Day v. Taylor, No. 04-10031.

• Decision Date: 22 February 2005
• Docket Number: No. 04-10031.,No. 04-10671.
• Citation: 400 F.3d 1272
• Parties: D.L. DAY, et al., Plaintiffs, Nick Ceh, Plaintiff-Appellant, v. John T. TAYLOR, E. Joseph Shoen, U-Haul International, Inc., Republic Western Insurance Company, U-Haul Company of Pennsylvania, Inc., Defendants-Appellees. D.L. Day, P.C. Boyle, Plaintiffs-Appellants, J.D. Swope, et al., Plaintiffs, v. John T. Taylor, E. Joseph Shoen, U-Haul International, Inc., Republic Western Insurance Company, U-Haul Company of Pennsylvania, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Eleventh Circuit

400 F.3d 1272

D.L. DAY, et al., Plaintiffs, Nick Ceh, Plaintiff-Appellant, v. John T. TAYLOR, E. Joseph Shoen, U-Haul International, Inc., Republic Western Insurance Company, U-Haul Company of Pennsylvania, Inc., Defendants-Appellees.

D.L. Day, P.C. Boyle, Plaintiffs-Appellants, J.D. Swope, et al., Plaintiffs, v. John T. Taylor, E. Joseph Shoen, U-Haul International, Inc., Republic Western Insurance Company, U-Haul Company of Pennsylvania, Inc., Defendants-Appellees.

No. 04-10031.

No. 04-10671.

United States Court of Appeals, Eleventh Circuit.

February 22, 2005.

Scott L. Adkins, Jack Reise, Cauley, Geller, Bowman & Rudman, LLP, Boca Raton, FL, Anthony J. Bolognese, Bolognese & Associates, LLC, Philadelphia, PA, Richard D. Greenfield, Greenfiled & Goodman, LLC, Easton, MD, for Plaintiffs.

Steven L. Schwarzberg, Schwarzberg & Associates, West Palm Beach, FL, Lawrence G. Scarborough, J. Alex Grimsley, Bryan Cave, LLP, Phoenix, AZ, for Defendants.

Appeals from the United States District Court for the Southern District of Florida.

Before BIRCH, KRAVITCH and CUDAHY^*, Circuit Judges.

KRAVITCH, Circuit Judge:

In this appeal we must decide whether the appellants, individuals who rented U-Haul equipment for in-town moving, properly stated a claim for resale price maintenance against defendants, U-Haul International, Inc. ("U-Haul") and certain subsidiaries and officers of U-Haul, under Section 1 of the Sherman Act.

I. Facts

The two appeals before us arise from three cases originally consolidated by the Judicial Panel on Multidistrict Litigation for pretrial proceedings in the Southern District of Florida.¹ Each case is a class action alleging a federal antitrust claim for resale price maintenance against U-Haul International, Inc. ("U-Haul"). The Day and Ceh actions name only U-Haul as a defendant. The Boyle action includes additional defendants U-Haul Company of Pennsylvania ("UHCP"), Republic Western Insurance Company ("RWIC"), E. Joseph Shoen ("Shoen"), and John T. Taylor ("Taylor").

The complaints' allegations are identical, and read as follows. U-Haul rents its branded trucks, vans, and other moving equipment for both one-way and in-town moving. U-Haul conducts its rental business through a network of about 1,200 company-owned rental centers and about 14,500 independent dealers. The independent dealers are typically gas stations, hardware stores, storage centers and other businesses, not owned by U-Haul, who rent U-Haul moving equipment to the public.

U-Haul fixes flat rates for in-town rentals based on the size of the truck rented. The plaintiffs allege that U-Haul conspired with the other defendants and the independent dealers to fix the prices at which U-Haul moving equipment is rented to the public for in-town rentals. In an effort to establish such a conspiracy, the plaintiffs each made the following allegation in their respective complaints:

The independent dealers who contract with U-Haul to rent its Moving Equipment to the public typically conduct their own businesses, such as gas stations and hardware stores, and provide U-Haul Moving Equipment rentals and Coverage Sales pursuant to agreements with U-Haul and/or its subsidiaries. The dealers are separate and independent businesses that are neither owned nor employed by U-Haul, and such dealers have entrepreneurial independence from U-Haul, despite the fact that some agreements between U-Haul and the independent dealers purport to label the relationship as a form of agency. Notwithstanding such labeling, there is nothing about such relationships that supports such a legal conclusion. The independent dealers who rent U-Haul Moving Equipment to the public do not have the legal power to act for or on behalf of U-Haul or its subsidiaries and do not hold themselves out to the public as agents of U-Haul. Further, in its advertising and marketing efforts conducted for and/or together with the independent dealers, U-Haul does not indicate that such dealers are its agents. In fact, they are not agents of U-Haul and, as indicated above, such businesses compete with U-Haul for the rental business of plaintiffs and members of the Antitrust Class.

