Doheny Enterprises Inc v. Clearon Corporation

On April 06, 2021, Doheny Enterprises, Inc. (“Doheny'' or “Plaintiff”), represented by Jeffery M Cross of Freeborn & Peters LLP, filed an antitrust action against Clearon Corporation (“Clearon” or “Defendant”), seeking damages, enjoinment and a decree for allegedly unlawfully monopolizing market by eliminating Doheny Enterprises, Inc. (“Doheny''). This case was filed in the U.S. District Court for the Eastern District of Wisconsin with Judge J. P. Stadtmueller presiding. 

In its complaint, the Plaintiff alleged that, “Defendant has attempted to monopolize and restrain trade in the United States market for the sale on the Amazon Internet platform of chlorinated isocyanurates – often referred to as “chlorinated dry bleaches” or “CDBs” – which are used by consumers to clean swimming pools of bacteria and algae. Clearon attempted to obtain monopoly power in a second market – the sale of chlorinated dry bleaches on the Amazon Internet platform – by eliminating from that second market Doheny Enterprises, Inc. (“Doheny”), which was a more efficient and lower- priced competitor. Clearon then used its monopoly power in that market – the manufacturing market – to refuse to deal with Doheny. There was no efficiency justification for such refusal despite Clearon having dealt with Doheny for over ten years. Forcing Doheny out of the market for sales through Amazon allowed Clearon to obtain monopoly power in this second market and to raise prices above the competitive levels that Doheny had been charging. Clearon’s refusal to deal with Doheny also violated the Wisconsin Fair Dealership Law, which prohibits a grantor of a right to sell a product from terminating a dealership agreement to resell that product without good cause”.

The Plaintiff further alleged that, “Doheny Enterprises has served as a distributor and dealer for Clearon- manufactured chlorinated dry bleaches – including both the NAVA and Doheny brand names – for over ten years. Prior to August 2020, Clearon tried to compete with Doheny by selling NAVA- brand products directly to consumers on the Amazon Internet platform. Prior to August 2020, Clearon was not successful at competing with Doheny on the Amazon Internet platform because Clearon did not itself have distribution centers. Consequently, it was forced to use Amazon’s fulfillment centers. As set forth above, Amazon’s price structure for third-party resellers using the Amazon fulfillment centers results in higher prices than the prices that can be charged by a third-party reseller on Amazon that has its own distribution centers, such as Doheny. Clearon then abused that monopoly power by refusing to deal with Doheny – effectively eliminating Doheny as a competitor on the Amazon Internet platform.”

There are three claims for relief laid down by the Plaintiff. The first claim is for the alleged attempted monopolization of trichlor sold on the Amazon Internet Platform in Violation of Section 2 of The Sherman Act, because Clearon has a dangerous probability of achieving monopoly power in the U.S. market for the sale of trichlor on the Amazon Internet platform. The second claim is for the alleged attempted monopolization of dichlor sold on the Amazon Internet platform in Violation of Section 2 Of the Sherman Act. The third claim is for the alleged violation of the Wisconsin Fair Dealership Law. 

In its prayer for relief, the Plaintiff has requested the court that Clearon’s above alleged violations be adjudged and decreed to be unlawful restraints of trade and monopolization in violation of Section 2 of the Sherman Act; that Doheny recover threefold the damages to have been sustained by it; that Clearon be enjoined from continuing its unlawful restraint of trade and monopolization; and such other relief that the court may seem proper and award costs of litigation. 

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