Dodge Data & Analytics LLC v ISqFt Inc Et Al Ohsdce-15-00698 0026.0

8/19/2019 Dodge Data & Analytics LLC v ISqFt Inc Et Al Ohsdce-15-00698 0026.0

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIOWESTERN DIVISION

DODGE DATA & ANALYTICS, LLC,

Plaintiff,

v.

iSqFt INC.; CONSTRUCTION MARKET

DATA GROUP, LLC; CONSTRUCTION

DATA CORPORATION, LLC; andBIDCLERK, INC.,

Defendants.

)

)

)

)

)

)

)

Case No. 1:15-cv-00698

Judge Timothy S. Black

ORAL ARGUMENT REQUESTED

MOTION OF DEFENDANTS iSqFt, INC., CONSTRUCTION MARKET DATA GROUP,

LLC, CONSTRUCTION DATA CORPORATION, LLC, AND BIDCLERK, INC. TO

DISMISS COMPLAINT

Pursuant to Federal Rule of Civil Procedure 12(b)(6), Defendants iSqFt, Inc.,

Construction Market Data Group, LLC, Construction Data Corporation, LLC, and BidClerk, Inc.

(“Defendants”) move for an order dismissing, with prejudice, the Complaint of Dodge Data &

Analytics, LLC (“Dodge”), for failure to state a claim upon which relief can be granted.

Defendants’ motion is based on the Memorandum submitted herewith and any

subsequent briefing, the Complaint, and any other matter of which this Court may properly take

judicial notice.

Defendants respectfully request oral argument pursuant to Southern District of Ohio

Local Rule 7.1(b)(2), in light of the complexity and public importance of the issues presented,

Case: 1:15-cv-00698-TSB Doc #: 26 Filed: 01/05/16 Page: 1 of 37 PAGEID #: 97


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particularly in the antitrust claims, in which Dodge seeks to deter legitimate competition that

benefits customers.

Dated: January 5, 2016

By: /s/ Mark C. Bissinger

Mark C. Bissinger (0012738)Mark A. VanderLaan (0013297)Thomas M. Connor (0082462)DINSMORE & STOHL255 E. 5th St.1900 Chemed CenterCincinnati, OH 45202

Telephone: (513) 977-8200Fax: (513) 977-8141Email: [email protected]

[email protected]@dinsmore.com

Charles E. Elder (admitted pro hac vice)Curt K. Brown (admitted pro hac vice)IRELL & MANELLA LLP1800 Ave. of the StarsLos Angeles CA, 90067Telephone: (310) 277-1010Email: [email protected]

[email protected]

Counsel for DefendantsiSqFt, Inc., Construction Market DataGroup, LLC, Construction DataCorporation, LLC, and BidClerk, Inc.



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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIOWESTERN DIVISION

DODGE DATA & ANALYTICS, LLC,

Plaintiff,

v.

iSqFt INC.; CONSTRUCTION MARKET

DATA GROUP, LLC; CONSTRUCTION

DATA CORPORATION, LLC; andBIDCLERK, INC.,

Defendants.

)

)

)

)

)

)

)

Case No. 1:15-cv-00698

Judge Timothy S. Black

ORAL ARGUMENT REQUESTED

MEMORANDUM OF DEFENDANTS iSqFt, INC., CONSTRUCTION MARKET DATA

GROUP, LLC, CONSTRUCTION DATA CORPORATION, LLC, AND BIDCLERK,

INC. IN SUPPORT OF MOTION TO DISMISS



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COMBINED TABLE OF CONTENTS AND SUMMARY

PURSUANT TO S.D. OHIO CIV. R. 7.2(a)(3)

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I. INTRODUCTION........................................................................................................... 1

II. FACTUAL AND PROCEDURAL BACKGROUND .................................................. 3

A. The iSqFt Corporate Family .............................................................................. 3

B. The Alleged Market for “Nationwide CPI”— A Fixed Cost Business ............ 3

C. Prior Litigation Involving Dodge and CMD .................................................... 6

III. DODGE HAS FAILED TO PLEAD A VALID ANTITRUST CLAIM. ................... 6

A. Legal Standards .................................................................................................. 6

To survive a motion to dismiss, a plaintiff must allege facts sufficient “to raise a right to relief

above the speculative level.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In

determining whether a plaintiff has alleged “enough facts to state a claim to relief that is plausible on its face,” Twombly, 550 U.S. at 570, a court need not accept as true legal

conclusions or unwarranted factual inferences, or mere “labels and conclusions.” Id . at 555.

Additional authority: Crane & Shovel Sales Corp. v. Bucyrus-Erie Co., 854 F.2d 802,805 (6thCir. 1988); Mich. Div.-Monument Builders of N. Am. v. Mich. Cemetery Assoc., 524 F.3d 726,

731 (6th Cir. 2008); Total Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield ,

552 F.3d 430, 434 (6th Cir. 2008).

B. Dodge Fails To Allege Antitrust Injury ............................................................ 7

Dodge lacks standing to bring its antitrust claims because it has not suffered antitrust injur y , i.e.,

an injury resulting from anticompetitive conduct of the sort the antitrust laws are intended to

avoid. Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 488 (1977); NicSand, Inc. v.3M Co., 507 F.3d 442, 450 (6th Cir. 2007). Dodge does not and cannot allege any injury to

competition – it only alleges that it is now being forced to compete on price. Dodge does not

claim it is unable to compete with iSqFt’s lower prices. On the contrary, Dodge admits that it

was able to discount its prices to avoid losing customers (what Dodge calls “ price erosion”) – butDodge does not allege that lowering its prices was unprofitable. Compl. ¶ 58. Dodge also

alleges injury from mergers resulting in the combined iSqFt entity because the “end result” was amarket with essentially two competitors. Compl. ¶ 46. Yet the Complaint concedes that this has

been the market equilibrium for nearly a century. Compl. ¶ 40. All that occurred here, is that themarket simply reverted to its equilibrium of two firms instead of Dodge’s monopoly – a pro-

competitive development.

Additional authority: Brown Shoe Co. v. U.S., 370 U.S. 294, 320 (1962); Cargill, Inc. v. Monfort

of Colo., Inc., 479 U.S. 104, 110 (1986); Valley Products Co., Inc. v. Landmark , 128 F.3d 398,



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403 (6th Cir. 1997); Indeck Energy Servs. v. Consumers Energy Co., 250 F.3d 972, 978-79 (6th

Cir. 2000).

C. Dodge Fails To Plead Attempted Monopolization ......................................... 10

“[T]o plead a claim for attempted monopolization under Section 2 of the Sherman Act, a plaintiffmust establish three elements: ‘(1) that the defendant has engaged in predatory or

anticompetitive conduct with (2) a specific intent to monopolize and (3) a dangerous probability

of achieving monopoly power.’” Scooter Store, Inc. v. SpinLife.com, LLC , 777 F. Supp. 2d1102, 1115 (S.D. Ohio 2011) (quoting Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456

(1993)). Failure to satisfy any one of these elements requires dismissal; Dodge fails as to all

three.

1. Dodge Does Not And Cannot Allege Predatory Pricing .................... 10

To plead a claim for attempted monopolization premised on a predatory pricing theory, the plaintiff must allege facts establishing: (1) that the prices complained of are below an

appropriate measure of its rival’s costs; and, (2) that the defendant had “a dangerous probability

of recouping its investment in below-cost prices.” Brooke Group Ltd. v. Brown & WilliamsonTobacco Corp., 509 U.S. 209, 224. Dodge’s Complaint flunks both parts of this test.

Additional authority: Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 589(1986).

(a) Dodge Does Not Plead Facts Showing Below-Cost

Pricing. ....................................................................................... 11

In the Sixth Circuit, to establish a prima facie case for predatory pricing, a plaintiff must allege

facts showing the defendant priced below its average variable (or marginal) cost. Spirit Airlinesv. Nw. Airlines, Inc., 431 F.3d 917, 938 (6th Cir. 2005). Dodge’s own admissions in its

Complaint eviscerate its predatory pricing theory as they show that the market for nationwide

CPI is a fixed -cost business, with little or no variable costs. Furthermore, Dodge’s below-cost pricing theory is not based on any facts about iSqFt’s costs, but instead is “[b]ased upon Dodge’s

own price structure.” Compl. ¶ 59. But even if the Complaint had alleged facts about iSqFt’s

costs, it alleges nothing about iSqFt ’ s current pri cing .

