Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Town Sound and Custom Tops, Inc. v. Chrysler Motors Corp.

filed: March 26, 1992; As Corrected May 4, 1992. Second Correction July 2, 1992.


On Appeal from The United States District Court for the Eastern District of Pennsylvania. (D.C. Civil No. 88-00083). November 13, 1991, Reargued, In Banc

Argued December 14, 1990 Before: Sloviter, Chief Judge,*fn* Mansmann, Circuit Judge, and Sarokin, District Judge.*fn** Reargued November 13, 1991 Before: Sloviter, Chief Judge, and Becker, Stapleton, Mansmann, Greenberg, Hutchinson, Scirica, Cowen, Nygaard, Alito, and Roth, Circuit Judges.

Author: Becker


BECKER, Circuit Judge.

Until the mid-1970s, Chrysler Motors Corporation ("Chrysler") and other leading American automobile manufacturers sold car radios as options that were priced separately from the rest of the cars' standard features. By the mid-1980s, however, Chrysler began to include factory-installed sound systems as a standard feature of its models. Today the price of a sound system is included in the base price of virtually all Chryslers, Plymouths, and Dodges ("Chrysler cars"). Whereas car buyers could formerly purchase Chrysler cars without sound systems and buy their own systems from independent autosound dealers, now they cannot even receive credit on a car's price for deleting the sound system. The independent autosound dealers have accordingly seen consumer demand for their products and services decline.

As a result, the plaintiffs, a group of independent autosound dealers, sued Chrysler in the district court for the Eastern District of Pennsylvania, claiming that Chrysler has illegally restrained commerce by conditioning the sale of Chrysler cars on the purchase of Chrysler-supplied autosound systems. Their complaint avers that Chrysler's actions force purchasers of Chrysler cars to accept inferior and overpriced Chrysler-supplied sound systems, resulting in harm to consumers as well as to the independent dealers themselves. Specifically, the plaintiffs claim that Chrysler has tied the sales of Chrysler cars and automobile sound systems for Chrysler cars in violation of section 1 of the Sherman Act, 15 USC § 1 (1988), and section 3 of the Clayton Act, 15 USC § 14 (1988). They seek certification as class representatives and, eventually, treble damages, injunctive relief, costs, and attorneys' fees.

Upon consideration of Chrysler's motion for summary judgment, the district court ruled that because Chrysler lacked market power in both the tying product market (all automobiles sold domestically) and the tied product market (all autosound systems sold domestically), the plaintiffs could not succeed under either "per se" or rule of reason theories of antitrust liability. It accordingly denied the plaintiffs' request for class certification and entered a final judgment for Chrysler. On appeal, a panel of this court unanimously affirmed the district court's ruling on the "per se" theory but reversed on the rule of reason theory. Chrysler sought and obtained an order granting rehearing in banc, which vacated the panel opinion.

We agree with the district court that Chrysler possesses insufficient tying market power to violate the Sherman Act on a "per se" theory. We also believe that in some cases a tying claim based on the rule of reason may survive summary judgment when the seller lacks power in the tying product market. We nevertheless hold that these plaintiffs' allegations, when combined with indisputable evidence of market structure, are insufficient to withstand Chrysler's motion for summary judgment. Although the plaintiffs have proffered some evidence of harm to themselves and to consumers from the tie-in, they do not offer any theory of how Chrysler caused them an injury cognizable under the antitrust laws, as the Supreme Court's jurisprudence requires. This reasoning applies equally to the plaintiffs' Clayton Act claim. Accordingly, we will affirm the district court's summary judgment for Chrysler in its entirety.



From the early days of the automotive industry until the mid-1970s, automobile manufacturers produced and sold virtually all of the sound systems for use in their cars. During that era, each company's car radios were separately priced, add-on options for its new cars. Around the mid-1970s, however, perhaps as a result of the increasing sophistication of stereophonic equipment and of consumer tastes, independent companies began to manufacture, distribute, and sell various autosound products, including AM and FM car radios, cassette decks, and, eventually, compact disc systems. Some of these independently produced sound systems were sold to auto manufacturers which installed them at the factory; others were sold and installed in a vigorous "aftermarket," either directly to the retail public or indirectly through local car dealerships.

