Opinion

Rossi v. Standard Roofing Inc (Part I)

Court: Court of Appeals for the Third Circuit
Filed: Sep 9, 1998
Cited by: 0 cases
Authority: More cited than 40.0%

proof of similar acts is admissible to show intent or the absence of mistake

How later courts described this case

proof of similar acts is admissible to show intent or the absence of mistake
analyzing an alleged agreement between one supplier and one horizontal distributor as a vertical non- price-fixing conspiracy under the rule of reason
" `[T]here is more confusion about the scope and operation of the per se rule against group boycotts than in reference to any other aspect of the per se doctrine.' "
noting that the existence of concerted action is one of the important distinguishing features between a S 1 claim of conspiracy and a S 2 claim of monopolization

Written by the judges who cited it.

The opinion

Opinions of the United

1998 Decisions States Court of Appeals

for the Third Circuit

9-9-1998

Rossi v. Standard Roofing Inc (Part I)

Precedential or Non-Precedential:

Docket 97-5185

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Volume 1 of 2

Filed September 9, 1998

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

NO. 97-5185

JOSEPH ROSSI; ROSSI FLORENCE, CORP.;

ROSSI ROOFING, INC.,

Appellants

STANDARD ROOFING, INC.; ARZEE ROOFING SUPPLY

CORP.; GAF CORPORATION; ALLIED ROOFING, INC.;

SERVISTAR CORP.; ROBERT HIGGINSON; HARDWARE

WHOLESALERS, INC.; WILLIAM HIGGINSON;

CERTAINTEED CORP.; WOLVERINE CORP.; NAILITE

CORP.; ESTATE OF ROBERT HIGGINSON; AL ROTH;

CARY ROTH; JOSEPH LICCIARDELLO; WOOD FIBRE

INDUSTRIES, INC.

On Appeal From the United States District Court

For the District of New Jersey

(D.C. Civ. No. 92-cv-05377)

Argued: November 6, 1997

Before: BECKER, ROTH, Circuit Judges and

DIAMOND, District Judge.*

(Filed September 9, 1998)

_________________________________________________________________

* Honorable Gustave Diamond, United States District Judge for the

Western District of Pennsylvania, sitting by designation.

HAROLD E. KOHN, ESQUIRE

JOANNE ZACK, ESQUIRE

(ARGUED)

MICHAEL J. BONI, ESQUIRE

Kohn, Swift & Graf, P.C.

1101 Market Street, Suite 2400

Philadelphia, PA 19107

JONATHAN D. CLEMENTE,

ESQUIRE

Clemente, Dickson & Mueller, P.A.

218 Ridgedale Avenue

P.O. Box 1296

Morristown, NJ 07962-1296

Attorneys for Appellants

Joseph Rossi, Rossi Florence Corp.,

and Rossi Roofing, Inc.

ROBERT C. HEIM, ESQUIRE

(ARGUED)

JOSEPH A. TATE, ESQUIRE

CHRISTINE C. LEVIN, ESQUIRE

GEORGE G. GORDON, ESQUIRE

Dechert, Price & Rhoads

4000 Bell Atlantic Tower

1717 Arch Street

Philadelphia, PA 19103

SHELDON M. FINKELSTEIN,

ESQUIRE

SHIRLEY B. WHITENACK, ESQUIRE

HANNOCH WEISMAN, ESQUIRE

A Professional Corporation

4 Becker Farm Road

Roseland, NJ 07068

Attorneys for Appellee

GAF Corporation

STUART M. KURITSKY, ESQUIRE

(ARGUED)

Bursik, Kuritsky & Giasullo

443 Northfield Avenue

West Orange, NJ 07052

Attorneys for Appellees

Arzee Supply Corp.,

Alvin Roth and Cary Roth

STEVEN M. RICHMAN, ESQUIRE

(ARGUED)

PAUL J. FERDENZI, ESQUIRE

Gallagher, Briody & Butler

212 Carnegie Center, Suite 402

Princeton, NJ 08540

Attorneys for Appellee

Wood Fiber Industries, Inc.

STEPHEN F. BAN, ESQUIRE

(ARGUED)

Springer, Bush & Perry

A Professional Corporation

Two Gateway Center, 15th Floor

Pittsburgh, PA 15222

DAVID K. DeLONGE, ESQUIRE

Schumann, Hanlon, Doherty,

McCrossin & Paolino

30 Montgomery Street

P.O. Box 2029

Jersey City, NJ 07302

Attorneys for Appellee

Servistar Corporation

JOEL N. KREIZMAN, ESQUIRE

(ARGUED)

Evans, Osborne, Kreizman and

Bonney

180 White Road, Suite B 101

Little Silver, NJ 07739

Attorneys for Standard Roofing, Inc.,

William Higginson, The Estate of

Robert Higginson and

Joseph Licciardello

OPINION OF THE COURT

TABLE OF CONTENTS

PAGE

I. FACTS AND PROCEDURAL HISTORY 8

A. The Parties 8

B. Rossi at Standard; Rossi Forms His

Own Company 10

C. The Roofing and Siding Industry in Northern

New Jersey; Price Discounting and

Market Shares 12

D. Rossi's Damage Claims 14

E. Procedural History 15

II. SECTION 1 OF THE SHERMAN ANTITRUST ACT 16

A. Characterizing a Group Boycott; Per se Versus

the Rule of Reason 17

B. Concerted Action 23

1. Section 1 of the Sherman Antitrust Act --

Proving the Conspiracy 23

2. Rossi's Evidence of Concerted Action 27

a. Standard (Robert Higginson,

William Higginson, and Joseph Licciardello)

and Arzee (Al Roth and Cary Roth) 27

b. GAF 37

(1) Matsushita Implausibility 37

(2) Circumstantial Evidence Against GAF 44

(a) Distributors' Complaints and GAF's Response

(b) Actions in Contravention of GAF

Corporate Policy 46

(d) Pretextual Excuses 50

(e) Conclusion 51

c. Servistar 53

d. Wood Fiber 58

III. PROXIMATE CAUSE AND ANTITRUST INJURY 60

IV. STATE LAW TORTIOUS INTERFERENCE

WITH CONTRACTUAL AND PROSPECTIVE

CONTRACTUAL RELATIONS 69

V. CONCLUSION 70

BECKER, Chief Judge.*

This appeal from the grant of summary judgment in favor

of antitrust defendants presents a familiar pattern. A dealer

irritates his competitors and their principal supplier

through his aggressive price discounting practices. The

other dealers complain to the supplier, who, to placate the

aggrieved dealers, agrees not to sell any product to the

dealer. The "boycotted" dealer then brings a Sherman Act

suit, 15 U.S.C. S 1 et seq., in federal court. The alleged

conspiracy involves a number of the plaintiff's competitors,

and the refusal to deal is said to have become a group

boycott, which can be a horizontal antitrust violation with

per se antitrust implications; the supplier, notwithstanding

its vertical relation to the plaintiff, is said to have become

a co-conspirator.

The present case arose out of the rough and tumble

roofing and siding materials distribution business in

northern New Jersey, where several favored roofing and

_________________________________________________________________

* Honorable Edward R. Becker, United States Circuit Judge for the Third

Circuit, assumed Chief Judge status on February 1, 1998.

siding distributors were concerned that the entrance of a

new price cutting competitor could destabilize the market

and substantially cut into their profit margins. The

principal players in this drama are plaintiffs Joseph Rossi,

and his two successive roofing and siding distribution

businesses, Rossi Florence Corp. ("Rossi Florence"), and

Rossi Roofing, Inc. ("Rossi Roofing"); defendants Standard

Roofing, Inc., ("Standard") and Arzee Supply Corporation

("Arzee"), two of Rossi's chief competitors, and several of

their key officers; and defendant GAF Corporation ("GAF"),

the manufacturer that supplied the most important product

in the market. Minor roles were played by defendants Wood

Fiber Industries, Inc. ("Wood Fiber"), another roofing and

siding manufacturer, and Servistar Corp. ("Servistar"), a

national purchasing cooperative and reseller of roofing and

siding products.

Following discovery, the district court granted summary

judgment for all defendants on the ground that plaintiffs

had failed to adduce sufficient evidence to meet the

demanding standard of proof in the antitrust context

established by the Supreme Court's jurisprudence. The

court also relied on plaintiffs' alleged failure to demonstrate

causation and damages. While we agree with the district

court that Rossi cannot survive summary judgment as to

Servistar and Wood Fiber, we believe that the record is

sufficient to enable Rossi to survive summary judgment on

the antitrust claims as to Standard, Arzee, the individual

defendants associated with those firms, and GAF.

The Supreme Court's jurisprudence in the area of

concerted refusals to deal teaches that not every situation

in which a distributor is cut off at the behest of his

competitors constitutes a group boycott entitled to per se

treatment. Otherwise, legitimate efforts by manufacturers to

impose reasonable rules limiting intra-brand competition

would be outlawed and the beneficial effects such actions

have on inter-brand competition would be lost. Moreover,

the distinction between vertical and horizontal restraints

would blur. These concerns, however, are not implicated

here, in view of both the price-related orientation of the

alleged offending conduct of the key defendants and the

sheer scope and draconian modus operandi of the alleged

conspiracy.

