FLOVAC, INC., Plаintiff, Appellant, v. AIRVAC, INC. and Mark Jones, Defendants, Appellees.
No. 15-1571.
United States Court of Appeals, First Circuit.
April 4, 2016.
817 F.3d 849
V.
For the foregoing reasons, we affirm Urbina‘s conviction and sentence.
Zachary A. Madonia, with whom David M. Schiffman, Courtney A. Hoffmann, Sidley Austin LLP, Rafael Escalera Rodriguez, and Reichard & Escelera were on brief, for appellees.
Before LYNCH, SELYA and LIPEZ, Circuit Judges.
SELYA, Circuit Judge.
That an antitrust case may turn on the definition of the relevant market is a common-sense proposition. In this instance, the summary judgment record disclosed a relevant market much broader than the plaintiff claimed—a market in which the defendant lacked any semblance of market dominance. Finding the plaintiff‘s antitrust claims wanting and its companion claims equally impuissant, the district court entered summary judgment in favor of the defendant. After careful consideration, we affirm.
I. BACKGROUND
Plaintiff-appellant Flovac, Inc. (Flovac) and defendant-appellee Airvac, Inc. (Airvac) both fabricate vacuum sewer systems.
In May of 2012, Flovac filed suit against Airvac and Airvac‘s president, Mark Jones, in the United States District Court for the District of Puerto Rico. Flovaс sought relief under both federal and Puerto Rico antitrust laws, see
Flovac‘s complaint also contained claims of tortious interference with advantageous econоmic relations, brought against Airvac and Jones under Puerto Rico law. See
Airvac did not go quietly into this bleak night. The Ingenio Project was funded in part through the American Recovery and Reinvestment Act of 2009 (ARRA),
Airvac then raised the ARRA compliance issue in a letter to the Environmental Protection Agency (EPA)—the agency tasked with overseeing the “Buy American” requirements for the Ingenio Project. EPA investigated the complaint and recommended that Flovac implement some modifications to its manufacturing process. Flovac complied. It thereafter completed the project, but not without protracted delays (allegedly attributable to Airvac‘s meddling).
After a series of discovery squabbles (not relevant here), Airvac moved for summary judgment. See
II. ANALYSIS
Our standard of review is de novo, which requirеs us to take the facts in the light most agreeable to the summary judgment loser and to draw all reasonable inferences from those facts in that party‘s favor. See Tropigas de P.R., Inc. v. Certain Underwriters at Lloyd‘s of London, 637 F.3d 53, 56 (1st Cir. 2011). Summary judgment is permissible only when examination of the record in that light reveals “no genuine dispute as to any material fact and the movant is entitled to judgment as a mаtter of law.”
A party moving for summary judgment must identify for the district court the portions of the record that show the absence of any genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once such a showing is made, “the burden shifts to the nonmoving party, who must, with respect to each issue on which [it] would bear the burden of proof at trial, demonstrate that a trier of fact could reasonably resolve that issue in [its] favor.” Borges ex rel. S.M.B.W. v. Serrano-Isern, 605 F.3d 1, 5 (1st Cir. 2010). This demonstration must be accomplished by reference to materials of evidentiary quality, see Garside v. Osco Drug, Inc., 895 F.2d 46, 49 (1st Cir. 1990), and that evidence must be more than “merely colorable,” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). At a bare minimum, the evidence must be “significantly probative.” Id. at 249-50. The nonmovant‘s failure to adduce such a quantum of evidence entitles the moving party to summary judgment. See Tobin v. Fed. Express Corp., 775 F.3d 448, 450-51 (1st Cir. 2014).
A. Antitrust Claims.
Flovac has asserted claims under two separate provisions of the Sherman Act: Section 1, whiсh forbids conspiracies in restraint of trade, and Section 2, which bars monopolization or attempted monopolization of a particular area of commerce. See
The definition of the relevant market is ordinarily a question of fact, and the plaintiff bears the burden of adducing enough evidencе to permit a reasonable factfinder to define the relevant market. See Coastal Fuels, 79 F.3d at 197. The relevant market has two components: the relevant geographic market and the relevant product market. See Spectrum Sports, 506 U.S. at 459; E. Food Servs., 357 F.3d at 5-6.
