The opinion of the court was delivered by: Buckwalter, S. J.
A. Defendants' Motion in Summary Judgment
This suit is about the sale of garbage trucks, specifically, Mack garbage trucks. Plaintiff RDK Truck Sales and Service Incorporated and RDK Municipal Truck Center*fn1 (collectively RDK) promotes itself as a national low-cost provider of garbage trucks-a position which it believes threatened others in the garbage truck industry. RDK alleges that given its position as a low-cost leader, Defendants Mack Truck International (Mack), McNeilus Truck and Manufacturing Incorporated (McNeilus), and Heil Environmental Industries Incorporated (Heil) (collectively Defendants) engaged in several unlawful actions that form the basis for RDK's Third Amended Complaint.
On August 23, 2004, RDK filed suit against Defendants claiming that they entered into various illegal agreements to divide the market for Mack refuse trucks by allocating Mack customers via coordinated refusals to deal and discriminatory pricing. (Third Am. Compl. 2.) Specifically, RDK asserts the following claims: (1) violation of Section 1 of Sherman Act (15 U.S.C. § 1, et seq.) (Id. ¶¶ 64-70); (2) violation of Florida's Antitrust Act (Fla. Stat. § 542.15 et seq.) (Id. ¶¶ 71-77); (3) violation of Florida's Deceptive and Unfair Trade Practices Act (Fla. Stat. § 501.201, et seq.) (Id. ¶¶ 78-81); (4) tortious interference with existing and prospective business relations (all Defendants) (Id. ¶¶ 82-87); and (5) tortious interference with existing and prospective business relations (only Mack) (Id. ¶¶ 88-913).
Presently before this Court is Defendants' Motion for Summary Judgment. For the reasons discussed below, their motion is granted in part and denied in part.
In its Counterclaim, Mack seeks recovery for damages caused by RDK's "long standing conspiracy to deceive and defraud Mack." (Mack's Answer and Third Am. Compl. 20.) Specifically, Mack alleges that RDK and several Mack dealers agreed that the dealers "would purchase trucks from Mack for resale to RDK by misrepresenting to Mack that the trucks were to be sold to other customers. Through this ruse, the conspirators induced Mack to provide inflated discounts, thereby both damaging Mack and unjustly enriching RDK." (Id.)
According to Mack, this "game" involved: (1) filing for Mack sales assistance in the name of companies that are not RDK and then flipping the title for these chassis to RDK (Id. at ¶ 21); (2) making false business names and requesting sales assistance under those names (Id. at ¶ 22); (3) requesting sales assistance under real names even though the intent was to sell to RDK (Id. at ¶ 23); and (4) using the name of a dairy and airport tanker business even though the intent was to sell to RDK (Id. at ¶ 24). Mack alleges that RDK committed a civil conspiracy, and violated Florida's Unfair Practices Act. (Id. ¶¶ 30-39.) As a result, Mack seeks: (1) compensatory money damages; (2) recovery of costs of the suit; (3) disgorgement of all benefits received; and (4) punitive damages. (Id. at 25-26.)
C. RDK's Motion for Summary Judgment on Mack's Counterclaim
RDK asserts that Mack "has contrived three conspiracy theories" between RDK and three Mack dealers-Dallas Mack, Worldwide, and Nextran-and has tacked on a "meritless claim for alleged violations of the Florida Deceptive and Unfair Trade Practices Act." (Pls.' Mot. Summ. J. 1.) RDK alleges that "[t]he entirety of Mack's claims against RDK rest on misrepresentations allegedly made to Mack by the three Mack dealers in the course of requesting discounts on trucks from Mack." (Id.) (emphasis in original.) RDK further states that Mack's theory lacks factual support and is based upon 'conclusions' adduced by Mack's expert. (Id.) As such, "the record is devoid of any evidence that RDK participated in any wrongdoing in connection with any of the disputed transactions." (Id. at 2.)
Mack's original list of fraudulent dealers and deals included seven Mack dealers and 640 chassis. (Id. at 3; Mack's Resp. Mot. Summ. J. 15.) Mack narrowed the list to three dealers, and sixty-four chassis. (Mack's Resp. Mot. Summ. J. 15.)
II. FACTUAL BACKGROUND -- THE PARTIES
Since its founding in 1900, Mack has manufactured a variety of truck platforms for industrial purpose including class 8 (heavy-duty) trucks capable of carrying loads in excess of 33,000 pounds. Mack's heavy duty trucks are not a finished product. Rather, Mack produces the "chassis" which consist of the power train, cab, frame, and wheels. The chassis is fitted with a body tailored to the truck's intended end use.
