Twin Bridges Waste and Recycling, LLC v. County Waste and Recycling Service, Inc.

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF NEW YORK

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

TWIN BRIDGES WASTE AND

RECYCLING, LLC,

Plaintiff,

-v- 1:21-CV-263

COUNTY WASTE AND RECYCLING

SERVICE, INC.; ROBERT WRIGHT

DISPOSAL, INC.; WASTE

CONNECTIONS US, INC.; and

WASTE CONNECTIONS, INC., doing

business as Waste Connections,

Defendants.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

APPEARANCES: OF COUNSEL:

DREYER BOYAJIAN LLP DONALD W. BOYAJIAN, ESQ.

Attorneys for Plaintiff JAMES R. PELUSO, JR. ESQ.

75 Columbia Street LAUREN S. OWENS, ESQ.

Albany, New York 12210 WILLIAM J. DREYER, ESQ.

NIXON, PEABODY LAW FIRM ANDREW C. ROSE, ESQ.

ALBANY OFFICE WILLIAM E. REYNOLDS, ESQ.

Attorneys for Defendants ERIN HUNTINGTON, ESQ.

677 Broadway Tenth Floor

Albany, New York 12207

NIXON, PEABODY LAW FIRM GORDON L. LANG, ESQ.

D.C. OFFICE

Attorneys for Defendants

799 Ninth Street, Northwest, Suite 500

Washington, District of Colombia 20001

DAVID N. HURD

United States District Judge

MEMORANDUM-DECISION and ORDER

INTRODUCTION

On May 28, 2021, plaintiff Twin Bridges Waste and Recycling, LLC (“Twin

Bridges” or “plaintiff”) filed a 387-paragraph, 79-page amended complaint. It

included 57 pages and 334 paragraphs of alleged facts. Plaintiff alleges

antitrust violations against defendant waste disposal companies County

Waste and Recycling Service, Inc. (“County Waste”) and Robert Wright

Disposal, Inc. (“Robert Wright”), both of which are allegedly indirect

subsidiaries of defendants Waste Connections US, Inc. (“WCUSI”) and Waste

Connections, Inc. (“WCI” and collectively “defendants”).

More specifically, Twin Bridges claims that defendants are trying to freeze

it (and everyone else) out of the market for waste disposal services in New

York’s Capital Region (the “Capital Region Market”). Plaintiff alleges that

defendants are attacking that objective through a multifaceted strategy of

price-gouging, locking customers into nearly inescapable long-term contracts,

impugning competitors’ integrity, and consolidating control over landfills to

exclude other waste companies.

On June 18, 2021, defendants moved to dismiss Twin Bridges’ amended

complaint under Federal Rule of Civil Procedure (“Rule”) 12(b)(2) for lack of

personal jurisdiction and 12(b)(6) for failure to state a claim. Those motions,

having been fully briefed, will now be decided on the submissions and

without oral argument.

Il. BACKGROUND

In some senses, Twin Bridges’ amended complaint (Dkt. 21, “Compl.”) can

be read as an ongoing feud between two waste disposal companies: plaintiff

on the one hand and defendant County Waste on the other. But in other

ways, the conflict is more complicated than that, especially considering

plaintiffs allegations that the larger corporate defendants are responsible for

directing County Waste’s efforts. As a result, deciding defendants’ present

motion involves three steps. First, sorting out each party’s role in this

litigation and their relationships to each other. Second, deciphering what

bad acts plaintiff alleges against each defendant. And third, seeing if those

alleged bad acts can support claims under federal antitrust law.

To that end, it makes the most sense to start with Twin Bridges’ main

alleged rivals, defendants County Waste and Robert Wright. County Waste

is a New York limited liability company with a principal place of business in

Texas.! Dkt. 21 Compl. § 14. But County Waste also does business more

1 To the extent defendants’ motion comes under Rule 12(b)(6), the facts are taken from plaintiffs

amended complaint, as well as any documents attached to it or incorporated by reference, and read

in the light most favorable to it. To the extent defendants’ motion comes under Rule 12(b)(2),

however, some facts may be considered from beyond the four corners of the complaint.

locally under a number of other names, including Ace Carting, D.J.’s Roll Off

Service, Hardesty and Sons Sanitation, and others. Id. ¶ 15.

Robert Wright is also a New York limited liability company, but unlike

County Waste its principal place of business is in the County of Albany, New

York. Compl. ¶ 16. Robert Wright is a wholly-owned subsidiary of County

Waste. Id. ¶¶ 22, 30.

One step up from County Waste is WCUSI. Though there are precious few

allegations against this defendant, Twin Bridges at least alleges that WCUSI

is a Delaware corporation with a principal place of business in Texas.

Compl. ¶ 17. Otherwise, plaintiff only alleges that WCUSI “transact[s]

substantial business within New York State[.]” Id. ¶ 29.

Finally, defendant WCI is a Canadian corporation, although it apparently

also operates out of Texas. Compl. ¶ 18. WCI describes itself as “the

third-largest waste management company” in North America, at least as far

as revenue is concerned. Id. ¶ 26. Twin Bridges alleges that WCI prioritizes

“exclusive and secondary markets” across the United States and Canada.”

