Petition for Writ of Certiorari — Infusion Resources, Inc. v. MiniMed, Inc.

Cr) aati (i; tenn

031464 APR 1 42004

No.

In the

Supreme Court of the United States

INFUSION RESOURCES, INC., AND

DIABETES RESOURCES, INC., D/B/A INSULIN

INFUSION SPECIALTIES, PETITIONERS

¥.

~MINIMED, INC., RESPONDENT

ON PETITIGN FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

PETITION FOR WRIT OF CERTIORARI

ROBERT S. ABDALIAN MATTHEW K. BROWN

Counsel of Record SULLIVAN STOLIER

1050 S. Jefferson Davis, Pkwy & RESOR

New Orleans, LA 70125 909 Poydras Street

(504) 304-2308 SUITE 2600

New Oryxieans, LA 70130

(504 561-1044

Counsel for Petitioners

QUESTIONS PRESENTED

Whether a Robinson—Patman Act plaintiff must

show not only price discrimination competition with

the favored buyer at the same functional level! and

within the same geographic but also competition for

the very same customer and the very same doliar.

PARTIES TO THE PROCEEDING

Petitioners:

Infusion Resources, Inc. and Diabetes Resources,

Inc., d/b/a Insulin Infusion Specialties

Respondent:

MiniMed, Inc.

MiniMed was purchased by Medtronic, Inc., in

2001 and is now known as Medtronic MiniMed, a

wholly owned subsidiary of Medtronic. On April 15,

2002, the district court entered an Order granting

IIS’s Motion for Addition of Corporate Defendant af-

ter Merger, thereby adding Medtronic MiniMed, Inc.,

as the named Defendant. See Rec. Doc. 131. Appen-

dix C, 21a.

TABLE OF CONTENTS

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APPENDIX

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TABLE OF AUTHORITIES

Cases

Belle Pass Terminal, Inc. v. Jolin, Inc., 618 So. 2d

RF I, BG, TID ivcnsscievncaieicanssetereicinaxeveces 15

Falls City, Indus., Inc. v. Vanco Beverage, Inc.,

er HC vhiniiccsncsaseckicicivccbaponiecmnzamenn 20

Godfrey v. Pulitzer Publishing Co., 276 F.3d 405 .

I Es Ie isnisccansuvacadadacatsivcndensubicdanssnancguadumeneisacen 6

J. Truett Payne Co. v. Chrysler Credit Corp., 451

57 BF CEE cckvtbnarmnmnnnnanninean 16, 17, 19

Jessen v. Dr. Kenneth W. Wimberly, D.D.S., 610

So. 2d 262 (La.App. 3 Cir. 1008) .....cccccrcsorcsssscccressess 15

Lycon Inc. v. Juenke, 250 F.3d 285 (5th Cir.), cert.

denied, 122 S. Ct. 209, 151 L. Ed.2d 149 (2001) ...... 16

M.C. Mfg. Co. v. Texas Foundries, Inc., 517 F.2d

Se Cee GI Be atsina chet cteadsincs heen 4

Texaco, Inc. v. Hasbrouck, 496 U.S. 543 (1990)16, 17, 20

Statutes

BU WA BIO inncrereiieiiatdion ae passim

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Other

Groopman, Annals of Medicine, The New Yorker,

POEM BO, OD vasicsidacéssectersisecenicssced ba ee 8

James A. Pikl, The Myth of “Functional Availabil-

ity” and the Robinson-Patman Act, 2002 Fed. Cts.

L. Rev. 1 [101] (Jan. 2002) http://www.fclr.org/

2002fedctslrev1 htm .0..... ee cccccccccccceccsecccecececcs.... 6, 18

OPINIONS BELOW

The opinion of the United States Court of Appeals

for the Fifth Circuit that gives rise to this petition is

reported at 351 F.3d 688. It is reprinted in Appendix

A (la).! The opinion of the District Court for the

Eastern District of Louisiana is not published, filed

under seal, and is included in Appendix C (20a).

JURISDICTION

The opinion of the Court ot Appeals for the Fifth

Circuit was entered on December 5, 2003. A timely

petition for rehearing was denied on January 15,

2004. Appendix B (19a). This petition for writ of cer-

tiorari is filed within 90 days of the date on which

the appellate court denied rehearing. The jurisdic-

tion of the Court is invoked under 28 U.S.C.

§ 1254(1).

1 References to “A” are to the Appendix; references to

“R.E.” are to the Record Excerpts in the Court of Appeals. Ref-

erences to the sealed record are designated S.R.[Doc.No.}.

Doc.No. refers to the district court Docket Number.

STATUTES INVOLVED

Section 2(a) of the Robinson-Patman Act, 15

U.S.C. § 13(a), provides in pertinent part:

It shall be unlawful for any person engaged

in commerce, in the course of such commerce,

either directly or indirectly, to discriminate in

price between different purchasers of com-

modities of like grade and quality, . . . where

the effect of such discrimination may be sub-

stantially to lessen competition or tend to

create a monopoly in any line of commerce, or

to injure, destroy, or prevent competition with

any person who either grants or knowingly

receives the benefit of such discrimination, or

with customers of either of them... .

