891 F.2d 1473 (10th Cir. 1989), 86-1497, Monument Builders of Greater Kansas City, Inc. v. American Cemetery Assn. of Kansas
|Citation:||891 F.2d 1473|
|Party Name:||MONUMENT BUILDERS OF GREATER KANSAS CITY, INC., Plaintiff-Appellant, v. AMERICAN CEMETERY ASSN. OF KANSAS, et al., Defendants-Appellees.|
|Case Date:||December 19, 1989|
|Court:||United States Courts of Appeals, Court of Appeals for the Tenth Circuit|
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Edward Ray Fechtel of Ray Fechtel, P.C., Eugene, Or., for plaintiff-appellant.
Edward M. Dolson (Roy R. Darke with him on the brief) of Dietrich, Davis, Dicus, Rowlands, Schmitt & Gorman, Kansas City, Mo., for defendant-appellee City of Olathe.
Stephen W. Armstrong of Montgomery, McCracken, Walker & Rhoads, Philadelphia, Pa. (David H. Marion and Bruce C. Johnson of Montgomery, McCracken, Walker & Rhoads, Philadelphia, Pa., and John C. Monica of Shook, Hardy & Bacon, Kansas City, Mo., for defendant-appellee American Cemetery Assn. and David E. Everson, Jr. of Stinson, Mag & Fizzell, Kansas City, Mo., for defendants-appellees Mount Moriah Cemetery, Inc. and Chapel Hill Memorial Gardens, Inc. and various other defendants-appellees with him on the brief).
M. Duncan Grant of Pepper, Hamilton & Scheetz, Philadelphia, Pa. (Edward W. Madeira, Jr. and Sean P. Wajert of Pepper, Hamilton & Scheetz, Philadelphia, Pa., and John L. Vratil of Lathrop, Koontz & Norquist, Overland Park, Kan., with him on the brief), for defendant-appellee Jas. H. Matthews & Co.
Michael J. Gallagher of Wassberg, Gallagher & Jones, Kansas City, Mo. (Thomas M. Franklin of Wassberg, Gallagher & Jones, Kansas City, Mo., and Charles D. Kugler of Vasos, Kugler & Dickerson, Kansas City, Kan., for defendants-appellees Memorial Heritage, Inc. and D-W Newcomer's Sons; and Bernard J. Rhodes of Gage & Tucker, Kansas City, Mo., for defendants-appellees Mount Washington Cemetery and The Brooking Cemetery Assn., and various other defendants-appellees, with him on the brief).
Before SEYMOUR and McWILLIAMS, Circuit Judges, and BOHANON, [*] District Judge.
SEYMOUR, Circuit Judge.
Plaintiff Monument Builders of Greater Kansas City, Inc. is a trade association of independent grave marker builders and dealers. It brought this suit in the district of Kansas on behalf of several independent dealers in the Kansas City area against a large number of local cemeteries, two local cemetery associations, a national cemetery association, and a national manufacturer of bronze monuments. In its complaint, Monument Builders alleges that defendants conspired to engage in various anti-competitive practices in violation of sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2 (1988). The district court dismissed the claims against a number of defendants located in Missouri on the basis of improper venue in the district of Kansas. It dismissed the remaining defendants under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim under either section of the Sherman Act. It also awarded certain defendants attorneys fees under Rule 11. Monument Builders of Greater Kansas City, Inc. v. American Cemetery Assn., 629 F.Supp. 1002 (D.Kan.1986). We reverse the dismissal for lack of venue and failure to state a claim, and reverse in part the awards of fees.
In reviewing a dismissal under Rule 12(b)(6), we must accept all the allegations in the complaint as true. See Perington Wholesale, Inc. v. Burger King Corp., 631 F.2d 1369, 1371 (10th Cir.1979). What follows is a description of the complaint viewed through this forgiving lens.
At the heart of Monument Builders' complaint is a conspiracy among the various defendants to drive independent sellers of grave markers out of the market by forcing purchasers of cemetery plots to buy their marker from the cemetery of their choice. This plan has been implemented through a variety of anti-competitive devices, taking two primary forms: an outright prohibition by cemeteries against the installation of markers not purchased from the cemetery, and various surcharges assessed against customers who choose to purchase their markers from an independent dealer. For example, a cemetery might charge a plot purchaser who chooses not to buy the marker from the cemetery a high fee for installation of the marker or for care and upkeep of the marker. Thus a person desiring to buy a plot in a particular cemetery is either prohibited outright from purchasing a marker elsewhere, or is faced with prohibitively expensive surcharges which would not be assessed if the marker were purchased from the cemetery. 1
Monument Builders brought its suit against thirty cemetery owners in the Kansas City area, thirteen of which own cemeteries only in Kansas, sixteen of which own cemeteries only in Missouri, and one of which owns cemeteries in both states. According to the complaint, approximately 70-75% of interments each year in the Kansas City area take place in these cemeteries. Monument Builders also sued the American, Kansas, and Missouri Cemetery Associations, and Jas. H. Matthews, Inc., a national manufacturer of bronze markers.