The plaintiffs seek to be representatives of a class of independent (non-Chrysler-franchisee) autosound dealers who have competed since 1984 with Chrysler in the sale of automotive sound equipment for installation into Chrysler cars sold in the United States. All four of the named plaintiffs distribute autosound equipment to and install that equipment for local automobile dealerships; three also sell autosound systems directly to the public. Chrysler is the third largest American manufacturer of automobiles, accounting for between 10 and 12 percent of the total American market for cars between 1983 and 1987 (the market consisting of domestic sales of cars of either foreign or domestic manufacture). Chrysler both manufactures its own autosound equipment and purchases autosound equipment from the independent manufacturers, which also supply the plaintiffs.

The parties agree on the basic facts about Chrysler's autosound sales practices. Until the mid- to late 1970s, Chrysler customers could purchase cars with or without sound systems. They could easily purchase a Chrysler car with a factory-installed sound system, with a dealer-installed sound system (of either Chrysler or independent manufacture), or with no sound system at all. If they chose a Chrysler car without a sound system, they would not be charged for one and therefore could purchase a different sound system on the retail aftermarket with no financial penalty.

By 1978, however, Chrysler, along with other auto manufacturers, began to standardize autosound equipment -- that is, it included what had been a separately priced sound system option into the base price of the vehicle. When a feature is standard, no credit for deleting it is permitted. The 1979 settlement of litigation brought by aftermarket autosound dealers against other automobile manufacturers resulted in Chrysler's agreement that it would either make autosound systems entirely optional or offer a "delete option" for sound systems on many of its models.*fn1 The delete option, however, by its nature had no effect on those buyers who were unaware of it, or on the sizeable percentage of less patient buyers who preferred to purchase out of dealer inventories rather than to special-order their cars.

Chrysler's arrangement with aftermarket representatives expired in 1983, and, starting with the 1984 model year, it steadily began to eliminate the sound system delete option on virtually all of its models and to upgrade the standard sound equipment on many models. According to the plaintiffs, by 1986, 95.9 percent of Chrysler cars were delivered to dealers with factory-installed sound systems, in comparison to 88.5 percent in 1979 (before the agreement with the aftermarket) and 67.2 percent in 1981 (during the agreement). Under Chrysler's revised sound system sales practices, dealers do not receive a credit for sound systems that they remove unless the customer upgrades to another sound system supplied by Chrysler. As a result, although a Chrysler buyer may still remove the factory-installed sound system and purchase a different one on the aftermarket, he or she will then have paid for two sound systems.

In this suit, filed on January 7, 1988, the plaintiffs challenge Chrysler's autosound sales practices dating from January 1, 1984 as a tie-in arrangement that is illegal under the antitrust laws. They allege, in essence, that automobiles and autosound equipment are separate products, and that by tying the two, Chrysler has insulated itself from competition with respect to autosound systems for its cars, thereby depriving consumers of choice and inhibiting technological innovation. In the plaintiffs' view, Chrysler is foisting inferior and overpriced sound systems on the Chrysler-buying public and seriously threatening the viability of its aftermarket competitors. According to the plaintiffs, because the value of the sound system is so small relative to that of the entire car, many consumers do not consider autosound systems at all. Many car buyers decide on the car first and only consider the sound system later, and therefore may tolerate or be ignorant of Chrysler's inferior product. Moreover, the plaintiffs suggest, buyers who do care about their sound systems are unable to determine how good a deal they are getting because Chrysler's inclusion of the sound system in the base price of the whole car hides the price of the autosound system.

In legal terms, the plaintiffs' claims rest on section 1 of the Sherman Act, 15 USC § 1, which generally outlaws "every contract . . . in restraint of [interstate or international] trade or commerce," and section 3 of the Clayton Act, 15 USC § 14, which proscribes tying the sale of one good to another "where the effect . . . may be to substantially lessen competition or tend to create a monopoly . . . ."*fn2 The plaintiffs contend that Chrysler's sales practices are illegal under both "per se" and rule of reason theories of antitrust liability. They seek an injunction, treble damages, costs, and attorneys' fees under sections 4 and 16 of the Clayton Act, 15 USC §§ 15 and 26.

