Santana Products, Inc. v. Bobrick Washroom Equipment, Inc.

OPINION

VANASKIE, Chief Judge.

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I.

INTRODUCTION

On October 1, 1996, plaintiff Santana Products, Inc. (Santana) instituted this action against defendants Bobrick Washroom Equipment and Bobrick Corporation (collectively “Bobrick”), The Hornyak Group, Inc. (“Hornyak”), Vogel Sales Company (“Vogel”), Sylvester & Associates, Ltd., and Fred Sylvester. Santana, which manufactures and sells restroom and toilet partitions made of high density polyethylene (“HDPE”), alleges that Bobrick and other toilet compartment manufacturers conspired to enforce a product standard that had the effect of excluding Santana’s HDPE compartments from the relevant market. Specifically, Santana claims that Bobrick along with members of a now-defunct trade association, the Toilet Partition Manufacturers Council (“TPMC”), collectively embarked on a campaign to convince prospective customers that (1) toilet partitions had to meet fire code flame spread and smoke development requirements for “wall finish”; and (2) HDPE did not meet such requirements. Santana has asserted claims under §§ 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1-2 ; the false advertising provision of the Lanham Act, 15 U.S.C. § 1125 (a); and the common law

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tort of intentional interference with prospective contractual relationships.

Following protracted and, at times, acrimonious discovery, the parties filed cross-motions for summary judgment. Santana has filed a partial summary judgment motion on its Sherman Act section 1 claim, (Dkt. Entry 43), and a summary judgment motion as. to the defendants’ liability under section 43(a) of the Lanham Act, (Dkt. Entry 271), while the motions of Bobrick, Hornyak, and Vogel attack all of Santana’s claims. (Dkt. Entries 287, 291, 294.)

The motions present several important and difficult issues for which there is no controlling precedent in this Circuit. For example, the defendants contend that their marketing activities directed toward public entities, such as school districts, are shielded from liability under the

Noerr/Penning-ton

doctrine. Defendants present this threshold defense not only with respect to the Sherman Act and common law claims, causes of action to which the

Noerr/Pen-nington

doctrine is plainly applicable, but also to the Lanham Act claim, an assertion for which there is little case law guidance. Because it is clear that the overwhelming bulk of the toilet partition market is directed at public construction, resolution of this issue in defendants’ favor would have a significant impact on the scope of Santana’s claims; effectively eliminate Hornyak and Vogel as defendants inasmuch as their marketing activities were limited to public institutions; and severely limit Bobrick’s liability. Pointing out that Santana is complaining of conduct that occurred seven years before the filing of this action, and that Santana had settled an earlier lawsuit against the members of the TPMC, defendants have also presented a substantial challenge to the timeliness of Santana’s claims, especially its Lanham Act cause of action, to which the doctrine of laches applies and for which there is no controlling precedent in this jurisdiction.

Having carefully considered the parties voluminous submissions,

1

the comprehensive evidentiary record, and the applicable law, I have concluded that the

Noerr/Pen-nington

doctrine is indeed applicable to all of Santana’s claims, thereby limiting any recovery to the non-public sector. I have further determined that none of Santana’s claims is time-barred, but recovery is limited to violations occurring within the applicable limitations period. In this regard, a four-year limitations period governs the Sherman Act claims, Pennsylvania’s six-year limitations period for claims based upon statutory violations controls the Lan-ham Act claim, and a one year limitations period defines the compensable parameters of the tortious interference claim.

As to the substantive merits of Santana’s claims, I have concluded that Hornyak and Vogel, as captive sales representatives of Bobrick, cannot be held hable under section 1 of the Sherman Act. I have further found that the assailed marketing campaign did not constitute an unlawful restraint on trade and that, in any event, Santana has shown no more than a

de minimis

effect on competition, thus warranting summary judgment in favor of the defendants on the Sherman Act § 1 claim. Defendants are also entitled to summary judgment on the § 2 claim because, for essentially the reasons articulated by Judge Mishler in the parallel case of

Santana Products, Inc. v. Sylvester & Associates, Ltd.,

121 F.Supp.2d 729 (E.D.N.Y.1999), the “shared monopoly” claim presented by Santana is not cognizable under section 2 of the Sherman Act. Summary judgment in favor of the defendants on the tortious interference claim is warranted because Santana has failed to present evidence of the loss of a prospective contract

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with a non-public customer within the one-year limitations period. Finally, there are issues of material fact that preclude summary adjudication of the Lanham Act claim.

As a result of these rulings, Santana’s claims have been severely limited. In recognition of the fact that appellate court consideration of difficult and close questions prior to any trial may serve the interests of the parties and of judicial economy, that the need for appellate review will not be mooted by further proceedings in this Court, and that there is “no just cause for delay,”

see Berckeley Inv. Group, Ltd. v. Colkitt,

259 F.3d 135, 140-42 (3d Cir.2001), I will direct entry of final judgment in favor of Bobrick as to the Sherman Act claims (Counts I and II of the complaint), and the tortious interference claim (Count IV), and in favor of Hornyak and Vogel as to all claims, in accordance with Fed.R.Civ.P. 54(b). Furthermore, because of the impact of the

Noerr/Pennington

ruling on the scope of the Lanham Act claim, and because that decision involves a “controlling question of law as to which there is substantial ground for difference of opinion and ... an immediate appeal may materially advance the ultimate termination of the litigation,” 28 U.S.C. § 1292 (b), I will certify the accompanying order for immediate appeal pursuant to 28 U.S.C. § 1292 (b).

II. BACKGROUND

A. The Toilet Compartment Industry

The toilet compartment industry consists of a number of national distributors

2

of toilet partitions

3

and a smaller number of regional distributors. These distributors offer several different materials for use as partitions, including metal, stainless steel, plastic laminate, solid phenolic, and HDPE. (Pl.Rev.Stat. of Material Facts/Sherman Act, Dkt. Entry 382, ¶ 5.) Other materials can be used for toilet partitions, but generally have drawbacks that prevent widespread use (for example, marble is now rarely employed because of its expense and weight). (Ex. 295, Supp. Appx. to Mem. in Support of Bobrick’s S.J. Mot., Dkt. Entry 411, Final Report: The Prospects for HDPE in the Market for Lavatory Partitions and Panels, April 1990, at 5.)

The specification process for public building contracts is central to competition within the toilet partition industry because, by definition, toilet partitions are installed only in public restroom facilities. Bidding on a public building contract is a two-part process. It is the first part — specification — that is the focus of this litigation. Prior to competitive bidding on price, the architect or “specifier” on a budding project writes specifications for the materials to be used. Onc'e the specifications are finalized, only those companies whose products satisfy the specifications may ultimately bid on the project.

See generally Stearns Airport Equip. Co. v. FMC Corp.,

170 F.3d 518, 525 (5th Cir.1999). Thus, the toilet partition suppliers actively lobby architects and specifiers for public building projects to specify their product or not to

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specify a competitor’s product. The companies compete on such varied grounds as durability, resistance to vandalism, ease of installation, and aesthetics. After specification, competitors whose products satisfy the specifications compete only on price.

This litigation deals with the business practices of two participants in the toilet partition industry. Santana, based out of Scranton, Pennsylvania, was formed in the late 1970s and was the first manufacturer to offer solid plastic restroom toilet partitions as an alternative to conventional toilet partitions. (Complaint, ¶ 21.) In the early 1980s, Santana introduced HDPE partitions. (Pl.Rev.Stat. of Material Facts/Lanham Act, Dkt. Entry 387, ¶ 1.) These partitions were advertised as vandal resistant because of the ease of cleaning and ease of repairing scratches, both due to the partition’s solid plastic construction. In its Sweet’s Catalog advertisements,

4

Santana listed as advantages of HDPE its cost, durability, ease of maintenance, particularly in highly vandalized areas, and lack of absorbency.

5

(Ex. 60, Appx. to Mem. in Support of Bobrick’s S.J. Motion, Dkt. Entry 298, 1986 Sweet’s Catalog, at S 66786.) Santana also promoted its partitions’ fire-resistant characteristics. As of mid-1989, several companies offered HDPE toilet partitions: Knickerbocker, Sanymetal, Capital Partitions, General Partitions, and Santana. (Pl.Rev.Stat. of Material Facts/Sherman Act, Dkt. Entry 382, ¶ 3.)

Bobrick Washroom Equipment, Inc. and The Bobrick Corporation are California corporations. Bobrick manufactures toilet partitions made of both solid phenolic and laminated plastic over a particle board core (plastic laminate). Phenolic is composed of craft paper impregnated with resins and compressed under high pressure and temperature to form a solid core. The core material is covered on each side with a laminated plastic material to provide a decorative surface. (Ex. 4, Appx. to Mem. in Support of Bobrick’s S.J. Mot., Dkt. Entry 298, Thompson Dep. Tr., at 95-97; Ex. 5,

id.,

Mahony Dep. Tr., at 30-31; Ex. 7,

id.,

Henry Dep. Tr. at 56-57.) Bobrick’s marketing strategy — in addition to the “fire scare” campaign at the heart of this dispute — focused on the durability of its partitions. For example, Bobrick claimed in one ad:

With Bobrick’s solid phenolic construction and heavy-duty stainless steel hardware, it takes more than 2,000 pounds of force to knock a door off a stile. Plus, DuraLine compartments are available to meet Class A and B fire safety stan

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dards. Smooth graffiti-resistant surfaces wipe clean. School-engineered hardware can be concealed from the outside or through-bolted, and you can select from a variety of colors.

(Vol. II, Ex. A. 11, Appx. in Support of PI. 5.J. Mot./Lanham Act, Dkt. Entry 280, Klein Dep. Ex. 12, at B 148756.) Toilet partitions constitute approximately ten percent of Bobrick’s total sales, with the remaining ninety percent consisting of various washroom accessories. (Bobrick’s Rev. Stat. of Material Facts, Dkt. Entry 407, ¶ 3.) Bobrick is considered one of the largest washroom accessories manufacturers in the United States.

(Id.)

Two of Bobrick’s independent sales representatives are also defendants in this action. Hornyak is a Delaware corporation that serves as a Bobrick architectural representative in Pennsylvania. Similarly, Vogel is a Pennsylvania corporation based out of Pittsburgh that acts as a sales representative for Bobrick,

inter alia,

in the western part of the state. (Complaint, ¶¶ 4-5.)

B. The ASTM E-84 Test and Santana’s Fire Rated Compartment

In the construction industry, materials are often tested for flammability before use in construction. One common flammability test is the American Standard Test Methods (ASTM) E-84 Test. The ASTM E-84 test, also called the “Steiner Tunnel Test,”

6

creates comparative values for the speed at which a flame spreads across the surface of a material and the rate at which smoke develops when the material burns. Specifically, the test develops “flame spread” and “smoke developed” indices by comparing the rate of flame spread and smoke developed of the test material with that of select grade red oak and inorganic reinforced cement board surfaces under the same fire exposure conditions. (Vol. IV, Ex. 3, Appx. in Support of PI. S.J. Mot./Lanham Act, Dkt. Entry 280, ASTM E-84-95b, ¶ 4.1) The ASTM E-84 test does contain two caveats:

This standard should be used to measure and describe the response of materials, products, or assemblies to heat and flame under controlled conditions and should not be used to describe or appraise the fire-hazard or fire-risk of materials, products or assemblies under actual fire conditions. However, results of the test may be used as elements of a .fire-hazard assessment or a fire-risk assessment which takes into account all of the factors which are pertinent to an assessment of the fire hazard or fire risk of a particular end use.

This standard does not purport to address all of the safety concerns, if any, associated with its use. It is the responsibility of the user of this standard to establish appropriate safety and health practices and determine the applicability of regulatory limitations prior to use.

(Id.,

¶¶ 1.7,1.8.)

Some building codes and the National Fire Protection Association’s (“NFPA”) Life Safety Code 101 use the indices generated by the ASTM E-84 test to determine a material’s fire rating. The following rating system is the subject of this dispute:

7

a Class A fire rating is the

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highest fire rating, requiring a flame spread index of 0-25; Class B is the next highest rating and requires a flame spread index between 26 and 75; finally, Class C fire rating requires a flame spread rating between 76 and 200. All three classes require a “smoke developed” index of less than 450. Any product that falls below the Class C fire rating is considered unrated.

The NFPA Life Safety Code 101 requires different fire ratings for materials depending on the characterization of their use in the building project. For example, the NFPA requires materials considered part of the “interior finish” or “wall finish” to possess a Class B fire rating. If, however, the material is considered part of a “furnishing” or “fixture,” no fire rating is required. Central to this dispute is the categorization of toilet partitions as either an “interior finish,” requiring a Class B rating, or as a “fixture,” requiring no fire rating.

In the early 1980s, Santana began to develop a fire rated toilet partition, using the ASTM E-84 test to measure the fire rating of its test panels. (Bobrick’s Rev. Stat. of Material Facts, Dkt. Entry 407, ¶¶ 8-10.) This effort led to the 8000 Series toilet partition (also called the “FR” partition by Santana), which Santana advertised as meeting a Class A rating.

(Id.,

¶ 12.) One Santana brochure stated that

only

the FR partition met or exceeded “mandatory building code requirements for flame spread, smoke generation, and toxicity. These requirements were established and are currently enforced by the NFPA, BOCA, and other federal, state, and local municipality safety agencies nationwide.” (Ex. 24, Appx. to Mem. in Support of Bobrick’s S.J. Mot., Dkt. Entry 298.) The reverse side of the brochure contained proposed specifications, which specified a fire rated toilet partition and referenced the ASTM E-84 test.

8

(Id.

at B 403-04.) A description of the FR partition and its fire rating was included in at least one of Santana’s Sweet’s Catalog advertisements as well.

9

(Ex. 60, Appx. to Mem. in Support of Bobrick’s S.J. Mot., Dkt. Entry 298, 1986 Sweet’s Catalog, at S 66786.)

Bobrick and Santana also dispute the reasons for Santana’s gradual withdrawal of its FR product. Bobrick contends that Santana experienced quality problems with the FR product. It was difficult to produce and lost most of the benefits of HDPE. Specifically, the FR material was

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brittle, heavy, cuts and scratches were difficult to fix, the color choices were limited, and it was very expensive. (Bobrick’s Rev. Stat. of Material Facts, Dkt. Entry 407, ¶¶ 18-19.) Moreover, Santana experienced difficulty in making a consistently Class A product. The FR partition varied in its fire rating. (PI. Response to Bo-brick’s Rev. Stat. of Material Facts, Dkt. Entry 893, ¶ 20.)

While not disputing that its FR partition suffered from these various defects, Santana argues that this was not the reason for its decision to stop promoting the fire rated partition. Rather, Santana asserts that it stopped promoting the sale of fire rated compartments “once it realized that the market was being skewed in that direction by the competitors,” (Rev. Mem. in Opp. to Bobrick’s S.J. Mot., Dkt. Entry 391, at 67), and after realizing that a Class A rating was not required by building codes. Competitors, according to Santana, were able to sell more competitively against the FR partition precisely because of the negative characteristics listed above, particularly price. No matter which interpretation of Santana’s actions is adopted, however, it is undisputed that by the 1990s, Santana was phasing out its Class A product in favor of its standard, non-rated

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product, Poly-Mar HD.

C. The 1994 TPMC Litigation

In late 1989, several alleged non-party co-conspirators formed the Toilet Partitions Manufacturers Council (“TPMC”). According to Santana, Formica, one of the largest plastic laminate suppliers in the United States, and its customers in the toilet compartment industry had become concerned with Santana’s sales success in the marketplace. To combat this success, Formica and most of its plastic laminate customers

11

had a series of group meetings beginning in October 1989, and continuing until the summer of 1991. At these meetings, the companies agreed that sales of HDPE compartments were a threat and that they would assert to specifiers that HDPE compartments, in particular Santana’s compartments, exceeded fire code standards for wall finish. The TPMC urged Formica to test its thick stock (solid phenolic) product as to its compliance with the ASTM E-84 test for “wall finish” and add the results to Formica’s Technical Data Sheet. (Pl.Rev.Stat. of Material Facts/Sherman Act, Dkt. Entry 382, ¶ 12.) Additionally, Formica and Met-par prepared a videotape that (according to Santana) falsely depicted the flammability of Santana’s HDPE partitions. The videotape was produced for use by the sales representatives of the TPMC members.

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Santana claims that the TPMC bylaws excluded HDPE toilet compartment manufacturers from membership.

(Id.,

¶¶ 27-30.) Bobrick, on the other hand, argues that the by-laws did not exclude manufacturers of HDPE from membership and that Santana was itself invited to join. (Bobrick’s Rev. Stat. of Material Facts,

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Dkt. Entry 407, ¶ 78-80.) Regardless, the three members of the TPMC that marketed HDPE partitions prior to 1990 — Knickerbocker, General Partitions, and Sanyme-tal — ceased to do so by the early 1990s (Pl.Rev.Stat. of Material Facts/Sherman Act, Dkt. Entry 382, ¶¶ 19, 36A.)

Bobrick was aware of the formation of the TPMC, but declined to join it. It did, however, interact with Formica and Met-par on the question of HDPE’s fire characteristics. In July of 1989, Bobrick received a copy of a Metpar Fact Sheet comparing HDPE and phenolic and stating that HDPE had a smoke developed rating of 625, exceeding the limit of 450.

(Id.,

¶ 6A.) Later, Metpar and Bobrick shared data regarding Bobrick’s testing of Santana’s Poly-Mar HD toilet compartments.

(Id.,

¶ 13-15A.) Alan Gettelman and Bob Gillis of Bobrick were taken on a tour of a Formica plant and shown the Formica videotape.

(Id.,

¶22A.) Bobrick received a copy of the Formica videotape in early 1990 and, with Formica’s permission, sent copies to various architectural representatives.