La. R.S. §51:1409(a), of the Louisiana Unfair

‘Trade Practices Act, provides in pertinent part:

§ 1409 Private actions

A. Any person who suffers any ascertainable

loss of money or movable property, corporeal

or incorporeal, as a result of the use or em-

ployment by another person of an unfair or

deceptive method, act or practice declared

unlawful by R.S. 51:1405, may bring an ac-

tion individually but not in a representative

capacity to recover actual damages....

STATEMENT OF THE CASE

The critically important issue raised by this case

is whether a claim of unlawful price discrimination

under the Robinson—Patman Act can be maintained

by a distributor against a manufacturer where the

plaintiff distributor is sold the product by the manu-

facturer at list price and the manufacturer sells the

product to its other distributors with a 20% dis-

count, thereby making the distributor unable to

compete. The court of appeals answered the ques-

tion as follows:

On January 29, 1999, [petitioner]—-IIS pur-’

chased a single MiniMed pump at the full list

price of $4,995 which was shipped from Cali-

fornia to Louisiana. IIS submitted unrebutted

evidence that between January 1, 1999 and

February 4, 1999 MiniMed sold, across state

lines, other distributors the same type of

pump for $3,996. IIS also submitted an in-

voice which showed that one of these distribu-

tors was a company named "Secure Care",

which the district court assumed was Secure

Care Medical, an entity named by IIS as a

MiniMed distributor in the South.

IIS has established that both Secure Care

Medical and National Diabetes Pharmacy

compete at the same functional level as IIS,

t.e., they are all retail sellers of MiniMed’s

pumps. Additionally, IIS established, at least

in respect to National Diabetes Pharmacy, a

MiniMed distributor in Virginia, that it oper-

ated in the same geographic market because

Virginia was one of IIS's contractual territo-

ries. IIS, however, has not submitted evidence

that either Secure Care Medical or National

Diabetes Pharmacy qualified as “favored pur-

chasers” at the time of the alleged price dis-

crimination, when the Agreement with

MiniMed was no longer in effect. See M.C.

Mfg., 517 F.2d at 1065. Thus, IIS has not

shown actual competition with a favored pur-

chaser at the time of the alleged price dis-

crimination and has failed to meet its burden

on this element.

The court of appeals found that the distributors

were not “favored distributors” under the RPA be-

cause

_ “competition is determined by careful

analysis of each party's customers. Only if

they are each directly after the same dollar

are they competing.” M.C. Mfg. Co. v. Texas

Foundries, Inc., 517 F.2d 1059, 1065 (5th Cir.

1975).?

The court of appeals accepted MiniMed’s conten-

tion that proof of actual competition “{ujnder Fifth

Circuit law means proof that IIS was competing with

a specific favored purchaser for the exact same sales

or dollars.” MiniMed Brief 21-22. This same cus-

tomer/same dollar formulation as presented here is a

true outlier in the Robinson—Patman Act jurispru-

dence and unique to the Fifth Circuit. As observed by

one commentator:

This is a gross departure from the statute.

The RPA says nothing about the

dealer/plaintiffs customers having to be iden-

tical for the Act to apply. Likewise, the Mor-

ton Salt [FTC v. Morton Salt Co., 334 U.S. 37

(1948)] case (cited here by the Fifth Circuit as

the source of this “rule”) says nothing about

the customers of the discriminated-against

dealers. This “same customer” rule is no-

where in any previous RPA case law, nor is it

found in the wording or legislative history of

2 App., infra, 7a.

the Act or in any commentaries previously

published. It appears to be sui generis with

the Fifth Circuit. More importantly, such a

narrow definition of “competition,” if valid,

makes the § 2(b) “meeting competition” de-

fense economically irrelevant and unneces-

sary, according to at least one commentator.

James A. Pikl, The Myth of “Functional Availability”

and the Robinson-Patman Act, 2002 Fed. Cts. L.

Rev. 1 [101] (Jan. 2002) http://www.fclr.org/

2002fedctslrevl.htm. (citation omitted). ;

3 To be sure, MiniMed also relied on Eighth Circuit prece-

dent, Godfrey v. Pulitzer Publishing Co., 276 F.3d 405 (8th Cir.

2001) as support for its position that IIS must prove that it

competed with a particular distributor for the exact same cus-

tomer dollar. To be sure, the Eighth Circuit examined and ap-

plied the competitive nexus requirement of the RPA. To be

sure, the Eighth Circuit examined and applied the competitive

nexus requirement of the RPA. However, the facts and circum-

stances of Godfrey differ significantly from those of this appeal.

Godfrey involved the distribution and sale of newspapers by

various branch dealers with discrete sales boundaries. The

Eighth Circuit found “[e]ven where parties operate in airtight

territories, they compete if the end buyers of the product can

freely travel between the geographic areas to purchase the

commodity in question.” 7d. at 411, citing Falls City, Indus.,

Inc. v. Vanco Beverage, Inc., 460 U.S. 428, at 436-38 (1983).

