Tundra, Inc. v. Faire Wholesale, Inc.

Background

This was a closed antitrust case. Tundra filed its original complaint on May 23, 2023. The court dismissed that complaint but allowed Tundra to amend. After Tundra filed an amended complaint, Faire moved to dismiss it. The court granted Faire’s motion and dismissed the amended complaint with prejudice, meaning the case could not proceed through another amendment.

Tundra’s amended complaint relied mainly on a clause in Faire’s terms of service that Tundra said created an exclusive-dealing arrangement. Tundra also argued that the arrangement could operate as exclusive dealing in practice even though the written terms allowed termination on short notice. Tundra relied on decisions from outside the Ninth Circuit in support of that theory.

Rule 59(e) analysis

Tundra moved under Federal Rule of Civil Procedure 59(e), which allows a party to ask the court to alter or amend a judgment. The court described this as an extraordinary remedy that is generally unavailable for repeating earlier arguments. Relief may be appropriate for a clear error of law or fact, newly discovered evidence, manifest injustice, or an intervening change in controlling law.

Tundra argued that the court had made an improper factual finding that Faire users could easily terminate their relationships with Faire. The court rejected that argument because the Retailer and Wholesaler Terms, which Tundra relied on in its complaint, both contained unambiguous language allowing customers to terminate their relationships with Faire at any time. The court stated that it was not required to accept allegations that contradicted documents incorporated into the complaint.

The court also rejected Tundra’s challenge to its treatment of Tundra’s in-practice exclusive-dealing theory. The earlier order had found that Tundra’s allegations did not show the recognized features of that theory and that Tundra had not cited Ninth Circuit authority supporting it. The court concluded that Tundra’s reconsideration motion repeated arguments previously presented and attempted to retreat from a theory Tundra had raised in opposing Faire’s dismissal motion. The court further stated that Ninth Circuit law rejected the theory unless an antitrust plaintiff showed certain forms of coercion, which Tundra had not alleged.

The court also upheld its decision to dismiss with prejudice rather than allow another amendment. It reasoned that Tundra’s legal theory was not recognized in the Ninth Circuit, so the claims failed as a matter of law and could not plausibly be corrected through amendment.

Rule 60(b) analysis and disposition

Rule 60(b) permits relief from a final judgment for reasons including mistake, inadvertence, excusable neglect, newly discovered evidence, fraud, a void judgment, satisfaction of the judgment, or another reason justifying relief. Tundra relied on mistake or inadvertence and on the catchall provision for another justifying reason.

The court concluded that Tundra had not shown the clear error required for reconsideration. It therefore denied Tundra’s request to vacate the judgment under Rule 60(b) and denied Tundra’s motion for reconsideration. The prior dismissal of Tundra’s amended complaint with prejudice remained in place.