S. Ct. 1955); see also
Airborne Beepers & Video, Inc. v. AT&T Mobility, LLC, 499 F.3d 663, 667-68 (7th Cir. 2007)
(“Taking Erickson and Twombly together, we understand the Court to be saying only that at
some point the factual detail in a complaint may be so sketchy that the complaint does not
provide the type of notice of the claim to which the defendant is entitled under Rule 8.”).
articulated in Twombly, a plaintiff need only “nudge [its] claims across the line from conceivable
to plausible.” Twombly, 550 U.S. at 570.
Plaintiff claims that Defendants have violated Section 1 of the Sherman Act, which
prohibits “any contract, combination in the form of trust or otherwise, or conspiracy, in restraint
of trade or commerce.” 15 U.S.C. § 1. Specifically, Plaintiffs contend that Defendants and other
manufacturers of PSF conspired to eliminate competition among themselves by allocating
customers and agreeing to fix, maintain, stabilize or raise prices of PSF in the United States.
As evidence of the unlawful conspiracy, Plaintiff’s Amended Complaint contains the
following allegations: identifies the parties involved in the conspiracy, identifies by name several
employees of each of the conspirators who participated in the conspiracy, identifies the product
involved in the conspiracy, identifies the geographic market impacted by the conspiracy,
identifies the approximate time period of the conspiracy, identifies the specific ways that the
Defendants and the other involved entities implemented their conspiracy, identifies the victims
of the conspiracy and describes with some detail one of the meetings between the coconspirators. Additionally, Plaintiff’s Complaint places the alleged conspiracy in context by: (1)
referencing Defendants’ involvement in In re Polyester Staple Antitrust Litigation, MDL No.
3:03-cv-1516, (“MDL 1516") a multi-district litigation previously before this Court; (2)
incorporating the opposition to Defendants Summary Judgment Motion in MDL 1516; (3)
describing fraud allegations in another suit against Defendants in connection with Hoechst’s
1998 sale of its PSF business to KoSa; (4) mentioning DuPont’s participation in the Department
of Justice Corporate Leniency program; and (5) referencing guilty pleas entered by parties to the
Defendants respond by arguing that Plaintiff’s Amended Complaint is devoid of the
requisite specific factual allegations for a four-party conspiracy between Celanese, Wellman, the
DAK Entities2 (“DuPont”) and the Nan Ya Entities3 (“Nan Ya”). Defendants maintain that the
Amended Complaint alleges in conclusory fashion that Celanese was part of a broad price-fixing
conspiracy but fails to identify the “who, did what, to who [sic] (or with whom), where and
when.” More specifically, Defendants argue that the Complaint is devoid of facts alleging that
Celanese and DuPont–or Celanese and Nan Ya–conspired to fix prices, rig bids or allocate
Defendants further argue that the allegedly illegal conduct is equally consistent with
lawful activity and that the contextual evidence outside the factual allegations of the Amended
Complaint is not sufficient, in and of itself, to suggest Defendants’ participation in any
conspiracy. Defendants maintain that the parallel conduct alleged is devoid of any “plus factors,”
i.e., facts that would distinguish independent conduct from anti-competitive measures.
Finally, Defendants take issue with the inclusion of allegations in the Amended
Complaint concerning the opposition brief submitted by non-class plaintiffs in MDL 1516.
Defendants contend that Plaintiff improperly draws speculative inferences from both the
opposition and the denial. Defendants maintain that those allegations should also be stricken,
“DAK Entities,” as defined by Milliken in its Amended Complaint, includes E.I.
DuPont de Nemours & Co., DAK Fibers, LLC, and DAK Americas, LLC. Am. Compl. at
¶15(a).
“Nan Ya Entities,” as defined by Milliken in its Amended Complaint, includes Nan Ya
Plastics Corporation, American and Nan Ya Plastics Corporation, America, South Carolina. Am.
Compl. at ¶ 16.
pursuant to Fed. R. Civ. P. 12(f) and the Protective Order4 in MDL 1516, because the non-class
plaintiffs’ opposition to Celanese’s motion for summary judgment is immaterial and contains
inadmissible hearsay. Defendants also maintain that the Court’s denial of Celanese’s motion for
summary judgment in the MDL is not relevant in this action, arguing that any reference in the
presence of the jury to Celanese’s motion for summary judgment, including the non-class
plaintiffs’ opposition or the Court’s ruling, would be unfairly prejudicial to Celanese and
confuse the issues in this action.
The Court will address each of Defendants’ contentions in turn.
A. Sufficiency of the Conspiracy Allegations
The Sherman Act, section 1, provides in part that, “[e]very 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. A careful review of
Twombly provides this Court with further instruction on exactly what a plaintiff must plead in
order to establish a plausible conspiracy claim. The Supreme Court, in Twombly, rejected a
complaint that attempted to plead an antitrust conspiracy in violation of the Sherman Act based
primarily on the defendant “Baby Bell” telephone companies’ parallel behavior, consisting of
steps to keep out competing start-up telephone competitors. Unlike Plaintiff in the instant case,
the Twombly plaintiffs did not plead any facts to support an actual agreement among the
defendants. “[T]he pleadings mentioned no specific time, place or person involved in the alleged
conspiracies . . . [and] proceed[ed] exclusively via allegations of parallel conduct.” Twombly,
550 U.S. at 565, nn. 10-11. Essentially, the plaintiffs’ complaint provided nothing more than
See Third Amended Protective Order dated September 9, 2008, in MDL 1516.
allegations of parallel conduct, which were equally consistent with lawful behavior. The Court
concluded that, despite the liberal notice pleading requirements of Fed. R. Civ. P. 8(a), this was
not enough to plead a Sherman Act violation. Indeed, the Court noted that “[n]othing contained
in the complaint suggests either the action or the inaction alleged with a plausible suggestion of
conspiracy” as required by Rule 8. Id. at 566. “Without more, parallel conduct does not suggest
conspiracy, and conclusory allegations of agreement at some unidentified point does not supply
facts adequate to show illegality.” Id. at 556-57. Despite the lack of factual allegations, the Court
acknowledged that the complaint came “close to stating a claim, but without some further factual
enhancement it stopped short of the line between possibility and plausibility of entitle[ment] to
relief.’” Id. at 557.
