Uhr v. Responsible Hospitality Institute, Inc. et al

Filing 201

ORDER - Based on the foregoing, and on all of the files, records, and proceedings herein, IT IS HEREBY ORDERED THAT: Plaintiff's motion to amend 133 is GRANTED. Defendants' motions to dismiss - Docket Nos. 10 , 34 , 44 , 46 , [6 3], 66 , 73 , 75 , 83 , 86 , 92 , 94 , 99 , 102 , 107 , 110 , 128 , 142 , 147 , 152 are GRANTED. The second amended complaint 136 is DISMISSED WITH PREJUDICE AND ON THE MERITS. Defendant Jay Wanserski's motion for sanctions 177 is DENIED. Defendant Rick Petri's motion for sanctions 184 is DENIED. LET JUDGMENT BE ENTERED ACCORDINGLY.(Written Opinion). Signed by Judge Patrick J. Schiltz on 09/14/11. (bjs)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Case No. 10-CV-4945 (PJS/TNL)

STEVEN E. UHR,
Plaintiff,
v.
RESPONSIBLE HOSPITALITY
INSTITUTE, INC.; JIM PETERS; DIAGEO
NORTH AMERICA, INC.; GARY ZIZKA;
AMERICAN BEVERAGE LICENSEES,
INC.; JOHN D. BODNIVICH; DISTILLED
SPIRITS COUNCIL OF THE UNITED
STATES, INC.; WINE AND SPIRITS
WHOLESALERS OF AMERICA, INC.;
INTERNATIONAL DOWNTOWN
ASSOCIATION; APPLEBEE’S
INTERNATIONAL INC.; FAMOUS
DAVE’S OF AMERICA, INC.; CHILI’S OF
MINNESOTA INC.; PRUDENTIAL
FINANCIAL, INC.; CITIBANK, N.A.;
RICHARD A. YOAST; JAMES F.
MOSHER; ROBERT H. BRUININKS;
NATIONAL BEER WHOLESALERS
ASSOCIATION; RICHARD LYSHEK;
RICK PETRI; JAY WANSERSKI; LUBY’S
FUDDRUCKERS RESTAURANTS, LLC,

ORDER

Defendants.

Steven E. Uhr, plaintiff pro se.
David A. Schooler, Ellen A. Brinkman, Ankoor Bagchi, BRIGGS & MORGAN,
PA, for defendants Responsible Hospitality Institute, Inc., Jim Peters, American
Beverage Licensees, Inc., International Downtown Association, and John D.
Bodnivich.
Andrew M. Luger, Bethany D. Krueger, Erin Sindberg Porter, GREENE ESPEL
P.L.L.P.; D. Bruce Hoffman, HUNTON & WILLIAMS LLP, for defendants Diageo
North America, Inc. and Gary Zizka.

Thomas P. Kane, Shushanie E. Kindseth, HINSHAW & CULBERTSON LLP, for
defendant Distilled Spirits Council of the United States, Inc.
William L. Greene, Peter J. Schwingler, LEONARD STREET AND DEINARD, PA, for
defendant Wine and Spirits Wholesalers of America, Inc.
Alain M. Baudry, MASLON EDELMAN BORMAN & BRAND, LLP, for defendants
Applebee’s International Inc., Famous Dave’s of America, Inc., and Chili’s of Minnesota
Inc.
Justi R. Miller, Barbara P. Berens, BERENS & MILLER, P.A., for defendant Prudential
Financial, Inc.
Mark G. Schroeder, Kevin M. Decker, BRIGGS & MORGAN, PA, for defendant
Citibank, N.A.
Mark R. Whitmore, BASSFORD REMELE, for defendant Richard A. Yoast.
Michael D. Madigan, Richard M. Dahl, Jon R. Steckler, MADIGAN DAHL &
HARLAN, PA, for defendants James F. Mosher and National Beer Wholesalers
Association.
Brian J. Slovut, UNIVERSITY OF MINNESOTA, for defendant Robert H. Bruininks.
Richard A. Lyshek, defendant pro se.
Robert E. Salmon, Megan D. Yelle, MEAGHER & GEER, P.L.L.P., for defendant Rick
Petri.
Joshua L. Johanningmeier, Kendall W. Harrison, GODFREY & KAHN, for defendant
Jay Wanserski.
Jonathan D. Wilson, DORSEY & WHITNEY LLP, for defendant Luby’s Fuddruckers
Restaurants, LLC.
Plaintiff Steven Uhr is a man on a mission. Some years ago, he discovered the existence
of what he believes to be a vast nationwide conspiracy — involving literally thousands of
entities and individuals — to bring an end to “happy hour” and other drink promotions and
thereby increase the profit margins of bars and restaurants. Since discovering this conspiracy,

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Uhr has brought multiple lawsuits — first as an attorney representing others, now as a pro se
plaintiff representing only himself — seeking to recover damages from the alleged conspirators.
Uhr has not been discouraged by the fact that, to date, all of his lawsuits have been
dismissed. Nor has Uhr been discouraged by the fact that he has no evidence that he personally
has ever paid a penny more for a drink because of the alleged conspiracy. Nor has Uhr been
discouraged by the fact that many of those who he alleges are involved in this conspiracy —
including medical doctors, police officers, educators, scientists, and charitable foundations
dedicated to improving public health — would have no reason to join a conspiracy to help bars
and restaurants increase their profits on liquor sales. Nor has Uhr been discouraged by the fact
that some of those who he alleges are central to the conspiracy — in particular, distillers,
wholesalers, and distributors — would lose money if retailers raised drink prices and thereby
lowered alcohol consumption. Uhr plows ahead, filing lawsuit after lawsuit, seeking to force
defendants who appear to have caused him no harm to pay him millions of dollars in damages.
In this action, Uhr brings antitrust and RICO claims against 22 defendants, including four
chain restaurants with locations in Minnesota, the owners of several bars in Madison, Wisconsin,
numerous national retail and wholesale alcohol and restaurant trade associations, the former head
of alcohol policy at the American Medical Association, two major financial institutions, several
attorneys, a nonprofit organization, and the president of the University of Minnesota.1 Although

