In re Baseball Bat Antitrust Litigation

• Citation: 75 F.Supp.2d 1189
• Decision Date: 28 October 1999
• Docket Number: No. 98-MC-1249-KHV.,98-MC-1249-KHV.
• Parties: In re BASEBALL BAT ANTITRUST LITIGATION (MDL No. 1249). This Document Applies To: Baum Research, et al. v. Hillerich & Bradsby Co., Inc., et al., (No. 99-2112-KHV).
• Court: U.S. District Court — District of Kansas

75 F.Supp.2d 1189

In re BASEBALL BAT ANTITRUST LITIGATION (MDL No. 1249) This Document Applies To Baum Research, et al. v. Hillerich & Bradsby Co., Inc., et al., (No. 99-2112-KHV).

No. 98-MC-1249-KHV.

United States District Court, D. Kansas.

October 28, 1999.

COPYRIGHT MATERIAL OMITTED

Cathy J. Dean, Jeffrey B. Rosen, Christopher Swafford, Polsinelli, White, Vardeman & Shalton, Overland Park, KS, Bruce Keplinger, Norris, Keplinger & Herman, L.L.C., Overland Park, KS, David A. Ettinger, Honigan Miller Schwartz & Cohn, Detroit, MI, David L. Nelson, Patrick B. McCauley, David J. Szymanski, Sommers, Schwartz, Silver & Schwartz, P.C., Southfield, MI, Christopher E. Ondeck, Salvatore A. Romano, Jenkens & Gilchrist, P.C., Washington, DC, for Plaintiffs.

Craig T. Kenworthy, James A. Durbin, Swanson Midgley, LLC, Kansas City, MO, Gregory L. Curtner, Julie P. Close, Mark T. Boonstra, Susan I. Robbins, Miller, Canfield, Paddock & Stone, P.C., Ann Arbor, MI, Karen Z. Schutter, National Ass'n of Ins. Com'rs, Kansas City, MO, John K. Power, Husch & Eppenberger, Kansas City, MO, John K. Bush, Christie A. Moore, Peggy B. Lyndrup, Greenebaum, Doll & McDonald, PLLC, Louisville, KY, Barbara L. Goldman, Dykema Gossett PLLC, Bloomfield Hills, MI, Bruce Keplinger, Norris, Keplinger & Herman, L.L.C., Overland Park, KS, John M. Peterson, Jonathan T. Howe, Howe & Hutton, Ltd., Chicago, IL, Frank M. Northam, Arthur L. Herold, Webster, Chamberlain & Bean, Washington, DC, Dennis Barnes, Eugene Driker, Barris, Sott, Denn & Driker, PLC, Detroit, MI, for Defendants.

MEMORANDUM AND ORDER

VRATIL, District Judge.

Following a transfer order of the judicial panel on multidistrict litigation under 28 U.S.C. § 1407, the Court has jurisdiction over consolidated pretrial proceedings in these actions. This matter comes before the Court on Motion For Reconsideration And To Amend The Complaint (Doc. # 53) which the Baum plaintiffs filed December 4, 1998 in Baum Research & Dev. Co. v. Hillerich & Bradsby Co., Inc., Case No. Civ.A. 99-2112-KHV.

Pursuant to E.D.Mich. Local Rule 7.1(g)(3), plaintiffs seek reconsideration of the order of the United States District Court for the Eastern District of Michigan which dismissed their state and federal antitrust claims for failure to state a claim under Fed.R.Civ.P. 12(b)(6). Pursuant to Rule 15(a), Fed.R.Civ.P., plaintiffs also seek leave to amend their antitrust claims and claims for tortious interference. For reasons stated below, plaintiffs' motion is sustained in part and overruled in part.¹

Procedural Background

On July 13, 1998, Steve Baum and Baum Research and Development Company [collectively "Baum"] filed a complaint against Hillerich & Bradsby Co., Inc. ["H & B"], Easton Sports, Inc. ["Easton"], Worth, Inc., the National Collegiate Athletic Association ["NCAA"], and the Sporting Goods Manufacturers Association ["SGMA"], claiming violations of state and federal antitrust laws and tortious interference with contractual relations and prospective economic advantage in violation of state law.² See Complaint (Doc. # 1) filed July 13, 1998 in Case No. Civ.A. 99-2112-KHV.

On November 19, 1998, the United States District Court for the Eastern District of Michigan dismissed Baum's state and federal antitrust claims for failure to state a claim under Fed.R.Civ.P. 12(b)(6). Assuming that Baum had suffered injury as a result of defendants' antitrust violations, it held that Baum's injury was not the result of any anticompetitive effect on the market; rather, Baum's injury stemmed from competition itself. The Michigan court further held that Baum had not pleaded actionable claims for tortious interference, and directed Baum to amend the complaint to better describe the specific expectation of an economic relationship. The court held that if Baum should fail to sufficiently amend those claims, the court would dismiss them.

