USA Petroleum Company v. Atlantic Richfield Company

drivе independent producers like out ALARCÓN, Before: NELSON, and business. USA alleged that ARCO’s conduct REINHARDT, Circuit Judges. violated the antitrust laws in ways. two First, USA asserted agreement that an to set ORDER maximum prices resale illegal per se under section The 1 of Petition Second, for Sherman Rehearing Act. granted. alleged opinion The prices August 12,1992, filed on ARCO’s were “predatory” is here- constituted an withdrawn and following attempt opinion monopolize sub- violation stituted in place. section of Act, suggestion Sherman § U.S.C. April 28, reconsideration On en banc is therefore moot. volun- tarily dismissed its attempted mo- nopolization claim could not show OPINION “dangerous success” neces- NELSON, D.W. Circuit Judge: sary prevail on that USA, however, claim. (“ARCO”) Atlantic Richfield Co. is one of press continued to its section 1 claim. “major” oil companies; USA Petroleum On 30,1986, June partial moved for (“USA”) Co. is an “independent” gasoline summary judgment on USA’s section claim. marketer. alleged that ARCO and its ARCO offered arguments two support conspired dealers to drive USA and other First, this motion. argued that USA had independents out of the gasoline retail mar- claim, no standing to assert the because USA by agreeing ket gasoline retail set prices could not suffer from a con- “below market levels” and contends that this spiracy to set maximum prices unless those agreement vertical to fix maximum resale prices predatory. Second, were ARCO ar- prices violates section 1 Act, of the Sherman gued that USA could not prove that ARCO’s U.S.C. predatory because USA could USA appealed from the decision of the a dangerous show probability of success- district court granting summary judgment in ful monopolization. responded to the favor of defendant ARCO on the antitrust motion judgment by asserting reversed, claims. We holding that that it did not need to show standing to challenge ARCO’s alleged or, verti alternative, predatory cal maximum resale maintenance under Sherman Act section did not require scheme. See USA Petroleum v. Atlantic probability of success. The dis- Cir. trict granted Richfield for sum- 1988). Court in turn reversed mary judgment. It held “[e]ven assum- contrast, ARCO, asserts con- vertical establish can ing [USA] its section abandoned prices, [it] low maintain spiracy evidence failing to claims injury1 requirement ‘antitrust satisfy the opposition to showing such 4,§ without Clayton Act or, in the that The court reasoned predatory.” to be district the alternative, to contest failed show that not could USA ap- on pricing predatory of definition court’s pos- did not ARCO because predatory were the Su- that argues further ARCO peal. therefore power market sufficient sess in this case decision preme Court’s the monopolizing in unlikely to succeed in the section pricing predatory that decided market. antitrust prerequisite for 2 sense is heldWe court. district the reversed We 1. section on premised is claim if the even challenge standing to did have that USA Group is Brook that contends Finally, ARCO under sec maximum to set conspiracy only addressed the it because inapplicable Petroleum, F.2d at 859 USA tion See primary- liability for for substantive standard on injury based found we Because Robinson- under discrimination line fix conspiracy to illegality per se the 2(a) what disturb not and did Act Patman reach did not prices, we resale maximum clear Court’s views ARCO pred in engaged ARCO had of whether issue pricing predatory 2 section that mandate in turn Supreme Court atory pricing. reasons, For these should control. standards “[although that held The Court reversed. should district court asserts ARCO agreement vertical, maximum-price-fixing affirmed. Act, it Sherman § 1 of the unlawful character- arguendo that Assuming competitor cause a not does pricing prеdatory appropriate ization At pricing. predatory results unless correct, believe I nonetheless standard at S.Ct. at Richfield, 495 lantic further be entitled not would that re then The Court 1891 pricing. of below-cost discovery the issue on “proceed this court for the case manded district of the Accordingly, 346, at Id. opinion.” this with ings consistent be affirmed. must court at 1895. 110 S.Ct. III. Jurisdiction the Parties Contentions II. various reject ARCO’s Initially, we Upon Remand First, as discussed challenges. jurisdictional not abandon did below, it is clear the Su now asserts correct constitutes of what question did not reach preme Court district standard predatory charged were prices ARCO whether rejected Rather, district court. Richfield, 495 U.S. see Atlantic predatory, its merits. on predatory 3, court USA’s n. this at 1888 110 333 the issue raise Second, appeared to defini the district reexamine should pricing stan predatory 1 whether Specifically, USA pricing. predatory tion of appeal to one in first proper was the dard decision recent the Court’s contends Opening Appellant’s court. See & Williamson v. Brown Group Ltd. Brook did — n. 16. Even & at 31-32 Brief U.S. -, 113 S.Ct. Corp., Tobacco opening in its the issue raise adequately (1993), establishes L.Ed.2d ques thoroughly brief, discussed ARCO in “below- engаged must show brief, 1987Brief Appellee’s see in its own tion “reasonable had a which pricing cost” justify ex 35-44, believe which we suf any losses recouping” ... of prospect v. see, States waiver, e.g., United cusing the (quoted at -, fered, id Cir.1992); (9th Ullah, F.2d 5). Con Supp.Brief Appellant’s 1993 Anaheim, F.2d City v. Eberle re this court requests sequently, USA Union Cir.1990); (9th International discovery these case for further mand Local Un- Allied Bricklayers & Craftsman two issues. JASKA, However, prospect recoupment. No. AFL-CIO v. Martin ion Cir.1985). Inc., 1404 n. 4 concedes it. yet presented has not reject Finally, we the notion that Su- evidence of below-cost Because preme decision in this case decided USA contends that it must show below-cost 2 predatory pricing recoupment,' that section standards proof failure of Noting that should control. had not provide we alone would a ba proper affirming reached the definition sis for the district court. Celo See Catrett, pricing, Corp. 317, 323, the Court stated: “For tex case, (1986).1 purposes of this we likewise assume 91 L.Ed.2d 265 petitioner’s prices Only the record that was before the district nature,” 333, Richfield, considered, normally Atlantic 495 at court is see Harkins added), 3; Enters., n. 3 110 S.Ct. at 1888 n. Amusements Inc. v. General Cine moreover, (9th 477, the Corp., Cir.1988), Court noted that it “had no ma 850 F.2d 482 ... proper occasion the consider definition cert. sub denied nom. United Artists Theatre 10, Circuit, predatory pricing,” id. 341 n. 110 v. Inc. Harkins Amusements En ters., Inc., Accordingly, 1019, at 1893 n. 10. the 817, issue 488 U.S. 109 S.Ct. 102 appropriate predatory (1989), the summary standard L.Ed.2d 806 and judg the adequately preserved was to be considered at ment be supplemented record cannot on ap proceedings. stage peal, Elias, of the see United States v. 921 F.2d (9th Cir.1990).

