Case Title: Conley Publishing Group Ltd. v. Journal Communications, Inc.

Citation: 2003 WI 119

Docket Number: 2001AP003128

State: wisconsin

Court: Wisconsin Supreme Court

Date: 2003-07-17T00:00:00Z

Document:
2003 WI 119 
 
 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
01-3128 
 
 
COMPLETE TITLE: 
 
 
Conley Publishing Group Ltd., Freeman Newspapers 
LLC and Lakeshore Newspapers, Inc.,  
 
Plaintiffs-Appellants, 
 
v. 
Journal Communications, Inc., and Journal 
Sentinel, Inc.,  
 
Defendants-Respondents. 
 
 
 
 
ON CERTIFICATION FROM THE COURT OF APPEALS 
 
 
OPINION FILED: 
July 17, 2003   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
February 11, 2003   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Waukesha   
 
JUDGE: 
Donald J. Hassin   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
        
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For the plaintiffs-appellants there were briefs by W. 
Stuart Parsons, Brian D. Winters, Steven J. Berryman, Robert J. 
Pluta, and Quarles & Brady LLP, Milwaukee, and oral argument by 
Steven J. Berryman. 
 
For the defendants-respondents there was a brief by John R. 
Dawson, James T. McKeown, G. Michael Halfenger, Paul Bargren, 
and Foley & Lardner, Milwaukee, and oral argument by John R. 
Dawson. 
 
An amicus curiae brief was filed by Robert H. Friebert, 
Matthew W. O'Neill, and Friebert, Finerty & St. John, S.C., 
Milwaukee, and Anne Berlemann Kearney, Joseph D. Kearney, and 
Appellate 
Consulting 
Group, 
Milwaukee, 
on 
behalf 
of 
the 
Wisconsin Utilities Association. 
 
 
 
2
An amicus curiae brief was filed by Daniel Blinka, 
Milwaukee, William C. Gleisner, III, Madison, and R. George 
Burnett and Liebmann, Conway, Olejniczak & Jerry, S.C., Green 
Bay, on behalf of the Wisconsin Academy of Trial Lawyers. 
 
 
2003 WI 119 
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  01-3128   
(L.C. No. 
00 CV 222) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Conley Publishing Group Ltd., Freeman  
Newspapers LLC and Lakeshore Newspapers,  
Inc.,  
 
          Plaintiffs-Appellants, 
 
     v. 
 
Journal Communications, Inc., and Journal  
Sentinel, Inc.,  
 
          Defendants-Respondents. 
 
FILED 
 
JUL 17, 2003 
 
Cornelia G. Clark 
Clerk of Supreme Court 
 
 
 
 
 
APPEAL from a Judgment of the Circuit Court for Waukesha 
County, Donald Hassin, Judge.  Affirmed.   
 
¶1 
DAVID T. PROSSER, J.   This case involves allegations 
of predatory pricing by one Wisconsin newspaper against another.  
The Circuit Court for Waukesha County, Donald J. Hassin, Judge, 
dismissed the antitrust claims of Conley Publishing Group Ltd., 
et al., (Conley) against Journal Communications, Inc., and 
Journal Sentinel, Inc., (collectively, the Journal) and granted 
the defendants summary judgment.  Conley appealed.  The case is 
No. 
01-3128 
2 
 
now before us on certification from the court of appeals, 
pursuant to Wis. Stat. (Rule) § 809.61 (2001-02).1   
¶2 
The court of appeals has certified three issues for 
our review.  First, should the United States Supreme Court 
decision in Brooke Group Ltd. v. Brown & Williamson Tobacco 
Corp., 509 U.S. 209 (1993), be adopted as the law in Wisconsin 
governing predatory pricing under Wis. Stat. § 133.03?  Second, 
does the federal rule governing the admissibility of expert 
opinion 
testimony 
set 
forth 
in 
Daubert 
v. 
Merrell 
Dow 
Pharmaceuticals, Inc., 509 U.S. 579 (1993)——an evidentiary rule 
we have not adopted in Wisconsin——affect the applicability of 
Brooke Group to Wisconsin law?  Third, does Wisconsin's 
predatory pricing law require a plaintiff to "disaggregate" its 
damages in order to survive summary judgment?   
¶3 
We hold that a claim of predatory pricing under 
Wis. Stat. § 133.03 must conform to the requirements established 
in Brooke Group for similar claims under Section 2 of the 
federal Sherman Antitrust Act.  A plaintiff alleging that a 
defendant engaged in predatory pricing must prove that (1) the 
prices and other direct revenues from the practice complained of 
are below an appropriate measure of the defendant's costs; and 
(2) the defendant has a dangerous probability of recouping its 
investment "losses" in these below-cost prices by later raising 
prices above competitive levels.  Applying these standards, we 
                                                 
1 All references to the Wisconsin Statutes are to the 2001-
02 version unless otherwise noted. 
No. 
01-3128 
3 
 
conclude that the plaintiffs have not presented sufficient 
evidence to permit a reasonable jury to conclude that the 
Journal either engaged in below-cost pricing or, assuming that 
it did, that there is a dangerous probability of the Journal 
recouping the losses that it may have incurred from its Sunday-
daily conversion program.  Accordingly, we affirm the circuit 
court's decision to grant summary judgment. 
¶4 
Because the plaintiffs' action fails 
to survive 
summary judgment on these grounds, we need not address whether 
the circuit court properly granted summary judgment on the issue 
of causation, either on the basis of insufficient evidence or on 
the basis of plaintiffs' failure to "disaggregate" their 
damages.  Finally, because the parties to this action have not 
contested the admissibility of any expert's opinion, we decline 
to reevaluate, at this time, the standard for admitting expert 
testimony under Wis. Stat. § 907.02. 
I. BACKGROUND FACTS AND PROCEDURAL HISTORY 
¶5 
The Waukesha Freeman is a paid, daily newspaper that 
was founded in 1859.  It is distributed to residents of Waukesha 
County as an afternoon paper Monday through Friday.  There is 
also a Saturday morning edition but no Sunday newspaper.  While 
the 
Freeman 
provides 
coverage 
of 
state, 
national, 
and 
international news, its primary focus is on the Waukesha 
community. 
¶6 
The Freeman's only competitor in the Waukesha County 
paid daily newspaper market is the Milwaukee Journal Sentinel 
(the Journal Sentinel).  As of 2000, when this suit was filed, 
No. 
01-3128 
4 
 
the Journal Sentinel controlled roughly 78% of the daily 
newspaper readership market in Waukesha County, while the 
Freeman controlled roughly 22%.  In 1996 the Freeman had 28% of 
the market. 
¶7 
The 
Journal 
Sentinel 
is 
distributed 
throughout 
southeastern Wisconsin and, to a lesser extent, the rest of 
Wisconsin, and its daily edition is the only local paid daily 
newspaper in some southeastern Wisconsin counties, including 
Milwaukee County.  Unlike the Freeman, the Journal Sentinel has 
a Sunday edition, which is the only local paid Sunday newspaper 
in Milwaukee, Ozaukee, and Waukesha Counties. 
¶8 
In August 2000 Conley Publishing Group, Ltd., Freeman 
Newspapers, LLC, and Lakeshore Newspapers, Inc.,2 filed this 
action against Journal Sentinel, Inc., the publisher of the 
Journal Sentinel, and Journal Communications, Inc.3  In its 
second amended complaint, Conley alleged that the Journal was 
monopolizing 
or 
attempting 
to 
monopolize 
the 
market 
for 
readership of paid daily newspapers in Waukesha County in 
violation of Wisconsin's Antitrust Act, Chapter 133 of the 
Wisconsin Statutes.  Relevant to this appeal are Conley's claims 
                                                 
