578 F.

2d 1319
44 A.L.R.Fed. 732, 1978-1 Trade Cases 62,078

J. P. BRYAN, Plaintiff-Appellant,
v.
STILLWATER BOARD OF REALTORS, Arlene Barnes, Tom
D. Berry,
Lloyd V. Daugherty, Happy P. Marton, Billie V. Fisher,
Freeman L. Dilbeck, Arthur W. Akerson, Kendall Grindstaff,
Max Hanson, Marsha Teague, Leonard G. Herron, Jr., Paul
Hieronymus, Gene Hoyt, Price Campbell, William Auflegor,
Ken
Garrett, Paul Kerr, Max Koerner, John Duck, Benjamin
Kraybill, C. R. Millard, Kelly P. Powell, Lecil Bickett, C.
Ray Smith, Dwayne R. Wilson and Wendell Stephens,
Defendants-Appellees.
No. 77-1111.

United States Court of Appeals,

Tenth Circuit.
Submitted June 3, 1977.
Decided July 26, 1977.

N. Franklyn Casey, Tulsa, Okl., for plaintiff-appellant.

Carroll F. Pope, Stillwater, Okl., and Burck Bailey of Fellers, Snider,
Blankenship & Bailey, Oklahoma City, Okl., for defendants-appellees.
Before SETH, McWILLIAMS and BARRETT, Circuit Judges.
BARRETT, Circuit Judge.

J. P. Bryan (Bryan) appeals from the order of the district court granting
appellees' Motion to Dismiss complaint and cause of action for failure to state a
claim upon which relief may be granted and for lack of jurisdiction over the

subject matter because the activity complained of ". . . is local and does not
restrain trade or commerce among the several states." (R., Vol. I, p. 77.) The
trial court held that the absence of subject matter jurisdiction (Fed.Rules
Civ.Proc., rule 12(b)(1), 28 U.S.C.A.) and the failure to state a claim upon
which relief may be granted (Fed.Rules Civ.Proc., rule 12(b)(6), 28 U.S.C.A.)
could not be cured by a "more definite statement" or amendment which Bryan
sought in the alternative to file, which request was denied. (R., Vol. I, p. 77.)
2

The parties to this action are residents of the State of Oklahoma. A rule 12(b)
(1) motion is typically employed when (as in the case at bar) there is no
diversity of citizenship between the parties and the claim asserted by plaintiff
does not involve a federal question or when the amount in controversy does not
exceed the required jurisdictional amount. Wright & Miller, Federal Practice
and Procedure, Rule 12, 1350, pp. 542, 543. A rule 12(b)(6) motion to
dismiss for failure to state a claim upon which relief may be granted puts in
issue the legal sufficiency of plaintiff's declaration by admitting all of the well
pleaded facts in the plaintiff's pleadings, thereby taking the position that even if
all of those allegations are true, still no relief is warranted. Wright and Miller,
Federal Practice and Procedure, Rule 12, 1355, 1356, 1357, pp. 587-617.
The test most often applied to determine the sufficiency of the complaint to
state a claim is set forth in Conley v. Gibson, 355 U.S. 41, 78 S.Ct. 99, 2
L.Ed.2d 80 (1957):

.3. . In appraising the sufficiency of the complaint we follow, of course, the accepted
rule that 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.
4355 U.S., at pp. 45, 46, 78 S.Ct., at p. 102.
5

Accord : Jenkins v. McKeithen, 395 U.S. 411, 89 S.Ct. 1843, 23 L.Ed.2d 404
(1969); Bell v. Hood, 327 U.S. 678, 66 S.Ct. 773, 90 L.Ed. 939 (1946); Dewell
v. Lawson, 489 F.2d 877 (10th Cir. 1974); Gas-A-Car, Inc. v. American
Petrofina, Inc., 484 F.2d 1102 (10th Cir. 1973); Jackson v. Alexander, 465 F.2d
1389 (10th Cir. 1972); Franklin v. Meredith, 386 F.2d 958 (10th Cir. 1967);
Fed.Rules Civ.Proc., rule 8(a), 28 U.S.C.A.

