# Reply Brief — Axis, S. p. A. v. Micafil, Inc. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385002_1581%3A3 ## Record - **Collection:** Supreme Court brief - **Document type:** Reply Brief - **Published:** January 1, 1989 - **Citation:** 493 U.S. 823 ## Text No. 88-2095 IN THE Sipreme Court of the United States OCTOBER TERM, 1988 > AXIS, S.PA., Petitioner, —vV.— MICAFIL, INC., Respondent. REPLY BRIEF FOR PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT GORDON B. SPIVACK DAVID H. MARKS* COUDERT BROTHERS 200 Park Avenue New York, New York 10166 (212) 880-4400 Attorneys for Petitioner Axis, S.p.A. *Counsel of Record TABLE OF CONTENTS Table of Authorities li TABLE OF AUTHORITIES Cases: Blue Shield of Virginia v. McCready, 457 U.S. 465 (1982) Brunswick Corp. v. Pueblo Bowl-O-Mat Inc., 429 U.S. O77 (ISTO) as aac nase eaaee ee eee eee Cargill, Inc. v. Monfort of Colorado, Inc., 479 U.S. 104 (TSG) 3. cc ncac cauna awe ceew eee ee ee Coniey ¥. GIDSON, 3395 Uses SE ETT cc cece ce Fishman v. Estate of Wirtz, 807 F.2d 520 (7th Cir. 1986) Helix Milling Co. v. Terminal Flour Mills Co., 523 F.2d 1317 (9th Cir. 1975), cert. denied, 423 U.S. 1053 (1976) Klor’s, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207 (1959) 5 occ éns sdeasne cae beste etaee eee Schewer v. Rhodes, 416 U.S. 232 (19 1a) sok ci vcn wees State of South Dakota v. Kansas City Southern Indus- tries, Inc., 1989-1 Trade Cas. (CCH) 68,635 (8th Cir., June 29, TSOP) vcd vavdessdusvnenee ee PAGE 3, 4 Ww BN Ww Lo] lw IN THE Supreme Court of the United States OCTOBER TERM, 1988 No. 88-2095 _> AXIS, S.p.A., Petitioner, ee MICAFIL, INC., Respondent. > REPLY BRIEF FOR PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT 1. Antitrust injury is a requirement in every antitrust private right of action. The target of a horizontal price fixing agree- ment or a boycott has rarely found proof of antitrust injury dif- ficult. The court of appeals’ decision in this action, however, would create a frequently insurmountable hurdle for even such ‘*cjassic’’ plaintiffs. Thus, as noted in the Petition, the lower court held that the reason Axis did not suffer antitrust injury was solely because it could have suffered the same injury under hypothetical facts, contrary to the facts alleged in the com- plaint, that did not include any antitrust violation. Nowhere in Micafil’s response to the petition does Micafil contest this description of the test of antitrust injury imposed by the court of appeals in this action. Indeed, Micafil admits as much in its description of the appellate court’s hoiding (Br. in 2 Opp. at 6). While Micafil refers to a variety of factors and cases that the court of appeals itself noted, they do not limit the stan- dard to determine antitrust injury. That standard was the only way in which the court of appeals could affirm the dismissal of Axis’ action. Simply put, the complaint alleged that Axis would not have been excluded by the patents but for the illegal acquisi- tion. That acquisition, foreclosing Axis’ entry into the U.S. winder machine market, violated the Sherman Act and the Clayton Act. It was an unreasonable restraint of trade and sub- stantially lessened competition in the U.S. market for winder machines.’ Certainly neither Micafil nor the lower court contends that the patent licenses which Micafil illegally acquired with the pur- pose and effect of foreclosing Axis’ entry into the U.S. market provide any non-statutory antitrust immunity. The patents are like any other necessary asset” or license, acquisition of which can violate both the Sherman Act and the Clayton Act. 2. Nor can Micafil deny the applicability of this definition of antitrust injury to all Sherman Act cases, not just acquisitions. The court of appeals clearly did not so restrict the definition | Micafil’s references to what ‘‘the Complaint does not allege’’ (Br. in Opp. at 4) imposes a standard for review of Rule 12(b)(6), Fed. R. Civ. P., dismissals that this Court rejected in Conley v. Gibson, 355 U.S. 41, 45-46 (1957); Scheuer v. Rhodes, 416 U.S. 232, 236-37 (1973). The complaint clearly alleges that the acquisition foreclosed and continues to foreclases Axis’ entry into the U.S. market. In addition, the allega- tions of the complaint that competition was substantially lessened in the U.S. market is certainly broad enough to include an allegation that competition would have been increased if Axis had acquired Mechaneer by substituting a fourth major innovative competitor for an underfinanced minor competitor. This Court’s recognition of such a principle, as set out in cases cited at Petition at 12, is undisputed. While those cases may each have been Government actions, they clearly support the antitrust significance of Mechaneer as an entry vehicle for Axis. 2 E.g., the flour mill in Helix Milling Co. v. Terminal Flour Mills Co., §23 F.2d 1317 (9th Cir. 1975), cert. denied, 423 U.S. 1053 (1976). and one of the cases cited by Micafil is itself a Section 1 Sher- man Act case involving alleged sham litigation.’ Micafil attempts to distinguish both Cargill, Inc. v. Monfort of Colorado, Inc., 479 U.S. 104 (1986), and Fishman v. Estate of Wirtz, 807 F.2d 520 (7th Cir. 1986), on the ground that those cases involved allegations of ‘‘predatory efforts’’ which are not alleged by Axis (Br. in Opp. at 8, 12). But, Micafil provides no reasoned basis, and cites no case, for requiring the plaintiff alleging predatory conduct under Section 2 of the Sherman Act to meet a different (and lesser) test of antitrust iniury than the plaintiff alleging directly injurious foreclosure or exclusion from the market as a result of an unreasonable restraint of trade in violation of Section 1 of the Sherman Act. 3. Axis is in exactly the same position as the target of the boycott in Klor’s, Inc. v. Broadway-Hale Stores, Inc., 359 U.S. 207 (1959). Each of the manufacturers could have indepen- dently decided not to sell to Klor’s without raising any antitrust concern, but they could not agree to do so at the instance of Broadway-Hale Stores. While Klor’s customers might well have suffered antitrust injury from the boycott, it would be irratio- nal to conclude that Klor’s, the target of the boycott, did not suffer antitrust injury and thus had no antitrust remedy. While Micafil contends that the court of appeals decision is of no gen- eral import, it provides no support for the proposition that the holding of a case applies only to its facts. 4. Similarly, Micafil turns Blue Shield of Virginia v. McCready, 457 U.S. 465 (1982), on its head. As noted in the Petition at 10, this Court specifically considered whether McCready lacked antitrust injury because, absent the illegal 3 The Eighth Circuit’s holding in State of South Dakota vy. Kansas City Southern Industries, Inc., 1989-1 Trade Cas. (CCH) 68,635 (8th Cir., June 29 1989), is simply an application of long-standing antitrust standing cases. South Dakota was merely a supplier to the target of the conspiracy; South Dakota suffered indirect injury when the conspiracy allegedly succeeded. The Eighth Circuit’s additional reliance on a lack of antitrust injury is, however, an example of the potential for over- broad application of the Brunswick dictum in Sherman Act cases. conspiracy, McCready’s employer might have chosen insurance that did not cover psychologists’ charges. This Court affirmed McCready’s right to sue because McCready’s injury did flow from that which made the defendants’ acts unlawful. Micafil ignores the holding of McCready solely because this Court did not reverse Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477 (1976). But it is not Brunswick’s holding that is the basis of the lower court’s decision. It is the Brunswick dictum upon which Micafil and the lower court rely.* As in McCready, the lower court and Micafil ‘‘borrow selectively from Bruns- wick... .’? 457 U.S. at 480 n. 16. Moreover, in McCready, the defendants contended that only the psychologists suffered antitrust injury. In allowing McCready to sue for her damages, this Court did not hold that the psychologists’ companion litigation, see 457 U.S. at 469 n. 4, should be dismissed since they did not suffer antitrust injury. McCready’s right to sue did not prevent the psychologists from having a similar right. Axis is in the same functional position as the psychologists in McCready. The acquisition of Mechaneer had the purpose and effect of foreclosing Axis’ entry to the market, just as the refusal to pay for clinical psychologists allegedly had the purpose and effect of denying them indepen- dent access to the market. Both the psychologists and Axis suf- fered antitrust injury. The court of appeals held that Axis’ injury did not ‘‘flow from’’ that which made the acquisition illegal, solely because Axis could have suffered the same injury if facts contrary to those alleged in the complaint had occurred. Micafil violated Section 1 of the Sherman Act and Section 7 of the Clayton Act because Micafil purposefully prevented the increase in competi- 4 Micafil’s brief in opposition demeans both the Third Circuit’s Brunswick decision and this Court’s opinion in Brunswick reversing the Third Circuit. Micafil insists this Court’s belief that ‘‘the antitrust laws do not protect a competitor from increased competition”’ (Br. in Opp. at 8) was so obvious that it alone would not have merited this Court’s review. Yet, the ‘‘obvious’’ to Micafil was in fact specifically rejected by the Third Circuit in Brunswick. That court had allowed the plaintiff to recover treble damages based exclusively on an increase in competition. 5 tion that would have resulted from Axis’ entry into the U.S. market by Axis’ acquiring Mechaneer. The court of appeals’ denial of Axis’ ability to sue creates a standard which could effectively eliminate most private rights of action. Micafil sim- ply ignores this important holding. The petition should be granted. Respectfully submitted, GORDON B. SPIVACK DAVID H. MARKS* COUDERT BROTHERS 200 Park Avenue New York, New York 10166 (212) 880-4400 Attorneys for Petitioner Axis S.p.A. * Counsel of Record --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385002_1581%3A3. Public record. Not legal advice.