Opposition Brief — SMS Systems Maintenance Services, Inc. v. Digital Equipment Corp.

No. 99-995

IN THE

Supreme Court of the United States

SMS SYSTEMS MAINTENANCE SERVICES, INC.,

Petitioner,

DIGITAL EQUIPMENT CORPORATION,

Respondent.

On PETITION FOR A WRIT OF CERTIORARI TO THE

Unirep STATES COURT OF APPEALS FOR THE FIRST CIRCUIT

RESPONDENT’S BRIEF IN OPPOSITION

J. ANTHONY Downs

Counsel of Record

ANTHONY S. FIOTTO

JENNIFER GRACE MILLER

GoopwINn, PROCTER & Hoar LLP

Attorneys for Respondent

Exchange Place

Boston, Massachusetts 02109-2881

(617) 570-1000

@J Counsel Press LLC

800) 274-3321 + (800) 359-6859

i

LIST OF PARTIES TO THE PROCEEDING

and RULE 29(6) STATEMENT

The parties to the proceedings below were petitioner

SMS Systems Maintenance Services, Inc. (“SMS”) and

respondent Digital Equipment Corporation (“Digital”).

Pursuant to Supreme Court Rule 29(6), respondent Digital

States that it was acquired by and merged into Compaq

Corporation in 1998. Compaq Corporation has no parent

corporation and no publicly held company owns 10% or more

of its shares.

il

TABLE OF CONTENTS

Page

LIST OF PARTIES TO THE PROCEEDING AND

RULE 226) STARTER oscacckcuvssgaces i

TABLE OF CONTEINED <assnecanesvua seen ll

TABLE OF CITED AUTHORITIES ............ Vv

RESPONDENT’S STATEMENT OF THE CASE . 1

Peer ere ore re er ]

Background Facts ...asiccskeue cay iva cseeeut 2

A. Warranties and Competition ......... 2

B. Digital’s Adoption of Three-Year

Warranties on Certain Products and the

Legitimate Competitive Reasons for

Tamt AGORA kkk 5 d50 eae 3

C. Service and Maintenance of Computers

2 0.608 8 66:8 a Race ee ee 4

D. Procedural GN occ task veicaas 6

E. The First Circuit’s Decision ......... 7

REASONS FOR DENYING THE WRIT ........ 9

Summary of Argument ........... ees bale 9

ili

Contents

Page

I. THE FIRST CIRCUIT CORRECTLY APPLIED

WELL-ESTABLISHED SUMMARY JUDGMENT

STANDARDS AND ITS DECISION DOES NOT

CONFLICT WITH KODAK ............... 10

A. The Summary Judgment Standards Are

Well Established; No Important Federal

Question Is Raised by Application of

Those Standards to the Record Facts of

ME Si os cues eeec esas 10

B. The First Circuit’s Decision — and Its

Analysis of Section 2 of the Sherman Act

—— is Entirely Consistent with Kodak and

Other Supreme Court Precedent ...... 12

Il. THE FIRST CIRCUIT RIGHTLY

IDENTIFIED A NUMBER OF WAYS IN

WHICH SMS FAILED TO PRODUCE

SUFFICIENT EVIDENCE TO SUPPORT

SEVERAL ESSENTIAL ELEMENTS OF

sam Gee rit 2 CLAIM ............;.. 15

A. SMS Failed to Present Evidence of the

weppenen “Lockie”... .. =. ....5..;., 15

B. SMS Failed to Rebut Undisputed

Evidence of Digital’s Legitimate

Business Interest in Adopting the

MOIR coed pea 17

iv

Contents

Page

C. SMS Failed to Provide Any Evidence of

Another Essential Element of Its Claim:

PR I os oe he kee | 19

Il. THERE IS NO CIRCUIT SPLIT; THE

FIRST CIRCUIT’S OPINION IS

CONSISTENT WITH THE OTHER

CIRCUIT COURT CASES ON

AFTERMARKET ISSUES AND WITH

i | ape tar per eae ee remarecye Slt rn Ue Pi, Carers. 20

CR SY vars Rhee SA ae SEs eS 24

Vv

TABLE OF CITED AUTHORITIES

Page

Cases:

Acosta-Mestre y. Hilton Int’] of Puerto Rico,

156 F.3d 49 (1st Cir. POE ay cues 16

Anderson y. Liberty Lobby, Inc., 477 U.S. 242 (1986)

+o 649 Oba e bee ee eka galas ce een 10, 11, 16, 20

Aspen Skiing Co. y. Aspen Highlands Skiing Corp.,

472 U.S. 585 CREE eleva d ay ee 18

Brown Shoe Co. y. United States, 370 U.S. 294

CREP ss OLS ve dade ee, ed Bee 14

Celotex Corp. y. Catrett, 477 U.S. 317 (1986) .... 10

Datagate, Inc. v. Hewlett-Packard Co., 60 F.3d 1421

(9th Cir. 1995), cert. denied, 517 U.S. 1115 (1996)

“8465 50 O82 thee ewe PWG Nie Ge wet ee gels Bans 22

Daubert v. Merrell Dow Pharmaceuticals, Inc.,

303 U.S. SIP CUM) sic is eed ee eat 16

Digital Equip. Corp. y. Unig. Digital Tech., Inc.,

73 F.3d 756 (7th Cir. RSs anche ee 23

Eastman Kodak Co. y. Image Technical Servs., Inc.,

TORUS. ASU GONE fo ae ees passim

Grappone, Inc. v. Subaru of New England, Inc.,

858 F.2d 792 (1st Cir. i ORR tyesecctec oy Daye 18

vi

Cited Authorities

Page

Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S.

2ODERD occ oe see kee tances ere eee 23

Kumho Tire Co. v. Carmichael, 526 U.S. 137, 119

S. Ce. FGF CGS so ove enckan eee eee 20

Lee v. Life Ins. Co. of N. Am., 23 F.3d 14 (Ast Cir.),

cert. denied, 513 U.S. 964 (1994) ............ 6, 14

Marts v. Xerox, Inc., 77 F.3d 1109 (8th Cir. 1996)

sw ns 60 le hw eee Ree peak ne 23

Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio

Corp., €73 US. SPE CFs eh tes sense 10, 11, 17

Medina-Munoz v. R.J. Reynolds Tobacco Co.,

S96 F.26 5 (iat Coe, 1G kis kg cess 11

Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S.

