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Banxcorp v. Lendingtree LLC

February 7, 2011

BANXCORP, PLAINTIFF,
v.
LENDINGTREE LLC, DOW JONES & COMPANY, INC.,
THE NEW YORK TIMES COMPNY, CNBC, INC., CABLE NEWS NETWORK, INC., MSNBC INTERACTIVE NEWS, LLC, FOX NEWS NETWORK, LLC, AOL INC., AND MOVE, INC.,
DEFENDANTS.



The opinion of the court was delivered by: Wigenton, District Judge.

OPINION

Before the Court are Defendants, Dow Jones & Company, Inc., The New York Times Company, CNBC Inc., Cable News Network, Inc., MSNBC Interactive News, LLC, Fox News Network, LLC, AOL Inc., Move, Inc., (collectively "Media Defendants") and LendingTree LLC's ("LendingTree") (collectively "Defendants") Motions to Dismiss ("Motions") Plaintiff, BanxCorp's ("BanxCorp" or "Plaintiff") First Amended Complaint ("FAC") for failure to state a claim upon which relief may be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). This Court has jurisdiction under 15 U.S.C. §§ 1 and 26, and 28 U.S.C. §§ 1331, 1337, and 1367. Venue is proper pursuant to 28 U.S.C. § 1391(b) and (c), and 15 U.S.C. §§ 15 and 22. The Motions are decided without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons stated below, this Court denies Defendant, LendingTree Motion and grants the Motion of the Media Defendants.

FACTUAL AND PROCEDURAL HISTORY

BanxCorp is a provider of bank rate tables listing interest rates from financial institutions. LendingTree is a mortgage lead aggregator that provides information on "mortgages and refinance loans, home equity loans/lines of credit, auto loans, personal loans, credit cards and high-yield savings accounts online." (Pl.'s Ex. E at 2.) The Media Defendants operate websites that display online bank rate tables "and related hyperlinks." (Media Defs.' Br. 8.) Bankrate, Inc.,*fn1 ("Bankrate") aggregates and supplies the bank rate listings for both LendingTree and the Media Defendants. (Pl.'s Ex. E at 2.)

BanxCorp filed a two count complaint against Defendants alleging: (1) illegal restraint of trade in violation of § 1 of the Sherman Act, 15 U.S.C. § 1, and (2) conspiracy in restraint of trade in violation of § 56:9-3 of the New Jersey Antitrust Act, N.J. Stat. Ann. § 56:9-1 et seq. (West 2001) (First Am. Compl. ¶¶ 109-119) (hereinafter "Am. Compl."). The specific anticompetitive practices asserted in the complaint include: "per se horizontal market division and customer allocation agreements, and per se horizontal price fixing agreements with one or more competitors." (Id. at ¶¶ 110, 116.)

Defendants subsequently filed these Motions pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief can be granted. LendingTree asserts that Plaintiff lacks antitrust standing and has failed to adequately plead: (1) a horizontal conspiracy in restraint of trade, and (2) a plausible relevant market. (LendingTree Br. 6, 14, 21.) Similarly, the Media Defendants maintain that BanxCorp lacks standing and has failed to state a claim against any of them because: (1) it has not alleged any facts particular to the Media Defendants, and (2) their vertical agreements with Bankrate cannot be considered per se illegal. (Media Defs.' Br. 12, 25, 32.)

LEGAL STANDARD

The adequacy of pleadings is governed by Fed. R. Civ. P. 8(a)(2), which requires that a complaint allege "a short and plain statement of the claim showing that the pleader is entitled to relief." See also Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir. 2008) (stating that Rule 8 "requires a 'showing' rather than a blanket assertion of an entitlement to relief."). In considering a Motion to Dismiss under Fed. R. Civ. P. 12(b)(6), the Court must "'accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief."' Phillips, 515 F.3d at 231 (quoting Pinker v. Roche Holding Ltd.,292 F.3d 361, 374 n.7 (3d Cir. 2002)). However, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)) ("Twombly"). As the Supreme Court has explained:

To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to "state a claim to relief that is plausible on its face." A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a "probability requirement," but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are "merely consistent with" a defendant's liability, it "stops short of the line between possibility and plausibility of 'entitlement to relief.'"

Iqbal, 129 S. Ct. at 1949 (quoting Twombly, 550 U.S. at 556--57) (internal citations omitted). Determining whether the allegations in a complaint are "plausible" is "a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Iqbal, 129 S. Ct. at 1950. If the "well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct," the complaint should be dismissed for failing to "show[] that the pleader is entitled to relief" as required by Rule 8(a)(2). Id.

Although the Third Circuit has instructed that antitrust complaints should be liberally construed, Commonwealth of Pa. ex. rel. Zimmerman v. PepsiCo, Inc., 836 F.2d 173, 179 (3d Cir. 1988) (quoting Knuth v. Erie-Crawford Diary Coop, 395 F.2d 420, 423 (3d Cir. 1968), cert. denied, 410 U.S. 913 (1973)), "they [are not] exempt from the federal rules." Commonwealth of Pa. ex. rel. Zimmerman, 836 F.2d at 179 (quoting Sims v. Mack Truck Corp., 488 F.Supp. 592, 608 (E.D. Pa. 1980)). According to the Supreme Court in Twombly "[w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his[/her] 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." 550 U.S. at 555 (internal citations omitted). Furthermore, the "[f]actual allegations must be enough to raise a right to relief above the speculative level." Id. The Court then held that an antitrust complaint must plead "enough factual matter (taken as true) to suggest that an agreement was made. 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." Id. at 556. The Third Circuit summarized the Twombly pleading standard as follows: "'stating . . . a claim requires a complaint with enough factual matter (taken as a whole) to suggest' the required element." Phillips, 515 F.3d at 234 (quoting Twombly, 550 U.S. at 556).

DISCUSSION

LendingTree moves to dismiss BanxCorp's claims for violation of § 1 of the Sherman Act and NJ. Stat. Ann § 56:9-3, the New Jersey Antitrust Act. LendingTree argues that Plaintiff lacks standing to bring this antitrust suit. Additionally, LendingTree asserts that Plaintiff has failed to allege sufficient facts to support its horizontal conspiracy claims and that BanxCorp relies on a relevant market definition that is facially implausible and contradictory.

Similarly, the Media Defendants who have also moved to dismiss BanxCorp's claims maintain that their motion should be granted because Plaintiff lacks standing. Furthermore, they argue that Plaintiff's allegations are vague and conclusory because there is no allegation made against any specific Media Defendant. Finally, the Media Defendants assert that ...


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