Baxley-DeLamar Monuments, Inc. v. American Cemetery Ass'n

• Decision Date: 11 April 1988
• Docket Number: No. 87-1193,BAXLEY-DELAMAR,87-1193
• Citation: 843 F.2d 1154
• Parties: , 1988-1 Trade Cases 67,959, 10 Fed.R.Serv.3d 1344 MONUMENTS, INC., Appellants, v. AMERICAN CEMETERY ASSOCIATION; Arkansas Cemetery Association; The Catholic Cemeteries Association of the Archdiocese of Arkansas, d/b/a Calvary Cemetery; Chapel Hill Memorial Park, Inc.; Crestview Memorial Park & Mausoleum; Edgewood Memorial Park, Inc.; North Hills Memorial Gardens; Pinecrest Memorial Park and Garden Mausoleum; Sun Realty Co., d/b/a Forest Hills Memorial Park; Griffin Leggett, Inc., d/b/a Rest Hills Memorial Park, Inc. and d/b/a Forest Hills Memorial Park, Inc.; Roselawn Memorial Park Association, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 1154

843 F.2d 1154

56 USLW 2630, 1988-1 Trade Cases 67,959,

10 Fed.R.Serv.3d 1344

BAXLEY-DELAMAR MONUMENTS, INC., Appellants, v. AMERICAN CEMETERY ASSOCIATION; Arkansas Cemetery Association; The Catholic Cemeteries Association of the Archdiocese of Arkansas, d/b/a Calvary Cemetery; Chapel Hill Memorial Park, Inc.; Crestview Memorial Park &amp Mausoleum; Edgewood Memorial Park, Inc.; North Hills Memorial Gardens; Pinecrest Memorial Park and Garden Mausoleum; Sun Realty Co., d/b/a Forest Hills Memorial Park; Griffin Leggett, Inc., d/b/a Rest Hills Memorial Park, Inc. and d/b/a Forest Hills Memorial Park, Inc. Roselawn Memorial Park Association, Appellees.

No. 87-1193.

United States Court of Appeals, Eighth Circuit.

Submitted Nov. 11, 1987.

Decided April 11, 1988.

Edward Ray Fechtel, Eugene, Or., for appellants.

David H. Marion, Philadelphia, Pa., for appellees.

Before JOHN R. GIBSON and WOLLMAN, Circuit Judges, and HENLEY, Senior Circuit Judge.

JOHN R. GIBSON, Circuit Judge.

Baxley-DeLamar Monuments, Inc. appeals the district court's dismissal of its antitrust complaint against the appellee cemeteries and cemetery trade associations. Baxley-DeLamar alleged that the appellees conspired to effect illegal tie-ins in the sale of grave lots, as the tying product, and grave memorials and memorial installation services, as the tied products. Baxley-DeLamar claimed the appellees' acts constituted a conspiracy to engage in illegal tying, violating Sec. 1 of the Sherman Act; 15 U.S.C. Sec. 1 (1982); an attempt to monopolize, violating Sec. 2 of the Sherman Act, 15 U.S.C. Sec. 2 (1982); and a monopoly, violating article two, section nineteen of the Arkansas Constitution and Arkansas' Unfair Practices Act, Ark.Stat.Ann. Secs. 70-301--70-314 (1979) (now codified at Ark.Code Ann. Secs. 4-75-201--4-75-211 (1987)). The district court dismissed the complaint on the grounds that Baxley-DeLamar inadequately pleaded conspiracy in its Sherman Act Sec. 1 claim; that it failed to plead conditions giving appellees sufficient market power in the grave lot market to form the basis for an illegal tying claim; that it failed to plead the market shares of the individual appellees in the memorial sales and installation markets, and that this was necessary to plead a "dangerous possibility of success" in its attempt to monopolize claim; and that its allegations of Arkansas law violations were too conclusory to state a claim. We hold the complaint was sufficient as to the federal law claims only and so affirm in part and reverse and remand in part.

