# Appendix — Colorado Interstate Gas Co. v. Natural Gas Pipe Line Co. of America > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385020_1279%3A02 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1990 - **Citation:** 498 U.S. 972 ## Text San~ jf oguve No. 89--—— IN THE Josh ¢, SPANIOL, Suprenve Court of the United Sit chan OCTOBER TERM, 1989 3 COLORADO INTERSTATE GAS COMPANY, Petitioner, Vv. NATURAL GAS PIPE LINE COMPANY OF AMERICA and NGPL-TRAILBLAZER, INC.., Respondents, APPENDICES TO PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT MICHAEL L. BEATTY REX E. LEE * REBECCA H. NOECKER CARTER G. PHILLIPS Colorado Interstate MARK D. HOPSON Gas Company MARK E. HADDAD Post Office Box 1087 SIDLEY & AUSTIN Colorado Springs, CO 80944 1722 Eye Street, N.W. Washington, D.C. 20006 WILLIAM C. MCCLEARN (202) 429-4000 ELIZABETH A. PHELAN HOLLAND & HART WILLIAM F. BAXTER Post Office Box 8749 SHEARMAN & STERLING Denver. CO 80201 Stanford Law School Post Office Box 8610 Stanford, CA 94305 ROBERT H. BORK 1150 Seventeenth St., N.W. Washington, D.C. 20036 Counsel for Petitioner March 26, 1999 * Counsel of Record WILSON - EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001 pa TABLE OF CONTENTS APPENDIX A Decision of the United States Court of Appeals for the Tenth Circuit, Sept. 11, 1989 .............................. APPENDIX B Decision of the United States District Court for the District of Wyoming, May 29, 1987 .................. APPENDIX C Order of the United States Court of Appeals for the Tenth Circuit, Dec. 12, 1968 ......:2...-20c........... APPENDIX D Southern Co. Services, Inc., 37 FERC (CCH) 7 61,256 (Dec. 15, 1986) .................. Se... He APPENDIX E Transcontinental Gas Pipe Line Corp., 35 FERC (CCH) 4 61,340 (June 16, 1986) .....................<...... APPENDIX F _ Transcontinental Gas Pipe Line Corp., 35 FERC (COR) 7 61,066 CARCI Fy BOGE): ci cceiccvscceviesscccsieninec APPENDIX G United Gas Pipe Line Co., 4 FERC (CCH) ee OR, OE ne hea APPENDIX H Map of Pipeline Routes and Rates .~......................... Page la 29a 87a 1b 23b 30b 75b la APPENDIX A UNITED STATES COURT OF APPEALS TENTH CIRCUIT Nos. 87-2109, 87-2123 COLORADO INTERSTATE GAS COMPANY, Plaintiff /Counterclaim-Defendant/A ppellee, V . NATURAL GAS PIPELINE COMPANY OF AMERICA; NGPL-TRAILBLAZER, INC., Defendants Counter-claimants/Appellants, Va WYOMING INTERSTATE COMPANY, LTD.; the COASTAL CORPORATION, Counterclaim-Defendants/A ppellees. MIDCON VENTURES, INC., Counterclaimant. FEDERAL ENERGY REGULATORY COMMISSION, Amicus Curiae. Sept. 11, 1989 Michael L. Beatty of Colorado Interstate Gas Co., Colo- rado Springs, Colo., (Rebecca H. Noecker of Colorado Interstate Gas Company, Colorado Springs, Colo., Wil- liam F. Baxter of Shearman & Sterling, Stanford, Cal., William C. McClearn, James E. Hartley, Joseph W. Hal- 2a pern, Elizabeth A. Phelan, and Timothy M. Rastello of Holland & Hart, Denver, Colo., J. Kent Rutledge of Lathrop & Uchner, F.C., Cheyenne, Wyo., with him on the briefs), for plaintiff /counterclaim-defendants/appel- lees. Phillip Areeda, Cambridge, Mass., (William H. Brown of Brown & Drew, Casper, Wyo., Paul J. Hickey of Rooney, Bagley, Hickey, Evans & Statkus, Cheyenne, Wyo., Gerald M. Stern and Charles E. Foster, Los An- geles, Cal., Joseph M. Wells and Paul E. Goldstein, Lom- bard, Ill., John T. Cusack and Michael P. Padden of Gardner, Carton & Douglas, Chicago, Illinois; J. Curtis Moffatt and Paul Korman of Gardner, Carton & Douglas, Washington, D.C., Harvey I. Saferstein and Steven A. Marenberg of Irell & Manella, Los Angeles, Cal., and Louis Nizer and Paul Martinson of Phillips, Nizer, Ben- jamin, Krim & Ballon, New York City, with him on the brief), for defendants /counterclaimants /appellants. Catherine C. Cook, Gen. Counsel, Jerome M. Feit, Sol., and Joshua Z. Rokach, Atty., of the F.E.R.C., Wash- ington, D.C., for amicus curiae. Before MOORE, ANDERSON, and BALDOCK, Circuit Judges. JOHN P. MOORE, Circuit Judge. This is an appeal from an order of the district court refusing to grant judgment notwithstanding the verdict or a new trial for the defendants, Natural Gas Pipeline Company of America (Natural) and NGPL-Trailblazer. 661 F.Supp. 1448. The jury awarded the plaintiff, Colo- rado Interstate Gas Company (CIG), $724,033,361 in damages based on CIG’s claim that Natural attempted to monopolize the market for long distance transportation of Wyoming gas, breached its contract with CIG, and tortiously interfered with CIG’s contractual relations. While the district court reduced the jury award to $412,237,972, Natural argues that the district court failed 3a to rectify the underlying legal errors on which the judg- ment was based. Natural deploys a two-pronged attack against each of CIQ’s claims. First, it asserts that the award of damages for conduct approved by the Federal Energy Regulatory Commission (FERC) impermissibly interferes with FERC’s authority to regulate gas sales and transporta- tion markets. Second, Natural argues, in the alternative, that the substantive law of contracts, torts, and antitrust, requires the reversal of the jury’s verdict on each claim. We hold that in light of FERC’s orders corcerning the basic issues underlying the breach of contract dispute, deference to FERC authority requires that we reverse the breach of contract verdit. We further hold that CIG failed to establish there was a dangerous probability that Natural would monopolize the long distance transporta- tion market. Therefore, we reverse the antitrust verdict. The claim for tortious interference with contractual rela- tions neither interferes with FERC’s authority nor is substantively flawed; thus, the jury’s verdict on that claim will stand. I. Introduction CIG and Natural are owners of pipelines which trans- port natural gas. For many years, Natural has purchased gas from CIG and transported that gas to markets in the Midwest and East. In July 1982, CIG and Natural en- tered into a new contract (the Service Agreement or Argeement) which obliged CIG to deliver and Natural to purchase specified quantities of natural gas. CIG sold two types of gas to Natural. Field gas was suold at a lower rate (F-1 rate) than gas which was delivered from CIG’s main transmission line (H-1 rate). The contract set forth how much gas Natural was required to pur- chase, both on a annual and on a daily basis. Like pre- vious service agreements between Natural and CIG, the 1982 Service Agreement also contained a minimum bill provision which allowed CIG to bill Natural at a pre- 4a determined rate for gas which Natural reserved but did not purchase. Because CIG’s Service Agreement with Natural in- volved the interstate sale of natural gas, the rates and terms specified in the Agreement required approval by FERC. When, in 1982, CIG sought FERC approval, Nat- ural intervened to protest both the rate increase and its contractual obligation to pay CIG for gas it did not purchase. In response to Natural’s intervention, FERC modified the terms of the Service Agreement to reduce the price Natural was required to pay for unpurchased gas. In July 1983, Natural sharply reduced its gas pur- chases from CIG. Natural paid CIG what Natural deter- mined to be the FERC modified rate for unpurchased gas. Natural’s decrease in purchases forced CIG to stop purchasing gas from some of its suppliers: One of those suppliers, Champlin Petroleum, supplied gas to CIG from the Whitney Canyon gas fields in southern Wyoming. Although Natural claimed that it quit purchasing gas from CIG because it had an oversupply of gas, the evi- dence made this claim problematical. As soon as CIG ceased purchasing Whitney Canyon gas, Natural made arrangements to purchase that gas directly from Champ- lin. Indeed, CIG presented evidence that Natural pur- chased gas from many sources to replace lost volumes from CIG. This substitute gas was often more expensive than CIG’s gas. On occasion, Natural resumed purchases of gas from CIG when CIG was attempting to sell gas to new customers. Natural’s decision to stop purchasing gas and the losses CIG experienced as a result of that deci- sion form the basis of this litigation. II. CIG’s Common Law Claims A. Breach of Contract The district court instructed the jury that it could find Natural breached the Service Agreement only if Natural failed to purchase gas and refused to pay CIG 5a the rate that FERC decided was appropriate for volumes not purchased. Neither party disputes that Natural re- fused to purchase gas. The parties dispute the rate FERC determined to be appropriate for gas not taken. Natural argues that the district court should have di- rected a verdict on the breach of contract claim in its favor because it paid CIG the FERC determined rate for gas not purchased. We agree. In order to apprehend the parties’ arguments on this issue, it is necessary to examine the long history of the dispute over Natural’s minimum purchase obligation be- fore FERC.’ For many years the service agreements between CIG and Natural contained two provisions which, together, defined Natural’s minimum purchase obliga- tion.” Section 2 of the Service Agreement the “minimum daily take provision,” required Natural to accept each day 90% of its General Daily Entitlement.? Section 4 1The difficulty that CIG and Natural faced with the minimum purchase obligation was not unique. Minimum purchase obligations in gas contracts became a problem for the industry in the early 1980’s, as a nationwide gas surplus forced many purchasers to curtail their takes. The huge liability incurred by purchasers forced FERC to take action on two procedural levels. First, FERC considered purchasers’ objections to minimum purchase require- ments on a case by case basis and modified service agreement pro- visions where necessary. Second, because minimum purchase obliga- tions were widespread in the natural gas industry, FERC issued general orders that modified certain provisions in all gas contracts. thus, the conflict between CIG and Natural was just a small part of a significant problem which required FERC’s continued attention. 2 For purposes of this opinion we are using the term “minimum purchase obligation” to refer to contract terms which seek to insure that gas buyers purchase a minimum volume of gas. These pro- visions are sometimes called “take or pay,” “minimum bill,” or “minimum take” provisions. Although the precise details or mecha- nisms of these provisions might differ, they have similar effects. 3 Section 2 of the Service Agreement entitled “POINTS OF DE- LIVERY, MAXIMUM DAILY VOLUME OBLIGATIONS, AND 6a of the Service Agreement, the “minimum annual bill,” required Natural to purchase each year 90% of its Total Annual Entitlement, or pay CIG a predetermined rate for gas not purchased.* Natural first objected to the minimum purchase obliga- tion in the Service Agreement when CIG sought approval of the rates and terms of the Agreement from FERC in 1982. The reasonableness of the minimum purchase obli- gation was considered in administrative proceedings be- fore an administrative law judge in 1983. The judge found the “minimum bill provisions” to be unreasonable and ordered CIG to modify the Service Agreement so that CIG could collect from Natural only the fixed costs ° associated with the sale of gas. This decision was ap- pealed to FERC, which, in response, modified the precise mechanism by which CIG could collect money for unpur- _ PRESSURES” includes Natural’s daily purchase obligation. It states: Variations in daily takes may be made at Buyer’s election at H-1 delivery points to meet its varying load conditions, however, Buyer shall not request total daily volumes on any day here- under less than 90 percent of the General Daily Entitlement. 4 Section 4 entitled “MINIsIUM BILL” states, in relevant part: The minimum bill shall be .. . determined by multiplying the Total Annual Entitlement by a factor of 90 percent, such volume hereinafter referred to as “Minimum Volume.” ... Jn the event the Buyer’s actual purchases for the fiscal year are less than the Minimum Volume, then any deficiency shall be billed at the unit fixed cost component under Rate Schedule F-1.... (Emphasis added.) 5 Fixed costs are costs which CIG must incur regardless of the volume of gas it sells. The fixed cost component of the commodity charge also includes a sum representing profits on CIG’s operations. The major nonfixed (variable) cost, which CIG was forced to elim- inate from the rate it could charge Natural, was the cost of gas. 7a chased gas but left unchanged the basic ruling that CIG could collect only fixed costs for unpurchased gas.° In response to FERC’s ruling, CIG submitted to FERC a modification of its Service Agreement by which it sought to collect F-1 fixed costs for F-1 gas which Nat- ural did not purchase and H-1 fixed costs for unpur- chased H-1 gas. Since the fixed cost component of gas rates included profits on the sale of gas, CIG’s submitted rate would have insured full profits on unsold gas. How- ever, FERC did not approve this rate for unpurchased gas.’ It ruled that CIG could collect only F-1 fixed costs for whichever type of gas Natural did not purchase. CIG appealed FERC’s order to this court asserting that it should collect full profits on unsold gas. We rejected this appeal. Colorado Interstate Gas Co. v. FERC, 791 F.2d 803 (10th Cir.1986), cert. denied, 479 U.S. 1043, 107 S.Ct. 907, 93 L.Ed.2d 857 (1987). CIG now argues that these extensive proceedings only considered one aspect of the minimum purchase obliga- tion, namely, the minimum annual bill provision (Section 4) of the Service Agreement. It insists FERC simply overlooked the minimum daily take requirement (Section 2) in the individual proceedings. CIG asserts that the minimum daily take requirement was later modified by FERC’s Order No. 380-C which ruled that minimum take provisions were meant to be governed by Order No. 380. Although FERC’s general orders treated minimum bill provisions identically with minimum take provisions, CIG argues that because FERC Order No. 380-C states sellers 6 On the same day, FERC issued Order No. 380 which required gas sellers to modify their minimum bill provisions to collect only fixed costs for unpurchased gas. 7FERC explained that allowing CIG to collect only F-1 fixed costs for the more expensive H-1 gas would give CIG a strong in- centive to sell H-1 gas instead of merely collecting fees for unde- livered gas. 8a may collect fixed costs,* CIG may collect F-1 fixed costs for unsold F-1 gas and H-1 fixed costs for unsold H-1 gas. If we were to accept CIG’s argument, CIG could collect a higher rate for each year that Natural failed to purchase gas by adding up its compensation for Nat- ural’s daily failure to take gas than it could by using the individually tailored FERC formula for determining CIG’s compensation for Natural’s annual failure to pur- chase gas. Aside from the irrationality of this result, we think it ignores the fact that FERC has plainly ex- amined both the minimum annual bill and the minimum daily take requirements in the Service Agreement since the original ALJ decision. As noted earlier, the ALJ stated that he found that minimum bill provisions to be unjust and unreasonable. CIG apparently assumes this reference to the minimum bill provisions meant that the ALJ only considered the minimum annual bill (Section 4) of the contract. Yet, the rest of the opinion makes clear that the ALJ consid- ered both Sections 2 and 4 of the Service Agreement. For instance, in describing the Service Agreement the ALJ stated, “CIG’s mode of billing to Natural under the F-1 and H-1 Rate Schedules is explained for the situation when the minimum bill provisions operate because Nat- ural failed to take 90 percent of its daily or annual volu- metric entitlements.” Colorado Interstate Gas Co., 25 F.E.R.C. 9 63,012, 65,015 (Oct. 18, 1983) (emphasis added). The ALJ clearly understood that the Service Agreement provided a single rate of compensation for failure to purchase gas on a daily or annual basis and that he was modifying that rate. This conclusion is confirmed by subsequent FERC orders. In its order of June 1985, FERC surveyed the entire history of CIG’s proceedings before the agency on 8 Since Order No. 380-C was a general order, it did not specify the precise value of the fixed cost CIG, or any other sellers, could collect for unsold gas. OO OO ae 9a the minimum purchase issue. FERC stated the ALJ. found “both the minimum annual volume and the mini- mum daily take requirement in CIG’s Service Agree- ment”? to be unreasonable. Colorado Interstate Gas Co., 3i F.E.R.C. {61,325 (June 19, 1985). FERC further noted that the individualized proceedings required CIG to modify both the minimum annual bill and the minimum daily take provisions to eliminate various costs. Jd. The only formula for the elimination of variable costs ap- proved in the individualized proceedings required CIG to charge F-1 fixed costs for failure to purchase either F-1 or H-1 gas. The inescapable conclusion is that FERC regarded this as the sole remedy for failure to purchase gas under either contractual provision. Finally, FERC’s amicus brief explains its current in- terpretation of the FERC proceedings on the minimum purchase issue. The amicus brief states: [T]he district court erred in holding that the Com- mission did not deal with the minimum purchase obligation and that therefore CIG may litigate that issue in this case . . . the Commission treated the minimum bill as the remedy for Natural’s failure to live up to its minimum purchase obligation . . . there- fore, the district court erred in its perception that the minimum bill and take provisions were separate and discrete matters establishing distinct remedies. In light of the deference we owe to FERC’s interpreta- tions of its own order, Colorado Interstate Gas, 791 F.2d at 810; Distrigas of Massachusetts Corp. v. Boston Gas Co., 693 F.2d 1113, 1119 (1st Cir.1982), and the plain meaning of the orders themselves, there is simply no room for CIG’s assertion that FERC’s individualized proceed- ings left the minimum daily take provision (Section 2) of the Service Agreement unaffected. B. Breach of Duty of Good Faith and Fair Dealing Natural argues the jury’s verdict on bad faith breach of contract must be reversed because FERC’s 10a modification of the rate Natural was required to pay CIG for unpurchased gas gave Natural the unqualified right to stop purchasing gas, provided it paid CIG the FERC established price for unpurzhased gas. Natural insists that by awarding CIG damages for bad faith failure to purchase gas that were greater than FERC’s established rate for failure to purchase, the district court allowed state common law to impinge upon FERC’s regu- latory authority. CIG asserts that Natural’s bad faith alters the character of Natural’s conduct so that the FERC rate for unpurchased gas does not apply. While we are unwilling to embrace Natural’s claim that FERC’s orders shield it from all liability for failure to purchase gas, we do agree that Natural is free from lia- bility for failure to purchase gas based upon the implied duty of good faith and fair dealing in the Service Agree- ment. The Supreme Court is wary of attempts by parties, dissatisfied with determinations of federal agencies, to neutralize the effect of those determinations through common-law actions for damages. Chicago & N.W. Transp. Co. v. Kaic Brick & Tile Co., 450 U.S. 311, 324, 101 S.Ct. 1124, 1133, 67 L.Ed.2d 258 (1981); Arkansas Louisiana Gas Co. v. Hall, 453 U.S. 571, 577 n. 6, 101 S.Ct. 2925, 2930 n. 6, 69 L.Ed.2d 856 (1981). These cases are bottomed on the principle that the Supremacy Clause requires state regulation not thwart federal policy. Kalo Brick & Tile, 450 U.S. at 326, 101 S.Ct. at 1134. Common-law claims that seek to litigate matters- already decided by a federal agency are therefore preempted. For instance, in Kalo Brick & Tile, 450 U.S. at 311, 101 S.Ct. at 1127, a shipper of goods by rail, sought to assert a state, common-law tort action for damages caused by a regulated rail carrier’s decision to eliminate service on a rail line. The Supreme Court unanimously held that because the Interstate Commerce Commission had, in approving the cessation of service in administra- lla tive proceedings, ruled on all the issues underlying the shippers state-court suit, the common-law action was preempted. The Court stated: “It is difficult to escape the conclusion that the instant litigation represents little more than an attempt by a disappointed shipper to gain from the Iowa courts the relief it was denied by the commission.” Jd. at 324, 101 S.Ct. at 1133. Through its common-law claim of breach of the con- tractual duty of good faith and fair dealing, CIG ob- tained an award of damages that allowed it to collect H-1 fixed costs for unpurchased H-1 gas. FERC and this court have repeatedly denied CIG’s request to modify the minimum purchase obligation of the Service Agreement to allow it to collect this rate for failure to purchase gas. Colorado Interstate Gas, 791 F.2d at 808-09. By allowing CIG to press this claim, the district court gave CIG a second chance to which it was not entitled. Nevertheless, CIG argues that this case is distinguish- able from Kalo Brick & Tile® and is not a collateral attack upon FERC’s decision because FERC denied CIG H-1 fixed costs for unpurchased H-1 gas only if Natural decided not to purchase gas in good faith. CIG contends, once Natural decided to “shut in’ CIG’s gas in order to harm CIG, FERC’s remedy for failure to purchase gas, a remedy which did not allow collection of H-1 fixed costs, was no longer intended by FERC to apply. Essentially, CIG is asking us to imply a good faith limitation upon the scope of FERC’s remedy for failure to purchase gas. While we find CIG’s argument forceful, we cannot ® The Court in Kalo Brick & Tile emphasized that the “commis- sion has actually addressed the matters [the customer] wishes to raise in state court.” 450 U.S. at 327, 101 S.Ct. at 1135. The Court reserved the question of whether “a state court suit is barred when the commission is empowered to rule on the underlying issues.” Id. In this case, FERC was not explicitly confronted with the ques- tion of whether Natural’s motive for not purchasing gas would be relevant to the rate CIG could collect for that gas. 12a ignore the Supreme Court’s vigorous effort to insure agency action is not blunted by state regulation. See, e.g., Nantahala Power and Light Co. v. Thornburg, 476 U.S. 9538, 106 S.Ct. 2349, 90 L.Ed.2d 943 (1986) (state regulated rate for retail sale of gas did not give enough weight to FERC determined rate for wholesale gas sales) ; Kalo Brick & Tile, 450 U.S. at 326, 101 S.Ct. at 1134. We think that limiting the scope of the FERC developed remedy for failure to purchase gas in the manner sug- gested by CIG would permit circumvention of FERC authority through state contract law. In order for FERC’s remedy to be effective, it must have room to breathe. As the Supreme Court has stated, “Responderts’ theory of the case would give inordinate importance to the role of contracts between buyers and sellers in the federal scheme for regulating the sale of natural gas.” Arkansas Louisiana Gas, 453 U.S. at 582, 101 S.Ct. at 2932. We think this statement applies with equal force to this case. Further, the limited evidence we have suggests FERC intended the collection of F-1 fixed costs to be the exclu- sive contract remedy for failure to purchase gas. FERC’s amicus brief notes the jury awarded damages for anti- trust, tort, and breach of contract claims. Nevertheless, FERC only sought to have the damages for breach of contract reversed. FERC did not distinguish between the breach of contract damages awarded for bad faith fail- ure to purchase gas and those awarded for failure to purchase gas under Section 2 of the Service Agreement.’® 10 The district court did not ask the jury to award damages sep- arately for breach of Section 2 of the Service Agreement and breach of the contractual obligation of good faith and fair dealing. This is troubling because we cannot determine what damages, if any, the jury intended to award for each breach. Further, the jury incorrectly found that Natural breached its obligation to purchase gas under Section 2 of the Service Agree- ment. Having found that Natural deliberately breached the Service Agreement by deciding not to purchase gas, it is difficult to see 13a This interpretation of FERC’s intent mirrors FERC’s interpretation of the scope of its actions in a closely analogous context. During the gas shortage of the early 1970’s, FERC permitted sellers of gas to curtail their contractually agreed upon deliveries of gas, if the cur- tailment was carried out in accordance with plans on file with FERC. See, e.g., United Gas Pipe Line Co. v. FERC, 824 F.2d 417, 421 (5th Cir.1987). Buyers who did not receive gas they contracted for sued sellers based upon breach of contract and various tort theories. I/d.; see also CF Industries v. Transcontinental Gas Pipe Line, 614 F.2d 33 (4th Cir.1980). In response, sellers sought to have FERC modify their service agreements to ex- culpate them from liability for failure to deliver gas to buyers curtailed under curtailment plans. FERC declined to deny the purchasers all remedies for the sellers’ fail- ure to deliver gas stating: Claims that are essentially “breach of contract” in nature and arise because of curtailments initiated and conducted in accordance with effective curtail- ment tariffs are preempted by federal law, which nullifies them. But claims that require a finding of negligence to permit recovery remain unaffected. Transcontinental Gas Pipe Line, 35 F.E.R.C. 9 61,043, 61,080 (April 7, 1986) (emphasis added) ." how the jury could objectively consider the question of whether Natural acted in good faith. Thus, even if we were to find that the bad faith claim was not preempted, we would have to order a new trial. First, the jury would have to evaluate CIG’s bad faith claim in light of the fact that Natural did not breach Section 2 of the Service Agreement. Second, even if the jury still found that Natural breached its con- tractual obligation of good faith and fair dealing, it would have to determine the appropriate damages for this breach. 11 Significantly, one scller challenged FERC’s decision alleging that if buyers were pernitted to sue based upon a seller’s negligent or willful misconduct, some state courts might conclude that actions ~ for “breach of a good faith duty”’ were not preempted. United Gas l4a We believe FERC intended to draw the same line for failure to take gas as it drew for failure to purchase. Actions based upon tort were not meant to be preempted by FERC’s modification of the contract, while actions based upon breach of contract were. Any other distinc- tion would impermissibly undermine the effectiveness of FERC orders. Thus, the jury’s verdict for bad faith breach of contract must be reversed. C. Tortious Interference with Contract The gravamen of CIG’s tortious interference with con- tract claim is that Natural intentionally stopped taking gas from CIG in order to force CIG to relinquish its con- tractual right to purchase Whitney Canyon gas from Champlin Petroleum. CIG alleged Natural was moti- vated by a desire to acquire the rights to purchase Whit- ney Canyon gas. After CIG gave up its rights to the Whitney Canyon reserves, Natural did, in fact, acquire the gas. Natural argues that the jury’s verdict, awarding dam- ages for tortious conduct, must be reversed because CIG’s claim is preempted by FERC’s modification of the mini- mum purchase provisions. Natural also asserts that be- cause the Service Agreement allowed it to stop purchas- ing gas, it may not be held liable for tortious interference based on that conduct. We disagree. FERC’s modification of the contract remedy for fail- ure to purchase gus does not limit CIG’s right to seek damages for tortious interference with contract. As noted above, in an analogous situation, FERC decided Pipe Line, 824 F.2d at 428. The Fifth Circuit rejected the sug- gestion that state courts could interpret FERC orders which allowed actions based upon negligence to permit actions for “breach of a good faith duty.” Thus, at least one other court has interpreted FERC orders prohibiting suits based upon breach of contract to also forbid suits based upon breach of the contractual obligation of good faith and fair dealing. 