Court Opinion

ID: 4032530
Source: CourtListenerOpinion
Date Created: 2016-09-09 17:01:15.705859+00
Date Added: 2024-06-11T14:36:32.368972
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

AEROTEC INTERNATIONAL, INC.,           No. 14-15562
an Arizona corporation,
             Plaintiff-Appellant,        D.C. No.
                                    2:10-cv-00433-JWS
               v.

HONEYWELL INTERNATIONAL,                  OPINION
INC., a Delaware corporation,
             Defendant-Appellee.

      Appeal from the United States District Court
               for the District of Arizona
      John W. Sedwick, District Judge, Presiding

         Argued and Submitted March 16, 2016
               San Francisco, California

                Filed September 9, 2016

Before: M. Margaret McKeown, Kim McLane Wardlaw,
        and Richard C. Tallman, Circuit Judges.

              Opinion by Judge McKeown
2            AEROTEC INT’L V. HONEYWELL INT’L

                            SUMMARY*

                              Antitrust

    The panel affirmed the district court’s grant of summary
judgment in favor of defendant Honeywell International, Inc.,
on antitrust claims brought by Aerotec International, Inc.

    Aerotec, a small, independent company that provides
maintenance, repair, and overhaul services for Honeywell-
manufactured auxiliary power units for aircraft, alleged that
Honeywell leveraged its monopoly power over the auxiliary
power unit parts market to unfairly smother competition in
the repair services market.

    The panel held that Aerotec failed to establish either
positive or negative tying in violation of § 1 of the Sherman
Act because there was no condition linking the sale of a tying
product with the sale of the tied product. Aerotec also
presented insufficient evidence of exclusive dealing under
Sherman Act § 1.

    As to monopolization claims under Sherman Act § 2,
Areotec failed to establish foreclosure of competition through
a refusal to deal or a denial of essential facilities. Aerotec
also failed to establish liability on the basis of bundled parts
and repairs.

   The panel affirmed the district court’s summary judgment
on a price discrimination claim under the Robinson-Patman

    *
      This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
           AEROTEC INT’L V. HONEYWELL INT’L                   3

Act because Aerotec failed to establish actionable
discrimination in price between independent servicers and
Honeywell’s affiliates.

                         COUNSEL

Michael C. Blair (argued) and Craig M. LaChance, Baird,
Williams & Greer, LLP, Phoenix, Arizona, for Plaintiff-
Appellant.

William J. Maledon (argued), Brett L. Dunkelman, Joseph N.
Roth, and Eric M. Fraser, Osborn Maledon, P.A., Phoenix,
Arizona; Richard G. Parker, O’Melveny & Myers LLP,
Washington, D.C.; for Defendant-Appellee.

                          OPINION

McKEOWN, Circuit Judge:

    This case reads like an antitrust primer for aftermarket
issues, with claims for exclusive dealing, tying, essential
facilities, refusal to deal, price bundling, and price squeezing
under Sections 1 and 2 of the Sherman Act and differential
pricing/price discrimination under the Robinson-Patman Act.
Honeywell International Inc. (“Honeywell”) is one of the
world’s two largest manufacturers of auxiliary power units
(“APUs”), which power aircraft functions such as electricity
and temperature. Aerotec International Inc. (“Aerotec”) is a
small, independent company that provides maintenance,
repair, and overhaul (“MRO”) services for Honeywell APUs.
Aerotec argues that Honeywell leverages its monopoly power
4          AEROTEC INT’L V. HONEYWELL INT’L

over the APU parts market to unfairly smother competition in
the repair services market.

    Aerotec’s antitrust claims fail for lack of evidence to link
Aerotec’s misfortune to any cognizable basis for antitrust
liability. This case serves as a reminder that anecdotal
speculation and supposition are not a substitute for evidence,
and that evidence decoupled from harm to competition—the
bellwether of antitrust—is insufficient to defeat summary
judgment. As the Supreme Court reminds us, “[t]he law
directs itself not against conduct which is competitive, even
severely so, but against conduct which unfairly tends to
destroy competition itself.” Spectrum Sports, Inc. v.
McQuillan, 506 U.S. 447, 458 (1993); see also Cascade
Health Sols. v. PeaceHealth, 515 F.3d 883, 901 (9th Cir.
2007) (reiterating that “antitrust laws protect the process of
competition, and not the pursuits of any particular
competitor”). We affirm the district court’s grant of
summary judgment in favor of Honeywell.

                       BACKGROUND

    This case concerns the repair and maintenance market for
APUs, which are small engines that provide aircraft with the
electrical power needed to keep air conditioning running,
cabin lights shining, and electric-powered instrumentation
functioning. Without APUs, air travel would be neither
comfortable nor safe. A malfunctioning APU requires that a
plane be grounded until the problem is fixed—a situation that
can cost airlines hundreds of thousands of dollars a day. In
short, APUs are an essential cog in a smoothly functioning
aviation industry.
           AEROTEC INT’L V. HONEYWELL INT’L                  5

    Very few companies manufacture APUs. Honeywell, a
diversified manufacturer of aerospace products, dominates
the APU industry, with a 76 percent share of the
manufacturing market for commercial aircraft, 89 percent for
business planes, and 79 percent for military aircraft. The
other major manufacturer is Hamilton Sundstrand.

    Aerotec is a small APU shop that competes with
Honeywell in the repair market. Aerotec’s share of the repair
market is about 1 percent, and it is one of the few firms that
repairs APUs from both Honeywell and Hamilton
Sundstrand. Aerotec shares the stage with at least 49 other
MRO servicers, plus Honeywell, which alone repairs as much
as 54 percent of Honeywell-manufactured APUs.

    The lifeblood of the repair and maintenance market is a
steady source of replacement parts. Because of the
proprietary nature of the design, manufacturers naturally
control most of the replacement parts market for APUs. The
industry denotes replacement parts branded by the
manufacturer as “original equipment manufacturer” (“OEM”)
parts, in contrast with substitute parts, which are referred to
as “parts manufacturing approval” (“PMA”) parts because
they require regulatory certification by the Federal Aviation
Administration (“FAA”). Almost all parts available on the
market are OEM parts. PMAs cover mostly non-essential
parts and are rarely available for the more important, and
expensive, components of an APU, such as turbine blades.

   Repair procedures are also critical to the repair and
maintenance market, given the technical complexity of APUs.
Although Honeywell closely guards its proprietary repair
methods involving OEM parts, the aviation industry as a
whole has developed substitute repair methods for
6          AEROTEC INT’L V. HONEYWELL INT’L

Honeywell’s APUs that both mimic and depart from
Honeywell’s protocols. These repair processes must be
approved by a “designated engineering representative”
(“DER”) approved by the FAA, and are referred to within the
industry as “DER repairs.”

