FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
THE JACK RUSSELL TERRIER
NETWORK OF NORTHERN
CALIFORNIA, a California non-profit
corporation; CLAUDIA SPRAGUE;
GEORGIA FISHER,
Plaintiffs-Appellants, No. 02-17264
v. D.C. No.
AMERICAN KENNEL CLUB, INC., a CV-98-20932-JW
New York not-for-profit
corporation; THE JACK RUSSELL
TERRIER CLUB OF AMERICA, a
Kentucky non-profit corporation,
Defendants-Appellees.
5279
5280 JACK RUSSELL TERRIER NETWORK v. AKC
THE JACK RUSSELL TERRIER
NETWORK OF NORTHERN
CALIFORNIA, a California non-profit
corporation; CLAUDIA SPRAGUE;
GEORGIA FISHER,
Plaintiffs-Appellees,
v. No. 03-15345
AMERICAN KENNEL CLUB, INC., a
New York not-for-profit D.C. No.
CV-98-20932-JW
corporation, OPINION
Defendant,
and
THE JACK RUSSELL TERRIER
CLUB OF AMERICA, a Kentucky
non-profit corporation,
Defendant-Appellant.
Appeal from the United States District Court
for the Northern District of California
James Ware, District Judge, Presiding
Argued and Submitted
December 8, 2004—San Francisco, California
Filed May 17, 2005
Before: Dorothy W. Nelson, Andrew J. Kleinfeld, and
Ronald M. Gould, Circuit Judges.
Opinion by Judge Gould
JACK RUSSELL TERRIER NETWORK v. AKC 5283
COUNSEL
Malcolm A. Misuraca, Law Offices of Malcolm A. Misuraca,
Newport Beach, California, Victoria E. Brieant, Stroock &
Stroock & Lavan LLP, Miami, Florida, for the plaintiffs-
appellants.
Eric R. Haas, Charles A. Brown, Burnham Brown LLP, Oak-
land, California, for the defendants-appellees.
5284 JACK RUSSELL TERRIER NETWORK v. AKC
OPINION
GOULD, Circuit Judge:
We must decide whether a complaint alleging a national
dog club’s policy banning members that register their dogs
with an alternative club raises cognizable claims of group
boycott pursuant to the Sherman Act. We must also decide
whether Appellants’ claim of false advertising pursuant to the
Lanham Act was properly dismissed for lack of standing after
trial.
The Jack Russell Terrier Network of Northern California
(“JRTNNC”) and individual Jack Russell Terrier owners and
breeders Claudia Sprague and Georgia Fisher (collectively
“Appellants”) appeal the district court’s judgment, following
a dismissal of antitrust claims on motion, and a dismissal of
false advertising claims after bench trial, in favor of the Jack
Russell Terrier Club of America (“JRTCA”). The JRTNNC,
a former regional affiliate of the JRTCA, seeks declaratory
and injunctive relief regarding a JRTCA policy known as the
“Conflicting Organization Rule” (“COR”), which provides
that JRTCA affiliates and members will recognize only the
JRTCA registry of Jack Russell Terriers, and will not register
their dogs with conflicting organizations such as the Ameri-
can Kennel Club (“AKC”). The Appellants argue that the
COR and its enforcement mechanisms constituted a “group
boycott” and “false advertising” in violation of the Sherman
and Lanham Acts, and unlawfully subjected the JRTNNC to
liability from those injured by the policy.
The district court granted the JRTCA’s motion to dismiss
the Appellants’ Sherman Act claims. After a bench trial, the
district court held that the Appellants lacked standing to raise
a claim under the Lanham Act. The Appellants appealed the
dismissal pursuant to Federal Rule of Civil Procedure
12(b)(6) and the trial ruling. The JRTCA cross-appealed the
district court’s decision to deny the JRTCA any of its costs.
JACK RUSSELL TERRIER NETWORK v. AKC 5285
We have jurisdiction pursuant to 28 U.S.C. § 1291, and we
affirm.
