Opinion ID: 6983255
Heading Depth: 3
Heading Rank: 3

Heading: The grant of summary judgment in favor of defendants.

Text: Plaintiff brought four antitrust claims, alleging violations of §§ 1 and 2 of the Sherman Act and their respective Michigan counterparts. 4 The district court dismissed these claims on defendants’ motion for. summary judgment, and plaintiff appeals. This court reviews de novo the district court’s grant of a motion for summary judgment. Employers Ins. of Wausau v. Petroleum Specialties, Inc., 69 F.3d 98, 101 (6th Cir.1995). A court ruling on a motion for summary judgment must consider all the facts in the light most favorable to the nonmovant and must give the nonmovant the benefit of every reasonable inference. Allen v. Michigan Dept. of Corrections, 165 F.3d 405, 409 (6th Cir.1999). A grant of a motion for summary judgment is appropriate only if this court determines that “there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c). Section 1 of the Sherman Act prohibits agreements that result in an unreasonable restraint of trade, while § 2 of the Sherman Act prohibits the willful acquisition of monopoly power. We review the district court’s ruling regarding each of these causes of action in turn.
Section 1 of the Sherman Act states: “Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is thereby declared to be illegal.” 15 U.S.C. § 1 (1994). In order to have a § 1 violation, there must be an agreement, as § 1 does not encompass unilateral conduct, no matter how anticompetitive. See Nurse Midwifery Assocs. v. Hibbett, 918 F.2d 605, 611 (6th Cir.1990). Section 1 does not prohibit every restraint on trade, but only those agreements which unreasonably restrain trade. See, e.g., Northwest Wholesale Stationers, Inc., v. Pacific Stationery and Printing Co., 472 U.S. 284, 289, 105 S.Ct. 2613, 86 L.Ed.2d 202 (1985). Plaintiff urges two violations of § 1. First, it argues that the ABPS and the APMA engaged in anticompetitive behavior in the form of a group boycott and conspiracy to exclude plaintiff from the health care market. Second, plaintiff argues that the ABPS conspired with its member diplomates to get hospitals and insurance companies to require or prefer ABPS certification over the certification of other boards such as plaintiff. The district court ruled that there was no triable issue of material fact concerning the existence of an agreement between either the ABPS and the APMA or the ABPS and its member diplomates. 5
Despite the over-4,000 pages in the parties’ Joint Appendix, plaintiff points to virtually no evidence of collusion between the APMA and the ABPS. The plaintiff in a § 1 case must present evidence excluding the possibility that the defendants acted independently of one another; it is not enough to show actions consistent with either independent or conspiratorial action. Riverview Invs., Inc. v. Ottawa Community Improvement Corp., 899 F.2d 474, 484-85 (6th Cir.1990). Here, both the APMA and the ABPS benefit when the ABPS’s credibility within the medical community is strengthened. Thus, it is natural that each organization independently would take steps to promote the ABPS. Plaintiff has failed to carry its burden of presenting evidence that tends to exclude the possibility of independent action. Plaintiff points to evidence in the record tending to establish the following: (1) the APMA. determined that it should issue statements warning the public about unrecognized certifying boards; (2) the CPME and the ABPS were on friendly terms; (3) the APMA reviewed some of the ABPS’s literature before it was sent out and did not criticize the literature; (4) in a June, 1993, meeting, the APMA agreed to coordinate the text of one of its mass mailings with the ABPS; and (5) in an October, 1993, mailing, the APMA referred negatively to boards not recognized by the APMA. None of this evidence is sufficient to raise a genuine issue of whether the ABPS and the APMA colluded. These facts indicate that the ABPS and APMA had similar goals concerning non-ABPS boards, but the actions of both entities are as consistent with independent action as with collusive action. Even if it is assumed that the October mailing is the result of the June agreement, plaintiff does not indicate in what way the mailing was anticompetitive. 6 We affirm the district court’s ruling that plaintiff presented no triable issue of fact concerning an agreement between the ABPS and the APMA.
