Michael Carl Clary, Et Ux. v. State Farm Mutual Automobile Ins. Co. Etc.

STATE OF LOUISIANA
COURT OF APPEAL, THIRD CIRCUIT

16-168

MICHAEL CAL CLARY, ET UX.

VERSUS

STATE FARM MUTUAL AUTOMOBILE INS. CO., ET AL.

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APPEAL FROM THE
FOURTEENTH JUDICIAL DISTRICT COURT
PARISH OF CALCASIEU, NO. 2015-2657
HONORABLE G. MICHAEL CANADAY, DISTRICT JUDGE

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JIMMIE C. PETERS
JUDGE

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Court composed of Jimmie C. Peters, James T. Genovese, and John E. Conery,
Judges.

AFFIRMED.

CONERY, J., dissents and assigns reasons.

Hunter W. Lundy
Matthew E. Lundy
Daniel A. Kramer
Lundy, Lundy, Soileau & South, LLP
Post Office Box 3010
Lake Charles, Louisiana 70602-3010
(337) 439-0707
COUNSEL FOR PLAINTIFFS/APPELLEES:
Michael Cal Clary
Catherine Ann Hixson Clary

Robert J. David, Jr.
Alyse S. Richard
Juneau David APLC
Post Office Drawer 51268
Lafayette, Louisiana 70505-1268
(337) 269-0052
COUNSEL FOR DEFENDANTS/APPELLANTS:
Gene Haymon
David Haymon

Mark N. Mallery
Jacob C. Credeur
Ogletree, Deakins, Nash, Smoak & Stewart, P.C.
701 Poydras Street, Suite 3500
New Orleans, Louisiana 70139
(504) 648-3840
COUNSEL FOR DEFENDANTS/APPELLANTS:
State Farm Mutual Automobile Ins. Co.
State Farm Fire & Casualty Co.
State Farm General Ins. Co.
State Farm Life Ins. Co.
State Farm VP Management Corp.
State Farm Bank, F.S.B.
Insurance Placement Services, Inc.
Patrick White
Kimberly Rollins White

PETERS, J.

Michael Cal Clary and Catherine Ann Hixson Clary brought suit against a

number of defendants to recover damages they claim to have suffered while

acquiring and operating an insurance agency in Leesville, Vernon Parish,

Louisiana. The Clarys asserted causes of action against all of the defendants in the

litigation under a number of theories of recovery, and the various defendants filed

two separate peremptory exceptions of no cause of action seeking only the

dismissal of the damage claims arising pursuant to the Louisiana Antitrust Statute,

La.R.S. 51:122 (the antitrust statute), and the Louisiana Unfair Trade Practices Act,

La.R.S. 51:1401, et seq. (LUTPA). The trial court rejected both exceptions, and

the defendants appealed. For the following reasons, we affirm the trial court

judgment in all respects.

PROCEDURAL STATUS OF THE LITIGATION

The Clarys, who are husband and wife, filed the petition at issue on July 2,

2015. In their petition, they named State Farm Mutual Automobile Insurance

Company, State Farm Fire and Casualty Company, State Farm General Insurance

Company, State Farm Life Insurance Company, State Farm VP Management

Corporation, and State Farm Bank, F.S.B. (collectively referred to as “State
1
Farm”); Insurance Placement Services, Inc. (Insurance Placement Services);

Patrick White; Kimberly Rollins White (sometimes referred to as “Kimberly
2
Rollins”); Gene Haymon; and David Haymon as defendants.

1
The petition refers to State Farm in general and does not always designate which
individual State Farm entity is currently being referenced. Thus, when we use the term “State
Farm” we use it in the same sense as the Clarys in their petition, as a general reference to
whatever State Farm entity is being represented at the time.
2
At some time during the pendency of this litigation, Patrick White and Kimberly Rollins
were married.

On August 19, 2015, State Farm, Insurance Placement Services, Patrick

White, and Kimberly Rollins White (the State Farm appellants) filed a peremptory

exception of no cause of action addressing the claims asserted by the Clarys

involving the antitrust statute and LUTPA. Two days later, Gene and David

Haymon (the Haymon appellants) filed a peremptory exception of no cause of

action addressing the same two claims.

At the end of a December 16, 2015 hearing on both exceptions, the trial

court took the matter under advisement. On January 12, 2016, the trial court

executed a written judgment rejecting both exceptions. The written judgment also

contains the following reasons for the trial court‟s actions:

After reviewing the facts and relevant case law, the Court finds
as follows:

If all alleged facts are taken as true, the Petition states all the
necessary elements of a violation of both the Louisiana antitrust law
and the Louisiana Unfair Trade Practices Act. Therefore, Plaintiffs‟
Petition states a cause of action.

While the Court does believe the Plaintiffs have stated a cause
of action for both alleged violations, the Court also notes Everything
on Wheels Subaru, Inc. v. Subaru S., Inc., “if there are two or more
items of damages or theories of recovery which arise out of the
operative facts of a single transaction or occurrence, a partial
judgment on an exception of no cause of action should not be
rendered to dismiss one item of damages or theory of recovery.” 616
So. 2d 1234 (La. 1993).

Both the State Farm appellants and the Haymon appellants timely complied
3
with the expedited appeal provisions of La.R.S. 51:134. In their separately filed

appeals, the State Farm appellants and the Haymon appellants questioned only the

trial court‟s ruling on the exceptions of no cause of action addressing the Clarys‟

antitrust claim. However, in the briefs submitted on appeal, both groups of

3
The denial of a defendant‟s peremptory exception of no cause of action is not normally
appealable as it is not identified as one of those judgments appealable pursuant to La.Code Civ.P.
art. 1915. However, La.R.S. 51:134-35 provides an expedited appeal for certain interlocutory
judgments rendered in antitrust litigation.
2

appellants joined the LUTPA issue in their assignments of error. While phrased

slightly differently, the two appellant groups raised the same assignments of error:

(1) the trial court erred in concluding that it could not grant an exception of no

cause of action that dismissed some, but not all, of the Clarys‟ claims; (2) the trial

court erred when it rejected the exceptions of no cause of action addressing the

Clarys‟ claims under La.R.S. 51:122; and (3) the trial court erred when it rejected

the exceptions of no cause of action addressing the Clarys‟ claims under LUTPA.

FACTUAL ALLEGATIONS
OF THE CLARYS’ PETITION (ACCEPTING THE
WELL-PLEADED FACTUAL ALLEGATIONS TO BE TRUE)

In their twenty-four page petition, the Clarys sought damages against the

defendants based on a number of causes of action, including breach of contract;

detrimental reliance in contract; conspiracy in restraint of trade in violation of the

antitrust statute; violations of LUTPA; intentional infliction of emotional distress,

and conspiracy to intentionally inflict emotional distress; conspiracy to punish the

Clarys for filing a complaint with the Louisiana Department of Insurance

(Insurance Department), i.e., being a “whistleblower”; breach of contractual

stipulation pour autri; and loss of consortium. All of these causes of action arise

from the same factual background. Still, the only two at issue in this appeal are the

antitrust and LUTPA causes of action.

The petition establishes that before contracting with State Farm to take over

one of its agencies in Leesville, Louisiana, Mr. Clary had been a successful

independent owner of an Allstate Insurance agency. The transition from one

company to the other began in 2006 when a State Farm agency manager

encouraged him to become a State Farm Insurance Agent. Between 2007 and 2011,

Mr. Clary began training within the State Farm system; and given his successful

training, he initially received offers to take over State Farm agency offices in either
3

Ville Platte, Louisiana, or Port Arthur, Texas. However, he declined these offers

based partially on the advice of Kimberly Rollins, State Farm‟s vice-president of

the division overseeing its Louisiana agencies. Ms. Rollins suggested that he wait

for a better opportunity in Louisiana.

