Loren Data Response To Motion To Dismiss

Case 8:10-cv-03474-DKC Document 14 Filed 03/23/11 Page 1 of 37
IN THE UNITED STATES DISTRICT COURT FOR MARYLAND, SOUTHERN DIVISION
LOREN DATA CORP *

P.O. Box 600
Indian Rocks Beach, Florida 33785 *
PLAINTIFF *
v. *
GXS, INC. * Case No. 1O-CV-03474-DKC

9711 Washingtonian Blvd.
Gaithersburg, Maryland 20878 *
DEFENDANT *
PLAINTIFF'S OPPOSITION TO DEFENDANT'S
MOTION TO DISMISS
Plaintiffs counsel, David Bird, Esq., moves that this Honorable Court deny the Motion to
Dismiss filed herein by the Defendant.
The Plaintiff has filed herewith a Memorandum of Law in Opposition to the Defendant's
Motion as well as the Plaintiffs First Amended Complaint.
Respectfully submitted,
ISI
David Bird, Esq.

Bar # 23907
12340 Pleasant View Dr.
Fulton, Maryland 20759
301-854-2690
301-854-3729 (FAX)
birdlaw@verizon.net
IN THE UNITED STATES DISTRICT COURT FOR MARYLAND, SOUTHERN DIVISION

LOREN DATA CORP *
P.O. Box 600
Indian Rocks Beach, Florida 33785 *
PLAINTIFF *
v. *
GXS, INC. * Case No. 10-CV-03474-DKC

9711 Washingtonian Blvd.
Gaithersburg, Maryland 20878 *
DEFENDANT *
MEMORANDUM OF LAW IN OPPOSITION
TO THE DEFENDANT'S MOTION TO DISMISS
/S/
David Bird, Esq.

Bar # 23907
301-854-2690
301-854-3729 (FAX)
birdlaw@verizon.net
Fulton, Maryland
March 23,2011
TABLE OF CONTENTS
PRELIMINARY STATEMENT P.l
ARGUMENT
I GXS HAS ENGAGED IN CONDUCT WHICH

IS A VIOLA nON OF SECTION ONE OF THE SHERMAN
ACT UNDER BOTH THE PER SE AND RULE OF REASON
MODES OF ANALYSIS P.2
A. GXS's Concerted Refusal To Deal is a Per Se Violation Of

the Sherman Act P. 2
B. GXS Has Also Violated Section One of The Sherman Act Under
the Rule Of Reason Test P.5
II THE COMPLAINT STATES A COGNIZABLE CLAIM

FOR MONOPOLIZATION UNDER SECTION TWO OF THE
SHERMAN ACT AND ALLEGES SUFFICIENT
SUPPORTING FACTS P.6
A. The Complaint Contains Multiple Allegations of

GXS' Refusal to Deal with Loren Data P.6
1. GXS' Actions Towards Loren Data Fall

Outside of Its Limited Right to do Business with
Whomever It Chooses. P. 7
2. Loren Data is Not a "Freerider" P.9
3. GXS' Asserted Legitimate Business

Justifications are Vague and Refutable P.ll
11
4. The Complaint Alleges Several Past Refusals to

Deal in Addition to Anticipated Refusals Likely to
Occur in the Future. P. 13
B. The Complaint Alleges, Without Internal Contradiction,

that the GXS Network is an Essential Facility P.13
1. The Essential Facilities Doctrine Has Not Been

Repudiated by the Supreme Court and Has Been
Recognized by the Fourth Circuit. P. 14
2. The GXS Network Constitutes an

Essential Facility P. 15
3. The Complaint Adequately Alleges GXS'

Possession of Monopoly Power P. 16
4. GXS Has Created and Enforced Barriers to Entry

in the EDI Industry to Maintain their Dominant P. 18
III THE COMPLAINT STATES A COGNIZIBLE CLAIM

FOR ATTEMPTED MONOPOLIZATION UNDER SECTION
TWO OF THE SHERMAN ACT AND
ALLEGES SUFFICIENT SUPPORTING FACTS P.20
A. The Complaint Adequately Alleges Anticompetitive Conduct

and Specific Intent to Monopolize P.20
B. The Complaint Adequately Alleges, and Indeed There is,

a Dangerous Probability of GXS Successfully
Monopolizing the EDI Market. P.2l
IV THE COMPLAINT STATES A COGNIZABLE ANTITRUST

INJURY AND ALLEGES SUFFICIENT SUPPORTING FACTS P.22
V THE PLAINTIFF HAS ALLEGED ANTITRUST INillRY

IN THE RELEVANT MARKET P.24
III
VI MARYLAND ANTITRUST ACT CLAIMS P. 26
VII THE PLAINTIFF'S CLAIM FOR TORTIOUS INTERFERENCE

IS SUPPORTED BY THE COMPLAINT AND IS NOT ENTIRELY
CONTINGENT ON THE ANTITRUST CLAIM P.27
VII THE PLAINTIFF HAS PLED COGENT AND SUFFICIENT

FACTS TO SUPPORT ITS BREACH OF CONTRACT CLAIM P.28
TABLE OF AUTHORITIES
Cases Page(s)
Abcor Corp. v. AM Intern., Inc.,

916 F.2d 924,929-930 (C.AA (Va.), 1990) 10
Alabama Power Co. v. F.C.C.,

311 F.3d 1357, 1372n.3 (1lthCir., 2002) 17
Alaska Airlines, Inc. v. United Airlines, Inc.,

948 F.2d 536, 544 (9th Cir. 1991) 15
Alexander & Alexander, Inc. v. B. Dixon Evander & Associates, Inc.,

336 Md. 635, 652,650 A 2d 260, 1994 28
America Online, Inc. v. GreatDeals.net,

49 F. Supp. 2d 851, 862 (E.D. Va. 1999) 14
ANA Towing, Inc. v. Prince George's County,

552 A2d 1295, 314 Md. 711, footnote 3, 1988. 26
AP. v. U.S. Tribune Co., et.al.,

326 U.S. 1,65 S. Ct. 1416,891. Ed. 2013 (1945) 4
Apartment Source of Philadelphia v. Philadelphia Newspapers,

Civ. A No. 98-5472, 1999 WL 191649, at 7 (B.D. Pa. Apr. 1, 1999) 15
Aspen Skiing Company v. Aspen Highlands Skiing Corporation,

472 U.S. 585, 105 S.Ct. 2847, 86 1.Ed.2d 467 (1985) 7,8,21
IV
Assn. General Contractors of Cal. v. Cal State Council of Carpenters,

459 U.S. 519, 103 S.Ct. 897, 74L.Ed2d 723 (1983) 26
Cavalier Telephone v. Verizon Virginia,

330 F.3d. 461 (4th Cir., 2003) 6
Com-Tel, Inc. v. DuKane Corp.,

669 F2d 404, 408-409 (6th Cir., 1982) 3
City of Anaheim v. S. Cal. Edison Co.,

955 F.2d 1373, 1380 n.5 (9th Cir. 1992) 15
Continental Airlines Inc., et.al. v. United Airlines, Inc., et.al,

277 F.3d 499,508-509 (4th Cir. 2002) 5
Cyber Promotions, Inc. v. America Online, Inc.,

948 F. Supp. 456,463 (E.D. Pa. 1996) 15
Deiter v. Microsoft Corp.,

436 F.3d 461, 467 (4th Cir., 2006) 6
Fashion Originators Guild of America v. F. T. C.,

312 U.S. 457, 312 U.S. 668, 61 S.Ct. 703,85 L. Ed 949 (1941) 3
General Leaseways, Inc. v. National Truck Leasing Assn.,

744 F2d 588 (4th Cir. 1984) 5
Hecht v. Pro-Football, Inc.,

570 F.2d 982, 992-93 (D.C. Cir. 1977) 15
Hospital Bldg. Co. v. Trustees of Rex Hosp.,

425 U.S. 738, 746, 96 S.Ct. 1848, 1853,48 L.Ed.2d 338 (1976) 1
In re Microsoft Corp. Antitrust Litigation,

237 F.Supp.2d 639,646 (D. Md., 2002) 17
Klor's v. Broadway-Hale Stores, Inc.

359 U.S. 207, 79 S. Ct. 705, 3 L. Ed. 741 (1959) 4,26
Laurel Sand & Gravel, Inc. v. CSX Transp., Inc.,

924 F.2d 539 (C.A.4 (Md.), 1991) 11, 13
v
Lee-Moore Oil Co. v. Union Oil Co. of California,

599 F.2d 1299, 1304 (4th Cir. 1979). 6
MCI Communications v. American Telephone and Telegraph Co.,

708 F.2d 1081, 1132-33 (7th Cir.) 14
Migdal v. Rowe Price-Fleming Int'l, Inc.,

248 F.3d 321, 325, (4th Cir., 2001) 1
Murrow Furniture Galleries, Inc. v. Thomasville Furniture Indus., Inc.,

889 F.2d 524, 529 (4th Cir. 1989) 1, 12
Natural Design, Inc. v. Rouse Co.,

302 Md. 47,485 A 2d 663, 1984. 27
Northern Pacific Railway Co. v. U.S.,

356 U.S. 1, 78 S.Ct. 514,518,2 L.Ed 2d. 545 (1958) 3,5
Northwest Wholesale Stationers, Inc., v. Pacific Stattionary and Printing Co.,

