Court Opinion

ID: 8975487
Source: CourtListenerOpinion
Date Created: 2022-11-27 10:54:37.072378+00
Date Added: 2024-06-11T17:10:32.306505
License: Public Domain

WILLIAM A. NORRIS, Circuit Judge,
joined by Chief Judge GOODWIN, by Circuit Judges JAMES R. BROWNING and KOZINSKI, and by Circuit Judge DAVID R. THOMPSON as to Part V, dissenting:
Two pre-trial decisions shaped this decade-long litigation between R.C. Dick Geothermal (Dick) and the defendant developers and producers of geothermal steam (ap-pellees).1 First, the district court failed to rule on defendants’ motion to dismiss for lack of standing. Second, the court ruled as a matter of law that the alleged horizontal conspiracy by defendants to restrict the output of geothermal steam did not amount to a per se antitrust violation.2
As a consequence of its per se ruling, the district court imposed upon Dick the burden of proving at trial the anti-competitive impact on the geothermal steam market of defendants’ conspiracy. The court found the burden not met and granted judgment for defendants. Dick appealed solely to challenge the court’s adjudication of defendants’ conduct under the Rule of Reason, rather than per se analysis.
Instead of deciding the issue raised on appeal, the majority now reaches out to hold that Dick lacks standing. However, because the district court did not proceed with the motion to dismiss, there is no evidence in the record, findings of fact, or holdings on the specific issue of standing. Dick was never directly challenged to demonstrate that it suffered injury for standing purposes. Standing was not raised as an issue on appeal. The issue was raised sua sponte by members of the en banc panel during argument. After argument, the panel called for supplemental briefs limited to the standing issue. Now, without the benefits of an adequate record below or post-briefing argument on this is*154sue,3 the majority concludes that Dick lacks standing.
The court need not and should not address the standing issue because the defendants have waived antitrust standing as a defense. Antitrust standing is not a jurisdictional prerequisite, and thus is subject to waiver. See National Collegiate Athletic Ass’n (NCAA) v. Board of Regents, 468 U.S. 85, 97 n. 14, 104 S.Ct. 2948, 2958, 82 L.Ed.2d 70 (1984). The majority should, but does not, address this threshold issue. Having ignored it, the majority wrongly denies Dick standing through an excessively broad interpretation of Associated General Contractors, Inc. v. California State Council of Carpenters, 459 U.S. 519, 103 S.Ct. 897, 74 L.Ed.2d 223 (1983), an excessively narrow reading of Dick’s complaint, and the use of faulty and conclusory reasoning in applying the factors identified in Associated General Contractors.
I would reach the merits of Dick’s appeal. Whether or not defendants have waived the standing defense, Dick has standing according to the factors set out in Associated General Contractors and clear precedent in this circuit. We do a disservice to the parties and the court when we fail to reach the merits of this dispute after the parties have spent more than ten years litigating it. On the merits, I believe the district court erred in applying Rule of Reason analysis to the defendants’ alleged conspiracy. Horizontal output restrictions constitute per se violations of section 1 of the Sherman Act.4 NCAA, 468 U.S. at 100, 104 S.Ct. at 2959. For these reasons, I dissent.
I
Although appellees raised the standing issue below, the district court decided the case without addressing the contention that Dick lacked standing.5 The issue of standing was not raised on appeal, and that seemed to be the end of the matter until it was raised sua sponte by the court during the en banc argument. Inexplicably, the majority fails to discuss the issue of waiver, while finding that the issue of inadequacy of the record on standing was waived because it was not raised by the parties. Maj. op. at 145.
Antitrust standing is not jurisdictional, but is a defense that may be waived. In NCAA, for example, the Supreme Court reached the merits of the University’s antitrust claims even though it noted that, as here, the NCAA had raised standing below but did not pursue the question in the Supreme Court. NCAA, 468 U.S. at 97 n. 14, 104 S.Ct. at 2958 n. 14. Unlike the majority here, however, the Supreme Court did not feel obliged to decide standing before reaching the merits of the dispute. I would follow the lead of the Supreme Court and reach the merits of Dick’s appeal. Like the NCAA, the appellees here *155have waived standing by not pursuing the question.
II
Nonetheless, I discuss the standing issue because, in contrast to the Supreme Court in NCAA, the majority today reaches out for it. In my view, Dick clearly has antitrust standing.
A
I start with Mulvey v. Samuel Goldwyn Productions, 433 F.2d 1073 (9th Cir.1970), cert. denied, 402 U.S. 923, 91 S.Ct. 1377, 28 L.Ed.2d 662 (1971), and Steiner v. 20th Century-Fox Film Corp., 232 F.2d 190 (9th Cir.1956), leading Ninth Circuit eases on antitrust standing. Under the law of these cases, a licensor has standing to recover damages resulting from an unlawful conspiracy by its lessee or licensee which reduces the owner’s rent or royalties. Aurora Enterprises v. National Broadcasting Co., 688 F.2d 689, 692-93 (9th Cir.1982), reaffirmed Mulvey in light of the requirement of “antitrust injury” set forth in Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97 S.Ct. 690, 697, 50 L.Ed.2d 701 (1977), cited by the majority to test antitrust standing.
Appellees do not dispute Dick’s argument that Mulvey and Steiner support antitrust standing in this case. Both they and the majority, however, dismiss the cases as overruled by Associated General Contractors.6 Appellees’ Supp. Brief on Standing, p. 14; Maj. op. at 146. I disagree with the majority’s holding that Steiner and Mulvey do not survive Associated General Contractors. Indeed, Steiner and Mulvey, with their focus on whether the plaintiffs suffered close and direct injury by reason of anything forbidden in the antitrust laws, fall squarely within the approach formulated by Associated General Contractors, which addresses “the plaintiff’s harm, the alleged wrongdoing by the defendants, and the relationship between them.” Associated General Contractors, 459 U.S. at 535, 103 S.Ct. at 907.7