Plaintiff also alleges that the ABPS conspired with its member diplomates to suppress competition. However, the intracorporate conspiracy doctrine prevents the ABPS from conspiring with its members as a matter of law, because the diplomates and the ABPS are not independent legal entities for purposes of this antitrust claim. In Nurse Midwifery Assocs. v. Hibbett, 918 F.2d 605, 614 (6th Cir.1990), this court wrote, “Section 1 of the Sherman Act is concerned only with concerted action among competitors and not the coordinated activities that occur within a single firm.” Nurse Midwifery dealt with whether members of a hospital’s medical staff could conspire with the hospital itself when making employment decisions regarding persons in competition with members of the medical staff. We held that because the staff members were not competitors of the hospital, they could not conspire with the hospital for antitrust purposes. Id. Here, the ABPS does not compete with its member diplomates, therefore antitrust concerns are not raised. 7 While the ABPS members may conspire amongst themselves a possibility not alleged by plaintiff — the diplomates cannot conspire with the ABPS. 8 The district court ruled that there was no genuine issue of material fact with regard to a conspiracy between the ABPS and its members. Plaintiff claims that many ABPS diplomates saw plaintiffs mailings and complained about them to John Bennett. In 1992, the ABPS distributed information packets which urged its members to inform the appropriate persons about various aspects of the ABPS. Evidence suggested that the ABPS’s goal in distributing these materials was to encourage hospitals to require ABPS certification in their by-laws. All this may be true, but it presents insufficient evidence of conspiracy between the ABPS and any of its members. In Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 764, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984), the Supreme Court considered a resale price maintenance case. In resale price maintenance, a distributor and merchants selling the distributor’s product agree that the merchants will not sell the product below a certain price. At issue in Monsanto was whether the plaintiff had presented sufficient evidence of conspiracy between the distributor and the merchants. The Court wrote that where there was only evidence of complaints by merchants to a distributor concerning low-pricing by a maverick merchant, and then a subsequent refusal by the distributor to do business with the maverick, the evidence was insufficient to sustain a finding of agreement between the distributor and the complaining merchants. 465 U.S. at 764, 104 S.Ct. 1464. If the rule were otherwise, distributors would be prevented from legally refusing to do business with a particular merchant whenever other merchants had complained about the low-pricing practices of that merchant. Id. Here, plaintiff can demonstrate only complaints by ABPS members and action arguably in conformity with those complaints. As in Monsanto, the action taken by the ABPS is as much in its interest as it is in the interest of its members individually, and plaintiff has not introduced evidence tending to exclude the possibility that the ABPS acted independently and not in concert with its members. See id. at 764, 104 S.Ct. 1464 (requiring proof tending to exclude the possibility of independent action). Thus, even if the ABPS could conspire with its members, the district court’s grant of summary judgment on the section 1 claims must be affirmed because plaintiff has not generated a genuine issue of material fact regarding conspiracy between the ABPS and its member diplomates. In sum, we hold that plaintiff has failed to create a genuine issue of material fact as to whether the ABPS conspired with either the APMA or its member diplo-mates. Also, we hold that the ABPS cannot, as a matter of law, conspire with its member diplomates.