Id. ¶ 25. To that end, plaintiff claims that WCI avoids larger, more

competitive urban markets and instead targets “markets where [it] can

attain high market share[,] either through exclusive contracts, vertical

integration[,] or asset positioning.” Id. ¶ 74.

One method of vertical integration that WCI occasionally employs is

landfill ownership. WASTE CONNECTIONS, 2019 Annual Report (“Annual

Report”), p. 112 (2019) http://online.fliphtml5.com/jvcm/ycal/#p=1 (last visited

Sept. 13, 2021). In its own words, WCI “generally own[s] landfills to achieve

vertical integration in markets where the economic and regulatory

environments make landfill ownership attractive.” Id. at 14. Plaintiff alleges

that defendants own nine landfills in the Capital Region through nine

different subsidiaries. Compl. ¶ 33. In its 2019 Annual Report, WCI

nevertheless repeatedly refers to the landfills as “our” landfills that “we

own[ ] or operate[.]” Annual Report p. 14.

Ultimately, Twin Bridges alleges that defendants collectively “market

their services and operate as [a] single integrated business entity known as

‘Waste Connections.’” Compl. ¶ 39. According to defendants, though, the

relationship between them involves a fair sight more distance than plaintiff

suggests. WCI claims that it “owns a subsidiary that owns another

subsidiary that owns another subsidiary that owns another subsidiary that

owns WCUSI.” Dkt. 22-2 (“Pio Aff.”), ¶ 8. From there, WCUSI owns yet

another subsidiary, that in turn owns County Waste. Id. ¶ 9. And of course,

County Waste then owns Robert Wright. Id. ¶ 22.

2 Pagination refers to the overall page number, not the page numbers the document gives itself.

Because the amended complaint specifically refers to WCI’s 2019 annual report, the Court may rely

on it in resolving defendants’ personal jurisdiction and failure to state a claim arguments.

WCI describes its management of its subsidiaries as “decentralized.”

Annual Report p. 47. Under that management strategy, “[l]ocal managers

have the authority to make many decisions concerning their operations

without obtaining prior approval from executive officers, subject to

compliance with general company-wide policies.” Id.

Defendants were operating along those lines when Twin Bridges burst

onto the Capital Region waste disposal scene in 2019. Compl. ¶ 81. Plaintiff

describes itself as a “local” disposal and recycling company stationed out of

the Town of Halfmoon in the Capital Region of New York. Compl. ¶¶ 1, 7.

Fledgling as it is—and as a contrast to defendants’ well-oiled corporate

machinery—plaintiff alleges that it owns no landfills. Id. ¶ 8.

Nevertheless, Twin Bridges set its sights on making a name for itself in

the Capital Region Market. In plaintiff’s own words, that market is “the

provision [of] Waste Services to residential, commercial[,] and governmental

customers within the Capital Region counties of Albany, Fulton, Rensselaer,

Saratoga, Washington[,] and Warren.” Compl. ¶ 101. The market also

includes commercial—but not residential—customers in Schenectady County,

because plaintiff does not serve residential customers in that county. Id.

¶¶ 102-03.

According to Twin Bridges, breaking into the Capital Region Market was

daunting from the jump. As plaintiff would have it, County Waste and

Robert Wright together enjoyed a market share of “well over fifty percent of

the residential subscription-based customers in the Capital Region Market.”

Compl. ¶ 78. In fact, plaintiff alleges that Robert Wright had a complete

monopoly in southern Albany County. Id. ¶ 79.

In 2019, Twin Bridges claims that County Waste and Robert Wright’s

market power was such that plaintiff emerged as the “only alternative” for

“most residential customers.” Compl. ¶ 80. According to plaintiff’s narrative,

its arrival in the Capital Region Market immediately led to monopolistic

gambits by defendants. Id. ¶ 81.

Those alleged gambits come in three flavors. First, under Count I, Twin

Bridges alleges that defendants cut their prices below their costs to starve

plaintiff out of the market. See Compl. ¶ 83. Specifically, plaintiff claims

that County Waste slashed its prices from between $41 and $43 per month in

2011 to between $26 and $32 per month once plaintiff and its predecessor

attempted to enter the market. Id. ¶¶ 112, 114.

That effort would prove to be only the first salvo in a price-cutting war

between County Waste on the one side and Twin Bridges and its predecessor

on the other. See Compl. ¶¶ 115-28. Plaintiff provides a number of alleged

examples. Recently, plaintiff alleges that County Waste offered new

residential customers twelve months of free service followed by two years of

service at $12 per month. See id. ¶¶ 127-28. That rate amounts to only $8

per month for the first thirty-six months of service, which, according to

plaintiff, is significantly below the $15-27 per month County Waste would

need to charge to recoup its average variable costs. See id. ¶¶ 128, 131.

Twin Bridges alleges similarly drastic pricing offers in other spheres as

well. Plaintiff alleges that Robert Wright and County Waste have offered

deals equivalent to: (1) $1.67 per month for the first thirty-six months of

contracts with homeowners’ associations; (2) $8.95 for the Village of Nassau;

and (3) $5.03 per month for the City of Gloversville, not to mention several

other similarly drastic price cuts. Compl. ¶¶ 147, 162, 164, 173-213. Plaintiff

alleges that each of these offers falls below the minimum defendants need to

collect to break even on these contracts. Id. ¶¶ 148, 162, 166, 180, 189, 196.