870, Thus, 874 the narrow question that must be addressed is whether Summary Judgment IV. The Standard discovery USA entitled to more on below- principle It is an established that an not, pricing; cost if it is then there is no appellate may court affirm a lower court’s tried, issue of material fact left to and be the summary grant judgment basis judgment must be affirmed. supported by the even if record the lower inquiry The relevant is whether USA was applied legal court the incorrect standard. given opportunity a full and fair to address Indus., Inc., Henry 943, v. See Gill 983 F.2d the issue of response below-cost (9th Cir.1993); 950 accord Diaz v. Am. Tel. summary judgment See, ARCO’s motion. (9th Tel., Cir.1985); & 752 F.2d cf. al., e.g., Jeremy 6A C. Moore et Moore’s Gowran, 238, Helvering 245, ¶ 56.27[1], Federal Practice at 56-858 n. 55 (1937) (“[T]he 82 L.Ed. 224 (1993) (“But if genuine a fact exists rule is settled that the decision below is proper under the standard and the correct, affirmed, although must be appellant opportunity has ‍‌​​‌‌​​​​‌‌‌​​​‌​‌​‌​‌​‌‌‌‌‌​​‌‌‌‌‌​‌‌​‌‌​​​​​​​‍not had a fair upon wrong ground lower court relied a facts, challenge reason.”). gave wrong generally See (emphasis added)); should not affirmed.” Miller, Wright Charles A. & Arthur R. Fed Union, Auto., International United Aero 2716, § eral Practice & Procedure at 658-60 space Agric. Implement & Workers Am. v. cases) (1983 (citing Supp.1992). & 16 & Right Legal National to Work Defense Found., Inc., It is assumed that the district court Educ. 590 F.2d applied (D.C.Cir.1978); the incorrect Fruge stan Heirs v. Blood is, Servs., (5th Cir.1975).2 that appropriate dard and one as USA 506 F.2d 2n. contends, that Group Although recognizing articulated Brook “in deciding that 2(a) summary judgment proper Robinson-Patman Act: whether pricing coupled standard, below with appellate cost new legal reasonable court Similarly, may 1. The record appeals also does not contain evidence court of sum enter However, mary judgment as, sponte against party long recoupment. sua find that USA party opportunity that a full and fair opportunity pursue had a full and fair below- Filson, contest the issue. See Fountain v. U.S. 971 response cost to ARCO’s 681, 682-83, 755-56, L.Ed. judgment I do not reach the Fuel, (1949); Connett, Cool Inc. v. 685 F.2d discovery recoupment whether on the issue is Celotex, 1982); 311-12 also Cir. see warranted. (recognizing U.S. at 106 S.Ct. at 2554 practice). See, 1 at Ex. e.g. id. 17-18, control. should Un cautiously,” International proceed must A. 39—42. (citing 10 Charles ion, Miller, Practice R. Federal Wright & Arthur (cid:127) con- ARCO’s response to (1973 439-42 Procedure, Civil of its own. propositions two theoretical tained I conclude Supp.)), & court and first, the district rejected by to'pursue opportunity fair a full afforded Court, by the ultimately in the district below-cost issue of conduct, illegal per se flowing from harm USA, in I believe Specifically, court. maxi- in vertical engage, a scheme here mo response to necessarily consti- fixing, resale mum present evidence right to tion, waived However, also injury. tutes Moreover, there is demonstrate if it needed contended a sec now receive why should reason “predatory,” prices were analogous Although apple. bite ond not be should standard appropriate has remanded this court circumstances rath- but Act section from Sherman drawn party whether to determine district based on Sher- er, very standard different might be whom against Act man section opportu a “reasonable afforded entered Woods, proof, Callahan nity” to the Su- that asserted Specifically, Cir.1984), record F.2d Elec- in Matsushita decision preme Court’s remand that a case enough this clear Corp., Radio Zenith Co. v. Industrial tric necessary. 1348, L.Ed.2d 106 S.Ct. § as1 “‘predatory’ under

(1986), defined nothing more.” pricing, Analysis Y. Motion to Defendant’s Opposition Plaintiffs USA’s [hereinafter at 8 Order a Pretrial for A. added). USA based (emphasis Opposition] Matsushita on the assertion this summary judg- partial for ARCO moved statement that: pre- Rule 16 56 and Rule to both was purpose of The order. trial debate, both good deal There is presented litigable issues “formulat[e] about what reviews in the law eases and l.case Act section Sherman plaintiff [USA’s] pricing] predatory 2[§in is relevant ‘cost’ in its 1 ease dismissing section by ... this debate resolve need not cases. We Defendant’s legally insufficient.” entirety as above, cited here, the cases unlike because 1; also see Order for a Pretrial Motion § For the Act case. this is Sherman Summary for Partial Motion Defendant’s note case, enough it is this purposes both raised 1-2. Judgment at anti- not suffered respondents that case. challenges to USA’s empirical conspired petitioners injury unless trust that, unless argument empirical mar- the relevant out of respondents drive aof the existence demonstrate could necessary (i) the level pricing below ket cоncerning fact of material genuine (ii) below pricing or products, their to sell success, summary probability cost. measure appropriate some See, e.g., De- granted. be judgment should Matsushita, at IS- Order for a Pretrial Motion fendant’s added). From USA’s (emphasis n. 8 turn, necessarily was contention, in This IS. I distill in its brief passage discussion of assertion the theoretical premised on clearly First, be points. demonstrating basic two required demonstrating below-mar 'either Act sec- lieved that Sherman pricing, predatory pricing alone level ket pricing stan- predatory 2 standards tion allegations of sustain sufficient requiring a would dards, defined which vertical maxi defendant(s) in section predatory “dangerous Second, case. price-fixing mum concomitant monopoly with the may achieve pricing branch market” “below future,” on the relied id. ability to raise very points of the test.3 These were reiter it wished rely on its below-cost argument: ated at oral prong.4 Moreover, USA’s counsel conceded that it could meet Mr. Bleeher: We need not resolve this standards -2 under section “even the most [concerning debate the relevant cost-based liberal RT standard.” at 19.5 With 10/14/86 in predatory pricing test under Sherman Aсt only a 1 predatory pricing theory- above, 2] because unlike the cases cited brief, advanced in its and with this is a ... Sherman Act Section case. In limited pricing,” “below-market words, need, you other don’t to address the we cannot take USA’s above statement as cost or what cost appropri- is the anything other express than an abandonment case, ate measure to use in a Section 1 we of an acknowledged ability to demonstrate have a different standard. And what is that standard? they were-below costs. case, For the purposes of this enough it is If remained, they doubts are resolved respondents note that have not suffered an by the absence references to below-cost petitioners unless conspired pricing from USA’s “Statement of Genuine to drive respondents out of the relevant mar- Issues.” Local Rule 7.14.2 party by pricing ket below the necessary level opposing summary judgment to submit a “ products. sell their Issues,’ ‘Statement of Genuine setting forth all material as to which it contend[s] show, Now facts all they that’s we need to there exists a genuine issue necessary to be were out to drive us out of business or to litigated.” (1986) Cent.Dist.CaI.R. 7.14.2 impair the vigor of our ability compеte-by USA contended that the necessary below the level to sell their only material facts relevant to the case were: products. And [footnote 8 of Matsushita ” 1. Whether ARCO has in engaged a ver- “or, pricing stated] or appropri- below some tical price-fixing conspiracy with ARCO- ate measure They say cost. don’t that is a branded distributors and ARCO-brand- prerequisite. ed dealers to fix artificially at low added). RT (emphasis at 20 10/14/86 levels? Just opposition its papers, USA as- as.in 2. Whether ARCO’s vertical price-fixing serted that footnote 8 of Matsushita was an has caused conspiracy USA and accurate law, statement but denied in what amount? put' 3.As USA it: conspiracy a Section 1 proba- has to have the Supreme bility recently The achieving monopoly, you established that to have damages price recover fixing conspira- equated from Section of the Sherman Act with cy, competitor need that show the con- Section 2. spiracy fixed below market level.... RT at 11. 10/14/86 ], [In Matsushita [t]he Court stated that a com- petitor suffers § in a 1 case: 4. The Court later noted the essence USA’s conspire [when the defendants to drive ... theory: plaintiffs] (i) [the out of the relevant markets you say you The Court: So that have a cause pricing necessary below the level to sell their of action conspired if the defendant if ARCO (ii) products, appropri- some below you with its dealers to drive out of a relevant ate measure of cost. by pricing necessary market below the level "predatory” § court denied under 1 as sell their products. pricing, nothing and more. (alterations Mr. Opposition Bleeher: Yes. And USA's what emphasis that’s and charge original). precisely charge what the is that —that They USA remains. stated that it fixed the advanced this the- with their deal- ory ers at a permit because "ARCO level did erroneously which us to make contend[ed] 'predatory' pricing profit § under to drive us out. same defi- 2,” 'predatory' nition as (emphasis RT id. at 8 10/14/86 point reemphasized argument: oral dissent, If 5. Court: there’s no likelihood of obtain- Reinhardt in his Dissent at see ing monopoly my ... 142 n. quota- means there’s not mischaracterizes use of this predatory prices, suppose, by only, definition. tion. I mean precisely, what USA's Mr. you're Bleeher: No. That's where Counsel stated: that USA had abandoned wrong. right you Let's start say theory there. If premised §on evidence on right to adduce waived at 1- thus Issues of Genuine Statement Plaintiffs below, no waiv- matter. argues 2. As discussed found because can be er empirical to the limited was motion B. of success. probability dangerous reasoning implies This p. 1282. See infra with contentions to these responds only required USA Rule 7.14.2 Local First, USA asserts arguments. two that were raised issues empirical list those purposes of sum- ARCO conceded judgment motion and by ARCO’s prices were set that its mary judgment However, on this contest. that wished levels,” Appellant’s 1993 see “predatory it could not conceded that view, second, 5; contends Supp.Brief at of suc- probability dangerous demonstrate “partial” nothing in its cess, listed it should inability to solely on USA’s premised Issues; yet, list- of Genuine Statement of suc- demonstrate neces- all the elements amounts what ed therefore, challenge USA’s cess, and “did level sary its below-market Appel- allegations.” price-fixing predatory pricing.6 predatory Act section of Sherman Appellee’s reading Response of the State- Thus, only plausible Brief in lant’s 1992 whatever Issues for En Rehearing Suggestion of Genuine Pet. actually have re- might 7.14.2 Rule Local Because of original). Banc at 5 that it too quired, USA believed of the basis limited to contest at it wished issues that all the list maintains, no waiver based to list Consequently, failure trial. found. can be of evidence its nonintroduction strong evi- among them is lack merit. arguments these Both of waiver. dence Sup- noted Finally, it should be sub- responding to ARCO’s Brief plemental to the district

