Mary Lucille SANDIDGE, Plaintiff-Appellant. v. Ralph J. ROGERS et al., Defendants-Appellees.
No. 12221.
United States Court of Appeals Seventh Circuit.
May 27, 1958.
256 F.2d 269
“Rights of way will be secured to provide a width satisfactory for ul-timate four lane construction. De-sign details will be agreed on be-tween the State and Public Roads.
“6. To meet the present traffic needs the first priority of projects is the acquisition of rights of way along State Route No. 71 from Se-vierville to Gatlinburg—to be secur-ed by the State on the basis of one-third Federal funds and two-thirds State and county funds—and the construction of a two lane paved road from Sevierville to Caney Branch on the basis of 50% Federal funds and 50% State funds; that portion from Caney Branch along both sides of Little Pigeon River to be built by the National Park Serv-ice as a connecting Link to the Foot-hills Parkway, and also as a part of the first priority is the link from the end of the present concrete pav-ing on State Route No. 71 to the Park boundary.
“7. The programming of Fed-eral-aid projects on the loop each year would be selected as a priority based on traffic needs as jointly de-termined by the State and Public Roads Administration and planned to accomplish the ultimate desirable improvement within a period of from eight to ten years.
“In Witness Whereof the parties have executed this cooperative agree-ment as of the 1st day of April, 1948.”
George E. Weigle, J. Frederick Hoff-man, Louis Pearlman, Jr., Lafayette, Ind., for appellant.
Alan W. Boyd, Indianapolis, Ind., Robert L. Mellen, Atty., Bedford, Ind., Louis A. Highmark, Indianapolis, Ind., for defendants-appellees. Barnes, Hick-am, Pantzer & Boyd, Indianapolis, Ind., of counsel.
Before FINNEGAN, SCHNACKEN-BERG and HASTINGS, Circuit Judges.
SCHNACKENBERG, Circuit Judge.
From an order of the district court,2 holding that plaintiff‘s amended com-plaint fails to state a claim upon which relief can be granted, and dismissing the same as well as plaintiff‘s action, without leave to amend, plaintiff appeals to this court.
It is alleged that the defendants at the times and in the manner hereinafter set forth, acted individually and in con-spiracy with each other and with others unlawfully, to restrain and monopolize trade and commerce among the several states in violation of the Sherman Act and Clayton Act, thereby causing injury and damage to the property of the plain-tiff.
The residences of individual defend-ants and also business locations of each of the corporate defendants are stated. (They are all in the Southern District of Indiana.)
Condensed somewhat, for brevity, the following additional allegations are made.
Plaintiff is owner of described land in Lawrence county, Indiana,3 on, in and under which is 5 million tons of limestone and other types of stone suitable for com-mercial use. The only market available to the owners of land containing lime-stone, consists of large quarry operators owning equipment for the removal and crushing of limestone; the initial outlay required for the purchase and construc-tion of stone removal equipment, crush-ing equipment, conveyors and trucks is extremely high and the annual upkeep and operating expenses are so great that few persons engage in the business of re-moving and crushing limestone; the limestone prior to being crushed is bulky, heavy and incapable of being transported from the land economically for the pur-pose of being crushed, and the land owner is at the mercy of the crusher.
The standard agreements between stone crushers and landowners provide a right to the crusher to refrain from re-moving and crushing stone for any rea-son at any time, and during such period to pay only a modest minimum stipend for the unexercised privilege of remov-ing and crushing limestone.
