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Case: 1:15-cv-00698-TSB Doc #: 26 Filed: 01/05/16 Page: 1 of 37 PAGEID #: 97

UNITED STATES DISTRICT COURT


SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
DODGE DATA & ANALYTICS, LLC,

Plaintiff,

v.

iSqFt INC.; CONSTRUCTION MARKET


DATA GROUP, LLC; CONSTRUCTION
DATA CORPORATION, LLC; and
BIDCLERK, INC.,
Defendants.

Case No. 1:15-cv-00698

Judge Timothy S. Black

)
)

ORAL ARGUMENT REQUESTED

)
)

MOTION OF DEFENDANTS iSqFt, INC., CONSTRUCTION MARKET DATA GROUP,


LLC, CONSTRUCTION DATA CORPORATION, LLC, AND BIDCLERK, INC. TO
DISMISS COMPLAINT
Pursuant to Federal Rule of Civil Procedure 12(b)(6), Defendants iSqFt, Inc.,
Construction Market Data Group, LLC, Construction Data Corporation, LLC, and BidClerk, Inc.
(Defendants) move for an order dismissing, with prejudice, the Complaint of Dodge Data &
Analytics, LLC (Dodge), for failure to state a claim upon which relief can be granted.
Defendants motion is based on the Memorandum submitted herewith and any
subsequent briefing, the Complaint, and any other matter of which this Court may properly take
judicial notice.
Defendants respectfully request oral argument pursuant to Southern District of Ohio
Local Rule 7.1(b)(2), in light of the complexity and public importance of the issues presented,

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particularly in the antitrust claims, in which Dodge seeks to deter legitimate competition that
benefits customers.
Dated: January 5, 2016

By: /s/ Mark C. Bissinger


Mark C. Bissinger (0012738)
Mark A. VanderLaan (0013297)
Thomas M. Connor (0082462)
DINSMORE & STOHL
255 E. 5th St.
1900 Chemed Center
Cincinnati, OH 45202
Telephone: (513) 977-8200
Fax: (513) 977-8141
Email: mark.bissinger@dinsmore.com
mark.vanderlaan@dinsmore.com
thomas.connor@dinsmore.com
Charles E. Elder (admitted pro hac vice)
Curt K. Brown (admitted pro hac vice)
IRELL & MANELLA LLP
1800 Ave. of the Stars
Los Angeles CA, 90067
Telephone: (310) 277-1010
Email: celder@irell.com
cbrown@irell.com
Counsel for Defendants
iSqFt, Inc., Construction Market Data
Group, LLC, Construction Data
Corporation, LLC, and BidClerk, Inc.

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UNITED STATES DISTRICT COURT


SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
DODGE DATA & ANALYTICS, LLC,

Plaintiff,

v.

iSqFt INC.; CONSTRUCTION MARKET


DATA GROUP, LLC; CONSTRUCTION
DATA CORPORATION, LLC; and
BIDCLERK, INC.,
Defendants.

Case No. 1:15-cv-00698

Judge Timothy S. Black

)
)

ORAL ARGUMENT REQUESTED

)
)

MEMORANDUM OF DEFENDANTS iSqFt, INC., CONSTRUCTION MARKET DATA


GROUP, LLC, CONSTRUCTION DATA CORPORATION, LLC, AND BIDCLERK,
INC. IN SUPPORT OF MOTION TO DISMISS

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COMBINED TABLE OF CONTENTS AND SUMMARY


PURSUANT TO S.D. OHIO CIV. R. 7.2(a)(3)
Page
I.

INTRODUCTION........................................................................................................... 1

II.

FACTUAL AND PROCEDURAL BACKGROUND .................................................. 3

III.

A.

The iSqFt Corporate Family .............................................................................. 3

B.

The Alleged Market for Nationwide CPIA Fixed Cost Business ............ 3

C.

Prior Litigation Involving Dodge and CMD .................................................... 6

DODGE HAS FAILED TO PLEAD A VALID ANTITRUST CLAIM. ................... 6


A.

Legal Standards .................................................................................................. 6

To survive a motion to dismiss, a plaintiff must allege facts sufficient to raise a right to relief
above the speculative level. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In
determining whether a plaintiff has alleged enough facts to state a claim to relief that is
plausible on its face, Twombly, 550 U.S. at 570, a court need not accept as true legal
conclusions or unwarranted factual inferences, or mere labels and conclusions. Id. at 555.
Additional authority: Crane & Shovel Sales Corp. v. Bucyrus-Erie Co., 854 F.2d 802,805 (6th
Cir. 1988); Mich. Div.-Monument Builders of N. Am. v. Mich. Cemetery Assoc., 524 F.3d 726,
731 (6th Cir. 2008); Total Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield,
552 F.3d 430, 434 (6th Cir. 2008).
B.

Dodge Fails To Allege Antitrust Injury ............................................................ 7

Dodge lacks standing to bring its antitrust claims because it has not suffered antitrust injury, i.e.,
an injury resulting from anticompetitive conduct of the sort the antitrust laws are intended to
avoid. Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 488 (1977); NicSand, Inc. v.
3M Co., 507 F.3d 442, 450 (6th Cir. 2007). Dodge does not and cannot allege any injury to
competition it only alleges that it is now being forced to compete on price. Dodge does not
claim it is unable to compete with iSqFts lower prices. On the contrary, Dodge admits that it
was able to discount its prices to avoid losing customers (what Dodge calls price erosion) but
Dodge does not allege that lowering its prices was unprofitable. Compl. 58. Dodge also
alleges injury from mergers resulting in the combined iSqFt entity because the end result was a
market with essentially two competitors. Compl. 46. Yet the Complaint concedes that this has
been the market equilibrium for nearly a century. Compl. 40. All that occurred here, is that the
market simply reverted to its equilibrium of two firms instead of Dodges monopoly a procompetitive development.
Additional authority: Brown Shoe Co. v. U.S., 370 U.S. 294, 320 (1962); Cargill, Inc. v. Monfort
of Colo., Inc., 479 U.S. 104, 110 (1986); Valley Products Co., Inc. v. Landmark, 128 F.3d 398,

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Page
403 (6th Cir. 1997); Indeck Energy Servs. v. Consumers Energy Co., 250 F.3d 972, 978-79 (6th
Cir. 2000).
C.

Dodge Fails To Plead Attempted Monopolization ......................................... 10

[T]o plead a claim for attempted monopolization under Section 2 of the Sherman Act, a plaintiff
must establish three elements: (1) that the defendant has engaged in predatory or
anticompetitive conduct with (2) a specific intent to monopolize and (3) a dangerous probability
of achieving monopoly power. Scooter Store, Inc. v. SpinLife.com, LLC, 777 F. Supp. 2d
1102, 1115 (S.D. Ohio 2011) (quoting Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456
(1993)). Failure to satisfy any one of these elements requires dismissal; Dodge fails as to all
three.
1.

Dodge Does Not And Cannot Allege Predatory Pricing .................... 10

To plead a claim for attempted monopolization premised on a predatory pricing theory, the
plaintiff must allege facts establishing: (1) that the prices complained of are below an
appropriate measure of its rivals costs; and, (2) that the defendant had a dangerous probability
of recouping its investment in below-cost prices. Brooke Group Ltd. v. Brown & Williamson
Tobacco Corp., 509 U.S. 209, 224. Dodges Complaint flunks both parts of this test.
Additional authority: Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 589
(1986).
(a)

Dodge Does Not Plead Facts Showing Below-Cost


Pricing. ....................................................................................... 11

In the Sixth Circuit, to establish a prima facie case for predatory pricing, a plaintiff must allege
facts showing the defendant priced below its average variable (or marginal) cost. Spirit Airlines
v. Nw. Airlines, Inc., 431 F.3d 917, 938 (6th Cir. 2005). Dodges own admissions in its
Complaint eviscerate its predatory pricing theory as they show that the market for nationwide
CPI is a fixed-cost business, with little or no variable costs. Furthermore, Dodges below-cost
pricing theory is not based on any facts about iSqFts costs, but instead is [b]ased upon Dodges
own price structure. Compl. 59. But even if the Complaint had alleged facts about iSqFts
costs, it alleges nothing about iSqFts current pricing.
Where, as here, the complaint itself gives reasons to doubt plaintiffs theory . . . it is not [the
courts] task to resuscitate the claim but to put it to rest. NicSand, 507 F.3d at 458 (quoting
Twombly, 550 U.S. at 568). Dodges own Complaint provides plenty of reasons to doubt its
predatory pricing theory. Dismissal is therefore warranted.
Additional authority: Brooke, 509 U.S. at 226; Astra Media Grp., LLC v. Clear Channel Taxi
Media, LLC, 679 F. Supp. 2d 413 (S.D.N.Y. 2009) affd in part, vacated in part, remanded, 414
F. Appx 334 (2d Cir. 2011); Affinity LLC v. GfK Mediamark Research & Intelligence, LLC, 547