Tek CI9R®) on vinedaieiaieiae eee 1]

PSI Repair Serv. Inc. v. Honeywell, Inc., 104 F.3d

811 (6th Cir.), cert. denied, 520 U.S. 1265 (1997)

5 5 0 Wilke & 4 Shia gk Rn ace ine ae mn 23

Red Lion Med. Safety, Inc. v. Ohmeda, Inc.,

63 F. Supp. 2d 1218 (E.D. Cal. 1999) ........ 22

Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447

(i) Pe cr Were Cre 19

vil

Cited Authorities

Page

Springfield Terminal Ry. Co. v. Canadian Pac. Lid.,

133 F.3d 103 (1st Cir. ipsa AE ee OEE 10, 11

United States y. Grinnell, 384 U.S. 563 (1966) ... 13

Statutes:

REIN 9 tne hada pucceies eu ee 1, 6

athe hace oh Sync, SE ORO PCE ECD 2

dts ch inn. , PERRIER 2

15 U.S.C. § 2302(b)(1)(A), et og, TE STI 2

Rule:

POG: Oe Oe uc 11

Other Authorities:

3A Areeda & Hovenkamp, Antitrust Law { 761

SPMD icty Slanted anes eee eel 2,15

11A Areeda & Hovenkamp, Antitrust Law q 531

(EP IOP is iss than accep ewes nc eee 13, 14

Niskanen, Freedom of Contract as Tort Reform,

1 Mich. L. & Pol’y Rev. 1 eee aa 2

l

RESPONDENT’S STATEMENT OF THE CASE

Introduction

This case arises out of Digital’s decision, Starting in 1994,

to promote the sales of its new line of 64-bit Alpha computers

by introducing them with a standard three-year hardware

warranty. In doing so, Digital was matching the standard three-

year warranty offered on competitive Compaq machines, beating

the warranties of other competitors such as IBM, Hewlett-

Packard and Sun Microsystems, and demonstrating to

purchasers of the novel 64-bit technology that Digital stood

behind its innovative product.

Petitioner SMS, acompany which provides “multi-vendor”

service to computers manufactured by a number of different

companies, including Digital, then sued, claiming that Digital

is barred by Section 2 of the Sherman Act, 15 U.S.C. § 2, from

competing in the fiercely competitive computer industry by

offering new products with a standard warranty that is included

in the price of the product. In particular, SMS claimed that

Digital’s warranty constitutes an unlawful attempt by Digital

to monopolize what SMS claims is the derivative aftermarket

for “services relating to Digital’s computers.”

In a decision dated August 19, 1999 and reported at 188

F.3d 11, the United States Court of Appeals for the First Circuit

affirmed a decision of the United States District Court for the

District of Massachusetts (Harrington, J.), granting summary

judgment against SMS’s claims.' SMS has now petitioned this

Court for a writ of certiorari to review the First Circuit’s decision.

For the reasons set forth below, the petition should be denied.

1. The District Court’s decision is reported at 1! F. Supp. 2d

166.

2

Background Facts

A. Warranties and Competition.

Automobiles. Televisions. Stereos. VCRs. Copiers. Printers.

Computers. Just about every durable good comes with a

warranty. Standardized product warranties have been in use by

manufacturers since at least the late 1800s. Manufacturers of

durable goods have long competed for customers by offering

warranty terms that are the same as, different from, or better

than, those of their competitors. 3A Areeda & Hovenkamp,

Antitrust Law J 761, at 55 (1996) (warranty protection is a tool

of “non-price competition”); Niskanen, Freedom of Contract

as Tort Reform, | Mich. L. & Pol’y Rev. 1, 4 (1996) (“Firms

can and do compete with respect to warranties . . . just as well

as they compete with respect to any other product characteristic

....’); see also Magnuson-Moss Warranty Act, 15 U.S.C.

§§ 2301, 2302(a), 2302(b)(1)(A), et seq.

It was undisputed below that computer manufacturers have

traditionally sold computers with standard warranties ranging

from one to three years, and more for certain components.

SA125, 129; SA90-91; A22.? For example, prior to 1994,

Digital’s computer products had a base-level “product

foundation” warranty that was included in the price of the

computer. SA484-85; SA195, 200-202. Also undisputed is that

computer equipment manufacturers like Digital have vigorously

competed with one another by offering longer and

more comprehensive warranty protection on new equipment.

SA93-104; SA318-19.

2. The record Appendix and Supplemental Appendix on appeal

are cited as “A__” and “SA__,” respectively. The District Court’s

and First Circuit’s opinions are cited as “Mem. at __” and

“Op. at __,” using the pagination in SMS’s Petition.

Sashes ED tile eb at

3

B. Digital’s Adoption of Three-Year Warranties on

Certain Products and the Legitimate Competitive

Reasons for That Adoption.

The warranties at issue in this Case are three-year warranties

on certain computer systems sold by Digital beginning in 1994.

At that time, Digital was introducing a new line of computers

— the “Alpha” computers — which were driven by Digital’s

innovative 64-bit Alpha chip. SA126.3

The computer marketplace into which the Alpha systems

were introduced is highly competitive. Prospective computer

customers can choose from competing machines offered by such

companies as IBM, Hewlett-Packard, Compaq, Sun

Microsystems and Dell: they can choose different models from

Digital; they can obtain computers on the used and refurbished

equipment market; or they can choose to continue to use their

existing equipment. SA127, 133. The warranty terms offered

with the many competing products vary not Only in duration,

but also in specific terms relating to speed of service and time

of coverage. Jd. SA125.

Digital provided extensive record evidence confirming that

a substantial number of customers preferred three-year

warranties. Industry watch dogs, including Dataquest, had

reported that three-year warranties were becoming a trend that

other manufacturers would follow. SA128. By 1997, a Dataquest

survey found that 39% of server customers required a warranty

of three years or more. SA87. And, a research report that SMS

itself introduced below confirms that Digital customers

“considered [the three-year warranty] to be standard for

competitive products in the class.” SA915. Digital’s competitor,

Compaq, in adopting its three-year warranties, independently

3. One year later, after a consumer survey conducted for Digital

by an outside consultant demonstrated a consumer preference for

three-year warranties, Digital also adopted a standard three-year

warranty for new sales of certain updated versions of its older line

of VAX computers. SA129-30; SA137-52.

4

concluded that consumers “generally preferred three-year

watranties . .. over one-year warranties.” SA4.

