Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-14-15562/USCOURTS-ca9-14-15562-0/pdf.json

Parties Involved:
Aerotec International, Inc.
Appellant
Honeywell International, Inc.
Appellee

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

AEROTEC INTERNATIONAL, INC.,

an Arizona corporation,

Plaintiff-Appellant,

v.

HONEYWELL INTERNATIONAL,

INC., a Delaware corporation,

Defendant-Appellee.

No. 14-15562

D.C. No.

2:10-cv-00433-JWS

OPINION

Appeal from the United States District Court

for the District of Arizona

John W. Sedwick, District Judge, Presiding

Argued and Submitted March 16, 2016

San Francisco, California

Filed September 9, 2016

Before: M. Margaret McKeown, Kim McLane Wardlaw,

and Richard C. Tallman, Circuit Judges.

Opinion by Judge McKeown

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2 AEROTEC INT’L V. HONEYWELL INT’L

SUMMARY*

Antitrust

The panel affirmed the district court’s grant of summary

judgment in favor of defendant Honeywell International, Inc.,

on antitrust claims brought by Aerotec International, Inc.

Aerotec, a small, independent company that provides

maintenance, repair, and overhaul services for Honeywellmanufactured auxiliary power units for aircraft, alleged that

Honeywell leveraged its monopoly power over the auxiliary

power unit parts market to unfairly smother competition in

the repair services market.

The panel held that Aerotec failed to establish either

positive or negative tying in violation of § 1 of the Sherman

Act because there was no condition linking the sale of a tying

product with the sale of the tied product. Aerotec also

presented insufficient evidence of exclusive dealing under

Sherman Act § 1.

As to monopolization claims under Sherman Act § 2,

Areotec failed to establish foreclosure of competition through

a refusal to deal or a denial of essential facilities. Aerotec

also failed to establish liability on the basis of bundled parts

and repairs.

The panel affirmed the district court’s summary judgment

on a price discrimination claim under the Robinson-Patman

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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AEROTEC INT’L V. HONEYWELL INT’L 3

Act because Aerotec failed to establish actionable

discrimination in price between independent servicers and

Honeywell’s affiliates.

COUNSEL

Michael C. Blair (argued) and Craig M. LaChance, Baird,

Williams & Greer, LLP, Phoenix, Arizona, for PlaintiffAppellant.

William J. Maledon (argued), Brett L. Dunkelman, Joseph N.

Roth, and Eric M. Fraser, Osborn Maledon, P.A., Phoenix,

Arizona; Richard G. Parker, O’Melveny & Myers LLP,

Washington, D.C.; for Defendant-Appellee.

OPINION

McKEOWN, Circuit Judge:

This case reads like an antitrust primer for aftermarket

issues, with claims for exclusive dealing, tying, essential

facilities, refusal to deal, price bundling, and price squeezing

under Sections 1 and 2 of the Sherman Act and differential

pricing/price discrimination under the Robinson-Patman Act. 

Honeywell International Inc. (“Honeywell”) is one of the

world’s two largest manufacturers of auxiliary power units

(“APUs”), which power aircraft functions such as electricity

and temperature. Aerotec International Inc. (“Aerotec”) is a

small, independent company that provides maintenance,

repair, and overhaul (“MRO”) services for Honeywell APUs. 

Aerotec argues that Honeywell leverages its monopoly power

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4 AEROTEC INT’L V. HONEYWELL INT’L

over the APU parts market to unfairly smother competition in

the repair services market.

Aerotec’s antitrust claims fail for lack of evidence to link

Aerotec’s misfortune to any cognizable basis for antitrust

liability. This case serves as a reminder that anecdotal

speculation and supposition are not a substitute for evidence,

and that evidence decoupled from harm to competition—the

bellwether of antitrust—is insufficient to defeat summary

judgment. As the Supreme Court reminds us, “[t]he law

directs itself not against conduct which is competitive, even

severely so, but against conduct which unfairly tends to

destroy competition itself.” Spectrum Sports, Inc. v.

McQuillan, 506 U.S. 447, 458 (1993); see also Cascade

Health Sols. v. PeaceHealth, 515 F.3d 883, 901 (9th Cir.

2007) (reiterating that “antitrust laws protect the process of

competition, and not the pursuits of any particular

competitor”). We affirm the district court’s grant of

summary judgment in favor of Honeywell.

BACKGROUND

This case concerns the repair and maintenance market for

APUs, which are small engines that provide aircraft with the

electrical power needed to keep air conditioning running,

cabin lights shining, and electric-powered instrumentation

functioning. Without APUs, air travel would be neither

comfortable nor safe. A malfunctioning APU requires that a

plane be grounded until the problem is fixed—a situation that

can cost airlines hundreds of thousands of dollars a day. In

short, APUs are an essential cog in a smoothly functioning

aviation industry.

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AEROTEC INT’L V. HONEYWELL INT’L 5

Very few companies manufacture APUs. Honeywell, a

diversified manufacturer of aerospace products, dominates

the APU industry, with a 76 percent share of the

manufacturing market for commercial aircraft, 89 percent for

business planes, and 79 percent for military aircraft. The

other major manufacturer is Hamilton Sundstrand.

Aerotec is a small APU shop that competes with

Honeywell in the repair market. Aerotec’s share of the repair

market is about 1 percent, and it is one of the few firms that

repairs APUs from both Honeywell and Hamilton

Sundstrand. Aerotec shares the stage with at least 49 other

MRO servicers, plus Honeywell, which alone repairs as much

as 54 percent of Honeywell-manufactured APUs.

The lifeblood of the repair and maintenance market is a

steady source of replacement parts. Because of the

proprietary nature of the design, manufacturers naturally

control most of the replacement parts market for APUs. The

industry denotes replacement parts branded by the

manufacturer as “original equipment manufacturer” (“OEM”)

parts, in contrast with substitute parts, which are referred to

as “parts manufacturing approval” (“PMA”) parts because

they require regulatory certification by the Federal Aviation

Administration (“FAA”). Almost all parts available on the

market are OEM parts. PMAs cover mostly non-essential

parts and are rarely available for the more important, and

expensive, components of an APU, such as turbine blades.

Repair procedures are also critical to the repair and

maintenancemarket, given the technical complexityof APUs. 

Although Honeywell closely guards its proprietary repair

methods involving OEM parts, the aviation industry as a

whole has developed substitute repair methods for

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6 AEROTEC INT’L V. HONEYWELL INT’L

Honeywell’s APUs that both mimic and depart from

Honeywell’s protocols. These repair processes must be

approved by a “designated engineering representative”

(“DER”) approved by the FAA, and are referred to within the

industry as “DER repairs.”

