United States Court of Appeals,
Fifth Circuit.
No. 94-30275.
UNITED INDUSTRIES, INC., Plaintiff-Appellant,
v.
EIMCO PROCESS EQUIPMENT COMPANY, A Division of Envirotech
Corporation, et al., Defendants-Appellees.
Aug. 23, 1995.
Appeal from the United States District Court for the Middle
District of Louisiana.
Before WISDOM, DUHÉ and BENAVIDES, Circuit Judges.
DUHÉ, Circuit Judge:
United Industries, Inc. (United) appeals the district court's
grant of partial summary judgment in favor of Defendants. The
court's ruling, certified under Federal Rule of Civil Procedure
54(b), dismissed United's federal antitrust claims and Louisiana
unfair trade practices claims. United also appeals three earlier
rulings of the district court. Because two of those rulings are
not referenced by the court's certification, we lack appellate
jurisdiction to review them. Otherwise, we affirm.
BACKGROUND
This case concerns equipment purchased by municipalities for
use in secondary wastewater treatment systems. Typically, a
municipality hires a consulting engineer to design the system. The
engineer first chooses a particular treatment process. One such
process is the vertical ditch process, which employs aerating and
clarifying equipment. Aerators circulate oxygen through the
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wastewater and clarifiers clarify the wastewater. The vertical
turbine aerator is one of three types of aerators. In the United
States, Defendant Eimco Process Equipment Company (Eimco) markets
the Hubert vertical turbine aerator, and United markets the Simcar
vertical turbine aerator.1
United's Complaint addresses the sale of vertical turbine
aerators for use in Eimco's trademarked Carrousel vertical ditch
systems. After selecting the vertical ditch process, the engineer
chooses between Eimco's Carrousel system and other vertical ditch
systems. If the engineer chooses the Carrousel system, Eimco
collects a licensing fee for the use of its non-patented
technology. In turn, Eimco provides the engineer with
specifications for constructing the system and warrants that the
water in the vertical ditch will circulate at a minimum rate of one
foot per second. Eimco collects its licensing fee regardless of
whether the municipality uses Eimco's equipment.
Eimco's specifications require use of the "Hubert aerator or
equal." If a contractor bidding to construct the system offers an
aerator other than the Hubert, DHV reviews the aerator to determine
whether it may be used in the system. According to United,
requiring DHV's review delays the start of construction and places
the burden of any resulting aerator changes on the contractor. As
1
There are four other defendants in this case. Defendant
D.H.V. Raadgevend Ingenieursbureau B.V. (DHV) is a Dutch
engineering firm which reviews aerators for Eimco. Defendant
Simon-Hartley, Inc. is a British company that produces the
Simcar. Defendant Ashbrook-Simon-Hartley also markets the Simcar
in the United States. Finally, Defendant William D. Graue is an
independent sales representative who works on behalf of Eimco.
2
a result, United contends, the DHV review requirement dissuades
contractors from offering aerators other than the Hubert.
United has quoted the Simcar aerator to contractors for use on
vertical ditch systems other than Carrousel systems. For business
reasons, however, United refuses to quote the Simcar for use in
Carrousel systems because of Eimco's specifications and licensing
fee. In particular, United does not wish its equipment to be
reviewed by its competitor. Consequently, United attempts to
persuade engineers to keep their systems' specifications open.
In its Third Amended Complaint, United asserted antitrust
claims under Sections One and Two of the Sherman Act, 15 U.S.C. §§
1-11 (1988) (Claims One through Four and Six), unfair trade
practices claims under the Louisiana Unfair Trade Practices Act
(LUTPA), La.Rev.Stat.Ann. §§ 51:1401-:1419 (West 1987 and
Supp.1995) (Claim Seven), a claim for violation of a prior consent
judgment (Claim Five), and a claim for tortious interference with
contract (Claim Eight). At this point in the litigation, the court
had already dismissed United's Racketeer Influenced and Corrupt
Organizations (RICO) claims, 18 U.S.C. §§ 1961-1968 (1988).
In one ruling, the district court granted partial summary
judgment to Eimco on the consent judgment claim because United
failed to indicate how Eimco violated the consent judgment. Then,
in a separate ruling, the court granted partial summary judgment to
Defendants on the antitrust and LUTPA claims. On the antitrust
claims, the court determined that United lacked standing to assert
them and, alternatively, that Eimco lacked market power to cause
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antitrust injury. The court granted summary judgment on the LUTPA
claims because of its ruling on the antitrust claims. It refrained
from entering final judgment because it retained the tortious
interference with contract claim. Nevertheless, the court
certified for appeal under Rule 54(b) its dismissal of Claims One
through Seven in the Third Amended Complaint. United appeals the
two partial summary judgment orders, the dismissal of its RICO
claims, and the denial of a motion to compel discovery.2
DISCUSSION
We review a district court's grant of summary judgment de
novo. Weyant v. Acceptance Ins. Co., 917 F.2d 209, 212 (5th
Cir.1990). We consider all the facts contained in the summary
judgment record and the inferences to be drawn therefrom in the
light most favorable to the non-moving party. Id.