Chrysler, for purposes of its July 15, 1988 motion for summary judgment, conceded that it has tied the sale of new Chrysler cars to the purchase of a separate product, Chrysler-installed autosound systems.*fn3 Chrysler also conceded, again for purposes of the motion, that this tying arrangement affects a substantial amount of interstate commerce. It sought summary judgment solely on the ground that the plaintiffs could not show harm to competition as a result of its autosound sales practices.

Generally, Chrysler contends that the plaintiffs did not allege and cannot prove that Chrysler has economic power in a properly defined tying product market. That market, it submits, consists of all new automobiles (in contrast to the plaintiffs' proposed market definition, which includes only new Chrysler cars). Chrysler argues that because it lacks the power to influence prices in the automobile market, it cannot exploit any "leverage" arising from that market. Chrysler also contends that it has no power in the tied product market, which it correspondingly defines as all autosound products (as opposed to the the plaintiffs' coordinate one-brand definition consisting only of autosound products for Chrysler cars). Therefore, concludes Chrysler, it is economically incapable of causing any significant economic harm in the autosound market, even by a manner other than leveraging.

In doctrinal terms, Chrysler contends that for its tying arrangement to be illegal "per se" under the Sherman Act, as the plaintiffs allege, the Supreme Court case law requires a showing of tying market power. Because the plaintiffs' submissions do not raise a triable issue on that factual question, says Chrysler, it is entitled to summary judgment on that theory. Chrysler also claims that its lack of tying market power is equally fatal to the plaintiffs' rule of reason theory of liability under the Sherman Act, and that in any event, Chrysler's indisputable lack of market in both the tying (automobile) and tied (autosound) markets entitles it to summary judgment. Finally, Chrysler argues that the standards for liability under the Sherman and Clayton Acts are identical, hence it is entitled to summary judgment on the Clayton Act claim as well.

The district court agreed with Chrysler and entered summary judgment for Chrysler on all counts. See Town Sound & Custom Tops, Inc. v. Chrysler Motor Corp., 743 F Supp 353 (E.D. Pa. 1990). It defined the relevant tying product market to include "all automobile manufacturers which compete with Chrysler for the sale of automobiles in the United States," id at 357, and found that Chrysler lacked economic power in that market, id at 358-59. Because Chrysler lacked tying market power, the district court held that the plaintiffs could not sustain a "per se" claim of tying liability. Id at 359.

The district court then addressed the plaintiffs' rule of reason theory. Consistent with its approach to defining the tying product market (that is, rejecting the concept of a Chrysler-only market), the district court defined the tied product market as "all sound equipment sold in the United States for installation in automobiles." Id at 360. It also concluded that Chrysler was in no position to restrain trade in the tied product market as thus defined, and thus was entitled to summary judgment. Id at 361. As an alternative ground supporting summary judgment, the court held that Chrysler's lack of market power in the automobile market disposed of the rule of reason claim as well as the "per se" claim. Id at 360-61. Finally, it concluded that the plaintiffs could not succeed on a claim under section 3 of the Clayton Act without proof of tying market power. Id at 361-62. The court also denied the plaintiffs' pending motions for class action certification and for compulsion of certain discovery, including production of cost and profit information on Chrysler's autosound sales.

We now exercise plenary review of the district court's summary judgment. If we find a genuine issue of material fact such that a reasonable jury could return a verdict for the plaintiffs, then we must reverse and remand for further proceedings. F.R.C.P. 56. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-52, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986).


We first consider the plaintiffs' claim that Chrysler's practices violate the antitrust laws "per se."