Baum filed the present motion on December 4, 1998. Five days later, on December 9, 1998, the judicial panel on multidistrict litigation transferred the Baum action to this Court pursuant to 28 U.S.C. § 1407.³

Applicable Standards

1. Motion To Reconsider

The Court has discretion whether to grant or deny a motion to reconsider.⁴ See Hancock v. City of Oklahoma City, 857 F.2d 1394, 1395 (10th Cir.1988); Shinwari v. Raytheon Aircraft Co., 25 F.Supp.2d 1206, 1208 (D.Kan.1998). The Court may recognize any one of three grounds justifying reconsideration: an intervening change in controlling law, availability of new evidence, or the need to correct clear error or prevent manifest injustice. See Shinwari, 25 F.Supp.2d at 1208. See also Anderson v. United Auto Workers, 738 F.Supp. 441, 442 (D.Kan. 1990) (motion to reconsider appropriate when court has obviously misapprehended party's position, facts, or applicable law, or when party introduces new evidence that could not have been obtained through exercise of due diligence). A motion to reconsider is not a second chance for the losing party to make his strongest case or to dress up arguments that previously failed. See Shinwari, 25 F.Supp.2d at 1208 (citing Voelkel v. General Motors Corp., 846 F.Supp. 1482, 1483, aff'd 43 F.3d 1484 (10th Cir.1994)). Such motions are not appropriate if the movant only wants the Court to revisit issues already addressed or to hear new arguments or supporting facts that could have been presented originally. See id. (citing Van Skiver v. United States, 952 F.2d 1241, 1243 (10th Cir.1991), cert. denied, 506 U.S. 828, 113 S.Ct. 89, 121 L.Ed.2d 51 (1992)).⁵

2. Amendment Of Pleadings

Under Rule 15(a), Fed.R.Civ.P., a party may amend its pleading once as a matter of course at any time before a responsive pleading is served. Otherwise a party may amend its pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires. After the district court enters judgment on a motion to dismiss, plaintiff no longer may amend its complaint as of right, and may only do so with leave of the Court. See Glenn v. First Nat'l Bank in Grand Junction, 868 F.2d 368 (10th Cir.1989) (after district court granted motion to dismiss, appellants could have amended their complaint only by leave of court or by written consent of adverse party). See also Smith v. National Collegiate Athletic Ass'n, 139 F.3d 180, 189 (3d Cir.1998) ("[a]fter the district court enters judgment on a motion to dismiss, a plaintiff no longer may amend [its] complaint as of right," and may only do so with leave of court) (citations omitted), vacated on other grounds, 525 U.S. 459, 119 S.Ct. 924, 142 L.Ed.2d 929 (1999). The Court may refuse to grant leave to amend where, for example, the proposed amendment would be futile. See Jefferson County School Dist. No. R-1 v. Moody's Investor's Servs., Inc., 175 F.3d 848, 858-59 (10th Cir.1999) (notwithstanding Rule 15(a) requirement that leave to amend shall be given freely, district court may deny leave to amend where amendment would be futile and proposed amendment is futile if amended complaint would be subject to dismissal).

Factual Background⁶

In this case, the relevant market is the market for amateur baseball bats, which includes but is not limited to college baseball. Baum manufactures wood composition baseball bats. H & B, Easton and Worth [collectively, "bat manufacturers"] manufacture aluminum baseball bats. The SGMA is a not-for-profit trade association of bat manufacturers. The NCAA is an association of colleges and universities that participate in intercollegiate athletics. Among other things, the NCAA adopts and promulgates playing rules.

Ninety percent of the market uses aluminum bats which defendant manufacturers produce, and they have signed exclusive contracts to provide baseball bats to various college teams. Wood bats cost less, but Baum implicitly acknowledges that defendants' aluminum bats outperform wood bats. NCAA rules allow both wood and aluminum bats in NCAA-sanctioned baseball games. During the relevant period, NCAA rules did not restrict bat performance. According to Baum, the NCAA rules (or lack thereof) were the product of a conspiracy to squeeze its wood composition bat out of the market. In particular, Baum alleges that the bat manufacturers conspired to eliminate competition from the market by (1) engaging in exclusive arrangements with colleges, universities and coaches to foreclose these teams from using competing products, and (2) cooperating with SGMA and the NCAA to manipulate and control the standard-setting function of the NCAA Baseball Rules Committee ["Rules Committee"] to establish unreasonable bat performance standards that excluded wood or wood composition bats from competition.

Analysis

Baum brings suit against the NCAA, the bat manufacturers and the SGMA, claiming violations of federal and state antitrust laws and tortious interference in violation of state law. The gravamen of Baum's complaint is that to perpetuate their dominance and exclude Baum from the market for amateur baseball bats, aluminum bat manufacturers conspired with the NCAA to manipulate the standard for baseball bats used in NCAA-sanctioned baseball games. In a nutshell, the theory is that because of lax NCAA standards which allowed aluminum bats, Baum could not sell wood composition baseball bats in the amateur baseball bat market. According to Baum, the lax standards stemmed from a conspiracy between the bat manufacturers, SGMA and the NCAA and the conspiracy violated federal and state antitrust law.⁷

Baum's theory of tortious interference with business relationships and prospective economic advantage is that the bat manufacturers and the SGMA engaged in a concerted campaign to remove and destroy Baum's bats, "sideline" the Baum Hitting Machine, prevent Baum from establishing relationships with amateur baseball teams, and disrupt Baum's sales to minor league professional baseball teams.

Baum seeks reconsideration of the order which...