Datagate, Inc., a Corporation v. Hewlett-Packard Co., a Corporation

941 F.2d 864, 91 Daily Journal DAR 9599, 91 Cal. Daily Op. Serv. 6418, 1991 U.S. App. LEXIS 17797, 1991 WL 146976
CourtCourt of Appeals for the Ninth Circuit
DecidedAugust 7, 1991
Docket88-15293
StatusPublished
Cited by75 cases

This text of 941 F.2d 864 (Datagate, Inc., a Corporation v. Hewlett-Packard Co., a Corporation) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Datagate, Inc., a Corporation v. Hewlett-Packard Co., a Corporation, 941 F.2d 864, 91 Daily Journal DAR 9599, 91 Cal. Daily Op. Serv. 6418, 1991 U.S. App. LEXIS 17797, 1991 WL 146976 (9th Cir. 1991).

Opinion

BEEZER, Circuit Judge:

Datagate, Inc. (“Datagate”) appeals the district court’s order granting summary judgment for defendant Hewlett-Packard Company (“HP”) and denying Datagate’s motion for disqualification of the district judge in an underlying action in which Da-tagate brought claims against HP for violation of the Sherman Antitrust Act. We reverse the district court’s judgment with respect to Datagate’s claim for injunctive relief and remand for a determination of whether Datagate has shown a “threatened loss or damage by a violation of the antitrust laws.” We also reverse and remand with respect to the dismissal of Datagate’s pleading of an illegal tie-in. We affirm the district court’s judgment on all other counts.

I

Datagate is one of approximately ten independent service organizations (“ISOs”) that provide service and repair for Hewlett-Packard computer hardware. In addition to manufacturing and selling this equipment, HP also competes with the ISOs for the service and repair business. The parties agree that HP cooperated with the ISOs between 1978, when Datagate was formed, and 1983 by supplying the parts, service, and information required by the ISOs. Datagate alleges, however, that beginning in 1983 HP initiated a plan of unfair competitive practices in violation of section two of the Sherman Antitrust Act. These alleged practices include restricting ISO access to parts, service and information formerly provided by HP, using its new “ISO policy” as a sales tool to dissuade customers from contracting with ISOs, and making disparaging remarks to customers about Datagate.

Datagate filed suit on January 10, 1986 seeking treble damages under section four of the Clayton Act based on HP’s alleged violation of section two of the Sherman Antitrust Act for monopolization and attempted monopolization, as well as use of an illegal tie-in. Additionally, Datagate sought injunctive relief under section 16 of the Clayton Act, and other relief pursuant to its pendent state law claims.

On September 22, 1986, the district court dismissed Datagate’s illegal tie-in claim on the grounds that Datagate failed to allege sufficient facts to show “coercion” or injury to competition. On August 31,1987, the court granted partial summary judgment on the Sherman Act section two claims, ruling that Datagate failed to raise a triable issue of fact as to whether HP’s conduct had harmed competition by injuring existing ISOs. However, the court further ruled that there were triable issues of fact regarding the definition of the relevant market and injury to competition due to the chilling effect of HP’s conduct on potential competition from new entrants into the ISO market. The parties each filed motions for reconsideration of the summary judgment ruling. In support of its motion, Datagate *867 submitted evidence of injury to existing competition resulting from HP’s change in its “four-hour response” service policy as of August 1, 1987. Under its new policy, HP will no longer provide such service to users who hired ISOs to provide the primary maintenance for their hardware.

The court construed HP’s motion for reconsideration as a new motion for summary judgment on antitrust standing grounds. It apparently construed Data-gate’s as a motion to amend the complaint to add facts relating to HP’s new four-hour response service policy. After additional briefing, on July 11,1988, the district court granted summary judgment to HP on the grounds that as an existing competitor Da-tagate lacked standing to sue based on injury to potential competition. The court further ruled that, although Datagate had raised a triable issue of fact with respect to injury to competition resulting from HP’s new “four-hour response” service policy, it had failed to show any injury to itself as a result of the policy. Therefore, Datagate lacked standing to sue on that issue as well. The district court granted summary judgment against Datagate on all federal antitrust claims, and dismissed all pendant state law claims for lack of subject matter jurisdiction.