B. Mack Franchisees and the Mack Dealer Council
Mack does not sell directly to end users. Rather, most Mack trucks are sold by Mack's network of 137 independent, franchised dealers. (Defs.' Answer and Countercl. ¶ 8.) In 2006, 83 percent of all Mack chassis were sold by Mack's dealer network. (Defs.' Mot. Summ. J., Ex. 2, Epstein Rep., ¶ 35 n.41.) Dealers operate under a Distributor Agreement that describes Areas of Primary Responsibility (AORs). (Defs.' Mot. Summ. J., Ex. 1, Flaherty Decl. ¶ 5.) In these Agreements, dealers covenant to promote the Mack brand, provide parts and support, maintain a supply of parts, and ensure that their mechanics are proficient in repairing Mack trucks. (Id.) Mack views its dealer network, with their attendant responsibilities, as a key factor in its sales success.
When a Mack dealer buys a Mack chassis, Mack provides price reductions that result in the "distributor net price." (Pls.' Resp. Mot. Summ. J. 8 & Ex. 14, Stephen Polzer Toledo Mack Dep. ("Polzer Dep.") 12-16, Nov. 19, 2003.) Dealers may also request additional "sales assistance" which Mack grants on a case-by-case basis to help complete a particular sale. (Id., Ex. 15, Ronald Gerhard Dep. ("Gerhard Dep.") 51-52, Jan. 18, 2008; Defs.' Mot. Summ. J. Ex. 1, ¶¶ 7-9.) Typically, Mack dealers do not stock chassis on their lots, but order them to specification. (Pls.' Resp. Mot. Summ. J 9; Ex. 16, Ginter Decl.¶ 8.)
To foster communication between Mack and its dealers, the Mack Distributor Council (Council) was created. (Defs.' Mot. Summ. J. 8.) The Council consists of Mack executives, and dealer representatives chosen by their peers. (Pls.' Resp. Mot. Summ. J. 8; Ex. 2, Flaherty Dep. 81:7-14; Ex. 3, Ralich Dep. 77:14-16.) Dealer representatives raise dealer concerns at quarterly Council meetings. (Id., Ex. 3, 77:21-78:16; Id., Ex. 19, Flaherty Toledo Mack Dep. 66:2-3.)
C. The Body Builders -- McNeilus and Heil
Mack's chassis are of little use until fitted with a body tailored for a specific use. Defendants McNeilus and Heil are two of the biggest makers of garbage truck bodies. Heil sells most of its product through a nationwide network of authorized dealers whereas McNeilus uses its own sales force. Until 2004, Mack directly sold chassis to McNeilus and Heil for their "ready truck" program.*fn2 (Defs.' Mot. Summ. J. 11; Ex. 23, Jimmy W. Rogers Dep. ("Rogers Dep.) 88:9-89:22, Oct. 31, 2007; & Ex. 4, Barry Duffy Dep. ("Duffy Dep.") 56:21-57:1, Aug. 21, 2007.) Since then, Mack dealers have provided chassis to both body builders. (Id., Ex. 1, Flaherty Decl. ¶ 10.)
RDK is neither an authorized Mack dealer nor a body builder. Rather, RDK is an independent, third-party distributor of ready trucks for the garbage industry. RDK sells many brands of chassis and bodies. (Defs.' Mot. Summ. J., Ex. 14, Kemner Dep. 5:25-6:20.) While it does not make bodies, it does install them. According to Mack, "RDK is a small refuse truck reseller in Tampa, Florida." (Defs.' Mot. Summ. J. 12.) By way of comparison, RDK claims that it was founded with the "goal of promoting and selling the Mack brand of refuse trucks," and soon after opening "quickly became one of Mack's best customers." (Pls.' Resp. to Mot. Summ. J. 11.)
While the parties may disagree about RDK's size and scope, it is clear that RDK operates with a business model that fundamentally differs from Mack's. Mack utilizes 137 dealers, with 200 locations, while RDK's facilities are concentrated upon fifteen acres in Tampa Bay, Florida. (Id. at 3, Ex. 7, Kemner Decl. ¶ 7.) While Mack sees its brick and mortar dealerships as essential to its business model, RDK prefers to market itself by "aggressively advertising low prices nationwide" via the internet and in various trade publications. (Id. at 6.)
III. DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
Defendants' Motion for Summary Judgment focuses on each of RDK's claims. This Court addresses them in turn.
A. Summary Judgment Standard
A motion for summary judgment will be granted when all of the evidence demonstrates "that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c). A dispute about a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Since a grant of summary judgment will deny a party its chance in court, all inferences must be drawn in the light most favorable to the party opposing the motion. U. S. v. Diebold, Inc., 369 U.S. 654 (1962); Big Apple BMW, Inc. v. BMW of N. Am., Inc., 974 F.2d 1358, 1363 (3d Cir. 1992) (stating that in a motion for summary judgment, "where the non-moving party's evidence contradicts the movant's, the non-movant's must be taken as true.").
