Double D Spotting Service, Inc. v. Supervalu, Inc.

• Decision Date: 11 February 1998
• Docket Number: No. 97-1456,97-1456
• Parties: Fed. Carr. Cas. P 84,077, 1998-1 Trade Cases P 72,058 DOUBLE D SPOTTING SERVICE, INC., Plaintiff-Appellant, v. SUPERVALU, INC.; World Super Services, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 554

136 F.3d 554

Fed. Carr. Cas. P 84,077, 1998-1 Trade Cases P 72,058

DOUBLE D SPOTTING SERVICE, INC., Plaintiff-Appellant, v. SUPERVALU, INC.; World Super Services, Inc., Defendants-Appellees.

No. 97-1456.

United States Court of Appeals,

Eighth Circuit.

Submitted Oct. 23, 1997.

Decided Feb. 11, 1998.

G. Stephen Walters, Winterset, IA, argued, for plaintiff-appellant.

Edward M. Mansfield, Des Moines, IA, argued (Roger T. Stetson, Des Moines, IA, on the brief), for defendants-appellees.

Before RICHARD S. ARNOLD, Chief Judge, LOKEN and HANSEN, Circuit Judges.

HANSEN, Circuit Judge.

Double D Spotting Service, Inc. (Double D) brought this suit against Supervalu, Inc. (Supervalu) and World Super Services, Inc. (World Super Services), alleging that the defendants violated federal antitrust laws, state competition laws, and a federal motor carrier law. The district court dismissed Double D's complaint for failure to state a claim. See Fed.R.Civ.P. 12(b)(6). We affirm in part and reverse in part.

I.

When reviewing a Rule 12(b)(6) dismissal for failure to state a claim, we look only to the facts alleged in the complaint and construe them in the light most favorable to the plaintiff. See Doe v. Norwest Bank Minnesota, N.A., 107 F.3d 1297, 1303-04 (8th Cir.1997). In its amended and substituted complaint, Double D pleaded that until 1996, it had been in the business of competing with other companies to provide semitrailer unloading services for over the road trucking companies that deliver goods to the Supervalu warehouse in Urbandale, Iowa. The semitrailers travel in interstate commerce, carrying goods that are unloaded at the Supervalu warehouse and subsequently shipped to grocery stores in several states. In addition to unloading trucks driven to the warehouse by the trucking company drivers, Double D offered trucking companies a more involved unloading service. By agreement with Double D, the trucking company could drop its loaded, unhooked semitrailer at a nearby interstate truck stop. A Double D driver driving a Double D tractor would then hook on to the trailer and transport it to the Supervalu warehouse. The Double D driver would then unload the semitrailer and return it empty to the same truck stop location for the over the road trucking company to retrieve at its convenience. This service allowed the over the road trucking company to save the time and expense of paying its own driver both to deliver the semitrailer to the warehouse and to wait for it to be unloaded. It also freed up the trucking company's tractor for other work.

In 1996, Supervalu entered into an agreement granting World Super Services the exclusive right to provide unloading services at the Urbandale warehouse. The agreement provided fixed prices to be charged by World Super Services and barred all other unloading companies from performing any unloading services at the Urbandale warehouse. Thereafter, trucking companies could choose either to unload their own trucks at the warehouse or to hire World Super Services to unload them. Double D complains that the agreement between Supervalu and World Super Services wrongfully eliminated competition and imposed an unreasonable restraint on the unloading services trade at Supervalu's Urbandale warehouse.

Double D originally brought suit against Supervalu and World Super Services in state court, seeking an injunction and damages for the defendants' alleged restraint of trade and competition in violation of state and federal antitrust law and for alleged tortious interference with Double D's business relationships. The defendants removed the case to federal district court and moved to dismiss the complaint pursuant to Rule 12(b)(6) for failure to state a claim upon which relief may be granted. Double D filed an amended and substituted complaint in federal district court, alleging in counts I through IV that the defendants contracted to restrain trade in violation of Iowa Code § 553.4 (1997) and Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1 (1994); and that they attempted to establish a monopoly in violation of Iowa Code § 553.5 and Section 2 of the Sherman Antitrust Act, 15 U.S.C. § 2. Count V alleges a violation of 49 U.S.C.A. § 14103(b) (West 1997), which prohibits the act of coercing any motor carrier operator to pay someone to load or unload the property being transported in interstate commerce.

The district court granted the defendants' motion to dismiss. The court held that Double D failed to state a claim of restraint of trade or monopoly as alleged in counts I through IV, concluding that the facts as alleged do not constitute a legally cognizable relevant market or demonstrate an actual adverse impact on competition within that market. Additionally, the district court concluded that count V, asserting coercion of a "person providing transportation of property by motor vehicle for compensation in interstate commerce," fails to state a claim because there is no allegation that any trucking companies were forced or coerced to pay World Super Services to unload their semitrailers. Double D appeals the dismissal of its complaint.

