Sandidge v. Rogers

• Decision Date: 22 October 1957
• Docket Number: No. IP 56-C-253.,IP 56-C-253.
• Court: U.S. District Court — Southern District of Indiana
• Parties: Mary Lucille SANDIDGE, Plaintiff, v. Ralph J. ROGERS, Ralph Rogers & Company, Inc., Knox County Sand Company, Mitchell Crushed Stone Co., Inc., C. A. Broecker, Wayne K. Sowers, Gus Sieboldt, W. C. Blakely, Gayle S. Cato and Ruth Rogers, Defendants.

156 F. Supp. 286

Mary Lucille SANDIDGE, Plaintiff, v. Ralph J. ROGERS, Ralph Rogers & Company, Inc., Knox County Sand Company, Mitchell Crushed Stone Co., Inc., C. A. Broecker, Wayne K. Sowers, Gus Sieboldt, W. C. Blakely, Gayle S. Cato and Ruth Rogers, Defendants.

No. IP 56-C-253.

United States District Court S. D. Indiana, Indianapolis Division.

October 22, 1957.

COPYRIGHT MATERIAL OMITTED

George E. Weigle, and Louis Pearlman, Jr., Lafayette, Ind., for plaintiff.

Mellen & Mellen, Robert L. Mellen, Bedford, Ind., Barnes, Hickam, Pantzer & Boyd, Alan W. Boyd, and Louis A. Highmark, Indianapolis, for defendants.

HOLDER, District Judge.

Plaintiff commenced her action in this court on September 26, 1956, and after an adverse ruling on a motion to dismiss in which ruling the court without being requested granted leave to plead over, an amended complaint was filed April 15, 1957. The defendants filed their motion to dismiss the amended complaint for the reason that it failed to state a claim against defendants upon which relief could be granted. The issue presented by the motion to dismiss is presented to the court for a ruling.

Plaintiff claims her action arises under the Anti-Trust Laws of the United States, more particularly under Sections 1, 2, and 7 of the Act of July 2, 1890, generally known as the Sherman Act (26 Stat. 209, as amended by 50 Stat. 693, as amended by 69 Stat. 282), and Sections 4, 7, 12, and 14 of the Act of October 15, 1914, generally known as the Clayton Act (38 Stat. 730, as amended by 64 Stat. 1125, as amended by 69 Stat. 282), said Acts being set forth in Title 15 of the United States Code (15 U.S.C.A. §§ 1, 2, 15, 18, 22, and 24), and other relevant sections of the Anti-Trust Laws of the United States. Plaintiff does not refer in her briefs to any other relevant Anti-Trust Laws than those particularly designated.

The action's central theme is around a lessor's resulting damage from the bumping collision in competition of competing producers of crushed stone which terminated within two years after lessor increased the royalty payments from three to five cents per ton for her lessee, one of the competing producers.

Typical of anti-trust litigation, the complaint and briefs are lengthy and cited authorities are numerous.

Anti-Trust Statutes

Section 15, United States Code Annotated, Title 15, upon which plaintiff bases her action, provides that the plaintiff may sue for treble damages and reasonable attorneys' fees when she becomes injured in her business or property by reason of any violation by the defendants of the following laws:

Sections 1, 2, and 18, United States Code Annotated, Title 15 read in part as follows:

"§ 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States * * *, is declared to be illegal * * *.

"§ 2. Every person who shall monopolize or attempt to monopolize, or combine or conspire with any other person or persons to monopolize any part of the trade or commerce among the several States, * * * shall be deemed guilty of a misdemeanor, * * *.

"§ 18. No corporation engaged in commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no corporation subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another corporation engaged also in commerce, where in any line of commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly. * * *."

The primary purpose of the Anti-Trust Laws is to prevent restraints of interstate commerce in the public interest, and to afford protection of the public from the subversive or coercive influences of monopolistic efforts and the right granted to plaintiff as a private suitor to seek reparation is secondary and subordinate in purpose.

Are the facts alleged in the complaint sufficient to show conspiracy for and/or monopoly and/or an unreasonable restraint upon interstate commerce to the prejudice of the public? To do so resort must be made to the "rule of reason" since the statute does not define "restraint of trade". Appalachian Coals v. United States, Va., 288 U.S. 344, 53 S. Ct. 471, 77 L.Ed. 825; Standard Oil Co. (Indiana) v. United States, Ill., 51 S. Ct. 421, 283 U.S. 163, 75 L.Ed. 926; Leader v. Apex Hosiery Co., 3 Cir., 108 F.2d 71, 310 U.S. 469, 60 S.Ct. 982, 84 L.Ed. 1311, 128 A.L.R. 1044; Eastern States Petroleum Co. v. Asiatic Petroleum Corp., 2 Cir., 103 F.2d 315; Westway Theatre v. Twentieth Century-Fox Film Corp., D.C.Md., 30 F.Supp. 830; 3 Cir., 113 F.2d 932; William Filene's Sons Co. v. Fashion Originators' Guild of America, D.C.Mass., 14 F.Supp. 353; 1 Cir., 90 F.2d 556; Feddersen Motors v. Ward, 10 Cir., 180 F.2d 519; Ruddy Brook Clothes v. British & Foreign Marine Insurance Co., 7 Cir., 195 F.2d 86; 344 U.S. 816, 73 S.Ct. 10, 97 L.Ed. 635; Glenn Coal Co. v. Dickinson Fuel Co., 4 Cir., 72 F.2d 885.

