ZF MERITOR LLC v. Eaton Corp.
769 F. Supp. 2d 684
D. Del.2011Background
- Plaintiffs ZF Meritor LLC and Meritor sued Eaton for Sherman Act §1/§2 and Clayton Act §3 violations.
- Eaton was a leading producer of heavy-duty manual transmissions; Meritor entered HD market in 1989.
- LTAs with Freightliner, Paccar, International, Volvo tied price, penetration targets, rebates, and standard equipment status.
- LTAs included a competitive clause allowing switching if a lower price was offered, with remaining terms intact.
- Market conditions saw consolidation among OEMs and a downturn that preceded the LTAs.
- ZF Meritor exited the market in 2003 due to limited potential market share despite some growth in 2000-2003.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether LTAs unlawfully foreclosed competition | Meritor argues LTAs excluded competitors | Eaton contends prices fell; no unlawful foreclosure | LTAs foreclosed a substantial market share and were unreasonable restraints |
| Causation: Do lay opinions support antitrust injury | Lay witnesses show injury flow from LTAs | Opinions were inadmissible lay testimony | Harmless error; causation supported by expert and trial record |
| Admissibility of DeRamus's antitrust-injury opinions | DeRamus provides reliable, relevant causation analysis | Opinions relied on questionable data | Admissible; opinions meet Rule 702/703 standards and survive Daubert scrutiny |
| Sufficiency of proof of agreement under §1 | OEMs assented to illegal scheme via LTAs | No conscious commitment to unlawful objective shown | Evidence supports a §1 conspiracy through LTAs and joint scheme |
Key Cases Cited
- LePage's Inc. v. 3M, 324 F.3d 141 (3d Cir. 2003) (monopoly power with exclusionary conduct)
- Brown Shoe Co. v. U.S., 370 U.S. 294 (U.S. 1962) (anticompetitive effects require more than dominance)
- United States v. Grinnell Corp., 384 U.S. 563 (U.S. 1966) (monopoly power element standard)
- Verizon Commc'ns Inc. v. Law Offices of Curtis V. Trinko, LLP, 540 U.S. 398 (U.S. 2004) (monopoly power and anticompetitive conduct requirements)
- Link v. Mercedes-Benz of N. Am. Inc., 788 F.2d 918 (3d Cir. 1986) (conscious commitment to unlawful objective not always required)