Opinion ID: 550874
Heading Depth: 1
Heading Rank: 4

Heading: sader claim

Text: 51 The jury found in favor of Sader but answered specific interrogatories to the effect that there was no relevant market proved as to this plaintiff consisting of limestone, sand, or asphalt used in ODOT and OTC asphalt paving contracts as in the case of the other plaintiffs. The jury also answered interrogatories indicating that there was no relevant market proved as to Sader consisting of either ODOT or OTC asphalt paving contracts. The jury responded, however, that there was a relevant geographic market or submarket for Sader, and determined that market to be the thirteen counties located in northwest Ohio. The jury found that acquisitions made by defendants were all made to exclude & /or injure competition and increase Johnson's power, and that anticompetitive conduct caused injury to Sader in the amount of $250,000. In his final closing argument, Sader's attorney asked the jury for damages in the amount of $224,500. 52 Defendants argue on appeal that Sader is neither a consumer nor a competitor in the relevant markets alleged. Defendants' Brief at 45. Gregory M. Sader, principal owner and officer of Sader since 1962, testified that he operates a small paving and excavating business (9 employees) headquartered in Bowling Green, Wood County, Ohio, located in the north central part of the thirteen-county area in controversy. Sader is not ODOT qualified, and cannot bid on ODOT or OTC asphalt paving contracts, although Sader does subcontracting on ODOT work. Defendants further argue that Sader failed to prove monopoly or attempted monopoly in the markets in which Sader competes. 53 The brief filed on Sader's behalf responds that the issue in the case was whether defendants' refusal to deal with Sader was for 'valid business reasons' or whether it was unreasonable anticompetitive conduct as Sader contended. Sader argues that this was properly a jury issue. Sader concedes it owned no quarry nor any asphalt plant, but asserts it depended on defendants for stone, sand and asphalt at Bowling Green. Contending that it is irrelevant that it did not compete in the ODOT/OTC markets against defendants, Sader suggests that it was a potential ODOT, OTC competitor that was foreclosed. 54 A number of factors with respect to Sader, as in the case of plaintiff M & B, would weigh strongly against any suggestion that Sader was, in reality, a potential competitor in the ODOT/OTC market. At the time Sader filed the complaint against defendants, it had been in business in the Bowling Green area for more than twenty years; by the time of trial, more than twenty-five years. It had never seriously sought to compete in the ODOT/OTC market which was the basis of the original monopolization complaint in this case. Sader, moreover, never indicated that it intended to compete with defendants beyond nearby Wood County, and the district court instructed the jury that Sader claimed a relevant submarket of Bowling Green, Wood County, and southern Lucas County. 8 Sader testified that his operation grew during the 1960s despite defendant Johnson's acquisition of Wood County Stone Company, his principal quarry source, in 1961. (An independent operation, Urbana, had maintained a hot mix plant at this site from which Sader acquired asphalt product at the time.) 9 Stone was still made available to Sader at this nearby Portage quarry by defendants, but without the volume discount previously granted by Wood from and before 1960. (For a further discussion of Portage quarry costs and prices, see Part V, infra.) Sader testified that the biggest majority of his work was always in Wood and adjacent Lucas County (Toledo) with emphasis in Bowling Green. In the 1960s, defendants' OAMCO facility at Portage and their Maumee Stone site became Sader's chief suppliers, but not of sand. Like many other asphalt pavers, Sader trucked sand in from outside the thirteen-county area. Plaintiff MacRitchie Materials had a quarry at West Millgrove some 15 to 20 miles away from construction sites in and around Bowling Green. (Plaintiff also had a batch plant 15 miles away from Bowling Green at Waterville, and France had a quarry there and another about the same distance at Custor, the latter variously estimated at 15 to 17 miles from Bowling Green.) 10 55 Sader testified that during the 1960s and 1970s, defendants began to exert pressures on him in bidding in his area. Sader also trucked sand for the Creager Company, which was in financial difficulty when acquired by defendants in 1971. We attribute little significance to the Creager acquisition 11 insofar as it relates to Sader, who summarized his complaint about defendants generally by observing, Johnson just blocked us basically from growing on a normal, healthy business way during the late sixties and seventies. He also testified, moreover, that the plaintiff experienced difficulty in scheduling delivery of materials from defendants. In 1977, Sader complained personally to Kirkby about scheduling problems: Ted said he would look into it, and see if he could not get it straightened out but the problem allegedly continued. 