USCA1 Opinion
October 11, 1996
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
________________________
No. 96-1113
BORSCHOW HOSPITAL AND MEDICAL SUPPLIES, INC.,
Plaintiff - Appellant,
v.
CESAR CASTILLO, INC., ET AL.,
Defendants - Appellees.
________________________
ERRATA SHEET
ERRATA SHEET
The opinion of this court issued on September 23, 1996 is
corrected as follows:
On page 3, line 9, change Borschow to Becton Dickinson.
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 96-1113
BORSCHOW HOSPITAL AND MEDICAL SUPPLIES, INC.,
Plaintiff - Appellant,
v.
CESAR CASTILLO INC., ET AL.,
Defendants - Appellees.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Salvador E. Casellas, U.S. District Judge]
___________________
____________________
Before
Selya, Circuit Judge,
_____________
Torres* and Saris,** District Judges.
_______________
_____________________
Fernando L. Gallardo, with whom Harry E. Woods, Geoffrey M.
____________________ ______________ ___________
Woods, Woods & Woods and Carlos R. Iguina-Charriz were on brief
_____ _____________ ________________________
for appellant.
Donald R. Ware, with whom Richard M. Brunell and Foley, Hoag
______________ __________________ ___________
& Eliot were on brief for appellee Becton Dickinson and Company.
_______
Edilberto Berr os-P rez and Luis Fern ndez-Ram rez for
________________________ ________________________
appellees C sar Castillo, Inc., Umeco, Inc., Jos Luis Castillo,
Ivonne Belaval de Castillo, C sar Castillo, Jr., Aracelis Ortiz
de Castillo and Mar a Isabel Gonz lez.
____________________
September 23, 1996
____________________
* Of the District of Rhode Island, sitting by designation.
** Of the District of Massachusetts, sitting by designation.
-2-
____________________
-3-
SARIS, District Judge. Plaintiff-Appellant Borschow
SARIS, District Judge.
_______________
Hospital & Medical Supplies, Inc. is a distributor of a line of
medical and surgical products supplied by Defendant-Appellee,
Becton Dickinson and Company, in Puerto Rico. Borschow claims
that Becton Dickinson violated the Puerto Rico Dealers Act, 10
L.P.R.A. 278, also commonly known as "Law 75," by granting
additional distributorships in violation of its allegedly
exclusive Distributorship Agreement.1 Although the
Distributorship Agreement contained a clear non-exclusivity
provision and integration clause, Borschow contends that the
district court erred under Puerto Rico's parol evidence rule when
it excluded an unsigned written memorandum sent prior to the
signing of the agreement as evidence that the parties actually
intended the distributorship to be exclusive.
Borschow also claims that Becton Dickinson engaged in
an unlawful tying arrangement in violation of Section 1 of the
Sherman Act, 15 U.S.C. 1, by threatening to discontinue a
supply of a line of its products (the tying products) unless
Borschow also carried its syringe line (the tied product) and
dropped that of a competitor.
____________________
1 The additional distributorships were granted to Defendants-
Appellees Cesar Castillo, Inc. and UMECO, Inc., which filed a
separate brief. At oral argument, Becton Dickinson argued for
the Appellees as a group. Where we refer to Becton Dickinson in
the course of this opinion, we mean our statements to apply to
Appellees as a group except where otherwise indicated.
Similarly, to avoid confusion where referring to the testimony of
Jonathan Borschow, Borschow's president, we will refer to him as
Mr. Borschow and to the company simply as Borschow.
-2-
The district court granted summary judgment for Becton
Dickinson on both claims. We affirm.
I. STATEMENT OF THE CASE
I. STATEMENT OF THE CASE
A. Facts
A. Facts
Reviewing the factual record in the light most
favorable to the nonmoving party, as we must at summary judgment,
see Mesnick v. General Elec. Co., 950 F.2d 816, 822 (1st Cir.
___ _______ _________________
1991), cert. denied, 504 U.S. 985 (1992), we treat the following
____________
facts as controlling, noting, however, that Bectin Dickinson
disputes many aspects of this account.
