In re Disposable Contact Lens Antitrust (215 F. Supp. 3d 1272, 2016)

ORDER

HARVEY E. SCHLESINGER, United States District Judge

Starting in June 2013, Defendant contact lens manufacturers, Aleon Laboratories, Inc. (“Alcon”), Johnson & Johnson Vision Care, Inc. (“JJVC”), Bausch & Lomb Inc. (“B&L”), and CooperVision, Inc. (“CV”) (collectively “Manufacturer Defendants”) imposed mandatory minimum prices on a number of disposable contact lens products. Plaintiffs, who are consumers of disposable contact lenses, have sued the Manufacturer Defendants and distributor ABB Concise Optical Group, LLC (“ABB”), alleging that Defendants’ conduct violates Section 1 of the Sherman Antitrust Act, and various state statutes. This multi-district litigation (“MDL”) class action antitrust case is before the Court on Manufacturer Defendants’ Motion and Memorandum of Law in Support of Their Motion to Dismiss Plaintiffs’ Corrected Consolidated Class Action Complaint (Doc. 145; Manufacturers’ Motion), and Defendant ABB'Optical Group’s Motion to Dismiss Plaintiffs’ Corrected Consolidated Class Action Complaint and Memorandum of Law in Support of Same. (Doc. 146; ABB’s Motion). Plaintiffs filed Plaintiffs’ Omnibus Memorandum in Opposition to Defendants’ Motions to Dismiss. (Doc. 185; Plaintiffs’ Response). The Manufacturer Defendants filed a Reply Memorandum of Law in Support of Their Motion to Dismiss Plaintiffs’ Corrected Consolidated Class Action Complaint (Doc. 191; Manufacturers’ Reply), and ABB filed Defendant Optical Group’s Reply in Support of Motion to Dismiss Plaintiffs’ Corrected Consolidated Class Action Complaint and Memorandum of Law in Support of Same. (Doc. 190; ABB’s Reply). The Court heard argument of counsel regarding the Motions at a hearing, conducted on March 31, 2016, the record of which is incorporated herein. See (Doc. 210; Clerk’s Minutes); (Doc. 214; Transcript).

I. Background

This multidistrict antitrust litigation was centralized before this Court on June 10, 2015, by order of the United States Judicial Panel on Multidistrict Litigation (“MDL Panel”). (Doc. 1; Transfer Order). It arises out of pricing policies adopted by contact lens manufacturers with regard to the distribution and sale of certain contact lens products. The operative complaint, Plaintiffs’ Corrected Consolidated Class Action Complaint (Doc. 135; Complaint), filed on November 23, 2015, is a six-count Complaint brought by fourteen individual Plaintiffs suing on behalf of themselves, and on behalf of a class of Plaintiffs consisting of “all persons and entities in the United States who made a retail purchase ... of disposable contact lenses (“contact lenses”) manufactured by [the Manufacturer Defendants] ... subject to one of the ‘Unilateral Pricing Policies’ (‘UPPs’) described herein from June I, 2013 to the present.” Complaint ¶ 1: see also id. ¶¶ 42-45, 48. The individual Plaintiffs (“Plaintiffs”) are: Rachel Berg, Miriam Pardoll, Elyse Ulino, Jennifer Sineni, Susan Gordon, Cora Beth Smith, Brett Watson, Kathleen Schirf, Tamara O’Brien, John Machikawa, Amanda Cunha, Alexis Ito, Catherine Dingle, and Sheryl Marcan. Complaint ¶¶ 28-41.

II. The Complaint

A. Introduction

The focus of Plaintiffs’ claims is the implementation and enforcement of “Unilateral Pricing Policies” (“UPPs”) adopted and enforced by the Manufacturer Defendants, as they apply to the market for disposable (soft) contact lenses (“contact lenses”). Disposable contact lenses comprise 90% of the contact lenses sold in the United States. See Complaint ¶ 64. Plaintiffs characterize these pricing policies as a “minimum resale price maintenance scheme” (“MRPM”). Complaint ¶ 9. For ease of reference, and without passing judgment on the import of the name, the Court will refer to these pricing policies as “UPPs.” When considering a motion to dismiss, “the court is limited to what appears on the face of the complaint.” Jacobs v. Tempur-Pedic Int’l, Inc., 626 F.3d 1327, 1340 (11th Cir. 2010). The Court must accept all factual allegations in the Complaint as true, consider the allegations in the light most favorable to the Plaintiffs, and accept all reasonable inferences that can be drawn from such allegations. Hill v. White, 321 F.3d 1334, 1335 (11th Cir. 2003); Jackson v. Okaloosa Cty., Fla., 21 F.3d 1531, 1534 (11th Cir. 1994). The facts recited here are drawn from the Complaint, which may well differ from those that ultimately could be proved.

Plaintiffs allege that

the Manufacturer Defendants conspired with each other and with Defendant [ABB], a wholesaler, as well as independent eye care professionals (“ECPs”) (e.g. optometrists and ophthalmologists who sell contact lenses to consumers) and their trade association, the American Optometric Association (“AOA”), to impose minimum resale prices on certain contact lens lines by subjecting them to UPPs, thereby reducing or eliminating price competition on those products from “big box” stores..., buying clubs ..., and internet based retailers ... (collectively, “Discount Retailers”) by preventing them from discounting those products.

Complaint ¶ 2. Plaintiffs further allege that “the Manufacturer Defendants, working with ABB, conspired to eliminate discounting of contact lenses by ensuring that all retailers charged the same minimum price.” Id. ¶ 3.

The backdrop for the UPPs is the unique construct of the contact lens industry, where ECPs both prescribe and sell a specific contact lens and brand to consumers. Plaintiffs allege that:

5. Competition in the market for contact lenses in the United States is distorted by the unique role played by ECPs. Unlike prescription drugs, which are prescribed by doctors but sold only by pharmacies, ECPs both prescribe and sell contact lenses. When an ECP writes a prescription for a patient, that ECP prescribes not only the type and power of the lenses, but also the particular brand. Unless the patient comes back for another eye examination, or switches ECPs, he or she has to buy the prescribed brand of lenses for the length of the prescription, typically from one to two years.

6. The power to prescribe makes ECPs the gatekeepers of the disposable contact lens market. ECPs have the power and the economic incentive to prescribe lenses that provide them the largest profit margins. Contact lens manufacturers understand these incentives all too well. ECPs will refuse to prescribe a manufacturer’s lenses if their profit margins are undercut by efficient retailers such as the Discount Retailers. ... The economic purpose of the UPPs is to insulate ECPs from price competition from the more efficient distributors, such as the Discount Retailers.

Complaint ¶¶ 5, 6; see also id. ¶ 65.

Plaintiffs allege a complex “interwoven” conspiracy in which

ABB worked with the Manufacturer Defendants to develop UPPs for several of the most advanced and/or most popular lines of contact lenses sold by the Manufacturer Defendants. Over the course of 15 months commencing in June of 2013, each Manufacturer Defendant implemented this strategy in the form of a [UPP] ... [promulgating] a minimum retail price for its affected product(s) and threatening] to curtail the supply of some of its contact lens lines to retailers who sell below the mandated price.

