LEOPOLDO FONTANILLAS, INC. v. LUIS AYALA COLON SUCESORES, INC.No. CIV. 02-2835(SEC).
283 F.Supp.2d 579 (2003)
LEOPOLDO FONTANILLAS, INC. Plaintiff
LUIS AYALA COLON SUCESORES, INC.; et al. Defendants
LUIS AYALA COLON SUCESORES, INC.; et al. Defendants
United States District Court, D. Puerto Rico.
September 24, 2003.
Nelson Rivera-Cabrera, San Juan, PR, Rosanna Bayonet-Tartak, Carolina, PR, for Plaintiffs.
José A. Bague-Soto and Erick A. Tulla, Rivera Tulla & Ferrer, Hato Rey, PR, José L. Gandara, Bauzá & Dávila, San Juan, PR, Daniel Molina-López and Hernando A. Rivera-Diaz, Totti & Rodríguez, Hato Rey, PR, Luis E. Padron-Rosado, Esq., Sanchez Betances & Sifre, P.S.C., San Juan, PR, Ramon A. Torres-Morales, Ponce, PR, for Defendants.
OPINION AND ORDER
CASELLAS, District Judge.
Plaintiff in the above-captioned case has brought suit against several Defendants under the federal antitrust statutes, the
Plaintiff is and has been engaged in the business of stevedoring, loading and unloading cargo from commercial ships in the Port of Ponce, as a Commercial Maritime Agent. Plaintiff alleges that, as part of said enterprise, it had handled all of the loading and unloading for Defendant Puerto Rico Cement Company, Inc. (PRCC) for several decades. Furthermore, Plaintiff states that it had established what it refers to as two "gentlemen's agreements"
Plaintiff alleges, however, that AYACOL, at some point in the recent past, reneged on the above-described agreement and began to attempt to monopolize the market for Commercial Maritime Agents in the Port of Ponce. As part of said attempt, Plaintiff argues, AYACOL breached its agreement with Plaintiff, and tortiously interfered with Plaintiff's contractual relationship with PRCC. As a result, and following the alleged purchase of a controlling interest of PRCC stock by Defendant Cemex, PRCC (and/or Cemex) finally decided to end its business relationship with Plaintiff and give all its business to AYACOL. In addition, Plaintiff alleges that AYACOL conspired with PRCC, Defendant Cemex and Defendant the Port of Ponce
Upon facing Plaintiff's myriad allegations, Defendants have raised a veritable plethora of arguments requesting that the complaint be dismissed in its entirety. We have digested all the issues and will discuss our approach to them while attempting to group them in the most reasonable and efficient manner.
Claims Against Defendant Cemex
First off, we will discuss Defendant Cemex, S.A. de C.V.'s motion to dismiss for lack of personal jurisdiction and for insufficiency of service of process, under Fed. R.Civ.P. 12(b)(2) and (5). We should note that Plaintiff did not bring suit against Cemex, S.A. de C.V., but rather against Cementos de Mexico, S.A. a/k/a Cemex. Defendant Cemex S.A. de C.V. has averred in its motion that there are no corporations under the names Cementos de Mexico, S.A. or Cemex. As such, any claims against these non-existent entities would have to be dismissed. On the other hand, the Court will construe Plaintiff's pleading liberally, and interpret that Plaintiff actually intended to sue Cemex S.A. de C.V.
