IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 10-60844

GULF COAST HOTEL-MOTEL ASSOCIATION AND ITS SUCCESSOR

MISSISSIPPI HOTEL & LODGING ASSOCIATION,

Plaintiff-Appellant,

v.

MISSISSIPPI GULF COAST GOLF COURSE ASSOCIATION; GULF HILLS

GOLF CLUB, INCORPORATED; GREAT SOUTHERN GOLF CLUB,

INCORPORATED; THE PASS CHRISTIAN ISLES GOLF CLUB,

INCORPORATED; SUNKIST COUNTRY CLUB, INCORPORATED; SPE GO

HOLDINGS, INCORPORATED, doing business as Great Oaks Golf, a wholly

owned subsidiary of Textron Financial Corporation; DOGWOOD HILLS

GOLF COURSE, INCORPORATED; PACIFIC LIFE INSURANCE

COMPANY, doing business as The Oaks Golf Club, 

 Defendants-Appellees.

Appeal from the United States District Court 

for the Southern District of Mississippi

Before WIENER, CLEMENT, and ELROD, Circuit Judges.

JENNIFER WALKER ELROD, Circuit Judge:

This is an antitrust case involving a dispute between competing programs

to sell vouchers for rounds of golf at golf courses along Mississippi’s Gulf Coast. 

United States Court of Appeals

Fifth Circuit

F I L E D

September 27, 2011

Lyle W. Cayce

Clerk

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The district court granted defendants-appellees motion to dismiss, deciding, in

pertinent part, that the plaintiff-appellant had failed to allege the interstate

commerce element of a valid claim under the Sherman Act. We now REVERSE

and REMAND for further proceedings consistent with this opinion.

I.

The plaintiff-appellant, the Gulf Coast Hotel-Motel Association and its

successor Mississippi Hotel & Lodging Association (the “Hotel Association”) is

a trade association made up of hotels, motels, other lodging members, and golf

courses. As one of its services, the Hotel Association provides a golf voucher

program for golf course members of the Hotel Association. Through the

program, individual golfers buy vouchers for rounds of golf from hotels or from

companies that package golf tours. After the golfer turns in the voucher to the

golf course and plays his or her round of golf, the golf course presents the

validated voucher to the Hotel Association for payment. The Hotel Association

collects the payment from the hotel or golf tour packager, and sends the money

to the golf course. The Hotel Association keeps $1 per round of golf as an

administrative fee. Thus, the Hotel Association’s role is essentially to act as an

administrative middle-man for the voucher program.

The complaint alleges in three separate paragraphs that golfers who buy

the vouchers come to Mississippi from out-of-state:

The Golf Package Contracts require, in short, that the Hotel

Association member golf courses honor the Hotel Association Golf

Package Program tickets (i.e., vouchers) presented to them by the

patrons of the Hotel Association Lodgings/Golf Packagers for the

reserved tee times, in lieu of payment of green and cart fees. These

patrons and customers are comprised of out-of-state persons visiting

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the Mississippi Gulf Coast participating in the voucher program.

(emphasis added).

Thus, the Defendant Golf Courses offer higher priced golf rounds to

the Hotel Association voucher program, while offering lower rates

to the Golf Association voucher program. The Defendant Golf

Courses comprise a significant number of courses that are used by

out-of-state visitors to the Mississippi Gulf Coast. The Defendant

Golf Courses’ and the Golf Association’s concerted efforts to

monopolize the golf package market on the Mississippi Gulf Coast

by offering higher rounds to programs other than the Golf

Association’s program, specifically the Hotel Association’s program.

(emphasis added).

The Hotel Association and the Golf Association directly compete

with each other through their golf package voucher program. The

voucher programs of both associations service the region of the

Mississippi Gulf Coast. The patrons and consumers who use and

purchase the vouchers are comprised of out-of-state residents who

visit the Mississippi Gulf Coast. (emphasis added). 

The complaint also alleges, without further elaboration, that the voucher

program affects interstate commerce. 

