## F I L E D United States Court of Appeals Tenth Circuit 

### SEP 10 2002 

### PATRICK FISHER Clerk PUBLISH
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

TELECOR COMMUNICATIONS, INC., an Oklahoma corporation; ADVANCED COMMUNICATIONS, INC., an Oklahoma corporation; COINLINK LLC, an Oklahoma limited liability company; JACK KEELER, d/b/a Americall; KENNETH MERITT, d/b/a Oklahoma Heartland Payphone Services; DON OWENS, d/b/a Owens Communications Company; PAYPHONE PLUS LLC, an Oklahoma limited liability company; REDLANDS COMMUNICATIONS, INC., an Oklahoma corporation; and SOONER TELECOMMUNICATIONS, INC., an Oklahoma corporation; Plaintiffs - Appellees,

v. SOUTHWESTERN BELL TELEPHONE COMPANY, a Missouri corporation, Defendant - Appellant. Nos. 01-6067 and 01-6138

Appeal from the United States District Court for the Western District of Oklahoma. (D.C. No. 98-CV-1249-C)

Donald L. Flexner, Boies, Schiller & Flexner LLP, W ashington D.C. (D. Kent Meyers and Richard C. Ford, Crowe & Dunlevy, Oklaho ma City, OK, Scott E. Gant, Boies, Schiller & Flexner LLP, Washington, D. C., and David A. Barrett,* The Honorable David K. Winder, Senior District Judg e, United States

District Court for the District of Utah, sitting by designation. - 2 - Boies, Schiller & Flexner LLP, New York, NY, with h im on the briefs), for Defendant-Appellant. Robert D. Edinger (Jonathan E. Miller and Linda G. Kaufmann, with him on the briefs), Edinger & Blakley, P.C., Oklahoma City, OK , for Plaintiffs-Appellees.

Before EBEL andKELLY , Circuit Judges, and WINDER , * Senior District Judge.

EBEL , Circuit Judge.

Southwestern Bell Telephone Company appeals from a jury verdict finding it guilty of monopolistic behavior in violation of Oklahoma state law and assessing damages of over $7 million, trebled to ov er $20 million. At issue is Southwestern Bell’s domination of the Oklahoma pay phone market, a market it legally monopolized, under the oversight of the Okl ahoma Corporation Commission (OCC), until November 1996. The plainti ffs are nine independent pay phone service providers whose efforts to compet e with Southwestern Bell succeeded only in whittling down the latter’s marke t share to roughly 80 percent after two years of competition. On appeal, Southwe stern Bell challenges several aspects of the district court’s rulings, most notab ly its definition of the relevant market. While we do not embrace the district court ’s analysis in its entirety, we- 3 -

nevertheless believe that the challenged rulings we re proper, and we therefore
AFFIRM

.

BACKGROUND In the decades up until November 1996, SouthwesternBell enjoyed a legal monopoly over the provision of pay phone services i n the state of Oklahoma. As early as 1990, the Oklahoma legislature had decided to move from monopoly to competition in this market, but it entrusted the implementation of that transition to the OCC, which failed to end Southwestern Bell’s monopoly until passage of the 1996 Telecommunications Act, 47 U.S.C. § 276(b) , forced its hand. After a four-month rulemaking proceeding, the OCC authorize d new pay phone providers in November 1996, subject to certain regulatory req uirements. Pay phone service providers (“PSPs”) such as Southw estern Bell and the Plaintiffs typically do not own the land on which t he pay phones are located. Rather, they make a deal with the party that owns t he land (“location owner”): the PSP gets permission to place the pay phone on the l ocation, and in exchange the location owner gets a commission, typically a perce ntage of the phone’s receipts. The Plaintiffs’ evidence at trial showed that, prio r to the Oklahoma legislature’s 1990 decision to end its pay phone mo nopoly, Southwestern Bell had projected that it would lose 77 percent of its pay phone revenues in the first year1 According to one witness, early termination fees c ould be as high as

$7,200 on a location that might be paying the locat ion owner only about $200 a year in commissions.

2 By way of further example, many of Southwestern Be ll’s contracts called for a 50% reduction in the commissions payable by S outhwestern Bell to the location owner if the location owner allowed compet itive pay phones on its location alongside Southwestern Bell’s pay phones. This was tantamount to precluding competitive pay phones because, in the u nlikely event that the (continued...) - 4 - of open competition. (The facts discussed here wer e disputed at trial and are presented in the light most favorable to the Plaint iffs.) In response, in 1991 Southwestern Bell undertook an intentional campaign to make entry into the Oklahoma pay phone market more difficult by attempt ing to secure every possible pay phone location through long-term contracts betw een Southwestern Bell and the location owners. This “lock up” campaign conti nued through 1996 and accelerated dramatically with what Southwestern Bel l termed “the Blitz” in 1995- 96 on the eve of the coming of competition. The contracts contained several provisions designedto freeze out Southwestern Bell’s competitors, including automati c renewal terms and stiff penalties for early termination. 1 In addition to the lock up, Southwestern Bell employed several other measures to freeze out compe tition, including erecting a bureaucratic maze to discourage location owners who tried to terminate their contract, failing to remove its pay phones when req uested to do so, and damaging the pay phone location when removing a phone. 22 (...continued)

additional phones would increase total revenues forthat location (there was evidence that Southwestern Bell would usually alrea dy have placed the optimal number of phones at a given location), the location owner would receive a much smaller percentage of those revenues. The damage S outhwestern Bell did to the property when withdrawing its phones also made the property less attractive to providers of competitive pay phones. - 5 - Southwestern Bell’s anti-competitive actions were h ighly successful. Although its competitors offered better commissions to location owners and better phones at cheaper rates to customers, at the end of the second year of competition Southwestern Bell retained more than 87 percent of the market, with no single competitor above 2.4 percent. The Plaintiffs filed suit against Southwestern Bell claiming violations of federal and state antitrust law. The district court issued four different written decisions, two pre-trial and two post-verdict. The first order, filed March 1, 2000, dealt with the relevant product market pursua nt to cross-motions for summary judgment. The Plaintiffs argued that the r elevant market was the provision of pay phone facilities and services to l ocation owners. Southwestern Bell argued that the product market should be evalu ated from the viewpoint of the end-user of the phone services and should therefore include both pay phones and cell phones, which Southwestern Bell argued were re asonably interchangeable at the end-user level. The district court did not add ress whether the market should be evaluated at the level of the location owners orat the level of the end-users,- 6 -

but it did rule that pay phones and cell phones wer e not reasonably interchangeable, and thus, that the market should b e limited to pay phones. Ultimately, the jury instructions submitted by the district court defined the relevant market simply as “the provision of pay pho ne and pay phone related services” without differentiating whether it should be evaluated at the level of the location owners or at the level of the end-users. Southwestern Bell does not claim to have objected to this instruction, so it i s clear that the parties allowed the jury to determine which set of customers should be used in evaluating monopoly
power. The second order, filed March 23, 2000, addressed v arious motions in limine, none at issue on appeal. The third order, filed January 31, 2001 (after the jury found Southwestern Bell liable for state antit rust violations but not liable for federal antitrust violations), rejected Southwester n Bell’s motion for a new trial on the issue of damages. The central contention ad dressed in that order was whether the damages awarded were based improperly o n anticipated future illegal conduct. The fourth order, also filed January 31, 2001, rejected Southwestern Bell’s motion for judgment as a matter of law or ne w trial. That motion argued, inter alia, that the jury improperly was allowed to consider Southwestern Bell’s lobbying efforts before the OCC and its pre-Novembe r 1996 conduct, that the verdict failed to account for the temporary contrac tual nature of Southwestern- 7 -

Bell’s market power, and that the verdict violated the state action doctrine. Southwestern Bell appeals the district court’s reso lution of all of these issues.

DISCUSSION The district court had jurisdiction over the federa l antitrust claims pursuant to 28 U.S.C. § 1337 and over the state antitrust cl aims pursuant to 28 U.S.C. § 1367. We have jurisdiction under 28 U.S.C. § 129 1.

A. Relevant Product Market The first step in analyzing a monopoly claim is to define the relevant market in which the defendant was operating. See Full Draw Prods. v Easton Sports, Inc. , 182 F.3d 745, 756 (10th Cir. 1999); SCFC ILC, Inc . v. Visa USA,
Inc. , 36 F.3d 958, 966 (10th Cir. 1994). The relevant market inquiry has two components: geographic market and product market. Full Draw Prods. , 182 F.3d at 756. Only the latter is at issue in this appeal . Southwestern Bell contends that the relevant product market should include cell pho nes as well as pay phones, while the Plaintiffs argue that the market is limit ed to pay phones. The parties’ underlying interests in this regard are conflicting : Southwestern Bell wishes to define the market as broadly as possible (which wou ld make it more difficult for a jury to find that it exercised monopoly power), and the Plaintiffs wish to define- 8 -

the market as narrowly as possible (which would mak e it easier to find monopoly power). The parties filed cross-motions for summary judgment on market definition, and the court granted the Plaintiffs’ m otion, ruling that cell phones were not part of the relevant market. We have previously explained the relevant product m arket analysis as follows: The market power query begins with the determinatio n of the relevant market, that is, a market relevant to the legal issue before the court. The market which one must study to determine when a producer has monopoly power will vary with the part of comme rce under consideration. The tests are constant. That marke t is composed of products that have reasonable interchangeability fo r the purposes for which they are produced--price, use and qualities c onsidered. We also look to the geographic reach of the group of sales or sellers to determine the relevant market. Further, because th e ability of consumers to turn to other suppliers restrains a fi rm from raising prices above the competitive level, the definition of the relevant market rests on a determination of available substitutes. To define a market in product and geographic terms is to say that if prices were appreciably raised or volum e appreciably curtailed for the product within a give n area, while demand held constant, supply from other sourc es could not be expected to enter promptly enough and in large enough amounts to restore the old price and volume

