Court Opinion

ID: 2964326
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Date Created: 2015-09-21 21:24:02.221439+00
Date Added: 2024-06-11T15:01:41.376463
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USCA1 Opinion

	

          October 11, 1996
                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT

                                                       
                               ________________________

          No. 96-1113

                    BORSCHOW HOSPITAL AND MEDICAL SUPPLIES, INC.,
                                Plaintiff - Appellant,

                                          v.

                            CESAR CASTILLO, INC., ET AL.,
                               Defendants - Appellees.

                                                       
                               ________________________

                                     ERRATA SHEET
                                     ERRATA SHEET

               The  opinion of this court  issued on September  23, 1996 is
          corrected as follows:

               On page 3, line 9, change Borschow to Becton Dickinson.

                            UNITED STATES COURT OF APPEALS
                                FOR THE FIRST CIRCUIT
                                 ____________________

          No. 96-1113

                    BORSCHOW HOSPITAL AND MEDICAL SUPPLIES, INC.,
                                Plaintiff - Appellant,

                                          v.

                             CESAR CASTILLO INC., ET AL.,
                               Defendants - Appellees.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                           FOR THE DISTRICT OF PUERTO RICO

                   [Hon. Salvador E. Casellas, U.S. District Judge]
                                               ___________________

                                 ____________________

                                        Before

                                Selya, Circuit Judge,
                                       _____________
                        Torres* and Saris,** District Judges.
                                             _______________

                                _____________________

               Fernando L. Gallardo,  with whom Harry E. Woods, Geoffrey M.
               ____________________             ______________  ___________
          Woods, Woods & Woods  and Carlos R. Iguina-Charriz were  on brief
          _____  _____________      ________________________
          for appellant.
               Donald R. Ware, with whom Richard M. Brunell and Foley, Hoag
               ______________            __________________     ___________
          & Eliot were on brief for appellee Becton Dickinson and Company.
          _______
               Edilberto  Berr os-P rez  and  Luis   Fern ndez-Ram rez  for
               ________________________       ________________________
          appellees C sar Castillo, Inc.,  Umeco, Inc., Jos  Luis Castillo,
          Ivonne Belaval  de Castillo, C sar Castillo,  Jr., Aracelis Ortiz
          de Castillo and Mar a Isabel Gonz lez.

                                 ____________________

                                  September 23, 1996
                              
          ____________________

          *  Of the District of Rhode Island, sitting by designation.

          **  Of the District of Massachusetts, sitting by designation.

                                         -2-

                                 ____________________

                                         -3-

                    SARIS,  District  Judge.   Plaintiff-Appellant Borschow
                    SARIS,  District  Judge.
                            _______________

          Hospital  & Medical Supplies, Inc. is a  distributor of a line of

          medical  and surgical  products  supplied by  Defendant-Appellee,

          Becton Dickinson and Company,   in Puerto Rico.   Borschow claims

          that  Becton Dickinson violated  the Puerto Rico  Dealers Act, 10

          L.P.R.A.    278,  also commonly  known as  "Law 75,"  by granting

          additional  distributorships  in   violation  of  its   allegedly

          exclusive    Distributorship    Agreement.1       Although    the

          Distributorship  Agreement  contained  a   clear  non-exclusivity

          provision  and  integration clause,  Borschow  contends  that the

          district court erred under Puerto Rico's parol evidence rule when

          it  excluded an  unsigned  written memorandum  sent prior  to the

          signing of the  agreement as evidence  that the parties  actually

          intended the distributorship to be exclusive.  

                    Borschow also  claims that Becton Dickinson  engaged in

          an  unlawful tying arrangement in  violation of Section  1 of the

          Sherman  Act,  15 U.S.C.    1,  by  threatening to  discontinue a

          supply  of a  line of  its products  (the tying  products) unless

          Borschow  also carried  its syringe line  (the tied  product) and

          dropped that of a competitor.  

                              
          ____________________

          1   The additional  distributorships were granted  to Defendants-
          Appellees  Cesar Castillo, Inc.  and UMECO,  Inc., which  filed a
          separate brief.   At oral argument,  Becton Dickinson argued  for
          the Appellees as a group.   Where we refer to Becton Dickinson in
          the course  of this opinion, we  mean our statements to  apply to
          Appellees  as   a   group  except   where  otherwise   indicated.
          Similarly, to avoid confusion where referring to the testimony of
          Jonathan  Borschow, Borschow's president, we will refer to him as
          Mr. Borschow and to the company simply as Borschow.

