Johnny Prescott & Son Oil Co, Inc. v. Rymes Heating Oils, Inc.

Filing 15

///ORDER granting 9 Motion to Dismiss for Failure to State a Claim; denying as moot 13 Motion to Supplement Motion to Dismiss. Clerk is directed to close the case. So Ordered by District Judge Landya B. McCafferty.(gla)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
Johnny Prescott & Son Oil
Company, Inc.
v.

Civil No. 13-cv-437-LM
Opinion No. 2014 DNH 127

Rymes Heating Oils, Inc.

O R D E R
Johnny Prescott & Son Oil Company, Inc. (“Prescott”) brings
this suit against Rymes Heating Oils, Inc. (“Rymes”).

Prescott

seeks damages for violations of the New Hampshire Consumer
Protection Act (“CPA”), N.H. Rev. Stat. Ann. (“RSA”) § 358-A
(Count I), illegal restraint of trade under RSA § 356:2 (Count
II), illegal monopoly under RSA § 356:3 (Count III),
discriminatory pricing under the Clayton Act, 15 U.S.C. § 13
(Count IV), and illegal underselling under the Clayton Act, 15
U.S.C. § 13a (Count V).

Rymes moves to dismiss Prescott’s

complaint under Rule 12(b)(6) of the Federal Rules of Civil
Procedure.

For the reasons that follow, the motion is granted.
Standard of Review

To survive scrutiny under Rule 12(b)(6), a “complaint must
contain sufficient factual matter, accepted as true, to state a
claim to relief that is plausible on its face.”

González-

Maldonado v. MMM Healthcare, Inc., 693 F.3d 244, 247 (1st Cir.

2012) (internal quotation marks omitted).

When assessing a

complaint under Rule 12(b)(6), the court must “accept[] as true
all well-pled facts in the complaint and draw[] all reasonable
inferences in favor of [the] plaintiff[].”

Plumbers’ Union

Local No. 12 Pension Fund v. Nomura Asset Acceptance Corp., 632
F.3d 762, 771 (1st Cir. 2011).

However, “some allegations,

while not stating ultimate legal conclusions, are nevertheless
so threadbare or speculative that they fail to cross ‘the line
between the conclusory and the factual.’”

Peñalbert-Rosa v.

Fortuño-Burset, 631 F.3d 592, 595 (1st Cir. 2011) (quoting Bell
Atl. Corp. v. Twombly, 550 U.S. 544, 557 n.5 (2007)).
Background
The facts in this section are drawn from the complaint.
See Butler v. Balolia, 736 F.3d 609, 611 (1st Cir. 2013).
Prescott is a New Hampshire heating fuel distributor.
Prescott purchases fuel from third party wholesalers and both
sells fuel directly to customers and distributes fuel to
smaller, local distributors.
“through-putting.”

This practice is known as

One of Prescott’s through-putting buyers is

Davis Fuels of Epsom, Inc. (“Davis”).
On approximately July 30, 2013, Tom Prescott, Prescott’s
president, spoke with John Rymes, Rymes’s vice-president.
During the conversation, Mr. Rymes told Mr. Prescott that he had
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heard there was “a new competitor in Epsom.”
1) 2 ¶ 9.

Compl. (doc. no.

Mr. Prescott explained that Davis was entering the

propane business.

Mr. Rymes expressed dismay at hearing this

news because Davis had taken one of Rymes’s customers.
Rymes also asked where Davis was getting his propane.

Mr.
Mr.

Prescott responded that Davis would be buying it from Prescott.
Mr. Rymes allegedly replied “game on Tom, I will be selling
heating oil in the Concord-Bow area for cost so you won’t make
any money this year.”

Compl. (doc. no. 1) 3 ¶ 13.

On approximately August 10, 2013, Rymes began advertising
heating oil at $2.99 per gallon cash price and $3.07 per gallon
pre-buy price.

Prescott alleges that this price was

“approximately 50 cents below [the price of] any other
distributors and below cost for dealers such as Prescott and
Davis.

Compl. (doc. no. 1) 3 ¶ 14.

Based on Rymes’s alleged

actions, Prescott brought the present suit.
Discussion
The court addresses the counts out of order, beginning with
the federal claims in Counts IV and V of the complaint.
A. Count IV: Discriminatory Pricing (Clayton Act)
In this Count, Prescott alleges that Rymes’s oil pricing
violates the Clayton Act, 15 U.S.C. § 13.

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Although not entirely

clear from the complaint, it appears that Prescott is alleging
that Rymes violated 15 U.S.C. § 13(a).

As such, the court will

treat this count as a claim under 15 U.S.C. § 13(a).1

This

statute, in pertinent part, reads as follows:
It shall be unlawful for any person engaged in
commerce, in the course of such commerce, either
directly or indirectly, to discriminate in price
between different purchasers of commodities of like
grade and quality, where either or any of the
purchases involved in such discrimination are in
commerce, where such commodities are sold for use,
consumption, or resale within the United States or any
Territory thereof or the District of Columbia or any
insular possession or other place under the
jurisdiction of the United States, and where the
effect of such discrimination may be substantially to
lessen competition or tend to create a monopoly in any
line of commerce, or to injure, destroy, or prevent
competition with any person who either grants or
knowingly receives the benefit of such discrimination,
or with customers of either of them: Provided, That
nothing herein contained shall prevent differentials
which make only due allowance for differences in the
cost of manufacture, sale, or delivery resulting from
the differing methods or quantities in which such
commodities are to such purchasers sold or
delivered[.]
15 U.S.C. § 13(a)
“[T]here are two prerequisites to recovery under 15 U.S.C.
§ 13(a).”