Second, under Count II, plaintiff brings a kind of catchall claim of other

anticompetitive conduct. See Compl. ¶ 83. Specifically, plaintiff points to an

ongoing campaign to defame plaintiff’s owner, including a County Waste

memorandum maligning the relative size of plaintiff and declaring that

County Waste will “win the war” against plaintiff and its owner. Id. ¶ 96.

Plaintiff also alleges that when defendants absorbed Robert Wright, they

kept its former owner on board because he claimed that he could “control”

plaintiff’s owner. Id. ¶¶ 224-25.

Twin Bridges further claims that defendants have locked their residential

customers into contracts that renew automatically unless the customer

provides written notice of his or her intent to end service well in advance of

the deadline. Compl. ¶ 226. Those contracts also include rights of first

refusal, which allow defendants to match the price offer of any competitor.

Id.

Effectively, Twin Bridges claims that these policies keep customers

trapped in contracts with defendants, because defendants could simply match

any competitor’s price to prevent an exodus to other disposal companies. Id.

¶ 229. Plaintiff also alleges that defendants are engaging in a widespread

and ongoing effort to poach any customers plaintiff manages to bring on

board by offering them special deals including drastic price cuts. See id.

¶¶ 243-249.

As a further example of allegedly anticompetitive conduct, Twin Bridges

points to a number of alleged examples of defendants smearing plaintiff’s

reputation while working to keep their own customers in the dark as to

defendants’ contractual terms. See Compl. ¶¶ 252-85. Of particular weight,

plaintiff claims that defendants published a letter on social media falsely

accusing plaintiff’s owner of being investigated by the Department of Justice

for wire fraud. Id. ¶¶ 307-323.

Third, under Count III, Twin Bridges claims that defendants denied it

access to their landfills to drive up plaintiff’s costs. See Compl. ¶ 83.

According to plaintiff, defendants have a “controlling market share in the

ownership and operation of transfer stations and landfills in the Capital

Region Market.” Compl. § 289. What is more, plaintiff claims that

defendants spoke to other waste haulers and landfill owners to discourage

them from working with—or even speaking positively of—plaintiff. Id.

303-04

Despite Twin Bridges’ ranging allegations of misconduct, it was

defendants who cast the first stone. Apparently fed up with their ongoing

battles for the Capital Region Market, County Waste and Robert Wright

brought a lawsuit against plaintiff in New York Supreme Court, Albany

County. Compl. § 334. Plaintiff responded by filing antitrust counterclaims

not unlike the ones before this Court. See id. Upon realizing that federal

courts have exclusive jurisdiction of federal antitrust law, plaintiff

voluntarily withdrew those claims without prejudice. Id.

Twin Bridges promptly refiled its antitrust claims against defendants

before this Court on March 8, 2021. Dkt. 1. On May 7, 2021, defendants

moved to dismiss plaintiffs complaint under Rule 12(b)(2) and 12(b)(6) for

lack of personal jurisdiction and failure to state a claim, respectively.

Dkt. 22. This decision now follows.

Ill. LEGAL STANDARDS

A. Rule 12(b)(6) Failure to State a Claim

10

To survive a motion to dismiss, “a complaint must contain sufficient

factual matter, accepted as true, to state a claim to relief that is plausible on

its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). That factual matter

may be drawn from “the facts alleged in the complaint, documents attached

to the complaint as exhibits, and documents incorporated by reference in the

complaint.” DiFolco v. MSNBC Cable L.L.C., 622 F.3d 104, 111

(2d Cir. 2010).

Importantly, “the complaint is to be construed liberally, and all reasonable

inferences must be drawn in the plaintiff’s favor.” Ginsburg v. City of Ithaca,

839 F. Supp. 2d 537, 540 (N.D.N.Y. 2012) (citing Chambers v. Time Warner,

Inc., 282 F.3d 147, 152 (2d Cir. 2002)). If the complaint and its additional

materials—when viewed through that pro-plaintiff lens—are not enough to

raise the plaintiff’s right to relief on a claim above the speculative level, that

claim must be dismissed. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555

(2007).

B. Rule 12(b)(2) Lack of Personal Jurisdiction

If a defendant calls personal jurisdiction into question under Rule 12(b)(2),

the burden of establishing jurisdiction falls to the plaintiff. Nat’l Elec. Sys.,

Inc. v. City of Anderson, 601 F. Supp. 2d 495, 497 (N.D.N.Y. 2009) (citing

Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 171 F.3d 779, 784

(2d Cir. 1999)). To carry that burden, the plaintiff must “allege facts

constituting a prima facie showing of personal jurisdiction.” Nat’ Elec. Sys.,

601 F. Supp. 2d at 497 (citing PDK Labs, Inc. v. Friedlander, 103 F.3d 1105,

1106 (2d Cir.1997)).

At this early stage, all pleadings and factual ambiguities are construed in

the plaintiffs favor. Nat’ Elec. Sys., 601 F. Supp. 2d at 497 (citing Robinson

v. Overseas Mil. Sales Corp., 21 F.3d 502, 507 (2d Cir.1994)).

