Superior Production Partnership v. Gordon Auto Body Parts Co.
784 F.3d 311
6th Cir.2015Background
- Gordon, a Taiwanese manufacturer, and several Taiwanese competitors dominated the U.S. replacement truck-hood market; PBSI (U.S.) entered production in 2006 and alleged predatory pricing by Gordon and others drove down prices.
- PBSI sued under Sherman Act §§1 and 2 and the Robinson-Patman Act, alleging a conspiratorial predatory-pricing scheme aimed at excluding PBSI from four truck-hood product markets.
- Discovery disputes: PBSI sought full underlying cost documents and competitor production agreements beyond tooling; the magistrate ordered limited sampling (five fiscal quarters) to verify Gordon’s cost summaries and declined to compel broader production; district court affirmed.
- Competing experts: PBSI’s economist McFarland used a “no economic sense” (profit-maximization deviation) test and opined on intent and recoupment; Gordon’s economist Hall compared prices to average variable/avoidable costs. District court excluded McFarland’s opinions on intent and the no-economic-sense cost test; admitted Hall.
- District court granted Gordon summary judgment, resting on PBSI’s failure to show below-cost pricing or a likelihood of recoupment; this appeal followed.
Issues
| Issue | Plaintiff's Argument (PBSI) | Defendant's Argument (Gordon) | Held |
|---|---|---|---|
| Scope of cost-document discovery | PBSI: Gordon must produce all underlying invoices, AP records, and full backups to validate cost summaries | Gordon: broad production is unduly burdensome; summaries suffice; sampling is reasonable | Waiver and discretion: PBSI waived timely objection; sampling approach was a reasonable discovery compromise; no abuse of discretion |
| Discovery of competitor production agreements for other parts | PBSI: other agreements show proclivity to collude and are relevant to recoupment/plausibility of conspiracy | Gordon: agreements unrelated to the four relevant hood markets and irrelevant to cost/pricing here | Denied: district court reasonably excluded broader agreements as unlikely to lead to relevant evidence on costs/recoupment |
| Admissibility of plaintiff expert’s methodology (McFarland) | PBSI: McFarland’s “no economic sense” test and intent opinions show predation and recoupment likelihood | Gordon: McFarland’s methods deviate from Brooke Group/Spirit; opinions unreliable and legally improper | Affirmed exclusion: expert’s profit-maximization (no-economic-sense) test and intent opinions were unreliable/contrary to law and properly excluded |
| Sufficiency of evidence for predatory pricing and recoupment | PBSI: price–cost proximity and circumstantial/intent evidence support below-cost pricing and dangerous probability of recoupment | Gordon: prices above appropriate cost measures (average variable/avoidable); no reliable evidence of below-cost pricing or feasible recoupment | Summary judgment affirmed: PBSI failed to present reliable cost-comparison or recoupment evidence; remaining evidence is insufficient to defeat summary judgment |
Key Cases Cited
- Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752 (explains difference between concerted and unilateral action under the Sherman Act)
- Conwood Co. v. U.S. Tobacco Co., 290 F.3d 768 (6th Cir.) (elements and intent standards for monopolization/attempted monopolization)
- Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (discusses exclusionary conduct and intent)
- Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (establishes below-cost and recoupment prerequisites for predatory pricing claims)
- Spirit Airlines, Inc. v. Nw. Airlines, Inc., 431 F.3d 917 (6th Cir.) (applies burden-shifting framework re: alternative cost measures such as average variable cost)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (addresses plausibility of conspiratorial predatory pricing and inference standards)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (summary judgment standard: more than a scintilla required)
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden-shifting principles)
- Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (gatekeeping standard for expert testimony)
- Kumho Tire Co. v. Carmichael, 526 U.S. 137 (trial court discretion on expert reliability and methodology)