                                         -2-

                    The district court granted summary judgment for Becton

          Dickinson on both claims.  We affirm.

                              I.  STATEMENT OF THE CASE
                              I.  STATEMENT OF THE CASE

                    A. Facts
                    A. Facts

                    Reviewing  the   factual  record  in   the  light  most

          favorable to the nonmoving party, as we must at summary judgment,

          see  Mesnick v.  General Elec. Co.,  950 F.2d 816,  822 (1st Cir.
          ___  _______     _________________

          1991),  cert. denied, 504 U.S. 985 (1992), we treat the following
                  ____________

          facts  as controlling,  noting,  however,  that Bectin  Dickinson

          disputes many aspects of this account.

                    A major  supplier of  medical products in  Puerto Rico,

          Borschow contracted with Parke Davis & Company ("Parke Davis") on

          May 1, 1985 to distribute a line of medical and surgical products

          manufactured  by  its  subsidiary,  Deseret  Medical,  Inc.  (the

          "Deseret Line").  In  mid-1986, Becton Dickinson acquired Deseret

          and  assumed  Parke  Davis' obligations  under  the  distribution

          agreement as  an assignee.   This dispute turns in  large part on

          the content of that agreement.

                    The  distribution  agreement executed  by  Borschow and

          Parke  Davis ["Distribution Agreement"],  includes two provisions

          of  interest here.  First, it provides that "Company [i.e., Parke

          Davis]  hereby  appoints  Distributor [i.e.,  Borschow]  and  the

          Distributor   hereby  accepts   appointment,  as   the  Company's

          nonexclusive independent distributor of the  Products for Regular
          ____________

          Business  in the Territory [i.e., Puerto Rico] during the term of

          this  Agreement."    Distribution  Agreement,     2.1.2 (emphasis

                                         -3-
                                          3

          added).  Second, the  contract included the following integration

          clause:

                    Integration:   The terms and  provisions contained
                    ___________
                    in   this   Agreement,  including   all  Schedules
                    attached hereto and  Company's Standard Terms  and
                    Conditions of  Sale in effect, from  time to time,
                    constitute the  entire agreement and  is the final
                    expression  of intent between the Parties relating
                    to  the subject  matter hereof and  supersede, all
                    previous      communications,     representations,
                    agreements,  and  understandings,  either oral  or
                    written,  between the Parties  with respect to the
                    subject  matter   thereof.     No   agreement   or
                    understanding varying or extending  this Agreement
                    will be binding upon either Party hereto unless in
                    writing,  wherein  this Agreement  is specifically
                    referred  to,  and   signed  by  duly   authorized
                    officers  or  representatives  of  the  respective
                    Parties. 

          Id.    9.10.  Borschow's president,  Jonathan Borschow, initially
          ___

          refused  to sign  any  contract that  included a  non-exclusivity

          provision.   However, in  negotiations prior to  execution of the

          Distribution  Agreement,  Robert  Vallance,   Deseret's  Regional

          Director for Canada/Latin America,  assured Mr. Borschow that his

          distributorship would  be exclusive.  Vallance  promised him that

          he would receive a letter from Parke Davis promising exclusivity.

          When  that letter  was not  forthcoming, Mr.  Borschow telephoned

          Vallance  and  inquired  about  the delay.    Vallance  told  Mr.

          Borschow  that  the  people  in "Morris  Plains,"  the  corporate

          headquarters of Warner Lambert, Parke Davis' parent company, were

          considering the matter.

                    After that conversation, Mr. Borschow  received a draft

          of the Distribution Agreement, which included the non-exclusivity

          term.   He  again  objected to  Vallance  but was  told  that the

                                         -4-
                                          4

          "contract cannot, it  will not be changed.   The people in Morris

          Plains  will not  countenance it."   However,  Vallance reassured

          Mr. Borschow that he would send a document that would outline the

          "true" basis for their business relationship, including a promise

          that Borschow's distributorship would be exclusive.  

                    Within a matter of  days, Mr. Borschow received a  two-

          page undated and  unsigned outline.   The outline specifies  that

          one  of the supplier's obligations is to "sell exclusively to the

          DISTRIBUTOR  and refrain  from selling  to other  DISTRIBUTORS or

          clients in the  territory while the AGREEMENT is in effect."  The

          outline neither  explicitly mentions Mr. Borschow  or Parke Davis

          nor  refers  to  the  May  1  Distribution  Agreement.   Borschow

          testified   that   he   executed   the   Distribution   Agreement

          approximately two weeks after he received the outline.2 

                    From the  execution of the  agreement in 1985  to 1986,

          Borschow  remained  Parke  Davis' exclusive  distributor  of  the

          Deseret line.   After Becton Dickinson's acquisition of   Deseret

          in  mid-1986, no  changes  were made  in  the relationship  until

          November 1989, when Becton Dickinson granted distributorships  to

          UMECO, Inc.  and C sar Castillo, Inc.

