# Force Partners, LLC v. KSA Lighting & Controls, Inc.

> District Court, N.D. Illinois · February 25, 2022

URL: https://www.frixlaw.com/law-library/cases/10645188

## Case

- **Court:** District Court, N.D. Illinois
- **Decided:** February 25, 2022
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

FORCE PARTNERS, LLC,

Plaintiff,

v. No. 19-cv-07776
Judge Franklin U. Valderrama
KSA LIGHTING & CONTROLS, INC.;
ACUITY BRANDS, INC.; JIM
WILLIAMS; and ASHLEY WILLIAMS,

Defendants.

MEMORANDUM OPINION AND ORDER
Plaintiff Force Partners, LLC (Force Partners), a sales agent in the lighting
and controls business, filed this antitrust lawsuit1 against four defendants: Force
Partners’ competitor, KSA Lighting & Controls, Inc. (KSA); KSA’s President, Jim
Williams (Jim); KSA’s then-Vice President of Distributor Solutions, Ashley Williams
(Ashley) (together with KSA and Jim, the KSA Defendants); and Acuity Brands, Inc.
(Acuity) (collectively, with the KSA Defendants, Defendants), a lighting
manufacturer, asserting violations of Sections 1 and 2 of the Sherman Act, Section 3
of the Clayton Act, the Illinois Antitrust Act (740 ILCS 10/1), the Illinois Uniform
Deceptive Trade Practices Act (815 ILCS 510/2) (the IUDTPA), and tortious
interference with prospective business relations. R. 41, FAC.2 Before the Court are

1The Court has jurisdiction over this action pursuant to 28 U.S.C. § 1331 and 28 U.S.C.
§ 1137.

2Citations to the docket are indicated by “R.” followed by the docket number or filing name,
and where necessary, a page or paragraph citation.
Defendants’ motions to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6).
R. 45, Acuity Mot. Dismiss; R. 47, KSA Mot. Dismiss.3 For the reasons discussed
below, the Court grants in part and denies in part Defendants’ motions to dismiss.

Background
I. Lighting and Control Business
Force Partners and KSA are sales representatives who compete in the lighting
and control business. FAC ¶¶ 26–27.4 Force Partners and KSA each act as the
exclusive sales representative for particular lighting and controls manufacturers in
the greater Chicagoland area. Id. ¶ 26. KSA is an exclusive sales representative for

Acuity, the largest manufacturer of lighting products in North America. Id. ¶ 32.
Force Partners’ and KSA’s customers are distributors who purchase lighting and
control products for both commercial and industrial projects and for their own shelves
to sell to end users. Id. ¶ 2. In order to best meet the needs of customers, lighting

3The KSA Defendants and Acuity filed separate motions to dismiss, but raise some
overlapping arguments in support of dismissal. Acuity Mot. Dismiss; KSA Mot. Dismiss. To
the extent Defendants raise similar arguments, the Court addresses those arguments—and
Force Partners’ responses—together. If only one motion to dismiss raises a certain argument,
the Court so notes in the Opinion.

The Court notes that a significant portion of Acuity’s motion to dismiss and reply briefs is
contained in footnotes. Arguments in footnotes are typically waived. See Sanders v. JGWPT
Holdings, Inc., 2016 WL 4009941, at *10 (N.D. Ill. July 26, 2016). Moreover, the Court’s
Standing Order, under “Memorandum of Law Requirements,” states that “[g]enerally, the
Court will not consider substantive arguments contained in footnotes.” However, Acuity filed
its briefs before this case was reassigned to this Court, so the Court will consider the
arguments raised in footnotes in Acuity’s briefs. And yes, the Court recognizes the irony of
including this admonishment in a footnote, but given that it is merely a reminder to the
parties for future briefs filed before this Court, and is unrelated to the substance of the
Opinion, the Court finds it appropriate to note in this manner.

4The Court accepts as true all of the well-pleaded facts in the FAC and draws all reasonable
inferences in favor of Force Partners. Platt v. Brown, 872 F.3d 848, 851 (7th Cir. 2017).
product distributors carry the products of a variety of manufacturers in their
inventory and also source products on a custom basis for “spec” commercial and
industrial projects. Id. ¶ 9. While the distributors directly purchase the lighting

products and controls from the manufacturers and the manufacturers’ exclusive sales
representative, contractors and end-users are the indirect purchasers of the products.
Id. ¶ 49.
The lighting and controls sold by “full line” sales representatives like Force
Partners and KSA include, among other products, exit and emergency lights and
signs, sports lighting, and wired and wireless controls. FAC ¶ 28. Force Partners

alleges that the relevant product market in this case is lighting and controls for
buildings and private roadways. Id.
II. Geographic Market
Lighting and controls manufacturers, like Acuity, contract with exclusive sales
representatives, like Force Partners and KSA, to cover a defined geographic territory.
FAC ¶ 29. A manufacturer’s designated sales representative is the only authorized
marketer of the designated brands in the specified area to downstream channels. Id.

Sales representative agencies have agreements that define their territories. Id. ¶ 30.
The relevant geographic market in this case is comprised of sixteen Illinois counties
in Northern Illinois and surrounding Chicago, including three counties in Northwest
Indiana (the Market). Id. ¶ 30. Sales representatives may represent more than one
manufacturer’s products in the same geographic territory. Id. ¶ 31. However,
manufacturers assign exclusive territories to just one sales representative. Id. ¶ 34.
Assigning exclusive territories to sales representatives enables manufacturers
to build and maintain brand sales through relationships with local distributors,
contractors, builders, and designers in the territory. FAC ¶ 34. These exclusive

contracts mean it is not easy to obtain a manufacturer’s products other than through
its exclusive sales representative. Id. In the relevant Market, over 75% of the trade
is handled by approximately 23 distributors, which in turn comprise approximately
90% of Force Partners and KSA’s customers. Id. ¶ 37.
For example, architects, lighting designers, and engineers develop
specifications for construction projects, and interact with sales representatives who

want their products specified for an upcoming project installation. FAC ¶ 47.
Architects and lighting designers usually list up to three acceptable alternative
manufacturers for each fixture type. Id. Sometimes these specifications list only one
manufacturer’s name, which indicates a “hard spec” with no substitution; other
specifications list as many as three manufacturers’ names, which means any one of
them is pre-approved and acceptable and invites competition to supply the specified
products. Id. Finally, some specifications reference a single manufacturer but state

“or equal,” meaning another manufacturer can be asked to compete and provide a
quote so long is it meets the technical requirements of the design. Id.
Sales representatives sell downstream through a few primary channels;
namely, stock and flow distributors and project/specification distributors. FAC ¶ 35.
Stock and flow distributors carry and sell inventory of a variety of brands in a
physical showroom, counter area, or warehouse that serves the “on-demand” needs of
small to mid-sized electrical contractors and a limited number of retail customers and
homeowners. Id. Project/specification distributors supply larger building projects and
provide materials management services to coordinate or direct goods to local staging

areas at the time that builders/contractors need the supplies. Id. Some distributors
deal in both stock and flow and project/specification work. Id.
Once distributors receive specifications for projects, they are expected to seek
bids from approved manufacturers’ representatives. FAC ¶ 49. Once the bids are
presented, the distributor is expected to submit the most complete package at the
best price that can be delivered in a timely manner. Id. Sales representatives can

provide budget quotes directly to contractors, but these quotes will include extra
margin for the distributor. Id. ¶ 36. Such quotes do not and cannot cut distributors
out of the sale because the distributors offer a consolidation point along with
financing, with terms that go back to the contractors. Id.
Force Partners alleges that distributors in the lighting market and their end
users benefit in numerous ways from competition among sales representatives like
Force Partners and KSA. FAC ¶ 50. These include the ability to identify the best price

and service options for their clients among available manufacturers, who expect
distributors to offer complete solutions for their lighting and control needs. Id.
III. Market Power
Between 2017 and August 2019, KSA and Force Partners were the top two
largest sales representatives supplying lighting and control products in the Market,
representing approximately 59.5% and 23%, respectively, of specified and approved
products in the project/specification market. FAC ¶ 43. The other two sales
representatives in the Market, PG enlighten and CLW, represented approximately
10% and 7.5% of product. Id.

IV. Power Point Presentation
In August 2019, Jim and his wife, Ashley, gave a PowerPoint presentation (the
Presentation) to all or most of the 23 most important lighting distributors in the
Market. FAC ¶ 73. Force Partners alleges that the goal of the Presentation was to
stop the distributors from doing business with Force Partners through a combination
of monetary inducements and threats to withhold critical products and services. Id.

The Presentation explicitly named Force Partners as a sales representative that the
distributors should boycott. Id. ¶ 77. Force Partners alleges that Defendants falsely
accused Force Partners of bypassing distributors to make sales directly to end-users
and contractors, thereby denying sales and profits to distributors. Id.
KSA subsequently rolled out a program by which, if a distributor wanted to
continue to receive KSA’s “best prices” and “services,” it would have to agree to be a
“Partner” of KSA (the Proposal). FAC ¶ 82. Stock and flow distributors were told that

they could not carry any of Force Partners’ brands on their shelves. Id. ¶ 83. The
biggest effect of such an agreement would be to take Eaton’s Cooper Lighting
products, an Acuity competitor, off these distributors’ shelves and significantly
reduce access to the Chicago market. Id. Project/specification distributors were told
that they had to rig bids to ensure that KSA won any multiple-name specification
bids that also included Force Partner. Id. ¶ 84. Where KSA brands and Force
Partners brands were specified for bidding on a project, the distributors were given
the choice of: (a) not quoting Force Partners brands at all, or (b) providing Force
Partners’ confidential pricing information to KSA so it could “match” the price. Id.