Apart from Honeywell, APU repairs are undertaken

directly by the airlines (“self-servicing airlines”), Honeywell

affiliates, and independent operators. Participants in this

market typically bundle parts and repairs in an effort to woo

the airlines into long-term repair and maintenance

agreements.

The majority of Honeywell MRO servicers, known as

Honeywell affiliates, operate under long-term contracts with

Honeywell for parts. Under these agreements, a servicer

typically agrees to certain obligations and royalty fees in

exchange for discounts on Honeywell OEM parts, priority in

allocation of parts in shortages, and a license to use

Honeywell’s intellectual property for APU repairs. At least

five of the MRO servicers, including Aerotec, are

independent companies without anymanufacturer affiliation. 

These independent servicers typically obtain the necessary

parts for repairs by submitting purchase orders for parts on an

as-needed basis through spot contracts with Honeywell. 

Under Honeywell’s tiered pricing structure, independent

servicers pay more for OEM parts in spot orders than do selfservicing airlines, and typically pay more than Honeywell

affiliates who negotiate prices as part of their long-term

agreements. Facing these pricing differentials, independent

servicers use cheaper PMA parts and DER repair methods

when they are available, which is partly how they are able to

compete in the volatile and competitive repair and

maintenance market. Despite claimed barriers, Aerotec touts

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AEROTEC INT’L V. HONEYWELL INT’L 7

that its prices are 20 percent lower than its competitors on

average.

Although Aerotec traditionally controlled less than one

percent of the Honeywell APU repair and maintenance

market, beginning around 2006, after emerging from a second

bankruptcy, Aerotec made a push to increase its market share

and profitability. The company branded itself as a “fierce

low cost” competitor to Honeywell. Aerotec wrangled major

MRO deals away from Honeywell, including one with Saudi

Arabian Airlines (“Saudia”) in 2007 and another with Air

India in 2009. The deal with Saudia was not easily won, and

it was precarious from the get-go: Aerotec “openly discussed

its financial limitations” with Saudia and contracted for a

“‘fixed monthly payment’ plan . . . to ensure a steady cash

flow,” despite the fact that Saudia’s prior deal with

Honeywell had gone sour because of Saudia’s late payments. 

Aerotec’s sales director noted that carrying customer debt of

$500,000 to $1,500,000 “would put [Aerotec] out of

business.” But for a time Aerotec’s profits soared.

Aerotec’s upward trajectory did not last. Beginning in

2007, a well-documented worldwide parts shortage for the

Honeywell Model 331-500 APU used in Saudia’s fleet of

Boeing 777s hampered Honeywell’s ability to follow through

on commitments to purchasers of parts, including Aerotec. 

Because Honeywell’s parts allocation system put independent

MROs at the bottom of the priority list, Aerotec experienced

delays in the delivery of parts. Aerotec’s lack of a preexisting inventory of parts exacerbated the problem. As a

result of the unavailability of parts, Aerotec began having

trouble fulfilling its contracts with Saudia and other clients. 

For its part, Saudia continued its pattern of late payments,

leaving Aerotec stranded on a “continuous financial roller-

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8 AEROTEC INT’L V. HONEYWELL INT’L

coaster” with millions of dollars of customer debt. 

Honeywell continued to sell parts to Aerotec, and, even when

Aerotec could not financially cover its demand, extended

credit lines. But the credit came at the cost of further deprioritization of shipments and additional layers of review for

parts orders. As a result of these difficulties, Aerotec

suffered a series of major bidding losses: Saudia left Aerotec

in 2009, opting instead for a Honeywell affiliate; Air India

left for Honeywell; and Air China chose Honeywell in a hotly

contested bidding process.

In the face of its dwindling market share, Aerotec turned

to federal court and filed a complaint alleging causes of

action under §§ 1 & 2 of the Sherman Antitrust Act,

15 U.S.C. §§ 1, 2, the Robinson-Patman Act, 15 U.S.C.

§ 13(a), and Arizona state law. Aerotec takes issue with

Honeywell’s claims that its hands were tied by a parts

shortage. Instead, Aerotec views the parts shortage as a

pretext—part of what Aerotec alleges to be Honeywell’s

thinly-veiled, multi-pronged plan to leverage its control over

the parts market to pull business from independent servicers

to itself and its affiliates.

In addition to the allegedly deliberate shipment delays,

Aerotec alleges that Honeywell maintained an overly

burdensome ordering process, held Aerotec to stringent

payment terms at the same time that it failed to deliver parts,

withheld needed technical information that previously had

been provided as a matter of course, lured airline clients away

from independent servicers by offering steeply discounted

bundles of parts and repair services, and imposed a pricing

penalty on independent servicers vis-a-vis airlines and

Honeywell affiliates.

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AEROTEC INT’L V. HONEYWELL INT’L 9

After the close of discovery, the parties filed crossmotions for summary judgment. The district court denied

Aerotec’s motion and granted Honeywell’s motion,

concluding that there was insufficient evidence to create

triable factual disputes on Aerotec’s federal antitrust claims. 

The court also dismissed Aerotec’s Arizona state law claims

because they either turned on the viability of Aerotec’s

federal antitrust claims or were unsupported by evidence

sufficient to create a material factual dispute. Reviewing

summary judgment de novo and viewing the evidence in the

light most favorable to Aerotec, the non-moving party, we

affirm. See Rebel Oil Co., Inc. v. Atl. Richfield Co., 51 F.3d

1421, 1432 (9th Cir. 1995).

ANALYSIS

I. Section 1 of the Sherman Act

Section 1 of the Sherman Act prohibits “[e]very contract,

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

in restraint of trade or commerce among the several States, or

with foreign nations . . . .” 15 U.S.C. § 1. Despite the breadth

of the statutory language, the Supreme Court “has long

recognized that Congress intended to outlaw only

unreasonable restraints.” State Oil Co. v. Khan, 522 U.S. 3,

10 (1997). To establish liability under § 1, a plaintiff must

prove (1) the existence of an agreement, and (2) that the

agreement was in unreasonable restraint of trade. Am.

Needle, Inc. v. Nat’l Football League, 560 U.S. 183, 189–90

(2010). Aerotec relies on two theories of liability under § 1:

first, that Honeywell restrained trade by “tying” the purchase

of Honeywell OEM parts to the purchase of Honeywell repair

services; and second, that Honeywell restrained trade by

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10 AEROTEC INT’L V. HONEYWELL INT’L

forcing airlines into de facto exclusive dealing arrangements

with Honeywell and its affiliates.