I
This case arises from a philosophical disagreement between
groups of well-intentioned people dedicated to a breed of dog,
the Jack Russell Terrier. A preliminary historical note is illu-
minating: Jack Russell Terriers were first bred in the south of
England in the mid-1800’s to hunt European red fox, both
over and underground, for the sport of kings. The breed got
its name from a renowned Nineteenth Century British hunts-
man and breeder, Parson John Russell, known as “The Sport-
ing Parson,” whose passion for fox hunting and working
terriers was legendary. Russell developed and bred the partic-
ular strain of white-bodied “fox” terriers now known as Jack
Russell Terriers to emphasize their working and hunting abili-
ties.1
The JRTCA is a national breed club and dog registry with
standards aimed at preserving the working-dog characteristics
and heritage of the Jack Russell Terrier.2 Formed in 1976, the
JRTCA is the largest organization and registry of Jack Russell
Terriers in the world, and derives a substantial amount of
income from interstate and foreign commerce in the Jack Rus-
sell Terrier.3 As its membership expanded, regional affiliates
of the JRTCA formed, and were required to comply with the
1
For more, see generally D. Caroline Coile, The Jack Russell Terrier
Handbook 1-14 (2000).
2
JRTCA Constitution, Art. I, § 2(g), at www.terrier.com/jrtca/
constitution.php3 (last visited Apr. 25, 2005). For more on the JRTCA, see
the JRTCA website at www.terrier.com.
3
With regard to the Sherman Act claims that were dismissed pursuant
to Rule 12(b)(6) for failure to state a claim, we take the facts as alleged
in the Appellants’ third amended complaint as true. With regard to the
facts as pertinent to the Lanham Act claim of false advertising, the facts
are as determined by the district court’s findings of fact after bench trial.
In general, these facts are the same.
5286 JACK RUSSELL TERRIER NETWORK v. AKC
JRTCA’s constitution as terms of membership. The JRTCA
promotes, runs, and sanctions national dog trials for the Jack
Russell Terrier. The club affiliates host regional Jack Russell
Terrier shows and trials for which the JRTCA provides certi-
fied judges. The winners of the regional shows are eligible for
the annual national JRTCA Jack Russell Terrier show. Jack
Russell Terrier owners and breeders attend these JRTCA
events to have their dogs compete in trial events and be
judged in shows to the breed standard; to advertise, buy, and
sell terriers; and to win awards. Awards are marks of excel-
lence for dog breeders that they use to differentiate and pro-
mote their kennels in future commerce. Only JRTCA
members are allowed to participate in JRTCA events.
Until recently, the Jack Russell Terrier was not a breed rec-
ognized by the AKC, the well-known umbrella registry for
almost all types of pure-bred dogs in the United States. Con-
sequently, unlike other breeds recognized by the AKC, there
was no AKC registry of Jack Russell Terrier breeders or an
AKC-breed certification by which potential owners could ver-
ify the authenticity of prospective dogs. Aiming to remedy
this omission, in 1991 a minority group of JRTCA members
asked the AKC to recognize the Jack Russell Terrier as an
official breed. They formed a “foundation stock” of dogs to
stand as a base for a AKC dog registry and to be used to trace
the pedigree of offspring. The AKC accepted the Jack Russell
as an official AKC-certified breed in 1998.4
The JRTCA opposed the AKC listing of Jack Russell Terri-
ers, believing that an alternative all-breed kennel club stan-
dard and registry was not in the best interests of the dog. The
JRTCA emphasizes the working-dog characteristics of the
breed, and believes that any kennel club standard would over
time change the dog into a show breed, bred for form not func-
4
Effective April 1, 2003, the official name of the AKC breed of Jack
Russell Terrier was changed to the “Parson Russell Terrier.”
JACK RUSSELL TERRIER NETWORK v. AKC 5287
tion.5 The JRTCA undertook a campaign to discourage its
members and the public from participating with the AKC,
which included the adoption of the COR.6 As part of its policy,7
JRTCA members who registered their dogs with the AKC had
5
AKC standards focus on creating a more uniform dog in size and color,
with less emphasis on a dog’s “working” traits. AKC dogs are certified by
litter at birth by the pedigree of their parents. In contrast, the JRTCA
requires the terrier to have reached one year of age, have a traceable pedi-
gree going back at least four generations, and veterinarian’s certificate
attesting that the dog has no inherited defects. A physical difference
between the AKC’s breed standard and the JRTCA’s breed standard is
found in two inches of height: a JRTCA Jack Russell Terrier must mea-
sure between ten and fifteen inches, while an AKC Parson Russell Terrier
must measure between twelve and fifteen inches.