    Apart from Honeywell, APU repairs are undertaken
directly by the airlines (“self-servicing airlines”), Honeywell
affiliates, and independent operators. Participants in this
market typically bundle parts and repairs in an effort to woo
the airlines into long-term repair and maintenance
agreements.

    The majority of Honeywell MRO servicers, known as
Honeywell affiliates, operate under long-term contracts with
Honeywell for parts. Under these agreements, a servicer
typically agrees to certain obligations and royalty fees in
exchange for discounts on Honeywell OEM parts, priority in
allocation of parts in shortages, and a license to use
Honeywell’s intellectual property for APU repairs. At least
five of the MRO servicers, including Aerotec, are
independent companies without any manufacturer affiliation.
These independent servicers typically obtain the necessary
parts for repairs by submitting purchase orders for parts on an
as-needed basis through spot contracts with Honeywell.
Under Honeywell’s tiered pricing structure, independent
servicers pay more for OEM parts in spot orders than do self-
servicing airlines, and typically pay more than Honeywell
affiliates who negotiate prices as part of their long-term
agreements. Facing these pricing differentials, independent
servicers use cheaper PMA parts and DER repair methods
when they are available, which is partly how they are able to
compete in the volatile and competitive repair and
maintenance market. Despite claimed barriers, Aerotec touts
           AEROTEC INT’L V. HONEYWELL INT’L                  7

that its prices are 20 percent lower than its competitors on
average.

    Although Aerotec traditionally controlled less than one
percent of the Honeywell APU repair and maintenance
market, beginning around 2006, after emerging from a second
bankruptcy, Aerotec made a push to increase its market share
and profitability. The company branded itself as a “fierce
low cost” competitor to Honeywell. Aerotec wrangled major
MRO deals away from Honeywell, including one with Saudi
Arabian Airlines (“Saudia”) in 2007 and another with Air
India in 2009. The deal with Saudia was not easily won, and
it was precarious from the get-go: Aerotec “openly discussed
its financial limitations” with Saudia and contracted for a
“‘fixed monthly payment’ plan . . . to ensure a steady cash
flow,” despite the fact that Saudia’s prior deal with
Honeywell had gone sour because of Saudia’s late payments.
Aerotec’s sales director noted that carrying customer debt of
$500,000 to $1,500,000 “would put [Aerotec] out of
business.” But for a time Aerotec’s profits soared.

    Aerotec’s upward trajectory did not last. Beginning in
2007, a well-documented worldwide parts shortage for the
Honeywell Model 331-500 APU used in Saudia’s fleet of
Boeing 777s hampered Honeywell’s ability to follow through
on commitments to purchasers of parts, including Aerotec.
Because Honeywell’s parts allocation system put independent
MROs at the bottom of the priority list, Aerotec experienced
delays in the delivery of parts. Aerotec’s lack of a pre-
existing inventory of parts exacerbated the problem. As a
result of the unavailability of parts, Aerotec began having
trouble fulfilling its contracts with Saudia and other clients.
For its part, Saudia continued its pattern of late payments,
leaving Aerotec stranded on a “continuous financial roller-
8          AEROTEC INT’L V. HONEYWELL INT’L

coaster” with millions of dollars of customer debt.
Honeywell continued to sell parts to Aerotec, and, even when
Aerotec could not financially cover its demand, extended
credit lines. But the credit came at the cost of further de-
prioritization of shipments and additional layers of review for
parts orders. As a result of these difficulties, Aerotec
suffered a series of major bidding losses: Saudia left Aerotec
in 2009, opting instead for a Honeywell affiliate; Air India
left for Honeywell; and Air China chose Honeywell in a hotly
contested bidding process.

     In the face of its dwindling market share, Aerotec turned
to federal court and filed a complaint alleging causes of
action under §§ 1 & 2 of the Sherman Antitrust Act,
15 U.S.C. §§ 1, 2, the Robinson-Patman Act, 15 U.S.C.
§ 13(a), and Arizona state law. Aerotec takes issue with
Honeywell’s claims that its hands were tied by a parts
shortage. Instead, Aerotec views the parts shortage as a
pretext—part of what Aerotec alleges to be Honeywell’s
thinly-veiled, multi-pronged plan to leverage its control over
the parts market to pull business from independent servicers
to itself and its affiliates.

   In addition to the allegedly deliberate shipment delays,
Aerotec alleges that Honeywell maintained an overly
burdensome ordering process, held Aerotec to stringent
payment terms at the same time that it failed to deliver parts,
withheld needed technical information that previously had
been provided as a matter of course, lured airline clients away
from independent servicers by offering steeply discounted
bundles of parts and repair services, and imposed a pricing
penalty on independent servicers vis-a-vis airlines and
Honeywell affiliates.
           AEROTEC INT’L V. HONEYWELL INT’L                   9

    After the close of discovery, the parties filed cross-
motions for summary judgment. The district court denied
Aerotec’s motion and granted Honeywell’s motion,
concluding that there was insufficient evidence to create
triable factual disputes on Aerotec’s federal antitrust claims.
The court also dismissed Aerotec’s Arizona state law claims
because they either turned on the viability of Aerotec’s
federal antitrust claims or were unsupported by evidence
sufficient to create a material factual dispute. Reviewing
summary judgment de novo and viewing the evidence in the
light most favorable to Aerotec, the non-moving party, we
affirm. See Rebel Oil Co., Inc. v. Atl. Richfield Co., 51 F.3d
1421, 1432 (9th Cir. 1995).

                          ANALYSIS

I. Section 1 of the Sherman Act

     Section 1 of the Sherman Act prohibits “[e]very contract,
combination in the form of trust or otherwise, or conspiracy,
in restraint of trade or commerce among the several States, or
with foreign nations . . . .” 15 U.S.C. § 1. Despite the breadth
of the statutory language, the Supreme Court “has long
recognized that Congress intended to outlaw only
unreasonable restraints.” State Oil Co. v. Khan, 522 U.S. 3,
10 (1997). To establish liability under § 1, a plaintiff must
prove (1) the existence of an agreement, and (2) that the
agreement was in unreasonable restraint of trade. Am.
Needle, Inc. v. Nat’l Football League, 560 U.S. 183, 189–90
(2010). Aerotec relies on two theories of liability under § 1:
first, that Honeywell restrained trade by “tying” the purchase
of Honeywell OEM parts to the purchase of Honeywell repair
services; and second, that Honeywell restrained trade by
10         AEROTEC INT’L V. HONEYWELL INT’L

forcing airlines into de facto exclusive dealing arrangements
with Honeywell and its affiliates.