Twombly provided this court, and other district courts, with instruction on the level a
factual specificity a plaintiff must allege in its complaint in order to plead a Section 1 claim.
First and foremost, a section 1 claim “requires a complaint with enough factual matter (taken as
true) to suggest that an agreement was made.” 550 U.S. at 556. That is, there must be sufficient
fact presented “to raise a reasonable expectation that discovery will reveal evidence of illegal
agreement.” Id. Despite the plausibility standard announced in Twombly and the emphasis on
pleading factual matter, the Supreme Court made clear that it was not going so far as to call for a
fact-pleading standard:
Asking for plausible grounds to infer an agreement does not impose a
probability requirement at the pleading stage; it simply calls for enough
fact to raise a reasonable expectation that discovery will reveal evidence
of illegal agreement. And, of course, a well-pleaded complaint may
proceed even if it strikes a savvy judge that actual proof of those fact is
improbable, and “that a recovery is very remote and unlikely.”
Id. (footnote and citations omitted). In the current case, unlike Twombly, this Court
concludes Plaintiff has alleged something more than bare allegations of parallel conduct and a
recitation of the elements. For instance, Plaintiff alleges an actual agreement initiated by specific
persons. Further, Plaintiff identifies specific persons involved in the conspiracy and provides an
approximate time period for the alleged conspiracy. Although the series of alleged price fixing
arrangements among defendants was followed by parallel rises in prices, the complaint does not
rely on the alleged parallel conduct alone to imply a conspiracy. Instead, Plaintiff supports its
Section 1 claim by pleading factual allegations, identifying parallel conduct, and placing the
conduct in the larger context of circumstances making the occurrence of a conspiracy more
likely. As such, Plaintiff has sufficiently stated a claim for a conspiracy between Defendants and
the other PSF providers alleged to have taken part in the conspiracy.
Despite such specificity, Defendants attack the allegations in Plaintiff’s Complaint as
lacking the “who, what, when and where,” of the alleged conspiracy as purportedly required by
Twombly.5 Defendants attack is misplaced, as Twombly does not require such specificity.
This Court finds that Twombly imposes no such requirement. The “time, place or
person” language in Twombly appears in dicta, in a footnote, in the context of the Court's
comment that, but for the complaint's allegations of parallel conduct, references to an agreement
among the ILECs might not have given the notice required by Rule 8 because the complaint did
not give the “specific time, place or person” involved in the alleged conspiracy. 550 U.S. at 564
n. 10. The Supreme Court noted that if parallel conduct among all the ILECs had not been
generally alleged, there would have been “no clue as to which of the four ILECs (much less
which of their employees) supposedly agreed, or when and where the illicit agreement took
place.” Id. In such an instance, the Court hypothesized, “a defendant seeking to respond to
plaintiffs' conclusory allegations in the § 1 context would have little idea where to begin.” Id. In
fact, the Court in Twombly expressly stated that it did “not require heightened fact pleading of
specifics, but only enough facts to state a claim to relief that is plausible on its face.” 550 U.S. at
570. Stated differently, the Court's “concern [was] not that the allegations in the complaint were
insufficiently ‘particular[ized];’ rather, the complaint warranted dismissal because it failed in
toto to render plaintiffs' entitlement to relief plausible.” Id. at 569 n. 14 (internal citation
omitted) (emphasis in original). See also In re Packaged Ice Antitrust Litigation, 723 F. Supp. 2d
987, 1005 (E.D. Mich. 2010).
Plaintiff has offered sufficient factual content to “raise a reasonable expectation that discovery
will reveal evidence of illegal agreement.” Even if ultimate proof of the facts may seem
improbable to a “savvy judge,” Twombly did not purport to place on a plaintiff alleging an
antitrust conspiracy claim a summary judgment standard at the pleading stage. See In re Flat
Panel Antitrust Litig., 599 F. Supp. 2d 1179, 1184 (N.D. Cal. 2009) (“Contrary to defendants’
suggestion, neither Twombly nor the Court’s prior order requires elaborate fact pleading.”).
Indeed, other courts have held that even when a Plaintiff does not answer all of the
specific questions about “who, what, when and where,” a Plaintiff can still survive a motion to
dismiss. See In re Se. Milk Antitrust Litig., 555 F. Supp. 2d 934, 942 (E.D. Tenn. 2008) (“These
complaints, while not answering all specific questions about ‘who, what, when and where,’ do
put defendants on notice concerning the basic nature of their complaints against the defendants
and the grounds upon which their claims exist.”); see also Starr v. Sony BMG Music
Entertainment, 592 F.3d 314, 325 (2d Cir. 2010) (rejecting defendants’ argument that Twombly
imposed an obligation to identify specifics regarding the time, place, and person as to each
allegation of conspiracy); In re Graphics Processing Units Antitrust Litig., 527 F. Supp. 2d
1011, 1024 (N.D. Cal. 2007) (confirming that plaintiffs need not plead “specific back-room
meetings between specific actors at which specific decisions were made”). Instead, Plaintiff
needs simply to plead sufficient factual allegations that make its claim plausible on its face, a
standard that Plaintiff has met in the instant case.
