Collins v. International Dairy Queen

190 F.R.D. 633, 46 Fed. R. Serv. 3d 308, 2000 U.S. Dist. LEXIS 259, 2000 WL 19242
CourtDistrict Court, M.D. Georgia
DecidedJanuary 7, 2000
DocketNo. 5:94-CV-95-4(WDO)
StatusPublished

This text of 190 F.R.D. 633 (Collins v. International Dairy Queen) is published on Counsel Stack Legal Research, covering District Court, M.D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Collins v. International Dairy Queen, 190 F.R.D. 633, 46 Fed. R. Serv. 3d 308, 2000 U.S. Dist. LEXIS 259, 2000 WL 19242 (M.D. Ga. 2000).

Opinion

[634]*634 ORDER

OWENS, District Judge.

Plaintiffs have moved to file a Sixth Amendment to the complaint for two purposes: First, in accordance with the Court’s Order of August 5, 1999, they have amended their complaint to include allegations in Count V that the named plaintiffs and the class members have suffered a net economic loss resulting from defendants’ alleged unlawful tying arrangement. The motion to amend is granted with respect to the allegations of net economic loss.

Second, plaintiffs have asserted two additional antitrust damage theories based on factual allegations contained in the Fifth Amended Complaint. The new theories are set forth in Count III and Count IV of the Sixth Amendment to Complaint.

I. Procedural history

A. Amendments

The original complaint was filed April 5, 1994, alleging that defendants violated § 1 of the Sherman Act, 15 U.S.C. § 1, and breached agreements with their franchisees. On April 21, 1994, and August 2, 1994, the complaint was amended to correct errors in the caption. On September 9, 1994, plaintiffs filed a Third Amendment that added an additional claim for breach of the 1974 class action settlement agreement in the Middle District of Tennessee styled Charles E. Poole v. International Dairy Queen, et al. In the Fourth Amendment, filed November 15, 1995, plaintiffs added allegations that defendants were monopolizing and/or attempting to monopolize the market for food products and supplies purchased by Dairy Queen franchisees in violation of § 2 of the Sherman Act, 15 U.S.C. § 2, as well as claims for breach of contract, breach of fiduciary duty, and mismanagement of the advertising fund.

Plaintiffs filed a Fifth Amendment on December 7,1998, in which, in addition to alleging continuing antitrust violations, contractual violations, and violations of Minnesota statutory law, plaintiffs alleged facts for the purpose of demonstrating that defendants and their authorized warehouses have worked in concert to create barriers to entry into the market for food products and supplies purchased by the franchisees.

B. Defendants’ motion for summary judyment based on Illinois Brick

On May 15,1998, defendants filed a motion for summary judgment seeking to dismiss the monopolization and attempted monopolization claims based on the Supreme Court’s holding in Illinois Brick v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977), that an indirect purchaser generally lacks standing under § 2 of the Sherman Act. The court granted plaintiffs’ motion for extension of time to respond to the summary judgment motion on August 26, 1998, after which plaintiffs sought to conduct additional discovery concerning the applicability in this case of the “control exception” to Illinois Brick. On October 9, 1998, plaintiffs filed a motion to file a Fifth Amendment to their complaint to add allegations of defendants’ relationship with the authorized warehouses based on plaintiffs’ additional discovery, which they contended showed that defendants and some of the authorized warehouses have worked in concert to prevent alternative suppliers from competing in the market for food and supplies purchased by the franchisees. Plaintiffs acknowledge that these allegations were made to attempt to show that the indirect purchaser rule of Illinois Brick should not bar their damage claim for monopolization and attempted monopolization based on the “control” exception to that rule.

Plaintiffs conducted additional discovery after the motion to file the Fifth Amendment to the Complaint was filed. On August 4, 1999, the court granted defendants’ motion for summary judgment based on Illinois Brick. See Collins v. International Dairy Queen, 59 F.Supp.2d 1305 (M.D.Ga.1999). We held that facts offered by plaintiffs did not show that defendants controlled the authorized warehouses "within the meaning of the “control exception” to the indirect purchaser rule of Illinois Brick. Thus, based on their status as indirect purchasers, plaintiffs were precluded from pursuing their monopolization and attempted monopolization claims against defendants.