1

Defendant Robert H. Bruininks recently retired from his post as president of the
University of Minnesota. As Uhr avers that he sues Bruininks “in a representative capacity for
injunctive relief only,” Compl. ¶ 23, Bruinink’s successor, Eric W. Kaler, has been substituted
for Bruininks automatically by operation of Fed. R. Civ. P. 25(d). Because the Court is
dismissing this action with prejudice, however, it is not necessary to undertake the administrative
task of substituting Kaler’s name on the docket.
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this lawsuit focuses on what Uhr believes to be the Minnesota “branch” of the nationwide
conspiracy, Uhr has sued a seemingly random sampling of defendants who appear to have no
connection to Minnesota but who, Uhr alleges, are nevertheless part of the nationwide
conspiracy. For example, Uhr has sued an attorney who allegedly brokered a deal regarding the
sale of beer at “beer tents” during home football games at Camp Randall Stadium on the campus
of the University of Wisconsin in 2002. He has also sued Citibank, because the manager of one
of its branch offices in San Diego, California, served on the board of a local trade association
that allegedly supported a deal among a group of Pacific Beach bars to restrict drink specials in
2006. Uhr does not allege that he bought beer at Camp Randall in 2002 or a drink in Pacific
Beach in 2006, but he nonetheless alleges that the attorney and Citibank and thousands of others
like them are liable to him.
This matter is before the Court on 20 motions to dismiss filed by the defendants. Two
defendants also bring motions for sanctions. For the reasons stated below, the motions to
dismiss are granted and the motions for sanctions are denied.2
I. BACKGROUND
The basis of Uhr’s complaint is his allegation that there exists a huge nationwide
conspiracy to fix the prices of alcoholic beverages at bars and restaurants throughout the United
States and that the Minnesota “branch” of this conspiracy is carried out under the guise of

2

Uhr also moves for leave to file a second amended complaint. At the Court’s request,
defendants addressed the proposed second amended complaint in the briefs filed in support of
their motions to dismiss. The Court therefore grants Uhr’s motion for leave to file a second
amended complaint and treats it as the operative complaint for purposes of defendants’ motions.
All citations to the “complaint” in this order refer to the second amended complaint [Docket
No. 136]. The Court thanks Uhr and the defendants for their cooperation in streamlining and
coordinating what would otherwise have been an extraordinary amount of briefing.
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research conducted by the Alcohol Epidemiology Program at the University of Minnesota’s
School of Public Health. It is difficult to overstate the scope of the conspiracy that Uhr alleges.
In addition to the University of Minnesota, other institutions infiltrated by the conspiracy include
(according to Uhr) the Robert Wood Johnson Foundation, the American Medical Association,
Harvard University, and the University of Wisconsin. Compl. ¶ 102. The alleged conspiracy
spans several decades and involves distillers, wholesalers, and distributors of wine, beer, and
spirits, as well as alcohol retailers all over the country. According to Uhr, he was harmed by this
conspiracy when he purchased drinks at four restaurants in Minnesota: Applebee’s, Chili’s,
Fuddruckers, and Famous Dave’s. Compl. ¶ 88.
Uhr’s complaint mostly consists of a scattershot list of what appear to be isolated
instances of businesses in various locales agreeing to various types of price restrictions on
alcoholic beverages. But Uhr alleges that all of these incidents are part of the one massive
conspiracy. According to Uhr, the common thread tying together all of these incidents is the
involvement of defendant Responsible Hospitality Institute, Inc. (“RHI”).
A. RHI
RHI is a nonprofit organization headquartered in Santa Cruz, California. Compl. ¶ 2.
Defendant Jim Peters has been the president of RHI since it was founded in 1983. Compl. ¶¶ 3,
24. According to its website, RHI “assists businesses and communities [to] create safe and
vibrant places to socialize.” Compl. ¶ 27. RHI’s board of directors includes a number of
individuals and trade associations in the alcohol industry, including eight of the defendants in
this action:
•

Diageo North America, Inc. (“Diageo”), a subsidiary of the world’s largest
producer of beer, wine, and distilled spirits, Compl. ¶ 4;
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•

Gary Zizka, a vice president of Diageo who represents Diageo on RHI’s board,
Compl. ¶ 5;

•

American Beverage Licensees, Inc. (“ABL”), a national trade association of over
20,000 off-premise and on-premise alcohol retailers, Compl. ¶ 6;

•

John D. Bodnivich, the executive director of ABL, who represents ABL on RHI’s
board, Compl. ¶ 7;

•

Distilled Spirits Council of the United States, Inc. (“DISCUS”), a national trade
association representing the country’s leading distillers, Compl. ¶ 8;

•

Wine and Spirits Wholesalers of America, Inc. (“WSWA”), a national trade
association representing the wholesale tier of the wine and spirits industry,
Compl. ¶ 9;

•

National Beer Wholesalers Association (“NBWA”), a national trade association
representing the wholesale tier of the beer industry, Compl. ¶ 10; and

•

International Downtown Association (“IDA”), a worldwide association of over
600 community-business trade associations, Compl. ¶ 11.

Four of the defendants on RHI’s board (Diageo, DISCUS, WSWA, and NBWA) also underwrite
RHI’s activities. Compl. ¶¶ 4, 8, 9, 10.
Uhr alleges that, under the guise of offering consulting services on “responsible beverage
service” and “responsible hospitality,” RHI in fact facilitates price-fixing agreements on retail
alcohol sales in communities throughout the United States and Canada. Compl. ¶¶ 24-25, 48. In
particular, RHI urges alcohol retailers not to serve discounted drinks and advocates the creation
of “community covenants . . . to discourage this type of marketing practice.” Compl. ¶ 44. RHI
holds seminars and other events at which, Uhr alleges, it provides information on price-fixing
methods to community leaders and owners and managers of licensed retailers. Compl. ¶ 26. For
example, at a 2005 conference in Vermont, RHI personnel told attendees that “[p]rice
competition in the hospitality industry” has consequences that are “not positive,” that “[d]rink

