Washington Report 122006

Date Published: 
Original Author: 
Robert M. Fells
Original Publication: 
ICCFA Magazine

Michigan monument builders class action suit dismissed 

On October 27, the U.S. District Court in Michigan dismissed all allegations in the amended complaint by the Michigan Division of the Monument Builders of North America and individual plaintiffs against 20 cemetery companies and the Michigan Cemetery Association. Plaintiffs sought certification as a class action and alleged that the named defendants as a class represented all cemeteries located in the state of Michigan.
The complaint alleged that defendants illegally tied the sale of cemetery lots to the sale and installation of monuments, and also of monument-related services. The complaint also alleged that defendants illegally conspired to restrain trade and attempted to monopolize in violation of the Sherman Antitrust Act. Finally, the complaint alleged violation of the state preneed statute.
The court held that "a plaintiff must show the defendant has market power in the relevant product and geographic market to prove an antitrust violation…. Plaintiffs, however, do not allege that any of those 3,800 cemeteries [in the state] have market power in any geographic area broader than its own individual cemetery…. While a given defendant may not compete with every other cemetery in Michigan, it undoubtedly competes with at least other cemeteries in the city or county in which the cemetery is located." Thus, the court concluded that plaintiffs' alleged geographic market is too narrow as a matter of law.
Perhaps of greater importance, the court noted that a recent U.S. Supreme Court decision rejected the contention that the uniqueness of land confers market power. Noting the long history of related lawsuits since the 1980s, the court observed, " Despite the apparent high volume of antitrust actions filed by monument dealers against cemeteries over the past 20 years, plaintiffs are unable to cite a single case wherein the court has concluded that a bare allegation of market power based on the uniqueness of cemetery property, with no allegation respecting a defendant's share of the tying market, is sufficient to state an antitrust claim." Accordingly, the court dismissed the tying allegations on these grounds.
Also, the conspiracy allegations were dismissed on additional grounds based on plaintiffs' argument that " no cemetery in Michigan competes with any other cemetery because each has its own relevant geographic market over which it has monopoly power. Defendants assert that if the cemeteries do not compete with each other… there is no economic incentive for them to combine with each other to force out independent sellers of monuments because such sellers could already be excluded by unilateral decision of each cemetery. The court agrees that plaintiffs' conspiracy claims are practically and economically implausible."
Finally, with the federal claims dismissed, the court declined to exercise supplemental jurisdiction over the sole remaining state claim. Therefore, the court granted defendants' motions to dismiss and ordered plaintiffs' complaint to be dismissed in its entirety.