12 Sader also encountered difficulties in scheduling rental trucks at times. 56 Sader complained about defendants' hot asphalt prices and the fact that, as with stone, they would not give him discounts on this product. Sader also said that plans he had with others in his same situation to set up an asphalt plant were discouraged by a threat that defendants would not be able to supply our stone needs. Sader said he pursued the plan but never carried it out. (Each of the four or five quarries located in or very near the boundaries of Wood County had an asphalt plant operating at the quarry--this included the defendants' quarry at Portage.) Sader said that the planned source of stone was defendants' quarry at Maumee in Lucas County, more distant from Bowling Green than at least four other quarries which Sader characterized as not being economically located for his purposes. 13 He added that defendants' representatives in 1977 and 1978 were pressing for more asphalt business from him. He also claimed that defendants refused in 1977 or 1978 to allow him to set up [a pugmill for a Perrysburg job] on the Lime City quarry site. Instead, he set it up at a nearby France quarry and he bought 25,000 tons of stone from France instead of defendants. 57 There is no doubt, however, that Sader's primary complaint, and the only one which we are persuaded has arguable merit, is its claim that it was cut off from buying materials because of cooperation with plaintiffs in pursuit of their claims at the first trial, Sader avers that at or about the time he agreed to give a deposition in that proceeding in 1979, defendants' credit representative called on him and told him he expected a check on Sader's account, and Sader agreed to pay it within a month. Sader asserts that he paid the bill of about $13,000, which he conceded was three months overdue. 14 Sader attributes to his 1980 testimony for plaintiffs a much lower than expected Johnson bid on a Bowling Green job which he subsequently lost. (He also claims that Johnson improperly used information he gave to them on this job to underbid him, Sader understanding at the time that Johnson would not bid on this job.) 58 Later, in 1980, Johnson made special credit arrangements for Sader, limiting his credit to $10,000 because Sader was persistently slow pay. It was during this time that another dispute about credit arose between Sader and defendants. Sader also had been severely restricted in credit extended during 1982. Sader's version of a major dispute is that defendants furnished him defective asphalt for a large private driveway Sader installed and that the customer balked at paying him for the job. Defendants denied that the asphalt was defective and suggested testing the contested product. Sader held up any payment on his total account despite the fact that the driveway job in dispute involved only approximately $4,000. A lawsuit in an Ohio state court developed over this controversy, and Sader finally paid the $4,000 pursuant to a court order. Indeed, defendants employed lawyers in three different locations to handle commercial disputes and collections with Sader since 1980. 59 There is abundant, uncontroverted evidence in written communications from defendants to Sader that his accounts were consistently overdue in the 1979 to 1983 period, and that from time to time credit privileges during this period were withdrawn by defendants. During the same period, evidence reflects that France also suspended credit privileges for Sader in 1980 after numerous warnings; that American Asphalt products in Sylvania, Ohio, turned the Sader account over to attorneys for collection (again, after numerous warnings concerning an account of $2,200 in 1983); that an insurance agency was forced to threaten suit against Sader in early 1984 to collect an insurance account exceeding $15,000 more than 120 days delinquent. Many other witnesses testified that Sader was slow or delinquent in payment of its accounts during the period, although their companies did not cut him off. There is also clear evidence that defendants, during the relevant period, placed other of its customers, whose credit or financial condition was doubtful, on a cash basis for sale of its products. In short, the record establishes that a number of other persons with a contractual relationship with Sader had serious problems with Sader's failure to pay its accounts and either threatened or litigated with Sader concerning a past due balance, and that defendants cut off credit to others in similar slow pay circumstances. 