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Nature of Suit Code: 410
Nature of Suit: Antitrust
Cause of Action: 

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PUBLISH( ~ ... 

UNITED STA'Jr~S COU~T-bF APPEALS 

.·· -~?,•··. 

FOR. 'fflE TENTH C1IRCUIT 

MONUMENT BUILDERS OF GREATER ) 

KANSAS CITY, INC. , . ), 

) 

Plaintiff-Appellant, ) 

; ), 

v. ) 

i ): 

AMERICAN CEMETERY ASSN. OF ) 

KANSAS, CEMETERY ASSN. OF ) 

MISSOURI, JAS. H. MATTHEWS & CO., ) 

SHAWNEE MISSION MEMORY GARDENS, ) 

PLEASANT VIEW CEMETERY, CITY OF ) 

OLATHE, KANSAS dba Olathe Memorial ) 

Cemetery, MOUNT MUNCIE CEMETERY, ) 

MOUNT CALVARY CEMETERY, CATHOLIC ) 

CEMETERIES, ARCHDIOCESE OF ) 

KANSAS CITY, KANSAS dba ) 

Mount Calvary Cemetery (Kansas ) 

City, KS) dba Saint John's ) 

Cemetery (Kans-as City, KS) dba ) 

Saint John's Cemetery (Lenexa, ) 

KS) dba Saint. Joseph Cemetery ) 

dba Resurrection Cemetery, ) 

HERITAGE-PARKS, INC. dba ) 

Memorial Park Cemetery and ) 

Sunset Memorial Gardens of ) 

Kansas City, Kansas, ) 

MAPLE HILL CEMETERY COMPANY, ) 

HIGHLAND PARK C_EMETERY AND ) 

CHAPEL MAUSOLEUM, INC. dba ) 

Highland Park Cemete~y, ) 

CHAPEL HILL MEMORIAL GARDENS, ) 

INC., MEMORIAL HERITAGE, INC. dba ) 

Barry Memo~ial Gardens dba ) 

White Chapel Memorial Gardens dba ) 

Summit Heights Memorial Gardens ) 

dba Johnson County Memorial ) 

Gardens, D.W. NEWCOMER'S SONS ) 

dba Floral Hills Funeral ) 

Horne and Cemetery dba Floral Hills ) 

East Cemetery dba Cameron ) 

Memory Gardens, WOODLAND CEMETERY ) 

OF INDEPENDENCE, MISSOURI, 1 

. __ .,;,-FILED>· (1riitfrii" Scatf!S COlJrt of Appeals 

Tefl.t,h Ci:-:Uit 

D£bl9 19B9 

Appellate Case: 86-1497 Document: 010110191876 Date Filed: 12/19/1989 Page: 1 
TEMPLE B'NAI JEHUDAH dba ) 

Rosehill Cemetery, MOUNT ) 

WASHINGTON CEMETERi, a benevolent ) 

corporation, CATHOLIC CEMETERIES ) 

ASSN. OF KANSAS CITY--ST. JOSEPH ) 

INC.· dba Resurrection Cemetery of ) 

North Kansas City dba Mount ) 

Olivet Cemetery Assn. dba Mount ) 

Saint Mary's Cemetery Association,.) 

REORGANIZED CHURCH OF JESUS CHRIST) 

OF LATTER DAY SAINTS dba Mound ) 

Grove Cemetery, GLENDRIDGE ) 

CEMETERY, INC., LINCOLN CEMETERY, ) 

INC., MEMORIAL PARK CEMETERY ) 

ASSN. OF MISSOURI dba Green Lawn. ) 

Cemetery dba Memorial Park ) 

Cemetery, TROOST AVENUE CEMETERY ) 

co. dba Forest Hill Cemetery dba ) 

Calvary Cemetery, ELMWOOD ) 

CEMETERY, EAST SLOPE MEMORIAL ) 

GARDENS CEMETERY, THE BROOKING ) 

CEMETERY ASSN~ dba Brooking ) 

Cemetery, BLUE RIDGE LAWN ) 

CEMETERY, INC. dba Blue Ridge ) 

Lawrt Memoriaf Gardens, ) 

HIGHLAND SALES & INV. CO., INC. ) 

dba Highland Cemetery, ·) 

MOUNT MORIAH CEMETERY, INC. ) 

dba Mount Moriah Cemetery South ) 

dba Mount Moriah Terrace Park, ) 

SUNSET MEMORY GARDENS OF ) 

LEAVENWORTH, and all others ) 

similarly situated, and ) 

OAK LAWN MEMORIAL GARDENS, ) 

) 

Defendants-Appellees. ) 

Appeal from the United States District Court 

for the District of Kansas 

(D.C. No. 84-2469-S) 

Edward Ray Fechtel, of Ray Fechtel, P.C., Eugene, Oreg9n, for 

Plaintiff-Appellant. 

Edward M. Dolson (Roy R. Darke with him on the brief) of Dietrich, 

Davis, Dicus, Rowlands, Schmitt & Gorman, .Kansas City, Miss~uri, 

for Defendant-Appellee City of Olathe. 

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Appellate Case: 86-1497 Document: 010110191876 Date Filed: 12/19/1989 Page: 2 
Stephen w. Armstrong of Montgomery, McCracken, Walker & Rhoads, 

Philadelphia, Pennsylvania, (David H. Marion and Bruce C. Johnson, 

of Montgomery, McCracken, Walker & Rhoads, Philadelphia, 

Pennsylvania, and John C. Monica of Shook, Hardy & Bacon, Kansas 

City, Missouri, for Defendant-Appellee American Cemetery 

Association; and David E. Everson, Jr. of Stinson, Mag & Fizzell, 

Kansas City, Missouri, for Defendants-Appellees Mount Moriah · Cemetery, Inc. and Chapel Hill Memorial Gardens, Inc. and various 

other Defendants-Appellees with him on the brief). 

M. Duncan Grant of P~pper, Hamilton & Scheetz, Philadelphia, 

Pennsylvania (Edward w. Madeira, Jr. and Sean P. Wajert of Pepper, 

Hamilton & Scheetz, Philadelphia, Pennsylvania, and John L. Vratil 

of Lathrop, Koontz & Norquist, Overland Park, Kansas, with him on 

the brief)_ for Qefendant.:...Appellee Jas. H. Matthews & Co. 

