EBEL, Circuit Judge.
After working in the aluminum industry for years, Michael Champagne struck out on his own and formed Champagne Metals ("Champagne"), an aluminum distributor (or "service center"). Service centers operate as middlemen in the industry, buying aluminum from mills and selling that aluminum to end users. Claiming that there exists an understanding in the industry to exclude new competitors, Champagne brought suit against a slew of older, more established service centers alleging violations of federal and state antitrust laws and unlawful interference with business relationships. After extensive briefing, the district court excluded Champagne's economic expert, granted summary judgment for the defendants on all claims, and awarded costs to the defendants. Champagne challenges all three rulings on appeal. We find that the district court did not abuse its discretion in excluding Champagne's expert witness and therefore AFFIRM the district court's order on that issue. However, we disagree with portions of the district court's rulings as to the federal and state law claims and thus AFFIRM in part and REVERSE in part the district court's grant of summary judgment. Finally, as we are reversing the grant of summary judgment, we VACATE the district court's award of costs.
Defendants-Appellees Ken-Mac Metals, Samuel, Son & Co., Samuel Specialty Metals, Metalwest, Integris Metals, Earle M. Jorgensen Co., and Ryerson Tull (collectively, the "Established Distributors") are all service centers in the aluminum industry, as is Champagne. Service centers compete both with other service centers and with mills for sales to end users; indeed, over half of sales to end users are made by the mills directly. In the region in which Champagne and the Established Distributors operate—an area encompassing Colorado, Kansas, Missouri, Illinois, New Mexico, Texas, Arkansas, and Louisiana—there are approximately forty service centers. Champagne contends that not all service centers compete on the same aluminum products and that only the Established Distributors are its day-to-day competitors.
There are six "leading" mills in North America: Alcan Aluminum Corporation; Alcoa, Inc.; Commonwealth Industries, Inc.; Kaiser Aluminum Corporation; Ormet Corporation; and Pechiney. These mills each specialize in one or more of five different types of aluminum: mill finish common alloy aluminum, heat-treated aluminum, common alloy tread, common alloy painted aluminum, and aluminum roof. The leading mills have select distribution systems—they specifically designate one or more service centers as "recognized distributors" through whom they sell their products.
Champagne was founded in 1996 by Michael Champagne, a former employee of Earle M. Jorgensen Co. Champagne's planned customer base was the horse trailer manufacturing industry, an industry with which Champagne's founder had well-established relationships and that Jorgensen was beginning to de-emphasize. Of the five types of aluminum produced by the mills, three are key to Champagne's business—tread, painted, and roof coil. As the aluminum products are not readily exchangeable, and because end users often prefer specific mills, Champagne contends that access to more than one mill is critical if it is to be able to compete effectively.
Commonwealth recognized Champagne as a distributor a few months after Champagne's founding, but did not always offer the same pricing rebates to Champagne as it offered to its other recognized distributors.
Champagne contends that the difficulties in establishing relationships with mills and in acquiring the necessary aluminum products stem from a conspiracy among the Established Distributors. Specifically, Champagne claims that the Established
In 2002, Champagne filed a complaint with the district court, alleging that the Established Distributors engaged in a horizontal group boycott in violation of Section 1 of the Sherman Antitrust Act, 15 U.S.C. § 1, unreasonably restrained trade in violation of the Oklahoma Antitrust Reform Act, Okla. Stat. tit. 79, § 203, and maliciously and wrongfully interfered with Champagne's business and contractual relationships. After substantial briefing, the Established Distributors moved for summary judgment, which the district court granted on all claims. In a separate order issued the same day, the district court also excluded the report and testimony of Champagne's economic expert.
The Established Distributors then filed motions to recover certain costs, including copying and imaging costs. After a hearing, the clerk of court awarded substantial copying and imaging costs to the Established Distributors, although the awards were less than requested. Champagne moved for the district court to review the costs awards, arguing that the Established Distributors had not met their statutory burden to show that the documents copied and imaged were "necessarily obtained" and that the imaging of certain documents was duplicative. The district court ruled that the clerk's "rule of thumb" that copying costs contracted to an outside vendor were recoverable while internally generated costs were not was reasonable and that the cost of imaging documents produced during discovery was recoverable.
Champagne timely appealed the district court's rulings on both the merits and on costs.
