Court Opinion

ID: 4171156
Source: CourtListenerOpinion
Date Created: 2017-05-23 20:03:50.895836+00
Date Added: 2024-06-11T08:46:02.864976
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                            MAY 23 2017
                    UNITED STATES COURT OF APPEALS                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

STARLIGHT CINEMAS,                               No. 15-55217

              Plaintiff - Appellant,             D.C. No. 2:14-cv-05463-R-AS

 v.
                                                 MEMORANDUM*
REGAL ENTERTAINMENT GROUP,

              Defendant - Appellee.

                    Appeal from the United States District Court
                       for the Central District of California
                     Manuel L. Real, District Judge, Presiding

                          Submitted November 7, 2016**
                              Pasadena, California

Before: O’SCANNLAIN, FERNANDEZ, and RAWLINSON, Circuit Judges.

      Plaintiff-Appellant Starlight Cinemas (Starlight) appeals the district court’s

dismissal under Fed. R. Civ. P. 12(b)(6) and denial of leave to amend. Starlight

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
filed a complaint alleging that Regal Entertainment Group (Regal) violated the

Cartwright Act, Cal. Bus. & Prof. Code § 16720, California’s Unfair Competition

Law, Cal. Bus. & Prof. Code § 17200, and interfered with a prospective economic

advantage.

      The district court’s original dismissal of Starlight’s complaint without leave

to amend was an abuse of discretion because the district court provided no

justification for its decision not to allow leave to amend. “A simple denial of leave

to amend without any explanation by the district court is subject to reversal. Of

course, the grant or denial of an opportunity to amend is within the discretion of

the District Court, but outright refusal to grant the leave without any justifying

reason appearing for the denial is not an exercise of discretion; it is merely abuse

of that discretion and inconsistent with the spirit of the Federal Rules.” Sharkey v.

O'Neal, 778 F.3d 767, 774 (9th Cir. 2015) (citations omitted).

      The district court cured its error, however, when it explained in its

subsequent dismissal why Starlight’s first amended complaint and any future

amendments would be futile. See Novak v. United States, 795 F.3d 1012, 1020

(9th Cir. 2015) (“[T]he general rule that parties are allowed to amend their

pleadings does not extend to cases in which any amendment would be an exercise

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in futility or where the amended complaint would also be subject to dismissal. . .

.”) (citation, alteration, and internal quotation marks omitted).

      As this Court has long held, antitrust laws, including California’s Cartwright

Act, are about “the protection of competition, not competitors.” AT&T Mobility

LLC v. AU Optronics Corp., 707 F.3d 1106, 1112 (9th Cir. 2013) (emphases in the

original). Starlight failed to assert injury to competition in either of its complaints.

Instead, Starlight alleged that Regal used its position as a large national exhibitor

to secure clearance deals for “blockbuster” first-run films, leaving Starlight with

weaker performing first-run films. However, “an efficient, vigorous, aggressive

competitor is not the villain antitrust laws are aimed at eliminating. Fostering an

environment where businesses fight it out using the weapon of efficiency and

consumer goodwill is what the antitrust laws are meant to champion.” United

States v. Syufy Enters., 903 F.2d 659, 669 (9th Cir. 1990).

      Starlight also failed to assert sufficient specifics to support its allegations of

conspiracy. “[T]o allege an agreement between antitrust co-conspirators, the

complaint must allege facts such as a specific time, place, or person involved in the

alleged conspiracies to give a defendant seeking to respond to allegations of a

conspiracy an idea of where to begin. A bare allegation of a conspiracy is almost

impossible to defend against, particularly where the defendants are large

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institutions with hundreds of employees entering into contracts and agreements

daily.” Kendall v. Visa U.S.A., Inc., 518 F.3d 1042, 1047 (9th Cir. 2008) (citations

and internal quotation marks omitted). Without these essential facts, Starlight

cannot state a plausible claim. See Bell Atl. Corp. v. Twombly, 550 U.S. 544,

556-57 (2007).

       Starlight’s other allegations are predicated upon its Cartwright Act claim.

See City of San Jose v. Office of the Comm’r of Baseball, 776 F.3d 686, 691-92

(9th Cir. 2015); see also CRST Van Expedited, Inc. v. Werner Enters., Inc., 479
F.3d 1099, 1107, 1110 (9th Cir. 2007). Because we conclude that the district court

properly dismissed the Cartwright claim, Starlight’s derivative claims necessarily

fail. See id.

                AFFIRMED.

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