Opinion ID: 4530507
Heading Depth: 1
Heading Rank: 7

Heading: Count II—Mississippi Antitrust Act (MAA)

Text: ¶26. We also affirm the dismissal of the State’s Mississippi Antitrust Act (MAA) claim based on failure to allege any intrastate activity. ¶27. Section 75-21-1 defines a trust or combine as a combination, contract, understanding or agreement, expressed or implied, between two or more persons, corporations or firms or association of persons or between any one or more of either with one or more of the others, when inimical to public welfare and the effect of which would be: (a) To restrain trade; (b) To limit, increase or reduce the price of a commodity; (c) To limit, increase or reduce the production or output of a commodity; [or] (d) To hinder competition in the production, importation, manufacture, transportation, sale or purchase of a commodity . . . .9 9 Under Section 75-21-1, a trust also exists when the effect of the agreement is (e) To engross or forestall a commodity; 16 Miss. Code. Ann. § 75-21-1(a)-(d) (Rev. 2016). Section 75-21-1 makes it illegal to create or become part of a trust so defined, subjecting violators to criminal penalties. And Section 75-21-7 authorizes the attorney general to pursue civil penalties ranging between $100 to $2,000 per violation.10 Miss. Code Ann. § 75-21-7 (Rev. 2016). ¶28. In 1914, this Court handed down the leading case on Mississippi’s antitrust statute, Standard Oil Co. of Kentucky v. State, 107 Miss. 377, 65 So. 468, 471 (1914), overruled in part on other grounds by Mladinich v. Kohn, 250 Miss. 138, 164 So. 2d 785 (1964).11 In (f) To issue, own or hold the certificate of stock of any trust and combine within the spirit of this chapter knowing it to be such at the time of the issue or the acquisition or holding such certificate; or (g) To place the control to any extent of business or of the proceeds or earnings thereof, contrary to the spirit and meaning of this chapter, in the power of trustees, by whatever name called; or (h) To enable or empower any other person than themselves, their proper officers, agents and employees to dictate or control the management of business, contrary to the spirit and meaning of this chapter; or (i) To unite or pool interest in the importation, manufacture, production, transportation, or price of a commodity, contrary to the spirit and meaning of this chapter. Miss. Code Ann. § 75-21-1(e)-(i) (Rev. 2016). 10 The attorney general may also seek an injunction in chancery court. Miss. Code Ann. § 75-21-1. But, in contrast to the MCPA, the ability to recover civil penalties is not tied to bringing an action for injunctive relief. See Miss. Code Ann. § 75-21-9. 11 Mississippi’s antitrust statute was first enacted in 1892 and can be traced through the following statutes: Miss. Code (1972) § 75-21-1; Miss Code (1942) § 1088; Miss. Code (1930) § 3436;1926 Miss. Laws ch. 182; Hemingway’s Code (1917) §§ 3281, 3282; 1908 Miss. Laws chs. 88, 119; Miss. Code (1906) § 5002; Miss. Code (1892) § 4437. The version of the antitrust statute in effect in 1914 is nearly identical in the activity it prohibits. Compare 1908 Miss. Laws ch. 119 (amending Miss. Code (1906) § 5002) with Miss. Code 17 Standard Oil, this Court held that “a conspiracy to monopolize trade in any commodity to be punishable under state laws must have as one of its objects a monopoly in the intrastate trade therein to be accomplished in part at least by transactions which are also wholly intrastate.” Id. at 471. ¶29. The State alleged that Standard Oil of Kentucky had engaged in a conspiracy to monopolize both inter and intrastate sale of petroleum. Id. at 470. The conspiracy’s object was achieved in Mississippi, the complaint alleged, by selling Standard Oil’s products on the same day in different locations in Mississippi at different prices for the purpose of creating a monopoly. Id. While all the petroleum in Mississippi had been imported—i.e., came in by way of interstate commerce—it was only after Standard Oil’s products became “incorporated into the general mass of property” in Mississippi that the company sold or distributed the petroleum at anticompetitive prices in order to further its monopoly. Id. This Court agreed with the trial court that the State’s complaint could proceed because “[t]he controversy here complained of, ha[d] as one of its objects a monopoly of that portion of the trade in petroleum products which lies wholly within the state of Mississippi, to be accomplished in part at least by transactions lying wholly within the state,” and thus was “punishable under the laws thereof.” Id. at 471; see also BASF Corp., No. 56863 (trial court’s finding the State’s alleged price-fixing scheme for vitamins to be analogous to Standard Oil because the State alleged the defendant’s vitamins were imported into Mississippi and then sold through the defendant’s sales representative to Mississippi Ann. § 75-21-1 (Rev. 2016). 