Faire Wholesale Wins Dismissal With Prejudice of Monopolization Claims

Paul, Weiss won a major victory for Faire Wholesale, Inc., an AI-powered online wholesale marketplace platform, in an antitrust suit brought by competitor Tundra, Inc., obtaining the dismissal of the case with prejudice.

Tundra sued in the Northern District of California in May 2023, alleging monopolization and unfair competition claims under the federal Sherman Act and California state law. Tundra claimed that Faire dominates 90% of the market for online wholesale marketplaces by implementing exclusionary agreements with brands and retailers to thwart competition from other market participants.

We secured the dismissal of the lawsuit without prejudice in February 2024, when U.S. District Judge Araceli Martínez-Olguín held that Tundra’s antitrust claims fail at the antitrust threshold of market definition. Judge Martínez-Olguín did not reach the parties’ remaining arguments regarding Faire’s allegedly anticompetitive contracts and conduct at that time.

Tundra filed an amended complaint in March 2024, and we moved to dismiss, asserting that Tundra failed to show that there was any anticompetitive term in Faire’s terms of service; that it failed to allege any plausible case for de facto exclusive dealing, and that it failed to remedy its market definition defects underscored by the court in its decision dismissing the prior complaint.

In her latest decision, Judge Martínez-Olguín dismissed Tundra’s antitrust claims and its state law claim for tortious interference without leave to amend. The judge found that “Tundra fail[ed] to plausibly allege an anticompetitive exclusive dealing arrangement,” noting that “Faire’s Terms are easily terminable by either side.” She ruled that, due to “the absence of the coercive circumstances necessary to support [a theory of de facto exclusivity] in the Ninth Circuit,” Tundra’s claims fail as a matter of law.

The Paul, Weiss team includes litigation partner Katherine Forrest and counsel Daniel Crane.