A major supplier of medical products in Puerto Rico,
Borschow contracted with Parke Davis & Company ("Parke Davis") on
May 1, 1985 to distribute a line of medical and surgical products
manufactured by its subsidiary, Deseret Medical, Inc. (the
"Deseret Line"). In mid-1986, Becton Dickinson acquired Deseret
and assumed Parke Davis' obligations under the distribution
agreement as an assignee. This dispute turns in large part on
the content of that agreement.
The distribution agreement executed by Borschow and
Parke Davis ["Distribution Agreement"], includes two provisions
of interest here. First, it provides that "Company [i.e., Parke
Davis] hereby appoints Distributor [i.e., Borschow] and the
Distributor hereby accepts appointment, as the Company's
nonexclusive independent distributor of the Products for Regular
____________
Business in the Territory [i.e., Puerto Rico] during the term of
this Agreement." Distribution Agreement, 2.1.2 (emphasis
-3-
3
added). Second, the contract included the following integration
clause:
Integration: The terms and provisions contained
___________
in this Agreement, including all Schedules
attached hereto and Company's Standard Terms and
Conditions of Sale in effect, from time to time,
constitute the entire agreement and is the final
expression of intent between the Parties relating
to the subject matter hereof and supersede, all
previous communications, representations,
agreements, and understandings, either oral or
written, between the Parties with respect to the
subject matter thereof. No agreement or
understanding varying or extending this Agreement
will be binding upon either Party hereto unless in
writing, wherein this Agreement is specifically
referred to, and signed by duly authorized
officers or representatives of the respective
Parties.
Id. 9.10. Borschow's president, Jonathan Borschow, initially
___
refused to sign any contract that included a non-exclusivity
provision. However, in negotiations prior to execution of the
Distribution Agreement, Robert Vallance, Deseret's Regional
Director for Canada/Latin America, assured Mr. Borschow that his
distributorship would be exclusive. Vallance promised him that
he would receive a letter from Parke Davis promising exclusivity.
When that letter was not forthcoming, Mr. Borschow telephoned
Vallance and inquired about the delay. Vallance told Mr.
Borschow that the people in "Morris Plains," the corporate
headquarters of Warner Lambert, Parke Davis' parent company, were
considering the matter.
After that conversation, Mr. Borschow received a draft
of the Distribution Agreement, which included the non-exclusivity
term. He again objected to Vallance but was told that the
-4-
4
"contract cannot, it will not be changed. The people in Morris
Plains will not countenance it." However, Vallance reassured
Mr. Borschow that he would send a document that would outline the
"true" basis for their business relationship, including a promise
that Borschow's distributorship would be exclusive.
Within a matter of days, Mr. Borschow received a two-
page undated and unsigned outline. The outline specifies that
one of the supplier's obligations is to "sell exclusively to the
DISTRIBUTOR and refrain from selling to other DISTRIBUTORS or
clients in the territory while the AGREEMENT is in effect." The
outline neither explicitly mentions Mr. Borschow or Parke Davis
nor refers to the May 1 Distribution Agreement. Borschow
testified that he executed the Distribution Agreement
approximately two weeks after he received the outline.2
From the execution of the agreement in 1985 to 1986,
Borschow remained Parke Davis' exclusive distributor of the
Deseret line. After Becton Dickinson's acquisition of Deseret
in mid-1986, no changes were made in the relationship until
November 1989, when Becton Dickinson granted distributorships to
UMECO, Inc. and C sar Castillo, Inc.
Moreover, according to Borschow and his salespeople, at
approximately the same time that the additional distributors were
____________________
2 At Mr. Borschow's deposition, the parties marked the
Distribution Agreement as BDX-1 and the undated outline as BDX-3,
and throughout its brief Appellant refers to the documents by
those numbers. To avoid confusion, however, the Court will refer
to BDX-1 and BDX-3 as the Distribution Agreement and the Outline,
respectively.
-5-
5
established in November 1989, Becton Dickinson demanded that
Borschow cease distributing the Monoject Syringe & Needle Line,
made by a Becton Dickinson competitor, and begin carrying the
Becton Dickinson syringe line. Becton Dickinson also threatened
that if Borschow did not meet this demand, it would no longer be
supplied with the Deseret line. However, Becton Dickinson did
not carry through on this threat. Although Borschow refused to
drop Monoject, Becton Dickinson continued to supply Deseret
products to Borschow.