472 U.S. 284, 296, 105 S.Ct. 2613, 86 L. Ed. 2d 202 (1985) 4
Novell, Inc. v. Microsoft Corp.,

505 F.3d 302,308 (4th Cir., 2007) 17,19,25
Radiant Burners v. Peoples Gas Light and Coke Co.,

364 U.S. 656, 81 S. Ct. 365, 5 L. Ed 2d 358 (1961) 4
Rickards v, Canine Eye Registration Foundation,

783 F. 2d 1329 (9th Cir. 1986) 3
Spectrum Sports, Inc v. Quillan,

506 U.S. 447,456 (1993) 20
Standard Oil of N.J. v. U.S.,

221 U.S. 1,31 S. Ct. 502, 55 L.Ed. 619 (1911) 2
Times-Picayune Publ'g Co. v. United States,

345 U.S. 594, 626 (1953) 20
Valley Liquors, Inc. v. Renfield Importers, Ltd.

678 F 2d 742, 745 (7th Cir. 1982) 6
VI
United States v. National Assn. of Securities Dealers, Inc.,

422 U. S., 694 (1975) 9
United States v. Colgate & Co.,

250 U.S. 300, 39 S.Ct. 465, 63 L.Ed. 992 (1919) 7
USA. v. Microsoft Corp.,

253 F.3d 34, 49 (D.C. Cir., 2001) 16, 17, 18, 19,20,25
Verizon Communications Inc. v. Law Offices of Trinko,

540 U.S. 398,408 (2004) 7,13
White Motor Co. v. U.S.,

372 U.S. 253, 263, 83 S. Ct. 696,702, 9 L. Ed 2d 738 (1963) 3
Statutes and rules
15 U.S.C §1 1
15 U.S.C. §2 6,13
Md. Code, Com. Law Art., §§ 11-204(a)(l) and (2) 26
Md. Code, Com. Law Art., § 11-204(a)(3) 26,27
Md. Code, Com. Law Art., § 11-201(g) 26
F.R.C.P. 12(b)(6) 1
Vll
PRELIMINARY STATEMENT
In its Motion to Dismiss Defendant GXS makes various arguments that the facts alleged
by the Plaintiff are not true. It may well argue some of those points at trial. However, at this
juncture the court must accept "... all well-pleaded allegations in the plaintiffs complaint as true
unless it appears certain that the plaintiff cannot prove any set of facts in support of his claim
entitling him to relief." Migdal V. Rowe Price-Fleming Int'l, Inc., 248 F.3d 321,325, (4th Cir.,
2001). The threshold for dismissal on a 12(b)(6) motion is a high one. The Supreme Court has
held that, "a complaint should not be dismissed for failure to state a claim unless it appears
beyond a doubt that that plaintiff can prove no set of facts in support of [its] claim which would
entitle [it] to relief." Hospital Bldg. Co. V. Trustees of Rex Hosp., 425 U.S. 738, 746, 96 S.Ct.
1848, 1853,48 L.Ed.2d 338 (1976) (citations omitted). The threshold for a 12(b)(6) dismissal in
an antitrust case is even higher. The Fourth Circuit has noted that in addition to the rigorous
standard for dismissals set by the Supreme Court, in "antitrust cases, where the proof is largely in
the hands of the alleged conspirators, dismissals prior to giving the plaintiff ample opportunity
for discovery should be granted very sparingly." Murrow Furniture Galleries, Inc. V.
Thomasville Furniture Indus., Inc., 889 F.2d 524,529 (4th Cir. 1989). Given the high threshold
for dismissal, and the fact that Plaintiff has, as this brief will elucidate, set forth several claims
upon which relief may be granted, Loren Data respectfully requests that Defendant GXS' Motion
to Dismiss be denied.
In addition to the following brief, the Plaintiff has filed a Statement of Supplemental
Facts that will clarify any ambiguity in its original complaint, particularly with regard to market
definition and damages.

ARGUMENT
GXS HAS ENGAGED IN CONDUCT WHICH IS A

VIOLATION OF SECTION ONE OF THE SHERMAN ACT
UNDER BOTH THE PER SE AND RULE OF REASON
MODES OF ANALYSIS
A. GXS's Concerted Refusal To Deal is a Per Se Violation Of Section One of

The Sherman Act
Plaintiff's amended complaint alleges that GXS has denied interconnects to Loren Data
while it has combined with all other VANs at scale to allow this facility, and it has expressly
stated its intention to deny Loren Data's access to TGMS via its current transit agreement with
Inovis or by way of any similar transit agreement with any other VAN that has access to TGMS.
(Amen. Compl. 1115 thru 19)
A combination to deny a service to one business that is readily available to all others in
the same horizontal trade is a group boycott and a per se violation of section one of the Sherman
Act. Section one of the Sherman Act was enacted in the 1890's to prohibit "[e]very contract,
combination in the form of trust or otherwise, in restraint of trade or commerce among the
several States, or with a foreign nation .... " 15 U.S.C. § 1.
The Congress declared that monopolies are a threat to the free enterprise system that has
made this country great, and that monopolies further discourage or prevent competing businesses
from entering the market to the detriment of the public. Recognizing that every contract,
combination or conspiracy could arguably be considered a restraint oftrade, the Supreme Court
imposed a rule of reason standard to the prohibited conduct. See Standard Oil of N.J. v. U.S.,
2
221 U.S. 1,31 S. Ct. 502, 55 L.Ed. 619 (1911). To establish a section one violation a litigant
must show three elements: (1) an agreement or conspiracy, (2) resulting in an unreasonable
restraint of trade, and (3) causing antitrust injury. See Rickards v. Canine Eye Registration
Foundation, 783 F. 2d 1329 (9th Cir. 1986).
The courts in a long line of cases, however, have targeted certain types of market
behavior and deemed them conclusively presumed illegal without further examination under the
rule of reason because they are plainly anticompetitive and lack any redeeming virtue. In
Northern Pacific Railway Co. v. U.S., the Supreme Court explained its reasons for formulating
categories for per se illegality treatment:
[T]here are certain agreements or practices which because of their