Michael J. Gallagher of Wassberg, Gallagher & Jones, Kansas City, 

Missouri· (Thomas M. Franklin of Wassberg, Gallagher & Jones, 

Kansas City, Missouri, and Charles D. Kugler of Vasos, Kugler & 

Dickerson, Kansas City, Kansas, for Defendants-Appellees Memorial 

Heritage, Inc. and D-W Newcomer's Sons; and Bernard J. Rhodes of 

Gage & Tucker, Kansas City, Missouri, for Defendants-Appellees 

Mount Washington Cemetery and The Broqking Cemetery Association, 

and various other Defen~ants-Appell~es, with him on the brief). 

Before SEYMOUR.and MCWILLIAMS, Circuit Judges, and BOHANON,* 

District Judge. 

SE1MOUR, Circuit Judge. 

* The Honorable Luther L. Bohanon, Senior Judge fo~ the United 

States District Court for the Western District of Oklahoma, 

sitting ·by designation. 

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Appellate Case: 86-1497 Document: 010110191876 Date Filed: 12/19/1989 Page: 3 
Plaintiff Monument Builders of Greater Kansas City, Inc. is a 

trade association of independent grave marker builders and 

d~alers. It brought this suit in the district of Kansas on behalf 

of several independent deal~rs in the K~nsas City area against a 

large number of local cemeteries, two local. c'emetery associations, 

a national cemetery association, and a national manufacturer of· 

bronze monuments. In its complaint, Monument Builders alleges 

that defendants conspired to engage in various anti-competitive 

practices in violation of sections 1 and 2 of the Sherman Act~ 

15 u.s.c. §§ 1, 2 (1988). The district court dismissed the claims 

against a number ·of defendants located in Missouri on the basis of 

improper venue in the district of Kansas. It dismiised the 

remaining defendants under Federal ·Rule of Civil Procedure 

12(b)(6) for failure to state a claim under either sedtion of the 

Sherman Act. It also awarded certain defendants attorneys fees 

under R~le 11. Monument Builders of Greater Kansas City~ Inc. v. 

American Cemetery Assn., 629 F.Supp. 1002 (b. Kan. 1986). We 

reverse the dismissal for lack of venue and failure to state a 

claim, and reverse in part the awards of fees. 

I.. 

In reviewing a dismissal under Rul~ 12(b)(6), we must accept 

all the allegations in tne complaint as true. See Perington 

Wholesale, Inc. v. Burger King Corp., 631 F.2d 1369, 1371 (10th 

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Appellate Case: 86-1497 Document: 010110191876 Date Filed: 12/19/1989 Page: 4 
Cir. 1979). What follows is a description of the complaint viewed 

through this forgiving lens.· 

At the heart of Monument B~ilders' complaint is a conspiracy 

among the various defendants to drive independent sellers of grave 

markers out of the market by forcing purchasers of cemetery plots 

to buy their marker from the cemetery of their choice. This plan 

has been ·implemented through a variety of anti-competitive 

devices, taking two primary forms: an outright prohibition by 

cemeteries against the installation of markers not purchased from 

the cemetery, and various surcharges assessed against customers 

who choose to purchase their markers from an. independent dealer .. . . ( 

For example, a cemetery might charge- a plot purchas'er who chooses 

• not to buy the marker from the cemetery a high ,fee for 

installation of the marker or for care and upkeep of the marker. 

Thua a persdn desiring to buy a plot in a particular cemetery is 

either prohibited outright from purchasing a marker elsewhere, or 

is faced with prohibitively expensive surcharges which would not 

be assessed if the marker were p~rchas~d from the cemetery. 1 

1 Although these allegation~ form the focus 6f the complaint, 

they are not an exhaustive de~cription of the practices with which 

defendants are ·charged. Monument Builders also alleges that some 

cemeteries req~ire br9nze monuments to be composed 0of a certain 

alloy, and require customers desiring to ihstall bronze monuments 

purchased elsewhere to have their marker tested at an independent 

laboratory. It also charges defendants with refusing to state th~_ 

prices of markers separately from the prices of plots; assessing 

recording and bookkeeping fees not assessed against 6ther 

customers; depriving customers of independent dealers of certain 

services that they perform for other customers, such as providing 

grave locations -upon request·; and imposing a variety of other 

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Appellate Case: 86-1497 Document: 010110191876 Date Filed: 12/19/1989 Page: 5 
Monument Builders brought its suit against thirty cemetery 

owners in the Kansas City area, thirteen of which own cemeteries 

only in Kansas, sixteen·of which own cemeteries only in Missouri, 

and. one of which owns cemeteries in both states. According to the 

complaint, approximately· 70-75% of interments each year in the· 

Kansas City area take place in these cemeteries. Monument 

Builders also sued the American, Kansas, and Missouri Cemetery 

As~ociations, and Jas. H. Matthews, Inc., a national manufacturer 

of htonze markers. 

Count I of the complaint, brought against all defehdant~ 

except Matthews, all~ges that the local cemeteries horizontally 

conspired to en~age in the anti-competitive practices described 

above, and that the practices constituted a tying arrangement that 

unreasonably restrained trade in violation of section l of the 

Sherman Act. In c6unt II, Monument Builders alleges that Matthews 

and the local and national cemetery associations conspired with 

the cemete~y operators by advising, coordihating, and encouraging 

them to implement the challenged ~ractices. In Count III, 

·Monument.·Builders alleges that all the previously described 

conduct constitutes a "conspiracy and/or attempt" by all 

defendants to monopoliz~ in vidlation of .section 2 of the Sherman 

Act. 

lesser burdens on customers of independent dealers. 

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Appellate Case: 86-1497 Document: 010110191876 Date Filed: 12/19/1989 Page: 6 
After granting Monument Builders leave to amend its 

complaint, the district court dismissed with prejudice a number of 

Missouri cemetery operators for lack of venue. The court fpund 

that these defendants did not "reside" or "do business" in the 

district of Kansas for purposes of the antitrust venue statutes, 

15·0.S.C. §§ 15, 22 (1988), and that Monument Builders' claim 

against thes~ defendants did not "arise'' in the district of Kansas 

for purposes.of the general federal question venue statute, 28 

u.s.c. § 1391 (1982). It dismissed defendant D.W. Newcomer's Sons 

as an improper party. 

