Antitrust Law Daily Wrap Up, ANTITRUST—N.D. Ill.: Peaches’ not-so-sweet behavior supports competing dress shop’s complaint, (Aug 29, 2013)

By Jeffrey May, J.D.

The alleged anticompetitive conduct of Peaches Boutique, one of the Chicago area's largest retail suppliers of homecoming and prom dresses, could have caused antitrust injury to complaining rival Hannah’s Boutique, Inc. and other retailers in the homecoming and prom dress market, the federal district court in Chicago has ruled. A motion filed by the principals of Peaches to dismiss Hannah's antitrust claims was denied (Hannah’s Boutique, Inc. v. Surdej, August 28, 2013, St. Eve, A.).

Despite the defendants' contentions to the contrary, Hannah’s not only defined the relevant commercial market, but provided factual allegations of its competitor's anticompetitive conduct and the effect of that conduct on that market, according to the court. Hannah's alleged that Peaches had relationships with numerous women’s fashion dress designers, had “dominated” the Chicago market, and had been able to greatly inflate dress prices to consumers by as much as 200-250%. Hannah’s also alleged that five businesses, which previously sold prom, homecoming, and evening dress apparel, had been forced out of business.

The court determined that Hannah's provided factual allegations to support its contention that Peaches dominated the market. Among other things, Hannah’s alleged that:

Peaches ordered 13 designers to cease doing business with Hannah’s;

Peaches made specific false statements to Hannah’s current and prospective clients, including that Hannah’s was selling “knockoff” dresses and that the store was managed and operated by Muslims who “barbeque goats in the parking lot”; and

Peaches made false accusations about Hannah’s to a local police department that Hannah’s had installed cameras in its changing rooms to record women changing clothes.

The defendants could not defeat Hannah’s’ antitrust complaint by merely offering unsupported factual allegations of their own or by making conclusory statements that the conduct could be “good for competition,” the court noted. The defendants would be permitted to pursue such defenses or put forth evidence to undercut Hannah’s’ allegations that Peaches’ actions were anticompetitive at later stages in the litigation.

The case is No. 13 C 2564.

Attorneys: Steven Michael Laduzinsky (Laduzinsky & Associates, P.C.) for Hannah’s Boutique, Inc. Eric Daniel Anderson (Staub Anderson Green LLC) for Roy Surdej.

Companies: Peaches Boutique; Hannah’s Boutique, Inc.

Cases: Antitrust IllinoisNews