(Id.,

¶¶ 23-24; 34; 36.) The only condition put on Bobrick’s use of the tape was that Bobrick was not to use it at trade shows.

(Id.,

¶ 36.) While Bobrick did not join the TPMC, it promised the Chairman of the TPMC that it “would be happy to help support the Council in any way we could.”

(Id.,

¶ 32.)

On November 30, 1994, Santana filed a complaint in this Court against Formica, Metpar, ten other toilet partition manufacturers and the TPMC under the caption

Santana Products, Inc. v. Toilet Partition Manufacturers Council,

Civ. A. No. 3:CV-94-1962. As in this case, Santana’s claims in the TPMC action included alleged violations of sections 1 and 2 of the Sherman Act, section 43(a) of the Lanham Act, as well as tortious interference with prospective contractual relations. The TPMC action focused on an alleged conspiracy “to use scare tactics to discourage specification and acceptance of Santana’s HDPE partitions in lieu of or as a replacement material for conventional [toilet partition] materials by falsely alleging that Santana’s partitions posed a dangerous fire hazard.” (Ex. 225, Appx. to Mem. in Support of Bobrick’s S.J. Mot., Dkt. Entry 298, TPMC Complaint, ¶ 21.)

On January 27, 1995, the TPMC, Formica and the eleven toilet partition manufacturers settled the 1994 TPMC litigation with Santana in a confidential agreement. (Ex. 229, Appx. to Mem. in Support of Bobrick’s S.J. Mot., Dkt. Entry 298, Settlement Agreement and Releases.) The 1994 TPMC lawsuit was then dismissed.

D. Bobrick’s “Fire Scare” Marketing Campaign

Santana alleges that both before and after the 1994 TPMC lawsuit, Bobrick engaged in an unlawful marketing campaign designed to persuade architects and specifiers that Santana’s HDPE compartments did not meet building code requirements and were a fire hazard. In addition to acquiring the Formica videotape in 1990, (Bobrick's Rev. Stat. of Material Facts, Dkt. Entry 407, ¶ 81), and distributing the Formica videotape to its sales representatives, Bobrick also distributed to its sales representatives a “Technical Bulletin” (TB-73) that provided a comparison of the results of an ASTM E-84 test performed on Bobrick’s 1080 DuraLine Series partitions and on HDPE partitions.

(Id.,

¶ 57.) The TB-73 bulletin was included in Bo-brick’s Architectural Manual from 1990 to at least 1994 and allegedly beyond.

(Id.,

¶ 59; PI. Response to Bobrick’s Rev. Stat. of Material Facts, Dkt. Entry 393, ¶ 59.) Bobrick also produced its own videotape in 1992-1993, entitled “You Be The Judge,” that included a side-by-side comparison of

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fire tests performed on solid phenolic and HDPE bathroom stalls. (Bobrick’s Rev. Stat. of Material Facts, Dkt. Entry 407, ¶ 108; Pl.Rev.Stat. of Material Facts/Sherman Act, Dkt. Entry 382, ¶ 81.) In addition to these comparisons, some Bobrick representatives also conducted live demonstrations of burning HDPE for architects and specifiers.

Bobrick also addressed fire ratings in its national advertisements. Bobrick placed advertisements in the American School

&

University magazine (“AS

&

U”) in the early 1990s that described HDPE as a “fire hazard” that “far exceeds the maximum allowable smoke contribution standard of the National Fire Protection Association Life Safety Code ... according to a recent ASTM E-84 test .... ” (Bobrick’s Rev. Stat. of Material Facts, Dkt. Entry 407, ¶ 131.) Similar comparative statements were included in Bobrick’s Sweet’s Catalog advertisements. Bobrick also created slide presentations and sales scripts for its representatives that sought to portray HDPE as a fire hazard in comparison to its solid phenolic core compartments and its Thrislington series plastic laminate compartments.

E. Procedural History

On October 1, 1996, Santana filed its Complaint in this matter, naming as defendants Bobrick, Hornyak, Vogel, Sylvester

&

Associates, Ltd., and Fred Sylvester. (Dkt. Entry 1.) On June 1, 1998, Bobrick filed a Third-Party Complaint against Formica, asserting counts for (1) contribution, (2) indemnification, (3) fraud, and (4) negligent misrepresentation. (Dkt. Entry 174.) Bobrick’s Third-Party Complaint was dismissed by Memorandum and Order of August 30, 1999.

See Santana Prods., Inc. v. Bobrick Washroom Equip., Inc.,

69 F.Supp.2d 678, 690-91 (M.D.Pa.1999)(holding that there is no right to contribution or indemnification under the Sherman Act or the Lanham Act, that the release between Formica and Santana barred Bobrick’s contribution claim against Formica, that because Santana’s underlying action depends upon Bobrick’s knowing and intentional acts, a third-party claim for indemnification was unavailable, and that claims for fraud and negligent misrepresentation are not derivative claims for secondary liability, but rather independent tort claims which may not be maintained independently through a third-party complaint under Rule 14(a)). Sylvester & Associates and Fred Sylvester were earlier dismissed from the case for lack of personal jurisdiction by Memorandum and Order dated July 24, 1998.

Santana Prods., Inc. v. Bobrick Washroom Equip., Inc.,

14 F.Supp.2d 710 (M.D.Pa.1998).

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Between March 3, 1997 and September 12, 2000, the parties engaged in massive discovery. During the course of discovery, the parties inspected over a million pages of responsive documents and exchanged nearly 500,000 pages of these documents and more than two dozen videotapes. These responsive documents were the result of subpoenas for documents issued to over 270 third party architects, specifiers, public schools, municipalities, and testing laboratories nationwide, as well as every sales representative of both Bobrick and Santana. Subpoenas to defendants of the 1994 TPMC litigation and other competitors produced more than 50,000 additional pages of responsive documents. Several extensive computer databases were produced on seven compact discs and approximately two dozen computer diskettes. The parties deposed 181 witnesses, whose testimony filled more than 25,000 pages of

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transcripts. These include depositions of 156 fact witnesses in 22 states, 8 expert witnesses, and 17 expert-related fact witnesses. Moreover, a number of interrogatories were served during the course of this litigation. Such considerable discovery required the appointment of a Special Master, George A. Reihner, in late 1997 for the purpose of overseeing discovery and resolving discovery disputes.

14

Following the conclusion of discovery, each party presented summary judgment motions. In support of its arguments, Santana proffered reports and testimony of its expert witnesses. Defendants moved in limine to have the court conduct Daubert

15

hearings to determine the admissibility of Santana’s expert witness opinions. In response, Santana elected to withdraw its expert witness opinions. The parties then submitted revised memoranda of law that deleted references to the withdrawn opinions of Santana’s experts. Oral argument on the motions was held on April 30, 2002.

III.

DISCUSSION

A. Summary Judgment Standard

Summary judgment should be granted 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 ... the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). A fact is “material” if proof of its existence or non-existence might affect the outcome of the suit under the applicable law.

Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 248 , 106 S.Ct. 2505 , 91 L.Ed.2d 202 (1986). “Facts that could alter the outcome are material facts.”

Charlton v. Paramus Bd. of Educ.,

25 F.3d 194, 197 (3d Cir.),

cert. denied,

513 U.S. 1022 , 115 S.Ct. 590 , 130 L.Ed.2d 503 (1994). “Summary judgment will not lie if the dispute about a material fact is ‘genuine,’ that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.”

Anderson,

477 U.S. at 248 , 106 S.Ct. 2505 .

Initially, the moving party must show the absence of a genuine issue concerning any material fact.

Celotex Corp. v. Catrett,

477 U.S. 317, 325 , 106 S.Ct. 2548 , 91 L.Ed.2d 265 (1986). All doubts as to the existence of a genuine issue of material fact must be resolved against the moving party, and the entire record must be examined in the light most favorable to the nonmoving party.

White v. Westinghouse Elec. Co.,

862 F.2d 56, 59 (3d Cir.1988);

Continental Ins. Co. v. Bodie,

682 F.2d 436, 438 (3d Cir.1982). Once the moving party has satisfied its burden, the nonmov-ing party “must present affirmative evidence to defeat a properly supported motion for summary judgment.”

Anderson,

477 U.S. at 256-57 , 106 S.Ct. 2505 . Mere conclusory allegations or denials taken from the pleadings are insufficient to withstand a motion for summary judgment once the moving party has presented evi-dentiary materials.

Schoch v. First Fidelity Bancorporation,

912 F.2d 654, 657 (3d Cir.1990). Rule 56.requires the entry of summary judgment, after adequate time for discovery, where a party “fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear

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the burden of proof at trial.”

Celotex, 477

U.S. at 322, 106 S.Ct. 2548 .

B. The

Noerr/Pennington

Defense

“Rooted in the First Amendment and fears about the threat of liability chilling political speech, the

[Noerr/Penning

ton] doctrine was first recognized in two Supreme Court cases holding federal antitrust laws inapplicable to private parties who attempted to influence governmental action — even where the petitioning had anticompetitive effects.”

A.D. Bedell Wholesale Co. v. Philip Morris, Inc.,

263 F.3d 239, 250 (3d Cir.2001). The first Supreme Court decision was

Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc.,

365 U.S. 127 , 81 S.Ct. 523 , 5 L.Ed.2d 464 (1961), which held that the concerted efforts of railroads to influence the passage of legislation adverse to the trucking industry were immune from liability under the federal antitrust laws. The second decision came in

United Mine Workers v. Pennington,

381 U.S. 657 , 85 S.Ct. 1585 , 14 L.Ed.2d 626 (1965), which ruled that parties petitioning a government agency to curtail coal purchases could not be held to account to an injured coal producer in an antitrust case. The

Noerr/Pennington

doctrine has been extended to commercial tort claims,

e.g. Cheminor Drugs, Ltd. v. Ethyl Corp.,

168 F.3d 119, 128 (3d Cir.1999), as well as federal statutory claims other than the Sherman Act.

E.g., Int’l Bhd. of Teamsters, Local 734 Health & Welfare Trust Fund v. Philip Morris, Inc.,

196 F.3d 818 , 826 (7th

Cir.1999)(Noerr/Pennington

applied to claim under the Racketeer Influenced & Corrupt Organizations Act, 18 U.S.C. § 1962 ).

Bobrick, Hornyak, and Vogel have each moved for summary judgment on the ground that liability on Santana’s federal statutory and state common law claims is foreclosed or severely restricted by application of the

Noerr/Pennington

doctrine. Specifically, defendants contend that the

Noerr/Pennington

doctrine precludes liability for alleged injuries resulting from decisions of governmental actors to adopt bid specifications that effectively excluded Santana’s HDPE toilet partitions.

As explained by our Court of Appeals,

Noerr/Pennington

immunity extends to two separate types of injury:

A petitioner may be immune from the antitrust injuries which result from the petitioning itself.

See Noerr,

365 U.S. at 143 , 81 S.Ct. 523 , 5 L.Ed.2d 464 (finding trucking industry plaintiffs’ relationships with their customers and the public were hurt by the railroads’ petitioning activities, yet the railroads were immune from liability). Also, ... parties are immune from liability arising from the antitrust injuries caused by government action which result from the petitioning.

See Pennington,

381 U.S. at 671 , 85 S.Ct. 1585 , 14 L.Ed.2d 626 (holding plaintiffs could not recover damages resulting from the state’s actions) .... Therefore, if its conduct constitutes valid petitioning, the petitioner is immune from antitrust liability whether or not the injuries are caused by the act of petitioning or are caused by government action which results from the petitioning.

Bedell,

263 F.3d at 251 . Defendants assert that Santana’s claims are premised upon decisions made by governmental actors, and are therefore barred by

Noerr/Pennington.

“[T]he right to petition extends to all departments of the Government.”

Cal. Motor Transp. Co. v. Trucking Unlimited,

404 U.S. 508, 510 , 92 S.Ct. 609 , 30 L.Ed.2d 642 (1972). Protected “petitioning” activity runs the gamut of efforts to persuade governmental actors, extending well be

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yond “filing formal grievances directly with the government.”

Bedell,

263 F.3d at 252 . It encompasses not only direct lobbying of legislative and executive officials, but also publicity campaigns and other marketing efforts.

See Allied Tube & Conduit Corp. v. Indian Head, Inc.,

486 U.S. 492, 510 , 108 S.Ct. 1931 , 100 L.Ed.2d 497 (1988)(“Petitioner, and others concerned about the safety or competitive threat of polyvinyl chloride conduit, can, with full antitrust immunity, engage in concerted efforts to influence [state and local] governments through direct lobbying, publicity campaigns, and other traditional avenues of political expression.”).

In this case, the conduct challenged by Santana consisted of a multi-faceted advertising campaign that sought to address the “competitive threat” of HPDE toilet partitions by representing that the partitions were subject to flammability requirements for wall finish, as opposed to those applicable to furniture and fixtures, and by disseminating information concerning the flammability of HPDE compartments. Such a campaign, to the extent it targeted governmental decisionmakers, falls within the broad ambit of

Noerr/Pennington. Id.

Santana, however, contends that the nature and context of the defendants’ activities remove this case from the

Noerr/Pen-nington

doctrine. Santana alternatively asserts that this case falls within several purported exceptions to

Noerr/Pennington

immunity.

1. Defendants’ Activities Are Within the Ambit of

Noerr/Pennington

Immunity

Observing that the scope of immunity nonetheless “depends on the source, context, and nature of the anticompetitive restraint at issue,”

id.

at 499 , 108 S.Ct. 1931 , Santana argues that Bobrick’s conduct is not entitled to protection. In support of its position, Santana relies principally on

Allied Tube.

The “relevant context” for the anticom-petitive activity at issue in

Allied Tube

was “the standard-setting process of a private association.”

Id.

at 500 , 108 S.Ct. 1931 . Specifically, manufacturers of steel electrical conduit conspired to exclude polyvinyl chloride (“PVC”) conduit from the National Fire Protection Association’s National Electrical Code. Plaintiff itself had sought to have PVC conduit included in the 1981 edition of the Code as an approved type of electrical conduit. The defendant and other steel conduit manufacturers agreed to rig the voting on the plaintiffs proposal by packing the annual meeting of the NFPA with persons whose only function would be to vote against the PVC proposal. Defendant’s effort was successful: PVC was not approved as an electrical conduit material in the 1981 Code. The Court ruled that, although it was likely that state and local governments would adopt the 1981 Code, thereby excluding PVC conduit, the activity in question, directed at a private standard-setting association, was not entitled to

Noerr/Pennington

immunity. Rejecting the “absolutist position that the

Noerr

doctrine immunizes every concerted effort that is genuinely intended to influence governmental action,”

id.

at 503, 108 S.Ct. 1931 , the Court concluded that “the

Noerr

immunity of anticompetitive activity intended to influence the government depends not only on its impact, but also on the context and nature of the activity.”

Id.

at 504, 108 S.Ct. 1931 . The Court found that

Noerr

immunity did not apply to the conduct of the defendant because it occurred “within the confines of a private standard-setting process ... [and][t]he validity of conduct within that process has long been defined and circumscribed by the antitrust laws without regard to whether the private standards are likely to

*481

be adopted into law.”

Id.

at 506, 108 S.Ct. 1931 .

Asserting that “Bobriek’s and its co-conspirators’ actions took place within the context of ‘standard’ setting and enforcement by a private group of competitors who set and enforced the ASTM E-84 standard against HDPE toilet compartments because it was known that those products did not meet the smoke development index of the NFPA Life Safety Code,” (Rev. Mem. in Opp. to Bobrick’s S.J. Mot., Dkt. Entry 391, at 25), Santana argues that “the context and nature of the present horizontal conspiracy is [sic] very clearly the type of commercial activity regulated by the antitrust laws.”

(Id.)

There are indeed excerpts from the majority opinion in

Allied Tube

that support Santana’s position. For example, the Court’s observation that “the antitrust laws should not necessarily immunize what are in essence commercial activities simply because they have a political impact,”

Allied Tube,

486 U.S. at 507 , 108 S.Ct. 1931 , viewed in isolation, supports a conclusion that

Noerr

immunity should not pertain here. Bo-brick’s activities were plainly commercial in nature, and application of the antitrust laws to such activity has intuitive appeal. But the Court in

Allied Tube

carefully circumscribed the reach of its decision: “Our holding is expressly limited to cases where an ‘economically interested party exercises

decisionmaking

authority in formulating a product standard for a private association that comprises market participants.’ ”

Id.

at 511 n. 13, 108 S.Ct. 1931 (emphasis in original).

The facts of this case do not fall within

Allied Tube’s

narrow holding. Bobrick and its alleged co-conspirators, individually or in combination, did not exercise any decisionmaking authority in the formulation of a product standard. This is not a case where a private standard-setting association was manipulated by machinations of Santana’s competitors to exclude HDPE toilet compartments from applicable safety codes. Bobrick and its alleged co-conspirators simply advocated an interpretation of an applicable code that was adverse to Santana’s position. This advocacy did not occur within the confines of a private standard setting association, but occurred in the context of a marketing campaign that encompassed public building projects. In this setting, Santana had the ability to advocate its position that toilet compartments should not be subjected to the requirements of wall finish standards and to refute assertions concerning the flammability and smoke characteristics of its product. The decisionmaker at issue in this case is not Santana’s competitors, but the government agent — the specifier — who does not have a commercial interest to advance in determining the building code provisions applicable to toilet partitions. Bobrick merely attempted to influence the specifier’s decision. It did not formulate a product standard, exercise decisionmaking authority, or direct its activities towards a private standards-setting organization. Thus, Santana’s reliance upon

Allied Tube

is misplaced.

There is another delimiting factor in

Allied Tube

that makes its holding inapplicable here. The plaintiff in

Allied Tube

did not seek damages resulting from the adoption of the rigged Code standard by any governmental entity.

