In Re Amazon.com, Inc. eBook Antitrust Litigation

UNITED STATES DISTRICT COURT ELECTRONICALLY FILED

DOC #: _________________

SOUTHERN DISTRICT OF NEW YORK

DATE FILED: 3/2/2024

----------------------------------------------------------------- X

:

:

:

: 1:21-cv-00351-GHW-VF

:

IN RE AMAZON.COM, INC. EBOOK : ORDER

ANTITRUST LITIGATION, :

:

:

:

:

----------------------------------------------------------------- X

GREGORY H. WOODS, United States District Judge:

On July 31, 2023, Magistrate Judge Valerie Figueredo issued a thoughtful and well-reasoned

Report and Recommendation in this matter. Dkt. No. 212. In it, Judge Figueredo recommended

that the Court grant in part and deny in part Defendants’ motions to dismiss Plaintiffs’ claims in this

case. Dkt. Nos. 188, 190. Because the Report and Recommendation is sound, the Court adopts it

in full and grants in part and denies in part Defendants’ motions to dismiss.

I. BACKGROUND

The Court refers to the July 31, 2023 Report and Recommendation, Dkt. No. 212 (the

“R&R”), for a comprehensive description of the facts and procedural history of the case but will

briefly review the procedural history relevant to these motions.1

The initial complaint in this matter was filed on January 14, 2021. Dkt. No. 1. A number of

related cases asserting substantially identical claims followed quickly on its heels. On April 15, 2021,

the Court appointed Hagens Berman Sobol Shapiro LLP as interim lead counsel in the various

related actions. Dkt. No. 54. And on May 24, 2021, the Court entered an order consolidating the

related actions and establishing a deadline for the submission of a consolidated amended complaint.

1 Unless otherwise noted, the Court uses the capitalized terms defined in the R&R.

Dkt. No. 66. Plaintiffs filed an amended complaint on June 2, 2021. Dkt. No. 67. Defendants

moved to dismiss the complaint, Dkt. Nos. 96, 98, and Judge Figueredo issued a report and

recommendation recommending that the Court grant the motions and dismiss all of Plaintiffs’

claims, Dkt. No. 161 (the “First R&R”). The Court adopted the First R&R in full over Plaintiffs’

objections but granted Plaintiffs leave to amend. Dkt. No. 170 (the “First MTD Order”); see also

Dkt. Nos. 166, 167, 168 (objections to First R&R and Defendants’ responses).

On November 21, 2022, Plaintiffs filed a new amended complaint. Dkt. No. 175

(“SACAC”). Amazon and the Publishers separately moved to dismiss Plaintiffs’ claims, which

Plaintiffs oppose. Dkt. Nos. 188–191, 194, 203–204. Following oral argument, Judge Figueredo

issued the R&R, recommending that the Court grant in part and deny in part Defendants’ motions

to dismiss and: (1) dismiss all Plaintiffs who did not purchase their eBooks from Amazon for lack

of standing; and (2) dismiss Plaintiffs’ Section 2 conspiracy to monopolize and Section 1 restraint of

trade claims under the Sherman Act for failure to state a claim for relief.2 R&R at 36–37, 59.

Plaintiffs and Amazon separately object to substantially all of Judge Figueredo’s conclusions

in the R&R. Dkt. No. 215 (“Amazon Obj.”); Dkt. No. 216 (“Plaintiffs Obj.”). The Publishers filed

a response to Plaintiffs’ objections (Dkt. No. 218), Plaintiffs filed a response to Amazon’s objections

(Dkt. No. 219), and Amazon filed a response to Plaintiffs’ objections (Dkt. No. 220). With the

Court’s leave, Amazon and Plaintiffs filed a reply and sur-reply, respectively. Dkt. Nos. 223, 226.

On September 21, 2023, Plaintiffs filed a notice of supplemental authority. Dkt. No. 217. On

February 6, 2024, Amazon filed a notice of supplemental authority (Dkt. No. 231), to which

Plaintiffs responded (Dkt. No. 232). The Court has reviewed the parties’ briefing.

2 Because these two are the only claims asserted against the Publishers, adoption of the R&R in full results in

the dismissal of the Publishers from this case.

