ROBERT N. SCOLA, JR., District Judge.
This is primarily an antitrust case. Plaintiff Duty Free Americas, Inc. (DFA) operates duty-free stores in airports and one of the main products it carries is beauty products. Defendant The Estee Lauder Companies, Inc. (ELC) supplies many duty-free stores with its beauty products, but it no longer deals with DFA. DFA alleges that ELC attempted to monopolize the market for beauty products in duty-free stores in violation of § 2 of the Sherman Act, 15 U.S.C. § 2; that ELC conspired with DFA's competitors to (a) exclude DFA from that market, (b) exclude DFA from the market consisting of the bid process by which duty-free operators obtain concessions from airports to operate duty-free stores, and (c) monopolize the beauty-product market in duty-free stores — all in violation of § 1 of the Sherman Act, 15 U.S.C. § 1; and finally, DFA alleges that ELC tortiously interfered with its business relationships with three airports under Florida law. ELC moved to dismiss all these claims for failure to state a valid claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure. (DE 20.) For the reasons set forth below, the Court
Most international travelers are familiar with duty-free stores. They are retail outlets located in airports' (and seaports') international terminals, typically offering a distinct assortment of luxury goods — like alcohol, jewelry, and beauty products — to outbound international travelers. "Duty-free" stores get their name from the fact that their customers do not pay certain sales taxes or import duties on purchases in their stores. This gives them a reputation for offering luxury goods at lower prices and on favorable terms. And it is this perception that drives consumer demand.
ELC is the largest manufacturer of beauty products
DFA is one of fewer than ten major duty-free store operators in the U.S. It currently operates duty-free stores in JFK, LaGuardia, Detroit, Dulles, Miami, Boston, Baltimore (BWI), Charlotte, Salt Lake City, San Antonio, Phoenix, and Reagan National international airports. DFA is a self-described "maverick" in the duty-free industry, particularly when it comes to its prices, product-displays, and beauty products brands. While most duty-free operators generally offer the same lineup of brands — which includes brands that compete with ELC — DFA also sells new and innovative brands (like Perry Ellis and Jennifer Aniston) that compete with the incumbent brands (like ELC's).
Duty-free operators, such as DFA, generally secure space to operate duty-free stores in a particular airport via a competitive bidding process initiated by a request for proposal (RFP). For example, an airport will generally issue an RFP to operate duty-free stores in its international terminals, typically for a term of five to ten years. Duty-free operators then submit proposals to the airport detailing certain information, such as the products they carry, and the amount of "rent" (typically a percentage of sales) they will pay to the airport in exchange for the duty-free concessions. With some exception, an airport generally awards all of its duty-free concessions to only one duty-free operator.
Before June 2008, DFA and ELC had a healthy business relationship. ELC would sell its beauty products to DFA at standard "travel retail" wholesale prices — which were lower than traditional retail wholesale prices — and DFA would then add a markup and retail the products in its stores across the U.S. During that time, ELC instructed DFA and its competitors (i.e., other duty-free operators) on what margins to take on the "travel retail" products sold in their stores. It also instructed them on the quality and quantity of display space to be allocated to its beauty products in their duty-free stores. DFA went along with these instructions from ELC.
In January 2007, ELC announced that "effective April 1, 2008[its] Travel Retail Suggested Price ... [would] change to U.S. Domestic Suggested Retail Price."
When DFA later learned that ELC had not raised its products price, DFA tried to resume purchasing ELC's beauty products. But this time ELC refused DFA's requests. So DFA began devoting the display space it had previously used for ELC's brands to introduce new beauty product brands in its duty-free stores, many of which had not been sold before in U.S. duty-free stores. For example, DFA introduced and developed a significant demand for a new beauty product brand — Smashbox. In 2010, however, ELC acquired Smashbox after obtaining antitrust regulatory approval for the deal. It then ceased supplying Smashbox to DFA. DFA has tried to negotiate future sales of Smashbox, but to no avail.
In December 2008, an RFP was issued to lease and develop duty-free concessions at Newark Liberty International Airport (Newark airport) for a new seven-year term. DFA and rival duty-free operators submitted bids. About three weeks later — before the identities of the bidders were made public — ELC's President of Travel Retailing Worldwide, Olivier Bottrie, sent an unsolicited letter to Ms. Judy Tuttle, the leasing agent who managed the RFP process for Newark and other airports. The letter highlighted and promoted ELC's authorized duty-free retail partners:
(DE 1-2 at 2.) DFA's bid was ultimately rejected.
