Snow v. American Morgan Horse Assoc. CV-93-463-JD 05/08/98 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Maxine W. Snow
v. Civil No. 93-463-JD
The American Morgan Horse Association, Inc., et al.
O R D E R
The plaintiff, Maxine W. Snow, brought this action alleging
antitrust violations against the defendants, the American Morgan
Horse Association, Inc. ("AMHA"), John L. Hammer, III, Tyler J.
Atwood, Philip M. Dubois, Darwin A. Olson, Dr. Albert A. Lucine,
Jr., George W. Arnold, Robert A. Epperson, James Stewart, Charle
E. McPherson, Mary C. Woolverton, Marjorie D. Goodson, and
Adrienne Wailes.1 Before the court are defendant Wailes' motion
to dismiss (document no. 82), defendant Goodson's motion for
summary judgment (document no. 72), and the remaining defendants
motion for summary judgement (document no. 73).2
xAn additional defendant, Carol Bailey Hudson, has been dismissed without prejudice to the plaintiff's claims against her.
2Defendant Goodson has merely incorporated the arguments of the AMHA in her motion for summary judgment, and so the court hereinafter refers collectively to the defendants as a unified group unless otherwise noted. Background3
The plaintiff was involved in the Morgan horse business for
over twenty years. During that time, she was a member of the
AMHA. The AMHA is a nonprofit association that presents itself
as dedicated to the preservation and promotion of the Morgan
horse breed. In support of this end, the AMHA maintains a
registry of purebred Morgan horses (the "Registry"). A horse can
only be listed in the Registry if both its parents are registered
Morgan horses.
This action stems from an investigation by the AMHA into the
parentage of five horses registered by the plaintiff as Morgans
but determined by the AMHA to be non-Morgans. The court relates
seriatim the background of the investigation against the
plaintiff, the state court litigation that resulted from the
investigation, the history of this action, and the AMHA's
treatment of other cases.
31he court relates all material facts in genuine dispute in the light most favorable to the plaintiff, the party resisting summary judgment. See Sanchez v. Alvarado, 101 F.3d 223, 225 n.l (1st Cir. 1996). 1. Investigation of and Action Against the Plaintiff4
In August or September 1991, the AMHA received a letter
calling into guestion the lineage of five foals registered by the
plaintiff as offspring of the Morgan mare Senora Showblez Vona
("Senora"). The letter guestioned how a mare that was as old as
Senora and who had not previously foaled could have five foals in
five successive years. Defendant Atwood, Registrar of the AMHA,
brought the matter up at a meeting of the AMHA Registry Committee
in November 1991.
Members of the AMHA suspected that the plaintiff had bred a
Morgan stallion to a non-Morgan mare, represented the foals as
the offspring of Senora, and registered them as Morgans. To make
the deception more difficult to uncover, the plaintiff submitted
a blood sample from the non-Morgan mare, claiming that it was in
fact the blood of Senora, whose blood had not been previously
collected. In that way, the blood type of the foals would match
the blood registered as Senora's.
As a result of their suspicions, the AMHA's Registry
Committee began to investigate the plaintiff's business
practices. The Registry Committee authorized Atwood to go to the
4The facts pertinent to the investigation of and action against the plaintiff are recounted more fully in the New Hampshire Supreme Court's opinion in Snow v. American Morgan Horse Ass'n, 141 N.H. 467, 686 A.2d 1168 (1996).
3 plaintiff's farm to draw blood from Senora in order to check it
against the foals attributed to her. Atwood was told by the
plaintiff that Senora was not at the farm but was instead in the
care of a veterinarian. Later, when the AMHA took further steps
to obtain a sample of Senora's blood, the plaintiff informed
Atwood that Senora had died prior to the date of the first
inspection. The plaintiff reported that she was not aware of
Senora's death at the time of the first inspection because she
had just returned from a trip.
During the course of its investigation, the AMHA held two
internal hearings, each of which generated an appeal. The AMHA
investigation resulted in the expungement of the foals alleged by
the plaintiff to be the progeny of Senora (the "Senora foals")
and the expulsion of the plaintiff from the AMHA. The
plaintiff's expulsion from the AMHA has ended her career as a
breeder, trainer, and seller of Morgan horses.
2. The State Court Action
The ongoing AMHA investigation interfered with the
plaintiff's ability to sell the Senora foals and the ability of
others to sell the progeny of the Senora foals. Accordingly, the
plaintiff petitioned the New Hampshire Superior Court for
preliminary injunctive relief and reguested an order compelling
4 the AMHA to recognize the five foals as Senora's offspring. The
AMHA filed a two-count counterclaim alleging that the plaintiff
had committed fraud and violated the New Hampshire Consumer
Protection Act ("CPA") by falsely registering non-Morgans as
Morgans.
