Jack Russell v. American Kennel Club

• Decision Date: 17 May 2005
• Docket Number: No. 02-17264.,No. 03-15345.,02-17264.,03-15345.
• Citation: 407 F.3d 1027
• Parties: The JACK RUSSELL TERRIER NETWORK OF NORTHERN CALIFORNIA, a California non-profit corporation; Claudia Sprague; Georgia Fisher, Plaintiffs-Appellants, v. AMERICAN KENNEL CLUB, INC., a New York not-for-profit corporation; The Jack Russell Terrier Club of America, a Kentucky non-profit corporation, Defendants-Appellees. The Jack Russell Terrier Network of Northern California, a California non-profit corporation; Claudia Sprague; Georgia Fisher, Plaintiffs-Appellees, v. American Kennel Club, Inc., a New York not-for-profit corporation, Defendant, and The Jack Russell Terrier Club of America, a Kentucky non-profit corporation, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

407 F.3d 1027

The JACK RUSSELL TERRIER NETWORK OF NORTHERN CALIFORNIA, a California non-profit corporation; Claudia Sprague; Georgia Fisher, Plaintiffs-Appellants, v. AMERICAN KENNEL CLUB, INC., a New York not-for-profit corporation; The Jack Russell Terrier Club of America, a Kentucky non-profit corporation, Defendants-Appellees.

The Jack Russell Terrier Network of Northern California, a California non-profit corporation; Claudia Sprague; Georgia Fisher, Plaintiffs-Appellees, v. American Kennel Club, Inc., a New York not-for-profit corporation, Defendant, and The Jack Russell Terrier Club of America, a Kentucky non-profit corporation, Defendant-Appellant.

No. 02-17264.

No. 03-15345.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted December 8, 2004.

Filed May 17, 2005.

COPYRIGHT MATERIAL OMITTED

Malcolm A. Misuraca, Law Offices of Malcolm A. Misuraca, Newport Beach, CA, Victoria E. Brieant, Stroock & Stroock & Lavan LLP, Miami, FL, for the plaintiffs-appellants.

Eric R. Haas, Charles A. Alfonzo, Burnham Brown LLP, Oakland, CA, for the defendants-appellees.

Appeal from the United States District Court for the Northern District of California; James Ware, District Judge, Presiding. D.C. Nos. CV-98-20932-JW, CV-98-20932-JW.

Before: D.W. NELSON, KLEINFELD, and GOULD, Circuit Judges.

GOULD, Circuit Judge:

We must decide whether a complaint alleging a national dog club's policy banning members that register their dogs with an alternative club raises cognizable claims of group boycott pursuant to the Sherman Act. We must also decide whether Appellants' claim of false advertising pursuant to the Lanham Act was properly dismissed for lack of standing after trial.

The Jack Russell Terrier Network of Northern California ("JRTNNC") and individual Jack Russell Terrier owners and breeders Claudia Sprague and Georgia Fisher (collectively "Appellants") appeal the district court's judgment, following a dismissal of antitrust claims on motion, and a dismissal of false advertising claims after bench trial, in favor of the Jack Russell Terrier Club of America ("JRTCA"). The JRTNNC, a former regional affiliate of the JRTCA, seeks declaratory and injunctive relief regarding a JRTCA policy known as the "Conflicting Organization Rule" ("COR"), which provides that JRTCA affiliates and members will recognize only the JRTCA registry of Jack Russell Terriers, and will not register their dogs with conflicting organizations such as the American Kennel Club ("AKC"). The Appellants argue that the COR and its enforcement mechanisms constituted a "group boycott" and "false advertising" in violation of the Sherman and Lanham Acts, and unlawfully subjected the JRTNNC to liability from those injured by the policy.

The district court granted the JRTCA's motion to dismiss the Appellants' Sherman Act claims. After a bench trial, the district court held that the Appellants lacked standing to raise a claim under the Lanham Act. The Appellants appealed the dismissal pursuant to Federal Rule of Civil Procedure 12(b)(6) and the trial ruling. The JRTCA cross-appealed the district court's decision to deny the JRTCA any of its costs. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.

I

This case arises from a philosophical disagreement between groups of well-intentioned people dedicated to a breed of dog, the Jack Russell Terrier. A preliminary historical note is illuminating: Jack Russell Terriers were first bred in the south of England in the mid-1800's to hunt European red fox, both over and underground, for the sport of kings. The breed got its name from a renowned Nineteenth Century British huntsman and breeder, Parson John Russell, known as "The Sporting Parson," whose passion for fox hunting and working terriers was legendary. Russell developed and bred the particular strain of white-bodied "fox" terriers now known as Jack Russell Terriers to emphasize their working and hunting abilities.¹

The JRTCA is a national breed club and dog registry with standards aimed at preserving the working-dog characteristics and heritage of the Jack Russell Terrier.² Formed in 1976, the JRTCA is the largest organization and registry of Jack Russell Terriers in the world, and derives a substantial amount of income from interstate and foreign commerce in the Jack Russell Terrier.³ As its membership expanded, regional affiliates of the JRTCA formed, and were required to comply with the JRTCA's constitution as terms of membership. The JRTCA promotes, runs, and sanctions national dog trials for the Jack Russell Terrier. The club affiliates host regional Jack Russell Terrier shows and trials for which the JRTCA provides certified judges. The winners of the regional shows are eligible for the annual national JRTCA Jack Russell Terrier show. Jack Russell Terrier owners and breeders attend these JRTCA events to have their dogs compete in trial events and be judged in shows to the breed standard; to advertise, buy, and sell terriers; and to win awards. Awards are marks of excellence for dog breeders that they use to differentiate and promote their kennels in future commerce. Only JRTCA members are allowed to participate in JRTCA events.