Although the Supreme Court has emphasized that Rule 56 makes absolutely no distinction between antitrust and other cases, the Supreme Court has cautioned that "summary procedures should be used sparingly in complex antitrust litigation where motive and intent play leading roles, the proof is largely in the hands of the alleged conspirators, and hostile witnesses thicken the plot." Poller v. Columbia Broad. Sys., Inc., 368 U.S. 464, 473 (1962).*fn3
B. Violations of Section 1 of the Sherman Act*fn4
RDK alleges three agreements where Defendants have unreasonably restrained trade in violation of Section 1 of the Sherman Act. First, RDK alleges that Mack, with its dealers, conspired against RDK by denying it access to highly discounted Mack trucks. (Am. Compl. ¶¶ 28-32.) Second, RDK alleges that Mack conspired with the Body Builders, to form a three-way agreement whereby the Body Builders would refuse to sell Mack ready trucks to RDK. (Id. at ¶¶ 34-37.) Finally, RDK alleges that Mack entered into another three-way agreement with the Body Builders to ensure that neither would sell to established customers of Mack dealers. (Id. at ¶ 36.)
Despite its literal language, Section 1 only prohibits contracts, combinations, or conspiracies that unreasonably restrain trade. Bus. Elec. Corp. v. Sharp Elec. Corp., 485 U.S. 717, 723 (1988). Courts have utilized three different standards when examining whether a practice violates Section 1. The rule of reason is the default standard requiring that the factfinder weigh "all of the circumstances of a case in deciding whether a restrictive practice should be prohibited as imposing an unreasonable restraint on competition." Cont'l. T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 49 (1977). As such, a plaintiff must prove the following: (1) defendants contracted, combined, or conspired among each other; (2) the combination or conspiracy produced adverse, anti-competitive effects within the relevant product and geographic markets; (3) the objects of and the conduct pursuant to that contract or conspiracy were illegal; and (4) the plaintiffs were injured as a proximate result of that conspiracy. Tunis Bros. Co. v. Ford Motor Co., 763 F.2d 1482, 1489 (3d Cir.1985). This burden may be satisfied by showing actual anticompetitive effects, increase in price, or deterioration in quality of goods or services. Id. at 1489. Such analysis is difficult and often requires quantitative analysis that is outside the capacity of most judges and jurors. Perhaps, due to this, courts typically allow proof of defendant's market power to act as a proxy for evidence of detrimental, anticompetitive effects. See. FTC v. Ind. Fed. of Dentists, 476 U.S. 447, 460-61 (noting that market power is a "surrogate for detrimental effects.")
By way of contrast, certain actions "presumed to unreasonably restrain competition" are analyzed as per se illegal "without elaborate inquiry as to the precise harm [they have] caused or the business excuse for [their] use" In re Flat Glass Antitrust Litig., 385 F.3d 350, 356 (3d Cir. 2004) (quoting Rossi, 156 F.3d at 461.) Over the past several decades, the Supreme Court has narrowed the applicability of per se analysis expressing a reluctance to apply this standard "in the context of business relationships where the economic impact of certain practices is not immediately obvious." State Oil Co. v. Khan, 522 U.S. 3, 10 (1997); see also Leegin Creative Leather Prod., Inc., v. PSKS, Inc., 125 S.Ct. 2705 (2007) (noting that the Supreme Court had been narrowing the applicability of per se analysis, and holding that such analysis was inappropriate in cases of vertical restraints.) Horizontal price-fixing*fn5 -i.e., where competitors at the same market level agree to fix or control the prices they will charge for goods-is subject to per se analysis. See Flat Glass, 385 F.3d at 356.
Courts have increasingly applied an intermediate standard-the "quick look"-when per se analysis is inappropriate but "no elaborate industry analysis is required to demonstrate the anticompetitive character" of an alleged antitrust violation. NCAA v. Board of Regents of the Univ. of Okla., 468 U.S. 85, 109 (1984.) Such an approach "may be applied only when an observer with even a rudimentary understanding of economics could conclude that the arrangement in question would have an anticompetitive effect on customers and markets." Gordon v. Lewistown Hosp., 423 F.3d 184, 210 (3d Cir. 2005) (quoting Cal. Dental Ass'n v. FTC, 526 U.S. 756, 770 (1999)).
The Court need not rely on any of these standards as the case is governed by the summary judgment standard as there is insufficient evidence to support RDK's antitrust claims.
1. The Alleged Unlawful Agreement Between Mack and Its Dealers
RDK asserts that Mack and its dealers improperly agreed that Mack would deny sales assistance on chassis being sold, by Mack's dealers, to RDK. Despite its assertions, RDK has provided no evidence supporting its claim of a direct, vertical conspiracy. RDK has purchased Mack chassis from several Mack dealers, most commonly Dallas Mack, and resold them as ready trucks. (Pls.' Resp. to Mot. Summ. J. 11 & Ex. 5, Arturo Lasanta Dep. ("Lasanta Dep.") 221:2-14, June 20, 2007.) Mack dealers selling to RDK were granted sales assistance for these sales, and from 1998 to 2002 RDK was among Mack's 50 biggest customers.*fn6 (Pls.' Resp. to Mot. Summ. J. 11; Ex. 2, Flaherty Dep. 14:1-7; Ex. 26, Top Mack Retail Sales 1998 - 2002.)
