Antitrust Suit against Black & Decker and others revived by Fourth Circuit
By Nicole Daniel
On 15 September 2015 the Fourth Circuit revived an antitrust suit against Black & Decker Corp and others which accuses them of conspiring to boycott SawStop LLC’s table saw safety technology. However, the court upheld the dismissal of claims that the defendants manipulated the standard setting process to exclude SawStop LLC’s new technology.
In February 2014, SawStop launched its suit against Black & Decker Corp and other major toolmakers, claiming that the defendant manufacturers had colluded and thereby violated federal antitrust law. SawStop claimed that the defendants, through their industry organization Power Tool Institute Inc., refused to license a new safety technology created by SawStop. When a SawStop new technology blade detects contact between itself and a person the blade almost immediately retracts.
In its suit SawStop also accused the defendant companies of conspiring to change the standards of Underwriters Laboratories Inc., a company responsible for safety certification, to prevent a technology similar to SawStops’ from being installed as industry standard. Allegedly, to limit their product liability claims exposure, the defendant manufacturers planned to [have Underwriter’s Laboratories] implement an inferior safety standard; i.e. they wanted to implement a new standard through Underwriter’s Laboratories
In June 2014 the district court dismissed the entire case. The Fourth Circuit, however, in a split three-judge panel, found that even though SawStop did not have enough evidence to show that the defendant manufacturers’ participation in the process for setting safety standards for table saws went beyond cooperation that was ordinarily involved in such process, it did have enough evidence to go ahead with the alleged group boycott claim.
Judge G. Steven Agee for the majority wrote that the district court essentially committed two errors. The first error was to confuse standards for motion-to-dismiss and summary judgment. The second error was that a standard much closer to probability was applied even though the standard should have been closer to plausibility.
According to majority in the Fourth Circuit decision the district court applied the Supreme Court’s Iqbal and Twombly rulings, which to move ahead with an antitrust proceeding, require from the plaintiff to allege something that goes beyond parallel conduct, too stringent; especially given that the case in question was merely in the early stages.
Even though SawStop did not have enough details to plausibly allege that the defendants conspired to manipulate safety standards, SawStop put forward enough details to go ahead with the group boycott claim.
Therefore the Fourth Circuit revived the group boycott claim.
The Fourth Circuit further remanded the dispute over whether the plaintiff was harmed by the alleged anticompetitive behavior, or whether it was even necessary to show such harm since the alleged plot amounts to a per se antitrust violation. This issue was remanded since it had not been briefed sufficiently before the district court.
Importantly it was emphasized by the Fourth Circuit that its decision is not to be regarded as a “license for unlimited discovery” thereby noting that the district courts had power to restrict discovery.