15‐589‐cv
MacDermid Printing Sols. LLC v. Cortron Corp.
In the
United States Court of Appeals
for the Second Circuit
AUGUST TERM 2015
No. 15‐589‐cv
MACDERMID PRINTING SOLUTIONS LLC,
Plaintiff‐Counter‐Defendant–Appellee,
v.
CORTRON CORPORATION,
Defendant‐Counter‐Claimant–Appellant.
On Appeal from the United States District Court
for the District of Connecticut
ARGUED: MAY 13, 2016
DECIDED: AUGUST 10, 2016
Before: CABRANES, STRAUB, and LOHIER, Circuit Judges.
On appeal from a judgment of the United States District Court
for the District of Connecticut (Michael P. Shea, Judge), which
awarded damages of $64,670,821 pursuant to a jury verdict on claims
for violations of federal and state antitrust laws, breach of contract,
misappropriation of trade secrets, spoliation, and violations of state
statutes prohibiting computer crimes and unfair trade practices.
Defendant‐appellant argues that the District Court erred in denying a
new trial or judgment as a matter of law on plaintiff‐appellee’s
antitrust claims; permitting plaintiff‐appellee to present evidence
previously withheld under the attorney‐client privilege and work‐
product doctrine; and failing to remit or to order a new trial on
damages regarding the antitrust and trade‐secrets claims.
We hold that the District Court erred in denying defendant‐
appellant judgment as a matter of law with respect to the antitrust
claims because plaintiff‐appellee failed to prove that the challenged
conduct harmed competition. We therefore REVERSE the judgment
of the District Court with respect to the federal and state antitrust
claims. We otherwise AFFIRM the judgment of the District Court
and REMAND the cause to the District Court to recalculate damages
in a manner consistent with this opinion.
JOHN R. HORVACK, JR. (James K. Robertson,
Jr., Fatima Lahnin, John L. Cordani, Jr., on
the brief), Carmody Torrance Sandak &
2
Hennessey LLP, New Haven, CT; for
Plaintiff‐Counter‐Defendant–Appellee.
JOHN P. ELWOOD (Joshua S. Johnson, on the
brief), Vinson & Elkins LLP, Washington,
DC; Harry First, New York, NY; Craig A.
Raabe, Nuala E. Droney, Robinson & Cole
LLP, Hartford, CT; for Defendant‐Counter‐
Claimant–Appellant.
JOSÉ A. CABRANES, Circuit Judge:
This appeal primarily concerns the requirements for proving
an adverse effect on competition for purposes of section 1 of the
Sherman Act, 15 U.S.C. § 1, in cases where the plaintiff has not
proved that the allegedly anticompetitive behavior led to higher
prices, reduced output, or lower quality in the market. We hold that
in such cases, a plaintiff may not prevail under the “rule of reason”
merely by proving that (1) the defendant exercised “market power,”
and (2) the challenged behavior may have misled consumers to
believe that certain products were no longer available, without
showing that consumers actually experienced reduced access to those
products.
Defendant‐appellant Cortron Corp. (“Cortron”) appeals from a
February 17, 2015 judgment of the United States District Court for the
District of Connecticut (Michael P. Shea, Judge), which awarded
3
damages of $64,670,821 pursuant to a jury verdict for plaintiff‐
appellee MacDermid Printing Solutions LLC (“MacDermid”) on its
claims for violations of federal and Connecticut antitrust laws, breach
of contract, misappropriation of trade secrets, spoliation, and
violations of Connecticut statutes prohibiting computer crimes and
unfair trade practices. MacDermid had alleged that its commercial
rival, nonparty E. I. du Pont de Nemours & Co. (“DuPont”), filed a
bogus patent‐infringement suit against Cortron, MacDermid’s
supplier, and that when Cortron and DuPont settled that suit, they
entered into an anticompetitive conspiracy that damaged
MacDermid’s business and hurt consumers.
On appeal, Cortron argues that the District Court erred in (1)
denying Cortron a new trial or judgment as a matter of law on its
antitrust claims; (2) permitting MacDermid to present evidence of its
lawyers’ patent advice; (3) concluding that the jury’s identical awards
on each of the antitrust claims were not duplicative; and (4) failing to
remit or to order a new trial on damages regarding the antitrust and
trade‐secrets claims.
We agree with Cortron that the District Court erred in denying
Cortron judgment as a matter of law with respect to MacDermid’s
antitrust claims because MacDermid failed to present evidence that
Cortron’s conduct harmed competition. We therefore REVERSE the
judgment of the District Court with respect to the antitrust claims.
We otherwise AFFIRM the judgment of the District Court and
REMAND the cause to the District Court to recalculate damages in a
manner consistent with this opinion.
4
I. BACKGROUND
A. Factual Background1
MacDermid and DuPont market thermal flexographic
processors, which are used to make plates for printing commercial
packaging. Such processors are typically sold either to commercial
printers, which produce packaging for consumer‐goods companies,
or to “trade shops,” which supply plates to commercial printers.
DuPont introduced the first thermal flexographic processor in
2000, under the “FAST” trade name. In 2002, MacDermid began to
develop an alternative to FAST, which it introduced in 2004 under
the “LAVA” trade name. At all relevant times, MacDermid and
DuPont were the only companies that marketed thermal flexographic
processors, and DuPont had a dominant share of that market.2
Soon after introducing its LAVA machines, MacDermid
entered into two contracts with Cortron. Under the “Joint
Development Agreement,” signed in November 2004, MacDermid
would pay Cortron to develop a second‐generation LAVA processor.
Under the “Manufacturing Agreement,” signed in April 2005,
“Because this appeal follows a jury verdict, we view the facts in the light
1
most favorable to the prevailing party,” i.e., MacDermid. Vill. of Freeport v. Barrella,
814 F.3d 594, 599 n.1 (2d Cir. 2016).
2 MacDermid asserts in its brief that “DuPont controlled 90% of the relevant
market,” MacDermid Br. 21, but cites nothing in the record to support this figure.
Nonetheless, Cortron does not dispute that DuPont controlled most of the
relevant market.
5
MacDermid would pay Cortron to build first‐generation LAVA
processors and to safeguard MacDermid’s proprietary information.
In 2008, DuPont scheduled a meeting with Cortron, ostensibly
to discuss potential business opportunities. During the meeting,
which took place on April 1, 2008, DuPont informed Cortron that it
had filed a lawsuit alleging that Cortron’s work for MacDermid
infringed DuPont Patent No. 6,797,454 (“the ’454 patent”).