RDK claims that its success upset some Mack dealers, most notably the Nextran Group (Nextran). Like RDK, Nextran is based in Florida. (Pls.' Resp. Mot. Summ. J. 12.) Given their size and geographic overlap, Nextran and RDK competed for sales. Not content to compete, RDK asserts that Nextran opposed RDK's sale of new Mack trucks and voiced this opposition at Council meetings, as did a number of other Mack dealers. (Pls.' Resp. Mot. Summ. J. 12-14; Ex. 29, Pritchett Dep. 10:22-23; Ex. 2, Flaherty Dep. 34:3-15; & Ex. 30, Maddox Dep. 27:2-10.) RDK asserts that Steven Ralich, a Mack dealer, admitted at his deposition that there was a "consensus" among Mack dealers to deny sales assistance on chassis being sold to RDK. (Id. at 48 citing Ex. 3, Steven Ralich Dep. ("Ralich Dep.") 89:12-17, Nov. 20, 2007).)
RDK claims that dealer complaints had the intended effect, as Mack acquiesced and agreed with their dealers-who, by virtue of their size, exercised undue influence over Mack-to deny sales assistance for sales to RDK.*fn7 When RDK's principal and owner, Richard Kemner, confronted Mack about this policy change, he was reportedly told that it would be "cheaper and easier to fight and pay you than it would be for us to take and fight our Dealer Council." (Pls.' Resp. to Mot. Summ. J. 17; Ex. 9, Kemner Dep. 38:1-6.) As a result, in 2001, Mack began denying assistance on sales to RDK. (Pls.' Resp. to Mot. Summ. J. 12; Ex. 29, Lasanta Dep. 124:3-12.)
The "presence of concerted action or an agreement is an essential element of a section 1 claim." Rossi v. Standard Roofing, Inc., 156 F.3d 452, 465 (3d Cir. 1998). The existence of an agreement is "the very essence of a section 1 claim." Alvord-Polk, Inc. v. Schumacher & Co., 37 F.3d 996, 999 (3d Cir. 1994). Evidence of concerted action can be either direct or circumstantial with the latter being more common. William C. Holmes, ANTITRUST LAW HANDBOOK § 2:4 (2008). Where a plaintiff solely relies on circumstantial evidence, inferences from that evidence tends to "exclude the possibility that the alleged conspirators acted independently." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 588 (1986) (citing Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 764 (1984)).
a. It is Not Clear That RDK is the Eligible for Protection for Under the Relevant Case Law
In its Response to Defendants' Motion for Summary Judgment, RDK cites, as support for its claim, several cases involving manufacturers and dealers who sought to improperly undermine price cutting dealers.*fn8 The hallmark of these suits is that a group of dealers complain about another price-cutting dealer in the hope that the manufacturer either will refrain from dealing with the price-cutter or deny the potential price-cutter a franchise.
It is unclear that these dealer-manufacturer cases are applicable to the present suit as RDK has never been nor sought to be an authorized Mack dealer. RDK purchases Mack chassis from Mack dealers, installs bodies upon these chassis, and resells them.*fn9 By way of analogy, RDK is no more a Mack dealer than is the individual-who after buying a Rolex from an authorized jeweler, proceeds to then sell that unused watch from the back of his car-a Rolex dealer. Despite its self-professed fondness for Mack's product, RDK has never sought to become an authorized Mack dealer. Instead, RDK directly competes with the business model established by Mack and its dealers. As a result, RDK cannot avail itself of this Circuit's case law protecting price-cutting dealers.*fn10 To assert a federal antitrust claim, the plaintiff must have suffered an antitrust injury, "of the type the antitrust laws were intended to prevent and that flows from that which makes the defendant's acts unlawful." Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977). Plaintiff has not asserted such a claim. This Court fails to see how RDK has standing to assert this particular antitrust claim against Mack and its dealers.
b. Analysis of Dealer Complaint Suits
Despite this Court's belief that RDK does not have standing for its claim against Mack and its dealers, this Court, out of an abundance of caution, will examine the merits of RDK's claim of a vertical, manufacturer-dealer conspiracy. The Supreme Court's analysis of dealer complaint suits has been clear: a manufacturer's receipt of dealer complaints about the price cutting activities of another dealer is not, absent more evidence, sufficient to establish the existence of a manufacturer-dealer conspiracy. See Monsanto Co., 465 U.S. 752. In Monsanto, the Supreme Court held that antitrust plaintiffs alleging a Section 1 price-fixing conspiracy must present evidence tending to exclude the possibility that a manufacturer and its distributors acted in an independent manner as the mere inference of conspiracy could undermine procompetitive actions. Id. at 764. Dealer complaints and responses are not sufficient to support a conspiracy claim as "proof of opportunity alone is insufficient to sustain an inference of conspiracy." Cosmetic Gallery, Inc. v. Schoeneman Corp., 495 F.3d 46, 53 (3d Cir. 2007). The Supreme Court and this Circuit have been clear: manufacturers may take dealer concerns into account when setting pricing.
