Opposition Brief — Amerinet, Inc. v. Xerox Corp.

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In The

SUPREME COURT OF THE UNITED STATES

October Term, 1992

AMERINET, INC., d/b/a AMERINET/GENESIS,

AND KAIBAB NATIONAL GROUP, INC., d/b/a

GENESIS SYSTEMS CORPORATION

Petitioners,

vs.

XEROX CORPORATION,

Respondent.

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

BRIEF IN OPPOSITION

Peter Dorsey

Counsel of Record

Steven J. Wells

Sri K. Sankaran

Alfred H. Hoddinott, Jr. DORSEY & WHITNEY

800 Long Ridge Road 220 South Sixth Street

Stamford, CT 06904 Minneapolis, MN 55402

Telephone: (203) 968-4506 Telephone: (612) 340-2600

Attorneys for Respondent

1992 - Dorsey & Whitney, 220 South Sixth Street, Minneapolia, MN SS4(2 - (612) 340-2600

QUESTIONS PRESENTED

1. Whether Petitioners failed to present evidence

which, when tested against the undisputed standards of

law applicable under Federal Rule of Civil Procedure

50(b), was sufficient to withstand a motion for judgment

notwithstanding the verdict on a state law intentional

interference claim.

2. Whether Petitioners failed to present evidence

which, when tested against the undisputed standards of

law applicable under Federal Rule of Civil Procedure 56,

was sufficient to withstand a motion for summary

judgment on state law business disparagement and

federal antitrust claims.

LIST OF SUBSIDIARY COMPANIES

Pursuant to Supreme Court Rule 29.1, respondent

Xerox Corporation provides the following list of its

subsidiary companies. This list does not include wholly-

owned subsidiaries, or wholly-owned subsidiaries of

subsidiaries.

AMTX, Inc.

J.D.R. Equipamentos Vitoria S.A.

Xerox do Nordeste S.A.

Xerox do Amazonas S.A.

Century Data Systems, Inc.

Chapman Instruments, Inc.

Copicentro S.A.

Cortex Corp.

GESCAN International

Image Sciences, Inc.

Intelligent Business Systems

Interfax

Katun Corporation

Kurzweil Applied Intelligence

Optimem

Opto Generic Devices, Inc.

ParcPlace Systems, Inc.

Protocol Engines, Inc.

Quad Mark, Ltd.

Rank Xerox Holding B.V.

Rank Xerox Investments Limited

Investissements Xerographiques Marocains S.A.

Reprographics Egypt Limited

Xerox Egypt S.A.E.

Xerox Maroc S.A.

Xerox Products Limited

R-X Holdings Limited

Xerox Shanghai Limited

Rank Xerox Limited

Fuji Xerox Co., Ltd.

Aichi Xerox Co., Ltd.

Aichi-Higashi Xerox Co., Ltd.

Akita Xerox Co., Ltd.

Ariadne Language Link Co., Ltd.

Chiba Xerox Co., Ltd.

Fuji System Brain Co. Ltd.

Fukui Xerox Co., Ltd.

Fukuoka Xerox Co., Ltd.

Fukushima Xerox Co., Ltd.

Gunma Xerox Co., Ltd.

Hiroshima Xerox Co., Ltd.

Hokkaido Xerox Co., Ltd.

Hokuriku Xerox Co., Ltd.

Hyogo Xerox Co., Ltd.

Kagoshima Xerox Co., Ltd.

Kanagawa Xerox Co., Ltd.

Kita Kyushu Xerox Co., Ltd.

K-O-A Co., Ltd.

Korea Xerox Company Limited

Kumamoto Xerox Co., Ltd.

Kyoto Xerox Co., Ltd.

M-I-C Co., Ltd.

Mie Xerox Co., Ltd.

Miyagi Network Inc.

Miyagi Xerox Co., Ltd.

Nagano Xerox Co., Ltd.

Nagasaki Xerox Co., Ltd.

Niigata Xerox Co., Ltd.

NTT Learning Systems Corp.

Okayama Xerox Co., Ltd.

Oita Xerox Co. Ltd.

Okinawa Xerox Co. Ltd.

Osaka Xerox Co., Ltd.

Philipine Fuji Xerox Corporation

Protex Co. Ltd.

Saitama Xerox Co., Ltd.

ili

Shikoku Xerox Co., Ltd.

Shizuoka Xerox Co., Ltd.

SOAR Co., Ltd.

Sogetsu Art Planning Co., Ltd.

Taiwan Fuji Xerox Corporation

Tama Xerox Co., Ltd.

Techno Front Co., Ltd.

Technol Co. Ltd.

Thai Xerographic Systems Co., Ltd.

Tochigi Xerox Co., Ltd.

Tokyo Xerox Co., Ltd.

Unisol Inc.

Wakayama Xerox Co. Ltd.

Yamagata Xerox Co., Ltd.

Indian Xerographic Systems Limited

Modi Xerox Limited

Burotic Business S.A.

Burotic 2000 S.A.

Euro Burotic S.A.

D&B Partners S.A.

Business Office Products S.A.

Epitec AB

Johan Nyberg Forsaljningsakteibolag

Treitner

Arguelles

Bonanova

Cantabria

Castellon

Castilla Y La Rioja

Cia. Espanola Reprografia y Servicios SA

Almerica SA

Castellana SA

Costa del Sol

Henares SA

C.L.LA. S.A.