Force Partners claims that the goal of the Proposal’s terms was to take away business
away from Force Partners and drive it out of business. Id.
If the distributors did not agree to the Proposal, they would be deemed
“Associates” and would not be able to get KSA’s brands “best prices” or attendant
services. FAC ¶ 90. This would effectively bar the distributors’ ability to competitively
quote KSA brands and they would lose business to those distributors who were

willing to go along with the scheme. Id. Distributors informed Force Partners that
they were intimidated by KSA’s demands. Id. ¶ 94.
KSA left no copies of the Presentation with the distributors and did not allow
distributors to copy or photograph the Presentation. FAC ¶ 95. Nor has KSA ever
provided the distributors with any contracts to sign. Id. KSA said it would monitor
compliance by inspecting shelves at stock and flow distributors. Id. ¶ 97.
Acuity supported the Proposal. FAC ¶ 100. In August or September 2019, Jim

reported at a KSA sales meeting that Acuity’s then-CEO had reviewed the Proposal
presented in the Presentation, approved it, and suggested it could be used in other
markets. Id. At the request of a distributor, Acuity’s senior vice president of sales
attended the meeting with the distributor, during which he made it clear the Proposal
had Acuity’s backing. Id. ¶ 101.
According to Force Partners, the Proposal is not in the interests of distributors
or their customers. FAC ¶ 88. The specification community in the Market tends to be
brand-focused, and architects and designers often have preferred product lines

specified in their plans. Id. Chicago is known as a “line item” town where contractors
submit requests for quotes to distributors seeking between one-to-three “approved”
brand-specific quotes for ten-to-twenty different product categories as needed. Id.
After a distributor has obtained quotes from each of the specified brands via the
manufacturer’s sales representatives, the distributor can choose between the brand
and pricing options to provide the best value to the end-user or contractor. Id.

After KSA initiated the Proposal, Force Partners saw over a 20% decline in its
sales. FAC ¶ 110. As of the filing of the First Amended Complaint (FAC), Force
Partners suffered significant lost revenues. Id. ¶ 111.
Force Partners filed suit against the KSA Defendants and Acuity. In its FAC,
Force Partners asserts an illegal group boycott in violation of Section 1 of the
Sherman Act (Count I); horizontal conspiracy in violation of Section 1 of the Sherman
Act (Count II); attempted monopolization in violation of Section 2 of the Sherman Act

(Count III); exclusive dealing agreements in violation of Section 3 of the Clayton Act
(Count IV); violation of the Illinois Antitrust Act (Count V); violation of the IUDTPA
(Count VI); and a claim for tortious interference with prospective business relations
(Count VII).5 See FAC. Defendants now move to dismiss the FAC pursuant to Rule
12(b)(6).

5Force Partners mislabeled Count VII as Count VI.
Standard of Review
A motion to dismiss under Rule 12(b)(6) challenges the sufficiency of the
complaint. Hallinan v. Fraternal Order of Police of Chi. Lodge No. 7, 570 F.3d 811,

820 (7th Cir. 2009). Under Rule 8(a)(2), a complaint must include only “a short and
plain statement of the claim showing that the pleader is entitled to relief.” Fed. R.
Civ. P. 8(a)(2). To survive a motion to dismiss, a complaint need only contain factual
allegations, accepted as true, sufficient to “state a claim to relief that is plausible on
its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (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.” Id. The allegations “must be enough
to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. The
allegations that are entitled to the assumption of truth are those that are factual,
rather than mere legal conclusions. Iqbal, 556 U.S. at 678–79.
Analysis
I. Section 1 of the Sherman Act (Counts I and II)

In Counts I and II, respectively, Force Partners asserts that Defendants forced
a group boycott and engaged in a horizontal conspiracy that constituted an
unreasonable restraint of trade in violation of Section 1 of the Sherman Act, 15 U.S.C
§ 1. FAC ¶ 122.
Section 1 of the Sherman Act provides that “[e]very contract, combination in
the form of trust or otherwise, or conspiracy, in restraint of trade or commerce . . . is
declared to be illegal.” 15 U.S.C. § 1. Section 1 does not prohibit reasonable restraints
of trade, but only outlaws unreasonable restraints of trade. State Oil Co. v. Khan, 522
U.S. 3, 10 (1977). To state a Section 1 claim, a plaintiff must allege: (1) a combination

or some form of concerted action between at least two legally distinct entities that (2)
unreasonably restrains trade in the relevant market, and (3) an accompanying injury.
See In re Delta Dental Antitrust Litig., 484 F. Supp. 3d 627, 632–33, 643 (N.D. Ill.
2020) (citing Denny’s Marina, Inc. v. Renfro Prods., Inc., 8 F.3d 1217, 1220 (7th Cir.
1993)); Am. Needle, Inc. v. Nat’l Football League, 560 U.S. 183, 191 (2010).
Courts engage in three types of analyses to determine whether the alleged

conduct has anticompetitive effects under Section 1: the per se analysis, the rule of
reason, and the quick-look approach. In re Delta Dental Antitrust Litig., 484 F. Supp.
3d at 633.
A. Per Se Violations
The Supreme Court has explained that restraints on trade that are “unlawful
per se” are those that “have such predictable and pernicious anticompetitive effect,
and such limited potential for procompetitive benefit,” that it is obvious they are an

unreasonable restraint of trade. Khan, 522 U.S. at 10. The per se rule applies to
restraints “that would always or almost always tend to restrict competition and
decrease output.” Leegin Creative Leather Prods., Inc., v. PSKS, Inc., 551 U.S. 877,
886 (2007) (internal citation omitted). The per se rule is reserved for restraints with
which courts have had considerable experience, such that they can predict with
confidence that the restraint would be invalidated in all or almost all instances under
the rule of reason. Id. at 886–87.
Where the alleged “anticompetitive conduct does not amount to a per se

violation of the Sherman Act, courts assess the defendants’ conduct under the Rule
of Reason analysis.” Neptun Light, Inc. v. City of Chi., 2018 WL 1794769, at *3 (N.D.
Ill. Apr. 16, 2018) (internal citations omitted).
B. Rule of Reason
Under the rule of reason, the factfinder “must decide whether the questioned
practice imposes an unreasonable restraint on competition, taking into account a

variety of factors, including specific information about the relevant business, its
condition before and after the restraint was imposed, and the restraint’s history,
nature, and effect.” Khan, 522 U.S. at 10 (internal citations omitted). Generally, this
requires a plaintiff to show the “defendant has market power—that is, the ability to
raise prices significantly without going out of business—without which the defendant
could not cause anticompetitive effects on market pricing.”6 Agnew v. Nat’l Collegiate
Athletic Ass’n, 683 F.3d 328, 335 (7th Cir. 2012) (internal citation omitted).

6The third test courts sometimes apply is the “quick look” analysis. As the Seventh Circuit
has explained, “the quick-look approach can be used when ‘an observer with even a
rudimentary understanding of economics could conclude that the arrangements in question
would have an anticompetitive effect on customers and markets,’ but there are nonetheless
reasons to examine the potential procompetitive justifications.” Agnew v. Nat’l Collegiate
Athletic Ass’n, 683 F.3d 328, 336 (7th Cir. 2012). Under the quick-look analysis, if the
defendant lacks legitimate justification for facially anticompetitive behavior, then the court
condemns the practice without ado without resort to analysis of market power. Id. Force
Partners does not argue that the Court apply the quick-look analysis here, so the Court does
not address it substantively. See FAC.
C. Horizontal and Vertical Conspiracies

Agreements within the scope of Section I of the Sherman Act may be
“horizontal” which are “between competitors at the same level of market structure,”
or “vertical” which are “combinations of persons at different levels of the market
structure, e.g., manufactures and distributors.” Unites States v. Topco Assocs., Inc.,
405 U.S. 596, 608 (1972). “Horizontal agreements among competitors, including
group boycotts, [are] illegal per se.” Toys “R” Us, Inc. v. F.T.C., 221 F.3d 928, 936 (7th
Cir. 2000). On the other hand, most vertical agreements are analyzed under the rule
of reason. See Hennessy Indus. Inc. v. FMC Corp., 779 F.2d 402, 404 (7th Cir. 1985)

(“Only those vertical arrangements that accompany or implement a price fixing
scheme are considered per se violations; other vertical arrangements must be tested
under the Rule of Reason.”) (internal citation omitted); see also Republic Tobacco Co.
v. N. Atl. Trading Co., 381 F.3d 717, 736 (7th Cir. 2004) (“Unlike horizontal
agreements between competitors, vertical exclusive distributorships . . . are
presumptively legal.”).
A hybrid of a vertical and horizontal conspiracy is known as a “hub-and-spoke

conspiracy,” in which the “hub” stands in a vertical relationship with the “spokes,”
which are in a horizontal relationship with each other. See In re Sulfuric Acid
Antitrust Litig., 743 F. Supp. 2d 827, 860 (N.D. Ill. 2010). More specifically, a “hub-
and-spokes conspiracy “requires a plaintiff to allege both that there was a central
coordinating party (the ‘hub’), and that each participant (along the ‘rim’) recognized
that it was part of the greater arrangement, and it coordinated or otherwise carried
out its duties as part of the broader group.” Marion Healthcare, LLC v. Becton
Dickinson & Co., 952 F.3d 832 (7th Cir. 2020). As the Seventh Circuit has explained,
“a hub-and-spokes conspiracy requires a ‘rim’ connecting the various horizontal

agreements.” Id.
D. Theories of Counts I and II and Bases of
Defendants’ Motions to Dismiss

Defendants argue that Force Partners fails to state an unreasonable restraint
on trade in violation of Section 1 of the Sherman Act in Counts I and II. R. 46, Acuity
Memo. Dismiss at 4–12; R. 48, KSA Memo. Dismiss at 6–15. It appears, based on
their motions to dismiss, that Defendants interpret the theories underlying Counts I
and II differently. On the one hand, the KSA Defendants distinguish between the two
Counts based primarily on the parties to the alleged conspiracy—Count I alleges a
conspiracy among all Defendants, whereas Count II alleges a conspiracy between
Defendants and the distributors. See KSA Memo. Dismiss at 8–13. On the other hand,
Acuity argues that all three antitrust claims (Counts I–III) should be dismissed
because the “exclusivity” agreements between Defendants and distributors do not
harm competition; Acuity does not challenge any allegations of a conspiracy among
Defendants only. Acuity Memo. Dismiss at 4–12.
The Court, having closely examined the FAC’s allegations and Force Partners’
responses, is somewhat perplexed by the theories underlying Counts I and II, which

seem to be two sides of the same coin. In its Response to the KSA Defendants’ motion
to dismiss, Force Partners clarifies that “Count I, alleging an illegal boycott under
the Sherman Act, and Count II, alleging a horizontal hub-and-spoke conspiracy under
the Act, 15 U.S.C. § 1, are appropriately pleaded and state causes of action against
the KSA Defendants under the same analytical and factual framework.” R. 57, Pl.
KSA Resp. at 10. This explanation tracks the titles of Count I (Unreasonable

