In re Pre-Filled Propane Tank Antitrust Litig.

860 F.3d 1059

IN RE: In Re: PRE–FILLED PROPANE TANK ANTITRUST LITIGATION

Hartig Drug Company; Jason Moore's Texaco, L.L.C., doing business as Moore's Texaco; Mario Ortiz; Stephen Morrison; Steven Tseffos; Glenville Shell, LLC ; Zarco USA, Inc.; AQ Investments, LLC; LJax Enterprises, Inc.; J & V Management, LLC; Butch's Central Coastal, Inc.; Zerka's Party Store, Inc.; OM Commercial Neenah Oil, Inc. ; CCLAS, Inc. ; Hopewell Exxon, LLC ; Tuban Petroleum, LLC ; 33 and a Third, LLC; Tuban 610, LLC; Highway 182, LLC; West Main Street, LLC; Roth's Country Corner, Inc.; 1919 Airline Hwy., LLC; East Airline, LLC; Gramercy Cheap Smokes, LLC ; Conti's Service Center, Inc.; Route 49 Gas & Go, Inc. ; Surinder Kaur, Inc., Plaintiffs

Morgan-Larson, LLC, Plaintiff–Appellant

Ashville General Store, Inc. ; Sean Venezia; Michael S. Harvey; Gregory Ludvigsen; Arthur Hull; Alan Rockwell; James Halgerson; Thomas R. Clark; Bryce Mander; Alex Chernavsky; Arrow Hardware, LLC; Birdie's, Inc. ; Alex Chernavsky; Lochraven Sunoco, Inc.; American Auto Repair, Plaintiffs

Johnson Auto Electric, Inc., Plaintiff–Appellant

Cedar Holly Investments, LLC ; Tuckerton Lumber Company; Ace High Auto Repair & Propane ; CEFO Enterprise Corp.; Jon Wall, Inc. ; RC Gasoline, Plaintiffs

Speed Stop 32, Inc., Plaintiff–Appellant

Zarco USA, Inc.; Dunmore Oil Co., Inc.; JoJo Oil Co., Inc. ; Ekonomy Enterprises, Inc., Plaintiffs

Yocum Oil Company, Inc., Plaintiff–Appellant

v.Ferrellgas Partners, L.P. a limited partnership; Ferrellgas, L.P. a limited partnership, doing business as Blue Rhino; AmeriGas Partners, LP a limited partnership; UGI Corporation; AmeriGas Propane, Inc., doing business as AmeriGas Cylinder Exchange; AmeriGas Propane, LP, Defendants–Appellees

No. 15-2789

United States Court of Appeals, Eighth Circuit.

Submitted: April 4, 2017

Filed: June 23, 2017

Vineet Bhatia, Richard W. Hess, Alex Kaplan, Stephen D. Susman, Susman & Godfrey, Houston, TX, Lindsay Calkins, Stephen E. Morrissey, Susman & Godfrey, Seattle, WA, Richard Frank Lombardo, Jennifer Price, Shaffer & Lombardo, Kansas City, MO, Jenna MacNaughton, H. Laddie Montague, Jr., Martin Isaiah Twersky, Berger & Montague, Erin Burns, Dianne M. Nast, NastLaw, Philadelphia, PA, Stuart H. McCluer, R. Bryant McCulley, McCulley & McCluer, Oxford, MS, Kit A. Pierson, Daniel Hershey Silverman, Cohen & Milstein, Washington, DC, James Michael Ponder, Cook & Barkett, Cape Girardeau, MO, Thomas C. Bright, Solomon B. Cera, Gold & Bennett, San Francisco, CA, Isaac Diel, Sharp & McQueen, Overland Park, KS, Robert W. Coykendall, Morris & Laing, Wichita, KS, Daniel E. Gustafson, Daniel C. Hedlund, Eric Taubel, Gustafson & Gluek, Minneapolis, MN, for Plaintiffs–Appellants.

Tracy Robb Hancock, Catesby Ann Major, Craig Steven O'Dear, Bryan & Cave, Brandon J.B. Boulware, Jeremy Suhr, German & May, Kansas City, MO, Niall Edmund Lynch, Jesse B. McKeithen, Daniel M. Wall, Latham & Watkins, San Francisco, CA, Melissa Arbus Sherry, Jay Norman Varon, Latham & Watkins, Washington, DC, Kate E. Gehl, Elizabeth A. N. Haas, Foley & Lardner, Milwaukee, WI, for Defendants–Appellees.

Before SMITH, Chief Judge, WOLLMAN, LOKEN, RILEY, COLLOTON, GRUENDER, BENTON, SHEPHERD, and KELLY, Circuit Judges, En Banc.

BENTON, Circuit Judge.

Plaintiffs Morgan-Larson, LLC, Johnson Auto Electric, Inc., Speed Stop 32, Inc., and Yocum Oil Company, Inc. sued Defendants Ferrellgas Partners, L.P., Ferrellgas, L.P. (collectively "Ferrellgas"), AmeriGas Partners, L.P., AmeriGas Propane, Inc., and AmeriGas Propane, L.P. (collectively "AmeriGas") under Section 1 of the Sherman Act, 15 U.S.C. § 1. The district court dismissed the claims as barred by the statute of limitations. Having jurisdiction under 28 U.S.C. § 1291, this court reverses.

I.

Ferrellgas¹ and AmeriGas are the largest distributors of pre-filled propane exchange tanks, which come in a standard size. Before 2008, Defendants filled the tanks with 17 pounds of propane. In 2008, due to rising propane prices, Defendants reduced the amount of propane in each tank from 17 to 15 pounds, but maintained the same price. According to the amended complaint, "this amounted to an effective price increase of 13%."