The jurisprudence also renders it difficult for an antitrust

plaintiff to prove that the manufacturer and distributors

conspired, typically because it is difficult for the plaintiff to

demonstrate that what the manufacturer or supplier did

was inconsistent with independent action or that the

claimed conspiracy makes economic sense. In this case,

however, at least at the summary judgment stage, that

burden is surmounted by the presence of certain direct

evidence of conspiracy as well as: (1) evidence that GAF

acted against its consistent policy (and hence ostensibly

against its own interest) in refusing to sell (and seeing to it

that others did not sell) GAF products to Rossi; (2) evidence

of pretext in connection with GAF 's efforts to explain away

the foregoing; (3) evidence that the major suppliers had

sufficient leverage over GAF to induce it to so act; and (4)

the quite graphic and extensive nature of the statements

and actions of various defendants directed towards

eliminating Rossi as a price-cutting competitor who passed

secret rebates onto his customers and thereby threatened

to de-stabilize the market. We also discern genuine issues

of material fact on causation and damages, and this too

precludes summary judgment on the antitrust claims

against the key defendants.

Although the district court's order granting summary

judgment on the antitrust claims regarding GAF, Standard,

Arzee, and their corporate officers must be reversed, it

must be affirmed as to Servistar and Wood Fiber, since

Rossi has failed to overcome his burden of showing that

either Servistar's or Wood Fiber's actions tended to exclude

the possibility of independent action on their part. More

specifically, Rossi has failed to put forth any evidence of

Servistar's motive to conspire; as we shall explain,

Servistar's relationship to GAF was far different from that of

the distributor defendants. Rossi has also failed to show

that the other defendants had any leverage over Servistar

with which they could have coerced it to join the

conspiracy. With respect to Wood Fiber, the only evidence

Rossi has been able to adduce is that Wood Fiber may, on

one or two occasions, have responded to pressure and

threats from Standard and Arzee by not selling to Rossi,

and hence this record is insufficient to satisfy the

standards for proving concerted action as delineated by the

Supreme Court.

Rossi also pressed a tortious interference claim under

New Jersey state law. The district court granted summary

judgment for all defendants on this claim without any

discussion. This aspect of the judgment must be set aside

because it violates our rule requiring that district courts

accompany grants of summary judgment with an

explanation sufficient to permit the parties and this court

to understand the legal basis for the court's order. See

Vadino v. A. Valey Eng'rs, 903 F.2d 253, 257-60 (3d Cir.

1990).

I. FACTS AND PROCEDURAL HISTORY

The following background facts, which describe the basic

framework and background within which this case arises,

are set forth in the light most favorable to the non-moving

party as is required when considering a motion for

summary judgment. The remainder of Rossi's evidence,

most of which deals specifically with the existence vel non

of concerted action by the defendants, will be detailed in

S II.B.2, infra, after we have explained the appropriate legal

standards.

A. The Parties

The plaintiffs, in addition to Joseph Rossi, are Rossi

Florence and Rossi Roofing.1 Rossi has been in the roofing

and siding distribution business in northern New Jersey

_________________________________________________________________

1. Defendants contend that Joseph Rossi lacks standing as an individual

to pursue this matter against them because his personal claims of injury

are derivative of the claims of Rossi Florence and Rossi Roofing. The

district court did not reach that issue because it found that no antitrust

violation existed at all. See Rossi v. Standard Roofing, Inc., 958 F.

Supp.

976, 991 n.11 (D.N.J. 1997). Since we are reversing the district court's

grant of summary judgment in favor of several of the defendants and

remanding this case for further proceedings, we will also remand the

standing issue so that the district court can consider it in the first

instance. Because we are not then differentiating between plaintiffs for

the purposes of this appeal, we will assume that all three plaintiffs have

standing, and will generally use the term "Rossi" to refer to them all.

since 1972. Rossi Florence and Rossi Roofing were roofing

and siding distribution companies formed by Rossi at the

end of 1988 and the beginning of 1989. Both are now out

of business. This suit was brought against a number of

Rossi's competitors (as well as several individuals

associated with them), several roofing and siding

manufacturers, and one national purchasing cooperative.

Several of the original defendants, Allied Roofing, Inc.

("Allied"), Nailite Corp. ("Nailite"), Certainteed Corp.

("Certainteed"), and Wolverine Technologies Corp.

("Wolverine") have settled with Rossi and were dismissed

from the case. The remaining defendants are: Standard,

Arzee, GAF, Wood Fiber, Servistar, the estate of Robert

Higginson (hereinafter "Robert Higginson"), William

Higginson, Joseph Licciardello, Alvin Roth, and Cary Roth.

Standard and Arzee are distributors of roofing and siding

products in northern New Jersey. Like Rossi Roofing, they

purchase products from manufacturers and resell them to

contractors and applicators in large volume. Standard is

headquartered in Tinton Falls, New Jersey and has seven

branch locations, including five in New Jersey, one in

Pennsylvania, and one in Connecticut. Robert Higginson

was the founder and chairman of Standard. William

Higginson, Robert's son, is a shareholder and the current

president of Standard. Arzee is a family-owned distributor

with one of its branches located adjacent to Standard in

Cedar Knolls. Defendant Alvin Roth is a shareholder and

the president of Arzee, and defendant Cary Roth is Alvin's

son and one of Arzee's branch managers.

GAF and Wood Fiber manufacture and supply roofing

products to distributors like Rossi Roofing, Standard, and

Arzee. GAF and Wood Fiber are two of the 37 roofing

product manufacturers that serve the northern New Jersey

market. GAF manufactures and sells its roofing material

("GAF product") to most, but not all, of the distributors

located in northern New Jersey. GAF sold to Standard,

Arzee, and Allied, but refused to sell to Rossi. Joseph

Licciardello was an employee of GAF, who quit his job and

replaced Rossi as vice president of Standard after Rossi was

fired.2 Wood Fiber competes with GAF in the northern New

_________________________________________________________________

2. Section I.B, infra, provides further information about Rossi's career

Standard.

Jersey market, manufacturing and selling Structodek FS, a

product used principally in commercial roofing

applications.

Defendant Servistar is a member-owned, national

purchasing cooperative that operates hardware distribution

centers nationwide. Servistar has over 4000 members at

the retail level and deals primarily in paint, hardware,

plumbing and electrical supplies, housewares, lawn and

garden equipment, power tools, and lumber. Roofing

products account for only 2% of Servistar's total purchases

on behalf of its members, which were just under $1 billion

in 1990. Servistar does not warehouse roofing supplies, but

rather operates on a "drop shipment" basis, meaning that

members place their orders through Servistar (which

affords them a discount based on Servistar's status as a

national volume purchaser), and the selected roofing

manufacturer then supplies the product directly to the

member. Servistar pays the manufacturer and later collects

from the member.

B. Rossi at Standard; Rossi Forms His Own Company

From 1972 to 1988, Rossi worked for defendant Standard

as the manager of its Cedar Knolls, New Jersey branch,

selling roofing and siding materials. In 1980, Rossi was

promoted to vice president, rewarded with stock in the

company, and told that he would eventually become a co-

owner of the business. Eight years later, however, in

September 1988, Standard fired Rossi. The parties dispute

the reasons for Rossi's discharge. Rossi alleges that

Standard fired him because he refused to participate in a

conspiracy with defendant Arzee to fix prices, discussed

infra at S II.B.2.a. Standard claims that it fired Rossi for a

combination of reasons including his deteriorating work

performance, his failure to control expenses, the Cedar

Knolls branch's excessively high payroll expenses under his

management, his large personal expense account, his

failure to arrive at work until late morning, his

concentration on outside business ventures to the

detriment of Standard, and, ultimately, his failure to

achieve branch profits commensurate with branch sales.

At all events, by the time he was fired, Rossi had

developed a reputation within the industry for extremely

competitive pricing, excellent service, and reliability. While

at Standard, Rossi had refined an aggressive marketing

strategy that stressed high volume sales at low prices. This

strategy, as one might imagine, angered Rossi's competitors

and even concerned some of his suppliers, which were

sensitive to their distributors concerns about pricing.

After his termination, Rossi decided to use his

connections within the industry to open his own roofing

and siding distributorship that would serve northern New

Jersey in direct competition with Standard and Arzee.

Rossi's first attempt, in late 1988, was Rossi Florence, a

joint venture with Richard Droesch ("Droesch"), president of

Florence Corp. ("Florence"), a roofing, siding, and window

distributor in Long Island, New York. Rossi and Droesch

planned to operate their new business out of a warehouse

Rossi owned at 8 Frederick Place, located immediately

adjacent to Standard's Cedar Knolls/Morristown branch

and just down the street from Arzee's Morristown branch.

Rossi and Droesch made substantial preparations for their

venture during the fall of 1988. Droesch (together with one

of his employees) invested $100,000 in Rossi Florence, and

Rossi Florence obtained a $900,000 bank line of credit

secured by the principals' personal guarantees. By mid-

January 1989, however, Droesch decided to pull out of

Rossi Florence, and Rossi refunded his investment. Droesch

felt that because of pressure from Standard, Arzee, and

others, the new company would be unable to get the

products it needed to successfully compete in the market.

In addition, Alvin Roth, president of Arzee, threatened

Droesch that if he continued in business with Rossi in New

Jersey, Arzee would open up a branch in Long Island to

compete directly with Droesch's Florence distributorship.