Restraint of Trade, Illegal Group Boycott – Violation of § 1 of the Sherman Act) and
Count II (Unreasonable Restraint of Trade, Horizontal Conspiracy – Violation of § 1
of the Sherman Act). FAC at 26–27. But Force Partners also states in its Response
that “Count I alleges that the Defendants jointly coerced distributors into entering
into a group boycott as part of a hub and spoke conspiracy” and that “Count II alleges
[] a hub and spoke conspiracy.” Pl. KSA Resp. at 10 (emphasis added). And the

horizontal hub-and-spoke conspiracy alleged in Count II is supported by allegations
relating to Defendants’ conspiracy to coerce distributors to boycott Force Partners.
FAC ¶¶ 128–30. Based on the above, the Court finds Counts I and II to be legally
indistinguishable. For purposes of this Opinion, the Court considers Count I to allege
a vertical conspiracy based on an agreement among the Defendants, as well as
between Defendants and the distributors, but not to allege a horizontal hub-and-
spoke conspiracy. It considers Count II to allege a horizontal hub-and-spoke

conspiracy based on the conspiracy underlying Count I.
Force Partners alleges that both counts are per se violations of the antitrust
laws, or alternatively violate the rule of reason. FAC ¶¶ 122–23, 131–32. As Force
Partners concedes, because Defendants are a manufacturer and sales representative,
and the boycott of Force Partners was effectuated by distributors, the FAC pleads the
horizontal nature of the conspiracy via the hub-and-spoke model. Pl. KSA Resp. at
11. As stated above, the per se rule applies to horizontal group boycotts, but generally
the rule of reason applies to vertical group boycotts with no horizontal component.
See MM Steel, L.P. v. JSW Steel (USA) Inc., 806 F.3d 835, 849–50 (5th Cir. 2015)

(collecting cases); see also Republic Tobacco, 381 F.3d at 736 (“[V]ertical exclusive
distributorships . . . are presumptively legal.”). The Court therefore applies the rule
of reason to Count I (because without the hub-and-spoke conspiracy hook, it can only
be a vertical conspiracy) and the per se rule to Count II.
Having parsed out the claims at issue, the Court turns to Defendants’
arguments in support of dismissal of Counts I and II. The KSA Defendants argue

that: (1) Count I should be dismissed because Defendants are incapable of conspiring
with each other; (2) Count I also should be dismissed because Force Partners does not
allege an actionable anticompetitive agreement between the KSA Defendants and
Acuity; (3) Count II should be dismissed because Force Partners does not allege an
anticompetitive agreement between Defendants and the distributors; and (4) Counts
I and II should be dismissed because Force Partners fails to plead that the alleged
agreements caused a restraint of trade within the relevant product and geographic

markets. KSA Memo. Dismiss at 6–15. Acuity does not raise the arguments relating
to Defendants’ ability to conspire with each other, nor does it analyze whether Force
Partners alleges an actionable anticompetitive agreement between the KSA
Defendants and Acuity. See Acuity Memo. Dismiss. Instead, Acuity focuses on the
agreement between Defendants and the distributors, arguing that Counts I and II
fail because: (1) Force Partners fails to rebut the presumption that exclusivity
agreements are a legitimate form of competition; (2) the agreements are not exclusive;
(3) the KSA Defendants’ Proposal does not harm the competitive process; and (4)
because the agreements are terminable at will, they do not prevent Force Partners

from offering distributors a better deal. Id. at 4–12. The Court addresses each
argument in turn, examining the two motions’ arguments together wherever possible.
E. Defendants’ Ability to Conspire with Each Other
(Count I, KSA Defendants)

The KSA Defendants contend that Count I fails because the alleged co-
conspirators, Jim, Ashley, KSA, and Acuity, are closely related individuals and
entities that cannot legally conspire with each other. KSA Memo. Dismiss at 7 (citing
Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752, 769 (1984)). Force Partners
concedes that Jim and Ashley—the President/CEO and then-Vice President of
Distribution of KSA, respectively—could not conspire with KSA, as it is “their own
company.” R. 57, Pl. KSA Resp. at 17; see Copperweld, 467 U.S. at 769 (a corporation
cannot conspire with its own officers and employees). However, Force Partners
maintains that the KSA Defendants together could—and did—conspire with Acuity.
Pl. KSA Resp. at 15–18.
The KSA Defendants argue that they could not have conspired with Acuity
because KSA is Acuity’s closely related sales representative, and Defendants share
the same economic interest: selling as many of Acuity’s products as possible. KSA

Memo. Dismiss at 7–8. In support, the KSA Defendants cite to a number of out-of-
Circuit decisions. Id. (citing F.B. Leopold Co. v. Roberts Filter Mfg. Co., 882 F. Supp.
433, 446–47 (W.D. Pa. 1995), aff’d, 119 F.3d 15 (Fed. Cir. 1997); Pink Supply Corp. v.
Hiebert, 788 F.2d 1313, 1316–17 (8th Cir. 1986); Card v. Nat’l Life Ins. Co., 603 F.2d
828, 834 (10th Cir. 1979); Boyce v. Penn Fishing Tackle Mfg., 1997 U.S. Dist. LEXIS
23293, at *14 (D.N.J. Sep. 8, 1997); The Sample Inc. v. Pendleton Woolen Mills, Inc.,

704 F. Supp. 498, 502 (S.D.N.Y. 1989)).
The KSA Defendants are correct that these cases, relying on Copperweld, stand
for the proposition that separate legal entities and individuals cannot conspire with
each other for purposes of § 1 of the Sherman Act where they are “so closely
intertwined in economic interest and purpose with [each other] as to amount to a
unified economic consciousness incapable of conspiring with itself.” Pink Supply, 788

F.2d at 1317. However, the Court agrees with Force Partners that the cases cited by
the KSA Defendants are distinguishable and that, based on the allegations in the
FAC, the Court cannot, at the motion to dismiss stage, find that that KSA and Acuity
are so closely intertwined that they amount to a unified economic consciousness. Pl.
KSA Resp. at 15–17. First, Force Partners accurately points out that each case cited
by the KSA Defendants in support of dismissal was decided at the summary judgment
stage, not at the motion to dismiss stage. Id. at 15. Next, Force Partners is also correct

that courts generally engage in a fact-intensive analysis about whether the
manufacturers and sales representatives were functionally distinguishable. Id. at
15–16 (citing Pink Supply, 788 F.2d at 1316–17 (discovery showed that the defendant
sales representatives’ role was only to generate sales for the defendant manufacturer
and they had no discretion over prices or terms or orders, and “[t]he representatives
therefore did not constitute an independent step in the . . . distribution process”)); see
also The Sample, 704 F. Supp. at 502 (same). As Force Partners argues in its
Response, here, the FAC alleges that sales representatives like KSA “can provide
budget quotes directly to contractors,” salespeople for representatives “focus on

calling on the contractors to influence which manufacturers they will select for
projects, and rely in such efforts on the sale representative’s value-add services and
their relationships with the contractors,” and lighting sales representatives “have
been described as ‘a separate breed of rep given their influence over how
specifications are written in many geographic markets.” Pl. KSA Resp. at 16–17
(citing FAC ¶¶ 36, 45). Additionally, unlike the cases cited by the KSA Defendants,

the alleged conspiracy in this case originated with the sales representative (KSA),
rather than with the manufacturer (Acuity). Id. at 17 (citing FAC ¶¶ 73–75, 100).
Given the above, as well as the allegation that KSA represents more than one
manufacturer, the Court cannot find, at the motion to dismiss stage, that the KSA
Defendants and Acuity’s actions uniformly served the same economic interest. The
Court finds that the FAC adequately alleges a Section 1 conspiracy among the KSA
Defendants and Acuity.

In their Reply,7 the KSA Defendants argue that Jim and Ashley should be
dismissed as defendants because Force Partners does not identify any party that they
conspired with, apart from KSA, which Force Partners concedes cannot form the basis

7Although the Court would usually decline to consider an argument or case asserted for the
first time in a reply, see Narducci v. Moore, 572 F.3d 313, 323 (7th Cir. 2009), the Court
touches on it briefly because Force Partners argued in its Response that Jim and Ashley are
individually liable because they conspired with Acuity, based on their relationship with
Acuity’s then-CEO. Resp. at 17 (citing FAC ¶ 74).
of a Section 1 conspiracy. R. 59, KSA Reply at 4. The Court agrees with Force Partners
that it has adequately alleged that Jim and Ashley are individually liable under
Section 1: the FAC alleges that Jim and Ashley were personally involved in the

alleged scheme, not only through their executive positions at KSA, but also by
personally making the Presentation in person to each distributor (and that an Acuity
representative attended at least one meeting at which the Presentation was given).
See FAC ¶¶ 73–74, 87, 101, 106); see Omni Healthcare, Inc. v. Health First, Inc., 2015
WL 275806, at *15 (M.D. Fla. Jan. 22, 2015) (the plaintiffs adequately alleged
individual defendants’ “active participation in the anticompetitive scheme, not

merely by using their executive positions . . . to authorize and approve the scheme,
but also by personally attempting to coerce physicians and practice groups” to “join
in a co-conspiring practice. . . . Those allegations suffice for individual antitrust
liability”) (citing United States v. Wise, 370 U.S. 405, 416 (1962)). Accordingly, the
Court finds that Force Partners has sufficiently alleged that each defendant is a co-
conspirator for purposes of Count I.
F. Actionable Agreement Between Defendants (Count I, KSA Defendants)

The KSA Defendants next argue that Count I should be dismissed because it
does not allege an actionable agreement between the KSA Defendants and Acuity.
The KSA Defendants raise three arguments: (1) Force Partners pleads no facts
plausibly suggesting that the KSA Defendants and Acuity entered into any
agreement for an unlawful purpose; (2) the allegation that KSA would “deny access”
to its brands to distributors “unless those distributors terminated their relationship”
with Force Partners is false; and (3) KSA has the right to unilaterally offer an
authorized distributor program and to stop dealing with any distributors that do not
wish to join the program. KSA Memo. Dismiss at 9–10.

Starting with the KSA Defendants’ second argument, the Court agrees with
Force Partners that it is improper, at the motion to dismiss stage, for the KSA
Defendants to seek dismissal on the basis that Force Partners’ allegation that KSA
would deny access to its brands is “false.” Pl. KSA Resp. at 21 (citing KSA Memo.
Dismiss at 10). As noted above, when evaluating a motion to dismiss, the Court must
accept the allegations in the complaint as true. Iqbal, 556 U.S. at 678.

