United States District Court, M.D. Pennsylvania
CABLE LINE, INC. and MCLAUGHLIN COMMUNICATIONS INC. Plaintiffs,
COMCAST CABLE COMMUNICATIONS OF PENNSYLVANIA, INC., et al., Defendants.
D. Mariani United States District Judge
Introduction and Procedural History
opinion addresses a second round of motions to dismiss after
Plaintiffs' Amended Complaint was dismissed with leave to
amend on October 18, 2017. Doc. 68. Plaintiff filed a Second
Amended Complaint ("SAC") on November 21, 2018.
Doc. 71. All three Defendants moved to dismiss the SAC. Docs.
77, 79, 81. While Plaintiffs added certain new allegations in
the SAC, the core of Plaintiffs' complaint remained the
same-Comcast, which once employed Plaintiffs as cable
installation subcontractors, terminated Plaintiffs and many
others in an effort to reduce its costs and streamline its
subcontractor operations. Doc. 71 ¶¶ 40, 41. As a
result, Plaintiffs lost the business of a lucrative client,
while Defendants Decisive and Vitel, who were also
Comcast's subcontractors, were able to retain
Comcast's business. Id. ¶ 42.
Court assumes the parties' familiarity with the facts,
given the parties' extensive briefing on the matter and
this Court's previous motion to dismiss opinion. Doc. 67.
Thus, this memorandum will primarily address the new and
relevant allegations from the SAC. For reasons stated below,
the Court reaffirms the legal principles and its analyses
found in its previous opinion. The SAC will be dismissed with
prejudice because Plaintiffs failed to cure the defects
specified in this Court's previous opinion.
are cable installation companies that were former
subcontractors of Comcast Cable Communications of
Pennsylvania, Inc. ("Comcast"). Plaintiffs brought
suit against Comcast and two other cable installation
subcontractors, Vitel and Decisive, for alleged violations
under the Sherman Act and state antitrust laws, as well as an
employment claim against Comcast for reverse discrimination.
Doc. 71. Comcast is a cable television company and an
internet service provider, which "offer[s] broadband,
cable-based Internet access" to individual consumers.
Id. ¶¶ 11, 16. In order to service its
customers, Comcast subcontracts with certain cable
installation companies such as Plaintiffs and Vitel and
Decisive, to install fiber optic cables and hardware.
Id. ¶¶ 16, 29. In 2009, Comcast
subcontracted with approximately 176 regional cable
installation companies. Id. ¶ 41. In their
previous complaint, which was dismissed by this Court,
Plaintiffs alleged that they "competed successfully in a
2010 Request For Proposal [RFP] process." Doc. 41 ¶
16. However, the SAC changed the allegation to
"Plaintiffs mistakenly believed they competed
successfully in [the RFP] process because they were told to
'ramp up' in certain Divisions [by Comcast]."
Doc. 71 ¶ 30. The SAC alleges that operating under this
mistaken assumption, "Plaintiffs 'ramped up'
their operations, costing them hundreds of thousands of
dollars to more likely over a million dollars."
Id. ¶ 38. However, "Comcast never awarded
any contracts pursuant to the RFP." Id. ¶
39. Instead, Comcast initiated a "national subcontractor
reduction plan" that called for a reduction of
Comcast's cable installation subcontractors to 39 firms,
which resulted in the termination of its relationship with
Plaintiffs in 2012, while Decisive and Vitel were among the
firms that were kept on by Comcast. Id. ¶¶
42, 58. Plaintiffs allege that Comcast conspired with Vitel
and Decisive to transition Plaintiffs' cable installation
responsibilities to them and "helped develop a monopoly
for Vitel and Decisive in the Regions that the Plaintiffs
worked." Id. ¶¶ 170-174. Due to the
loss of Comcast's business, Plaintiffs were forced to
close down their business. Id. ¶¶ 82-84.
The SAC further alleges that by hiring only a few regional
cable installation companies, "Comcast controlled the
price and pushed down the price of cable installation, "
with "the only benefit [going] to Comcast, Decisive, and
Vitel, " while installation workers' "wages
decreased and the amount of hours employees had to perform
increased." Id. ¶¶ 99-102. In
support, the SAC cites certain newspaper articles from 2016,
which purportedly reported poor working conditions for cable
installation employees. Id. ¶¶ 90-96.
Plaintiffs also allege, for the first time, that Comcast had
bought up other cable providers, i.e. its competitors,
"[i]n the very late 1990's...into the early
2000's" and that Comcast "used a noncompete
agreement to block the sale of [Plaintiff]" to
Comcast's competitor, Exelon, "in the early
2000's." Id. ¶¶ 10, 15, 24, 78.
Plaintiffs rehashed their previous allegations that Decisive
and Vitel were retained by Comcast was because they were able
to underbill Comcast and manipulate performance metrics,
thereby "saving Comcast hundreds of millions up to a
billion dollars." Id. ¶¶ 43-57.
Plaintiffs also allege that Vitel "misappropriated and
resold hundreds of thousands of dollars of Comcast
equipment." Id. ¶ 165. Yet, despite these
practices, Comcast continued to retain Decisive and Vitel
because "it benefitted them with their shareholders,
rising stock prices, and a higher profitability."