The defendants-appellees, the Mississippi Gulf Coast Golf Course

Association and a number of Mississippi Gulf golf courses (together, the “Golf

Association”), are part of a competing voucher program. The Golf Association

includes fifteen golf courses on Mississippi’s Gulf Coast. Some of those courses

were, as of 2002, also members of the Hotel Association’s voucher program. In

that year, the complaint alleges that the defendant golf courses threatened to

withdraw from the Hotel Association’s program unless the Hotel Association

excluded non-Golf Association golf courses. The Hotel Association refused. In

response, the golf course defendants allegedly agreed to an exclusive agreement

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to work only with the Golf Association voucher program. That exclusive

agreement was enjoined as void and unenforceable by the Harris County

Chancery Court in 2003. The complaint alleges that in response, the Golf

Association and the defendant golf courses began acting in concert to prevent

hotels from using the Hotel Association voucher program by providing the Hotel

Association with higher quotes than provided to the Golf Association voucher

program. Thus, according to the complaint, a golfer looking to buy a voucher for

a round of golf on a course that is a member of both the Golf Association and the

Hotel Association can buy that voucher for substantially less money from the

Golf Association than the Hotel Association. 

The Hotel Association filed suit alleging that the Golf Association’s

decision to discriminate against the Hotel Association voucher program violated

sections 1 and 2 of the Sherman Act, section 2 of the Clayton Act, and

constituted various state law torts including tortious interference with business

relations and contract. The Hotel Association asserted that the District Court

had subject matter jurisdiction over its federal antitrust claims pursuant to 15

U.S.C. § 15(a) and 28 U.S.C. § 1331, and supplemental jurisdiction over its state

law claims pursuant to 28 U.S.C. § 1367. 

The district court advised the Hotel Association that the complaint failed

to articulate sufficient factual allegations establishing any affect on interstate

commerce. In response, the Hotel Association filed a First Amended Complaint

and a Second Amended Complaint (the complaint at issue here). The Golf

Association filed a motion to dismiss under Federal Rule of Civil Procedure

12(b)(6).

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The district court granted the motion, determining that it lacked subject

matter jurisdiction over the Hotel Association’s Sherman Act claims. The

district court stated that federal subject matter jurisdiction under the Sherman

Act and the Clayton Act requires “a showing of some nexus between Defendants’

conduct and interstate commerce.” Gulf Coast Hotel-Motel Ass’n v. Miss. Gulf

Coast Golf Course Ass’n, No. 1:08-CV-1430, 2010 WL 3168032, at *3 (S.D. Miss.

Aug. 10, 2010). The district court first rejected the argument that the voucher

sales were directly in interstate commerce. Therefore, the district court went 1

on to consider whether the Hotel Association had properly pleaded a substantial

affect on interstate commerce for the purposes of Sherman Act jurisdiction. The

district court concluded that the Hotel Association’s claims were insufficiently

detailed, and therefore dismissed those claims with prejudice. Finally, the

district court exercised its discretion to dismiss the Hotel Association’s state law

claims without prejudice, declining to exercise supplemental jurisdiction over

Hotel Association’s remaining state law claims. The Hotel Association

moved for reconsideration, relying primarily on Cowan v. Corley, 814 F.2d 223

(5th Cir. 1987)—a case in which this court reinstated a complaint alleging a

Sherman Act claim arising out of a business providing a wrecker service on two

major federal highways. Id. at 225. The district court denied the motion for

reconsideration. The Hotel Association timely appealed. 

II. 

The Hotel Association asserts that the district court erred in finding that

it lacked subject matter jurisdiction over the Hotel Association’s Sherman Act

The Hotel Association does not appeal the district court’s Clayton Act decision. 1

Arguments not briefed on appeal are waived. United States v. Thibodeaux, 211 F.3d 910, 912

(5th Cir. 2000). 

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claims. The Hotel Association’s position is that its complaint pleaded a sufficient

connection to interstate commerce to survive a motion to dismiss. The Golf

Association contends in response that the complaint fails because the

complaint’s “conclusory allegations” did not “sufficiently allege how the Hotel

Association’s antitrust claims involved interstate commerce.” 

This court reviews a decision to dismiss for lack of subject matter

jurisdiction de novo, applying the same standards as the district court. See DelRay Battery Co. v. Douglas Battery Co., 635 F.3d 725 (5th Cir. 2011). Under

Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a “short and

plain statement of the claim showing that the pleader is entitled to relief.” See

Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009). Rule 8 does not require “detailed

factual allegations but it demands more than an unadorned, the-defendantunlawfully-harmed-me accusation.” Id. Thus, a complaint will survive a motion

to dismiss if it contains “enough facts to state a claim to relief that is plausible

on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) (internal

quotation omitted). A plaintiff meets this standard when it “pleads factual

content that allows the court to draw the reasonable inference that the

defendant is liable for the misconduct alleged.” Iqbal, 129 S. Ct. at 1949. 