The court found no competitive relationship between the

branch dealers affected by the alleged price discrimination be-

cause even though purchasers could determine where and from

whom to buy their paper, the purchasers’ decision was not mo-

tivated by price, but by convenience. Unlike the case in God-

In addition to its importance as a matter of anti-

trust law, the court of appeals’ resolution of the ques-

tion is of enormous practical consequence since it

goes to the very heart of the marketing systems em-

ployed by manufacturers in this country. If allowed

to stand, the decision below imperils the continued

stability of a distributor’s relationship with their

manufacturer suppliers. The issue presented is thus

of exceptional national significance meriting review

by this Court.

I. Background

Petitioner Insulin Infusion Specialties (IIS) was a

diabetes management company that (1) purchased

diabetic supplies from manufacturers and sold them

to end-users, including insurers, hospitals, and indi-

vidual patients and (2) provided patient education

about managing diabetes. IIS initiated this business

activity in 1994 and distributed insulin infusion

pumps and complementary disposables manufac-

tured by Respondent MiniMed and others. App., in-

fra, 2a

frey, IIS had no confined sales territory—it had no constraints

on selling MiniMed’s products to other consumers throughout

the United States in direct competition with other MiniMed

distributors—to say nothing of the fact that the health care

sector with third party payor issues is price sensitive where

consumer convenience without an overarching role.

Respondent MiniMed is the world’s largest manu-

facturer of insulin infusion pumps. MiniMed’s United

States market share hovers around 80%. MiniMed

pumps have a list price of just under $5,000, and a

patient may expect to expend over $2,000 per year

for the complementary disposable items associated

with the pump. Jd.

A. Insulin Therapy

There are over 840,000 diabetics in the United

States. Type 1 diabetes is a chronic autoimmune dis-

ease without a known cure that occurs “when T cells

attack and destroy the islet cells in the pancreas,

which produce insulin. Without the ability to produce

insulin, a person cannot properly metabolize glucose,

and toxic acids accumulate in the blood. Over time,

serious complications may arise, among them blind-

ness, kidney failure, extensive nerve damage, and

accelerated atherosclerosis, which can lead to a heart

attack or a stroke.” Groopman, Annals of Medicine,

The New Yorker, February 10, 2003, at p. 48.

A Type 1 diabetic must take insulin every day to

replace what the pancreas is unable to produce by

injecting “insulin using a syringe or an insulin pen

injector. ... [or by using] an insulin pump, which pro-

vides a continuous supply of insulin, eliminating the

need for daily shots.).”4

“Pump therapy” is an alternative therapy to

treating diabetes with daily hypodermic syringe in-

sulin injections. An insulin pump, about the size of a

deck of cards, is able to provide the user a continuous

supply of insulin, thereby eliminating the need for

daily shots. Insulin pumps are touted as providing

better blood sugar management than separate hypo-

dermic insulin injections. A pump wearer gains life-

style advantages such as the ability to enjoy physical

activity by better insulin delivery control. To benefit

from pump therapy, the diabetic must be willing to

learn to monitor blood sugar levels regularly in close

consultation with his physician and medical educa-

tor.

II. Statement of Facts

Since 1994, IIS sold MiniMed pumps and provided

concomitant diabetes education to end users. In early

1997, MiniMed contacted IIS to enter into a more

formal business Agreement; and if IIS chose not to

accept the Agreement its discounts on MiniMed

pumps would be reduced. On July 17, 1997, IIS and

MiniMed signed an Educational Dealer Distribution

Agreement and Letter Agreement (collectively

4 Mayo Clinic website, Diabetes, at www.mavoclinic.com

(“Mayo”).

10

“Agreement”). The Agreement was renewable. Un-

der the Agreement, IIS continued to receive MiniMed

products at a 29% discount. Jd. The Agreement was

renewed for 1998, and during this time IIS invested

in growing its business by championing MiniMed’s

pumps. By year-end 1998, IIS was one of MiniMed’s

largest volume independent dealer with ever in-

creasing sales of MiniMed pumps.

IIS’s territory under the Agreement included the

Southern states of Louisiana, Texas, Arkansas, Vir-

ginia, North Carolina and Mississippi. Jd. Moreover,

IIS had contracts with third-party payors that could

require sales activity outside of the territory set forth

in the Agreement. (R. 987). IIS had patients in 48

states. S.R.Doc.No.112, Sworn Statement of Material

Facts, p. 2, 46. Nevertheless on November 23, 1998,

MiniMed sent IIS written notice it was terminating

the Agreement, which would have otherwise auto-

matically renewed the following week for calendar

year 1999. In the non-renewal letter, MiniMed stated

‘it hoped to retain IIS as a valued customer” and

then pointedly reduced IIS’s 29% discount on Mini-

Med pumps to a 0% discount.