18 customers at anticompetitive prices). ¶30. Applying Standard Oil, the chancellor dismissed the State’s MAA claim for failure to allege any wholly intrastate conduct. As with the MCPA claim, while the State broadly alleged the defendant manufacturers restrained trade, increased prices, and hindered competition “in the State of Mississippi,” the complaint contained no allegation that the defendant manufacturers sold AWHS in Mississippi or that the auto manufacturers, suppliers, or distributors who bought the AWHS were in Mississippi. The complaint did assert that the defendants “manufactured, marketed, and/or sold [AWHS] that were purchased, directly or indirectly, throughout the State of Mississippi after they became a part of interstate and intrastate commerce. But the chancellor determined “[t]his conclusory allegation [wa]s not sufficient to withstand a [Rule] 12(b)(6) motion.” ¶31. On appeal, the State does not argue against the application of Standard Oil to its MAA claim. Rather, the State argues the chancellor misapplied this case. ¶32. First, the State claims the chancellor, as part of her reliance on Standard Oil, “applied a 1914 standard for a demurrer” and “ignored the fact that the State of Mississippi became a ‘notice pleading’ state, with the adoption of the of the Mississippi Rules of Civil Procedure, and more specifically, Rule 8.” But the State’s assertion is unfounded. It is clear from her order that the chancellor relied on Standard Oil for guidance on what is substantively required under Mississippi’s antitrust statute. She did not apply Standard Oil for its demurrer standard. ¶33. Neither did she ignore Rule 8. Even under Rule 8’s liberal “short and plain statement” 19 requirement, the complaint still must set forth “‘factual allegations, either direct or inferential, respecting each material element necessary to sustain recovery under some actionable legal theory.’” Sanderson Farms, Inc. v. McCullough, 212 So. 3d 69, 73 n.6 (Miss. 2017) (quoting Carter v. Reddix, 115 So. 3d 851, 856-57 (Miss. Ct. App. 2012)). And according to Standard Oil, a material element to an MAA claim is that the illegal objective of the trust “be accomplished in part at least by transactions lying wholly within the state.” Standard Oil, 65 So. at 471. In Count II of the complaint, the State does not allege any “wholly intrastate” transaction to support its allegation that the defendant manufacturers violated Section 75-21-1. Elsewhere, the State alleges the AWHS “were purchased, directly or indirectly, throughout the State of Mississippi after they became a part of interstate and intrastate commerce.” But the State does not allege any “wholly intrastate” transactions by the defendants. Therefore, dismissal was proper under Rule 12(b)(6).12 ¶34. Second, the State alternatively argues the chancellor misapplied Standard Oil as applying to “wholly intrastate conduct.” The State argues the fact the alleged trust was also interstate does not defeat an MAA claim. The State is correct in one respect. The alleged conduct does not have to be exclusively intrastate to be actionable under the MAA. Standard Oil, 65 So. at 470 (“A conspiracy . . . having for its object the creation of a monopoly in both the inter and intra state commerce in a commodity is necessarily subject to the law both of the general government and of the state affected thereby.”). But the conduct does have to be 12 As further evidence the chancellor followed the Mississippi Rules of Civil Procedure, the chancellor did not dismiss the MAA claim with prejudice. Instead, applying Rule 15, she permitted the State thirty days to amend its MAA claim, which it chose not to do. See M.R.C.P. 15(a). 20 partly intrastate. Or, as this Court stated in Standard Oil, “to be punishable under state laws,” the illegal monopoly must “be accomplished in part at least by transactions which are . . . wholly intrastate.” Id. at 471. ¶35. Contrary to the State’s assertion, it was not the inclusion of allegations of interstate conduct but rather the omission of allegations of wholly intrastate transactions that led to its MAA claim being dismissed. In contrast to Standard Oil, the State’s complaint does not allege the AWHS conspiracy was accomplished at least in part by transactions lying wholly within Mississippi. While it mentions, by way of example, both Nissan and Toyata had OEMs in Mississippi, the State neither alleges the defendant sold AWHS in Mississippi nor that the OEMs, suppliers, or distributors that directly purchased AWHS from the defendants were in Mississippi. ¶36. Notably, the State did not even amend its complaint when given the opportunity to make any allegations of intrastate transactions. Instead, the State chose to appeal. And on appeal, the State merely claims its broad assertion that the conspiracy existed in both interstate and intrastate commerce was sufficient under Rule 8 to give the defendants notice of the conduct that allegedly violated Section 75-21-1 and entitled the State to civil penalties on a per-violation basis under Section 75-29-9. “While [Rule] 8 has eliminated the technical forms of pleadings required in years past, notice pleadings are still required to place the opposing party on notice of the claim being asserted.” Estate of Stevens v. Wetzel, 762 So. 2d 293, 295 (Miss. 2000). Here, by failing to allege any wholly intrastate transactions, the State’s complaint falls short of this requirement. 21