*Circuit Judge Torruella participated in oral argument in this

case, but has since recused himself and has not participated in the

decision of the case. The remaining two panelists, pursuant to 28

U.S.C. § 46(d), issue this opinion.

United States Court of Appeals

For the First Circuit

No. 04-1922

ABLE SALES COMPANY, INC., 

Plaintiff, Appellee,

v.

COMPAÑÍA DE AZÚCAR DE PUERTO RICO,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

[Hon. Juan M. Pérez-Giménez, U.S. District Judge]

Before

 Selya and Lynch, Circuit Judges.

*

Gina Ismalia Gutiérrez-Galang, with whom Law Office Pedro E.

Ortiz Álvarez was on brief, for appellant.

Carlos A. Rodríguez Vidal, with whom Myriam Fernández

González, and Goldman Antonetti & Cordova, P.S.C. were on brief,

for appellee.

May 6, 2005
-2-

LYNCH, Circuit Judge. This case presents the issue of

the meaning of the jurisdictional "in commerce" requirement of

§ 2(a) of the Robinson-Patman Anti-Discrimination Act, 15 U.S.C.

§ 13. 

Judgment was entered under the Act for Able Sales

("Able") and against Compañía de Azúcar de Puerto Rico ("CAPR"), a

corporation that is primarily engaged in the refining of raw sugar

and the subsequent sale of this sugar in the local Puerto Rico

market. CAPR argues on appeal that the district court did not have

subject matter jurisdiction to entertain the suit brought by Able

because the "in commerce" requirement was not met. Able is a

corporation primarily engaged in the importation and distribution

of refined sugar in the local Puerto Rico market and a competitor

of CAPR.

Specifically, CAPR argues that its sale of refined sugar

to various local wholesalers and retailers in Puerto Rico does not

satisfy the "in commerce" requirement of the statute. Able

counters that any of three separate transactions -- (1) CAPR's

importation of raw sugar into Puerto Rico for refinement and sale;

(2) Able's importation of refined sugar from Florida; and/or (3)

CAPR's sale of refined sugar to a local company which planned to

export the sugar -- independently satisfy this requirement and thus

provide a basis for subject matter jurisdiction in the district

court.
1Because we set aside the judgment awarded to Able, we do not

address CAPR's second argument on appeal: that the district court

erred in the calculation of damages. 

-3-

The district court agreed and after a two day bench trial

found that CAPR had violated § 2(a) of the Robinson-Patman Act and

awarded $1,949,259.00 in damages to Able. 

We hold that the transactions do not satisfy the "in

commerce" requirement, reverse the judgment, and remand with

directions that judgment be entered for CAPR.1

I.

We briefly recount the facts, largely as found by the

district court. CAPR does not dispute the district court's

characterization of the facts.

Until December of 2000, the Puerto Rico Sugar Corporation

("PRSC"), a public corporation created by a Resolution of the Board

of Governors of the Puerto Rico Land Authority in 1973, was the

sole supplier of "Snow White" brand refined sugar in Puerto Rico.

The Puerto Rico Department of Consumer Affairs ("DACO") established

regulations which required PRSC to sell all of its two and five

pound bags of refined sugar to ten exclusive distributors, one of

which was Able. These distributors then sold the bags to

wholesalers and retailers; DACO fixed the maximum prices for sugar

that the distributors could offer.

In January 2001, the Puerto Rico Legislature moved away

from governmental ownership and privatized the local sugar
-4-

industry. See 5 P.R. Laws Ann. § 430(a). It transferred the

operations and assets of the Mercedita Refinery to CAPR. Until

September 2001, CAPR sold the existing inventory of refined sugar

from the refinery to the distributors, including Able, at the price

of $43.23 per hundredweight, as established by DACO and as

previously offered by the PRSC.

By September 2001, CAPR had sold all the Mercedita

inventory and was unable to supply the local demand for refined

sugar. Due to the lack of refined sugar, Able and another

distributor, in agreement with DACO, imported refined sugar

required for local consumption, with the expectation that CAPR

would later import raw sugar, refine it, and resume the previous

distributor system. Because the cost of the imported refined sugar

was higher than the price established by DACO, DACO issued an order

which allowed the importers to sell the refined sugar to other

distributors and wholesalers at a higher price than had been

previously permitted by regulation. The new, higher price for

distributors was $46.10 per hundredweight; distributors sold to

wholesalers at the price of $48.54 per hundredweight. This order

was vacated in January of 2002, and the lower prices were

reinstated. 

