United States District Court, N.D. Illinois, Eastern Division
June 10, 2004.
LINEA INTERNACIONAL DE CREDITO, S.A., an Ohio corporation, Plaintiff,
WESTERN UNION FINANCIAL SERVICES, INC., Defendant.
The opinion of the court was delivered by: JOHN GRADY, Senior District Judge
Before the court is defendant's motion to dismiss the complaint
pursuant to Federal Rule of Civil Procedure 12(b)(6). For the
reasons explained below, the motion is granted.
Plaintiff Linea Internacional de Credito, S.A. ("LIC") brings
this action against Western Union Financial Services, Inc.
("Western Union"), alleging the violation of antitrust laws.
The following facts are drawn from the complaint and taken as
true for purposes of this motion. LIC provides financial services
and does business under the names "Worldwide Financial Services"
and "Worldwide Cash Card Company." Its customers are individuals
in the United States "who purchase [unspecified] goods and
services from [primarily Internet] vendors located in the
Caribbean, Central and South America."*fn1 (Complaint, ¶ 5.) These customers
require a means of paying for the goods and services purchased,
and the vendors must be able to make refunds or other payments to
the customers. According to LIC, Western Union is "the largest,
best-known, and almost exclusive provider of money wire transfer
services available to individuals in the United States." (Id.,
On June 18, 1999, LIC and Western Union entered into an
agreement pursuant to which Western Union would provide wire
transfer services to LIC's customers for a flat fee of $11.99 per
transfer of $5,000 or less. This arrangement facilitated Internet
transactions between LIC's customers and Caribbean vendors. As a
result of the agreement, LIC began to market its financial
services, gain new customers, and establish relationships with
Caribbean vendors. Within two months, LIC became one of Western
Union's largest customers.
On November 15, 1999, Western Union terminated the contract
with LIC due to "suspicious activity." LIC sought an explanation.
Western Union indicated that it had learned that some of the
Caribbean vendors were online casinos, and that transactions
between LIC's customers and these online casinos necessitated the
termination of the contract. LIC asserts that Western Union "used the gambling allegation as
a pretext to cancel the contract," calculating that "it would
make millions of dollars more if it could force [LIC's] customers
to send money to The Caribbean for the hundreds of dollars
Western Union charges individuals rather than the nominal sum of
$11.99 it had agreed to charge LIC customers for such
transactions." (Complaint, ¶ 12.) Then, according to LIC, Western
Union attempted to "eliminate all competition for the money
transfer market." (Id.) "Within days Western Union established
the Western Union Cash Card and The Western Union MasterCard
program and entered into arrangements with the same online
casinos that it alleged were engaging in `suspicious activities'
with LIC customers." (Id., ¶ 13.)
Because Western Union terminated the contract, LIC was unable
to serve its customers and could not honor relationships with
Caribbean vendors, thereby losing millions of dollars. There is
no other provider of money wire transfer services available to
LIC. The complaint also alleges that "millions of customers
located throughout the United States . . . are deprived of a low
cost alternative to the expensive wire transfer services offered
by Western Union." (Complaint, ¶ 14.)
LIC asserts that Western Union violated the Sherman Act,
15 U.S.C. § 2, and the Clayton Act, 15 U.S.C. § 15. LIC seeks treble
damages, attorney's fees and costs, and requests "[t]hat Western Union be enjoined from refusing to provide the wire transfer
services to which it agreed in the contract to LIC and its
customers and vendors." (Complaint, Prayer for Relief, at 6.)
Western Union now moves to dismiss the complaint.
The purpose of a 12(b)(6) motion to dismiss is to test the
sufficiency of the complaint, not to resolve the case on the
merits. 5A Charles Alan Wright & Arthur R. Miller, Federal
Practice and Procedure § 1356, at 294 (2d ed. 1990). When
evaluating such a motion, the court must accept as true all
factual allegations in the complaint and draw all reasonable
inferences in the plaintiff's favor. Hentosh v. Herman M. Finch
Univ. of Health Sciences, 167 F.3d 1170, 1173 (7th Cir. 1999);
Jang v. A.M. Miller & Assocs., 122 F.3d 480, 483 (7th Cir.
1997). Dismissal is appropriate only if "`it is clear that no
relief could be granted under any set of facts that could be
proved consistent with the allegations.'" Ledford v. Sullivan,
105 F.3d 354, 356 (7th Cir. 1997) (quoting Hishon v. King &
Spalding, 467 U.S. 69, 73 (1984)); Jones v. General Elec. Co.,
87 F.3d 209, 211 (7th Cir.), cert. denied, 519 U.S. 1008
Western Union first argues that LIC has no protectible legal
interest and thus cannot assert an antitrust claim as a matter of
law, citing Maltz v. Sax, 134 F.2d 2, 5-6 (7th Cir. 1943). In
Maltz, the plaintiff manufactured and sold gambling devices
called "punchboards." He brought an action under the Sherman Act
alleging that he was the victim of an unlawful combination and
conspiracy. The district court granted defendants' motion to
dismiss on the ground that the use and sale of punchboards was
unlawful and against public policy. The Court of Appeals affirmed
the dismissal, stating:
[T]he damages claimed were for an injury to something
which the law did not recognize as a legal right.
