Court Opinion

ID: 9491346
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:11:41.235757+00
Date Added: 2024-06-11T17:54:41.012436
License: Public Domain

LOKEN, Circuit Judge.
National Parcel Service is a “zone skipper,” a shipping company that receives packages from mail order and retail catalog merchants and delivers them in bulk to United States Postal Service (USPS) bulk mail distribution centers. This enables NPS to *971charge lower prices than United Parcel Service (UPS), because UPS charges a premium for residential deliveries, and to offer faster service than USPS.
J.B. Hunt Transport is a large interstate trucking company. In mid-1994, a J.B. Hunt subsidiary entered the zone skipping business, targeting the customers of NPS and a third zone skipper, CTC, with low prices. J.B. Hunt’s early, strategy was to make “whatever price concessions you need to give or whatever, get us in the business quickly.” At a meeting between representatives of J.B. Hunt and NPS, an NPS principal asked the J.B. Hunt representative why he had suggested the meeting. The answer was, “Well, I’m not going to buy you. Why would I buy you? I’d just take you out.” J.B. Hunt’s revenues grew quickly at its competitors’ expense. Not surprisingly, NPS lost business and J.B. Hunt lost money. NPS responded with this lawsuit, seeking damages for predatory pricing under the federal antitrust laws and the Iowa law of interference with prospective advantage. The district court1 granted summary judgment in favor of the J.B. Hunt defendants, and NPS appeals. We affirm.
To establish competitive injury for a predatory pricing claim under § 2 of the Sherman Act, 15 U.S.C. § 2, plaintiff must prove “that the prices complained of are below an appropriate measure of its rival’s costs,” and “that the competitor had ... a dangerous probability of recouping its investment in below-cost prices.” Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 222-24, 113 S.Ct. 2578, 125 L.Ed.2d 168 (1993). Here, NPS cannot show a dangerous probability of recoupment because UPS and USPS can always take over or eliminate the zone skipping “niche” market should a competitor like J.B. Hunt or NPS begin charging supraeompetitive prices and reaping monopoly profits. Unfair pricing antitrust claims should be viewed with “great caution and a skeptical eye.” Bathke v. Casey’s General Stores, Inc., 64 F.3d 340, 343 (8th Cir.1995). The district court properly dismissed this claim.
NPS’s state law tort claim is for interference with its relations with one.customer who succumbed to J.B. Hunt’s better prices. Following the Restatement (Second) of Torts for competitive torts, Iowa law requires proof of “improper” interference. See Nesler v. Fisher & Co., 452 N.W.2d 191, 196-99 (Iowa 1990). In determining what is improper, the Restatement recognizes that vigorous competition is desirable, not tortious. See Restatement (2d) Torts § 768. Reflecting that principle, the Supreme Court of Iowa has held that intentional interference with prospective advantage requires proof of a “predominant purpose” to injure or destroy the plaintiff. See Berger v. Cas’ Feed Store, Inc., 543 N.W.2d 597, 599 (Iowa 1996); Wilkin Elevator v. Bennett State Bank, 522 N.W.2d 57, 62 (Iowa 1994). NPS argues it has sufficient evidence of such a purpose— the statement by J.B. Hunt that it could “take you out.” One court has persuasively suggested that intent is not a useful standard for distinguishing between actionable predatory pricing and healthy price competition because hard competition necessarily entails injuring unsuccessful competitors, and “you cannot be a sensible business executive without understanding the link among prices, your firm’s success, and other firms’ distress.” A.A. Poultry Farms, Inc. v. Rose Acre Farms, Inc., 881 F.2d 1396, 1401-02 (7th Cir.1989), cert. denied, 494 U.S. 1019, 110 S.Ct. 1326, 108 L.Ed.2d 501 (1990). For this reason, we are uncertain whether the Supreme Court of Iowa would apply its “predominant purpose” test when the alleged interference is predatory pricing. But in any event, we agree with the district court that the passing remark by J.B. Hunt that it could “take you out” is not the kind of competitive threat that will support a prima facie case of tortious interference. Cf. Fischer v. UNIPAC Serv. Corp., 519 N.W.2d 793, 800 (Iowa 1994).
Accordingly, we affirm.

. The HONORABLE ROBERT W. PRATT, United States District Judge for the Southern District of Iowa.