256 F.2d 269 | 7th Cir. | 1958
Lead Opinion
From an order of the district court,
The amended complaint states that this action arises under §§ 1, 2 and 7 of the Sherman Act and §§ 4, 7, 12 and 14 of the Clayton Act, said acts being now known as 15 U.S.C.A. §§ 1, 2, 15, 18, 22 and 24.
It is alleged that the defendants at the times and in the manner hereinafter set forth, acted individually and in conspiracy 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 plaintiff.
The residences of individual defendants 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,
The standard agreements 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 removing and crushing limestone.
In order to acquire the power to terminate 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 available to any and all buyers engaged in the business of quarrying, producing, crushing and selling stone in commerce among the several states, on a free, open and competitive market; on said date plaintiff authorized Nally, Ballard & Cato, a partnership (later incorporated as a Kentucky 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 January 16, 1950 which provided for 5¡é per ton, with a provision for a minimum payment of $138.89 per month; and extended 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 otherwise, 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 business among the several states, and particularly in Lawrence and Monroe counties, 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 landowners, lessors, lessees, licensors, licensees and option holders, the names of all of said persons not being within the knowledge 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 establish a monopoly for himself in the business of quarrying, crushing and selling stone, was the practice of purchasing lands, leasehold interests, licenses, options and stock in competing corporations, 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 corporations for the purpose of quarrying, crushing and selling stone, as well as for the purpose of acquiring lands, leases, options, licenses, assets of competing corporations, and corporate stock of competing corporations, so that he and/or his codefendants could control through ownership of corporate stock, land leases, options, and licenses, the business of quarrying, crushing and selling stone in commerce 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 November, 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 quarry 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 competition 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 plaintiff.
It is further averred that Mitchell Crushed Stone Company, Inc., proceeded to prepare, build, construct and move quarrying equipment on the land adjoining plaintiff’s quarry on the west; that, in constructing Mitchell crushed stone quarry, Rogers, for the purpose of eliminating any possibility of plaintiff selling her land to any other person engaged in quarrying and crushing stone or of 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 impossible for her quarry to be operated 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 Newton, Monroe and Knox counties, Indiana, and quarries in Ohio, Colorado and Tennessee, 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 Lawrence 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 domination 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 substantially 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 plaintiff 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 acquired 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, monopolies and restraints of trade and commerce 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 recover 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 plaintiff’s land and quarry has been depreciated from $150,000 to Zero Dollars.
D. That the possibility of receiving the maximum or optimum payments under 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 depreciated 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 result of the injuries set forth in the foregoing paragraph, the plaintiff has been damaged in the sum of $500,000.
Defendants argue that the general allegations of a conspiracy to restrain commerce and monopolize interstate commerce constitute mere legal conclusions, which do not aid the complaint, and that only the factual allegations can be considered in determining whether a violation of the antitrust laws is shown.
They further contend that the factual allegations do not sustain plaintiff’s conclusions with respect to a conspiracy to restrain commerce and monopolize interstate trade.
They make other similar attacks upon the various allegations of the amended complaint.
Rule 8(a) of the Federal Rules of Civil Procedure
“Rule 8 of the Federal Rules of Civil Procedure, 28 U.S.C.A., provides 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 pleader set forth ‘facts’ constituting a cause of action. It is also elementary that a complaint is not subject 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 frequently 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 pleaded must be admitted and accepted as true. * *
To the same effect is Dioguardi v. Durning, 2 Cir., 139 F.2d 774, 775.
Rule 12(b) authorizes a defendant to raise by motion the defense of a failure to state a claim upon which relief can be granted.