Digital also provided extensive evidence that it had adopted

its three-year warranty for a number of legitimate business

purposes: to respond to competition; to be at the forefront of

the trend toward longer warranties; to differentiate its products

from those with lesser warranties; to signal to customers that

Digital would stand behind its products; and ultimately to make

Digital’s products more attractive to customers. SA126-28. As

an industry analyst put it, the move to three-year server

warranties was “the result of one very strong market force —

competition.” SA89; see also SA109, 114.4

The length of Digital’s warranties, and the specific terms

of the warranty (describing what was covered and what was

not), were fully set forth in written materials provided to

customers and were readily available through Digital and other

companies who sold Digital computers. SA154-67, 266-301;

SA126, 129, 131. SMS conceded that “customers are fully aware

that they are paying for the three-year warranty.” A82.

C. Service and Maintenance of Computers.

Computer users have several choices for servicing and

maintaining their computer equipment. SA169-70. Warranty

service is available for computers that are under warranty. Users

also have the option of doing their own service on their

equipment. /d. And, users can obtain service from entities that

provide hardware maintenance services through service

contracts or on a spot basis. /d. There are thousands of companies

4. Digital offered its Alpha systems at a price that incorporated

the three-year warranty. Digital’s prices were set to compete directly

with other products offered with lesser warranties. SA126; SA859-

64.

5. Digital’s customers could also choose to buy Alpha or VAX

systems without three-year warranties through an active used and

refurbished equipment market. A213-14; SA133.

Se the Mt a a Ghd 2 Oem 2 ie Dare Tings ta elated »

5

— including large companies operating nationwide — capable

of providing service on Digital’s computers (and on those of

other manufacturers) through what is widely known as “multi-

vendor customer service.” SA170-71: SA171-73; SA184-86A

(listing over 60 companies). They include “Independent Service

Organizations” (“ISOs”) which are not affiliated with any

particular manufacturer. SA 169-70. SMS is an ISO.

Significantly, Digital’s warranty does not limit a

purchaser’s ability to use service providers besides Digital

during the warranty period. While under warranty, the computer

may be serviced by any other service provider — including

[SOs like SMS — and Digital does not revoke the warranty or

otherwise penalize a customer if it goes elsewhere for service

during the warranty period. SA132; SA154-66.

SMS came forward with no evidence that Digital’s adoption

of three-year warranties has caused any harm to competition

for services relating to Di gital’s computers. Not a single witness

or affidavit stated that the warranty has caused any service

company to go out of business, has resulted in an increase in

service prices, or has caused a reduction in supply or quality of

service for Digital machines. To the contrary, it was undisputed

that SMS and other companies continue to compete and continue

to offer service to all Digital users. SA13-16, 21-23; SA33, 36-

38, 42-45, 51-53; SA68-69; SA172. Competition for services

has continued to be robust before, during and after Digital

adopted three-year warranties.®

6. Indeed, SMS’s president and owner testified that SMS was

providing service to Alpha computers even before the three years

had expired since Digital introduced the three-year warranties in

1994. SA14-16. He also testified that SMS has been competing with

Digital and others for service contracts as Digital’s machines came

off warranty. SA21-23. And he identified fifteen other companies

providing service to Digital computers and competing with Digital

and SMS. SA13, 29-30. SMS’s president also admitted that SMS

was able to hire trained technicians for Digital equipment, and that

parts for Digital computers were readily available, including from

Digital itself. SA19-20, 24-25, 28.

D. Procedural History.

SMS alleged in its amended complaint that Digital adopted

three-year warranties in place of the previous one-year warranty

in order to drive SMS and other service providers out of business

by preventing them from competing for the sale of services to

Digital computer users. A23-24. SMS asserted a federal antitrust

count under 15 U.S.C. § 2, plus two derivative state-law claims.

The parties conducted extensive discovery, including expert

reports and depositions, over more than a year. SA 56-122;

SA168-86A. In moving for summary judgment, Digital

presented several alternative grounds: (i) the court should assess

the monopoly power issue in the context of the primary

equipment market, in which SMS conceded Digital held an

insubstantial share, not in the alleged aftermarket for services;

(ii) SMS could not show the required “antitrust injury”; and

(i11) undisputed evidence established that Digital was acting with

a legitimate business purpose when it adopted its warranties.

After a hearing, the District Court granted summary

judgment for Digital. Among other things, the court noted the

applicability of the Supreme Court’s admonition that: “It is

undisputed that competition is enhanced when a firm is able to

offer various marketing options, including bundling of support

and maintenance service with the sale of equipment. Nor do

such actions run afoul of the antitrust laws.” Eastman Kodak

Co. v. Image Technical Servs., Inc., 504 U.S. 451, 478-79 (1992)

(hereinafter “Kodak’’). Mem. at 39A. The court also found that

all the circuit courts to address similar claims since Kodak had

rejected attempts, like that of SMS, to “shoehorn their allegations

into [the] Kodak ‘derivative aftermarket’ model.” Mem. at 38A-

42A (citing Lee v. Life Ins. Co. of N. Am., 23 F.3d 14, 18 (1st

Cir.), cert. denied, 513 U.S. 964 (1994)). The court also

recognized correctly that Digital’s warranties were adopted for

the legitimate business purpose of promoting sales in the

computer equipment market. Mem. at 39A, 42A. SMS appealed.

. BBS OA LAT Bla ER ars Loe be ee dao ih Satie oie Se a aE ee ABA iS

7

E. The First Circuit’s Decision.

After oral argument, the First Circuit entered its decision

on August 19, 1999, and denied a subsequent motion for

reconsideration without opinion on September 13, 1999. The

First Circuit’s opinion, written by Judge Selya, affirmed the

grant of summary judgment on several different grounds.

First, the First Circuit concluded that SMS had failed to

demonstrate a genuine issue of material fact as to Digital’s

alleged monopoly power, regardless of how the relevant market

was defined. Op. at 13A. SMS Claimed that, for purposes cf

assessing monopoly power, the relevant market was the alleged

aftermarket for servicing Digital mid-range servers and that the

First Circuit could not consider the undisputed competition

Digital faced in the primary equipment market. Op. at 8A. The

First Circuit followed Kodak, however, and held that it was

appropriate to take record evidence of primary market

competition into account, and to assess the monopoly power

issue in light of all the relevant facts in the record. Op. at 8A-

12A.