Now, let us take a look at Defendant Cemex S.A. de C.V.'s argument for dismissal for lack of personal jurisdiction. In order for a court to be able to make a binding decision which conforms with due process, the court must have personal jurisdiction over each party to the case. United States v. Swiss American Bank, Ltd.,
There are two types of personal jurisdiction: general and specific. Mass. Sch. of Law, 142 F.3d at 34; Pritzker v. Yari,
Specific jurisdiction requires a plaintiff to establish two conditions: first, that the forum has a long-arm statute which purports to grant jurisdiction over the defendant; and second, that the court's exercise of personal jurisdiction over the defendant pursuant to that statute would comport with the Constitution's strictures. Foster-Miller, 46 F.3d at 144; Pritzker, 42 F.3d at 60. With regard to this first condition, the Puerto Rico long-arm statute provides in pertinent part that a court in Puerto Rico has jurisdiction over a person not domiciled in Puerto Rico if the action arises because that person "[t]ransacted business in Puerto Rico personally or through an agent" or he "[p]articipated in tortious acts within Puerto Rico." 32 P.R. Laws Ann. app. III, R. 4.7(a)(1) and (2). This statute has been interpreted to include as a "business transaction" the sending of mail to Puerto Rico from another jurisdiction, see Dávila Fermín v. Southeast Bank, N.A.,
In its motion, Defendant Cemex, S.A. de C.V. has stated that it is a corporation incorporated under the laws of the United Mexican States with its principal place of business in Monterrey, Mexico. Furthermore, Defendant avers that it has not, by itself or through any agent: 1) made shipments, sales or deliveries of goods into Puerto Rico; 2) applied for or obtained a license to do business in Puerto Rico; 3) has not maintained any office, place of business, or bank accounts in Puerto Rico; and 4) has not acquired any real property located in Puerto Rico. These facts have not been controverted by Plaintiff, and are supported by unsworn statements under penalty of perjury provided by Defendant with its motion. Under these circumstances, we find that Plaintiff has failed to establish a prima
Standard of Review Applicable to All Other Motions—Fed. R. Civ. P. 12(b)(6)
In assessing whether dismissal for failure to state a claim is appropriate, "the trial court, must accept as true the well-pleaded factual allegations of the complaint, draw all reasonable inferences therefrom in the plaintiff's favor, and determine whether the complaint, so read, limns facts sufficient to justify recovery on any cognizable theory." LaChapelle v. Berkshire Life Ins. Co.,
But "[a]lthough this standard is diaphanous, it is not a virtual mirage." Berner v. Delahanty,
Claims for Tortious Interference with Contractual Relations
Defendants have also moved to dismiss Plaintiff's claims for tortious interference with their contracts. In particular, we understand that these claims refer to Defendants' alleged interference with the two oral agreements between Plaintiff, and PRCC and AYACOL, respectively.
To establish a tortious interference claim, Plaintiff would have to show: 1) the existence of a contract; 2) that the interfering party acted with intent and knowledge of the existence of a contract; 3) that plaintiff suffered damages; and 4) that there exists a causal link between the injury and the interfering party's actions. General Office Products Corp. v. A.M Capen's Sons, Inc., 115 D.P.R. 553, 558-559 (1984). The Supreme Court of Puerto Rico, however, specified that,
In the present case, Plaintiff cannot allege a tortious interference claim against any of the parties. Plaintiff makes no allegations regarding the expiration date or term of duration of the purported "gentlemen's agreements." Hence, such alleged agreements were terminable at will, and no contract right to continue a business relationship existed. Under such circumstances, no cause of action for tortious interference may arise.
Furthermore, in a twist of something between cynical irony and poetic justice, we note that Plaintiff's alleged agreement with AYACOL appears to have been a blatant violation of the very same anti-trust laws whose protection Plaintiff now seeks. From Plaintiff's own allegations and arguments, it can be concluded that Plaintiff and AYACOL had, for several decades, effectively divided the Commercial Maritime Agency market at the Port of Ponce between themselves. The creation and maintenance of such a cartel constitutes a horizontal restraint of trade of the most perverse kind. In fact, these types of restraint are considered per se violations of Section 1 of the Sherman Act, 15 U.S.C. § 1. United States v. Topco Associates, Inc.,
For the foregoing reasons, Plaintiff's claims of tortious interference against all
Misappropriation of Trade Secrets
In Count Six of its complaint, Plaintiff makes a cryptic reference to an alleged misappropriation of trade secrets. However, the rest of the complaint is devoid of any allegations whatsoever regarding what trade secrets were appropriated how and by whom. Under these circumstances, this claim cannot prosper. In any case, the only source of law cited by Plaintiff in support of these claims is the Pick-Barth doctrine. See Albert Pick-Barth Co. v. Mitchell Woodbury Corporation,
Claims for Breach of Contract
Plaintiff alleges claims for breach of contract. Again, the only two contracts to which Plaintiff makes reference in the complaint are the two oral agreements described above between Plaintiff, and PRCC and AYACOL, respectively. With regards to the agreement with AYACOL, we have already explained that said oral understanding constituted, according to Plaintiff's own description of its terms, a per se violation of the antitrust laws. Such an illegal agreement is unenforceable under Article 1207 of the Puerto Rico Civil Code, 31 P.R. Laws Ann. § 3372.
On the other hand, Plaintiff also alleges that it had a valid contract with PRCC whereby it provided PRCC with its services as a Commercial Maritime Agency. However, as discussed above, Plaintiff makes no allegations regarding the expiration date or term of duration of the purported "gentlemen's agreement" with PRCC. Hence, said agreement was terminable at will, and no contract right to continue a business relationship existed. No breach arises, then, from the termination of the contract. Furthermore, Plaintiff has not alleged that PRCC failed to comply with its obligations under the contract, while it was still in effect. In other words, Plaintiff does not claim that PRCC owes any monies for the performance of any type of services under the contract. Consequently, Plaintiff's breach of contract action cannot prosper. For these reasons, Plaintiff's claims for breach of contract must be
Claims Against PRCC
Plaintiff has also brought antitrust claims against PRCC. Let us analyze each type of antitrust claim at a time.