Id.

at 500 , 108 S.Ct. 1931 . Instead, plaintiffs recovery was limited to the theory that “the stigma of not obtaining [Code] approval of its product and Allied’s ‘marketing’ of that stigma caused

independent marketplace harm

to [plaintiff] in those jurisdictions

permitting use of PVC conduit,

as well as those that later adopted the 1984 NEC, which

permitted use of PVC conduit

.... ”

Indian Head, Inc. v. Allied Tube & Conduit Corp.,

817 F.2d 938 , 941 n. 3 (2d

*482

Cir.1987)(emphasis added),

aff'd,

486 U.S. 492 , 108 S.Ct. 1931 , 100 L.Ed.2d 497 (1988). Thus, damages resulting from the adoption of the 1981 Code by various government agencies were explicitly excluded from the claim considered by the Supreme Court.

See

486 U.S. at 498 n. 2, 108 S.Ct. 1931 . Here, by way of contrast, Santana seeks recovery of damages resulting from the effective exclusion of its product from public building specifications attributable to the efforts of Bobrick and its alleged co-conspirators.

Illustrating the significance of this distinguishing feature of

Allied Tube

is the Ninth Circuit’s decision in

Sessions Tank Liners, Inc. v. Joor Manufacturing, Inc.,

17 F.3d 295 (9th Cir.),

cert. denied,

513 U.S. 813 , 115 S.Ct. 66 , 130 L.Ed.2d 23 (1994). At issue in

Sessions

was the activity of a storage tank manufacturer in the amendment of a model fire code to the disadvantage of the defendant’s competitor, Sessions Tank Liners, Inc. (“Sessions”). Sessions was involved in the business of “repair[ing] leaking storage tanks in place by cutting them open, lining their interiors with a protective coating of epoxy, and resealing them.”

Id.

at 296. The defendant, Joor Manufacturing, Inc., produced underground storage tanks. While the cost of lining a leaking new tank was approximately the same as the cost of a new replacement, tank lining proved “cheaper than tank replacement ... because lining [did] not entail the additional costs of removing and discarding the leaking tank and installing a new one,” and “[did] not require the lengthy interruption of business that tank replacement often involve[d].”

Id.

Tank lining, however, required a government permit. Joor caused the amendment of a model fire code to require that leaking tanks be removed. In effect, the amendment was tantamount to a ban on tank lining.

Id.

at 297.

Claiming that this conduct violated federal antitrust laws and California tort law, Sessions brought an antitrust and unfair competition action in federal court. The district court ruled that Joor was entitled to

Noerr

immunity, No. 84-6363 MRP, 1986 WL 31689 (C.D.Cal. Jan. 17, 1986), and the Ninth Circuit, in relevant part, agreed. 827 F.2d 458 (9th Cir.1987). The Supreme Court, however, vacated the Ninth Circuit ruling and remanded the matter for further consideration in light of

Allied Tube. Sessions Tank Liners, Inc. v. Joor Manufacturing, Inc.,

487 U.S. 1213 , 108 S.Ct. 2862 , 101 L.Ed.2d 899 (1988).

The case then went back to the district court, which conducted a bench trial. The trial court found that Joor had knowingly made false statements to the standard setting organization that caused the effective ban on tank lining. The district court further found that prior to and immediately after the adoption of the code amendment, “Joor ‘marketed’ the stigma which it had caused the [standards-setting organization] to place on tank lining by sending letters to public agencies and customers urging its prohibition.” 786 F.Supp. 1518, 1532 (C.D.Cal.1991). As does Santana here, Sessions claimed, and the district court found, that prior to the amendment of the code, Sessions’ business was expanding, but that it declined sharply following adoption of the code amendment. Sessions also proved that it was receiving permits freely before the code amendment, but was denied them thereafter and that it was denied permits even before any local government would have been able to adopt the code amendment.

Id.

The district court concluded that, under these circumstances,

Allied Tube

dictated the conclusion that Joor was not shielded by

Noerr

immunity.

The Ninth Circuit reversed. In finding that

Allied Tube

did not abrogate immuni

*483

ty for Joor’s conduct, the Ninth Circuit explained that

Noerr

petitioning immunity “has its roots in the Supreme Court’s decision in

Parker v. Brown,

317 U.S. 341, 350 , 63 S.Ct. 307 , 87 L.Ed. 315 (1943).”

Sessions,

17 F.3d at 298 .

Parker

“held that the Sherman Act does not prohibit an anti-competitive restraint imposed by a state as an act of government.”

Mass. School of Law at Andover, Inc. v. Am. Bar Ass’n,

107 F.3d 1026, 1035 (3d Cir.1997). The holding in

Noerr

was “a corollary to

Parker :

The federal antitrust laws ... do not regulate the conduct of private individuals in seeking anticompetitive action from the government.”

City of Columbia v. Omni Outdoor Adver., Inc.,

499 U.S. 365, 379-80 , 111 S.Ct. 1344 , 113 L.Ed.2d 382 (1991). Thus, “ ‘where a restraint upon trade or monopolization is the result of valid governmental action, as opposed to private action,’ those urging the governmental action enjoy absolute immunity from antitrust liability for the anticompetitive restraint.”

Allied Tube,

486 U.S. at 499 , 108 S.Ct. 1931 . The Ninth Circuit in

Sessions

recognized the critical distinction between harm caused by the inability to procure a government permit (valid state action) and harm to competition independent of such state action. Holding that the evidence showed that Sessions’ injuries were directly attributable to the inability to secure requisite permits from governmental entities, the Ninth Circuit ruled that liability could not be imposed upon Joor:

In applying

Allied

to Joor’s conduct, the district court overlooked a key distinction between

Allied

and this case. The plaintiff in

Allied

was awarded damages only on the theory that the stigma of banning the plaintiffs product from a uniform code caused independent marketplace harm to the plaintiff in jurisdictions that permitted the use of the plaintiffs products. In contrast, Sessions has never proved that it sustained injuries from anything other than the actions of municipal authorities: Sessions has not shown that any potential tank lining customer, in jurisdictions that were not enforcing the ... tank removal provision decided not to engage Sessions’ services because of the [Code amendment]. Nor has Sessions adduced any evidence that Joor’s actions caused independent marketplace harm in jurisdictions that continued to permit tank lining. Unlike the plaintiff in

Allied,

Sessions was not awarded damages on the theory that Joor’s ‘marketing the stigma’ of [the Code amendment] caused Sessions any loss of business independent of the losses resulting from the permit denials.

The injuries for which Sessions seeks recovery flowed directly from government action. This fact takes the case entirely out of the realm of Allied.

íjí ^ v ^ ^

To rule otherwise and hold Joor liable for injuries flowing from governmental decision-makers’ imposition of an anti-competitive restraint, we would have to find that the restraint was imposed

because of

Joor’s petitioning efforts.

Proof of causation would entail deconstructing the decision-making process to ascertain what factors prompted the various governmental bodies to erect the anticompetitive barriers at issue. This inquiry runs afoul of the principles guiding the Parker and Noerr decisions.

17 F.3d at 299, 300 (citations omitted)(emphasis added).

Santana’s argument that

Allied Tube

is controlling here does not distinguish between harm caused as a result of specifications adopted for public building projects that excluded its products and harm resulting from the “stigma” attached to its

*484

products that caused it to lose business in the non-public sector.

Allied Tube

did not sanction the conflation of harm caused by governmental adoption of a product standard or requirement, on the one hand, and harm caused independent of the adoption of the standard.

Buttressing this conclusion is the Third Circuit’s analysis in

Massachusetts School of Law,

107 F.3d at 1034-37 . After being denied ABA accreditation, the Massachusetts School of Law (“MSL”) sued the ABA and others on the theory that they had conspired to organize and enforce a group boycott in violation of section 1 of the Sherman Act and conspired to monopolize legal education, law school accreditation, and the licensing of attorneys, in violation of section 2 of the Sherman Act. MSL asserted several types of injury resulting from the ABA’s allegedly anti-competitive conduct, including a decline in enrollments because graduates of unaccredited schools cannot take the bar examination in most states. Judge Green-berg, writing for the unanimous Third Circuit panel, defined the:

substantive issues on this appeal [as] whether state or private conduct caused the injury MSL alleges it suffered because its graduates could not take the bar examination in most states, and whether, if MSL suffered an injury as a result of the ABA’s conduct, the injury was an incidental effect of the ABA’s attempt to influence the states with respect to establishing criteria for bar admission.

Id.

at 1035 . Distinguishing

Allied Tube

on the ground that its holding “specifically excluded from consideration any injury resulting from the adoption of the challenged standards by any government and dealt only with the independent marketplace effect of the defendant’s conduct,”

id.

at 1036 n. 8, the Third Circuit concluded that alleged injury arising from the inability of MSL graduates to take the bar examination in most states could not form the basis for antitrust injury. In reaching the result that there was immunity from damages caused by declining enrollments attributable to the states giving effect to the ABA adverse accreditation decision, the Third Circuit cited with approval the Ninth Circuit ruling in

Sessions. Id.

at 1036. In short, the Third Circuit recognized that there is immunity from antitrust liability where, as here, “the ‘injuries for which [plaintiff] seeks recovery flowed directly from government action.’ ”

Id.

(quoting

Sessions,

17 F.3d at 299 ).

This principle was reiterated by the Third Circuit in

Armstrong Surgical Center, Inc. v. Armstrong County Memorial Hospital,

185 F.3d 154 (3d Cir.1999). In

Armstrong,

the plaintiff claimed,

inter alia,

that the defendants’ threat to boycott plaintiffs outpatient surgery center violated the federal antitrust laws. Defendants claimed immunity to liability on the ground that the threatened boycott had been communicated to the Pennsylvania Department of Health during its consideration of plaintiffs Certificate of Need (“CON”) application, and that the plaintiffs alleged injuries resulted solely from the decision of the Department of Health to deny the CON. The Third Circuit agreed with the defense position. Writing for the majority in

Armstrong,

Judge Stapleton observed:

[E]ven where the same petitioning conduct might give rise to antitrust liability for injury

directly

caused to a competitor in the marketplace, if relief is sought solely for injury as to which the state would enjoy immunity under

Parker ,

the private petitioner also enjoys immunity....

* * * *

JY-

*

In sum, where, as here, all of the plaintiffs alleged injuries result from state

*485

action, antitrust liability cannot be imposed on a private party who induced the state action by means of concerted anticompetitive activity.

Id.

at 159,160.

Another argument advanced by Santana is that

Noerr

immunity is not available where the defendant “attempted directly to persuade anyone not to deal with” the plaintiff. (Rev. Memo, in Opp. to Bobrick’s S.J. Mot., Dkt. Entry 391, at 30 n. 12, quoting

Mass. School of Law,

107 F.3d at 1038 (quoting

Noerr,

365 U.S. at 142 , 81 S.Ct. 523 .)) Specifically, Santana asserts:

In the present case, it is undisputed that Bobrick and its co-conspirators not only stated the position that the NFPA/ ASTM E-84 standards applied to Santana but that they engaged in actual conduct directed at Santana’s customers and potential customers to enforce the standard in the marketplace. In sum, the MSL decision clearly supports a denial of Bobrick’s

Noerr

defense.

(Id.,

citation omitted.)

The language from

Noerr

on which Santana relies was used in responding to the lower court’s holding that the railroads sought the legislation with the primary intent to hurt the truckers, even if they secured no legislation. In rejecting this contention, the Court explained:

The apparent effect of these findings is to take this ease out of the category of those that involve restraints through governmental action and thus render inapplicable the principles announced above. But this effect is only apparent and cannot stand under close scrutiny.

There are no specific findings that the railroads attempted directly to persuade anyone not to deal with the truckers.

Moreover, all of the evidence in the record, both oral and documentary, deals with the railroads’ efforts to influence the passage and enforcement of laws. Circulars, speeches, newspaper articles, editorials, magazine articles, memoranda and all other documents discuss in one way or another the railroads’ charges that heavy trucks injure the roads, violate the laws and create traffic hazards, and urge that truckers should be forced to pay a fair share of the costs of rebuilding the roads, that they should be compelled to obey the laws, and that limits should be placed upon the weight of the loads they are permitted to carry. In the light of this, the findings of the District Court that the railroads’ campaign was intended to and did in fact injure the truckers in their relationships with the public and with their customers can mean no more than that the truckers sustained some direct injury as an incidental effect of the railroads’ campaign to influence governmental action and that the railroads were hopeful that this might happen.

Noerr,

365 U.S. at 142-43 , 81 S.Ct. 523 (emphasis added).

From this language, our Court of Appeals gleaned an exception to

Noerr

immunity where the defendant attempts directly to persuade anyone not to deal with the plaintiff.

16

Mass. School of Law,

107 F.3d at 1038 . Santana overlooks, however, the court’s limited application of this exception. In the

Mass. School of Law

case, the

*486

court found the exception inapplicable because,

inter alia:

if a claim for stigma injury could be advanced in circumstances [where the plaintiff was mentioned incidental to statements defending the defendant’s standard],

Noerr

immunity would be confined severely; a petitioner for governmental action is likely to urge that the action is needed to ensure that standards are met, thereby suggesting that some entities do not meet appropriate standards.

Id.

Upon reviewing the evidence, it is apparent that Santana inaccurately summarizes the defendants’ campaign as stating that the NFPA/ASTM E-84 standards applied to

Santana.

(Rev. Memo, in Opp. to Bobrick’s S.J. Mot., Dkt. Entry 391, at 30 n. 12.) Rather, the defendants attempted through various means to persuade architects and specifiers for public building projects that certain building code standards applied to

toilet partitions.

The defendants then represented to the architects and specifiers that

HDPE

did not meet this standard. While the goal of this campaign was, clearly, to take business away from Santana and other HDPE manufacturers, (Pl.Rev.Stat. of Material Facts/Sherman Act, Dkt. Entry 382, ¶¶ 69, 71-73, 90, 91, 99, 101, 102, 103, 104, 107, 109, 111, 116),

“Noerr

shields from the Sherman Act a concerted effort to influence public officials regardless of intent of purpose.”

17

Pennington,

381 U.S. at 670 , 85 S.Ct. 1585 . Indeed, the fact that the goal of the railroads in

Noerr

was to injure trucking companies did not vitiate their immunity.

See Noerr,

365 U.S. at 143-44 , 81 S.Ct. 523 .

18

Furthermore, such a broad interpretation of this exception is not supported by more recent cases. Both

Cheminor Drugs, Ltd. v. Ethyl Corp.,

168 F.3d 119, 120 (3d Cir.1999), and

Armstrong,

involved defendants who attempted to persuade the government not to “deal” with a specific entity. In

Cheminor,

an American ibuprofen manufacturer filed petitions with the Department of Commerce and the United States International Trade Commission requesting imposition of anti-dumping and countervailing duties on imports of bulk ibuprofen from an Indian manufacturer.

Armstrong

dealt with the concerted action of a hospital and several doctors to prevent the plaintiff from establishing an ambulatory surgery center. Although these cases involved a different context from the matter

sub judice,

they show that targeting petitioning activity at one entity, by itself, does not fall into the

Noerr

exception for direct persuasion not to deal. Looking at these eases as a whole, this exception should apply only when the petitioning activity consists solely of an attempt to persuade a customer to not deal with the plaintiff, without presenting broader justifications. In

Mass. School of Law,

the ABA did not merely state that “MSL is a bad institution, or that a particular student should not go there,” but that the school

*487

failed to satisfy the ABA’s accreditation process. 107 F.3d at 1038 . In

Noerr ,

the railroads pointed to the negative impact of trucking on roads and safety. Here, the defendants did not coerce the architects or specifiers to not deal with Santana, but argued that HDPE (Santana’s product) failed to meet what the defendants considered the governing safety test and could be a fire hazard. Whether or not such assertions are true is not relevant to this analysis.

Thus, to the extent that Santana premises its damages on decisions made by public officials or their agents (i.e., architects and others advising public officials) who approved specifications for phenolic toilet partitions or disapproved specifications for HDPE toilet partitions, defendants are immune from liability.

Cf. TEC Cogeneration, Inc. v. Fla. Power & Light Co.,

76 F.3d 1560 , 1572 (11th Cir.1996)(recognizing

Noerr ¡Pennington

immunity for defendant’s conduct in successfully lobbying agency to vote against construction of competing electrical transmission line because “[a]bsolute immunity from antitrust liability results where the restraint upon trade or monopolization is the result of valid governmental action as opposed to private action”);

Bristol-Myers Squibb Co. v. Ivax Corp.,

77 F.Supp.2d 606, 612 (D.N.J.2000) (holding that conduct in securing governmental exclusive marketing privileges for an anticancer drug was not subject to antitrust liability because the alleged injuries sustained by the plaintiff “were the ‘direct result’ of decisions made by government agencies”).

2. There Is No “Commercial” Exception to

Noerr/Pennington

Immunity

Santana asserts that even if defendants’ conduct falls within the

Noerr/Pennington

doctrine, immunity is not available where, as here, governmental units are the purchasers of the products at issue. (Rev. Mem. in Opp. to Bobrick’s S.J. Mot., Dkt. Entry 391, at 26.) In support of this assertion, Santana cites

Federal Trade Commission v. Superior Court Trial Lawyers Association,

493 U.S. 411 , 110 S.Ct. 768 , 107 L.Ed.2d 851 (1990).

In

Trial Lawyers,

attorneys providing representation to indigent criminal defendants under the District of Columbia Criminal Justice Act (“CJA”) agreed to decline acceptance of any new cases until the CJA rate of compensation was increased. The group boycott proved to be successful, but prompted a complaint by the Federal Trade Commission that the attorneys had entered into an illegal agreement to restrain trade. The Court distinguished

Noerr

on the ground that “the alleged restraint of trade was the intended

consequence

of public action; in this case, the boycott was the

means

by which respondents sought to obtain favorable legislation.”

Id.

at 424-25, 110 S.Ct. 768 . The Court further observed that “[t]he restraint of trade that was implemented while the boycott lasted would have had precisely the same anticompeti-tive consequences during the period even if no legislation had been enacted.”