Thereafter, in February 1989, Rossi incorporated Rossi

Roofing, continuing his efforts to break into the roofing and

siding distribution business in northern New Jersey. Rossi

Roofing obtained another $900,000 bank line of credit,

personally guaranteed by Rossi and his wife. The company,

which opened for business on March 20, 1989, closed in

less than a year, after experiencing great difficulty in

obtaining product lines and weathering the brunt of a

major downturn in the New Jersey housing industry. In

January 1990, unable to run Rossi Roofing profitably, Rossi

sold the company's assets to American Builders and

Contractors, Inc. ("ABC"), a national roofing and siding

distributor.

C. The Roofing and Siding Industry in Northern New

Jersey; Price Discounting and Market Shares

During the relevant time period, the northern New Jersey

market included thirty-nine roofing distributors with more

than fifty-seven locations. Eleven residential roofing

manufacturers, nine commercial roofing manufacturers,

and seventeen vinyl siding manufacturers operated in the

region. It is undisputed that this roofing and siding

marketplace was highly competitive, and that roofing and

siding contractors constantly price-shopped, pitting

distributor against distributor in order to obtain the best

possible deal.

GAF, which served this region, offered certain favored

distributors secret off-invoice, volume and non-volume

discounts or "rebates" in the form of periodic credits

against purchases. Standard, Arzee, and former defendant

Allied purportedly all received such discounts from GAF.

The amount of these discounts was kept highly confidential

because the favored distributors feared that if other

distributors found out, they might complain to GAF and

ultimately destabilize prices in the market. As GAF district

sales manager Elmer "Bud" Krusa put it, "the less people

that know about it, the less chance you have of getting it --

dropping the entire market price." Rossi contends that

while he was employed at Standard, he would pass these

discounts on to his customers in an effort to increase his

market share, whereas his competitors typically pocketed

the rebate.

GAF and Wood Fiber are the only two manufacturers

remaining as litigants in this case. According to GAF 's own

estimates, it supplied a large percentage of the New Jersey

shingle market (38% for all shingles and 71% for laminate

shingles). GAF was Standard's primary supplier of roofing

products in the 1980's, and Standard was GAF 's biggest

customer in New Jersey and one of its top five customers in

the entire country. Standard bought $7.7 million of GAF

product in 1989 (or 32% of GAF 's total sales in New Jersey

that year), substantially more than any other GAF customer

in New Jersey.

Arzee and former defendant Allied also purchased GAF

product, but in markedly smaller quantities. Arzee, for

example, featured Tamko and Owens Corning Roofing,

rather than GAF product, and only purchased $919,747 of

GAF product in 1989 (or 4% of GAF's total sales in New

Jersey in 1989). Together, however, Standard, Arzee, and

Allied (which bought $2.1 million of GAF product in 1989)

purchased $10.7 million of the $24.1 million of GAF

product sold in New Jersey (or 44% of GAF 's total sales in

New Jersey in 1989).3 Rossi contends that, notwithstanding

the large number of other manufacturers offering product

in the area, GAF product was critical for a distributor to

successfully compete in Northern New Jersey, as evidenced

by GAF's large market share and also the fact that it was

the most desirable and popular roofing material available.

This in turn stems in part from several facts: GAF product

was well-known by both homeowners and contractors; GAF

guaranteed its product; and importantly, GAF product had

already been selected for many of the existing townhouse

projects in northern New Jersey in 1989 and 1990, making

it impossible for the builders to switch brands mid-stream.

The evidence in the record regarding Wood Fiber's market

position in 1989-90 is not as clearly defined as that of GAF.

Wood Fiber manufactures Structodek FS, a commercial

roofing product used primarily in commercial applications

for certain modified bitumen roofs. Commercial work

comprised no more than a third of Rossi Roofing's

business; the remaining two-thirds consisted of residential

roofing. We do not know from the record how much product

_________________________________________________________________

3. 1989 sales of GAF product in the northern New Jersey market

(rounded to the nearest $100,000) were:

Company Amount % of Total Sales

Standard $ 7,700,000 32.0%

Allied $ 2,100,000 8.7%

Arzee $ 900,000 3.8%

Total $10,700,000 44.5%

Wood Fiber sold in the northern New Jersey market; nor do

we know what percentage of Wood Fiber's sales was

purchased by Standard or Arzee (or Allied); nor is there any

evidence that Wood Fiber had an off-invoice rebate program

favoring certain distributors similar to GAF's. This is not

surprising because Wood Fiber's involvement in this case

stems largely from two isolated episodes, one in which a

Wood Fiber representative complained of "pressure" not to

sell to Rossi Roofing, and another in which Wood Fiber

refused to supply product to Rossi after having accepted an

order. See infra S II.B.2.d.

D. Rossi's Damage Claims

Rossi submits that because of his inability to purchase

"GAF and other essential products, Rossi Roofing could not

succeed." Unable to sustain the business any longer, on

January 8, 1990, Rossi entered into an asset purchase

agreement with ABC, which leased Rossi's 8 East Frederick

Place property and opened a branch where Rossi Roofing

once stood. Most employees, including Rossi as the branch

manager, continued to work for ABC. According to Rossi,

ABC (which was able to get GAF and other products) did

very well. In 1990, it achieved over $5.5 million in sales,

and by 1993, sales had increased to $11 million.4 In 1993,

ABC fired Rossi, closed the Morristown branch, and

transferred operations to Randolph, New Jersey. Rossi then

entered into a similar agreement with Allied, which opened

up a location on Rossi's property and hired him to manage

it.

Rossi contends that he suffered substantial damages

when Rossi Florence and Rossi Roofing, unable to get GAF

and other important products, failed. In support, Rossi

offers the testimony of several of his former customers

during his tenure at Standard, who stated that they would

_________________________________________________________________

4. There is little evidence as to what the net profits (or losses) of the

ABC

branch were. Arzee contends, based upon some nebulous testimony in

the record, that the ABC branch run by Rossi suffered losses in each of

its four years of operation, app. at 4253-56, and that the Morristown

branch of ABC was a failure, generating only $5 million in revenues in

1990, $1.7 million less than Rossi's own break-evenfigure for Rossi

Roofing. App. at 4309-10.

have done business with Rossi Roofing if it had had the

necessary product lines. Thus, in Rossi's submission, if the

manufacturers had sold to him the same products that

they ultimately sold to ABC (and later Allied), Rossi Roofing

would have succeeded, and "over time, Rossi would have

had his company open up new branches, as Standard,

Arzee and Allied have done. The lost profits to Rossi

Florence, and to Rossi Roofing, have been over $7 million at

a minimum." In addition, Rossi claims to have suffered

additional, non-duplicative damages of over $1 million from

payments he made on behalf of Rossi Florence and Rossi

Roofing, including payments made on his personal

guarantees of Rossi Roofing's debts.

E. Procedural History

Rossi's action in the district court alleged, inter alia, a

group boycott in violation of Section 1 of the Sherman Act,

15 U.S.C. S 1, and Section 3 of the New Jersey Antitrust

Act, as well as tortious interference with plaintiffs'

contractual and prospective contractual relations.5 After

extensive discovery and submissions in support of and

opposition to the motions, the district court granted

defendants' motions for summary judgment, finding

insufficient evidence of concerted action, causation, and

damages. Rossi has appealed not only that judgment but

also a discovery ruling -- the district court's order denying

a motion to compel defendant GAF to provide additional

factual detail about the subject matter of GAF's counsel's

handwritten notes of three telephone conversations with

GAF employees.

The district court had subject matter jurisdiction

pursuant to 28 U.S.C. SS 1337 and 1367, as well as 15

U.S.C. S 15. We have appellate jurisdiction pursuant to 28

U.S.C. S 1291.

_________________________________________________________________

5. State law claims for breach of contract, conversion, fraud, and

negligent misrepresentation, arising out of Rossi's contractual

relationships with Standard, were dismissed without prejudice and are

not under review here.

II. SECTION 1 OF THE SHERMAN ANTITRUST ACT

Under the literal dictates of S 1 of the Sherman Act "every

contract, combination in the form of trust or otherwise, or

conspiracy, in restraint of trade or commerce . . . is

declared to be illegal." 15 U.S.C. 1 (emphasis supplied). The

Supreme Court has interpreted this provision to prohibit

only unreasonable restraints. See Business Elecs. Corp. v.

Sharp Elecs. Corp., 485 U.S. 717, 723 (1988). To determine

whether a restraint is unreasonable, courts apply one of

two modes of analysis, depending upon the nature of the

concerted action at issue. Agreements are either analyzed

through "a case-by-case application of the so-called rule of

reason," whereby 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," id. (internal quotations omitted),

or the court applies the per se standard, which dispenses

with the need for case-by-case analysis.6 See id. Under the

per se standard, conduct that is "manifestly

anticompetitive" or "would always or almost always tend to

restrict competition," id. (internal citations omitted), is

conclusively presumed to unreasonably restrain

competition "without elaborate inquiry as to the precise

harm [it has] caused or the business excuse for [its] use."

Northern Pac. Ry. v. United States, 356 U.S. 1, 5 (1958).