I.
Initially, we consider whether we have appellate jurisdiction
over those rulings not referenced by the district court's
certification, which referred only to its dismissal of Claims One
through Seven in the Third Amended Complaint. The court's
certification did not reference the court's dismissal of the RICO
claims nor its denial of the motion to compel.
We lack appellate jurisdiction over the two rulings not
referenced by court's certification. In an interlocutory appeal
certified by the district court under 28 U.S.C. § 1292(b) and Rule
2
The court denied United's motion to compel discovery of
three DHV computer programs.
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54(b), we have no jurisdiction to consider orders of the district
court outside the scope of certification. United States v.
Stanley, 483 U.S. 669, 677, 107 S.Ct. 3054, 3060, 97 L.Ed.2d 550
(1987); see also Swint v. Chambers County Comm'n, --- U.S. ----,
----, 115 S.Ct. 1203, 1211, 131 L.Ed.2d 60 (1995) (reaffirming
Stanley ). Accordingly, we dismiss for lack of appellate
jurisdiction United's appeal concerning the dismissal of its RICO
claims and the denial of its motion to compel.
II.
The district court determined that United lacked standing to
assert antitrust claims because it failed to quote on any Carrousel
projects. Standing to assert a private antitrust action requires
a proper plaintiff to show injury to its business or property
caused by a violation of the antitrust laws.3 See McCormack v.
NCAA, 845 F.2d 1338, 1341 (5th Cir.1988). United admits that it
did not quote the Simcar on Carrousel projects, which require the
"Hubert aerator or equal." Instead, United claims injury because
it was "foreclosed" from competing on Carrousel projects by
Defendants' actions.
The question is whether United has created an issue of
material fact as to causation even though it never quoted the
3
Section 4 of the Clayton Act delineates private party
standing: "[A]ny person who shall be injured in his business or
property by reason of anything forbidden in the antitrust laws
may sue in any district court of the United States...." 15
U.S.C. § 15(a) (1988).
5
Simcar on Carrousel projects specifying "Hubert aerator or equal."4
United must offer proof of some damage flowing from the allegedly
unlawful actions. Zenith Radio Corp. v. Hazeltine Research, Inc.,
395 U.S. 100, 114 n. 9, 89 S.Ct. 1562, 1572 n. 9, 23 L.Ed.2d 129
(1969). In the refusal to deal context, a refused demand is the
most reliable evidence of causation, and the absence of a demand
is, without other causal evidence, fatal to a plaintiff's case.
Sullivan v. NFL, 34 F.3d 1091, 1104 (1st Cir.1994), cert. denied,
--- U.S. ----, 115 S.Ct. 1252, 131 L.Ed.2d 133 (1995); Out Front
Prods. v. Magid, 748 F.2d 166, 170 (3d Cir.1984).5
In Jayco, Jayco alleged resale price maintenance between its
supplier and three other dealers bidding on supplies. Because
Jayco did not bid on the supplies nor offer proof that the supplier
prevented Jayco from bidding, we concluded that Jayco lacked
4
United's Section 1 and 2 claims allege that Defendants'
actions foreclosed competition by United on Carrousel projects.
Defendants by their actions ultimately sought to have consulting
engineers choose Carrousel systems. Therefore, we focus on
whether the use of Eimco's specifications and licensing fee
caused United's alleged injury.
5
In refusal to deal cases, because the refusal to deal is
itself the antitrust violation, a simple demand satisfies
causation. In a competitive bid situation where the antitrust
violation is the noncompetitiveness of the bidding process, the
mere submission of a bid does not satisfy causation; in
addition, the bidder must show that its bid would have been
successful but for the antitrust violation. Affiliated Capital
Corp. v. City of Houston, 735 F.2d 1555, 1566 (5th Cir.1984) (en
banc), cert. denied, 474 U.S. 1053, 106 S.Ct. 788, 88 L.Ed.2d 766
(1986). When a party does not submit a bid, the additional
causal inquiry becomes whether the party can show a high
likelihood of success but for the antitrust violation. Jayco
Sys. v. Savin Business Machs. Corp., 777 F.2d 306, 314 & n. 22
(5th Cir.1985), cert. denied, 479 U.S. 816, 107 S.Ct. 73, 93
L.Ed.2d 30 (1986).
6
standing to assert the antitrust violation. Jayco, 777 F.2d at
316. Likewise, in this case United failed to quote the Simcar on
the projects about which it complains. The district court relied
on Jayco for its ruling on standing.6
United contends that it need not have quoted the Simcar on a
Carrousel project if United's quote, because of the alleged
antitrust violation, would have had no chance of success. We
agree. In the refusal to deal context, proof of futility satisfies
causation when a demand is lacking. See Zenith, 395 U.S. at 120 n.