CAPR, having sold all of its inventory of refined sugar,

needed a new source of supply if it wished to continue in the

business. It chose to import raw sugar to refine. In a one-time
-5-

purchase, CAPR imported approximately 12,000 tons of raw sugar into

Puerto Rico which it refined at its Mercedita facility. There is

no evidence of any further importation of raw sugar by CAPR. Able

attempted to buy refined sugar from CAPR (apparently refined from

this one-time importation of raw sugar) at the distributors' price

($43.23 per hundredweight), but on December 26, 2001, CAPR notified

Able that it was cutting distributors from its sales strategy and

would no longer be selling to distributors. Instead, CAPR would be

selling directly to wholesalers and retailers: if Able wanted to

buy CAPR's refined sugar, it could do so at the wholesalers' price

(not the lower distributors' price). Unfortunately for Able, this

price was also the maximum price that Able could, by law, sell to

its clients.

Thus CAPR moved from being a supplier to Able, which was

a distributor, to being a direct competitor to Able, with CAPR also

acting as a distributor and selling directly to wholesalers. Both

CAPR and Able sold directly to wholesalers and retailers, all of

which were local Puerto Rico entities. One wholesaler, Tropical,

purchased refined sugar from CAPR for export.

In an effort to make a profit and compete with CAPR, from

January to February of 2002, Able imported from Florida refined

sugar at a cost of $44.63 per hundredweight under the trademark

"Florida Crystal." In conformance with DACO guidelines, Able
2CAPR does point out that Able's chairman admitted at trial

that the other two and five pound bag sugar distributors ceased

operations on January 1, 2002, prior to the alleged predatory

pricing period from February of 2002 to September of 2002. The

district court's finding, however, has no bearing on whether or not

there is subject matter jurisdiction; we merely note the

discrepancy.

-6-

anticipated selling the sugar to wholesale clients at $47.54 per

hundredweight.

Shortly thereafter, CAPR reduced the price of the sugar

it had refined for sale to wholesalers from $47.54 to $45.10 per

hundredweight. This was the beginning of the alleged period of

predatory pricing. Able was forced to reduce its price as well to

compete with CAPR. 

At the end of April 2002, CAPR again reduced its price to

wholesalers, this time to $43.30 per hundredweight. This lower

price was not enough to cover CAPR's costs, which consisted of the

costs of refining the raw sugar, the sale of the now-refined sugar,

and the excise tax of $14.00 per hundredweight which CAPR was

obligated to pay to the Puerto Rico Department of the Treasury.

Throughout the time that CAPR was lowering its prices, it did not

pay this excise tax as required by law.

Despite Able's efforts to compete with CAPR, it lost a

number of its clients and its market share was reduced by between

forty and fifty percent. The district court found that other

distributors were eliminated from the market as a result of CAPR's

pricing.2 In September 2002, CAPR exhausted its inventories and
-7-

did not purchase any additional raw sugar. There is no further

evidence in the record as to whether CAPR has remained in the

business of selling refined sugar to wholesalers after it had

exhausted the inventory of sugar it had refined from the one-time

import of the 12,000 tons of raw sugar. 

Able filed the verified complaint on May 22, 2002

averring its version of the facts and alleging that CAPR engaged in

"predatory pricing" in violation of the Robinson-Patman Act, 15

U.S.C. § 13. Specifically, Able stated: 

Defendant's practice consists of distributing

sugar at prices lower than the costs of its

inventory. The objective of said pricing

structure is to eliminate Able Sales from the

market, to allow CAPR to prevail upon the

market as the sole sugar distributor in Puerto

Rico. . . . [This] practice will then enable

[CAPR] to recoup the losses sustained during

its current scheme of predatory pricing. 

On June 5, 2002, the summons, a copy of the verified

complaint, and Able's first set of interrogatories and requests for

production were served on CAPR. On August 9, 2002, after two

extensions of time, CAPR filed an answer. After CAPR's continual

failure to comply with discovery orders, the district court,

pursuant to an Order of October 28, 2003, struck CAPR's answer to

the complaint and its affirmative defenses. CAPR does not appeal

this order.

On November 12 and 13, 2003, a bench trial was held

before the district judge. At trial, Able presented documentary
3In a footnote, the district court referenced the transaction

between Tropical and CAPR as a basis for subject matter

jurisdiction and stated "CAPR did sell refined sugar for

exportation." 

