Flovac, Inc. v. Airvac, Inc.
2016 U.S. App. LEXIS 6150
1st Cir.2016Background
- Flovac and Airvac both manufacture vacuum sewer systems and competed for municipal and developer contracts; Flovac sued Airvac and its president in Puerto Rico federal court alleging antitrust violations and tortious interference related to bid solicitation and project specifications.
- Flovac alleged Airvac lobbied municipalities to prefer vacuum systems and pushed specifications favoring Airvac; dispute included the Ingenio Project in Toa Baja, funded in part by ARRA, where PRASA initially halted Flovac’s work after Airvac questioned ARRA compliance.
- EPA investigated Airvac’s complaint, recommended manufacturing changes, Flovac complied and completed the project after delays; Flovac claimed damages from Airvac’s conduct.
- Airvac moved for summary judgment; the district court granted summary judgment for Airvac on all claims, finding Flovac failed to show a relevant product market limited to vacuum systems and that the tortious interference claims were time-barred.
- On appeal, the First Circuit reviewed de novo, focusing on whether Flovac produced sufficient evidence on product interchangeability/cross-elasticity to define a vacuum-only product market and whether the tort claims were timely.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Relevant product market for antitrust claims | Market is vacuum sewer systems only; Airvac dominates (~87% share in that market) | Relevant market includes all sewer systems (vacuum + non-vacuum); Airvac’s share ~2% — no market power | Court held Flovac failed to raise a triable issue; consumers consider alternatives; broader market proper for summary judgment purposes |
| Existence of a vacuum-system submarket / need for expert evidence | Vacuum systems form a distinct submarket; plaintiff’s declarations and project list suffice | Plaintiff offered no consumer-facing economic evidence or expert analysis to show interchangeability limits | Court rejected submarket claim and found plaintiff’s evidence insufficient; declined to impose a per se expert requirement but required some economic evidence |
| Timeliness of tortious interference claims | Damages were continuing; limitations did not start until harm completed | PRASA’s halt in June 2010 gave notice of injury and source; one-year statute ran before suit filed in May 2012 | Court held claims time-barred—limitations began by June 2010 and plaintiff sued too late |
Key Cases Cited
- United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377 (market defined by interchangeability and cross-elasticity)
- Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451 (use of cross-elasticity in market definition)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden-shifting)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment requires significantly probative evidence)
- Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447 (antitrust plaintiffs must show market power)
- Coastal Fuels of P.R., Inc. v. Caribbean Petroleum Corp., 79 F.3d 182 (First Circuit on market-definition burden)
- Grappone, Inc. v. Subaru of New England, Inc., 858 F.2d 792 (low market share insufficient to show market power)
- Tobin v. Fed. Express Corp., 775 F.3d 448 (speculation cannot defeat summary judgment)