Violations of Section 1 of the Sherman Act—Unreasonable Restraints on Trade
Section 1 of the Sherman Act, 15 U.S.C. § 1 prohibits any contracts, combinations and conspiracies that unreasonably restrain trade or commerce. Plaintiff basically alleges that PRCC conspired with AYACOL and the Port of Ponce in a way which unreasonably restrained free trade in the market for Commercial Maritime Agency. The problem with Plaintiff's argument in this respect is that it basically avers that Defendant PRCC was conspiring against itself by helping AYACOL monopolize a market in which PRCC was a
Plaintiffs factual assertions provide that PRCC was a customer and not a competitor of Plaintiff and that it elected to replace its Commercial Maritime Agent on the grounds that AYACOL offered discounts and other considerations that Plaintiff was not able to give. Plaintiff's allegations are insufficient to sustain an antitrust violation. Id. Instead, Plaintiff's own allegations appear to show the competitive process at work as contemplated by antitrust law.
Moreover, Plaintiff's conspiracy claims are devoid of any reference to any specific allegation regarding a written agreement or even a basis for inferring a tacit agreement between PRCC and the other Co-defendants in pursuit of a contract, concerted action, or conspiracy to violate antitrust laws. See, DM Research, Inc. v. College of American Pathologists,
Violations of Section 2 of the Sherman Act—Monopolization
"Section 2 of the Sherman Act prohibits monopolies in interstate trade or commerce. Conduct violates this section where an entity acquires or maintains monopoly power in such a way as to preclude other entities from engaging in fair competition." TV Communications Network, Inc. v. Turner Network Television, Inc.,
"Specific intent to monopolize is an element of both offenses ... [t]he mere intention to exclude competition and to expand one's own business is not sufficient to show a specific intent to monopolize." Great Escape, Inc. v. Union City Body,
Id. In the present case, there is no possibility that PRCC attempted, intended or actually succeeded in creating or maintaining a monopoly in the Commercial Maritime Agency market; or in the market for stevedoring, loading and unloading of merchandise in the Port of Ponce, because PRCC is not dedicated to such a business and is actually a customer of those providing such a service. As such, it cannot possess monopoly power in the relevant market. For the same reason, PRCC cannot be interested in acquiring monopoly power. As alleged by Plaintiff itself, "PRCC is dedicated to the business of manufacturing, selling and distributing cement and cement related products for the manufacture of which it constantly imports to the Island of Puerto Rico raw material from other jurisdictions." Docket # 1 at ¶ 8. Under these circumstances, the Court must find that Plaintiff has failed to properly allege a claim under Section 2 of the Sherman Act against Defendant PRCC.
Violations of Section 4 of the Clayton Act—Tying Arrangements
Plaintiff also avers that PRCC was involved in "tying arrangements" to unreasonably restrain trade, in violation of Section 4 of the Clayton Act, 15 U.S.C. § 15 (or possibly Section 1 of the Sherman Act). "A so-called tying arrangement exists when a seller conditions the sale of one product or service, the tying product or service, on the buyer's purchase of another product or service, the tied product or service." Leyba v. Renger,
In this case, the complaint is somewhat devoid of any specific factual assertions regarding the alleged tying arrangement between PRCC, AYACOL, and the Port of Ponce. The main body of the complaint is also unclear as to the identity of the other product Plaintiff is referring to when it makes reference to a tying arrangement. However, Plaintiff's prayer for relief provides some type of clue regarding its conclusory allegation of a tying arrangement. Plaintiff requests that Defendants be enjoined from "[t]ying, in any war [sic] or form, the delivery of docking or mooring permits or any other documentation required to moor or dock a commercial cargo ship in the facilities of the Port of Ponce to the assigning of the handling of the Maritime Agency and stevedoring
For all the reasons discussed in this section of this Opinion and Order, and since the same arguments and logic discussed as to the federal antitrust causes of action apply equally with respect to the Commonwealth antitrust law claims, PRCC's motion to dismiss is
Claims Against the Port of Ponce 5
Plaintiff has also brought claims against the Port of Ponce under both the federal and the Commonwealth antitrust laws. As Defendant Port of Ponce points out, however, state action is normally exempted from the reaches of federal antitrust law. Parker v. Brown,
In the case before us, the municipality has invoked its immunity under the state action doctrine and has asserted that the Port of Ponce is no more than an administrative division of the Municipality of Ponce, created through an Ordinance of December 7th, 1911, enacted by the Executive Council of Puerto Rico, one of the legislative bodies of the government of Puerto Rico set up by Section 18 of the Foraker Act, 31 Stat. 81. Pursuant to said Ordinance, which is still valid law and has not been abrogated, a right or franchise was given to the Municipality of Ponce to operate and maintain a pier on the shore-front of the port of Ponce. Furthermore, all property rights, budget allocations and ultimate control over the Port of Ponce was assigned to the Municipality's municipal council, the Municipality's legislative body. As such, Defendant Port of Ponce has effectively established that the Port of