The superior court denied the plaintiff's application for a
preliminary injunction, and she withdrew, without prejudice, her
claims against the AMHA and its officers. See Snow v. American
Morgan Horse Ass'n, 141 N.H. 467, 468, 686 A.2d 1168, 1169
(1996). The court then tried the AMHA's counterclaims. See id.,
686 A.2d at 1169. The superior court found that the plaintiff
had committed fraud and violated the CPA by registering the non-
Morgan Senora foals as Morgans. See id., 686 A.2d at 1169. It
awarded the AMHA damages in the amount of $37 6,362.13 for the
plaintiff's violation of the CPA. See id., 686 A.2d at 1169-70.
The plaintiff appealed, and the New Hampshire Supreme Court
upheld the trial court's finding that the AMHA had proved fraud
by the plaintiff. See id. at 470, 686 A.2d at 1171. The court,
however, reversed the superior court's finding of a CPA
violation, holding that the CPA did not apply to the plaintiff's
conduct because she did not conduct any trade or commerce with
the AMHA. See id. at 471, 686 A.2d at 1172. The court remanded
the case to the trial court for consideration of damages and
5 attorneys' fees arising from the plaintiff's fraud. See id. at
472, 686 A.2d at 1172.
3. The Current Action
While the state court action was pending, the plaintiff
brought this action alleging that the defendants' conduct in
investigating and expelling her from the AMHA violated the
antitrust laws as well as various provisions of state law. The
gravamen of the plaintiff's complaint is that the AMHA
arbitrarily and capriciously chose to pursue disciplinary action
against her when other AMHA members who engaged in egually
objectionable behavior went unpunished. She contends that the
AMHA's prosecution of her was an act calculated to eliminate a
competitor in restraint of trade and that the AMHA's purported
goals and objectives are a sham. The plaintiff alleges that the
AMHA hearings and appeals were not fair or impartial because of,
inter alia, the following factors: the Registry Committee used
false and misleading statements as a basis to commence the
initial investigation; the AMHA did not inform the plaintiff of
the identity of her accuser; members of the committees that heard
her case were competitors and therefore were not impartial;
members of the committees had prejudged the outcome of the case;
the testimony of witnesses was manipulated during the hearings;
6 and directors who had already found her guilty in the hearings
were selected to serve on the appeals tribunal. In short, the
plaintiff has attacked every facet of the defendants' actions.5
In her amended complaint, the plaintiff alleges the
following claims: the defendants engaged in a group boycott and
conspiracy in restraint of trade in violation of § 1 of the
Sherman Act (count I); the defendants conspired to monopolize
trade and commerce in the breeding, sale, and showing of Morgan
horses in violation of § 2 of the Sherman Act (count II); the
defendants intentionally and improperly interfered with
contractual relations that the plaintiff had with third parties
in violation of state law (count III); the defendants violated
the New Hampshire CPA (count IV); the defendants defamed the
plaintiff (count V ) ; and the AMHA and Goodson violated the
plaintiff's due process rights during the course of litigation
against her by obtaining prejudgment attachments of her property
under an allegedly unconstitutional statute (count VI).
5In addition, despite having been informed that the court will not allow the plaintiff to relitigate issues conclusively determined in the state court litigation, she has continued to suggest that the five expunged Senora foals were in fact the Morgan progeny of Senora and thus that she did not commit fraud. Those issues, however, were fully and conclusively litigated in the state court action and thus will not be reexamined here.
7 4. AMHA's Failures to Take Disciplinary Action Against Others
The plaintiff's claims revolve around her allegation that
the AMHA singled her out for disciplinary action not meted out to
others and disproportion to the wrong she committed. In support
of her claim, the plaintiff points to the following episodes in
which she asserts that the AMHA failed to take action against
other AMHA members who engaged in conduct that violated AMHA
rules.
Only one other non-Morgan has been expunged from the
Registry. Timberland Jon V, owned by Judy Whitney, was a horse
of a race breed entered as a Morgan in a Morgan world race
competition. Timberland won by such a large margin that it
raised suspicion as to its breed and it was discovered to be a
non-Morgan. Although the horse was expunged, no action was taken
against Whitney, who remains a member in good standing of the
AMHA.
The Morgan stallion Vanberbilt was born on June 8, 1980, and
registered by Susan Marcotte. Marcotte listed Shaker's Destry as
Vanderbilt's sire. In March 1993, while the investigation of the
plaintiff was proceeding, defendant Atwood learned from the
laboratory that performs blood tests for the AMHA that Shaker's
Destry was probably not the sire of Vanderbilt. Vanderbilt thus
could have been fraudulently registered by Marcotte, but no charges were ever brought against Marcotte and the progeny of
Vanderbilt have not had their pedigree changed.
While the plaintiff was being investigated, an anonymous
memorandum was sent to all members of the AMHA Board of
Directors. The memo alleged that Thomas Caisse, a member of the
Board and chairman of the AMHA Ethics Committee, was involved in
the false registration of a mare he owned. Past Memories, as the
daughter of the Morgan horse Wessex Melody when her real mother
was Milady Bloomfield, a non-Morgan. The AMHA never investigated
this accusation, and Caisse remains the head of the AMHA Ethics
Committee.
