## United States Court of Appeals FOR THE EIGHTH CIRCUIT

___________ No. 09-3325

___________ Southeast Missouri Hospital, *
* Plaintiff, *
* Saint Francis Medical Center, *
* Plaintiff-Appellant, * * Appeal from the United States v. * District Court for the * Eastern District of Missouri. C.R. Bard, Inc., *
* Defendant-Appellee, *
* Tyco International, US, Inc.; Tyco * Health Care Group; John Does 1-10, *
* Defendants. *
* ----------------------------- *
* Attorney General of the State of * Missouri, *
* Amicus on Behalf of * Appellant. *

___________ Submitted: June 15, 2010 Filed: June 8, 2011

___________Before MURPHY, BEAM, and BENTON, Circuit Judges.

___________ BENTON, Circuit Judge.
Saint Francis Medical Center brought this class action suit against C.R. Bard, Inc., a supplier of medical supplies. Acco rding to Saint Francis, Bard’s contracts with Group Purchasing Organizations violate secti ons 1 and 2 of the Sherman Act, section 3 of the Clayton Act, and Missouri antitrus t law. See 15 U.S.C. §§ 1, 2; 15 U.S.C. § 14; Mo. Rev. Stat. § 416.031 (2000). Saint Fra ncis seeks relief under sections 4 and 16 of the Clayton Act, and Missouri law. See 15 U.S.C. §§ 15, 26; Mo. Rev. Stat. § 416.121.1 (2000). The district court 1 granted summary judgment to Bard. Having jurisdiction under 28 U.S.C. § 1291, this court affirms.

I.

Saint Francis Medical Center, a hospita l in Cape Girardeau, is a member of Novation, a Group Purchasing Organization. GPOs negotiate standard contracts with suppliers on behalf of member hospitals. According to the parties, 96 to 98 percent of all hospitals in the United States bel ong to one or more GPOs. GPO membership is voluntary. Hospitals can (and do) switc h from one GPO to another, and may belong to multiple GPOs. GPOs do not purchase supplies; member hospitals do, under the terms of GPO-negotiated contr acts. GPO contracts with suppliers typically last three to eight years, and may be terminated by either side, with notice. Once a GPO contracts with a supplier, its member hospitals may sign letters of commitment, accepting the terms of the GPO contracts. A member hospital’s commitment may be terminated at any time, with notice to th e supplier. For the GPO contract between

1 The Honorable Thomas C. Mummert, III, United States Magistrate Judge for the Eastern District of Missouri. The parties consented to trial before a United States Magistrate Judge pursuant to 28 U.S.C. § 636( c), with direct review to this court.
-2-Novation and Bard for 2005 through 2008, the Acute Urologicals Letter of Commitment – covering catheters – states: “M ember reserves the right to terminate this letter of commitment at any time upon notice to Bard.”

GPO-member hospitals are not required to purchase through their GPO contracts. GPO-member hospitals can purchase supplies, like catheters, “offcontract,” negotiating their own prices withsuppliers. On average, hospitals save between 10 and 15 percent on their medi cal device purchases by buying under GPO
contracts.
Bard sells medical supplies, including catheters. Bard is the leading U.S. supplier of Foley catheters–tubes attached to an inflatable balloon used to drain a patient’s bladder over exte nded periods of time. From 2003 through 2008, Bard made over 80 percent of Foley sales to hospitals. Bard also has a significant share of the U.S. market for intermittent catheters–tubes used to drain a patient’s bladder and discarded after each use. 2
Saint Francis purchases Bard’s catheters through a GPO. According to Saint Francis, Bard abuses its dominant position in the catheter market in contracting with GPOs, inflating prices for hospitals. Speci fically, Saint Francis objects to sole-source provisions, share-based discounts, and bundled discounts in Bard’s GPO contracts.

Bard prefers sole-source contracts with GPOs. In sole-source contracts, Bard is the only supplier of catheters on the GPO’ s price list provided to member hospitals, and thus the only seller under the terms in the GPO contract. In addition, according to Saint Francis, Bard’s sole-source contracts with one GPO (Novation) from 2001 to 2005 urged participating member hospitals not to solicit proposals from Bard’s

2 According to Bard, its market share for intermittent catheters between 2003 and 2006 was 34 percent. Saint Francis c ounters that Bard’s share of intermittent catheter sales under GPO contracts exceeded 60 percent from 2003 to 2008.
-3-competitors or conduct product evaluations of competitors’ products. As the district court found, “there is ‘fierce competition’ for sole-source contracts.” Hospitals that buy Bard catheters under sole or dual-s ource contracts generally pay less than hospitals that do not. Even under sole-s ource agreements, howev er, member hospitals may purchase off-contract. Member hospitals may terminate an existing contract at will and on short notice.

Several of Bard’s GPO contracts include tiered pricing: hospitals get sharebased discounts for purchasing higher percenta ges of supplies from Bard. The largest discounts go to hospitals that buy at least 85 percent of certain listed products from Bard. Lesser discounts are offered to hos pitals that buy between 50 and 84 percent, and less than 50 percent, resp ectively, of their product needs from Bard. None of the GPO contracts give hospitals a discount for buying Bard catheters exclusively.

The GPO contracts also offer discounts to hospitals buying other Bard medical supplies along with catheters. These “bundled discounts” allow hospitals to pay a lower price for several medical products purchased together than when purchased separately. Bundles in the GPO contracts include catheters and related products, like drainage bags and urine meters.

After both Saint Francis and Bard moved for summary judgment, the district court ruled for Bard, finding no antitrust viol ation. Saint Francis appealed, and this court filed an opinion, 616 F.3d 888 (2010) , which this court later vacated.

II.

This court reviews the district court’s grant of summary judgment de novo. See, e.g., Amerinet, Inc. v. Xerox Corp. , 972 F.2d 1483, 1489-90 (8th Cir.), cert. denied , 506 U.S. 1080 (1993). A grant of summary judgment is appropriate only where the record, read most favorably to the non-moving party, indicates that “there

-4-is no genuine dispute as to any material f act and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a) ; see also Celotex Corp. v. Catrett , 477 U.S. 317, 321-23 (1986). There is no different or heightened summary judgment standard in complex antitrust cases. See Amerinet , 972 F.2d at 1490.