The various defendants each moved individually to dismiss all the pending actions under Fed.R.Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted. With their motions, the defendants attached a copy of a standard form dealership contract between U-Haul and its independent dealers, on the basis that the contract was referenced in and central to the complaint. In their responses, the plaintiffs argued that the motions should be converted into motions for summary judgment under Rule 56(f) to enable them to respond properly, and sought to introduce several affidavits. The district court declined to convert the motions.

The district court dismissed the federal antitrust claims in the Day and Ceh actions against U-Haul on November 21, 2003.² Plaintiff Ceh filed a timely notice of appeal from the November 21 judgment. On January 12, 2004, the district court executed a judgment that extended the reasoning and outcome of the November 21 order to the Boyle action. Plaintiffs Boyle and Day filed timely notices of appeal from the January 12 judgment.

II. Standard of Review

We review de novo a district court's dismissal of a complaint for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6), construing the complaint in the light most favorable to the plaintiff and accepting as true all facts which the plaintiff alleges. See Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984); see also Wright v. Newsome, 795 F.2d 964, 967 (11th Cir.1986). The district court may only grant a Rule 12(b)(6) motion to dismiss where it is demonstrated "beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). Although the threshold is "exceedingly low" for a complaint to survive a motion to dismiss for failure to state a claim, Ancata v. Prison Health Services, Inc., 769 F.2d 700, 703 (11th Cir.1985), a court may nonetheless dismiss a complaint on a dispositive issue of law. See Marshall County Bd. of Educ. v. Marshall County Gas Dist., 992 F.2d 1171, 1174 (11th Cir.1993).

III. Analysis

A. Motions to Convert to Summary Judgment

Appellants argue that the trial court should have converted the motions to dismiss into motions for summary judgment so that they might introduce affidavits and engage in discovery. Appellants claim that such evidence was necessary for them to develop a record regarding the fact-intensive issue of whether the purported agency in the case was a sham.

The district court generally must convert a motion to dismiss into a motion for summary judgment if it considers materials outside the complaint. Fed.R.Civ.P. 12(b). The appellants assert that the district court should not have considered the contents of the dealership contract without converting the motions to motions for summary judgment and thereby affording the appellants full discovery.

In Horsley v. Feldt, 304 F.3d 1125, 1134 (11th Cir.2002), we held that the court may consider a document attached to a motion to dismiss without converting the motion into one for summary judgment if the attached document is (1) central to the plaintiff's claim and (2) undisputed. In this context, "undisputed" means that the authenticity of the document is not challenged. Id. Our prior decisions also make clear that a document need not be physically attached to a pleading to be incorporated by reference into it; if the document's contents are alleged in a complaint and no party questions those contents, we may consider such a document provided it meets the centrality requirement imposed in Horsley. Harris v. Ivax Corp., 182 F.3d 799, 802 n. 2 (11th Cir.1999); see also In re Silicon Graphics Inc. Securities Litigation, 183 F.3d 970, 986 (9th Cir.1999) (same).

Appellants claim that Horsley does not apply because the form dealership contract is not central to their complaint. We disagree. The appellants' references to the dealership contract are a necessary part of their effort to make out a claim that the relationship between U-Haul and its independent dealers is not a genuine agency, but a sham agency. This issue is at the very heart of the appellants' resale price maintenance claim. Simpson v. Union Oil Co., 377 U.S. 13, 84 S.Ct. 1051, 12 L.Ed.2d 98 (1964). Because the contents of the dealership contract are likewise not in dispute, we affirm the district court's refusal to convert the defendants' motions to dismiss to motions for summary judgment.

B. Motions to Dismiss

Section 1 of the Sherman Act proscribes any "contract, combination... or conspiracy, in restraint of trade or commerce." 15 U.S.C. § 1. One type of § 1 violation is resale price maintenance, where a seller requires a buyer to charge a specific price or price level when that buyer re-sells the goods to another. The Supreme Court first declared resale price maintenance illegal per se in Dr. Miles Medical Co. v. John D. Park & Sons Co., 220 U.S. 373, 31 S.Ct. 376, 55 L.Ed. 502 (1911). As described in Dr. Miles and subsequent cases, resale price maintenance agreements raise two primary policy concerns: they constitute "restraints of trade" because they may encourage the development of cartels among horizontal competitors, and they violate the common law rule against restraints on alienation of property. See Business Electronics Corp. v. Sharp Electronics Corp., 485 U.S. 717, 725, 108 S.Ct. 1515, 99 L.Ed.2d 808 (1988); Dr. Miles, 220 U.S. at 404-05, 31 S.Ct. 376.

It is well-settled that "genuine contracts of agency" do not constitute resale price maintenance because the "owner of an article" is permitted to "fix [] the price by which his agents transfer the title from him directly to the consumer." United States v. General...