Rahal

DOCUMENT

ELECTRONICALLY FILE

DOC #:

UNITED STATES DISTRICT COURT DATE FILED:__2/4/2®

SOUTHERN DISTRICT OF NEW YORK

OWN YOUR HUNGER LLC, LIGHTEN UP FOODS, 25-CV-4544 (VM)

and DEFIANT FOODS LLC,

DECISION AND ORDER

Plaintiffs,

- against -

LINUS TECHNOLOGY, INC., EPOGEE LLC, and

PETER RAHAL,

Defendants.

VICTOR MARRERO, United States District Judge.

Plaintiffs OWN Your Hunger LLC (“OWN”), Lighten Up

Foods, LLC (“Lighten Up”), and Defiant Foods, LLC (“Defiant

Foods” and, collectively, “Plaintiffs”) bring this antitrust

case against defendants Linus Technology, Inc., d/b/a “David

Protein” (“David Protein”), Epogee LLC (“Epogee”), and Peter

Rahal (“Rahal” and, collectively, “Defendants”). Plaintiffs

allege claims under Section 1 of the Sherman Act (“Section

1”), 15 U.S.C. § 1, Section 2 of the Sherman Act (“Section

2”), 15 U.S.C. § 2, Section 7 of the Clayton Act (“Section

7”), 15 U.S.C. § 18, and New York’s Donnelly Act, N.Y. Gen.

Bus. Law § 340. (See “Second Amended Complaint” or “SAC”,

Dkt. No. 41.) Before the Court is Defendants’ motion to

dismiss (Dkt. No. 60) and Plaintiffs’ motion for a preliminary

injunction pursuant to Federal Rule of Civil Procedure 65

(Dkt. No. 70). For the reasons stated below, the Court GRANTS

Defendants’ motion to dismiss and DENIES Plaintiffs’ motion

for a preliminary injunction.

I. BACKGROUND1

0F

This litigation arises out of the May 9, 2025,

acquisition of Epogee, the sole producer of a plant-based

“fat alternative” known as esterified propoxylated glycerol

(“EPG”), by David Protein, the manufacturer of a line of

protein bars that incorporate EPG as an ingredient. (See SAC

¶ 1.)

The Plaintiffs are three producers of “low-calorie” food

products. (Id. at ¶¶ 20-22.) OWN manufactures and sells low-

calorie peanut butters and hazelnut spreads and “protein

dessert squares.” (SAC ¶ 20.) Lighten Up manufacturers and

sells low-calorie sauces. (“Sanburg Decl.”, Dkt No. 41-1 at

¶ 1; SAC ¶ 21.) Defiant manufacturers and sells low-calorie

chocolate products. (“Fugal Decl.”, Dkt No. 41-3 at ¶ 1; SAC

¶ 22.) All three companies manufacture their products using

EPG, which provides many of the functional qualities of a

traditional fat but contains 0.7 calories per gram as compared

to the approximately 9 calories per gram in traditional fats.

1 The following facts are taken from Plaintiff’s Second Amended Complaint,

which the Court takes as true for the purpose of resolving Defendants’

motion to dismiss. See Safka Holdings LLC v. iPlay, Inc., 42 F. Supp. 3d

488, 491 (S.D.N.Y. 2013). Where indicated, the Complaint’s factual

allegations are supplemented by facts and information drawn from documents

appended to the Complaint. See Tannerite Sports, LLC v. NBCUniversal Media

LLC, 135 F. Supp. 3d 219, 225 n.1 (S.D.N.Y. 2015).

(See Sanburg Decl. at ¶¶ 4-10; Fugal Decl. at ¶¶ 4-5; “Walia

Decl.”, Dkt. No. 41-6 at ¶¶ 8-9.)

EPG was developed by Epogee, which holds four patents on

EPG’s manufacturing process. (See SAC ¶ 38.) Prior to the

events that gave rise to this litigation, Plaintiffs and David

Protein all purchased EPG from Epogee, which was the sole

producer and supplier of EPG. (See SAC ¶ 30.)

In February 2025, David Protein and Epogee began

negotiations in anticipation of David Protein’s acquisition

of Epogee. (See SAC ¶ 78.) On March 25, 2025, Epogee sent a

notice to Plaintiffs stating that it would not be accepting

new orders for EPG from Plaintiffs due to a “stock out

situation” and “unexpectedly high lead times for raw

materials.” (Dkt. No. 41-14 at 9; SAC ¶ 79.) On May 9, 2025,

David Protein completed its acquisition of Epogee for $75

million. (See SAC ¶ 70.) On May 29, 2025, Defendants sent

letters to Plaintiffs stating that Defendants were “wind[ing]

down support for [Plaintiffs’] account[s]” and would not

accept new orders for EPG from Plaintiffs in the future. (See

Dkt. No. 41-14 at 14.) In an interview shortly after the

acquisition, Rahal, one of the founders of David Protein,

stated that David “will be taking all the supply” of EPG.

(SAC ¶ 90.) Beginning with the March 25, 2025, letter through

the present, Defendants have not accepted any new orders for

EPG from Plaintiffs.