A. Section 1 of the Sherman Act—Tying

In a tying arrangement, a “seller conditions the sale of one

product (the tying product) on the buyer’s purchase of a

second product (the tied product).” Cascade Health, 515 F.3d

at 912. By so doing, a seller with “market power in one

market . . . extend[s] its market power to an entirely distinct

market.” Paladin Assocs., Inc. v. Mont. Power Co., 328 F.3d

1145, 1159 (9th Cir. 2003). To establish a tying claim,

Aerotec must prove:

(1) that [Honeywell] tied together the sale of

two distinct products or services; (2) that

[Honeywell] possesses enough economic

power in the tying product market to coerce

its customers into purchasing the tied product;

and (3) that the tying arrangement affects a

not insubstantial volume of commerce in the

tied product market.

Cascade Health, 515 F.3d at 913 (internal quotation marks

omitted). Aerotec’s claim falters on the first, most

fundamental requirement—the existence of a tie.

A tie only exists where “the defendant improperly

imposes conditions that explicitly or practically require

buyers to take the second product if they want the first one.” 

10 Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law

¶ 1752b (3d ed. 2011). Prohibited tying arrangements under

§ 1 include both positive and negative ties. See Data Gen.

Corp. v. Grumman Sys. Support Corp., 36 F.3d 1147, 1178

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AEROTEC INT’L V. HONEYWELL INT’L 11

(1st Cir. 1994) (drawing parallels between “positive” and

“negative” ties), abrogated on other grounds by Reed

Elsevier, Inc. v. Muchnick, 130 S. Ct. 1237 (2010). Under the

more traditional positive tie, sale of the desired (“tying”)

product is conditioned on purchase of another (“tied”)

product. See id. at 1156. A negative tie “occur[s] when the

customer promises not to take the tied product from the

defendant’s competitor, but courts ‘rarely encounter[]’ such

a situation.” See Cascade Health, 515 F.3d at 912 n.23

(citing 10 Areeda & Herbert Hovenkamp, supra ¶ 1752c n.8

(2d ed. 2004)) (alteration in original). The common element

in both situations is that a seller explicitly or implicitly

imposes conditions linking the sale of a tying product with

the sale of the tied product. See 10 Areeda & Hovenkamp,

supra ¶ 1752e (3d ed. 2011) (noting that whether there is a tie

turns on “whether the defendant gave buyers the reasonable

impression that it would not sell product A to those who

would not buy its B”). Aerotec’s claim does not fit either

framework because there is no condition linked to a sale. We

decline to stretch the tying construct to accommodate the

claim that Honeywell’s conduct toward third party

servicers—i.e., parts delays, pricing decisions, and removal

of technical data—acts as an effective, or “de facto,”

condition on sale to airlines.1

Although Aerotec urges that its theory is directly

supported by the Supreme Court’s decision in Kodak,

Aerotec’s claim is critically different from the “negative”

tying claim in that case. Eastman Kodak Co. v. Image

1 Aerotec’s theory of tying is quite similar to the approach advanced

and rejected in Triad Sys. Corp. v. Se. Express Co., 1994 WL 446049 at

*14–16 (N.D. Cal. Mar. 18, 1994), affirmed in part and reversed in part

on other grounds by 64 F.3d 1330 (9th Cir. 1995).

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12 AEROTEC INT’L V. HONEYWELL INT’L

Technical Servs., Inc., 504 U.S. 451 (1992) (“Kodak”). In

Kodak, the Supreme Court recognized a tie where Kodak

conditioned the sale of printer replacement parts to copy

machine owners on an agreement not to purchase repair

services from an independent service provider: “[t]he record

indicate[d] that Kodak would sell parts to third parties only if

they agreed not to buy service from [independent service

operators].” Id. at 463. Unlike in this case, Kodak imposed

its tying conditions on the purchasers of parts. Conditions of

sale to competitor service providers were not at issue. Kodak

simply does not map onto the facts here, where the only

claimed conditions imposed were on independent servicers.

Nor can Aerotec transform Kodak by waving its hands

and saying that the gravamen of its complaint is a “de facto”

or “implied” tie. We readily acknowledge that tying

conditions need not be spelled out in express contractual

terms to fall within the Sherman Act’s prohibitions. See

Collins Inkjet Corp. v. Eastman Kodak Co., 781 F.3d 264,

272 (6th Cir. 2015) (recognizing “non-explicit tying” when

a seller “adopts a policy that makes it unreasonably difficult

or costly to buy the tying product . . . without buying the tied

product”), cert. denied, 136 S. Ct. 498 (2015); see also

Foremost Pro Color, Inc. v. Eastman Kodak Co., 703 F.2d

534, 542–43 (9th Cir. 1983) (rejecting a claim of a

“technological tie” but acknowledging the possibility of such

a claim), overruled on other grounds as recognized in

Chroma Lighting v. GTE Prods. Corp., 111 F.3d 653, 657

(9th Cir. 1997). The problem with Aerotec’s claim is that

there is no tie, i.e., no evidence that Honeywell explicitly or

implicitly ties or conditions the sale of APU parts to APU

owners on a requirement that the owners “buy and repair

Honeywell” and/or forego services from independent service

providers. Aerotec does not dispute that Honeywell routinely

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AEROTEC INT’L V. HONEYWELL INT’L 13

sells APU parts to airlines without conditioning sales on

service contracts. Honeywell allows airlines to purchase

parts and services in separate transactions from whichever

supplier they please. This undermines the analogy to Kodak,

even under an implied tying theory. See Areeda &

Hovenkamp, supra ¶ 1752a (Supp. 2016) (noting that the

existence of a tie can only be established through a “nuanced

inquiry into whether the defendant has so acted as to

constrain buyer choices illegitimately”).

Perhaps cognizant that the arrangement in Kodak does not

fit the facts here because there is no direct condition linked to

the sale of parts to airlines, Aerotec argues in the alternative

that “Honeywell creates an implied tie by making the

purchase of Honeywell’s services an economic imperative.” 

Honeywell achieves the tie, Aerotec alleges, by constraining

the flow of parts to independent servicers via delays on

orders, preferential pricing policies, and withholding of

technical information needed to complete repairs—in other

words, by squeezing third party service providers. As a

consequence, the independent servicers cannot deliver on

airlines’ reasonable expectations for finding a “one-stop

shop” for all of their parts and repair needs. Airlines “learn

the game: if you want parts, you use Honeywell’s repair

services.” But Aerotec’s chain of logic and evidence is too

attenuated to support liability for tying under § 1.