In Associated General Contractors, the Court denied antitrust standing to a union which claimed that an employer association had conspired with its members to restrict trade by coercing non-association members to hire only non-union contractors. The Court found that any injuries the union conceivably could have suffered were not sufficient to support antitrust standing.8 Indeed, the Court went so far as to call into question whether the union had demonstrated an “injury-in-fact” traceable to the defendants’ conduct for the purposes of Article III standing, noting that “[i]t is not clear whether the Union’s interests would be served or disserved by enhanced competition in the market.” Id. 459 U.S. at 539, 103 S.Ct. at 909; see Valley Forge Chris*156tian College v. Americans United for Separation of Church and State, Inc., 454 U.S. 464, 102 S.Ct. 752, 70 L.Ed.2d 700 (1982) (discussing requirements of Article III standing).
The Court’s holding in Associated General Contractors that the union lacked antitrust standing is unremarkable. Nevertheless, the majority today reads Associated General Contractors as a far-reaching decision that cuts a wide swath through preexisting caselaw on antitrust standing. I think the majority grossly overreads Associated General Contractors.
In Associated General Contractors, the Court identified various factors that may be relevant to the pragmatic inquiry whether a particular plaintiff should be permitted to vindicate the public interest by bringing a treble damage action under the antitrust laws. Although the majority here states that the court must balance the factors which may be “controlling,” its focus is primarily on “the nature of the injury,” which it labels of “tremendous significance.” Of greater significance, however, is the majority’s erroneous conflation of antitrust injury and antitrust standing. Antitrust injury is part of antitrust standing, but the majority appears to make injury the determinative factor, without recognizing the difference. See maj. op. at 145 (quoting a reference to antitrust injury in Brunswick, 429 U.S. at 489, 97 S.Ct. at 697, in the context of antitrust standing).
The majority suggests that it is a necessary if not sufficient condition for antitrust standing that a plaintiff’s alleged injuries derive from the anticompetitive nature of the defendant’s conduct. As the majority puts it, “[mjere injury as a landlord or lessor entitled to royalties would not by itself be the kind of injury to competition that the antitrust laws are designed to prevent.” Maj. op. at 148 (citing Bahn v. NME Hospitals, Inc., 112 F.2d 1467 (9th Cir.1985)). However, the panel in Bahn miscites Associated General Contractors, when it concludes that the “requirement that the alleged injury be related to anti-competitive behavior requires, as a corollary, that the injured party be a participant in the same market as the alleged malefactors." Bahn, 772 F.2d at 1470 (emphasis added). This statement does not follow from Associated General Contractors and is contrary to Blue Shield v. McCready, 457 U.S. 465, 102 S.Ct. 2540, 73 L.Ed.2d 149 (1982) (patient of psychologist brought antitrust action against health insurance company and psychiatrists’ organization). Using Bahn’s erroneous reading of Associated General Contractors, the majority narrowly defines “participant in the same market” to exclude Dick, by stating that “Dick Geothermal, as landlord of the defendants, was neither a competitor nor a consumer in the steam market.” Maj. op. at 148. This narrow definition of who may bring suit under the antitrust laws is not required by Associated General Contractors, nor is it correct. See, e.g., Mandeville Island Farms, Inc. v. American Crystal Sugar Co., 334 U.S. 219, 236, 68 S.Ct. 996, 1006, 92 L.Ed. 1328 (1948) (“The statute does not confine its protection to consumers, or to purchasers, or to competitors, or to sellers.”)
To be sure, one important factor the Court identified and analyzed in Associated General Contractors was the “nature of plaintiff's injury.” However, the Court clearly did not adopt the rigid requirement that a plaintiff’s injury must always stem from the anticompetitive effects of the defendant’s conduct.
In my view, Mulvey survives Associated General Contractors, just as it survived Brunswick. As we have noted, Mulvey “has never been overruled and remains the law of this circuit.” Aurora Enterprises, 688 F.2d at 693.
Just one year before Associated General Contractors, the Court in Blue Shield v. McCready, 457 U.S. 465, 102 S.Ct. 2540, 73 L.Ed.2d 149 (1982), explicitly rejected the notion that to have antitrust standing a plaintiff must allege injuries which “reflect the anticompetitive effect” of the alleged violation. Id. at 482, 102 S.Ct. at 2550. The Court held instead that the relationship between the injuries and the violation was merely “one factor to be considered” in deciding the standing question. Id. at 483 *157n. 19, 102 S.Ct. at 2550 n. 19.9 Thus, if the majority were correct in ruling that Associated General Contractors overrules Mul-vey, it also must have overruled McCready. Of course, it did not overrule McCready. Indeed, Associated General Contractors cited McCready with approval. 459 U.S. at 537-38, 103 S.Ct. at 908-09.
Our own cases interpreting Associated General Contractors explicitly reject the kind of narrow and rigid application of the case that the majority adopts today. Instead, we have insisted that standing be resolved by evaluating “certain factors ... on a ease-by-case basis.” Los Angeles Memorial Coliseum Comm’n v. National Football League (NFL), 791 F.2d 1356, 1363 (9th Cir.1986). In NFL, as in this case, defendants argued that the “nature” and “indirectness” of plaintiffs injury precluded antitrust standing. We rejected this argument, observing:
In basing their argument upon only some of the [Associated General Contractors] factors, [defendants] implicitly assume that a favorable finding on each and every one of the above factors is a necessary precondition to a finding of antitrust standing. We reject any such implication. Most cases will find some factors tending in favor of standing (to a greater or lesser degree), and some against (also in varying degrees), and a court may find standing if the balance of factors so instructs.
Id. (citations omitted); see also Ostrofe v. H.S. Crocker Co., 740 F.2d 739, 741 (9th Cir.1984) (noting that Associated General Contractors did not “announce a new test for determining whether a party injured by an antitrust violation could recover treble damages”).
B
Not only does the majority misread Associated General Contractors, the majority misapplies the Associated General Contractors’ test to Dick’s alleged facts.