On June 2, 2025, Plaintiffs commenced this action by

filing their original complaint along with a motion for an ex

parte temporary restraining order (“TRO”) and preliminary

injunction (“PI”). In their operative complaint, Plaintiffs

allege that Defendants violated Sections 1 and 2 of the

Sherman Act, 15 U.S.C. §§ 1–2, Section 7 of the Clayton Act,

15 U.S.C. § 18, and Section 340 of New York’s Donnelly Act,

N.Y. Gen. Bus. Law. § 340. (See SAC ¶¶ 206–48.) Plaintiffs

allege that Defendants violated the various antitrust

statutes by engaging in an unlawful exclusive dealing

relationship prior to the merger, whereby Epogee agreed to

provide only David with EPG at the exclusion of other buyers,

and by merging and subsequently refusing to supply Plaintiffs

with EPG. (See id.)

On June 4, 2025, this Court declined to grant Plaintiffs’

motion for a TRO ex parte. (See Dkt. No. 11.) Following

service on Defendants along with full briefing and oral

argument, this Court denied Plaintiffs’ motion for a TRO on

June 17, 2025, finding that Plaintiffs had failed to

demonstrate a likelihood of success on the merits of any of

their claims. (See Dkt. No. 27.)

On September 22, 2025, Defendants filed their motion to

dismiss the SAC along with a supporting memorandum of law.

(See Dkt. Nos. 60, 61.) Plaintiffs filed a memorandum in

opposition on October 16, 2025. (See “Opposition” or “Opp’n”,

Dkt. No. 66.) On October 30, 2025, Defendants filed a reply

memorandum in support of their motion. (See Dkt. No. 68.)

On November 7, 2025, Plaintiffs filed their motion for

a PI along with a memorandum of law, supporting exhibits, and

a proposed PI order. (See Dkt. Nos. 70, 71, 72, 73.)

Plaintiffs seek a PI enjoining Defendants from refusing to

sell EPG to Plaintiffs and requiring them to continue

fulfilling Plaintiffs’ EPG purchase orders at prices and

quantities analogous to those previously provided. (See Dkt.

No. 73.) Defendants filed a memorandum of law in opposition

on November 25, 2025. (See Dkt. No. 74.) Plaintiffs filed a

reply memorandum on December 5, 2025. (See Dkt. No. 75.) On

December 14, 2025, Plaintiffs requested that the Court decide

its Motion without oral argument or an evidentiary hearing.

(See Dkt. No. 76.)

II. LEGAL STANDARD

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

sufficient factual matter, accepted as true, to ‘state a claim

to relief that is plausible on its face.’” Ashcroft v. Iqbal,

556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly,

550 U.S. 544, 570 (2007)). A claim is plausible if the

complaint states “‘enough fact to raise a reasonable

expectation that discovery will reveal evidence of illegal’

conduct” — there is not “a probability requirement at the

pleading stage.” Lynch v. City of New York, 952 F.3d 67, 75

(2d Cir. 2020) (quoting Twombly, 550 U.S. at 556); see Iqbal,

556 U.S. at 678 (“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.”). “In other words, a complaint

should not be dismissed when the factual allegations

sufficiently ‘raise a right to relief above the speculative

level.’” Liboy v. Russ, No. 22-CV-10334, 2023 WL 6386889, at

*4 (S.D.N.Y. Sept. 29, 2023) (quoting Twombly, 550 U.S. at

555).

In reviewing a motion to dismiss under Rule 12(b)(6),

the Court must “constru[e] the complaint liberally, accepting

all factual allegations in the complaint as true, and drawing

all reasonable inferences in the plaintiff’s favor.”

Goldstein v. Pataki, 516 F.3d 50, 56 (2d Cir. 2008) (citation

omitted). The Court may also “consider documents attached to

the pleadings, documents referenced in the pleadings, or

documents that are integral to the pleadings in order to

determine if a complaint should survive a [Rule] 12(b)(6)

motion.” Garcia v. Lewis, No. 05-CV-1153, 2005 WL 1423253, *3

(S.D.N.Y. June 16, 2005); see also ATSI Commc’ns, Inc. v.

Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007) (“[W]e may

consider any written instrument attached to the complaint,

statements or documents incorporated into the complaint by

reference, legally required public disclosure documents filed

with the SEC, and documents possessed by or known to the

plaintiff and upon which it relied in bringing the suit.”).

III. DISCUSSION

Plaintiffs bring claims under Sections 1 and 2 of the

Sherman Act, Section 7 of the Clayton Act, and the Donnelly

Act. Plaintiffs have failed to state a claim for which relief

can be granted because they have not plausibly alleged that

Defendants’ conduct harmed competition in the relevant market

Plaintiffs identify.

All of Plaintiffs’ claims require Plaintiffs to show

harm to competition within a relevant market. Section 1 of

the Sherman Act proscribes “[e]very contract, combination in

the form of trust or otherwise, or conspiracy, in restraint

of [interstate] trade or commerce.” 15 U.S.C. § 1. “To prove

a Sherman Act Section One violation, a plaintiff must show

first that there were ‘concerted actions between at least two

legally distinct economic entities’ which evince ‘a conscious

commitment to a common scheme designed to achieve an unlawful

objective.’” Caruso Mgmt. Co. Ltd. v. Int’l Council of

Shopping Ctrs., 403 F. Supp. 3d 191, 201 (S.D.N.Y. 2019)

(quoting United States v. Apple, Inc., 791 F.3d 290, 313, 315

(2d Cir. 2015)). Then, plaintiffs must show that the concerted

action “constituted an unreasonable restraint of trade.”

Anderson News, LLC v. Am. Media, Inc., 899 F.3d 87, 97 (2d

Cir. 2018) (internal quotation omitted). “Courts

presumptively apply a rule of reason analysis to challenged

agreements to determine whether they restrain trade.” Fed.

