this assertion, nor has it analyzed the price, characteristics or adaptability of the competing commodities. Moreover, while the porous plate may indeed be unique or different from other products, it is clear that "where there are market alternatives that buyers may readily use for their purposes, illegal monopoly does not exist merely because the product said to be monopolized differs from others." Id. at 394.
The fact that Leopold did not produce any evidence to the contrary is not essential. It is undisputed that the alternative underdrain/support gravel system was ultimately used by Roberts Filter for the Maiden Creek Filter Rehabilitation Project. Roberts Filter has not offered evidence which would tend to explain why this system was not viewed by the City of Reading "as a substitute for the [underdrain/porous plate] product." Id. Roberts Filter's assertion that "Roberts does not have to be satisfied with having to try and convince every engineer that they should use an entirely different kind of system which does not serve the specific purpose that the engineer originally specified," even if supported by competent evidence, does not explain why an underdrain/support gravel system is not viewed by the consumer as a substitute for the Leopold product.
Moreover, R. Lee Roberts' affidavit, itself, indicates reasonable interchangeability. Roberts states that "one of the methods available to rehabilitate an old filter bed and increase quality and production is to replace the 12 to 18" of support gravel with something like a porous plate, thereby allowing for the use of more filter media." (Affidavit of R. Lee Roberts, P 19) (emphasis added) Roberts further states that the porous plate "is a method of quality and production increase which will interest a number of engineers and consumers." (Affidavit of R. Lee Roberts, P 19) (emphasis added) This indicates the availability of other systems.
The Third Circuit has stated that "a well-defined submarket may constitute a relevant product market and so under certain circumstances a relevant product market could consist of one brand of a product." Tunis, 952 F.2d at 723. However, the determination that a submarket constitutes a relevant product market includes examining "such practical indicia as industry or public recognition of the submarket as a separate economic entity, the product's peculiar characteristics and uses, unique production facilities, distinct customers, distinct prices, sensitivity to price changes, and specialized vendors." Tunis, 952 F.2d at 723, citing Brown Shoe Co. v. United States, 370 U.S. 294, 325, 8 L. Ed. 2d 510, 82 S. Ct. 1502 (1962). Roberts Filter has not set forth evidence sufficient to conduct such an examination.
We recognize that generally "the determination of a relevant product market or submarket...is a highly factual one best allocated to the trier of fact." Fineman v. Armstrong World Indus., Inc., 980 F.2d 171, 199 (3d Cir. 1992). However, Leopold has demonstrated that Roberts Filter has failed to produce evidence sufficient to establish the existence of an element essential to Roberts Filter's case, and on which Roberts Filter will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). Since the traditional summary judgment standard applies with equal force in antitrust cases, Alvord-Polk, Inc. v. F. Schumacher & Co., 37 F.3d 996, 1001 (3d Cir. 1994), we find that summary judgment is appropriate because Roberts Filter has failed to offer sufficient evidence from which a reasonable jury might find that the universal underdrain/porous plate constitutes the relevant product market.
With respect to any broader definition, Roberts Filter has come forward with no evidence which would indicate how a broader market could be defined.
Although Roberts Filter has not defined a relevant product market, we nevertheless address the question of whether Roberts Filter has come forward with sufficient, competent evidence to establish that Leopold has sufficient market power to come dangerously close to success within the market. Leopold argues that even if a relevant market were found to exist, that market power has not been established. We agree.
In M & M Medical Supplies v. Pleasant Valley Hosp., 981 F.2d 160, 166 (4th Cir. 1992), cert. denied, 125 L. Ed. 2d 662, 113 S. Ct. 2962 (1993), Plaintiff filed suit alleging six separate antitrust claims which included a claim for attempted monopolization under section 2 of the Sherman Act. See M & M Medical Supplies v. Pleasant Valley Hosp., 738 F. Supp. 1017, 1018 (S.D. W.Va. 1990). The district court granted the defendant's motion for summary judgment finding, inter alia, that the plaintiff failed to establish that the defendant had monopoly power in the relevant product and geographic markets. In reaching its decision, the district court found that the affidavit of the plaintiff's economic expert had "set forth no facts to support these opinions," and had provided "no specific examples" of the defendant's anticompetitive conduct. Id. 738 F. Supp. at 1020. The Fourth Circuit, en banc, reversed the district court's holding and found that the affidavit of the plaintiff's economic expert "was far more than a conclusory statement based on general antitrust theory." Pleasant Valley, 981 F.2d at 164. Rather, the court found that what was omitted from the affidavit was not facts or reasons, but rather the underlying data supporting the facts. Id., 981 F.2d at 164-65. The Fourth Circuit found that the lack of underlying data supporting an affiant's assertion of fact does not mandate exclusion of the affidavit under Fed. R. Civ. P. 56, so long as the affidavit is not wholly conclusory and devoid of reasoning. Id. 981 F.2d at 165.