Plaintiff's business was the making and selling of
goods which could only be used by purchasers in
furtherance of the business of gambling. Plaintiff
has no legal right in a business, the conduct of
which was gambling, for which he may obtain
protection either in an action at law, or by a suit
in equity. He had no legal rights to protect.
Therefore defendants could not invade them.
. . .
While the business of making and selling gambling
machines is not in itself gambling, it is widely held
that one who sells a gambling mechanism, useful for
no business other than gambling, may not recover the
purchase price of such gambling apparatus. More
consistent with our general public policy is a
construction of the Sherman Act, which holds that one
conducting a business inseparably connected with
gambling (such as making gambling machines) may not
recover in an action at law for injury to its
business through a competition-squeezing combination
of his competitors.
Id. (citations omitted).
Western Union argues that Maltz forecloses LIC's claims.
Maltz is distinguishable, however, because there, plaintiff's
business was "the making and selling of goods which could only
be used by purchasers in furtherance of the business of gambling"
and was "inseparably connected with gambling." Id. (emphasis
added). All that we can tell about LIC's business at this
juncture, though, is that Western Union asserted that "transactions between LIC
customers and on-line casinos necessitated the termination of the
Contract." (Complaint, ¶ 10.) It is not clear from the complaint
that plaintiff's business is inseparably connected with gambling
or that its services could only be used in furtherance of
gambling.*fn2 Therefore, Maltz does not control.
Western Union also contends that LIC fails to state a claim
under the Sherman and Clayton Acts. On this issue, we agree with
Western Union. Section 2 of the Sherman Act, 15 U.S.C. § 2,
proscribes monopolization and attempted monopolization of trade.
Private civil actions to enforce the Sherman Act are allowed
under the Clayton Act, 15 U.S.C. § 15. LIC alleges that Western
Union "has monopolized the money wire transfer market available
to individuals in the United States." (Complaint, ¶ 6.)
The elements of a monopolization claim under § 2 of the Sherman
Act are that the defendant (1) has a monopoly in the relevant
market; and (2) willfully acquired or maintained that monopoly
through anti-competitive conduct as opposed to superior product,
business acumen, or accident. See Endsley v. City of Chicago,
230 F.3d 276, 282 (7th Cir. 2000) (citing Eastman Kodak Co. v.
Image Technical Servs., 504 U.S. 451, 481 (1992)). Although we cannot apply a heightened pleading standard in antitrust
cases, "plaintiffs still must set forth facts sufficient to
create an inference that defendant had enough market power to
create a monopoly" in order to survive a motion to dismiss.
Endsley, 230 F.3d at 282.
LIC fails to properly allege the first element of a Sherman Act
claim that defendant has a monopoly in a relevant market. In
paragraph 5 of the complaint, plaintiff purports to define two
markets: (1) "a market of customers located throughout the United
States, including thousands of customers in the Northern District
of Illinois, for inexpensive money wire transfer services to
vendors located in The Caribbean"; and (2) a "similar market" of
"vendors who sell goods and services to United States customers
via the Internet who need to receive funds from said customers
and, on occasion, make refunds or other payments to customers in
the United States." The same paragraph includes an explanation of
why plaintiff has excluded bank wire transfer services, credit
cards, and checks from its definition of the relevant
market.*fn3 The complaint then goes on to allege that
Western Union has monopolized only "the money wire transfer market available to individuals in
the United States." (Id., ¶ 6.) Therefore, LIC's exact
definition of the relevant market is unclear. Moreover, the facts
set forth in the complaint are insufficient to permit an
inference that Western Union had a monopoly in any market. The
complaint alleges merely that "Western Union is the largest,
best-known and almost exclusive provider of money wire transfer
services available to individuals in the United States. As a
result, Western Union has monopolized the money wire transfer
market available to individuals in the United States." (Id.
(emphasis added).) This non sequitur is insufficient to allege a
LIC also fails to allege the second element of a Sherman Act
claim that Western Union willfully acquired or maintained
monopoly power through anti-competitive conduct. The complaint
fails to allege that Western Union engaged in conduct that was
unjustified. Notably, LIC does not contend that Western Union was
not entitled to terminate the contract or that its alleged
conduct constituted a breach of contract. And, as defendant
points out, even a monopolist has no duty to help its
competitors. See Olympia Equip. Leasing Co. v. Western Union
Tel. Co., 797 F.2d 370, 376 (7th Cir. 1986) ("A monopolist has
no duty to reduce its prices in order to help consumers . . . and
no duty to extend a helping hand to new entrants. . . . If a
monopolist does extend a helping hand, though not required to do
so, and later withdraws it as happened in this case, does he incur antitrust liability? We think not.").
Because LIC fails to state a claim for antitrust violations,
the complaint must be dismissed.
For the foregoing reasons, defendant's motion to dismiss the
complaint is granted. The complaint is dismissed without
Plaintiff is given until July 1, 2004 to file an amended
complaint if it believes it can do so in accordance with this
opinion. If plaintiff does not file an amended complaint within
that time period, the cause will be dismissed with prejudice.