Opposition Brief — Axis, S. p. A. v. Micafil, Inc.

eUprsein’ UOUIT, U.S,

gee 4 ye

Pe JUL 27 1989

: j SEPH F. SPANIOL. J

No. 88-2095 ~~” JOSE ‘renee IR.

——— =

IN THE

Supreme Court of the United States

OCTOBER TERM, 1988

>

AXIS, S.p.A.,

Petitioner,

—V.—

MICAFIL, INC.,

Respondent.

ON PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE SIXTH CIRCUIT

RESPONDENT?’S BRIEF IN OPPOSITION

MICHAEL J. LEVIN

(Counsel of Record)

ROGER BOYLE

BOYLE, VOGELER & HAIMES

1270 Avenue of the Americas

New York, New York 10020

(212) 265-5100

Counsel for Respondent

a

i

QUESTION PRESENTED

Does an Italian manufacturer of machines, foreclosed from

selling in the United States market because it lacks a necessary

patent, suffer antitrust injury when a patent holder allegedly

lessens competition in the market by acquiring one of two of its

available licensees, even though the Italian company suffered

no loss from the alleged lessening of domestic competition?

‘i

RULE 28.1 LISTING

Respondent Micafil, Inc., a Delaware corporation, is a

wholly owned subsidiary of ASEA Brown Boveri, Inc., a Dela-

ware corporation, which is a wholly owned subsidiary of ABB

ASEA Brown Boveri, Ltd., a Swiss corporation, 50% of the

stock of which is owned, equally, by two publicly traded corpo-

rations, ASEA AB, a Swedish corporation, and BBC Brown,

Boveri & Co., Ltd., a Swiss corporation. Respondent is affili-

ated with Micafil, A.G., a Swiss corporation, which is an indi-

rect wholly-owned subsidiary of ABB ASEA Brown Boveri,

Ltd., the Swiss corporation referred to above.

ill

TABLE OF CONTENTS

DUET PRESENTED .. 0.0.2... cc cccccceeseees

«re

mee Or AUITMIORITIES., ...........00cccceesees

STATEMENT OF THE CASE..............0.00000:

REAswvis FOR DENYING THE WRIT.............

I. The Court of Appeals’ Decision is in Harmony

With This Court’s Decisions in Brunswick,

Ee |

Il. The Court of Appeals’ Decision is Fully Consis-

tent With the Decisions of Other Circuits .....

III. The Court of Appeals’ Decision, Consonant

With Existing Law, Does Not Present an Impor-

tant Issue Requiring This Court’s Review .....

EE CAGE ake e ceded whee cheesedececvscenes

PAGE

12

14

iv

TABLE OF AUTHORITIES

Cases PAGE

Alberta Gas Chemicals Ltd. v. E.I. Du Pont de Nemours

& Co., 826 F.2d 1235 (3rd Cir. 1987), cert. denied,

Sceositen’ EAGIS. cuandancy, EE ee a ED co eke es 6, 9, 12

Bayou Bottling, Inc. v. Dr. Pepper Co., 725 F. 2d 300

(Sth Cir.), cert. denied, 469 U.S. 833 (1984) ...... 6, 10, 12

Blue Shield of Virginia v. McCready, 457 U.S. 465 (1982) 8

Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S.

EF TAO TEs be ad ER RRR Eee eee an passim

Cargill, Inc. v. Monfort of Colorado, Inc., 479 U.S. 104

Ee nba NASALS RRR EMS ORE LS EERE RRS REN Passim

Fishman v. Estate of Wirtz, 807 F.2d 520 (7th Cir. 1986) 11

Helix Milling Co. v. Terminal Flour Mills Co., 523 F. 2d

1317 (9th Cir. 1975), cert. denied, 423 U.S. 1053 (1976) 1]

moss v. Mfasyat, 417 U.S. GOO (1978)... cece aesess 12

State of South Dakota v. Kansas City Southern Indus-

tries, Inc., 1989-1 Trade Reg. Rep. (CCH) 4 68,635

eee a es OE os ban ee cae ee hence 10, 12

United States v. Aluminum Co. of America, 377 U.S.