According to Saint Francis, Bard’s so le-source GPO contracts, share-based discounts, and bundled discounts unreasonably re strain trade in violation of sections 1 and 2 of the Sherman Act, section 3 of the Clayton Act, and the Missouri antitrust law. 3 See 15 U.S.C. §§ 1, 2 ; 15 U.S.C. § 14, 15, 26 ; Mo. Rev. Stat. § 416.031 (2000). Saint Francis’s theory is that, while hospita ls (even those participating in sole-source GPO contracts) may purchase catheters fro m other suppliers, Bard’s GPO contracts

are de facto exclusionary because the discount pri ces are so attractive that hospitals cannot afford to forgo them. See Concord Boat Corp. v. Brunswick Corp. , 207 F.3d 1039, 1058 (8th Cir. 2000) (claims under Section 1 of the Sherman Act “that allege only de facto exclusive dealing may be viable.”).

III.

Saint Francis’s challenge to the shar e-based discounts is precluded by this court’s decision in Concord Boat . There, boat builders brought antitrust challenges against engine-supplier Brunswick, attacking its market-share-discount program. Brunswick offered market-share discounts to boat builders who agreed to purchase a certain percent of their engines from Brunswick. The boat builders claimed the program placed them in “‘golden handcuffs,’ such that boat builders and dealers had no choice but to purchase engines from [Brunswick].” Concord Boat , 207 F.3d at 1060. These agreements–though not contractually exclusive–were so attractive, argued the boat builders, that they became de facto exclusive arrangements.

3 Missouri antitrust statutes are construed “in harmony with ruling judicial interpretations of comparable federal antitrust statutes.” Mo. Rev. Stat. § 416.141 (2000).
-5-Under the agreements in Concord Boat , “customers were not required either to purchase 100% from Brunswick or to refrain from purchasing from competitors in order to receive the discount.” Id

. at 1063. Any contracts between the boat builders and Brunswick were voluntary. “The programs did not require the boat builders to commit to Brunswick for any specified period of time.” Id . at 1059. The boat builders were “free to walk away from the discounts at any time” and did so when other manufacturers offere d superior discounts. Id . Based on the voluntary nature of the agreements between Bruns wick and the boat builders, as well as the boat builders’ willingness to purchase their engines else where for better discounts, this court reversed a jury verdict for the boat builder s, finding that the discount agreements were
not de facto exclusionary dealing. Id . at 1060.

Here, as in Concord Boat , Bard offered share-based discounts. Share-based discounts gave hospitals discounts for committing to purchase specified percentages of their catheter needs from Bar d. The greater the percenta ge, the greater the discount. In order to receive these discounts, hos pitals were not required to purchase 100 percent of their catheter needs from Bard, or to refrain from purchasing from competitors. Nor did the GPO discount ag reements contractually obligate hospitals to purchase anything from Bard. If a hosp ital purchased less th an the agreed upon percent, it simply lost its negotiated disc ount. Contrary to Saint Francis’s position, the share-based discounts here parallel those in Concord Boat

. Saint Francis attempts to distinguish this case from Concord Boat , emphasizing that the sole-source contracts and bundled discounts offered by Bard in this case were not offered by Brunswick in the Concord Boat case. Saint Francis ignores that the share-based discounts are the heart of the sole-source contracts, and the centerpiece of the bundled discounts. The legal principles in Concord Boat do apply in this case.

-6-IV.

The Concord Boat case makes clear that the threshold requirement for Saint Francis’s antitrust claims is dete rmining the relevant market. Id . at 1044. To prevail on any of its claims, Saint Francis has the burden of identifying a relevant market. See Double D Spotting Serv., Inc. v. Supervalu, Inc. , 136 F.3d 554, 560 (8th Cir. 1998) (“[T]o state a Sherman Act claim under either section 1 or section 2, the plaintiff must identify a valid relevant market.”); Tampa Elec. Co. v. Nashville Coal Co. , 365 U.S. 320, 327-28 (1961) (a relevant market is cr itical to a claim under section 3 of the Clayton Act). On summary judgment, a nonmovant must demonstrate a genuine dispute as to this material fact. See Flegel v. Christian Hosp., Northeast-Northwest , 4 F.3d 682, 690 (8th Cir. 1993) (“Like any othe r issue, market definition is subject to summary judgment if the plaintiffs fail to provide sufficient evidence from which a jury could reasonably find in their favor.”); Morgenstern v. Wilson , 29 F.3d 1291, 1296-97 (8th Cir.), cert. denied , 513 U.S. 1150 (1995). Without a well-defined relevant market, a court cannotdetermine the effect that an allegedly illegal act has on competition. See FTC v. Freeman Hosp. , 69 F.3d 260, 268 (8th Cir. 1995). “Antitrust claims often rise or fall on th e definition of the relevant market.” Bathke v. Casey’s Gen. Stores, Inc. , 64 F.3d 340, 345 (8th Cir. 1995). A relevant market consists of both a geographic market and a product market. Little Rock Cardiology Clinic PA v. Baptist Health , 591 F.3d 591, 596 (8th Cir.), cert. denied , 130 S.Ct. 3506 (2010). The parties agree that the geographic market is the United States. The issue is the relevant product market.

The outer boundaries of a product market can be determined by the reasonable interchangeability, or cross-elasticity of demand, between the product itself and possible substitutes for it. Brown Shoe Co. v. United States , 370 U.S. 294, 325 (1962); United States v. Archer-Daniels-Midland Co. , 866 F.2d, 242, 246 (8th Cir.), cert. denied , 493 U.S. 809 (1989). Determining the limits of a relevant product market requires identifying the choi ces available to customers. Craftsmen

-7-Limousine, Inc. v. Ford Motor Co. , 491 F.3d 380, 388 (8th Cir. 2007); see also Horizontal Merger Guidelines § 1, 57 Fed. Reg. 41, 552 (1992) (“Market definition focuses solely on demand substitution factor s–i.e., possible consumer responses.”). This determination focuses on how “cons umers will shift from one product to the other in response to changes in their relative costs.” SuperTurf, Inc. v. Monsanto Co. , 660 F.2d 1275, 1278 (8th Cir. 1981). Evidence that consumers will substitute one product for another in response to a slight decrease in price, strongly indicates those products compete in the same product market. See United States v. E.I. du Pont de Nemours & Co. , 351 U.S. 377, 400 (1956).