This is because "of [its] pernicious effect on competition and

lack of any redeeming virtue." Northern Pac. Ry., 356 U.S.

at 5. Thus, the first issue we must consider is whether the

conduct alleged here warrants per se or the more lenient

rule of reason treatment, because that determination will

dramatically affect the quantum of proof Rossi must offer to

sustain his claim.

_________________________________________________________________

6. We have also recently discussed a third standard that falls somewhere

between the rule of reason and per se standards. In our jurisprudence,

we refer to this middle ground as an abbreviated or"quick look" rule of

reason analysis. See Orson, Inc. v. Miramax Film Corp., 79 F.3d 1358,

1367 n.9 (3d Cir. 1996) (citing United States v. Brown Univ., 5 F.3d 658,

669 (3d Cir. 1993)). This "quick look" analysis applies "where per se

condemnation is inappropriate, but where a full-blown industry analysis

is not required to demonstrate the anticompetitive character of an

inherently suspect restraint." Id.

A. Characterizing a Group Boycott; Per se Versus the Rule

of Reason

Rossi, relying on such cases as United States v. General

Motors Corp., 384 U.S. 127 (1966), Big Apple BMW, Inc. v.

BMW of N. Am., Inc., 974 F.2d 1358, 1376 (3d Cir. 1992),

Fragale & Sons Beverage Co. v. Dill, 760 F.2d 469, 473 (3d

Cir. 1985); Malley-Duff, 734 F.2d at 140, and Edward J.

Sweeney & Sons, Inc. v. Texaco, Inc., 637 F.2d 105, 114 (3d

Cir. 1980), alleges that the defendants engaged in a classic

horizontal group boycott that qualifies as a per se violation.

Rossi submits that several of his fellow distributor-

competitors (i.e. Standard, Arzee, and Allied), as well as

their principal manufacturer/supplier(s), agreed to boycott

Rossi Florence and Rossi Roofing and frustrate Rossi's

attempts to obtain the products he needed to successfully

compete against them.

Defendants respond that Rossi's theory does not

comprise a per se antitrust claim because it is a vertical

conspiracy in which there has been no allegation of resale

price fixing. We agree with defendants that if this were

simply a vertical conspiracy, between one horizontal

competitor and one supplier or manufacturer, we would

analyze it under the rule of reason unless there were some

evidence of price fixing. See Business Elecs., 485 U.S. at

735-36 (analyzing an alleged agreement between one

supplier and one horizontal distributor as a vertical non-

price-fixing conspiracy under the rule of reason); Tunis

Brothers, 763 F.2d at 1497, 1502 (same); cf. Continental

T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36, 37, 59 (1977)

(concluding that franchise agreements that bar retailers

from selling franchised products from locations other than

those specified are analyzed under the rule of reason).7

Unlike the cases cited above, however, here there are a

number of horizontal competitors involved. Thus, this case

more closely resembles the horizontal nature of United

_________________________________________________________________

7. In Business Elecs., the Supreme Court indicated that the rationale

behind applying the rule of reason to vertical non-price restraints is

that

such restraints have the potential to promote inter-brand competition,

the "primary concern of the antitrust laws," over intra-brand

competition. See 485 U.S. at 724-25 (citations omitted).

States v. General Motors Corp., 384 U.S. 127 (1966), a case

that the Supreme Court treated as a group boycott with per

se implications.

In General Motors, the Supreme Court found a group

boycott where a group of automobile dealers had joined

together to force their manufacturer, General Motors, to

assist them in ending the practice of some dealers that

were reselling their automobiles to discounters. See id. at

143-44, 147. Other cases fit this mold as well. See, e.g., Big

Apple BMW, 974 F.2d at 1376 (analyzing an alleged

agreement among supplier BMW North America and several

of its dealers to prevent a potential price-cutting competitor

from receiving a franchise as a horizontal group boycott);

Sweeney, 637 F.2d at 114 (holding that when a

manufacturer terminates a distributor's supply pursuant to

an agreement with several distributors, these actions make

out a horizontal S 1 claim); cf. Klor's, Inc. v. Broadway-Hale

Stores, Inc., 359 U.S. 207, 212-13 (1959) (applying a similar

horizontal analysis under S 2 of the Sherman Act where

manufacturers and distributors had conspired among

themselves and with a major retailer to deprive another

retailer access to product lines).

The common principle we glean from these cases is that

a conspiracy is horizontal in nature when a number of

competitor firms agree with each other and at least one of

their common suppliers or manufacturers to eliminate their

price-cutting competition by cutting his access to supplies.

From this perspective, Rossi's asserted conspiracy is

indistinguishable from those put forth in General Motors,

Klor's, Big Apple BMW and Sweeney -- namely, "joint

action to eliminate [a] discounter[ ] from participation in the

market," General Motors, 384 U.S. at 144-- and thus, the

defendants' characterization of the conspiracy Rossi alleges

as vertical, and not horizontal, cannot withstand scrutiny.

This conclusion, however, leaves us with the second (and

ultimately more difficult) question whether this horizontal

agreement, which Rossi labels a "group boycott," qualifies

as a per se violation. Traditionally, such agreements have

received such per se treatment. See Malley-Duff & Assocs.

v. Crown Life Insur. Co., 734 F.2d 133, 140 (3d Cir. 1984).

Indeed, in all of the horizontal "group boycott" cases listed

above, the court adopted the per se approach. See, e.g.,

General Motors Corp., 384 U.S. at 143-44, 147; Klor's, 359

U.S. at 212-13; Big Apple BMW, 974 F.2d at 1376;

Sweeney, 637 F.2d at 114. More recently, however, the

Supreme Court has reminded us that it is not a simple

exercise to determine what conduct falls within the

"forbidden category" of a per se group boycott. See

Northwest Wholesale Stationers, Inc. v. Pacific Stationery &

Printing Co., 472 U.S. 284, 294 (1985) (" `[T]here is more

confusion about the scope and operation of the per se rule

against group boycotts than in reference to any other

aspect of the per se doctrine.' ") (quoting L. Sullivan, Law of

Antitrust 229-30 (1977)); FTC v. Indiana Fed'n of Dentists,

476 U.S. 447, 458-59 (1986). Under the more recent

jurisprudence, it is clear that assigning the label "group

boycott" to a concerted refusal to deal with a distributor

does not have a talismanic effect, automatically bringing

the case under the per se rubric. Instead, the Supreme

Court has directed us to carefully scrutinize the nature of

the asserted refusals to deal to determine whether it fits

within the per se " `boycott' pigeonhole." Indiana Fed'n of

Dentists, 476 U.S. at 458.

In Northwest Wholesale Stationers, the Supreme Court

attempted to explain what kinds of boycotts qualify for the

per se approach and what kinds do not. The Court

emphasized that the per se approach was appropriate when

the allegations were of "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." 472 U.S. at 294 (internal quotes omitted). The

Court also noted that per se boycott cases usually contain

three elements: "denial of something a competitor needs to

compete effectively, defendants with a dominant position in

the relevant market, and the absence of any plausible

contention that the challenged behavior would `enhance

overall efficiency and make markets more competitive.' " P.

Areeda & H. Hovenkamp, Antitrust Law P 1510È (Supp.

1997) (quoting and interpreting Northwest Wholesale

Stationers, 472 U.S. at 294-95). Finally, the Court

instructed that 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

anticompetitive effects. The mere allegation of a concerted

refusal to deal does not suffice because not all concerted

refusals to deal are predominantly anticompetitive."8

Northwest Wholesale Stationers, 472 U.S. at 295, 298.

Applying these precepts to the "boycott" at issue in

Northwest Wholesale Stationers, the Court determined that

it was "not a form of concerted activity characteristically

likely to result in predominantly anticompetitive effects." Id.

at 295. In that case, a retail office supply store had sued a

nonprofit cooperative buying association claiming that its

expulsion from the cooperative was per se illegal. The

expulsion --without explanation, notice, or hearing -- hurt

_________________________________________________________________

8. The Courts of Appeals have differed in their application of this

language. The Seventh Circuit has held that "once control over an

important resource appears, no justification for a refusal to deal can be

considered." Areeda & Hovenkamp, Antitrust Law P 1510È (interpreting

Fishman v. Wirtz, 807 F.2d 520, 541 (7th Cir. 1986) (holding that a

concerted refusal to deal is illegal per se if the "defendants have either

market power or exclusive access to an element essential to effective

competition.") (internal quotes omitted)). The Eighth and Ninth Circuits

have focused on the number of horizontal players in the alleged

conspiracy and have found no per se rule against boycotts in situations

where the conspirators included only a single supplier and a single

retailer in competition with the plaintiff. See id. (discussing Lomar

Wholesale Grocery, Inc. v. Dieter's Gourmet Foods, Inc., 824 F.2d 582,

591 (8th Cir. 1987) ("there must be some collusion between competitors

on the same market level," for otherwise the "net economic impact of

refusals to deal" is not "immediately obvious") and Rutman Wine Co. v.

E. & J. Gallo Winery, 829 F.2d 729, 734 (9th Cir. 1987)). The implication

of these holdings would seem to be that the result differs as the number

of parties to the conspiracy grows. This Court has tended to follow the

Eighth and Ninth Circuits and has seemingly been more willing than

some others, see, e.g., K.M.B. Warehouse Dists., Inc. v. Walker Manuf.