BEE EE See CACC ce aCe renee e le eee et 9

United States v. Falstaff Brewing Corp., 410 U.S. 526

SEMPER caret eee CEE RN TTT EE CRO ee 9

United States v. Marine Bancorporation, 418 U.S. 602

co | pany Cera geg hea ra gee wer exes akg Sei meagre tng 9

ber

PAGE

Statutes, Rules

seareen ct, © EL. 1S US kkk vk 4, 10

ermaam Act, § 2. 19 WA Ee 45 00 8c eases 10

Coton Act, S 4, 33 USS OS es esos xa tuner :

Ciytom Act, 87). 49 SG Oe ci csvccssamuse 4,7, 9, 10

Cimptom Act, 4 16, 95 U1. 3.0. § B6 ccc csaccccxiees 2,5

Rule 12(b)(6), Federal Rules of Civil Procedure ....... 5

IN THE

Supreme Court of the United States

OCTOBER TERM, 1988

No. 88-2095

> =

AxIS, S.p.A.,

Petitioner,

aiid: aan

MICAFIL, INC.,

Respondent.

ON PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE SIXTH CIRCUIT

>.

RESPONDENT?’S BRIEF IN OPPOSITION

Respondent Micafil, Inc. respectfully requests this Court to

deny the Petition For Writ of Certiorari seeking to review the

Judgment and Opinion of the United States Court of Appeals

for the Sixth Circuit.

STATEMENT OF THE CASE

A Whit of Certiorari should be denied since the Court of

Appeals’ decision is consistent with decisions of this Court,

does not conflict with decisions of other Circuits and does not

raise an issue of general effect or application.

——————eoOO

>

-

This case involves an Italian manufacturer of machinery,

foreclosed from selling in the United States because it lacks a

necessary patent license. It seeks to recover treble antitrust

damages from a patent holder which acquired one of its own

two domestic licensees.

Both the District Court and the Court of Appeals held that

the Italian manufacturer, petitioner Axis, S.p.A., had not suf-

fered ‘‘antitrust injury’’ and could not assert an antitrust claim.

Both courts reasoned that the injury which Axis complains of —

its inability to sell machines in the United. States—was attribut-

able to the patent barrier, and not to any lessening of

competition within the United States, the alleged violation of

the antitrust laws.

The courts below observed that prior to 1985 there were three

foreign manufacturers of machines subject to the patents

(armature winding machines), Axis, Micafil, A.G. (an affiliate

of Respondent Micafil, Inc.) and a Japanese manufacturer,

Odawara. All were foreclosed from the American market by the

patent barrier. Micafil and Odawara entered the United States

market by making acquisitions of patent holders or licensees,

which Axis also had the opportunity to do.

In holding that under these circumstances Axis had not suf-

fered ‘‘antitrust injury’’, the Court of Appeals, as well as the

District Court, followed this Court’s teachings in Brunswick

Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477 (1977), and

Cargill, Inc. v. Monfort of Colorado, Inc., 479 U.S. 104 (1986),

that under Clayton Act §§ 4 and 16a putative antitrust plaintiff

must show that his injury was ‘‘of the type the antitrust laws

were intended to prevent and that flows from that which makes

the defendants’ acts unlawful.’’ 429 U.S. at 489; 479 U.S. at

109. Under Brunswick and Cargill, Axis’ injury did not flow

‘*from that which [made Respondent’s] acts unlawful’’—the

lessening of competition within the United States—but from the

patent barrier itself.

In seeking Certiorari, Axis essentially argues that the Court

of Appeals erred in its interpretation of Brunswick and Cargill,

positing instead an excruciatingly narrow reading of those deci-

sicns. In doing so, Petitioner misconstrues the proper purpose

of a petition for writ of certiorari, which is not to seek the cor-

rection of lower courts’ errors.

