Opinion ID: 1190367
Heading Depth: 5
Heading Rank: 2

Heading: B & H's Exclusive-Dealing Claim Fails as a Matter of Law

Text: Under governing Supreme Court precedent, the legality of the SUPPORT network is not a close question. In Tampa Electric, the Supreme Court provided the standard for analyzing exclusive-dealing arrangements, stating that the competition foreclosed by the contract must be found to constitute a substantial share of the relevant market. 365 U.S. at 328 81 S.Ct. 623 (emphasis added). Courts routinely observe that foreclosure levels are unlikely to be of concern where they are less than 30 or 40 percent. See, e.g., Stop & Shop Supermarket Co. v. Blue Cross & Blue Shield of R.I., 373 F.3d 57, 68 (1st Cir.2004). B&H lacked any reasonable theory by which its evidence satisfied the basic substantial foreclosure threshold necessary to prevail on an exclusive-dealing claim. B & H asserted that the evidence in this case satisfied the substantial foreclosure threshold purely on the basis of observing that forty-six percent of DME/P & O retail outlets in Michigan were members of the SUPPORT network, without regard to any sales or revenue data. J.A. at 1616 (B & H's Supplemental Summ. J. Br. at 10) (stating expert's conclu[sion] that B&H and other DME competitors are being excluded from networks which account for 46 percent of the DME provider outlets across the state of Michigan for the large insurance provider networks). Revenue data for the SUPPORT network, as well as estimates for the total size of the market for DME/P & O in Michigan, did exist, and W & F's expert determined that the SUPPORT network accounted for only six and one-half percent of the DME/P & O sales revenue for the entire state of Michigan and just twelve and one-half percent of the DME/P & O sales revenue in the metropolitan Detroit area. On appeal, B & H essentially repeats its argument that a provider-based percentage of participating DME/P & O outlets is meaningful, without responding to the district court's criticism of that measure as pointless and perverse. J.A. at 99 (Op. & Order at 26); Appellant Br. at 17-20, 33. Further, B&H grossly distorts the district court's reasoning on this point. B & H claims that the district court incorrectly rejected the analysis of B & H's economic expert because the analysis was based on a pointless and perverse method of estimating market shares, and B&H then falsely claims that the Court cited approvingly the use by W & F's economic expert, Dr. Lynk, of the precise same numerical fraction except that Dr. Lynk excluded from his numerator any [SUPPORT] providers other than W & F['s outlets]. Appellant Br. at 18 (citing J.A. at 98). In fact, in the passage of the district court opinion that B&H quotes in its brief, the district court was clearly referring to the economic evidence regarding the sales revenue generated by outlets in the SUPPORT network, not simply a crude percentage of W & F outlets or SUPPORT outlets of the total in the state. J.A. at 98 (Opinion & Order at 25). We hold that the alleged exclusive-dealing arrangement in this case does not violate the antitrust laws because the evidence shows that the SUPPORT program foreclosed access to less than thirteen percent of the relevant market.