Miller v. Granados
| Decision Date | 25 March 1976 |
| Docket Number | No. 75--2215,75--2215 |
| Citation | 529 F.2d 393 |
| Parties | 1976-1 Trade Cases 60,789 A. Irwin MILLER et al., Individually and on behalf of themselves and all other condominium apartment unit owners of the Hollybrook Golf & Tennis Club Condominium, Plaintiffs-Appellants, v. Felix GRANADOS et al., Defendant-Appelless. |
| Court | U.S. Court of Appeals — Fifth Circuit |
Jeffrey E. Streitfeld, Alan S. Becker, Miami Beach, Fla., for plaintiffs-appellants.
Thomas E. Byrd, Borden R. Hallowes, Ft. Lauderdale, Fla., for defendants-appellees.
Appeal from the United States District Court for the Southern District of Florida.
Before GEWIN and AINSWORTH, Circuit Judges, and MARKEY *, Chief Judge.
Plaintiffs appeal from the dismissal of their complaint seeking treble damages and injunctive relief for injuries sustained by reason of defendants' use of an alleged tie-in sales arrangement, in violation of Section 1 of the Sherman Act (15 U.S.C. § 1). We reverse and remand.
Plaintiffs-appellants ('Unit Owners') are individual condominium unit owners and stockholders of Hollybrook Golf and Tennis Club Condominium, Inc., a Florida corporation (the 'Association'). Unit Owners filed this class action in behalf of themselves and all other condominium owners at the Hollybrook complex against six persons individually and d/b/a Hollybrook Condominium Venture, a partnership, and the Association (hereinafter collectively referred to as the 'Developer').
Court I of the complaint alleges that the individual defendants in their multicapacity, i.e., Manager, Developer and controlling officers and directors of the Association, 1 have conspired and continue to do so in direct restraint of trade and services, by entering into an exclusive Operational Management Agreement for the purpose of requiring the Manager to provide goods, services and administrative control of the Hollybrook complex. 2 Under the agreement the Association is required for six years to contract exclusively for the management services of the Manager, which services are provided for a fee of $120 quarterly to be paid by each individual unit owner (other than the Developer in the discretion of the Developer) to be increased at regular intervals in accordance with the Cost of Living Index. Count I further alleges that the sales of the condominium units, in an amount in excess of $40,000,000, involve interstate commerce through the use of the United States Postal Service, news and advertising media operating in interstate commerce, and through the substantial number of sales and resales to out-of-state purchasers, and the purchase of services, facilities and materials from out-of-state dealers. 3 interlocking coextensive entities, each composed interlocking coextensive entires, each composed of the six individual defendants.
Subsequent to the filing of the complaint and prior to developer's response thereto, Unit Owners moved for a preliminary injunction and stay order to enjoin Developer from prosecuting five state court foreclosure actions against certain condominium unit owners for failure to pay manager's fees. After a hearing on the motions the District Court denied them and sua sponte dismissed the complaint in its entirety, concluding that the Court
We first dispose of the District Court's erroneous reasons for declining jurisdiction and abstaining under the Younger v. Harris doctrine. The general jurisdictional statute conferring on federal courts jurisdiction over an 'Act of Congress regulating commerce or protecting trade and commerce against restraints and monopolies' is not predicated on the existence of a constitutional question. 28 U.S.C. § 1337. This is also true of the specific statute on which Unit Owners base their antitrust suit. Section 1 of the Sherman Act, 15 U.S.C. § 1. Moreover, the jurisdiction conferred by Congress on federal courts under the Sherman Act is exclusive. General Inv. Co. v. Lake Shore & M.S. Ry. Co., 260 U.S. 261, 43 S.Ct. 106, 67 L.Ed. 244 (1922). In regard to the District Court's reason for abstaining, it is obvious that the Younger v. Harris doctrine was misapplied. Plaintiffs were not parties to the state foreclosure proceedings. Moreover, the relief sought here--treble damages and injunctive relief because of the alleged tying agreement--in view of the jurisdictional exclusiveness of the Sherman Act, cannot be obtained in a state court. Developer concedes as much. Nor can the contention by Developer, i.e., that state action in the realm of condominiums bars federal antitrust jurisdiction, justify the District Court's dismissal of this suit. As the Supreme Court recently said in Goldfarb v. Virginia State Bar, 421 U.S. 773, 790, 791--792, 95 S.Ct. 2004, 2015, 44 L.Ed.2d 572, 587 (1975):
4
There is nothing in the Florida state statutes relied on by Developer which requires the use of management conracts in the operation of a condominium, much less the use of a specified manager. 5
Developer contends that the language of the order dismissing the complaint implies that the District Court considered the allegations of the antitrust claim and predicated its dismissal on the failure of Unit Owners to state a cause of action. We accept the premise but disagree with the conclusion.
Unit Owners contend that the Operational Management Agreement, which conditions purchase of the condominium units on acceptance of the management contract under which...
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...anything in the text or history of § 35-29 warrants the application of a different legal standard .10 See, e.g., Miller v. Granados , 529 F.2d 393, 396–97 (5th Cir. 1976) ; MacManus v. A. E. Realty Partners , 146 Cal. App. 3d 275, 288, 194 Cal. Rptr. 567 (1983) ; King City Realty, Inc . v. ......
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