“ * * * 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 showing that the pleader is entitled to relief, 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 informally a claim may be pleaded and how few factual averments are necessary. 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 complaint for insufficiency of statement unless it appears to a certainty that the plaintiff would be entitled to no*276 relief under any state of facts which could be proved in support of the claim. * * * ”
In Hummel v. Wells Petroleum Co., Ill F.2d 883, 886, we said:
“Appellant contends that the bill of complaint should be stricken because it pleads conclusions rather than facts, or that appellee be ordered to make a more definite statement. We cannot agree with this contention. The new Federal Rules of Civil Procedure (Rule 8), 28 U.S. C.A. following section 723e, prescribe a short and plain statement of the claim showing that the pleader is entitled to relief. We are of opinion that the pleading complained of sufficiently complied with the requirement of the rule and that it stated ultimate facts, not conclusions. See Moore’s Federal Practice Under the New Rules, Vol. I, § 8.07, p. 546. * * * ”
In Louisiana Farmers’ Protective Union v. Great A. & P. Tea Co., 8 Cir., 131 F.2d 419, 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 interstate commerce in Louisiana strawberries, and thus to eliminate competition 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; United States v. Masonite Corp., 316 U.S. 265, 62 S.Ct. 1070, 86 L.Ed. 1461. Acts in themselves lawful considered alone, if a part of a plan for controlling prices to eliminate competition in interstate commerce, are unlawful. United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 60 S.Ct. 811, 84 L.Ed. 1129; Ethyl Gasoline Corp. v. United States, 309 U.S. 436, 60 S.Ct. 618, 84 L.Ed. 852. It is the character and not the extent of the control which the law denounces. 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 interstate trade in Louisiana strawberries, and that appellees’ acts pursuant to the agreement among them resulted in damage to appellant’s assignors in their business.
“We think the court erred in dismissing the complaint without leave to the appellant to amend. Accordingly the judgment is reversed, and the case is remanded with directions to the district court to grant the appellant 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 computed, and for further proceedings in conformity with this opinion.”
In the case at bar, no need exists for plaintiff to amend her amended complaint. She does charge the amount of her damage and the basis for its computation.
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 plaintiff 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, 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 adverse effect on the flow of plastering*277 materials into Illinois. At this point we disagree. The complaint plainly-charged several times that the effect of all these local restraints was to restrain interstate commerce. Whether these charges be called ‘allegations 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 ease 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; United States v. Griffith, 334 U.S. 100, 68 S.Ct. 941, 92 L.Ed. 1236; American Tobacco Co. v. United States, 328 U.S. 781, 66 S.Ct. 1125, 90 L.Ed. 1575; Mandeville Island Farms v. American Crystal Sugar Co., 334 U.S. 219, 68 S.Ct. 996, 92 L.Ed. 1328; International Salt Co. v. United States, 332 U.S. 392, 68 S.Ct. 12, 92 L.Ed. 20 and Indiana Farmer’s Guide Pub. Co. v. Prairie Farmer Pub. Co., 293 U.S. 268, 55 S.Ct. 182, 79 L.Ed. 356. 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 proceedings not inconsistent with the views herein expressed.
Reversed and remanded.
. See opinion of the district court, 156 F.Supp. 286.
. Lawrence county is in tlie Southern District of Indiana. 28 U.S.C.A. 94.
. 28 U.S.C.A., rule 8(a) provides:
“Claims for Relief. A pleading which sets forth a claim for relief, whether an original claim, counterclaim, cross-claim, or third-party claim, shall contain (1) a short and plain statement of the grounds upon which the court’s jurisdiction depends, unless the court already has jurisdiction and the claim needs no new grounds of jurisdiction to support it, (2) a sliort and plain statement of the claim showing that the pleader is entitled to relief, and (3) a demand for judgment for the relief to which he deems himself entitled. Relief in the alternative or of several different types may be-demandod.”
. 28 U.S.C.A., rule 12(b).
Concurrence Opinion
(concurring) .
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 instance 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 complaint and does not appear in the record. However, Paragraph 10 of the amended complaint stated:
“10. That the standard agreements 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 removing 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 alleged an injury to herself sufficient to enable her to maintain a private antitrust suit to recover treble damages therefor. It would seem to appear from the complaint that in her lease she provided 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 payment 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, decided 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 invoking 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 alleged to flow from the acts of Rogers in constructing and operating the quarry on land adjoining plaintiff and thereby “eliminating any possibility of the plaintiff 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 impossible 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 unfeasible.” 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 violations of the Anti-Trust Act are sufficiently pleaded in compliance with Rule-8(a) of the Federal Rules of Civil Procedure. Since the holding in this ease in the district court, our court has given, similar expression in Central Ice Cream-Company v. Golden Rod Ice Cream Company, 7 Cir., 257 F.2d 417, following the recent case of Conley v. Gibson, 1957, 355 U.S. 41, 78 S.Ct. 99, 2 L.Ed.2d 80.