DuPont and Cortron settled that suit in June 2008. As part of
the settlement, Cortron agreed “to immediately cease manufacturing,
selling, and offering to sell” thermal flexographic systems;3 “to
immediately cease and desist providing all service and/or technical
support” for LAVA products; and to give DuPont “all Technical
Information relating to” LAVA.4 In exchange, DuPont agreed, inter
alia, to dismiss its patent‐infringement suit with prejudice and to
indemnify Cortron against any lawsuit brought by MacDermid. In
addition, under a separate agreement, DuPont paid Cortron about
$140,000 for design work related to certain DuPont products.
Pursuant to the settlement agreement, Cortron gave DuPont all
technical information it had regarding LAVA technology before
deleting that information from its own systems. About five months
later, Cortron ceased operations.
3 Cortron was permitted to complete seven LAVA units then in progress, but
was required to tell DuPont where those units would be shipped. J.A. 1287. “J.A.”
refers to the Joint Appendix.
4 J.A. 1287, 1288.
6
DuPont announced the settlement in a press release issued on
July 30, 2008:
Under the terms of the agreement, Cortron . . . agrees to
immediately cease manufacturing LAVA [processors],
as well as to immediately discontinue providing all
service, spare parts, and technical support for any
LAVA equipment . . . . Thermal processing equipment
manufactured by Cortron has been marketed and sold
by MacDermid Printing Solutions, LLC under the
LAVA trade name.5
Unsurprisingly, DuPont hoped that this press release would
make potential customers “more likely to buy DuPont’s FAST”
processors and “less likely” to buy MacDermid’s competing LAVA
products.6 Later that day, MacDermid issued its own press release,
which accused DuPont of “inappropriately rais[ing] some questions
regarding MacDermid’s ability to support” its LAVA products and
“assure[d] [MacDermid’s] customers that it will continue to sell,
support and service” LAVA equipment.7
Meanwhile, MacDermid had already started searching for a
new manufacturer to replace Cortron. MacDermid had been
concerned about Cortron’s financial stability even before the DuPont
5 J.A. 1312.
6 J.A. 641.
7 J.A. 1313.
7
lawsuit. In 2007, MacDermid had started to plan for Cortron’s
potential failure, and by February 2008, MacDermid had contacted
three possible alternative suppliers. MacDermid’s concerns only
deepened after it learned about the pending litigation. In July 2008—
after learning about DuPont’s lawsuit, but before the Cortron‐
DuPont settlement agreement was announced—MacDermid decided
to switch from Cortron to a new manufacturer, OLEC Corporation.
Ordinarily, MacDermid would have expected Cortron to
facilitate the transition by transferring to OLEC any technical
information it had regarding LAVA machines. But because Cortron
had given all extant LAVA technical information to DuPont, and
because MacDermid did not have its own copy of that information,
OLEC had to reverse‐engineer the specifications needed to
manufacture new LAVA machines. The reverse‐engineering process
cost $29,970 and took about nine months. During this transition
period, MacDermid was unable to obtain new LAVA machines.
Nonetheless, MacDermid always retained an inventory of LAVA
processors and “never was unable to fulfill a sale,” according to the
testimony of its general manager.8
B. Procedural History
MacDermid filed the instant action in September 2008 in
Connecticut state court, alleging that Cortron and DuPont had
engaged in an antitrust conspiracy in violation of section 1 of the
8 J.A. 511.
8
Sherman Act, 15 U.S.C. § 1, and the Connecticut Antitrust Act, Conn.
Gen. Stat. §§ 35‐26, 35‐28. MacDermid also brought claims under the
Connecticut Uniform Trade Secrets Act (“CUTSA”), Conn. Gen. Stat.
§§ 35‐50 to 35‐58; under the state computer‐crime statute, Conn. Gen.
Stat. §§ 53a‐251, 52‐570b; under the Connecticut Unfair Trade
Practices Act (“CUTPA”), Conn. Gen. Stat. §§ 42‐110a to 42‐110q;
under state contract law; and for spoliation of evidence. Cortron filed
various counterclaims9 and removed the case to the United States
District Court for the District of Connecticut.
After a trial in June and July 2014, the jury found for
MacDermid on all issues and awarded it approximately $35.4 million
in compensatory damages.10 The District Court denied Cortron’s
post‐verdict motion for judgment as a matter of law, and denied its
post‐verdict motion for a new trial on condition that MacDermid
agree to a remitted award of $19,757,854 in compensatory damages.11
9 Namely, for breach of contract, fraudulent misrepresentation, negligent
misrepresentation, unjust enrichment, quantum meruit, breach of the covenant of
good faith and fair dealing, and violation of CUTPA.
10 The jury awarded $7,903,909 on the breach‐of‐contract claim; $3,941,325 on
each of the three antitrust claims; $3,790,939 under CUTSA; $29,970 on the
computer‐crime claim; and $11,875,204 under CUTPA. Pursuant to Federal Rule
of Civil Procedure 50(a), the District Court granted judgment as a matter of law to
MacDermid on one of Cortron’s counterclaims for fraud and negligent
misrepresentation. See MacDermid Printing Sols., Inc. v. Cortron Corp., No. 3:08‐CV‐
1649 (MPS), 2014 WL 3943629, at *1 (D. Conn. Aug. 12, 2014).
MacDermid Printing Sols., LLC v. Cortron Corp., No. 3:08‐CV‐1649 (MPS), 2014
11
WL 3943629, at *17 (D. Conn. Jan. 20, 2015).
9
The District Court also awarded punitive damages of $3,790,939
under CUTSA “as punishment for Cortron’s willful and malicious
disclosure of MacDermid’s trade secrets,” as well as $100,000 in
punitive damages for the “intentional or recklessly indifferent
violation of CUTPA in destroying MacDermid’s trade secrets.”12 All
told, the final judgment against Cortron—including attorneys’ fees,
interest, and treble antitrust damages—totaled $64,670,821. This
appeal followed.
II. DISCUSSION
A. Judgment as a Matter of Law on MacDermid’s Antitrust
Claims
We first consider Cortron’s argument that the District Court
erred in denying it judgment as a matter of law (“JMOL”) on
MacDermid’s federal and state antitrust claims.