Id. ¶ 139.
the SAC restates Plaintiffs' reverse employment
discrimination claim, largely relying on allegations from the
Amended Complaint. The Court previously dismissed this claim
for failing to raise an inference that Plaintiffs'
termination was motivated by their owners' race, as
opposed to other factors abundantly pleaded in their Amended
Complaint. Doc. 67 at 26-29. The only new, substantive
allegations in the SAC relating to employment discrimination
are that Vitel was chosen over Plaintiffs even though both
had "over 100 trucks" and "Plaintiffs
performed as well, or better, as Defendant Vitel at
installing cable." Doc. 71 ¶¶ 181, 195.
Standard of Review
complaint must be dismissed under Federal Rule of Civil
Procedure 12(b)(6) if it does not allege "enough facts
to state a claim to relief that is plausible on its
face." Bell Ail. Corp. v. Twombly, 550 U.S.
544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A
claim has facial plausibility when the plaintiff pleads
factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct
alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678,
129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009).
a complaint attacked by a Rule 12(b)(6) motion to dismiss
does not need detailed factual allegations, 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." Twombly, 550 U.S. at 555
(internal citations, alterations, and quotations marks
omitted). A court "take[s] as true all the factual
allegations in the Complaint and the reasonable inferences
that can be drawn from those facts, but... disregard[s] legal
conclusions and threadbare recitals of the elements of a
cause of action, supported by mere conclusory
statements." Ethypharm S.A. France v. Abbott
Labs., 707 F.3d 223, 231 n.14 (3d Cir. 2013) (internal
citation, alteration, and quotation marks omitted). Thus,
"the presumption of truth attaches only to those
allegations for which there is sufficient 'factual
matter' to render them 'plausible on [their]
face.'" Schuchardt v. President of the
U.S., 839 F.3d 336, 347 (3d Cir. 2016) (alteration in
original) (quoting Iqbal, 556 U.S. at 679).
"Conclusory assertions of fact and legal conclusions are
not entitled to the same presumption." Id.
the plausibility standard 'does not impose a probability
requirement, ' it does require a pleading to show
'more than a sheer possibility that a defendant has acted
unlawfully.'" Connelly v. Lane Constr.
Corp., 809 F.3d 780, 786 (3d Cir. 2016) (internal
citation omitted) (first quoting Twombly, 550 U.S.
at 556; then quoting Iqbal, 556 U.S. at 678).
"The plausibility determination is 'a
context-specific task that requires the reviewing court to
draw on its judicial experience and common sense.'"
Id. at 786-87 (quoting Iqbal, 556 U.S.
Plaintiffs Continue to Fail to Allege Antitrust Injury,
Conspiracy, and Anticompetitive Effects in the Relevant
essence of Plaintiffs' allegations is that Comcast, in
order to reduce costs and streamline operations, dramatically
decreased its number of cable installation subcontractors
through a "national subcontractor reduction plan."
Doc. 71 ¶¶ 40, 41. As a consequence, Plaintiffs,
who were two of Comcast's installation subcontractors,
lost the business they had previously enjoyed with Comcast,
while Defendants Decisive and Vitel, who were also
Comcast's subcontractors, were chosen by Comcast to
continue to retain its business. Id. ¶ 42. In
its previous opinion, this Court held that the Amended
Complaint did not state an antitrust action because
Plaintiffs (1) failed to plead antitrust injury because they
only alleged injury as to themselves, not to competition in
the marketplace, (2) failed to plead a conspiracy among
Defendants, but instead, consistently alleged unilateral
decisionmaking by Comcast, and (3) failed to allege
anticompetitive effects as required by the "rule of
reason" analysis. Doc. 67. Because the SAC fails to
adequately cure any of deficiencies enumerated by this Court,
Plaintiffs continue to fail to state a claim under the
Plaintiffs' injury does not flow from anticompetitive
behavior, but rather, from the termination by a single
client, Comcast. This Court noted in its previous opinion
that to plead an antitrust claim, Plaintiffs must first
allege the threshold element of antitrust injury, that is,
"injury of the type the antitrust laws were intended to
prevent and that flows from that which makes defendants'
acts unlawful." Brunswick Corp. v. Pueblo
Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97 S.Ct. 690, 50
L.Ed.2d 701 (1977). This requirement ensures that antitrust
laws are enforced "for the protection of competition,
not competitors." Id. at 488. After all,
Section 1 of the Sherman Act does not prohibit all agreements
among market participants, but only those aimed to create
"unreasonable restraints of trade."
West Penn Allegheny Health Sys., Inc. v.
UPMC, 627 F.3d 85, 99 (3d Cir. 2010) (citing
Standard Oil Co. v. United States, 221 U.S.
1, 58, 31 S.Ct. 502, 55 L.Ed. 619 (1911)) (emphasis in
Third Circuit recently held, "[c]ompetition is at the
heart of the antitrust laws; it is only anticompetitive
conduct, or 'a competition-reducing aspect or effect of
the defendant's behavior, ' that antitrust laws seek
to curtail." Philadelphia Taxi Ass'n, Inc v.
Uber Techs., Inc.,886 F.3d 332, 338 (3d Cir. 2018)
(quoting Atl. Richfield Co. v. USAPetroleum
Co.,495 U.S. 328, 344, 110 S.Ct. 1884, 109 L.Ed.2d 333
(1990)). In Philadelphia Taxi Ass'n, the Court
noted that Appellants, Philadelphia taxi drivers, ...