mission summary judgment ARCO moving for Cargill, Inc. v. decision Monfort prove that only “that USA could conceded Inc., Colorado, 107 the prices of set the retail Atlantic Richfield (1986), phrased the 427 93 L.Ed.2d at levels or distributors dealers competing as “whether in the case question” “critical the prevailed have but lower than arguably be pricing activities could concerted - these lower conspiracy and vertical not below merely are Mo- Defendant’s injury.” prices caused USA Cargill Re Plaintiffs Memorandum cost.” (empha- Ex. 1 at 35 for Pretrial Order tion (emphasis 3 added). ARCO, therefore, only posited sis based on inescapable conclusion illegal maxi- per se engaged in that it had recognized although USA the above is scheme, not below- price-fixing mum resale independent avail pricing as an Moreover, ar- USA raised pricing. cost Sher pricing under theory able ARCO had “assumed gument that deci it made the tactical man Act section preda- prices at ARCO fixed prоve that could rely theory but instead sion not levels,” 1992 Appellant’s Motion tory level only its below-market advance chose to added), only (emphasis Clarification fol- a full theory. thus had predation the Su- ease from lowing of this remand views with ventilate its opportunity fair attempt to now preme Court. USA however, pricing; respect to below-cost history. case, rewrite from the issue chose remove the artificially low lev- prices at “fix[ed] Thus, that ARCO disagree discus- Reinhardt's with 6. added) light conten- (emphasis in of USA's Issues.” See of Genuine els” the "Statement sion of hearing the Statement I think that that it summary at 141 n. 3. Dissent tion at the to show at trial fairly implies that intended pric- only to demonstrate needed below market level. that ARCO’s pp. & 4. supra ing, 116-118 see allegation reading only This sensible belied USA’s own conduct. USA chal- lenged both that predatory pricing was nec- Furthermore, argument with re- essary and ARCO’s assertion that the spect section summary to its judgment obligation 2 definition was appropriate. Moreover, true, point. misses the It is as USA main- tains, above, discussed duty USA had no USA listed two issues Celotex in its specific adduce demonstrating below- Statement of Genuine Issues that facts cost summary judgment conceded for the purposes of motion, respect at least with empirical to its judgment motion, and these two issues were contentions, premised was inability on USA’s very facts it necessary believed to sustain dangerous demonstrate probability of suc- its section 1 predatory pricing theory.8 cess. Had USA adduced sufficient evidence dangerous probability of success to survive With the issue of the appropriate def issue, judgment on that we do not inition of predatory pricing dispute, believe the district granted could required, was should it wish to challenge on on a lack based of evi- appeal ARCO’s contention that the section 2 dence However, of below-cost pricing. applied, standard to pres dangerous probability of success issue was ent its contentions concerning appropri not ‍‌​​‌‌​​​​‌‌‌​​​‌​‌​‌​‌​‌‌‌‌‌​​‌‌‌‌‌​‌‌​‌‌​​​​​​​‍the issue raised “partial” ate Singleton standard. See v. Wulff, 428 summary judgment motion.7 As discussed U.S. 120-21, above, put the motion did at issue the defini- L.Ed.2d short, asserting that tion as this was the 2 predatory ap standard premise essential for ARCO’s contention that plied fulfilled USA’s “initial responsibility of USA’s failure to dangerous demonstrate informing the district court of the basis for probability of success would be fatal. Cf. motion,” Celotex, U.S. Lattаuzio, United States v. S.Ct. at (emphasis added), and thus (10th Cir.1984) (refusing to ap- consider on placed duty on USA the of “argu[ing] that peal of whether certain debtors the law was on [USA’s] side regarding the were in default when legal theories on appellees which the focused although addressing issue, a different ” legal theory. other Edmond v. premised on the notion that the debtors Counsel, Postal Serv. General were in default and F.2d nonmoving party did (D.C.Cir.1991) (Silberman, J., not specifically concurring assumption). controvert that part more reading dissenting part) limited of ARCO’s sum- mary judgment original).9 suggested motion now deciding Without USA—that it was empirical limited to the every to assert conceivable of success —is of what appropriate might standard use "partial summary judg- term summary judgment issue.”), for on that 'd on aff carry any ment” should signifi- not grounds - U.S. -, 1732, talismanic other 123 Practice, See cance. ¶ 6A supra, (1993); Moore's 56(b) Federal L.Ed.2d (per 387 Fed.R.Civ.P. cf. [3.-3], (not- 56.20[3.-0] to at 56-684 to mitting 56-699 summary judg the to move defendant for ing variety the of different situations to which thereof”). any part on .their entire claim "or applied). is that, term case, only contend in this ARCO's sum mary judgment fairly put motion definition uttering This is not to intimate magic that issue. “summary judgment" words requires the non- moving party present evidence and majority make ar- disagree 9.The in Edmond did not with gument every on conceivable Judge issue relevant to point. merely Silberman on this The court it, Judge put case. As Easterbrook when a de- specific theory they concluded that the consid- limited, summary judgment fendant’s motion appeal ered implicitly on had been raised “requires there is no rule party a to include theory. assertion of a broader See Edmond v. every summary all issues in judgment Counsel, motion 415, U.S. Postal Serv. General 949 F.2d pain surrendering point.” DeMallory (D.C.Cir.1991). on Cullen, v. 421-22 ambiguity, Such howev- 442, (7th Cir.1988) er, 855 F.2d n. 2 451 is not in this case. As discussed (Easterbrook, J., above, dissenting); see also Easterwood sharply distinguished below-cost Inc., 1548, Transp., (11th v. CSX 933 F.2d 1556 predato- from below-market theories of 1 Cir.1991) ("The may grant ry district pricing court sum- rely and made clear that it intended to mary judgment on party an issue if a exclusively upon moves later.