6
At the end of the JRTCA constitution is the following notice:
IMPORTANT
The JRTCA is adamantly opposed to recognition of the Jack Rus-
sell Terrier by ANY kennel club. The JRTCA believes that inclu-
sion in any all-breed registry is detrimental to the protection and
preservation of the Jack Russell. The JRTCA’s unique registry,
with its strict inbreeding limitations and health requirements,
working certificate, sanctioned judge and field trial programs,
and breeder’s code of ethics are all designed to preserve the Jack
Russell’s unique working ability, great intelligence, sound physi-
cal structure, and broad standard so necessary to preserve this
unspoiled type, or strain, of working terrier known as the Jack
Russell.
The JRTCA feels so strongly about the impact of kennel club rec-
ognition on the future of the JR that persons participating in any
organization or registry in conflict with JRTCA goals and objec-
tives are not accepted for membership in the JRTCA.
The JRTCA, at http://www.terrier.com/jrtca/constitution.php3 (last visited
Apr. 25, 2005). There is a similar notification on the JRTCA’s application
for membership.
7
The COR provided that affiliates and members of the JRTCA will rec-
ognize only the JRTCA-terrier registry, will not become members in con-
flicting organizations, will not register their terriers with conflicting
organizations, and will not exhibit their terriers at JRTCA-sanctioned
events if they violate the COR.
5288 JACK RUSSELL TERRIER NETWORK v. AKC
their JRTCA membership terminated and were not permitted
to participate in JRTCA dog shows.
Georgia Fisher and Claudia Sprague, two of the Appellants,
are former Jack Russell Terrier breeders who were barred
from competing in JRTCA-sanctioned terrier trials after regis-
tering their dogs with the AKC. In addition to being denied
access to JRTCA dog trials and shows, the JRTCA “black-
listed” members who registered with the AKC by listing them
in the JRTCA’s bimonthly magazine dedicated to Jack Rus-
sell Terriers, True Grit.8 Both Fisher and Sprague were
“blacklisted” in True Grit. The Appellants allege that after the
listing other Jack Russell Terrier owners and breeders would
not associate with Fisher, breed with her dogs, or buy her
puppies.
Fisher and Sprague then independently consulted an attor-
ney who wrote letters to the JRTNNC threatening legal action
if the JRTNNC refused to allow the breeders to participate in
future JRTNNC dog shows.9 The JRTNNC in turn contacted
the JRTCA, requesting indemnification from the national
organization if Fisher or any other breeder sued the JRTNNC
for enforcing the JRTCA’s COR, and denying those owners
the ability to participate in JRTNNC events. The JRTCA
responded that, while it would continue to require the JRT-
NNC to comply with JRTCA regulations and to enforce them
against members who registered dogs with the AKC, the
JRTCA would not indemnify the JRTNNC from any possible
liability. The JRTNNC concluded that it could not subject
itself and its members to potential liability without indemnifi-
8
The so-called “blacklisting” of breeders refers to a listing in True Grit
with the caption: “The following breeders/owners are previous JRTCA
members who to our knowledge have registered their terrier(s) with the
AKC.”
9
As discussed above, for breeders, the dog show circuit is a major
means by which to differentiate their kennels. A dog that wins show
awards and honors increases its value for sale or breeding, as well as the
value of its offspring.
JACK RUSSELL TERRIER NETWORK v. AKC 5289
cation, and therefore would permit AKC-registered owners to
participate in its regional terrier events. The JRTCA then ter-
minated the JRTNNC’s charter.
The JRTNNC filed suit in the United States District Court
for the District of Northern California, naming the JRTCA
and the AKC as defendants, and claiming that the JRTCA’s
COR was an illegal group boycott of AKC dog owners and
breeders in violation of § 1 of the Sherman Act, 15 U.S.C.
§ 1.
The AKC moved to dismiss based on the fact that the JRT-
NNC had failed to point to any AKC conduct causing the
JRTNNC injury. The JRTCA also moved to dismiss. The dis-
trict court granted both motions and dismissed the action,
granting leave for the JRTNNC to amend its complaint as
against the JRTCA.
The JRTNNC filed a second amended complaint, adding
Sprague and Fisher as co-plaintiffs. The JRTNNC then filed
a third amended complaint, adding the Jack Russell Terrier
Club of Great Britain as a named co-defendant, as well as two
regional JRTCA affiliates, the California South Coast Jack
Russell Terrier Club (“SCJRTC”) and the Jack Russell Terrier
Club of Central California (“JRTCCC”).10 The third amended
complaint requested declaratory and injunctive relief, and
raised seven claims asserting a “group boycott” in violation of
the Sherman Act, a claim of “false description” in violation
of the Lanham Act, and two state law claims of unfair compe-
tition.