1. Standard of Review
We review de novo a district court’s denial of JMOL pursuant to
Rule 50(b) of the Federal Rules of Civil Procedure.13 Where a jury has
rendered a verdict for the non‐movant, a court may grant JMOL
“only if the court, viewing the evidence in the light most favorable to
12 Id. at *20.
13 Cash v. Cty. of Erie, 654 F.3d 324, 332 (2d Cir. 2011).
10
the non‐movant, concludes that a reasonable juror would have been
compelled to accept the view of the moving party.”14
“In order for a party to pursue a request for JMOL on appeal,
the party must have made timely motions for JMOL in the district
court.”15 In particular, a party must first move for JMOL pursuant to
Rule 50(a) before the case is submitted to the jury. If the Rule 50(a)
motion is denied, “the movant may, no later than 28 days after the
entry of a judgment, ‘file a renewed motion for judgment as a matter
of law.’”16 “Because the Rule 50(b) motion is only a renewal of the
preverdict motion, it can be granted only on grounds advanced in the
preverdict motion.”17 A district court may grant a Rule 50(b) motion
based on a ground not advanced in a Rule 50(a) motion “only if
necessary to prevent manifest injustice.”18
Here, Cortron moved for JMOL both before and after the case
was submitted to the jury. The parties disagree, however, about
which arguments Cortron preserved in its Rule 50(a) motion. The
District Court found that Cortron properly preserved its argument
14 Id. at 333 (internal quotation marks omitted) (emphasis in original).
15 Lore v. City of Syracuse, 670 F.3d 127, 152 (2d Cir. 2012).
16 Id. at 153 (quoting Fed. R. Civ. P. 50(b)) (emphasis in Lore).
Id. (quoting Fed. R. Civ. P. 50 Advisory Comm. Note (2006)) (alteration and
17
emphasis omitted).
Crawford v. Tribeca Lending Corp., 815 F.3d 121, 127 (2d Cir. 2016) (internal
18
quotation marks omitted).
11
that MacDermid had failed to prove harm to competition, but that it
did not preserve several other arguments raised in its Rule 50(b)
motion.19 Cortron continues to press two of those purportedly
unpreserved arguments on appeal: (1) that MacDermid failed to
prove lost sales because its case relied on “expert testimony founded
on statistically insignificant results”;20 and (2) that the DuPont press
release was “commercial speech” that is presumptively harmless
under antitrust laws.21
We agree with the District Court that Cortron preserved its
argument that MacDermid failed to prove harm to competition22—a
conclusion MacDermid does not challenge on appeal. We therefore
consider this argument de novo. Because we conclude below that this
argument offers a sufficient reason to entitle Cortron to JMOL on the
Namely, (1) that MacDermid had failed to prove it was injured because the
19
proof offered was based on a statistical analysis that was insignificant at the 95%
confidence interval; (2) that the DuPont press release was presumptively harmless
commercial speech; (3) that settling a patent‐infringement claim cannot give rise
to antitrust liability unless that claim is proved to be baseless; (4) that the
procompetitive effects of Cortron’s actions outweighed the anticompetitive
effects; (5) that MacDermid had failed to prove concerted action between Cortron
and DuPont; and (6) that Conn. Gen. Stat. § 35‐28 bars only per se violations of
section 1 of the Sherman Act, and not violations under the “rule of reason.”
20 Cortron Br. 36.
21 Id. at 27.
Cortron preserved this argument following the close of evidence, J.A. 769,
22
and in its renewed motion for JMOL, J.A. 1860–62.
12
antitrust claims, we need not consider whether Cortron preserved its
other antitrust arguments.
2. The Legal Framework Governing MacDermid’s Antitrust
Claims
MacDermid’s federal and state antitrust claims are identical for
purposes of this appeal.23 Accordingly, we focus here on
MacDermid’s federal claim, which was brought pursuant to section 1
of the Sherman Act.
Section 1 of the Sherman Act prohibits, in relevant part,
“[e]very contract, combination in the form of trust or otherwise, or
conspiracy, in restraint of trade or commerce.”24 Under section 1,
some restraints on trade, such as horizontal agreements to fix prices,
are unlawful per se, while others must be evaluated under the so‐
called “rule of reason.”25 MacDermid alleged that Cortron violated
section 1 of the Sherman Act under the rule of reason.
23 See Conn. Gen. Stat. § 35‐44b (“It is the intent of the General Assembly that
in construing [the Connecticut Antitrust Act], the courts of this state shall be
guided by interpretations given by the federal courts to federal antitrust
statutes.”).
24 15 U.S.C. § 1.
25 See, e.g., Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 885–86
(2007) (“Under [the] rule [of reason], the factfinder weighs all of the circumstances
of a case in deciding whether a restrictive practice should be prohibited as
imposing an unreasonable restraint on competition. . . . In its design and function
the rule distinguishes between restraints with anticompetitive effect that are
13
A plaintiff seeking to prove an antitrust violation under the
rule of reason must initially show that the challenged action
adversely affected competition in the relevant market.26 (Here, the
relevant market is thermal flexographic processors.27) A plaintiff may
satisfy this requirement in either of two ways. First, a plaintiff may
offer direct evidence of harm to competition by proving higher
prices, reduced output, or lower quality in the market as a whole.28
Alternatively, a plaintiff may demonstrate an adverse effect
indirectly by establishing that the alleged conspirators had sufficient
“market power” to cause an adverse effect, “plus some other ground
for believing that the challenged behavior” has harmed
competition.29 “Market power” is “defined as the ability of a single
seller to raise prices and restrict output.”30
In Tops Markets, Inc. v. Quality Markets, Inc., we held that a
plaintiff seeking to prove an adverse effect indirectly need show only
harmful to the consumer and restraints stimulating competition that are in the
consumer’s best interest.” (internal quotation marks omitted)).
26 Tops Mkts., Inc. v. Quality Mkts., Inc., 142 F.3d 90, 96 (2d Cir. 1998).
See MacDermid Printing Sols., Inc. v. Cortron Corp., No. 3:08‐CV‐1649 (MPS),
27
2014 WL 2615361, at *4–6 (D. Conn. June 12, 2014).
See, e.g., Capital Imaging Assocs., P.C. v. Mohawk Valley Med. Assocs., Inc., 996
28
F.2d 537, 547 (2d Cir. 1993).
29 See Tops Mkts., 142 F.3d at 97.
Virgin Atl. Airways Ltd. v. British Airways PLC, 257 F.3d 256, 265 (2d Cir.
30
2001) (brackets and internal quotation marks omitted).
14
“that the challenged behavior could harm competition.”31 Other
Second Circuit cases, however, have required evidence that the
challenged behavior will harm competition.32 But despite differences
in phrasing, our cases have always required, as a practical matter,
some evidence that the challenged action has already had an adverse
effect on competition, even if consumers have not yet felt that effect.33
Indeed, although we have sometimes described “direct” and
“indirect” proof as alternative ways of satisfying the adverse‐effect
requirement, there is really only one way to prove an adverse effect
on competition under the rule of reason: by showing actual harm to
consumers in the relevant market.34 How “actual harm” is shown
determines whether proof of market power is also required. If a
142 F.3d at 97 (emphasis supplied); see also F.T.C. v. Ind. Fed’n of Dentists, 476
31
U.S. 447, 460 (1986) (stating in dicta that “the purpose of the inquiries into market
definition and market power is to determine whether an arrangement has the
potential for genuine adverse effects on competition”).
See CDC Techs., Inc. v. IDEXX Labs., Inc., 186 F.3d 74, 81 (2d Cir. 1999); K.M.B.