pernicious effect on competition and lack of any redeeming virtue are
conclusively presumed to be unreasonable and therefore illegal without elaborate
inquiry as to the precise harm they have caused or the business excuse for their
use.
Northern Pacific Railway Co. v. U.S., 356 U.S. 1, 78 S.Ct. 514,
518, 2 L.Ed 2d. 545 (1958).
" 'Group boycotts fall within one of the forbidden per se categories. Horizontal restraints
alone have been characterized as 'naked restraints of trade with no purpose except stifling
competition.' White Motor Co. v. U.S., 372 U.S. 253, 263,83 S. Ct. 696,702, 9 L. Ed 2d 738
(1963). They are, therefore,per se violations of the Sherman Act." Com-Tel, Inc. v. DuKane
Corp., 669 F2d 404,408-409 (6th Cir., 1982).
Horizontal and per se illegal boycotts have been found in cases where fashion originators
agreed with each other to refuse to deal with third parties (See Fashion Originators Guild of
America v. F. T. C., 312 U.S. 457, 312 U.S. 668, 61 S.Ct. 703, 85 L. Ed 949 (1941)); where the
manufacturer of furnaces could not sell his product because an association of other
manufacturers, who also controlled the supply of gas, would not sell gas for furnaces it did not
3
approve (See Radiant Burners v. Peoples Gas Light and Coke Co., 364 U.S. 656, 81 S. Ct. 365, 5
L. Ed 2d 358 (1961)); where a large retailer conspired with major appliance manufactures to not
deal with an independent appliance store (See KIor's v. Broadway-Hale Stores, Inc. 359 U.S.
207, 79 S. Ct. 705,3 L. Ed. 741 (1959)); and where a large news organization drafted its by-laws
in such a manner that its members could not sell any part of their news to any of their non-
member competitors. (See A.P. v. U.S. Tribune Co., et.al., 326 U.S. 1,65 S. Ct. 1416,89 L. Ed.
2013 (1945)).
"In these cases, the boycott often cut off access to a supply, facility, or market necessary
to enable the boycotted firm to compete." Northwest Wholesale Stationers, Inc., v. Pacific
Stattionary and Printing Co., 472 U.S. 284, 296, 105 S.Ct. 2613, 86 L. Ed. 2d 202 (1985).
Considering the modest size of Loren Data in comparison to the size ofGXS in the North
American EDI market and its leverage over other VANs to the exclusion of Loren Data, this case
cries out for the application of the per se doctrine. Consider the words of the Supreme Court in
Klor's that such a combination" ... is not to be tolerated merely because the victim is just one
merchant whose business is so small that his destruction makes little difference to the economy ..
. . . . Monopoly can surely thrive by the elimination of such small businessmen, one at a time, as
it can by driving them out in large groups." KIor's, 359 U.S. at 213.
We reiterate that GXS has drafted a business model that excludes interconnects between
it and Loren Data, either directly, or indirectly by way of a transit agreement with another VAN
such as the current agreement with Inovis or prospectively with any other VAN that has an
interconnect with GXS. GXS has stated in writing that this is its standard agreement for
interconnects with all other VANs (Amend. Compl. ~ 19). It has, therefore, "combined" with all
other VANs in the industry to the exclusion of Loren Data. This is a classic horizontal boycott.
4
B. GXS Has Also Violated Section One of The Sherman Act Under the Rule Of
Reason Test
"In determining whether a plaintiff has proved that a horizontal agreement

violates Section 1, the Supreme Court has authorized three methods of analysis:
(1) per se analysis, for obviously anticompetitive restraints, (2) quick-look
analysis, for those with some pro-competitive justification, and (3) the full "rule
of reason," for restraints whose net impact on competition is particularly difficult
to determine. The boundaries between these levels of analysis are fluid; "there is
generally no categorical line to be drawn between restraints that give rise to an
intuitively obvious inference of anticompetitive effect and those that call for more
detailed treatment." Instead, the three methods are best viewed as a continuum, on
which the "amount and range of information needed" to evaluate a restraint varies
depending on how "highly suspicious" and how "unique" the restraint is."
Continental Airlines Inc., et.a!. v. United Airlines, Inc., et.al, 277
F.3d 499,508-509 (4th Cir. 2002) (citations omitted)
In the "continuum" analysis of this case the Plaintiff has posited "obviously competitive
restraints", and the Defendant has posited no "pro-competitive restraints" that would obviate its
highly suspicious conduct. Under the "rule of reason" test the conduct of the Defendant would
be measured against extensive analysis through discovery. That process imposes on the Plaintiff
a burden that:
Under the per se rule "... [A]voids the necessity for an incredibly
complicated and prolonged economic investigation into the entire history of the
industry involved, as well as related industries, in an effort to determine at large
whether a particular restraint has been unreasonable-an inquiry so often wholly
fruitless when undertaken."
Northern Pacific R.R. Co., 78 S.Ct. at 518.
If the Plaintiff must follow rule of reason of proof it is certainly prepared to do so. It has
shown that the Defendant, if not the monopolist at least the dominant player, has sufficient
market power to restrain competition substantially. (See generally General Leaseways, Inc. v.
National Truck Leasing Assn., 744 F2d 588 (4th Cir. 1984)). Market power is normally inferred
5
from possession of a substantial percentage of the sales in a market carefully defined in terms of
both product and geography. Valley Liquors, Inc. v. Renfield Importers, Ltd. 678 F 2d 742, 745
(7th Cir. 1982). "Concerted refusals to deal are condemned by the antitrust laws because their
purpose and effect is to reduce competition by driving the plaintiff from the market." Lee-Moore
Oil Co. v. Union Oil Co. of California, 599 F.2d 1299, 1304 (4th Cir. 1979).
II
THE COMPLAINT STATES A COGNIZABLE CLAIM FOR

MONOPOLIZATION UNDER SECTION TWO OF THE
SHERMAN ACT AND ALLEGES SUFFICIENT
SUPPORTING FACTS
To establish a violation of § 2 of the Sherman Act (15 U.S.C. §2), a plaintiff must prove
that a defendant "possesses monopoly power in the relevant market and 'willfully acquired or
maintained that power as distinguished from growth or development as a consequence of a
superior product.'" Deiter v. Microsoft Corp., 436 F.3d 461, 467 (4th Cir., 2006)(citing Cavalier
Telephone v. Verizon, Virginia, 330 F.3d 176, 183 (4th Cir. 2003). Loren Data has alleged that
GXS possesses monopoly power in the industry, and has alleged that GXS has engaged in
several forms of prohibited monopolistic conduct to acquire and maintain said power. All Loren
Data's allegations are supported by facts which suggest the existence of ample evidence to
support Loren Data's claims. As Loren Data has met its burden of pleading a monopolization
claim under § 2 of the Sherman Act, GXS' Motion to Dismiss must fail.
A. The Complaint Contains Multiple Allegations of GXS' Refusal to Deal with Loren Data
GXS' arguments involving the concept of "refusal to deal" are as follows: (1) GXS has a
right to do business (or refuse to do business) with whomever they choose (see Def.'s Mot.
Dismiss. 2, 22), (2) that they cannot be compelled to give away their product for free and/or do
business with a "freerider"(id. at 22), (3) that Loren Data has failed to plead facts showing that
6
GXS lacked a legitimate business justification for refusing to deal with Loren Data (id. at 26),
and (4) that since GXS has active connections to Loren Data, there has been no refusal to deal
(i4. at 23). All of these arguments must fail because they are premised on either incomplete
statements of law, or an inaccurate analysis of the facts in the present case.
1. GXS' Actions Towards Loren Data Fall Outside of Its Limited

