State Ex Rel. Ieyoub v. Racetrac Petroleum, Inc.State Ex Rel. Ieyoub v. Racetrac Petroleum, Inc.
Steven Gerald Durio, Durio, McGoffin & Stagg, Lafayette, LA, Jerald R. Harper, Glenn Louis Langley, Cook, Yancey, King & Galloway, Shreveport, LA, Robert Louis Broussard, Durio, McGoffin, & Stagg, Lafayette, LA, Nicole Montagnet Smith, Cook, Yancey, King & Galloway, Shreveport, LA, Counsel for: Racetrac Petroleum, Inc.
John F. McDermott, Taylor, Porter, Brooks & Phillips, L.L.P., Baton Rouge, LA, Counsel for: Lard Oil Company, Inc.
Joseph Nicholas Mole, Frilot, Partridge, Kohnke & Clements, New Orleans, LA, Counsel for: Murphy Oil USA, Inc.
Arthur Falls Schafer, Assistant Attorney General, Lafayette, LA, Counsel for: State of Louisiana ex rel. Richard P. Ieyoub.
John David Ziober, Kennon, Odom, etc., Baton Rouge, LA, Counsel for: Cracker Barrel Stores, Inc.
Richard G. Barham, Barham & Warner, Shreveport, LA, Counsel for: Brookshire Grocery Company.
Theodore Glenn Edwards IV, Attorney at Law, Lafаyette, LA, Counsel for: Macro Oil Company, Inc.
Lamont Paul Domingue, Voorhies & Labbe, Lafayette, LA, Michael R. Phillips, Frilot, Partridge, Kohnke & Clements, L.C., New Orleans, LA, Counsel for: Murphy Oil USA, Inc.
Jane Anne Bishop Johnson, Assistant Attorney General, Baton Rouge, LA,
Brian A. Cowan, Cook, Yancy, King & Galloway, Shreveport, LA, Counsel for: Racetrac Petroleum, Inc., Super One Foods, Brookshire Grocery Company, Sporty‘s, Pumpelly Oil, Inc., Speedway § Gate Food Stores, Marathon Oil Company, Circle K Stores, Tosco Corporation.
Agent for Service Prentice-Hall Corporation, Agent for Chevron, Inc., New Orleans, LA, Counsel for: Chevron USA, Inc.
Agent C.T. Corporation System, Agent for Service, Baton Rouge, LA, Counsel for: Diamond Shamrock Refining and Marketing Company, Tosco Corporation, Bayou Food Stores, Inc., Marathon Oil Company.
Court composed of ULYSSES GENE THIBODEAUX, JOHN D. SAUNDERS, and MICHAEL G. SULLIVAN, Judges.
SAUNDERS, Judge.
FACTS
On October 4, 1999, the Attorney General, on behalf of the State, filed a Petition for Injunctive Relief against twenty-two defendants, including Racetrac Petroleum, Inc. (Racetrac) and Murphy Oil, USA, Inc. (Murphy). The petition asserted that the Defendants were wholesalers or retailers engaged in the retail sale of gasoline and other petroleum products below cost as defined in the Louisiana Unfair Sales Act at
On May 4, 2000, the Attorney General filed its Petition Amended to Include Enforcement of Additional Complaints, Fines and Damages (the amended petition), naming only Racetrac as Defendant to the additional claims asserted therein. In the amended petition, the Attorney General asserted additional claims against Racetrac, alleging that it had violated the Louisiana False Advertising Law at
Later, in an attempt to eliminate the vagueness of his earlier petitions, the Attorney filed its second Petition Amended to Include Enforcement of Additional Complaints, Fines and Damages (second amended petition). In this petition, the only Defendants named were Racetrac and Murphy. The Attorney General alleged that both Racetrac and Murphy had violated
On January 9, 2001, Murphy and Racetrac responded to the amended petition by filing numerous motions and exceptions.