This elimination of discount meant that from

January 1, 1999 forward, IIS would have to pay

MiniMed the full list price for pumps, i.e. IIS had to

pay MiniMed the same suggested retail price that

MiniMed charged to end users, while MiniMed’s

11

other distributors with whom IIS was in direct com-

petition enjoyed twenty percent (20%) discounts. On

January 1, 1999, IIS also became a nationwide dis-

tributor, albeit without a written Agreement, and

therefore competed with MiniMed’s other distribu-

tors in the 48 states in which IIS had existing cus-

tomers. (S.R.Do-.No.112, Sworn Statement of Mate-

rial Facts, p. 6, ¥31—IIS was still] strong in mid 1999

and continued to receive orders from its customers

for MiniMed products.)5

On January 29, 1999, MiniMed sold an insulin

pump to IIS at a unit price of $4,995, the undis-

counted manufacturer’s list price, while MiniMed’s

other distributors were favored with a $3,996 price.

Moreover, the record evidence shows MiniMed had a :

surreptitious strategy to destroy IIS premeditated

months before it terminated the Agreement.®

5 In 1998, the last year in which MiniMed favored it with a

discount, ISS sold 1,187 MiniMed pumps. In 1999 IIS sold 577

MiniMed pumps. In 2000 IIS sold two pumps and in 2001, IIS

did not sell a single MiniMed pump.

6 The record shows throughout the duration of the Agree-

ment while IIS successfully used its best efforts to sell Mini-

Med’s products, while MiniMed contemporaneously intended to

terminate and destroy IIS. For example, the Agreement was in

force, MiniMed’s internal documents are peppered with refer-

ences such as “D-Day appears to be upon us shortly....pull the

trigger; ...Our strategy ... offer their [IIS] key sales people [po-

sitions leaving] disabled Sales Force. ... We have managed to

decrease the number of pumps through IIS by 25% over the

12

III. Proceedings in the District Court

A. Commencement of the Action

In February 1999, IIS filed a petition for damages

and declaratory relief in Louisiana State Court. On

March 8, 1999, MiniMed removed to federal court

based on diversity jurisdiction.

B. The Pertinent Claims

IIS alleged violations of the Louisiana Unfair

Trade Practices (LUTPA-— La. R.S. 51:1401 et seq.,

based on, among other things, unlawful price dis-

crimination prohibited by the federal Robin-

son—Patman Act (15 U.S.C. §13(a)) (RPA).

C. District Court Issues a Series of Rul-

ings

The district court issued numerous rulings, which

dismissed all of IIS’s claims. IIS lists and describes

only those rulings and orders that directly bear on

the court of appeals proceedings and this petition for

certiorari, namely the granting of summary judg-

ment to MiniMed on IIS’s Robinson—Patman Act

claim.

past few months. ... IIS has the Blue Cross contract. We [Mini-

Med] had to use them. I always try to use any other dealer in-

stead of IIS. I believe their discount is too high. ... [and hinders

our efforts] to protect the pricing within the insurance indus-

try.... put IIS on a leash ... weaken or destroy them”.

1. Summary Judgment on IIS’s

Price Discrimination Claims

On May 2, 2002, the district court granted Mini-

Med’s Motion for Partial Summary Judgment on

IIS’s price discrimination claims under the RPA and

La. R.S. § 51:331. Appendix C, 20a. In its summary

judgment ruling, the court found that IIS satisfied

RPA’s requirements of (1) the interstate sales of

goods and (2) the sale of goods of a like grade and

quality. The district court granted summary judg-

ment to MiniMed on the RPA claim because it found

that IIS made no showing that favored and disfa-

vored purchasers competed within the same geo-

graphic market.

On September 27, 2002, the district court entered

Judgment, dismissing all of IIS’s claims and granting

judgment in favor of MiniMed against IIS in the

amount of $1,004,007.

D. The Court of Appeals’ Decision

The court of appeals affirmed. The court of appeals

sets forth the four elements necessary for a secon-

dary-line violation of the RPA: “one, sales made in

interstate commerce; two, the commodities sold to

IIS were of the same grade and quality as those sold

to other MiniMed distributors; three, MiniMed dis-

criminated in price between IIS ard other distribu-

14

tors; and four, that the discrimination had a prohib-

ited effect on competition.”

The court of appeals found elements one and two

were met. The court of appeals further found that

two MiniMed distributors, NDP and Secure Care,

competed with IIS, the court nevertheless concluded

that element three was lacking, i.e., IIS did not show

that NDP and Secure Care were “favored.” The re-

cord, however, shows the court of appeals is wrong.

During the relevant period after January 1, 1999,

IIS remained a MiniMed distributor free to sell

MiniMed products throughout the United States.

During the relevant period after January 1, 1999,

National Diabetic Pharmacy and Secure Care re-

ceived a substantial discount on all pump purchases,

paying only $3,996.00 and $3,846.15 per pump re-

spectively. In contrast, IIS’s price was $4,995.00 per

pump. A. Thus, both NDP and Secure Care, which

the Court found did sell pumps in the same geo-

graphic area as IIS, and therefore were competitors

of IIS, were in fact “favored” purchasers. IIS, which

paid substantially more for the identical product, can

only be determined to be a “disfavored” purchaser.