. Although these concepts provide a shorthand for rul e of reason analysis, we would be amiss to imply their applicat ion is necessarily facile. Each may be problematic: There is no subject in antitrust law more confusing than market definition. One reason is that the concept, e ven in the pristine formulation of economists, is deliberately an attempt to oversimplify--for working purposes--the very- 9 - complex economic interactions between a number of differently situated buyers and sellers, each of wh om in reality has different costs, needs, and substitutes

. . . . By defining the relevant market, however, we identi fy the firms that compete with each other. Plugged into the market po wer inquiry, we may then determine whether the alleged anticompetit ive activity restrained trade, that is, raised price or reduced output. SCFC ILC, Inc. , 36 F.3d at 966 (internal quotation marks, citatio ns, and alterations omitted). It is well settled that defi ning the relevant market is an issue of fact, Westman Comm’n Co. v. Hobart Int’l, Inc. , 796 F.2d 1216, 1220 (10th Cir. 1986), but we review the district court’s gran t of summary judgment on that issue de novo. Simms v. Okla. ex rel. Dep’t of Men tal Health & Substance Abuse
Servs. , 165 F.3d 1321, 1326 (10th Cir. 1999). Most of the district court’s discussion of the rele vant product market issue was devoted to explaining why Southwestern Bell’s s ubmissions on this issue (arguing that the relevant market included cell pho nes) were unpersuasive. However, although the inadequacies of Southwestern Bell’s relevant market evidence do support the district court’s denial of Southwestern Bell’s motion for summary judgment on the relevant market issue (whic h denial Southwestern Bell does not challenge on appeal), they do not support the court’s grant of summary judgment on the issue in favor of the Plaintiffs. Because the Plaintiffs had the burden of proof on the relevant market issue, Tarab ishi v. McAlester Reg’l Hosp. , 951 F.2d 1558, 1569 n.15 (10th Cir. 1991), the Plai ntiffs were obligated to make- 10 -

an affirmative showing of their proposed relevant m arket sufficient to sustain a reasonable jury finding. See McKnight v. Kimberly Clark Corp. , 149 F.3d 1125, 1128 (10th Cir. 1998) (“[W]here the nonmoving partywill bear the burden of proof at trial on a dispositive issue, that party m ust go beyond the pleadings and designate specific facts so as to make a showing su fficient to establish the existence of an element essential to that party’s c ase in order to survive summary judgment.” (internal quotation marks omitted)). The district court’s belief that the Plaintiffs had satisfied their burden was based on its view that certain consumers would not purchase cell phones no matter how much Southwestern Bell raised the rates for pay phone services. We do not believe that such an assertion, even assumed to be true, justifies excluding cell phones from the relevant product market (assum ing for the moment that the product market has to be evaluated at the end-user level). The basic relevant product market test is “reasonab le interchangeability.” SCFC, 36 F.3d at 966. Interchangeability may be measure d by, and is substantially synonymous with, cross-elasticity. B rown Shoe Co. v. United
States , 370 U.S. 294, 325 (1962); Westman Comm’n Co. , 796 F.2d at 1221. A market is elastic if demand goes down as price goes up. A market is cross-elastic if rising prices for product A cause consumers to switch to product B

.- 11 -

The district court held that, because “common sense ” suggests that there exist some people (namely, poor people who use pay phones bec ause they have no phone service at home or work) who would not switchto cell phones if pay phone prices increased, therefore Southwestern Bell’s def inition of the relevant product market to include cell phones was illogical. The p roblem with that reasoning is that neither the court below nor the parties on app eal cite anything in the record to support a conclusion that the number of “non-cro ss-elastic” pay phone users was significant enough to render the market as a wh ole non-cross-elastic. (Indeed, neither the court below nor the parties in the briefing point to anything in the record to support the district court’s conclusi on that non-cross-elastic pay phone users exist at all, although surely some must .) Thus, this is not a case where the summary judgment movant (the Plaintiffs) alleged record-supported facts which the non-movant (Southwestern Bell) fail ed to rebut. Therefore, the district court’s belief that there a re non-cross-elastic pay phone users does not provide a sufficient basis forgranting summary judgment in favor of the Plaintiffs as to the scope of the rele vant market. The remainder of the district court’s stated basis for its ruling is equally unavailing: [A]lthough cell phones and pay phones perform simil ar functions, these items are not reasonably interchangeable. Local ca lls may be made on a pay phone for approximately thirty-five cents. A pay phone user does not need to make the financial or contractual commi tment associated with cellular telephone service. A pay phone is st ationary and available- 12 -

to anyone in the vicinity. In contrast, a cell pho ne is available only to those in possession of such equipment. Reasonable interchangeability does not depend upon product similarity, a point well summarized in the ABA’s treatise on antitrust law:

Many courts have addressed the situation where two or more products or services have similar functions but dif ferent physical characteristics. These cases make clear that the r elevant inquiry remains whether the differences in type render the products poor substitutes and that the resolution of this questio n depends on the evidence in the case. In du Pont , for example, the Court concluded that all flexible wrappings belonged in the same market, notwithstanding differences in burst strength, gas permeability, gr ease resistance, and other factors. The Court based its conclusion upon the extensive competition that existed between cellophane and oth er pliable wrappings, despite cellophane’s physical advantages

. 1 ABA Section of Antitrust Law, Antitrust Law Devel opments 508 (4th ed. 1997). Although the product differences cited by the courtbelow are all reasons that the jury might rely upon were it to find that the relev ant market did not include cell phones, we cannot agree that such differences suppo rt summary judgment on this factual issue. However, regardless of the interchangeability of pay phones and cell phones at the end-user level, there is no doubt that pay phones and cell phones are not interchangeable at the location-owner level, an d that is the level where the Plaintiffs argued that Southwestern Bell has monopo lized competition. In other words, the Plaintiffs argue that Southwestern Bell’ s interchangeability argument is wrongly directed at showing that cell phones and pay phones are- 13 -

interchangeable for end-users, but that is not the market where the Plaintiffs are complaining of Southwestern Bell’s anti-competitive behavior. Rather, it is the location owners who define the market where the ant i-competitive behavior took place – that is, the Plaintiff’s claim that they co mpete with Southwestern Bell for locations upon which to place their pay phones, and that is the market Southwestern Bell has monopolized. Southwestern Bell insists that, despite the fact th at it competes with the Plaintiffs in supplying pay phones to location owne rs, the end-user market for telephone services must still be considered. In support of this assertion, Southwestern Bell first argues that “market power m ust be identified from [the consumer’s] perspective.” The only support Southwe stern Bell offers for this assertion is United States v. E.I. du Pont de Nemou rs & Co. , 351 U.S. 377 (1956). But du Pontdoes not support the proposition for which it is c ited; the Court there merely stated that “[i]n considering what is the re levant market for determining the control of price and competition, no more defin ite rule can be declared than that commodities reasonably interchangeable by cons umers for the same purposes make up that part of the trade or commerce, monopol ization of which may be illegal.” Id. at 395 (internal quotation marks omitted). The re ference to consumers makes perfect sense in du Pontgiven that the market at issue (sale of cellophane wrap and other flexible wrappings) indis putably was a consumer3 The contracts themselves do not establish whether Southwestern Bell is

more properly viewed as the buyer or seller, provid ing simply that the location owner, in exchange for prescribed commission payments, “hereby grants SWBT the right to install and maintain SWBT public pay t elephone(s) and associated equipment . . . at the location specified herein,” and that the phone remains the property of Southwestern Bell during the contract p eriod.

4 “Monopsony” is a “condition of the market in which there is but one buyer for a particular commodity.” Black’s Law Dic tionary 1007 (6th ed. 1990). - 14 - market. Although Southwestern Bell is correct thatantitrust laws were “especially intended to serve consumers,” that hard ly suffices to prove that a monopolist may act with impunity so long as end-use consumer prices are unaffected. And, in any event, the Plaintiffs’ ant itrust theory was that the location owners were consumers of the placement of pay phone facilities on their locations, and that the price for such location pla cements was affected by Southwestern Bell’s monopolistic conduct. Southwestern Bell also argues that the relevant mar ket should include the end-user market (and thus include cell phones) beca use pay phone service providers like Southwestern Bell are properly viewe d as buyers rather than sellers in their relationships to location owners. That is , Southwestern Bell argues that the location owners are not “customers” of Southwes tern Bell at all; Southwestern Bell argues that it is the customer of the location owners. 3 Thus, Southwestern Bell attempts to characterize th is action as a “monopsony” claim. 4 A monopsony, Southwestern Bell argues, is not act ionable5 As stated earlier, at least on this record, the Pl aintiffs have not yet

demonstrated that cell phones and pay phones are no t reasonably interchangeable at the end-user level. - 15 - unless it “injure[s] consumers by forcing up the pr ice of the end product. Where the risk of that happening is slight or nonexistent , however, monopsony power per se does not create an antitrust concern.” Kamine/Besicorp Allegany L.P. v. Rochester Gas & Elec. Corp. , 908 F. Supp. 1194, 1203 (W.D.N.Y. 1995) . Thus, because the end-users’ ability to switch from pay p hones to cell phones prevented them from being harmed by Southwestern Bell’s monop sony, 5 Southwestern Bell contends that its conduct is not actionable. On its merits, Southwestern Bell’s monopsony argume nt is unpersuasive. The Supreme Court’s treatment of monopsony cases strongly suggests that suppliers (under Southwestern Bell’s theory of the market, the location owners) are protected by antitrust laws even when the anti- competitive activity does not harm end-users. In its leading monopsony case, the Supreme Court stated: It is clear that the [anti-competitive buyer’s pric e-fixing] agreement is the sort of combination condemned by the [Sherman] Act, eve n though the price-fixing was by purchasers, and the persons specially injured under the treble damage claim are sellers, not customers or consumers.

