Dairies v. Kraft Foods

Page 979

232 F.3d 979 (9th Cir. 2000)

KNEVELBAARD DAIRIES, a general partnership consisting of JOHN KNEVELBAARD and SAM KNEVELBAARD, general partners, Plaintiffs-Appellants, v. KRAFT FOODS, INC., a Delaware corporation; ALPINE LACE BRANDS, INC., a Delaware corporation; BORDEN, INC., a New Jersey corporation; the NATIONAL CHEESE EXCHANGE, a Wisconsin corporation, Defendants-Appellees.

No. 99-55327

UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

Argued and Submitted June 9, 2000

Filed December 1, 2000

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] James Robert Noblin, Blecher & Collins, Los Angeles, California, for the plaintiffs-appellants.

James M. Harris, Michael C. Kelley, Sidley & Austin, Los Angeles, California, Eric C. Liebeler, Kirkland & Ellis, Los Angeles, California, and J. Robert Robertson, Kirkland & Ellis, Chicago, Illinois, for the defendants-appellees.

Appeal from the United States District Court for the Central District of California Terry J. Hatter, Jr., Chief District Judge, Presiding. D.C. No.CV-98-03834-TJH

Before: Stephen Reinhardt and Richard A. Paez, Circuit Judges, and William L. Dwyer,¹ District Judge.

Opinion by Judge Dwyer; Dissent by Judge Paez

DWYER, District Judge:

I. INTRODUCTION

In this antitrust case originally brought in state court under the Cartwright Act, Cal. Bus. & Prof. Code SS 16700-16770, the plaintiff milk producers² claim that the defendant cheese makers³ conspired successfully to depress the prices they paid for milk produced in California. The alleged price fix among buyers was accomplished in an unusual way: through a now defunct auction agency called the National Cheese Exchange ("NCE"), the cheese makers are said to have rigged the price for bulk cheese in order to depress their acquisition costs both for that commodity and for milk. California milk prices were targeted and restrained in that the NCE bulk cheese price "determined the cost of fluid milk." That allegation, as the parties' briefs confirm, means that the California Department of Food & Agriculture ("CDFA") used the reported NCE bulk cheese price in its formula for setting the "support" (i.e., minimum) price for milk produced in that state. Thus, the alleged price-fixing that controlled the NCE bulk cheese price was intended to, and did, depress the California milk price as well. The milk producers claim that as a result they received less for their product than they would have received but for the unlawful price restraint. The cheese makers removed the case to federal court on the basis of diversity jurisdiction, see 28 U.S.C. S 1332, and then moved pursuant to Fed. R. Civ. P. 12(b)(6) to dismiss for failure to state a claim on which relief could be granted. The district court, without hearing argument, issued a one-line order granting the motion to dismiss, and the milk producers filed a timely notice of appeal. Finding that this court has jurisdiction, and that the complaint adequately states claims under California law, we reverse and remand except as to one claim that has been abandoned.

II. JURISDICTION UNDER 28 U.S.C. S 1291

This court has jurisdiction of appeals from "all final decisions" of the district court. 28 U.S.C. S 1291. No party has argued that jurisdiction is absent, but we must address the issue sua sponte. WMX Technologies, Inc. v. Miller, 104 F.3d 1133, 1135 (9th Cir. 1997) (en banc).

The cheese makers' motion in the district court was styled a motion to dismiss "the complaint" rather than "the action." An order granting such a motion must be accompanied by leave to amend unless amendment would be futile. Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000). No such leave was granted here. "Ordinarily an order dismissing the complaint rather than dismissing the action is not a final order and thus not appealable. However, `[i]f it appears that the district court intended the dismissal to dispose of the action, it may be considered final and appealable.' Hoohuli v. Ariyoshi, 741 F.2d 1169, 1171 n.1 (9th Cir. 1984)." Gerritsen v. de la Madrid Hurtado, 819 F.2d 1511, 1514 (9th Cir. 1987). Accord Martinez v. Gomez, 137 F.3d 1124, 1125 (9th Cir. 1998) ("[I]t is clear that there is nothing further [the plaintiff] can do and the district court must have intended this order to end the case. Therefore, we treat the dismissal as a final order.").