B. Proceedings Below
B. Proceedings Below
Borschow brought an action in federal district court
for the District of Puerto Rico on February 6, 1990, alleging
that Becton Dickinson's termination of Borschow's "exclusive"
distributorship violated Law 75 and that Becton Dickinson's
threat to tie the Deseret line to its syringe line violated the
Sherman Act. Borschow also alleged a conspiracy with Castillo
and UMECO in restraint of trade and attempted monopolization.
Federal jurisdiction was invoked on the basis of a federal
question and diversity of citizenship.
On September 24, 1990, the district court permitted
discovery limited to the threshold issue as to whether Borschow's
distributorship was exclusive. On January 15, 1991, Becton
Dickinson moved for summary judgment, asserting that taking these
facts in the light most favorable to Plaintiff, Borschow cannot
evade the effect of its written contract providing for non-
exclusivity. If Borschow's contract was non-exclusive, according
-6-
6
to Becton Dickinson, the Law 75 claim fails as a matter of law.
In addition, Becton Dickinson argued that the outline was
extrinsic evidence of the contracting parties' intent that could
not be considered on summary judgment because of Puerto Rico's
parol evidence rule.
The motion was referred to a magistrate judge, who
issued a report and recommendation denying summary judgment on
the ground that the extrinsic evidence raised issues of fact
regarding whether the agreement provided for exclusivity. The
district court (Acosta, J.) initially adopted the magistrate
judge's recommendation without comment, but on a motion for
reconsideration, the court (Casellas, J.) granted partial summary
judgment for Becton Dickinson.3 The court held that Puerto
Rico's parol evidence rule barred consideration of the outline
and that the contract unambiguously provided for a non-exclusive
distributorship. Borschow Hosp. & Medical Supplies, Inc. v.
__________________________________________
C sar Castillo, Inc., 882 F. Supp. 236, 239-40 (D.P.R. 1995). In
____________________
a subsequent order, the court granted partial summary judgment
for Becton Dickinson on the antitrust claims due to lack of
evidence of tying, anticompetitive injury or conspiracy and
dismissed the pendent state law claims. Borschow timely appealed
the judgment.
II. DISCUSSION
II. DISCUSSION
A. Standard of Review
A. Standard of Review
____________________
3 Judge Acosta took senior status before the motion for
reconsideration, and the case was reassigned to Judge Casellas.
-7-
7
We review a district court's grant of summary judgment
de novo. Werme v. Merrill, 84 F.3d 479, 482 (1st Cir. 1996).
________ _____ _______
The standard is well-rehearsed and familiar. "Summary judgment
is appropriate when 'the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to judgment
as a matter of law.'" Barbour v. Dynamics Research Corp., 63
_______ ________________________
F.3d 32, 36 (1st Cir. 1995) (quoting Fed. R. Civ. P. 56(c)),
cert. denied, __ U.S. __, 116 S. Ct. 914 (1996). "In operation,
____________
summary judgment's role is to pierce the boilerplate of the
pleadings and assay the parties' proof in order to determine
whether trial is actually required." Wynne v. Tufts Univ. School
_____ __________________
of Medicine, 976 F.2d 791, 794 (1st Cir. 1992), cert. denied, 507
___________ ____________
U.S. 1030 (1993). "To succeed, the moving party must show that
there is an absence of evidence to support the nonmoving party's
position." Rogers v. Fair, 902 F.2d 140, 143 (1st Cir. 1990);
______ ____
see also Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).
________ _____________ _______
"Once the moving party has properly supported its
motion for summary judgment, the burden shifts to the non-moving
party, who 'may not rest on mere allegations or denials of his
pleading, but must set forth specific facts showing there is a
genuine issue for trial.'" Barbour, 63 F.3d at 37 (quoting
_______
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256 (1986)).