The JRTCA again moved for a Rule 12(b)(6) dismissal.
The district court granted the motion as to the JRTNNC’s
Sherman Act claims, but denied the motion as to the Lanham
10
The Jack Russell Terrier Club of Great Britain settled with the Appel-
lants before the second motion to dismiss, agreeing to drop their own COR
as part of the terms of that settlement.
5290 JACK RUSSELL TERRIER NETWORK v. AKC
Act claim and the California state law claims. Regarding the
Sherman Act “group boycott” claims, the district court found
that the JRTNNC had not alleged that the JRTCA-affiliated
local clubs pursued different economic goals than the national
JRTCA, and that this lack of multiple actors was fatal to the
Plaintiffs’ Sherman Act claims under Copperweld Corp. v.
Independence Tube Corp., 467 U.S. 752 (1984). The motion
to dismiss was denied with regard to the Lanham Act claim
and California state law unfair competition claims, and those
issues proceeded to trial.
After a seven-day bench trial, the district court concluded
that, while the “blacklisting” advertisement in True Grit con-
stituted commercial speech which could violate the Lanham
Act, the JRTCA’s actions did not violate the Lanham Act or
the California Business and Professions Code, § 17200 et
seq., because its actions were targeted at the AKC, not the
Plaintiffs. The court held that the JRTNNC was not a com-
mercial competitor of the JRTCA, and therefore lacked stand-
ing to bring a Lanham “false advertising” claim. This timely
appeal of both the partial Rule 12(b)(6) dismissal and trial rul-
ing on the merits followed.11
The JRTCA also filed a bill of costs for approximately
$18,000 subsequent to the district court’s ruling. The JRT-
NNC moved to have the court review those costs. The district
court denied the JRTCA’s costs in their entirety, and the
JRTCA timely cross-appealed that denial.
II
We first address the district court’s dismissal of the Appel-
lants’ Sherman Act claims.12
11
The district court also ruled against the Appellants on their related
state law unfair competition claims. Those claims were not appealed.
12
We review the dismissal of a Sherman Act § 1 claim pursuant to Rule
12(b)(6) de novo. Les Shockley Racing, Inc. v. Nat’l Hot Rod Ass’n., 884
JACK RUSSELL TERRIER NETWORK v. AKC 5291
A
[1] Section 1 of the Sherman Act prohibits “[e]very con-
tract, combination in the form of trust or otherwise, or con-
spiracy, in restraint of trade or commerce.” 15 U.S.C. § 1.
Section 1 is intended to prohibit actions that unreasonably
restrain competition. See Bus. Elecs. Corp. v. Sharp Elecs.
Corp., 485 U.S. 717, 723 (1988). The challenged “action” in
this case is the COR policy of the JRTCA and its enforce-
ment. At the crux of Appellants’ claim is the argument that,
by boycotting all AKC-registered or dual AKC/JRTCA-
registered dog owners and breeders from JRTCA membership
and participation in JRTCA-sanctioned events, the JRTCA
and participating JRTCA-regional affiliates unreasonably
restrained Jack Russell Terrier commerce that would other-
wise stem from those JRTCA-sanctioned events, the “market-
place” of Jack Russell Terrier commerce. Because JRTCA
registration is the equivalent of the “industry standard,” the
Appellants allege that the JRTCA’s COR manipulates the
market unreasonably by eliminating superior dogs not based
on merit but simply because of their dual registration.
[2] Under a “rule of reason” analysis of the § 1 claim,13 the
F.2d 504, 507 (9th Cir. 1989). We affirm the district court’s dismissal
“only if it is clear that no relief could be granted under any set of facts that
could be proved consistent with the allegations.” Hishon v. King & Spal-
ding, 467 U.S. 69, 73 (1984). Thus, we do not evaluate whether the Appel-
lants have established any facts in comparison to those alleged by the
JRTCA, but rather examine whether, if all the facts the Appellants have
alleged were true, they could make out their claims.
13
Activity which is alleged to have been in violation of § 1 may be sub-
ject to a per se standard, or alternatively, § 1 liability might be imposed
for concerted action which violates the “rule of reason” standard. See Pal-
adin Assocs., Inc. v. Montana Power Co., 328 F.3d 1145, 1154 (9th Cir.
