NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS JUL 28 2020
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
TAMARA MOORE; et al., No. 18-15026
Plaintiffs-Appellants, D.C. No. 3:16-cv-07001-MMC
v.
MEMORANDUM*
MARS PETCARE US, INC.; et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of California
Maxine M. Chesney, District Judge, Presiding
Argued and Submitted July 19, 2019
San Francisco, California
Before: M. MURPHY,** PAEZ, and RAWLINSON, Circuit Judges.
Plaintiffs Tamara Moore and five other California residents (collectively,
“Plaintiffs”) appeal the district court’s dismissal of their federal antitrust claim
brought under Section 1 of the Sherman Act, 15 U.S.C. § 1. We have jurisdiction
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable Michael R. Murphy, United States Circuit Judge for
the U.S. Court of Appeals for the Tenth Circuit, sitting by designation.
under 28 U.S.C. § 1291, and, reviewing de novo, we affirm.1
We agree with the district court that Plaintiffs have not adequately pleaded
that defendants—a collection of pet food manufacturers, veterinary clinic chains,
and a pet goods retailer (collectively, “Defendants”)2—engaged in an unlawful
conspiracy. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 553 (2007); In re
Musical Instruments & Equip. Antitrust Litig., 798 F.3d 1186, 1193–97 (9th Cir.
2015); Kendall v. Visa U.S.A., Inc., 518 F.3d 1042, 1049 (9th Cir. 2008). Plaintiffs
fail plausibly to allege—as they must do to survive a motion to dismiss under
Federal Rule of Civil Procedure 12(b)(6)—that Defendants entered into an
“agreement” that unreasonably restrained trade. Twombly, 550 U.S. at 553;
Musical Instruments, 798 F.3d at 1191.
As an initial matter, Plaintiffs lack direct evidence, as they conceded in the
district court, that Defendants conspired to perpetuate a fraudulent scheme of
imposing a prescription requirement to buy certain pet food produced and
1
In a separately filed opinion, we address Plaintiffs’ state law claims alleging
violations of California’s Unfair Competition Law, Cal. Bus. & Prof. Code
§ 17200, et seq.; California’s False Advertising Law, Cal. Bus. & Prof. Code
§ 17500, et seq.; and California’s Consumer Legal Remedies Act, Cal. Civ. Code
§ 1750, et seq.
2
Specifically, Defendants consist of pet food manufacturers, Mars Petcare US, Inc.
and Royal Canin U.S.A., Inc. (collectively “Mars”), Nestle Purina Petcare
Company (“Purina”), and Hill’s Pet Nutrition, Inc. (“Hill’s”) (collectively,
“Defendant Manufacturers”); veterinary clinic chains, Medical Management
International, Inc. d/b/a Banfield Pet Hospital (“Banfield”) and BluePearl Vet,
LLC (“Blue Pearl”); and pet goods retailer, PetSmart, Inc. (“PetSmart”).
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marketed by Defendant Manufacturers. On appeal, Plaintiffs have distanced
themselves from their concession and now argue that Defendants entered into a
“combination.” That assertion is, at best, conclusory. See Twombly, 550 U.S. at
557.
Plaintiffs also fail to allege enough so-called “plus factors” beyond parallel
business behavior to show a “meeting of the minds.” Musical Instruments, 798
F.3d at 1193 (quoting Twombly, 550 U.S. at 557, 560). They appear to allege, for
example, that Defendants shared a common motive—sustaining higher prices of
prescription pet food—to conspire with one another. But we have rejected
common motive as a plus factor to show an agreement, id. at 1194–95, particularly
when there are “obvious alternative explanation[s]” for Defendants’ actions or
conduct, see Eclectic Props. E., LLC v. Marcus & Millichap Co., 751 F.3d 990,
996 (9th Cir. 2014) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 682 (2009)).
Plaintiffs’ allegations provide several alternative explanations: they allege that
there are “significant barriers to entry” in the prescription pet food market because
it requires “substantial research and development expertise and investment, the
ability to reach veterinary clinics through a separate sales force and distribution
network,” and “compliance with FDA regulatory requirements and processes.”
The higher costs of prescription pet food may therefore be a market reflection of
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the high amount of investment necessary to develop such products and enter the
market.
Plaintiffs also argue the Defendant Manufacturers acted against their self-
interest by not whistle-blowing on each other and by responding in the same
manner to the FDA’s draft Compliance Policy Guide (“CPG”) and final CPG. We
disagree. The FDA encourages the role of the vet in the prescription pet food
process, and the FDA has not yet brought actions against Defendant
Manufacturers’ marketing practices despite their alleged violations of three of the
listed conditions in the FDA’s final CPG. Similarly, Defendants’ response to the
draft CPG and continued behavior after the final CPG do not seem illogical given
that other professional organizations in the field communicated to the FDA their
support for the role of vets in supervision over consumption of prescription pet
food. See Name.Space, Inc. v. Internet Corp. for Assigned Names & Numbers, 795
F.3d 1124, 1130 (9th Cir. 2015).
The main problem with Plaintiffs’ conspiracy theory, however, is that they
do not explain or account for the role of other players in the market. See Musical
Instruments, 798 F.3d at 1198. For instance, Plaintiffs acknowledge that three
other companies produce prescription pet food for a much smaller share of the
market, but do not allege whether those competitors market their product in a
manner similar to Defendant Manufacturers, charge similarly higher prices, or
4
require a prescription as a condition of purchase. Plaintiffs’ theory about Banfield
and Blue Pearl’s role in the prescription process also overlooks the fact that they
constitute only seven percent of vets across the country, leaving over ninety
percent of other vets who may also prescribe the prescription pet food that
Defendant Manufacturers make. Plaintiffs acknowledge that PetSmart and
Banfield accept prescriptions from vets outside of their network. Given that these
other players also produce, sell, and prescribe prescription pet food, their
behavior—insofar as it is like that of Defendants—provides a market-based reason
for what Plaintiffs allege to be a conspiracy.
Thus, we affirm the district court’s conclusion that Plaintiffs’ allegations
“have not nudged their [Sherman Act] claim[] across the line from conceivable to
plausible.” See Twombly, 550 U.S. at 570.
AFFIRMED.
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