Complaint ¶ 9. “The Manufacturer Defendants agreed to limit retail price competition only after extensive consultation with independent ECPs and their agent ABB.” Id. ¶11.

Plaintiffs allege that the UPPs harm competition by increasing prices for contact lenses subject to the UPPs, and depriving consumers of the ability to shop around for retail discounts on contact lenses. Id. 1T159. For example, the price of JJVC affected products rose between 40% and 112% from the lowest internet price prior to the implementation of UPPs, to the post-UPP price. Id. ¶ 160. Other brands also experienced significant price increases. Id. ¶¶ 163-69 (recounting specific price increases by Manufacturer Defendants). The UPPs have been estimated to cost consumers as much as an extra $2 billion annually. Id. ¶ 170. The adverse impact to consumers has been the subject of Congressional hearings, see id. ¶ 171, and state inquiries. See id. ¶¶ 147,170.

B. THE UPPs

UPPs prohibit contact lens retailers from offering discounts on the covered products, where the discounted price would be below the UPP price. Complaint ¶ 105. Carol Alexander (“Alexander”), Director of Professional Affairs at JJVC, has stated publically that the UPPs “represent ‘a significant change from traditional contact lens pricing policies,’ ” and constitute a “ ‘Fundamental Shift to the optical industry.’ ” Complaint ¶ 113. See also id. ¶ 117 (UPPs represent “ ‘one of the monumental changes in contact lenses,’ ” according to an ECP who is also a consultant for Manufacturer Defendants).

The first UPP was announced by Alcon in June 2013, for its DAILIES TOTAL I® product. Alcon extended the UPP in January 2014, to two other products, DAILIES® AquaComfort Plus® Multifocal, and DAILIES® AquaComfort Plus® Toric contact lenses. Complaint ¶ 97; see also id. ¶ 9. Then in June 2014, Alcon extended a UPP to a fourth product, AIR OPTIX® COLORS contact lenses. Id ¶ 97.

In February 2014, B&L implemented a UPP for its ULTRAtm line of contact lenses, and in June 2014, B&L imposed a UPP on its Biotruc® ONEday for Presbopia lenses. Complaint ¶ 98.

In June, 2014, JJVC announced UPPs for a number of contact lens products: 1-Day ACUVUE® MOIST®; 1-Day ACU-VUE® MOIST® for ASTIGMATISM; 1-Day ACUVUE® TruEye®; ACUVUE® OASYS® with HYDRACLEAR®; ACU-VUE® OASYS® for ASTIGMATISM; and ACUVUE® OASYS® for PRESBYOPIA. These policies became effective on July 1, 2014 for a six-month supply of ACUVUE® OASYS® with HYDRA-CLEAR® and on August 1, 2014 for the remaining contact lens lines. Complaint ¶ 99. “At the same time, JJVC announced that it would discontinue contact lens lines that would not be subject to a UPP.” Id. “According to JJVC, its UPP will impact roughly 9.66 million consumers or 69% of the 14 million consumers of JJVC contact lenses.” Id. ¶ 100.

Subsequently, JJVC expanded the contact lens lines to which UPPs apply to include: 1-Day ACUVUE® MOIST® MULTIFOCAL and 1-Day ACUVUE® DEFINE®, and has discontinued non-UPP contact lens lines, leaving only three ACUVUE® products not subject to a UPP. Complaint ¶ 101.

In September 2014, CV implemented a UPP with respect to its Clariti contact lens lin, which it acquired through its purchase of another contact lens company in August 2014. CV continued'the UPP which had first been established in January 2014 on the Clariti line by the acquired company. Complaint ¶ 104. Subsequently, CV adopted a UPP for its MyDay line of contact lenses. Id

By July 2014, UPPs affected 40% of the contact lens market, and were predicted to affect 80% by the end of 2015, in part because ECPs would have an incentive to write prescriptions for contact lenses subject to a UPP. Complaint ¶¶ 12, 162. Jim Murphy (“Murphy”), Vice President of Alcon, described Alcon’s UPP as “ ‘a win’ for the manufacturers and the doctors, as well as (supposedly) consumers.” Complaint ¶ 14.

C. Manufacturer Defendants’ Vertical Agreements With ECPs

Plaintiffs allege that the Manufacturer Defendants, ABB, and the independent ECPs “all share an interest in not reducing the retail price of contact lenses and limiting competition from Discount Retailers.” Complaint ¶4. They allege that the ECPs’ motive for “colluding” or agreeing with the Manufacturer Defendants to develop UPPs was “to increase profit margins, combat price discounts for Discount Retailers, and eventually, eliminate price competition at the retail level altogether.” With UPPs in place, ECPs could charge at or above the UPP minimum price for the protected product, and remain competitive. Id. ¶ 114. The ECPs’ concern was prompted, in part, by the Fairness to Contact Lens Consumers Act (“FCLCA”), enacted December 6, 2003. The FCLCA requires ECPs to provide their patients with copies of their contact lens prescriptions so that the patients can purchase contact lenses from a retailer other than the ECP. Id. ¶ 66. A January 2015 trade magazine article noted that “ ‘[t]he FCLCA was of great concern because many believed that a great number of patients would start purchasing their contact lenses from alternative sources, affecting the profitability of contact lenses for practitioners.’ ” Id. ¶ 69; see also id. ¶¶ 70-72 (alleging that many ECPs disobeyed the law and did not provide copies of their prescriptions to their patients).

Plaintiffs allege that the Manufacturer Defendants’ motive to “collude” with the ECPs was “because a prescription from an ECP is required for the Manufacturer Defendants to sell their contact lens lines.” Complaint ¶ 114; see also id. ¶ 115. These desires were communicated through articles in professional journals, social media channels, and ECP meetings with industry representatives. Id ¶ 115 (citing to “Huge applause” among “300+ ” ECPs when B&L announced its UPP at the launch of B&L’s new ULTRA product).

In her June 24, 2014 letter to ECPs announcing the initiation of JJVC’s UPP policy for a number of products, including “strategic brands” ACUVUE® products, Laura Angelini (“Angelini”), President of JJVC, recounted the impetus for JJVC’s adopting UPPs. Complaint ¶¶ 102, 122. On June 24, 2014, Angelini wrote to ECPs:

“When I last communicated with you about six months ago, I shared that [JJVC] was in the process of carefully assessing our overall strategy so that we could best meet the needs of our customers, and asked for your feedback on what we were doing well and areas where we could improve. Thanks to your open and candid responses, we were able to define our strategy and implement the changes and actions you told us were needed... You, the [ECP] who prescribes our products, have our unwavering support for your clinical, business, and patient needs. ... To further demonstrate our commitment to prescri-bers, beginning this week, many of you will begin to hear from your JJVC Sales Representative about our new pricing strategy within the United States. This includes a [UPP]. ... We believe the multifaceted nature of this new pricing strategy and the variety of elements that comprise the program will allow you to refocus the critical doctor/patient conversation on eye health and product performance, rather than cost.”