Where, as here, “‘the complaint itself gives reasons’ to doubt plaintiff ’s theory . . . it is not [the

court’s] task to resuscitate the claim but to put it to rest.” NicSand , 507 F.3d at 458 (quotingTwombly, 550 U.S. at 568). Dodge’s own Complaint provides plenty of reasons to doubt its predatory pricing theory. Dismissal is therefore warranted.

Additional authority: Brooke, 509 U.S. at 226; Astra Media Grp., LLC v. Clear Channel Taxi

Media, LLC , 679 F. Supp. 2d 413 (S.D.N.Y. 2009) aff ’ d in part, vacated in part, remanded, 414F. App’x 334 (2d Cir. 2011); Affinity LLC v. GfK Mediamark Research & Intelligence, LLC , 547



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F. App’x 54, 56 (2d Cir. 2013); Midwest Auto Auction, Inc. v. McNeal , No. 11-14562, 2012 WL

3478647, at *6 (E.D. Mich. Aug. 14, 2012).

(b) Dodge Has Not Pled a “Dangerous Probability Of

Recoupment.” ............................................................................ 13

Even if Dodge had been able to plead below-cost pricing (and it has not), the Complaint still fails

to plead that there was any possibility of recoupment. This is fatal to the claim. Brooke, 509

U.S. at 225. Here, Dodge never claims it would be driven from the market by iSqFt’s prices; onthe contrary, Dodge pleads that it has been able to lower prices to retain customers. Compl. ¶ 58.

It merely provides an artfully worded hypothetical that “if ” Dodge were driven from the market,

then iSqFt would have the “ability” to charge higher prices. Compl. ¶ 54 (emphasis added).

Merely alleging the “ability” to recoup is insufficient. Energy Conversion Devices Liquidation

Tr. ex rel. Madden v. Trina Solar Ltd., No. 13-14241, 2014 WL 5511517, at *6 (E.D. Mich. Oct.

31, 2014).

Dodge’s recoupment theory also fails because its own allegations demonstrate there is no barrierto market entry, as evidenced by the Complaint’s discussion of several recent market entrants.

Further, Dodge’s sole basis for pleading barriers to entry is that it incurs high fixed costs. But to

plead a barrier to entry for antitrust purposes in the Sixth Circuit, a plaintiff must allegesomething more than just high fixed costs. See Spirit Airlines, 431 F.3d at 927.

(c) Plaintiff Alleges No Facts Concerning Predatory

Intent. ......................................................................................... 15

Dodge has failed to plead any facts concerning predatory intent. This independently warrants

dismissal. Richter Concrete Corp. v. Hilltop Concrete Corp., 691 F.2d 818, 827 (6th Cir. 1982).

Additional authority: D.E. Rogers Assocs., Inc. v. Gardner-Denver Co., 718 F.2d 1431, 1434-1436 (6th Cir. 1983).

2. Dodge’s Other Allegations Are Insufficient to Plead

Attempted Monopolization. ................................................................. 16

(a) The Alleged Mergers Did Not Create A Dangerous

Probability of Monopolization. ................................................ 16

Dodge does not and cannot plead that iSqFt has a “dangerous probability of achieving monopoly power ” through its mergers and acquisitions, because, as Dodge alleges, these combinations

resulted in a combined entity that possesses, at most, a 50% market share. Compl. ¶ 53. Fifty

percent market share is simply not enough. United States v. Empire Gas Corp., 537 F.2d 296,

306 (8th Cir. 1976); Richter , 691 F.2d at 826. Further, the Complaint states, “For most of thelast one hundred years, the market for nationwide CPI has been a one- or two-player market.”

Compl. ¶ 40. This statement plainly acknowledges that competition has not been harmed as a

consequence of iSqFt’s alleged acquisitions of BidClerk, CMD, and CDC.



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(b) Dodge’s Claim That CMD Used Dodge’s Trade

Secrets Is Insufficient To Plead Attempted

Monopolization. ......................................................................... 17

Dodge’s allegations concerning CMD’s prior hiring of employees who possessed Dodge’sconfidential information cannot support a claim for attempted monopolization. First, Dodge

does not have standing to bring this claim because, as Dodge admits, this is a claim that it no

longer owns – its former owner, McGraw Hill, does. Compl. ¶ 39; Sanford Inv. Co. v. Ahlstrom

Mach. Holdings, Inc., 198 F.3d 415, 425 (3 Cir. 1999); Cranpark, Inc. v. Rogers Grp., Inc., No.

4:04CV1817, 2014 WL 3749401, at *5 (N.D. Ohio July 30, 2014). Second, Dodge alleges no

facts that iSqFt is currently using Dodge’s confidential information.

(c) Dodge’s Claims Regarding Trademarks and

Restrictive Covenants Are Irrelevant To Its Alleged

Antitrust Claims. ....................................................................... 18

Dodge’s trademark infringement claims do not support its antitrust claims because Dodge admits

its marks are for products outside the relevant market . “Dodge BidPro” is a “softwareapplication and website service aimed at local and regional subcontractors” – not “ building

product manufacturers” in the market for nationwide CPI. Compare Compl. ¶¶ 27 & 74. Dodge

also admits that its “Sweets” catalog is distinct from the sale of nationwide CPI. Compl. ¶ 62.As these products are in completely different markets than the market that is the subject of the

antitrust claims, any conduct affecting those products is irrelevant to those antitrust claims.

Dodge’s allegations regarding iSqFt’s restrictive employment covenants relate to the labor

market for employees. Dodge does not even attempt to explain how these covenants make itmore likely that iSqFt could monopolize the alleged product market for “nationwide CPI.”

Moreover, these restrictive covenants are perfectly legal, and pro-competitive.

D. Dodge’s Conspiracy Claims Fail Because iSqFt Cannot Conspire

With Itself. ......................................................................................................... 19

The Supreme Court has held that a parent corporation cannot conspire with its wholly owned

subsidiaries, and the Sixth Circuit has expanded this doctrine to hold that sister companies

sharing the same corporate parent are incapable, as a matter of law, of conspiracy under theSherman Act. Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752, 777 (1984); Directory

Sales Mgmt. Corp. v. Ohio Bell Tel. Co., 833 F.2d 606, 611 (6th Cir. 1987); Potters Med. Ctr. v.City Hosp. Ass’ n, 800 F.2d 568, 574 (6th Cir. 1986). The Complaint concedes that Defendantsare one “combined entity.” Compl. ¶ 44. Dodge therefore cannot plead a conspiracy under

Sections 1 or 2 of the Sherman Act.



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IV. DODGE FAILS TO PLEAD ANY VALID TRADEMARK-BASED

CLAIMS..................................................................................................................................... 20

Dodge has not alleged any possible likelihood of confusion between its marks and the

purportedly infringing marks. Dismissal is proper because “[t]he ‘degree of [dis]similarity’ . . .overwhelms any possibility of confusion.” Le Book Pub., Inc. v. Black Book Photography, Inc.,418 F. Supp. 2d 305, 311 (S.D.N.Y. 2005). Because courts apply this same test to claims for

federal unfair competition and violations of the Ohio Deceptive Trade Practices Act, Claims 5, 9,

7, and 10 should similarly be dismissed. Champions Golf Club, Inc. v. The Champions Golf

Club, Inc., 78 F.3d 1111, 1123 (6th Cir. 1996); Cesare v. Work , 520 N.E.2d 586, 589 (Ohio Ct.

App. 1987). Dismissal of Dodge’s dilution claim is also warranted because Dodge has alleged

no facts to support it.

Additional authority: Hensley Mfg. v. ProPride, Inc., 579 F.3d 603, 610 (6th Cir. 2009).

V.

DODGE FAILS TO STATE A CLAIM FOR TORTIOUSINTERFERENCE. .................................................................................................................... 22

Dodge cannot state a claim for tortious interference with business relationships because it hasfailed to identify a single customer that it lost as a result of the purported interference. Ginn v.

Stonecreek Dental Care, 30 N.E.3d 1034, 1040 (Ohio Ct. App. 2015). Dodge also cannot

predicate this claim on its below-cost pricing theory. U.S. Anchor Mfg., Inc. v. Rule Indus., Inc.,264 Ga. 295, 298 (1994); Ideal Dairy Farms, Inc. v. Farmland Dairy Farms, Inc., 659 A.2d 904,

936 (N.J. Super. Ct. App. Div. 1995).