1284 then, unpalatable decision after an not to waiver,10 reason is no there pain of on aban judge ... resurrect by the trial it did contentions to the hold USA 861, denied, 76 issue.”), cert. doned party that a rule general It is a make.11 (1955); 10 see also 101, 764 100 L.Ed. but raises it theories revisit cannot 2716, 651-54 Miller, supra, Wright & See, e.g., summary judgment. abandons ... advance (“[On cannot parties Airlines, appeаl t]he Airlines, v. United Inc. Alaska issues in raise new Cir.1991) or legal theories new (9th 536, n. 15 Inc., 546 F.2d 948 the lower to secure reversal order appellate an (“It established is well ” (em judgment] [summary determination. court on a district not reverse will court Edmond, omitted)); added) (footnotes phasis below.”), theory raised that was basis (Silberman, J., concurring at 430-33 F.2d 949 People’s Express, Inc. nom. sub cert. denied Lyons v. dissenting part); — part and U.S. -, Inc., 113 Airlines, cf. v. United 716, Trust, F.2d 721- 994 & Bank (1992); v. Liberies 686 L.Ed.2d Jefferson Cir.1993) (10th cases (collecting waiver 22 (7th Cook, 1126 F.2d County 709 found have been noting that waivers that a Cir.1983) (“It rule is a well-settled aban and then were raised “issues when summary judgment opposing party Patrin, v. States pre-trial”); United doned reasons, judge inform the trial must Cir.1978) (“It (9th imma 712 why factual, legal or tried was not the issue terial whether so, not do If it does not be entered. should it was not raised because court district motion, raise such it cannot and loses by the but conceded was raised Morrison (quoted in appeal.” reasons appeal”). it on seeking to party revive Cir.1986) (Kozin- (9th Car, F.2d added)); pric- Here, that below-cost ski, J., dissenting) contended theory Pulito, F.2d 2 ing an available Vaughner v. Cir.1986) (“If rely upon Hav- assert it. (5th party fails to chose not but only its below-market pursue should why ing chosen to legal reason claim theory, now ground is waived and USA cannot granted, not be pricing, lacked respect to below-cost appeal.”); or raised with be considered to “ventilate opportunity fair and full Corp. v. Continen B. Marks Music Edward Cir.) (2d Y. Stores Waterbury v. T.G. & Co., issue[].”12 F.2d tal Record Cir.1987) (inter- F.2d (“[A] to a motion opposition plaintiff his omitted).13 quotations nal summary abandon judgment cannot ulti- the district court true whether have been note 14. 10. See infra aof below-cost mately on a below-market settled implies Reinhardt his origi- 11. In (emphasis in dissent. Dissent at 143 standard." duty under ... my that "USA statement nal). response to ARCO's demonstrating specific to adduce Celotex facts. to advanced my pricing” somehow contradicts below-cost challenge if it wished proof on be- that "failure conclusion earlier ap- predatory pricing on ARCO's definition provide a basis for alone low-cost any process, USAwaived peal. In the n. 2 affirming court.” Dissent district Thus, discovery theory. otherwise origi- pp. (emphasis in (quoting supra to had the district might been entitled However, district nal)). I do "affirm summary judgment is irrelevant. denied judgment precisely be- grant of court's [of evidence USA failed to such cause posed question the be stressed that 13.It must (em- pricing].” at 141 n. Dissent below-cost рhasis fundamentally from the different here is Rather, that, added). merely conclude (9th Holloway, 975 F.2d 1388 posed Elder v. present evidence to if USA was not even -, Cir.1991), granted, - U.S. cert. response sum- pricing ARCO's to of below-cost 92-8579), (No. (1993) L.Ed.2d 721 right the to mary judgment it waived plaintiff's that the which held showing. such make qualified im summary judgment in a burden at identifying the munity "includes universe then, case point, is Rein- Quite beside the which statutory law from or decisional relevant district court "[i]f contention hardt's right violat determine whether court can dangerous probabili- ultimately that a concluded established,” This clearly id. at 1393. ed was parties necessary, both ty un [of success] was "waiving” right party not involve case does fur- have to conduct understood authority appellate legal an to to cite relevant discovery pricing This would on the issue. ther C. volving pricing. below-cost As discussed above, USA contended at judgment remaining question The is whether the as- that either pricing below-market or below- change wrought by serted in law Brook pricing cost alone could “predato- constitute Group should excuse USA’s abandonment of ry” conduct in the context of a vertical con- right to demonstrate below-cost spiracy to engage in maximum resale It should not. maintenance. Demonstrating below-cost To grant ask whether USA should be pricing alone is a less onerous than fortiori discovery ed on . below-cost is essen meeting the Brook Group requirements tially to ask if USA’s right “waiver” of its to showing below-cost with a reasonable demonstrate below-cost should be ex prospect Thus, of recoupment. "with respect changed cused because circumstances. pricing, below-cost Brook.Group did not general rule in such cases is that a make available a “new” theory, only but add- waiver will excused “a new issue arises requirement ed a previously available appeal pending while change because theory that USA chosen to in the law.” Dep’t State Cal. Educ. v. course, forgo. Of adopting the Brook Group Bennett, (9th Cir.1988) 843 F.2d standard would equally have an important second effect: to make clear that above cost if, contends, Even as USA the “avail level pricing even when cou- ability” particular pled combination of ele with a showing structural such as re- ments announced Group Brook coupment, insuf constitute pric- ficiently clear at the time of the ing.14 manner, Viewed Group Brook theory render the еntire did not so much as make a theory new “available,” this should not excuse USA’s ear negate available as the sole upon lier abandonment of showing the lesser in- which previously USA had relied. matter, waiving right or for that pursue adequately, difficulty there is no con- challenge applied by law cluding court below. opportunity grant- such has been ‘ contrary, analysis To the proceeds on the ed. assumption precisely law is what the complaining party question, contends. The rath appears rely Group the Brook er, discovery is whether more is warranted. As Court’s statement that: Judge Kozinski wrote in dissent this court's plaintiff seeking [A] competitive establish decision not to hear Elder en banc: injury resulting prices from a lower rival’s Every every issue in case prove on both prices turns fact must complained that the of are law; outside a facts appropriate framework are below an measure of its rival's costs_ as legal principles. irrelevant abstract example, Although Cargill and Matsushita re- say, When we plaintiff question served as a formal matter the whether trial, prove must certain facts at recovery we mean he should ever be ... available when the must first estаblish what the law is and then is above some measure of proof applicable legal conform his stan- reasoning incremental costs ... opinions in both plaintiff law, dard. If the misunderstands the suggests may prove up he wrong well set of facts. suffice, rejected should and we have elsewhere get right failure to the law in such a case the notion that above-cost that are below fatal, may fact, then be law general because but market levels or the costs aof firm’s supplément a party can't competitors the record competition cogni- inflict appeal once it discovers that it missed the zable laws. See Atlantic legal target in the district court. Co. v. USA Petroleum Richfield Holloway, 328, 340, Elder Cir. 109 L.Ed.2d 1993) (Kozinski, J., dissenting from the order rejecting suggestion banc). rehearing at-, Group,-U.S. en Brook S.Ct. at course, (second Of still enquired added) (citations must be if a emphasis “full and footnotes opportunity” omitted). and fair provided Thus, to adduce reading Group of Brook facts, the relevant inquiry, and this appears in cases of to be even if the Court's omission, require may well opinion to courts determine formally in Atlantic declined to Richfield precise the party to extent which a waives аvail- predatory pricing revisit the definition of in footnote stated legal arguments failing Matsushita, able to advance them Group 8 the Brook summary judgment. at But not this case. Court took the Atlantic Court's reason- Richfield a party When ing asserts to exclude mere below-market level specific theory legal is available but fails to predatory pricing. from the ambit of 1286 Therefore, the granted. be request not will not differ does situation this Conceptually, court is AFFIRMED. of the district party decision in which the case from