32
Warehouse Distribs., Inc. v. Walker Mfg. Co., 61 F.3d 123, 129 (2d Cir. 1995).
See Tops Mkts., 142 F.3d at 97; see also United States v. Visa U.S.A., Inc., 344
33
F.3d 229, 238 (2d Cir. 2003) (holding that after demonstrating market power, the
government must show that “defendants’ actions have had substantial adverse
effects on competition” (emphasis supplied)).
34 See Tops Mkts., 142 F.3d at 96, 97 (“[P]laintiff provided no evidence other
than market share to prove that defendants’ action had an adverse effect on
competition. . . . Hence, despite [defendant’s] presumed market power, [plaintiff]
still failed to show any adverse effect on competition as a whole.”); see also CDC
Techs., 186 F.3d at 81 (implying that the requirement for proving harm to
competition is the same whether or not market power is shown).
15
plaintiff proves that consumers have already experienced harm from
the challenged behavior because of higher prices, reduced output, or
lower quality, then proof of market power is not required. Otherwise,
it is.35
Our cases suggest that it is possible, at least in theory, to prove
that a challenged action harmed competition without offering
evidence of higher prices, reduced output, or reduced quality. We
have never explained, however, what such proof would look like.
Indeed, in no precedential opinion in this Circuit has a plaintiff
successfully proved an adverse effect on competition without
offering evidence of changed prices, output, or quality.
We first discussed “indirect” proof in Capital Imaging Associates,
P.C. v. Mohawk Valley Medical Associates, Inc.36 In that case, we
suggested that a plaintiff that is unable to prove an actual adverse
effect through price, output, or quality “must at least establish that
defendants possess the requisite market power so that [the
challenged action] has the potential for genuine adverse effects on
competition.”37 Because the plaintiff in that case failed to prove
See Geneva Pharm. Tech. Corp. v. Barr Labs. Inc., 386 F.3d 485, 509 (2d Cir.
35
2004) (“If plaintiff can demonstrate an actual adverse effect on competition, such
as reduced output, there is no need to show market power in addition.” (citation
omitted)); K.M.B., 61 F.3d at 129.
36 996 F.2d 537.
37 Id. at 546 (emphasis supplied) (internal quotation marks omitted).
16
market power, we had no need to consider what additional evidence
of harm to competition might have been required.
We revisited the issue in K.M.B. Warehouse Distributors, Inc. v.
Walker Manufacturing Co.38 In K.M.B., we emphasized that under the
rule of reason, “a showing of market power, while necessary to show
adverse effect indirectly, is not sufficient,” and that a plaintiff must
offer “other grounds to believe that the defendant’s behavior will
harm competition market‐wide.”39 As in Capital Imaging, however,
we had no cause to decide what “other grounds” might suffice,
because the plaintiff offered no reason at all to think that the
challenged behavior had harmed or would harm competition.40
We did suggest, in dicta, two possible examples of such “other
grounds”: “the inherent[ly] anticompetitive nature of [a] defendant’s
behavior or the structure of the interbrand market.”41 We have never
had occasion to determine in a precedential opinion, however, in
what situations either of these considerations would actually enable a
plaintiff to indirectly prove an adverse effect on competition. We
have suggested that actions that reduce consumer choice are
38 61 F.3d 123.
39 Id. at 129.
40 Id. at 129–30.
41 Id. at 129.
17
inherently anticompetitive.42 We have also suggested that “the
structure of the interbrand market” means, in practice, an inquiry
into whether the challenged behavior “significantly restrict[ed]”
competitors’ ability to enter the relevant market and compete—in
other words, whether the challenged behavior created significantly
higher barriers to entry.43 In no case, however, have we actually held
that proof of market power plus any particular interbrand market
structure was sufficient to prove an adverse effect on competition as
a whole.
In sum, proving an adverse effect on competition without
showing increased price, reduced output, or reduced quality in the
market has remained possible in theory but elusive in practice.
42 See Ross v. Bank of Am., N.A. (USA), 524 F.3d 217, 223–24 (2d Cir. 2008). The
issue presented in Ross was whether plaintiffs had Article III standing; we thus
had no reason to make any definitive pronouncement about how to analyze
reduction in consumer choice under the rule of reason. See also Ross v. Citigroup,
Inc., 630 F. App’x 79, 82 n.4 (2d Cir. 2015) (summary order) (declining to reach
issue of whether collusion to reduce consumer choice in the circumstances
presented constituted an unreasonable restraint on trade). In many cases, of
course, “inherently anticompetitive” behavior would likely be deemed illegal per
se and thus not analyzed under the rule of reason. Cf. Copperweld Corp. v. Indep.
Tube Corp., 467 U.S. 752, 768 (1984) (“Certain agreements, such as horizontal price
fixing and market allocation, are thought so inherently anticompetitive that each
is illegal per se without inquiry into the harm it has actually caused.”).
See Clorox Co. v. Sterling Winthrop, Inc., 117 F.3d 50, 59 (2d Cir. 1997) (internal
43
quotation marks omitted); see also Tops Mkts., 142 F.3d at 97 (suggesting that in
considering “the structure of the interbrand market,” the relevant inquiry was
whether the challenged action “foreclose[d] other prospective . . . competitors
from entering the market in desirable locations”).
18
3. Application
MacDermid sought to prove an antitrust violation under the
rule of reason. As such, it was required to prove an adverse effect on
competition. It has failed to do so here.
a. Direct Proof of Competitive Harm
As an initial matter, we agree with the District Court that
MacDermid has not directly proved an adverse effect on
competition.44 Although MacDermid contends that the jury could
reasonably have found that the purported conspiracy increased
prices, MacDermid does not suggest, much less show, that prices for
thermal flexographic processors actually rose after DuPont’s
settlement with Cortron. Instead, MacDermid argues that DuPont
would have decreased its prices but for the conspiracy.45 But this
amounts to little more than speculation. To prove an actual adverse
effect on price, a plaintiff must show just that—that prices actually
increased.46
44 See J.A. 772 (finding “no evidence” that the purported Cortron‐DuPont
conspiracy resulted in reduced output or higher prices in the market for thermal
flexography processors); J.A. 774. MacDermid comes close to conceding this point.
See MacDermid Br. 23 (criticizing Cortron’s “blinkered focus on ‘price, quality,
and output’”).
45 MacDermid Br. 25–26.
See Tops Mkts., 142 F.3d at 96; see also Virgin Atl., 257 F.3d at 264 (holding that
46
“expert testimony rooted in hypothetical assumptions cannot substitute for actual
market data” when showing an actual adverse effect on price).
