Lepages Inc v. MN Mining Mfg Co

Opinions of the United

2002 Decisions States Court of Appeals

for the Third Circuit

1-16-2002

Lepages Inc v. MN Mining Mfg Co

Precedential or Non-Precedential:

Docket 0-1368

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Volume 1 of 2

Filed January 14, 2002

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

Nos. 00-1368 and 00-1473

LEPAGE'S INCORPORATED;

LEPAGE'S MANAGEMENT COMPANY, LLC,

Appellees/Cross-Appellants

v.

3M (MINNESOTA MINING AND MANUFACTURING

COMPANY); KROLL ASSOCIATES, INC.

Minnesota Mining and Manufacturing Company,

Appellant

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. Civ. No. 97-03983)

District Judge: The Honorable John R. Padova

Argued July 12, 2001

BEFORE: SLOVITER, ALITO, and GREENBERG,

Circuit Judges

(Filed: January 14, 2002)

Barbara W. Mather (argued)

Jeremy Heep

Pepper Hamilton LLP

3000 Two Logan Square

18th and Arch Streets

Philadelphia, PA 19103-2799

Peter Hearn

Peter Hearn, P.C.

519 Pine Street

Philadelphia, PA 19106

Mark W. Ryan

Kerry Lynn Edwards

Donald M. Falk

Robert L. Bronston

David A.J. Goldfine

Mayer, Brown & Platt

1909 K Street, N.W.

Washington, D.C. 20006-1101

Attorneys for Appellees/

Cross-Appellants

M. Laurence Popofsky

Stephen V. Bomse (argued)

Paul Alexander

Marie L. Fiala

Heller Ehrman White & McAuliffe

333 Bush Street

San Francisco, CA 94104

John G. Harkins, Jr.

Harkins Cunningham

2800 One Commerce Square

2005 Market Street

Philadelphia, PA 19103

Attorneys for Appellant/

Cross-Appellee

2

OPINION OF THE COURT

GREENBERG, Circuit Judge.

This matter comes on before the court on defendant 3M's

(Minnesota Mining and Manufacturing Company) appeal

from an order of the district court entered March 14, 2000,

partially granting and partially denying its motion for

judgment as a matter of law and denying 3M's motion for

a new trial and on plaintiff LePage's Incorporated's cross-

appeal from the order partially granting 3M's motion for

judgment as a matter of law.1 LePage's brought this

antitrust action asserting that 3M used its monopoly over

its "Scotch" tape brand to gain a competitive advantage in

the private label tape portion of the transparent tape

market in the United States through the use of 3M's multi-

tiered "bundled rebate" structure, which offered higher

rebates when customers purchased products in a number

of 3M's different product lines. LePage's also alleged that

3M offered some LePage's customers large lump-sum cash

payments, promotional allowances and other cash

incentives to encourage them to enter into exclusive dealing

arrangements with 3M.

After the jury found in 3M's favor on LePage's's claims for

unlawful agreements in restraint of trade and exclusive

dealing but against 3M on LePage's's monopolization and

attempted monopolization claims, 3M filed its motions for

judgment as a matter of law and for a new trial, arguing

that its rebate and discount programs and its other alleged

conduct of which LePage's complained did not constitute

the basis for a valid antitrust claim as a matter of law and

that, in any event, the court's charge to the jury was

insufficiently specific and LePage's's damages proof was

speculative.2 The district court granted 3M's motion for

_________________________________________________________________

1. The plaintiffs in this action are LePage's Incorporated and LePage's

Management Company, LLC, and both are appellees and cross-

appellants. Inasmuch as we can discern no distinction between their

interests, we refer to them simply as LePage's singularly.

2. 3M unsuccessfully had moved for a judgment as a matter of law at the

close of LePage's's case and after the close of the entire case.

3

judgment as a matter of law on LePage's's "attempted

maintenance of monopoly power" claim but denied 3M's

motion for judgment as a matter of law in all other respects

and denied its motion for new trial. See LePage's Inc. v. 3M,

No. Civ. A. 97-3986, 2000 WL 280350 (E.D. Pa. Mar. 14,

2000). The court subsequently entered a judgment for

trebled damages of $68,486,679 to which interest was to be

added, and this appeal and cross-appeal then followed.

We will affirm the district court's order granting the

motion for judgment as a matter of law with respect to the

"attempted maintenance of monopoly" claim but will reverse

the district court's order denying the motion for judgment

as a matter of law in all other respects. Thus, we will

remand the case to the district court to enter judgment in

favor of 3M.

I. BACKGROUND

A. FACTUAL BACKGROUND

3M, founded in 1902, introduced transparent tape for

home and office use over 70 years ago. The readers of this

opinion no doubt will recognize that 3M's Scotch products

have become a familiar brand, and, in fact, 3M dominated

the United States transparent tape market with a market

share above 90% until the early 1990s. LePage's, founded

in 1876, has sold a variety of office products and, around

1980, decided to sell "second brand" and private label tape,

i.e., tape sold under the retailer's, rather than the

manufacturer's name. This endeavor was successful to the

extent that LePage's captured 88% of private label tape

sales in the United States by 1992. Moreover, changing

distribution patterns and consumer acceptance of"second

brand" and private label tape accounted for a shift of some

tape sales from branded tape to private label tape. These

changes were attributable to the rapid growth of office

superstores such as Staples and Office Depot and mass

merchandisers such as Wal-Mart and Kmart, as many of

these retailers wanted to use their "brand names" to sell

stationery products including transparent tape. Not

surprisingly, during the early 1990s, 3M also entered the

private label business.

4

LePage's claims that, in response to the growth of this

competitive market, 3M engaged in a series of related,

anticompetitive acts aimed at restricting the availability of

lower-priced transparent tape to consumers. It also claims

that 3M devised programs that prevented LePage's and the

other domestic company in the business, Tesa Tuck, Inc.,

from gaining or maintaining large volume sales and that 3M

maintained its monopoly by stifling growth of private label

tape and by coordinating efforts aimed at large distributors

to keep retail prices for Scotch tape high.3 LePage's claims

that it barely was surviving at the time of trial and that it

suffered large operating losses from 1996 through 1999.

1. Rebate program

This case centers on 3M's programs that, beginning in

1993, involved offers by 3M of "package" or"bundled"

discounts for various items ranging from home care and

leisure products to audio/visual and stationery products.

Customers could earn rebates by purchasing, in addition to

transparent tape, a variety of products within 3M's

stationery division, such as Post-It Notes and packaging

products. These programs created incentives for retailers to

purchase more 3M products and enabled customers to

have single invoices, single shipments and uniform pricing

programs for various products in its consumer products

division. The size of the rebate, however, was linked to the

number of product lines in which the customers met the

targets, an aggregate number that determined the rebate

percentage the customer was to receive on all of its 3M

purchases across all product lines. Therefore, if customers

failed to meet growth targets in multiple categories, they

received no rebate, and if they failed to meet the target in

one product line, 3M reduced their rebates substantially.

These requirements are at the crux of the controversy here,

as LePage's claims that customers could not meet these

growth targets without eliminating LePage's as a supplier.

In practice, 3M's rebate program evolved so that it offered

three different types of rebates: Executive Growth Fund,

_________________________________________________________________

3. It appears that at least at the times material to this action, there

were

no other domestic manufacturers of transparent tape. There were,

however, foreign manufacturers.

5

Partnership Growth Fund and Brand Mix Rebates. 3M

developed a "test program" called Executive Growth Fund

("EGF ") for a small number of retailers, 11 in 1993 and 15

in 1994. Under EGF, 3M negotiated volume and growth

targets for each customer's purchases from the six 3M

consumer product divisions involved in the EGF program.

A customer meeting the target in three or more divisions

earned a volume rebate of between 0.2-1.25% of total sales.

Beginning in 1995, 3M undertook to end the EGF test

program and institute a rebate program called Partnership

Growth Fund ("PGF ") for the same six 3M consumer

products divisions. Under this program, 3M established

uniform growth targets applicable to all participants.

Customers who increased their purchases from at least two

divisions by $1.00 and increased their total purchases by at

least 12% over the previous year qualified for the rebate,

which ranged from 0.5% to 2%, depending on the number

of divisions (between two to five divisions) in which the

customer increased its purchases and the total volume of

purchases. Under both the EGF and PGF programs,

customers could use their rebates as they saw fit.

In 1996 and 1997, 3M offered price incentives called

Brand Mix Rebates to two tape customers, Office Depot and

Staples, to increase purchases of Scotch brand tapes. 3M

imposed a minimum purchase level for tape set at the level

of Office Depot's and Staples's purchases the previous year

with "growth" factored in. To obtain a higher rebate, these

two customers could increase their percentage of Scotch

purchases relative to certain lower-priced orders.

2. The Major Customers

The evidence at trial focused on the parties' actual

experience with a limited number of customers which we

thus discuss at length.

Wal-Mart

Before 1992, Wal-Mart bought private label tape only

from LePage's but, in August 1992, decided to buy private

label tape from 3M as well. In response, LePage's lowered

its prices and increased its sales to Wal-Mart. In 1997, Wal-

Mart stopped buying private label tape but offered

6

LePage's's branded tape as its "second tier" offering. In

1998, however, Wal-Mart told LePage's that it was going to

switch to a tape program from 3M. LePage's's president

then visited Wal-Mart following which Wal-Mart changed its

plans and retained LePage's as a supplier. Afterwards, Wal-

Mart designed a test comparing LePage's's brand against a

3M Scotch utility tape to determine who would win Wal-

Mart's "second tier" tape business. LePage's added more

inches (approximately 20% more) to its rolls of tape and

won the test. 3M continued, however, to sell other Scotch

brand tapes to Wal-Mart, and LePage's saw its sales to Wal-

Mart decline to approximately $2,000,000 annually by the

time of trial. LePage's claims that Wal-Mart cut back on its

tape purchases to qualify for 3M's bundled rebate of

$1,468,835 in 1995.

Kmart

Kmart accounted for 10% of LePage's's annual tape sales

when LePage's lost its business to 3M in 1993. Kmart

asked its suppliers, including 3M, to provide a single bid on

its entire private label tape business for the following year.

LePage's's president believed, however, that Kmart was "too

lazy to make a change," and that it would "never put their

eggs in one basket" by giving all the business to 3M.

LePage's offered the same price it had offered the previous

year but also offered a volume rebate. 3M offered a lower

price and won the bid. Kmart asked for rebates and

"market development" funds as part of the private label

tape bid process. 3M offered $200,000 for promotional

activities and a $300,000 volume rebate if Kmart purchased

$10,000,000 of 3M's Stationery Division products.

LePage's claims that 3M offered Kmart $1,000,000 to

eliminate LePage's and Tesa as suppliers and to make 3M

its sole tape supplier. LePage's points to a 3M document

outlining 3M's goal for Kmart to exceed $15,000,000 in 3M

purchases with the reward being that Kmart would receive

$75,000 in each of the first two quarters and $100,000 in

the last two quarters for promotional activities and would

receive $650,000 as a volume rebate if the sales exceeded

$15,000,000. If the sales were less, the rebate would be

decreased accordingly, e.g., a $400,000 rebate for

$13,000,000 of sales. LePage's claims that, as a practical

7

matter, Kmart had to eliminate LePage's and Tesa to reach

the growth 3M required in order to qualify for the rebate.

LePage's asserts that, despite its efforts to regain the

private label business from Kmart, one Kmart buyer told it

that he could not talk to LePage's about tape products for

the next three years. See Br. of Appellee at 9.

Staples

Staples had been a LePage's customer for several years.

From 1990 to 1993, LePage's increased its sales to Staples

by 440%, growing from $357,000 to $1,954,000. In 1994,

Staples considered reducing suppliers and asked LePage's

and 3M for their best offers in 1994. LePage's assumed that

if 3M did make a good offer, LePage's would have a chance

to make a better proposal. LePage's did not make its lowest

offer, and 3M won the account. When LePage's went back

to Staples with a new price, it was told that the decision

had been made. LePage's claims that 3M offered an extra

1% bonus rebate on Scotch products if Staples eliminated

LePage's as a supplier (a "growth" rebate that only could be

met by converting all of LePage's's private label business to

3M). 3M paid Staples an advertising allowance in four

payments totalling $1,000,000 in 1995 and gave it

$500,000 in free merchandise delivered during Staples's

fiscal year 1994. 3M refers to a "$1.5 million settlement"

with Staples and refers to multiple payments for different

purposes. LePage's, however, implies that these payments

bore some connection to Staples's award of its second-tier

tape business to 3M. Br. of Appellee at 10.

Office Max

In 1998, after a dispute between Office Max and LePage's,

Office Max accepted 3M's offer that matched but did not

beat LePage's's price. LePage's objected to 3M's matching

whatever price LePage's offered, and also objected to 3M's

"clout" payment. Office Max required its suppliers to make

payments to help advertise the Office Max name, and

LePage's had paid this "clout" payment in the years

previous to 1998 when it refused to pay it because of its

dispute with Office Max. Nevertheless, the buyer for Office

Max testified that its decision to give its business to 3M

was not related to its pricing and rebate program but rather

to the consistency of its service.

8

Walgreens

Walgreens had purchased private label tape from

LePage's from 1992 until 1998, when it decided to import

tape from Taiwan. LePage's's chief executive officer

acknowledged that LePage's did not lose the account due to

3M's activities.

American Stores

Until 1995, LePage's's sales of private label tape to

American Stores exceeded $1,000,000 annually. According

to LePage's, a month after American Stores decided that it

would try to maximize 3M's PGF rebate, it shifted its tape

business to 3M. In 1995, American Stores decided to stop

buying LePage's tape, principally because of quality

concerns. In a letter to James Kowieski, Senior Vice

President of Sales at LePage's, Kevin Winsauer, the

manager of the private label department at American,

wrote: "After much deliberation comparing the pros and

cons of LePage's program and 3M's program, I have decided

to award the business to 3M. 3M's proposal was very

competitive and I am sure LePage's would meet their costs

to retain the business. However, the decision to move to 3M

is primarily based on Quality." SJA 2050-51 (emphasis in

original). When American Stores decided to purchase from

3M, it was not participating in any rebate programs, and

Winsauer testified that he was not aware that there were

rebate programs. He also testified that even without the

volume incentive programs, 3M's price was still slightly

lower than LePage's's.

Dollar General, CVS, and Sam's Club

LePage's lost Dollar General's private label business to a

foreign supplier but later won the business back. According

to LePage's's president, Dollar General used the bid for

import tape to leverage a price reduction from LePage's. 3M

bid on the CVS account, but LePage's retained CVS as a

customer by lowering its prices and increasing its rebate. At

Sam's Club, LePage's tape had been selling well when its

buyers were directed by senior management to "maximize"

all purchases from 3M to maximize the EGF/PGF rebate.

Subsequently, Sam's Club stopped purchasing from

LePage's.

9

Other distributors and buying groups

LePage's claimed that 3M's pricing practices prevented or

hindered it from selling private label tape to certain

companies:

(1) Costco. Costco, however, never has sold private label

tape. (2) Office Depot. Office Depot also never has sold

private label tape. LePage's tried to convince Office Depot to

buy private label tape in 1991 or 1992 (before 3M

implemented the rebate programs), but Office Depot

decided to continue purchasing 3M brand tape. (3) Pamida

and Venture Stores. LePage's claimed that 3M offered these

stores discounts conditioned on exclusivity, thereby

preventing LePage's from selling private label tape to them.