15a that although it eliminated a gas seller’s contractual lia- bility for failure to sell gas to curtailed customers, buy- ers who did not receive contractually agreed upon vol- umes of gas could maintain suits based upon a seller’s negligent or willful misconduct. United Gas Pipe Line, 824 F.2d at 430. By not contesting tortious interference damages, FERC apparently made the same distinction in this case. Although Kalo Brick & Tile requires pre- emption of tort actions which conflict with agency orders, 450 U.S. at 326-27, 101 S.Ct. at 1134-35, we decline to find preemption where FERC currently perceives no con- flict. More difficult to evaluate is Natural’s assertion that its contractual right to choose between purchasing gas or paying CIG for gas not purchased immunized it from a tortious interference claim based upon a failure to purchase. There is some support for the proposition that conduct which is otherwise lawful ought not form the basis of a tortious interference claim simply because the alleged tort-feasor is motivated by a desire to inter- fere with the plaintiff’s contractual relations. See Circo v. Spanish Gardens Food Mfq. Co., 643 F.Supp. 51, 56 (W.D.Mo.1985); Perlman, Interference with Contract and Other Economic Expectancies: A Clash of Tort and Contract Doctrine, 49 U.Chi.L.Rev. 61, 128 (1982). Ad- vocates of this position are reluctant to impose limita- tions on conduct which is otherwise permitted in an econ- omy based upon vigorous competition. Perlman, supra at 78. While we are sympathetic to this view and recognize that the law of tortious interference is evolving, see Re- statement (Second) of Torts, ch. 37, introductory note at 5 (1977), we believe that the better position is that taken by the Restatement and followed by many courts. This line of authority holds that motive can be a de- terminative factor in converting otherwise lawful be- havior into “improper” conduct for which the defendant will be liable. Restatement (Second) of Torts § 767 com- lL 16a ment d (1977); Alyeska Pipeline Serv. Co. v. Aurora Air Serv., Inc., 604 P.2d 1090, 1093 (Alaska 1979); see also Perlman, Interference with Contract, 49 U.Chi.L.Rev. 61, 78 (1982). Indeed, Professor Prosser has described the contours of the tort stating that ‘no specific conduct is prohibited . . . and liability turns on the purpose for which the defendant acts.” W. Prosser, Law of Torts § 129, at 979 (5th ed. 1984). Natural’s interest in being free to adjust its purchases of gas is not so strong that it cannot be limited by a re- quirement not to exercise its discretion for the purpose of interfering with CIG’s contractual relationships. Alye- ska Pipeline, 604 P.2d at 1093 (right to terminate con- tract at will did not prevent liability for tortious inter- ference based upon termination of that contract). The tortious interference verdict will stand.” Ill. CIG’s Antitrust Claim CIG claims that in addition to being a violation of the Service Agreement and a means of stealing CIG’s cus- tomers, Natural’s decision to stop purchasing gas was also the cornerstone of an attempt by Natural to monopo- lize the market for the long distance transportation of natural gas.’* Since an attempt to monopolize typically 12 Natural also asserts the award of $8,000,839 in restitutionary damages was inappropriate. It argues that restitutionary damages are unavailable for tortious interference claims under Section 766A of the Restatement. While it cites one case to this effect, Marcus, Stowell & Beye Gov't Secs., Inc. v. Jefferson Inv. Corp., 797 F.2d 227, 231-32 (5th Cir. 1986), the weight of authority holds that restitutionary damages are available for tortious interference with contract. See Zippertubing Co. v. Teleflex, Inc., 757 F.2d 1401, 1411- 12 (3d Cir. 1985); Federal Sugar Ref. Co. v. United States Sugar Equalization Bd., 268 F. 575, 582 (D.C.N.Y. 1920); National Mer chandising Corp. v. Leyden, 370 Mass. 425, 348 N.E.2d 771, 775-76 (1976); D. Dobbs, Remedies § 6, at 465 (1973). 13 Natural also asserted an antitrust counterclaim against CIG. Natural alleged that CIG monopolized or attempted to monopolize 17a involves an attempt by a firm which does not possess monopolistic control over a market to become a monopolist in that market, CIG’s claim is unusual because it does not allege that Natural was attempting to gain control of the transportation market for itself. Rather, CIG al- leges Natural stopped purchasing gas in order to give CIG’s chief competitor, the Trailblazer System ', a mo- nopoly in the long distance gas transportation market. Natural asserts that a party may not be held liable for attempting toe give monopoly power to another party which it does not control. This is especially true, it as- serts, when the intended beneficiary of the monopolist is the purchase of Wyoming natural gas by intervening and threaten- ing to intervene in FERC proceedings in which CIG’s competitors proposed building new pipelines leading out of Wyoming. The district court ruled that the Noerr-Pennington doctrine barred evidence of CIG’s activities before FERC. The Noerr-Pennington doctrine requires that attempts to influ- ence the government, including attempts to influence administrative agencies, be exempt from attack under the Sherman Act. California Motor Transp. Co. v. Trucking Unlimited, 404 U.S. 508, 511-12, 92 S.Ct. 609, 612-13, 30 L.Ed.2d 642 (1972); Bright v. Moss Am- bulance Serv., Inc., 824 F.2d 819 (10th Cir. 1987). We agree with the district court that nothing in CIG’s activities before FERC so corrupts the judicial or administrative process that those activities amount to a sham and therefore are exempt from the Noerr- Pennington doctrine. Hydro-Tech Corp. v. Sundstrand Corp., 673 F.2d 1171, 1176-77 & n. 7 (10th Cir. 1982). 14J7t is important to distinguish between NGPL-Trailblazer, one of the defendants, and the Trailblazer System. The Trailblazer Sys- tem is a series of three separately owned and operated pipelines joined end-to-end which stretches from Wyoming to Nebraska. When built in 1982, the Trailblazer System greatly expanded the capacity of producers to move their gas from Wyoming to eastern markets. The westernmost segment of the Trailblazer System, Overthrust, is owned by CIG and Natural, as well as four other companies. The middle segment, WIC, is owned by CIG alone. The easternmost and longest segment of the system, Trailblazer, is owned jointly by NGPL-Trailblazer and two other companies. The Trailblazer System, the alleged beneficiary of Natural’s predatory conduct, is not even a party to this case. ae ia ia ti ell 18a not a single entry but three separately operated entities owned in significant part by the alleged victim of the monopolistic scheme. Nevertheless, Section 2 of the Sherman Act does not explicitly state that a party can only monopolize for it- self. We need not decide this thorny issue because even if we assume that it is possible to create a monopoly for the benefit of a third party, CIG did not establish each of the elements of an attempted monopolization claim.’ CIG alleges that Natural attempted to monopolize the market by preventing CIG from offering gas transporta- tion services to customers who might choose between CIG and the Trailblazer System. Because CIG was required to maintain capacity in its pipeline for the volume of gas Natural chose to reserve under the Service Agree- ment, CIG was not able to replace lost income from Nat- ural’s reduction purchases by offering “firm” '® transpor- tation services to new customers. In the summer of 1984, after Natural had stopped taking gas from CIG, CIG offered Natural the opportunity to reduce the capacity it 15 The difficulty with punishing a firm for attempting to create a monopoly for a third party which does not act as a single entity, is that the threat to competition after the monopoly is achieved is obscure. In a more typical case in which a firm is attempting, through unfair means, to gain control of a market for itself, one can be quite certain the firm will not hesitate to exercise its newly acquired monopoly power. In this case, the alleged monopolist’s (Natural’s) conduct says little about its intended beneficiary’s (the Trailblazer System’s) proclivity or ability to monopolize. Section 2 of the Sherman Act does not punish the mere possession of monopoly power. Standard Oil Co. of New Jersey v. United States, 221 U.S. 1, 62, 31 S.Ct. 502, 516, 55 L.Ed. 619 (1911). 16 Gas can be sold on either a firm or interruptible basis. Firm sales guarantee the purchaser that he will receive the volumes of gas he reserves, while interruptible sales only guarantee deliveries if customers with higher priority do not demand the gas. Since CIG had a firm obligation to sell gas to Natural, CIG could only offer to sell interruptible service to new customers. 19a reserved on the CIG system. Instead of reducing its res- ervation, Natural chose to increase it. Thus, Natural con- tinued to tie up CIG’s capacity, while refusing to pur- chase gas. Further, CIG attempted to offer interruptible service to new customers to utilize the capacity left vacant by Natural’s decreased purchases. Soon after CIG began to service the new customers, Natural resumed purchases of gas, forcing CIG to interrupt its service to the new cus- tomers. Because the Trailblazer System could offer in- expensive, uninterrupted service, CIG’s new customers switched to the Trailblazer System. While Natural’s alleged manipulation of its gas pur- chases in an effort to disrupt CIG’s ability to service new customers may be reprehensible conduct, the antitrust laws cannot be invoked to punish all forms of unseemly business activity. If a party does not have monopolistic control over a market, its unfair business conduct impli- cates the attempt provision of the antitrust laws only if that conduct threatens to create a monopoly. IJndiana Grocery, Inc. v. Super Valu Stores, Inc., 864 F.2d 1409, 1413 (7th Cir.1989); cf. Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36, 54, 97 S.Ct. 2549, 2559, 53 L.Ed.2d 568 (1977) (‘an antitrust policy divorced from market considerations would lack any objective bench- marks”). The defendant need face the added sanction of antitrust triple damages only if the plaintiff can estab- lish each element of an antitrust offense. In this circuit, four elements must be proven to estab- lish an attempt to monopolize under Section 2 of the Sherman Act: (1) relevant market (including geo- graphic market and relevant product market) in which the alleged attempt occurred; (2) dangerous probability of success in monopolizing the relevant market; (3) spe- cific intent to monopolize; and (4) conduct in furtherance of such an attempt. Shoppin’ Bag of Pueblo, Inc. v. Dil- lon Companies, 783 F.2d 159, 161 (10th Cir.1986). In 20a addition, any private plaintiff seeking treble damages under Section 4 of the Clayton Act must show antitrust injury. Brunswick Corp..v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 488, 97 S.Ct. 690, 697, 50 L.Ed.2d 701, cert. denied, 429 U.S. 1090, 97 S.Ct. 1099, 51 L.Ed.2d 535 (1977). While Natural argues that CIG has failed to establish each element of the attempted monopolization claim, CIG’s failure to show a dangerous probability of successful monopolization reveals the fundamental diffi- culty in CIQ’s claim." In order to satisfy the dangerous probability of suc- cess element of an attempt claim, the plaintiff must 17 Several commentators have noted approvingly that the dan- gerous probability of success element of the attempt to monopolize offense prevents courts from expanding the Sherman Act into a broad unfair competition statute. For instance, Handler & Steuer state: [T]here is ample reason for excluding single-firm behavior from the serious penalties of the antitrust laws when no dan- gerous probability of monopolization exists. When one firm monopolizes an economically significant market or threatens such a monopoly, competition is immediately and _ seriously jeopardized. It was largely to combat this peril that section 2 of the Sherman Act was passed, fortified with the formidable deterrent of treble damages and criminal penalties. Short of this situation, however, single firm behavior does not present so significant a threat to competition as to warrant such harsh consequences. Handler & Steuer, Attempts to Monopolize and No Fault Monopoli- zation, 129 U.Pa.L.Rev. 125, 175 (1980) (footnote omitted): see also 3 P. Areeda & D. Turner, Antitrust Law © 833 (1978) (here- inafter Areeda & Turner); cf. Cooper, Attempts and Monopoliza- tion: A Mildly Expansionary Answer to the Prophylactic Riddle of Section Two, 72 Mich.L.Rev. 373, 454-55 (1974) (warning against expansion of the attempt provision into an unfair competi- tion statute) ; but see Blecher, Attempt to Monopolize Under Section 2 of the Sherman Act: “Dangerous Probability” of Monopoliza- tion Within the “Relevant Market,” 38 Geo.Wash.L.Rev. 215, 222 (1969); Note, Attempt to Monopolize Under the Sherman Act: Defendant’s Market Power as a Requisite to a Prima Facie Case, 73 Colum.L.Rev. 1451, 1459-61 (1973). 2la show that there was a dangerous probability the defend- ant would achieve monopoly status as the result of the predatory conduct alleged by the plaintiff. Shoppin’ Bag, 783 F.2d at 162; Lektro-Vend Corp. v. Vendo Co., 660 F.2d 255, 271 (7th Cir.1981), cert. denied, 455 U.S. 921, 102 S.Ct. 1277, 71 L.Ed.2d 461 (1982). The likelihood of successful monopolization is typically evaluated by ex- amining the defendant’s share of the relevant market. Shoppin’ Bag, 783 F.2d at 161. Reformulated in terms of market share, the plaintiff must show that there was a dangerous probability that the defendant’s conduct would propel it from a non-monopolistic share of the market to a share that would be large enough to constitute a mo- nopoly for purposes of the monopolization offense.'* The higher the firm’s intial market share, the greater the like- lihood that it will eventually gain monopolistic control over the market. Jd. at 162. CIG asserts the fact that the Trailblazer System’s market share rose from 41% to 53% is_ sufficient evidence to support the jury’s finding that there was a dangerous probability that the Trailblazer System would attain a monopoly. If this were a typical attempted monopolization case in which the defendant was attempt- ing to acquire a monopoly for itself through the use of economic coercion, we would have little difficulty in affirm- ing the jury’s finding of dangerous probability. First, a market share at the commencement of the defendant’s predatory conduct of 41% would show that the defendant would not have to acquire much additional market share in order to attain monopoly control over the market. More importantly, however, a 41% market share typi- cally indicates that a firm has substantial economic power 18 While the Supreme Court has refused to specify a minimum market share necessary to indicate a defendant has monopoly power, lower courts generally require a minimum market share of be- tween 70% and 80%. 2 E. Kintner, Federal Antitrust Laws § 12.6 (1980) ; Areeda & Turner, {| 803. 22a in the market, and, therefore, has the tools at its dis- posal to elevate its market share to monopolistic levels. In other words, a high market share indicates that the defendant has the economic capacity to monopolize the market. Jd. However, proximity to monopolistic status is not enough; the defendant must also have the ability to propel itself to monopolistic control over the market. Indiana Grocery, Inc. v. Super Valu Stores, Inc., 864 F.2d 1409 (7th Cir.1989) (50% market share insuffi- cient to show dangerous probability of successful monop- olization); Richter Concrete Corp. v. Hilltop Concrete Corp., 691 F.2d 818, 827 (6th Cir.1982) (‘the real test is whether [the defendant] possessed sufficient market power to achieve its aims”); United States v. Empire Gas Corp., 537 F.2d 296, 305 (8th Cir.1976), cert. denied, 429 U.S. 1122, 97 S.Ct. 1158, 51 L.Ed.2d 572 (1977) (50° market share insufficient to show dangerous prob- ability of successful monopolization). While the Trail- blazer System’s substantial market share demonstrates its proximity to monopoly status, it does not indicate Nat- ural’s capacity to raise the Trailblazer System’s market share to a monopolistic level. CIG did not attempt to offer evidence of Natural’s share of the transportation market. One might initially imagine that evidence of a firm’s market share would be required in order to assess that firm’s ability to obtain or confer market power, but this is not necessarily true. In this case, Natural’s capacity to create a monopcly for the Trailblazer System cannot be measured by Natural’s market share because Natural did not use economic coer- cion in its attempt to monopolize. Rather, Natural took advantage of its contractual right to stop purchasing gas from CIG to magnify the Trailblazer System’s posi- tion in the market.'’ In evaluating the probability of suc- 19 The record does not clearly disclose how much of the Trail- blazer System’s market share gain reflected increased transporta- tion volumes because CIG was unavailable as a competitor, and 23a cessful monopolization “we must consider the firm’s ca- pacity to commit the offense, the scope of its objective, and the character of’ its conduct.” Kearney & Trecker Corp. v. Giddings & Lewis, Inc., 452 F.2d 579, 598 (7th Cir.1971), cert. denied, 405 U.S. 1066, 92 S.Ct. 1500, 31 L.Ed.2d 796 (1972). In this case each of these factors is strictly determined and ultimately limited by the Service Agreement between Natural and CIG. Natural’s predatory conduct consisted of exercising its contract rights with CIG to prevent CIG from offering transportation services to long distance customers. Be- cause Natural reserved a certain amount of space in CIG’s pipeline, CIG could not offer that space to others. By continuing to reserve large amounts of gas and tak- ing gas when CIG threatened to sell Natural’s reserved capacity, Natural insured that CIG could not offer Na- tural’s reserved capacity to the market. Yet, Natural’s ability to exclude CIG was strictly limited by Natural’s ability to insure its reserved capacity went empty. By exercising all its rights under the Service Agreement to tie up the entire capacity it had reserved, Natural was still only able to raise the Trailblazer System’s market share to 54%. Thus, from the beginning, Natural’s decision to quit purchasing gas presented no danger that Natural could do anything more than shift 13% of the market to the Trailblazer System. The necessarily limited scope of Na- tural’s objective leaves no room for speculation about the probability that the Trailblazer System would gain a monopoly. There was simply no reasonable chance, let alone a dangerous probability, that Natural, through the exercise of its contractual rights, could imbue the Trail- —— how much the market share gain simply resulted from the Trail- blazer System’s constant sales level in comparison with CIG’s sales losses. 24a blazer System with sufficient market share to be a mo- nopolist.*° Further, market share statistics sometimes overesti- mate a firm’s market power. See, e.g., Ball Memorial Hosp., Inc. v. Mutual Hosp. Ins., Inc., 784 F.2d 1325, 1335 (7th Cir.1986) ; Landes & Posner, Market Power in Antitrust Cases, 94 Harv.L.Rev. 937, 950 (1981). In this ease, if we look beyond market share statistics, we are further convinced that Natural’s conduct did not threaten to give the Trailblazer System the degree of market power that would constitute a monopoly for pur- 20 We agree with the proposition that it is no defense to an at- tempted monopolization charge that the defendant’s attempt to monopolize proved to be unsuccessful. United States v. American Airlines, Inc., 743 F.2d 1114, 1119 (5th Cir.1984). Simply because a plan fails to succeed does not mean there was no probability that it could have succeeded. A flipped coin which lands heads still had a 50% chance of landing tails before it was flipped. The capacity of the defendant to monopolize must be evaluated at the commence- ment of the predatory scheme. We also note our holding in this case does not require that in every instance where a party intends to eliminate a competitor through unfair means, the elimination of the competitor must give the predator a monopolistic market share. For instance, when a party with a substantial market share eliminates a smaller com- petitor through economic coercion, increased market power will give it even greater coercive power to eliminate other competitors. There is no reason to wait until the predator attacks a competitor that would put it just over the brink of monopolization before it can be stopped. See Note, Attempt to Monopolize Under the Sher- man Act: Defendants Market Power as a Requisite to a Prima Facie Case, 73 Colum.L.Rev. 1451, 1462-63 (1973). In this case, Natural sought to take advantage of a unique op- portunity its contract afforded to temporarily harm a competitor of an entity in which it had an economic stake. Unlike the ordi- nary situation in which a firm’s market share is crucial to the firm’s ability to engage in predatory conduct and every predatory act makes future predation easier, Natural’s ability to engage in predatory conduct would not be enhanced by conferring market share upon the Trailblazer System. 25a poses of the monopolization offense. One measure of the degree of market power is the persistence of a firm’s ability to profitably charge monopoly prices.*! If the evi- dence demonstrates that a firm’s ability to charge monop- oly prices will necessarily be temporary, the firm will not possess the degree of market power required for the mo- nopolization offense.” 3 P. Areeda & D. Turner, Anti- 21 Although most courts do not explicitly discuss the persistence of a firm’s ability to charge supracompetitive prices as a measure of a firm’s market power, courts indirectly consider the potential longevity of supracompetitive pricing whenever they use market share to evaluate the degree of market power. Market share sta- tistics are a useful measure of market power, in large part, be- cause they indicate the relative durability of supracompetitive pric- ing capacity. The greater a firm’s market share, the longer it will be able to charge monopoly prices because it will take longer for its small competitors to increase their output enough to discipline prices. See H. Hovencamp, Economics and Federal Antitrust Law § 3.1, at 58 (1985). The durability of a firm’s ability to charge supracompetitive prices also underlies another factor used to evaluate the degree of market power. Barriers to entry are often used by courts to determine whether an alleged monopolist has sufficient market power for purposes of the monopolization offense. 2 E. Kintner, Federal Antitrust Laws § 12.9 (1980). Barriers to entry are market characteristics which make it difficult or time-consuming for new firms to enter a market. For instance, if market entry requires the construction of large manufacturing plants, Cargill, Inc. v. Monfort of Colorado, Inc., 479 U.S. 104, 119, 107 S.Ct. 484, 494, 93 L.Ed.2d 427 (1986), or obtaining governmental approval to enter the market, United States v. Marine Bancorporation, Inc., 418 U.S. 602, 628-29, 94 S.Ct. 2856, 2873-74, 41 L.Ed.2d 978 (1974), the market is said to have high barriers to entry. Often courts re- fuse to find a sufficient degree of market power for the monopoliza- tion offense when they determine that a market has low barriers to entry. See, e.g., Ball Memorial Hosp., 784 F.2d at 1335. While a firm may have the capacity to charge supracompetitive prices in a market with low barriers to entry, that capacity is likely to be temporary. 22 Some courts and commentators label the degree of market power necessary for the monopolization offense as “monopoly power.” See L. Sullivan, Antitrust § 22, at 75 (1977) (“‘Monopo!y power can ————————— 26a trust Law, at © 807; Williamsburg Wax Museum, Ine. ». Historic Figures, Inc., 810 F.2d 248, 252 (D.C.Cir.1987) ; Dimmitt Agri Indus., Inc. v. CPC Int'l, Inc., 679 F.2d 516, 530 (5th Cir.1982), cert. denied, 460 U.S. 1082, 103 S.Ct. 1770 76 L.Ed.2d 344 (1983); Metro Mobile CTS, Inc. v. Newvector Communications, Inc., 661 F.Supp. 1504, 1523-24 (1987); cf. Copperweld v. Independence Tube Corp., 467 U.S. 752, 767-68, 104 S.Ct. 2731, 2739- 40, 81 L.Ed.2d 628 (1984) (antitrust laws are only meant to condemn conduct with long-run anticompetitive effects ) .** be distinguished from a lesser amount of market power only in degree.”); Dimmitt Agri Indus., Inc. v. CPC Int'l, Inc., 679 F.2d 516, 529 (5th Cir.1982), cert. denied, 460 U.S. 1082, 103 S.Ct. 1770, 76 L.Ed.2d 344 (1983). One commentator has suggested that in the future courts might more precisely define monopoly power by “focus[ing] on the permanence of market power, with mere market power suggesting that supranormal profits will be quickly eroded by new entry, and monopoly power suggesting significantly greater insulation from the long-run forces of entry.” G. Hay, Single Firm Conduct, 57 Antitrust L.J. 75, 81 (1988) (emphasis added). While we do not adopt this commentato:’s nomenclature, we do agree with his assertion that market power must be persistent to make a firm a monopolist for purposes of the antitrust laws. 23 A suggestion that unidentified market forces will eventually correct supracompetitive pricing will not suffice to show that market power will be temporary. Only when an alleged monopolist faces substantial competition from a known competitor who will enter the market in a definite period of time, ought courts to decline to find sufficient market power to satisfy the requirement for the monopolization offense, Williamsburg Wax Museum, 810 F.2d at 252 (defendant did not have monopoly in the wax figure market be- cause a known competitor could, within a year, begin to deliver wax figures); Metro Mobile CTS, 661 F.Supp. at 1523-24 (defend- ant did not possess monopoly power for purposes of the monopoliza- tion or attempted monopolization offense even though it controlled 100% of the market because a known competitor had both the plans and capacity to enter the market within three years). Cf. Landes & Posner, Market Power in Antitrust Cases, 94 Harv.L.Rev. 937, 950, n. 28 (1981) (difficulty in identifying potential competitors forces courts to assume that a firm’s ability to charge monopoly prices will be persistent). 27a In this case, the Trailblazer System’s ability to charge supracompetitive prices could last only as long as Natural had the contractual right to tie up CIG’s pipeline ca- pacity. This right was strictly limited by the duration of the Service Agreement ** Once Natural’s control over CIG’s capacity ended, the market would return to the status quo~ since the Trailblazer System would be help- less to compete against the unused and inexpensive ca- pacity of CIG’s system. This analysis, which requires a plaintiff to show that an attempted monopolist’s conduct ** threatened to create substantial and persistent changes in the marketplace, may allow some unfair and potentially harmful methods of competition to go unpunished by the antitrust laws. But the Supreme Court, in a now oft quoted phrase, has stated “the antitrust laws . . . were enacted for ‘the pro- 24 The Service Agreement was to expire in 1989. Thus, the Trail- blazer System would be free from competition for a longer period of time than the defendants in either Williamsburg Wax Museum (1 year) or Metro Mobile CTS (3 years). Yet, the actual number of years that the Trailblazer System would be free from competition from CIG is not the deciding factor in this case. Rather the cer- tainty that the market will return to the status quo at a predeter- mined date and the fact that the Trailblazer System has no power to prevent the erosion of its market share, convince us that the market implications of Natural’s conduct are not the subject of the antitrust laws. 25 There is no suggestion in the record that Natural was in danger of driving CIG completely out of the transportation business before the expiration of the Service Agreement. Indeed, consider- ing CIG’s financial resources and record profitability during Nat- ural’s tie-up, it is unlikely that Natural could have completely excluded CIG. By attacking CIG, Natural could not alter the com- petitive structure of the industry which is based on a permanent superstructure. See Cargill v. Monfort, 479 U.S. at 119, n. 15, 107 S.Ct. at 494, n. 15. 26 One treatise has stressed that courts ought to take a long-run view when evaluating allegedly anticompetitive conduct. In at- tempting to distinguish between conduct that should be addressed 28a tection of competition not competitors.’” Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 488, 97 S.Ct. 690, 697, 50 L.Ed.2d 701 (quoting Brown Shoe Co. v. United States, 370 U.S. 294, 320, 82 S.Ct. 1502, 1521, 8 L.Ed.2d 510 (1962)), cert. denied, 429 U.S. 1090, 97 S.Ct. 1099, 51 L.Ed.2d 585 (1977). The Court has long recognized that the Sherman Act ‘does not purport to afford remedies for all torts committed by or against per- scns engaged in interstate commerce.” Hunt v. Crumboch, 325 U.S. 821, 826, 65 S.Ct. 1545, 1548, 89 L.Ed. 1954 (1945). We believe the triple damage sanction of the Clayton Act is too harsh a remecy for unfair methods of competition that only threaten to have a _ transitory impact on the marketplace. Since there was no danger- ous probability that Natural would bestow upon the Trailblazer System the degree of market power either in terms of market share or persistence, necessary for the monopolization offense, the jury’s antitrust verdict must be reversed. IV. Conclusion In conclusion, we hold that because FERC has already determined the appropriate contractual rate for failure to purchase gas, and Natural has paid CIG that rate, the verdicts for breach of contract and bad faith breach of contract awarding a different rate are reversed. The antitrust verdict is reversed because CIG failed to pre- sent sufficient evidence for a jury to find a dangerous probability of successful monopolization. The verdict for tortious interference with contract is affirmed. by the antitrust laws and conduct which should be regulated by tort law, Professors Areeda and Turner state: [M]ost important, is our doubt that the torts and other activi- ties considered in this Paragraph would very often seriously impair the competitive opportunities of rivals in any significant or permanent way. We must beware of the inclination to con- demn a monopolist on the basis of antisocial behavior that could possibly give him an improper advantage in the market. .. The antitrust court must, therefore, insist on .. . signifi- cant and more-than-temporary harmful effects on competition. Areeda & Turner, { 737b (emphasis added). 