2008 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

6-17-2008

Toledo Mack Sales v. Mack Trucks Inc

Precedential or Non-Precedential: Precedential

Docket No. 07-1811

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Recommended Citation

"Toledo Mack Sales v. Mack Trucks Inc" (2008). 2008 Decisions. Paper 937.

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PRECEDENTIAL

IN THE UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_______________

No: 07-1811

_______________

TOLEDO MACK SALES & SERVICE, INC.,

 Appellant,

 v.

MACK TRUCKS, INC.

_______________

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. No. 02-cv-4373)

District Judge: Honorable Ronald L. Buckwalter

_______________

Argued March 5, 2008 

Before: BARRY, JORDAN, and HARDIMAN, Circuit

Judges.

Filed: June 17, 2008

_______________
2

Robert L. Byer [ARGUED]

Wayne A. Mack, Jr.

J. Manly Parks

James H. Steigerwald

David A. Degnan

Duane Morris, LLP

30 S. 17 Street th

Philadelphia, PA 19103-4194

Counsel for Appellant

Barbara M. Mather [ARGUED]

Jeremy Heep

Christopher J. Huber

Barak A. Bassman

Pepper Hamilton LLP

3000 Two Logan Square

Eighteenth & Arch Streets

Philadelphia, PA 19103-2799

Counsel for Appellee

_______________

OPINION OF THE COURT

_______________

JORDAN, Circuit Judge.

Toledo Mack Sales and Service, Inc. (“Toledo”)

appeals from an order of the United States District Court for

the Eastern District of Pennsylvania granting judgment as a

matter of law in favor of Mack Trucks, Inc. (“Mack”) on

Toledo’s claim under § 1 of the Sherman Antitrust Act
3

(“Sherman Act”). Toledo also appeals the District Court’s

grant of summary judgment for Mack on Toledo’s claim

under the Robinson-Patman Act (“RPA”), and its grant of

judgment as a matter of law for Mack on Mack’s

counterclaim for misappropriation of trade secrets. Because

we conclude that Toledo presented at trial enough evidence to

permit the Sherman Act claim to go to the jury, we will vacate

the District Court’s disposition of that claim and remand for

further proceedings. We will affirm the District Court in all

other respects. 

I. Jurisdiction and Standard of Review

The District Court exercised jurisdiction over Toledo’s

claims pursuant to 28 U.S.C. § 1331, and over Mack’s

counterclaim pursuant to 28 U.S.C. §§ 1332 and 1367(a). 

We have jurisdiction under 28 U.S.C. § 1291. We exercise

plenary review over a district court’s decision to grant

judgment as a matter of law. Northview Motors, Inc. v.

Chrysler Motors Corp., 227 F.3d 78, 88 (3d Cir. 2000). 

Judgment as a matter of law is appropriate “only if, viewing

the evidence in the light most favorable to the nonmovant and

giving it the advantage of every fair and reasonable

inference,” a verdict in favor of the nonmovant cannot be

supported by legally sufficient evidence. Fair Hous. Council

v. Main Line Times, 141 F.3d 439, 442 (3d Cir. 1998)

(citations omitted).

Our review of a district court’s order granting

summary judgment is also plenary. Assaf v. Fields, 178 F.3d

170, 171 (3d Cir. 1999). Summary judgment is appropriate if
 For example, Toledo’s expert economist, Frank Gollop, 1

testified that “Mack [has] market power in both the heavy

duty vocational [low cab over engine truck market,] as well

as conventional straight truck markets, whether you look at

the U.S. as a whole or the U.S., excluding the west.” (App. at

A1676; see infra note 16). 

4

“the pleadings, the discovery and disclosure materials on file,

and any affidavits show that there is no genuine issue as to

any material fact and that the movant is entitled to judgment

as a matter of law.” Fed. R. Civ. P. 56(c). As in our review

of an order granting judgment as a matter of law, we must,

when reviewing a summary judgment order, view all of the

evidence in the light most favorable to the non-moving party

and draw all reasonable inferences in that party’s favor. 

Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S.

451, 456 (1992). 

II. Background

A. Mack and Toledo

Mack manufactures a variety of heavy-duty trucks and

is said to enjoy significant power within the market for such

vehicles. It distributes and services its products primarily 1

through a nationwide network of authorized dealers, each of

which is assigned a geographic region called an “Area of

Responsibility” (“AOR”). A dealer’s AOR is not exclusive,

and Mack’s stated policy is that dealers are free to sell

anywhere in the country. 
5

Most of Mack’s trucks are made to order from various

chassis, engine, and transmission options. When a potential

customer contacts a Mack dealer, the dealer obtains a list of

specifications from the potential customer and submits the list

to Mack. Mack then informs the dealer of the price at which

it is willing to sell the requested truck to the dealer. An

important aspect of that price is a transaction-specific

discount known as “sales assistance.” The amount of sales

assistance that Mack offers a dealer on a particular transaction

varies according to the nature of the relationship between the

dealer and the customer, the number of trucks ordered,

potential competition, and other factors. Dealers’ requests for

sales assistance are submitted to a Mack District Manager,

who has the authority to grant sales assistance up to a certain

dollar amount. Requests for additional sales assistance

beyond that amount typically must be submitted for approval

by a Regional Vice President. Requests for sales assistance

beyond the amount that a Regional Vice President may

authorize must be approved by Mack’s Controller. Of course,

the greater the discount that Mack provides to the dealer, the

lower the price that the dealer can profitably charge the

customer. Once Mack tells the dealer how much the dealer

will have to pay for a truck, the dealer then prepares a quote

for the potential customer, using, among other things, the

price it must pay Mack to fulfill the customer’s order. If the

customer accepts the dealer’s quote, the dealer orders the

truck from Mack and Mack custom-builds it according to the

customer’s specifications. The dealer then buys the truck

from Mack and sells it to the customer. However, if the

customer does not accept the dealer’s quote, the dealer
6

usually does not buy the truck from Mack and no sale takes

place. 

Often, potential customers will solicit bids from

multiple Mack dealers as well as from Mack’s competitors. 

Accordingly, Mack dealers compete against both non-Mack

dealers and, at least in theory, among themselves. Because

the amount of sales assistance Mack offers to a dealer on a

potential sale is a significant factor in determining the price at

which the dealer will in turn offer to sell a truck to a potential

customer, it is also a significant factor in determining whether

a potential customer decides to accept a dealer’s quote. 

Toledo was an authorized Mack dealer located, as one

might guess, in Toledo, Ohio. Dave Yeager has owned

Toledo since 1982. After acquiring Toledo, Yeager

implemented a business strategy that focused on offering the

lowest possible price to his customers. Until Mack

terminated Toledo’s status as an authorized dealer, Toledo

aggressively pursued its low-price sales strategy throughout

the country, competing on price against other Mack dealers

for sales in other dealers’ AORs. 

B. Toledo’s Sherman Act Claim

Toledo alleges that, by competing on price against

other Mack dealers, it began to undermine an unlawful

conspiracy that Mack and the dealers had developed to keep
 The present case is not the first time Toledo and Mack 2

have sparred over the antitrust implications of Mack’s

approach to providing sales assistance. Between March 1988

and October 1990, Toledo’s attorney sent several letters to

Mack claiming that Mack’s conduct violated § 1 of the

Sherman Act. In 1991, Toledo and Mack signed a release

which read: “Each of Mack and Toledo hereby fully releases

... the other ... from any and all claims, demands, losses,

expenses, action, cause of action, or liabilities whatsoever

arising out of or in connection with sales assistance ...

claimed, requested, approved, paid, credited, or rescinded as

of the date of this release ... .” (App. at A4460-61.)

7

prices on Mack products artificially high. According to 2

Toledo, this conspiracy has two parts. First, Toledo claims

that, beginning in the mid-1980s, individual Mack dealers

entered into “gentlemen’s agreements” not to compete with

each other on price. Second, Toledo alleges that, beginning

in 1989, Mack entered into an agreement with its dealers that

it would delay or deny sales assistance to any dealer who

sought to make an out-of-AOR sale, thereby protecting

dealers that sell within their own AORs. Toledo argues that

the combination of the horizontal collusion among dealers

and the vertical collusion between Mack and the dealers

violates § 1 of the Sherman Act because it prevents Mack

dealers from competing with one another, thereby allowing

Mack and its dealers to maintain artificially high prices on the

sale of Mack trucks. Toledo also asserts that Mack’s decision

to deny it sales assistance on out-of-AOR sales violates the

prohibition on discriminatory pricing embodied in the RPA. 
8

At trial, Toledo presented evidence to show the existence of

the alleged horizontal and vertical agreements.

1. Toledo’s Evidence of Agreements Among

Mack Dealers

Toledo offered testimony that Mack dealers agreed not

to compete with one another. Yeager, Toledo’s owner,

testified that, while he was attending a dealer meeting in the

late 1980s, two Mack dealers from New Jersey approached

him and told him that “the way it works” in New Jersey is

that “dealers don’t compete on price.” (App. at A513.)