2003). “The rule of reason weighs legitimate justifications for a restraint
against any anticompetitive effects.” Id. at 1156. The parties do not dis-
pute the district court’s determination that a rule of reason analysis is the
proper framework within which to address Appellants’ Sherman Act
5292 JACK RUSSELL TERRIER NETWORK v. AKC
Appellants must allege facts that could establish three ele-
ments: (1) the existence of a contract, combination, or con-
spiracy among two or more separate entities that (2)
unreasonably restrains trade and (3) affects interstate or for-
eign commerce. Am. Ad Mgmt., Inc. v. GTE Corp., 92 F.3d
781, 784, 788 (9th Cir. 1996). Our focus is the first element,
which contains a “basic distinction between concerted and
independent action,” Monsanto Co. v. Spray-Rite Serv. Corp.,
465 U.S. 752, 761 (1984), such that a combination or conspir-
acy requires the concerted action of more than a single entity.
Filco v. Amana Refrigeration, Inc., 709 F.2d 1257, 1261 (9th
Cir. 1983).
[3] In Copperweld, the Supreme Court held that a corpora-
tion and its wholly owned subsidiaries were legally incapable
of “conspiring” for the purposes of § 1. 467 U.S. at 771
(explaining that a parent corporation and its subsidiary “have
a complete unity of interest . . . . [T]here is no sudden joining
of economic resources that had previously served different
interests . . . .”). The Court reasoned that the coordinated
activity of parties lacking independent sources of economic
power and separate interests does not warrant judicial scru-
tiny. Id. at 770-71. For example, the “officers or employees
of the same firm do not provide the plurality of actors impera-
tive for a § 1 conspiracy” because they are “not separate eco-
nomic actors pursuing separate economic interests, so
agreements among them do not suddenly bring together eco-
nomic power that was previously pursuing divergent goals.”
Id. at 769. Rather, an action requires scrutiny under § 1 of the
Act if it “deprives the marketplace of the independent centers
of decision making that competition assumes and demands.”
Id.
claims. Id. at 1155-56. We agree that the district court properly considered
that the rule of reason is to be applied “where the economic impact of the
challenged practice is not obvious.” Harkins Amusement Enters., Inc. v.
Gen. Cinema Corp., 850 F.2d 477, 486 (9th Cir. 1988) (quoting Dimid-
owich v. Bell Howell, 803 F.2d 1473, 1480 (9th Cir. 1986).
JACK RUSSELL TERRIER NETWORK v. AKC 5293
Lower courts have since applied Copperweld’s reasoning
(sometimes referred to as the “single-entity” rule) to a broader
variety of economic relationships. See, e.g., Freeman v. San
Diego Ass’n of Realtors, 322 F.3d 1133, 1147-48 (9th Cir.
2003) (describing cases). We have held that the single entity
rule applies to principal-agent relationships, Calculators
Hawaii, Inc. v. Brandt, Inc., 724 F.2d 1332, 1336 (9th Cir.
1983), as well as to an agreement between a franchiser and
franchisee, Williams v. I.B. Fischer Nevada, 999 F.2d 445,
447-48 (9th Cir. 1993) (per curiam). See also Levi Case Co.,
Inc. v. ATS Prods. Inc., 788 F. Supp. 428, 431-32 (N.D. Cal.
1992) (holding that a patent holder was legally incapable of
conspiring with the patent licensee). Two of our sister circuits
have also held that separate entities with a common economic
interest and without divergent interests are incapable of con-
spiring for § 1 purposes in other contexts. See, e.g., Bell v.
Fur Breeders Agric. Coop., 348 F.3d 1224, 1232-35 (10th
Cir. 2003) (holding that a mink-ranching cooperative’s board
members were incapable of conspiring with the member
ranches); City of Mt. Pleasant v. Associated Elec. Coop., Inc.,
838 F.2d 268, 275-78 (8th Cir. 1988) (holding that the mem-
bers of an electric-utility cooperative with common economic
interests were incapable of conspiring). This sets the stage for
our evaluation whether the JRTCA and its regional affiliates
could conspire within the meaning of the Sherman Act as
alleged in the complaint.