Defendants cite to two cases in support of their contention that Plaintiff’s Complaint
should be dismissed because it does nothing more than allege unidentified meetings at
unspecified times. More specifically, Defendants argue that the allegations in the Amended
Complaint are virtually identical to those of the plaintiffs in In re Elevator Antitrust Litigation,
502 F.3d 47 (2d Cir. 2007) and the Air Cargo Antitrust Litigation, MDL No. 1775, 2009 WL
3443405 (E.D.N.Y. Aug. 21, 2009) .
This Court finds these cases distinguishable in that neither case involved the level of
factual content proffered in this case. For instance, in Elevator Antitrust Litigation, the Second
Circuit affirmed dismissal of plaintiffs’ price-fixing antitrust claims that defendants conspired in
violation of Section 1 by “participating in meetings to discuss pricing and market division,
agreeing to fix prices, rig bids, allocate markets, and exchange price quotes.” Elevator Antitrust
Litigation, 502 F.3d at 51. Applying Twombly, the Second Circuit held that plaintiffs’
“conclusory allegations of an agreement at some unidentified point do not supply facts adequate
to show illegality.” Id. The Second Circuit affirmed the district court’s decision to grant
defendants’ motion to dismiss because the plaintiffs’ allegations were “in entirely general terms
without any specification of any particular activities by any particular defendant; it is nothing
more than a list of theoretical possibilities, which one could postulate without knowing any facts
whatever.” Id. (quotations omitted).
Similarly, in Air Cargo Antitrust Litigation, a district court dismissed plaintiffs’ pricefixing antitrust claims where the plaintiffs alleged that there were “meetings, secret meetings,
communications, or secret meetings and communications . . . [where the defendants agreed to]
implement a war risk surcharge . . . charge customers flat fees . . . [for each] manifest . . . [and]
raise and fix airfreight shipping costs,” because all the allegations were in “entirely general
terms” which “one could postulate without knowing any facts whatsoever.” 2008 U.S. Dist.
LEXIS *77-79, 81-82. The district court further held that “the complaint fails to tie each
defendant into the conspiracy with something other than bare parallel conduct.” Id. at 83.6
This Court finds that Plaintiff’s Complaint, viewed in the light most favorable to
Plaintiff, alleges more than what was alleged in In re Elevator Antitrust Litigation and the Air
Cargo Antitrust Litigation complaints. Unlike the complaints Elevator Antitrust Litigation and
Air Cargo Antitrust Litigation, the complaint in the current case is composed of more than
conclusory allegations or theoretical possibilities. While not pleading every factual detail of the
alleged conspiracy, the Complaint in the instant case identifies parties to the conspiracy and
describes a specific meeting where parties to the conspiracy agreed to fix prices. Also unlike the
complaint in Air Cargo Antitrust Litigation, Plaintiff’s Complaint pleads allegations that require
more than knowledge of the elements of a conspiracy claim. As such, Plaintiffs Complaint
pleads a plausible claim and gives Defendants reasonable notice of the allegations against them.
B. Plaintiff’s Complaint alleges more than parallel conduct.
Defendants next contend that Milliken’s bare allegations in the Amended Complaint are
legally insufficient to state a Section 1 claim of parallel conduct (also known as “follow-theleader” pricing) in the PSF industry. Defendants maintain that “[i]n the wake of Twombly,
Defendants argue that to properly plead a violation of Section 1, Milliken must set forth
specific allegations in its complaint as to each alleged conspirator whose conduct it claims was
unlawful. See Elevator Antitrust Litig., 502 F.3d at 50-51 (general allegations of activities
“without any specification of any particular activities by any particular defendant ... do not
supply facts adequate to show illegality”); Michigan Div.-Monument Build. Of N.A. v. Michigan
Cemetery Assoc., 458 F. Supp. 2d 474, 485 (E.D. Mich. 2006), aff’d, 524 F.3d 726, 729 (6th Cir.
2008) (“Plaintiffs cannot escape their burden of alleging that each defendant participated in or
agreed to join the conspiracy by using the term ‘defendants’ to apply to numerous parties
without any specific allegations as to any individual defendant.”). This Court disagrees with
Defendants’ assessment of the factual specificity alleged in Plaintiff’s Complaint. The factual
allegations pleaded in Plaintiff’s Complaint, combined with the context in which the conspiracy
is alleged to have occurred, is sufficient at this stage of the litigation to survive a motion to
allegations of parallel conduct and bare assertions of conspiracy no longer supply an adequate
foundation to support a plausible § 1 claim.” In re Travel Agent Commission Antitrust Litig., 583
F.3d 896 (6th Cir. 2009). In reviewing a claim under Section 1, the “crucial question” is whether
the challenged anti-competitive conduct “stem[s] from independent decision or from an
agreement, tacit or express.” Twombly, 550 U.S. at 553 (citing Theatre Enterprises, Inc. v.
Paramount Film Distributing Corp., 346 U.S. 537, 540 (1954)).