On a motion to dismiss, facts well pleaded are taken as correct, but allegations
of conclusions or of opinions are not sufficient when no facts are alleged by
way of the statement of the claim. Fed.Rules Civ.Proc., rule 8(a) (2), 28
U.S.C.A.; Coopersmith v. Supreme Court of Colorado et al., 465 F.2d 993
(10th Cir. 1972); Olpin v. Ideal National Insurance Company, 419 F.2d 1250

(10th Cir. 1969), Cert. denied, 397 U.S. 1074, 90 S.Ct. 1522, 25 L.Ed.2d 809
(1970).
7

With the above rules guiding us, we will now review the Bryan complaint and
pleadings. Bryan set forth in his complaint that: He is a resident of Stillwater,
Oklahoma, and a licensed real estate broker; on July 1, 1970, he established the
Bryan Agency in Stillwater and entered into a real estate brokerage business; he
applied for membership and was accepted in the Stillwater Board of Realtors,
Stillwater Multiple Listing Service, Oklahoma Association of Realtors, and the
National Association of Real Estate Boards; by the end of 1971, the Bryan
Agency was the number two realtor in Stillwater, both in listings and sales; the
Stillwater Board of Realtors is a charitable, benevolent, educational or scientific
corporation composed of an association of real estate brokers, salesmen, and
others engaged in the real estate business in Stillwater; the defendants (other
than Board) are active members of Board; the activities of the Board and its
members are "within the flow of interstate commerce and have an effect upon
that commerce" (R., Vol. I, p. 3.) in that (a) Board members render services
bringing buyers and sellers together re real estate transactions, for a commission
or fee, and arranging for insurance, financing, etc., in the City of Stillwater, (b)
a substantial number of persons "using the services of Board members in
connection with real estate transactions are persons moving into . . . Stillwater .
. . from places outside the State of Oklahoma, and persons moving from
Stillwater to places outside the State of Oklahoma" (R., Vol. I, p. 3); (c)
because of the Board (members) efforts aforesaid, Board members ". . . have
caused substantial amounts of such financing, insurance, commodities and
services to move into the City of Stillwater from outside the State of Oklahoma
from businesses operating in interstate commerce . . . (and) the commissions
and fees charged by Board members for their services have a direct and
substantial effect upon the financing, insurance, commodities and the
businesses which provide them"; that there are distinct advantages of being a
member of the Stillwater Board of Realtors, referred to in subhearings as
Educational Advantages, Multiple Listing Service (advantage), Prestigious and
Confidence Advantages; Professional Recognition, Referral and Marketing
Systems (advantages), and Legislative Representation and Lobby (advantages);
on September 21, 1973, Bryan was "unjustifiably expelled from the Board" (R.,
Vol. I, p. 6.) after exhausting all administrative remedies; on December 23,
1974, Bryan re-applied for membership with Board and even though . . . "he
met each and every criteria of membership" (R., Vol. I, p. 6.), his application
was rejected; and as a result, Bryan has lost all of the aforesaid advantages of
being a realtor, been placed in a severe competitive disadvantage and has had
his business destroyed to extent of reduced revenues of $107,600.00.

In Bryan's prayer for relief in the complaint he requested (1) that the defendants
(hereinafter jointly referred to as Board for convenience) be adjudged in
violation of Sections 1 and 2 of the Sherman Anti-Trust Act, 15 U.S.C.A. 1
and 2 and the Clayton Anti-Trust Act, 15 U.S.C.A. 15, 22 and 26, in that
they did, directly and through combination and conspiracy, monopolize and
attempt to monopolize the real estate business in Stillwater, (2) the issuance of
a permanent injunction restraining Board from engaging in the aforesaid
activities in violation of the antitrust laws of the United States and for an
injunction restraining ". . . the Board and each of its members from denying the
Plaintiff membership in the Board . . ." (R., Vol. I, p. 7.); and, (3) the award of
money damages for treble the amount of actual damages sustained by Bryan,
costs and attorneys fees, and such other relief necessary to prevent such
antitrust violations and to promote competition.

Board filed motions to dismiss with supporting affidavits and memoranda of

law, contending that Bryan's complaint failed to state a claim under rule 12(b)
(6), Supra, and that the Court lacked jurisdiction over the subject matter
because the activity complained of is local and does not restrain trade or
commerce among the states. rule 12(b)(1), Supra. The motions were granted.
Bryan appeals.

10

On appeal, Bryan contends that the trial court erred in granting Board's Motion
to Dismiss. We will consider his arguments in the manner presented.

I.
11

Bryan contends that the trial court erred in granting Board's Motion to Dismiss
based upon his failure to state a claim upon which relief may be granted
(Fed.Rules Civ.Proc., rule 12(b)(6), Supra ) because, (a) the court erroneously
failed to follow the view of the courts that such motions are looked upon with
disfavor in private antitrust actions, and (b) the court erroneously applied the
law to the facts in the case. We disagree.