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Page
F. Appx 54, 56 (2d Cir. 2013); Midwest Auto Auction, Inc. v. McNeal, No. 11-14562, 2012 WL
3478647, at *6 (E.D. Mich. Aug. 14, 2012).
(b)

Dodge Has Not Pled a Dangerous Probability Of


Recoupment. ............................................................................ 13

Even if Dodge had been able to plead below-cost pricing (and it has not), the Complaint still fails
to plead that there was any possibility of recoupment. This is fatal to the claim. Brooke, 509
U.S. at 225. Here, Dodge never claims it would be driven from the market by iSqFts prices; on
the contrary, Dodge pleads that it has been able to lower prices to retain customers. Compl. 58.
It merely provides an artfully worded hypothetical that if Dodge were driven from the market,
then iSqFt would have the ability to charge higher prices. Compl. 54 (emphasis added).
Merely alleging the ability to recoup is insufficient. Energy Conversion Devices Liquidation
Tr. ex rel. Madden v. Trina Solar Ltd., No. 13-14241, 2014 WL 5511517, at *6 (E.D. Mich. Oct.
31, 2014).
Dodges recoupment theory also fails because its own allegations demonstrate there is no barrier
to market entry, as evidenced by the Complaints discussion of several recent market entrants.
Further, Dodges sole basis for pleading barriers to entry is that it incurs high fixed costs. But to
plead a barrier to entry for antitrust purposes in the Sixth Circuit, a plaintiff must allege
something more than just high fixed costs. See Spirit Airlines, 431 F.3d at 927.
(c)

Plaintiff Alleges No Facts Concerning Predatory


Intent. ......................................................................................... 15

Dodge has failed to plead any facts concerning predatory intent. This independently warrants
dismissal. Richter Concrete Corp. v. Hilltop Concrete Corp., 691 F.2d 818, 827 (6th Cir. 1982).
Additional authority: D.E. Rogers Assocs., Inc. v. Gardner-Denver Co., 718 F.2d 1431, 14341436 (6th Cir. 1983).
2.

Dodges Other Allegations Are Insufficient to Plead


Attempted Monopolization. ................................................................. 16
(a)

The Alleged Mergers Did Not Create A Dangerous


Probability of Monopolization. ................................................ 16

Dodge does not and cannot plead that iSqFt has a dangerous probability of achieving monopoly
power through its mergers and acquisitions, because, as Dodge alleges, these combinations
resulted in a combined entity that possesses, at most, a 50% market share. Compl. 53. Fifty
percent market share is simply not enough. United States v. Empire Gas Corp., 537 F.2d 296,
306 (8th Cir. 1976); Richter, 691 F.2d at 826. Further, the Complaint states, For most of the
last one hundred years, the market for nationwide CPI has been a one- or two-player market.
Compl. 40. This statement plainly acknowledges that competition has not been harmed as a
consequence of iSqFts alleged acquisitions of BidClerk, CMD, and CDC.

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Page
(b)

Dodges Claim That CMD Used Dodges Trade


Secrets Is Insufficient To Plead Attempted
Monopolization.......................................................................... 17

Dodges allegations concerning CMDs prior hiring of employees who possessed Dodges
confidential information cannot support a claim for attempted monopolization. First, Dodge
does not have standing to bring this claim because, as Dodge admits, this is a claim that it no
longer owns its former owner, McGraw Hill, does. Compl. 39; Sanford Inv. Co. v. Ahlstrom
Mach. Holdings, Inc., 198 F.3d 415, 425 (3 Cir. 1999); Cranpark, Inc. v. Rogers Grp., Inc., No.
4:04CV1817, 2014 WL 3749401, at *5 (N.D. Ohio July 30, 2014). Second, Dodge alleges no
facts that iSqFt is currently using Dodges confidential information.
(c)

Dodges Claims Regarding Trademarks and


Restrictive Covenants Are Irrelevant To Its Alleged
Antitrust Claims. ....................................................................... 18

Dodges trademark infringement claims do not support its antitrust claims because Dodge admits
its marks are for products outside the relevant market. Dodge BidPro is a software
application and website service aimed at local and regional subcontractors not building
product manufacturers in the market for nationwide CPI. Compare Compl. 27 & 74. Dodge
also admits that its Sweets catalog is distinct from the sale of nationwide CPI. Compl. 62.
As these products are in completely different markets than the market that is the subject of the
antitrust claims, any conduct affecting those products is irrelevant to those antitrust claims.
Dodges allegations regarding iSqFts restrictive employment covenants relate to the labor
market for employees. Dodge does not even attempt to explain how these covenants make it
more likely that iSqFt could monopolize the alleged product market for nationwide CPI.
Moreover, these restrictive covenants are perfectly legal, and pro-competitive.
D.

Dodges Conspiracy Claims Fail Because iSqFt Cannot Conspire


With Itself. ......................................................................................................... 19

The Supreme Court has held that a parent corporation cannot conspire with its wholly owned
subsidiaries, and the Sixth Circuit has expanded this doctrine to hold that sister companies
sharing the same corporate parent are incapable, as a matter of law, of conspiracy under the
Sherman Act. Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752, 777 (1984); Directory
Sales Mgmt. Corp. v. Ohio Bell Tel. Co., 833 F.2d 606, 611 (6th Cir. 1987); Potters Med. Ctr. v.
City Hosp. Assn, 800 F.2d 568, 574 (6th Cir. 1986). The Complaint concedes that Defendants
are one combined entity. Compl. 44. Dodge therefore cannot plead a conspiracy under
Sections 1 or 2 of the Sherman Act.

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Page
IV.
DODGE FAILS TO PLEAD ANY VALID TRADEMARK-BASED
CLAIMS..................................................................................................................................... 20
Dodge has not alleged any possible likelihood of confusion between its marks and the
purportedly infringing marks. Dismissal is proper because [t]he degree of [dis]similarity . . .
overwhelms any possibility of confusion. Le Book Pub., Inc. v. Black Book Photography, Inc.,
418 F. Supp. 2d 305, 311 (S.D.N.Y. 2005). Because courts apply this same test to claims for
federal unfair competition and violations of the Ohio Deceptive Trade Practices Act, Claims 5, 9,
7, and 10 should similarly be dismissed. Champions Golf Club, Inc. v. The Champions Golf
Club, Inc., 78 F.3d 1111, 1123 (6th Cir. 1996); Cesare v. Work, 520 N.E.2d 586, 589 (Ohio Ct.
App. 1987). Dismissal of Dodges dilution claim is also warranted because Dodge has alleged
no facts to support it.
Additional authority: Hensley Mfg. v. ProPride, Inc., 579 F.3d 603, 610 (6th Cir. 2009).
V.
DODGE FAILS TO STATE A CLAIM FOR TORTIOUS
INTERFERENCE. .................................................................................................................... 22
Dodge cannot state a claim for tortious interference with business relationships because it has
failed to identify a single customer that it lost as a result of the purported interference. Ginn v.
Stonecreek Dental Care, 30 N.E.3d 1034, 1040 (Ohio Ct. App. 2015). Dodge also cannot
predicate this claim on its below-cost pricing theory. U.S. Anchor Mfg., Inc. v. Rule Indus., Inc.,
264 Ga. 295, 298 (1994); Ideal Dairy Farms, Inc. v. Farmland Dairy Farms, Inc., 659 A.2d 904,
936 (N.J. Super. Ct. App. Div. 1995).
VI.
DODGE FAILS TO STATE A VALID DECLARATORY RELIEF
CLAIM. ...................................................................................................................................... 22
Dodges claim for declaratory judgment should be dismissed because iSqFts restrictive
covenants are enforceable in each state in which it operates. See Atl. Tool Die v. Kacic, No.
2717-M, 1998 Ohio App. LEXIS 5485, *4 (Ohio Ct. App., Medina County Nov. 18, 1998); see
Fla. Stat. Ann. 542.33; see also Fla. Hematology & Oncology Specialists v. Tummala, 969 So.
2d 316, 317 (Fla. 2007); Ga. Code Ann. 13-8-50; see Reliable Fire Equip. Co. v. Arredondo,
965 N.E.2d 393, 396 (Il. 2011).
VII.