Ciudad Lineal

Cuzco

Del Guadalquivir

Deusto

Ebro

Helmantica

Layetana

Les Corts

Levante

Llobregat

Los Remedios

Madrid-Sur

Malaga

Mediterraneo

Meridiana

Mestalla

Nervion

Retiro

Salamanca

Sistemas Expertas y Tecnolo.

Vizcaya

Scaitech A/S

Xerox Partner Arhus A/S

Xerox Partner Esbjerg A/S

Xerox Partner Fyn A/S

Xerox Partner Herning A/S

Xerox Partner Horsholm A/S

Xerox Partner Nykobing A/S

Xerox Partner Trommesalen A/S

Xerox Partner Vejle A/S

Asunto Oy Kristiinanvalli

Kaakon X-Partner Oy

X-Partner Jyvaskyla Oy

X-Partner Kuopio Oy

X-Partner Oulu Oy

X-Partner Turku Oy

X-Partner Tampere Oy

Rank Xerox (Nigeria) Limited

CEMEX

Artificial Intelligence Limited

Badger Office Equipment

Channel Office Systems Limited

Coles Office Equipment Limited

Humberside Business Products Limited

Kernal Technology Limited

Oakley Office Equipment Limited

SBS Ltd.

Sussex Office Services Limited

Text-Comm Limited

AZA

ACT Systemes S.A.

AGORA S.A.

A.J.P. S.A.

Aqix Sarl

Aquitaine Docutique Systemes

Ardennes Marne Bureatique

Axes Bureautiques Systemes

Axor Bureautique

BSC Arve

Bureau Equip'Mans

Bureautique 64

Bureautique 66

Bureautique Distribution

Burobail S.A.

Burocom 42

Burofinance S.A.

C2B Cazaban

C2R Bureautique

CBC

Centre Bureautique 49

Centre Bureautique Auvergne

Centre Bureautique Informatique

C K Bureautique

Competence Bureautique

Diffusion Bureautique de la Somme

DOC X TECH

DOCUSYS SA

Espace Bureautique

Espace Document

Franche Comte Bureautique

HLB Document

Informatique Bureautique Charente

Informe! Sarl

L. A. Bureautique

Nimes Bureautique Communication

RSL Developpement SARL

Omicrome S.A.

Pays d’Auge Bureau

Kepro Partner

SRE Societe de Reprcgraphic Electronique

Secob

Sodevco

Vaucluse Bureautique Service

Vienne Partenaire Bureautique

Xeroboutique

Selectronics, Inc.

Softstrip, Inc.

Spectra Diode Laboratories, Inc.

SPECTRA, Inc.

Superconductivity, Inc.

The Genmoora Corporation

UltraFine Power Technology, Inc.

Verbex Voice Systems, Inc.

Xerox de Bolivia Limitada

Xerox Canada Inc.

Xerox Canada Ltd.

Xerox de Colombia S.A.

Xerox de El Salvador, S.A. de C.V.

Fintrend S.A.

Duff & Phelps/MCM Investment Research Co.

Xerox Financial Services Life Insurance Company

Xerox de Honduras, S.A.

Avalanche Development Company

vii

Xerox Canada Realty, Inc.

Xerox (Jamaica) Limited

Xerox de Panama, S.A.

Xerox del Peru, S.A.

Xerox Trinidad Limited

Xerox de Venezuela, C.A.

Xerox Zona Libre, S.A.

Viil

TABLE OF CONTENTS

PAGE

ob) yp et By sy || » Rea i

LIST OF SUBSIDIARY COMPANIES .............. ii

poo ee eek. errr ix

TABLE OF AUTRE ccc c ccc csccccvecens xi

STATEMENT OF TREE CASE 2... ccc sccccscscnns 2

REASONS FOR DENYING THE PETITION ........ 5

I. THE COURT OF APPEALS, IN APPLYING THE

UNDISPUTED STANDARDS FOR JUDGMENT

NOTWITHSTANDING THE VERDICT TO THE

RECORD IN THIS CASE, DID NOT DEPART

FROM THE ACCEPTED AND USUAL COURSE OF

JUDICIAL PROCEEDINGS ........ ccc ccenes 7

A. The Insufficiency of Evidence of Wrongful

Pee ELT eT ILE T ETE eT TCC eT TTT 8

B. The Insufficiency of Evidence of Causation . 11

C. The Insufficiency of Evidence of Damages .. 13

Il. THE COURT OF APPEALS, IN APPLYING THE

UNDISPUTED STANDARDS FOR SUMMARY

JUDGMENT TO THE RECORD IN THIS CASE,

DID NOT DEPART FROM THE ACCEPTED AND

USUAL COURSE OF JUDICIAL PROCEEDINGS 16

A. The Insufficiency of Evidence of Causation and

PE Pea rie Wa’ Gad ue wolednSs exter eonan es 17

B. Amerinet’s Tying Claim .................. 18

ee A | POTEET TTT TTT ET TTT TUTTE TTT TT Tee 20

TABLE OF AUTHORITIES

CASES PAGE

Anderson v. Liberty Lobby, Inc.,

Oe EE Ch 00s 5. dnws6 64d octouanesane 16

Bigelow v. RKO Radio Pictures, Inc.,

MT ONE. Mdm cd ecGecscavsinccauccs 17

Celotex Corp. v. Catrett,

Se ED 5c 4s Kad ocahdcecdcesck enka 16

City of Omaha Employees Betterment Ass‘n v.

