WHITE PLAINS, N.Y. (Legal Newsline) - A pie company has filed a class action lawsuit against Comtec Industries Ltd. after it claims Comtec prevented its customers from buying products from its rivals in order to maintain a monopoly.
Savory Pie Guy LLC claims Comtec devised and implemented a scheme involving various acts, including improperly refusing to deal with its customers who purchased dough forming equipment, parts and/or services from its competitors, for the anti-competitive purpose of impeding rivals so that the defendant could sell its products at "supracompetitive prices," according to a complaint filed Sept. 17 in the U.S. District Court for the Southern District of New York.
Savory Pie Guy claims the defendant is the largest player in manufacturing and selling dough forming equipment and supplies at least 90 percent of the dough forming equipment in the entry-level market in the United States.
"In order to secure and maintain defendant's monopoly power, defendant implemented and enforced a policy and practice of prohibiting its customers from purchasing dough forming equipment, parts or services from any of defendant's competitors," the complaint states. "If defendant learned that its customers purchased dough forming equipment, parts or services from its competitors, defendant anti-economically banned the customer from ever purchasing dough forming equipment, parts or services from defendant."
The defendant refuses to deal with customers who conduct business with its competitors even if the customer is not actually using any parts obtained from competitors, according to the suit.
SPG claims the defendant's anti-competitive conduct has fixed, raised, maintained and/or stabilized the price of dough forming equipment and parts at supra-competitive levels.
Comtec has also overcharged the plaintiff and other direct purchasers of dough forming equipment and parts by depriving them of the benefits of competition and lowered the supply of products and services than there would have been in a competitive market, according to the suit.
"Defendant attempted to monopolize and did monopolize the relevant market by...refusing to deal with customers that purchase dough forming equipment, parts or service from defendant's competitors and exercising price control over service and parts for pressing machines," the complaint states. "Defendant's actions lack any business rationale consistent with efficiency sufficient to motivate such a policy."
In spring 2012, SPG contacted Comtec to request a customized die set for its pressing machine and the defendant made and sold SPG a set of three dies and shipped them to SPG in New York, according to the suit.
SPG claims in summer 2012, it contacted the defendant and requested additional customized die sets for its pressing machine and it made multiple phone calls to request the diet set. When the defendant did not return SPG's calls, it decided to look elsewhere and in September 2o12, it contacted Inline Pie, one of Comtec's competitors, and was provided with the die set for mini-pies, it says.
"Ultimately, plaintiff decided to focus on its existing business creating regular sized pies and never used the mini pie die set..." the complaint states.
In October, Sean Mandel, SPG's owner, attended the International Baking Industry Exposition and the defendant had a booth and was displaying its new semi-automatic pressing machine, according to the suit.
SPG claims Mandel discussed the new machine with Comtec's president, Jim Reilly, asked if the die sets he'd purchased in 2012 could be used in the new machine and was told they could with some modifications. When Mandel asked if his third-party pie sets would work, Reilly told him that it should not be a problem, SPG claims.
"Shortly thereafter, on Oct. 21... Mandel contacted defendant to request a written quotes for the Comtec 2900 pressing machine so that he could provide it to his bank," the complaint states. "Joseph Reilly, Comtec's vice president, responded that he was busy but he would send the requested quote shortly."
When the plaintiff did not receive the requested quote, Mandel again contacted the defendant and Comtec did not return the phone call. However, he received a letter dated Nov. 13 that stated that because he was using third-party die sets, it would not provide him with any future parts, equipment or service, SPG claims.
"Although plaintiff informed defendant at the IBIE and again in email correspondence that it was not using any third party dies in its pressing machine and that it wanted to continue to purchase equipment from defendant, defendant refused to do any more business with plaintiff," the complaint states.
On March 27, the defendant filed a lawsuit against Inline Pie, alleging that it engaged in misconduct by copying its manual and selling aftermarket dies for the defendant's pressing machine.
SPG claims the defendant violated the Sherman Antitrust Act and caused SPG damages.
SPG is seeking class certification and compensatory damages. It is being represented by Adam J. Gutride, Seth A. Safier and Kristen G. Simplicio of Gutride Safier LLP.
The case was assigned to District Judge Vincent L. Briccetti.
U.S. District Court for the Southern District of New York case number: 7:14-cv-07527
From Legal Newsline: Kyla Asbury can be reached at email@example.com.