We review the grant of a motion for summary judgment de novo, applying the same legal standard as the district court. See, e.g., Welding v. Bios Corp., 353 F.3d 1214, 1217 (10th Cir.2004). "[S]ummary judgment is proper `if 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 a judgment as a matter of law.'" Id. (quoting Fed.R.Civ.P. 56(c)). "When applying this standard, we `construe all facts and reasonable inferences in a light most favorable to the nonmoving party.'" Id. (quoting Pub. Serv. Co. of Colo. v. Cont'l Cas. Co., 26 F.3d 1508, 1513 (10th Cir.1994)) (alteration omitted).
I. Threshold Evidentiary Issues
Before turning to the merits of this appeal, we consider two evidentiary issues: whether the district court's exclusion of the report and testimony of Champagne's economic expert, Dr. Donald Murry, was proper; and whether the district court erred in excluding certain statements of representatives of the mills as hearsay.
A. Exclusion of Champagne's Economic Expert
The court excluded Dr. Murry's report and testimony on the grounds that his opinions failed to meet the reliability standards of Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). "Admission at trial of expert testimony is governed by Fed.R.Evid. 702, which imposes on the district court a gatekeeper function to `ensure that any and all scientific testimony or evidence admitted is not only relevant, but reliable.'" United States v. Gabaldon, 389 F.3d 1090, 1098 (10th Cir.2004) (quoting Daubert, 509 U.S. at 589, 113 S.Ct. 2786).
"We review de novo the question of whether the district court applied the proper legal test in admitting an expert's testimony." Id. at 1223. However, "[t]he district court's decision to admit or exclude expert testimony under the Daubert standard is reviewed on appeal for abuse of discretion." Gabaldon, 389 F.3d at 1098. The court enjoys broad discretion in its ultimate determination of the reliability of an expert; "[w]e will not overturn the trial court's ruling on admissibility unless it is arbitrary, capricious, whimsical or manifestly unreasonable or when we are convinced that the district court made a clear error of judgment or exceeded the bounds of permissible choice in the circumstances." Id. (quotations omitted). The district court plainly applied the correct legal test, thus we are faced only with the question of whether it abused its discretion in excluding Dr. Murry.
As the district court noted, there are two markets in which service centers participate: the "upstream" market, which involves sales of coils of aluminum by mills to service centers; and the "downstream" market, which involves sales of flat-rolled, processed and cut aluminum by service centers to end users. Champagne alleges that the Established Distributors' anticompetitive conduct occurred in the upstream market, and asserted in its complaint that it believed the Established Distributors had "substantial market power" in this market. Indeed, this was the testimony of Dr. Murry, who opined that the Established Distributors had sufficient market power in the upstream market such that a threat by these service centers to shift their purchasing of aluminum away from a mill "represents a credible threat." The problem that the district court identified is that Dr. Murry's testimony is predicated entirely on evidence of the Established Distributors' sales and market share in the downstream market. In other words, although Dr. Murry's opinion discussed the upstream market, the data on which his opinion is based was drawn from the downstream market. The district court found that Dr. Murry offered no "plausible explanation, based on sound economic theory," to support substituting one market for the other.
On appeal, Champagne argues that the district court "misconstrued Dr. Murry's analysis and opinion." Specifically, Champagne claims that it was reasonable for Dr. Murry to use downstream market share as an indicator of upstream market share as "it is reasonable for an economist to conclude, based on experience and what has been confirmed to him about the role of service centers, that any given distributor will sell downstream what it purchased upstream." However, the district court's criticism was not that the explanation offered by Dr. Murry for looking to the downstream market was unreasonable, but rather that Dr. Murry offered no explanation at all. Champagne points to no evidence in the record to support its claim that Dr. Murry actually concluded that the market shares in both markets were reasonably similar, nor does Dr. Murry's report contain such an explanation. While it may be reasonable for an economist to determine that certain markets are interchangeable, we agree with the district court that, here, this explanation "is solely the argument of counsel." In light of this, we cannot conclude that the district court's decision to exclude Dr. Murry's testimony was "arbitrary, capricious, whimsical or manifestly unreasonable." Id.; cf. Koken v. Black & Veatch Constr., Inc., 426 F.3d 39, 47 (1st Cir.2005) (not an abuse of discretion
B. Exclusion of Statements of Mill Representatives
Champagne also argues that the district court erred by excluding statements
In its briefs to the district court, Champagne argued that statements of both the Established Distributors and the mill representatives should be admitted under this exception. However, at the outset of its order, and without reference to the co-conspirator exception, the district court ruled that transcribed conversations and non-deposition statements of mill representatives were hearsay and would only be considered "for the non-hearsay purpose of showing the state of mind of mill decision makers" under Fed.R.Evid. 803(3).