In February of 2011, Mr. Clary thought he had found that better opportunity

when he was asked to take over Gene Haymon‟s State Farm agency in Leesville,

Louisiana. Todd McFarland, a State Farm Agency Field Executive, contacted Mr.

Clary about taking over the Leesville agency because Gene Haymon was retiring.

Being aware that Gene Haymon‟s son, David Haymon, was a State Farm

Agency Field Executive in Columbia, Missouri, and being concerned that he might

be interested in moving into an agency position in Leesville to take advantage of

his father‟s reputation, Mr. Clary sought assurances from Mr. McFarland that his

taking over Gene Haymon‟s agency would be free and clear of any interference

from either of the Haymons. Mr. McFarland responded by stating that neither he

nor State Farm would tolerate “illegal solicitation, policy raiding, or mass transfer

from a new agent‟s book of business[.]” With this assurance, Mr. Clary agreed to

take the Leesville opportunity and began the transfer process.

State Farm awarded Mr. Clary the agency, but he soon learned that State

Farm had also awarded David Haymon a Leesville agency. When Jamie Eagles

replaced Mr. McFarland as State Farm‟s Agency Field Executive in June of 2011,

he called a meeting of the parties in an effort to circumvent any problems

associated with the soon-to-be competing Leesville agencies. At the July 17, 2011
4
meeting, the topic of discussion was the transition of Gene Haymon‟s business to

the new agencies. In addressing that subject, Mr. Eagles reminded the two agents

of State Farm‟s lack of tolerance for the solicitation of another agent‟s customers

4
The meeting was attended by Mr. Eagles, Mr. Clary, David Haymon, and Ms. Rollins.
4

and threatened that anyone found violating the policy would have his agent‟s

agreement with State Farm cancelled. This warning apparently had no effect on

David Haymon, because as early as October of 2011 he was in Leesville soliciting

policies without having yet obtained a Louisiana insurance license.

Mr. Clary executed a standard State Farm agency agreement (referred to as a

“TICA Agreement”) in January of 2012, and began operating Gene Haymon‟s

former agency in Leesville. At the same time, he and David Haymon split the

book of business formerly belonging to Gene Haymon‟s agency in accordance with

the rules governing such situations. However, immediately thereafter Mr. Clary

recognized that the promises of Mr. McFarland and Mr. Eagles concerning

safeguards in dividing the business of the agency had not been put in place to give

proper notice to the clients, as they were expressing increased dissatisfaction at

being shuffled between the two agencies. The reason for the dissatisfaction

became more apparent when Mr. Clary learned that Gene and David Haymon had

provided all of Gene Haymon‟s clients with a document stating that David

Haymon was taking over all of his father‟s business and providing the clients with

instructions on how to retrieve their files from Mr. Clary.

Within the first month of operation, Mr. Clary complained to State Farm

about the Haymons‟ violation of State Farm‟s policy, and Mr. Eagles called
5
another meeting for February 1, 2012. Instead of confronting David Haymon with

his prohibited activity, Mr. Eagles merely reminded both sides of the previous

understanding concerning the splitting of Gene Haymon‟s agency. When Mr.

Eagles gave David Haymon no ultimatum concerning ceasing such activity, Mr.

Clary threatened to report him to the Insurance Department. Ms. Rollins

5
This time, Mr. White and Lindsey Cutler, both State Farm Agency Field Consultants,
joined Mr. Eagles, Mr. Clary, David Haymon, and Ms. Rollins.
5

immediately responded to that threat by discouraging him from doing so and by

assuring him that reporting the Haymons‟ activities to her was sufficient and the

activities would be addressed. David Haymon did agree in the meeting to transfer

five hundred automobile policies to Mr. Clary and to State Farm‟s suggestion that

Mr. Clary be given the books of business of another agent who was expected to

retire in the immediate future.

After the meeting, and as soon as he realized that State Farm was not going

to force him to comply with any part of its policies designed to protect agents and

agencies, David Haymon ceased transferring any automobile policies to Mr. Clary.

This refusal to comply with the terms of the agreement created “mass chaos”

among Mr. Clary‟s policy holders, and as of June 20, 2012, he had lost over half of

those few customers David Haymon had transferred pursuant to the agreement.

The Haymons‟ anticompetitive behavior not only continued over the next

twenty-four months, but accelerated. In May of 2012, Mr. Clary learned that

David Haymon had lied to potential clients, telling them that Mr. Clary was

holding customers against their will and that he and his father were going to put Mr.

Clary out of business. Instead of supporting him when he relayed this information

to her, Ms. Rollins told Mr. Clary to quit discussing the transfers and solicitations

and move on past the controversy. In the months that followed, the Haymons told

Mr. Clary‟s clients that he had stolen files from the old Haymon agency, spread the

rumor that Mr. Clary was going bankrupt, and informed everyone who would

listen that Mr. Clary would not be a State Farm agent for long. In fact, at one point,

Gene Haymon stood up in church, called Mr. Clary a liar and thief, and told those

present that he expected the members to support his son.

Not only did State Farm not support Mr. Clary in the conflict with the

Haymons, but it took steps to make matters difficult in the long-term operation of
6

his agency. The TICA Agreement Mr. Clary first executed provided for an initial

term running through January 31, 2013, and Mr. Clary had executed it in
6
contemplation of executing an AAO5 contract effective January 1, 2013.
7
However, at a November 29, 2012 meeting, Mr. White recapped the problems of

the past few months and acknowledged that none were Mr. Clary‟s fault, but stated

that State Farm wanted to extend the TICA Agreement rather than enter into an

AAO5 contract in January 2013. Mr. White assured Mr. Clary that the new TICA

Agreement was the same as he had previously signed, and that it would

automatically convert to an AAO5 contract during the first quarter of 2013. Based

on these assurances, Mr. Clary executed the new TICA Agreement on December

17, 2012. However, for first one reason and then another, State Farm delayed

approval of Mr. Clary‟s AAO5 contract until January 1, 2014.

Through these first two years of operation, Mr. Clary had nothing which

could explain why State Farm had such a tolerant attitude toward the Haymons.

However, the picture became more clear when he attended a training session with

other agents. In conversations with other agents at the training session, he learned

why Gene and David Haymon could act with impunity when it came to violating

State Farm‟s procedures and policies. According to the agents he spoke with,

Gene Haymon had bragged about his power at a recent social event.

From what he was told about Gene Haymon‟s comments, Mr. Clary

discovered that before he came into the picture, Gene Haymon thought he had “cut

a deal” with Ms. Rollins to give his son the entirety of his agency when he retired;

but that the “deal” was actually to benefit Mr. White and Ms. Rollins, who were

6
The difference between the two contracts is that the TICA Agreement is for a set term
and the AAO5 contract is a lifetime agreement.
7
This meeting was attended by Mr. White, Lindsey Cutler, and Cliff Orso, Jr., a State
Farm Development Agency Field Consultant.
7

romantically involved. Gene Haymon explained that when his son vacated his

Missouri Agency Field Executive position, an individual in Oklahoma holding a

Development Agency Field Consultant position replaced him. Mr. White then

assumed the open Oklahoma Development Agency Field Consultant position, and

Ms. Rollins had that position transferred to Baton Rouge, Louisiana, where she

resided. Soon thereafter, Mr. White and Ms. Rollins were married.

Gene Haymon told the agents that when he became aware of the real

purpose of the transfers, he used that information to gain the upper hand over Mr.

White and Ms. Rollins, causing them to overlook his and his son‟s raiding of Mr.

Clary‟s policies and their spreading of lies against him in the community. Gene

Haymon further bragged that he was able to include two senior State Farm officials

in the conspiracy by threatening to expose their involvement in illegal and
8
unethical activities if they did not “take care of his daughter and his son.”