LEAVE TO AMEND SHOULD BE DENIED ........................................................... 24

Because Dodges claims suffer from numerous, independent fatal deficiencies, its claims should
be dismissed with prejudice and without leave to amend. Arnold v. Petland, Inc., No. 2:07-CV01307, 2009 WL 816327, at *11 (S.D. Ohio Mar. 26, 2009).
VIII. CONCLUSION ............................................................................................................. 24
CERTIFICATE OF SERVICE ............................................................................................... 25

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TABLE OF AUTHORITIES
Page(s)
Cases
Affinity LLC v. GfK Mediamark Research & Intelligence, LLC,
547 F. Appx 54 (2d Cir. 2013) ................................................................................. 12
Arnold v. Petland, Inc.,
No. 2:07-CV-01307, 2009 WL 816327 (S.D. Ohio Mar. 26, 2009) .......................... 24
Ashwander v. Tenn. Valley Auth.,
297 U.S. 288 (1936) ................................................................................................... 23
Astra Media Grp., LLC v. Clear Channel Taxi Media, LLC,
679 F. Supp. 2d 413 (S.D.N.Y. 2009) affd in part, vacated in part, remanded,
414 F. Appx 334 (2d Cir. 2011) ............................................................................... 12
Atl. Tool Die v. Kacic,
No. 2717-M, 1998 Ohio App. LEXIS 5485 (Ohio Ct. App., Medina County
Nov. 18, 1998) ........................................................................................................... 22
Bell Atl. Corp. v. Twombly,
550 U.S. 544 (2007) ............................................................................................ passim
Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp.,
509 U.S. 209 (1993) ....................................................................................... 10, 12, 13
Brown Shoe Co. v. U.S.,
370 U.S. 294 (1962) ..................................................................................................... 7
Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.,
429 U.S. 477 (1977) ....................................................................................... 1, 7, 8, 16
Cargill, Inc. v. Monfort of Colo., Inc.,
479 U.S. 104 (1986) ........................................................................................... 7, 8, 16
Cesare v. Work,
520 N.E.2d 586 (1987)............................................................................................... 20
Champions Golf Club, Inc. v. The Champions Golf Club, Inc.,
78 F.3d 1111 (6th Cir. 1996) ..................................................................................... 20
Copperweld Corp. v. Indep. Tube Corp.,
467 U.S. 752 (1984) ............................................................................................. 19, 20
Crane & Shovel Sales Corp. v. Bucyrus-Erie Co.,
854 F.2d 802 (6th Cir. 1988) ....................................................................................... 7

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Page(s)
Cranpark, Inc. v. Rogers Grp., Inc.,
No. 4:04CV1817, 2014 WL 3749401 (N.D. Ohio July 30, 2014) ............................. 17
D.E. Rogers Assocs., Inc. v. Gardner-Denver Co.,
718 F.2d 1431 (6th Cir. 1983) ................................................................................... 16
Directory Sales Mgmt. Corp. v. Ohio Bell Tel. Co.,
833 F.2d 606 (6th Cir. 1987) ..................................................................................... 19
Energy Conversion Devices Liquidation Tr. ex rel. Madden v. Trina Solar Ltd.,
No. 13-14241, 2014 WL 5511517 (E.D. Mich. Oct. 31, 2014) ........................... 14, 15
Fla. Hematology & Oncology Specialists v. Tummala,
969 So. 2d 316 (Fla. 2007)......................................................................................... 22
Ginn v. Stonecreek Dental Care,
30 N.E.3d 1034 (Ohio Ct. App. 2015) ....................................................................... 22
Hensley Mfg. v. ProPride, Inc.,
579 F.3d 603 (6th Cir. 2009) ..................................................................................... 20
Ideal Dairy Farms, Inc. v. Farmland Dairy Farms, Inc.,
659 A.2d 904 (N.J. Super. Ct. App. Div. 1995)......................................................... 22
Indeck Energy Servs. v. Consumers Energy Co.,
250 F.3d 972 (6th Cir. 2000) ....................................................................................... 9
Le Book Pub., Inc. v. Black Book Photography, Inc.,
418 F. Supp. 2d 305 (S.D.N.Y. 2005)........................................................................ 20
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574 (1986) ............................................................................................. 10, 14
Med. Ctr. at Elizabeth Place v. Premier Health Partners,
No. 3:12-CV-26, 2014 WL 7739356 (S.D. Ohio Oct. 20, 2014) .............................. 20
Mich. Div.-Monument Builders of N. Am. v. Mich. Cemetery Assoc.,
524 F.3d 726 (6th Cir. 2008) ....................................................................................... 7
Midwest Auto Auction, Inc. v. McNeal,
No. 11-14562, 2012 WL 3478647 (E.D. Mich. Aug. 14, 2012) ................................ 13
NicSand, Inc. v. 3M Co.,
507 F.3d 442 (6th Cir. 2007) .............................................................................. passim
Potters Med. Ctr. v. City Hosp. Assn,
800 F.2d 568 (6th Cir. 1986) ..................................................................................... 20

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Page(s)
Reed Construction Data, Inc. v. The McGraw-Hill Companies, Inc.,
No. 09-8578, ECF No. 220 (S.D.N.Y. Oct. 20, 2014) ........................................... 6, 18
Reliable Fire Equip. Co. v. Arredondo,
965 N.E.2d 393 (Ill. 2011) ......................................................................................... 23
Richter Concrete Corp. v. Hilltop Concrete Corp.,
691 F.2d 818 (6th Cir. 1982) ............................................................................... 15, 17
Sanford Inv. Co. v. Ahlstrom Mach. Holdings, Inc.,
198 F.3d 415 (3d Cir. 1999)....................................................................................... 17
Scooter Store, Inc. v. SpinLife.com, LLC,
777 F. Supp. 2d 1102 (S.D. Ohio 2011) .................................................................... 10
Snap-on Bus. Sols. Inc. v. ONeil & Associates, Inc.,
708 F. Supp. 2d 669 (N.D. Ohio 2010) ...................................................................... 18
Spectrum Sports, Inc. v. McQuillan,
506 U.S. 447 (1993) ................................................................................................... 10
Spirit Airlines v. Northwest Airlines, Inc.,
431 F.3d 917 (6th Cir. 2005) ............................................................................... 11, 15
Stotts v. Pierson,
976 F. Supp. 2d 948 (S.D. Ohio 2013) ...................................................................... 23
Total Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield,
552 F.3d 430 (6th Cir. 2008) ............................................................................. 2, 7, 19
U.S. Anchor Mfg., Inc. v. Rule Indus., Inc.,
264 Ga. 295 (1994) .................................................................................................... 22
United States v. Empire Gas Corp.,
537 F.2d 296 (8th Cir. 1976) ..................................................................................... 17
Valley Products Co., Inc. v. Landmark,
128 F.3d 398 (6th Cir. 1997) ....................................................................................... 8
Statutes
28 U.S.C. 2201 .................................................................................................................... 23
Fla. Stat. Ann. 542.33 .......................................................................................................... 22
Ga. Code Ann. 13-8-50 ........................................................................................................ 23

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Page(s)
Rules
Fed. R. Civ. P. 12(b)(6)............................................................................................................ 7

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I.

INTRODUCTION
Having lost the comfort of its former dominant market position and its concomitant

ability to charge supra-competitive prices, plaintiff Dodge Data & Analytics LLC (Dodge)
now seeks through this lawsuit to undermine price competition from the combined entity
consisting of iSqFt, Inc., Construction Market Data Group, LLC (CMD), Construction Data
Corporation, LLC (CDC), and BidClerk, Inc. (BidClerk) (collectively, iSqFt). Unable to
continue gouging its customers with excessive prices, Dodge has had to lower its prices, and thus
reduce its profits, to compete. This is, of course, pro-competitive. Yet Dodge nevertheless
brings baseless antirust claims, as well as a hodgepodge of other disparate causes of action, none
of which is sufficient to survive a motion to dismiss.
Dodge lacks standing to bring its antitrust claims because it has not alleged an antitrust
injury. The Supreme Court has long held that antitrust plaintiffs must plead not just any injury,
but antitrust injury i.e., an injury of the sort the antitrust laws are intended to avoid because
the antitrust laws are intended to protect competition, not competitors. Brunswick Corp. v.
Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 488 (1977). Here, Dodge does not and cannot allege
any injury to competition it only alleges that it is now being forced to compete on price. But
the antitrust laws encourage increased price competition, as it benefits customers. The Sixth
Circuit therefore requires dismissal on the pleadings of antitrust claims wielded as a trebledamages sword rather than the shield against competition-destroying conduct that Congress
meant them to be. NicSand, Inc. v. 3M Co., 507 F.3d 442, 450 (6th Cir. 2007).
The Complaint concedes that iSqFt currently has no more than a 50% share of the
relevant market which is no greater than Dodges alleged market share and is a far cry from a
monopoly. Dodges attempted monopolization claim is therefore based primarily on the