     A. Section 1 of the Sherman Act—Tying

    In a tying arrangement, a “seller conditions the sale of one
product (the tying product) on the buyer’s purchase of a
second product (the tied product).” Cascade Health, 515 F.3d
at 912. By so doing, a seller with “market power in one
market . . . extend[s] its market power to an entirely distinct
market.” Paladin Assocs., Inc. v. Mont. Power Co., 328 F.3d
1145, 1159 (9th Cir. 2003). To establish a tying claim,
Aerotec must prove:

        (1) that [Honeywell] tied together the sale of
        two distinct products or services; (2) that
        [Honeywell] possesses enough economic
        power in the tying product market to coerce
        its customers into purchasing the tied product;
        and (3) that the tying arrangement affects a
        not insubstantial volume of commerce in the
        tied product market.

Cascade Health, 515 F.3d at 913 (internal quotation marks
omitted). Aerotec’s claim falters on the first, most
fundamental requirement—the existence of a tie.

    A tie only exists where “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 & Herbert Hovenkamp, Antitrust Law
¶ 1752b (3d ed. 2011). Prohibited tying arrangements under
§ 1 include both positive and negative ties. See Data Gen.
Corp. v. Grumman Sys. Support Corp., 36 F.3d 1147, 1178
             AEROTEC INT’L V. HONEYWELL INT’L                        11

(1st Cir. 1994) (drawing parallels between “positive” and
“negative” ties), abrogated on other grounds by Reed
Elsevier, Inc. v. Muchnick, 130 S. Ct. 1237 (2010). Under the
more traditional positive tie, sale of the desired (“tying”)
product is conditioned on purchase of another (“tied”)
product. See id. at 1156. A negative tie “occur[s] when the
customer promises not to take the tied product from the
defendant’s competitor, but courts ‘rarely encounter[]’ such
a situation.” See Cascade Health, 515 F.3d at 912 n.23
(citing 10 Areeda & Herbert Hovenkamp, supra ¶ 1752c n.8
(2d ed. 2004)) (alteration in original). The common element
in both situations is that a seller explicitly or implicitly
imposes conditions linking the sale of a tying product with
the sale of the tied product. See 10 Areeda & Hovenkamp,
supra ¶ 1752e (3d ed. 2011) (noting that whether there is a tie
turns on “whether the defendant gave buyers the reasonable
impression that it would not sell product A to those who
would not buy its B”). Aerotec’s claim does not fit either
framework because there is no condition linked to a sale. We
decline to stretch the tying construct to accommodate the
claim that Honeywell’s conduct toward third party
servicers—i.e., parts delays, pricing decisions, and removal
of technical data—acts as an effective, or “de facto,”
condition on sale to airlines.1

    Although Aerotec urges that its theory is directly
supported by the Supreme Court’s decision in Kodak,
Aerotec’s claim is critically different from the “negative”
tying claim in that case. Eastman Kodak Co. v. Image

    1
      Aerotec’s theory of tying is quite similar to the approach advanced
and rejected in Triad Sys. Corp. v. Se. Express Co., 1994 WL 446049 at
*14–16 (N.D. Cal. Mar. 18, 1994), affirmed in part and reversed in part
on other grounds by 64 F.3d 1330 (9th Cir. 1995).
12         AEROTEC INT’L V. HONEYWELL INT’L

Technical Servs., Inc., 504 U.S. 451 (1992) (“Kodak”). In
Kodak, the Supreme Court recognized a tie where Kodak
conditioned the sale of printer replacement parts to copy
machine owners on an agreement not to purchase repair
services from an independent service provider: “[t]he record
indicate[d] that Kodak would sell parts to third parties only if
they agreed not to buy service from [independent service
operators].” Id. at 463. Unlike in this case, Kodak imposed
its tying conditions on the purchasers of parts. Conditions of
sale to competitor service providers were not at issue. Kodak
simply does not map onto the facts here, where the only
claimed conditions imposed were on independent servicers.

    Nor can Aerotec transform Kodak by waving its hands
and saying that the gravamen of its complaint is a “de facto”
or “implied” tie. We readily acknowledge that tying
conditions need not be spelled out in express contractual
terms to fall within the Sherman Act’s prohibitions. See
Collins Inkjet Corp. v. Eastman Kodak Co., 781 F.3d 264,
272 (6th Cir. 2015) (recognizing “non-explicit tying” when
a seller “adopts a policy that makes it unreasonably difficult
or costly to buy the tying product . . . without buying the tied
product”), cert. denied, 136 S. Ct. 498 (2015); see also
Foremost Pro Color, Inc. v. Eastman Kodak Co., 703 F.2d
534, 542–43 (9th Cir. 1983) (rejecting a claim of a
“technological tie” but acknowledging the possibility of such
a claim), overruled on other grounds as recognized in
Chroma Lighting v. GTE Prods. Corp., 111 F.3d 653, 657
(9th Cir. 1997). The problem with Aerotec’s claim is that
there is no tie, i.e., no evidence that Honeywell explicitly or
implicitly ties or conditions the sale of APU parts to APU
owners on a requirement that the owners “buy and repair
Honeywell” and/or forego services from independent service
providers. Aerotec does not dispute that Honeywell routinely
            AEROTEC INT’L V. HONEYWELL INT’L                  13

sells APU parts to airlines without conditioning sales on
service contracts. Honeywell allows airlines to purchase
parts and services in separate transactions from whichever
supplier they please. This undermines the analogy to Kodak,
even under an implied tying theory. See Areeda &
Hovenkamp, supra ¶ 1752a (Supp. 2016) (noting that the
existence of a tie can only be established through a “nuanced
inquiry into whether the defendant has so acted as to
constrain buyer choices illegitimately”).

     Perhaps cognizant that the arrangement in Kodak does not
fit the facts here because there is no direct condition linked to
the sale of parts to airlines, Aerotec argues in the alternative
that “Honeywell creates an implied tie by making the
purchase of Honeywell’s services an economic imperative.”
Honeywell achieves the tie, Aerotec alleges, by constraining
the flow of parts to independent servicers via delays on
orders, preferential pricing policies, and withholding of
technical information needed to complete repairs—in other
words, by squeezing third party service providers. As a
consequence, the independent servicers cannot deliver on
airlines’ reasonable expectations for finding a “one-stop
shop” for all of their parts and repair needs. Airlines “learn
the game: if you want parts, you use Honeywell’s repair
services.” But Aerotec’s chain of logic and evidence is too
attenuated to support liability for tying under § 1.