When a complaint alleges parallel conduct as a basis for relief under Section 1, “it must
be placed in a context that raises a suggestion of a preceding agreement, not merely parallel
conduct that could just as well be independent action.” Twombly, 550 U.S. at 557. An allegation
of parallel conduct–as with a naked allegation of conspiracy “without some further factual
enhancement . . . stops short of the line between possibility and plausibility of ‘entitlement to
relief.’” Id. (citing DM Research, Inc. v. College of Am. Pathologists, 170 F.3d 53, 56 (1st Cir.
1999). In other words, “lawful parallel conduct fails to bespeak unlawful agreement.” Id. The
complaint must allege something more than “merely parallel conduct that could just as well be
independent action,” such as “additional facts that tend to exclude independent self-interested
conduct as an explanation for defendants’ parallel behavior.” Id. at 1964, 1966 (internal
If, as Defendants allege, this were a case of parallel conduct and bare assertions of
conspiracy, then Defendants would be correct to assert that Plaintiff’s Complaint would not have
supplied an adequate foundation to support a plausible § 1 claim. See In re Travel Agent
Commission Antitrust Litig., 583 F.3d 896 (6th Cir. 2009). Plaintiff’s Complaint, however,
alleges more than simple parallel conduct. In the current case, viewing the Amended Complaint
in its entirety, there is sufficient factual content alleged to put Plaintiff’s allegations in a context
indicative of a plausible conspiracy. As stated above, Plaintiff’s Amended Complaint contains
the following allegations: identifies the parties involved in the conspiracy, identifies by name
several employees of each of the conspirators who participated in the conspiracy, identifies the
product involved in the conspiracy, identifies the geographic market impacted by the conspiracy,
Defendants and their partners-in-crime implemented their conspiracy, identifies the victims of
the conspiracy and describes with some detail one of the meetings between the co-conspirators.
Additionally, Plaintiff’s complaint includes specific factual allegations that go beyond the
requirement of Twombly and do answer the who, where and when:
For example, in the fall of 1994 or early 1995, Stanley and Whitley
reached agreements regarding the pricing and volume of PSF that Hoechst
Celanese and Wellmen were quoting to Milliken. Stanley also agreed with
Whitley that Hoechst Celanese would not undercut Wellman’s quoted
price to Milliken and that Defendants would not increase the volume of
their PSF sales to Milliken. Upon information and belief, the first
communication between Stanley and Whitley that related to Milliken
occurred in the fall of 1994 or early 1995 at a hunting club in Georgia in
connection with a gathering that was organized by a PSF broker, David
Am. Compl. ¶ 45. Plaintiff’s Complaint further demonstrates the continuing nature of the
conspiracy, as Milliken alleges that Stanley also reached an agreement with a Nan Ya employee,
Brad Dutton, regarding pricing for Johnson & Johnson, and that “[i]n reaching this agreement,
Stanley and Dutton discussed Stanley’s concern that if Nan Ya’s quoted price to Johnson &
Johnson was too low it would impact the market price for PSF and result in Stanley having to
lower the price he had quoted to Milliken.” Am. Compl. ¶ 48. Indeed, other district courts have
held that similar explicit allegations to fix prices and references to particular meetings is enough
to raise a right to relief above the speculative level. See In re OSB Antitrust Litig., 2007 WL
2253419, at *5; see also In re Se. Milk Antitrust Litig., 555 F. Supp. 2d 934, 944 (E.D. Tenn.
2008) (holding that where plaintiffs allege that actual agreements exist, along with allegations of
certain parallel behavior, the complaints “plead sufficient facts to comply with Fed. R. Civ. P.
8(a)(2) and the United States Supreme Court’s recent pronouncement in Twombly.”).
A review of the cases cited by Defendants show that Plaintiff’s Complaint alleges more
than what is required to survive a motion to dismiss. First, in In re Late Fees and Over-Limit Fee
Litigation, 528 F. Supp. 2d 953, 961-62 (N.D. Cal. 2007), the Northern District of California
dismissed the plaintiffs’ claims because they alleged partially parallel behavior and the
opportunity for the defendants to conspire, but did not allege any facts relating to an actual
agreement among the defendants. Second, and similarly, in In re Travel Agent Commission
Antitrust Litigation, No. 1:03-cv-30000, 2007 WL 3171675, *8-9, 12 (N.D. Ohio Oct. 29, 2007),
the only relevant allegations were that the defendants engaged in parallel conduct and had the
opportunity to conspire. Accordingly, the Northern District of Ohio held that the plaintiffs failed
to meet Twombly’s pleading requirements. Third, and finally, in Kendall v. Visa U.S.A., Inc., 518
F.3d 1042, 1048 (9th Cir. 2008), the Ninth Circuit affirmed dismissal of the plaintiffs’ claims
because the complaint “failed to plead any evidentiary facts beyond parallel conduct.” The cases
cited by Defendants share a common defect: the plaintiff alleges nothing more than parallel
conduct and an opportunity to conspire. In the instant case, this defect is cured by the level of
factual allegations pleaded in the Complaint. The allegations of parallel conduct, combined with
specific and sufficient factual allegations regarding the alleged agreements, make out a plausible
claim for a Section 1 violation.
In their reply brief, Defendants cite to In re Chocolate Confectionary Antitrust Litig., 602
F. Supp. 2d 538 (M.D. Pa. 2009), as an example that demonstrates the factual allegations
necessary to state an antitrust conspiracy claim in cases involving allegations of parallel conduct.