However, the same is not true of argumentative inferences, nor will the

court ’accept as true a legal conclusion couched as a factual allegation[.]” Jn

re Terrorist Attacks on September 11, 2001, 714 F.3d 659, 673 (2d Cir. 2018)

(internal citations and quotation marks omitted). Moreover, on a motion to

dismiss under Rule 12(b)(2), courts may consider materials outside the

pleadings “without converting [the] motion .. . into a motion for summary

judgment.” Dorchester Fin. Sec., Inc. v. Banco BRJ, S.A., 722 F.3d 81, 86

(2d Cir. 2018).

From that factual footing, a court must determine whether the plaintiff

has made “legally sufficient allegations of jurisdiction, including an averment

of facts that, if credited, would suffice to establish jurisdiction over the

defendant.” Penguin Grp. (USA) Inc. v. Am. Buddha, 609 F.3d 30, 35 (2d Cir.

2010) (cleaned up).

IV. DISCUSSION

12

Defendants’ arguments for dismissal have three levels of scale. First,

defendants raise one case-wide argument for dismissal: that Twin Bridges

has failed to sufficiently allege that there is a substantial enough risk of

defendants achieving a monopoly. Second, defendants raise three

claim-based arguments, each of which would dispose of a claim as to all

defendants, but can only dispose of the case altogether if defendants are

correct on all three points. Third, defendants argue that this Court lacks

personal jurisdiction over WCI and WCUSI, which would only dismiss those

defendants from the case. To avoid unnecessary duplication of effort, the

Court will consider defendants’ arguments from broadest to narrowest, only

reaching the jurisdictional arguments if any of plaintiff’s claims remain

viable.

A. Probability of Achieving a Monopoly

Defendants begin their assault on Twin Bridges’ complaint by arguing

that plaintiff has failed to adequately allege that they possess monopoly

power. “To state an attempted monopolization claim, a plaintiff must allege

plausible facts supporting that the defendant has engaged in [(1)] predatory

or anticompetitive conduct, [(2)] with a specific intent to monopolize a

particular and defined market, and [(3)] a dangerous probability of success.”

In re Zinc Antitrust Litig., 155 F. Supp. 3d 337, 381 (S.D.N.Y. 2016) (citing

Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456 (1993)).

The third element of a dangerous probability of success requires courts to

“consider the relevant market and the defendant’s ability to lessen or destroy

competition in that market.” Spectrum Sports, 506 U.S. at 456. In other

words, “a defendant’s market share is the primary indicator of the existence

of a dangerous probability of success.” AD/SAT, Div. of Skylight, Inc. v.

Associated Press, 181 F.3d 216, 226 (2d Cir. 1999) (internal citations and

quotation marks omitted).

But “primary” does not mean “only.” On the contrary, other barriers to

entry have their say as well. See Tops Markets, Inc. v. Quality Markets, Inc.,

142 F.3d 90, 99 (2d Cir. 1998). For example, even an alleged market share

north of 70% does not conclusively establish monopoly power if there is

evidence of a lack of barriers to entry. Id. (holding that high market share is

not dispositive of monopoly power in upholding grant of summary judgment).

By contrast, a market share greater than 50% accompanied by evidence of

other barriers to entry can establish monopolization. See id. And in either

case, a claim of attempted monopolization can be supported by a showing of

lesser power than is required to establish a claim of completed

monopolization. Id. at 100.

As the varied factors at play in the monopoly power calculation should

make clear, “[t]he existence of monopoly power, or the dangerous probability

of acquiring it, is heavily fact-dependent.” In re Payment Card Interchange

Fee & Merchant Discount Antitrust Litig., 562 F. Supp. 2d 392, 401

(E.D.N.Y. 2008). As a result, “courts rarely grant dismissal of [attempted

monopolization claims] on the basis of insufficient market share, unless the

plaintiff rests its claims on market share allegations to the exclusion of other

evidence.” Id. (collecting cases).

Upon review, Twin Bridges’ showing of defendants’ market power is not so

feeble or contradicted as to justify dismissal. Remember, plaintiff alleges

that defendants held a market share of “well over fifty percent of the

residential subscription-based customers in the Capital Region Market.”

Compl. ¶ 78. Although defendants correctly point out that this figure does

not account for commercial or government customers, plaintiffs have

nevertheless still alleged that defendants have a “leading market position” in

the Capital Region Market as defined by the amended complaint. Id. ¶¶ 9,

28, 32, 346.

In addition, Twin Bridges has alleged that defendants have assumed

control over landfills in the Capital Region Market to vertically integrate and

construct additional barriers to entry. See Annual Report p. 11. Between

defendants’ market power and their other barriers to entry, plaintiff has

alleged that customers are frequently faced with no alternatives to

defendants. See Compl. ¶ 77. At this early stage, these allegations of

substantial market power and barriers to entry are enough to carry plaintiff’s

burden. Defendants’ motion to dismiss on this score must be denied.

B. Predatory Pricing

Next, defendants argue that Twin Bridges has failed to properly plead the

requisite element of anticompetitive conduct for its Count I predatory pricing

claim. To that end, “[p]redatory pricing may be defined as pricing below an

appropriate measure of cost for the purpose of eliminating competitors in the

short run and reducing competition in the long run.” Cargill, Inc. v. Monfort

of Colo., Inc., 479 U.S. 104, 117 (1986).