Trade Comm’n v. Shkreli, 581 F. Supp. 3d 579, 624 (S.D.N.Y.

2022). “[U]nder the rule of reason, a plaintiff must identify

the relevant market that is subject to the restraint and then

demonstrate the restraint’s adverse effects on competition in

that market.” Caruso Mgmt., 403 F. Supp. 3d at 201.

The Sherman Act Section 2, the Clayton Act Section 7,

and the Donnelly Act also require plaintiffs to identify the

relevant market affected. Section 2 of the Sherman Act

proscribes “monopoliz[ing] any part of the [interstate] trade

or commerce,” 15 U.S.C. § 2, and includes two elements: “(1)

the possession of monopoly power in the relevant market and

(2) the willful acquisition or maintenance of that power as

distinguished from growth or development as a consequence of

a superior product, business acumen, or historic accident.”

United States v. Grinnell Corp., 384 U.S. 563, 570-71 (1966).

Section 7 of the Clayton Act prohibits acquisitions when their

effect “may be substantially to lessen competition, or to

tend to create a monopoly,” 15 U.S.C. § 18, and requires that

competition be harmed or monopoly power acquired in a defined

market. See United States v. E. I. du Pont de Nemours & Co.,

353 U.S. 586, 593 (1957) (“Determination of the relevant

market is a necessary predicate to a finding of a violation

of the Clayton Act because the threatened monopoly must be

one which will substantially lessen competition within the

area of effective competition. Substantiality can be

determined only in terms of the market affected.”); see also

Saint Francis Hosp. & Med. Ctr., Inc. v. Hartford Healthcare

Corp., 655 F. Supp. 3d 52, 68 (D. Conn. 2023) (“[T]he

standards of liability under [the Sherman Act and the Clayton

Act] are largely the same.”).

Under the Donnelly Act, any contract, agreement, or

arrangement that forms a monopoly or restrains competition in

trade is illegal. See N.Y. Gen. Bus. Law. § 340(1). A party

alleging a violation of the Donnelly Act must satisfy several

elements: “(1) identify the relevant product market; (2)

describe the nature and effects of the purported conspiracy;

(3) allege how the economic impact of that conspiracy is to

restrain trade in the market in question; and (4) show a

conspiracy or reciprocal relationship between two or more

entities.” Altman v. Bayer Corp., 125 F.Supp.2d 666, 672

(S.D.N.Y. 2000).

The relevant market for antitrust purposes is the “area

of effective competition within which the defendant

operates.” Concord Assocs., L.P. v. Ent. Props. Tr., 817 F.3d

46 (2d Cir. 2016) (internal quotation marks and citation

omitted). The market includes “all products reasonably

interchangeable by consumers for the same purposes.”

Regeneron Pharms., Inc. v. Novartis Pharma AG, 96 F.4th 327,

338 (2d Cir. 2024) (internal quotation omitted). “Two

products are reasonably interchangeable where there is

sufficient cross-elasticity of demand — that is, where

consumers would respond to a slight increase in the price of

one product by switching to another product.” Id. (internal

quotation omitted).

In their Second Amended Complaint Plaintiffs allege that

the relevant market for all their claims is the “global market

for EPG supply.” (SAC ¶¶ 219, 232, 244.) Defendants argue

that Plaintiffs’ proposed market definition improperly

excludes fats and fat substitutes with which EPG competes.

(See Dkt. No. 61 at 8–13) The Court need not decide whether

Plaintiffs have alleged a plausible market definition. Even

accepting that the “global market for EPG supply” constitutes

a relevant market for antitrust purposes, Plaintiffs have

failed to allege that Defendants’ actions harmed competition

in that market.

In addition, despite alleging in their Second Amended

Complaint that the relevant market is the “global market for

EPG supply,” (SAC ¶¶ 219, 232, 244), Plaintiffs have elsewhere

identified various downstream product markets as the

“relevant market that is subject to the restraint” and thus

where competition is harmed. Caruso Mgmt., 403 F. Supp. 3d at

201. At the oral argument concerning Plaintiffs’ motion for

a TRO, Plaintiffs stated “[t]he relevant market here is the

ultra-low-calorie indulgence market.” (Dkt. No. 32 at 10:19–

20.) Further, in their Opposition, Plaintiffs argue that

“downstream markets for EPG-based food products” are the

“zone of effective competition where Defendants’

anticompetitive conduct causes competitive harm and monopoly

profits are extracted.” (Opp’n at 19.)

In their Second Amended Complaint as well as their

Opposition to Defendants’ motion, Plaintiffs use different

terms for the relevant downstream markets: the “EPG-based

protein bars” market (Opp’n at 35), the “downstream protein

bar market” (Opp’n at 31), the “downstream food markets

including protein bars, ice creams, brownies, cookies, and

chips” (Opp’n at 24), the market for “EPG-based products in

ice cream, brownies, chips, cookies, and spreads” (SAC ¶ 145),

and the market for “EPG-dependent food products” (SAC ¶ 204).

