BROWNING, District Judge.
POP Diesel develops, manufactures, and sells triglyceride diesel fuel—fuel consisting of vegetable oil and animal fat—and related equipment that permits and manages the use of triglyceride diesel fuel in residential, commercial, and industrial burners and in diesel engines. See Second Amended Complaint Jury Demand ¶ 1, at 2, filed April 1, 2011 (Doc. 1)("SAC"). POP Diesel also owns and operates a state-licensed triglyceride diesel fuel processing and filling station in state of New Mexico, which it opened in 2006 as the first such station in the United States of America. See SAC ¶ 4, at 3. The cities of Albuquerque, Las Cruces, and Santa Fe and the town of Taos in New Mexico have all pledged to assist POP Diesel in establishing the first state-wide network of triglyceride fuel filling stations in the country.
Defendants ExxonMobil Corporation and ConocoPhillips Company (together "the Defendant Oil Companies"), are two of the world's largest producers and sellers of petroleum-based diesel fuel, which competes with triglyceride diesel fuel, but which POP Diesel alleges is inferior to triglyceride diesel fuel for use in burners and diesel engines, for reasons of cost, performance, product safety, and environmental impact. SAC ¶¶ 7-9, at 3-4. Each of the Defendant Oil Companies is a member of Defendant ASTM International, one of the largest standard-setting organizations in the world. See SAC ¶¶ 8, 11-15, at 4-5. ASTM promulgates quality standards for many products, including fuel oils, which have been adopted by reference in federal and state statutes throughout the United States, including New Mexico. See SAC ¶ 13, at 4. ASTM's "membership is composed of three categories: producers, consumers, and general interest (academic, etc.) . . . [and] [i]ts specifications are written by technically qualified committees composed of members from the three categories." Application of Am. Soc'y for Testing & Materials, 231 F.Supp. 686, 688 (E.D.Pa.1964).
This case involves ASTM's pending promulgation, with the Defendant Oil Companies' alleged involvement, of a proposed new standard and guidelines for biofuels that would limit the use of triglyceride diesel fuel and related products, including those of POP Diesel. POP Diesel alleges that the Defendants conspired with numerous other entities. See SAC ¶¶ 17-19, at 5-6. POP Diesel asserts that the co-conspirators of which it knows include certain members of ASTM's Triglyceride Burner Fuel Working Group and Subcommittee P of ASTM Committee D02, including: (i) the National Biodiesel Board and Ralph F. Turner, Chair of the Triglyceride Burner Fuel Working Group, acting on behalf of biodiesel interests; (ii) Barbara Parry and Steve Spence of Newalta, acting on behalf of interests connected with recycled engine oil for burners; (iii) Marie F. Calhoon of Transmontaigne Inc., acting on behalf of interests connected with the petroleum industry; and (iv) other members of the Triglyceride Burner Fuel Working Group and Subcommittee P of ASTM Committee D02. See SAC ¶ 18, at 6. POP Diesel contends that the co-conspirators and the Defendant Oil Companies all have an economic interest in the exclusion of triglyceride diesel fuel from the relevant markets, because
SAC ¶ 17, at 5-6.
The relevant product and geographic markets for purposes of this action are: (i) the diesel fuel market for residential, commercial, and industrial burners in the United States, and (ii) the diesel fuel market for diesel engines in the United States ("the Relevant Markets"). SAC ¶ 21, at 7. POP Diesel competes in the Relevant Markets against the Defendant Oil Companies, as well as against other producers and sellers of diesel fuel. See SAC ¶ 24, at 7.
ASTM's largest committee, titled D02, Petroleum Products and Lubricants ("Committee D02"), of which the Defendant Oil Companies are members, promulgates standards, specifications, classifications, test methods, and guidelines for liquid fuels in the diesel fuel industry. SAC ¶¶ 8, 10, 15, at 4, 5. To date, Committee D02 has approved for mixing with petroleum-based diesel fuel a non-petroleum blend stock, commonly known as "biodiesel," that meets ASTM Standard Specifications Biodiesel Fuel Blend Stock B100 for Middle Distillate Fuels D6751. SAC ¶ 33, at 9. ASTM Standard Specifications D396 and D975 approve up to five percent biodiesel blended with petroleum-based diesel fuel for use in burners and diesel engines, respectively. See SAC ¶ 33, at 9.
POP Diesel alleges that, because of the five-percent cap, biodiesel represents only an incremental step in reducing net greenhouse gas emissions as compared with the near one-hundred percent use of triglyceride diesel fuel POP Diesel's equipment permits. See SAC ¶ 35, at 10. The Defendant Oil Companies do not oppose biodiesel, which poses no threat to petroleum-based diesel fuel because of the five-percent cap. See SAC ¶ 35, at 10. POP Diesel contends that supporting the five-percent cap on biodiesel in ASTM Standard Specifications D396 and D975 allows the Defendant Oil Companies to portray themselves as favoring renewable energy. See SAC ¶ 35, at 10. POP Diesel further contends that biodiesel blended with petroleum fuels makes use of existing pipeline, rail, road and other infrastructure, whereas "triglyceride diesel fuel is handled, transported, and stored in equipment that is apart and segregated from the infrastructure supporting petroleum." SAC ¶ 35, at 10. Without federal tax incentives, which expired at the end of 2009, the manufacture of biodiesel is largely not cost-effective or economically or commercially feasible, and many biodiesel facilities today are sitting idle. See SAC ¶ 36, at 10.
Several years ago, burner manufacturers seeking insurance coverage for the use of triglyceride diesel fuel asked ASTM Committee D02 to develop a standard for triglyceride diesel fuel to be used in burners. See SAC ¶ 37, at 10. Underwriters Laboratories, an insurance actuarial firm, would not rate burners using triglyceride diesel fuel, and some insurers therefore would not offer coverage, unless and until ASTM first adopted a standard specification for triglyceride diesel fuel for burners. See SAC ¶ 37, at 10-11. Various subcommittees of Committee D02 refused to adopt a specification for triglyceride diesel fuel burners. See SAC ¶ 39, at 10. POP Diesel alleges that this refusal is the result of the petroleum-based diesel fuel interests that dominate these subcommittees and that these interests "oppose any standard for triglyceride diesel fuel that may lead to triglyceride diesel fuel's supplanting petroleum-based diesel fuel." SAC ¶ 38, at 11. The request was then referred to Committee D02's Subcommittee P, Recycled Petroleum Products (the "Subcommittee").