VI. DODGE FAILS TO STATE A VALID DECLARATORY RELIEF

CLAIM. ...................................................................................................................................... 22

Dodge’s claim for declaratory judgment should be dismissed because iSqFt’s restrictivecovenants are enforceable in each state in which it operates. See Atl. Tool Die v. Kacic, No.

2717-M, 1998 Ohio App. LEXIS 5485, *4 (Ohio Ct. App., Medina County Nov. 18, 1998); see

Fla. Stat. Ann. §542.33; see also Fla. Hematology & Oncology Specialists v. Tummala, 969 So.2d 316, 317 (Fla. 2007); Ga. Code Ann. §13-8-50; see Reliable Fire Equip. Co. v. Arredondo,

965 N.E.2d 393, 396 (Il. 2011).

VII. LEAVE TO AMEND SHOULD BE DENIED ........................................................... 24

Because Dodge’s claims suffer from numerous, independent fatal deficiencies, its claims should be dismissed with prejudice and without leave to amend. Arnold v. Petland, Inc., No. 2:07-CV-

01307, 2009 WL 816327, at *11 (S.D. Ohio Mar. 26, 2009).

VIII. CONCLUSION ............................................................................................................. 24

CERTIFICATE OF SERVICE ............................................................................................... 25



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TABLE OF AUTHORITIES

Page(s)

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Cases

Affinity LLC v. GfK Mediamark Research & Intelligence, LLC ,547 F. App’x 54 (2d Cir. 2013) ................................................................................. 12

Arnold v. Petland, Inc., No. 2:07-CV-01307, 2009 WL 816327 (S.D. Ohio Mar. 26, 2009) .......................... 24

Ashwander v. Tenn. Valley Auth.,

297 U.S. 288 (1936) ................................................................................................... 23

Astra Media Grp., LLC v. Clear Channel Taxi Media, LLC ,

679 F. Supp. 2d 413 (S.D.N.Y. 2009) aff’d in part, vacated in part, remanded,

414 F. App’x 334 (2d Cir. 2011) ............................................................................... 12

Atl. Tool Die v. Kacic,

No. 2717-M, 1998 Ohio App. LEXIS 5485 (Ohio Ct. App., Medina County Nov. 18, 1998) ........................................................................................................... 22

Bell Atl. Corp. v. Twombly,

550 U.S. 544 (2007) ............................................................................................ passim

Brooke Grp. Ltd. v. Brown & Williamson Tobacco Corp.,

509 U.S. 209 (1993) ....................................................................................... 10, 12, 13

Brown Shoe Co. v. U.S.,370 U.S. 294 (1962) ..................................................................................................... 7

Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.,

429 U.S. 477 (1977) ....................................................................................... 1, 7, 8, 16

Cargill, Inc. v. Monfort of Colo., Inc.,

479 U.S. 104 (1986) ........................................................................................... 7, 8, 16

Cesare v. Work ,

520 N.E.2d 586 (1987)............................................................................................... 20

Champions Golf Club, Inc. v. The Champions Golf Club, Inc.,78 F.3d 1111 (6th Cir. 1996) ..................................................................................... 20

Copperweld Corp. v. Indep. Tube Corp.,467 U.S. 752 (1984) ............................................................................................. 19, 20

Crane & Shovel Sales Corp. v. Bucyrus-Erie Co.,

854 F.2d 802 (6th Cir. 1988) ....................................................................................... 7



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Page(s)

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Cranpark, Inc. v. Rogers Grp., Inc.,

No. 4:04CV1817, 2014 WL 3749401 (N.D. Ohio July 30, 2014) ............................. 17

D.E. Rogers Assocs., Inc. v. Gardner-Denver Co.,

718 F.2d 1431 (6th Cir. 1983) ................................................................................... 16

Directory Sales Mgmt. Corp. v. Ohio Bell Tel. Co.,

833 F.2d 606 (6th Cir. 1987) ..................................................................................... 19

Energy Conversion Devices Liquidation Tr. ex rel. Madden v. Trina Solar Ltd.,

No. 13-14241, 2014 WL 5511517 (E.D. Mich. Oct. 31, 2014) ........................... 14, 15

Fla. Hematology & Oncology Specialists v. Tummala,

969 So. 2d 316 (Fla. 2007)......................................................................................... 22

Ginn v. Stonecreek Dental Care,30 N.E.3d 1034 (Ohio Ct. App. 2015) ....................................................................... 22

Hensley Mfg. v. ProPride, Inc.,579 F.3d 603 (6th Cir. 2009) ..................................................................................... 20

Ideal Dairy Farms, Inc. v. Farmland Dairy Farms, Inc.,

659 A.2d 904 (N.J. Super. Ct. App. Div. 1995)......................................................... 22

Indeck Energy Servs. v. Consumers Energy Co.,

250 F.3d 972 (6th Cir. 2000) ....................................................................................... 9

Le Book Pub., Inc. v. Black Book Photography, Inc.,418 F. Supp. 2d 305 (S.D.N.Y. 2005)........................................................................ 20

Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,

475 U.S. 574 (1986) ............................................................................................. 10, 14

Med. Ctr. at Elizabeth Place v. Premier Health Partners,

No. 3:12-CV-26, 2014 WL 7739356 (S.D. Ohio Oct. 20, 2014) .............................. 20

Mich. Div.-Monument Builders of N. Am. v. Mich. Cemetery Assoc.,

524 F.3d 726 (6th Cir. 2008) ....................................................................................... 7

Midwest Auto Auction, Inc. v. McNeal , No. 11-14562, 2012 WL 3478647 (E.D. Mich. Aug. 14, 2012) ................................ 13

NicSand, Inc. v. 3M Co.,507 F.3d 442 (6th Cir. 2007) .............................................................................. passim

Potters Med. Ctr. v. City Hosp. Ass’n,

800 F.2d 568 (6th Cir. 1986) ..................................................................................... 20



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Page(s)

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Rules

Fed. R. Civ. P. 12(b)(6)............................................................................................................ 7



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I. INTRODUCTION

Having lost the comfort of its former dominant market position and its concomitant

ability to charge supra-competitive prices, plaintiff Dodge Data & Analytics LLC (“Dodge”)

now seeks through this lawsuit to undermine price competition from the combined entity

consisting of iSqFt, Inc., Construction Market Data Group, LLC (“CMD”), Construction Data

Corporation, LLC (“CDC”), and BidClerk, Inc. (“BidClerk ”) (collectively, “iSqFt”). Unable to

continue gouging its customers with excessive prices, Dodge has had to lower its prices, and thus

reduce its profits, to compete. This is, of course, pro -competitive. Yet Dodge nevertheless

brings baseless antirust claims, as well as a hodgepodge of other disparate causes of action, none

of which is sufficient to survive a motion to dismiss.

Dodge lacks standing to bring its antitrust claims because it has not alleged an antitrust

injury. The Supreme Court has long held that antitrust plaintiffs must plead not just any injury,

but antitrust injur y – i.e., an injury of the sort the antitrust laws are intended to avoid – because

the antitrust laws are intended to protect “competition, not competitors.” Brunswick Corp. v.

Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 488 (1977). Here, Dodge does not and cannot allege

any injury to competition – it only alleges that it is now being forced to compete on price. But

the antitrust laws encourage increased price competition, as it benefits customers. The Sixth

Circuit therefore requires dismissal on the pleadings of antitrust claims wielded as a “treble-

damages sword rather than the shield against competition-destroying conduct that Congress

meant them to be.” NicSand, Inc. v. 3M Co., 507 F.3d 442, 450 (6th Cir. 2007).

The Complaint concedes that iSqFt currently has no more than a 50% share of the

relevant market – which is no greater than Dodge’s alleged market share and is a far cry from a

monopoly. Dodge’s attempted monopolization claim is therefore based primarily on the



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specious assertion that iSqFt’s prices are “ predatory” – which is contradicted by Dodge’s own

allegations. The Complaint contains detailed facts showing that the market for selling

nationwide construction project information is a fixed cost business, with minimal (if any)

variable costs. It is therefore unsurprising that Dodge is unable to allege any facts to support its

claim that iSqFt is pricing below its average variable cost. Furthermore, Dodge cannot plead that

a predatory pricing scheme could ever succeed, as it admits that the alleged market has seen

multiple new entrants in recent years. Any new entrants could undercut iSqFt’s prices, thereby

preventing it from charging monopoly prices and recouping its alleged losses from the purported

below-cost sales. Dodge’s failure to allege facts showing either pricing below average variable

cost or a dangerous probability of recoupment renders it incapable of pleading a prima facie case

of predatory pricing.

