Bell v. Fur Breeders Agricultural Co-Op.

• Decision Date: 07 November 2003
• Docket Number: No. 01-4252.,01-4252.
• Citation: 348 F.3d 1224
• Parties: John M. BELL, a/k/a Jack Bell; John Robert Bell, a/k/a Bob Bell, Plaintiffs-Appellants, v. FUR BREEDERS AGRICULTURAL COOPERATIVE, a cooperative organized under the laws of Utah; Dane Dixon, Jack Marchant, Stan Peterson, Stan Stuart, Kent Vernon, and Rick Westwood, former directors/members of Fur Breeders Agricultural Cooperative, Defendants-Appellees.
• Court: U.S. Court of Appeals — Tenth Circuit

348 F.3d 1224

John M. BELL, a/k/a Jack Bell; John Robert Bell, a/k/a Bob Bell, Plaintiffs-Appellants, v. FUR BREEDERS AGRICULTURAL COOPERATIVE, a cooperative organized under the laws of Utah; Dane Dixon, Jack Marchant, Stan Peterson, Stan Stuart, Kent Vernon, and Rick Westwood, former directors/members of Fur Breeders Agricultural Cooperative, Defendants-Appellees.

No. 01-4252.

United States Court of Appeals, Tenth Circuit.

November 7, 2003.

COPYRIGHT MATERIAL OMITTED

Roy B. Moore (Tiani Xochitl Coleman, Salt Lake City, UT, with him on the briefs) of Roy B. Moore P.C. & Associates, Midvale, UT, for Plaintiffs-Appellants.

Perrin R. Love (Wendy B. Crowther of Clyde, Snow, Sessions & Swenson; and R. Scott Rawlings with him on the brief) of Clyde, Snow, Sessions & Swenson, Salt Lake City, UT, for Defendants-Appellees.

Before HARTZ and McKAY, Circuit Judges, and BRORBY, Senior Circuit Judge.

BRORBY, Senior Circuit Judge.

This appeal arises from an action brought by John M. (Jack) Bell and John Robert (Bob) Bell against Fur Breeders Agricultural Cooperative and its former directors and members of the board of directors. The Bells allege that while they were members of the cooperative, Fur Breeders committed antitrust violations pursuant to Section 1 of the Sherman Antitrust Act (Sherman Act), 15 U.S.C. § 1, and Section 2(a) of the Clayton Act, as amended by the Robinson-Patman Act, 15 U.S.C. § 13(a). The Bells contend Fur Breeders violated antitrust laws because the discounted price it charged the Bells for feed they hauled themselves did not cover their actual costs, thereby limiting their ability to remain competitive with other cooperative members who ranched within the cooperative's delivery route and paid a different price for delivered feed. The Bells appeal the district court's order granting summary judgment in favor of Fur Breeders and dismissing their federal antitrust claims. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.

FACTUAL BACKGROUND

Fur Breeders began in 1939 when a small group of mink ranchers formed a cooperative for the purpose of providing mink feed to its members at a reduced cost. As an agricultural cooperative, it offers members cheaper feed and a competitive advantage over non-members due to its increased purchasing power, tax advantages, and efficiency gained by mixing large volumes of feed at central locations. Without a cooperative, members would also compete with each other for feed ingredients.

Fur Breeders operates two production plants located in Sandy and Logan, Utah; these plants mix raw ingredients to make feed. In the beginning, members picked up finished feed at these production plants. As the years progressed, the cooperative began delivering feed to its members on established delivery routes set by Fur Breeders' board members. The cooperative does not, however, deliver feed to all members. Instead, Fur Breeders determines the economic feasability of delivering feed to each location by considering the proximity of the location to the plants and the established delivery routes. Since 1980, the cooperative has maintained the same delivery route for feed from its Logan plant, with the furthest delivery point at least thirty miles away.

Since it began providing delivery of feed, the cooperative has charged its members who receive delivery, a price that includes delivery costs. To calculate the price per pound of delivered feed, Fur Breeders divides the total cost of delivered feed by the total pounds of delivered feed. The total cost for delivered feed includes the prior year's delivery costs as well as the annual purchasing and mixing costs. Fur Breeder's delivery costs include its expenditures for fuel, driver labor and benefits, and vehicle repairs, maintenance, depreciation, and insurance.

If a member whose ranch is located beyond the established feed route still requests delivery, Fur Breeders charges a surcharge based on the additional mileage from the feed route to the ranch. Members can avoid a surcharge if they purchase sufficient amounts to offset the additional costs. In order to calculate both the surcharge and the amount required to avoid a surcharge, the cooperative uses a delivery formula based on the cost to deliver feed from the feed route to the member's ranch. One of the cooperative's written objectives is to ensure members do not subsidize one another, including deliveries of feed outside the established delivery route.