1. Intent to Harm

It is clear that an allegation of improper motivation may help a plaintiff establish standing. Here, for the limited purpose of the trial on competitive impact, defendants stipulated that a conspiracy existed. Also, Dick specifically has alleged that appellees conspired with the intent to injure Dick’s business and property and that the specific goal of the conspiracy — suppression of steam output with resulting harm — occurred. The majority asserts the intention “did no harm” because the plan was never carried out. Clearly, however, because Dick earned royalties on the output of steam, Dick was deprived of revenues as a result of the suppressed output. What the majority seems to mean is that the plan did not succeed in coercing Dick into selling his property to the defendants for inadequate consideration. However, “plaintiff need not ‘prove an actual lessening of competition in order to recover. [C]ompetitors may be able to prove antitrust injury before they actually are driven from the market and competition is thereby lessened.’ ” McCready, 457 U.S. at 482, 102 S.Ct. at 2550 (quoting Brunswick, 429 U.S. at 489 n. 14, 97 S.Ct. at 697-98 n. 14); Thus, this factor clearly weighs in favor of Dick’s standing.

2. Directness of the Injury

Another factor affecting standing is the proximity of the injury to the defendants’ conduct. Associated General Contractors, 459 U.S. at 540, 103 S.Ct. at 910. In denying standing to the union in that case, the Court declared the “chain of causation” to consist of “somewhat vaguely defined *158links.” Id. The Court stated that “any such injuries were only an indirect result of whatever harm may have been suffered by ‘certain’ construction contractors and subcontractors.” Id. 459 U.S. at 541, 103 S.Ct. at 910.
In the present case, however, as the majority correctly recognizes, Dick’s alleged injuries of lost royalties and devaluation of its property are all the direct, foreseeable and indeed intended results of the appel-lees’ alleged restraint of trade. Maj. op. at 146. The chain of causation is clear. There are no actors between Dick and the appellees through whom Dick’s injuries have passed.
However, the majority suggests that the lost royalties “are only a fraction of Dick Geothermal’s alleged damages” and that other damages are remote consequences of the lost royalties. Maj. op. at 146-47. This suggestion ignores the alleged direct loss of value to Dick’s property. In fact, Dick claims that the appellees attempted to buy his property at an artificially low price. See First Amended Complaint at 11 24(c). These injuries are not remote and support Dick’s standing.

3. The Speculative Nature of the Injuries

Associated General Contractors also focused upon the speculative nature of the harms allegedly suffered. Noting that the plaintiff union had not alleged that the number of union members or the amount of union revenues had declined, the Court concluded that “nothing but speculation informs the Union’s claim of injury.” 459 U.S. at 543, 103 S.Ct. at 911. Here, Dick’s injuries — loss of royalties and property devaluation — are hardly speculative.
The majority concedes that the lost royalties meet the test of identifiable damages. But it totally mischaracterizes Dick’s complaint in stating that Dick’s “only direct, identifiable damages are those of a landlord whose rent has not been paid.” Maj. op. at 148. Dick has alleged that it was prevented from purchasing steam leases. Without evidence on whether or not defendant’s behavior produced this result, we cannot conclude as a matter of law that Dick was not injured by any alleged misinformation or that the damages are speculative.

j. The Existence of an Identifiable Class of Better Plaintiffs

An additional factor to be considered is the existence or non-existence of “an identifiable class of persons whose self-interest would normally motivate them to vindicate the public interest in antitrust enforcement.” Associated General Contractors, 459 U.S. at 542, 103 S.Ct. at 910. The majority identifies two classes of potential plaintiffs, Pacific Gas & Electric (P.G. & E.) and neighboring landowners, who obviate the need to confer standing on Dick. To my mind, careful reading of Dick’s allegations show that it is a member of one of the majority’s “identifiable classes.” Dick’s injury is no more “remote” than that of P.G. & E. or neighboring landowners. Moreover, I question the wisdom of denying antitrust standing to Dick with the expectation that a large, regulated utility such as P.G. & E., which can pass on most costs to consumers, will have sufficient motivation to sue appellees for violation of antitrust laws. I conclude that this factor also supports Dick’s standing.

