Northern District of Ohio federal judge John Adams denied Checkpoint Systems Inc. motion to dismiss Universal Surveillance Systems’ complaint because the allegations adequately alleged that the defendant’s anti-competitive behavior drove up prices for security tags. Checkpoint, a leading supplier of security labels, argued that the Twombly pleading standards require plaintiffs to specifically identify the lost profits suffered because of alleged antitrust activity. Judge Adams rejected that position, holding that USS does not need to individually name the other competitors that have been injured.
The lawsuit alleges that Checkpoint controls 80 percent of the market for electronic article surveillance tags and has suppressed competition through unfair, long-term and exclusive distribution agreements and bundling of its security labels and tags with its EAS monitoring towers. USS rejected the agreement that Checkpoint offered it, which would allow Checkpoint to distribute USS products but would prohibit USS from selling any competing goods to Checkpoint customers.
Checkpoint argued that the complaint did not plead customer names, the durations of the exclusive distribution contracts, and other details needed to state viable antitrust claims. The court, however, ruled that even without those details, the suit goes “well beyond” the heightened standards under Twombly because it specifically describes the type of contracts and their effect in the market.