As the personal attacks and dishonest business methods continued, Mr.

Clary sought assistance from a Christian counselor who encouraged him to report

the situation to the Insurance Department. Following that advice, he met with Jim

Donelon, the Louisiana Commissioner of Insurance, and Barry Ward, the

Louisiana Deputy Commissioner of Licensing and Compliance, on December 3,

2013. In that meeting, he lodged a complaint against Gene and David Haymon,

asserting that they had violated state law in operating an insurance agency without

a state license and they had committed unfair trade practices. Mr. Ward‟s

subsequent investigation of the complaint revealed that the Leesville situation was

common knowledge within the State Farm organization.

The inquiry by Mr. Ward prompted Kevin Garrett, State Farm‟s Central

Louisiana Sales Leader, to come to Mr. Clary‟s office on July 13, 2014. In the

8
Gene Haymon‟s daughter is a State Farm agent residing in Arkansas.
8

conversation of that day, Mr. Garrett informed Mr. Clary that there was great

concern within the State Farm organization arising from his report to the Insurance

Department and that State Farm now had a “trust issue” with him. Mr. Garrett

informed him that State Farm has no “black and white” process for handling

disputes between agencies, and simply operates in the “gray.” He further

suggested that Mr. Clary‟s action could cause State Farm to declare him ineligible

for policy assignments in the future because executives such as he could act

subjectively toward agents without considering any underlying factors. Mr. Clary

found these statements to be threatening and totally contrary to everything he had

been told by State Farm representatives in the past, and he expressed to Mr. Garrett

his displeasure in being punished because he had reported two individuals who

were breaking the law.
9
On August 19, 2014, Mr. Clary met with Reggie Gallant in New Orleans,

Louisiana. Mr. Clary quickly recognized that Mr. Gallant was only interested in

reprimanding him for having made a complaint to the Insurance Department. Mr.

Gallant told Mr. Clary that, despite illegal activity on the part of the Haymons,

State Farm wanted the entire matter to remain an internal State Farm affair. Mr.

Clary expressed disagreement with State Farm‟s position as expressed by Mr.

Gallant. As the meeting progressed, it became clear to Mr. Clary that Mr.

Gallant‟s objective was to chastise him in hopes that he would resign as a State

Farm agent, or in the alternative, drive him out of business. The meeting ended

without considering any solutions to the difficulties caused by the Haymons.

However, Mr. Gallant made it clear that State Farm would not tolerate Mr. Clary

9
Mr. Gallant was described as a both a State Farm Regional vice-president and the vice-
president of the Sales Representative Division overseeing State Farm‟s Louisiana agencies.
9

making complaints involving other agents or State Farm employees to the

Insurance Department as State Farm reserved that right for itself.

SPECIFIC PLEADINGS ADDRESSING
THE CAUSES OF ACTION AT ISSUE

In additional to the factual basis previously set forth herein, the Clarys‟

pleadings summarize and particularly describe their antitrust cause of action with

the following paragraphs:

48.

The conspiracy effected between DAVID HAYMON, GENE
HAYMON, KIMBERLY ROLLINS, PATRICK WHITE and other
STATE FARM officials caused the restraint of trade of MIKE
CLARY and injured his ability to perform the STATE FARM
marketing services in the Leesville community. Defendants‟ conduct
clearly had an adverse effect on MIKE CLARY‟s ability to compete
in the Leesville market. As effected, the conspiracy by these
Defendants to deny MIKE CLARY the opportunity to service
accounts and acquire new accounts with STATE FARM products
caused MIKE CLARY to lose more than half of the estimated
accounts that he was told he would have when he opened his agency,
and has denied MIKE CLARY of the opportunity to accrue benefits
from the beginning of January 2012 through the present and has
resulted in the loss of many policies.

49.

The conspiracy among the Defendants harmed consumers by
ensuring they received false information which consumers relied upon
to select their insurance agents, by depriving customers of the benefits
of their choice of insurance agents; and by exposing private
information of consumers to those not licensed as insurance agents in
Louisiana.

With regard to their LUTPA claim in particular, the Clarys‟ pleadings

summarize and particularly describe their antitrust cause of action with the

following paragraphs:

51.

The STATE FARM Defendants and their employees‟ actions
against MIKE CLARY constitute unfair trade practices under La. R.S.
51:1405(a) in that their methods of competition, deceptive acts, and
practices were unfair and unscrupulous. The Louisiana Unfair Trade
10

Practices Act (“LUTPA”) is patterned after the Federal Trade
Commission Act and prohibits the same type of deceptive and anti-
competitive conduct is prohibited by the Federal Trade Commission
Act.

52.

GENE HAYMON‟s acts of telling lies about MIKE CLARY,
soliciting policies of MIKE CLARY and threatening other STATE
FARM officials if they failed to assist his son, DAVID HAYMON, all
constitute unfair trade practices.

53.

DAVID HAYMON‟s actions of sending out letters contrary to
his contract with STATE FARM, which contained false and
misleading information, particularly that these were his policies, and
that STATE FARM was endorsing his letter, was clearly unfair and
deceptive acts under the LUTPA.

54.

Defendants DAVID HAYMON, KIMBERLY ROLLINS and
PATRICK WHITE‟s actions in manipulating jobs and positions to
appease GENE HAYMON so his son, DAVID HAYMON could take
over GENE HAYMON‟s STATE FARM agency and give up his AFE
position in Missouri; along with KIMBERLY ROLLINS and
PATRICK WHITE participating in the strategic maneuvering in order
to help DAVID HAYMON take his father‟s STATE FARM agency
and policies, deny MIKE CLARY his promised book of business, and
to enable PATRICK WHITE and KIMBERLY ROLLINS to continue
to work for STATE FARM in the same city and live in the same
residence was unethical, unscrupulous and deceptive, all in violation
of LUTPA.

55.

As recently as June, 2015, STATE FARM has denied and
cutoff MIKE CLARY from access to and use of STATE FARM‟s
computer based business development leads which historically have
been available to all STATE FARM agents. When questioned by
MIKE CLARY, Kevin Garrett of STATE FARM was unable or
refused to explain why MIKE CLARY could no longer access these
business development leads ostensibly available to all STATE FARM
agents.

OPINION

The function of the peremptory exception of no cause of action as authorized

by La.Code Civ.P. art. 927(A)(5) is to “test the legal sufficiency of the petition by
11

determining whether the law affords a remedy on the facts” that are alleged in the

petition. Everything on Wheels Subaru, Inc. v. Subaru S., Inc., 616 So.2d 1234,

1235 (La.1993). “No evidence may be introduced at any time to support or

controvert the objection that the petition fails to state a cause of action.” La.Code

Civ.P. art. 931. As stated in Industrial Cos., Inc. v. Durbin, 02-665, p. 7 (La.

1/28/03), 837 So.2d 1207, 1213, “[e]very reasonable interpretation must be

accorded the language of the petition in favor of maintaining its sufficiency and

affording the plaintiff the opportunity of presenting evidence at trial.”

Because the peremptory exception of no cause of action “raises a question of

law and the lower court‟s decision is necessarily based solely on the sufficiency of

the petition[,]” we review the grant of the exception under a de novo standard.

State, Div. of Admin., Office of Facility Planning & Control v. Infinity Sur. Agency,

L.L.C., 10-2264, p. 9 (La. 5/10/11), 63 So.3d 940, 946. Additionally, “for the

purposes of determining the issues raised by the exception, the well-pleaded facts

in the petition must be accepted as true. Simply, if the petition alleges sufficient

facts to establish a case cognizable in law, an exception of no cause of action must

fail.” Jones v. Tezeno, 99-1693, p. 4 (La.App. 3 Cir. 3/1/00), 758 So.2d 896, 899

(citations omitted).

