Franchise Realty Interstate Corporation and McDonald Systems of California, Inc. v. San Francisco Local Joint Executive Board of Culinary Workers

Plaintiffs (McDonald’s), two subsidiaries of McDonald’s Corporation, appeal from a judgment dismissing their first amended complaint without leave to amend, and the action (Rule 12(b)(6), F.R.Civ.P.), and from an order denying their motion, made after the judgment, for leave to file a second amended complaint (Rules 15(a) and 60(b)(6), F.R.Civ.P.). We affirm.

In the first amended complaint, McDonald’s alleged that the defendants, two associations of restaurant and hotel employers and a labor union, had combined and conspired, in violation of § 1 of the Sherman Act, 15 U.S.C. § 1 , to oppose, repeatedly, baselessly and in bad faith, the granting of building permits by the San Francisco Board of Permit Appeals (Board) for the construction of McDonald’s restaurants.

McDonald’s first amended complaint alleges that in 1971 McDonald’s, which operates two restaurants in San Francisco, applied for licenses for the operation of three more restaurants, that permits were granted by the San Francisco Department of Public Works, and that the defendants “persuaded” the San Francisco Board of Permit Appeals to overrule the issuance of the permits and to deny them.

*1079 Nowhere in the…

(dissenting):

As the majority succinctly puts it, McDonald’s alleged that defendants combined “to oppose, repeatedly, baselessly and in bad faith, the granting of building permits by the San Francisco Board of Permit Appeals (Board) for the construction of McDonald’s restaurants.” McDonald’s also alleged that defendants, by their repeated and baseless opposition to every McDonald’s application, intended to and did foreclose McDonald’s from “free and unlimited access” to the Board and “thereby interfere[d] directly with the business activities and relationships of a competitor.” Complaint, paragraph 18.

These allegations, together with averments of anticompetitive purposes and effect, state an antitrust claim under California Motor Transport Co. v. Trucking Unlimited, 404 U.S. 508 , 92 S.Ct. 609 , 30 L.Ed.2d 642 (1972): “A combination of entrepreneurs to harass and deter their competitors from having ‘free and unlimited access’ to the agencies and courts, to defeat that right by massive, concerted, and purposeful activities of the group are ways of building one empire and destroying another. If these facts are proved, a violation of the antitrust laws has been established.” Id.…

United States Court of Customs and Patent Appeals

(concurring):

I concur in the excellent opinion of Judge Duniway. The presence of Judge Browning’s strong and scholarly dissent, particularly its clear and forceful exposition of pleading considerations, prompts these few remarks.

I cannot find an allegation that defendants “did foreclose” free and unlimited access. Paragraph 18 alleges the defendants’ opposition was a coverup of a “plan” to foreclose. Moreover, it would appear that McDonald’s could not allege such foreclosure. It had full access. Whatever “free and unlimited” may mean, it cannot, in my view, require successful access or access unopposed. Nothing of record indicates that McDonald’s feared defendants’ opposition or that its freedom and ability to seek future permits was in any manner “chilled” by the expected opposition of defendants. On the contrary, as Judge Duniway’s opinion makes plain, the present suit for $11,-000,000 has an inherent chill factor with respect to defendants’ freedom to oppose future permits.

In any event, the case illustrates, in my view, an effect of the unhappy marriage of “notice” pleading and virtually unlimited discovery. * The “might…

542 F.2d 1076 1976-2 Trade Cases 61,102 FRANCHISE REALTY INTERSTATE CORPORATION and McDonald's Systems of California, Inc., Plaintiffs-Appellants, v. SAN FRANCISCO LOCAL JOINT EXECUTIVE BOARD OF CULINARY WORKERS et al., Defendants-Appellees. No. 73-2727. United States Court of Appeals, Ninth Circuit. Sept. 17, 1976. Rehearing and Rehearing In Banc Denied Nov. 2, 1976. Maxwell M. Blecher (argued), of Blecher, Collins & Hecker, Los Angeles, Cal., for plaintiffs-appellants. John Thomas Bowen (argued), of Davis, Cowell & Bowe, San Francisco, Cal., Michael Rubenstein (argued), San Francisco, Cal., James T. Fousekis (argued) of Steinhart, Goldberg, Feigenbaum & Lader, San Francisco, Cal., for defendants-appellees. Before BROWNING and DUNIWAY, Circuit Judges, and MARKEY, * Chief Judge, United States Court of Customs and Patent Appeals. DUNIWAY, Circuit Judge: 1 Plaintiffs (McDonald's), two subsidiaries of McDonald's Corporation, appeal from a judgment dismissing their first amended complaint without leave to amend, and the action (Rule 12(b)(6), F.R.Civ.P.), and from an order denying their motion, made after the judgment, for leave to file a second amended complaint (Rules…