    Aerotec contends that a refusal to deal with competitors
may form the basis of a tying claim. Aerotec argues that
Cascade Health supports its “refusal to deal” theory of tying.
Importantly, however, that case did not dispense with the
need for a tying condition embedded in a tying transaction.
In Cascade Health, we said little about what constitutes a tie
because it was obvious that there was a tying condition: the
14         AEROTEC INT’L V. HONEYWELL INT’L

plaintiff alleged, and provided evidence, that the defendant
health care network conditioned insurers’ purchase of tertiary
care services on the purchase of primary and secondary
services. 515 F.3d at 913. Only after briefly passing over the
tying element did the court address the key issue, the coercion
element. At issue was whether coercion was established by
evidence that the defendant “forced insurers either as an
implied condition of dealing or as a matter of economic
imperative through its bundled discounting, to take its
primary and secondary services if the insurers wanted tertiary
services.” Id. at 914.

    Nothing in Cascade Health suggests that arguably
manipulative tactics imposed on a third-party competitor are
sufficient by themselves to create a tie with respect to a
separate buyer simply because they make it less desirable to
purchase from the third party. None of our cases postdating
Cascade Health come close to recognizing such a theory,
which echoes a plea for relief on behalf of a competitor, not
for the sake of competition itself. See e.g., Brantley v. NBC
Universal, Inc., 675 F.3d 1192 (9th Cir. 2012) (involving
conditions imposed on the buyer of the tying product);
Blough v. Holland Realty, Inc., 574 F.3d 1084 (9th Cir. 2009)
(same); Rick-Mik Enterprises, Inc. v. Equilon Enterprises,
LLC, 532 F.3d 963 (9th Cir. 2008) (same).

    Ultimately, Aerotec’s arguments fall off the rails for lack
of any evidence that airlines were presented with an offer for
the sale of parts that could have been reasonably perceived as
conditioned on refraining from the purchase of parts or
services from any other service provider besides Honeywell.
The claim that Honeywell clogs and complicates the parts
distribution pipeline to independent servicers cannot
             AEROTEC INT’L V. HONEYWELL INT’L                         15

substitute for the necessary evidence of an implied condition
embedded in the sale of the tying product.

    B. Section 1 of the Sherman Act—Exclusive Dealing

     Aerotec brings a second claim under § 1 of the Sherman
Act, alleging that Honeywell engaged in exclusive dealing,
which is an “agreement between a vendor and a buyer that
prevents the buyer from purchasing a given good from any
other vendor,” and forecloses competition. Allied Orthopedic
Appliances Inc. v. Tyco Health Care Grp. LP, 592 F.3d 991,
996 & n.1 (9th Cir. 2010).2 The agreements for purchase of
repair services from Honeywell by the airlines are the starting
point for our analysis. The record of these contracts,
however, is characterized more by what is missing than what
is there. Aerotec cannot sustain its burden by offering broad
allegations and complaints that are unhinged from any
specific agreement. Nor is there evidence that Honeywell has
a global agreement with all of its customers such that
Aerotec’s failure to pinpoint or analyze specific agreements
can be excused. The devil is in the details. We affirm the
district court’s award of summary judgment on this claim
because an exclusive dealing claim cannot succeed without
evidence of exclusive dealing.

    Aerotec has the burden to show that the agreements at
issue foreclosed competition. See id. at 996 n.1 (“[I]n a case
under Section 1 of the Sherman Act, the plaintiff must prove

    2
     Because exclusive dealing arrangements provide “well-recognized
economic benefits . . . including the enhancement of interbrand
competition,” we apply the rule of reason rather than a per se analysis.
Omega Envtl., Inc. v. Gilbarco, Inc., 127 F.3d 1157, 1162 (9th Cir. 1997).
16         AEROTEC INT’L V. HONEYWELL INT’L

that the exclusive dealing arrangement actually foreclosed
competition.”). In analyzing foreclosure, we

       weigh the probable effect of the contract on
       the relevant area of effective competition,
       taking into account the relative strength of the
       parties, the proportionate volume of
       commerce involved in relation to the total
       volume of commerce in the relevant market
       area, and the probable immediate and future
       effects which pre-emption of that share of the
       market might have on effective competition
       therein.

Tampa Elec. Co. v. Nashville Coal Co., 365 U.S. 320, 329
(1961). This inquiry requires that we look at the actual terms
of the agreements; indeed, “a prerequisite to any exclusive
dealing claim is an agreement to deal exclusively.” ZF
Meritor, LLC v. Eaton Corp., 696 F.3d 254, 270 (3d Cir.
2012); see also Barr Labs., Inc. v. Abbott Labs., 978 F.2d 98,
110 n.24 (3d Cir. 1992) (acknowledging that the first question
is whether there is an agreement to exclusivity). In doing so,
we typically focus on whether there are requirements terms
(i.e., terms requiring a buyer to purchase all the product or
service it needs from one seller), see Tampa Elec. Co.,
365 U.S. at 322, volume or market share targets, see ZF
Meritor, 696 F.3d at 283, or long-term contracts that prevent
meaningful competition by taking potential purchasers off the
market, see Omega Envtl., 127 F.3d at 1163–64 (“[T]he short
duration and easy terminability of these agreements negate
substantially their potential to foreclose competition.”). See
generally Areeda & Hovenkamp, supra ¶ 1800a1-3.
           AEROTEC INT’L V. HONEYWELL INT’L                 17

    Aerotec failed to provide any significant details about the
repair agreements between Honeywell and the airlines. The
only evidence of substance is a declaration from Aerotec that,
pursuant to industry practice, purchasers of repair services
contract for 3–7 years at a time, as well as testimony that
Honeywell gives airline customers a 15 percent discount on
parts. There is no evidence of which customers or how many
of the contracts were for 3–7 years; likewise, there is no
evidence that the discount is an “extreme quantity discount”
that “give[s] a customer a lower price for buying in larger
absolute quantities or a larger proportion of its needs,”
amounting to “de facto” exclusive dealing. Areeda &
Hovenkamp, supra ¶ 1807b2. Nor is there evidence of other
terms that in effect transform these unspecified transactions
into exclusive arrangements.