Right to do Business with Whomever It Chooses.
GXS' Motion to Dismiss states that it "has no obligation to deal with Loren Data at all."
(Def. 's Mot. Dismiss, 23). In support of this assertion GXS relies on the Supreme Court
decisions in Verizon Communications Inc. v. Law Offices of Curtis V. Trinko and in United
States v. Colgate & Co. (Id. at 22.). The latter case is from 1919 and has been cited hundreds of
times for the general rule that a private company may deal with whomever they like. See
generally United States v. Colgate & Co., 250 U.S. 300, 39 S.Ct. 465, 63 L.Ed. 992 (1919).
However since 1919, the Supreme Court has several times recognized exceptions to that right.
One such exception is delineated in the Aspen Skiing Company v. Aspen Highlands Skiing
Corporation case. Aspen Skiing Company v. Aspen Highlands Skiing Corporation, 472 U.S.
585, 105 S.Ct. 2847, 86 L.Ed.2d 467 (1985) ("The absence of an unqualified duty to cooperate
does not mean that every time a firm declines to participate in a particular cooperative venture,
that decision may not have evidentiary significance, or that it may not give rise to liability in
certain circumstances. The absence of a duty to transact business with another firm is, in some
respects, merely the counterpart of the independent businessman's cherished right to select his
customers and his associates. The high value that we have placed on the right to refuse to deal
with other firms does not mean that the right is unqualified.") The Aspen exception applies
directly to the aforementioned general Colgate principle, as evidenced by the Supreme Court's
discussion of the two cases in Trinko. (See generally Verizon Communications Inc. v. Law
7
Offices of Trinko, 540 U.S. 398,408 (2004)
The Aspen decision recognized a refusal to deal claim when the monopolistic company,
Aspen Ski Co., terminated an established joint venture between itself and the Aspen Highlands
Skiing Corporation. See generally Aspen Skiing Company v. Aspen Highlands Skiing
Corporation, 472 U.S. 585, 105 S.Ct. 2847, 86 L.Ed.2d 467 (1985). The fact that the companies
had elected to do business with each other in a competitive market before Aspen Ski Co.
terminated the venture was essential to the Supreme Court's upholding the lower court's finding
that Aspen Ski Co. was in violation of section 2 of the Sherman Act. Id. at 603. (" ...the
monopolist did not merely reject a novel offer to participate in a cooperative venture that had
been proposed by a competitor. Rather, the monopolist elected to make an important change in a
pattern of distribution that had originated in a competitive market and had persisted for several
years.")
The current scenario does not involve GXS merely exercising its general right to choose
its business partners. Rather, as in Aspen, the scenario involves previous commercial
arrangements between GXS and Loren Data and a subsequent change to the pattern of
distribution set by such agreements. Loren Data has alleged, as in Aspen, that such past
agreements were commercially beneficial to GXS (at times to the detriment of Loren Data), and
that GXS refusals to deal were motivated by a desire to damage Loren Data at the cost of
damaging GXS' own business and the competitive EDI market itself. (CompI. ~ 36). The
parallels between the Aspen case and the case at hand strongly point to a valid refusal to deal
claim.
While the Trinko decision noted that the Aspen exception to the general right of a private
company to deal with whomever they chose is narrow, the court took pains to point out that the
8
I
exception still exists, and was not being overruled. See Trinko, 540 U.S. at 409-410.
Furthermore, Trinko involved a heavily regulated sphere of the telecommunications universe,
unlike the EDI Industry. The Trinko decision clearly indicates that if ever there is a time to
explore the boundaries of antitrust law to its fullest extent, it may be in the absence of regulatory
oversight. Trinko, 540 U.S. at 412 ("Just as regulatory context may in other cases serve as a
basis for implied immunity, see, ~ United States v. National Assn. of Securities Dealers, Inc.,
422 U. S., at 730-735, it may also be a consideration in deciding whether to recognize an
expansion of the contours of § 2.") Therefore, as Plaintiff's refusal to deal claims are based upon
a valid and pertinent legal principle, are supported by sufficient factual allegations in the
Complaint, and are not protected by regulatory oversight, Loren Data respectfully requests that
the Defendant's Motion to Dismiss be denied.
2. Loren Data is Not a "Freerider"
GXS' Motion to Dismiss goes to great lengths to portray Loren Data as a "freerider"
attempting to "offer all the benefits of being a GXS customer without making the investment,"
and use the court system "to bestow on it the customers and terms of business that Loren Data
has been unable to secure through its own acumen in the market." (Def.'s Mot. Dismiss. 2).
Such a portrayal can only be accomplished by an egregious misconstruction of the facts in this
case. Loren Data's complaint clearly states that, despite non-settlement interconnections being
the industry standard, Loren Data has in the past, and is currently, paying for data transit through
the GXS network. (Compl.j] 19,22-23). Furthermore, Loren Data has also clearly alleged its
ability to bring in customers willing to establish revenue-producing EDI routes with partners on
the GXS network. (Id. at" 17,19,36). Finally, GXS' characterization of Loren Data as a
"freerider" blatantly misstates the nature of the VAN-Interconnect business:
9
"VAN owners have from the beginning been able to transmit their trading partners' data
by means of non-settlement interconnects with other VANs for the benefit of trading
partners, i.e. data flows from a trading partner over interconnected VANs to the end user,
and fees are charged to the trading partners' clients on either end."
(Amend. CompI. Sum. ~ c)
GXS has cited to several cases in support of their "freerider" argument. The first case,
Abcor Corp v. AM Int'l is a case based on a discriminatory pricing theory in the printing
machine maintenance and repair industry. See generally Abcor Corp. v. AM Intern., Inc., 916
F.2d 924, 929-930 (C.A.4 (Va.), 1990). The "free riding" in Abcor involved Abcor's
unwillingness to maintain a stockpile inventory of its own, instead relying on AM International's
inventory of parts. The court reasoned that forcing AM International to allow Abcor direct
access to its inventory would be to impose all the associated inventory costs on AM
International, while allowing Abcor to free ride on AM International's investment. Abcor, 916
F.2d at 929-930.
The Abcor decision is largely inapplicable to the current case because the economics of
the printing machine maintenance and repair industry simply do not parallel the economics of a
networked industry. An interconnection between GXS and Loren Data would not place a one-
sided burden on GXS and allow Loren Data to "free ride," as both companies would share the
burden of managing the connection. (See CompI. ~ 14). Furthermore, interconnection in a
networked industry benefits both entities as it allows both to extend their respective networks to
reach new customers. GXS is aware of, and has advertised the beneficial effects of interconnects
on their own website. GXS FAQs, http://edi.gxs.comlfaqs#6 ("With an EDI VAN, not only can
you exchange documents with your trading partner, you can also exchange them between VANs.
This is often referred to as an 'interconnect'. These interconnects benefit companies by providing
10
them access to a larger base of trading partners throughout the world.") Thus, the burdens and
inequities which influenced the decision in Abcor simply are not present in this case. Rather,
Loren Data has alleged, and can prove, that by confining Loren Data's traffic to a commercial
mailbox, GXS is actually increasing its own support burden, as opposed to an interconnection.
(Id. at ~~ 14-15).
The Laurel Sand & Gravel case cited by GXS involves a company, Laurel Sand,
attempting to obtain "trackage" rights to the CSX railroad system. See generally Laurel Sand &
Gravel, Inc. v. CSX Transp., Inc., 924 F.2d 539 (C.AA (Md.), 1991). While the market
dynamics may therefore be closer to the case at hand, Laurel Sand can be clearly distinguished
from the current case. The Court in Laurel Sand found that CSX had several legitimate business
reasons for denying Laurel Sand trackage rights, such as the fact that trackage rights were not the
industry standard, and the granting of trackage rights would interfere with CSX's existing
business relationships with other rail lines. Id. at 545. Such findings are critically different from
the case at hand. Loren Data has alleged, and can prove, that unlike railway trackage rights in
Laurel Sand, interconnection is the industry standard in the current case. (CompI. -,r-,r 3, 21).
Furthermore, at issue in the case at hand is not only the terms of interconnection, but complete
disconnection from one or more of the GXS networks and Loren Data has alleged that
disconnection would bar it from competition in the EDI market, not simply diminish its
profitability. Finally, Loren Data has not alleged that an interconnection would interfere with
GXS' existing business relationships. Quite the opposite, Loren Data has alleged that GXS has
harmed several of its own existing business relationships by refusing an interconnect with Loren
Data. (id. at -,r 17, 33)
3. GXS' Asserted Legitimate Business Justifications are Vague and

Refutable
11
GXS has asserted two "legitimate" business justifications in defense of their refusal to
deal with Loren Data: (1) that Loren Data is a "bad" business partner (see Def.'s Mot. Dismiss.
27) ,and (2) that Loren Data is not a VAN. Id. GXS' support for their suggestion that Loren
Data is a bad business partner is Loren Data's "admission" that it was ambushed with $30,000 in
temporary mailbox fees while attempting to negotiate an interconnection with GXS. GXS'
support for their claim that Loren Data is not a VAN is, at this point, non-existent.
Loren Data has alleged, and can prove, that it is treated as a VAN by every other major
VAN in the EDI Industry. (Compl. 16). Indeed, Loren Data has been used as a VAN by parties
which transit critical and sensitive data, such as the U.S. Department of Defense. GXS'refusal
to recognize Loren Data as a VAN is an argument without substance - an excuse to discriminate
against Loren Data and attempt to eliminate it from the competitive market.
GXS' argument that Loren Data is a bad business partner is again, an argument without
substance. Loren Data has alleged that the $30,000 charged by GXS was not agreed upon by the
parties (Id. at 112), was unexpected and unprecedented (Id. at 116), and that even so, the debt
was eventually settled (Id. at 119). More importantly, Loren Data has alleged that the true
reason GXS refused to interconnect with Loren Data was to eliminate Loren Data as a
competitor in the market, evidenced by the fact that GXS went against the wishes of, and harmed
its own customers by refusing to deal with Loren Data. (Id. at 117,33). As previously
discussed, Motions to Dismiss should be granted sparingly in field of antitrust law as motive to
monopolize is difficult to prove without the opportunity to conduct discovery. Murrow Furniture
Galleries, Inc. v. Thomasville Furniture Indus., Inc., 889 F.2d 524,529 (4th Cir. 1989). Loren
Data believes that discovery will lead to evidence that GXS' refusal to deal with Loren Data was
not motivated by legitimate business justifications, but rather by monopolistic and
12
anticompetitve intentions. Plaintiff therefore respectively requests that GXS' Motion to Dismiss
be denied so that Loren Data be given the opportunity to conduct discovery in this matter.
4. The Complaint Alleges Several Past Refusals to Deal in Addition to