Assessing all those facts, the First Circuit rejected SMS’s

contentions that this case was really just like Kodak. For

example, SMS asserted that information costs in the alleged

Digital service aftermarket had distorted market behavior just

as they had in Kodak. Op. at 13A. The First Circuit disagreed

and found Kodak to be fundamentally different on its facts: “The

Kodak Court’s discussion of information costs stemmed almost

exclusively from the concern that the type of information

necessary for allowing the primary market to check

anticompetitive behavior in the aftermarket was unavailable to

the average copy machine purchaser.” Op. at 14A. Here, the

record directly contradicted the existence of such “information

deficits” in the alleged Digital service aftermarket. Op. at 14A.

The warranty’s existence was “obvious to any purchaser in the

primary market.” Op. at 14A. Moreover, the purely “prospective

a i

8

nature of the warranty” undermined any analogy to the “bait

and switch” tactics found to be problematic in Kodak.

Op. at 1ISA-16A.

The First Circuit also held that SMS had failed to “create a

genuine issue” as to the existence of an alleged “locked-in”

customer base. Op. at 17A. Again relying on Kodak, SMS had

attempted to draw an analogy “between the Kodak plaintiffs’

need to buy copier parts and the perceived need of those who

already own Digital computers to purchase any new hardware

from Digital (rather than its competitors).” Op. at 16A. SMS

asserted that such customers were “locked-in” to buying new

hardware from Digital due to alleged “switching costs.”

Op. at 16A-17A. After reviewing the materials proffered by

SMS, the First Circuit found that “SMS had not proffered

Significantly probative evidence sufficient to create a fact

question as to whether this alleged switching cost is material to

a large enough segment of Digital’s installed base to harm

competition.” Op. at 18A. Moreover, review of the record

afforded “no reason to believe that an appreciable number of

Digital users are, in fact, significantly locked-in to making repeat

purchases of Digital mid-range computers.” Op. at 20A. Stating

that “[a] lock-in phenomenon must be shown, not assumed,”

the Court determined that SMS had not made a sufficient

showing to defeat summary judgment. Op. at 20A-21A, 24A.

PaaS ci avheite Ain it ba aba ye rig

‘e FOR As Rise 05) yal ARE 9 ek eee eit wh pO ee

After citing a number of other “empirical” shortcomings

in SMS’s case, Op. at 26A-28A, the First Circuit looked at the

other required elements of SMS’s Section 2 claim: lack of a

legitimate business purpose and antitrust injury. On the first of

these, the Court found, as an independent basis for summary

judgment, that SMS had failed to produce evidence that Digital’s

warranty was anything other than “a legitimate sales tool.”

Op. at 30-31A. And, on the antitrust injury requirement, the

Court determined that SMS had failed to establish any

anticompetitive injury resulting from Digital’s warranty.

Op. at 33A.

9

REASONS FOR DENYING THE WRIT

Summary of A rgument

The three “Questions Presented” asserted by SMS all go

to the issue of whether Summary judgment was appropriate on

the unique record of this case. A writ of certiorari on any of

these “Questions” js inappropriate here for three reasons.

First, there is no controversy concerning the appropriate

summary judgment standards, and nothing about the way the

First Circuit applied those standards is worthy of review. Not

only did the First Circuit apply the right standards to the

particular facts of this case, but the First Court’s analysis was

also entirely consistent with Kodak, in which this Court Stated

its preference “to resolve antitrust claims ona case-by-case basis,

focusing on the particular facts disclosed by the record.” Kodak,

504 U.S. at 467.

Second, this Court should not review this case because the

Court cannot avoid becoming entangled in case-specific

evidentiary issues. In applying the appropriate summary

judgment standards, the First Circuit properly identified a series

of gross deficiencies in the evidence proffered by SMS. These

deficiencies included SMS’s complete failure to come forward

with admissible evidence of antitrust injury or exclusionary

conduct. SMS’s evidentiary failures on these points provide

alternative grounds for summary judgment that are independent

of the “Questions” raised by SMS in its Petition.

Third, the First Circuit’s decision does not create or add to

any circuit split. SMS does not identify any particular issue on

which there is a split, nor is there any such issue. Each of the

cases cited by SMS is entirely consistent with Kodak, with each

other, and with the First Circuit’s opinion. To the extent any of

these cases vary in outcome, it is the result of the different facts

of each particular case.

10

I. THE FIRST CIRCUIT CORRECTLY APPLIED

WELL-ESTABLISHED SUMMARY JUDGMENT

STANDARDS AND ITS DECISION DOES NOT

CONFLICT WITH KODAK.

SMS’s principal argument for certiorari boils down to the

proposition that the First Circuit simply misapplied well-

established summary judgment standards to the particular facts

of this case. Not only is SMS wrong about this, but the issue

itself is plainly not worthy of review by this Court.

A. The Summary Judgment Standards Are Well

Established; No Important Federal Question Is

Raised by Application of Those Standards to the

Record Facts of this Case.

As SMS concedes, “numerous decisions of this Court focus

on summary judgment standards.” Pet. at 10 (citing,

e.g., Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986);

Celotex Corp. v. Catrett, 477 U.S. 317 (1986); Matsushita Elec.

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

and Eastman Kodak Co. v. Image Technical Serv., Inc., 504 U.S.

451 (1992)). In cases such as Matsushita and Kodak, this Court

has discussed and clarified the role of summary judgment in

antitrust cases, and nothing that SMS raises in its petition creates

any need for this Court to revisit the applicability of well-

established summary judgment rules to the particular facts of

this case.’

7. It is well-settled that only issues of fact that are “genuine”

and truly “material” will stave off summary judgment. Celotex, 477

U.S. at 325-27; accord Springfield Terminal Ry. Co. v. Canadian

Pac. Ltd., 133 F.3d 103, 106 (1st Cir. 1997). A “material” fact is one

that “might effect the outcome of the suit.” Liberty Lobby, 447 U.S.

at 248. A dispute concerning a material fact is “genuine” only if

“the evidence is such that a reasonable jury could return a verdict

for the nonmoving party.” /d. If the evidence proffered by the non-

(Cont'd)

Pe ie ge Re eee aa Be IEP

1]

SMS’s argument that the First Circuit engaged in “judicial

abuse of summary judgment,” Pet. at 10, is based on distortions

of the First Circuit’s opinion. For example, the court did not

“ma[k]e assumptions and weigh[ ] evidence.” Pet. at 11. The

First Circuit reviewed the record and determined that SMS had

failed to create a genuine issue of material fact on the critical

elements of its Section 2 claim. See, e.g., Op. at 13A (SMS has

not “managed to create a genuine issue of material fact as to

[Digital’s] alleged monopoly power’). Nor did the First Circuit

base its decision “on the legal presumption that Digital’s product

warranty is ‘pro-competitive’ — indeed ‘per se’ lawful.” Pet. at

7. Rather, the court merely recited the undisputed record

(Cont'd)

moving party is “merely colorable, or is not significantly probative,

summary judgment may be granted.” Jd. at 249-50. Moreover, such

evidence must be admissible if it is to be considered on summary

judgment. Fed. R. Civ. P. 56(e).

