1994 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

5-13-1994

Pastore, et al v. The Bell Telephone Company

Precedential or Non-Precedential:

Docket 93-3556

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Recommended Citation

"Pastore, et al v. The Bell Telephone Company" (1994). 1994 Decisions. Paper 16.

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1 

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT 

________________ 

NO. 93-3556 

_______________ 

GARY L. PASTORE, an individual; 

NATIONAL SECURITY SYSTEMS CORPORATION, 

a Pennsylvania corporation, 

 Appellants

v. 

THE BELL TELEPHONE COMPANY OF PENNSYLVANIA, 

a Pennsylvania corporation; BELL ATLANTIC CORPORATION, 

a Delaware corporation; RONALD DONALDSON, 

ROBERT S. FADZEN, JR.; RAYMOND J. WICKLINE; 

GEORGE CALDWELL 

_______________ 

On Appeal from the United States District Court 

for the Western District of Pennsylvania 

(D.C. Civil No. 92-00923) 

_______________ 

Submitted Under Third Circuit LAR 34.1(a) 

May 2, 1994 

Before: SLOVITER, Chief Judge, HUTCHINSON, 

and SEITZ, Circuit Judges

(Filed: May 16, 1994) 

_______________ 

John R. Orie, Jr. 

Orie & Zivic 

Pittsburgh, PA 15219 

 Attorney for Appellants 

Richard B. Tucker, III 

Jeffrey J. Leech 

Diane Hernon Chavis 

Tucker Arensberg, P.C. 

Pittsburgh, PA 15222 

 Attorney for Appellees 

 Bell Telephone Co. of Pennsylvania; 
2 

 Bell Atlantic Corp.; Ronald Donaldson; 

 Raymond J. Wickline; George Caldwell 

Ralston S. Jackson 

Odermatt & Jackson 

Pittsburgh, PA 15219 

 Attorney for Appellee 

 Robert S. Fadzen, Jr. 

OPINION OF THE COURT

SLOVITER, Chief Judge. 

 Gary Pastore and National Security Systems Corporation 

(NASSCO), plaintiffs-appellants, appeal from the entry of summary 

judgment in favor of defendants-appellees Bell Atlantic 

Corporation, its subsidiary, Bell Telephone Company of 

Pennsylvania, and four individual employees on plaintiffs' 

attempted monopolization claim under section 2 of the Sherman 

Act, 15 U.S.C. § 2 (Supp. IV 1992). 

I. 

FACTS AND PROCEDURAL HISTORY

 The facts in this case are, for the most part, not in 

dispute. Pastore established NASSCO in early 1986 to install a 

sophisticated custom-designed access control communications 

security network (CDACCSN) for Bell of Pennsylvania, which 

awarded it a contract for thirty of its facilities. Bell of 

Pennsylvania told Pastore that it planned to order the same 

system for all of its 800 facilities if this pilot project was 

successful and that it might extend to as many as 4,000 

facilities in other subsidiaries of Bell Atlantic. 
3 

 The pilot project was timely completed and Bell of 

Pennsylvania officials expressed satisfaction with NASSCO's 

performance. Thereafter, they repeatedly asked NASSCO to 

surrender the computer source codes and specific proprietary 

information and technical designs relating to the CDACCSN which 

NASSCO declined to do, but because Bell of Pennsylvania insisted 

on some guarantees in the event of NASSCO's bankruptcy, NASSCO 

agreed to deposit in escrow the requested proprietary 

information. 

 Nonetheless, Bell of Pennsylvania ceased doing business 

with NASSCO and told NASSCO in March 1990 that a project for a 

Pittsburgh facility had been placed "on hold." In December 1990, 

Pastore was informed that a security system had been installed by 

an entity entitled Integrated Access Systems in the Monroeville 

Revenue Accounting Center, although the site was within the 

network of facilities to be installed and serviced exclusively by 

NASSCO. Other already-approved projects which were part of the 

first planned phase involving installation of the CDACCSN 

statewide were not carried forward, while none of the work 

planned for the second or third phase was initiated. 

 Plaintiffs filed this action in the District Court for 

the Western District of Pennsylvania alleging that defendants 

attempted to monopolize the relevant market in violation of 

section 2 of the Sherman Act1, as well as under a variety of 

 

1Section 2 provides: 

Every person who shall monopolize, or attempt to 

monopolize, or combine or conspire with any other 
4 

pendent state law tort and contract theories.2 Defendants moved 

to dismiss for failure to state a claim under the Sherman Act. 