significantly established) (and clearly different alleges two only one pursue theories, to chooses ALARCÓN, Judge, specially Circuit then, first the when summary judgment, concurring: merits, the to revisit seeks theory fails court. judgment of the in the I concur cases, the reason theory. In both discarded properly not an issue discuss Rather than to theory is irrelevant failed .why the first man- carry I out would this before a full and party had complaining whether the Supreme Court of the United States date support the abandoned to opportunity fair affirming the district order a brief enter theo to the discarded respect theory. With preda- not discuss would court’s order. described can be then, the two situations ry, now resur- has bеen tory pricing issue that to Accordingly, functionally equivalent. Company, under by USA Petroleum rected of re purpose discovery for grant clarification,” be- of a “motion guise recognized was avail it theory that visiting a clearly in- Supreme Court cause the pursue would not expressly chose but able anti- to demonstrate failed structed second precisely the countenance appear to preserved only issue standing on the trust per ordinarily is not apple that bite appeal. Serv., See, Image Technical e.g., mitted. Co., 903 F.2d Kodak v. Eastman Inc. Cir.1990) (9th failure to (finding 1 I. theory illegality “rule of reason” raise a summary judg- granted The district to have response to Com- Richfield Atlantic favor — -, 112 S.Ct. it), aff'd, waived (ARCO). Petrole- It held pany (1992); Lone Star L.Ed.2d (USA) to dam- not entitled Company um Am., Workers Mine v. United Co. Steel the Sher- violation of Section ages for a Cir.1989) (“Ordi (10th 1239, 1243 851 F.2d failed Act, § because it man U.S.C. theory of may lose one narily, party injury.” “antitrust to demonstrate appeal on ease, prevail on and then Lane, v. theory.”); Cooper also see different court reversed this October On Cir.1992) (“We (7th 368, 371 and re- district court “the decision arguments that were long refused consider proceedings further the casе for mand[ed] in re to the district court presented Petrole- opinion.” this with consistent motions.”); sponse to Co., F.2d Atlantic um Co. v. Richfield Reetz, 888 Ass’n & Loan Fed. Savs. Savers Cir.1988). majority’s man- (9th Cir.1989) cases); (citing 1497, 1501 F.2d proceed the district court date directed pp. 122-124. supra cited sources anti- demonstrated USA had trial because damages entitling to recover injury, it trust Conclusion VI. per- standard requisite it could meet was com- judgment, At Id. suasion at trial. ARCO’s contention respond to pelled to re Supreme Court May On a vertical context of Rich Atlantic this decision. versed be should pricing scheme resale maximum Petroleum Co. v. USA field 2 stan- Act judged the Sherman (1990). The L.Ed.2d asserting that both respond, did dard. USA ap holding words is stated pricing theories and below-market ambiguity: from free pear it announcing but applicable, were competitor, argues as a Respondent Now, in the latter. solely upon rely a vertical from can show that its suggesting decision of a new wake prices that is fix maximum erroneous, conspiracy seeks initial choice Act, Sherman unlawful discard- previously revisit set above if the oppor- even full fair USA had ed. Because addition, respondent maintains however, levels. theory, tunity preserve that flowing per loss from a se viola- ARCO-branded distributors tion 1 automatically satisfies the anti- ARCO-branded prices dealers to fix injury requirement. trust reject We artificially both low levels? respondent contentions hold that 2. Whether ‍‌​​‌‌​​​​‌‌‌​​​‌​‌​‌​‌​‌‌‌‌‌​​‌‌‌‌‌​‌‌​‌‌​​​​​​​‍ARCO’s price vertical fixing failed to meet the antitrust injury test in conspiracy has injury caused USA this case. We judg- therefore reverse the and in what amount?” ment of the Appeals. Court of USA did not 'contend pric- 335, Id. at 110 S.Ct. at 1889. ing genuine was a issue of fact in dispute. USA relied instead on its that anti- Notwithstanding the clear direction of the trust can solely Supreme by proof shown this court to enter an an conspiracy unlawful to fix below order upholding market the district court’s dismissal retail gasoline prices. Thus, any factual of this is- action because USA failed demon- sue concerning predatory pricing was aban- strate injury, USA filed a document doned prior to the hearing 13, on 1991, on styled November aas “Motion ARCO’s motion partial for a summary judg- for Clarification On Supreme Remand From ment on the Section 1 claim. Court,” in which requested that this court “reverse the district grant of sum- A hearing on ARCO’s motion for a sum- mary judgment.” (emphasis added). mary judgment on the 1' Section claim was conducted on 14, October 1986. During his Clarification, In its Motion for USA asked argument in opposition “clarify” court to counsel conceded that prove could not mandate that we- affirm the district court’s predatory pricing on the remaining Section 1 grant of judgment in this action claim “even the most liberal standard.” because USA failed to demonstrate antitrust accurately described essence of the injury. USA seeks a review this court of 14, October 1986 proceedings in its opening issue it abandoned in the dis- brief before this court July dated 1987. trict acknowledging after it had not The district granted ARCO’s motion presented any evidence to demonstrate that (CR on February 100, 103). prices predatory. were The court held"that ARCO’s vertical con spiracy to fix prices pro- II. competitive and therefore pro could not alleged complaint its amended duce the kind of injury that the antitrust “ARCO and its co-conspirators imple- laws were intended to prevent. The court mented severe predatory price cuts” ruled USA was prove violation of Section 1 of conspiracy the Sherman Act. between ARCO and its dealers years After almost “predatory” prices three fixed exhaustive dis- and that ARCO covery, ARCO partial filed motion for of successfully monopolizing оn March in order to satisfy market requested ARCO requirements dismissal of USA’s Section Corp. Bowl-O-Mat, 1 and Section 2 ground claims on Brunswick Pueblo Inc., satisfy USA could injury” “antitrust L.Ed.2d requirement Plaintiff, already having Section 4 of Clayton Act aban its claims, doned Section because USA Sherman Act had failed to show that proof predatory. were April On offered dangerous probability monopolization. USA entered stipulation into a for an order The Court entered dismissing July Section claim. On 54(b). (CR 100, 103). Fed.R.Civ.P. after the dismissal of its Section appeals judgment, from claim, filed document entitled “State- ment of Genuine Issues.” stated the