While it is true that inferences must be drawn in favor of the

non-moving party, such inferences must be justifiable. Kodak, 504

U.S. at 456 (citing Liberty Lobby, 477 U.S. at 255 and Matsushita,

475 U.S. at 587). On the other hand, unsupported assessments,

conclusory allegations, and Speculative suppositions Carry no weight.

Liberty Lobby, 447 U.S. at 249-50; accord Springfield Terminal,

133 F.3d at 106; Medina-Munoz y. R.J. Reynolds Tobacco Co., 896

F.2d 5, 8 (Ist Cir. 1990).

It is equally clear that summary judgment is no longer disfavored

in antitrust cases. Matsushita teaches that courts should regard

antitrust challenges to apparently competitive practices with a

skeptical eye. 475 U.S. at 594. When an antitrust theory presents “a

Significant risk of deterring procompetitive conduct[,]” inferences

should be drawn very carefully. Kodak, 504 U.S. at 478 (recognizing

that mistaken inferences in antitrust cases “would be ‘especially

costly,’ and would ‘chill the very conduct the antitrust laws are

designed to protect.’ ”): see also Monsanto Co. v. Spray-Rite Serv.

Corp., 465 U.S. 752, 763 (1984) (refusing to infer concerted action

when doing so would “deter or penalize perfectly legitimate

conduct”). The First Circuit properly applied all these familiar

standards in this case.

12

evidence establishing that warranties are generally used as

“instrument[s] of competition” and that they tend to increase a

“product’s allure” in the eyes of consumers. Op. at 3A-4A. The

First Circuit also did not simply “dismiss SMS’s claims as ‘less

plausible’ than [Digital’s].” Pet. at 8. Rather, it reviewed the

record and found the evidence allegedly supporting SMS’s

claims to be lacking. Op. at 34A (“Here, the record contains no

significantly probative evidence that [Digital] is engaged in

sinister practices or otherwise suffocating competition . . . .”).®

Simply put, there is nothing about the First Circuit’s

application of the well-established summary judgment standards

that raises any important issue of federal law or otherwise

requires review by this Court.

B. The First Circuit’s Decision — and Its Analysis of

Section 2 of the Sherman Act — is Entirely Consistent

with Kodak and Other Supreme Court Precedent.

There is equally no reason for the Court to grant certiorari

to address what SMS vaguely describes as a “conflict” between

the First Circuit’s decision and Kodak “regarding summary

judgment review.” Pet. at 13. Not only is SMS again

mischaracterizing the First Circuit’s opinion, but in every

particular the opinion is consistent with Kodak and is correct as

a matter of law.

SMS asserts that the First Circuit’s opinion is inconsistent

with Kodak because it “failfed] to define a relevant market,”

and “ignored compelling evidence that Digital possessed

monopoly power.” Pet. at 9, 16, 17. This assertion grossly

distorts what the First Circuit actually did. In reality, the First

8. The First Circuit also did not “characterize[ ] SMS’s theory

as ‘offbeat, ” as if to denigrate it, as SMS asserts. Pet. at 8. To the

contrary, the court used the word “offbeat” only in a positive sense,

as it expressly stated that “[t]here is ... a-certain offbeat logic to

SMS’s position.” Op. at 4A.

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13

Circuit correctly determined that — to survive summary

judgment in a situation where Dj gital presented extensive record

evidence to support its position — SMS had to demonstrate the

existence of a genuine issue of material fact concerning Digital’s

alleged possession of “monopoly power in the relevant market.”

Op. at 7A (citing United States y, Grinnell, 384 U.S. 563, 570-

71 (1966)). The court properly addressed the very essence of

the summary judgment issue: whether there was sufficient

evidence in the record to “support[ ] an inference of monopoly

power in the aftermarket...” Op. at 11A (emphasis added).

On the record of this case, the First Circuit rightly concluded

that SMS had not demonstrated any genuine issue of fact on

the issue of monopoly power, no matter how the relevant market

was defined. Op. at 12A-13A.

The First Circuit did not err in addressing the issue in this

manner. Consistent with this Court’s express statements in

Kodak, the First Circuit recognized that, in assessing the

possibility of monopoly power, it must consider the evidence

of how competition in the primary equipment market influences

the possibility of monopoly power in the aftermarket, including

the evidence — if any — which “dissociat[es] the competitive

Situation in the aftermarket from activities occurring in the

primary market.” Op. at 11A. Indeed, this is what Kodak

required when it mandated that courts conduct “a factual inquiry

into the ‘commercial realities’ faced by consumers.” 504 U.S.

at 482.” See also 11A Areeda & Hovenkamp, Antitrust Law

9. As the First Circuit acknowledged, SMS’s own

theory depends on the Proposition that [Digital] asserts

power in the services aftermarket only by forcing matters

in the primary computer equipment market .... This

approach, in and of itself, invites us to look at the

primary market, and thus tends to confirm our

conclusion that, in determining whether [Digital] enjoys

aftermarket monopoly, we cannot ignore the impact of

the foremarket.

Op. at 12A n. 2.

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14

q 531, at 156 (“Finding the relevant market and its structure

is not a goal in itself but a surrogate for market power”);

Kodak, 504 U.S. at 470 n.15 (“Whether considered in the

conceptual category of ‘market definition’ or ‘market power,’

the ultimate inquiry is the same — whether competition in

the equipment market will significantly restrain power in the

service and parts market.”).'°

Moreover, in addressing the issue of monopoly power,

the First Circuit actually did consider all of the evidence

that SMS now claims it ignored. The court specifically noted

and considered SMS’s allegations that Digital had a high

“share” of the alleged aftermarket, and that SMS contended

that Digital’s parts are “unique.” Op. at 8A-9A. However,

the First Circuit rightly concluded that this information, by

itself, was insufficient to show “monopoly power.” Id. at 9A.