Finally, the co~rt dismissed the remaining defendants for 

failure to state a claim. The court held the allegations of 

conspiracy to be too vague and conclusory. Although the complaint 

alleged that defendants possessed 70-75% of the burial market, the 

ciourt held the allegation& of market power to be insufficient to 

support a claim of "forcing" with respect to the tying claim or of 

"dangerous probability of success" with respect to the attempted 

monopolization claim. The court.bas~d this holding both on ihe. 

dilution of the market percentage by the dismissal of the Missouri 

defe~dants and on the lack.of allegations concerning the market 

power possessed by individual defendants. The court also 

dismissed any claim for damages 

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Appellate Case: 86-1497 Document: 010110191876 Date Filed: 12/19/1989 Page: 7 
against the City of Olathe 2 based on the Local Government 

Antitrust Act of 1984, 15 U.S.C. §§ 34-36 (1988), which immunizes 

local governments from damages liability in federal antitrust 

cases. 

The court awarded attorneys-fees in favor of various 

defendants based on the insufficiency of the complaint, the lack 

of venue, Monument Builder's claim against an improper party, and 

the bringing of a damages claim against an immune city government. 

Monument Builders appeals the dismissals for want of venue and for 

failure to. state a claim_utider Rul~ 12(b)(6), and the resulting 

sanctions. 3 We addr~ss each clai~ of error in turn. 

II. 

VENUE 

The di~trict court granted ~he motions of twelve Missouri 

defendants to dismiss for lack of venue, concluding that none of 

these defendant corporations -resided or transacted business in 

Kansas and that the alleged antitrust violation~ ~id not occur in 

Kansas. The unusual circumstances of this case create a difficult· 

2 The City was sued as an owner and operator of a local 

cemetery. 

3 Plaintiff appeals neither the.dismissal of D.W. Newcomer's 

Sons as an improper party, nor the dismissal of damage claims 

against the City of Olathe. 

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Appellate Case: 86-1497 Document: 010110191876 Date Filed: 12/19/1989 Page: 8 
venue issue. We conclude, however, that the court's dismissal of 

the Missouri defendants for lack of venue was in error. 

After accepting affidavits, the district court held that the 

Missouri defendants were not inhabitants of Kansas and were 

neither found in Kansas nor transacting business there within the 

meaning of sections 44 and 12 5 of the Clayton Act. Monument 

Builders, 629 F. Supp. at 1005-06 (relying on United States v. 

Scophony Corp., 333 U.S. 795, 807 (1948))~ Monument Builders does 

not contest -this portion of the decision. Instead, it contends 

that the general venue statut~, 28 u.s.c. § 139l(b), ~hich 

provides for·venue in the distri6t wher~ the claim arose, 

suppiements the Clayton Act and can provide for venue in 

situations where the provisions of the Clayton Act alone would 

4 

q[A]n~ person who shall be injured in his business 

or property by reason of anything forbidden in the 

antitrust laws may sue therefor in any district court of 

the United States in the district in which the defendant 

resides or is found or has an agent, without respect to 

the amount in controversy, and shall recover threefold 

the damages by him sustained, and the cost of suit, 

including a reasonable attorney's fee." 

15 u.s.c. § 15(a) (1988). 

5 

"Any suit, action, or proceeding under the 

antitrust laws against a cor~~ration may be brought not 

only in the judicial district whereof it is an 

inhabitant, but also in any district wherein it may be 

found or transacts business." 

15 u.s.c. § 22 (1988). 

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Appellate Case: 86-1497 Document: 010110191876 Date Filed: 12/19/1989 Page: 9 
not. The Missouri defendants agree, Supplemental Brief of 

Missouri Appellees at 10, as they must, because we have long 

recognized that· special venue statutes in general, and section 12 

of the Clay~on Act in particular, are supplemented by the venue 

provisions applicable to all civil cases. Board of County. 

Comm'rs. v. Wilshire Oil Co., 523 F.2d 125, 130 (10th Cir. 1975); 

15 C. Wright, A. Milier & E. Cooper, Federal Practice & Procedure 

§ 3818 at 175 (2d ed. 1986) ("[I)t is now clear be~ond any doubt 

that the general venue statutes apply to antitrust cases.''); cf. 

Pure Oil Co. v. Suarez, 384 U.S. 202, 204-05 (1966) (special venue 

statutes are supplemented by more liberal general venue statute, 

_abserit specific contrary_indication). 

The district court referred to the general venue statute in a 

paragraph addressing the motions of some of the Missouri 

defendants, but held that ~enue does not exist because "plaintiff 

has not sufficiently alleged or proven facts .which even infer 

[sic] that the violation of the antitrust laws by these two 

defendants occurred in Kansas." Monument Builders, 629 F:Supp. at 

1006. However, the court also stated that "the ultimate ti:st is 

whether these defendants are engaged in the 'practical, everyday 

business or commercial concept of doing or carrying on business 

"of any substantial character"' within the district." Id. at 1005 

(quoting United States v. Sdophony Corp., 333 U.S. 795, 807 

(1948)). When it addressed the claims of the majority of the 

defendants, the district court explicitly applied only the 

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Appellate Case: 86-1497 Document: 010110191876 Date Filed: 12/19/1989 Page: 10 
Scophony test. In 1948, the general venue statute was narrower 

than the venue provisions of the Clayton Act, making Scophony· the 

most expansive test by which a plaintiff could establish venue. 

The 1966 amendment to the g~neral statute broadened the relevant 

standard by providing for venue in the district where the claim 

arose. Consequently, Scophohy can no longer be described as the 

ultimate test. 

Monument Builders arg~es that under the circumstances of this 

case,. its claim against the Missouri defendants arose in Kansa$ 

within the meaning of section 139l(b), the general venue statute. 

The ~is sour i defendants respond that because th_e sale of. grave 

sites involves the sale of real property which'by definitio~-

occurs at a specific place, the claim could ohly arise at the 

place oj sale. Since they sold grave sites only in Missouri, they 

argue that any clai~ against them must have ari~en in Missouri. 