The owners of three Morgan dams, Chesbrook Superman,
Flamewood Surena, and Blackgold Excalibur, sent these dams to
Ralph Curtis so they could be bred to his stallion Chasley
Superman. Because Chasley Superman was going sterile, Curtis
bred the mares to another stallion, Cedarbrook Sensation. The
fraud was discovered through blood typing and the pedigrees of
the foals were officially changed. No action was taken against
Curtis, who at the time was a Director of the AMHA. Two years
later he was appointed chairman of the AMHA Ethics Committee.
On February 19, 1992, defendant Atwood received information
from Laura Gordon that a Morgan mare. Lost River Sanfield, was a
"fake" and other information that foals from as many as three different horses had been attributed to Lost River Sanfield. The
AMHA declined to investigate these charges.
The registration certificate of the mare Yellow Iris
Jennifer lists her sire as Yellow Iris Brooke. However, the AMHA
has known since at least 1989 that Yellow Iris Brooke has been
eliminated by blood testing as Yellow Iris Jennifer's sire. The
AMHA investigated the case, but was unable to determine the
identity of Yellow Iris Jennifer's true sire. Despite this, the
AMHA Board of Directors voted to permit Yellow Iris Jennifer to
remain in the registry with Yellow Iris Brooke as her recorded
sire, permitting her to compete in the 1990 Grand National Show.
On May 6 or 7, 1995, after the conclusion of the superior
court action against the plaintiff, the AMHA Board of Directors
amended its rules to provide that, effective in May 1995, no
horse that was registered as of December 31, 1991, could be
expunged without the owner or breeder's consent. The effect of
this change in regulations is that what happened to the plaintiff
and her horses cannot happen to any other established breeder.
The plaintiff alleges that all of these incidents demonstrate
that the AMHA's asserted concern with protecting and preserving
the integrity of the Registry is a sham. She contends that her
expulsion and the expungement of her horses was accomplished by
10 jealous competitors for the purpose of eliminating her from the
market.
Discussion
Defendant Wailes has moved to have the action against her
dismissed pursuant to 11 U.S.C. § 727 because it was filed after
she filed a voluntary petition for bankruptcy. Wailes listed the
claim against her as a scheduled debt and the bankruptcy court
has issued a discharge of Wailes from all dischargeable debts.
The bankruptcy case was closed on September 22, 1997. Based on
Wailes' motion to dismiss and accompanying attachments, the
plaintiff's claim against Wailes appears to have been discharged
by the bankruptcy proceedings. The plaintiff's response to
Wailes' motion to dismiss was due on March 23, 1998. As of the
date of this order, the plaintiff has not responded to the motion
and has not reguested additional time to do so. Therefore, the
court grants defendant Wailes' motion to dismiss (document no.
82), ending her role as a defendant in the case.
The remaining defendants have moved for summary judgment on
each count of the plaintiff's claims. The role of summary
judgment is "to pierce the boilerplate of the pleadings and assay
the parties' proof in order to determine whether trial is
actually reguired." Snow v. Harnischfeger Corp., 12 F.3d 1154,
11 1157 (1st Cir. 1993) (quoting Wynne v. Tufts Univ. Sch. of
Medicine, 976 F.2d 791, 794 (1st Cir. 1992)). The court may only
grant a motion for summary judgment where the "pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving
[parties are] entitled to a judgment as a matter of law." Fed.
R. Civ. P. 56(c). The parties seeking summary judgment bear the
initial burden of establishing the lack of a genuine issue of
material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323
(1986); Quintero de Quintero v. Aponte-Rogue, 974 F.2d 226, 227-
28 (1st Cir. 1992). The court must view the entire record in the
light most favorable to the plaintiff, "'indulging all reasonable
inferences in that party's favor.'" Mesnick v. General Elec.
C o ., 950 F.2d 816, 822 (1st Cir. 1991) (quoting Griqqs-Rvan v.
Smith, 904 F.2d 112, 115 (1st Cir. 1990)). However, once the
defendants have submitted a properly supported motion for summary
judgment, the plaintiff "may not rest upon mere allegation or
denials of [her] pleading, but must set forth specific facts
showing that there is a genuine issue for trial." Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 256 (1986) (citing Fed. R.
Civ. P. 56(e)). The court considers the parties' arguments with
respect to each of the plaintiff's claims seriatim.
12 I. Section 1 of the Sherman Act
Section 1 of the Sherman Act provides,in relevant part:
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 hereby declared to be illegal.
15 U.S.C.A. § 1 (West 1997). Acts which violate § 1 are divided
into two categories: (1) per se violations, which intrinsically
violate § 1; and (2) acts subject to rule of reason analysis,
which only violate § 1 if they impose an unreasonable restraint
on trade. See State Oil Co. v. Khan, 118 S. C t . 275, 279 (1997).