In order to acquire the power to termi-nate the production of plaintiff‘s stone, the defendants did the following acts:
Prior to November 5, 1945, plaintiff‘s stone on said land was by her made avail-able to any and all buyers engaged in the business of quarrying, producing, crush-ing and selling stone in commerce among the several states, on a free, open and competitive market; on said date plain-tiff authorized Nally, Ballard & Cato, a partnership (later incorporated as a Ken-tucky corporation) by an agreement in writing, to remove said stone from said land at a price of 3¢ per ton; that a new written agreement was executed on Janu-ary 16, 1950 which provided for 5¢ per ton, with a provision for a minimum pay-ment of $138.89 per month; and extend-ed the agreement from January 16, 1950,
| Year | Tons | Amounts |
| 1946 | 80,755.51 | $ 2,428.66 |
| 1947 | 202,788.12 | 6,083.64 |
| 1948 | 191,147.47 | 5,734.42 |
| 1949 | 197,627.15 | 5,914.42 |
| 1950 | 308,873.63 | 15,443.68 |
| 1951 | 273,306.49 | 13,665.32 |
| 1952 | 270,137.54 | 13,506.88 |
| Total | $62,777.02 |
that the defendant Rogers is engaged in the business of quarrying, crushing and selling limestone and other types of stone in commerce among the several states; that the plaintiff and the defendants as landowners, lessors, licensors and other-wise, are or were at the times mentioned herein competitors in trade or commerce in stone among the several states; that for many years prior to 1952, Rogers has engaged in and directed a plot, plan and conspiracy in restraint of trade and to establish a monopoly of the stone busi-ness among the several states, and par-ticularly in Lawrence and Monroe coun-ties, Indiana, by acquiring control of land in which commercial grades of stone were located, by purchase, lease, option, and acquisition by assignment of leases and licenses to quarry stone, from landown-ers, lessors, lessees, licensors, licensees and option holders, the names of all of said persons not being within the knowl-edge of this plaintiff at the date of the filing of this complaint, but being within the knowledge of the defendants herein; that among the devices used by Rogers in the plot, plan and conspiracy in restraint of trade and to establish and maintain a monopoly in the business of quarrying, crushing and selling stone, and to estab-lish a monopoly for himself in the busi-ness of quarrying, crushing and selling stone, was the practice of purchasing lands, leasehold interests, licenses, op-tions and stock in competing corpora-tions, from individuals, partnership, and corporations engaged in the business of quarrying, crushing and selling stone in Southern Indiana, Southern Illinois, and other states. Also used was the device of setting up, organizing and incorporating dummy corporations and alter ego corpo-rations for the purpose of quarrying, crushing and selling stone, as well as for the purpose of acquiring lands, leases, options, licenses, assets of competing cor-porations, and corporate stock of compet-ing corporations, so that he and/or his codefendants could control through own-ership of corporate stock, land leases, op-tions, and licenses, the business of quar-rying, crushing and selling stone in com-merce among the several states, and particularly in Lawrence and Monroe counties, Indiana, all the names of which corporations, grantors, lessors, lessees, licensors, licensees and option holders, are within the special knowledge of Rogers and the codefendants, and not within the knowledge of the plaintiff at this time.
It is further alleged that, prior to No-vember, 1951, Rogers had in pursuance
| Year | Indiana | Lawrence County |
| 1953 | 8,461,533 | |
| 1954 | 8,870,470 | 698,757 |
| 1955 | 11,234,740 | 762,942 |
| 1956 | 631,866 |
that on the basis of plaintiff‘s production from 1947 through 1952, plaintiff‘s quar-ry would have produced at least 40 per cent of the total Lawrence county crushed stone production for the years 1953 through 1956; that as a result of the acts of the defendants, one of the two major producers of crushed stone in Lawrence county has been eliminated from compe-tition and said competitor‘s crushed stone eliminated from the market, and plaintiff deprived of a market for her stone, to the injury of the public generally, and plain-tiff.
It is further averred that Mitchell Crushed Stone Company, Inc., proceeded to prepare, build, construct and move quarrying equipment on the land adjoin-ing plaintiff‘s quarry on the west; that, in constructing Mitchell crushed stone quarry, Rogers, for the purpose of elimi-nating any possibility of plaintiff selling her land to any other person engaged in quarrying and crushing stone or of find-ing any other persons to produce stone for her under a written agreement or lease or license, piled thousands of tons of waste material around plaintiff‘s quarry in such a way as to change the natural flow of water, from plaintiff‘s land, and to flood her quarry, and to make it impossible for her quarry to be operat-ed by any others without causing the water to flow into the quarry of Mitchell Crushed Stone Company, Inc., and make the operation of the Sandidge quarry economically unfeasible.