In United States v. Lopez-Gutierrez, 83 F.3d 1235 (10th Cir.1996), we explained the process by which a district court should determine the admissibility of alleged co-conspirator hearsay evidence: "[t]he court must determine by a preponderance of the evidence that: (1) a conspiracy existed; (2) the declarant and the defendant were members of the conspiracy; and (3) the hearsay statements were made in the course of and in furtherance of the conspiracy." Id. at 1242. We further noted that, "[i]n making its preliminary factual determination as to whether a conspiracy exists, the court may consider the hearsay statement sought to be admitted, along with independent evidence tending to establish the conspiracy." Id.
Here, the district court failed to make a "preliminary factual determination" as to whether a conspiracy existed among the Established Distributors and the mills, as required by Lopez-Gutierrez.
II. Federal Antitrust Claim
The essence of a claim of violation of Section 1 of the Sherman Act is the agreement itself. See, e.g., Summit Health, Ltd. v. Pinhas, 500 U.S. 322, 330, 111 S.Ct. 1842, 114 L.Ed.2d 366 (1991). "Only after an agreement is established will a court consider whether the agreement constituted an unreasonable restraint of trade." AD/SAT, Div. of Skylight, Inc. v. Associated Press, 181 F.3d 216, 232 (2d Cir.1999); see also Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 761, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984) ("Section 1 of the Sherman Act requires that there be a `contract, combination . . . or conspiracy' . . . in order to establish a violation. Independent action is not proscribed.") (citation omitted). Thus, "to survive [a] motion for summary judgment, the plaintiff must first demonstrate the existence of an agreement, whether by direct or by circumstantial evidence." Mitchael v. Intracorp, Inc., 179 F.3d 847, 856-57 (10th Cir.1999).
A. Evidence of an Agreement
Champagne attempted to show that a conspiracy existed through both direct and indirect evidence. In granting the Established Distributors' motions for summary judgment, the district court ruled that none of Champagne's proffered evidence was sufficient to demonstrate a conspiracy. It found that none of the statements offered as direct evidence clearly indicated an agreement and, thus, that a jury could not reasonably find a conspiracy based on the statements alone. Then, after noting that the range of permissible inferences that may be drawn from circumstantial evidence "will depend on the plausibility of a plaintiff's economic theory," and after finding that Champagne's theory of collusion was, at best, plausible but weak, the district court concluded that the evidence did not tend to support concerted action.
As we conclude that Champagne did adduce direct evidence of a conspiracy, and as we find that the district court erred in its analysis of the plausibility of Champagne's economic theory and thus erred in its consideration of Champagne's circumstantial evidence, we reverse the decision of the district court on Champagne's federal antitrust claim.
1. Direct Evidence
Champagne offered three statements made by various representatives of the Established Distributors as direct evidence of a conspiracy. On appeal, Champagne focuses primarily on a statement by Phil Wiley of AFCO, Ryerson's predecessor, to Matt Zundel, a Commonwealth employee.
(Emphases added.) We agree with Champagne that this statement is direct evidence of collusive action.
"Direct evidence in a Section 1 conspiracy must be evidence that is explicit and requires no inferences to establish the proposition or conclusion being asserted. . . . [W]ith direct evidence the fact finder is not required to make inferences to establish facts." In re Baby Food Antitrust Litig., 166 F.3d at 118 (quotations omitted). Here, the statement is explicit—Wiley claimed that "himself and other potential customers . . . would cause other" service centers to remove their business
Our conclusion that Champagne has adduced some direct evidence, however, does not mean that Champagne has necessarily shown the existence of a genuine issue of fact, sufficient to survive summary judgment, as to whether the Established Distributors entered into an illegal agreement. Although "[t]he burden of showing the absence of a genuine issue of material fact . . . is upon the movant," Palladium Music, Inc. v. EatSleepMusic, Inc., 398 F.3d 1193, 1196 (10th Cir.2005), the nonmovant "`must do more than simply show that there is some metaphysical doubt as to the material facts.'" Id. (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)). Therefore, summary judgment is appropriate unless the nonmoving party "`make[s] a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.'" Id. (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)). The nonmovant makes this showing only by presenting "facts such that a reasonable jury could find in [its] favor." Garrison v. Gambro, Inc., 428 F.3d 933, 935 (10th Cir. 2005) (quoting Simms v. Okla. ex rel. Dep't of Mental Health & Substance Abuse Servs., 165 F.3d 1321, 1326 (10th Cir. 1999)). Wiley's statement, alone, does not meet this burden. For example, it does not indicate which, if any, of the Established Distributors were among the "other customers" which were part of the agreement. Where, as here, a plaintiff adduces only weak direct evidence, which by itself is insufficient to defeat summary judgment, additional circumstantial evidence is required to overcome a motion for summary judgment. See Rossi, 156 F.3d at 469 (noting that plaintiff's direct evidence of an agreement was not enough to survive summary judgment and looking to circumstantial evidence as well).