See court of appeals’ decision at 4a.

1. IIS’s petition for rehearing

IIS timely moved for rehearing on the ground that

the very reasoning of the court of appeals compelled

a finding that IIS had marshaled sufficient evidence

to withstand summary judgment as to its state un-

fair trade practices claim. The court of appeals rec-

ognized that MiniMed’s conduct was of the type and

kind the Federal Trade Commission could enjoin.

App., infra, 16a. That is to Say, even if MiniMed’s

conduct does not give rise to a treble damage suit to

a private litigant under federal antitrust laws, IIS

has stated a state unfair trade practices act claim,

predicated on the RPA. The Louisiana Unfair Trade

Practices Act Claim (“LUTPA”).7

IIS reurged that LUTPA is designed to give a state

remedy for unlawful and unethical business behav-

ior;8 IIS has shown a prima facie RPA violation en-

joinable by the FTC, which is sufficient to support a

Louisiana unfair trade practice claim entitling IIS to

have a merits trial on the LUTPA claims. The court

of appeals denied rehearing. App., infra, 19a.

7 La. R.S. §51:1409(a).

8 Louisiana courts have defined “unfair conduct” as conduct

being offensive to public policy or immoral, unethical, oppres-

sive, unscrupulous or substantially injurious. Determinations

as to whether a defendant’s conduct falls within this definition

should be made on a case-by-case basis. Belle Pass Terminal,

Inc. v. Jolin, Inc., 618 So. 2d 1076, 1081 (La.App. 1 Cir. 1993);

Jessen v. Dr. Kenneth W. Wimberly, D.D.S., 610 So. 2d 252, 257

(La.App. 3 Cir. 1992),

16

REASONS FOR GRANTING THE WRIT

Secondary-line injury under the Robinson—Patman

Act results from price discrimination between fa-

vored and disfavored buyers. Texaco, Inc. v. Has-

brouck, 496 U.S. 543, 558 n. 15, 110 L. Ed. 2d 492,

110 S. Ct. 2535 (1990). The elements of a prima facie

secondary-line violation under the Robinson—Patman

Act are as follows:

one, sales made in interstate commerce;

two, the commodities sold to IIS were of the same

grade and quality as those sold to other MiniMed

distributors;

three, MiniMed discriminated in price between IIS

and other distributors; and

four, that the discrimination had a prohibited ef-

fect on competition.

Lycon Inc. v. Juenke, 250 F.3d 285, 288 (5th Cir.),

cert. denied, 122 S. Ct. 209, 151 L. Ed.2d 149 (2001).

The court of appeals found that IIS met elements

one and two. The court of appeals found at the time

the price differential was imposed, i.e., after Decem-

ber 31, 1998, the favored distributors and IIS com-

peted (1) at the same functional level and (2) within

17

the same geographic market. App., infra, 9a. The

court of appeals nevertheless found that to prevail

under the RPA a plaintiff must also show that the

price discrimination only mattered if IIS was com-

peting for the same sale and the same dollar as the

favored distributor. App., infra, 7a.

The RPA says nothing about the distributor’s cus-

tomers having to be identical for the Act to apply.

This Court has repeatedly held that § 2(a) is violated

merely upon a showing that the price discrimination

may substantially. lessen competition; the statute

does not require that the discrimination must in fact

have harmed competition. See, e.g., J. Truett Payne

Co. v. Chrysler Credit Corp., 451 U.S. 557, 561-62

(1981). “[A]n injury to competition may be inferred

from evidence that some purchasers had to pay their

suppliers substantially more for their goods than

their competitors had to pay.” Texaco Inc. v. Has-

brouck, 496 U.S. 543, 559 (1990)(quoting FTC v.

Morton Salt, 334 U.S. 37, 46-47 (1948). “A price dis-

crimination within the meaning of § 2(a) is merely a

price difference.” Jd. In the instant case, it is undis-

puted that MiniMed charged IIS full market price

starting on January 1, 1999, while other MiniMed

distributors continued to receive MiniMed pumps at

a substantial 20% discount. App., 4a.

To benefit from the competitive injury inference,

IIS only had to show that IIS and other MiniMed

18

distributors competed, which is the case. To add the

same dollar and same customer gloss is without war-

rant and apparently sui generis to the fifth circuit.

See James A. Pikl, The Myth of “Functional Avail-

ability” and the Robinson-Patman Act, 2002 Fed. Cts.

L. Rev. 1 [101]; [118] (Jan. 2002) http://www.fclr.org/

2002fedctslrev1.htm.

2. The decision of the court of appeals also merits

review by this Court because it reached element four

of a Robinson—Patman Act secondary-—line claim that

conflicts with this Court’s pronouncements. In J.

Truett Payne Co. v. Chrysler Credit Corp., 451 U.S.

