Facts

Honey Bum LLC and Fashion Nova Inc. are competing online retailers specializing in fast fashion. Honey Bum and Fashion Nova are both social-media-driven companies that offer trendy, cost-conscious clothing and fashion goods to a similar customer base--primarily, women in their teens through early 30s. Both companies rely heavily on social media influencers to advertise their products. According to Honey Bum, Fashion Nova and Honey Bum source their products from similar vendors in Los Angeles. Honey Bum alleges that around October 2017, about 30 vendors boycotted Honey Bum. Honey Bum subsequently filed an action against Fashion Nova and Richard D. Saghian, the Founder and CEO of Fashion Nova.

PLAINTIFF'S CONTENTIONS: Plaintiff contended that defendants violated Section 1 of the Sherman Antitrust Act by acting, conspiring and/or contracting to impose restraints on trade or commerce; violated Section 2 of the Sherman Antitrust Act by monopolizing, attempting to monopolize and/or conspiring with others to monopolize trade or commerce; and/or tortuously, knowingly and intentionally interfered with plaintiff's business and/or contracts, each of which harmed plaintiff. Specifically, plaintiff alleged that, using monopolistic tactics, defendants unlawfully attempted to place a stranglehold on the Los Angeles-sourced fast fashion market and stifle its newest competitor--Plaintiff. Plaintiff alleged that it was told by numerous vendors that defendant had threatened to cancel its own orders and withhold its future business if certain vendors accepted orders from, or did business with, plaintiff. Plaintiff claimed that it contacted defendant Saghian via text to ask him not to "block supply." Plaintiff alleged that, in response, defendant Saghian did not deny employing the monopolistic tactic and admitted: "I only told a couple of my vendors lol." According to plaintiff, defendant pressured over 30 vendors to refuse selling to plaintiff, and the vendors agreed with each other to stop doing business with plaintiff. Plaintiff argued that this hub-and-spoke group boycott conspiracy was unreasonable per se. Plaintiff further argued that the vendors' refusal to sell to plaintiff was against their self-interest, which served as a "plus factor" tending to establish a horizontal agreement among the boycotting vendors.

DEFENDANT'S CONTENTIONS: Defendants denied all contentions. In March 2021, defendants successfully won their Motion to Dismiss with respect to Honey Bum's claims under Section 2 of the Sherman Act for monopolization. Defendants argued that Honeybum failed plausibly to plead that Fashion Nova maintains market power within a relevant market, which is a necessary element of that claim. Following the dismissal, defendants argued that Honeybum's Section 1 group boycott claim also lacked merit because there was no horizontal agreement among the fashion vendors to refuse to sell to Honey Bum. Moreover, plaintiffs failed to show any of the "plus factors." Despite plaintiff's contentions, vendors' refusal to sell to Honey Bum is not necessarily against their economic self-interest when each had a unilateral, or individual, incentive to stop selling to Honey Bum: a desire to continue doing business with Fashion Nova, the biggest player in the fast fashion industry.

Result

Summary judgment was granted in favor of Fashion Nova.