City of Omaha,

883 F.2d 650 (8th Cir. 1989) .........00000 00008. 7

City of Springfield v. Kibbe,

SEE cw ica cn Chas vince cable nc 4,8

Eastman Kodak Co. v. Image Technical

Services, Inc.,

ee eae SF

Frazier v. Heebe,

en nS i han eucanbn. 6

Hughes v. Sinclair Marketing, Inc.,

389 N.W.2d 194 (Minn. 1986) .................. 7

Jefferson Parish Hospital District No. 2 v. Hyde,

EE bk Wa udc hake es koeeieckeel oe. 18, 19

Leoni v. Bemis Co.,

255 N.W.2d 824 (Minn. 1977) .................. 14

Matsushita Electric Indus. Co. v.

Zenith Radio Corp.,

NE ee ie ye eee 16

Nobel Scientific Industries v. Beckman

Instruments, Inc.,

670 F. Supp. 1313 (D. Md. 1986),

aff'd, 831 F.2d 537 (4th Cir. 1987),

cert. denied, 487 U.S. 1226 (1988) ............... 18

Northside Mercury Sales & Service, Inc. v.

Ford Motor Co.,

GU PA 750 GU CW. TFGD) 5 wo cc ccncecencscens 7

Polaris Industries v. Plastics, Inc.,

ROO CaeWe ae GOO CA, TOE svc events eee ees 12

Rice v. Sioux City Memorial Park Cemetery, Inc.,

ee Ae Or cond kalau haseeeebeeness 20

Village of Elbow Lake v. Otter Tail Power Co.,

ok FE) | ee eer rere Tee Trees 14

Young v. United States ex rel. Vuitton et Fills, S.A.,

Se Se SPO E. sn. <0 ees 4 beens cesaeuenaes 6

Zenith Radio Corp. v. Hazeltine Research, Inc.,

ee SE. hic ki xs desc cee iieeeeances 17

xii

RULES PAGE

Federal Rule of Civil Procedure 50 ................ iS

Federal Rule of Civil Procedure 56 ................ i, 5

oe 8 8, 20

gS See 2

Supreme Court Rule 29.1 .................ceeeees ii

xill

= In The

SUPREME COURT OF THE UNITED STATES

October Term, 1992

No. 92-878

AMERINET, INC., d/b/a AMERINET/GENESIS,

AND KAIBAB NATIONAL GROUP, INC., d/b/a

GENESIS SYSTEMS CORPORATION

Petitioners,

vs.

XEROX CORPORATION,

Respondent.

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

BRIEF IN OPPOSITION

Respondent Xerox Corporation (“Xerox”) submits this

brief in opposition to the request of Petitioners

(collectively “Amerinet”) that this Court issue a writ of

certiorari to review the decision of the United States

Court of Appeals for the Eighth Circuit. The petition

should be denied.

STATEMENT OF THE CASE

The unanimous opinion of the Court of Appeals,

Amerinet, Inc. v. Xerox Corp., 972 F.2d 1483 (8th Cir. 1992),

contains a detailed statement of the facts and procedural

history of this case at pages 1487-9, which Xerox adopts for

purposes of this brief. In summary, Amerinet began

selling used computer equipment in 1980. 972 F.2d at

1488. It was struggling financially as early as 1985. 972

F.2d at 1495. Amerinet did not begin trying to sell used

high-speed Xerox laser printers until October 1986, 972

F.2d at 1488, 1492, when it bought an off-the-shelf list of

laser printer users and began “cold-calling” them in hopes

of finding a match between the equipment one user

wanted to sell and another user wanted to buy. A. 1007.1/

If Amerinet found a match, it would try to act as a

middleman in the transaction. Id.; A. 764. By May 1987,

when Amerinet stopped even trying to sell used Xerox

laser printers, it had made only two sales. 972 F.2d at 1488.

Amerinet continued selling other types of used computer

equipment for more than a year, until it went out of

business in November 1988. Id.

Pursuant to Supreme Court Rule 15.1, Xerox draws the

Court’s attention to certain of the errors and omissions in

Amerinet’s Statement of the Case. First, Amerinet

complains that three of the January 1, 1987 amendments

to Xerox’ Full Service Maintenance Agreement (“FSMA”)

“had no legitimate business purpose.” Petition at 12. The

record is to the contrary; each satisfied a legitimate

business need.

V/ “A.” refers to the Appendix Xerox filed in the

Court of Appeals. “X.S.” refers to the Supplemental

Appendix Xerox filed in the Court of Appeals.

Under the FSMA, Xerox agreed, for a fixed annual

payment, to keep the customer's laser printer in good

working order and, if necessary, to replace it with new

equipment. A. 1169-72. Since the cost of replacing

equipment is substantial, Xerox assumed a significant

financial risk under the FSMA. The first amendment

provided that the period of assured availability of full

service maintenance remained with the original title

holder and was not transferable.2/ The second

amendment clarified that after the period of assured

availability had expired, Xerox would offer full service

maintenance on a year-to-year basis and not raise the

annual fee by more than 10% per year. The third

amendment provided that on expiration of the period of

assured availability, Xerox would inspect the equipment

and give the owner a written estimate of the cost, if any,

to bring the machine up to the condition necessary to

qualify for full service maintenance for another year. The

purpose of these amendments was to eliminate the

substantial costs Xerox had incurred when buyers of used

equipment demanded full service maintenance on

equipment that was in extremely poor condition and

required extensive repairs before operating properly. A.