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specials often indicate an establishment that is in trouble,” and that “[c]ollaboration between
owners will help to discourage this type of price war.” Compl. ¶ 44.
Uhr identifies a 1989 video entitled “Responsible Beverage Service” as a “conspiracy
training/recruitment video” that has been distributed to bar owners and managers throughout the
United States. Compl. ¶¶ 33-34; see also Uhr Aff. Ex. 1 [hereinafter “RBS Video”]. The RBS
video was a coproduction of the Stanford Health Promotion Resource Center and the Marin
Institute for the Prevention of Alcohol and Other Drug Problems. RBS Video 00:28.
Defendants Peters (RHI’s president) and James Mosher also produced and appeared in the
video.3 Compl. ¶ 33. Mosher is a California attorney and the president of an organization called
Alcohol Policy Consultations. Compl. ¶ 22. Mosher has spoken at RHI events and has worked
with defendant Richard Yoast — who until recently was in charge of alcohol policy at the
American Medical Association — in developing the AMA’s alcohol policies. Compl. ¶¶ 21-22,
31.
The RBS video advocates cooperation between the hospitality industry, public-health
officials, and law-enforcement officials to raise awareness about the problems associated with
excessive drinking. The RBS video further advocates addressing these problems through the
adoption of community standards and “responsible beverage service” training programs. Twice
during the 25-minute video, speakers mention drink promotions: (1) once when a speaker refers
to a study done at the San Diego Naval Club, which found that server training and eliminating

3

Uhr does not directly allege that RHI made or distributed the RBS video. But Uhr
implies a link between RHI and the RBS video by discussing the video in the midst of his
allegations about RHI. Apparently Uhr sees a link because RHI president Peters produced and
appeared in the video and Mosher (who also produced and appeared in the video) has spoken at
RHI events.
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pitcher sales reduced rates of intoxication by 50 percent, RBS Video 12:21-13:03; and (2) once
when a bar manager, while discussing how to reduce sales to problem customers, says that “I
don’t think that by selling more drinks or giving them away at two-for-one that you’re really
doing yourself any good,” RBS Video 19:55-20:04.
B. The Minnesota Conspiracy
Uhr alleges that the Minnesota branch of the conspiracy was conducted in part through
the Alcohol Epidemiology Program at the University of Minnesota’s School of Public Health.
Compl. ¶¶ 49, 51. The Alcohol Epidemiology Program administers an “alcohol risk
management” (“ARM”) program which recommends that bars and restaurants adopt written
policies about alcohol service, and include as part of those policies the elimination of drink
promotions. Compl. ¶¶ 49, 51. Defendants Peters and Mosher consulted on the development,
implementation, and evaluation of the ARM program, Compl. ¶ 54, and attorneys, hospitality
businesses, and insurance agents were involved in developing the ARM program, Compl. ¶ 50.
In his complaint, Uhr cites two materials associated with the ARM program: a 1997
video entitled “ARM Yourself with Information” and an academic study of the effectiveness of
the ARM program published in 2008. Compl. ¶¶ 55, 58; Slovut Aff. ¶¶ 2-3 & Ex. A [hereinafter
“Article”], Ex. B [hereinafter “ARM Video”]. The ARM video is part of a training package for
owners and managers of licensed establishments and is geared toward convincing those
establishments to adopt written policies that will prevent the serving of alcohol to underage or
intoxicated patrons. Uhr alleges that the ARM video advocates that establishments agree to
restrictions on drink promotions, Compl. ¶ 55, but the only instance of such advocacy in the
video that Uhr can identify is a dramatized staff meeting in which restaurant workers are shown

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discussing alcohol policies and a document containing such policies is displayed on screen for
approximately two seconds. It is impossible to read the document while watching the video, but
if the video is paused, it is possible to discern that the policies described in the document include
restrictions on drink promotions. ARM Video 6:41. Uhr alleges that, like the RBS video, the
ARM video is a “conspiracy training/recruitment” video.4 Compl. ¶ 55.
In 2008, University of Minnesota researchers (along with researchers from several other
academic institutions) published the results of a study that they had conducted of the ARM
program’s effectiveness in reducing the sale of alcohol to obviously intoxicated patrons and in
increasing the adoption of alcohol policies and practices. Article 406. The study worked as
follows: Researchers randomly assigned licensed establishments either to a full version of the
ARM program (which involved four one-on-one training sessions with the establishment’s
manager) or to an abridged version (which involved only one training session). Article 406.
Trainers were people with experience in the hospitality industry. Compl. ¶ 50; Article 406. All
training was completed between September 2002 and August 2004. Article 406.
The trainers recommended 18 alcohol-control policies, each of which the establishments
were free to adopt or reject. Article 409, 411. One of the 18 recommended policies was to
prohibit drink promotions. Article 411. Of the establishments who participated in the full
training, 55 percent fully implemented the recommendation to prohibit drink promotions, and an
additional 17 percent partially implemented that recommendation. Article 411. On average, the
establishments that participated in the full training adopted 13 of the 18 recommended policies.

4

Uhr previously brought a pro se state-court antitrust action under Minnesota law based at
least in part on the ARM video. See Baudry Decl. Ex. 1 (November 1, 2010 order granting
defendants’ motions for judgment on the pleadings).
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Article 409. But a followup survey found no differences in reported policies between
participating establishments and establishments that did not participate in any training at all,
Article 411, and the researchers did not know whether the participating establishments enforced
the policies after training concluded, Article 410. Nevertheless, Uhr alleges that “[m]any
licensed establishments in the [T]win [C]ities still follow and abide by the ARM pricing
restrictions.” Compl. ¶ 59.
Approximately 230 Minnesota establishments agreed to participate in the study,
including Applebee’s, Chili’s, Fuddruckers, and Famous Dave’s. Compl. ¶¶ 53, 56; Article 405.
Uhr alleges that, as a result of their participation in the ARM training, Applebee’s, Chili’s,
Fuddruckers, and Famous Dave’s all agreed to and did eliminate or reduce drink discounts.
Compl. ¶ 56. Uhr further alleges that he purchased alcoholic beverages from Applebee’s,
Chili’s, Fuddruckers, and Famous Dave’s in the Twin Cities during the course of the conspiracy.
Compl. ¶ 88. Although Applebee’s, Chili’s, and Famous Dave’s all have multiple locations in
the Twin Cities, Compl. ¶¶ 12-14, Uhr does not allege which particular locations were involved
or where in particular he bought his drinks. Uhr also does not allege when he bought his drinks,
other than that it was “during the course of the charged conspiracy.” Compl. ¶ 88. At oral
argument, when asked which of these restaurants have failed to offer him a drink special since
they participated in the ARM program, Uhr admitted that he did not know. In other words, Uhr
admitted that he does not know whether he has ever paid more for a drink because the
restaurants that he has sued participated in the ARM program.
C. Price Fixing in Other States