Toledo also introduced deposition testimony by Jack Lusty, a

former District Manager for Mack who had been responsible

for supervising Toledo from 1998 to 2002. Lusty said that,

despite Mack’s official policy of allowing dealers to sell

anywhere, Mack dealers had unwritten agreements not to

compete with each other. Finally, Toledo introduced copies

of handwritten notes taken at a Mack sales meeting in 1999

by a consultant named Hallie Giuliano. At that time,

Giuliano was working on a project for Mack and, according

to her notes and an affidavit she signed later, she heard Ron

Gerhard, a Mack employee, say at the sales meeting that

“there was a ‘gentlemen’s agreement’ among Mack truck

dealers that they would sell only in their own areas of

responsibility. [Gerhard] also stated that some Mack truck

dealers did not honor the ‘gentlemen’s agreements’ and

engaged in sales efforts in other Mack dealers’ territories.” 

(App. at A3537.)
9

2. Toledo’s Evidence of an Agreement

Between Mack and Mack Dealers

Toledo also presented three categories of evidence to

show that Mack agreed with its dealers that it would deny

sales assistance on sales a dealer tried to make outside of that

dealer’s AOR. First, Toledo introduced recordings and notes

of conversations between Yeager and various Mack

executives referring to an informal policy against out-ofAOR sales. Second, Toledo introduced evidence that, in

1989, Mack adopted an official policy of denying sales

assistance on out-of-AOR sales. Toledo also presented

evidence that this policy was the result of a meeting between

Mack executives and dealer representatives. Finally, Toledo

presented evidence that, despite Mack’s claims to have

abandoned its prior policy, Mack in fact continued to enforce

that policy until at least the time Toledo filed suit in 2002. 

With respect to evidence of an informal policy, Toledo

introduced at trial notes taken in July 1988 by Richard Tracht,

the Mack District Manager responsible for overseeing Toledo

at that time. According to Tracht’s notes, Yeager asked him

whether Mack approved of Toledo’s practice of selling trucks

outside its AOR. Tracht recorded that he told Yeager that

“Mack did not like [Yeager’s] policy as he was selling the

majority of his trucks to already established Mack customers

and in doing so was breaking established profit structures ... 

[making] the Mack dealers look bad in customers [sic] eyes

causing a lot of concern between customers and dealers.” 

(App. at A3963.)
 Over the course of several years, Yeager had secretly 3

recorded a number of telephone conversations between

himself and various Mack executives, and those recordings

featured prominently in Toledo’s evidence at trial. 

10

Toledo also introduced a cartoon Tracht sent to

Yeager featuring two shabbily dressed men sitting in front of

a “poor house,” with one man saying to the other,“[m]y Mack

Distributorship did more business than any others in the state.

The trick was to undercut my competitor’s rates.” (App. at

A3286.) At the top of the cartoon, Tracht had typed: “This

could be what we are headed for if we do not stop selling

against other Mack dealers and concentrate on the real

competition. Think about it!!” Id. 

In addition, Toledo introduced a recording of a

December 1988 telephone conversation between Yeager and 3

Dennis Wurzelbacher, Mack’s then-Parts Promotion

Manager. During that conversation, Yeager and

Wurzelbacher discussed the sales of Mack parts called “glider

kits,” which are bare truck bodies without engines or

transmissions. Wurzelbacher told Yeager that “[t]he ...

problem we have is there are certain dealers that are sending

[sic] glider kits in other people’s backyards and we are

getting calls on it.” (App. at A3994.3) Yeager then asked

Wurzelbacher what Mack’s written policy was on dealers

competing with one another. Wurzelbacher responded that

he was not aware of an official company policy but that it

was his opinion that “there was a policy that would say, hey,
 The NDAC consists of two Mack executives and seven 4

dealers. The NDAC’s dealer members are elected by their

peers at an annual dealers meeting. Two of the seven dealer

representatives serve as NDAC’s Chairman and Vice

Chairman, and the remaining five serve as representatives for

five geographic regions. 

11

you’re only supposed to sell in your territory, okay?” (App.

at A3994.4.)

Toledo also introduced evidence that Mack adopted an

official policy of denying sales assistance on out-of-AOR

sales. In 1989, Mack issued Marketing Distribution Bulletin

38-89 (“Bulletin 38-89”). Under this “major ... change in

official truck pricing policy” (App. at A3147), Mack sought

to “enhance the competitive strength of Mack distributors

within their respective geographic areas of sales and service

responsibility.” Id. To that end, Mack eliminated sales

assistance on sales by a dealer outside the dealer’s AOR. The

express purpose of the policy was to create “increased profit

margins for Mack distributors as well as the Company.”

(App. at A3147.) 

Toledo introduced evidence at trial to show that

Bulletin 38-89 was the result of an agreement between Mack

and its National Distributor Advisory Council (“NDAC”) to

prevent dealers from engaging in sales outside their AORs.4

Specifically, Toledo introduced a recording of a July 1989

phone call between Yeager and Dick Murphy, a Mack Vice

President, during which Yeager asked Murphy whether the
12

NDAC had unanimously recommended Bulletin 38-89. 

Murphy responded, “Oh yes. Oh very much so. Very much

so. I mean, something as significant as this, it had to come

from all walks.” (App. at A4025.) Murphy indicated that

some dealers had complained about the new policy. He then

said “if there’s something that would justify [changing the

policy] we’ll get the [NDAC] together and perhaps we’ll

consider it.” (App. at A4024.)

Toledo also introduced a recording of another July

1989 conversation between Yeager and Gary Johnson,

Mack’s Vice President of Distributor Sales. During that

exchange, Johnson explained that he was “kind of new on the

job” and then went on to say that

the one thing I can tell you that would be fair

and legitimate advice is that I think this policy

[i.e., Bulletin 38-89] came about to a large

extent because of the voice of the distributor

organization. ... And if it’s probably ever gonna

be changed or modified, it will come about as a

result of the voice of the dealer organization.

(App. at A4058.)

Johnson then stated, “I can tell you, and this probably

is not a surprise, that when we talked about some of the

problems that come from selling outside of the territory, I

guess Toledo goes pretty close to the top of the list.” (App. at

A4059.) After some additional discussion, Yeager stated

that, “[a]s I understand what [the dealer network did,] they
 Of course, on this and other points, Mack introduced 5

evidence to contradict Toledo’s evidence. For example, Mack

provided evidence to support its argument that Bulletin 38-89

was solely the product of Mack management’s decisionmaking, not the NDAC’s. Bob Nuss, who was the NDAC

Chairman during 1989, testified that, on May 8, 1989, Mack

presented a draft of Bulletin 38-89 to the dealers at an NDAC

meeting. According to Nuss, the draft included provisions

eliminating sales assistance for out-of-AOR sales and

provisions providing that Mack would give dealers sales

assistance on one- and two- truck deals. Nuss also testified

that “[t]he new truck retail pricing policy was discussed

thoroughly”(App. at A2197), and that while the dealers had

insisted that Bulletin 38-89 include sales assistance on oneand two-truck deals, the decision to eliminate sales assistance

on out-of-AOR sales was made by Mack alone. Finally, Nuss

testified that, although Mack solicited comments on Bulletin

38-89 from NDAC members, the final language in Bulletin

38-89 which eliminated sales assistance on out-of-AOR sales

was identical to the language in the draft proposal circulated

at the May 8, 1989 meeting. Mack’s evidence, however, does

not override our obligation to view the evidence in the light

most favorable to Toledo. See Northview Motors, 227 F.3d

at 88 (explaining that judgment as a matter of law is

13

did not recommend [a] restrictional territorial system. ...

[A]nd if they did, it’s strictly a self-serving type of thing for

the dealers that have a lot of geographical area.” (App. at

A4062-63.) Johnson responded by simply saying “Umhmm.” (App. at A4063.) 5
appropriate “only if, viewing the evidence in the light most

favorable to the nonmovant and giving it the advantage of

every fair and reasonable inference, there is insufficient

evidence from which a jury reasonably could find liability”)

(citations and internal quotation marks omitted). 

 A Mack dealer would ordinarily have little difficulty 6

selling a truck it had bought from Mack because, as we have

explained, Mack trucks are specialized, custom-made goods

and a dealer ordinarily does not purchase a truck from Mack

14

In October 1989, shortly after it had adopted Bulletin

38-89, Mack issued a revised policy, Marketing Distribution

Bulletin Addendum 38-89A (“Bulletin 38-89A”). Bulletin

38-89A provided that “[s]ales [a]ssistance shall be uniformly

made available to ALL Mack distributors on an equal basis,

actively and directly involved in prior negotiations with the

retail customer for the purchase of new Mack vehicles.” 

(App. at A3982 original emphasis). Toledo presented

evidence at trial, however, indicating that, despite the new

policy, Mack and some of its dealers continued to work in

concert to prevent other Mack dealers from selling outside

their individually assigned AORs.