only issues in dispute were facts, Based the-uncontroverted the dis-

“1. engaged Whether ARCO has ain ver- trict court concluded that USA had failed to

tical fixing conspiracy with showing make price maintenance resale a maximum of dismissing the Sec- its In order predatory. decide we must Specifically, agreement. its summarized claim, court district tion 1 resulting injuries competitor’s a whether follows: as legal conclusion maximum non-predatory, from vertical can estab- plaintiff assuming that Even category of “an- fixing fall within price low to maintain conspiracy a vertical lish injury.” titrust satisfy the “an- plaintiff prices, added). Clayton Act (emphasis of requirement injury” F.2d at 689. titrust to bе showing such 4,§ without majority’s characterization The predatory. “nonpredatory” by as ARCO prices fixed candid and USA’s unmistakably by the record supported demonstrates record The preda- proof it “offered predatory its admission abandoned Brief Opening Appellant’s USA tory pricing.” court. the district claim before of the Section reversing the dismissal predatory 6. In no evidence offered “the majority claim, concluded before opening in brief its conceded laws the antitrust policies of predatory purposes not demonstrated that it had court recognizing the oppo- in effectuated are best evidence in its submission the anti- to enforce competitors for a sum- ‘standing’ motion partial ARCO’s sition conspiracies.” price-fixing against to the represented trust laws mary judgment. USA only genuine issues F.2d at 697. that the court district to be decided dispute in fact material char- rehearing, for a ARCO petition In its had judgment were whether by USA’s question presented acterized prices below to fix conspiracy ain engaged majority dissent- follows: “The appeal as so, and, USA was level; whether market presents appeal agree [this] ing opinions by this conduct. injured inju- compеtitor’s issue, ‘whether single non-predatory, resulting from vertical ries III. category fixing fall within the price maximum ’ ” USA, opposi- injury.” of “antitrust opening brief be- of its page first On the rehearing, did petition for to the tion heading “State- fore this conclusion argue as represented Of The Issue” to this only one presented follows: erroneous. Petroleum issue whether sole “The petition response to the of its profits footnote and reduced Company’s lost sales that, “ARCO’s states rehearing, USA for a unlawful resale per se from the defendant’s anticompetitive ef- artificial, suggestion to fix conspiracy price maintenance price-fixing vertical prices consti- fect of maximum gasoline retail wrong. The price is predatory setting of injury.” tutes antitrust consistently condemned brief, Supreme Court has summa- opening of its page 5 On artificially distorts fixing because partial price all issue raised rized the argument This process.” regarding competitive unyielding adherence USA’s demonstrates as follows: 1 claim the Section it was not notion that mistaken the unlawful given the Even existence fixing demon- to show on retail effect conceded and its conspiracy injury. strate antitrust contended that prices, ARCO gаsoline anti- USA, suffer competitor, could not price-fixing IV. this vertical injury from

trust scheme. granted certiorari Supreme The the issue correctly appeal identified majority sole issue raised resolve the follows: framed presented Brennan Justice to this court. case “This as follows: the Court issue before is whether appeal incurs a firm question whether presents the pricing a proof of absence meaning the anti- ‘injury’ within damages because can recover competitor it competitor trust laws when loses sales to a illegal shows an maximum-price-fixing con- charging non-predatory prices pursuant to spiracy.

vertical, maximum-price-fudng scheme.” 495 Having determined majority U.S. at at S.Ct. ruling erred in that USA had demonstrated injury, antitrust the Court reversed the judg- ment of this court and pro- remanded “for

The Court summarized the district court’s ceedings consistent with this opinion.” reasoning as follows: Id. In light of USA’s concession in opening The District Court granted summary judg- brief before this court that it pre- had not § ment for ARCO on the claim. The any sented evidence of predatory pricing, I “[ejven court stated that assuming that believe that this compelled court by [respondent can USA] establish a vertical Supreme Cоurt’s mandate to enter an order conspiracy to prices, low [respon- maintain stating simply: “In conformance with the satisfy dent] injury’ the ‘antitrust mandate Supreme of the Court in this mat- requirement Clayton § Act without ter, 328,110 1884,109 S.Ct. L.Ed.2d showing such predatory.” be (1990), judgment of the district court App. to Pet. for Cert. 3b. The court then is affirmed.” respondent concluded that could make no showing such because, y.

given petitioner’s market share and the entry market, ease of into petitioner Supreme The Court announced its decision was in position no to exercise pow- market in this May 14, matter on 1990. On Novem- er. 13,1991, ber prior any proceedings in this matter mandate, consistent with the Court’s Id. 495 U.S. at 110 S.Ct. at 1888. USA filed its “Motion for Clarification on Supreme The Court reversed this court’s Remand from the Supreme Court.” Since no judgment. Id. at 110 S.Ct. at 1889. yet action had been carry taken to out the rejected The court argument that: Supreme Court’s by mandate this inappropriate [I]t is require a showing simply there was no order judgment from of predatory pricing injury before antitrust clarification. ‍‌​​‌‌​​​​‌‌‌​​​‌​‌​‌​‌​‌‌‌‌‌​​‌‌‌‌‌​‌‌​‌‌​​​​​​​‍No can be established when the asserted anti- rule was cited authorizing a “clarifi- trust violation agreement is an in restraint cation” this court import of the of the illegal trade § 1 under of the Sherman Supreme Court’s mandate. This court is in