A complaint alleging a Sherman Act claim must allege some nexus

between the defendants’ conduct and interstate commerce. See 15 U.S.C. §§ 1,

3, 13; see also Summit Health, Ltd. v. Pinhas, 500 U.S. 322, 324-25 (1991). In

interpreting that “expansive” standard, however, we must keep in mind “that

when Congress passed the Sherman Act, it ‘left no area of its constitutional

power [over commerce] unoccupied.’” Summit Health, Ltd., 500 U.S. at 329 n.10

quoting United States v. Frankfort Distilleries, Inc., 324 U.S. 293, 298 (1945)

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(alteration in original). Thus, the reach of the act is coextensive with the reach

of congressional power under the Commerce Clause of the Constitution. Id. at

500 U.S. at 328-29. The Supreme Court has broadly interpreted Congress’s

authority under the Commerce Clause with respect to economic transactions. 

See, e.g, Gonzales v. Raich, 545 U.S. 1, 32 (2005) (upholding restrictions on the

“intrastate, noncommercial cultivation, possession and use of marijuana” under

Congress’s commerce clause power); Wickard v. Filburn, 317 U.S. 111, 128-29

(1942) (establishing Congress’s power to regulate purely local activities that are

part of an economic class of activities that have a substantial effect on interstate

commerce). However, the Court has limited the reach of the Commerce Clause

with respect to non-economic activity. See United States v. Lopez, 514 U.S. 549,

567 (1995) (holding that a law making it a federal offense to knowingly possess

a firearm in a school zone exceeded Congress’s commerce clause authority);

United States v. Morrison, 529 U.S. 598, 610, 617 (2000) (holding that a law

providing a federal civil remedy for victims of gender-motivated violence is

unconstitutional in part because the law did not concern economic activity). We

do not need to determine the limits of Congress’s Commerce Clause authority in

this case in order to decide that the conduct alleged here—that is, bringing outof-state tourists to hotels to play golf—falls squarely within the Supreme Court’s

Commerce Clause jurisprudence.2

Indeed, subject matter jurisdiction based on the Commerce Clause “has,

of course, long been interpreted to extend beyond activities actually in interstate

As the Court explained in Lopez itself, “inns and hotels catering to interstate guests”

2

are one of the categories of interstate commerce. 514 U.S. at 559; See also Morrison, 529 U.S.

at 609 (observing that even intrastate economic activity is within Congress’s commerce clause

power where it substantially affects interstate commerce). 

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commerce to reach other activities that, while wholly local in nature,

nevertheless substantially affect interstate commerce.” Cowan, 814 F.2d at 226. 

Jurisdiction is not “defeated in a case relying on anticompetitive effects by

plaintiff’s failure to quantify the adverse impact of defendant’s conduct.” 

McLain, 444 U.S. at 243. Rather, the issue is whether, “as a matter of practical

economics,”the complaint is sufficient to allege an affect on interstate commerce. 

Hosp. Bldg. Co. v. Trs. of Rex Hos., 425 U.S. 738, 745 (1976). The Supreme

Court has explained that courts should exercise caution in dismissing antitrust

claims. Id. at 746; see also Twombly, 550 U.S. at 558 (contrasting due caution

in dismissing an antitrust complaint with failing to insist upon some specificity

in pleading). 

The Supreme Court’s opinion in Summit Health is instructive. There, an

ophthalmologist claimed that a conspiracy to drive him out of business by

instituting fraudulent “peer review” proceedings against him violated the

Sherman Act. Id. at 324. Like the defendants here, the defendants claimed that

the doctor had failed to sufficiently plead the Sherman Act’s jurisdictional

element because the alleged conspiracy was purely a local one affecting no more

than one doctor and one hospital. Id. at 329-30. The Supreme Court disagreed,

holding that if the conspiracy was successful, then “there will be a reduction in

the provision of ophthalmological services in the Los Angeles market.” Id. at

331. Thus, the Supreme Court concluded, “[w]e have no doubt concerning the

power of Congress to regulate a peer review process controlling access to the

market for ophthalmological surgery in Los Angeles.” Id. at 333. As Justice

Scalia noted in dissent, the Supreme Court looked to “whether the entire line of

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commerce from which [the plaintiff] has been excluded affects interstate

commerce.” Id. at 336.3

Moreover, the Supreme Court has repeatedly addressed the effects on

interstate commerce of hotels, motels, and other elements of the hospitality

industry. In Camps Newfound/Owatonna, Inc. v. Town of Harrison, Me., 520

U.S. 564 (1997), for example, the Supreme Court considered a dormant

commerce clause challenge to a tax that had a disparate impact on a camp with

many out-of-state campers. Id. at 572. The Supreme Court firmly rejected the

argument that the dormant commerce clause was inapplicable, concluding that

although summer camps and hotels are services that are consumed locally, they

may have substantial effects on interstate commerce: 

