Plaintiffs are lodge operators and lodging referral services in a ski resort area in Southern California. They allege antitrust violations by other lodge operators and two ski resorts in the area, allegedly injuring Plaintiffs. The district court dismissed the complaint without leave to amend. We affirm in part and reverse in part.
I
Plaintiffs base their claims on the following allegations, which we accept as true for purposes of reviewing dismissal of a complaint for failure to state a valid claim. See Fed.R.Civ.P. 12(b)(6); Cahill v. Liberty Mut. Ins. Co.,
Plaintiffs provide lodging accommodations and lodging referral services in the Big Bear Valley recreational
In about January 1994, Richard Kun, president of Snow Summit, helped form the Defendant Big Bear Lake Resort Association. Kun asked the City of Big Bear Lake to refrain' from enacting a tax on Snow Summit or Bear Mountain in exchange for the Resort Association’s commitment to collect funds from the lodges and ski resorts in Big Bear Valley and to use said funds to promote Big Bear Valley. He also asked the city to reduce its transient occupancy tax on local lodges from eight to six percent. The Resort Association eventually entered into an agreement with the Big Bear Chamber of Commerce, providing that the organizations would grant reciprocal memberships to each other at no cost, and that inquiries for lodging received by the Chamber of Commerce would be referred to the Resort Association.
Kun advised Plaintiff Robert Pool that Snow Summit would continue to sell discount lift tickets to Pool and Plaintiff Sleepy Forest Resorts only if Pool joined the Resort Association. Plaintiffs Pool, Sleepy Forest, Mark Twain Hannah, and members of the Big Bear Lodging Association joined the Resort Association. Because their businesses were located within the city of Big Bear Lake, Plaintiff lodges paid 2.5% of their lodging accommodation income as dues to the Association. Lodges located outside the city were charged only 0.5% of their income as dues.
Since its formation, the Resort Association has engaged in activities discriminatory to certain members, including some Plaintiffs. The Resort Association favored friends of directors of the Association by providing them with choice lodging referrals and preferential advertising, and removed advertisements purchased by Pool and Sleepy Forest from magazines the Re sort Association mailed to potential customers. In the fall of 1995, Pool and Sleepy Forest quit the Resort Association because of these discriminatory practices. In October 1995, Kun advised Pool that, unless Pool and Sleepy Forest rejoined the Resort Association, neither Snow Summit nor Bear Mountain would sell them discount lift tickets nor would they honor any tickets purchased by them. Moreover, he said Snow Summit would no longer supply discount lift tickets to Sleepy Forest. Snow Summit and Bear Mountain agreed that they would refuse to sell discount lift tickets to non-members of the Resort Association. Kun advised Resort Association members that they were prohibited from selling, trading or conveying Snow Summit discount lift tickets to Pool or Sleepy Forest.
In 1996, the Resort Association adopted rules prohibiting members from belonging to other local referral services in which non-members participated, and from referring any business to non-members. In about 1996, the Resort Association suspended Doc’s Getaway, which is operated by Sleepy Forest, because Sleepy Forest allegedly referred a call received by Doc’s Getaway to a non-member. The Resort Association terminated Hannah’s membership in November 1996 because he refused to remove a listing for the Big Bear Lake Area Chamber of Commerce, a referral service established by Hannah, from the local phone directory. The Resort Association objected to the listing because Hannah was receiving calls that might otherwise go to the Resort Association per its agreement with the Chamber of Commerce. Some Plaintiffs were threatened or denied membership in the Resort Association because of their personal relationships with Resort Association members who violated Resort Association rules.
Resort Association members also engaged in a price-fixing conspiracy, agree
Plaintiffs assert the Defendants’ alleged conduct violated sections 1 and 2 of the Sherman Act and California’s Cartwright Act, and breached Plaintiffs’ subscription agreements with the Resort Association. The district court dismissed Plaintiffs’ complaint without leave to amend, stating only: “This is not an antitrust case, period.” Plaintiffs filed a timely appeal.
II
We review dismissal of a complaint without leave to amend de novo.
