City of Gainesville v. Florida Power & Light Co., No. 79-5101-Civ-JLK.

• Court: United States District Courts. 11th Circuit. United States District Courts. 11th Circuit. Southern District of Florida
• Writing for the Court: JAMES LAWRENCE KING
• Citation: 488 F. Supp. 1258
• Docket Number: No. 79-5101-Civ-JLK.
• Decision Date: 18 April 1980
• Parties: The CITY OF GAINESVILLE and the Gainesville-Alachua County Regional Utilities Board, the Lake Worth Utilities Authority, the Utilities Commission of New Smyrna Beach, the Sebring Utilities Commission, the Cities of Alachua, Bartow, Ft. Meade, Homestead, Kissimmee, Mount Dora, Newberry, St. Cloud, Starke, and Tallahassee, Florida, Plaintiffs, v. FLORIDA POWER & LIGHT COMPANY, Defendant.

488 F. Supp. 1258

The CITY OF GAINESVILLE and the Gainesville-Alachua County Regional Utilities Board, the Lake Worth Utilities Authority, the Utilities Commission of New Smyrna Beach, the Sebring Utilities Commission, the Cities of Alachua, Bartow, Ft. Meade, Homestead, Kissimmee, Mount Dora, Newberry, St. Cloud, Starke, and Tallahassee, Florida, Plaintiffs,
v.
FLORIDA POWER & LIGHT COMPANY, Defendant.

No. 79-5101-Civ-JLK.

United States District Court, S. D. Florida, Miami Division.

April 18, 1980.

488 F. Supp. 1259

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Alan J. Roth and Robert A. Jablon, Spiegel & McDiarmid, Washington, D. C., Joseph C. Jacobs, Ervin, Varn, Jacobs, Odom & Kitchen, Tallahassee, Fla., for plaintiffs

Daniel M. Gribbon, Covington & Burling, Washington, D. C., William Killian, Steel, Hector & Davis, Miami, Fla., for defendant.

ORDER ON CROSS-MOTIONS TO DISMISS

JAMES LAWRENCE KING, District Judge.

At issue in this complex antitrust case are cross-motions to dismiss the defendant's counterclaim and to dismiss various portions of the plaintiffs' complaint. The plaintiffs in this action are fourteen small to medium-sized Florida cities and city utilities (hereinafter, the Cities). The single defendant is Florida Power and Light Company (hereinafter, FPL), the largest electric utility in Florida. In their complaint, the Cities allege that FPL has violated the federal antitrust laws, the Federal Power Act, the Natural Gas Act, and various state antitrust statutes in its sales practices with respect to electric power and arrangements which secured natural gas to be used in the production of electricity. FPL denies the alleged violations and counters with its own charge that the Cities have conspired amongst themselves to violate federal and state antitrust law and interfere tortiously with FPL's relationship with other municipalities.

The Cities moved to dismiss FPL's counterclaim, contending that it does not satisfy

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modern pleading requirements and that all of the activities alleged in the counterclaim are protected by the First Amendment. FPL moved to dismiss for various reasons those portions of the complaint which rely on the Federal Power Act, the Natural Gas Act, the Clayton Act, and Florida's "Little FTC Act." After full briefing and oral argument, the Court took both motions under advisement

The Court regrets the length of its present order. However, the several novel and complex issues raised by the parties merit detailed exposition.

The Court has reached the following conclusions. (1) FPL's counterclaim fails to satisfy modern pleading requirements and therefore should be dismissed without prejudice to file an amended counterclaim within thirty days. (2) The Cities' claims under the Federal Power Act and the Natural Gas Act should be dismissed because neither of those Acts contain the implied private right of action necessary for obtaining relief in court. (3) The Cities' claims under the Clayton Act, as amended by the Robinson-Patman Act, should not be dismissed since electricity is a "commodity" entitled to the antitrust protection of the Clayton Act. (4) The Cities' claims under the Florida "Little FTC Act" should be dismissed without prejudice to reassert those claims in state court proceedings because this Court declines to determine state policy by interpreting the scope of the regulated business exemption to that state statute. Each of these matters is treated more fully below.

With these initial procedural matters thus determined, the Court trusts that both parties will litigate the substance of the various remaining claims in the same expeditious manner demonstrated thus far. Both sides have promised no less in their oral presentations.

1. The Motion to Dismiss Defendant's Counterclaim

The Cities moved pursuant to Fed.R. Civ.P. 12(b)(6) to dismiss FPL's counterclaim for failure to state a claim upon which relief can be granted. In support of their motion, the Cities argue that: (1) the counterclaim is insufficient to state a claim under Fed.R.Civ.P. 8(a) as a matter of the general pleading requirements; and (2) even if sufficient to survive the Rule 8(a) challenge, the counterclaim fails as a matter of law because all of the activities alleged in furtherance of the supposed conspiracy are immune, as a matter of fact and law, from antitrust liability under the "Noerr-Pennington" doctrine. FPL responds that (1) the counterclaim, albeit brief, satisfies the requirements of "notice" pleading and (2) it requires discovery to unearth the relevant facts which would remove the plaintiffs' actions from the protection of Noerr-Pennington.