________ _____________________
"There must be 'sufficient evidence favoring the nonmoving party
for a jury to return a verdict for that party. If the evidence
-8-
8
is merely colorable or is not significantly probative, summary
judgment may be granted.'" Rogers, 902 F.2d at 143 (quoting
______
Anderson, 477 U.S. at 249-50) (citations and footnote in Anderson
________ ________
omitted). We "view the facts in the light most favorable to the
non-moving party, drawing all reasonable inferences in that
party's favor." Barbour, 63 F.3d at 36.
_______
B. The Law 75 Claim
B. The Law 75 Claim
"The legislature of Puerto Rico enacted Law 75 to
protect distributors, agents, concessionaires and representatives
of a product or service in Puerto Rico. . . . [M]ore
specifically, Law 75 was intended to protect dealers who built up
a market, from suppliers who wish to appropriate their
established clientele." Medina & Medina v. Country Pride Foods,
_______________ ____________________
Ltd., 825 F.2d 1, 2 (1st Cir. 1987). "Law 75 provides that,
____
notwithstanding the existence in a dealer's contract of a clause
reserving to the parties the unilateral right to terminate the
existing relationship, no principal or grantor may directly or
indirectly perform any act detrimental to the established
relationship or refuse to renew said contract on its normal
expiration, except for just cause." General Office Prods. Corp.
___________________________
v. Gussco Mfg. Inc., 666 F. Supp. 328, 328 (D.P.R. 1987) (citing
________________
10 L.P.R.A. 278(a)).
Law 75 has proved fertile ground for litigation, and we
recently have had occasion to consider its application to
circumstances analogous to those presented here. Although "non-
exclusive distributors are entitled to protection under Law 75,"
-9-
9
Vulcan Tools of Puerto Rico v. Makita U.S.A., Inc., 23 F.3d 564,
___________________________ ___________________
569 (1st Cir. 1994), "[i]t is equally true . . . that Law 75 does
not operate to convert non-exclusive distribution contracts into
exclusive distribution contracts." Id. (citing Gussco, 666 F.
___ ______
Supp. at 331). As we said in Vulcan Tools, "the 'established
____________
relationship' between dealer and principal is bounded by the
distribution agreement, and therefore the Act only protects
against detriments to contractually acquired rights." Id. at
___
569.
This case turns on whether Borschow and Parke Davis
(now Becton Dickinson) contracted for a non-exclusive or
exclusive distributorship. If the former, Borschow cannot
prevail on its claim that Law 75 prohibits Becton Dickinson from
supplying Deseret medical products to other distributors. See
___
Vulcan Tools, 23 F.3d at 569 (Law 75 did not prevent supplier
____________
from establishing additional distributorships in Puerto Rico
where non-exclusive distributor was already operating even if
existing distributor suffered economic harm as result); Nike
____
Int'l Ltd. v. Athletic Sales, Inc., 689 F. Supp. 1235, 1238-39
___________ _____________________
(D.P.R. 1988) (where distributorship contract between Nike and
distributor provided for notice of renewal from distributor and
distributor failed to provide such notice, Law 75 did not bar
termination of distributorship contract).
As a civil law jurisdiction, Puerto Rico eschews common
law principles of contract interpretation in favor of its own
civil code derived from Spanish law. See Guevara v. Dorsey
___ _______ ______
-10-
10
Labs., Div. of Sandoz, Inc., 845 F.2d 364, 366 (1st Cir. 1988)
____________________________
("The Supreme Court of Puerto Rico has made clear that the common
law of the United States is not controlling when filling gaps in
the civil law system."); Gussco, 666 F. Supp. at 332. Thus, we
______
turn to Civil Code Article 1233, which "determines the manner in
which courts should interpret contracts under dispute as to the
meaning of their terms." Hopgood v. Merrill Lynch, Pierce,
_______ _______________________
Fenner & Smith, 839 F. Supp. 98, 104 (D.P.R. 1993), aff'd, 36
_______________ _____
F.3d 1089 (1st Cir. 1994) (table). Article 1233 provides:
If the terms of a contract are clear and
leave no doubt as to the intentions of the
contracting parties, the literal sense of its
stipulations shall be observed.
If the words should appear contrary to the
evident intention of the contracting parties,
the intention shall prevail.