The Subcommittee and the Working Group have created and approved the Draft ASTM Triglyceride Standard. SAC ¶ 42, at 12. POP Diesel asserts that the Draft ASTM Triglyceride Standard contains numerous, material misstatements of fact made with the purpose and effect of excluding sellers of triglyceride diesel fuel and related products, including POP Diesel, from the Relevant Markets. See SAC ¶ 44, at 12-17. During the June 2010, ASTM semi-annual meeting, POP Diesel's President, Claude Convisser, voiced objections to the Draft ASTM Triglyceride Standard at the meetings of both the Working Group and the Subcommittee. See SAC ¶¶ 45-47, at 17. During Convisser's comments at the Working Group meeting, ExxonMobil stated that it would vote against the Draft ASTM Triglyceride Standard if ASTM deleted the alleged misrepresentation in Section 1.2—that "[t]h[e fuels specified herein] are not intended for use" in residential and smaller burners, diesel internal combustion engines, and marine applications—to which Convisser had objected. SAC ¶ 48, at 18. Convisser subsequently provided the Working Group and Subcommittee with written objections to the Draft ASTM Triglyceride Standard. See Complaint ¶ 47, at 17. Convisser's oral and written objections described, among other things, the following alleged material misrepresentations in the Draft ASTM Triglyceride Standard:
POP Diesel further asserts that numerous irregularities, and breaches of ASTM's own policies and procedures, have marked the ASTM's Committee D02's, the Subcommittee's, and the Working Group's approval process for the Draft ASTM Triglyceride Standard. See SAC ¶ 52, at 18-22. POP Diesel alleges the following irregularities:
POP Diesel asserts that, "[a]s the world's largest publicly traded international oil and gas company, ExxonMobil has the influence and market power to ensure that ASTM adopts the Draft ASTM Triglyceride Standard in its current form." SAC ¶ 49, at 18. POP Diesel alleges that members of the Subcommittee not affiliated with the Defendant Oil Companies "repeatedly stated that many of Convisser's objections had substantive merit," but nonetheless "refused to adopt and approve any of Convisser's proposed changes because such adoption and approval would antagonize the Defendant Oil Companies." SAC ¶ 52(i), at 21-22. The Subcommittee voted twelve-to-one in favor of adopting the Draft ASTM Triglyceride Standard and forwarding it to Committee D02. See SAC ¶ 53, at 22. POP Diesel asserts:
SAC ¶ 54, at 22.
POP Diesel also asserts that, in response to its objections, the Defendant Oil Companies have also moved aggressively to have ASTM restrict future approval of triglyceride diesel fuels for diesel engines. See SAC ¶ 55, at 23. POP Diesel alleges that the Defendants have caused Committee D02 to begin the promulgation of "Fit-for-Purpose" Guidelines that limit standards for future diesel engine fuels to petroleum-based diesel fuel or biodiesel, as currently described in ASTM Standard Specification D975. SAC ¶ 55, at 23. These Fit-for-Purpose Guidelines are anticipatory standards governing research and development of future products, in that they specify how a new and potentially as yet undeveloped product must function, and how it must fit with existing products and processes to meet ASTM standards. See SAC ¶ 56, at 23. POP Diesel argues that these Fit-for-Purpose Guidelines are detrimental to innovation, research, and development, in that they tend to limit and channel innovation towards existing products and processes, and protect existing products and processes from future competition. See SAC ¶ 56, at 23.
POP Diesel contends that, like the Draft ASTM Triglyceride Standard, the purpose and effect of the Fit-for-Purpose Guidelines will be to stifle innovation, and to exclude Pop Diesel and other sellers of alternative diesel fuels from the Relevant Markets. See SAC ¶ 59, at 23. For example, the Fit-For-Purpose Guidelines' definition of "hydrocarbon oil," a key term, will favor biodiesel, while excluding triglyceride diesel fuel. SAC ¶ 59, at 23(a), at 23. The Fit-For-Purpose Guidelines shift the future burden of validating triglyceride
In sum, POP Diesel alleges that, in concert, the Defendant Oil Companies and ASTM are in the process of promulgating the Draft ASTM Triglyceride Standard and the Fit-for-Purpose Guidelines with the purpose and effect of excluding triglyceride diesel fuel and POP Diesel's products from the Relevant Markets. See SAC ¶¶ 63-64, at 30. The Defendants intend imminently to present the Draft ASTM Triglyceride Standard to the Committee D02 membership for a vote on its adoption. See SAC ¶ 43, at 12. Once the Draft ASTM Triglyceride Standard is adopted and published, numerous states will incorporate it by reference into law pursuant to existing statutes, such as N.M.S.A.1978, § 57-19-29. See SAC ¶ 13, at 4.
POP Diesel brings this action under Sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15 and 26, and 28 U.S.C. §§ 1331 and 1337, to redress the alleged violations of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1; its state counterpart, N.M.S.A.1978, § 57-1-1; and New Mexico common law against intentional interference with prospective business advantage, for damages and to enjoin the Defendants from agreeing, combining, and conspiring to bring about the adoption of an industry standard and guidelines for triglyceride diesel fuel, the purpose and effect of which POP Diesel alleges will be to exclude it and other sellers of triglyceride diesel fuel from diesel fuel markets in the United States.
On February 1, 2011, POP Diesel filed its Motion and Application for Temporary Restraining Order and Order to Show Cause, requesting a temporary restraining order and preliminary injunction. See Doc. 5 ("TRO Motion"). The Court held a hearing on the TRO on March 1, 2011. At the hearing, POP Diesel stated that its most imminent harm was that ASTM would submit the Draft ASTM Triglyceride Standard to an electronic ballot, because, if approved, the standard would automatically become the law by reference in over thirty states, including New Mexico. See Transcript of Hearing at 7:2-10 (taken March 1, 2011), filed April 10, 2011 (Doc. 69)("Tr.")(Shulman). POP Diesel contended that it had not had adequate opportunity to makes its views known in ASTM and that the Draft ASTM Triglyceride Standard is inaccurate. See Tr. at 7:11-19 (Court, Shulman). POP Diesel acknowledged that "once the standards is enacted it's not written in stone," "[i]t can be changed," and "[t]he change will go into law." Tr. at 18:13-15 (Schulman). POP Diesel also conceded that, while it hopes to expand, it is currently doing business only in New Mexico, with approximately thirty trucks using its fuel. See Tr. at 19:3-21 (Court, Schulman). POP Diesel also stated that it was "not sure" if adoption of the Draft ASTM Triglyceride Standard would
ASTM stated that it was ready to issue the ballot on the Draft ASTM Triglyceride Standard. See Tr. at 29:1-5 (Court, Edward). ASTM represented that the ballot would be open for thirty days, after which time the ASTM Committee on Standards would have sixty days in which to review the process to make certain that there were no procedural irregularities. See Tr. at 29:5-13 (Edward). POP Diesel's criticisms and the Working Group's response would accompany the ballots. See Tr. at 30:5-11 (Edward). Additionally, if one-third of the votes oppose the Draft ASTM Triglyceride Standard, the standard is returned to committee for redrafting. See Tr. at 30:20-23 (Edward). POP Diesel would have the right to take an appeal of the Committee D02's decision to the Committee on Standards, which could not be heard before October 2011, and, failing there, to the ASTM Board of Directors, which could not be heard before April 2012. See Tr. at 32:3-18 (Edward). The Draft ASTM Triglyceride Standard would not become law while the appeal was pending, giving POP Diesel the ability to forestall the Draft ASTM Triglyceride Standard from becoming law for at least thirteen months. See Tr. at 32:19-21, 34:1 (Court, Edward). In light of ASTM's representations, POP Diesel acknowledged that it did not face imminent injury. See Tr. at 42:4-10 ("Court: I guess the sense I get is that we're not in . . . an imminent situation. . . . Do you get the same impression? MR. SHULMAN: Yes, Your Honor, I do."). On April 18, 2011, the Court issued its Memorandum Opinion and Order, denying POP Diesel preliminary injunctive relief without prejudice to POP Diesel renewing its request in the future, because POP Diesel had not shown imminent harm would result if the Court did not issue a preliminary injunction.
