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Catanese Brothers Inc. v. West Deer Township

May 8, 2008

THE CATANESE BROTHERS INC., PLAINTIFF,
v.
WEST DEER TOWNSHIP DEFENDANT.



The opinion of the court was delivered by: Terrence F. McVerry United States District Court Judge

MEMORANDUM OPINION AND ORDER

Now pending is the MOTION TO DISMISS PLAINTIFF'S AMENDED COMPLAINT PURSUANT TO RULE 12(b)(6) (Document No. 6) filed by Defendant West Deer Township ("West Deer"). Both parties have filed briefs (Document Nos. 7, 8) and the motion is ripe for resolution.

Procedural History

The original complaint in this case was filed on November 13, 2007. On February 28, 2008, Defendant filed a Motion to Dismiss or for More Definite Statement. The arguments raised in the original Motion to Dismiss are virtually the same as those now being articulated by West Deer. In response to Defendant's original motion, Plaintiff filed an Amended Complaint on March 19, 2008. Defendant has renewed its Motion to Dismiss, contending that the amendments to the complaint have failed to overcome the shortcomings addressed in this and its original motion to dismiss.

Standard of Review

Federal Rule of Civil Procedure 8(a) requires that a claim contain: (1) a short and plain statement of jurisdiction; (2) a short and plain statement of the claim showing that the pleader is entitled to relief; and (3) a demand for the relief sought. This is commonly referred to as "notice pleading." Federal Rule of Civil Procedure 11(b) states that by presenting a pleading to the court, the attorney is certifying that to the best of that person's knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for discovery.

The standard which governs motions to dismiss was recently amplified by the United States Supreme Court in Bell Atlantic Corp. v. Twombly, 127 S.Ct. 1955 (2007). At a minimum, as all nine justices agreed, the oft-quoted standard that a complaint may not be dismissed "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" has been retired and "is best forgotten." Id. at 1968. The Court explained that a complaint must allege enough "facts" to show that a claim is "plausible" and not merely conceivable. Indeed, the Twombly Court made a distinction between facts that were merely "consistent" with wrongful conduct and facts that would be "suggestive" enough to render the alleged conduct plausible. In particular, the Court upheld dismissal of a complaint which alleged an antitrust conspiracy, despite "stray averments" that defendants had entered into an unlawful agreement, explaining that the plaintiff had alleged "merely legal conclusions." Id. at 1970. The Supreme Court also emphasized the need for district courts to prevent unjustified litigation expenses resulting from claims that are "just shy of a plausible entitlement." Id. at 1967, 1975.

Legal Analysis

The amended complaint is hardly a model of detail. Plaintiff purports to assert claims under the Sherman Antitrust Act, the Clayton Antitrust Act, 42 U.S.C. § 1983, and a Pennsylvania state law claim for tortious interference with contract.*fn1 Plaintiff is a business partnership located in West Deer which was formed by three brothers in 1950. The business has historically provided the public with an automobile full-service station, used car dealership, towing service and automobile salvage yard.

Plaintiff alleges that its activites are "grandfathered" by Ordinance #269, which precludes interference from future zoning regulations. The amended complaint alleges that various West Deer officials have have intentionally inflicted economic harm on Plaintiff by: (1) failing to recognize Ordinance #269 since the year 2000; (2) denying applications for a new salvage yard license without holding a hearing on the merits*fn2 ; (3) filing frivolous citations against Plaintiff*fn3 ; (4) intentionally steering towing business away from Plaintiff; and (5) creating an unlawful competing monopoly outside of West Deer Township by entering into a contract on August 17, 2005 with a towing/salvage company from Harmar Township. The contract requires that the salvaged vehicles be stored at a location within eight miles of West Deer, but outside the Township. The amended complaint is not organized into distinct causes of action, but alleges generally that the conduct of West Deer constitutes antitrust violations, and has deprived Plaintiff of its rights under the First, Fourth, Fifth and Fourteenth Amendments to the United States Constitution. These contentions will be addressed seriatim.

1. Antitrust Claims

Plaintiff contends that Defendant violated the Sherman Antitrust Act and Clayton Antitrust Act by intentionally interfering with Plaintiff's business with citizens and by intentionally creating a monopoly. Defendant argues that the antitrust claims should be dismissed for several independent reasons, including a failure to assert sufficient facts to establish the elements of an antitrust claim and contends that the "state action" exception applies based on the ability of West Deer to regulate Plaintiff's business pursuant to 53 P.S. § 66532(a)(4).

In Gordon v. Lewistown Hospital, 423 F.3d 184, 207 (3d Cir. 2005), the Court explained that the essence of a claim under Section 1 of the Sherman Act is the existence of an unlawful agreement to restrain trade. "Unilateral action simply does not support liability; there must be a 'unity of purpose or a common design and understanding or a meeting of the minds in an unlawful arrangement.'" Id. (citation omitted). "To establish a violation of Section 1, a plaintiff must prove: (1) concerted action by the defendants; (2) that produced anti-competitive effects within the relevant product and geographic markets; (3) that the concerted actions were illegal; and (4) that it was injured as a proximate result of the concerted action." Id.

The amended complaint, as pled, falls far short of alleging a plausible claim under Section 1 of the Sherman Act. The mere fact that West Deer entered into a towing contract with one of Plaintiff's competitors does not establish the requisite "concerted action." The amended complaint reflects no restraint on trade, in that the contract was put up for bid and three bids were received. The Township was merely acting in the marketplace as a consumer of towing services. Brumfield Towing Service, Inc. v. City of Baton Rouge, 911 F. Supp. 212 (M.D. La. 1996). Moreover, there was no impact on interstate commerce, let alone the requisite "substantial" impact, because the contract required towed cars to be stored within eight miles of West Deer Township. The ...


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