We find Pleasant Valley persuasive in the case at bar. Under the rationale of Pleasant Valley, while the underlying data supporting an affiant's assertion need not be submitted with the affidavit, an expert's conclusory affidavit lacking facts or reasons does not satisfy the requirements of Fed. R. Civ. P. 56 (e). That is exactly the situation presented by the Affidavit of R. Lee Roberts and the deposition testimony of Marvin Brown in the case at bar.
Specifically, although R. Lee Roberts states that "Leopold clearly has the dominant market share (approximately 80 percent in the past two or three years) for underdrain systems," and that "in the market for porous plate/underdrain block systems...Leopold has 100%," Roberts provides no facts or reasons for reaching this conclusion. (Affidavit of P. Lee Roberts, P 7) Roberts goes on to state that "at an average cost of $ 120-$ 150 per square foot, the total yearly market for filtration equipment will be between $ 25,000,000 to $ 30,000,000. I estimate that approximately one-half of that will involve rehabilitation. About one-half will involve the separate market in porous plate systems." (Affidavit of R. Lee Roberts, P 19) Once again, no facts or reasons are given for these "estimates." Such conclusory statements are insufficient to establish market share. See Pleasant Valley, 981 F.2d at 164-65.
The deposition testimony of Marvin Brown is similarly defective. First of all, it is not clear to what market share Mr. Brown is referring. For example, Mr. Brown first states that Leopold "probably [has] something like 75 percent," of the market share in filtration installations. (Deposition of Marvin Brown, supra) Then Mr. Brown goes on to state that it was probably the underdrains and related equipment in a filter that he was referring to. To further obfuscate the issue, Mr. Brown files an addendum to his testimony wherein he states that the 75% referenced his "estimate of the number of jobs awarded to Leopold out of total jobs bid." (Leopold's Exhibits as to Defendant's Antitrust Counterclaim, Exhibit 29, p.3) Secondly, Mr. Brown at no time states any facts or reasons in support of his "estimate." This testimony is insufficient to establish market power. For the same reason, the letters written by Brown wherein Brown claims that Leopold is the undisputed market share leader are insufficient to establish market share in a relevant market.
While it appears as though many parties in antitrust cases utilize expert testimony in order to establish relevant market and market power, we have found no authority which indicates that expert testimony is required, and we do not venture to so hold. See e.g. Bacchus Indus., Inc. v. Arvin Indus., Inc., 939 F.2d 887, 894 (10th Cir. 1991) (While finding that the plaintiff failed to present sufficient evidence of dangerous probability that the defendant could achieve monopoly status in the relevant market, the court stated that the testimony of former employee of the defendant, an employee of the plaintiff, and the president of the plaintiff company sufficient to support claim that defendant held a significant market share.)
Something more than conclusory allegations, however, must be presented in order to withstand summary judgment. While Roberts Filter, in attempting to demonstrate the nature of Leopold's alleged anti-competitive conduct, may very well have set forth a sound basis for its inequitable conduct theory in the patent infringement count (see Roberts Filter's Supplemental Memorandum in Opposition to Summary Judgment on the Antitrust Counterclaims), we find that such alleged anti-competitive conduct, in and of itself, is insufficient to establish an antitrust cause of action. See Spectrum Sports, U.S. , 113 S. Ct. at 892 ("The concern that § 2 might be applied so as to further anticompetitive ends is plainly not met by inquiring only whether the defendant has engaged in 'unfair' or 'predatory' tactics.")
Roberts Filter has established neither a relevant market nor the market power of Leopold. Summary judgment must therefore be granted as to Roberts Filter's antitrust claims under section 2 of the Sherman Act, and Walker Process.10
Finally, we address Roberts Filter's tying claim. Quite clearly put, "tying exists when a seller of product A requires his purchasers to take product B as well." R. Bork Antitrust Paradox at 365 (1993). See also Allen-Myland, Inc. v. International Business Machines Corp., 33 F.3d 194, 200 (3d Cir. 1994), cert.denied, 115 S. Ct. 684 (1994). A tying arrangement violates section 1 of the Sherman Act if "the seller has appreciable economic power in the tying product market and if the arrangement affects a substantial volume of commerce in the tied market." Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451, 112 S. Ct. 2072, 2079, 119 L. Ed. 2d 265 (1992) (internal quotations omitted).
Initially, a court in a section 1 tying case must determine whether "the defendant has sufficient market power over the tying product, which requires a finding that two separate product markets exist and a determination of precisely what the tying and tied product markets are." Allen-Myland, 33 F.3d at 200-201. In discussing the policy concerns behind finding tying arrangements violative of section 1 of the Sherman Act, the Third Circuit has stated that:
The antitrust concern over tying arrangements is limited to those situations in which the seller can exploit its power in the market for the tying product to force buyers to purchase the tied product when they otherwise would not, thereby restraining competition in the tied product market.