In Chocolate Confectionary, the plaintiffs alleged parallel price increases and also alleged
specific facts concerning a number of incriminating communications among the alleged coconspirators that substantively and temporally suggested that the price increases were more than
independent parallel conduct. Id. at 555 (defendants’ synchronized price increases were
immediately preceded by communications between each other regarding product pricing). The
district court held that the detailed factual allegations regarding communications among the
purported co-conspirators were sufficient to nudge the plaintiffs’ from conceivable to plausible
and denied the defendants’ motion to dismiss. Id. at 555-57. Importantly, however, nothing in
Chocolate Confectionary states that such detailed allegations are a minimum requirement for
what a plaintiff must plead in order to make out a plausible claim. To the extent that Plaintiff’s
Complaint pleads less than what was pleaded in Chocolate Confectionary, Plaintiff still meets its
burden of sufficiently pleading a claim under the standard articulated in Twombly and Iqbal. As
such, this Court finds that Plaintiff has alleged more than parallel conduct and that Plaintiff has
pleaded sufficient factual allegations to survive Defendants’ Motion to Dismiss.
C. The facts as alleged, combined with Plaintiff’s references to other matters involving the
members of the alleged conspiracy, raise a reasonable expectation that discovery will
reveal evidence of illegal agreement
Defendants next argue that Milliken cannot satisfy Twombly’s pleading requirements in
connection with its claims against Celanese based upon reference to: (1) the guilty pleas of nonparties Arteva and Troy Stanley, (b) the purported “admission” by DuPont by seeking entry into
the Corporate Leniency Program of the United States Department of Justice (“DOJ”), (c) KoSa’s
allegations in a separate civil action for fraud concerning the sale of Celanese’s PSF business, or
(d) sealed summary judgment filings from MDL 1516. Defendants maintain that the
Kosa/Stanley guilty pleas and the DuPont “admission” are completely inconsistent with
Milliken’s allegation that Celanese was a member of any four-party conspiracy. Additionally,
Defendants argue that the sealed summary judgment filings are insufficient to satisfy the
Twombly pleading standard. To be sure, these allegations standing alone probably would not
establish a plausible suggestion of conspiracy. However, when examined in light of the factual
allegations of Plaintiff’s Complaint, these contextual references provide further support for
Plaintiff’s contention that it has nudged its claim across the line from conceivable to plausible.
In their memorandum in support of their motion to dismiss, Defendants point to several
contextual references and allegations in Plaintiff’s Complaint that Defendants argue fail to
support the inference that Defendants participated in a four-party conspiracy. The structure of
Defendants brief suggests that they would prefer this Court to analyze each allegation separately,
considering in isolation allegations regarding the guilty pleas entered by Troy Stanley and KoSa,
Dupont’s participation in the Department of Justice Leniency Program, KoSa’s lawsuit against
Defendants, and other allegations. Defendants’ invitation to “parse and dismember” the
Amended Complaint, however, is “contrary to the Supreme Court’s admonition that ‘[t]he
character and effect of a [Sherman Act] conspiracy are not to be judged by dismembering it and
viewing it as separate parts.’” In re Se. Milk Antitrust Litig., 555 F. Supp. 2d at 943-44 (citing
Cont’l Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690, 699 (1962), superseded by
statute on other grounds, Pub. L. No. 97-290, 15 U.S.C. § 6(a)). “Nothing in Twombly . . .
contemplates this ‘dismemberment’ approach to assessing the sufficiency of a complaint. Rather,
a district court must consider a complaint in its entirety without isolating each allegation for
individualized review.” In re Pressure Sensitive Labelstock Antitrust Litig., 566 F. Supp. 2d
363, 373 (M.D. Pa. 2008). The Amended Complaint should be reviewed “in toto.” Twombly, 550
U.S. at 569 n. 14. As such, this Court will examine each allegation and reference in the context
of the entire Complaint to determine whether Plaintiff’s Complaint fully complies with the
requirements articulated by the Supreme Court in Twombly.
(1) The Arteva Guilty Plea
Milliken alleges that, in December 2002, Arteva Specialties, S.a.r.l. (“Arteva”) – an
entity not related to Celanese – pleaded guilty to the same conspiracy Milliken has alleged in the
Amended Complaint. The Court may “take notice of the full contents” of guilty pleas. Twombly,
127 S. Ct. at 1973 n. 13; Fed. R. Evid. 201. Defendants argue, however, that nothing in the
Arteva guilty plea agreements implicates Celanese. This Court disagrees with Defendants’
assessment of whether the Arteva guilty plea makes Plaintiff’s allegation of conspiracy more
Two cases from the Northern District of California provide this court with persuasive
guidance on the relevance of guilty pleas proffered by non-defendants. In two cases involving
the market for electronic memory (specifically the markets for Dynamic Random Access
Memory (“DRAM”) and the market for Static Random Access Memory (“SRAM”)), In re Flash
Memory Antitrust (DRAM) Litig., 643 F. Supp. 2d 1133 (N.D. Cal. 2009) and In re Static
Random Access Memory (SRAM) Litig., 580 F. Supp. 2d 896 (N.D. Cal. 2008), the Northern
District of California held that evidence of guilty pleas in markets not directly involved in the
claims before them supported a reasonable inference of conspiratorial behavior in the markets in
the cases before them. Acknowledging the general principle that “evidence concerning a prior
conspiracy may be relevant and admissible to show the background and development of a
current conspiracy” the court in Flash Memory stated:
Defendants ignore the above authority, and instead, focus on the fact that the employees
who pleaded guilty to price fixing in the DRAM investigation worked for only two of the
Defendant companies. While that may be so, the Court notes that the two companies
involved, Samsung and Hynix, collectively controlled the majority of the flash memory
market and together paid fines approaching half a billion dollars. In addition, at least
seven of the employees involved are alleged to have had responsibility for NAND flash
memory pricing, sales, marketing and operations in the United States. Given these
employees' overlapping involvement in controlling DRAM and flash memory pricing,
coupled with the significant market power wielded by their employers, it is reasonable to
infer that their involvement in the DRAM conspiracy had at least some connection to the
alleged conspiracy in this case.