5. Nature of the Injury

Dick claims appellees sought to deny it the resources necessary to enter the steam production market and to compete effectively in the market for steam leases. This is exactly the kind of harm to competition that the antitrust regime seeks to prevent and remedy. Appellees and the majority refute this claim only by ignoring Dick’s allegations.
With very little discussion, the opinion wrongly finds that injury in the form of reduced royalties is insufficient to support standing. Maj. op. at 148. As for Dick’s claimed injuries as a potential seller of steam and as an actual purchaser of steam rights, competing in the steam rights market, the majority states:
These claims were not conceded. They were disputed and denied and tried ... it *159is clear that [R.C. Dick’s] allegations went beyond what it was capable of proving. In the steam market, it was not a producer of steam.
Maj. op. at 148. With regard to the steam rights market, the majority makes a finding of no injury to Dick. It does this based upon a further finding that the record fails to provide any admissible evidence that the defendants’ alleged conspiracy had any anti-competitive effect on the steam rights market. Maj. op. at 148-49. However, these are two entirely different questions. The district court tried only the issue of anti-competitive effect on the steam market and did not litigate the issue of injury to Dick.
Here, I must express my concern regarding the procedural posture of the case. In fact, these claims — whether Dick suffered injuries in the steam rights market or as a producer of steam — were not tried or challenged by a motion for summary judgment. Dick was never required to present evidence that it had been injured in the steam rights market, that is, that defendants’ conspiracy prevented Dick from purchasing adjacent property by limiting revenues and scaring away financial backers or joint ven-turers. Similarly, Dick was never required to present evidence that it was a competitor in the steam market.
The majority nonetheless finds facts on this issue. It finds that Dick was not a producer of steam and would not have become one, concluding that there is no evidence that Dick was prepared to enter the steam market. The majority also finds as a matter of fact that Dick could have gained from misinformation about neighboring properties because it could have used the information to purchase the properties at lower prices.
Leaving aside the majority’s improper usurpation of the role of fact-finder, its findings do not directly address Dick’s allegations. Dick claims that the deprivation of royalties prevented it from amassing the resources necessary to purchase neighboring land. Dick alleges that not only did the conspiracy deprive it of funds needed to purchase steam leases, but, because of the lack of any steam production on most of its property, Dick was unable to enlist financial backing or joint venture interest in purchases of adjacent land. Dick claims that when it approached potential lenders or partners, they cited the lack of any steam production as the reason for rejecting the proposal. Dick also claims that the defendants purchased leases on neighboring land, leases for which Dick would have competed had defendants’ conspiracy not interfered.
Strangely, the majority requires that, to establish standing, Dick prove precisely what Dick contends it should not have to prove on the merits — that the alleged violation tended to reduce competition in some market. If, as Dick maintains, the alleged horizontal conspiracy to suppress the output of steam constitutes a per se violation of § 1 of the Sherman Act, it is not required to prove anti-competitive effect because that is presumed.
It is not necessary for a plaintiff alleging a per se violation to prove a reduction of competition in a relevant market to show that the “nature of the injury” factor is in its favor. See, e.g., Brunswick, 429 U.S. at 489, 97 S.Ct. at 697 (considering simply whether the plaintiff’s injury “flows from that which makes defendants’ acts unlawful”). The majority reformulation of the “nature of the injury” factor is problematic in cases such as this one where a dispute exists whether plaintiff has to demonstrate an anticompetitive effect, or whether such an effect is presumed. Moreover, the majority misapplies the “nature of the injury” factor to the injuries Dick alleges in both of the relevant markets — the steam market and the steam rights market.
The majority concludes that Dick’s alleged injuries in both markets dictate that it be denied standing. The majority is plainly wrong.

The Steam Market Injury

All of the injuries Dick alleges arise from “that which makes the defendants’ conduct illegal.” Most importantly, Dick alleges that it lost royalties as a result of the conspiracy to suppress the output of steam. Dick argues on the merits that the horizon*160tal conspiracy to suppress steam production is a per se violation of the antitrust laws, whether or not that suppression had any impact upon price. If this argument is accepted, as it must be for standing purposes, then Dick’s royalty losses stem directly from that which is illegal about ap-pellees’ conduct — that it suppressed output in the steam market. This alleged suppression is precisely what led to reduced royalties.