The Defendants now move the Court to dismiss the SAC. The Defendants contend that POP Diesel lacks Article III standing, because it has not suffered an injury, and that its claims are not ripe, because any future injury is speculative and contingent on uncertain events. The Defendants further contend that POP Diesel has not suffered an antitrust injury, because, as POP Diesel represented at the March 1, 2011 TRO hearing, POP Diesel is not in the burner market, which the Draft ASTM Triglyceride Standard will affect, and that the Fit-for-Purpose Guidelines, which affect the diesel engine market—in which POP Diesel is active—are in their early stages. The Defendants assert that POP Diesel fails to set forth allegations that make its conspiracy claims plausible and that the Noerr-Pennington doctrine
On April 22, 2011, POP Diesel filed its Combined Memorandum of Law in Opposition to Defendants' Motions to Dismiss the Second Amended Complaint and in Opposition to Defendant ASTM International's Alternative Motion to Strike Certain Allegations in the Second Amended Complaint. See Doc. 74 ("Response"). POP Diesel responds that, because it seeks injunctive relief, the harm it seeks to avoid is adequately imminent and its claims are ripe. POP Diesel asserts that the Court should not consider its statements at the March 1, 2011 when determining whether it has suffered an antitrust injury without converting the motions into motions for summary judgment and giving POP Diesel an opportunity to brief accordingly after discovery. POP Diesel further asserts that it adequately pled plausible allegations of a conspiracy and that the Noerr-Pennington doctrine does not remove standard-setting organizations from antitrust liability. POP Diesel also asserts that it alleged sufficient facts showing intentional interference with prospective advantage.
On May 6, 2011, ASTM filed its Reply in Support of its Motion to Dismiss Plaintiff's Second Amended Complaint Pursuant to Fed.R.Civ.P. 12(b)(1) and 12(b)(6), or in the Alternative, to Strike Certain Allegations Pursuant to Fed.R.Civ.P. 12(f). See Doc. 76 ("Reply"). ASTM reasserted the Defendants' arguments from their motions, and contend that POP Diesel concedes in its Response that it has suffered no Article III or antitrust injury. ASTM asserts that the Court should consider POP Diesel's concession without converting the motions to dismiss into motions for summary judgment.
"Federal courts are courts of limited jurisdiction; they are empowered to hear only those cases authorized and defined in the Constitution which have been entrusted to them under a jurisdictional grant by Congress." Henry v. Office of Thrift Supervision, 43 F.3d 507, 511 (10th Cir.1994) (citations omitted). A plaintiff generally bears the burden of demonstrating the court's jurisdiction to hear his or her claims. See Steel Co. v. Citizens for a Better Env't, 523 U.S. 83, 104, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) ("[T]he party invoking federal jurisdiction bears the burden of establishing its existence."). Rule 12(b)(1) of the Federal Rules of Civil Procedure allows a party to raise the defense of the court's "lack of jurisdiction over the subject matter" by motion. Fed.R.Civ.P. 12(b)(1). The United States Court of Appeals for the Tenth Circuit has held that motions to dismiss for lack of subject-matter jurisdiction "generally take one of two forms: (1) a facial attack on the sufficiency of the complaint's allegations as to subject-matter jurisdiction; or (2) a challenge to the actual facts upon which subject-matter jurisdiction is based." Ruiz v. McDonnell, 299 F.3d 1173, 1180 (10th Cir. 2002).
Alto Eldorado Partners v. City of Santa Fe, No. CIV 08-0175 JB/ACT, 2009 WL 1312856, at *8-9 (D.N.M. Mar. 11, 2009) (Browning, J.) (citations omitted). As the United States Court of Appeals for the Fifth Circuit has stated:
Williamson v. Tucker, 645 F.2d 404, 412-13 (5th Cir.1981) (quoting Mortensen v. First Fed. Sav. & Loan Ass'n, 549 F.2d 884, 891 (3d Cir.1977)).
When making a rule 12(b)(1) motion, a party may go beyond the allegations in the complaint to challenge the facts upon which jurisdiction depends, and may do so by relying on affidavits or other evidence properly before the court. See New Mexicans for Bill Richardson v. Gonzales, 64 F.3d 1495, 1499 (10th Cir.1995); Holt v. United States, 46 F.3d 1000, 1003 (10th Cir.1995). In those instances, a court's reference to evidence outside the pleadings does not necessarily convert the motion to a rule 56 motion for summary judgment. See Holt v. United States, 46 F.3d at 1003 (citing Wheeler v. Hurdman, 825 F.2d 257, 259 n. 5 (10th Cir.1987)). Where, however, the court determines that jurisdictional issues raised in rule 12(b)(1) motion are intertwined with the case's merits, the court should resolve the motion either under rule 12(b)(6) or under rule 56. See Franklin Sav. Corp. v. United States, 180 F.3d 1124, 1129 (10th Cir.1999); Tippett v. United States, 108 F.3d 1194, 1196 (10th Cir.1997). "When deciding whether jurisdiction is intertwined with the merits of a particular dispute, `the underlying issue is whether resolution of the jurisdictional question requires resolution of an aspect of the substantive claim.'" Davis ex rel. Davis v. United States, 343 F.3d 1282, 1296 (10th Cir.2003)(quoting Sizova v. Nat'l Inst. of Standards & Tech., 282 F.3d 1320, 1324 (10th Cir.2002)).
Under rule 12(b)(6), a court may dismiss a complaint for "failure to state a claim upon which relief can be granted." Fed. R.Civ.P. 12(b)(6). "The nature of a Rule 12(b)(6) motion tests the sufficiency of the allegations within the four corners of the complaint after taking those allegations as true." Mobley v. McCormick, 40 F.3d 337, 340 (10th Cir.1994) (citation omitted). The sufficiency of a complaint is a question of law, and when considering and addressing a rule 12(b)(6) motion, a court must accept as true all well-pleaded factual allegations in the complaint, view those allegations in the light most favorable to the non-moving party, and draw all reasonable inferences in the plaintiff's favor. See Smith v. United States, 561 F.3d 1090, 1097 (10th Cir. 2009); Moore v. Guthrie, 438 F.3d 1036, 1039 (10th Cir.2006); Hous. Auth. of Kaw Tribe v. City of Ponca City, 952 F.2d 1183, 1187 (10th Cir.1991). A complaint challenged by a rule 12(b)(6) motion to dismiss does not need to set forth detailed factual allegations, but a plaintiff's burden to set forth the grounds of his or her entitlement to relief "requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atl. Corp. v. Twombly, 550 U.S. 544,
The Court has subject-matter jurisdiction over POP Diesel's claims that are founded on the passage of the Draft ASTM Triglyceride Standard, because POP Diesel has alleged a harm and the potential harm is adequately imminent. POP Diesel's claims that are founded on the Fit-For-Purpose Guidelines, however, are not ripe, because the standards are at their early stages, and whether and in what form the Fit-For-Purpose Guidelines will be enacted is uncertain. The Court dismisses POP Diesel's antitrust claims over which it has subject-matter jurisdiction, because POP Diesel fails to allege a plausible conspiracy. Because POP Diesel's state law claims are predicated on its antitrust claims and because POP Diesel does not allege contractual relations with which the Draft ASTM Triglyceride Standard would interfere, the Court also dismisses POP Diesel's claim for interference with prospective business advantage.