In addition to providing varying and overlapping definitions

of the relevant downstream markets, Plaintiffs fail to allege

the bounds of those markets and the reasonably

interchangeable products within them.2 For example,

1F

Plaintiffs do not allege that consumers view Lighten Up’s

EPG-containing sauces as reasonably interchangeable with

David’s protein bars. Nor do Plaintiffs allege that consumers

view David’s bars as not reasonably interchangeable with

protein bars that do not include EPG. See Regeneron Pharms.,

96 F.4th at 339 (describing the evidence that courts look to

in determining the boundaries of a proposed market). Having

failed to allege the reasonable interchangeability of

products within the downstream product markets, Plaintiffs

have failed to define those markets. See, e.g., Planetarium

Travel, Inc. v. Altour Int’l, Inc., 97 F. Supp. 3d 424, 429

(S.D.N.Y. 2015), aff’d, 622 F. App’x 40 (2d Cir. 2015)

(rejecting a proposed market where the plaintiff had “offered

2 In its Decision and Order denying Plaintiffs’ motion for a temporary

restraining order, this Court previously highlighted Plaintiffs’ failure

to define the downstream markets. (See Dkt. No. 27 at 10–11 (“If the

relevant market is the United States market for low-calorie indulgence

foods, Plaintiffs have provided no explanation as to why a consumer would

respond to a slight increase in price of Plaintiffs’ low-calorie sauces,

nut spreads, and chocolates by switching to Defendants’ protein bars.”).)

None of Plaintiffs’ filings following that Decision and Order have

provided that missing explanation. Plaintiffs’ only attempt in the vein

of downstream market definition is a single paragraph in its SAC stating

that David Bars are 56% more expensive than a single brand of non-EPG-

containing protein bars. (See SAC ¶ 115.)

no facts regarding the size of this proposed market, market

participants, market shares, or any information to guide the

Court in assessing its validity”); Gianna Enterprises v. Miss

World (Jersey) Ltd., 551 F. Supp. 1348, 1354 (S.D.N.Y. 1982)

(“The Court cannot accept the market boundaries offered by

plaintiff without at least a theoretically rational

explanation for excluding [potential substitutes].”).

Plaintiffs argue that they need not define these

downstream markets because they are not the “relevant market

for market definition purposes” but instead the “zone of

effective competition where Defendants’ anticompetitive

conduct causes competitive harm and monopoly profits are

extracted.” (Opp’n at 19.) That argument mistakes the role of

market definition in antitrust law. The “relevant market” for

antitrust purposes is the “area of effective competition.”

Tampa Elec. Co. v. Nashville Coal Co., 365 U.S. 320, 328

(1961). The purpose of defining that market is to establish

the line of commerce and geographic area in which a defendant

holds market power and competition may be harmed. See, e.g.,

Geneva Pharms. Tech. Corp. v. Barr Lab’ys Inc., 386 F.3d 485,

496 (2d Cir. 2004) (“The goal in defining the relevant market

is to identify the market participants and competitive

pressures that restrain an individual firm’s ability to raise

prices or restrict output.”); Phillip E. Areeda & Herbert

Hovenkamp, Antitrust Law: An Analysis of Antitrust Principles

and Their Application ¶ 531a, LexisNexis (database updated

Sept. 2025) (“Finding the relevant market and its structure

is typically not a goal in itself but a mechanism for

considering the plausibility of antitrust claims that the

defendants’ business conduct will create, enlarge, or prolong

market power.”). Plaintiffs’ failure to define the downstream

product markets undermines all of their claims as their theory

of harm across all of their claims is that Defendants’ actions

will harm competition in those markets.

A. SHERMAN ACT SECTION 1 CLAIM

In their Section 1 claim, Plaintiffs allege that, before

Epogee and David merged, the two then-separate firms agreed

that Epogee would sell EPG only to David and cease supplying

Plaintiffs and other purchasers. (See SAC ¶ 209.) In their

Second Amended Complaint, Plaintiffs allege that this

agreement was a “horizontal market allocation and/or group

boycott” that is per se unlawful or, in the alternative,

unlawful under the rule of reason. (SAC ¶ 49.) Plaintiffs

have failed to allege facts sufficient to support either of

these theories.

As an initial matter, Plaintiffs’ allegations make clear

that any agreement between Epogee and David was vertical, not

horizontal, as Epogee and David did not compete in any market

but engaged in the sale of EPG as supplier and consumer. See,

e.g., Anderson News, L.L.C., v. Am. Media, Inc., 680 F.3d

162, 182 (2d Cir. 2012) (“Agreements within the scope of § 1

may be either horizontal, i.e., agreements between

competitors at the same level of the market structure, or

vertical, i.e., combinations of persons at different levels

of the market structure, e.g., manufacturers and

distributors.”); Moccio v. Cablevision Sys. Corp., 208 F.

Supp. 2d 361, 378 (E.D.N.Y. 2002) (“Vertical refusals to deal

are agreements among persons or organizations at different

levels of the market structure not to deal with other market

participants.”).

Vertical group boycotts, also known as concerted

refusals to deal, are generally subject to the rule of reason.

See Moccio, 208 F. Supp. 2d at 379; NYNEX Corp. v. Discon,

Inc., 525 U.S. 128, 135 (1998) (“[P]recedent limits the per

se rule in the boycott context to cases involving horizontal

agreements among direct competitors.”).3 Accordingly, such

2F

agreements do not violate antitrust law absent a showing that

the agreement had “an actual adverse effect on competition as

3 The agreement might also be understood as an exclusive dealing agreement

between Defendants. As a vertical exclusive dealing agreement,

Defendants’ conduct would similarly be subject to the rule of reason. See

Maxon Hyundai Mazda v. Carfax, Inc., No. 13-CV-2680, 2014 WL 4988268, at

*9 (S.D.N.Y. Sept. 29, 2014). The difference in label therefore does not

affect the Court’s analysis.

a whole in the relevant market.” Virgin Atl. Airways Ltd. v.