Although “Louisiana is a fact pleading state” that does not mean that a

plaintiff must “set forth every possible theory of recovery[.]” State ex rel. Ieyoub

v. Racetrac Petroleum, Inc., 01-458, p. 5 (La.App. 3 Cir. 6/20/01), 790 So.2d 673,

678 (internal quotation marks omitted). Instead, the plaintiff “must set forth the

facts of his claim.” Id. At the same time, “to reach the truth, and to avoid the

application of harsh, technical rules of pleading; at a minimum, the plaintiff must

plead bare bone facts, which if taken as true, state a cause of action.” Id.

12

Assignment of Error Number One

In their first assignments of error, the State Farm appellants and the Haymon

appellants both argue that the trial court erred when it inserted the following

language in its judgment.

While the Court does believe the Plaintiffs have stated a cause
of action for both alleged violations, the Court also notes Everything
on Wheels Subaru, Inc. v. Subaru S., Inc., “if there are two or more
items of damages or theories of recovery which arise out of the
operative facts of a single transaction or occurrence, a partial
judgment on an exception of no cause of action should not be
rendered to dismiss one item of damages or theory of recovery. 616
So. 2d 1234 (La. 1993).

Specifically, they argue that the Louisiana Legislature legislatively overruled the

holding in Everything on Wheels, 616 So.2d 1234, in 2003 when it amended

La.Code Civ.P. art. 934 to read as follows:

When the grounds of the objection pleaded by the peremptory
exception may be removed by amendment of the petition, the
judgment sustaining the exception shall order such amendment within
the delay allowed by the court. If the grounds of the objection raised
through the exception cannot be so removed, or if the plaintiff fails to
comply with the order to amend, the action, claim, demand, issue, or
theory shall be dismissed.

While we find the trial court‟s statement in its judgment with regard to the holding

of the supreme court in the Everything on Wheels decision to be erroneous, we note

that it is mere dicta and, therefore, harmless error. Specifically, the trial court

made it clear that the Clarys stated a cause of action for both the antitrust claim and

the LUTPA claim, and that the decision in Everything on Wheels did not affect its

ultimate judgment.

Assignment of Error Number Two

In this assignment of error, the State Farm appellants and the Haymon

appellants argue that the trial court erred in rejecting their peremptory exceptions

13

of no cause of action as it related to the Clarys‟ antitrust claim under La.R.S.

51:122.

Louisiana Revised Statutes 51:122(A) provides that “[e]very contract,

combination in the form of trust or otherwise, or conspiracy, in restraint of trade or

commerce in this state is illegal.” Furthermore, both “[t]he federal and state

antitrust laws were intended to be sweeping in breadth, encompassing every

conspiracy, contract or combination that restrains trade.” Plaquemine Marine, Inc.

v. Mercury Marine, 03-1036, p. 9 (La.App. 1 Cir. 7/25/03), 859 So.2d 110, 118. In

order to assert a claim under La.R.S. 51:122, a plaintiff must assert that the activity

purporting to violate the statute must result “in an unreasonable restraint of trade.”

Id. At the same time, “[n]ot every business arrangement that restrains trade in

some manner is illegal[.]” Id.

Claims of restraints against trade fall into two categories: horizontal or

vertical. “Horizontal combinations are those between competitors that restrain

enterprises at the same level of distribution. Vertical combinations, on the other

hand, are imposed by persons at different levels of distribution, usually by one

higher up the distribution chain than the party restrained.” Id. at 117-18. In the

matter before us, the parties agree that the Clarys‟ claim is that of a vertical

restraint against trade. “When a vertical conspiracy is alleged, plaintiffs must

show that the restraint of trade violates the „rule of reason.‟ Under this rule, the

fact-finder weighs all of the circumstances of a case in deciding whether a

restrictive practice should be prohibited as imposing an unreasonable restraint on

competition.” Id. at 118.

With regard to the burden of proof in a claim requiring a rule of reason

analysis, “both federal and Louisiana law requires proof of three elements: that the

defendants (1) engaged in a conspiracy (2) that restrained trade or injured
14

competition (3) in a particular market.” Van Hoose v. Gravois, 11-976, p. 8

(La.App. 1 Cir. 7/7/11), 70 So.3d 1017, 1022.

The Clarys assert a conspiracy between an individual no longer affiliated

with State Farm (Gene Haymon), a current State Farm agent (David Haymon), two

State Farm regional executives (Patrick White and Kimberly Rollins), and a

number of State Farm entities having supervision of all of the other defendants

except Gene Haymon. Accepting the well-pleaded allegations of the Clarys‟

petition to be true, we find the pleadings establish that State Farm recruited Mr.

Clary to be a State Farm agent and ultimately offered him Gene Haymon‟s

Leesville, Louisiana, agency upon Gene Haymon‟s retirement. Thereafter, Gene

Haymon and the remaining defendants conspired to interfere with Mr. Clary‟s

takeover of the agency by allowing the Haymons to threaten, lie to, and encourage

clients in the Leesville community to transfer their policies away from Mr. Clary in

an effort, not only to move the business to David Haymon‟s new agency, but to

drive Mr. Clary out of business. State Farm, through its field agents and

executives, not only condoned the Haymons‟ activities, but joined in the efforts.

We find that the pleadings, when taken as true, establish a conspiracy among the

various defendants.

With regard to the restrained trade or injured competition element of an

antitrust cause of action, we first recognize that “antitrust laws are for the

protection of competition[,]” and “[a] claim under LSA-R.S. 51:122 must include

an allegation of damage to competition.” Plaquemine Marine, Inc., 859 So.2d at

118. Furthermore, La.R.S. 51:122 is “virtually identical” to the corresponding

section “of the Sherman Antitrust Act, 15 U.S.C. § 1 et seq., and federal analysis of

the Sherman Antitrust Act is persuasive, though not controlling.” Id. at 117.

15

The importance of the assertion of damage to competition in an antitrust

claim was explained in JetAway Aviation, LLC v. Board of County Commissioners

of County of Montrose, Colorado, 754 F.3d 824, 835 (10th Cir. 2014), wherein the

federal appeals court explained that “the Sherman Act is not concerned with overly

aggressive business practices, or even conduct that is otherwise illegal, so long as it

does not unfairly harm competition.” The fact that other state and federal laws

govern this otherwise offensive and/or illegal activity explains the lack of concern

expressed in the antitrust legislation.

Thus, consonant with the Sherman Act‟s statutory concerns,
“[t]he antitrust injury requirement ensures that a plaintiff can recover
only if [its injury] stems from a competition-reducing aspect or effect
of the defendant‟s behavior.” Elliott Indus. [Ltd. P’ship v. BP Am.
Prod. Co.], 407 F.3d [1091,] 1124-25 [10th Cir. 2005] (first alteration
in original) (quoting Atl. Richfield Co. [v. USA Petroleum Co.], 495
U.S. [328,] 344, 110 S.Ct. 1884[, 1894 (1990)]) (internal quotation
marks omitted)[.]

Id. (first and second alternation in original).

Thus, no matter how egregious the facts giving rise to the claim of conspiracy, if

the petition fails to allege a corresponding injury to competition or restraint of

specific trade activity, the claimant fails to state a cause of action for damages

under La.R.S. 51:122.

The Clarys thread the general effect on competition through the pleading

setting forth the factual basis. Specifically, the conspiratorial activities not only

caused the Clarys personal injury, but it also created “mass chaos” among the

policy holders who did not know how to respond to the lies and misinformation

being spread by the Haymons; and while the conspiracy was aimed at disrupting

Mr. Clary‟s ability to function as a State Farm agent, it also had the effect of

depriving clients and potential clients of the protections afforded them in making

personal insurance decisions. Clearly, the Clarys‟ injury arises from actions by the

16

defendants that have the effect of reducing competition in the insurance field. We

find that the pleadings, when taken as true, establish that the conspiratorial

activities of the defendants restrained trade and injured competition.

