ETT Ambulance Service Corp. v. Rockford Ambulance, Inc.

• Decision Date: 04 April 1994
• Docket Number: Docket No. 150397
• Citation: 204 Mich.App. 392,516 N.W.2d 498
• Parties: , 1994-2 Trade Cases P 70,848 ETT AMBULANCE SERVICE CORPORATION, Plaintiff-Appellant, v. ROCKFORD AMBULANCE, INC., Defendant-Appellee.
• Court: Court of Appeal of Michigan — District of US

Page 498

516 N.W.2d 498

204 Mich.App. 392, 1994-2 Trade Cases P 70,848

ETT AMBULANCE SERVICE CORPORATION, Plaintiff-Appellant, v. ROCKFORD AMBULANCE, INC., Defendant-Appellee.

Docket No. 150397.

Court of Appeals of Michigan.

Submitted Jan. 12, 1994, at Grand Rapids.

Decided April 4, 1994, at 9:15 a.m.

Released for Publication June 10, 1994.

Warner, Norcross & Judd by John H. Logie and Christopher C. Williams, Grand Rapids, for plaintiff.

Cholette, Perkins & Buchanan by Robert J. Riley, Grand Rapids, for defendant.

Before MURPHY, P.J., and RICHARD ALLEN GRIFFIN and LATREILLE, ^* JJ.

MURPHY, Presiding Judge.

Plaintiff appeals as of right from the trial court's order granting summary disposition under MCR 2.116(C)(8) in favor of defendant. We affirm.

Plaintiff is a for-profit corporation that provides ambulance service in Ionia County and adjacent communities. Defendant is a nonprofit corporation that currently provides ambulance service in Kent County. In 1991, both parties submitted bids to certain communities located in Ionia County. Plaintiff alleges that defendant submitted a bid that was below the actual cost of providing ambulance service.

Plaintiff filed a complaint claiming that it is being deprived of the right to engage in a true competitive market because defendant's tax-exempt status enables defendant to offer a lower bid. Plaintiff requested a permanent injunction to prevent defendant "from submitting bids to provide services, outside its own service area, to other municipal areas for which for-profit businesses are available, willing and able to provide the same services."

Defendant moved for summary disposition. The trial court denied the motion and allowed plaintiff to amend its complaint.

Plaintiff filed a first amended complaint that reasserted its claim for injunctive relief in count I and formulated a new claim for violation of the Michigan Antitrust Reform Act, M.C.L. § 445.771 et seq.; M.S.A. § 28.70(1) et seq., in count II. Specifically, plaintiff claimed that defendant is engaging in predatory pricing and is attempting to establish an ambulance service monopoly in Ionia County for the purpose of excluding or limiting competition or controlling, fixing, or maintaining prices in violation of M.C.L. § 445.773; M.S.A. § 28.70(3). These allegations appeared to be based on defendant's ability to offer a lower price for its services because of its tax-exempt status.

Defendant moved for summary disposition under MCR 2.116(C)(8). Defendant argued that three exceptions to the Michigan Antitrust Reform Act, provided in M.C.L. § 445.774; M.S.A. § 28.70(4), apply to this case. At the hearing, the trial court granted the motion by finding nothing prevents defendant from competing against a for-profit corporation. Further, the trial court noted that the Legislature allows nonprofit corporations to compete in the ambulance business.

Plaintiff argues on appeal that its complaint clearly states a cause of action, under M.C.L. § 445.773; M.S.A. § 28.70(3), because the complaint alleges defendant is engaging in predatory pricing and is attempting to establish a monopoly. In addition, plaintiff maintains that the three exceptions provided in M.C.L. § 445.774; M.S.A. § 28.70(4) do not apply to this case.

A motion for summary disposition pursuant to MCR 2.116(C)(8) tests the legal sufficiency of a claim by the pleadings alone. All factual allegations supporting the claim are accepted as true, as well as any reasonable inferences or conclusions that can be drawn from the facts. Meyerhoff v. Turner Construction Co., 202 Mich.App. 499, 502, 509 N.W.2d 847 (1993). However, the mere statement of a pleader's conclusions, unsupported by allegations of fact, will not suffice to state a cause of action. Kramer v. Dearborn Heights, 197 Mich.App. 723, 725, 496 N.W.2d 301 (1993). The motion should be granted only when the claim is so clearly unenforceable as a matter of law that no factual development could possibly justify a right of recovery. Transamerica Ins. Group v. Michigan Catastrophic Claims Ass'n, 202 Mich.App. 514, 516, 509 N.W.2d 540 (1993).