Aerotec contends that a refusal to deal with competitors

may form the basis of a tying claim. Aerotec argues that

Cascade Health supports its “refusal to deal” theory of tying. 

Importantly, however, that case did not dispense with the

need for a tying condition embedded in a tying transaction. 

In Cascade Health, we said little about what constitutes a tie

because it was obvious that there was a tying condition: the

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14 AEROTEC INT’L V. HONEYWELL INT’L

plaintiff alleged, and provided evidence, that the defendant

health care network conditioned insurers’ purchase of tertiary

care services on the purchase of primary and secondary

services. 515 F.3d at 913. Only after briefly passing over the

tying element did the court address the key issue, the coercion

element. At issue was whether coercion was established by

evidence that the defendant “forced insurers either as an

implied condition of dealing or as a matter of economic

imperative through its bundled discounting, to take its

primary and secondary services if the insurers wanted tertiary

services.” Id. at 914.

Nothing in Cascade Health suggests that arguably

manipulative tactics imposed on a third-party competitor are

sufficient by themselves to create a tie with respect to a

separate buyer simply because they make it less desirable to

purchase from the third party. None of our cases postdating

Cascade Health come close to recognizing such a theory,

which echoes a plea for relief on behalf of a competitor, not

for the sake of competition itself. See e.g., Brantley v. NBC

Universal, Inc., 675 F.3d 1192 (9th Cir. 2012) (involving

conditions imposed on the buyer of the tying product);

Blough v. Holland Realty, Inc., 574 F.3d 1084 (9th Cir. 2009)

(same); Rick-Mik Enterprises, Inc. v. Equilon Enterprises,

LLC, 532 F.3d 963 (9th Cir. 2008) (same).

Ultimately, Aerotec’s arguments fall off the rails for lack

of any evidence that airlines were presented with an offer for

the sale of parts that could have been reasonably perceived as

conditioned on refraining from the purchase of parts or

services from any other service provider besides Honeywell. 

The claim that Honeywell clogs and complicates the parts

distribution pipeline to independent servicers cannot

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AEROTEC INT’L V. HONEYWELL INT’L 15

substitute for the necessary evidence of an implied condition

embedded in the sale of the tying product.

B. Section 1 of the Sherman Act—Exclusive Dealing

Aerotec brings a second claim under § 1 of the Sherman

Act, alleging that Honeywell engaged in exclusive dealing,

which is an “agreement between a vendor and a buyer that

prevents the buyer from purchasing a given good from any

other vendor,” and forecloses competition. Allied Orthopedic

Appliances Inc. v. Tyco Health Care Grp. LP, 592 F.3d 991,

996 & n.1 (9th Cir. 2010).2 The agreements for purchase of

repair services from Honeywell by the airlines are the starting

point for our analysis. The record of these contracts,

however, is characterized more by what is missing than what

is there. Aerotec cannot sustain its burden by offering broad

allegations and complaints that are unhinged from any

specific agreement. Nor is there evidence that Honeywell has

a global agreement with all of its customers such that

Aerotec’s failure to pinpoint or analyze specific agreements

can be excused. The devil is in the details. We affirm the

district court’s award of summary judgment on this claim

because an exclusive dealing claim cannot succeed without

evidence of exclusive dealing.

Aerotec has the burden to show that the agreements at

issue foreclosed competition. See id. at 996 n.1 (“[I]n a case

under Section 1 of the Sherman Act, the plaintiff must prove

2

 Because exclusive dealing arrangements provide “well-recognized

economic benefits . . . including the enhancement of interbrand

competition,” we apply the rule of reason rather than a per se analysis. 

Omega Envtl., Inc. v. Gilbarco, Inc., 127 F.3d 1157, 1162 (9thCir. 1997).

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16 AEROTEC INT’L V. HONEYWELL INT’L

that the exclusive dealing arrangement actually foreclosed

competition.”). In analyzing foreclosure, we

weigh the probable effect of the contract on

the relevant area of effective competition,

taking into account the relative strength of the

parties, the proportionate volume of

commerce involved in relation to the total

volume of commerce in the relevant market

area, and the probable immediate and future

effects which pre-emption of that share of the

market might have on effective competition

therein.

Tampa Elec. Co. v. Nashville Coal Co., 365 U.S. 320, 329

(1961). This inquiry requires that we look at the actual terms

of the agreements; indeed, “a prerequisite to any exclusive

dealing claim is an agreement to deal exclusively.” ZF

Meritor, LLC v. Eaton Corp., 696 F.3d 254, 270 (3d Cir.

2012); see also Barr Labs., Inc. v. Abbott Labs., 978 F.2d 98,

110 n.24 (3d Cir. 1992) (acknowledging that the first question

is whether there is an agreement to exclusivity). In doing so,

we typically focus on whether there are requirements terms

(i.e., terms requiring a buyer to purchase all the product or

service it needs from one seller), see Tampa Elec. Co.,

365 U.S. at 322, volume or market share targets, see ZF

Meritor, 696 F.3d at 283, or long-term contracts that prevent

meaningful competition bytaking potential purchasers off the

market, see Omega Envtl., 127 F.3d at 1163–64 (“[T]he short

duration and easy terminability of these agreements negate

substantially their potential to foreclose competition.”). See

generally Areeda & Hovenkamp, supra ¶ 1800a1-3.

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AEROTEC INT’L V. HONEYWELL INT’L 17

Aerotec failed to provide any significant details about the

repair agreements between Honeywell and the airlines. The

only evidence of substance is a declaration from Aerotec that,

pursuant to industry practice, purchasers of repair services

contract for 3–7 years at a time, as well as testimony that

Honeywell gives airline customers a 15 percent discount on

parts. There is no evidence of which customers or how many

of the contracts were for 3–7 years; likewise, there is no

evidence that the discount is an “extreme quantity discount”

that “give[s] a customer a lower price for buying in larger

absolute quantities or a larger proportion of its needs,”

amounting to “de facto” exclusive dealing. Areeda &

Hovenkamp, supra ¶ 1807b2. Nor is there evidence of other

terms that in effect transform these unspecified transactions

into exclusive arrangements.

Aerotec does point to a market analysis that shows that as

much as 47 percent of Honeywell APUs are under some form

of contract for repair with Honeywell, but this figure conveys

no relevant information about the substance of the contracts. 