2 Conley Publishing has published the Freeman since it 
purchased the newspaper in May 1997.  Throughout this opinion we 
will refer to the plaintiffs collectively as "Conley," unless 
otherwise indicated. 
3 Journal Sentinel, Inc., is a wholly owned subsidiary of 
Journal Communications, Inc.  The Milwaukee Journal Sentinel was 
formed as the result of the April 1995 merger of Wisconsin's two 
largest newspapers, the Milwaukee Journal (an afternoon daily) 
and the Milwaukee Sentinel (a morning daily). 
No. 
01-3128 
5 
 
that the Journal engaged in predatory pricing of its newspapers 
in order to drive the Freeman out of business. 
¶9 
In particular, Conley alleged that, beginning in the 
middle of 1996, the Journal began targeting subscribers to the 
Freeman by offering a "Sunday-daily conversion program."  This 
conversion program, which is the basis of Conley's predatory 
pricing claim, operated as follows.  The Journal hired a 
marketing company to contact residents of Waukesha County who 
subscribed to the Sunday edition of the Journal Sentinel but not 
to the daily Journal Sentinel.  These residents included 
subscribers who received the Freeman during the week as well as 
subscribers who received no local daily newspaper.  The Journal 
then offered these Sunday subscribers the opportunity to receive 
the daily Journal Sentinel at no additional cost for the 
remainder of their Sunday Journal Sentinel contract, provided 
that the subscribers shortened the length of their Sunday 
subscription.  For example, the Journal would offer a 52-week 
Sunday-only subscriber up to 49 weeks of the daily Journal 
Sentinel at no additional cost, if the subscriber agreed to 
shorten the existing Sunday subscription term to 49 weeks.4 
¶10 During the period that the conversion program was 
offered, the Freeman's circulation declined.  According to the 
Freeman's publisher, during the 10 years prior to 1996, the 
                                                 
4 Similar 
plans 
were 
offered 
to 
other 
Sunday-only 
subscribers based on their current contract length.  Thirteen-
week and 26-week subscribers could covert to Monday through 
Sunday service by reducing their contact terms to 9 and 23 
weeks, respectively. 
No. 
01-3128 
6 
 
Freeman's circulation remained relatively constant at around 
22,000 subscribers.  By the end of 1997, however, the Freeman's 
circulation had dropped to 17,466, down 3,958 from the beginning 
of 1996.  In 1998, the only year that the Journal did not offer 
a Sunday-conversion program in Waukesha County, the Freeman 
gained a marginal number (91) of subscribers.  As of June 11, 
2001, the Freeman had a circulation of approximately 15,900 
subscribers.  The Freeman's decline in circulation led to a loss 
in subscription and advertising revenue.  Conley quantifies 
these losses at somewhere between $1,108,800 and $3,853,067 from 
the time it acquired the Freeman in 1997 until the dismissal of 
its action.5 
¶11 The Journal eventually filed a motion for summary 
judgment, which the circuit court granted on October 12, 2001.  
The court's ruling was based on its determination that Conley 
had failed to provide sufficient evidence to raise a genuine 
issue of material fact supporting (1) its predatory pricing 
claim; (2) a finding that the Journal's conduct caused the 
Freeman's loss or injury; and (3) a finding on the amount of 
damages attributable to the Journal's alleged anticompetitive 
behavior.  Conley appealed, arguing that it had offered 
sufficient evidence for the case to survive summary judgment.  
The court of appeals certified the appeal to this court.  
                                                 
5 One of Conley's damages experts estimated the Freeman's 
losses from the program to be $1,560,345. 
No. 
01-3128 
7 
 
¶12 Additional relevant facts will be presented as needed 
throughout this opinion. 
II. STANDARD OF REVIEW 
¶13 We review a grant of summary judgment applying the 
same methodology as the circuit court.  Robinson v. City of W. 
Allis, 2000 WI 126, ¶26, 239 Wis. 2d 595, 619 N.W.2d 692.  
Although our review is de novo, we benefit from the circuit 
court's analysis.  See Yahnke v. Carson, 2000 WI 74, ¶10, 236 
Wis. 2d 257, 613 N.W.2d 102.  Summary judgment is appropriate 
only 
when 
"the 
pleadings, 
depositions, 
answers 
to 
interrogatories, and admissions on file, together with the 
affidavits, if any, show that there is no genuine issue as to 
any material fact and that the moving party is entitled to a 
judgment as a matter of law."  Wis. Stat. § 802.08(2).  "The 
well-established purpose of summary judgment procedure is to 
determine the existence of genuine factual disputes in order to 
'avoid trials where there is nothing to try.'"  Yahnke, 236 
Wis. 2d 257, ¶10 (internal quotation marks omitted).  When a 
non-moving 
party 
contests 
the 
appropriateness 
of 
summary 
judgment, we draw all reasonable factual inferences in favor of 
that party.  See Strasser v. Transtech Mobile Fleet Serv., Inc., 
2000 WI 87, ¶32, 236 Wis. 2d 435, 613 N.W.2d 142. 
¶14 Interpretation of Chapter 133 and its application to 
claims of anticompetitive conduct are questions of law, which we 
answer independently of the courts below.  See World Wide 
Prosthetic Supply, Inc. v. Mikulsky, 2002 WI 26, ¶8, 251 
Wis. 2d 45, 640 N.W.2d 764. 
No. 
01-3128 
8 
 
III. PREDATORY PRICING LAW AND BROOKE GROUP 
¶15 Conley 
alleges 
that 
the 
Journal's 
Sunday-daily 
conversion program in Waukesha County is an anti-competitive 
predatory pricing scheme that violates Wis. Stat. § 133.03.  
This section, which is modeled after 15 U.S.C. § 2 (2000),6 the 
federal Sherman Antitrust Act of 1890, provides in subsection 2 
that:  
Every person who monopolizes, or attempts to 
monopolize, or combines or conspires with any other 
person or persons to monopolize any part of trade or 
commerce may be fined not more than $100,000 if a 
corporation, or, if any other person, may be fined not 
more than $50,000 or imprisoned for not more than 7 
years and 6 months or both. 
Wis. Stat. § 133.03(2). 
 
Although 
subsection 
(2) 
implies 
government enforcement, Chapter 133 also authorizes private 
actions for persons injured by violations of its prohibitions.  
See Wis. Stat. § 133.18.  Such private plaintiffs may seek 
relief that includes treble damages and reasonable attorney 
fees.  Id. 
¶16 Predatory pricing occurs "chiefly in cases in which a 
single firm, having a dominant share of the relevant market, 
cuts its prices in order to force competitors out of the market, 
or perhaps to deter potential entrants from coming in."  
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 
                                                 
6 Wisconsin's statute may be traced to Chapter 219, Laws of 
1893.  See Pulp Wood Co. v. Green Bay Paper & Fiber Co., 157 
Wis. 604, 625, 147 N.W. 1058 (1914). 
No. 
01-3128 
9 
 
U.S. 574, 584 n.8 (1986).7  The practice has been prohibited 
under antitrust laws for many years.  See Phillip Areeda & 
Donald F. Turner, Predatory Pricing and Related Practices Under 
Section 2 of the Sherman Act, 88 Harv. L. Rev. 697, 697 (1975); 
see also Cargill, Inc. v. Monfort of Colo., Inc., 479 U.S. 104, 
117-18 (1986).  While claims premised on this theory have been 
litigated with some frequency in the federal courts, there is 
presently no Wisconsin case law governing predatory pricing 
claims under § 133.03(2).  The dearth of state antitrust 
precedent is not surprising because the scope of Chapter 133 is 
limited to intrastate transactions.  See Reese v. Associated 
Hosp. Serv., 45 Wis. 2d 526, 532, 173 N.W.2d 661 (1970). 
¶17 Recognizing the relative infrequency of actions under 
Chapter 133, Wisconsin courts have followed federal court 
interpretations of Sections 1 and 2 of the Sherman Act and have 
construed Wisconsin antitrust statutes in conformity with these 
                                                 
7 See also Brooke Group Ltd. v. Brown & Williamson Tobacco 
Corp., 509 U.S. 209, 222 (1993) (predatory pricing claims arise 
when a "business rival has priced its products in an unfair 
manner with an object to eliminate or retard competition and 
thereby gain and exercise control over prices in the relevant 
market"); Cargill, Inc. v. Monfort of Colo. Inc., 479 U.S. 104, 
117 (1986) ("Predatory pricing may be defined as pricing below 
an appropriate measure of cost for the purpose of eliminating 
competitors in the short run and reducing competition in the 
long run."); Northeastern Tel. Co. v. Am. Tel. & Tel. Co., 651 
F.2d 76, 86 (2d Cir. 1981) (describing a predatory pricing 
scheme as "the deliberate sacrifice of present revenues for the 
purpose of driving rivals out of the market and then recouping 
the losses through higher profits earned in the absence of 
competition") (internal quotations omitted). 
No. 
01-3128 
10 
 
federal court interpretations.8  This is longstanding policy.  We 
have pointedly declared that "the construction of sec. 133.01(1) 
[presently 133.03] is controlled by federal decisions under the 
Sherman Act."  Prentice v. Title Ins. Co. of Minn., 176 
Wis. 2d 714, 724, 500 N.W.2d 658 (1993) (quoting State v. Waste 
Mgmt. of Wis., Inc., 81 Wis. 2d 555, 569 n.12, 261 N.W.2d 147 
(1978)); see also Pulp Wood Co. v. Green Bay Paper & Fiber Co., 
157 Wis. 604, 625, 147 N.W. 1058 (1914) (citing cases).  But see 
Carlson & Erickson Builders, Inc. v. Lampert Yards, Inc., 190 
Wis. 2d 650, 665, 529 N.W.2d 905 (1995) (characterizing federal 
antitrust decisions as not controlling but merely guiding 
interpretations of state antitrust statutes).  Our tradition of 
following federal antitrust law is nearly a century old, and 
                                                 