Two and a half years later, in May 2011, an RFP was issued to lease and develop duty-free concessions at Boston Logan International Airport (Boston airport) for a new seven-year term. At that time, DFA had been the incumbent at Boston for the prior 16 years and had doubled sales during its tenure. DFA submitted a bid, along with two of its competitors: International Shoppes and Dufry. During the RFP process, ELC and its alleged coconspirators — "such as DFASS, Nuance, International Shoppes, and Travel Retail," (see id. at 23) — communicated with the decisionmakers in a manner similar to the letter ELC had sent during the Newark RFP. The decisionmakers responded by asking DFA about its ability to carry ELC's products. DFA's bid was ultimately rejected and one of its competitors was awarded the duty-free concessions.
Around the same time in mid-2011, an RFP was issued to lease and develop duty-free retail concessions at Orlando International Airport (Orlando airport). But this time DFA partnered with Stellar, a local company that operated duty-free stores at Tampa International Airport (Tampa), to submit a joint bid for the duty-free concessions at the Orlando airport. At that time, ELC was not selling its products to either DFA or Stellar. But for several years prior, ELC had sold its beauty products directly to Stellar and, later, indirectly through other wholesalers. ELC had also represented that it would resume selling to Stellar in two situations: if international enplanements increased to a certain level at Tampa, resulting in a larger duty-free store, or if Stellar were to be awarded the duty-free concession at a larger airport. Based on this representation, DFA and Stellar listed ELC's brands in their joint proposal for the Orlando duty-free concession. Two competing bidders — Nuance/DFASS or Travel Retail — informed ELC that DFA and Stellar were bidding on the concession.
Upon learning that the joint bid listed its brands, ELC and its alleged co-conspirators informed the Orlando decisionmakers (1) that ELC would not sell its products to DFA or Stellar; (2) that supply of its products was necessary for the duty-free store to succeed; and (3) that, consequently, awarding the concessions to DFA and Stellar would diminish duty-free sales in Orlando. ELC subsequently memorialized its refusals to deal in a letter to the Orlando decisionmakers, who ultimately rejected DFA and Stellar's joint bid. The decisionmakers instead provisionally awarded the concessions to Nuance/DFASS. When DFA appealed, it was informed that its inability to supply ELC's products was a central reason its joint bid had been rejected. (Id. at 11 (emphasis added).)
In July 2011, an RFP was issued to lease and redevelop duty-free retail concession at the Hartsfield-Jackson Atlanta International Airport ("Atlanta") for a seven-year term, with an option for a three-year renewal. The RFP was designed as a sealed RFP, meaning that the identities of the potential bidders would not be known until bids were submitted. DFA and three of its competitors (including Nuance) responded to the RFP before the October 1, 2011 deadline. On November 1, 2011, Adam Smith, the Chief Procurement Officer, notified the bidders that a recommendation of award would be made to DFA.
Seven weeks later, on December 22, 2011, Mr. Smith notified DFA that he had recently received information regarding DFA's participation in the Orlando RFP. He noted that, while DFA's proposal had identified 19 SKUs of ELC's products, he had been advised that DFA could not carry ELC's products. DFA confirmed that it could carry the products listed because DFA still had these 19 SKUs in its outstanding inventory. Shortly thereafter, the Atlanta City Council passed a resolution awarding the duty-free concessions to DFA.
Nuance subsequently sent a letter protesting the award to DFA, accusing DFA of intentionally making material representations during the RFP process. Nuance further attempted to persuade the decisionmakers that carrying ELC's full line of products was essential for the success of its duty-free store. Despite this letter, DFA retained the duty-free concessions.
When considering a motion to dismiss under Rule 12(b)(6), the Court must accept all of the Complaint's well-pled factual allegations as true and construe them in the light most favorable to the plaintiff. Pielage v. McConnell, 516 F.3d 1282, 1284 (11th Cir.2008). Under Rule 8(a)(2) of the Federal Rules of Civil Procedure, a pleading need only contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Though the Rule does not require detailed factual allegations, it does require "sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (brackets, internal citation, and internal quotation marks omitted). "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." Id. (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). "Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. So a pleading that offers mere "labels and conclusions" or "a formulaic recitation of the elements of a cause of action" will be dismissed. Id.