. . . . The statute does not confine its protection to cons umers, or to purchasers, or to competitors, or to sellers. Nor does it immunize the outlawed acts because they are done by any of these . The Act is comprehensive in its terms and coverage, protecting all who are made- 16 -

victims of the forbidden practices by whomever theymay be perpetrated. Mandeville Island Farms, Inc. v. American Crystal S ugar Co. , 334 U.S. 219, 235- 36 (1948) (citations omitted). In Mandeville Islan d Farms , the Court held that the plaintiff sugar beet growers had stated a valid mon opsony claim under § 2 of the Sherman Act against a sugar beet buyer who colluded with other buyers to pay uniform prices for beets. Significantly, as the tw o dissenting justices observed, the plaintiffs’ complaint did not allege that the d efendants’ actions affected enduser prices. Id. at 247-48 (Jackson, J., dissenting). Tenth Circuit case law also appears to reject the n otion that a monopsony plaintiff must prove end-user impact. In Reazin v. Blue Cross & Blue Shield of Kansas, Inc. , 899 F.2d 951 (10th Cir. 1990), we rejected a mono psony defendant’s argument that injury to sellers without injury to e nd-users is not cognizable antitrust injury. Id. at 962; cf. Union Carbide & Carbon Corp. v. Nisley , 300 F.2d 561, 579-80 (10th Cir. 1961) (“[T]he prolonged exis tence of a price-fixing conspiracy [by buyers] in an integrated industry su ch as ours is proof of damages to those [parties] whose prices are directly affect ed thereby. In that respect, our case is noticeably akin to Mandeville Island Farms v. American Crystal Sugar , 334 U.S. 219.”). This approach is consistent with the case law of other circuits.
See Khan v. State Oil Co. , 93 F.3d 1358, 1361 (7th Cir. 1996) (Posner, J.) ( “This is a form of monopsony pricing, which is analytical ly the same as monopoly or- 17 -

cartel pricing and so treated by the law. E.g. , Mandeville Island. . . .” (dicta)), vacated on other grounds , 522 U.S. 3 (1997); United States v. Syufy Enters. , 903 F.2d 659, 663 (9th Cir. 1990) (“[I]t is theoretical ly possible to have a middleman who is a monopolist upstream but not downstream . . . .”). An especially insightful analysis of relevant marke t analysis in monopsony cases comes from the Second Circuit. In Todd v. Ex xon Corp. , 275 F.3d 191 (2d Cir. 2001), the plaintiffs were managerial, profess ional, and technical employees who brought a Sherman Act § 1 suit against fourteenmajor oil companies, alleging that the companies shared information abou t, and thereby artificially depressed, the salaries paid to such classes of emp loyees. Id. at 195. The relevant market issue in Toddwas slightly different than that at issue here, bu t the language used by the court in addressing that issue is directly relevant here. In Todd , the district court had held that the market propo sed by the plaintiffs was over-inclusive to the extent that the plaintiffs ha d failed to show that the various types of employees within the asserted relevant mar ket (accountants, lawyers, engineers, etc.) were interchangeable with one anot her. Id. at 201. The Second Circuit rejected this conclusion: [T]he market is not the market of competing sellers [the employees selling their services] but of competing buyers [th e companies buying these services]. This market is comprised of buyer s who are seen by sellers as being reasonably good substitutes. A gr eater availability of substitute buyers indicates a smaller quantum of ma rket power on the part of the buyers in question.- 18 -

. . . . Plaintiff is right to urge that the proper focus is . . . the commonality and interchangeability of the buyers, n ot the commonality or interchangeability of the sellers. The question is not the interchangeability of, for example, lawyers with engine ers. At issue is the interchangeability, from the perspective of a [ managerial, professional, or technical] employee, of a job oppo rtunity in the oil industry with, for example, one in the pharmaceutic al industry. Id. at 202 (citations omitted). Opinions from other courts, as well as the writings of economists, reinforce this view. As Judge Wald summarized in a dissentin g opinion: The Supreme Court has clearly held that antitrust l aws apply not only to restraints on outputmarkets, but to inputmarkets as well, including both labor, [citation omitted], and input commoditi es, e.g. , [Mandeville Island Farms ] (sugar refiners' agreement to fix input prices pa id for sugar beets violates Sherman Act, which “does not c onfine its protection to consumers, or to purchasers, or to co mpetitors, or to sellers” but instead “is comprehensive in its terms and coverage, protecting all who are made victims of the forbidde n practices by whomever they may be perpetrated”). See also United States v. SoconyVacuum Oil Co. , 310 U.S. 150, 223 (1940) (Sherman Act prohibits any “combination formed for the purpose and with the ef fect of raising, depressing, fixing, pegging, or stabilizing the pri ce of a commodity” and agreements to make “purchases [of inputs] at orunder the market are one species of [unlawful] price-fixing”); Ameri can Tobacco Co. v. United States , 328 U.S. 781 (1946) (applying antitrust law to restraints on input market for tobacco as well as output marke t for tobacco products); Swift & Co. v. United States , 196 U.S. 375 (1905) (same, for livestock inputs and meat outputs). Cf. National Macaroni Mfr's Ass'n v. Federal Trade Comm'n, 345 F.2d 421, 426 (7th Cir.1965) (purpose and effect of agreement to fix composition of macar oni product was to depress input price of semolina, thereby violating Sherman Act). Economists too have long recognized that market ine fficiencies created by anticompetitive restraints on input mark ets can be as destructive of a free market economy (and therefore ultimately damaging to consumers) as restraints on output mark ets. See, e.g. ,- 19 -

ROGER D. BLAIR & JEFFREY L. HARRISON, MONOPSONY 36- 43 (1993); see also Mandeville Farms , 334 U.S. at 241-44 (describing how restraints on input market adversely affect output market). While antitrust prosecutions for restraints on input mark ets are relatively rare, this is explained by the fact that restraints on input markets arise only in the unusual circumstance of an effective monopso ny--a single purchaser, or a group of purchasers acting in concert. And monopsony in turn arises only when the resource is uniquely valuable in its current use, so that even if the price is depressed by monopsony, sellers are unable to find alternative buyers. RICHARD A. POSN ER & FRANK H. EASTERBROOK, ANTITRUST 150 (1981) (monopsony canarise when “resources hav[e] substantially greater value in some uses than in others” so the “sole purchaser . . . will . . . be able to force the [seller] . . . to accept a monopsony price”); BLAIR & HARRIS ON, supra, at 43- 44 (inelasticity of supply facilitates collusive mo nopsony). Thus, for example, in the Mandeville Island Farms case, the sugar refiners’ monopsonistic price-fixing scheme was effective bec ause growers could not easily find other buyers or profitably switch t o other crops when refiners conspired to fix the price of sugar beets. See 334 U.S. at 240- 42. Nonetheless, according to the economists, ther e is a dead-weight loss associated with imposition of monopsony pricin g restraints. Some producers will either produce less or cease product ion altogether, resulting in less-than-optimal output of the produc t or service, and over the long run higher consumer prices, reduced produc t quality, or substitution of less efficient alternative products

. See, e.g. , HERBERT HOVENKAMP, ECONOMICS AND FEDERAL ANTITRUST LAW § 1.2, at 17-18 (1985); BLAIR & HARRISON, supra, at 42-43, 72. So, even proceeding from the premise that antitrust law s aim only at protecting consumers, monopsonies fall under antitrust purview because monopsonistic practices will eventually adversely a ffect consumers. Brown v. Pro Football, Inc. , 50 F.3d 1041, 1061 (D.C. Cir. 1995) (Wald, J., dissenting) (emphasis omitted), aff’d , 518 U.S. 231 (1996). The two district court cases cited by Southwestern Bell – both of wh ich contain language suggesting that harm to end-users is at least a rel evant consideration in determining whether a monopsony is actionable underantitrust law, see- 20 -

Kamine/Besicorp Allegany L.P. , 908 F. Supp. at 1203 (stating that, where there i s little risk that monopsony “can injure consumers byforcing up the price of the end product . . . monopsony power per se does not create an antitrust concern”); Addamax Corp. v. Open Software Found., Inc. , 888 F. Supp. 274, 280 (D. Mass. 1995) (noting that “[o]nly with control of a downst ream market can the monopsonist decrease output and raise prices”) – are inadequate to overcome the unmistakable import of the case law cited above. Accordingly, we affirm the district court’s summaryjudgment ruling excluding cellular phones from the relevant market definition. Location owners are the relevant customers for purposes of locating Southwestern Bell’s pay phone facilities, and from the location owners’ per spective, cellular phone services and pay phone services are not interchange able.