Vainly scrambling for a viable antitrust theory, Dodge throws in two “conspiracy” claims

for good measure. This is curious, given the concession in the Complaint that all four defendants

are, in fact, one single entity, and thus cannot be considered conspirators as a matter of law.

E.g., Total Benefits Planning Agency, Inc. v. Anthem Blue Cross & Blue Shield , 552 F.3d 430,

435 (6th Cir. 2008) (“The Supreme Court has held that a parent company and its wholly owned

subsidiaries are incapable, as a matter of law, of conspiracy. This Court has expanded that

position to include sister companies with the same parent.”) (citations omitted). Dodge’s other

allegations likewise do not even come close to pleading an antitrust claim.

Dodge’s other claims should be dismissed, as well. Its trademark and unfair competition

claims are based on marks that are not sufficiently similar to give rise to any likelihood of

confusion. Its claims based on the supposed misappropriation of trade secrets do not even



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belong to Dodge, as Dodge admits it assigned that claim to its former parent. And its challenge

to restrictive covenants in iSqFt’s employment agreements simply gets the law wrong.

The Complaint should be dismissed. And, given that Dodge’s claims are negated by its

own admissions, leave to amend would be futile and should not be granted.

II. FACTUAL AND PROCEDURAL BACKGROUND

A. The iSqFt Corporate Family

iSqFt is a software-as-a-service company that licenses access to its construction software

and databases to general contractors, subcontractors, manufacturers, and suppliers in the North

American commercial construction industry. The Complaint alleges that iSqFt acquired

BidClerk in October 2014, CDC in April 2015, and CMD in August 2015. Compl. ¶¶ 2, 43-44.

Dodge alleges that iSqFt, BidClerk, CDC and CMD are now “combined” into a single “entity.”

Id . ¶ 46. These mergers have enabled iSqFt to offer a broader and richer platform of products

and services, of which only the former CMD business is alleged to be a significant competitor

for Dodge’s “nationwide CPI customers.” Id . ¶ 44.1

B.

The Alleged Market for “Nationwide CPI”

It is not entirely clear what product market Dodge is alleging. According to the

Complaint, Dodge provides “construction project information” or “CPI” to construction

professionals. Compl. ¶ 20. Dodge initially defines “construction project information” to

consist of “construction project information [thus circularly defining it to mean itself], building

product information, construction plans and specifications, industry news, market research, and

1 Notably, the Complaint describes these acquisitions in non-chronological order. Later

in the Complaint, Dodge alleges that “iSqFt also attempted a merger or acquisition of Dodge,” but “was unable to acquire Dodge.” Compl. ¶ 45. The Complaint conspicuously omits any facts

about the timing of this alleged offer to purchase Dodge – because Dodge was bid out and sold to

its current owner before iSqFt allegedly acquired CMD. The Complaint also omits the fact thatDodge itself attempted to obtain CMD, but lost out in the bidding.



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industry trends and forecasts.” Id . However, two sentences later, Dodge claims that its product

is limited to “construction plans and specifications” – thus excluding “ building product

information, industry news, market research, and industry trends and forecasts.” Id . ¶ 22. Dodge

further alleges that its “customers consist of building product manufacturers (‘BPMs’)” – again,

omitting a huge number of other customers for Dodge’s and iSqFt’s data, such as general

contractors and subcontractors. Id . ¶ 27.

Dodge admits that costs in the alleged market are almost entirely fixed, not variable.

Specifically, the Complaint alleges that “Dodge employs a nationwide network of individuals

who develop relationships with architects, project owners, and other construction industry

professionals in order to obtain construction plans and specifications from them.” Compl. ¶ 23.

“After it has collected the plans and specifications from its network of sources, Dodge then

reviews and processes the plans and specifications so that they can be presented to customers.”

Id . ¶ 24. According to Dodge, its efforts to gather and process data to be included in its database

process have been “labor intensive,” requiring “considerable” up-front costs “in developing,

maintaining, and delivering its product to its customers.” Id . ¶ 25. However, Dodge alleges that

this process has subsequently become “more automated,” and thus far less costly. Id . ¶ 24.

CPI is sold to customers “through web-based programs accessed by those customers who

pay a subscription fee.” Compl. ¶ 24. Dodge admits that the price of a subscription is based, not

on the marginal cost of providing it, but on other factors: “The price of that subscription would

depend upon the level of detail and geographical area in which the contractor was interested, as

well as the number of licenses purchased by the contractor.” Id . ¶ 26. Indeed, Dodge does not

allege that it incurs any variable costs – which makes sense, because the marginal cost of adding



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a new subscriber to an existing database is essentially zero, and the cost of setting up a database

would be the same whether it has 100 subscribers or 100,000.

Dodge alleges that it primarily competes with CMD and that, “[l]ike Dodge, CMD has an

extensive network of employees or contractors who are responsible for obtaining specifications

and plans from architects, project owners, and others in the industry. And, like Dodge, it

provides those plans and specifications to its customers through a web-based subscription

service.” Compl. ¶ 31. Dodge does not allege that CMD or iSqFt incur any variable costs

associated with these “web-based subscription services.” Id .

The Complaint contains a table comparing Dodge’s prices to CMD’s prices, claiming that

CMD offered prices for certain products that were as much as 80 percent lower than the prices

offered by Dodge. Compl. ¶ 56. But Dodge fails to plead any data or other facts comparing

CMD’s prices to CMD’s costs with respect to those products. Furthermore, the Complaint

concedes that these offers by CMD occurred before iSqFt acquired CMD, as Dodge alleges that

it started losing those customers to CMD “since November 2014,” ten months before iSqFt

announced the CMD merger in August 2015. See Compl. ¶¶ 44, 58. Notably, the Complaint

says nothing about iSqFt’s current prices or costs.

Dodge does not allege that it is unable to compete profitably with iSqFt’s current prices

(or, for that matter, CMD’s earlier price quotes). It only vaguely alleges that it lost “millions of

dollars in annual sales” to CMD and “hundreds of thousands of dollars more” in “ price

erosion” – i.e., having to lower its prices to more competitive levels instead of continuing to

charge supra-competitive prices – “since November 2014.” Compl. ¶ 58.



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C. Prior Litigation Involving Dodge and CMD

In 2009, Reed Construction Data (which was subsequently purchased by CMD) sued

Dodge (then a division of McGraw Hill) alleging, inter alia, fraud and misappropriation of trade

secrets. Dodge’s predecessor, McGraw Hill, filed a counterclaim, also alleging misappropriation

of trade secrets, among other things. That counterclaim alleged the exact same misappropriation

theory Dodge alleges here: that two former employees allegedly took customer information with

them when they went to work for Reed. Compl. ¶ 37; Order and Judgment, Reed Construction

Data, Inc. v. The McGraw-Hill Companies, Inc., S.D.N.Y. Case No. 09-8578, ECF Docket

No. 220, at 2.

McGraw Hill’s counterclaims were dismissed without prejudice after partial summary

judgment was entered on certain other claims. Id . An appeal is pending in the Second Circuit.

Dodge admits that McGraw Hill “retained” the misappropriation counterclaim when it sold

Dodge to its current owners. Compl. ¶ 39. Yet Dodge tries to make the same claim here,

disguised as other claims, notwithstanding its admission that it does not own that claim.

III.

DODGE HAS FAILED TO PLEAD A VALID ANTITRUST CLAIM

The Complaint contains three antitrust claims. In its First Claim for Relief, Dodge asserts

that iSqFt is attempting to monopolize the supposed market for “nationwide CPI.” In its Second

and Third Claims for Relief, Dodge claims that the combined iSqFt entity somehow conspired

with itself to accomplish that end. All of these claims should be dismissed.

A. Legal Standards

The Supreme Court has cautioned district courts not to simply rubber-stamp antitrust

claims, given the substantial burden and expense of discovery in such cases. Bell Atl. Corp. v.