8 See, e.g., Prentice v. Title Ins. Co. of Minn., 176 
Wis. 2d 714, 724, 500 N.W.2d 658 (1993); State v. Waste Mgmt. of 
Wis., Inc., 81 Wis. 2d 555, 569 n.12, 261 N.W.2d 147 (1978); 
City of Madison v. Hyland, Hall & Co., 73 Wis. 2d 364, 375, 243 
N.W.2d 422 
(1976); 
State 
ex 
rel. 
Nordell 
v. 
Kinney, 
62 
Wis. 2d 558, 563, 215 N.W.2d 405 (1974); John Mohr & Sons, Inc. 
v. Jahnke, 55 Wis. 2d 402, 410, 198 N.W.2d 363 (1972); Reese v. 
Associated Hosp. Serv., 45 Wis. 2d 526, 532, 173 N.W.2d 661 
(1970); State v. Lewis & Leidersdorf Co., 201 Wis. 543, 549, 230 
N.W. 692 (1930); Pulp Wood, 157 Wis. at 625.  Most of these 
cases refer to Wis. Stat. § 133.01, which was renumbered as 
Wis. Stat. § 133.03 by the repeal and recreation of Chapter 133 
in 1980.  See § 2, ch. 209, Laws of 1979. 
Federal courts applying Wisconsin law have also commonly 
followed this principle of interpreting Wisconsin antitrust law 
consistent with federal precedent.  See, e.g., Westowne Shoes, 
Inc. v. Brown Group, Inc., 104 F.3d 994, 998 (7th Cir. 1997); 
Henry G. Meigs, Inc. v. Empire Petroleum Co., 273 F.2d 424, 430 
(7th Cir. 1960); Lerma v. Univision Communications, Inc., 52 F. 
Supp. 2d 1011, 1015-16 (E.D. Wis. 1999); Emergency One, Inc. v. 
Waterous Co., Inc., 23 F. Supp. 2d 959, 962 (E.D. Wis. 1998). 
No. 
01-3128 
11 
 
Conley has not presented, nor have we located, any Wisconsin 
appellate decision applying Wisconsin antitrust law that has 
deviated from following a clear federal standard on similar 
antitrust matters.9 
¶18 Our adherence to federal antitrust precedent supports 
important Wisconsin policies.  First and foremost, when the 
Wisconsin legislature enacted the state's mini-Sherman Act, it 
intended for courts to construe Chapter 133 consistent with the 
interpretations provided for analogous federal laws.  In Grams 
v. Boss, 97 Wis. 2d 332, 294 N.W.2d 473 (1980), we explained: 
We have repeatedly stated that sec. 133.01, Stats., 
[presently 133.03] was intended as a reenactment of 
the 
first 
two 
sections 
of 
the 
federal 
Sherman 
Antitrust Act of 1890, 15 U.S.C. secs. 1 and 2, with 
application 
to 
intrastate 
as 
distinguished 
from 
interstate transactions and that the question of what 
acts 
constitute 
a 
combination 
or 
conspiracy 
in 
restraint of trade is controlled by federal court 
decisions under the Sherman Act. 
                                                 
9 Conley cites to Wisconsin appellate court decisions having 
generally held that federal court interpretations of a federal 
statute for which there is a state analog are not binding on 
Wisconsin courts construing that state law.  However, none of 
the cases Conley cites involve application of antitrust law.  
See Weber v. Weber, 176 Wis. 2d 1085, 1092 n.7, 501 N.W.2d 413 
(1993) (regarding interpretations of federal rules of civil 
procedure to comparable state rules of civil procedure); Hoell 
v. LIRC, 186 Wis. 2d 603, 610, 522 N.W.2d 234 (Ct. App. 1994) 
(citing Marten Transp., Ltd. v. DILHR, 176 Wis. 2d 1012, 1021-
22, 501 N.W.2d 391 (1993)) (regarding construction of federal 
employment 
discrimination 
laws 
on 
interpretation 
of 
the 
Wisconsin Fair Employment Act); see also State v. Cardenas-
Hernandez, 
219 
Wis. 2d 516, 
528, 
579 
N.W.2d 678 
(1998) 
(construction 
of 
federal 
rules 
of 
evidence 
versus 
state 
counterparts); State v. Rochelt, 165 Wis. 2d 373, 384, 477 
N.W.2d 659 (Ct. App. 1991) (same); State v. Blalock, 150 
Wis. 2d 688, 702, 442 N.W.2d 514 (Ct. App. 1989) (same). 
No. 
01-3128 
12 
 
Id. at 346.  In the decades since this approach was adopted, we 
have relied upon the legislature's power to revise Chapter 133 
if Wisconsin court adherence to federal antitrust doctrine is 
found to be objectionable.10 
¶19 We 
also 
conform 
our 
antitrust 
doctrine 
to 
the 
decisions of federal courts because Wisconsin courts have much 
less experience in antitrust matters than federal courts.  This 
case highlights that rationale.  As noted by the court of 
appeals in its certification, there is no Wisconsin case law on 
the subject of predatory pricing under Wis. Stat. § 133.03(2).  
Until now, no Wisconsin case has ever cited the 1993 Brooke 
Group decision or Utah Pie Co. v. Continental Baking Co., 386 
U.S. 685 (1967), the principal "primary-line injury" case before 
Brooke Group.  Meanwhile, the breadth of federal antitrust 
precedent——particularly 
with 
regard 
to 
predatory 
pricing——
provides the guidance of well-developed judicial experience in 
these matters.  Conforming state law doctrine to federal law in 
this subject area avoids inconsistency and the resultant need 
for speculation as to the parameters of limited Wisconsin law. 
¶20 Consistency also achieves uniform treatment between 
state and federal antitrust laws for Wisconsin businesses and 
promotes predictability.  Both Chapter 133 and federal antitrust 
law have the same primary goal, which is to promote competition.  
Compare Carlson, 190 Wis. 2d at 662 ("Antitrust laws are 
                                                 
10 For 
a 
Wisconsin 
statutory 
initiative, 
see 
Wis. Stat. § 100.30, which is Wisconsin's unfair sales act. 
No. 
01-3128 
13 
 
intended to prevent restraints on free competition"), with 
Matsushita, 475 U.S. at 594 ("competition . . . [is] the very 
conduct the antitrust laws are designed to protect").  Both 
prohibit the same types of conduct, namely, restraints of trade 
and monopolizing or attempting to monopolize markets through 
unfair business practices.  Therefore, adherence to federal 
court precedent minimizes conflict between the enforcement of 
state and federal antitrust laws and avoids subjecting Wisconsin 
businesses to divergent regulatory and civil liability for the 
same conduct. 
¶21 Conley asks this court to depart from our longstanding 
practice and to ignore elements of the controlling federal law 
on predatory pricing.  The seminal federal case addressing 
predatory pricing is the United States Supreme Court decision in 
Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 
209 (1993).  According to the United States Supreme Court, to 
succeed on a claim of predatory pricing a plaintiff must prove, 
first, that the defendant's "prices complained of are below an 
appropriate measure of its rival's costs," id. at 222, and, 
No. 
01-3128 
14 
 
second, that the defendant has a dangerous probability of 
recouping its investment in below-cost prices, id. at 224.11 
¶22 Characterizing the Brooke Group test as overly hostile 
to antitrust claims, Conley urges this court to modify the 
Court's standard for establishing predatory pricing.12  In 
                                                 