Axis also urges in this Court (as it did below) a case which is

significantly different from that presented in the complaint,

and on that basis claims that it presents matters of great general

import meriting this Court’s review. While for present purposes

the facts alleged in the complaint must be taken as true (the

Complaint having been dismissed for failure to state a claim),

Axis goes far beyond those allegations in attempting to make a

case in this Court.

The complaint alleges that prior to 1985, there were three for-

eign manufacturers of armature winding machines, all fore-

closed from the United States market because of their lack of

U.S. armature winding machine patents or licenses: Axis, Mica-

fil, A.G., and Odawara. At that time, there were four manufac-

turers of armature winding machines in the United States under

the patent umbrella: Globe Tool & Engineering Company

(‘‘Globe’’) and Possis Corporation (‘‘Possis’’), which had

granted each other non-exclusive licenses to make armature

winding machines with patented wire cutting methods, and two

licensees under Possis’ patents, Ott-A-Matic, Inc. (‘‘Ott’’) and

Mechaneer, Inc. (‘‘Mechaneer’’). Prior to 1985, all three for-

eign manufacturers had attempted to obtain licenses from Pos-

sis, and all had been rebuffed.

In July 1985, Respondent Micafil, Inc. purchased substan-

tially all of the assets of the motor equipment division of Possis,

which included the various patents and patent licenses covering

armature winding machines. Axis then learned that Respondent

Micafil was attempting to purchase Mechaneer, and its presi-

dent approached Mechaneer to determine whether it was availa-

ble for purchase. Mechaneer’s principals refused to discuss a

purchase by Axis since negotiations with Micafil had progressed

to the point that a sale was likely. In its complaint, Axis alleges

that it was willing to pay a price for Mechaneer equal to that

which Micafil was offering, but Axis does not allege that it

4

made an offer to purchase Mechaneer, at that price or a greater

one.

In September 1985, Micafil purchased substantiaily all of the

assets of Mechaneer for approximately $1 million, including the

armature winding machine patent licenses. Axis claims that

Possis’ share of the American market for armature winding

machines was approximately 40% and that Mechaneer’s share

of the market was at least 10%.

Subsequently, Odawara entered the United States market for

armature winding machines by purchasing Ott. There is no alle-

gation that Axis attempted to acquire Ott or attempted to

acquire the other patent holder, Globe.

Axis commenced this action in July 1987 alleging that Micafil

had violated Sherman Act, § 1, 15 U.S.C. § 1, and Clayton

Act, § 7, 15 U.S.C. § 18, by acquiring Mechaneer because the

acquisition brought about a substantial reduction of competi-

tion within the United States market for armature winding

machines. Axis alleged that Micafil’s acquisition of Mechaneer

had raised substantially the ‘‘barriers to entry’’ into the Ameri-

can market for all potential manufacturers of armature winding

machines, particularly Axis, and had prevented Axis’ entry into

the market. Axis further alleged (Complaint, § 20) that ‘‘the

Possis patents now owned by Micafil’’ are ‘‘[t]the only thing[s]

preventing’ Axis’ entry into the United States market. Axis

asserted that but for Micafil’s acquisition of Mechaneer Axis

would have acquired Mechaneer, a patent license and the right

to sell its machines in the United States. While Axis states in its

Petition (Pet. at 5, ftnt. 1) that ‘‘Micafil ensured that Axis

could not enter by refusing to grant a license to Axis under the

Possis patents which it had previously acquired,’’ the complaint

contains no such allegation.

Similarly, the Complaint does not allege, as the Petition sug-

gests (p. 5), that Micafil’s acquisition of Mechaneer violated § 7

of the Clayton Act because it eliminated ‘‘the substantial

increase in competition that Axis would have brought to the

U.S. market.’’ (Pet. at 5) Had Axis acquired Mechaneer, of

course, it would not have increased competition, for there

5

would have remained four manufacturers in the United States

market, the same number there had been prior to Micafil’s

acquisition of Mechaneer.

Micafil moved to dismiss the complaint under Fed. R. Civ. P.

