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Univac Dental Co. v. Dentsply International

March 31, 2010

UNIVAC DENTAL COMPANY, AND LACTONA CORPORATION, PLAINTIFFS
v.
DENTSPLY INTERNATIONAL, INC., DEFENDANT



The opinion of the court was delivered by: Judge Conner

MEMORANDUM

Presently before the court are two motions for summary judgment (Docs. 63, 64) and the magistrate judge's report (Doc. 106) recommending that both motions be granted in part and denied in part. Plaintiffs Univac Dental Company ("Univac") and Lactona Corporation ("Lactona"), and defendant Dentsply International, Inc. ("Dentsply"), have filed objections to the magistrate judge's report and recommendation ("R&R"). For the reasons set forth below, the court will adopt the R&R.

I. Factual Background & Procedural History

Plaintiffs are two dental supply manufacturers. They complain that defendant-the dominant manufacturer and supplier in the market for artificial teeth, used in dentures-has engaged in anti-competitive practices, in violation of, inter alia, § 2 of the Sherman Act. Plaintiffs contend that defendant's alleged antitrust violations have harmed them-or, more directly, harmed Universal Dental Company ("Universal"), plaintiffs' predecessor and one of defendant's competitors. The complained-of practices include Dentsply's adoption and enforcement of a policy ("Dealer Criterion 6") that prohibited dental product dealers from adding competitors' artificial teeth to their product lines. Dealer Criterion 6 restricted dealers from expanding their offerings of competitive lines of teeth, but it did not completely preclude them from selling competing products. To the extent that dealers carried competing products before Dealer Criterion 6 was adopted, continued sales of those products were permitted.

The above-captioned case is not the first legal proceeding challenging Dentsply's business practices and policies. They were also challenged by the antitrust division of the United States Department of Justice in 1999. (Doc. 106 at 5-6); see United States v. Dentsply Int'l, Inc., 277 F. Supp. 2d 387 (D. Del. 2003), United States v. Dentsply Int'l, Inc., 399 F.3d 181 (3d Cir. 2005). The basis of plaintiffs' motion for partial summary judgment is that the prior litigation has conclusively resolved some of the issues presented in the instant case. Defendant has also moved for summary judgment, based on the alleged insufficiency of plaintiffs' evidence.

The magistrate judge recommends that defendant's motion (Doc. 64) for summary judgment be granted with respect to plaintiff's state law claims and denied with respect to plaintiffs' federal antitrust claims. He also recommends that plaintiffs' motion (Doc. 63) for partial summary judgment be granted to the extent that it precludes defendant from re-litigating issues concerning the anti-competitive nature of its business practices but denied to the extent that plaintiffs seek to avoid litigating the questions of damages and causation.

II. Standard of Review

A. Standard of Review for Cross-Motions for Summary Judgment

Through summary adjudication the court may dispose of those claims that do not present a "genuine issue as to any material fact" and for which a jury trial would be an empty and unnecessary formality. See FED. R. CIV. P. 56(c). The burden of proof is upon the non-moving party to come forth with "affirmative evidence, beyond the allegations of the pleadings," in support of its right to relief. Pappas v. City of Lebanon, 331 F. Supp. 2d 311, 315 (M.D. Pa. 2004); FED. R. CIV. P. 56(e); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). This evidence must be adequate, as a matter of law, to sustain a judgment in favor of the non-moving party on the claims. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250-57 (1986); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587-89 (1986); see also FED. R. CIV. P. 56(c), (e). Only if this threshold is met may the cause of action proceed. Pappas, 331 F. Supp. 2d at 315.

In the instant matter, the parties have filed cross-motions for summary judgment. According to the Third Circuit:

Cross-motions are no more than a claim by each side that it alone is entitled to summary judgment, and the making of such inherently contradictory claims does not constitute an agreement that if one is rejected the other is necessarily justified or that the losing party waives judicial consideration and determination whether genuine issues of material fact exist.

Lawrence v. City of Phila., 527 F.3d 299, 310 (3d Cir. 2008) (quoting Rains v. Cascade Indus., Inc., 402 F.2d 241, 245 (3d Cir. 1968)). Each movant must show that no genuine issue of material fact exists; if both parties fail to carry their respective burdens, the court must deny the motions. See Facenda v. N.F.L. Films, Inc., 542 F.3d 1007, 1023 (3d Cir. 2008). When reviewing each motion, the court is bound to view the evidence in the light most favorable to the non-movant. FED. R. CIV. P. 56; United States v. Hall, 730 F. Supp. 646, 648 (M.D. Pa. 1980).

B. Standard of Review for a Magistrate Judge's Recommendation

Where objections to a magistrate judge's report and recommendation are filed, the court must perform a de novo review of the contested portions of the report. Supinski v. United Parcel Serv., Civ. A. No. 06-0793, 2009 WL 113796, at *3 (M.D. Pa. Jan. 16, 2009) (citing Sample v. Diecks, 885 F.2d 1099, 1106 n. 3 (3d Cir. 1989); 28 U.S.C. § 636(b)(1)(c)). "In this regard, Local Rule of Court 72.3 requires 'written objections which... specifically identify the portions of the proposed findings, recommendations or report to which objection is made and the basis for those objections.'" Id. (citing Shields v. Astrue, Civ. A. No. 07-417, 2008 WL 4186951, at *6 (M.D. Pa. Sept. 8, 2008)).

Where parties have not filed objections to a magistrate judge's report and recommendation, the Federal Magistrates Act does not require a district court to review the report before accepting it. Thomas v. Arn, 474 U.S. 140, 149 (1985). As a matter of good practice, however, the Third Circuit expects courts to "afford some level of review to dispositive legal issues raised by the report." Henderson v. Carlson, 812 F.2d 874, 878 (3d Cir. 1987). The advisory committee notes to Rule 72(b) of the Federal Rules of Civil Procedure indicate that "[w]hen no timely objection is filed, the court need only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation." FED. R. CIV. P. 72(b), advisory committee notes; see also Tice v. Wilson, 425 F. Supp. 2d 676, 680 (W.D. Pa. 2006) (holding that the court's review is conducted under the "plain error" standard); Cruz v. Chater, 990 F. Supp. 375-78 (M.D. Pa. 1998) (holding that the court's review is limited to ascertaining whether there is "clear error on the face of the record"); Oldrati v. Apfel, 33 F. Supp. 2d 397, 399 (E.D. Pa. 1998) (holding that the court will review the report and recommendation for "clear error").

III. Discussion

Plaintiffs' objections (Doc. 118) to the R&R include the following arguments:

(1) that the court should give preclusive effect to the Third Circuit's determination that defendant's actions injured Universal; and (2) that the court should adopt additional proposed findings. Defendant's objections (Doc. 119) to the R&R are as follows: (1) that there are no genuine issues concerning the application of the statute of limitations to plaintiffs' claims; (2) that there are no genuine issues regarding whether Dentsply's conduct injured plaintiffs; (3) that plaintiffs have failed to create a triable issue of fact with regard to the allegation that Dentsply's tooth swaps and exclusivity rebates violated antitrust laws; and (4) that the court should decline to adopt certain ...


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