Id.

at 425 , 110 S.Ct. 768 .

In the matter

sub judice,

Bobrick sought to convince government decision-makers to specify phenolic compartments or to exclude HDPE partitions. It was the actions of the governmental decision-makers that imposed the challenged restraint. In

Trial Lawyers,

by way of contrast, the desired governmental action ended the restraint. The Third Circuit in

Armstrong

recognized the significance of this distinction:

The limitation on

Noerr

immunity recognized in

Trial Lawyers

is inapplicable ... to a case where the sole antitrust

*488

injury is caused directly by the government action that the private defendant has helped to secure.... [I]f relief is sought solely for injury as to which the state would enjoy immunity under

Parker ,

the private petitioner also enjoys immunity.

185 F.3d at 159 . As explained in

Sandy River Nursing Care v. Aetna Casualty,

985 F.2d 1138, 1143 (1st Cir.1993):

Trial Lawyers

does not establish a “government-as-market-participant” exception to

Noerr .

What was significant about the concerted activity there was not that the government was the purchaser, but that the defendants had sought to influence the government through an economic boycott that directly affected the marketplace by,

inter alia,

constricting the supply of lawyers available for indigent criminal defendants. The Court emphasized that

Noerr

provides immunity when the alleged restraint of trade is imposed

by the government

as the intended

consequence

of the defendants’ concerted activity. [Emphasis in original.]

In this case, the alleged restraint of trade was imposed by governmental actors as the intended consequence of the challenged concerted activity. Thus, this case falls within

Noerr ,

and not within

Trial Lawyers.

Santana has not cited any other Supreme Court precedent that recognized a “market participant” or “commercial” exception to Noerr/Pennington immunity.

19

Indeed, the Court’s decision in

Pennington

is inconsistent with the recognition of the “commercial” exception advanced by Santana. In

Pennington ,

part of the challenged conduct included lobbying the Tennessee Valley Authority (“TVA”) to curtail purchases of coal on the spot market because such sales were not subject to re.quirements that the coal producers pay the miners a certain minimum wage. The jury had been instructed that this approach to the TVA would be illegal if the TVA was urged to modify its coal purchasing policies for the purpose of driving small producers out of business. The Supreme Court held that such an instruction was error because, under

Noerr ,

“[j]oint efforts to influence public officials do not violate the antitrust laws even though intended to eliminate competition.” 381 U.S. at 670 , 85 S.Ct. 1585 . The fact that the conduct in question was aimed at TVA’s purchasing policies did not enter into the analysis.

Santana nonetheless persists that there is a “long line of cases that hold ... that the

Noerr

doctrine does not immunize eon-

*489

certed action by sellers against the government when the government is acting in a commercial capacity as a buyer of goods or services.” (Rev. Mem. in Opp. to Bobrick’s S.J. Mot., Dkt. Entry 391, at 27.) Santana’s citations to this purported “long line” of decisional law begins with a 1970 First Circuit ruling,

George R. Whitten, Jr., Inc. v. Paddock Pool Builders, Inc.,

424 F.2d 25 (1st Cir.),

cert. denied,

400 U.S. 850 , 91 S.Ct. 54 , 27 L.Ed.2d 88 (1970), and ends with a 1979 decision from the District of Columbia,

General Aircraft Corp. v. Air America, Inc.,

482 F.Supp. 3 (D.D.C.1979).

20

The first case cited by Santana,

Whitten,

was decided in the context of a summary judgment motion in which the defendant conceded for purposes of presenting a

Noerr/Pennington

defense “that it had combined with dealers and others to effect the use of its specifications in the public swimming pool industry, that its specifications were so drawn that only it could comply, and that its purpose was to eliminate competition.” 424 F.2d at 27 . As described by the appellate court, the applicability of the

Noerr/Pennington

immunity was to be decided in the context of the:

government acting in a proprietary capacity, purchasing goods and services to satisfy its own needs within a framework of competitive bidding, where the initial responsibility for recommending specifications has been entrusted to a hired professional, and where the selling effort directed at that professional and his public client by a leading supplier was monopolistically motivated and ran the gamut from high pressure salesmanship to fraudulent statements and threats.

Id.

at 29 . The First Circuit rejected the defense contention that liability could not be imposed because state actors decided the content of bid specifications, reasoning that “valid government action confers antitrust immunity only when the government determines that competition is not the

summum bonum

in a particular field and deliberately attempts to provide an alternate form of public regulation.”

Id.

at 30 . The court also rejected

Noerr/Pennington

immunity because, in its view, immunity was limited to activity of a political nature undertaken in the context of “the ‘passage or enforcement of laws.’ ”

Id.

at 32 .

Neither rationale advanced in

Whitten

can withstand critical analysis. Ascertainment of whether the government has determined that competition is not the

“sum-mum bonum

” in determining bidding specifications that concern factors of quality and safety “would require the sort of deconstruction of the governmental process and probing of the official ‘intent’ that [the Supreme Court has] consistently sought to avoid.”

City of Columbia,

499 U.S. at 377 , 111 S.Ct. 1344 . The deconstruction of the decisionmaking process to determine the factors that prompted various governmental bodies to impose the challenged anticompetitive restraints was precisely the type of inquiry that the Ninth Circuit found to be contrary to “the principles guiding the

Parker

and

Noerr

decisions.”

Sessions,

17 F.3d at 300 ;

see also Hedgecock,

1995 WL 161649, at *3 . As to the

Whitten

court’s explanation that

Noerr/Pennington

immunity is limited to activity of a “political nature” in the context of “passage or enforcement of laws,” 424 F.2d at 32 , it is sufficient to observe that

Noerr/Pennington

has been applied to activities other than the publicity campaign at issue in

Noerr

and in contexts that did not involve the passage or en

*490

forcement of laws.

E.g., Bedell,

263 F.3d at 250-54 (negotiating settlement agreement to resolve tobacco liability litigation);

Cheminor,

168 F.3d 119 (petition requesting imposition of anti-dumping and countervailing duties on imports of ibuprofen from India);

Armstrong,

185 F.3d at 160-64 (representations made in opposing issuance of a CON to a competitor). Finally, recognition of a “commercial” exception as suggested by

Whitten

cannot be reconciled with the Supreme Court’s following observation in the subsequent case of

California Motor Transport:

[I]t would be destructive of rights of association and of petition to hold that groups with common interests may not, without violating the antitrust laws, use the channels and procedures of state and federal agencies and courts to advocate their causes and points of view

respecting resolution of their business and economic interests vis-a-vis their competitors.

404 U.S. at 510-11 , 92 S.Ct. 609 (emphasis added).

Other courts have recognized that the holding in

Whitten

may not be consonant with subsequent Supreme Court holdings.

See, e.g., In re Airport Car Rental Antitrust Litig.,

693 F.2d 84, 87 (9th Cir.1982) (“It is possible that

California Motor Transport

implicitly overruled ...

Whitten.”), cert. denied,

462 U.S. 1133 , 103 S.Ct. 3114 , 77 L.Ed.2d 1368 (1983);

Bustop Shelters, Inc. v. Convenience & Safety Corp.,

521 F.Supp. 989, 996 (S.D.N.Y.1981)(WMftere has “been disapproved in this circuit, as implicitly overruled or weakened by

California Motor Transport ”).

Indeed,

Allied Tube

explicitly sanctioned concerted efforts to influence governmental actors with respect to

either

the safety

or

the competitive threat of a particular product. 486 U.S. at 510 , 108 S.Ct. 1931 .

In

Greenwood Utilities Commission v. Mississippi Power Co.,

751 F.2d 1484, 1505 (5th Cir.1985), the court refused to recognize a commercial exception to

Noerr/Pennington

immunity because, “although such a distinction may be intuitively appealing it proves difficult, if not impossible, of application ... where the government engages in a policy decision and at the same time acts as a participant in the marketplace.” The court explained that rejection of a commercial exception was appropriate because there is no bright line test for determining when the government engages in a purely commercial decision and when it is acting in a regulatory capacity or making a policy decision.

Id.

at 1505 n. 14.

21

In

Independent Taxicab Drivers’ Employees v. Greater Houston Transportation Co.,

760 F.2d 607 (5th Cir.1985), the Fifth Circuit reaffirmed its conclusion that there is no commercial exception to

Noerr/Penning-ton

immunity, explaining that “[i]t would be anomalous to hold on the one hand that government can contract with private entities to effectuate valid, albeit anticompetitive, policies, while holding on the other hand that private entities cannot petition government to participate in the public endeavor. There is no such case as

Parker v. Noerr/Pennington.” Id.

at 613. Other courts have similarly declined to carve out a “commercial” exception to

Noerr/Pennington

immunity.

See, e.g., Bristol-Myers,

77 F.Supp.2d at 615 (“ ‘If the injury flows directly from a

*491

governmental action then there is no liability for the private party, notwithstanding that the ‘commercial’ defendant urged the government to take ‘commercial’ action.’ ”);

Bright v. Ogden City,

635 F.Supp. 31, 35 (D.Utah 1985);

United States v. Johns-Manville Corp.,

259 F.Supp. 440, 452-53 (E.D.Pa.1966)(“[A]ny concerted activities ... to influence the decision of public officials on pipe specifications are constitutionally protected and cannot be the basis of a finding of violation of the antitrust laws regardless of the intent with which they were undertaken.”) (citation omitted).

The weight of the authority plainly preponderates against recognition of a commercial exception to

Noerr/Pennington

immunity. Moreover, the rationale for rejecting a commercial exception is consistent with Supreme Court pronouncements and is convincing. It is difficult to ascertain when a governmental actor is acting solely in a commercial capacity. As Bo-brick points out, the specification decisions assailed here implicate not only price, but also safety, calling, at least arguably, for a policy decision. In addition, as the Ninth Circuit recognized in

In re Airport Car Rental Antitrust Litigation,

decisions concerning implementation of policy are just as important as the setting of policy, and petitioning regarding such decisions is entitled to as much protection as petitioning regarding strict policy matters. 693 F.2d at 87-88 .

22

Moreover, determining whether a decision was motivated solely by commercial considerations becomes even more difficult when there are literally hundreds of governmental decisionmakers. Finally, courts would be called upon to deconstruct government decisions in order to determine whether improper conduct prompted those decisions, the type of intrusion into state and local governmental affairs that

Noerr/Pennington

is intended to avoid. As explained by Judge Walls in

Bristol-Myers:

Antitrust immunity is not destroyed by a commercial relationship between the government and a private actor. If that were so, courts would be called upon to frustrate First Amendment rights whenever the government stood to profit from its decisions.... Without express declaration of Congress, the [commercial] exception cannot swallow the reaching rule of immunity ....

77 F.Supp.2d at 615 . Accordingly,

Noerr/Pennington

immunity is not defeated in this case by the fact that state and local governments were acting as product purchasers.

3. There Is No “Fraud” Exception to

Noerr/Pennington

Immunity

Santana asserts that, in any event, allegations that Bobrick engaged in fraud in seeking to affect specification decisions vitiates the

Noerr/Pennington

defense. In support of this assertion, Santana relies upon

Cheminor .

Contrary to Santana’s assertion,

Chemi-nor

did not hold that misrepresentations undermine a

Noerr/Pennington

defense. Indeed, the Third Circuit in

Cheminor

“decline[d] to carve out a new exception to the broad immunity that

Noerr/Pennington

provides.” 168 F.3d at 123 . Instead,

Cheminor

involved application of the settled two-step test for determining whether the “sham” exception to

Noerr/Pennington

immunity applied. The first prong of this test requires the courts to ascertain

*492

whether the position taken by the defendant “is objectively meritless.”

Id.

at 122-23 . If so, the court is to ascertain whether the baseless petition was “ ‘an attempt to interfere

directly

with the business relationships of a competitor, through the use of governmental

process

— as opposed to the outcome of that process — as an anti-competitive weapon.’ ”

Id.

(quoting

Prof'l Real Estate Investors v. Columbia Pictures Indus., Inc.,

508 U.S. 49, 63 , 113 S.Ct. 1920 , 123 L.Ed.2d 611 (1993)). Santana’s discussion ignores the fact that

Che-minor

concerned only the first prong of the “sham” exception.

Significantly, the Third Circuit in

Armstrong,

decided subsequent to

Cheminor ,

held that it is unnecessary to determine whether the position advanced by the defendant is objectively meritless where it is clear that the defendant’s purpose was to obtain the outcome of the process. 185 F.3d at 158 n. 2. In this case, there is no dispute that the defendants were focused on the outcome of their advertising campaign' — to convince customers to use their product. Thus, the sham exception, which is limited to “situations in which persons use the governmental process — as opposed to the

outcome

of that process — as an anti-competitive weapon,”

City of Columbia,

499 U.S. at 380 , 111 S.Ct. 1344 , is not applicable here.

Armstrong

also held that the alleged misrepresentation made by the defendants in connection with the Department of Health’s consideration of the plaintiffs CON application did not undermine

Noerr/Pennington

immunity. Citing

City of Columbia ,

in which the Supreme Court ruled that there is no exception to

Parker

and

Noerr/Pennington

immunity for conspiracies between governmental and private actors, the Third Circuit explained that “[ljiability for injuries caused by [states acting as regulators] is precluded even where it is alleged that a private party urging the action did so by bribery, deceit or other wrongful conduct that may have affected the decision making process.” 185 F.3d at 162 . The court explained that the remedy in such circumstances rests with other laws directed to that conduct, and “not with courts looking behind sovereign state action at the behest of antitrust plaintiffs.”

Armstrong

compels rejection of Santana’s contention that

Noerr/Pennington

immunity is inapplicable where the defendant’s otherwise protected activity is rife with fraud.

Noerr

itself recognized that immunity applies even though the defendants had employed deceptive and unethical means. 365 U.S. at 145 , 81 S.Ct. 523 . Thus, defendants are entitled to

Noerr/Pennington

immunity, at least to the extent that Santana seeks to recover damages resulting from decisions by governmental actors to specify phenolic toilet compartments or to prohibit HDPE toilet partitions.

4. The

Noerr/Pennington

Doctrine Is Applicable to Each of Santana’s Claims

This conclusion applies with equal force not only to Santana’s antitrust claims, but also to its claims of tortious interference with prospective contractual relationships and violations of the Lanham Act. In

Cheminor ,

our Court of Appeals explicitly ruled that the

Noerr/Pennington

doctrine extends to bar immunity on common law tort claims of malicious prosecution, tortious interference with contract, tortious interference with prospective economic advantage, and unfair competition. 168 F.3d at 128 .

Santana does not contest the application of the

Noerr/Pennington

doctrine to its common law tort claim. It does, however, argue that

Noerr/Pennington

does not ex

*493

tend to its Lanham Act claim because commercial speech may be regulated without abridging First Amendment protections.

There is no Supreme Court or Third Circuit precedent addressing the applicability of

Noerr/Pennington

immunity to Lanham Act § 43(a) claims. The Supreme Court, however, has indicated that

Noerr/Pennington

is applicable in contexts other than antitrust suits.

See Prof'l Real Estate Investors,

508 U.S. at 58-59 , 113 S.Ct. 1920 . Our Court of Appeals, in addition to extending

Noerr

to common law claims, has ruled that

Noerr/Pennington

extends immunity to claims under 42 U.S.C. § 1983 .

See Herr v. Peque a Township,

274 F.3d 109, 115-18 (3d Cir.2001). Emphasizing that the principle established by

Noerr

is intended to assure free flow of information to government decisionmak-ers, our Court of Appeals held that not only individuals, but also municipalities, are entitled to immunity from liability arising out of petitioning conduct.

Id.

at 120. Other courts have similarly extended

Noerr/Pennington

immunity beyond antitrust claims. For example, the Seventh Circuit has held that the

Noerr/Penning-ton

doctrine precluded liability under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961 ,

et seq.,

for alleged fraud committed by cigarette manufacturers in seeking to influence Congress to pass favorable legislation and to defeat unfavorable bills.

Int'l Bhd. of Teamsters, Local 781 Health & Welfare Trust Fund v. Philip Morris, Inc.,

196 F.3d 818, 826 (7th Cir.1999).

The same rationale that has compelled courts to extend

Noerr/Pennington

immunity beyond the antitrust context persuades me that

Noerr/Pennington

should also extend to Lanham Act § 43(a) claims. Exercise of the right to petition the government would be restrained if immunity did not extend to Lanham Act claims. Just as the antitrust laws were enacted to regulate private business, so too was the Lanham Act. Like the Sherman Act, the Lanham Act is intended to control “business activity” and not “political activity.” Thus, where, as here, the challenged conduct falls within the First Amendment right to petition the government,

Noerr/Pennington

immunity must extend even to Lanham Act § 43(a) claims.

23

Extending

Noerr/Pennington

immunity to Lanham Act claims furthers not only the interest in assuring free-flowing information to government decisionmakers, but also the interest in avoiding judicial deconstruction of valid governmental decisions by public officials.

See Sessions,

17 F.3d at 302 . Santana acknowledges that its

*494

right to recover monetary damages is dependent upon establishing “customer reliance” on the allegedly deceptive advertising. (Rev. Mem. in Support of PI. S.J. Mot./Lanham Act, Dkt. Entry 385, at 9.) Thus, the factors that induced government decisionmakers would be at issue in this litigation. Just as “the antitrust laws are not intended to precipitate such deconstruction of public decision-making ...,”

Sessions,

17 F.3d at 302 , so, too, should the Lanham Act be construed to avoid intrusive examination of the motives of government officials.

In conclusion, Bobrick is entitled to immunity on each of Santana’s claims to the extent that Santana premises liability on decisions by governmental actors.

