This morning the Federal Circuit issued one nonprecedential opinion in an antitrust case and one nonprecedential Rule 36 judgment. Here is the introduction to the opinion and the judgment.

Power Analytics Corp. v. Operation Technology, Inc. (Nonprecedential)

As courts have regularly maintained, the allegations set forth in a complaint may not simply recite the elements of a cause of action. A plausible “short and plain” statement of the plaintiff’s claim, pursuant to Federal Rule of Civil Procedure 8(a)(2), must contain putative facts that provide fair notice and show that the plaintiff is entitled to relief. Skinner v. Switzer, 562 U.S. 521 (2011). Although we accept such factual allegations as true at the motion to dismiss stage, the complainant “must plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011).

The “practical significance” of Rule 8 rings especially true in antitrust cases. Bell Atlantic Corp. v. Twombly 550 U.S. 544, 557–58 (2007) (quoting Dura Pharms., Inc. v. Broudo, 544 U.S. 336, 347 (2005)). In such cases, district courts properly insist on some specificity to relieve parties of “the potentially enormous expense of discovery in cases with no reasonably founded hope that the discovery process will reveal relevant evidence to support a [Sherman Act] claim.” Id. at 559–60 (internal citations omitted). That is what the district court did in this case.

With the patience of a first grader’s piano teacher, the district court detailed the requirements of Sherman Act §§ 1 and 2 violations, explained why the allegations failed to establish anticompetitive conduct, and dismissed Power Analytics’ multiple amended complaints without prejudice, providing the plaintiff with an opportunity to shore up such deficiencies. Despite the advantage of developed discovery and three bites at the Rule 8 apple, Power Analytics never provided a plausible statement of relief. Instead, it announced during the last motion to dismiss hearing that the district court had misconstrued its § 1 claim as alleging “exclusive dealing arrangements” as opposed to concerted “refusals to deal,” and demanded a favorable outcome on this new basis. Power Analytics Corp. v. Operation Tech., Inc., et al., Case No. 16-01955, 2018 WL 10231437, at *1 n.1 (C.D. Cal. July 24, 2018). Declining to address the new, unbriefed theory, the district court dismissed the complaint as deficient, once again without prejudice, allowing Power Analytics to advance its new theory with proper briefing. Rather than accept the district court’s generous offer to amend its complaint for a fourth time, Power Analytics took this appeal, and now maintains that the district court’s entire analysis under § 1 is “irrelevant” here. It asks that we do what it did not give the district court an opportunity to do: evaluate its § 1 claim under a refusal to deal theory. We will not do that.

Because we find that Power Analytics has waived its § 1 argument and agree with the district court’s conclusions regarding § 2 and the attendant state law claims, we conclude that Power Analytics’ third amended complaint fails to state a claim for which relief may be granted. We affirm.

Moore, Circuit Judge, concurring in judgment.

I concur in the court’s conclusion that Power Analytics waived its refusal to deal argument, but would find this waiver alone sufficient to resolve Power Analytics’ Section 1 and Section 2 antitrust claims on appeal.

Rule 36 Judgment