In order to avoid a surcharge for delivery, members who ranch outside the delivery route may instead pick up their feed at either the Logan or Sandy plant. Fur Breeders charges members a discounted price for picked-up feed that excludes the delivery cost. The cooperative calculates the discounted price by deducting the delivery cost per pound from the delivered price per pound. Between 1994 and 1999, the discounted price was one penny less per pound than the delivered price.

Jack Bell became a Fur Breeders member in 1955 and continued as a member until 2000; his son, Bob Bell, joined as a member in 1982, but discontinued his mink breeding business in 2000. The Bell ranch, located near Randolph, Utah, is more than seventy miles from both the Logan plant and the nearest point of the established delivery route. Because of the location of the Bell ranch and the small volume of feed purchased, the Bells never qualified for delivery without a surcharge. The Bells instead picked up their feed at the Logan plant, paying the discounted price for their feed. Between 1990 and 1999, the discount they received amounted to a total of $43,049.51.

PROCEDURAL BACKGROUND

It is against this backdrop and the costs associated with hauling their own feed that the Bells brought their antitrust litigation against Fur Breeders, seeking injunctive relief and monetary damages.¹ Fur Breeders filed a motion to dismiss the Bells' Robinson-Patman Act claims. See Bell v. Fur Breeders Agric. Coop., 3 F.Supp.2d 1241, 1241-42 (D.Utah 1998). The district court denied the motion to dismiss, determining their antitrust claims were sufficient to withstand such a motion. Id. at 1244-45.

Thereafter, the Bells amended their complaint, adding a claim Fur Breeders also illegally restrained trade in violation of Section 1 of Sherman Act under 15 U.S.C. § 1. The Bells then filed a motion for summary judgment on their Robinson-Patman Act claims, to which Fur Breeders responded by filing its own summary judgment cross-motion to dismiss all the antitrust claims. A different district court judge was assigned to the case, who denied the Bells' motion for summary judgment and granted Fur Breeders' cross-motion. In so doing, he dismissed the Bells' Robinson-Patman claims, holding the Bells presented no evidence "that Fur Breeders engaged in price discrimination." The district court also dismissed the Bells' Section 1 Sherman Act claims, determining "Fur Breeders is an agricultural cooperative ... and therefore is immune from liability for a conspiracy with its members under the federal antitrust laws." The court further concluded no evidence existed showing that "Fur Breeders conspired with any person or entity besides itself and its members." Subsequently, the district court granted the Bells' motion for voluntary dismissal of their state law claims without prejudice, and this appeal followed.

On appeal, the Bells raise three issues contesting summary judgment in favor of Fur Breeders on their antitrust claims. Specifically, the Bells claim the district court erred in:

1) dismissing their Section 2(a) Robinson-Patman Act claim, as a matter of law and because disputed issues of material fact exist on whether Fur Breeders engaged in price discrimination;²

2) dismissing their Section 1 Sherman Act claim, ruling the cooperative's board members are, as a matter of law, exempt from antitrust liability for conspiring to discriminate in the price of a product sold by the cooperative to its members; and

3) dismissing their cause of action under Section 1 of the Sherman Act, holding the director and members are a single entity as a matter of law and thereby incapable of conspiring, even though they are in direct competition with each other and other cooperative members, and serve in their own personal pecuniary interest.

In addition, the Bells contend the district court failed to: 1) make specific findings of fact and conclusions of law in rendering his written decision; 2) recognize facts in dispute; 3) cite any relevant case law³ or rely on the law cited by the other district court judge on the motion to dismiss the Robinson-Patman claim; and 4) follow that judge's findings and holdings when considering the summary judgment motions on their Robinson-Patman and Sherman Acts claims.

STANDARD OF REVIEW

"Although this court has noted that in the broad sense summary judgment should be used sparingly in antitrust cases, `the usual rules governing summary judgment still apply.'" Ashley Creek Phosphate Co. v. Chevron USA, Inc., 315 F.3d 1245, 1253 (10th Cir.2003) (quoting Sports Racing Servs., Inc. v. Sports Car Club of Am., Inc., 131 F.3d 874, 882 (10th Cir. 1997)), cert. denied, ___ U.S. ___, 124 S.Ct. 103, 157 L.Ed.2d 38, 2003 WL 21313823 (U.S. Oct.6, 2003). Consequently, "[w]e review the grant of summary judgment de novo, applying the same standard used by the district court under [Federal Rule of Civil Procedure] 56(c), viewing the evidence in the light most favorable to the nonmoving party." United States v. AMR Corp., 335 F.3d 1109, 1113 (10th Cir.2003). Summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. See Fed. R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

Having set forth the appropriate standard for summary judgment, we next address the Bells' contention the district court did not provide sufficient express facts or...