What are the details? What is the term of the contract? Is it

a spot market contract or a long-term contract? What

restrictions or conditions are imposed on the customer? We

don’t know because Aerotec didn’t tell us, either through

copies of the contracts, analysis of the contract terms, or

expert testimony. It is undisputed that some proportion of

Honeywell’s repair contracts are non-exclusive and

temporally circumscribed, as Honeywell provides single, ondemand repair services on a “time and materials” basis.

Contracts, simpliciter, are not illegal under the Sherman

Act. Indeed, none of the indicia that we would ordinarily

review in an exclusive dealing claim—e.g., requirements

terms, steepmarket-share requirements, contract duration and

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18 AEROTEC INT’L V. HONEYWELL INT’L

other terms—are present in this record. The record simply

does not indicate what proportion of the market is bound up

in long-term contracts at any particular point in time or to

what effect. At this stage of the litigation, after extensive

discovery, Aerotec needed to do something more than offer

conclusory statements and stitch together disparate facts

about the market for repairs; it needed concrete

documentation that Honeywell’s agreements prevented

customers from giving their repair business to other MRO

servicers. The speculation and innuendo offered by Aerotec

cannot substitute for evidence.

Aerotec attempts to redirect attention from the absence of

evidence of the exclusive substance of the agreements by

focusing on Honeywell’s power to force airlines to accept

Honeywell services to the detriment of independent servicers. 

Evidence of Honeywell’s power to induce purchases of

repairs by airlines is certainly relevant under a “de facto”

exclusive dealing theory where we look “past the terms of the

contract to ascertain the relationship between the parties and

the effect of the agreement in the real world.” ZF Meritor,

696 F.3d at 270 (internal quotations omitted); see also

LePage’s Inc. v. 3M, 324 F.3d 141,157 (3d Cir. 2003) (en

banc) (same); United States v. Dentsply Int’l, Inc., 399 F.3d

181, 193 (3d Cir. 2005) (same). In certain limited situations,

discounts and rebates conditioned on a promise of exclusivity

or on purchase of a specified quantity or market share of the

seller’s goods or services may be understood as “de facto”

exclusive dealing contracts because they coerce buyers into

purchasing a substantial amount of their needs from the

seller. Areeda & Hovenkamp, supra ¶ 1807b1-2.

Although we have not explicitly recognized a “de facto”

exclusive dealing theory like that recognized in the Third

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AEROTEC INT’L V. HONEYWELL INT’L 19

Circuit and Eleventh Circuit, see ZF Meritor, 696 F.3d at 282

n.14 (reasoning that an “exclusive dealing claim does not

require a contract that imposes an express exclusivity

obligation”); McWane, Inc. v. FTC, 783 F.3d 814, 833–35

(11th Cir. 2015) (rejecting “formalistic distinctions” between

exclusive dealing contracts and exclusive programs), we need

not reach the issue here because, at bottom, a plaintiff must

still show that contracts that were induced were exclusive

rather than run-of-the-mill contracts, which inevitably

“‘foreclose[]’ or ‘exclude[]’ alternative sellers from some

portion of the market, namely the portion consisting of what

was bought.” Barry Wright Corp. v. ITT Grinnell Corp.,

724 F.2d 227, 236 (1st Cir. 1983). Simply put, a 15 percent

discount on a single sale (or a series of independent sales)

may be enticing enough to “coerce” a purchase in that

instance, but in the absence of any exclusive requirements on

which the discount is conditioned, the sale remains nonexclusive. The “de facto” exclusive dealing theory does not

provide Aerotec an end run around the obligation to first

show that express or implied contractual terms in fact

substantially foreclosed dealing with a competitor for the

same good or service.

A close review of the Third Circuit’s approach also

underscores that the “de facto” exclusive dealing theory is of

no use to Aerotec. In ZF Meritor, for instance, the question

was whether long-term agreements that “did not expressly

require the [purchasers] to meet . . . market penetration

targets . . . were as effective as mandatory purchase

requirements.” 696 F.3d at 282. The court concluded they

were because no buyer could “afford to lose” the seller’s

business, and thus the conditional discounts and unilateral

cancellation provision effectivelycoerced buyers to enter into

contracts with onerous terms, such as five-year commitments. 

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20 AEROTEC INT’L V. HONEYWELL INT’L

Id. at 283. Just as in any exclusive dealing claim, however,

the court first had to be satisfied that specific features of the

agreement required exclusivity. Accordingly, the court

examined the terms of the agreements in detail, focusing on

their duration, the high market-share targets (at least 80

percent and up to 97.5 percent), and other specific terms

granting preferential treatment to the seller in subsequent

sales. Id. at 286–88. The same was true in LePage’s, where

the Third Circuit recognized that extensive “all-or-nothing”

discounts and rebates were not express exclusivity terms, but

still looked to evidence that buyers understood offers as

conditional on the buyerforegoing purchases from competitor

manufacturers of tape, 324 F.3d at 158–59, and in Dentsply,

where the court recognized that a condition of only carrying

the seller’s product imposed in a “series of independent sales”

was sufficient to make the exclusive condition as effective as

if it was articulated in a written contract, 399 F.3d at 193. 

Unlike in those cases, the record here is missing evidence of

contracts, the claimed extra-contractual conditions, or

preferential treatment terms.

II. Section 2 of the Sherman Act

Section 2 of the Sherman Act makes it illegal to

“monopolize . . . any part of the trade or commerce among

the several States.” 15 U.S.C. § 2. For liability to attach, a

defendant must (1) possess monopoly power and (2) use that

power “to foreclose competition, to gain a competitive

advantage, or to destroy a competitor.” Kodak, 504 U.S. at

482–83 (quoting United States v. Griffith, 334 U.S. 100, 107

(1948)). In considering Aerotec’s claims, we assume without

deciding that Honeywell possesses monopoly power in the

market for APU parts.

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AEROTEC INT’L V. HONEYWELL INT’L 21

Aerotec asserts what it describes as “a refusal-todeal/essential-facilities theory,” claiming that refusal is

proved via intent to foreclose competition or through

Honeywell’s control of parts, an essential input. This novel

framing of Aerotec’s § 2 claim is an effort to sidestep the

reality that there was no actual refusal to deal. Instead,

Aerotec attacks Honeywell’s business terms as a “de facto”

refusal that is revealed by Honeywell’s intent to squash

independent firms. Aerotec’s premise runs afoul of longstanding precedent that “as a general matter, the Sherman Act

‘does not restrict the long recognized right of [a] trader or

manufacturer engaged in an entirely private business, freely

to exercise his own independent discretion as to parties with

whom he will deal.’” Verizon Commc’ns Inc. v. Law Offices

of Curtis V. Trinko, LLP, 540 U.S. 398, 408 (2004)

(“Trinko”) (quoting United States v. Colgate & Co., 250 U.S.

