Rickards v. Canine Eye Registration Foundation, Inc.
Opinion of the Court
On October 31, 1979, plaintiffs (hereinafter referred to as appellants) filed a complaint seeking damages and injunctive relief, alleging that defendants (hereinafter referred to as appellees) violated both the Sherman Act, 15 U.S.C. §§ 1-2 (1976) and various California antitrust laws,
On June 24, 1981, the case proceeded to trial on the antitrust claims for injunctive relief and the common-law interference with prospective economic advantage claim. The common law claim was tried to a jury sitting in an advisory capacity, and the injunctive claims were tried to the magistrate. After appellants concluded their presentation of evidence, appellees moved for a directed verdict on the common law claim pursuant to Fed.R.Civ.P. 50(a), and dismissal of the injunctive claims pursuant to Fed.R.Civ.P. 41(b). The magistrate granted both motions. We affirm.
I. FACTS
The Canine Eye Registration Foundation (“CERF”) is a non-profit, tax-exempt, charitable organization. None of CERF’s officers or directors is a veterinarian. According to its constitution, CERF’s purpose is to collect, collate, and disseminate information concerning hereditary eye diseases in dogs by establishing a registry listing purebred dogs of those breeds that are susceptible to hereditary eye diseases. CERF requires dogs to be examined by veterinarians certified by the American College of Veterinary Ophthalmologists (“ACVO”) before listing the dogs in its registry. ACVO members evaluate the dogs using forms provided by CERF. The ACVO veterinarian then re
Veterinarians wishing to become ACVOcertified specialists in veterinary ophthalmology must pass a series of tests devised by ACVO under general guidelines established by the American Veterinary Medical Association.
Appellants herein are veterinarians who could not or did not pass ACVO’s certification exams,
II. DISCUSSION
Appellants raise three issues before this Court. They first argue that the magistrate improperly granted appellees’ motion for summary judgment on the antitrust damages claim. After viewing the record in its entirety, we hold that summary judgment was properly granted. Even though summary judgment is not particularly favored in antitrust litigation, Poller v. CBS, 368 U.S. 464, 467, 473, 82 S.Ct. 486, 488, 491, 7 L.Ed.2d 458 (1962); Blair Foods, Inc. v. Ranchers Cotton Oil, 610 F.2d 665, 668 (9th Cir. 1980), summary judgment was properly granted here. At the time the motion was filed, less than two weeks before trial, appellants had neither identified their expert witnesses nor designated documents supporting their damages claims. There thus was no competent or relevant evidence from which a jury could fairly estimate damages, see Murphy Tugboat Co. v. Shipowners & Merchants Towboat Co., 467 F.Supp. 841, 863 (N.D.Cal. 1979), aff’d sub nom. Murphy Tugboat Co. v. Crowley,
Appellants next argue that the magistrate improperly granted appellees’ motions to dismiss the antitrust injunctive claims and for a directed verdict on the common-law claim of tortious interference with prospective economic advantage. We discuss these in turn.
A. The Motion to Dismiss.
At the close of appellants’ case, appellees brought a motion to dismiss pursuant to Rule 41(b)
1. The Sherman Act Section 1 violations.
In granting the motion to dismiss, the magistrate first concluded that appellants demonstrated no right to relief under Section 1 of the Sherman Act, 15 U.S.C. § 1 (1976).
This type of exclusive dealership arrangement, without more, is not violative of Section 1 of the Sherman Act. As the court stated in Determined Productions, Inc. v. R. Dakin & Co., 514 F.Supp. 645, 646 (N.D.Cal. 1979), aff’d mem., 649 F.2d 866 (9th Cir. 1981):
We must begin with the well-settled proposition that a trader has the right to deal or refuse to deal with whomever he pleases for reasons sufficient to himself, [citations omitted] A refusal to deal is not unlawful unless it implements an arrangement to restrain trade by, for example, enforcing price maintenance, barring a competitor from a market or maintaining a dominant market position. See, Bushie v. Stenocord, 460 F.2d 116, 119 (9th Cir. 1972).
In GTE Sylvania, Inc. v. Continental T. V., Inc., 537 F.2d 980, 997 (9th Cir. 1976) (en banc), aff’d, 433 U.S. 36, 97 S.Ct. 2549, 53 L.Ed.2d 568 (1977), this Court noted that “[t]here is a veritable avalanche of precedent” holding that exclusive dealing, without more, does not show a violation of the antitrust laws. The record demonstrates that CERF’s policy of providing examination forms exclusively to ACVO members and accepting results only from them, is nothing more than a form of exclusive dealership. Accordingly, the magistrate’s conclusion that CERF and ACVO did not enter into an agreement violative of Section 1 of the Sherman Act is correct.
Since there was no agreement between CERF and ACVO members to exclude nonmembers, there is nothing in the record supporting appellants’ group boycott theory. A claim of concerted refusal to deal obviously cannot stand without evidence of concert. Cleary v. National Distillers & Chemical Corp., 505 F.2d 695, 697 (9th Cir. 1974) (per curiam). An individual distributor acting alone has the right to deal with whomever he pleases. Id.