19
Nor has MacDermid produced evidence that the purported
conspiracy led to reduced output in the market. A reasonable jury
could have found that the Cortron‐DuPont settlement resulted in
MacDermid’s losing its critical supplier, which in turn prevented the
production of new LAVA machines for about nine months. But while
this disruption may have reduced the total number of thermal
flexographic processors in the world, it did not reduce the number of
such processors from the perspective of consumers.47 During
MacDermid’s transition from Cortron to OLEC, MacDermid always
maintained an inventory of LAVA machines, which always exceeded
consumer demand.48 Accordingly, the production of additional
LAVA machines during that time would not have increased, in any
meaningful sense, the number of machines that consumers could
actually buy.49
See Tops Mkts., 142 F.3d at 96 (“[E]ven if plaintiff were hindered from
47
competing, nothing changed in the relevant product market from the consumer’s
perspective.”); Capital Imaging, 996 F.2d at 547 (“It has not [been] shown that
defendants’ activities have had any adverse impact on . . . output . . . offered to
consumers . . . .”).
See J.A. 511 (testimony of MacDermid general manager that MacDermid
48
“never was unable to fulfill a sale” due to insufficient inventory).
Our conclusions with respect to price and output reinforce each other. Basic
49
principles of economics teach us that, all things being equal, price and output
have an inverse relationship. See, e.g., Weyerhaeuser Co. v. Ross‐Simmons Hardwood
Lumber Co., 549 U.S. 312, 324–25 (2007); Cal. Dental Ass’n v. F.T.C., 526 U.S. 756, 777
(1999). Therefore, if Cortron’s actions had resulted in reduced quantity, they
should also have resulted in higher prices, absent some other explanation.
20
We note, finally, that MacDermid does not argue that the
purported conspiracy reduced the overall quality of processors in the
market.50 We turn, then, to indirect evidence of harm to competition.
b. Indirect Proof of Competitive Harm
As discussed above, to prove harm to competition indirectly,
MacDermid was required to show (1) that the conspirators had
sufficient “market power” to cause an adverse effect, and (2) “some
other ground for believing that the challenged behavior” harmed
competition.51 Even if we assume arguendo that MacDermid has
proved market power, MacDermid has failed to provide any reason
to think that the Cortron‐DuPont agreement harmed competition in
the market as a whole.
MacDermid offers three possible reasons to believe that
Cortron’s behavior harmed competition, none of which has merit.
First, MacDermid suggests that the Cortron‐DuPont settlement “was
inherently anticompetitive” because “Cortron and DuPont had a
competitive relationship at the time.”52 But as the District Court
correctly observed, Cortron and DuPont did not compete for
50 We do not consider MacDermid’s bare assertions to the contrary. See
MacDermid Br. 11, 12, 22; Tolbert v. Queens Coll., 242 F.3d 58, 75 (2d Cir. 2001) (“It
is a settled appellate rule that issues adverted to in a perfunctory manner,
unaccompanied by some effort at developed argumentation, are deemed
waived.” (internal quotation marks omitted)).
51 Tops Mkts., 142 F.3d at 97.
52 MacDermid Br. 21–22.
21
customers. Rather, Cortron was an upstream supplier of MacDermid
and later of DuPont. Accordingly, the mere fact that Cortron and
DuPont reached an agreement was no more inherently
anticompetitive than the earlier agreement between Cortron and
MacDermid. And although the settlement of patent litigation is not
immune from possible antitrust liability, neither is it inherently
anticompetitive.53
Second, MacDermid argues that “the relevant interbrand
market was a duopoly,” which “is ground alone for finding [that] the
challenged behavior harmed competition.”54 But although
“competition is necessarily limited” in a duopoly,55 the mere fact that
a market has few competitors does not transform every action by one
of them into an antitrust violation. Rather, even in a duopoly, a
plaintiff must offer some other reason to think that the challenged
behavior harmed competition.56
53 See F.T.C. v. Actavis, Inc., 133 S. Ct. 2223, 2237 (2013) (suggesting that while
so‐called “reverse payment” settlements of patent litigation can sometimes violate
antitrust laws, settling patent litigation without reverse payments is less likely to
have impermissible anticompetitive effects).
54 MacDermid Br. 22.
55 See Visa U.S.A., 344 F.3d at 240.
56 See id. (finding evidence of harm to competition based on, inter alia, evidence
of “the total exclusion of [two competitors] from a segment of the market”). One
approach might be to show that the challenged behavior resulted in greater
barriers to entry. See CDC Techs., 186 F.3d at 80; ante note 43 and accompanying
text. MacDermid’s expert testified at trial that “[t]here are barriers to entry” in the
market for thermal flexographic processors, but he did not suggest that the
22
Finally, MacDermid argues that the Cortron‐DuPont
conspiracy harmed competition by reducing the range of options
available to consumers. MacDermid is correct that reduced consumer
choice can constitute harm to competition.57 But the Cortron‐DuPont
agreement did not restrict the options available to consumers, who
never lost the option of buying LAVA processors.
MacDermid argues, and the District Court found, that the
Cortron‐DuPont conspiracy—and especially DuPont’s press
release—could have led “consumers to believe that MacDermid’s
LAVA technology was no longer available.”58 But even if a press
release can rise to the level of “[c]oercive activity that prevents its
victims from making free choices between market alternatives”—the
standard courts have used in the past when evaluating purported
Cortron‐DuPont settlement or press release affected those barriers. See J.A. 601.
Instead, MacDermid used the prior existence of barriers to entry to establish
DuPont’s market power. See MacDermid Printing Sols., 2015 WL 251527, at *7.
MacDermid does not mention barriers to entry on appeal, much less show that the
purported conspiracy heightened existing barriers or created new ones.
57 See, e.g., Ind. Fed’n of Dentists, 476 U.S. at 459; Visa U.S.A., 344 F.3d at 240; see
also Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459
U.S. 519, 528 (1983) (“Coercive activity that prevents its victims from making free
choices between market alternatives is inherently destructive of competitive
conditions and may be condemned even without proof of its actual market
effect.”); Ross, 524 F.3d at 224 (“The reduction in choice and diminished quality of
credit services to which the cardholders claim they have been subjected are
present anti‐competitive effects . . . .”).
58 MacDermid Printing Sols., 2015 WL 251527, at *7.
23
limitations on consumer choice59—it is clear that the press release at
issue here did not prevent any consumer from freely choosing
between DuPont and MacDermid processors.