Act, rather than an attempt monopolize position “clarify” a decision of the prohibited by § 2. Supreme request Court. USA’s for a clarifi- cation of the remand order should have been Id. at 110 S.Ct. at Court; Supreme directed to the The Court held “[although a vertical maximum-price-fixing agreement is unlawful VI. Act, 1 of the Sherman it does The Court has instructed cause a competitor unless once a summary motion for a judgment has in predatory pricing.” 339,110 results Id. at filed, plaintiff been must evi concluding para- support dence to allegations the factual graph as “Respondent reads follows: Wildlife, complaint. Lujan failed to demonstrate has suffered Defenders of U.S. -, 112 S.Ct. injury. allegations per se - L.Ed.2d 351 The Court set forth this violation does not satisfy obviate the need to principle following passage: 346,110 this test.” Id. at 1895. The principle announced the Court in this pleading ease At the stage, general factual alle- Where, here, free from doubt. gations a com- resulting from the defen- petitor present any fails to preda- evidence suffice, dant’s conduct may for on a motion tory pricing, the district court must “presum[e] dismiss a general dismiss we alle- Sеction claim though even gations the evidence specific embrace those facts that. value claim,” Much [Lu support necessary to are ap- it is for which in the cases Federation, procedure su jan National v.] Wildlife par- dissipated ... would propriate [871], pra, theory in an rely on one ty (1990) were free ]. L.Ed.2d [3177], [111 a motion for defeat attempt mo to a response then, should judgment and longer however, can no plaintiff tion, unsound, long thereafter come back prove must allegations,” but “mere on such rest theo- of other the basis some fight on evidence or other by affidavit forth” “set ry. 56(e) facts,” Civ.Proc. Fed.Rule “specific summary judg v. Continental Freeman (quoting purposes Id. for which Cir.1967)). 459, And 469-70 true. taken be 381 F.2d will be to Gin ment motion (if contro stage, those facts at the final fight matter, fought good In this verted) adequately “supported must be ruling proof for a before this court trial,” at Gladstone adduced evidence prices was suffi- to fix maximum conspiracy ], supra, Village Bellwood injury [Realtors without antitrust to cient demonstrate of [1601], 31, [91], 115, n. at predatory. prices were proof (1979)]. L.Ed.2d 66 [60 argument. rejected Supreme Court battle, to now seeks Having lost that it failed to acknowledged that has Id. USA сhallenge court district to the return of evidence district present in the judg- partial for boilerplate law It is pricing. predatory aban- theory on a factual grant- order a district court’s must review we doned. indepen- denying ing or to the district dently, without deference permit litigant a I would not possi- if it rulings. Even legal clarification, court’s pursue motion for guise of a opening in its statement ignore USA’s complaint ble that it delib- in its theory asserted this court issue the sole before abandoned, the suffi- brief in order test erately to fix conspiracy unlawful theory. whether ARCO’s aon discrete ciency of its evidence to show is sufficient prices with meritori- too burdened courts are Our still be predation, proof of we to abuse permit without skillful counsel claims to ous whether offering up for ourselves succes- required right appeal determine their raised presented finally one that will they evidence find claims until sive on the this court. judges material fact least two genuine persuade this mandate of contrary In to the pricing. performing predatory This tactic case, the trial violates ignore in this task, Supreme we would be Court piecemeal review against prohibition and search pronouncements circuit’s summary judgment based for a predatory of motions record evidence in a presented have been in that could simple theories that task would Performance I not discuss review. would request for prior admission of USA’s this case because pricing claim. predatory abandoned USA’s it offered before this court opening brief affirming the Instead, an order enter I would response to proof predatory pursuant court district for a partial motion to demon- that USA failed ruling Section claim. to dismiss the injury. strate antitrust VII. concurring REINHARDT, Judge, Circuit circuit, party can- the law of this Under dissenting: and, this court before one not assert Judge Nelson’s only en- Part III of an again and assert I concur losing, return upon juris- we have concludes that Nguyen opinion, v. United which theory. In tirely different district (9th Cir.1986), whether re- to determine States, we diction predatory the correct reversing applied following principle lied on the However, I do not be- theory that was standard.1 upon a new granted order pres- right to abandoned lieve prior our mandate: inconsistent with contrary conclusion. opinion, reaches which Accordingly, Alarcon's I dissent from ent evidence of below-cost pricing, dissent 109 L.Ed.2d 333 As we hаd, opinion. from the rest of her considered the first ground. It held competitor that a could not show vertical, from a maxi- I. mum price-fixing conspiracy unless the con- outset, At the important it is to understand spiracy resulted in pricing. See exactly what issue we id. have been asked to 495 U.S. at 110 S.Ct. at 1891-92. However, here, Court, decide point. understandably, and how we got to this did not resolve the second issue—whether a danger- ARCO moved judg- ous of successful monopolization ment on claim of a Sherman Act sec- is an element pricing under tion one violation. ARCO claimed that a section one. id. 495 See U.S. at 332 n. competitor standing had no challenge 340-41 n. 1888 n. 1892-93 conspiracy to set maximum unless n. 10. those predatory, were and that USA Thus, the issue that we did not reach the had failed to prices show that ARCO’s first time us, the case was before and that predatory because it had failed to a show Supreme either, Court did not reach dangerous probability of monopoli- successful again. before us Now is the appropriate zation. its motion pre- Under ARCO could time for us to decide it. It purely legal in vail dangerous if a probability of suc- nature: plaintiff a whether alleging predato- monopolization cessful is аn element of a ry pricing in violation of section one of the section one violation. USA conceded it Sherman Act must show that dangerous could not dangerous show a probability of probability of monopolization successful ex- monopolization. successful It opposed the ists. summary judgment purely motion on two Judge concludes, however, Nelson legal grounds. First, argued USA that a question was somehow mooted when the ease competitor standing challenge per se inwas the district court years over seven illegal scheme, priee-fbáng regardless of ago. She contends contesting while whether predatory the scheme pric- involves * ARCO’s judgment motion on the ing. Second, argued USA that even if a dangerous issue, probability USA waived its competitor predatory must show pricing, a right present evidence regarding an en- dangerous probability of monopoli- successful tirely different predatory element of pric- zation is not an element showing of such a ing ARCO’s were set below —whether under section one of the Sherman Act. The Judge cost. Nelson would affirm the district rejected district court arguments these grant of summary judgment on the granted summary judgment. purported basis of that waiver. Yet whether ARCO’s were set below was sim- cost We reversed on the ground. first See ply not at the time of ARCO’s sum- USA Co., Petroleum Co. v. Atlantic Richfield mary judgment issue, motion. That like a (9th Cir.1988). 859 F.2d 687 We concluded others, number of was reserved for later that competitors standing had “to enforce the determination, in the event that ARCO failed against laws price-fixing conspira- in summary judgment Judge motion. cies,” regardless of conspiracies whether suggest Nelson does had involved pricing. Id. at 697. Ac- obligation present respect evidence with cordingly, we did not reach ques- the second policies ARCO’s pricing response to that tion —whether under sec- Indeed, motion. explicitly she states that tion one requires showing danger of a obligation.2 Rather, USA had no such she monopolization. re- entirely passing relies a few on comments versed our decision. See Atlantic opposing USA’s brief Richfield Co. USA Petroleum argument and in its oral on the motion as her true, maintains, 2. She states that: "It is precisely because USA failed duty that USA had no under Celotex to adduce Opinion Judge such evidence. See specific demonstrating (“Because pricing.” below-cost that it Nelson contends facts Opinion Judge Nelson 121. Yet pricing recoupment, must show below-cost Nelson grant would affirm the proof district court's failure of pricing on below-cost alone or below-cost low-market finding that waived basis fairness, discovery on complete yet granted In all ease. been to its that is essential cannot be simply desired policies, and ARCO comments unrelated into a and transformed of context taken out further discov litigation without to end conduct rely on right to of its waiver end, its sum tailored ery. To that cost.3 setting prices below only a narrow judgment motion so mary erroneously, have been evidentiary would argues, issues Judge Nelson class evidentiary that both disposition “assert[ed] to its relevant —those applica theories were or non-exis to the existence relating issues solely rely ble, announe[ed] would but monopoly. dangerous tence Judge Nelson Opinion of the latter.” ultimately concluded If district court Instead, nothing the kind. did 128.4 USA necessary, un probability was opposition to portion of understood parties both Nelson, by Judge judgment quoted discovery further to conduct Supreme Court merely explained that true been This would have issue. v. Zenith Co. Electric Industrial Matsushita ultimately settled the district whether Corp., 475 U.S. Radio standard. or a below-cost on a below-market (1986), had L.Ed.2d 538 1355 n. circumstances, say one these Under probability of suc “dangerous not set forth opportunity fair a full and that USA “had element cess” as an relating whether the issues” ventilate of wheth Any one. discussion under section Fuel, prices cost. Cool below ARCO set below-market, below-cost, theories or both er (9th 309, Connett, Cir. F.2d Inc. v. to the quite tangential available was 1982). by ARCO’s motion —whether issue raised probabili prove dangerous a to USA needed ty of success. II. specifically abstained ARCO’s on the ease not resolve this Because do ability to into calling from by Judges upon grounds relied procedural relationships, price-cost particular prove Alarcón, ques- I must reach Nelson and did not opposition to USA’s reply danger- a they decide —whether tion do not to show be whether USA even discuss only to hearing needed affirming the district provide a basis for Opinion pricing.” of court.”). "merely conclude demonstrate below-market claims to She passing Yet USA's Judge evidence at 119 n. 6. if Nelson was not even USA create response hearing suffice to to ARCO'ssum- comments at the of below-cost mary judgment ambiguous right waiver, intentionally it waived use Judge Opinion obviously Nel- showing.” “artificially make such low levels"—which term is inconsistent 123 n. 11. Yet claim below-cost son at below-market and includes both page waiver, her quoted 113 of with the sentence from as a either. be taken —cannot addition, as I opinion. demonstrate right waive and at note did not text counsel "USA's Judge also states that 4. Nelson pricing. showing of below-cost make a predatoiy not meet it could conceded that by the 2 'even under section standards of USA's "Statement Judge treatment " Nelson's Judge Opinion Nel- most liberal standard.’ trans- a similar Issues” seeks work of Genuine admis- not an concession was at 118. USA's son ambiguous, comments unrelated formation pricing. prove below-cost sion that could right present evidence of a waiver of the into acknowledgment that USA merely an It was “Statement,” quoted In its probability suc- dangerous could not show opinion, USA page Nelson's 118-119 that it could monopolization, and thus cessful show issues," corresponding "genuine two one listed section two. under (1) standing: theories of antitrust to each of its counsel stated: USA's prices at "artifi- led scheme whether ARCO's dangerous probability of is I believe there levels”; (2) per se cially and whether low that this monopolization idea and therefore the illegal price-fixing caused scheme vertical most predatory, even USA's injuiy. Judge seeks transform Nelson —even standard, going And probably to fail. "artificially liberal allegation ARCO set reason, analyses, that for those it’s for that USA would into an admission low levels” cases, looking at the looking these all even pricing. She states only rely pur- monopoly the market reading need define that "this is the sensible drop agreed to Section poses, we light contention at the allegation USA's ... probability (1993). monopolization ous of successful L.Ed.2d 168 Where such effects oc necessary is a predatory pricing element of a cur contract, as the result combination, violation under section one of the Sherman or. conspiracy, a section one violation exists Act. I would hold that the district court “even in the incipient absence of monopoly.” concluding erred in dangerous proba- that a Copperweld, 467 U.S. at 104 S.Ct. at bility requirement of success exists under 2741; see Western Concrete Structures Co. v. section one. Co., (9th Mitsui & F.2d 1017-18 Cir.), analysis