31 L.P.R.A. 3471 (1991). "Under Puerto Rican law, an agreement
is 'clear' when it can 'be understood in one sense alone, without
leaving any room for doubt, controversies or difference of
interpretation. . . .'" Executive Leasing Corp. v. Banco Popular
_______________________ _____________
de Puerto Rico, 48 F.3d 66, 69 (1st Cir.) (quoting Catullo v.
______________ _______
Metzner, 834 F.2d 1075, 1079 (1st Cir. 1987)) (internal quotation
_______
marks omitted), cert. denied, __ U.S. __, 116 S. Ct. 171 (1995);
____________
see also Heirs of Ram rez v. Superior Court, 81 P.R.R. 347, 351
________ _________________ ______________
(1959).
Citing the Puerto Rico Supreme Court in Marina Ind.,
____________
Inc. v. Brown Boveri Corp., 114 P.R. Dec. 64, 72 (1983) (official
____ __________________
translation), several courts have interpreted Article 1233 to be
"strict in its mandate that courts should enforce the literal
-11-
11
sense of a written contract, unless the words are somehow
contrary to the intent of the parties." Hopgood, 839 F. Supp. at
_______
104; see also Vulcan Tools, 23 F.3d at 567 ("When an agreement
________ _____________
leaves no doubt as to the intention of the parties, a court
should not look beyond the literal terms of the contract.").
This interpretation of Article 1233 is complemented by
Puerto Rico's parol evidence rule, P.R. Laws Ann. tit. 32, App.
IV, R. 69(B) (1983) ("Rule 69(B)"), which provides:
When in an oral or written agreement, either
public or private, all the terms and
conditions constituting the true and final
intention of the parties have been included,
such agreement shall be deemed as complete,
and therefore, there can be between the
parties, or successors in interest, no
evidence extrinsic to the contents of the
same, except in the following cases:
(1) Where a mistake or imperfection of the
agreement is put in issue by the pleadings;
(2) Where the validity of the agreement is
the fact in dispute.
This rule does not exclude other evidence of
the circumstances under which the agreement
was made or to which it is related such as
the situation of the subject matter of the
instrument or that of the parties, or to
establish illegality or fraud.
We have interpreted this rule in tandem with Article 1233 to
require courts "to ignore [parol] evidence 'when the agreement
. . . is clear and unambiguous.'" Mercado-Garc a v. Ponce Fed.
______________ __________
Bank, 979 F.2d 890, 894 (1st Cir. 1992) (quoting Catullo, 834
____ _______
F.2d at 1079).
Recently, we have held that these provisions bar
consideration of extrinsic evidence to vary the express, clear,
and unambiguous terms of a contract. See Executive Leasing
___ _________________
-12-
12
Corp., 48 F.3d at 69-70 (refusing to consider parol evidence
_____
regarding implied loan term barring leasing company from dealing
with other banks where contract did not include restriction but
did include clear integration clause); Vulcan Tools, 23 F.3d at
____________
564-68 (where contractual term providing for "non-exclusive"
distributorship was clear and unambiguous, there was no need to
consider extrinsic evidence of promise to limit number of
distributors even absent contractual integration clause); see
___
also Hopgood, 839 F. Supp. at 103-05 (holding that term
____ _______
"indefinite" used in employment contract clearly signified
employment at will and refusing to consider parol evidence of
implied guarantee of three-year minimum employment).
This line of cases effectively parries the main thrust
of Borschow's appeal. The Distribution Agreement clearly and
unambiguously gives Borschow a "non-exclusive" distributorship.
The integration clause, specifying that the terms and provisions
of this Distribution Agreement constitute the "entire agreement"
and "the final expression of intent," nullifies any other oral or
written understandings reached between the parties. Crediting
Mr. Borschow's testimony that he received the outline from
Vallance promising an exclusive distributorship, as we must on
summary judgment, we hold that the integration clause rendered
inoperative any such side-agreement, and we are barred from
considering the extrinsic evidence by Rule 69(B).