643 F. Supp. 2d at 1149. Similarly, the court in SRAM held that guilty pleas in the DRAM
litigation supported an inference of conspiracy in the SRAM industry: “Plaintiffs allege that the
same actors associated with certain Defendants were responsible for marketing both SRAM and
DRAM. Although the allegations are not sufficient to support Plaintiffs' claims standing on their
own, they do support an inference of a conspiracy in the SRAM industry.” 580 F. Supp. 2d at
903. See also In re Air Cargo Shipping Services Antitrust Litig., MDL No. 1775, 2009 WL
3443405 at *1 (E.D.N.Y. Aug. 21, 2009) (unpublished) (reversing the magistrate judge's opinion
and holding that “admissions of price-fixing by so many of the defendants certainly ‘are
suggestive enough to render a § 1 conspiracy claim plausible.’”) (quoting Twombly, 550 U.S. at
Thus, under certain factual circumstances, the “if there, then here” argument advanced by
Plaintiff in the current case can have merit. This is particularly true where, as here, there is a
significant overlap in identity of the alleged co-conspirators and where the claim is based on
similar anti-competitive conduct. Regarding the validity of the “if there, then here” argument, it
is clear that simply referencing a guilty plea in another conspiracy is not sufficient to support a
reasonable inference of conspiracy in the current case. For instance, in Elevator Antitrust Litig.,
502 F.3d 47, 52 (2nd Cir. 2007), the court found that plaintiffs had offered “an insufficient
factual basis” for inferring a worldwide conspiracy based upon apparent (not proven)
misconduct in Europe. 502 F.3d at 52. The court found that there was no evidence linking the
conduct alleged to have occurred in Europe to the United States, in particular no indication that
the two markets were even responsive to one another on price and “no allegations of the actual
pricing of elevators or maintenance services in the United States or changes therein attributable
to defendants' alleged misconduct.” Id. The court did not hold that such a theory could never be
viable–only that it hadn't been sufficiently alleged: “Without adequate allegation of facts linking
transactions in Europe to transactions and effects here, plaintiffs' conclusory allegations do not
‘nudge [their] claims across the line from conceivable to plausible.’” Id. (quoting Twombly, 550
In re Parcel Tanker Shipping Servs. Antitrust Litig., 541 F. Supp. 2d 487, 492 (D. Conn.
2008), provides another example of an unsuccessful “if there, then here” argument. In Parcel
Tanker, the plaintiffs attempted to introduce evidence of guilty pleas in a conspiracy to
unlawfully raise prices on a different trade route as proof of a conspiracy to unlawfully lower
prices. Due to significant factual differences between the conspiracies, the court found that the
suggested inference did not enhance the plausibility of plaintiffs’ claim: “in the context of a
predatory pricing claim, ‘a conspiracy to increase profits in one market does not tend to show a
conspiracy to sustain losses in another.’” 541 F. Supp. 2d at 492 (quoting Matsushita Elec.
Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 596 (1986)).
A similar example of an inference held to be too broad is provided by In re Hawaiian &
Guamanian Cabotage Antitrust Litig., 647 F. Supp. 2d 1250 (W.D. Wash. 2009), where the
Western District of Washington rejected plaintiffs' proffer of guilty pleas relating to conduct on
an entirely different trade route by certain individuals, only one of whom was involved in the
litigation before the court. The Court distinguished SRAM, noting: “The cases on which plaintiffs
primarily rely do not support a different view because those cases involved defendants with
overlapping involvement in different markets, a factual scenario that plaintiffs in this case have
not pleaded.” 647 F. Supp. 2d at 1259
The Court finds the current case more analogous to SRAM and distinguishable from the
cases where the courts rejected the “if there, then here” argument. In the instant case and unlike
Elevator Antitrust Litigation, Plaintiff is not reaching across the ocean based on unproven
allegations regarding an unknown market. Rather, Plaintiff points to an admitted conspiracy that
was close in time, geographic area, and involved several of the same entities. See also In re
Chocolate Confectionary Antitrust Litig., 602 F. Supp. 2d 538, 576-577 (M.D. Pa. 2009)
(distinguishing In re Elevator and holding that “Defendants' alleged [anticompetitive] conduct in
Canada enhances the plausibility of the alleged U.S. price-fixing conspiracy.”). It is important to
note that the Arteva guilty plea, standing alone, might not enhance the plausibility analysis.
When viewed in context, however, the guilty plea does enhance the expectation that discovery
might lead to evidence of an illegal agreement.
(2) The Stanley Guilty Plea
Defendants next contend that the Troy Stanley guilty plea provides nothing in the way of
factual allegations that Celanese was involved in any anti-competitive conduct.7 In that plea
agreement, Stanley, an Arteva employee previously employed by Celanese, pleaded guilty only
with respect to the time period he served as an employee of Arteva. As part of the plea, Troy
Stanley pleaded guilty to antitrust violations involving PSF at least as early as September 1999.