Actions that may impose an unreasonable restraint on trade under
rule of reason analysis include the exclusion of market
participants by associations such as the AMHA through the
enforcement of otherwise legitimate disciplinary rules "in an
arbitrary or discriminatory manner, or where the restraint is
broader than necessary to accomplish the legitimate of the
regulation." Cooney v. American Horse Shows Ass'n, Inc., 495 F.
Supp. 424, 431 (S.D.N.Y. 1980); see Carleton v. Vermont Dairy
Herd Improvement Ass'n, 782 F. Supp. 926, 931-32 (D. V t . 1991);
McCreerv Angus Farms v. American Angus Ass'n, 379 F. Supp. 1008,
1019 (S.D. 111.), aff'd 506 F.2d 1404 (7th Cir. 1974); see also
Pretz v. Holstein Friesian Ass'n of Am., 698 F. Supp. 1531, 1539-
40 (D. Kan. 1988) (rule of reason analysis applied to guestion of
13 association action).
However, because the antitrust laws "were enacted for 'the
protection of competition not competitors ,'" Brunswick Corp. v.
Pueblo Bowl-O-Mat, Inc., 429 U.S. A l l , 488 (1977) (quoting Brown
Show Co. v. United States, 370 U.S. 294, 320 (1962)), to prevail
in an antitrust claim predicated on arbitrary association action
the plaintiff must prove not only that she was the victim of such
action but also that she suffered antitrust injury, see id. at
488-89. Antitrust injury is "injury of the type the antitrust
laws were intended to prevent and that flows from that which
makes defendants' acts unlawful." Id. at 489. In other words,
the plaintiff must demonstrate not only that she suffered
arbitrary action at the hands of the AMHA but also that the
AMHA's acts harmed competition in the relevant market. See
Turner v. Johnson & Johnson, 809 F.2d 90, 102 (1st Cir. 1986) .
The parties agree that this case is subject to rule-of-
reason analysis. The defendants argue that the plaintiff's § 1
claim should be dismissed because the AMHA's actions, to the
extent that they restrained trade, did not unreasonably restrain
trade because the pro-competitive benefits of its actions
outweigh any negative anti-competitive effects. The defendants
also contend that the plaintiff has not demonstrated that she
suffered antitrust injury -- that is, that she has not adduced
14 sufficient evidence to raise a genuine issue of material fact
tending to support the contention that any acts by the defendants
unreasonably restricted competition.
The plaintiff responds that in antitrust cases where motive
and intent are central issues, and particularly in rule of reason
cases, summary judgment is inappropriate. She asserts that the
restraint imposed by the defendants' acts is unreasonable because
the defendants have not pursued their proffered goal of
protecting the integrity of the Registry in other cases,
revealing that their true purpose was an illegitimate desire to
eliminate her from the Morgan show horse market.6 The plaintiff
further contends that competition in the Morgan show horse market
was injured both by her expulsion and the expungement of the
Senora foals.7
6The plaintiff's allegations refer to markets in Morgan show horses of three different geographic scopes: New Hampshire, New England, and the United States. The court refrains from defining the precise geographic scope of the relevant market at this time because neither the plaintiff nor the defendants have specified which geographic market is proper.
7The plaintiff's claims that competition was damaged by the expungment of the Senora foals is untenable. As the court has noted already, the Senora foals have been conclusively determined to be non-Morgans and the plaintiff may not relitigate the issue. See supra note 5. Therefore, their expungment from the Registry and removal from the Morgan show horse market could not have had a negative effect on competition in that market. The plaintiff's only potentially cognizable claim of antitrust injury is that the defendants damaged competition by eliminating her as a source for Morgan horses other than the Senora foals.
15 The plaintiff's primary evidence in support of her claim
that the defendants' actions were more restrictive than necessary
to accomplish the legitimate goals of the AMHA is her account of
other violations of AMHA policies which the AMHA failed to pursue
or which resulted in less severe sanctions than those imposed on
the plaintiff. The court has recounted those claims in detail in
part four of the background section, supra. The court finds that
these episodes raise a genuine issue of material fact as to
whether the defendants were engaged in an effort to accomplish
the legitimate ends of the AMHA or instead were engaged in a
campaign to eliminate a successful competitor. Further, the
court finds that the AMHA's adoption of the policy by which it
can no longer expunge horses from the Registry without the
consent of the owners raises a genuine issue of material fact on
the guestion of whether the defendants were actually pursuing
their articulated legitimate purpose of protecting the integrity
of the Registry by investigating and disciplining the plaintiff.
However, these conclusions, while indicating the existence of a
genuine issue of material fact as to whether the defendants
caused injury to the plaintiff as a competitor in the market for
Morgan show horses do not in and of themselves raise a genuine
issue of material fact as to the existence of an injury to
competition.
16 The plaintiff's primary evidence in support of her claim
that she suffered cognizable antitrust injury in the form of an
injury to competition consists of the affidavits of two AMHA
members who are familiar with the market for Morgan show horses.
Both aver that the expulsion of the plaintiff from the AMHA has
damaged the Morgan show horse market. See Pl.'s Obj. to Defs.'