                    Moreover, according to Borschow and his salespeople, at

          approximately the same time that the additional distributors were

                              
          ____________________

          2     At  Mr.  Borschow's  deposition,  the  parties  marked  the
          Distribution Agreement as BDX-1 and the undated outline as BDX-3,
          and throughout its  brief Appellant  refers to  the documents  by
          those numbers.  To avoid confusion, however, the Court will refer
          to BDX-1 and BDX-3 as the Distribution Agreement and the Outline,
          respectively.

                                         -5-
                                          5

          established  in November  1989,  Becton  Dickinson demanded  that

          Borschow cease  distributing the Monoject Syringe  & Needle Line,

          made by  a Becton Dickinson  competitor, and  begin carrying  the

          Becton Dickinson syringe line.   Becton Dickinson also threatened

          that if  Borschow did not meet this demand, it would no longer be

          supplied with  the Deseret line.   However, Becton  Dickinson did

          not carry through on  this threat.  Although Borschow  refused to

          drop  Monoject,  Becton  Dickinson continued  to  supply  Deseret

          products to Borschow.

                    B. Proceedings Below
                    B. Proceedings Below

                    Borschow  brought an action  in federal  district court

          for the District  of Puerto  Rico on February  6, 1990,  alleging

          that  Becton  Dickinson's termination  of  Borschow's "exclusive"

          distributorship  violated Law  75  and  that  Becton  Dickinson's

          threat to tie the  Deseret line to its syringe  line violated the

          Sherman Act.   Borschow also alleged  a conspiracy with  Castillo

          and  UMECO in  restraint of  trade and  attempted monopolization.

          Federal  jurisdiction  was invoked  on  the  basis of  a  federal

          question and diversity of citizenship.

                    On September  24, 1990,  the  district court  permitted

          discovery limited to the threshold issue as to whether Borschow's

          distributorship  was  exclusive.   On  January  15, 1991,  Becton

          Dickinson moved for summary judgment, asserting that taking these

          facts  in the light most favorable to Plaintiff,  Borschow cannot

          evade  the  effect of  its  written contract  providing  for non-

          exclusivity.  If Borschow's contract was non-exclusive, according

                                         -6-
                                          6

          to Becton Dickinson,  the Law 75 claim fails as  a matter of law.

          In  addition,  Becton  Dickinson  argued  that  the  outline  was

          extrinsic evidence of the  contracting parties' intent that could

          not be considered  on summary judgment  because of Puerto  Rico's

          parol evidence rule.  

                    The  motion was  referred  to a  magistrate judge,  who

          issued a  report and  recommendation denying summary  judgment on

          the  ground that  the extrinsic  evidence  raised issues  of fact

          regarding whether  the agreement  provided for exclusivity.   The

          district  court  (Acosta, J.)  initially  adopted  the magistrate

          judge's  recommendation  without comment,  but  on  a motion  for

          reconsideration, the court (Casellas, J.) granted partial summary

          judgment  for  Becton Dickinson.3    The court  held  that Puerto

          Rico's parol  evidence rule  barred consideration of  the outline

          and that the contract  unambiguously provided for a non-exclusive

          distributorship.   Borschow  Hosp.  & Medical  Supplies, Inc.  v.
                             __________________________________________

          C sar Castillo, Inc., 882 F. Supp. 236, 239-40 (D.P.R. 1995).  In
          ____________________

          a subsequent  order, the  court granted partial  summary judgment

          for  Becton  Dickinson on  the antitrust  claims  due to  lack of

          evidence of  tying,  anticompetitive  injury  or  conspiracy  and

          dismissed the pendent state law claims.  Borschow timely appealed

          the judgment. 

                                    II. DISCUSSION
                                    II. DISCUSSION

                    A. Standard of Review
                    A. Standard of Review

                              
          ____________________

          3   Judge  Acosta  took  senior  status  before  the  motion  for
          reconsideration, and the case was reassigned to Judge Casellas. 