The Steam Rights Market Injury

The majority’s analysis of the steam rights market is also wide of the mark. Dick claims that the market value of its steam producing property and that of adjoining landholders has been reduced as a result of appellees’ scheme because outsiders have been led to believe that there is less steam under Dick’s land than actually exists. The majority concludes that Dick has suffered no injury in this regard because it purchased the property during the period of the conspiracy and may have purchased the property at bargain prices. This is pure speculation.
Dick alleges that the conspiracy reduced the value of its property as well as that of adjoining landowners. Dick does not limit this allegation to the period prior to its purchase of the land. The majority states that Dick made no showing that there was a reduction in value during this time. However, once again, Dick has never been required to prove, nor given an opportunity to prove, its actual injuries. The district court limited the trial to the issue of market injury, not injury to Dick. Dick’s allegations of injury are broader than loss of value to its property. It asserts that the loss of royalties from the suppression deprived it of the means to compete in the steam rights market and that financial backers were scared away. These injuries are sufficient to meet the test of Associated General Contractors.
Ill
In holding that Dick lacks antitrust standing, the majority opinion completely misinterprets and misapplies the relevant Supreme Court and Ninth Circuit caselaw. The Associated General Contractors factors it cites as weighing against Dick’s standing actually weigh in favor of standing. Perhaps what is most disappointing is that the majority’s wooden and mechanistic approach to antitrust standing completely disregards the concerns which animate the antitrust laws.
Section 4 of the Clayton Act broadly authorizes private damage actions under the antitrust laws: “Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefore ... and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney’s fee.” 15 U.S.C. § 15. Despite the breadth of this provision, courts have, through the doctrine of antitrust standing, narrowed the universe of plaintiffs who may seek treble damages.
Courts have engaged in this narrowing process because “[i]t is reasonable to assume that Congress did not intend to allow every person tangentially affected by an antitrust violation to maintain an action to recover threefold damages for the injury to his business or property.” McCready, 457 U.S. at 477, 102 S.Ct. at 2547. The problem, of course, is determining who Congress did intend to be free to invoke the antitrust laws.
Although “neither the statutory language nor the legislative history of § 4 offers any focused guidance on the question of which injuries are too remote from the violation and the purposes of the antitrust laws to form the predicate for a suit under § 4,” courts are not completely without direction in conducting this narrowing enterprise. Id. Most significantly, courts must be careful not to “engraft artificial limitations on the § 4 remedy” that are inconsistent with the broad objectives of the antitrust laws. Id. We must bear in mind that the private enforcement and treble damage provisions of the antitrust laws evince a clear Congressional purpose to accomplish more than simply compensating victims: these provisions allow antitrust plaintiffs to operate as private attorneys general vindicating the public interest in a *161free market economy. I am not sure the majority, which focuses so extensively on compensation for private injuries, takes this point seriously.
The majority’s tunnel vision notwithstanding, it remains clear that the remedy provisions of the antitrust laws not only compensate private persons for their injuries, but give them a “powerful incentive ... to detect, disclose, attack and end violations of the antitrust laws. Private enforcement thus increases the likelihood that a violator will be found out, greatly enlarges the penalties and thereby helps discourage illegal conduct.” 2 P. Areeda & D. Turner, Antitrust Law, ¶ 331, at 150 (1978). In light of these objectives, courts have applied the doctrine of antitrust standing to carry out the broad remedial and deterrent scheme established by Congress. The rejection of a rigid black-letter rule and the adoption of pragmatic factors by the Associated General Contractors Court is faithful to these Congressional objectives. The majority’s restrictive application of these factors is not.
IV
In my view, appellees have waived any standing defense they might have had. Nevertheless, if standing is addressed, Mulvey is clear authority for Dick’s standing. Associated General Contractors cannot be read as overruling Mulvey. Moreover, Dick has standing according to application of the factors set out in Associated General Contractors. Accordingly, I proceed to decide whether the alleged horizontal conspiracy to restrict output, if true, would constitute a per se violation of § 1 of the Sherman Act.
In this regard, it should be clear that Judge Noonan’s entire discussion of the merits is dictum.10 Judge Noonan reaches the merits by asking whether Dick’s injury — which under his analysis does not exist for the steam rights market — “is ‘inextricably intertwined’ with injury to competition.” Maj. op. at 150. He refers to and then misstates McCready in asking this question. In McCready, the Court noted that plaintiff’s injury “was inextricably intertwined with the injury the conspirators sought to inflict on psychologists and the psychotherapy market.” McCready, 457 U.S. at 484, 102 S.Ct. at 2551 (emphasis added). The Court did not require actual proof of injury to competition. Indeed, as Justice Rehnquist pointed out, there were no allegations of injury to the market. Id. at 489, 102 S.Ct. at 2553. Judge Noonan’s misunderstanding of McCready leads him to unnecessarily and wrongly discuss per se and Rule of Reason analyses. His proposition that “it has been broadly doubted whether the dichotomy between the Rule of Reason and the per se rule still exists or is helpful to analysis” is supported by no caselaw. In addition to being wrong, this bald statement is of little or no value as authority for future litigants in this Circuit.
V
The gravamen of Dick’s case is that the appellees horizontally conspired to suppress and did suppress the production of steam from Dick’s land: to deter exploration and development of the steam reserves on Dick’s property; to obtain leases on the property adjacent to Dick’s property at artificially depressed prices; to deprive Dick of royalty revenue Dick needed to develop other geothermal steam reserves in the Geysers field; and to obtain Dick’s interest in its property for an inadequate consideration. First Amended Complaint, ¶¶ 20, 24-26. Although for the purpose of the trial on competitive injury, appellees stipulated that they had conspired with anticompeti-tive intent to restrict output by an amount equal to seven to nearly ten percent of the relevant market, the district court concluded that the horizontal output restriction was not an unreasonable restraint of trade under either per se or Rule of Reason analysis. R.C. Dick Geothermal Corp. v. Thermogenics, Inc., 619 F.Supp. 441 (C.D. *162Cal.1985). No procompetitive reasons for the restraint were ever identified.
The district court’s decision is inconsistent with Supreme Court precedent and disruptive to antitrust law. Per se analysis applies if a “practice facially appears to be one that would always or almost always tend to restrict competition and decrease output ” rather than increase competition and render markets more competitive. Broadcast Music, Inc. (BMI) v. CBS, 441 U.S. 1, 19-20, 99 S.Ct. 1551, 1562-63, 60 L.Ed.2d 1 (1979) (emphasis added). The district court’s apparent conclusion that horizontal conspiracies to restrict output do not tend to decrease output is, in my view, simply wrong.
Horizontal agreements to fix prices and divide markets are per se violations of the antitrust laws because they indirectly tend to decrease output below the competitive level. It makes little sense to suggest that horizontal conspiracies directly aimed at decreasing output are not just as likely to tend to decrease output (and thus just as subject to per se analysis) as horizontal conspiracies to fix prices or divide markets. The result would allow businesses to achieve the same anticompetitive purposes through restricting output that they would have achieved if they could legally fix prices. See generally General Leaseways v. National Truck Leasing Ass’n, 744 F.2d 588, 594-95 (7th Cir.1984) (explaining how reducing output creates the same anticom-petitive effects as raising prices or dividing markets).
The Supreme Court has condemned output restrictions as per se violations, noting that “[horizontal price fixing and output limitation are ordinarily condemned as a matter of law under an ‘illegal per se’ approach because the probability that these practices are anticompetitive is so high.” NCAA, 468 U.S. at 100, 104 S.Ct. at 2959. Thus, output restrictions are equated with horizontal price fixing and subject to per se analysis. Indeed, “[rjestrictions on price and output are the paradigmatic examples of restraints of trade that the Sherman Act was intended to prohibit.” Id. at 107-08, 104 S.Ct. at 2963.
In NCAA, the Supreme Court held that the ordinarily applicable per se analysis did not apply to the particular case before it, but the Court made very clear that the only reason per se analysis did not apply was that there were unique procompetitive reasons for the horizontal restraint at issue. “[Wjhat is critical is that this case involves an industry in which horizontal restraints on competition are essential if the product is to be available at all.” Id. at 101, 104 S.Ct. at 2960. The Court reasoned that because the product offered by the NCAA consisted of contests between competing sports teams, some horizontal agreements between those sports teams were uniquely necessary to produce a product at all. Thus, the NCAA Court simply recognized a caveat to the per se rule against horizontal restraints on competition holding that some horizontal relationships have unique aspects that can create procompetitive justifications for particular horizontal restraints.11