29a APPENDIX B UNITED STATES DISTRICT COURT D. WYOMING No. C84-139-B COLORADO INTERSTATE GAS COMPANY, Plaintiff, V. NATURAL GAS PIPELINE COMPANY OF AMERICA and NGPL-TRAILBLAZER, INC., Defendants. NATURAL GAS PIPELINE COMPANY OF AMERICA, MIDCON VENTURES, INC., and NGPL-TRAILBLAZER, INC., Counterclaim-Plaintiffs, V. COLORADO INTERSTATE GAS COMPANY, WYOMING INTER- STATE COMPANY, LTD., and the COASTAL CORPORATION, Counterclaim-Defendants. May 29, 1987 J. Kent Rutledge, Arthur Kline Lathrop & Uchner, Cheyenne, Wyo., Gary L. Cowan, P. Michael Koenig, Michael L. Beatty, Michael L. Williams, Rebecca H. Noecker, Colorado Springs, Colo., William C. McClearn, James E. Hartley, Marilyn S. Kite, Holland & Hart, Denver, Colo., for plaintiff. a 80a John T. Cusack, Thomas Campbell, Gordon Nash, Gardner, Carton & Douglas Chicago, Il., Paul J. Hickey, Rooney, Bagley, Hickey, Evans & Statkus, Cheyenne, Wyo., Louis Nizer, Phillips, Nizer, Benjamin, Krim & Ballon, New York City, William Brown, Brown, Drew, Apostolos, Massey & Sullivan, Casper, Wyo., Joseph M. Wells, Neil J. Maloney, Paul E. Goldstein, Lombard, IIl., Paul Korman, Gardner, Carton and Douglas, Washing- ton, D.C., Roy R. Robertson, Jr., Midcon Corp., Lombard, Ill., for defendants; Phillip Areeda, Langdell Hall, Cam- bridge, Mass., of counsel. Thomas A. Nicholas III, Hirst & Applegate, P.C., Chey- enne, Wyo., Michael L. Betty, The Coastal Corp., Houston, Tex., for Coastal Corp. Gerald M. Sterns, Charles Foster, Occidental Petroleum Co., Los Angeles, Cal., for Occidental. ORDER ON POST-TRIAL MOTIONS BRIMMER, Chief Judge. This matter came before the Court on defendants’ mo- tion, pursuant to Fed. R. Civ. P. 50(b) and 59, for judg- ment notwithstanding the verdict, for new trial, or for a remittitur. The Court, having heard the arguments of counsel, having reviewed the pleading, and being fully aavised in the premises, FINDS and ORDERS as follows: Plaintiff Colorado Interstate Gas Company (CIG) and defendants, Natural Gas Pipeline Company of America and NGPL-Trailblazer, Inc. (hereinafter collectively re- ferred to as “NGPL’’), compete to transport natural gas. In July 1982, NGPL and CIG entered a contract (the Service Agreement) obligating CIG to deliver and requiring NGPL to purchase specified quantities of nat- ural gas. The Service Agreement requires CIG to main- tain sufficient gas reserves and pipeline transportation capacity to ensure delivery of NGPL’s entitlements. Sec- tion 2 of the Service Agreement commits NGPL to pur- sla chase a minimum daily volume of gas or to pay the fixed costs of the volumes not taken. In 1981-1982 a new pipeline, the Trailblazer System, was constructed to transport natural gas out of the Over- thrust region of Wyoming. Three pipeline segments form the Trailblazer System: the Overthrust Pipeline, the Wyoming Interstate Company or WIC Pipeline, and the Trailblazer Pipeline. NGPL-Trailblazer owns the Trail- blazer Pipeline in partnership with two other companies. NGPL-Trailblazer is the operator. Trailblazer competes with CIG to transport natural gas from the Overthrust. In July 1988, NGPL refused to accept gas from CIG. The Natural Gas Act nevertheless obligated CIG to be ready to deliver any volumes requested by NGPL. CIG could not use the pipeline capacity reserved for NGPL to ship natural gas for other customers. CIG was consequently unable to purchase gas from its own suppliers, so it shut-in gas owned by Champlin Petroleum in the Whitney Canyon area of Wyoming. Champlin and CIG began renegotiating their contract. Champlin insisted that CIG release its rights to purchase Whitney Canyon gas. CIG acceded. The next day, NGPL bought Champlin’s Whitney Canyon gas, although NGPL still refused deliveries from CIG. NGPL shipped the Whitney Canyon gas through the Trailblazer Pipeline. In addition to acquiring Champlin’s Whitney Canyon reserves, NGPL purchased gas from new suppliers and increased its takes from existing gas suppliers. CIG brought this action alleging that NGPL attempted to monopolize the market for the long-distance transpor- tation of Wyoming natural gas, that NGPL conspired to monopolize that market, that NGPL breached the Service Agreement and its duty of good faith and fair dealing, and that NGPL tortiously interfered with CIG’s business relationship with Champlin. NGPL asserted counter- claims alleging that CIG’s parent, the Coastal Corpora- 82a tion (together with CIG and WIC), monopolized, at- tempted to monopolize and conspired to monopolize the purchase, transportation and sale of natural gas in the Overthrust area. NGPL also alleged that Coastal ac- quired and attempted to acquire competitors in violation of §$ 1 and 2 of the Sherman Act and § 7 of the Clayton Act. At trial CIG abandoned its antitrust conspiracy claim against NGPL. The Court directed a verdict for CIG on NGPL’s conspiracy counterclaim. A directed verdict was also rendered against NGPL on its claims that CIG monopolized and attempted to monopolize the sale of nat- ural gas and that Coastal unlawfully acquired competi- tors. After an eight week trial, the jury retired to con- sider: 1. whether NGPL breached the Service Agreement, tortiously interfered with CIG’s business or contrac- tual relationships, and attempted to monopolize the long-distance transportation of Wyoming gas; and 2. whether Coastal, CIG and WIC monopolized and attempted to monopolize the purchase and transpor- tation of natural gas. The jury rejected NGPL’s counterclaims and found in favor of CIG on each cause of action. CIG was awarded $159,797,156 on its breach of contract claim, $175,001,711 on its antitrust claim and $39,231,072 on its tortious interference claim. The total award reached $724,033,361 - after trebling the antitrust damages. The Court, how- ever, determined that the damages were duplicative and reduced the judgment to $549,031,650 by deleting the damage award for breach of contract. NGPL now seeks judgment notwithstanding the verdict on each of CIG’s successful claims. In the alternative NGPL moves for a new trial or for a remittitur. Substantial evidence supports the jury’s verdict, and NGPL’s motions for judgment notwithstanding the ver- 33a dict or new trial are denied. The Court concludes, how- ever, that the jury erroneously awarded CIG $16,017,678 as damages for tortious interference with contract, and the Court will grant a remittitur in this amount. The jury also awarded CIG its future F-1 lost profits as anti- trust damages. The total amount of future lost profits was $60,388,000, which was trebled to $181,164,000. The jury erred in awarding CIG its future F-1 lost profits as antitrust damages but correctly included them as dam- ages for breach of contract. Therefore, the Court will grant a remittitur in the amount of $181,164,000 but reinstate the breach of contract damage award in the amount of $60,388,000. The total amount of the remit- titur is $197,181,678. I. JUDGMENT NOTWITHSTANDING THE VERDICT Caution must. be exercised in granting judgment not- withstanding the verdict because it deprives the prevail- ing party of the jury’s factual determination. Joyce v. Atlantic Richfield Co., 651 F.2d 676, 680 (10th Cir. 1981). Granting the motion is appropriate only when the evidence points one way and no reasonable inferences support the position of the opposing party. Equal Em- ployment Opportunity Comm’n v. Prudential Fed. Sav. and Loan Ass’n, 763 F.2d 1166, 1171 (10th Cir. 1985) (citing Symons v. Mueller Co., 493 F.2d 972, 976 (10th Cir. 1974) ), cert. denied, U.S. , 106 S.Ct. 312, 88 L.Ed.2d 289 (1985). The evidence and accompanying inferences must be viewed in a light most favorable to the prevailing party. The court may not weigh the evi- dence, consider the credibility of witnesses or substitute its judgment for the jury’s. Joyce v. Atlantic Richfield Co., 651 F.2d at 680 n. 2. The proof favoring the movant must be so overwhelming that judgment notwith- standing the verdict is the only option available to the court. Acree v. Minolta Corp., 748 F.2d 13882, 1387 (10th Cir. 1984). If fair-minded people may differ as to the — — —— 84a conclusions or if there is substantial conflicting evidence, judgment notwithstanding the verdict must be denied. Ryder v. City of Topeka, 814 F.2d 1412, 1418 (10th Cir. 1987) (citing Wylie v. Ford Motor Co., 502 F.2d 1292 (10th Cir. 1974) ). The jury’s determination must nevertheless be sup- ported by substantial evidence. White v. Conoco, Inc., 710 F.2d 1442, 1443 (10th Cir.1983). Substantial evi- dence is relevant evidence found in the record as a whole which reasonable minds might accept as adequate to support the conclusion. Allstate Ins. Co. v. Hiseley, 465 F.2d 12438, 1247 (10th Cir.1972). The court must de- termine whether a rational jury could conclude that each required element of the claim was met. Downie v. Abex Corp., 741 F.2d 1235, 1238 (10th Cir. 1984). The jury’s findings on sharply conflicting evidence, however, are conclusively binding, for the jury is charged with the exclusive duty of assessing the credibility of witnesses and determining the weight to be given their testimony. Ryder v. City of Topeka, At 1420-21 (quoting White v. Conoco, Inc., 710 F.2d 1442 (10th Cir.1983) ). A. Attempt to Monopolize An attempt to monopolize requires proof of four ele- ments: (1) a relevant market; (2) a dangerous prob- ability of success; (3) specific intent to monopolize; and (4) conduct in furtherance of the attempt. Shoppin’ Bag of Pueblo, Inc. v. Dillon Companies, Inc., 783 F.2d 159, 161 (10th Cir.1986). Private plaintiffs must also show antitrust injury. Brunswick Corp. v. Pueblo Bowl-O- Mat, Inc., 429 U.S. 477, 489, 97 S.Ct. 690, 697, 50 L.Ed.2d 701 (1977). NGPL urges that the evidence was insufficient to permit a reasonable jury to conclude that CIG established the essential elements of an attempt to monopolize. BRIEF OF NATURAL GAS PIPELINE COMPANY OF AMERICA IN SUPPORT OF MO- TIONS FOR JUDGMENT NOTWITHSTANDING THE 85a VERDICT, NEW TRIAL AND/OR REMITTITUR at 9 (hereinafter cited as “NGPL Brief’’). 1. Antitrust Injury Private plaintiffs must prove antitrust injury to re- cover treble damages. Brunswick, 429 U.S. at 489, 97 S.Ct. at 697. CIG failed to prove antitrust injury, NGPL contends, because CIG’s injury does not flow from di- minished competition in the market for the transporta- tion of natural gas and because the damages awarded by the jury do not reflect any anticompetitive effect of the violation. NGPL characterizes CIG’s claim of antitrust injury as one for lost profits under the Service Agree- ment, a loss for which the antitrust laws do not afford relief. Even if such losses were cognizable, NGPL ar- gues, CIG failed to connect its lost profits to its antitrust claim. CIG claims that NGPL’s conduct injured competition. The shut-in, tie-up and manipulation of takes was de- signed to establish control of the market and to achieve monopoly. Competition was injured, CIG argues, be- cause the marketplace was deprived of a low-cost trans- portation alternative. The shut-in precluded CIG from competing with the Trailblazer System to transport NGPL’s gas and prevented CIG from providing nonin- terruptible transportation services to other pipelines. Consumers and producers, CIG concludes, thus had to pay higher prices to transport Wyoming gas. The United States Supreme Court defines antitrust injury as “injury of the type the antitrust laws were intended to prevent and that flows from that which makes the defendants’ acts unlawful.” Brunswick, 429 U.S. at 489, 97 S.Ct. at 697. The injury should reflect the anticompetitive effect either of the violation or of the anticompetitive acts made possible by the violation. Id. It should be the type of loss that the claimed viola- tion would be likely to cause. Jd. (quoting Zenith Radio 36a Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 125, 89 S.Ct. 1562, 1577, 23 L.Ed.2d 129 (1969) ). The antitrust injury test is ambiguous. Page, Anti- trust Damages and Economic Efficiency: An Approach to Antitrust Injury, 47 U.Chi.L.Rev. 467 (1980). Two recent United States Supreme Court cases help to clarify the concept of antitrust injury. Plaintiff in Blue Shield of Virginia v. McReady, 457 U.S. 465, 102 S.Ct. 2540, 73 L.Ed.2d 149 (1982), was a health insurance subscriber whose benefits included reimbursement for psychiatrists’ fees but not psycholo- gists’ fees. Plaintiff alleged that Blue Shield conspired with psychiatrists to drive psychologists from the health care market. The district court dismissed the case, hold- ing that plaintiff lacked standing because she was not a competitor in the health care market. The court of ap- peals reversed. It held that treble damages are available to any person whose injury is directly or proximately caused by a violation of the antitrust laws. Jd. at 468-72, 102 S.Ct. at 2542-44. On appeal the Supreme Court addressed the doctrines of standing and antitrust injury. With regard to the latter, the Court embraced the view that recovery of treble damages should be linked to the procompetitive policy of the antitrust laws. /d. at 482, 102 S.Ct. at 2550. At the same time, it rejected the claim that Brunswick limits recovery to those plaintiffs who show that their injuries reflect the anticompetitive effect of the violation. Jd. The Court held that plaintiffs demon- strate antitrust injury where their injuries are “inex- tricably intertwined with the injury the conspirators sought to inflict on ... the market.” Jd. at 483-84, 102 S.Ct. at 2550-51. The Court also said that a plaintiff need not prove an actual lessening of competition or that it was driven from the market. /d. at 482, 102 S.Ct. at 2550 ‘quoting Brunswick, 429 U.S. at 490 n. 14, 97 S.Ct. at 698). Two facts distinguished McCready from 37a Brunswick. First, plaintiff alleged a purposefully anti- competitive scheme. Second, plaintiff did not label in- creased competition as a harm to her. Blue Shield of Virginia v. McCready, 457 U.S. at 483 & n. 19, 102 S.Ct. at 2550 and n. 19. The Court finally noted 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.” Id. at 483 n. 19, 102 S.Ct. at 2550 n. 19 (emphasis added). The additional factors to be considered became clear in Associated Gen. Contractors of California, Inc. v. Cal- tfornia State Council of Carpenters, 459 U.S. 579, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983). In that case, a car- penters’ union sued an association of general contractors, alleging that the association influenced its members and third parties to withhold their business from unionized firms in order to restrain the union’s business activities. Id. at 521-23, 103 S.Ct. at 899-900. The question pre- sented was whether the union could recover for injuries resulting from the association’s coercion of third parties. Id. at 535, 103 S.Ct. at 907. The Court held that the union lacked standing to seek treble damage. Jd. at 545- 46, 103 S.Ct. at 912. The Court evaluated plaintiff's harm, the alleged wrongdoing and the relationship between them. Jd. at 535, 103 S.Ct. at 