                                         -7-
                                          7

                    We review a district  court's grant of summary judgment

          de  novo.  Werme  v. Merrill, 84  F.3d 479, 482  (1st Cir. 1996).
          ________   _____     _______

          The standard  is well-rehearsed and familiar.   "Summary judgment

          is  appropriate  when  'the  pleadings,  depositions, answers  to

          interrogatories,  and  admissions  on  file,  together  with  the

          affidavits, if any, show that there is no genuine issue as to any

          material fact and that  the moving party is entitled  to judgment

          as a  matter of law.'"   Barbour  v. Dynamics Research  Corp., 63
                                   _______     ________________________

          F.3d  32, 36  (1st Cir. 1995)  (quoting Fed.  R. Civ.  P. 56(c)),

          cert. denied, __ U.S. __, 116 S. Ct. 914 (1996).   "In operation,
          ____________

          summary  judgment's role  is  to pierce  the  boilerplate of  the

          pleadings  and assay  the  parties' proof  in order  to determine

          whether trial is actually required."  Wynne v. Tufts Univ. School
                                                _____    __________________

          of Medicine, 976 F.2d 791, 794 (1st Cir. 1992), cert. denied, 507
          ___________                                     ____________

          U.S. 1030 (1993).   "To succeed, the moving party  must show that

          there  is an absence of evidence to support the nonmoving party's

          position."   Rogers v. Fair,  902 F.2d 140, 143  (1st Cir. 1990);
                       ______    ____

          see also Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).
          ________ _____________    _______

                    "Once  the  moving  party  has  properly  supported its

          motion for summary judgment, the  burden shifts to the non-moving

          party, who 'may  not rest on mere  allegations or denials  of his

          pleading,  but must set forth  specific facts showing  there is a

          genuine  issue  for trial.'"   Barbour,  63  F.3d at  37 (quoting
                                         _______

          Anderson  v. Liberty  Lobby,  Inc., 477  U.S.  242, 256  (1986)).
          ________     _____________________

          "There must be 'sufficient  evidence favoring the nonmoving party

          for a jury to  return a verdict for that party.   If the evidence

                                         -8-
                                          8

          is merely  colorable or  is not significantly  probative, summary

          judgment  may be  granted.'"   Rogers, 902  F.2d at  143 (quoting
                                         ______

          Anderson, 477 U.S. at 249-50) (citations and footnote in Anderson
          ________                                                 ________

          omitted).  We "view the facts in the light most  favorable to the

          non-moving  party,  drawing  all  reasonable  inferences  in that

          party's favor."  Barbour, 63 F.3d at 36.
                           _______

                    B. The Law 75 Claim  
                    B. The Law 75 Claim  

                    "The  legislature  of Puerto  Rico  enacted  Law 75  to

          protect distributors, agents, concessionaires and representatives

          of  a  product  or  service  in   Puerto  Rico.  .  .  .   [M]ore

          specifically, Law 75 was intended to protect dealers who built up

          a  market,   from  suppliers   who  wish  to   appropriate  their

          established clientele."   Medina & Medina v. Country Pride Foods,
                                    _______________    ____________________

          Ltd.,  825 F.2d 1, 2  (1st Cir.  1987).   "Law 75  provides that,
          ____

          notwithstanding the  existence in a dealer's contract of a clause

          reserving to the  parties the unilateral  right to terminate  the

          existing relationship,  no principal  or grantor may  directly or

          indirectly  perform  any  act  detrimental  to   the  established

          relationship  or  refuse to  renew  said contract  on  its normal

          expiration, except for just cause."   General Office Prods. Corp.
                                                ___________________________

          v.  Gussco Mfg. Inc., 666 F. Supp. 328, 328 (D.P.R. 1987) (citing
              ________________

          10 L.P.R.A.   278(a)).

                    Law 75 has proved fertile ground for litigation, and we

          recently  have  had  occasion  to  consider  its  application  to

          circumstances analogous to those  presented here.  Although "non-

          exclusive distributors are entitled  to protection under Law 75,"

                                         -9-
                                          9

          Vulcan Tools of Puerto Rico v. Makita U.S.A., Inc., 23 F.3d  564,
          ___________________________    ___________________

          569 (1st Cir. 1994), "[i]t is equally true . . . that Law 75 does

          not operate to convert non-exclusive  distribution contracts into

          exclusive distribution  contracts."   Id. (citing Gussco,  666 F.
                                                ___         ______

          Supp. at  331).  As  we said  in Vulcan Tools,  "the 'established
                                           ____________

          relationship'  between dealer  and  principal is  bounded by  the

          distribution  agreement, and  therefore  the  Act  only  protects

          against  detriments to  contractually acquired  rights."   Id. at
                                                                     ___

          569.  

