Marston v. Ann Arbor Property Managers (Management) Ass'n
| Citation | 302 F. Supp. 1276 |
| Decision Date | 25 July 1969 |
| Docket Number | Civ. No. 32499. |
| Parties | Steve MARSTON, Barry Rubin, Jonathan Moselle, Helen Cooper, Dres Bogema, Dan Swerdling, Kurt Wieneke, and Laura Magzis, individually and on behalf of all others similarly situated, Plaintiffs, v. ANN ARBOR PROPERTY MANAGERS (MANAGEMENT) ASS'N et al., Defendants. |
| Court | United States District Courts. 6th Circuit. United States District Court (Western District Michigan) |
Virginia Davis Nordin, Ann Arbor, Mich., for plaintiffs.
Peter A. Davis (argued the cause for all defendants), Clark, Klein, Winter, Parsons & Prewitt, Detroit, Mich., for Summit Associates.
Joseph C. Hooper and John R. Hathaway, Hooper, Hathaway & Fichera, Ann Arbor, Mich., for Wilson White Co.
William D. Barense, Dobson, Griffin & Barense, Ann Arbor, Mich., for John C. Stegeman, J. L. Shipman and Charter Realty.
Robert E. Meader, Conlin, McKenney, Wood & Meader, Ann Arbor, Mich., for J. Patrick Pulte and J. Patrick Pulte, Inc.
John W. Conlin, Jr., Conlin, Conlin, McKenney, Wood & Meader, Ann Arbor, Mich., in pro. per.
Jack Becker and Louis C. Andrews, Ann Arbor, Mich., for Ann Arbor Trust Co.
Kent P. Talcott, Ellis & Talcott, Ann Arbor, Mich., for Apartments Limited, Inc.
Norman D. Katz, Katz & Victor, Detroit, Mich., for Campus Management, Inc.
This is an alleged class action seeking preliminary and permanent injunctions to restrain defendants both from conspiring to fix the price level of rental apartments in Ann Arbor, Michigan, and from attempting to control the supply of new apartment units in the market, and also seeking treble damages for the economic injury sustained by the class of tenants who have lived in these apartments for the past four years. Jurisdiction of this court is invoked under the provisions of Section 4 of the Clayton Act, 38 Stat. 731, as amended (15 U.S.C. § 15) to recover damages which plaintiffs have allegedly sustained due to the alleged violations of Section 1 of the Sherman Act by the defendants.
Defendant Ann Arbor Property Managers Association is an unincorporated trade association. It has no fixed or maximum membership, but normally is composed of eight to ten individuals, partnerships and corporations who, it is claimed, control a major portion of the Ann Arbor housing market, and who own and manage property which is rented to members of the complaining class. Plaintiffs allege further that defendant association and its co-defendants control and manage a major portion of the housing in the central campus area, and that they provide a particular type of housing, i. e., furnished rental units, which are especially desirable for undergraduate and unmarried students attending the University of Michigan.
It is plaintiffs' contention that the defendants have agreed, combined, and conspired with regard to the prices, duration and terms at which apartments will be offered for rent to University students; that this alleged agreement has affected rental prices in this area. Plaintiffs further allege that the purpose and effect of the combination and agreement is to avoid competition in the market and to secure to defendants profits and rates of return which are unreasonably above those which could be obtained under free competition. Further, that the agreement was intended by defendants to have the effect of restraining trade and free competition in the market, in violation of § 1 of the Sherman Act, 15 U.S.C. § 1. In addition, plaintiffs claim that defendants have agreed, combined, and conspired to exclude potential competitors from the market by systematically embracing each new land acquisition opportunity. Further, that defendants select one of their number to enter a bid sufficiently above the estimated fair market price for each acquisition opportunity to insure that defendant's status as the highest bidder and purchaser. That the exclusion of potential apartment developers from the market has allowed defendants to restrict the supply of new apartments, and to maintain the high rental prices in restraint of trade, contrary to free competition, in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1.
In response to plaintiffs' complaint, defendants have filed a motion to dismiss on alternative grounds and a counterclaim. Defendants' motion to dismiss alleges that (a) plaintiffs have failed to state a claim upon which relief can be granted; (b) the court lacks jurisdiction of the subject matter of the action, because it appears on the face of the complaint that there is no "restraint of trade or commerce and among the several states," as required by Section 1 of the Sherman Act, and, therefore, plaintiffs were not and are not being injured by reason of anything forbidden in the antitrust laws, as required by Section 4 of the Clayton Act; (c) this action is not maintainable as a class action because plaintiffs' suit is a sham and is a fraud upon the court; (d) that there are no relevant questions of law or fact common to the class. Defendants' counterclaim alleges that plaintiffs agreed and conspired to form and/or join an organization, the Tenants Union, whose purpose is to engage in a mass and concerted withholding of rent from defendants in violation of the contracts between them; that plaintiffs have breached their respective lease agreements with defendants by withholding rental payments justly due; that they have induced others to breach their respective contracts; that they are presently interfering with defendants' property and contract rights; that they are libeling and slandering defendants; subjecting defendants to biased and unfair publicity, and are attempting to otherwise destroy defendants' business, property, reputation, good will and prestige. Wherefore, defendants pray that the court permanently enjoin and restrain plaintiffs from engaging in any of the acts complained of herein, under penalty of contempt of court. That the "Tenants Union" be adjudged and decreed an unlawful organization and be ordered dissolved and permanently disbanded. That plaintiffs be ordered to return, or cause to be returned and paid to the persons lawfully entitled thereto, rental funds in the Bank of Montreal, Windsor, Canada.
Defendants have likewise filed a motion to dismiss the complaint against codefendant J. Patrick Pulte and J. Patrick Pulte, Inc., a Michigan corporation, and John W. Conlin, Jr., an attorney. In regard to Pulte and Conlin, defendants allege that the activities of both codefendants is not a part of interstate commerce and not subject to the federal antitrust laws.
In order for the court to acquire jurisdiction over this matter, it must be clearly established that the provisions set forth in Section 4 of the Clayton Act (15 U.S.C. § 15) and Section 1 of the Sherman Act (15...
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