B. Noerr-Pennington Doctrine The district court allowed the Plaintiffs to introd uce evidence regarding allegedly misleading statements that Southwestern B ell made to the OCC. Southwestern Bell argues that admission of such evi dence violated its First Amendment right to petition the government, as embo died in the NoerrPenningtondoctrine. See United Mine Workers of Am. v. Pennington , 381 U.S. 657 (1965); Eastern R.R. Presidents Conference v. N oerr Motor Freight, Inc. , 365- 21 -

U.S. 127 (1961). The district court held, and the Plaintiffs argue on appeal, that the evidence was admissible because it was offered, not for the improper purpose of showing that Southwestern Bell violated antitrus t laws by misleading the OCC, but rather for the proper purpose of supporting the claim that Southwestern Bell acted for an improper monopolistic purpose (namely, showing that the precompetition campaign to lock up the market in long- term contracts was done for monopolistic purposes). We conclude that the distr ict court’s admission of the evidence was not an abuse of discretion. See U.S. Football League v. Nat’l Football League , 842 F.2d 1335, 1374 (2d Cir. 1988) (reviewing adm issibility of evidence under Noerr-Penningtondoctrine for abuse of discretion). The Plaintiffs argued to the jury at trial that Sou thwestern Bell, upon realizing that competition was coming soon, engaged in an all-out effort (referred to as the “Blitz”) to lock as many location owners as possible into multi-year, automatically renewing contracts with unreasonable termination fees. Southwestern Bell argued that the Blitz was unrelat ed to the coming of competition, and was instead merely an effort to ta ke advantage of new federal regulations allowing pay phone service providers to choose the long distance provider for the pay phone (“PIC rights”). The OCC , the state agency responsible for pay phone operations, considered ordering a “fr esh look” rule that would have given location owners a window of time in which to void their existing contracts- 22 -

with Southwestern Bell in order to enter into a con tract with another pay phone service provider. The state attorney general suppo rted the fresh start, viewing it as an efficient alternative to fact-finding to dete rmine whether Southwestern Bell was moving to lock up location owners in long term contracts. Ultimately, the OCC decided against the fresh look, but during the course of its deliberations it submitted the following int errogatory to Southwestern Bell: “Please state whether Southwestern Bell Telephone i s attempting to get all current pay-phone customers to sign a new contract. If so please state the reason.” Southwestern Bell replied “No. . . . Southwestern B ell is not attempting to obtain new contracts from all site owners that are current ly under contract, nor is Southwestern Bell attempting to obtain contracts fr om all site owners with whom Southwestern Bell does not have a current contract. ” In a draft answer to this question not submitted to the OCC, Southwestern Bel l had drafted “Southwestern Bell Telephone has strived to secure a contract on all pay phones since 1988.” The draft answer went on to say that Southwestern B ell’s motivation to obtain long-term contracts was to enable it “to secure the placement long enough to protect the large investment.” Southwestern Bell’s cross-examination of the witness through whom this evidence was presented (R ick Chamberlain, formerly of the Oklahoma Attorney General’s office) suggests that its position was that it was not then “attempting” to get “all” customers to sign a new contract, as some- 23 -

of its existing customers already under contract we re not contacted during the “Blitz.” In addition to objecting to the admission of the interrogatory response, Southwestern Bell argues generally that Chamberlain ’s testimony improperly allowed the jury to consider the fact that Southwes tern Bell opposed the fresh look proposal. The Noerr-Penningtondoctrine is rooted in the First Amendment. As we have explained previously, “the Noerr-Penningtondoctrine provides general immunity from antitrust liability under the Sherman Act to private parties who petition the government for redress of grievances, notwithstanding the anticompetitive purpose or consequences of their petiti ons.” Cardtoons, L.C. v. Major League Baseball Players Assoc. , 208 F.3d 885, 894 (10th Cir. 2000) (en banc). However, Noerr-Penningtondoes not bar the introduction of all evidence within its scope, as the Supreme Court recognized i n footnote three of its Penningtondecision: “It would of course still be within the province of the trial judge to admit this evidence, if he deemed it probative and not unduly prejudicial . . . if it tends reasonably to show th e purpose and character of the particular transactions under scrutiny.” 381 U.S. at 670 n.3. Southwestern Bell argued to the trial court prior t o introduction of this evidence that, under the Noerr-Penningtondoctrine, “what we told the Corporation Commission can’t support any inference in the case and ought not- 24 -

come in at all.” The district court rejected this argument, expressly relying on Penningtonfootnote three. After cross-examining Chamberlain , Southwestern Bell requested, and the court immediately issued ov er the Plaintiffs’ objection, the following cautionary instruction to the jury:

Every citizen, including the plaintiffs and Southwe stern Bell, has a right under the Constitution to petition the gove rnment and be heard on issues pertaining to rule-making proceedings lik e that at the Corporation Commission. The exercise of that rightis immune from scrutiny under the antitrust laws. Therefore, I in struct you that Southwestern Bell Telephone Company’s exercise of i t[s] right to petition by participating in rule-making proceeding s and advocating any position it chose at the Oklahoma Corporation Commi ssion did not violate the antitrust laws. Later, the jury was instructed without objection th at it may consider the purpose or intent of the anti-competitive act (i.e., the lo ck up efforts), and its pretextual nature, in assessing its legality. Further, the ju ry was specifically reminded per jury instruction that Southwestern Bell’s communications with the OCC “did not violate the antitrust laws,” but that “you may cons ider this evidence if you find it tends to show the purpose and character of the tran sactions under scrutiny.” Southwestern Bell argues that introduction of the e vidence from the OCC proceedings violated the Noerr-Penningtondoctrine because it was offered for the sole purpose of convincing the jury to find an anti trust violation based on Southwestern Bell’s interactions with the OCC. The Plaintiffs counter that the evidence was not offered to establish monopolistic liability based upon- 25 -

Southwestern Bell’s interactions with the OCC, but rather to show that the “purpose” of the Blitz was to stifle competition, a nd that the explanation Southwestern Bell offered at trial (that the “Blitz ” was to secure PIC rights) was pretextual. The Plaintiffs argue: In its opening statement and throughout trial, SWBT attempted to convince the jury that the Blitz was intended to se cure ‘PIC’ long distance rights, not to preempt competition as Plai ntiffs alleged. But SWBT’s response to the OCC’s factual inquiry does n ot contain any ‘PIC’ rights explanation for the Blitz. It also co ntradicted a ‘draft’ response in which SWBT admitted it had been attempt ing to get all its customers under contract for years. Finally, it co ntradicted testimony from SWBT management that, on the eve of competitio n, SWBT sent contract solicitation letters to all of its Oklahom a customers not already under contract. SWBT’s response (and other evidenc e) proved SWBT’s ‘PIC’ rights justification was pretextual, and the true purpose of the Blitz was predatory. Restated, the Plaintiffs’ “purpose” rationale for t he use of this evidence is that, if the true impetus for the Blitz had been to secure P IC rights, Southwestern Bell would not have submitted a misleading response to the OCC interrogatory. Because the draft response suggests that Southweste rn Bell was willing to disclose one innocent explanation for its contracti ng, the argument goes, it follows that Southwestern Bell also would have reli ed on the innocent PIC explanation if that had been a motivating factor, a nd the fact that it did not do so tends to prove that the PIC theory was a post-hoc p retext. This rationale for the evidence’s admission falls within the scope of Penn ington ’s footnote three. Whether or not the jury would have found the eviden ce persuasive on this point,6 Southwestern Bell’s challenges to the other aspect s of Chamberlain’s

testimony fall flat, as the only testimony potentia lly problematic under NoerrPennington– the fact that Southwestern Bell opposed the fres h look proposal – was elicited by Southwestern Bell during cross-exam ination. See Whiteley v. OKC Corp. , 719 F.2d 1051, 1055 (10th Cir. 1983). - 26 - such an inference certainly would have been permiss ible. Assuming that there is some proper purpose for admi tting Southwestern Bell’s interrogatory response and draft response (a long with testimony regarding the context of that exchange), Southwestern Bell ar gues that the evidence still was inadmissible under Penningtonfootnote three because the probative value did not outweigh the prejudice. We disagree. In light of the legitimate purpose underlying the evidence’s admission and the caution ary jury instruction given by the district court, admission of the evidence was n ot an abuse of discretion. 6

C. State Action Doctrine Southwestern Bell argues that “the state action doc trine (or analogous principles of state law) bars any use of SWBT’s pre -November 1996 contracts to prove antitrust violations.” The district court re jected Southwestern Bell’s state action arguments on the ground that the doctrine ap plies only to federal antitrust claims, not state antitrust claims for which Southw estern Bell was found liable here. State action immunity is a question of law, which we review de novo. See Trigen-Okla. City Energy Corp. v. Okla. Gas & Elec. Co. , 244 F.3d 1220, 1225- 27 -

(10th Cir.), cert. denied , 122 S. Ct. 459 (2001). The Supreme Court has stated in the antitrust context that “state-action immunity i s disfavored, much as are repeals by implication.” FTC v. Ticor Title Ins. Co. , 504 U.S. 621, 623 (1992). We decline to address whether the state action doct rine applies to state antitrust claims. Even assuming that it does, the doctrine’s requirements are not met under the circumstances of this case. Private parties regulated by the state must show two elements in order to demonstrate thatthey are entitled to state action immunity. “First, the challenged restraint must be one clearly articulated and affirmatively expressed as state policy, and se cond, the policy must be actively supervised by the State.” Trigen , 244 F.3d at 1226 (internal quotation marks omitted). To meet the first prong, “the state policy does not have to compel the private party to engage in anticompetiti ve conduct. If the state policy expresslypermits, but does not compel, anticompetitive cond uct, the private party may still qualify for state action immunity.” Id. (emphasis added). Here, it is clear that no state policy expressly permitted Sout hwestern Bell to attempt to lock up customers contractually long beyond the November1996 introduction of competition in an effort to stymie that competition . As the Plaintiffs note, the Oklahoma legislature’s 1990 decision to bring compe tition to the pay phone market (a decision not implemented until 1996) sugg ests an opposite state policy. The second prong “mandates that the State exercise ultimate control over the7Cf. Central Telecomm., Inc. v. TCI Cablevision, Inc. , 800 F.2d 711 (8th