[635]*635 C. The present motion

Plaintiffs seek to add, on the basis of their discovery conducted in this case, two new antitrust damage theories involving allegations of a vertical conspiracy between defendants and their authorized warehouses to control the prices charged to the franchisees. They allege that rather than controlling the warehouses defendants have conspired with them, and that such concerted conduct: (1) constitutes a conspiracy to monopolize the market for approved food products and supplies that are purchased by Dairy Queen franchisees, in violation of § 2 of the Sherman Act, and (2) constitutes contracts, combinations or conspiracies in restraint of trade, in violation of § 1 of the Sherman Act.

II. Discussion

The Federal Rules of Civil Procedure provide that “leave [to amend] shall be freely given when justice so requires.” Fed. R.Civ.P. 15(a). Unless a substantial reason exists to deny leave to amend, “the discretion of the district court is not broad enough to permit denial.” Motorcity of Jacksonville, Ltd. v. Southeast Bank N.A., 83 F.3d 1317, 1323 (11th Cir.1996) (quoting Shipner v. Eastern Air Lines, Inc., 868 F.2d 401, 407 (11th Cir.1989)), vacated sub nom. Hess v. FDIC, 519 U.S. 1087, 117 S.Ct. 760, 136 L.Ed.2d 708, reinstated 120 F.3d 1140 (11th Cir.1997). The Supreme Court has stated, with respect to the meaning of Rule 15(a) and the reasons justifying denial of a motion to amend:

In the absence of any apparent or declared reason — such as undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, futility of amendment, etc. — the leave sought should, as the rules require, be “freely given.”

Foman v. Davis, 371 U.S. 178, 182, 83 S.Ct. 227, 230, 9 L.Ed.2d 222 (1962); see also Hanflik v. Ratchford, 848 F.Supp. 1539, 1542 (N.D.Ga.1994) citing Nolin v. Douglas County, 903 F.2d 1546, 1550 (11th Cir.1990).

A. Undue delay, bad faith, or dilatory motive

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Related

Hargett v. Valley Federal Savings Bank
60 F.3d 754 (Eleventh Circuit, 1995)
Jameson v. Arrow Company
75 F.3d 1528 (Eleventh Circuit, 1996)
Foman v. Davis
371 U.S. 178 (Supreme Court, 1962)
Illinois Brick Co. v. Illinois
431 U.S. 720 (Supreme Court, 1977)
Dr. John G. Madry, Jr. v. Dr. Otto G. Sorel
558 F.2d 303 (Fifth Circuit, 1977)
Robert J. Shipner v. Eastern Air Lines, Inc.
868 F.2d 401 (Eleventh Circuit, 1989)
Michael W. Nolin v. Douglas County, Earl D. Lee
903 F.2d 1546 (Eleventh Circuit, 1990)
Motorcity Of Jacksonville, Ltd. v. Southeast Bank N.A.
120 F.3d 1140 (Eleventh Circuit, 1997)
Hanflik v. Ratchford
848 F. Supp. 1539 (N.D. Georgia, 1994)
Collins v. International Dairy Queen
59 F. Supp. 2d 1305 (M.D. Georgia, 1999)
Motorcity of Jacksonville, Ltd. v. Southeast Bank N.A.
83 F.3d 1317 (Eleventh Circuit, 1996)
Ferrell v. Busbee
91 F.R.D. 225 (N.D. Georgia, 1981)
Hess v. Federal Deposit Insurance Corp.
519 U.S. 1087 (Supreme Court, 1997)

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Bluebook (online)
190 F.R.D. 633, 46 Fed. R. Serv. 3d 308, 2000 U.S. Dist. LEXIS 259, 2000 WL 19242, Counsel Stack Legal Research, https://law.counselstack.com/opinion/collins-v-international-dairy-queen-gamd-2000.