Ultimately, predatory pricing claims look like this. The seller starts by

cutting its prices to levels that its competitors, actual or prospective, cannot

match. Irvin Indus., Inc. v. Goodyear Aerospace Corp., 974 F.2d 241, 244

(2d Cir. 1992). Would-be competitors find themselves forced to drop out of

the market, which allows the seller to build or maintain a monopoly. Id.

Then, once the seller has secured its power, it takes advantage of consumers’

lack of alternatives by charging high prices to recoup the losses from its

earlier, lower prices. Id.

Alleging such a long-term scheme is no meager feat. Eventually, a

predatory pricing plaintiff “must prove that prices complained of are below an

appropriate measure of its rival’s costs” and “that the competitor had

a . . . dangerous probability [ ] of recouping its investment in below-cost

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

509 U.S. 209, 222, 224 (1993).

Of course, low prices are more often a sign of healthy competition than of

the predatory sort. See Id. at 226-227. As a consequence, and to prevent

inadvertently chilling appropriate competition, predatory pricing claims are

difficult to plead and prove. Id.

Even so, Twin Bridges has once again cleared the modest hurdle of

plausibility required of a Rule 12(b)(6) motion. Plaintiff has alleged that

defendants have cut their prices well below their average variable cost for

several groups of customers. See Compl. ¶¶ 127-28, 131, 147-48, 162, 164,

166, 173-213. Plaintiff has also alleged that defendants lock their customers

into contracts that are nearly impossible to escape. Compl. ¶¶ 226, 229.

Between those two alleged facts, Twin Bridges has plausibly established

that defendants are cutting costs below the levels necessary to make a

short-term profit, while locking customers into long-term contracts to take

advantage of them later. Once again, defendants’ motion to dismiss misses

the mark, and plaintiff’s Count I attempted monopoly claim relying on

predatory pricing must survive that motion.

C. Anticompetitive Conduct

Defendants also argue that Twin Bridges’ Count II general

anticompetitive conduct claim cannot pass muster. “[A]nticompetitive

conduct is conduct without a legitimate business purpose that makes sense

only because it eliminates competition.” In re Adderall XR Antitrust Litig.,

754 F.3d 128, 133 (2d Cir. 2014) (internal citations and quotation marks

omitted). That definition is a narrow one, which works to ensure that

exceptions to the general rule that “businesses are free to choose the parties

with whom they will deal, as well as the prices, terms, and conditions of that

dealing” are “rare.” Pac. Bell Tel. Co. v. linkLine Commc’ns, Inc.,

555 U.S. 438, 448 (2009).

As discussed above, Twin Bridges’ claims of anticompetitive conduct cash

out to claims that defendants improperly lock customers into long-term

contracts to prevent them from signing with competitors, all while attacking

those competitors with unfounded allegations. To defendants’ mind, these

facts are not enough to carry water.

As for the first theory, defendants argue that Twin Bridges has failed to

adequately allege that defendants’ exclusive contracts with their customers

have foreclosed competition in a substantial share of the Capital Region

Market. See Maxon Hyundai Mazda v. Carfax, Inc., 726 F. App’x 66, 70

(2d Cir. 2018) (summary order) (affirming grant of summary judgment for

failure to prove substantial foreclosure of competition in applicable market in

exclusive contracts case).

As Twin Bridges correctly notes, though, defendants are asking for far too

much from it at the motion to dismiss stage. Plaintiff has alleged that

defendants have substantial control over the Capital Region Market for

waste disposal and are using that control to lock customers into exclusive

contracts. Compl. ¶¶ 77, 226, 229.

Although plaintiff will likely have to establish substantial foreclosure of

the market down the road,3 at present there is no need to require plaintiff to

allege anything more concrete than that. See, e.g., In re Keurig Green

Mountain Single-Serve Coffee Antitrust Litig., 383 F. Supp. 3d 187, 237

(S.D.N.Y. 2019) (“At the motion to dismiss stage, . . . specific mathematical

pleading is unnecessary.”). To the extent it relies on exclusive contracts,

Count II must survive.4 See, e.g., All Star Carts & Vehicles, Inc. v. BFI

Canada Income Fund, 596 F. Supp. 2d 630, 642 (E.D.N.Y. 2009) (allowing

claims of overly restrictive contracts in waste disposal to survive motion

under Rule 12(b)(6)).

3 Unless plaintiff can establish that defendants’ contracts are “so plainly anti-competitive and so

lacking in redeeming pro-competitive value that [they are] presumed illegal without further

examination,” plaintiff will have to clear the rule of reason test. Geneva Pharm. Tech. Corp. v. Barr

Labs. Inc., 386 F.3d 485, 506 (2d Cir. 2004). Under that test, plaintiff would be required to establish

an “actual adverse effect on competition as a whole in the relevant market.” Id.

4 Because Count II survives as a whole, the Court need not delve into whether plaintiff’s

alternate theories of recovery under this count have merit at this juncture.