The record shows that customers continued to buy LAVA
machines even after July 2008, when DuPont announced its
settlement with Cortron and when MacDermid switched suppliers.60
There is no evidence that even a single customer was actually misled
into thinking that LAVA processors were no longer available.61 That
is not surprising: users of thermal flexography are “large
sophisticated customers” that are unlikely to be tricked into thinking
that a viable supplier no longer exists, especially when it comes to
making sizable capital expenditures.62 And even if the press release
did mislead some customers regarding the continued availability of
LAVA machines, actions that “merely interfere with the consumer’s
freedom of choice in deciding” whether to buy a product are
59 See Associated Gen. Contractors of Cal., 459 U.S. at 528.
60 For instance, James Levinsohn, MacDermid’s expert, testified that two
customers, Bemis and Exopack, continued to buy LAVA machines after DuPont
issued the press release. J.A. 601.
61 See J.A. 769.
62 See J.A. 629; see also J.A. 1621 (quoting one LAVA model as costing $99,000
and another model as costing $109,000); J.A. 589 (suggesting that DuPont made $2
million from every processor it sold, including subsequent sales of printing
plates).
24
insufficient to support an antitrust claim, absent any further showing
of “demonstrable, anti‐competitive impact.”63
It is certainly possible that the purported Cortron‐DuPont
conspiracy, including DuPont’s press release, led some consumers to
buy DuPont machines instead of MacDermid ones. But even if true,
that would merely establish harm to MacDermid, not harm to
competition in the market as a whole. “[B]ecause the antitrust laws
protect competition, not competitors,” a plaintiff must show that
more than its own business suffered; it must ultimately show that the
challenged action harmed consumers.64 MacDermid has not done so
here.65
See Coniglio v. Highwood Servs., Inc., 495 F.2d 1286, 1293 (2d Cir. 1974); cf.
63
Nat’l Ass’n of Pharm. Mfrs., Inc. v. Ayerst Labs., Div. of/and Am. Home Prods. Corp.,
850 F.2d 904, 916 (2d Cir. 1988) (holding that, under section 2 of the Sherman Act,
“a plaintiff asserting a monopolization claim based on misleading advertising
must overcome a presumption that the effect on competition of such a practice
was de minimis” (internal quotation marks omitted)).
64 Clorox Co., 117 F.3d at 57; see Brunswick Corp. v. Pueblo Bowl‐O‐Mat, Inc., 429
U.S. 477, 488 (1977) (“The antitrust laws . . . were enacted for ‘the protection of
competition, not competitors[.]’” (quoting Brown Shoe Co. v. United States, 370 U.S.
294, 320 (1962))).
65 Because we hold that Cortron is entitled to judgment as a matter of law on
MacDermid’s antitrust claims, we need not consider Cortron’s alternative request
for a new trial or its argument that the jury awarded duplicative antitrust
damages.
25
B. Admission of Evidence Concerning MacDermid’s Patent
Advice
We next consider Cortron’s argument that the District Court
“abused its discretion” in permitting MacDermid to present evidence
of its patent counsel’s advice, which it had previously withheld based
on claims of attorney‐client privilege and the work‐product doctrine.
1. Background
The events leading to this appeal began with a patent‐
infringement suit filed by DuPont, alleging that Cortron’s work for
MacDermid had infringed DuPont’s ’454 patent. Whether Cortron or
MacDermid has, in fact, infringed any DuPont patent is not directly
at issue in this litigation.66 Nonetheless, the question of infringement
lurks beneath several of the claims in this suit. Of particular
relevance to this appeal, evidence of infringement could have
provided Cortron with a defense against MacDermid’s breach‐of‐
contract claim: Cortron argues that MacDermid had warranted that
LAVA infringed no third‐party patent, and that any infringement of
66 MacDermid challenged the validity of the ’454 patent in a separate
proceeding before the U.S. Patent and Trademark Office. See MacDermid Printing
Sols., LLC v. E.I. DuPont de Nemours & Co., No. 2015‐1750, 2016 WL 1042927 (Fed.
Cir. Mar. 16, 2016). In addition, DuPont sued MacDermid in the District of
Connecticut for patent infringement. DuPont and Cortron both moved to
consolidate that action with the instant litigation, but MacDermid opposed
consolidation and moved to transfer DuPont’s suit to the District of New Jersey,
where other litigation was pending between MacDermid and DuPont. The
District Court granted MacDermid’s motion to transfer and denied the motions to
consolidate as moot.
26
the ’454 patent therefore constituted a breach of warranty by
MacDermid.67
Accordingly, during discovery in 2009, Cortron sought
evidence, through document requests, interrogatories, and
depositions, about MacDermid’s efforts to determine whether its
LAVA machines infringed any DuPont patent. MacDermid initially
resisted some of these discovery requests by invoking the attorney‐
client privilege and the work‐product doctrine.
In September 2012, however, the United States District Court
for the District of New Jersey held, in related litigation between
DuPont and MacDermid, that MacDermid had waived any privileges
regarding the advice of its patent counsel about the design of LAVA
See MacDermid Printing Sols., 2014 WL 3943629, at *1 (explaining why the
67
District Court granted MacDermid JMOL on the issue of “whether MacDermid
fraudulently and negligently represented that its technology did not infringe a
patent held by a third party”).
The question of infringement was also potentially relevant to MacDermid’s
antitrust claims. Cortron essentially argued that if DuPont had an objective basis
for thinking that LAVA infringed the ’454 patent, then DuPont’s patent‐
infringement suit against Cortron was not an anticompetitive sham that violated
federal and state antitrust laws. See Prof’l Real Estate Inv’rs, Inc. v. Columbia Pictures
Indus., Inc., 508 U.S. 49, 51, 61 (1993) (holding that patent litigation is generally
immune from antitrust liability as long as it is not (1) “objectively baseless” and
(2) subjectively intended “as an anticompetitive weapon” (internal quotation
marks omitted)). Because we hold that MacDermid’s antitrust claim fails as a
matter of law on other grounds, we need not consider whether DuPont’s suit was
objectively baseless. See also ante note 19 (discussing whether Cortron waived this
argument).
27
machines and their potential infringement of DuPont patents. In
response to that ruling, MacDermid supplemented its production of
documents in the instant litigation and amended its exhibit and
witness lists. Included among MacDermid’s new proposed exhibits
was an opinion by the law firm of Wiggin & Dana LLP stating that
LAVA processors did not infringe DuPont’s ’454 patent.
On September 6, 2013, Cortron filed a motion in limine to
preclude MacDermid from presenting the newly disclosed evidence.
The District Court granted the motion in part and denied it in part in
an order of June 4, 2014.68 The court excluded the Wiggin & Dana
opinion, as well as any opinion testimony that MacDermid did not
actually infringe the ’454 patent, but permitted testimony by John
Cordani (MacDermid’s general counsel)69 and other witnesses
concerning MacDermid’s efforts to avoid infringement.
To avoid prejudicing Cortron, the District Court permitted
Cortron to engage in additional discovery in response to
MacDermid’s newly disclosed evidence.70 Specifically, the court
ordered MacDermid to supplement its interrogatory response and
When Cortron filed its motion, the trial was scheduled to begin on October
68
15, 2013. The trial actually began on June 18, 2014.