12(b)(6) for failure to state a claim on the grounds that, even if

its acquisition of Mechaneer had violated the antitrust laws,

Axis had suffered no ‘‘antitrust injury’’ as a result, under this

Court’s decisions in Brunswick and Cargill. Clayton Act §§ 4

and 16, 15 U.S.C. §§ 15, 26. Specifically, Micafil argued that

Axis’ ‘‘injury’’—its exclusion from the United States market—

was due to the existence of the patent barrier, as Axis admitted

in its complaint, and did not ‘‘flow[s] from that which makes

defendants’ acts unlawful.’’, Brunswick, 429 U.S. at 489. The

District Court agreed, dismissing the complaint for failure to

allege antitrust injury, and the Court of Appeals affirmed on

the same grounds.

While Axis in its Petition states that the Court of Appeals

affirmed dismissal of the complaint ‘‘in a brief conclusion rely-

ing on dictum,’’ (Pet. at 7) the Court of Appeals’ decision care-

fully analyzed the complaint, this Court’s decisions, its own

and those of the other Circuits, giving close attention to Axis’

arguments. Indeed, all the arguments which Axis raises here

were resolved by the Court of Appeals.

Noting that Axis admits in its complaint that the patent bar-

rier foreclosed its entry into the market, the Court of Appeals

ruled that Axis’ exclusion from the market did not arise because

Micafil’s acquisition of Mechaneer ‘‘brought about'a substan-

tial reduction of competition in the market.’’ 870 F.2d at 1106.

(Emphasis supplied) Thus, the Court of Appeals found that

Axis’ exclusion from the market did not ‘‘flow’’ from ‘‘that

which made the defendants’ acts unlawful,’’ as required by

Brunswick and Cargill.

The litmus test applied by the Court below to determine

whether the injury ‘‘flowed’”’ from ‘‘that which made the defen-

dants’ acts unlawful’’ was whether Axis’ injury would have

been suffered irrespective of the illegality of the challenged

activity. Here, Axis’ injury arose because it lacked patents, not

6

because of the alleged illegality. ‘‘. . . Axis would have suf-

fered the same injury if Mechaneer had remained in business or

if some entity other than Micafil had purchased Mechaneer.’’

870 F.2d at 1111. Thus, Axis’ alleged injury ‘‘did not ‘flow

from’ the element of the acquisition that made it unlawful.’’

870 F.2d at 1112. In so holding, the Court of Appeals expressly

relied on this Court’s holdings and reasoning in Brunswick and

Cargill, and decisions reaching the same result in analogous

cases by the Third Circuit, in Alberta Gas Chemicals Ltd. v.

E.I. Du Pont de Nemours & Co., 826 F.2d 1235 (3rd Cir. 1987),

cert. denied, U.S. , 108 S.Ct. 2830 (1988), and the

Fifth Circuit, in Bayou Bottling, Inc. v. Dr. Pepper Co., 725

F.2d 300 (Sth Cir.), cert. denied, 469 U.S. 833 (1984).

REASONS FOR DENYING THE WRIT

The Court of Appeals’ decision faithfully followed this

Court’s teachings in Brunswick and Cargill and is fully conso-

nant with the decisions of every other Circuit which has

addressed the requirement of ‘‘antitrust injury.’’ Even more,

although the petition fails to reveal it, the rule applied and rea-

soning of the Sixth Circuit below are identical with those in sim-

ilar cases of the Third, Fifth and Eighth Circuits. Indeed, Axis

is so bereft of authority that, in its attempt to show a conflict

between the Circuits, it has turned to a pre-Brunswick case,

which did not even address ‘‘antitrust injury,’’ and an inappo-

site decision of the Seventh Circuit.

Nor is this case one of broad applicability which has an effect

far beyond the immediate parties. No ‘‘new rule’’ was created

by the Court below, as Axis contends (Pet. at 8). Indeed, just as

Axis’ argument that the Court of Appeals erred in construing

Brunswick rests upon an unreasonably narrow reading of that

case, its attempt to make this case one of sufficient universiality

to merit this Court’s review bends the facts of the case and the

decision of the Court of Appeals beyond recognition.

