Antitrust Law Daily Wrap Up, ANTITRUST—DDC: Dealer's Suit Against DuPont Not Dismissed for Lack of Standing, (Jan 17, 2013)

By Jeffrey May, J.D.

A Colorado company in the business of selling automotive coatings to auto body repair shops and retailers in the Denver area on behalf of E.I. DuPont De Nemours and Company had standing to bring an antitrust action against DuPont, a competing DuPont dealer, and the dealer's parent, the federal district court in Denver has ruled. The court rejected DuPont’s argument that the complaining company lacked standing because it assigned its right to bring the claims at issue when it sold its business to a third party (JTS Choice Enterprises, Inc. v. E.I. DuPont De Nemours and Co., January 15, 2013, Martínez, W.).

While applicable Colorado law provided that “[n]o particular formalities are necessary to effect a valid assignment," the intent to make the assignment had to be apparent, the court explained. The asset purchase agreement, however, was ambiguous as to whether the complaining company assigned its right to the legal claims to the third party. Neither the purchase agreement nor the bill of sale (BOS) expressly addressed the antitrust claims or any of the other legal claims brought by the complaining company in the case.

In addition, there was evidence that parties did not intend to assign all of the complaining company's claims. The owners of the complaining business had stated that, in selling their business, they did not intend to sell any rights to pursue legal claims of any nature. Moreover, the actions of the complaining company and the third party since the sale of the business showed that they did not understand the purchase agreement or BOS to assign all of the complaining company's legal claims to the third party. Thus, DuPont's Motion to Dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) was denied.

Personal Jurisdiction

The court also denied a Motion to Dismiss for Lack of Personal Jurisdiction filed by the Illinois-based parent company of the competing DuPont dealer. The competing dealer and its parent allegedly poached the complaining company's customers after they entered its market.

The Illinois company contended that all of the actions that the complaining firm attributed to it were actually performed by its subsidiary and that it was not subject to personal jurisdiction in Colorado based on the actions of its subsidiary and the subsidiary’s employees. However, there was evidence that the Illinois company “purposefully directed” its activities at Colorado businesses and residents, and the litigation arose, in part, out of these activities. Moreover, the court could have personal jurisdiction over the Illinois company under an agency or alter ego theory. There was sufficient evidence to show that the parent company had a degree of control over the competing dealer so as to permit the court to exercise jurisdiction over the Illinois company.

The case is Civil Action No. 11-cv-03143-WJM-KMT.

Attorneys: Theodore Wells Rosen (Theodore W. Rosen, P.C.) for JTS Choice Enterprises, Inc. David Matthew Stauss (Ballard Spahr, LLP) for E.I. DuPont De Nemours and Co.

Companies: JTS Choice Enterprises, Inc.; E.I. DuPont De Nemours and Co.

Cases: Antitrust ColoradoNews