Plaintiff claims defendant is attempting to establish a monopoly in violation of § 3 of the Michigan Antitrust Reform Act, M.C.L. § 445.773; M.S.A. § 28.70(3), which provides:

The establishment, maintenance, or use of a monopoly, or any attempt to establish a monopoly, of trade or commerce in a relevant market by any person, for the purpose of excluding or limiting competition or controlling, fixing, or maintaining prices, is unlawful.

The term "trade or commerce" is defined in relevant part as "the conduct of a business for profit or not for profit producing or providing goods, commodities, property, or services." M.C.L. § 445.771(c); M.S.A. § 28.70(1)(c). The term "person" is defined as "an individual, corporation, business trust, partnership, association, or any other legal entity." M.C.L. § 445.771(a); M.S.A. § 28.70(1)(a). The Michigan Supreme Court has adopted the following definition of the term "monopoly":

A monopoly, in the modern sense, is created when, as a result of efforts to that end, previously competing businesses are so concentrated in the hands of a single person or corporation, or a few persons or corporations acting together, that they have power to practically control the prices of commodities and thus to practically suppress competition. [Attorney General, ex rel. State Banking Comm'r v. Michigan Nat'l Bank, 377 Mich. 481, 488-489, 141 N.W.2d 73 (1966).]

The Michigan antitrust laws were patterned after the Sherman Anti-Trust Act, 15 U.S.C. § 1 et seq. Barrows v. Grand Rapids Real Estate Bd., 51 Mich.App. 75, 83, 214 N.W.2d 532 (1974). An attempt to monopolize is a violation of § 2 of the Sherman Anti-Trust Act, 15 U.S.C. § 2. A claim alleging an attempt to monopolize must show: "(1) specific intent to control prices or destroy competition; (2) predatory or anticompetitive conduct directed to accomplishing the unlawful purpose; (3) a dangerous probability of success." Williams v. Kleaveland, 534 F.Supp. 912, 922 (W.D.Mich.1981). The claim must also allege that the antitrust violation was a proximate cause of a special injury to the plaintiff's business or property. Barrows, supra, 95-96, 214 N.W.2d 532.

Here, plaintiff alleges that defendant is competing unfairly by engaging in predatory pricing. A firm engages in predatory pricing where it "foregoes short-term profits in order to develop a market position such that the firm can later raise prices and recoup lost profits." Janich Bros., Inc. v. American Distilling Co., 570 F.2d 848, 856 (CA 9, 1977).

In Campbell v. North Woodward Bd. of Realtors, Inc., 14 Mich.App. 714, 717, 166 N.W.2d 12 (1968), this Court held that the Michigan antitrust laws, then 1948 C.L. 445.701 et seq., did not apply to the defendant, who was a nonprofit corporation. In Oleksy v. Sisters of Mercy of Lansing, Michigan, 74 Mich.App. 374, 381, 253 N.W.2d 772 (1977), the trial court apparently relied on Campbell and dismissed an antitrust count on the premise that antitrust laws do not apply to nonprofit corporations. However, the Oleksy panel found that the trial court did not need to discuss the merits of the antitrust claims. Id. We disagree with any interpretation of Campbell that maintains the antitrust laws do not apply to nonprofit corporations. Although Campbell held the state antitrust laws of that time did not apply to the defendant, who was a nonprofit corporation, the Court did not establish that the antitrust laws were inapplicable merely because the defendant was a nonprofit corporation. Moreover, the current Michigan Antitrust Reform Act's definitions of "trade or commerce" and "person" indicate that the act applies to nonprofit corporations as well as for-profit corporations. Thus, it appears nonprofit corporations are not exempt from violations of the Michigan Antitrust Reform Act merely because they conduct business not for a profit.

This conclusion is supported by the analyses employed by those Courts that have considered whether nonprofit corporations have violated the Michigan antitrust laws. See Hoffman v. Garden City Hosp.-Osteopathic, 115 Mich.App. 773, 779-780, 321 N.W.2d 810 (1982); Oleksy v. Sisters of Mercy of Lansing, Michigan, 92 Mich.App. 770, 781-785, 285 N.W.2d 455 (1979); Barrows, supra, 51 Mich.App. at 92-93, 214 N.W.2d 532. These opinions do not assert that the antitrust laws are inapplicable to nonprofit corporations. In addition, the federal courts have determined that nonprofit organizations can be held liable under the Sherman Anti-Trust Act. E.g., Nat'l Collegiate Athletic Ass'n v. Bd. of Regents of the Univ. of Oklahoma, 468 U.S. 85, 100, n. 22, 104 S.Ct. 2948, 82 L.Ed.2d 70 (1984).

In this case, the trial court granted summary disposition without specifying whether defendant fit within one of the exceptions provided in M.C.L. § 445.774; M.S.A. § 28.70(4). Rather, the trial...