A.

A broad product market may contain well- defined submarkets that themselves are product markets for antitrust analysis. Brown Shoe , 370 U.S. at 325. As described in Brown Shoe , a submarket may be identified by industry or public recognition of its separate economic char acter, special uses or characteristics or production facilities, distinct customers or prices, price sensitivity, and specialized vendors. Id

.

The indicia in Brown Shoe are instructive in determining the existence of a submarket, but the presence of some, and absence of others, is not dispositive. See C.E. Services, Inc. v. Control Data Corp. , 759 F.2d 1241, 1246 (5th Cir. 1985) (“The existence of one or more of these [ Brown Shoe ] indices does not necessarily preclude a summary determination that certain produc ts or services either are reasonably interchangeable or demonstrate a high cross-elasticity of demand.”); International Tel. & Tele. Corp. v. Gen. Tel. & Elec. Corp. , 518 F.2d 913, 932 (9th Cir. 1975), overruled on other grounds , California v. American Stores Co. , 495 U.S. 271, 295 (1990) (noting that the Brown Shoe indicia “were listed with the intention of furnishing practical aids in identifying z ones of actual or potential competition rather

-8-than with the view that thei r presence or absence would di spose, in talismanic fashion, of the submarket issue.”).

Saint Francis claims that there are two product submarkets: one for Foley catheters sold under GPO contracts to hosp itals, and another for intermittent catheters sold under GPO contracts to hospitals. U nder this view, Foley catheters sold to hospitals under GPO contracts would be a separate product s ubmarket from Foley catheters sold through other channels.

To support this argument–that distribu tion channels for identical products can be submarkets–Saint Francis cites this court’s Henry decision. See Henry v. Chloride, Inc. , 809 F.2d 1334, 1342 (8th Cir. 1987). There, reviewing a jury verdict, this court held that automobile batteries sold by rout e-truck distribution was a valid submarket. Id . at 1343. Applying the Brown Shoe indicia, this court determined that the industry recognized route-truck distributors as a se parate entity, route-truck sales employed specialized vendors who served distinct cu stomers, and route customers paid higher prices and did not alter their purchasing choices in response to price changes. Id . at 1342-43.

Saint Francis does offer some evidence of industry manufacturers’ belief that securing GPO contracts is integral to their business. Specifically, Saint Francis points to a Bard document stating, “Virtually all major device manufacturers are acknowledging the necessity of negotiation w ith GPOs,” statements by other industry executives blaming poor product sales on bei ng excluded from GPO contracts, and the existence of GPO contracts themselves. Saint Francis has satisfied the summary judgment standard as to the first Brown Shoe indicator. Saint Francis does not argue that catheters sold through GPOs have special uses, charact eristics or production facilities. Saint Francis also does not establish any of the remaining Brown Shoe indicia.

-9-In Henry , the route-distribution providers were specialized vendors who provided expertise and advi ce to distinct customers with specific needs. See id . at 1342 (“Route sales were directed to a partic ular type of customer: the small servicestation owner who sells only a few batteries a week and who ‘needs some advice and maybe some help on moving hi s product.’”). Here, GPOs are not specialized vendors; the vendors are the same whether sales ar e GPO or non-GPO. Saint Francis does not rely on GPOs to gather product information or make product recommendations about catheters. Nor is Saint Francis unable to find catheters outside of GPOs, through independent channels. Cf

. United States v. Grinnell Corp. , 384 U.S. 563, 574 (1966) (when a firm or firms distinguish themselv es by offering particular packages of goods or services, there may exist a core group of consumers for whom “only [that package] will do.”).

In Henry , the method of delivery was integral to making the product unique and appealing to a specific class of customers. Compare Henry , 809 F.2d at 1342, and CBS, Inc. v. FTC , 414 F.2d 974, 978-79 (7th Cir. 1969) (recognizing mail order records as a submarket because the record clubs met the needs of specific consumers who would not shop at retail stores), with M.A.P. Oil Comp., Inc. v. Texaco, Inc. , 691 F.2d 1303, 1307-08 (9th Cir. 1982) (distribution services for gasoline was not, as a matter of law, a separate submarket fro m the sale of gasoline itself because “[c]ustomers can choose between direct delivery of gasoline and delivery through distributors or commissions agents, but in the final analysis they purchase a single product–gasoline.”), and Pepsico, Inc. v. Coca-Cola Comp. , 315 F.3d 101, 105-08 (2d Cir. 2002) (affirming the district court’ s summary determination that a specific distribution channel was not a submarket wher e most customers stat ed that the method of delivery did not determine their choi ce of fountain syrup–Fountain syrup delivered by bottler distributors was an “acceptable substitute” for fountain syrup delivered by independent food service distributors). Saint Francis does not purchase catheters through GPOs because they offer better deliv ery methods (catheters are delivered the same way, regardless of how they are bought). In the end, GPOs provide none of the

-10-additional distribution efficiencies and advant ages that this court used to recognize a submarket in Henry

. Saint Francis further argues that cathe ters sold under GPO contracts are not reasonably interchangeable with those sold independently, due to the “significant cost savings” under GPO contracts. The Suprem e Court has repeatedly said that for identical items, a price differential alonedoes not establish two separate product markets. See Brown Shoe Co. 370 U.S. at 326 (specifically rejecting the argument that a “predominantly medium-priced shoe . . . occup[ied] a product market different from the predominantly low-priced shoe.”); United States v. Cont’l Can Co. , 378 U.S. 441, 455 (1964) (“[P]rice is only one factor in a user’s choice between one [product] or the other. Th at there are price differentials between the two products or that the demand for one is not particularly or immediately responsive to changes in the price of the other are relevant matters but not determinative of the product market issue.”); see also HDC Med., Inc. v. Minntech Corp. , 474 F.3d 543, 547-48 (8th Cir. 2007) (noting that a price differential alone cannot support separating otherwise identical products into distinct product markets). Concord Boat says that “cutting prices in order to increase business often is the very essence of competition.” 207 F.3d at 1061. The “Supreme Court has urged great caution and a skeptical eye when dealing with unfair pricing claims.” Id . at 1060 (internal quotations omitted).