Twombly, 550 U.S. 544, 557-560 (2007). Twombly “counsel[s] against sending the parties into



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r educes, competition.” 507 F.3d at 449-50 (quotations and citation omitted). The antitrust injury

“requirement means that one competi tor may not use the anti trust laws to sue a ri val merely for

vigorous or intensif ied competiti on .” Id. at 450 (emphasis added). The Sixth Circuit “has been

reasonably aggressive in using the antitrust injury doctrine to bar recovery where the asserted

injury . . . flows directly from conduct that is not itself an antitrust violation.” Valley Products

Co., Inc. v. Landmark , 128 F.3d 398, 403 (6th Cir. 1997) (affirming dismissal).

The antitrust injury doctrine arose in cases very much like this one, in which a firm

complained that a significant rival had emerged as a result of mergers or acquisitions, and that

the firm was forced to lower prices in order to compete with that rival. In Brunswick , the

plaintiff owner of a bowling alley challenged Brunswick ’s acquisition of competing bowling

alleys, complaining that it would force the plaintiff to lower prices to compete. 429 U.S. at 481.

The Supreme Court held that this did not constitute “injury of the type the antitrust laws were

intended to prevent and that flows from that which makes defendants’ acts unlawful.” Id. at 489.

In Cargill , the Supreme Court rejected the plaintiff’s argument that a merger would give the

resulting dominant firm the ability to dominate the market by driving down prices and driving up

costs, holding that:

The kind of competition that [plaintiff] alleges here, competition for increased

market share, is not activity forbidden by the antitrust laws. It is simply . . .vigorous competition. To hold that the antitrust laws protect competitors from the

loss of profits due to such price competition would, in effect, render illegal any

decision by a firm to cut prices in order to increase market share.

479 U.S. at 116.

Here, Dodge, like the plaintiffs in Brunswick and Cargill , alleges that it has been forced

to lower its prices – what Dodge calls “price erosion” – to match the more competitive prices

offered by its rival. Compl. ¶ 58. But what Dodge is alleging is in tensif ied competi tion , not an

injury to competition. Though Dodge claims that it lost customers and profits as a result of this



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competition, that is not an antitrust injury. Companies “have no statutory right to compete in the

economic marketplace on their own terms and in such a manner as to accumulate expected

profits.” Indeck Energy Servs. v. Consumers Energy Co., 250 F.3d 972, 978-79 (6th Cir. 2000).

We address Dodge’s woefully inadequate predatory pricing allegations in more detail in

the next section, but we note here that Dodge does not claim it is unable to compete with the

lower prices allegedly being offered by iSqFt. On the contrary, Dodge admits that it was able to

discount its prices to avoid losing sales. Compl. ¶ 58.2 Dodge does not allege that lowering its

prices made its business unprofitable; it merely alleges that its profits were reduced by a few

hundred thousand dollars. Id . This is not an injury to competition.

Nor can Dodge claim injury to competition simply as a result of the alleged mergers.

Dodge alleges that the “end result” of iSqFt’s acquisition of CMD, BidClerk and CMD was “a

marketplace that consists of essentially two competitors for nationwide CPI customers,” each

with roughly a 50% market share. Compl. ¶¶ 46, 53. But Dodge concedes that this has been the

market equilibrium for a century: “For most of the last one hundred years, the market for

nationwide CPI has been a one- or two-player market.” Compl. ¶ 40. All that occurred here,

according to Dodge, is that the market simply reverted to this two-firm equilibrium, rather than

Dodge remaining the single dominant firm. As alleged, this was a pro-competitive

development.3

2 Dodge lists a handful of anonymous customers to whom CMD, before it merged with

iSqFt, offered significantly better pricing than what Dodge was being paid. Compl. ¶ 56. But

Dodge does not allege that it actually lost those specific customers.

3 Dodge does not even attempt to allege antitrust injury in connection with its trademark,

misappropriation and restrictive covenant allegations. Dodge does not and cannot allege that itlost a single prospective customer or employee in connection with these claims.



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C. Dodge Fails To Plead Attempted Monopolization.

“[T]o plead a claim for attempted monopolization . . ., a plaintiff must establish three

elements: ‘(1) that the defendant has engaged in predatory or anticompetitive conduct with (2) a

specific intent to monopolize and (3) a dangerous probability of achieving monopoly power.’”

Scooter Store, Inc. v. SpinLife.com, LLC , 777 F. Supp. 2d 1102, 1115 (S.D. Ohio 2011) (quoting

Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456 (1993)). Failure to allege any one of

these three elements warrants dismissal; Dodge’s Complaint fails as to all three.

1. Dodge Does Not and Cannot Allege Predatory Pricing.

“[P]redatory pricing schemes are rarely tried, and even more rarely successful.”

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 589 (1986). “[C]utting prices

in order to increase business often is the very essence of competition.” Id . at 594; NicSand , 507

F.3d at 452 (same). The Supreme Court therefore cautions that “the costs of an erroneous

finding of liability are high” and that “mistaken findings of liability would chill the very conduct

the antitrust laws are designed to protect.” Brooke Group Ltd. v. Brown & Williamson Tobacco

Corp., 509 U.S. 209, 226 (1993) (quotations omitted).

Given the inherent dubiousness of a seller’s claim that its rival’s prices are too low, the

Supreme Court has mandated a stringent two-part test for a predatory pricing claim. “First, a

plaintiff seeking to establish competitive injury resulting from a rival’s low prices must prove

that the prices complained of are below an appropriate measure of its rival’s costs.” Brooke, 509

U.S. 209 at 222. Second, a plaintiff must also demonstrate that its rival has “a dangerous

probability of recouping its investment in below-cost prices.” Id. at 224. The Complaint flunks

both parts of this test.



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(a) Dodge Does Not Plead Facts Showing Below-Cost Pricing

In the Sixth Circuit, to plead a prima facie case for predatory pricing, a plaintiff must

allege facts showing the defendant priced below its average variable (or marginal) cost. Spirit

Airlines v. Nw. Airlines, Inc., 431 F.3d 917, 938 (6th Cir. 2005).4 Dodge not only fails to plead

facts showing that iSqFt is currently pricing below its average variable cost, its admissions in its

own complaint actually show the opposite: that the market for nationwide CPI is a fixed-cost

business with little or no variable costs.

Dodge incurs costs from “obtaining the plans and processing them for placement in

Dodge’s services.” Compl. ¶ 25. “After the plans are processed, Dodge publishes the CPI to its

customers.” Id . ¶ 24. As pleaded, publication of this data is essentially costless, as customers

can “access the plans and specifications themselves” upon buying a subscription. Id . “The price

of that subscription” is based, not on the variable cost of the subscription (which is effectively

zero), but instead “upon the level of detail and geographical area in which the contractor was

interested, as well as the number of licenses purchased by the contractor.” Id . ¶ 29.

In the face of these admissions, Dodge simply asserts that “[b]ased upon Dodge’s own

price structure, the prices offered by iSqFt/CMD to the customers outlined above, as well as

numerous other customers, are so low that they are below defendants’ average total cost and

average variable cost and thus constitute predatory pricing as a matter of law.” Compl. ¶ 59.

But this assertion is contradicted by Dodge’s own admissions about the cost structure in the

industry, which shows that variable costs are de minimis. Supra at 4. Dodge is bound by its own

admissions in the Complaint. NicSand , 507 F.3d at 458.

4 In circumstances when prices are below average total cost but above average variable

cost, a plaintiff bears a heightened burden to plead additional facts showing that the pricing was predatory. Id. Dodge alleges no such additional facts here, nor could it.



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Even apart from those fatal admissions, Dodge’s naked assertion of below-cost pricing,

without any supporting facts, is exactly the sort of “formulaic recitation of the elements of a

cause of action” that the Supreme Court has held “will not do.” Twombly, 550 U.S. at 555. In

Astra Media Grp., LLC v. Clear Channel Taxi Media, LLC , 679 F. Supp. 2d 413 (S.D.N.Y.

2009), aff ’ d in part, vacated in part, remanded, 414 F. App’x 334 (2d Cir. 2011), the plaintiff, a

rooftop taxicab advertising company, sued Clear Channel for predatory pricing, alleging that it

charged below the prevailing “industry standard of cost” for advertising rates. Id. at 425. The

court held that this did not state a claim because the plaintiff failed to provide “any information”

about the “cost of the advertising” to the defendant . Id .

Thus, it is the defendant ’ s costs that are relevant to the inquiry – not the plaintiff ’s.

Brooke, 509 U.S. at 226; Affinity LLC v. GfK Mediamark Research & Intelligence, LLC , 547 F.