557, 561-62 (1981), this Court explained that

[Damage] issues in these cases are rarely

susceptible of the kind of concrete, detailea

proof of injury which is available in other con-

texts. The Court has repeatedly held that in

the absence of more precise proof, the fact-

finder may conclude as a matter of just and

reasonable inference from the proof of defen-

dants wrongful acts and their tendency to

injure plaintiffs’ business, and from the evi-

dence of the decline in prices profits and val-

ues not shown to be attributable to other

causes, that defendants’ wrongful acts had

caused damage to the plaintiffs. (citations

omitted.)

The record establishes MiniMed’s wrongful and

illegal price discrimination a three-year period from

January 1, 1999 until IIS was forced to liquidate. To

Say nothing that it is intuitively obvious that a re-

tailer cannot compete with other retail distributors

when it buys at list price and its competitors receive

a substantial 20% discount. This Court has often

stated that “for the purposes of Section 2(a), injury to

competition is established prima facie by proof of a

substantial price discrimination between competing

purchasers over time.” Falls City, Indus., Inc. v.

Vanco Beverage, Inc., 460 U.S. 428, 435 (1983); see

also Texaco, Inc. v. Hasbrouck, 496 U.S. 543, 559

(1990). However, this is not the case in the fifth cir-

cuit. The Court is invited to restate clearly Has-

breuck’s reach.

20

CONCLUSION

For the foregoing reasons, we respectfully request

that a writ of certiorari be granted.

Respectfully submitted.

Robert S. Abdalian

Counsel of Record

Suite 235—S. Jefferson Davis Parkway

New Orleans, LA 70125

(504) 304-2308

Matthew K. Brown

Sullivan, Stolier & Resor, APLC

909 Poydras Street, Suite 2600

New Orleans, LA 70112

(504) 561-1044

Counsel for Petitioners IIS

la

APPENDIX A

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

NO. 02-31084

Infusion Resources, Inc., and

Diabetes Resources, Inc.,

d/b/a Insulin Infusion Specialties,

Plaintiffs—Appellants,

versus

MiniMed, Inc.,

Defendant—Appellee.

On Appeal from the United States District

Court for the Eastern District of Louisiana

[December 5, 2003, Filed]

Before HIGGINBOTHAM, STEWART, and PRADO

Circuit Judges.

CARL E. STEWART, Circuit J udge:

Appellants Infusion Resources, Inc. and Diabetes

Resources, Inc., d/b/a Insulin Infusion Specialties

(“IIS”) appeal the decision of the district court

granting Appellee Minimed, Inc.’s (“Minimed”)

motion for summary judgment dismissing [IS’s

following causes of action: price discrimination

2a

claims under the Robinson-Patman Act (“RPA”), 15

U.S.C. § 13(a)/ § 2(a) Clayton Act, and the Louisiana

Price Discrimination Act (““LPDA”), La. R.S. §

51:331; a claim for lack of fair dealing under the

Louisiana Unfair Trade Practices Act (““LUTPA”),

La. § 51:1409; and claims for breach of the implied

duty of good faith, breach of contract, defamation

and violation of trade secrets. IIS alsc appeals the

district court’s denial of its Fed. R. Civ. P. 59(e)

motion for reconsideration. For the reasons that

follow, we affirm the judgment of the district court.

FACTUAL AND PROCEDURAL BACKGROUND

Minimed is the world’s largest manufacturer of

insulin infusion pumps. MiniMed’s United States

pump therapy market share is appreximately 80%.

According to MiniMed, between the years 1996 to

2001, users of insulin pumps increased from about

6,000 to about 54,000 nationwide. MiniMed pumps

have a list price of $ 4,995, and a patient may expect

to expend over $ 2,000 per year for the

complementary disposable items associated with the

pump.

IIS conducted business as an insulin pump

distributor and related supplies to end-users for at

least two of MiniMed’s competitors. In the Fall of

1994, IIS informally became a distributor of

MiniMed’s pumps. In July 1997, the two parties

entered into a formai written Distribution

Agreement (the “Agreement”), which provided that

California law would govern, granting IIS a non-

exclusive right to sell and distribute MiniMed

products. The Agreement also bestowed upon IIS

the ability to purchase the pumps from MiniMed at

3a

the highest available discount, up to 29%, depending

on IIS’s overal] purchase volumes. Additionally, IIS

agreed to promote MiniMed and its products and

maintain adequate facilities and personnel to do so,

as well as provide training to pump purchasers and

pay all costs to deliver products to end users. IIS

a.so agreed, with one exception! nl, to market

MiniMed’s products exclusively and that it would

not directly or indirectly manufacture, distribute or

market products which compete directly or

indirectly with products manufactured by MiniMed.

The Agreement did not grant IIS an exclusive

distributorship and MiniMed was expressly allowed

both to sell its products in the territories served by

IIS, and to utilize other distributors. The Agreement

contained an annual renewal clause, which allowed

either party to decline renewal of the Agreement,

with or without cause, on thirty days written notice

prior to the end of the current calendar year.2

The parties operated under the Agreement from

July 17, 1997 until December 31, 1998 during which

! This exception provided:

To the extent customers of IIS requested infusion sets

not manufactured or distributed by Minimed, IIS may carry

such infusion sets to fill orders expressly requested by

customers: provided hcwever, that all such infusion sets

other than t‘icse inanufactured by or for MiniMed which

are distributed by 11S shall not exceed an aggregate of 20%

of all such sets (determined by retail sale price) distributed

by IIS in any calendar [sic] year.