1019; A. 1037-40; A. 1041-2; A. 1170-2; A. 1179-80; A. 1189-

90.

Second, Amerinet glosses over the fact that not a

single one of its alleged “prospective customers” testified

that any conduct on the part of Xerox caused the

prospective customer not to do business with Amerinet.

Amerinet conducted extensive discovery and deposed

employees of three of its alleged prospective customers —

Massachusetts Mutual Insurance Company (“Mass.

2/ Xerox assured that maintenance on its laser

printers would be available for a period of at least seven

years after the equipment was initially installed.

Mutual”), New York Life Insurance Company (“New

York Life”), and Meijer Corporation (“Meijer”). Amerinet

failed, however, at summary judgment and at trial, to

provide any evidence from these or any other alleged

prospective customers that Xerox had proximately caused

Amerinet to lose any business. In fact, the evidence

presented at trial was to the contrary. 972 F.2d at 1501,

quoting A. 1046-47. Amerinet’s trial counsel candidly

admitted that after two years of searching, he could not

find a single customer who would say that Xerox had been

a deterrent to doing business with Amerinet. A. 944.

Third, Amerinet’s claim that the verdict below can be

supported on evidence of lost profits -- particularly on

evidence of lost profits from sales of non-Xerox

equipment to Meijer -- is not properly before the Court.

Amerinet expressly waived any claim for lost profits and

proceeded to trial solely on a “business destruction”

theory. Amerinet’s trial counsel expressly told the jury, in

his opening statement, that “we’re not asking for lost

profits.” X.S. 80. And Amerinet’s damages expert testified

that the loss of sales of Xerox printers was the only reason

for destruction of the business. 972 F.2d at 1495, n.18.

When, during trial, Xerox objected to evidence of lost

sales of non-Xerox equipment to Meijer, Amerinet’s trial

counsel assured the District Court that the evidence was

being offered only to show “what the condition of the

company was in the 1987 and 1988 time frame... .” and

that “I’m not introducing [evidence of lost non-Xerox

sales to Meijer] to show the amount of damages.” X.S.

103. The argument raised for the first time in the Court of

Appeals that the jury could base its verdict on evidence of

lost profits instead of business destruction was expressly

waived at trial and is not properly before the Court. See

City of Springfield v. Kibbe, 480 U.S. 257, 258-9 (1987).

REASONS FOR DENYING THE PETITION

Amerinet asks this Court to exercise its supervisory

power to reconsider the Court of Appeals’ decision that,

with respect to the tortious interference claim, Amerinet

presented insufficient evidence to withstand a motion for

judgment notwithstanding the verdict (now motion for

judgment as a matter of law) under Federal Rule of Civil

Procedure 50(b), and that with respect to the business

disparagement and federal antitrust claims, Amerinet

presented insufficient evidence to withstand a motion for

summary judgment under Federal Rule of Civil

Procedure 56.

In seeking review by this Court, Amerinet:

does not contend that the Court of Appeals’

decision is in conflict with the decision of another

United States Court of Appeals;

does not contend that the Court of Appeals decided

a federal question in a way that conflicts with the

applicable decisions of this Court;

does not contend that the Court of Appeals decided

an important question of federal law which has

not been, but should be, settled by this Court;

does not contend that the Court of Appeals applied

an incorrect legal standard;

does not contend that this Court should change the

law applicable to motions for summary judgment

or judgment notwithstanding the verdict;

* does not contend that the Court of Appeals erred

in determining the law applicable to Amerinet’s

Minnesota tort claims; and

e does not contend that any such law is

unconstitutional.

™,.

This case does not require an exercise of the Court’s

supervisory powers. The Court's intervention here is not

necessary to protect the integrity of the federal system, see

Frazier v. Heebe, 482 U.S. 641, 647-8, n.7 (1987), or to

ensure that the judiciary functions properly, see Young v.

United States ex rel. Vuitton et Fils, S.A., 481 U.S. 787, 809

(1987). Amerinet has not identified any conduct by the

Court of Appeals that would endanger the integrity of the

federal system or the proper functioning of the judiciary.

Amerinet does not complain of any fundamental

unfairness in the proceedings below; it just disagrees with

the Court of Appeals’ ruling on the sufficiency of the

evidence.

This case simply does not present any issues that

require Supreme Court review. The only question

presented is whether Amerinet’s evidence was sufficient

in light of the undisputed legal standards. The decision of

that question, which is inextricably bound to the

particular circumstances here, would have no significant

implications beyond this case. Amerinet’s petition should

be denied.

THE COURT OF APPEALS, IN APPLYING THE

UNDISPUTED STANDARDS FOR JUDGMENT

NOTWITHSTANDING THE VERDICT TO THE RECORD

IN THIS CASE, DID NOT DEPART FROM THE

ACCEPTED AND USUAL COURSE OF JUDICIAL

PROCEEDINGS.

Amerinet concedes that the Court of Appeals applied

the correct legal standards to Xerox’ motion for judgment

notwithstanding the verdict. Amerinet’s description of

the applicable law tracks precisely the law applied by the

Court of Appeals. The parties and the Court of Appeals

are in agreement that the governing law was stated in

Northside Mercury Sales & Service, Inc. v. Ford Motor

Co., 871 F.2d 758, 760 (8th Cir. 1989); City of Omaha

Employees Betterment Ass'n v. City of Omaha, 883 F.2d

650, 651 (8th Cir. 1989); and Hughes v. Sinclair Marketing,

Inc., 389 N.W.2d 194, 198 (Minn. 1986). See Petition at 27-

29.

