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Chicago Prom Dress Boutique Will Have To Answer Claims Of Cut-Throat Tactics

Posted  September 9, 2013

Prom dress retailer Peaches Boutique will have to litigate charges that it engaged in cut-throat dress-selling tactics in the Chicago area now that a federal judge has decided that competitor Hannah’s Boutique has adequately pleaded antitrust claims in Hannah’s Boutique Inc. v. Barbara Ann Surdej et al.

Judge Amy J. St. Eve of the U.S. District Court for the Northern District of Illinois denied Peaches’ motion to dismiss the complaint, which Peaches had argued failed to adequately plead any antitrust violation.

Hannah’s filed its complaint in April, claiming that it was stymied in its efforts to break into the Chicago area prom dress market as a result of Peaches’ hardball tactics, which allegedly included boycotts, spying and defamation.  According to the complaint, Peaches pressured designers not to do business with Hannah’s by threatening to end Peaches’ purchases from the designers.  Hannah’s also claims that Peaches’ owners slandered Hannah’s (which is owned by a Muslim) by asking designers’ sales representatives, “How can you sell to those Muslims; they barbecue goats.”  Peaches also allegedly falsely accused Hannah’s of selling knockoff dresses and selling below the designers’ discount prices.

Peaches moved to dismiss the complaint, arguing that it did not have a big enough share of the market to exert pressure on its competitors and suppliers.

However, Judge St. Eve found that Hannah’s allegations were sufficient to state antitrust claims.  “Indeed, Hannah’s has offered numerous specific allegations supporting its contention that defendants had sufficient market power to produce anti-competitive effects in the relevant market,” the court found. “Notably, Hannah’s provided allegations of anti-competitive conduct toward Hannah’s as well as toward other prom and homecoming dress retailers in the Chicago market.”

Tagged in: Antitrust Litigation,