Then, on March 12, 2001, the trial judge held a hearing on the motions and exceptions filed by Racetrac and Murphy. The trial judge signed its judgment concerning each motion and exception filed on March 30, 2001. From this judgment, the Attorney General took an expedited appeal pursuant to
LAW AND ANALYSIS
ASSIGNMENTS OF ERROR BY ATTORNEY GENERAL
On appeal the Attorney General makes the following assignments of error:
1. The trial judge erred in sustaining the Defendants’ peremptory exceptions
of no cause of action pursuant to La.R.S. 51:122 andLa.R.S. 51:123 .2. The trial judge erred in not denying outright the Defendants’ exceptions of no right of action and lack of procedural capacity pursuant to
La.R.S. 51:122 andLa.R.S. 51:123 .3. The trial judge erred in dismissing the Attorney General‘s action pursuant to
La.R.S. 13:5081 and refusing to enforce the statute.4. The trial judge erred in dismissing the Attorney General‘s action pursuant to
La.R.S. 51:1411 .5. The trial judge erred in denying the police power of the State in the face of the Defendants’ vague allegations of the unconstitutionality of
La.R.S. 13:5081 .6. The trial judge erred in sustaining Murphy‘s еxception of improper cumulation of actions and in dismissing the Attorney General‘s
La.R.S. 51:123 claims against the Defendants.7. The trial judge erred in granting the Defendants’ motions to compel discovery pursuant to
La.Code Civ.P. art. 1442 .8. The trial judge erred in not holding outright that federal antitrust law does not preempt Louisiana antitrust law.
ANSWER TO APPEAL BY RACETRAC
In response to the Attorney General‘s appeal, Racetrac filed an answer to appeal on April 30, 2001, asserting the following assignments of error:
1. The trial judge erred in denying Racetrac‘s peremptory exception of no right of action for damages and lack of procedural capacity with respect to the State‘s claim for damages under the Unfair Trade Practices Act, the Unfair Sales Act, and the Price Discrimination Act.
2. The trial judge erred in denying Racetrac‘s motion to deem facts confessed.
3. The trial judge erred in denying Racetrac‘s peremptory exception of res judicata based upon the judgment of the First Judicial District Court of Caddo Parish, Case No. 444165-A.
NO CAUSE OF ACTION
In his first assignment of error, the Attorney General asserts that the trial judge erred in sustaining the Defendants’ peremptory exceptions of no cause of action pursuant to the antimonopoly and antitrust statutes located at
Generally, if a petition states a cause of action as to any ground or portion of a plaintiffs demand, a trial court must deny an exception of no cause of action. Ward v. Tenneco Oil Co., 564 So. 2d 814 (La.App. 3 Cir. 1990). However, our jurisprudence has recognized an exception to this rule where separate and distinct causes of action are brought under one petition. Id.; See Everything on Wheels Subaru, Inc. v. Subaru South, Inc., 616 So. 2d 1234 (La. 1993).
La.R.S. 51:122
The Attorney General filed three petitions in the instant matter, one original petition and two amending petitions. After the second amended petition, Murphy filed an exception of vagueness which the trial court sustained. The trial court ordered the Attorney General to cure the vagueness problem. As a result, the Attorney General filed a second amended petition.
Considering the facts alleged in all three petitions, the Attorney General did not provide facts sufficient to support his claim that Racetrac and Murphy violated
La.R.S. 51:123
The Defendants argue that the Attorney General failed to plead any facts to define the relevant market in which they allegedly exercised their market power. In addition, the Defendants argue that the Attorney General failed to allege the monopoly power market share held by the Defendants, and failed to allege any illicit acts on the part of the Defendants to retain such power and market share.