2. Circumstantial Evidence
Champagne argues that the district court erroneously devalued its circumstantial evidence by concluding that the economic theory underlying Champagne's claim made little to no economic sense.
The district court began by noting that the range of inferences that can be drawn from circumstantial evidence varies with the strength of the proffered economic theory—the more economically rational a conspiracy is in a given situation, the broader the range of inferences than can be drawn from the evidence. This maxim is undoubtedly true when a plaintiff makes out a case based only on circumstantial
The more difficult question, we think— and a question that the parties do not squarely address—is whether, when direct evidence has been introduced, we must still evaluate the economic rationality of the alleged conspiracy when considering the accompanying circumstantial evidence. Some courts have held that economic rationality is inapplicable in a case with direct and circumstantial evidence. See Rossi, 156 F.3d at 466 ("[T]he Matsushita standard only applies when the plaintiff has failed to put forth direct evidence of conspiracy."); In re Coordinated Pretrial Proceedings in Petroleum Products Antitrust Litigation, 906 F.2d 432, 441 (9th Cir.1990) ("[T]he Matsushita standards do not apply when the plaintiff has offered direct evidence of conspiracy."); see also II Areeda & Hovenkamp 104 ("[S]everal courts have indicated that Matsushita standards do not apply when the plaintiff has offered direct evidence of conspiracy.") (quotations omitted).
Given that the parties do not brief this issue on appeal, and given our conclusion, below, that the alleged conspiracy is economically rational such that restrictions on the inferences drawn from Champagne's circumstantial evidence are not warranted, we do not decide whether Champagne's weak direct evidence suffices by itself to remove this case from the Matsushita framework.
The district court determined that Champagne's economic theory was, at best, "plausible but weak," and that therefore the range of permissible inferences to be drawn from the circumstantial evidence was limited.
As we have explained,
Mitchael, 179 F.3d at 858 (alterations, citations, quotations omitted).
Below, the Established Distributors argued that they had no motive to engage in a group boycott because they did not have the power to raise prices or decrease output. Champagne countered that the Established Distributors were not boycotting
The district court expressed considerable doubt about Champagne's theory. It noted that, although Champagne alleged that the boycott was to preserve the market and price structure of the industry, Champagne did not claim that there was any separate price-fixing or market-allocation agreement,
We disagree with the district court. The gravamen of Champagne's theory is that the Established Distributors acted together to attempt to keep a new, aggressive entrant out of the market. There are several reasons why such behavior would be economically rational. For example, the established market participants could fear that an additional competitor would erode the profit margin available to the service centers. Or the established market participants might fear losing market share to the new market entrant, particularly an aggressive new entrant like Champagne. As one commentator has observed, "[w]here the `victim' [of an exclusionary group boycott] is a competitor of the alleged conspirators, there is no mystery as to why the defendants would want to injure the rival. It is axiomatic that firms prefer to have fewer rather than more rivals." Glazer, supra, at 14.
Such is the case here. Champagne introduced evidence that the Established Distributors saw Champagne as a price-cutting competitor who threatened their market share and profit margins.
Simply put, Champagne's theory makes sense—it is certainly economically rational for a group of established firms to attempt to keep an aggressive competitor out of the market, whether they are doing so to protect profits or simply to guard market share. In light of this, the district court erred in drawing such limited inferences from Champagne's circumstantial evidence.