907. Several factors were examined: the causal connection between the violation and the in- jury, defendant’s intent to cause the harm, whether Congress intended to redress the injury, the existence of a class of persons more directly injured by the viola- tion, the directness of the causation between the viola- tion and the injury, the degree to which the claim was speculative, the availability of other more appropriate remedies, and the judicial interest in managing complex 38a litigation and avoiding double recovery. Jd. at 537-44, 103 S.Ct. at 908-11.! _ McCready and Associated General Contractors thus suggest that many factors must be considered in a proper analysis of antitrust injury. In this case, CIG alleged that NGPL attempted to monopolize the long-distance transportation of natural gas by excluding CIG from the market. Three issues are raised: whether a reasonable jury could conclude that CIG was excluded from the market, whether the alleged injury is redressable under the antitrust laws, and whether a reasonable jury could conclude that the violation and the injury were connected. The Court must view the evidence as a whole and follow the admonition that an antitrust plaintiff ‘should be given the full benefit of [its] proof without tightly compartmentalizing the various factual components and wiping the slate clean after scrutiny of each.” Aspen Highlands Skiing Corp. v. Aspen Skiing Co., 738 F.2d 1509, 1522 n. 18 (10th Cir.1984) (quoting Continental Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 699, 699, 82 S.Ct. 1404, 1410, 8 L.Ed.2d 777 (1962), aff'd, 472 U.S. 585, 105 S.Ct. 2847, 86 L.Ed.2d 467 (1985). Viewed as a whole and in a light most favorable to CIG, ample evidence supports the jury’s determination that CIG was excluded from the market. CIG’s theory of attempted monopolization is built on several related acts. The first step was the shut-in of CIG gas at the H-1 delivery point. This closed off the southern outlet for Wyoming gas. CIG, to cut back its own supplies, 1 While Associated General Contractors is a standing case, it aids in analyzing CIG’s claims. The concepts of standing and antitrust injury are similar, and many courts have incorporated Brunswick into their standing tests. See, e.g., John Lenore & Co, v. Olympic Brewing Co., 550 F.2d 495 (9th Cir.1977). Justice Marshall, the author of Brunswick, described that opinion as one denying stand- ing. Associated General Contractors, 459 U.S. at 549 (Marshall, J., dissenting). ‘ ' 39a reduced takes from Northwest Pipeline, which was buy- ing substantial amounts of natural gas in Wyoming and transporting it to the south and east through CIG’s sys- tem. Northwest Pipeline sent the gas to the Seattle mar- ket to avoid transporting it through the Trailblazer Sys- tem at a higher cost or breaching its contracts with its own suppliers. This in turn saturated the Seattle market, where Canadian natural gas was plentiful. The shut-in thus closed off the outlet for Wyoming gas in the North- west. Because the Northwest Central and Kansas- Nebraska pipelines stop short of the Overthrust, closing the northwest and southeast outlets left one transporta- tion alternative for Wyoming natural gas: the Trail- blazer System. Tr. at 1550-55; 1693-94. CIG had diffi- culty obtaining new business, because the Service Agree- ment compelled CIG to stand ready to deliver if NGPL resumed takes. When CIG found new customers, the ANR and Tennessee pipeline companies, NGPL resumed takes, forcing CIG to interrupt its service and ta lose its new customers. Then NGPL again suspended its takes. Tr. at 1511-20. Although NGPL vigorously disputed this theory at trial, the jury could have concluded that CIG was excluded from the market for the long-distance transportation of Wyoming natural gas. An attempted monopolization need not cause actual market damage, but must simply threaten to produce the type of market damage contemplated by the antitrust laws. Multifler, Inc. v. Samuel Moore & Co., 709 F.2d 980, 994 (5th Cir.1983), cert. denied, 465 U.S. 1100, 104 S.Ct. 1594, 80 L.Ed.2d 126 (1984) ; Lektro-Vend Corp. v. Vendo Co., 660 F.2d 255, 270 (7th Cir.1981), cert. de- nied, 455 U.S. 921, 102 S.Ct. 1277, 71 L.Ed.2d 461 (1982). The jury could have concluded that competition actually diminished. Evidence was presented showing that, following the shut-in, NGPL’s market share for the long-distance transportation of Wyoming natural gas rose from approximately forty-two percent to fifty-five percent, while CIG’s share dropped from twenty-three “< ¥ 40a percent to thirteen percent. Tr. at 1505-09; Plaintiff’s Exhibit 1758. The next question is whether lost profits caused by exclusion from the market is an injury which the anti- trust laws are intended to prevent. Brunswick, 429 U.S. at 489, 97 S.Ct. at 697. Congress intended to preserve competition by enacting the antitrust laws. Id. at 488, 97 S.Ct. at 697. Preserving competition in turn promotes maximum consumer economic welfare through efficient use and allocation of scarce resources. I P. Areeda & D. Turner, Antitrust Law § 108, at 7 (1978). Antitrust in- jury narrows the standard for recoverable damages to those actually flowing from antitrust violations that cause market inefficiency. Page, supra, 47 U.Chi.L.Rev. at 471. Firms may exclude competitors and yet increase efficiency. The mere fact that a firm has been foreclosed from selling does not, in an economic sense, necessarily mean that it suffered antitrust injury. Jd. at 484, 97 S.Ct. at 695. One principle Brunswick may support is that reductions in profit attributable to conduct preserv- ing allocative efficiency or increasing productive efficiency cannot be recovered as damages. /d. at 485, 97 S.Ct. at 695. Evidence was presented in this case that the Trail- blazer System’s transportation costs substantially ex- ceeded those of the CIG system. Tr. at 1569-78. The evi- dence thus supports an inference that a lower-priced com- petitor was excluded in favor of a higher-priced competi- tor without a corresponding increase in allocative or pro- ductive efficiency. The jury could thus conclude that NGPL’s conduct was anti-competitive and redressable under the antitrust laws. CIG’s injury flows from that which makes the de- fendant’s acts unlawful and reflects the anticompetitive effects of the violation. Brunswick, 429 U.S. at 489, 97 S.Ct. at 697. Competition was injured by the exclusion of a low-cost competitor from the market. CIG’s ex- 4la clusion resulted in higher prices to producers, shippers, and consumers of natural gas. An increase in price re- sulting from dampened competitive market forces is re- dressable under § 4. Blue Shield of Virginia v. Mc- Cready, 457 U.S. at 482-83, 102 S.Ct. at 2550. CIG also experienced lost profits. Increased prices and lost profits are likely to be caused by the exclusion of a lower- priced competitor. CIG thus proved the type of loss that the claimed violation would be likely to produce. Bruns- wick, 429 U.S. at 489, 97 S.Ct. at 697. The third issue is whether the jury reasonably could have concluded that CIG’s injury flowed from NGPL’s violation. NGPL argues that CIG failed to connect its lost profits to its antitrust claim. NGPL purchased nat- ural gas from CIG, not transportation services. It thus argues that CIG’s lost profits resulted from lost sales to NGPL (as opposed to lost opportunities to transport Wyoming natural gas) and that CIG failed to prove that it lost profits on the transportation of Wyoming natural gas. NGPL therefore reasons that CIG failed to prove that it lost profits in the market for the long- distance transportation of Wyoming natural gas. The testimony of CIG’s damage expert, Dr. Rhodes, belies NGPL’s assertion that CIG’s lost profits are un- connected to the long-distance transportation of natu- ral gas. Dr. Rhodes testified that he examined CIG’s variable costs, fixed costs and return on investment. Variable costs are the costs of acquiring and selling gas to other companies. Fixed costs are the costs of build- ing and maintaining a pipeline. Return on investment is the owner’s return of equity. Dr. Rhodes excluded variable costs from the calculation of lost profits. Tr. at 2556-58. Excluding variable costs eliminated lost sales of natural gas from the damage calculation. Dr. Rhoces calculated past lost profits by subtracting F-1 fixed costs from H-1 fixed costs and multiplying the difference by the volumes not taken. Tr. at 2561. Subttacting F-1 42a from H-1 excludes field natural gas from the damage calculation and thus only measures CIG’s transportation costs. CIG’s past lost profits measure the profits its assets would have generated but for the antitrust viola- tion. They are therefore related to the expected gain resulting from the attempt to monopolize. Because they represent the potential return on output of a competitor excluded from the market, lost profits are an appro- priate measure of antitrust injury. Page, supra, 47 U.Chi.L.Rev. at 486-87. The jury therefore could reason- ably conclude that CIG’s past lost profits were connected to the long-distance transportation market. But see infra text at 1479-80 for a discussion of future lost profits. Turning to the contention that CIG failed to show that it suffered lost profits from the transportation of Wyoming natural gas, evidence was presented that the movement of Wyoming gas through the CIG system to the H-1 delivery point depended on NGPL accepting de- livery of that gas. All movement of Wyoming gas stopped when NGPL refused to take natural gas at the H-l delivery point. The transportation of Wyoming natural gas is thus inextricably tied to the injury NGPL sought to inflict on CIG and the market. The jury could have concluded that CIG established that it lost profits on the sale of Wyoming natural gas and that CIG’s injury flowed from the defendant’s unlawful act. Blue Shield of Virginia v. McCready, 457 U.S. at 484, 102 S.Ct. at 484, 102 S.Ct. at 2551. NGPL argues that the shut-in and tie-up of CIG’s pipe- line capacity did not injure competition because CIG was not driven out of business. As the Court in Brunswick noted, however, plaintiffs seeking treble damages need not “ prove an actual lessening of competition in order to recover. . . . [C]ompetitors may be able to prove anti- trust injury before they actually are driven from the market and competition is thereby lessened.” Jd. at 489 n. 14, 97 S.Ct. at 698 n. 14. ~ 43a Associated General Contractors further bolsters the jury’s verdict. Substantial evidence supports the jury’s conclusion that the antitrust violation and CIG’s injury were causally related and that Congress intended to rem- edy the type of injury CIG suffered. CIG alleged, and the jury found, that NGPL specifically intended to harm CIG. No other class of persons was more directly in- jured and thus in a bettg» position to enforce the anti- trust laws. The claim is not speculative as that term was used in Associated Generai Contractors.2 CIG presented evidence that its share of the market declined because of the shut-in, resulting in lost profits. Unlike Associated General Contractors, where the union could resort to the labor laws for redress, CIG lacked an alternative remedy. The jury’s verdict is thus consistent with Associated General Contractors. The verdict is also consistent with Brunswick. At issue in Brunswick was whether damages are recoverable for lost profits incurred when a competitor remains in busi- ness. Id. at 484, 97 S.Ct. at 695. The Court observed that the injury claimed was inimical to the purpose of the antitrust laws. Jd. at 488, 97 S.Ct. at 697. Central to this conclusion was that plaintiff sought damages for increased competition. 7d. In contrast, CIG claimed that its lost profits flowed from a purposeful scheme to dimin- ish competition. Further, CIG established actual injury in fact, whereas the plaintiff in Brunswick merely showed the loss of an expected windfall]. /d. Finally, unlike the situation in Brunswick, damages are not an anticompetitive remedy. The jury’s award of damages warns firms against excluding lower-priced competitors from the market by predatory conduct and thereby en- 2In Associated General Contractors, the union failed to allege that any bargaining agreement was broken as a result of the viola- tion, that the share of the market controlled by unionized firms had diminished, that union membership declined, or that its reve- nues decreased. Associated General Contractors, 459 U.S. at 542. 44a courages stronger cumpetition. See II P. Areeda & D. Turner, Antitrust Law { 346, at 246-47 (1978). The jury was instructed that CIG was required to prove a causal connection between the antitrust violation and injury to its business. Jury Instruction No. 42. The instruction also required the jury to find that the type of injury was one which the antitrust laws were intended to prevent and that the injury was attributable to some harm to competition. Jd. The jury is presumed to fol- low the instructions given by the trial court. United States v. Hall, 805 F.2d 1410, 1417 (10th Cir. 1986). Substantial evidence supports the jury’s finding that CIG proved antitrust injury, and judgment notwithstanding the verdiet eannot be granted on this ground. 