See Pennington,

381 U.S. at 671 , 85 S.Ct. 1585 (under the

Noerv

doctrine, jury should have been instructed to exclude any damages for injuries sustained as a result of government decisions to curtail coal purchases induced by defendants). Analysis of Santana’s claims against Bobrick will, therefore, be restricted to injury purportedly sustained as a result of private sector conduct.

24

C. Affirmative Defenses Pertaining to the Timeliness of the Filing of this Action

Bobrick has raised statute of limitations defenses to each of the discrete claims asserted by Santana. In addition, Bobrick contends that Santana’s Lanham Act claim should be dismissed under the doctrine of laches. The timeliness of the Sherman Act, Lanham Act, and tortious interference with prospective contractual relations claims will each be addressed separately.

1. Timeliness of the Sherman Act Claims

A four-year statute of limitations governs claims under the Sherman Act.

See

15 U.S.C. § 15b. Santana brought this action on October 1, 1996. The dispositive question on Bobrick’s statute of limitations defense is whether Santana’s claims accrued prior to October 1,1992.

“Generally, a cause of action [under the antitrust laws] accrues and the statute begins to run when a defendant commits an act that injures a plaintiffs business.”

Zenith Radio Corp. v. Hazeltine Research, Inc.,

401 U.S. 321, 338 , 91 S.Ct. 795 , 28 L.Ed.2d 77 (1971). Contending that the alleged conspiracy was created and acts in furtherance of the conspiracy were taken before October 1, 1992, Bobrick maintains that Santana’s claim under § 1 of the Sherman Act is time-barred and Santana’s claim under § 2 of the Sherman Act is barred to the extent it relates to actions taken by Bobrick and others prior to October 1, 1992. Santana counters by arguing that Bobrick’s conduct was part of a continuing conspiracy to violate the antitrust laws, so that Santana is entitled to recover at least those damages incurred within four years of the filing of this lawsuit.

In

Hanover Shoe, Inc. v. United Shoe Machinery Corp.,

392 U.S. 481 , 502 n. 15,

*495

88 S.Ct. 2224 , 20 L.Ed.2d 1281 (1968), the Court held that, in the context of a continuing violation of the Sherman Act, a plaintiff may recover damages sustained within the limitations period. In

Zenith,

the Court explained:

In the context of a continuing conspiracy to violate the antitrust laws, ... each time a plaintiff is injured by an act of the defendants a cause of action accrues to him to recover the damages caused by that act and that, as to those damages, the statute of limitations runs from the commission of the act.

401 U.S. at 338 , 91 S.Ct. 795 . As further explained by Justice Breyer in

Klehr v. A.O. Smith Corp.,

521 U.S. 179, 189 , 117 S.Ct. 1984 , 138 L.Ed.2d 373 (1997):

Antitrust law provides that, in the case of a ‘continuing violation,’ say, a price-fixing conspiracy that brings about a series of unlawfully high priced sales over a period of years, ‘each overt act that is part of the violation and that injures the plaintiff,’

e.g.,

each sale to the plaintiff, ‘starts the statutory period running again, regardless of the plaintiffs knowledge of the alleged illegality at much earlier times.’. But the commission of a separate new overt act generally does not permit the plaintiff to recover for the injury caused by old overt acts outside the limitations period. [Citations omitted.]

Santana has presented evidence from which it may be inferred that it sustained injury within four years of filing this litigation by being unable to bid on budding projects as a result of actions attributable to Bobrick and its alleged co-conspirators. The critical question here, therefore, is whether there is evidence of overt acts in furtherance of the conspiracy committed after September 30,1992.

Citing precedents from the Sixth Circuit, Bobrick maintains that “an ‘overt act’ restarting the statute of limitations must have two elements: ‘(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.’ ” (Rev. Mem. in Support of Bobrick’s S.J. Mot., Dkt. Entry 405, at 84, quoting

Advance Stores Co. v. Refinishing Specialties, Inc.,

188 F.3d 408, 411 (6th Cir.1999.)) To the extent that Bo-brick implies that there must be a causal relationship between the overt act committed within the limitations period and the injuries sustained by plaintiff, its argument is not consistent with Third Circuit law. Our Court of Appeals has held that overt acts committed within the limitations period need not themselves cause the alleged injury.

In re Lower Lake Erie Iron Ore Antitrust Litig.,

998 F.2d 1144, 1172 (3d Cir.1993). “It is the effectiveness of the overall conspiracy that causes damages.”

Id.

Santana proffers a 1993 videotape produced by Bobrick, titled “You Be The Judge,” and a 1995 advertisement as examples of overt acts occurring within the limitations period. Contrary to Bobrick’s assertions, the videotape and ad are not mere reaffirmations of acts occurring outside the limitations period. The creation of a new video production in support of “fire scare” marketing, as well as a new advertisement to be published in a national journal, and the use of both on prospective purchasers, are plainly new and independent acts. The fact that these new activities are consistent with the general tenor of the alleged conspiracy does not make them mere “reaffirmations” of previous conduct. Just as each sale to a plaintiff in a price-fixing conspiracy was recognized by Justice Breyer as “ ‘starting] the statutory period running again, regardless of the plaintiffs knowledge of the alleged illegality at much earlier times,’ ”

Klehr,

521

*496

U.S. at 189, 117 S.Ct. 1984 , so, too, Bo-brick’s development of a new “fire scare” marketing piece to dissuade use of HPDE toilet partitions commenced anew the running of the four-year limitations period.

25

Bobrick contends that the 1993 videotape and 1995 advertisement have not been shown by Santana to be part of the alleged conspiracy. In support of this argument, Bobrick points out that the TPMC was disbanded in 1991, and the 1995 advertisement came after Santana’s litigation against members of the TPMC and Formica was settled in 1994.

26

The burden of establishing the absence of a genuine issue of material fact is, of course, on Bobrick. The fact that the marketing tools were used only after the TPMC was disbanded does not mandate a finding that they are unconnected to the alleged conspiracy. Bobrick has failed to establish that no rational jury could find that the conspiracy was in existence at least at the time of the production of the 1993 videotape. Of course, if the Sherman Act § 1 claim had survived a merits analysis at the summary judgment stage, at trial it would have been Santana’s burden to establish that the conspiracy was still in effect after September 30, 1992, and that at least one of the conspirators took an overt action in furtherance of the conspiracy after that date.

See In re Lower Lake Erie,

998 F.2d at 1173 . A determination on this question, however, is not compelled by the evidence at this time. Thus, Bobrick’s motion to dismiss all or part of the Sherman Act claims as time-barred will be denied.

27

*497

2. Timeliness of the Lanham Act Claims

Because Congress has not prescribed a limitations period for Lanham Act claims, but does subject them to “the principles of equity,” 15 U.S.C. § 1117 (a), Bobrick’s challenge to the timeliness of Santana’s Lanham Act § 43(a) claim proceeds on separate, but parallel planes: Bobrick first contends that Santana’s Lanham Act claim is barred, or closely confined, by a two-year statute of limitations period appropriated from Pennsylvania law; Bobrick additionally asserts that Santana’s claim is barred by the doctrine of laches, with a presumption of undue prejudice arising from the lapse of time in bringing the claim after Santana was on notice of purportedly actionable conduct.

Bobrick’s twin-approach to the timeliness issue is reflective of the uncertainty in this jurisdiction on the question of whether Lanham Act claims for damages are subject to traditional statute of limitations analysis, as some courts have held, or fall within the equitable doctrine of laches.

See Guardian Life Ins. Co. v. Am. Guardian Life Assurance Co.,

943 F.Supp. 509, 518 (E.D.Pa.1996)(citing cases applying statutes of limitations to preclude damage claims under the Lanham Act that fall outside the limitations period and cases holding that the doctrine of laches governs the availability of damages and injunctive relief under the Lanham Act),

abrogated on other grounds by A & H Sportswear, Inc. v. Victoria’s Secret Stores, Inc.,

237 F.3d 198 (3d Cir.2000). For example, the Seventh Circuit has held that § 43(a) claims for damages and injunctive relief based upon false advertising are governed by the doctrine of laches because “[t]he Lanham Act specifically contemplates that both injunctive relief and awards of damages for violations of 11 U.S.C. § 1125 shall be subject to the principles of equity, which include the doctrine of laches.”

Hot Wax, Inc. v. Turtle Wax, Inc.,

191 F.3d 813, 822 (7th Cir.1999). The Third Circuit, however, has not specifically addressed this issue.

Although laches is an equitable defense, ascertainment of an otherwise applicable limitations period is an integral component of the analysis.

See Conopco Inc. v. Campbell Soup Co.,

95 F.3d 187, 191 (2d Cir.1996). The appropriate limitations period serves “as a baseline for determining whether a presumption of laches exists.”

Hot Wax,

191 F.3d at 821 . Therefore, regardless of whether the timeliness of Santana’s claim is governed by standard limitations analysis or the doctrine of lach-es, the first task is to ascertain the otherwise applicable limitations period.

The Supreme Court has held that “[w]hen Congress has not established a time limitation for a federal cause of action, the settled practice has been to adopt a local time limitation as federal law if it is not inconsistent with federal law or policy to do so.”

Wilson v. Garcia,

471 U.S. 261 ,

*498

266, 105 S.Ct. 1938 , 85 L.Ed.2d 254 (1985). Our Court of Appeals has not definitively decided the question of what statute of limitations controls a Lanham Act false advertising claim brought in a Pennsylvania federal district court. It has, however, provided the analytical framework for resolution of this issue.

In

Island Insteel Systems, Inc. v. Waters,

296 F.3d 200 (3d Cir.2002), the court was called upon to decide the applicable limitations period for trademark infringement under § 43(a) of the Lanham Act for an action brought in the District of the Virgin Islands. Three Virgin Islands statutory limitations periods were considered: (1) a “catch-all” six-year limitations period governing actions or claims created by a statute that lacks a statute of limitations; (2) the statute of limitations governing common law fraud claims; and (3) the statute of limitations applicable to claims brought under deceptive trade practices legislation enacted by the Virgin Islands legislature. The Third Circuit, speaking through Chief Judge Becker, rejected the catch-all six-year period because plaintiff had not identified a sufficiently analogous claim under Virgin Islands law governed by the residual limitations period.

Id.

at 208-09.

28

Chief Judge Becker then compared the elements of a trademark infringement claim with the elements of common law fraud and a claim under the Virgin Islands deceptive trade practices statute. While acknowledging a substantial body of precedent applying the fraud statute of limitations to Lanham Act claims for trademark infringement,

id.

at 211, Judge Becker wrote that the elements of a deceptive trade practices claim were more closely aligned with the elements of a trademark infringement claim under the Lanham Act:

Like a trademark infringement action under § 43(a), but unlike an action for common law fraud, an action for deceptive trade practices does not require proof of scienter. Moreover, while a common law fraud claim requires a plaintiff to prove actual reliance, an action for deceptive trade practices simply requires proof that the practice at issue has the “tendency or effect of deceiving or misleading consumers,” which more closely resembles the “likelihood of confusion” element that is the touchstone of a § 43(a) claim....

‡ ij: ‡ ‡ ‡ ‡

Thus, although the Virgin Islands deceptive trade practices statute applies to a narrower range of transactions than common law fraud, within the range of covered transactions the conduct that renders a seller liable under the Virgin Islands deceptive trade practices statute bears a strong resemblance to the conduct that renders a seller hable for

*499

trademark infringement under § 43(a)....

‡ ‡ ‡ ‡

We therefore hold that the cause of action under Virgin Islands law most analogous to a trademark infringement claim under § 43(a) of the Lanham Act, for purposes of borrowing a statute of limitations, is a cause of action under 12A V.I.C. § 108 for deceptive trade practices in violation of 12A V.I.C. § 101.

Id.

at 204, 214.

The analysis employed in

Island Insteel

compels rejection of Bobrick’s contention that Santana’s § 43(a) claim should be governed by the statute of limitations applicable to common law tort claims, as opposed to the limitations period governing claims brought under Pennsylvania’s unfair trade practices legislation. To prevail on a claim of false or deceptive advertising under § 43(a) of the Lanham Act, a plaintiff must show:

1) that the defendant has made false or misleading statements as to his own product (or another’s); 2) that there is actual deception or at least a tendency to deceive a substantial portion of the intended audience; 3) that the deception is material in that it is likely to influence purchasing decisions; 4) that the advertised goods traveled in interstate commerce; and 5) that there is a likelihood of injury to the plaintiff in terms of declining sales, loss of good will, etc.

Johnson & Johnson-Merck Consumer Pharms, Co. v. Rhone-Poulenc Rorer Pharms., Inc.,

19 F.3d 125, 129 (3d Cir.1994). The Pennsylvania Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), 73 Pa. Cons.Stat. Ann. § 201-1

et seq.,

includes as “unfair methods of competition” representations that “goods or services have ... characteristics ... that they do not have” and “[disparaging the goods, services or business of another by false or misleading representation of fact.” 73 Pa. Cons.Stat. Ann. § 201-1(4)(v), (viii). Notably, unlike common law fraud, the false advertising components of the Lanham Act and the UTPCPL do not require proof of an intent to deceive,

see Serbin v. Ziebart International Corp.,

11 F.3d 1163, 1166-67 (3d Cir.1993), or actual rebanee upon a misrepresentation of fact.

See Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck Consumer Pharms. Co.,

290 F.3d 578, 586 (3d Cir.2002). Moreover, like the Lanham Act, the UTPCPL “supplements rather than supplants traditional common law remedies with

per se

hability for a variety of unfair trade practices.”

Gabriel v. O’Hara,

368 Pa.Super. 383 , 534 A.2d 488, 491 (1987). Indeed, the UTPCPL is modeled on the Federal Trade Commission Act and the Lanham Act.

Id.

at 491 n. 7. Thus, consistent with the holding in

Island Insteel,

the cause of action under Pennsylvania law most analogous to Santana’s § 43(a) claim, for purposes of borrowing a statute of limitations, is a cause of action under the UTPCPL for unfair methods of competition.

29

*500

Unlike Virgin Islands law, there is no statutorily-prescribed limitations period for a claini under the UTPCPL. There is, however, Pennsylvania appellate court authority applying Pennsylvania’s residual statutory limitations period to UTPCPL claims.

30

In

Gabriel,

534 A.2d at 495-96 , the Superior Court, reasoning that unfair methods of competition claims under the UTPCPL are not sufficiently analogous to claims of “fraud” or “deceit,” ruled that UTPCPL claims should be governed by the six-year “catch all” statute of limitations.

Although this Superior Court decision is not controlling, it must be accorded “ 'significant weight in the absence of an indication that the highest state court would rule otherwise.’ ”

Polselli v. Nationwide Mut Fire Ins. Co.,

126 F.3d 524 , 528 n. 3 (3d Cir.1997). Bobrick has not presented any argument as to why the Pennsylvania Supreme Court would disagree with the holding in

Gabriel .

Thus, like the Eastern District of Pennsylvania in

Algrant v. Evergreen Valley Nurseries, Ltd.,

941 F.Supp. 495, 499 (E.D.Pa.1996), I find that

Gabriel

is reflective of Pennsylvania law and determine that the six year limitations period applicable to claims under the UTPCPL also governs Santana’s § 43(a) false advertising claim.

31

Accordingly, under traditional statute of limitations analysis, Santana is entitled to pursue claims for conduct actionable under § 43(a) of the Lanham Act occurring up to six years prior to the commencement of this litigation.

See Island Insteel,

296 F.3d at 214 n. 8.

Bobrick nonetheless insists that application of the doctrine of laches requires dismissal of Santana’s Lanham Act claims. “In the Third Circuit, laches will serve to bar both monetary and injunctive relief in the face of (1) an inexcusable delay in bringing suit which results in (2) severe prejudice to the party defending the claims brought against it.”

Joint Stock Soc’y v. UDV N. Am., Inc.,

53 F.Supp.2d 692, 712-13 (D.Del.1999),

aff'd on other grounds,

266 F.3d 164 (3d Cir.2001). Where the delay in bringing suit exceeds the applicable limitations period, the plaintiff “must ‘come forward and prove that [its] delay was excusable and that it did not unduly prejudice’ [its] opponents.”

Id.

at 713. That is, “[p]rior to the running of the statute, the defendant has to prove laches, but thereafter the plaintiff has to disprove laches.”

Churma v. Unit

*501

ed States Steel Corp.,

514 F.2d 589, 593 (3d Cir.1975). For purposes of “determining the presumption of laches, the limitations period runs from the time the plaintiff knew or should have known about his § 43(a) cause of action.”

Jarrow Formulas, Inc. v. Nutrition Now, Inc.,

304 F.3d 829, 838 (9th Cir.2002). In the context of a continuing wrong, therefore, the presumption of laches is triggered if the plaintiff knew or should have known about the claimed wrongful conduct beyond the limitations period.

Id.

at 837 . As explained in

Jarrow:

To hold otherwise would “effectively swallow the rule of laches, and render it a spineless defense.” The plaintiff should not be entitled to the strong presumption against laches simply because some of the defendant’s wrongful conduct occurred within the limitations period. Laches penalizes dilatory conduct; as such, the presumption is that a § 43(a) plaintiff is barred if he fails to file suit promptly when the defendant commences the wrongful conduct.

Id.

at 837-38 (citations omitted).

Santana does not dispute Bobrick’s assertion that Santana was aware of Bobrick’s allegedly wrongful conduct in 1989, more than seven years before this action was brought. Therefore, a presumption of laches pertains, and the burden is on Santana to proffer evidence (a) that its delay in bringing this action was excusable, and (b) that Bobrick is not materially prejudiced as a result of the delay.

Santana purports to excuse its delay by claiming that it repeatedly provided notice to Bobrick that Santana considered the alleged “fire scare” tactics to be wrongful. Contrary to Santana’s assertion, merely “warning” a defendant does not justify delay in commencing litigation.

