Free Reply Brief - District Court of Delaware - Delaware

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE WILLIAM BOYD, Plaintiff, v. TEMPAY, INC., Defendant. : : : : : : : : : : : CIVIL ACTION NO. 07-377 (JJF)

DEFENDANT'S REPLY BRIEF IN SUPPORT OF DEFENDANT'S MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM

McCARTER & ENGLISH, LLP Katharine L. Mayer (DE Bar ID #3758) Renaissance Centre 405 N. King Street, 8th Floor Wilmington, DE 19801 (302) 984-6300 (302) 984-6399 (fax) [email protected] Attorneys for Defendant, TemPay, Inc.

Dated: December 10, 2007

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TABLE OF CONTENTS PAGE ARGUMENT ............................................................................................................................... 1 I. THE COMPLAINT SHOULD BE DISMISSED BECAUSE IT LACKS SUFFICIENT FACTUAL ALLEGATIONS ESTABLISHING THAT BOYD HAS STANDING TO ASSERT A CLAIM UNDER THE SHERMAN ACT OR STATING A CLAIM THEREUNDER......................................1 THE NEW ALLEGATIONS IN BOYD'S BRIEF DO NOT CURE THE FATAL DEFICIENCIES IN HIS PLEADING .....................................................2 A. Boyd Has Not Established That He Has Standing To Maintain His Claims against TemPay .........................................................................................2 Boyd's Brief Does Not Assert Sufficient Facts To State A Claim Under Section 1 Of The Sherman Act..................................................................3 Boyd's Brief Does Not Assert Sufficient Facts To State A Claim Under Section 2 Of The Sherman Act..................................................................4 Boyd Had Not Asserted Facts Sufficient To Establish A Conspiracy To Monopolize........................................................................................................5

II.

B.

C.

D.

III.

BOYD'S REQUEST TO AMEND HIS COMPLAINT SHOULD BE DENIED BECAUSE IT WOULD BE FUTILE........................................................5

CONCLUSION .............................................................................................................................7

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TABLE OF CITATIONS PAGE Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955 (2007)...................................................................................................1,2,3 Borkowski v. Fraternal Order of Police, Philadelphia Lodge No. 5, 155 F.R.D. 105 (E.D. Pa. 1994)...........................................................................................3 Boyd v. Nannas, C.A. No. 07-378-JJF, Mem. Op. (D. Del. July 30, 2007)....................................................1 City of Pittsburgh v. West Penn Power Comp., 147 F.3d 256 (3d Cir. 1998).................................................................................................2 Commonwealth of Pennsylvania v. PepsiCo, Inc., 836 F.2d 173 (3d Cir. 1987).................................................................................................1 Deaktor v. Fox Grocery Company, 332 F.Supp. 536 (W.D. Pa. 1971)........................................................................................3 Fuentes v. South Hills Cardiology, 946 F.2d 196 (3d Cir. 1991).................................................................................................4 Howard Hess Dental Laboratories, Inc. v. Dentsply International, Inc., ___ F. Supp. 2d ___, 2007 WL 2807292 (D. Del. Sept. 26, 2007) .....................................5 Jablonski v. Pan Am. World Airways, Inc., 863 F.2d 289 (3d Cir. 1988) ................................................................................................6 Marian Bank v. Electronic Payment Servs., Inc., 1997 WL 811552 (D. Del. Dec. 30, 1997)...........................................................................4 Medtronic Minimed Inc. v. Smiths Med. MD Inc., 371 F. Supp. 2d 578 (D. Del. 2005).....................................................................................4 Pennsylvania ex rel. Zimmerman v. PepsiCo, Inc., 836 F.2d 173 (3d Cir. 1988) ................................................................................................4 Roberts v. The Mayor and Burgesses of the London Borough of Brent, 2003 WL 21543889 (3d Cir. July 9, 2003)..........................................................................6 Superior Models, Inc. v. Tolkien Enterprises, 1981 WL 40556 (D. Del. Aug. 14, 1981) ........................................................................... 4