    Aerotec does point to a market analysis that shows that as
much as 47 percent of Honeywell APUs are under some form
of contract for repair with Honeywell, but this figure conveys
no relevant information about the substance of the contracts.
What are the details? What is the term of the contract? Is it
a spot market contract or a long-term contract? What
restrictions or conditions are imposed on the customer? We
don’t know because Aerotec didn’t tell us, either through
copies of the contracts, analysis of the contract terms, or
expert testimony. It is undisputed that some proportion of
Honeywell’s repair contracts are non-exclusive and
temporally circumscribed, as Honeywell provides single, on-
demand repair services on a “time and materials” basis.

    Contracts, simpliciter, are not illegal under the Sherman
Act. Indeed, none of the indicia that we would ordinarily
review in an exclusive dealing claim—e.g., requirements
terms, steep market-share requirements, contract duration and
18         AEROTEC INT’L V. HONEYWELL INT’L

other terms—are present in this record. The record simply
does not indicate what proportion of the market is bound up
in long-term contracts at any particular point in time or to
what effect. At this stage of the litigation, after extensive
discovery, Aerotec needed to do something more than offer
conclusory statements and stitch together disparate facts
about the market for repairs; it needed concrete
documentation that Honeywell’s agreements prevented
customers from giving their repair business to other MRO
servicers. The speculation and innuendo offered by Aerotec
cannot substitute for evidence.

    Aerotec attempts to redirect attention from the absence of
evidence of the exclusive substance of the agreements by
focusing on Honeywell’s power to force airlines to accept
Honeywell services to the detriment of independent servicers.
Evidence of Honeywell’s power to induce purchases of
repairs by airlines is certainly relevant under a “de facto”
exclusive dealing theory where we look “past the terms of the
contract to ascertain the relationship between the parties and
the effect of the agreement in the real world.” ZF Meritor,
696 F.3d at 270 (internal quotations omitted); see also
LePage’s Inc. v. 3M, 324 F.3d 141,157 (3d Cir. 2003) (en
banc) (same); United States v. Dentsply Int’l, Inc., 399 F.3d
181, 193 (3d Cir. 2005) (same). In certain limited situations,
discounts and rebates conditioned on a promise of exclusivity
or on purchase of a specified quantity or market share of the
seller’s goods or services may be understood as “de facto”
exclusive dealing contracts because they coerce buyers into
purchasing a substantial amount of their needs from the
seller. Areeda & Hovenkamp, supra ¶ 1807b1-2.

   Although we have not explicitly recognized a “de facto”
exclusive dealing theory like that recognized in the Third
           AEROTEC INT’L V. HONEYWELL INT’L                 19

Circuit and Eleventh Circuit, see ZF Meritor, 696 F.3d at 282
n.14 (reasoning that an “exclusive dealing claim does not
require a contract that imposes an express exclusivity
obligation”); McWane, Inc. v. FTC, 783 F.3d 814, 833–35
(11th Cir. 2015) (rejecting “formalistic distinctions” between
exclusive dealing contracts and exclusive programs), we need
not reach the issue here because, at bottom, a plaintiff must
still show that contracts that were induced were exclusive
rather than run-of-the-mill contracts, which inevitably
“‘foreclose[]’ or ‘exclude[]’ alternative sellers from some
portion of the market, namely the portion consisting of what
was bought.” Barry Wright Corp. v. ITT Grinnell Corp.,
724 F.2d 227, 236 (1st Cir. 1983). Simply put, a 15 percent
discount on a single sale (or a series of independent sales)
may be enticing enough to “coerce” a purchase in that
instance, but in the absence of any exclusive requirements on
which the discount is conditioned, the sale remains non-
exclusive. The “de facto” exclusive dealing theory does not
provide Aerotec an end run around the obligation to first
show that express or implied contractual terms in fact
substantially foreclosed dealing with a competitor for the
same good or service.

    A close review of the Third Circuit’s approach also
underscores that the “de facto” exclusive dealing theory is of
no use to Aerotec. In ZF Meritor, for instance, the question
was whether long-term agreements that “did not expressly
require the [purchasers] to meet . . . market penetration
targets . . . were as effective as mandatory purchase
requirements.” 696 F.3d at 282. The court concluded they
were because no buyer could “afford to lose” the seller’s
business, and thus the conditional discounts and unilateral
cancellation provision effectively coerced buyers to enter into
contracts with onerous terms, such as five-year commitments.
20          AEROTEC INT’L V. HONEYWELL INT’L

Id. at 283. Just as in any exclusive dealing claim, however,
the court first had to be satisfied that specific features of the
agreement required exclusivity. Accordingly, the court
examined the terms of the agreements in detail, focusing on
their duration, the high market-share targets (at least 80
percent and up to 97.5 percent), and other specific terms
granting preferential treatment to the seller in subsequent
sales. Id. at 286–88. The same was true in LePage’s, where
the Third Circuit recognized that extensive “all-or-nothing”
discounts and rebates were not express exclusivity terms, but
still looked to evidence that buyers understood offers as
conditional on the buyer foregoing purchases from competitor
manufacturers of tape, 324 F.3d at 158–59, and in Dentsply,
where the court recognized that a condition of only carrying
the seller’s product imposed in a “series of independent sales”
was sufficient to make the exclusive condition as effective as
if it was articulated in a written contract, 399 F.3d at 193.
Unlike in those cases, the record here is missing evidence of
contracts, the claimed extra-contractual conditions, or
preferential treatment terms.

II. Section 2 of the Sherman Act

    Section 2 of the Sherman Act makes it illegal to
“monopolize . . . any part of the trade or commerce among
the several States.” 15 U.S.C. § 2. For liability to attach, a
defendant must (1) possess monopoly power and (2) use that
power “to foreclose competition, to gain a competitive
advantage, or to destroy a competitor.” Kodak, 504 U.S. at
482–83 (quoting United States v. Griffith, 334 U.S. 100, 107
(1948)). In considering Aerotec’s claims, we assume without
deciding that Honeywell possesses monopoly power in the
market for APU parts.
           AEROTEC INT’L V. HONEYWELL INT’L                 21

    Aerotec asserts what it describes as “a refusal-to-
deal/essential-facilities theory,” claiming that refusal is
proved via intent to foreclose competition or through
Honeywell’s control of parts, an essential input. This novel
framing of Aerotec’s § 2 claim is an effort to sidestep the
reality that there was no actual refusal to deal. Instead,
Aerotec attacks Honeywell’s business terms as a “de facto”
refusal that is revealed by Honeywell’s intent to squash
independent firms. Aerotec’s premise runs afoul of long-
standing precedent that “as a general matter, the Sherman Act
‘does not restrict the long recognized right of [a] trader or
manufacturer engaged in an entirely private business, freely
to exercise his own independent discretion as to parties with
whom he will deal.’” Verizon Commc’ns Inc. v. Law Offices
of Curtis V. Trinko, LLP, 540 U.S. 398, 408 (2004)
(“Trinko”) (quoting United States v. Colgate & Co., 250 U.S.
300, 307 (1919)). As we noted in MetroNet Services, the
Supreme Court has exercised considerable caution in
recognizing exceptions to this broad principle for three core
reasons: 1) compelled sharing of the resources generating a
competitive advantage undermines the purpose of antitrust
law by reducing incentives to invest in those resources;
2) compelled sharing puts federal courts in the role of central
planners despite their being ill-equipped to assume this role;
and 3) the compelled sharing may actually provide
opportunities for collusion, which is the “‘supreme evil of
antitrust.’” MetroNet Servs. Corp. v. Qwest Corp., 383 F.3d
1124, 1131 (9th Cir. 2004) (quoting Trinko, 540 U.S. at
407–08).

