Court Opinion

ID: 9479466
Source: CourtListenerOpinion
Date Created: 2023-08-05 07:19:38.443988+00
Date Added: 2024-06-11T17:47:04.008273
License: Public Domain

WELLFORD, Circuit Judge,
concurring:
I concur in the opinion of Judge Krupan-sky, but write separately to set out and emphasize parts of the decision of Judge Robert E. DeMascio that seem to me to compel the result reached in this appeal.
I. Section One Sherman Act Claim
First, the district judge properly held that Barnosky Oils, Inc. v. Union Oil Co., 665 F.2d 74 (6th Cir.1981), was “pertinent to the issue whether there is evidence of any agreement between Chrysler and others to prevent the plaintiffs from selling Chrysler parts to the United States government.” Barnosky stands for the proposition that there is no “coerced” agreement where the plaintiffs “would add nothing to the defendant’s ability to achieve its own ends through unilateral action.” (Emphasis added). Judge DeMascio then held that:
[It is] clear that Chrysler merely delayed its quotations, slowed its deliveries, and then finally stopped quoting altogether. These actions alone were what hampered ILG’s ability to complete for Government business. Chryler did not approach Mr. Henke and ask him not to bid on Government business, nor is there any evidence that it asked the Government to boycott ILG. It is not an antitrust violation to try to persuade a customer that a competitor is not supplying the exact product for which the customer has asked. The defendant is therefore entitled to a di*910rected verdict in its favor on the issue of whether an agreement existed to prevent Plaintiffs from selling Chrysler brand parts to the Government. There simply is no evidence to support a finding of such an agreement.
I agree that plaintiffs have failed in this particular with respect to the Section One claim.
In assessing the relevant market, the district judge properly observed that other retailers (K-Mart, Sears, and the like) were part of the relevant market contrary to the assertions fo plaintiffs’ expert, Dr. Glennie. The court stated:
The fact is that both dealers and other retailers are competing to obtain the same product (Chrysler compatible parts) to sell to the same customers (owners of Chrysler vehicles). Both the dealers and K-Mart respond to the same consumer demands, and therefore, both place the same demands on Chrysler and other suppliers of compatible parts. The dealers and K-Mart bid against each other to obtain the same products, and they then bid against each other to sell the same products to owners of Chrysler vehicles.
Plaintiff Aargus’ inability to sell “genuine parts” to one class of retailers did not prevent it from selling those same parts to all other retailers; those other retailers were, in both the technical and colloquial sense, in the market for the same product that Aargus complained it could not sell to dealers, and they sought that product for the same reason. An assessment of the harm to competition, therefore, must consider these competing retailers as part of the relevant market that has allegedly been injured.
(Emphasis in original).
Judge DeMascio noted that the plaintiffs’ faulty market definition, irrespective of the existence of an agreement, would prevent a finding that Chrysler unreasonably impeded competition:
The Court has already stated our finding that there is no evidence that Chrysler acted other than unilaterally with respect to Plaintiffs' attempts to sell Chrysler brand parts to the Government. But, even if there were proof of an agreement, regarding sales to the Government, such a supposed agreement has not been shown to be unreasonable because, again, Plaintiffs’ evidence of unreasonableness relies on an incorrect market definition.
Judge DeMascio made a detailed analysis of the “government market” as a relevant market theory advanced by plaintiffs and the case authority submitted by plaintiffs to support their theory. I agree with the conclusion reached that plaintiffs failed under the proof submitted.
II. Section Two Sherman Act Claims
The district court first set out the requirements imposed upon a plaintiff making a Section Two antitrust claim:
To establish a Section 2 violation of the Sherman Act, Plaintiff must show that Chrysler has actually monopolized or has attempted to monopolize trade or commerce in a relevant market. Actual monopolization under Section 2 has two elements: the possession of monopoly power in the relevant market and the willful acquisition or maintenance of that power in that relevant market. US. v. Grinnell Corporation, 384 U.S. 563, 570, 86 S.Ct. 1698, 1703, 16 L.Ed.2d 778 (1966).