The caveat to per se rule application does not apply in this case because no procom-petitive justification has been alleged, much less a necessity to restrain output in order to have a product at all. It may be that “the behavior of the sellers was influenced by their decisions as to the rate at which they wanted to dispose of a very limited and depletable commodity” as Judge Noonan asserts, maj. op. at 152, but that does not explain why a horizontal agreement is necessary to determine the proper level of production. Making and selling a product requires individual producers to determine the proper level of *163output and the proper selling price. The whole point of forbidding horizontal combinations is to make sure that each individual producer makes this decision on its own so that market forces can determine the market’s overall level of output and prices.
The district court failed to apply the per se rule because it erroneously viewed the relationship of the parties as “vertical.” R.C. Dick, 619 F.Supp. at 448-49. The court noted Dick’s contention that the plaintiffs were horizontal competitors, including the fact that two of the parties were joint steam operators on a neighboring property. However, it concluded that they were not competitors because they sequentially held rights in Dick’s property. Id. It is difficult to square this ruling with the court’s determination that the relevant market comprised the entire Geysers area. Id. Because the evidence is uncontrovert-ed that the appellees held steam rights throughout this area, they must be considered horizontal competitors.12
In his analysis, Judge Noonan does not rely upon the district court’s finding that this dispute involves a vertical arrangement. Instead, he concludes that per se analysis does not apply because there is no evidence of anticompetitive market injury. Maj. op. at 151-52. However, Judge Noonan is requiring Dick to prove the very thing he need not prove in a per se case. See NCAA. In other words, he demands that Dick prove that which is presumed under per se analysis.
In addition, the district court and Judge Noonan erroneously claim that per se analysis should not apply because this case involves business relationships with which the courts are not familiar. 619 F.Supp. at 449; maj. op. at 151. On this point, Judge Noonan finds that the alleged agreement to suppress output is unusual because it involves restriction on the output of steam on a single piece of property, for a product “uniquely sold” in the Geysers region. Maj. op. at 151.
First, Judge Noonan confuses novel business relationships or restraints with unfamiliar industries. The Supreme Court has been reluctant to treat novel types of business relationships under per se rules, but has not hesitated to apply per se rules to industries that previously have not been the subject of litigation. The Supreme Court has rejected “the argument that we should not apply [a] per se rule [to a] case because the judiciary has little antitrust experience in the [particular] industry,” Arizona v. Maricopa County Medical Soc’y, 457 U.S. 332, 349, 102 S.Ct. 2466, 2475, 73 L.Ed.2d 48 (1982), and has expressly distinguished that argument from “the established position that a new per se rule is not justified until the judiciary obtains considerable rule-of-reason experience with the particular type of restraint challenged,” id. at 349 n. 19, 102 S.Ct. at 2475 n. 19. The Supreme Court rejected
the argument that the per se rule must be rejustified for every industry that has not been subject to significant antitrust litigation [because it] ignores the rationale for per se rules, which in part is to avoid the necessity for an incredibly complicated and prolonged economic investigation into the ... industry involved.
Id. at 351, 102 S.Ct. at 2476 (quotation omitted).
There is nothing novel about horizontal conspiracies to restrict output. Nor does Judge Noonan persuade that there exist any unique and heretofore unconsidered aspects to the business relationship among steam producers. The fact that the conspirators agreed to restrict output at one production site, instead of sharing the burden throughout the system, does not suggest a reason for insulating the agreement from per se analysis. Certainly no procom-petitive reason is suggested for such a horizontal restraint.
*164In NCAA, the Court made clear that its failure to apply the per se rule was “not based on a lack of judicial experience with this type of arrangement.” NCAA, 468 U.S. at 100, 104 S.Ct. at 2959. “While judicial inexperience with a particular arrangement counsels against extending the reach of per se rules, the likelihood that horizontal price and output restrictions are anticompetitive is generally sufficient to justify application of the per se rule without inquiry into the special characteristics of a particular industry.” Id. at 100 n. 21, 104 S.Ct. at 2959-60 n. 21 (emphasis added and citations omitted). NCAA is thus definitive precedent for the proposition that horizontal output restrictions are not an unfamiliar business relationship. The only unfamiliar feature of this case is that it involves the geothermal steam market. If, in contradiction of Supreme Court authority, we allow the unfamiliarity of an industry to act as a bar to applying per se rules, we can expect a stream of litigants arguing that a conspiracy to fix prices or divide markets is not presumptively illegal in their particular industry.
Finally, even if the per se rule did not govern this ease, the district court’s holding that the output restriction survives Rule of Reason analysis because the competitors lacked sufficient market power to affect the overall output is also inconsistent with Supreme Court authority. Market power need not be proven under Rule of Reason analysis where there exists a “naked restriction on price or output.” Id. at 109, 104 S.Ct. at 2964. Judge Noonan erroneously concludes that a restriction on price or output is not “naked” unless an actual anticompetitive effect, such as diminished output or higher prices, is proven. Maj. op. at 150-51. His opinion confuses two independent reasons for dispensing with proof of market power.
Although proof of actual detrimental price-output effects can obviate the need for proof of market power, the Supreme Court clearly indicated that the “naked” nature of a restraint is a completely separate reason for avoiding proof of market power. Federal Trade Comm’n v. Indiana Fed. of Dentists, 476 U.S. 447, 106 S.Ct. 2009, 90 L.Ed.2d 445 (1986). In that case the Supreme Court held that proof of market power was not required to condemn the agreement at issue because a horizontal agreement not to offer a particular service was, in and of itself, “ ‘a naked restriction on price or output’ and that such a restriction ‘requires some competitive justification even in the absence of a detailed market analysis.’ ” Id. at 460, 106 S.Ct. at 2018 (quoting NCAA, 468 U.S. at 109-10, 104 S.Ct. at 2964-65). The Court went on to hold that “even if the restriction imposed ... is not sufficiently ‘naked’ to call this principle into play,” the agreement still failed Rule of Reason analysis because the evidence showed that the services the conspirators had agreed to withhold were actually unattainable. Id. Clearly, thus, the nakedness of a restriction and proof of actual detrimental effects are alternative grounds for obviating proof of market power. The district court should have summarily condemned the horizontal output restraint even under Rule of Reason analysis as a naked restraint on output without procompetitive justification.13
“Antitrust laws in general, and the Sherman Act in particular, are the Magna Carta of free enterprise.” United States v. Topeo Assocs., 405 U.S. 596, 610, 92 S.Ct. 1126, 1134, 31 L.Ed.2d 515 (1972). Adherence to per se rules “is grounded not only on economic prediction, judicial convenience, and *165business certainty, but also on a recognition of the respective roles of the Judiciary and the Congress in regulating the economy.” Maricopa County, 457 U.S. at 354, 102 S.Ct. at 2478.
Defining markets and determining the presence of market power is not socially costless. Using up the time and energy of courts and lawyers wastes resources when the challenged conduct of a pernicious type lacks any offsetting legitimate objective. Moreover, complicating and perhaps forestalling the condemnation of such conduct weakens deterrence of such unredeemed behavior.
7 P. Areeda, Antitrust Law, 111509, at 411 (1986). We should not permit the strength of our per se rules to be eviscerated “when the most [defendants] can say for themselves is that they tried to harm the public but were mistaken in their ability to do so.” Id.
The failure to condemn summarily the output restriction led the district court into an inquiry about “the competitive level of output” that judges are ill-equipped to conduct and which itself demonstrates why per se rules are necessary. Proof of chronic unmet demand, coupled with the stipulation that the horizontal conspirators had agreed to withhold seven to nine percent of the available supply, should have compelled the conclusion that the agreement had anti-competitive effects. The district court, however, seemed to require proof not only that output was suppressed but that the competitive level of output would have been different. Any comparison of the output resulting from the conspiracy with a hypothetical “competitive” level of output is directly analogous to the long-condemned argument that courts must determine whether fixed prices are “reasonable” or higher than competitive prices. See, e.g., Maricopa County, 457 U.S. at 345-47, 102 S.Ct. at 2473-74. The only reasonable level of output or reasonable price is the output and price determined by free market forces. A horizontal conspiracy is “not entitled to pre-empt the working of the market by deciding for itself that its customers do not need that which they demand.” Indiana Fed. of Dentists, 476 U.S. at 462, 106 S.Ct. at 2019-20.14
To summarize, because this case involves an allegedly naked horizontal restraint on output, one without any proeompetitive justifications, the defendants’ conduct should be judged under the per se rule, not under the Rule of Reason.