300, 307 (1919)). As we noted in MetroNet Services, the

Supreme Court has exercised considerable caution in

recognizing exceptions to this broad principle for three core

reasons: 1) compelled sharing of the resources generating a

competitive advantage undermines the purpose of antitrust

law by reducing incentives to invest in those resources;

2) compelled sharing puts federal courts in the role of central

planners despite their being ill-equipped to assume this role;

and 3) the compelled sharing may actually provide

opportunities for collusion, which is the “‘supreme evil of

antitrust.’” MetroNet Servs. Corp. v. Qwest Corp., 383 F.3d

1124, 1131 (9th Cir. 2004) (quoting Trinko, 540 U.S. at

407–08).

A. Section 2 of the Sherman Act—Refusal to Deal

In light of the Supreme Court’s reluctance to impose a

duty to deal—Trinko declared the Sherman Act as “the

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22 AEROTEC INT’L V. HONEYWELL INT’L

Magna Carta of free enterprise,” 540 U.S. at 415 (internal

quotations omitted)—Aerotec attempts to shoehorn

Honeywell’s alleged conduct (i.e., “withholding of parts and

technical data, onerous payment terms, and pricing

penalties”) into the narrow exception recognized in Aspen

Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585

(1985). In Aspen Skiing, the defendant—who owned three of

the four ski resorts in the market—discontinued a joint liftticket package with a smaller rival, the only other competitor

in the market, and then flatly refused to sell the rival any lift

tickets so it could create its own bundles. 472 U.S. at

592–94. It is no wonder that the Supreme Court

characterized this “limited exception” as “at or near the outer

boundary of § 2 liability.” Trinko, 540 U.S. at 409.

Aspen Skiing offers no relief here. Aerotec simply did not

like the business terms offered by Honeywell, especially after

things began to change in 2007. But this “business pattern”

can hardly be characterized as so onerous as to be tantamount

to the conduct in Aspen Skiing. Aerotec’s vague requested

remedy that we “order Honeywell to provide parts, data, and

prices like it did before 2007,” reveals the problems with

Aerotec’s refusal to deal claim: providing any meaningful

guidance to Honeywell and ordering it to artificially create

pre-2007 market conditions would require the courts to play

precisely the kind of “central plann[ing]” role that courts are

“ill suited” to play. Id. at 408. As the Supreme Court has

repeatedly emphasized, there is “no duty to deal under the

terms and conditions preferred by [a competitor’s] rivals,”

Pac. Bell Tel. Co. v. linkLine Commc’ns, Inc., 555 U.S. 438,

457 (2009); there is only a duty not to refrain from dealing

where the only conceivable rationale or purpose is “to

sacrifice short-term benefits in order to obtain higher profits

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AEROTEC INT’L V. HONEYWELL INT’L 23

in the long run from the exclusion of competition,” MetroNet

Servs., 383 F.3d at 1132.

Sensing the deficiencies in its theory, Aerotec argues that

intent to foreclose competition is sufficient to establish § 2

liability. While it is true that intent is a necessary element of

attempted monopolization, it is not sufficient alone to

establish liability. Competitors are not required to engage in

a lovefest; indeed, “[e]ven an act of pure malice by one

business competitor against another does not, without more,

state a claim under the federal antitrust laws.” Brooke Grp.

Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209,

225 (1993). As the Tenth Circuit noted in rejecting a claim

similar to the one here, “[w]ere intent to harm a competitor

alone the marker of antitrust liability, the law would risk

retarding consumer welfare by deterring vigorous

competition.” Novell, Inc. v. Microsoft Corp., 731 F.3d 1064,

1078 (10th Cir. 2013). By its very terms, § 2 of the Sherman

Act regulates anti-competitive conduct, not merely anticompetitive aspirations or an independent decision on terms

of dealing with a competitor.

B. Section 2 of the Sherman Act—Essential Facilities

The essential facilities doctrine is one of the

circumstances in which plain English and antitrust lingo

converge. This theory is a variation on a refusal to deal

claim. It imposes liability where competitors are denied

access to an input that is deemed essential, or critical, to

competition. See Ferguson v. Greater Pocatello Chamber of

Commerce, Inc., 848 F.2d 976, 983 (9th Cir. 1988). Although

the Supreme Court has never recognized the doctrine, see

Trinko, 540 U.S. at 411, we have continued to treat it as

having a basis in § 2 of the Sherman Act. See MetroNet

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24 AEROTEC INT’L V. HONEYWELL INT’L

Servs., 383 F.3d at 1129; see also Alaska Airlines, Inc. v.

United Airlines, Inc., 948 F.2d 536, 546 (9th Cir. 1991).

To establish a violation of the essential facilities doctrine,

Aerotec must show (1) that Honeywell is a monopolist in

control of an essential facility, (2) that Aerotec, as

Honeywell’s competitor, is unable reasonably or practically

to duplicate the facility, (3) that Honeywell has refused to

provide Aerotec access to the facility, and (4) that it is

feasible for Honeywell to provide such access. MetroNet

Servs., 383 F.3d at 1128–29. Because mandating access, as

the essential facilities doctrine implies, shares the same

concerns as mandating dealing with a competitor, a facility is

essential “only if control of the facility carries with it the

power to eliminate competition in the downstream market.” 

Alaska Airlines, 948 F.2d at 544.

Aerotec reasons that APU parts are the “essential facility”

because, absent parts, “repairs are impossible.” According to

Aerotec, Honeywell uses a variety of tactics to put pressure

on the parts supply chain. As a “smoking gun,” Aerotec

emphasizes an internal Honeywell presentation outlining its

efforts to manage a complex, crowded, competitive

environment by controlling intellectual property, creating

barriers to entry, and managing the supply chain by limiting

parts availability.

Aerotec’s claims fail for an obvious reason—a facility is

only “essential” where it is otherwise unavailable. City of

Anaheim v. S. Cal. Edison Co., 955 F.2d 1373, 1380 (9th Cir.