Finally, the pleadings must establish a particular market affected by the

conspiratorial activity.

Under the rule of reason, as applied to Sherman Act cases, proof that a
defendant‟s activities adversely affected competition in the
appropriate product and geographic markets is essential to recovery.
Doctor’s Hospital of Jefferson, Inc. v. Southeast Medical Alliance,
Inc., 123 F.3d 301, 307 (5th Cir.1997). The relevant market has both
geographic dimensions and product dimensions. Domed Stadium
Hotel, Inc. v. Holiday Inns, Inc., 732 F.2d 480, 487 (5th Cir.1984).
The relevant market includes a geographic market, which is the
section of the country in which sellers of a particular product operate,
as well as the product market, which encompasses the differences
among various commodities and the willingness of buyers to
substitute one product for another. Plaquemine Marine, Inc., 859
So.2d at 120. A proposed product market must include all
commodities reasonably interchangeable by consumers for the same
purposes. United States v. E.I. du Pont de Nemours & Co., 351 U.S.
377, 395, 76 S.Ct. 994, 100 L.Ed.2d 1264 (1956). The market is
established by examining the substitutes that a consumer might
employ and the extent to which consumers will change their
consumption of one product in response to a price change in another,
i.e., the cross-elasticity of demand. Eastman Kodak Co. v. Image
Technical Services, Inc., 504 U.S. 451, 469, 112 S.Ct. 2072, 119
L.Ed.2d 265 (1992).

HPC Biologicals, Inc. v. UnitedHealthcare of La., Inc., 16-585, p. 10 (La.App. 1
Cir. 5/26/16), 194 So.3d 784, 794.

The pleadings, when accepted as true, reflect that the conspiratorial activities

of the defendants restrained Mr. Clary and injured his ability to perform State Farm

marketing services in the Leesville community and the Leesville insurance market.

Not only was his ability to service accounts of the agency he took over harmed, but

the same could be said for his ability to acquire new accounts. The lies and

misinformation spread within the community prevented consumers from making

informed decisions with regard to their insurance needs, and some of the

information they were provided was from a yet-to-be licensed agent. Accepting
17

the pleadings as true, we find that the Clarys did establish that the conspiratorial

activities of the defendants restrained trade and injured competition with a product

and geographical market of Leesville, Louisiana.

Considering the record before us, we find that the Clarys‟ pleadings state a

cause of action for a violation of La.R.S. 51:122. Therefore, we find no merit in

this assignment of error.

Assignment of Error Number Three

In this assignment of error, the State Farm appellants and the Haymon

appellants argue that the trial court erred in rejecting their peremptory exception of

no cause of action as it related to the Clarys‟ LUTPA claim pursuant to La.R.S.

51:1401, et seq.

Louisiana Revised Statutes 51:1405(A) states that “[u]nfair methods of

competition and unfair or deceptive acts or practices in the conduct of any trade or

commerce are hereby declared unlawful.”

The Louisiana Unfair Trade Practices Act, La. R.S. 51:1401, et
seq., does not enumerate those instances of conduct that constitute
unfair trade practices, but La. R.S. 51:1405(A) provides that “[u]nfair
methods of competition and unfair or deceptive acts or practices in the
conduct of any trade or commerce are hereby declared unlawful.”
This Court has noted that the LUTPA is patterned after the Federal
Trade Commission Act and prohibits the same type of deceptive and
anticompetitive conduct as prohibited by the Federal Trade
Commission Act. Capitol House Preservation Co., LLC v. Perryman
Consultants, Inc., 2008-0367 (La.App. 1st Cir.8/28/09), 47 So.3d 408,
417, writ denied, 2009-2638 (La.2/12/10), 27 So.3d 856, cert. denied,
--- U.S. ---, 131 S.Ct. 104, 178 L.Ed.2d 30 (2010). Therefore, in
interpreting Louisiana‟s statute, a court must consider how the Federal
Trade Commission and the federal courts have applied the Federal
Trade Commission Act to various types of conduct. Id. Under the
Federal Trade Commission Act, vertical territorial and customer
restrictions are not prohibited absent a showing of injury to
competition. Red Diamond Supply, Inc. [v. Liquid Carbonic Corp.],
637 F.2d [1001,] 1008 [(5th Cir.), cert. denied, 454 U.S. 827, 102 S.Ct.
119 (1981)]. In addition, the U.S. Fifth Circuit has noted that “the
real thrust of the LUTPA, modeled after the Federal Trade
Commission Act, ... is to deter injury to competition.” Reingold v.
Swiftships, Inc. 126 F.3d 645, 652 (5th Cir.1997) (quoting Omnitech
18

International, Inc. v. Clorox Company, 11 F.3d 1316, 1331 (5th Cir.),
cert. denied, 513 U.S. 815, 115 S.Ct. 71, 130 L.Ed.2d 26 (1994)).

Van Hoose, 70 So.3d at 1023-24 (first alteration in original).

As previously discussed regarding the antitrust claim, the Clarys have

adequately alleged injury to competition in this matter. That being the case, we

find that they have stated a cause of action under LUTPA as well. We find no

merit in this assignment of error.

DISPOSITION

For the foregoing reasons, we affirm the trial court‟s denial of the defendants‟

peremptory exceptions of no cause of action directed at the claims of Michael Cal

Clary and Catherine Ann Hixson Clary arising under the Louisiana Antitrust

Statute, La.R.S. 51:122, and the Louisiana Unfair Trade Practices Act, La.R.S.

51:1401, et seq. We assess all costs of this appeal to the defendants, State Farm

Mutual Automobile Insurance Company, State Farm Fire and Casualty Company,

State Farm General Insurance Company, State Farm Life Insurance Company,

State Farm VP Management Corporation, State Farm Bank, F.S.B, Insurance

Placement Services, Inc., Patrick White, Kimberly Rollins White, Gene Haymon,

and David Haymon.

AFFIRMED.

19

NUMBER 16-168

COURT OF APPEAL, THIRD CIRCUIT

STATE OF LOUISIANA

MICHAEL CAL CLARY, ET UX

VERSUS

STATE FARM MUTUAL AUTOMOBILE INS. CO. ETC., ET AL.

CONERY, J., dissents and assigns reasons.

I would reverse the trial court’s ruling denying the Defendants’ peremptory

exception of no cause of action pursuant to the Louisiana Antitrust Statute, La.R.S.

51:122. Further, I would find that trial court’s judgment denying the Defendants’

peremptory exception of no cause of action seeking to dismiss the Clarys’ claim

pursuant to La.R.S. 51:1406, the LUTPA claim, is not a final judgment, but instead

an interlocutory judgment which is not subject to appeal. La.Code Civ.P art. 2083.

FACTS AND PROCEDURAL HISTORY

As the majority comprehensively summarized, this case involves a dispute

over the transition of the business of Gene Haymon’s State Farm Insurance

Agency in Leesville, Louisiana which was occasioned by his decision to retire.

Michael Clary was recruited by State Farm to take over the Haymon Agency. Mr.

Clary knew that David Haymon, Gene’s son and a State Farm Agency Field

Executive (AFE) in Missouri, was also planning to return to Louisiana to become

an agent.

Mr. Clary claimed that he received assurances from Todd McFarland, the

State Farm Bayou Agency Field Office AFE, that steps would be taken by State

Farm to assure that Mr. Clary would be treated fairly in the transition of the

insurance policies of the customers of the Haymon Agency. In reliance on the

assurances of Mr. McFarland and further assurances by Ms. Kimberly Rollins,

State Farm’s Vice President of Agency, Mr. Clary remained in Louisiana and

accepted the position in Leesville. The agreement signed by Mr. Clary involved a

division of Mr. Haymon’s book of business between Mr. Clary and Gene Haymon.