. Defendants were involved in developing the steam under Dick’s land, in addition to other properties. Geothermal Resources, Inc. (GRI) acquired steam rights in the Dick property in 1966. In 1970, GRI transferred its rights to Resources Investment Company (RIC), a subsidiary of Hughes Aircraft Company. Another Hughes subsidiary, Thermogenics, Inc. (TGI), took over a year later. GRI reacquired rights to the Dick property in 1982. Between 1971 and 1977, TGI contracted with defendants Pacific Energy Corp. (PEC) and Callón Petroleum companies, both owned by John Callón, for development and management of the steam rights to Dick’s property. Between 1973 and 1977, TGI and PEC also were joint venturers in developing the Filley property, which adjoined Dick's land.

. Dick filed its original complaint in 1979, alleging a horizontal conspiracy to suppress and suppression of steam production from Dick’s land for anticompetitive purposes. Extensive pre-trial proceedings included two defense motions for summary judgment, which were for the most part granted. Subsequently, the judge conducted a 22-day bench trial spread over 14 months to decide whether Dick could prove competitive injury to the steam market. Final judgment for the appellees was entered in 1985. R.C. Dick Geothermal v. Thermogenics, Inc., 619 F.Supp. 441 (C.D.Cal.1985). The original panel handed down its decision on March 16, 1988. The court ordered rehearing en banc and the case was argued to this en banc panel on May 12, 1988.

. In my view, deciding the antitrust standing issue without post-briefing argument does violence to Fed.R.App.P. 34(a) and 9th Cir.R. 34-4.

. Dick's action was based upon §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1-2 (1988). His appeal concerns only section 1 claims.

