Opinion ID: 798173
Heading Depth: 2
Heading Rank: 2

Heading: The Scope of Craftsmen I

Text: 26 In Craftsmen I, we held that the district court erred in applying a per se mode of analysis to the restraint at issue in this case. We noted that the restraint appeared to be an attempt to alter the competitive field in the limousine industry: [i]n essence, defendants' alleged restraint was an attempt to force Craftsmen to either comply with QVM guidelines or stop selling limousines. Craftsmen I, 363 F.3d at 774. We also found, however, that the defendants' plausible safety justifications for pursuing the restrictive advertising standards could have procompetitive effects and therefore an abbreviated analysis of its anticompetitive impact was inappropriate. Id. at 776. This decision followed a line of recent Supreme Court precedent holding either the per se or quick look modes of analysis improper when the alleged substance of the restraint and any purported justifications for it did not create the obvious impression that the restraint would be unreasonably anticompetitive. See, e.g., Calif. Dental Ass'n, 526 U.S. at 781, 119 S.Ct. 1604; State Oil Co., 522 U.S. at 19, 21-22, 118 S.Ct. 275. Under that reasoning, we held in Craftsmen I that the experience of the market and the type of restraint at issue in this case were not so clearly anticompetitive that the district court could properly substitute an abbreviated analysis in place of a more sedulous one. Calif. Dental Ass'n, 526 U.S. at 781, 119 S.Ct. 1604. 27 Therefore, on remand, Craftsmen had the burden of proving the unreasonableness of the restraint given a variety of factors under the rule of reason, State Oil Co., 522 U.S. at 10, 118 S.Ct. 275; it would not enjoy a presumption of unreasonableness based solely upon the existence of the restraint itself. This burden begins with the task of properly defining the relevant market. Double D Spotting Serv., Inc. v. Supervalu, Inc., 136 F.3d 554, 560 (8th Cir.1998). The plaintiff must define both the relevant product market, which includes all reasonably interchangeable products, and the relevant geographic market, which consists of the area in which consumers can practically seek alternative sources of the product. Id. After properly defining the market, the rule of reason also requires the plaintiff to show that the restraint has detrimental effects upon the competitiveness of the market. FTC v. Ind. Fed'n of Dentists, 476 U.S. 447, 460-61, 106 S.Ct. 2009, 90 L.Ed.2d 445 (1986) (quotation omitted). 28 A plaintiff may satisfy the detrimental effects element of its burden in one of two ways. First, a plaintiff may put forth evidence of actual, sustained adverse effects on competition in the relevant market. Id. at 461, 106 S.Ct. 2009. If the plaintiff cannot submit such evidence, it is relegated to the more challenging course of proving detrimental effects on competition by making an inquiry into market power and market structure designed to assess the [restraint]'s actual effect. Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 768, 104 S.Ct. 2731, 81 L.Ed.2d 628 (1984). A defendant or cartel of defendants has market power if it has the ability `to raise price above the competitive level without losing so many sales so rapidly that the price increase is unprofitable and must be rescinded.' Midwestern Mach. Co. v. N.W. Airlines, Inc., 392 F.3d 265, 274 (8th Cir. 2004) (quoting William A. Landes & Richard A. Posner, Market Power in Antitrust Cases, 94 Harv. L.Rev. 937, 937 (1981)). 29 Only after satisfying the above requirements does the burden shift to the defendant to justify its conduct by reference to rational, procompetitive economic principles. Flegel v. Christian Hosp., Ne.-Nw., 4 F.3d 682, 688 & n. 4 (8th Cir.1993) (quotation omitted). If the defendant can do so, the burden returns to the plaintiff to show that the defendant can achieve the same rational, procompetitive ends through means less likely to harm overall competition in the market. Id. at 688. If so, the court will ultimately balance `the harms and benefits to determine if the behavior is reasonable' on the whole. Id. (quoting Bhan v. NME Hosps., Inc., 929 F.2d 1404, 1413 (9th Cir.1991)). 30 Contrary to Craftsmen's assertions on the present appeal, none of the elements of this burden were addressed or decided in Craftsmen I. Indeed, we could not have decided them, because Craftsmen's case had never gone before a factfinder charged with deciding the dispute under the rule of reason approach. Craftsmen I did discuss the procompetitive justifications of Ford and American Coach, but only insofar as they related to the question of which analysis to apply to the case: per se, quick look, or rule of reason. We did not purport to actually apply the proper approach (the rule of reason), and we did not address the procompetitive justifications in that context. 31