H.R.M., Inc. v. Tele-Communications, Inc.

653 F. Supp. 645, 1987 U.S. Dist. LEXIS 1120
CourtDistrict Court, D. Colorado
DecidedJanuary 30, 1987
DocketCiv. A. 86-A-2534
StatusPublished
Cited by15 cases

This text of 653 F. Supp. 645 (H.R.M., Inc. v. Tele-Communications, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
H.R.M., Inc. v. Tele-Communications, Inc., 653 F. Supp. 645, 1987 U.S. Dist. LEXIS 1120 (D. Colo. 1987).

Opinion

MEMORANDUM OPINION AND ORDER

ARRAJ, District Judge.

INTRODUCTION

This matter is before the court on the defendants, Tele-Communications, Inc. (TCI), TCI North Central, Inc. (North Central), and Horizon Tele-Communications, Inc. (Horizon’s) motion to dismiss the third and fifth claims of plaintiff’s, complaint for failure to state a claim upon which relief can be granted., The parties have submitted briefs in support of their respective positions on this motion, and after review of the materials submitted by the parties, I find that oral argument would not be helpful in the resolution of these issues.

BACKGROUND

Plaintiff H.R.M., Inc., d/b/a Kearney Ca-blevision, is a Nebraska corporation in the business of providing cable television services to consumers and organizations in Nebraska. Defendant TCI, a Delaware corporation, is a national communications organization in the business of providing cable television services to consumers and organizations through its operating groups and subsidiaries. Defendants North Cen *647 tral and Horizon are wholly-owned subsidiaries of TCI, and provide cable television services to subscribers in Kearney, Nebraska and the surrounding communities.

On December 17, 1986, Kearney filed a complaint against defendants, alleging five violations of the federal antitrust laws and five pendent state law claims. Defendants filed the present motion on January 6, 1987, seeking dismissal of plaintiff’s Third Claim (Conspiracy to Monopolize) and Fifth Claim (Price Discrimination) under F.R. Civ.P. 12(b)(6) for failure to state a claim upon which relief can be granted.

DISCUSSION

On a motion to dismiss a complaint under F.R.Civ.P. 12(b)(6), the court must consider the complaint’s factual allegations as true and give the plaintiff the benefit of all reasonable inferences. Mitchell v. King, 537 F.2d 385, 386 (10th Cir.1976). As a rule, “a complaint should not be dismissed for failure to state a claim 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, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957). This standard is even more stringent in the evaluation of antitrust claims, where the proof is in the hands of the alleged conspirators, and dismissals prior to giving the plaintiff ample opportunity for discovery should be granted very sparingly. Poller, v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S.Ct. 486, 491, 7 L.Ed.2d 458 (1962); Hospital Building Co. v. Trustees of Rex Hospital, 425 U.S. 738, 746, 96 S.Ct. 1848, 1853, 48 L.Ed.2d 338 (1976).

However, conclusory allegations which merely recite the litany of antitrust will not suffice. This court retains the power to insist upon some specificity in pleading before allowing a potentially massive factual controversy to proceed. Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 528 n. 17, 103 S.Ct. 897, 903 n. 17, 74 L.Ed.2d 723 (1983).

A. Count Three: Conspiracy to Monopolize.

Plaintiff’s Third Claim for relief alleges that the defendants have conspired with one another and with “others” to monopolize cable television services in the Kearney Market in violation of sections 1 and 2 of the Sherman Act, 15 U.S.C. § 1, § 2. Section 1 of the Sherman Act provides:

Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal ...

Plaintiff’s claim that defendants conspired with each other in violation of section 1 of the Sherman Act is foreclosed by the Supreme Court’s decision in Copper-weld Corp. v. Independence Tube Corp., 467 U.S. 752,104 S.Ct. 2731, 81 L.Ed.2d 628 (1984). In Copperweld, the Supreme Court held that a parent corporation and its wholly-owned subsidiaries are legally incapable of conspiring with each other in violation of section 1 of the Sherman Act. The court expressed as the basis for its decision the unity of purpose shared by the parent and its subsidiary:

A parent and its wholly owned subsidiary have a complete unity of interest. Their objectives are common, not disparate; their general corporate actions are guided or determined not by two separate corporate consciousnesses, but one____ With or without a formal “agreement,” the subsidiary acts for the benefit of the parent, its sole shareholder.

Id. at p. 771, 104 S.Ct. at p. 2742. Therefore, North Central and Horizon share a common purpose with TCI and cannot conspire with their parent in violation of section 1 of the Sherman Act. See also Deau-ville Corp. v. Federated Dept. Stores, Inc., 756 F.2d 1183, 1192 (5th Cir.1985); Russ’ Kwik Car Wash, Inc. v. Marathon Petroleum Co., 772 F.2d 214, 216 (6th Cir.1985); Zimmerman v. Board of Publications of the Christian Reformed Church, Inc., 598 F.Supp. 1002, 1010 (D.Colo.1984). By the same token, neither can North Central and Horizon conspire with one another. Al *648 though the Court’s holding does not explicitly preclude allegations of a conspiracy between two sister corporations, such as North Central and Horizon, the Court’s rationale does apply to such situations. Hood v. Tenneco Texas Life Ins. Co., 739 F.2d 1012, 1015 (5th Cir.1984); Carl Hizel & Sons, Inc. v. Browning-Ferris Industries, Inc., 590 F.Supp. 1201, 1202 n. 2 (D.Colo.1984); Satellite Financial Planning Corp. v. First National Bank of Wilmington, 643 F.Supp. 449, 451 (D.Del. 1986).

Plaintiff’s conspiracy claim under section 2 of the Sherman Act is also foreclosed by the rationale of Copperweld. 15 U.S.C. § 2 provides that:

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Cite This Page — Counsel Stack

Bluebook (online)
653 F. Supp. 645, 1987 U.S. Dist. LEXIS 1120, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hrm-inc-v-tele-communications-inc-cod-1987.