Monument Builders' claim, however, is not that the sale of each 

grave site injured it in a way in which a federal court can grant 

relief. Rather, its claim is founded upon the allegation that 

through an illegal agreement or conspiracy, the Karisas and 

Missouri cemeteries in the greater Kansas ctty area are adversely 

affecting consumer welfare by foreclosing competition in the 

market for grave marker sales and installation. Monument 

Builders' claim arises because it has allegedly been foreclosed 

from competing in that market and is therefore granted the power 

to sue, in a fashion similar to a private attorney general, under 

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Appellate Case: 86-1497 Document: 010110191876 Date Filed: 12/19/1989 Page: 11 
the federal antitrust statutes. The claim arises not from an 

individual cemetery's sale of graves, but from the alleged illegal 

conduct's adverse impact on consumer welfare within the relevant 

market. Because this market covers both Kansas and Missouri, the 

alleged antitrust violation occurs in both Kansas and Missouri.' 

We begin our inquiry· into the appropriate venue for such a 

claim by briefly outlining the development and interpretation of 

the relevant venue statutes. Prior to 1966, ~he general venue 

provisions for federal question cases permitted a plaintiff to 

bring suit only in the district where the defendant resided. The 

venue proyisions in the Clayton Act were "designed to aid 

plaintiffs by giving them a wider cholce of ven~es, and thereby to 

secure a mbre ~ffective, because more convenient, enforcement of 

antitrust prohibitions." United States v. National City Lines, 

Inc., 334 U.S. 573, 586 (1948); Wilshire Oil .Co., .523 F.2d at 130 

("It is . the purpose of 15 U.S.C. § 22 to liberalize rather 

than restrict venue in antitrust actions ."-) .. This 

expansion of venu~ was not limitless. Congress took care not to 

grant antitrust 

"plaintiffs the power to bring suit and force trial in 

districts far removed from the places where the company 

was incorporated, had it~ headquarters, or carried on 

its business •••. Congress was not willing to give 

plaintiffs free rein to haul defendants hither and yon 

at their caprice ••.. _But neither was it willing to 

allow.defendants to hamper or defeat effective 

enforcement by claiming immunity to suit in the 

districts where by a course of conduct they had violated 

the Act with the resulting outlawed consequences." 

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Appellate Case: 86-1497 Document: 010110191876 Date Filed: 12/19/1989 Page: 12 
National City Lines, 334 U.S. at 588. 

In 1966, Congress amended the general venue statute, 

expanding th~ available forums in all.federal question cases. 

Unlike the special antitrust venue statute, which was designed to 

aid plaintiffs, this amendment was designed to make federal 

litigation more convenient for all parties •. The Court explained 

the effect of the amendment as follows: 

"There have been ••• occasional gaps in the venue 

laws; i.e., cases in which the federal courts have 

jurisdiction but there. is no district in which venue is 

proper. One such gap arose in connection with cases 

involving multiple plaintiffs and .defendants. Venue was 

fixed at the residence of the defendant • • • •. When 

there were multiple •.• defendants, ihe district of 

residence for venue purposes was the districts 

where ••. all the defendants reside. If they resided 

in diff.erent districts then there was no proper venue. 

In·l966 Congress acted to close the gap with a provision 

authorizing suit where 'the claim arose,' which in most 

cases provides a proper venue even in multiple-party 

situations. The development supports the view that 

·congress does not in gener~l intend to create venue 

gaps, which take away with one hand what Congress has 

given by way of jurisdictional grant with the other. 

Thus, in construing venue statutes it is reasonable to 

prefer the construction that avoids leaving· sue~ a gap." 

Brunette Mach. Works, Ltd. v. Kockum Indus., Inc., 406 U.S. 706, 

710 n.8 (1972) (citations omitted).· 

In Leroy v. Great Western United Corp., 443 U.S. 173 (1979), 

the Court addressed the limits of the 1966 venue expansion and 

held that it did not close all venue gaps. The Court stated that 

the plaintiff's desire to bring only one suit in a local forum was 

not necessarily sufficient to create venue under section 139l(b)·, 

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443 U.S. at 183, and that the limits of the expanded general venue 

statute were to-be determined without reference to the convenience 

of the plaintiff, see id. at 185. 

Nonetheless, the Court.left open the possibility that unusual 

cases might exist in which a plainiiif w~uld hav~ a choice of 

venue because the claim arguably arises in more than one district. 

"[I]n the unusual case in which it is not clear that the 

claim arose in only one specific district, a plaintiff 

may choose between those _two (or conceivably even more) 

districts that with approximately equal plausibility--in 

terms of the availabili~y of witnesses, the 

accessibility of other relevant evidence, and the 

convenience of the defendant (but not·of the 

plaintiff) may be assigned as the locus of the 

claim." 

Id. at 185. In one iuch case, ~he Fifth Cirbuit asserted thit 

''[i]t is often impossible to isolate one judi~ial distri~t as the 

district where the claims arose. Recent jurisprudence has 

reco~nized such difficulties, consistently holding that_ the 

exercise of determining the single district ~here the claim arose 

is sometimes unnecessary and unrealistic." Checki v. Webb, 785 

F.2d 534, 537 (5th Cir. 1986). 

Thi~ is also such an unustial case~ Applying the principles 

discussed above, we conclude that venue is pro~er in Kansas. 

Courts have recognized that venue may be "equally 'coirect' in 

other judicial districts, while. determining that venue was proper 

in their own districts." Checki, 785 F.2d at 538 .. Although venue 

would be appropriate against the Missouri defendants in a Missouri 

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Appellate Case: 86-1497 Document: 010110191876 Date Filed: 12/19/1989 Page: 14 
district court, we believe that venue is also appropriate in the 

district of Ransas, based on the factors set out in Leroy, 443 

U.S. at 185. 

Thus, independent dealers and defendant cemeteries are both 

located in and, reading the complaint in the light most favorable 

to Monument Builders, attract customers from the Kansas City 

metropolitan area~ This area happens ~o be divided by the Kansa~/ 

Missouri state line, but it nonetheless appears to be the relevant 

geographic market for the products and services at issue in this 

case. 6 The availability of witnesses and the accessibility of 

relevant evidenqe argue as pla~sibly for ~enue in Kansas as in 

Missouri. Inde~d, at oral argument, counsel for th~ Missouri 

defendants admitted that his clients would suffer virtually no 

hardship if required to proceed in Kansas. In addition, these 

defendants have never.suggested-that. a Missouri district court (or 

any other foi that matter) would be a superior forum in ·which to 

try this case. On the contrary, the Kansas defendants could have 

raised identical arguments had Monument Builders filed the case in 

Missouri. The thrust of defendants' argument is·that the venue 

statute requ~res two separate suits in this situation. However, 

they·are unable to articulate any reason why two identical, 

6 At this stage, we are not determining the relevant market for 

substantive antitrust law purposes. Monument Builders' allegation 

in its complaint that the greater Kansas City area is the relevant 

geographic market should be presumed corr~ct for venue purposes at 

· this early stage in the proceedings, especially absent a contrary 

assertion by the Missouri defendants. 