While the guilty plea, if offered alone, would be insufficient to support an inference of
conspiracy extending back to late 1994 or early 1995, when examined in the context of
Plaintiff’s factual allegations the guilty plea provides at least some further plausible support for
an inference of a conspiracy. See In re Vitamins Litig., No. 99-misc-197-197, 2000 WL 1475705
at *11 (D.D.C. May 9, 2000) (rejecting the “notion that the guilty pleas and cooperation
agreements and the class settlement foreclose a broader conspiracy. Guilty pleas are negotiated
instruments which take into account not only the culpability of the accused but the Justice
Department’s resources and other cases requiring the government’s attention.”). As such, the
Stanley guilty plea provides further contextual support for Plaintiff’s Section 1 claim.
(3) DuPont’s DOJ Participation
Similarly, Defendants argue that the facts alleged by Milliken concerning DuPont and the
Department of Justice are insufficient to supply the requisite specific factual allegations
mandated in Twombly. Milliken alleges that, in 2001, DuPont “admitted to the DOJ
participation” in the conspiracy alleged in the Amended complaint, and in exchange the “DOJ
granted amnesty to DuPont from criminal charges under its Corporate Leniency Program.” Am.
Defendants contend that the Stanley guilty plea is silent as to any specific factual
allegations and certainly contains no factual allegations implicating Celanese in any unlawful
conduct – much less any participation by Celanese in a four-party conspiracy with Wellman,
DuPont, and Nan Ya. As discussed above, such detailed factual allegations are not necessary.
Compl. ¶ 15(b). Defendants point to the lack of any details regarding the conspiracy to which
Dupont allegedly admitted participation. Once again, however, Defendants narrow focus on one
allegation in Plaintiff’s Complaint misses the mark.
Government investigations and participation in amnesty participation program may not,
standing alone, satisfy an antitrust plaintiff’s pleading burden. Such evidence may, however, be
used to bolster the plausibility of § 1 claim, as Plaintiff has done in the instant case. See Starr,
592 F.3d at 324-25 (finding that investigations by New York State Attorney General and DOJ
Antitrust into defendants' price-fixing support plausibility of § 1 claim); see also Hyland v.
Homeservices of America, Inc., No.3:05-CV-612-R, 2007 WL 2407233, at *3 (W.D. Ky. Aug.
17, 2007) (unpublished) (finding that DOJ enforcement actions supported § 1 price-fixing
allegations); In re Tableware Antitrust Litig., 363 F. Supp. 2d 1203, 1205 (N.D. Cal.2005) (“A
plaintiff may surely rely on governmental investigations, but must also . . . undertake his own
reasonable inquiry and frame his complaint with allegations of his own design.”). Accordingly, it
is appropriate for Plaintiff to reference Dupont’s participation in the Department of Justice
Leniency Program to bolster the plausibility of its § 1 claim.
(4) The Koch Complaint
Defendants next contend that Milliken cannot satisfy its pleading obligations under
Twombly simply by incorporating by reference conclusory allegations asserted by a non-party in
some other lawsuit. In its Amended Complaint, Milliken alleges that, on November 3, 2003,
Koch, Arteva and their affiliates filed a civil action (“Koch Complaint”) against Celanese,
Hoechst AG and “various other Hoechst entities” alleging fraud in connection with the sale of
Celanese’s PSF business to KoSa in 1998, including the alleged fraudulent concealment from
Koch of Celanese’s supposed participation in the conspiracy alleged in the Amended Complaint.
Id. at ¶ 20. The issue need not be decided today because Plaintiff’s Complaint states sufficient
factual allegations to suggest a plausible conspiracy even without incorporating the Koch
Complaint. Accordingly, this Court need not decide to what degree allegations in a separate
action provide support for an inference of conspiracy in the current case.
(5) Non-Class Plaintiffs’ Opposition to Celanese’s Summary Judgment Motion
Finally, Defendants take issue with Milliken’s allegations that the Non-Class Plaintiffs’
Opposition to Celanese’s motion for summary judgment in MDL 1516 (“NCP’s Opposition”)
contains “additional details concerning various communications and meetings in furtherance of
the Conspiracy, including evidence showing agreements among defendants and their coconspirators from 1995 through 1998.” Am. Compl. ¶ 50. Although Milliken acknowledges that
NCP’s Opposition was filed under seal in MDL 1516, Milliken seeks to incorporate by reference
all of the evidence cited in that document as further support for the allegations of Conspiracy set
forth in its Amended Complaint.
Defendants maintain that the Amended Complaint does not provide any reference to
specific evidence contained in NCP’s Opposition. Instead, Defendants maintain that Milliken is
simply speculating as to alleged evidence proffered by the NCP’s in opposition to Celanese’s
summary judgment motion. Defendant points out that Milliken could not properly access the
contents of NCP’s Opposition brief because it contains “Confidential and Lawyers Only
Information” and was filed under seal pursuant to a Protective Order in MDL 1516. Prot. Ord. at
¶¶ 2(f), 3, 5. Defendants argue that Milliken’s speculation as to the contents of the NCP’s
Opposition is plainly insufficient to satisfy the pleading requirements under Twombly. Once
again, because Plaintiff’s Complaint pleads factual allegations sufficient to survive a motion to
dismiss, this Court need not decide to what degree the NCP’s Opposition brief provides
additional support for an inference of conspiracy.