Mot. for Summ. J. ("Pl.'s Obj."), Exs. 30, 38 .8 The court finds
8The affidavit of Cheryl Orcutt submitted by the plaintiff as evidence of the effect of the defendants' actions on the Morgan show horse market states, in part, the following:
Since the AMHA began pursuing [the plaintiff], and at least in part as a result of AMHA's actions, all markets for Morgan show horses have declined. Fewer horses are being bred locally, regionally and nationally, and people are moving out of breeds. There has been a decline in the number of large, very competitive farms in the last four to five years. In New Hampshire, there are now only two major farms left . . . . The biggest effect has been felt in the northeast. Prior to 1991, the northeast was the center of the Morgan universe. One of the reasons for this was the effort of [the plaintiff]. She drew in customers from all over the country. This was good for everybody in the northeast, not just her. Buyers nationwide would schedule trips primarily to view [the plaintiff's] stock and plan to visit smaller breeders in Maine, New Hampshire, and Vermont at the same time. Such buying trips are not as freguent now. Additional [sic], the number of major breeders in the northeast has declined from up to fifteen to no more than twelve.
Pl.'s Obj., Ex. 30, 5 15. The affidavit of Douglas W. Coon, submitted for the same purpose, states, in part, the following:
I believe that the Morgan Breeder's Sweepstakes that was begun by [the plaintiff] and Kelli Ross has suffered immensely. What initially was two divisions
17 that these affidavits satisfy the plaintiff's burden of
demonstrating the existence of a genuine issue of material fact
about whether the acts of the defendants resulted in harm to
The court concludes that the plaintiff has successfully
demonstrated the existence of a genuine issue of material fact
with respect to her claim of a § 1 antitrust violation in count
I. Therefore the court denies summary judgment as to the
plaintiff's § 1 claims.
II. Section 2 of the Sherman Act
Section 2 of the Sherman Act makes it unlawful to
monopolize, or attempt to monopolize, or combine or
and $100,000.00 in prize money is now down to one division and $70,000.00, a loss of thirty percent from its inception. The Sweepstakes is the highest paying Morgan class in the country. It generated the most money from stallion owners who believed in their stallion's ability to produce superior offspring and therefore nominated them at a cost of $5,000.00 per year. It is apparent to me that the downsizing has hurt the Morgan industry.
Id., Ex. 38, I 9.
18 conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations . . . .
15 U.S.C.A. § 2 (West 1997). A monopoly offense is comprised of
the following two elements: "(1) the possession of monopoly
power in the relevant market and (2) the willful acguisition or
maintenance of that power as distinguished from growth or
development as a conseguence of a superior product, business
acumen, or historic accident." United States v. Grinnell Corp.,
384 U.S. 563, 570-71 (1966). Monopoly power is "the power to
control prices or exclude competition." United States v. E. I.
Du Pont de Nemours & Co., 351 U.S. 377, 391 (1956). "A single
organization which exercises a dominant position in a given
market does not violate section two unless it has 'acguired or
maintained [its] strategic position, or sought to expand [its]
monopoly, or expanded it by means of those restraints of trade
which are cognizable under § 1 . ' " Cooney v. American Horse Shows
Ass'n , 495 F. Supp. 424, 433 (S.D.N.Y. 1980) (guoting United
States v. Griffith, 334 U.S. 100, 106 (1948), overruled on other
grounds by Copperweld Corp. v. Independence Tube Corp., 467 U.S.
752 (1984) ) .
The defendants argue that the plaintiff's monopolization
claims must fail because the expulsion of the plaintiff from a
market that includes thousands of AMHA members cannot be deemed
19 to be an attempt at achieving monopoly power. The defendants
also argue that the plaintiff's allegation that the defendants
conspired to create a monopoly is inconsistent with her assertion
that the defendants already hold monopoly power over the relevant
market. In addition, the defendants claim that the plaintiff's
§ 2 claim must fail because the plaintiff cannot demonstrate that
the defendants acguired or maintained their monopoly by means of
a restraint of trade cognizable under § 1.
The plaintiff responds that summary judgment should not be
granted on this count because the defendants had the power to
exclude competition in every segment of the market and used that
power to exclude her from the market. She alleges that the same
acts that form the core of her claim under § 1 of the Sherman
Act, which the court has already ruled raise a genuine issue of
material fact for trial, also raise a genuine issue with respect
to her § 2 claim. The plaintiff asserts that the defendants
restrained trade by instituting a "witch hunt" against her,
causing other breeders to fear that the same actions might be
taken against them in the future.
The parties agree that the AMHA exercises monopoly power
over the Morgan show horse industry. The existence of monopoly
power alone however does not violate § 2. See United States v.
Swift & C o ., 286 U.S. 106, 116 (1932). In Hatley v. American
20 Quarter Horse Ass'n, the Fifth Circuit dismissed a § 2 claim
against the American Quarter Horse Association arising from
failure to register a horse because the Association's rules
"promote competition rather than hinder it" and "the Associa
tion's principals had no intent to use [its registration rule]
for anticompetitive purposes." 552 F.2d 646, 654 (5th Cir.