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Appellate Case: 86-1497 Document: 010110191876 Date Filed: 12/19/1989 Page: 15 
simultaneous suits should be required here, and their 

interpretation of the venue statute would leave a gap requiring 

duplicative litigation in at least two separate suits, a result 

Congress has clearly attempted to avoid. In sum~ the claim can 

rationally be said to have arisen in Kansas as well as Missouri, 

and the factors the· c·ourt· articulated in Leroy do not indicate 

that the statute should be interpreted to forbid venue in Kansas 

. 7 . under the unique facts of this case .. we thus conclude that venue 

exists as to all defendants. 

III. 

DISMISSAL FOR FAILURE TO STATE A CLAIM 

The district court found plaintiff's· allegations of 

conspiracy and of market power to be insufficient. Both of these 

concepts are. critical to all of plaintiff's claims. Federal Rule 

of Civil Procedure 8(a}(2} requires. that a complaint contain ''a 

short and plairi stat~ment of the claim showing that the pleader is 

7 If it later becomes apparent ~hat persons residing in Kansas 

do not venture to Missouri to purchase cemetery plots, nor 

Missourians to Kansas, .then the complexion of the suit would 

change. The court would then be faced with two distinct markets 

having different ~elevant characteristics. Completely different 

sets of evidence might be applicable to an evaluation of Monument 

Builder's claims. If this indeed proves to be the case, it might 

to appropriate under section 139l(b} to allow this suit to proceed 

against only the Kansas defendants. See 15 c. Wright, A. Miller & 

E. Cooper, Federal Practice and Procedure§ 3827 at 275-76 (2d ed. 

1986). At this early stage in the proceedings, we need not 

address this issue. · · 

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Appellate Case: 86-1497 Document: 010110191876 Date Filed: 12/19/1989 Page: 16 
entitled to relief." The purpose of a modern complaint is ''to 

give opposing parties fair notice of the basis of the claim 

against them so that they may respond to the complaint, and to 

apprise the ·court of sufficient allegations .to allow it tci 

conclude, if the allegations are proved, that the claimant has a. 

legal right to relief." Perington Wholesale, 631 F.2d at 1371. 

To dismiss under Rule 12(b)(6), "The trial court must conclude 

'beyond doubt that the plaintiff can prove no set of facts in 

support of his claim which would entitle him to relief.'" Id. at 

1372 (quoting Cqnley v. Gibson, 355 U.S. 41, 45-46 (1957)). With 

the above standards i~ mind, we address in turn the sufficiency of 

the counts charged in the·complaint. 

A. Conspiracy to Restrain Trade. 

~n Count I, Monument Builders charges defendant cemeteries 

and cemetery associations with a horizontal conspiracy to restrain 

trade in violation of .section 1 of the Sherman Act. We must 

determine whether the complaint makes ~ufficient allegations of 

conspiracy, and whether it alleges illegal practices under section 

1 . 

"The pleading standard set by Rule 8(a)(2) does not 

change from case to case ~ ... However, while 

the pleading standard does not vary, what 

constitutes sufficient notice to enable a defendant 

to formulate a responsive pleading does change from 

case to case. To provide adequate notice, a 

complaint in a complex, multi-party suit may 

require more information than a simple, single 

party case." 

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Appellate Case: 86-1497 Document: 010110191876 Date Filed: 12/19/1989 Page: 17 
Mountain View Pharmacy v.-Abbott Laboratories, 630 F.2d 1383, 

1386-87 (10th Cir. 1980). In Mountain View~ which defendants cite 

h~avily, we dismissed portions of a multi-party antitrust 

conspiracy complaint as inadequate .. rhe differences between the 

Mountain View complaint and that filed by Monume~t Buirders are 

striking. The plaintiffs in Mountain View sued a large number of 

drug companies for -unfair trade practices in relation to certain 

products. In none of their claims· did the plaintiffs specify 

which defendants and products were involved with which practices. 

For example, the allegations of a tying artangement did "not 

identify the offending defendants, the injured parties, the tied 

products, or the tying products." Id. at 1387. · The a·11egations 

of price fixing similarly: failed to specify which ·of the 

twenty-eight defendants fixed price~ on which of _the·hundieds of 

products the defendants collectively manufactured. Id.· at 1388. 

The complaint in this case does not approach this level of 

imprecision. Monument Builders specifies the tied product, the 

tying product, and provides a lengthy list of allegedly 

an~i-competitive practice~ defendant ce~eteries agree~ to ptit into 

effect.· See Amended Complaint, rec., voL VI, doc •. 223, at 11-17. 

In this respect,. the complaint is much more like the one we 

appioved in Perington Wholesale, where we found it enough that 

~the conduct complained of ••. [was] adequately specified, and 

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( 

the allegation of conspiracy related to that conduct." 631 F.2d 

· at 1372. 

Defendants protest that the allegations of conspiracy are 

conclusory in that the complaint fails to specify facts 

constituting direct evidence of an agreement connecting individual·. 

defendants, either directly or inferentially, to the 

implementation of the conspiracy. See Brief filed by Appellees 

American Cemetery Association, Mount Moriah Cemetery, and,Chapel 

~ill Memorial Gardens at 17-20. However, ''[w]hether the 

allegation is called conclusory, as it is, or factual, as it is 

~lso, is n6t determinative.~ Perington Wholesale, 631 F.2d at 

1372; What is determinative is whether ·

11 [in] this case it cannot 

be said that defendants did not have fair notice of [Monument 

Builders'] claims, or that beyond doubt the plaintiff would be 

unable to prove the claim of conspiracy." Id. 