II. LEGAL STANDARD

A district court reviewing a magistrate judge’s report and recommendation “may accept,

reject, or modify, in whole or in part, the findings or recommendations made by the magistrate

judge.” 28 U.S.C. § 636(b)(1). Parties may raise specific, written objections to the report and

recommendation within fourteen days of receiving a copy of the report. Id.; see also Fed. R. Civ. P.

72(b)(2).

When a party timely objects to a magistrate’s report and recommendation, a district court

reviews de novo “those portions of the report or specified proposed findings or recommendations to

which objection is made.” 28 U.S.C. § 636(b)(1). But where “the party makes only frivolous,

conclusory or general objections, or simply reiterates her original arguments, the Court reviews the

report and recommendation only for clear error.” Chen v. New Trend Apparel, Inc., 8 F. Supp. 3d 406,

416 (S.D.N.Y. 2014) (quoting Silva v. Peninsula Hotel, 509 F. Supp. 2d 364, 366 (S.D.N.Y. 2007)).

“Further, the objections ‘must be specific and clearly aimed at particular findings in the magistrate

judge’s proposal.’” McDonaugh v. Astrue, 672 F. Supp. 2d 542, 547 (S.D.N.Y. 2009) (quoting Molefe v.

KLM Royal Dutch Airlines, 602 F. Supp. 2d 485, 487 (S.D.N.Y. 2009)). The Court also reviews for

clear error those parts of the report and recommendation to which no party has timely objected. 28

U.S.C. § 636(b)(1)(A); Lewis v. Zon, 573 F. Supp. 2d 804, 811 (S.D.N.Y. 2008).

III. DISCUSSION

For purposes of its evaluation of the R&R, the Court treats the parties’ objections as

sufficiently precise to merit de novo review. The Court has reviewed the briefing with respect to the

motions to dismiss and the parties’ objections and has conducted a de novo review of the arguments

presented in connection with the motions to dismiss,3 informed by the arguments presented in the

3 No party appears to object to the R&R’s recommendation that Count III of the SACAC, a conspiracy-to-

monopolize claim under Section 2 of the Sherman Act, be dismissed. Accordingly, the Court has reviewed

the R&R’s analysis and conclusion as to that claim only for clear error and, finding none, the Court adopts

objections and the briefing responding to them. Having done so, the Court rejects the Objections

and adopts in full the thoughtful and well-reasoned R&R by Judge Figueredo. The Court briefly

addresses certain of the parties’ specific objections below.

A. Plaintiffs’ Antitrust Standing

The R&R recommends the dismissal of 13 out of 15 Plaintiffs who purchased their eBooks

from Amazon’s rival eBook retailers and not Amazon as “indirect purchasers” lacking antitrust

standing. R&R at 34–37. Plaintiffs object, arguing that the 13 “indirect purchaser” Plaintiffs are

nonetheless direct purchasers from the Publishers. Plaintiffs Obj. at 8–9. Amazon separately

objects to the recommendation that the Court not dismiss the claims of the two Plaintiffs who

purchased eBooks from Amazon (the “Direct Purchaser Plaintiffs”). Amazon Obj. at 8–21.

Both sets of objections fail in light of the Supreme Court’s decision in Apple Inc. v. Pepper,

which held that iPhone owners had antitrust standing because they were direct purchasers of iPhone

apps from Apple, who allegedly engaged in antitrust conduct in relation to iPhone apps. 139 S. Ct.

1514, 1520–21 (2019) (citing Ill. Brick Co. v. Illinois, 431 U.S. 720 (1977)).4 The Supreme Court

rejected Apple’s argument that the iPhone owners were not direct purchasers because the app

developers were the ones to set the retail price of the apps and pay the allegedly inflated commission

fees to Apple. Id. at 1522.

First, Plaintiffs’ insistence that the 13 Plaintiffs who purchased eBooks from non-Amazon

retailers in fact purchased directly from the Publishers ignores the existence of the retailer, the

intermediary between the Publishers and the purchasers. The non-Amazon retailers from which

these 13 Plaintiffs purchased their books are not alleged to be antitrust violators or co-conspirators,

the R&R in relevant part and grants the Defendants’ motions to dismiss in part, dismissing Count III of the

SACAC. See R&R at 58.