See Hot Wax,

191 F.3d at 823-24 .

Santana, however, has proffered sufficient evidence that Bobrick did not suffer material prejudice as a result of the delay. With respect to witnesses who are now unavailable, Santana has shown that there were no witnesses who passed away or otherwise became unavailable during the period of delay, i.e., from 1989 to October 1, 1996.

32

Santana has also persuasively argued that Bobrick was not materially prejudiced by the loss of any evidence that may have occurred prior to the initiation of this litigation.

As to any prejudice attributable to Bo-brick’s continued pursuit of its advertising campaign, Santana has proffered evidence that Bobrick characterized the financial resources devoted to its campaign as “negligible.” Thus, this case stands in stark contrast to

Hot Wax,

191 F.3d at 824 , and

Conopco,

95 F.3d at 192-93 , in which there was evidence of enormous expenditures of resources in pursuit of advertising strategies during the period of delay. Accordingly, Bobrick’s motion for summary judgment on the Lanham Act claim based upon the doctrine of laches will be denied.

3. Timeliness of the Interference With Prospective Contract Claim

Observing that Santana’s intentional interference with prospective contractual relationships claim is based upon an averment that Bobrick “knowingly and intentionally made false and malicious allegations and misrepresentations with regard to [Santana’s] products ...,” (Complaint, ¶ 84), Bobrick asserts that this

*502

claim is governed by the one year limitations period applicable to actions for defamation.

33

In support of this assertion, Bobrick cites,

inter alia, Evans v. Philadelphia Newspapers, Inc.,

411 Pa.Super. 244 , 601 A.2d 330, 334-35 (1991), in which the court applied the one-year statute of limitations to a tortious interference claim that was based upon allegedly defamatory conduct. In reaching this result, the Superior Court, quoting the trial court, reasoned that ‘“where the gravamen of an action for interference with a contractual relationship is based on the commission of a tort [such as defamation] the statute of limitations for that tort must govern.’ ”

Id.

at 333 .

Santana, contending that the one-year limitations period should apply only when the plaintiff seeks to recover for damage to reputation, argues that the two year limitations period of 42 Pa. Cons.Stat. Ann. § 5524(3) controls its tortious interference claim.

34

In support of its position, Santana relies upon the Pennsylvania Superior Court’s decision in

Pro Golf Manufacturing Inc. v. Tribune Review Newspaper Co.,

761 A.2d 553 (Pa.Super.2000),

rev’d,

570 Pa. 242 , 809 A.2d 243 (2002). In

Pro Golf,

the Superior Court held that a claim of commercial disparagement, for which the plaintiff sought to recover damages for economic injury as opposed to harm to reputation, was governed by the two year limitations period. Santana reasons that because “the Pennsylvania court has likened commercial disparagement to unfair competition, the facts alleged in support of Santana’s tortious interference claim would render it subject to the two-year statute of limitations.” (Rev. Mem. in Opp. to Bobrick’s S.J. Mot., Dkt. Entry 391, at 77.)

The Pennsylvania Supreme Court’s reversal of the Superior Court’s decision in

Pro Golf

undermines Santana’s argument. The unanimous Supreme Court, speaking through Chief Justice Zappala, observed that the label attached to the claim, “commercial disparagement,” did not remove the cause of action from the statute of limitations applicable to slander. 809 A.2d at 246 . Central to the court’s conclusion was the recognition that the underlying conduct animating the particular economic tort claim determines the appropriate limitations period.

In

Pro Golf,

the Pennsylvania Supreme Court stated that a claim labeled “commercial disparagement” could be termed “ ‘interference with prospective advantage.’ ”

Id.

Santana itself has acknowledged this fact. Because the “interference with prospective advantage” claim in this case is based upon allegedly defamatory conduct, Santana’s interference with prospective contractual relationship claim, like the claim in

Pro Golf,

is governed by a one-year limitations period.

As pointed out by Bobrick, Santana has not identified any prospective non-public sector contractual arrangement lost during the one-year period before the commencement of this action. Accordingly, Bo-brick’s motion for summary judgment on the tortious interference claim based upon the running of the statute of limitations will be granted.

35

*503

D. Santana’s Claim under Section 1 of the Sherman Act

Santana has moved for summary judgment on its claim under section 1 of the Sherman Act. It argues that the discovery record compels the conclusion that the defendants were part of a conspiracy to restrain trade in the toilet partition market and that the conspirators’ conduct falls within the

“per se

” rule of liability. The defendants have moved separately for summary judgment on this claim, asserting that their conduct is not subject to the

per se

rule and that the voluminous discovery record fails to present sufficient facts to warrant a jury trial on any of the elements of a section 1 claim.

Section 1 of the Sherman Act provides that “[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States ... is declared to be illegal.” 15 U.S.C. § 1 . Unless the defendants’ conduct falls within the parameters of the

per se

rule, a plaintiff pursuing a section 1 claim must show: “(1) concerted action by the defendants; (2) that produced anticompetitive effects within the relevant product and geographic markets; (3) that the objects of the conduct pursuant to the concerted action were illegal; and (4) that it was injured as a proximate result of the concerted action.”

Petruzzi’s IGA Supermarkets, Inc. v. Darling-Delaware Co.,

998 F.2d 1224 , 1229 (3d Cir.1993).

36

“Without proof of all of these elements, a plaintiff cannot maintain a section 1 claim.”

Id.

1. Concerted Action

The

sine qua non

of section 1 liability is concerted action.

37

“ ‘Unilateral action, no matter what its motivation, cannot violate [section 1].’ ”

Siegel Transfer, Inc. v. Carrier Express, Inc.,

54 F.3d 1125, 1131 (3d Cir.1995)(quoting

Edward J. Sweeney & Sons, Inc. v. Texaco, Inc.,

637 F.2d 105, 110 (3d Cir.1980)). Thus, regardless of whether the conduct in question falls within the

per se

rule, the threshold question presented on the parties’ summary judgment motions is whether the evidence establishes that the defendants were part of a concerted effort to restrain trade in the pertinent market, or that there is at least sufficient evidence to warrant submission of the issue to a jury.

“The very essence of a section 1 claim, of course, is the existence of an agreement.” Alv

ord-Polk, Inc. v. F. Schumacher & Co.,

37 F.3d 996, 999 (3d Cir.1994). A “‘unity of purpose or a common design and understanding or a meeting of the minds in an unlawful arrangement’ must exist to trigger section 1 liability.”

Copperweld Corp. v. Independence Tube Corp.,

467 U.S. 752, 771 , 104 S.Ct. 2731 , 81 L.Ed.2d 628 (1984)(quoting

Am. Tobacco

*504

Co. v. United States,

328 U.S. 781, 810 , 66 S.Ct. 1125 , 90 L.Ed. 1575 (1946)).

“A plaintiff may utilize either direct or circumstantial evidence in order to make out the element of concerted action.”

Rossi v. Standard Roofing, Inc.,

156 F.3d 452, 465 (3d Cir.1998). “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.”

In re Baby Food,

166 F.3d at 118. “[W]hen the plaintiff has put forth direct evidence of conspiracy, the fact finder is not required to make inferences to establish facts .... ”

Rossi,

156 F.3d at 466 . Where, however, the plaintiff fails to adduce direct evidence of conspiracy, the inferences to be drawn from circumstantial evidence are circumscribed.

Id.

at 465-66 . In order to survive a motion for summary judgment in such circumstances, a plaintiff must proffer evidence “that tends to exclude the possibility of independent action.”

Monsanto Co. v. Spray-Rite Serv. Corp.,

465 U.S. 752 , 768, 104 S.Ct. 1464 , 79 L.Ed.2d 775 (1984). As explained in

Rossi :

The Supreme Court’s concerns about permitting the inference of a conspiracy from ambiguous circumstantial evidence in the antitrust context stem from its conclusion that mistakes by an overzealous judiciary would be “especially costly ... chill[ing] the very conduct the antitrust laws are designed to protect.”

Matsushita [Elec. Indus. Co. v. Zenith Radio Corp.,

475 U.S. 574, 594 , 106 S.Ct. 1348 , 89 L.Ed.2d 538 (1986) ];

Monsanto,

465 U.S. at 763 , 104 S.Ct. 1464 ;

Big Apple BMW [Inc., v. BMW of N. Am,., Inc.,

974 F.2d 1358, 1363 (3d Cir.1992) ](“Care must be taken to ensure that inferences of unlawful activity drawn from ambiguous evidence do not infringe upon defendant’s freedom, so long as it acts independently, to refuse to deal.”)(citing

United States v. Colgate & Co.,

250 U.S. 300 , 39 S.Ct. 465 , 63 L.Ed. 992 (1919)). For this reason, the plausibility of an antitrust plaintiffs claim is important. “[I]f the factual context renders [the plaintiffs] claim implausible' — if the claim is one that simply makes no economic sense — [a plaintiff] must come forward with more persuasive evidence to support [its] claim than would otherwise be necessary.”

Matsushita,

475 U.S. at 587 , 106 S.Ct. 1348 (citations omitted). Relatedly, in evaluating whether a genuine issue for trial exists, the antitrust defendants’ economic motive is highly relevant. “[I]f [the defendants] had no rational economic motive to conspire, and if their conduct is consistent with other, equally plausible explanations, the conduct does not give rise to an inference of conspiracy.”

Id.

at 596 , 106 S.Ct. 1348 . Moreover, even with a plausible motive to conspire, ambiguous conduct will not create a triable issue of fact with respect to the existence of a conspiracy.

See id.

at 597 n. 21, 106 S.Ct. 1348 .

Rossi,

156 F.3d at 466 .

In the absence of direct evidence, the record as a whole must be assessed to determine whether an inference of concerted action is warranted.

Id.

at 466-67 . “[W]here the non-moving party has put forth evidence that provides an inference of concerted action, the moving party ‘bears the burden of proving that drawing the inference of unlawful behavior is unreasonable.’ ”

Id.

at 467 .

The evidence of record will be assessed against the backdrop of these standards to determine whether there is sufficient evidence to either compel or allow a jury to draw a conclusion that Bobrick engaged in concerted action. Before addressing this issue, however, it is appropriate to determine whether Bobrick’s commission sales-

*505

representatives, co-defendants Hornyak and Vogel, can be held accountable under section 1 of the Sherman Act.

a.

The alleged concerted action of Bobrick’s sales representatives

Santana seeks to hold Hornyak and Vogel liable under § 1 of the Sherman Act based upon their interaction with their principal, Bobrick. Hornyak and Vogel counter by arguing that a captive sales agency, i.e., one exclusively selling only the principal’s products, is incapable of conspiring with the principal as a matter of law.

In

Copperweld Corp. v. Independence Tube Corp.,

467 U.S. 752 , 104 S.Ct. 2731 , 81 L.Ed.2d 628 (1984), the Court ruled that a parent company and its wholly-owned subsidiaries are not legally capable of conspiring with one another for purposes of liability under § 1 of the Sherman Act. This holding was based upon the fact that, in such a relationship, the parent and subsidiary “have a complete unity of interest.”

Id.

at 771, 104 S.Ct. 2731 . As the Court explained:

If a parent and a wholly-owned subsidiary do ‘agree’ to a course of action, there is no sudden joining of economic resources that had previously served different interests, and there is no justification for § 1 scrutiny.

... [I]n reality a parent and a wholly-owned subsidiary

always

have a “unity of purpose or a common design.” They share a common purpose whether or not the parent keeps a tight rein over the subsidiary; the parent may assert full control at any moment if the subsidiary fails to act in the parent’s best interests.

Id.

at 771-72, 104 S.Ct. 2731 (emphasis added).

In

Siegel Transfer,

our Court of Appeals extended the rationale of

Copperweld

to agents of a corporation, including separately incorporated entities that served as agents of the corporation. 54 F.3d at 1134-35 . Judge Mansmann, writing for the unanimous court, explained that the fact that the agent’s economic well-being was directly tied to the principal’s success, as well as the fact that the agent did not compete with the principal, compelled the conclusion that the principal and agent “constituted one economic unit.”

Id.

at 1135 .

There is no dispute that Hornyak and Vogel were compensated by Bobrick based upon the amount of Bobrick product they sold. There also appears to be no dispute that Hornyak and Vogel exclusively sold Bobrick toilet partitions. It is thus clear that there exists in this case the requisite unity of economic interests that renders Hornyak and Vogel incapable of conspiring with Bobrick.

See Peerless Heater Co. v. Mestek, Inc.,

No. Civ. A. 98-CV-6532, 2000 WL 637082 , at *6 (E.D.Pa. May 11, 2000).

Santana asserts that Vogel and Hornyak should be precluded from relying upon their commission relationship with Bobrick because they refused to disclose during discovery the

amount

of commissions they received. Indeed, the Special Master appointed to oversee discovery in this case issued a protective order to bar disclosure of the

amount

of commissions. The amount of the commissions, however, is not pertinent to the question of whether there was a unity of economic interests. Thus, the fact that Vogel and Hornyak refused to produce information concerning the amount of the commissions they earned does not preclude them from relying upon their relationship with Bobrick to avoid liability under § 1 of the Sherman Act.

Santana also appears to claim that Hornyak and Vogel may be held liable because they were aware of the role that

*506

Formica and others played in the alleged conspiracy. The evidence that Santana cites in support of this contention shows only that Hornyak and Vogel conducted anti-HDPE marketing, including showing the Formica video and burning samples of HDPE, in order to sell Bobrick products. In other words, Hornyak and Vogel were advancing the cause of their corporate principal. There is no evidence that either Hornyak or Vogel assisted the efforts of other TPMC members. Indeed, Santana has not cited any evidence indicating that Hornyak and Vogel had any contact with Formica or the TPMC members. At most, Hornyak and Vogel were aware of the role of Formica in developing the Formica video. (Pl.Rev.Stat. of Material Facts/Sherman Act, Dkt. Entry 382, ¶¶ 111E, 111H.) Such evidence is insufficient to show the requisite unity of purpose, common design and understanding, or meeting of the minds in an unlawful arrangement that animates § 1 liability. Accordingly, Vogel and Hornyak are entitled to summary judgment on Santana’s § 1 claim.

b.

The alleged concerted action of Bobrick

Santana contends that the evidence compels a conclusion that Bobrick, was a knowing participant in the TPMC anti-HDPE conspiracy. Santana points out that the TPMC members, including Formica and Metpar, undertook a collaborative effort to “address the competitive threat of HD Polyethylene (Santana).” (Pl.Rev.Stat. of Material Facts/Sherman Act, Dkt. Entry 382, ¶¶ 11, 34, 69.) Santana further claims that Bobrick was fully informed about the TPMC and its plan to attack HDPE toilet compartments on the basis of allegations that this material failed to meet the ASTM E-84 test.

In support of its motion for summary judgment, Santana relies upon evidence indicating that Bobrick had several conversations with a Formica officer who served as TPMC’s Chairman and Secretary about the formation and operation of the TPMC.

(Id,

¶¶ 32, 34, 35, 37A.) Although Bobrick declined to join the TPMC, it stated that it “would be happy to support the Council in any way we could.”

(Id,

¶ 32.) Bobrick obtained a copy of the Formica video, and, in 1990, obtained Formica’s permission to use the video in marketing Bobrick’s solid phenolic compartments. Santana also points to evidence showing that Bobrick shared anti-HDPE information with Met-par, including the results of tests relating to the ASTM E-84 standard.

(Id,

¶¶ 13-15, 15A, 16, 91B, 95.) Representatives of Bobrick and Formica met in February and May of 1990 to discuss the Formica video, at which time Formica described the video and discussed how it could be used against Santana.

(Id,

¶¶ 20, 22A, 22B, 24, 69.)

Notwithstanding Santana’s characterization of the evidence to the contrary, however, there is no “direct” evidence of Bobrick’s knowing participation in a conspiracy to restrain trade. As noted above, direct evidence must be explicit and require no inference to establish the proposition that Bobrick was a member of the alleged conspiracy.

In re Baby Food

166 F.3d at 118. Santana points to evidence that Bobrick exchanged information with Formica and another alleged conspirator, Metpar, concerning the flammability of HDPE. The mere exchange of information, even among competitors, is insufficient to establish the existence of a conspiracy.

Id.

at 121. Nor does the fact that Bobrick secured Formica’s permission to use the Formica videotape in Bobrick’s promotion of solid phenolic compartments necessarily establish concerted action. Formica was a supplier of some solid phenolic material to Bobrick, and the fact that Formica provided Bobrick with comparative pro

*507

motional material does not compel the conclusion that they were engaged in proscribed concerted action. Significantly, Santana has not presented any evidence from Formica or any other TPMC member that implicates Bobrick in a conspiracy to restrain trade, even though Santana settled its antitrust litigation against those parties.

See In re Citric Acid Litig.,

191 F.3d 1090, 1106 (9th Cir.1999)(finding that plaintiffs claim that defendant participated in a price-fixing conspiracy was undermined where none of the manufacturers who had admitted to conspiring to fix prices identified the defendant as a co-conspirator). Nor has Santana presented evidence that Bobrick agreed to participate in a collaborative anti-HDPE marketing campaign or that there was some plan to have Bobrick target certain geographic areas or accounts. Santana has also failed to suggest the existence of an enforcement mechanism if Bobrick or another alleged conspirator did not engage in an anti-HDPE campaign.

See Petruzzi’s,

998 F.2d at 1233 (recognizing importance of evidence of enforcement mechanism to support existence of concerted action). And, of course, the fact that Bobrick engaged in an anti-HDPE advertising campaign does not, standing alone, establish the existence of a conspiracy.

In re Baby Food,

166 F.3d at 121-22.

In summary, the evidence upon which Santana relies does not meet the definition of “direct evidence” — “evidence that is explicit and requires no inferences to establish the proposition or conclusion being asserted.”

In re Baby Food,

166 F.3d at 118. On the other hand, contrary to Bo-brick’s arguments, Santana has shown more than mere parallel behavior.