App’x 54, 56 (2d Cir. 2013) (finding that complaint failed to state a claim where complaint

alleged costs were below plaintiff ’ s costs, not defendant’s, without providing facts to support the

inference). Dodge’s admission that its below-cost pricing theory is solely “[b]ased upon

Dodge’s own price structure,” and not on any information about iSqFt’s actual costs, is therefore

fatal to its claim. Compl. ¶ 59. Dodge does not allege iSqFt’s cost structure, let alone that its

prices are insufficient to recover its marginal (or average variable) costs. Nor does Dodge allege

that iSqFt’s total sales are insufficient to recoup its fixed costs.

In addition to alleging zero facts regarding iSqFt’s costs, the Complaint also says nothing

about iSqFt’s current prices. In a table found at paragraph 56 of the Complaint, Dodge merely

describes a handful of instances in which CMD – when it was a smaller company, before it

merged with iSqFt – previously beat Dodge’s prices. It does not show whether iSqFt continues

to offer prices at those levels following the merger. Even as to CMD, this table provides very



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little meaningful information. It only shows prices, without identifying the products, let alone

showing that CMD’s products were comparable. It fails to provide dates or any other details. It

does not show how CMD’s prices compared to CMD’s costs. And it does not even show

whether Dodge lost those customers to CMD. In Midwest Auto Auction, Inc. v. McNeal , No. 11-

14562, 2012 WL 3478647, at *6 (E.D. Mich. Aug. 14, 2012) (same), the court rejected similar

allegations as containing too “little specificity” or factual support. Dodge’s claim here fails for

the same reason.

In sum, where “‘the complaint itself gives reasons’ to doubt plaintiff ’s theory . . . it is not

[the court’s] task to resuscitate the claim but to put it to rest.” NicSand , 507 F.3d at 458 (quoting

Twombly, 550 U.S. at 568). Here, the Complaint provides plenty of “reasons to doubt” Dodge’s

predatory pricing claim, and this Court should therefore “ put [that claim] to rest” now. Id .

(b) Dodge Has Not Pled a “Dangerous Probability Of

Recoupment.”

“Evidence of below-cost pricing is not alone sufficient to permit an inference of probable

recoupment and injury to competition.” Brooke, 509 U.S. 209 at 226. As the Supreme Court has

explained, “[w]ithout [a dangerous probability of recoupment], predatory pricing produces lower

aggregate prices in the market, and consumer welfare is enhanced.” Id . at 224. To plead

recoupment, the Complaint must allege facts showing that “ below-cost pricing must be capable,

as a threshold matter, of producing the intended effects on the firm’s rivals, whether driving

them from the market” or “causing them to raise their prices to supracompetitive levels within a

disciplined oligopoly.” Id . at 225. As the Supreme Court has explained, pleading the likely

success of the pricing scheme is crucial to the claim because “unsuccessful predation is in

general a boon to consumers.” Id. at 224.



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Dodge’s Complaint fails to plead that there was any possibility of recoupment, let alone

the required “dangerous probability” of recoupment. This is fatal to Dodge’s claim. Nowhere

in the Complaint does Dodge allege there is any risk, let alone a “dangerous probability,” that it

could be driven from the market. The closest it comes is an artfully worded hypothetical: “i f

Dodge were driven from the market for any reason , [then] iSqFt/CMD would have the ability to

charge supra-competitive prices to its customers.” Compl. ¶ 54 (emphasis added). But Dodge

never claims it would be driven from the market by iSqFt’s prices; on the contrary, it admits it

has been able to lower its own prices to meet the alleged price competition. Id . ¶ 58. And in any

event, merely alleging the “ability” to recoup is insufficient – Dodge must allege a “dangerous

probability.” See Energy Conversion Devices Liquidation Tr. ex rel. Madden v. Trina Solar Ltd.,

No. 13-14241, 2014 WL 5511517, at *6 (E.D. Mich. Oct. 31, 2014) (dismissing claim because

“complaint merely states that, in light of Defendants’ 80% market share, Defendants have the

ability to raise prices”) (emphasis in original).

In addition, Dodge destroys its own recoupment theory by pleading allegations showing

the absence of any meaningful barriers to market entry. As the Supreme Court explained in

Matsushita: “without barriers to entry it would presumably be impossible to maintain

supracompetitive pr ices for an extended time,” because new competition would undercut those

high prices. 475 U.S. at 591, n. 15. In Energy Conversion, 2014 WL 5511517 at *6, the court

dismissed a complaint containing admissions that competitors had recently entered the market,

reasoning that those admissions made it “questionable whether Plaintiff has alleged any

probability of recoupment,” let alone a “dangerous” probability.

Here, Dodge admits that “[f]or most of the last one hundred years, the market for

nationwide CPI has been a one- or two-player market. However, star ting several years ago,



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several smal ler competi tors began to emerge .” Compl. ¶ 40 (emphasis added). “One such

competitor was BidClerk,” id., which, “[b]eginning in or around 2012,” “established itself as an

effective and growing participant in the nationwide CPI market.” Compl. ¶ 41. The Complaint

also alleges that “by 2014” CDC had also “ become a small player in the market for nationwide

CPI.” Compl. ¶ 42. This alleged evidence of repeated market entry disintegrates Dodge’s

recoupment theory. See Energy Conversion, 2014 WL 5511517 at *6.

Dodge’s sole basis for pleading barriers to entry is its claim that there are high fixed

costs. But the Sixth Circuit has held that, for a barrier to entry to be considered “substantial,”

there must be some structural aspect unique to the market – aside from cost alone – preventing

access to would-be competitors. See Spirit Airlines, 431 F.3d at 927 (finding that gate access to

airline terminals was a substantial barrier to market entry because it was “not determined by

open competition”). Dodge alleges no such structural impediment to entry here. Nor could it –

according to Dodge, all it took for BidClerk to establish an “effective and growing presence” in

the alleged market was to hire two employees from a competitor. Compl. ¶ 41. The Complaint

also pleads facts explaining why new entrants’ costs of building a database will not be

prohibitive – the previous “labor intensive nature of both obtaining the plans and processing”

data has given way to “a more automated process.” Compl. ¶¶ 24-25. Dodge’s own admissions

thus disprove a “dangerous probability” of recoupment or monopolization.

(c) Plaintiff Alleges No Facts Concerning Predatory Intent.

The final blow to Dodge’s predatory pricing theory is the failure to allege any predatory

intent. This independently warrants dismissal. Richter Concrete Corp. v. Hilltop Concrete

Corp., 691 F.2d 818, 827 (6th Cir. 1982) (finding that failure to show predatory intent fatal to

antitrust action). The closest Dodge’s Complaint comes to alleging intent is half of a quote from



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CMD ’ s president – who is no longer with the company after the merger – purportedly directing

sales staff to “do ‘whatever it takes to disrupt Dodge’s business.’” Compl. ¶ 55. Dodge omits

any information concerning the context surrounding this statement. Putting aside the fact that it

predates iSqFt’s acquisition of CMD, this statement is, at most, ambiguous. D.E. Rogers

Assocs., Inc. v. Gardner-Denver Co., 718 F.2d 1431, 1434-1436 (6th Cir. 1983) (finding colorful

statements made by defendant about plaintiff “at best ambiguous”). Dodge’s only other

mentions of “intent” are conclusory and unsupported by any facts ( see Compl. ¶¶ 60, 92, 101),

and therefore cannot insulate the Complaint from dismissal. Twombly, 550 U.S. at 555 (“labels

and conclusions” are insufficient).

2. Dodge’s Other Allegations Are Insufficient to Plead Attempted

Monopolization.

(a) The Alleged Mergers Did Not Create A Dangerous Probability

of Monopolization.

Presumably as a fallback to its failed predatory pricing theory, Dodge also claims that

iSqFt’s mergers with CMD, CDC and BidClerk constitute “anticompetitive” acts purportedly

supporting its antitrust claims. Compl. ¶¶ 93, 103, 107.5 But as Brunswick and Cargill make

clear, there is nothing inherently anticompetitive about these mergers. And, as noted above,

Dodge concedes that these mergers resulted in much-needed price competition, which has

already benefited Dodge’s customers.

5 Although Dodge claims that iSqFt tried to acquire Dodge, the Complaint conspicuously

omits any dates. Compl. ¶ 45. This is because Dodge’s former owners put it up for bid before

iSqFt acquired BidClerk, CDC, or CMD. When the transactions are considered in the order thatthey actually occurred, they show no dangerous probability of achieving monopoly power. The

Complaint also omits the fact Dodge also attempted to acquire CMD – a merger that would,

according to the Complaint, have resulted in a company with nearly 100% market share. ThatiSqFt won the bidding resulted in greater competition than the alternative.