Regarding the period from 1989 to 1998, Toledo

introduced a recording of a January 1991 telephone

conversation between Yeager and Kevin Flaherty, Mack’s

Vice-President for Sales. During the conversation, Yeager

and Flaherty discussed some difficulties Yeager was having

selling three trucks Toledo had bought from Mack. Yeager 6
until a customer actually places an order with the dealer. 

However, Yeager explained to Flaherty during their

conversation that Toledo had ordered the three trucks

discussed above because Mack “was in bad need of orders at

that time” and had “encouraged [Toledo] to place an order.”

(App. at A4087.) 

15

requested sales assistance to sell those trucks outside of his

AOR. Flaherty told him, however, that “our policy has not

changed” and that Mack would provide sales assistance if

Yeager sold the trucks inside his AOR but would not “give a

whole lot of hope” if the sales were outside of it. (App. at

4085-86.) Flaherty emphasized, “[O]bviously, we’re looking

to protect our distributors. That’s always been the backbone

of Mack is to protect our distributors.” (App. at 4086.)

During a second conversation between Yeager and Flaherty

in June 1991, Flaherty stated that “[if] there’s ever a

manufacturer that protected their distributor organization ...

It’s the Mack truck company, to a fault.” (App. at 4128.)

Toledo also introduced a recording of a conversation

that took place in 1996 between Yeager and Bob Grussing,

Mack’s Parts Manager. Grussing told Yeager that dealers

“constantly want Mack to get involved in these territorial

disputes ... and to protect them from one another. And right

or wrong, we do that, you know.” (App. at A4147.)
16

Grussing also stated that such protection was a “long standing

tradition” and that “I don’t know if I can break that.” Id.

To establish that Mack continued to participate in an

illegal conspiracy with its dealers from 1998 to 2002, Toledo

points to various conversations between Jack Lusty, the Mack

District Manager responsible for supervising Toledo during

that time period, and Jeff Yelles, a Mack Regional Vice

President who was Lusty’s immediate superior. Lusty

testified that Yelles told him in 2002 that he “kn[ew] what

[Toledo] [was] trying to do. [Toledo] wants to establish

discounts and sell trucks all over the place. We are not going

to let this happen.” (App. at A2824.) Lusty also testified that

Yelles told him that Yeager was “just soliciting customers on

price; ... we have to beat the living shit out of him. ... [H]e is

a son of a bitch.” (App. at A2818.) Yelles also allegedly told

Lusty, in a profanity-laced burst of anger, that Toledo was not

“play[ing] by the rules” and that someone “should take

[Yeager] out.” (App. at A2825.)

Toledo presented evidence that Yelles took affirmative

steps to prevent Toledo from selling outside its AOR. Lusty

testified that, in 2000, Yelles instructed him to tell Toledo to

stop competing against another Mack dealer for a particular

sale to a customer located outside Toledo’s AOR. Yelles told

Lusty to tell Toledo that Mack would not release sales

assistance on any sale by Toledo to that customer. 

Accordingly, Lusty sent Yeager a fax instructing him to

“cease his predatory approach to customer prospecting.” 

(App. at 2812.) Yelles himself admitted at trial that, on at

least one occasion in 2003, he asked Mack’s Controller, Steve
17

Polzer, to delay approving Toledo’s request for sales

assistance so that another Mack dealer could get the

customer’s business instead. 

Finally, Lusty testified that, after 1998, Mack used the

sales assistance process to “control dealers.” After rescinding

the 1989 policy, Mack implemented a system of “crosschecks” which were ostensibly designed to ensure that, in a

situation where an out-of-AOR dealer competed with an inAOR dealer, both dealers received the same amount of sales

assistance from Mack. The system was presented by Mack as

requiring equal treatment. Supposedly, a dealer who wished

to make an out-of-AOR sale had to indicate to its District

Manager the area into which the dealer wished to make the

sale before it could receive sales assistance. The dealer’s

District Manager would then conduct a cross-check by

contacting the District Manager responsible for that AOR and

informing him or her of the potential sale. If it turned out that

the dealer into whose AOR the sale would be made was

competing for the same deal, then the in-AOR District

Manager and the out-of-AOR District Manager were to

ensure that both dealers received equal amounts of sales

assistance.

Despite the stated purpose of the cross-checks,

however, Lusty testified that from 1999 to 2003, the crosschecks were often used as an “early warning system” to let an

in-AOR dealer know when an out-of-AOR dealer was

attempting to make a sale inside the in-AOR dealer’s territory.

(App. at A2877.) Lusty explained that District Managers

would often grant requests for sales assistance verbally rather
18

than using Mack’s computer system, so that in-AOR dealers

could give a potential customer a quote before an out-of-AOR

dealer could obtain a quote on the same deal. Lusty also said

that, because there was no record of verbal grants of sales

assistance, District Managers would sometimes use this tactic

to extend a discount to a dealer without conducting a crosscheck.

C. Toledo’s RPA Claim

Toledo also introduced expert testimony at trial to

support its contention that Mack had offered it less favorable

sales assistance than it provided to other dealers. That

testimony was based on a comparison of the average amount

of sales assistance Mack offered to Toledo as compared with

the average amount of sales assistance Mack had offered to

other dealers located in the same general geographic area. 

Toledo’s expert testified that this comparison demonstrated

that Toledo received far less sales assistance than other

similarly situated Mack dealers. However, the expert did not

compare the amount of sales assistance Mack offered to

Toledo and to other dealers when Toledo and another dealer

competed directly against one another for a sale to the same

customer. Therefore, the expert was unable to offer an

opinion about whether Mack had discriminated against

Toledo in sales involving head-to-head competition with

another Mack dealer. 
19

D. Mack’s Counterclaim for Misappropriation of

Trade Secrets

Once sued, Mack fired back with a counterclaim

alleging that Toledo had misappropriated a proprietary

software program called MACSPEC 2001, which contained

detailed parts specifications for every truck part that Mack

manufactures. Mack had provided a copy of that program to

Toledo so that it could adequately assist customers who

needed replacement parts or repair work. However,

according to Mack, Toledo gave a copy of MACSPEC 2001

to PAI Industries, Inc., one of Mack’s competitors. 

Contending that Toledo had violated both its obligation not

to misappropriate trade secrets and the terms of the

MACSPEC 2001 license agreement, Mack terminated

Toledo’s distributorship agreement. Toledo responded with a

protest to the Ohio Vehicle Dealer’s Board, which ruled in

favor of Toledo. Mack unsuccessfully appealed to the

Franklin County Court of Common Pleas. Mack then further

appealed to the Tenth Appellate District of the Ohio Court of

Appeals. That court reversed and held that Mack was

justified in terminating Toledo’s distributorship agreement

because the MACSPEC 2001 software was a proprietary

trade secret which Toledo had misappropriated by

transferring it to a Mack competitor without Mack’s

permission. Mack Trucks, Inc. v. Motor Vehicle Dealers Bd.,

No. 05AP-768, 2006 WL 1495122, at *6-10 (Ohio Ct. App.

June 1, 2006).
 Because of the 1991 release between it and Mack, (see 7

supra note 2) Toledo limited its 2002 claims to “conduct by

Mack subsequent to the date of the release.” (Appellant Br.

at 16-17) (emphasis added).

20

E. Procedural History

Toledo filed this case against Mack on July 7, 2002.7

As already noted, Toledo’s complaint alleged that Mack and

its distributors had entered into an illegal conspiracy in

restraint of trade in violation of § 1 of the Sherman Act, and

that Mack had violated the RPA by engaging in

discriminatory pricing. Again, as noted, Mack

counterclaimed for misappropriation of trade secrets. 

Prior to the trial, the District Court granted summary

judgment in favor of Mack on Toledo’s RPA claim,

concluding that it was barred as a matter of law under Volvo

Trucks North America, Inc. v. Reeder-Simco GMC, Inc., 546

U.S. 164 (2006). At the close of evidence at trial, the District

Court granted Mack’s motion for judgment as a matter of law

on Toledo’s Sherman Act claim. The Court also granted

Mack’s motion for judgment as a matter of law on the

misappropriation of trade secrets counterclaim. As to the

latter ruling, the Court concluded that the favorable judgment

for Mack in the Ohio Court of Appeals was preclusive as to

the issue of Toledo’s liability because the Ohio judgment

encompassed every element necessary to show a

misappropriation of trade secrets. The District Court then

submitted Mack’s misappropriation counterclaim to the jury
21

on the issue of damages. The jury returned a verdict of

$11.34 million.

In an opinion and order denying Toledo’s post-trial

motion for reconsideration, the District Court explained that

Toledo’s § 1 claim was barred by the applicable four-year

statute of limitations because “Yeager knew or had reason to

know of the alleged conspiracy as early as 1989.” (App. at

A5.) The District Court then presented a summary of

Toledo’s evidence within the limitations period and, relying

on Supreme Court cases discussing the special restrictions on

the inferences that may permissibly be drawn from the

evidence in antitrust cases, concluded that none of that

evidence showed that an illegal conspiracy existed because

“[t]he inferences [Toledo] wants to draw fall short of

reasonable ones in the antitrust context.” (App. at A8.)