B
[4] Whether a national breed club and registry and several
of its regional affiliates are capable of conspiring as separate
entities under § 1 of the Sherman Act is a question of first
impression. Although the single-entity inquiry is unique to the
facts of each case, Williams, 999 F.2d at 447, in our most
recent discussion we distilled general principles to guide us:
The crucial question is whether the entities alleged to have
conspired maintain an “economic unity,” and whether the
entities were either actual or potential competitors. Freeman,
5294 JACK RUSSELL TERRIER NETWORK v. AKC
322 F.3d at 1148-49 (summarizing cases and concluding that
“where firms are not an economic unit and are at least poten-
tial competitors, they are usually not a single entity for anti-
trust purposes.”). Our inquiry is a functional one.
Copperweld, 467 U.S. at 773 n.21 (stating the “principle that
substance, not form, should determine whether a separately
incorporated entity is capable of conspiring under § 1”);
United States v. Sealy, Inc., 388 U.S. 350, 353 (1967).14
[5] Assuming all the Appellants’ alleged facts to be true,
they have not alleged sufficient facts to support a claim that
the JRTCA and its affiliates are separate entities pursuing dif-
ferent economic goals, capable of conspiring for Sherman Act
purposes. First, regarding the parties’ unity of economic inter-
est, the Appellants did not allege in what manner the JRTCA
and the JRTCA regional affiliates named as co-defendants
had divergent economic interests, or what goals the affiliates
pursued other than those of the JRTCA. Although we assume
the truth of the facts alleged in the complaint, we cannot
assume any facts necessary to the Appellants’ claim that they
have not alleged. Associated Gen. Contractors, Inc. v. Cali-
fornia State Council of Carpenters, 459 U.S. 519, 526 (1983).
In fact, as the district court concluded, the objectives of the
JRTCA and its regional affiliates are “common, not dispa-
rate.” See Copperweld, 467 U.S. at 771. Both the national
club and its affiliates have a common goal—the best interests
of the Jack Russell Terrier—and both the JRTCA and its
regional affiliates hope to protect their identical economic
interest—the current and future value of the Jack Russell Ter-
rier breed, as determined by the JRTCA-breed standards. See
14
As a preliminary matter, Appellants argue that the “single entity”
determination is an affirmative defense that must be plead and proven by
the JRTCA and is therefore improperly resolved on a motion to dismiss.
To the contrary, as covered above, the existence of more than one entity
sufficient to conspire is part of the first element required to allege a § 1
violation. See, e.g., Amer. Ad. Mgmt. Inc., 92 F.3d at 784.
JACK RUSSELL TERRIER NETWORK v. AKC 5295
id. at 770-71 (“Because [such] coordination . . . does not rep-
resent a sudden joining of two independent sources of eco-
nomic power previously pursuing separate interests, it is not
activity that warrants § 1 scrutiny.”); City of Mt. Pleasant,
838 F.2d at 274-75 (“[T]wo or more legally distinct entities
cannot conspire among themselves if they pursue[ ] the com-
mon interests of the whole rather than interests separate from
those of the [group] itself.”) (quoting Copperweld, 467 U.S.
at 770-71) (alterations in original). Moreover, the JRTCA’s
affiliates are best understood as extensions of the national
club rather than independent economic actors. The JRTCA’s
affiliation agreement mandates that affiliates, among other
requirements, must: be solely affiliated with the JRTCA;
adopt the JRTCA constitution and uphold its goals, purposes,
and policies; recognize only the JRTCA-terrier registry; and
uphold the JRTCA’s policy on conflicting organizations. By
the terms of the affiliation agreement, then, the affiliates and
the JRTCA share a unity of all relevant interests and policies,
which are controlled entirely by the JRTCA.
[6] Second and relatedly, the Appellants did not allege that
the JRTCA and its regional affiliates were actual or even
potential competitors, or conspired through the COR to gain
some competitive advantage. See Freeman, 322 F.3d at 1148-
50. Nor can the Appellants do so: The JRTCA is a national
dog club and registry, and the regional dog clubs named as
co-defendants are groups of JRTCA members who have
formed a regional dog club to represent the JRTCA in their
region and host JRTCA events. The JRTCA affiliate agree-
ment also includes provisions requiring that affiliates cannot
establish competing dog registries, breed standards, or terrier
events outside of those sanctioned and judged by the JRTCA.
As discussed above, the regional affiliates’ sole purposes are
to be affiliated with the national club and to promote the
JRTCA breed standard and philosophy. In no way do the
affiliates compete with the national club.15
15
Because this case concerns a national dog club, it does not fit neatly
into the mold of most antitrust cases analyzing for-profit corporations,
5296 JACK RUSSELL TERRIER NETWORK v. AKC
Appellants erroneously rely on Los Angeles Memorial Coli-
seum Commission v. National Football League, in which we
held that the N.F.L. and its teams were not a single entity for
Sherman Act purposes. 726 F.2d 1381, 1390 (9th Cir. 1984).