LePage's lost Venture Stores' business in 1989, five years

before 3M provided the discount at issue. (4) Office Buying

Groups. 3M offered an optional 0.3% price discount to

National Office Buyers ("NOB") and UDI if they exclusively

promoted certain 3M products in their catalogs. If the

buying group carried a lower value brand alternative to

3M's main brand (its second line), then the group would

receive a lower annual volume rebate. LePage's viewed

these kind of contract provisions as a "penalty" that coerced

buying group members to purchase tape only from 3M. For

example, if a buying group promoted the products of a

competitor, it lost rebates for purchases in three categories

of products. See Br. of Appellee at 20. 3M argues that

LePage's could have offered its own discount or rebate but

instead refused to pay the standard promotional fee that

UDI charged suppliers for inclusion in its catalog.

B. PROCEDURAL BACKGROUND

LePage's began this action on June 11, 1997, alleging

that 3M had engaged in predatory pricing,4 tying, full-line

forcing, monopoly leveraging, and exclusive dealing in

violation of sections 1 and 2 of the Sherman Act, 15 U.S.C.

SS 1, 2, and/or section 3 of the Clayton Act, 15 U.S.C. S 14.

_________________________________________________________________

4. LePage's in its original complaint alleged on information and belief

that 3M's "bundled rebates, promotional allowances and other cash

incentives across its home and office product line .. . in the aggregate

lower the . . . net price for 3M's tape below 3M's cost."

10

After 3M filed a motion to dismiss, LePage's dropped its

allegations of full-line forcing and tying because the

necessary element of coercion was not present. LePage's

filed two amended complaints and ultimately alleged that

3M:

(1) began targeting LePage's['s] customers with private-

label tape programs in order to deprive LePage's of

sales revenue, efficient volume distribution, and

transactional efficiency (2) sought to drive LePage's

from the [m]arket through use of `bundled rebates' (3)

offered a multi-tiered rebate to its customers across its

product line . . . thereby forcing customers to give up

buying from LePage's; and (4) offered some of

LePage's['s] largest customers large lump-sum cash

payments, promotional allowances, inventory

repurchase, and other cash incentives to encourage

them to enter into an exclusive dealing arrangement

with 3M.

Br. of Appellant at 3-4.

3M moved for summary judgment after discovery,

claiming that its conduct was permissible as a matter of

law. In this regard, 3M argued that its rebates were in effect

an element of pricing and that its prices were above its

costs. Thus, it contended that LePage's's case failed for in

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

509 U.S. 209, 222, 113 S.Ct. 2578, 2587 (1993), the Court

indicated that "a plaintiff seeking to establish competitive

injury from a rival's low prices must prove that the prices

complained of are below an appropriate measure of its

rival's costs." Id., 113 S.Ct. at 2587. Of course, 3M adheres

to the same fundamental point on this appeal as it

emphasizes that LePage's disavows any contention that

3M's prices were predatory or below costs and that"[a]bove-

costs pricing cannot give rise to an antitrust offense as a

matter of law" inasmuch as in Brooke Group the Court held

"that it is not unlawful to lower one's prices so long as they

remain above cost." Br. of Appellant at 30, 36.

Notwithstanding its original allegations to the contrary,

LePage's answered that it did not claim in this case that 3M

engaged in predatory pricing and that it could satisfy the

11

legal standards reflected in SmithKline Corp. v. Eli Lilly &

Co., 575 F.2d 1056 (3d Cir. 1978), so as to justify this

action. The district court denied 3M's motion for summary

judgment based on the court's view that LePage's might be

able to prove a SmithKline intra-market monopoly

leveraging claim depending on the structure of the program

and the role of 3M's monopoly power in it. See LePage's Inc.

v. 3M, No. Civ. A 97-3983, 1999 WL 346223, at *7 (E.D. Pa.

May 14, 1999).

The case was tried before a jury on the following claims:

exclusive dealing and unreasonable restraint of trade under

section 1 of the Sherman Act and section 3 of the Clayton

Act and monopolization and attempted maintenance of

monopoly power under section 2 of the Sherman Act. After

a lengthy trial, the jury unanimously found for 3M on

LePage's's claims for unlawful agreements in restraint of

trade and exclusive dealing and for LePage's on its

monopolization and attempted monopolization claims. The

jury awarded LePage's damages of $22,828,899, which the

court later trebled to $68,486,697 when it entered the

judgment on April 6, 2000.

On November 24, 1999, 3M moved for judgment as a

matter of law and for a new trial. 3M argued that its rebate

and discount programs and other allegedly predatory

conduct did not give rise to a valid antitrust claim as a

matter of law, that the jury charge was insufficiently

specific, and that LePage's's damage proof was speculative

and failed to relate damages to specific unlawful conduct.

As we have indicated, the district court granted 3M's

motion for judgment as a matter of law on the "attempted

maintenance of monopoly power" claim but denied 3M's

motion for judgment as a matter of law in all other respects

and denied its motion for a new trial. See LePage's, 2000

WL 280350, at *12-13.

3M filed a timely notice of appeal on April 25, 2000, and

LePage's filed a timely notice of cross-appeal on its

"attempted maintenance of monopoly power" claim on May

5, 2000. LePage's has not appealed the jury's verdict that

3M did not engage in exclusive dealing or otherwise violate

section 1 of the Sherman Act or section 3 of the Clayton

Act, and thus those claims no longer are directly in issue in

12

the case. Therefore, this appeal and cross-appeal concern

only whether 3M violated section 2 of the Sherman Act by

unlawfully maintaining a monopoly in the United States

market for home and office transparent tape and for

unlawful attempted maintenance of monopoly power in that

market.

II. DISCUSSION

A. JURISDICTION

The district court had jurisdiction over this case

pursuant to 28 U.S.C. SS 1331 and 1337(a) because

LePage's brought these claims under the Sherman and

Clayton Acts. We have jurisdiction over this appeal

pursuant to 28 U.S.C. S 1291.

B. STANDARD OF REVIEW

We exercise plenary review over an order granting or

denying a motion for judgment as a matter of law. See

Shade v. Great Lakes Dredge & Dock Co., 154 F.3d 143,

149 (3d Cir. 1998). When, as here, a defendant makes such

a motion, a court should grant it "only if, viewing the

evidence in the light most favorable to the nonmovant and

giving it the advantage of every fair and reasonable

inference, there is insufficient evidence from which a jury

reasonably could find liability." Lightning Lube, Inc. v. Witco

Corp., 4 F.3d 1153, 1166 (3d Cir. 1993). Thus, we review

the evidence on the appeal in a light most favorable to

LePage's and on the cross-appeal in a light most favorable

to 3M. We note, however, that our opinion largely turns on

legal determinations and the historical facts are not in

sharp dispute. We review questions of law underlying the

jury verdict on a plenary basis as well. See Bloom v.

Consolidated Rail Corp., 41 F.3d 911, 913 (3d Cir. 1994).

While the parties tender issues on this appeal relating to

the review of an order denying a new trial and with respect

to damages, we do not set forth a standard of review on

these issues as we do not reach them.

13

C. MONOPOLIZATION CLAIM

We will reverse the denial of 3M's motion for judgment as

a matter of law on the monopolization claim. LePage's

argues that 3M willfully maintained its monopoly through a

"monopoly broth" of anticompetitive and predatory conduct.

LePage's relies heavily on our opinion in SmithKline for its

argument that a court can find that a company willfully has

acquired and maintained monopoly power if it links a

product on which it does not face competition with a

product on which it faces competition. We conclude,

however, that this case is distinguishable from SmithKline,

which thus is not controlling. Rather, we agree with 3M

that LePage's simply did not establish that 3M's conduct

was illegal, as LePage's did not demonstrate that 3M's

pricing was below cost and, in the absence of such proof,

the record does not supply a basis on which we can uphold

the judgment.

There are two elements of a monopolization claim under

section 2 of the Sherman Act: "(1) the possession of

monopoly power in the relevant market and (2) the willful

acquisition or maintenance of that power as distinguished

from growth or development as a consequence of a superior

product, business acumen, or historic accident." United

States v. Grinnell Corp., 384 U.S. 563, 570-71, 86 S.Ct.

1698, 1704 (1966). Willful maintenance involves using

anticompetitive conduct to "foreclose competition, to gain a

competitive advantage, or to destroy a competitor." Eastman

Kodak Co. v. Image Technical Servs., 504 U.S. 451, 482-83,

112 S.Ct. 2072, 2090 (1992) (internal quotation marks

omitted). LePage's contends that 3M's bundled rebates were

anticompetitive and predatory. It also argues that 3M's

other practices, such as exclusionary contracts and the

timing of its rebates, were also anticompetitive and

predatory.

1. Bundled Rebates

LePage's primarily complains of 3M's use of bundled

rebates. While we have held that rebates on volume

purchases are lawful, see Advo, Inc. v. Philadelphia

Newspapers, Inc., 51 F.3d 1191, 1203 (3d Cir. 1995),

LePage's seeks to avoid that principle by pointing out that

14

3M offered higher rebates if customers met their target

growth rate in different product categories, in effect linking

the sale of private label tape with the sale of other

products, such as Scotch tape, which customers had to buy

from 3M. Thus, LePage's explains:

3M understood that, as a practical matter, every

retailer in the country had to carry Scotch-brand tape

. . . . It therefore decided to structure its rebates into

bundles that linked that product with the product

segment in which it did face competition from LePage's

(second-line tape) . . . . To increase the leverage on the

targeted segment, 3M further linked rebates on

transparent tape with those for many other products

. . . . The rival would have to `compensate' the

customer for the amount of rebate it would lose not

only on the large volume of Scotch-brand tape it had to

buy, but also for rebates on many other products

purchased from 3M.5

Br. of Appellee at 40.

As we have suggested, the principal case on which

LePage's relies for support for its argument is SmithKline.

_________________________________________________________________

5. While LePage's does not label this argument"monopoly leveraging"

and argued against the jury being instructed on the elements of a

monopoly leveraging case (claiming that this is an"old fashioned

monopoly case"), it is undeniable that the claim is similar to that

advanced in the SmithKline, which has been labeled a monopoly

leveraging case. See Advo, 51 F.3d at 1203; Fineman v. Armstrong World

Indus., Inc., 980 F.2d 171, 204 (3d Cir. 1992). In a monopoly leveraging

case, however, there are two markets--one in which the company enjoys

a monopoly and another in which it tries to leverage the former

monopoly power. ERNEST GELLHORN & WILLIAM E. KOVACIC, ANTITRUST LAW AND

ECONOMICS 152 (4th ed. 1994). In this case and in SmithKline, there was

only one market (the transparent tape market in this case and the

cephalosporin market in SmithKline). Consequently, our prior

characterization of SmithKline may be problematical. LePage's's reference

to customers' "inelastic" need for Scotch tape, see Br. of Appellee at 28,

and its contention that, as a practical matter, stores had no choice but

to carry Scotch tape, see id. at 40, does suggest that there may be either

two separate markets or one market and one submarket. We do not

address this point, however, because the parties treat this case as

having only one market for the purposes of this appeal.

Even if this were considered a monopoly leveraging case, however, then

Fineman would control, and LePage's would not have established the

15

In that case, Eli Lilly & Co. had two products, Keflin and

Keflex, on which it faced no competition, and one product,

Kefzol, on which it faced competition from SmithKline's

product, Ancef. See SmithKline, 575 F.2d at 1061. Lilly

offered a higher rebate of 3% to companies that purchased

specified quantities of any three (which, practically

speaking, meant combined purchases of Kefzol, Keflin and

Keflex) of Lilly's cephalosporin products. See id. "Although

hospitals were free to purchase SmithKline's Ancef with

their Keflin and Keflex orders with Lilly, thus avoiding the

penalties of a tie-in sale,6 the practical effect of that

_________________________________________________________________

requirements for 3M to be liable. See Fineman , 980 F.2d at 204. LePage's

does not show that 3M had an actual or threatened monopoly in the

leveraged market (private label tape). At the time of trial, LePage's

still

had 67% of the private label market, down from 88% previously. See Br.

of Appellant at 8.

Fineman involved a producer of a videotape magazine to be sold via

distributors to retailers of floor covering products, which (with its

principal) brought action against the floor covering manufacturer,

alleging, inter alia, antitrust violations such as monopoly leveraging

under the Sherman Act. See Fineman, 980 F.2d at 171. In Fineman, we

declined to follow Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d

263, 275 (2d Cir. 1979), which involved a plaintiff that alleged that

Kodak had leveraged its monopoly power in the camera and film markets

to obtain a "competitive advantage" in the photofinishing equipment and

services markets. In Berkey Photo the court held that the use of

monopoly power attained in one market to gain a competitive advantage

in another is a violation of section 2, even if there has not been an

attempt to monopolize the second market. See id. at 276. Noting that

only the Court of Appeals for the Sixth Circuit has adopted the Berkey

Photo reasoning, in Fineman we agreed that in order to prevail upon a

theory of monopoly leveraging, a plaintiff must prove threatened or

actual monopoly in the leveraged market. See Fineman, 980 F.2d at 205.

That circumstance does not apply here.

6. 3M also avoids the penalties of a tie-in sale, because its customers

were free to purchase its Scotch tape by itself. To prove an illegal tie-

in,

a plaintiff must establish that the agreement to sell one product was

conditioned on the purchase of a different or tied product; the seller

"has

sufficient economic power with respect to the tying product to

appreciably restrain free competition in the market for the tied product

and a `not insubstantial' amount of interstate commerce is affected."

Northern Pac. Ry. Co. v. United States, 356 U.S. 1, 6, 78 S.Ct. 514, 518

(1958).

16

decision would be to deny the Ancef purchaser the 3%

bonus rebate on all its cephalosporin products." Id.

(internal footnote added). Because of Lilly's volume

advantage, to offer a rebate of the same net dollar amount

as Lilly's, SmithKline would have had to offer companies

rebates ranging from 16% for average size hospitals to 35%

for larger volume hospitals for their purchase of Ancef. See

id.

We concluded that Lilly willfully acquired and maintained

monopoly power by linking products on which Lilly faced no

competition (Keflin and Keflex) with a competitive product,

resulting in the sale of all three products on a non-

competitive basis in what otherwise would have been a

competitive market between Ancef and Kefzol. See id. at

1065. Moreover, this arrangement would force SmithKline

to pay rebates on one product equal to rebates paid by Lilly

based on sales volume of three products. See id. Expert

testimony and the evidence on pricing showed that in the

circumstances SmithKline's prospects for continuing in the

Ancef market were poor.

Here, LePage's argues that it does not have to show that

3M's package discounts could prevent an equally efficient

firm from matching or beating 3M's package discounts. In

its brief, LePage's argues that its expert economist

explained that 3M's programs and cash payments have the

same anticompetitive impact regardless of the cost

structure of the rival suppliers or their efficiency relative to

that of 3M. See Br. of Appellee at 43. LePage's alleges that

the relative efficiency or cost structure of the competitor

simply affects how long it would take 3M to foreclose the

rival from obtaining the volume of business necessary to

survive. See id. at 43. "Competition is harmed just the

same by the loss of the only existing competitive

constraints on 3M in a market with high entry barriers." Id.

The district court stated that LePage's introduced

substantial evidence that the anticompetitive effects of 3M's

rebate program caused its losses. See LePage's , 2000 WL

280350, at *7-8.

We disagree with LePage's and the district court. In

SmithKline, it was important that SmithKline showed that

it could not compete by explaining how much it would have

17

had to lower prices for both small and big customers to do

so. SmithKline ascertained the rebates that Lilly was giving

to customers on all three products and calculated how

much it would have had to lower the price of its product if

the rebates were all attributed to the one competitive

product. In contrast, LePage's did not even attempt to show

that it could not compete by calculating the discount that

it would have had to provide in order to match the

discounts offered by 3M through its bundled rebates, and

thus its brief does not point to evidence along such lines.

