Court Opinion

ID: 9491238
Source: CourtListenerOpinion
Date Created: 2023-08-05 14:07:48.203101+00
Date Added: 2024-06-11T17:54:36.213028
License: Public Domain

PRÉGERSON, Circuit Judge,
dissenting:
I dissent because I believe that Kentmas-ter’s complaint states monopoly and attempted monopoly claims against Jarvis under Section 2 of the Sherman Act. See 15 U.S.C. § 2. The majority disagrees because it believes that Jarvis did not engage in predatory pricing. The majority bases this belief on two dependent premises: that slaughterhouse equipment and spare parts constitute a single product and that Jarvis recouped losses associated with the slaughterhouse equipment when it sold spare parts. I don’t agree with the first premise, and I fail to see how the second premise absolves Jarvis from liability.
The majority finds that slaughterhouse equipment and spare parts are one product because “only an idiot would think of the cost of [the equipment] without taking into account the cost of [the spare parts].” Under this rationale, there could never be separate markets for products that are functionally related to each other. But the Supreme Court has rejected this assumption, suggesting that there could be separate markets for such functionally-related products as “cameras and film, computers and software, or automobiles and tires.” Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451, 463, 112 S.Ct. 2072, 119 L.Ed.2d 265 (1992). Likewise, I believe that there could be separate markets for slaughterhouse equipment and spare parts.
Nevertheless, even if the slaughterhouse equipment and spare parts were part of the same market, I would not absolve Jarvis of liability just because it recouped its losses. Every monopoly, if it is successful, will eventually recoup its losses. The point at which to ascertain predatory pricing is the initial sale.
Here, the initial “sale” took place when Jarvis delivered its equipment to Kentmas-ter’s customers either for free or at below-cost prices. At that point, Jarvis’s prices were predatory. Unlike the majority, I do not believe that the complaint’s allegations about recoupment change this fact. On the contrary, the fact that Jarvis was able to recoup its losses through the sale of spare parts shows that Jarvis was succeeding in its attempt to create a monopoly. Accordingly, I would reverse the district court’s judgment on the pleadings under Rule 12(b)(6) of the Federal Rules of Civil Procedure and give Kentmaster a chance to prove its antitrust claims.