Opinion ID: 700613
Heading Depth: 3
Heading Rank: 2

Heading: KMB's Evidence of Adverse Effect

Text: 12 We agree with the district court that KMB has failed to satisfy the adverse-effect requirement. As Judge Sand noted, KMB cannot show that the impact on intrabrand competition was anything but de minimis. KMB's proof on this point consists almost entirely of affidavits from twelve of its current customers stating that they prefer both Walker products and KMB's superior service. Such isolated statements of preference are not a sufficient empirical demonstration concerning the [adverse] effect of the [defendants'] arrangement on price or quality, Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 30 n. 49, 104 S.Ct. 1551, 1567 n. 49, 80 L.Ed.2d 2 (1984), to state a Sec. 1 claim. See id. at 30, 104 S.Ct. at 1567 (finding inadequate evidence of an actual adverse effect on competition even though [t]he evidence indicates that some surgeons and patients preferred respondent's [anesthesiology] services). 13 In fact, an examination of the intrabrand market belies even KMB's assertion that intrabrand competition has been harmed. There are over twenty Walker distributors of various size in the Tri-state area. All the evidence suggests that there is a highly competitive intrabrand market in Walker products; in fact, during the pendency of this case, prices for Walker products have apparently fallen and distributors' discounts have increased. The fact that KMB was not permitted to compete in this market does not alone prove an adverse effect on intrabrand competition. See Capital Imaging, 996 F.2d at 546 (Sec. 1 claim fails where plaintiff conceded that price would stay the same were it allowed to enter the market); Balaklaw v. Lovell, 14 F.3d 793, 798-99 (2d Cir.1994) (finding plaintiff's claim insufficient because, [f]rom the consumers' point of view, nothing about the market ha[d] changed even though plaintiff was not permitted to compete). 14 Moreover, and critical to our decision, KMB has offered no evidence of an adverse effect on the whole Tri-state interbrand exhaust-product market. The only clear effect of defendants' alleged conspiracy was to prevent KMB from carrying Walker products. After it learned that it could not join the ranks of Walker distributors, KMB continued to compete with that group by offering AP exhaust products to jobbers. KMB was able to do so--rather successfully, in fact--by offering superior pricing and service to counteract what it considers the higher quality of Walker parts. In this very tangible sense, defendants' refusal to allow KMB to change over to Walker products tended to promote rather than curtail interbrand competition. KMB has thus failed to come forward with any evidence that defendants' actions adversely affected service, quality, or price market-wide. 15