It also did not show the amount by which it lowered its

prices in actual monetary figures or by percentage to

compete with 3M and how its profitability thus was

decreased, and once again, its brief does not point to

evidence along such lines. Rather, LePage's merely

maintains, through the use of an expert, that it would have

had to cut its prices drastically to compete and thus would

have gone out of business.

Although we are not evaluating the expert's method of

calculating damages,7 and indeed, we do not reach the

damages issue, we cannot overlook the lack of evidence to

prove that pricing was what caused the drop in LePage's's

market share. Simply pointing to an expert to support the

contention that the company would have gone out of

business, without providing even the most basic pricing

information, is insufficient. "Expert testimony is useful as a

guide to interpreting market facts, but it is not a substitute

_________________________________________________________________

7. We note that LePage's has pointed out that case law supports its

expert's use of the but-for model of calculating damages. See Zenith

Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 117 n.11, 89 S.

Ct. 1562, 1573 n.11 (1969); Rossi v. Standard Roofing, Inc., 156 F.3d

452, 484-87 (3d Cir. 1998). In Bonjorno v. Kaiser Aluminum & Chem.

Corp., 752 F.2d 802, 812 (3d Cir. 1984), we stated that in constructing

a hypothetical world free of defendants' exclusionary conduct, the

plaintiffs are given some latitude in calculating damages, as long as

their

theory is not "wholly speculative." There we ruled that the implications

of the expert's testimony were not so inconsistent with the plaintiffs'

theory of liability as to warrant a new trial. See id. at 812. We also

stated

that once a jury has found that the unlawful activity caused the

antitrust injury, the damages may be determined without strict proof of

what act caused which injury, as long as the damages are not based on

speculation or guesswork. See id. at 813.

18

for them." Brooke Group, 509 U.S. at 242, 113 S.Ct. at

2598; see also Matsushita Elec. Indus. Co. v. Zenith Radio

Corp., 475 U.S. 574, 594 n.19, 106 S.Ct. 1348, 1360 n.19

(1986); Advo, 51 F.3d at 1198-99; Virgin Atlantic Airways

Ltd. v. British Airways PLC, 69 F. Supp.2d 571, 579

(S.D.N.Y. 1999) ("[A]n expert's opinion is not a substitute

for a plaintiff 's obligation to provide evidence of facts that

support the applicability of the expert's opinion to the

case."), aff 'd, 257 F.3d 256 (2d Cir. 2001). Without such

pricing information, it is difficult even to begin to estimate

how much of the market share LePage's lost was due to

3M's bundled rebates. Furthermore, some experts have

questioned the validity of attributing all the rebates to the

one competitive product in situations such as these. 8 We do

not need, however, to decide the validity of that method of

_________________________________________________________________

8. One court has mentioned a hypothetical situation where a low-cost

shampoo maker could not match a competitor's package discount for

shampoo and conditioner even though both products were priced above

their respective costs. See Ortho Diagnostic Sys., Inc. v. Abbott Labs.,

Inc., 920 F. Supp. 455, 467 (S.D.N.Y. 1996). In that case, the court

suggested that the bundled price could be unlawful under section 2 even

though neither item in the package was priced below cost. If the entire

package discount were attributed to the one product where the two

parties compete, the low-cost shampoo maker could not lower its prices

on the product enough to match the total discount without selling below

its cost. See id. at 467-69. The Areeda treatise, however, suggests that

this analysis is incorrect. See III PHILLIP E. AREEDA & HERBERT HOVENKAMP,

ANTITRUST LAW: AN ANALYSIS OF ANTITRUST PRINCIPLES AND THEIR APPLICATI

ON

P 749, at 467 n.6 (rev. ed. 1996).

One aspect of this method of calculation worth noting is that the

volume of the products ordered has a drastic effect on how much the

competitor would have to lower its prices to compete. For example,

suppose in a similar rebate program, a company was the only producer

of products A and B but faced competition in C. If a customer orders 100

units each of A, B, and C at a price of $1.00 each, a 3% rebate would

be $9.00 (3% of the total of $300.00). If the rebate on all three products

were attributed to product C, then the competitor would have to lower its

price to $0.91 in order to compete with it. The results would be starkly

different, however, if a customer orders 100 units of A and B but only

needs 10 units of C. Then the 3% rebate on the total purchase amount

of $210.00 would be $6.30. If the rebate was attributed solely to product

C, then a competitor would have to lower its price to $.37 on product C

in order to match the company's price.

19

calculation, as LePage's does not even attempt to meet that

less strict test by calculating how much it would have had

to lower its prices to match the rebates, even if they all

were aggregated and attributed to private label tape.9

LePage's also has not satisfied the stricter tests devised

by other courts considering bundled rebates in situations

such as that here. In a case brought by a manufacturer of

products used in screening blood supply for viruses, Ortho

Diagnostic Systems, Inc. v. Abbot Laboratories, Inc. , 920 F.

Supp. 455 (S.D.N.Y. 1996), the district court held, inter

alia, that the defendant's discount pricing of products in

packages did not violate the Sherman Act. The defendant,

Abbott Laboratories, manufactured all five of the commonly

used tests to screen the blood supply for viruses. Ortho

claimed that Abbott violated sections 1 and 2 of the

Sherman Act by contracting with the Council of Community

Blood Centers to give those members advantageous pricing

if they purchased a package of four or five tests from

Abbott, thereby using its monopoly position in some of the

tests to foreclose or impair competition by Ortho in the sale

of those tests available from both companies. See id. at

458. The district court stated that to prevail on a

monopolization claim in "a case in which a monopolist (1)

faces competition on only part of a complementary group of

products, (2) offers the products both as a package and

individually, and (3) effectively forces its competitors to

absorb the differential between the bundled and unbundled

prices of the product in which the monopolist has market

power," the plaintiff must allege and prove "either that (a)

the monopolist has priced below its average variable cost or

(b) the plaintiff is at least as efficient a producer of the

competitive product as the defendant, but that the

defendant's pricing makes it unprofitable for the plaintiff to

continue to produce." Id. at 469.

Holding that the discount package pricing did not violate

_________________________________________________________________

9. The closest LePage's comes to supplying such information in its brief

is its statement that "LePage's made repeated efforts to save its tape

business with Staples, reducing its prices to 1990 levels, and then

reducing them again, to keep its plant open and people working." Br. of

Appellee at 11. This is not close enough.

20

the Sherman Act, the Ortho court explained that any other

rule would involve too substantial a risk that the antitrust

laws would be used to protect an inefficient competitor

against price competition that would benefit consumers.

See id. at 470 ("The antitrust laws were not intended, and

may not be used, to require businesses to price their

products at unreasonably high prices (which penalize the

consumer) so that less efficient competitors can stay in

business.") (internal quotation marks omitted).

In this case, LePage's now does not contend that 3M

priced its products below average variable cost, an

allegation which, if made, in any event would be difficult to

prove. See Advo, 51 F.3d at 1198-99.10 Moreover, LePage's's

economist conceded that LePage's is not as efficient a tape

producer as 3M. Furthermore, LePage's has not shown

through an explanation of the prices it would have had to

charge to match 3M's bundled rebates, that it would have

been unprofitable for it to continue to produce.

By its failure to show how much it would have to lower

its prices before it would be driven out of business,

LePage's effectively is arguing that it is the linkage of a

monopoly product with a competitive one that is the

significant factor to be considered rather than the pricing.

Indeed, apparently this is also why LePage's insists that,

while certain of 3M's actions were predatory, this is not a

predatory pricing case. But if the mere act of offering a

_________________________________________________________________

10. 3M argues that Brooke Group provides that lowering the effective

price of a product through price incentives cannot give rise to a section

2 Sherman Act claim unless the price is lower than an appropriate

measure of cost. In fact, the Court's language in Brooke Group does raise

a serious question as to whether or not it limits the holding of

SmithKline

to situations where prices are below average variable cost. However,

Brooke Group was a predatory pricing or primary-line price

discrimination case in which none of the tobacco companies had a

monopoly of the market. See Brooke Group, 509 U.S. at 221-22, 113

S.Ct. at 2587. But inasmuch as LePage's does not even present a case

that fulfills the requirements to establish liability of SmithKline, we

need

not decide the effect of Brooke Group on SmithKline. In the

circumstances, we emphasize that we are not holding that if LePage's

had supplied pricing information similar to that SmithKline presented

our result would be different.

21

bundled rebate can be condemned under section 2 of the

Sherman Act without regard for the relative efficiency or

cost structure of the competitor, then competitors unwilling

to accept lower profits could use the law to insulate

themselves from competition. For example, a competitor

who would have to lower its prices by 1% in order to match

a bundled rebate could file suit against the alleged

monopolist and obtain relief merely because it does not

want to accept lower profits. It is difficult to see how

consumers are better off if bundled rebates are illegal

regardless of how competition is affected. After all, the

Sherman Act "directs itself not against conduct which is

competitive, even severely so, but against conduct which

unfairly tends to destroy competition itself." Spectrum

Sports, Inc. v. McQuillan, 506 U.S. 447, 458, 113 S.Ct. 884,

892 (1993); see also United States v. Microsoft Corp., 253

F.3d 34, 58 (D.C. Cir.), cert. denied, 122 S.Ct. 350 (2001).

Furthermore, this is not a situation in which there is no

business justification for 3M's actions. Inasmuch as it is

difficult to distinguish legitimate competition from

exclusionary conduct that harms competition, see Microsoft

Corp., 253 F.2d at 58, some cases suggest that when a

company acts against its economic interests and there is no

valid business justification for its actions, then it is a good

sign that its acts were intended to eliminate competition.

For example, Aspen Skiing Co. v. Aspen Highlands Skiing

Corp., 472 U.S. 585, 608, 105 S.Ct. 2847, 2860 (1985), sets

forth the lack of a valid business reason as a basis for

finding liability. In that case, the Court affirmed a jury

verdict for the plaintiff under section 2 of the Sherman Act

where the defendant monopolist had stopped cooperating

with the plaintiff to offer a multi-venue skiing package for

Aspen skiers. The Court held that because the defendant

had acted contrary to its economic interests, by losing

business and customers, there was no other rationale for

its conduct except that it wished to eliminate the plaintiff

as a competitor. See id. at 608, 105 S.Ct. at 2860; see also

Eastman Kodak, 504 U.S. at 483, 112 S.Ct. at 2090

(exclusionary conduct properly is condemned if valid

business reasons do not justify conduct that tends to

impair the opportunities of a monopolist's rivals or if a valid

22

asserted purpose would be served fully by less restrictive

means).11

Similarly, in Concord Boat Corp. v. Brunswick Corp., 207

F.3d 1039, 1043, 1063 (8th Cir.), cert. denied, 531 U.S.

979, 121 S.Ct. 428 (2000), where boat builders brought an

antitrust action against a stern drive engine manufacturer,

the court held, inter alia, that the evidence was insufficient

to find that the engine manufacturer's discount programs

restrained trade and monopolized the market. Brunswick

offered a higher percentage discount when boat builders

bought a higher percentage of their engines from it, but

there was no allegation that its pricing was below cost. See

id. at 1044, 1062. In Concord Boat the district court cited

the district court opinion in this case when 3M filed its

motion to dismiss. See LePage's Inc. v. 3M, No. Civ. A. 97-

3983, 1997 WL 734005 (E.D. Pa. Nov. 14, 1997). The

Concord Boat district court agreed with the plaintiff that it

was not the price (above cost or not) that was relevant but

the "strings" attached to the price and that the district

court here was correct to distinguish Brooke Group since

there were no "strings" attached (bundled rebates) in that

case. In Concord Boat, the strings attached were the

_________________________________________________________________

11. Microsoft also offers some guiding principles on monopolization under

section 2. To be condemned as exclusionary, a monopolist's act must

have an "anticompetitive effect," which means that it must harm the

competitive process and thereby harm consumers. Harm to a competitor

will not suffice. Microsoft, 253 F.3d at 58. Competitive conduct is

acceptable, but conduct that destroys competition is not. See id. As the

burden of proof is on the plaintiff, it must demonstrate that the

monopolist's conduct has the requisite anticompetitive effect. See id. at

57-58. If a plaintiff establishes a prima facie case under section 2, then

the monopolist may offer a "procompetitive justification" for its conduct

(a nonpretextual claim that its conduct is indeed a form of competition

on the merits because it involves greater efficiency or enhanced

consumer appeal), after which the burden would shift back to the

plaintiff to rebut that claim. See id. at 59. And finally, if the

monopolist's

procompetitive justification is unrebutted, then the plaintiff must

demonstrate that the anticompetitive harm outweighs the procompetitive

benefits. See id. Microsoft also indicates that in considering the

monopolist's conduct, the focus is on the effect of the conduct rather

than on the intent behind it, as intent is only relevant in that it helps

a

court understand the likely effect of the conduct. Id.

23

exclusivity provisions. See Concord Boat Corp. v. Brunswick

Corp., 21 F. Supp. 2d 923, 930 (E.D. Ark. 1998).

The Court of Appeals for the Eighth Circuit, however,

disagreed with the district court in Concord Boat. The court

of appeal's opinion reflected an application of Brooke

Group's strong stance favoring vigorous price competition

and expressing skepticism of the ability of a court to

separate anticompetitive from procompetitive actions when

it comes to above-cost strategic pricing. See Concord Boat,

207 F.3d at 1061. More importantly, the court perceived

that Brooke Group should be considered even with claims

based on pricing with strings. See id. "If a firm has

discounted prices to a level that remains above the firm's

average variable cost, the plaintiff must overcome a strong

presumption of legality by showing other factors indicating

that the price charged is anticompetitive." Id., citing Morgan

v. Ponder, 892 F.2d 1355, 1360 (8th Cir. 1989) (internal

quotation marks omitted). The court stated that a section 2

defendant's proffered business justification is the most

important factor in determining whether its challenged

conduct is not competition on the merits. See id. at 1062.

The court, however, distinguished cases such as SmithKline

and Ortho where products were bundled since they involved

two markets. See id.

Unlike the situation of the defendant in Aspen , 3M's

pricing structure and bundled rebates were not necessarily

contrary to its economic interests, as they likely increased

its sales. Furthermore, other than the obvious reasons such

as increasing bulk sales, market share and customer

loyalty, there are several other potential "procompetitive" or

valid business reasons for 3M's pricing structure and

bundled rebates: efficiency in having single invoices, single

shipments and uniform pricing programs for various

products. See Br. of Appellant at 7. Moreover, the record

demonstrates that, with the biggest customers, 3M's

rebates were not eliminating the competitive process, as

LePage's still was able to retain some customers through

negotiation, and even though it lost other customers, the

losses were attributable to their switching to foreign

suppliers or changing suppliers because of quality or

service without regard to the rebates.

24

In sum, we have concluded as a matter of law after an

intensive analysis that 3M did not violate section 2 of the

Sherman Act by reason of its bundled rebates. If we held

otherwise, notwithstanding the effects of the challenged

practices on 3M's competitors, we would risk curtailing

price competition and a method of pricing beneficial to

customers because the bundled rebates effectively lowered

their costs.

2. Other Methods

LePage's also claims that, through a variety of other

allegedly anticompetitive actions, 3M prevented LePage's

from competing. LePage's asserts that 3M foreclosed

competition by directly purchasing sole-supplier status. See

Br. of Appellee at 45. There was some dispute as to whether

the contracts were conditioned on 3M being the sole

supplier, and 3M claims that there are only two customers

for which there is any evidence of a sole supplier

agreement. It appears that most of 3M's contracts with

customers were not conditioned on exclusivity, but

practically speaking, some customers dropped LePage's as

a supplier to maximize the rebates that 3M was offering.