D. Refusal of Access

Defendants also set their sights on Count III of Twin Bridges’ complaint,

alleging anticompetitive refusal of access to defendants’ landfills. “As a

general rule, businesses are free to choose the parties with whom they will

deal[.]” Pac. Bell, 555 U.S. at 448. In some “limited circumstances,” though,

a firm’s “unilateral refusal to deal with its rivals can give rise to antitrust

liability.” Id.

But the Supreme Court has been “very cautious” in giving their blessing to

circumstances overpowering the freedom to deal. Verizon Commc’ns Inc. v.

Law Offices of Curtis V. Trinko, LLP (“Trinko”), 540 U.S. 398, 408 (2004).

The one exception that the Supreme Court has recognized is “[t]he unilateral

termination of a voluntary (and thus presumably profitable) course of

dealing” with a competitor. Id. at 409. If a firm is willing to break a

presumably profitable agreement, the logic goes, a jury could reasonably

determine that the purpose in breaking that agreement was to forgo profit in

the short term to achieve the long-term goal of weakening a competitor. Id.

Much less certain is Twin Bridges’ submitted “essential facility” exception.

The essential facility test as laid out by the Eleventh Circuit states that “a

company that has exclusive control over a facility essential to effective

competition may not deny potential competitors access to that facility on

reasonable terms and conditions if to do so would create or maintain

monopoly power in the relevant market.” Morris Commc’ns Corp. v. PGA

Tour, Inc., 364 F.3d 1288, 1294 (11th Cir. 2004).

There are two grave problems with Twin Bridges’ reliance on the essential

facility exception. First, neither the Supreme Court nor the Second Circuit

have ever accepted that theory. Trinko, 540 U.S. at 411; see RxUSA

Wholesale Inc. v. Alcon Labs., 391 F. App’x 59, 61 (2d Cir. 2010) (summary

order) (dismissing claim relying on essential facility exception “to the extent

that such a claim is viable”). Instead, the only exception recognized by the

Second Circuit to the “broad right of a firm to refuse to deal with its

competitors” is a monopolist’s termination of “a prior (voluntary) course of

dealing with a competitor.”5 In re Adderall, 754 F.3d at 134.

Second, even if there an authority binding on this Court that recognized

the essential facility exception, that exception contains an “indispensable

requirement” that there be “unavailability of access to the essential

facilities.” Trinko, 540 U.S. at 441 (cleaned up). “[W]here access exists, the

doctrine serves no purpose.” Id. In other words, where the plaintiff alleges

only “inconvenience, or even some economic loss,” an essential facilities claim

must fail. Twin Labs., Inc. v. Weider Health & Fitness, 900 F.2d 566, 570

5 To the extent that plaintiff relies on an “intent” theory also recognized by the Eleventh Circuit,

the Second Circuit has never acknowledged that theory, either. Compare Morris, 364 F.3d at 1294

(Eleventh Circuit describing “intent theory” of monopolization), with In re Adderall, 754 F.3d at 134

(recognizing termination of prior course of dealing as “sole exception” to right to refuse to deal with

competitor).

(2d Cir. 1990). Instead, the plaintiff must allege “that an alternative to the

facility is not feasible.” Id.

Twin Bridges’ refusal to deal claim cannot pass muster. Even if the Court

were to take the bold step of applying the essential facility doctrine, plaintiff

has failed to adequately plead an essential facility claim.

After all, Twin Bridges claims that it “routinely disposes of waste and

recyclables collected in the Capital Region Market at disposal facilities

located outside of New York State, including at facilities located in

Pennsylvania.” Compl. ¶ 327. That long haul is an inconvenience, to be sure,

and likely involves some economic loss. But it is a feasible alternative

nevertheless. Twin Labs, 900 F.2d at 570. Accordingly, even if the essential

facility doctrine were available to plaintiff, its complaint would not present a

claim under that doctrine’s auspices. See id. (noting that plaintiff must

allege absence of feasible alternative to sustain hypothetical essential facility

claim).

Twin Bridges also fails to allege that defendants previously permitted it to

use their landfills before suddenly reneging on that arrangement. As a

result, plaintiff cannot avail themselves of the only fully recognized exception

to the general rule of freedom to deal. In re Adderall, 754 F.3d at 134.

Defendants’ motion to dismiss Count III must be granted.

E. Personal Jurisdiction over WCI and WCUSI

At this point, Counts I and II remain active against all defendants.

However, defendants argue that this Court lacks personal jurisdiction over

WCI and WCUSI. By extension, defendants still urge the Court to at least

release those defendants from this case.

To that end, personal jurisdiction for an antitrust claim can be established

under federal or state law. But in either case, that jurisdiction must comport

with the due process guarantees of the Fourteenth Amendment. Under

federal law, the venue provision of the Clayton Act (“§ 22”) provides personal

jurisdiction over a defendant in an antitrust case “wherever [the defendant]

may be found.” 15 U.S.C. § 22. That provision allows nationwide service of

process against a defendant, but only if the provision’s venue provision is

met. Daniel v. Am. Bd. of Emergency Med., 428 F.3d 408, 424-25

(2d Cir. 2005).