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specious assertion that iSqFts prices are predatory which is contradicted by Dodges own
allegations. The Complaint contains detailed facts showing that the market for selling
nationwide construction project information is a fixed cost business, with minimal (if any)
variable costs. It is therefore unsurprising that Dodge is unable to allege any facts to support its
claim that iSqFt is pricing below its average variable cost. Furthermore, Dodge cannot plead that
a predatory pricing scheme could ever succeed, as it admits that the alleged market has seen
multiple new entrants in recent years. Any new entrants could undercut iSqFts prices, thereby
preventing it from charging monopoly prices and recouping its alleged losses from the purported
below-cost sales. Dodges failure to allege facts showing either pricing below average variable
cost or a dangerous probability of recoupment renders it incapable of pleading a prima facie case
of predatory pricing.
Vainly scrambling for a viable antitrust theory, Dodge throws in two conspiracy claims
for good measure. This is curious, given the concession in the Complaint that all four defendants
are, in fact, one single entity, and thus cannot be considered conspirators as a matter of law.
E.g., Total Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield, 552 F.3d 430,
435 (6th Cir. 2008) (The Supreme Court has held that a parent company and its wholly owned
subsidiaries are incapable, as a matter of law, of conspiracy. This Court has expanded that
position to include sister companies with the same parent.) (citations omitted). Dodges other
allegations likewise do not even come close to pleading an antitrust claim.
Dodges other claims should be dismissed, as well. Its trademark and unfair competition
claims are based on marks that are not sufficiently similar to give rise to any likelihood of
confusion. Its claims based on the supposed misappropriation of trade secrets do not even

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belong to Dodge, as Dodge admits it assigned that claim to its former parent. And its challenge
to restrictive covenants in iSqFts employment agreements simply gets the law wrong.
The Complaint should be dismissed. And, given that Dodges claims are negated by its
own admissions, leave to amend would be futile and should not be granted.
II.

FACTUAL AND PROCEDURAL BACKGROUND


A.

The iSqFt Corporate Family

iSqFt is a software-as-a-service company that licenses access to its construction software


and databases to general contractors, subcontractors, manufacturers, and suppliers in the North
American commercial construction industry. The Complaint alleges that iSqFt acquired
BidClerk in October 2014, CDC in April 2015, and CMD in August 2015. Compl. 2, 43-44.
Dodge alleges that iSqFt, BidClerk, CDC and CMD are now combined into a single entity.
Id. 46. These mergers have enabled iSqFt to offer a broader and richer platform of products
and services, of which only the former CMD business is alleged to be a significant competitor
for Dodges nationwide CPI customers. Id. 44.1
B.

The Alleged Market for Nationwide CPI

It is not entirely clear what product market Dodge is alleging. According to the
Complaint, Dodge provides construction project information or CPI to construction
professionals. Compl. 20. Dodge initially defines construction project information to
consist of construction project information [thus circularly defining it to mean itself], building
product information, construction plans and specifications, industry news, market research, and
1

Notably, the Complaint describes these acquisitions in non-chronological order. Later


in the Complaint, Dodge alleges that iSqFt also attempted a merger or acquisition of Dodge,
but was unable to acquire Dodge. Compl. 45. The Complaint conspicuously omits any facts
about the timing of this alleged offer to purchase Dodge because Dodge was bid out and sold to
its current owner before iSqFt allegedly acquired CMD. The Complaint also omits the fact that
Dodge itself attempted to obtain CMD, but lost out in the bidding.

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industry trends and forecasts. Id. However, two sentences later, Dodge claims that its product
is limited to construction plans and specifications thus excluding building product
information, industry news, market research, and industry trends and forecasts. Id. 22. Dodge
further alleges that its customers consist of building product manufacturers (BPMs) again,
omitting a huge number of other customers for Dodges and iSqFts data, such as general
contractors and subcontractors. Id. 27.
Dodge admits that costs in the alleged market are almost entirely fixed, not variable.
Specifically, the Complaint alleges that Dodge employs a nationwide network of individuals
who develop relationships with architects, project owners, and other construction industry
professionals in order to obtain construction plans and specifications from them. Compl. 23.
After it has collected the plans and specifications from its network of sources, Dodge then
reviews and processes the plans and specifications so that they can be presented to customers.
Id. 24. According to Dodge, its efforts to gather and process data to be included in its database
process have been labor intensive, requiring considerable up-front costs in developing,
maintaining, and delivering its product to its customers. Id. 25. However, Dodge alleges that
this process has subsequently become more automated, and thus far less costly. Id. 24.
CPI is sold to customers through web-based programs accessed by those customers who
pay a subscription fee. Compl. 24. Dodge admits that the price of a subscription is based, not
on the marginal cost of providing it, but on other factors: The price of that subscription would
depend upon the level of detail and geographical area in which the contractor was interested, as
well as the number of licenses purchased by the contractor. Id. 26. Indeed, Dodge does not
allege that it incurs any variable costs which makes sense, because the marginal cost of adding

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a new subscriber to an existing database is essentially zero, and the cost of setting up a database
would be the same whether it has 100 subscribers or 100,000.
Dodge alleges that it primarily competes with CMD and that, [l]ike Dodge, CMD has an
extensive network of employees or contractors who are responsible for obtaining specifications
and plans from architects, project owners, and others in the industry. And, like Dodge, it
provides those plans and specifications to its customers through a web-based subscription
service. Compl. 31. Dodge does not allege that CMD or iSqFt incur any variable costs
associated with these web-based subscription services. Id.
The Complaint contains a table comparing Dodges prices to CMDs prices, claiming that
CMD offered prices for certain products that were as much as 80 percent lower than the prices
offered by Dodge. Compl. 56. But Dodge fails to plead any data or other facts comparing
CMDs prices to CMDs costs with respect to those products. Furthermore, the Complaint
concedes that these offers by CMD occurred before iSqFt acquired CMD, as Dodge alleges that
it started losing those customers to CMD since November 2014, ten months before iSqFt
announced the CMD merger in August 2015. See Compl. 44, 58. Notably, the Complaint
says nothing about iSqFts current prices or costs.
Dodge does not allege that it is unable to compete profitably with iSqFts current prices
(or, for that matter, CMDs earlier price quotes). It only vaguely alleges that it lost millions of
dollars in annual sales to CMD and hundreds of thousands of dollars more in price
erosion i.e., having to lower its prices to more competitive levels instead of continuing to
charge supra-competitive prices since November 2014. Compl. 58.

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C.

Prior Litigation Involving Dodge and CMD

In 2009, Reed Construction Data (which was subsequently purchased by CMD) sued
Dodge (then a division of McGraw Hill) alleging, inter alia, fraud and misappropriation of trade
secrets. Dodges predecessor, McGraw Hill, filed a counterclaim, also alleging misappropriation
of trade secrets, among other things. That counterclaim alleged the exact same misappropriation
theory Dodge alleges here: that two former employees allegedly took customer information with
them when they went to work for Reed. Compl. 37; Order and Judgment, Reed Construction
Data, Inc. v. The McGraw-Hill Companies, Inc., S.D.N.Y. Case No. 09-8578, ECF Docket
No. 220, at 2.
McGraw Hills counterclaims were dismissed without prejudice after partial summary
judgment was entered on certain other claims. Id. An appeal is pending in the Second Circuit.
Dodge admits that McGraw Hill retained the misappropriation counterclaim when it sold
Dodge to its current owners. Compl. 39. Yet Dodge tries to make the same claim here,
disguised as other claims, notwithstanding its admission that it does not own that claim.
III.

DODGE HAS FAILED TO PLEAD A VALID ANTITRUST CLAIM


The Complaint contains three antitrust claims. In its First Claim for Relief, Dodge asserts

that iSqFt is attempting to monopolize the supposed market for nationwide CPI. In its Second
and Third Claims for Relief, Dodge claims that the combined iSqFt entity somehow conspired
with itself to accomplish that end. All of these claims should be dismissed.
A.