Borschow attempts to evade the effect of this settled
precedent by arguing that the entire agreement, properly
-13-
13
construed, includes both the Distribution Agreement and the
Outline. Because the documents contain mutually inconsistent
terms, Borschow contends that Article 1233 of Puerto Rico's Civil
Code permits liberal consideration of extrinsic evidence as to
the parties' intent to resolve contractual ambiguity. To some
extent, Borschow's reliance on this Civil Code principle finds
some support in Puerto Rico case law. The Puerto Rico Supreme
Court has held that:
The intention of the parties is the essential
test provided in the Civil Code to fix the
scope of contractual obligations. This test
of intention is so essential in the
interpretation of contracts that the Code
proclaims its supremacy in providing that the
evident intention of the parties shall
prevail over the words, even where the latter
would appear contrary to the intention . . .
.
Merle v. West Bend, 97 P.R.R. 392, 399 (1969). However, that
_____ __________
court subsequently clarified that "[t]he strict mandate of the
cited art. 1233 obliges us to abide by the literal meaning of the
terms of the contract when, as in the present case, they leave no
doubt as to the intention of the contracting parties." Marina
______
Ind. Inc. v. Brown Boveri Corp., 114 P.R. Dec. 64 (1983)
__________ ____________________
(official translation).
In rejecting essentially the same argument now made by
Borschow, we applied this principle in Executive Leasing Corp.:
_______________________
The plaintiffs concede the loan agreement is
clear. They argue, however, that the written
agreement was not in fact the entire
agreement, and that we must consider
extrinsic evidence of the parties' intent
with respect to integration. . . . Yet to
consider extrinsic evidence at all, the court
-14-
14
must first find the relevant terms of the
agreement unclear. That requirement not
being met, the district court correctly went
no further.
48 F.3d at 69 (excluding extrinsic evidence of exclusive dealing
condition and of "actual practice" of parties); accord Hopgood,
______ _______
839 F. Supp. at 106 (explaining that Marina and Merle support
______ _____
principle that under Article 1233 the clear terms of the contract
are the "embodiment of the indisputable intent of the parties as
they entered into the contract").
For the third time, we mean what we say, and say what
we mean: extrinsic evidence of the parties' intent is
inadmissible in the face of a clear and unambiguous contract term
under Puerto Rico Law. Because Borschow's distributorship was
non-exclusive as a matter of law, the district court properly
granted summary judgment for Appellees on the Law 75 claim.4
C. Antitrust Claim -- Tying Arrangement
C. Antitrust Claim -- Tying Arrangement
Asserting a per se violation of Section One of the
_______
Sherman Act, Borschow contends that Becton Dickinson threatened
to withhold sale of its patented Deseret line of medical products
(the tying product) unless Borschow dropped the Monoject product
____________________
4 While the Puerto Rico parol evidence rule permits extrinsic
evidence to establish fraud, Borschow does not allege that it was
fraudulently induced into signing the Distribution Agreement.
Nor is a claim of equitable estoppel properly before us.
Borschow contends for the first time on appeal that Becton
Dickinson should be estopped from denying the existence of an
exclusive contract because of the conduct of its agent, Vallance.
As this argument was not made below, it is waived. Executive
_________
Leasing Corp., 48 F.3d at 70.
_____________
-15-
15
and carried instead its own syringe line (the tied product).5
Contending that this is "the case of the tie that didn't bind,"
Becton Dickinson argues that a threat alone is insufficient to
constitute an illegal tying arrangement. We agree.
"Section 1 of the Sherman Act prohibits a seller from
'tying' the sale of one product to the purchase of a second
product if the seller thereby avoids competition on the merits of
the 'tied' product. See 15 U.S.C. 1 ('Every contract . . . in
___
restraint of trade or commerce . . . is declared to be
illegal.')" Data General Corp. v. Grumman Systems Support Corp.,
__________________ _____________________________
36 F.3d 1147, 1178 (1st Cir. 1994). "There are essentially four
elements to a per se tying claim: (1) the tying and the tied
______
products are actually two distinct products; (2) there is an
agreement or condition, express or implied, that establishes a
tie; (3) the entity accused of tying has sufficient economic
power in the market for the tying product to distort consumers'
choices with respect to the tied product; and (4) the tie
forecloses a substantial amount of commerce in the market for the
tied product." Id. at 1178-79.6
___
____________________
5 See Amended Verified Complaint 28-29. Plaintiff also
asserts a claim under the Clayton Act, 3, that we need not
separately address. See Grappone , Inc. v. Subaru of New
___ _________________ ______________
England, Inc., 858 F.2d 792, 793 (1988) (pointing out that
_____________
essential elements of unlawful tying arrangement are same for
alleged violations of Sherman Act 1 or Clayton Act 3). In
addition, Borschow conceded at oral argument that our holding
that the Distribution Agreement was non-exclusive would foreclose
relief on all of its antitrust claims except its tying claim.
