American Key Corp. v. Cumberland Associates, Civ. A. No. C80-776A.

• Decision Date: 30 December 1983
• Docket Number: Civ. A. No. C80-776A.
• Citation: 579 F. Supp. 1245
• Parties: AMERICAN KEY CORPORATION and Ron DeWeese, Plaintiffs, v. CUMBERLAND ASSOCIATES, Carter & Associates, Cole National Corp., and Sears, Roebuck & Company, Defendants.
• Court: U.S. District Court — Northern District of Georgia

579 F. Supp. 1245

AMERICAN KEY CORPORATION and Ron DeWeese, Plaintiffs, v. CUMBERLAND ASSOCIATES, Carter & Associates, Cole National Corp., and Sears, Roebuck & Company, Defendants.

Civ. A. No. C80-776A.

United States District Court, N.D. Georgia, Atlanta Division.

December 30, 1983.

John C. Butters, Atlanta, Ga., for plaintiffs.

Charles H. Ivy, William L. Bost, Jr., R. Peter Catlin, III, Scoggins, Ivy, Goodman, Weiss & Bost, Mark J. Levick, C. David Vaughan, Vaughan, Phears & Murphy, Emmet J. Bondurant, II, M. Jerome Elmore, Trotter, Bondurant, Miller & Hishon, Atlanta, Ga., Richard W. Pogue, Paul Michael Pohl, Jones, Day, Reavis & Pogue, Cleveland, Ohio, Michael A. Doyle, Leah J. Sears-Collins, Atlanta, Ga., John E. Lehrer, Sears, Roebuck & Co., Chicago, Ill., for defendants.

ORDER

FORRESTER, District Judge.

This action is before the court on motions for summary judgment by each of the defendants. It is also before the court on defendants' motions to strike certain affidavits and supplemental briefs filed by plaintiff on July 28 and 29, 1983.

I. PROCEDURAL HISTORY.

Plaintiffs originally filed their complaint on May 6, 1980. As amended almost a year later, the complaint asserts two counts of alleged violations of 15 USC §§ 1 and 2.¹ Plaintiffs seek treble damages under Section 4 of the Clayton Act, 15 U.S.C. § 15,² and an injunction under Section 16 of the Clayton Act, 15 U.S.C. § 26.³ In Count I plaintiff American Key alleges that defendants refused to lease it space at two shopping malls in the Atlanta area and that this refusal to lease was pursuant to "an unlawful contract, combination and conspiracy among defendants and other unnamed co-conspirators with the intent and purpose of excluding plaintiff from those markets in an unlawful restraint of trade in violation of Section 1 of the Sherman Act." Count I also asserts that the refusal to lease to American Key was done pursuant to an unlawful conspiracy among the defendant and other unnamed co-conspirators "for the purpose and intent of conspiring to monopolize, monopolizing, and attempting to monopolize" in violation of Section 2 of the Sherman Act, 15 U.S.C. § 2. In Count II of the complaint plaintiffs allege that defendants Cole and Sears have an exclusive dealing arrangement which constitutes a "contract, combination, and conspiracy in restraint of trade to exclude plaintiffs" from the relevant markets in violation of Section 1 of the Sherman Act. Count II further alleges that defendants Cole and Sears, "in furtherance of their unlawful attempt to monopolize ... and in furtherance of their ... conspiracy in restraint of trade" have "acted in concert, combination, and conspiracy with defendants Cumberland Associates and/or defendant Carter & Associates to exclude plaintiff" from two shopping malls in the Atlanta area. Plaintiffs seek over $100 million in damages for these alleged violations of Sections 1 and 2 of the Sherman Act.

After more than eighteen months of discovery defendants Cumberland and Carter filed motions for summary judgment on September 28, 1982. On December 6, 1982 this court entered a consent order allowing defendants Cole National and Sears until January 10, 1983 to file their motions for summary judgment. Plaintiffs were given until March 14, 1983 to respond to all of the motions for summary judgment, and defendants were given until April 14, 1983 to file any reply briefs. At the end of the order this court wrote that there would be no further extensions. The parties complied with this schedule and all the motions, briefs and reply briefs were filed by April 14, 1983. On June 16 this court granted defendant's request for oral argument on the motions and set the case for oral argument on September 8. On July 28 and 29 plaintiff filed a supplemental brief and a third supplemental brief with accompanying affidavits in opposition to the motions for summary judgment. These briefs and affidavits sparked a new round in the paper war between the parties with the defendants filing various motions to strike and a motion to assess costs, and the plaintiff filing a reply brief. Finally, on September 8, 1983 this court held oral arguments on the motions for summary judgment.

II. THE MOTIONS TO STRIKE AND THE MOTION TO ASSESS COSTS.

In their various motions to strike defendants ask this court to strike as untimely and inadmissible the briefs and affidavits filed by plaintiffs in July. However, since the materials were filed well before the holding of oral argument on the summary judgment motions and were intended to facilitate this court's decision on those motions, the affidavits will be considered to the extent that they are relevant or otherwise admissible. Each of the motions to strike is therefore DENIED. The motion to assess costs is also DENIED.