Even if a price differential were rele vant here, Saint Francis identifies no evidence of any uniform “significant co st savings” from purchasing GPO catheters compared to non-GPO catheters. Competitors such as Tyco and Rochester offered non-GPO catheters that were cheaper than the Bard-GPO catheters. Saint Francis offers no evidence that it did not purchase cheaper catheters becau se it feared losing other, more significant discounts. Instead , the record indicates that Saint Francis forfeited the savings offere d by other manufacturers, and purchased Bard catheters, because its physicians preferred them and physician preference accounted for “85% of the decision” about whatcatheters to purchase . See, e.g. , id . at 1056 (“[Expert’s]

-11-opinion that Brunswick’s discount programs imposed a tax on boat builders who chose to purchase engines from other manuf acturers is not supported by the evidence that some boat builders chose to purch ase 100% of their engines from Brunswick when they only needed to purchase 80% to qualify for the ma ximum discount.”). According to Saint Francis’s head of pur chasing, when Tyco offered Saint Francis cheaper catheters, “the surgeons at the hospital would not allow it.”

Saint Francis’s main expe rt asserts that a small but significant non-transitory increase in price (SSNIP) “in the GPO marketdoes not cause cu stomers to switch their purchases to another distribution cha nnel.” True, in theory, if customers do not switch products in response to an SSNIP (gen erally a 5 percent increase in price), a separate submarket may exist. See Horizontal Merger Guidelines § 1.11, 57 Fed. Reg. 41, 552 (1992) (“In attempting to determine objec tively the effect of a ‘small but significant and non-transitory increase in pri ce,’ the [FTC], in most contexts, will use a price increase of five percent las ting for the foreseeable future.”); s ee also Henry , 809 F.2d at 1342 (automobile batteries sold through route sales was a valid submarket in part because “[r]oute distribution custom ers did not shift readily to other sources of batteries in response to price changes. ”). Saint Francis’s expert, however, offers no market studies to support this claim, making the assertion without analytic or even anecdotal evidence. Cf. FTC v. Whole Foods Market, Inc. , 548 F.3d 1028, 1037-40 (D.C. Cir. 2008) (Brown, J., with Tatel, J ., concurring in judgment) (experts disagreed about the appropriate method for an SSNIP analysis–critical loss versus critical diversion–but each conducted extensive hypothetical analysis); United States v. Oracle Corp. , 331 F.Supp.2d 1098, 1145-49 (N.D.Cal. 2004) (expert included significant, specific, and extensive analysis of the factors thoughtto be relevant to making a hypothetical claim based on an SSNIP). In Concord Boat , this court rejected the expert opinion offered by the boat builders because the resulting conclusions were “mere speculation.” 207 F.3d at 1057 (“Expert testimony that is speculative is not competent proof and contributes ‘nothing to a legally sufficient evidentiary basis.’” (quoting Weisgram v. Marley Co. , 528 U.S. 440, 442 (2000))).

-12-Although Saint Francis’s expert is a highly regarded economist and a “battle of the experts” could identify a disputed issue of material fact, Phillips v. Cohen , 400 F.3d 388, 399 (6th Cir. 2005), at least some fact s must be identifi ed that support the expert’s theory.

Saint Francis finally argues that here, unlike in Concord Boat, there is empirical evidence that the catheter mark et has been foreclosed. The empirical evidence Saint Francis cites assumed that a hospital was fo reclosed to Bard’s ri vals when it purchased a Bard catheter under a GPO contract, or at the highest tier of a share-based discount. As Concord Boat directs, however, in determining wh ether a market is foreclosed, the relevant inquiry is what products are r easonably available to a consumer, not what products the consumer ultimately chooses to buy. 207 F.3d at 1059.

Saint Francis has failed to satisfy the Brown Shoe factors for a relevant product submarket.

B.

Emphasizing “economic realities,” Saint Francis stresses one feature of some GPO contracts, “claw-back” provisions th at permit Bard to recapture discounts if hospitals do not purchase enough products unde r their GPO contract. Saint Francis asserts that these contract terms deter hosp itals from switching to other manufacturers.

The record does not support this claim. Hospitals may (and do) purchase products off-contract, including catheters, if they can get a bette r product or a better price. Because the GPO-negotiated contr acts are voluntary agreements, terminable at will and on short notice, any hospital c ould, at any time, decide to forego the offered discounts and purchase cathe ters from a different brand. See Concord Boat , 207 F.3d at 1059 (noting that the actual beha vior of the boat bu ilders indicated that

-13-they were willing and able to switch to other engine suppliers). In fact, Saint Francis’s own head of purchasing had “no loyalty to any GPO.” He testified, “If the decision [of what catheters to purchase] was up to me, I would have threw both GPOs out and tried to negotiate it myself.” But, phy sician preference controlled “85% of the [catheter purchasing] decision.”

Saint Francis’s only claw-back example refutes its argument. Saint Francis describes another hospital th at “switched from Bard to Tyco for its Foley trays and drainage bags . . . because doing so saved $20,000 per year–more than enough to compensate for the $2,250 penalty Bard ch arged the hospital for defecting from its purchasing obligations.” On this record , the penalties do not prevent hospitals from switching from GPO to non-GPO products in orde r to take advantage of better offers. 4

C.

A relevant market is made up of produc ts that consumers view as reasonable substitutes. Saint Francis tries to narrow the scope of th e product market but fails to offer sufficient evidence that Foley and intermittent catheters sold through GPO contracts are distinct product submarkets from those sold through other channels.

4 Saint Francis’s legal theory is also su spect. “A court making a relevant market determination looks not to the contractual re straints assumed by a particular plaintiff when determining whether a product is interc hangeable, but to the uses to which the product is put by consumers in general.” Queen City Pizza, Inc. v. Domino’s Pizza, Inc. , 124 F.3d 430, 438, 441 (3d Cir. 1997) (holding that a product market consisting of interchangeable goods–pizza sauce, dough, and paper cups–cannot be sub-divided by contractual restraints that require a franchisee to purchase these goods from a certain supplier–Domino’s).
-14-V.