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As noted, Uhr also alleges a number of price-fixing agreements in other states which, like
the ARM program, are part of the same nationwide conspiracy. Specifically, Uhr alleges price
fixing in Milwaukee, Wisconsin; Madison, Wisconsin; Hollywood, California; San Diego,
California; and Breckenridge, Colorado.
1. Milwaukee
In 1995, approximately 18 grocery and convenience stores in Milwaukee agreed to fix
minimum prices on 40-, 32-, and 20-ounce beer bottles. Compl. ¶ 82 & Ex. 6. The connection
between this incident and the alleged nationwide conspiracy facilitated by RHI is not explained.
But Uhr also alleges that, in 2009, the Milwaukee Downtown Business Improvement District
hired RHI to facilitate collusion among licensed establishments in Milwaukee. Compl. ¶ 83.
Uhr does not allege that any actual price fixing resulted.
2. Madison
In September 2002, approximately two dozen Madison bars issued a press release
announcing that they were ending all drink specials after 8:00 p.m. on Friday and Saturday
nights.5 Compl. ¶ 60 & Exs. 2, 3. Participants in this agreement included defendants Richard
Lyshek and Jay Wanserski, both of whom owned bars in Madison. Compl. ¶ 61. Defendant

5

This agreement was the subject of two previous lawsuits in which Uhr participated as an
attorney. In the first case, Uhr represented a group of plaintiffs who brought Wisconsin statelaw antitrust claims against the bars involved in the agreement. See Eichenseer v. MadisonDane Cnty. Tavern League, Inc., 748 N.W.2d 154 (Wis. 2008). The Wisconsin Supreme Court
ultimately affirmed summary judgment for the defendants on the ground that the bars were
immune from antitrust liability because they were acting solely in response to pressure from city
officials to “police themselves” or face a ban on all drink specials after 8:00 p.m. every day of
the week. Id. at 722-23, 727-30. While Eichenseer was on appeal, Uhr, again acting as an
attorney, brought a similar case in federal court. See Dougherty v. Tavern League of Wis., Inc.,
No. 05-CV-0584 (W.D. Wis. filed Oct. 5, 2005). The Dougherty plaintiffs ultimately stipulated
to dismissal with prejudice in October 2008. Id. Docket No. 89.
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Rick Petri, a Madison attorney and longtime member of a Robert Wood Johnson Foundation
subcommittee concerning alcohol policy, was involved in organizing and implementing the
agreement. Compl. ¶¶ 17, 62, 69. Uhr alleges that the University of Wisconsin facilitated the
agreement and that the University’s efforts were part of a program administered by defendant
Richard Yoast of the American Medical Association and funded by a grant from the Robert
Wood Johnson Foundation. Compl. ¶¶ 65-68. In addition, Uhr alleges a separate 2002 incident
in which Petri facilitated a meeting among licensed establishments near Camp Randall Stadium
for the purpose of limiting output at outdoor beer tents during home football games. Compl. ¶ 63
& Ex. 4.
Uhr also alleges that, in 2008, RHI contracted with Downtown Madison Inc. (“DMI”), a
Madison trade association that is a member of defendant IDA. Compl. ¶ 70. Petri is a member of
DMI’s board. Compl. ¶ 70. After conducting an assessment of the hospitality industry in
downtown Madison, Uhr alleges, RHI recommended that bars and restaurants enter into
marketing covenants to limit drink specials. Compl. ¶ 71. Uhr alleges that Lyshek, Wanserski,
and Petri participated in RHI’s 2008 Madison activities, Compl. ¶ 72, and that defendants
NBWA and WSWA are involved in monitoring establishments in Madison to ensure compliance
with the price-fixing agreement, Compl. ¶ 73.
3. Hollywood
In 2005, a group of (unidentified) licensed establishments in Hollywood, California
allegedly agreed not to offer any “reduced price alcoholic beverage promotion.” Compl. ¶ 86 &
Ex. 9.6 Uhr alleges that the agreement was facilitated by RHI and spearheaded by a woman
6

The nature of the document attached to the complaint as Exhibit 9, on which Uhr
(continued...)
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named Elizabeth Peterson, who is the owner of several nightclubs and a regular speaker at RHI
events. Compl. ¶¶ 86-87.
4. San Diego
In August 2006, approximately 30 licensed establishments in San Diego announced that
they had adopted a “community covenant” under which they agreed not to participate in
promotions that encourage overconsumption or to advertise two-for-one drink specials or prices
below $2.00 for any drink. Compl. ¶ 74 & Ex. 5. Uhr alleges that Mosher and RHI were
involved in facilitating the agreement and monitoring its operation. Compl. ¶ 77. Referring to
the agreement, an RHI staff member said that “[b]usinesses make more money because they are
not selling alcohol at a loss” and “if all the bars do it they remain competitive.” Compl. ¶ 78.
Uhr also alleges that a local trade association called “Discover Pacific Beach” (“DPB”)
was involved in facilitating the agreement. Compl. ¶ 77. Among the members of DPB’s board
of directors were managers at Citibank San Diego and Prudential San Diego, who represented
Citibank’s and Prudential’s interests on the board. Compl. ¶¶ 80-81. On this basis, Uhr has sued
Citibank and Prudential in this lawsuit, alleging that these institutions benefitted financially from
the nationwide price-fixing conspiracy (although he does not explain how). Compl. ¶¶ 80-81.
5. Breckenridge
In March 2008, 16 licensed establishments in Breckenridge, Colorado agreed that they
would not offer “shot specials” for less than $3.00 or any drink specials after midnight. Compl.
¶ 84 & Exs. 7-8. Uhr alleges that RHI facilitated the agreement — and also alleges, apparently