The district cert. denied court’s confuses those (1985).5 apply standards which under section of L.Ed.2d 229 act apply with those which under one. section Given the aims scope of section one of plaintiff When a prove seeks to that a com Act, the Sherman I would plain- hold that a petitor engaged in tiff can make out a pricing claim two, violation of plaintiff must that section showing without show that the defendant’s conduct carries there is dangerous probability of successful with it of successful monopolization. Accordingly, I would re- monopolization. Inglis See William & Sons verse the district grant Baking Baking Co. ITT Continental judgment and remand for proceed- further Cir.1981), cert. de ings. nied, 459 U.S. 74 L.Ed.2d (1982). plaintiff will face this hurdle two, because section which reaches unilater conduct, only

al monopolization forbids

attempted monopolization. See Copperweld ‍‌​​‌‌​​​​‌‌‌​​​‌​‌​‌​‌​‌‌‌‌‌​​‌‌‌‌‌​‌‌​‌‌​​​​​​​‍Corp. v. Independence Corp., Tube

752, 767, 104 81 L.Ed.2d 628 one, contrast, Section reaches a broader In re GRAND JURY PROCEEDINGS. range competitive evils, long they so CHESNOFF, David Z. Witness-Appellant, conspiracy. result from a 768-69, See id. at 2740-41. Even where a predato- ry pricing does not danger- scheme create a America, Appellee. UNITED STATES of ous risk of monopolization, it can still have anticompetitive substantial effects elimi- No. 93-17012. nating significant participation. market One United Appeals, States Court of need not drive out all or competi- even most Ninth Circuit. tors in gain order to realize a from below- cost might Such scheme drive out Submitted Dec. 1993.* enough competitors to create a concentrated Memorandum Dec. 1993. or, structure, market already-concen- market, trated simply [competitors] “cause Opinion Order Jan. raise their supracompetitive levels disciplined within a oligopoly.” Group Brook — v. Brown & Corp., Williamson Tobacco -, -,

U.S. (“[W]e In its recent decision in Group interpret § Brook Su 2 of the Act to con- Sherman preme recognized Court stringent predatoiy that more poses demn danger- when it ‘a apply standards probability un monopolization,’ claims ous of actual where- der section two than to claims under other requires only as the Robinson-Patman Act laws. The explicitly possibility’ distin there abe 'reasonable of substantial guished violations, competition between section protections two which before its are require success, (citations omitted). triggered.”) * laws, violations other panel which re unanimously agrees that this case is quire only prospect recoupment. appropriate reasonable argu- for submission without oral — at -, Group, See Brook pursuant 34(a) Fed.R.App.P. S.Ct. at and Ninth - 2588; -, see also id. U.S. at Cir.R. 34-4.

Case Details

Case Name: USA Petroleum Company v. Atlantic Richfield Company

Court Name: Court of Appeals for the Ninth Circuit

Date Published: Jan 6, 1994

Citation: 13 F.3d 1276

Docket Number: 87-5681

Court Abbreviation: 9th Cir.