Co., 61 F.3d 123, 127 (2d Cir. 1995) (viewing an alleged agreement

among a vertical manufacturer and three horizontal distributors as a

vertical non-price-fixing conspiracy subject to the rule of reason, not

per

se, analysis), to find an horizontal per se violation when a small number

of dealers have prevailed upon a manufacturer or supplier to cut off a

price discounter. See, e.g., Big Apple BMW, 974 F.2d at 1376; Malley-

Duff, 734 F.2d at 140, and Sweeney, 637 F.2d at 114.

the plaintiff by effectively raising the wholesale price of

supplies and eliminating certain favorable warehousing

options made available to members of the defendant.

Examining this type of restraint, the Court held that "[t]he

act of expulsion from a wholesale cooperative does not

necessarily imply anticompetitive animus and thereby raise

a probability of anticompetitive effect." Id. at 296 (citations

omitted). Rather, the Court noted that cooperatives must

"establish and enforce reasonable [membership] rules in

order to function effectively." Id. Therefore, the rules that

the plaintiff allegedly violated (it allegedly failed to disclose

to the cooperative membership of a change in its

ownership) might have been necessary for the cooperative

to monitor its members' creditworthiness. Without a

showing that "the cooperative possesse[d] market power or

exclusive access to an element essential to effective

competition," the Court held that expulsion based upon

violation of the disclosure rules was not "likely to result in

predominantly anticompetitive effects." Id.

Similarly, in Indiana Fed'n of Dentists, the Court refused

to extend per se group boycott status to a situation in

which a professional association collectively refused to

cooperate with insurers' requests for x-rays. The Court

refused to expand the category of cases classified as per se

group boycotts to situations involving professional

associations or situations where "the economic impact of

certain practices is not immediately obvious." 476 U.S. at

459. While the collective refusal to cooperate with insurers

"resemble[d] practices that have been labeled `group

boycotts,' " the Court refused to hold that the economic

impact of this agreement was immediately obvious. Id. at

458.

Here, in contrast to Indiana Fed'n of Dentists and

Northwest Wholesale Stationers, the defendants are not

members of a professional association, and the economic

impact of their actions -- driving a price-cutting competitor

out of business -- is clear. Applying the precepts laid out

in Northwest Wholesale Stationers, we believe that the Rossi

boycott falls within the description of "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." 472 U.S. at 294 (internal quotes

omitted). As will be discussed more fully below, see infra

S II.B.2.b(1), Rossi has adduced evidence that GAF product

was, if not unique, then at least necessary for him to

compete in the marketplace. Further, the gravamen of his

complaint fits snugly within the Court's Northwest

Wholesale Stationers description of per se concerted

refusals to deal -- namely, Standard and Arzee (and

perhaps other horizontal competitors like Allied) conspired

with manufacturers like GAF and suppliers like Servistar to

deny Rossi access to GAF product as well as to coerce other

suppliers not to sell any products to him. Importantly, all

of this activity was done against the backdrop of Standard's

and Arzee's dissatisfaction with Rossi's price-cutting

proclivities, and thus an inference can be drawn that the

conspiracy was at least partially conceived as a price

restraint.

For these reasons, we find it implausible that the alleged

behavior by the defendants would "enhance overall

efficiency and make markets more competitive," Northwest

Wholesale Stationers, 472 U.S. at 294, and therefore, taking

into account the Court's most recent guidance, we conclude

that Rossi's allegations should be analyzed using the per se

framework.

Our conclusion that Rossi's allegations constitute a per

se violation of S 1 simplifies our analysis here. In the usual

rule of reason case, to establish a violation ofS 1, plaintiffs

must prove:

(1) that the defendants contracted, combined or

conspired among each other; (2) that the combination

or conspiracy produced adverse, anti-competitive

effects within the relevant product and geographic

markets; (3) that the objects of and the conduct

pursuant to that contract or conspiracy were illegal;

and (4) that the plaintiffs were injured as a proximate

result of that conspiracy.

Tunis Bros. Co., Inc. v. Ford Motor Co., 763 F.2d 1482, 1489

(3d Cir. 1985) (citations omitted), vacated on other grounds,

Ford Motor Co. v. Tunis Brothers Co. Inc., 475 U.S. 1105

(1986). Here, because per se analysis applies, prongs two

and three are conclusively presumed satisfied and need not

be addressed. Accordingly, to prevail on summary

judgment, Rossi need only show the existence of a genuine

issue of material fact regarding concerted action and

proximate causation. We will address these in turn.

B. Concerted Action

1. Section 1 of the Sherman Antitrust Act-- Proving the

Conspiracy

The presence of concerted action or an agreement is an

essential element of a S 1 claim. See Copperweld Corp. v.

Independence Tube Corp., 467 U.S. 752, 771 (1984)

("[U]nity 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.)

(internal quotes omitted); Alvord-Polk, Inc. v. F. Schumacher

& Co., 37 F.3d 996, 999-1000 (1994) (noting that the

existence of concerted action is one of the important

distinguishing features between a S 1 claim of conspiracy

and a S 2 claim of monopolization). Unilateral activity, no

matter what its motivation, cannot give rise to aS 1

violation, see Sweeney, 637 F.2d at 110-11, because a

manufacturer "has the right to deal, or refuse to deal, with

whomever it likes, as long as it does so independently."

Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 761

(1984). A plaintiff may utilize either direct or circumstantial

evidence in order to make out the element of concerted

action. While direct evidence, the proverbial "smoking-gun,"

is generally the most compelling means by which a plaintiff

can make out his or her claim, it is also frequently difficult

for antitrust plaintiffs to come by. Thus, plaintiffs have

been permitted to rely solely on circumstantial evidence

(and the reasonable inferences that may be drawn

therefrom) to prove a conspiracy. See Alvord-Polk, 37 F.3d

at 1000 (citing Theatre Enterprises, Inc. v. Paramount Film

Distributing Corp., 346 U.S. 537 (1954); Sweeney, 637 F.2d

at 111).

While the traditional summary judgment standard

applies with equal force in antitrust cases,9 when the

_________________________________________________________________

9. A district court's grant of summary judgment is subject to plenary

review. See Knabe v. Boury Corp., 114 F.3d 407, 410 n.4 (3d Cir. 1997);

plaintiff relies solely on circumstantial evidence to prove

concerted action, this analysis is modified in accordance

with the leading antitrust cases dealing with this subject,

Monsanto and Matsushita Elec. Indus. Co., Ltd. v. Zenith

Radio Corp., 475 U.S. 574, 587 (1986), and their progeny.

In Matsushita, the Supreme Court explained the limitation

courts must apply to permissible inferences when deciding

a summary judgment motion in an antitrust conspiracy

case: "[C]onduct as consistent with permissible competition

as with illegal conspiracy does not, standing alone, support

an inference of antitrust conspiracy." Matsushita, 475 U.S.

at 588 (citing Monsanto, 465 U.S. at 764). Rather, to

survive a motion for summary judgment, "a plaintiff seeking

damages for a violation of S 1 must present evidence `that

tends to exclude the possibility' that the alleged

conspirators acted independently," id., "direct or

circumstantial evidence that reasonably tends to prove that

_________________________________________________________________

Public Interest Research of New Jersey v. Powell Duffryn Terminals, Inc.,

913 F.2d 64, 71 (3d Cir. 1990). Summary judgment "shall be rendered

forthwith if the pleadings, depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if any, show that there

no genuine issue as to any material fact and that the moving party is

entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). An

issue

is genuine if "the evidence is such that a reasonable jury could return a

verdict for the non-moving party." Anderson v. Liberty Lobby, Inc., 477

U.S. 242, 248 (1986).

As in this case, when the nonmoving party will bear the burden of

proof at trial, that party must adduce evidence "sufficient to establish

the existence of [every] element essential to that party's case, and on

which that party will bear the burden of proof at trial." Celotex Corp. v.

Catrett, 477 U.S. 317, 322 (1986). In evaluating the sufficiency of the

evidence, facts and inferences must be viewed in the light most favorable

to the party opposing summary judgment. See Eastman Kodak Co. v.

Image Technical Servs., Inc., 504 U.S. 451, 456 (1992); Matsushita Elec.

Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). That

being said, however, when the moving party has pointed to material facts

tending to show there is no genuine issue for trial, the "opponent must

do more than simply show that there is some metaphysical doubt as to

the material facts . . . . Where the record taken as a whole could not

lead

a rational trier of fact to find for the nonmoving party, there is no

`genuine issue for trial.' " Matsushita, 475 U.S. at 586-87 (citations

omitted).

[the alleged conspirators] `had a conscious commitment to

a common scheme designed to achieve an unlawful

objective.' " Monsanto, 465 U.S. at 764 (quoting Sweeney,

637 F.2d at 111).

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, 475

U.S. at 594; Monsanto, 465 U.S. at 763; Big Apple BMW,

974 F.2d at 1363 ("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 (1919)). For this

reason, the plausibility of an antitrust plaintiff's claim is

important. "[I]f the factual context renders [the plaintiff's]

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

(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. 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.