   A. Section 2 of the Sherman Act—Refusal to Deal

   In light of the Supreme Court’s reluctance to impose a
duty to deal—Trinko declared the Sherman Act as “the
22          AEROTEC INT’L V. HONEYWELL INT’L

Magna Carta of free enterprise,” 540 U.S. at 415 (internal
quotations omitted)—Aerotec attempts to shoehorn
Honeywell’s alleged conduct (i.e., “withholding of parts and
technical data, onerous payment terms, and pricing
penalties”) into the narrow exception recognized in Aspen
Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585
(1985). In Aspen Skiing, the defendant—who owned three of
the four ski resorts in the market—discontinued a joint lift-
ticket package with a smaller rival, the only other competitor
in the market, and then flatly refused to sell the rival any lift
tickets so it could create its own bundles. 472 U.S. at
592–94.     It is no wonder that the Supreme Court
characterized this “limited exception” as “at or near the outer
boundary of § 2 liability.” Trinko, 540 U.S. at 409.

     Aspen Skiing offers no relief here. Aerotec simply did not
like the business terms offered by Honeywell, especially after
things began to change in 2007. But this “business pattern”
can hardly be characterized as so onerous as to be tantamount
to the conduct in Aspen Skiing. Aerotec’s vague requested
remedy that we “order Honeywell to provide parts, data, and
prices like it did before 2007,” reveals the problems with
Aerotec’s refusal to deal claim: providing any meaningful
guidance to Honeywell and ordering it to artificially create
pre-2007 market conditions would require the courts to play
precisely the kind of “central plann[ing]” role that courts are
“ill suited” to play. Id. at 408. As the Supreme Court has
repeatedly emphasized, there is “no duty to deal under the
terms and conditions preferred by [a competitor’s] rivals,”
Pac. Bell Tel. Co. v. linkLine Commc’ns, Inc., 555 U.S. 438,
457 (2009); there is only a duty not to refrain from dealing
where the only conceivable rationale or purpose is “to
sacrifice short-term benefits in order to obtain higher profits
            AEROTEC INT’L V. HONEYWELL INT’L                  23

in the long run from the exclusion of competition,” MetroNet
Servs., 383 F.3d at 1132.

    Sensing the deficiencies in its theory, Aerotec argues that
intent to foreclose competition is sufficient to establish § 2
liability. While it is true that intent is a necessary element of
attempted monopolization, it is not sufficient alone to
establish liability. Competitors are not required to engage in
a lovefest; indeed, “[e]ven an act of pure malice by one
business competitor against another does not, without more,
state a claim under the federal antitrust laws.” Brooke Grp.
Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209,
225 (1993). As the Tenth Circuit noted in rejecting a claim
similar to the one here, “[w]ere intent to harm a competitor
alone the marker of antitrust liability, the law would risk
retarding consumer welfare by deterring vigorous
competition.” Novell, Inc. v. Microsoft Corp., 731 F.3d 1064,
1078 (10th Cir. 2013). By its very terms, § 2 of the Sherman
Act regulates anti-competitive conduct, not merely anti-
competitive aspirations or an independent decision on terms
of dealing with a competitor.

    B. Section 2 of the Sherman Act—Essential Facilities

    The essential facilities doctrine is one of the
circumstances in which plain English and antitrust lingo
converge. This theory is a variation on a refusal to deal
claim. It imposes liability where competitors are denied
access to an input that is deemed essential, or critical, to
competition. See Ferguson v. Greater Pocatello Chamber of
Commerce, Inc., 848 F.2d 976, 983 (9th Cir. 1988). Although
the Supreme Court has never recognized the doctrine, see
Trinko, 540 U.S. at 411, we have continued to treat it as
having a basis in § 2 of the Sherman Act. See MetroNet
24          AEROTEC INT’L V. HONEYWELL INT’L

Servs., 383 F.3d at 1129; see also Alaska Airlines, Inc. v.
United Airlines, Inc., 948 F.2d 536, 546 (9th Cir. 1991).

    To establish a violation of the essential facilities doctrine,
Aerotec must show (1) that Honeywell is a monopolist in
control of an essential facility, (2) that Aerotec, as
Honeywell’s competitor, is unable reasonably or practically
to duplicate the facility, (3) that Honeywell has refused to
provide Aerotec access to the facility, and (4) that it is
feasible for Honeywell to provide such access. MetroNet
Servs., 383 F.3d at 1128–29. Because mandating access, as
the essential facilities doctrine implies, shares the same
concerns as mandating dealing with a competitor, a facility is
essential “only if control of the facility carries with it the
power to eliminate competition in the downstream market.”
Alaska Airlines, 948 F.2d at 544.

    Aerotec reasons that APU parts are the “essential facility”
because, absent parts, “repairs are impossible.” According to
Aerotec, Honeywell uses a variety of tactics to put pressure
on the parts supply chain. As a “smoking gun,” Aerotec
emphasizes an internal Honeywell presentation outlining its
efforts to manage a complex, crowded, competitive
environment by controlling intellectual property, creating
barriers to entry, and managing the supply chain by limiting
parts availability.

    Aerotec’s claims fail for an obvious reason—a facility is
only “essential” where it is otherwise unavailable. City of
Anaheim v. S. Cal. Edison Co., 955 F.2d 1373, 1380 (9th Cir.
1992). In addition to substantial purchases of parts from
Honeywell, Aerotec has access to both PMA parts and OEM
aftermarket parts acquired from other servicers. For example,
in 2007 alone, Aerotec purchased $1,074,072 of PMA parts
           AEROTEC INT’L V. HONEYWELL INT’L                 25

and $9,347,661 of APU parts from vendors other than
Honeywell (compared with about $9,420,240 in parts from
Honeywell). Although Honeywell’s ordering process may
very well be “Kafkaesque,” as Aerotec believes, and
Honeywell may even provide priority access to certain
customers, Honeywell does not deny Aerotec access to APUs
or their component parts. Trinko teaches that “where access
exists, the [essential facilities] doctrine serves no purpose.”
540 U.S. at 411.