* * * * * *
Champagne's direct evidence of an agreement among the Established Distributors, combined with the district court's undue devaluation of the inferences to be drawn from Champagne's circumstantial evidence, compels us to conclude that the district court erred in granting summary judgment for the Established Distributors. However, particularly given our earlier conclusion that the district court may have erred in excluding the statements of mill representatives (statements which Champagne contends are additional circumstantial evidence of concerted action among the Established Distributors), we will not undertake to evaluate the circumstantial evidence and draw inferences ourselves. We therefore leave it to the district court to determine, on remand, whether the circumstantial evidence, viewed through the lens of a highly plausible economic theory, and combined with Champagne's direct evidence, creates a genuine issue of material fact as to the existence of a conspiracy.
B. Statute of Limitations
As an alternative ground for affirming the district court's grant of summary judgment, the Established Distributors argue that Champagne's antitrust claims were brought outside of the applicable statute of limitations and are thus time barred. The district court did not address the Established Distributors' statute of limitations defense in granting their motions for summary judgment. However, "`we have discretion to affirm on any ground adequately supported by the record,' so long as the parties have had a fair opportunity to address that ground." Maldonado v. City of Altus, 433 F.3d 1294, 1302-03 (10th Cir.2006) (quoting Elkins v. Comfort, 392 F.3d 1159, 1162 (10th Cir. 2004)). Thus, we will address this alternative claim for affirmance advanced by the Established Distributors.
In general, "[t]he statute of limitations for federal antitrust actions is four years." Kaw Valley Elec. Coop. Co. v. Kan. Elec. Power Coop., Inc., 872 F.2d 931, 933 (10th Cir.1989) (citing Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 338, 91 S.Ct. 795, 28 L.Ed.2d 77 (1971)); see also 15 U.S.C. § 15b. However, courts have recognized a "continuing conspiracy" exception to this rule:
Kaw Valley, 872 F.2d at 933 (quoting Zenith Radio, 401 U.S. at 338, 91 S.Ct. 795). In other words, for an act to trigger the exception: "`1) It must be a new and independent act that is not merely a reaffirmation of a previous act; and 2) it must inflict new and accumulating injury on the plaintiff.'" Id. (quoting Pace Indus., Inc. v. Three Phoenix Co., 813 F.2d 234, 238 (9th Cir.1987)).
Champagne claims that the group boycott began in 1996, as soon as Champagne entered the market. Champagne did not file suit until April 2002—well outside the four-year limitations period. Thus, unless the "continuing conspiracy" exception applies, Champagne's federal antitrust claims are barred by the statute of limitations.
The Established Distributors argue that Champagne cannot invoke the exception because the exception only applies where there was an overt act that was more than a mere reaffirmation of a previous act occurring outside of the limitations period. They assert that the alleged agreement in 1996 to pressure the mills not to sell to Champagne was the critical act, and that any alleged action by the Established Distributors after that was merely a reaffirmation of that previous agreement. Citing our decision in Kaw Valley, they claim that even if Champagne's ongoing efforts to deal with mills were rebuffed during the four years prior to it filing suit, such action would not restart the limitations period.
The critical difference between the present case and Kaw Valley is the structure of the alleged anticompetitive conspiracy. See generally 8 Julian O. von Kalinowski et al., Antitrust Laws and Trade Regulation 162-12 (2d ed. 2006) ("Whether an antitrust violation should be characterized as a single act or a continuing violation is best determined by considering the type of violation involved."). In Kaw Valley, the allegation was that members of the electric cooperative illegally decided not to supply power to any non-member. Thus, the agreeing parties had exclusive control over the input they sought to deny to the plaintiff; a decision not to supply that input required no further action. Subsequent rejections of non-members' requests for power were, in the oft-quoted word of the Fifth Circuit, "`the abatable but unabated inertial consequences'" of the initial, final agreement. Kaw Valley, 872 F.2d at 933 (quoting Poster Exch., Inc. v. Nat'l Screen Serv. Corp., 517 F.2d 117, 128 (5th Cir. 1975)).
In the present case, the allegation is that the Established Distributors illegally decided to pressure third parties—the mills—not to supply aluminum to Champagne. Thus, here, the agreeing parties' initial decision did require further action. The subsequent actions (contacting and pressuring the mills when those mills were considering recognizing Champagne) were both "distinct from the act outside the limitations period" (the agreement to effect a boycott) and a "continu[ation] [of] the same conspiracy." Id. The Established Distributors did not simply sit back and watch as the "unabated inertial consequences" of their (alleged) anticompetitive agreement harmed Champagne, id. (quotation omitted); rather, their actions within the limitations period "manifest[ed] a commitment to renewing" and enforcing that agreement, II Areeda & Hovenkamp 210.