Cir. 1986), where the Eighth Circuit rejected a cab le provider’s argument that “as a matter of law, it could not have possessed monopo ly power because [the municipality] regulated price and entry in the cabl e television business.” Id. at 726. The court recognized that TCI had the power t o raise the price of premium channels without the approval of the municipality a nd that it “used its entrenched position and . . . various unethical or illegal pra ctices . . . to exclude competition.” Id. Of course, in the case before us, Southwestern Be ll cannot even claim that its long-term contracts with coerci ve terms and its anticompetitive “Blitz” were regulated, or even known, by the OCC. - 28 - challenged anticompetitive conduct.” Id. (internal quotation marks omitted). Here, the state likely was not even aware of the fu ll extent of Southwestern Bell’s lock up conduct, let alone exercising ultimate cont rol over it. The state action immunity doctrine does not apply to this case. 7 Southwestern Bell offers a cursory alternative argu ment that the Plaintiffs’ claims are barred by the exclusivity of the OCC’s j urisdiction. The only authority cited in support of this argument is Trigen . However, Trigenis obviously distinguishable. All of the state antitrust claims in Trigeninvolved a challenge to rates charged by a regulated utility with a continu ing legal monopoly. 244 F.3d at 1228 (stating that “we construe all of Trigen’s state law claims as collateral attacks on [Oklahoma Gas & Electric] filed rates”). The rates charged by the utility were determined by the OCC, not by the util ity. Id. Trigen ’s conclusion that a challenge to the state-mandated rates charge d by the utility amounted to an unlawful collateral attack was derived from the Okl ahoma Constitution’s- 29 -

requirement that an “appeal from an orderof the OCC ‘affecting the rates, charges, services, practices, rules or regulations of public utilities . . . shall be to the Supreme Court [of Oklahoma] only . . . .’ Okla . Const. art IX, § 20.” Id. at 1228 (emphasis added, ellipses in original). The exclusive jurisdiction of the OCC is not implic ated here because, unlike the plaintiff in Trigen , the Plaintiffs are not challenging any order of t he OCC, or any action by Southwestern Bell mandated byan order of the OCC. The OCC’s refusal to impose the fresh look does not imp ly that it was endorsing Southwestern Bell’s lock up campaign. To the contr ary, the record suggests that the OCC’s ignorance of the lock up campaign’s scope may have contributed to its decision not to impose the fresh look. Although So uthwestern Bell asserts that “plaintiffs chose not to appeal to the Oklahoma Sup reme Court” the OCC’s decision not to adopt the fresh look, Southwestern Bell fails to offer any basis for concluding that such an appeal from agency inaction was available. See Okla. Const. art. 9, § 20. In any event, the Plaintiffs are not complaining about anything the OCC did or did not do. They are compl aining about anti-competitive unilateral activity by Southwestern Bell that was n either mandated, nor authorized, nor reviewed, nor even known about by t he OCC. Accordingly, we conclude that Southwestern Bell’s exclusive jurisdi ction argument fails.- 30 -

D. Market Power through Contracts Southwestern Bell argues that the trial court impro perly allowed the jury to consider the multi-year, automatically renewing con tracts between Southwestern Bell and the location owners as evidence of market power. It argues that its contract power was limited because the duration of the contracts from which that power derived was limited; such necessarily temporary control of a market cannot constitute monopoly, it argues. The district courtrejected this argument:

Defendant bases its argument . . . on assumptions reje cted by the jury. First, Defendant argues that entry into the pay phone market is easy. As noted by Plaintiffs, such an argument fli es in the face of the testimony of numerous witnesses that Defendant’s co ntract activities had imposed substantial barriers to making a profit able entry into the market. Plaintiffs’ argument was bolstered by Defe ndant’s own internal memos reflecting an intent to make it hard for comp etitors to take customers away from Defendant. Further, the very l anguage of Defendant’s contracts evidences a persistent contro l over the market. Weighing the evidence in favor of Plaintiffs as the Court mu st, there is clear support that Defendant’s intent and the actua l effect of the contracts was that they can last forever. Not only did Defendant impose significant restrictions on how the contract could be term inated, it also severely restricted who could terminate a contract. Moreover, Defendant’s own internal memos reflect its intent t hat the contracts never terminated but had anniversary dates. This e vidence was sufficient for the jury to find Defendant’s contrac ts were more than temporary or transitory. Finally, the jury was pre sented evidence that even when Plaintiffs secured a location in which to place a pay phone, Defendant’s actions of quoting high termination fee s, removing equipment early, or failing to remove equipment, we re directed at preventing the switch. Considering this evidence i n the light most favorable to Plaintiffs, it is clear the jury acted reasonably in finding Defendant held a monopoly. On appeal, Southwestern Bell merely reasserts that temporary contract- 31 -

power cannot constitute monopoly power, making no e ffort to challenge the district court’s conclusion that the jury properly could have concluded that the contracts were meant to, and did, have a non-tempor ary (indeed nearly permanent) effect. That Southwestern Bell presented evidence from which the jury could have reached the contrary conclusion does not warra nt reversal. Southwestern Bell also argues that the district cou rt erred in refusing to issue the following jury instruction: If the evidence demonstrates that the defendant’s a lleged restrictive, exclusionary or predatory conduct will necessarily be temporary, the defendant will not possess the degree of market pow er required for the monopolization or attempt to monopolize claim. An example of temporary conduct is conduct that is limited by the duration of a contract. As given, Southwestern Bell argues, the instruction s erroneously permitted the jury to premise monopoly liability on contract powe r, even if the jury did not accept the Plaintiffs’ arguments about the non-temp orary nature of the contracts. We review the court’s refusal to give a particular instruction for abuse of discretion. Coletti v. Cudd Pressure Control , 165 F.3d 767, 771 (10th Cir. 1999). “We do not decide whether the instructions are flaw less, but whether the jury was misled in any way and whether it had an understandi ng of the issues and its duty to decide those issues. So long as the charge as awhole adequately states the law, the refusal to give a particular requested ins truction is not grounds for reversal.” Id. (internal quotation marks, citations, and alterati on omitted).- 32 -

Although Southwestern Bell offered its alternative instruction, there is no indication that it objected to the instructions the court did offer. As such, we review the court’s instructions for plain error. U nited States v. Voss , 82 F.3d 1521, 1530 (10th Cir. 1996) (applying plain error r eview where “defendants cite their own proffered instructions, [but] have not in dicated a place in the record in which they objected to the court’s instruction”); F ed. R. Civ. P. 51 (“No party may assign as error the giving or the failure to gi ve an instruction unless that party objects thereto before the jury retires to co nsider its verdict, stating distinctly the matter objected to and the grounds o f the objection.”). We reject Southwestern Bell’s challenge to the inst ructions, finding that the instructions as a whole were adequate to alert the jury to consider the duration of the effects of any anti-competitive contracts. The jury was told that, in determining “whether any of defendant’s practices w ere predatory or exclusionary,” it should consider various factors, including “the duration of any foreclosure of competition caused by [Southwestern Bell’s] conduct.” Further, the district court properly rejected South western Bell’s proffered instruction, which by listing “conduct that is limi ted to the duration of the contract” as an example of “temporary conduct,” wou ld have misled the jury into believing that any anti-competitive conduct authori zed by contract immunizes that conduct from state antitrust scrutiny. That tender ed instruction further incorrectly8 Southwestern Bell cites Colorado Interstate Gas Co . v. Natural Gas

Pipeline Co. , 885 F.2d 683 (10th Cir. 1989), as support, but th at case by no means forecloses the consideration of contractual activity in determining monopoly liability. In Colorado Interstate Gas , the potential monopolist’s market power derived solely from a contract with a fixed expirat ion date, and the court found this to be an insufficient basis for monopoly liabi lity under the circumstances in light of “the certainty that the market will return to the status quo at a predetermined date and the fact that [the alleged m onopolist] has no power to prevent the erosion of its market share.” Id. at 697 n.24. By contrast, Southwestern Bell’s liability was based on a whole system of contracts with exclusionary terms (including provisions that the d istrict court found could cause many of them, in fact, to last forever), as well as an abundance of other anticompetitive conduct. - 33 - assumed that contracts of any duration, even those contracts here that could be found to be essentially perpetual, should be consid ered “temporary” and thereby immune from the antitrust law. Thus, the tendered instruction was misleading and incorrect (as well as unnecessary in light of the c orrect instructions that were given). Thus, refusing to give that instruction wa s not error. 8

E. Damages Based on Future Misconduct Southwestern Bell argues that the damages awarded b elow necessarily and impermissibly reflect an award of future damages fl owing from future misconduct. The district court rejected this argum ent: [E]ven if Defendant immediately ceased all anti-competitive practices following the verdict, the effects of its prior bad acts would continue. Defendant still holds numerous long-term contracts which affect future competition. There was no suggestion or evidence at trial that those contracts would cease to exist or be terminated by defendant.- 34 -

Additionally, there was evidence of the business gr owth Plaintiffs would have experienced if allowed to enter a healthy market when it was newly opened if not for Defendant’s conduct. We agree that the jury’s damages award is proper. At trial, the Plaintiffs’ damages model totaled ove r $27 million, while Southwestern Bell’s damages model was under $1 mill ion. The district court instructed the jury that it “may consider evidence relating to the profits each plaintiff has not received in the past, and will no t receive in the future, because of defendant’s past unlawful conduct ” (emphasis added), and forbade the jury to award purely speculative damages. The jury, per ge neral verdict form not objected to by either party, awarded damages of $7, 465,450. Southwestern Bell faces a steep uphill climb in att empting to overturn the jury’s damages award. In addressing a challenge to a jury’s damages award in an antitrust case, the Supreme Court held that the awa rd “must be allowed to stand, unless all reasonable men, exercising an unprejudic ed judgment, would draw an opposite conclusion from the facts.” Story Parchme nt Co. v. Paterson Parchment Paper Co. , 282 U.S. 555, 566 (1931). This court has explain ed further that: We review a district court’s disposition of a motio n for remittitur or new trial on damages for a manifest abuse of discre tion. . . . In order to establish an abuse of discretion, the p arty that moved unsuccessfully for a new trial on the basis o f an excessive verdict carries the heavy burden of demonstrating that the verdict was clearly, decided ly, or overwhelmingly against the weight of the evidence. In- 35 - applying the abuse of discretion standard, we are a lso mindful that absent an award so excessive or inadeq uate as to shock the judicial conscience and to raise an ir resistible inference that passion, prejudice, corruption or ot her improper cause invaded the trial, the jury’s determ ination of the fact is considered inviolate. Hynes v. Energy West, Inc. , 211 F.3d 1193, 1206 (10th Cir. 2000) (quoting Campbell v. Bartlett , 975 F.2d 1569, 1577 (10th Cir. 1992)). We have s aid that, even where a “persuasive” explanation of the jury’s damages award indicates an award contrary to law, the possibility of a proper explanation, “[h]owever slight the chance,” will suffice to sustain the damages aw ard. United Phosphorus, Ltd. v. Midland Fumigant, Inc. , 205 F.3d 1219, 1228 (10th Cir. 2000) (rejecting defendant’s double recovery claim, even though the damages were precisely the sum of the two amounts that could not be aggregated , because “the jury’s award was well within the range of proof”). Against this background, Southwestern Bell’s damages arguments fall short. Both parties agree that, in an antitrust case, futu re damages may be recovered for past misconduct but not for future mi sconduct. The Plaintiffs focus their defense of the judgment on the proposition th at the jury could have awarded the damages it did solely by reference to past misc onduct. Looking only to the pay phone locations that they allegedly had already lost at the time of trial as a result of Southwestern Bell’s monopolistic behavior(1,863 pay phones), the Plaintiffs calculate that the total damages flowing from the deprivation of these- 36 -

