Tiftarea Shopper, Inc. v. Georgia Shopper, Inc., 85-8759

• Decision Date: 15 April 1986
• Docket Number: No. 85-8759,85-8759
• Citation: 786 F.2d 1115
• Parties: 1986-1 Trade Cases 67,048, 12 Media L. Rep. 1995 TIFTAREA SHOPPER, INC. d/b/a the Tiftarea Shopper, Plaintiff-Appellant, v. GEORGIA SHOPPER, INC., d/b/a the Shopper, Boyd Sumler, Scott Carter, and G.G. Joseph Kunes, Jr., Defendants-Appellees. Non-Argument Calendar.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1115

786 F.2d 1115

1986-1 Trade Cases 67,048, 12 Media L. Rep. 1995

TIFTAREA SHOPPER, INC. d/b/a the Tiftarea Shopper, Plaintiff-Appellant, v. GEORGIA SHOPPER, INC., d/b/a the Shopper, Boyd Sumler, Scott Carter, and G.G. Joseph Kunes, Jr., Defendants-Appellees.

No. 85-8759

Non-Argument Calendar.

United States Court of Appeals Eleventh Circuit.

April 15, 1986.

Herbert T. Schwartz, Houston, Tex., for plaintiff-appellant.

G.G. Joseph Kunes, Jr., Tifton, Ga., for defendants-appellees.

Appeal from the United States District Court for the Middle District of Georgia.

Before GODBOLD, Chief Judge, HILL and ANDERSON, Circuit Judges.

PER CURIAM:

Tiftarea Shopper appeals from a judgment of the district court dismissing its federal and state antitrust claims against Georgia Shopper, Inc., and several individuals connected with that corporation. The district court dismissed the federal claim on defendants' 12(b)(6) motion because it held that plaintiff's complaint failed to state a cause of action and dismissed the state law claims on defendants' 12(b)(1) motion because it lacked subject-matter jurisdiction. We affirm in part and reverse in part.

Tiftarea Shopper is a free newspaper, containing only advertisements and distributed in the Georgia counties of Tift, Atkinson, Ben Hill, Berrien, Colquitt, Cook, Irwin, Turner, and Worth. According to plaintiff's complaint, defendant Georgia Shoppers began to distribute a competing free advertisement newspaper. Plaintiff alleged that the Georgia Shopper hired some of its former employees and had these employees contact advertisers who did business with plaintiff. When the former employees called these advertisers they did not state that they had changed newspapers. The advertisers would reach an agreement with these employees under the assumption that their ads would appear in plaintiff's newspaper. After the advertisers later discovered that these employees were now working for Georgia Shoppers, Georgia Shoppers would attempt to retain their business by offering them advertising rates that were below both the average total cost and the average variable cost of publishing these ads. Plaintiff alleged that this predatory pricing scheme was intended to drive it out of business. It also alleged that this conduct had a substantial effect on interstate commerce because most of its supplies come from interstate commerce, most of its advertisers are engaged in interstate commerce, and it is financed through banks that engage in interstate commerce.

The district court found that the complaint failed to state a cause of action under the federal antitrust laws. It ruled that relief under section 1 of the Sherman Antitrust Act was precluded because the complaint failed to allege a conspiracy in restraint of trade. All of the acts complained of were performed by employees of Georgia Shoppers working in their official capacity. As agents of the corporation all their actions were attributable to the corporation. Under these circumstances, the district court held, there could be no conspiracy because a corporation cannot conspire with itself.

The court also found that the complaint failed to state a cause of action under section 2 of the Act because it failed to allege a " 'specific intent of the part of the defendant to bring about a monopoly and a dangerous probability of success.' " Dist. ct. op. 3, quoting Quality Foods de Centro America, S.A. v. Latin American Agribusiness Development Corp., 711 F.2d 989, 996 (11th Cir.1983) (emphasis in dist. ct. op.). After finding that the complaint stated no federal cause of action, the court dismissed the pendent state law claims for lack of subject matter jurisdiction.

A district court should grant a 12(b)(6) motion only 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." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-102, 2 L.Ed.2d 80 (1957). The Supreme Court has further cautioned that because of the factual nature of most antitrust cases "summary procedures should be used sparingly...." Poller v. CBS, 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962). Applying these principles to the present...