Moreover, United Shoe Machinery Corp. v. United States,

258 U.S. 451, 465, 42 S.Ct. 363, 368 (1922), explained that

a contract that does not contain specific agreements not to

use the products of a competitor still will come within the

Clayton Act as to exclusivity if its practical effect is to

prevent such use.

Even assuming, however, that 3M did have exclusive

contracts with some of the customers, LePage's has not

demonstrated that 3M acted illegally, as one-year exclusive

contracts have been held to be reasonable and not unduly

restrictive. See Federal Trade Comm'n v. Motion Picture

Adver. Serv. Co., 344 U.S. 392, 395-96, 73 S.Ct. 361, 363-

64 (1953) (holding that evidence sustained the

Commission's finding that the distributor's exclusive

screening agreements with theater operators unreasonably

restrained competition, but stating that the Commission

had found that the term of one-year exclusive contracts had

become a standard practice and would not be an undue

restraint on competition). See also Advo, 51 F.3d at 1204.

In Tampa Electric Co. v. Nashville Coal Co., 365 U.S. 320,

25

327, 81 S.Ct. 623, 627-28 (1961), the Court stated that

even if in practical application a contract is found to be an

exclusive-dealing arrangement, it does not violate section 3

of the Clayton Act unless the court believes it probable that

performance of the contract will foreclose competition in a

substantial share of the line of commerce affected. Using

that standard, although LePage's's market share in private

label tape has fallen from 88% to 67%, it has not been

established that, as a result of the allegedly exclusive

contracts, competition was foreclosed in a substantial share

of the line of commerce affected. Indeed, in view of

LePage's's two-thirds share of the private label business, its

attack on exclusivity agreements seems rather attenuated.

There appear to be very few cases supporting liability

based on section 2 of the Sherman Act for exclusive

dealing, as some cases suggest that if, as is the case here

under the jury's findings, there is no liability under section

3 of the Clayton Act, it is more difficult to find liability

under the Sherman Act since its scope is more restricted.12

In any event, the record shows only two allegedly exclusive

contracts (with the Venture and Pamida stores), and

"[b]ecause an exclusive deal affecting a small fraction of a

market clearly cannot have the requisite harmful effect

upon competition, the requirement of a significant degree of

foreclosure serves a useful screening function." Microsoft,

253 F.3d at 69. The Microsoft court explained that although

exclusive contracts are commonplace, particularly in the

field of distribution, in certain circumstances the use of

exclusive contracts may give rise to a section 2 violation

even though the contracts foreclose less than the roughly

40 to 50% share usually required to establish a section 1

violation. See id. at 69-70. In this case, it cannot be

concluded that the two contracts with Venture and Pamida

were responsible for the total drop in LePage's's market

share. Furthermore, even if all 3M's contracts were

considered exclusive, LePage's's total drop in market share

was only 21%, and some of this loss was shown in the

_________________________________________________________________

12. It is more common for charges of exclusive dealing to be brought

under section 1 of the Sherman Act or the Clayton Act, which the jury

found that 3M did not violate. See, e.g ., Barr Labs., Inc. v. Abbott

Labs.,

978 F.2d 98, 110 (3d Cir. 1992).

26

record to be due to quality or service consistency concerns

rather than to 3M's tactics. Therefore, there was not

enough foreclosure of the market to have an

anticompetitive effect.

LePage's also claims that by calculating the rebates only

once a year, 3M made it more difficult for a purchaser to

pass on the savings to its customers, thereby making it

harder for companies to switch suppliers and keeping retail

prices and margins high. See Br. of Appellee at 39-40. As

discussed above, one-year contracts may be considered

standard, and even if they make it more unlikely that

rebates are passed on in the form of lower retail prices, the

discounts could be applied towards lowering retail prices

the following year or towards other costs by companies that

are factored into the retail prices (such as advertising). In

the circumstances, we conclude that this conduct does not

qualify as predatory or anticompetitive so as to establish

liability under section 2 of the Sherman Act.

LePage's also alleges that 3M entered the retail private

label tape portion of the market to destroy the market and

thereby increase its sales of branded tape, but the case law

does not support liability under section 2 for this type of

action. In Brooke Group, 509 U.S. at 215, 113 S.Ct. at

2584, Liggett/Brooke Group alleged that Brown &

Williamson Tobacco Corporation ("B&W") sold generic

cigarettes in order to decrease losses of sales in its branded

cigarettes. B&W sold generic cigarettes at the same list

price as Liggett but also offered large volume rebates to

certain wholesalers so they would buy their generic

cigarettes from B&W. See id. at 216, 113 S.Ct. at 2584.

B&W wanted to take a larger part of the generic market

from Liggett and drive Liggett to raise prices on generic

cigarettes, which B&W would match, thereby encouraging

consumers to switch back to branded cigarettes. See id. at

216-17, 113 S.Ct. at 2584. The Court held that because

B&W had no reasonable prospect of recouping its predatory

losses and could not inflict the injury to competition that

antitrust laws prohibit, it did not violate the Robinson-

Patman Act or the Sherman Act. See id. at 243, 113 S.Ct.

at 2598. In this case, however, 3M did not use below

average variable cost pricing (LePage's does not charge

27

predatory pricing) and therefore 3M did not have predatory

costs to recoup.

We recognize that LePage's attempts to distinguish

Brooke Group on the ground that "3M used other

techniques [i.e., techniques other than predatory pricing] to

extinguish the private-label category subjecting itself to

different legal standards," Br. of Appellee at 55, but we

nevertheless reject LePage's's argument on this point. While

LePage's does not contend that 3M engaged in predatory

pricing, it does contend that the goal of 3M's other conduct

was "to extinguish the private-label category, subjecting

itself to different legal standards" than those applicable in

Brooke Group. See id. Moreover, though 3M denies that it

was attempting to eliminate the private label category of

transparent tape, the record supports a finding that it had

that intent.13 We are satisfied, however, that its efforts to

eliminate the private label aspect of the transparent tape

market are not unlawful as, "examined without reference to

its effects on competitors," it is evident that in view of 3M's

dominance in brand tape, that it was rational for it to want

the sale of tape to be concentrated in that category of the

market. See Stearns Airport Equip. Co. v. FMC Corp., 170

F.3d 518, 523 (5th Cir. 1999).14

Accordingly, we find that 3M's actions in the record,

including the bundled rebates and other elements of the

"monopoly broth," were not anticompetitive and predatory

as to violate section 2 of the Sherman Act.

_________________________________________________________________

13. It is not possible from the verdict to know how the jury found on this

point, and thus we assume for purposes of this opinion that 3M was

trying to eliminate the private label category of the transparent tape

market. Therefore, if we concluded, which we do not, that a verdict could

be upheld on the basis of that finding, we would order a new trial as the

verdict nevertheless might, in fact, have been predicated on other

theories that could not be justified.

14. We do not understand why 3M's brief misquotes Stearns at 170 F.3d

at 523 by substituting the words "A finding of predatory conduct" in a

direct quotation for "a finding of exclusionary conduct." Br. of Appellant

at 35 n.23.

28

D. ATTEMPTED MAINTENANCE OF MONOPOLY

We will affirm on LePage's's cross-appeal of the district

court's grant of 3M's motion for judgment as a matter of

law on the "attempted maintenance of monopoly power"

claim, although we believe that the district court erred in

its reasoning in reaching its result. Section 2 of the

Sherman Act does not create a cause of action for an

"attempt to maintain a monopoly." Section 2 of the

Sherman Act provides: "Every person who shall monopolize,

or attempt to monopolize, or combine or conspire with any

other person or persons, to monopolize any part of the

trade or commerce among the several States, or with

foreign nations, shall be deemed guilty of a felony." 15

U.S.C. S 2. Therefore, there can be claims for an attempt to

monopolize and claims for monopolization, which include:

"(1) the possession of monopoly power in the relevant

market and (2) the willful acquisition or maintenance of

that power as distinguished from growth or development as

a consequence of a superior product, business acumen, or

historic accident." Grinnell Corp., 384 U.S. at 570-71, 86

S.Ct. at 1704; see also Houser v. Fox Theatres Mgmt. Corp.,

845 F.2d 1225, 1229 (3d Cir. 1988). But even if we treat its

claim as an attempted monopolization claim, LePage's has

not presented proofs establishing the elements of such a

claim.

It is not clear what LePage's intended when it filed an

"attempted maintenance of monopoly power" claim. If

LePage's wanted to establish liability for 3M's conduct in

maintaining a monopoly, then its claim would be covered

by the "willful maintenance" part of the "monopolization"

offense and would have been encompassed adequately by

the monopolization count on appeal. Because 3M long has

had monopoly power,15 any violation it committed would be

actual monopolization as opposed to attempted

_________________________________________________________________

15. LePage's repeatedly states throughout its brief that 3M concedes that

it enjoys monopoly power with a 90% share of the overall relevant

market (the United States transparent tape market). See Br. of Appellee

at 3. Monopoly power can be defined as the power to control prices and

exclude competition regarding a particular product and within a

particular geographic market. See Borough of Lansdale v. Philadelphia

Elec. Co., 692 F.2d 307, 311 (3d Cir. 1982).

29

monopolization inasmuch as attempted monopolization is

defined as an unsuccessful attempt to achieve

monopolization, see American Tobacco Co. v. United States,

328 U.S. 781, 785, 66 S.Ct. 1125, 1127 (1946), and

requires "(1) that the defendant has engaged in predatory or

anti-competitive conduct with (2) a specific intent to

monopolize and (3) a dangerous probability of achieving

monopoly power." Spectrum Sports, 506 U.S. at 456, 113

S.Ct. at 890-91; see also Ideal Dairy Farms, Inc. v. John

Labatt, Ltd., 90 F.3d 737, 750 (3d Cir. 1996).

The district court construed LePage's's "attempted

maintenance of monopoly power" claim as reflecting a third

cause of action (besides monopolization and attempted

monopolization) but found it inherently illogical. See

LePage's, 2000 WL 280350, at *2-3. The court explained

that "[a]ny `attempt claim' rests on the underlying theory

that the defendant has failed to achieve its goal, which in

this case is maintenance of monopoly power. But, if the

defendant has failed to achieve its goal of maintaining

monopoly power, then it follows that the defendant lacks

monopoly power. Lacking any monopoly power to maintain,

the defendant cannot be held liable for `attempted

maintenance of monopoly power.' " Id. at *2. We believe,

however, that the district court erred in its reasoning that

if a party failed in its goal to maintain monopoly power,

then it lacked monopoly power and therefore could not have

any monopoly power to maintain. After all, a company

could have a legal monopoly and attempt to maintain that

monopoly through anticompetitive acts but fail and no

longer have a monopoly. It then would have attempted to

maintain its monopoly but would not have succeeded in its

attempt. This does not mean, however, that it lacked

monopoly power and therefore could not have any

monopoly power to maintain.

The district court concluded that this "attempted

maintenance" concept was actually a standard attempted

monopolization claim -- that the defendant does not have

monopoly power but eventually would achieve monopoly

power if it continued to engage in predatory conduct. Id. at

*2-3. LePage's also argues on this appeal that the attempt

to maintain a monopoly should fall under the "attempted

30

monopolization" offense and points to cases to support its

point of view. Therefore, LePage's opposes the view that

because 3M long has had a monopoly, its actions would

fall under monopolization rather than attempted

monopolization. It argues that a company can succeed in

possessing a monopoly and still be held liable for

"attempted monopolization."16 In Lorain Journal Co. v.

_________________________________________________________________

16. However, it seems to make more sense that in an attempt case the

party did not succeed in achieving the monopoly. Indeed, early

statements on attempts to monopolize characterize it as "conduct that

closely approaches but does not quite attain completed monopolization,

plus a wrongful intent to monopolize." GELLHORN at 153. Gellhorn and

Kovacic state, "[B]y definition, an attempt case involves prosecution of

the unsuccessful monopolist, which increases judicial caution." GELLHORN

at 154. They add that, as LePage's claims, a defendant can be convicted

of both monopolization and an attempt to monopolize, but the more

common view is that the attempt merges into the offense of

monopolization. See id. at n.15. Similarly, the Areeda treatise adds that

despite the rhetoric of some cases, exclusionary conduct by a monopolist

within its own market, whether successful or not, is best treated as an

aspect of the full monopolization offense. IIIA A REEDA P 806a. The Areeda

treatise also states that to say that one who has monopolized also has

attempted to monopolize is "redundant and adds nothing to the scope of

available remedies." Id. at P806f4. Therefore, the attempt to monopolize

should be merged into the completed offense. See id. In Multiflex, Inc. v.

Samuel Moore & Co., 709 F.2d 980, 990 (5th Cir. 1983), the court stated

that "it is only the failure of the scheme that keeps the [attempted

monopolization] charge from becoming actual monopolization."

Indeed, in the case that LePage's cites to support the claim that a

party can be held liable for both attempted monopolization and

monopolization, American Tobacco Co., 328 U.S. at 783, 66 S.Ct. at

1126, the Court states that the attempted monopolization count was

merged into the monopolization claim. See id. In that case, the jury

instructions defined "attempt to monopolize" as

the employment of methods, means and practices which would, if

successful, accomplish monopolization, and which, though falling

short, nevertheless approach so close as to create a dangerous

probability of it, which methods, means and practices are so

employed by the members of and pursuant to a combination or

conspiracy formed for the purpose of such accomplishment.

Id. at 785, 66 S.Ct. at 1127.

31

United States, 342 U.S. 143, 152-53, 72 S.Ct. 181, 186

(1951), the Court stated, "It is consistent with that result to

hold here that a single newspaper, already enjoying a

substantial monopoly in its area, violates the `attempt to

monopolize' clause of S 2 when it uses its monopoly to

destroy threatened competition." Id. at 154, 72 S.Ct. at

187. The Court, however, made reference to the publisher's

attempt to regain its monopoly by forcing advertisers to

boycott a competing radio station and also mentioned the

publisher's attempt to regain its pre-1948 substantial

monopoly over the mass dissemination of all news and

advertising.

Regardless of whether the attempted monopolization

claim should merge into the monopolization claim in cases

where the defendant has a monopoly, and even if the claim

of "attempted maintenance of monopoly" was actually an

"attempted monopolization" claim, as LePage's now claims,

see Br. of Appellee at 87-90, it still would have to meet the

requirements of the latter claim to establish liability.

Spectrum Sports clarifies the requirements of an attempted

monopolization claim--that the defendant engaged in

predatory or anticompetitive conduct with a specific intent

to monopolize and a dangerous probability of achieving

monopoly power. See Spectrum Sports, 506 U.S. at 454-58,

113 S.Ct. at 890-91. LePage's could not create a separate

cause of action under the attempted monopolization offense

of section 2 and, by calling it "attempted maintenance of

monopoly," avoid the standards of an attempted

monopolization claim in an effort to establish liability.

_________________________________________________________________

Under those instructions, it seems logical that a company that actually

achieved a monopoly could not be found liable for an attempt to

monopolize, unless the reasons for the possession of its monopoly were

not related to the unlawful conduct that was meant to achieve that

monopoly. For example, suppose a company tried through

anticompetitive means to achieve a monopoly and came dangerously

close to doing so but failed. It nevertheless then obtained a patent and

achieved a legal monopoly, following which its competitor filed suit

against it for attempted monopolization. In such a circumstance, it

would not be illogical to allow an attempt to monopolize claim even

though the defendant had achieved an actual monopoly.

32

LePage's has not demonstrated that the facts support a

conclusion that 3M engaged in conduct that established

each element of an attempted monopolization claim.