In applying the Supreme Court's directives in Twombly and Iqbal to a motion to dismiss, the Eleventh Circuit has instructed that
Kivisto v. Miller, Canfield, Paddock & Stone, PLC, 413 Fed.Appx. 136, 138 (11th Cir.2011) (brackets, internal citations, and quotation marks omitted). The plausibility standard of Twombly and Iqbal "applies to all civil actions." Id.
Counts 1 and 2 assert antitrust conspiracy claims under the Sherman Act, 15 U.S.C. §§ 1, 2. In Count 1, DFA claims that ELC conspired with DFA's competitors in the duty-free business — DFASS, Nuance, International Shoppes, and Travel Retail — to unreasonably restrain trade in violation of Section 1. In Count 2, DFA claims that ELC further conspired to monopolize the market for selling beauty products in U.S. airport duty-free stores in violation of Section 2.
To cross this threshold at the pleading stage, a complaint must contain enough factual matter to plausibly suggest an agreement was made. See id. at 556, 127 S.Ct. 1955. But this "does not impose a probability requirement ...; it simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence of illegal agreement." Id. But allegations of parallel conduct coupled with bare assertions of conspiracy will not suffice. See id. More is required: "allegations of parallel conduct ... 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." Id. at 556-57, 127 S.Ct. 1955; see also Mayor & City Council of Baltimore, Md. v. Citigroup, Inc., 709 F.3d 129, 137-38 (2d Cir.2013) (affirming dismissal of antitrust conspiracy claim because plaintiffs "essentially pleaded only parallel conduct," and the "few additional facts they do assert fail plausibly to suggest that this parallel conduct flowed from a preceding agreement rather than from their own business priorities"); Loren Data Corp. v. GXS, Inc., 501 Fed.Appx. 275, 281 (4th Cir.2012) (concluding that allegations did not plausibly suggest a concerted refusal to deal because they contradicted any inference of conspiracy and instead showed defendant's unilateral business judgment as to "the parameters under which it was willing to deal with [plaintiff], an entity it viewed as having an incompatible business model"); Burtch v. Milberg Factors, Inc., 662 F.3d 212, 227 (3d Cir.2011) (concluding that allegations that various creditors exchanged information about plaintiff's credit-worthiness during twenty-seven separate telephone calls were insufficient to state a plausible conspiracy to fix prices and boycott the plaintiff, because the alleged conduct was equally consistent with each defendant's self-interest in protecting itself from a defaulting debtor and no evidence of "traditional conspiracy," such as suspect meetings or group discussions was alleged).
Here, ELC argues that DFA has failed to allege enough facts to plausibly suggest any "agreement" between ELC and DFA's competitors. It contends that the only fact DFA has alleged that could even begin to support an inference of an agreement is the December 23, 2008 letter ELC sent to Newark's leasing agent. DFA responds, however, that the following circumstantial allegations are enough to raise a reasonable expectation that discovery will reveal evidence of an illegal agreement:
Though ELC alleges the closed-bid process used by Newark means that the only plausible way ELC could have known that DFA bid is to conspire with a DFA competitor, that is not the only explanation, and it is not the most plausible one. See Kivisto, 413 Fed.Appx. at 138 (holding that a court may infer from facts alleged in a complaint obvious alternative explanations that suggest "lawful conduct rather than the unlawful conduct the plaintiff would ask the court to infer"). As DFA admitted at oral argument, it was not a secret that the Newark airport was accepting bids on its duty-free concessions. (DE 114 at 26.) DFA further admitted that people in the cosmetic industry and the duty-free retail business — a description that encompasses ELC — would presumably know about the bid process. (Id.) These interpretations are reasonable based on the Complaint. And given these reasonable inferences, a more plausible explanation for ELC's decision to submit the unsolicited letter to the Newark RFP decisionmakers was to try to ensure that one of the duty-free operators ELC had a relationship would win the bid. ELC could reasonably assume that at least one duty-free operator that sold its products would submit a bid, and ELC would therefore naturally want to promote all the operators that sold its products to maximize the chance that the winner bidder would be an operator who could sell those products. The reasonableness of this interpretation is further bolstered by the content of ELC's letter: the letter merely conveys which duty-free operators are authorized to sell ELC's products and then promotes these operators by conveying ELC's unsurprising opinion that the operators it has chosen to associate itself with are quality operators. (DE 1-2 at 2.) And since the cost to ELC of writing a short,
But even if the Court were to accept DFA's argument that a conspiracy is the only plausible explanation for the letter (it is most certainly not), DFA still has not plausibly alleged a conspiracy. Even this proffered explanation combined with the further, more reasonable allegation that ELC's letter may have caused Newark to reject DFA's bid is not enough. Without more factual meat on the bones of the skeletal Complaint, it is not reasonable to infer that ELC and DFA's competitors agreed to anything at all, much less a "conscious commitment to a common scheme designed to achieve an unlawful objective." Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 764, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984); see also City of Tuscaloosa v. Harcros Chemicals, Inc., 158 F.3d 548, 569 (11th Cir.1999) (explaining that "a plaintiff must demonstrate a `unity of purpose or a common design and understanding, or a meeting of minds in an unlawful arrangement'") (citations omitted).