Anticipated Refusals Likely to Occur in the Future.
GXS makes the argument that because they still have active connections to Loren Data,
there has been no refusal to deal on their part. (Def.'s Mot. Dismiss. 23). The Complaint is rife
with alleged refusals to deal that reach beyond the imminently expiring contract. Paragraph
eight of the Complaint states "The merged entity of GXSlInovis has recently refused to continue
access to the GXS Tradanet network under Loren Data's contract with Inovis." (Complaint, ~ 8).
Paragraph nine of the Complaint states that GXS has expressed its intention to nullify Loren
Data's peer interconnects with IE and InovisWorks. (Id. at ~ 9). Additionally, paragraph
twenty-three ofthe Complaint sets forth what is effectively a refusal to deal by GXS. (Id. at ~
23). Countering Inovis' offer of$3500/mo with one of $ 13000/mo (including degraded service),
is a non-offer and a clear communication to Loren Data that GXS was unwilling to deal. As
Plaintiffs compliant clearly alleges several refusals to deal, Loren Data respectfully requests that
Defendant's Motion to Dismiss be denied on this ground.
B. The Complaint Alleges, Without Internal Contradiction, that the GXS

Network is an Essential Facility
GXS has cast doubt on the current existence of the essential facility doctrine, and asserted
that even if the doctrine is still intact, that the GXS network does not constitute an essential
facility. (Def.'s Mot. Dismiss. 27). The essential facility doctrine, while currently in flux, has
never been repudiated by the Supreme Court and is still a valid legal argument under § 2 of the
Sherman Act. Loren Data has alleged sufficient facts to satisfy each of the four factors of the
doctrine, as recognized by the Fourth Circuit.
13
1. The Essential Facilities Doctrine Has Not Been Repudiated by the

Supreme Court and Has Been Recognized by the Fourth Circuit.
There is no doubt that the existence of the Essential Facilities Doctrine is currently in
flux. However, GXS' claim that "[t]he Supreme Court has never recognized the essential
facilities doctrine," is true but incomplete. The Supreme Court has never recognized the
doctrine, nor repudiated it. Below is the exact quote from the Trinko opinion:
"We have never recognized such a doctrine, see Aspen Skiing Co., 472 U. S., at
611, n. 44; AT&T Corp. v. Iowa Utilities Bd., 525 U. S., at 428 (opinion of
BREYER, 1.), and we find no need either to recognize it or to repudiate it here. It
suffices for present purposes to note that the indispensable requirement for
invoking the doctrine is the unavailability of access to the "essential facilities";
where access exists, the doctrine serves no purpose. Thus, it is said that "essential
facility claims should ... be denied where a state or federal agency has effective
power to compel sharing and to regulate its scope and terms." P. Areeda & H.
Hovenkamp, Antitrust Law, p. 150, ~ 773e (2003 Supp.)."
Verizon Communications Inc. v. Law Offices of Trinko, 540 U.S.
398,411 (2004)
While the Supreme Court has neither formally endorsed nor repudiated the essential
facilities doctrine, the Fourth Circuit has, in the past, endorsed the doctrine. In the 1991 case of
Laurel Sand & Gravel, Inc. v. CSX Transp., Inc., the Fourth Circuit clearly recognizes the
doctrine, and its four elements. Laurel Sand. 924 F.2d at 544 ("In order for such a violation to be
shown four elements must be proven: (1) control by the monopolist of the essential facility; (2)
the inability of the competitor seeking access to practically or reasonably duplicate the facility;
(3) the denial of the facility to the competitor; and (4) the feasibility of the monopolist to provide
the facility. See MC! Communications v. American Telephone and Telegraph Co., 708 F.2d
1081, 1132-33 (7th Cir.), cert. denied, 464 U.S. 891, 104 S.Ct. 234, 78 L.Ed.2d 226 (1983).").
I
Loren Data has adequately pled each element of an Essential Facilities claim.
14
Paragraphs nine and thirty-five of the Complaint allege, and GXS has not and cannot plausibly
deny, that GXS controls the GXS network. (CompI. ~ 35). The same paragraphs also clearly
allege that Loren Data cannot feasibly duplicate the GXS network. Id. Paragraphs eight, nine,
twenty-three, and thirty-six ofthe Complaint all allege denials to access the GXS network, and
paragraphs nine, and twelve through fifteen allege and detail the feasibility of GXS providing
Loren Data with an interconnect to its network. (CompI. ~~ 8, 9, 12-15,23, and 36).
2. The GXS Network Constitutes an Essential Facility
GXS casts doubt on the classification of the GXS network as an essential facility. (Def.'s
Mot. Dismiss. 30). There is no one agreed-upon definition of "essential facility" in the courts,
but many cases have offered various definitions. Some examples are as follows:
• "[A] facility 'controlled by a single firm will be considered "essential"

only if control of the facility carries with it the power to eliminate competition
.... '" City of Anaheim v. S. CaI. Edison Co., 955 F.2d 1373, 1380 n.5 (9th
Cir. 1992) (quoting Alaska Airlines, Inc. v. United Airlines, Inc., 948 F.2d
536,544 (9th Cir. 1991)).
• "An 'essential facility' is one which is not merely helpful but vital
to the claimant's competitive viability." America Online, Inc. v.
GreatDeals.net, 49 F. Supp. 2d 851, 862 (E.D. Va. 1999) (quoting Cyber
Promotions, Inc. v. America Online, Inc., 948 F. Supp. 456, 463 (E.D. Pa.
1996)).
• "To be 'essential' a facility need not be indispensable; it is sufficient if
duplication of the facility would be economically infeasible and if denial of
its use inflicts a severe handicap on potential market entrants." Hecht v. Pro-
Football, Inc., 570 F.2d 982,992-93 (D.C. Cir. 1977).
• "[A] facility will not be deemed essential if equivalent facilities exist or
where the benefits to be derived from access to the alleged essential facility
can be obtained from other sources." Apartment Source of Philadelphia v.
Philadelphia Newspapers, Civ. A. No. 98-5472, 1999 WL 191649, at 7 (E.D.
Pa. Apr. 1, 1999).
In general, there are two main aspects of an essential facility. First, it must have a
significant impact on the competitive market, specifically on a competitor's ability to compete
within that market. Second, it must not be easily duplicated or circumvented. Both these
15
hallmarks of an essential facility are present in the case at hand. Loren Data has alleged, and can
prove, that access to the GXS network is critical to success in the EDI market and indeed to the
viability of Loren Data itself. (Compl. ~ 26). Additionally, Loren Data has alleged that it cannot
duplicate the GXS network, in part due to the effect of "entrenchment" in telecommunications
markets as discussed in United States v. Microsoft. (See infra Section 3). Finally, the Complaint
clearly catalogs Loren Data's past attempts to "circumvent" the necessity of an interconnection
to the GXS network, and the failure of such attempts due to GXS' continuing acquisition of
competing firms in the market. GXS has argued that Loren Data's ability to operate in the past
without an interconnection to GXS is proof that the GXS network is not essential. (Def.' s Mot.
Dismiss. 30). This argument completely ignores the growth due to acquisition of GXS. Loren
Data did not seek judicial remedy when it was first denied interconnection by GXS a decade ago.
It is only after exhausting all viable alternatives to such an interconnection, that Loren Data has
turned to the courts for help. The failure of Loren Data to duplicate and/or circumvent the GXS
network, despite repeated attempts to do so, creates a strong inference of the position of the GXS
network as an essential facility in the ED I market.
3. The Complaint Adequately Alleges GXS' Possession of Monopoly