1992). In addition to substantial purchases of parts from

Honeywell, Aerotec has access to both PMA parts and OEM

aftermarket parts acquired from other servicers. For example,

in 2007 alone, Aerotec purchased $1,074,072 of PMA parts

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AEROTEC INT’L V. HONEYWELL INT’L 25

and $9,347,661 of APU parts from vendors other than

Honeywell (compared with about $9,420,240 in parts from

Honeywell). Although Honeywell’s ordering process may

very well be “Kafkaesque,” as Aerotec believes, and

Honeywell may even provide priority access to certain

customers, Honeywell does not deny Aerotec access to APUs

or their component parts. Trinko teaches that “where access

exists, the [essential facilities] doctrine serves no purpose.” 

540 U.S. at 411.

In sum, there is no evidence that Aerotec is frozen out

of—or even faces a chill in accessing—the parts supply

chain. Thus, “[b]ecause reasonable access to the essential

facility exists—even if not in a way that is conducive to

[Aerotec]’s existing business model—[Aerotec] cannot

establish an essential facilities claim.” MetroNet Servs.,

383 F.3d at 1130.

C. Section 2 of the Sherman Act—Bundled Discounts

Both Honeywell and Aerotec offer bundled parts and

repairs. As we explained in Cascade Health, “[b]undling is

the practice of offering, for a single price, two or more goods

or services that could be sold separately.” 515 F.3d at 894. 

Such bundling practices “generallybenefit buyers because the

discounts allow the buyer to get more for less,” and they also

often “result in savings to the seller because it usually costs

a firm less to sell multiple products to one customer at the

same time than it does to sell the products individually.” Id.

at 895 (citing United States v. Microsoft Corp., 253 F.3d 34,

87 (D.C. Cir. 2001) (per curiam)).

Because “[l]ow prices benefit consumers regardless of

how those prices are set, and so long as they are above

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26 AEROTEC INT’L V. HONEYWELL INT’L

predatory levels,” Atl. Richfield Co. v. USA Petroleum Co.,

495 U.S. 328, 340 (1990), the Supreme Court has cautioned

against recognizing antitrust discounting claims except where

the “prices complained of are below an appropriate measure

of [a] rival’s costs” and where there is a “dangerous

probability” that the pricing firm will be able to “recoup[] its

investment” after it has successfully extinguished its

competitors through artificially low prices. Brooke Grp.,

509 U.S. at 222–24. As the Court has observed,

[T]he costs of erroneous findings of

predatory-pricing liability [are] quite high

because the mechanism by which a firm

engages in predatory pricing—lowering

prices—is the same mechanism by which a

firm stimulates competition, and, therefore,

mistaken findings of liability would chill the

very conduct the antitrust laws are designed to

protect.

Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co.,

Inc., 549 U.S. 312, 320 (2007) (internal citations omitted).

Like the negative tinge sometimes associated with

bundled campaign contributions, Aerotec endeavors to cast

Honeywell’s bundling behavior in a negative light. Despite

the common practice of bundling parts and repairs—routine

practice for both Honeywell and Aerotec—Aerotec claims

that because Honeywell controls the pricing in the parts

market, independent shops cannot compete with Honeywell’s

steep discounts on the bundles. In truth, Honeywell’s

discounts mirror the “lower cost structure” of Honeywell’s

vertical integration, and therefore reflect “competition on the

merits.” Brooke Grp., 509 U.S. at 223.

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AEROTEC INT’L V. HONEYWELL INT’L 27

Aerotec offers no credible evidence that Honeywell prices

repair services below cost. The transaction that Aerotec

claims led to below cost pricing on repairs was a Honeywell

repair bid to Avianca Airlines, which reflected a substantial

discount. Notably, the record does not include Honeywell’s

actual costs of labor and parts for this deal; Aerotec infers

that the prices must be below cost, whatever the costs might

be. Honeywell counters that the Avianca bid is not

comparable to a below-cost bid because it is part of a “Notto-Exceed” (“NTE”) agreement with the customer, wherein

Honeywell agreed to provide repair services and parts for a

price not to exceed a certain amount. Honeywell notes that,

as long as it makes a profit over the course of repeated repair

jobs with any one airline, it is pricing above cost. Honeywell

provided substantial evidence of its “Airline Sales Approval

Process,” through which it analyzes its NTE agreements and

ensures that it sets its bids in the aggregate above cost. 

Honeywell also offered extensive evidence regarding its

positive revenues on the specific contracts Aerotec

challenges. In short, Aerotec’s single example, isolated and

out of context, is insufficient to support a predatory pricing

claim.

Aerotec suggests that it does not matter what Honeywell’s

costs were because the discount on the Avianca bid was so

extreme that, if Aerotec priced repairs at cost, it would have

to offer repairs for less than $0 to compete with Honeywell’s

bundled bid. Aerotec relies on the discount attribution test

from Cascade Health, under which “the full amount of the

discounts given by the defendant on the bundle are allocated

to the competitive product or products” and the “resulting

price of the competitive product or products” is compared to

the “defendant’s incremental cost to produce them.” 

515 F.3d at 906. But the math doesn’t add up here because

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28 AEROTEC INT’L V. HONEYWELL INT’L

the discount attribution test does not apply in circumstances

like this where the parties offer the same bundle of goods and

services.

As Cascade Health made clear, the discount attribution

test only applies where one of the competitors produces fewer

goods or services than the other competitor. See id. at 909

(“[T]he primary anticompetitive danger posed by a multiproduct bundled discount is that such a discount can exclude

a rival who is equally efficient at producing the competitive

product simply because the rival does not sell as many

products as the bundled discounter.” (emphasis added)). It

is the fact that the bundling competitor has exclusive capacity

to “bundle” multiple products and absorb the cost of the total

discount without experiencing a decline in profits that gives

rise to the possibility that it could force out a “hypothetical

equally efficient producer of the competitive product.” Id. at

906; see also Areeda & Hovenkamp, supra ¶ 749a.

Here, Aerotec provides airlines with the same bundle that

Honeywell provides: parts and services. Honeywell’s ability

to offer discounts on its parts when they are bundled with

repair services is not categorically unavailable to Aerotec. 

Aerotec need not sell the parts in its bundled packages for

cost if it is able to provide repair services more efficiently

than Honeywell. Indeed, Aerotec provided evidence that it

can and does outbid Honeywell, despite the fact that it must

acquire parts first. Aerotec claims that it “provides high

qualitycost-effective repairs”: for instance, its “repairs last up

to 24% longer than competitors’, and its prices are 20%

lower.” Aerotec’s effort to invoke the discount attribution

framework yields an absurd result, and one that risks applying

our bundled discount jurisprudence to conduct far afield from

conduct “resembl[ing] the behavior that the Supreme Court

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AEROTEC INT’L V. HONEYWELL INT’L 29

in Brooke Group identified as predatory.” Cascade Health,

515 F.3d at 903.

Without any evidence of below-cost pricing or anticompetitive bundled discounting, Aerotec is left with only an

argument that Honeywell engages in unlawful conduct by

simultaneously charging a low (but above-cost) price for its

repair bundles and raising the wholesale price of replacement

parts to make it difficult or impossible for competitor

servicers to offer similarly low-priced repair bundles. 

