UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA OCALA DIVISION CONTRACTOR TOOL SUPPLY, INC., Plaintiff, v. Case No. 5:24-cv-347-JA-PRL JPW INDUSTRIES, INC., Defendant.

ORDER This case is before the Court on Defendant’s motion to dismiss (Doc. 16) and Plaintiffs amended response (Doc. 23). Based on the Court’s review of the parties’ submissions, the motion must be granted.

I, BACKGROUND Plaintiff, Contractor Tool Supply, Inc. (CTS), is a distributor of specialized woodworking and metalworking tools alleging unlawful trade practices by a prominent manufacturer of those tools Defendant, JPW Industries, Inc. (JPW). (Compl., Doc. ^[2]). JPW manufactures several brands of specialty tools including the brands Axiom, Baileigh, Edwards, J ET, Powermatic, and Wilton—and CTS was among its top distributors for years. (Id. {{ 11-13, 39). As a distributor, CTS’s business model is to purchase tools directly from manufacturers such as

JPW and resell them through its brick-and-mortar store location, its onlin store, and its Vera Tools Storefront on Amazon.com. Ud. 4 18, 21-24). JPV granted CTS “Preferred Vendor Status” in the autumn of 2021, meaning tha JPW agreed to provide CTS with favorable trading terms so long as CTS me certain volume requirements. (dd. {| 32). The relationship initially successful, and CTS became the third largest source of sales for JPW. (Id 7 35-39). In an effort to “protect the reputation and value” of its brands, JPV instituted a Minimum Advertised Price (MAP) policy, meaning that resellers o JPW’s tools were prohibited from advertising those tools for sale below a price point defined by JPW. (Id. 44] 26-27; Doc. 16-1 at 3). The MAP policy is referenced in the Complaint and attached as an exhibit to JPW’s motion (Compl. 9] 55, 57, 84; Doc. 16-1). In light of the pleadings and the parties briefings on the motion to dismiss, the Court finds the MAP policy is “(1) central to the plaintiffs claims[] and (2) undisputed, meaning that its authenticity is not challenged.” Johnson v. City of Atlanta, 107 F.4th 1292, 1300 (11th Cir. 2024). It therefore may be considered at this stage of the case. See id. at 1300- Ql. As relevant here, the MAP policy provides as follows: The use of any language on the digital space to direct the customer to the shopping cart for actual selling price is limited to: “We offer the best prices”, “Call for

Price”, “Call with any questions”, “Call for additional questions related to the product”... . Unacceptable language can be defined as “Price too low to display” “See Price in Cart”, “Add to Shopping Cart to See Price”, etc., and are all violations of the MAP policy. (Doc. 16-1 at 4). Nevertheless, CTS employed an “aggressive marketing strategy on Amazon. (Compl. § 44). For customers not logged into an account who searched for a tool covered under the MAP policy, CTS listed nx price at all and instead prompted the customer to see the price displayed in ths online shopping cart. (Id. § 29). And for customers logged into an Amazor account CTS advertised the price set by the MAP policy but provided a lowe: price once the customer added the item to their online shopping cart. (Id. J 28) Even though CTS is permitted to sell JPW’s brands of tools on Amazon’s website, Amazon itself also sells JPW’s tools and is therefore a competitor of! CTS. Ud. J 25). Amazon allegedly became frustrated by CTS’s sales tactics, and Amazon’s representatives met with JPW to discuss ways “to prevent CTS from selling in a manner that put pressure on Amazon and J PW’s margins.” (Id. {| 46). Amazon and JPW allegedly agreed that JPW would “charge new fees to CTS that were not imposed on Amazon and other distributors[] and prevent CTS from selling JPW’s products at prices lower than the advertised prices.” (Id. { 47). Based on this alleged agreement with Amazon, JPW’s representatives sent CTS email correspondence on March 11, 2024, stating that: (1) CTS’s “Price in Cart” discounts violate the MAP policy; (2) additional fees for credit card