A. The Nature of a "Per Se" Tying Claim

Tying is defined as selling one good (the tying product) on the condition that the buyer also purchase another, separate good (the tied product). See, for example, Bogosian v. Gulf Oil Corp., 561 F.2d 434, 449 (3d Cir 1977). Courts have traditionally expressed great concerns about the possible anticompetitive effects of tying arrangements, at least those in poorly functioning or uncompetitive markets.*fn4 Their fear has centered on sellers who have market power in one product market and seem intent on exploiting that power in another market. See, for example, Times-Picayune Publishing Co. v. United States, 345 U.S. 594, 611, 73 S. Ct. 872, 97 L. Ed. 1277 (1953) ("The essence of illegality in tying agreements is the wielding of monopolistic leverage; a seller exploits his dominant position in one market to expand his empire into the next."). Even if a seller has obtained a monopoly in the tying product legitimately (as by obtaining a patent), courts have seen the expansion of that power to other product markets as illegitimate and competition-suppressing. See, for example, United States v. Paramount Pictures, 334 U.S. 131, 156-59, 68 S. Ct. 915, 92 L. Ed. 1260 (1948); International Salt Co. v. United States, 332 U.S. 392, 395-96, 68 S. Ct. 12, 92 L. Ed. 20 (1947).

The cases thus reveal a concern that a monopolist in the tying product market may use that leverage to garner sales in a second market, thereby foreclosing competitors and monopolizing the formerly competitive tied product market too. At least, the courts fear, the arrangement may raise barriers to entry to the tied product market because new entrants would have to sell both tied and tying products to compete. See, for example, Fortner Enterprises v. United States Steel Corp., 394 U.S. 495, 513, 89 S. Ct. 1252, 22 L. Ed. 2d 495 (1969) (" Fortner I ") (White Dissenting). Use of a tie-in may enable a producer with monopoly power to force its full line on customers.*fn5 Id at 513-14. Finally, another fear has been that the second monopoly could impede innovation in the tied product market by reducing competitive pressure in that market.

Tying may also provide a way for a monopolist to hide other activities that are either illegal or disfavored by the law. For example, a monopolist may also use a tie to increase its profits by indirect price discrimination, a practice that the Robinson-Patman Act, 15 USC § 13 (1988), significantly restricts.*fn6 Even non-monopolists may seek to evade price or other regulatory controls in the tying product market by hiding the inflated price in the tied product's price. Fortner I, 394 U.S. at 513 (White Dissenting).*fn7

Although past cases have also spoken of the evils of foreclosing consumer choice (for example, Northern Pacific Railway Co v. United States, 356 U.S. 1, 6 78 S. Ct. 514, 2 L. Ed. 2d 545 (1958); Times-Picayune, 345 U.S. at 605, 73 S. Ct. at 878), more recent Supreme Court cases have primarily concerned themselves with that danger when a seller leverages economic power from one market to another. The reason is that if the seller has no control over the tying product market, the customer ordinarily has a realistic option to go elsewhere to buy both the tying and tied products. As Justice Stevens wrote in the majority opinion in Jefferson Parish :

Our cases have concluded that the 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 for the tied item is restrained and the Sherman Act is violated.

466 U.S. at 12. See also Fortner I, 394 U.S. at 512-14 (White Dissenting) (cited approvingly by the Jefferson Parish majority, 466 U.S. at 13 n.19 [Footnote Omitted] ).

In sum, the Supreme Court's primary concern with tying arrangements has always been the use of tie-ins to abuse power in the tying product market. Accordingly, it has

condemned tying arrangements when the seller has some special ability -- usually called "market power" -- to force a purchaser to do something that he would not do in a competitive market. . . . When the seller's power is just used to maximize its return in the tying product market, where presumably the product enjoys some justifiable advantage over its competitors, the competitive ideal of the Sherman Act is not necessarily compromised. But if that power is used to impair competition on the merits in another market, a potentially inferior product may be insulated from competitive pressures.

Jefferson Parish, 466 U.S. at 13-14 (citations omitted). The Court long ago established a so-called "per se" rule against tying arrangements in cases where it thought exploitation of leverage is "probable," id at 15.