Until recently, the Jack Russell Terrier was not a breed recognized by the AKC, the well-known umbrella registry for almost all types of pure-bred dogs in the United States. Consequently, unlike other breeds recognized by the AKC, there was no AKC registry of Jack Russell Terrier breeders or an AKC-breed certification by which potential owners could verify the authenticity of prospective dogs. Aiming to remedy this omission, in 1991 a minority group of JRTCA members asked the AKC to recognize the Jack Russell Terrier as an official breed. They formed a "foundation stock" of dogs to stand as a base for a AKC dog registry and to be used to trace the pedigree of offspring. The AKC accepted the Jack Russell as an official AKC-certified breed in 1998.⁴

The JRTCA opposed the AKC listing of Jack Russell Terriers, believing that an alternative all-breed kennel club standard and registry was not in the best interests of the dog. The JRTCA emphasizes the working-dog characteristics of the breed, and believes that any kennel club standard would over time change the dog into a show breed, bred for form not function.⁵ The JRTCA undertook a campaign to discourage its members and the public from participating with the AKC, which included the adoption of the COR.⁶ As part of its policy,⁷ JRTCA members who registered their dogs with the AKC had their JRTCA membership terminated and were not permitted to participate in JRTCA dog shows.

Georgia Fisher and Claudia Sprague, two of the Appellants, are former Jack Russell Terrier breeders who were barred from competing in JRTCA-sanctioned terrier trials after registering their dogs with the AKC. In addition to being denied access to JRTCA dog trials and shows, the JRTCA "blacklisted" members who registered with the AKC by listing them in the JRTCA's bimonthly magazine dedicated to Jack Russell Terriers, True Grit.⁸ Both Fisher and Sprague were "blacklisted" in True Grit. The Appellants allege that after the listing other Jack Russell Terrier owners and breeders would not associate with Fisher, breed with her dogs, or buy her puppies.

Fisher and Sprague then independently consulted an attorney who wrote letters to the JRTNNC threatening legal action if the JRTNNC refused to allow the breeders to participate in future JRTNNC dog shows.⁹ The JRTNNC in turn contacted the JRTCA, requesting indemnification from the national organization if Fisher or any other breeder sued the JRTNNC for enforcing the JRTCA's COR, and denying those owners the ability to participate in JRTNNC events. The JRTCA responded that, while it would continue to require the JRTNNC to comply with JRTCA regulations and to enforce them against members who registered dogs with the AKC, the JRTCA would not indemnify the JRTNNC from any possible liability. The JRTNNC concluded that it could not subject itself and its members to potential liability without indemnification, and therefore would permit AKC-registered owners to participate in its regional terrier events. The JRTCA then terminated the JRTNNC's charter.

The JRTNNC filed suit in the United States District Court for the District of Northern California, naming the JRTCA and the AKC as defendants, and claiming that the JRTCA's COR was an illegal group boycott of AKC dog owners and breeders in violation of § 1 of the Sherman Act, 15 U.S.C. § 1.

The AKC moved to dismiss based on the fact that the JRTNNC had failed to point to any AKC conduct causing the JRTNNC injury. The JRTCA also moved to dismiss. The district court granted both motions and dismissed the action, granting leave for the JRTNNC to amend its complaint as against the JRTCA.

The JRTNNC filed a second amended complaint, adding Sprague and Fisher as co-plaintiffs. The JRTNNC then filed a third amended complaint, adding the Jack Russell Terrier Club of Great Britain as a named co-defendant, as well as two regional JRTCA affiliates, the California South Coast Jack Russell Terrier Club ("SCJRTC") and the Jack Russell Terrier Club of Central California ("JRTCCC").¹⁰ The third amended complaint requested declaratory and injunctive relief, and raised seven claims asserting a "group boycott" in violation of the Sherman Act, a claim of "false description" in violation of the Lanham Act, and two state law claims of unfair competition.

The JRTCA again moved for a Rule 12(b)(6) dismissal. The district court granted the motion as to the JRTNNC's Sherman Act claims, but denied the motion as to the Lanham Act claim and the California state law claims. Regarding the Sherman Act "group boycott" claims, the district court found that the JRTNNC had not alleged that the JRTCA-affiliated local clubs pursued different economic goals than the national JRTCA, and that this lack of multiple actors was fatal...