The Defendants contend that the Court lacks subject-matter jurisdiction over this case. They contend that POP Diesel lacks standing and its claims are not ripe, because it has not suffered an Article III or antitrust injury, and faces only a speculative future injury that may not come to pass. They assert that, because the harm POP Diesel seeks to avoid in the diesel burner market, in which POP Diesel does not currently participate, will not come to pass unless members of Committee D02 vote to adopt the Draft ASTM Triglyceride Standard, and even then it is subject to appellate review within ASTM, including review of procedural irregularities, POP Diesel's claims are not ripe. The Defendants further assert that the harm POP Diesel seeks to avoid from the Fit-For-Purpose Guidelines is more attenuated than the harm it alleges may flow from the Draft ASTM Triglyceride Standard, because, as POP Diesel conceded, the Fit-For-Purpose Guidelines are at an early stage of development. See, e.g., ConocoPhillips' Memorandum at 10-11 ("[POP Diesel"] apparently relies on threatened harm, but it makes no showing as required to establish standing under Article III that any potential harm is anything `more than a possibility,' or that `the threat of injury [is] both real and immediate' and `certainly impending.' (citations omitted)); ASTM's Memorandum at 9 ("[T]he Draft TG Standard remains subject to an uncertain outcome in the main committee vote and possible appeals, and . . . the Fit-For-Purpose Guides remain in the early drafting stages and are not alleged to be voted upon imminently.").
Response at 17-18 (citations to the record omitted). The parties elaborated on the approval process at the preliminary injunction hearing. ASTM stated that it was ready to issue the ballot on the Draft ASTM Triglyceride Standard. See Tr. at 29:1-5 (Court, Edward). ASTM represented that the ballot would be open for thirty days, after which time the ASTM Committee on Standards would have sixty days in which to review the process to make certain that there were no procedural irregularities. See Tr. at 29:5-13 (Edward). POP Diesel's criticisms and the Working Group's response would attend the ballots. See Tr. at 30:5-11 (Edward). Additionally, if one-third of the votes oppose the Draft ASTM Triglyceride Standard, the standard is returned to committee for redrafting. See Tr. at 30:20-23 (Edward). POP Diesel would have the right to take an appeal of the Committee D02's decision to the Committee on Standards, which could not be heard before October 2011, and, failing there, to the ASTM Board of Directors, which could not be heard before April 2012. See Tr. at 32:3-18 (Edward). The Draft ASTM Triglyceride Standard would not become law while the appeal was pending, giving POP Diesel the ability to forestall the Draft ASTM Triglyceride Standard from becoming law for at least thirteen months. See Tr. at 32:19-21, 34:1 (Court, Edward). The Court agrees that POP Diesel's Draft ASTM Triglyceride Standard claims adequately allege an Article III injury and are ripe. POP Diesel's Fit-for-Purpose Guidelines claims, however, are not ripe.
Article III of the United States Constitution requires that a live case or controversy for a federal court to have jurisdiction over a dispute. See U.S. Const. art. III, § 2. "The existence of a case and controversy is a prerequisite to all federal actions, including those for . . . injunctive relief." Presbytery of N.J. of Orthodox Presbyt. Church v. Florio, 40 F.3d 1454, 1462 (3d Cir.1994). The limitation on federal subject-matter jurisdiction to "cases or controversies" has both a standing and a ripeness component, which are two sides of the same coin. Armstrong World Indus., Inc. v. Adams, 961 F.2d 405, 411 & nn. 12-13 (3d Cir.1992). "[R]ipeness tells us when a Case proper
524 F.3d at 222. The determination whether a claimant has suffered injury-in-fact is assessed "at of the time the action is brought." Smith v. U.S. Court of Appeals for the Tenth Circuit, 484 F.3d 1281, 1285 (10th Cir.2007)(quotations and citations omitted).
A federal court's jurisdiction also requires a dispute to be ripe. See New Mexicans for Richardson v. Gonzales, 64 F.3d 1495, 1498-99 (10th Cir.1995) (stating that the ripeness inquiry "bears on the court's subject matter jurisdiction under the case or controversy clause of Article III"). The ripeness inquiry is concerned with the "timing" of the dispute, unlike standing which is concerned with whether a proper party is raising the dispute. Regional Rail Reorg. Act Cases, 419 U.S. 102, 140, 95 S.Ct. 335, 42 L.Ed.2d 320 (1974). "As a general rule, determinations of ripeness are guided by a two-factor test, `requiring [a court] to evaluate both the fitness of the issue for judicial resolution and the hardship to the parties of withholding judicial consideration.'" Sierra Club v. Yeutter, 911 F.2d 1405, 1415 (10th Cir.1990) (quoting Abbott Labs. v. Gardner, 387 U.S. 136, 149, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967)). The "central focus" of the fitness aspect of the ripeness inquiry is "whether the case involves uncertain or contingent future events that may not occur as anticipated, or indeed may not occur at all." New Mexicans for Richardson v. Gonzales, 64 F.3d at 1499 (citations omitted). The hardship aspect "typically turns upon whether the challenged action creates a direct and immediate dilemma for the parties." New Mexicans for Richardson v. Gonzales, 64 F.3d at 1499 (internal citations and quotation marks omitted). "[R]ipeness overlaps in some respects with standing, most notably in the shared requirement that the [plaintiff's] injury be imminent rather than conjectural or hypothetical." Ross v. Bank of America, 524 F.3d at 226.
The Court concludes that POP Diesel's claims that are based on the Draft ASTM Triglyceride Standard are up to constitutional muster, but that POP Diesel's claims that are based on the Fit-For-Purpose
857 F.2d at 61 (footnotes omitted). The defendants sought to dismiss the plaintiffs' challenge to the proposed rules pursuant to rule 12(b)(1) on the ground that this challenge was not ripe. The district court did not address the ripeness challenge, dismissing the antitrust claims on other grounds, and "the tortious interference claim . . . was dismissed on the ground that appellants had not alleged any business relations between themselves and a third party that were harmed by appellees' behavior." 857 F.2d at 62.
The Second Circuit vacated the district court's dismissal and remanded. The Second Circuit first considered the defendants' ripeness argument. The Second Circuit held that the challenge to the proposed "Special Events Rule" was ripe, because it was having a present anti-competitive effect and its future application was straight forward, making it unnecessary to await future developments. The Second Circuit further held, however, that the challenges to the other three rules were not yet ripe, because future events would clarify how they would be enacted and applied:
857 F.2d at 63-65 (emphasis added).
Similar to the challenge to the proposed rules in Volvo North America Corp. v. Men's International Professional Tennis Council, some of POP Diesel's claims are ripe, and others are not. Because the Draft ASTM Triglyceride Standard is nearing implementation, the Court concludes that POP Diesel's challenge to it is ripe and POP Diesel has adequately alleged an Article III injury. The Draft ASTM Triglyceride Standard discourages POP Diesel's pending attempts to enter the burner market. See Ross v. Bank of America, 524 F.3d at 222 ("Injury in fact is a low threshold, which we have held `need not be capable of sustaining a valid cause of action,' but `may simply be the fear or anxiety of future harm.'" (citations omitted)). Additionally, the Draft ASTM Triglyceride Standard is ripe for adjudication, because it has been finalized and submitted for ballot. POP Diesel has also shown adequate hardship, because passage of the Draft ASTM Triglyceride Standard is imminent. In the SAC, POP Diesel alleges that "[t]he Defendants intend imminently to present the Draft ASTM Triglyceride Standard to the membership of ASTM for a vote on its adoption," and that "[o]nce it is adopted and published, numerous states will incorporate it by reference into law pursuant to existing statutes." SAC ¶ 51, at 18. At the preliminary injunction hearing, ASTM stated that it was prepared to distribute the ballots. POP Diesel "does not have to await the consummation of threatened injury to obtain preventive relief. If the injury is certainly impending, that is enough.'" Volvo N. Am. Corp. v. Men's Int'l Prof'l Tennis Council, 857 F.2d at 63 (quoting Regional Rail Reorg. Act Cases, 419 U.S. at 143, 95 S.Ct. 335). "In the antitrust context in particular, a rule that has yet to be enacted or enforced may be ripe for review if its mere proposal is likely to inhibit competition." Volvo N. Am. Corp. v. Men's Int'l Prof'l Tennis Council, 857 F.2d at 64 (citing North Am. Soccer League v. National Football League, 465 F.Supp. 665 (S.D.N.Y.1979)). The language of the Draft ASTM Triglyceride Standard has been finalized for approval in technical and specific language. "Thus, its effect is unlikely to be clarified substantially by whatever `further factual development' would accompany its enactment." Volvo N. Am. Corp. v. Men's Int'l Prof'l Tennis Council, 857 F.2d at 64.
POP Diesel's challenge to the Fit-for-Purpose Guidelines, however, is not ripe. First, POP Diesel has not shown a
Response at 17-18. While "[i]n some instances, the prospect or fear of future events may have a real impact on present affairs, such that a preemptive challenge is ripe," Volvo N. Am. Corp. v. Men's Int'l Prof'l Tennis Council, 857 F.2d at 64 (citations omitted), POP Diesel Fit-for-Purpose Guidelines claims are based on "uncertain or contingent future events that may not occur as anticipated, or indeed may not occur at all," New Mexicans for Richardson v. Gonzales, 64 F.3d at 1499 (citations omitted). POP Diesel's alleged present effects are "more attenuated . . . than the alleged present effect of the [Draft ASTM Triglyceride Standard]." Volvo N. Am. Corp. v. Men's Int'l Prof'l Tennis Council, 857 F.2d at 65. POP Diesel's argument is of the same nature of the one the Second Circuit rejected in Volvo North America Corp. v. Men's International Professional Tennis Council,
Volvo N. Am. Corp. v. Men's Int'l Prof'l Tennis Council, 857 F.2d at 64.
POP Diesel's challenge also fails the fitness prong, because the Fit-For-Purpose Guidelines are in their early stages of development. It is uncertain whether and in what form they will be voted upon or enacted. POP Diesel acknowledges in its SAC that the Fit-for-Purpose Guidelines are in their initial stages of development:
SAC ¶ 55, at 23. See Response at 6 ("[D]efendants and the Co-conspirators have already also caused Committee D02 to begin the promulgation of so-called `Fit-for-Purpose' Guides . . . .")(emphasis added). At the preliminary injunction hearing, POP Diesel further acknowledged that the Fit-for-Purpose Guidelines were in a nascent stage, stating that it did not seek a preliminary injunction for the Fit-For-Purpose Guidelines because they are "sufficiently far from the voting stage." Tr. at 26:21-27:2 (Schulman). In addition to being in their early stages, POP Diesel also acknowledges that, in contrast to the alleged procedural irregularities surrounding promulgation of the Draft ASTM Triglyceride Standard, the Defendants have acted on POP Diesel's objections to the Fit-for-Purpose Guidelines:
SAC ¶ 52(d), at 20.
The Court concludes that POP Diesel's claims based on the Fit-for-Purpose Guidelines are not ripe. The issues of ripeness "typically turns upon whether the challenged action creates a direct and immediate dilemma for the parties." New Mexicans for Richardson v. Gonzales, 64 F.3d at 1498-99. Because the Fit-for-Purpose Guidelines are both in their early stages and because their development is on-going, creating uncertainty what form they will ultimately take if and when they are submitted for approval, the Court concludes that POP Diesel's claims based on the Fit-for-Purpose Guidelines are premature. The form and "effect of the [Fit-for-Purpose Guidelines] may be clarified by the further factual development that would accompany their adoption." Volvo N. Am. Corp. v. Men's Int'l Prof'l Tennis Council, 857 F.2d at 65. Consequently, the Court lacks subject-matter jurisdiction over those claims, and dismisses them without prejudice.
The Defendants also assert that POP Diesel has conceded that it has not suffered an antitrust injury, and therefore POP Diesel lacks antitrust standing. An antitrust injury, however, is not a jurisdictional requirement, and, because the Court dismisses POP Diesel's remaining claims for failing to plausibly allege an antitrust conspiracy, the Court declines to consider matters outside the four corners of the SAC to determine whether to dismiss POP Diesel's remaining causes of action. Besides demonstrating Article III standing, an antitrust plaintiff must also establish antitrust standing. See Paycom Billing Servs., Inc. v. Mastercard Int'l, Inc., 467 F.3d 283, 290-92 (2d Cir.2006). "An antitrust injury is an injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendant's acts unlawful." Reazin v. Blue Cross & Blue Shield of Kan., Inc., 899 F.2d 951, 962 n. 15 (10th Cir.1990) (citation and quotation omitted). To plead an antitrust injury, a plaintiff "must allege a business or property injury . . . as defined by the Sherman Act." Sports Racing Servs., Inc. v. Sports Car Club of Am., Inc., 131 F.3d 874, 882 (10th Cir.1997) (citation and quotation omitted). Where injunctive relief is sought pursuant to Section 16 of the Clayton Act, the same standard for antitrust injury applies, except that the harm alleged is "threatened loss or damage." Cargill, Inc. v. Monfort of Colo., Inc., 479 U.S. 104, 112, 107 S.Ct. 484, 93 L.Ed.2d 427 (1986) (citation omitted).
526 F.3d at 1254. Challenges to antitrust standing are properly brought under rule 12(b)(6) of the Federal Rules of Civil Procedure. See NicSand, Inc. v. 3M Co., 507 F.3d 442 (6th Cir.2007) ("[A]ntitrust standing and Article III standing are not one and the same, and we not only may—but we must—reject claims under Rule 12(b)(6) when antitrust standing is missing.").
The Defendants contend that the Court should dismiss POP Diesel's SAC, because POP Diesel conceded in admissions and sworn declarations in support of its TRO Motion and in its representations at the preliminary injunction hearing that it has not suffered an antitrust injury. See Bailey v. Shell Western E & P, Inc., 609 F.3d 710 (5th Cir.2010) ("[The plaintiff] fails to meet even the most basic of antitrust requirements—he has suffered no antitrust injury and, accordingly, lacks antitrust standing." (citing Norris v. Hearst Trust, 500 F.3d 454, 465 (5th Cir.2007))). Specifically, POP Diesel acknowledged that it has not suffered an antitrust injury because (i) the Draft TG Standard does not affect the market for diesel fuel in compression engines, and (ii) POP Diesel is neither a customer nor competitor in the market for diesel fuel used in burners.