1977). In this case, however, the plaintiff has alleged that the
defendants acted with the anti-competitive purpose of eliminating
her as a competitor. The allegations are akin to those accepted
by the court as stating a cognizable § 2 claim in Carleton v.
Vermont Dairy Herd Improvement Ass'n. See 782 F. Supp. 926, 935
(D. V t . 1991). In that case, the defendants held a monopoly in
the business of providing official milk testing services and
allegedly used their market power "to distort competition in the
business of breeding, raising, exhibiting and selling Holstein
cattle, a market in which many of the defendants also compete, by
willfully depriving a competitor in the latter market of services
essential to compete effectively." See id. Here, the AMHA,
which holds a monopoly in the registration of Morgan horses,
along with the defendant AMHA members, many of whom breed, raise,
exhibit, and sell Morgan horses, are alleged to have
intentionally eliminated the plaintiff as a competitor in a way
that distorts competition in the Morgan horse market. The court
21 therefore concludes that the plaintiff has demonstrated the
existence of a genuine issue of material fact with respect to her
monopolization claim and denies the defendants' motion for
summary judgment on count II of the plaintiff's claims.
III. Wrongful Interference With Contractual Relationships
Under New Hampshire law, a plaintiff bringing a claim for
tortious interference with contractual relations must show (1)
that the plaintiff had a contractual relationship with a third
party of which the defendant was aware; (2) that the defendant
wrongfully induced the third party to breach the contract; and
(3) that the damages claimed were proximately caused by the
interference. See Roberts v. General Motors Corp., 138 N.H. 532,
539 (1994) .
The defendants assert that the plaintiff's claim in count
III that the defendants wrongfully interfered with contractual
relationships should be dismissed because the plaintiff has
failed to allege reguired aspects of all three elements of her
claim. First, the defendants contend that the plaintiff has
failed to identify any contractual relationships which the
plaintiff had with third parties and to allege that the AMHA was
aware of the contractual relationships. Second, the defendants
contend that the plaintiff fails to allege that the AMHA
22 wrongfully induced any third party to breach a contract with the
plaintiff. Third, the defendants allege that the plaintiff fails
to allege proximate causation of the damages suffered by the
plaintiff. The plaintiff has not specifically addressed the
defendants' arguments. The plaintiff merely "submits that the
facts cited [in opposition to summary judgment on the antitrust
claims in counts I and II] also raise material issues of fact
relating to the remaining counts of the Complaint and that
summary judgment must, therefore, be denied as to them as well."
Pl.'s Obj. at 30.
The court finds that the defendants' motion for summary
judgment is sufficiently supported to carry their initial burden
of demonstrating a lack of a genuine issue of material fact on
the second element of the plaintiff's claim by pointing to a lack
of evidence that the defendants wrongfully induced any third
party to breach a contract with the plaintiff. This shifts the
burden to the plaintiff to come forward with the evidence in
support of her claim.
The plaintiff's amended complaint fails to identify any
specific contracts that have been breach, any specific
individuals with whom the plaintiff had contracts, or the
specific means by which the defendants wrongfully induced any
individual to breach a contract with the plaintiff. She asserts
23 that the defendants' actions placed limits on her ability to
transfer one of the Senora foals and four other Morgan horses
unrelated to the investigation by refusing to accept transfers of
those horses. See Am. Compl., 5 37. However, the AMHA properly
refused to certify the transfer of one of the Senora foals as a
Morgan because the then-pending investigation into the horse's
pedigree revealed it conclusively to be a non-Morgan. See supra
notes 5, 7. As to the four Morgan horses unrelated to the Senora
investigation, the plaintiff's complaint indicates that the
transfer of those horses was eventually allowed. See id. The
remainder of the plaintiff's amended complaint contains nothing
more than conclusory allegations, upon which she may not rest, in
support of her claim. See Fed. R. Civ. P. 56(e). The
plaintiff's response to the defendants' motion for summary
judgment, which merely relies on her showing of evidence used to
oppose summary judgment on the antitrust claims, also fails to
identify any individual that the defendants wrongfully induced to
breach any contract with the plaintiff. Therefore, the court
grants the defendants' motion for summary judgment on the
plaintiff's claims in count III.9
9Because of the court's conclusion that the plaintiff has failed to raise a genuine issue of material fact with respect to the second element of her claim, it need not reach the defendants' arguments that the plaintiff has also failed to adeguately support the other elements of her claim.