12

Bryan cites many case authorities for the generally accepted rules that a motion
to dismiss for failure to state a claim is viewed with disfavor, and particularly
so in a private antitrust action. Bryan contends that his complaint meets all of
the commands of Fed.Rules Civ.Proc., rule 8(a), Supra, including the existence
of a conspiracy in restraint of interstate commerce resulting in direct injury to
his business. For purposes of reaching the "in restraint of interstate commerce"
allegation, Bryan argues that the alleged conspiracy is in restraint of (interstate)
commerce because: "First, a substantial number of persons using the services of

Board members in conjunction with real estate transactions are persons moving
into the City of Stillwater from outside the State of Oklahoma, and persons
moving from the City of Stillwater to places outside the State of Oklahoma.
Secondly, as a result of their efforts in arranging for financing, insurance, and
other commodities and services necessary to real estate transactions in the City
of Stillwater, Board members have caused substantial amounts of such
financing, insurance, commodities and services to move into the City of
Stillwater from outside the State of Oklahoma from business operating in
interstate commerce . . . Lastly, Board members have access to national referral
and marketing systems, whereby cooperating broker members split commission
fees in return for early information about a prospective seller or buyer." (Brief
of Appellant, pp. 9, 10.) In like manner, Bryan contends that by reason of denial
of his membership in Board, the Board members practiced a conspiracy upon
him by denying him Board services relating to businesses operating in interstate
commerce. (Brief of Appellant, pp. 10-13.)
13

We agree with Board's contention that Bryan's grievance is clear: He is

aggrieved that his application for membership to Board has been denied and the
target or purpose of his suit is to gain such membership. The complaint does not
contain any factual averments, even by inference, constituting a conspiracy in
restraint of interstate commerce actionable under the federal antitrust laws and
none supporting an unlawful monopoly or attempt to monopolize trade or
commerce. Significantly, although Bryan alleges that He has suffered damages
by reason of business losses resulting from his membership rejection with
Board, he Has not alleged that any member of the public has suffered by reason
thereof and certainly he has not alleged that Board has engaged in price fixing.
The Sherman Act must be construed to serve its object of preserving from
unlawful restraint free competition In interstate commerce. United States v.
Union Pacific Railroad Company, 226 U.S. 61, 33 S.Ct. 53, 57 L.Ed. 124
(1912). It is the rule that in pleading the requisite anti-competitive effect in a
federal antitrust suit, there must be some allegation of ultimate facts sufficient
to show restraint on interstate commerce. Such is lacking here. In Swift and
Company v. United States, 196 U.S. 375, 25 S.Ct. 276, 49 L.Ed. 518 (1905),
the Court held that a combination of dominant dealers in fresh meat embracing
restraint and monopoly of trade Only within a single state insofar as operable
primary transactions were concerned, still constituted restraint of commerce
among the states because the subject matter is Sales of meat ". . . and the very
point of the combination is to restrain and monopolize commerce among the
states in respect to such sales." 196 U.S., at p. 397, 25 S.Ct., at p. 279. The
meat, of course, was destined for interstate sales.

14

In Hopkins v. United States, 171 U.S. 578, 19 S.Ct. 40, 43 L.Ed. 290 (1898) the

Supreme Court observed:

15 act of congress must have a reasonable construction or else there would scarcely
The
be an agreement or contract among business men that could not be said to have,
indirectly or remotely, some bearing upon interstate commerce, and possibly to
restrain it.
171 U.S., at 600, 19 S.Ct., at 48.
16
17

As recently as 1950 the United States Supreme Court, in dictum, reaffirmed the
Hopkins and subsequent Anderson opinions in United States v. Real Estate
Boards, 339 U.S. 485, 70 S.Ct. 711, 94 L.Ed. 1007 (1950). This case involved a
Sherman Act charge of a Price-fixing conspiracy by the Washington, D. C.
Real Estate Board under 3 of the Act. The Court said, Inter alia :

18
Hopkins
v. United States, 171 U.S. 578, 19 S.Ct. 40, 43 L.Ed. 290, and Anderson v.
United States, 171 U.S. 604, 19 S.Ct. 50, 43 L.Ed. 300, are not opposed to this
conclusion. It was held in those cases that commission merchants and yard traders
on livestock exchanges were not engaged in interstate commerce even though the
livestock moved across state lines (cf. Stafford v. Wallace, 258 U.S. 495, 42 S.Ct.
397, 66 L.Ed. 735 (23 A.L.R. 229)) and therefore that the rules and agreements
between the merchants and traders (which included in the Hopkins case the fixing of
minimum fees) did not fall under the ban of the Sherman Act. But we are not
confronted with that problem here. As noted, we are concerned here not with
interstate commerce but with trade or commerce in the District of Columbia.
339 U.S., at p. 492, 70 S.Ct., at p. 716.
19
20

Bryan does not contend that Board is engaged in a price-fixing conspiracy. We

assume, of course, that he would not seek membership in an organization so
engaged.