This is not a case ‘‘where there is a substantial decrease in

competition and the plaintiff is one whose injury is the exclu-

7

sion from the market as a direct result of the acquisition.’’ (Pet.

at 8). This is a case where an Italian company, foreclosed from ~

the market because of a patent barrier, remained in that posi-

tion after one of two available patent licensees in the market

was acquired, allegedly in violation of the antitrust laws. The

exclusion from the market pre-existed the challenged acquisi-

tion of one of the patent licensees, and also continued after the

other patent licensee—which Axis could have acquired and by

that entered the market—was acquired by Axis’ other competi-

tor, Odawara. The Court of Appeals’ holding manifestly has

not ‘‘created a rule of antitrust injury so narrow that it could

have an adverse impact on most antitrust actions.’’ (Pet. at 8).

To the contrary, it is self-evident that the very uniqueness of

these facts make this case an unlikely candidate for general

application, and thus an inappropriate one for this Court’s

review.

I. THE COURT OF APPEALS’ DECISION IS IN HAR-

MONY WITH THIS COURT’S DECISIONS IN BRUNS-

WICK, CARGILL AND McCREADY

The foundation of the Court of Appeals’ decision was this

Court’s rule in Brunswick that a putative private antitrust plain-

tiff must plead and prove ‘‘antitrust injury, which is to say

injury of the type the antitrust laws were intended to prevent

and that flows from that which makes defendants’ acts unlaw-

ful.’? (emphasis in original) 429 U.S. at 489. The injury to

plaintiffs in Brunswick may have been caused by the continued

existence of the failing bowling alleys, but it did not ‘‘flow

from’’ the lessening of competition which made the failing

bowling alleys’ acquisition by the dominant Brunswick unlaw-

ful under Section 7 of the Clayton Act. As this Court noted, the

plaintiffs ‘‘would have suffered the identical ‘loss’—but no

compensable injury—had the acquired centers instead obtained

refinancing or been purchased by ‘shallow pocket’ parents

. .’ 429 U.S. at 487.

Thus, the Court of Appeals’ decision below, finding that

Axis has not suffered antitrust injury here is not merely consis-

tent with this Court’s reasoning in Brunswick—it is precisely

YZ

the same—‘‘Axis would have suffered the same injury if

Mechaneer had remained in the business or if some entity other

than Micafil had purchased Mechaneer.’’ 870 F.2d at 1111 (Pet.

14a). Certainly, the Court of Appeals created no new rule or

reasoning.

Axis’ narrow reading and its attempt to reduce Brunswick to

the self-evident proposition that the antitrust laws do not pro-

tect a competitor from increased competition (Pet. at 8), ignore

entirely this Court’s analysis and presumes that this Court

would have granted certiorari and rendered its decision only to

restate the obvious. There is nothing in Cargill or Blue Shield of

Virginia v. McCready, 457 U.S. 465 (1982) which supports

Axis’ argument that Brunswick was so limited. To the contrary,

this Court in Cargill began its analysis by reaffirming Bruns-

wick and its rule that an antitrust injury must be one ‘‘that

flows from that which makes the defendants’ acts unlawful.’’

479 U.S. at 109.

Axis’ reference (Pet. at 11) to this Court’s statement in

Cargill (479 U.S. at 121) that it declined the Government’s ami-

cus curiae request to adopt a ‘‘per se’’ rule ‘‘denying competi-

tors standing to challenge acquisitions on the basis of predatory

pricing theories,’’ does not aid Axis in its position that it has

suffered antitrust injury. Even if predatory conduct were to be

treated differently, that has no bearing here. Axis’ complaint

makes no allegation of any predatory practice by Micafil.

The Court of Appeals decision is consonant as well with

McCready. This Court stated there ‘‘. . . we agree with peti-

tioners that the relationship between the claimed injury and that

which is unlawful in the defendant’s conduct, as analyzed in

Brunswick, is one factor to be considered in determining the

redressability of a particular form of injury under § 4.’’ 457

U.S. at 483, n.19. That this Court found the McCready plain-

tiff had suffered antitrust injury does not advance Axis’ argu-

ment. Unlike Axis, Ms. McCready was in the market as a

consumer whose choice of professionals to render service had

been unlawfully limited by an agreement to restrain trade.

