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S&W Forest Products Ltd v. Shake

United States District Court, W.D. Washington, Seattle

August 7, 2019

S&W FOREST PRODUCTS LTD, Plaintiff,
v.
CEDAR SHAKE & SHINGLE BUREAU, et al., Defendants.

          ORDER ON MOTIONS TO DISMISS

          Marsha J. Pechman United States Senior District Judge.

         The above entitled Court, having received and reviewed:

         1. Defendants' Motions to Dismiss (Dkt. Nos. 87, 88, 89), 2. Plaintiff's Responses to Motions to Dismiss (Dkt. Nos. 94, 95), 3. Defendants' Replies in Support of Motions to Dismiss (Dkt. Nos. 97, 99, 100), all supporting declarations and exhibits, and relevant portions of the record, rules as follows:

         IT IS ORDERED that Defendant Waldun Forest Products Ltd.'s FRCP 12(b)(2) motion is DENIED.

         IT IS ORDERED that the FRCP 12(b)(6) motions to dismiss the Sherman Act claim against all Defendants are GRANTED.

         IT IS FURTHER ORDERED that the motion to dismiss the breach of contract claim against Defendant Cedar Shake & Shingle Bureau is DENIED.

         Background[1]

         Defendant Cedar Shake & Shingle Bureau (“CSSB”) is the only trade association serving the cedar shake and shingle industry. ¶ 19. The organization created, promotes and regulates its “Certi-Label”™ labeling program, a quality control rating which grades different varieties of shakes and shingles, and which Plaintiff alleges has become the standard in the “high-end” cedar shake and shingle market. ¶¶ 2, 3.

         Co-Defendants Waldun Forest Products Ltd. (“Waldun”) and Anbrook Industries Ltd. (“Anbrook”) are two of the largest mills in the industry and Plaintiff alleges that they have led a consortium of the larger cedar shake and shingle member mills through a series of maneuvers within CSSB intended to consolidate their power, fix prices on their products, and eliminate bureau members attempting to price their products more competitively. ¶ 6. In a section of the FAC labeled “The CSSB/Waldun/Anbrook Conspiracy to Restrain Trade, ” Plaintiff alleges a series of “anticompetitive actions” which include reducing the number of Board members, defeating both term limits on CSSB directors and attempts to eliminate the weighted voting system which favors the higher-producing mills, and granting the Board chair (currently the president and CEO of Anbrook) the right to vote on all matters (instead of only voting to break ties). ¶ 28.

         According to Plaintiff, this anti-competitive conspiracy culminated in the “recusal” of its representative from the Bureau's Board of Directors and the company's illegal termination from the CSSB on December 21, 2018, an action which Plaintiff alleges was undertaken under false pretenses and in violation of the Membership Agreement and the Bureau's bylaws. ¶¶ 29-41. That termination was preceded by a December 5, 2018 statement allegedly made by Curtis Walker (president and CEO of Waldun) to a third party that “CSSB member mills should hold their prices at consistent levels” and that “we just need to get rid of [the head of S&W].” ¶ 38.

         Plaintiff has filed suit against all three Defendants for a violation of § 1 of the Sherman Act (a conspiracy in restraint of trade), and against Defendant CSSB for breach of contract related to its removal from the trade association. The complaint was originally filed on February 13, 2019 (Dkt. No. 1); Plaintiff later filed a First Amended Complaint (“FAC;” Dkt. No. 68) which is the subject of these dismissal motions. All three Defendants move for dismissal under FRCP 12(b)(6); co-Defendants Anbrook and Waldun have joined in CSSB's motion in addition to filing their own. Defendant Waldun also asserts a FRCP 12(b)(2) claim that this Court lacks personal jurisdiction over it.

         Discussion

         Standard of review

         Under FRCP 12(b)(6), the Court may dismiss a complaint for "failure to state a claim upon which relief can be granted." In ruling on a motion to dismiss, the Court must construe the complaint in the light most favorable to the non-moving party. Livid Holdings Ltd. v. Salomon Smith Barney, Inc., 416 F.3d 940, 946 (9th Cir. 2005). The Court must accept all well-pleaded allegations of material fact as true and draw all reasonable inferences in favor of the plaintiff. Wyler Summit P'ship v. Turner Broad. Sys., 135 F.3d 658, 661 (9th Cir. 1998).

         Dismissal is appropriate where a complaint fails to allege "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is plausible on its face "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Aschcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). As a result, a complaint must contain "more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555.

         Timeliness

         Preliminarily, the Court must address Plaintiff's claim that neither of the motions to dismiss filed by Anbrook or Waldun are “timely.” FRCP 15(a)(3) requires an answer or responsive pleading within 14 days of the filing of a complaint. In ruling on Plaintiff's earlier request for a preliminary injunction against CSSB, the Court extended the responsive deadline to 30 days from the date of the ruling (see Dkt. No. 62), a ruling which Plaintiff contends only pertained to CSSB. The motions to dismiss from co-Defendants Anbrook and Waldun were filed 20 days after the filing of Plaintiff's FAC and Plaintiff argues that the Court should strike the motions based on the six-day delay.

         The request is denied. Waldun and Anbrook maintain that they thought the extension applied to them as well; Plaintiff's only evidence to the contrary is a minute entry in the docket stating that “Defendant's [singular] answer or response to Plaintiff's complaint due 30 days following the issuance of this ruling.” Id. The Court does not consider this definitive proof of Plaintiff's argument; it is neither a transcript of the Court's oral ruling nor a written order. A six-day filing delay, even if based on a misunderstanding, should not determine a substantive motion such as this.

         FRCP 12(b)(2): Personal jurisdiction (Waldun only)

         Plaintiff makes no argument that there is general jurisdiction over Waldun; i.e., the company is neither incorporated in Washington nor has its principle place of business in the state.

         Plaintiff does assert that the Court has specific jurisdiction over Waldun, however, an assertion which requires it to establish that:

         1. Waldun “purposely directed activities” at the forum or availed itself of the privilege of conducting business here;

         2. Its claim against Waldun “arises out of or relates to Defendant's forum-related activities;”

         3. The exercise of jurisdiction “comports with fair play and substantial justice.”

         Brayton Purcell LLP v. Recordon & Recordon, 606 F.3d 1124, ...


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