John L. Cordani, MacDermid’s general counsel and secretary, is not to be
69
confused with John L. Cordani, Jr., an attorney for Carmody Torrance Sandak &
Hennessey LLP, who appears on MacDermid’s brief.
Although the court decided Cortron’s motion in limine on June 4, 2014, the
70
court had indicated during a telephonic status conference on May 28, 2014, that it
was inclined to authorize additional discovery. Special App. 1.
28
document production and permitted Cortron to re‐depose several
witnesses.71 The District Court also permitted Cortron to designate an
expert on the issue of whether MacDermid had given Wiggin & Dana
enough information to render an adequately informed patent
opinion.
Pursuant to the District Court’s order, MacDermid
supplemented its interrogatory response, and Cortron re‐deposed
four witnesses between June 6 and June 13, 2014. MacDermid also
provided Cortron with a transcript of an earlier deposition of
Cordani in New Jersey. Cortron declined to designate an expert on
the subject of infringement.
2. Analysis
A party challenging a district court’s evidentiary ruling is
generally entitled to a new trial if (1) “the district court committed
errors that were a clear abuse of discretion,” and (2) those errors
“were clearly prejudicial to the outcome of the trial, where prejudice
is measured by assessing the error in light of the record as a whole.”72
71 In particular, the District Court permitted additional depositions of Cordani;
James Hennessy, an engineer at MacDermid; Ryan Vest, MacDermid’s director of
research and development; and a witness from OLEC. The District Court noted
that MacDermid had already given Cortron an opportunity to depose Cordani,
and perhaps also Hennessy and Vest, in September 2013.
72 Marshall v. Randall, 719 F.3d 113, 116 (2d Cir. 2013) (internal quotation marks
omitted). As we have often observed, “abuse of discretion” is a “term of art” that
“merely signifies that a district court based its ruling on an erroneous view of the
law or on a clearly erroneous assessment of the evidence, or rendered a decision
29
“In civil cases, the burden falls on the appellant to show that the error
was not harmless and that it is likely that in some material respect the
factfinder’s judgment was swayed by the error.”73
Cortron has not met this burden. First, Cortron has not even
shown that the District Court erred, much less “abused its
discretion,” in admitting the challenged evidence. We have generally
been reluctant to second‐guess a district court’s decision whether to
exclude evidence previously withheld as privileged.74 Although
Cortron cites several cases suggesting that the District Court would
have been permitted to exclude the challenged evidence, none
suggests that exclusion was required.75 Indeed, we have encouraged
that cannot be located within the range of permissible decisions.” Barrella, 814
F.3d at 611 (internal quotation marks omitted).
Warren v. Pataki, 823 F.3d 125, 138 (2d Cir. 2016) (internal quotation marks
73
omitted).
Cf. United States v. 4003–4005 5th Ave., Brooklyn, NY, 55 F.3d 78, 85 (2d Cir.
74
1995) (noting, in the context of the privilege against self‐incrimination, that “as
long as a trial court considers the relevant factors and acts with moderation to
accommodate both a litigant’s valid [privilege] interests and the opposing parties’
needs in having the litigation conducted fairly, we will not disturb the measures
used by that court in the exercise of its discretion.”).
See, e.g., id. at 85 (holding that a district court did not abuse its discretion by
75
precluding the submission of evidence previously claimed to be within the
privilege against self‐incrimination); Columbia Pictures Television, Inc. v. Krypton
Broad. of Birmingham, Inc., 259 F.3d 1186, 1196 (9th Cir. 2001) (“The district court
was also within its discretion in excluding evidence of [defendant’s] reliance on
advice of counsel.”). Cortron argues that Federal Rule of Civil Procedure 37(c)(1)
mandated the exclusion of certain evidence because MacDermid did not timely
supplement its responses to Cortron’s interrogatories and production requests.
30
district courts to “take a liberal view” toward the withdrawal of a
claim of privilege, which “allows adjudication based on
consideration of all the material facts.”76
A district court “may be fully entitled” to preclude the
presentation of evidence “about matters previously hidden from
discovery through an invocation of” privilege, if a party has
manipulated the privilege “primarily to abuse, manipulate or gain an
unfair strategic advantage over opposing parties.”77 Here, however,
we agree with the District Court that MacDermid did not proceed in
bad faith. To the contrary, MacDermid vigorously defended its
privilege until the United States District Court for the District of New
Jersey made a finding of waiver over MacDermid’s objection.
MacDermid then promptly sought to introduce the newly
unprivileged evidence in the instant litigation.
Nor has Cortron shown that it was prejudiced by the District
Court’s ruling. Cortron had ample opportunity to respond to
MacDermid’s late disclosures and to prepare to rebut the newly
produced evidence at trial. MacDermid invited Cortron in September
2013—eight months before the evidentiary ruling at issue here—to
depose Cordani on the questions as to which MacDermid had
But we have rejected the view that Rule 37(c)(1) invariably requires exclusion. See
Design Strategy, Inc. v. Davis, 469 F.3d 284, 297–98 (2d Cir. 2006).
76 4003–4005 5th Ave., 55 F.3d at 84.
77 Id. at 84–85.
31
previously asserted a privilege. Cortron declined to do so. After the
District Court’s ruling of June 4, 2014, Cortron re‐deposed Cordani
and three other witnesses, and MacDermid supplemented its
relevant interrogatory response. The District Court also offered
Cortron an opportunity to designate an expert on patent validity, but
Cortron declined to do that as well. Moreover, Cortron rejected an
opportunity to pursue a continuance.78 Cortron must bear the
consequences of these tactical decisions.79
C. Denial of Remittitur or New Trial on CUTSA Damages
Finally, we consider Cortron’s argument that the jury’s award
of $3,790,939 for damages under CUTSA was excessive, and that the
District Court therefore should have remitted the award or ordered a
new trial on CUTSA damages.
We review for “abuse of discretion” a district court’s denial of
remittitur or a new trial on damages.80 “In considering motions for a
new trial and/or remittitur, the role of the district court is to
78 Cf. Manley v. AmBase Corp., 337 F.3d 237, 247 n.7 (2d Cir. 2003) (“Although
[appellant] complains that [appellee’s] motion to preclude the use of [a] discovery
deposition was not made until the eve of the second trial, the record fails to
evidence prejudice, particularly since [appellant] did not seek a
continuance . . . .”); United States v. Andrews, 381 F.2d 377, 378 (2d Cir. 1967)
(“If . . . appellant . . . was surprised by the . . . evidence, his proper remedy would
have been to seek a continuance . . . .”).
79 See Lee v. Edwards, 101 F.3d 805, 813 (2d Cir. 1996) (“We are disinclined . . . to
facilitate a new trial in which the defense can repair a tactical error.”).