In order to prove attempt to monopolize, Plaintiffs must show that Chrysler engaged in anticompetitive conduct, that it did so with specific intent to monopolize a relevant market, and that there is a dangerous probability of it succeeding in that attempt. White & White, Inc. v. American Hospital and Supply Corp., 723 F.2d 495, 506-07 (6th Cir.1983); Richter Concrete Corp. v. Hilltop Concrete Corp., 691 F.2d 818, 823 (6th Cir.1982).
He discussed further the relevant product market in respect to a Section Two assertion in light of the proof developed:
The alleged inability of competing suppliers of Chrysler compatible parts to sell to dealers does not restrict their ability to reach other retailers, because these other retailers bid for the parts in the same market as dealers. Thus, Chrys*911ler’s power in “the market” is its power in the market populated by all retailers of Chrysler compatible parts, not merely dealers.
We conclude therefore that the most relevant market is the market for all Chrysler compatible parts sold at retail level. The existence of monopoly power in the market is ordinarily inferred from the defendant’s predominant share of business in the market. Grinnell, 348 U.S. at 571, 86 S.Ct. at 1704. In an attempt to monopolize context, on the other hand, a plaintiff must show that Defendant possesses “market power that approaches monopoly power.” Richter, 691 F.2d at 826.
The most recent year for which complete statistics are available is 1985. In that year, American automobile owners spent a total of $57.7 billion on parts. Based on corresponding auto sales statistics, it is estimated that $6.2 billion (10.9% of the total) was spent on parts for Chrysler vehicles. The sales of “genuine” Chrysler parts, however, account for only 20.5% of the $6.2 billion spent by Chrysler owners. (The figures for previous years are similar, and show that Chrysler had slightly under a 20% market share.) See Rollins affidavit. Despite the fact that Chrysler was able to capture a lion’s share of its dealers orders for spare parts, close to 80% of Chrysler owners were willing and able to buy spare parts that did not come from Chrysler. Chrysler competitors in the parts trade, therefore, had the far greater part of the market, even with the difficulties that allegedly hindered competition for the business of dealers.
Such conduct is illegal (under Section 1) only if it is done in an agreement with others; or under Section 2, only if the actor is, or there is a dangerous probability the actor will become, a monopolist. The acts protects competition not competitors. Unilateral conduct that increases one’s market shares from 15.6% to 20.5% does not threaten competition, no matter how unpleasant it might be for those competitors at whose expense the increase is achieved.
Again, in discussing the “government market” or submarket advocated by plaintiffs with regard to the Section Two cause of action, the district judge properly concluded on the question of danger of monopolization from Chrysler that:
Even if the Court assumes that there does exist a separate relevant market for Chrysler compatible parts that conform to Government specifications, it is clear that Chrysler neither monopolizes nor does it pose a danger of monopolizing that market. For each of the years 1984 through 1986, the Government purchased between $16.7 million and $19.7 million worth of spare parts that Chrysler could have supplied, but Chrysler in fact supplied only 21% to 24% of these totals. See Spornhauer affidavit. In other words, the Government is only slightly more likely than the individual Chrysler owner to buy a “genuine” Chrysler part when it needs a Chrysler compatible part.
For whatever reason, Chrysler leaves over 60% of the business to competing suppliers of the relevant product. Of the remaining 40% of the government’s business for which it competes, competitors are able to capture about one-third. Hence, over 75% of the relevant market remains for Chrysler competitors. There is, therefore, no dangerous probability of Chrysler monopolizing this market. This conclusion is reinforced by the fact that Chrysler’s share of the government market is very stable, and may even be declining as a result of the government’s recent emphasis on price over “quality” pursuant to the Competition in Contracting Act.
The district judge in his opinion considered all the evidence submitted at trial and delivered a thorough and reasoned analysis before concluding that either a directed verdict or a judgment should be rendered for Chrysler. I, therefore, affirm for the reasons stated by the district court. Judge Krupansky has further set out a *912sound basis for affirmance in which I concur.