Buccaneer Energy (USA) Inc. v. Gunnison Energy Corp.
2017 U.S. App. LEXIS 1940
| 10th Cir. | 2017Background
- Buccaneer Energy formed to acquire Riviera’s Ragged Mountain (RM) leases and sought access to the Ragged Mountain Gathering System (RM System) to transport gas; Buccaneer never produced gas because it failed to secure a transportation agreement and the LPA with Riviera was terminated.
- Defendants GEC and SG jointly owned and operated the RM System (GEC as operator subject to SG approval) and later built the larger Bull Mountain Pipeline; they negotiated transportation rates with Riviera and later offered Buccaneer draft agreements with high rates and discretionary interruption terms.
- Buccaneer alleged Defendants concertedly refused reasonable access to the RM System, harming competition in two markets: upstream "production rights" in the RM Area and downstream gas sales on the Rocky Mountain Pipeline, in violation of §§ 1 and 2 of the Sherman Act.
- District court granted summary judgment for Defendants, finding insufficient evidence of harm to competition in a defined relevant market and that Buccaneer lacked antitrust standing; Buccaneer appealed.
- The Tenth Circuit assumed, for analysis, that a concerted refusal-to-deal occurred but affirmed summary judgment because Buccaneer failed to (1) define legally sufficient product/geographic markets and (2) present evidence of defendant market power or other indicia of anticompetitive effect in either alleged market.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether concerted refusal to deal violated §1 under rule of reason (anticompetitive effect) | Buccaneer: denial of RM System access harmed competition in upstream production-rights and downstream gas-sales markets | Defendants: no unreasonable restraint because no proof of harm to competition or market power; Trinko bars refusal-to-deal claims absent narrow exceptions (for unilateral conduct) | Held: Court assumed conspiracy but plaintiff failed to show anticompetitive effect in a relevant market under rule of reason; summary judgment affirmed |
| Whether Buccaneer defined a relevant product market for upstream "production rights" | Buccaneer: production rights in the RM Area constitute a distinct market | Defendants: term is ill-defined and plaintiff provides no interchangeability/cross-elasticity evidence | Held: Plaintiff failed to define product market with required interchangeability analysis; market-definition failure fatal |
| Whether Buccaneer defined a relevant geographic market for upstream or downstream claims | Buccaneer: RM Area for upstream; constrained segment of Rocky Mountain Pipeline in winter for downstream | Defendants: geographic boundaries are arbitrary/unsupported; constrained-period market is artificially narrow | Held: Geographic markets not adequately defined; focusing on a temporary constrained segment is improper; failed burden met |
| Whether plaintiff showed market power or anticompetitive effects (monopsony for upstream; downstream power) | Buccaneer: expert reports claim Defendants dominated local production and supplied a substantial share of constrained peak demand | Defendants: market-share evidence insufficient, no evidence on barriers, competitors, durability, or share of production-rights market | Held: Market-share or output evidence insufficient and other market-power indicia lacking; plaintiff failed to prove anticompetitive effect under §§1 and 2 |
Key Cases Cited
- Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Co., 472 U.S. 284 (describing per se vs. rule-of-reason and group-boycott treatment)
- Copperweld Corp. v. Indep. Tube Corp., 467 U.S. 752 (distinguishing unilateral from concerted conduct under antitrust law)
- Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (limits on monopolization claims based on unilateral refusal to deal)
- California Dental Ass'n v. FTC, 526 U.S. 756 (discussion of "quick look" rule-of-reason analysis)
- Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877 (rule-of-reason framework for assessing restraints)
- Law v. National Collegiate Athletic Ass'n, 134 F.3d 1010 (shifting burdens under rule of reason)
- SCFC ILC, Inc. v. Visa USA, Inc., 36 F.3d 958 (plaintiff must show adverse effect on competition, not merely competitors)
- Reazin v. Blue Cross & Blue Shield of Kansas, Inc., 899 F.2d 951 (market-power proof and indirect proof methods)
- Campfield v. State Farm Mut. Auto. Ins. Co., 532 F.3d 1111 (market-definition threshold and monopsony discussion)
- Novell, Inc. v. Microsoft Corp., 731 F.3d 1064 (market-power and market-definition principles)
- Lenox MacLaren Surgical Corp. v. Medtronic, Inc., 762 F.3d 1114 (interchangeability and market-definition requirements)