Defendants' assertion that further specific facts are needed 

t6 make this complaint suf~icient to state a clai~ is contrary_ to 

the substantive law of antitrust conspiracy as well as modern 

federal pleading standards. It is well accepted that conspiracy 

may be proven by circumstantial evidence. See 2 J. Von 

Kalinowski, Antitrust Laws & Trade Regulation, § 6.01[3l[a][i] at 

6-29 (1989). Although defendants are correct in pointing out that 

parallel b~havior alone does not set out a claim of conspiracy, 

parallel behavior·may support such a claim when aug~ented by 

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( 

"additional evidence from which an understanding among the parties 

may be_ inferred." Id. § 6. 01 [ 3 ][a][ ii] at 6-36. Such evidence 

may include a showing that the parties "are acting against their 

own individual business interests, or that there is motivation to 

enter into an agreement requiring parallel behavior." Id. at 6-

-- 7 8 j • 

ilthough plaintiff has pleaded virtually no facts that wo~ld 

constitute direct evidence of an agreement, it has made ~ufficient 

6ircumstantial allegations to overcome the minimum requirements of 

Rule 8(a). In paragraphs 24 and 25 of the complaint, Monument 

Builders lists the prohibition against independent installation, 

8 Defendants cite with frequency to the Supreme Court's 

decisions 'in Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752 

(1984), and Matsushita Elec. Indu_s. Co. v.· Zenith Radio Corp., 475 

U.S. 574 (1986). Both cases held that in the face of ambiguous 

circumstantial evidence of agreement, an antitrust plaintiff must 

come forward with "evidence 'that tends to exclude the 

possibility' that the alleged conspirators acted independently." 

Matsushita, 477 U.S. at 588 (quoting Monsanto, 465 U.S. at 764). 

The Court did not intend to end reliance on circumstantial proof 

of conspiracy, but rather to avoid reliance exclusively on 

evidence which is "as consistent with permissible competition as 

with illegal conspiracy." Matsushita, 435 U.S. at 588; Monsanto, 

465 U.S. at 764 .. In their briefs, defendants offer no reasoning 

by which we could conclu_de that their alleged conduct was as 

consistent.with legitimate business purposes as ~ith collectiva 

effort to close independent dealers out of the maiket~ More 

importantly, Monument Builders alleges that the practices have no 

-other business purpose than to stifle competition from independent dealers.. · 

Neither Monsanto nor Matsushita, which reached the Court 

after a full trial in one case and considerable discovery in the 

other, control fully at the pleading stage. Although the rules of 

tho~e cases are ones antitiust plaintiffs must ultimately satisfy, 

we cannot conclude that Monument Builders can prove no set of 

facts which would support its claim of conspiracy. 

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as well as a number of surcharges assessed by defendant cemeteries 

against customers of independent monument dealers, as practices 

that are allegedly intended to disadvantage such dealers. See 

rec., vol. VI, doc. 223, ai 11-17. Plaintiff also ~lleges, 

inter alia, that defendant cemeteries enforce onerous installation 

rules regarding placement of monuments purchased from independent 

dealers which are markedly different from the rules applied to 

placement of their own ~ohuments. Plaintiff alieges that these 

practices and the other alleged practices ."bear no reasonable 

relation to the operation and maintenance of.a cemetery.'' Id~ at 

17. Under these circumstances, we cannot say beyond doubt that 

plaintiff can prove no set of facts that would support the claim 

that.defendant cemeteries entered into-a "contract, combination or 

conspiracy" to engage in these. practices. 9 We thus turn to 

. . 9 The Eighth Circuit recently reviewed dismissal of 

apparently almost identical to the one here, and found 

allegations of conspiracy sufficient: 

a complaint 

the· 

."The complaint in this case alleges that the 

appellee cemeteries agreed to engage in tying 

arrangements in order to force cemetery lot customers to 

buy their memorials and installation. services from the. 

appellee cemeteries. The nature of the tying devices 

used is set forth in detail, ranging from rules flatly 

requiring the lot customer to deal only with the 

cemetery, to a variety of rules allegedly designed to 

erect barrier~ to independent memorial retailers and 

installers. The appellee trade associations are alleged 

to have participated in the conspiracy by recommending 

the restrictve rules complained of. Baxley-DeLamar has 

alleged (albeit minimally) 'facts constituting the 

conspiracy, its object and accomplishment'. Larry R. 

George Sales Co. v. Cool Attic Corp., 587 F.2d 266, 273 

(5th Cir. 1979). Therefore, Baxley-DeLamar satisfied 

the minimal pleading requirements of Rule 8. See 

Mountain View Pharmacy v. Abbott Laboratories,7>"30 F.2d. 

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whether the allegations listed, reviewed under the same standards, 

support a claim that the practices alleged con~titute an illegal 

conspiracy in restraint of trade under section 1. 

The trial court re~d the complaint as describing only a tying 

arrangement. A tying arrangement arises when a seller requires. 

the purchaser of one product (the tying product) to also purchase 

another, distinct product (the tied product). "(C]ertain tying 

arrangements pose an unacceptable risk of stifling competition and 

therefore are unreasonable 'per se.'" Jefferson Parish Hosp. v. 

Hyde, 466 U.S. 2, 9 (1984) •. A tying arrangement is presumed 

illegal if it meets three criteria~ 

"First, purchases of the tying product ~ust be 

conditioned upon purchases of a distinct tied product. 

Second, a seller must possess sufficient power in the 

tying market.to compel acceptance of the tied product. 

Such ~ewer exists where market share is high, or where a 

seller offers a unique or otherwise desirable product 

.which competitors cannot. economically offer· themselv_es. 

Finally, a tying. arrangement must foreclose to 

competitors of the tied product a 'not insubstantial' 

volume of commerce." 

Fox Motors, Inc. v. Mazda Distrib. (Gulf) Inc., 806 F.3d 953, 957 

(10th Cir. 1986) (citations omitted). The risk posed by such 

arrangements is that the tied product will be purchased not on its 

competitive merits but because of its relationship to the tying 

product, thμs depriving consumer~ of a competitive choice and 

1383, 1386-88 (10th Cir. 1980). 

Baxley-DeLamar Monuments, Inc. v. American Cemetery Ass' n, 8_43 

F.2d 1154, 1156 (8th Cir. 1988). 