21

We observe that a price-fixing conspiracy is violative of 1 of the Sherman Act

whether the activity is interstate or intrastate in character. Significantly in
Goldfarb v. Virginia State Bar, 421 U.S. 773, 95 S.Ct. 2004, 44 L.Ed.2d 572
(1975) the Supreme Court held that 1 of the Sherman Act was violated by the
strictly intrastate activity of the State Bar by reason of its publication of a
minimum-fee schedule and by its enforcement by the State Bar, because it
constituted a classic example of price fixing.

22

The factual allegations contained in Bryan's complaint relating to the Activities

of Board which he alleges to constitute a conspiracy in restraint of interstate

trade or commerce miss the mark. This court, in Jewel Tea Co. v. Williams,
118 F.2d 202 (10th Cir. 1941) discussed, by analogy, the need for a nexus
between the movement and the alleged conspiracy:
The mere fact that an anticipated local transaction causes a movement in interstate
23
commerce is not sufficient to constitute the local transaction a part of interstate
commerce. The language of the Supreme Court in Schechter Corporation v. United
States, 295 U.S. 495, 543, 55 S.Ct. 837, 849, 79 L.Ed. 1570 (97 A.L.R. 947) . . . is
apposite:
24 mere fact that there may be a constant flow of commodities into a state does not
'The
mean that the flow continues after the property has arrived and has become
commingled with the mass of property within the state and is there held solely for
local disposition and use . . . Hence, decisions which deal with a stream of interstate
commerce where goods come to rest within a state temporarily and are later to go
forward in interstate commerce and with the regulations of transactions involved in
that practical continuity of movement, are not applicable here.'
118 F.2d, at 207.
25
26

The trial court did not err in granting Board's motion to dismiss Bryan's
complaint based upon his failure to state a claim upon which relief may be
granted.

II.
27

Bryan contends that the trial court erred in granting Board's motion to dismiss
based upon lack of subject matter jurisdiction as authorized under Fed.Rules
Civ.Proc., rule 12(b)(1), Supra.

28

In United States v. Yellow Cab Co., 332 U.S. 218, 67 S.Ct. 1560, 91 L.Ed.
2010 (1947), the Court said:

.29. . Section 1 of the Act outlaws unreasonable restraints on interstate commerce,

regardless of the amount of the commerce affected. United States v. SoconyVacuum Oil Co., 310 U.S. 150, note 59, page 225, 60 S.Ct. 811, 846, 84 L.Ed. 1129
. . .; Apex Hosiery Co. v. Leader, 310 U.S. 469, 485, 60 S.Ct. 982, 84 L.Ed. 1311
(128 A.L.R. 1044). And 2 of the Act makes it unlawful to conspire to monopolize
"any part" of interstate commerce, without specifying how large a part must be
affected. Hence it is enough if some appreciable part of interstate commerce is the
subject of a monopoly, a restraint or a conspiracy. The complaint in this case deals
with interstate purchases of replacements of some 5,000 licensed taxicabs in four
cities. (Chicago, New York, Minneapolis and Pittsburgh) That is an appreciable

amount of commerce under any standard.

332 U.S., at pp. 225, 226, 67 S.Ct., at p. 1564.
30
31

One of the contentions in Yellow Cab, supra, related to Sherman Act charges, i.
e., that taxicabs in each of the cities transported persons between their homes,
offices and hotels, with their luggage, to railroad stations, thus playing an
appreciable part in interstate commerce. The Court put this contention down:

.32. . such transportation is too unrelated to interstate commerce to constitute a part

thereof within the meaning of the Sherman Act. These taxicabs, in transporting
passengers and their luggage to and from . . . railroad stations, admittedly cross no
state lines; . . . None of them serves only railroad passengers, . . . They have no
contractual or other arrangement with the interstate railroads . . . In short, their
relationship to interstate transit is only casual and incidental.
332 U.S., at 230, 231, 67 S.Ct., at 1567.
33
34

This court has adopted Yellow Cab's test of "some appreciable part of interstate
commerce" in relation to a 2 Sherman Act violation. See : Salco Corporation
v. General Motors Corporation, Buick Motor Division, 517 F.2d 567 (10th Cir.
1975).

