Court Opinion

ID: 72555
Source: CourtListenerOpinion
Date Created: 2010-04-26 07:34:26+00
Date Added: 2024-06-11T09:39:21.638615
License: Public Domain

PUBLISH

              IN THE UNITED STATES COURT OF APPEALS

                    FOR THE ELEVENTH CIRCUIT

                         _______________

                           No. 97-6206
                         _______________
                D. C. Docket No. CV 94-H-1361-NE

COLSA CORPORATION, a corporation organized
and existing under the laws of Delaware with its
principle place of business within the State
of Alabama,

                                               Plaintiff-Counter-
                                               Defendant-Appellant,

                             versus

MARTIN MARIETTA SERVICES, INC., a corporation
organized and existing under the laws of the State
of Delaware with its principle place of business
within the State of Maryland,

                                               Defendant-Counter-
                                               Claimant-Appellee.

                 ______________________________

          Appeal from the United States District Court
              for the Northern District of Alabama
                 ______________________________

                       (January 23, 1998)

Before BIRCH, Circuit Judge, HILL and KRAVITCH, Senior Circuit
Judges.
PER CURIAM:

     Plaintiff Colsa Corporation (“Colsa”) appeals the district

court’s grant of summary judgment for Martin Marietta (“Martin

Marietta”) on Colsa’s antitrust claims. We AFFIRM.

                       I. BACKGROUND

     At issue in this case is a government contract to provide

“operation and maintenance” services to the United States Navy

in support of the Atlantic Fleet Weapons Training Facility located

in Roosevelt Roads, Puerto Rico (the Contract). For many years,

Martin Marietta, or one of its predecessors in interest,1 had been

awarded the Contract. In March 1990, Martin Marietta and Colsa

entered a “Teaming Agreement,” which provided that Colsa would

assist Martin Marietta to obtain the Contract and then Colsa would

support Martin Marietta by providing software services under the

Contract.   This support was contingent, however, on Martin

Marietta being awarded the Contract.

     1
      To  avoid   confusion,   “Martin   Marietta”   includes   its
predecessors in interest.

                                2
     On April 15, 1991, Martin Marietta was awarded the Contract

for a base period of six months, with four one-year options

exercisable by the government.       On May 15, 1991, Martin

Marietta entered into a fixed price subcontract with Colsa whereby

Colsa agreed to provide a limited number of personnel to support

Martin Marietta in performing the Contract.

     The government exercised subsequent options on the first of

October 1991, 1992, and 1993.        On each occasion, Martin

Marietta entered into a subcontract with Colsa; Colsa served as

the subcontractor for Martin Marietta until June 1994.       The

Contract was scheduled to be re-solicited and awarded in 1995.

     In February 1994, Colsa entered into a teaming agreement

with Raytheon, a competitor of Martin Marietta, concerning the

next procurement of the Contract. Martin Marietta learned about

Colsa’s new agreement with a competitor and began to consider

Colsa to be a competitive threat. In May 1994, Martin Marietta

provided Colsa with notice that it was terminating the subcontract

                                3
with Colsa, effective June 12, 1994 (prior to the end of the third

option period).2 That the termination of the subcontract was not

related to performance problems by Colsa is undisputed. Martin

Marietta did not enter into a subcontract for the fourth option

period (beginning in October 1994). The government announced

the rebidding of the Contract in October 1994. In October 1996,

the new Contract was awarded to ITT.

     On June 7, 1994, Colsa filed this action against Martin

Marietta for violations of Section 2 of the Sherman Act due to anti-

competitive conduct in the termination of the subcontract. Colsa

specifically contends that Martin Marietta sought to create or to

maintain a monopoly through illegal competitive conduct. The

     2
      Colsa, however, contends that prior to October 1993, Martin
Marietta knew that it would not reteam with Colsa and sought to
reteam with a competitor -- Tower Systems.       Colsa claims that
Martin Marietta secretly concealed this intention in order to
string Colsa along until it was too late for it to re-team with
another competitor for the rebid process.      As a result, Colsa
argues that it had to forgo discussions about reteaming with ITT or
Loral between September and December 1993, as it was waiting to
hear from Martin Marietta.       Martin Marietta claims that it
terminated the subcontract with Colsa because it teamed with
Raytheon in February 1994, thereby making it a competitive threat.

                                 4
district court granted summary judgment in favor of Martin

Marietta on the antitrust claim because Colsa failed to show that

Martin Marietta had market power in the relevant market, a

prerequisite to a monopolization claim.3 Colsa appeals.

     3
      Neither party, nor the court below, addresses the issue of
whether Martin Marietta has market power. Instead, they focus on
the definition of “relevant market,” which can affect whether a
party has market power. Colsa contended that the relevant market
in this case is the Contract alone.     On the other hand, Martin
Marietta argued that the relevant market extended far beyond the
one Contract at issue here, and included other operation and
maintenance contracts performed elsewhere.      The district court
found that Colsa failed to define adequately the relevant market
which, in turn, apparently prevented a finding that Martin Marietta
had sufficient market power to sustain an antitrust claim.