11 Brooke Group's analysis spoke also in terms of a 
"reasonable prospect" of recoupment, Brooke Group, 509 U.S. at 
210, because the plaintiff in that case alleged "primary-line" 
price discrimination under the Clayton Act, as amended by the 
Robinson-Patman Act, 15 U.S.C. § 13(a) (2000).  The Court noted 
that the Robinson-Patman Act requires the lesser "reasonable 
possibility" 
standard 
as 
compared 
to 
the 
Sherman 
Act's 
"dangerous probability" standard.  Id. at 222.  However, the 
Court made it clear that the primary-line competitive injury 
being alleged in that case is of the same general character as 
the injury suffered by predatory pricing schemes under Section 2 
of the Sherman Act and that the two-part analysis established in 
the case applies equally under both Acts.  Id. at 221-22. 
12 In its certification memo, the court of appeals wrote 
that "it is Brooke Group's addition of the 'recoupment' element 
of a predatory pricing claim that renders it nearly impossible 
to succeed on a predatory pricing claim."  However, the concept 
of recoupment was discussed long before Brooke Group.  For 
instance, in Northeast Telephone Co. v. American Telephone & 
Telegraph Co., 651 F.2d 76 (2d Cir. 1981), Circuit Judge Irving 
R. Kaufman wrote: 
For unremunerative pricing to make economic sense, the 
predator must be assured that he will be able to 
recoup his short term losses in the future.  But 
because a dollar now is worth more than a dollar later 
(because of both inflation and the time value of 
money), he must be reasonably certain that once his 
prey has fallen, he will be able to reap supranormal 
returns. 
No. 
01-3128 
15 
 
particular, 
Conley 
disputes 
Brooke 
Group's 
formula 
for 
establishing recoupment.  Under Brooke Group, to establish the 
requisite prospect of recoupment under the second prong of a 
predatory pricing analysis, "[t]he plaintiff must demonstrate 
that there is a likelihood that the predatory scheme alleged 
would cause a rise in prices above a competitive level that 
would be sufficient to compensate for the amounts expended on 
the predation, including the time value of the money invested in 
it."  Id. at 225. 
¶23 Conley parses the preceding statement into two parts: 
(1) the likelihood of a rise in the predator's prices above a 
competitive 
level; 
and 
(2) 
the 
price 
increase 
would 
be 
sufficient to compensate for the losses incurred during the 
period of below-cost pricing.  Conley then offers multiple, 
interrelated reasons for why this court should refrain from 
adopting the second half of the Brooke Group recoupment 
standard. 
¶24 First, Conley contends that embracing both parts of 
the recoupment prong is inconsistent with the legislative 
command in Wis. Stat. § 133.01 that Chapter 133 be interpreted 
in a manner which gives "the most liberal construction to 
                                                                                                                                                             
Id. at 89 (emphasis added).  In Matsushita Electric Industrial 
Co. v. Zenith Radio Corp., 475 U.S. 574 (1986), Justice Powell 
wrote: "The forgone profits may be considered an investment in 
the future.  For the investment to be rational, the [predator] 
must have a reasonable expectation of recovering, in the form of 
later monopoly profits, more than the losses suffered."  Id. at 
588-89 (emphasis added). 
No. 
01-3128 
16 
 
achieve the aim of competition," Carlson, 190 Wis. 2d at 662, 
and with the aspiration for "vigorous private enforcement of 
antitrust laws."  Id. at 664 (quoting Illinois Brick Co. v. 
Illinois, 431 U.S. 720, 745 (1977)).  These hortatory statements 
offer little help, however, in determining what substantive 
elements this court should adopt for a claim of predatory 
pricing.  Wisconsin Stat. § 133.01 condemns only "unfair and 
discriminatory business practices which destroy competition."  
(Emphasis added.)  Despite Conley's intimations, Brooke Group 
does not eliminate or even constrict the enforcement of true 
antitrust violations.  The decision simply defines what an 
antitrust violation is, at least under the theory of predatory 
pricing, and what aggressive business practices must accomplish 
to cross the line and improperly thwart the aims of competition.  
Therefore, citation to § 133.01 and discussion of the benefits 
of private enforcement beg the question of whether conduct that 
does 
not 
meet 
the 
standard 
set 
in 
Brooke 
Group 
is 
anticompetitive and unlawful, and should thus be prohibited. 
¶25 Conley advances another argument for ignoring the 
second element of Brooke Group's recoupment standard.  According 
to Conley, the standard creates an evidentiary burden that no 
plaintiff can ever meet, resulting in a near impossibility of 
plaintiffs surviving summary judgment with claims of predatory 
pricing.  Conley points to recent commentary observing that 
"[j]udicial enforcement is at a low level following the Supreme 
Court's most important predatory pricing decision in modern 
times [i.e., Brooke Group].  Indeed, since Brooke was decided in 
No. 
01-3128 
17 
 
1993, no predatory pricing plaintiff has prevailed on the merits 
in the federal courts."  Patrick Bolton et al., Predatory 
Pricing: Strategic Theory and Legal Policy, 88 Geo. L.J. 2239, 
2241 (2000). 
¶26 That predatory pricing claims have rarely, if ever, 
prevailed under the Brooke Group standard speaks little about 
the merits of the standard.13  Contrary to Conley's assertions, 
the issue in deciding whether to adopt Brooke Group is not 
whether predatory pricing is, or should be, a prohibited 
practice.  It is.  Nor is the issue whether evidence can ever be 
presented to satisfy the standards for proving a true instance 
of predatory pricing.  Such evidence can be marshaled in 
circumstances where predation has occurred.14  Rather, Conley's 
quarrel is over how predatory pricing is defined and the 
                                                 
13 There is substantial evidence that predatory pricing 
claims in federal courts had severe difficulty prevailing even 
before Brooke Group was decided.  See generally Frank H. 
Easterbrook, Predatory Strategies and Counterstrategies, 48 U. 
Chi. L. Rev. 263, 314 (1981). 
14 Even the source that Conley offers to show the difficulty 
of surviving summary judgment in predatory pricing cases post-
Brooke Group cites three cases where federal courts refused to 
grant a defendant's motion for summary disposition of a 
predatory pricing claim.  Patrick Bolton et al., Predatory 
Pricing: Strategic Theory and Legal Policy, 88 Geo. L.J. 2239, 
2260 n.124 (2000) (citing Multistate Legal Studies, Inc. v. 
Harcourt Brace Jovanovich Legal & Prof'l Publ'ns, 63 F.3d 1540 
(10th Cir. 1995); Aventura Cable Corp. v. Rifkin/Narragansett S. 
Fla. CATV Ltd. P'ship, 941 F. Supp. 1189 (S.D. Fla. 1996); 
Servicetrends, Inc. v. Siemens Med. Sys., Inc., 870 F. Supp. 
1042 (N.D. Ga. 1994)). These cases were later settled out of 
court, precluding their chance to succeed on the merits.  See 
Bolton et al., supra, at 2259 & n.118. 
No. 
01-3128 
18 
 
criteria courts must use to assess whether a particular business 
practice violates the prohibition against predatory pricing.  
Brooke Group sets forth a rational and reasoned method for 
accomplishing this assessment.  Other articulations of the 
prerequisites 
for 
recoupment 
under 
predatory 
pricing 
are 
plausible.  Yet, even these alternative standards must face the 
ever-present quandary of predatory pricing litigation:  Are the 
standards so over-inclusive that they prohibit lawful, yet 
aggressively competitive conduct, or so under-inclusive that 
they encourage unlawful conduct and permit it to go unpunished?  
See Herbert Hovenkamp, Federal Antitrust Policy: The Law of 
Competition and Its Practice § 6.5a at 281 (2d ed. 1999).15 
¶27 In Brooke Group, the Court justified its legal 
standard 
by 
observing 
that 
overzealous 
litigation 
that 
erroneously awards 
damages 
based 
on 
unwarranted 
predatory 
pricing claims stifles legitimate competition.  According to the 
Court: 
[The Brooke Group] prerequisites to recovery are 
not easy to establish, but they are not artificial 
obstacles to recovery; rather, they are essential 
                                                 
15 Conley's argument questioning the merit of requiring 
recoupment levels sufficient to compensate the amounts spent on 
predation is partially of a chicken-and-egg/cause-versus-effect 
variety.  Do predatory pricing claims rarely succeed because the 
Brooke Group standard is too high and omits from its purview 
true instances of predatory pricing?  Or, does Brooke Group's 
standard correctly protect against false claims and the reason 
that these claims fail is because they do not actually allege 
conduct that is against the interests of competitive markets?  
At best, Conley's analysis dismissively entertains the second 
possibility. 
No. 
01-3128 
19 
 
components of real market injury.  As we have said in 
the Sherman Act context, "predatory pricing schemes 
are rarely tried, and even more rarely successful," 
Matsushita, [475 U.S.] at 589, and the costs of an 
erroneous finding of liability are high.  "[T]he 
mechanism by which a firm engages in predatory 
pricing——lowering prices——is the same mechanism by 
which a firm stimulates competition; because 'cutting 
prices in order to increase business often is the very 
essence 
of 
competition . . . [;] 
mistaken 
inferences . . . are especially costly, because they 
chill the very conduct the antitrust laws are designed 
to protect.'"  Cargill, [479 U.S.] at 122 n.17 
(quoting Matsushita, [475 U.S.] at 594).  It would be 
ironic indeed if the standards for predatory pricing 
liability were so low that antitrust suits themselves 
became a tool for keeping prices high. 
Brooke Group, 509 U.S. at 226-27.  We agree with the tenor and 
logic of this statement.  If erroneous allegations of predatory 
pricing are leveled against a competitor who is merely selling 
at lower prices than its competitors but who has legitimate 
business reasons for this pricing strategy, it is not consonant 
with § 133.01's objective of competition to give these claims 
credence.16 
¶28 Adoption of a predatory pricing standard authorizing 
successful claims when no harmful activity has occurred would be 
detrimental to market competition and consumer welfare in 
Wisconsin.  Without the complete recoupment element of Brooke 
Group, there would be considerable uncertainty whether a 
                                                 