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Dodge also fails to plead that iSqFt has a “dangerous probability of achieving monopoly

power ” through its mergers and acquisitions. Dodge alleges that these combinations resulted in a

combined entity that possesses, at most, a 50% market share. Compl. ¶ 53. Fifty percent market

share is simply not enough. United States v. Empire Gas Corp., 537 F.2d 296, 306 (8th Cir.

1976) (50% market share insufficient to establish dangerous probability of success); Richter , 691

F.2d at 826 (following Empire Gas and finding that “dangerous probability” means a firm must

“ possess market strength that approaches monopoly power – the ability to control prices and

exclude competition”). At the very most, the Complaint shows that these combinations have

merely maintained the status quo: “For most of the last one hundred years, the market for

nationwide CPI has been a one- or two-player market.” Compl. ¶ 40. And, going from one

major player to two is a pro-competitive development.

(b) Dodge’s Claim That CMD Used Dodge’s Trade Secrets Is

Insufficient To Plead Attempted Monopolization.

The Complaint claims that “CMD’s” prior hiring of employees who possessed Dodge’s

“confidential, trade secret” information constitutes “anticompetitive conduct” under their

antitrust claims. Compl. ¶ 93. But this is a claim that Dodge no longer owns. As Dodge admits,

“Dodge [when it was still a division of McGraw Hill] brought a counterclaim against CMD in

the 2009 Litigation, which M cGraw H ill – Dodge ’ s former owner – retained when sell ing

Dodge to its curr ent owners .” Compl. ¶ 39 (emphasis added). Thus, Dodge does not even have

standing to pursue a claim based on that theory. See e.g. Sanford Inv. Co. v. Ahlstrom Mach.

Holdings, Inc., 198 F.3d 415, 425 (3 Cir. 1999) (affirming dismissal for lack of standing because

plaintiff completely assigned its right to enforce cause of action to third party); Cranpark, Inc. v.

Rogers Grp., Inc., No. 4:04CV1817, 2014 WL 3749401, at *5 (N.D. Ohio July 30, 2014)

(dismissing claim for lack of standing where plaintiff sold cause of action to third party through



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asset sale). Moreover, those claims have been dismissed and “may be reinstated only if the

United States Court of Appeals for the Second Circuit, reverses, vacates, or remands in whole or

in part [its prior rulings on dispositive motions] and may be asserted only in this Court in

connection with this action,” i.e., in the New York case. Order and Judgment at 2, Reed

Construction Data, Inc. v. The McGraw-Hill Companies, Inc., No. 09-8578, ECF No. 220

(S.D.N.Y. Oct. 20, 2014).6

Furthermore, Dodge does not – because it cannot – allege any specific facts showing that

iSqFt is currently using Dodge’s confidential information. Indeed, Dodge cannot even allege

that the two employees who left Dodge used this information during their tenures at Reed – a

glaring omission in light of Dodge’s allegation that it already took discovery on this claim in the

prior litigation. See Compl. ¶¶ 35-39. Even if Dodge could plead that iSqFt is using Dodge’s

confidential information to compete against Dodge (in fact, it is not), that would still be

increased competition, and thus cannot be the basis for an antitrust claim. Id . ¶ 40.

(c) Dodge’s Claims Regarding Trademarks and Restrictive

Covenants Are Irrelevant To Its Alleged Antitrust Claims.

Dodge’s trademark infringement claims, even if they had merit (and they do not, see infra

at 20), do not support its antitrust claims, because Dodge admits its marks are for products

outside the relevant market . Dodge admits that its “Dodge BidPro” product is a “software

application and website service aimed at local and regional subcontractors” – not “ building

product manufacturers” in the market for “nationwide CPI.” Compl. ¶¶ 27 & 74. Dodge also

6 Dodge’s misappropriation claim is also the basis for its cause of action for “trespass to

chattels.” For the reasons set forth herein, that claim should be dismissed too. Moreover, theComplaint fails to allege any facts concerning physical damage resulting from the trespass, the

omission of which is fatal to the claim. Snap-on Bus. Sols. Inc. v. O’Neil & Assocs. , Inc., 708 F.

Supp. 2d 669, 679 (N.D. Ohio 2010) (noting that liability in cases dealing with electronictrespasses to chattel still turned on physical harm to the plaintiff’s servers or computers).



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admits that its “Sweets” catalog is distinct from the sale of nationwide CPI. Compl. ¶ 62 (“ In

addition to its production and sale of CPI, Dodge is the publisher of Sweets Catalog”) (emphasis

added). As these products are in completely different markets than the market that is the subject

of the antitrust claims, they are irrelevant to those antitrust claims.

Likewise, Dodge’s allegations regarding iSqFt’s restrictive employment covenants relate

to the labor market for employees. Dodge does not even attempt to explain how these covenants

make it more likely that iSqFt could monopolize the alleged product market for “nationwide

CPI.” Moreover, as explained in Section VI, infra, these restrictive covenants are perfectly legal

and pro-competitive.

D. Dodge’s Conspiracy Claims Fail Because iSqFt Cannot Conspire With Itself.

Dodge’s “conspiracy” claims are based on the same allegations as its failed attempted

monopolization claims, and should be dismissed for the same reasons. But they should also be

dismissed for another, independent reason: Dodge fails to plead a conspiracy.

In Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752, 777 (1984), the Supreme Court

held that a parent corporation and its wholly owned subsidiary are not legally capable of

conspiring with each other under the Sherman Act. Relying on Copperweld , the Sixth Circuit

has held that sister companies sharing the same corporate parent are likewise legally incapable of

such a conspiracy. Directory Sales Mgmt. Corp. v. Ohio Bell Tel. Co., 833 F.2d 606, 611 (6th

Cir. 1987) (“We agree with the Fifth Circuit that Copperweld precludes a finding that two

wholly-owned sibling corporations can combine for the purposes of section 1.”); Total Benefits,

552 F.3d at 435 (“The Supreme Court has held that a parent company and its wholly owned

subsidiaries are incapable, as a matter of law, of conspiracy. This Court has expanded that

position to include sister companies with the same parent.” (internal citations omitted)); see also



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Med. Ctr. at Elizabeth Place v. Premier Health Partners, No. 3:12-CV-26, 2014 WL 7739356,

at *2 (S.D. Ohio Oct. 20, 2014) (dismissing case pursuant to Copperweld doctrine).

The Complaint concedes that all four defendants are commonly owned and operated

within the “combined iSqFt/CMD/BidClerk/CDC entity.” Compl. ¶ 46. It therefore cannot

plead a conspiracy under Sections 1 or 2 of the Sherman Act. See Potters Med. Ctr. v. City

Hosp. Ass’ n, 800 F.2d 568, 574 (6th Cir. 1986) (“Because § 2 conspiracy to monopolize claims

require proof of concerted activity, just as § 1 conspiracy claims do, ‘[t]he claim of a conspiracy

to monopolize fails for the same reason as did the appellants’ section 1 claims.’”).

IV.

DODGE FAILS TO PLEAD ANY VALID TRADEMARK-BASED CLAIMS.

“The touchstone of liability [for trademark infringement] is whether the defendant’s use

of the disputed mark is likely to cause confusion among consumers regarding the origin of the

goods offered by the parties.” Hensley Mfg. v. ProPride, Inc., 579 F.3d 603, 610 (6th Cir. 2009).

Here, Dodge does not – and cannot – allege any possible likelihood of confusion, because “[t]he

‘degree of [dis]similarity’ . . . overwhelms any possibility of confusion.” Le Book Pub., Inc. v.

Black Book Photography, Inc., 418 F. Supp. 2d 305, 311 (S.D.N.Y. 2005) (dismissing complaint

where plaintiff and defendants had “obviously dissimilar marks”). This analysis applies with

equal force to Dodge’s related unfair competition and trademark dilution claims. Champions

Golf Club, Inc. v. The Champions Golf Club, Inc., 78 F.3d 1111, 1123 (6th Cir. 1996) (“As in an

action alleging infringement of a mark, ‘likelihood of confusion is the essence of an unfair

competition claim.’”); Cesare v. Work , 520 N.E.2d 586, 589 (1987) (“Where claims are made

under the Ohio common law and R.C. Chapter 4165, deceptive trade practices, Ohio courts are to

apply essentially the same analysis as that applied in assessing the law of unfair competition

under the federal statutes.”).