Power
GXS argues that its alleged control of over 50% of the EDI Communications market is
below the accepted threshold for monopoly. Loren Data has alleged control of "over 50%" of
the market, but even so, a mere numerical cut-off cannot accurately assess GXS' current power
in the EDI industry. Due to the unique nature of network economics, even a 50% market share
can have huge ramifications in controlling the market; much larger, at least, than non-networked
markets. This concept has received some attention in the court systems, as exemplified by the
16
following passage in USA. v. Microsoft Corp.:
In markets characterized by network effects, one product or standard tends

towards dominance, because "the utility that a user derives from consumption of
the good increases with the number of other agents consuming the good." Michael
L. Katz & Carl Shapiro, Network Externalities, Competition, and Compatibility,
75 Am. Econ. Rev. 424, 424 (1985). For example, "[a]n individual consumer's
demand to use (and hence her benefit from) the telephone network ... increases
with the number of other users on the network whom she can call or from whom
she can receive calls." Howard A. Shelanski & J. Gregory Sidak, Antitrust
Divestiture in Network Industries, 68 U. Chi. L. Rev. 1, 8 (2001). Once a product
or standard achieves wide acceptance, it becomes more or less entrenched.
Competition in such industries is "for the field" rather than "within the field." See
Harold Demsetz, Why Regulate Utilities?, 11 J.L. & Econ. 55, 57 & n.7 (1968)
(emphasis omitted).
USA. v. Microsoft Corp., 253 F.3d 34, 49 (D.C. Cir., 2001)
Other courts have recognized the necessity of considering "network effects." The Fourth
Circuit has discussed "network effects" (referred to as "feedback effects") in an antitrust context
several times in cases such as Novell, Inc. v. Microsoft Corp. and In re Microsoft Corp. Antitrust
Litigation. Novell, Inc. v. Microsoft Corp., 505 F.3d 302, 308 (4th Cir., 2007); In re Microsoft
Corp. Antitrust Litigation, 237 F.Supp.2d 639,646 (D. Md., 2002). A more colloquial example
of a "network effect" was noted by the Eleventh Circuit in the Decision of Alabama Power Co.
v. F.C.C. The note reads:
Network effects often enhance the monopoly position of firms that operate
in industries where a large number of common customers is especially
advantageous. See Stuart M. Benjamin, Douglas G. Lichtman, and Howard A.
Shelanski, Telecommunications Law and Policy 616 (2002) ("All else equal,
wouldn't you have a strong incentive to select the phone company that had
the largest number of customers with whom you might want to converse?
Once you join, can you see how this same phenomenon would increase the
pressure on, say, your friends and family - which in turn would put
pressure on their friends and family - to join the same phone network, thus
increasing any monopoly tendency already at play in the market?"). The cost
of competing with an incumbent firm in a network industry may well be
insurmountable.
Alabama Power Co. v. F.C.C., 311 F.3d l357, l372 n.3 (11th Cir.,
2002 (emphasis added)
17
Many markets which exhibit "network effects" are subject to heavy regulation by
administrative agencies. Indeed, in the phone, cable, and other utility industries incumbent
networks have been required to open their networks to competitors for the good of the industry
and to benefit of the consumer. While many of the same economic intricacies that exist in the
telephone and cable industries are also exhibited in the EDI industry, there is currently no
regulation of interconnection. Therefore, a mere numerical analysis of the market share and
influence possessed by GXS is inappropriate in this case. Careful discovery and expert analysis
will show that GXS' power and influence in the EDI industry have reached monopolistic
proportions; and due to the lack of regulatory oversight it is imperative that Loren Data be
granted the full protection possible by the corpus of United States antitrust law.
4. GXS Has Created and Enforced Barriers to Entry in the EDI

Industry to Maintain their Dominant Position
Loren Data's complaint not only alleges the possession of Monopoly by GXS, but also
clearly describes efforts by GXS to bar entry into the EDI Market. Connection to GXS' network
is critical to being competitive in the EDI Market, and GXS has taken advantage of that fact by
denying interconnections to the GXS network, instead offering crippled "mailbox" service at
prices which are not economically viable. (Compl. ~~ 19, 23). Moreover, Loren Data alleges
that while using GXS' mailbox system, GXS actively degraded and modified the requirements
for said system, with the intent to interfere with Loren Data's network operations. (Id. at ~~ 19,
22).
Due to the rarity of evidence directly proving the existence of monopoly, courts have
turned to an examination of market structure. USA v. Microsoft Corp., 253 F.3d at 51. ("Because
such direct proof is only rarely available, courts more typically examine market structure in
18
search of circumstantial evidence of monopoly power. (citations omitted) Under this structural
approach, monopoly power may be inferred from a firm's possession of a dominant share of a
relevant market that is protected by entry barriers. id.)
By refusing to grant an interconnect to Loren Data, and offering only a prohibitively
expensive mailbox with crippled functionality, GXS has intentionally degraded the performance
of Loren Data's service. (Compl. ~~ 15, 19,21,22) The Fourth Circuit has recognized that
intentional degradation of a competitor's product is a type of anticompetitive behavior that
antitrust laws are designed to prevent. See Novell, Inc. v. Microsoft Corp., 505 F.3d at 316. In
Novell, the Plaintiff alleged that" Microsoft required Novell to use Windows-specific
technologies in order to be certified as Windows-compatible, degrading Novell's products'
performance on other operating systems and harming their advantageous compatibility." Id.
The parallels to the current case are undeniable, as GXS has made it clear that in order to connect
to the GXS network, Loren Data will have to do so on terms that not only degrade Loren Data's
ability to offer its customers a flexible and innovative service (Compl. ~ 19,22,32) but also
preclude the possibility of operating a profitable business (Id. at ~ 23).
Being forced to accept the degradation of a company's own product in order to connect to
the GXS network hamstrings a company's competitive ability and is, in effect, a barrier to entry
in the EDI Industry. GXS' erection of such protective barriers, in addition to their dominant
position in the market, are clear indicators of the possession of monopoly power. See USA v.
Microsoft Corp., 253 F.3d at 51.
19
III
THE COMPLAINT STATES A COGNIZIBLE CLAIM

FOR ATTEMPTED MONOPOLIZATION UNDER
SECTION TWO OF THE SHERMAN ACT AND
ALLEGES SUFFICIENT SUPPORTING FACTS
To bring an claim for attempted monopolization a plaintiff must demonstrate "(1) that the
defendant has engaged in predatory or anti competitive conduct with (2) a specific intent to
monopolize and (3) a dangerous probability of achieving monopoly power. " Spectrum Sports,
Inc v. Quillan, 506 U.S. 447, 456 (1993)(citations omitted). Loren Data's Complaint alleges
each appropriate element of an attempted monopolization claim and each element is supported
by facts which suggest the existence of ample evidence to support Loren Data's claim.
A. The Complaint Adequately Alleges Anticompetitive Conduct and a Specific

Intent to Monopolize
GXS asserts that Loren Data has failed to plead a specific intent to monopolize. (Def.'s
Mot. Dismiss. 39). This is far from the truth. GXS itself notes the decision in Times-Picayune
Publ'g Co. v. United States case which requires a plaintiff to show that defendant had a "specific
intent to destroy competition or build monopoly." Times-Picayune Publ'g Co. v. United States,
345 U.S. 594, 626 (1953). Loren Data's complaint clearly alleges that GXS refused the request
of its own customers to interconnect with Loren Data - a strong argument for specific intent to
monopolize under the Aspen precedent. (Compl. ~ 32). Furthermore, the complaint clearly
alleges that GXS has acquired multiple competitors specifically to establish dominance in the
market and stomp out innovation. (Id. at ~ 31). GXS has even acknowledged this last allegation
in its own brief in support of the Motion to Dismiss. (Def.'s Mot. Dismiss. 40) "Loren Data
alleges that GXS has engaged in a series of acquisitions designed to build monopoly power."
(emphasis added). Finally, the Complaint not only alleges that GXS has intentionally acted to
20
build a monopoly through acquisition, but it clearly alleges GXS intent to create monopoly
power through the elimination of competition. (Compl. ~~ 31,32). As the Complaint contains
several strong allegations of specific intent, and as Loren Data has not yet had the opportunity
for discovery, the Plaintiff respectfully requests that Defendant's Motion to Dismiss be denied.
B. The Complaint Adequately Alleges, and Indeed There is, a Dangerous Probability of
GXS Successfully Monopolizing the EDI Market.
GXS asserts a failure on the part of Loren Data to adequately allege a dangerous
probability of success. (Def.' s Mot. Dismiss. 40). This argument is premised on the flawed
assumption that because its acquisitions of companies such as IBM and Inovis have ended, GXS
has reached the height of its power. Id. GXS cites to no analysis or metrics to support this
highly suspect contention that their growth as a business is in stasis, and its argument ignores a
central theme ofthe Complaint. Loren Data's allegations of attempted monopoly do not merely
rely on the growth of GXS in the industry through acquisition. A major premise in the
Complaint is GXS' specific intent to monopolize through the elimination of competition,
specifically - Loren Data. (Compl. ~~ 20,31,32, and Amend Compl. ~~ 15 thru 19). IfGXS
were to terminate Loren Data's connections to its network, it would be one step closer to
eliminating competition from Loren Data, and similar businesses, in the marketplace. Given
GXS' current power and the position in the Market, and their expressed intentions to alter the
aforementioned connections, there is a dangerous probability of it successfully monopolizing the
industry without intervention from the courts, if, in fact, it has not succeeded already.
"The determination whether a dangerous probability of success exists is a particularly
fact-intensive inquiry." USA. v. Microsoft Corp., 253 F.3d at 80. As Loren Data has alleged a
dangerous probability of success, and identified the position of, and conduct by, GXS which
21
create such a probability, it would be inappropriate and premature to dismiss Loren Data's claim
before it has had the opportunity to discover additional factual evidence.
IV
THE COMPLAINT STATES A COGNIZABLE