The Supreme Court in Leegin noted that "[m]inimum resale price maintenance can stimulate interbrand competition . . . by reducing intrabrand competition among retailers selling the same brand. This is important because the antitrust laws' primary purpose . . . is to protect interbrand competition." Leegin, 127 S.Ct. at 2708 (quoting Khan, 522 U.S. at 15.) But the Court also noted that vertical restraints can have anticompetitive effects. Id. at 2717. Specifically, "[r]esale price maintenance, furthermore, can be abused by a powerful manufacturer or retailer. A dominant retailer, for example, might request resale price maintenance to forestall innovation in distribution that decreases costs." Id.
Mack argues that it was concerned that RDK free-rider on the investments made by Mack and its authorized dealers. (Defs.' Reply Br. 13.) Such free-riding takes two primary forms- free-riding on promotion and free-riding on maintenance/service. Mack dealers are required to promote the Mack brand. RDK has no such obligation. RDK's promotional budget is extensive, but that budget promotes RDK and not any particular truck brand. (See Pls.' Resp. Mot. Summ. J. 6 (stating that "RDK is a National Price-Advertiser," and discussing its marketing approach.).) Mack's actions are consistent with the Supreme Court's statement that setting the resale price provides positive pro-competitive benefits including "services or promotional efforts that aid the manufacturer's position as against rival manufacturers. Resale price maintenance may also give consumers more options to choose among low-price, low-service brands; high-price, high-service brands; and brands falling in between." Leegin, 127 S.Ct. at 2708. Promotion of its product and the provision of high-quality service, are precisely the reasons offered by Mack for its decision to unilaterally rescind sales assistance to chassis destined to RDK.
Second, Mack claims that RDK free-rides on its dealer's investments in post-sales service. With its nation-wide network, Mack can have trucks repaired at dealers nation wide. By contrast, RDK's only repair facility is in Tampa, Florida. When asked what he would do if one of his customers, who purchased a Class 8 Mack truck broke down in Texas and called him, RDK's Kemner replied "[d]epends where it's at in Texas. I would take and call into a Mack hotline and see if I can get it repaired, and see if the customer needs another truck to get him up and going." (Defs.' Reply Br. 15 (quoting Defs.' Mot. Summ. J. Ex. 22, Richard Kemner Dep. ("Kemner Dep.") 22:8-14, Jul. 24, 2007).)*fn11
RDK asserts that Mack's stated rationale for rescinding sales assistance was pretextual and after-the-fact. This Circuit, faced with sufficient evidence, has routinely rejected pretextual explanations for corporate behavior. In Big Apple BMW, 974 F.2d at 1380, the court examined claims of vertical collusion finding that BMW's explanations for denying appellant's dealership bid were pretextual and provided an insufficient basis for summary judgment dismissal. The court noted the existence of evidence, in the form of letters, and testimony suggesting that BMW's proffered reasons were simply after-the-fact justifications. (Id.) Similarly, in InterVest, Inc. v. Bloomberg, L.P., 340 F.3d 144, 167 (3d Cir. 2003), the Third Circuit again examined an antitrust suit where appellant asserted that the business reasons offered by appellee were pretextual. Unlike in Big Apple, however, the court affirmed the district court's grant of summary judgment. Appellant's conspiracy claim largely relied upon appellee's alleged response to dealer complaints absent any evidence of an agreement. Id. at 166. Other than note the existence of such complaints, appellant provided neither evidence of dealer threats nor direct evidence of a conspiracy. The court noted that the evidence of concerted action "is at best ambiguous and does not tend [ ] to exclude the possibility" that the parties acted independently. Id. (citing Monsanto, 465 U.S. at 764.)
As in Intervest, RDK fails to provide evidence that tends to exclude the possibility that the parties acted independently. It is clear that numerous Mack dealers did not want Mack granting sales assistance for sales to RDK. These dealers voiced their opposition at Council meetings. It is equally clear that other dealers, belonging to the Council, did not support this decision and wanted Mack to continue providing sales assistance on sales to RDK. (Defs.' Reply Br. 9, Ex. 2, Pritchett Dep. 12:2-12:15.) RDK argues that Mack dealer, Steven Ralich, admitted that there was a "consensus" to deny RDK the benefit of sales assistance. (Pls.' Resp. Mot. Summ. J. 48.) Such is not the case. Ralich's comments, when read in context, actually underscore-the exact opposite conclusion-the absence of any dealer agreement. When asked if he knew of specific Mack dealers who opposed the provision of sales assistance on sales to RDK Ralich stated:
A. And the only dealers that I'm aware of that feel differently are those that provide a lot of new Mack trucks. You know, you could be looking at hundreds of units here where they are the actual providers of those units to those independent dealers.