The hornbook rule thus provides that where (1) a defendant seller ties two distinct products; (2) the seller possesses market power in the tying product market; and (3) a substantial amount of interstate commerce is affected, then the defendant's tying practices are automatically illegal without further proof of anticompetitive effect. See, for example, Northern Pacific, 356 U.S. at 5; Bogosian, 561 F.2d at 449. For other statements of the "per se" rule, see Fortner I, 394 U.S. at 498-99, and the other cases cited in Jefferson Parish, 466 U.S. at 10 n.14 [Footnote Omitted]

The rule in tying cases is not, however, like other, truly per se rules in antitrust law.*fn8 For example, naked horizontal price fixing is condemned with no inquiry at all into market structure or the activity's actual effect or possible justifications. The rationale for true per se rules is that the challenged conduct has so little chance of being economically beneficial and so great a likelihood of being economically harmful that inquiry into market structure and real world effect is not worth the cost. See, for example, Jefferson Parish, 466 U.S. at 15 n.25 [Footnote Omittted] ; Arizona v. Maricopa County Medical Society, 457 U.S. 332, 350-51, 102 S. Ct. 2466, 73 L. Ed. 2d 48 (1982). The "per se" rule against tying goes only halfway, however: the inquiry into tying product market structure (which is frequently costly and time-consuming) is still required, but if the defendant is found to have market power there, the plaintiff is, in theory, relieved of proving actual harm to competition and of rebutting justifications for the tie-in.

Because the Supreme Court has always recognized that tie-ins in competitive markets are not necessarily dangerous, it has declined to ban all tie-ins. Moreover, although the Court initially adopted the "per se" rule in part because it thought that "tying agreements serve hardly any purpose beyond the suppression of competition," see Standard Oil Co. v. United States, 337 U.S. 293, 305, 69 S. Ct. 1051, 93 L. Ed. 1371 (1949), it has not always been so strict in applying the "per se" rule in tying cases even where the rule's preconditions are met. See, for example, United States v. Jerrold Electronics Corp., 365 U.S. 567 , 81 S. Ct. 755, 5 L. Ed. 2d 806 (1961) (per curiam), aff'g 187 F Supp 545 (ED. Pa. 1961) ("per se" rule not applicable when rule of reason inquiry inexpensive and conduct that was necessary to establish a new industry was clearly reasonable while in effect). The lower courts have recognized, in effect, a host of defenses to "per se" tying claims. See generally 9 Phillip E. Areeda, Antitrust Law para. para. 1722-1727 at 285-368 (Little Brown, 1991) (listing exceptions recognized where foreclosure of the tied product market is zero or minimal or the seller had no financial interest in the suppliers of the tied product).

Over time, many commentators and the Antitrust Division of the Justice Department have suggested that even tie-ins in concentrated markets may serve procompetitive purposes, such as quality control, production and sales efficiencies, and facilitation of indirect price competition. In the critics' view, the "per se" rule, weak and riddled with exceptions though it may be, is overinclusive.*fn9 Four Concurring Justices in Jefferson Parish similarly sought to abandon the "per se" approach altogether because it is not truly per se and may condemn too much legitimate conduct. See 466 U.S. at 32-42 (O'Connor Concurring) (favoring rule of reason analysis for all tying arrangements).

Nonetheless, a majority of the Supreme Court has been steadfast thus far in its refusal to jettison either the traditional "per se" nomenclature or the traditional formulation of the test. See Jefferson Parish, 466 U.S. at 9-11 (majority opinion); id at 32 (Brennan, joined by Marshall, Concurring). Thus, we must apply the traditional "per se" rule (with its recent glosses) unless and until the Supreme Court decides to do away with it. We now apply that doctrine to the facts of this case.


The Structure of the Tying Product Market

Because Chrysler has conceded the existence of a tie and that a substantial amount of interstate commerce is affected, it contests only one of the three elements of the "per se" liability test. To prevail on summary judgment on the "per se" claim, Chrysler must show that the plaintiffs raise no triable issue regarding Chrysler's power in the tying product market. The plaintiffs note that the requirement of market power is really shorthand for an inquiry into the ability to force unwanted products on consumers. It follows, they say, that because the ultimate issue of forcing is in dispute, we need not detain ourselves by defining the tying product market and investigating Chrysler's economic power therein. The plaintiffs cite language in Jefferson Parish that seems to define "market power" as a "special ability to force a purchaser to do something that he would not do in a competitive market." 466 U.S. at 13-14.*fn10 They then point to a number of affidavits in the summary judgment record that they claim (1) tend to show that some consumers are forced to take unwanted autosound systems, hence (2) raise an inference of tying market power, and therefore (3) raise a triable issue as to the presence of a "per se" violation of the Sherman Act. In short, they contend that the district court misapprehended the teachings of Jefferson Parish by insisting upon examining preliminary issues regarding market structure when there was plenty of direct evidence of market power and forcing.