Under our jurisprudence, the Matsushita standard only

applies when the plaintiff has failed to put forth direct

evidence of conspiracy. See Petruzzi's IGA Supermarkets,

Inc. v. Darling-Delaware Co., Inc., 998 F.2d 1224, 1233 (3d

Cir. 1993). Thus, in direct evidence cases, the plaintiff need

not adduce circumstantial evidence " `that tends to exclude

the possibility' that the alleged conspirators acted

independently," Matsushita, 475 U.S. at 588, and there

need not be an inquiry into the plausibility of the

defendants' claim or the rationality of defendants' economic

motives. See id. at 596-97. This is because when the

plaintiff has put forth direct evidence of conspiracy, the fact

finder is not required to make inferences to establish facts,

and therefore the Supreme Court's concerns over the

reasonableness of inferences in antitrust cases evaporate.

See Petruzzi's, 998 F.2d at 1233.

Additionally, our jurisprudence does not require the

summary judgment opponent to " `match, item for item,

each piece of evidence proffered by the movant,' " but rather

he or she must only exceed the " `mere scintilla' " standard.

See Petruzzi's, 998 F.2d at 1230 (quoting Big Apple BMW,

974 F.2d at 1363). Accordingly, when examining the

sufficiency of what the plaintiff has adduced, we are not to

"tightly compartmentalize the evidence," but rather we must

evaluate it as a whole to see if it supports an inference of

concerted action. See id. at 1230.

In sum, Matsushita does not introduce a special burden

on antitrust plaintiffs opposing summary judgment; it

"demands only that the nonmoving party's inferences be

reasonable in order to reach the jury, a requirement that

was not invented, but merely articulated, in that decision.

If the plaintiffs theory is economically senseless, no

reasonable jury could find in its favor, and summary

judgment should be granted." Eastman Kodak, 504 U.S. at

468-69 (footnote omitted). Conversely, Matsushita does not

mean that antitrust defendants are entitled to summary

judgment merely by showing that there is a plausible

explanation for their conduct; rather "the focus must

remain on the evidence proffered by the plaintiff and

whether that evidence `tends to exclude the possibility that

[the defendants] were acting independently.' " Petruzzi's,

998 F.2d at 1232 (quoting Monsanto, 465 U.S. at 764).

Thus, where the nonmoving 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

1230.

Finally, while ambiguous conduct cannot create a triable

issue of fact, when "the alleged conduct is `facially

anticompetitive and exactly the harm the antitrust laws aim

to prevent,' no special care need be taken in assigning

inferences to circumstantial evidence." Alvord-Polk, 37 F.3d

at 1001 (quoting Eastman Kodak, 504 U.S. at 478).

With these standards in mind, we will address the

evidence adduced by Rossi in support of his theory of

conspiracy. Cognizant of our obligation to view the evidence

as a whole and to resist the temptation to

compartmentalize it, see Petruzzi's, 998 F.2d at 1230, we

will nonetheless consider Rossi's allegations, defendant by

defendant, to provide a logical structure to our analysis. We

note in this regard that this court has been relatively

hospitable to the efforts of plaintiffs to prove concerted

action. See Alvord-Polk, 37 F.3d at 1010, 1013; Petruzzi's,

998 F.2d at 1247; Big Apple BMW, 974 F.2d at 1380, 1383;

Arnold Pontiac-GMC, Inc. v. Budd Baer, Inc., 826 F.2d 1335,

1338-39 (3d Cir. 1987); Arnold Pontiac-GMC, Inc. v. General

Motors Corp., 786 F.2d 564, 572-75 (3d Cir. 1986); Tunis

Bros., 763 F.2d at 1489, 1502.

2. Rossi's Evidence of Concerted Action

a. Standard (Robert Higginson, William Higginson,

Joseph Licciardello) and Arzee (Al Roth and Cary Roth)10

We begin with Rossi's horizontal competitors, Standard

and Arzee, against whom Rossi has the strongest evidence

of motive to keep a price-cutting competitor with close ties

to many customers from entering the market. Standard's

and Arzee's (as well as the other defendants') first line of

defense to Rossi's charges is that the conspiracy he alleges

is implausible, and therefore under Matsushita, permitting

an inference of antitrust conspiracy would have the effect of

"chill[ing] the very conduct the antitrust laws are designed

to protect." 475 U.S. at 594. According to the defendants,

there was no rational economic reason for them to conspire,

_________________________________________________________________

10. In our discussion of Standard, Robert Higginson, William Higginson,

Joseph Licciardello, and also Arzee, Alvin Roth, and Cary Roth, we find

no basis to separate the individual defendants from their respective

corporate employers. Thus, for shorthand purposes, when we make

future reference to "Standard" or "Arzee," (or the "Standard defendants"

and the "Arzee defendants"), we refer to the individuals as well as the

corporate entities with which they are related.

and thus they had no plausible motive to conspire to

boycott Rossi.

They base their implausibility claim on the fact that the

market was extremely price competitive and consisted of

upwards of three dozen competing distributors. Under

these conditions, defendants argue that they could not have

charged above-market prices and stayed in business, and

thus that they had nothing to fear from a price-cutter like

Rossi. Moreover, they submit that there would be little to

gain by excluding one more distributor from the market

when there were at least three dozen firms in the market

already. In defendants' view, any conspiracy to stabilize the

market and reap enhanced profits would be doomed to

failure (and is therefore presumably implausible) because,

to succeed, it would have required an enormously complex

and far-reaching undertaking, involving upwards of sixty

participants (each selling different quantities of comparable,

competing products) to stabilize prices at supra-competitive

levels. Defendants maintain that, because there was

virtually no likelihood that three (Standard, Arzee, and

Allied) out of the almost forty competing distributors, and

one or two (GAF and possibly Wood Fiber) out of thirty

manufacturers could have sustained such a conspiracy,

they had no rational motive to conspire, and the conspiracy

is thus implausible.

The defendants compare this to the situation in

Matsushita. There, the defendants were alleged to have

entered into a twenty-plus-year conspiracy to fix prices in

the electronics market below the market level in the hopes

of establishing a monopoly and extracting monopoly profits

in the undetermined future. See Matsushita, 475 U.S. at

588-90. The Court viewed this predatory pricing scheme as

implausible because it would have required multiple

defendants to endure tremendous up-front losses for the

foreseeable future in the hopes that they could, at some

point, recover these losses and make even greater profits

once they had driven their competitors from the market and

established a monopoly. See id. at 589-90. The Court,

examining the electronics market as well as the length and

ongoing failure of the alleged conspiracy, concluded that

there was no evidence that the defendants could ever

recoup such losses, see id. at 594-95, and therefore, that

the defendants had no motive to engage in the conspiracy.

See id. at 595.

Standard's and Arzee's reliance on Matsushita in this

case is misplaced for several reasons. As a threshold

matter, Matsushita does not apply when there is direct

evidence of conspiracy. See Petruzzi's, 998 F.2d at 1233.

Here, Rossi has adduced direct evidence of concerted action

between defendants Standard and Arzee in the form of a

threat Rossi received in December of 1988. Joseph

Licciardello, who had by that time left his job at GAF and

was working in Rossi's old job as manager of the Standard

branch at Cedar Knolls, told Rossi that Standard and Arzee

would do whatever it took to put him out of business if he

persisted with his plans to found Rossi Florence. In his

deposition, Rossi testified:

Q: Mr. Rossi, tell me specifically what anyone from

Standard did to prevent Rossi Florence from going into

business.

* * *

A: I guess it started when Joe Licciardello came over

and threatened me that if I went into business that he

and Arzee Supply would do anything they could, stop

supplies, cut the prices, whatever they had to do they

were going to do to keep me out of business. That's the

way he put it.11

_________________________________________________________________

11. Arzee argues that this statement is not admissible against it under

Bourjaily v. United States, 483 U.S. 171 (1987). We conclude that it is.

Under Fed. R. Evid. 801(d)(2)(E), "a statement by a coconspirator of a

party during the course and in furtherance of the conspiracy" is not

inadmissible hearsay as to that party. Under our jurisprudence, four

requirements must be met before a statement can be admitted under

this exception. "It must appear: (1) that a conspiracy existed; (2) the

declarant and the party against whom the statement is offered were

members of the conspiracy; (3) the statement was made in the course of

the conspiracy; and (4) the statement was made in furtherance of the

conspiracy." United States v. McGlory, 968 F.2d 309, 333 (3d Cir. 1992).

The district court must find these requirements by a preponderance of

the evidence. See Bourjaily, 483 U.S. at 175; McGlory, 968 F.2d at 333.

The district court made no such finding here. It did not even address the

Licciardello's threat, viewed in a light most favorable to

Rossi, indicates that two of his competitors had discussed

and agreed to act jointly to prevent Rossi from competing

with them in the roofing and siding business in northern

New Jersey. Moreover, Licciardello's statement even details

how the two companies planned to do it; they agreed to

"stop supplies" anyway they could. Thus, we conclude that

the Matsushita implausible conspiracy argument is not

relevant to the allegations of conspiracy with respect to

Standard and Arzee. However, even if, as in the case of

GAF, there was no direct evidence of concerted action, the

conspiracy Rossi alleges is not implausible. Indeed, as we

will discuss below, with respect to Standard, Arzee, and

GAF, the conspiracy makes perfect sense. See infra

S II.B.2.b(1).

The direct evidence discussed above is enough to take the

case against Standard and Arzee beyond the constraints of

Matsushita (and thus permits us to avoid the questions

whether the circumstantial evidence tends to exclude the

possibility of independent action, whether the plaintiff 's

claim is plausible, and whether the defendants' economic

motives were rational). See supra at S II.B.1. However, it is

not enough by itself to satisfy Rossi's burden in opposing

summary judgment. On the other hand, Rossi has adduced

a significant collection of other evidence, circumstantial in

nature, in support of his position. We turn to that evidence

now.