Although it argues throughout its brief that 3M's actions

were predatory and anticompetitive, the attempted

monopolization claim has a requirement of specific intent

rather than general intent that LePage's did not argue

specifically. See Advo, 51 F.3d at 1199. In any event, quite

aside from the scope of the LePage's's arguments, in our

analysis of the monopolization claim we have come to the

conclusion that 3M's rebate program and the other

elements of the alleged "monopoly broth" were not

predatory and anticompetitive. In the circumstances,

inasmuch as LePage's relies on this conduct to establish its

attempted maintenance of monopoly claim, its claim must

fail. Accordingly, we will affirm the district court's partial

grant of the motion for judgment as a matter of law in favor

of 3M, although not for the reasons the district court stated

in its opinion.

III. CONCLUSION

For the foregoing reasons, we will affirm the district

court's order granting 3M's motion for judgment as a

matter of law on the attempted maintenance of monopoly

claim and will reverse the district court's order denying its

motion for judgment as a matter of law in all other

respects. We will remand to the district court to enter

judgment for 3M in accordance with this opinion. In view of

our result, we do not reach the points 3M has raised in its

motion for a new trial.

33

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34

Volume 2 of 2

35

SLOVITER, Circuit Judge, dissenting:

In overturning the jury's verdict for LePage's on its claim

that 3M violated S 2 of the Sherman Act and reversing the

District Court's denial of 3M's motion for judgment as a

matter of law, the majority applies reasoning that would

weaken S 2 of the Sherman Act to the point of impotence.

While that may be a consummation greatly to be desired by

the behemoths of industry, such as Microsoft or 3M, it

would be an incalculable loss to business generally and to

the consumer. Section 2, the provision of the antitrust laws

designed to curb the excesses of monopolists and near-

monopolists, is the equivalent in our economic sphere of

the guarantees of free and unhampered elections in the

political sphere. Just as democracy can thrive only in a free

political system unhindered by outside forces, so also can

market capitalism survive only if those with market power

are kept in check. That is the goal of the antitrust laws. The

alternative, government control of markets and regulation

of prices, is unacceptable to most of us.

The majority has accomplished its enervation ofS 2 by

relying on theories and cases inapplicable here and by

failing to consider the synergistic effect of 3M's conduct

taken as a whole. In the process, it ignores the jury verdict,

the District Court's careful analysis, and this court's

directly applicable precedent. It is a development that calls

for full en banc review.

I.

INTRODUCTION

It has been well established, as the Supreme Court

enunciated thirty-five years ago, that a defendant company

who possesses monopoly power in the relevant market will

be found in violation of S 2 of the Sherman Act if the

defendant wilfully acquired or maintained that power.

United States v. Grinnell Corp., 384 U.S. 563, 570-71

(1966).

In many S 2 cases, the parties spend much time and

effort in seeking to define the market and to determine

36

whether the defendant has monopoly power. Fortunately, in

this case we need devote no effort to these issues. It is

agreed that the relevant product market is transparent

tape, and the relevant geographic market is the United

States.1 Moreover, as to the issue of monopoly power, 3M

concedes it possesses monopoly power in the United States

transparent tape market, with a ninety percent market

share. In fact, the evidence showed that the household

penetration of 3M's Scotch-brand tape is virtually one

hundred percent.

The sole remaining issue and our focus on this appeal is

whether 3M took steps to maintain that power in a manner

that violated S 2 of the Sherman Act. A monopolist wilfully

acquires or maintains monopoly power when it competes on

some basis other than the merits. Eastman Kodak Co. v.

Image Tech. Servs., Inc., 504 U.S. 451, 482-83 (1992);

Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S.

585, 605 n.32 (1985). The District Court, in instructing the

jury on Count I, LePage's claim of unlawful maintenance of

monopoly power under S 2, explained:

Count I in this case is unlawful maintenance of

monopoly power.

LePage's alleges that it was injured by 3M's unlawful

monopolization in the United States market for

invisible and transparent tape for home and office use.

To win on their claim of monopolization, LePage's

must prove each of the following elements by a

preponderance of the evidence.

First, that 3M had monopoly power in the relevant

market.

Secondly, that 3M willfully maintained that power

through predatory or exclusionary conduct. . . .

_________________________________________________________________

1. Although 3M originally challenged LePage's selection of the United

States as the relevant geographic market, App. at 7, the District Court

held that LePage's had introduced sufficient evidence from which the

jury could properly find that the relevant geographic market is the

United States and 3M does not challenge that market definition on

appeal.

37

And thirdly, that LePage's was injured in its business

or property because of 3M's restrictive or exclusionary

conduct.

App. at 5663-64.

The jury was given the following questions on Count I.

(1) Do you find that LePage's has proven, by a

preponderance of the evidence, that the relevant

market is invisible and transparent tape for home and

office use in the United States?

(2) Do you find that LePage's has proven, by a

preponderance of the evidence, that 3M unlawfully

maintained monopoly power as defined under the

instructions for Count I?; [and]

[(3)] Do you find that LePage's has proven, as a matter

of fact and with a fair degree of certainty, that 3M's

unlawful maintenance of monopoly power injured

LePage's business or property as defined in these

instructions?

App. at 6523. The jury answered "yes" to each of the three

questions. It awarded LePage's more than $22 million

before trebling.

Our review of a jury's verdict is limited to determining

whether some evidence in the record supports the jury's

verdict. Swineford v. Snyder County, 15 F.3d 1258, 1265

(3d Cir. 1994) ("A jury verdict will not be overturned unless

the record is critically deficient of that quantum of evidence

from which a jury could have rationally reached its

verdict."). This is essentially the same inquiry that the

District Court made. In considering whether to overturn the

jury's verdict, this court must view the evidence in the light

most favorable to the verdict winner, here LePage's.

Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1166 (3d

Cir. 1993). We must accord LePage's "the advantage of

every fair and reasonable inference." Id.

LePage's alleges that 3M wilfully maintained its monopoly

in the transparent tape market primarily by bundling its

rebates and by exclusionary conduct, such as by contracts

that expressly or effectively required dealing virtually

38

exclusively with 3M. 3M does not argue that it did not

engage in this conduct. It agrees that it offered bundled

rebates and entered into some exclusive dealing contracts.

Instead, 3M argues that its conduct was legal as a matter

of law because it never priced its transparent tape above its

cost. For this argument, it relies on the Supreme Court's

decision in Brooke Group Ltd. v. Brown & Williamson

Tobacco Corp., 509 U.S. 209 (1993). The majority in

essence agrees. But Brooke Group did not deal with a

monopolist and the antitrust claim in that case was

predatory pricing, which is not one that LePage's raised

here.

The majority discusses bundled rebates and exclusive

dealing separately. I view that as a serious error. That is

because in determining whether a monopolist competes on

some basis other than the merits, which as noted is the

definition of monopolistic behavior, almost all courts,

including this one, have looked to the monopolist's conduct

taken as a whole rather than considering each aspect in

isolation. See, e.g., Cont'l Ore Co. v. Union Carbide &

Carbon Corp., 370 U.S. 690, 699 (1962) (stating"in a case

like the one before us [alleging S 1 andS 2 violations], the

duty of the jury was to look at the whole picture and not

merely at the individual figures in it") (citation and

quotation omitted); SmithKline Corp. v. Eli Lilly & Co., 575

F.2d 1056, 1061 n.3 (3d Cir. 1978) (determining that

although defendant's anticompetitive scheme "lack[ed] the

element of coercion necessary for liability under the theory

of tie-ins [under S 1]," the evidence of tying was "sufficient

to establish the offense of monopolization underS 2 of the

Sherman Act"); City of Anaheim v. So. Cal. Edison Co., 955

F.2d 1373, 1376 (9th Cir. 1992) ("[I]t would not be proper

to focus on specific individual acts of an accused

monopolist while refusing to consider their overall

combined effect. . . . We are dealing with what has been

called the `synergistic effect' of the mixture of the

elements."); Aspen Highlands Skiing Corp. v. Aspen Skiing

Co., 738 F.2d 1509, 1522 n.18 (10th Cir. 1984) ("Each of

the six [aspects of defendant's exclusionary conduct2]

_________________________________________________________________

2. The six aspects referred to by the court were"(1) forcing plaintiff out

of the four-area ticket by requiring that revenues be divided below

39

viewed in isolation need not be supported by sufficient

evidence to amount to a S 2 violation. It is enough that

taken together they are sufficient to prove the

monopolization claim."), aff 'd on other grounds, 472 U.S.

585 (1985); City of Groton v. Conn. Light & Power Co., 662

F.2d 921, 928 (2d Cir. 1981) (" `It is the mix of the various

ingredients of utility behavior in a monopoly broth that

produces its unsavory flavor.' ") (quoting City of Mishawaka

v. Am. Elec. Power Co., Inc., 616 F.2d 976, 986 (7th Cir.

1980)); Northeastern Tel. Co. v. AT&T, 651 F.2d 76, 95 n.28

(2d Cir. 1981) (following Continental Ore to consider

defendants' various activities as a whole, although

concluding proof of violation "utterly lacking"); cf. United

States v. Microsoft, 253 F.3d 34, 78 (D.C. Cir. 2001)

(avoiding issue because district court "did not point to any

series of acts, each of which harms competition only

slightly but the cumulative effect of which is significant

enough to form an independent basis for liability"); 2 Philip

E. Areeda, Roger D. Blair & Herbert Hovenkamp, Antitrust

Law P 310, at 147 (2d ed. 2000) ("In a monopolization case,

conduct must always be analyzed `as a whole.' A

monopolist bent on preserving its dominant position is

likely to engage in repeated and varied exclusionary

practices. Each one viewed in isolation might be viewed as

de minimis . . . , but the pattern gives increased plausibility

to the claim.").

In concluding that there was an insufficient basis to

support the jury's verdict, the majority fails to consider

whether the synergistic effect of the conduct considered as

a whole is anticompetitive. As will be seen, even considered

individually the evidence underlying each of LePage's claims

supports the jury's verdict. When 3M's conduct is

considered as a whole, the conclusion is inescapable that

the synergistic effect of 3M's conduct was anticompetitive.

_________________________________________________________________

plaintiff 's market share; (2) substituting defendant's three area ticket

for

a four area ticket; (3) marketing and advertising its three mountains in

a manner designed to convince consumers that Aspen had only three

mountains, not mentioning Aspen Highlands; (4) making an agreement

with a tour operator to sell defendant's tickets to the exclusion of

plaintiffs; (5) refusing to accept plaintiff 's coupons during the 1978-79

season; and (6) raising ticket prices for a single-day lift ticket thus

eliminating plaintiff 's ability to offer a multi-area ticket." Id. at

1517.

40

II.

DISCUSSION

A.

Bundled Rebates

Through a sophisticated program of rebates,

denominated Executive Growth Fund and Partnership

Growth Fund, 3M induced customers to eliminate or

substantially reduce their purchases from LePage's. Rather

than relying on volume discounts which often reflect cost

savings, 3M offered discounts to customers for purchases

spanning six of 3M's diverse product lines. Those covered

by the rebate program were: Health Care Products, Home

Care Products, Home Improvement Products, Stationery

Products (including transparent tape), Retail Auto Products,

and Leisure Time. Sealed App. at 2979. Both of 3M's rebate

programs set customer-specific target growth rates in each

product line. The size of the rebate was linked to the

number of product lines in which targets were met, and the

number of targets met by the buyer determined the rebate

it would receive on all of its purchases.

The rebates were considerable. For example, Kmart

received $926,287 in 1997, Sealed App. at 2980, and in

1996 Wal-Mart received more than $1.5 million, Sam's

Club received $666,620, and Target received $482,001.

Sealed App. at 2773. A failure to meet the target for a single

product line would diminish the rebate received across all

product lines. Thus, there was a substantial incentive for

each customer to meet the targets across all product lines

to maximize its rebates.

1. Applicability of SmithKline

In discussing 3M's bundled rebates, the majority

recognizes that it must address our decision in SmithKline

Corp. v. Eli Lilly & Co., 575 F.2d 1056 (3d Cir. 1978), where

this court held that conduct substantially identical to 3M's

was anticompetitive and sustained the finding of a violation

of S 2. SmithKline concerned sales to hospitals by Eli Lilly &

41

Company, the pharmaceutical manufacturer, of three of its

cephalosporins which it sold under the trade names Kefzol,

Keflin and Keflex. Cephalosporins, which are broad

spectrum antibiotics, were at that time indispensable to

hospital pharmacies. Lilly had a monopoly on both Keflin

and Keflex because of its patents. However, those drugs

faced competition from the generic drug cefazolin which

Lilly sold under the trade name Kefzol and which

SmithKline sold under the trade name Ancef.

Lilly's profits on the patented Keflin were far higher than

those on Kefzol where its pricing was constrained by the

existence of a competitor (SmithKline). Thus, Lilly sought to

preserve its market position in Keflin and discourage sales

of Ancef and even its own Kefzol. Id. at 1061. To do this,

Lilly instituted a rebate program that provided a 3% bonus

rebate for hospitals that purchased specified quantities of

any three of Lilly's five cephalosporins. SmithKline brought

a S 2 monopolization claim, alleging that Lilly used these

multi-line volume rebates to maintain its monopoly over the

nonprofit hospital market for cephalosporins.

The district court (Judge A. Leon Higginbotham, later a

member of this court) found that Lilly's pricing policy

violated S 2. SmithKline Corp. v. Eli Lilly & Co., 427 F. Supp.

1089 (E.D. Pa. 1976). We affirmed by a unanimous

decision. Although customers were not forced to select

which cephalosporins from Lilly's stable they purchased, we

recognized that the effect of the rebate program was to

induce hospitals to conjoin their purchases of Kefzol with

Keflin and Keflex, Lilly's "leading sellers." SmithKline, 575

F.2d at 1061. As we stated, "[a]lthough eligibility for the 3%

bonus rebate was based on the purchase of specified

quantities of any three of Lilly's cephalosporins, in reality it

meant the combined purchases of Kefzol and the leading

sellers, Keflin and Keflex." Id. The gravamen of Lilly's S 2

violation was that Lilly linked a product on which it faced

competition with products on which it faced no

competition. Id. at 1065.

The effect of the 3% bundled rebate was magnified by the

volume of Lilly products sold, so that "in order to offer a

rebate of the same net dollar amount as Lilly's, SmithKline

had to offer purchasers of Ancef rebates of some 16% to

42

hospitals of average size, and 35% to larger volume

hospitals." Id. at 1062. Lilly's rebate structure combining

Kefzol with Keflin and Keflex "insulat[ed] Kefzol from true

price competition with [its competitor] Ancef." Id. at 1065.

LePage's private-label and second-tier tapes are, as Kefzol

and Ancef were in relation to Keflin, less expensive but

otherwise of similar quality to Scotch-brand tape. Indeed,

before 3M instituted its rebate program, LePage's had

begun to enjoy a small but rapidly expanding toehold in the

transparent tape market. 3M's incentive was thus the same

as Lilly's in SmithKline: to preserve the market position of

Scotch-brand tape by discouraging widespread acceptance

of the cheaper, but substantially similar, tape produced by

LePage's.

3M bundled its rebates for Scotch-brand tape with its

second-tier and private-label tape in much the same way

that Lilly bundled its rebates for Kefzol with Keflin and

Keflex. In both cases, the bundled rebates reflected an

exploitation of the seller's monopoly power. Just as

"[cephalosporins] [were] carried in . .. virtually every

general hospital in the country," SmithKline , 575 F.2d at

1062, Scotch-brand tape is indispensable to any retailer in

the transparent tape market.