Brit. Airways PLC, 257 F.3d 256, 264 (2d Cir. 2001) (“The

fact that the defendant’s actions prevent a plaintiff from

competing in a market is not enough, standing alone, to

satisfy this initial burden of proof.”). A plaintiff can

demonstrate the adverse effect directly, such as by showing

reduced output or higher prices. See, e.g., North American

Soccer League, 883 F.3d at 42. Alternatively, a plaintiff can

meet his or her burden indirectly, “by showing that the

defendant has sufficient market power to cause an adverse

effect on competition” and “other grounds for believing the

challenged restraint harms competition.” Id. “These other

grounds might include price increases, reduced output or

market quality, significantly heightened barriers to entry,

or reduced consumer choice.” Id.

Plaintiffs do not allege direct evidence of harm to the

market for EPG supply. The Second Amended Complaint does not

allege that, as a result of Defendants’ agreement, EPG output

has declined, EPG prices have gone up, or EPG quality has

been reduced. Plaintiffs’ elimination as purchasers of EPG

does not constitute reduced output in the economic sense. See

Discon Inc. v. NYNEX Corp., 86 F. Supp. 2d 154 (W.D.N.Y. 2000)

(“[Plaintiff’s] elimination from the market simply does not

equate to ‘reduced output.’”). Plaintiffs allege that David

purchased and put to use the EPG that would have otherwise

gone to Plaintiffs. (See SAC ¶ 209.)

Instead, Plaintiffs allege that Defendants’ pre-merger

agreement had an adverse effect on competition by excluding

them from obtaining EPG and thus forcing them to “exit their

markets,” including by reformulating their products to

replace EPG. (SAC ¶ 184.) As Plaintiffs explain their theory

of harm in their Opposition, the Defendants’ “vertical

agreement eliminated competition in the downstream protein

bar market.” (Opp’n at 31.) But an antitrust plaintiff must

show adverse effects on competition in the relevant market.

See Spinelli v. Nat’l Football League, 903 F.3d 185, 212 (2d

Cir. 2018). Reduced output or lessened consumer choice of

“EPG-containing products” is an adverse effect on competition

in the downstream product markets, not the market for EPG

supply.

Plaintiffs’ failure to define the relevant downstream

markets undermines their attempts to show harm to competition

within those markets. Plaintiffs do not show direct harm to

competition in those markets. Plaintiffs offer one allegation

that Defendants charge 56 percent more for their protein bar

than a single competitor. (See SAC ¶ 115.) But Plaintiffs do

not allege any connection between the exclusive dealing

agreement and Defendants’ higher price. Plaintiffs do not

allege that the competitor in question used EPG prior to the

exclusive dealing agreement or would have used EPG but for

the agreement.

Nor do plaintiffs sufficiently allege indirect harm to

competition in those downstream product markets. In order to

do so, they would need to first allege that Defendants have

sufficient market power in a downstream product market. See,

e.g, North American Soccer League, 883 F.3d at 42; Moccio,

208 F. Supp. 2d at 380 (“To claim that [Defendants] reduced

output or erected entry barriers, Plaintiffs would had to

have first defined the relevant market.”). But, having failed

to define the markets in which Defendants compete, Plaintiffs

cannot establish Defendants’ market power in those markets.

For example, if as Defendants argue, David Protein bars

compete in a protein bar market with robust competition,

including from competitors that do not use EPG, that

competition may restrain Defendants’ ability to raise prices

or restrict output. On the other hand, if David Protein

competes in a market for “EPG-dependent food products,”

Defendants’ exclusive control over EPG may, as Plaintiffs

argue, allow Defendants to harm competition in that market.

Either way, “[w]ithout a definition of [the relevant] market

there is no way to measure [Defendants’] ability to lessen or

destroy competition.” Walker Process Equip., Inc. v. Food

Mach. & Chem. Corp., 382 U.S. 172, 177 (1965); Ohio v.

American Express Co., 585 U.S. 529, 543 n.7 (2018) (“Vertical

restraints often pose no risk to competition unless the entity

imposing them has market power, which cannot be evaluated

unless the Court first defines the relevant market.”). Having

failed to define the downstream market or markets at issue —

the markets in which they argue Defendants’ actions will harm

competition — Plaintiffs have failed to sufficiently allege

their Section 1 claim.

B. SHERMAN ACT SECTION 2 CLAIM

Plaintiffs’ Section 2 claims fails to state a claim for

similar reasons. Section 2 makes it illegal to “monopolize,

or attempt to monopolize, or combine or conspire with any

other person or persons, to monopolize any part of the trade

or commerce among the several States or with foreign nations.”

15 U.S.C. § 2. A viable claim under Section 2 “must, like a

Section 1 claim, show a harm to competition.” E & L

Consulting, 472 F.3d at 31.

Plaintiffs’ Section 2 claim primarily challenges

Defendants’ decision to cease supplying EPG to Plaintiffs.4

3F

4 To the extent that Plaintiffs’ Section 2 claim also challenges

Defendants’ merger, that claim mirrors Plaintiffs’ Clayton Act Section 7

claim and fails to state a claim for the reasons discussed concerning the

Section 7 claim. Cf. Saint Francis Hosp., 655 F. Supp. at 68 (“[T]he

standards of liability under [the Sherman Act and the Clayton Act] are

largely the same.”).

That claim is properly dismissed for similar reasons as

Plaintiffs’ Section 1 claim, even without consideration of

whether Plaintiffs have alleged the requirements for a

refusal to deal claim as described by the Supreme Court in

Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S.