                    This  case turns  on whether  Borschow and  Parke Davis

          (now   Becton  Dickinson)  contracted   for  a  non-exclusive  or

          exclusive  distributorship.    If  the  former,  Borschow  cannot

          prevail  on its claim that Law 75 prohibits Becton Dickinson from

          supplying Deseret  medical products  to other distributors.   See
                                                                        ___

          Vulcan Tools,  23 F.3d at  569 (Law 75  did not prevent  supplier
          ____________

          from  establishing additional  distributorships  in  Puerto  Rico

          where  non-exclusive  distributor was  already operating  even if

          existing distributor  suffered  economic harm  as  result);  Nike
                                                                       ____

          Int'l  Ltd. v. Athletic Sales,  Inc., 689 F.  Supp. 1235, 1238-39
          ___________    _____________________

          (D.P.R.  1988) (where  distributorship contract between  Nike and

          distributor provided  for notice of renewal  from distributor and

          distributor failed to  provide such  notice, Law 75  did not  bar

          termination of distributorship contract).

                    As a civil law jurisdiction, Puerto Rico eschews common

          law principles of  contract interpretation  in favor  of its  own

          civil  code  derived from  Spanish law.    See Guevara  v. Dorsey
                                                     ___ _______     ______

                                         -10-
                                          10

          Labs., Div. of Sandoz,  Inc., 845 F.2d  364, 366 (1st Cir.  1988)
          ____________________________

          ("The Supreme Court of Puerto Rico has made clear that the common

          law of the United States is not controlling  when filling gaps in

          the  civil law system."); Gussco, 666 F.  Supp. at 332.  Thus, we
                                    ______

          turn  to Civil Code Article 1233, which "determines the manner in

          which courts should interpret  contracts under dispute as to  the

          meaning  of  their terms."    Hopgood v.  Merrill  Lynch, Pierce,
                                        _______     _______________________

          Fenner &  Smith, 839 F.  Supp. 98,  104 (D.P.R. 1993),  aff'd, 36
          _______________                                         _____

          F.3d 1089 (1st Cir. 1994) (table).  Article 1233 provides:

                    If  the terms  of  a contract  are clear  and
                    leave no  doubt as  to the intentions  of the
                    contracting parties, the literal sense of its
                    stipulations shall be observed.

                    If the  words should  appear contrary  to the
                    evident intention of the contracting parties,
                    the intention shall prevail.

          31 L.P.R.A.   3471 (1991).  "Under Puerto Rican law, an agreement

          is 'clear' when it can 'be understood in one sense alone, without

          leaving  any  room  for  doubt, controversies  or  difference  of

          interpretation. . . .'"  Executive Leasing Corp. v. Banco Popular
                                   _______________________    _____________

          de Puerto Rico,  48 F.3d  66, 69 (1st  Cir.) (quoting Catullo  v.
          ______________                                        _______

          Metzner, 834 F.2d 1075, 1079 (1st Cir. 1987)) (internal quotation
          _______

          marks omitted), cert. denied, __ U.S. __, 116  S. Ct. 171 (1995);
                          ____________

          see also Heirs  of Ram rez v. Superior Court, 81  P.R.R. 347, 351
          ________ _________________    ______________

          (1959).

                    Citing the  Puerto Rico  Supreme Court in  Marina Ind.,
                                                               ____________

          Inc. v. Brown Boveri Corp., 114 P.R. Dec. 64, 72 (1983) (official
          ____    __________________

          translation), several courts have  interpreted Article 1233 to be

          "strict in  its mandate  that courts  should enforce the  literal

                                         -11-
                                          11

          sense  of  a  written  contract,  unless  the  words  are somehow

          contrary to the intent of the parties."  Hopgood, 839 F. Supp. at
                                                   _______

          104;  see also Vulcan  Tools, 23 F.3d at  567 ("When an agreement
                ________ _____________

          leaves no  doubt as  to the  intention  of the  parties, a  court

          should not look beyond the literal terms of the contract.").

                    This  interpretation of Article 1233 is complemented by

          Puerto Rico's parol evidence  rule, P.R. Laws Ann. tit.  32, App.