Saint Francis’s brief on appeal include s the argument that the entire United States market for Foley catheters–both GP O-contracted and non-GPO–is the relevant product market. However, throughout the di strict court proceedings, Saint Francis referred to the GPO distribution channel as the only relevant product market. In its statement of uncontroverted material facts in response to Bard’s motion for summary judgment, Saint Francis states, “There are tw o relevant product markets at issue in this case . . . (i) the market for the sale of Foley catheters to purchasers through group purchasing organizations (“GPOs”); and (ii) the market for sale of intermittent (or urethral) catheters to purchasers through GPOs .” And, in its ow n motion for partial summary judgment, Saint Francis reiterates this relevant market, arguing that “Bard’s GPO contracts have caused anticompetitive e ffects in the market for Foley catheters sold through GPOs.”

Saint Francis argues that it did allege the all-Foley-catheter product market in the district court, directing this court to its second amended complaint that identified the relevant market as “internal Urological Catheters sold in the United States.” This vague description is meaningless because , until this appeal, Saint Francis does not again refer to the all-Foley-catheter ma rket as the relevant product market. See Hopkins v. Saunders , 199 F.3d 968, 974-75 (8th Cir. 1999) (arguments included in the complaint but not asserted to the district court were waived on appeal); Celotex , 477 U.S. at 324 (“Rule 56(e) permits a proper summary judgment motion to be opposed by any of the kinds of evidentiary materials listed in Rule 56(c), except the mere pleadings themselves.”) (emphasis added); Grenier v. Cyanamid Plastics, Inc. , 70 F.3d 667, 678 (1st Cir. 1995) (“Even an issue raised in the complaint but ignored at summary judgment may be deemed waived.”).

Saint Francis also points to a footnote in its expert’s Daubert declaration (which is repeated in its response to Bard’s summary judgment motion). The

-15-footnote–“Plaintiff’s expert . . . has tes tified that his opinions regarding Bard’s anticompetitive conduct also apply to broade r alternative markets which include all sales of Foley catheters”–does not satisfy Saint Francis’s duty to present an argument that the district court can review. See Satcher v. Univ. of Ark. at Pine Bluff Bd. of Trustees , 558 F.3d 731, 735 (8th Cir. 2009) (It is “not the [d]istrict [c]ourt’s responsibility to sift through the record to see if, perhaps, there was an issue of fact.”); Rodgers v. City of Des Moines , 435 F.3d 904, 908 (8th Cir. 2006) (“Without some guidance, we will not mine a summary judgment record searching for nuggets of factual disputes to gild a party’s argument.”).

By failing to make the all -Foley-catheter argument to the district court, Saint Francis has waived this argument. See Midwest Oilseeds, Inc. v. Limagrain Genetics Corp. , 387 F.3d 705, 715 (8th Cir. 2004)(“[O]nly those matters properly before [the] district court for summary judgment consider ation are subject to appellate review.”) (citations omitted) (alternations in original); see also KPERS v. Blackwell, Sanders, Matheny, Weary, & Lombardi, L.C. , 114 F.3d 679, 688 (8th Cir.), cert. denied , 552 U.S. 1068 (1998); Roth v. G.D. Searle & Co. , 27 F.3d 1303, 1307 (8th Cir. 1994).

VI. Based on the precedent of Concord Boat , and specifically Saint Francis’s failure to identify a relevant submarket, the judgment of the district court granting summary judgment to Bard is affirmed. BEAM, Circuit Judge, dissenting.
Saint Francis Medical Center, on behalf of itself and a class of urological catheter purchasers, appeals the district court's grant of summary judgment to C.R. Bard in this antitrust class action. I would reverse and remand.

-16-I. BACKGROUND

Bard is the leading manufacturer of Fo ley catheters and related products and markets its products to healthcare providers. With respect to this action, Bard manufactures three types of catheters: sta ndard Foley catheters, infection-control Foley catheters, 5 and intermittent catheters. Foley catheters are either silicone or latex devices with an inflatable balloon at one e nd to hold the catheter in place, allowing the catheter to drain a patient's bladder over extended periods of time. Unlike a Foley catheter, an intermittent catheter is a single- use catheter. The parties agree that Foley catheters are not interchangeable with intermittent catheters.

Hospitals such as Saint Francis purchase these catheters in one of four ways: (1) without a contract, thereby paying the manufacturer's list price; (2) by negotiating an individual contract, referred to as a "local agreement"; (3) by belonging to an Integrated Delivery Network (IDN), a collec tion of affiliated hos pitals that conduct centralized purchasing; or (4) by joini ng a Group Purchasing Or ganization (GPO), an organization that negotiates supply agreem ents with multiple manufacturers on behalf of member hospitals. As concerns the purch ase of the catheters atissue in this case, the record reveals that hospitals sometim es employ a combination of these methods in purchasing catheters. Thus, if a hospita l can achieve a cheaper price for the product it desires by going "off-contract" or by nego tiating an individual contract, it may do so despite also being a member of a GPO. It is undisputed, however, that hospitals purchase a large percentage of catheters th rough the use of a GPO contract. In fact, according to Saint Francis, approximately eighty-five percent of all Foley and intermittent catheters purchased by hos pitals are purchased through GPOs.

5 Both standard and infection-control Foley catheters are used for the same purpose. The only difference between the tw o is that the infection-control Foley catheters are treated with an anti-microbi al agent intended to reduce the occurrence of urinary tract infections.
-17-In an effort to capitalize on GPO sales, Bard bids on numerous GPO contracts. Saint Francis contends that in this "bidding" process, Bard has effectively foreclosed the GPO market from its competitors by only bidding on sole-source or dual-source GPOs and including a variety of anticompetitiv e terms: (1) share-based requirements; (2) bundled discounts; and (3) tie red rebates. As a result of this conduct, Saint Francis alleges that it has been forced to pay an above-market price for catheters and related products in violation of the antitrust laws. Accordingly, Saint Francis brought this action for violation of Sections 1 and 2 of the Sherman Act, Section 3 of the Clayton Act and the Missouri Antitrust Law.