60 It appears clear in this case that the problems between Sader and defendant in the relevant period arose out of commercial and credit controversies and did not arise in an antitrust context. That Sader may have been forced in some instances by credit restrictions to obtain asphalt materials from a source 15 to 17 miles further away than a defendant source is not a sufficient basis for this Sec. 2 Sherman Act claim. 61 In overruling defendants' motion j.n.o.v. following the verdict for Sader, the district court cited Byars v. Bluff City News Co., Inc., 609 F.2d 843 (6th Cir.1979), as authority. Byars is pertinent only with respect to its discussion of refusal to deal by a monopolist. Id. at 854. It was uncontroverted in that case that defendant Bluff City refused to deal on any basis with Byars, a competitor in the concededly relevant Memphis area market, in primary life magazines and periodicals. Byars recognized the general rule--there exists no duty to deal, so long as the determination is made unilaterally. Id. Furthermore, [e]ven the use of unfair business practices as part of the termination may not invoke sanction under the antitrust laws. Id. at 855. A monopolist, however, may be held to different standards, Id. at 855, citing Eastman Kodak Co. v. Southern Photo Materials Co., 273 U.S. 359, 47 S.Ct. 400, 71 L.Ed. 684 (1927), where Kodak provided no independent business reason for its refusal to deal and Kodak had monopoly power over the national wholesale market. In Byars, we concluded that a refusal to deal practice should be condemned only if it is unreasonably anticompetitive. 609 F.2d at 860. Even a refusal to deal designed to accomplish vertical integration, without more, should not be a basis for imposing liability upon a purported monopolist. Id. at 861. We observed further that courts should examine business reasons for a refusal to deal, and must give them some leeway in making business decisions. Id. at 862. 62 Sader's brief not only cites Eastman Kodak Co., supra, and Byars, but also Riverview Investments v. Ottawa Community Improvement Corp., 769 F.2d 324, 328 (6th Cir.) (what matters is that freedom to compete is restrained), revised, 774 F.2d 162 (6th Cir.1985). We do not construe Riverview Investments, a combination or security case, as pertinent to the refusal to deal aspect of this case. Kerasotes Michigan Theatres v. National Amusements, Inc., 854 F.2d 135 (6th Cir.1988), also cited by Sader, was principally concerned with leveraging or misuse of monopoly power in one market to exclude a competitor from another market. We deem Kerasotes to have minimal relevance to Sader's claims. United States v. Griffith, 334 U.S. 100, 68 S.Ct. 941, 92 L.Ed. 1236 (1948), mentioned by Sader in a footnote, is also, like Kerasotes, a theater and film case concerned with defendants who pooled their powers to exclude others from obtaining films for exhibition. None of these authorities is helpful to Sader here. 63 We conclude from a careful examination of the record in this case that there is insufficient evidence to sustain Sader's charge that defendants began to press him on payment of his past due account only when he agreed to give a deposition in this case in 1979 to Langenderfer. 15 We conclude also that there is insufficient evidence to support an antitrust claim of tying defendants' imposition of limits and restraints upon Sader's credit during 1980 through 1983 to his part in Langenderfer's suit. Essentially, it seems clear that defendants and Sader were engaged in a series of commercial disputes concerning his accounts, scheduling of pick-ups at defendants' facilities, and whether or not defendants were carrying out alleged credit understandings with Sader. The claim of refusal to deal is inextricably bound with the commercial and contract disputes between the parties, and was not proven to be a practice related to antitrust conduct. 64 There was, moreover, similar to the M & B situation already considered, a failure by Sader to prove a relevant market in which Sader established the necessary essentials, including causation, under a Sec. 2 Sherman Act claim. The physical location of alternative sources of stone and asphalt and other asphalt components to Sader's basic operations in Wood County and immediately adjacent areas might alone preclude any recovery of damages for antitrust injury in this case by Sader. There was also evidence of a number of competitors in the area. The Sec. 2 market definition looks to the existence of competitors as evidence of countervailing power which would preclude monopolization. Columbia Metal Culvert Co., Inc. v. Kaiser Aluminum, 579 F.2d 20, 27 n. 11 (3rd Cir.), cert. denied, 439 U.S. 876, 99 S.Ct. 214, 58 L.Ed.2d 190 (1978). This plaintiff has essentially relied upon contentions of predatory or unfair low bidding by defendants on jobs in which he was interested, a basis we determined in Langenderfer I to be insufficient to support a damages claim for antitrust injury absent a showing that defendants' bids were below their total average costs. 