          IV, R. 69(B) (1983) ("Rule 69(B)"), which provides:

                    When in an oral  or written agreement, either
                    public   or  private,   all  the   terms  and
                    conditions  constituting  the true  and final
                    intention of the  parties have been included,
                    such  agreement shall be  deemed as complete,
                    and  therefore,  there  can  be  between  the
                    parties,  or  successors   in  interest,   no
                    evidence extrinsic  to  the contents  of  the
                    same, except in the following cases:
                    (1) Where a  mistake or  imperfection of  the
                    agreement is put in issue by the pleadings;
                    (2)  Where the validity  of the  agreement is
                    the fact in dispute.
                    This rule does not exclude other evidence  of
                    the circumstances under  which the  agreement
                    was made  or to which  it is related  such as
                    the situation of  the subject  matter of  the
                    instrument  or  that  of the  parties,  or to
                    establish illegality or fraud.

          We  have interpreted  this rule  in tandem  with Article  1233 to

          require courts "to ignore [parol] evidence 'when the agreement 

          . . .  is clear and unambiguous.'"  Mercado-Garc a  v. Ponce Fed.
                                              ______________     __________

          Bank, 979 F.2d  890, 894  (1st Cir. 1992)  (quoting Catullo,  834
          ____                                                _______

          F.2d at 1079).

                    Recently,  we  have  held  that  these  provisions  bar

          consideration of  extrinsic evidence to vary  the express, clear,

          and  unambiguous  terms of  a  contract.   See  Executive Leasing
                                                     ___  _________________

                                         -12-
                                          12

          Corp., 48  F.3d at  69-70  (refusing to  consider parol  evidence
          _____

          regarding implied loan term  barring leasing company from dealing

          with  other banks where contract did  not include restriction but

          did  include clear integration clause);  Vulcan Tools, 23 F.3d at
                                                   ____________

          564-68  (where  contractual  term  providing  for "non-exclusive"

          distributorship was clear and  unambiguous, there was no need  to

          consider  extrinsic  evidence  of  promise  to  limit  number  of

          distributors even  absent contractual  integration clause);   see
                                                                        ___

          also  Hopgood,  839  F.  Supp.   at  103-05  (holding  that  term
          ____  _______

          "indefinite"   used  in  employment  contract  clearly  signified

          employment at  will and  refusing to  consider parol  evidence of

          implied guarantee of three-year minimum employment).

                    This line of cases  effectively parries the main thrust

          of  Borschow's appeal.   The  Distribution Agreement  clearly and

          unambiguously gives Borschow  a "non-exclusive"  distributorship.

          The integration clause, specifying  that the terms and provisions

          of this Distribution Agreement constitute  the "entire agreement"

          and "the final expression of intent," nullifies any other oral or

          written understandings  reached between the  parties.   Crediting

          Mr. Borschow's  testimony  that  he  received  the  outline  from

          Vallance promising  an exclusive  distributorship, as we  must on

          summary judgment,  we hold  that the integration  clause rendered

          inoperative  any  such side-agreement,  and  we  are barred  from

          considering the extrinsic evidence by Rule 69(B).

                    Borschow attempts  to evade the effect  of this settled

          precedent  by   arguing  that  the   entire  agreement,  properly

                                         -13-
                                          13

          construed,  includes  both  the Distribution  Agreement  and  the

          Outline.   Because  the documents  contain mutually  inconsistent

          terms, Borschow contends that Article 1233 of Puerto Rico's Civil

          Code permits  liberal consideration  of extrinsic evidence  as to

          the  parties' intent to  resolve contractual ambiguity.   To some

          extent, Borschow's  reliance on  this Civil Code  principle finds

          some support  in Puerto Rico case  law.  The  Puerto Rico Supreme

          Court has held that:

                    The intention of the parties is the essential
                    test provided  in the  Civil Code to  fix the
                    scope  of contractual obligations.  This test
                    of   intention  is   so   essential  in   the
                    interpretation  of  contracts  that the  Code
                    proclaims its supremacy in providing that the
                    evident  intention  of   the  parties   shall
                    prevail over the words, even where the latter
                    would appear contrary to  the intention . . .
                    .

          Merle v. West  Bend, 97 P.R.R.  392, 399 (1969).   However,  that
          _____    __________

          court subsequently  clarified that  "[t]he strict mandate  of the

          cited art. 1233 obliges us to abide by the literal meaning of the

          terms of the contract when, as in the present case, they leave no

          doubt  as to the  intention of  the contracting  parties." Marina
                                                                     ______

          Ind.  Inc. v.  Brown  Boveri  Corp.,  114  P.R.  Dec.  64  (1983)
          __________     ____________________

          (official translation).