The district court issued an order converting the motion to 

dismiss into a motion for summary judgment as to the Sherman Act 

claim only. After granting plaintiffs two extensions for further 

discovery, the court granted the summary judgment motion, holding 

that the plaintiffs had produced no evidence of a dangerous 

probability of the defendants monopolizing the relevant market, 

and dismissed the pendent state law claims without prejudice. 

Plaintiffs filed this timely appeal. 

II. 

DISCUSSION

A. 

Additional Discovery

 Throughout their brief, plaintiffs argue that summary 

judgment was inappropriate because they did not have adequate 

time for discovery. As this court has previously noted, we 

review a claim that the district court has prematurely granted 

summary judgment for abuse of discretion. See Radich v. Goode, 

886 F.2d 1391, 1393 (3d Cir. 1989). If a party believes that 

 

person or persons, to monopolize any part of the trade 

or commerce among the several States, or with foreign 

nations, shall be deemed guilty of a felony . . . . 

15 U.S.C. § 2. 

2The twelve count complaint included claims for defamation, 

promissory estoppel, anticipatory breach of contract, breach of 

contract, breach of duty of good faith, common law fraud and 

deceit, tortious interference with contractual and business 

relations, tortious bad faith and unfair dealing, interference 

with prospective economic advantage, and intentional infliction 

of emotional distress. 
5 

s/he needs additional time for discovery, Fed. R. Civ. P. 56(f) 

specifies the procedure to be followed,3 and explicitly provides 

that the party must file an affidavit setting forth why the time 

is needed. Plaintiffs concede, however, that they did not submit 

an affidavit. This concession is usually fatal, because by not 

filing "a Rule 56(f) affidavit, [they have] not preserved [their] 

objection to [their] alleged inability to obtain necessary 

discovery." Falcone v. Columbia Pictures Indus., Inc., 805 F.2d 

115, 117 n.2 (3d Cir. 1986). 

 Plaintiffs contend that their brief opposing the 

defendants' motion for summary judgment constructively meets Rule 

56(f)'s affidavit requirement. In the past we have rejected such 

arguments because "Rule 56(f) clearly requires that an affidavit 

be filed. 'The purpose of the affidavit is to ensure that the 

nonmoving party is invoking the protection of Rule 56(f) in good 

faith and to afford the trial court the showing necessary to 

assess the merit of a party's opposition.' An unsworn memorandum 

 

3Federal Rule of Civil Procedure 56(f) provides: 

Should it appear from the affidavits of a party 

opposing the motion [for summary judgment] that the 

party cannot for reasons stated present by affidavit 

facts essential to justify the party's opposition, the 

court may refuse the application for judgment or may 

order a continuance to permit affidavits to be obtained 

or depositions to be taken or discovery to be had or 

may make such other order as is just. 

(emphasis added). 
6 

opposing a party's motion for summary judgment is not an 

affidavit." Radich, 886 F.2d at 1394 (citations omitted).4

 Even if we were to regard the request in plaintiffs' 

brief opposing the defendants' motion for summary judgment that 

the court "belay [summary judgment] until a more complete factual 

record is developed," Plaintiff's Supplemental Memorandum of Law 

in Opposition to Motion for Summary Judgment, Docket No. 33 at 

13, as the functional equivalent of a Rule 56(f) affidavit, see

St. Surin v. Virgin Island Daily News, Inc., No. 93-7553, 1994 WL 

131201 at *3 (3d Cir. Apr. 15, 1994), the district court did not 

err in considering defendants' motion for summary judgment 

because plaintiffs did not specify "what particular information 

is sought; how, if uncovered, it would preclude summary judgment; 

and why it has not previously been obtained." Dowling v. City of 

Philadelphia, 855 F.2d 136, 140 (3d Cir. 1988). 

 Plaintiffs stated in their brief in the district court 

that a deposition of defendant Fadzen would demonstrate specific 

intent to monopolize. They claimed that Fadzen "may be a source 

of information not only as to specific intent but as to the 

product and the market as well, given his involvement with 

vendors and knowledge of software." Docket No. 33 at 12 n.11. 

Even assuming that plaintiffs were referring to the defendants' 

 

4Plaintiffs claim that the circumstances in this case are 

"somewhat similar" to Miller v. Beneficial Management Corp., 977 

F.2d 834, 846 (3d Cir. 1992), where we held that the plaintiff's 

reliance on a Magistrate Judge's order waiving the Rule 56(f) 

affidavit requirement permitted this court to review the district 

court's termination of discovery, but we see no similarity (and 

plaintiffs have not articulated any) other than the fact that in 

neither case was an affidavit properly filed. 
7 

market power, the issue relevant here, it would be insufficient 

under Rule 56(f). Such an amorphous allegation fails to explain 

what plaintiffs expected to discover, how it applied to their 

case and why they could not obtain that information elsewhere. 