Id. at 200.
Roberts Filter defines the unlawful tying arrangement in this case as "Plaintiff's market control is such that it can require customers to purchase both underdrain block and porous plate cap from plaintiff when there are or may be separate markets for each of such products." (Roberts Filter's Brief at 57, citing Amended Answer and Counterclaim) Roberts Filter does not, however, specify which is the tying and which is the tied product. At one point in its brief, Roberts Filter states that "the tying product is not necessarily the underdrain block, because, as Plaintiff notes in its Brief, the patent on the Universal Underdrain expires in December, 1994." (Roberts Filter's Brief at 62) Leopold assumes in its brief that the tying product is the underdrain block. (Leopold's Brief in Support of Summary Judgment (Antitrust) p. 22-23)
We find that if tying exists, then the arguments of Roberts Filter most logically point to the porous plate as being the tying product. Roberts Filter has not argued that when one purchases a Universal Underdrain, that one must necessarily purchase a porous plate. Rather, Roberts Filter argues that if one purchases a porous plate, that one must necessarily purchase a Universal Underdrain in order to avoid infringing Leopold's patent. (See Roberts Filter's Brief, p. 60-61, quoting Mr. Brown's assertion that "it's very difficult to imagine any design where you affix a porous plate to the top of a lateral underdrain without infringing.") Indeed, underdrain blocks, such as Leopold's Universal Underdrain
have been conventionally used in conjunction with support gravel, rather than porous plates. (See Leopold's Brief in Support of Summary Judgment (Antitrust), p. 3; see also Roberts Filter's Brief, p. 7-8) In fact, counsel for Roberts Filter represented to the Court at oral argument that support gravel was used by Roberts Filter for the Maiden Creek Filter Rehabilitation project.
Having determined that the porous plate is the tying product, we next must determine whether Roberts Filter has demonstrated that Leopold has "appreciable economic power in the tying market." Eastman Kodak, U.S. , 112 S. Ct. at 2080. Interestingly, the porous plate, itself, is patented. The patent, which was issued on November 21, 1989, is held by Joseph Ferri, the owner of General Polymerics, the company that manufactures the Leopold porous cap. (See Volume I of Roberts Filter's Exhibits, Exhibit 11) Polymerics sells this plate to other companies for use in water filtration systems. (See e.g. Volume I of Roberts Filter's Exhibits, Exhibit 101, p. 57-59) According to Roberts Filter, Porex Technologies, Inc. of Fairburn Georgia also manufactures a porous plate. (Roberts Filter's Brief at 9) Roberts Filter has not come forward with evidence which would tend to indicate that Leopold has market power in the porous plate market.
We recognize the problems faced by Roberts Filter in attempting to use porous plate technology. (See. e.g. Roberts Filter's Brief, p. 62, 63 "If one wants to rehabilitate a system in which Leopold Universal underdrain block had been installed, one should be able to buy the porous plate from General Polymerics because General Polymerics may be willing to sell it cheaper than Leopold," and "if one wants to purchase porous plate and use it with an underdrain manufactured by a company other than Leopold, the '427 patent will be infringed, according to Brown.") However, those problems do not excuse Roberts Filter from coming forward with sufficient evidence to establish all the elements of its illegal tying claim.
Accordingly, we find that Roberts Filter has failed to establish all the elements of an illegal tying arrangement. Summary judgment on this claim will be granted.
Finally, Leopold asks this Court to exclude Roberts Filter from putting forth any evidence concerning its Fourth, Sixth, Seventh, Twelfth and Sixteenth Affirmative Defenses at trial. This argument can more appropriately be addressed as a motion in limine.
ORDER OF COURT
AND NOW, this 10th day of March, 1995, pursuant to the Opinion attached hereto, and for the reasons set forth in the Opinion accompanying this Order, it is hereby ORDERED that the Motion for Summary Judgment (Doc. 159) filed by The F.B. Leopold Company with regard to the Counter-Claim filed by Roberts Filter concerning defamation is GRANTED in part and DENIED in part.
It is further ORDERED that the Motion for Summary Judgment (Doc. 156) filed by the F.B. Leopold Company with regard to the Counter-Claim filed by Roberts Filter concerning anti-trust claims is GRANTED as to all the anti-trust claims.
It is further ORDERED that a Pre-Trial Conference will be held on Friday, April 21, 1995 at 9:00 A.M. at which time counsel must appear with authority to settle from their clients.
BY THE COURT:
Donetta W. Ambrose,
U. S. District Judge