16 Claims under Section 2 of the Sherman Act cannot succeed 
if a defendant's dominant market share resulted from "a superior 
product, business acumen, or historical accident."  Concord Boat 
Corp. v. Brunswick Corp., 207 F.3d 1039, 1060 (8th Cir. 2000) 
(quoting United States v. Grinnell Corp., 384 U.S. 563, 570-71 
(1966)). 
No. 
01-3128 
20 
 
predatory practice has occurred that will actually harm consumer 
interests through the charging of monopoly prices.  As the Court 
noted in Brooke Group, recoupment of this nature is an essential 
element of real market injury.  Id. at 226.  It is competition, 
not competitors, that antitrust law protects.  Id. at 224 
(citing Brown Shoe Co. v. United States, 370 U.S. 294, 320 
(1962)). 
¶29 Furthermore, the language that Conley asks this court 
to disregard is part of a restrictive clause to the sentence 
describing the recoupment standard.  Therefore, if this court 
were to delete this clause, we would necessarily be altering the 
meaning of recoupment as stated by the Court.  This observation 
is more than grammatical; it exposes a substantive flaw in 
Conley's argument.  Conley concedes, as it must, that the 
charging of low prices, even if it destroys a competitor, does 
not harm consumers unless the alleged predator later raises its 
prices above a competitive level and charges monopoly prices 
exceeding those otherwise available in a competitive market.  
"Recoupment is the ultimate object of an unlawful predatory 
pricing scheme; it is the means by which a predator profits from 
predation.  Without it, predatory pricing produces lower 
aggregate prices in the market, and consumer welfare is 
enhanced."  Id. at 224. 
¶30 Without 
a 
required 
showing 
of 
recoupment 
as 
articulated under Brooke Group, courts would be permitted to 
find a dangerous probability of recoupment by inference, rather 
than by proof.  This is precisely the legal standard that Conley 
No. 
01-3128 
21 
 
asks this court to adopt in Brooke Group's stead.  As a 
replacement for the second clause of the recoupment requirement, 
Conley suggests that all that is required to demonstrate 
recoupment is a "structural" showing of the possibility of a 
monopoly, which would require proof of two factors: (1) that the 
relevant market is already highly concentrated; and (2) the 
existence of high barriers to the entry of former or new 
competitors into the market.  See 3 Phillip Areeda & Herbert 
Hovenkamp, Antitrust Law: An Analysis of Antitrust Principles 
and Their Application 296 (2d ed. 2002) (discussing this 
theory).  In other words, if a monopoly results from a 
defendant's practice and the entry of competitors into the 
market is sufficiently difficult, then the demonstration of 
below-cost pricing would be sufficient for a competitor to 
succeed on a predatory pricing claim against its adversary and, 
as a result, be awarded treble damages from its competitor. 
¶31 We 
recognize 
that 
leading 
antitrust 
commentators 
observe that the proof necessary to establish the second clause 
of recoupment has yet to be fully determined.  See Areeda & 
Hovenkamp, supra, at 322.  Brooke Group did not reach the issue 
of whether its test requires proof not only of significantly 
supracompetitive pricing, actual or prospective, but also of the 
amount and duration of that pricing.  Id. (citing Brooke Group, 
509 U.S. at 274).  However, commentators also recognize that a 
business's attainment of monopoly positioning does not, ipso 
facto, mean that it has a dangerous probability of recouping all 
No. 
01-3128 
22 
 
its losses.17  While the existence of a monopoly indisputably 
facilitates an ability to recoup losses resulting from predatory 
pricing, and perhaps is a necessary condition for successful 
recoupment, it is not sufficient to assure recoupment.  See 
Frank 
H. 
Easterbrook, 
Predatory 
Strategies 
and 
Counterstrategies, 48 U. Chi. L. Rev. 263, 272 (1981).  A 
monopolizing enterprise will find it difficult to charge 
monopoly prices for a product when the demand for that product 
is relatively elastic (meaning that consumer demand is sensitive 
to price changes), so long as reasonable substitute products are 
available in the relevant market.18 
                                                 
17 Commentators who recognize (or even recommend) Conley's 
market structure argument generally use market structure as a 
shield, not a sword, in predatory pricing litigation.  It 
filters out unmeritorious claims and then traditional predatory 
pricing analysis is applied to those defendants that pass the 
structural prerequisites.  See Richard A. Posner, Antitrust Law 
217 (2d ed. 2001); Paul L. Joskow & Alvin K. Klevorick, A 
Framework for Analyzing Predatory Pricing Policy, 89 Yale L.J. 
213, 242-50 (1979); Herbert Hovenkamp, Federal Antitrust Policy: 
The Law of Competition and Its Practice § 8.4a, at 346-48 (2d 
ed. 1999). 
18 See Advo Inc. v. Phila. Newspapers, Inc., 51 F.3d 1191, 
1203 (3d Cir. 1995) ("[A] monopolist can [not] charge any price 
it wants.  . . .  [A]n exclusive seller will raise prices only 
to the point where the higher price is not more than offset by a 
decrease in quantity demanded.  The shape of the demand curve 
constrains the behavior of all sellers, even monopolists."); see 
also Hovenkamp, supra, § 1.2a at 13 ("A monopolist's market 
power is a function of the elasticity of demand for its 
product."); Easterbrook, supra, at 302-03 (explaining that while 
elasticities of demand are difficult to measure, they are 
essential to determining the social costs of a monopoly). 
No. 
01-3128 
23 
 
¶32 Finally, Conley cites some scholarly criticism of 
Brooke Group's requirement for establishing recoupment.  Conley 
claims that these critiques suggest a transitory nature to 
current federal antitrust doctrine on predatory pricing, which 
counsels against this court's full adoption of Brooke Group.  We 
have reviewed the sources that Conley purports demonstrate a 
declining confidence in the Brooke Group test.  These sources do 
not approach such a critical mass in the legal commentary that 
they excite a conviction that the standards set forth in Brooke 
Group are erroneous or otherwise imprudent.19  It is axiomatic 
that most judicial decisions——and certainly those of the United 
States Supreme Court——inspire some degree of commentary among 
other courts (or even within the same court, as in the case of a 
dissenting opinion) and among scholars.  Some of this commentary 
will invariably be critical.  More relevant to our present 
analysis is the silence within federal courts of any criticism 
                                                 
19 Conley cites to Patrick Bolton et al., Predatory Pricing: 
Strategic Theory and Legal Policy, 88 Geo. L.J. 2239 (2000); 
David F. Shores, Law, Facts and Market Realities in Antitrust 
Cases After Brooke and Kodak, 48 SMU L. Rev. 1835 (1995); 
Phillip Areeda & Herbert Hovenkamp, 3 Antitrust Law (2d ed. 
2002).  Given Conley's extensive reliance on the Areeda and 
Hovenkamp treatise, which Conley cites as providing some of the 
harshest criticisms against Brooke Group, it is worth noting 
that Professor Areeda was the counsel appearing on behalf of the 
petitioner/non-prevailing party before the United States Supreme 
Court in Brooke Group.  See Brooke Group, 509 U.S. at 211.  In 
addition, the Bolton article has itself been sharply criticized.  
See Kenneth G. Elzinga & David E. Mills, Predatory Pricing and 
Strategic Theory, 89 Geo. L.J. 2475 (2001). 
No. 
01-3128 
24 
 
over the Brooke Group test.  In fact, federal courts have 
largely endorsed the Brooke Group rationale.20 
¶33 In any event, the relative amount of scholarly 
criticism advanced against Brooke Group does not affect whether 
that decision is the controlling federal law on predatory 
pricing claims.  Absent the Supreme Court modifying the Brooke 
Group test, we adopt it in its entirety for assessing predatory 
pricing claims under § 133.03.  We see no compelling reason to 
depart from this court's sound and longstanding practice of 
deferring to federal antitrust principles and conforming our 
interpretations of Chapter 133 to federal court interpretations 
of the Sherman Antitrust Act. 
                                                 