-8-

evidence, testimony of the Chairman of the Board of Able Sales, and

an expert who testified as to Able's damages. CAPR was given an

opportunity to present evidence and to cross examine witnesses.

CAPR declined to present evidence, but did cross examine witnesses.

Having stricken the defendant's answers and affirmative

defenses from the record, the court determined that CAPR engaged in

primary line price discrimination in contravention of the RobinsonPatman Act. The court stated, "this case clearly entails a

primary-line price discrimination, in which CAPR imported raw sugar

from sources outside of Puerto Rico, refined it at the Mercedita

Refinery, and sold the refined sugar at below cost so as to

eliminate its competitors."

CAPR challenged the court's subject matter jurisdiction,

contending the "in commerce" requirement was not satisfied. The

court found that it did have subject matter jurisdiction based on

either CAPR's importation of raw sugar which it found remained in

the flow of commerce or Able's importation of refined sugar.3

II.

Price discrimination is made unlawful by § 2(a) of the

Clayton Act, as amended by the Robinson-Patman Act, which provides:

It shall be unlawful for any person engaged in

commerce, in the course of such commerce,
4In general, primary line violations involve a claim by the

injured party that "[a] business rival has priced its products in

an unfair manner with an object to eliminate or retard competition

and thereby gain and exercise control over prices in the relevant

market." Brooke Group, 509 U.S. at 222; see also III Areeda &

Hovenkamp, Antitrust Law ¶ 745e, at 477 (2d ed. 2002). We express

no view as to whether the district court correctly determined that

the facts alleged by Able establish a primary line violation of §

2(a) of the Robinson-Patman Act. This issue has not been raised on

appeal. The only question before us is whether the "in commerce"

requirement of the Robinson-Patman Act is satisfied. 

-9-

either directly or indirectly, to discriminate

in price between different purchasers of

commodities of like grade and quality . . .

where the effect of such discrimination may be

substantially to lessen competition or tend to

create a monopoly in any line of commerce, or

to injure, destroy, or prevent competition

with any person who either grants or knowingly

receives the benefit of such discrimination,

or with customers of either of them . . . .

15 U.S.C. § 13(a); see Brooke Group LTD v. Brown & Williamson

Tobacco Corp., 509 U.S. 209, 219-20 (1993). The statute

encompasses two different types of violations: primary line

violations and secondary line violations. Primary line violations

are directed at injuring competition with the discriminating

seller's direct competitors, whereas secondary line violations are

directed at injuring competition among the discriminating seller's

customers. See Coastal Fuels of P.R., Inc. v. Caribbean Petroleum

Corp., 79 F.3d 182, 188 (1st Cir. 1996); IA Areeda & Hovenkamp,

Antitrust Law ¶ 267c, at 329-30 (2d ed. 2000). In this case, the

district court found that CAPR had committed a primary line

violation by engaging in predatory pricing.4
-10-

Whether the district court has subject matter

jurisdiction over these types of violations is largely determined

by the Supreme Court's decision construing § 2(a) of the RobinsonPatman Act, 15 U.S.C. § 13(a), in Gulf Oil Corporation v. Copp

Paving Company, Inc., 419 U.S. 186 (1974). Gulf Oil, which

involved a secondary line violation, held, as all parties agree,

that § 2(a) of the Robinson-Patman Act did not extend jurisdiction

to the full extent of Congress's constitutional power granted by

the Commerce Clause. Id. at 199-200. The Court stated:

[T]he distinct "in commerce" language . . .

appears to denote only persons or activities

within the flow of interstate commerce . . . .

[T]he jurisdictional requirements of these

provisions cannot be satisfied merely by

showing that allegedly anticompetitive

acquisitions and activities affect commerce.

Id. at 195. To satisfy the "in commerce" requirement, one of the

discriminatory sales must cross a state line. See Id. at 195;

Coastal Fuels, 79 F.3d at 190. As this requirement is

jurisdictional, see Gulf Oil, 419 U.S. at 195, the burden to prove

the interstate character of the sales is on the party asserting

subject matter jurisdiction. See Bull HN Info. Sys., Inc. v.

Hutson, 229 F.3d 321, 328 (1st Cir. 2000) (the party asserting

jurisdiction has the burden of proving it). 

In an effort to meet this burden, Able points to three

transactions which it argues satisfy the "in commerce" requirement

of § 2(a): (1) CAPR's importation of raw sugar into Puerto Rico
5We have excluded language concerning the requirements as to

§ 7 of the Clayton Act, as no § 7 allegations are made here.