. The majority finds that the district court made factual findings and rulings sufficient to permit a decision as to standing. Opinion p. 13033. However, the district court made no findings of fact or rulings of law on standing.
The majority’s reference to Bubar v. Ampco Foods, Inc., 752 F.2d 445, 449 (9th Cir.), cert. denied, 477 U.S. 1018, 105 S.Ct. 3481, 87 L.Ed.2d 616 (1985), is misplaced. In Bubar, summary judgment in favor of defendants was granted on the basis that the plaintiffs lacked standing and this was the sole issue raised on appeal by plaintiffs. Unlike the present case, plaintiffs in Bubar had ample opportunity to develop the record' on standing in the district court, and thus de novo review based upon the entire record was appropriate.
Here, the district court tried only the question of anticompetitive effects in the steam market. To decide this question, Dick was required to show injury to the market, not injury to itself. While a plaintiff attempting to show anticom-petitive effects in a market might begin by demonstrating injury to itself, a plaintiff knowing that antitrust laws “were enacted for the protection of competition, not competitors,” Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 488, 97 S.Ct. 690, 697, 50 L.Ed.2d 701 (1977) (quotation and emphasis omitted), could reasonably decide to focus on the market as a whole. Moreover, the existing record fails to demonstrate as a matter of law that Dick suffered no injury.

. To its credit, the majority does not accept appellees’ assertion that Steiner and Mulvey are inconsistent with Eagle v. Star-Kist Foods, Inc., 812 F.2d 538 (9th Cir.1987). Eagle cited neither Steiner nor Mulvey, and denied plaintiff workers antitrust standing on the ground that plaintiffs’ injuries were indirect and derivative from those suffered by the employer. Eagle is a classic Illinois Brick Co. v. Illinois, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707 (1977), fact situation.

. The majority characterizes Steiner and Mulvey as cases utilizing a "target area” approach, which it says is rejected by Associated General Contractors. However, the short discussion of standing in Steiner questions only whether the appellant’s interest is sufficiently close and direct to make the plaintiffs a proper party to complain of the alleged conspiracy. The court in Mulvey refers to “target area" in restricting the right to bring an antitrust action to those persons "within that area of the economy which is endangered by a breakdown of competitive conditions in a particular industry.” Mulvey, 433 F.2d at 1076. Ironically, the question in Mulvey was not whether this Circuit’s test of standing was too broad, in light of Supreme Court decisions, but rather whether it was too narrow. Id. In any event, contrary to what the majority asserts, Associated General Contractors does not “explicitly" reject Steiner and Mulvey, nor even cite them. Rather, the Court simply cautions against the use of any single label or test as black-letter law. Its pragmatic approach is far from overruling Mulvey and Steiner. See infra, at 156.

.The Court lamented the fact that the union had not alleged any specific injuries, but instead had alluded only to unspecified injuries in "business activities.” Given this vague allegation, the Court attempted to hypothesize possible injuries.

. In McCready, standing existed even though there was no showing that McCready’s economic injuries — her unreimbursed psychologist’s fees — resulted from the anticompetitive nature of defendants’ illegal conduct. Although McCready was a consumer of psychotherapy, there was, as Justice Rehnquist pointed out vigorously in dissent, no allegation that "the conspiracy has affected the availability of the psychological services she sought and actually obtained. Nor does she allege that the conspiracy affected the price of the treatment she received.” 457 U.S. at 489, 102 S.Ct. at 2553. Nonetheless, the majority found standing because plaintiffs injury was “inextricably intertwined with the injury the conspirators sought to inflict on psychologists and the psychotherapy market." Id. at 484, 102 S.Ct. at 2551.

. Judge Noonan’s gratuitous discussion of the per se issue does not command a majority of the en banc panel.

. This caveat applies equally to application of per se analysis to horizontal price fixing, as demonstrated by the opinion in BMI. There the Court held that a particular horizontal price fixing agreement, where associations of composers sold their musical performance rights for a fixed fee via a collective blanket license, was so justified by unique procompetitive reasons that the per se rule against price fixing did not apply. See BMI, 441 U.S. at 20-24, 99 S.Ct. at 1562-64. Moreover, the Court stressed, as it did in NCAA, that the product being sold would not be available at all but for the horizontal agreement. Compare BMI, 441 U.S. at 22-23, 99 S.Ct. at 1563-64, with NCAA, 468 U.S. at 101, 104 S.Ct. at 2960.

. As to appellees’ relationship in Dick’s property, the district court was understandably uneasy about applying the label “vertical.” R.C. Dick, 619 F.Supp. at 448. The sequential rights that most of the developers held were neither horizontal nor vertical. Only TGI’s relationship with the Callón companies on Dick’s property could be called vertical. However, at the same time this relationship existed, TGI and PEC were involved in a joint venture for production of steam from the neighboring Filley property, making them horizontal competitors as well.

. Further support for the proposition that naked restraints on competition cannot survive Rule of Reason analysis absent procompetitive justification appears in the Court’s earlier statement regarding horizontal agreements to withhold services: "Absent some countervailing pro-competitive virtue — such as, for example, the creation of efficiencies in the operation of a market or the provision of goods and services— such an agreement limiting consumer choice by impeding the 'ordinary give and take of the marketplace’ cannot be sustained under the Rule of Reason.” 476 U.S. at 459, 106 S.Ct. at 2018 (citations omitted). On its face, this statement indicates that a naked restraint on competition cannot survive Rule of Reason analysis solely because no anticompetitive effect is shown. There must be a procompetitive virtue shown.

. It makes no difference that the customer in this case, P.G. & E., was apparently a monopso-ny. Courts have never permitted horizontal restraints to be justified by the argument that a horizontal combination is necessary to exercise countervailing monopoly power. The majority errs when it assumes that no conceivable anti-competitive goal or effect could be shown because the monopsony controlled prices. It stands to reason that restricting the supply of goods to a monopsony, particularly when that monopsony faces chronic unmet demand, may provide the necessary leverage to force the mon-opsony to raise prices. Proof that a restriction on supply actually raised prices is not required to show an anticompetitive evil. Indiana Fed. of Dentists, 476 U.S. at 461-62, 106 S.Ct. at 2019-20.