Los Angeles Memorial Coliseum is distinguishable because,
unlike here, the N.F.L. teams at issue in that case were wholly
independent business entities that had separate identities from
the larger organization and competed against one another for
profit. Id. at 1389-90.16
[7] In sum, nothing in the Appellants’ allegations supports
the conclusion that the regional JRTCA affiliates acted as
independent, self-sufficient agents that could have conspired
with the national club. The Appellants have articulated a
claim that only involves activity occurring within a single
enterprise. As we have said, such a claim falls within the
sphere of Copperweld preclusion and accordingly is not a via-
ble antitrust claim. We hold that the Appellants did not allege
sufficient facts to support a claim that the JRTCA and its
their officers, and/or their subsidiaries. The JRTCA does not own its
regional affiliates, nor is there an agreement between them to divide prof-
its and losses. However this lack of a traditional corporate structure is less
persuasive in the non-profit context, and the difference alone is insuffi-
cient to require reversal. Copperweld, 467 U.S. at 773 n. 21 (instructing
that the question of whether entities have the capability to conspire is
determined by the substance of a relationship, not its form); Thomsen v.
W. Elec. Co., Inc., 680 F.2d 1263, 1266 (9th Cir. 1982) (“[T]he mere fact
of separate incorporation, without more, is not sufficient to prove the
capability for conspiracy.”) (internal quotation marks omitted). As
explained above, in substance the JRTCA and its affiliates share a unity
of policy, identical economic interests in the Jack Russell Terrier breed as
defined by JRTCA standards, and were never actual or potential competi-
tors that decided to conspire. We think this relationship sufficiently akin
to the Court’s reasoning in Copperweld to apply the single entity rule
under these facts.
16
Los Angeles Memorial Coliseum also predated the Supreme Court’s
clarifying discussion in Copperweld.
JACK RUSSELL TERRIER NETWORK v. AKC 5297
affiliates pursued divergent economic goals, and we affirm
the district court’s Rule 12(b)(6) dismissal.17
III
We next address the Appellants’ Lanham Act claim.18
[8] Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a),
prohibits the use of false designations of origin, false descrip-
tions, and false representations in the advertizing and sale of
goods and services. Smith v. Montoro, 648 F.2d 602, 603 (9th
Cir. 1981). Appellants argue that the publication of the former
JRTCA breeders who had registered with the AKC was a
false advertisement that misrepresented the quality of their
Jack Russell Terriers by falsely implying that JRTCA-only
terriers are superior to all other Jack Russell Terriers and
falsely implying that those dogs excluded do not meet JRTCA
standards. This ostracizing of breeders who are “blacklisted”
may cause economic harm, because, as discussed above,
breeders depend on their dogs’ reputation of quality and on
the trial awards won at JRTCA events to sell and breed their
dogs.
Appellants admit that the JRTNNC is not a direct competi-
tor with the JRTCA, but point out that standing of non-
competitors has been recognized in other Lanham Act cases,
17
Our precedent requires us to recognize that our holding is limited to
the particular circumstances we address. Williams, 999 F.2d at 447
(“Whether corporate entities are sufficiently independent requires an
examination of the particular facts of each case.”). We express no opinion
on whether other national clubs and their regional or local affiliates could
be considered a “single entity” for Sherman Act purposes in other factual
and competitive settings.
18
After a bench trial, we review the district court’s findings of fact for
clear error, and we review the court’s conclusions of law de novo. Lentini
v. California Ctr. for the Arts, Escondido, 370 F.3d 837, 843 (9th Cir.
2004). We review questions of standing and statutory construction de
novo. Barrus v. Sylvania, 55 F.3d 468, 469 (9th Cir. 1995).
5298 JACK RUSSELL TERRIER NETWORK v. AKC
and Appellants claim the district court erred in requiring that
the Appellants be in direct competition with the JRTCA. See
Waits v. Frito-Lay, Inc., 978 F.2d 1093, 1107-10 (9th Cir.
1992); Smith, 648 F.2d at 607-08. Alternatively, Appellants
argue that breeders Sprague and Fisher, as members of the
AKC and targets of the JRTCA “blacklist,” have standing to
bring their claim.
