Court Opinion

ID: 9471273
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:28:21.958743+00
Date Added: 2024-06-11T17:42:20.099163
License: Public Domain

KENNEDY, Circuit Judge,
concurring in part and dissenting in part:
Although I agree that the plaintiff’s antitrust claim must be dismissed, in my view the case presents an issue different from the one discussed by the majority. I respectfully submit a separate concurrence on this aspect of the appeal. I also dissent from the remand of one of the plaintiff’s state claims, for I would dismiss that part of the action as well.
The majority states: “Aydin must establish that Moyes competes at the same market level as Loral and Conic.” It further states: “Moyes is not a competitor of Loral and Conic in any significant measure and does not operate at the same level of the market structure.” The problem with these statements is that Aydin is the plaintiff, and Aydin does compete at the same market level as Conic. Moyes’s agreement with Conic in fact serves to restrain Aydin as though Aydin itself were bound not to hire Conic employees. For analytic purposes, at least, the agreement thus operates as a horizontal division of the market among competitors.
The majority in effect holds that a chief executive officer and his company cannot agree to'lessen competition, even when they contract to do so explicitly and in anticipation of the executive’s leaving the compa*906ny’s employment. I know of no principle that immunizes such agreements from standard antitrust analysis.
This said, I would nevertheless grant summary judgment against Aydin. Even if we assume the complaint alleges a horizontal market division, it does not mean we must find it a per se Sherman Act violation, or we must find it unreasonable. Broadcast Music, Inc. v. Columbia Broadcasting System, Inc., 441 U.S. 1, 99 S.Ct. 1551, 60 L.Ed.2d 1 (1979), dealt with an arrangement bearing all the earmarks of a horizontal restraint through price-fixing, yet the Court failed to condemn it as illegal. See also United States v. Sealy, Inc., 388 U.S. 350, 357, 87 S.Ct. 1847, 1852, 18 L.Ed.2d 1238 (1967) (dictum). Finally, of course, United States v. Addyston Pipe & Steel Co., 85 F. 271 (7th Cir.1898), points away from per se treatment, when an agreement is ancillary to the achievement of legitimate business concerns.
Although the purpose of the agreement in question was to diminish competition of Loral’s employees, doing so was ancillary to the protection of Loral-Conic’s trade secrets, namely its information as to the talent and potential of its most valuable technical employees. It furthers rather than stifles competition when an employer is enabled to keep such information confidential. The economic rationale for protecting such trade secrets is the same as that for protecting patents: only by creating property rights with respect to knowledge can we insure the efficient production of such knowledge. See, e.g., F. Scherer, Industrial Market Structure and Economic Performance, ch. 16; R. Posner & F. Easterbrook, Cases and Materials on Antitrust Law, ch. 2, c. 3. In my view, the agreement is pro-competitive; it is not governed by per se tests, and it satisfies the rule of reason.
I dissent from remand of the pendent state claim on intentional interference with prospective business relations. The majority is correct in ruling that there is an insufficient showing of bad faith prosecution on the other state counts. In my view, this premise should lead us to affirm the dismissal of the interference count as well, rather than to remand to the district court, which will be required to dismiss it in any event.
Section 773 of the Restatement (Second) of Torts provides:
One who, by asserting in good faith a legally protected interest of his own or threatening in good faith to protect the interest by appropriate means, intentionally causes a third person not to perform an existing contract or enter into a prospective contractual relation with another does not interfere improperly with the other’s relation if the actor believes that his interest may otherwise be impaired or destroyed by the performance of the contract or transaction. (Emphasis added.)
This proposition has been endorsed by California courts. See, e.g., Imperial Ice Co. v. Rosier, 18 Cal.2d 33, 36, 112 P.2d 631, 633 (1941); Fletcher v. Western National Life Ins. Co., 10 Cal.App.3d 376, 89 Cal.Rptr. 78, 89 (1970); United Professional Plan v. Superior Court, 9 Cal.App.3d 377, 88 Cal.Rptr. 551, 562 (1970). Even if we view justification as an affirmative defense, our finding of good faith completely disposes of the issue.
I would affirm the district court in all respects.