Failure to define the market in which the monopoly is allegedly exercised is fatal to a monopolization claim. Jefferson, 713 So. 2d 785. The “relevant market” in antitrust cases is the “market which is relevant in the area of effective competition within which the defendant operates” and has two elements: product and geography. Louisiana Power & Light Co., 478 So. 2d 1240, 1248 (La.App. 4 Cir. 1985), affirmed in part, reversed in part, 493 So. 2d 1149 (La. 1986). For the product element, “the relevant market consists of those goods which are reasonably interchangeable for the purposes for which they are produced, taking into account price, use and quality.” Id. The geographic element consists of the “area in which sellers of the defendant‘s product operate, and to which buyers can practicably turn to obtain that product.” Id.
The Defendants urge that the pleadings fail to allege the existence of the relevant product and geographic markets. In support of this argument, the Defendants point to the pleadings which define the relevant product market as regular unleaded gasoline, as both wholesale and retail gasoline, and as simply undefined wholesale and retail prices. Because of this, the Defendants urge that the Attorney General‘s pleadings neither allege a proper product market nor attempt to show that it “consists of those goods which are reasonably interchangeable for the purpose for which they are produced, taking into account, price, use and quality.” Id.
In addition, the Defendants argue that the Attorney General did not allege the geographic boundaries and extent of the market within which Defendants are alleged to be possessed with monopoly power. Specifically, Racetrac notes that in his various petitions, the Attorney General has alleged that Racetrac‘s unlawful conduct was alleged to have occurred “in various parts of the State,” “in the Covington area,” “the Covington market area,” “in the Lafayette area,” and in “different localities in the State.” Likewise, Murphy argues that the Attorney General‘s allegations that it acted in the “Lafayette market” and that it damaged an unnamed competitor in Covington, Louisiana are insufficient.
Additionally, the Defendants argue that the Attorney General failed to allege any facts concerning the Defendants’ respective market shares, in order to show that they possessed the ability to control prices or exclude competition from the market. To plead a violation of
In the instant case, the Attorney General made no factual allegations which suggest that the Defendants possessed the ability to control prices or exclude competition from the market as required to prove a cause of action under
NO RIGHT OF ACTION/LACK OF PROCEDURAL CAPACITY
In his second assignment of error, the Attorney General asserts that the trial judge erred in finding that the Defendants’ exceptions of no right of action and lack of procedural capacity under
La.R.S. 13:5081
The Attorney General‘s third and fifth assignments of error involve the same issue, and we will address these assignments together. Essentially, the Attorney General urges that the trial judge erred in dismissing his action pursuant to
The Attorney General, or any district attorney, acting under the direction of the former, or of the governor, shall begin any action to enforce the laws respecting monopolies, combinations or conspiracies in restraint of trade, commerce or business. The prosecuting officer either in preparation for or upon the trial of the case may take testimony of any officer, director, agent or employee of any foreign or domestic corporation, joint stock association, or of any member of any copartnership, or of any individual or individuals against whom proceedings are brought. If the person or persons whose testimony is desired, resides within or outside the state, the prosecuting officer shall file in court where the action is brought, at any time, or with any special commissioner appointed in accordance with R.S. 13:5085 by the court to take testimony, a written statement setting forth the following:
(1) What the state expects to prove;
(2) The name or names and residences of the persons whose testimony he desires to take;
(3) All books, papers or documents specifically designated he desires produced;
(4) The time and place, either within or outside the state he desires the person
to appear and testify, or to produce the books, papers and documents.