Finally, the District Court reduced the jury’s damages award

to $1.6 million, which Mack accepted. Toledo then filed this

timely appeal. 

III. Discussion

Toledo raises three issues on appeal. First, it contends

that it adduced sufficient evidence for its § 1 claim to go the

jury and that, therefore, the District Court erred by granting

judgment as a matter of law on that claim. Second, Toledo

argues that the District Court erred in granting summary

judgment in favor of Mack on its RPA claim because the

database discussed at trial showed that Mack sold trucks to

other dealers at favorable prices that it refused to extend to

Toledo. Finally, Toledo contends that Mack’s counterclaim
 Collusion between a manufacturer and its dealers to keep 8

a product’s price artificially high is likely to be an unusual

phenomenon because other manufacturers and dealers of the

same or substitute products can, simply by selling at a lower

price, render the colluding parties’ agreement economically

unwise. See Phillip E. Areeda, Herbert Hovenkamp,

Fundamentals of Antitrust Law § 1603f (3d ed. 2007)

(explaining that “[d]ealers cannot win excess profit through a

distribution restraint unless a manufacturer who [agrees to

assist] them has sufficient market power to make a restriction

on output feasible and profitable.”). However, collusion

between manufacturers and dealers is feasible when one

manufacturer dominates the market, or when all

manufacturers in the market enter into agreements with their

dealers to keep prices artificially high. Id. §§ 16.03f3,

16.03f4. As discussed more fully herein, infra at 37-41, such

22

for misappropriation of trade secrets is barred by

Pennsylvania’s “gist of the action” doctrine. We discuss each

of these arguments in turn.

A. Toledo’s Sherman Act § 1 Claim

Section 1 of the Sherman Act prohibits “a conspiracy

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

... .” 15 U.S.C. § 1. On appeal, the parties’ primary

contentions concern whether Toledo’s evidence was sufficient

to allow a jury to consider whether illegal agreements existed

among Mack dealers and between Mack dealers and Mack

itself. Before turning to the parties’ arguments on this point, 8
collusive agreements may be unlawful under the rule of

reason analysis applied to vertical price restraints under § 1. 

See, e.g., Leegin Creative Leather Prods., Inc., v. PSKS, Inc.,

127 S. Ct. 2705, 2717 (2007) (explaining that “[t]o the extent

a vertical agreement setting minimum resale prices is entered

upon to facilitate [a dealer] cartel, it ... would need to be held

unlawful under the rule of reason”).

23

however, we address the District Court’s conclusion that

Toledo’s suit was barred by the statute of limitations.

1. The Statute of Limitations

Section 1 claims are subject to a four-year statute of

limitations. 15 U.S.C. § 15b. In granting Mack’s motion for

judgment as a matter of law on Toledo’s § 1 claim, the

District Court declined to consider pre-1998 evidence of the

existence of a conspiracy because it concluded that “Yeager

knew or had reason to know of the alleged conspiracy as early

as 1989 and thus the suit filed 13 years later [in 2002] was

barred by the four-year statute of limitations.” (App. at A5.) 

The District Court then went on to examine whether evidence

of events within the limitations period from 1998 to 2002 was

sufficient to allow the jury to conclude that a conspiracy

existed. The District Court concluded that the 1998 to 2002

evidence was not sufficient because “the inferences [Toledo]

wants to draw fall short of reasonable ones in an antitrust

context.” (App. at A7 (citing In re Baby Food Antitrust Litig.,

166 F.3d 112, 124 (3d Cir. 1999)).)
24

Toledo argues that the District Court erred by requiring

it to show exclusively with post-1998 evidence that a

conspiracy existed. Instead, Toledo contends that the District

Court should have considered whether all of the evidence it

presented, including evidence of events prior to 1998, was

sufficient to allow a jury to conclude that, from 1998 until at

least 2002, Mack and its dealers engaged in overt acts in

furtherance of a continuing conspiracy that began before

1998. We agree. Although Toledo claims that the conspiracy

began in 1989, long before the limitations period, it presented

evidence from which a rational jury could conclude that the

unlawful agreements continued in effect through the time of

trial in 2002. Toledo seeks damages only for acts committed

in furtherance of the conspiracy from 1998 to 2002, within the

limitations period, but it is entitled to present evidence from

outside that period to sustain its burden of proof.

The Supreme Court has held that “[g]enerally, a cause

of action under § 1 accrues and the statute of limitations

begins to run when a defendant commits an act that injures

the plaintiff’s business.” Zenith Radio Co. v. Hazeltine

Research, Inc., 401 U.S. 321, 338 (1971) (citation omitted). 

However, “[i]n the context of a continuing conspiracy to

violate the antitrust laws, ... each time a plaintiff is injured by

an act of the defendant[] a cause of action accrues to [it] to

recover the damages caused by that act ... and ... as to those

damages, the statute of limitations runs from the commission

of the act.” Id. (citations omitted); see also Hanover Shoe,

Inc. v. United Shoe Mach. Corp., 392 U.S. 481, 502 n.15

(1968) (concluding that the plaintiff could bring a § 1 claim in

1955 for conduct which first began in 1912 because the
 Both in its brief and at oral argument, Mack argued that 9

the District Court’s decision was correct because Toledo’s

evidence and the inferences that could be drawn from that

evidence would not allow a jury to conclude that any illegal

conspiracy ever existed or, alternatively, that any conspiracy

continued in effect during the limitations period. By its own

terms, however, that argument is about the sufficiency of

Toledo’s evidence, not about the legal rules governing

continuing conspiracy cases under § 1. In a related argument,

Mack contends that the 1991 release between it and Toledo,

see supra note 2, bars Toledo’s § 1 claim. We disagree. The

release does not apply to claims for antitrust damages based

25

defendant’s actions were “conduct which constituted a

continuing violation of the Sherman Act, and which inflicted

continuing and accumulating harm on [the plaintiff]”). 

Consistent with that precedent, we have stated that “a

conspiracy’s refusal to deal, which began outside the

limitations period, may be viewed as a continuing series of

acts upon which successive causes of action may accrue.” In

re Lower Lake Erie Iron Ore Antitrust Litig., 998 F.2d 1144,

1173 (3d Cir. 1993) (citation and internal quotation marks

omitted). Therefore, we hold that Toledo was not required to

prove an illegal conspiracy with evidence restricted to the

limitations period. Its burden was, rather, to present evidence

sufficient to allow a rational jury to conclude that Mack and

its dealers committed during the limitations period overt acts

in furtherance of an illegal conspiracy or conspiracies, even if

the conspiracies began before the limitations period. We turn 9
on events which occur after the execution of the release. Cf.

Three Rivers Motor Co. v. Ford Motor Co., 522 F.2d 885,

896 n.27 (3d Cir. 1975) (holding that parties may not waive

liability for future antitrust violations). Although the release

prevents Toledo from seeking damages for events that

occurred before 1991, Mack cites no authority, nor have we

found any, for the proposition that a release prevents a party

from relying on events that occurred prior to the signing of

the release to establish facts necessary to show a continuing

conspiracy.

26

now to whether the evidence that Toledo presented at trial

meets that standard. 

2. The Sufficiency of Toledo’s Evidence

At the outset, we are mindful that, under our standard

of review, we must “expose the evidence to the strongest

light favorable to the party against whom the motion [for

judgment as a matter of law] is made and give [that party] the

advantage of every fair and reasonable inference.” Raiczyk v.

Ocean County Veterinary Hosp., 377 F.3d 266, 269 (3d Cir.

2004) (citation omitted). In addition, we must not “tightly

compartmentalize the evidence,” but review it “as a whole to

see if it together supports an inference of concerted action.”

Petruzzi’s IGA Supermarkets, Inc. v. Darling-Delaware, Co.,

Inc., 998 F.2d 1224, 1230 (3d Cir. 1993). 

Of course, we must comply with those standards in the

context of the precise language of § 1 and the cases
27

interpreting it. As noted, § 1 prohibits “[e]very contract,

combination ... or conspiracy, in restraint of trade.” We have

explained that “[d]espite its broad language, Section 1 only

prohibits contracts, combinations, or conspiracies that

unreasonably restrain trade.” In re Flat Glass Antitrust

Litig., 385 F.3d 350, 356 (3d Cir. 2004) (original emphasis). 

Thus, to succeed on a § 1 claim, a plaintiff must meet two

requirements. First, the plaintiff must show that the

defendant was a party to a “contract, combination ... or

conspiracy.” Second, the plaintiff must show that the

conspiracy to which the defendant was a party imposed an

unreasonable restraint on trade.