6

(...continued)
apparently bases his allegations, is unclear, but it appears to be a list of conditions relating to
some kind of regulatory action rather than an agreement of any kind.
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by way of support, that the Breckenridge Chief of Police spoke at an RHI event in Denver in
June 2010. Compl. ¶¶ 84-85.
II. ANALYSIS
A. Standard of Review
In reviewing a Rule 12(b)(6) motion, a court must accept as true all factual allegations in
the complaint and draw all reasonable inferences in the plaintiff’s favor. Blankenship v. USA
Truck, Inc., 601 F.3d 852, 853 (8th Cir. 2010). But the plaintiff must do more than offer “labels
and conclusions” or a “formulaic recitation of the elements of a cause of action . . . .” Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). Instead, the “factual allegations must be
enough to raise a right to relief above the speculative level . . . .” Id.
Ordinarily, if the parties present, and the court considers, matters outside of the
pleadings, a Rule 12(b)(6) motion must be treated as a motion for summary judgment. Fed. R.
Civ. P. 12(d). But the court may consider exhibits attached to the complaint and documents that
are necessarily embraced by the complaint without converting the motion into one for summary
judgment. Mattes v. ABC Plastics, Inc., 323 F.3d 695, 697 n.4 (8th Cir. 2003). In addition, the
court may properly consider public records, including court records, on a motion to dismiss.7
Levy v. Ohl, 477 F.3d 988, 991 (8th Cir. 2007).

7

In particular, the Court has considered the RBS video, the ARM video, and the 2008
research article, all of which are referred to in the complaint, see Compl. ¶¶ 33, 55, 58, as well as
the public records from Uhr’s other antitrust cases and the exhibits attached to Uhr’s complaint.
The Court did not consider any other materials submitted by the parties.
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B. Count I: Sherman Act
Uhr brings a claim under § 1 of the Sherman Act, 15 U.S.C. § 1. Section 1 of the
Sherman Act prohibits “[e]very contract, combination in the form of trust or otherwise, or
conspiracy, in restraint of trade or commerce among the several States, or with foreign
nations . . . .” Twombly, which also involved a claim under § 1 of the Sherman Act, makes clear
that a conclusory allegation of conspiracy does not suffice. Instead, “stating [a § 1] claim
requires a complaint with enough factual matter (taken as true) to suggest that an agreement was
made.” Twombly, 550 U.S. at 556. “[A]n allegation of parallel conduct and a bare assertion of
conspiracy will not suffice. Without more, parallel conduct does not suggest conspiracy, and a
conclusory allegation of agreement at some unidentified point does not supply facts adequate to
show illegality.” Id. at 556-57.
Uhr alleges that defendants engaged in a nationwide price-fixing conspiracy under which
they agreed to — or encouraged others to agree to — stop offering drink specials. As discussed
above, Uhr has alleged isolated instances of local price-fixing agreements in other states. But
Uhr does not allege that he ever bought a drink in those other states from one of the members of
those local conspiracies. Instead, Uhr relies on his allegation that he purchased drinks from
Applebee’s, Chili’s, Fuddruckers, and Famous Dave’s in the Twin Cities.8 Compl. ¶ 88. The
critical question, then, is whether Uhr has alleged sufficient facts showing that Applebee’s,
Chili’s, Fuddruckers, and Famous Dave’s restaurants in Minnesota were part of a price-fixing
conspiracy.

8

Uhr also alleges that, “[u]pon information and belief,” he has purchased alcohol from
other establishments that are participants in the charged conspiracy. Compl. ¶ 88. This vague
allegation does not add anything to his more specific allegations of purchases, however.
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Uhr alleges that these restaurants agreed to participate in ARM training administered by
the School of Public Health at the University of Minnesota. Based on their participation in this
training, Uhr alleges that they conspired to fix the prices of drinks. But the gulf between the
facts that Uhr alleges and the conclusions that Uhr draws is vast, and it is unbridged by
reasonable inferences or even common sense.
The first problem is that, as Uhr admitted at oral argument, there is nothing illegal about
public-health experts at a university urging bars and restaurants not to offer drink specials
because such specials encourage excessive drinking and are bad for public health. And as Uhr
also admitted, even if some of the bars and restaurants are persuaded by the university to stop
offering drink specials, there would be no Sherman Act violation because the bars and
restaurants would be acting individually, and not pursuant to an agreement. Indeed, an
allegation that certain bars and restaurants decided to stop offering drink specials in response to a
recommendation from a university would undermine the notion that the bars and restaurants
were conspiring with each other by providing an obvious, non-collusive explanation for the bars’
and restaurants’ behavior. As the ARM video emphasizes, bars and restaurants face potentially
ruinous liability under dram shop laws if they serve alcohol to underage or intoxicated patrons.
It would be as if, in Twombly, the plaintiffs had alleged not only the parallel conduct that the
Supreme Court found insufficient, but had also alleged that disinterested and respected outsiders
had independently urged the defendants to act as they did to avoid huge legal liability. That
additional allegation would only have hurt the Twombly plaintiffs’ case — a case that was
deemed insufficient by the Supreme Court even in the absence of such an allegation.

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When asked at oral argument to explain how the allegations in the complaint differ from
what even Uhr admits is perfectly legal behavior — that is, bars and restaurants independently
deciding not to offer drink specials in response to a recommendation from an academic
institution — Uhr argued that the idea for the ARM program did not originate with the
University of Minnesota, but was rather the brainchild of the hospitality industry. This claim is
apparently the basis of Uhr’s contention that the ARM program was a cover for price fixing.
Compl. ¶ 56.
Even if Uhr had included such an allegation in his complaint — and, as noted below, he
did not — the leap between that allegation and an illegal conspiracy would be enormous. To
infer a conspiracy, one would have to infer that: (1) in order to provide cover for price fixing,
people in the hospitality industry decided to ask a major public university to create an alcoholtraining program and conduct a research study large enough to provide such cover; (2) the
university agreed to this request and, over a period of years, managed to procure funding from a
major philanthropic organization, design the program — which, it should be noted, does not
even require, but merely recommends, that businesses discontinue drink promotions — and
conduct the study; and (3) the participants in the study knew that this was all cover for a pricefixing agreement reached years earlier.9 Uhr’s allegation is facially preposterous, and, without
some “factual enhancement” to support this far-fetched scenario, Uhr’s claim “stops short of the
line between possibility and plausibility.” Twombly, 550 U.S. at 557.