This difference makes the present case more analogous to the Ninth Circuit's decision in Hennegan v. Pacifico Creative Service, Inc., 787 F.2d 1299 (9th Cir.1986). There, the Hennegans, souvenir shop owners, alleged that other souvenir shops and tour guide operators conspired to divert tourists from their shop to other souvenir
As in Hennegan, the initial alleged decision to boycott Champagne did not—and could not—"immediately and permanently destroy" Champagne's business. Champagne did not seek aluminum from the Established Distributors but rather from the mills. The Established Distributors' initial boycott decision simply could not "completely and permanently exclude" Champagne from the market. Rather, the Established Distributors allegedly attempted to further their conspiracy by engaging in subsequent overt acts—i.e., threatening and pressuring those mills that were considering recognizing Champagne. Therefore, the continuing conspiracy exception applies—the Established Distributors allegedly engaged in "new and independent act[s]" by threatening and pressuring the mills and these acts "inflict[ed] new and accumulating injury" on Champagne by causing it to be denied access to needed inputs. See Kaw Valley, 872 F.2d at 933.
In sum, Champagne's claims of antitrust violations occurring within the limitations period are not barred by the statute of limitations, and Champagne may seek to recover damages for those acts.
III. State Law Antitrust Claim
After granting summary judgment on the federal antitrust claim for lack of evidence of a conspiracy, the district court considered Champagne's claim that the Established Distributors' conduct violated the § 203(A) of the Oklahoma Antitrust Act.
Our earlier conclusion that Champagne might be able to survive summary judgment on its federal antitrust claim leads us to reverse, in part, the district court's ruling on Champagne's state antitrust claim as well. See generally Oakridge Invs., Inc. v. S. Energy Homes, Inc., 719 P.2d 848, 850 (Okla.Civ.App.1986) ("The Oklahoma antitrust statutes are similar to federal antitrust legislation."). On remand, the district court should consider whether the evidence is sufficient to allow this claim to go to the jury on a collective action theory. However, we agree with the district court's decision that the Established Distributors are entitled to summary judgment on Champagne's unilateral action theory; we therefore affirm the district court's ruling on this ground.
On appeal, Champagne makes three arguments in support of its claim that the district court erred by granting summary judgment as to its unilateral action theory: (1) the court erroneously reached the issue without adequate briefing; (2) the state law claim should have been subjected to per se treatment and thus harm to competition was irrelevant; and (3) even assuming harm to competition was relevant, the evidence in this case is stronger than that in Harolds Stores, in which we upheld the jury's verdict because, inter alia, there was evidence of unilateral action that injured competition and unreasonably restrained trade. We consider these issues in turn.
First, Champagne argues that the only issue presented to the district court in support of the Established Distributors' motion for summary judgment on the state antitrust claim was that a ruling in their favor on the federal claim ipso facto compelled a ruling in their favor on the state
Champagne next argues that, because the state and federal antitrust laws are generally treated similarly, the district court should have subjected its state unilateral action claim to per se treatment and forgone its inquiry into whether these unilateral acts harmed competition. See I ABA Section of Antitrust Law, Antitrust Law Developments 43 (4th ed. 1997) ("Under the per se rule, a restraint is conclusively presumed unreasonable without elaborate inquiry as to the precise harm it has caused. . . .") (quotations, alterations omitted). However, even assuming Champagne's collective action claim merits per se treatment,
Finally, Champagne claims that, even if injury to competition is relevant, it put forth sufficient evidence of anticompetitive effect stemming from the unilateral actions of each Established Distributor. Specifically, Champagne compares its evidence with the plaintiff's evidence in Harolds Stores. In that case, the plaintiff's economist provided evidence that the defendant "adversely impacted competition in general and unreasonably restrained trade." 82 F.3d at 1549. Specifically, the economist testified that the defendant's illegal infringement on the plaintiff's copyrights
Id. (quotation, original alterations and emphasis omitted).
