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

### JUN 24 1997 

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

TENTH CIRCUIT

SYSTEMCARE, INC.,

Plaintiff-CounterDefendant-Appellant,

v. WANG LABORATORIES CORPORATION,

Defendant-CounterClaimant-Appellee,

v. MICHAEL WRIGHT,

Counter-Defendant,

------------------------------- UNITED STATES OF AMERICA,

Amicus Curiae. No. 95-1032

ON REHEARING EN BANC

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO

(D. Ct. No. 89-B-1778)- 2 -

Ronald Katz, Coudert Brothers, San Francisco, Calif ornia (Janet Arnold Hart and Paul S. Schmidtberger with him on the briefs) appearing for the Appellant. Jerrold J. Ganzfried, Howrey & Simon, Washington, D C (Thomas E. Gilbertsen and Timothy K. Armstrong, Howrey & Simon, Washingto n, DC, Michael J. Cook, Faegre & Benson, Denver, Colorado, and Florinda J. Iascone, Wang Laboratories, Inc., Billerica, Massachusetts, with him on the bri ef) appearing for the Appellee. David Seidman, Attorney, U.S. Department of Justice , Washington, DC (Anne K. Bingaman, Assistant Attorney General, Joel I. Klein , Deputy Assistant Attorney General, and Catherine G. O’Sullivan, Attorney, with him on the brief), appearing for Amicus Curiae.

Before SEYMOUR, Chief Judge, HOLLOWAY, PORFILIO, AN DERSON, TACHA, BALDOCK, BRORBY, EBEL, KELLY, HENRY, BRISCOE , and MURPHY, Circuit Judges.

TACHA, Circuit Judge.

On May 29, 1996, a panel of this court held that a tying arrangement between a buyer and a seller does not satisfy the c oncerted action requirement of section 1 of the Sherman Act, 15 U.S.C. § 1. Syste mcare, Inc. v. Wang Labs. Corp. , 85 F.3d 465 (10th Cir. 1996). The panel held that to bring a claim under section 1, a plaintiff must establish a conspiracy between a seller and a third party to force a tying arrangement on a buyer. The panel therefore affirmed the entry of summary judgment against plaintiff Systemcare, Inc. (“Systemcare”) and in favor of defendant Wang Laboratories, Inc. (“Wang”).- 3 -

On September 6, 1996, we granted Systemcare’s reque st for rehearing en banc to consider “whether a contract between a buye r and seller satisfies the concerted action element of section 1 of the Sherma n Act, 15 U.S.C. § 1, or whether satisfaction of that element requires evide nce of a contract, combination, or conspiracy involving a third party to force agre ement on a buyer.” Today we hold that a contract between a buyer and seller sat isfies the concerted action element of section 1 of the Sherman Act where the s eller coerces a buyer’s acquiescence in a tying arrangement. Accordingly, we overrule City of Chanute v. Williams Natural Gas Co. , 955 F.2d 641 (10th Cir. 1992), and McKenzie v. Mercy Hospital , 854 F.2d 365 (10th Cir. 1988), to the extent thatthese cases are inconsistent with today’s holding.

BACKGROUND When this case commenced in 1989, Wang manufactured“VS” minicomputers and created copyrighted software for use with them. By 1992, Wang became a service-oriented company, offering bo th hardware and software support services for its computers. Hardware suppo rt services involve maintenance and repair of computer equipment. Software support services include software maintenance, upgrades, and technic al assistance. Because- 4 -

Wang’s software support services may require copyin g Wang’s proprietary software, Wang alone provides those services to Wan g computer customers. Systemcare, an independent service organization, se rvices computer equipment that it does not manufacture. Systemcare services Wang computer hardware in Colorado and competes with Wang in prov iding hardware support services. Beginning in 1985, Wang offered its minicomputer us ers a package of hardware and software support services called Wang Software Services (“WSS”). For the purposes of this opinion, we expressly assu me, but do not decide, that under the WSS contract, a customer must subscribe t o Wang’s hardware support program in order to obtain Wang’s software support services. In 1989, Systemcare brought this action under secti on 1 of the Sherman Act, 15 U.S.C. § 1, alleging that Wang illegally ti ed the sale of its software support services (the tying service) to the purchas e of its hardware support services (the tied service) through the WSS contrac ts. In late 1991, Wang moved for summary judgment. Wang argued that (1) it did not condition the purchase of software support on the purchase of hardware mainte nance, and (2) it lacked sufficient market power to appreciably restrain competition in the market for the allegedly tied product.- 5 -