Turning to the KSA Defendants’ first argument, the Court again agrees with
Force Partners. Force Partners alleges an agreement8 between Defendants—that
they jointly created the Presentation and the related scheme that was presented to
the distributors in August of 2019, which sought to cut off access to a market
necessary for Force Partners to be able to do business. Pl. KSA Resp. at 11 (citing
FAC ¶¶ 75, 77, 82–101). Put another way, Force Partners claims that Defendants’
Proposal is unlawful because its purpose was to drive Force Partners, a KSA

competitor, out of business by coercing the distributors to boycott Force Partners. Id.
The KSA Defendants argue that Force Partners’ allegations simply demonstrate that
the KSA Defendants were trying to compete for, and win, Force Partners’ customers

8The KSA Defendants do not argue that the FAC fails to allege that an agreement existed
between Defendants; rather, they contend that the purpose of any such agreement was not
unlawful. KSA Memo. Dismiss at 9–10. Nonetheless, Force Partners is correct that an
agreement need not be explicit to support a Section 1 claim. Pl. KSA Resp. at 18 (citing,
among other cases, Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 764 (1984)).
(distributors), by offering an authorized distributor program to the distributors. KSA
Memo. Dismiss at 9–10. Rather than constituting anticompetitive behavior, the KSA
Defendants contend that such a program actually enhances competition by cutting

prices. Id. (citing Concord Boat Corp. v. Brunswick Corp., 207 F.3d 1039, 1061 (8th
Cir. 2000)); KSA Reply at 2 (citing Speakers of Sport, Inc. v. ProServ, Inc., 178 F.3d
862, 865 (7th Cir. 1999)).
True, the Sherman Act does not prohibit, and in fact encourages, competition
that results in “productive efficiencies, higher output, and lower prices.” Viamedia,
Inc. v. Comcast Corp., 218 F. Supp. 3d 674, 689 (N.D. Ill. 2016), rev’d on other grounds,

951 F.3d 429 (7th Cir. 2020). In responding to the KSA Defendants’ third argument,
Force Partners contends that the KSA Defendants again ignore the allegations in the
FAC, which show that Defendants intended to—and indeed did—coerce distributors
to join the KSA Defendants’ program, thereby shutting Force Partners out of the
relevant geographic and product markets, which has the ultimate effect of increasing
prices. Pl. KSA Resp. at 19–20 (citing FAC ¶¶ 94, 98–101, 107–109). Reading the
allegations in the light most favorable to Force Partners, as it must, the Court finds

that Force Partners has adequately alleged an actionable agreement among
Defendants that suggests anticompetitive behavior harming Force Partners and the
market.
G. Actionable Agreements Between Defendants and Distributors
(Count I, KSA Defendants)

For the reasons discussed above, the Court reads Count I as alleging a
conspiracy not only among Defendants but also between Defendants and the
distributors. See supra Section I.C. Therefore, the Court addresses KSA Defendants’
arguments as to the agreement between Defendants and the distributors as
pertaining to Count I rather than Count II. The KSA Defendants argue this

agreement is not actionable because: (1) Force Partners cannot allege that the
incentive program from KSA has been implemented and the FAC alleges that no
written contract has been offered to any distributor; and (2) KSA’s unilateral
invitation to join its authorized distributor program is neither an agreement nor an
antitrust violation. KSA Memo. Dismiss at 11–12.9
The KSA Defendants first argue that the FAC alleges only in a conclusory

manner that agreements existed between KSA and the distributors, which the KSA
Defendants contest is insufficient. KSA Memo. Dismiss at 11 (citing Twombly, 550
U.S. at 556). In response, Force Partners points to multiple paragraphs of the FAC
alleging that the program has been implemented among the distributors, as well as
the general timeline. Pl. KSA Resp. at 21–22 (citing FAC ¶¶ 12, 37–40, 46–47, 49, 73,
82–84, 97–99, 106–112, 129, 145, 147, 152). Although the KSA Defendants retort in
their Reply that these allegations, at most, “describe KSA unilaterally attempting to

persuade distributors to participate in its incentive program,” the Court disagrees.
KSA Reply at 7. In particular, Force Partners’ allegation that Jim told one distributor
that it was the “only one in town who had not agreed to KSA’s scheme” is sufficient
at the motion to dismiss stage to plausibly plead the existence of an agreement

9Acuity’s arguments about the validity of the alleged agreement all relate to its exclusivity,
which the Court addresses below, see supra Section II, as such arguments more properly align
with Force Partners’ Sherman Act Section 2 claim.
between Defendants and the distributors. FAC ¶ 107; In re Text Messaging Antitrust
Litig., 630 F.3d 622, 629 (7th Cir. 2010) (finding that circumstantial evidence of an
agreement can support an antitrust conspiracy and holding that at the motion to

dismiss stage, the test whether to dismiss turns on the complaint’s “plausibility”).
H. Restraint on Competition in the Market – Rule of Reason
(Count I, All Defendants)

Defendants contend that Force Partners fails to plausibly allege that the
agreements had an “anticompetitive effect on a given market within a geographic
area,” as required under the rule of reason (which, as discussed above, the Court is
applying to Count I). KSA Memo. Dismiss at 13–14 (quoting Agnew, 683 F.3d at 335);
R. 58, Acuity Reply at 4–5.10 Specifically, the KSA Defendants argue that Force
Partners’ Section 1 claim fails under the rule of reason because Force Partners does
not sufficiently allege a legally sufficient antitrust market, nor does it plead that the
distributor program forecloses competition. KSA Memo. Dismiss at 14. The Court
finds that, at this stage, the Force Partners has done enough in the FAC.
As an initial matter, for the reasons discussed below as to Force Partners’
Section 2 claim, the Court finds that Force Partners has adequately alleged a
sufficient relevant antitrust market. See infra Section II.

10As Force Partners notes in response to Acuity’s motion to dismiss, Acuity did not dispute
that the market at issue plausibly was alleged, nor did it challenge the claims of market
dominance and market power. Pl. Acuity Resp. at 4 n.1. A party waives an argument when
it raises it for the first time on reply. See Narducci, 572 F.3d at 323. However, because the
KSA Defendants raised these arguments in their opening motion to dismiss, the Court
substantively addresses them.
The Court therefore turns to the anticompetitive effect component. Force
Partners contends that it alleges that the result of Defendants’ program was to
foreclose access to the most important distributors in the market. R. 56, Pl. Acuity

Resp. at 11; see also FAC ¶ 73. That, submits Force Partners, is sufficient to establish
an anticompetitive effect, as no rule requires the foreclosure to be complete in order
to constitute an antitrust injury. Id. 10–11 (citing, among other cases, Roland, 749
F.2d at 392 (under Clayton Act, a plaintiff need only show “that the agreement was
likely to have a substantial though not necessarily immediate anticompetitive
effect”); United States v. Dentsply Int’l, Inc., 399 F.3d 181, 191 (3d Cir. 2005)

(ensuring that “key dealers” offer only the defendant’s products has a “significant”
effect in preserving defendant’s Section 2 monopoly, and serves as a “solid pillar of
harm to competition”); ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254, 271–72, 285
(3d Cir. 2012) (coercive behavior by a dominant firm can support antitrust claim,
especially where the firm “may use its power to break the competitive mechanism
and deprive customers of the ability to make a meaningful choice”); Gulf States Reorg.
Grp., Inc. v. Nucor Corp., 466 F. 3d 961, 967–68 (11th Cir. 2006) (antitrust injury

sufficiently alleged where exclusion of one competitor from the relevant market is
inseparable from the alleged harm to competition)). Force Partners argues that it
cannot compete for access in response to the program initiated by Defendants because
it does not have the dominant market share that KSA and Acuity have. Id. at 11.
Force Partners has adequately alleged that KSA used its dominant market share to
force distributors to boycott Force Partners and its brands, thereby depriving
distributors and their customers from a meaningful choice in the market. See FAC
¶¶ 5, 9. The issue before the Court on a Rule 12(b)(6) motion is whether the complaint
contains factual allegations, accepted as true, which state a claim to relief that is

plausible on its face. The role of the Court is not to determine whether the evidence
supports the plaintiff’s claim. Here, in viewing the allegations of the FAC in the light
most favorable to Force Partners, as it must, the Court finds that it has plausibly
alleged that Defendants’ program harmed the competitive process.
Acuity also argues that Force Partners’ claim fails against it specifically,
because Force Partners, a sales representative, is not a competitor of Acuity, a

manufacturer. KSA Reply at 6. The Court notes that Acuity did not raise this
argument until its reply. A party waives an argument when it raises it for the first
time on reply. See Narducci v. Moore, 572 F.3d 313, 323 (7th Cir. 2009). Nonetheless,
the Court finds that, at this stage, Force Partners has adequately alleged that
Defendants’ program forced distributors to boycott KSA’s primary competitor and the
exclusive sales representative of Eaton/Cooper, “a very significant competitor to
Acuity” off of the shelves and out of competition for specifications. FAC ¶ 83.

Accordingly, for the purposes of the rule of reason analysis, the Court finds that Force
Partners has plausible alleged an anticompetitive effect as a result of Defendants’
program.
Based on the Court’s findings regarding the various components of Force
Partners’ Section 1 claim under Count I, the Court denies Defendant’s motion with
respect to Count I.
I. Hub-and-Spoke Agreement (Count II, All Defendants)
In Count II, Force Partners alleges that Defendants engaged in a conspiracy
to require distributors of electrical lighting equipment to deal exclusively with

Defendants, ultimately resulting in higher prices and reduced output. FAC ¶ 128.
Force Partners claims that this conspiracy is horizontal in nature, with Defendants
acting as the hub of the scheme and the distributors who were coerced into the boycott
as the spokes. Id. ¶ 130. As stated above, a hub-and-spoke conspiracy requires not
only vertical agreements between the hub (here, Defendants) and each spoke (here,
the distributors), but also a horizontal agreement among the various spokes with each

other. Marion Healthcare, 952 F.3d at 842.
Defendants, in both motions to dismiss, seek dismissal of Count II on the basis
that Force Partners does not plead a horizontal agreement, as it fails to allege any
agreement between the spokes—the distributors—but rather only alleges vertical
exclusive distributorships (which are addressed under the rule of reason, as discussed
above). KSA Memo. Dismiss at 13;11 Acuity Memo. Dismiss at 10–12. Defendants
maintain that Marion Healthcare controls because in that case, the Seventh Circuit

dismissed a complaint that failed, like the FAC here, to allege that the distributors
agreed to the manufacturer’s scheme to raise prices on the condition that their
competitors would do the same. Acuity Memo. Dismiss at 11–12 (citing Marion
Healthcare, 952 F.3d at 841–42).