2 IIS’s contractual distribution territory per the Agreement

included Louisiana, Texas, Arkansas, Ohio, Pennsylvania,

New York, Connecticut, New Jersey, Utah, Virginia, North

Carolina and Mississippi.

4a

time IIS received a 29% discount off of the list price

on MiniMed pumps. On November 23, 1998,

MiniMed sent IIS written notice that it was not

going to renew the Agreement for the 1999 calender

[sic] year, and the Agreement terminated on

December 31, 1998. MiniMed indicated to IIS that it

was willing to continue selling pumps to IIS at the

full list price. On January 29, 1999, IIS purchased a

single MiniMed pump at the full list price of $ 4,995

which was shipped from California to Louisiana. IIS

submitted unrebutted evidence that between

January 1, 1999 and February 4, 1999 MiniMed

sold, across state lines, other distributors the same

type of pump for $ 3,996. IIS also submitted an

invoice which showed that one of these distributors

was a company named “Secure Care”, which the

district court assumed was Secure Care Medical, an

entity named by IIS as a MiniMed distributor in the

South.

IIS initiated an action in November, 1998, in

which it claimed that MiniMed breached the

Agreement by both wrongfully passing IIS

confidential and proprietary information to

MiniMed salespersons and by making intentional

and material misrepresentations to IIS’s customers

in order to divert sales from IIS to MiniMed. IIS

also complained that MiniMed acquired IIS’s two

main distribution competitors and unfairly

maninulated the wholesale prices at which it sold its

products to IIS, in order to hinder IIS’s ability to

compete with MiniMed or MiniMed-owned

5a

distributors.? IIS sought damages pursuant to

MiniMed’s alleged price discrimination, unfair trade

practices, breach of contract and implied obligation

of good faith, trade secrets violations, defamation,

and detrimental reliance. On March 8, 1999,

MiniMed timely removed the case anéd filed a cross

motion for summary judgment to dismiss all of IIS’s

claims, which the district court granted.

IIS now appeals and argues that the district court

erred in: (1) dismissing IIS’s price discrimination

claims by finding that there were no disputed facts

regarding whether IIS engaged in actual

competition with any favored resellers of MiniMed;

(2) dismissing IIS’s LUTPA claim; (3) excluding IIS’s

expert evidence regarding the damages it suffered

as a result of MiniMed’s conduct; (4) dismissing IIS’s

breach of contract and implied duty of good faith,

defamation and fair dealing claims; (5) denying IIS’s

59(e) motion for reconsideration of its order granting

MiniMed summary judgment dismissing of all of

IIS’s claims; and (6) dismissing IIS’s price

discrimination claims by finding that IIS failed to

present evidence of actual injury.

DISCUSSION

3 IIS submitted MiniMed’s 1999 10-K report filed with

Securities and Exchang2 Commission which stated that in

1998 MiniMed had acquired two distributors named HMS and

DSS. In the report MiniMed allegedly stated “By increasing

our ability to satisfy more of our customers’ needs and

continuing our extensive customer service efforts, we believe

we can maximize our revenues over the long term and create

barriers to entry for competitors.” IIS, however, did not offer

any evidence as to what specific geographic areas these two

distributors operated in.

6a

I. Standard of Review

This Court reviews a district court’s grant of

summary judgment de novo. Am. States Ins. Co. v.

Synod of the Russian Orthodox Church Outside of

Russia, 335 F.3d 493 (5th Cir. 2003). Summary

judgment is appropriate only if the pleadings,

depositions, answers to interrogatories, and

admissions on file, together with the affidavits, if

any, show that there is no genuine issue as to any

material fact and that the moving party is entitled

to judgment as a matter of law. Fed. R. Civ. P. 56

(c)); Tango Transp. v. Healthcare Fin. Servs. LLC,

322 F.3d 888, 890 (5th Cir. 2003). A genuine issue of

material fact exists if the record, taken as a whole,

could lead a rational trier of fact to find for the non-

moving party. Id. Questions of law are reviewed de

novo. Id.

II. Price Discrimination Robinson-Patman Act,

15 U.S.C. § 13(a)/ § 2(a) Clayton Act4

In order to recover damages for a claim under §

13(a) of the Robinson-Patman Act (RPA)/ § 2(a)

Clayton Act claim, a pleintiff must prove four facts:

one, sales made in interstate commerce; two, the

commodities sold to IIS were of the same grade and

quality as those sold to other purchasers; three,

MiniMed discriminated in price between IIS and

other purchasers; and four, that the discrimination

had a prohibited effect on competition. Lycon Inc. v.

Juenke, 250 F.3d 285, 288 (5th Cir.), cert. denied,

122 S. Ct. 209 (2001). RPA § 13(a) includes two basic

types of injury, primary line and secondary line.