On February 5, 1992, the district court requested s upplemental briefing on the effect of City of Chanute v. Williams Natural G as Co. , 955 F.2d 641 (10th Cir. 1992), on Systemcare’s section 1 claim. Afterconsidering the supplemental briefing, the district court granted summary judgme nt in favor of Wang because Systemcare failed to “establish a conspiracy betwee n at least two parties” to impose a tying arrangement on Wang’s customers as r equired by Chanute

. Systemcare, Inc. v. Wang Labs., Inc. , 787 F. Supp. 179, 181-82 (D. Colo. 1992). Relying on Chanute , a panel of this court affirmed the judgment of th e district court. Systemcare, Inc. , 85 F.3d at 471. We granted Systemcare’s motion f or a rehearing en banc to consider whether as a matter o f law a contract between a buyer and seller satisfies the concerted action req uirement of section 1 of the Sherman Act.

DISCUSSION A tying arrangement is “an agreement by a party to sell one product but only on the condition that the buyer also purchases a different (or tied) product, or at least agrees that he will not purchase that prod uct from any other supplier.” Northern Pac. Ry. Co. v. United States , 356 U.S. 1, 5-6 (1958). “[W]here the buyer is free to take either product by itself ther e is no tying problem even though- 6 -

the seller may also offer the two items as a unit at a single price.” Northern Pac. Ry Co. , 356 U.S. at 6 n.4. Section 1 of the Sherman Act prohibits “every contr act, combination in the form of trust or otherwise, or conspiracy in restra int of trade or commerce.” 15 U.S.C. § 1. A plaintiff who alleges a violation of section 1 must establish: (1) concerted action in the form of a contract, combination, or conspiracy, and (2) an unreasonable restraint of trade. The Supreme Court has long held that some tying arr angements constitute unreasonable restraints of trade, and therefore vio late section 1 of the Sherman
Act. See International Salt Co. v. United States , 332 U.S. 392, 396 (1947) (tying violates section 1 of the Sherman Act and section 3 of the Clayton Act); TimesPicayune Pub. Co. v. United States , 345 U.S. 594, 608-09 (1953) (tying violates section 1 of the Sherman Act); Northern Pac. Ry. Co . v. United States , 356 U.S. 1, 4-5 (1958) (tying violates section 1 of the Sherman Act). A tying arrangement constitutes an unreasonable restraint of trade if “ the seller has ‘appreciable economic power’ in the tying product market and if the arrangement affects a substantial volume of commerce in the tied market.” Eastman Kodak Co. v. Image Technical Servs., Inc. , 504 U.S. 451, 462 (1992) (quoting Fortner Enters. , Inc. v. United States Steel Corp. , 394 U.S. 495, 503 (1969)). Although a tying arrangement may constitute an unreasonable restraint of trade, the Sherman Act- 7 -

also requires proof of concerted action. The issue before the court today concerns the concerted action requirement of section 1. Section 1 of the Sherman Act requires proof of conc erted action in the form of a contract, combination, or conspiracy in restra int of trade. 15 U.S.C. § 1. Section 1 does not proscribe purely unilateral acti vity by a single entity. See United States v. Colgate , 250 U.S. 300, 307 (1919). Wang argues that tying arrangements that consist solely of a single sellerimposing a tie on a buyer constitute unilateral activity, which falls outside the scope of section 1. On the other hand, Systemcare asserts that a tying agreeme nt between a buyer and a seller satisfies the contract, combination, or conspiracy requirement of section 1. Consistent with Systemcare’s position, the United S tates as amicus curiae urges us to conclude that the literal language of section 1 includes buyer-seller contracts in restraint of trade. Because the parties rely up on different lines of Tenth Circuit authority to justify their positions, we begin our resolution of this issue by reviewing the relevant Tenth Circuit case law.