11The KSA Defendants’ motion to dismiss raises this argument in just one sentence,
expanding upon the argument in reply. KSA Reply at 6–7.
Not surprisingly, Force Partners disagrees and insists that Count II pleads a
horizontal agreement. Pl. KSA Resp. at 23–27; Pl. Acuity Resp. at 13–17. Specifically,
Force Partners counters that it pleads sufficient facts to support an inference that

the distributors conspired among each other. Pl. Acuity Resp. at 16. Force Partners
contends that Marion Healthcare is distinguishable, and the Court agrees. In Marion
Healthcare, the plaintiff alleged no facts showing that the distributors played a role
in the anti-competitive pricing or “knowingly engaged in parallel anticompetitive
conduct;” rather, the plaintiff only alleged that the distributors enforced the terms of
the contracts negotiated between the manufacturer and another third party. 952 F.3d

at 843. That is not the case here with respect to the FAC: as discussed above, Force
Partners alleges that the distributors knowingly entered into agreements with the
Defendants to boycott Force Partners and its brands. See supra Section I.G (citing
FAC ¶¶ 12, 37–40, 46–47, 49, 73, 82–84, 97–99, 106–112, 129, 145, 147, 152)).
Force Partners leans heavily on Toys “R” Us, 221 F.3d 928. Pl. Acuity Rep. at
13–17. In that case Toys “R” Us had sent letters to major toy manufacturers,
indicating that it would not carry the manufacturers’ toys unless the manufacturers

agreed to withhold certain highly desirable toys from warehouse clubs. 221 F.3d at
935. The FTC found that it would not have made economic sense for any individual
manufacturer to capitulate to these demands unless it knew that its competitors
would also play along. Id. at 935–36. That finding, concluded the Seventh Circuit,
was supported by substantial evidence. Id. at 936. It was thus permissible to infer
that even if the manufacturers did not expressly agree to join a conspiracy with one
another, they had functionally joined the conspiracy because they were assured that
their competitors would all follow the same anticompetitive strategy. Id.
Defendants reply that Toys “R” Us, is inapplicable, as that “case involved

‘vertical agreements between Toys “R” Us, and the individual manufacturers,’ all of
which ‘promised to restrict distribution of [their] products to low priced warehoused
club stores,’ but only ‘on the condition that other manufacturers would do the same.’”
KSA Reply at 6 (quoting Toys “R” Us, 221 F.3d at 932); Acuity Reply at 11. They argue
that the FAC does not support an inference that the distributors agreed amongst
themselves to join the program or that the distributors joined only on the condition

that all other distributors would do the same. Acuity Reply at 12–14; KSA Reply at
7.
After briefing had concluded, Force Partners submitted additional authority in
support of its position that Force Partners adequately alleged a hub-and-spoke
conspiracy. R. 65, Mot. Suppl. Auth. (citing Preston Hollow Cap. LLC v. Nuveen LLC,
2021 WL 3542255, at *14 (S.D.N.Y. Aug. 10, 2021)). Defendants jointly responded to
the motion, arguing that Preston Hollow is distinguishable. R. 67, Resp. Suppl. Auth.

Although the facts of Preston Hollow are similar to those alleged by Force Partners,
the Court agrees with Defendants that there are key differences.
In Preston Hollow, the plaintiff, a municipal bond buyer, alleged its competitor
had organized a hub-and-spoke conspiracy to boycott the plaintiff. 2021 WL 3542255,
at *15. The plaintiff alleged that its competitor forced various underwriter-broker-
dealers (UBDs) to have the UBDs agree not to make future sales to the plaintiff. Id.
The competitor told the UBDs that it would stop doing business with them unless
they agreed to boycott the plaintiff. Id. The court found that it was “central to [the
competitor’s] efforts to orchestrate a boycott of [plaintiff] to let UBDs [] know that

UBDs were being offered the same choice of either doing business with [plaintiff] or
with [the competitor].” Id. The complaint contained numerous allegations of the
competitor’s statements to UBDs about its agreements with other UBDs. Id. (the
competitor told one UBD that its actions were “uniform across the street”; it told
another UBD that it was “going to every single bank and [UBD] today to examine
what is the extent [with plaintiff], and the policy going forward is that if . . . [they

were] actively doing business with [plaintiff, the competitor] will not be doing
business with [them]”; the competitor told a bank that it had “firm commitments from
four UBDs”; and two UBDs “specifically asked for and received assurances from [the
competitor] that all [UBDs] were complying.”).
Force Partners argues that it has alleged sufficient facts from which the Court
can infer that the distributors knew that other distributors entered into agreements
with KSA and that distributors would not have entered into such agreements without

assurances that other distributors agreed as well. Pl. KSA Resp. at 25; Pl. Acuity
Resp. at 16. Specifically, Defendants made the Presentation to the distributors in the
same month, August 2019. Pl. Acuity Resp. at 13 (citing FAC ¶¶ 5, 9, 70, 72–74, 77).
Moreover, Force Partners alleges that Jim told at least one distributor that it was the
“only one in town” who had not agreed to go along with the scheme. Pl. Acuity Resp.
at 14 (citing FAC ¶¶ 87, 103). Although these allegations show that the distributors
had a more active role in the scheme than the distributors in Marion Healthcare, the
Court finds that the FAC does not support the inference beyond a speculative level
that the distributors knew that the other distributors agreed to the Proposal, much

less that the distributors agreed to the Proposal only on the condition that other
distributors were doing so.
Although the Court agrees with Force Partners that entering into the
agreement with KSA was not in the distributors’ best interest, as having access to a
range of brands is important in the market, and the distributors told Force Partners
that their customers would be “angry if they could not get Force Partners brands,” Pl.

Acuity Resp. at 13 (citing FAC ¶¶ 47, 85, 98, 118), that is not enough. See Toys “R”
Us, 221 F.3d at 936 (entering into the agreement was not in the manufacturers’ best
interest and evidence presented that the manufacturers entered into the agreement
on the condition that other manufacturers also agreed); Preston Hollow, 2021 WL
3542255, at *15 (finding that the horizontal conspiracy was adequately alleged
because allegations supported reasonable inferences that “it would be more
advantageous for an individual UBD to join the conspiracy only if other UBDs agreed

to do so” and the defendant-competitor “recognized it was necessary to have a large
percentage of the leading UBDs agree to the boycott, but also for the UBDs to know
that their competitors had agreed to it”) (emphasis added).
The Court finds that Force Partners has not sufficiently alleged a horizontal
agreement in the context of Section 1 of the Sherman Act. Therefore, Count II is
dismissed. Force Partners did not request that it be allowed to amend its complaint
if any claims are dismissed; as such, the dismissal is with prejudice. See Haywood v.
Massage Envy Franchising, LLC, 887 F.3d 329, 335 (7th Cir. 2018) (“Nothing in Rule
15, nor in any of our cases, suggests that a district court must give leave to amend a

complaint where a party does not request it or suggest to the court the ways in which
it might cure the defects. To the contrary, we have held that courts are within their
discretion to dismiss with prejudice where a party does not make such a request or
showing.”).
II. Section 2 of the Sherman Act (Count III)

In Count III, Force Partners alleges that Defendants attempted to monopolize
the Market in violation of Section 2 of the Sherman Act. FAC ¶¶ 135–59. To state an
attempted monopolization claim, a plaintiff must adequately plead “(1) that the
defendant has engaged in predatory or anticompetitive conduct with (2) a specific
intent to monopolize and (3) a dangerous probability of obtaining monopoly power.”
Hon Hai Precision Indus. Co. v. Molex, Inc., 2009 WL 310890, at *2 (N.D. Ill. Feb. 9,
2009) (citing Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456 (1993)). The KSA
Defendants argue that Force Partners’ Section 2 claim fails because: (1) Force

Partners fails to allege sufficient exclusionary or anticompetitive conduct; and (2)
Force Partners has not pleaded a dangerous probability of success. KSA Memo.
Dismiss at 16–21. As noted above, Acuity focuses its argument on its premise that
Force Partners has not pled facts sufficient to show that the agreements between
KSA and the distributors were “exclusive.” Acuity Memo. Dismiss. at 4–7. The Court
disagrees with the KSA Defendants and Acuity.
To summarize, in Count III, Force Partners alleges that Defendants have
engaged in an attempt to acquire a monopoly in the Market and have used
anticompetitive means to do achieve this end; put another way, Defendants have not

achieved their monopoly in the market based upon superior products, business
acumen, or historical accident. FAC ¶¶ 136, 138. Force Partners further alleges that
Defendants “demonstrated a specific intent to monopolize the market by announcing
and implementing a scheme to eliminate competition from the market.” Id. ¶ 137.
The Court addresses the dangerous probability of success argument first,
before moving on to the exclusivity argument.

A. Dangerous Probability of Success
The KSA Defendants argue contend that Force Partners has not adequately
alleged a dangerous probability of success for two reasons: (1) Force Partners fails to
allege a relevant antitrust market; and (2) Force Partners fails to allege that KSA
has the required market power. KSA Memo. Dismiss at 19–21.
1. Antitrust Market
A plaintiff has the burden of defining the relevant market. Spectrum Sports,