65 There is insufficient proof in this record to show that defendants had a monopoly position, attempted a monopoly and had a dangerous probability of success in this regard, in the limited non-OTC, non-ODOT market in which Sader was involved. The vast weight of proof submitted by plaintiffs, upon which their experts relied, bore upon defendants' OTC and ODOT market share in a thirteen-county area. Sader was not a party who realistically competed in that market. 66 We are not satisfied from the proof adduced, after careful examination of the record, even if we assume the jury found that defendants cut Sader off from supplies at Portage in 1983 when suit was filed, that Sader established that this action was effected by an actual monopolist or one that threatened a realistic danger in the area of Sader's business activity in a relevant market. 16 67 The ultimate inquiry in any attempted monopolization case remains whether the defendant has or reasonably might come close to having the ability to control total market output and prices. 68 Indiana Grocery, Inc. v. Super Valu Stores, Inc., 864 F.2d 1409, 1414 (7th Cir.1989). 69 Defendants may be held liable to Sader only if proven to have refused to deal with him for anticompetitive reasons as a monopolist or attempted monopolist in some established relevant market. Without objection by plaintiffs the district court instructed the jury that plaintiffs claimed the existence of three appropriate relevant product markets--stone, sand, and asphalt--used on ODOT and OTC paving contracts and bidding on a performance of paving contracts awarded to prime contractors by ODOT and OTC. None of these claimed relevant markets were proved with respect to the defendants as to the limited geographic area in which Sader was operating, and certainly not so with respect to monopolization as to sand and stone. No reasonable jury could find, on the evidence presented, that Sader was cut off at Portage or that defendants refused to sell stone to Sader based on an attempted monopoly. 70 We observe similarities between this case and Trace X Chemical v. Canadian Industries, 738 F.2d 261 (8th Cir.1984), cert. denied, 469 U.S. 1160, 105 S.Ct. 911, 83 L.Ed.2d 925 (1985). Plaintiff Trace X, like Sader, claimed that defendant had misused monopoly power to refuse to deal with it and had refused it credit. 71 On the basis of the evidence presented, CIL's refusal to extend credit did not amount to unreasonable anti-competitive conduct, but rather constituted a valid exercise of business judgment. It is certainly not conduct that is possible or effective only if taken by a firm that dominates its smaller rivals. Berkey Photo [Co., Inc. v. Eastman Kodak Co., 603 F.2d 263 (2d Cir.1979) ] at 275. 72 In support of its claim of anti-competitive conduct, Trace X argues that CIL threatened to discontinue supplying it with TNT unless Trace X paid for the $160,000 worth of TNT received but not paid for by Trace X. However, terminating or threatening to terminate deliveries to a purchaser who refuses to provide full payment is not predatory or unlawful anti-competitive conduct. Fairdale Farms, Inc. v. Yankee Milk, Inc., 715 F.2d 30, 34 (2d Cir.1983), cert. denied, 464 U.S. 1043, 104 S.Ct. 711, 79 L.Ed.2d 174 (1984). 73 This case does not involve a refusal to deal. CIL was willing to continue to supply Trace X with TNT; it merely refused to deal with Trace X on other than a cash basis. Section 2 of the Sherman Act does not give purchasers the exclusive right to dictate the terms on which they will deal, Fairdale Farms, 715 F.2d at 34, nor does it require a monopolist to accede to every demand of its competitors or customers. Glen Eden Hospital v. Blue Cross & Blue Shield, 555 F.Supp. 337, 345 (E.D.Mich.1983). 74 738 F.2d at 266-67 (footnote and citations omitted). 75 As did the defendant in Trace X, defendants here merely insisted on current payment and exercised business judgment and insisted on a cash basis method of doing business. As did the Eighth Circuit in Trace X, we likewise reverse the jury verdict rendered for Sader, and we note also that some evidence of anticompetitive conduct was present in Trace X. 76 For all these reasons then, (1) failure of proof concerning a relevant market and reasonably consequential damages; (2) failure to show defendants' monopoly position in asphalt, stone or sand in the principal area of Sader's operations during the period in question; (3) because the essential character of Sader's charges was related to ordinary commercial disputes rather than anticompetitive conduct; and (4) because a principal basis of Sader's proof of anticompetitive conduct was on predatory bid pricing, we must REVERSE and set aside the verdict for Sader. It again follows that the award of attorney fees and costs, based upon services rendered to Sader, must be reversed as well. Sader is entitled to no injunctive relief.