A. Antitrust Claims
Sherman Act § 1 prohibits agreements that unreasonably restrain trade. See 15 U.S.C. § 1; NYNEX Corp. v. Discon; Inc.,
Rule of reason analysis “is a case-by-case study in which the fact finder weighs all of the circumstances of a case.” Id. (internal quotation marks omitted). “Proving injury to competition in a rule of reason case almost uniformly requires a claimant to prove the relevant market and to show the effects upon competition within that market.” Id. at 1446. Elaborate
To have standing to bring an antitrust case, a plaintiff must demonstrate that the harm the plaintiff has suffered or might suffer from the practice is an “antitrust injury,” that is, an “injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful.” Atlantic Richfield Co. v. USA Petroleum Co.,
1. Price Fixing
Plaintiffs sufficiently allege a conspiracy to fix prices of lodging accommodations, lift tickets, and ski packages, a per se antitrust violation. Plaintiffs, however, have failed to allege antitrust injury resulting from all aspects of the alleged price-fixing conspiracy.
Certain Plaintiffs have alleged antitrust injury resulting from the alleged price-fixing of lift tickets. Pool, Sleepy Forest, and Plaintiff Lodging Association purchase lift tickets and thus suffer injury due to the presumably inflated price
Plaintiffs have not alleged antitrust injury resulting from the price-fixing of ski packages and lodging accommodations. They are competitors to, rather than customers of, Defendants in the sale of these services. Thus, Plaintiffs stand to benefit from the fact that prices for those services are inflated. See Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp.,
We reverse the district court’s dismissal of the claims of Plaintiffs Pool, Sleepy Forest and Plaintiff Lodging Association for price fixing of lift tickets in violation of Sherman Act § 1 and the Cartwright Act. We affirm the dismissal of the remaining Plaintiffs’ claim for price-fixing of lift tickets and of all Plaintiffs’ claims for price-fixing of lodging accommodations and ski packages, but reverse the district court’s
2. Agreement by Snow Summit and Bear Mountain to Sell Discount Lift Tickets on Fixed Terms
Plaintiffs allege that the ski resorts agreed to sell discount lift tickets to lodge operators only if they joined the Resort Association. An agreement among competitors “for the purpose of coercing more favorable terms of trade from third parties than they could obtain through the normal play of competitive forces” violates antitrust law. De Jong Packing Co. v. United States Dep’t of Agric.,
Pool, Sleepy Forest and Plaintiff Lodging Association purchased lift tickets for resale and thus allege sufficient antitrust injury to challenge this agreement. As to these Plaintiffs, we reverse the district court’s dismissal of the claim that the ski resorts have unlawfully conspired to sell discount lift tickets only to Resort Association members in violation of Sherman Act § 1 and the Cartwright Act. The court should grant the remaining Plaintiffs leave to amend the complaint to allege antitrust injury with respect to this claim, if they can do so.
3. Group Boycott
Plaintiffs have alleged a group boycott by the Resort Association
4. Dues Differential Between City and Non-City Businesses
Plaintiffs allege Defendants “joined together ... to preclude lodge owners in the city from competing in [the ski package] market unless they paid 2.5% of their gross income” in dues to the Resort Association, which was five times the dues rate for lodge owners outside the city. This dues differential does not fit within any category of per se antitrust violation and Plaintiffs have not alleged anticompetitive effects. See infra Part 11(A)(7). Absent allegations of anticom-petitive effects, it is impossible to determine whether Plaintiffs have alleged an antitrust violation or antitrust injury.
We affirm the district court’s dismissal of Plaintiffs’ claim that the dues differential violates Sherman Act § 1 and the Cartwright Act, but reverse the district court’s denial of leave to amend the complaint to allege such a claim, if Plaintiffs have a factual basis for doing so.
5. Monopolization
Plaintiffs allege Defendants monopolized or attempted to monopolize commerce. Monopolization claims can only be evaluated with reference to properly defined geographic and product markets. See Thurman Indus., Inc. v. Pay ‘N Pak Stores, Inc.,
We affirm the district court’s dismissal of Plaintiffs’ Sherman Act § 2 and Cartwright Act monopolization and attempted monopolization claims, but reverse the court’s denial of leave to amend to state such claims, if Plaintiffs are able to do so.