From the outset, problems with the arrangement begin to surface, which

eventually led to the Clarys filing suit against the Defendants alleging multiple

claims, including conspiracy to violate and breach the State Farm contracts,

defamation causing intentional infliction of emotional distress, violation of the

insurance whistleblower statute, breach of contractual stipulation pour autri,

detrimental reliance, loss of consortium, as well as a violation of La.R.S. 51:122,

the Louisiana Antitrust Statute, and La.R.S. 51:1406, LUTPA.

The Defendants responded by filing peremptory exceptions of no cause of

action seeking to dismiss the Clarys’ claims pursuant to La.R.S. 51:122, the

Louisiana Antitrust Statute, and LUTPA, La.R.S. 51:1406. The trial court heard

the Defendants’ exceptions on December 16, 2015, took the matter under

advisement, and issued its judgment on January 12, 2016, denying the Defendants’

peremptory exceptions of no cause of action pursuant to La.R.S. 51:122, the

Louisiana Antitrust Statute, and La.R.S. 51:1406, LUTPA. Defendants timely

filed an expedited appeal on both issues.

2

JURISDICTION ON APPEAL

Appeal of the Denial of the Peremptory Exception of No Cause of Action
Pursuant To Louisiana’s Antitrust Statute, La.R.S. 51:122

This court cannot determine the merits of an appeal unless there is

jurisdiction which is properly invoked by a valid final judgment. La.Code Civ.P.

art. 2083. The denial of the Defendants’ peremptory exception of no cause of

action seeking to dismiss the Clarys’ claims pursuant to Louisiana’s Antitrust

Statute, La.R.S. 51:122, is not normally appealable.1

However, special jurisdiction allowing the appeal of the denial of a

peremptory exception of no cause of action seeking to dismiss an antitrust claim is

based on La.R.S. 51:134-135. See Van Hoose v. Gravois, 11-976 (La.App. 1 Cir

7/7/11), 70 So. 3d 1017, 1021.2 The Defendants have timely complied with the

expedited appeal delays of the trial court’s judgment of January 16, 2016.

Therefore, I agree with the majority that this court has the necessary jurisdiction on

1
Louisiana Code of Civil Procedure Article 1915 provides this court with the
jurisdictional basis for appeal in general. It was revised by the legislature effective August 1,
2013, and that version of the article is applicable to this court’s determination of jurisdiction.
2
Louisiana Revised Statutes 51:134 provides:

In all cases under this Part the defendant shall file all exceptions in limine litis, or
if necessary in the alternative, after the usual delays, and any additional delays as
the court may allow; however, a plea to the jurisdiction is not waived by other
pleas or exceptions filed. The judge shall take up such exceptions in preference
over all other business and shall decide all questions raised in the exceptions
within ten days after submission, and his ruling shall have the effect of res
judicata, unless the party cast shall appeal within five days. The appeal is
returnable within ten days to the appellate court which shall hear and determine
the case within forty days. If the exceptions are overruled by final judgment of
the appellate court, the defendant shall file his answer covering all questions of
controverted fact within fifteen days, and the case may be set for trial on the
application of either party, which case the judge shall consider in preference over
all other business.

3

appeal to review de novo the denial of the Clarys’ claims against the Defendants

for violation of Louisiana’s Antitrust Statute, La.R.S. 51:122.

Appeal of the Denial of the Peremptory Exception of No Cause of Action
Pursuant to Louisiana’s Unfair Trade Practices Act, La. R.S. 51:1405

The Defendants have also appealed the denial of their peremptory exception

of no cause of action seeking to dismiss the Clarys’ claims pursuant to La.R.S.

51:1406, LUTPA. Louisiana Revised Statutes 51:1405(B) provides, in pertinent

part, the rule governing an appeal from the district court in a LUTPA claim,

“Appeals may be had from any ruling of a district court in accordance with the

Code of Civil Procedure, except that such appeals shall be given preference and

heard in priority to other appeals.”

Once again, this court cannot determine the merits of an appeal unless there

is jurisdiction which is properly invoked by a valid final judgment, pursuant to

Louisiana Code of Civil Procedure Article 2083. The procedure for determining

whether an exception sustained in part when it only partially dismisses the claims

against a party is appealable is found in La.Code Civ.P. art. 1915(B)(1),3 which

provides:

When a court renders a partial judgment or partial summary
judgment or sustains an exception in part, as to one or more but less
than all of the claims, demands, issues, or theories against a party,
whether in an original demand, reconventional demand, cross-claim,
third-party claim, or intervention, the judgment shall not constitute a
final judgment unless it is designated as a final judgment by the court
after an express determination that there is no just reason for delay.
Louisiana Code of Civil Procedure Article 1915 (B)(2) further provides:
In the absence of such a determination and designation, any
such order or decision shall not constitute a final judgment for the
purpose of an immediate appeal and may be revised at any time prior

3
Louisiana Code of Civil Procedure Article 1915 was revised by the legislature effective
August 1, 2013, and that version of the article is applicable to this court’s determination of
jurisdiction.

4

to rendition of the judgment adjudicating all the claims and the rights
and liabilities of all the parties.

The January 12, 2016 judgment of the trial court did not designate the denial

of the Defendants’ peremptory exception of no cause of action seeking to dismiss

the Clarys’ claims pursuant to the LUTPA as a “final judgment.” Therefore, I

would find it is not a final judgment, but an interlocutory ruling pursuant to

La.Code Civ.P. art. 2083(C), which provides, “An interlocutory judgment is

appealable only when expressly provided by law.” The official revision comments

to La.Code Civ.P art. 2083 provide that, “Judgments overruling the following

exceptions have been held to be interlocutory and unappealable: exceptions of no

right or cause of action.”

Defendants cite Van Hoose, which cited two cases addressing LUTPA

claims along with antitrust claims on appeal. In reviewing the two cases cited in

support of the conclusion in Van Hoose, I would find that neither support this

court’s jurisdiction to review on appeal the Clarys’ LUTPA claim.

In Southern Tool & Supply, Inc. v. Beerman Precision, Inc., 03-960 (La.

App 4 Cir. 11/26/03), 862 So.2d 271, writs denied, 03-3481 (La. 3/1/04), 869

So.2d 821, 03-3518 (La. 3/12/04), 869 So.2d 825, 03-3536 (La. 3/1/04), 869 So.2d

826, the court of appeal did not address the issue of jurisdiction on appeal over the

plaintiff’s LUTPA claim. The court only considered the trial court’s reasons for

ruling, which collectively referred to paragraphs eighteen to twenty four of the

plaintiff’s petition. The appeal court addressed each of plaintiff’s three causes of

action separately, i.e. claims made under La.R.S. 51:122-123 of the Louisiana

antitrust laws, and La.R.S. 51:1406, the LUTPA claim. However, in its discussion

5

of the peremptory exception of no cause of action for the plaintiffs’ LUTPA claim,

there was no discussion of the court’s basis for jurisdiction.

In Jefferson v. Chevron U.S.A. Inc., 97-2436 (La.App 4 Cir. 5/20/98) 98-254

(La.App. 4 Cir 5/20 98), 713 So.2d 785, writ denied, 98-1681 (La. 10/16/98), 727

So.2d 441, the court of appeal found that La.R.S. 51:135 provided for an expedited

appeal from the trial court’s denial of the defendant’s motion for summary

judgment. The court of appeal also found “the appellate jurisdiction conferred by

[La.R.S.] 51:135 applied specifically to antitrust claims, and absent irreparable

injury, defendant had no right to appeal the denial of the summary judgment as to

plaintiffs’ non-antitrust claims. La.Code Civ.P art. 2083.” Jefferson, 713 So.2d at

787. However, the Defendant’s sought supervisory writs for the non-antitrust

claims and the appeal court consolidated the writ applications on appeal.