Legal Standards

The Supreme Court has cautioned district courts not to simply rubber-stamp antitrust
claims, given the substantial burden and expense of discovery in such cases. Bell Atl. Corp. v.
Twombly, 550 U.S. 544, 557-560 (2007). Twombly counsel[s] against sending the parties into

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discovery when there is no reasonable likelihood that the plaintiffs can construct a claim from
the events related in the complaint. Id. at 558; accord Mich. Div.-Monument Builders of N.
Am. v. Mich. Cemetery Assoc., 524 F.3d 726, 731 (6th Cir. 2008).
To survive a motion to dismiss, a plaintiff must allege facts sufficient to raise a right to
relief above the speculative level. Twombly, 550 U.S. at 555. In determining whether a
plaintiff has alleged enough facts to state a claim to relief that is plausible on its face,
Twombly, 550 U.S. at 570, a court need not accept legal conclusions or unwarranted factual
inferences. Total Benefits, 552 F.3d at 434. A plaintiff cannot survive a motion to dismiss by
relying on mere labels and conclusions, and a formulaic recitation of the elements of a cause
of action will not do. Twombly, 550 U.S. at 555; Crane & Shovel Sales Corp. v. Bucyrus-Erie
Co., 854 F.2d 802, 805 (6th Cir. 1988) (insufficient simply to assert the elements of an antitrust
claim in conclusory and unsupported terms).
B.

Dodge Fails To Allege Antitrust Injury.

The Supreme Court has long held that antitrust plaintiffs must prove not just any injury,
but antitrust injury i.e., an injury of the sort the antitrust laws are intended to avoid because
the antitrust laws are intended to protect competition, not competitors. Brown Shoe Co. v.
U.S., 370 U.S. 294, 320 (1962); Brunswick, 429 U.S. at 488; Cargill, Inc. v. Monfort of Colo.,
Inc., 479 U.S. 104, 110 (1986). The Sixth Circuit requires this pleading-stage inquiry into the
plaintiffs standing to bring an antitrust claim, holding that we must reject claims under Rule
12(b)(6) when antitrust standing is missing. NicSand, 507 F.3d at 449-450.
As the Sixth Circuit cautioned in its en banc decision in NicSand, antitrust standing is
the glue that cements each suit with the purposes of the antitrust laws, and prevents abuses of
those laws by claimants seeking to halt the strategic behavior of rivals that increases, rather than

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reduces, competition. 507 F.3d at 449-50 (quotations and citation omitted). The antitrust injury
requirement means that one competitor may not use the antitrust laws to sue a rival merely for
vigorous or intensified competition. Id. at 450 (emphasis added). The Sixth Circuit has been
reasonably aggressive in using the antitrust injury doctrine to bar recovery where the asserted
injury . . . flows directly from conduct that is not itself an antitrust violation. Valley Products
Co., Inc. v. Landmark, 128 F.3d 398, 403 (6th Cir. 1997) (affirming dismissal).
The antitrust injury doctrine arose in cases very much like this one, in which a firm
complained that a significant rival had emerged as a result of mergers or acquisitions, and that
the firm was forced to lower prices in order to compete with that rival. In Brunswick, the
plaintiff owner of a bowling alley challenged Brunswicks acquisition of competing bowling
alleys, complaining that it would force the plaintiff to lower prices to compete. 429 U.S. at 481.
The Supreme Court held that this did not constitute injury of the type the antitrust laws were
intended to prevent and that flows from that which makes defendants acts unlawful. Id. at 489.
In Cargill, the Supreme Court rejected the plaintiffs argument that a merger would give the
resulting dominant firm the ability to dominate the market by driving down prices and driving up
costs, holding that:
The kind of competition that [plaintiff] alleges here, competition for increased
market share, is not activity forbidden by the antitrust laws. It is simply . . .
vigorous competition. To hold that the antitrust laws protect competitors from the
loss of profits due to such price competition would, in effect, render illegal any
decision by a firm to cut prices in order to increase market share.
479 U.S. at 116.
Here, Dodge, like the plaintiffs in Brunswick and Cargill, alleges that it has been forced
to lower its prices what Dodge calls price erosion to match the more competitive prices
offered by its rival. Compl. 58. But what Dodge is alleging is intensified competition, not an
injury to competition. Though Dodge claims that it lost customers and profits as a result of this

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competition, that is not an antitrust injury. Companies have no statutory right to compete in the
economic marketplace on their own terms and in such a manner as to accumulate expected
profits. Indeck Energy Servs. v. Consumers Energy Co., 250 F.3d 972, 978-79 (6th Cir. 2000).
We address Dodges woefully inadequate predatory pricing allegations in more detail in
the next section, but we note here that Dodge does not claim it is unable to compete with the
lower prices allegedly being offered by iSqFt. On the contrary, Dodge admits that it was able to
discount its prices to avoid losing sales. Compl. 58.2 Dodge does not allege that lowering its
prices made its business unprofitable; it merely alleges that its profits were reduced by a few
hundred thousand dollars. Id. This is not an injury to competition.
Nor can Dodge claim injury to competition simply as a result of the alleged mergers.
Dodge alleges that the end result of iSqFts acquisition of CMD, BidClerk and CMD was a
marketplace that consists of essentially two competitors for nationwide CPI customers, each
with roughly a 50% market share. Compl. 46, 53. But Dodge concedes that this has been the
market equilibrium for a century: For most of the last one hundred years, the market for
nationwide CPI has been a one- or two-player market. Compl. 40. All that occurred here,
according to Dodge, is that the market simply reverted to this two-firm equilibrium, rather than
Dodge remaining the single dominant firm. As alleged, this was a pro-competitive
development.3

Dodge lists a handful of anonymous customers to whom CMD, before it merged with
iSqFt, offered significantly better pricing than what Dodge was being paid. Compl. 56. But
Dodge does not allege that it actually lost those specific customers.
3

Dodge does not even attempt to allege antitrust injury in connection with its trademark,
misappropriation and restrictive covenant allegations. Dodge does not and cannot allege that it
lost a single prospective customer or employee in connection with these claims.

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C.

Dodge Fails To Plead Attempted Monopolization.

[T]o plead a claim for attempted monopolization . . ., a plaintiff must establish three
elements: (1) that the defendant has engaged in predatory or anticompetitive conduct with (2) a
specific intent to monopolize and (3) a dangerous probability of achieving monopoly power.
Scooter Store, Inc. v. SpinLife.com, LLC, 777 F. Supp. 2d 1102, 1115 (S.D. Ohio 2011) (quoting
Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456 (1993)). Failure to allege any one of
these three elements warrants dismissal; Dodges Complaint fails as to all three.
1.

Dodge Does Not and Cannot Allege Predatory Pricing.

[P]redatory pricing schemes are rarely tried, and even more rarely successful.
Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 589 (1986). [C]utting prices
in order to increase business often is the very essence of competition. Id. at 594; NicSand, 507
F.3d at 452 (same). The Supreme Court therefore cautions that the costs of an erroneous
finding of liability are high and that mistaken findings of liability would chill the very conduct
the antitrust laws are designed to protect. Brooke Group Ltd. v. Brown & Williamson Tobacco
Corp., 509 U.S. 209, 226 (1993) (quotations omitted).
Given the inherent dubiousness of a sellers claim that its rivals prices are too low, the
Supreme Court has mandated a stringent two-part test for a predatory pricing claim. First, a
plaintiff seeking to establish competitive injury resulting from a rivals low prices must prove
that the prices complained of are below an appropriate measure of its rivals costs. Brooke, 509
U.S. 209 at 222. Second, a plaintiff must also demonstrate that its rival has a dangerous
probability of recouping its investment in below-cost prices. Id. at 224. The Complaint flunks
both parts of this test.

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(a)

Dodge Does Not Plead Facts Showing Below-Cost Pricing

In the Sixth Circuit, to plead a prima facie case for predatory pricing, a plaintiff must
allege facts showing the defendant priced below its average variable (or marginal) cost. Spirit
Airlines v. Nw. Airlines, Inc., 431 F.3d 917, 938 (6th Cir. 2005).4 Dodge not only fails to plead
facts showing that iSqFt is currently pricing below its average variable cost, its admissions in its
own complaint actually show the opposite: that the market for nationwide CPI is a fixed-cost
business with little or no variable costs.
Dodge incurs costs from obtaining the plans and processing them for placement in
Dodges services. Compl. 25. After the plans are processed, Dodge publishes the CPI to its
customers. Id. 24. As pleaded, publication of this data is essentially costless, as customers
can access the plans and specifications themselves upon buying a subscription. Id. The price
of that subscription is based, not on the variable cost of the subscription (which is effectively
zero), but instead upon the level of detail and geographical area in which the contractor was
interested, as well as the number of licenses purchased by the contractor. Id. 29.
In the face of these admissions, Dodge simply asserts that [b]ased upon Dodges own
price structure, the prices offered by iSqFt/CMD to the customers outlined above, as well as
numerous other customers, are so low that they are below defendants average total cost and
average variable cost and thus constitute predatory pricing as a matter of law. Compl. 59.
But this assertion is contradicted by Dodges own admissions about the cost structure in the
industry, which shows that variable costs are de minimis. Supra at 4. Dodge is bound by its own
admissions in the Complaint. NicSand, 507 F.3d at 458.