II.

We review de novo the district court's grant of a motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). Association of Commonwealth Claimants v. Moylan, 71 F.3d 1398, 1402 (8th Cir.1995). Using the same standard as the district court, we must accept the factual allegations of the complaint as true and construe the complaint in the light most favorable to the plaintiff. Doe, 107 F.3d at 1303-04. We affirm a Rule 12(b)(6) dismissal if "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Hafley v. Lohman, 90 F.3d 264, 266 (8th Cir.1996) (internal quotations omitted), cert. denied, --- U.S. ----, 117 S.Ct. 1081, 137 L.Ed.2d 216 (1997).

A. Antitrust Claims

The first four counts of Double D's complaint allege violations of state and federal antitrust law. Two counts are based on the Sherman Antitrust Act, which declares it unlawful to contract or form a conspiracy "in restraint of trade or commerce among the several States," 15 U.S.C. § 1, and which makes it a felony to "monopolize, or attempt to monopolize ... any part of the trade or commerce among the several States," 15 U.S.C. § 2. Two counts are based on Iowa statutes that mirror these federal prohibitions, absent the interstate commerce element. See Iowa Code §§ 553.4, 553.5. ¹ "The essential elements of a private antitrust claim must be alleged in more than vague and conclusory terms to prevent dismissal of the complaint on a defendant's [Rule] 12(b)(6) motion." Crane & Shovel Sales Corp. v. Bucyrus-Erie Co., 854 F.2d 802, 805 (6th Cir.1988).

The district court concluded that Double D's antitrust claims failed to state a claim because Double D failed to plead a valid relevant market. Double D contends that it was not required to plead a relevant market because it pleaded per se antitrust violations. Alternatively, Double D asserts that even if it was necessary for it to plead a relevant market, the Supervalu warehouse in Urbandale itself is the relevant market for trailer unloading services.

To demonstrate a violation of section 1 of the Sherman Act, a plaintiff must provide proof of an illegal contract, combination, or conspiracy which results in an unreasonable restraint of trade. State Oil Co. v. Khan, 522 U.S. 3, ----, 118 S.Ct. 275, 279, 139 L.Ed.2d 199 (1997). "[M]ost antitrust claims are analyzed under a 'rule of reason,' according to which the finder of fact must decide whether the questioned practice imposes an unreasonable restraint on competition." Id. This "rule of reason" analysis involves an inquiry into the market structure and the defendant's market power in order to assess the actual effect of the restraint. Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 768, 104 S.Ct. 2731, 2740, 81 L.Ed.2d 628 (1984); see also Flegel v. Christian Hosp., Northeast-Northwest, 4 F.3d 682, 688 (8th Cir.1993).

Certain types of restraint are so inherently anticompetitive that they are illegal per se, without inquiry into the reasonableness of the restraint or the harm caused. Copperweld Corp., 467 U.S. at 768, 104 S.Ct. at 2740; see also Khan, at ----, 118 S.Ct. at 279. "It is only after considerable experience with certain business relationships that courts classify them as per se violations of the Sherman Act." United States v. Topco Assocs., 405 U.S. 596, 607-08, 92 S.Ct. 1126, 1133, 31 L.Ed.2d 515 (1972). "Per se treatment is appropriate once experience with a particular kind of restraint enables the Court to predict with confidence that the rule of reason will condemn it." Khan, at ----, 118 S.Ct. at 279 (internal quotations and alterations omitted).

Practices which have been held to be illegal per se include price-fixing, division of markets, group boycotts, and tying arrangements. See Arizona v. Maricopa County Med. Soc., 457 U.S. 332, 344 n. 15, 102 S.Ct. 2466, 2473 n. 15, 73 L.Ed.2d 48 (1982); Northern Pac. Ry. v. United States, 356 U.S. 1, 5, 78 S.Ct. 514, 518, 2 L.Ed.2d 545 (1958). The district court concluded that under a liberal construction of the factual circumstances pleaded, Double D failed to plead circumstances under which it could prove a per se antitrust violation. We agree.

In support of its contention that it has pleaded per se violations, Double D contends that the agreement between Supervalu and World Super Services amounts to a horizontal restraint of trade, which the Supreme Court has described as a "naked restraint[ ] of trade with no purpose except stifling of competition." Topco, 405 U.S. at 608, 92 S.Ct. at 1133-34 (internal quotations omitted). Horizontal restraints of trade result when combinations of traders at one level of the market structure agree to exclude direct competitors from the same level of the market. See id. Thus, a plaintiff...