[9] Appellants’ reliance on Waits and Smith is misplaced.
We have said that different causes of action alleged pursuant
to the different subsections of 15 U.S.C. § 1125(a) have dif-
ferent standing requirements. Barrus, 55 F.3d at 469-70.
Smith and Waits involved the “false association” prong of
§ 43 of the Lanham Act, 15 U.S.C. § 1125(a)(1)(A), under
which a plaintiff need only allege commercial injury based
upon the deceptive use of a trademark or its equivalent to sat-
isfy standing requirements. Id. That the parties be competitors
“in the traditional sense” is not required. Waits, 978 F.2d at
1110. On the other hand, for standing pursuant to the “false
advertising” prong of § 43(a) of the Lanham Act, 15 U.S.C.
§ 1125(a)(1)(B), a plaintiff must show: (1) a commercial
injury based upon a misrepresentation about a product; and
(2) that the injury is “competitive,” or harmful to the plain-
tiff’s ability to compete with the defendant. Barrus, 55 F.3d
at 470 (citing Halicki v. United Artists Communications, Inc.,
812 F.2d 1213, 1214 (9th Cir. 1987)).
[10] In this case, the Appellants allege false advertising in
violation of § 1125(a)(1)(B). The JRTNNC is not a competi-
tor of the JRTCA that has suffered a competitive injury. Nor
does the fact that Sprague and Fisher were the target of the
True Grit advertisement make them competitors with the
JRTCA that have suffered competitive injuries.19 We hold the
19
Appellants contend that the AKC would have had standing as a com-
petitor of the JRTCA, and lament that, while the Appellants tried to join
the AKC in this litigation, the AKC chose not to remain. However, the dis-
missal of the AKC as a party was not appealed and is not before us.
JACK RUSSELL TERRIER NETWORK v. AKC 5299
district court did not err in concluding the Appellants lacked
standing under the Lanham Act.20
IV
Lastly, we address the JRTCA’s cross-appeal of the district
court’s denial of costs.21
[11] Federal Rule of Civil Procedure 54(d)(1)22 creates a
presumption in favor of awarding a prevailing party its costs
other than attorneys’ fees, but vests in the district court the
discretion to refuse to award such costs if the district court
gives specific reasons explaining why the case is not ordinary
and why it would be “inappropriate or inequitable to award
costs.” The Ass’n of Mexican-Am. Educators v. California,
231 F.3d 572, 591, 593 (9th Cir. 2000) (en banc).
Appellants also argue that, because the AKC would likely have standing,
Appellants should have standing vis à vis terrier owners/breeders Sprague
and Fisher, who now have dogs registered with the AKC. That organiza-
tion’s possible standing as a competitor of the JRTCA does not make
Sprague and Fisher competitors with the JRTCA. Barrus, 55 F.3d at 470
(“[I]n order to satisfy standing the plaintiff must allege commercial injury
based upon a misrepresentation about a product, and also that the injury
was ‘competitive,’ i.e., harmful to the plaintiff’s ability to compete with
the defendant.”).
20
The parties also debate whether the COR is protected by the First
Amendment. We need not and do not reach this question because the ini-
tial issue of standing (or lack thereof) to assert a “false advertising” Lan-
ham Act claim resolves the matter.
21
We review a district court’s denial of costs to a prevailing party for
an abuse of discretion. Berkla v. Corel Corp., 302 F.3d 909, 917 (9th Cir.
2002). A district court abuses its discretion only if “it does not apply the
correct law or if it rests its decision on a clearly erroneous finding of mate-
rial fact.” Casey v. Albertson’s Inc., 362 F.3d 1254, 1257 (9th Cir. 2004).
22
Rule 54(d)(1) provides in pertinent part: “(1) Costs Other than Attor-
neys’ Fees. Except when express provision therefor is made either in a
statute of the United States or in these rules, costs other than attorneys’
fees shall be allowed as of course to the prevailing party unless the court
otherwise directs. . . .”
5300 JACK RUSSELL TERRIER NETWORK v. AKC
[12] The district court gave specific reasons why an award
of costs was inappropriate, noting both the Appellants’ lack
of financial resources and the substantial profit of the JRTCA.
Those reasons have previously been approved by this court as
proper grounds for a denial of costs. See Ass’n of Mexican-
Am. Educators, 231 F.3d at 592-93. The denial of costs was
not an abuse of discretion.
AFFIRMED.