585 (1985) and Verizon Communications, Inc. v. Law Offices of

Curtis V. Trinko, 540 U.S. 398 (2004). Simply put, Defendants’

post-merger decision to cease supplying EPG to Plaintiffs had

no effect on competition in the market for EPG. A fact makes

clear the lack of anticompetitive effect on the EPG supply

market of Defendants’ refusal to sell Plaintiffs EPG: even

were the Court to grant Plaintiffs their requested injunctive

relief and order Defendants to meet their EPG needs,

Defendants would remain a monopolist with 100 percent share

of the EPG market. That monopoly is the result of the patents

on EPG’s production, the legality of which Plaintiffs do not

contest, and David’s acquisition of Epogee, the

anticompetitive nature of which Plaintiffs have failed to

demonstrate, as explained below in relation to Plaintiffs’

Clayton Act Section 7 claim.

Regarding the downstream product markets, Plaintiffs

allege that Defendants have “expand[ed] into downstream

markets abandoned by foreclosed competitors” and “prevent[ed]

entry by controlling all means of production.” (SAC ¶ 223.)

In their Opposition, Plaintiffs describe this theory as “two-

tier market monopolization” or “market leveraging,” whereby

Defendants “monopolized EPG supply upstream, then leveraged

that control to monopolize downstream markets.” (Opp’n at

35.)

“Within the context of [Section] 2 claims, the Supreme

Court has recognized the impropriety of monopoly leveraging,

i.e., the use of monopoly power in one market to strengthen

a monopoly share in another market.” Virgin Atlantic Airways

Ltd. v. British Airways PLC, 257 F.3d 256, 272 (2d Cir. 2001).

To state a claim for monopoly leveraging, a plaintiff must

allege that the defendant “(1) possessed monopoly power in

one market; (2) used that power to gain a competitive

advantage . . . in another distinct market; and (3) caused

injury by such anticompetitive conduct.” Id. Additionally,

the plaintiff must allege “a ‘dangerous probability of

success’ in monopolizing [the] second market.” Verizon

Commc’ns, 540 U.S. at 415 n.4 (quoting Spectrum Sports, Inc.

v. McQuillan, 506 U.S. 447, 459 (1993)); see In re Google

Digital Advert. Antitrust Litig., 721 F. Supp. 3d 230, 266

(S.D.N.Y. 2024).

Plaintiffs’ failure to define the downstream markets at

issue dooms their monopoly leveraging claim. To state a claim

for monopoly leveraging, Plaintiffs must allege that

Defendants’ conduct “threatens the second market with the

higher prices or reduced output or quality associated with

the kind of monopoly that is ordinarily accompanied by a large

market share.” AD/SAT, Div. of Skylight, Inc. v. Associated

Press, 181 F.3d 216, 230 (2d Cir. 1999) (quoting Phillip E.

3 Areeda et al., Antitrust Law ¶ 652, at 90 (alterations

accepted)). But Plaintiffs cannot establish that Defendants

have a “dangerous probability” of acquiring monopoly power in

downstream markets, or that competition will be harmed in

those markets, without first defining the markets at issue.

See Geneva Pharms., 386 F.3d at 496. Again, “[w]ithout a

definition of [the relevant] market there is no way to measure

[defendant’s] ability to lessen or destroy competition.”

Walker Process, 382 U.S. at 177; see Moccio, 208 F. Supp. 2d

at 377 (“To plead both actual and attempted monopolization

claims, plaintiffs must allege the scope and boundaries of

the relevant market sought to be monopolized.”).

Plaintiffs have therefore failed to state a claim as to

their Section 2 claim. See Elecs. Commc’ns Corp., 129 F.3d at

244, 246 (“Nor is it a violation of the antitrust laws,

without a showing of an actual adverse effect on competition

market-wide, for a manufacturer to terminate a distributor

. . . and to appoint an exclusive distributor.”).

C. CLAYTON ACT SECTION 7 CLAIM

Section 7 of the Clayton Act prohibits mergers and

acquisitions “where in any line of commerce or in any activity

affecting commerce in any section of the country, the effect

of such acquisition may be substantially to lessen

competition, or to tend to create a monopoly.” 15 U.S.C. § 18.

In assessing Section 7 claims challenging vertical mergers,

courts generally apply a burden-shifting approach. See FTC v.

IQVIA Holdings Inc., 710 F. Supp. 3d 329, 351 (S.D.N.Y. 2024);

Illumina, Inc. v. FTC, 88 F. 4th 1036, 1048 (5th Cir. 2023).5

4F

Under this approach, the plaintiff must first “make a fact-

specific showing that the proposed merger is likely to be

anticompetitive.” AT&T, 916 F.3d at 1032. If the plaintiff

does so, “the burden shifts to the defendant to present

evidence that the prima facie case inaccurately predicts the

relevant transaction’s probable effect on future competition

or to sufficiently discredit the evidence underlying the

prima facie case.” Id. (internal quotation marks and citation

5 The burden-shifting framework is “less entrenched in the context of

vertical mergers” than in horizontal merger cases. IQVIA Holdings, 710 F

at 351. In fact, “[t]here is a dearth of modern judicial precedent on

vertical mergers and a multiplicity of contemporary viewpoints about how

they might optimally be adjudicated and enforced.” United States v. AT&T,

Inc., 916 F.3d 1029, 1037 (D.C. Cir. 2019). But the burden-shifting

approach has been adopted in the horizontal merger context by the Second

Circuit, see In re AMR Corp., No. 22-901, 2023 WL 2563897, at *2-3 (2d

Cir. Mar. 20, 2023),and in the vertical merger context by courts of

appeals that have addressed the issue, see AT&T, 916 F.3d at 1037;

Illumina, 88 F. 4th at 1048.

omitted). If the defendant is successful, “the burden of

producing additional evidence of anticompetitive effects

shifts back to the [plaintiff] and merges with the ultimate

burden of persuasion.” IQVIA Holdings, 710 F. Supp. 3d at

351.