DFA tries to persuade the Court otherwise by citing to numerous cases. But only In re Delta/AirTran Baggage Fee Antitrust Litigation, 733 F.Supp.2d 1348 (N.D.Ga.2010) and In re Packaged Ice Antitrust Litigation, 723 F.Supp.2d 987 (E.D.Mich.2010) involved motions to dismiss antitrust conspiracy claims under Twombly's plausibility standard. And neither lends support to DFA's contention that it has alleged a plausible conspiracy here.
In In re Delta, the district court declined to dismiss a § 1 claim brought by airline passengers against Delta and AirTran, two fierce rivals in the Atlanta airline market. The plaintiffs alleged that the rival airliners had conspired to raise prices by, among other things, imposing first-bag fees. According to the complaint, AirTran first invited Delta to collude during a public earnings call. That invitation sparked a roughly six-month public dialogue between the airliners about their respective plans to increase prices, and their expectations as to what the other needed to do to increase prices. In describing the ongoing public dialogue leading up to the alleged conspiracy, the complaint laid out specific allegations about how the airliners communicated with each other (via a series of earnings calls and industry conferences), when they did so, who was involved in the communications, and what was communicated.
Similarly, the district court in In re Packaged Ice also declined to dismiss an antitrust conspiracy claim because the complaint's specific allegations as to who, what, where, and when gave the defendant sufficient notice of the plaintiffs' claims and the grounds upon which they rested. There, retail stores and gas stations brought a § 1 claim against three of the largest U.S. manufacturers and distributers of packaged ice. The nub of the plaintiffs' complaint was that the defendants had "conspired among themselves to allocate markets and customers and agreed not to compete with each other, the effect of which ha[d] been to fix, raise, maintain or stabilize prices paid by direct purchasers" of packaged ice. In re Packaged Ice, 723 F.Supp.2d at 1003. As support for their conspiracy claim, the plaintiffs alleged a laundry list of facts including: that some of the defendants had pled guilty to criminal antitrust violations; that key executives had been suspended for violating corporate policy regarding antitrust compliance; that company insiders had admitted to nationwide collusion, as well as the substance of those admissions; that other former employees were expected to testify in support of the insider's admissions; that state attorneys general had investigated claims of anticompetitive conduct in the packaged ice industry; that the defendants had taken actions against their economic self-interest; that price increases were not explained by increased costs; that the market structure was conducive to collusion; and that the defendants had specific opportunities, through identified meetings, to conspire. See id. Based on these allegations, the court found that the defendants had sufficient notice as to:
Id. at 1007. The district court thus concluded that the complaint raised a reasonable expectation that discovery would reveal evidence of an illegal agreement. See id. at 1017; cf. Kendall v. Visa U.S.A., 518 F.3d 1042, 1048 (9th Cir.2008) (dismissing antitrust conspiracy claim because "the complaint does not answer the basic questions: who, did what, to whom (or with whom), where, and when?").
