A recent decision out of the United States District Court for the District of Minnesota may prove controversial, Faegre Baker Daniels counsel Dick Wegener told Bloomberg BNA. The court decided not to dismiss claims brought by small food packaging producer Inline Packaging LLC against Graphic Packaging Intl. Inc., a much larger competitor, alleging that the latter was selling discount bundles for less than the cost of production. Inline’s claim was based entirely on its argument that its manufacturing costs are lower than Graphic Packaging’s—a position that Wegener said should have been insufficient to survive dismissal.
“When a plaintiff is unable to allege that a competitor is selling below cost, it is far from a ‘reasonable inference’ for the court to conclude otherwise” based on efficiency claims alone, Wegener said.
“While production efficiencies in terms of automation, line speeds and other technology may result in a lower manufacturing cost, it does not follow that a defendant without the same production efficiencies must be selling below cost,” Wegener said. “The court's conclusion that it is ‘reasonable to infer' that defendant is selling below cost solely because plaintiff claims to be a more efficient producer seems to be anything but reasonable.”