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Appellate Case: 86-1497 Document: 010110191876 Date Filed: 12/19/1989 Page: 22 
unfairly disadvantaging competitors in the market for the tied 

product. See Jefferson Parish Hosp., 466 U.S. at 12. The trial 

court held that Monument Builders failed to allege sufficient 

market pow~r to support a claim that cemeteries could force 

purchasers of plots to buy markers ·also. The court based its 

.conclusion on the complaint 1s failut~ to specify the market shares 

of individual cemeteries, and on the dilution of the alleged 

collectiV~-70-75% market share by the dismissal of the twelve 

Missouri defendants. 

Market power, for purposes of supporting a claim of forcing, 

is proven "[w]hen the seller's share of .the market is high; or 

. . 

when the·seller offers ·a unique product that competitors are not 

able to offer.!' J·efferson Parish Hosp., 466·u.s. at 17 (citationomitted). Monument Builders alleges in its complaint both that 

defendants' share of the market was high and that the uniqueness 

of specific plots along with the "defendant cemeteri~s• special 

relationship with purchasers of such ·spaces," give the cemeteries 

sufficient power in the market _for plots to .re~train competition. 

in the market for markers. Rec., vol. vr; doc. 223, at 11. 

Monument ·Builders also alleges that the effect of the defendants' 

actions has been to curtail competition in the market for markers, 

to deprive consumers of a competitive choice of markers~ and to 

cause buyers to pay higher prices for markers. Id. at 12. 

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The Eighth Circuit recently held allegations identical to 

these sufficient to state a tying claim under section 1. See 

Baxley-DeLamar Monuments v·. American Cemetery Ass' n, 843 F_. 2d 

1154, 1157 (8th Cir. 1988). The Eighth and Ninth Circuits have 

found proof of similar allegations to support~ tying claim. 10 

10 our holding is also supported by the Supreme Court's decision 

in Norfolk Monument Co. v. Woodlawn Memotial Gardens, 394 U.S. 700 

( 1969). The Court reversed the. grant of summary judgment to the 

defendants in a ·case similar to this one, based on the following 

conduct: 

... , ( 1) Despite the unskilled nature of the work, all 

of the memorial parks refus~ to permit the plaintiff to 

install markers sold by it; all of them insist that the 

work be.done by the cemeteries themselves. 

"'(2) None of the memorial parks charges lot owners 

a ~eparat~ installation fee-in the case of markers 

purchased from the cemeteries. 

"'(3) All of the memorial parks require the payment 

Of an installation fee by the plaintiff for installing. 

markers purchased from the plaintiff. The plaintiff 

plausibly mai~tains that the.actual cqst of installation 

comes to.about $3. Yet, enormous in~tallation fees are 

charged plaintiff**·* 

11 i(4) All of ·the memorial parks require·a specific 

alloy content in the bronze markers installed, and 

reserve the right to reject non-conforming markers.· The 

alloy content requirement happens to be the same as 

manufacturer Matthews' markers and the same as is 

implicitly suggested in a pamphlet ("Modern Cemeteries") 

distributed by Matthews td its customers. All of the 

memorial parks ex6ept Roosevelt are customers of 

.Matthews. 

'''(5) ~here is evidence that Greenlawn, Woodlwan 

and Princess Anne have attempted to dissuade lot owners 

from purchasing markers from the plaintiff. The 

affidavit of plaintiff's president states that numerous 

other incidents of this nature have occurred. · 

"'(6)·oefendant Matthews, in its pamphlet "Modern 

Cemeteries," suggests a number of practices which in 

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Appellate Case: 86-1497 Document: 010110191876 Date Filed: 12/19/1989 Page: 24 
See Rosebrough Monument Co. v. Memorial Park Cemetery Ass'n, 666 

F.2d 1130, 1140-46 (8th Cir. 1981), cert. denied, 457 U.S. 1111 

(1982); Moore v. Jas. H. Matthews & Co., 550 F.2d 1207, 1213-18 

(9th Cir. 1977). We· therefore cannot say beyond doubt that 

Monument Builders can prove no set of facts supporting a claim 

that defendants engaged in a per se illegal ty.ing arrangement. 11 

In Count II, Monument Builders describes no new 

anti-competitive activities, but claims that defendant cemetery 

associations (Kansas, Missouri, and American) and the Jas. H. 

Matthews Company encouraged, advised, and coordinated the 

cemeteries in the formulation and implementation·oi the practices 

effect erect competitive barriers to retailers other 

than the cemeteries themselves. 

"'(7) Many of these practices have been adopted by 

the memorial park defendants, as evidenced by affidavits 

in the record; and by the "rule books" of Rosewood, 

Princess Anne and Greenlawn. 

111 (8) There is evidence of numerous visits to and 

conferences with the memorial parks by sales 

representatives of Matthews.'" 

Id. at 701-02 (quoting Norfolk Monument Co. v. Woodlawn Memorial 

Gardens, 404 F. 2d 1008, 1012-1_4 (4th Cir. 1968) (Craven, J., 

dissenting)). Allegations of conduct identical o~ similar to .that 

set out in all but paragraphs 5 and 8 are found in Monument 

Builders' complaint. 

11 The trial court failed to address whethe~, even if · plaintiff's claims do not amount tci a per se illegal tying 

ar ra_ngement, defendants do in fact unreasonably restrain trade, 

thus violating section 1 under the rule of reason. Monument 

Builders may prevail if it can satisfy this more fact-bound test. 

See Jefferson Parish Hosp. v. Hyde, 466 U.S. 2, 29 (1984). The 

trial court should address this issue on remand should it become 

necessary. 

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Appellate Case: 86-1497 Document: 010110191876 Date Filed: 12/19/1989 Page: 25 
described in Count I, all in violation of Sherman Act section 1. 

In addition to making conclusory allegations regarding Matthews' 

actions, Monument Builders also alleges that Matthews formulited 

many of the allegedly anti-competitive practices described in 

Count I. See rec., vol. VI, doc. 223, at 22-23. Although this 

portion of the complaint is unquestionably not drawn in the most 

artful manner, it does give adequate notice to Matthews and the 

cemetery associations _of the role each is charged with playing in 

the conspiracy. See Baxley-DeLamar Monuments, 863 F.2d at 1156. 

We therefore con6lude that the district court erred in dismissing 

this count under Rule 12(b)(6). 