20 A sampling of some recent federal cases fully applying 
Brooke Group includes:  Bailey v. Allgas, Inc., 284 F.3d 1237, 
1245, 1256 (11th Cir. 2002); Virgin Atl. Airways Ltd. v. British 
Airways PLC, 257 F.3d 256, 259 (2d Cir. 2001); Bridges v. 
MacLean-Stevens Studios, Inc., 201 F.3d 6, 13-14 (1st Cir. 
2000); Taylor Publ'g Co. v. Jostens, Inc., 216 F.3d 465, 477 
(5th Cir. 2000); Stearns Airport Equip. Co., Inc. v. FMC Corp., 
170 F.3d 518, 536 (5th Cir. 1999); Nat'l Parcel Servs., Inc. v. 
J.B. Hunt Logistics, Inc., 150 F.3d 970, 971 (8th Cir. 1998) 
Advo, Inc. v. Philadelphia Newspapers, Inc., 51 F.3d 1191, 1192 
(3d Cir. 1995); Am. Booksellers Ass'n, Inc. v. Barnes & Noble, 
Inc., 135 F. Supp. 2d 1031, 1041-42 (N.D. Cal. 2001); United 
States v. AMR Corp., 140 F. Supp. 2d 1141, 1209-15 (D. Kan. 
2001); Mathias v. Daily News, L.P., 152 F. Supp. 2d 465, 473 
(S.D.N.Y. 2001). 
Some federal cases have limited the effect of Brooke Group, 
but not in settings that directly involve predatory pricing.  
See, e.g., LePage's Inc. v. 3M, 324 F.3d 141, 168 (3d Cir. 2003) 
(limiting Brooke Group to only claims of predatory pricing); 
Chroma Lighting v. GTE Prods. Corp., 111 F.3d 653, 658 (9th Cir. 
1997) (concluding that Brooke Group does not extend to second-
line price discrimination cases). 
No. 
01-3128 
25 
 
IV. DAUBERT v. MERRELL DOW PHARMACEUTICALS 
¶34 Before turning to the sufficiency of the evidence in 
this case, we address a matter related to the circuit court's 
use of expert testimony.  In certifying this appeal, the court 
of appeals suggested that this case presents an opportunity for 
this court to revisit our rejection of the standard articulated 
in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 
(1993).  The court of appeals observed what it calls a tension 
between the principle that Wisconsin courts conform Wisconsin 
antitrust law to federal law and the principle that federal 
antitrust case law invokes the Daubert "gatekeeper" role of a 
trial court in admitting expert testimony.  The court of appeals 
suggested that we address the Daubert rule either on a broad 
scale or on a basis limited to antitrust cases, such as this 
predatory pricing claim.21 
                                                 
21 In the federal system, trial courts have a significant 
"gatekeeper" function in keeping from the jury expert testimony 
that is deemed unreliable.  See Daubert v. Merrell Dow Pharms., 
Inc., 509 U.S. 579 (1993) (scientific expert testimony); Kumho 
Tire Co. v. Carmichael, 526 U.S. 137 (1999) (general expert 
testimony). 
By contrast, the trial court's gatekeeper role in Wisconsin 
is limited.  See Green v. Smith & Nephew AHP, Inc., 2000 WI App 
192, ¶21, 238 Wis. 2d 477, 617 N.W.2d 881, aff'd, 2001 WI 109, 
245 Wis. 2d 772, 629 N.W.2d 727.  In Wisconsin, "Once the 
relevancy of the evidence is established and the witness is 
qualified as an expert, the reliability of the evidence is a 
weight and credibility issue for the fact finder and any 
reliability challenges must be made through cross-examination or 
by other 
means of impeachment." 
 
State 
v. 
Peters, 192 
Wis. 2d 674, 690, 534 N.W.2d 867 (Ct. App. 1995); see also State 
v. Walstad, 119 Wis. 2d 483, 516, 518-19, 351 N.W.2d 469 (1984). 
No. 
01-3128 
26 
 
¶35 Whatever merit there may be in revisiting Wisconsin 
law on the admissibility of expert testimony in light of 
Daubert, we do not believe that this case presents the proper 
vehicle.  The Daubert standard governs the admissibility of 
expert opinions and deals with the threshold reliability of an 
expert's opinion.  In the present action, the parties do not 
dispute the qualifications of any experts or the relevancy of 
their testimony.  Because the admissibility of an expert's 
opinion was not challenged in this appeal, the Daubert issue is 
not sufficiently present to require a decision.  Rather, as 
explained below, the central question presented involves how the 
circuit court considered the admissible expert testimony in 
reaching its decision to grant summary judgment. 
V. SUFFICIENCY OF CONLEY'S EVIDENCE 
¶36 Even though the Brooke Group standard is being adopted 
as Wisconsin law for predatory pricing claims, Conley maintains 
its challenge to the circuit court's grant of summary judgment.   
¶37 In response to the Journal's motion for summary 
judgment, Conley retained an expert, Dr. Frank Gollop, to 
present evidence of predatory pricing.  Gollop provided an 11-
page report stating, among other things, that both requirements 
of a predatory pricing scheme are present in the Journal's 
Sunday-daily conversion program.  Specifically, he concluded 
that the Journal was supplying daily newspapers to Waukesha 
County subscribers for less than the relevant measure of cost, 
which he considered to be the incremental, or marginal, cost of 
No. 
01-3128 
27 
 
producing 
and 
distributing 
an extra 
newspaper.22  
As to 
recoupment, Gollop stated that once the Journal drives the 
Freeman out of business it will have a monopoly in Waukesha 
County and, therefore, will recoup losses incurred during the 
time it sold newspapers at below cost.  Gollop was the only 
expert who testified on Conley's behalf regarding the alleged 
predatory nature of the Journal's program.  Meanwhile, the 
Journal offered expert testimony to disprove that any predatory 
pricing occurred under the program. 
¶38 The circuit court ruled that Dr. Gollop failed to 
provide sufficient evidence as to "the material issue of whether 
or not the total advertising revenue . . . [a]s folded into the 
price of the paper is below the cost to the Journal."  In other 
words, the court concluded that Conley had presented incomplete 
evidence as to whether the Journal was providing its newspapers 
at unprofitable levels.  Regarding the recoupment element, the 
court determined that Conley had failed to make any showing that 
the Journal would eventually be charging supracompetitive prices 
for its paper, what probable amount the Journal would need to 
recoup for its losses, or even that the Journal had suffered or 
                                                 
22 Neither the Court in Brooke Group nor other federal 
courts have definitively taken a position on which various cost 
measures are an "appropriate measure," although many federal 
circuits have regarded marginal cost and average variable cost 
as the most appropriate.  See generally Multistate Legal 
Studies, 63 F.3d at 1549 n.5.  Whatever standard is used, "the 
problem of measurement is apt to be acute."  Posner, supra, at 
215.  We do not address this issue because, on the basis of the 
Journal's summary judgment motion, we assume that Gollop's 
measure of cost was appropriate. 
No. 
01-3128 
28 
 
will suffer a loss as a result of the Sunday-daily conversion 
program. 
¶39 Conley contends that the circuit court, in reaching 
these conclusions, usurped the function of the jury by weighing 
conflicting 
expert 
testimony 
regarding 
the 
existence 
of 
predatory pricing.  Conley argues that the proffered expert 
testimony was sufficient to raise a genuine issue of material 
fact as to whether the Journal's Sunday-daily conversion program 
constituted predatory pricing and, thus, is an unlawful, 
anticompetitive practice.  According to Conley, summary judgment 
is never appropriate when qualified experts differ. 
¶40 We disagree with Conley and conclude that it failed to 
offer 
sufficient 
expert 
testimony, 
or 
other 
prima 
facie 
evidence, to support its antitrust claim of predatory pricing. 
¶41 As to the issue of below-cost pricing, we look to the 
specific conduct that is questioned.  The Sunday conversion plan 
amounted, in effect, to a temporary, net discount of no more 
than 50% off the newspaper's published rates for certain 
subscribers——namely, those previously receiving Sunday service 
and who, after conversion, also receive daily service.  The 50% 
discount benchmark was followed by the Journal because industry 
standards require that subscribers be charged at or above this 
rate if each subscription is to be included in the newspaper's 
audited circulation figures.  It is undisputed in the record 
that the Journal has offered this Sunday-daily conversion at 
different times throughout the Milwaukee metropolitan area, not 
just in Waukesha County.  In many locations where the discount 
No. 
01-3128 
29 
 