In the present case, Toledo alleges that Mack dealers

entered into an unlawful conspiracy among themselves to fix

prices, and Toledo further alleges that Mack agreed to

support that conspiracy by, among other things, denying sales

assistance to a dealer that, like Toledo, attempted to compete

against other Mack dealers on price. In what follows, we

analyze both of those purported agreements – the horizontal

agreement among the dealers, and the vertical agreement

between Mack and the dealers – to determine whether Toledo

presented sufficient evidence for a jury to decide that each

agreement existed and that each agreement was a conspiracy

that unreasonably restrained trade in violation of § 1. As

explained more fully below, special rules govern our analysis

of Toledo’s evidence for the existence of the agreements and

their legality. 
28

a. Toledo’s Evidence of an Unlawful

Agreement Between Mack Dealers

Because § 1 of the Sherman Act by its terms requires

concerted action, “unilateral activity, no matter what its

motivation, cannot give rise to a § 1 violation.” Rossi v.

Standard Roofing, Inc., 156 F.3d 456, 465 (3d Cir. 1998). 

To show concerted action, a plaintiff must produce evidence

that would allow a jury to infer that “the alleged conspirators

had a unity of purpose or a common design and

understanding, or a meeting of the minds.” Monsanto Co. v.

Spray-Rite Serv. Corp., 465 U.S. 752, 764 (1984). Regarding

the types of evidence which may be used to show that the

concerted action requirement is met, we have said that,

[w]hile direct evidence, the proverbial

‘smoking-gun,’ is generally the most

compelling means by which a plaintiff can

make out his or her claim, it is also frequently

difficult for antitrust plaintiffs to come by. 

Thus, plaintiffs have been permitted to rely

solely on circumstantial evidence (and the

reasonable inferences that may be drawn

therefrom) to prove a conspiracy.

 

Rossi, 156 F.3d at 465. 

Further, to avoid punishing lawful conduct, the

Supreme Court has placed certain limits on the inferences that

may be drawn from the evidence in antitrust cases. The

Court has explained that certain evidentiary restrictions are
 We have held that the strictures on circumstantial 10

evidence in antitrust cases

only appl[y] when the plaintiff has failed to put

forth direct evidence of conspiracy. Thus, in

29

necessary in antitrust cases since “mistaken inferences ... are

especially costly because they chill the very conduct the

antitrust laws are designed to protect.” Matsushita Elec.

Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 594 (1986). 

Therefore, “antitrust law limits the range of permissible

inferences from ambiguous evidence in a § 1 case. ...

[C]onduct as consistent with permissible competition as with

illegal conspiracy does not, standing alone, support an

inference of antitrust conspiracy.” Id. at 588 (citations

omitted). In addition, “if the factual context renders the

plaintiff’s claim implausible – if the claim is one that simply

makes no economic sense – a plaintiff must come forward

with more persuasive evidence to support its claim than

would otherwise be necessary.” Rossi, 156 F.3d at 466

(quoting Monsanto, 475 U.S. at 587) (punctuation omitted). 

Finally, “in evaluating whether a genuine issue for trial exists,

the antitrust defendants’ economic motive is highly relevant. 

If the defendants had no rational economic motive to

conspire, and if their conduct is consistent with other, equally

plausible explanations, the conduct does not give rise to an

inference of conspiracy.” Id. (quoting Monsanto, 475 U.S. at

596) (punctuation omitted). Nevertheless, we have held that

those limits on inferences do not apply to a plaintiff’s direct

evidence of an unlawful agreement under § 1. Id. 

10
direct evidence cases, the plaintiff need not

adduce circumstantial evidence that tends to

exclude the possibility that the alleged

conspirators acted independently, and there

need not be an inquiry into the plausibility of

the defendants’ claim or the rationality of

defendants’ economic motives. This is because

when the plaintiff has put forth direct evidence

of conspiracy, the fact finder is not required to

make inferences to establish facts, and therefore

the Supreme Court’s concerns over the

reasonableness of inferences in antitrust cases

evaporate. 

Rossi, 156 F.3d at 466. 

30

In the present case, Toledo presented several pieces of

direct evidence for the existence of one or more agreements

among Mack dealers not to compete with each other. 

Because we conclude that Toledo’s direct evidence is

sufficient to allow a jury to conclude that a conspiracy not to

compete existed among Mack dealers, we need not apply the

rules restricting inferences drawn from circumstantial

evidence.

Toledo’s first piece of evidence of an agreement not to

compete was Yeager’s testimony that, in the early 1980s,

other Mack dealers told him bluntly that dealers “did not

compete on price.” (App. at A513.) Second, Mack consultant

Hallie Giuliano testified that in 1999, Ron Gerhard, a Mack
31

employee, told her that “there was a ‘gentlemen’s agreement’

among Mack truck dealers that they would sell only in their

own AORs ... [but] that some Mack truck dealers did not

honor the ‘gentlemen’s agreements’ and engaged in efforts in

other Mack dealers’ territories.” (App. at A3537.) Finally,

when Jack Lusty, Yeager’s district manager from 1998 to

2002, was asked whether “some Mack dealers [had] unwritten

understandings with other Mack dealers that they wouldn’t

compete in each other’s AOR’s,” he responded that “[t]here

were – there were some Mack dealers that – and I’ve heard

them called gentlemen’s agreements, where they wouldn’t

compete in other dealers’ areas ... .” (App. at A2877.)

While admitting that the record before us contains

statements about agreements between dealers, Mack argues

that Toledo’s evidence is insufficient to give to a jury because

the record does not reveal the exact extent of any such

agreements. Viewing the evidence in the light most favorable

to Toledo, Mack’s argument is unpersuasive. It may well be

that Toledo’s inability to present the details of any agreement

among dealers would leave a jury unpersuaded that such

agreements did in fact exist. That, however, is not our

inquiry. Instead, we must consider whether the evidence

entitles Toledo to place that question before the jury at all. 

We believe it does. Simply put, Toledo’s evidence was

sufficient because a jury considering it could believe it and

reasonably conclude that agreements not to compete did exist
 Consistent with our earlier discussion of the principles 11

governing continuing conspiracy cases, we note that Toledo’s

evidence of agreements between dealers includes statements

about events that took place in the 1980s, outside the

limitations period, as well as later statements and evidence

about the existence of horizontal agreements.

32

among Mack dealers. The possibility that a jury might not 11

believe the direct evidence does not, in itself, mean that the

jury should not consider it. 

Having concluded that Toledo’s evidence was

sufficient to show the existence of a non-competition

agreement among Mack dealers, we turn to whether the jury

could conclude that the agreement was an unreasonable

restraint of trade in violation of § 1. When considering the

legality of an agreement under § 1, two different methods of

analysis may be used, depending upon the nature of the

agreement at issue. “Certain restraints of trade are per se

unreasonable, while others require more searching analysis

under the ‘rule of reason.’” Flat Glass, 385 F.3d at 356. Per

se restraints are “conclusively presumed to unreasonably

restrain competition ‘without elaborate inquiry as to the

precise harm [they have] caused or the business excuse for

[their] use.’” Id. (quoting Rossi, 156 F.3d at 461). The

limited categories of agreements subject to per se treatment

include “horizontal price-fixing - i.e., where competitors at

the same market level agree to fix or control the prices they

will charge for their respective goods or services ... .” Id.

(citations and internal punctuation and quotation marks
33

omitted); see also Leegin, 127 S. Ct. at 2717 (“A horizontal

cartel among ... competing retailers that ... reduces

competition in order to increase price is, and ought to be, per

se unlawful.”). It is readily apparent that, if there were an

agreement among Mack dealers as alleged, it involved

horizontal competitors colluding to control prices and,

therefore, would be per se unlawful. Thus, viewed in the

light most favorable to Toledo, the evidence shows a

horizontal agreement that violates § 1. 

b. Toledo’s Evidence of an Unlawful

Agreement Between the Dealers

and Mack

Obviously, evidence sufficient to allow a jury to

conclude that illegal agreements existed among Mack dealers

does not establish that Mack itself was a party to an

agreement that violated § 1 of the Sherman Act. Toledo

contends, however, that it presented sufficient evidence to

allow a jury to conclude that Mack did enter into an illegal

vertical agreement with its dealers. According to Toledo, it

showed an agreement between the dealers and Mack that

Mack would support the dealers’ illegal conspiracy to control

prices, and that one tool Mack employed to that end was a de

facto ban on out-of-AOR sales by dealers like Toledo that

sought to compete with other dealers on price. 

Our analysis of the alleged vertical agreement between

Mack and its dealers follows the same pattern we used when

considering the alleged horizontal agreement among the
 We reiterate that, under Rossi, we need not apply the 12

strictures on inferences drawn from ambiguous circumstantial

evidence that would apply in the absence of direct evidence of

a conspiracy. Nevertheless, in addition to Toledo’s direct

evidence of an agreement between the dealers and Mack,

Toledo had indirect evidence of that conspiracy, including its

evidence that Mack acted contrary to its own stated policy of

allowing out-of-AOR sales. Even under Monsanto’s

limitations on inferences from circumstantial evidence, that

evidence appears to have been sufficient to create a jury

question as to whether there was an agreement between Mack

and its dealers.

34

dealers. First, we consider Toledo’s evidence of the

agreement, and second, we consider the agreement’s legality.