Also it is charged that Rogers owns or controls stone quarries in numerous other counties and states, such as New-ton, Monroe and Knox counties, Indiana, and quarries in Ohio, Colorado and Ten-nessee, and numerous other counties and
It is further alleged that, as a result of all of the acts of Rogers and of his acts in combination and conspiracy with the other defendants, the free competition in the trade and commerce of quarrying, crushing and selling stone among the several states, and particularly in Law-rence and Monroe counties, Indiana, which had existed up to November, 1951, ceased to exist, and, since then the trade and commerce in said stone business was and is under the almost complete domina-tion and control of Rogers and of him and the other codefendants; that Rogers,
Plaintiff avers that, by reason of the foregoing acts of defendant and/or his conspirators, interstate commerce in crushed stone was illegally restrained, competition therein was not only sub-stantially lessened, but was destroyed, the price of limestone in the ground or the royalty therefor when removed by the crusher, was illegally controlled and fixed, and an illegal monopoly was established, all in violation of the antitrust laws of the United States, to the damage of plain-tiff as aforesaid; that two distinct effects resulted from the defendants’ conspiracy and acts, one which rendered the royalty paid to owners of limestone in the ground devoid of competitive influence as to amount, the other, to reduce competition in the interstate distribution of crushed limestone; and by their agreement the combination of stone crushers herein ac-quired not only a monopoly of the raw material—limestone in the ground—but also and thereby, control of the quantity of crushed limestone manufactured, sold and shipped from the Southern Indiana and Lawrence county producing area; that said agreements, conspiracies, mo-nopolies and restraints of trade and com-merce have continued and existed and have been given full force and effect continuously from the respective dates of their inception to the present time, and now continue and exist to the injury and damage of the plaintiff in her business and property, and to the public generally.
Plaintiff alleges that, as a direct result of all the acts heretofore set out, plaintiff has been injured in her business and property, and reserves the right to re-cover damages for future injuries, as follows:
A. That plaintiff‘s land and quarry has become unsalable to persons engaged in the quarrying, crushing and selling of stone.
B. That the salability of plaintiff‘s land in a free and open market has been completely eliminated.
C. The fair market value of the plain-tiff‘s land and quarry has been depreciat-ed from $150,000 to Zero Dollars.
D. That the possibility of receiving the maximum or optimum payments un-der the aforesaid written agreement has been completely eliminated due to the acts of the defendants in removing all of the equipment from and the flooding of said quarry.
E. That the fair market value of the plaintiff‘s lease has been depreciated from $175,000 to Zero Dollars.
F. That the stability of plaintiff‘s lease in a free and open market has been completely eliminated.
G. That the value of plaintiff‘s re-versionary interest has been depreciated from $150,000 to Zero Dollars.
H. That plaintiff‘s income from said quarry has been diminished and depreci-ated from $15,000 per year to $1,666.68 per year, since January 1, 1953, and for the ten (10) years renewal period from November 1, 1956, and for the duration of defendant‘s monopoly; that, as the re-sult of the injuries set forth in the fore-going paragraph, the plaintiff has been damaged in the sum of $500,000.
Defendants argue that the general al-legations of a conspiracy to restrain com-merce and monopolize interstate com-merce constitute mere legal conclusions, which do not aid the complaint, and that only the factual allegations can be con-sidered in determining whether a viola-tion of the antitrust laws is shown.
They further contend that the factual allegations do not sustain plaintiff‘s con-clusions with respect to a conspiracy to restrain commerce and monopolize inter-state trade.
They make other similar attacks upon the various allegations of the amended complaint.
“Rule 8 of the Federal Rules of Civil Procedure,
28 U.S.C.A. , pro-vides that a pleading shall set forth a short, plain statement of the claim showing that the pleader is entitled to relief and that each averment in a pleading shall be simple, concise, and direct. Absent from this rule is the old requirement of common law and code pleading that the plead-er set forth ‘facts’ constituting a cause of action. It is also ele-mentary that a complaint is not sub-ject to dismissal unless it appears to a certainty that the plaintiff cannot possibly be entitled to relief under any set of facts which could be proved in support of its allegations. Even then, a court ordinarily should not dismiss the complaint except after affording every opportunity to the plaintiff to state a claim upon which relief might be granted.“This court and others have fre-quently laid down the rule that in considering a motion to dismiss the allegations of the complaint must be viewed in a light most favorable to the plaintiff, and all facts well plead-ed must be admitted and accepted as true. * * *”
To the same effect is Dioguardi v. Durning, 2 Cir., 139 F.2d 774, 775 (1944).
