Opinion ID: 374813
Heading Depth: 2
Heading Rank: 2

Heading: Second Claim

Text: 47 Codding contends that his second claim states a cause of action under Sherman One. In reviewing this argument, it is important to keep the essential elements of the Sherman One cause of action in mind. These are: 48 (1) an agreement among two or more persons or distinct business entities; 49 (2) which is intended to harm or unreasonably restrain competition; and 50 (3) which actually causes injury to competition. 51 Kaplan v. Burroughs Corp., 611 F.2d 286, 290 (9th Cir. 1979). 52 It is alleged in the second claim that Hahn has entered into an agreement with Sears and Macy's for the purpose of developing a downtown shopping center in Santa Rosa. According to the complaint, both Sears and Macy's, either directly or through subsidiaries, are competitors of Hahn and Codding in the development and construction of downtown regional shopping centers. Under the terms of the agreement, Hahn is to have a 75% interest in the shopping center, both Sears and Macy's will each have a 10% interest, while The Robert Campbell Company will have a 5% interest. 53 Codding alleges that the purpose and effect of the agreement is to eliminate competition in the development of shopping centers in the Santa Rosa market. Sears, Macy's and Hahn, individually, had the ability to enter the market as potential competitors of Codding and one another. By agreeing among themselves, they have eliminated competition with each other. The joint venture agreement has injured Codding because it gave Sears, Macy's, and Hahn a competitive advantage in dealing with others, including Codding, which would not have occurred if the three strong competitors had independently pursued their aims. 54 From this, it appears that Codding's second claim does state a claim for relief. There is an agreement between Hahn, Macy's, and Sears, three distinct business entities. The purpose of the agreement is to restrain competition among themselves and to injure Codding and place him at a competitive disadvantage. While Codding may face a difficult task in attempting to show any antitrust injury to himself, we cannot say at this point that Codding can prove no set of facts in support of his theory. 55 Hahn argues that Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 97 S.Ct. 690, 50 L.Ed.2d 701 (1977), supports the dismissal of the second claim. However, we believe that Brunswick is distinguishable from the present case, at least at this stage of the proceedings. The antitrust injury in Brunswick had no relationship to the size of either the acquiring company or its competitors. 429 U.S. at 487, 97 S.Ct. at 697. According to Codding's theory, his injury or potential injury is directly related to the size and market power of the three firms which have joined together. Codding may be able to prove an antitrust injury. See Brunswick, supra, 429 U.S. at 490, n.16, 97 S.Ct. at 694 n.16.