In our view, the plaintiffs, not the district court, have misread Jefferson Parish. Justice Stevens's majority opinion specifically cautioned against considering market power "in some abstract sense," and in a footnote more precisely defined market power as the seller's ability to sustain prices above levels that would be charged in a competitive market. 466 U.S. at 27 & n.46 [Footnote Omitted] See also Fortner II, 429 U.S. at 620 (similar definition). The plaintiffs have it backwards: the Supreme Court has told us to look at market power to see whether courts should presume economic harm and rule "per se" for plaintiffs. Direct inquiry into forcing or other harm to competition is what the "per se" analysis is supposed to obviate, although such an approach is appropriate for a rule of reason claim, as we will discuss in Part III.

To determine the existence of market power for purposes of the "per se" test, then, we must first define the relevant tying product market and inquire into whether Chrysler has power over price in that market.*fn11 Chrysler deserves summary judgment if it can establish that, as a matter of indisputable fact, it lacks sufficient power in the tying product market (as properly defined) to create a triable "per se" claim.*fn12

The Supreme Court has given us considerable guidance on what constitutes sufficient tying market power to condemn a tie "per se." As the Court noted in Jefferson Parish, courts have typically found sufficient economic power in the tying market to condemn tying arrangements "per se" when: (1) the defendant has a patent or other government-granted monopoly over a product; (2) the defendant's share of the market is so high that it occupies a dominant market position; or (3) the defendant offers a unique product or possesses a market advantage not shared by its competitors. 466 U.S. at 16-17. As the first and the third factors demonstrate, the questions of market definition and market power may blend. If a defendant offers a unique and nonreplicable product, for example, other products may not be adequate substitutes for it, and hence are not part of the same market.*fn13

The plaintiffs' basic theory is that the relevant tying product market consists only of new Chrysler cars manufactured for sale in the United States.*fn14 If the market were so defined, of course Chrysler would have market power, being the sole seller. But such a narrow definition makes no sense in terms of real world economics, and as a matter of law we cannot adopt it.

The plaintiffs do not contend, nor seriously could they, that Chrysler's patents on several car components make Chrysler cars a one-brand market or give Chrysler any market power. They do contend, however, that CHRYSLER, PLYMOUTH, and DODGE are popular trademarks, making Chrysler cars unique products with an advantage not shared by would-be competitors, and hence infusing Chrysler with market power. But "a prestigious trademark is not itself persuasive evidence of economic power" because a trademark, unlike a patent, protects only the name or symbol and not the product itself. Mozart Co. v. Mercedes-Benz of North America, Inc., 833 F.2d 1342, 1346 (9th Cir 1987). Chrysler cars may be "unique" in a broad sense of the term, but "uniqueness confers economic power only when other competitors are in some way prevented from offering the distinctive product themselves." Fortner I, 394 U.S. at 505 n.2 [Footnote Omitted] Despite Chrysler's trademark, GM, Ford, Toyota, Honda, and other auto manufacturers are perfectly capable of producing functionally similar and competitive products. The plaintiffs offer no evidence that Chrysler's marks are so strong that consumers consider Chrysler's products wholly distinct and not competitive with other manufacturers' cars.*fn15

Moreover, the plaintiffs' proposed market definition conflicts with principles of market definition that are well-established in antitrust law. The relevant product market includes Chrysler cars and cars that are reasonably interchangeable with Chrysler cars. See United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 404, 76 S. Ct. 994, 100 L. Ed. 1264 (1956). In technical terms, the market also includes other manufacturers' vehicles that have a significant cross-price elasticity of demand with Chrysler cars. Id at 400. Put more simply, a market also includes actual or potential competitors who may take business away from each other. SmithKline Corp. v. Eli Lilly & Co., 575 F.2d 1056, 1063 (3d Cir. 1978).