1,863 phones was $7,490,187 (roughly $35,000 greate r than the jury awarded). Of this number, roughly $2.74 million is profits lo st prior to trial, and the remainder is profits lost after trial as a result o f Southwestern Bell’s continuing enforcement of its contracts with respect to these 1,863 phones. Southwestern Bell does not challenge the Plaintif fs’ arithmetic, but does contest the logical underpinnings of their argument . It contends that the future enforcement of past contracts is future misconduct, not past misconduct. The essence of Southwestern Bell’s position is this: “ Any damages from existing contracts are avoidable, either by SWBT ceasing to enforce unlawful contracts, or by an injunction barring their enforcement.” We do not believe that either ground justifies overturning the damages award. First, Southwestern Bell contends that damages aris ing from the future enforcement of the contracts are avoidable because SWBT would stop enforcing “unlawful contracts.” Southwestern Bell acknowledg es that, as the district court noted, it presented no evidence at trial that it wo uld “ceas[e] to enforce” the contracts, but contends on appeal that “it is absur d to require a defendant, arguing that contracts are legal, to tender witnesses to pr omise that it would notenforce lawful agreements in the future.” However, Southwe stern Bell never offered in the record anyassurance that it would cease to enforce its contr acts with location owners. Southwestern Bell suggests that such evide nce is unnecessary because- 37 -

the law presumes that the antitrust defendant will obey the law, which compels the conclusion that Southwestern Bell would not enf orce unlawful contracts. Southwestern Bell offers no authority, binding or o therwise, suggesting that the presumption of lawful behavior extends to the forfe iture of existing contract rights. Indeed, as the Plaintiffs note, they neversought a ruling on the enforceability of individual contracts, nor would s uch a ruling be proper in the absence of the thousands of contracting third-partylocation owners in this litigation. Presumably not all of the location own ers would want to terminate their contracts with Southwestern Bell. If Southwe stern Bell were to decide unilaterally that it would treat the contracts as n ull and void, it may expose itself to breach of contract claims by the location owners . This suit was about holding Southwestern Bell accountable to the Plaintiffs forits past monopolistic behavior, and the future enforceability of its contracts vis- a-vis all the location owners was simply not before the court. Under such circumstan ces, the district court was not obligated to assume that Southwestern Bell would vo luntarily terminate its contracts with location owners. Second, Southwestern Bell argues that the district court erred by upholding damages based upon future enforcement of past contr acts rather than entering an injunction forbidding Southwestern Bell to enforce its contracts. As an initial matter, Southwestern Bell does not indicate that itrequested or consented to such- 38 -

an injunction either before or after the jury decid ed the damages issue. Even assuming that the possibility of injunctive relief was raised before the district court, Southwestern Bell offers no support for its position that the possibility of issuing a contract-voiding injunction renders damag es based upon continuing enforcement of the contracts improper as a matter o f law. Neither of the cases cited by Southwestern Bell supports such a proposit ion. National Society of Professional Engineers v. United States , 435 U.S. 679, 697-98 (1978), addressed the quite different question of whether a court cou ldinjunctively limit an antitrust defendant’s free speech rights. The interplay betw een the money damages for future action and the availability of injunctive re lief was not even remotely implicated. The same may be said of the district c ourt case cited by Southwestern Bell, Board of Regents v. NCAA , 601 F. Supp. 307 (W.D. Okla. 1984). The case is relevant only in that it provides an example of a decision to enjoin the enforcement of contracts found to violate the antit rust laws. See id. at 308. Southwestern Bell offers no relevant authority in s upport of its argument that the possibility of a contract-avoiding injunction forec loses the availability of damages based on future enforcement of continuing contracts . We perceive no justification for creating such a rule, and therefore reject Sout hwestern Bell’s argument. As the Supreme Court recognized in National Society of Professional Engineers , “[t]he standard against which the [district court’s ] order must be judged is9 All outstanding motions are denied. - 39 - whether the relief represents a reasonable method o f eliminating the consequences of the illegal conduct.” 435 U.S. at 698. There i s no reason to doubt that the jury’s damages award did just that.

CONCLUSION The judgment below is AFFIRMED

. 91 Okla. Stat. Ann. tit. 79, § 203 provides in perti nent part:

A. Every act, agreement, contract, or combination i n the form of a trust, or otherwise, or conspiracy in restraint of trade or c ommerce within this state is hereby declared to be against public policy and illegal. B. It is unlawful for any person to monopolize, attempt to monopolize, or conspire to monopolize any part of trade or commerc e in a relevant market within this state.

. . . . D. As used in this section: 1. “Monopolize” means: a. the possession of monopoly power in the relev ant market, and (continued...) Nos. 01-6067, 01-6138, Telecor Communications, Inc. et al. v. Southwestern Bell Telephone Co.

KELLY , Circuit Judge, dissenting.

I would reverse on three grounds and respectfully d issent. In my view, the district court erred (1) by defining the relevant m arket on summary judgment, (2) in allowing the jury to base antitrust liability on contracts that were subject to OCC regulation and thereby immune from collateral attack under the state action and exclusive jurisdiction doctrines, and (3) in al lowing damages for future enforcement of contracts that are necessarily void as against public policy under the jury’s interpretation of the evidence. 1. Defining the Product Market on Summary Judgment

. Plaintiffs prevailed upon their state-law monopoliz ation and restraint of trade claims, 1 which require proof of a relevant market. “A rele vant market is1 (...continued)

b. the willful acquisition or maintenance of that power by exclusionary conduct as distinguished from growth or developmentas a consequence of a superior product and/or service, business acumen, o r historic accident; 2. “Monopoly power” means the power to control mar ket prices or exclude competition;

. . . . See also Harolds Stores, Inc. v. Dillard Dep’t Stores, Inc. , 82 F.3d 1533, 1543-44 (10th Cir. 1996) (discussing elements of restraint of trade in Oklahoma). -2- determined by consideration of two elements: (1) A relevant geographic market; that is, the geographical territorial area involved ; and (2) a relevant product market–the type or area of goods or services in whi ch the product which is subject to the restraint effectively competes.” Teleco, In c. v. Ford Indus., Inc. , 587 P.2d 1360, 1364 (Okla. 1978) (italics in original). Des pite genuine issues of material fact, the district court granted the Plaintiffs’ mo tion for summary judgment on relevant product market. The court defined the rel evant market “as the provision of public pay phones and related pay phone services for the territory in Oklahoma in which SWBT operates as a Local Exchange Carrier. ” Aplt. App. 2149. It did so on the strength of its holding that SWBT’s expert’s conclusion concerning the interchangeability of pay phones and cell phones wa s “simply unreasonable given the facts in the record.” Id. The district court incorporated its summary judgmen t ruling in its jury instructions defining the relevant market for the r estraint of trade and monopoly2 In defining the relevant product market as a matt er of law, the district

court effectively rejected SWBT’s contention that i t should be evaluated at the level of the end users. This legal ruling is befor e us. See Ruyle v. Continental Oil Co. , 44 F.3d 837, 841 (10th Cir. 1994). -3- claims. Aplt. App. 3470, 3483, 3500. According to this court, “the parties allowed the jury to determine which set of customer s should be used in evaluating monopoly power,” the pay-phone location owners or the end-users (consumers) of pay-phone services. 2 Ct. Op. at 6. We readily recognize that the district court could not have properly granted summary judgment on whether the relevant market inc ludes cell phones as well as pay phones. See Eastman Kodak Co. v. Image Technical Servs., Inc. , 504 U.S. 451, 468-69 (1992) (non-movant in antitrust case ne ed only prove its inferences are reasonable, as opposed to “economically sensele ss”). Equally problematic is the district court’s exclusion of SWBT’s expert tes timony on the product market issue without benefit of a Daubertanalysis. See Daubert v. Merrell Dow Pharm.,
Inc. , 509 U.S. 579 (1993); see also United States v. Velarde , 214 F.3d 1204, 1209 (10th Cir. 2000) ([T]he [district] court must, on t he record, make some kind of reliability determination.”) (emphasis in original) . Yet this court concludes that “regardless of the interchangeability of pay phones and cell phones at the enduser level, there is no doubt that pay phones and c ell phones are not interchangeable at the location-owner level, and th at is the level where the-4-