506 U.S. at 455. “The outer boundaries of a product market are determined by the
reasonable interchangeability of use or the cross-elasticity of demand between the
product itself and substitutes for it.” Right Field Rooftops, LLC v. Chi. Baseball
Holdings, LLC, 87 F. Supp. 3d 874, 886 (N.D. Ill. 2015) (quoting Reifert v. S. Cent.
Wis. MLS Corp., 450 F.3d 312, 320 (7th Cir. 2012)). As Force Partners notes, in most
cases, “proper market definition can be determined only after a factual inquiry into
the commercial realities faced by consumers.” Queen City Pizza, Inc. v. Domino’s
Pizza, Inc., 124 F.3d 430, 436 (3d Cir. 1997); see also Avnet, Inc. v. Motio, Inc., 2015
WL 5307515, at *4 (N.D. Ill. Sept. 9, 2015) (“[B]ecause market definition is a deeply

fact-intensive inquiry, courts hesitate to grant motions to dismiss for failure to plead
a relevant product market.”) (internal citations omitted) (collecting cases). Motions to
dismiss based on a failure to define the market “may be granted only if the alleged
market makes ‘no economic sense under any set of facts.’” PepsiCo, Inc. v. Coca–Cola
Co., 1998 WL 547088, at *6 (S.D.N.Y. Aug. 27, 1998).
Force Partners defines the relevant market as “the lighting and controls for

buildings and private roadways,” sold by “full line” sales representatives like Force
Partners and KSA within a defined geographic market comprised of sixteen Illinois
counties in Northern Illinois and surrounding Chicago, including three counties in
Northwest Indiana. FAC ¶¶ 28, 30. As discussed above, Force Partners alleges that
lighting and controls manufacturers like Acuity contract with exclusive sales
representatives within certain geographic markets, so distributors (and their
customers) can only obtain manufacturers’ products through the exclusive sales

representatives. Id. ¶ 29. Specifications—which constitute approximately 65% of
Force Partners’ sales—sometimes list only one manufacturer’s name, sometimes list
up to three manufacturers’ names and invites competition, and some reference one
manufacturer but allow another manufacturer to provide a quote so long as it meets
the technical requirements of the design. Id. ¶¶ 44, 47.
The KSA Defendants do not contest that Force Partners adequately alleges a
geographic market, but instead focus their arguments on the product market,
contending that it is impermissibly vague because it provides insufficient information

about what products are included in the proposed market. KSA Memo. Dismiss at 19
(citing Cupp v. Alberto-Culver USA, Inc., 310 F. Supp. 2d 963, 971 (W.D. Tenn. 2004)).
The court in Cupp held that the alleged product market, defined as “exclusive salon
hair care products . . . sold exclusively through salons under the advice of professional
hair stylists,” was “fatally vague,” because it did not include the names of the brands
and suppliers to be included in the market. 310 F. Supp. 2d at 970–71. It is true that,

in the FAC, Force Partners does not name every manufacturer’s brand sold in the
geographic market. But Force Partners does name the other sales representatives
that sell the lighting and control products in the geographic market, and lists the
specific lighting and control products sold by those sales representatives. FAC ¶¶ 28,
43. The Court finds, at the motion to dismiss stage, that Force Partners’ allegations
about the product market are sufficient as to what products are included in the
proposed market.

The product market is also legally insufficient, argue the KSA Defendants,
because Force Partners “did not ‘define its relevant market with reference to the rule
of reasonable interchangeability and cross-elasticity of demand.’” KSA Memo.
Dismiss at 19 (citing Queen City Pizza, 124 F.3d at 436); KSA Reply at 8. The Court
again disagrees. Force Partners alleges that distributors can only obtain the relevant
lighting and controls products (defined in paragraph 28 of the FAC) from a
manufacturer’s exclusive sales representative, and that there are relatively few full-
line sales representatives in this geographic market. FAC ¶¶ 28–29, 34. Therefore,
“it is not easy to obtain a sale’s representative’s products through other means or

channels.” Id. ¶ 34. The Court finds the product market is similar to that defined in
Hannah’s Boutique, which the court held were sufficient to withstand a motion to
dismiss. 2013 WL 4553313, at *5 (“Indeed, the relevant market here is also
particularly narrow—lacking interchangability—because it relates to dresses
obtained from particular designers.”). The Court finds that the FAC adequately
pleads a relevant geographic and product market.

2. Market Power
The KSA Defendants maintain that Force Partners’ allegations relating to
KSA’s percentage of business do not relate to the market alleged by Force Partners.
KSA Memo. Dismiss at 20–21. The Court agrees with Force Partners that, at the
motion to dismiss stage, it sufficiently pleads that KSA has market power. Pl. KSA
Resp. at 35. Force Partners alleges that all sales of the lighting and controls products
must go through a manufacturer’s exclusive sales representative, and that KSA is

the dominant sales representative in the market. Id. (citing FAC ¶¶ 5, 10, 37, 40, 43,
52; GN Netcom, Inc. v. Plantronics, Inc., 967 F. Supp. 2d 1082, 1085 (D. Del. 2013)
(motion to dismiss denied where, in response to the competitor’s entry, a company
with 75% of sales in a specialized market demanded that specialized distributors
agree to exclusive dealing program and many did)).
The Court finds that the Force Partners’ allegations about KSA’s market power
and coercive behavior towards the distributors satisfy the “dangerous probability of
success” element of a Section 2 claim. See, e.g., United States v. Dentsply Int’l, Inc.,

399 F.3d 181, 184, 187 (3d Cir. 2005) (denying motion to dismiss, observing that the
defendant “imposed” an exclusivity policy on its customers and caused inventory of
competing products to be removed from shelves and stating “[b]ehavior that might
otherwise comply with antitrust law may be impermissibly exclusionary when
practiced by a monopolist”).
B. Exclusive Agreements

Acuity argues that Force Partners has not pled facts sufficient to show that the
agreements between KSA and the distributors were “exclusive.” Acuity Memo.
Dismiss at 6–7. Rather, Acuity asserts that the Force Partners has alleged only a
loyalty program, not an exclusion from the marketplace. Id. at 6. Acuity contends that
“the ‘Partner’ program does not require that distributors must only do business with
KSA to qualify as a Partner; rather, distributors just must not do business with Force
Partners or two other firms.” Id. (emphasis in original). Similarly, the KSA

Defendants argue that Defendants’ “unilateral invitation to each distributor does not
constitute [an] agreement, much less an antitrust violation.” KSA Memo. Dismiss at
11 (emphasis in original). In support, the KSA Defendants note that the Seventh
Circuit has found that no actionable agreement exists where a supplier induces
dealers to follow its exclusive policy or guideline—and even terminates non-complaint
dealers. Id. at 11–12 (citing Roland Mach. Co. v. Dresser Indus., Inc., 749 F.2d 380,
393 (7th Cir. 1984)). The KSA Defendants note that the incentives offered to Partners
by Defendants, such as “best prices” and services” “represent[] robust competition,
not a conspiracy in violation of Section 1.” Id. at 12 (citing, among other cases,

Concord Boat, 207 F.3d at 1061). Moreover, both motions to dismiss point out that
the program contains an important exception: when a customer specifically requests
a Force Partners brand, then the distributor is allowed to sell the requested product
without harming its status as a KSA “partner.” Acuity Memo. Dismiss. at 7; see also
KSA Memo. Dismiss at 22 (citing Alarm Detection Sys. v. Orland Fire Prot. Dist., 129
F. Supp. 3d 614, 635 (N.D. Ill. 2015)). Without actual exclusion, reason Defendants,

there can be no substantial lessening of competition. Id.
Force Partners retorts that Defendants seek to recast the allegations in the
FAC. Pl. KSA Resp. at 22; Pl. Acuity Resp. at 8–9. Nowhere in the FAC, observes
Force Partners in response to Acuity’s motion to dismiss, does Force Partners allege
that the agreement is a “loyalty program.” Pl. Acuity Resp. at 8. Rather, insists Force
Partners, it has alleged that the terms “Partner” and “Associate” are meaningless. Id.
Similarly, Force Partners points out the term “best prices” is undefined and certainly

does not demonstrate competition rather than a conspiracy. Pl. KSA Resp. at 22. The
choice that was presented to distributors was to go along with the agreement or lose
meaningful access to KSA-represented brands, including Acuity. Id. at 37; Pl. Acuity
Resp. at 8. Moreover, Force Partners explicitly alleges that the choice offered was a
false one; distributors understood, and KSA’s history supported, that if distributors
did not agree to become KSA “Partners,” they would be “cut off” from the brands
represented by KSA. Id. ¶ 90. Force Partners maintains that all it is required to plead
is that there was an agreement, and that agreement was likely to have a substantial
though not necessarily immediate anticompetitive effect. Id. at 10 (citing Roland, 749

F.2d at 392).
The Court agrees with Force Partners that it has adequately alleged that the
agreements were “exclusive.” Force Partners alleges that the choice KSA offered its
distributors was really a Hobson’s choice (an illusion that multiple choices are
available when the only choice is to take what is available or nothing at all)—the
distributors must agree to boycott Force Partners or lose access to KSA-represented

brands, including Acuity. FAC ¶ 90. Stock and Flow distributors, according to the
FAC, were informed that they could not carry Force Partners’ brands on their shelves
at all, and spec distributors were told they had to “rig bids to ensure that KSA won
any multiple-name specifications that also included [Force Partners].” Pl. Acuity
Resp. at 8–9 (citing FAC ¶ 87). Furthermore, where KSA brands and Force Partner
brands were specified for bidding on a project, the distributors were given the choice
of not quoting Force Partners’ brand at all or providing Force Partners’ confidential

pricing information to KSA so it could match the price. Id. (citing FAC ¶¶ 80–81). All
in all, the Court finds that Force Partners has adequately alleged that the agreements
were exclusive. That, however, without more, does not mean that the agreements
violate antitrust laws.
Next, Acuity argues that the FAC fails to overcome the presumption that
exclusivity agreements are lawful. Acuity Memo. Dismiss at 4–5 (citing Paddock
Publ’ns, Inc. v. Chi. Tribune Co., 103 F.3d 42 (7th Cir. 1996); Republic Tobacco, 381
F.3d at 736); see also KSA Memo. Dismiss at 16. In fact, argues Acuity, as pled, the
agreements could not harm competition, as they themselves are a form of

competition. Id. at 6. In a now-familiar refrain, Force Partners responds that Acuity
misconstrues the allegations of the FAC: Force Partners does not allege that
exclusivity agreements are unlawful, but rather that Defendants set up a plan that
changed how distributors operate. Pl. Acuity Resp. at 4. In other words, Force
Partners alleges that Defendants coerced distributors into agreeing to the plan with
the aim of forcing a competitor out of the market. Id. at 4; Pl. KSA Resp. at 20.