POP Diesel does not dispute that it has not suffered an antitrust injury. Instead, it responds that it artfully pled around its substantive difficulties in the SAC, and that the Court must ignore POP Diesel's real world shortcomings and limit its review to only the artificial image of the case POP Diesel projects in the SAC:
Response at 14 n. 5. Because the Court concludes that POP Diesel's remaining claims fail on the four corners of the SAC, the Court need not consider whether it should dismiss POP Diesel's claims for lack of an antitrust injury based on its concessions in support of a preliminary injunction. The Court notes, however, other courts have refused to "pretend . . . [a plaintiff's admissions] do not exist." Realnetworks, Inc. v. DVD Copy Control Ass'n, Inc., No. 08-4548, 2010 WL 145098, at *4 (N.D.Cal. Jan. 6, 2010) (holding, on a rule 12(b)(6) motion that "[t]he court will take judicial notice of admissions and concessions already made in this action; no rule of procedure requires a court to pretend these do not exist."); Ventre v. Datronic Rental Corp., No. 92-3289, 1995 U.S. Dist. LEXIS 20323, at *18-19 (N.D.Ill.Dec. 5, 1995) ("Price Waterhouse. . . relies upon . . . admissions by plaintiffs' counsel contained within the record of this case. . . . Since this court may properly consider . . . items appearing in the record of the case . . . it declines to convert the motion to dismiss into a motion for summary judgment.").
The Defendants allege that POP Diesel has not plausibly alleged an antitrust conspiracy or a violation of the New Mexico law against tortious interference with prospective business advantage. POP Diesel responds that it has alleged that the Defendant Oil Companies used their influence to promulgate anti-competitive standard through ASTM, plausibly showing a violation of the antitrust laws, and that the same allegations support a claim for tortious interference with prospective business advantage. The Court concludes that POP Diesel has not set forth adequate factual allegations in support of its antitrust claims or, thereby, a claim of tortious interference with prospective advantage. The Court therefore dismisses the remaining claims in POP Diesel's SAC. Because POP Diesel has twice amended the SAC and has not plausibly alleged an antitrust claim, the Court dismisses the claims over which it has subject-matter jurisdiction with prejudice.
As an initial matter, the Court notes that the parties agree that standard-setting organizations are not immune from antitrust liability. In their arguments, the parties talk somewhat past each other. The Defendants' central argument is that the actions of which POP Diesel complains are routine standard-setting activities. ExxonMobil contends:
ExxonMobil Motion at 11. Similarly, ConocoPhillips asserts that, "[a]ccording to [POP Diesel's] argument, a standard-setting
Response at 28. ASTM replies that it does not contend that ASTM is immune from antitrust liability, but that "POP Diesel's Opposition has made it clear that the success of its claims hinges on this Court. . . holding that the mere participation in ASTM and the mere refusal to assent to Mr. Convisser's technical views is enough to plausibly suggest the existence of an actionable conspiracy." Reply at 3. The Defendants thus do not assert that ASTM cannot be held liable for its members' actions, or that ASTM's participants are shielded from antitrust liability, but that POP Diesel has alleged nothing more than that the Defendant Oil Companies participated routine standard-setting activities.
In American Society of Mechanical Engineers, Inc. v. Hydrolevel Corp., the Supreme Court held that the American Society of Mechanical Engineers, Inc. ("ASME"), a nonprofit standard-setting organization, could be held civilly liable under the antitrust laws for acts of its agents performed with its apparent authority. 456 U.S. at 559, 102 S.Ct. 1935. Like ASTM, "ASME promulgates and publishes over 400 separate codes and standards for areas of engineering and industry. These codes, while only advisory, have a powerful influence: federal regulations have incorporated many of them by reference, as have the laws of most States. . . ." 456 U.S. at 559, 102 S.Ct. 1935. Among ASME's many sets of standards is its Boiler and Pressure Vessel Code, which at the time of the Supreme Court's decision was incorporated into the laws of forty-six states. Part of the Boiler and Pressure Vessel Code concerned "low-water fuel cutoffs," which cause boilers to stop firing if their water levels fall too low, preventing a possible explosion. 456 U.S. at 559-60, 102 S.Ct. 1935. McDonnell & Miller, Inc. ("M & M"), had dominated the market for low-water fuel cutoffs for decades, "[b]ut in the mid-1960's, respondent Hydrolevel Corporation entered the low-water fuel cutoff market with a different version of this device. The relevant distinction . . . was that Hydrolevel's fuel cutoff, unlike M & M's, included a time delay." 456 U.S. at 560, 102 S.Ct. 1935. In early 1971, one of M & M's important customers, Brooklyn Union Gas Company, switched to Hydrolevel's product. In response, M & M allegedly abused its power within ASME to attack Hydrolevel's product and to thwart Hydrolevel's competitive challenge:
456 U.S. at 561-63, 102 S.Ct. 1935 (footnote and citations omitted). Eventually, James' role in the unofficial response condemning Hydrolevel's product came to light, and Hydrolevel brought an action under sections 1 and 2 of the Sherman Act. The case went to trial, and the parties disputed a jury instruction on the standard for allowing ASME to be held liable for James' actions. The district court "charged the jury that ASME could be held liable only if it had ratified its agents' actions or if the agents had acted in pursuit of ASME's interests." 456 U.S. at 564, 102 S.Ct. 1935. Noting that, under general rules of agency law, principals are liable when their agents act with apparent authority and commit torts analogous to the facts in American Society of Mechanical Engineers, Inc. v. Hydrolevel Corp., the Supreme Court held
456 U.S. at 570-71, 102 S.Ct. 1935. To the extent that POP Diesel contends that American Soc. of Mechanical Engineers, Inc. v. Hydrolevel Corp. stands for the proposition that standard-setting organizations may be liable for the actions of their agents, the Defendants do not appear to disagree. Rather, ASTM contends that "[t]he Supreme Court in Hydrolevel did not suggest, as POP Diesel does in its Opposition, that an unlawful conspiracy is automatically formed among a standard-setting organization and its members when representatives of those members join a committee or subcommittee." Reply at 3. ASTM further asserts that American Society of Mechanical Engineers, Inc. v. Hydrolevel Corp. is inapposite, because "POP Diesel is not pursuing a theory of agency liability against ASTM"; rather, POP Diesel contends "that ASTM was an active participant in the conspiracy." Response at 3-4 (citing Response at 24 ("Quite obviously, POP Diesel does allege an anticompetitive conspiracy between ASTM, the Defendant Oil Companies and the Coconspirators")). The Court agrees with the proposition that standard-setting organizations are not immune from antitrust liability. The proposition, however, does not save POP Diesel's SAC, because the SAC's fatal flaw is that it fails to allege a plausible antitrust conspiracy. POP Diesel contends that "Hydrolevel makes clear that the Defendant Oil Companies act with apparent authority of ASTM merely because ASTM `cloaks its subcommittee officials with the authority of its reputation, [and]. . . permits those agents to affect the destinies of businesses, and thus gives them the power to frustrate competition in the marketplace.'" Response at 28 n. 14 (citations omitted). While the Court does not disagree with POP Diesel's contention, POP Diesel still must allege an antitrust conspiracy to state a claim under § 1 or New Mexico's equivalent. Because the Court concludes that POP Diesel has failed to plausibly allege an antitrust conspiracy, ASTM's cloak of authority is largely irrelevant in the analysis for this case.