9

Unlike Axis, her injury ‘‘flowed from that which made the

defendants’ acts unlawful.”’

Axis’ statement (Pet. at 12) that the Court of Appeals

‘tignored’’ United States v. Aluminum Co. of America, 377

U.S. 271 (1964), United States v. Falstaff Brewing Corp., 410

U.S. 526 (1973) and United States v. Marine Bancorporation,

418 U.S. 602 (1974), is misplaced. None of those cases even sug-

gested that a private party, outside the market, can bring a pri-

vate antitrust action for a lessening of competition within the

market or for the foreclosure of an increase of competition

within the market. The cases cited were actions by the Govern-

ment challenging mergers which lessened competition in viola-

tion of Clayton Act § 7, they pre-dated Brunswick and did not

address antitrust injury or standing.

Il. THE COURT OF APPEALS’ DECISION IS FULLY

CONSISTENT WITH THE DECISIONS OF OTHER

CIRCUITS

Every Circuit which has addressed the question of ‘‘antitrust

injury’’ in a factually pertinent case has come to the same con-

clusion as did the Court of Appeals for the Sixth Circuit in this

case. The ‘‘conflict’’ which Axis claims to find among the cir-

cuits is simply non-existent.

In Alberta Gas Chemicals, Ltd. v. E.I. Du Pont de Nemours

& Co., 826 F.2d 1235 (3d Cir. 1987), cert. denied,

U.S. , 108 S.Ct. 2830 (1988), a case expressly relied on by

the Court of Appeals below but passed over in silence by Axis,

the Third Circuit affirmed the dismissal of a claim, where as

here, plaintiff’s injury would have occurred irrespective of the

illegality of the challenged acquisition. There, a producer of

methanol challenged the acquisition of Conoco by Du Pont, the

largest producer of methanol in the United States, alleging that

the acquisition violated Clayton Act Section 7 because it

reduced competition in the sale of methanol. Plaintiff claimed

two injuries. First, aftet Du Pont acquired Conoco, Conoco no

longer purchased methanol from plaintiff and plaintiff lost the

profits from those lost sales. Second, plaintiff alleged that after

10

the acquisition Conoco abandoned plans to stimulate the

demand for methanol, pending completion of its own methanol

plant, by purchasing methanol from plaintiff and others and

selling it on the merchant market. Plaintiff claimed that Con-

oco’s abandonment of the program to generate additional

demand for methanol caused plaintiff to lose the methanol sales

that that demand would have created.

The Third Circuit, following Brunswick, found that plaintiff

had not suffered an antitrust injury because its injuries did not

flow from ‘‘that which makes the defendants’ acts unlawful.’’

826 F.2d at 1241. In reasoning identical to the Court of Appeals

in this case, the Third Circuit expiained, ‘‘That is clear because

the same harm would have occurred had any acquirer decided

to curtail Conoco’s production and marketing plans. For exam-

ple, a non-methanol producing company whose merger would

not pose antitrust problems, . . .’’ 826 F.2d at 1241.

The Fifth Circuit, in Bayou Bottling, Inc. v. Dr. Pepper Co.,

725 F.2d 300 (Sth Cir.), cert. denied, 469 U.S. 833 (1984), held

that a soft drink wholesaler and distributor did not suffer anti-

trust injury when a bottler it was seeking to acquire was

acquired instead by a competitor, allegedly in violation of Sec-

tion 7 of the Clayton Act and Sections 1 and 2 of the Sherman

Act. As Axis does here, plaintiff there claimed ‘‘an antitrust

injury because it was prevented from acquiring [the target], an

acquisition which would have improved its business position

and increased its profits.’ 725 F.2d at 304. And just as the

Sixth Circuit below rejected that argument by Axis here, the

Fifth Circuit in Bayou Bottling stated, ‘‘this assertion of aunti-

trust injury is foreclosed by the holding in Brunswick.’’ 725

F.2d at 304. The Fifth Circuit’s reasoning and application of

Brunswick were the same as the Sixth Circuit’s here: ‘‘Bayou

would have suffered the identical loss of sales, and economies

of scale if [the target] had retained its operation or if he had

been sold to a third party.’’ 725 F.2d at 304.