Toledo presented direct evidence that Mack agreed

with its dealers to support their anti-competitive agreements

and that it did so by, among other things, refusing to offer

sales assistance to dealers who sought to sell outside their

AORs. Jack Lusty testified that Jeff Yelles told him in 12

2002, during the time when Mack ostensibly permitted its

dealers to sell everywhere, that he “kn[ew] what [Toledo]

[was] trying to do. [Toledo] wants to establish discounts and

sell trucks all over the place. We are not going to let this

happen.” (App. at A2824.) Lusty also testified that Mack

executives used sales assistance to “control dealers and that

the real purpose of Mack’s system of cross-checks was to

give an in-AOR dealer the advantage over an out-of-AOR

dealer.”
35

Moreover, Mack does not contest that, in 1989, it

issued Bulletin 38-89, which eliminated sales assistance to

dealers on sales outside their AORs. Importantly for purposes

of showing a conspiracy under § 1, Toledo presented evidence

that Bulletin 38-89 was the result of a collaboration between

Mack and its dealers. According to that evidence, Mack’s

NDAC, a group consisting of both Mack executives and

dealer representatives, worked on a draft of Bulletin 38-89. 

In addition, when Yeager asked Dick Murphy whether

NDAC’s approval of the new policy was a “unanimous kind

of thing,” Murphy responded, “Oh yes. Oh very much so. 

Very much so. I mean, something as significant as this, it had

to come from all walks.” (App. at A4025.) Mack’s Vice

President of Distributor Sales, Gary Johnson, told Yeager that

the one thing I can tell you that would be fair

and legitimate advice is that I think this policy

came about to a large extent because of the

voice of the distributor organization ... . If it’s

probably ever gonna be changed or modified, it

will come about as a result of the voice of

dealer organizations.

(App. at A4058.)

Mack’s attempts to discredit Johnson’s statement about

the dealers’ role in creating Bulletin 38-89 only demonstrates

why the jury should have been given a chance to consider

Toledo’s § 1 claim. First, Mack argues that Johnson was

mistaken because, immediately before explaining the origins

of the policy, he stated that he was “new on the job.” While a
36

jury presented with that argument might conclude that

Johnson’s statements are insufficient to establish that Mack

and its dealers conspired, that does not mean that a jury could

not believe Johnson and reach the opposite conclusion. 

Johnson stated unequivocally that Bulletin 38-89 “came about

to a large extent because of the voice of the distributor

organization.” (App. at A4058.) Because Bulletin 38-89 was

issued as official Mack policy, a jury presented with

Johnson’s statement, along with Murphy’s statement, could

rationally conclude that Bulletin 38-89 was the result of an

agreement between Mack and its dealers. 

Mack also attacks Johnson’s statement by citing our

decision in Edward J. Sweeney & Sons, Inc. v. Texaco Inc.,

637 F.2d 105 (3d Cir. 1980). In Sweeney, we held that

testimony would not support an inference of conspiracy when

a witness stated that he “believed [the defendant] changed

[the plaintiff’s] hauling allowance because of ... retailer

complaints,” but then admitted that his opinion “was just an

unsupported surmise.” 637 F.2d at 112. Seizing on the

witness’s statement in Sweeney that his belief was an

“unsupported surmise,” Mack argues that, because Johnson

only told Yeager “what [he] th[ought] occurred,” his

statement is insufficient to support an inference of conspiracy. 

We disagree. In the first place, Sweeney is inapposite because

Johnson’s statement is direct evidence of collusion, which, if

believed, requires no further inference. Second, unlike the

witness in Sweeney, Johnson never stated that his belief about

the origins of Bulletin 38-89 lacked support, and his position

as Vice President of Distributor Sales buttresses the
37

conclusion that his statement was based on first-hand

knowledge, not mere surmise. 

Mack’s argument that Murphy’s statements cannot be

taken as showing a conspiracy is equally unpersuasive. 

Relying on Monsanto, Mack argues that the tape recording of

Yeager’s conversation with Murphy shows, at most, that

Mack responded to dealer complaints about Toledo. In

Monsanto, the Supreme Court held that, to establish

concerted action under § 1 using direct evidence, a plaintiff

cannot simply show that the defendant received complaints

about the plaintiff’s price cutting from other dealers, nor is it

enough to show that the defendant received complaints and

acted in response. 465 U.S. at 764 (citing Sweeney, 637 F.2d

at 111-12). Instead, a plaintiff must produce evidence that

would allow a jury to conclude that “the alleged conspirators

had a unity of purpose or a common design and

understanding, or a meeting of the minds.” Id. The

necessary “meeting of the minds” requires “more than a

showing that the distributor conformed to the suggested

price. It means as well that evidence must be presented both

that the distributor communicated its acquiescence or

agreement, and that this was sought by the manufacturer.” Id.

at 764 n.9.

Mack argues that Yeager’s conversation with Murphy

does not meet Monsanto’s requirements because, even if

believed, it shows only that Mack adopted Bulletin 38-89 in

response to dealer complaints. However, in Monsanto itself,

the Court held that a jury should be permitted to consider

whether a conspiracy existed based on evidence of a meeting
38

between Monsanto and its distributors. During the meeting at

issue in that case, the parties discussed “Monsanto’s efforts to

get the market place in order,” id. at 765 (internal punctuation

omitted), and also discussed how to ensure a “level

playground” in which the decision of the “umpire” in

enforcing the “rules of the game” would be final, id. at 766. 

The Supreme Court agreed that the report of the meeting

could be describing “the likely reaction to unilateral

Monsanto pronouncements.” Id. at 766 n.11. Nevertheless,

the Court explained that the report could also indicate that

Monsanto and its distributors entered into an illegal

agreement and that “the interpretation of [the] ... testimony ...

properly was left to the jury.” Id. 

In this case, Toledo presented evidence that Mack and

its dealers met, discussed, and unanimously approved Bulletin

38-89 before Mack issued it. One view of the evidence may

be, as Mack insists, that the dealers at the NDAC meeting

were reacting to unilateral pronouncements by Mack, but

another view is possible and entirely reasonable. Under

Monsanto, then, how to view that evidence should be left to

the jury.

Toledo also presented evidence that the conspiracy

between Mack and its dealers continued from 1989 until well

into the limitations period. As we have noted, in October

1989, Mack amended Bulletin 38-89 with Bulletin 38-89A,

which stated a policy purportedly permitting dealers to sell
 Mack argues that its decision to withdraw Bulletin 38-89 13

and replace it with an official policy permitting out-of-AOR

sales demonstrates that it withdrew from any conspiracy that

had existed earlier in 1989. Whether Mack withdrew from a

conspiracy, however, is a jury question. Cf. United States v.

Lowell, 649 F.2d 950, 956 (3d Cir. 1981) (“[T]he question of

withdrawal is for the finder of fact.”).

39

everywhere. However, Toledo presented direct evidence in 13

the form of statements by various Mack executives that

Mack’s policy against out-of-AOR sales continued unchanged

despite the amendment to Mack’s official policy. For

example, when Toledo attempted to sell three trucks outside

its AOR in 1991, Kevin Flaherty told Yeager that “our policy

has not changed,” and he indicated that Mack would provide

sales assistance if Toledo sold the trucks inside its AOR but

not outside of it. (App. at A4086.) Similarly, Bob Grussing,

Mack’s Parts Manager, told Yeager in 1996 that dealers

“constantly want Mack to get involved in these territorial

disputes ... and to protect them from one another. And right

or wrong, we do that, you know.” (App. at A4147.)

Grussing also stated that such assistance was a “long standing

tradition” and that “I don’t know if I can break that.” Id.

Mack attacks the statements by Flaherty and Grussing

in various ways. Mack argues that Flaherty’s statements do

not show that Mack’s policy remained unchanged because

Flaherty was actually trying to convince Yeager to provide

him with the information necessary to conduct a cross-check

so that Toledo could compete on an equal footing with any
40

other Mack dealer that might be attempting to make the same

sale. Once again, Mack would have us view the evidence in

the light most favorable to it, even though we are bound to do

just the opposite at this point in the case. Moreover, Jack

Lusty testified that, although Mack claimed that its system of

cross-checks was used to ensure that all dealers competing

for the same sale received equal sales assistance, the real

purpose of cross-checks was to prevent dealers from

competing effectively with one another. Because we must

assume the truth of Lusty’s testimony at this stage, Mack’s

characterization of Flaherty’s statements, even if correct,

would not prevent a jury from concluding that a conspiracy

existed. Further, as Toledo points out, Flaherty’s statement

that “our policy has not changed” was made after Mack had

ostensibly retracted its ban on sales assistance on out-of-AOR

sales. See Rossi, 156 F.3d at 452, 478 (noting that actions by

a party that are inconsistent with its stated policy support an

inference of concerted action). 

Mack’s attack on Grussing’s statement is also flawed. 

