The Sixth Circuit revived an antitrust suit brought by Tennessee carpet dealer Watson Carpet & Floor Covering Inc. alleging rival dealer Carpet Den Inc. and supplier Mohawk Industries Inc. have conspired for more than a decade to force Watson out of business.
The appeals court reversed the lower court’s ruling that Watson Carpet had failed to state a claim under the standard described by the Supreme Court in Bell Atlantic Corp. v. Twombly, finding instead that Watson Carpet had adequately pled its case by specifically alleging both an agreement to restrain trade and later acts that furthered the conspiracy.
The Sixth Circuit also found that Watson Carpet’s complaint sufficiently alleged a connection between an original conspiracy to force Watson out of business and later refusals by Mohawk to sell carpet to Watson. The appeals court held that a previous settlement Watson had reached with Carpet Den in a state court refusal-to-sell case did not bar its assertion of claims against Carpet Den based on Mohawk’s later refusal to sell. The court stated that the dealer could remain liable as co-conspirator with Mohawk because it “did not withdraw from the conspiracy . . . and conspiracies are presumptively ongoing.”