“* * * Those rules do not in terms require that a complaint shall state facts sufficient to constitute a cause of action. The Rules provide that the complaint shall contain (in addition to the necessary averments to show jurisdiction) ‘a short and plain statement of the claim show-ing that the pleader is entitled to re-lief, and a demand for judgment for the relief to which he deems himself entitled’ Rule 8(a). The appendix of forms accompanying the rules demonstrates how simply and in-formally a claim may be pleaded and how few factual averments are nec-essary.
Rule 12(b) authorizes a motion to dismiss a complaint for ‘failure to state a claim upon which relief can be granted.’ * * * This Court has said that there is no justification for dismissing a com-plaint for insufficiency of statement unless it appears to a certainty that the plaintiff would be entitled to no
relief under any state of facts which could be proved in support of the claim. * * *”
In Hummel v. Wells Petroleum Co., 111 F.2d 883, 886 (1940), we said:
“Appellant contends that the bill of complaint should be stricken be-cause it pleads conclusions rather than facts, or that appellee be or-dered to make a more definite state-ment. We cannot agree with this contention. The new Federal Rules of Civil Procedure (Rule 8),
28 U.S.C.A. following section 723c , pre-scribe a short and plain statement of the claim showing that the pleader is entitled to relief. We are of opin-ion that the pleading complained of sufficiently complied with the re-quirement of the rule and that it stated ultimate facts, not conclu-sions. See Moore‘s Federal Practice Under the New Rules, Vol. I, § 8.07, p. 546. * * *”
In Louisiana Farmers’ Protective Un-ion v. Great A. & P. Tea Co., 8 Cir., 131 F.2d 419 (1942), a district court, 40 F.Supp. 897, had dismissed a complaint in an action brought under § 7 of the Sherman Act, upon the ground that the complaint failed to state a claim upon which relief might be granted. In reversing, the court of appeals said, at page 422:
“The complaint here charges an agreement or combination among appellees to control prices in inter-state commerce in Louisiana straw-berries, and thus to eliminate compe-tition in interstate commerce. Such agreements are in direct violation of the Sherman Act. United States v. Univis Lens Co., 316 U.S. 241, 62 S.Ct. 1088, 86 L.Ed. 1408 (1942); United States v. Masonite Corp., 316 U.S. 265, 62 S.Ct. 1070, 86 L.Ed. 1461 (1942). Acts in themselves lawful considered alone, if a part of a plan for control-ling prices to eliminate competition in interstate commerce, are unlaw-ful. United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129 (1940); Ethyl Gasoline Corp. v. United States, 309 U.S. 436, 60 S.Ct. 618, 84 L.Ed. 852 (1940). It is the character and not the extent of the control which the law de-nounces. The amount of interstate commerce or trade involved is not material. United States v. Socony-Vacuum Oil Co., supra. Here the complaint charges a combination among appellees to control prices and to destroy competition in inter-state trade in Louisiana straw-berries, and that appellees’ acts pur-suant to the agreement among them resulted in damage to appellant‘s as-signors in their business.
* * * * *
“We think the court erred in dis-missing the complaint without leave to the appellant to amend. Accord-ingly the judgment is reversed, and the case is remanded with directions to the district court to grant the ap-pellant a reasonable time in which to amend the complaint by setting out the amount of the damage claimed to have been received by each of the appellant‘s assignors and the basis upon which the amount was com-puted, and for further proceedings in conformity with this opinion.”
In the case at bar, no need exists for plaintiff to amend her amended com-plaint. She does charge the amount of her damage and the basis for its compu-tation.
The amended complaint averred that an effect of defendants’ conspiracy and acts was a reduction of competition in the interstate distribution of crushed limestone. That allegation must be taken into account in deciding whether plain-tiff is entitled to have her case tried. A pertinent observation appears in United States v. Employing Plasterers’ Ass‘n, 347 U.S. 186, 188, 74 S.Ct. 452, 454, 98 L.Ed. 618 (1954), where the court said, speaking of the district court, 118 F.Supp. 387:
“* * * And the court held that there was no allegation of fact which showed that these powerful local restraints had a sufficiently ad-verse effect on the flow of plastering
materials into Illinois. At this point we disagree. The complaint plainly charged several times that the effect of all these local restraints was to re-strain interstate commerce. Wheth-er these charges be called ‘allega-tions of fact’ or ‘mere conclusions of the pleader,’ we hold that they must be taken into account in deciding whether the Government is entitled to have its case tried.”