Mack argues that because Grussing’s expertise was parts

rather than trucks, his statements do not show a conspiracy

involving truck sales. Again, this is an argument suited for

presentation to a jury, not this Court. In addition, Yelles

made several comments to Lusty that support the conclusion

that, during the limitations period, Mack continued a policy

of preventing dealers from selling outside their AORs. Of

particular note, Yelles stated that Yeager “was not playing by

the rules.” (App. at A2825.) A jury could reasonably

understand that the “rules” Yelles was talking about were an
 Lusty also testified that in 2001, Yelles told him that he 14

“kn[ew] what [Toledo] [was] trying to do. [Toledo] wants to

establish discounts and sell trucks all over the place. We are

not going to let this happen.” (App. at A2824.) Lusty also

testified that in 2002, Yelles told him that Yeager was “just

soliciting customers on price ... we have to beat the living shit

out of him. ... [H]e is a son of a bitch.” (App. at A2818.)

Finally, Yelles himself testified that, on at least one occasion

in 2003, he asked Mack’s Controller to delay approving

Toledo’s request for sales assistance so that a different Mack

dealer could make a sale. 

41

agreement not to engage in price competition outside one’s

own AOR.14

Viewed in the light most favorable to Toledo, these

statements by Mack executives are sufficient to allow a jury

to decide whether an agreement between Mack and its dealers

continued into the limitations period. Mack’s arguments to

the contrary fall short because they fail to recognize the

nature of our inquiry. Rather than determining whether Mack

actually violated § 1, our function now is simply to decide

whether Toledo’s evidence is sufficient to allow a jury to

consider Toledo’s § 1 claim. 

Because Toledo’s evidence was sufficient to allow a

jury to conclude that Mack entered into a competitionrestricting agreement with its dealers, the only remaining

question before us as to that agreement is whether, if proven,

it violates § 1 of the Sherman Act. In contrast to horizontal
 We note that in Rossi we characterized the agreement at 15

issue as horizontal and subject to per se analysis even though

Rossi, like Toledo here, alleged that his direct competitors

conspired with each other and with a common manufacturer

to cut off his access to customers. 156 F.3d at 458, 461-62. 

At that time, agreements to set minimum resale prices were

per se unlawful under § 1. See id. (“We agree with

defendants that if this were simply a vertical conspiracy,

between one horizontal competitor and one supplier or

manufacturer, we would analyze it under the rule of reason

unless there were some evidence of price fixing.”) (emphasis

added). After Leegin, vertical agreements to set prices are no

longer per se unlawful but subject to the rule of reason. 127

42

price-fixing agreements between entities at the same level of a

product’s distribution chain, the legality of a vertical

agreement that imposes a restriction on the dealer’s ability to

sell the manufacturer’s product is governed by the rule of

reason. Leegin, 127 S. Ct. at 2725. The rule of reason

analysis applies even when, as in this case, the plaintiff

alleges that the purpose of the vertical agreement between a

manufacturer and its dealers is to support illegal horizontal

agreements between multiple dealers. Id. at 2717 (“A

horizontal cartel among competing manufacturers or

competing retailers that decreases output or reduces

competition in order to increase price is, and ought to be, per

se unlawful. To the extent a vertical agreement setting

minimum resale prices is entered upon to facilitate either type

of cartel, it, too, would need to be held unlawful under the

rule of reason.”) (citation omitted and emphasis added).15
S. Ct. at 2725. In light of Leegin, we conclude that the rule of

reason, not per se analysis, applies to the vertical agreement

Toledo alleges was in existence here. Cf. United States v.

Fisher, 502 F.3d 293, 296 (3d Cir. 2007) (citation omitted)

(explaining that while a panel of this Court is ordinarily

bound by the decision of a prior panel, a subsequent panel

may depart from a previous panel’s decision if required to do

so by an intervening Supreme Court decision).

43

“When conducting a rule of reason inquiry, the

factfinder weighs all of the circumstances of a case in

deciding whether a restrictive practice should be prohibited as

imposing an unreasonable restraint on competition.” AT & T

Corp. v. JMC Telecom, LLC, 

470 F.3d 525, 531 n.7 (3d Cir. 2006) (citations omitted). In

Rossi, we identified four factors that are relevant to an

analysis of a restraint under the rule of reason:

(1) that the defendants contracted, combined or

conspired among each other; (2) that the

combination or conspiracy produced adverse,

anti-competitive effects within the relevant

product and geographic markets; (3) that the

objects of and the conduct pursuant to that

contract or conspiracy were illegal; and (4) that

the plaintiffs were injured as a proximate result

of that conspiracy.

156 F.3d at 464-65 (citation omitted). 
44

In Leegin, the Supreme Court also identified

additional issues relevant to the rule of reason inquiry. Two

of those are particularly relevant to Toledo’s appeal. First,

“[t]he source of the restraint may be an important

consideration. If there is evidence retailers were the impetus

for a vertical price restraint, there is a greater likelihood that

the restraint facilitates a retailer cartel ... .” 127 S. Ct. at 2719. 

Second, “that a dominant manufacturer or retailer can abuse

resale price maintenance for anti-competitive purposes may

not be a serious concern unless the relevant entity has market

power.” Id. at 2720. 

As to the first rule of reason factor we identified in

Rossi, we have already explained that, viewed in the light

most favorable to Toledo, the previously highlighted

statements by Mack executives are sufficient to allow a jury

to decide whether an agreement between Mack and its dealers

continued into the limitations period. Further, we note that,

consistent with Leegin, Toledo produced evidence that the

agreement was the result of dealer pressure.

Toledo also presented sufficient evidence to allow a

jury to conclude that the agreement between Mack and its

dealers produced anti-competitive effects in the relevant

product and geographic markets. Toledo bears the burden of

identifying those markets and showing the anti-competitive

effect of the agreement between Mack and its dealers. 

Gordon v. Lewistown Hosp., 423 F.3d 184, 210 (3d Cir.

2005). We have explained that proof of anti-competitive

effects “can be achieved by demonstrating that the restraint is

facially anticompetitive or that its enforcement reduced
 That assertion was supported by an analysis we need not 16

recount here.

45

output, raised prices or reduced quality. Alternatively,

because proof that the concerted action actually caused

anticompetitive effects is often impossible to sustain, proof of

the defendant’s market power will suffice.” Id. Market

power is “the ability to raise prices above those that would

prevail in a competitive market.” United States v. Brown

Univ., 5 F.3d 658, 668 (3d Cir. 1993). At trial, Toledo

presented expert testimony that Mack has power in two

different product markets. The first of those markets is called

the conventional straight truck market and includes vehicles

that have an engine placed out in front of the driver’s cab. 

The second market consists of low cab over engine trucks, or

LCOE trucks, which have an engine placed underneath the

driver’s cab. Toledo’s expert testified that Mack “[has]

market power in both the heavy duty vocational LCOE, as

well as conventional straight truck markets, whether you look

at the U.S. as a whole or the U.S., excluding the west.”16

(App. at A1676.)

Toledo also presented sufficient evidence that “the

objects of and the conduct pursuant to th[e] contract or

conspiracy were illegal.” Rossi, 156 F.3d at 466. As

explained, Toledo has alleged that Mack agreed to support the

horizontal agreement among the dealers to control prices. In

Leegin, the Supreme Court expressly condemned such

agreements. 127 S. Ct. at 2717.
46

Finally, Toledo adduced evidence that it was injured

as a result of the unlawful conspiracy. For example, Toledo

presented evidence that, during the limitations period, Jeff

Yelles asked Mack’s Controller to delay approving one of

Toledo’s requests for sales assistance on an out-of-AOR sale

so that another Mack dealer could make a sale. Toledo also

presented evidence that, during the limitations period, Yelles

refused to give sales assistance to Toledo on out-of-AOR

sales.

Applying the rule of reason analysis to Toledo’s § 1

claim, we conclude that Toledo presented sufficient evidence

of an illegal agreement between Mack and its dealers for a

jury to find for Toledo. Therefore, we vacate and remand the

District Court’s decision on that claim.

B. Toledo’s RPA Claim

In addition to its § 1 claim, Toledo also argues that

Mack’s conduct violates the RPA’s prohibition on

discriminatory pricing. The relevant provision of the RPA

provides that, 

[i]t shall be unlawful for any person engaged in

commerce ... 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 to injure, destroy, or prevent

competition with any person who either grants

or knowingly receives the benefit of such
47

discrimination, or with customers of either of

them.

15 U.S.C. § 13(a).

Toledo argues that Mack engaged in discriminatory

pricing by giving other Mack dealers more favorable

discounts than were given to Toledo. At trial, Toledo

presented expert testimony comparing the average amount of

sales assistance Mack offered to Toledo with the average

amount of sales assistance Mack offered other dealers located

in the same general geographic area. Toledo’s expert testified

that the comparison demonstrated that Toledo received far

less sales assistance than other nearby Mack dealers. 

However, Toledo’s expert did not compare the amount of

sales assistance Mack offered to Toledo and to other dealers

when Toledo and another dealer actually competed against

each other for a sale to the same customer. Therefore,

Toledo’s expert was unable to offer an opinion about whether

Mack had discriminated against Toledo in head-to-head

competition.