The first part of the relevant market inquiry is not controversial here. The parties agree that the relevant geographic market is the continental Unitеd States
Determining the scope of a product market begins with examining the universe of products that are considered “reasonably interchangeable by consumers for the same purposes.” United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 395 (1956). The market is еstablished by examining both the substitutes that a consumer might employ and “the extent to which consumers will change their consumption of one product in response to a price change in another, i.e., the ‘cross-elasticity of demand.‘” Eastman Kodak Co. v. Image Tech. Servs., Inc., 504 U.S. 451, 469 (1992) (quoting du Pont, 351 U.S. at 400).
These abecedarian principles are sufficient to resolve the case at hand. In the court below, Flovac offered only а single definition of the relevant product market: a product market restricted to vacuum sewer systems. Airvac argued, however, that the relevant product market is composed of all sewer systems (including both vacuum and non-vacuum varieties). This disparity is significant because Airvac‘s market share within the narrower market envisioned by Flovac is around 87%, while its share of the broadеr market is closer to 2%. An 87% market share would almost certainly be a clear indication of market dominance, but a 2% market share would be too puny to provide any semblance of market power. See, e.g., Grappone, Inc. v. Subaru of New England, Inc., 858 F.2d 792, 797 (1st Cir. 1988) (concluding that market share of 5.6% does not demonstrate market power).
To establish the lack of any material fact dispute about the relevant рroduct market, Airvac cites to uncontested evidence that there is a variety of sewer system options that all serve the same basic purpose; that prospective customers routinely consider those other systems (along with vacuum systems) when deciding what system to purchase; and that, in virtually every instance in which Airvac bid for a project, it competed against these alternatives. See Flovac, 84 F. Supp. 3d at 101. This evidence suffices, at the very least, to shift the burden of adducing contrary facts about product interchangeability and cross-elasticity of demand. See Borges, 605 F.3d at 5.
In an attempt to carry this burden and generate a contested issue of material fact, Flovac points mainly to two pieces of evidence. First, it relies on a statement from its president, Héctor Rivera, to the effect that “[v]acuum sewer systems as a particular technology [are] more suitable for particular geographical and topographical areas than gravity or other technologies.” Second, Flovac submits that a review of the record will reveal a list indicating that Flovac has completed more projeсts in certain states than in others. The district court found these offerings insufficient to stave off summary judgment, and so do we.2
The proffered evidence is probative only as to Flovac‘s view of the relevant product
At any rate, Rivera‘s statement is nothing more than a generalized suggestion that, from his coign of vantage, vacuum systems are better suited to some geographic areas than to others. The statement prоvides no specifics about what factors drive that suitability calculation or how the calculation affects the choices consumers make when considering what kind of sewer system to purchase.
Flovac‘s reference to the list of completed projects is singularly unhelpful. The mere fact that Airvac has completed more projects in some statеs than in others, without elaboration, tells us nothing of value about the relevant product market.
In an eleventh-hour effort to undermine the granting of summary judgment, Flovac makes three further arguments. All of them are fruitless.
To begin, Flovac attempts to rely on statements made by Airvac employees, in the course of pretrial depositions, which it claims substantiate its theory that vacuum systеms are uniquely suited to certain topographical settings. Any such reliance is doubly mislaid. For one thing, Flovac did not bring any of these statements to the district court‘s attention in its summary judgment papers. Given that omission, Flovac cannot now attempt to resurrect those statements on appeal. See Cochran v. Quest Software, Inc., 328 F.3d 1, 11 (1st Cir. 2003) (“[A] party may not advance for the first time on appeal either a new argument or an old argument that depends on a new factual predicate.“).
If more were needed—and we doubt that it is—the belatedly identified statements suffer from the same basic infirmity as the Rivera statement and the list of projects. None of those statements is probative of either the interchangeability of different types of sewer systems or the cross-elasticity оf demand.