Section 2 of the Sherman Act makes it unlawful to “monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States.... ” 15 U.S.C. § 2. To establish a § 2 violation, a plaintiff must demonstrate “(1) the possession of monopoly power in the relevant market and (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.” Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451, 481, 112 S.Ct. 2072, 119 L.Ed.2d 265 (1992) (internal quotation marks omitted) (quoting United States v. Grinnell Corp., 384 U.S. 563, 570-71, 86 S.Ct. 1698, 16 L.Ed.2d 778 (1966)). The district court ruled that there was no triable issue of fact as to whether defendant had monopoly power and therefore granted defendant’s summary judgment motion, without reaching the question of whether the alleged misstatements violated section 2, if defendant did have monopoly power. The relevant market includes those products or services that are reasonably interchangeable with, as well as identical to, defendant’s product. White & White, Inc. v. American Hosp. Supply Corp., 723 F.2d 495, 500 (6th Cir.1983). The ABPS produces podiatrist certifications, and plaintiff directly competes with the ABPS in this market, as does a third certification 'board. Thus, the relevant market is that for the sale of podiatrist certification services. The district court, relying upon a report prepared by the ABPS’s expert, ruled that the relevant market must take into consideration the ABPS’s influence over the health care market as well as the percentage of podiatrists who are certified by the ABPS every year. This is because plaintiff and the ABPS not only compete for exam takers, according to the court, but also for recognition within the health care community. Plaintiff introduced evidence demonstrating that the ABPS may have a monopoly with regard to the number of exam takers (an average of 69% of all candidates taking an exam for certification in podiatric surgery took the ABPS exam from 1987-1995), but according to the district court, plaintiff would have to produce evidence of the ABPS’s monopolization of recognition within the health care community as well. Plaintiff introduced no such evidence, and so the district court granted defendant’s summary judgment motion. The district court’s reasoning is not persuasive. According to it reasoning, if the ABPS certified 100% of all podiatrists, yet the health care community did not require ABPS certification, the ABPS would not have a sufficient market share to justify a finding of monopoly power. Recognition by the health care community will affect the ABPS’s ability to gain monopoly power, as the greater its reputation in that community, the more podiatrists will seek certification by the ABPS. However, recognition within the health care community is not the market within which podiatrist certification boards compete; rather, it is an indicator by which the existing market steers its demand. Monopoly power is the power to control prices and exclude competition. United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 393, 76 S.Ct. 994, 100 L.Ed. 1264 (1956). Because a true determination of whether a firm possesses monopoly power hinges upon an analysis of complicated economic factors, courts often look to market share as a proxy for monopoly power. Tarrant Serv. Agency, Inc. v. American Standard, Inc. 12 F.3d 609, 615 (6th Cir.1993). Plaintiff produced evidence demonstrating that the ABPS’s share of the number of persons taking podiatrist certification exams ranged from 55.1% in 1987, to a high of 76.7% in 1992, with only a slight decrease to 75.9% in 1994. Monopoly power has been found in cases where defendant firm controlled similar portions of the market. See Arthur S. Langenderfer, Inc. v. S.E. Johnson Co., 917 F.2d 1413, 1443 (6th Cir.1990) (when coupled with other evidence of monopoly power, firm with around 60% of the market share can have monopoly power); Broadway Delivery Corp. v. United Parcel Serv. of Am., Inc., 651 F.2d 122, 129 (2d Cir.1981) (firm with market share between 50% and 70% can sometimes have monopoly power, while a share above 70% is strong evidence of monopoly power). Although the ABPS has a sufficient market share to support a finding of monopoly power, market share is only a starting point for determining whether monopoly power exists, and the inference of monopoly power does not automatically follow from the possession of a commanding market share. Byars v. Bluff City News Co., 609 F.2d 843, 850-51 (6th Cir.1979). Plaintiff also claims that the ABPS charges substantially more for its exam than does plaintiff. Although the ABPS may provide more services with its exam (for example, the cost of sending notice of certification to hospitals and insurance carriers) than plaintiff, thereby justifying the higher price, the ABPS does not make this argument. The price difference, coupled with the larger market share, supports plaintiffs claim of monopoly power by ABPS. The APMA argues that because the barriers to entry into the market for certification are low, the ABPS does not have monopoly power. The difficulty of entry into the market is relevant because if entry is easy, even a firm holding a