As for Defendants’ argument that exclusive agreements are presumed valid,
that presumption is inapplicable here. “Exclusive dealing arrangements violate
antitrust laws only when they foreclose competition in a substantial share of the line
of commerce at issue.” Republic Tobacco, 381 F.3d at 737–38. “The objection to
exclusive-dealing agreements is that they deny outlets to a competitor during the
term of the agreement.” Roland, 749 F.2d at 393. As the KSA Defendants point out,
in Roland, the Seventh Circuit found that the district court improperly issued a

preliminary injunction where the defendant supplier induced the dealer to agree to
follow its exclusive policy and terminated a non-complaint dealer. Id. at 392–93.
However, the Court disagrees with the KSA Defendants that Roland requires that
the Court grant their motion to dismiss. Rather, the Court agrees with Force Partners
that Roland is of limited utility at this stage, given that it is a preliminary injunction
case, which not only applied a different standard than a Rule 12(b)(6) motion, but
also turned on whether there was in fact evidence of an anti-competitive agreement—
which the Seventh Circuit concluded there was not. Id. at 393–94. The decision did
not foreclose the plaintiff’s claim in Roland, the Court simply declined to impose a

preliminary injunction. Id. at 395–96 (“It should go without saying that . . . our
discussion of the merits of Roland’s antitrust claim is tentative. We do not exclude
the possibility that on the fuller record made in the trial on the merits Roland will
succeed in establishing its claim.”). The Seventh Circuit held that, to find that an
exclusive-dealing agreement is unreasonable, a plaintiff must show first, “that it is
likely to keep at least one significant competitor of the defendant from doing business

in a relevant market” and second, “that the probable (not certain) effect of the
exclusion will be to raise prices above . . . the competitive level, or otherwise injure
competition.” Id. at 394.
The Court agrees with Force Partners that the crux of the FAC is that the
program enacted by the Defendants, specifically the program’s exclusivity, is
unlawful because its purpose was to drive out of business a competitor, which, as
discussed in more depth below, Force Partners plausibly alleges would harm the

market.
C. Terminable at Will
Acuity further asserts that because the agreements are terminable at will, they
do not prevent Force Partners from continuing to compete. Acuity Memo. Dismiss at
9–10 & n.15 (citing, among other cases, Paddock Publ’ns., 103 F.3d at 47; Roland
Mach., 749 F.2d at 395). Put differently, Acuity argues there are no barriers to Force
Partners’ ability to offer distributors a better deal, and that Force Partners does not
allege that it attempted to “woo a distributor out of the KSA ‘Partner’ program by
offering the distributor better prices or services of its own.” Id.; Acuity Reply at 9.

Force Partners counters that there is no rule that if an exclusive agreement can be
terminated in less than a year, no antitrust claim maybe asserted. Resp. at 12–13.
Although the Court must follow the Seventh Circuit’s precedent that
“[e]xclusive-dealing contracts terminable in less than a year are presumptively lawful
under section 3,” Roland Mach., 749 F.2d at 395, the Court agrees with Force
Partners that the facts alleged in the FAC overcome this presumption. Pl. Acuity

Resp. at 12. True, even though Force Partners does not explicitly allege that it offered
the distributors that were coerced into the program lower prices in order to “outbid”
KSA, Force Partners nonetheless claims that it spoke to the distributors after the
presentation, and “[a]ll of the Distributors reported that they could not afford to lose
access to KSA’s products.” FAC ¶ 98. Moreover, Force Partners alleges that, “[i]n an
effort to test the market, Force Partners has offered steeply discounted prices – prices
it is confident are lower than KSA’s – to win spec jobs in Northwest Indiana,” where

KSA controls about 90% of sales in the market, but that “[v]irtually none have been
successful.” FAC ¶¶ 55–56.
These allegations distinguish this case from Paddock Publ’ns, where the
Seventh Circuit affirmed dismissal of the plaintiff’s claims where the plaintiff did not
allege that it attempted to outbid its competitors, nor allege any other meaningful
restraint on trade. 103 F.3d at 44, 47. The statements Force Partners claims
distributors made to it after they agreed to Defendants’ program demonstrate that
the practical effect of the agreement—given KSA’s dominant market share—was that
the distributors could not terminate the agreement to participate at will and engage

with Force Partners. Dentsply, 399 F.3d at 193 (the defendant’s large market share
and conduct excluding competitors “realistically ma[d]e the arrangements . . . as
effective as those in written contracts” despite only consisting of a series of
independent sales”); Minn. Mining & Mfg. Co. v. Appleton Papers, Inc., 35 F. Supp.
2d 1138, 1144 (D. Minn. 1999) (considering “practical effect” rather than “form” in
determining whether agreement was terminable at will). The Court finds that,

regardless of whether the distributors could technically terminate the agreements at
will, the practical effect was that the distributors could not exit Defendants’ program
and contract with Force Partners instead.
D. Disparaging or False Statement to Distributors
Because the Court finds that Force Partners has adequately alleged that
Defendants’ agreements with the distributors are exclusive and harm the market,
the Court need not address Defendants’ argument that the allegations about KSA

Defendants’ false statements fail to state a Section 2 claim. KSA Memo. Dismiss at
17; Acuity Memo. Dismiss at 13.
The Court finds, in viewing the allegations of the FAC in the light most
favorable to Force Partners as the non-movant and drawing all reasonable inferences
in its favor, as the Court must, that Force Partners has plausibly stated a cause of
action for a violation of Section 2 of the Sherman Act.
III. Clayton Act (Count IV)
In Count IV, Force Partners alleges that the restrictive scheme imposed by the
Defendants violates Section 3 of the Clayton Act as an illegal exclusive dealing

agreement. FAC ¶¶ 160–64. The Clayton Act prohibits certain exclusive contracts for
the sale of goods. 15 U.S.C. § 14. Defendants again argue that Force Partners has
failed to plausibly plead a “substantial anticompetitive effect” as required by
Section 3 of the Clayton Act. KSA Memo. Dismiss at 21–22; Acuity Memo. Dismiss at
8. For the same reasons discussed above, supra Section I.H, at the motion to dismiss
stage, the Court finds that Force Partners has adequately alleged the program had a

substantial anticompetitive effect.
The KSA Defendants again offer additional arguments in support of dismissal,
contending that (1) Force Partners failed to allege the existence of an exclusive
dealing contract; (2) even if Force Partners did allege a contract, it was not for goods,
but rather for services; and (3) Force Partners fails to plead a relevant market. For
the reasons discussed above, see supra Sections II.A.1, II.B, the Court disagrees as to
the first and third arguments. And the Court easily discards the second argument as

well. Force Partners pleads that the agreements in place were to deny both goods and
services. FAC ¶ 119 (“Through coercive demands and threats, the Defendants agreed
between themselves to deny services, and effectively deny access to KSA brands to
Market Distributors unless those Distributors terminated their relationship with
and/or agreed to boycott Force Partners”) (emphasis added).
The Court therefore finds that Force Partners has plausibly alleged that
Defendants’ exclusive dealing agreement violated Section 3 of the Clayton Act. The
Court denies Defendants’ motions with regard to Count IV.

IV. Illinois Antitrust Act (Count V)
In Count V, Force Partners alleges that Defendants’ conduct also violates the
Illinois Antitrust Act, 740 ILCS 10/2. FAC ¶ 166. Force Partners asserts claims under
740 ILCS 10/3(1)–(4). Id. ¶¶ 167–72.
The Illinois Antitrust Act expressly requires harmonization with the federal
laws. 740 ILCS 10/11 (“When the wording of this Act is identical or similar to that of

a federal antitrust law, the courts . . . shall use the construction of the federal law by
the federal courts as a guide in construing this Act.”). That is, courts look to the
application of the federal counterpart to guide analysis of the state antitrust law
claims. State of Ill., ex rel. Burris v. Panhandle E. Pipe Line Co., 935 F.2d 1469, 1479–
80 (7th Cir. 1991) (Illinois courts “use the construction of federal antitrust law by
federal courts to guide their construction of . . . state antitrust laws”). Put another
way, if the federal claims are dismissed, the equivalent state claims should be

dismissed. VBR Tours, LLC v. Nat’l R.R. Passenger Corp., 2015 WL 5693735, at *16
(N.D. Ill. Sept. 28, 2015) (“Illinois Antitrust Act claims will stand or fall with
federal . . . claims based on the same underlying facts and legal theories.”).
As the KSA Defendants point out, claims under 740 ILCS 10/3(2) and (3), which
Force Partners pleads in paragraphs 169 and 171 of the FAC, are substantially
similar to, and construed in the same ways, as vertical conspiracy claims under
Sherman Act Sections 1 and 2, respectively. KSA Memo. Dismiss at 23 (Citing
Hannah’s Boutique, 112 F. Supp. 3d at 765 n.7); see also Acuity Memo. Dismiss at 4
n.2 (citing Tamburo v. Dworkin, 601 F.3d 693, 700 (7th Cir. 2010)). And, claims under

740 ILCS 10/3(4), which Force Partners pleads in paragraph 172 of the FAC, are
substantially similar to, and construed in the same ways as, Clayton Act Section 3.
KSA Memo. Dismiss at 23 (citing Ray Dancer, Inc. v. DMC Corp., 594 N.E.2d 1344,
1350 (Ill. App. Ct. 1992)). Accordingly, for the same reasons that Force Partners’
Sherman Act Section 1 vertical conspiracy claim (Count I), Sherman Act Section 2
claim (Count III), and Clayton Act claim (Count IV) are plausibly alleged, these state

law claims likewise survive Defendants’ motions to dismiss.
However, the Court agrees with the KSA Defendants that Force Partners’
claim under 740 ILCS 10/3(1) must fail. KSA Memo. Dismiss at 23–24. Section 3(1)
of the Illinois Antitrust Act “is expressly limited to agreements between two classes
of persons: (a) those who are competitors and (b) those persons who, but for a prior
agreement, would be competitors.” 740 Ill. Comp. Stat. 10/3 Bar Committee
Comments–1967 (emphasis added). “Section 3(1) does not reach vertical agreements.”

Id.; see also Sportmart, Inc. v. No Fear, Inc., 1996 WL 296643, at *17 (N.D. Ill. June
3, 1996). For the reasons stated above, the Court finds that Force Partners has failed
to allege a horizontal agreement. See supra Section I.I. Force Partners does not
disagree that a Section 3(1) claim can be premised only on a horizontal agreement.
Rather, Force Partners simply states in opposition that it agrees that the same basic
law applies to its Illinois Antitrust Act claims as it does to the Sherman and Clayton
Act claims, and “[b]ecause those all are plausibly and properly pleaded, Count V
cannot be dismissed.” Pl. KSA Resp. at 38. Therefore, because Force Partners has
failed to adequately allege a horizontal agreement, its claim under Section 3(1) of the

Illinois Antitrust Act also fails.
For the foregoing reasons, Defendants’ motions to dismiss are denied as to
Force Partners’ Count V claims premised on 740 ILCS 10/3(2)–(4), but are granted to
as to the claim premised on 740 ILCS 10/3(1).
V. IUDTPA (Count VI)
In Count VI, Force Partners alleges that Defendants violated the IUDTPA,

815 ILCS 510/2, by disparaging the quality of the goods, services, or business of Force
Partners based on the Presentation, which conveyed to distributors that they should
boycott Force Partners based on the false statement that Force Partners was
bypassing distributors to make sales directly to end-users and contractors, thereby
denying sales and profits to distributors. FAC ¶ 176. Pursuant to the IUDTPA, “[a]
person engages in a deceptive trade practice when, in the course of his or her
business, vocation, or occupation, the person,” among other things, “represents that

goods or services have sponsorship, approval, characteristics, ingredients, uses,
benefits, or quantities that they do not have or that a person has a sponsorship,
approval, status, affiliation, or connection that he or she does not have.” 815 ILCS
510/2.
Defendants move to dismiss Count VI on the basis that because it sounds in
fraud, it must satisfy the heightened pleading requirement of Rule 9(b) and fails to
do so. Acuity Memo. Dismiss at 13–14 (citing Platinumtel Commc’ns, LLC v. Zefcom,
LLC, 2008 WL 5423606, at *1 (N.D. Ill. Dec. 30, 2008)); KSA Memo. Dismiss at 25–
26 (citing Nakajima All Co., Ltd. v. SL Ventures Corp., 2001 WL 641415, at *6 (N.D.