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Telsat v. Entertainment & Sports Programming Network, 753 F. Supp. 109 (S.D.N.Y. 1990) ......................................................................................3 Wages v. Internal Revenue Service, 915 F.2d 1230 (9th Cir. 1990) .............................................................................................6 Zeising v. Kelly, 152 F. Supp. 2d 335 (S.D.N.Y. 2001)................................................................................. 1

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ARGUMENT I. THE COMPLAINT SHOULD BE DISMISSED BECAUSE IT LACKS SUFFICIENT FACTUAL ALLEGATIONS ESTABLISHING THAT BOYD HAS STANDING TO ASSERT A CLAIM UNDER THE SHERMAN ACT OR STATING A CLAIM THEREUNDER. Rule 12(b)(6) motions test the sufficiency of a pleading. A pleader must do more than merely incant labels, conclusions and the formulaic elements of a cause of action. As this Court recently stated when dismissing another complaint filed by Boyd,: A complaint does not need detailed factual allegations, however, "a plaintiff's obligation to provide the `grounds' of his `entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." The "[f]actual allegations must be enough to raise a right to relief above the speculative level on the assumption that all of the complaint's allegations ... are true (even if doubtful in fact)." Boyd v. Nannas, C.A. No. 07-378-JJF, Mem. Op. at 3-4 (D. Del. July 30, 2007) (quoting Bell Atl. Corp. v. Twombly, 127 S. Ct. 1955, 1965 (2007)). In his answering brief, Boyd does not cite a single factual allegation from his Complaint as a basis for opposing the motion to dismiss filed by TemPay, Inc. ("TemPay"). Instead, Boyd attempts to overcome the fatal deficiencies in his pleading by seeking to inject new allegations that appear for the first time in his brief. These new allegations are not properly before the Court on TemPay's motion to dismiss. See Zeising v. Kelly, 152 F. Supp. 2d 335, 344 (S.D.N.Y. 2001) ("Plaintiff cannot `cure' his pleading deficiencies in the complaint by addressing them in his motion papers."); see also Commonwealth of Pennsylvania v. PepsiCo, Inc., 836 F.2d 173, 181 (3d Cir. 1987). Boyd's introduction of new allegations in his responsive brief is an improper attempt to counter the primary thrust of Tempay's motion, which is that the complaint fails to allege facts

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that, accepted as true, would not establish claims upon which relief can be granted. Accordingly, this Court should dismiss Boyd's complaint. II. THE NEW ALLEGATIONS IN BOYD'S BRIEF DO NOT CURE THE FATAL DEFICIENCIES IN HIS PLEADING. Even if the Court were to consider the new allegations in Boyd's brief, which now clearly focus the claim as an antitrust claim, the motion to dismiss should be granted. Boyd's new allegations are wholly conclusory and constitute nothing more than a "formulaic recitation of the elements of a cause of action" that the United States Supreme Court has explicitly rejected as a basis for asserting an antitrust claim. Twombly, 127 S. Ct. at 1965. As the Third Circuit Court of Appeals observed in affirming the dismissal of an antitrust claim that contained far more detailed allegations than those before the Court here: [W]e need not accept as true "unsupported conclusions and unwarranted inferences. . . Nor can we assume that the [plaintiff] can prove facts that it has not alleged... City of Pittsburgh v. West Penn Power Comp., 147 F.3d 256 (3d Cir. 1998). A. Boyd Has Not Established That He Has Standing To Maintain His Claims against TemPay.

A threshold standing flaw is revealed in plaintiff's expanded assertion of his claims in his brief. His allegations repeatedly refer to conduct that he says caused harm, not to him, but to a company known as Allstaff, Inc. By way of example only, the following allegations appear at pages 2 and 3 of Plaintiff's Response1. 1. Tempay has committed embezzlement extortion, identity theft, bank fraud to destroy my company (Allstaff, Inc). (Page 2 0f 5) 2. This conspiracy has eliminated Willam Boyd's Allstaff, Inc. from ever competing in this industry. (Page 2 of 5)
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The pages of Plaintiff's response are not numbered, so the page references are from the electronic filing stamp appearing at the top of the document.