                                5
                         II. DISCUSSION4

     The issue on appeal is whether the district court erred by

granting summary judgment for Martin Marietta after concluding

that Colsa failed to define properly the relevant market. Summary

judgment orders are reviewed de novo. Scala v. City of Winter

Park, 116 F.3d 1396, 1398 (11th Cir. 1997). Summary judgment

is appropriate if, after viewing all the evidence in favor of the non-

moving party, there is no genuine issue on any material fact.

Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322,

106 S. Ct. 2548, 2552, 91 L. Ed. 2d 265 (1986); Adickes v. S.H.

     4
      As a preliminary matter, we disagree with Colsa’s contention
that merely because the definition of “relevant market” is a
factual question, summary judgment is inappropriate.       Summary
judgment is clearly available even for factual issues.         See
American Key Corp. v. Cole Nat’l Corp., 762 F.2d 1569, 1579 (11th
Cir. 1985).     Further, the fact that two witnesses provided
testimony, in favor of Colsa, regarding the relevant market cannot
preclude summary judgment. Colsa states that its witnesses were
experts in government procurement -- not federal antitrust law.
The issue in this case, however, is the definition of “relevant
market” -- an antitrust term as defined by antitrust law.
Therefore, the witnesses could offer nothing more than lay opinion
testimony.   We have stated that “[c]onstruction of a relevant
economic market or a showing of monopoly power in that market
cannot . . . be based upon lay opinion testimony.” Id.

                                  6
Kress & Co., 398 U.S. 144, 157, 90 S. Ct. 1598, 1608, 26 L. Ed.
2d 142 (1970).

     The district court determined that Colsa improperly defined

the relevant market and granted summary judgment for Martin

Marietta based on that conclusion. While we agree that summary

judgment was appropriate, we do so on a different basis.5 As

stated, Colsa’s argument does not show how Martin Marietta’s

conduct was anticompetitive so as to support an antitrust claim.

     The Contract at issue in this case has two aspects: (1)

service of the Contract and (2) procurement of the Contract.

Colsa expressly states that the alleged antitrust violation is Martin

Marietta’s “termination of [Colsa’s] subcontract in June 1994.”

Colsa asserts that this was predatory conduct intended to

“eliminat[e Colsa] as a competitor in violation of Section 2 of the

Sherman Act.” In addition, Colsa contends that the only relevant

     5
      "[T]his court may affirm the district court where the
judgment entered is correct on any legal ground regardless of the
grounds addressed, adopted or rejected by the district court.”
Bonanni Ship Supply, Inc. v. United States, 959 F.2d 1558, 1561
(11th Cir. 1992) (citing cases).

                                 7
time is the one that covers the termination of the subcontract and

specifically rejects the district court’s analysis of the case from the

standpoint of the Contract procurement.6

     In other words, Colsa appears only to argue that Martin

Marietta, by terminating Colsa’s subcontract for services, engaged

in anticompetitive conduct during the service of the Contract.7 We

fail to see how this conduct can be characterized as

anticompetitive for several reasons. First, Colsa cannot claim that

     6
      This is presumably the result of the fact that neither Colsa
nor Martin Marietta was awarded the Contract during the subsequent
procurement, thereby making the claim that Martin Marietta had
sufficient market power to monopolize the procurement process
difficult to maintain.
     7
      As a result, the cases cited by Colsa in support of its
argument are inapplicable for several reasons. First, the cases
are not controlling authority.     Second, two of the cases cited
involve claims of anticompetitive conduct during the procurement
process. See National Reporting Co. v. Alderson Reporting Co., 763
F.2d 1020 (8th Cir. 1985); F. Buddie Contracting, Inc. v.
Seawright, 595 F. Supp. 422 (N.D. Ohio 1984). Colsa does not make
such a claim in this case. Simply because those cases involved
public contracts, does not make them relevant. Third, the other
case cited by Colsa involved a joint venture contract -- as opposed
to a subcontract -- whereby each party was awarded the government
contract, albeit through a joint entity. See Tower Air, Inc. v.
Federal Express Corp., 956 F. Supp 270 (E.D.N.Y. 1996). This case
is completely different. Martin Marietta alone -- and not a single
entity comprised of Colsa and Martin Marietta -- was awarded the
contract. The fact that the subcontract was labeled a “Teaming
Agreement” did not create a joint venture relationship giving each
party some right to the public contract.

                                  8
Martin Marietta monopolized -- or attempted to monopolize -- its

own contract by terminating a subcontract. All contracts involve,

in some sense, a monopoly over the performance of the contract,

which is necessarily controlled by the parties to the contract. It is

not anticompetitive for Martin Marietta (a party to the Contract) to

exclude Colsa (a non-party to the Contract) from performing

services under the Contract. Any rights that Colsa may have

against Martin Marietta sound in contract instead of antitrust law.8

     For these reasons, we find that the district court did not err

by granting summary judgment for Martin Marietta. Colsa has

failed to allege anticompetitive conduct upon which an antitrust

claim could be predicated.

     AFFIRMED.

     8
      In fact, this case seems to involve nothing more than a
breach of contract claim.    The alleged improper conduct is the
termination of a subcontract. Further, the injury alleged by Colsa
is damage “to its business interests in the amount of $1,485,189
which represents the amount remaining to be paid under its current
fixed price contract and the amount negotiated under the remaining
option.”   The remedy sought appears to involve purely contract
damages.

                                 9