Summer camps are comparable to hotels that offer their guests

goods and services that are consumed locally. In Heart of Atlanta

Motel Inc. v. United States, 379 U.S. 241 (1964), we recognized that

interstate commerce is substantially affected by the activities of a

hotel that ‘solicits patronage from outside the State of Georgia

through various national advertising media, including magazines of

national circulation.’ . . . Even when business activities are purely

local, if it is interstate commerce that feels the pinch, it does not

matter how local the operation which applies the squeeze. Id. at

573-74. (internal quotation marks and citations omitted).

As the Supreme Court concluded, even though the camp in that case did not 

“make a profit, it is unquestionably engaged in commerce, not only as a

 No party here argues that Summit Health is no longer good law in light of Twombly 3

or Iqbal. Indeed, at least one of our sister circuits has recently relied on Summit Health to

conclude that a complainy sufficiently set forth an effect on interstate commerce by alleging

that the plaintiff would participate in an interstate market for patients. See Yakima Valley

Mem. Hosp. v. State Dep’t of Health, --- F.3d —, Nos. 10-35497, 10-35543, 2011 WL 3629895

(9th Cir. Aug. 19, 2001). 

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purchaser, but also as a provider of goods and services.” 520 U.S. at 573

(internal citations omitted). 

To be sure, the Hotel Association’s complaint here—even after prompting

by the district court—is sparse. What is alleged, however, is sufficient to survive

a motion to dismiss. The Supreme Court has explained that a mere “formulaic

recitation of the elements” of a claim is insufficient to create a well-pleaded

complaint. Iqbal, 129 S. Ct. at 1951. Thus, it was not enough in Twombly to

allege a “conspiracy”, 550 U.S. at 557, or in Iqbal to parrot the words needed to

create a claim of constitutional discrimination, 129 S. Ct. at 1951. Once shorn

of such legal conclusions, the allegations in those cases could not support an

inference of liability—in Twombly, for example, the allegations of misconduct

considered by the Supreme Court described a conspiracy that was factually

implausible, 550 U.S. at 569, and in Iqbal, under the same analysis, the

allegations of the complaint were consistent with an “obvious alternative

explanation” for the arrests at issue. 129 S. Ct. at 1951. While the allegations

in this complaint that the Golf Association’s anticompetitive acts “substantially

affected interstate commerce” are not sufficient on their own, the complaint here

read as a whole goes beyond the allegations rejected in Twombly and Iqbal.

4

Specifically, the complaint here alleges that voucher customers “are

comprised of out-of-state persons visiting the Mississippi Gulf Coast,” that the

golf courses at issue are used by out-of-state visitors and that the Hotel

Association vouchers are sold through hotels and motels to patrons of those

The parties also dispute whether allegations made in briefing can supplement the 4

allegations of a complaint. Because we find thatthe allegations of this complaint are sufficient

to allege subject matter jurisdiction without reference to any further information provided in

the briefings, we do not need to decide that question. 

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lodgings. Just as in Camps Newfound and Heart of Atlanta, it is a reasonable

inference from those allegations to conclude that money was sent across state

lines, that tourists were attracted to the Mississippi Gulf Coast by the voucher

program, and that if the alleged conspiracy were successful, consumers would not

have the option of the Hotel Association’s voucher program. If it is true that

these hotels and golf courses attract out-of-state visitors who participate in the

Hotel Association’s voucher program, as the complaint alleges, then there can be

no doubt under both the Supreme Court’s and this court’s jurisprudence that the

Hotel Association’s complaint states a claim with respect to subject matter

jurisdiction. See Iqbal, 129 S. Ct. at 1950 (“determining whether a complaint

states a plausible claim for relief will . . . be a context specific task that requires

the reviewing court to draw on its judicial experience and common sense.”);

Camps Newfound, 520 U.S. at 573 (observing that a business which “necessarily

generates the transportation of persons across state lines that has long been

recognized as a form of commerce.”); Hamilton Chapter of Alpha Delta Phi, Inc.

v. Hamilton Coll., 128 F.3d 59, 66-67 (2d Cir. 1997) (finding subject matter

jurisdiction where college fraternities alleged that a college’s efforts to monopolize

campus dining services affected interstate commerce, because the college’s

residential services are regularly performed for out-of-state students). O u r

circuit’s precedents also support this result. In Cowan, the complaint concerned

a wrecker service involving two interstate highways carrying substantial

vehicular travel traffic in interstate travel. 814 F.2d at 224. Although the

district court had concluded that the provision of wrecker service to traffic on

those roads did not bear a sufficient relationship to interstate commerce, this

court held that “[a]ctions directly related to the competitive pricing, marketing

and furnishing of towing service to the interstate vehicular movement of people

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and goods . . . substantially affect interstate commerce.” Id. at 226. It is no

answer to say, as do defendants, that Cowan can be differentiated because it

involved vehicular transport. As Camps Newfound and Heart of Atlanta teach,

lodgings that attract out-of-state visitors substantially affect interstate commerce

just as much as the highway system that takes visitors from one state to another. 