Appellants’ price-fixing claim similarly is left unsubstantiated by the record. The record shows that examining veterinarians never discussed fees with CERF, that examination prices charged by the ACVOcertified veterinarians ranged from $5.00 to $7.50, and that CERF provided the exam forms free of charge to ACVO veterinarians. Although CERF directors apparently made several inquiries regarding fees, the inquiries were unanswered. Isolated requests for price information, however, do not a price-fixing claim make, Krehl v. Baskin-Robbins Ice Cream Co., 664 F.2d 1348, 1357 (9th Cir. 1982), and the magistrate was thus justified in granting the motion to dismiss the price-fixing claim.
Finally, appellants’ tie-in theory must likewise be rejected. Appellants contend that appellees “tied” the issuance of a CERF Registration Certificate to the use of a CERF Examination Form and service by an ACVO member. To establish an unlawful tying arrangement, appellants must offer proof that there are two separate products, and that the sale of one (the tying product) has been conditioned upon the purchase of the other (the tied product). Times-Picayune Publishing Co. v. United States, 345 U.S. 594, 613-14, 73 S.Ct. 872, 883, 97 L.Ed. 1277 (1953); Krehl v. Baskin-Robbins Ice Cream Co., 664 F.2d at 1352; Siegel v. Chicken Delight, Inc., 448 F.2d 43, 47 (9th Cir. 1971), cert. denied, 405 U.S. 955, 92 S.Ct. 1172, 31 L.Ed.2d 232 (1972). In examining a tie-in claim, this Court must consider whether the seller of the tying product (the CERF certificate) harbors an economic interest in the tied product (the use of the CERF examination form and the performance of services by an ACVO mem
In sum, we hold that the magistrate properly granted appellees’ motion to dismiss. The record fails to support appellants’ contentions that the parties entered into an “agreement” violative of Section 1 of the Sherman Act. Appellants’ group boycott, price-fixing and tie-in claims are unsubstantiated by the record. We next turn to appellants’ Section 2 claim.
2. The Sherman Act Section 2 violations.
Under Section 2 of the Sherman Act, 15 U.S.C. § 2 (1976),
This Court’s opinion in Deesen v. The Professional Golfers’ Association of America, 358 F.2d 165 (9th Cir. 1966) cert. denied, 385 U.S. 846, 87 S.Ct. 72, 17 L.Ed.2d 76 (1966) is instructive. In Deesen, plaintiff, a professional golfer, claimed that defendants engaged in a combination or conspiracy to monopolize professional golf tournaments and to boycott him. The PGA maintained proficiency requirements for players wishing to enter PGA tournaments. The requirements were justified by the PGA’s interests in fostering competition and in preventing tournament overburdening by players of inferior ability. The court found the PGA’s conduct entirely reasonable. Just as the PGA set certain requirements to insure high quality golf tournaments, CERF established objective criteria to measure competence in the field of veterinary ophthalmology. Just as the PGA treated all golfers similarly, CERF applied its policy in an even-handed manner. In both cases, the conduct complained of was procompetitive and not anticompetitive. Thus, with neither direct nor inferential evidence of specific intent to monopolize, appellants’ Section 2 claim must fall. The facts are plainly insufficient to support the claim, and ft is therefore unnecessary to consider the other Section 2 requirements. The dismissal of all the antitrust claims was clearly warranted.
B. The Directed Verdict.
In considering whether the magistrate properly granted appellees’ motion for directed verdict, pursuant to Fed.R.Civ.P. 50(a), this Court must determine, by viewing the evidence as a whole, whether appellants presented substantial evidence that could support a finding in their favor by reasonable jurors. Chisholm Brothers Farm Equipment Co. v. International Harvester Co., 498 F.2d 1137, 1140 (9th Cir. 1974). If appellants fail to present sufficient evidence, the court must direct a verdict in appellees’ favor. Id.