ANTITRUST INJURY AND ALLEGES
SUFFICIENT SUPPORTING FACTS
GXS argues that Loren Data has failed to allege an "antitrust injury." (Def.' s Mot.
Dismiss. 41). The crux of its argument is that injuries to Loren Data do not qualify as an
antitrust injury, and that injury to the competitive EDI market itself must be alleged. Id at 42.
(" ... Loren Data has not alleged any facts that would show GXS' s conduct to have had an
anticompetitive effect on the market as a whole. There is no allegation that any end-customers
who supposedly required access to GXS's network were ever denied access.") This is simply not
true. Paragraphs eight, seventeen, thirty-one, and thirty-three, clearly allege harm not only to
Loren Data, but to the EDI industry itself and to consumers. (CompI.,-r,-r8, 17,31,33).
An essential parallel to this aspect of the case is can be found in Supreme Court's Aspen
decision. The antitrust injury in Aspen is nicely summarized in the following excerpt:
Although Ski Co.'s pattern of conduct may not have been as " 'bold,
relentless, and predatory' " as the publisher's actions in Lorain Journal, the record
in this case comfortably supports an inference that the monopolist made a
deliberate effort to discourage its customers from doing business with its smaller
rival. The sale of its 3-area, 6-day ticket, particularly when it was discounted
below the daily ticket price, deterred the ticket holders from skiing at Highlands.
The refusal to accept the Adventure Pack coupons in exchange for daily tickets
was apparently motivated entirely by a decision to avoid providing any benefit to
Highlands even though accepting the coupons would have entailed no cost to
Ski Co. itself, would have provided it with immediate benefits, and would
have satisfied its potential customers. Thus the evidence supports an inference
that Ski Co. was not motivated by efficiency concerns and that it was willing to
sacrifice short-run benefits and consumer goodwill in exchange for a
perceived long-run impact on its smaller rival.
22
Aspen Skiing Company v. Aspen Highlands Skiing Corporation,

472 U.S. 585,610-11, 105 S.Ct. 2847,86 L.Ed.2d 467
(1985)( emphasis added).
As in the Aspen case, Loren Data has alleged, and can (a) demonstrate that an
interconnect between Loren Data and GXS would result in lower configuration and support
costs, and greater economic benefits to GXS (Compl. ~~ 14-15) and (b) identify several GXS
customers who have requested an interconnect with Loren Data to access their trading partners,
only to be denied their request (thus jeopardizing their goodwill). In short, Loren Data has
alleged the same species of anticompetitive behavior and harm present in Aspen, which Loren
Data believes will only be strengthened by the discovery process.
The Complaint also contains another clear allegation of antitrust injury - the harm to
technological innovation in the EDI industry, and the end consumer's freedom to choose which
technology best suits their business model. eM. at ~~ 17,20, 22,32) Loren Data has been able
to gain a customer base in an industry dominated by larger players by offering innovative
solutions not found in the large VANs. However, GXS has, through strategic acquisitions and
monopolistic market tactics (see supra section II (b)(4) on barriers to entry), reached the point
where it can, and is, neutralizing the benefits technological innovation can provide. Such
conduct stagnates the entire industry and deprives customers of the advantages innovative
competitors such as Loren Data can provide.
GXS makes the final argument that a denial of interconnection to Loren Data would result
in a de minimis effect on the market. (Def.'s Mot. Dismiss. 42-43). Not only is such an
argument wildly inaccurate, it also belies GXS' disconnect with, and disregard for, the customers
the EDI Industry ultimately serves. To arrive at its conclusion that only 0.2% ofGXS customers
communicate with Loren Data, GXS relies on paragraph seventeen of the Complaint which states
23
that in 2002, "80 GXS ID holding entities has trading partners on the Loren Data EC Grid
network." (Compl. ~ 17). In other words, GXS is using a figure almost a decade old to try and
minimize the present ramifications of terminating its connections with Loren Data. Today, the
parties which rely on communication between the Loren Data and GXS networks number in the
thousands, and a termination of all connections between Loren Data and GXS would have a
hugely detrimental impact, not only on the EDI industry, but on the U.S. economy as well.
The EDI industry is vital to modern systems of commerce. While it is, at its core, a
communications industry, it is critical to remember that each individual communication
represents an economic transaction between trading partners in thousands of other industries.
Therefore, when GXS engages in prohibited conduct under the Sherman Act it not only has a
detrimental effect on competition within the EDI industry, but also produces ancillary negative
consequences to the customers which both Loren Data and GXS serve. The effect of terminating
traffic between Loren Data and GXS, which GXS cavalierly terms de minimis, would therefore
not only encompass a harm to competition within the EDI Industry, but economic harm to other
industries as well.
v
THE PLAINTIFF HAS ALLEGED ANTITRUST INJURY
IN THE RELEVANT MARKET
Loren Data Corp competes with GXS in the EDI market in North America. More than
95% of Loren Data's business is in North America, while 50% of GXS' transmissions are based
in the United States. (Amend. Compl. ~ 6) Since GXS transmits data in 50 countries it can be
readily inferred that Loren Data and GXS operate in the same market in other North American
countries. Exact numbers can be fleshed out in discovery. Loren Data relies on GXS VANs for
24
55% of its business. (Amend. CompI. ~ 4)
The Defendant has engaged in anti-competitive conduct causing injury in the relevant
EDI market in North America. It bears repeating certain passages from the Microsoft cases cited
previously.
In Novell, Inc. v. Microsoft Corp., 505 F.3d 302, (4th Cir., 2007) the 4th Circuit found
that:
"[T]the injury that Novell alleges here is plainly an injury to competition that the anti-
trust laws were intended to forestall. Microsoft's activities, Novell claims, were intended
to and did restrain competition in the PC operating-system market by keeping the barriers
to entry into that market high?4 Thus, we conclude that Novell has alleged harm of the
type the antitrust laws were intended to prevent." 505 F.3r 316
The court found that Microsoft had, among other things, prevented Novell from making
its office application software compatible with Microsoft's dominant Windows operating
platform by withholding technical information from Novell's software designers, by requiring
computer manufacturers to refrain from installing Novell's products, and by requiring Novell to
use Window-specific technologies in order to be certified as Window-compatible, thus degrading
Novell's products' performance on other operating systems and harming their advantageous
compatibility.
"All of these activities allegedly had the effect of thwarting the ability of Novell's
products to lower the applications barrier to entry into the operating-system market,
therefore harming competition in that market." id.
That GXS has erected similar barriers to Loren Data has been clearly and demonstrably
alleged in the Plaintiffs complaint as amended. The Plaintiff is certain that GXS' share of the
EDI market in North America exceeds 50%, however for purposes of measuring antitrust injury
there is no percentage share that the court is required to use as a measure of market share.
"Because such direct proof is only rarely available, courts more typically examine
25
market structure in search of circumstantial evidence of monopoly power. (citations

