Court Opinion

ID: 6966686
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:55:08.007466+00
Date Added: 2024-06-11T16:08:38.536735
License: Public Domain

TASHIMA,*** Circuit Judge,
with whom WHALEY, District Judge, concurs:
The district court, without distinguishing Lucas Automotive’s equitable claim from its treble damage claim, granted Coker Tire summary judgment on both claims because “Lucas has not produced any evidence to show that Coker has in fact raised these prices [on brand name vintage tires]. Therefore, it has not suffered any actual injury.” Order Granting Defendant’s Motion for Summary Judgment at 8 (Oct. 17, 1995) (citing Rebel Oil Co. v. Atlantic Richfield Co., 51 F.3d 1421 (9th Cir.1995)). It further held that “Lucas also lacks standing to bring this claim because it has not actually purchased tires from Coker. Lucas does not buy its Firestone vintage tires directly from Coker.” Citing Illinois Brick, 431 U.S. 720, 97 S.Ct. 2061, 52 L.Ed.2d 707, the district court held that “Lucas must buy directly from Coker to have standing to sue for any price increases Coker puts into effect as a result of its alleged monopoly.” The district court concluded the portion of its opinion on antitrust standing: “The Court therefore finds that Lucas has not suffered an antitrust injury because its losses are not due to any anti-competitive acts by Coker. Therefore Lucas lacks standing to sue under the antitrust acts.” The district court erred in failing to distinguish Lucas Automotive’s standing to sue for equitable relief under § 7 of the Clayton Act from its standing to sue for treble damages.
First, indirect purchasers are not barred from bringing an antitrust claim for injunctive relief against manufacturers. McCarthy v. Recordex Serv., Inc., 80 F.3d 842, 856 (3d Cir.), cert. denied, — U.S.-, 117 S.Ct. 86, 136 L.Ed.2d 42 (1996); In re Beef Indus. Antitrust Litig., 600 F.2d 1148, 1167 (5th Cir.1979); Mid-West Paper Prods. Co. v. Continental Group, Inc., 596 F.2d 573, 590-94 (3d Cir.1979); In re Coordinated Pretrial Proceedings in Petroleum Prods. Antitrust Litig., 497 F.Supp. 218, 228-29 (C.D.Cal.1980). Second, an antitrust plaintiff seeking injunctive relief need only show a threatened injury, not an actual one. See 2 Areeda & Hovenkamp, Antitrust Law ¶ 360, at 193-94.
Lucas Automotive forthrightly states in its opening brief that “this is not a ‘terminated distributor’ case—Lucas does not claim injury flowing from the loss of the Firestone distribution rights against Coker ... Lucas’ injury flows from the fact that it is a purchaser and reseller of vintage original equipment tires and Coker now controls the supply of vintage tires. Lucas thus is forced to operate in a market controlled by a monopo*1236list rather than by market forces.” (Emphasis added.)
The undisputed facts on summary judgment showed that after its acquisition of the Firestone vintage tire line, Coker Tire controlled 75 percent of the vintage tire market, and 90 percent of the original equipment market. Coker Tire controlled all major American vintage tire brands, except one, Firestone, B.F. Goodrich and U.S. Royal. Kelsey Tire Company, with less than 10 percent of the market, controlled the remaining Goodyear brand. Goodyear vintage tires, however, are limited in terms of available sizes.
The undisputed facts also established that there are insurmountable barriers to entry into the primary-line market for vintage tires, particularly the original equipment market. This is because what is acceptable to the consuming public as a vintage tire brand, by definition, was fixed many years ago. All of the trademarks and the tire molds necessary to manufacture vintage tires have been committed to existing manufacturers. See generally Rebel Oil, 51 F.3d at 1439 (analyzing barriers to entry factor).
These undisputed facts, at the summary judgment stage, are sufficient fairly to support Lucas Automotive’s claim that “Coker has monopoly power in the marketing and sale of vintage tires in the United States with the power to exclude competition and raise prices,” ie., they make out a prima facie case. We held in Rebel Oil that a market share of 44 percent was “sufficient as a matter of law to support a finding of market power, if entry barriers are high and competitors are unable to expand their output in response to supracompetitive pricing.” Id. at 1438 (footnote omitted). Accord Oahu Gas Serv., Inc. v. Pacific Resources Inc., 838 F.2d 360, 366 (9th Cir.1988) (“A firm with a high market share may be able to exert market power in the short run, but ‘[s]ubstantial market power can persist only if there are significant and continuing barriers to entry.’ ”) (citation omitted).
It is a fair inference from the facts on summary judgment that, with the acquisition of the Firestone line of vintage tires, Coker Tire controls the supply of original equipment vintage tires; there no longer is virtually any competition at the primary level since Coker has a 90% market share; there are insurmountable barriers to entry; and it may be inferred that the sole remaining competitor in the original equipment vintage tire market, Kelsey Tire Company, is unable to increase output since the Goodyear brand of vintage tires controlled by Kelsey is limited in terms of size.5 Coker Tire can now control prices and output, and exclude competition. Section 7 prohibits an acquisition the effect of which “may be substantially to lessen competition, or to tend to create a monopoly.” 15 U.S.C. § 18. Lucas Automotive has shown, prima facie, that Coker Tire’s conduct threatens “substantially to lessen competition” and “tends to create a monopoly” at the primary line level of the vintage tire market. That is precisely the antitrust harm § 7 was intended to protect against. As the Supreme Court has noted:
Indeed, the evident import of Congress’ reference to “threatened loss or damage” is not to constrict the availability of injunctive remedies against violations that have already begun or occurred, but rather to expand their availability against harms that are as yet unrealized.
California v. American Stores Co., 495 U.S. 271, 282 n. 8, 110 S.Ct. 1853, 1859 n. 8, 109 L.Ed.2d 240 (1990) (citing Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 130 & n. 24, 89 S.Ct. 1562, 1580 & n. 24, 23 L.Ed.2d 129 (1969)). See also Brown Shoe Co. v. United States, 370 U.S. 294, 318 n. 32, 82 S.Ct. 1502, 1520 n. 32, 8 L.Ed.2d 510 (1962) (recognizing that § 7 “was intended to reach incipient monopolies and trade restraints outside the scope of the Sherman Act”).
*1237We conclude that Lucas Automotive, as a competitor at the secondary level, i.e., as a customer in a market controlled by a monopolist, has standing to assert a § 7 claim for equitable relief, including divestiture, under §■ 16. It established a prima facie case, both that it was an active participant in the vintage tire market and that Coker Tire’s conduct in that market violated § 7. This showing was thus sufficient to avoid summary judgment on Lucas Tire’s Clayton Act § 7 claim for equitable relief.
Ill
We affirm the district court’s grant of summary judgment dismissing Lucas Automotive’s claim for damages under § 4 of the Clayton Act. As for Lucas Automotive’s claim for equitable relief under § 16, we reverse the district court’s grant of summary judgment and remand for further proceedings consistent with this opinion. Each side shall bear its own costs on appeal.
AFFIRMED IN PART, REVERSED IN PART, and REMANDED.

 Writing for the court as to Part II.B.2 only.

. The dissent faults Lucas Automotive for not having offered "a shred of evidence as to the cross elasticity of demand between original equipment vintage tires of different sizes.” What there is not a shred of evidence on is that there is any substitutibility between original equipment vintage tires of different sizes. Moreover, in these circumstances, the burden to show cross elasticity of demand to defeat plaintiff's prima facie case would seem to fall on Coker Tire. Lucas Automotive should not be required to prove a negative—the non-existence of a cross elasticity of demand.