And recently, the Eighth Circuit, in State of South Dakota v.

Kansas City Southern Industries, Inc., 1989-1 Trade Reg. Rep.

(CCH) § 68,635 (8th Cir. June 29, 1989), held that the State of

1]

South Dakota had not suffered antitrust injury and had no

standing to challenge a conspiracy among railroads to drive out

of business a coal slurry pipeline with which the State had a

water supply contract. The injury claimed was the loss of profit

on the water supply contract which the pipeline had to termi-

nate because of the conspiracy.

The Eighth Circuit found that South Dakota was not an

actual participant in the coal transportation market, just as

Axis was not an actual participant in the United States armature

winding machine market. Jd. at 61,352. Interpreting Brunswick

in exactly the same fashion as the Sixth Circuit did in this case,

the Eighth Circuit held that while South Dakota may have suf-

fered injury by defendants’ anti-competitive actions, South

Dakota’s ‘‘injuries did not result from the anti-competitive

nature of these practices.’’ Jd. at 61,353 (emphasis supplied).

The Eighth Circuit’s reasoning also was exactly the same as the

reasoning of all other Circuits on the question. ‘‘The loss of

future revenues clearly flowed from the cancellation of the con-

tract rather than from injury to competition in the market in

which it was involved. [citations omitted]. It is evident that

South Dakota would have suffered an identical loss in the event

that the [defendant] railroads had done nothing and [the pipe-

line] had simply decided to terminate the SDCD/ETSI contract

for some other reason.”’ Jd. at 61,353.

In short, far from there being a conflict between the Circuits

on the issue presented in this case, they have unanimously

applied the same reasoning, and interpreted Brunswick in pre-

cisely the same way, as did the Sixth Circuit here.

Axis’ authority to support its contention that there is a con-

flict among the Circuits is the 1975 pre-Brunswick decision in

Helix Milling Co. v. Terminal Flour Mills Co., 523 F.2d 1317

(9th Cir. 1975), cert. denied, 423 U.S. 1053 (1976) and the Sev-

enth Circuit’s factually inapposite decision in Fishman v. Estate

of Wirtz, 807 F.2d 520 (7th Cir. 1986). Helix did not even

address standing or ‘‘antitrust injury’’, but accepted a ‘‘but

for’? causation theory—a theory expressly rejected in Bruns-

wick. (**. . . [an antitrust plaintiff] must prove more than

12

injury causally linked to an illegal presence in the market.’’ 429

U.S. at 489).

In Fishman, a purchaser of the Chicago Bulls professional

basketball team could not obtain League approval of the sale

because of defendants’ predatorily motivated refusal to deal

which denied plaintiff use of an arena. Unlike Axis here, who

was free to compete at all times for the purchase of Mechaneer

and Ott (and thus enter the United States market) the predatory

efforts of the Fishman defendants ‘‘effectively cut-off all com-

petition for the acquisition of the Bulls franchise and injured

plaintiffs as a result.’’ 807 F.2d at 533. There is not the slightest

suggestion that a plaintiff who could freely compete for entry

into the market, and who is not the object of predatory prac-

tices, would suffer antitrust injury.

Ill. THE COURT OF APPEALS’ DECISION, CONSO-

NANT WITH EXISTING LAW, DOES NOT PRESENT

AN IMPORTANT ISSUE REQUIRING THIS COURT'S

REVIEW

While admittedly important to the parties, it is respectfully

submitted that the issue of whether Axis has suffered ‘‘antitrust

injury’’, as defined by three decisions of this Court, and by the

uniform interpretation of those decisions by the Third, Fifth,

Sixth, and Eighth Circuits, does not present an issue of suffi-

cient general effect or application to merit a fourth pronounce-

ment by this Court. Axis does not urge that the Brunswick rule

ought to be reversed or modified. To the contrary, Axis does

not question the rule itself (Pet. at 9-10), but only argues that

the Court of Appeals misinterpreted shasta and ‘‘created’’

a new, narrow rule.