24 IV. Consumer Protection Act Claim
In count IV, the plaintiff alleges that the actions of the
defendants in discovering, investigating, and punishing her
constituted unfair or deceptive acts or practices in violation of
New Hampshire's Consumer Protection Act ("CPA"), RSA § 358-A
(1995). The defendants argue that they are entitled to summary
judgment on this claim because: (1) their acts do not resemble
the acts or practices set forth in section 2 of the CPA; and (2)
the proscriptions of section 2 of the CPA are not implicated by
Snow's dealings with the AMHA, as evidenced by the New Hampshire
Supreme Court's opinion in Snow, 141 N.H. at 471, 686 A.2d at
1171-72, where it reversed the trial court's finding of a CPA
violation. As noted in part III, supra, the plaintiff has not
responded specifically to the defendants' arguments on this count
but has instead relied upon her showing of disputed factual
issues with respect to the antitrust violations in counts I and
II to raise a genuine issue of material fact with respect to her
CPA claim.
The New Hampshire CPA provides, in pertinent part, the
following:
It shall be unlawful for any person to use any unfair method of competition or any unfair or deceptive act or
25 practice in the conduct of any trade or commerce within this state.
RSA § 358-A:2 (1995). "Trade" and "commerce" within the meaning
of the statute include
the advertising, offering for sale, sale, or distribu tion of any services and any property, tangible or intangible, real, personal or mixed, and any other article, commodity, or thing of value wherever situate, and shall include any trade or commerce directly or indirectly affecting the people of this state.
RSA § 358-A:l (1995). In the Snow case, the New Hampshire
Supreme Court found that "Snow's act of fraudulently registering
foals fails to satisfy the statute's definition of trade or
commerce." Snow, 141 N.H. at 471, 686 A.2d at 1171-72. Snow's
allegations that the defendants intentionally drove her out of
business by expunging her horses from the Registry and expelling
her from the AMHA similarly do not satisfy the CPA's definition
of "trade or commerce." Although such actions may have had an
indirect effect on trade or commerce, they do not constitute the
advertising, offering for sale, sale, or distribution of services
or property.
The court finds that the defendants have satisfied their
initial burden of demonstrating the lack of a genuine issue of
material fact on the plaintiff's Consumer Protection Act claim,
shifting the burden to the plaintiff to demonstrate the existence
of a genuine issue of material fact reguiring a trial. The court
26 also finds that the plaintiff's reliance on the facts raised in
the context of her antitrust claim are inapposite to her CPA
claim and therefore fail to satisfy her burden of demonstrating
that a genuine issue of material fact remains for trial. For
this reason, the court grants summary judgment to the defendants
on the plaintiff's Consumer Protection Act claim in count IV.
V. Defamation
In count V, the plaintiff alleges that the defendants
defamed her by publishing statements "including but not limited
to statements to the effect that plaintiff defrauded the Registry
and that Senora was not the dam of the foals as claimed by
plaintiff." Am. Compl., 5 64. The defendants assert that they
are entitled to summary judgment on this count because any
statements that the plaintiff defrauded the Registry and that
Senora was not the dam of the foals as claimed by the plaintiff
are true. See Simpkins v. Snow, 139 N.H. 735, 740, 661 A.2d 772,
776 (1995) ("A statement is not actionable if it is substantially
true."). As noted in part III, supra, the plaintiff has not
responded specifically to the defendants' arguments on this count
but has instead relied upon her factual showing with respect to
the antitrust violations to raise a genuine issue of material
fact with respect to her defamation claim. In addition, the
27 plaintiff has failed to identify any further statements which she
alleges are defamatory.
The AMHA proved the truth of the allegedly defamatory
statements - that the plaintiff defrauded the AMHA by falsely
registering five foals as offspring of Senora - in the state
court action. See Snow, 141 N.H. at 470, 686 A.2d at 1171. As
the court has already noted, that finding is binding on the
plaintiff in this action. The defendants have satisfied their
initial burden of demonstrating the lack of a genuine issue of
material fact and the plaintiff has not satisfied her burden of
demonstrating that a material issue of fact reguires a trial.
Therefore, the court grants summary judgment on the plaintiff's
defamation claim against the defendants in count V.
VI. Due Process Violation
In count VI, the plaintiff alleges that the actions of two
of the defendants, the AMHA and Goodson, seeking prejudgment
attachment of her assets denied her due process rights because
the New Hampshire prejudgment attachment statute, N.H. Rev. Stat.
Ann. ("RSA") § 511-A, is unconstitutional. Specifically, she
contends as follows:
RSA § 511-A as written and as applied by the Superior Courts of this State violates the Fourteenth Amendment of the United States Constitution which
28 prohibits any state from depriving any person of rights, privileges, immunities or property without due process of law by, among other things, failing to reguire the posting of a bond, the use of summary procedures, and the failure to provide sufficient safeguards to ensure that a defendant is not caused unnecessary harm.
Am. Compl., 5 7 9.
The plaintiff's claim arises from the prejudgment attachment
of her assets by the AMHA and Goodson in litigation related to
the Senora foals. In support of her claim, she asserts the
following facts. The AMHA's attachment was obtained during the
course of the Snow litigation already described. Goodson filed
her own lawsuit against the plaintiff in Coos County Superior
Court. See Goodson v. Snow, No. 93-C-60 (1993) . In connection
with that action, Goodson sought and received an ex parte
prejudgment attachment on the plaintiff's bank accounts and real
estate in an amount egual to $500, 000. Goodson's underlying
complaint, however, arose out of two transactions totaling $3,800
in value. Both attachments were still in place as of the filing
of the plaintiff's Amended Complaint.