Bard filed a motion for summary judgment which the district court granted and Saint Francis now appeals. Because I believe there are dis puted questions of material fact, I would reverse and remand.

II. DISCUSSION

"We review de novo a grant of summary j udgment, considering the facts in the light most favorable to the nonmoving party. Summary judgment is proper when no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law." HDC Med., Inc. v. Minntech Corp. , 474 F.3d 543, 546 (8th Cir. 2007) (quotation omitted). The primary issue I have with the district court is that it weighed the evidence and resolved disputed questions of fact in favor of Bard, the moving party. Such a resolu tion of disputed questions of fact is inappropriate on summary judgment. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 255 (1986).

A. Relevant Product Market

Under the Sherman Antitrust Act, "it is unlawful to contract or form a conspiracy 'in restraint of trade or co mmerce among the several States,' 15 U.S.C. § 1, or to 'monopolize or attempt to monopolize . . . any part of the trade or commerce

-18-among the several States,' 15 U.S.C. § 2. " Little Rock Cardiology Clinic PA v. Baptist Health , 591 F.3d 591, 596 (8th Cir. 2009) (omi ssion in original), cert. denied , 130 S. Ct. 3506 (2010). Saint Francis has not alleged a per se violation, therefore it must establish a relevant market. See id. ; see also Double D Spotting Serv., Inc. v. Supervalu, Inc. , 136 F.3d 554, 560 (8th Cir. 1998) (" [T]o state a Sherman Act claim under either section 1 or section 2, the plaintiff must identify a valid relevant market."). "A relevant market consists of both a product market and a geographic market." Little Rock , 591 F.3d at 596. The parties ag ree that the geographic market is the United States. Thus, the question fo r our review is whether Saint Francis has presented sufficient evidence of a relevant product market. See HDC Med. , 474 F.3d at 547 ("The relevant product market is a question of fact, which the plaintiff bears the burden of proving.").

"The boundaries of the product market can be determined by the reasonable interchangeability or cross-elasticity of demand between the product itself and possible substitutes for it." Id. Saint Francis contends th at it presented substantial evidence of (1) a product market for all di stributions of Foley catheters and all distributions of intermittent catheters; and/or (2) the separate and distinct submarket for Foley and intermittent catheter sales made through GPOs. The district court disagreed and held that (1) neither Fole y nor intermittent catheters constitute a relevant product market because particular consumers prefer particular brands and makes of catheters; and (2) the GPO submarket was not a relevant product market as a matter of law. In my view, Saint Francis has presented sufficient evidence to create a genuine issue of fact as to whether e ither of these markets constitutes a relevant product market.

1. All Foley and All Intermittent Markets

The district court held that because particular consumers prefer particular brands and makes of Foley and intermittent catheters, there was no cross-elasticity of

-19-demand between the product and possible subs titutes for it. And, the record does contain evidence tending to show that physicians have preferences for catheters depending on whether they are latex or s ilicone, the reputation of the manufacturer, the rate of infection control, whether the manufacturer has a full line of ancillary products, and whether the clinicians have experience with the catheters. However, even Bard itself acknowledges that "a Bard Foley catheter sold to a hospital under a GPO contract is . . . intercha ngeable with an equivalent Ty co catheter." Appellee's Br. 32. And, there was testimony indicating th at the catheters were commodity products, not physician preference items. Appellant's App. 2309-10, 2455, 3682-85. Finally, the only evidence in the record which conclusively establishes a "lack of interchangeability" of products indicates thatFoley catheters are not interchangeable with intermittent catheters. But, the record would support a factual finding that all Foley catheters are interchang eable with all other Foley catheters regardless of brand or presence of antimicrobial agents. Id. 1544 n.34, 3681-82, 3701. And, there was similar evidence on the record supporting a similar conclusion with respect to intermittent catheters. Id. 2310. Thus, while physicia n brand preferences might influence a jury to find thata Bard Foley catheter is not interchangeable with a Tyco Foley catheter, "determining the relevant product market is a factual issue which is reserved to the jury, [and] we are not pe rmitted to weigh the evidence." Gen. Indus. Corp. v. Hartz Mountain Corp. , 810 F.2d 795, 805 (8th Cir. 1987).

On appeal, Bard does not attempt to defend the district court's opinion. Instead, Bard asserts that Saint Franc is failed to argue–and therefore waived–this definition of a product market. I disagree. First, the fact that the district court discussed this product market belies Bard's assertion that Saint Francis never made the argument. Second, the record contains facts supporting and discussing this market. Appellant's App. 4118 n.11. Third, Saint Francis specifically raised the issue in its complaint. Fourth, Saint Francis at least mentioned th is market in its summary judgment papers. And fifth, that Saint Francis chose to focus its argument on the submarket–discussed

-20-below–only indicates that it was trying to pers uade the district court to adopt this more narrow market. Accordingly, Saint Francis did not waive this argument.

2. The GPO Submarket

Saint Francis also maintains that within the national market for the sale of all Foley and intermittent catheters is a di stinct submarket: Foley and intermittent catheters sold through GPOs. "As describe d in Brown Shoe [Co. v. United States , 370 U.S. 294, 325 (1962)], such a submarket may be identified by industry or public recognition of its separate character, speci al uses or characteristics or production facilities, distinct customers or prices, price sensitivity, and specialized vendors." Henry v. Chloride, Inc. , 809 F.2d 1334, 1342 (8th Cir. 1987).

The district court rejected the GPO s ubmarket because (1) "Plaintiffs have not established that all Foley catheters or all intermittent catheters are reasonably interchangeable products"; and (2) such a market "improperly manipulates the boundaries of the product market by including in the definition the tool by which Plaintiffs allege Bard is restraining trade–the GPOs." The first of these two arguments fails for the reasons stated above–i.e., there is record evidence from which a reasonable jury could conclude that all Fo ley catheters are reasonably interchangeable and/or that all intermittent catheters ar e reasonably interchangeable. The district court's second proffered reason is similarly inappropriate on summary judgment.

