Hammes v. AAMCO Transmissions, Inc.

33 F.3d 774, 1994 WL 460595
CourtCourt of Appeals for the Seventh Circuit
DecidedAugust 24, 1994
DocketNo. 93-3884
StatusPublished
Cited by93 cases

This text of 33 F.3d 774 (Hammes v. AAMCO Transmissions, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hammes v. AAMCO Transmissions, Inc., 33 F.3d 774, 1994 WL 460595 (7th Cir. 1994).

Opinion

POSNER, Chief Judge.

The plaintiffs appeal from a judgment that dismissed their antitrust suit on the surprising ground that the complaint had failed adequately to allege that the defendants’ violations had affected interstate commerce. The defendants defend the judgment on other grounds as well, so we have a number of issues to resolve; but the most important is the issue of commerce, and it is entangled with a procedural issue: how detailed federal pleadings must be.

The complaint alleges the following facts. By reciting them we do not of course vouch for their truth, but they are all we have at this stage. Bonnie and Claude Cooksey were franchised by AAMCO Transmissions, Inc. (ATI) to operate an AAMCO transmission repair center in Indianapolis. To obtain the franchise they had been required by ATI to join the Indianapolis, Indiana, AAMCO Dealers’ Advertising Pool, an unincorporated association that along with ATI and the dealers belonging to the pool is a defendant in this suit. The pool buys an advertisement in the yellow pages that lists the address and telephone number of each of the pool’s members, who in the relevant period were five in number including the Cookseys’ dealership, Co-oksey AAMCO, Inc. It lists five other phone numbers with only a general indication of location (a neighborhood or other area in Indianapolis) rather than street addresses corresponding to these numbers. The reason for the omission of the street addresses is that these five “dealers” are phantoms— apparently nothing new in this industry. McAlpine v. AAMCO Automatic Transmissions, Inc., 461 F.Supp. 1232, 1263 (E.D.Mich.1978). A call to one of the five numbers is automatically forwarded, in accordance with a preexisting agreement, to one of the dealers in the pool — presumably, we were told at argument, one near the location designated in the advertisement for the “dealer” with the phantom number. Because the other members wanted to stifle the Cookseys’ competition, the pool refused to include the Cooksey dealership in the call-forwarding network, and as a result no calls to phantom numbers were forwarded to Co-oksey. Its phone number and address were listed in the advertisement, so it got some business that way, but, without any calls being forwarded from the phantom numbers, not enough to stay afloat. And when it tried to advertise outside the pool, it was enjoined at the suit of the other dealers for violating the pool agreement. So eventually Cooksey went belly-up. The injunction was issued in the course of a suit in state court that the defendants had brought against the Cook-seys for failing to pay their share of the advertisement in the yellow pages. That suit was stayed when the Cookseys went into bankruptcy, so its merits have never been determined.

Since the Cookseys’ dealership was operated in the corporate form, we do not understand why their trustee in bankruptcy is a plaintiff along with the corporation. Shareholders do not have standing to sue for harms to the corporation, or even for the derivative harm to themselves that might arise from a tort or other wrong to the corporation. Singletary v. Continental Illinois National Bank & Trust Co., 9 F.3d 1236, 1240 (7th Cir.1993); Mid-State Fertilizer Co. v. Exchange National Bank, 877 F.2d 1333, 1335 (7th Cir.1989); Southwest Suburban Board of Realtors, Inc. v. Beverly Area Planning Ass’n, 830 F.2d 1374, 1378 (7th Cir.1987); cf. Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983). There is no suggestion that the Cookseys incorporated during rather than before .the alleged [778]*778violations took place, in which event they would have sustained a direct injury to themselves as well as the derivative injury resulting from their ownership of the corporation. Although the complaint states that the corporation declared bankruptcy along with its owners, and has been liquidated, there is no mention of a trustee. Maybe the rights of the bankrupt estate were assigned to the Cookseys. But if so why would—how could—the corporation, liquidated without a trace as it were, be a plaintiff?

These are deep mysteries, but not ones we have to solve. The defendants do not question the Cookseys’ standing, and, despite the suggestive terminology, “antitrust standing” is not a jurisdictional requirement and is therefore waivable. The issue is not whether the Cookseys were hurt by the injury to their corporation—no doubt they were, albeit obliquely, but that would be enough to confer standing in the Article III sense. It is whether they have a legal right to obtain damages for that hurt, North Shore Gas Co. v. EPA 930 F.2d 1239, 1242 (7th Cir.1991), and that is a question about the merits. It has been waived, so we shall pay no further attention to it, except that in the balance of our opinion we shall pretend that there is one plaintiff and call it “Cooksey.”

The complaint alleges that ATI sells franchises in several states and that pursuant to the franchise agreements Cooksey and the other AAMCO dealers in Indianapolis mailed substantial fees to ATI at its Pennsylvania headquarters, contributed money to ATI’s national advertising, “and purchased equipment and inventory sold by ATI (or otherwise meeting ATI’s specifications),” “all of which activities occurred in and had a substantial effect on interstate commerce.” There are no allegations concerning the amount of equipment or inventory purchased or where the stuff came from. There are no numbers. Nor is it expressly alleged that the defendants’ violations of the Sherman Act, as distinguished from the specific activities of the plaintiffs and the defendants that the complaint describes in the passages we have just quoted, activities none of which is unlawful, affected interstate commerce.

So what? The Federal Rules of Civil Procedure do not require the plaintiff to plead the particulars of his claim, Fed. R.Civ.P. 8(a)(1) with the exceptions (of which the best known is fraud) listed in Rule 9(b). Early v. Bankers Life & Casualty Co., 959 F.2d 75, 79 (1992). A nascent movement in the lower courts to add judge-made exceptions to those listed in Rule 9(b), well described in Boston & Maine Corp. v. Town of Hampton, 987 F.2d 855, 862-64 (1st Cir.1993), was scotched by the Supreme Court in Leatherman v. Tarrant County Narcotics Unit, — U.S. -, -, 113 S.Ct. 1160, 1168,122 L.Ed.2d 517 (1993); see also Lujan v. National Wildlife Federation, 497 U.S. 871, 889, 110 S.Ct. 3177, 3189, 111 L.Ed.2d 695 (1990). We continue to be puzzled why lawyers insist on writing prolix complaints that can only get them into trouble, as in Conn v. GATX Terminals Corp., 18 F.3d 417, 419 (7th Cir.1994), and Fryman v. United States, 901 F.2d 79, 82 (7th Cir.1990).

But we have been speaking so far of the statement of the claim in the complaint and it may be necessary to distinguish between that and the jurisdictional allegations, even though the rules use the same formula, “short and plain statement,” for both. Fed.R.Civ.P. 8(a)(1), (2).

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