After conducting a detailed analysis of the record in

this case, the Court of Appeals unanimously concluded

that Xerox was entitled to judgment notwithstanding the

verdict on Amerinet’s Minnesota law claim of tortious

interference because Amerinet’s evidence at trial:

1) was insufficient to support a jury finding that

Xerox used “wrongful means” of competition;

2) was insufficient to support a jury finding that

Xerox’ alleged conduct destroyed Amerinet’s

business; and

3) was insufficient to support a jury finding of the

amount of damages allegedly suffered.

Amerinet has failed to show how any of these rulings

constitutes a departure from “the accepted and usual

course of judicial proceedings.” Supreme Court Rule

10.1(a). Each of these rulings is discussed in turn.

A. The Insufficiency of Evidence of Wrongful Means

Amerinet concedes that under the applicable

Minnesota law, it had the burden of showing at trial that

Xerox’ actions fell outside the “competitor’s privilege.”

Petition at 29. To meet this burden, Amerinet was

required to show that Xerox used “wrongful means” of

competition. Under Minnesota law, “wrongful means”

refers to conduct that is independently actionable --

“conduct which is itself capable of forming the basis for

liability of the actor.” 972 F.2d at 1507 (citations omitted).

At trial, Amerinet presented no evidence of conduct

by Xerox that was independently actionable. In the Court

of Appeals, for the first time, Amerinet argued that Xerox

had engaged in independently actionable conduct

amounting to breach of contract, fraud, and

misrepresentation. Because Amerinet did not make this

argument at trial, it was waived and was not properly

before the Court of Appeals or this Court. See City of

Springfield v. Kibbe, 480 U.S. 257, 258-9 (1987).

Nevertheless, the Court of Appeals considered the

argument and found that Amerinet had not presented

evidence sufficient to support a jury finding of breach of

contract, fraud, or misrepresentation.

Amerinet was unable to point to any evidence to

support its claim that Xerox had entered into and

breached some oral contract with Amerinet to deliver

parts to Meijer. As its sole support for this claim,

Amerinet cited the testimony of its owner, Mr. Brandsey,

that: “[I]t was our understanding that the normal time for

delivery is two to four weeks. ... And it took us almost 90

days, I understand, just about 90 days, to get the parts

delivered to us... .” 972 F.2d at 1507. The Court of

Appeals found that this statement -- lacking any reference

to offer, acceptance, or the terms of the purported contract

-- “simply does not form the basis for a reasonable

inference that Xerox had entered into, much less

breached, a contract . . . and does not show

misrepresentation or fraud.” Id.

Amerinet’s attempts to find support for its argument

of fraud and misrepresentation were equally unsuccessful.

Amerinet claimed in the Court of Appeals that there was

fraud or misrepresentation in Xerox’ alleged statements to

the third parties (Mass. Mutual, New York Life, and

Meijer) for whose business Amerinet and Xerox were

competing. Petition at 31. Amerinet also tried to claim

that the January 1, 1987 amendments to the FSMA

somehow constituted a misrepresentation. None of these

claims had any support in the record (nor were such

claims made at trial).

The Court of Appeals found that even if one assumed,

for the sake of argument, that there had been evidence

sufficient to support an inference that Xerox had made

material misrepresentations, there was still no evidence

that anyone had relied on the alleged misrepresentations

or that Amerinet had in any way been harmed as a result.

972 F.2d at 1507-8. No employee of Mass. Mutual, New

York Life, or Meijer testified that any statement by Xerox

caused these companies not to do business with

Amerinet.3/ Nor was there any evidence that the FSMA

3/ At trial, Amerinet read deposition testimony from

employees of Mass. Mutual and Meijer, but presented no

testimony from employees of New York Life. Amerinet

had, however, presented some deposition testimony from

New York Life employees at the summary judgment

stage. For convenience, we discuss in this section the

testimony of employees of all three companies.

had caused any of these companies not to do business

with Amerinet. In fact, the only testimony on this point

is completely contrary to Amerinet’s theory. William

Fortier, an employee of Mass. Mutual, testified that

despite the January 1, 1987 amendments to the FSMA,

Mass. Mutual still “could realistically have purchased” a

used Xerox laser printer from Amerinet. 972 F.2d at 1501,

quoting A. 1046-7.

Amerinet’s petition fails to show how the Court of

Appeals’ ruling on the sufficiency of the evidence was a

departure from the accepted and usual course of judicial

proceedings. Amerinet had a full opportunity to argue its

case to the Court of Appeals, and to cite all the evidence it

believed to be relevant. The Court of Appeals opinion

reveals that the court carefully considered all of

Amerinet’s arguments and and its citations to the record.

While Amerinet claims that the Court of Appeals

“ignored evidence,” Petition at 34, Amerinet fails to

identify what evidence was purportedly ignored, or how

that evidence could support a finding of “wrongful

means.”

