Starlight Cinemas, Inc. v. Regal Entertainment Group , 691 F. App'x 404 ( 2017 )

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NOT FOR PUBLICATION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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