Complaint ¶ 122 (citation omitted). According to an article in a trade publication, Angelini announced the company’s “Enterprise Strategy” involving UPPs as a “ ‘ro-admap to the future.’ ” Id. ¶ 102. Angelini said that pursuant to the UPPs, “ ‘all wholesale customers will receive the same pricing for certain existing contact lenses ...,’” minimum retail prices will be set, and manufacturer’s rebates will be eliminated. Id. The article reported that

“Angelini described the new pricing as a ‘holistic multifaceted pricing policy to refocus the conversation between the doctor and the patient on eye health and product performance rather than price. This gives the optometrist the ability to improve his or her capture rate in the office .... Now the patient has no incentive to shop around.’ ”

Id. JJVC said it was demonstrating support “ ‘for the profession and the professional — Prescribers, Portfolio and Preferred Partners.’ ” Id. In a follow-up letter to ECPs dated December 17, 2014, Angeli-ni confirmed that JJVC had extended an invitation a year earlier to “ ‘share your thoughts’ on how JJVC ‘could build and enhance our partnerships to help you meet the evolving needs of your patients and practices,” and that the ECPs “feedback was instrumental in helping [JJVC] create [its] Enterprise Strategy,” which included the new UPPs. Complaint ¶ 123. Angelini invited ECPs to continue to provide “feedback” to her and to JJVC’s management team “ ‘at anytime.’ ” Id.

Robert Ferrigno, President North America for CV (“Ferrigno”), said that CV conducted 12 focus groups and met with 100 ECPs before adopting its UPP, saying “ ‘There was a strong voice that UPP is an important requirement for independent eyecare practitioners,’ ” and that “ ‘[i]t was important that we understood the voice of the independents, and we’re responding to it.’ ” Complaint ¶ 124 (citation and emphasis omitted).

Likewise, ECPs embrace and support UPPs. Complaint ¶¶ 115, 117, 118, 119. Polls of ECPs found that 82-85% of the ECPs questioned supported UPPs. Id. ¶ 119. For instance, one ECP, also a consultant for Alcon, “stated that the new pricing policies are ‘fantastic’ because they set ‘an even playing field and it also does not support companies who want to price cut their products in an effort to increase utilization. ... [A]s a doctor, it allows me to let patients know they won’t find the lenses cheaper anywhere else.’ ” Id. ¶ 118. Another ECP stated in a published article that

“The response to these UPPs fell into. two camps. Practitioners were overjoyed — UPP instantly created a perfectly level playing field, eliminating the volume discounts for online retailers. Opponents, including big discounters like Costco and 1-800-CONTACTS, say the policies amount to illegal price-fixing and are restricting consumer choice.”

Complaint ¶ 120 (citation omitted); see also id. ¶ 129 (ECP quoted as saying that ECPs benefit from the “ ‘level playing field,’ ” and Manufacturers benefit “ ‘because retail price erosion can be stopped.’ ”). Additionally, the American Optometric Association (“AOA”), the ECP’s trade association, has been highly supportive of the Manufacturer Defendants’ implementation of UPPs. Complaint ¶ 121. As expressed by one ECP (Gary Gerber), the UPPs “guarantee doctors ‘a margin they have not seen for 20 years.’ ” Complaint ¶ 14.

D. Enforcement

JJVC sent to its customers, including ECPs and other retailers, a Policy Letter, enforcing the UPPs, saying that “‘[b]e-cause an advertisement to beat any price logically commits a reseller to beat even a price that is already below the UPP price, [JJVC] will regard an advertisement promising to beat any price or using similar words to be an advertisement to sell for less than UPP Price.’ ” Complaint ¶ 103. In November 2014, JJVC expanded enforcement of the UPPs, issuing a circular to its customers that stated “ ‘[i]f you. sell product below the UPP price, [JJVC] and its authorized distributors [such as ABB] will refuse to accept new orders from you. In addition, [JJVC] will exercise its right to repurchase your current inventory of products subject to the UPP price.’ ” Id. ¶ 107.

Dr. Milicent Knight (“Knight”), head of Professional Affairs for JJVC, stated that JJVC “‘has three separate processes for proactive Market Price monitoring,’ ” including internal employees and independent firms monitoring pricing, and advertising for UPP violations. Complaint ¶¶ 105, 106. “ ‘If a customer is found to be in violation of the UPP, then [JJVC] will no longer sell products subject to the policy to that customer.’ ”14 ¶ 106; see also id. ¶ 112 (JJVC required reseller. Costco Wholesale Corporation to maintain retail prices for the subject contact lenses at or above the UPP, and the in-store gift card or credit could not be used to purchase the lenses).

Alcon sought the written consent of ECPs to its UPPs. “[0]ne optometrist” posted on social media that “an Alcon representative ‘made a special appointment with me to discuss UPP and to have me sign paperwork indicating that I understood and agreed to the policy.’ Another ECP on the same website confirmed that this was Alcon’s standard practice.” Complaint ¶ 97.

Alcon provided testimony to Congress regarding its UPPs as follows:

“As a result of this situation, Alcon chose to create an environment in which ECPs might more likely spend time learning about the new technology and explaining it to patients, all while having the opportunity to make a reasonable profit margin. It did so by adopting its [UPP] ... when it launched DAILIES TOTAL 1® in 2013. That policy provided that Alcon would not supply DAILIES TOTAL 1® to customers who resold it for less than the price announced by Alcon.”

Complaint ¶ 108; see also id. ¶ 111.

B&L communicated to its customers that

“[E]ach customer is free to advertise or charge whatever price it wants, but should understand that [B&L] will cease to supply, and will prohibit its authorized distributors from supplying [B&L] Ultra® contact lenses to any customer that resells or advertises [B&L] Ultra® contact lenses to the end consumer (e.g. patient) for sale at less than the [UPP].”

Complaint ¶ 109.

Plaintiffs allege that Angel Alvarez (“Alvarez”), ABB’s CEO “has stated publically that the Manufacturer Defendants are very serious about policing their respective UPPs,” and that ECPs have received warnings for violating them. Complaint ¶ 111. “He said manufacturers are ‘holding the gun’ and are willing to lose business in order to police their UPPs.” Id.

Plaintiffs allege that Manufacturer Defendants have carried out the threat to “cut off’ a reseller, whether an ECP, or discount online vendor, who sold lenses below the UPP price. Complaint ¶ 110. According to Gary Gerber (“Gerber”), an ECP writing in an article published in the June 2014 edition of the trade journal Review of Cornea & Contact Lenses, “ ‘The hope is that all manufacturers with UPP lenses will follow suit, should other resellers not play by the rules.’ ” Id. ¶ 110.

Additionally, Plaintiffs allege that ECPs have assisted in the enforcement of the UPPs, as has been posted on social media sites, giving “instances of ECPs informing Alcon’s sales representatives about potential violations and requesting that Alcon take action.” Complaint ¶ 125.