One important fact differentiates the plaintiff’s

initial burden in vertical merger cases from that in actions

challenging horizontal mergers. “A vertical merger, unlike a

horizontal one, does not eliminate a competing buyer or seller

from the market.” Fruehauf Corp. v. FTC, 603 F.2d 345, 351

(2nd Cir. 1979). “It does not, therefore, automatically have

an anticompetitive effect or reduce competition.” Id.

(citation omitted). The “competitive significance of a

vertical merger” therefore “results primarily from the

degree, if any, to which it may increase barriers to entry

into the market or reduce competition by (1) foreclosing

competitors of the purchasing firm in the merger from access

to a potential source of supply, or from access on competitive

terms, (2) by foreclosing competitors of the selling firm

. . . from access to the market or a substantial portion of

it, or (3) by forcing actual or potential competitors to enter

or continue in the market only on a vertically integrated

basis because of advantages unrelated to economies

attributable solely to integration.” Id. at 352.6

5F

The “ultimate objective” of the evaluation of a vertical

merger is “to determine whether and how the particular merger

in issue may lessen competition, i.e., what its

anticompetitive effect on the market, if any, is likely to

be.” Id. Plaintiffs have failed to allege facts sufficient to

satisfy that inquiry.

In the first instance, Plaintiffs allege that the merger

harmed competition via “[e]limination of all independent

sources of EPG supply.” (SAC ¶ 234.) Plaintiffs further argue

that “Defendant’s acquisition transformed an already

concentrated market into an absolute monopoly, moving from

90% to 100% control.” (Opp’n at 7.) That argument is wrong in

fact and in law. According to Plaintiffs own theory of the

case, the merger had no effect on concentration in the EPG

market: prior to the merger that market was entirely

controlled by Epogee, and after the merger it remains a

6 In the words of a leading antitrust treatise: “A vertical merger standing

alone does not alter concentration either in the supplier’s market or in

its customers’ markets, and hence adds nothing to whatever market position

either firm previously had. . . . Accordingly, any anticompetitive

effects of a vertical merger must arise from other structural or

behavioral consequences, such as increased entry barriers, the

elimination of unintegrated rivals by foreclosure, or the raising of

rivals’ costs.” Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law: An

Analysis of Antitrust Principles and Their Application ¶ 1000a, LexisNexis

(database updated Sept. 2025).

monopoly controlled now by David. That makes sense as David

and Epogee were not competitors in the EPG market but customer

and supplier. As explained, a vertical merger between a

customer and supplier does not directly cause any change in

market concentration. See Fruehauf, 603 F.2d at 351.

In the alternative, Plaintiffs again focus on harm to

downstream markets. Plaintiffs allege that the merger will

have “foreclosure effects on downstream competition.” (SAC

¶ 235.) In their Opposition, Plaintiffs argue that David’s

control over EPG has enabled them to “refuse all external

sales of EPG” and “extract[] 56% price premiums in the

downstream Consumer Package Goods markets they directly

compete in.” (Opp’n at 8.)7

6F

Plaintiffs’ theory of harm is consistent with Fruehauf’s

guidance that a vertical merger may “reduce competition by

. . . foreclosing competitors of the purchasing firm in the

merger from access to a potential source of supply, or from

access on competitive terms.” 603 F.2d at 352. But, as

Fruehauf held, “[t]he Supreme Court’s insistence that each

merger challenges under [Section 7] be viewed in the context

of its particular industry, and that the Clayton Act protects

7 The 56% price premium figure is a reference to the difference in price

between David’s protein bar and the protein bar of a single competitor.

(See Opp’n at 8; SAC ¶ 115.) That price difference alone is plainly

insufficient to show harm to competition.

competition, not competitors, contravenes the notion that a

significant level of foreclosure is itself the proscribed

effect.” Id. at 352–53 (cleaned up). Instead, “[a] showing of

some probable anticompetitive impact is still essential.” Id.

at 353. Plaintiffs’ theory of harm makes clear that that

impact will occur in whatever downstream markets David

competes in. That theory is consistent with the approach taken

by other courts in considering the effects on downstream

competitors of a vertical merger between a purchaser and a

supplier. See id. at 354–55; Illumina, 88 F. 4th at 1051–55;

AT&T, 916 F.3d at 1035–38. Because Plaintiffs have failed to

define the downstream markets or otherwise allege how the

merger will harm competition therein, they have failed to

state a claim for relief on their Clayton Act Section 7

claims.

Consideration of other Clayton Act Section 7 cases

addressing vertical mergers demonstrates the weakness of

Plaintiffs’ claim. For example, in Federal Trade Commission

v. Microsoft Corp., 136 F.4th 954 (9th Cir. 2025), the Ninth

Circuit considered the Federal Trade Commission’s (“FTC”)

motion to preliminarily enjoin the merger of Microsoft, a

producer of video game consoles, and Activision, the

developer of certain video games. 136 F.4th at 958–59. As

part of its theory of harm, the FTC argued that, after the

merger, Microsoft would make certain Activision video games

exclusive to its console, resulting in substantial harm to

competition in the downstream market for video game consoles.