In light of the manifest comparability between the facts in

SmithKline and here, this court's analysis of S 2 of the

Sherman Act in SmithKline and our conclusion in that case

is not only directly relevant but controlling. Speaking

through Judge Aldisert, we said:

With Lilly's cephalosporins subject to no serious

price competition from other sellers, with the barriers

to entering the market substantial, and with the

prospects of new competition extremely uncertain, we

are confronted with a factual complex in which Lilly

has the awesome power of a monopolist. Although it

enjoyed the status of a legal monopolist when it was

engaged in the manufacture and sale of its original

patented products, that status changed when it

instituted its [bundled rebate program]. The goal of

that plan was to associate Lilly's legal monopolistic

practices with an illegal activity that directly affected

43

the price, supply, and demand of Kefzol and Ancef.

Were it not for the [bundled rebate program] the price,

supply, and demand of Kefzol and Ancef would have

been determined by the economic laws of a competitive

market. [Lilly's bundled rebate program] blatantly

revised those economic laws and made Lilly a

transgressor under S 2 of the Sherman Act.

Id. at 1065.

The effect of 3M's rebates were even more powerfully

magnified than those in SmithKline because 3M's rebates

required purchases bridging 3M's extensive product lines.

In some cases, these magnified rebates to a particular

customer were as much as half of LePage's entire prior tape

sales to that customer. For example, LePage's sales to

Sam's Club in 1993 totaled $1,078,484, while 3M's 1996

rebate to Sam's was $666,620. Similarly, LePage's 1992

sales to Kmart were $2,482,756; 3M's 1997 rebate to Kmart

was $926,287. 3M used its monopoly in transparent tape,

backed by its considerable catalog of products, to squeeze

out LePage's. 3M's conduct was at least as anticompetitive

as the conduct which this court held violated S 2 in

SmithKline.

The majority makes several efforts to distinguish this

case from SmithKline but they are unpersuasive. In one

attempt, relegated to a footnote, the majority states that

LePage's claim, like that of the plaintiff in SmithKline, is one

of "monopoly leveraging" and as such must fail because a

monopoly leveraging case requires two separate markets

whereas the parties both treat this case as having only one

market for purposes of the appeal. See Maj. Op. at 15 n.5.

This is not a monopoly leveraging case, nor could it be.

As Judge Mansmann explained in Fineman v. Armstrong

World Industries, Inc., 980 F.2d 171 (3d Cir. 1992), a

leveraging claim entails an effort to convert monopoly power

in one market into either a monopoly or a dangerous

probability of monopoly in another market. Id. at 203; see

also 3 Areeda & Hovenkamp, Antitrust LawP 652, at 83

(rev. ed. 1996) (defining monopoly leveraging as a situation

where "the monopolist . . . `misuse[s]' or `abuse[s]' its

monopoly power by `leveraging' it so as to give the

44

monopolist an unfair advantage in the secondary market,

even though (a) the monopolist lacks significant power in

the secondary market; and (b) there is no reasonable

prospect that it will acquire monopoly power there"). The

claim was unsuccessful in Fineman because, although

defendant Armstrong probably could have been viewed as

having dominance in the leveraging market, which was

resilient floor covering, there was no evidence of a use of

that market power to attempt to monopolize the video

magazine market (producing a monthly videotape magazine

for retailers of floor covering products). Significant is the

fact that there were two separate non-competitive markets

at issue--floor coverings and video magazines.

Although there is some passing reference in Fineman

categorizing SmithKline among monopoly leveraging claims,

Fineman, 980 F.2d at 204 ("[a]lthough monopoly leveraging

claims are not entirely foreign to us, see Danny Kresky

Enterprises, Corp. v. Magid, 716 F.2d 206 (3d Cir. 1983),

[and] SmithKline"), there was no further discussion of

SmithKline in that context and no explication. 3

Advo, Inc. v. Philadelphia Newspapers, Inc., 51 F.3d 1191

(3d Cir. 1995), which the majority cites, is completely

inapplicable here.4 In that case, the claim was an attempt

to monopolize the market for delivering preprinted

advertising circulars in the greater Philadelphia area, and

plaintiff alleged that the defendant offered predatorily low

prices to major purchasers of delivery services for circular

advertising. It was not a market leveraging case.

SmithKline never argued monopoly leveraging in its case

and it never claimed predatory pricing. Even more

important, LePage's did not claim that this was a monopoly

_________________________________________________________________

3. This court held in Fineman that the district court erred in granting a

judgment notwithstanding the verdict but that there was sufficient

evidence of anti-competitive conduct to warrant a new trial for violation

of S 1 of the Sherman Act.

4. The only reference in Advo to SmithKline is the statement that the

quantity discounts offered by the defendant distinguished that case from

SmithKline, "where we found that discounts tied to the purchase of

specific items might amount to unlawful leveraging of monopoly power."

51 F.3d at 1203 (emphasis omitted).

45

leveraging case and, in fact, requested that the court not

charge the jury on a monopoly leveraging theory. App. at

5466-67. The court did not so charge. The majority has

floated a red herring.

Unlike the monopoly leveraging cases where the harm is

the extension of monopoly power from one market to

another, here 3M, if successful in eliminating competition

from LePage's second-tier or private-label tape, would

consolidate its monopoly in the transparent tape market. It

would destroy any serious threat to the dominance of the

Scotch-brand tape, as foreign competition was not viable

and there were no incipient competitors on the horizon.

Thus unrestrained, 3M could eliminate or reduce the

rebates that it offered to favored customers, which it had

introduced only after LePage's entry into the market with

its lower priced options. This is not the scenario to which

monopoly leveraging cases are directed. It is whatS 2 of the

Sherman Act was designed to prevent.

2. Anticompetitive Effect

The importance of the fact that 3M can exercise

monopoly power in the transparent tape market cannot be

underestimated when considering the anticompetitive effect

of its conduct. See, e.g., Robert Pitofsky, New Definitions of

Relevant Market and the Assault on Antitrust, 90 Colum. L.

Rev. 1805, 1807 (1990) ("In monopoly enforcement under

section 2 of the Sherman Act, the pivotal inquiry is almost

always whether the challenged party has substantial

market power in its relevant market."). Monopoly power is

"the power to control prices or exclude competition."

SmithKline, 575 F.2d at 1065 (quoting United States v. E.I.

Du Pont de Nemours & Co., 351 U.S. 377, 391 (1956)); see

also Borough of Lansdale v. Phila. Elec. Co., 692 F.2d 307,

311 (3d Cir. 1982).

The District Court, recognizing that "this case presents a

unique bundled rebate program that the jury found had an

anti-competitive effect," Le Page's, Inc. v. 3M, No. 97-3983,

2000 WL 280350, at *5 (E.D. Pa. Mar. 14, 2000), denied

3M's motion for judgment as a matter of law (JMOL),

stating:

46

Plaintiff introduced evidence that Scotch is a monopoly

product, and that 3M's bundled rebate programs

caused distributors to displace Le Page's entirely, or in

some cases, drastically reduce purchases from Le

Page's. Tr. Vol. 30 at 105-106; Vol. 27 at 30. Under

3M's rebate programs, 3M set overall growth targets for

unrelated product lines. In the distributors' view, 3M

set these targets in a manner which forced the

distributor to either drop any non-Scotch products, or

lose the maximum rebate. PX 24 at 3M 48136. Thus,

in order to qualify for the maximum rebate under the

EGF/PGF programs, the record shows that most

customers diverted private label business to 3M at

3M's suggestion. Tr. Vol. 28 at 74-75; PX23, 28, 32,

34, 715. Similarly, under the newer Brand Mix rebate

program, 3M set higher rebates for tape sales which

produced a shift from private label tape to branded

tape. Tr. Vol. 31 at 79. PX 393 at 534906.

Furthermore, Plaintiff introduced evidence of

customized rebate programs that similarly caused

distributors to forego purchasing from Le Page's if they

wished to obtain rebates on 3M's products. Specifically,

the trial record establishes that 3M offered Kmart a

customized growth rebate and Market Development

Funds payment. In order to reach the $15 million sales

target and qualify for the $1 million rebate, however,

Kmart had to increase its consumer stationary

purchases by $5.5 million. Kmart substantially

achieved this "growth" by dropping Le Page's and

another private label manufacturer, Tesa. PX 51 at 3M

102175, PX 121 at 156838. Likewise, 3M customized a

program with Staples that provided for an extra 1%

bonus rebate on Scotch tape sales "if Le Page's

business is given to 3M." PX 98 at 3M 149794. Finally,

3M provided a similar discount on Scotch tape to

Venture Stores "based on the contingency of Venture

dropping private label." PX 712 at 3M 450738. Thus,

the jury could have reasonably concluded that 3M's

customers were forced to forego purchasing Le Page's

private label tape in order to obtain the rebates on

Scotch tape.

47

Id.

The majority's principal basis for overturning the jury's

verdict and the District Court's denial of judgment as a

matter of law is its disagreement with the District Court's

finding that "[LePage's] introduced substantial evidence that

the anti-competitive effects of 3M's rebate programs caused

LePage's losses." Id. at *7. Glossing over the substantial

evidence of loss and its connection to 3M's conduct, the

majority imposes a new requirement on S 2 plaintiffs by

holding that LePage's failed to "show that it could not

compete by calculating the discount that it would have had

to provide in order to match the discounts offered by 3M

through its bundled rebates." Maj. Op. at 18. The majority

cites no authority for this novel proposition. Moreover, it

has no relationship to the record in this case.

The jury was capable of calculating from the evidence the

amount of rebate a customer of 3M would lose if it failed to

meet 3M's quota of sales in even one of the bundled

products. Thus, the majority's requirement to show"the

discount that [LePage's] would have had to provide to

match the discounts offered by 3M through its bundled

rebates" can be measured by the discounts 3M gave or

offered. For example, LePage's points out that in 1993

Sam's Club would have stood to lose $264,900, Sealed App.

at 1166, and Kmart $450,000 for failure to meet one of

3M's growth targets in a single product line. Sealed App. at

1110.

Moreover, even using the majority's analysis, it is not the

amount the customer would have lost had it stayed with

LePage's without a comparable discount that is important

but the effect of 3M's rebates on LePage's earnings, if

LePage's had attempted to match 3M's discounts. That

amount would represent the impact of 3M's bundled

rebates on LePage's ability to compete, and that is what is

relevant under S 2 of the Sherman Act.

The impact of 3M's discounts was apparent from the

chart introduced by LePage's that shows that LePage's

earnings as a percentage of sales plummeted to below zero

--to negative 10%--during 3M's rebate program. See App.

at 7037; see also App. at 7044 (documenting LePage's

48

healthy operating income from 1990 to 1993, rapidly

declining operating income from 1993 to 1995, and large

operating losses suffered from 1996 through 1999).

Demand for LePage's tape, especially its private-label tape,

decreased significantly following the introduction of 3M's

rebates. Although 3M claims that customers participating

in its rebate programs continued to purchase tape from

LePage's, the evidence does not support this contention.

Most distributors dropped LePage's entirely.

As the District Court found, "[LePage's] introduced

evidence . . . that 3M's bundled rebate programs caused

distributors to displace Le Page's entirely, or in some cases,

drastically reduce purchases from Le Page's." Le Page's,

2000 WL 280350, at *5. For example, LePage's lost key

large volume customers, such as Kmart, Staples, American

Drugstores, Office Max, and Sam's Club. App. at 943-44,

2416-17. Other large customers, like Wal-Mart, drastically

cut back their purchases. App. at 2417. In transparent tape

manufacturing, large volume customers are essential to

achieving efficiencies of scale. As 3M concedes in its brief,

" `large customers were extremely important to [LePage's], to

everyone.' . . . Large volumes . . . permitted `long runs'

making the manufacturing process more economical and

predictable." Br. of Appellant at 10 (quoting trial testimony

of Les Baggett, LePage's former president and CEO, App. at

234) (citation omitted). By March of 1997, LePage's was

forced to close one of its two plants. App. at 2401. Making

all inferences in LePage's favor, the conclusion is

unavoidable that LePage's could not effectively compete.

LePage's has more than satisfied even the majority's

draconian standard.

But perhaps more important, the majority's imposition of

a requirement that plaintiffs demonstrate that they could

not compete "by calculating the discount [the plaintiff]

would have to provide . . . to match the [monopolist's

bundled discounts]" is contrary to our precedent and that

of the Supreme Court. If this is intended to make a

plaintiff 's cost and efficiency the key factors in all S 2

cases, it introduces a novel consideration into an analysis

that should be directed to actions taken by a monopolist. In

our opinion in SmithKline, we nowhere discussed

49

SmithKline's costs. The district court in SmithKline

acknowledged that SmithKline was less efficient than Lilly,

SmithKline, 427 F. Supp. at 1108, but it nonetheless held

that SmithKline prevailed on its claim.

Admittedly, LePage's must bear the initial burden of

demonstrating that the defendant's conduct "produced

adverse, anti-competitive effects within the relevant product

and geographic markets." United States v. Brown Univ., 5

F.3d 658, 668 (3d Cir. 1993).5 There is no exclusive way to

make that showing. We have stated that "[t]he plaintiff may

[show anticompetitive effects] by proving the existence of

actual anticompetitive effects, such as reduction of output,

. . . increase in price, or deterioration in quality of goods or

services." Brown, 5 F.3d at 668 (citations omitted). But, as

we observed in Brown, "[s]uch proof is often impossible to

make . . . due to the difficulty of isolating the market effects

of challenged conduct." Id. (citing 7 Areeda, Antitrust Law

P 1503, at 376 (1986)).

We noted, however, that "[m]arket power, the ability to

raise prices above those that would prevail in a competitive

market . . . is essentially a `surrogate for detrimental

effects.' " Id. (quoting FTC v. Ind. Fed'n of Dentists, 476 U.S.

447, 460-61 (1986)). For example, in SmithKline , the

district court, in an opinion which this court characterized

as, "meticulous and comprehensive," SmithKline, 575 F.2d

at 1058 n.1, touched not only on the effect of Lilly's

conduct on the plaintiff but equally, if not more

importantly, the effect on competition generally. Judge

Higginbotham observed, "[a]fter a review of the operation of

[Lilly's rebate program] and its impact on SmithKline, and,

more importantly, on the nonprofit hospital market for

cephalosporins, I find Lilly guilty of the offense of

monopolization in violation of section two of the Sherman

Act." SmithKline, 427 F. Supp. at 1121 (emphasis added).

_________________________________________________________________

5. Although Brown is a S1 rule of reason case, the legal frameworks for

analyzing rule of reason violations of S 1 and monopolization claims

under S 2 are similar. See, e.g., Microsoft, 253 F.3d at 59; Mid-Texas

Communications Sys., Inc. v. AT&T, 615 F.2d 1372, 1389 n. 13 (6th Cir.

1980).

50

Ironically, the majority even quotes the well-accepted

proposition that to be anticompetitive, conduct must harm

competition itself-- "[h]arm to a competitor will not suffice."

Maj. Op. at 23, n.11. Harm to a competitor becomes

relevant to damages only after a violation is shown, but the

majority disclaims reaching the damages issue. Maj. Op. at

18. Inexplicably the majority fails to consider whether 3M's

actions were harmful to competition, a sine qua non for a

violation of S 2.

LePage's presented powerful evidence that competition

itself was harmed. The District Court recognized this in its

opinion, when it said:

The jury could reasonably infer that 3M's planned

elimination of the lower priced private label tape, as

well as the lower priced Highland brand, would

channel consumer selection to the higher priced Scotch

brand and lead to higher profits for 3M. Indeed,

Defendant concedes that "3M could later recoup the

profits it has forsaken on Scotch tape and private label

tape by selling more higher priced Scotch tape . . . if

there would be no competition by others in the private

label tape segment when 3M abandoned that part of

the market to sell only higher-priced Scotch tape."