Q. So in you -- in your opinion, is there a consensus among Mack dealers who are not selling new Mack chassis to RDK that companies like RDK should not be able to get extra sales assistance from Mack on new Mack chassis?
A. I would say that's a fair characterization, yes. (Defs.' Reply Br. 6 (citing Ralich Dep. 89:7-18) (emphasis added).) There is no evidence that Mack dealers reached an agreement on how Mack should deal with RDK, much less expressed that consensus, to Mack.
This lack of evidence stands in contrast to the situation in the related case of Toledo Mack v. Mack Trucks, Inc., 530 F.3d 204 (3d. Cir. 2008). In Toledo Mack, the Third Circuit found summary judgment inappropriate given direct evidence suggesting that Mack and its dealers actively conspired to restrict assistance to other Mack dealers. Id. at 222. In Toledo Mack, the appellant's direct evidence included: (1) recordings and conversations referring to an unwritten "gentleman's" agreement between Mack and its dealers; (2) an official policy barring dealers sales outside their AOR; and (3) evidence that Mack and its dealers produced Bulletin 38-89 eliminating "sales assistance to dealers on sales outside their AORs." Id. The Third Circuit noted that Mack and its dealers "met, discussed, and unanimously approved Bulletin 38-39 before Mack issued it." Id. at 223.
Toledo Mack's direct evidence underscores the paucity of the circumstantial evidence in the present case. In the present case, there is no evidence of: (1) any agreement among dealers much less recording or conversations indicating the existence of a "gentlemen's agreement;" or (2) a written Bulletin. RDK only suggests that some dealers were upset that other dealers obtained sales assistance when selling to RDK. There is no evidence that Mack and its dealers "met, discussed, and unanimously approved" of any plan. RDK fails to provide evidence sufficient to support its claim that Mack's stated reasons for its policy barring sales assistance on sale to third-party vendors were pretextual. Given this, RDK has failed to carry its burden of proving a conspiracy between Mack and its dealers. Accordingly, this Court determines that summary judgment, with regard to RDK's claim of vertical conspiracy, is appropriate.
2. The Alleged Conspiracy Between Mack and The Body Builders, McNeilus and Heil, to Refuse to Sell Mack Ready Trucks to RDK
RDK next alleges that Mack conspired with the Body Builders, McNeilus and Heil, to form a three-way agreement whereby the Body Builders would refuse to sell discounted Mack chassis to RDK. In its Response to Defendants' Motion for Summary Judgment, RDK provides its evidence about this conspiracy as follows.
RDK notes that, in 2002, Joe Favia, Mack's National Accounts Manager, wrote to Tim Trom, McNeilus's Director of Purchasing, stating that McNeilus agreed to not sell "through a third party to retail." (Pls.' Resp. Mot. Summ. J. 20 (citing Ex. 33, Favia Sept. 5, 2002 Letter to Trom).) Subsequently, in Spring 2003, Mack held a meeting with a number of body builders. (Id.) McNeilus and Heil attended this meeting which specifically discussed McNeilus's sales to RDK. (Id. at 21 (citing Ex. 34, Body Builder Meeting Minutes).) Sales to third party distributors remained an important topic for Mack as its staff continued to discuss it with McNeilus.
RDK cites internal McNeilus emails as proof that Heil was involved in the MackMcNeilus agreement. One email stated that "they are going to cut RDK off from getting trucks as well." (Id. at 22 (quoting Ex. 37, Trom June 4, 2003 email).) RDK posits that this email shows that McNeilus understood that it would not lose business to Heil if it ceased dealing with RDK. To further support it allegations of conspiracy, RDK notes that McNeilus's 2003 price quotes became "ridiculous." (Id. at 23.)
RDK notes that later in 2004, Mack executives and Mack dealers met with McNeilus executives, and as a result of that meeting, Mack executives believed that Mack and McNeilus had reached an agreement about the sale of discounted trucks to RDK. (Id. at 24 (citing Ex. 2, Kevin M Flaherty Dep. ("Flaherty Dep.") 62:18-67:15, 68:3-25, Aug. 14, 2007).)
After McNeilus raised the prices quoted to RDK, RDK increasingly turned to Heil as a source for discounted Mack trucks. (Id. at 25.) After Heil began to work with RDK more, some Heil executives met with Mack executives in Allentown, Pennsylvania where Mack asked Heil to cease its sales to RDK. (Id.) Heil followed-up with Mack asking it to "confirm with letter on your standing with Trucks & Part RDK." (Id. at 25-26 (quoting Ex. 40, Wennerstrom Feb. 20, 2004 email).)