2. Relevant Market NGPL contends that CIG incorrectly defined the rele- vant market. The relevant market consists of the rele- vant product market and the relevant geographic market. Brown Shoe Co. v. United States, 370 U.S. 294, 324, 82 S.Ct. 1502, 8 L.Ed.2d 510 (1962); Aspen Highlands Skiing Corp. v. Aspen Skiing Co., 738 F.2d 1509, 1528 (10th Cir. 1984), aff'd, 472 U.S. 585, 105 S.Ct. 2847, 86 L.Ed.2d 467 (1985). NGPL apparently concedes that Wyoming natural gas is the relevant product but disputes CIG’s definition of the relevant market as the long- distance market for the transportation of that gas. NGPL also argues that the Court erred by instructing the jury on CIG’s theory of the relevant market. The relevant geographic market is the geographic area in which sellers and buyers of products or services do business. Tampa Elec. Co. v. Nashville Coal Co., 365 U.S. 320, 327, 81 S.Ct. 628, 628, 5 L.Ed.2d 580 (1961) ; United States v. Grinnell Corp., 384 U.S. 563, 588-89, 86 S.Ct. 1698, 1712-13, 16 L.Ed.2d 778 (1966) (Fortas, J., dissenting). The boundaries of the relevant market must correspond to the commercial realities of the indus- 45a try and be economically significant. Brown Shoe Co. v. United States, 370 U.S. at 336-37, 82 S.Ct. at 1529-30. CIG claimed that the relevant market was the long- distance market for transportation of Wyoming gas from producing areas within Wyoming and the Overthrust to points of interconnection with major interstate trunk- lines. NGPL contends that the relevant market must in- clude local transportation to cities such as Denver and Salt Lake City. NGPL submitted data showing that substantial volumes- of gas produced in the Overthrust were consumed in Wyoming, Colorado and Utah. Tr. at 7453; Defendants’ Ex. 2060. CIG offered evidence that, by the early 1980s, production of natural gas in the Overthrust outstripped local consumption. Tr. at 1453-67; Plainitff’s Ex. 1754, 1755, 1756. Although NGPL’s ex- pert, Dr. George R. Hall, challenged CIG’s definition of the relevant market, he testified that by 1983 production exceeded local consumption by 266 billion cubic feet. Tr. at 7454. CIG thus argued that transporation to local markets did not afford a real choice to producers and shippers of Wyoming gas, because demand was greater in midwestern and eastern markets. In Urited States v. Grinnell Corp., 384 U.S. 563, 575, 86 §.Ct. 1698, 1706, 16 L.Ed.2d 778 (1966), the Supreme Court determined that the relevant geographic market for fire and burglary protection services provided by defendants’ central stations was a national market, al- though the individual stations only served areas within a twenty-five mile radius. The Court reasoned that “the business of providing such services is operated on a na- tional level” and that the “national market . . . reflects the reality of the way .. . [defendants] built and conr- duct their services.” Jd. at 575, 576, 86 S.Ct. at 1706. In reaching this conclusion, the Court looked to the exist- ence of national planning, agreements covering activities in many States, the multistate nature of the business, 46a and the existence of nationwide inspection, certification and rate-making. Jd. at 575, 86 S.Ct. at 1706. In this case, the jury heard evidence that natural gas pipeline companies conduct interstate business subject to national setting of prices, rates and terms by the Federal Energy Regulatory Commission (FERC). The Service Agreement covered activities in many States. NGPL’s stated objective for the Trailblazer System was to “move natural gas from the Overthrust Area of Wyoming to interconnections with existing major interstate pipeline systems for delivery of substantial quantities of Rocky Mountain gas to eastern and mid-western markets.” As in Grinnell, the jury could reasonably conclude that CIG’s definition of the relevant market corresponded to the commercial realities of the industry and was economically significant. The determination of the relevant market is normally a question of fact. Telex Corp. v. International Business Mach. Corp. 510 F.2d 894, 915 (10th Cir.) (per curiam), cert, dismissed, 423 U.S. 802, 96 S.Ct. 8, 46 L.Ed.2d 244 (1975). Where each party presents substantial evidence concerning the appropriate relevant market, the issue becomes a jury question. Cackling Acres, Inc. v. Olson Farms, Inc., 541 F.2d 242, 246 (10th Cir.1976), cert. denied, 429 U.S. 1122, 97 S.Ct. 1158, 51 L.Ed.2d 572 (1977). NGPL contends, however, that the relevant mar- ket instruction tainted the jury’s finding. NGPL Brief at 20-21. This argument is without merit. Counsel failed to apprise the Court of its objection before the jury retired. Further, NGPL’s proposed instruction on the relevant market included language almost identical to that which it now describes as erroneous. * Error may not be assigned to the giving of an instruc- tion unless, before the jury retires, the objecting party raises an objection and distinctly states “the matter to 47a which he objects and the grounds of his objection.” Fed. R.Civ.P. 51. The objection must be sufficiently specific to bring into focus the precise nature of the alleged error. Rogers v. Northern Rio Arriba Elec. Coop., Inc., 580 F.2d 1039, 1042 (10th Cir.1978). At the instruction conference, NGPL objected to the organization of the rele- vant market instruction and recommended moving one of the paragraphs in the instruction. The Court accepted this suggestion, and counsel indicated that the instruction was acceptable. Tr. at 8468-70. NGPL now asserts that the instruction invited the jury to define the relevant market as the long-distance transportation of natural gas. NGPL Brief at 20. Under these circumstances, the Court was not apprised of NGPL’s present position before in- structing the jury. NGPL’s present objections also overlooks it earlier representations to the Court. The instruction given to the jury said that “Colorado Interstate claims that the relevant service market is the transportation of natural gas from producing areas to interconnections with major interstate trunklines.” Jury Instruction No. 30. NGPL’s proposed instruction stated that “Colorado Interstate claims that the relevant market is the long-distance trans- portation of natural gas from producing areas within the state of Wyoming and the Overthrust region.” DE- FENDANTS’ AND COUNTER-CLAIM PLAINTIFFS’ THIRD SET OF REVISED AND SUPPLEMENTAL JURY INSTRUCTIONS, NATURAL’S FIRST PRO- POSED INSTRUCTION NO. 25 [Relevant Market]. NGPUL’s proposed instruction is virtually identical to the charge to the jury. Finally, the instruction is not patently erroneous or prejudicial. See Moe v. Avions Marcel Dassault-Brequet Aviation, 727 F.2d°917, 925 (10th Cir.), cert. denied, 469 U.S. 853, 105 S.Ct. 176, 83 L.Ed.2d 110 (1984) (jury instruction reviewed under a plainly erroneous standard where objection not tendered before jury retires). The 48a instruction incorporates the applicable legal standards. Substantial evidence supports the jury’s conclusion that CIG proved the existence of a relevant market. Judg- ment notwithstanding the verdict is inappropriate in these circumstances. 3. Dangerous Probability of Success A dangerous probability of success is the probability of attaining the power to control prices and exclude com- petition in the relevant market. Shoppin’ Bag of Pueblo, Inc. v. Dillon Companies, Inc., 783 F.2d 159, 162 (10th Cir.1986). NGPL contends that FERC’s regulation of - natural gas pipelines precludes a dangerous probability of success as a matter of law. It also claims that the jury’s finding of a dangerous probability of success is against the weight of the evidence. FERC’s control of prices and market entry, NGPL argues, prevents any pipeline from controlling prices and excluding competition. The Natural Gas Act, however, does not insulate companies within its purview from the antitrust laws. California v. Federal Power Comm’n, 369 U.S. 482, 485-86, 82 S.Ct. 901, 903-04, 8 L.Ed.2d 54 (1962). Antitrust liability may arise despite the exist- ence of pervasive regulatory control. Otter Tail Power Co. v. United States, 410 U.S. 366, 374, 93 S.Ct. 1022, 1028, 35 L.Ed.2d 359 (1973). Two cases suggest that agency regulations may fore- close a probability of successful monopolization. In AI- meda Mall, Inc. v. Houston Lighting & Power Co., 615 F.2d 3438, 354 (5th Cir.), cert. denied, 449 U.S. 870, 101 S.Ct. 208, 66 L.Ed.2d 90 (1980), the court determined that a municipal power company lacked the power to con- trol prices and exclude competition. The defendant power company was the only franchised electiic utility in the Houston area and constituted a “natural monopoly for the distribution of electric power.” /d. at 345. In con- ‘ 49a trast, CIG and NGPL compete within the same market. As the court noted, violations of the antitrust laws can occur when regulated industries actually compete and anticompetitive activity surfaces. Jd. at 354-55. Because neither CIG nor NGPL holds the sole franchise for trans- portation of natural gas from the Overthrust, the jury’s finding of dangerous probability of success is consistent with Almeda Mall. Mid-Texas Communications Systems, Inc. v. American Tel. & Tel. Co., 615 F.2d 1372, 1875-76 (5th Cir.), cert. denied, 449 U.S. 912, 101 S.Ct. 286, 66 L.Ed.2d 140 (1980), arose from the defendant’s refusal to provide interconnections to a smaller local competitor. The court said that the existence of regulatory control is relevant to the existence of monopoly power and “may even pro- hibit a finding of such power as a matter of law.” Id. at 1386-87. The court held, however, that the regulatory scheme is relevant evidence of monopoly power. Jd. at 1386. Whether the defendant possessed such power is a jury question. /d. The mere fact of extensive federal regulation thus does not immunize NGPL from antitrust liability. Regulation of the industry is nevertheless relevant evi- dence of the power to control prices and exclude competi- tion. MCI Communications Corp. v. American Tel. & Tel. Co., 708 F.2d 1081, 1105-06 (7th Cir.), cert. denied, 464 464 U.S. 891, 104 S.Ct. 234, 78 L.Ed.2d 226 (1983). FERC’s role in this case surfaced early in the trial. The first witness, Mr. O’Connell, indicated that FERC regu- lates the industry. Tr. at 211-12. He was extensively cross-examined on the course and outcome of FERC pro- ceedings. Tr. at 578-97. The record is replete with testi- mony concerning FERC orders. Witnesses were per- mitted to explain their understanding of FERC orders to the extent they relied on those orders in taking action or forming opinions. See, e.g., testimony of Dr. Leitzinger, Mr. Morgan, Dr. Rhodes, Mr. Grubb, Mr. Kitchens, Mr. 50a McElligott, Mr. Morrow, Mr. Oxford, Mr. Lawrence, Dr. Hall. NGPL thoroughly explored FERC Regulations and FERC Order 380 during its cross-examination of Mr. Morgan. Tr. 2328-34, 2391-94. Testimony about FERC was excluded only when unduly prejudicial or barred by Fed.R.Evid. 201. The existence of the regulatory scheme was thus presented to the jury. NGPL did not request, or object to the absence of, jury instructions stating that FERC’s regulatory authority should be considered in determining the existence of a dangerous probability of success. See Castleberry v. NRM Corp., 470 F.2d 1113, 1120 (10th Cir.1972) (plain- tiff’s failure to request jury instruction on one theory of liability, coupled with the statement that counsel did not object to defendant’s instructions, precluded appeal of court’s failure to instruct jury on omitted theory of lia- bility). NGPL objected to the instruction given on the ground that NGPL’s market share was insufficient to permit a finding of dangerous probability of success. Tr. at 8476-81. NGPL sought a directed verdict on the ground that CIG failed to prove a dangerous probability of success. The reasoning was that NGPL possessed an insufficient market share. Regulatory control by FERC was not mentioned. Tr. 8381-84. NGPL did not assert its present position at trial. FERC’s authority over CIG and NGPL does not, as a matter of law, preclude a finding that NGPL possessed the power to control prices and exclude competition. Even if it did, NGPL failed to raise the issue during trial. See Glasscock v. Wilson Constructors, Inc., 627 F.2d 1065, 1068 (10th Cir.1980) (a party may not complain of error which it induced or invited); Rogers v. North- ern Rio Arriba Elec. Coop., Inc., 580 F.2d 1039, 1042 (10th Cir.1978) (the purpose of Fed.R.Civ.P. 51 is to clarify the objecting party’s position and give the trial court an opportunity to make changes). The remaining 5la issue is whether the jury’s finding of a dangerous prob- ability of success is against the weight of the evidence. A dangerous probability of success may be shown by market power which in turn may be demonstrated through market share, expressed as a percent of the rele- vant market. Shoppin’ Bag, 783 F.2d at 161. Deter- mining market power also requires an examination of the defendant's market strength as measured by the number and strength of its competitors, ease of market entry, consumer sensitivity to changes in price, innovations in the market and whether the defendant is a multimarket firm. Jd. at 162. Some proof of overt predatory conduct is also required. Jd. at 163. CIG calculated market shares based on capacity con- trol of the Trailblazer System (but excluded the WIC pipeline). The owners of the three pipeline segments con- tributed to the project’s construction. In return each re- ceived ownership shares. They also received a share of the Trailblazer System’s total pipeline capacity in propor- tion to the amount of debt assumed. Capacity control, factored for the system’s different pipeline sizes, con- stituted each party’s market share. Using this method, NGPL’s market share was over 50 percent. Tr. at 1479- 95. NGPL argued that CIG’s methodology skews the par- ties’ positions in the market. It calculated market share based on each partner’s ownership of the Trailblazer Sys- tem. By this method, NGPL’s market share is only 33 percent. The central issue is the defendant’s economic power in the relevant market. E./J. Delaney Corp. v. Boone Bell, Inc., 525 F.2d 296, 306 (10th Cir.1975), cert. denied, 425 U.S. 907, 96 S.Ct. 1501, 47 L.Ed.2d 758 (1976). Ac- tual ownership of the Trailblaz:r System is one measure of economic power in the market for the long-distance transportation of Wyoming natural gas. Control of the system’s overall transportation capacity is an equally valid indicator, especially when coupled with evidence 52a showing that volumes passing through the Trailblazer System increased substantially following the shut-in. 7 at 1585-87; Plaintiff’s Ex. 1763. Sufficient evidence was thus presented from which the jury could conclude that NGPL possessed more than a 50 percent share of the relevant market. - Factors besides market share must be considered. Shoppin’ Bag, 783 F.2d at 162. CIG’s evidence of the parties’ strength showed that, prior to the shut-in, NGPL controlled 41 percent of the market compared with CIG’s 23 percent share. After the shut-in, CIG controlled 13 percent while NGPL’s share rose to 54 percent. Plain- tiff’s Ex. 1758. NGPL’s studies showed that CIG con- trolled nearly 81 percent of the pipeline capacity coming out of Wyoming. Tr. at 6468-69; Defendants’ Ex. 3094. The evidence also showed that FERC regulations made market entry difficult. Finally, at the time of the shut-in, demand for natural gas was declining. One of Champlin Petroleum’s gas contract managers, Mr. Gordon Daty, testified that NGPL was the only firm interested in Champlin’s Whitney Canyon reserves following CIG’s release. As a consequence, Champlin received a lower price for Whitney Canyon gas. NGPL then increased its transportation charges for that gas. Tr. at 4328-35. The jury thus could have concluded that the relevant market was vulnerable to control of prices. Evidence was also presented that CIG was excluded from the market by NGPL’s aggressive conduct. See supra text at 1460-61.—~ The existence of a dangerous probability of success is a jury question. Mid-Texas Communications Systems, Ine. v. American Tel. & Tel. Co., 615 F.2d at 1387. The jury apparently rejected NGPL’s market share data and accepted CIG’s. The weight of the evidence supports the jury’s finding that NGPL possessed the power to control prices and exclude competition. That evidence showed NGPL’s aggressive conduct, CIG’s exclusion from the market, the market’s vulnerability to increases in trans- 58a portation prices and that prices actually increased. This constitutes sufficient evidence from which the jury could conclude that CIG proved a dangerous probability of suc- cess by a preponderance of the evidence. 