Opinion ID: 1368925
Heading Depth: 4
Heading Rank: 3

Heading: Futility of the Amendment.

Text: The last ground on which CHS defends the superior court's decision is the rule that futile amendments should not be permitted. Klamath-Lake Pharmaceutical Ass'n v. Klamath Medical Service Bureau, 701 F.2d 1276, 1293 (9th Cir.), cert. denied, 464 U.S. 822, 104 S.Ct. 88, 78 L.Ed.2d 96 (1983). CHS claims the amendment would be futile for essentially two reasons: 1) the proposed second amended complaint fails to allege adequate facts to support a claim of intent to monopolize; and 2) the amendment was time barred.
While the Betzes' proposed amendment is perhaps not a paradigm of artful pleading, the following allegations are included and adequately set forth a monopolization claim under AS 45.50.564. The Betzes allege that 1) CHS had a dominant position in the market for lodging for visitors to Chena Hot Springs; 2) CHS breached its agreement to operate the eight-plex, cut off hot water and other essential services and failed to make proper accounting and payment of funds owed to the Betzes under the contact, all with the specific intent of driving their only competition out of business, and 3) CHS achieved its purpose, thereby creating a monopoly. CHS makes much of the Betzes' allegedly misplaced reliance on West v. Whitney-Fidalgo Seafoods, Inc., 628 P.2d 10 (Alaska 1981) in which we adopted the rule that proof of the relevant market and a probability of its monopolization are not essential elements of the offense of attempt to monopolize under [AS 45.50.564]. Id. at 16. CHS correctly states that the Ninth Circuit, whose position we adopted in West, has since clarified and in essence narrowed this rule. In M.A.P. Oil, Inc. v. Texaco, Inc., 691 F.2d 1303, 1309 (9th Cir.1982) the court made clear that lack of proof of relevant market and market power was not a fatal flaw in a plaintiff's case only if the plaintiff could establish either predatory conduct or a per se violation of Sherman 1. We need not here decide whether similarly to limit the rule we announced in West since the Betzes have adequately defined a relevant market and alleged that CHS had substantial power in that market. The relevant market is defined as lodging for visitors to the hot springs. [5] The Betzes allege that CHS and the Betzes were the only competitors in this market, and that CHS intentionally drove the Betzes out of business thereby creating for themselves a monopoly. Moreover, the Betzes have alleged predatory conduct which has been defined as: conduct which has the purpose and effect of advancing the actor's competitive position, not by improving the actor's market performance, but by threatening to injure or injuring actual or potential competitors, so as to drive or keep them out of the market, or force them to compete less effectively. Sullivan, § 43 at 108. Cutting off hot water and other essential services to the eight-plex surely does not constitute an attempt by CHS to improve the quality of its own guest lodging and just as surely injured the Betzes' ability to compete. Alaska rules of pleading are liberal and require only that a complaint contain (1) a short and plain statement of the claim showing that the pleader is entitled to relief, and 2) a demand for judgment for the relief to which he deems himself entitled. Alaska R.Civ.P. 8(a); see also Shooshanian v. Wagner, 672 P.2d at 465. The Betzes have alleged facts stating a claim even under the Ninth Circuit standard. See also Aspen Highlands Skiing Corp. v. Aspen Skiing Co., 472 U.S. 585, 105 S.Ct. 2847, 86 L.Ed.2d 467 (1985).
CHS claims the Betzes' proposed claim is time barred. The limitations period is four years, AS 45.50.588, and runs from the alleged last act causing plaintiffs' injury. Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 338, 91 S.Ct. 795, 806, 28 L.Ed.2d 77, 92 (1971). The Betzes first proposed their AS 45.50.564 claim in 1986, more than four years after CHS allegedly breached the contract and drove the Betzes out of business in 1981. However, Alaska Civil Rule 15(c) provides in part: (c) Relation Back of Amendments. Whenever the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the date of the original pleading. The relation-back rule has been very liberally applied. Estate of Thompson v. Mercedes-Benz, Inc., 514 P.2d 1269, 1273 (Alaska 1973). The theory behind the rule is that [a] party who is notified of the litigation concerning a given transaction or occurrence has been given all the notice that statutes of limitations are intended to afford. Id. ( quoting ) 3 J. Moore, Moore's Federal Practice, ¶ 15.15[3], at 1025 (2d ed. 1972). The Betzes' claim under AS 45.50.564 arises out of exactly the same conduct  CHS's breach of contract, cutting off hot water and other services and improper accounting  as that upon which they based their AS 45.50.562 claim and on which they continue to base their contract claim. The amendment therefore relates back under Rule 15(c) and is not time barred.