6 Borschow does not articulate a "rule of reason" theory of
tying liability. Although the amended verified complaint
contains conclusory allegations that Becton Dickinson's conduct
-16-
16
The fatal flaw in Borschow's tying claim is that Becton
Dickinson never withheld its Deseret line. Although Borschow has
adduced evidence of various threats by Becton Dickinson, it is
undisputed that these threats were not carried out. Permitted to
carry both the Deseret line and the Monoject line, Borschow was
never injured by the threat. See Wells Real Estate, Inc. v.
___ ________________________
Greater Lowell Board of Realtors, 850 F.2d 803, 814 (1st Cir.)
_________________________________
(holding that plaintiff must have been injured by anticompetitive
act to have standing under antitrust laws), cert. denied, 488
_____________
U.S. 955 (1988).
As a result, the second key element discussed above --
evidence of a tie -- is missing:
[T]he essential characteristic of an invalid
tying arrangement lies in the seller's
exploitation of its control over the tying
product to force the buyer into the purchase
of a tied product that the buyer either did
not want at all, or might have preferred to
purchase elsewhere on different terms. When
such "forcing" is present, competition on the
merits in the market for the tied item is
restrained and the Sherman Act is violated.
Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 12
_____________________________________ ____
(1984); see also T. Harris Young & Assoc., Inc. v. Marquette
________ ________________________________ _________
____________________
generally had an adverse effect on competition, there is no
evidence in the record to support the allegation that the threats
of tying had such an adverse impact, or to provide a basis for
providing further discovery pursuant to Fed. R. Civ. P. 56(f).
See Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 29-31
___ __________________________________ ____
(1984) (noting that in absence of per se liability, antitrust
______
plaintiff must prove that defendant's conduct had an "actual
adverse effect on competition"); R.W. International Corp. v.
__________________________
Welch Food, Inc., 13 F.3d 478, 487-88 (1st Cir. 1994) (rejecting
_________________
request for further discovery despite conclusory allegations of
antitrust injury where plaintiff distributors were in same
position as defendant to ascertain effect of conduct at issue).
-17-
17
Electronics, Inc., 931 F.2d 816, 822-23 (11th Cir.) ("[F]or a tie
_________________
to exist a seller must withhold product A unless the buyer also
selects product B. Only after the existence of a tie is shown is
it necessary to determine whether an illegal tying arrangement
exists.") (footnote omitted), cert. denied, 502 U.S. 1013 (1991);
____________
CIA Petrolera Caribe, Inc. v. Avis Rental Car Corp., 576 F. Supp.
__________________________ _____________________
1011, 1016 (D.P.R. 1983) ("Coercion is an essential element of
any tying arrangement, i.e., forcing the purchaser or lessor to
take the unwanted tied product along with the tying product."),
aff'd, 735 F.2d 636 (1st Cir. 1984).
_____
Where a tying product has not been withheld, there is
no tie. "There is no tie for any antitrust purpose unless the
defendant improperly imposes conditions that explicitly or
practically require buyers to take the second product if they
want the first one." 10 Phillip E. Areeda et al., Antitrust Law:
______________
An Analysis of Antitrust Principles and their Application
______________________________________________________________
1752b, at 280 (1996). Thus we hold that there is no genuine
issue of material fact with respect to Borschow's tying claim.7
III. CONCLUSION
III. CONCLUSION
For the foregoing reasons, the district court's grant
of summary judgment is AFFIRMED.
AFFIRMED
____________________
7 This holding also disposes of Borschow's discovery claim.
Borschow contends that the district court abused its discretion
by refusing to allow further discovery. However, no amount of
discovery would uncover evidence of a non-existent tie.
-18-
18