A. Tenth Circuit Precedent We first addressed concerted action in the tying co ntext in Black Gold, Ltd. v. Rockwool Industries, Inc. , 729 F.2d 676 (10th Cir. 1984) [hereinafter Black Gold I ]. In that case, a home insulation installer broug ht suit against an- 8 -

insulation manufacturer under section 1. Id. at 679. The installer contended that the manufacturer refused to sell it blown wool (the tying product) unless the installer also bought rolls of insulation known as batts (the tied product). Id. The district court directed a verdict in favor of the m anufacturer because there was no evidence of a contract, combination, or conspiracy in restraint of trade. Id. at 685. Two resale price maintenance cases framed our discu ssion of the concerted action requirement in Black Gold I . Id. at 685-86 (citing Colgate , 250 U.S. at 307, and United States v. Parke, Davis & Co. , 362 U.S. 29, 43 (1960)). In these cases, the Supreme Court concluded that although a unilateral refusal to deal without more does not satisfy the concerted action requirement, Colgate , 250 U.S. at 307, the requirement is satisfied “if the produc er secures adherence to his suggested prices by means which go beyond his mere declination to sell to a customer who will not observe his announced policy. ” Parke, Davis & Co. , 362 U.S. at 43. Applying these principles in the tying context, we adopted the following rule: [A] plaintiff who contends a seller has unlawfully used a refusal to deal as a means of enforcing an anticompetitive pra ctice (such as tying or price fixing) may establish the requisite combination or conspiracy in either of two ways: [1] by showing that he himself unwillingly complied with the practice, or [2] by s howing that although he refused to acquiesce, other buyers agre ed to the arrangement under threat of termination.- 9 -

Black Gold I , 729 F.2d at 686 (citing Perma Life Mufflers v. In ternational Parts Corp. , 392 U.S. 134, 142 (1968), overruled in part on other grounds by Copperweld Corp. v. Independence Tube Corp. , 467 U.S. 752 (1984)). In reversing the directed verdict for the manufactu rer, we noted that the installer produced evidence that the manufacturer “ communicated its desire to its customers that they purchase both blown wool and batts.” Black Gold I , 729 F.2d at 686. We also emphasized that while the manufact urer terminated sales of blown wool to the installer, the manufacturer conti nued selling blown wool to other installers who purchased batts in addition to blown wool. Id. Although the plaintiffs refused to buy goods under the tying arr angement, we found that the plaintiffs introduced sufficient evidence that othe r buyers agreed to the arrangement under threat of termination to support the inference of concerted action. Id. On rehearing prompted by the Supreme Court’s decisi on in Monsanto Co. v. Spray-Rite Service Corp. , 465 U.S. 752 (1984), we affirmed our holding: “[W]e do not construe Monsanto as a retreat from those cases holding that a combination occurs between a seller and buyers ‘who se acquiescence in [the seller’s] firmly enforced restraints was induced bythe communicated danger of termination.’” Black Gold, Ltd. v. Rockwool Indus. ,Inc. , 732 F.2d 779, 780 (10th Cir. 1984) [Black Gold II ] (quoting Perma Life Mufflers , 392 U.S. at 142)- 10 -

(internal quotations omitted). Thus, under Black G old I and Black Gold II , a plaintiff satisfies section 1's concerted action el ement by showing a tying agreement between a seller and a buyer. We next addressed the concerted action requirement in the tying context in McKenzie v. Mercy Hospital , 854 F.2d 365 (10th Cir. 1988). In that case, a hospital revoked a doctor’s staff privileges becaus e he violated hospital and medical staff by-laws and engaged in unprofessional , disruptive conduct. Id. at 366. The doctor alleged that the hospital illegall y tied the market for hospital facilities and services (the tying product) to the market for physician services (the tied product), in violation of section 1 of the She rman Act. Id. The district court granted the hospital’s motion for summary judgment because it found that the doctor failed to demonstrate that the hospital unde rtook concerted action “with any other persons” to unreasonably restrain trade. Id. at 366-67. On appeal, we held that the doctor could satisfy th e concerted action requirement only by demonstrating that the hospital allied itself with another “individual” to tie a patient’s choice of a physici an to the patient’s choice of medical facilities. Id. at 367-68. We noted that the doctor had failed to identify the involvement of any coconspirator. Id. at 368. We emphasized that in order to satisfy the concerted action requirement, the docto r must identify an entity with whom the hospital conspired to force the tying arrangement upon consumers:- 11 -

