Opinion ID: 200573
Heading Depth: 2
Heading Rank: 2

Heading: Sufficiency of Factual Allegations

Text: 20 Having decided the statute includes both higher and lower price discrimination, we consider whether the complaint's allegations and any logical inferences therefrom justify recovery on any cognizable theory. Martin, 284 F.3d at 6. Here, DJM claims that the prices Tex-Shield charged to Creative Apparel were lower than those quoted to DJM plainly suffice to survive dismissal. 21 Even if the statute applies to the alleged charging of higher prices in Puerto Rico, there are still two possible obstacles to stating a claim under § 264. First, § 264 prohibits a supplier from charging different prices for the purpose of destroying the supplier's competition or eliminating a competitor located in Puerto Rico. Second, § 264 requires that the goods be of the same grade and quality. The district court did not address either issue; taking all inferences in DJM's favor, we find the district court erred in dismissing the complaint. 4 22
23 A well-pleaded § 264 claim must include allegations that the price discrimination was for the purpose of destroying competition or eliminating a competitor located in Puerto Rico. In its complaint, DJM contends that Tex-Shield and Creative Apparel entered into an agreement involving, among other things, investment by Tex-Shield in Creative Apparel as part of a joint strategy to secure and maintain for the Blucher defendants monopoly power in United States trade and commerce in Chemical Protective Cloth ... and to attempt to secure and maintain, and to secure and maintain, monopoly power for Creative [Apparel] in United States trade and commerce in Chemical Protective Clothing, as well as in such trade and commerce in the § 8(a) market. 24 It is not irrational for a monopoly-holder such as Tex-Shield to act with the intent of sabotaging one of its two customers. 5 Such a concerted effort to establish and maintain monopoly power in the relevant markets, if proven, would meet § 264's purpose requirement because it would constitute an intent to harm competition in the chemical protective clothing market or eliminate DJM as Creative Apparel's competitor; thus, DJM's pleadings on this count suffice to meet § 264's intent requirement. Compare In re Compact Disc Minimum Advertised Price Antitrust Litig., 138 F. Supp.2d 25, 28 n. 4 (D.Me. 2001) (denying motion to dismiss where it was not irrational or implausible to infer agreement from the facts alleged), with DM Research, Inc. v. Coll. of Am. Pathologists, 170 F.3d 53, 55-56 (1st Cir.1999) (affirming dismissal where complaint merely assert[ed] a conspiracy in conclusory terms and stating that allegation of some fact pertaining to an agreement would be necessary to overcome the improbability of a conspiracy against the interests of one or more of the parties).
25 Finally, § 264 requires that DJM allege that Tex-Shield was quoting different prices for goods of the same grade or quality. Defendants argue that the goods for which DJM requested a price — pre-cut fabric kits — were not the same grade or quality as the goods on which Creative Apparel requested a price — uncut cloth on the roll. Although this argument may ultimately have merit, it does not preclude inferences from the complaint sufficient to defeat a Rule 12(b)(6) motion. 26 It is possible to infer from the complaint that the goods at issue were of the same grade and quality. According to the complaint, a DPSC report indicates that Defendant Tex-shield had, in fact, offered the Blucher Chemical Protective Cloth to Creative at a significantly lower price than it had offered the cloth to DJM. Given that the final product, the chemical protective clothing, had to be produced according to military specifications that included use of the Cloth, it is a reasonable inference — without considering any contrary proof — that the goods at issue (the Cloth) had to be of the same grade and quality. 6 Cf. Arruda v. Sears, Roebuck & Co., 310 F.3d 13, 18 (1st Cir.2002) (indicating that in evaluating propriety of 12(b)(6) motion, the court must assume the truth of all well-pleaded facts and indulge all reasonable inferences therefrom that fit the plaintiff's stated theory of liability).