Rather, the court looked at the record as a whole and — as

specifically required by Kodak — looked at the evidence as

to whether Digital actually did have monopoly power in the

alleged aftermarket: “As Kodak teaches, in aftermarket

situations, market power vel non must be assessed by

weighing the complete package of primary equipment, parts

and services.” Op. at 12A. Thus, the court properly focused

On monopoly power, and — even assuming that the

aftermarket could be a relevant market — correctly found

that SMS had not “managed to create a genuine issue of

material fact as to Digital’s alleged monopoly power.”

10. There is no requirement that the First Circuit, in analyzing ‘

monopoly power, first had to “shoehorn” Digital’s warranty policies

into the aftermarket, as SMS claims. See Lee v. Life Ins. Co. of

N. Am., 23 F.3d 14, 18 (ist Cir.) (rejecting plaintiffs’ efforts to

“shoehorn” their allegation into the “Kodak ‘derivative aftermarket’

model’), cert. denied, 513 U.S. 964 (1994). The “market definition”

cases that SMS cites (such as Brown Shoe Co. v. United States, 370

U.S. 294 (1962)) all had to do with defining what group or bundle i

of different products would fall within a single “relevant market” ;

— e.g., are rubber bands in the same relevant market as paper clips b

— not with the issue faced by the First Circuit here. :

15

Op. at 13A. Far from acting inconsistently with Kodak, the

First Circuit was doing precisely what Kodak envisioned and

required.!!

I. THE FIRST CIRCUIT RIGHTLY IDENTIFIED A

NUMBER OF WAYS IN WHICH SMS FAILED TO

PRODUCE SUFFICIENT EVIDENCE TO SUPPORT

SEVERAL ESSENTIAL ELEMENTS OF ITS

SECTION 2 CLAIM.

This case is also not an appropriate candidate for certiorari

review because the First Circuit properly identified a number

of ways in which SMS failed to produce sufficient evidence to

meet its summary judgment burden on critical elements of its

Section 2 claim. Op. at 13A-26A. If this Court were to grant

certiorari, it could not avoid entangling itself in these fact-

specific issues, which are of no importance beyond this matter.

A. SMS Failed to Present Evidence of the Supposed

“Lock-In.”

The first of these evidentiary failures relates to SMS’s

supposed “lock-in” theory, which was pivotal to SMS’s theory

of liability. The First Circuit rightly held that the “evidence” of

lock-in or switching costs proffered by SMS was not sufficient

to create a genuine dispute of fact as to “whether this alleged

11. SMS also argues that the First Circuit improperly “conditioned

any finding of aftermarket monopoly power on proof of a change in

policy, a holding never adopted by this Court.” Pet. at 9. As discussed

in more detail below, SMS mischaracterizes the First Circuit’s holding.

See infra 21.

Likewise unconvincing is SMS’s claim that the First Circuit made

a “determination that warranties are ‘pro-competitive’ . . . and pave[d]

the way for per se legality which has been condemned by this Court.”

Pet. at 10. The First Circuit did no such thing. It merely recited the

“general experience” that warranties are “tools of competition” and

that they tend to increase a “product’s allure.” Op. at 3A-4A (citing 3A

Areeda & Hovenkamp, Antitrust Law ¥ 761, at 55).

16

switching cost is material to a large enough segment of

[Digital’s] installed base to harm competition.” Op. at 18A.

Simply put, SMS’s evidence gave “no reason to believe that

an appreciable number of [Digital] users are, in fact,

significantly locked-in to making repeat purchases of Digital

mid-range computers.” Op. at 20A (emphasis added).

The First Circuit’s conclusions on this point do not raise

any important issue of law, but are based on specific

evidentiary deficiencies. The only evidence proffered by SMS

was the testimony of individuals employed by two of Digital’s

many thousands of customers. These individuals gave their

opinions that it can be costly to migrate to a different platform

once acompany has committed to a certain brand of hardware

and has acquired ancillary software. But this testimony was

neither admissible nor probative. Op. at 21A. These

individuals did not have the personal knowledge or

experience necessary to testify about how companies decide

to purchase new computer hardware; none of them bore the

ultimate responsibility for making such a decision; and none

of them had any specific or detailed knowledge about how

management might calculate switching costs. Jd. None of

them, therefore, could or did testify about the ultimate issue

— “the nature of a company’s decision to purchase new

computer hardware.” Op. at 21A. See Daubert v. Merrell

Dow Pharmaceuticals, Inc., 509 U.S. 579, 592 (1993)

(requirement of first-hand knowledge represents the

“common law insistence upon ‘the most reliable source of

information’ ”); accord Acosta-Mestre v. Hilton Int’l of

Puerto Rico, 156 F.3d 49, 57 (1st Cir. 1998) (district court

properly excluded testimony not based on personal

knowledge).'”

12. The First Circuit also properly determined that, even were

the individuals’ testimony admissible, SMS’s paltry showing was

insufficient to even raise a question of fact that “consumers are

generally worse off as a result of DEC’s warranty policy.” Op. at

(Cont'd)

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Moreover, the First Circuit found that SMS had failed to

produce any evidence that accounted for the “complex nature

of the decision to purchase a new computer system.”

Op. at 22A. According to the court, the record showed that the

“availability of software applications designed to meet current

or anticipated business needs usually is the determinative factor

in choosing whether to buy a new computer.” Jd.'* But SMS

had offered no evidence whatsoever that took “into account the

efficiency gains of buying new software — gains that often may

dwarf hardware price in dollar terms.” Jd.

In short, after reviewing and considering all the evidence

in the record, the court concluded that “[a] lock-in phenomenon

must be shown, not assumed,” and that SMS had not made the

necessary showing. Op. at 20A-21A, 24A. There is no reason

for this Court to review this Case-specific conclusion.

B. SMS Failed to Rebut Undisputed Evidence of

Digital’s Legitimate Business Interest in Adopting the

Warranties.

SMS also failed to provide any evidence that raised a

genuine dispute of material fact on another critical element of

its Section 2 claim. Consistent with Kodak, the First Circuit

(Cont'd)

19A. Liberty Lobby, 477 U.S. at 249-50 (“If the evidence is merely

colorable, or is not significantly probative, summary judgment may

be granted.”) (citations omitted); Matsushita, 475 U.S. at 586

(summary judgment opponent “must do more than simply show that

there is some metaphysical doubt as to the material facts”).