Plaintiffs argued that Southwestern Bell has monopo lized competition.” Ct. Op. at 12; see also id. at 20. Without question, the various “levels” of distribution for pay-phone services are implicated. There is no dispute that defining the relevant mark et is a factual matter normally entrusted to the trier of fact, here the j ury. See Reazin v. Blue Cross & Blue Shield of Kan., Inc. , 899 F.2d 951, 975 (10th Cir. 1990); Westman Comm’ n Co. v. Hobart Int’l, Inc. , 796 F.2d 1216, 1220 (10th Cir. 1986); Telex Corp. v. Int’l Bus. Machs. Corp. , 510 F.2d 894, 915 (10th Cir. 1975) (per curiam). The jury should have been allowed to determine the rele vant market because there was a factual dispute on summary judgment as to whetherPlaintiff’s theory was
correct. See III Aplt. 743-48; V Aplt. App. 1281-83. This court’s holding that end-users of phone services do not matter is in con siderable tension with the Supreme Court’s holdings that the relevant product market is made up of “commodities reasonably interchangeable by consumer s for the same purposes,” meaning that the cross-elasticity of demand between products must be similar but need not be identical. United States v. E.I. du Po nt de Nemours & Co. , 351 U.S. 377, 395 (1956); see also United States v. Continental Can Co. , 378 U.S. 441, 443 (1964); Brown Shoe Co. v. United States , 370 U.S. 294, 325 (1962). While it is true that du Pontinvolved a consumer market for cellophane and flex ible packaging and that Plaintiffs here allege that the market involves competing for-5-

pay phone locations of location owners, neither rea son compels the Plaintiffs’ definition of the relevant product market. In du Pont , the government accused du Pont of monopolizing th e market for cellophane, and the issue before the Court was whet her the relevant product market consisted of cellophane alone or all flexibl e wrappings. Id. at 380-81. Notwithstanding the government’s attempt to define the relevant market narrowly, the Court held “that cellophane’s interchangeability with the other materials mentioned suffices to make it part of this flexible packaging market.” Id. at 400. In this case, the Plaintiffs argue for a narrower m arket, one lacking any interchangeable commodities. See Eastman Kodak , 504 U.S. at 481 (holding that a relevant market may consist of a single product o r service and must be evaluated from the perspective of the choices avail able to Kodak equipment owners). It is undisputed that no public cellphone s are available to location owners. The contractual support for Plaintiffs’ th eory–that the SWBT standard contract identifies the location owner as a “custom er”–is illusory at best. See Aplt. App. 1115-16 (contract); see also Twin City Sportservice, Inc. v. Charles O. Finley & Co. , 512 F.2d 1264, 1272 (9th Cir. 1975) (relevant pro ducts were franchises available to concessionaire, not concess ion products marketed to consumers or concession services to major league ba seball teams). The contracts actually provide that location owners are paid a co mmission by SWBT for “the-6-

right to install and maintain SWBT public pay telep hone(s) and associated equipment (payphone equipment)” on their property. Aplt. App. 1115-16 (contract). This suggests that payphone service pr oviders do not sell payphones or payphone services to location owners, but rathersell payphone services to traditional consumers (end users) and use the locat ion owners as a method of distribution. In any event, as the district court acknowledged and the record confirms, the factual issues surrounding the relevant product market and the perspective from which it should be evaluated were hotly contested on summary judgment. Aplt. App. 2142. This circuit has cautioned about overly restrictive definitions of the relevant product market, notwithstanding that a pot ential distributor alleged antitrust injury from a manufacturer’s refusal to d eal. In Westman , a distributor of kitchen equipment alleged that Hobart, a kitchen equipment manufacturer, refused to grant a distributorship in violation of § 1 of the Sherman Act. The district court viewed one type of distribution meth od (“one stop shopping”) as comprising the relevant product market. This courtreversed, holding that the relevant product market must be defined by intercha ngeability of products from the perspective of consumers, not distributors. Af ter noting that “the purpose of the antitrust laws is the promotion of consumer wel fare,” Westman , 796 F.2d at 1220, the court stated:-7-

In defining the relevant market as “one-stop shoppi ng,” the trial court apparently focused on the system of product d istribution rather than the market facing the consumer of restaurant e quipment. The trial court’s focus justified the conclusion that “ one-stop distribution” is an effective way to compete in the market. But the fact that “one-stop distribution” is an effective o r even superior way to compete does not mean that the relevant market i s limited to those who use that method of competition. “Any definitio n of line of commerce which ignores the buyers and focuses on wh at the sellers do, or theoretically can do, is not meaningful.” Id. at 1220-21 (citation omitted). Finding that otherrestaurant equipment was reasonably interchangeable, the court held “that th e relevant product market at a minimumconsisted of the products generally sold by restau rant equipment dealers, whether or not those dealers carried a wid e enough range of products and brands to be classed as ‘one stop shopping’ distrib utors.” Id. at 1221 (emphasis added). Although Westmaninvolved a § 1 claim, its holding concerning the relevant market is also fully applicable to a § 2 m onopolization claim. See Thurman Indus. Inc. v. Pay ‘N Pak Stores, Inc. , 875 F.2d 1369, 1373, 1378 (9th Cir. 1989) (market definition required for § 1 and § 2 claim). The district court’s grant of summary judgment in this case foreclosed j ury consideration of evidence that showed that cellphones competed for consumers’ business, took customers from payphone providers and constrained pricing, al l of which could have enabled the jury to conclude cellphones were in the relevan t market. See Brooke Group Ltd. v. Brown & Williamson Tobacco Corp. , 509 U.S. 209, 224-25 (1993) (antitrust laws protect against injury to competiti on, not competitors); Beville v.-8-

Curry , 39 P.3d 754, 759-60, 764 (Okla. 2001) (“The sine qua non of an antitrust claim is injury to competition.”) (emphasis in orig inal), reh’g granted , (Oct. 9, 2001). In other words, SWBT was entitled to be hea rd by a jury on the allegation that it lacked the power to control market prices o rexclude competition vis-a-vis the relevant market it contended for. See Aplees. Sur-Reply Br. at 6 (arguing that monopoly claim verdict could be affirmed on either theory); see also Beville , 39 P.3d at 760 (“Market power is the preliminary thres hold inquiry and is often dispositive of antitrust cases.”). One need not ac cept SWBT’s monopsony argument to conclude that the relevant market shoul d have been decided by the jury, not the district court. See Spectrum Sports, Inc. v. McQuillan , 506 U.S. 447, 459 (1993) (holding that proof of relevant mar ket is essential under § 2). The evidence plainly “present[ed] a sufficient disa greement to require submission to a jury . . . .” Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 251-252 (1986). 2. Rejecting the State-Action and Exclusive Jurisd iction Doctrines. Although this court declines to decide whether the state-action doctrine applies to state antitrust claims, it seems clear t hat it does apply, contrary to the district court’s holding. Aplt. App. 3942-43. Okl ahoma’s antitrust law is to “be interpreted in a manner consistent with federal ant itrust law . . . and the case law applicable thereto.” Okla. Stat. Ann. tit. 79, § 2 12; see also Teleco, Inc. 587 P.2d at 1362; Oakridge Investments, Inc. v. S. Energy Ho mes, Inc. , 719 P.2d 848, 8503 Okla. Const. art. 9, § 18 provides in part: (continued...) -9- (Okla. Ct. App. 1986). Nothing suggests that Oklah oma would reject the stateaction doctrine which we have applied to federal an titrust claims in similar circumstances. See Trigen-Oklahoma City Energy Corp. v. Oklahoma Gas & Elec. Co. , 244 F.3d 1220, 1225-1226 (10th Cir. 2001) (recogn izing Oklahoma’s policy of allowing regulation instead of competitio n in electricity sales); S. Disposal, Inc. v. Tex. Waste Mgmt. , 161 F.3d 1259, 1263 (10th Cir. 1998) (recognizing Oklahoma’s policy of allowing regulati on instead of competition in waste disposal services). This court decides that the state action does not apply to the circumstances of this case because (1) “it is clear that no state policy expressly permitted Southwestern Bell to attempt to lock up customers c ontractually long beyond the November 1996 introduction of competition in an eff ort to stymie the competition,” and (2) “the state likely was not eve n aware of the full extent of Southwestern Bell’s lock up conduct, let alone exer cising ultimate control over it.” Ct. Op. at 27-28. Here, the state plainly made clear its intent to re gulate telephone services, including payphone services, until the OCC permitte d competition. See Okla. Const. art. IX, §§ 18, 34; 3 Okla. Stat. Ann. tit. 17, § 131 (OCC issues certif icate3 (...continued)