Here Saint Francis does not argue that th ere are special uses , characteristics, or production facilities for the Foley and inte rmittent catheters sold through GPOs. However, Saint Francis did present eviden ce tending to show that (1) both purchasing hospitals and medical manufacturers recognized GPO sales as separate and distinct from non-GPO sales; (2) the GPO prices were distinctfrom non-GPO prices; (3) a small but significant non-transitory increase in price in the GPO sales did not cause customers to switch to a different distri bution channel; and (4) the GPO's were, in

-21-effect, specialized vendors. The only way the district court could conclude, on summary judgment, that the GPO market was not a submarket was to improperly weigh the evidence against Saint Francis. That was error.

On appeal, Bard argues that (1) hospitals themselves consider catheters sold outside GPO contracts to be interchangeable with catheters sold under GPO contracts; and (2) GPO contracts are not part of the chain of distribution for catheters. While there may be evidence in th e record to support both of these propositions, the record does not compel either of these pronouncements as a matter of law.

In Henry , the plaintiff, a battery wholesaler , attempted to define the relevant product market as battery sales through route salespersons as separate and apart from battery sales from wholesale distributers. We held that although "batteries sold by route salespersons are not different in char acter, creation, or us e from those sold from a warehouse or store . . . there was suffici ent evidence for a jury to find a narrower market as well." 809 F.2d at 1342-43. Similarly, in Columbia Broadcasting System, Inc. v. F.T.C. , 414 F.2d 974, 978-79 (7th Cir. 1969), the Seventh Circuit found sufficient evidence in the record to fi nd that phonograph records sold through record clubs, though of the same character as those records sold in record stores and other outlets, constituted a separate submarket. Accordingly, the fact that the catheters at issue in this case are the same, whether sold under GPOs or not, is not conclusive evidence that the GPO is not a relevant submarket.

B. Sherman Act

Saint Francis avers that Bard violated both Section 1 and Section 2 of the Sherman Act. The district court held thateven if there was a relevant product market of Foley and one of intermittent catheters , Saint Francis failed to show that Bard engaged in anticompetitive conduc t. I believe the record presents a question of fact on this issue.

-22-1. Monopolization Claim (Sherman Act § 2)

Saint Francis focuses the majority of its discussion on whether it has established a Section 2 violation. I begin there. "T o establish a Section 2 violation, plaintiffs must show that 1) the defe ndant possessed monopoly power in the relevant market and 2) the defendant willfully acquired or maintained this monopoly power by anticompetitive conduct. . . . " Concor d Boat Corp. v. Brunswick Corp. , 207 F.3d 1039, 1060 (8th Cir. 2000).

a. Market Power

"Market power generally is de fined as the power of a firm to restrict output and thereby increase the selling price of its goods in the market." Ryko Mfg. Co. v. Eden Servs. , 823 F.2d 1215, 1232 (8th Cir. 1987). "Market power may be shown by a firm's percentage of sales in the market, especially where ther e is a strong consumer preference for the firm's product . . . and wh ere there are significan t barriers either to the entry of new firms or to incr eased output by existing firms." Id. And, "[a]n eighty percent market share is within the permissible range from which an inference of monopoly power can be drawn." Morgenstern v. Wilson , 29 F.3d 1291, 1296 n.3 (8th Cir. 1994).

If the jury defines the relevant market s as the national market for all Foley catheter sales and for all inte rmittent catheter sales, then there is evidence that Bard possesses market power in the sale of Fo ley catheters. Bard's own expert found that Bard commanded 82.7% of that market. Howe ver, there is insufficient evidence to show that Bard maintained market power in the intermittent catheter market. In fact, the record indicates that Bard only has a 34% share of that national market. See id. , ("As a matter of law, absent other relevant factors, a thirty percent market share will not prove the existence of monopoly power.").

-23-If, however, the jury defines the relevantmarkets as the sale of Foley catheters through GPO sales and the sale of intermittent catheters th rough GPO sales, then there is evidence that Bard possesses market power in both markets. In particular, the record shows that Bard's shar e of the GPO market for Fo ley catheters was 89%. See id. (noting that eighty percent can create an inference of market power.). And, although not as significant, Bard's share of the GPO market for intermittent catheters was as high as 67.7%. See id. (citing Domed Stadium Hotel, Inc. v. Holiday Inns, Inc. , 732 F.2d 480, 489 (5th Cir. 1984), for th e proposition that sixty percent may not suffice but it is not legally insufficient).

Bard argues that the evidence of marketshares alone is not sufficient to withstand summary judgment. See, e.g. , Reazin v. Blue Cross & Blue Shield of Kansas, Inc. , 899 F.2d 951, 967 (10th Cir. 1990) ("Market share is relevant to the determination of the existence of marketor monopoly power, but market share alone is insufficient to establish market power." ) (internal quotation omitted). Accordingly, Bard encourages us to consider "other mark et realities" including "entry barriers" and competition for catheter business to de termine whether Bard possesses monopoly power. However, the record is inconclusive as to whether barriers to entry exist and whether Bard had to lower prices to effectively compete for GPO and hospital business. Indeed, Saint Francis presented evidence tending to show that a lengthy and burdensome FDA review process exists as an entry barrier, that a "de minimus" number of new competitors entered the mark et, and that Bard lowered its prices to foreclose others from getting business. Acco rdingly, there is, in my view, a genuine issue of fact as to whether Bard possesses market power.

-24-b. Anticompetitive Conduct

Saint Francis argues that Bard's GPO contracts were anticompetitive because they (1) were exclusive or semi-exclusive dealing arrangements; (2) included marketshare discounts; and (3) included bundled disc ounts and rebates. The district court rejected Saint Francis's arguments and he ld that the conduct which Bard participated in was not anticompetitive as a matter of law. Again, I believe there are questions of fact on these issues.

"Because cutting prices in order to incr ease business often is the very essence of competition, . . . it 'is beyond the practical ability of a judicial tribunal to control [above cost discounting] without courting in tolerable risks of chilling legitimate price cutting.'" Concord Boat , 207 F.3d at 1061 (alteration in original) (quoting Brooke Group Ltd. v. Brown & Williamson Tobacco Corp. , 509 U.S. 209, 223 (1993)). Thus, "[i]f a firm has discounted prices to a le vel that remains above the firm's average variable cost, 'the plaintiff must ove rcome a strong presumption of legality by showing other factors indicating that th e price charged is anticompetitive.'" Id. (quoting Morgan v. Ponder , 892 F.2d 1355, 1358 (8th Cir. 1989)). This court's decision in Concord Boatis instructive on this issue.

