JENNIFER WALKER ELROD, Circuit Judge:
This is an antitrust case involving a dispute between competing programs to sell vouchers for rounds of golf at golf courses along Mississippi's Gulf Coast. The district court granted defendants-appellees motion to dismiss, deciding, in pertinent part, that the plaintiff-appellant had failed to allege the interstate commerce element of a valid claim under the Sherman Act. We now REVERSE and REMAND for further proceedings consistent with this opinion.
The plaintiff-appellant, the Gulf Coast Hotel-Motel Association and its successor Mississippi Hotel & Lodging Association (the "Hotel Association") is a trade association made up of hotels, motels, other lodging members, and golf courses. As one of its services, the Hotel Association provides a golf voucher program for golf course members of the Hotel Association. Through the program, individual golfers buy vouchers for rounds of golf from hotels or from companies that package golf tours. After the golfer turns in the voucher to the golf course and plays his or her round of golf, the golf course presents the validated voucher to the Hotel Association for payment. The Hotel Association collects the payment from the hotel or golf tour packager, and sends the money to the golf course. The Hotel Association keeps $1 per round of golf as an administrative fee. Thus, the Hotel Association's role is essentially to act as an administrative middle-man for the voucher program.
The complaint alleges in three separate paragraphs that golfers who buy the vouchers come to Mississippi from out-of-state:
The complaint also alleges, without further elaboration, that the voucher program affects interstate commerce.
The defendants-appellees, the Mississippi Gulf Coast Golf Course Association and a number of Mississippi Gulf golf courses (together, the "Golf Association"), are part of a competing voucher program. The Golf Association includes fifteen golf courses on Mississippi's Gulf Coast. Some of those courses were, as of 2002, also members of the Hotel Association's voucher program. In that year, the complaint alleges that the defendant golf courses threatened to withdraw from the Hotel Association's program unless the Hotel Association excluded non-Golf Association golf courses. The Hotel Association refused. In response, the golf course defendants allegedly agreed to an exclusive agreement to work only with the Golf Association voucher program. That exclusive agreement was enjoined as void and unenforceable by the Harris County Chancery Court in 2003. The complaint alleges that in response, the Golf Association and the defendant golf courses began acting in concert to prevent hotels from using the Hotel Association voucher program by providing the Hotel Association with higher quotes than provided to the Golf Association voucher program. Thus, according to the complaint, a golfer looking to buy a voucher for a round of golf on a course that is a member of both the Golf Association and the Hotel Association can buy that voucher for substantially less money from the Golf Association than the Hotel Association.
The Hotel Association filed suit alleging that the Golf Association's decision to discriminate against the Hotel Association voucher program violated sections 1 and 2 of the Sherman Act, section 2 of the Clayton Act, and constituted various state law torts including tortious interference with business relations and contract. The Hotel Association asserted that the District Court had subject matter jurisdiction over its federal antitrust claims pursuant to 15 U.S.C. § 15(a) and 28 U.S.C. § 1331, and supplemental jurisdiction over its state law claims pursuant to 28 U.S.C. § 1367.
The district court advised the Hotel Association that the complaint failed to articulate sufficient factual allegations establishing any affect on interstate commerce. In response, the Hotel Association filed a First Amended Complaint and a Second Amended Complaint (the complaint at issue here). The Golf Association filed a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6).
The district court granted the motion, determining that it lacked subject matter jurisdiction over the Hotel Association's Sherman Act claims. The district court stated that federal subject matter jurisdiction under the Sherman Act and the Clayton Act requires "a showing of some nexus between Defendants' conduct and interstate commerce." Gulf Coast Hotel-Motel Ass'n v. Miss. Gulf Coast Golf Course Ass'n, No. 1:08-CV-1430, 2010 WL 3168032, at *3 (S.D.Miss. Aug. 10, 2010). The district court first rejected the argument that the voucher sales were directly in interstate commerce.