Amerinet’s assertion that the Court of Appeals

“assumed the role of trier of fact” is without merit. The

Court of Appeals concluded that “Amerinet did not

adduce sufficient evidence at trial to allow a reasonable

jury to find that Xerox used wrongful means and thus

acted outside the scope of the competitor's privilege.” 972

F.2d at 1508. This is precisely the inquiry with which the

Court of Appeals was charged. The Court of Appeals did

not depart from its proper function.

B. The Insufficiency of Evidence of Causation

Under the applicable Minnesota law, as to which there

is no dispute, Amerinet had the burden of proving that

but for the allegedly wrongful conduct of Xerox, Amerinet

would not have suffered its alleged injury. Amerinet

argued two theories of injury in the Court of Appeals.

First, Amerinet claimed that Xerox’ conduct caused

Amerinet to lose prospective sales of used Xerox laser

printers and that Amerinet’s business was destroyed as a

result. Second, Amerinet claimed that Xerox’ conduct

caused Amerinet to lose sales of non-Xerox equipment to

Meijer.

After a careful review of the evidence, the Court of

Appeals found that there was no showing that Xerox’

alleged conduct had caused the destruction of Amerinet’s

business. Amerinet’s problem was twofold. First,

Amerinet failed to demonstrate by direct evidence a link

between the allegedly wrorgful conduct of Xerox and any

lost sales of Xerox laser printers. Not a single customer

testified that it was deterred by Xerox’ conduct from

buying a used Xerox laser printer -- or any non-Xerox

equipment -- from Amerinet, despite Amerinet’s two year

search to find such a customer. See discussion above,

Section I-A.

Second, Amerinet failed to adduce evidence from

which a jury could reasonably infer that its business was

destroyed by Xerox’ alleged conduct. The only customer

who addressed that issue at trial stated that nothing Xerox

said or did deterred him from purchasing a used Xerox

laser printer from Amerinet. 972 F.2d at 1501, quoting A.

1046-7. The Court of Appeals also noted Amerinet’s

failure to account for the impact of the various other

factors, unrelated to anything Xerox allegedly did, that

caused Amerinet’s demise. It was undisputed at trial (and

at summary judgment) that Amerinet was in the throes

of economic collapse long before any allegedly wrongful

conduct on the part of Xerox. Market forces were a critical

factor in Amerinet’s demise. According to the

uncontradicted testimony of Amerinet’s own witnesses,

Amerinet was suffering the devastating effects of

increasing competition and decreasing profit margins

from as early as 1985. 972 F.2d at 1495; A. 761-2; A. 771-2;

A. 925-6. As a result of shrinking profit margins, analyses

performed by Amerinet’s own “expert” showed that

despite an increase in sales, Amerinet’s pretax income fell

from 5.5% of sales in fiscal year 1984, to just 1.6% of sales

in fiscal year 1986. A. 1126-7. In the last four months of

1986, Amerinet lost $107,000. A. 1127.

In addition to the impact of market forces, Amerinet

was beset by a series of internal and external misfortunes.

In late 1986 or early 1987, the crucial time period for this

lawsuit, several key members of Amerinet’s sales force

defected to form a company in direct competition with

Amerinet. In June 1987, one month after suing Xerox,

Amerinet sued these defectors, claiming that they caused

Amerinet to suffer substantial harm. 972 F.2d at 1496.

Also in June 1987, Amerinet claimed that one of its

suppliers had breached a contract with Amerinet, and

caused Amerinet damages of up to $100,000 -- double

Amerinet’s pretax profit for the prior year. 972 F.2d at

1508. In the face of the uncontradicted evidence that these

other factors were adversely affecting Amerinet, and in

the absence of any evidence that any Xerox statement or

policy caused Amerinet’s decline, a jury could not

reasonably infer that Xerox’ alleged conduct destroyed

Amerinet’s business. See Polaris Industries v. Plastics,

Inc., 299 N.W.2d 414, 418-19 (Minn. 1980).

The Court of Appeals determined that the evidence

was insufficient to support Amerinet’s business

destruction theory of causation. The Court of Appeals

was correct. There was no departure from the accepted

and usual course of judicial proceedings such as to require

this Court’s supervision.

C. The Insufficiency of Evidence of Damages

Amerinet does not contend that the Court of Appeals

failed to apply the correct Minnesota law with respect to

proof of damages. Rather, Amerinet simply disagrees

with the Court of Appeals’ decision that Amerinet’s proof

was insufficient.

Amerinet argued both a business destruction theory

and, for the first time in the Court of Appeals, a lost

profits theory. Under the business destruction theory,

Amerinet did not simply seek to recover the value of the

business that was allegedly destroyed in May 1987.

Amerinet argued, rather, that but for Xerox’ conduct

Amerinet would have had a spectacular future selling

used Xerox laser printers, and would have made

astronomical (and unprecedented) profits from these

sales. Then, with the extraordinary profits from its new

business selling used laser printers, Amerinet would have

capitalized a second, entirely new business as a Value

Added Remarketer of I.B.M. equipment. This second new

business, according to Amerinet’s theory, also would have

been wildly successful. Amerinet’s damage figure was

based on the price at which this hypothetical business

would be sold in 1992, five years after the alleged tort. A.

1092; A. 1227-8.