Here, we are not concerned with the legal possibili ty of a single entity imposing a tying arrangement on its customer s. The question before the court--and to which we have replied in t he negative--is whether such an arrangement is proscribed by Sectio n 1 of the Sherman Act. Id. at 368. Thus, in McKenzie we suggested that section 1 of the Sherman Act does not prohibit a single entity from imposing a tying arrangement on its

customers. Less than one year after we decided McKenzie , we again evaluated a tying claim and addressed in dicta the issue presently be fore the court. In Smith Machinery Co., Inc. v. Hesston Corp. , 878 F.2d 1290 (10th Cir. 1989), a franchisee alleged that its franchisor tied the fra nchise rights for a new line of tractors (the tied product) to the franchise rights for other farm machinery (the tying product). Id. at 1292. When the franchisee refused to offer the new line of tractors, the franchisor terminated the franchisee’ s dealership. Id. at 1291. The franchisor did not raise the lack of concerted action as a defense before the district court. Id. at 1295. Nevertheless, we noted in dicta that “to establish a violation of section 1 of the Sherman Act, the comp laining party must prove an agreement or concerted activity between separate pa rties to restrain trade--that is, a ‘contract, combination, or conspiracy.’” Id. at 1294 (citing McKenzie , 854 F.2d at 367-68.). Further, we indicated that the concerted action requirement had not been met because the franchisee neither contracted with the franchisor to sell the- 12 -

tractors nor identified other distributors whose ac quiescence “was induced by ‘the communicated danger of [dealership] termination.’” Id. at 1294 (quoting Perma Life Mufflers , 392 U.S. at 142, and citing Black Gold I , 729 F.2d at 685-86 and Black Gold II , 732 F.2d at 780). Thus, in Smith Machinerywe attempted to harmonize McKenzie , Black Gold I , and Black Gold II . We cited McKenzie for the unremarkable proposition that a section 1 claim requires proof of concerted activity by “separate parties,” but we continued to recognize the holding in Black Gold I and Black Gold II that an agreement between a buyer and a seller alo ne could satisfy this requirement. Most recently, we addressed the concerted action re quirement in the tying context in City of Chanute v. Williams Natural Gas Co. , 955 F.2d 641 (10th Cir. 1992). There, eight cities in Kansas and Oklahoma alleged that a natural gas company refused to transport natural gas to the cit ies (the tying service) unless they bought gas produced by the gas company (the ti ed product). Id. at 649-50. Without reference to Black Gold I or Black Gold II , a two-member majority of the panel stated: Before they can establish a § 1 violation, the Citi es “must prove an agreement . . . between separate parties to restrai n trade.” Smith Machinery Co., Inc. v. Hesston Corp. , 878 F.2d 1290, 1294 (10th Cir. 1989), cert. denied , 493 U.S. 1073 (1990). The Cities must show the alleged tying arrangement is “concerted ac tivity by individual actors.” Card v. National Life Ins. Co ., 603 F.2d 828, 834 (10th Cir. 1979). A violation of § 1 requires “‘un lawful conduct by two or more parties pursuant to an agreement. . . . Solely unilateral1 Judge Seymour wrote separately to disagree with the majority’s reliance upon