 The district court granted summary judgment in this 

case because the defendants had not entered the relevant market 

and thus had no market power. Plaintiffs have not explained on 

appeal why information as to any entry by Bell of Pennsylvania 

was available only through Fadzen nor what other attempts 

plaintiffs made to discover this information. It is not readily 

apparent, for example, why Pastore himself was unable to submit 

an affidavit with such information. We therefore decline to 

reverse the district court's decision to consider the summary 

judgment motion, when plaintiffs failed to move beyond mere 

generalities in their attempt to delay that consideration. 

B. 

Standards for Summary Judgment

 We review the districts court's decision to enter 

summary judgment de novo, applying the same standard as the 

district court. Once the moving party has carried the initial 

burden of showing that no genuine issue of material fact exists, 

see Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986), the 

nonmoving party cannot rely upon conclusory allegations in its 

pleadings or in memoranda and briefs to establish a genuine issue 

of material fact. Instead, it "must make a showing sufficient to 

establish the existence of every element essential to his case, 

based on the affidavits or by the depositions and admissions on 
8 

file." Harter v. GAF Corp., 967 F.2d 846, 852 (3d Cir. 1992). It 

is true, however, that "[i]nferences should be drawn in the light 

most favorable to the non-moving party, and where the non-moving 

party's evidence contradicts the movant's, then the non-movant's 

must be taken as true." Big Apple BMW, Inc. v. BMW of North 

America, Inc., 974 F.2d 1358, 1363 (3d Cir. 1992), cert. denied, 

113 S. Ct. 1262 (1993). 

 Although we have stated in the past that summary 

judgment should be used sparingly in antitrust litigation because 

of the fact-intensive nature of such claims, see Harold Friedman, 

Inc. v. Kroger Co., 581 F.2d 1068, 1080 (3d Cir. 1978), more 

recently we have taken note that "many courts, including the 

Supreme Court, have . . . held defendants entitled to summary 

judgment in antitrust cases," and that despite the "factually 

intensive" nature of antitrust cases "the standard of Fed. R. 

Civ. P. 56 remains the same." Town Sound & Custom Tops, Inc. v. 

Chrysler Motors Corp., 959 F.2d 468, 481 (3d Cir.) (in banc) 

(citations omitted), cert. denied, 113 S. Ct. 196 (1992). In 

fact, the Supreme Court has recently affirmed that there is no 

"special burden . . . [for] summary judgment in antitrust cases." 

Eastman Kodak Co. v. Image Technical Servs., Inc., 112 S. Ct. 

2072, 2083 (1992). 

C. 

Dangerous Probability of Achieving Monopoly Power

 The Supreme Court has recently restated the necessary 

elements to state a claim under section 2 of the Sherman Act. 

"[T]o demonstrate attempted monopolization a plaintiff must prove 
9 

(1) that the defendant has engaged in predatory or 

anticompetitive conduct with (2) a specific intent to monopolize 

and (3) a dangerous probability of achieving monopoly power." 

Spectrum Sports, Inc. v. McQuillan, 113 S. Ct. 884, 890-91 (1993) 

(citing 3 Phillip Areeda & Donald F. Turner, Antitrust Law ¶ 820 

at 312 (1978)). 

 The district court granted summary judgment based on 

the failure of the plaintiffs to meet the "dangerous probability" 

requirement, and this is the only issue before us on appeal. 

Determining whether a "dangerous probability" exists requires 

"inquiry into the relevant product and geographic market and the 

defendant's economic power in that market." Spectrum Sports, 113 

S. Ct. at 892. 

 The plaintiffs have the burden of defining the market. 

See Tunis Bros. Co., Inc. v. Ford Motor Co., 952 F.2d 715, 726 

(3d Cir. 1991), cert. denied, 112 S. Ct. 3034 (1992). Plaintiffs 

claim that the relevant market is the very narrow one of the 

CDACCSN itself, see Appellants' Brief at 15 ("the NASSCO product 

. . . constitute[s] the relevant market"),5 and that they 

themselves hold a monopoly over the CDACCSN. Id. at 14-15 

("NASSCO possessed monopoly power as to this product market"). 

