Cite as 795 F.Supp. 639 (S.D.N.Y. 1992)
In light of the fact that MAJ will suffer no prejudice by virtue of the addition of the Paolercios, as well as MAJ’s own concession that they would have had to have been added as counter-defendants for the purposes of the § 1962(c) claim, we grant MAJ’s motion in its entirety. The individual defendants may move to dismiss as to the non-RICO causes of action following completion of discovery.
B. MAJ’s Motion to Dismiss
In reviewing MAJ’s motion to dismiss, this Court is required to accept the allegations in the amended countercomplaint as true and to construe them in the light most favorable to Peacock. See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974); Dacey v. New York County Lawyers’ Ass’n, 423 F.2d 188, 191 (2d Cir.1969), cert. denied, 398 U.S. 929, 90 S.Ct. 1819, 26 L.Ed.2d 92 (1970). The contested counterclaims will be dismissed only if Peacock can prove no set of facts that would entitle it to relief. See Conley v. Gibson, 355 U.S. 41, 45–46, 78 S.Ct. 99, 101–02, 2 L.Ed.2d 80 (1957); Goldman v. Belden, 754 F.2d 1059, 1065 (2d Cir.1985).
While the bulk of Peacock’s allegations need only conform to the liberal pleading requirements of Fed.R.Civ.P. 8(a), the mail fraud allegations underlying its RICO counterclaim and certain fraud-based aspects of the antitrust counterclaim must comply with the more stringent pleading requirements of Fed.R.Civ.P. 9(b) to survive dismissal.[1] Rule 9(b) provides that “In all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity.” With these background principles in mind, we now address each of the contested counterclaims in turn.
- 1. The Antitrust Counterclaim.
Section 2 of the Sherman Act states that no person may “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. Peacock’s Second Counterclaim alleges that MAJ violated this provision by either monopolizing or attempting to monopolize the diamond-cut gold charm industry.
In order to state a claim of monopolization under § 2, Peacock must adequately allege two elements: “(1) the possession of monopoly power in the relevant market and (2) the willful acquisition of that power as distinguished from the growth or development of a business as a consequence of a superior product, business acumen or historical accident.” United States v. Grinnell Corp., 384 U.S. 563, 570–71, 86 S.Ct. 1698, 1704, 16 L.Ed.2d 778 (1966); Energex Lighting Indus., Inc. v. North American Philips Lighting Corp., 765 F.Supp. 93, 101 (S.D.N.Y.1991). In order to allege a claim for attempted monopolization. Peacock must plead “(1) a ‘dangerous probability of success’ in monopolizing a given product market and (2) a specific intent to ‘destroy competition or build monopoly.’ ” Nifty Foods Corp. v. Great Atlantic & Pacific Tea Co., 614 F.2d 832, 841 (2d Cir.1980), quoting Times-Picayune Publishing Co. v. United States, 345 U.S. 594, 626, 73 S.Ct. 872, 890, 97 L.Ed. 1277 (1953). In addition, in order to have standing to bring this private antitrust action, Peacock must prove that it suffered an “antitrust injury,” which is an “injury of the type the antitrust laws were intended to prevent and that flows from that which makes [MAJ’s] acts unlawful.” Brunswick Corp.
- ↑ In its initial memorandum of law, MAJ argued that this Court should follow other district courts that have held that because a RICO action threatens the reputation of a defendant, the heightened pleading requirements of Rule 9(b) should extend to all RICO predicate acts. See MAJ’s Memorandum of Law in Support of Motion to Dismiss at 22 (citing cases). In the recently decided case of McLaughlin v. Arthur Anderson, 962 F.2d 187, 194, (2d Cir.1992), however, the Second Circuit made clear that because “rule 9(b) applies only to claims of fraud or mistake,” the district court erred in subjecting a predicate act of extortion to its scrutiny. In light of that clear pronouncement by the Second Circuit, we limit the application of rule 9(b) to the allegations of fraud under the antitrust counterclaim and mail fraud under the RICO counterclaim.