III. PLAINTIFF RON DeWEESE'S STANDING.

Defendants have raised an issue regarding Mr. DeWeese's standing to prosecute this lawsuit. Section 4 of the Clayton Act, 15 U.S.C. § 15,⁴ controls standing in treble damage antitrust cases. This section provides that a person "who shall be injured in his business or property by reason of anything forbidden in the antitrust laws" may bring an action for treble damages. Section 4 has been narrowly construed to afford standing only to those persons or entities who fall directly within the "target area" of the economy affected by the allegedly illegal activities. See, e.g., Jeffrey v. Southwestern Bell, 518 F.2d 1129 (5th Cir.1975); Tugboat, Inc. v. Mobile Towing Co., 534 F.2d 1172 (5th Cir. 1976); Blank v. Preventive Health Programs, Inc., 504 F.Supp. 416 (S.D.Ga.1980). Plaintiff Ron DeWeese has asserted standing solely in his capacity as president and major stockholder of American Key. The courts of this circuit have held that stockholders, officers and directors of corporations are not protected by the antitrust laws and lack standing to prosecute claims for damages allegedly suffered by the corporation. In Martens v. Barrett, 245 F.2d 844, 846 (5th Cir.1957), the court held that:

Where the business or property allegedly interfered with by forbidden practices is that being done and carried on by a corporation, it is that corporation alone, and not its stockholders (few or many), officers, directors, creditors or licensors, who has a right of recovery, even though in an economic sense real harm may well be sustained as the impact of such wrongful acts bring about reduced earnings, lower salaries, bonuses, injury to general business reputation, or diminution in the value of ownership. Id. at 846.

See also Mendenhall v. Fleming Co., 504 F.2d 879 (5th Cir.1974). This rule is consistent with a long line of cases holding that shareholders do not have standing under the antitrust laws for injuries to the corporations in which they own stock. See, e.g., Pritchford v. Pepi, Inc., 531 F.2d 92, 96-97 (3d Cir.1975) (99% shareholder denied standing), cert. denied, 440 U.S. 981, 99 S.Ct. 1790, 60 L.Ed.2d 242 (1979); Mendenhall v. Fleming Co., supra, at 881; Kauffman v. Dreyfus Fund, Inc., 434 F.2d 727, 732-34 (3d Cir.1970), cert. denied, 401 U.S. 974, 91 S.Ct. 1190, 28 L.Ed.2d 323 (1971); Peter v. Western Newspaper Union, 200 F.2d 867, 872 (5th Cir.1953).

Similarly, officers or directors of a corporation do not have standing under Section 4 of the Clayton Act to assert the claims of the corporation. See, e.g., Program Engineering, Inc. v. Triangle Publications, 634 F.2d 1188, 1191 (9th Cir.1980) (president and founder of corporation lacks standing under antitrust laws); Pritchford, supra, 531 F.2d at 96-97 (president of corporation lacks standing). Since plaintiff Ron DeWeese asserts standing solely in his capacity as president and principal shareholder of American Key Corporation, he lacks standing under the antitrust laws to prosecute this action and is hereby DISMISSED. The sole remaining plaintiff is American Key.

IV. THE MOTIONS FOR SUMMARY JUDGMENT: FACTS.

In support of the motions for summary judgment each of the defendants submitted as required by Local Rule 91.72, a statement of undisputed material facts with annotations to the record. Defendants also submitted numerous affidavits and exhibits. In response plaintiff American Key submitted what it entitled a "Statement of Material Facts as to which Plaintiffs Contend There Exists Genuine Issues to be Tried." For the most part these "facts" do not controvert the facts relied upon by defendants but rather are merely a restatement of the allegations of the complaint. Where the party opposed to a motion for summary judgment does not controvert the facts which the movant has claimed are undisputed, those facts are deemed admitted. Local Rule 91.72. Further, Rule 56(e) of the Federal Rules of Civil Procedure provides:

When a motion for summary judgment is made and supported as provided in this rule, an adverse party may not rest upon the mere allegations or denials of his pleading, but his response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial. If he does not so respond, summary judgment, if appropriate, shall be entered against him.

Having given that preliminary explanation about the treatment given the facts presented by the parties, the court can now present those facts. As is usually the case with antitrust suits, the facts are voluminous.

Defendant Cumberland Associates (Cumberland) is the owner of Cumberland Mall outside of Atlanta, Georgia. Cumberland owns no other retail malls and performs no functions except in connection with its ownership of Cumberland Mall and Cumberland Office Park. Defendant Carter & Associates, Inc. (Carter), is the leasing agent of Cumberland Mall and Southlake Mall in Atlanta. Carter was also the leasing agent of Northlake Mall, also in Atlanta.

Defendant Cole National (Cole) is an Ohio corporation involved in the sale of specialty retail goods ranging from prescription...