4 To avoid confusion, the Court refers to the Supreme Court decision in Apple Inc. v. Pepper, 139 S. Ct. 1514

(2019), as “Pepper” and the Second Circuit decision in United States v. Apple, Inc., 791 F.3d 290 (2d Cir. 2015),

as “Apple, Inc.”

as was the case in Pepper. Thus, the 13 Plaintiffs are “indirect purchasers” who fail to plead antitrust

standing. See, e.g., In re Am. Express Anti-Steering Rules Antitrust Litig., 19 F.4th 127, 141 (2d Cir. 2021)

(holding no direct injury where defendant “enabled” others to raise fees, which plaintiffs paid to

defendant’s competitors).

Second, Amazon’s argument that the commission the Publishers pay to Amazon5 is not

directly linked to the prices paid by Amazon’s retail eBook customers was squarely rejected by

Pepper, in which the Supreme Court noted:

[W]e fail to see why the form of the upstream arrangement between the

manufacturer or supplier and the retailer should determine whether a monopolistic

retailer can be sued by a downstream consumer who has purchased a good or service

directly from the retailer and has paid a higher-than-competitive price because of the

retailer’s unlawful monopolistic conduct.

139 S. Ct. at 1523. Amazon attempts to distinguish itself by arguing that it has no control over its

eBook prices (according to the SACAC). Amazon Obj. at 9–13; see also In re Am. Express, 19 F.4th at

139–40 (explaining the “first-step rule,” which requires a direct causal link to plead antitrust

standing). But this is not a material distinction from the “who sets the price” argument that the

Supreme Court rejected in Pepper, 139 S. Ct. at 1522. And, in any case, Amazon cannot disclaim any

control over eBook pricing, given the alleged MFNs and other contractual terms that purportedly

give Amazon considerable leverage over eBook pricing and terms. See, e.g., SACAC ¶¶ 8–9, 58–96.

As the R&R cogently explains, the SACAC adequately alleges that the Direct Purchaser Plaintiffs

suffered an injury from higher-than-competitive prices on trade eBooks sold by Amazon, the alleged

monopolistic retailer. R&R at 18–28. The Direct Purchaser Plaintiffs are also efficient enforcers

under the four-factor balancing analysis for the reasons explained by the R&R. Id. at 28–34.

5 In one instance, Amazon references commission fees that a publisher pays to agents. Amazon Obj. at 10–11.

It is not clear why Amazon makes this argument. The “commission” addressed by the SACAC, and relevant

to the analysis at hand, is the transaction fee that Amazon charges for eBooks sold on its platform. See, e.g.,

SACAC ¶ 3.

Relatedly, Amazon disputes the R&R’s definition of the relevant market. Amazon argues

that the market affected by Amazon’s (and the other Defendants’) purported antitrust conduct is

that of “business-to-business services” (i.e., the provision of agency services for eBook sales) rather

than that of the retail trade eBooks themselves and that, therefore, the purported injury suffered by

the Direct Purchaser Plaintiffs—as purchasers of trade eBooks—occurred in a different market than

the market affected by the alleged conduct. Amazon Obj. at 16–21; see also Dkt. No. 223 at ECF

p. 5 (Amazon’s reply brief). Amazon also faults the R&R for not addressing In re Aluminum

Warehousing Antitrust Litigation, in which the Second Circuit held that purchasers of aluminum and

aluminum products could not plead antitrust injury from an alleged conspiracy by derivatives traders

and warehouse operator affiliates that resulted in higher prices for aluminum in the market. 833

F.3d 151, 154–56, 161–62 (2d Cir. 2016).

Aluminum Warehousing only further buttresses the conclusion that the Direct Purchaser

Plaintiffs have adequately pleaded an antitrust injury, regardless of Amazon’s attempts to parse the

precise relevant market. While it is generally the case that “only those that are participants in the

defendants’ market can be said to have suffered antitrust injury,” the Supreme Court has “carved out

a narrow exception . . . for parties whose injuries are ‘inextricably intertwined’ with the injuries of

market participants.” Id. at 158. Under this exception, a plaintiff who suffers an injury “in the very

market that is directly restrained” by the alleged wrongful conduct, even if not the actual market the

defendants participate in, may still have antitrust standing. Id. at 161. The plaintiffs in Aluminum

Warehousing, who failed to plead antitrust injury, had not transacted with the defendants or stored

aluminum in the defendants’ warehouses, but were merely purchasers in the general aluminum

market that had experienced higher aluminum prices. Id. at 161–62. This is similar to the 13

Plaintiffs who, as explained, are dismissed as indirect purchasers.