4. Specific Intent to Monopolize and Anticompetitive Conduct A violation of § 2 of the Sherman Act requires a spe- cific intent to monopolize. United States Steel Corp. v. Foriner Enter. Inc., 429 U.S. 610, 612 n. 1, 97 S.Ct. 861, 863 n. 1, 51 L.Ed.2d 80 (1977): Shoppin’ Bag, 783 F.2d at 161. A desire to increase market share is insuf- ficient. United States Steel Corp. v. Fortner Enter. Ine., 429 U.S. at 612 n. 1, 97 S.Ct. 863 n. 1. A defendant must act with specific intent to destroy competition or build a monopoly. Times-Picayune Publishing Co. v. United States, 345 U.S. 594, 626, 73 S.Ct. 872, 890, 97 L.Ed. 1277 (1958). Specific intent to monopolize is de- fined as an intent to acquire market power and exelude others from competition. F.J. Delaney Corp. v. Bonne Bell, Inc., 525 F.2d at 306 (quoting Union Carbide & Carbon Corp. v. Nisley, 300 F.2d 561, 586 (10th Cir. 1961) ). Proof of exclusionary intent requires evidence that a business intends to use or does use unfair weapons. Pa- cific Eng’g & Prod. Co. of Nevada v. Kerr-McGee Corp., 551 F.2d 790, 795 (10th Cir. 1977). Specific intent may be proved by direct evidence or inferred from a firm's anticompetitive conduct. Aspen Skiing Co. v. Aspen Highlands Skiing, 472 U.S. 585, 608 n. 39, 105 S.Ct. 2847, 2860 n. 39, 86 L.Ed.2d 467, 484 n. 39 (1985) (quoting R. Bork, The Antitrust Paradox 157 (1978) ). Absent direct evidence of specific intent to monopolize, defendant’s conduct must substantially restrain trade, clearly threaten competition or be clearly exclusionary. Cascade Cabinet Co. v. Western Cabinet & Millwork, Inc., 710 F.2d 1366, 1374 (9th Cir. 1983) (quoting William 54a Inglis & Sons Baking Co. v. ITT Continental Baking Co., 668 F.2d 1014, 1028 (9th Cir. 1981), cert. denied, 459 U.S. 825, 103 S.Ct. 57, 74 L.Ed.2d 61 (1982) ). Specific intent may not be inferred from activities motivated solely by legitimate business considerations. 16B Business Organizations, J. von Kalinowski, Antitrust Laws and Trade Regulation § 9.02[5] (1986). The issues are whether a jury could reasonably find that NGPL specifically intended to monopolize the rele- vant market and, if so, whether NGPL’s activities were motivated solely by legitimate business considerations. The relevant factors in examining these questions are whether the acts are ordinary business practices typical of those used in a competitive market and whether the acts constitute an attempt to acquire monopoly power. Telex Corp. v. International Business Mach. Corp., 510 F.2d 894, 925-26 (10th Cir.) (per curiam), cert. dis- missed, 423 U.S. 802, 96 S.Ct. 8, 46 L.Ed.2d 244 (1975). CIG’s evidence of specific intent to monopolize came partly from internal NGPL memoranda. In June 1983, CIG proposed to change the H-1 delivery point from Texas to the entry point of the Trailblazer Pipeline. The change would have freed the southern part of CIG’s sys- tem from the effects of the shut-in. Tr. at 1540-41. Mr. Hannig, a project analyst for NGPL, observed that “'t|here are many implications involved in making this switch,” including whether “this |would| free-up capac- ity on CIG’s system so they could transport for others.” Plaintiff’s Ex. 1325. In August 1984, CIG invited NGPL to change or “renominate” the volumes of natural gas NGPL was entitled to receive under the Service Agree- ment. A smaller nomination by NGPL would have re- duced CIG’s obligation to deliver natural gas to NGPL and thus increased CIG’s capacity to serve cther cus- tomers. Tr. at 1544. In a memorandum to Mr. Eberst, NGPL’s Vice-President for Marketing ard Rates, Mr. Wozbut, NGPL’s Rate Coordinator, recognized that “nom- _ 55a inations of entitlements determine whether CIG’s sys- tem can satisfy customer requirements on a supply and capacity basis.” Plaintiff’s Ex. 763. The renomination proposal forced NGPL to “determine the status of CIG as a continuing supply source and possibly as a major competitor for Rocky Mountain gas. Management must determine whether .. . freeing up CIG capacity may hinder Natural in any of its endeavors.” Id. NGPL nom- inated its full capacity under the Service Agreement yet refused to accept delivery of natural gas when the nomi- nation became effective. Tr. at 8260; Plaintiff’s Ex. 1769. The evidence also showed that NGPL singled out CIG from other NGPL suppliers and ignored its own gas scheduling policies. NGPL scheduled its natural gas re- quirements by using a priority list of suppliers. Begin- ning with the last source on the priority list, NGPL would turn each supplier up to its daily contract quantity or DCQ, progressing up the list to each successive source. CIG, however, was not assigned a DCQ level on the pri- ority list. Each time NGPL went through its priority list, CIG was skipped until all other sources had been turned up to their maximum levels. Tr. at 2202-37. CIG argued that NGPL’s motive for the shut-in was to eliminate lower-priced competition from CIG. The Trailblazer System was operating at only 60 percent of planned levels and at approximately 50 percent of ca- pacity. Tr. at 1569, 1571-78; Plaintiff’s Ex. 1333, 483, 399, 500. The evidence shows that NGPL viewed CIG as a major competitor and intended to hinder CIG’s abil- ity to compete by controlling its pipeline capacity. The jury could have concluded that NGPL’s conduct threat- ened competition by excluding CIG as a competitor and thus inferred that NGPL specifically intended to monop- olize the relevant market. The question is whether the jury could properly make that inference or whether NGPL’s conduct was motivated solely by legitimate busi- ness concerns. 56a NGPL defended the shut-in by claiming that CIG’s prices were too high, that it needed to reduce its own rates and its take or pay liabilities to protect itself from potential liability under the United Gas Pipeline case, and that it simply had an oversupply of natural gas. The evidence contradicts the first assertion. After the shut-in, NGPL repeatedly purchased gas from other suppliers that was more expensive than CIG’s F-1 or H-1 gas. Tr. at 1649-51, 2436-39; Plaintiff’s Ex. 1433, 1590. Further, a memorandum from Mr. Pasteris to Mr. Grubb written in August 1984 noted that “CIG’s sales to Natural are currently priced at $3.18/Mcf for F-1 and $3.63/Mcf for H-1 gas. Given that this is the price delivered to Nat- ural’s mainline the costs are not unreasonable.” Plain- tiff’s Ex. 765. NGPL in fact thought that CIG was an attractive, low-cost supplier. Plaintiff’s Ex. 757. NGPL also contended that it needed to reduce a po tential take or pay liability of $215 million in 1983. Tr. at 3515-16; Defendants’ Ex. 363. CIG experts challenged that evidence. Tr. at 2396. NGPL studies showed “a significant decrease in projected take-or-pay exposure” of $130 million through fiscal 1983. Plaintiff’s Ex. 902-A. In addition, “(Canadian sources accounted for $111 mil- lion of the total, with Great Lakes projected at $77 mil- lion and... Pro-Gas at $34 million.” Jd. Companies other than CIG thus contributed substantially to NGPL’s take-or-pay problems. The decision in United Gas Pipeline was also used to justify the shut-in. The administrative law judge in the United Gas Pipeline case invalidated minimum bill pro- visions similar to the provision in the Service Agreement. NGPL feared that it might be found to have acted im- prudently if it continued to purchase CIG’s H-1 gas and decided to reduce purchases of H-1 gas. Tr. at 5292-97. NGPL also claimed that it needed to reduce its own rates to jurisdictional customers. CIG pointed out that, after the shut-in, NGPL repeatedly purchased more expensive 57a gas from other suppliers. Tr. at 1649-51, 2436-39; Plain- tiff’s Ex. 1433, 1590. NGPL finally asserted that it shut-in 107 million cubic feet per day of H-1 gas to reduce an oversupply of nat- ural gas. On the day after the shut-in, however, NGPL’s takes from other suppliers increased by 93 million cubic feet per day. Tr. at 2271; Plaintiff’s Ex. 1986. Assum- ing that NGPL wanted to decrease its oversupply, to re- duce its potential take-or-pay liability, or to avoid pay- ing for costly gas, it could have done so by nominating smaller volumes in 1984. NGPL instead chose to renomi- nate the same volumes but not to take any gas from CIG. Evidence of specific intent alone cannot sustain a claim of attempted monopolization without corroborating evi- dence of conduct. William Inglis & Sons Baking Co. v. ITT Continental Baking Co., Inc., 668 F.2d 1014, 1028 (9th Cir. 1981), cert. denied, 459 U.S. 825, 103 S.Ct. 57, 74 L.Ed.2d 61 (1982). Ordinary business practices typical of those used in a competitive market are not anticompetitive. Telex Corp. v. International Business Mach. Corp., 510 F.2d at 925-26. The conclusion that conduct is predatory must be based not on its effect on a competitor but on its effect on competition. Pacific Eng’g & Prod. Co. of Nevada v. Kerr-McGee Corp., 551 F.2d at 795. The jury rejected NGPL’s justification for its conduct and apparently decided that NGPL was not predomi- nantly motivated by legitimate business objectives. This conclusion is based on sharply conflicting evidence and cannot be ignored simply because the Court’s view might be different. Ryder v. City of Topeka, 814 F.2d 1412, 1418, 1420-21 (10th Cir. 1987). The evidence supports a finding that NGPL acted to destroy competition and create a monopoly. NGPL’s acts are not ordinary busi- ness practices typical of those used in a competitive mar- ket. Telex Corp. v. International Business Mach. Corp., 510. F.2d at 925-26. NGPL did more than merely refuse 58a to do business with a rival. Given an opportunity to re- nominate entitlements and avoid the cost and supply problems caused by the Service Agreement, NGPL instead chose to nominate the same volumes and thus to prevent CIG from offering a low-cost transportation alternative. The antitrust laws are as much violated by the preven- tion of competition as by its destruction. United States v. Griffith, 334 U.S. 100, 107, 68 S.Ct. 941, 945, 92 L.Ed. 1236 (1948). The jury could therefore conclude that NGPL’s conduct was anticompetitive and that NGPL specifically intended to monopolize the long-distance trans- portation market for Wyoming natural gas. B. Tortious Interference With Contract CIG shut-in Champlin Petroleum’s Whitney Canyon reserves because NGPL’s shut-in created an oversupply of natural gas in CIG’s system. Tr. 265-68; 994-1003; 276-77. NGPL negotiated with Champlin to acquire the -Whitney Canyon reserves. A letter from NGPL to Champ- lin summarized their eventual agreement. The letter stated that the sale was subject to a contract between Champlin and CIG. NGPL agreed to increase the pur- chase price, however, if CIG released its rights to the gas. Plaintiff’s Ex. 1476. When CIG attempted to negotiate revisions in the Whitney Canyon contract, Champlin in- sisted that CIG release its rights. CIG did so, and NGPL immediately acquired the rights to the Whitney Canyon reserves. The jury found that NGPL tortiously interfered with CIG’s contract with Champlin based upon the Restate- ment (Second) of Torts § T66A (1979). NGPL contends that neither Colorado nor Wyoming recognize § 766A. Assuming that the courts would recognize a cause of ac- tion under § 766A, NGPL argues that the Service Agree- ment conferred an absolute right not to buy CIG’s gas and that its conduct was therefore proper. NGPL finally urges that CIG did not suffer cognizable damages under § 774A of the Restatement. 59a Wyoming would recognize a cause of action under § 766A. The tort of intentional interference with con- tract is accepted in Wyoming. Basin Elec. Power Co-op. v. Howton, 603 P.2d 402, 403 (Wyo. 1979). The Re- statement guided the Wyoming Supreme Court in de- fining the tort. See, e.g., Martin v. Wing, 667 P.2d 1159, 1162 (Wyo. 1983) (recognizing cause of action under Restatement (Second) of Torts § 766B); Wartensleben v. Willey, 415 P.2d 613, 614 (Wyo. 1966) (recognizing cause of action under Restatement of Torts § 766). Hay- ing accepted sections 766 and 766B, the Wyoming Su- preme Court would recognize a cause of action under § 766A. The Restatement provides that: [o]ne who intentionally and improperly interferes with the performance of a contract .. . between another and a third person, by preventing the other from performing the contract or causing his per- formance to be more expensive or burdensome, is subject to liability to the other for the pecuniary loss resulting to him. Restatement (Second) of Torts $ 766A (1979). The ele- ments of the tort include the existence of a valid con- tractual relationship or business expectancy, knowledge of the relationship on the part of the interferor, inten- tional and improper interference causing a breach or termination of the relationship, and resultant damage. Texas West Oil and Gas Corp. v. Fitzgerald, 726 P.2d 1056, 1062 (Wyo. 1986). CIG and Champlin unquestionably had a valid con- tractual relationship. The evidence shows that NGPL knew of the existence of the contract. Plaintiff’s Ex. 1476. The salient issues are whether NGPL intentionally and improperly interfered with that relationship and whether the interference damaged CIG. 60a NGPL argues that its conduct was justified. The Service Agreement permits NGPL to refuse delivery of CIG’s gas and pay for volumes not taken. NGPL con- strues the take-or-pay option as an absolute right to shut-in CIG’s gas. Exercising this contractual right, NGPL urges, cannot constitute an improper interference with contract. This argument misapprehends CIG’s claim. NGPL’s tortious act was not the shut-in of CIG’s gas. Instead CIG claimed that NGPL used the shut-in to force CIG to release the Whitney Canyon reserves so that NGPL could appropriate the rights to that gas. The argument that CIG consented to this conduct is specious. To be effective, consent must be given to the particular conduct. Action exceeding the scope of the consent is not privileged. Restatement (Second) of Torts § 892A & comment c. No showing was made that CIG consented to NGPL’s acquisition of the Whitney Canyon reserves. NGPL’s rights under the Service Agreement do not permit an interference with CIG’s contractual relations with third parties. The cases cited by NGPL to support its position are inapposite. In J.C. Penney Co., Inc. v. Davis & Davis, Inc., 158 Ga. App. 169, 279 S.E.2d 461 (1981), ABS contracted to repair the defendant’s buildings. ABS sub- contracted with the plaintiff. Defendant rejected plain- tiff’s work. Although conceding that its work was de- fective, p [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385020_1279%3A02. Public record. Not legal advice.