6. Unfair Practices Act
Plaintiffs allege Defendants violated California’s Unfair Practices Act, Cal. Bus. & Prof.Code §§ 17000-17101. This statute prohibits several specific anticom-petitive practices, but “chiefly prohibits selling articles below cost, or giving them away, for the purpose of injuring competitors and destroying competition.” 5 B.E. Witkin, Summary of California Law § 591 (9th ed.1987). Plaintiffs do not allege that Defendants sold products or services below cost. The statute bars price discrimination in sales to different geographic locations, see Cal. Bus. & Prof. Code §§ 17031, 17040, which might seem to apply to the difference in Resort Association dues charged to lodge operators in and outside the city. Such discrimination is unlawful, however, only if accompanied by anticompetitive intent. See id. § 17040. Plaintiffs have failed to allege facts that would support an inference that the Resort Association acted with anticompetitive intent when it adopted its two-tiered dues structure. None of the other specific prohibitions in the Unfair Practices Act are clearly implicated in the complaint. We cannot say, however, that Plaintiffs can allege no set of facts that might entitle them to relief under this statute. We affirm the district court’s dismissal of Plaintiffs’ Unfair Practices Act claim, but reverse the denial of leave to amend.
7. Anticompetitive Effects: Market Definition
Except when alleging a per se antitrust violation, Plaintiffs must identify the relevant geographic and product markets in which Plaintiffs. and Defendants compete and allege facts demonstrating that Defendants’ conduct has an anticom-
Plaintiffs’ complaint refers to the geographic market of Big Bear Valley and to product markets for lodging accommodations and ski packages. Plaintiffs do not, however, allege that Big Bear Valley is the area of effective competition in which buyers of these products can find alternative sources of supply, or that there are no other goods or services that are reasonably interchangeable with lodging accommodations or ski packages within this geographic market. See Oltz,
B. State-Law Breach of Contract and Tortious Interference Claims
Plaintiffs allege Defendants breached certain Plaintiffs’ subscription agreements with the Resort Association. Although Defendants did not address this claim in their briefs supporting their motion to dismiss, the district court dismissed the claim without explanation and without providing Plaintiffs an opportunity to be heard on the issue. We reverse and remand for the court to consider and decide the sufficiency of the breach of contract allegations after affording the parties an opportunity to submit argument.
In their appellate brief, Plaintiffs assert a claim for breach of the Resort Association’s contract with the Chamber of Commerce and state-law claims for tortious inducement of breach of contract, intentional interference with prospective economic advantage, and negligent interference with contractual relations. None of these claims appears in the current complaint. On remand, Plaintiffs may seek leave to amend their complaint to state these additional claims, if they wish to do so. Because this litigation is still in its early stages, leave should be liberally granted unless amendment would be futile. See Fed.R.Civ.P. 15(a).
III
Plaintiffs’ complaint contained class allegations, and allegations that the ski resorts violated the terms of their Special Use Permits issued by the United States Forest Service. Defendants moved to strike these allegations as immaterial. The district court granted the motion without explanation.
Although Plaintiffs appealed this order, their appellate brief does not address it. Issues appealed but not briefed are deemed abandoned. Pierce v. Multnomah County,
IV
Plaintiffs moved for reconsideration or clarification of the order of dismissal. The court denied the motion as frivolous and ordered Plaintiffs to pay a total of $4,000 in attorneys’ fees and costs to Defendants. Plaintiffs timely appealed.
Plaintiffs’ motion was a reasonable attempt to clarify whether the district court had ruled on Plaintiffs’ state law claims, and, if so, whether they were dismissed on the merits or for lack of jurisdiction. It was reasonable for Plaintiffs to seek clarification to ensure that the court had considered all of Plaintiffs’ claims when ruling on Defendants’ motion to dismiss and had not neglected or overlooked their state claims. Such a motion was
Plaintiffs’ request to be relieved of the res judicata effects of the court’s ruling also was reasonable. The district court had federal question jurisdiction over Plaintiffs’ federal claims and supplemental jurisdiction over their state claims. After the court concluded that Plaintiffs had failed to state valid federal antitrust claims, it was free to decide in its discretion whether to continue to exercise supplemental jurisdiction over Plaintiffs’ state claims or to dismiss those claims for lack of subject matter jurisdiction. See 28 U.S.C. § 1367(c)(3). If the court dismissed the state claims for lack of jurisdiction, those claims would not be res judicata and Plaintiffs could pursue them in state court. Because the district court did not explain the basis for its rulings, it was appropriate for Plaintiffs to seek clarification, and to specifically request that the court dismiss the state claims without prejudice.