The Direct Purchaser Plaintiffs, however, are situated differently: They transacted with

Amazon directly and allegedly paid a higher price to Amazon as a result of Amazon’s purported

antitrust conduct.6 Amazon attempts to break the causation chain by arguing that the actual alleged

injury at issue was Amazon charging the Publishers high commission fees, which the Publishers then

reacted to by raising the prices of eBooks. Dkt. No. 223 at ECF p. 9. But this ignores that the

commission fees come out of the pocket of the purchasers of eBooks (and go into Amazon’s

pocket), who are therefore the most directly injured, and that the retail trade eBooks market is

ultimately the target and reason for Amazon’s purported antitrust conduct. See Aluminum

Warehousing, 833 F.3d at 160–61 (“[M]ost of the time when a putative plaintiff has suffered antitrust

injury that is ‘inextricably intertwined’ with the injury the conspirators ultimately intended to inflict,

it is because the conspirators used the plaintiff’s injury as the ‘means,’ ‘fulcrum,’ ‘conduit,’ or ‘market

force’ to realize their illegal ends.”). The Direct Purchaser Plaintiffs have pleaded antitrust injury

that is “inextricably intertwined” with the purported antitrust conduct.

Accordingly, the Court rejects Plaintiffs’ and Amazon’s objections to the R&R on Plaintiffs’

antitrust standing and adopts in full the thorough analysis contained in the R&R. Amazon’s motion

to dismiss is granted in part to the extent that it seeks to dismiss the 13 Plaintiffs who did not

purchase their eBooks from Amazon.7

B. Amazon’s Anticompetitive Conduct Under Section 2

The R&R recommends that Amazon’s motion to dismiss Counts I and II of the SACAC,

which assert claims of monopolization and attempted monopolization under Section 2 of the

Sherman Act against Amazon, be denied as to the Direct Purchaser Plaintiffs. R&R at 41.

6 Amazon’s purported antitrust conduct includes not only charging supracompetitive commission fees on

eBook sales, but also discouraging alternative business models (such as print-and-eBook bundles or pay-as-

you-read models), discouraging the development of enhanced or highly illustrated but work-intensive eBook

products, and preventing (or deterring) Publishers from offering lower retail prices for eBooks on other

platforms. See SACAC ¶¶ 61–96.

7 The Publishers did not move to dismiss for lack of antitrust standing. See R&R at 16 n. 7.

Amazon’s objections on antitrust standing grounds have already been addressed. Amazon also

objects on the basis that Plaintiffs have failed to allege anticompetitive conduct because:

(1) Amazon’s contractual terms with the Big Five fall short of “most favored nation” (“MFN”)

clauses and are not anticompetitive; and (2) Amazon’s transaction costs and the commission fees

charged by other eBook platforms are not appropriate benchmarks for the commission fee Amazon

charges the Publishers. Amazon Obj. at 21–25.

As ably explained by the R&R, Amazon’s arguments fail at this pleading stage. Plaintiffs are

entitled to all reasonable inferences drawn in their favor from their non-conclusory allegations. See

Lynch v. City of New York, 952 F.3d 67, 75 (2d Cir. 2020). The Court takes as true for the purposes of

this analysis that: (1) Amazon’s “notifications provisions” and other contractual provisions with the

Publishers—though perhaps not technically MFN clauses on their face—impose material

restrictions on the Publishers’ ability to freely contract with other eBook retailers and therefore have

anticompetitive effects, see, e.g., SACAC ¶ 59 (“Amazon has continuously imposed contract

provisions that effectively function as MFNs on book publishers.”); and (2) Amazon’s transaction

costs in publishing each eBook and the comparative commissions charged by other eBook retailers

support the inference that the fee Amazon charges to the Publishers is unreasonably high and

supracompetitive, see, e.g., id. ¶¶ 99–100.

Accordingly, the Court rejects Amazon’s objections to the R&R regarding Plaintiffs’ Section

2 claims against Amazon and adopts in full the thorough analysis contained in the R&R. Amazon’s

motion to dismiss is denied as to Plaintiffs’ Section 2 claims of monopolization and attempt to

monopolize.