Except in rare circumstances, courts reject market definitions consisting of one supplier's products where other brands compete. One of the classic cases, in fact, dealt with automobile brands. In Packard Motor Car Co. v. Webster Motor Car Co., 100 App. D.C. 161, 243 F.2d 418 (DC Cir 1957), the court rejected a market definition consisting only of Packard automobiles precisely because other cars were "reasonably interchangeable by consumers for the same purposes." Id at 420 (applying the du Pont test). Proposed Chrysler-only product market definitions have fared no better in the courts. See Kingsport Motors, Inc. v. Chrysler Motors Corp., 644 F.2d 566, 571 (6th Cir 1981); Merit Motors, Inc. v. Chrysler Corp., 417 F Supp 263, 269-70 (DDC 1976), aff'd, 187 App. D.C. 11, 569 F.2d 666 (DC Cir 1977). See also Mogul v. General Motors Corp., 391 F Supp 1305, 1313 (ED. Pa. 1975) (relevant product market could not be limited to Cadillacs), aff'd without published opinion, 527 F.2d 645 (3d Cir. 1976) (table).

Most tellingly, in this case Chrysler has offered unrebutted affidavits confirming what everyone who watches television or goes to an automobile dealership already knows -- that Chrysler cars compete vigorously with many other companies' automobiles. Chrysler's affidavits demonstrate that new car buyers commonly compare Chrysler cars with other cars; that Chrysler's sales depend on its cars' comparative prices and features; that Chrysler's advertising compares the price and features of its autos with other companies'; that the media perceive Chrysler as competing with other brands; and that Chrysler's pricing is constrained by the prices its competitors charge for comparable automobiles. We conclude that the district court was correct to define, as a matter of law, the tying product market to include all new automobiles sold in the United States.*fn16

The Supreme Court has also suggested that courts consider evidence of market share when determining the existence of tying market power. Jefferson Parish, 466 U.S. at 17, 26-27. Here it is uncontroverted that over the relevant time period, Chrysler-manufactured cars accounted for only 10-12 percent of the automobiles sold in the United States. In Jefferson Parish, the Court held that the defendant hospital's 30 percent market share showed that it lacked the "kind of dominant market position that obviates the need for further inquiry into actual competitive conditions." Id at 27. See also Times-Picayune, 345 U.S. at 612-13 (newspapers' 33-40 percent share of advertising market insufficient to invoke "per se" rule). Certainly Chrysler's small share of the domestic automobile market provides unrefuted evidence that it lacks power in the tying product market.*fn17

The plaintiffs nonetheless contend that the definition of the tying product market and the existence of market power therein are issues of fact that we should not weigh and should leave to the jury to decide. The question of market power is certainly dependent on factual findings, and some older cases did state that summary judgments against plaintiffs are particularly disfavored in complex antitrust cases. See, for example, Fortner I, 394 U.S. at 500 (citing Poller v. CBS, Inc., 368 U.S. 464, 473, 82 S. Ct. 486, 7 L. Ed. 2d 458 (1962)). But many courts, including the Supreme Court, have more recently held defendants entitled to summary judgment in antitrust cases. See, for example, Matsushita Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986); First National Bank of Arizona v. Cities Service Co., 391 U.S. 253, 289-90, 88 S. Ct. 1575, 20 L. Ed. 2d 569 (1968); Collins v. Associated Pathologists, Ltd., 844 F.2d 473, 475 (7th Cir. 1988). It may be that because antitrust cases are so factually intensive that summary judgment occurs proportionately less frequently there than in other types of litigation, but the standard of F.R.C.P. 56 remains the same.

In our view, the plaintiffs' submissions do not establish any genuine issue of material fact as to Chrysler's economic power in the automobile market. We therefore conclude that Chrysler has no significant power in the tying product market. Because one of the prerequisites to applying the "per se" rule is not present, we ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.