First, Rossi has adduced evidence of two meetings

between Standard and Arzee employees which, when taken

_________________________________________________________________

issue, concluding, as a matter of law, that no conspiracy existed. Thus,

the question whether there is sufficient evidence to permit such a finding

is subject to plenary review. See McGlory 968 F.2d at 334.

As will be made clear in the discussion that follows, the record is

replete with circumstantial evidence that Licciardello, Standard, and

Arzee were members of a conspiracy to boycott Rossi and drive him out

of business. See infra S II.B.2.a. As the record also shows,

Licciardello's

threat was made during the conspiracy and in furtherance of it. We

conclude therefore that Rossi has satisfied the preponderance standard

with respect to all four requirements.

together, support the inference of a joint motive by the two

defendants to unlawfully stabilize roofing prices in northern

New Jersey. This motive is consistent with the motive

behind the defendants' alleged boycott of Rossi Florence

and Rossi Roofing -- that Standard and Arzee wanted to

eliminate an uncooperative competitor who threatened to

undercut their prices and destabilize the market. Rossi

testified that sometime in 1986 or 1987, while he was still

working for Standard (he was fired in September 1989), his

boss at that time and chairman of Standard, Robert

Higginson, directed him to attend a lunch with Al and Cary

Roth of Arzee. According to Rossi, Robert Higginson told

him that this lunch had been set up so that the two

competitors could "cooperate" and share price information.

Robert Higginson also told Rossi that Standard's other

competitors had pricing agreements and that they were the

only ones who were not participating. At the lunch, Al Roth

proposed to Rossi a price-fixing scheme whereby Arzee and

Standard would fix prices and divide up their large

customers and jobs. Al Roth further explained to Rossi that

he had maintained a similar arrangement with Allied

concerning Certainteed products. Rossi rejected Al Roth's

overtures, and Standard and Arzee did not, at that time,

enter into an agreement to set prices.

The second Standard-Arzee meeting at which prices were

discussed took place over the telephone in February of

1990. It involved a conversation between Licciardello, the

manager at that time of Standard's Cedar Knolls branch,

and Cary Roth, the manager of one of Arzee's local

branches, regarding the price of GAF vinyl siding. Patrick

Mulcahy, a former employee of Standard who overheard the

conversation, recalled that Licciardello said to Cary Roth:

"We really got to run this like a business and we all have

to make a profit here. And we've got to keep certain price

levels in order to do this."12 This statement is remarkably

_________________________________________________________________

12. Standard and Arzee both raise questions about whether this

conversation actually took place. In addition to denying it, they point

out

that Mulcahy did not hear the voice of the person on the phone, and

only heard Licciardello talking to someone named "Cary." Mulcahy

assumed the person on the other end of the line was Cary Roth. As this

is before us on a motion for summary judgment, we conclude that, in a

light most favorable to Rossi, a jury could infer that "Cary" was Cary

Roth of Arzee.

similar to other statements that we have found probative of

an agreement between competitors. See, e.g., Petruzzi's,

998 F.2d at 1236 ("[W]hy don't you put your prices in line

and make money on what you have?").

Neither of these discussions took place during the period

of the alleged conspiracy to boycott and exclude Rossi from

the market; one took place before, and one after. Yet we

reject Standard's and Arzee's contention that they are

irrelevant to our decision. The two pieces of evidence,

especially taken together, are probative of Standard's and

Arzee's motive. Evidence that Standard's and Arzee's

principals had actively considered fixing prices and

allocating customers in 1986-87, and again in 1990, is

sufficient to permit the inference that Standard and Arzee

may have had a long-standing intent to stabilize prices in

the roofing distribution business in northern New Jersey.

See Big Apple BMW, 974 F.2d at 1360-61 (reviewing

evidence outside of the statute of limitations and thus not

part of the alleged conspiracy which nevertheless

"demonstrat[ed] a pattern of conduct"); see also Andersen v.

Maryland, 427 U.S. 463, 483-84 (1976) (proof of similar

acts is admissible to show intent or the absence of

mistake); Keyes v. School District No. 1, 413 U.S. 189, 207-

08 (1973) (citing the well-settled evidentiary principle that

" `the prior doing of other similar acts, whether clearly a

part of a scheme or not, is useful as reducing the

possibility that the act in question was done with innocent

intent.' ") (quoting 2 J. Wigmore, Evidence 200 (3d ed.

1940)). Because Rossi was known to the defendants as a

price-cutter and potent competitor who had refused to

collude on prices in the past, this circumstantial evidence

tends to link Standard's and Arzee's motives with their

other actions in support of the boycott, which are detailed

below.

The record is also replete with examples of high pressure

recruitment, monitoring, and enforcement tactics

undertaken by Standard and Arzee in furtherance of their

efforts to prevent Rossi from purchasing roofing materials,

particularly GAF product. There is evidence that Standard

and Arzee put pressure on virtually everyone, including

manufacturers, distributors, and even Rossi's prospective

business partner, Droesch, to convince them not to do

business with Rossi. In December 1988, for example, Al

Roth called Droesch, who had agreed to establish Rossi

Florence and go into business with Rossi, and told him that

he was not happy about Rossi competing against Arzee and

that if Droesch proceeded with his plans to establish Rossi

Florence with Rossi, Roth would open up an Arzee location

on Long Island near Droesch's Florence business which

was located there. Also in late 1988 and early 1989,

representatives of several manufacturers told Rossi that

they were being pressured not to deal with him or sell to

Rossi Florence. Specifically, Rossi testified that

representatives from Gold Bond, Wood Fiber, Bird

Corporation, Homosote, Hi-Finn, Genstar, Vipco, and

Hastings Aluminum, told him that they had been

threatened by representatives of Standard. Similarly,

representatives of Nailite and Certainteed claimed that they

had been threatened by Arzee.13

There was evidence that after Rossi incorporated Rossi

Roofing in early 1989, Standard's and Arzee's pressure on

manufacturers and distributors continued. Joe Mullenhour

of Bird Corporation told Rossi that Licciardello of Standard

had threatened to drop Bird's vinyl siding if Bird

Corporation sold to Rossi Roofing. Bill Higginson of

Standard also spoke to Raymond Six of Gold Bond and told

him that he was "disappointed" that Gold Bond had agreed

to sell to Rossi Roofing. Six cut off the conversation because

he was concerned by the antitrust implications of Bill

Higginson's overtures. More specifically, Six told Higginson

that he would not let the conversation go further because:

Gold Bond had been in an anti-trust suit back in the

70's on gypsum. Every Gold Bond manager - well, I'll

say every Gold Bond employee had been schooled, I'll

say, from 1975 on, anyway, on what Robinson-Patman

is, what Sherman anti-trust was. So the conversation

wasn't going to go any further than what my statement

to him was.

_________________________________________________________________

13. While offered in hearsay form, we will consider these statements

because they are capable of being admissible at trial, see Petruzzi's, 998

F.2d at 1234 n.9 (citations omitted), for Rossi has simply to produce the

declarants to give the testimony. Id.

When Rossi asked Jim Hines of Hi-Finn to supply Rossi

Roofing with the "Atlas" insulation line, he arranged for

Rossi to buy the product indirectly through a middleman at

a higher price. When Hines later visited Standard on a

sales call, Licciardello told him, "You know why I can't do

business with you." Hines replied that "if it has anything to

do with the truck of Atlas insulation that Joe Rossi has in

stock, that was purchased through another distributor, not

directly through Atlas." Licciardello referred Hines to Bob

Schaab, Standard's Controller, who told Hines to"[d]o what

you want to." Based upon his experience with Schaab and

his dealings with Standard, Hines testified that he

concluded that conversation with "the feeling that his

implication may have been that, if I sold to Joe [Rossi], he

definitely wouldn't buy from me." Finally, Hines testified

that his business with Standard fell off right around the

time that Rossi purchased the Atlas insulation from the

middleman recommended by Hines. On this evidence, a fact

finder could reasonably draw the inference that Licciardello

had threatened Hines to ensure Hi-Finn's cooperation in

the boycott of Rossi, and that, when Hines rebuffed him,

Standard punished Hines and Atlas by cutting off future

purchases.

Similarly, Rick Fiore, an employee of roofing

manufacturer Certainteed, told Rossi that Cary Roth of

Arzee had pressured him and threatened to sue Certainteed

if it sold to Rossi Roofing. Robert Qualik of Nailite informed

Rossi that Arzee had told Nailite not to sell to Rossi Roofing

and that "[Arzee] had blocked [Rossi Roofing] from getting

product on a particular job right around the corner from

us." Also, Karl Loser of Wood Fiber told Rossi that he was

receiving a lot of pressure from Standard not to sell

Structodek FS, a Wood Fiber product, to Rossi Roofing.

In an effort to circumvent these supply problems arising

from his efforts to buy directly from manufacturers, Rossi

attempted to purchase product through other distributors,

even though this would cost more. For example, Rossi was

able to convince Passaic Metals, a roofing and siding

distributor in northern New Jersey, to sell him some GAF

product. In response, Bill Higginson of Standard called his

competitor, Frank Gurtman, the president of Passaic

Metals, and threatened to open a branch near Passaic

Metals and take away all of his customers if Gurtman

continued to sell to Rossi.