The Court of Appeals found that Amerinet’s business

destruction theory was hopelessly speculative -- “fairy-

tale-like.” 972 F.2d at 1510.4/ Amerinet’s theory was based

on projections of extraordinary and unprecedented future

profits from not one, but two, new businesses. The Court

of Appeals noted that under Minnesota law proof of lost

profits in a new business is generally too speculative to

support a recovery in tort. 972 F.2d at 1510; Village of

Elbow Lake v. Otter Tail Power Co., 160 N.W.2d 571, 574

(1968). There must be a reasonable basis upon which to

approximate the amount of damages. Without a “history

of profits, new businesses rarely have evidence upon

which an award of damages may be based with the

requisite degree of certainty.” Leoni v. Bemis Co., 255

N.W.2d 824, 826 (Minn. 1977). In this case, Amerinet had

no such established history in either of these businesses.

In the absence of any sort of profit history, the only basis

for Amerinet’s damage scenario was speculation.

In the Court of Appeals, Amerinet argued that the

jury’s verdict could be based on the theory that Xerox had

caused Amerinet to lose sales of non-Xerox equipment to

4/ The basis for that finding is clear when the

forecasts of Amerinet’s damage expert, Mr. I. Jeff Litvak,

are compared to the facts. Mr. Litvak forecasted: sales of

thirty Xerox machines in 1987, as opposed to two actually

sold in 1986; sales revenues on Xerox printers of $8,250,000

in 1987, as opposed to $433,000 actually achieved in 1986

(the $8,250,000 forecast, exceeding in one year, Amerinet’s

total revenue for its entire prior existence); a 336%

increase in total revenue in 1987 over 1986; a reduction in

expenses to 11.6% of revenue, less than half of its best

prior performance; and a pre-tax profit of over $1,000,000

in 1992, resulting in an increase over 1986 actual of 2100%.

A. 1123; A. 1126; A. 1139; A. 1227.

Meijer. Even putting aside the fact that this argument

was not raised at trial, the Court of Appeals found that

this damage theory was defective because there was no

evidence that the business with Meijer was reasonably

certain to occur. Amerinet never produced a copy of an

alleged $1,000,000 order. And although Amerinet deposed

Meijer employees, Amerinet elicited no testimony from

any Meijer employee that Meijer intended to do any

future business with Amerinet -- let alone business which

would generate $1,000,000 in net profits.2/ Nor was there

any testimony from Meijer that the purported future

business was shifted to another company or testimony

that any conduct on the part of Xerox caused Amerinet to

lose the alleged future business. There was not even any

testimony that Meijer bought non-Xerox equipment from

anyone in 1987. There was simply no evidence in the

record to support Amerinet’s claim.

Amerinet’s damage theories were pure speculation

and failed to pass muster under the undisputed

Minnesota case law.€/ The Court of Appeals’ analysis does

not in any way constitute a departure from the accepted

and usual course of judicial proceedings.

3/ The alleged $1,000,000 order and other supposed

lost Meijer business refer lost gross revenue, not lost net

profits -- which at that time were approximately 1.6% of

gross revenue.

6/ Amerinet’s failure of proof on causation and

damages were similarly fatal to the claim of business

disparagement, which was dismissed at the summary

judgment stage. 972 F.2d at 1503-4.

THE COURT OF APPEALS, IN APPLYING THE

UNDISPUTED STANDARDS FOR SUMMARY

JUDGMENT TO THE RECORD IN THIS CASE, DID NOT

DEPART FROM THE ACCEPTED AND USUAL COURSE

OF JUDICIAL PROCEEDINGS.

The Court of Appeals’ decision does not present a

question of national economic importance or a departure

from the accepted and usual course of judicial proceedings

that warrants grant of a writ of certiorari. It does not raise

questions about the legality of specific business practices.

Both parties and the Court of Appeals agree that the

governing law on the standard for grant of summary

judgment is the law stated in Eastman Kodak Co. v. Image

Technical Services, Inc., 112 S.Ct. 2072 (1992); Anderson v.

Liberty Lobby, Inc., 477 U.S. 242 (1986); Celotex Corp. v.

Catrett, 477 U.S. 317 (1986); and Matsushita Electric Indus.

Co. v. Zenith Radio Corp., 475 U.S. 574 (1986).

Amerinet argues that the Court of Appeals misapplied

Matsushita and required “more persuasive evidence than

otherwise necessary to survive summary judgment”

because the claims in the Complaint made “no economic

sense.” In fact, the Court of Appeals, applying this Court’s

recent analysis of that question in Eastman Kodak, held

specifically that Matsushita “did not introduce a special

burden on plaintiffs facing summary judgment in

antitrust cases .... Matsushita demands only that the

nonmoving party’s inferences be reasonable in order to

reach the jury, a requirement that was not invented, but

merely articulated in that decision.” 972 F.2d at 1495,

quoting Eastman Kodak, 112 S.Ct. at 2083.

—— tt

A. The Insufficiency of Evidence of Causation and

Damages

Because Amerinet’s antitrust claims and its tort claims

based on the Xerox FSMA both allege injury arising out of

the same acts of Xerox, the total failure of proof of a causal

link between those acts and any injury to Amerinet’s

business, discussed above in Section I-B, and the total

failure of proof of a reasonable basis for quantifying any

such injury, discussed above in Section I-C, required

dismissal of the antitrust as well as the tort claims.

Amerinet suggests that the Court of Appeals erred in

considering evidence that factors other than Xerox’

alleged conduct were responsible for the destruction of its

business. The Court of Appeals recognized that the cases

draw a distinction between proof of the fact of damage (or

causation) and proof of the amount of damage. 972 F.2d at

1493-5. Amerinet misconstrues that distinction; the Court

of Appeals did not.