Bobrick concentrates on its refusal to join the TPMC and its belief that it could be hurt by standards, (Rev. Mem. in Support of Bobrick’s S.J. Mot., Dkt. Entry 405, at 77-78), but Santana has presented evidence that shows that representatives of Bobrick were in close contact with two TPMC members, Formica and Metpar. At the meetings with Formica, the TPMC’s goal of “targeting” Santana as well as the fire scare video were discussed. These meetings included the secretary of the TPMC and officers from Bobrick, who eventually obtained the Formica videotape and distributed it to its sales representatives with the explicit permission of Formica. Bobrick shared test information with Metpar. Indeed, it appears that Metpar’s anti-HDPE advertisements were adapted by Bobrick for use in its advertisements. This evidence shows more than a mere “exchange of information” as in

In re Baby Food,

166 F.3d at 118-121 (finding no conspiracy where sales representatives exchanged price information). Bobrick’s contacts with two TPMC members are sufficient to support an inference that it had joined an anti-HDPE conspiracy. That Bobrick did not participate in any meetings of the TPMC, contribute money, or vote on any issues is not determinative.

Santana has proffered a plausible conspiracy theory: Bobrick and other non-HDPE toilet compartment manufacturers would have had a joint interest in excluding from the market HDPE partitions, thereby constraining supply and increasing prices. Santana has adduced evidence consistent with Bobrick’s involvement in the conspiracy in the form of its communications with Formica and Metpar. The evidence is sufficiently unambiguous that it “tends to exclude the possibility of independent action.”

Monsanto,

465 U.S. at 768 , 104 S.Ct. 1464 . Indeed, the fact that Bobrick needed to secure Formica’s permission to use the videotape supports an inference of collusive action. Under these circumstances, adjudication of the “concerted action” question on the parties’

*508

summary judgment motions is inappropriate.

38

2. Unreasonable Restraint of Trade

Santana, of course, must show more than that its competitors engaged in some type of collaborative efforts. It must also show that “this joint action amounted to an unreasonable restraint of trade.”

Consol. Metal Prods., Inc. v. Am. Petroleum Inst.,

846 F.2d 284, 293 (5th Cir.1988). Although section 1 of the Sherman Act declares illegal

“every

contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce,” 15 U.S.C. § 1 (emphasis added), “[t]he Supreme Court has interpreted this provision to prohibit only unreasonable restraints.”

Rossi,

156 F.3d at 461 .

Ordinarily, whether particular concerted action violates § 1 of the Sherman Act is determined through case-by-case application of the so-called “rule of reason” — that is, “ ‘the fact finder weighs all of the circumstances of a case in deciding whether a restrictive practice should be prohibited as imposing an unreasonable restraint on competition.’ ”

Bus. Elecs. Corp. v. Sharp Elecs. Corp.,

485 U.S. 717, 723 , 108 S.Ct. 1515 , 99 L.Ed.2d 808 (1988)(quoting

Continental T.V., Inc. v. GTE Sylvania Inc.,

433 U.S. 36, 49 , 97 S.Ct. 2549 , 53 L.Ed.2d 568 (1977)). There are, however, certain agreements or practices which “because of their pernicious effect on competition and lack of any redeeming virtue, are conclusively presumed to be unreasonable and therefore illegal without elaborate inquiry as to the precise harm they have caused or the business excuse for their use.”

N. Pac. Ry. Co. v. United States,

356 U.S. 1, 5 , 78 S.Ct. 514 , 2 L.Ed.2d 545 (1958). Such agreements or practices are

per se

illegal without proof of anticompetitive effect.

In re Baby Food,

166 F.3d at 117-18. “Under the

per se

standard, the proscribed conduct is “ ‘manifestly anti-competitive’ or “would always or almost always tend to restrict competition,’ .... ”

Rossi,

156 F.3d at 461 .

Santana argues that the conduct at issue in this case merits

per se

condemnation. Bobrick, on the other hand, argues that the rule of reason governs this case and that Santana has failed to produce sufficient evidence to withstand summary judgment under rule of reason analysis. The threshold question on this aspect of the case, therefore, is whether the challenged conduct falls within the narrow category of cases where an unreasonable restraint on competition is conclusively presumed.

*509

a.

The Per Se Rule

Contending that “[t]his case is a classic example of a conspiracy among competitors who agree upon and enforce against business rivals a single ‘product standard’ that excludes the rivals’ technology,” (Rev. Mem. in Support of PI. S.J. Mot./Sherman Act, Dkt. Entry 381, at 3), Santana asserts that Bobriek should be held liable for engaging in a “group boycott” or “naked restraint of trade.” Santana’s self-serving characterization of the evidence as showing a joint effort to set and enforce a product standard, however, does not jive with the facts of record. The alleged co-conspirators did not create any product standard. Instead, they advanced their interpretation of general standards adopted by the NFPA and the ASTM. Santana has adduced no evidence that these standard-setting bodies were even approached by any of the defendants with respect to the matters at issue here. Nor has Santana shown any ability on the part of the alleged co-conspirators to enforce some product standard. There is no evidence that any member of the alleged conspiracy would be penalized for not subscribing to the group’s view. Furthermore, there was no coercion of customers, no constraints on the supply of toilet partitions, and no refusals to deal. Those who purchased HDPE partitions were not threatened with suit by any member of the alleged conspiracy. This is simply

not

a case where competitors combined to establish and enforce a product standard. Thus, Santana’s reliance on product standard cases is misplaced.

Santana’s bald characterization of the conduct as a “group boycott” does not mean that this case must be judged under the

per se

rule. Santana points out that in

Northwest Wholesale Stationers, Inc. v. Pacific Stationery and Printing Co.,

472 U.S. 284, 294 , 105 S.Ct. 2613 , 86 L.Ed.2d 202 (1985), the Court stated that “[c]ases to which this Court has applied the

per se

approach have generally involved joint efforts by a firm or firms to disadvantage competitors by ‘either directly denying or persuading or coercing suppliers or customers to deny relationships the competitors need in the competitive struggle.’” Santana contends that the alleged collaborative effort to dissuade purchasers from specifying HDPE toilet partitions denied Santana and other HDPE toilet partition manufacturers the customers necessary for their survival. Santana ignores, however, the Court’s observation in

F.T.C. v. Indiana Federation of Dentists,

476 U.S. 447, 458 , 106 S.Ct. 2009 , 90 L.Ed.2d 445 (1986), that “the category of restraints classed as group boycotts is not to be expanded indiscriminately^] the

per se

approach has generally been limited to cases in which firms with market power boycott suppliers or customers in order to discourage them from doing business with a competitor.”

The cases upon which Santana relies involved activity clearly falling within this limited ambit of

per se

illegality. For example, in

Radiant Burners, Inc. v. Peoples Gas Light and Coke Co.,

364 U.S. 656 , 81 S.Ct. 365 , 5 L.Ed.2d 358 (1961), the Court applied the

per se

rule to an association of public gas utilities and manufacturers of metal gas burners who refused to give plaintiffs ceramic gas burner a seal of approval because the absence of a seal of approval meant that the utilities would not sell gas to the plaintiffs customers. This case, by way of contrast, does not involve such an enforcement device. No potential customer of Santana was deprived of the ability to utilize Santana’s product, as was the ease in

Radiant Burners.

Allied Tube ,

another ease cited by Santana, involved the manipulation of the process of establishing an influential body’s

*510

standards to exclude rival technology from the market. As noted above, this case does not involve efforts to influence standard-setting or enforcement by a body with a cachet of influence. A campaign of persuasion of architects and specifiers that toilet partitions are subject to fire and smoke development standards for interior wall finishes does not constitute standard setting or enforcement. Unlike

American Society of Mechanical Engineers, Inc. v. Hydrolevel Corp., 456

U.S. 556, 102 S.Ct. 1935 , 72 L.Ed.2d 330 (1982), Bobrick and the TPMC members did not orchestrate an interpretation of a products standard from a standards setting organization that they then enforced.

39

The fact that three TPMC members discontinued their HDPE lines of toilet partitions between October 18, 1989 and March, 1991 also does not warrant application of the

per se

standard.

40

Our Court of Appeals has cautioned that “assigning the label ‘group boycott’ to a concerted refusal to deal ... does not have a talismanic effect, automatically bringing the case under the

per se

rubric.”

Rossi,

156 F.3d at 463 . Instead, trial courts must “carefully scrutinize the nature of the asserted refusals to deal to determine whether it fits within the

per se

‘boycott’ pigeonhole.”

Id.

Pertinent factors are whether a competitor has been denied something needed to compete effectively, defendants’ dominance in the relevant market, and “the absence of any plausible contention that the challenged behavior would ‘enhance overall efficiency and make markets more competitive.’”

Id.

[Although “a concerted refusal to deal need not necessarily possess all of these traits to merit

per se

treatment ... [a] plaintiff seeking application of the

per se

rule must present a threshold case that the challenged activity falls into a category likely to have predominantly anti-competitive effects. The mere allegation of a concerted refusal to deal does not suffice because not all concerted refusals to deal are predominantly anti-competitive.”

Id.

(quoting

Northwest Wholesale Stationers,

472 U.S. at 295, 298 , 105 S.Ct. 2613 ).

Other than asserting that the TPMC members, collectively, dominated the toilet partition market, Santana has not shown that the decision of a few TPMC members to discontinue HDPE partitions had the anticompetitive effects that warrant

per se

condemnation.

41

Santana has not presented

*511

any evidence that it was deprived of something needed to compete in the marketplace. It retained its access to architects and others specifying compartments for building projects. Nor has Santana shown that the departure of three small HDPE toilet partition producers could not plausibly enhance overall efficiency and make the markets more competitive. The departing companies remained in the toilet partition market, competing against HDPE partitions. There is no contention that Santana and the other major HDPE toilet partition producer, Capitol Partitions, lacked the capacity to absorb the output of the three small producers. In any event, Comtec’s entry into the market suggests that HDPE remained a competitive alternative for toilet partitions. Com-tec’s entry into the market also precludes a determination that the toilet partition market suffered a decrease in production capacity. In summary, a careful consideration of the evidence militates against a conclusion that a decision of TPMC members to discontinue HDPE partitions — conduct consistent with the position that HDPE partitions posed safety concerns— had marked anticompetitive effects.

The Court has admonished that

per se

treatment is appropriate only where the purpose and effect of the challenged conduct “are to threaten the proper operation of our predominately free market economy,” or where the “practice facially appears to be one that would always or almost always tend to restrict competition and decrease output.”

Broad. Music, Inc. v. Columbia Broad. Sys., Inc.,

441 U.S. 1, 19-20 , 99 S.Ct. 1551 , 60 L.Ed.2d 1 (1979). Thus, “the touchstone of

per se

illegality [in the group boycott context] is that the customers or suppliers of the plaintiff had, as a group, agreed or been forced to cease doing business with the plaintiff.”

Consol. Metal,

846 F.2d at 291 . The evidence in this case does not show such an agreement among or coercion of Santana’s customers or suppliers. The

per se

rule should be applied only “ ‘where the economic impact of certain practices is ... immediately obvious.’ ”

State Oil Co. v. Khan,

522 U.S. 3, 10 , 118 S.Ct. 275 , 139 L.Ed.2d 199 (1997). In this case, the economic impact of the challenged practices is far from obvious. Therefore, the

per se

rule is inapplicable in this case.

42

*512

b.

Application of the Rule of Reason

Under rule of reason analysis, the trial court “considers all relevant factors in examining a defendant’s purpose in implementing the restraint and the restraint’s effect on competition.”

Orson, Inc. v. Miramax Film Corp.,

79 F.3d 1358, 1367 (3d Cir.1996). As explained in

Orson:

[T]he traditional rule of reason inquiry has essentially remained unchanged since it was first announced by the Supreme Court ... and focuses on the competitive significance of the restraint:

The true test of legality is whether the restraint imposed is such as merely regulates and perhaps thereby promotes competition or whether it is such as may suppress or even destroy competition. To determine that question the court must ordinarily consider the facts peculiar to the business to which the restraint is applied; its condition before and after the restraint was imposed; the nature of the restraint and its effect, actual or probable. The history of the restraint, the evil believed to exist, the reason for adopting the particular remedy, the purpose or end sought to be attained, are all relevant facts.

Id.

(quoting

Bd. of Trade v. United States,

246 U.S. 231, 238 , 38 S.Ct. 242 , 62 L.Ed. 683 (1918)). “[T]he inquiry mandated by the Rule of Reason is whether the challenged agreement is one that promotes competition or one that suppresses competition.”

Nat’l Soc. of Prof'l Eng’rs v. United States,

435 U.S. 679, 691 , 98 S.Ct. 1355 , 55 L.Ed.2d 637 (1978).

The market in which this dispute occurred is, as noted above, highly competitive. Producers attempt to convince architects and building specifiers to utilize their particular products by,

inter alia,

touting their products’ capabilities in a high vandalism setting. Durability, graffiti resistance, and flame and smoke resistance characteristics are clearly pertinent. Applicability of building code standards is also a significant consideration. Each participant in the market is free to advocate its position on these matters.

In similar circumstances, courts have concluded that the object of conduct intended to secure favorable action on bid specifications was not unlawful. For example, in

Stearns Airport Equipment Co. v. FMC Corp.,

170 F.3d 518 (5th Cir.1999), a manufacturer of airline boarding bridges sued its competitor, FMC, on the theory that FMC violated the antitrust laws by inducing municipalities to adopt specifications that were tailored to fit FMC’s product and to exclude Stearns’. In affirming the grant of summary judgment in favor of FMC, the court explained:

The key factor courts have analyzed in order to determine whether challenged conduct is or is not competition on the merits is the proffered business justification for the act. If the conduct has no rational business purpose other than its adverse effect on competition, an inference that it is exclusionary is supported.

Id.

at 522 . The court found that FMC’s behavior was economically rational — it was

*513

trying to sell its product.

43

The court concluded that “jockeying over specifications and bid procedures is a valid form of competition.”

44

Id.

at 526 .

In this case, the object of the challenged conduct was to convince specifiers of the purportedly superior characteristics of non-HDPE toilet partitions. Stated otherwise, the object of the alleged conduct was to portray HDPE as an inferior product for toilet partitions. Santana was free to counter this approach by asserting that toilet partitions were not subject to wall finish standards and that its HDPE products were superior to other kinds of toilet partitions. Indeed, it is evident that Santana was often successful in just such efforts. The fact that Santana may have had to engage in more effort than otherwise would have been required does not make the object of the challenged conduct — in Bobrick’s case, to sell phenolic compartments — illegal.

Buttressing the conclusion that Santana is not entitled to redress under § 1 of the Sherman Act is Judge Easterbrook’s analysis in

Schachar v. American Academy of Ophthalmology, Inc.,

870 F.2d 397 (7th Cir.1989). Judge Easterbrook addressed a claim brought by several ophthalmologists that the American Academy of Ophthalmology, along with rival ophthalmologists, conspired to restrain trade by issuing a press release that called radial keratotomy “experimental,” and urged patients to approach the surgical procedure with caution. The court held that the claims should not have proceeded to trial, explaining:

Ophthalmologists are each others’ rivals for custom[ers]. They offer competing procedures .... Plaintiffs say that the Academy is in the grip of professors and practitioners who favor conservative treatment, forever calling for more research (the better to justify the academics’ requests for grants); plaintiffs

*514

portray themselves as the progressives, disdaining the Academy’s fuddy-duddies in order to put the latest knowledge to work. Warfare among suppliers and their different products

is

competition. Anti-trust law does not compel your competitor to praise your product or sponsor your work. To require cooperation or friendliness among rivals is to undercut the intellectual foundation of anti-trust law. Unless one group of suppliers diminishes another’s ability to peddle its wares (technically, reduces rivals’ elasticity of supply), there is not even the beginning of an anti-trust case, no reason to investigate further to determine whether the restraint is “reasonable.”

Id.

at 399 (citation omitted)(emphasis in original). Dismissing the plaintiffs’ assertions that the Academy’s representations were misleading, the court commented that “[i]f such statements should be false or misleading or incomplete or just plain mistaken, the remedy is not antitrust litigation but more speech — the marketplace of ideas.”

Id.

at 400 .

In

Sanderson v. Brugman,

No. IP00-459-CHG, 2001 WL 699876 (S.D.Ind. May 29, 2001), the court applied

Sehachar

in a context very similar to that presented here. The plaintiff in

Sanderson

alleged a conspiracy to discredit magnetic water treatment through the improper use of various studies and reports, publication of these reports, and direct contact with customers and potential customers.

Id.

at *1 . Like Santana, Sanderson alleged that the criticism of his products was deliberately false. As in this case, however, Sanderson had failed to show the existence of a boycott or other coercive measure that would have prevented customers from dealing with him or prevented him from selling his products to any willing buyer. “All Sand-erson alleges is that defendants have joined together to criticize plaintiff and his products falsely.”

Id.

at *3 .

Sanderson also argued that a trade association — the Water Quality Association (“WQA”) — adopted a standard that excluded his product. The court found that such standard-setting was not a restraint of trade because the standard was not incorporated into applicable law so as to impose legal barriers to the plaintiffs products.

Id.

at *3 n. 2. The fact that the defendants urged customers to purchase only those water purification products with the WQA seal of approval also failed to present a cognizable antitrust claim because customers were not coerced to buy only “gold seal” products.

Id.

at *5 . The court concluded that “Sanderson was free to develop and use other means to reassure customers about the quality and efficacy of his products ....”

Id.

This rationale applies with equal force here. Santana has merely shown that Bo-brick may have joined together with others to criticize its products falsely. Bobrick did not conspire with the NFPA or other organization whose standards were incorporated into law. No prospective purchaser was compelled to specify non-HDPE partitions.