omitted) Under this structural approach, monopoly power may be inferred from a
firm's possession of a dominant share of a relevant market that is protected by entry
barriers." United States v. Microsoft Corp., 253 F.3d 34,51, D.C. Cir., 2001.
Loren Data's complaint alleges entry barriers that are anti-competitive and cause it direct
antitrust damages. This is not the type of case where standing is denied because the complainant
is a remote consumer. (e.g. Assn. General Contractors ofCal. v. Cal State Council of Carpenters,
459 U.S. 519, 103 S.Ct. 897, 74 L.Ed2d 723 (1983)
Should GXS eliminate Loren Data from the EDI market 15,000 of Loren Data's
customers will be cast adrift. That may appear insignificant compared to GXS' three million
customers in the United States, but the Supreme Court has made clear that a small business is
entitled to the same antitrust protections from elimination. KIor's, 359 U.S. 213
VI
MARYLAND ANTITRUST ACT CLAIMS
The Plaintiff accepts the Defendant's assertion that typically Maryland antitrust claims are
measured by federal standards and that dismissal of the latter warrants dismissal of the former.
However, the Plaintiff does not agree that its claim under Com. Law Art., §11-204(a)(3)
is a "throwaway" argument. §11-204(a)(3) is modelled on a similar section of the Robinson-
Patman Act (15 USC 13(a» with one significant difference. The Robinson-Patman Act prohibits
discrimination in price, directly or indirectly, among purchasers of commodities while the
Maryland Act prohibits discrimination among purchasers of commodities and services. Thus,
while Com. Law Art., §§ 11-204(a)(1) and (2) are substantially similar to Sherman 1 and 2, §11-
204(a)(3) contains a significant difference. It is broader in its application.
"Service" is defined by Maryland law as "... [A]ny activity performed in whole or in part
26
for the purpose of financial gain ... " Com. Law Art., §11-201 (g). The term was inserted in
§ 11-204(a)(3) by the General Assembly with the specific intent to close a loophole. ANA
Towing, Inc. v. Prince George's County, 552 A.2d 1295,314 Md. 711, footnote 3,1988.
Discrimination in the provision of services is declared to be a violation of this section if it
(i) substantially lessens competition, (ii) tends to create a monopoly, (iii) or (emphasis added)
injures, destroys, or prevents competition with any person who grants or knowingly receives the
benefit of the discrimination or with customers of either ofthem.id. §11-204(a)(3)
We do not argue that Loren Data Corp has attempted to obtain a commodity from GXS,
but they have requested a service, i.e. the industry standard non-settlement interconnect. GXS
has denied the provision of this service to Loren Data while granting it to all others.
Furthermore, when it has made the service available it has done so at a discriminatory cost of
approximately $30,000.00 per month or more (@ $0.04/kc) as opposed to no charge for all
others. (Amend. Compl. ~ 7)
We incorporate here the full extent of all allegations made in this law suit to the extent
that violations of Sherman 1 and 2 have been caused by the Defendant's conduct. Price
discrimination in the transmission of ED I messages by GXS substantially lessens competition
and tends to create a monopoly. It keeps the cost of doing business high and also prevents
competition by Loren Data with GXS or its customers.
vn
THE PLAINTIFF'S CLAIM FOR TORTIOUS
INTERFERENCE IS SUPPORTED BY THE COMPLAINT
AND IS NOT ENTIRELY CONTINGENT ON THE ANTITRUST CLAIM
The Defendant rightly states that violation of a state antitrust law can form the basis of
the tort of wrongful interference with business relationships. Natural Design, Inc. v. Rouse Co.,
27
302 Md. 47,485 A 2d 663, 1984. However, it does not follow that failure of the antitrust claim,
which the Plaintiff strenuously resists, will necessitate the dismissal of the wrongful interference
claim. The tort of intentional interference is based on: 1. intentional and willful acts, 2.
calculated to cause damage, 3. with purpose of causing damage and loss without right or
justifiable cause, 4. resulting in actual damage. Alexander & Alexander, Inc. v. B. Dixon
Evander & Associates, Inc., 336 Md. 635, 652, 650 A. 2d 260, 1994. The cause may be
established by means other than violations of antitrust laws, including breach of contract. id.
Taken in its entirety the Plaintiffs complaint cites numerous instances of the Defendant's
conduct that constitute wrongful interference: 1) its general denial of the industry standard non-
settlement inter connect; 2) its breach of Loren Data's contract with Inovis by discontinuing
Loren Data's interconnect with Tradanet in the United Kingdom; 3) its failure to service IBM's
contract with the Department of Defense under which Loren Data was a subcontractor (Amend.
Compl. ~ lla); 4) its interference with Loren Data's client relations (Compl. ~ 22); 5) and
persistent refusal to grant an appropriately configured interconnect after settlement in the
Covisint matter (Comp. ~ 19) are but chief examples. Should the antitrust claims be eliminated
this court would still have jurisdiction of the wrongful interference claim based on the amount of
damages claimed by the Plaintiff and on the diversity on the parties.
VII
THE PLAINTIFF HAS PLED COGENT AND

SUFFICIENT FACTS TO SUPPORT ITS BREACH
OF CONTRACT CLAIM
Paragraph 11 of the Plaintiffs Supplemental Statement of Fact in it First Amended
Complaint filed herein contains allegations of breach of contract by GXS, and we restate them
here:
28
a. In February of 2003 Loren Data entered into a contract with IBM to route data to
government agencies (primarily Department of Defense) through IBM's "IE-DEBX" VAN.
(Compl. ~18) After purchasing the IE division of IBM GXS rerouted this traffic through TGMS.
GXS terminated its contract with Loren Data on October 31, 2009, leaving unpaid invoices due
to Loren Data of $24,832.49.
b. In March of 2009 Loren Data entered into a standard non-settlement interconnect
agreement with Inovis for transit over its network. In addition, Loren Data entered into a second
contract in 2009 with Inovis for transit to all GXS systems to which Inovis had interconnects,
including the GXS Tradanet VAN to Great Britain. After GXS purchased Inovis in June of2010
and assumed the contract obligations of Inovis it unilaterally terminated Loren Data's transit to
the GXS Tradanet VAN in Great Britain.
CONCLUSION
For all of the foregoing reasons the Defendant's Motion to Dismiss filed herein must be
denied.
Dated: March 23,2011

Fulton, Maryland
Respectfully submitted,
/S/
David Bird, Esq.

Bar # 23907
301-854-2690
301-854-3729 (FAX)
birdlaw@verizon.net
29

Loren Data Response To Motion To Dismiss

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Case 8:10-cv-03474-DKC Document 14 Filed 03/23/11 Page 1 of 37

IN THE UNITED STATES DISTRICT COURT FOR MARYLAND, SOUTHERN DIVISION

LOREN DATA CORP *

GXS, INC. * Case No. 1O-CV-03474-DKC

PLAINTIFF'S OPPOSITION TO DEFENDANT'S

Dismiss filed herein by the Defendant.

Motion as well as the Plaintiffs First Amended Complaint.

David Bird, Esq.

IN THE UNITED STATES DISTRICT COURT FOR MARYLAND, SOUTHERN DIVISION

GXS, INC. * Case No. 10-CV-03474-DKC

MEMORANDUM OF LAW IN OPPOSITION

TO THE DEFENDANT'S MOTION TO DISMISS

David Bird, Esq.

PRELIMINARY STATEMENT P.l

I GXS HAS ENGAGED IN CONDUCT WHICH

A. GXS's Concerted Refusal To Deal is a Per Se Violation Of

II THE COMPLAINT STATES A COGNIZABLE CLAIM

A. The Complaint Contains Multiple Allegations of

1. GXS' Actions Towards Loren Data Fall

2. Loren Data is Not a "Freerider" P.9

3. GXS' Asserted Legitimate Business

4. The Complaint Alleges Several Past Refusals to

B. The Complaint Alleges, Without Internal Contradiction,

1. The Essential Facilities Doctrine Has Not Been

2. The GXS Network Constitutes an

3. The Complaint Adequately Alleges GXS'

4. GXS Has Created and Enforced Barriers to Entry

III THE COMPLAINT STATES A COGNIZIBLE CLAIM

A. The Complaint Adequately Alleges Anticompetitive Conduct

B. The Complaint Adequately Alleges, and Indeed There is,

IV THE COMPLAINT STATES A COGNIZABLE ANTITRUST

V THE PLAINTIFF HAS ALLEGED ANTITRUST INillRY

VI MARYLAND ANTITRUST ACT CLAIMS P. 26

VII THE PLAINTIFF'S CLAIM FOR TORTIOUS INTERFERENCE

VII THE PLAINTIFF HAS PLED COGENT AND SUFFICIENT

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