The principles of law applicable to this appeal are fully treated in the following cases: Lorain Journal Co. v. United States, 342 U.S. 143, 72 S.Ct. 181, 96 L.Ed. 162 (1951); United States v. Griffith, 334 U.S. 100, 68 S.Ct. 941, 92 L.Ed. 1236 (1948); American Tobacco Co. v. United States, 328 U.S. 781, 66 S.Ct. 1125, 90 L.Ed. 1575 (1946); Mandeville Island Farms v. Amer-ican Crystal Sugar Co., 334 U.S. 219, 68 S.Ct. 996, 92 L.Ed. 1328 (1948); International Salt Co. v. United States, 332 U.S. 392, 68 S.Ct. 12, 92 L.Ed. 20 (1947) and Indiana Farm-er‘s Guide Pub. Co. v. Prairie Farmer Pub. Co., 293 U.S. 268, 55 S.Ct. 182, 79 L.Ed. 356 (1934). Guided by these decisions, we hold that the district court erred in entering the order from which plaintiff has appealed. For this reason that order is reversed and the cause is remanded to the district court, with instructions to overrule defendants’ motion to dismiss and to require defendants to answer the amended complaint, and for further pro-ceedings not inconsistent with the views herein expressed.
Reversed and remanded.
HASTINGS, Circuit Judge (concur-ring).
From the allegations in the amended complaint it appears that plaintiff is an individual landowner who leased her farm for the production and removal of commercial crushed limestone on a ton-royalty basis and that in the first in-stance the lessee was a partnership, later incorporated and is presently owned and controlled by defendant Rogers. The lease was not made a part of the com-plaint and does not appear in the record. However, Paragraph 10 of the amended complaint stated:
“10. That the standard agree-ments between stone crushers and landowners provide a right to the crusher to refrain from removing and crushing stone for any reason at any time, and during such period to pay only a modest minimum stipend for the unexercised privilege of re-moving and crushing limestone.” (Emphasis added.)
It further appears from the allegations that the minimum payment for nonpro-duction was $138.89 per month; that Rogers, as the present holder of the lease, closed the quarry on plaintiff‘s land and removed the equipment and then opened a quarry and began a new crushed stone operation on land adjoining plaintiff and acquired by Rogers for that purpose; and that plaintiff has been paid in full the minimum monthly payments provided in the lease.
The allegations charging violation of the Anti-Trust Act are fully set out in the majority opinion and need not be repeated here.
I have entertained serious doubt whether plaintiff, as a nonoperating owner-lessor of mineral rights, has al-leged an injury to herself sufficient to enable her to maintain a private anti-trust suit to recover treble damages therefor. It would seem to appear from the complaint that in her lease she pro-vided for the specific contingency of non-operation for any reason at any time by naming the minimum monthly payment she was to be paid. The lessee stopped production and she admits receiving pay-ment of the agreed amount. She now claims damages for loss of royalties she would have received had the lease been operated.
This defense was raised by defendants and resisted by plaintiff in the district court and Judge Holder, in his extended and thorough memorandum opinion, de-cided this issue adversely to defendants, saying: “Neither of the parties’ briefs
To further illustrate the extent to which the allegations of plaintiff‘s amended complaint in this case go in in-voking the Anti-Trust Act as a means of redress for plaintiff‘s private injuries we can look to the other injuries she claims herein. These additional injuries are al-leged to flow from the acts of Rogers in constructing and operating the quarry on land adjoining plaintiff and thereby “eliminating any possibility of the plain-tiff selling her land to any other person engaged in quarrying stone or finding any other persons to produce stone for her under a written agreement or lease or license, piled thousands of tons of waste material around plaintiff‘s quarry in such a way as to change the natural flow of water from plaintiff‘s land, and to flood her quarry and to make it im-possible for her quarry to be operated by others without causing the water to flow into the quarry of Mitchell Crushed Stone Company, Inc., and make the operation of Sandidge quarry economically unfeas-ible.” The complaint further sets out that the lease, pursuant to its terms, has been renewed to November 1, 1966. It would seem, therefore, that such alleged injuries could not occur while the lease is in effect and the lessee is in control of the property, and, in any event, could not be ascertained until after November 1, 1966.
The majority view, in my opinion, properly holds that the allegations of vio-lations of the Anti-Trust Act are suffi-ciently pleaded in compliance with