The correctness or erroneousness of the Court of Appeals, of

course, is an insufficient ground upon which to seek this

Court’s exercise of its certiorari jurisdiction. Ross v. Moffitt,

417 U.S. 600, 616-17 (1974). However, the Sixth Circuit did not

create a new rule in this case, and that is demonstrated beyond

question by the congruency of its reasoning and result with not

only Brunswick and Cargill, but with the other Circuits’ deci-

13

sions in Alberta Gas, Bayou Bottling aud Kansas City Southern

Industries. There is, in short, no novel or important principle of

law and no unsettled points of great public interest in this case.

Certainly such an issue is not raised by Axis’ argument (Pet.

14-16) that it is ‘‘the most appropriate plaintiff’’ to challenge

Micafil’s acquisition of Mechaneer. Whether a party is an

‘‘appropriate’’ antitrust plaintiff is a question of antitrust

standing, and, as such, it was not reached by the Court of

Appeals because Axis has not suffered antitrust injury. As this

Court said in Cargill, ‘‘a showing of antitrust injury is neces-

sary, hyt not always sufficient, to establish standing under § 4

because a party may have suffered antitrust injury but may not

be a proper plaintiff under § 4 for other reasons.’’ 479 U.S. at

110 n.5.

Faced with a clear rule in Brunswick, consistently applied by

the Courts of Appeal to achieve the same results, Axis’ argu-

ment boils down to the contention that the Court below

required that Axis, ‘‘must show that the same ‘injury’ could not

have resulted from any set of possible facts not involving an

antitrust violation.’’ (Pet. at 17). That is not what the Court of

Appeals required, and it is a gross misstatement of the decision

below. The Court of Appeals required no more than what is

required in Brunswick—that a putative private antitrust plain-

tiff show that the injury it suffered was an injury which was

attributable to the illegality of the defendants’ acts, and not

merely iraceable to the acts themselves.

Axis’ injury here occurred irrespective of the reduction of

competition within the United States in the sale of armature

winding machines. That does not mean that another party,

which may have been affected by the alleged reduction in com-

petition, could not show antitrust injury. As the Court of

Appeals recognized (870 F.2d at 1111-1112) a consumer, forced

to pay more for armature winding machines because of a reduc-

tion of competition in the sales of such machines, might have

such an injury, for that injury would ‘‘flow from that which

made the defendants’ acts unlawful.’’ The Court of Appeals

14

required no more than Brunswick required, and as such did no

more than faithfully follow this Court's teaching in Brunswick.

CONCLUSION

The Court of Appeals properly followed and applied Bruns-

wick and Cargill, and its decision agrees with that of every other

Circuit which has applied Brunswick and Cargill in factually

similar cases. No ‘‘new rule’’ of antitrust injury was created,

only faithful application of the existing rule.

The Petition for Writ of Certiorari to the United States Court

of Appeals for the Sixth Circuit should be denied.

Respectfully submitted,

MICHAEL J. LEVIN

(Counsel of Record)

ROGER BOYLE

BOYLE, VOGELER & HAIMES

1270 Avenue of the Americas

New York, New York 10020

(212) 265-5100

Counsel for Respondent

July 26, 1989

b g

° 5%

: + a - ,

_ 5. uv ~ »

- A -

‘ {

: e

. Py co

2

* mit ‘ n 5

’ * °

2 , - 3: ‘. pe {

: / vba d

.

. . 7 ~~

7 i )

° ee “. oo

“.

he? Se

e

, s

- /

{ ?

i bd a -= o .

. i m7 Z ‘

.

cs ,

- ‘ j /

> a /

/

‘ a ‘ ,

: .

.

, . :

. -f ,

‘

7 *e -

je ft P :

: .

«