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3. TemPay has clients across the United States and Allstaff serviced Delaware, Maryland, Pennsylvania and new Jersey. (Page 3 of 5) 4. TempPay, John Boyd, Krista Garrettson, Wilmington Trust and Insurance and Financial Services embezzled money from Allstaff. (Page 3 of 5) 5. TemPay conspired with John Boyd, Krista Garrettson, Wilmington Trust, Robin (Rizzo) Boyd, Insurance and Financial Services, Harry Morris, Stratus and all of Tempay's clients to eliminate Allstaff's ability to compete in this horizontal market. (Page 3 of 5)(emphasis supplied) None of these allegations, which are merely conclusory assertions of legal theories alleged to support the relief requested, contain a sufficient factual predicate to sustain the claims asserted. Even if they did, however, it is clear as a matter of law that plaintiff Boyd has no standing to assert claims belonging to Allstaff, Inc., a separate incorporated entity. See, e.g., Borkowski v. Fraternal Order of Police, Philadelphia Lodge No. 5, 155 F.R.D. 105, 113, (E.D.Pa. 1994) (in the absence of direct individual injury, a corporate shareholder or officer lacks standing to sue for an injury to the corporation); Deaktor v. Fox Grocery Company, 332 F.Supp. 536, 541 (W.D. Pa. 1971) (shareholders and employees of a corporation have no claim for relief under the antitrust laws for injuries they suffer as a consequence of the injury done to a corporation by a defendant's conduct in violation of the antitrust laws). B. Boyd's Brief Does Not Assert Sufficient Facts To State A Claim Under Section 1 Of The Sherman Act.

Courts do not permit antitrust claimants under Section 1 to set in motion costly antitrust discovery merely by using the buzz word "conspiracy." See, e.g., Twombly, 127 S. Ct. at 196667 (holding that the antitrust conspiracy alleged must be "plausible" in order to survive a motion to dismiss). Boyd "must do more than merely allege that a conspiracy exists, [he] must provide some factual basis for that allegation." Telsat v. Entertainment & Sports Programming Network,

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753 F. Supp. 109, 115 (S.D.N.Y. 1990); see also Fuentes v. South Hills Cardiology, 946 F.2d 196, 201 (3d Cir. 1991). Boyd has not and cannot plead facts meeting this burden. The Third Circuit has expressly rejected conclusory assertions of a conspiracy similar to those made by Boyd. See e.g., Pennsylvania ex rel. Zimmerman v. PepsiCo, Inc., 836 F.2d 173, 181 (3d Cir. 1988) ("Only allegations of conspiracy which are particularized ... will be deemed sufficient."). The Ninth Circuit ruled similarly in Marian Bank v. Electronic Payment Servs., Inc., 1997 WL 811552 (D. Del. Dec. 30, 1997); see also Medtronic Minimed Inc. v. Smiths Med. MD Inc., 371 F. Supp. 2d 578, 586-87 (D. Del. 2005). In other words, Boyd must plead factual allegations, consistent with and subject to the good faith requirements of Fed.R.C.P. No. 11, that TemPay possessed and utilized monopoly power to "foreclose competition" in the relevant market. Medtronic, 371 F. Supp. 2d at 586-87 (quoting United States v. Dentsply Int'l, Inc., 399 F.3d 181, 191 (3d Cir. 2005)). Boyd has not done so and cannot do so. C. Boyd's Brief Does Not Assert Sufficient Facts To State A Claim Under Section 2 Of The Sherman Act.