9

The complaint does not allege when the ARM program was first conceived, but any
conspiracy to get the University to create the ARM program as a cover for price fixing must
have been formed before the ARM video was produced in 1997. As discussed earlier, the
training that was part of the study was conducted from September 2002 to August 2004.
-17-

Uhr, however, includes no such “factual enhancement.” Indeed, he does not even allege
that the hospitality industry asked the University to develop and implement the ARM program,
much less identify who those people are, when they made their request, or how they are
connected to anyone at Applebee’s, Chili’s, Fuddruckers, or Famous Dave’s. Instead, he
generally alleges that people in the hospitality industry were involved in the development of the
ARM program, that industry people appear in ARM training materials, and that all of the ARM
trainers had experience in the hospitality industry. But these allegations are entirely consistent
with the far more rational inference that researchers in the University’s Alcohol Epidemiology
Program independently decided to create an alcohol-training program and consulted people in
the hospitality industry in the design and implementation of that program (which, in fact, is
exactly what the 1997 ARM video and the 2008 research article say about the ARM program).
After all, the researchers were concerned about the sale of alcohol in the hospitality industry; it
would have been foolish for them not to consult with the industry in designing the program or to
ask people with experience in the industry to conduct the training.
Rather than supporting Uhr’s implausible inference of a hidden price-fixing conspiracy,
the facts alleged by Uhr are far more consistent with the inference that everybody involved in the
ARM program was doing exactly what they appear to have been doing: The University
researchers were, in fact, conducting a study regarding means to combat the excessive use of
alcohol; the University researchers did, in fact, consult people in the industry that they were
studying in order to better design and implement their study; the participating bars and
restaurants were, in fact, motivated to take part in the study because of their concern about dramshop liability; and the participants in the study each, in fact, made a unilateral decision about

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whether and to what extent to implement each of the study’s many recommendations. Cf.
Kramer v. Pollock-Krasner Found., 890 F. Supp. 250, 256 (S.D.N.Y. 1995) (“Sotheby’s and
Christie’s have an independent interest in not selling forgeries because of potential damage to
their reputations, not to mention legal liability. . . . Thus, while Kramer may believe the
defendants conspired to keep Pollock paintings off the market, the defendants’ allegedly
conspiratorial actions could equally have been prompted by lawful, independent goals which do
not constitute a conspiracy.”), cited with approval in Twombly, 550 U.S. at 566-67.
Uhr tries to save his claim by pointing to his allegation that, in course of creating the
ARM program, the University talked to Peters and Mosher, who are connected to RHI, which is
connected to price-fixing agreements in various locales. But even assuming that Uhr has
sufficiently alleged that RHI has organized price-fixing agreements in other places, Uhr’s
allegation that the University talked to Peters and Mosher in the course of designing and
implementing the ARM program is not enough to show that the ARM program was itself
unlawful. The mere fact of contact between University researchers, on the one hand, and Peters
and Mosher, on the other hand, is not a sufficient basis to infer that the ARM program was
designed as a cover for price fixing. Moreover, there is no allegation that the University created
the ARM program at Peters’s and Mosher’s behest, which means that Uhr’s allegations about
Peters and Mosher are no more effective in creating a plausible claim of conspiracy than his
allegations about consultations with unnamed people in the hospitality industry.
Uhr’s claims regarding a Minnesota conspiracy involving Applebee’s, Chili’s,
Fuddruckers, and Famous Dave’s also fails because his allegations about these restaurants’
actual price fixing — and his allegations about the damages that he allegedly suffered as a result

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of the price fixing — are so vague as to fail to meet the standards of Fed. R. Civ. P. 8. Uhr
admitted, at oral argument, that he does not know whether any of the restaurants that he has sued
have failed to offer him a drink special because of their participation in the ARM program. This
is at odds with his allegation — apparently made in violation of Fed. R. Civ. P. 11 — that, “upon
information and belief,” these restaurants “eliminate[d] or reduce[d] the offering of drink
discounts as a result of their involvement in ARM.” Compl. ¶ 56. Even accepting this allegation
as true despite Uhr’s admission that he has no basis for it, Uhr’s admission highlights the factual
insufficiency of his antitrust claim.10
Uhr, of all people, should know when and where he purchased his drinks; indeed, as
between him and defendants, Uhr is the only one who could know. And Uhr should also know
whether he was offered a drink special when he purchased his drinks. Nevertheless, Uhr fails to
include any such factual matter in his complaint. Although he acknowledges that the Twin
Cities have 20 Applebee’s restaurants, 10 Chili’s restaurants, and 15 Famous Dave’s restaurants,
Uhr does not identify the location of any Applebee’s, Chili’s, or Famous Dave’s where he
purchased a drink. Nor does he identify when he purchased a drink at any of these restaurants
(or at the one Fuddruckers). Indeed, Uhr’s failure to identify when he purchased his drinks
means that he has not even alleged parallel conduct, which makes his conspiracy allegation even
weaker than that found insufficient in Twombly. And Uhr does not allege — because he
10

Uhr’s only basis for alleging that the Minnesota restaurants curtailed drink specials
appears to be the fact that they participated in ARM training. But the fact that a restaurant
participated in ARM training does not mean that the restaurant eliminated or reduced drink
specials. As discussed above, ARM participants were not required to eliminate or reduce drink
specials; instead, curtailing drink specials was one of 18 recommendations presented to them by
the University of Minnesota. A substantial percentage of the ARM participants rejected the
recommendation that drink specials be curtailed, and Uhr does not know whether the restaurants
where he bought his drinks were among this group.
-20-