In its amended complaint Baxley-DeLamar alleged that it is in the business of selling and installing grave memorials for cemetery lot owners. It alleged that for at least the last four years before it filed its complaint, the appellees were engaged in a conspiracy to force persons who buy grave lots from the appellee cemeteries to also buy their grave memorials and memorial installation services from the appellee cemeteries. Baxley-DeLamar alleged that the appellees accomplished their design by adopting rules either requiring cemetery lot customers to buy their memorials and installation services only from appellee cemeteries or as a practical matter making it too difficult or expensive for the lot customers to buy memorials or installation services from anyone else. Together, the appellee cemeteries are said to control 57% of the "potential memorial sales" in the two relevant counties, Pulaski and Saline, and to "account for the majority of burials in such counties." Baxley-DeLamar claims that the appellees' practices have limited it to selling a small portion (7%) of the memorial and installation sales in appellees' cemeteries, while it sells a much greater percentage (39%) in cemeteries without the restrictive practices. Baxley-DeLamar also alleged that a number of grave sites in the cemeteries are "family plots," meant to allow family members to be buried near each other, and once a family member has been buried in such a plot, the surviving members' freedom to choose another graveyard is curtailed by the fact that their relative has already been buried in a particular graveyard. Baxley-DeLamar alleged that the restrictive practices burdened interstate commerce substantially, in that, inter alia, Baxley-DeLamar purchased memorials from out of state and its sales of these memorials have been hindered by the appellees. It also alleged that appellees' practices have resulted in consumers having no competitive choice in selecting and installing memorials and having to pay higher prices than they otherwise would have paid.

The district court dismissed the complaint, which had already been amended once. The court dismissed the claim under section 1 of the Sherman Act because the allegation of the tying conspiracy was too conclusory to state a cause of action. The court further held that the allegation that appellees controlled only 57% of the relevant cemetery lot market ¹ demonstrated that appellees did not have sufficient market power in the cemetery lot market to form the basis for an illegal tying arrangement. The court dismissed the Sherman Act section 2 claim on the grounds that Baxley-DeLamar had to prove that there was a dangerous probability that each of the appellee cemeteries could monopolize the market individually. Since Baxley-DeLamar had not pleaded the individual market shares of any of the appellee cemeteries, the district court held that the pleading failed. Finally, the district court held that the Arkansas state law count was "grossly conclusory" and "insufficient on its face."

In testing the sufficiency of the complaint, this court must accept Baxley-DeLamar's factual allegations as true: "A complaint must be viewed in the light most favorable to the plaintiff and should not be dismissed merely because the court doubts that a plaintiff will be able to prove all of the necessary factual allegations. 'Thus, as a practical matter, a dismissal under Rule 12(b)(6) is likely to be granted only in the unusual case in which a plaintiff includes allegations that show on the face of the complaint that there is some insuperable bar to relief.' " Fusco v. Xerox Corp., 676 F.2d 332, 334 (8th Cir.1982) (quoting Jackson Sawmill Co. v. United States, 580 F.2d 302, 306 (8th Cir.1978), cert. denied, 439 U.S. 1070, 99 S.Ct. 839, 59 L.Ed.2d 35 (1979)). "A court may dismiss a complaint only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232, 81 L.Ed.2d 59 (1984).

First, Baxley-DeLamar challenges the district court's conclusion that it failed to plead conspiracy with adequate specificity. "The liberal rules of pleading embodied in Fed.R.Civ.P. 8 are as applicable to claims in antitrust or price discrimination cases as they are in any other case. All that is required is a short, plain statement of facts sufficient to give the defendant fair notice of the basis of the claim." Fusco v. Xerox Corp., 676 F.2d at 337 n. 7 (citations omitted). The complaint in this case alleges that the appellee cemeteries agreed to engage in tying arrangements in order to force cemetery lot customers to buy their memorials and installation services from the appellee cemeteries. The nature of the tying devices used is set forth in detail, ranging from rules flatly requiring the lot customer to deal only with the cemetery, to a variety of rules allegedly designed to erect barriers to independent memorial retailers and installers. The appellee trade associations are alleged to have participated in the conspiracy by recommending the restrictive rules complained of. Baxley-DeLamar has alleged (albeit minimally) "facts constituting the conspiracy, its object and accomplishment." Larry R. George Sales Co. v. Cool Attic Corp., 587 F.2d 266, 273 (5th Cir.1979). Therefore, Baxley-DeLamar satisfied the minimal pleading requirements of Rule 8. See Mountain View Pharmacy v. Abbott Laboratories, 630 F.2d 1383, 1386-88 (10th Cir.1980).

Next, Baxley-DeLamar challenges the district court's conclusion that it did not allege facts showing appellees had sufficient market power in the cemetery lot market to form the basis for illegal tying. In Jefferson Parish Hospital District No. 2 v. Hyde, 466 U.S. 2, 104 S.Ct. 1551, 80 L.Ed.2d 2 (1984), the Supreme Court characterized economic power in the tying market as the sine qua non of illegal tying:

[T]he essential characteristic of an invalid tying arrangement lies in the seller's exploitation of its control over the tying product to force the buyer into the purchase of a tied product that the buyer either did not want at all, or might have preferred to purchase elsewhere on different terms.

104 S.Ct. at 1558.

Economic power over...