Following entry of the judgment, Data-gate moved to disqualify Judge Aguilar and set aside the judgment based on his son’s employment with HP. On August 11, 1988, the court denied the disqualification motion. Notice of appeal was filed on September 9, 1988.

II

We review a grant of summary judgment de novo. Christofferson Dairy, Inc. v. MMM Sales, Inc., 849 F.2d 1168, 1171 (9th Cir.1988). We must determine, viewing the evidence in the light most favorable to the nonmoving party, whether there are genuine issues of material fact and whether the district court correctly applied the relevant substantive law. Ashton v. Cory, 780 F.2d 816, 818 (9th Cir.1986). “Although summary judgment generally is disfavored in antitrust litigation, it is appropriate when the nonmoving party does not show any issues of material fact and does not present an adequate record to support a finding in his favor.” Christofferson Dairy, 849 F.2d at 1171.

Section four of the Clayton Act provides in part: “[a]ny person who is injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor....” 15 U.S.C. § 15 (1988). The Supreme Court has interpreted this section to require a showing of antitrust injury. See, e.g., Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97 S.Ct. 690, 697-98, 50 L.Ed.2d 701 (1977). The Court described antitrust injury as

injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants’ acts unlawful. The injury should reflect the anticompetitive effect either of the violation or of anticompetitive acts made possible by the violation. It should, in short, be ‘the type of loss that the claimed violations ... would be likely to cause.’

Id. (quoting Zenith Radio Corp. v. Hazeltine Research, 395 U.S. 100, 125, 89 S.Ct. 1562, 1577-78, 23 L.Ed.2d 129 (1969)). In following Brunswick, we have held that

[§ 4 of the Clayton Act] confers standing to sue only upon those persons causally injured by antitrust violations.... Moreover, in order to prevail the plaintiff must prove not only injury causally linked to the asserted violation, but also that the injury is of the type the antitrust laws were intended to prevent.... Accordingly, the plaintiff must demonstrate that the defendant’s conduct was intended to or did have some anticompeti-tive effect beyond his own loss of business or the market’s loss of a competitor.

Cal. Computer Products v. International Business Machines, 613 F.2d 727, 732 (9th Cir.1979) (citations omitted). Our recent decision in Image Technical Service v. Kodak, 903 F.2d 612 (9th Cir.1990), is not inconsistent.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Makanani v. Wagutsuma
D. Hawaii, 2019
Staunton v. Harrington
D. Hawaii, 2019
Qadeer Azam v. Jerry Brown
714 F. App'x 663 (Ninth Circuit, 2017)
National Abortion Federation v. Center for Medical Progress
257 F. Supp. 3d 1084 (N.D. California, 2017)
Buccaneer Energy (USA) Inc. v. Gunnison Energy Corp.
846 F.3d 1297 (Tenth Circuit, 2017)
Lomas, R. v. Kravitz, J.
130 A.3d 107 (Superior Court of Pennsylvania, 2015)
Chesapeake Appalachia, L.L.C. v. Scout Petroleum, LLC
73 F. Supp. 3d 488 (M.D. Pennsylvania, 2014)
In re Byers
509 B.R. 577 (S.D. Ohio, 2014)
In re Disqualification of McKay
2013 Ohio 1461 (Ohio Supreme Court, 2013)
Tanesha Blye v. Alex Kozinski
466 F. App'x 650 (Ninth Circuit, 2012)
Sataki v. Broadcasting Board of Governors
733 F. Supp. 2d 54 (District of Columbia, 2010)
South Fork Band v. United States Department of Interior
643 F. Supp. 2d 1192 (D. Nevada, 2009)
Theme Promotions v. News America Marketing FSI
539 F.3d 1046 (Ninth Circuit, 2008)

Cite This Page — Counsel Stack

Bluebook (online)
941 F.2d 864, 91 Daily Journal DAR 9599, 91 Cal. Daily Op. Serv. 6418, 1991 U.S. App. LEXIS 17797, 1991 WL 146976, Counsel Stack Legal Research, https://law.counselstack.com/opinion/datagate-inc-a-corporation-v-hewlett-packard-co-a-corporation-ca9-1991.