There is also evidence that Standard and Arzee went to

great lengths to monitor Rossi Roofing. The record indicates

that Licciardello ordered Keith Cogley and Jorge Esteves to

report to him the comings and goings of all roofing

materials at Rossi Roofing. All three closely watched Rossi's

premises on a daily basis to determine what kinds of

products Rossi was able to purchase and from where they

might be coming. Cary Roth and Ed Jacobitz of Arzee also

frequently monitored Rossi Roofing by sitting in their cars

in a cul-de-sac adjacent to Rossi's premises.

In addition, there is evidence that Standard even reported

back to GAF when its employees saw GAF product on

Rossi's premises to assist GAF in enforcing the boycott.

Former GAF district manager Licciardello, then working for

Standard, admitted that after seeing GAF product on

Rossi's premises, he called Bob Gessner of GAF to confirm

that GAF was still not selling to Rossi. On another

occasion, when a load of GAF was sitting out in front of

Rossi Roofing, Gessner said to Licciardello, "I thought we

weren't selling him," to which Licciardello responded "we're

not."

When Standard's Cogley saw a load of GAF product at

Rossi Roofing, Licciardello called GAF to find out how Rossi

had procured the product. Someone at GAF told

Licciardello that the load was not for Rossi Roofing, but

that it was being transported on a Jentar truck, and was

simply stopping overnight at 8 East Frederick Place, where

both Jentar Trucking and Rossi Roofing had offices. Later,

after Licciardello learned that Rossi Roofing had purchased

GAF product from Servistar through his Far Hills account,

see infra S II.B.2.c, Licciardello told Standard employee

Esteves that " `That's the last time we're going to be seeing

any GAF across the street.' They got the -- they were

getting the loads through [Far Hills], which is [Servistar].

That's how Joe Rossi was getting GAF and he's

[Licciardello's] going to put an end to that. `Never going to

see another GAF load across the street.' "

While this monitoring and reporting activity would not in

isolation be probative of a conspiracy, in the context of the

pressure and enforcement tactics described above, the

direct evidence that Standard and Arzee had talked about

and agreed to boycott Rossi Florence and Rossi Roofing,

and the circumstantial evidence of motive, certain

inferences can be drawn from this evidence. To enforce a

boycott, Standard and Arzee would need to monitor

carefully the supplies Rossi was able to procure,

communicate to cooperating manufacturers any evidence

that Rossi had been able to circumvent the boycott, and

bring pressure on any non-cooperating manufacturers or

distributors that refused to participate in the conspiracy.

Here, Rossi has adduced evidence of exclusive monitoring

by both Standard and Arzee, and evidence that Licciardello

could "put an end" to Rossi receiving GAF product. Viewed

in conjunction with the evidence that Standard and Arzee

pressured many manufacturers and distributors, this

monitoring and reporting activity also supports an inference

that Rossi's two primary competitors were jointly

attempting to establish a market-wide boycott of Rossi

Roofing.

We emphasize that we would not consider the evidence

that Standard and Arzee aggressively monitored Rossi

Roofing (and even reported the substance of those

observations to GAF), without more, sufficient to satisfy

Rossi's burden in opposing summary judgment. However,

in conjunction with all of the other pieces of circumstantial

evidence Rossi has adduced, we believe that this monitoring

and reporting activity represents an important thread to be

considered in the complicated tapestry of conspiracy that

Rossi weaves.

Looking at all of the evidence Rossi has assembled

against Standard and Arzee, we conclude that he has

satisfied his burden in opposing summary judgment on the

concerted action prong. First, Rossi has developed direct

evidence that Standard and Arzee had, both before and

after Rossi Roofing existed, attempted to conspire to fix

prices, allocate customers, and otherwise stabilize the

roofing and siding distribution market in northern New

Jersey. He has also shown that both defendants knew him

to be a price-cutting competitor who had frustrated their

unlawful purposes by refusing to cooperate with them.

These two facts provide strong evidence of the defendants'

motive to conspire against Rossi. Desiring to raise prices

above their competitive levels in a highly competitive

market, an inference is supported that Standard and Arzee

were concerned that they could not succeed without Rossi's

cooperation, and that they therefore decided to prevent him

from competing against them.

Next, Rossi points us to direct evidence of the boycott,

namely Licciardello's threat on behalf of Standard and

Arzee to cut off his supplies and put him out of business.

Finally, Rossi has developed considerable evidence of

Standard's and Arzee's elaborate efforts to enforce the

boycott. Rossi has produced testimony that many

manufacturers and distributors were pressured and/or

threatened not to do business with Rossi Florence and

Rossi Roofing. He has also adduced testimony that

Standard and Arzee had an elaborate monitoring system in

place, one which even included reporting back to GAF to

help enforce the boycott.

To be sure, this evidence is far from conclusive. It could

be found at trial that Standard, Arzee, and GAF were all

acting independently of one another in parallel efforts to do

Rossi in. However, given the comprehensive nature of the

evidence covering all elements of the group boycott Rossi

alleges, we must reverse the district court's order granting

summary judgment in favor of Standard, Arzee, Robert

Higginson, William Higginson, the Roths, and Licciardello.

b. GAF

We also believe that Rossi has adduced sufficient

evidence that GAF acted in concert with Standard and

Arzee to survive its motion for summary judgment and will

reverse the district court with respect to GAF as well.

(1) Matsushita Implausibility

GAF's first defense, like Standard's and Arzee's, is that

the conspiracy alleged by Rossi is implausible under

Matsushita. Because Licciardello's statement that Standard

and Arzee intended to establish a boycott of Rossi Roofing

is insufficient by itself to hold in GAF, and we can find no

(other) direct evidence of GAF 's participation in the alleged

conspiracy in the record, we must analyze, under the

Matsushita standard, the plausibility of the conspiracy that

Rossi alleges. See supra S II.B.2.a. In contrast with that

case, we find that the theory Rossi advances with respect to

GAF 's motivations and participation in the conspiracy is

not economically implausible.

First, Rossi's claim does not, as defendants allege,

require the cooperation of dozens of distributors and

manufacturers (each selling different quantities of

comparable competing products) in the northern New

Jersey marketplace to succeed (i.e. for distributors

Standard, Arzee, and Allied to be able to charge supra-

competitive prices). Rather, it is primarily focused on the

actions of three distributors, Standard, Arzee, and Allied,

and one manufacturer, GAF. Despite the fact that this case

arises against the backdrop of the highly competitive, price-

sensitive roofing and siding industry in northern New

Jersey in 1989 and 1990, Rossi advances a plausible theory

of how these defendants could have unlawfully conspired to

fix prices and therefore why they would want to boycott

Rossi. Moreover, even if Standard and Arzee were not

conspiring to keep prices artificially inflated by pocketing

the secret rebates that their competitors were not receiving,

both still had a plausible motive to keep Rossi, an avowed

and experienced price-cutter and acknowledged potent

competitor with a reputation among their customers for

excellent service, from opening up a competing

distributorship next door.

In order to comprehend the plausibility of the conspiracy

Rossi alleges, it is necessary to understand GAF's position

in the market and the importance of GAF product. In 1990,

GAF was indisputably one of the largest and most

important manufacturers of roofing supplies in the

northern New Jersey market, with an estimated 38% share

of the entire residential roofing shingle market in New

Jersey and an estimated 71% share of the residential

roofing laminate shingle market in New Jersey. GAF not

only supplied a large percentage of the overall market, but

it also was Standard's single largest supplier during the

time that Rossi was a manager there. As such, Rossi was

extremely familiar with GAF, and a large percentage of his

customers, many of whom followed him from Standard to

Rossi Roofing, had a strong preference for GAF product.

Indeed, there is substantial testimony in the record from

many sources supporting Rossi's contention that GAF

product was critical to both Rossi Florence's and Rossi

Roofing's success in the market.

For example, Sean Coffey, one of the five largest

residential roofers in northern New Jersey, testified that he

used GAF product in 1989 and 1990 almost exclusively and

would not buy from any roofing distributor that did not

have access to it. Similarly, Francis Doherty, proprietor of

another large roofing business in northern New Jersey,

testified that "99 percent" of his strip shingle purchases

had been GAF product. John Feher, another roofer who

attempted to purchase GAF product from Rossi Roofing,

testified that GAF was very popular with everyone,

including contractors and homeowners, because "it's easy

to get and guarantees [sic] and everything is good on it."

Thomas Harnett, an executive at Bird Corporation, testified

that GAF "dominated all levels of roofing in New Jersey,"

and that it was a "highly desirable product."

Likewise, Albert Logan, a former Celotex employee, stated

that GAF had "dominate[d] the market for years,"

representing at least fifty percent of every distributor's

inventory. John Mulcahy, a former Standard employee, also

testified that GAF was "dominant and had . . . [its]

product[s] so well-established in the area." Because of this,

Mulcahy stated that any distributor denied access to GAF

product would have difficulty competing in the residential

shingle market. Id. When asked to describe the magnitude

of the adverse impact of trying to compete without GAF

product, Mulcahy stated, "It would be like a beer

distributor not having Budweiser."

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.