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Dodge first contends that CDC’s use of a dollar sign in a green circle on its website

infringes Dodge’s trademark, which consists of a white “S” inside a solid black circle. See

Compl. ¶¶ 65 & Ex. A. Dodge does not purport to own the trademark for the dollar sign – nor

could it – or for the use of green circles. Unsurprisingly, the Complaint contains no reference to

a single person who confused CDC’s dollar sign with Dodge’s “Sweets” mark.

Dodge’s next contention, that CDC’s “Invitation To Bid Pro” product infringes Dodge’s

“BidPro” mark, appears at first blush to be a closer call – until one examines the Complaint

itself. First, Dodge only registered the mark “Dodge BidPro,” not “BidPro.” Dodge never

alleges that CDC uses the mark “Dodge BidPro.” It is only the word “Dodge” that arguably

makes Dodge’s mark distinctive – a Google search of the term “Bid Pro” reveals a number of

different firms using the term “Bid Pro” in a variety of contexts. Indeed, the portion of the web

page submitted at paragraph 75 of the Complaint shows that Dodge never uses the term “BidPro”

in isolation – it only uses “Dodge BidPro.” Second, it is clear from the descriptions in the

Complaint that CDC’s product serves a different market than Dodge’s. “Dodge BidPro” is a

product for subcontractors to submit bids for work. CDC’s “Invitiation To Bid Pro” is a product

for builders to soli cit and receive bids from subcontractors. It is therefore not surprising that

Dodge fails once again to allege any examples of user confusion.

Accordingly, Dodge has failed to allege facts sufficient to state a claim for trademark

infringement. Likewise, Dodge’s related claims for unfair competition (Claims 5 and 9),

trademark dilution (Claim 6) and violations of the Ohio Deceptive Trade Practices Act (Claims 7

and 10) should also be dismissed.



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V. DODGE FAILS TO STATE A CLAIM FOR TORTIOUS INTERFERENCE.

Dodge does not state a claim for tortious interference with business relationships because

it has failed to identify a single customer that it lost as a result of the purported interference.

This information is exclusively within the control of the Plaintiff and is an essential element to

its interference claim. Ginn v. Stonecreek Dental Care, 30 N.E.3d 1034, 1040 (Ohio Ct. App.

2015) (directed verdict was proper as a result of plaintiff’s failure to “identif[y] anyone with

whom [plaintiff] had a business relationship or prospective contractual relationship with which

[defendant] intentionally interfered.”). This cause of action merely contains the sort of

“formulaic recitation of the elements” that simply “will not do.” Twombly, 550 U.S. at 555.

Further, Dodge’s attempt to base its tortious interference claim on its below-cost pricing

theory is an independent basis to reject the claim. As explained by the jurisdictions that have

analyzed this issue, “below-cost pricing by a single defendant is not improper in the absence of

some other unlawful element and, thus, is not encompassed by the tort of intentional interference

with business relations.” U.S. Anchor Mfg., Inc. v. Rule Indus., Inc., 264 Ga. 295, 298 (1994)

(emphasis in original); accord Ideal Dairy Farms, Inc. v. Farmland Dairy Farms, Inc., 659 A.2d

904, 936 (N.J. Super. Ct. App. Div. 1995).

VI. DODGE FAILS TO STATE A VALID DECLARATORY RELIEF CLAIM

Dodge’s Thirteenth Claim For Relief, for declaratory judgment that iSqFt’s restrictive

covenants are invalid, should be dismissed for two reasons. First , iSqFt’s restrictive covenants

are legal and enforceable in each state in which they are consummated: Ohio; Florida; Georgia;

and Illinois. See Atl. Tool Die v. Kacic, No. 2717-M, 1998 Ohio App. LEXIS 5485, *4 (Ohio Ct.

App., Medina County Nov. 18, 1998) (“It is beyond dispute that post-employment restrictive

covenants are generally enforceable in Ohio”); see Fla. Stat. Ann. §542.33; see also Fla.



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Hematology & Oncology Specialists v. Tummala, 969 So. 2d 316, 317 (Fla. 2007); Ga. Code

Ann. §13-8-50 (“reasonable restrictive covenants . . . serve the legitimate purpose of protecting

legitimate business interests and creating an environment that is favorable to attracting

commercial enterprises to Georgia . . . .”); see Reliable Fire Equip. Co. v. Arredondo, 965

N.E.2d 393, 396 (Ill. 2011). Accordingly, Dodge’s claim that iSqFt’s restrictive covenants are

“illegal” is, as a matter of law, wrong.

Second , Dodge’s claim is based on a hypothetical set of facts, and therefore is not

appropriate for declaratory relief. As a threshold matter, for a court to issue a declaratory

judgment, there must be a justiciable controversy, meaning the controversy must be such that it

can presently be litigated and decided – not hypothetical, conjectural, or based upon the

possibility of a factual situation that may never develop. 28 U.S.C. § 2201; Stotts v. Pierson, 976

F. Supp. 2d 948, 974 (S.D. Ohio 2013). Justiciability forecloses the issuance of “advisory

decree[s] upon a hypothetical state of facts.” Ashwander v. Tenn. Valley Auth., 297 U.S. 288,

325 (1936). But that is exactly what Dodge seeks here.

Dodge’s allegations regarding the restrictive covenants mention only what,

hypothetically, might happen if it were to hire a former iSqFt employee. Compl. ¶¶ 84-88.

Plaintiff references a letter sent on behalf of iSqFt advising Dodge of its restrictive covenants.

Compl. Ex. C. But the letter simply advised Dodge that iSqFt’s former employees may not

solicit iSqFt’s customers and employees. It did not claim that any former employee had done so.

It did not threaten litigation for any such solicitation, let alone for Dodge simply hiring an

employee. This does not rise to an actual, live controversy. The declaratory judgment claim

must be dismissed as no justiciable dispute exists.



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VII. LEAVE TO AMEND SHOULD BE DENIED

As set forth above, Dodge’s own allegations and admissions are fatal to its claims, and in

particular its antitrust claims, and those fatal flaws cannot be remedied by amendment.

Accordingly, those claims should be dismissed with prejudice and without leave to amend.

Arnold v. Petland, Inc., No. 2:07-CV-01307, 2009 WL 816327, at *11 (S.D. Ohio Mar. 26,

2009) (dismissing antitrust claims with prejudice for failure to state a claim).

VIII. CONCLUSION

For the foregoing reasons, Defendants respectfully request that this court dismiss the

Complaint with prejudice for failure to state a claim upon which relief may be granted.



Mark C. Bissinger (0012738)Mark A. VanderLaan (0013297)Thomas M. Connor (0082462)DINSMORE & STOHL255 E. 5th St.1900 Chemed CenterCincinnati, OH 45202Telephone: (513) 977-8200Fax: (513) 977-8141Email: [email protected]

[email protected]@dinsmore.com

Charles E. Elder (admitted pro hac vice)Curt K. Brown (admitted pro hac vice)IRELL & MANELLA LLP1800 Ave. of the Stars

Los Angeles CA, 90067Telephone: (310) 277-1010Email: [email protected]

[email protected]

Counsel for DefendantsiSqFt, Inc., Construction Market DataGroup, LLC, Construction DataCorporation, LLC, and BidClerk, Inc.



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CERTIFICATE OF SERVICE

I hereby certify that on January 5, 2016, I electronically filed the foregoing using the CM/ECF

system, which will send notification of such filing to the following:

Russell S. SayreMark T. Hayden

Aaron M. Herzig

TAFT STETTINIUS & HOLLISTER LLP

425 Walnut Street, Suite 1800Cincinnati, Ohio 45202-3957

Telephone: (513)381-2838

Email: [email protected]

[email protected]@taftlaw.com

Stuart I. FriedmanPaul S. Grossman

Johnathan D. Daugherty

FRIEDMAN & WITTENSTEIN

600 Lexington Avenue New York, New York 1002

Telephone: (212) 750-8700

Email: [email protected]

[email protected] [email protected]



An attorney for Defendants iSqFt, Inc.,Construction Market Data Group, LLC,Construction Data Corporation, LLC, andBidClerk, Inc.


Documents

Dodge Data & Analytics LLC v ISqFt Inc Et Al Ohsdce-15-00698 0026.0