A federal court in Illinois granted Juul Labs, Inc. and HS Wholesale, Ltd.’s motion to dismiss Power Buying Dealers USA, Inc.’s claims of price discrimination. Power Buying Dealers USA, Inc. v. Juul Labs, Inc., 2025 WL 1582426 (N.D. Ill. June 4, 2025).
HS Wholesale and Power Buying Dealers operated competing distribution companies that distributed Juul’s e-cigarette products. Power Buying Dealers sued both Juul and HS Wholesale alleging that Juul’s offering of a greater allocation of certain products, discounts, rebates, and credits to HS Wholesale constituted “secondary-line” price discrimination under the Robinson-Patman Act, which occur when favored customers of a supplier are given a price advantage over other customers.
In discovery, a magistrate judge had concluded that discovery into nationwide sales was overly broad, burdensome, and not proportional to the needs of the case and instead limited the parties to focus on sales occurring in northern Illinois, where Power Buying Dealers had claimed it was harmed concluded. After discovery, Power Buying Dealers amended its complaint for a third time, omitting previous references to harms that occurred in specific geographic areas, including northern Illinois. Juul and HS Wholesale moved to dismiss, claiming that the amended complaint omitted the required relevant geographic market in which the distributors competed for customers. The court granted the motion, holding a claimant must plead a geographic market in which it suffered competitive injury to sufficiently state a secondary-line discrimination claim because a plaintiff must show that, as of the time the price differential was imposed, the favored and disfavored purchasers competed for the same customers in the same geographic market. The court noted that “[a] plaintiff amends its complaint at its own risk,” and it was not enough to argue that the defendants were aware from previous discovery what the relevant geographic market was because “[t]he pleadings must stand on their own.” Because it had previously stated that it would not allow further amendments, the court granted the motion to dismiss with prejudice.
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