Therefore, the antitrust claims and the non-antitrust claims were considered in the

same appeal, “albeit through separate procedural vehicles.” Jefferson, 713 So.2d at

787.

In Van Hoose, the first circuit determined that based on the forgoing

jurisprudence, “in the event that the Court does not have appellate jurisdiction over

the LUTPA claim, we choose to exercise our supervisory jurisdiction pursuant to

Louisiana Constitution of 1974 Article V, § 10(A).4 However, in Fontenot v. Miss

4
Louisiana Constitution of 1974 Article V, § 10(A) provided (emphasis added):

Jurisdiction. Except as otherwise provided by this constitution, a court of appeal
has appellate jurisdiction of (1) all civil matters, including direct review of
administrative agency determinations in worker’s compensation matters as
heretofore or hereafter provided by law, (2) all matters appealed from family and
juvenile courts, and (3) all criminal cases triable by a jury, except as provided in
Section 5, Paragraph (D)(2) of this Article. It has supervisory jurisdiction over
cases which arise within its circuit.

6

Cathie’s Plantation, Inc., 634 So.2d 1380, 1381 (La.App. 3 Cir. 1994), this court

stated:

A denial of an exception of no cause of action is interlocutory
and not appealable where there is no showing of irreparable harm.
La.C.C.P. arts. 1841, 2083; Wallace v. Pan American Fire & Casualty
Ins. Co., 386 So.2d 158 (La.App. 3d Cir.1980). Merely requiring the
parties to go to trial does not constitute irreparable injury. The test for
determining whether an interlocutory judgment may cause irreparable
harm is whether the procedural error will have such an effect on the
merits of the case that the appellate court cannot correct an erroneous
decision on the merits. Bernard v. Allstate Ins. Co., 396 So.2d 548
(La.App. 3d Cir.1981). We think in this case it would not.

The Clarys have, as stated above, lodged a total of eight separate causes of

action against the Defendants, including their claim made under LUTPA. I would

therefore find, as did the court in Fontenot, that the denial of the trial court of the

Defendants’ peremptory exception of no cause of action seeking to dismiss the

Clarys’ LUTPA claim will not “cause irreparable harm.” Therefore, pursuant to

La.Code Civ.P. art. 2083, I would dismiss the appeal of the trial court’s

interlocutory judgment denying the Defendants’ peremptory exception of no cause

of action seeking the dismissal of the Clarys’ claim under the LUTPA.

ASSIGNMENTS OF ERROR

The two assignments of error on appeal related to the Clarys’ claim pursuant

to the Louisiana Antitrust Statute, La.R.S. 51:122, are as follows:

I. The trial court erred when it decided that it could not grant an
exception of no cause of action that dismissed some, but not all,
of these plaintiffs’ claims.

II. The trial court erred when it overruled/denied Appellants
Exception of No Cause of Action as to Appellees’ restraint of
trade claim under La.Rev. Stat. § 51:122.

7

Assignment of Error One - Reliance by the Trial Court on the Louisiana
Supreme Case of Everything on Wheels v. Subaru S. Inc., 616 So.2d 1234
(La.1993).

In their first assignment of error, the Defendants claim that the trial court

committed an error of law in finding and stating in its judgment:

While the Court does believe the Plaintiffs have stated a cause
of action for both alleged violations, the Court also notes Everything
on Wheels Subaru, Inc. v. Subaru S., Inc., “if there are two or more
items of damages or theories of recovery which arise out of the
operative facts of a single transaction or occurrence, a partial
judgment on an exception of no cause of action should not be
rendered to dismiss one item of damages or theory of recovery.”
[Everything on Wheels v. Subaru S. Inc.,] 616 So.2d 1234(La.1993).

After the Everything on Wheels ruling by the supreme court was rendered,

the legislature amended La.Code Civ.P. art. 934 in 2003 to state as follows:

When the grounds of the objection pleaded by the peremptory
exception may be removed by amendment of the petition, the
judgment sustaining the exception shall order such amendment within
the delay allowed by the court. If the grounds of the objection raised
through the exception cannot be so removed, or if the plaintiff fails to
comply with the order to amend, the action, claim, demand, issue, or
theory shall be dismissed.

The comment to the 2003 amendment of La.Code Civ.P. art. 934 specifically

states:

The purpose of the 2003 amendment to this Article is to clarify
that pursuant to Article 1915(B) the trial court can now render a
partial judgment sustaining an exception in part as to one or more but
less than all of the actions, claims, demands, issues, or theories in the
case. When an exception is sustained to less than all the claims,
demands, issues or theories in an action, the judgment shall not
constitute a final judgment unless it is designated as such after an
express determination that there is no just reason for delay.

More recently, a panel of this court discussed the application of the

peremptory exception of no cause of action in affirming the dismissal of the

plaintiff’s bystander damages claim and stated:

A partial judgment on an exception of no cause of action should not

8

be rendered to dismiss only one theory of recovery out of several
within a single cause of action. Everything on Wheels Subaru, Inc. v.
Subaru S., Inc., 616 So.2d 1234 (La.1993). However, a partial
judgment on an exception of no cause of action may be rendered to
dismiss one of several separate causes of action. Id. In determining
whether a claim can be properly dismissed through an exception of no
cause of action, then, it is necessary to determine whether that claim is
an alternate theory of recovery or an independent cause of action.

Castille v. La. Medical Mut. Ins. Co., 14-519, pp. 3-4 (La.App. 3 Cir. 11/5/14), 150

So.3d 614, 618.

In their petition, the Clarys stated a total of eight separate causes of action

including the one remaining at issue on appeal, “C. Third Cause of Action –

Conspiracy in Restraint of Trade in Violation of the Louisiana Anti-Trust

Statute[,]” claiming that the Defendants have violated La.R.S. 51:122.

The Clarys’ other causes of action include the following:

A. First Cause of Action-Detrimental Reliance

B. Second Cause of Action – Breach of Contract

D. Fourth Cause of Action – Violation of the Louisiana Unfair
Trade Practices Act,

E. Fifth cause of Action/Intentional Inflection of Emotional
Distress and Conspiracy to Intetionally Inflict Emotional
Distress

F. Sixth Cause of Action/Whistleblower

G. Seventh Cause of Action - Breach of Contract Stipulation Pour
Autri

H. Eighth Cause of Action- Loss of Consortium

Louisiana Revised Statutes 51:122, Louisiana’s Antitrust Statute, clearly

allows for an independent cause of action, separate and apart from the other claims

made by the Clarys in their petition. Louisiana Revised Statutes 51:134 mandates

that adverse rulings made by a trial court under this statute are subject to

9

immediate appeal, with shortened deadlines for appeal. The basis of this court’s

appellate jurisdiction in this case provides that failure to comply with the required

appeal deadlines “shall have the effect of res judicata, unless the party cast shall

appeal within five days.” La.R.S. 51:134.

Obviously, the statute contemplates that a claim made under La.R.S. 51:122

is capable of being dismissed by way of a peremptory exception of no cause of

action, without dismissing the plaintiff’s remaining claims. Therefore, the trial

court committed an error of law in denying the Defendants peremptory exception

of no cause of action pursuant to La.R.S. 51:122, on that basis. I join the

majority’s decision on this narrow issue that the trial court committed legal error in

denying the exception on this basis alone. I further agree with the majority’s view

that the appeal of the denial of the exception based on the provisions of La.R.S.

51:134 as discussed infra is proper and we do have jurisdiction over that issue on

appeal.