was offered, the Journal already monopolized both the daily and 
Sunday newspaper market, obviating any issue of anticompetitive 
conduct in those regions. 
¶42 The Journal does not argue that, if circulation costs 
and subscription revenue were the only appropriate measures of 
cost and revenue, there would be no evidentiary basis for a 
finding of below-cost pricing.  The record demonstrates, based 
on circulation accounting alone, that the marginal costs of 
producing and distributing numerous weeks of the daily newspaper 
to these conversion subscribers would exceed the nominal 
subscription revenue the Journal received by slightly decreasing 
the length of its Sunday newspaper obligations.  Although the 
Journal 
argues 
that 
increased 
subscribership 
after 
the 
promotional period ends may, in the long term, overcome this 
loss, this speculative result is too tenuous a basis for 
determining the Journal's actual net revenue from engaging in 
the program. 
¶43 However, the Journal does contend that subscription 
revenue is an incomplete measure of the revenue that is directly 
derived from its Sunday-daily conversion program.  In the 
newspaper industry, subscription rates represent a minority 
fraction of the revenue that a newspaper publisher garners from 
circulating each newspaper.  According to an expert for the 
Journal, advertising revenue generally comprises 75% to 80% of 
total newspaper revenue.  These figures are not controverted by 
Conley.  We are mindful that many newspapers are distributed 
free.  Although this observation has limited effect on our legal 
No. 
01-3128 
30 
 
analysis,23 it underscores the fact that advertising revenue may 
be 
virtually 
the 
exclusive 
source 
of 
revenue 
for 
some 
newspapers. 
¶44 The question, then, is whether advertising revenue 
directly derived from increased circulation, even when the 
circulation is generated by substantial discounts that impose no 
additional costs to subscribers, must be considered when 
determining whether below-cost pricing occurred.  We conclude 
that these revenues must be included, as a matter of law, when 
making this determination in a market analysis for daily paid 
newspapers.24  If specific conduct is alleged to be predatory, 
then all revenue directly flowing from that challenged conduct 
must be offset against the costs of that enterprise. 
                                                 
23 To be sure, these free newspapers are rarely, if ever, 
daily newspapers, and rarely, if ever, are distributed by means 
of home delivery.  Moreover, the relevant market in this action 
is that of paid daily newspapers in Waukesha County.  Therefore, 
the existence of free weekly newspapers inside or outside of 
Waukesha County does not impact the legal analysis of predatory 
pricing. 
24 In predatory pricing cases, disputes over below-cost 
pricing usually focus on the difficulties in calculating an 
appropriate measure of cost.  Volumes of scholarship have been 
written regarding how a firm's costs during predation should be 
measured, and courts have wrestled over this matter.  See 
generally Hovenkamp, supra, § 8.2-8.3 at 337-45.  The "price" 
component from which any measure of cost is compared is 
frequently easier to observe: What did the firm selling its 
units charge to whomever receives those units?  While some 
ancillary revenue is far too contingent, speculative, and 
otherwise improper to attribute to any sale, revenues from 
newspaper sales and distribution cannot be confined simply to 
the price charged to subscribers or other purchasers of the 
product. 
No. 
01-3128 
31 
 
¶45 The evidence presented by Dr. Gollop when he assessed 
whether the conversion program had net losses simply ignored 
this necessary measure of revenue attributable to increased 
circulation.  Therefore, Gollop failed to adequately consider 
whether increased circulation, and its resultant increase in 
advertising revenue, could exceed the costs of the Sunday-daily 
conversion program.  Because of this omission we must assume, on 
the basis of the summary judgment record, that each additional 
daily Journal Sentinel subscription generates approximately $200 
in additional annual advertising revenue.  The Journal offered 
these figures into evidence and Conley did not offer any 
competing estimates.  Meanwhile, the only cost figures Gollop 
presented were losses of $66 for each subscriber who converted 
from a 26-week Sunday subscription to a 22-week Sunday and daily 
subscription.  Extrapolating from this figure, the Journal's 
costs for converting a 52-week Sunday subscription would be 
proportionally larger than $66, but they would not be greater 
than $200. 
¶46 Conley's only response to its failure to address the 
incremental advertising revenue earned by increased circulation 
is to assert that a disagreement exists between the experts as 
No. 
01-3128 
32 
 
to whether this factor should be included in the calculus.25  We 
have already explained why figures addressing these revenues 
must be included to satisfy a showing of predatory losses.  In 
any event, Dr. Gollop never contended that advertising revenue 
should be excluded in an analysis of predatory pricing in the 
context of the newspaper conversion program.  At his deposition, 
Gollop only stated that he did not believe that advertising 
revenue would overcome any losses incurred from subtracting 
incremental 
circulation 
costs 
from 
incremental 
circulation 
revenues, admitting that he did not have any figures concerning 
this matter: 
[Question]:  Did your analysis take into account any 
increased 
advertising 
revenue 
associated 
with 
maintaining or increasing subscriptions? 
[Gollop]:  It does so only in the following sense.  
That if each additional conversion program generates a 
net loss to the Journal of $66, I really didn't think 
it 
was 
necessary 
to 
say 
that 
one 
additional 
subscription 
would 
generate 
$66 
in 
advertising 
revenue.  If you can show that, that would be 
terrific.  I don't have that kind of data, but I just 
can't believe one subscription generates $66 in added 
advertising revenue. 
[Question]:  You don't know one way or another? 
[Gollop]:  I don't. 
                                                 
25 Conley also suggests, based on a Journal Sentinel 
Circulation Department 2000 Marketing Plan that shows a net loss 
based on the conversion program discounts, that the Journal 
shows at least a $0.35 loss per daily newspapers supplied to a 
subscriber under the program.  However, this document does not 
summarize all costs and revenues related to the conversion 
program nor does it suggest a cost analysis beyond that 
experienced only by the newspaper's circulation department. 
No. 
01-3128 
33 
 
Doctor Gollop's conscious disregard of this revenue source 
cannot insulate Conley from its burden of presenting sufficient 
prima facie evidence of predatory pricing. 
¶47 It is apparent that Conley wants the best of both 
worlds when it comes to the role of advertising revenue in a 
predatory pricing claim.  On the one hand, Conley defends its 
expert's decision not to include advertising revenue from 
increased circulation as an appropriate component in a revenue-
cost differential.26  Meanwhile, Conley complains that one of the 
primary damages it suffers as a result of the Sunday-daily 
conversion program is the loss of advertising dollars from its 
decreased circulation.  In Conley's own words, "In the newspaper 
business, it is common knowledge that a decline in circulation 
leads to a decline in advertising revenues and that decline in 
advertisers leads to further declines in circulation."  Conley's 
acknowledgment in this regard is fatal to its argument. 
¶48 As to recoupment, Conley fares no better.  Assuming 
arguendo that below-cost sales occurred, to establish the 
recoupment element of a predatory pricing claim Conley had to 
present some proof of a "dangerous probability" that the Journal 
would recoup the discounted value of its predation losses by 
charging monopolistic prices after the Freeman was driven from 
                                                 
26 Despite Gollop's omissions in this matter, at both his 
deposition and in his report Gollop proclaimed that newspapers 
increase circulation precisely to increase advertising revenues, 
that circulation and advertising sales are highly correlated, 
and that advertisers will pay higher advertising rates as a 
newspaper's circulation increases. 
No. 
01-3128 
34 
 
the market.  Brooke Group, 509 U.S. at 224.  As noted by Judge 
Hassin, Dr. Gollop failed to present any evidence of how much 
the Journal would have to increase either its subscription rates 
or advertising rates, or for how long, in order for the Journal 
Sentinel to recover any purported losses.27  Likewise, no 
evidence was presented regarding how the market would tolerate 
any price increases above competitive levels.  Gollop never even 
surmised such results. 
¶49 The 
Court 
in 
Brooke 
Group 
clearly 
stated 
that 
"[d]etermining whether recoupment of predatory losses is likely 
requires an estimate of the cost of the alleged predation and a 
close analysis of both the scheme alleged by the plaintiff and 
the structure and conditions of the relevant market."  Brooke 
Group, 509 U.S. at 226.  Gollop did not perform a close analysis 
of the scheme alleged or the conditions of the market.  Without 
such evidence, a jury could not reasonably determine whether 
Conley satisfied the recoupment element of Brooke Group without 
engaging in sheer speculation.  The need for such evidence was 
made clear by the Court's additional instruction that, "If 
market circumstances or deficiencies in proof would bar a 
reasonable jury from finding that the scheme alleged would 
likely 
result 
in 
sustained 
supracompetitive 
pricing, 
the 
                                                 