POP Diesel has not plausibly alleged an antitrust conspiracy. The Defendants contend that POP Diesel has failed to set forth factual allegations that would push its SAC across the threshold of plausibly. The Defendants assert that POP Diesel's antitrust claims contend in essence that participating in a standard-setting organization amounts to participating in an anti-competitive conspiracy. They assert, on the contrary, that standard-setting organizations are not "walking conspiracies." Wilk v. Am. Med. Ass'n., 895 F.2d 352, 374 (7th Cir.1990) ("But, a trade association is not, just because it involves collective action by competitors, a `walking conspiracy.'"). ConocoPhillips states:
ConocoPhillips Motion at 13. See ExxonMobil's Motion at 7 ("As a preliminary matter, this Court should reject Plaintiff's argument that the mere participation in a standard setting body is per se unlawful.").
POP Diesel responds that it "has sufficiently alleged facts showing a group boycott and an unreasonable restraint of trade in violation of Section 1 of the Sherman Act and New Mexico Statute Annotated 57-1-1." Response at 27. POP Diesel further contends that "[t]hese same allegations also show intentional interference with prospective advantage." Response at 27. The heart of POP Diesel's antitrust conspiracy theory is that the Oil Company Defendants are using their influence to compel members of Committee D02 to vote in favor of the Draft ASTM Triglyceride Standard. POP Diesel asserts that, "[a]s the world's largest publicly traded international oil and gas company, ExxonMobil has the influence and market power to ensure that ASTM adopts the Draft ASTM Triglyceride Standard in its current form." SAC ¶ 49, at 18.
The Court concludes that POP Diesel has not adequately pled factual allegations in support of its antitrust claims to make them plausible. The Court therefore dismisses the antitrust claims over which it has subject-matter jurisdiction. The Court also dismisses POP Diesel's New Mexico tort law claims, which are founded on the antitrust conspiracy claims. The Court must, when evaluating a motion to dismiss under rule 12(b)(6), "ask whether there is `plausibility in [the] complaint.'" Christy Sports, LLC v. Deer Valley Resort Co., 555 F.3d 1188, 1191 (10th Cir.2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. at 564, 127 S.Ct. 1955). "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.'" Ashcroft v. Iqbal, 129 S.Ct. at 1949 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. at 570, 127 S.Ct. 1955). See Ridge at Red Hawk, L.L.C. v. Schneider, 493 F.3d 1174, 1177
POP Diesel does not set forth allegations of a plausible conspiracy. The heart of POP Diesel's antitrust claim is that the Defendant Oil Companies "have used their influence in ASTM with the purpose and effect of excluding triglyceride diesel fuel from the Relevant Markets." Response at 28 n. 14. In particular, POP Diesel alleges that "ExxonMobil exerted its influence as a member of Committee D02 to support the Draft ASTM Triglyceride Standard" and that "ConocoPhillips used its influence as the key technical contact to include anticompetitive language in two Fit-for-Purpose Guides." Response at 30. Because the Court lacks subject-matter jurisdiction over POP Diesel's antitrust claims that are based on the Fit-For-Purpose Guidelines, the Court does not consider whether being a technical contact is an antitrust violation.
POP Diesel offers little more than threadbare allegations in support of its antitrust conspiracy claims. See Kendall v. Visa USA, Inc., 518 F.3d 1042, 1047-48 (9th Cir.2008) (affirming the dismissal of a § 1 claim based on allegations that defendants "knowingly, intentionally and actively participated in an individual capacity in the alleged scheme to fix the interchange fee or merchant discount fee," because the plaintiff's allegation was "nothing more than a conclusory statement" and "[t]here [we]re no facts alleged to support such a conclusion"). What factual allegations POP Diesel provides are insufficient to make its antitrust claims plausible. In Bell Atlantic v. Twombly, the Supreme Court held that a recitation of the elements of a § 1 claim combined with allegations of parallel conduct—which was consistent with both lawful and with unlawful behavior—was insufficient to plead a plausible antitrust claim. The Supreme Court stated:
550 U.S. at 556-57, 127 S.Ct. 1955 (citations omitted).
Like the plaintiffs in Bell Atlantic Corp. v. Twombly, POP Diesel fails to allege "enough factual matter (taken as true) to suggest that an agreement was made." 550 U.S. at 556, 127 S.Ct. 1955. POP Diesel alleges three sets of factual allegations in support of its antitrust conspiracy theory: (i) at the June 2010 Working Group meeting, ExxonMobil stated it would vote against the Draft ASTM Triglyceride Standard if parts of it were changed in accordance with Convisser's objections to the statement in Section 1.2 that "[t]h[e fuels specified herein] are not intended for use" in residential and smaller burners, diesel internal combustion engines, and marine applications, SAC ¶ 48, at 18; (ii) the minutes of the June 2010 meeting where ExxonMobil made this comment were procedurally deficient and did not record ExxonMobil's comment, see SAC ¶ 52(c), at 19; and (iii) POP Diesel was not permitted "unlimited discussion and debate" on the Draft ASTM Triglyceride Standard at the December 2010 Committee D02 meeting, SAC ¶ 52(d), at 20 (alleging that, while "Committee D02 permitted unlimited discussion and debate on all of the other twenty or so ASTM Standards on the agenda," over POP Diesel's objection, the Committee "voted to submit Convisser's comments accompanying his negative vote on the Draft ASTM Triglyceride Standard to electronic balloting, rather than allow for discussion and debate at the meeting"). None of the allegations, however, alone or in combination, plausibly suggests an antitrust conspiracy.
Similar to the allegations of parallel conduct in Bell Atlantic Corp. v. Twombly, POP Diesel primarily relies on conclusory allegations combined with factual allegations of conduct that is equally consistent with lawful conduct, namely a member of a standard-setting organization stating a position on a draft standard in opposition to an objection. In Greater Rockford Energy and Tech. Corp. v. Shell Oil Co., 998 F.2d 391 (7th Cir.1993), cert. denied 510 U.S. 1111, 114 S.Ct. 1054, 127 L.Ed.2d 375 (1994), the United States Court of Appeals for the Seventh Circuit found that "the only evidence suggesting concerted action among the defendants is their common membership in organizations such as" ASTM and the American Petroleum Institute ("API"). The Seventh Circuit held:
998 F.2d at 396. The Seventh Circuit stated:
Greater Rockford Energy and Tech. Corp. v. Shell Oil Co. 998 F.2d at 396-97 (emphasis added) (citations to the record omitted).
While the Court evaluates the SAC's allegations on the Defendants' motions to dismiss, and not on a summary judgment standard, the same legal principles apply.
The Seventh Circuit also affirmed summary judgment in Greater Rockford Energy and Tech. Corp. v. Shell Oil Co., because "the court found no evidence of an anticompetitive effect because the certification, although influential, was not required to compete in the market." 998 F.2d at 391. Similarly, the standard at issue in this case is influential, but compliance is not required to compete in the relevant markets.