McKenziein light of “the law of this and other circuits” in general and Black Goldin particular. Chanute , 955 F.2d at 658-59 (Seymour, J., concurring). She also noted that McKenziewas factually distinguishable because the doctor in McKenziedid not either unwillingly comply with the hospital’s tying practice or identify others who unwillingly agreed to the arrangement under threat of termination. Id. at 659 n.1. Judge Seymour explained that unlike the doctor in McKenzie , the Chanuteplaintiffs stated the requisite combination or conspiracy by alleging that they were “coerced or forced by a seller into an illegal tying arrangement.” Id. at 658-59 (citing Black Gold I , 729 F.2d at 686). - 13 - conduct, regardless of its anticompetitive effects , is not prohibited.’” McKenzie , 854 F.2d at 367 (quoting Contractor Utility Sales Co. v. Certainteed Prods. Corp. , 638 F.2d 1061, 1074 (7th Cir.1981)). “[A] business retains the right under section 1 to unilaterally announce the terms on which it will deal.” Reazin v. Blue Cross & Blue Shield of Kansas, Inc. , 899 F.2d 951, 963 (10th Cir.), cert. denied , 497 U.S. 1005 (1990). The Cities assert the requirements co ntract between Williams and the Cities entered into after the pipe line had been closed is a sufficient showing of an illegal agreem ent. The Cities' assertion is erroneous. We held in McK enzie that a tying arrangement imposed by a single entity is not prosc ribed by § 1 of the Sherman Act. McKenzie , 854 F.2d at 368. In that case, the plaintiff asserted “an arrangement which links two separate and distinct product markets together” is sufficient p roof of a tying arrangement. Id. We disagreed and held the plaintiff must make a preliminary showing of a conspiracy between two per sons. Id. at 367-68. The Cities have only brought evidence thatestablishes Williams tied its natural gas to its transportation facilities. The Cities have not shown Williams acted in concert wit h any other entity. The Cities name only one defendant. The o ther parties to the allegedly illegal contracts to establish the conspi racy are the Cities themselves. We conclude the Cities have failed to make the requisite preliminary showing of a conspiracy to go forth with their tying claims under § 1 of the Sherman Act and find summary judgment is appropriate. Chanute , 955 F.2d at 650-51 (footnotes omitted). 12The mere fact of agreement to the tying restraint, of course, does not establish a

violation of § 1 of the Sherman Act. A plaintiff must also satisfy the additional elements of a tying claim in order to establish a violation of section 1 of the Sherman Act. See Eastman Kodak Co. , 504 U.S. at 462 (A tying arrangement violates the Sherman Act “if the seller has ‘appreciable economic power’ in the tying product market and if the arrangement affects a substantial volume of commerce in the tied market.”) (citation omitted). - 14 - In sum, in Black Gold I and Black Gold II , we held that an agreement between a buyer and seller alone may satisfy the co ncerted action requirement. In Chanute , we interpreted McKenzie as requiring a plaintiff to prove a contract, combination, or conspiracy involving a third party to satisfy the concerted action requirement. Today we must resolve this conflict. To that task we now turn.

B. Unilateral v. Concerted Activity We hold that a contract between a buyer and seller satisfies the concerted action element of section 1 of the Sherman Act wher e the seller coerces a buyer’s acquiescence in a tying arrangement imposed by the seller. 2 The essence of section 1's contract, combination, or conspiracy re quirement in the tying context is the agreement , however reluctant, of a buyer to purchase from a seller a tied product or service along with a tying product or se rvice. To hold otherwise would be to read the words “contract” and “combination” o ut of section 1. “A § 1 agreement may be found when the conspirators had a unity of purpose or a common design and understanding, or a meeting of the minds in an- 15 -

unlawful agreement.” Copperweld Corp. v. Independe nce Tube Corp. , 467 U.S. 752, 771 (1984) (quotation omitted). Although a buyer is unlikely to desire a provision restricting its ability to purchase a pro duct from other suppliers, a buyer might agree to such a term where the other provisio ns of the contract serve the buyer’s interests. Even though a seller and a buye r may not share the same motive for entering into the anticompetitive agreem ent, the concerted action requirement is satisfied when their minds meet in a n unlawful tying agreement.
See Fineman v. Armstrong World Indus., Inc. , 980 F.2d 171, 215 (3d Cir. 1992) (holding that a conspiracy in violation of section 1 does not require the sharing of an identical anticompetitive motive, but requires o nly a shared commitment to a common scheme that has an anticompetitive objective ). To say that the buyer, having agreed to the contract, did not agree to an express term because the buyer would have preferred a contract without the term ma kes little sense. As the Supreme Court noted in Perma Life Mufflers and reaffirmed in Copperweld , a plaintiff “can clearly charge a combination between [the defendant] and himself, as of the day he unwillingly complied with the rest rictive . . . agreement[].” Perma Life Mufflers, Inc. , 392 U.S. at 142; see Copperweld Corp. , 467 U.S. at 766 (citing Perma Life Mufflers , 392 U.S. at 141-42). From a buyer’s perspective, tying most frequently c onstitutes a reluctant combination and not an eager conspiracy. This factdoes not diminish the- 16 -