Mack never responded in writing, and instead Mack's Flaherty called Heil's Rogers about sales to RDK. Rogers testified that Mack raised this matter with Heil because of Mack dealers' competition with RDK. (Id. (citing Rogers Dep. 92:13-93:10).) Shortly thereafter, RDK claims that Heil stopped quoting and selling Mack chassis to them. Given this, RDK's Kemner contacted Kevin Flaherty of Mack to determine why RDK could no longer buy Mack chassis from Heil. (Id. at 26-27.) Kemner testified that Flaherty told him that Mack's decision was based upon dealer pressure, specifically from Nextran. (Id. at 27 (quoting Ex. 9, Richard Kemner Dep. ("Kemner Dep.") 8:2-9:11, Jan. 9, 2006.) Flaherty later told Kemner that "it would be cheaper and easier to fight and pay [RDK] than it would be for [Mack] to take and fight its dealer council." (Pls.' Resp. Mot. Summ. J. 27 (quoting Kemner Dep. 38:3-6).)
c. Evidence of a Horizontal Agreement Between McNeilus and Heil
As initially presented in their Response, RDK's evidence suggests the existence of two vertical agreements: one between Mack and McNeilus and another between Mack and Heil. RDK provides no evidence, direct or circumstantial, suggesting Heil and McNeilus communicated with one another in furtherance of a conspiracy. Instead, RDK asserts that (1) it is clear that McNeilus and Heil were competitors who, absent a horizontal agreement, would not cease competing for RDK's business, and (2) Mack's Flaherty testified that, in speaking with Heil, he told it that McNeilus had agreed to Mack's request that it limited sales to RDK, just as Mack was asking Heil to do. (Id. at 28-29 (citing Flaherty Dep. 76;17-77:9).) To prove a claim of horizontal conspiracy, RDK asserts that it need not show a direct agreement between McNeilus and Heil. (Id. at 53.) Rather, a jury could conclude that "Heil and McNeilus acted in concert and that this concerted action was orchestrated by Mack." (Id.) RDK asserts that its has provided circumstantial evidence, like that considered by the Seventh Circuit in Toys "R" Us, Inc. V. FTC, where the court found that toy manufacturers had improperly conspired, under the guidance and direction of Toys "R" Us, to cease distributing toys through discount retailers. 221 F.3d 928 (7th Cir. 2000) The court found that Toys "R" Us and the toy makers entered into a series of vertical agreements that, taken together, constituted a horizontal agreement as it would not be in any toy maker's interests to cease selling to discount dealers absent an agreement, that "I'll stop if they stop." Id. at 932.
RDK posits that an incident at the 2004 Waste Expo reveals the existence of a horizontal agreement between McNeilus and Heil. RDK went to Waste Expo in the hope of securing a large order of Mack trucks from McNeilus or Heil (Pls.' Resp. Mot. Summ. J. 30.) To that end, RDK's Kemner told a McNeilus executive that he was planning to place a bid with Heil for up to one hundred trucks. Instead, a McNeilus salesman negotiated a sale between RDK and McNeilus. Later, when speaking to Heil's Jimmy Rogers, Kemner told him about McNeilus's agreement to sell Mack trucks to RDK. (Id. at 30-31.) Rogers allegedly pronounced this a "double standard," and marched off toward the Mack Truck booth. (Id. at 31.) RDK suggests that the "plain implication of this utterance was that McNeilus was not abiding by the across the board agreement to cut off RDK, as Mack had previously assured him was the case." (Id.) (internal quotations omitted.)
After the 2004 Waste Expo, McNeilus wrote to RDK memorializing the Waste Expo order and providing a quote for twenty-four trucks. (Id. (citing Ex. 42, Duffey May 25, 2004 letter to Kemner).) The letter closed noting that "[w]e appreciate your business, Richard, and we look forward to a renewed relationship." (Id.) RDK received five of these trucks, but shortly thereafter, McNeilus contacted RDK, and cancelled its contract. RDK suggests that:
Rogers carried through on this threat, made to Kemner at the Waste Expo, that he would get the 'double standard' with respect to Heil and McNeilus and RDK 'straightened out,' that Mack reacted by approaching McNeilus to ensure its compliance with the agreement to cut off RDK's access to discounted Mack Truck and that McNeilus did just that. (Id. at 31-31.)
On June 9, 2004, Mack dealer Bob Nuss wrote to Mack stating that "McNeilus feels that if RDK is buying complete packages of Mack Trucks they would like their share if this is permitted." (Id., Ex. 47, Nuss June 9, 2004 email.) RDK argues that this email shows that McNeilus would agree to deny RDK Mack trucks only if Heil still agreed to do likewise. (Id. at 33.) Shortly thereafter, McNeilus told RDK that it could not provide the previously quoted price as "Mack has problems with RDK." (Id. (quoting Ex. 42, Kemner June 15, 2004 email memorandum).)
