Gatt Communications, Inc. v. PMC Associates, L.L.C.
2013 U.S. App. LEXIS 3186
| 2d Cir. | 2013Background
- Gatt alleges a bid-rigging scheme to defraud New York state and city agencies in Vertex radio contracts.
- Gatt was a Vertex dealer; PMC acted as Vertex’s NY sales representative; Wineland was Vertex VP of Sales.
- Dealer Agreement allowed termination by either party without cause on 30 days’ notice; Vertex warned Gatt to cooperate with PMC.
- New York Catalog Contract set maximum prices; PMC forbade dealers from pricing below it; several dealers could bid.
- From 2005–2007, Gatt participated in the scheme, submitting inflated bids at PMC’s direction to steer contracts to Vertex dealers (often PMC).
- In Aug–Sept 2007, Gatt independently bid on a Transit Authority contract; Vertex termination followed; PMC won the contract.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Gatt has antitrust standing to sue | Gatt argues injury from bid-rigging is antitrust injury and efficient enforcer | Standing requires injury to competition and efficient enforcer; Gatt lacks | Gatt lacks antitrust standing; district court affirmed |
| Whether Donnelly Act claims survive without antitrust standing | Donnelly Act mirrors Sherman Act; standing should follow federal | Without antitrust standing, Donnelly Act claims fail | Donnelly Act claims are also dismissed for lack of standing |
| Whether state common law tort claims survive | Tortious interference claims premised on bid-rigging conduct | Derived from antitrust theory; failing standing undermines tort claims too | State tort claims affirmed as failing for want of standing and merit |
Key Cases Cited
- Associated General Contractors of Cal., Inc. v. California State Council of Carpenters, 459 U.S. 519 (1983) (antitrust standing boundaries for private treble-damage actions)
- Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328 (1990) (antitrust injury and standing requirement; private damages)
- Port Dock & Stone Corp. v. Oldcastle Ne., Inc., 507 F.3d 117 (2d Cir. 2007) (multi-factor test for antitrust standing; directness, injury type)
- Paycom Billing Servs., Inc. v. MasterCard Int'l, Inc., 467 F.3d 283 (2d Cir. 2006) (efficient enforcer factors and standing framework)
- Daniel v. American Bd. of Emergency Med., 428 F.3d 408 (2d Cir. 2005) (antitrust standing considerations and injury analysis)
- Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877 (2007) (rule-of-reason approach to restraints; market power factors)
- Bateman Eichler, Hill Richards, Inc. v. Berner, 472 U.S. 299 (1985) (in pari delicto considerations in private antitrust actions)
- U.S. Football League v. National Football League, 842 F.2d 1335 (2d Cir. 1988) (antitrust standing and fault considerations; caveats for record)