Count I of the complaint, brought against all defendants except Matthews, alleges that the local cemeteries horizontally conspired to engage in the anti-competitive practices described above, and that the practices constituted a tying arrangement that unreasonably restrained trade in violation of section 1 of the Sherman Act. In Count II, Monument Builders alleges that Matthews and the local and national cemetery associations conspired with the cemetery operators by advising, coordinating, and encouraging them to implement the challenged practices. In Count III, Monument Builders alleges that all the previously described conduct constitutes a "conspiracy and/or attempt" by all defendants to monopolize in violation of section 2 of the Sherman Act.
After granting Monument Builders leave to amend its complaint, the district court dismissed with prejudice a number of Missouri cemetery operators for lack of venue. The court found that these defendants did not "reside" or "do business" in the district of Kansas for purposes of the antitrust venue statutes, 15 U.S.C. §§ 15, 22 (1988), and that Monument Builders' claim against these defendants did not "arise" in the district of Kansas for purposes of the general federal question venue statute, 28 U.S.C. § 1391 (1982). It dismissed defendant D.W. Newcomer's Sons as an improper party.
Finally, the court dismissed the remaining defendants for failure to state a claim. The court held the allegations of conspiracy to be too vague and conclusory. Although the complaint alleged that defendants possessed 70-75% of the burial market, the court held the allegations of market power to be insufficient to support a claim of "forcing" with respect to the tying claim or
of "dangerous probability of success" with respect to the attempted monopolization claim. The court based this holding both on the dilution of the market percentage by the dismissal of the Missouri defendants and on the lack of allegations concerning the market power possessed by individual defendants. The court also dismissed any claim for damages against the City of Olathe 2 based on the Local Government Antitrust Act of 1984, 15 U.S.C. §§ 34-36 (1988), which immunizes local governments from damages liability in federal antitrust cases.
The court awarded attorneys fees in favor of various defendants based on the insufficiency of the complaint, the lack of venue, Monument Builder's claim against an improper party, and the bringing of a damages claim against an immune city government. Monument Builders appeals the dismissals for want of venue and for failure to state a claim under Rule 12(b)(6), and the resulting sanctions. 3 We address each claim of error in turn.
The district court granted the motions of twelve Missouri defendants to dismiss for lack of venue, concluding that none of these defendant corporations resided or transacted business in Kansas and that the alleged antitrust violations did not occur in Kansas. The unusual circumstances of this case create a difficult venue issue. We conclude, however, that the court's dismissal of the Missouri defendants for lack of venue was in error.
After accepting affidavits, the district court held that the Missouri defendants were not inhabitants of Kansas and were neither found in Kansas nor transacting business there within the meaning of sections 4 4 and 12 5 of the Clayton Act. Monument Builders, 629 F.Supp. at 1005-06 (relying on United States v. Scophony Corp., 333 U.S. 795, 807, 68 S.Ct. 855, 861, 92 L.Ed. 1091 (1948)). Monument Builders does not contest this portion of the decision. Instead, it contends that the general venue statute, 28 U.S.C. § 1391(b), which provides for venue in the district where the claim arose, supplements the Clayton Act and can provide for venue in situations where the provisions of the Clayton Act alone would not. The Missouri defendants agree, Supplemental Brief of Missouri Appellees at 10, as they must, because we have long recognized that special venue statutes in general, and section 12 of the Clayton Act in particular, are supplemented by the venue provisions applicable to all civil cases. Board of County Comm'rs. v. Wilshire Oil Co., 523 F.2d 125, 130 (10th Cir.1975); 15 C. Wright, A. Miller & E. Cooper, Federal Practice & Procedure § 3818 at 175 (2d ed. 1986) ("[I]t is now clear beyond any doubt that the general venue statutes apply to antitrust cases."); cf. Pure Oil Co. v. Suarez, 384 U.S. 202, 204-05, 86 S.Ct. 1394, 1395-96, 16 L.Ed.2d 474 (1966) (special venue statutes are supplemented by more liberal general venue statute, absent specific contrary indication).
The district court referred to the general venue statute in a paragraph addressing the motions of some of the Missouri defendants, but held...
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