Section 22 establishes venue over an antitrust defendant both: (1) “in the

judicial district whereof it is an inhabitant”; and (2) “in any district wherein

it may be found or transacts business.” 15 U.S.C. § 22. “Transacting

business” is sustained by the “practical, everyday business or commercial

concept of doing or carrying on busines of any substantial character.” Daniel,

428 F.3d at 428. The nature of a corporate defendant’s business is ultimately

essential to the inquiry. All Star Carts, 596 F. Supp. 2d at 637. “A

parent-subsidiary relationship may form a basis for the exercise of Clayton

Act jurisdiction.” Id.

Regarding defendant WCI, Twin Bridges has adequately established

personal jurisdiction under § 22. In arguing otherwise, defendants make

much of the Canadian corporation’s observance of corporate formalities and

their extremely remote distance from the nitty-gritty conflicts between

plaintiff, County Waste, and Robert Wright. And indeed, their arguments

are not without merit, particularly to the extent that defendants urge that

WCI limits itself to larger issues and allows its subsidiaries to primarily

govern themselves through their decentralized organization scheme. Annual

Report p. 47.

But WCI’s treatment of landfills in this district is what ultimately

convinces the Court of its jurisdiction over this defendant. WCI frequently

refers to the landfills as “ours.” See, e.g., Annual Report pp. 14-18, 23, 27-28,

37, 39, 44, 56-57, 60. That is no mere accident, because WCI specifically

describes purchasing those landfills as a strategy to aid in vertical

integration in markets where it would be advantageous. Id. at 11. What is

more, plaintiff has alleged WCI’s ownership of nine landfills in the Capital

Region Market. Compl. ¶ 33.

Defendants do not dispute any of those facts. Instead, defendants point

out that WCI itself does not own the landfills: its subsidiaries do. See

Compl. ¶ 33. That may be true, but the amended complaint alleges—and

defendants do not meaningfully dispute—that WCI guides the overall

strategy that dictates that those subsidiaries purchase landfills where it

presents a market advantage. See id. After all, if WCI claims the landfills as

its own and specifically outlines a strategy for when landfills should be

purchased, it can hardly contend that it does not have a hand in purchasing

them and thereby transacting business. Annual Report pp. 11, 14-18, 23,

27-28, 37, 39, 44, 56-57, 60.

Accordingly, personal jurisdiction under § 22 is met for WCI. Yet that

does not answer whether the Due Process Clause also permits the Court’s

personal jurisdiction over the Canadian defendant. To that end, there are

two types of personal jurisdiction contemplated by the Due Process Clause:

general and specific.

“For an individual, the paradigm forum for the exercise of general

jurisdiction [comporting with due process] is the individual’s domicile; for a

corporation, it is an equivalent place, one in which the corporation is fairly

regarded as at home.” Bristol-Meyers Squibb Co. v. Superior Court of

California, 137 S. Ct. 1773, 1780 (2017). “A corporation that operates in

many places can scarcely be deemed at home in all of them.” Sonera Holding

B.V. v. Cukurova Holding A.S., 750 F.3d 221, 225 (2d Cir. 2014) (citing

Daimler AG v. Bauman, 571 U.S. 117, 139 n.20 (2014)).

Instead, the affiliations capable of supporting general jurisdiction “have

the virtue of being unique—that is, each ordinarily indicates only one place—

as well as easily ascertainable.” Sonera, 750 F.3d at 225.

Nothing in Twin Bridges’ complaint suggests that New York or its

Northern District is fairly regarded as WCI’s home. On the contrary, this

defendant is a Canadian corporation operating out of Texas. Compl. ¶ 18.

General personal jurisdiction over WCI can thus safely be ruled out.

But the specific jurisdiction inquiry tells a different story. That inquiry

follows three steps. First, the plaintiff must demonstrate that the defendant

has sufficient “minimum contacts with [the forum state] such that the

maintenance of the suit does not offend traditional notions of fair play and

substantial justice.” Int’l Shoe Co. v. State of Washington, 326 U.S. 310, 316

(1945) (citations and quotation marks omitted). It is “insufficient to rely on a

defendant’s random, fortuitous, or attenuated contacts or on the unilateral

activity of a plaintiff with the forum to establish specific jurisdiction.” U.S.

Bank Nat’l Assoc. v. Bank of Am. N.A., 916 F.3d 143, 150 (2d Cir. 2019)

(internal citations and quotation marks omitted).

“Nor is it sufficient for a plaintiff to show simply that a defendant’s actions

caused an ‘effect’ in the forum state where the defendant has not expressly

aimed its conduct at the forum.” U.S. Bank, 916 F.3d at 151 (internal

citations and quotation marks omitted). In a case involving the flow of

commerce into a state, “[t]he defendant’s transmission of goods permits the

exercise of jurisdiction only where [it] can be said to have targeted the

forum[.]” J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873, 882 (2011).

If a plaintiff makes that showing, the second step tasks it with

demonstrating that “the litigation results from alleged injuries that ‘arise out

of or relate to’ those activities.” In re Terrorist Attacks, 714 F.3d at 674

(citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985)).

Finally, for the third step, the Court “considers those contacts in light of

other factors to determine whether the assertion of personal jurisdiction

would comport with fair play and substantial justice.” U.S. Bank, 916 F.3d at

151 (internal citations and quotation marks omitted). For specific

jurisdiction, those factors are: (1) the defendant’s burden; (2) the interests of

the forum State; (3) the plaintiff’s interest in obtaining relief; (4) the

interstate judicial system’s interest in efficient resolution; and (5) public

policy. Asahi Metal Indus. Co. v. Superior Ct. of Cal., 480 U.S. 102, 113

(1987).