E. Manufacturer Defendants’ Horizontal Agreement

Plaintiffs allege that the Manufacturer Defendants, “facing pressure from ECPs and ABB about competitive threats posed by the Discount Retailers, ... agreed with one another and with ABB and the independent ECPs to impose UPPs on their most advanced and most popular contact lens lines.” Complaint ¶ 133. In support of this allegation, Plaintiffs cite to “plus factors,” including allegations of “Industry Structure,” “Opportunities to Conspire,” “Information Exchanges,” “ABB’s and Independent ECPs’ Conduct,” “Acts Contrary to Economic Self Interest,” “Pretextual Reasons for UPPs,” “Motive to Conspire, Including Assurances That Competitors Will Also Act,” “Abrupt, Near Contemporaneous and Fundamental Shift in Pricing Policies,” and “Past Conspiratorial Conduct.” Complaint ¶¶ 135-158.

Specifically, Plaintiffs allege that the four Manufacturer Defendants control 97% of the market for contact lenses in the United States, and that the industry has high barriers for entry, making it an industry conducive to collusion. Complaint ¶¶ 73-75, 135. Individually, this breaks down to the following market shares: B&L 7.2%; CV 23.9%; Alcon 30.6% and JJVC 35.3%. Complaint ¶ 73. The Manufacturer Defendants had “regular opportunities to meet, exchange information, and signal their intentions” at meetings and through publications of industry organizations of which they were members, the Contact Lens Manufacturers’ Association (“CLMA”), and the Contact Lens Institute (“CLI”). Id. ¶¶ 136-42. The CLI actively collects and provides participants with market and sales data for strategic planning. Id. ¶¶ 139-40. Chris Holloway, Global Business Analytics Manager for CV, stated that this information offers “ ‘valuable insights in order to help us ga[u]ge where the market is heading and ultimately help with the possible strategic approaches we might make in the future.’ ” Additionally, the consulting service compiling the market date “ ‘acts as a partner to ensure that all manufacturers are working together so that we can make the statistical pro-gramme as effective as possible.’ ” Id. ¶ 141. The UPPs at issue here were all implemented by Manufacturer Defendants over a 15 month period, (and actually CV’s September 2014 UPP was initially implemented by a predecessor in January 2014, compressing the total time span to 12 months), representing a “ ‘significant change’ ” and a “ ‘fundamental shift’ ” in the contact lens market. Id. ¶¶ 104, 157.

UPPs individually are contrary to each Defendant Manufacturer’s independent economic self-interest. Complaint ¶ 144. According to testimony provided to Congress regarding the UPP arrangement, a UPP “ ‘makes sense for a manufacture^ only if it can be confident that other manufacturers will be taking similar action, and won’t be taking competitive advantage.’ ” Id. Additionally, as observed by CV President and CEO Robert Weiss (“Weiss”), the downside of UPPs is the challenge of enforcement, consumer activism and negative public perceptions generating legislative “backlash,” and alienation of larger customers who want greater pricing freedom. Complaint ¶ 145; see also id. ¶¶ 146^47 (specific examples of actual investigations, consumer outcry, and “legislative backlash” following Manufacturer Defendants’ implementation of the UPPs). Additionally, Plaintiffs allege that the Manufacturer Defendants experienced slower sales growth in 2014, citing to JJVC’s annual report, and to CV’s statement in September 2015 that the “market is being ‘negatively impacted’ by UPPs.” Complaint ¶ 149: see also id. ¶ 150 (ABB’s Alvarez states that “Manufacturer Defendants are willing to lose business in order to enforce their UPPs.”). Plaintiff alleges that the Defendant Manufacturers’ exhortations that UPPs contribute to patients’’ health is pre-textual, and indeed, under oath, an industry representative appearing before a Utah Senate legislative committee could not provide an example of health risks associated with the sale of contact lenses by Discount Retailers as opposed to ECPs. Complaint ¶¶ 152-55.

Plaintiffs allege that each Manufacturer Defendant had a motive for adopting UPPs “to maintain high retail prices for its contact lenses” and “to encourage independent ECPs to prescribe their contact lenses.” Complaint ¶ 156. They cite at length to the history of contact lens prescription and pricing controversies, starting in 1996. Id. ¶¶ 15-20, 65-68, 91-95.

F. ABB’s Role

ABB is the largest distributor of contact lenses in the United States and services more than two-thirds (more than 19,000) of the independent ECPs who sell contact lenses to their patients. Complaint ¶¶ 4, 7, 46, 135. ABB’s focus is to raise the profit margins for independent ECPs, as the “ ‘category captain,’ ” helping ECPs manage the contact lens portion of their business, with a goal of helping ECPs “ ‘make more money.’ ” Id. ¶ 7. ABB surveys ECPs regarding pricing of contact lens products, publishes these results, and advises ECPs that they should charge as much as possible for contact lenses to maximize their contact lens profit margin. Id. ¶¶ 7, 96. In the third quarter of 2014, the ABB publication Profit Advisor, which was sent to independent ECPs, advised and encouraged ECPs to charge more for contact lenses than the UPPs, without fear because the UPP is the minimum price any retailers can charge. At worst, a patient will ask the ECP to match the lowest price offering of the lens, which is the UPP. “ ‘As a result of UPP, ... the prescribing practitioner will be able to obtain a higher percentage of patient revenue.’ ” Complaint ¶ 130; see also id. ¶ 131 (Alvarez states on September 13, 2014 that ECPs should charge more than the UPP price). Plaintiffs allege that “ABB acts as an agent for its 19,000 independent ECP customers,” and benefits from UPPs because the pricing policies result in consumers purchasing replacement lenses from ECPs who are ABB’s clients. Complaint ¶ 7. ABB’s Alvarez called UPPs “one of the best developments of the last 20 years because they help ECPs raise profit margins.” Id. ¶ 14.

In addition to serving ECPs, ABB openly works with Defendant Manufacturers regarding pricing issues.

126. ABB played a principal role on behalf of ECPs to cause the Manufacturer Defendants to develop and implement the UPPs. As early as February 2013-before any of the Manufacturer Defendants had instituted UPPs — [ABB CEO] Alvarez stated publically that ABB’s focus was to be “aligned with manufacturers.” Subsequent press statements by Alvarez confirmed ABB’s integral role in developing the UPPs.

127. [Alvarez] issued a statement ... regarding [ABB’s] stance on UPPs.

“ ‘ABB has been working closely with manufacturers to develop unilateral pricing policies, which we believe enable a better overall patient experience by supporting competitiveness of prescribing practitioners,’ Alvarez said. ‘Contáct lens fitters have always been and will always be a focus of our organization. We do everything possible to help them succeed. [Emphasis omitted.].’ ”

128. ABB also issues publications that allow independent ECPs (and the Manufacturer Defendants) to monitor the pricing of contact lenses in order to ensure that prices set pursuant to UPPs are being followed. ...

Complaint ¶¶ 126-28.