Whether the conspiracy for and/or the monopoly and/or restraint upon commerce is unreasonable depends on testing the alleged facts to ascertain whether the defendants' conduct had a detrimental effect on the public since there is no per se violation charged in the amended complaint. William Filene's Sons Co. v. Fashion Originators' Guild of America, D.C.Mass., 14 F.Supp. 353; 1 Cir., 90 F.2d 556; Fosburgh v. California & Hawaiian Sugar Refining Co., 9 Cir., 291 F. 29; Eastern States Petroleum Co. v. Asiatic Petroleum Corp., 2 Cir., 103 F.2d 315; United States v. Columbia Steel Co., Del., 334 U.S. 495, 68 S.Ct. 1107, 92 L.Ed. 1533; 334 U.S. 862, 68 S.Ct. 1525, 92 L.Ed. 1781.

Assuming that there was an attempt or an actual monopoly factually charged in the amended complaint under Section 2 of the Act, in order for it to be actionable under Section 15 of the Act, 15 U.S.C.A. § 15, the facts must show an actual or a potential detriment to the public from the attempt to create monopoly or the actual monopoly. The alleged facts must also be examined to determine whether the intended monopoly unreasonably restrains interstate commerce; and whether the alleged facts disclosed an extraordinary control attempted and/or consummated of an appreciable part of interstate commerce was or could be affected by the alleged conduct of the defendants. Times-Picayune Pub. Co. v. United States, La.1953, 345 U.S. 594, 73 S.Ct. 872, 97 L.Ed. 1277; Bigelow v. Calumet & Hecla Min. Co., C.C.Mich.1908, 167 F. 704; 6 Cir., 167 F. 721.

The defendants assert that the amended complaint contains many allegations of legal conclusions which add nothing to the factual averments and must be disregarded in considering the motion to dismiss, with which the court agrees. It is elementary that in order to state a cause of action under the Anti-Trust Laws notice pleading, or the pleading of conclusions is insufficient but that the elements of the action must be alleged clearly, concisely, and particularly and factually. Glenn Coal Co. v. Dickinson Fuel Co., 4 Cir., 72 F.2d 885; Feddersen Motors v. Ward, 10 Cir., 180 F. 2d 519; Shotkin v. General Electric Co., 10 Cir., 171 F.2d 236; Tilden v. Quaker Oats Co., 7 Cir., 1 F.2d 160, 164; Neumann v. Bastian-Blessing Co., D.C.N.D. Ill., 70 F.Supp. 447; Ruddy Brook Clothes v. British & Foreign Marine Insurance Co., 7 Cir., 195 F.2d 86; 344 U.S. 816, 73 S.Ct. 10, 97 L.Ed. 635.

The legal conclusions alleged in the amended complaint are no stronger than the ultimate facts alleged therein would support them. It is these ultimate facts the court will scrutinize.

Stripped of the conclusions the alleged basic facts of the amended complaint are as follows:

The defendant, Ralph J. Rogers, for many years owned stone land, leases, licenses and engaged in the business of quarrying, crushing stone and sales thereof in numerous counties in Indiana and other states. Among the defendant's holdings was the Springville quarry in Lawrence County, Indiana. The defendants engaged in interstate commerce.

The defendant corporations were and are alter ego and dummy corporations of Ralph Rogers and are dominated and controlled by him, and the individual defendants, excepting Ruth Rogers, are officers and directors thereof.

The plaintiff is the owner of real estate in Lawrence County, Indiana, containing five million tons of stone suitable for commercial use in buildings and in paving of roads in interstate commerce. Due to the bulk of the stone, it is necessary to quarry and crush it on the land, which requires equipment for removal, crushing, conveyance and trucking of considerable costs initially and for the operation and maintenance thereof. Therefore, the market of the plaintiff as well as of other landowners generally was limited to large quarry operators with such equipment. Stone is not sold in central markets.

Plaintiff on November 5, 1945, by written agreement authorized a partnership of Nally, Ballard & Cato, later incorporated, to remove the stone from her land for a price of three cents per ton; a new agreement was executed between the parties on January 16, 1950, for the period ending November 1, 1956, increasing the royalties from three cents to five cents per ton, containing a standard quarry provision giving the lessee the right to refrain from operating for any reason at any time during which period a minimum payment of $138.89 per month was to be paid to plaintiff, and further providing the privilege to the lessee to renew the agreement for an additional ten years from November 1, 1956.

During the years of the three cent royalty agreement, the approximate yearly tonnage was 200,000 tons and her approximate yearly average royalty was $6,000; during the years of the five cent royalty agreement, the approximate yearly tonnage was 285,000 tons and her approximate yearly average royalty was $14,000. The stone during these years was...