Champagne argues that, as in Harolds Stores, the harm to competition in the
IV. State Law Tortious Interference Claim
Champagne also alleged that the Established Distributors tortiously interfered with its relationships with the mills. To prove a claim of tortious interference with business relations, one must show (1) a business or contractual right that was interfered with, (2) interference that was malicious and wrongful and was neither justified, privileged nor excusable, and (3) damage caused by interference. Brown v. State Farm Fire and Cas. Co., 58 P.3d 217, 223 (Okla.Civ.App.2002). The district court found that the alleged acts of interference that fell within the two-year statute of limitations period
A. Interference With Champagne's Relationship With Ormet
Turning first to the alleged interference between Champagne and Ormet, the district court noted that, as no business relationship yet existed between the two, Champagne's claim of interference with business relations was more properly a claim of interference with prospective business advantage.
On appeal, Champagne argues that it did not need to separately plead interference with prospective business advantage, because this tort is "encompassed" within the tort of interference with business relations. This is incorrect. See Overbeck v. Quaker Life Ins. Co., 757 P.2d 846, 847-48 (Okla.Civ.App.1984) ("Appellant argues that interference with a prospective economic advantage is synonymus [sic] with interference with contractual or business relations. This comparison is not entirely accurate. Although both torts do have similarities, the underlying theories of liability differ. . . . We believe the subtle differences between tortious interference with a prospective economic advantage and tortious interference with a contractual or business relation is more than just a semantical one, and thus we decline to treat the two synonymously. . . ."); see also Gaylord Entm't Co. v. Thompson, 958 P.2d 128, 150 n. 96 (Okla. 1998) (noting that there is a "difference between interference with a prospective economic advantage and with contractual or business relations").
B. Interference With Champagne's Relationship With Commonwealth
As the Established Distributors acknowledge, Champagne does have a
V. Copying and Imaging Costs
Finally, Champagne appeals the district court's award of costs and imaging fees to the Established Distributors. The district court awarded costs pursuant to Fed. R.Civ.P. 54(d), which provides that "costs other than attorneys' fees shall be allowed as of course to the prevailing party unless the court otherwise directs." (Emphasis added.) Because we are remanding this case for further proceedings, the "prevailing party" has yet to be established, and thus we necessarily must vacate the district court's award of costs.
To summarize, we hold the following: (1) the exclusion of Champagne's economic expert was not erroneous; (2) the process by which the district court analyzed whether certain statements of mill representatives were hearsay was flawed; on remand, the district court should determine if the statements are admissible as co-conspirator statements; (3) there was some direct evidence of an agreement among the Established Distributors and the conspiracy posited by Champagne was economically plausible; on remand, the district court should consider whether Champagne's direct and circumstantial evidence of an agreement is sufficient to survive summary judgment; (4) Champagne may be able to make out a claim of violation of the Oklahoma antitrust act based on a collective action theory, but the grant of summary judgment as to any unilateral action violating the state act was not erroneous; and (5) Champagne's state law claim of tortious interference was rightly rejected as to Ormet, but may be proper as to Commonwealth. We therefore AFFIRM the district court's order excluding Champagne's expert; AFFIRM in part
Champagne argues that the district court "fundamental[ly] misunderst[ood] . . . Dr. Murry's role in this case in particular, and the role an economist plays in an antitrust action." Champagne proposes that Dr. Murry's report and testimony "were not intended to confirm factual evidence of Defendants' threats to the mills or the knowledge of these threats within the industry," but rather "Dr. Murry's role in this litigation was to offer the opinion that, assuming such facts are established, an economist would confirm that such threats, and knowledge of them within the industry, would create a barrier to entry in the market."
Champagne is certainly correct in stating that, generally, an economist's role in an antitrust case is not to prove facts, but to opine on economic theory. See, e.g., Gregory J. Werden, Economic Evidence on the Existence of Collusion: Reconciling Antitrust Law with Oligopoly Theory, 71 Antitrust L.J. 719, 789 (2004) ("The role of the expert economist in antitrust cases is to apply microeconomic theory to the messy facts of a case."). However, Champagne fails to identify, nor could we find, any point in Dr. Murry's report or deposition that made clear that he was only assuming the facts he asserted. See generally United States v. Rodriguez-Aguirre, 108 F.3d 1228, 1238 n. 8 (10th Cir.1997) (noting that the appellant bears the responsibility of connecting his arguments to specific citations in the record).