Plaintiffs allege that ABB acted as a conduit of information between the Manufacturer Defendants, and that “on information and belief, ABB, acting on behalf of its many thousands of ECP clients, and the ECPs communicated to each Manufacturer Defendant its competitors’ position on UPPs.” Complaint ¶ 143. Thus, “ABB was in a position to communicate to each Manufacturer Defendant before it implemented a UPP that its competitors also intended to do so,” and thus served as the “hub” in a “hub and spoke” conspiracy. Id. ¶ 156.

Plaintiffs brings the following claims (the claims are mis-numbered in the Complaint):

First Cause of Action: Claim of Violation of 15 U.S.C. §§ 1 and 3 (Per Se Violation of the Sherman Act) [“Count 1”]

Second Cause of Action: Claim for Violation of 15 U.S.C. §§ 1 and 3 (Rule of Reason Violations of the Sherman Act) [“Count 2”]

Third Cause of Action: Claim for Violation of the California Cartwright Act [“Count 3”]

Third Cause of Action: Claim for Violation of the Maryland Antitrust Act [“Count 4”]

Sixth Cause of Action: Claim for Violation of the California Unfair Competition Law [“Count 5”]

Seventh Cause of Action: Claim for Violation of the Maryland Consumer Protection Act. [“Count 6”]

III. Standard of Review

When considering a motion to dismiss brought pursuant to Rule 12(b)(6), Federal Rules of Civil Procedure (Rule(s)), the Court must accept all factual allegations in the complaint as true, construing the allegations and drawing all reasonable inferences in the light most favorable to the plaintiff. See, e.g., Davidson v. Capital One Bank (USA). N.A., 797 F.3d 1309, 1312 (11th Cir. 2015); Miljkovic v. Shafritz & Dinkin, P.A., 791 F.3d 1291, 1297 (11th Cir. 2015); Jacobs, 626 F.3d at 1333. Rule 8(a)(2) “requires only ‘a short and plain statement of the claim showing that the pleader is entitled to relief.’ ” Erickson v. Pardus, 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007). Normally, “[s]pecific facts are not necessary; the statement need only ‘give the defendant fair notice of what the ... claim is and the grounds upon which it rests.’ ” Id. (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). A plaintiff must allege “enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570, 127 S.Ct. 1955.

Of course, “the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). In considering a motion to dismiss, a court should “1) eliminate any allegations in the complaint that are merely legal conclusions; and 2) where there are well-pleaded factual allegations, ‘assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.’ ” Am. Dental Ass’n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010) (quoting Iqbal, 556 U.S. at 679, 129 S.Ct. 1937)).

IV. Antitrust Pleading Standards

“Section 1 of the Sherman Act makes unlawful ‘[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States.’ ” Jacobs, 626 F.3d at 1333 (quoting 15 U.S.C. § 1). Section 1 applies both to agreements between companies that directly compete with one another, called “horizontal” agreements, and to agreements between businesses operating at different levels of the same product’s production chain or distribution chain, known as “vertical” agreements. Spanish Broad. Sys. of Fla., Inc. v. Clear Channel Commc’ns. Inc., 376 F.3d 1065, 1071 (11th Cir.2004). In order to establish a Section 1 violation, the plaintiff must show (1) a contract, combination, or conspiracy among two or more separate entities that (2) unreasonably restrains trade, (3) affects interstate or foreign commerce, and (4) causes antitrust injury and damages. See Todorov v. DCH Healthcare Auth., 921 F.2d 1438, 1455, 1459 (11th Cir. 1991); 15 U.S.C. § 1. “Section One applies only to agreements between two or more businesses; it does not cover unilateral conduct.” Spanish Broad. Sys. of Fla., 376 F.3d at 1071.

The Manufacturer Defendants argue that Plaintiffs have alleged no specific facts which support an inference of agreement between the Manufacturer Defendants, ABB, and the ECPs. They invite the Court to consider “ ‘obvious alternative explanation[s]’ ” for Defendants’ conduct. (Doc. 145 at 15, 23-24, 31 (quoting Twombly, 550 U.S. at 555-57, 565, 567, 127 S.Ct. 1955)); (see also Doc. 146 at 2-3 (ABB Motion), and assert that Plaintiffs’ complaint must allege “ ‘additional facts that tend to exclude independent self-interested conduct as an explanation for defendants’ parallel behavior.’ ” (Doc. 145 at 27 (quoting Twombly, 550 U.S. at 552, 127 S.Ct. 1955)): see also id. at 31 (citing Jacobs, 626 F.3d at 1342-43); (Doc. 191 at 10) (same). Manufacturer Defendants contend that Plaintiffs’ allegations do not plead the necessary element of agreement, because the facts alleged “are entirely consistent with permissible unilateral conduct.” (Doc. 191 at 6). ABB concurs, arguing that pursuant to the Eleventh Circuit’s decision in Jacobs. Plaintiffs’ allegations must show why it is “more plausible” that a manufacturer and distributor would enter into an illegal price-fixing agreement than engage in lawful conduct to maximize profits. (Doc. 146 at 3-4 (citing Jacobs, 626 F.3d at 1342-43). ABB contends that its alleged conduct is equally “ ‘consistent with permissible competition’ ” and thus cannot support an antitrust conspiracy theory. (Docs. 146 at 3 and 190 at 3 (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 597 n.21, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)). Plaintiffs respond that consideration of “alternative explanations” for Defendants’ conduct is not “ripe” for resolution on a motion to dismiss the complaint, and that the Court, at this stage, “should not determine which explanation of allegedly conspiratorial conduct is most plausible.” (Doc. 185 at 23,45; see also id. at 42).

In Twombly, the Supreme Court updated the standard of review on motion to dismiss, abrogating the previous “no set of facts” notice pleading standard enunciated in Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). See Arthur v. JP Morgan Chase Bank, NA, 569 Fed.Appx. 669, 681 (11th Cir. 2014); Simpson v. Sanderson Farms, Inc., 744 F.3d 702, 714-15 (11th Cir. 2014). The Twombly Court requires a Complaint to state claims that are “plausible,” as opposed to “conceivable,” by alleging “only enough facts to state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570, 127 S.Ct. 1955. Significantly, the Supreme Court decided Twombly in the context of an anti-trust case.

The Court first reviewed pleading standards required by the Federal Rules of Civil Procedure, instructing that Rule 8 “requires only ‘a short and plain statement of ,the claim showing that the pleader is entitled to relief,’ in order to ‘give the defendant fair notice of what the ... claim is and the grounds upon which it rests.’ ” Twombly, 550 U.S. at 555, 127 S.Ct. 1955 (citation omitted). A complaint “does not need detailed factual allegations,” but it does require “more than labels and conclusions.” Id. at 555, 127 S.Ct. 1955. “Factual allegations must be enough to raise a right to relief above the speculative level... on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Id. (citations omitted).

In applying these general standards to a § 1 claim, we hold that stating such a claim requires a complaint with enough factual matter (taken as true) to suggest that an agreement was made. Asking for plausible grounds to infer an agreement does not impose a probability requirement at the pleading stage; it simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence of illegal agreement. [Footnote omitted]. And, of course, a well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and “that a recovery is very remote and unlikely.”.... [A]n allegation of parallel conduct and a bare assertion of conspiracy will not suffice. Without more, parallel conduct does not suggest conspiracy, and a conclusory allegation of agreement at some unidentified point does not supply facts adequate to show illegality. Hence, when allegations of parallel conduct are set out in order to make a § 1 claim, they must be placed in a context that raises a suggestion of a preceding agreement, not merely parallel conduct that could just as well be independent action.

