696 F. App'x 293
9th Cir.2017Background
- AFMS LLC sued UPS and FedEx under Section 1 of the Sherman Act alleging anticompetitive conduct in markets for "shipping consultation services" and "rate negotiation."
- District court granted summary judgment for UPS and FedEx; AFMS appealed.
- AFMS defined markets to include only third-party rate consultants, plus UPS and FedEx, excluding in-house advisors, USPS, regional carriers, and other consultants.
- The panel majority held AFMS failed to define a cognizable relevant market and failed to show that both AFMS and the carriers participated in the same market.
- The court noted it is implausible that carriers like UPS and FedEx would be participants in a rate-negotiation market (they would not "negotiate with themselves").
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether AFMS defined a cognizable relevant market for antitrust purposes | AFMS: markets for "shipping consultation services" and "rate negotiation" are valid and limited to third-party consultants plus carriers | UPS/FedEx: AFMS improperly excludes in-house advisors, USPS, regional carriers and other competitors; market definition is artificially narrow | Court: AFMS failed to define a cognizable market; summary judgment affirmed |
| Whether defendants and AFMS participated in the same market (antitrust standing) | AFMS: carriers are participants in the alleged rate-negotiation/consultation markets | Defendants: carriers are not participants in a market where they would negotiate rates with third-party consultants | Court: AFMS failed to show both it and carriers were in the same market; standing lacking |
| Admissibility/necessity of expert evidence on market definition | AFMS: expert testimony not strictly required to define the market | Defendants: district court properly excluded AFMS's proffered expert under Rule 702 and AFMS relied on inadequately cited record evidence | Concurrence: market definitions could be cognizable, but district court did not abuse discretion excluding the expert and AFMS produced insufficient admissible evidence to survive summary judgment |
| Standard for summary judgment in antitrust market-definition cases | AFMS: disputed facts on market existence preclude summary judgment | Defendants: absence of a properly defined market and admissible evidence entitles them to judgment as a matter of law | Court: summary judgment appropriate when plaintiff fails to define a cognizable market; affirmed |
Key Cases Cited
- Morgan, Strand, Wheeler & Biggs v. Radiology, Ltd., 924 F.2d 1484 (9th Cir.) (summary judgment appropriate when plaintiff fails to define a cognizable market)
- Amarel v. Connell, 102 F.3d 1494 (9th Cir.) (antitrust standing requires plaintiff and defendants to participate in same market)
- Bhan v. NME Hosps., Inc., 772 F.2d 1467 (9th Cir.) (same-market requirement for antitrust standing)
- Yellow Pages Cost Consultants, Inc. v. GTE Directories Corp., 951 F.2d 1158 (9th Cir.) (recognizing markets for certain consulting services)
- Tele*cor Communications, Inc. v. Sw. Bell Tel. Co., 305 F.3d 1124 (10th Cir.) (discussing markets for specialized services)
- United States v. Pabst Brewing Co., 384 U.S. 546 (U.S. 1966) (expert testimony not always required to define relevant market)
- Jinro Am. Inc. v. Secure Invs., Inc., 266 F.3d 993 (9th Cir.) (standards for admissibility of expert testimony under Rule 702)
- Nilsson, Robbins, Dalgarn, Berliner, Carson & Wurst v. Louisiana Hydrolec, 854 F.2d 1538 (9th Cir.) (district court need not consider inadequately cited evidence in voluminous records)