Little jurisprudence exists concerning the interpretation of
On appeal, the fifth circuit found that the trial court had committed legal error. The court concluded that although seldom used,
Title 51 of the Louisiana Revised Statutes contains our law involving trade and commerce. Although the Attorney General asserts that the Defendants have violated a number of these laws, the only laws in this title concerning “monopolies, combinations, or conspiracies in restraint of trade, commerce or business” are those contained in Part IV of the title.3
In the instant case, the Defendants argue that the trial court did not err in prohibiting the Attorney General from using the specialized procedures under
La.R.S. 51:1411
In his fourth assignment of error, the Attorney General asserts that the trial judge erred in dismissing the State‘s action pursuant to
A. When the attorney general and director have evidence that a person has engaged in or is engaged in any method, act, or practice declared to be unlawful by this chapter and they believe it to be in the public interest that an investigation should be made to ascertain whether a person in fact has engaged in or is engaging in any act or practice declared to be unlawful, the attorney general and director mаy execute in writing and cause to be served upon any person who is believed to have information, documentary
material or physical evidence relevant to the alleged or suspected violation, an investigative demand. Such investigative demand shall contain a description of the unlawful method, act or practice under investigation, and shall require such person to furnish, under oath or otherwise, a report in writing setting forth the relevant facts and circumstances of which he has knowledge, or to produce relevant documentary material or physical evidence for examination, at such reasonable time and place as may be stated in the investigative demand, concerning the advertisement, sale or offering for salе of any goods or services or the conduct of any trade or commerce that is the subject matter of the investigation. B. At any time before the return date specified in the investigative demand, or within twenty days after the demand has been served, whichever is shorter, a petition stating good cause for a protective order to extend the return date, or to modify or set aside the demand, may be filed in the district court having civil jurisdiction in the parish where the person served with the demand resides or is domiciled or has his principal place of business.
C. If no protective order from the court is secured and the written request by the attorney general and director is not complied with by the return date thereof, the attorney general and director may apрly to the court for an order compelling compliance with the demand under R.S. 51:1413.
The Attorney General argues that the powers provided to him in this statute may be used as a discovery device during the pre-trial phase of the case, citing State ex rel. Ieyoub v. Classic Soft Trim, Inc., 96-1041 (La.App. 5 Cir. 1/15/97); 688 So. 2d 105, writ denied, 97-0402 (La. 3/27/97); 692 So. 2d 397.
Classic Soft Trim, Inc. involved an antitrust and unfair trade practices suit brought by the Attorney General against Classic Soft Trim, Inc. The focus on appeal was the trial court‘s grant of a preliminary injunction in favor of the defendants. The injunction prohibited the State from issuing investigative demands or conducting discovery without giving notice to the defendants. The primary issue to be resolved was whether the Attorney General was required under
In opposition to the Attornеy General‘s appeal, the defendants argued that he could not use an investigative demand to circumvent the notice requirements for discovery under the Louisiana Code of Civil Procedure. Id. In support of their argument, the defendants referred to
The fifth circuit concluded that such notice was not required under
“Louisiana‘s antitrust and unfair trade practices laws are sui generis statutes regulating monopolies and restraints of trade or commerce in this state. (citation omitted). Certain specialized procedures are embodied in these sui generis statutеs.” The investigative demand authorized by La. R.S. 51:1411 is just such a specialized procedure, and the trial
court committed error by granting a preliminary injunction imposing on the Attorney General a notice requirement for discovery not established by that statute.
Classic Soft Trim, Inc., 688 So. 2d at 108.
The main issue in Classic Soft Trim, Inc. was not whether investigative demands may be used as a pre-trial discovery device against parties, but whether notice to parties was needed to use such demands against non-parties once suit had been instituted. Accordingly, we do not find Classic Soft Trim, Inc. helpful in resolving the issues at hand.