Bridges v. MacLean-Stevens Studios, Inc., 201 F.3d 6,

13 (1st Cir. 2000).

“First, the prices complained of must be

below an appropriate measure of the defendant’s costs.”
1

Id.

In its Memorandum of Law in Support of Plaintiff’s
Objection to Defendant’s Motion to Dismiss (doc. no. 10-1) 13,
Prescott refers to this count more specifically as
“Discriminatory Pricing (15 USC § 3(a)).”
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This means the defendant must sell at a loss.

“Second, the

defendant must have a reasonable prospect of recouping its
investment in below-cost prices.”

Id. (citation omitted).

This

means the defendant is likely to recover its immediate losses.
Prescott’s complaint fails to allege sufficient facts under
either prong.

First, even giving Prescott’s complaint a broad

reading, nowhere does it allege that Rymes’s prices fell below
an appropriate measure of Rymes’s costs.

The closest Prescott

gets is the allegation that Mr. Rymes intended to sell “heating
oil in the Concord-Bow area for cost.”
13 (emphasis added).

Compl. (doc. no. 1) 3 ¶

To sell at cost, as opposed to below cost,

however, does not violate 15 U.S.C. § 13(a).

Similarly, at

other points in the complaint, Prescott alleges that Rymes
advertised oil at a price below that of other businesses, but
does not assert that Rymes advertised prices below an
appropriate measure of Rymes’s own cost.
1) 3 ¶ 14.

See Compl. (doc. no.

Likewise, the allegation that “Rymes’ pricing . . .

is below some appropriate measure of cost[,]”

Compl. (doc. no.

1) 4 ¶ 21, is a “legal conclusion couched as [fact].”
550 U.S. at 555.

Twombly,

In short, at no point in the complaint does

Prescott specifically allege that Rymes sold its product below
an appropriate measure of its own cost.
to Prescott’s claim.

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This failure is fatal

Prescott’s failure to meet prong one under Bridges is a
sufficient basis to dismiss Count IV.

However, Prescott’s

complaint also fails to meet the second requirement of Bridges.
At no point in the complaint does Prescott allege any facts that
plausibly show Rymes has a reasonable prospect of recouping
monies it has lost through below-cost pricing.

Cf. Bridges, 201

F.3d at 13 (affirming summary judgment for plaintiff due to lack
of evidence on the recoupment element of statute); see also
Bailey v. Allgas, Inc., 284 F.3d 1237, 1239, 1244-1245, 1257-58
(11th Cir. 2002) (same).
In sum, Prescott’s complaint falls well short of alleging
the facts necessary to state the elements of a claim under 15
U.S.C. § 13(a).

Accordingly, Count IV is dismissed.

B. Count V: Illegal Underselling (Clayton Act)
In this count, Prescott alleges that Rymes has sold and/or
contracted to sell goods in the United States at prices lower
than those sold elsewhere for the purpose of destroying
competition or eliminating a competitor.

To support this

allegation, Prescott relies on 15 U.S.C. § 13a, i.e., Section 3
of the Robinson-Patman Act.

However, the Supreme Court has made

clear that Section 3 of the Robinson-Patman Act is not part of
the Clayton Act and does not permit a private cause of action.

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See Nashville Milk Co. v. Carnation Co., 355 U.S. 373, 376, 382
(1958).

As such, Count V is also dismissed.2

C. Counts I-III: State Law Claims
As the court has now dismissed the federal causes of action
in Counts IV and V, all the remaining claims in this case are
based on state law.

These counts were originally before the

court on supplemental jurisdiction.

“As a general principle,

the unfavorable disposition of a plaintiff’s federal claims at
the early stages of a suit, well before the commencement of
trial, will trigger the dismissal without prejudice of any
supplemental state-law claims.”

Rodriguez v. Doral Mortg.

Corp., 57 F.3d 1168, 1177 (1st Cir. 1995).

While, “[i]n an

appropriate situation, a federal court may retain jurisdiction
over state-law claims notwithstanding the early demise of all
foundational federal claims[,] . . . the exercise of
supplemental jurisdiction in such circumstances is wholly
discretionary.”

Id. (citations omitted).

The court finds no

reason to retain jurisdiction over the state law claims in this
case.

Accordingly, the state law claims in Counts I-III are

2

Rymes appears to treat both
made under 15 U.S.C. § 13(a). To
attempting to bring Count V under
would fail to state a claim under
reasons Count IV failed.
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Count IV and Count V as claims
the extent that Prescott is
15 U.S.C. § 13(a), Count V
15 U.S.C. § 13(a) for the same

dismissed.

Because no counts remain, the court dismisses

Prescott’s complaint.
Conclusion
In sum, the court dismisses the federal claims in Counts IV
and V for failure to state a claim upon which relief can be
granted.

Because the court declines to exercise jurisdiction

over Prescott’s remaining state law claims, the court dismisses
them as well.
dismissed.
as moot.

The entirety of Prescott’s complaint is therefore

Document no. 9 is granted; document no. 13 is denied

The clerk is directed to close the case.

SO ORDERED.

____________________________
Landya McCafferty
United States District Judge

June 6, 2014
cc:

Biron L. Bedard, Esq.
Courtney H. G. Herz, Esq.
Robert H. Miller, Esq.

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