In resolving a motion to dismiss such as the one at bar, "the district court must construe the complaint liberally, treating all well-pleaded facts as true and indulging all reasonable inferences in favor of plaintiff." Aversa v. United States,
Moreover, the federal causes of action against Defendant Port of Ponce may also be dismissed on the merits. With respect to the claim under Section 1 of the Sherman Act, Plaintiff does not make any specific allegations regarding an illegal contract, combination, or conspiracy between the Co-defendants to embark on the unreasonable restraint of trade. "Section 1 of the Sherman Act, in contrast, reaches unreasonable restraints of trade effected by a `contract, combination ... or conspiracy' between separate entities. It does not reach conduct that is `wholly unilateral.'" Copperweld Corp. v. Independence Tube Corp.,
In the present case, Plaintiff only makes bald and repetitive antitrust "conspiracy" assertions against Defendant Port of Ponce, without specific allegations regarding a written or oral agreement between the parties. Neither does Plaintiff provide a basis for inferring a tacit agreement to conspire by alleging conscious parallelism or other facts which could reasonably lead to an inference of collusion, pursuant to the doctrines developed in Interstate Circuit v. United States,
Furthermore, the same logic discussed above with respect to Defendant PRCC applies to Plaintiff's claims against Defendant Port of Ponce based on monopolization and tying arrangements under Section 2 of the Sherman Act and Section
Disposing of the Commonwealth antitrust law claims against Defendant Port of Ponce proves even easier. The Commonwealth's antitrust statute specifically exempts state instrumentalities from application of the statute's provisions. The statute explicitly states that the terms "person" and "persons," as used in the antitrust laws, "shall not include public corporations or state instrumentalities." Law No. 77 of June 25, 1964 at Section 1, 10 P.R. Laws Ann. § 257. Since Plaintiff has failed to contest that Defendant Port of Ponce is either a public corporation or a state instrumentality under the antitrust statute, we find that said statute is inapplicable against this Defendant. Therefore, we find that all claims against Defendant Port of Ponce must also be
Claims Against AYACOL
Finally, we come to Plaintiff's claims against its competitor, AYACOL. First, we should note that our previous discussion regarding the Plaintiff's need to allege an agreement to restrain trade in order to survive a motion to dismiss its claim under Section 1 of the Sherman Act is equally applicable to the claims against Defendant AYACOL as it was to the claims against Defendant Port of Ponce. As we mentioned earlier, "[a]bsent an agreement between two or more independent business entities, there can be no violation of section 1. Neither a conclusory allegation of a conspiracy, nor an allegation of a unilateral business decision, will survive a motion to dismiss." Int'l Television Productions, 622 F.Supp. at 1537.
In the present case, Plaintiff only makes bald and repetitive antitrust "conspiracy" assertions against Defendant AYACOL, without specific allegations regarding a written or oral agreement between the parties. Neither does Plaintiff provide a basis for inferring a tacit agreement to conspire by alleging conscious parallelism or other facts which could reasonably lead to an inference of collusion, pursuant to the doctrines developed in Interstate Circuit,
With respect to the allegations of the existence of a tying arrangement, in violation of Section 4 of the Clayton Act (or possibly Section 1 of the Sherman Act), we must note that the only product or service, relevant to the facts of this case, which Plaintiff avers is sold or offered by Defendant AYACOL is that of Commercial Maritime Agency. Since a tying arrangement requires the existence of two products or services, which are then tied by the producer of said products or services, the Court fails to see how AYACOL could possibly be liable for an illegal tying arrangement. The only possibility that comes to the Court's mind is that Plaintiff is trying to allege that AYACOL and the Port of Ponce are jointly tying each other's products and services, namely the service of Commercial Maritime Agency and the delivery of docking or mooring permits, or any other documentation required to moor or dock a commercial cargo ship in the facilities of the Port of Ponce. However, this argument fails because, where the state action exemption applies and the state's action is immune, an individual cannot be liable for conspiring with the government.
Finally, we must address Plaintiff's claims of attempt to monopolize, and maintenance of a monopoly.
For all the foregoing reasons, Defendants' motions to dismiss are
Also before the Court are the parties' multiple motions regarding the initiation of discovery while the motions to dismiss discussed above were pending (Docket ## 35, 36, 37, 54, 58, 59 and 61).
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