C. Unreasonable Restraint on Trade Under Section 1

The R&R recommends that Defendants’ motions to dismiss be granted as to Count IV of

the SACAC, which asserts a claim under Section 1 of the Sherman Act for unlawful agreements,

combinations, and conspiracies in restraint of trade. R&R at 58. Plaintiffs split their objections to

this recommendation into two separate buckets: (1) the Court should look at Amazon’s agreements

with the Publishers in the aggregate and find that Amazon is liable under Section 1; and (2) the

Court should find that the SACAC adequately pleads a Section 1 per se horizontal conspiracy or “rule

of reason claim[]” against the Publishers. Plaintiffs Obj. at 1. Both arguments fail, however,

because the first argument depends on the second, and the second argument does not succeed.

First, to the extent that Plaintiffs’ first argument asserts that Amazon should be held liable

under Section 1 on its own, it is not clear that the law permits this. “To hold a defendant liable for

violating § 1 of the Sherman Act, a district court must find a combination or some form of

concerted action between at least two legally distinct economic entities that constituted an

unreasonable restraint of trade.” United States v. Apple, Inc., 791 F.3d 290, 313 (2d Cir. 2015) (internal

quotation marks and citation omitted). As a result, “purely unilateral conduct is illegal only under

§ 2 and not under § 1. . . . [R]estraint of trade without a conspiracy or combination is not unlawful

under § 1.” Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752, 767 n. 13 (1984); see also Int’l

Distribution Ctrs., Inc. v. Walsh Trucking Co., 812 F.2d 786, 794 (2d Cir. 1987) (reversing jury verdict

finding a Section 1 violation because a “[S]ection 1 conspiracy requires a plurality of actors agreeing

to restrain trade” and the evidence only implicated one defendant, who hired other defendants but

did not conspire with them (emphasis added)). “Circumstances must reveal a unity of purpose or a

common design and understanding, or a meeting of minds in an unlawful arrangement.” Anderson

News, L.L.C. v. Am. Media, Inc., 680 F.3d 162, 183 (2d Cir. 2012) (emphasis in original) (internal

quotation marks and citations omitted). The R&R suggests that the mere existence of an agreement,

such as the ones between Amazon and each Publisher, is sufficient to meet this requirement under

Section 1. R&R at 54. But it is not clear to this Court that Amazon’s separate, individual

agreements with the Publishers can form the basis of a Section 1 violation unless the Publishers

were participants in an effort to unreasonably restrain trade in entering into such agreements.8 See

Int’l Distribution Ctrs., Inc., 812 F.2d at 795 (“[T]he salient point remains that plaintiff did not offer a

scintilla of evidence that any of the [other defendants hired by the primary wrongdoer] knew of or

participated in the predatory pricing scheme.”). Cf. Ziglar v. Abbasi, 582 U.S. 120, 153 (2017) (citing

Copperweld Corp., 467 U.S. at 769–71) (“Conspiracy requires an agreement—and in particular

an agreement to do an unlawful act—between or among two or more separate persons.”).

In any case, regardless of whether one may assert a Section 1 claim against a single unilateral

actor as a general matter, that is not the case before the Court today. Plaintiffs’ allegations and

arguments squarely depend on an anticompetitive agreement among the Publishers (and Amazon),

not a standalone unreasonable restraint of trade imposed by Amazon. Notably, Plaintiffs allege that

it was the Publishers who worked together and thereby “forced” the contractual terms of the

conspiracy on an unwilling Amazon:

• “The Big Five . . . feared Amazon’s growing power in the trade book industry and

. . . that Amazon would render [the Big Five] obsolete by negotiating directly with

authors and literary agents for rights. To counter Amazon’s growing power, the Big

Five determined that they needed to force Amazon to abandon its competitive pricing

model.”

• “When Amazon refused their entreaties [for higher eBook prices], the publishers

recognized the importance of coordinating their efforts to raise prices.”

• “Through a coordinated effort, the Big Five forced Amazon to accept the agency

model . . . . After Amazon’s unsuccessful attempt at retaliation, Amazon acceded to

the Big Five’s demands, but not before Amazon filed a complaint with the FTC.”