An antitrust plaintiff must establish that the

defendant’s conduct was a material cause of the plaintiff's

alleged injury. Zenith Radio Corp. v. Hazeltine Research,

Inc., 395 U.S. 100, 114, n.9 (1969). The Court of Appeals

found that Amerinet failed to establish any direct

evidence that Xerox’ conduct was a material cause of

injury to Amerinet. In the absence of direct evidence of

causation, one may reasonably infer causation “from

proof of defendant[‘s] wrongful acts and their tendency to

injure plaintiffs’ business, and from the evidence of the

decline in prices, profits and values, not shown to be

attributable to other causes....” Bigelow v. RKO Radio

Pictures, Inc., 327 U.S. 251, 264 (1946) (emphasis supplied).

Since there was no direct evidence that Xerox’ alleged

conduct injured Amerinet, Bigelow required the Court of

Appeals to consider whether such an inference was

reasonable when the only direct evidence was that Xerox’

conduct did not deter sales, A. 1046-7, and in light of the

overwhelming and undisputed evidence of alternative

causes of the destruction of Amerinet’s business. The

Court of Appeals correctly held that no jury could

reasonably infer that Xerox’ conduct caused Amerinet’s

demise. 972 F.2d at 1495-6.

B. Amerinet’s Tying Claims

Amerinet’s petition does not raise questions about the

definition of illegal tying arrangements. The applicable

law is clear and well-established by recent decisions of this

Court in Eastman Kodak and Jefferson Parish Hospital

District No. 2 v. Hyde, 466 U.S. 2 (1984).

Both parties and the Court of Appeals agree that there

was no express tying arrangement between Xerox and its

customers and that Xerox never refused to offer full

service maintenance (the alleged “tying product”) to

anyone. In the absence of an express tie or a refusal to sell

the tying product, an illegal tie may be found when “the

only viable economic option” available to a buyer is to

purchase both the tied and the tying product. Nobel

Scientific Industries v. Beckman Instruments, Inc., 670 F.

Supp. 1313, 1324 (D. Md. 1986), aff'd, 831 F.2d 537 (4th Cir.

1987), cert. denied, 487 U.S. 1226 (1988). The only issue on

the tying claims presented by Amerinet’s petition is not a

legal one, but whether, on the facts of this case, the Court

of Appeals was correct in holding that Amerinet failed to

produce sufficient evidence to support an inference that

Xerox’ maintenance policies made the purchase of new

equipment from Xerox (the alleged “tied product”) the

“only viable economic option.”

Amerinet’s challenge to the Court of Appeals’ ruling

on the tying claims turns on the very same issue on

which its challenge to the rulings on antitrust and tort

causation turns: Was there direct evidence or a basis for a

reasonable inference that Xerox’ maintenance policies

prevented customers from buying Amerinet’s used

——

equipment? The absence of such evidence was fatal to

Amerinet’s attempt to establish a causal link between

Xerox’ conduct and the decline in its business. It is equally

fatal to an argument that Xerox’ maintenance policies

made the purchase of used equipment less than a “viable

economic option.”

Amerinet tries to manufacture a legal issue on the

tying claims by misreading the opinion of Court of

Appeals as a deviation from the basic rule stated in

Jefferson Parish and reiterated in Eastman Kodak that “an

invalid tying arrangement lies in the seller's exploitation

of its control over the tying product to force the buyer into

the purchase of a tied product that the buyer either did not

want at all, or might have preferred to purchase

elsewhere on different terms.” Eastman Kodak, 1125S. Ct.

2080, n.9, quoting Jefferson Parish, 466 U.S. at 12

(emphasis supplied). The Court of Appeals did not, as

Amerinet suggests, rewrite the law to condemn tying

arrangements only when a buyer is forced to purchase an

unwanted product and not when a buyer is forced to

purchase a wanted product from a different source on

different terms. In fact, when the Court of Appeals quoted

the Jefferson Parish definition of tying it underscored the

last clause of the definition. 972 F.2d at 1501.

What the Court of Appeals held was that the “overall

message of Jefferson” is that tying arrangements are

unlawful only when there is proof that the arrangements

force “purchases that would not otherwise be made,” 972

F.2d at 1501, citing Jefferson Parish, 466 U.S. at 27, or that

the buyer is forced “to accept a deal . . . he or she would

otherwise not have wanted.” 972 F.2d at 1501. Applying

that standard, the Court of Appeals held specifically that

even if it accepted Amerinet’s argument that a sale of

used equipment at a lower price than new equipment was

a sale “on different terms” within the meaning of the

Jefferson Parish definition, Amerinet still had the burden

of establishing the existence of a tie -- i.e., that one or

more of Xerox’ customers “might have preferred to

purchase” from Amerinet “on different terms” but was

prevented by Xerox from doing so. The Court of Appeals

correctly held that Amerinet had failed to introduce

evidence sufficient to support such a finding. 972 F.2d at

1501.

CONCLUSION

While every case may be important to its litigants,

only a very small number of cases present the “special and

important” reasons that merit discretionary review by the

Supreme Court. See Supreme Court Rule 10.1; Rice v.

Sioux City Memorial Park Cemetery, Inc., 349 U.S. 70, 74

(1955). This is not one of those cases. The petition for

writ of certiorari should be denied.

Dated: December 23, 1992

Respectfully submitted,