adherence of our holding to the core purposes of th e concerted action requirement of section 1. The Sherman Act subjects concerted a ctivity to particular scrutiny because of the inherent anticompetitive risk that s uch activity will eliminate “independent centers of decisionmaking that competi tion assumes and demands.” Copperweld Corp. , 467 U.S. at 769. Concerted action by two entitie s which “previously pursued their own interests separately . . . reduces the diverse directions in which economic power is aimed [and, t herefore,] increases the economic power moving in one particular direction.” Id. As with other concerted activity, tying agreements between buyer and sellerdeprive the market of “independent centers of decisionmaking” by forcing a buyer in need of the tying product to purchase the tied product from the same seller. Id. The concerted action requirement exists to prevent exactly such d eprivation. In holding as we do, we reject Wang’s argument thatin imposing a tying arrangement, a producer merely acts independently t o establish a unilateral term of sale. Wang misapprehends the proper distinctionbetween “independent activity by a single entity” in the form of a mere refusal to deal and “concerted effort by more than one entity to . . . restrain tr ade” in the form of a tying arrangement. Fisher v. City of Berkeley, Californi a , 475 U.S. 260, 266 (1986) (citing Monsanto Co. v. Spray-Rite Serv. Corp. , 465 U.S. 752, 763 (1984)).- 17 -

A producer who exercises “his . . . discretion as t o parties with whom he will deal” does not act concertedly when “he . . . announce[s] in advance the circumstances under which he will refuse to sell.” Colgate , 250 U.S. at 307. Thus, a producer may lawfully refuse to sell produc ts to customers who fail to sell the products at or above a minimum price. Colgate , 250 U.S. at 303, 307. A producer goes beyond Colgate ’s “limited dispensation,” Times-Picayune Pub. Co. , 345 U.S. at 626, and acts concertedly when the prod ucer requires, as a condition of sale, a buyer’s agreement to sell the goods thatare the subject matter of the contract at or above a minimum price. See, e.g. , United States v. Bausch & Lomb Optical Co. , 321 U.S. 707, 719-20 (1944) (“The retail license provisions binding dealers to sell at locally prevailing prices and on ly to the public constitute illegal restraints.”). A unilateral refusal to deal preserves a buyer’s in dividual free choice to sell at any price goods already purchased. Thus, the buyer is free to independently balance the possible inability to obtain a desired product in the future against the competitive disadvantage of sale at or above the ma nufacturer’s suggested price. When a producer requires goods to be resold at a mi nimum price as a condition of sale, however, a buyer’s decision to sell the goods at the producer’s suggested price is not a matter of independent competitive ju dgment. See Parke, Davis &
Co. , 362 U.S. at 47. Rather, the buyer’s pricing deci sion is constrained by the- 18 -

terms imposed by the manufacturer as a condition of sale. “The product . . . comes packaged in a competition-free wrapping . . . by virtue of concerted action induced by the manufacturer.” Id. By their very nature, tying arrangements also limitthe power of a buyer to pursue its individual self-interest. The buyer can no longer make its purchase decision based upon the relative merits of the tied product, but is coerced into purchasing the tied product from the producer becau se of the producer’s market power in the tying product. As with unlawful resal e price maintenance, a tying arrangement packages the tied product in a competit ion-free wrapping by virtue of the buyer’s agreement to the seller’s terms. That agreement satisfies the concerted action requirement of section 1. Finally, we reject Wang’s argument that today’s hol ding deals more harshly with non-price conduct than with price fixing. In particular, Wang contends that our holding creates a lower standard of proof of co ncerted action for plaintiffs alleging an unlawful tying agreement than for plain tiffs alleging unlawful resale price maintenance. Contrary to Wang’s argument, th e requirements for proof of concerted action in a tying case are consistent wit h those applied in cases involving other unreasonable restraints of trade.
In Monsanto , the plaintiff sought to establish concerted actio n by offering proof that the manufacturer terminated the plaintif f’s distributorship following- 19 -