Boyd has failed to allege facts evidencing the relevant market. That defect is fatal to his Section 2 claim. Superior Models, Inc. v. Tolkien Enterprises, 1981 WL 40556 (D. Del. Aug. 14, 1981) ("With respect to plaintiff's section 2 charge, in the Third Circuit, along with a vast majority of other Circuits, the definition of the relevant market is also required in cases charging an attempt to monopolize.") (citing Coleman Motor Co. v. Chrysler Corp., 525 F.2d 1338 (3d Cir. 1975)). Furthermore, Boyd has not alleged any facts demonstrating that the TemPay had a "specific intent to monopolize" or that the TemPay engaged in "anticompetitive conduct."

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D.

Boyd Had Not Asserted Facts Sufficient To Establish A Conspiracy To Monopolize.

Boyd's brief also states that TemPay and its alleged sponsors "conspire[ed] to monopolize the temporary market for construction and industrial workers and the financing needed among several states". This assertion constitutes nothing more than a token effort at a formulaic recitation of the elements of a claim. It does not come anywhere close to satisfying Boyd's burden of pleading credible facts that evince (i) the existence of a combination or conspiracy to monopolize; (ii) an overt act in furtherance of the conspiracy; and (iii) a specific intent to monopolize. Howard Hess Dental Laboratories, Inc. v. Dentsply International, Inc., ___ F. Supp. 2d ___, 2007 WL 2807292 (D. Del. Sept. 26, 2007). Boyd's Section 2 conspiracy to monopolize claim suffers from the same defect as his Section 1 claim: the absence of any credible, factual allegations from which the Court could reasonably infer the existence of a conspiracy. In summary, even when the new allegations in his brief are considered, which they should not be, they do not cure the fatal pleading deficiencies that mandate dismissal of this action. These new allegations demonstrate that (1) plaintiff has no standing to assert the claims as a matter of law, and (2) even if he did, his claims of monopolization, attempted monopolization and conspiracy to monopolize are devoid of sufficient supporting factual allegations to pass muster and, thus, fail as a matter of law. III. BOYD'S REQUEST TO AMEND HIS COMPLAINT SHOULD BE DENIED BECAUSE IT WOULD BE FUTILE. In the last sentence of his brief, Boyd requests "that the Court allow [him] a reasonable time to retain counsel and amend [his] complaint." (Ans. Br. at 6). Although a plaintiff may be entitled to amend his complaint as a matter of right under Rule 15(a) where no responsive

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pleading has been filed, the right to amend should be denied if the amendment would be futile. Roberts v. The Mayor and Burgesses of the London Borough of Brent, 2003 WL 21543889 (3d Cir. July 9, 2003). "Amendment of the complaint is futile if the amendment will not cure the deficiency in the original complaint or if the amended complaint cannot withstand a renewed motion to dismiss." Jablonski v. Pan Am. World Airways, Inc., 863 F.2d 289, 292 (3d Cir. 1988) (citations omitted); see also Wages v. Internal Revenue Service, 915 F.2d 1230, 1235 (9th Cir. 1990) (denying pro se plaintiffs' motion to amend because the amendment would not cure the "fundamental defects" in the complaint). The only additional facts that Boyd has identified for inclusion in an amended complaint are those set forth in his brief. As explained above, consideration of those allegations would not cure the fatal defects in Boyd's pleading. Accordingly, the Court should deny Boyd's request to amend his complaint because amendment here would be futile.

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CONCLUSION For the foregoing reasons, and the reasons stated in its opening brief, defendant TemPay respectfully requests that this Court grant its motion to dismiss the complaint pursuant to Rule 12(b)(6) for failure to state a claim for relief, and deny plaintiff William Boyd's request, in the alternative, for leave to amend his complaint. Respectfully submitted, McCARTER & ENGLISH, LLP By: Dated: December 10, 2007 /s/ Katharine L. Mayer Katharine L. Mayer (DE Bar ID #3758) Renaissance Centre 405 N. King Street, 8th Floor Wilmington, DE 19801 (302) 984-6300 (302) 984-6399 (fax) [email protected] Attorneys for Defendant, TemPay, Inc.

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