In St. Bernard General Hospital, Inc. v. Hospital Service Assoc’n of New Orleans,

Inc., 712 F.2d 978, (5th Cir. 1983), moreover, this court held that economic

damages that affected a plaintiff’s ability to purchase supplies were sufficient to

support antitrust jurisdiction. Id. at 984. In that case, we explained that even

“an indirect impact upon interstate commerce is not to be tolerated.” Id. Here,

as the complaint states, guests come from out-of-state to play golf at the courses

in question. If the allegations of the complaint are true—as we must assume at

this stage—then the possible affect on interstate commerce under the precedent

in this circuit is evident. As this court firmly held in Cowan, it cannot “be

gainsaid that travel to and through” a state “involves interstate commerce.” 

Cowan, 814 F.2d at 226. 

The other cases on which the defendants rely are inapposite. In Furlong

v. Long Island College Hospital, 710 F.2d 922 (2d Cir. 1983), a doctor complained

that her employer had restrained trade by improperly limiting her right to

practice medicine by fixing prices for medical care. The Second Circuit held that

it was not enough to show that “some aspects of a defendant’s business have a

relationship to interstate commerce.” Id. at 926. Rather, “the inquiry must be

whether the defendant’s activity that has been allegedly infected by unlawful

conduct can be shown ‘as a matter of practical economics’ to have a not

insubstantial effect on the interstate commerce involved.” Id. Concluding that

the pleaded facts were insufficient because the complaint included “no allegation

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of price-fixing” in any of its “operative language,” and because the plaintiff had

failed to show a substantial affect on interstate commerce of her own lost

revenue, the court dismissed the case with leave to replead in order to set forth

the jurisdictional facts at issue with more clarity. Id. at 927-28. Even assuming

that Furlong’s reasoning has survived Summit Health—which Justice Scalia’s

dissent in Summit Health puts in question, 500 U.S. at 335—the allegations of

this complaint implicate interstate commerce far more directly than the

attenuated allegations of the Furlong complaint. After all, the issue here turns

on the competition for out-of-state tourism dollars between two voucher

consortiums, not whether some employment dispute might lead to a marginal

decrease in a defendant hospital’s out-of-state purchasing. The Golf

Association’s reliance on a Sixth Circuit case decided at the summary judgment

stage, Stone v. William Beaumont Hospital, 782 F.2d 609 (6th Cir. 1986) is

similarly misplaced. There, the plaintiff’s entire allegation was that he was

excluded from working at a local medical facility “two or three times a month.”

Id. at 614. Upon review of “voluminous” pleadings, the court held that such

deprivations only had a “de minimus” impact on interstate commerce. Id. At 5

Huelsman v. Civic Center Corp., 873 F.2d 1171 (8th Cir. 1989), another case decided

5

before Summit Health, is also not persuasive. There, the plaintiffs alleged that their sales

of concessions outside a stadium to potentially out-of-state fans was sufficient to support

subject matter jurisdiction. Id. at 1173. That court, in dismissing without prejudice, agreed

with defendants that “the volume of these purchases and sales was so small that as a matter

of practical economics, there was no substantial effect on interstate commerce.” Id. at 1175.

The facts here, involving fifteen golf courses and a variety of hotels and motels, are quite

different. Indeed, the defendants do not even contend that the Hotel Association’s activities

had an insubstantial effect on interstate commerce—only that those allegations should have

been better pleaded. 

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this stage, we cannot say that the Hotel Association’s allegations are of such

insignificance. 

6

III.

Because we find that the district court erred in dismissing the Hotel

Association’s case for lack of subject matter jurisdiction, we REVERSE and

REMAND for further proceedings consistent with this opinion. 

Because we reverse on the basis of the District Court’s decision with respect to subject 6

matter jurisdiction, we are not required to—and do not—reach the parties’ arguments with

respect to the other elements of a Sherman Act claim.

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