35

Our court has decided a case both factually and legally analogous to the case at
bar. In Wolf v. Jane Phillips Episcopal-Memorial Medical Center, 513 F.2d 684
(10th Cir. 1975) the trial court granted a motion to dismiss plaintiff-appellant
Wolf's complaint on the identical grounds relied upon by the district court in
the instant case. Wolf, an osteopathic physician practicing in Bartlesville,
Oklahoma, brought suit against the chairman and members of the board of
trustees of Jane Phillips Episcopal Memorial Medical Center for refusing his
repeated requests for membership on the medical staff. He alleged that the
defendants "have agreed, reached some understanding or conspired among
themselves" to restrict membership of the medical staff to medical doctors,
thereby excluding Wolf and preventing him from treating his patients in the
hospital. He claimed this constituted "concerted exclusionary action or group
boycott" which was illegal per se under 1 of the Sherman Act and that his
medical practice involves directly or affects interstate commerce and that
defendants' conspiracy to exclude him seriously restrains competition in
interstate commerce. In rejecting Wolf's contentions on appeal and in affirming
the trial court, we said:

The case most directly in point is Riggall v. Washington County Medical Society, 8
36

Cir., 249 F.2d 266, cert. denied, 355 U.S. 954, 78 S.Ct. 540, 2 L.Ed.2d 530 . . .
There the plaintiff, a physician and surgeon, alleged that the members of the
defendant medical society had conspired to refuse membership to the plaintiff and
that, as a result, he had been prevented in his business from treating as many patients
as would have otherwise sought his services. The court affirmed . . . (the lower
court's dismissal) . . . noting that the treatment of patients who must travel interstate
"does not result in (the plaintiff's) practicing his profession in interstate commerce as
the transportation of such patients is incidental." Id. at 268. Riggall's complaint was
"wholly lacking in allegations essential to a cause of action under the Sherman AntiTrust Act." Id. at 270. We reach the same conclusion in the case at bar; the facts
alleged do not support the proposition that the restraint upon plaintiff's practice
causes more than an insubstantial effect upon interstate commerce.
513 F.2d, at p. 687.
37
And:
.38. . aside from a general allegation that his business involves interstate commerce,
the plaintiff does not suggest that the defendants' conspiracy threatens his purchase
of interstate goods or that the flow of such goods would be affected in any way by
his exclusion from the . . . staff . . . Whatever effect the alleged conspiracy might
have upon interstate commerce in goods purchased by the plaintiff is insubstantial . .
..
513 F.2d, at p. 688.
39
And:
.40. . even were we to concede . . . the interstate character of defendants' business, we
fail to perceive the relevance to the plaintiff's claim that the defendants adopted a
plan, that the plan limited or controlled the membership of the . . . medical staff . . .
and that the plan . . . affected the services which the defendants themselves might
provide. The facts alleged by the plaintiff cannot support the proposition that his
exclusion from the medical staff has affected, or threatens to affect, the defendants,
their hospitals, or through them interstate commerce. The facts do not support the
existence of the requisite nexus between the defendants' conduct and interstate
commerce. (Emphasis supplied.)513 F.2d, at p. 688.
41

Accord : Salco Corp. v. General Motors Corp., Buick Motor Division, supra ;
Spears Free Clinic & Hospital v. Cleere, 197 F.2d 125 (10th Cir. 1952); Sun
Valley Disposal Co. v. Silver State Disposal Co., 420 F.2d 341 (9th Cir. 1969);
Elizabeth Hospital, Inc. v. Richardson, 269 F.2d 167 (8th Cir. 1959).

42

We hold that Bryan's interstate commerce allegations have no logical nexus

with a Sherman Act restraint of interstate trade or commerce; that the Board
and its members are not, in an antitrust sense, engaged in interstate trade or
commerce since the conduct complained of is entirely of a local character; that
nothing contained in Bryan's complaint does other than indicate that the acts
complained of affect a business engaged in interstate commerce; and, finally,
that the complained of conduct does not affect the interstate commerce of such
business.

43

WE AFFIRM.