Indeed, plaintiffs vigorously assert that the CDACCSN was a 

unique system that was incomparable to all others then or since 

 

5At other times plaintiffs have argued the market should be "dial 

up, computer driven remotely-monitored card-access security 

systems in the geographic region served by Bell Atlantic." 

Memorandum of Law in Response to Defendants' Motion to Dismiss, 

Docket No. 11 at 6-7 n.2; see also App. at 24 (Complaint) 

("remotely monitored security devices"). 
10 

on the market. App. at 110 (Pastore Affidavit) ("As late as 

1990, it was believed that the system was unprecedented and 

unique . . . . Since 1990 other suppliers have advertised 

similar features . . . . However, NASSCO is not aware of any 

installation which duplicates all of the unique features of the 

NASSCO system installed at Bell of PA.").6

 For purposes of the matter before us, we hold 

plaintiffs to their own contention, see Edward J. Sweeney & Sons, 

Inc. v. Texaco, Inc., 637 F.2d 105, 117 (3d Cir. 1980) (plaintiff 

bound by relevant market analysis proposed to district court), 

cert. denied, 451 U.S. 911 (1981), and we assume arguendo that 

the plaintiffs have demonstrated this to be the appropriate 

market definition. 

 Plaintiffs must thus show that the defendants possessed 

"sufficient market power" to come dangerously close to success 

within that market. Fineman v. Armstrong World Indus., Inc., 980 

F.2d 171, 197 (3d Cir. 1992), cert. denied, 113 S. Ct. 1285 

(1993); Barr Labs., Inc. v. Abbot Labs., 978 F.2d 98, 112 (3d 

Cir. 1992). There is no simple formula: factors to be reviewed 

"include the strength of the competition, probable development of 

the industry, the barriers to entry, the nature of the anti-

 

6See also Pastore Affidavit, Docket No. 21 at 6 ("At the time of 

the misconduct by Bell, to the best of my knowledge, NASSCO was 

the only supplier of such an integrated access control 

product."); Plaintiffs' Br. in Opposition to Motion for Summary 

Judgment, Docket No. 22 at 5 n.3 ("This is not an instance of a 

superior product among inferior competing products. It is an 

instance of a product without competitors."); Plaintiffs' 

Supplemental Memorandum of Law in Opposition to Motion for 

Summary Judgment, Docket No. 33 at 3 ("the NASSCO product 

constituted a unique product without parallel or substitute"). 
11 

competitive conduct, and the elasticity of consumer demand." Id.

at 112. Most significant, however, is the defendants' share of 

the relevant market. See id. (collecting cases). Indeed, a pair 

of the leading antitrust commentators state that "it is clear 

that the basic thrust of the classic rule is the presumption that 

attempt does not occur in the absence of a rather significant 

market share." Areeda & Turner, supra, ¶ 831 at 336. 

 The defendants have submitted an affidavit which states 

they are not "engaged in the businesses of (i) remotely 

monitoring security alarms or (ii) the manufacture, sale or 

provision of equipment used to remotely monitor alarms or card 

access security systems." App. at 70. The plaintiffs offer no 

evidence that the defendants have entered the CDACCSN market. 

Indeed, they have confined their discussion to defendants' future

entry into the market. See, e.g., App. at 24 (Complaint) 

(defendants are "intent upon entering); App. at 119 (Pastore 

Affidavit) ("in the event that Bell Atlantic is determined to 

enter into the alarm monitoring market"); Memorandum of Law in 

Response to Defendants' Motion to Dismiss, Docket No. 11 at 2 

(defendants are "poised to enter"). Thus, it is clear that the 

defendants presently have no share of the CDACCSN market.7

 

7Plaintiffs' position as to the only specific facility that they 

did not install, the one at the Monroeville Revenue Accounting 

Center, is unclear. Even if this system was "pirated" from 

NASSCO, see Pastore Affidavit, Docket No. 21 at 9-10 (defendants 

"were simultaneously meeting with another contractor, using 

NASSCO's engineering design for the MRAC"); Plaintiffs' Br. in 

Opposition to Motion for Summary Judgment, Docket No. 22 at 12 

("an unsuccessful effort by defendants' to mimic the NASSCO 

product and install and implement that pirated technology at 

[MRAC]"), there is no evidence that the defendants attempted to 
12 

Without any share in the relevant market as described by 

plaintiffs, there can be no inference that defendants hold 

sufficient economic power in that market to create a dangerous 

probability of monopoly. See Nuemann v. Reinforced Earth Co., 

786 F.2d 424, 428 (D.C. Cir.), cert. denied, 479 U.S. 851 (1986); 

see also Fineman, 980 F.2d at 201. 