The Court concludes that the counterclaim fails to satisfy Rule 8(a) and therefore dismisses the counterclaim without prejudice to file an amended counterclaim within thirty days. A full discussion of the reasons for the present decision should guide both parties on subsequent motions if an amended counterclaim is filed.

The counterclaim is stated briefly, but includes much in its sweep.¹ Primarily it

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alleges the existence of a conspiracy in violation of the Sherman Act to harm FPL, a conspiracy which (a) sought unreasonable and unspecified rates and other terms from FPL, (b) commenced numerous unnamed proceedings to harass and coerce FPL and (c) sought to persuade various unnamed municipalities not to grant or renew FPL franchises. After a short discussion of the general pleading requirements and their rationale, the Court will discuss the requirements for pleading what has come to be known as the Noerr-Pennington "sham" exception which is implicated in the two latter activities of the alleged conspiracy. Finally, the Court will turn to the allegation of conspiracy to seek unreasonable rates and other terms from FPL and the various non-Sherman Act portions of the counterclaim

A. Notice Pleading and Motions to Dismiss

As has been stated by the Supreme Court, the Federal Rules were designed to realize the liberal concept of "notice pleading." See, e. g., Conley v. Gibson, 355 U.S. 41, 47, 78 S.Ct. 99, 103, 2 L.Ed.2d 80 (1957). In doing so, "the Federal Rules reject the approach that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome and accept the principle that the purpose of pleading is to facilitate a proper decision on the merits." 355 U.S. at 48, 78 S.Ct. at 103. As long as the pleadings "give the defendant fair notice of what the plaintiffs claim is and the grounds upon which it rests," the theory of notice pleading has been satisfied. 355 U.S. at 47, 78 S.Ct. at 103.

In general, the concept of notice pleading embodied in the Federal Rules applies to the "big" antitrust case as well as the "small" negligence lawsuit. This principle was reaffirmed by the Supreme Court just last month. See McLain v. Real Estate Bd. of New Orleans, Inc., ___ U.S. ___, 100 S.Ct. 502, 511, 62 L.Ed.2d 441 (1980). This Court has also recognized the general application of notice pleading to antitrust litigation. See Bazal v. Belford Trucking Co., 442 F.Supp. 1089, 1093 (S.D.Fla.1977).

Of course, even the liberality of notice pleading has its limits. The "short" statement of the pleader's claim must also be "plain" and it must show that "the pleader is entitled to relief." Fed.R.Civ.P. 8(a)(2). Professors Wright and Miller have noted that even the Supreme Court decision in Conley v. Gibson implied "that the rules do contemplate a statement of circumstances, occurrences, and events in support of the claim being presented." C. Wright & A. Miller, 5 Federal Practice and Procedure ? 1215 at 112. Moreover, whether the pleading need present a complete formal cause of action or not, it "must contain either direct allegations on every material point necessary to sustain a recovery on any legal theory, even though it may not be the theory suggested or intended by the pleader, or contain allegations from which an inference fairly may be drawn that evidence on these material points will be introduced at trial." Id. ? 1216 at 121-23.

Naturally, what needs to be pleaded to satisfy the requirements of Rule 8(a)(2) varies with the "nature of the action, the relief sought, and the respective positions of the parties in terms of the availability of information and a number of other pragmatic matters." Id. ? 1217 at 127. For example, it has long been the law of this Circuit that a conclusory allegation of a conspiracy to restrain trade will not survive a motion to dismiss.²

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FPL cites numerous cases from the Fifth Circuit³ which caution district courts against the too ready dismissal of both antitrust and other claims. It is axiomatic that when a complaint or counterclaim is challenged under Rule 12(b)(6), the court "must accept the facts which are well-pleaded to be true and resolve them in the light most favorable to plaintiffs or counterclaimants." See, e. g., Brett v. First National Savings and Loan Ass'n, 461 F.2d 1155, 1157 (5th Cir. 1972). However, such deference to the statements of the complaint must not extend to completely conclusory statements which fail to give adequate notice to the opposing party or the court. In addition, the pleader should not be able to rely solely on enigmatic averments which on their face comprehend activity clearly exempt from liability.

B. Pleading the Noerr-Pennington Sham Exception

1. Noerr-Pennington in General

To a great degree, the Supreme Court has immunized from antitrust liability concerted action by individuals to influence the government. In Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S.Ct. 523, 5 L.Ed.2d 464 (1961), the Supreme Court immunized concerted attempts to influence legislative action through jointly-financed publicity campaigns directed at voters. Four years later in United Mine Workers v. Pennington, 381 U.S. 657, 85...