Opinion ID: 773732
Heading Depth: 2
Heading Rank: 6

Heading: Watkins's Claim Under the Clayton Act

Text: 42 The district court granted summary judgment in favor of Iams on Watkins's claim that Iams violated § 3 of the Clayton Act, 15 U.S.C. § 14. We affirm. 43 Assuming arguendo that Iams violated the Clayton Act by offering Watkins a 2% price discount in return for Watkins's agreement to sell Iams products exclusively, Watkins's claim must fail. The Sixth Circuit, it is fair to say, has been reasonably aggressive in using the antitrust injury doctrine to bar recovery where the asserted injury, although linked to an alleged violation of the antitrust laws, flows directly from conduct that is not itself an antitrust violation. Valley Prods. Co. v. Landmark, 128 F.3d 398, 403 (6th Cir. 1997). 44 To the extent Watkins is claiming that it suffered an injury as a result of termination of its distributorship, we find, as did the district court, that while a contract or tort claim might lie, an antitrust claim does not, because the injury to Watkins flows from the termination; the antitrust violation was not a necessary predicate of the injury. See Valley Prods., supra at 404. To the extent Watkins is claiming that it is now suffering as a result of the arrangement whereby Iams grants Wolverton exclusive territories and a discount in return for an agreement to sell Iams products exclusively, we agree with Professor Areeda's observation: 45 A defendant manufacturer's distribution restraints do not generally injure rival manufacturers or their dealers, and the loss of business that might occur is not antitrust injury. 46 . . . [D]iminished competition for territories or customers among defendant's dealers benefits, rather than harms, sellers of rival brands. Reduced rivalry among dealers in the defendant's brand allows rival sellers to maintain volume and profit without lowering prices or to expand their sales by undercutting the defendant's fixed prices. 47 Such intrabrand restraints can enable the restrained dealers to promote the defendant's brand more aggressively and to provide services desired by consumers. Such marketing and services might expand sales of the defendant's brand at the expense of rival brands. The profit lost by sellers of rival brands as a result of enhanced interbrand competition is not antitrust injury, however, for it is inconsistent with the rationale for condemning a distribution restraint. Such restraints can violate the antitrust laws because they might injure purchasers of the defendant's brand, not becausethey might intensify interbrand competition. Enhanced interbrand competition is a virtue, not a vice, of an illegal distribution restraint. 48 Phillip E. Areeda et al., 2 Antitrust Law ¶382d. 3. Conclusion 49 For the foregoing reasons, we affirm the judgment of the district court in all respects.