Assignment of Error Two – The Clarys’ Failed To State A Cause Of Action
Pursuant to La.R.S. 51:122, The Louisiana Antitrust Statute

The Clarys’ claim under Louisiana’s Antitrust Statute, La.R.S. 51:122, is

found in paragraphs forty-eight through fifty of their petition which states:

48.

C. Third Cause of Action - Conspiracy in Restraint of Trade in
Violation of the Louisiana Antitrust Statute

The conspiracy effected between DAVID HAYMON, GENE
HAYMON, KIMBERLY ROLLINS, PATRICK WHITE and other
STATE FARM officials caused the restraint of trade of MIKE
CLARY and injured his ability to perform the STATE FARM
marketing services in the Leesville community. Defendants’ conduct
clearly had an adverse effect on MIKE CLARY’S ability to compete
in the Leesville market. As effected, the conspiracy by these
Defendants to deny MIKE CLARY the opportunity to service
accounts and acquire new accounts that he was told he would have

10

when he opened his agency, and had denied MIKE CLARY of the
opportunity to accrue benefits from the beginning of January 2012
through the present and had resulted in the loss of many policies.

49.

The conspiracy among the Defendants harmed consumers by
ensuring they received false information which consumers relied upon
to select their insurance agents, by depriving customers of the benefits
of their choice of insurance agents; and by exposing private
information of consumers to those not licensed as insurance agents in
Louisiana.

50.

The actions of Defendants constitute violations of the Louisiana
Anti-Trust Statute which provides: “every contract, combination in
the form of trust or otherwise, or conspiracy, in restraint of trade or
commerce in this state is illegal.” Accordingly, MIKE CLARY is
entitled to treble damages, costs, and reasonable attorney fees as a
result of the breach of La. R.S. 51:122.

Louisiana Revised Statutes 51:122

Louisiana Revised Statutes 51:122, Louisiana’s Antitrust Statute states:

A. Every contract, combination in the form of trust or otherwise, or
conspiracy, in restraint of trade or commerce in this state is illegal.

B. Whoever violates this Section shall be fined not more than five
thousand dollars, or imprisoned, with or without hard labor, not more
than three years, or both.

C. For purposes of this Title, a parent corporation, limited liability
company, partnership, or partnership-in-commendam is not capable of
conspiring with any subsidiary that it controls, and each such
controlled subsidiary is not capable of conspiring with any other
wholly owned subsidiary controlled by the same common parent.

D. For the purposes of this Part only, an officer or employee of a legal
entity is not capable of conspiring with the legal entity or with another
officer or employee of the legal entity when they are acting on behalf
of the entity.

In Van Hoose, which also involved a dispute between insurance agents and

their insurance agencies, a panel of our sister circuit stated:

11

The federal and state antitrust laws were intended to be sweeping in
breadth, encompassing every conspiracy, contract, or combination that
restrains trade. Louisiana Power & Light Co. v. United Gas Pipe Line
Co., 493 So.2d 1149, 1154-55 & n. 12 (La.1986). Not every business
arrangement that restrains trade in some manner is illegal, however.
The first step in analyzing an agreement to restrain trade is to
determine whether it should be categorized as horizontal or vertical.

Van Hoose, 70 So.3d at 1022.

All parties agree that this case involves a vertical restraint of trade which

was defined in Plaquemine Marine, Inc. v. Mercury Marine, 03-1036 (La.App 1

Cir. 7/25/03), 859 So.2d 110 as follows, “A vertical restraint is imposed by persons

at different levels of distribution, usually by one higher up in the distribution chain

than the party restrained. When a vertical conspiracy is alleged, plaintiffs must

show that the restraint of trade violates the ‘rule of reason.’” Plaquemine Marine,

Inc., 859 So.2d at 118. “The rule of reason analysis under both federal and

Louisiana law requires proof of three elements: that the defendants (1) engaged in

a conspiracy (2) that restrained trade or injured competition (3) in a particular

market.” Van Hoose, 70 So.3d at 1022.

The rule of reason and its application to the analysis of an antitrust claim

under La.R.S. 51:122 requires that a plaintiff must “include an allegation of

damage to competition” in the petition “which cannot be met by broad allegations

of harm to the ‘market’ as an abstract entity.” Plaquemine Marine, 859 So.2d at

118.

Under our system of fact-pleading, a plaintiff is required to state “material

facts that form the basis for the asserted cause of action.” Van Hoose, 70 So. 2d at

1023. This requirement is equally if not more important in stating a claim for an

antitrust violation, as “A mere conclusion unsupported by material facts does not

set forth a cause of action; therefore, conclusory statements of fact or formulaic

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recitations of the elements of an antitrust violations are insufficient to state a

claim.” Id. at 1023.

Allegations in the Clarys’ Petition

In this case, the Clarys allege in their petition at paragraph forty-eight that

the Defendants “caused the restraint of trade of MIKE CLARY and injured his

ability to perform the STATE FARM marketing services in the Leesville

community.” This conduct by the Defendants “clearly had an adverse effect on

MIKE CLARY’S ability to compete in the Leesville market,” and denied “MIKE

CLARY the opportunity to service and acquire new accounts with STATE Farm

products . . . and to lose more than half of the estimated accounts he was told he

would have when he opened his agency.”

Paragraph forty-nine of the Clarys’ petition states that consumers were

harmed by the Defendants’ conspiracy by receiving “false information which

consumers relied on to select their insurance agents,” deprived them of “the choice

of insurance agents.” Finally, “by exposing private information of consumers to

those not licensed as insurance agents in Louisiana.”

Failure to Allege an Allegation of Damage to Competition

In order for Mr. Clary to state a claim under La.R.S. 51:122, his petition

“must include an allegation of damage to competition.” Plaquemine Marine, 859

So.2d at 118. The allegations made in his petition only state that Mr. Clary was

restrained from performing State Farm marketing services in the Leesville

community, which had an “adverse effect” on both his opportunity to compete and

service new accounts in the Leesville market, which resulted in Mr. Clary suffering

a financial loss. Therefore, the only injuries plead by the Clarys is to themselves

and not injury to competition as required to support an antitrust claim.

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Even though the Clarys’ claim that insurance consumers were harmed by the

false statements made by the Defendants, which deprived them of their “choice of

insurance agents,” there are no facts to support this conclusion or to indicate that

any of the consumers were deprived of their ability to choose or change insurance

agencies, which would support an “allegation of damage to competition.”

Plaquemine Marine, 859 So.2d at 118.

Therefore, I would find based on a de novo review of the record that the

Clarys have failed to state a claim pursuant to La.R.S. 51:122, the Louisiana

Antitrust Statute, by only pleading injury to Mr. Clary and his business relationship

with State Farm, and failing to allege “facts to indicate that anyone other than

themselves was [actually] injured” by the dealings between the Clarys and the

Defendants. Plaquemine Marine Inc., 859 So.2d at 119. Accordingly, I would

reverse the judgment of the trial court denying the Defendants’ peremptory

exception of no cause of action claim pursuant to La.R.S. 51:122, the Louisiana

Antitrust Statute.

CONCLUSION

Pursuant to the requirements of La.Code Civ.P. art. 934, were this a majority

opinion, this case would have to be remanded in order for the Clarys to be afforded

an opportunity to amend their petition in accordance with the delays set by the trial

court. See Byargeon v. Concordia Chamber of Commerce, Inc., 15-900 (La.App. 3

Cir. 3/16/16), writ denied, 16-705, (La. 6/3/16), 192 So.2d 752. Since the majority

has affirmed the trial court’s denial of the exception of no cause of action as to

both the antitrust claims and the LUTPA claims, a remand at this juncture is moot,

but I would find that the entire issue could be revisited on final appeal after full

trial on the merits.

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