We need not tarry over Flovac‘s contention that the district court blundered in failing to consider whether vacuum sewer systems make up a submarket of the broader product market for sewer systems. Even assuming, for argument‘s sake, that this contention is properly before us,3 characterizing Flovac‘s claims as involving a submarket is smoke and mirrors. The requirements for establishing a rеlevant submarket are no different than those for establishing a relevant market. See, e.g., PSKS, Inc. v. Leegin Creative Leather Prods., Inc., 615 F.3d 412, 418 (5th Cir. 2010); Geneva Pharm. Tech. Corp. v. Barr Labs., Inc., 386 F.3d 485, 496 (2d Cir. 2004). Therefore, the evidentiary
Finally, Flovac insists that the district court erroneously imposed an ironclad requirement that a plaintiff provide expert testimony in order to establish the relevant market. But this case doеs not require us to take a position on the need for expert testimony in a Sherman Act case, and we express no opinion on that matter. Instead, we reject Flovac‘s argument as sheer persiflage.
The district court observed that other circuits have imposed such a rule, see, e.g., Bailey v. Allgas, Inc., 284 F.3d 1237, 1246 (11th Cir. 2002), and that expert testimony is a common and useful device for establishing a product market, see Flovac, 84 F. Supp. 3d at 102; see also U.S. Healthcare, Inc. v. Healthsource, Inc., 986 F.2d 589, 599 (1st Cir. 1993) (“In practice, the frustrating but routine question how to define the product market is answered in antitrust cases by asking expert economists to testify.“). But the court stopped there: it explicitly acknowledged that this circuit has yet to adopt such a rigid rule and prudently eschewed the application of any such requirement. Rather, the court‘s analysis relied on the wholly anodyne notion that Flovac had a responsibility to “introduce some type of economic evidence, even if not done through an economic expert.” Flovac, 84 F. Supp. 3d at 102. Because Flovac failed to fulfill that responsibility, its opposition to summary judgment failed.
That ends this aspect of the matter. The scanty evidence that Flovac has assembled amounts to nothing more than a gesture in the direction of a potential factual dispute; and we have made pellucid that “[s]peculation about mere possibilities” cannot ward off the swing of the summary judgment ax. Tobin, 775 F.3d at 452. On this record, the district court appropriately jettisoned Flovac‘s antitrust claims.4
B. Tortious Interference.
This leaves Flovac‘s claim of tortious interference with advantageous ecоnomic relations. Those claims, which are premised on Jones‘s interactions with PRASA and EPA concerning the Ingenio Project, stumble at the threshold: they are stale.
Flovac brought the tortious interference claims under Puerto Rico‘s general tort statute. See
Flovac does not dispute that it had notice of both the injury and its source by June of 2010. Nevertheless, it tries to execute an end run around the effect of
Continuing damages cases are still subject to the general rule that a “plaintiff may ‘not wait for his [or her] injury to reach its final degree of development and postpone the running of the period of limitation according to his [or her] subjective appraisal and judgment.‘” Rodriguez-Suris, 123 F.3d at 13 (alterations in original) (quoting Ortiz v. Municipio de Orocovis, 13 P.R. Offic. Trans. 619, 622, 113 D.P.R. 484 (1982)). It follows inexorably that, even in continuing damages cases, “[t]he determining factor is the moment when occurrence of the damage begins, and that should be considered the starting point for the limitations period, assuming that the aggrieved parties were aware of the damage as of that moment and that they could have instituted a cause of action.” Galib Frangie v. El Vocero de P.R., Inc., 138 D.P.R. 560, 575 (1995) (official translation, op. at 854).
Flovac offers no persuasive counterwеight to this luminously clear precedent. To be sure, Flovac has cited two Puerto Rico cases—but it has done so without submitting certified translations of either opinion. Thus, those cases can form no part of our deliberations. See 1st Cir. R. 30.0(e); see also Deniz v. Municipality of Guaynabo, 285 F.3d 142, 148 (1st Cir. 2002). The only other Puerto Rico case that Flovac cites is far off point: it addresses limitations and damages questions stemming frоm an ongoing nuisance. See Seda v. Miranda Hnos. & Co., 88 D.P.R. 344, 349-50 (1963).
The short of it is that, as the district court ruled, Flovac‘s tortious interference claims are time-barred.
III. CONCLUSION
We need go no further. We conclude that, on this sparse record, Flovac has failed to show the existence of a genuine issue of material fact as to the scope of the relevant product market.5 We likewise concludе that Flovac‘s tortious interference claims are time-barred. It necessarily follows that the district court‘s entry of summary judgment in Airvac‘s favor is unimpugnable.
Affirmed.