The first step of the personal jurisdiction inquiry carries over neatly from

the Clayton Act analysis. Twin Bridges has alleged that WCI strategically

directed its subsidiaries to consolidate ownership of landfills in the Capital

Region Market, which involves a deliberate decision to conduct business in

New York. Annual Report pp. 11, 14-18, 23, 27-28, 37, 39, 44, 56-57, 60.

The second step is similarly straightforward. Twin Bridges has alleged

that WCI purchased those landfills to advance a competitive advantage

through vertical integration. Compl. ¶ 74; Annual Report p. 11. By plaintiff’s

logic, WCI is trying to consolidate monopoly power for its local offshoots.

Accordingly, because WCI’s conduct is directly related to an element of

plaintiff’s claims against defendants, plaintiff’s injuries attributable to that

monopoly power “arise from” WCI’s landfill ownership. In re Terrorist

Attacks, 714 F.3d at 674.

As for the third step, the Court is satisfied that New York’s interests in

preventing monopolies in its back yard and plaintiff’s ability to obtain

injunctive relief in the district where the alleged harm is taking place

outweigh any burden WCI might face. Asahi, 480 U.S. at 113. In fact, WCI’s

burden is especially minimal because WCI’s subsidiaries will need to be

defended in any case.

In short, all three steps of specific personal jurisdiction under the Due

Process Clause are met. Defendants’ motion to dismiss Twin Bridges’

complaint under Rule 12(b)(2) must be denied as to WCI, at least at this

juncture. See, e.g., All Star Carts, 596 F. Supp. 2d at 638-39 (denying motion

to dismiss on personal jurisdiction grounds for owner of subsidiary garbage

companies because of broad scope of personal jurisdiction under § 22).

The outlook is not quite so bright for Twin Bridges’ claims against

WCUSI, however. Plaintiff offers precious few allegations unique to this

defendant. On the contrary, most of the complaint simply lumps WCUSI

together with the other defendants. See, e.g., Compl. ¶ 30 (noting that most

of complaint will collectively refer to defendants as “Waste Connections”).

Otherwise, plaintiff only offers the conclusory allegation that WCUSI

“transact[s] substantial business within New York State[.]” Id. ¶ 29.

By contrast, defendants have submitted an affidavit that disavows any

operational functions by WCUSI relevant to the present complaint. Pio

Aff. ¶¶ 15-20. Similarly, that affidavit insists that there are no WCUSI

employees in New York State at present. Id. ¶ 32.

For its part, Twin Bridges objects that this affidavit is self-serving and

should be rejected. But even if the Court were to take plaintiff up on that

invitation, the complaint simply provides no allegations tying WCUSI to any

conduct it complains of. Even assuming that plaintiff could somehow

establish personal jurisdiction through § 22 or New York’s long-arm statute6

on these barebones facts, the lack of any link between any conduct in the

complaint attributable to WCUSI and the harms plaintiff complains of would

6 If a plaintiff cannot meet § 22’s venue requirements, the plaintiff must establish personal

jurisdiction through state law. See Daniel, 428 F.3d at 427 (noting that plaintiff failing to meet

venue requirements of § 22 “must look to other service of process provisions, notably those specified

in [Rule] 4 or incorporated therein from state law to satisfy this requirement”).

prove fatal to the second step of the Due Process analysis. In re Terrorist

Attacks, 714 F.3d at 674 (requiring harm plaintiff complains of to arise from

contacts with forum state).

Accordingly, Twin Bridges has failed to satisfy its burden of proving

personal jurisdiction over WCUSI. Defendants’ motion to dismiss under Rule

12(b)(2) must be granted on that score, and WCUSI must be dismissed from

this case.

V. CONCLUSION

Despite defendants’ best efforts, Twin Bridges’ antitrust claims remain

largely intact in the aftermath of their motion to dismiss. Even so, that

motion has nevertheless allowed the Court to streamline the issues—and

defendants—in this case going forward. Counts I and II against defendants

County Waste, Robert Wright, and WCI may proceed.

Therefore, it is

ORDERED that

1. Defendants’ motion to dismiss under Rule 12(b)(2) and 12(b)(6) is

GRANTED in part and DENIED in part;

2. Count III for attempt to monopolize for a refusal of access to disposal

facilities is DISMISSED;

3. Defendant Waste Connections U.S., Inc. (WCUSD) is DISMISSED;

30

4, Plaintiff Twin Bridges Waste and Recycling, LLC’s claims under

Counts: (I) attempt to monopolize through predatory pricing; and

(II) attempt to monopolize through anticompetitive conduct remain

against defendants County Waste and Recycling Service, Inc., Robert

Wright Disposal, Inc., and Waste Connections, Inc.; and

5. The remaining defendants are directed to answer Counts I and II of

plaintiff Twin Bridges Waste and Recycling, LLC’s amended complaint

no later than Tuesday, September 28, 2021.

IT IS SO ORDERED.

Dated: September 14, 2021 David N fHurd

Utica, New York. U.S. District Judge

31