-11-

for refinement and sale; (2) Able's importation of refined sugar

from Florida; and (3) CAPR's sale of refined sugar to Tropical with

the knowledge that Tropical planned to export this sugar. 

A. Focus on Plaintiff's Activities

We first reject Able's argument that the "in commerce"

element may be satisfied by reviewing the interstate activities of

the plaintiff, whether or not the defendant has acted "in

commerce." Specifically, Able argues that it imports refined sugar

from Florida for sale in Puerto Rico, and this transaction crosses

state lines. We disagree that the plaintiff's sales can be used to

satisfy the "in commerce" requirement of § 2(a) of the RobinsonPatman Act. 

Following the language of the statute, the Supreme Court

in Gulf Oil held5 that in order to satisfy the "in commerce"

requirement of the § 2(a) of the Robinson-Patman Act, the

defendant's activities must satisfy the following test: 

Unless it appears . . . that the [defendant's]

alleged exclusive-dealing arrangements and

discriminatory sales occur in the course of

its interstate activities . . . and . . .

that at least one of [defendant's] allegedly

discriminatory sales was made in interstate

commerce . . . , plaintiff's claims must fail.
6To support the finding that Able's transactions could satisfy

the "in commerce" requirement, the district court erroneously read

language in Gulf Oil that states, "§ 2(a) applies where at least

one of the two transactions which, when compared, generate a

discrimination . . . crosses a state line." Gulf Oil, 419 U.S. at

200 (internal citation and quotation marks omitted). Gulf Oil

involved a secondary line violation which requires, among other

things, the discriminating seller to sell to one buyer (the favored

buyer) at a lower price than to another buyer (the disfavored

buyer). The two transactions to be compared, as this court's

opinion in Coastal Fuels explained, are "either the sale to the

favored buyer or the sale to the buyer allegedly discriminated

against." Coastal Fuels, 79 F.3d at 189. In either a primary line

violation or a secondary line violation, it is the sales by the

defendant which are the focus. 

-12-

Gulf Oil, 419 U.S. at 195.6 In other words, "if one of the

discriminatory sales is 'in commerce,' the seller is engaged in

commerce and discrimination has occurred in the course thereof."

IA Areeda and Hovenkamp, Antitrust Law ¶ 267c, at 329 (2d ed.

2000). The activities which must meet the in commerce requirements

are the sales by the defendant seller. 

A focus on the defendant's sales is consistent with

Congressional purpose. As the Supreme Court stated in Standard Oil

Company v. FTC, 340 U.S. 231 (1951), "the recognized purpose of the

Robinson-Patman Act [is] to reach the operations of large

interstate businesses in competition with small local concerns."

Id. at 237-38. Congress was concerned with predatory pricing by

defendants who engaged in interstate commerce, not by those who

acted purely locally. See Gulf Oil, 419 U.S. at 200-01 (reading

the clear language of § 2 to exclude from the reach of the statute
7CAPR suggests in its reply brief that the one-time

importation of raw sugar cannot satisfy the "in commerce"

requirement of § 2(a) because CAPR did not regularly import

products from across state lines and there was not a "constant

flow" of raw sugar into Puerto Rico. We express no view on the

validity of this argument.

-13-

"a multitude of local activities that hitherto have been left to

state and local regulation"). 

To impose liability on a defendant seller for activities

within the sole control of a plaintiff competitor would itself be

anti-competitive, and contrary to the purposes of the RobinsonPatman Act. A defendant seller must be able to know when it is

subject to Robinson-Patman Act liability in order to conform its

behavior to the law. We focus therefore only on the defendant's

behavior. We reject the argument that the sales activity of the

plaintiff, Able's importation of refined sugar from Florida, can be

the basis for satisfying the "in commerce" jurisdictional

requirement of the statute. 

B. Defendant's Alleged Interstate Transactions

1. CAPR's Importation of Raw Sugar Across State Lines

Able argues that even though CAPR's sales of refined

sugar did not cross state lines, these sales satisfy the "in

commerce" requirement because CAPR imported 12,000 tons of raw

sugar,7 and CAPR's refinement in Puerto Rico of this imported sugar

did not remove the sugar from the "flow of commerce." This is an

aspect of the doctrine concerned with the "flow backward into
-14-

interstate transactions in raw materials." IA Areeda & Hovenkamp,

Antitrust Law ¶ 267b, at 324 (2d ed. 2000). 