                    In rejecting essentially the  same argument now made by

          Borschow, we applied this principle in  Executive Leasing Corp.:
                                                  _______________________

                    The  plaintiffs concede the loan agreement is
                    clear.  They argue, however, that the written
                    agreement   was  not   in  fact   the  entire
                    agreement,   and   that   we  must   consider
                    extrinsic  evidence  of  the parties'  intent
                    with  respect to  integration. .  . .  Yet to
                    consider extrinsic evidence at all, the court

                                         -14-
                                          14

                    must  first find  the relevant  terms of  the
                    agreement  unclear.    That  requirement  not
                    being met, the district court  correctly went
                    no further.

          48  F.3d at 69 (excluding extrinsic evidence of exclusive dealing

          condition and  of "actual practice" of  parties); accord Hopgood,
                                                            ______ _______

          839 F. Supp.  at 106  (explaining that Marina  and Merle  support
                                                 ______      _____

          principle that under Article 1233 the clear terms of the contract

          are  the "embodiment of the indisputable intent of the parties as

          they entered into the contract").

                    For the third time,  we mean what we say,  and say what

          we  mean:    extrinsic   evidence  of  the  parties'  intent   is

          inadmissible in the face of a clear and unambiguous contract term

          under Puerto  Rico Law.   Because Borschow's  distributorship was

          non-exclusive as  a matter  of law,  the district  court properly

          granted summary judgment for Appellees on the Law 75 claim.4 

                    C. Antitrust Claim -- Tying Arrangement
                    C. Antitrust Claim -- Tying Arrangement

                    Asserting  a per  se  violation of  Section One  of the
                                 _______

          Sherman Act,  Borschow  contends that Becton Dickinson threatened

          to withhold sale of its patented Deseret line of medical products

          (the tying product) unless  Borschow dropped the Monoject product

                              
          ____________________

          4   While the Puerto  Rico parol evidence  rule permits extrinsic
          evidence to establish fraud, Borschow does not allege that it was
          fraudulently  induced  into signing  the  Distribution Agreement.
          Nor  is  a  claim  of  equitable  estoppel  properly  before  us.
          Borschow  contends  for the  first  time  on appeal  that  Becton
          Dickinson should be  estopped from  denying the  existence of  an
          exclusive contract because of the conduct of its agent, Vallance.
          As this  argument was not  made below, it  is waived.   Executive
                                                                  _________
          Leasing Corp., 48 F.3d at 70. 
          _____________

                                         -15-
                                          15

          and  carried instead  its own syringe  line (the  tied product).5

          Contending  that this is "the case of  the tie that didn't bind,"

          Becton Dickinson  argues that a  threat alone is  insufficient to

          constitute an illegal tying arrangement.  We agree.   

                    "Section 1 of the Sherman  Act prohibits a seller  from

          'tying'  the sale  of  one product  to the  purchase of  a second

          product if the seller thereby avoids competition on the merits of

          the 'tied' product.  See 15 U.S.C.   1 ('Every contract . .  . in
                               ___

          restraint  of  trade  or  commerce  .  .  .  is  declared  to  be

          illegal.')"  Data General Corp. v. Grumman Systems Support Corp.,
                       __________________    _____________________________

          36 F.3d 1147, 1178 (1st Cir. 1994).   "There are essentially four

          elements to  a per se  tying claim:   (1) the tying and  the tied
                         ______

          products  are actually  two distinct  products; (2)  there  is an

          agreement or  condition, express  or implied, that  establishes a

          tie; (3)  the entity  accused of  tying  has sufficient  economic

          power in the market  for the tying product to  distort consumers'

          choices  with  respect  to the  tied  product;  and  (4) the  tie

          forecloses a substantial amount of commerce in the market for the

          tied product."  Id. at 1178-79.6
                          ___
                              
          ____________________

          5    See Amended  Verified Complaint      28-29.   Plaintiff also
          asserts a  claim under  the Clayton  Act,   3,  that we  need not
          separately  address.    See Grappone  ,  Inc.  v.  Subaru of  New
                                  ___ _________________      ______________
          England, Inc.,  858  F.2d  792, 793  (1988)  (pointing  out  that
          _____________
          essential  elements of  unlawful tying  arrangement are  same for
          alleged violations of  Sherman Act   1  or Clayton Act   3).   In
          addition,  Borschow conceded  at oral  argument that  our holding
          that the Distribution Agreement was non-exclusive would foreclose
          relief on all of its antitrust claims except its tying claim.  