13. SMS offered a marketing survey and report which

confirmed that “[software] ‘applications drive the choice of platforms

.... ” Op. at 22A. In fact, each of the witnesses proffered by SMS

acknowledged that, “all things considered, if a new computer system

would bring more benefits, there would be no objection to the

switch.” Op. at 24A.

18

correctly noted that, “to make out a Section 2 claim, the plaintiff

must show that the alleged monopolist has engaged in improper

exclusionary conduct.” Op. at 30A (citing Kodak, 504 U.S. at

482-83; Aspen Skiing Co. v. Aspen Highlands Skiing Corp.,472

U.S. 585, 600-05 (1985)). As stated above, SMS asserted that

the inclusion of a three-year warranty on new equipment

constituted such “improper conduct.” Op. at 31A. Digital,

however, provided overwhelming evidence of its legitimate

business interests in adopting the warranty. Op. at 3A-4A, 31A.

As this Court recognized in Aspen Skiing, 472 U.S. at 605, “valid

business reasons” are a defense to a Section 2 claim.'*

In response to Digital’s evidence, SMS offered only two

internal Digital documents, neither of which provided any

evidence of improper conduct. Op. at 31A (“neither document

so much as hints at an intent to suffocate the aftermarket”).

Moreover, the First Circuit rightly found that SMS’s

unsupported assertion that Digital adopted its warranty for

anticompetitive purposes “defies common sense.” Op. at 32A.

The only evidence in the record fully documented that Digital’s

warranty was simply a legitimate sales tool which Digital

properly used as a means of growing market share in the primary

market. Op. at 30-31A.

Thus, there was no evidence in the record to support the

“exclusionary conduct” element of SMS’s Section 2 claim, and

14. The record evidence established that Digital’s motive in

adopting the warranties was “to promote the sales of its new Alpha

computers.” Mem. at 36A. It was undisputed that Digital's products

were competing against other manufacturers’ computers with three-

year warranties. Mem. at 39A n.2 (acknowledging warranty terms

of Compag and IBM). It was also undisputed that, by 1997, potential

computer customers had a strong preference for a three-year

warranty. SA87. Digital’s desire to promote sales, satisfy its

customers, and beat or match its competitors constitutes a legitimate,

pro-competitive business purpose. Grappone, Inc. v. Subaru of New

England, Inc., 858 F.2d 792, 799 (1st Cir. 1988) (policy adopted for

the “procompetitive purpose of helping the firm develop or maintain

sales” is a legitimate purpose).

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19

the lack of such evidence provides a basis for summary judgment

that is independent of the First Circuit’s monopoly power

analysis. SMS provides no reason for the Court to review the

First Circuit’s conclusions on the “exclusionary conduct” issue.

C. SMS Failed to Provide Any Evidence of Another

Essential Element of Its Claim: Antitrust Injury.

The First Circuit also correctly held that SMS had failed to

come forward with any evidence of the required “antitrust

injury,” i.e., injury to competition, rather than injury to

competitors. Op. at 33A. Such a failure provides another basis

for dismissing SMS’s antitrust claim. See Spectrum Sports, Inc.

v. McQuillan, 506 U.S. 447, 458-59 (1993).

As recounted above, Digital produced undisputed evidence

that competition is unaffected by its warranties, and that SMS

and other service providers are competing vigorously for service

business on Digital computers sold with three-year warranties.

See Op. at 32A (“ISOs are free to service all [Digital] computers,

including those under warranty, both during the warranty period

and after its expiration.”); SA38-41. As the First Circuit

observed: “[Digital] has placed no restriction on the aftermarket

for service of its products. Parts are available to all market

participants, and there is no indication in the record either that

there are restrictions on their availability or that such a policy is

even being contemplated.” Op. at 32A.

SMS, the record shows, failed to come forward with any

admissible evidence of either a reduction in the supply or quality

of service or an increase in service prices as a result of Digital’s

three-year warranties. The only “evidence” SMS proffered on

this issue, aside from the “self-serving speculation” of an SMS

employee, see Op. at 28A,'* was the affidavit of SMS’s retained

15. SMS’s director of marketing stated that: “It has been my

experience that when [Digital] does not face competition, its prices

tend to be higher. . . Thus, the elimination of competition from SMS

(Cont'd)

20

expert. Op. at 28A, 29A. The First Circuit correctly disregarded

the expert’s conclusions as inadmissible and “deficient on

several levels.” Op. at 29A-30A (citing Kumho Tire Co. v.

Carmichael, 526 U.S. 137, 119 S. Ct. 1167, 1179 (1999)

(“nothing . . . requires a district court to admit opinion evidence

that is connected to existing data only by the ipse dixit of the

expert”)). |

Finally, as the First Circuit correctly stated, “the record is

devoid of any evidence of supracompetitive prices or other

oppressive terms of business in the aftermarket.” Op. at 26A.

SMS produced “no evidence that [Digital] has displayed a

pattern of raising service and parts prices in the aftermarket,

nor is there evidence that the price of the warranty itself

represented a means of extracting monopoly profits.” /d. at n.5.

SMS’s complete lack of evidence on this issue led the court to

properly conclude that “there is no objective indication of harm

to competition... ”’ Op. at 26A, 33A. This, too, is not an issue

worthy of review by this Court, and — indeed — SMS does

not even raise or discuss antitrust injury in its Petition.

Ill. THERE IS NO CIRCUIT SPLIT; THE FIRST

CIRCUIT’S OPINION IS CONSISTENT WITH

THE OTHER CIRCUIT COURT CASES ON

AFTERMARKET ISSUES AND WITH KODAK.

Finally, this Court should reject SMS’s contention that

certiorari is needed to “resolve a growing split among the circuits

regarding the evidence necessary to establish monopoly power

in an aftermarket.” Pet. at 20. There is no such split, and nothing

in the First Circuit’s decision creates or contributes to any split.

(Cont'd)

and other Independent Service Organizations, shou/d result in price

increases to customers.” Op. at 28A (emphasis added). As the First

Circuit correctly noted, such an unsupported opinion is “conclusory

conjecture,” Op. at 28A, which is rightly ignored on summary

judgment. Liberty Lobby, 447 U.S. at 249-50.

21

SMS never identifies — either in its “Questions Presented”

or in the body of its Petition — precisely what legal issue is

supposedly in dispute among the circuits. This is telling, for

there is no circuit split on any issue raised by this case. SMS is

thus reduced to making a general attack on the direction that

certain courts, in various different factual contexts, have taken

in post-Kodak decisions involving an alleged aftermarket.