See id. at 970. The Ninth Circuit rejected this argument, as

the FTC had failed to show a likelihood that exclusivity would

harm competition in the console market. See id. at 970–71

(“The mere fact that, after a vertical merger, a company might

make some of its newly acquired intellectual property

exclusive to its platforms does not, without more, show a

substantial lessening of competition.”) As the Ninth Circuit

explained, “[i]t is in the nature of intellectual property

rights that the holder ultimately has exclusive control over

them, and the question under [Section] 7 is whether there is

a reasonable probability that, if Microsoft acquires such

exclusivity rights with respect to the relevant intellectual

property, Microsoft will exercise such rights in a manner

that substantially lessens competition in the pertinent

market, i.e., the console market.” Id. at 971. Demonstrating

the required competitive harm “requires something more than

merely showing that some of the rights acquired will be made

exclusive.” Id.

Plaintiffs’ allegations here fall far short of the FTC’s

showing in Microsoft that the merger and resulting

exclusivity will substantially lessen competition. Before the

district court in Microsoft, the FTC offered evidence,

including pricing information and evidence of industry

recognition, establishing the bounds of the console market.

See FTC v. Microsoft Corp., 681 F. Supp. 3d 1069, 1086–87

(N.D. Cal. 2023). The FTC also offered evidence, albeit which

the district court and Ninth Circuit found to be insufficient,

to show that making certain video games exclusive to

Microsoft’s console would be profitable and result in harm to

competition in the console market. See Microsoft, 136 F.4th

at 967–69. Although Plaintiffs need not present evidence at

this stage, they must make allegations from which the Court

can assess the harm they allege will occur. As explained,

Plaintiffs here have failed to offer even a consistent

definition of the downstream markets at issue, much less

allege how harm will result from Defendants’ conduct.

Accordingly, Plaintiffs have failed to state a claim as to

their Clayton Act Section 7 claim.

D. DONNELLY ACT CLAIM

Plaintiffs’ Donnelly Act claim challenges the same

conduct as their federal law claims and alleges the same

relevant market. (See SAC ¶¶ 239–48 (“The relevant market

under the Donnelly Act is the same as under federal law: the

global market for EPG supply[.]”).) The Donnelly Act requires

“identical basic elements of proof for claims of

monopolization” as the Sherman Act, including the definition

of a relevant market and a showing that the “economic impact

of [the] conspiracy is to restrain trade in the market in

question.” Altman v. Bayer Corp., 125 F. Supp. 2d 666, 672

(S.D.N.Y. 2000). Accordingly, Plaintiffs have failed to state

a sufficient claim as to their Donnelly Act action for the

reasons explained above.

* * * * *

In sum, Defendants’ actions have cut off Plaintiffs’

supply of EPG. However, “antitrust is not concerned with

denial of access in the abstract, but only with denial of

access that foreseeably results in an output reduction and

attendant increase in price.” Phillip E. Areeda & Herbert

Hovenkamp, Antitrust Law: An Analysis of Antitrust Principles

and Their Application ¶ 1821c, LexisNexis (database updated

Sept. 2025). Plaintiffs have not sufficiently alleged facts

to show that Defendants’ actions are capable of resulting in

such harm to competition in the market they define — the

global EPG supply market — or defined the markets in which

they allege these harms will occur.

E. MOTION FOR A PRELIMINARY INJUNCTION

Plaintiffs have moved for a preliminary injunction

requiring Defendants to supply them with EPG. “A party seeking

a preliminary injunction must show (1) irreparable harm; (2)

either a likelihood of success on the merits or both serious

questions on the merits and a balance of hardships decidedly

favoring the moving party; and (3) that a preliminary

injunction is in the public interest.” North American Soccer

League, 883 F.3d at 37 (2d Cir. 2018).

To establish a likelihood of success on the merits in

support of a preliminary injunction, a Plaintiff “must clear

a much higher hurdle” than is required to defeat a motion to

dismiss. Stewart v. Metro. Transportation Auth., 566 F. Supp.

3d 197, 213 (E.D.N.Y. 2019). For the same reasons that

Plaintiffs have failed to allege their entitlement to relief

on their antitrust claims, they have failed to establish a

likelihood of success on the merits or serious questions going

to the merits of those claims.

IV. ORDER

For the foregoing reasons, it is hereby

ORDERED that the motion (Dkt. No. 60) of defendants Linus

Technology, Inc., d/b/a “David Protein”, Epogee LLC, and

Peter Rahal to dismiss the Second Amended Complaint (Dkt. No.

41) is GRANTED. The Second Amended Complaint is hereby

DISMISSED. Plaintiffs OWN Your Hunger LLC, Lighten Up Foods,

LLC, and Defiant Foods, LLC’s (collectively “Plaintiffs”) may

file, within ten days of the date of this Order, a letter

brief not to exceed five pages seeking leave to file an

amended complaint, and showing factually how they would amend

the complaint to overcome the deficiencies identified in this

Decision and Order. Defendants may file a response of equal

length within five days of the Plaintiffs’ filing. It is

further

ORDERED that Plaintiffs’ motion for a preliminary

injunction (Dkt. No. 70) is DENIED.

SO ORDERED.

Dated: 4 February 2026

New York, New York

Victor Marrero

U.S.D.Jd.

32