admittedly does not know — that any of these restaurants were failing to offer drink discounts at
the time that he purchased his drinks.
“Determining whether a complaint states a plausible claim for relief [is] . . . a contextspecific task that requires the reviewing court to draw on its judicial experience and common
sense.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1950 (2009). In the context of this case, common
sense dictates that Uhr should be able to allege when and where he purchased his drinks and
whether the restaurants at which he purchased his drinks were offering drink specials at the time.
Uhr’s failure to do so renders his claim that these restaurants engaged in price fixing implausible.
Uhr’s § 1 claim against the remaining defendants fares no better. To begin with, Uhr’s
only basis for bringing the remaining defendants into this lawsuit is that they were allegedly part
of a nationwide conspiracy that harmed Uhr when he purchased drinks at restaurants in
Minnesota. But as Uhr has failed to adequately allege any conspiracy in Minnesota, Uhr
necessarily has failed to adequately allege any conspiracy involving the remaining defendants.
Cf. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 584 n.7 (1986) (“However
one decides to describe the contours of the asserted conspiracy — whether there is one
conspiracy or several — respondents must show that the conspiracy caused them an injury for
which the antitrust laws provide relief. . . . That showing depends in turn on proof that
petitioners conspired to price predatorily in the American market, since the other conduct
involved in the alleged conspiracy cannot have caused such an injury.”).
But even if Uhr had adequately alleged a conspiracy in Minnesota, he has not alleged
facts plausibly suggesting that such a conspiracy is part of a larger, nationwide conspiracy. As
noted, the only connection between Minnesota and the nationwide conspiracy is the allegation

-21-

that, in the course of designing the ARM program, the University of Minnesota spoke to Peters
and Mosher. Even if this were enough to show that there was a conspiracy to fix prices in
Minnesota — which, for the reasons discussed above, it is not — the fact that researchers at the
University of Minnesota had contact with Peters and Mosher does not mean that the restaurants
who participated in the University’s study conspired with every bar and restaurant with which
either Peters or Mosher has had contact in the past.
Likewise, Uhr’s ability to point to connections between people involved in the various
alleged local conspiracies does not mean that the local conspiracies are part of a single
nationwide conspiracy. The fact (if it is a fact) that RHI encouraged bar owners in Pacific
Beach, California to agree to fix prices in 2006 and then encouraged bar owners in Breckenridge,
Colorado to agree to fix prices in 2008 does not mean that the bar owners in Pacific Beach
reached an agreement with the bar owners in Breckenridge. As Uhr admitted at oral argument,
there is no reason why bar owners in one state would agree to fix prices with bar owners in
another state. After all, they operate in totally different markets.
It is true, as Uhr argues, that conspirators need not know one another in order to be
involved in the same conspiracy. United States v. Barraza Cazares, 465 F.3d 327, 333 (8th Cir.
2006). But the conspirators must nevertheless share a common purpose or objective. See United
States v. Faulkner, 636 F.3d 1009, 1021 (8th Cir. 2011). Here, the alleged retail conspirators in
one locale share no common purpose with the alleged retail conspirators in the other locales.
They are not part of a single chain of distribution, they cannot affect prices in each other’s
markets, and they do not profit from each other’s activities.11
11

It is also worth noting that Uhr cannot provide any plausible reason — other than
(continued...)
-22-

Because Uhr has failed to allege a plausible Minnesota conspiracy or any plausible
connection between any such conspiracy and the allegedly conspiratorial activities in other
states, the Court grants defendants’ motions to dismiss Count I.
C. Count II: RICO
Uhr also brings a claim under 18 U.S.C. § 1962(c), part of the Racketeer Influenced and
Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961-1968. Section 1962(c) makes it illegal
“to conduct or participate” in an “enterprise’s affairs through a pattern of racketeering
activity . . . .” The elements of a claim under § 1962(c) are (1) the conduct (2) of an
enterprise (3) through a pattern (4) of racketeering activity. Sedima, S.P.R.L. v. Imrex Co., 473
U.S. 479, 496 (1985).
Uhr alleges that the “enterprise” in this case is the nationwide conspiracy to fix retail
alcohol prices. Compl. ¶ 101. As discussed above, however, Uhr has failed to plausibly allege
(1) the existence of a Minnesota conspiracy, (2) any facts suggesting that a Minnesota
conspiracy was part of the nationwide conspiracy, or indeed (3) the existence of the nationwide

11

(...continued)
completely unsupported speculation about unspecified kickbacks — why the distillers,
wholesalers, and distributors that are a large part of RHI’s board would want to fix retail alcohol
prices and thereby reduce the amount of alcohol being sold. As Uhr admitted at oral argument,
such price fixing would likely hurt these businesses’ bottom lines. Cf. Matsushita, 475 U.S. at
596-97 (“Lack of motive bears on the range of permissible conclusions that might be drawn from
ambiguous evidence: if petitioners had no rational economic motive to conspire, and if their
conduct is consistent with other, equally plausible explanations, the conduct does not give rise to
an inference of conspiracy.”); Kramer, 890 F. Supp. at 256 (“The complaint fails to support the
existence of a conspiracy because it presents no coherent theory of participation by Sotheby’s or
Christie’s in the alleged conspiracy. . . . Sotheby’s and Christie’s lack a rational motive to
conspire with the Pollock-Krasner defendants to establish a monopoly.”).
-23-

conspiracy. Without any plausible allegations of a nationwide conspiracy, Uhr’s RICO claim
lacks the essential element of an enterprise.12
Uhr’s RICO claim also fails because he has failed to properly allege any predicate acts of
racketeering activity. Uhr alleges that the predicate acts in this case are mail and wire fraud. See
18 U.S.C. § 1961(1) (defining “racketeering activity” to include mail and wire fraud). In order
to make out a claim of mail or wire fraud, however, Uhr must allege: “(1) a scheme to defraud by
means of material false representations or promises, (2) intent to defraud, (3) reasonable
foreseeability that the mail would be used, and (4) [that] the mail [or interstate wiring] was used
in furtherance of some essential step in the scheme.”13 United States v. McKanry, 628 F.3d
12

Even if Uhr had properly alleged a nationwide conspiracy, the lack of any plausible
connection between that conspiracy and the Minnesota restaurants patronized by Uhr means that
Uhr has not been “injured in his business or property by reason of a violation of section 1962,”
which is necessary for him to recover under RICO. 18 U.S.C. § 1964(c); Holmes v. Sec. Investor
Prot. Corp., 503 U.S. 258, 268 (1992) (a plaintiff can sue under § 1964(c) only if the alleged
RICO violation was a proximate cause of the plaintiff’s injury).
13