B. Sherman Act Section 2 Conspiracy to Monopolize 

The district court dismissed Count III, which alleges·a 

violation of section 2 of. the Sh~rman Act, because Monument 

·Builders failed to mak~ sufficien~ illegations of either market 

power or conspiracy. The court noted that while Monument Builders 

alleges that defendant ·demeteries contr6lled 70-75% of the 

interment market, it makes no allegations regarding the monument 

market. Although Monument Builders alleges that Matthews 

controlled a significant portion of the national market in bronze 

markers, the court pointed out that "nowhere does plaintiff allege 

that any of the defendants, including Jas. H. Matthews Company, 

hold market strength over granite markers." Monument Builders, 

629 F.Supp. at 1010. 

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Appellate Case: 86-1497 Document: 010110191876 Date Filed: 12/19/1989 Page: 26 
Monument Builders styled Count III as "conspiracy and/or 

attempt" to monopolize. "Howeve~, it appears that [plaintiff] 

actually pleaded a conspiracy to monopolize, rather than a number 

of individual attempts to monopolize." Baxley-DeLamar Monuments, 

843 F~2d at 1157 (assessing virtu~lly identical complaint). The 

district court was correct in noting that no individual is alleged 

to have attempted, on its own, to monopolize the relevant market. 

Nonetheless, we conclude that the complaint does state a claim for 

conspiracy to monopolize. 

"Conspiring to monopolize is a· separate offense under section 

2, requiring l~~s in the way.of proof than the other section ·2 

offenses." Perington Wholesale, 631 F.2d at 1377.· For example, 

the "market power in a 'relevant market' need not be proved." Id. 

A plaintiff must show conspiracy, specific intent to monopolize, 

and overt acts in furtherance of the conspiracy. See. id.; 

Baxle~-DeLamar Monuments, 843 F.2d at 1157. As we have outlined 

_above, Monument Builders makes su~ficient allegations of 

conspiracy and overt acts committed pursuant thereto. It also 

. . 

alleges that defendants intended to monopolize the Kansas City 

market for grave markers. See rec., vol. VI, doc. 223, at 24. We 

therefore hold that the district court erred in dismissing this 

count under Rule 12(b)(6). 

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IV. 

SANCTIONS 

The district court awarded various defendants attorneys fees 

for four reasons. First, it concluded that the amended complaint 

does not support a cause of action, and that plaintiff did not 

sufficiently investigate the facts prior to filing the lawsuit. 

The court believed these deficiencies were exacerbated by.Monument 

Builders' failure to improve its complaint when it was given an 

opportunity to amend. Second, the court found no justification 

for suing the Missouri defendants in the district of Kansas. 

Th_ird, .the cour;t found that an antitrust dam_ages acti0n against 

th~ City of _Olathe was untenable in light of the Local Government 

Antitrust Act of 1984, 15 U.S.C. §§ 34-36. Fourth, the court 

imposed attorney's fees in favor of D.W. New~omer's Sons because 

Monument auilders· alleged that Newcomer's owned- arid operated three 

Missouri cemeteries, when in fact it owned the stock of property 

companies that in turn owned the cemeteries. 

Rule 11 mandates sanctions against attorneys and/or their 

clients when plea_dings, motions, or other signed papers in the 

district court are not well grounded in fact, are not warranted by 

existing law or a good faith argu~ent for its extension, or are 

filed for an improper purpose. Fed. R .. civ. P. 11. We will 

overturn an award of sanctions under Rule 11 only if it 

constitutes an abuse of discretion. See Adamson v. Bowen, 855 

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Appellate Case: 86-1497 Document: 010110191876 Date Filed: 12/19/1989 Page: 28 
F.2d 668, 673 (10th Cir. 1988); Burkhart v. Kinsley Bank, 852 F.2d 

512, 515 (10th Cir.· 1988). Rule 11 imposes an obligation on the 

signer of a pleading to.conduct a reasonable inquiry into whether 

the pleading is legally frivolou~ or _factually unsupported. See 

Medical Emergency Serv. Assoc. v. Foulke, 844 F.2d 391, 399-400 

(7th Cir. 1988); Unioil, Inc. v. E.F. Hutton & Co., 809 ·F.2d 548, 

557 (9th Cir. 1986), cert. denied, 108 S.Ct. 83, 85 (1987). 

Because of our holdings on the merits, sanctions based on 

improper venue and insufficiency of· the complaint must be 

reversed. 12 The district court did not abuse its discretion, 

however, by- finding· that Monum~nt Builders and its attorney could 

·,have discoveied, after reasonable inquiry, that Newcomer's did not 

directly operate the cemeteries it·allegedly operated. 

Accordingly, the sanction based on that ground. is affirmed. 

Monument Builders has nbt appealed the award of sanctions to the 

City of Olathe. 13 

12 The district court ordered sanctions when it dismissed the 

·complaint, but it did not set the amount of the sandtions until 

after the notice of appeal was filed. Defendants argue that 

because plaintiff's notice of appeal was filed before the trial . 

court's final determination bn sanctiona, this court does not have 

jurisdiction over the issue. ~he notice of appeal was filed 

before this court's decision in Phelps v. Washburn Univ.~ 807 F.2d 

153 (10th Cir. 1986). Therefore, the rule announced in that case 

does not apply and we may-exercise jursidiction over the trial 

court's award of sanctions. See Thomas v. Metroflight, Inc.,· 814 

F.2d 1506, 1512 (10th Cir. 1987). 

13 On appeal, Monument Builders concedes that it is not entitled 

to antitrust damages against the City of Olathe, but challenges 

the dismissal of its claim for injunctive relief against that 

defendant. The City of Olathe has filed a motion for sanctions on 

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Appellate Case: 86-1497 Document: 010110191876 Date Filed: 12/19/1989 Page: 29 
v. 

CONCLUSION 

The trial court's dismissal of this action for improper venue 

and for failure to state a claim is reversed. The awards of 

attorneys fees based on improper venue and the inadequacy of the 

complaint are also reversed. The award of attorneys fees in favor 

of D.W. Newcomer's Sons is affirmed. The case is remanded for 

further proceedings consistent with this opinion. 

REVERSED AND REMANDED. 

appeal under Fed. R. App. P. 38, alleging that the appeal against 

it i$ frivolous. To th~ contrary, Monument Builders' argument 

with respect to the dismissal of its claim for injunctive relief, 

far from being frivolous, has prevailed on appeal. Accordingly, 

the motion for sanctions on appeal is denied. · 

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