In circumstances when prices are below average total cost but above average variable
cost, a plaintiff bears a heightened burden to plead additional facts showing that the pricing was
predatory. Id. Dodge alleges no such additional facts here, nor could it.

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Even apart from those fatal admissions, Dodges naked assertion of below-cost pricing,
without any supporting facts, is exactly the sort of formulaic recitation of the elements of a
cause of action that the Supreme Court has held will not do. Twombly, 550 U.S. at 555. In
Astra Media Grp., LLC v. Clear Channel Taxi Media, LLC, 679 F. Supp. 2d 413 (S.D.N.Y.
2009), affd in part, vacated in part, remanded, 414 F. Appx 334 (2d Cir. 2011), the plaintiff, a
rooftop taxicab advertising company, sued Clear Channel for predatory pricing, alleging that it
charged below the prevailing industry standard of cost for advertising rates. Id. at 425. The
court held that this did not state a claim because the plaintiff failed to provide any information
about the cost of the advertising to the defendant. Id.
Thus, it is the defendants costs that are relevant to the inquiry not the plaintiffs.
Brooke, 509 U.S. at 226; Affinity LLC v. GfK Mediamark Research & Intelligence, LLC, 547 F.
Appx 54, 56 (2d Cir. 2013) (finding that complaint failed to state a claim where complaint
alleged costs were below plaintiffs costs, not defendants, without providing facts to support the
inference). Dodges admission that its below-cost pricing theory is solely [b]ased upon
Dodges own price structure, and not on any information about iSqFts actual costs, is therefore
fatal to its claim. Compl. 59. Dodge does not allege iSqFts cost structure, let alone that its
prices are insufficient to recover its marginal (or average variable) costs. Nor does Dodge allege
that iSqFts total sales are insufficient to recoup its fixed costs.
In addition to alleging zero facts regarding iSqFts costs, the Complaint also says nothing
about iSqFts current prices. In a table found at paragraph 56 of the Complaint, Dodge merely
describes a handful of instances in which CMD when it was a smaller company, before it
merged with iSqFt previously beat Dodges prices. It does not show whether iSqFt continues
to offer prices at those levels following the merger. Even as to CMD, this table provides very

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little meaningful information. It only shows prices, without identifying the products, let alone
showing that CMDs products were comparable. It fails to provide dates or any other details. It
does not show how CMDs prices compared to CMDs costs. And it does not even show
whether Dodge lost those customers to CMD. In Midwest Auto Auction, Inc. v. McNeal, No. 1114562, 2012 WL 3478647, at *6 (E.D. Mich. Aug. 14, 2012) (same), the court rejected similar
allegations as containing too little specificity or factual support. Dodges claim here fails for
the same reason.
In sum, where the complaint itself gives reasons to doubt plaintiffs theory . . . it is not
[the courts] task to resuscitate the claim but to put it to rest. NicSand, 507 F.3d at 458 (quoting
Twombly, 550 U.S. at 568). Here, the Complaint provides plenty of reasons to doubt Dodges
predatory pricing claim, and this Court should therefore put [that claim] to rest now. Id.
(b)

Dodge Has Not Pled a Dangerous Probability Of


Recoupment.

Evidence of below-cost pricing is not alone sufficient to permit an inference of probable


recoupment and injury to competition. Brooke, 509 U.S. 209 at 226. As the Supreme Court has
explained, [w]ithout [a dangerous probability of recoupment], predatory pricing produces lower
aggregate prices in the market, and consumer welfare is enhanced. Id. at 224. To plead
recoupment, the Complaint must allege facts showing that below-cost pricing must be capable,
as a threshold matter, of producing the intended effects on the firms rivals, whether driving
them from the market or causing them to raise their prices to supracompetitive levels within a
disciplined oligopoly. Id. at 225. As the Supreme Court has explained, pleading the likely
success of the pricing scheme is crucial to the claim because unsuccessful predation is in
general a boon to consumers. Id. at 224.

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Dodges Complaint fails to plead that there was any possibility of recoupment, let alone
the required dangerous probability of recoupment. This is fatal to Dodges claim. Nowhere
in the Complaint does Dodge allege there is any risk, let alone a dangerous probability, that it
could be driven from the market. The closest it comes is an artfully worded hypothetical: if
Dodge were driven from the market for any reason, [then] iSqFt/CMD would have the ability to
charge supra-competitive prices to its customers. Compl. 54 (emphasis added). But Dodge
never claims it would be driven from the market by iSqFts prices; on the contrary, it admits it
has been able to lower its own prices to meet the alleged price competition. Id. 58. And in any
event, merely alleging the ability to recoup is insufficient Dodge must allege a dangerous
probability. See Energy Conversion Devices Liquidation Tr. ex rel. Madden v. Trina Solar Ltd.,
No. 13-14241, 2014 WL 5511517, at *6 (E.D. Mich. Oct. 31, 2014) (dismissing claim because
complaint merely states that, in light of Defendants 80% market share, Defendants have the
ability to raise prices) (emphasis in original).
In addition, Dodge destroys its own recoupment theory by pleading allegations showing
the absence of any meaningful barriers to market entry. As the Supreme Court explained in
Matsushita: without barriers to entry it would presumably be impossible to maintain
supracompetitive prices for an extended time, because new competition would undercut those
high prices. 475 U.S. at 591, n. 15. In Energy Conversion, 2014 WL 5511517 at *6, the court
dismissed a complaint containing admissions that competitors had recently entered the market,
reasoning that those admissions made it questionable whether Plaintiff has alleged any
probability of recoupment, let alone a dangerous probability.
Here, Dodge admits that [f]or most of the last one hundred years, the market for
nationwide CPI has been a one- or two-player market. However, starting several years ago,

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several smaller competitors began to emerge. Compl. 40 (emphasis added). One such
competitor was BidClerk, id., which, [b]eginning in or around 2012, established itself as an
effective and growing participant in the nationwide CPI market. Compl. 41. The Complaint
also alleges that by 2014 CDC had also become a small player in the market for nationwide
CPI. Compl. 42. This alleged evidence of repeated market entry disintegrates Dodges
recoupment theory. See Energy Conversion, 2014 WL 5511517 at *6.
Dodges sole basis for pleading barriers to entry is its claim that there are high fixed
costs. But the Sixth Circuit has held that, for a barrier to entry to be considered substantial,
there must be some structural aspect unique to the market aside from cost alone preventing
access to would-be competitors. See Spirit Airlines, 431 F.3d at 927 (finding that gate access to
airline terminals was a substantial barrier to market entry because it was not determined by
open competition). Dodge alleges no such structural impediment to entry here. Nor could it
according to Dodge, all it took for BidClerk to establish an effective and growing presence in
the alleged market was to hire two employees from a competitor. Compl. 41. The Complaint
also pleads facts explaining why new entrants costs of building a database will not be
prohibitive the previous labor intensive nature of both obtaining the plans and processing
data has given way to a more automated process. Compl. 24-25. Dodges own admissions
thus disprove a dangerous probability of recoupment or monopolization.
(c)

Plaintiff Alleges No Facts Concerning Predatory Intent.

The final blow to Dodges predatory pricing theory is the failure to allege any predatory
intent. This independently warrants dismissal. Richter Concrete Corp. v. Hilltop Concrete
Corp., 691 F.2d 818, 827 (6th Cir. 1982) (finding that failure to show predatory intent fatal to
antitrust action). The closest Dodges Complaint comes to alleging intent is half of a quote from

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CMDs president who is no longer with the company after the merger purportedly directing
sales staff to do whatever it takes to disrupt Dodges business. Compl. 55. Dodge omits
any information concerning the context surrounding this statement. Putting aside the fact that it
predates iSqFts acquisition of CMD, this statement is, at most, ambiguous. D.E. Rogers
Assocs., Inc. v. Gardner-Denver Co., 718 F.2d 1431, 1434-1436 (6th Cir. 1983) (finding colorful
statements made by defendant about plaintiff at best ambiguous). Dodges only other
mentions of intent are conclusory and unsupported by any facts (see Compl. 60, 92, 101),
and therefore cannot insulate the Complaint from dismissal. Twombly, 550 U.S. at 555 (labels
and conclusions are insufficient).
2.

Dodges Other Allegations Are Insufficient to Plead Attempted


Monopolization.
(a)

The Alleged Mergers Did Not Create A Dangerous Probability


of Monopolization.