The Hotel Association asserts that the district court erred in finding that it lacked subject matter jurisdiction over the Hotel Association's Sherman Act claims. The Hotel Association's position is that its complaint pleaded a sufficient connection to interstate commerce to survive a motion to dismiss. The Golf Association contends in response that the complaint fails because the complaint's "conclusory allegations" did not "sufficiently allege how the Hotel Association's antitrust claims involved interstate commerce."
This court reviews a decision to dismiss for lack of subject matter jurisdiction de novo, applying the same standards as the district court. See Del-Ray Battery Co. v. Douglas Battery Co., 635 F.3d 725 (5th Cir.2011). Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a "short and plain statement of the claim showing that the pleader is entitled to relief." See Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). Rule 8 does not require "detailed factual allegations but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation." Id. Thus, a complaint will survive a motion to dismiss if it contains "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (internal quotation omitted). A plaintiff meets this standard when it "pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S.Ct. at 1949.
A complaint alleging a Sherman Act claim must allege some nexus between the defendants' conduct and interstate commerce. See 15 U.S.C. §§ 1, 3, 13; see also Summit Health, Ltd. v. Pinhas, 500 U.S. 322, 324-25, 111 S.Ct. 1842, 114 L.Ed.2d 366 (1991). In interpreting that "expansive" standard, however, we must keep in mind "that when Congress passed the Sherman Act, it `left no area of its constitutional power [over commerce] unoccupied.'" Summit Health, Ltd., 500 U.S. at 329 n. 10, 111 S.Ct. 1842 quoting United States v. Frankfort Distilleries, Inc., 324 U.S. 293, 298, 65 S.Ct. 661, 89 L.Ed. 951 (1945) (alteration in original). Thus, the reach of the act is coextensive with the reach of congressional power under the Commerce Clause of the Constitution. Id. at 500 U.S. at 328-29, 111 S.Ct. 1842. The Supreme Court has broadly interpreted Congress's authority under the Commerce Clause with respect to economic transactions. See, e.g., Gonzales v. Raich, 545 U.S. 1, 32, 125 S.Ct. 2195, 162
Indeed, subject matter jurisdiction based on the Commerce Clause "has, of course, long been interpreted to extend beyond activities actually in interstate commerce to reach other activities that, while wholly local in nature, nevertheless substantially affect interstate commerce." Cowan, 814 F.2d at 226. Jurisdiction is not "defeated in a case relying on anticompetitive effects by plaintiff's failure to quantify the adverse impact of defendant's conduct." McLain v. Real Estate Bd. of New Orleans, Inc., 444 U.S. 232, 243, 100 S.Ct. 502, 62 L.Ed.2d 441 (1980). Rather, the issue is whether, "as a matter of practical economics," the complaint is sufficient to allege an affect on interstate commerce. Hosp. Bldg. Co. v. Trs. of Rex Hos., 425 U.S. 738, 745, 96 S.Ct. 1848, 48 L.Ed.2d 338 (1976). The Supreme Court has explained that courts should exercise caution in dismissing antitrust claims. Id. at 746, 96 S.Ct. 1848; see also Twombly, 550 U.S. at 558, 127 S.Ct. 1955 (contrasting due caution in dismissing an antitrust complaint with failing to insist upon some specificity in pleading).
The Supreme Court's opinion in Summit Health is instructive. There, an ophthalmologist claimed that a conspiracy to drive him out of business by instituting fraudulent "peer review" proceedings against him violated the Sherman Act. Id. at 324, 111 S.Ct. 1842. Like the defendants here, the defendants claimed that the doctor had failed to sufficiently plead the Sherman Act's jurisdictional element because the alleged conspiracy was purely a local one affecting no more than one doctor and one hospital. Id. at 329-30, 111 S.Ct. 1842. The Supreme Court disagreed, holding that if the conspiracy was successful, then "there will be a reduction in the provision of ophthalmological services in the Los Angeles market." Id. at 331, 111 S.Ct. 1842. Thus, the Supreme Court concluded, "[w]e have no doubt concerning the power of Congress to regulate a peer review process controlling access to the market for ophthalmological surgery in Los Angeles." Id. at 333, 111 S.Ct. 1842. As
Moreover, the Supreme Court has repeatedly addressed the effects on interstate commerce of hotels, motels, and other elements of the hospitality industry. In Camps Newfound/Owatonna, Inc. v. Town of Harrison, Me., 520 U.S. 564, 117 S.Ct. 1590, 137 L.Ed.2d 852 (1997), for example, the Supreme Court considered a dormant commerce clause challenge to a tax that had a disparate impact on a camp with many out-of-state campers. Id. at 572, 117 S.Ct. 1590. The Supreme Court firmly rejected the argument that the dormant commerce clause was inapplicable, concluding that although summer camps and hotels are services that are consumed locally, they may have substantial effects on interstate commerce:
As the Supreme Court concluded, even though the camp in that case did not "make a profit, it is unquestionably engaged in commerce, not only as a purchaser, but also as a provider of goods and services." 520 U.S. at 573, 117 S.Ct. 1590 (internal citations omitted).