Further, in reviewing Dr. Murry's report, it is not clear to us (nor, do we think, would it be clear to a jury) that this is what Dr. Murry intended to do. For example, Dr. Murry's report states that "Champagne . . . experienced difficulty acquiring sales persons because prospective employees feared Champagne would be unable to acquire the supplies of critical aluminum products from the mills at competitive prices." This sounds like a confirmation (rather than an assumption) of the fact that Champagne had trouble hiring; the district court noted, and Champagne does not refute, that Dr. Murry based this conclusion only on evidence provided by Champagne and "had not spoken with a single potential sales person who declined an offer." The relevance of the district court's concern becomes clear when considering why the "fact" that Champagne had trouble hiring was important. Dr. Murry's report goes on to state that "difficulty in assembling a qualified, experienced sales force is a business risk and a deterrent to investment and entry into the service center business. Significantly, these deterrents to entering the service center business are injurious to competition among service centers." In other words, Dr. Murry opined that there was a barrier to entry because of the inability to hire. Champagne claims that the report intended only to "offer the opinion that, assuming [certain] facts were established," there was a barrier to entry. However, the report nowhere makes clear that Dr. Murry is merely "assuming" that Champagne had trouble hiring. Rather, the report conclusively states that Champagne "experienced difficulty acquiring sales persons."
The district court, in performing its gatekeeper function, considers "whether the evidence or testimony will assist the trier of fact to understand the evidence or to determine a fact in issue." Gabaldon, 389 F.3d at 1098 (alterations, quotations omitted). Expert testimony that fails to make clear that certain facts the expert describes as true are merely assumed for the purpose of an economic analysis may not assist the trier of fact at all and, instead, may simply result in confusion. Thus it was not "manifestly unreasonable" for the district court to conclude that Dr. Murry's opinions lacked foundation because they were based on "the self-serving statement[s] of an interested party."
Id. at 179-80, 107 S.Ct. 2775. Thus, as it did with the statements of the Established Distributors, the district court should consider the mill representatives' statements and other evidence together in determining whether, for purposes of the co-conspirator hearsay exception, the evidence makes the existence of a conspiracy more likely than not.
In any event, we review rulings relating to discovery for abuse of discretion. See The Procter & Gamble Co. v. Haugen, 427 F.3d 727, 742-43 (10th Cir.2005). At the start of discovery, Champagne was allowed twenty-five depositions, which was the number it initially requested. The district court subsequently entertained a motion by Champagne to re-open discovery and conduct nine additional depositions. It granted the request for eight of the nine and only denied the request to depose Ken-Mac's Larry Parsons; it did so because Champagne had not offered any justification for waiting "until the twilight of discovery" to request the deposition. See Smith v. United States, 834 F.2d 166, 169 (10th Cir.1987) (noting that "whether the moving party was diligent in obtaining discovery" is a factor in considering whether to re-open discovery). Champagne points to no other instances in which it requested additional depositions. Under these circumstances, we do not think that the district court abused its discretion in "limiting" discovery.
Further, Bill Thomas, a sales representative for Commonwealth, stated that Veal said she wished Commonwealth would not recognize Champagne, and that
As to the Parsons' statement, we first note that the district court excluded the portion of Champagne's affidavit referring to Jorgensen and other service centers getting together as inconsistent with Champagne's deposition testimony, and it is not clear that Champagne appeals that decision. In any event, the statement at best showed that Parsons "implied" that there would be collective action. Direct evidence "is explicit and requires no inferences" to establish concerted action, thus this implication of collective action cannot suffice. See In re Baby Food Antitrust Litig., 166 F.3d 112, 118 (3d Cir.1999). Similarly, Veal's statement, while perhaps an admission that the service centers individually would attempt to force Commonwealth to stop dealing with Champagne, contains no suggestion of any agreement between the service centers. Thus we agree with the district court that these statements "lack the requisite `clarity' to constitute direct evidence."
We first note that the district court excluded Champagne's expert's report and testimony— a ruling which we affirmed. Given this, the value of any argument based on this deposition testimony is little to none. Moreover, we refuse to be bound by such a "strict theoretical microeconomic interpretation" of competition. "[N]o real-world market is ever perfectly competitive." Alan J. Daskin & Lawrence Wu, Observations on the Multiple Dimensions of Market Power, 19 Antitrust 53, 54 (Summer 2005). Moreover, the Established Distributors' own statements indicate that they thought there were profits to be protected by the exclusion of Champagne. While we acknowledge that antitrust law is strongly premised on economic theory, common sense still has a role.
79 Okla. Stat. Ann. § 203(A).