    In sum, there is no evidence that Aerotec is frozen out
of—or even faces a chill in accessing—the parts supply
chain. Thus, “[b]ecause reasonable access to the essential
facility exists—even if not in a way that is conducive to
[Aerotec]’s existing business model—[Aerotec] cannot
establish an essential facilities claim.” MetroNet Servs.,
383 F.3d at 1130.

   C. Section 2 of the Sherman Act—Bundled Discounts

    Both Honeywell and Aerotec offer bundled parts and
repairs. As we explained in Cascade Health, “[b]undling is
the practice of offering, for a single price, two or more goods
or services that could be sold separately.” 515 F.3d at 894.
Such bundling practices “generally benefit buyers because the
discounts allow the buyer to get more for less,” and they also
often “result in savings to the seller because it usually costs
a firm less to sell multiple products to one customer at the
same time than it does to sell the products individually.” Id.
at 895 (citing United States v. Microsoft Corp., 253 F.3d 34,
87 (D.C. Cir. 2001) (per curiam)).

   Because “[l]ow prices benefit consumers regardless of
how those prices are set, and so long as they are above
26         AEROTEC INT’L V. HONEYWELL INT’L

predatory levels,” Atl. Richfield Co. v. USA Petroleum Co.,
495 U.S. 328, 340 (1990), the Supreme Court has cautioned
against recognizing antitrust discounting claims except where
the “prices complained of are below an appropriate measure
of [a] rival’s costs” and where there is a “dangerous
probability” that the pricing firm will be able to “recoup[] its
investment” after it has successfully extinguished its
competitors through artificially low prices. Brooke Grp.,
509 U.S. at 222–24. As the Court has observed,

       [T]he costs of erroneous findings of
       predatory-pricing liability [are] quite high
       because the mechanism by which a firm
       engages in predatory pricing—lowering
       prices—is the same mechanism by which a
       firm stimulates competition, and, therefore,
       mistaken findings of liability would chill the
       very conduct the antitrust laws are designed to
       protect.

Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co.,
Inc., 549 U.S. 312, 320 (2007) (internal citations omitted).

    Like the negative tinge sometimes associated with
bundled campaign contributions, Aerotec endeavors to cast
Honeywell’s bundling behavior in a negative light. Despite
the common practice of bundling parts and repairs—routine
practice for both Honeywell and Aerotec—Aerotec claims
that because Honeywell controls the pricing in the parts
market, independent shops cannot compete with Honeywell’s
steep discounts on the bundles. In truth, Honeywell’s
discounts mirror the “lower cost structure” of Honeywell’s
vertical integration, and therefore reflect “competition on the
merits.” Brooke Grp., 509 U.S. at 223.
           AEROTEC INT’L V. HONEYWELL INT’L                 27

    Aerotec offers no credible evidence that Honeywell prices
repair services below cost. The transaction that Aerotec
claims led to below cost pricing on repairs was a Honeywell
repair bid to Avianca Airlines, which reflected a substantial
discount. Notably, the record does not include Honeywell’s
actual costs of labor and parts for this deal; Aerotec infers
that the prices must be below cost, whatever the costs might
be. Honeywell counters that the Avianca bid is not
comparable to a below-cost bid because it is part of a “Not-
to-Exceed” (“NTE”) agreement with the customer, wherein
Honeywell agreed to provide repair services and parts for a
price not to exceed a certain amount. Honeywell notes that,
as long as it makes a profit over the course of repeated repair
jobs with any one airline, it is pricing above cost. Honeywell
provided substantial evidence of its “Airline Sales Approval
Process,” through which it analyzes its NTE agreements and
ensures that it sets its bids in the aggregate above cost.
Honeywell also offered extensive evidence regarding its
positive revenues on the specific contracts Aerotec
challenges. In short, Aerotec’s single example, isolated and
out of context, is insufficient to support a predatory pricing
claim.

    Aerotec suggests that it does not matter what Honeywell’s
costs were because the discount on the Avianca bid was so
extreme that, if Aerotec priced repairs at cost, it would have
to offer repairs for less than $0 to compete with Honeywell’s
bundled bid. Aerotec relies on the discount attribution test
from Cascade Health, under which “the full amount of the
discounts given by the defendant on the bundle are allocated
to the competitive product or products” and the “resulting
price of the competitive product or products” is compared to
the “defendant’s incremental cost to produce them.”
515 F.3d at 906. But the math doesn’t add up here because
28          AEROTEC INT’L V. HONEYWELL INT’L

the discount attribution test does not apply in circumstances
like this where the parties offer the same bundle of goods and
services.

     As Cascade Health made clear, the discount attribution
test only applies where one of the competitors produces fewer
goods or services than the other competitor. See id. at 909
(“[T]he primary anticompetitive danger posed by a multi-
product bundled discount is that such a discount can exclude
a rival who is equally efficient at producing the competitive
product simply because the rival does not sell as many
products as the bundled discounter.” (emphasis added)). It
is the fact that the bundling competitor has exclusive capacity
to “bundle” multiple products and absorb the cost of the total
discount without experiencing a decline in profits that gives
rise to the possibility that it could force out a “hypothetical
equally efficient producer of the competitive product.” Id. at
906; see also Areeda & Hovenkamp, supra ¶ 749a.

    Here, Aerotec provides airlines with the same bundle that
Honeywell provides: parts and services. Honeywell’s ability
to offer discounts on its parts when they are bundled with
repair services is not categorically unavailable to Aerotec.
Aerotec need not sell the parts in its bundled packages for
cost if it is able to provide repair services more efficiently
than Honeywell. Indeed, Aerotec provided evidence that it
can and does outbid Honeywell, despite the fact that it must
acquire parts first. Aerotec claims that it “provides high
quality cost-effective repairs”: for instance, its “repairs last up
to 24% longer than competitors’, and its prices are 20%
lower.” Aerotec’s effort to invoke the discount attribution
framework yields an absurd result, and one that risks applying
our bundled discount jurisprudence to conduct far afield from
conduct “resembl[ing] the behavior that the Supreme Court
           AEROTEC INT’L V. HONEYWELL INT’L               29

in Brooke Group identified as predatory.” Cascade Health,
515 F.3d at 903.