Unlike the alleged antitrust conspiracy in Greater Rockford Energy and Tech. Corp. v. Shell Oil Co., where "API followed its normal certification procedures," 998 F.2d at 397, POP Diesel does allege "procedural irregularities" in the SAC. SAC ¶ 52, at 18. The alleged procedural irregularities, however, are not suggestive of a conspiracy in restraint of trade and do not push POP Diesel's antitrust claims across the threshold of plausibility. POP Diesel alleges "procedural irregularities" and omissions surrounding the meeting notes for the June 2010 meeting. SAC ¶ 52(d), at 20. POP Diesel alleges that, contrary to its customs and policies, no minutes of the Working Group's June 2010 meeting were circulated within sixty days of its June 2010 meeting, and, without the Working Group's or the Subcommittee's prior approval at their meetings on December 8, 2010, the Chair of the Subcommittee appended a set of purported minutes for the June 2010 Working Group meeting to the Subcommittee report to the D02 Committee on the December 9, 2010 Working Group meeting. See SAC ¶ 52(a)-(c), at 19. POP Diesel further alleges that the draft of the purported Working Group minutes made no mention of ExxonMobil's statement that it would vote against the Draft ASTM Triglyceride Standard if limiting language was deleted. See SAC ¶ 52(c), at 19. First, the tardiness of the meeting minutes does not suggest an unlawful agreement in restraint of trade. Additionally, it is unclear how excluding ExxonMobil's statement from the minutes would plausibly suggest a conspiracy in restraint of trade, particularly when the essence of POP Diesel's antitrust theory appears to be that the Oil Company Defendants used their influence to compel other members of Committee D02 to vote in accordance with their interests. If this allegation were a plausible antitrust theory, the Court fails
POP Diesel's final set of factual allegations is that, unlike the other approximately twenty matters discussed at the December 2010 meeting and "[i]n contravention of the agenda," which stated "that the meeting `will continue until all business is completed,'" POP Diesel was not permitted "unlimited discussion and debate" of its objections to the Draft ASTM Triglyceride Standard. SAC ¶ 52(d), at 20 (alleging that, while "Committee D02 permitted unlimited discussion and debate on all of the other twenty or so ASTM Standards on the agenda," over POP Diesel's objection, the Committee "voted to submit Convisser's comments accompanying his negative vote on the Draft ASTM Triglyceride Standard to electronic balloting, rather than allow for discussion and debate at the meeting"). These allegations, alone or in combination with POP Diesel's other factual contentions, do not plausibly allege an antitrust conspiracy. First, it is a stretch to read the statement in the meeting agenda "that the meeting `will continue until all business is completed'" to mean that POP Diesel would be permitted unlimited discussion and debate of the Draft ASTM Triglyceride Standard, or that POP Diesel would be permitted to have its objection discussed in whatever form it chose. Moreover, POP Diesel points to no case, and the Court finds none, that holds that "contravention of [an] agenda" establishes a plausible antitrust conspiracy claim. Second, POP Diesel does not state in the SAC whether the approximately twenty other items that it alleges were "permitted unlimited discussion and debate" were contested, making them suspect measuring sticks for assessing Committee D02's treatment of Convisser's objections. SAC ¶ 52(d), at 20. The Committee's ability to cover twenty items in one meeting suggests that the other items elicited little discussion and debate. Finally, POP Diesel essentially contests the manner of the discussion and debate. It acknowledges in the SAC that POP Diesel's objections were addressed at the December 2010 meeting, see SAC ¶ 52(h), at 21 ("[T]he Subcommittee presented on a large display screen written responses to each of Convisser's objections to the Draft Standard . . . ."), and that Convisser's objections will accompany the electronic ballot, see SAC ¶ 52(d), at 20 ("[C]ommittee D02 voted to submit Convisser's comments accompanying his negative vote on the Draft ASTM Triglyceride Standard to electronic balloting.. . ."). POP Diesel thus does not contest that its objections were not heard, but that it would prefer they were heard differently. This contention does not plausibly support an antitrust conspiracy.
Beyond its allegations that ExxonMobil objected to changing the Draft ASTM Triglyceride Standard, that the meeting minutes were procedurally deficient and incomplete, and that it was not allowed unlimited comment and debate at the December 2010 meeting, POP Diesel alleges only that the Defendant Oil Companies participated in standard-setting activities. The Defendants contend that merely participating in a standard-setting organization does not amount to an unlawful conspiracy in restraint. The Court agrees. An antitrust conspiracy requires "a combination or some form of concerted action between at least two legally distinct economic entities." Capital Imaging Assocs. v. Mohawk Valley Med. Assocs., Inc., 996 F.2d 537, 542 (2d Cir.1993).
Gregory v. Fort Bridger Rendezvous Ass'n, 448 F.3d 1195, 1200 (10th Cir.2006). The Second Circuit has noted that "every action by a trade association is not concerted action by the association's members." AD/SAT v. Associated Press, 181 F.3d 216, 234 (2d Cir.1999). See also Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 510 n. 13, 108 S.Ct. 1931, 100 L.Ed.2d 497 (1988) (emphasizing that its holding allowing an antitrust claim to go forward was "expressly limited to cases where an `economically interested party exercises decisionmaking authority in formulating a product standard for a private association that comprises market participants,'" as opposed to "mere efforts to persuade others to exclude a competitor's product from a private code" (emphasis original)). Thus, POP Diesel must allege more than that the Defendant Oil Companies participated in promulgating the Draft ASTM Triglyceride Standard.
POP Diesel's antitrust claims are also implausible because they require broad cooperation among groups that would be unlikely bedfellows. ASTM argues:
ASTM's Memorandum at 2. ASTM's "membership is composed of three categories: producers, consumers, and general interest (academic, etc.) . . . [and] [i]ts specifications are written by technically qualified committees composed of members from the three categories." Application of Am. Soc'y for Testing & Materials, 231 F.Supp. 686, 688 (E.D.Pa.1964). POP Diesel alleges a far-reaching conspiracy, requiring that the Defendants conspired
POP Diesel relies on its antitrust claim to support its claim for tortious interference with prospective business advantage. See Response at 27 ("These same allegations also show intentional interference with prospective advantage."). The Court dismisses POP Diesel's antitrust claims, on which POP Diesel relies to support its tort claim. POP Diesel's tort claim fails because POP Diesel does not allege a contractual relationship in the burner market with which the Defendants' alleged action interfered. See Horizon AG-Prods. v. Precision Sys. Eng'g, Inc., No. CIV 09-1109 JB/DJS, 2010 WL 4054131 (D.N.M. Sept. 28, 2010) (Browning, J.)(dismissing the plaintiffs' tortious interference with prospective contractual relations claim, because the plaintiff "ha[d] not alleged that it had any continuing or customary relationships with its customers"). POP Diesel contends that the SAC alleges continuing or customary relationships with its customers, because it states that "Albuquerque, Las Cruces, Santa Fe, and Taos
Reply at 10. To the extent the interference on which POP Diesel relies will flow from the Fit-for-Purpose Guidelines, which address diesel engine fuels, and not the Draft ASTM Triglyceride Standard, which address burners, POP Diesel's claims are not ripe for the reasons discussed in Part I.A, supra, and the Court dismisses without prejudice. Because POP Diesel makes no allegations of interference with its alleged activities in the burner market, the Court dismisses with prejudice POP Diesel's tortious interference with prospective business advantage to the extent the claim is founded on the Draft ASTM Triglyceride Standard.
Response at 12. A litigant cannot waive a court's subject-matter jurisdiction.
Response at 27 (citations to the record omitted). The Court need not, and does not, rely on the alleged facts outside of the SAC to determine that POP Diesel has not plausibly alleged an antitrust conspiracy theory. The Court notes, however, that, as with POP Diesel's admission that it has suffered no antitrust injury, these extra-complaint considerations reinforce that allowing POP Diesel to proceed to discovery would not likely lead to evidence that would allow POP Diesel to survive summary judgment.