• “[T]he Big Five promptly reintroduced the agency model by renegotiating their

agreements with Amazon, thus reclaiming the right to set prices in furtherance of

8 Plaintiffs cite to Ohio v. American Express Co., in which the Supreme Court held that—following a bench

trial—the credit card company American Express had not engaged in a Section 1 violation by including an

“antisteering provision” (prohibiting the discouragement of using American Express credit cards) in its

contracts with merchants. 585 U.S. 529, 550–51 (2018). But this is neither controlling nor persuasive

authority, as the Supreme Court was not asked to—and did not—actually address whether a Section 1 claim

could be brought solely against American Express on the basis of its contracts with merchants; the Supreme

Court merely assumed as much in reaching the conclusion that the plaintiffs had nonetheless failed to prove a

Section 1 claim against American Express.

their ongoing conspiracy.”

SACAC ¶¶ 125, 127, 134, 146 (emphases added) (footnotes omitted). At best, Plaintiffs allege that

Amazon “let the Big Five set their own high prices because it faces no competition from other eBook

retailers on price or product availability.” Id. ¶ 181 (emphasis added).9 According to Plaintiffs’ own

narrative of their case, any purported “restraint of trade” by Amazon asserted by Plaintiffs does not

exist without a horizontal conspiracy among the Publishers.

Second, the Court agrees with and adopts in full the R&R’s analysis concluding that the

SACAC fails to plead a per se horizontal conspiracy among the Publisher Defendants. R&R at 41–

53. The R&R’s analysis is thorough and well-reasoned, and the Court need not repeat it here.10 This

also rules out Plaintiffs’ hub-and-spoke conspiracy claim, which requires a vertical and horizontal

conspiracy. See Apple, Inc., 791 F.3d at 314 (“These arrangements consist of both vertical agreements

between the hub and each spoke and a horizontal agreement among the spokes to adhere to the

[hub’s] terms . . . .” (emphasis and alteration in original) (internal quotation marks and citation

omitted)).

What remains of Plaintiffs’ Section 1 claim, then, is their “rule of reason claim[]”11 against

the Publishers, which is based on an assertion of a vertical conspiracy rather than a horizontal

9 Plaintiffs also draw heavily from the Apple eBooks conspiracy with the Big Five. Notably, “the relevant

‘agreement in restraint of trade’ in [the Apple eBooks conspiracy] is not Apple’s vertical Contracts with the

Publisher Defendants . . . ; it is the horizontal agreement that Apple organized among the Publisher

Defendants to raise ebook prices.” Apple, Inc., 791 F.3d at 323. The Second Circuit went on to explicitly

comment: “How the law might treat Apple’s vertical agreements in the absence of a finding that Apple

agreed to create the horizontal restraint is irrelevant.” Id. at 325.

10 Plaintiffs’ assertion that Defendants “picked up where they had left off” after the Apple eBooks conspiracy

and continued with an Amazon eBooks conspiracy is speculative and conclusory—much less “direct

evidence” of a conspiracy. Plaintiffs Obj. at 13–14. By contrast, the Apple eBooks conspiracy involved

communications between Apple and the Publishers that showed that “Apple consciously played a key role in

organizing their express collusion,” including statements to the Publishers that “Apple would launch its

iBookstore only if a sufficient number of them agreed to participate and that each publisher would receive

identical terms . . . .” Apple, Inc., 791 F.3d at 318; see also id. at 319 (noting district court’s characterization of

the evidence of Apple’s collusion as “overwhelming”).

11 Plaintiffs also refer to the “quick look” analysis, which is “an abbreviated version of the rule of reason”

analysis. See Apple, Inc., 791 F.3d at 329–30.

conspiracy. See SACAC ¶ 289 (“Quick look/rule of reason: To the extent Defendants’ conduct is

determined to be a vertical price restraint . . . .”); see also Dkt. No. 194 at 38–43 (seeking rule of

reason analysis “if carried out only by a series of non-conspiratorial agreements”). Notably,

Plaintiffs’ sole objection to the dismissal of the rule-of-reason claim is that, while the law is unclear

on whether the vertical agreements for Publishers should be considered in the aggregate for the

purposes of the rule-of-reason analysis, “the better rule permits aggregation.” Plaintiffs Obj. at 23.

The Court declines to adopt such an approach, in the absence of controlling law and a coordinated

horizontal effort among the Publishers.