Aside from Classic Soft Trim, Inc., scarce jurisprudence exists as to the applicability of
In Humphreys, the Attorney General‘s office served investigative demands on two Arthur Murray Dance Studios located in New Orleans. Mr. Humphreys opposed the investigative order, petitioning for a protective order pursuant to
On review by the Louisiana Supreme Court, it found that the investigative demands “did not sufficiently comply with the requirements of R.S. 51:1411A.” Humphreys, 377 So. 2d at 90. The court found that the demand‘s allegations were “very general statements: nowhere was a specific incident or victim named.” Id. The court found these general statements inadequate in light of the statute‘s specific requirement that the Attorney General “have evidence that a person has engaged in or is engaged in any method, аct, or practice to be declared unlawful.” Id. Finally, the court noted:
At least at this stage, the matter of Humphreys, Arthur Murray, and the attorney general and the director of the consumer protection agency is not a criminal case, but a civil matter, which would more appropriately be governed by standards of pleading in civil cases. Since the “investigative demand” is not a subpoena, but the commencement, so to speak, of the action against Humphreys, it ought to show on its face that the statute requirements have been met before a private person is compelled to expose his otherwise private affairs and business records to the attorney general. The demand should state, not that the attorney general May have evidence of violations, but that he Has such evidence. This is the minimal and fundamental requirement which the attorney general chooses not to meet.... The demand should be as specific and as factual as a petition in a civil suit, alleging, not the evidence, but the “material facts” on which it is based. C.C.P. 891.
In the instant case, the Defendants urge that the procedures available to the Attorney General under
Because
EXCEPTION OF IMPROPER CUMULATION
In his sixth assignment of error, the Attorney General argues that the trial judge erred in sustaining Murphy‘s exception of improper cumulation of actions and in dismissing the Attorney General‘s
For the reasons set forth above, R.S. 13:5081 and R.S. 51:1411 are discovery devices which the Attorney General may use in the enforcement of both the antitrust and unfair trаde laws. Intellectual honesty and the law demand reversal of this improper sustaining of defendant‘s exception of improper cumulation of actions pursuant to the authorities used by the Attorney General in this brief.
Because the Attorney General does not cite the record or put forth any legal argument as to why this assignment of error may be meritorious, we decline to review this assignment of error under Uniform Rule 12-12.4 of the Courts of Appeal.
MOTIONS TO COMPEL
In his seventh assignment of error, the Attorney General urges that the trial court erred in granting Racetrac‘s and Murphy‘s motions to compel discovery. Specifically, the Attorney General argues that the Defendants’ motions to compel should not have been granted because they failed to present any evidence of the relevancy of their discovery requests. The Attorney General views discovery in this case as one-sided. He asserts that “no fact is in contention other than that required by the relevant statutes pleaded by the Attorney General, proof of which is to be found in the records of the defendants.... Defendants have been granted no constitutional, statutory or jurisprudential authority to investigate the
The Attorney General also outlines what he believes is the only evidence relevant to this case:
The statutes provide the only matters of evidence which have relevance to this case as follows:
For violations of R.S. 51:421, the relevant proof is:
1. Invoices
2. Proof of freight charges
3. Proof of cartage charges (freight)
4. Mark up of 6% after all of the above figures have bеen added together.
For violations of R.S. 51:331, the relevant proof is:
1. Proof of sales at different prices in different cities in Louisiana.
Therefore, only documentary evidence as stated above is relevant. No interrogatories or depositions responded to by any employee of the Attorney General‘s Office or any other office of the State of Louisiana can change one shred of documentary evidence necessary for proof of any fact which is in contention in this matter as demonstrated by the pleadings.
Accordingly, the Attorney General asserts that the discovery sought by the Defendants is totally irrelevant to the issues in the case.
The scope of discovery in a civil case is broad. Generally, a party “may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action.”
Furthermore, the courts must liberally and broadly construe discovery statutes to achieve their intended objectives. Testa Distributing Co., Inc. v. Tarver, 584 So. 2d 300 (La.App. 1 Cir. 1991). These objectives include:
(1) tо afford all parties a fair opportunity to obtain facts pertinent to the litigation, (2) to discover the true facts and compel disclosure of these facts wherever they may be found, (3) to assist litigants in preparing their cases for trial, (4) to narrow and clarify the basic issues between the parties, and (5) to facilitate and expedite the legal process by encouraging settlement or abandonment of less than meritorious claims. Hodges v. Southern Farm Bureau Casualty Insurance Company, 433 So. 2d 125 (La. 1983); Cantrelle Fence and Supply Co., Inc. v. Allstate Insurance Company, 550 So. 2d 1306 (La.App. 1st Cir. 1989), writ denied, 559 So. 2d 123 (La. 1990).
