Table saws and Twombly: the Fourth Circuit upholds an antitrust claim against big table-saw manufacturers

SD3, LLC v. Black & Decker (U.S.) Inc., No. 14-1746 (4th Cir. Sept. 15, 2015).

SawStop is an Oregon company that has patented a finger-saving device for table saws. The device applies a small amount of electrical voltage to the saw, and then monitors the current. Because the human body is more conductive than wood, any contact with the body will change the current and trigger a brake that stops the saw immediately. 

SawStop alleges that a group of table-saw manufacturers conspired to boycott its product, thereby violating the Sherman Act. Initially, table-saw manufacturers were receptive to SawStop, but then they became concerned that one manufacturer’s adoption of the technology might open the others to product liability. As a result, the manufacturers met in October 2001 and allegedly agreed to a boycott. Soon thereafter, contract negotiations between SawStop and two table-saw manufacturers ended with little explanation. And, around the same time, contract negotiations with a third manufacturer ended when the manufacturer demanded that SawStop take a tiny royalty and indemnify the manufacturer for liability—a demand that SawStop sees as pretextual.

Citing Bell Atlantic Corp. v. Twombly, the district court dismissed SawStop’s antitrust claims as implausible.

A majority of this Fourth Circuit panel now partly reverses this dismissal. While upholding the district court’s dismissal of some claims, the majority holds that SawStop has plausibly alleged that the table-saw manufacturers agreed to boycott its product. Twombly, says the majority, holds that an antitrust conspiracy claim must plead parallel conduct by the conspirers—plus something “more.” SawStop has pleaded parallel conduct: some manufacturers stopped negotiations, another made what appears to be a bad-faith offer, and the others refused to negotiate at all. SawStop has also pleaded the required “more”: it has offered a detailed story about the October 2001 manufacturer meeting in which representatives from the manufacturers agreed to the boycott. Plus, SawStop has offered a plausible motive for this boycott: fear of product liability. 

Judge Agee authors the panel majority’s opinion, while Judge Wynn writes a concurrence that responds to Judge Wilkinson’s partial dissent. That dissent, in turn, argues that Twombly requires dismissal of all of SawStop’s claims, and disagrees with the majority on just about every point. It deems the allegations of parallel conduct insufficient, and finds the allegations about the October 2001 meeting, and about the manufacturers’ motives, to be implausible.