Viewing the evidence as a whole, we conclude that several elements of the tortious interference claim were not established, and that the directed verdict was properly granted. First, the evidence fails to support appellants’ claim that creation of CERF’s canine eye registry disrupted an ongoing economic relationship between appellants and third parties. Several dog owners did' testify that they would have retained appellants’ veterinary services but for CERF’s requirement that only eye exams performed by ACVO-certified veterinarians would be listed in CERF’s registry. Appellants argue that this testimony constitutes evidence of specific economic relationships that were disrupted by appellees’ conduct. We disagree. The evidence only demonstrates that some owners chose not to retain appellants. Appellants’ regular clients sought appellants’ veterinary services before and after creation of CERF’s registry system and thus the evidence does not show that an ongoing business relationship between appellants and their regular clients was somehow disrupted. Further, because appellants did not perform genetic eye-screening exams for purposes of an eye registry, CERF’s registry system did not interfere with appellants’ specific business relations. ■
Second, the record is devoid of evidence indicating that appellees intended to disrupt appellants’ business relationships with their clients. Appellants state in their reply brief that appellees “knew or should have known” of the economic relationships between appellants and third persons, and that appellees “committed intentional acts designed to disrupt business relationships between non-ACVO plaintiffs and their customers and prospective customers”. Appellants’ Reply Brief, p. 5. Proof of these claims, however, does not reasonably support a finding that appellees intended to disrupt appellants’ business relationships with third persons. Motive or purpose to disrupt ongoing business relationships is of central concern in a tortious interference case, Lowell v. Mother’s Cake and Cookie Co., 79 Cal.App.3d 13, 18, 144 Cal.Rptr. 664, 668 (1978), and a strong showing of intent is required to establish liability. As we said in De Voto v. Pacific Fidelity Life Insurance Co., 618 F.2d at 1347:
Tortious interference requires a state of mind and a purpose more culpable than the “intent” under the Restatement definition, however. The fact of a general intent to interfere, under a definition that includes imputed knowledge of consequences, does not alone suffice to impose liability. Inquiry into the motive or purpose of the actor is necessary .... Where the actor’s conduct is not criminal or fraudulent, and absent some other aggravating circumstances, it is necessary to identify those whom the actor had a specific motive or purpose to injure by his interference and to limit liability accordingly. The extent of liability, for this tort, is fixed in part by the motive or purpose of the actor.
Appellees’ conduct is neither criminal nor fraudulent and no aggravating circumstances appear in the record. The record is devoid of direct evidence of improper motive or purpose and we will not infer such motive merely because appellees “should have known” that creation of their registry injured appellants’ business dealings. Further, it is our conclusion that appellees’ motive in creating the canine eye registry was proper. CERF’s requirement that
Finally, appellants failed to present competent evidence to prove damages. As previously discussed, appellants’ damages proof was speculative at best. And since proof of the nature and extent of damages must be reasonably certain before recovery is warranted, Lucky Auto Supply v. Turner, 244 Cal.App.2d 872, 883, 53 Cal.Rptr. 628, 634 (1966), appellants’ interference with prospective economic advantage claim falls on the damages issue as well.
Viewing the record as a whole, the magistrate was not presented with substantial evidence supporting a finding by reasonable jurors in appellants’ favor. Appellants failed to establish several elements of their intentional interference with prospective economic advantage claim, and thus the motion for directed verdict was properly granted.
Accordingly, the magistrate’s rulings are hereby AFFIRMED.
. Cal.Bus. & Prof.Code §§ 16700-16703 (West 1964 & Supp. 1982); Id. §§ '16720-16727.
. The American Veterinary Medical Association (“AVMA”) is a veterinary’s professional society. It recognizes other societies that represent various groups of veterinary medicine specialists. One such specialty is ACVO. AVMA recognizes no other group in the area of veterinary ophthalmology.
. All of the appellants are veterinarians. Dr. D.A. Rickards has practiced in Cleveland, Ohio since 1963. He sat for ACVO’s written exam seven times and failed each time. Dr. Paul Belkin has practiced in St. Louis since 1952. His credentials were rejected by ACVO’s Credential Committee in 1975. He has not resubmitted his credentials although invited to do so. Dr. M.A. Custer has practiced in San Diego since 1959, and Dr. John S. Sleasman has practiced in Washington since 1973. Neither Dr. Custer nor Dr. Sleasman has ever applied for ACVO membership.
. Fed.R.Civ.P. 41(b) provides in part that “[a]fter the plaintiff, in an action tried by the court without a jury, has completed the presentation of his evidence, the defendant, without waiving his right to offer evidence in the event the motion is not granted, may move for a dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. The court as trier of the facts may then determine them and render judgment against the plaintiff or may decline to render any judgment until the close of all the evidence. If the court renders judgment on the merits against the plaintiff, the court shall make findings as provided in Rule 52(a).”
. Fed.R.Civ.P. 52(a) provides in part that “[i]n all actions tried upon the facts without a jury or with an advisory jury, the court shall find the facts specially and state separately its conclusions of law thereon .... Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses.”
. 15 U.S.C. § 1 provides in part that “[ejvery contract, combination ... or conspiracy, in restraint of trade or commerce among the several States ... is declared to be illegal.”
. 15 U.S.C. § 2 provides in part that “[e]very person who shall monopolize, or attempt to monopolize, or combine or conspire ... to monopolize any part of the trade or commerce among the several States ... shall be deemed guilty of a felony .... ”
. Appellants’ state-law claims under the California Business & Professions Code see, footnote 1, supra, must be rejected as well. The finding that appellees’ conduct is reasonable under the Sherman Act precludes recovery under state law in this instance. See Bridge Corp. of America v. The American Contract Bridge League Inc., 428 F.2d 1365, 1371 (9th Cir. 1970).
Reference
- Full Case Name
- D.A. RICKARDS, M.A. Custer, Paul V. Belkin and John S. Sleasman v. CANINE EYE REGISTRATION FOUNDATION, INC., Lawrence M. Trauner, Dolly B. Trauner, David E. Lipton, Alan D. MacMillan, Dennis D. Olin, Randall H. Scagliotti and Ralph C. Vierheller
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- 21 cases
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- Published