complaints from rival distributors that plaintiff r efused to adhere to the manufacturer’s suggested prices. Monsanto , 465 U.S. at 757. Although such evidence is probative of the existence of concerted action, id. at 765, the Court required the plaintiff to introduce “evidence that tends to exclude the possibility that the manufacturer and nonterminated distributor s were acting independently” in order to establish concerted retail price fixing . Id. at 764. The Court added this requirement because the Court found it difficu lt to distinguish between lawful unilateral and unlawful concerted conduct where eac h has the same economic effect: For example, the fact that a manufacturer and its d istributors are in constant communication about prices and marketing s trategy does not alone show that the distributors are not making ind ependent pricing decisions. A manufacturer and its distributors hav e legitimate reasons to exchange information about the prices an d the reception of their products in the market. . . . Thus, the manu facturer’s strongly felt concern about resale prices does not necessari ly mean that it has done more than the Colgate doctrine allows. Id. at 762-63. Such evidentiary ambiguity is generally absent in t he tying context. The sale of a tied product pursuant to a tying arrangem ent fully implements the restraint of trade at the time of the sale. Eviden ce that the buyer acquiesces in a tying arrangement will unequivocally “exclude the p ossibility that the3We decline to address the applicability of Monsantowhere a plaintiff bases his

claim upon an implicit tie. CompareService & Training, Inc. v. Data General Corp. , 963 F.2d 680, 685 (4th Cir. 1992) (“[A]ppellants must produce evidence of an express tying agreement or evidence that affirmatively ‘tends to exclude the possibility’ that Data General and its customers ‘were acting independently’ in the sales and purchase of products.”) (quoting Monsanto , 465 U.S. at 764) withWill , 776 F.2d at 670 (“Monsanto helps to separate the legitimate and illegitimate components of a generally cooperative system of distribution and has nothing to say about the meaning of joint action requirement in a tying case.”) (citing Black Gold II , 732 F.2d at 780). - 20 - manufacturer and [buyers] were acting independently .” 3 Id. at 764. A seller that imposes a tying arrangement on the purchasers of it s product takes affirmative action to avoid competition in sales of the tied pr oduct by inducing, indeed forcing, its customers to accept the tying arrangem ent, thereby accomplishing a restraint of trade contemporaneously with the sale. Therefore, “we do not
construe Monsanto as a retreat from those cases holding that a combi nation occurs between a seller and buyers ‘whose acquiescence in [the seller’s] firmly enforced restraints was induced by the communicated danger o f termination.’” Black Gold
II , 732 F.2d at 780 (quoting Perma Life Mufflers , 392 U.S. at 142) (alteration in original, quotations omitted). We originally announced the rule we adopt today in Black Gold I and Black Gold II , and its validity clearly survived both Copperweld and Monsanto

. Further, both the Seventh and Ninth Circuits have h eld expressly that the “coerced sales contract for the tied item” satisfies the “co ntract, combination, or conspiracy” requirement of section 1. Datagate, In c. v. Hewlett-Packard Co. , 60- 21 -

F.3d 1421, 1426-27 (9th Cir. 1995) (“A showing thatthe buyer of the tied product was coerced by the tying arrangement into making th e purchase is sufficient to show that the buyer was not merely ‘acting independ ently.’”); Will v. Comprehensive Accounting Corp. , 776 F.2d 665 (7th Cir. 1985) (holding that a contract between a franchisor and a franchisee thatties data processing to franchise rights satisfies the concerted action req uirement). Today’s decision is therefore in harmony with both the law of the Supre me Court and our sister circuits.

CONCLUSION To reiterate, we hold that a contract between a buy er and seller satisfies the concerted action element of section 1 of the Sherma n Act where the seller coerces a buyer’s acquiescence in a tying arrangement impos ed by the seller. Therefore, we overrule City of Chanute v. Williams Natural Gas Co. , 955 F.2d 641 (10th Cir. 1992), and McKenzie v. Mercy Hospital , 854 F.2d 365 (10th Cir. 1988), to the extent that they are inconsistent with this holding . Because both the district court and the panel based their decisions entirely upon o ur opinion in Chanute , we VACATE the panel opinion, REVERSE the decision of the district court, and REMAND to the district court for proceedings consis tent with this opinion.