D. Plaintiff’s Complaint Sufficiently States a § 1 claim.
Taken as true, as this Court must do on a motion to dismiss under Rule 12(b)(6), the facts
pleaded in Plaintiff’s Complaint are more than sufficient “to suggest that an agreement was
made” that violates § 1 of the Sherman Act. Plaintiff’s Complaint amply provides “enough fact
to raise a reasonable expectation that discovery will reveal [more] evidence of an illegal
agreement.” Twombly, 550 U.S. at 556. Like all complaints, this Court must read the Complaint
in its entirety, and must not “scrutinize each allegation in isolation but [must] assess all of the
allegations holistically.” See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 325
(2007). Viewed in its entirety, Plaintiff’s Complaint contains enough factual content to plausibly
suggest that Defendants participated in a conspiracy and that discovery will reveal evidence of
an illegal agreement. The factual allegations pleaded in Plaintiff’s Complaint are further
bolstered by contextual references to another conspiracy in the PSF industry occurring in the
same geographic region and around the same time period. Plaintiff’s Complaint provides
Defendant with more than fair notice of Plaintiff’s claims and the grounds on which they are
based, such that Defendant will know how to respond. “The present complaint succeeds where
Twombly’s failed because the complaint alleges specific facts sufficient to plausibly suggest that
the parallel conduct alleged was the result of an agreement . . . .” Starr, 592 F.3d at 323. Whether
Plaintiff will ultimately prevail on its claim is a matter for another day. Accordingly, this Court
finds that the facts alleged by Plaintiff are sufficient to give rise to “a plausible suggestion of
conspiracy.” Twombly, 550 U.S. at 566.
E. DEFENDANTS’ MOTION TO STRIKE IS DENIED
Defendants next argue that this Court should strike the allegations in paragraphs 19 and
50 of the Amended Complaint, which refer to the summary judgment briefs and Order in MDL
1516. Plaintiff argues that motion should be denied, because Defendants have not met the
requirements of Federal Rule 12(f) or demonstrated that the allegations they seek to strike are
prejudicial. This Court agrees with Plaintiff and will DENY Defendants’ Motion to Strike.
Federal Rule 12(f) provides that “[t]he court may strike from a pleading . . . any
redundant, immaterial, impertinent, or scandalous matter.” A motion to strike, however, is a
“drastic remedy” that is generally “viewed with disfavor” and “granted only for egregious
[pleading] violations.” Nixon v. Majors, No. 3:07-cv-413-R, 2007 WL 4592277, *3 (W.D.N.C.
Dec. 28, 2007) (citing Waste Mgmt. Holdings, Inc. v. Gilmore, 252 F.3d 316, 347 (4th Cir.
2001)) (unpublished); Brown v. Ins. for Family Centered Servs., Inc., 394 F. Supp. 2d 724, 727
(M.D.N.C. 2005). In order to prevail on their motion, Defendants must demonstrate that the
allegations at issue are both “prejudicial” to Defendants and covered or “envisioned” by Rule
12(f). Brown, 394 F. Supp. 2d at 727 (internal citations omitted); Godfredson v. JCB Legal
Group, P.C., 387 F. Supp. 2d 543, 556 (E.D.N.C. 2005) (internal citations omitted).
Defendants argue that the allegations at issue are “immaterial and inadmissible hearsay,”
and thus should be stricken. Defendants’ argument assumes that Milliken plans to offer evidence
of the MDL 1516 summary judgment briefing and Order for some impermissible purpose.
Plaintiff contends that it is premature to determine the admissibility of these allegations. Plaintiff
argues that such evidence, under certain circumstances, might be relevant and admissible to
show bias or to otherwise impeach a trial witness. At this point in time, this Court finds it
improper to strike a portion of Plaintiff’s amended complaint based on the argument that the
portion of the complaint could later be used for some impermissible purpose. See Buser v. S.
Food Serv., Inc., 73 F. Supp. 2d 556, 559-60 (M.D.N.C. 1999) (denying motion to strike
allegations relating to the parties’ settlement negotiations because it was unclear at the early
stage of litigation how the plaintiff intended to use any evidence related to the negotiations);
Bailey-P.V.S. Oxides, LLC v. S&K Packaging, Inc., No. 8-1596, 2009 WL 425605, *2 (W.D. Pa.
Feb. 19, 2009) (unpublished) (holding that it was premature to strike allegations in a complaint
just because they might be inadmissible at trial).
Moreover, Defendants have not shown that they have been or will be prejudiced by the
allegations such that they should prevail on the motion to strike. See Godfredson, 387 F. Supp.
2d at 556. In Godfredson, the defendants sought to strike accusations in a complaint alleging
they engaged in criminal activity. Godfredson, 387 F. Supp. 2d at 556. The court characterized
the allegations at issue as “largely immaterial, impertinent, and scandalous.” Id. Ultimately,
however, the court denied the defendants’ motion to strike, reasoning that because the
allegations at issue were irrelevant and would not be presented to the jury or considered by the
court, there was minimal danger of prejudice to the defendants. Id. at 557. Similarly, Defendants
in the instant case fail to show how they might be prejudiced by the allegations at issue, other
than vaguely citing to the potential for prejudice at some later date. Accordingly, because
Defendants cannot make the necessary showing of actual prejudice, this Court declines “to
impose the drastic, disfavored remedy of striking the challenged allegations.” Chambers v.
Cooney, 535 F. Supp. 2d 1255, 1263 (S.D. Ala. 2008). Therefore, Defendants’ Motion to Strike
(Doc. # 36) is DENIED.
(1) Defendants’ Motion to Dismiss Plaintiff’s Amended Complaint and Strike Certain
Allegations in Plaintiff’s Amended Complaint (Doc. # 36) is DENIED.
Signed: August 8, 2011