Le Page's, 2000 WL 280350, at *7.

The plan that the District Court posited, that 3M sought

to force LePage's from the market to eliminate the

competition from LePage's second-tier tape, so that 3M

could decrease its sales of its less profitable second-tier

branded tape and force customers back to the higher priced

Scotch-brand tape, was not implausible. Prior to the

introduction of 3M's rebate program, LePage's share of the

transparent tape market had been skyrocketing. For

example, LePage's sales to Staples increased by 440% from

1990 to 1993. App. at 1907-08. Following the introduction

of 3M's rebate program which bundled its private-label tape

with its other products, 3M's private-label tape sales

increased 478% from 1992 to 1997.6 LePage's in turn lost

_________________________________________________________________

6. In 1992 3M's private-label tape sales were $1,142,000. By 1997, its

private-label tape sales had increased to $5,464,222. Sealed App. at 489.

51

a proportional amount of sales.7 As a result, LePage's

manufacturing process became less efficient and its profit

margins declined. In 1997, the only other domestic

transparent tape manufacturer, Tesa Tuck, Inc., bowed out

of the transparent tape business entirely. App. at 3008-09.

Had 3M continued with its program 3M could have

eventually forced LePage's out of the market.

3M could effectuate such a plan because there was no

ease of entry. See Advo, 51 F.3d at 1200 (commenting that

ease of entry would prevent monopolist's predatory pricing

scheme from succeeding); see also Edward A. Snyder &

Thomas E. Kauper, Misuses of the Antitrust Laws: The

Competitor Plaintiff, 90 Mich. L. Rev. 551 (1991) (finding

"barriers to entry" to be one of two necessary conditions for

exclusionary conduct, the other being "market power").

The District Court found that there was "substantial

evidence at trial that significant entry barriers prevent

competitors from entering the . . . tape market in the

United States. Thus, this case presents a situation in which

a monopolist remains unchecked in the market." Le Page's,

2000 WL 280350, at *7. In the time period at issue here,

there has never been a competitor that has genuinely

challenged 3M's monopoly and it never lost a significant

transparent tape account to a foreign competitor. App. at

4272.

The significance of entry barriers is emphasized in

Concord Boat Corp. v. Brunswick Corp., 207 F.3d 1039 (8th

Cir. 2000), a case cited by the majority. In that case the

court reviewed a multimillion dollar jury verdict on behalf

of plaintiff boat builders who alleged that the dominant

stern drive engine manufacturer violated S 7 of the Clayton

Act and SS 1 and 2 of the Sherman Act. The Court of

_________________________________________________________________

7. According to the majority, some of these losses were attributable to

quality or service issues. Maj. Op. at 26-27. That evidence is in dispute.

Given the existence of evidence to the contrary, the majority's reading of

the facts is simply not consistent with this court's precedent, which the

majority cites with approval, see Maj. Op. at 13, that, when considering

whether to overturn the jury's verdict, this court must view the evidence

in the light most favorable to the verdict winner. Lightning Lube, Inc. v.

Witco Corp., 4 F.3d 1153, 1166 (3d Cir. 1993).

52

Appeals overturned the S 7 verdict as barred by the statute

of limitations and the Sherman S 1 verdict because the

expert opinion on which it was based was not supported by

the facts. It also reversed the Sherman S 2 verdict, but here

the opinion shows the difference between the facts in that

case and those here. First, the court noted that the boat

builders "did not show that significant barriers to entry

existed in the stern drive market." Id. at 1059. It

commented that "[i]f entry barriers to new firms are not

significant, it may be difficult for even a monopoly company

to control prices through some type of exclusive dealing

arrangement because a new firm or firms easily can enter

the market to challenge it." Id. It continued, "[i]f there are

significant entry barriers in the market, a potential

competitor would have difficulty entering in order to

challenge a firm that is charging supracompetitive high

prices." Id. In this case, 3M does not dispute that there are

significant barriers to entry in the transparent tape market,

as the District Court found.

Second, in holding that the plaintiff boat builders had not

shown that Brunswick's engine price was below cost, the

court relied on the decision in Brooke Group where the

Court held that a predatory pricing claim could not be

grounded on above-cost discounting. The Concord court

distinguished other S 2 cases, including an earlier decision

of the District Court in this case, LePage's, Inc. v. 3M, No.

97-3983, 1997 WL 734005 (E.D. Pa. 1997), on the ground

that in Brunswick "there are no allegations of tying or

bundling with another product." Concord, 207 F.3d at

1062. Of course, the bundled rebates offered by 3M occupy

a central place in LePage's case.

Finally, in its decision the Eighth Circuit noted that

"Brunswick's discount programs were not exclusive dealing

contracts and its customers were not required either to

purchase 100% from Brunswick or to refrain from

purchasing from competitors in order to receive the

discount." Id. at 1062-63. The court noted that its

customers could purchase up to forty percent of

requirements from other sellers without foregoing the

discount. That situation is far different from 3M's bundled

rebate programs, as there was ample evidence that its

53

discount was, in effect, available only if the customer

bought all of its transparent tape requirements from 3M. In

summary, unlike the Brunswick situation, here there were

significant barriers to entry, 3M bundled its rebates, and

3M imposed exclusive dealing requirements on some of its

principal customers.

As the majority concedes, Maj. Op. at 28, there was

evidence from which the jury could have determined that

3M intended to force LePage's from the market, and then

cease or severely curtail its own private-label and second-

tier tape lines. For example, by 1996, 3M had begun to

offer incentives to some customers to increase purchases of

its higher priced Scotch-brand tapes over its own second-

tier brand. The Supreme Court has made clear that intent

is relevant to proving monopolization, see Aspen Skiing Co.

v. Aspen Highlands Skiing Corp., 472 U.S. 585, 602 (1985),

and attempt to monopolize, Lorain Journal Co. v. United

States, 342 U.S. 143, 155 (1951).

3M's interest in raising prices is well-documented in the

record. LePage's expert testified that the price of Scotch-

brand tape has increased since 1994, after 3M instituted its

rebate program. App. at 3246-47, 5392-95. In its opinion,

the District Court cited the deposition testimony of a 3M

employee acknowledging that the payment of the rebates

after the end of the year discouraged passing the rebate on

to the ultimate customers. App. at 2092. The District Court

thus observed, "the record amply reflects that 3M's rebate

programs did not benefit the ultimate consumer." Le

Page's, 2000 WL 280350, at *7. The record contained

sufficient evidence for the jury to conclude the long-term

effects of 3M's conduct were anticompetitive.

3. Relevance of Brooke Group

Running throughout the majority's opinion is the theme

that because 3M's prices on transparent tape were not

below its average variable cost it could not have violated S 2

of the Sherman Act. This is the principal argument made

by 3M on appeal. 3M argues that "[a]bove-cost pricing

cannot give rise to an antitrust offense as a matter of law,

since it is the very conduct that the antitrust laws wish to

promote in the interest of making consumers better off." Br.

54

of Appellant at 30. It cites for this proposition the Supreme

Court's decision in Brooke Group Ltd. v. Brown &

Williamson Tobacco Corp., 509 U.S. 209, 222 (1993). Every

decision on S 2 since 1993 must deal with Brooke Group,

but that case does not hold that a claim of monopolizing or

attempting to monopolize will be unsuccessful unless

plaintiff shows below-cost predatory pricing.

In Brooke Group, Liggett, a cigarette manufacturer

responsible for the "innovative development" of generic

cigarettes, claimed that Brown & Williamson, which

introduced its own line of generic cigarettes, "cut prices on

generic cigarettes below cost and offered discriminatory

volume rebates to wholesalers to force Liggett to raise its

own generic cigarette prices and introduce oligopoly pricing

in the economy segment [of the national cigarette market]."

Id. at 212. Brown & Williamson's deep price discounts or

rebates were concededly discriminatory (Liggett's claim

included violation of the Robinson- Patman Act), not cost

justified, and resulted in substantial loss to it. The

Supreme Court majority held that defendant was entitled to

judgment as a matter of law because there was no evidence

of injury to competition. The Court also held that the

evidence did not show that Brown & Williamson's alleged

scheme "was likely to result in oligopolistic price

coordination and sustained supracompetitive pricing in the

generic segment of the national cigarette market. Without

this, Brown & Williamson had no reasonable prospect of

recouping its predatory losses and could not inflict the

injury to competition the antitrust laws prohibit." Id. at 243.8

The Brooke Group opinion is premised on the national

cigarette market at that time, which was composed of six

manufacturers whose prices for cigarettes "increased in

lockstep" and who "reaped the benefits of prices above a

competitive level." Id. at 213. Brown & Williamson's share

_________________________________________________________________

8. In contrast, the District Court here noted that 3M had conceded that

it "could later recoup the profits it has forsaken on Scotch tape and

private-label tape by selling more higher priced Scotch tape . . . if

there

would be no competition by others in the private-label tape segment

when 3M abandoned that part of the market to sell only higher-priced

Scotch tape." Le Page's, 2000 WL 280350, at *7 (omission in original).

55

of the oligopolistic market was described in the opinion as

twelve percent. Thus, its conduct and pricing were at all

times constrained by the presence of competitors who

could, and did, react to its conduct by undertaking similar

price cuts or pricing behavior.9

In contrast, 3M is a monopolist. It is a tenet of antitrust

law that a monopolist is not permitted to take certain

actions that a company in a competitive (or even

oligopolistic market) may take, because there is no

constraint on a monopolist's behavior. See, e.g. , Aspen

Skiing, 472 U.S. at 601-04. Even if Brooke Group could be

read for the proposition that all pricing action is legal if the

company's prices are not below its costs, nothing in the

Supreme Court's decision suggests that its discussion of

the issue is applicable to a monopolist with its

unconstrained market power. And nothing in that opinion

gives the imprimatur of approval to bundled rebates, the

conduct by 3M that the jury found violated S 2.

Even if 3M had not engaged in other exclusionary

conduct, the jury's conclusion that 3M unlawfully

maintained its monopoly power is amply supported by the

evidence of 3M's bundled rebate programs.

B.

Exclusive Dealing

3M did not confine its monopolization actions to its

bundled rebate programs. LePage's produced substantial

evidence of exclusionary conduct by 3M, much of it

designed to achieve sole-source supplier status, either

facially or indirectly.10 Even though exclusivity

_________________________________________________________________

9. The Brooke Group opinions, both for the majority and the dissent,

discuss the responses by members of the oligopoly to the introduction of

discounted cigarettes. Id. at 239-40; id. at 247-48 (Stevens, J.,

dissenting).

10. The jury's finding against LePage's on its exclusive dealing claim

under S 1 of the Sherman Act and S 3 of the Clayton Act does not

preclude the application of evidence of 3M's exclusive dealing to support

56

arrangements are often analyzed under S 1, such

exclusionary conduct may also be an element in aS 2

claim. U.S. Healthcare, Inc. v. Healthsource, Inc., 986 F.2d

589, 593 (1st Cir. 1993) (observing that exclusivity may

also play "a role . . . as an element in attempted or actual

monopolization"). When evaluating a plaintiff 's exclusive

dealing claim under S 1, this court has looked to the

increase in the defendant's market share, the effects of

foreclosure on the market, benefits to customers and the

defendant, and the extent to which customers felt they were

precluded from dealing with other manufacturers. Barr, 978

F.2d at 110-11. There is no reason why these factors would

not be equally applicable under S 2.

According to LePage's, 3M's exclusionary "tactics

foreclosed the competitive process by preventing rivals from

competing to gain (or maintain) a presence in the market."

Br. of Appellee at 45-46. The District Court instructed the

jury that for purposes of finding a S 2 violation,

" `exclusionary' comprehends . . . behavior that not only (1)

tends to impair the opportunities of rivals, but also (2)

either does not further competition on the merits or does so

in an unnecessarily restrictive way." App. at 6490. The

instruction followed the applicable legal principles

enunciated in Eastman Kodak Co. v. Image Tech. Servs.,

Inc., 504 U.S. 451, 482-83 (1992). See also Aspen Skiing,

472 U.S. at 605 n.32. In fact, one of the foremost antitrust

treatises approvingly cites an unreported opinion by the

District Court in this case as an example of how discounts

conditioned on exclusivity are "problematic""when the

defendant is a dominant firm in a position to force

manufacturers to make an all-or-nothing choice." 11

Hovenkamp, Antitrust Law P 1807b, at 117 n.7 (1998)

(citing LePage's, 1997 WL 734005 (E.D. Pa. 1997)).

_________________________________________________________________

LePage's S 2 claim. See, e.g., Barr Labs. v. Abbott Labs., 978 F.2d 98,

110-11 (3d Cir. 1992) (considering S 2 of the Sherman claims after

rejecting claims based on the same evidence underS 1 of the Sherman

Act and S 3 of the Clayton Act); SmithKline, 427 F. Supp. at 1092, aff 'd,

575 F.2d 1056 (imposing S 2 Sherman Act liability for exclusionary

conduct, after rejecting an exclusive dealing claim under S 3 of the

Clayton Act).

57

In Tampa Electric Co. v. Nashville Coal Co., 365 U.S. 320

(1961), which the majority cites and which dealt with S 3 of

the Clayton Act, not S 2 of the Sherman Act, the Court took

cognizance of arrangements which, albeit not expressly

exclusive, effectively foreclosed the business of competitors.

It has been noted that even quantity discounts may

foreclose a substantial portion of the market. See, e.g., 11

Hovenkamp, Antitrust Law P 1807a, at 115-16. As

Professors Areeda and Hovenkamp recognize, "unilaterally

imposed quantity discounts can foreclose the opportunities

of rivals when a dealer can obtain its best discounts only by

dealing exclusively with the dominant firm. This is

particularly true when the discounts are cumulative over

lengthy periods of time--for example, one year--and where

no obvious economies result from giving lower prices in,

say, August on the basis of large purchases made in

January." 3A Areeda & Hovenkamp, Antitrust Law P 768b3,

at 151 (1996).

Because some of 3M's rebates were "all or nothing"

discounts, customers maximized their discounts only if

they dealt exclusively with the dominant market player, 3M,

and they were severely penalized financially for failing to

meet their quota in a single product line. Only by dealing

exclusively with 3M in as many product lines as possible

could customers enjoy the substantial discounts.

The majority acknowledges only two exclusive dealing

contracts, those with the Venture and Pomida stores.

However, LePage's introduced evidence that the jury could

well have believed rendered other arrangements exclusive.

Many of LePage's former customers refused to even meet

with LePage's sales representatives. App. at 1925, 1451. Of

more significance, a buyer of Kmart, LePage's largest

customer, which accounted for ten percent of its business,

told LePage's "I can't talk to you about tape products for

the next three years" and "don't bring me anything 3M

makes." App. at 302, 764-65. Kmart switched to 3M

following 3M's offer of a $1 million "growth" reward which

the jury could have understood to require that 3M be its

sole supplier. Similarly, Staples was offered an extra one

percent bonus rebate if it gave LePage's business to 3M.

The majority accepts 3M's argument that LePage's did not

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try hard enough to retain Kmart, its customer for twenty

years, but the evidence is to the contrary.11 In any event,

this was an issue for the jury which, by its verdict, rejected

3M's argument.

In internal memoranda introduced into evidence by

LePage's, 3M executives boasted that the large retailers like

Office Max and Staples had no choice but to adhere to 3M's

demands. Sealed App. at 2585 ("Either they take the [price]

increase . . . or we hold orders . . . ."); see also Sealed App.

at 2571 (3M's directive when Staples objected to price

increase was "orders will be held if pricing is not up to date

on 1/1/98"). Judge Posner, well known for his familiarity

with economic doctrine, wrote in a case dealing with

exclusive contracts that in order to show that an exclusive-

dealing agreement is unreasonable, a plaintiff "must prove

that it is likely to keep at least one significant competitor of

the defendant from doing business in a relevant market

. . . . [and] must prove that the probable (not certain) effect

of the exclusion will be to raise prices above (and therefore

reduce output below) the competitive level, or otherwise

injure competition." Roland Mach. Co. v. Dresser Indus.,

Inc., 749 F.2d 380, 394 (7th Cir. 1984).