DFA's Complaint here, on the other hand, pales in comparison to the two post-Twombly cases on which it relies. Unlike In re Delta where the plaintiffs alleged a litany of collusive communications leading to the conspiratorial agreement, DFA has not alleged any collusive communications between ELC and its co-conspirators here. Nor has DFA articulated enough facts to give sufficient notice as to the "who," "what," "where," or "when" of its conspiracy theories, like in In re Packaged Ice. For instance, as to
When shorn of its conclusory allegations, DFA's Complaint reveals allegations of parallel business conduct with little more. Central to DFA's conspiracy claims is that ELC and its alleged co-conspirators engaged in a concerted "smear campaign" against DFA by "improperly and maliciously" interfering with the RFP processes by "making defamatory statements to various U.S. airport authorities." (Id. at 20.) As evidence of their modus operandi, DFA points to the letter that ELC sent to Newark's leasing agent. (See DE 1-2 at 2.) But that letter does not provide any indication that ELC and DFA's competitors agreed to engage in any kind of concerted action against DFA. The letter does not even mention DFA. Nor does it otherwise imply "by negative inference," as DFA contends, that it is "not a `quality' duty free operator." (DE 1 at 8.) At most, the letter merely suggests that ELC had an interest in seeing that one of its authorized duty-free retailers (as opposed to a retailer with whom it does not deal, like DFA) was awarded Newark's duty-free concessions.
Moreover, the fact that the purported "smear campaign" continued during other airports' RFP processes does not make DFA's conspiracy theory anything more than a scant possibility. For instance, with respect to the RFP at Boston, DFA alleged that, "on information and belief, ELC and/or its co-conspirators made a communication to relevant decisionmakers that was similar to the unsolicited letter that ELC had sent during the Newark bid." (Id. at 9.) As to the RFP at Orlando, DFA alleged that "ELC and its co-conspirators told relevant Orlando decisionmakers (1) that ELC would not sell to DFA or [its partner,] Stellar, (2) that supply of ELC products is necessary for a duty free store to succeed, and (3) that, consequently, selecting DFA would diminish duty free sales levels in Orlando." (Id. at 11.) DFA further alleged that ELC and its co-conspirators made similar communications to the decisionmakers during the RFP at Atlanta.
But DFA "`cannot state an antitrust claim by merely showing parallel conduct and from it divine that an agreement must be the source from which the parallel conduct arose.'" In re Delta, 733 F.Supp.2d at 1359. More is required — such allegations "must be placed in a context that raises a suggestion of a preceding agreement."
Both ELC and DFA's competitors have sufficient independent economic incentives to communicate with the airports' decisionmakers without the need to conspire with anyone. ELC's incentive to promote its authorized duty-free retailers to the airport's decisionmakers is obvious — to increase the likelihood that its beauty products are sold in a particular airport. DFA's competitors also have a similar independent economic incentive — to increase their chances of winning a particular RFP process by distinguishing themselves from their competition. And even if it was "improper" for ELC and DFA's competitors to have done so during some of the RFPs — a conclusory allegation not supported by facts — "without that further circumstance pointing towards a meeting of the minds [between ELC and DFA's competitors], an account of a defendant's commercial efforts stays in neutral territory." Twombly, 550 U.S. at 557, 127 S.Ct. 1955.
In sum, because ELC's alleged conduct is "not only compatible with, but indeed is more likely explained by, lawful, unchoreographed free-market behavior," Iqbal, 556 U.S. at 680, 129 S.Ct. 1937, there is no reasonable expectation that discovery will reveal evidence of illegal agreement. See Twombly, 550 U.S. at 556, 127 S.Ct. 1955; see also Tempur-Pedic, 626 F.3d at 1342-43 (upholding dismissal of antitrust conspiracy claim because plaintiffs failed to allege facts suggestive enough to render conspiracy plausible, given alleged conduct was as consistent with independent economic activity as it was with conspiracy); Credit Bureau Services, Inc. v. Experian Information Solutions, Inc., No. 12-61360-CIV, 2012 WL 6102068, at *20 (S.D.Fla. Dec. 7, 2012) (dismissing antitrust conspiracy claims because plaintiff "set forth factual contentions that are at least just as plausibly explained by competition as they are by conspiracy"). For these reasons, the Court should conclude that DFA has failed to allege enough facts to plausibly suggest an "agreement" between ELC and DFA's competitors. Counts I and II should be dismissed.