80 Psihoyos v. John Wiley & Sons, Inc., 748 F.3d 120, 126 (2d Cir. 2014).
32
determine whether the jury’s verdict is within the confines set by
state law, and to determine, by reference to federal standards
developed under Rule 59, whether a new trial or remittitur should be
ordered.”81
Under Connecticut law, “the relevant inquiry” in determining
whether an award is excessive is whether it “falls within the
necessarily uncertain limits of fair and reasonable compensation or
whether it so shocks the conscience as to compel the conclusion that
it was due to partiality, prejudice or mistake.”82 Damages may also be
excessive under Connecticut law “when the record, viewed in the
light most favorable to the plaintiff, does not support the juryʹs
award.”83
Cortron argues that the jury’s award of damages under
CUTSA lacked an evidentiary basis. MacDermid’s CUTSA claim
derived from Cortron’s transfer to DuPont of technical information
for LAVA machines. The jury’s award of damages was based on an
estimate by MacDermid’s expert, James Levinsohn, of the amount
Cortron and MacDermid would have agreed Cortron would pay in a
81 Stampf v. Long Island R.R. Co., 761 F.3d 192, 204 (2d Cir. 2014) (brackets and
internal quotation marks omitted).
82 Duncan v. Mill Mgmt. Co. of Greenwich, 60 A.3d 222, 244 (Conn. 2013)
(internal quotation marks omitted); accord Munn v. Hotchkiss Sch., 795 F.3d 324, 335
(2d Cir. 2015).
83 Duncan, 60 A.3d at 244.
33
“hypothetical negotiation” for the right to give DuPont that
information.
Cortron does not challenge Levinsohn’s use of a hypothetical
negotiation to estimate CUTSA damages.84 Rather, Cortron argues
that Levinsohn’s estimate was too speculative to support the jury’s
award. In particular, Cortron argues that, in any hypothetical
negotiation, it would have paid MacDermid “no more than the
amount for which” Cortron could have resold the technical
information to DuPont.85 The record, Cortron maintains, is devoid of
any information suggesting what that amount might have been,
especially since—according to Cortron—DuPont had “no use” for
technical information about existing LAVA machines, which were
inferior to DuPont’s own FAST processors.86 At most, Cortron argues,
DuPont would have paid no more than what it would have cost to
An award based on a “hypothetical negotiation,” also known as a
84
“reasonable royalty,” is common “in both trade secret and patent cases.” Vt.
Microsystems, Inc. v. Autodesk, Inc., 138 F.3d 449, 450 (2d Cir. 1998). Connecticut
courts have not resolved whether this methodology is compatible with CUTSA.
Compare MacDermid, Inc. v. Cookson Grp., PLC, No. X10UWYCV095014518, 2014
WL 7525513, at *6–8 (Conn. Super. Ct. Nov. 21, 2014), with Evans v. Gen. Motors
Corp., No. X06CV940156090S, 2003 WL 21040255 (Conn. Super. Ct. Apr. 22, 2003).
Because Cortron does not suggest otherwise, we assume without deciding that
CUTSA permits a “hypothetical negotiation” methodology.
85 Cortron Br. 63.
86 Id.
34
obtain the information by reverse‐engineering a LAVA processor—a
process that would have cost less than $30,000.87
Under Connecticut law, a jury is entitled to award damages
that are based on an expert’s estimate, especially when that estimate
is based on calculations that have been explained to the jury.88
Although Cortron contested the accuracy and reliability of
Levinsohn’s approach, his estimate was based on evidence in the
record, which the jury had ample opportunity to evaluate. In
particular, Levinsohn testified that MacDermid had spent about $3.8
million to develop the technical information underlying its first
generation of LAVA machines;89 MacDermid’s general manager,
Timothy Gotsick, offered a similar figure.90 That testimony, viewed in
the light most favorable to MacDermid, was sufficient to support a
finding that MacDermid would not have sold its technical
information to Cortron (for resale to DuPont) for less than that
amount, and that the amount therefore reflects what MacDermid and
Cortron would have agreed to in a hypothetical negotiation.
87 Id. at 63–64.
88 See Duncan, 60 A.3d at 245–46; cf. Earlington v. Anastasi, 976 A.2d 689, 698
(Conn. 2009) (holding that the trial court improperly denied remittitur when the
jury awarded damages that were more than 50 percent greater than what the
plaintiff’s expert had calculated).
89 J.A. 589.
90 J.A. 723.
35
We therefore conclude that the District Court did not err, much
less “abuse its discretion,” in allowing the jury’s award to stand.
III. CONCLUSION
To summarize, we hold as follows:
(1) MacDermid failed to prove harm to competition. The
District Court therefore erred in rejecting Cortron’s Rule
50(b) motion for judgment as a matter of law on
MacDermid’s antitrust claims.
a. Under section 1 of the Sherman Act, as well as
corresponding Connecticut law, a plaintiff seeking to
prove an antitrust violation under the so‐called “rule
of reason” must initially show that the challenged
action has adversely affected competition in the
market as a whole.
b. A plaintiff may prove an adverse effect on
competition either directly (by offering evidence of
higher prices, lower output, or reduced quality in the
relevant market) or indirectly (by showing that the
defendant exercised “market power” in the relevant
market, as well as some other ground for believing
that the challenged behavior has harmed
competition).
c. MacDermid has failed to show that Cortron’s actions
harmed competition in the market as a whole.
36
i. MacDermid has not shown that the alleged
Cortron‐DuPont conspiracy affected prices,
output, or quality in the market.
ii. MacDermid has not proved that the alleged
Cortron‐DuPont conspiracy reduced the range
of choices available to consumers or harmed
consumers in any other way.
(2) The District Court did not “abuse its discretion” in
permitting MacDermid to introduce evidence previously
withheld under the attorney‐client privilege and the work‐
product doctrine.
(3) The District Court did not “abuse its discretion” in denying
remittitur or a new trial on damages on MacDermid’s state‐
law claim for misappropriation of trade secrets.
For the foregoing reasons, we REVERSE the judgment of the
District Court insofar as it denied Cortron’s post‐verdict motion for
judgment as a matter of law on MacDermid’s antitrust claims. We
otherwise AFFIRM the judgment of the District Court, leaving
undisturbed the award of damages on MacDermid’s state‐law claims
for misappropriation of trade secrets, unfair trade practices,
computer crimes, and breach of contract. We REMAND the cause to
the District Court to recalculate damages in a manner consistent with
this opinion.
37
MacDermid Printing Solutions LLC v. Cortron Corp.
Court: Court of Appeals for the Second Circuit
Date filed: 2016-08-10
Citations: 833 F.3d 172
Copy CitationsCombined Opinion