A statement of parallel conduct, even conduct consciously undertaken, needs some setting suggesting the agreement necessary to make out a § 1 claim; without that further circumstance pointing toward a meeting of the minds, an account of a defendant’s commercial efforts stays in neutral territory. An allegation of parallel conduct is thus much like a naked assertion of conspiracy in a § 1 complaint: it gets the complaint close to stating a claim, but without some further factual enhancement it stops short of the line between possibility and plausibility of “entitle[ment] to relief.”

Twombly, 550 U.S. at 556-57, 127 S.Ct. 1955 (citations omitted) see also id. at 553-54, 127 S.Ct. 1955 (“Even ‘conscious parallelism,’ a common reaction of firms in a concentrated market that recognize their shared economic interests and their interdependence with respect to price and output decisions is not in itself unlawful.” (internal quotations and citations omitted)). The Court observed, that “when allegations of parallel conduct are set out in order to make a § 1 claim, they must be placed in a context that raises a suggestion of a preceding agreement, not merely parallel conduct that could just as well be independent action.” Id. at 557, 127 S.Ct. 1955. Indeed, parallel behavior that is the result of “chance, coincidence, independent responses to common stimuli, or mere interdependence unaided by an advance understanding among the parties,” does not state a § 1 claim. Id. at 556, 127 S.Ct. 1955 n.4. The Court said that the sufficiency of the allegations “turns on the suggestions raised by this conduct when viewed in light of common economic experience.” Id. at 565, 127 S.Ct. 1955. The Court declined to apply a heightened pleading standard to antitrust cases, instead holding that the facts alleged are subject to Rule 8(a)’s general requirement of a “short and plain statement” of facts supporting a plausible claim. Id., 550 U.S. at 554-55, 569 n.14, 570, 127 S.Ct. 1955.

The Twombly Court acknowledged that dismissal of an insufficient antitrust complaint prior to discovery may be appropriate.

Thus, it is one thing to be cautious before dismissing an antitrust complaint in advance of discovery, cf. Poller v. Columbia Broadcasting System. Inc., 368 U.S. 464, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962), but quite another to forget that proceeding to antitrust discovery can be expensive. As we indicated over 20 years ago in Associated Gen. Contractors of Cal., Inc. v. Carpenters, 459 U.S. 519, 528 n.17, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983), “a district court must retain the power to insist upon some specificity in pleading before allowing a potentially massive factual controversy to proceed.” See also Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir. 1984) (“[T]he costs of modern federal antitrust litigation and the increasing caseload of the federal courts counsel against sending the parties into discovery when there is no reasonable likelihood that the plaintiffs can construct a claim from the events related in the complaint”) ....

Twombly, 550 U.S. at 558, 127 S.Ct. 1955.

Applying these standards, the Twombly Court determined that, the plaintiffs claim of conspiracy in restraint of trade came up short, 550 U.S. at 564, 127 S.Ct. 1955, finding that there was an “obvious alternative explanation” to the conduct alleged. Id. at 567, 127 S.Ct. 1955. The Court held that the antitrust complaint was due to be dismissed because plaintiffs “rest[ed] their § 1 claim on descriptions of parallel conduct and not on any independent allegation of actual agreement ...,” and did not allege “a plausible suggestion of conspiracy.” Id. at 564, 566, 127 S.Ct. 1955. “[T]here is no reason to infer that the companies had agreed among themselves to do what was only natural anyway.” Id. at 566, 127 S.Ct. 1955. The Court held that “the complaint warranted dismissal because it failed in toto to render plaintiffs’ entitlement to relief plausible.” Id. at 569, 127 S.Ct. 1955 n.14.

Defendants also cite to the Eleventh Circuit’s decision in Jacobs, 626 F.3d 1327, which is binding on the Court in this MDL case. See Murphy v. F.D.I.C., 208 F.3d 959, 966 (11th Cir. 2000). In Jacobs, a consumer who purchased a mattress brought an antitrust complaint against the mattress manufacturer, alleging a vertical and horizontal conspiracy. The Eleventh Circuit affirmed the district court’s dismissal of the complaint. Citing the Supreme Court’s directive in Twombly, the Eleventh Circuit focused upon “plausibility,” as the key, and the requirement that “well-pled allegations must nudge the claim across the line from conceivable to plausible.” 626 F.3d at 1333, 1342 (internal quotations and citation omitted). The Court examined the Complaint “for a sufficient quantum of allegations to plausibly suggest” an agreement to restrain trade in violation of the Sherman Act. Id. at 1333. The Court stated that plaintiff

had the burden to present allegations showing why it is more plausible that [defendant] and its distributors — assuming they are rational actors acting in their economic self-interest — would enter into an illegal price-fixing agreement (with the attendant costs of defending against the resulting investigation) to reach the same result realized by purely rational profit-maximizing behavior. Put another way, the potential costs of fixing prices with its distributors would outweigh any benefits that [defendant] would realize by doing so, particularly where independent economic activity would yield the same benefits with none of the costs.

Jacobs, 626 F.3d at 1342. The Jacobs Court found the allegations in the antitrust complaint were not suggestive enough to render a § 1 conspiracy plausible, “when the inference of conspiracy [was] juxtaposed with the inference of economic self-interest.” Id. at 1343.

The Circuit Courts of Appeal are split on the question of whether competing inferences may be balanced at the motion to dismiss stage. Compare In re Musical Instruments & Equip. Antitrust Litig., 798 F.3d 1186, 1189, 1193-94 (9th Cir. 2015); Jacobs, 626 F.3d at 1342-43, with SD3, LLC v. Black & Decker (U.S.) Inc., 801 F.3d 412, 424-26 (4th Cir. 2015). as amended on reh’g in part (Oct. 29, 2015), pet. for cert. filed, No. 1594284 USLW 3423 (U.S. Jan. 27, 2016); Anderson News, L.L.C. v. Am. Media, Inc., 680 F.3d 162, 184-85 (2d Cir. 2012), cert. denied, — U.S. -, 133 S.Ct. 846, 184 L.Ed.2d 655 (2013). With these precepts in mind, the Court examines Plaintiffs claims in light of the facts alleged, accepting all factual allegations in the complaint as true, and construing the allegations and drawing all reasonable inferences in the light most favorable to Plaintiffs.