Presumably as a fallback to its failed predatory pricing theory, Dodge also claims that
iSqFts mergers with CMD, CDC and BidClerk constitute anticompetitive acts purportedly
supporting its antitrust claims. Compl. 93, 103, 107.5 But as Brunswick and Cargill make
clear, there is nothing inherently anticompetitive about these mergers. And, as noted above,
Dodge concedes that these mergers resulted in much-needed price competition, which has
already benefited Dodges customers.

Although Dodge claims that iSqFt tried to acquire Dodge, the Complaint conspicuously
omits any dates. Compl. 45. This is because Dodges former owners put it up for bid before
iSqFt acquired BidClerk, CDC, or CMD. When the transactions are considered in the order that
they actually occurred, they show no dangerous probability of achieving monopoly power. The
Complaint also omits the fact Dodge also attempted to acquire CMD a merger that would,
according to the Complaint, have resulted in a company with nearly 100% market share. That
iSqFt won the bidding resulted in greater competition than the alternative.

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Dodge also fails to plead that iSqFt has a dangerous probability of achieving monopoly
power through its mergers and acquisitions. Dodge alleges that these combinations resulted in a
combined entity that possesses, at most, a 50% market share. Compl. 53. Fifty percent market
share is simply not enough. United States v. Empire Gas Corp., 537 F.2d 296, 306 (8th Cir.
1976) (50% market share insufficient to establish dangerous probability of success); Richter, 691
F.2d at 826 (following Empire Gas and finding that dangerous probability means a firm must
possess market strength that approaches monopoly power the ability to control prices and
exclude competition). At the very most, the Complaint shows that these combinations have
merely maintained the status quo: For most of the last one hundred years, the market for
nationwide CPI has been a one- or two-player market. Compl. 40. And, going from one
major player to two is a pro-competitive development.
(b)

Dodges Claim That CMD Used Dodges Trade Secrets Is


Insufficient To Plead Attempted Monopolization.

The Complaint claims that CMDs prior hiring of employees who possessed Dodges
confidential, trade secret information constitutes anticompetitive conduct under their
antitrust claims. Compl. 93. But this is a claim that Dodge no longer owns. As Dodge admits,
Dodge [when it was still a division of McGraw Hill] brought a counterclaim against CMD in
the 2009 Litigation, which McGraw Hill Dodges former owner retained when selling
Dodge to its current owners. Compl. 39 (emphasis added). Thus, Dodge does not even have
standing to pursue a claim based on that theory. See e.g. Sanford Inv. Co. v. Ahlstrom Mach.
Holdings, Inc., 198 F.3d 415, 425 (3 Cir. 1999) (affirming dismissal for lack of standing because
plaintiff completely assigned its right to enforce cause of action to third party); Cranpark, Inc. v.
Rogers Grp., Inc., No. 4:04CV1817, 2014 WL 3749401, at *5 (N.D. Ohio July 30, 2014)
(dismissing claim for lack of standing where plaintiff sold cause of action to third party through

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asset sale). Moreover, those claims have been dismissed and may be reinstated only if the
United States Court of Appeals for the Second Circuit, reverses, vacates, or remands in whole or
in part [its prior rulings on dispositive motions] and may be asserted only in this Court in
connection with this action, i.e., in the New York case. Order and Judgment at 2, Reed
Construction Data, Inc. v. The McGraw-Hill Companies, Inc., No. 09-8578, ECF No. 220
(S.D.N.Y. Oct. 20, 2014).6
Furthermore, Dodge does not because it cannot allege any specific facts showing that
iSqFt is currently using Dodges confidential information. Indeed, Dodge cannot even allege
that the two employees who left Dodge used this information during their tenures at Reed a
glaring omission in light of Dodges allegation that it already took discovery on this claim in the
prior litigation. See Compl. 35-39. Even if Dodge could plead that iSqFt is using Dodges
confidential information to compete against Dodge (in fact, it is not), that would still be
increased competition, and thus cannot be the basis for an antitrust claim. Id. 40.
(c)

Dodges Claims Regarding Trademarks and Restrictive


Covenants Are Irrelevant To Its Alleged Antitrust Claims.

Dodges trademark infringement claims, even if they had merit (and they do not, see infra
at 20), do not support its antitrust claims, because Dodge admits its marks are for products
outside the relevant market. Dodge admits that its Dodge BidPro product is a software
application and website service aimed at local and regional subcontractors not building
product manufacturers in the market for nationwide CPI. Compl. 27 & 74. Dodge also

Dodges misappropriation claim is also the basis for its cause of action for trespass to
chattels. For the reasons set forth herein, that claim should be dismissed too. Moreover, the
Complaint fails to allege any facts concerning physical damage resulting from the trespass, the
omission of which is fatal to the claim. Snap-on Bus. Sols. Inc. v. ONeil & Assocs., Inc., 708 F.
Supp. 2d 669, 679 (N.D. Ohio 2010) (noting that liability in cases dealing with electronic
trespasses to chattel still turned on physical harm to the plaintiffs servers or computers).

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admits that its Sweets catalog is distinct from the sale of nationwide CPI. Compl. 62 (In
addition to its production and sale of CPI, Dodge is the publisher of Sweets Catalog) (emphasis
added). As these products are in completely different markets than the market that is the subject
of the antitrust claims, they are irrelevant to those antitrust claims.
Likewise, Dodges allegations regarding iSqFts restrictive employment covenants relate
to the labor market for employees. Dodge does not even attempt to explain how these covenants
make it more likely that iSqFt could monopolize the alleged product market for nationwide
CPI. Moreover, as explained in Section VI, infra, these restrictive covenants are perfectly legal
and pro-competitive.
D.

Dodges Conspiracy Claims Fail Because iSqFt Cannot Conspire With Itself.

Dodges conspiracy claims are based on the same allegations as its failed attempted
monopolization claims, and should be dismissed for the same reasons. But they should also be
dismissed for another, independent reason: Dodge fails to plead a conspiracy.
In Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752, 777 (1984), the Supreme Court
held that a parent corporation and its wholly owned subsidiary are not legally capable of
conspiring with each other under the Sherman Act. Relying on Copperweld, the Sixth Circuit
has held that sister companies sharing the same corporate parent are likewise legally incapable of
such a conspiracy. Directory Sales Mgmt. Corp. v. Ohio Bell Tel. Co., 833 F.2d 606, 611 (6th
Cir. 1987) (We agree with the Fifth Circuit that Copperweld precludes a finding that two
wholly-owned sibling corporations can combine for the purposes of section 1.); Total Benefits,
552 F.3d at 435 (The Supreme Court has held that a parent company and its wholly owned
subsidiaries are incapable, as a matter of law, of conspiracy. This Court has expanded that
position to include sister companies with the same parent. (internal citations omitted)); see also

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Med. Ctr. at Elizabeth Place v. Premier Health Partners, No. 3:12-CV-26, 2014 WL 7739356,
at *2 (S.D. Ohio Oct. 20, 2014) (dismissing case pursuant to Copperweld doctrine).
The Complaint concedes that all four defendants are commonly owned and operated
within the combined iSqFt/CMD/BidClerk/CDC entity. Compl. 46. It therefore cannot
plead a conspiracy under Sections 1 or 2 of the Sherman Act. See Potters Med. Ctr. v. City
Hosp. Assn, 800 F.2d 568, 574 (6th Cir. 1986) (Because 2 conspiracy to monopolize claims
require proof of concerted activity, just as 1 conspiracy claims do, [t]he claim of a conspiracy
to monopolize fails for the same reason as did the appellants section 1 claims.).
IV.

DODGE FAILS TO PLEAD ANY VALID TRADEMARK-BASED CLAIMS.


The touchstone of liability [for trademark infringement] is whether the defendants use

of the disputed mark is likely to cause confusion among consumers regarding the origin of the
goods offered by the parties. Hensley Mfg. v. ProPride, Inc., 579 F.3d 603, 610 (6th Cir. 2009).
Here, Dodge does not and cannot allege any possible likelihood of confusion, because [t]he
degree of [dis]similarity . . . overwhelms any possibility of confusion. Le Book Pub., Inc. v.
Black Book Photography, Inc., 418 F. Supp. 2d 305, 311 (S.D.N.Y. 2005) (dismissing complaint
where plaintiff and defendants had obviously dissimilar marks). This analysis applies with
equal force to Dodges related unfair competition and trademark dilution claims. Champions
Golf Club, Inc. v. The Champions Golf Club, Inc., 78 F.3d 1111, 1123 (6th Cir. 1996) (As in an
action alleging infringement of a mark, likelihood of confusion is the essence of an unfair
competition claim.); Cesare v. Work, 520 N.E.2d 586, 589 (1987) (Where claims are made
under the Ohio common law and R.C. Chapter 4165, deceptive trade practices, Ohio courts are to
apply essentially the same analysis as that applied in assessing the law of unfair competition
under the federal statutes.).

