Rothery Storage & Van Co. v. Atlas Van Lines, Inc.

WALD, Circuit Judge,

concurring:

I concur in the result and in much of the reasoning of the panel’s opinion. I write separately, however, to point out several concerns that I have about the panel’s analysis once it establishes that no per se violation existed and the restraint should be looked at under the rule of reason. I believe that the District Court correctly undertook, in the traditional way, to “carefully balance” the “anticompetitive evils of the challenged practice ... against its pro-competitive virtues.” Smith v. Pro Football, Inc., 598 F.2d 1173, 1183 (D.C.Cir. 1978). In fact, at one point the panel concedes that the record made in the District Court demonstrates, even without reliance on inferences drawn from market power, “that the challenged agreement enhances the efficiency of the van lines.” Pan. op. at 221. I am uncomfortable, therefore, with the panel’s suggestions that the District Court’s balancing was unnecessary, and indeed a useless exercise.

The panel concludes that no balancing was required here since a defendant lacking significant market power cannot act anticompetitively by reducing output and increasing prices. If, as the panel assumes, the only legitimate purpose of the antitrust laws is this concern with the potential for decrease in output and rise in prices, reliance on market power alone might be appropriate. 1 But, I do not believe that the debate over the purposes of *231 antitrust laws has been settled yet. 2 Until the Supreme Court provides more definitive instruction in this regard, 3 1 think it premature to construct an antitrust test that ignores all other potential concerns of the antitrust laws except for restriction of output and price raising.

The panel also suggests that even if some kind of balancing 4 were appropriate, the only feasible way of doing it would be to use market share as a surrogate for anticompetitive effects. See Pan. op. at 229 n. 11 (“Though it is sometimes said that in cases of restrictions like these, it is necessary to weigh procompetitive effects against anticompetitive effects, we do not think that a usable formula____ Weighing effects in any direct sense will usually be beyond judicial capabilities but predictions about effects may be reflected in rules about allowable size.”). I acknowledge that traditional rule of reason balancing does not lend itself to neat equations, or percentages, or even Herfindahl-Hirschman indices providing a definitive answer. Nonetheless, to my knowledge, the Supreme Court has so far not decided rule of reason cases solely by looking at market shares. Instead, it has looked to the totality of circumstances surrounding a restraint to determine whether, on balance, it constitutes an unreasonable restraint of trade. See, e.g., N.C.A.A. v. Board of Regents of the University of Oklahoma, 468 U.S. 85 , 104 S.Ct. 2948, 2967 , 82 L.Ed.2d 70 (1984) (looking at asserted procompetitive virtues even after determining that defendant had monopoly power); Broadcast Music Industries v. CBS, 441 U.S. 1 , 99 S.Ct. 1551 , 60 L.Ed.2d 1 (1979) (instructing lower court to take procompetitive virtues of blanket licensing into account even though defendants had huge market shares). 5

Until the Supreme Court indicates that the only goal of antitrust law is to promote efficiency, as the panel uses that term, I think it more prudent to proceed with a pragmatic, albeit nonarithmetic and even untidy rule of reason analysis, than to adopt a market power test as the exclusive filtering-out device for all potential violaters who do not command a significant *232 market share. Under any analysis, market power is an important consideration; I am not yet willing to say it is the only one. 6

. In Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Co., — U.S.-, 105 S.Ct. 2613 , 86 L.Ed.2d 202 (1985), the Court held that the per se rule of illegality did not apply absent an allegation that the "cooperative possesses market power or unique access to a business element necessary for effective competition.” 105 S.Ct. at 2613 . Since the plaintiffs had not alleged any such market advantage, the Court remanded for rule of reason analysis. According to the panel’s analysis, plaintiffs failure to allege market power should have been determinative of the rule of reason inquiry as well. Nothing in BMI, NCAA, or Pacific Stationery supports the panel’s new perse rule of legality-

. Compare Bork, The Antitrust Paradox (1978) (only goal is to increase economic efficiency); R. Posner, Antitrust Law: An Economic Perspective (1976) (efficiency is not only important goal, it is the only goal of antitrust law) with Pitofsky, The Political Content of Antitrust, 127 U.Pa.L.Rev. 1051 (1979) (antitrust laws promote political values including fear of excessive concentration of economic power and a desire to enhance individual and business freedom); Schwartz, "Justice'’ and Other Non-Economic Goals of Antitrust, 127 U.Pa.L.Rev. 1076, 1076 (1979) ("putative economic gains should not be the exclusive or decisive factors in resolving antitrust controversies”); Lande, Wealth Transfers as the Original and Primary Concern of Antitrust: The Efficiency Interpretation Challenged, 32 Hastings L.J. 65 , 68 (1983) ("Congress passed the antitrust laws to further economic objectives, but primarily objectives of a distributive rather than of an efficiency nature”); see generally Symposium: The Goals of Antitrust: A Dialogue on Policy, 65 Colum.L.Rev. 33 (1965).

. I do not think that Reiter v. Sonotone, 442 U.S. 330 , 343, 99 S.Ct. 2326, 2333 , 60 L.Ed.2d 931 (1979), answers the question. There, the Court was asked to decide whether consumers who purchase goods for their own use have standing to sue under section 4 of the Clayton Act. It is thus hardly surprising that the Court answered the question by saying that the floor debates suggest that Congress designed the Sherman Act as a “consumer welfare prescription." Id. Moreover, even if one thinks that the Court intended to exclude all other considerations, the phrase "consumer welfare” surely includes far more than simple economic efficiency.

. I am also somewhat troubled by the panel’s statement that "[ojnce it is clear that restraints can only be intended to enhance efficiency rather than to restrict output, the degree of restraint is a matter of business rather than legal judgment.” Pan. op. at 229 n. 11. I understand the panel’s position to be that the breadth of the restraint is a matter to be analyzed in determining whether the restraint is ancillary in the first place. See Pan. op. at 224-25. If the restraint is not ancillary, it is a naked restraint, subject to the per se rule of illegality.

. Although both of these examples involve the Court’s balancing of potential procompetitive virtues against a market power presumption of anticompetitiveness, the panel’s argument that genuine balancing is technically impossible would seem to apply there as well.

. In addition to my doctrinal difficulties with the panel’s approach, I am also concerned about its heavy reliance on the 6% figure representing Atlas’ share of the national market for intercity transport of used household goods. Although the panel concludes that the national market was not sufficiently contested as the only relevant market to establish a genuine issue of fact, the fact remains that the exclusivity of that market was indeed contested before the District Court and the District Court made no findings on the issue. Conceding that the national market was a relevant market, plaintiffs went on to explain that

within the national market, there are product submarkets of new and used household goods shipments and submarkets divided according to the type of shipment, including national account, government and c.o.d. shipments, and including long-haul and short-haul shipments. Geographically, markets are national, regional and local.

Plaintiffs’ Memorandum in Opposition to Defendant's Motion for Summary Judgment [hereinafter "Plaintiffs’ Opposition”] at 53-60. Plaintiffs produced affidavits and other evidence, see Fed.R.Civ.P. 56(e), for the proposition that these were separate markets, see "X’s" Response to Second Interrogatory 43, and that in some of the geographic markets, Atlas' market shares were 30% and 40%, and in one large geographic market, 60%. Deposition of "Y" at 68; see generally Plaintiffs’ Opposition at 53-60.

The panel today holds that such affidavits and evidence are not sufficient to establish that the existence of submarkets is a genuine issue. It fails to explain just how detailed the evidence of submarkets must be to withstand a defendant’s motion for summary judgment, but creates the distinct impression that plaintiffs’ proof of such markets must be substantial and comprehensive indeed.