15, 89 S.Ct. at 1575; Hanover Shoe v. United Shoe Mach. Corp., 392
U.S. 481, 487 n. 5, 88 S.Ct. 2224, 2228 n. 15, 20 L.Ed.2d 1231
(1968); Sullivan, 34 F.3d at 1104; Chicago Ridge Theatre Ltd.
Partnership v. M & R Amusement Corp., 855 F.2d 465, 470 (7th
Cir.1988); Magid, 748 F.2d at 172; cf. Jayco, 777 F.2d at 316
(noting that Jayco was not prevented from bidding). United
contends that it is futile for it to offer the Simcar on Carrousel
projects. We inquire whether United's proof of futility is
sufficient to withstand summary judgment.7
To show futility, United relies on the affidavits of its
6
United attempts to distinguish Jayco by pointing to the
portion of our opinion that addresses Jayco's proposed business
expansion. Because a business expansion that fails does not
result in an injury to a business, we allow antitrust standing in
cases involving new businesses if they can show an intent to bid
and preparation for the bid. Id. at 313. United's business is
ongoing, however, so the rule for new businesses does not apply.
7
We need not consider United's likelihood of success in
quoting on a Carrousel project if United's proof of futility is
not sufficient to create a material issue of fact. See supra
note 4.
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Chairman of the Board, Harold J. Beard, and its expert, Dr. Taylor.
In their opinion, quoting the Simcar on Carrousel projects is
futile because of Eimco's licensing fee and DHV's review. Beard
believes that Eimco can use its licensing fee to subsidize its
Hubert sales. Both men believe the requirement of DHV review
dissuades contractors from offering the Simcar because the
contractor must bear any costs resulting from the review and delay
construction until DHV completes its review.
United's evidence of futility does not raise a material issue
of fact. Although Eimco could use the licensing fee to subsidize
its aerator sales, United's theory amounts to pure speculation.
United does not contend that Eimco ever offered its aerator on a
Carrousel project at or below cost. United's concern over DHV's
review is likewise speculative. Although a contractor might refuse
to bid an aerator other than the Hubert because of the possible
cost and time burdens imposed by DHV's review, United offers no
positive evidence in support of its theory.8
In sum, United's evidence of futility is too speculative to
withstand summary judgment. United's evidence amounts to nothing
more than a pessimistic belief that it was not worth attempting to
compete. See Magid, 748 F.2d at 172. Because United fails to
raise a material issue of fact concerning causation, we conclude
8
In his affidavit, Beard states that United suggested to
contractors that they offer United's equipment without complying
with Eimco's specifications. The contractors refused United's
suggestion because it would put their bids off specification.
The contractors' actions were predictable and show no connection
to the DHV review requirement.
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that the district court properly granted summary judgment on
United's antitrust claims.9
III.
Our last task is to consider United's claim concerning
Eimco's alleged violation of the prior consent judgment. In 1984,
United filed an antitrust suit against Eimco's parent company. The
parties executed a consent judgment, which provides:
[United] may obtain approval from D.H.V. for aerators
manufactured and sold by [United or others] without
interference from [Eimco] so long as the nature of such
approval does not involve a breach of any obligation of duty
owed to [Eimco] by D.H.V., and so long as [Eimco] is not
requested to warrant or guarantee the waste water treatment
system in which such aerators are used.
United alleges that Eimco has violated the consent judgment by,
first, requiring United to use Eimco as an intermediary to obtain
DHV approval of the Simcar aerator on particular projects and,
second, conspiring with DHV to charge an exorbitant fee as part of
the approval process.
By its express terms, however, the consent judgment does not
apply to wastewater systems that Eimco is requested to warrant. In
other words, the consent judgment does not apply to Carrousel
systems. United complains of DHV's aerator review, but that review
occurs only on projects employing Eimco's specifications. Because
9
To assert a private cause of action under LUTPA, the unfair
trade practice must cause a consumer or business competitor an
ascertainable loss of money or movable property.
La.Rev.Stat.Ann. § 51:1409.A; Monroe Med. Clinic v. Hospital
Corp. of Am., 522 So.2d 1362, 1365 (La.Ct.App.2d Cir.1988).
Because United fails to raise a fact issue as to causation, we
also affirm the district court's grant of summary judgment on
United's LUTPA claims.
9
United's allegations address projects to which the consent judgment
does not apply, we conclude that Eimco has not violated the consent
judgment.
CONCLUSION
We dismiss for lack of appellate jurisdiction United's appeal
of the dismissal of its RICO claims and the denial of its motion to
compel discovery. We affirm the district court's grant of partial
summary judgment on the antitrust and LUTPA claims and its partial
summary judgment ruling concerning the violation of the prior
consent judgment.
AFFIRMED IN PART, DISMISSED IN PART FOR LACK OF JURISDICTION.
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