payments would be imposed; (3) rebate to sales generated through CTS’s brick and-mortar store would be limited; (4) JPW would adjust rebates and sales goal for CTS; (5) CTS should strive to generate less than five percent of its sale through Amazon; (6) CTS’s Amazon storefront should be managed by JPW’ eCommerce team; and (7) CTS should not sell or stock through Amazon. (Id |] 55-63). CTS rejected these proposed terms and JPW thereafter ceased fillins CTS’s orders for its products. (Id. {| 64-65). CTS alleges that the agreement between JPW and Amazon and the enforcement of the MAP policy constitute unreasonable restraints on trade. Tx that end, it seeks damages and injunctive relief under the Sherman Act, U.S.C. § 1 (Count II); the Robinson-Patman Act, 15 U.S.C. § 18 (Count IID; the Florida Deceptive and Unfair Trade Practices Act, §§ 501.201-501.213, Florids Statutes (Count IV); and the Florida Antitrust Act, § 542.18, Florida Statute: (Count V).1

II. LEGAL STANDARD “A pleading that states a claim for relief must contain... a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). “[D]etailed factual allegations” are not required, but “[a] pleading that offers ‘labels and conclusions’ or ‘a formulaic recitation of the (7th Cir. 1982)). Because quantifying a company’s “market power” ; “conceptually difficult,” courts often look to reliable indicia of market power- including market share and product differentiation—when undertaking thi analysis. Id. Here, the Complaint alleges JPW has “significant market powe throughout the United States as the parent company for the multiple bran names of the Products.” (Compl. § 14). But without allegations of produc differentiation, JPW’s market share, or specific factual allegations suggestin “restricted output and supercompetitive prices,” the Complaint falls flat Jacobs, 626 F.3d at 1340 (quoting Rebel Oil, 51 F.3d at 1434). CTS cites Graphic Products Distributors, Inc. for the proposition that ai antitrust plaintiff “satisf[ies] their burden of showing substantial market powe by alleging the imposition of vertical restraints on distributors.” (Doc. 28 at 1 (citing 717 F.2d at 1571)). But the Graphic Products Distributors court did no state that an antitrust plaintiff discharges their burden of showing the defendant’s market power merely by alleging the imposition of vertica restraints on distributors. When considered in context, it is clear that ths Graphics Products Distributors court found that the plaintiffs allegation that the defendant had market power at the time it imposed vertical price restraint: was sufficient in light of the plaintiffs specific factual allegations pertaining t« the defendant’s market share and product differentiation. See id. at 1570-71.

Next, the Complaint “is bereft of the critical allegations linking [JPW] market power to harm to competition.” Jd. Indeed, the Complaint does nc plausibly allege that competitors have reacted to the allegedly higher prices JPW’s tools, nor does the Complaint specifically allege marketwide increases i price or reduced output. In the absence of these types of factual allegation linking JPW’s market power to harm to competition in the market, CTS fails t state a claim.