To be sure, the Hotel Association's complaint here—even after prompting by the district court—is sparse. What is alleged, however, is sufficient to survive a motion to dismiss. The Supreme Court has explained that a mere "formulaic recitation of the elements" of a claim is insufficient to create a well-pleaded complaint. Iqbal, 129 S.Ct. at 1951. Thus, it was not enough in Twombly to allege a "conspiracy", 550 U.S. at 557, 127 S.Ct. 1955, or in Iqbal to parrot the words needed to create a claim of constitutional discrimination, 129 S.Ct. at 1951. Once shorn of such legal conclusions, the allegations in those cases could not support an inference of liability—in Twombly, for example, the allegations of misconduct considered by the Supreme Court described a conspiracy that was factually implausible, 550 U.S. at 569, 127 S.Ct. 1955, and in Iqbal, under the same analysis, the allegations of the complaint were consistent with an "obvious alternative explanation" for the arrests at issue. 129 S.Ct. at 1951. While the allegations in this complaint that the Golf Association's anticompetitive acts "substantially affected interstate commerce" are not sufficient on their own, the complaint here read as a whole goes beyond the allegations rejected in Twombly and Iqbal.
The other cases on which the defendants rely are inapposite. In Furlong v. Long Island College Hospital, 710 F.2d 922 (2d Cir.1983), a doctor complained that her employer had restrained trade by improperly limiting her right to practice medicine by fixing prices for medical care. The Second Circuit held that it was not enough to show that "some aspects of a defendant's business have a relationship to interstate commerce." Id. at 926. Rather, "the inquiry must be whether the defendant's activity that has been allegedly infected by unlawful conduct can be shown `as a matter of practical economics' to have a not insubstantial effect on the interstate commerce involved." Id. Concluding that the pleaded facts were insufficient because the complaint included "no allegation of price-fixing" in any of its "operative language," and because the plaintiff had failed to show a substantial affect on interstate commerce of her own lost revenue, the court dismissed the case with leave to replead in order to set forth the jurisdictional facts at issue with more clarity. Id. at 927-28. Even assuming that Furlong's reasoning has survived Summit Health— which Justice Scalia's dissent in Summit Health puts in question, 500 U.S. at 335, 111 S.Ct. 1842—the allegations of this complaint implicate interstate commerce far more directly than the attenuated allegations of the Furlong complaint. After all, the issue here turns on the competition for out-of-state tourism dollars between two voucher consortiums, not whether some employment dispute might lead to a marginal decrease in a defendant hospital's out-of-state purchasing. The Golf Association's reliance on a Sixth Circuit case decided at the summary judgment stage, Stone v. William Beaumont Hospital, 782 F.2d 609 (6th Cir.1986) is similarly misplaced. There, the plaintiff's entire allegation was that he was excluded from working at a local medical facility "two or three times a month." Id. at 614. Upon review of "voluminous" pleadings, the court held that such deprivations only had a "de minimis" impact on interstate commerce. Id.
Because we find that the district court erred in dismissing the Hotel Association's case for lack of subject matter jurisdiction, we REVERSE and REMAND for further proceedings consistent with this opinion.