          6   Borschow  does not articulate  a "rule  of reason"  theory of
          tying  liability.    Although  the  amended  verified   complaint
          contains conclusory allegations  that Becton Dickinson's  conduct

                                         -16-
                                          16

                    The fatal flaw in Borschow's tying claim is that Becton

          Dickinson never withheld its Deseret line.  Although Borschow has

          adduced evidence  of various threats  by Becton Dickinson,  it is

          undisputed that these threats were not carried out.  Permitted to

          carry both the Deseret  line and the Monoject line,  Borschow was

          never injured  by the threat.   See  Wells Real  Estate, Inc.  v.
                                          ___  ________________________

          Greater  Lowell Board of Realtors,  850 F.2d 803,  814 (1st Cir.)
          _________________________________

          (holding that plaintiff must have been injured by anticompetitive

          act to  have standing  under antitrust  laws), cert.  denied, 488
                                                         _____________

          U.S. 955 (1988).

                    As a result, the second  key element discussed above --

          evidence of a tie -- is missing:

                    [T]he essential characteristic of  an invalid
                    tying  arrangement  lies   in  the   seller's
                    exploitation  of its  control over  the tying
                    product to force the buyer into  the purchase
                    of a  tied product that the  buyer either did
                    not want  at all, or might  have preferred to
                    purchase  elsewhere on different terms.  When
                    such "forcing" is present, competition on the
                    merits  in the  market for  the tied  item is
                    restrained and the Sherman Act is violated.

          Jefferson  Parish  Hosp. Dist.  No. 2  v.  Hyde, 466  U.S.  2, 12
          _____________________________________      ____

          (1984);  see also  T. Harris  Young &  Assoc., Inc.  v. Marquette
                   ________  ________________________________     _________
                              
          ____________________

          generally  had an  adverse  effect on  competition,  there is  no
          evidence in the record to support the allegation that the threats
          of tying  had such an adverse  impact, or to provide  a basis for
          providing further  discovery pursuant to  Fed. R. Civ.  P. 56(f).
          See Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 29-31
          ___ __________________________________    ____
          (1984)  (noting that  in absence of  per se  liability, antitrust
                                               ______
          plaintiff  must prove  that  defendant's conduct  had an  "actual
          adverse  effect  on  competition"); R.W.  International  Corp. v.
                                              __________________________
          Welch  Food, Inc., 13 F.3d 478, 487-88 (1st Cir. 1994) (rejecting
          _________________
          request for  further discovery despite conclusory  allegations of
          antitrust  injury  where  plaintiff  distributors  were  in  same
          position as defendant to ascertain effect of conduct at issue).  

                                         -17-
                                          17

          Electronics, Inc., 931 F.2d 816, 822-23 (11th Cir.) ("[F]or a tie
          _________________

          to  exist a seller must withhold product  A unless the buyer also

          selects product B.  Only after the existence of a tie is shown is

          it necessary  to determine  whether an illegal  tying arrangement

          exists.") (footnote omitted), cert. denied, 502 U.S. 1013 (1991);
                                        ____________

          CIA Petrolera Caribe, Inc. v. Avis Rental Car Corp., 576 F. Supp.
          __________________________    _____________________

          1011, 1016 (D.P.R.  1983) ("Coercion is  an essential element  of

          any tying arrangement,  i.e., forcing the purchaser or  lessor to

          take the unwanted  tied product along with  the tying product."),

          aff'd, 735 F.2d 636 (1st Cir. 1984).
          _____

                    Where a tying  product has not been  withheld, there is

          no tie.   "There is no  tie for any antitrust  purpose unless the

          defendant   improperly  imposes  conditions  that  explicitly  or

          practically  require buyers to  take the  second product  if they

          want the first one."  10 Phillip E. Areeda et al., Antitrust Law:
                                                             ______________

          An  Analysis  of Antitrust  Principles  and  their Application   
          ______________________________________________________________

          1752b, at  280 (1996).   Thus we  hold that there  is no  genuine

          issue of material fact with respect to Borschow's tying claim.7

                                   III.  CONCLUSION
                                   III.  CONCLUSION

                    For the foregoing  reasons, the district  court's grant

          of summary judgment is AFFIRMED.
                                 AFFIRMED

           

                              
          ____________________

          7    This holding  also disposes  of Borschow's  discovery claim.
          Borschow contends  that the district court  abused its discretion
          by  refusing to allow further  discovery.  However,  no amount of
          discovery would uncover evidence of a non-existent tie.

                                         -18-
                                          18