Ill. June 4, 2001); CardioNet, Inc. v. LifeWatch Corp., 2008 WL 567031, at *3 (N.D.
Ill. Feb. 27, 2008)). Force Partners concedes that Rule 9(b)’s heightened pleading
standard applies to its IUDTPA claims, as it does not dispute the standard in its
response briefs. See Pl. Acuity Resp. at 17–19; Pl. KSA Resp. at 39–41; see Bonte v.
U.S. Bank, N.A., 624 F.3d 461, 466 (7th Cir. 2010) (“Failure to respond to
an argument . . . results in waiver.”). The Court nonetheless agrees with Defendants

that Rule 9(b) is the proper standard under which to evaluate IUDTPA claims. See
CardioNet, Inc., 2008 WL 567031, at *2 (collecting cases). Rule 9(b) requires that,
“[i]n alleging fraud or mistake, a party must state with particularity the
circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). “Under Rule 9(b),
. . . IUDTPA . . . []claims must allege ‘the identity of the person making the
misrepresentation, the time, place, and content of the misrepresentation, and the
method by which the misrepresentation was communicated.’” CardioNet, Inc., 2008

WL 567031, at *3 (quoting Bankers Trust Co. v. Old Republic Ins. Co., 959 F.2d 677,
683 (7th Cir. 1992)).
Specifically, Defendants argue that Force Partners fails to provide any
information as to the “who, what, when, where and how of any fraudulent statements
by Acuity.” Acuity Memo. Dismiss at 13–14; KSA Memo. Dismiss at 25–26. Force
Partners retorts that it sufficiently alleges the time, place, and content of KSA’s
August 2019 PowerPoint Presentation. Pl. KSA Rep. at 40–41; Pl. Acuity Resp. at 18–
19. The Court disagrees. Although Force Partners alleges the general timeframe of
the presentations (August 2019), and the content (statement that Force Partners was

bypassing distributors to make direct sales to end-users), it fails to allege with
specificity the place of the statements—specifically, it alleges only generally that the
statement was made to the “distributors” but does not plead specifically to which
distributors the statements were made.
Additionally, assert Defendants, Force Partners’ IUDTPA claim fails because
Force Partners does not allege that Defendants made a commercially disparaging

statement about the quality of Force Partners’ goods or service. Acuity Memo.
Dismiss at 14; KSA Memo. Dismiss at 24–25. The KSA Defendants also argue that
the FAC suggests that the statement at issue may well be true, and thus is not
actionable under the IUDTPA. KSA Memo. Dismiss at 25.
Force Partners counters that it has plausibly alleged a claim under Section
2(a)(8) of the IUDTPA for disparagement of Force Partners’ services or business. Pl.
Acuity Resp. at 17–19 (citing, among other cases, World Kitchen, LLC v. The Am.

Ceramic Soc’y, 2015 WL 5461564 (N.D. Ill. Sept. 15, 2015) M&R Printing Equip., Inc.
v. Anatol Equip. Mfg. Co., 321 F. Supp. 2d 949 (N.D. Ill. 2004)); Pl. KSA Resp. at 39–
41 (citing same). As for the cases cited by Defendants, those cases, according to Force
Partners, are all distinguishable.
The Court agrees with Defendants and finds that Force Partners fails to allege
an actionable disparaging statement under the IUDTPA. The only allegedly false
statement pled with specificity is that “KSA claimed that Force Partners was
bypassing distributors to make sales directly to end-users and contractors, thereby
denying sales and profits to distributors.” FAC ¶ 77. This statement, even if false,

does not disparage Force Partners’ goods or services, which is required under the
IUDTPA. See Evanger’s Cat & Dog Food Co., Inc. v. Thixton, 412 F. Supp. 3d 889, 903
(N.D. Ill. 2019); see also Organ Recovery Sys., Inc. v. Pres. Sols., Inc., 2012 WL 116041,
at *6 (N.D. Ill. Jan. 16, 2012) (“The statements, however, must specifically disparage
a product or service and not just attack the reputation of the business or the person
selling it.”). Force Partners’ argument that the statement “disparaged the quality of

services that Force Partners provides to its distributors, by falsely claiming that
Force Partners’ services are not reliable because the company will go behind the back
of distributors to sell directly to end-user and contractors” is too far of a stretch. Pl.
KSA Resp. at 39. This is especially true because, as the KSA Defendants point out,
the statement is based on “an instance in which an end user asked to make a purchase
directly from a Force Partner’s brand” and that Force Partners “insisted” on
compensation for the relevant distributor when it “became aware of this situation.”

KSA Memo. Dismiss at 25 (citing FAC ¶ 78). In other words, the FAC suggests that
the statement may well be true, and thus not actionable under the IUDTPA.
The Court agrees with Defendants that Force Partners fails to state a claim
under the IUDTPA. Accordingly, Count VI is dismissed with prejudice.
VI. Tortious Interference with Prospective Business Relations
(Count VII)
In Count VII, Force Partners asserts a claim for tortious interference with
prospective business relations. FAC ¶¶ 180–90. Under Illinois law, in order to state
a claim for tortious interference with business relations, the plaintiff must allege: (1)
the existence of a valid business relationship; (2) defendant’s knowledge of the
plaintiff’s relationship or expectancy; (3) purposeful interference by defendant that

prevents it from happening or terminates the relationship; and (4) damages as a
result. Speakers of Sport, 178 F.3d at 865. “Under Illinois law, commercial
competitors are privileged to interfere with one another’s prospective business
relationships provided their intent is, at least in part, to further their businesses and
is not solely motivated by spite or ill will.” Imperial Apparel, Ltd. v. Cosmo’s Designer
Direct, Inc., 882 N.E.2d 1011, 1019 (Ill. 2008).

Defendants argue that the FAC pleads statements that only reflect
competition, and are therefore protected by the privilege of competition. KSA Memo.
Dismiss at 26–27; Acuity Memo. Dismiss at 14–15. This privilege, also referred to as
“lawful competition,” “privileged competition,” or “competitor’s privilege,” is “an
affirmative defense to the tort of intentional interference with prospective business
[relations].” Gen. Motors Corp. v. State Motor Vehicle Review Bd., 862 N.E.2d 209,
220 (Ill. 2007) (internal citations omitted). “It allows one to divert business from one’s

competitors generally as well as from one’s particular competitors provided one’s
intent is, at least in part, to further one’s business and is not solely motivated by spite
or ill will.” Id. (internal quotation and citation omitted).
To overcome this defense, Defendants insist Force Partners must have alleged
facts from which actual malice may be inferred. KSA Memo. Dismiss at 26–27; Acuity
Memo. Dismiss at 14–15. Force Partners fails to do so, as it states in conclusory

fashion that the “actions of the Defendants were undertaken with malice.” Acuity
Memo. Dismiss at 15; KSA Memo. Dismiss at 26–27.
Force Partners responds that it has plausibly pled that Acuity’s conduct was
not privileged. The privilege to compete, asserts Force Partners, does not encompass
spreading false rumors or deliberate disparagement. Pl. Acuity Resp. at 19–21 (citing
Imperial Apparel, 882 N.E. 2d at 1019 (“The privilege to compete does not, however,

encompass the use of improper competitive strategies that employ fraud, deceit,
intimidation, or deliberate disparagement.”) (citing Cohabaco Cigar Co. v. United
States Tobacco Co., 1998 WL 773696 (N.D. Ill. October 30, 1998)); Pl. KSA Resp. at
41–42 (citing same). As discussed above, the Court finds that the FAC at least
suggests that the one false statement pled in the FAC may be true, supra Section V;
however, Force Partners does plead that Defendants engaged in other improper
competitive strategies. For instance, Force Partners alleges that Defendants forced

the distributors to “secretly share Force Partner[s’] confidential pricing with KSA so
KSA can decide whether to match Force Partner[s’] prices – in the hopes of ensuring
Force Partners’ quotes are not presented to contractors or end users, putting Force
Partners out of business, and eventually being able to charge higher prices. Architects
and contractors requesting multiple bids are not advised that the bidding process is
a sham, as KSA will obtain its main competitor’s confidential pricing information.”
FAC ¶ 183; see also id. ¶¶ 173–174, 179. The court in Cohabaco Cigar found the
plaintiff had a cognizable Illinois tortious interference claim against a defendant who
spread “false rumors” and who “attempted to drive [plaintiff] out of business through

predatory pricing and other nefarious tactics.” 1998 WL 773696, at *8.
The Court finds that, in viewing the allegations of the FAC in the light most
favorable to non-movant Force Partners and drawing all reasonable inferences in its
favor, as it must, that, like the plaintiff in Cohabaco Cigar, Force Partners has
adequately alleged a claim for tortious interference with business relations.
Therefore, the motion to dismiss Count VII is denied.

Conclusion
For the reasons given above, Defendants’ Motions to Dismiss [45], [47], are
granted in part and denied in part. The Court grants Defendants’ motions as to Count
II (Sherman Act Section 1 horizontal conspiracy), Count V (the Illinois Antitrust Act
claim premised on 740 ILCS 10/3(1)), and Count VI (IUDTPA). Those claims are
dismissed with prejudice. Defendants’ motions are denied as to Count I (Sherman Act
Section 1 vertical conspiracy), Count III (Sherman Act Section 2), Count IV (Clayton

Act Section 3), Count V (the Illinois Antitrust Act claims premised on 740 ILCS
10/3(2)–(4)), and Count VII (tortious interference with prospective business
relations). The Court directs Defendants to answer the First Amended Complaint in
light of its ruling by March 18, 2022, and refers the case to Magistrate Judge Gilbert
for discovery supervision and settlement.

Dated: February 25, 2022 Canblee 7 ob. □
United States District Judge
Franklin U. Valderrama

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10645188. Public record. Not legal advice.