Flovac, Inc. v. Airvac, Inc.
84 F. Supp. 3d 95
D.P.R.2015Background
- Flovac, a Puerto Rico entrant in vacuum sewer systems, sued Airvac and its president Mark Jones under Sherman Act §§ 1 and 2 and parallel Puerto Rico antitrust and tortious-interference claims, alleging conspiratorial and misleading efforts to block Flovac’s projects.
- The key factual dispute centers on the Ingenio Project (Toa Baja, PR), funded in part by ARRA; PRASA awarded the contract to a bidder using Flovac equipment, after which Jones wrote to PRASA alleging Flovac violated Buy American and single-manufacturer requirements, temporarily halting the project.
- EPA reviewed Jones’s complaints, recommended additional local manufacturing steps, but did not disqualify Flovac; Flovac ultimately completed the project after approximately a delay that its president estimated at ~10 months.
- Defendants moved for summary judgment arguing (inter alia) Flovac cannot show market power because the relevant market includes all sewer systems (gravity, low-pressure, vacuum), and that Flovac failed to produce evidence (including economic/expert proof) to define a vacuum-only product market.
- The court treated the record in Flovac’s favor where appropriate but concluded Flovac presented only conclusory evidence (undated affidavit, project counts) and failed to rebut defendants’ showing that the relevant product market includes other sewer systems.
- The court granted summary judgment: federal and Puerto Rico antitrust claims dismissed for failure to establish a distinct vacuum-system market (hence no market power); tortious-interference claims dismissed as time-barred under Puerto Rico’s one-year limitations period.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Relevant product market / market power (§§1 & 2) | Market = vacuum sewer systems only; Airvac thus monopolist | Relevant market includes all sewer systems (gravity, low-pressure, vacuum); Airvac lacks market power | Court: Defendants met burden; Flovac failed to present competent evidence to define vacuum-only market; summary judgment for defendants |
| Sufficiency of evidence to define market | Flovac relied on president’s affidavit and Airvac project counts to show geographic/topographic suitability of vacuum systems | Evidence is conclusory, undated, not tied to cross-elasticity, and violates local rules; no economic analysis or expert support | Court: Evidence is legally insufficient (mere colorable assertions); no triable issue on market definition |
| Antitrust claims under rule of reason (§1) and §2 liability | Defendant conduct (letters, influence) was exclusionary and injured competition | Threshold market-power requirement unmet; Noerr-Pennington and lack of exclusionary effect argued | Court: No need to assess exclusionary conduct or immunity because Flovac failed threshold market-power showing; claims dismissed |
| Tortious interference (Ingenio Project) — statute of limitations | Damage continued into 2011; continuing-damages tolling makes suit timely | Jones’s May 20, 2010 letter triggered knowledge and injury; one-year limitations ran by June 2011 | Court: Flovac had knowledge in June 2010; continuing-damages doctrine does not save claim; tort claims time-barred and dismissed |
Key Cases Cited
- A. A. Poultry Farms, Inc. v. Rose Acre Farms, Inc., 881 F.2d 1396 (7th Cir. 1989) (motive to eliminate rivals consistent with competition)
- Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451 (1992) (relevant-product-market test: reasonable interchangeability and cross-elasticity)
- Brown Shoe Co. v. United States, 370 U.S. 294 (1962) (framework for defining product market)
- United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377 (1956) (market alternatives defeat monopoly claim)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (summary-judgment standard: colorable vs. probative evidence)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary-judgment burdens)
- Town of Concord, Mass. v. Boston Edison Co., 915 F.2d 17 (1st Cir. 1990) (plaintiff bears burden to define relevant market)
- George R. Whitten, Jr., Inc. v. Paddock Pool Builders, Inc., 508 F.2d 547 (1st Cir. 1974) (market definition must reflect consumer perspective)
- Diaz Aviation Corp. v. Airport Aviation Servs., Inc., 716 F.3d 256 (1st Cir. 2013) (market-power requirement for rule-of-reason and §2 claims)