V. Claims Alleging Violation of the Sherman Antitrust Act (Counts 1 and 2)

Antitrust law differentiates between vertical and horizontal price restraints. “Restraints imposed by agreement between competitors have traditionally been denominated as horizontal restraints, and those imposed by agreement between firms at different levels of distribution as vertical restraints.” Bus. Elecs. Corp. v. Sharp Elecs. Corp., 485 U.S. 717, 730, 108 S.Ct. 1515, 99 L.Ed.2d 808 (1988) (footnote omitted). With limited exceptions, horizontal agreements are per se unlawful, whereas vertical restraints are unlawful only if an assessment of market effects, known as the “rule of reason” analysis, reveals that the vertical agreements unreasonably restrain trade. See Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 885-86, 907, 127 S.Ct. 2705, 168 L.Ed.2d 623 (2007). Under the “rule of reason,” “the factfinder weighs all of the circumstances of a case in deciding whether a restrictive practice should be prohibited as imposing an unreasonable restraint on competition.” Id. at 885, 127 S.Ct. 2705 (citation omitted).

The Supreme Court in United States v. Colgate, 250 U.S. 300, 39 S.Ct. 465, 63 L.Ed. 992 (1919) recognized that the Sherman Antitrust Act “does not restrict the long recognized right of trader of manufacturer engaged in an entirely private business, freely to exercise his own independent discretion as to parties with whom he will deal; and, of course, he may announce in advance the circumstances under which he will refuse to sell. The trader or manufacturer.... carries on an entirely private business, and can sell to whom he pleases.” Id. at 307, 39 S.Ct. 465 (internal quotations and citation omitted). “Under Colgate, the manufacturer can announce its resale prices in advance and refuse to deal with those who fail to comply. And a distributor is free to acquiesce in the manufacturer’s demand in order to avoid termination.” Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 761, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984).

Vertical and horizontal price arrangements may intersect. See United States v. Apple, Inc., 791 F.3d 290, 314 (2d Cir. 2015), cert. denied, — U.S. -, 136 S.Ct. 1376, 194 L.Ed.2d 360 (2016). For example, “[a] group of retailers might col--lude to fix prices to consumers and then compel a manufacturer to aid the unlawful arrangement with resale price maintenance. In that instance the manufacturer does not establish the practice to stimulate services or to promote its brand but to give inefficient retailers higher profits. Retailers with better distribution systems and lower cost structures would be prevented from charging lower prices by the agreement.” Leegin, 551 U.S. at 893, 127 S.Ct. 2705.

A horizontal cartel among competing manufacturers or competing retailers that decreases output or reduces competition in order to increase price is, and ought to be, per se unlawful. ... To the extent a vertical agreement setting minimum resale prices is entered upon to facilitate either type of cartel, it, too, would need to be held unlawful under the rule of reason. This type of agreement may also be useful evidence for a plaintiff attempting to prove the existence of a horizontal cartel.

Id. The Ninth Circuit Court of Appeals describes this intersection as follows:

[T]he line between horizontal and vertical restraints can blur. One conspiracy can involve both direct competitors and actors up and down the supply chain, and hence consist of both horizontal and vertical agreements[.] .... [0]ne such hybrid form of conspiracy [is] sometimes called a “hub-and-spoke” conspiracy.

A traditional hub-and-spoke conspiracy has three elements: (1) a hub, such as a dominant purchaser; (2) spokes, such as competing manufacturers or distributors that enter into vertical agreements with the hub; and (3) the rim of the wheel, which consists of horizontal agreements among the spokes.

A hub-and-spoke conspiracy is simply a collection of vertical and horizontal agreements. And once the conspiracy is broken into its constituent parts, the respective vertical and horizontal agreements can be analyzed either under the rule of reason or as violations per se. [Footnote omitted.].

In re Musical Instruments, 798 F.3d at 1192-93. However, when considered as a whole, “all participants in ‘hub-and-spoke’ conspiracies [are] liable when the objective of the conspiracy was a per se unreasonable restraint of trade.” United States v. Apple, Inc., 791 F.3d at 322 (citations omitted); see also id. at 323 (finding that the “relevant agreement in restraint of trade” was not Apple’s (the hub) vertical contracts with the publisher defendants (spokes), but rather “the horizontal agreement that Apple organized among the Publisher Defendants to raise ebook prices,” which was “per se unreasonable.”). Simply stated, a “hub-and-spoke” conspiracy involves “an entity at one level of the market structure, the ‘hub,’ [that] coordinates an agreement among competitors at a different level, the ‘spokes.’.... These arrangements consist of both vertical agreements between the hub and each spoke and a horizontal agreement among the spokes to adhere to the hub’s terms, often because the spokes would not have gone along with the vertical agreements except on the understanding that the other spokes.were agreeing to the same thing.” United States v. Apple, Inc., 791 F.3d at 314 (internal quotations and citations omitted) (emphasis in original). “[V]ertical agreements, lawful in the abstract, can in context ‘be useful evidence for a plaintiff attempting to prove the existence of a horizontal cartel.’ ” Id. at 319-20 (quoting Leegin, 551 U.S. at 893, 127 S.Ct. 2705).

The decisions in United States v. General Motors Corp., 384 U.S. 127, 86 S.Ct. 1321, 16 L.Ed.2d 415 (1966) and Toys “R” Us, Inc. v. FTC, 221 F.3d 928 (7th Cir. 2000) illustrate a “hub-and-spoke” conspiracy involving agreements to set minimum prices so as to avoid or nullify competition from discounting retailers. In General Motors, car manufacturer General Motors coordinated a group of car dealerships with the goal of preventing other dealers from selling the manufacturer’s vehicles at a discount. At a meeting of the dealership association, the member dealers “discussed the problem and resolved to bring it to the attention of’ the manufacturer. 384 U.S. at 133, 86 S.Ct. 1321. The dealers agreed to “flood” General Motors with letters and telegrams “asking for help” regarding the discounters. Id. at 134, 86 S.Ct. 1321. General Motors responded to the complaining dealers, and confronted those dealers who were trading with discounters. “These brief meetings were wholly successful in obtaining from each dealer his agreement to abandon the practices in question.” Id. at 135, 86 S.Ct. 1321. General Motors, the dealer associations and a number of individual dealers, in a “joint effort,” policed and enforced the agreements. Id. at 136, 86 S.Ct. 1321. The Court reversed judgment for General Motors and dealer associations, holding:

We have here a classic conspiracy in restraint of trade: joint, collaborative action by dealers, the appellee associations, and General Motors to eliminate a class of competitors by terminating business dealings between them and a minority of Chevrolet dealers and to deprive franchised dealers of their freedom to deal through discounters if they so choose.

General Motors Corp., 384 U.S. at 140, 86 S.Ct. 1321. The Supreme Court rejected the argument that each co-conspirator “acted to promote its own self-interest;”

Neither individual dealers nor the associations acted independently or separately. The dealers collaborated, through the associations and otherwise, among themselves and with General Motors, both to enlist the aid of General Motors and to enforce dealers’ promises to forsake the discounters. The associations explicitly entered into a joint venture to assist General Motors in policing the dealers’ promises, and their joint proffer of aid was accepted and utilized by General Motors.