The RPA was originally enacted to “target the

perceived harm to competition occasioned by powerful buyers

rather than sellers; specifically, Congress responded to the

advent of large chainstores, enterprises with the clout to

obtain lower prices for goods than smaller buyers could

demand.” Reeder-Simco GMC, Inc., 546 U.S. at 175. In the

Supreme Court’s recent decision in Reeder-Simco, the

plaintiff was a Volvo dealer who, like Toledo, sold custommade, specialized heavy-duty trucks. Id. at 170-71. Like
48

Toledo, Reeder-Simco relied heavily on discounts offered by

the truck manufacturer, in that case Volvo, to sell its trucks. 

Id. Finally, like Toledo, Reeder-Simco alleged that the

manufacturer had violated the RPA by offering it less

favorable discounts than were offered to other dealers. Id. at

171-73. The Supreme Court noted that the alleged price

discrimination did not implicate the original purpose of the

RPA because “the allegedly favored purchasers are dealers

with little resemblance to large independent department stores

or chain operations, and the supplier’s selective price

discounting fosters competition among suppliers of different

brands.” Id. at 181. Elsewhere in its opinion, the Court

reinforced the need to interpret the RPA narrowly, explaining

that “[i]nterbrand competition ... is the ‘primary concern of

antitrust law.’” Id. at 180 (quoting Continental T.V., Inc. v.

GTE Sylvania, Inc., 433 U.S. 36, 51 n.19 (1977)). The Court

further explained that “[t]he [RPA] signals no large departure

from that main concern. ... [W]e [will] resist interpretation

geared more to the protection of existing competitors than to

the stimulation of competition.” Id. (emphasis in original). 

In short, the Court indicated that the RPA should be narrowly

construed.

In Crossroads Cogeneration Corp. v. Orange &

Rockland Utilities, Inc., 159 F.3d 129, 142 (3d Cir. 1998), we

were careful to keep the RPA confined. There, the defendant

allegedly offered to sell electricity to certain customers at

lower prices than it offered to its other customers, including

Crossroads. Id. We held that Crossroads’ RPA claim could

not withstand a motion to dismiss because merely offering

lower prices to a customer does not give rise to a price
 One might complain that this reasoning elevates form 17

over substance, but we are bound by precedent and think it no

49

discrimination claim. Id. at 142. Instead, “a plaintiff must

allege facts to demonstrate that (1) the defendant made at

least two contemporary sales of the same commodity at

different prices to two different purchasers; and (2) the effect

of such discrimination was to injure competition.” Id.

(citation omitted).

The Supreme Court in Reeder-Simco expressly

declined to decide whether the RPA even applies to markets

based on competitive bidding and special-order sales. 

Reeder-Simco, 546 U.S. at 180. Our decision in Crossroads,

however, suggests that the RPA does not apply in a case such

as this, which involves a single sale of a customized good via

a competitive bidding process. Although Mack dealers may

compete with one another by bidding against each other for

the same deal, and the amount of sales assistance Mack offers

to each dealer may well determine whether a customer

chooses to accept a bid from one Mack dealer or another,

Mack does not sell a truck to the dealer until the customer

actually selects a dealer’s bid. Because no sale takes place

until a customer accepts a dealer’s bid, the amount of sales

assistance Mack is willing to provide to a particular dealer is

part of an offer by Mack to sell, not a sale. Regardless of any

competition between the dealers during the bidding process,

only a dealer whose bid is accepted by a customer will

actually buy a truck from Mack. Therefore, only one sale, not

two, actually results. Cf. M.C. Mfg. Co., Inc. v. Texas 17
injustice to narrowly interpret the oft-questioned RPA. Cf.

Antitrust Modernization Commission, Report and

Recommendations, April 2007, at iii, 317-26

(recommendation by statutory commission, whose members

were appointed by the President and Congress, that the RPA

be repealed in its entirety).

50

Foundries, Inc., 517 F.2d 1059, 1065 (5 Cir. 1975) (“[I]n th

order for there to be discrimination between purchasers

violative of [the RPA] there must be actual sales at two

different prices to two different actual buyers ... .” (internal

quotation marks and citation omitted)) .

Finally, we reject Toledo’s argument that Corn

Products Refining Co. v. FTC, 324 U.S. 726 (1945), requires

us to abandon the two-sales requirement we articulated in

Crossroads. Corn Products involved a claim under § 2(e) of

the Clayton Act which prohibits discrimination “in favor of

one purchaser against another purchaser or purchasers of a

commodity bought for resale ... by ... contributing to ... any

services in connection with ... the sale or offering for sale of

such commodity ... upon terms not accorded to all purchasers

on proportionally equal terms.” 15 U.S.C. § 13(d). In Corn

Products, the Federal Trade Commission filed suit against a

sugar supplier that had agreed to pay a large portion of the

advertising expenses of the Curtiss Candy Company

(“Curtiss”), one of its principal customers, but did not agree

to a similar arrangement with another customer who bought

the same products. Id. at 743. The sugar supplier argued that

it had not provided advertising services to a “purchaser” of its
51

product because nothing in the contract between it and

Curtiss required Curtiss to buy sugar in exchange for the

advertising. Id. The Court rejected that argument, noting

that Curtiss had in fact purchased all of its sugar from the

supplier even though the contract in question did not require

it to do so, and that the supplier had not paid the advertising

expenses of any of the other companies that bought its sugar

products. Id. at 744. 

Corn Products, decided long before our opinion in

Crossroads, does not require us to abandon the two-sales

requirement in RPA cases. Assuming arguendo that a claim

of discriminatory advertising is analogous to a claim of

discriminatory pricing, Corn Products, unlike Reeder-Simco

and the present case, involved two actual sales to different

customers, as opposed to mere offers to sell. In short,

Toledo’s policy arguments based on Corn Products do not

override the import of Reeder-Simco or our own binding

precedent. We will therefore affirm the District Court’s grant

of summary judgment for Mack on Toledo’s RPA claim.

C. Mack’s Misappropriation of Trade Secrets

Counterclaim

Toledo’s final argument is that the District Court erred

in granting judgment as a matter of law in favor of Mack on

Mack’s counterclaim for misappropriation of trade secrets. 

On appeal, Toledo argues that Mack’s counterclaim is

actually for breach of the MACSPEC 2001 license agreement,

and that, under Pennsylvania’s “gist of the action” doctrine,

Mack cannot recover in tort for breach of contract. The “gist
52

of the action” doctrine is “designed to maintain the conceptual

distinction between breach of contract claims and tort claims

[by] precluding plaintiffs from recasting ordinary breach of

contract claims into tort claims.” eToll Inc. v. Elias/Savion

Advertising Inc., 811 A.2d 10, 14 (Pa. Super. Ct. 2002). The

focus of an analysis under the “gist of the action” doctrine is

whether “actions lie from a breach of the duties imposed as a

matter of social policy” or “from the breach of duties imposed

by mutual consensus.” Redevelopment Auth. of Cambria

County v. Int’l Ins. Co., 685 A.2d 581, 590 (Pa. Super. Ct.

1995). We agree with the District Court that Mack’s claim

for misappropriation of trade secrets sounds primarily in tort,

rather than contract law, and therefore the “gist of the action”

doctrine does not bar Mack’s counterclaim. 

The Ohio Court of Appeals found that Mack took

several steps independent of issuing a license agreement to

insure that its dealers did not give copies of the MACSPEC

2001 software to unauthorized persons. Those steps included

the use of “unlock codes” during the installation process and

prominent warning screens informing users that unauthorized

use would subject them to civil and criminal penalties. Mack

Trucks, Inc. v. Motor Vehicle Dealers Bd., No. 05AP-768,

2006 WL 1495122, at *7 (Ohio Ct. App. June 1, 2006). 

Thus, Toledo’s duty to keep the software confidential did not

arise simply from its license agreement with Mack but,

instead, had roots in its independent duty to keep Mack’s

trade secrets confidential, and the counterclaim can properly
 In addition, we note that Toledo initially denied the 18

existence of the contract it now uses to invoke the “gist of the

action” doctrine. Toledo cannot properly change its position

now. Tops Apparel Mfg. Co. v. Rothman, 244 A.2d 436, 439

n.8 (Pa. 1968) (“When a [party] alleges a fact in a court of

justice, for [its] advantage, [it] shall not be allowed to

contradict it afterwards.”)

53

be seen as sounding in tort. We therefore reject Toledo’s 18

argument and affirm the District Court’s grant of judgment as

a matter of law on the counterclaim.

IV. Conclusion

Mack presented sufficient evidence to allow a jury to

consider its claim under § 1 of the Sherman Act. 

Accordingly, we will vacate the District Court’s grant of

judgment as a matter of law and remand that claim for further

proceedings. We will affirm the District Court’s disposition

of Toledo’s RPA claim and Mack’s counterclaim for

misappropriation of trade secrets.