The next issue is whether DFA has stated a valid claim that ELC violated § 2 of the Sherman Act by attempting to monopolize the relevant markets, which DFA defines as either cosmetics sold in duty-free stores in U.S. airports or skin-care products sold in those same stores.
The first anticompetitive conduct DFA alleges is ELC's refusing to deal with DFA and its business partner during the Orlando RFP, Stellar. But the fundamental flaw with this argument is that ELC has the right to choose whom it deals with: "as a general matter, the Sherman Act does not restrict the long recognized right of a trader or manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal." Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398, 408, 124 S.Ct. 872, 157 L.Ed.2d 823 (2004) ("Trinko") (brackets and internal quotation marks omitted). Though an exception to this rule exists, the exception is "is at or near the outer boundary of § 2 liability" and thus is narrow: at a minimum, it applies only when a defendant with monopoly power unilaterally terminates voluntary business dealings with a competitor in circumstances strongly suggesting that the termination was designed to achieve an anticompetitive end. Id. at 408-410, 124 S.Ct. 872. DFA does not allege that it competes with ELC, that ELC has monopoly power,
DFA next alleges that ELC engaged in anticompetitive conduct by falsely disparaging DFA to airport authorities. But false statements constitute anticompetitive
DFA next relies on allegations that ELC set prices. Although DFA alleges in one portion of its complaint that "ELC ... set prices to consumers at the... retail level" by instructing duty-free operators on what margins to take on products ELC sold them, DFA undercuts this allegation by alleging that ELC "encouraged DFA (and presumably other duty-free store operators) to maintain margins" and thus raise prices to consumers after ELC announced its intent to increase the prices at which it sold products to duty-free operators. (See DE 3 (emphasis added).)
DFA next turns to its allegations that ELC required duty-free operators to provide ELC products with a "disproportionate amount of display place to increase market share and prevent allocation of
Id. at 14. DFA's allegations, in contrast, are less specific, more conclusory, and therefore insufficient under Twombly and Iqbal.
Moreover, several allegations in the Complaint undercut the plausibility that ELC's alleged disproportionate display space substantially forecloses competition in the relevant market; in other words, these allegations suggest a functioning competitive market rather than a stifled one. For example, DFA alleges that it promoted and sold Smashbox when it was independent and "develop[ed] significant demand for that brand"; that after DFA and ELC parted ways, DFA "introduce[d] and develop[ed] even more brands, many of which had not previously been introduced into duty free stores in U.S. airports"; and that "DFA currently operates airport duty free stores in JFK, LaGuardia, Detroit, Dulles, Miami, Boston, Baltimore (BWI), Charlotte, Salt Lake City, San Antonio, Phoenix, and Reagan National". (DE 1 at 4-5, 18.) Even DFA's competitors offer multiple brands that compete with ELC. (Id. at 15.) And, as ELC notes, "DFA's allegation that `there has been relatively little recent change at the top in the major manufacturers of beauty products ... sold in duty free stores' suggests that there has been some recent change at the top of this alleged market and that even more changes may have occurred below the very top tier of competition." (DE 20 at 20 (quoting DE 1 at 14) (emphasis in original).) In sum, these allegations suggest that new products can successfully enter the market and that there is upward mobility, and this undercuts the plausibility that competition in the market is substantially foreclosed.
The final issue is whether DFA has stated a valid claim for tortious interference with a business relationship under Florida law. DFA argues that ELC tortiously interfered with DFA's prospective business relationships with the Newark, Boston, and Orlando Airport Authorities by taking actions that prevented DFA from securing duty-free concessions from these airports. (DE 26 at 16.) To prevail on a tortious-interference claim, the plaintiff must prove "(1) the existence of a business relationship; (2) knowledge of the relationship on the part of the defendant; (3) an intentional and unjustified interference with the relationship by the defendant; and (4) damage to the plaintiff as a result of the breach of the relationship." Ethan Allen, Inc. v. Georgetown Manor, Inc., 647 So.2d 812, 814 (Fla.1994) (ellipses omitted). Because DFA's Complaint fails to plausibly allege that a business relationship existed between it and the Newark, Boston, and Orlando airports, the tortious-interference claim is dismissed. Although it seems unlikely DFA will be able to sufficiently plead the existence of a protected business relationship, the court will give it the opportunity to do so. Count 4 is therefore dismissed without prejudice.