In 2009, a group of plaintiffs—indirect purchasers who bought tanks from retailers—filed a class action alleging Defendants conspired to reduce the amount of propane in the tanks while maintaining the price, in violation of Section 1 of the Sherman Act and state antitrust and consumer protection laws. In 2010, the parties settled. See In re Pre-Filled Propane Tank Mktg. & Sales Practices Litig ., No. 09-2086-MD-W-GAF, 2010 WL 2008837 (W.D. Mo. May 19, 2010) (approving first amended settlement agreement).

In 2014, the Federal Trade Commission issued a complaint against Defendants—later settled—for conspiring to artificially inflate tank prices. See In re Ferrellgas Partners, L.P., et al. , Docket No. 9360, 2014 WL 1396496 (Mar. 27, 2014). Later that year, Plaintiffs in this case—direct purchasers who bought tanks directly from Defendants for resale—sued. They allege Defendants colluded to decrease the fill level of tanks and continued to charge "supracompetitive prices ... throughout the Class Period."

The district court dismissed Plaintiffs' claims as barred by the statute of limitations. On appeal, a divided panel of this court affirmed. In re Pre-Filled Propane Tank Antitrust Litig ., 834 F.3d 943 (8th Cir. 2016), as corrected (Aug. 25, 2016), reh'g en banc granted, opinion vacated (Dec. 29, 2016). This court granted rehearing en banc, vacated the panel decision, and now reverses.

II.

This court reviews de novo the grant of a motion to dismiss. Christiansen v. West Branch Cmty. Sch. Dist. , 674 F.3d 927, 933-34 (8th Cir. 2012). To survive a motion to dismiss for failure to state a claim, the complaint must show the plaintiff "is entitled to relief," Fed. R. Civ. P. 8(a)(2) , by alleging "sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ " Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), quoting Bell Atlantic Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A plausible claim must plead "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. , quoting Twombly , 550 U.S. at 556, 127 S.Ct. 1955. "The plausibility standard ... asks for more than a sheer possibility that a defendant has acted unlawfully." Id. , citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955. "A pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.’ Nor does a complaint suffice if it tenders ‘naked assertion[s]’ devoid of ‘further factual enhancement.’ " Id. , quoting Twombly , 550 U.S. at 555, 557, 127 S.Ct. 1955 (citation omitted). Rather, the facts alleged "must be enough to raise a right to relief above the speculative level." Twombly , 550 U.S. at 555, 127 S.Ct. 1955.

Also reviewed de novo is whether a claim is barred by the statute of limitations. McDonough v. Anoka Cnty. , 799 F.3d 931, 939-40 (8th Cir. 2015). "A court may dismiss a complaint under Federal Rule of Civil Procedure 12(b)(6) as barred by a statute of limitations if the complaint itself shows that the claim is time-barred." Wong v. Wells Fargo Bank N.A. , 789 F.3d 889, 897 (8th Cir. 2015), citing Illig v. Union Elec. Co. , 652 F.3d 971, 976 (8th Cir. 2011). Actions under Section 1 of the Sherman Act must be filed "within four years after the cause of action accrued." 15 U.S.C. § 15b . "Generally, the period commences on the date the cause of action accrues, that being, the date on which the wrongdoer commits an act that injures the business of another." Varner v. Peterson Farms , 371 F.3d 1011, 1019 (8th Cir. 2004), citing Zenith Radio Corp. v. Hazeltine Research, Inc. , 401 U.S. 321, 338, 91 S.Ct. 795, 28 L.Ed.2d 77 (1971).

Plaintiffs allege a continuing violation—an exception to the general rule—which restarts the statute of limitations period each time the defendant commits an overt act. See id. "An overt act has two elements: (1) it must be a new and independent act that is not merely a reaffirmation of a previous act, and (2) it must inflict new and accumulating injury on the plaintiff." Id. ,citing Pace Indus., Inc. v. Three Phoenix Co. , 813 F.2d 234, 238 (9th Cir. 1987).

III.

Plaintiffs allege two types of overt acts within the limitations period: (1) Defendants' sales to Plaintiffs at artificially inflated prices; and (2) conspiratorial communications between Defendants about pricing and fill levels. The first type of act is at issue here—whether sales at artificially inflated prices are overt acts that restart the statute of limitations.² Also at issue is whether Plaintiffs allege a continuing violation exception sufficient to restart the statute of limitations.

A.

The Supreme Court of the United States addressed the first issue in Klehr v. A.O. Smith Corporation , 521 U.S. 179, 117 S.Ct. 1984, 138 L.Ed.2d 373 (1997). The Supreme Court defined a continuing violation under antitrust law:

Antitrust law provides that, in the case of a "continuing violation," say, a price-fixing conspiracy that brings about a series of unlawfully high priced sales over a period of years, "each overt act that is part of the violation and that injures the plaintiff," e.g., each sale to the plaintiff, "starts the statutory period running again, regardless of the plaintiff's knowledge of the alleged illegality at much earlier times."

Klehr , 521 U.S. at 189, 117 S.Ct. 1984, quoting 2 P. Areeda & H. Hovenkamp, Antitrust Law ¶ 338b , p. 145 (rev. ed. 1995) (hereinafter 2 Areeda & Hovenkamp ).

Defendants argue Klehr does not apply because it is a RICO case, and the quoted language is dicta. This court and others have held that "federal courts ‘are bound by the Supreme Court's considered dicta almost as firmly as by the Court's outright holdings,...