 Plaintiffs argue that where there is high degree of 

predatory conduct coupled with a transparent intent to 

monopolize, the courts have required a less rigorous showing of 

market power. They cite Otto Milk Co. v. United Dairy Farmers 

Coop. Ass'n, 388 F.2d 789 (3d Cir. 1967), for this proposition, 

but nothing in that case supports this view. In Otto Milk the 

defendants argued that they were not liable because they did not 

in fact have a monopoly and we simply held that an attempt claim 

under Section 2 "does not require an actual monopoly of the 

territory sought." Id. at 798. 

 Three sources relied upon by the plaintiffs do support 

their position. A well-known 1956 law review article by 

Professor Turner argued that if "defendants are attempting to 

drive someone out of the market by foul means rather than fair, 

there is ample warrant for not resorting to any refined analysis 

as to whether . . . having taken over all the production of a 

particular commodity, the defendants would still face effective 

competition from substitutes." Donald F. Turner, Antitrust 

 

market this system to others. The internal use at one site of 

the NASSCO product is insufficient to indicate a dangerous 

probability of achieving monopoly power. 
13 

Policy and the Cellophane Case, 70 Harv. L. Rev. 281, 305 (1956); 

see also Edwin S. Rockefeller, Antitrust Questions and Answers 27 

(1974) ("If a sufficiently evil intent can be shown--to destroy 

or exclude a competitor, control prices, or coerce customers or 

suppliers--the Court might not look for any relevant market 

beyond the product immediately involved."). And the district 

court in Rea v. Ford Motor Co., 355 F. Supp. 842, 876-77 (W.D. 

Pa. 1973), rev'd, 497 F.2d 577 (3d Cir.), cert. denied, 419 U.S. 

868 (1974), held that a finding of dangerous probability of 

monopoly was unnecessary when overwhelming evidence of specific 

intent to monopolize existed. 

 However, we reversed the district court in Rea and 

noted that a showing of "a dangerous probability of achieving 

monopolization in a relevant market" was necessary to prevail on 

a section 2 claim. 497 F.2d at 590 n.28. More generally, the 

principle proposed by the sources on which plaintiffs rely was 

that adopted by the Ninth Circuit in Lessig v. Tidewater Oil Co., 

327 F.2d 459, 474-75 (9th Cir.), cert. denied, 377 U.S. 993 

(1964), a decision this court rejected in Coleman Motor Co. v. 

Chrysler Corp., 525 F.2d 1338, 1348 n.17 (3d Cir. 1975), and 

again in Edward J. Sweeney & Sons, Inc. v. Texaco, Inc., 637 F.2d 

105, 117 (3d Cir. 1980), cert. denied, 451 U.S. 911 (1981). 

 Further, the Supreme Court unanimously interred Lessig

in Spectrum Sports. In reversing a Ninth Circuit opinion which 

relied on Lessig, it held that intent to monopolize alone "is not 

sufficient[] to establish the dangerous probability of success 

that is the object of § 2's prohibition of attempts." Id. at 
14 

890. It explained that the "law directs itself not against 

conduct which is competitive, even severely so, but against 

conduct which unfairly tends to destroy competition itself. . . . 

Thus, this Court and other courts have been careful to avoid 

constructions of § 2 which might chill competition, rather than 

foster it. . . . For these reasons, § 2 makes the conduct of a 

single firm unlawful only when it actually monopolizes or 

dangerously threatens to do so. The concern that § 2 might be 

applied so as to further anticompetitive ends is plainly not met 

by inquiring only whether the defendant has engaged in 'unfair' 

or 'predatory' tactics." Id. at 892 (citations omitted). 

 In any event, this is not the case in which we must 

consider whether predatory actions by defendants may reduce the 

amount of market share that is needed to show a dangerous 

probability of success. Having shown no market share by 

defendants, plaintiffs have nothing to couple with their alleged 

predatory behavior. 

 Accepting everything the plaintiffs say as true, it is 

ironic that they basically seek to protect their own monopoly 

power in the field of dial-up, computer-driven remotely-monitored 

card-access security systems by use of an antitrust suit. To the 

extent that plaintiffs may have rights to the product of their 

creativity and initiative, there are other legal doctrines to 

protect them. On this record, the district court did not err in 

holding that they have not shown enough to proceed further under 

the Sherman Act. 

III. 
15 

 For the foregoing reasons we will affirm the judgment 

and order of the district court.