In Concord Boat , we held that because the defendant's discount programs (1) were not exclusive dealing contracts; (2) did not require the customers to purchase 100% from the defendants; and (3) did not bundle or tie multiple products together, the discount programs were not anticompetitive. Id. at 1062-63. Unlike the discounts in Concord Boat , Saint Francis has here presen ted evidence tending to show that Bard's GPO discount pricing scheme s bundled discounts by linking monopolistic products with another competitive pr oduct. As noted in Concord Boat , such bundled discounts may constitute anticompetitive conduct. Id. at 1062 (collecting cases). Additionally, Saint Francis has also pres ented evidence showing that Bard's GPO contracts were at least semi-exclusive if not completely exclusive. Moreover, while

-25-the evidence shows that hospitals did not feel compelled to buy 100% of their requirements from Bard, Saint Francis also presented evidence showing that the GPO contracts forced hospitals to buy a large pe rcentage of their needs from Bard. And, evidence also indicates that Bard's competito rs would have to offer a product at far below cost in order to co mpete with Bard's tiered-pricing scheme. Finally, Saint Francis stated that Bard's GPO discounts c oupled with its sole-source and dual-source agreements effectively foreclosed compe titors from the market. Accordingly, I believe there is at least a question of fact as to whether Bard's bundled and tiereddiscount programs were anticompetitive. The district court improperly resolved these factual disputes in favor of Bard.

Finally, Saint Francis's expert concluded that under the attribution test articulated in Cascade Hea lth Solutions v. PeaceHealth , 515 F.3d 883 (9th Cir. 2008) 6
, Bard's bundled discounts were anticompetitive because the non-catheter products in the bundles were priced below cost. Under Cascade , an anticompetitive bundle is one that prevents a rival from earning a prof it on the product bundled with the product that is allegedly monopolized. Id. at 906-07. Bard argues that the expert incorrectly applied the test. To be sure, we should re ject an expert opinion "when indisputable record facts contradict or otherwise render the opinion unreasonable." Concord Boat , 207 F.3d at 1057 (quotation omitte d). And, here, the undis puted evidence showed that (1) hospitals did not believe they were prevented from buying off-contract; (2) 30- 40% of all catheters are sold outside of GPO contracts; and (3) between 34 and 71% of catheters sold on GPO contracts are not soldat the highest price tier. But, there is also evidence supporting Saint Francis's e xpert. Indeed, Bard's own documents show that a hospital must comply with GPO re quirements or lose the discounts. Such requirements include mandating that GPO memb ers look first to the GPO contract for their needs or risk losing the bundled a nd tiered discounts. Accordingly, this

6 It is uncertain whether our circuit would adopt the test set forth in this case, but it presents a possible legal and factual rationale for how bundled discounts work to foreclose the market.
-26-evidentiary dispute presents a question of fact as to whether the contracts were anticompetitive.

2. Antitrust Injury

Where private plaintiffs bring an antitrus t action, it is not sufficient for them to merely show that the defendants engage d in anticompetitive conduct. Instead "a private plaintiff must [also] demonstrate thathe has suffered an 'antitrust injury' as a result of the alleged conduct of the defendants, and that he has standing to pursue a claim under the federal antitrust laws." In re Canadian Import Antitrust Litig. , 470 F.3d 785, 791 (8th Cir. 2006). The district court concluded that Saint Francis had not presented any evidence establishing that th ey were injured by a ny of Bard's alleged anticompetitive conduct. I disagree.

An antitrust injury is an "injury of the type that antitrust laws were intended to prevent and that flows from that which makes defendants' acts unlawful." Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc. , 429 U.S. 477, 489 (1977). Here Saint Francis presented evidence showing that but for Bar d's exclusionary conduct, catheter prices would have been approximately 40% lowe r than the average price paid by Bard's customers. Additionally, Saint Francis presented evidence showing that certain penalties Bard charged hospitals defecti ng from their GPO purchasing obligations caused hospitals to continue to buy Bard cathe ters at a higher price. Such evidence of having to pay a higher price for a produc t is "assuredly one type of [antitrust] injury." Blue Shield of Virginia v. McCready , 457 U.S. 465, 482 (1982).

Notably, there is evidence in the record indicating that Sain t Francis continues to buy Bard catheters, although Tyco's are lowe r in price, because that is what its physicians want. However, whether Saint Francis actually purchases such catheters as a matter of preference or because of Bard's anticompe titive conduct is, in this case, a question of fact.

-27-C. Section 3 of the Clayton Act

Saint Francis also alleged that Bard vi olated Section 3 of the Clayton Act. Section 3 of the Clayton Act prohibits the offe ring of a "discount . . . or rebate . . . on the condition, agreement, or understanding thatthe . . . purchaser . . . shall not use or deal in the goods . . . of a competitor. " 15 U.S.C. § 14. "Contracts imposing an obligation on a distributor to deal only in the goods of a single supplier will violate Section 3 when 'performance of the contract will foreclose competition in a substantial share of the line of commerce affected. . . . That is to say, the opportunities for other traders to enter into or remain in that mark et must be significantly limited. . . . '" Ryko Mfg. Co. , 823 F.2d at 1233 (omissions in original) (quoting Tampa Elec. Co. v. Nashville Coal Co. , 365 U.S. 320, 327-28 (1961). Since Saint Francis has presented evidence showing that the discounts that Bard offered impaired the ability of its competitors to enter the GPO market, and that the discounts encouraged the GPO to only deal in Bard's goods, Saint Francis has presented enough evidence to survive summary judgment on this count as well.

III. CONCLUSION

This case comes to us afte r the district court granted summary judgment. Since there are genuine issues of material fact re garding (1) the scope of the relevant product market; (2) the extent of Bard's market power; and (3) the extent of Bard's anticompetitive conduct, I w ould reverse and remand.

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