 Whatever the present contours of the in the "flow of

commerce" doctrine under the Robinson-Patman Act, it certainly does

not apply when there are material differences between the product

imported and the product sold after undergoing processing. The

fact that the raw materials were imported into Puerto Rico does not

necessarily mean that the "in commerce" requirement of § 2(a) of

the Robinson-Patman Act is met. See Belliston v. Texaco, Inc., 455

F.2d 175, 180 (5th Cir. 1972) (The production of gasoline from

crude oil is a "highly complex process" which interrupts the flow

of commerce). Indeed the "flow of commerce" ends when these raw

materials or goods are "transformed in a material way." See IA

Areeda & Hovenkamp, Antitrust Law ¶ 267b, at 324 (2d ed. 2000).

CAPR argues that the imported raw sugar was transformed

in such a material way when it underwent refining into refined

sugar. CAPR states that the raw sugar was "extensively processed

within Puerto Rico, resulting in an alteration of the nature of the

product" and that the refinement process "extract[s] molasses and

other non-sugar minerals [from] the raw sugar."

We agree that the refinement of raw sugar into refined

sugar has transformed this product so that it cannot be fairly said

to continue to be in the flow of commerce. This case is

distinguishable from cases where courts have found the flow of
8The district court did not make a specific finding as to

whether the refinement process interrupted the flow of commerce.

In response to CAPR's argument that it did, the district court

stated, "even if the CAPR's refined sugar is not considered to be

in the flow of commerce, Able Sales' refined sugar, which does not

undergo any processing, is undeniably within the flow of commerce."

-15-

commerce was not interrupted. This is not a case in which the same

product was temporarily stored in the state of ultimate sale. See,

e.g., Standard Oil Co., 340 U.S. at 237-38 (temporary storage of

gasoline does not deprive the gasoline of its interstate

characteristic). Nor is it a case in which the resulting sold

product was essentially the same as the imported product. See,

e.g., Dean Milk Co. v. FTC, 395 F.2d 696, 715 (7th Cir. 1968);

Foremost Dairies, Inc. v. FTC, 348 F.2d 674, 678 (5th Cir. 1965)

(both holding that the processing of milk imported from out of

state before local resale is not enough to remove the milk from the

flow of commerce). 

Despite stating that the refinement of sugar involves

"negligible processing" and that the processes involved in this

case are similar to those involved in the processing of milk as in

the examples given above, the plaintiff does not seriously dispute

CAPR's claim as to the nature of the refinement process.8

Accordingly Able has not met its burden of showing that the

imported raw sugar remained in the flow of commerce. This

transaction does not satisfy the "in commerce" requirement. 
9We do not understand Able to say it could not buy from CAPR

at the same price Tropical did for sugar, whether intended for

export or not. Nor does Able say that it and Tropical compete with

each other to export sugar from Puerto Rico. We understand Able's

argument to be based on an overall theory of predatory pricing,

that CAPR artificially lowered its price in order to drive Able,

its competitor in the distribution of sugar, out of business. 

-16-

2. CAPR's Sale to Tropical for Export

In contrast with Able's previous argument concerned with

backward interstate movement of materials, Able makes a forward

flow argument as its final argument. See IA Areeda & Hovenkamp,

Antitrust Law ¶ 267b, at 324 (2d ed. 2000). Whether CAPR's sale of

sugar to Tropical, knowing that Tropical planned to export the

sugar, can satisfy the "in commerce" requirement is a more complex

question. 

From the 2002 sales summary, it appears that CAPR

apparently made six sales of an indeterminate number of two pound

bags of refined sugar and four sales of five pound bags of refined

sugar to Tropical in 2002. Two of those sales were in the $43 to

$46 range per hundredweight, and the rest were in the $30 range.

A notation next to the sales to Tropical suggests that those sales

received a special discount because Tropical intended to export the

sugar, presumably outside of Puerto Rico. These sales were likely

discounted because CAPR does not have to pay an excise tax on such

sales, as explained by Able's counsel.9 

We take Able's argument to be a permutation of the "flow

of commerce" theory: the initial sale between CAPR and Able took
-17-

place intrastate, but the goods remained in the "flow of commerce"

because they were to be exported by Tropical and CAPR's knowledge

of that puts the goods into the flow of commerce. The interstate

activity of the buyer is therefore attributed back to CAPR, the

intrastate seller, under the theory.