RDK suggests that the horizontal conspiracy continued as Heil stopped selling discounted chassis to RDK. (Id. at 34.) Following the 2004 Waste Expo, McNeilus's price quotes increased dramatically. (Id. at 35.) And before it stopped quoting RDK altogether, McNeilus delayed a price quote for so long that RDK lost a potential sale to Metro Disposal.
3. RDK Fails to Show The Existence of Three-Way Conspiracy
"To survive a motion for summary judgment . . . [an antitrust] plaintiff seeking damages for a violation of § 1 [of the Sherman Act] must present evidence that tends to exclude the possibility" that the alleged conspirators acted independently. Matsushita, 475 U.S. at 588 (internal quotation marks omitted). The Supreme Court has been clear that fact finders should not be permitted "to infer conspiracies when such inferences are implausible, because the effect of such practices is often to deter procompetitive conduct." Id. at 593 (citing Monsanto, 465 U.S. at 762-64). In Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007), the Supreme Court summarized the current requirements for antitrust plaintiffs:
An antitrust conspiracy plaintiff with evidence showing nothing beyond parallel conduct is not entitled to a directed verdict, see [ Theatre Enterprises, Inc. v. Paramount Film Distributing Corp., 346 U.S. 537, 74 S.Ct. 257, 98 L.Ed. 273 (1954) ]; proof of a § 1 conspiracy must include evidence tending to exclude the possibility of independent action, see [Monsanto]; and at the summary judgment stage a § 1 plaintiff's offer of conspiracy evidence must tend to rule out the possibility that the defendants were acting independently, see [Matsushita]. 127 S.Ct. at 1964 (internal citations omitted). The Third Circuit has noted that there often exists a "fine line between legitimate business practices and unlawful concerted action, and direct evidence-the smoking gun-of illegal conspiracy may not be available. Thus it is essential to consider all of the evidence proffered to determine whether it is sufficient to withstand a motion for summary judgment." Cosmetic Gallery, 495 F.3d at 52. "Direct evidence in a Section 1 conspiracy must be evidence that is explicit and requires no inferences to establish the proposition or conclusion being asserted." In re Baby Food Antitrust Litig., 166 F.3d 112, 118 (3d Cir. 1999).
All of the evidence RDK presents is circumstantial. RDK claims that it "has adduced direct evidence in the form of admissions from Mack Senior Vice President Kevin Flaherty and National Accounts Manager Joseph Favia" as to the existence of agreements whereby the Body Builders agreed to deny RDK Mack chassis at a discount. (Pls.' Resp. Mot. Summ. J. 52 (citing Flaherty Dep. 62-65; Ex. 20, Joseph E. Favia Toledo Mack Dep. ("Favia Dep.") 228-29, Nov. 12, 2003).)*fn12 For this evidence to stand as direct proof of conspiracy, a reasonable juror would have to determine that these statements constituted proof of an illegal agreement. These deposition statements do not provide this level of clarity. In fact, the cited portion of the Flaherty deposition makes no reference to Heil at all. Rather, the transcript recounts Flaherty's unsuccessful efforts to convince McNeilus not to sell to RDK. (Id., Ex. 2, Flaherty Dep. 62-65.) The Favia deposition is even more off-base as the cited portion in no way mentions Heil or RDK. (Id., Favia Dep. 228-229.) These statements fail to provide direct evidence of any Mack--McNeilus agreement much less a conspiracy between Mack, McNeilus, and Heil.
Accordingly, RDK's "direct" evidence will be grouped with its proffered circumstantial evidence. RDK, in its Response, presents the following as circumstantial evidence of a three-way conspiracy:
(1) 2004 Waste Expo: At the 2004 Waste Expo, Jimmy Rogers of Heil, upon learning from RDK that McNeilus was selling Mack trucks to RDK pronounced this a "double standard," and marched off toward the Mack Truck booth. (Id. at 52.)
Shortly thereafter, McNeilus contacted RDK, and cancelled its contract.
(2) June 9, 2004 Bob Nuss email: In this email, Bob Nuss, a Mack dealer, wrote that "McNeilus feels that if RDK is buying complete packages of Mack Trucks they would like their share if this is permitted." (Id, at 53 (citing Ex. 47, Nuss June 9, 2004 email).)
(3) June 4, 2003 Tim Trom email: RDK asserts that this internal McNeilus email reveals that, as early as June of 2003, when Mack had approached McNeilus to ask it to eliminate sales of discounted trucks to RDK, and told McNeilus that Heil had also agreed to cut off RDK. (Id. at 30 (citing Ex. 37, Trom June 4, 2003 email).)
(4) Flaherty-Rogers call: RDK cites to Mr.
Flaherty's deposition testimony where he recounts how Jimmy Rogers, called him to see if the refusal to deal with RDK was "across the board." (Id. at 29 (citing, Flaherty Dep. 76-77).)
(5) Midwest Power: Unable to obtain Mack trucks from Heil or McNeilus, at competitive prices, RDK started purchasing trucks from Midwest Power, a ...