B. Robinson-Patman Act Claim CTS alleges JPW engaged in unlawful price fixing under the Robinson Patman Act, 15 U.S.C. § 13. The elements of a price discrimination claim unde the Robinson-Patman Act are “1) that the defendant discriminated in price discounts, or services between purchasers of commodities of like grade an quality in the course of interstate commerce; 2) that the price discriminatio1 resulted in the requisite injury to competition or competitors; and 3) at least th approximate amount of damages.” Walker v. Hallmark Cards, Inc., 992 F. Supp 1335, 1338 (M.D. Fla. 1997) (citing Chrysler Credit Corp. v. J. Truett Payne Co Inc., 670 F.2d 575, 578 (5th Cir.1982)); see also McGahee v. N. Propane Gas Co. 858 F.2d 1487, 1493 (11th Cir. 1988). “Price discrimination is not per s violative of the [Robinson-Patman Act]” the plaintiff must also show “some sor of real competitive injury.” Id. (citing Foremost Dairies, Inc. v. FTC, 348 F.2¢ 674, 679 (5th Cir. 1965), and DeLong Equip. Co. v. Washington Mills Electr Minerals Corp., 990 F.2d 1186, 1202 (11th Cir. 1993)). And the injury must b “causally connected to the alleged antitrust violation.” Id. (citing Alan’s Atlanta, Inc. v. Minolta Corp., 903 F.2d 1414, 1426-27 (11th Cir. 1990)). In the Complaint, CTS alleges that JPW “unlawfully discriminates in th pricing of the Products between different purchasers, such as CTS and Amazor (Compl. 97), by “allow[ing] Amazon to advertise and sell [its products] a prices below that which JPW permits .. . CTS[] to advertise and sell” it products, (id. § 100); that these products are of “like grade and quality,” (a {| 99); and that “no legal justification” exists for JPW’s discriminatory pricing (id. § 103). CTS claims that it “has suffered and continues to suffer actua damages as a direct and proximate result of JPW’s discriminatory pricing of thi Products, including without limitation monetary losses .. . over $1,000,000.00 Ud. | 65, 94). These conclusory allegations that JPW engaged in discriminatory pricing are not sufficient to state a claim under the Robinson Patman Act. As an initial matter, a price discrimination claim that does no even indicate the products or prices at issue “fail[s] to provide [a defendant] witl adequate notice of the basis for the claim.” Pentair Filtration Sols., LLC v Superior Water Sys. Co., No. 12-62163-CIV, 2013 WL 12091626, at *4 (S.D. Fla Nov. 14, 2013). CTS is not required to plead “with exactitude,” but th Complaint still must be “supported by facts constituting a legitimate claim fo relief.” Tires Inc. of Broward v. Goodyear Tire & Rubber Co., 295 F. Supp. 2 1349, 1352 (S.D. Fla. 2003) (quoting Mun. Utils. Bd. of Albertville v. Ala. Powe Co., 934 F.2d 1493, 1501 (11th Cir.1991)). At a minimum, CTS must adequate notice of the kind of price discrimination and the range of [tools] c like grade and quality” that are implicated in the Robinson-Patman Act claim Id, at 1353 (citing United Mag. Co. v. Murdoch Mag. Distrib., Inc., 146 F. Supy 2d 385, 395 (S.D.N.Y. 2001)). CTS has also not adequately alleged that JPW’ practices have plausibly caused an injury to competition. Because CTS ha failed to satisfy these minimum pleading thresholds, this claim must also dismissed.

C. State Law Claims Having found that CTS’s claims under the Sherman Act and th Robinson-Patman Act must be dismissed, the Court must also dismiss CTS’. state law claims under the Florida Deceptive and Unfair Trade Practices Ac and the Florida Antitrust Act. See All Care Nursing Serv., Inc. v. High Tecl Staffing Servs., Inc., 135 F.3d 740, 745 n. 11 (11th Cir. 1998) (“Federal anc Florida antitrust laws are analyzed under the same rules and case se also St. Petersburg Yacht Charters, Inc. v. Morgan Yacht, Inc., 457 So. 2d 1028 1032 (Fla. 2d DCA 1984) ( “[T]he Florida legislature has, in effect, adopted a: the law of Florida the body of antitrust law developed by the federal court under the Sherman Act.”); § 542.16, Fla. Stat.

IV. CONCLUSION For the reasons given above, it is ORDERED that Defendant’s Motion t Dismiss (Doc. 16) is GRANTED. The Complaint (Doc. 2) is DISMISSEI without prejudice. Plaintiff may file an amended complaint on or befor January 10, 2025. DONE and ORDERED in Orlando, Florida, on December ft, 2024, |

Co . , ( HN ANTOON II United States District Judge Copies furnished to: Counsel of Record

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