commanding percentage of the market cannot charge a price above the competitive price, for once it does, competitors will enter the market and undercut the firm’s price. See United States v. Syufy Enters., 903 F.2d 659, 667 (9th Cir.1990) (where barriers to entry into the market are low, it is unlikely that a firm may attain monopoly power). The APMA points to the report of Dr. McCarthy, an economist hired by defendants, for the proposition that entry into the podiatrist-certification market is fluid. Dr. McCarthy wrote in his report that “entry and success are both possible, if credibility can be established.” However, establishing credibility naturally seems to be a significant barrier to entry, particularly for an enterprise that depends heavily upon reputation, such as certification of medical specialists. Based upon these factors, we reverse the grant of summary judgment on the issue of monopoly power. Although the ABPS may ultimately establish that it does not have monopoly power, considering the evidence in the light most favorable to plaintiff and drawing all inferences in its favor, dismissal of plaintiffs section 2 claim at the summary judgment stage is inappropriate. The district court did not reach the issue of whether the alleged misstatements by the ABPS could serve as a basis for an illegal monopolization claim, and so we need not reach this question either. The district court also granted defendant’s summary judgment motion on plaintiffs claim of attempted monopolization. For the same reasons that the monopolization claim survives summary judgment with respect to the monopoly power element, the attempted monopolization claim should survive as well. In addition, plaintiff appeals the district court’s grant of summary judgment regarding its claim that the ABPS and APMA conspired to monopolize. Plaintiff points to no evidence to substantiate this claim. Assuming that plaintiff intends the previously discussed evidence of conspiracy to restrain trade to serve as evidence of a conspiracy to monopolize, for the reasons set forth in the section concerning the alleged conspiracy to restrain trade, plaintiffs evidence is insufficient. The district court’s grant of summary judgment regarding the conspiracy to monopolize claim is affirmed. 9
The district court granted defendants’ motion for summary judgment regarding plaintiffs claim of intentional interference with economic advantage. When considering claims based upon state law, a federal court must apply the law of that state. Monette v. AM-7-7 Baking Co., 929 F.2d 276, 280 (6th Cir.1991). To establish a claim of interference with prospective economic advantage in Michigan, a plaintiff must show: (1) the existence of a valid business relation (not necessarily evidenced by an enforceable contract) or expectancy; (2) that the defendant knew of the business relationship or expectancy; (3) that the defendant intentionally interfered by improperly inducing or causing a breach or termination of the relationship or expectancy; and (4) that the defendant’s improper or unjustified interference resulted in injury to the plaintiff. Id. at 281 (citation omitted). The third component of this tort requires the plaintiff to demonstrate illegal or unethical conduct on the part of the defendant. See, e.g., Hutton v. Roberts, 182 Mich.App. 153, 159, 451 N.W.2d 536, 539 (Mich.Ct.App.1989); Kerasotes Mich. Theatres, Inc. v. National Amusements, Inc., 658 F.Supp. 1514, 1522 (E.D.Mich.1987), rev’d on other grounds, 854 F.2d 135 (6th Cir.1988). An antitrust violation such as illegal monopolization would seem to satisfy this requirement. Kerasotes, 658 F.Supp. at 1522. Plaintiff claims that the ABPS interfered in its relationship with podiatrists interested in board certification. The district court ruled that summary judgment was appropriate because, although plaintiff presented evidence of damage to its reputation caused by the ABPS’s mailings, plaintiff presented no evidence of an interference with its relationship with podiatrists. However, the evidence discussed in the sections above concerning the Lanham Act claim is sufficient to create a genuine issue of material fact as to whether the ABPS induced hospital administrators and insurance companies not to recognize plaintiffs certification, which in turn decreased the number of podiatrists seeking plaintiffs certification. Although we held above that the district court did not err in granting the ABPS’s renewed motion for judgment as a matter of law on the Lanham Act claims, the tort of intentional interference with business relations does not require proof of actual deception. It is enough to show that “the [ABPS’s] conduct interfered with the plaintiffs business expectancy....” Monette, 929 F.2d at 282. Thus, we reverse the district court’s grant of summary judgment on this claim because plaintiff presented evidence sufficient to raise an issue of material fact as to whether the ABPS interfered with plaintiffs business relations with podiatrists seeking certification. We do not consider whether plaintiff presented sufficient evidence on the other elements of its claim of intentional interference with business relations.