Id. at 143, 86 S.Ct. 1321. An “explicit agreement is not a necessary part of a Sherman Act conspiracy — certainly not where, as here, a joint and collaborative action was pervasive in the initiation, execution, and fulfillment of the plan.” Id. at 142-43, 86 S.Ct. 1321. The Court concluded that the multi-layered conspiracy resulted in a per se violation of the Sherman Act, where “inherent in the success of the combination ... was a substantial restraint upon price competition,” and “one of the purposes behind the concerted effort to eliminate sales of new Chevrolet cars by discounters was to protect franchised dealers from real or apparent price competition.” Id. at 146-47, 86 S.Ct. 1321.

The case Toys “R” Us, supra, also describes a “hub and spoke” conspiracy. Toys “R” Us (TRU), a giant retailer of toys, sought a solution to its continuing lost sales to discount club “warehouse” stores, which sold popular toys at prices that TRU could not match. Toys “R” Us, 221 F.3d at 931. To combat the problem, TRU entered into separate vertical agreements with major toy manufacturers, in which the manufacturers agreed to limit their sales of certain toys to the warehouse stores. Id. at 931-32. In reaching these agreements, TRU “was careful to meet individually” with each manufacturer. Id. at 932. Still, TRU told each manufacturer that it would be proposing similar terms to the others, and each manufacturer agreed to the terms “ ‘on the condition that their competitors would do the same.’ ” Id. (citation omitted). TRU then enforced the agreements with each manufacturer, and “served as the central clearinghouse for complaints about breaches in the agreement.” Id. at 933. The Federal Trade Commission (“FTC”) found both that the individual vertical agreements violated the antitrust laws, and that the horizontal agreement among the manufacturers to limit sales to the warehouse stores was per se illegal. Id.

The Seventh Circuit affirmed the FTC’s decision that the network of agreements between Toys “R” Us and two manufacturers to restrict the distribution of products to warehouse club stores was a per se conspiracy that violated antitrust laws, finding that an inference of conspiracy was supported by the fact that the agreement to limit sales to the warehouse stores was “an abrupt shift from the past.” Toys “R” Us, 221 F.3d at 935. The court found that the warehouse stores’ share of toy sales had been growing prior to the agreements, and that the manufacturers would not normally be expected to “deprive [themselves] of a profitable sales outlet.” Id. Because one manufacturer unilaterally limiting its sales to the warehouse stores would risk losing sales to its competitors, the agreements with TRU were found to be contrary to an individual manufacturers economic interest, unless the other manufacturers had agreed to accept the same deal. Id. at 936.

Then, addressing the manufacturer’ reluctance to give up their sales to the fast-growing profitable discount warehouses, the court upheld the FTC’s determination that Toys “R” Us “orchestrated a horizontal agreement” among the large toy manufacturer to boycott the clubs. Id. at 932. This resulted in “the sudden adoption of measures under which they decreased sales to the clubs,” despite the fact that this ran against the manufacturers’ economic self interest. Id. The evidence established that TRU facilitated this horizontal agreement among manufacturers by communicating with each manufacturers seria-tim, assuring each that its agreement to limit sales to the warehouse stores would be met with similar acquiescence by its competitors. Id. (“TRU communicated the message ‘I’ll stop if they stop’ from manufacturer to competing manufacturer.”).

A. First Cause of Action: Claim of Violation of 15 U.S.C. §§ 1 and 3 (Per Se Violation of the Sherman Act) [“Count 1”]

“[C]ertain horizontal agreements ‘always or almost always tend to restrict competition and decrease output.’ ” In re Musical Instruments, 798 F.3d at 1191 (quoting Broadcast Music, Inc. v. CBS, 441 U.S. 1, 19-20, 99 S.Ct. 1551, 60 L.Ed.2d 1, (1979)). “Classic examples include agreements among competitors to fix prices, divide markets, and refuse to deal.” Id. (citing United States v. Trenton Potteries Co., 273 U.S. 392, 397-98, 47 S.Ct. 377, 71 L.Ed. 700 (1927) (horizontal price fixing); United States v. Topco Assocs., 405 U.S. 596, 608, 92 S.Ct. 1126, 31 L.Ed.2d 515 (1972) (horizontal market division); Nw. Wholesale Stationers, Inc. v. Pac. Stationery & Printing Co., 472 U.S. 284, 293-94, 105 S.Ct. 2613, 86 L.Ed.2d 202 (1985) (concerted refusal to deal)). Once a horizontal agreement is established, “no further inquiry into the practice’s actual effect on the market or the parties’ intentions is necessary to establish a § 1 violation.” Id. at 1192 (citing N. Pac. Ry. v. United States, 356 U.S. 1, 5, 78 S.Ct. 514, 2 L.Ed.2d 545 (1958)). A horizontal conspiracy either alone, or as part of a “rimmed hub-and-spoke conspiracy,” defined as “a collection of vertical agreements joined by horizontal agreements,” is a per se violation of § 1 of the Sherman Act. Id. at 1192 n.3.

“Under Twombly, parallel conduct, such as competitors adopting similar policies around the same time in response to similar market conditions, may constitute circumstantial evidence of anticompet-itive behavior.” In re Musical Instruments, 798 F.3d at 1193 (citing (Twombly, 550 U.S. at 553-54, 127 S.Ct. 1955). “But mere allegations of parallel conduct — even consciously parallel conduct — are insufficient to state a claim under § 1. Plaintiffs must plead ‘something more,’ ‘some further factual enhancement,’ a ‘further circumstance pointing toward a meeting of the minds’ of the alleged conspirators.” Id. (citing (Twombly, 550 U.S. at 557, 560, 127 S.Ct. 1955).

Where no direct evidence of a horizontal agreement exists, the Court evaluates circumstantial evidence, so-called “plus factors,” “that remove [plaintiffs’] evidence from the realm of equipoise and render that evidence more probative of conspiracy than of conscious parallelism.” Williamson Oil Co. v. Philip Morris USA, 346 F.3d 1287, 1301 (11th Cir. 2003): see also United States v. Apple, Inc., 791 F.3d at 315; In re Text Messaging Antitrust Litig., 630 F.3d 622, 629 (7th Cir. 2010) (“Circumstantial evidence can establish an antitrust conspiracy.” (citing cases)). “It is only in rare cases that a plaintiff can establish the existence of a conspiracy by showing an explicit agreement; most conspiracies are inferred from the behavior of the alleged conspirators, and from other circumstantial evidence (economic and otherwise), such as barriers to entry and other market conditions.” Williamson Oil Co., 346 F.3d at 1299-1300 (internal quotations and citations omitted). “Whereas parallel conduct is as consistent with independent action as with conspiracy, plus factors are economic actions and outcomes that are largely inconsistent with unilateral conduct but largely consistent with explicitly coordinated action.” In re Musical Instruments, 798 F.3d at 1194 (citing Twombly, 550 U.S. at 557 n.4, 127 S.Ct. 1955). If pleaded, “plus factors” can place parallel conduct “in a context that raises a suggestion of preceding agreement.” Twombly, 550 U.S. at 557, 127 S.Ct. 1955.

Circumstances that may raise an inference of conspiracy include a common motive to conspire, evidence that shows that the parallel acts were against the apparent individual economic self-interest of the alleged conspirators, and evi