See Pet. at 21-22.

Moreover, SMS’s entire argument concerning a supposed

circuit split is flawed because it is premised on a

mischaracterization of the First Circuit’s opinion. SMS asserts

that the First Circuit held that evidence of a lock-in “will not

allow for a finding of aftermarket monopoly power unless it is

also accompanied by proof of a policy change.” Pet. at 21 (citing

Op. at 1SA-16A). SMS terms this a “policy change limitation.”

The First Circuit adopted no such limitation.

Instead, at Op. at 15A-16A, the court focused on two

undisputed facts which make Digital’s warranty situation

substantively different from Kodak and from other recent

aftermarket cases. The first fact is that Digital’s warranty is

“transparent” (or known) to buyers of computers in the primary

equipment market. Op. at 14A-15A. The second fact is that

Digital’s warranty is “prospective,” in that it only applied to

purchases of new computers. Op. at 15A. The First Circuit did

not focus on these two facts as evidence of the existence or

non-existence of a “policy change,” as SMS asserts. Rather,

the First Circuit focused on the importance of the “transparent”

and “prospective” nature of Digital’s warranty because it made

Digital’s warranty fundamentally different from the “bait and

Switch” tactics that this Court found to be predatory in Kodak.

Op. at 15A-16A. Nowhere in the First Circuit’s discussion, or

anywhere else in the opinion, did the Court adopt a holding

requiring a “policy change limitation.”

22

When the First Circuit’s opinion is read without the

distortion imposed upon it by SMS, the opinion clearly does

not conflict with any other Court of Appeals case, or with Kodak

or other decisions of this Court.'® Indeed, the First Circuit’s

opinion is entirely consistent with Kodak in that it examined

16. SMS cites three circuit court opinions as examples of the

supposedly “correct” role of evidence of “policy change” in a post-

Kodak analysis of market power in an alleged aftermarket. Pet. at 22.

None of these cases even discuss policy changes, however, for a simple

reason: there was no evidence of any policy change before the courts.

Rather, the cases presented other facts from which the courts determined

that plaintiffs had presented sufficient evidence of market power for

summary judgment purposes. See, e.g., Datagate, Inc. v. Hewlett-

Packard Co., 60 F.3d 1421 (9th Cir. 1995) (evidence concerning dollar

volume of contract was sufficient to preclude finding on summary

judgment that tying arrangement affecting only one customer was

“insubstantial” and did not have a sufficient impact on competition),

cert. denied, 517 U.S. 1135 (1996). Put simply, none of these cases

creates any “circuit split” when they do not discuss, consider or adopt

the so-called “policy change” limitation that SMS contends is erroneous.

As for Red Lion Med. Safety, Inc. v. Ohmeda, Inc., 63 F. Supp. 2d

1218, 1229-1232 (E.D. Cal. 1999), a recent district court case which

came out only days before the First Circuit’s decision, that case is clearly

factually distinct from the present case. Red Lion involved restrictive

parts policies imposed on an alleged aftermarket; no warranty was

involved. Moreover, far from “rejecting the policy change limitation

on market power” as alleged by SMS, the district court simply

determined that evidence of a policy change was not the only evidence

which would permit an inference of market power in an aftermarket on

summary judgment. /d. at 1230-31.

Finally, SMS’s assertion of a “conflict” involving various

aftermarket cases ignores the fact that each of the cases was addressing

unique factual circumstances and different evidentiary records. Each

of the courts appropriately reviewed the unique facts in its record and

applied Kodak to those facts. That there was a different result in the

cases based on the facts presented does not create a “split” in the circuits.

The findings and results in each of the aftermarket cases cited by SMS

are entirely consistent with the First Circuit's opinion, as well as with

the other circuit court opinions attacked by SMS.

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23

the evidence actually in the record in order to determine what

evidence, if any, there was of an impact of the warranty on

consumers. Certainly, the First Circuit itself did not recognize

that its decision conflicts with any other Court of Appeals

decision; to the contrary, it recognized that it is consistent with

and in tune with the general consensus among all the courts

which have considered aftermarket issues. See, e.g., Op. at 15

(citing as “accord” with PSI Repair Serv. Inc. v. Honeywell,

Inc., 104 F.3d 811, 819-820, 822 (6th Cir.), cert. denied, 520

U.S. 1265 (1997)); Op. at 16A (citing Digital Equip. Corp. v.

Uniq. Digital Tech., Inc., 73 F.3d 756, 763 (7th Cir. 1996)).

The First Circuit’s opinion also does not create or add to

any circuit split because it is the only case to address directly

the alleged anticompetitive impact of a warranty policy.!’

Warranties are different from the various other alleged

aftermarket practices (such as restrictive Spare parts policies)

which are discussed in Kodak and the other cases relied upon

by SMS. As the First Circuit rightly noted, there was extensive

evidence in the record of the legitimate, pro-competitive

purposes of Digital’s equipment warranties, and of the fact

that those warranties were both transparent and prospective.

Op. at 3A-4A, 13A-16A, 30A-31A. The only other circuit court

decision to touch on warranty issues in a similar antitrust context

is Marts v. Xerox, Inc., 77 F.3d 1109, 1112 (8th Cir. 1996). The

First Circuit here expressly agreed with the Eighth Circuit in

concluding that, “as long as a warranty does not limit a

customer’s choice of service provider, there is usually no

antitrust problem.” Op. at 19A, (also citing Jefferson Parish

Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 12 (1984)).

17. SMS does not cite, because it cannot, any other case in

which a warranty has been challenged on antitrust monopoly

grounds. The factual context of this case is unique; and there is no

groundswell of similar or related cases that would make it important

for this Court to address this type of fact pattern.

24

In short, there is nothing about this case that makes it worthy

of this Court’s review. Even if there were a circuit split on some

discrete, identifiable issue — which there is not — this case

still would not be a good vehicle to resolve or address that issue,

because of all the case-specific factual reasons stated above,

and because of the alternative grounds the First Circuit gave

for its decision.

CONCLUSION

For the foregoing reasons, respondent respectfully requests

that this Court deny the petition for writ of certiorari in this

case.

Respectfully submitted,

J. ANTHONY Downs

Counsel of Record

ANTHONY S. FIotTo

JENNIFER GRACE MILLER

GoopDwin, PROCTER & Hoar LLP

Attorneys for Respondent

Exchange Place

Boston, Massachusetts 02109-2881

(617) 570-1000