A party seeking to compel discovery bears the burden of proving that the matters sought to be discovered are relevant. Id. In determining whether to compel discovery, the trial judge has vast discretion. Id.
A review of the record shows that the Defendants only sought to compel discovery after the Attorney General repeatedly failed to respond to the Defendants’ interrogatories, requests for production
Our review shows us that the interrogatories, request for production of documents, and request for depositions shows that the Defendants’ discovery requests were relevant to the case at hand. While the Attorney General objects to this discovery because it feels that discovery in this matter is limited tо only the materials necessary to prove its case, that assertion is inaccurate. Materials are relevant if they will aid in the defense of an action even if they are inadmissible in trial. See
PREEMPTION
In his final assignment of error, the Attorney General asserts that the trial court erred in not holding outright that federal antitrust law does not preempt Louisiana antitrust law. At trial, the judge did not rule on the Defendants’ exceptions regarding the preemption of federal law because it found that the issues were moot. The trial judge found that the issues were moot because he found that the Attorney General had not stated a cause of action under
RACETRAC‘S ANSWER TO APPEAL
Racetrac filed an answer to the Attorney General‘s appeal on April 30, 2001, fourteen days after the appellate record was lodged with this court. In its answer, Racetrac asserted three assignments of error:
1. The trial judge erred in denying Racetrac‘s peremptory exception of no right of action for damages and lack of proсedural capacity with respect to the State‘s claim for damages under the Unfair Trade Practices Act, the Unfair Sales Act, and the Price Discrimination Act.
2. The trial judge erred in denying Racetrac‘s motion to deem facts confessed.
3. The trial judge erred in denying Racetrac‘s peremptory exception of res judicata based upon the judgment of the First Judicial District Court of Caddo Parish, Case No. 444165-A.
In all cases under this Part the defendant shall file all exceptions in limine litis, or if necessary in the alternative, after the usual delays, and any additional delays as the court may allow; however, a plea to the jurisdiction is not waived by other pleas or exceptions filed. The judge shall take up such exceptions in preference over all other business and shall decide all questions raised in the exceptions within ten days after submission, and his ruling shall have the effect of res judicata, unless the party cast shall appeal within five days.
(Emphasis added.) In addition,
All interlocutory judgments in the cases affected by this Part, and not otherwise provided for, shall be appealable within five days and shall be heard and determined within twenty days after appeal is lodged, and any interlocutory judgments not appealed, except those rendered during the progress of the trial, shall be final, and shall not be reopened on final appeal. Such appeals shall be on the original papers, on the order of the district judge, if a transcript cannot be prepared in time.
(Emphasis added.)
The applicable statute in this instance is
An answer is the equivalent to an appeal on the part of the appellee.
DECREE
Considering the foregoing discussion, we affirm the decision of the trial court. All costs of appeal are assessed against the State.
AFFIRMED.
Notes
As necessary for the assertion or protection of any right or interest of the state, the attorney general shall have authority (1) to institute, prosecute, or intervene in any civil action or proceeding; (2) upon the written request of a district attorney, to advise and assist in the prosecution of any criminal case; and (3) for cause, when authorized by the court which wоuld have original jurisdiction and subject to judicial review, (a) to institute, prosecute, or intervene in any criminal action or proceeding, or (b) to supersede any attorney representing the state in any civil or criminal action.
A party may in his notice name as the deponent a public or private corporation or a partnership or association or governmental agency and designate with reasonable particularity the matters on which examination is requested. The organization so named shall designate one or more officers, directors, or managing agents, or other persons who consent to testify on its behalf, and may set forth, for each person designated, the matters on which he will testify. The persons so designated shall testify as to matters known or reasonably available to the organization. This Article does not preclude taking a deposition by any other procedure authorized in this Chapter.