Several older Eighth Circuit cases state that mail and wire fraud do not require proof of
a misrepresentation of fact and that therefore “a RICO claim based upon the predicate acts of
mail or wire fraud does not require an allegation of a misrepresentation or common law fraud.”
Murr Plumbing, Inc. v. Scherer Bros. Fin. Servs. Co., 48 F.3d 1066, 1069 (8th Cir. 1995). But
these older cases must be read in light of Neder v. United States, 527 U.S. 1 (1999), which held
that “materiality of falsehood is an element of the federal mail fraud, wire fraud, and bank fraud
statutes.” Id. at 25.
Nevertheless, there is at least one post-Neder Eighth Circuit RICO case that persists in
stating that a factual misrepresentation is not a necessary element of mail and wire fraud. See
Abels v. Farmers Commodities Corp., 259 F.3d 910, 918 (8th Cir. 2001) (“A plaintiff may, but
need not, allege that a defendant made misrepresentations of fact.”). Abels can be reconciled
with Neder, however, by recognizing that mail and wire fraud do not require a misrepresentation
about an existing fact, but also encompass material false promises about the future. See Neder,
527 U.S. at 24 (discussing Durland v. United States, 161 U.S. 306 (1896)). In any event, more
recent Eighth Circuit cases seem to recognize that, to allege a predicate act of mail or wire fraud
for purposes of RICO, a plaintiff must allege a material falsehood. See Schoedinger v. United
Healthcare of Midwest, Inc., 557 F.3d 872, 878-79 (8th Cir. 2009) (“While a plaintiff’s
(continued...)
-24-

1010, 1017 (8th Cir. 2011) (citation and quotations omitted). Fed. R. Civ. P. 9(b), which
requires that fraud be pleaded with particularity, applies to allegations of mail and wire fraud
when pleaded as predicate acts for a RICO claim. See Murr Plumbing, Inc. v. Scherer Bros. Fin.
Servs. Co., 48 F.3d 1066, 1069 (8th Cir. 1995).
Uhr’s complaint nowhere identifies the scheme to defraud or any material false
representations or promises. Instead, Uhr’s allegations of mail and wire fraud are simply
conclusory recitations of the elements of these crimes. See Compl. ¶ 99 (“Defendants and others
have voluntarily and intentionally devised and engaged in a scheme to defraud another of money
and have engaged in specific fraudulent acts pursuant to that scheme with the intent to defraud”);
Compl. ¶ 101 (“Defendants and other persons engaged in the charged conspiracy through a
continuous and related pattern of racketeering activity, including multiple violations of the
federal mail fraud and wire fraud statutes.”). This is patently insufficient under Fed. R. Civ.
P. 8(a)(2), much less Fed. R. Civ. P. 9(b).
When pressed at oral argument to identify the scheme to defraud, Uhr argued that a pricefixing conspiracy is itself a scheme to defraud because consumers have a reasonable expectation
that the businesses they patronize are not engaging in illegal price fixing. Uhr cites no case to
support this proposition, which is not surprising. If Uhr were correct, every price-fixing
conspiracy would automatically constitute a RICO violation.14 Congress clearly did not intend
13

(...continued)
detrimental reliance is not an element of a RICO claim predicated on mail fraud, ‘materiality of
falsehood is an element of the federal mail fraud, wire fraud, and bank fraud statutes.’” (quoting
Neder, 527 U.S. at 25)).
14

Indeed, because consumers presumably have a reasonable expectation that the
businesses they patronize are not engaging in any illegal conduct, the violation of just about any
(continued...)
-25-

that violations of the Sherman Act — which, after all, are not predicate offenses under RICO —
automatically give rise to RICO liability. Cf. Evercrete Corp. v. H-Cap Ltd., 429 F. Supp. 2d
612, 631 (S.D.N.Y. 2006) (“All businesses use interstate mail or wires. Congress did not intend
that every trademark dispute would be brought under RICO.”). The Court therefore grants
defendants’ motions to dismiss Uhr’s RICO claim.
Because Uhr has failed to assert viable claims despite having had three chances to do so,
his complaint is dismissed with prejudice.15
ORDER
Based on the foregoing, and on all of the files, records, and proceedings herein, IT IS
HEREBY ORDERED THAT:
1.

Plaintiff’s motion to amend [Docket No. 133] is GRANTED.

2.

Defendants’ motions to dismiss [Docket Nos. 10, 34, 44, 46, 63, 66, 73, 75, 83,
86, 92, 94, 99, 102, 107, 110, 128, 142, 147, 152] are GRANTED.

14

(...continued)
federal or state law could, on Uhr’s theory, constitute an act of mail or wire fraud and lead to
RICO liability.
15

Relying on Uhr’s involvement in the Eichenseer and Dougherty actions (discussed
above), defendants Jay Wanserski and Rick Petri move for sanctions on the ground that Uhr’s
claims against them are clearly barred by res judicata and collateral estoppel. Although the
Court is sympathetic to these defendants’ frustration with Uhr, the Court cannot find, on the
current record, that Uhr was in privity with his clients when he represented them in Eichenseer
and Dougherty, particularly in light of Uhr’s assertion that his representation ended before either
case was concluded. See Irving v. Dormire, 586 F.3d 645, 647-48 (8th Cir. 2009) (both res
judicata and collateral estoppel require privity); Pasko v. City of Milwaukee, 643 N.W.2d 72, 78
(Wis. 2002) (res judicata requires privity); State v. Mechtel, 499 N.W.2d 662, 667 (Wis. 1993)
(collateral estoppel requires privity). Notably, neither Wanserski nor Petri have addressed the
issue of whether and under what circumstances an attorney may be in privity with his client for
preclusion purposes. The Court therefore denies the motions for sanctions.
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3.

The second amended complaint [Docket No. 136] is DISMISSED WITH
PREJUDICE AND ON THE MERITS.

4.

Defendant Jay Wanserski’s motion for sanctions [Docket No. 177] is DENIED.

5.

Defendant Rick Petri’s motion for sanctions [Docket No. 184] is DENIED.

LET JUDGMENT BE ENTERED ACCORDINGLY.

Dated: September 14 , 2011

s/Patrick J. Schiltz
Patrick J. Schiltz
United States District Judge

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