This forward flow theory may be arguable on certain

facts. Cases under statutes based on the full scope of Congress'

constitutional commerce power over certain types of intrastate

transactions have suggested "[s]o far as the [intrastate] sales are

for shipment to other States or to foreign countries, it is idle to

contend that they are not sales in interstate or foreign commerce

and subject to congressional regulation." Currin v. Wallace, 306

U.S. 1, 10 (1939) (challenging the Tobacco Inspection Act of 1935);

see also United States v. Rock Royal Co-Op., 307 U.S. 533, 568-69

(1939) (challenging the Secretary's regulation of the handling of

milk in the New York metropolitan area under the Agricultural

Marketing Agreement Act of 1937). But of course, the scope of the

"in commerce" clause of the Robinson-Patman Act is less than the

constitutional reach. 

While Gulf Oil held that a mere nexus to interstate

commerce was insufficient, it did not decide whether some

intermediate definitions of "in commerce" to capture the "practical

consequences" of a discriminatory sale on national markets might be

within Congressional intent. Gulf Oil, 419 U.S. at 199. Indeed
-18-

the Court specifically noted the absence of two claims: that the

defendant made interstate sales or was "otherwise directly involved

in national markets" or that the "local market . . . is an integral

part of the interstate market in other component commodities or

products." Id. at 195-96. 

But the record before us does not establish and indeed

the plaintiff does not argue that either of those situations apply.

Ultimately, Able fails to prove that the "flow of commerce" test is

satisfied. The only evidence that Able points to concerning the

sale from CAPR to Tropical is a sales summary of the sale to

Tropical which has the notation, "[s]pecial price for exportation

of sugar, plus taxes," and a statement made by Able's trial counsel

to the district court that "[a]mong the sales that [CAPR] was able

to execute during that year, one of their clients, Tropical

Distributors, was sold sugar at a special price because he was

going to export sugar."

For several reasons this evidence is insufficient to

prove that the sale was "in commerce." The flow of commerce is

thought to end when the goods "are stored in a [seller's] warehouse

or storage facility for general inventory purposes," subject to an

exception for when the goods are purchased and then stored in the

seller's warehouse in response to a particular customer's needs.

See Zoslaw v. MCA Distributing Corp., 693 F.2d 870, 878 (9th Cir.

1982). That exception does not apply here. There is no evidence
-19-

that CAPR's sale to Tropical was anything other than final, with

Tropical taking possession of the sugar. Indeed, there is no

evidence whether Tropical actually ever exported the sugar. But

what Tropical, an independent company, intended to do with the

sugar, in these circumstances, is not germane to the "in commerce"

inquiry. 

While there is evidence of negotiation over price and

that CAPR expected that Tropical would export the sugar, there is

no evidence that CAPR exercised any control of the management,

business, or distribution decisions of Tropical. In cases where

the "flow of commerce" doctrine applied, the same entity has

engaged in both the intrastate and interstate transaction. See,

e.g., Standard Oil, 340 U.S. at 237 (intrastate sale was in the

flow of commerce; both the intrastate and interstate transactions

were conducted by the same entity); Foremost Dairies, 348 F.2d at

676-77 (same). And courts have held that to the extent that the

purchasers are independent distributors in their pricing and

marketing decisions, the "flow of commerce" is interrupted by the

sale of the product. See Zoslaw, 693 F.2d at 880; cf., Acme

Refrigeration of Baton Rouge, Inc. v. Whirlpool Corp., 785 F.2d

1240, 1243-44 (5th Cir. 1986) (a subsidiary's sales could not be

imputed to its parent company if the parent company did not

"control" the subsidiary). 
10Areeda also warns against reliance on a party's intentions,

as opposed to actions, except to cover the situations of "evasions

calculated to keep illegal activities entirely intrastate while

employing the channels of interstate commerce." IA Areeda &

Hovenkamp, Antitrust Law ¶ 267 b, at 324-327 (2d ed. 2000). 

-20-

In a situation where a wholly independent buyer purchases

from the defendant seller, and there is no evidence of collusion or

control between the seller and the independent buyer,10 the flow of

commerce has ended and the intrastate seller cannot be held to have

been made "in commerce" as a result of the subsequent interstate

sale made by the independent buyer.

III.

We hold that the district court did not have subject

matter jurisdiction over this suit as CAPR's allegedly

discriminatory sales were not "in commerce." We reverse the

decision of the district court, set aside the award of damages

against CAPR, and remand with instructions to dismiss the case for

lack of jurisdiction. Costs are awarded to CAPR.