In light- of our holding that the district court erred in its initial order dismissing Plaintiffs’ complaint without leave to amend, we need not review the court’s ruling on the merits of Plaintiffs’ motion for reconsideration or clarification. It was an abuse of discretion, however, to impose sanctions on Plaintiffs for filing the motion. Local Rule 7.19 authorizes the court to sanction parties who file frivolous motions and Local Rule 27 authorizes an award of costs and attorneys’ fees to opposing counsel “if the Court finds that the conduct rises to the level of bad faith and/or a willful disobedience of a court order.” C.D. Cal. L. Civ. R. 27(b); see also Chambers v. NASCO, Inc.,
We reverse the district court’s order imposing sanctions on Plaintiffs for filing the motion for reconsideration or clarification.
V
Defendants have noted serious deficiencies in Plaintiffs’ briefs.
CONCLUSION
The order dismissing Plaintiffs’ complaint without leave to amend is reversed in part and affirmed in part. Plaintiffs have abandoned their appeal of the district court’s order striking portions of the complaint as immaterial. The district court’s order sanctioning Plaintiffs for filing their motion for reconsideration or clarification is reversed. We decline to impose sanctions for Plaintiffs’ noncompliance with this court’s briefing rules.
Each side shall bear its own costs.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
Notes
. Defendants, citing Janicki Logging Co. v. Mateer,
. California's Cartwright Act, Cal. Bus. & Prof.Code §§ 16700-16770, is patterned after the Sherman Act. California courts look to federal case law interpreting the Sherman Act for guidance in interpreting the Cartwright Act. See Chicago Title Ins. Co. v. Great Western Fin. Corp.,
. Because price-fixing is a per se antitrust violation, price inflation is presumed. Courts do not evaluate the reasonableness of the price when determining whether price-fixing agreements are unlawful. See Arizona v. Maricopa County Med. Soc’y,
. Defendants argue that Plaintiffs have standing to bring an antitrust action only if they compete with Defendants. This is incorrect. Consumers have standing to challenge antitrust violations that cause them injury. Indeed, purchasers are preferred antitrust plaintiffs in price-fixing cases. See 2 Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law ¶ 370 (1995).
. Defendants argue that the Resort Association cannot be liable for antitrust violations because it is a nonprofit association. A nonprofit organization that engages in commercial activity, however, is subject to federal antitrust laws. See Dedication and Everlasting Love to Animals v. Humane Soc’y of the United States, Inc.,
. Plaintiff referral associations that allege a loss of membership due to the RA's policies may establish standing in their own right, cf. Thompson v. Metropolitan Multi-List, Inc.,
. The Federal Rules of Civil Procedure provide that "[cjlerical mistakes in judgments, orders or other parts of the record and errors therein arising from oversight or omission may be corrected by the court at any time of its own initiative or on the motion of any party. ...” Fed.R.Civ.P. 60(a) (emphasis added). The United States District Court for the Central District of California has no local rules recognizing or governing motions for modification or clarification.
. The United States District Court for the Central District of California permits parties to file motions for reconsideration on the grounds, inter alia, of "a manifest showing of a failure to consider material facts presented to the Court before such decision.” C.D. Cal. L. Civ. R. 7.16(c).
. At oral argument, Plaintiffs stated they would still prefer to dismiss their federal claims and have the case remanded to state court. On remand, the district court may, in its discretion, grant Plaintiffs leave to amend their complaint to eliminate their federal claims, decline to exercise supplemental jurisdiction over the remaining state law claims, and remand the case to state court.
.Although it contains a section entitled, “Appellate Court Jurisdiction,” Plaintiffs' brief does not identify the source of the court’s jurisdiction in this section, as required by Fed. R.App. P. 28(a)(4) and 9th Cir. R. 28-2.2. The brief also fails to identify the standard of review for any of the issues raised on appeal, as required by Fed. R.App. P. 28(a)(9)(B) and 9th Cir. R. 28-2.5. Finally, the brief does not contain a statement of issues, as required by Fed. R.App. P. 28(a)(5). Plaintiffs' failure to comply with the briefing rules is all the more unjustified because we had already rejected Plaintiffs' initial brief as deficient: it did not include a certificate of compliance, Fed. R.App. P. 32(a)(7)(c); 9th Cir. R. 32-1, a statement of related cases, 9th Cir. R. 28-2.6, or excerpts of record, 9th Cir. R. 30-1.