Santana contends that even if the object of the concerted conduct was legitimate, other factors make such conduct actionable under § 1 of the Sherman Act. In particular, Santana cites to

United States v. Realty Multi-List, Inc.,

629 F.2d 1351 (5th Cir.1980), as demonstrating that a restraint with pro-competitive effects can be excessive.

Realty Multi-List

involved a government suit against a multiple real estate listing service. Among the membership requirements for this service were that the broker have a favorable credit rating and business reputation, maintain an active real estate office open during customary business hours, and pay a

*515

$1,000 fee for a share of stock. The court found this unreasonable because the existing state regulatory scheme was a less restrictive alternative to the membership requirements while providing adequate protection against unethical realtors.

Id.

at 1376-81 . From this, Santana argues that the defendants’ selection and enforcement of the ASTM-E-84 test as the “standard” of fire safety was unreasonable because the actual codes enforced in various portions of the United States had less restrictive alternatives for approved plastics for use in buildings. (Rev. Mem. in Opp. to Bobrick’s S.J. Mot., Dkt. Entry 391, at 10-11.)

This argument collapses, however, when taken out of the standard-setting context. Bobrick and the other TPMC members did not adopt or enforce a standard. They advocated an interpretation of the very state building codes that Santana argues were the less restrictive alternative. Santana may be correct that the building codes authorized alternate smoke density tests in lieu of the ASTM E-84 standard. Still, the defendants’ advocacy of a different interpretation of those codes does not and cannot equal enforcement. It is the absence of any means to coerce purchasers to specify non-HDPE partitions (i.e. enforce product standards) that removes this case from the purview of the antitrust laws.

See Consol. Metal,

846 F.2d at 296 (denial of a valuable certification by a standard-setting body does not impose an unreasonable restraint on trade where there is no evidence of coercion of customers);

George R. Whitten, Jr., Inc. v. Paddock Pool Builders, Inc.,

608 F.2d 547, 558-59 (1st Cir.1974) (promotion of a product specification that excludes plaintiffs product is merely “salesmanship” and not in restraint of trade).

Considering (a) the nature of the market; (b) the history of the parties’ jockeying over specifications and the comparative characteristics of each producer’s type of compartments; (c) the absence of any evidence that Bobrick and others conspired with standard-setting organizations, such as the NFPA; and (d) the absence of evidence of any attempts to coerce purchasers to specify non-HPDE compartments, I find that the record does not permit a conclusion that the object of the challenged conduct was unlawful.

Steams, Schachar

and

Sanderson

compel the conclusion that the activity at question here is simply not a restraint on trade. Accordingly, Bobrick is entitled to summary judgment on Santana’s Sherman Act § 1 claim.

3. Anticompetitive Effects

Bobrick is also entitled to summary judgment because Santana has failed to adduce competent evidence of harm to competition attributable to the challenged conduct. For a restraint to be found unreasonable, the plaintiff must show that it produces adverse, anticompetitive effects within the relevant product and geographic markets.

Brown Univ.,

5 F.3d at 668. The Third Circuit has held that a plaintiff may satisfy this burden by “proving the existence of actual anticompetitive effects, such as reduction of output, increase in price, or deterioration in quality of goods and services.”

Orson, Inc. v. Miramax Film Corp.,

79 F.3d 1358, 1367 (3d Cir.1996) (citations omitted).

The plaintiff, of course, must show more than injury to itself.

Mathews v. Lancaster Gen. Hosp.,

87 F.3d 624, 641 (3d Cir.1996)(“‘An antitrust plaintiff must prove that challenged conduct affected the prices, quality of goods or services,’ not just his own welfare.’”)(quoting

Tunis Bros. Co. v. Ford Motor Co.,

952 F.2d 715, 728 (3d Cir.1991)). “It is axiomatic that ‘[t]he antitrust laws ... were enacted for ‘the protection of

competition,

not

compel-

*516

itors.’

”

Tunis Bros.,

952 F.2d at 727 (quoting

Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc.,

429 U.S. 477, 488 , 97 S.Ct. 690 , 50 L.Ed.2d 701 (1977))(emphasis in original);

see also Brooke Group, Ltd. v. Brown & Williamson Tobacco Corp.,

509 U.S. 209, 225 , 113 S.Ct. 2578 , 125 L.Ed.2d 168 (1993)(“Even an act of pure malice by one competitor against another does not, without more, state a claim under the federal antitrust laws; those laws do not create a federal law of unfair competition .... ”). Moreover, antitrust “ ‘plaintiffs have a burden to show more than a de minimus restraint.’ ”

Tunis Bros.,

952 F.2d at 728 (quoting

Sitkin Smelting & Ref. Co. v. FMC Corp.,

575 F.2d 440 , 448 (3d Cir.1978)). Santana has not met this initial burden.

Santana alleges two main anticompeti-tive effects to the market for HDPE. First, Santana points to statements by representatives of Capitol Partitions and Comtec— sellers of HDPE toilet partitions — that those companies felt the effect of the conspiracy and had to take measures to counteract the misinformation. (Rev. Mem. in Support of PI. S.J. Mot./Sherman Act, Dkt. Entry 381, at 30-31.) In addition, several manufacturers of HDPE compartments who were alleged members of the conspiracy stopped selling HDPE compartments until after the TPMC settlement.

(Id.

at 31.) Specifically, as noted above, Knickerbocker, General Partitions, and Sanymetal stopped offering HDPE compartments after or between the TPMC meetings from October 18, 1989 to March 1991. (Pl.Rev. Stat. of Material Facts/Sherman Act, Dkt. Entry 382, ¶ 89.) Compression Polymers Inc., a manufacturer of HDPE panels who sold panels to these three toilet partition makers from 1987 to 1989, made no sales to these companies by 1992.

(Id.,

¶ 88D.)

Bobrick correctly notes, however, that there is no evidence on the effect on competition in the toilet partition market.

45

Santana’s insinuations that Capitol Partitions and Comtec had to take measures to counteract Bobriek’s alleged misinformation are vague. The deposition of Com-tec’s Rule 30(b)(6) representative, Jeff Pal-fey, is illuminating:

Q. As far as you’re aware, that didn’t— there was no interference with any of your relationships?

A. No. And, again, the issue was and still is what is the product that’s specified for the job. Does Comtec manufacture a product that meets those specifications; if so, we can bid the job.

If there are any questions that arise in doing normal business in understanding the market and the reps and dealers understand what we have to offer versus what they’ve heard about competitors, I don’t call that interference. I call that doing business. You hear that every day about your competitors.

Questions arose, and we addressed those questions. I don’t call it interference or scare tactics, any issues that we considered threatening, no.

(Ex. 25A, Appx. to Mem. in Opp. to PL S.J. Mot., Dkt. Entry 324, Palfey Dep. Tr. at 87-88.)

Bobrick is also correct that the fact that several TPMC members stopped buying HDPE sheets from Compression Polymers, while not insignificant, is inconclusive. The record is silent as to how much

*517

capacity was lost by their departure from the market. It is clear, however, that the “major suppliers” of HDPE compartments — Santana, Capitol Partitions, and Comtec — not only remained in business, but appear to have increased sales during the period of the alleged conspiracy. (PL Rev.Stat. of Material Facts/Sherman Act, Dkt. Entry 382, ¶ 126.)

Most importantly, Santana does not provide evidence concerning the condition of the market. There is no evidence that the output of HDPE sheets or toilet partitions was reduced. There is no evidence that HDPE toilet partitions lost market share. There is no evidence that the anti-HDPE campaign constituted an effective barrier to market entry. Comtec introduced HDPE compartments diming the pertinent period. In its Statement of Material Facts, Santana concentrates on the fact that solid phenolic partitions generally cost more than HDPE partitions, but this alone is not a basis for finding an anticompetitive effect. (Pl.Rev.Stat. of Material Facts/Sherman Act, Dkt. Entry 382, ¶ 88B.) Given the number and types of toilet partitions (such as baked enamel, stainless steel, etc.), there is insufficient evidence to conclude that the “fire scare” marketing campaign must have adversely affected prices or supply.

46

While Santana has demonstrated that it lost some sales to Bobrick and other solid phenolic manufacturers, it has not presented evidence of significant injury to competition, even when the analysis encompasses the public sector. “The ‘reasonableness’ of a restraint is judged by its general effect on the market, not by the circumstances of a particular application.”

Consol. Metal,

846 F.2d at 297 . Comtec and Capitol Partitions may have lost some sales, but overall sales of HDPE compartments increased during the relevant time frame.

(See

Ex. 24A, Appx. to Mem. in Opp. to Pl. S.J. Mot., Dkt. Entry 324, Arnaiz Dep. Tr. at 22.) It is also clear that, like Santana, Capitol Partitions and Comtec had some success in counteracting the effects of the “fire scare” campaign. (Rev. Reply Mem. in Support of PL S.J. Mot., Dkt. Entry 424, at 55-57.) Santana has “made conclusive statements regarding the harmful effects of the questioned combination, but [has] provided us with no analysis with which to conclude that defendant has been a party to an unreasonable restraint.”

Sitkin Smelting,

575 F.2d at 448. Thus, Santana has failed to show the necessary anticom-petitive effect.

47

*518

The conclusion that Santana failed to show the requisite harm to competition is buttressed when conduct protected by the Noerr/Pennington doctrine is excluded from the analysis. Santana has made no showing whatsoever with respect to the non-public market for toilet partitions. No information was provided, for example, as to the percentage that the non-public market bears to the total market. Accordingly, Santana’s failure to show harm to competition provides an independent basis for granting summary judgment in favor of Bobrick on the section one claim.

48

E. The Sherman Act Section Two Claim

Count II of Santana’s Complaint alleges that Bobrick, Hornyak, Vogel, Sylvester, and the TPMC members:

conspired to monopolize at least a part of the trade in interstate commerce for toilet partitions and to maintain power to exclude or restrain manufacturers of HDPE partitions from marketing and selling their goods in interstate commerce in violation of Section 2 of the Sherman Act ... with the specific intent of achieving and exercising such monopoly power.

(Complaint, ¶ 75.) Section 2 of the Sherman Act prohibits,

inter alia,

conspiracies to monopolize. 15 U.S.C. § 2 . A claim of conspiracy to monopolize has three elements: (1) the existence of a combination or conspiracy; (2) an overt act in furtherance of the conspiracy; and (3) specific intent to monopolize.

Santana Prods.,

121 F.Supp.2d at 735 .

Relying on Judge Mishler’s dismissal of Santana’s section 2 claim in the parallel litigation against Sylvester pending in the Eastern District of New York, Bobrick seeks summary judgment on Santana’s § 2 claim brought in this action. Bobrick contends that Judge Mishler’s ruling is conclusive under collateral estoppel principles. Alternatively, Bobrick asserts that Judge Mishler’s reasoning should be applied here, not only because it is persuasive of its own force, but also because it is consistent with a substantial body of case law precedent.

Judge Mishler granted judgment in favor of Sylvester on Santana’s section 2 claim on two independent bases: (1) San

*519

tana’s complaint alleged only a conspiracy to exclude Santana from competition, as opposed to a conspiracy to monopolize an entire market; and (2) Santana essentially “alleged a conspiracy to form a ‘shared monopoly,’ ”

id.

at 737, which cannot be maintained under section 2. Judge Mishler explained this alternative ground for dismissing the section 2 claim as follows:

Most district courts that have addressed the viability of a shared monopoly theory under Section 2 have rejected it as contrary to the plain language and legislative intent of the Sherman Act.

See, e.g., Consolidated Terminal Systems, Inc. v. ITT World Communications, Inc.,

535 F.Supp. 225, 229 (S.D.N.Y.1982)(holding that shared monopoly does not violate § 2 of the Sherman Act absent an allegation that a particular Defendant, as opposed to all Defendants, monopolized or attempted to monopolize the market);

Phoenix Elec. Co. v. Nat’l Elec. Contractors Ass’n. Inc.,

867 F.Supp. 925, 941 (D.Or.1994)(where many competitors are alleged to form a shared monopoly, claim under § 2 fails);

see also H.L. Hayden [Co. of New York, Inc. v. Siemens Med. Sys., Inc.,

672 F.Supp. 724 ,] 741 [ (S.D.N.Y.1987) ] (expressing “considerable discomfort” with shared monopoly theory and noting that the “notion that two competitors could conspire to monopolize is, seemingly, antithetical”).

sfc :}:

%

Similarly, under the facts presented here, Plaintiff cannot assert a claim for conspiracy to form a shared monopoly under Section 2 of the Sherman Act. Assuming Plaintiffs allegations are true, the result of Defendants’ actions would be the elimination of Plaintiff as a competitor in the toilet partition market. Plaintiff has not alleged, however, that competition among the many remaining manufacturers of toilet partitions would be diminished in any way. Absent such an allegation, Plaintiffs conspiracy to monopolize claim must fail. Thus, as an alternative basis to the one mentioned above, Defendants’ motion for partial judgment on the pleadings on Plaintiffs Section 2 conspiracy claim is granted.

Id.

at 737-38 .

Santana contends that Judge Mishler’s decision is not entitled to preclusive effect under collateral estoppel principles because it is still subject to appeal. Santana further contends that Judge Mishler’s ruling rested on the erroneous assumption that Santana failed to allege that the conspiracy was directed at entities other than Santana.

As noted above, Judge Mishler articulated alternative rationales for dismissal of Santana’s section 2 claim. Indeed, in denying Santana’s motion for reconsideration and request for leave to amend the complaint, Judge Mishler emphasized his conclusion that a conspiracy to create a “shared monopoly,” as alleged by Santana, is not cognizable under section 2 of the Sherman Act.

Id.

at 740-42 . Thus, the fact that other HDPE toilet partition manufacturers may have been affected by the challenged conduct did not alter his determination that Santana could not present a viable section 2 claim.

As stated by Bobrick, the precise issue here, and which was decided against Santana by Judge Mishler, is “whether a group of eleven competitors who allegedly conspired to eliminate HDPE toilet partitions from the market can constitute an illegal conspiracy to monopolize under Section 2 in the absence of some proof that they conspired to create a single dominant defendant or that competition among them was diminished.” (Rev. Reply Mem. in Support of Bobrick’s S.J. Mot., Dkt. Entry

*520

408, at 63.) Significantly, Santana fails to address this issue. It has not sought to distinguish the decisions on which Judge Mishler relied. Nor has Santana cited any case that recognized the viability of a section 2 claim under circumstances similar to those presented here.

Having carefully considered Judge Mishler’s well-reasoned opinion as well as the case law that he canvassed, I concur with his conclusion: Santana has presented no more than a claim of conspiracy among competitors to restrain trade, but has not shown that competition among the conspirators has been diminished in any way. Such a claim may not be maintained under section 2 of the Sherman Act. As explained in

Sun Dun, Inc. v. Coca-Cola Co.,

740 F.Supp. 381, 391-92 (D.Md.1990):

An examination of the history of the Sherman Act reveals that Congress’ concept of “monopoly” did not include “shared monopolies” or “oligopoly” at all, but rather the complete domination of a market by a

single

economic entity

The idea that a monopoly is composed of a single economic entity is also reflected in the requirement in an actual monopolization claim that the requisite power be held by a single defendant. This idea in no way precludes the possibility of a group of firms conspiring to monopolize,

if the aim of the conspiracy is to form a single entity to possess the illegal market power. When, however, two or more competitors conspire to create a market environment in which competition and market entry is improperly restricted, but in which market power continues to be shared among these otherwise unrelated entities, ... there is no conspiracy to monopolize claim stated under Section two

.... [Emphasis added.]

Accordingly, judgment will be entered in favor of Bobrick on Santana’s claim under section 2 of the Sherman Act.

49

F. The Lanham Act Claims

Both Santana and Bobrick have moved for summary judgment on Count III, which alleges that the defendants violated § 43(a) of the Lanham Act. Section 43(a) states in part:

(a)(1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination therefor, or any false designation of origin, false or mis

*521

leading description of fact, or false or misleading representation of fact, which

(B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities,

shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.

15 U.S.C. § 1125 (a)(1)(B). To establish a Lanham Act claim based on false or misleading representation of a product, the plaintiff must show:

1) that the defendant has made false or misleading statements as to his own product [or another’s];

2) that there is actual deception or at least a tendency to deceive a substantial portion of the intended audience;

3) that the deception is material in that it is likely to influence purchasing decisions;

4) that the advertised goods traveled in interstate commerce; and

5) that there is a likelihood of injury to the plaintiff in terms of declining sales, loss of good will, etc.

Johnson & Johnson-Merck Consumer Pharms. Co. v. Rhone-Poulenc Rorer Pharms., Inc.,

19 F.3d 125, 129 (3d Cir.1994). If the plaintiff proves that the challenged advertisement is “literally false, a court may grant relief without considering whether the buying public was misled.”

Id.

Where the challenged advertisement is not literally false, however, the plaintiff bears the burden of proving actual consumer deception.

Castrol Inc. v. Pennzoil Co.,

987 F.2d 939, 943 (3d Cir.1993). Thus, “a plaintiff must prove

either

literal falsity

or

consumer confusion, but not both.”

Id.

(emphasis in original). Failure to disclose a material fact may also be actionable under § 43(a).

See U.S. Healthcare, Inc. v. Blue Cross of Phila.,

898 F.2d 914 , 921 (3d Cir.1990);

Performance Indus., Inc. v. Koos Inc.,

Civ. A. No. 90-6435, 1990 WL 161253 (E.D.Pa. Oct. 17, 1990).

Santana relies exclusively on literal falsity, eschewing an approach that would necessitate proof of actual consumer deception. Santana argues that Bobrick’s statements are literally false for several reasons. First, asserts Santana, the advertisements convey the purportedly false message that toilet partitions must be fire rated class B or higher to meet state or local building code standards. Second, according to Santana, the advertisements use the ASTM E-84 test to appraise the fire hazard of HDPE partitions under actual fire conditions, despite the warning that the test is not to be used for this purpose. Santana claims that this constitutes a failure to disclose a material fact, i.e., that flame spread

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