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Dodge first contends that CDCs use of a dollar sign in a green circle on its website
infringes Dodges trademark, which consists of a white S inside a solid black circle. See
Compl. 65 & Ex. A. Dodge does not purport to own the trademark for the dollar sign nor
could it or for the use of green circles. Unsurprisingly, the Complaint contains no reference to
a single person who confused CDCs dollar sign with Dodges Sweets mark.
Dodges next contention, that CDCs Invitation To Bid Pro product infringes Dodges
BidPro mark, appears at first blush to be a closer call until one examines the Complaint
itself. First, Dodge only registered the mark Dodge BidPro, not BidPro. Dodge never
alleges that CDC uses the mark Dodge BidPro. It is only the word Dodge that arguably
makes Dodges mark distinctive a Google search of the term Bid Pro reveals a number of
different firms using the term Bid Pro in a variety of contexts. Indeed, the portion of the web
page submitted at paragraph 75 of the Complaint shows that Dodge never uses the term BidPro
in isolation it only uses Dodge BidPro. Second, it is clear from the descriptions in the
Complaint that CDCs product serves a different market than Dodges. Dodge BidPro is a
product for subcontractors to submit bids for work. CDCs Invitiation To Bid Pro is a product
for builders to solicit and receive bids from subcontractors. It is therefore not surprising that
Dodge fails once again to allege any examples of user confusion.
Accordingly, Dodge has failed to allege facts sufficient to state a claim for trademark
infringement. Likewise, Dodges related claims for unfair competition (Claims 5 and 9),
trademark dilution (Claim 6) and violations of the Ohio Deceptive Trade Practices Act (Claims 7
and 10) should also be dismissed.

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V.

DODGE FAILS TO STATE A CLAIM FOR TORTIOUS INTERFERENCE.


Dodge does not state a claim for tortious interference with business relationships because

it has failed to identify a single customer that it lost as a result of the purported interference.
This information is exclusively within the control of the Plaintiff and is an essential element to
its interference claim. Ginn v. Stonecreek Dental Care, 30 N.E.3d 1034, 1040 (Ohio Ct. App.
2015) (directed verdict was proper as a result of plaintiffs failure to identif[y] anyone with
whom [plaintiff] had a business relationship or prospective contractual relationship with which
[defendant] intentionally interfered.). This cause of action merely contains the sort of
formulaic recitation of the elements that simply will not do. Twombly, 550 U.S. at 555.
Further, Dodges attempt to base its tortious interference claim on its below-cost pricing
theory is an independent basis to reject the claim. As explained by the jurisdictions that have
analyzed this issue, below-cost pricing by a single defendant is not improper in the absence of
some other unlawful element and, thus, is not encompassed by the tort of intentional interference
with business relations. U.S. Anchor Mfg., Inc. v. Rule Indus., Inc., 264 Ga. 295, 298 (1994)
(emphasis in original); accord Ideal Dairy Farms, Inc. v. Farmland Dairy Farms, Inc., 659 A.2d
904, 936 (N.J. Super. Ct. App. Div. 1995).
VI.

DODGE FAILS TO STATE A VALID DECLARATORY RELIEF CLAIM


Dodges Thirteenth Claim For Relief, for declaratory judgment that iSqFts restrictive

covenants are invalid, should be dismissed for two reasons. First, iSqFts restrictive covenants
are legal and enforceable in each state in which they are consummated: Ohio; Florida; Georgia;
and Illinois. See Atl. Tool Die v. Kacic, No. 2717-M, 1998 Ohio App. LEXIS 5485, *4 (Ohio Ct.
App., Medina County Nov. 18, 1998) (It is beyond dispute that post-employment restrictive
covenants are generally enforceable in Ohio); see Fla. Stat. Ann. 542.33; see also Fla.

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Hematology & Oncology Specialists v. Tummala, 969 So. 2d 316, 317 (Fla. 2007); Ga. Code
Ann. 13-8-50 (reasonable restrictive covenants . . . serve the legitimate purpose of protecting
legitimate business interests and creating an environment that is favorable to attracting
commercial enterprises to Georgia . . . .); see Reliable Fire Equip. Co. v. Arredondo, 965
N.E.2d 393, 396 (Ill. 2011). Accordingly, Dodges claim that iSqFts restrictive covenants are
illegal is, as a matter of law, wrong.
Second, Dodges claim is based on a hypothetical set of facts, and therefore is not
appropriate for declaratory relief. As a threshold matter, for a court to issue a declaratory
judgment, there must be a justiciable controversy, meaning the controversy must be such that it
can presently be litigated and decided not hypothetical, conjectural, or based upon the
possibility of a factual situation that may never develop. 28 U.S.C. 2201; Stotts v. Pierson, 976
F. Supp. 2d 948, 974 (S.D. Ohio 2013). Justiciability forecloses the issuance of advisory
decree[s] upon a hypothetical state of facts. Ashwander v. Tenn. Valley Auth., 297 U.S. 288,
325 (1936). But that is exactly what Dodge seeks here.
Dodges allegations regarding the restrictive covenants mention only what,
hypothetically, might happen if it were to hire a former iSqFt employee. Compl. 84-88.
Plaintiff references a letter sent on behalf of iSqFt advising Dodge of its restrictive covenants.
Compl. Ex. C. But the letter simply advised Dodge that iSqFts former employees may not
solicit iSqFts customers and employees. It did not claim that any former employee had done so.
It did not threaten litigation for any such solicitation, let alone for Dodge simply hiring an
employee. This does not rise to an actual, live controversy. The declaratory judgment claim
must be dismissed as no justiciable dispute exists.

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VII.

LEAVE TO AMEND SHOULD BE DENIED


As set forth above, Dodges own allegations and admissions are fatal to its claims, and in

particular its antitrust claims, and those fatal flaws cannot be remedied by amendment.
Accordingly, those claims should be dismissed with prejudice and without leave to amend.
Arnold v. Petland, Inc., No. 2:07-CV-01307, 2009 WL 816327, at *11 (S.D. Ohio Mar. 26,
2009) (dismissing antitrust claims with prejudice for failure to state a claim).
VIII. CONCLUSION
For the foregoing reasons, Defendants respectfully request that this court dismiss the
Complaint with prejudice for failure to state a claim upon which relief may be granted.
Dated: January 5, 2016

By: /s/ Mark C. Bissinger


Mark C. Bissinger (0012738)
Mark A. VanderLaan (0013297)
Thomas M. Connor (0082462)
DINSMORE & STOHL
255 E. 5th St.
1900 Chemed Center
Cincinnati, OH 45202
Telephone: (513) 977-8200
Fax: (513) 977-8141
Email: mark.bissinger@dinsmore.com
mark.vanderlaan@dinsmore.com
thomas.connor@dinsmore.com
Charles E. Elder (admitted pro hac vice)
Curt K. Brown (admitted pro hac vice)
IRELL & MANELLA LLP
1800 Ave. of the Stars
Los Angeles CA, 90067
Telephone: (310) 277-1010
Email: celder@irell.com
cbrown@irell.com
Counsel for Defendants
iSqFt, Inc., Construction Market Data
Group, LLC, Construction Data
Corporation, LLC, and BidClerk, Inc.

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CERTIFICATE OF SERVICE
I hereby certify that on January 5, 2016, I electronically filed the foregoing using the CM/ECF
system, which will send notification of such filing to the following:
Russell S. Sayre
Mark T. Hayden
Aaron M. Herzig
TAFT STETTINIUS & HOLLISTER LLP
425 Walnut Street, Suite 1800
Cincinnati, Ohio 45202-3957
Telephone: (513)381-2838
Email: sayre@taftlaw.com
mhayden@taftlaw.com
aherzig@taftlaw.com

Stuart I. Friedman
Paul S. Grossman
Johnathan D. Daugherty
FRIEDMAN & WITTENSTEIN
600 Lexington Avenue
New York, New York 1002
Telephone: (212) 750-8700
Email: sfriedman@friedmanwittenstein.com
pgrossman@friedmanwittenstein.com
jdaugherty@friedmanwittenstein.com

Dated: January 5, 2016

By: /s/ Mark C. Bissinger


An attorney for Defendants iSqFt, Inc.,
Construction Market Data Group, LLC,
Construction Data Corporation, LLC, and
BidClerk, Inc.

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