27 Perhaps the most fundamental hurdle facing Conley's 
evidence of a dangerous probability of recoupment is its failure 
to establish below-cost pricing.  Without a complete sense of 
the investment that the Journal has sunk into the Sunday-daily 
conversion program, it is impossible to know its relative needs 
for recoupment. 
No. 
01-3128 
35 
 
plaintiff's case has failed."  Id.  While the Court followed 
this statement by indicating that the realization of a monopoly 
position 
is 
a 
market 
circumstance 
that 
would 
facilitate 
recoupment, it stopped short of adopting Conley's "market 
structure" argument.28  It is this market structure argument, and 
only this premise, from which Gollop concluded that the Journal 
could meet the recoupment requirement for a predatory pricing 
claim.29  In fact, we imagine that this flaw in Conley's proof is 
precisely why it advances the argument that this court should 
reject the bulk of Brooke Group's recoupment standard. 
¶50 Overall, we conclude that the circuit court did not 
usurp the jury's fact-finding role in granting summary judgment 
in this case.  As did the circuit court, we have not assessed 
the credibility of Dr. Gollop's testimony.  Rather, accepting 
his expert testimony, we conclude that Dr. Gollop's evidence 
failed to address material elements of Conley's claims.  Under 
any view of the facts, essential elements of Conley's claim 
cannot be proved on this record and, therefore, summary judgment 
is appropriate.  See Schurmann v. Neau, 2001 WI App 4, ¶7, 240 
Wis. 2d 719, 624 N.W.2d 157. 
                                                 
28 For an informative discussion of the limitations facing a 
newspaper operating as a monopolist in a market with competing 
sources of news and advertising media, see Reilly v. Hearst 
Corp., 107 F. Supp. 2d 1192, 1201 (N.D. Cal. 2000). 
29 We accept Dr. Gollop's view that the barriers to entry in 
the local newspaper market are significant due to high fixed 
costs and the necessity of sustaining losses for a long period 
of time while the newspaper attempts to penetrate embedded 
subscriber and advertiser loyalty in incumbent papers. 
No. 
01-3128 
36 
 
¶51 Once again, we look to Brooke Group for guidance on 
the role that experts play in summary judgment proceedings in 
cases alleging predatory pricing.30  According to the Court: 
When an expert opinion is not supported by sufficient 
facts to validate it in the eyes of the law, or when 
indisputable record facts contradict or otherwise 
render the opinion unreasonable, it cannot support a 
jury's verdict.  Expert testimony is useful as a guide 
to interpreting market facts, but it is not a 
substitute for them. 
Brooke Group, 509 U.S. at 242 (citation omitted).  Expert 
testimony provides a jury with insight it otherwise lacks due to 
a layperson's unfamiliarity with complex concepts.  See County 
of Kenosha v. C & S Mgmt., Inc., 223 Wis. 2d 373, 415, 588 
N.W.2d 236 (1999).  In the domain of predatory pricing claims, 
cost accounting, the role of various measures of cost, and 
market phenomena are precisely the sort of complex matters for 
which experts are needed.  However, a jury, which is the 
ultimate arbiter of the veracity of the facts offered, is not 
required to complete a complex economic analysis when the non-
moving party does not present sufficient facts to establish an 
essential component of that analysis.  In order to defeat a 
properly supported motion for summary judgment, a party may not 
                                                 
30 Because the function of summary judgment procedure in 
federal and state courts is the same, federal decisions 
regarding 
summary 
judgment 
may 
be 
considered 
persuasive 
authority in interpreting Wisconsin's summary judgment rule.  
Yahnke v. Carson, 2000 WI 74, ¶10, 236 Wis. 2d 257, 613 
N.W.2d 102.  This recognition is especially proper in the 
context of antitrust litigation, where federal court experience 
in summary proceedings involving antirust claims is much greater 
than state courts. 
No. 
01-3128 
37 
 
rest on conclusory or incomplete expert analysis that lacks a 
sufficient factual foundation.  See Advo Inc. v. Phila. 
Newspapers, 
Inc., 
51 
F.3d 
1191, 
1198-99 
(3d 
Cir. 
1995) 
(affirming summary judgment dismissing predatory pricing claim 
because expert affidavit failed to present facts establishing a 
genuine issue of below-cost pricing).31 
¶52 The evidence proffered by Conley, including its expert 
testimony 
on 
the 
predatory 
pricing 
claim, 
provides 
an 
insufficient basis to proceed to a jury trial.  Because a 
reasonable jury faced with this evidence would have no factual 
basis for concluding that the Journal's promotional scheme was 
operating below-cost, there are no genuine issues of material 
fact.  See Baxter v. DNR, 165 Wis. 2d 298, 312, 477 N.W.2d 648 
(Ct. App. 1991) (citing Anderson v. Liberty Lobby, Inc., 477 
U.S. 242, 248 (1986)).  "[O]nce sufficient time for discovery 
has passed, it is the burden of the party asserting a claim on 
which it bears the burden of proof at trial 'to make a showing 
sufficient to establish the existence of an element essential to 
that party's case.'"  Transp. Ins. Co., Inc. v. Hunzinger Const. 
Co., 179 Wis. 2d 281, 291-92, 507 N.W.2d 136 (Ct. App. 1993) 
(quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)).  
                                                 
31 See also Virgin Atl. Airways Ltd. v. British Airways PLC, 
69 F. Supp. 2d 571, 579 (S.D.N.Y. 1999) ("[A]n expert's opinion 
is not a substitute for a plaintiff's obligation to provide 
evidence of facts that support the applicability of the expert's 
opinion to the case."), aff'd, 257 F.3d 256 (2d Cir. 2001); Mid-
State Fertilizer Co. v. Exchange Nat'l Bank, 877 F.2d 1333, 1339 
(7th Cir. 1989). 
No. 
01-3128 
38 
 
On the basis of the summary judgment record, Conley has failed 
to meet this requirement. 
¶53 Finally, 
we 
briefly 
address 
Conley's 
argument 
regarding its evidence of the Journal's alleged predatory 
intent.  Although Conley makes much of the Journal's aggressive 
efforts to target readership and strengthen its sales position 
in Waukesha County, this emphasis is not very probative of any 
specific anticompetitive practice.  The population of Waukesha 
County at the time the contested programs were implemented was 
expanding and, as noted by Journal personnel, is composed of 
people the Journal assessed as the most likely to read a daily 
newspaper.  Competition is a very harsh reality in the world of 
newspapers, and the market forces inherent in the daily 
newspaper market frequently lead to natural local monopolies.  
See Reilly v. Hearst Corp., 107 F. Supp. 2d 1192, 1198 (N.D. 
Cal. 2000).  The Journal is permitted to lawfully compete 
against Conley, even to the extent of trying to have Freeman 
subscribers switch to becoming Journal Sentinel readers.  See 
Indep. Milk Producers Co-op v. Stoffel, 102 Wis. 2d 1, 10, 298 
N.W.2d 102 (Ct. App. 1980) ("It is not illegal for a company to 
try to attract business, especially at the expense of a 
competitor.  Such practices are everyday occurrences in the 
business world.").  It is well understood that activities that 
have 
a 
legitimate 
business 
justification 
are 
not 
anticompetitive, even by a monopolist.  See Virgin Atl. Airways 
Ltd. v. British Airways PLC, 257 F.3d 256, 266 (2d Cir. 2001) 
("even with monopoly power, a business entity is not guilty of 
No. 
01-3128 
39 
 
predatory conduct through excluding its competitors from the 
market when it is simply exploiting competitive advantages 
legitimately available to it"); United States v. AMR Corp., 140 
F. Supp. 2d 1141, 1193 (D. Kan. 2001). 
VI. CONCLUSION 
¶54 Based on the foregoing reasons, we adopt the standards 
articulated by the United States Supreme Court in Brooke Group 
as governing predatory pricing claims in Wisconsin under 
Wis. Stat. § 133.03(2).  In addition, we conclude that, based on 
the summary judgment record presented before the circuit court, 
Conley failed to present evidence sufficient for any reasonable 
jury to find that the Journal's Sunday-daily conversion program 
constituted predatory pricing and was therefore an unlawful, 
anticompetitive practice waged against the Freeman.  Therefore, 
summary judgment in favor of the Journal was appropriate. 
 
By the Court.—The judgment of the circuit court is 
affirmed. 
 
 
 
 
 
No. 
01-3128 
 
 
1