The Commission shall have the power and authority a nd be charged with the duty of supervising, regulating and contro lling all transportation and transmission companies doing bus iness in this State, in all matters relating to the performance o f their public duties and their charges therefor, and of correcting abuse s and preventing unjust discrimination and extortion by such compani es; and to that end the Commission shall, from time to time, prescr ibe and enforce against such companies, in the manner hereinafter a uthorized, such rates, charges, classifications of traffic, and rul es and regulations, and shall require them to establish and maintain al l such public service, facilities, and conveniences as may be rea sonable and just, which said rates, charges, classifications, rules, regulations, and requirements, the Commission may, from time to time , alter or amend. -10- of convenience and necessity); Okla. Stat. Ann. tit . 17, § 139.1 (directing the OCC to “promulgate and enforce operating requiremen ts for coin-activated telephones and credit card-activated telephones ava ilable for public use owned or operated by corporation or persons other than telep hone corporations authorized by the Commission to operate within service areas.” ); Southwestern Bell Tel. Co. v. Oklahoma , 825 P.2d 262, 265 (recognizing that local exchang e companies are a state-created exception to prohibition on monopolie s); Aplt. App. 3711-3724 (1985) (OCC 1985 Tariff Order rejecting competitive payphones, and ordering that SWBT “be and hereby is the only authorized pro vider of coin phone service within its territory.”). Rather than concentrating on the particular field of regulation, this court focuses upon the effects of alleged anti-competitive conduct beyond November 1996. But the proper inquiry is wh ether Oklahoma intended to-11-

displace competition in the payphone market with a regulatory program until November 1996. See S. Motor Carriers Rate Conference v. United States , 471 U.S. 48, 64-65 (1985). The answer is clear–not unt il the OCC determined how and when competition could begin did Oklahoma chang e its policy. The OCC had ultimate control over SWBT’s alleged an ti-competitive conduct, which goes to satisfy the two-part Midcal test for state action immunity.
See Cal. Retail Liquor Dealers Ass’n v. Midcal Aluminu m, Inc. , 445 U.S. 97, 105 (1980) (“First, the challenged restraint must be ‘o ne clearly articulated and affirmatively expressed as state policy’; second, t he policy must be ‘actively supervised’ by the state itself.”) (citation omitte d). Concerning the first part, the state need only permit the conduct to occur–approva l is unnecessary. Trigen , 244 F.3d at 1226. As discussed above, Oklahoma plainlyregulated the field. Concerning the second part, state officials must have and exercise power to review alleged anti-competitive acts. Patrick v. B urget , 486 U.S. 94, 101 (1988). We have twice concluded that Oklahoma’s pervasive r egulation of electric utilities satisfied the “active supervision” requir ement. See id. ; Lease Lights, Inc. v. Pub. Serv. Co. of Okla. , 849 F.2d 1330, 1334 (10th Cir. 1988). In Trigen , we based satisfaction of the active supervision requir ement on the OCC’s regulatory authority. 244 F.3d at 1226. In Lease Lights , we looked not only at the OCC’s grant of authority but also considered actual proce edings of the OCC. 849 F.2d at4 The Plaintiffs argue that this transcript should be stricken as it was not

before the district court. See United States v. Kennedy , 225 F.3d 1187, 1190-91 (10th Cir. 2000). I would grant SWBT’s motion to s upplement the record pursuant to Fed. R. App. P. 10(e)(2)(C), because th e substance of Mr. (continued...) -12- 1334. In this case, not only OCC’s regulatory authority, but also its actual proceedings and rulemaking, support the active supe rvision requirement. Specifically in 1996, the OCC was concerned with co mpetition and addressed it in a formal rulemaking proceeding which resulted in ad ministrative regulations. Aplt. App. 3725 (Notice of Rulemaking) (OCC propose d to establish rules including “what safeguards are necessary to protectthe interest of competitive payphone service providers”); Aplt. Add. tab 8 (Okl a. Admin. Code. tit, 165, ch. 58 (Facilitation and Provisioning of Payphone Servi ce); id. at tab 12 (OCC’s Agency Rule Report Establishing Pay Telephone Servi ce Rules). Tellingly, an assistant attorney general in arguing for the “fresh look” proposal before the OCC stated: And it’s hard for me to imagine that anyone would s eriously argue that existing payphone service contracts are not a significant barrier to new entrants. The incumbent LECs have had decad es of monopoly status in order to identify the most lucrative site s within their service territories, and they have had months to gain a competitive advantage through going out and renegotiating those contracts . The payphone rules, we believe, should allow a renegotiation win dow. Aplt. Add. tab 11 at 22 (Rick Chamberlain testimony before the OCC); 4 see also4 (...continued)

Chamberlain’s comments is contained in his testimony before the district court, Aplt. App. 4622, and the payphone regulatory system in Oklahoma was always an issue in this case. Further, given that the distri ct court held that the state-action doctrine did not apply, inclusion of this transcrip t in no way results in the appellate court deciding an issue with evidence that might have made a difference to the district court. -13- Aplt. App. 3729-3741 (Oklahoma Attorney General’s b rief before OCC arguing that OCC had jurisdiction to consider payphone serv ice and the location of payphones and existing LEC contracts were a barrierto competition). Various providers complained to the OCC about the renegotiation tactics of SWBT as hindering competition, even including SWBT’s May 1, 1996 letter to location owners. Aplt. App. 3743-3748 (Textel Communication s, Inc.’s); 3752-3765 (Cherokee Communications, Inc.). The record reveal s that parties were divided over the fresh look proposal, whether the OCC had j urisdiction to entertain it, and whether it was constitutional. Ultimately, the OCC voted against adopting it, but indicated its willingness to reconsider the matter with discussion and investigation, at the invitation of the industry. Aplt. Add. tab 12 at 11. All of this suggests that the OCC could and did consider the alleged anti-competitive conduct of SWBC. The fact that the OCC might not h ave been aware of the full extent of SWBT’s alleged anti-competitive conduct ( which is pure speculation) or declined to intervene is of no moment–the heart of this case is SWBT’s precompetition contracts which the OCC reviewed and al lowed to remain in effect.-14-

SWBT’s alleged bad acts are insufficient to defeat state action immunity. See Trigen , 244 F.3d at 1227 (even if OG&E had committed cert ain improper acts in the regulated sale of electricity, state action imm unity was proper). The exclusivity of the OCC’s jurisdiction over matters concerning payphones is apparent. No appeal was taken from th e OCC’s decision not to impose a fresh look. Although this court questions whether such an appeal could have been maintained, the constitutional provision allows an appeal “from any action” of the OCC “prescribing . . . practices, ru les or regulations” and “by any party affected, or by any person deeming himself ag grieved by any such action . . . .” Okla. Const. art. 9, § 20. This is hardly a limited grant of standing. In the context of the fresh look proposal, the OCC was exe rcising its constitutional and statutory authority to promulgate the payphone rule s and regulations. Aplt. Add. tab 12 at 3. The court’s suggestion that an appeal could not have been taken from agency inaction ignores the forest for the trees. Moreover, the Oklahoma Supreme Court has passed on OCC inaction before. T urpen v. Okla. Corp.
Comm’n , 769 P.2d 1309, 1325 (Okla. 1988) (OCC did not errin deciding to address imputed value issue later). Analogous to T rigen , the Plaintiffs’ state antitrust claims based upon pre-November 1996 condu ct are nothing more than a collateral attack on the OCC’s right to supervise, regulate and control matters relating to the performance of transmission companypublic duties and of-15-

correcting abuses. See Okla. Const. art. 9, § 18. A major part of Plaint iffs’ case concerns SWBT’s pre-competition contracts, which th e OCC reviewed and allowed to remain in effect and which plainly come within the OCC’s constitutional and statutory jurisdiction. 3. Allowing Damages for Future Enforcement of Contracts The court is undoubtedly correct that antitrust dam ages are not subject to a rigorous standard of proof; estimates and reasonabl e inferences of damages are sufficient. See J. Truett Payne Co. v. Chrysler Motors Corp. , 451 U.S. 557, 567 (1981); Zenith Radio Corp. v. Hazeltine Research, I nc. , 395 U.S. 100, 123 (1969). At the same time, an antitrust plaintiff has the bu rden of proof and damages cannot be speculative. See Wells Real Estate, inc. v. Greater Lowell Bd. of Realtors , 850 F.2d 803, 816 (1st Cir. 1988). Future damage s are permissible, but only to the extent that they are based upon past wr ongdoing. Lawlor v. Loewe , 235 U.S. 522, 536 (1915). In Oklahoma, a statutory antitrust action is in the nature of tort, and is not an action on contract. McDonald v. Amtel, Inc. , 633 P.2d 743, 745 (Okla. 1981). Here, however, the contracts were integral to the p roof of damages. Whether based upon SWBT continuing to enforce its contracts or on the rationale of free and open competition beginning in 1996, the damage award in this case presupposes that SWBT’s anti-competitive acts will continue post-verdict and the-16-

contracts will continue to be enforced. This assu mption is wrong as a matter of law. It must be remembered that the Plaintiffs pre vailed upon their state-law restraint of trade claim and that such acts, and co ntracts which are the product of such acts, are “against public policy and illegal.” Okla. Stat. Ann. tit. 79, § 203(A); First Nat’l Pictures v. Pappe , 39 P.2d 526, 530 (Okla. 1934) (“[I]f [a] contract was made in violation of the anti-trust laws, it was an illegal and unenforceable contract”); see also United States v. Addyston Pipe & Steel Co. , 85 F. 271, 290 (6th Cir. 1898) (holding that contracts where the primary purpose is to restrain trade are void). Plainly, the damage award based upon future damages is inappropriate and inconsistent with the objectiv es of antitrust law when an injunction against future anti-competitive conduct would solve the problem. See United States v. Or. State Med. Soc. , 343 U.S. 326, 333 (1952). 4. Conclusion. The district court erred in defining the relevantproduct market and not applying the state action or exclusive jurisdiction doctrines to bar the Plaintiffs’ claims arising prior to payphone competition. The damages award represents impermissible future damages based upon future anti -competitive conduct that would be unlawful. Because a new trial would be required on remand, th e district court again would have to consider the admissibility of SWBT’s interrogatory answer and its-17-

draft response under the Noerr-Penningtondoctrine. Given that the preNovember 1996 conduct is not actionable and that th e district court found that the interrogatory was poorly worded and resulted in an accurate but incomplete response, this line of inquiry would carry an even stronger danger of unfair prejudice than before, even with a limiting instruc tion. Though it may be admissible under footnote 3 of Pennington , such evidence still has to shed some light on “the purpose and character of the particul ar transactions under scrutiny,” United Mine Workers v. Pennington , 381 U.S. 657, 670 n.3 (1965), which would include transactions subsequent to November 1996. Plainly, the jury in this case was exposed to the theory that SWBT’s advocacy befo re the OCC demonstrated its intent to monopolize. Aplt. App. 4708; Aplt. App. 8379-80 (closing argument). Though the district court instructed th e jury to disregard an answer espousing this theory, it points to the need for ca ution with this evidence.