    Without any evidence of below-cost pricing or anti-
competitive bundled discounting, Aerotec is left with only an
argument that Honeywell engages in unlawful conduct by
simultaneously charging a low (but above-cost) price for its
repair bundles and raising the wholesale price of replacement
parts to make it difficult or impossible for competitor
servicers to offer similarly low-priced repair bundles.
Although it disclaims making a “price squeeze claim,” this
argument is foreclosed by the Supreme Court’s decision in
linkLine. In linkLine, the Supreme Court rejected a “price-
squeeze” claim under which independent internet service
providers who purchased inputs from AT&T but also
competed against it in the retail outlet for certain digital
services alleged that AT&T used its market power in the
“upstream,” or wholesale, market to “squeeze its [retail]
competitors by raising the wholesale price of inputs while
cutting its own retail prices.” 555 U.S. at 449. The Court
held that “no such claim may be brought.” Id. at 442. As we
noted in applying linkLine, the case stands for the principle
that “there is no independently cognizable harm to
competition when the wholesale price and the retail price are
independently lawful.” Doe 1 v. Abbott Labs., 571 F.3d 930,
934–35 (9th Cir. 2009). Such is the case here.

III.   Robinson-Patman Act—Price Discrimination

    Aerotec alleges that Honeywell engages in secondary-line
price discrimination under the Robinson-Patman Act,
15 U.S.C. § 13(a), by giving Honeywell affiliates greater
discounts off catalog price for parts than it provides to
Aerotec and its fellow independent servicers. Secondary-line
30            AEROTEC INT’L V. HONEYWELL INT’L

price discrimination, which means a seller gives one
purchaser a more favorable price than another, requires
(1) sales in interstate commerce; (2) products of the same
grade and quality; (3) discrimination in price between two
buyers; and (4) injury. See Volvo Trucks N.A., Inc. v. Reeder-
Simco GMC, Inc., 546 U.S. 164, 176–77 (2006). Aerotec’s
claims fail on the third element because the only pricing
discrepancy between independent servicers and Honeywell’s
affiliates documented in any way in the record is attributable
to the benefits received by Honeywell (and its affiliates)
through long-term agreements.3

    We start by noting considerable confusion in the briefing
regarding the basis of the price discrimination claim. Aerotec
claims that Honeywell charges independent servicers an
across-the-board 15 percent premium which it does not
impose on affiliates. Not so. All repair servicers, affiliates or
not, are charged the 15 percent premium. In fact, the
15 percent premium is simply a lesser discount: airlines
receive a 50 percent discount off list price, and all

     3
       Although Honeywell claims that the “in commerce” requirement is
not met because a number of the sales are to foreign airlines or service
centers, it misapprehends the scope of this clause. For starters, a
significant number of Honeywell’s APU sales are to customers for use or
resale in the United States, although the parties have made no effort to fine
tune the documentation or segregate the sales. Because this claim fails on
other grounds, we need not parse the details of whether sales to
international airlines could, in some cases, qualify as sales “for use,
consumption, or resale” within the United States. 15 U.S.C. § 13(a).
Compare Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp.,
475 U.S. 574, 582 n.6 (1986) (“The Sherman Act does reach conduct
outside our borders, but only when the conduct has an effect on American
commerce.”) with Zoslaw v. MCA Distrib. Corp., 693 F.2d 870, 878 (9th
Cir. 1982) (holding that the “flow of commerce ends when goods reach
their intended destination” (internal quotations omitted)).
           AEROTEC INT’L V. HONEYWELL INT’L                31

servicers—whether affiliated or not—receive a 42.5 percent
discount. The difference between the two discounts is the
source of the 15 percent figure. Honeywell’s tiered pricing
structure therefore cannot serve as the basis of a price-
discrimination claim, at least insofar as Aerotec alleges that
Honeywell affiliates are the favored party.

    Aerotec presents another argument for price
discrimination between Honeywell affiliates and independent
servicers—that the long-term contracts Honeywell negotiates
with affiliates contain variable discounts off the price that
independent servicers receive on the spot market. This
argument fails because the contracts are not comparable.
Unlawful secondary-line price discrimination exists only to
the extent that the differentially priced product or commodity
is sold in a “reasonably comparable” transaction. Tex. Gulf
Sulphur Co. v. J.R. Simplot Co., 418 F.2d 793, 807 (9th Cir.
1969). Quite sensibly, courts have held that “a seller is not
obligated to charge the same prices for a commodity if its
sales contracts with different buyers contain materially
different terms,” as they do when a seller and purchaser
choose the relative stability of a long-term contract over
individual transactions in a “spot market.” Coal. For a Level
Playing Field, LLC v. AutoZone, Inc., 737 F. Supp. 2d 194,
212 (S.D.N.Y. 2010) (citing Coastal Fuels of P.R., Inc. v.
Caribbean Petrol. Corp., 990 F.2d 25, 27 (1st Cir. 1993)).

    Aerotec is mistaken in its premise that any transactional
differences are not reflective of materially different terms.
For example, servicers under an affiliate contract are subject
to substantial obligations that are not imposed on independent
repair shops like Aerotec. These may include payment of
license/royalty fees, maintenance of insurance, exclusive use
of Honeywell parts, and compliance with policies,
32         AEROTEC INT’L V. HONEYWELL INT’L

regulations, and procedures promulgated by Honeywell.
Aerotec provided no examples of any spot sales between
independent servicers and Honeywell that could be fairly
compared to the terms and prices that were individually
negotiated in agreements between Honeywell and its
affiliates. As such, its claims for price discrimination fail.

IV.     State Law Claims

    Although Aerotec brought several claims under Arizona
state law, it acknowledged at oral argument that success on
the state antitrust claims rises and falls with the outcome of
the federal claims. Likewise, Aerotec has been candid that its
tortious interference claims live or die based on its federal
antitrust claims. Because we affirm the district court’s award
of summary judgment in favor of Honeywell on all of
Aerotec’s federal antitrust claims, we likewise affirm the
court’s award of summary judgment on the Arizona antitrust
claims and dismissal of the tort claims.

                        CONCLUSION

    There is no real dispute that Aerotec was a competitor to
Honeywell, albeit a small one, in the APU repair market. But
the antitrust laws require injury to competition, not merely
injury to a competitor. Aerotec’s claims fail both as a matter
of law and because it failed to marshal evidence of genuine
issues of material fact on its tying, exclusive dealing, refusal
to deal, bundled discount, and pricing discrimination claims.

      AFFIRMED.