Accordingly, the Court rejects Plaintiffs’ objections to the R&R on Plaintiffs’ Section 1

claims against Amazon and the Publishers and adopts in full—except as modified by the Court’s

analysis above—the thorough analysis contained in the R&R. Defendants’ motions to dismiss are

granted as to Plaintiffs’ “restraint of trade” claims under Section 1 of the Sherman Act.

D. Leave to Amend

Plaintiffs do not request leave to amend in the event that the Court were to grant

Defendants’ motions to dismiss in full or in part, and the R&R does not make a recommendation

regarding whether leave to amend should be granted. The Publishers argue that leave to amend

should not be granted, noting that Plaintiffs have amended their complaint three times, once with

the benefit of a thorough R&R and the Court’s review, and have failed to address or cure the

deficiencies already identified. Dkt. No. 218 at ECF p. 7. The Court agrees.

“It is the usual practice upon granting a motion to dismiss to allow leave to replead.” Cortec

Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 48 (2d Cir. 1991); see also Fed. R. Civ. P. 15(a)(2) (“The

court should freely give leave [to amend] when justice so requires.”). Leave to amend may be denied

“for good reason, including futility, bad faith, undue delay, or undue prejudice to the opposing

party.” TechnoMarine SA v. Giftports, Inc., 758 F.3d 493, 505 (2d Cir. 2014) (citation omitted).

The deficiencies identified in Plaintiffs’ latest complaint are substantive, such as the lack of

antitrust standing for 13 out of 15 Plaintiffs, and so amendment would be futile. See, e.g., Cuoco v.

Moritsugu, 222 F.3d 99, 112 (2d Cir. 2000) (“[B]etter pleading will not cure [the complaint].

Repleading would thus be futile. Such a futile request to replead should be denied.”); see also

Roundtree v. City of New York, No. 19-CV-2475 (JMF), 2021 WL 1667193, at *6 (S.D.N.Y. Apr. 28,

2021) (collecting cases). Plaintiffs have also already amended the complaint multiple times,

including after the benefit of the Court’s analysis on Defendants’ first motions to dismiss—and yet

some of the same core deficiencies remain without an indication of how Plaintiffs might correct

them. See, e.g., Transeo S.A.R.L. v. Bessemer Venture Partners VI L.P., 936 F. Supp. 2d 376, 415

(S.D.N.Y. 2013) (“Plaintiff’s failure to fix deficiencies in its previous pleadings is alone sufficient

ground to deny leave to amend sua sponte.”); see also TechnoMarine S.A., 758 F.3d at 506 (affirming

denial of leave to amend where plaintiff already amended once following a motion to dismiss, failed

to resolve its pleading deficiencies, and did not identify how it would cure its pleading deficiencies).

In any case, Plaintiffs have not sought leave to replead, and “a district court has no obligation to

grant leave to amend sua sponte.” See Transeo S.A.R.L., 936 F. Supp. 2d at 415 (citing Gallop v. Cheney,

642 F.3d 364, 369 (2d Cir. 2011)). Accordingly, Plaintiffs are denied leave to amend.

IV. CONCLUSION

For the reasons set forth above and in the R&R, Defendants’ motions to dismiss are

GRANTED in part and DENIED in part. Plaintiffs who are indirect purchasers, i.e. those who did

not purchase their eBooks directly from Amazon, are DISMISSED for lack of standing. Plaintiffs’

Sherman Act Section 2 conspiracy to monopolize claim (Count III) and Sherman Act Section 1

restraint of trade claim (Count VI) are DISMISSED. This case remains referred to Judge Figueredo

for all general pretrial matters, who the Court anticipates will determine the next steps in this matter.

The Clerk of Court is directed to (1) terminate the motions pending at Dkt. Nos. 188, 190

and (2) terminate the following parties from this case: Shannon Fremgen, Mary Christopherson-

Juve, Denise DeLeon, Janet Ackerman, Robert Etten, Lawrence Twill, Thomas Agostino, Jordan

Sacks, Martacristina Bonilla, Ethan Silverman, Jeffery ‘Tomasulo, Jeffrey Cook, Susan Cook, Cecily

Lerner, Hachette Book Group, Inc., HarperCollins Publishers L.L.C., Macmillan Publishing Group,

LLC, Penguin Random House LLC, and Simon & Schuster, Inc.

SO ORDERED.

Dated: March 2, 2024

New York, New York f { : : : w2Dvy ad __-

GREG . WOODS

United States District Judge

14