Though "a protected business relationship need not be evidenced by an enforceable contract," such a relationship requires evidence of "an actual and identifiable understanding or agreement which in all probability would have been completed if the defendant had not interfered." Id. at 814-15. So a "mere offer to sell" is not enough to support a tortious-interference claim. Id. at 814 (quoting Landry v. Hornstein, 462 So.2d 844, 846 (Fla. 3d DCA 1985)). And absent an identifiable agreement between a past customer and a plaintiff that the past customer would do business with the plaintiff again, a plaintiffs past relationship with a past customer cannot be the basis for the existence of a business relationship. Id. at 815; Medical Savings Insurance Co. v. HCA, Inc., 2005 WL 1528666, at *9 (M.D.Fla. June 24, 2005), aff'd, 186 Fed.Appx. 919 (11th Cir. 2006).
Similarly, a bidder generally cannot establish a protected business relationship with an entity soliciting bids through a competitive bidding process. See Mobile Shelter Systems USA, Inc. v. Grate Pallet Solutions, LLC, 845 F.Supp.2d 1241, 1258-59 (M.D.Fla.2012) (holding that the plaintiffs tortious-interference claim failed because the United States military's solicitation for bids, also known as a "request for bid" or "request for proposal," did not establish a protected business relationship between the military and the plaintiff bidder). This is so for two principal reasons. A solicitation for bids, such as an RFP, is not a contract, but merely a request for offers from interested parties. Id.; Hoon v. Pate Construction Co., Inc., 607 So.2d 423, 426 (1992). And since a solicitation for bids encourages parties besides a plaintiff
So to establish a protected business relationship within a bidding process, a plaintiff must allege additional facts indicating that the relationship went beyond the bidding process and into negotiations which in all probability would have been completed. See id.; Walters v. Blankenship, 931 So.2d 137, 139-140 (Fla. 5th DCA 2006) (finding the existence of a business relationship between the plaintiffs and successful bidders in an auction for the plaintiffs' condominium units because the auction was without reserve, the plaintiffs were obligated to accept the lowest offers on their units no matter how little the bid was, and because more than 20 bidders posted a substantial bond and attended the auction). Significantly, the plaintiffs in Walters were the solicitors auctioning off their condominium units, and the court found that they had a protectable business relationship with the lowest bidders when the terms of the auction required them to accept the lowest bids. Walters, 931 So.2d at 139-40. Unlike the plaintiffs in Walters, DFA is a bidder for the duty-free concessions and DFA does not allege that the airports must accept the lowest bids. The very concept of there being a definite lowest bid seems foreign to the RFP process for duty-free concessions because the bidders typically offer airports a percentage of their sales. (See DE 1 at 15, 18.) For airports to maximize revenue, they must consider not only the percentage cut offered by each bidder, but the expected amount of sales of each bidder. An airport therefore cannot determine with complete accuracy which bidder will actually yield more revenue for the airport.
In light of these principles, DFA's factual allegations do not state a valid tortious-interference claim, even when construed in the light most favorable to DFA. DFA fails to allege that the agreements between DFA and the airports in all probability would have been completed if ELC had not interfered, and therefore fails to allege a protected business relationship. Although DFA alleges that it participated in the RFP process for duty-free concessions at the Newark, Boston, and Orlando airports, participating in this competitive bidding process does not establish a protected business relationship.
And DFA does not allege additional facts indicating that the relationship went beyond the bidding process and into negotiations which in all probability would have been completed. DFA's causation allegations — namely, that its Newark bid "was rejected because of ECL's conduct"; that its Boston bid "was rejected, at least in part, because of ELC's conduct"; and that DFA's "inability to carry ELC products was a central reason [its] bid was declined (DE 1 at 9-11) — do not plausibly establish that the respective airports probably would have contracted with DFA absent ELC's alleged interference. Informing a bidder that its bid was rejected because the bidder did not carry product X (here, DFA's inability to carry ELC products) does not logically imply that its bid probably would have been accepted if the bidder did carry X. And when multiple other bidders carry X but only one of them can win the bid — the precise situation in the present case
Because DFA has not alleged a protected business relationship, its tortious-interference claim fails.
For the above reasons, the Court