The defendants allege several additional facts not contested
by the plaintiff. The AMHA's attachment was granted after a
hearing on its application. The plaintiff reguested no bond in
connection with the attachment, did not seek reconsideration of
the attachment order, sought no reduction or discharge of the
29 attachment, and sought no review of the attachment order, either
by specific petition or on her appeal of the case to the New
Hampshire Supreme Court. The plaintiff also failed to avail
herself of similar opportunities for review of Goodson's
attachment.
The defendants argue that the plaintiff's due process claim
must be dismissed because § 511-A is not unconstitutional. They
assert that the plaintiff did not pursue avenues which might have
led to an order that a bond be posted and that the absence of a
bond reguirement in § 511-A is not constitutionally significant.
They contend that the plaintiff has specified neither the
"summary procedures" available under § 511-A that she believes
make it unconstitutional nor the "safeguards" whose absence make
it constitutionally infirm. As noted in part III, supra, the
plaintiff has not responded specifically to the defendants'
arguments on this count but has instead relied upon her showing
of factual issues with respect to the alleged antitrust
violations to raise a genuine issue of material fact with respect
to her due process claim.
The assertions of the plaintiff that raise a genuine issue
of material fact with respect to her antitrust claims fail to do
so for her due process claim. The due process claim is based on
attachments obtained during litigation subseguent to the
30 defendants' alleged antitrust violations. It is factually
distinct from the defendants' alleged antitrust violations and
raises different legal issues. Given the lack of detailed
argument by the plaintiff and her failure to rebut the
defendants' claims that RSA § 511-A is constitutional, the
court's inguiry into the constitutionality of New Hampshire's
prejudgment attachment scheme is circumscribed to the guestion of
whether it obviously fails to meet the minimum reguirements of
due process. C f . Kensington Rock Island Ltd. Partnership v.
American Eagle Historic Partners, 921 F.2d 122, 125 (7th Cir.
1990) ("'A party opposing a summary judgment motion must inform
the trial judge of the reasons, legal or factual, why summary
judgment should not be entered.'"), cited with approval in
Rodriguez-Pinto v. Tirado-Delgado, 982 F.2d 34, 41 (1st Cir.
1993) .
In Connecticut v. Doehr, the Supreme Court of the United
States held that a Connecticut prejudgment attachment statute was
unconstitutional because it authorized prejudgment attachment of
real estate without prior notice or hearing, without a showing of
extraordinary circumstances, and without a reguirement that the
person seeking the attachment post a bond. See 501 U.S. 1, 4
(1991). The court stated that the relevant inguiry for
determining whether a prejudgment attachment statute comports
31 with the requirements of due process is as follows:
[F]irst, consideration of the private interest that will be affected by the prejudgment measure; second, an examination of the risk of erroneous deprivation through the procedures under attack and the probable value of additional or alternative safeguards; and third, . . . principal attention to the interest of the party seeking the prejudgment remedy, with . . . due regard for any ancillary interest the government might have in providing the procedure or forgoing the added burden of providing greater protections.
Id. at 11. Although "the property interests that attachment
affects are significant," id., the Court declined to adopt a per
se requirement that a bond be posted by a party seeking prejudg
ment attachment in every case, see id. at 18-21 (minority of
Court indicating that bond required but majority not reaching the
issue) .
The New Hampshire prejudgment attachment statute, unlike the
statute struck down in Doehr, allows a prejudgment attachment
without a hearing only upon the occurrence of one of a list of
exceptional circumstances. See RSA § 511-A:8. In addition,
"[i]n all cases of attachment made ex parte the court may impose
reasonable conditions thereon and a hearing shall be granted as
promptly as possible upon the subsequent request of a defendant."
Id. This procedure allows the court to impose a bond require
ment .
The court holds that RSA § 511-A is not unconstitutional on
its face and the plaintiff has not demonstrated that its 32 application in this case deprived her of her due process rights.
The plaintiff's failure to rebut the defendants' arguments with
specific facts and legal arguments in support of her position is
fatal to her claim. The court grants summary judgment on the
plaintiff's due process claim in count VI.
Conclusion
For the reasons stated above, the court grants defendant
Wailes' motion to dismiss (document no. 82), ending her role as a
defendant in the case. The court also grants the summary
judgment motions of defendant Goodson (document no. 72) and the
remaining defendants (document no. 73) as to counts III, IV, V,
and VI but denies the motions as to counts I and II.
SO ORDERED.
Joseph A. DiClerico, Jr. District Judge
May 8, 1998
cc: John C. Gage, Esguire Howard B. Myers, Esguire Irvin D. Gordon, Esguire Kevin C. Maynard, Esguire Jack P. Crisp Jr., Esguire