According to the majority, "there was not enough

foreclosure of the market to have an anticompetitive effect,"

because "LePage's total drop in market share was only

21%." Maj. Op. at 26.12 The majority summarily concludes,

"[I]n view of LePage's two thirds share of the private label

_________________________________________________________________

11. At trial, LePage's presented the testimony of James Kowieski, its

former senior vice president of sales, who described LePage's efforts

following Kmart's rejection of its bid. LePage's made a desperate second

sales presentation attended by its president, App. at 957 ("I felt that it

was very critical to our company's success or failure, so I insured that

Mr. Les Baggett, our president, attended the meeting with me."), where

LePage's vainly offered additional price concessions, App. at 959 ("We

went through the cost savings, the benefits, and we came up with some,

again, price concessions, and some programs of a special buy once a

year, because, I mean, as far as we were concerned, we were on our last

leg.").

12. In fact, LePage's market share dropped 35% from 1992 to 1997. In

1992, LePage's net sales constituted 14.44% of the total transparent tape

market. By 1997, LePage's sales has fallen to 9.35%. Sealed App. at 489.

59

business, its attack on exclusivity agreements seems rather

attenuated." Id. at 26.

The first problem with this conclusion is that the

"market" share to which the majority refers is LePage's

market share in private-label tape. Maj. Op. at 26. But the

agreed upon relevant market is for transparent tape in the

United States. In that market, where 3M is a monopolist

enjoying better than a ninety percent share, LePage's had a

much smaller share -- approximately nine percent by 1997.

In that market, LePage's claim of exclusion does not at all

appear "rather attenuated."

Furthermore, the majority's conclusion is inconsistent

with both this court's decision in Barr and the Supreme

Court's decision in Tampa Electric, on which both Barr and

the majority rely. In Barr, we observed"the degree of

market foreclosure is only one of the factors in determining

the legality of an exclusive dealing arrangement." Barr, 978

F.3d at 111. The Barr court looked for the additional factors

in the qualitative substantiality test enunciated by the

Supreme Court in Tampa Electric. The majority entirely

omits analysis of the qualitative substantiality test.

According to that test,

[I]t is necessary to weigh the probable effect of the

contract on the relevant area of effective competition,

taking into account the relative strength of the parties,

the proportionate volume of commerce involved in

relation to the total volume of commerce in the relevant

market area, and the probable immediate and future

effects which pre-emption of that share of the market

might have on effective competition therein.

Tampa Elec., 365 U.S. at 329; see also Barr, 978 F.2d at

111 (quoting same). Had the majority applied this test, it

would have been far more difficult for it to conclude 3M's

conduct was not anticompetitive.

Finally, the majority approvingly quotes the statement in

the Microsoft opinion of the Court of Appeals for the District

of Columbia that "[b]ecause an exclusive deal affecting a

small fraction of a market clearly cannot have the requisite

harmful effect upon competition, the requirement of a

significant degree of foreclosure serves a useful screening

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function." Maj. Op. at 26 (quoting United States v. Microsoft

Corp., 253 F.3d 34, 69 (D.C. Cir. 2001)). However, in the

Microsoft opinion, the court had concluded that Microsoft,

a monopolist in the operating system market, also

foreclosed rivals in the browser market from a "substantial

percentage of the available opportunities for browser

distribution," through the use of exclusive contracts with

key distributors. Microsoft, 253 F.3d at 70. Microsoft kept

usage of its competitor's browser below "the critical level

necessary for [its rival] . . . to pose a real threat to

[Microsoft's] monopoly." Id. at 71. The Microsoft opinion

does not specify what percentage of the browser market

Microsoft locked up -- merely that, in one of the two

primary distribution channels for browsers, Microsoft had

exclusive arrangements with most of the top distributors.

Id. at 70-71. Significantly, the Microsoft court observed that

Microsoft's exclusionary conduct violated S 2"even though

the contracts foreclose less than the roughly 40% or 50%

share usually required in order to establish a S 1 violation,"

id. at 70, a point the majority appears to have overlooked.

The Microsoft court properly treated exclusionary conduct

by a monopolist as more likely to be anticompetitive than

ordinary S 1 exclusionary conduct. The key exclusionary

conduct inquiry in Microsoft was whether the monopolist's

conduct excludes a competitor entirely from essential

facilities13 which would permit it to achieve the efficiencies

_________________________________________________________________

13. This is a version of the bottleneck, or essential facilities problem,

applied in the monopoly context. In one of the two distribution channels

available for browsers, Microsoft had locked up almost all the high

volume distributors. Id. In the seminal Terminal Railroad case, an

association of railroad operators locked up the cheapest route across the

Mississippi river, the sole railroad bridge crossing at St. Louis. United

States v. Terminal R.R. Ass'n, 224 U.S. 383 (1912). The Supreme Court

determined that the defendant's agreement to provide access to the

bridge to other railroads on discriminatory terms violated S 1 of the

Sherman Act.

In the transparent tape market, superstores like Kmart and Wal-Mart

provide a crucial facility to any manufacturer--they supply high volume

sales with the concomitant substantially reduced distribution costs. By

wielding its monopoly power in transparent tape and its vast array of

product lines, 3M foreclosed LePage's from that critical bridge to

consumers which superstores provide, namely, cheap, high volume

supply lines.

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of scale necessary to threaten the monopoly. Id. at 70-71;

see, e.g., Thomas Krattenmaker & Steven Salop,

Anticompetitive Exclusion: Raising Rivals' Costs to Achieve

Power Over Price, 96 Yale L.J. 209, 214 (1986) ("First one

should ask whether the conduct of the challenged firm

unavoidably and significantly increases the costs of its

competitors. If so, one should then ask whether raising

rivals' costs enables the excluding firm to exercise

monopoly power."); see also Aspen Skiing, 472 U.S. at 604-

05 & n.31 (observing exclusionary conduct is

anticompetitive when it disrupts distribution patterns,

rendering competitors less efficient). In Microsoft, it was

enough that Microsoft had foreclosed enough distribution

links to undermine the survival of Netscape as a viable

competitor. As discussed above, 3M's exclusionary conduct

cut LePage's off from key retail pipelines necessary to

permit it to compete profitably. This left 3M free to exercise

its monopoly power unchallenged.

As I noted at the outset, the effect of 3M's conduct in

strengthening its monopoly position by destroying

competition by LePage's in second-tier tape is most

apparent when 3M's various activities are considered as a

whole. For example, 3M's bundling of its products via its

rebate programs reinforced the exclusionary effect of those

programs. Together with 3M's conduct designed to achieve

actual or virtual sole supplier status the conduct met the

criteria for a S 2 violation. There is significant evidence to

support the jury's verdict to that effect.

C.

Business Reasons Justification

The majority seeks to excuse 3M's exclusionary conduct

on the ground that it acted in furtherance of its economic

interests. However, the fact that the Court looked at

whether defendant's actions were carried out for"valid

business reasons" in Eastman Kodak, 504 U.S. at 483,

does not mean that whatever is good for 3M is permissible

under S 2 of the Sherman Act. As one Court of Appeals has

explained:

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In general, a business justification is valid if it relates

directly or indirectly to the enhancement of consumer

welfare. Thus, pursuit of efficiency and quality control

might be legitimate competitive reasons . . . , while the

desire to maintain a monopoly market share, or thwart

the entry of competitors would not.

Data Gen. Corp. v. Grumman Sys. Support Corp. , 36 F.3d

1147, 1183 (1st Cir. 1994) (citing Eastman Kodak , 504 U.S.

at 483; Aspen Skiing, 472 U.S. at 608-11).

The majority states that "[u]nlike the situation of the

defendant in Aspen, 3M's pricing structure and bundled

rebates were not necessarily contrary to its economic

interests, as they likely increased its sales. " Maj. Op. at 24

(emphasis added). Of course a monopolist seeks to further

its economic interests, and may do so by increasing its

sales. It is not surprising that a monopolist's sales, as

measured by market share, may increase when it engages

in exclusionary conduct. Thus, for example, exclusionary

practice has been defined as "a method by which a firm . . .

trades a part of its monopoly profits, at least temporarily,

for a larger market share, by making it unprofitable for

other sellers to compete with it." Richard A. Posner,

Antitrust Law 28 (1976). Once a monopolist achieves its

goal by excluding potential competitors, it can then

increase the price of its product to the point at which it will

maximize its profit. This price is invariably higher than the

price determined in a competitive market. That is one of the

principal reasons why monopolization violates the antitrust

laws. The fact that 3M acted to benefit its own economic

interests is hardly a reason to overturn the jury's finding

that it violated S 2 of the Sherman Act.

The defendant bears the burden of "persuad[ing] the jury

that its conduct was justified by any normal business

purpose." Aspen, 472 U.S. at 608. The majority

hypothesizes what it terms "several other potential

`procompetitive' or valid business reasons for 3M's . . .

bundled rebates." Maj. Op. at 24 (emphasis added). It refers

to the "efficiency in having single invoices, single shipments

and uniform pricing programs for various products." Id. The

majority cites to no testimony or evidence in the fifty-five

volume appendix that would support these "efficiencies,"

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even though some customers may have found consolidated

billing desirable. It is highly unlikely that transparent tape

was shipped along with retail auto products or home

improvement products to customers such as Staples or

that, if it were, the savings stemming from the joint

shipment approaches the multi-million dollars 3M returned

to customers in bundled rebates.

There is considerable evidence in the record that 3M

entered the private-label market only to "kill it." See, e.g.,

Sealed App. at 809 (statement by 3M executive in internal

memorandum that "I don't want private label 3M products

to be successful in the office supply business, its

distribution or our consumers/end users"). The majority

concedes that the record supports a finding that 3M"was

attempting to eliminate the private label category of

transparent tape" and that "in view of 3M's dominance in

brand tape, . . . it was rational for it to want the sale of

tape to be concentrated in that category of the market."

Maj. Op. at 28.

That is precisely what S 2 of the Sherman Act outlaws by

covering conduct that maintains a monopoly. Maintaining a

monopoly is not the type of valid business reason that will

excuse exclusionary conduct. The majority usurps the

jury's province to decide the facts, despite sufficient

evidence to support the jury's verdict.

3M used its market power over transparent tape, backed

by its considerable catalog of products, to entrench its

monopoly, to the detriment of LePage's, its only serious

competitor. The jury's verdict reflects its view that 3M's

bundled rebate programs and other exclusionary conduct

made it difficult for LePage's to compete on the merits--that

is to say, on price, quality, or customer service.

III.

ATTEMPTED MONOPOLIZATION

The jury returned a verdict for LePage's against 3M on

LePage's claim that 3M illegally attempted to maintain its

monopoly. The District Court overturned the jury's

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attempted monopolization verdict on the ground that"an

attempted maintenance of monopoly power" is "inherently

illogical." Le Page's Inc. v. 3M, No. 97-3783, 2000 WL

280350, at *2. The District Court reasoned that:

[a]ny "attempt claim" rests on the underlying theory

that the defendant has failed to achieve its goal, which

in this case is maintenance of monopoly power. But, if

the defendant has failed to achieve its goal of

maintaining monopoly power, then it follows that the

defendant lacks monopoly power. Lacking any

monopoly power to maintain, the defendant cannot be

held liable for "attempted maintenance of monopoly

power."

Id. The majority holds that the District Court's reasoning

was erroneous but nonetheless affirms.

I agree that the District Court erred in this respect.

Courts and commentators have repeatedly found that

defendants can be guilty of both monopolization and

attempted monopolization claims arising out of the same

conduct. See, e.g., Am. Tobacco Co. v. United States, 328

U.S. 781, 783 (1946) (affirming judgment that defendants

were guilty of monopolization and attempted

monopolization); Earl Kintner, 2 Federal Antitrust Law

S 13.1 n.5 (1980). 3M does not dispute this point.

The elements of a S 2 attempted monopolization claim

are: (1) predatory or anticompetitive conduct; (2) specific

intent to monopolize; and (3) dangerous probability of

achieving monopoly power. See Ideal Dairy Farms, Inc. v.

John Labatt, Ltd., 90 F.3d 737, 750 (3d Cir. 1996). The law

is clear that a defendant possessing monopoly power can be

found liable under S 2 for attempted monopolization where

that defendant either has failed in its attempt to maintain

its monopoly or has not yet succeeded in its attempt to

maintain its monopoly. As I have discussed above, 3M (1)

engaged in anticompetitive conduct, (2) specifically intended

to monopolize and (3) had a dangerous likelihood of

success.

The analysis by the Supreme Court of the S 2 attempted

monopolization claim in Lorain Journal Co. v. United States,

342 U.S. 143 (1951), is precisely applicable here. In that

65

case, the defendant newspaper had monopoly power and

sought to use exclusive dealing contracts with advertiser-

customers to destroy its budding rival, a local radio station.

Although the defendant had not actually accomplished its

objective, the Court held that "a single newspaper, already

enjoying a substantial monopoly in its area, violates the

`attempt to monopolize' clause of S 2 when it uses its

monopoly to destroy threatened competition." Id. at 154.

Similar analysis was applied in the Fifth Circuit decision

in Multiflex, Inc. v. Samuel Moore & Co., 709 F.2d 980 (5th

Cir. 1983), where the court characterized plaintiff 's S 2

claim as charging defendant with "an unsuccessful attempt

to maintain monopoly power through anticompetitive acts."

Id. at 991. The court held that "[s]uch a claim could

constitute the offense of actual monopolization under

section 2 [but that] [i]t fails as actual monopolization only

because [defendant's] efforts were unsuccessful." Id.

LePage's has charged defendant 3M with the same conduct,

i.e. "attempted maintenance of monopoly power."

The majority's efforts to distinguish these cases are

unpersuasive.

There appears to be some division in the courts as to

whether an attempted monopolization claim merges into a

monopolization claim when the defendant has been

successful. The distinction is merely a semantic one. The

key issue is whether a company with market power has

taken steps, whether successful or unsuccessful, to destroy

incipient competition. If it has, it violated S 2. That a

competitor need not demonstrate actual effect on itself, but

only show the danger of that effect, is seminal toS 2

jurisprudence. As the Supreme Court observed over half a

century ago, "[i]t is . . . unreasonable, per se, to foreclose

competitors from any substantial market. . . . The antitrust

laws are as much violated by the prevention of competition

as by its destruction. . . . It follows a fortiori that the use

of monopoly power, however lawfully acquired, to foreclose

competition, to gain a competitive advantage, or to destroy

a competitor, is unlawful." United States v. Griffith, 334

U.S. 100, 107 (1948) (quotations and citations omitted).

I understand the majority's rejection of LePage's

attempted monopolization claim to follow its rejection of

66

LePage's monopolization claim because the majority

concludes that the rebates and exclusive dealing contracts

were not predatory and anticompetitive. Because I disagree

with the majority on this central issue, I also disagree with

its disposition of LePage's attempted monopolization claim.

IV.

CONCLUSION

The majority fails to look to 3M's conduct as a whole,

imposes hurdles for plaintiffs in antitrust actions to the

detriment of consumers and competition generally, and fails

to acknowledge that sufficient evidence underlies the jury's

verdict based on 3M's conduct. I would reinstate the jury's

verdict on both LePage's monopolization and attempted

monopolization claims.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

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