The record here shows that the district court intended its order to end the case. Although the cheese makers sought dismissal of the complaint, they repeatedly argued that the plaintiffs not only did not, but "cannot," allege essential parts of an antitrust or unfair competition claim. The milk producers opposed the motion on the merits and, in the alternative, asked leave to amend "unless it is determined that no possible amendment would cure the complaint's deficiencies. " The district court's order reads simply: "It is Ordered that the motions to dismiss be, and hereby are, Granted." This ruling necessarily entailed a denial of the alternative request for leave to amend and a determination, in the words of Lopez, 203 F.3d at 1127, "that the pleading could not possibly be cured by the allegation of other facts." Thus the district judge must have intended the dismissal order to end the case.

We have so held in several earlier cases. In Gerritsen we said: "Failure to allow leave to amend supports an inference that the district court intended to make the order final. Furthermore, the court's intention of finality is evinced by its apparent conclusion that amendment of the complaint would not save the action." 819 F.2d at 1514 (citations omitted). Accord Hoohuli, 741 F.2d at 1171, n.1; Martinez, 137 F.3d at 1125-26; Scott v. Eversole Mortuary, 522 F.2d 1110, 1112 (9th Cir. 1975).

The inference that finality was intended is especially strong here in light of the milk producers' explicit request for leave to amend unless the court determined that no possible amendment would avoid dismissal. No one has suggested an amend-ment that could change the district court's ruling.

Also probative is the understanding of the district court clerk that a final dismissal was ordered. The clerk's docket entry describes the dismissal order as "terminating case." A "JS-6" stamp on the order shows that the clerk reported the case as terminated to the Administrative Office of the United States Courts. See District Court Clerks Manual S 4.09b. The parties' understanding has been the same, as reflected in their briefs on appeal.⁴

We conclude that the district court intended its order to be a final dismissal. Accordingly, this court has jurisdiction on appeal under 28 U.S.C. S 1291.

III. STANDARD OF REVIEW

We review de novo the district court's order of dismissal for failure to state a claim. See Wyler Summit Partnership v. Turner Broad. Sys., Inc., 135 F.3d 658, 661 (9th Cir. 1998). A motion to dismiss for failure to state a claim may not be granted "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley v. Gibson, 355 U.S. 41, 45-46 (1957). In ruling on such a motion, "the court must presume all factual allegations of the complaint to be true and draw all reasonable inferences in favor of the nonmoving party." Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). The complaint need not set out the facts in detail; whatis required is a "short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a); La Salvia v. United Dairymen, 804 F.2d 1113, 1116 (9th Cir. 1986). Antitrust cases are not to be judged by a higher or different pleading standard than other cases. See Hunt-Wesson Foods, Inc. v. Ragu Foods, Inc., 627 F.2d 919, 924 (9th Cir. 1980). An antitrust plaintiff "need only allege sufficient facts from which the court can discern the elements of an injury resulting from an act forbidden by the antitrust laws." Cost Management Servs., Inc. v. Washington Natural Gas Co., 99 F.3d 937, 950 (9th Cir. 1996) (quoting Newman v. Universal Pictures, 813 F.2d 1519, 1522 (9th Cir. 1987)).

IV. ALLEGATIONS OF THE COMPLAINT

The complaint sets out three claims. The first, naming all defendants, alleges a combination in restraint of trade in violation of the Cartwright Act, Cal. Bus. & Prof. CodeS 16720. The second, also naming all defendants, alleges that the combination in restraint of trade, and acts done pursuant to it, violated the Unfair Competition Act, Cal. Bus. & Prof. Code S 17200. The third, naming Kraft only, alleges that Kraft violated the Unfair Competition Act by monopolizing and attempting to monopolize.

The third claim is deemed abandoned because the milk producers have not opposed its dismissal in their briefs and argument to this court. See Fed. R. App. P. 28(a)(9)(A) (requiring that the appellant's brief contain "appellant's contentions and the reasons for them"). See also Essery v. Department of Transp., 857 F.2d 1286, 1288 n.1 (9th Cir. 1988) ("Nowhere does [appellant] argue that the [agency ] erred in finding that he violated Sections 91.79(a) and (b) . . . . That issue is therefore deemed abandoned."). The first and second claims are at issue in this appeal.

For present purposes, the key allegations of the complaint are as follows: The plaintiff milk producers are "residents and citizens of California who have sold milk directly or indirectly to one or more of the defendants"; the defendant cheese makers purchase bulk cheese and milk for use in their products; NCE, in Wisconsin, operated the only national cash auction market for bulk cheese; the cheese makers "purchased substantial quantities of milk from plaintiffs and the members of the class, either directly or indirectly"; the cheese makers "did not compete and . . . instead acted together to suppress the cost of milk purchased by them from plaintiffs and the members of the class"; "[b]y collusively manipulating NCE...