Although it disclaims making a “price squeeze claim,” this

argument is foreclosed by the Supreme Court’s decision in

linkLine. In linkLine, the Supreme Court rejected a “pricesqueeze” claim under which independent internet service

providers who purchased inputs from AT&T but also

competed against it in the retail outlet for certain digital

services alleged that AT&T used its market power in the

“upstream,” or wholesale, market to “squeeze its [retail]

competitors by raising the wholesale price of inputs while

cutting its own retail prices.” 555 U.S. at 449. The Court

held that “no such claim may be brought.” Id. at 442. As we

noted in applying linkLine, the case stands for the principle

that “there is no independently cognizable harm to

competition when the wholesale price and the retail price are

independently lawful.” Doe 1 v. Abbott Labs., 571 F.3d 930,

934–35 (9th Cir. 2009). Such is the case here.

III. Robinson-Patman Act—Price Discrimination

Aerotec alleges that Honeywell engages in secondary-line

price discrimination under the Robinson-Patman Act,

15 U.S.C. § 13(a), by giving Honeywell affiliates greater

discounts off catalog price for parts than it provides to

Aerotec and its fellow independent servicers. Secondary-line

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30 AEROTEC INT’L V. HONEYWELL INT’L

price discrimination, which means a seller gives one

purchaser a more favorable price than another, requires

(1) sales in interstate commerce; (2) products of the same

grade and quality; (3) discrimination in price between two

buyers; and (4) injury. See Volvo Trucks N.A., Inc. v. ReederSimco GMC, Inc., 546 U.S. 164, 176–77 (2006). Aerotec’s

claims fail on the third element because the only pricing

discrepancy between independent servicers and Honeywell’s

affiliates documented in any way in the record is attributable

to the benefits received by Honeywell (and its affiliates)

through long-term agreements.3

We start by noting considerable confusion in the briefing

regarding the basis of the price discrimination claim. Aerotec

claims that Honeywell charges independent servicers an

across-the-board 15 percent premium which it does not

impose on affiliates. Not so. All repair servicers, affiliates or

not, are charged the 15 percent premium. In fact, the

15 percent premium is simply a lesser discount: airlines

receive a 50 percent discount off list price, and all

3 Although Honeywell claims that the “in commerce” requirement is

not met because a number of the sales are to foreign airlines or service

centers, it misapprehends the scope of this clause. For starters, a

significant number of Honeywell’s APU sales are to customers for use or

resale in the United States, although the parties have made no effort to fine

tune the documentation or segregate the sales. Because this claim fails on

other grounds, we need not parse the details of whether sales to

international airlines could, in some cases, qualify as sales “for use,

consumption, or resale” within the United States. 15 U.S.C. § 13(a). 

Compare Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp.,

475 U.S. 574, 582 n.6 (1986) (“The Sherman Act does reach conduct

outside our borders, but only when the conduct has an effect on American

commerce.”) with Zoslaw v. MCA Distrib. Corp., 693 F.2d 870, 878 (9th

Cir. 1982) (holding that the “flow of commerce ends when goods reach

their intended destination” (internal quotations omitted)).

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AEROTEC INT’L V. HONEYWELL INT’L 31

servicers—whether affiliated or not—receive a 42.5 percent

discount. The difference between the two discounts is the

source of the 15 percent figure. Honeywell’s tiered pricing

structure therefore cannot serve as the basis of a pricediscrimination claim, at least insofar as Aerotec alleges that

Honeywell affiliates are the favored party.

Aerotec presents another argument for price

discrimination between Honeywell affiliates and independent

servicers—that the long-term contracts Honeywell negotiates

with affiliates contain variable discounts off the price that

independent servicers receive on the spot market. This

argument fails because the contracts are not comparable. 

Unlawful secondary-line price discrimination exists only to

the extent that the differentially priced product or commodity

is sold in a “reasonably comparable” transaction. Tex. Gulf

Sulphur Co. v. J.R. Simplot Co., 418 F.2d 793, 807 (9th Cir.

1969). Quite sensibly, courts have held that “a seller is not

obligated to charge the same prices for a commodity if its

sales contracts with different buyers contain materially

different terms,” as they do when a seller and purchaser

choose the relative stability of a long-term contract over

individual transactions in a “spot market.” Coal. For a Level

Playing Field, LLC v. AutoZone, Inc., 737 F. Supp. 2d 194,

212 (S.D.N.Y. 2010) (citing Coastal Fuels of P.R., Inc. v.

Caribbean Petrol. Corp., 990 F.2d 25, 27 (1st Cir. 1993)).

Aerotec is mistaken in its premise that any transactional

differences are not reflective of materially different terms. 

For example, servicers under an affiliate contract are subject

to substantial obligations that are not imposed on independent

repair shops like Aerotec. These may include payment of

license/royalty fees, maintenance of insurance, exclusive use

of Honeywell parts, and compliance with policies,

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32 AEROTEC INT’L V. HONEYWELL INT’L

regulations, and procedures promulgated by Honeywell. 

Aerotec provided no examples of any spot sales between

independent servicers and Honeywell that could be fairly

compared to the terms and prices that were individually

negotiated in agreements between Honeywell and its

affiliates. As such, its claims for price discrimination fail.

IV. State Law Claims

Although Aerotec brought several claims under Arizona

state law, it acknowledged at oral argument that success on

the state antitrust claims rises and falls with the outcome of

the federal claims. Likewise, Aerotec has been candid that its

tortious interference claims live or die based on its federal

antitrust claims. Because we affirm the district court’s award

of summary judgment in favor of Honeywell on all of

Aerotec’s federal antitrust claims, we likewise affirm the

court’s award of summary judgment on the Arizona antitrust

claims and dismissal of the tort claims.

CONCLUSION

There is no real dispute that Aerotec was a competitor to

Honeywell, albeit a small one, in the APU repair market. But

the antitrust laws require injury to competition, not merely

injury to a competitor. Aerotec’s claims fail both as a matter

of law and because it failed to marshal evidence of genuine

issues of material fact on its tying, exclusive dealing, refusal

to deal, bundled discount, and pricing discrimination claims.

AFFIRMED.

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