Ja

Eximco, Inc. v. Trane Co., 737 F.2d 505, 515 (5th

Cir.), reh’g granted in part, amended in part on

other grounds, 748 F.2d 287 (5th Cir. 1984).

Secondary-line injury, which IIS claims to have

incurred, results from price discrimination between

favored and disfavored buyers. Texaco, Inc. v.

Hasbrouck, 496 U.S. 543, 558 n. 15, 110 L. Ed. 2d

492, 1110S. Ct. 2535 (1990).

The district court held that while IIS met its

burden on elements one and two, it failed to show

element three, that MiniMed discriminated in price

between IIS and other purchasers, and dismissed

IIS’s claim at that point. The district court did not

reach element four.

Under element three a plaintiff “must first prove

that as the disfavored purchaser, it was engaged in

actual competition with the favored purchaser(s) as

of the time of the price differential” and that this

“competitive nexus requirement is satisfied when

there is a showing of ‘competitive contact’ between

the recipients of the price differential.” Best Brands

Beverage, Inc. v. Falstaff Brewing Co., 842 F.2d 578,

584 (2d Cir. 1987). In other words it “must therefore

be shown that as of the time the price differential

was imposed, the favored and disfavored purchasers

competed at the same functional level, i.e., all

wholesalers or all retailers, and within the same

geographic market.” Id. at 585. This Court has

explained that “competition is determined by careful

analysis of each party’s customers. Only if they are

each directly after the same dollar are they

competing.” M.C. Mfg. Co. v. Texas Foundries, Inc.,

517 F.2d 1059, 1065 (5th Cir. 1975).

8a

In concluding that IIS failed to satisfy element

three, the district court noted that IIS’s claim that it

was one of MiniMed’s top three distributors in the

United States and that it was competing nationwide

with MiniMed’s other distributors, even if true, does

not necessarily indicate that the markets of these

distributors overlapped. The district court found

that IIS did not specifically demonstrate any

evidence showing that it directly competed with any

of MiniMed’s other distributors for “the same dollar”

nationwide. The district court noted that while IIS

did proffer some evidence that prior to the alleged

price discrimination it competed with at least one

reseller, Secure Care Medical, in the South, and

that an entity named National Diabetes Pharmacy

distributed MiniMed products in Virginia, it had not

specifically pointed to any evidence that at the time

of the alleged price discrimination that it was

competing with these entities or any other entity in

a particular market.

IIS asserts that the evidence it presented - that

before and after January 1, 1999, it competed with

other MiniMed distributors for customers - was

sufficient to meet its “competitive nexus burden”

and preclude the district court’s granting of

MiniMed’s motion to dismiss for IIS’s failure to meet

element three of its § 13(a) RPA claim. IIS also

asserts that the district court acknowledged that it

submitted evidence that IIS competed with at least

one other reseller, Secure Care Medical, in the

South. Furthermore, IIS submitted evidence that

another entity, National Diabetes Pharmacy,

distributed MiniMed pumps IIS’s territory of

Virginia.

9a

After reviewing the facts on the record and their

application to the law, we hold that the district

court was correct in its conclusion in regards to

element three. The competitive nexus is established

if the disfavored purchaser and favored purchaser

compete at the same functional level and within the

same geographic market at the time of the price

discrimination. Best Brands, 842 F.2d at 585. IIS

has established that both Secure Care Medical and

National Diabetes Pharmacy compete at the same

functional level as IIS, i.e., they are all retail sellers

of MiniMed’s pumps. Additionally, IIS established,

at least in respect to National Diabetes Pharmacy, a

MiniMed distributor in Virginia, that it operated in

the same geographic market because Virginia was

one of IIS’s contractual territories. IIS, however, has

not submitted evidence that either Secure Care

Medical or National Diabetes Pharmacy qualified as

“favored purchasers” at the time of the alleged price

discrimination, when the Agreement with MiniMed

was no longer in effect. See M.C. Mfg., 517 F.2d at

1065. Thus, IIS has not shown actual competition

with a favored purchaser at the time of the alleged

price discrimination and has failed to meet its

burden on this element.

III. Price Discrimination, Louisiana Price

Discrimination Act, La. R.S. § 51:331

The district court also dismissed IIS’s price

discrimination claim under the LPDS, La. R.S. §

51:331 for the same reasons it dismissed the RPA

claim, because IIS failed to show actual competition

with a favored purchaser at the time of the alleged

10a

price discrimination, and thus failed to meet its

burden. The district court also noted that the

language of the statute clearly indicated that the

Louisiana legislature intended to address

discriminatory pricing “in the state” and IIS failed

to show any favored distributors it competed with in

Louisiana.

IIS’s federalism argument in which it contends

that even if its federal RPA claim is dismissed it is

still entitled to a state claim under the LPDS, La.

R.S. § 51:331 is incorrect. IIS bases this argument

on its assertion that the district court dismissed

IIS’s claim under LPDS simply because it found that

IIS’s federal antitrust claim under the RPA failed.

This is not a correct understanding of the district

court’s reasoning for dismissing IIS’s LPDS claim.

The district court clearly stated that it analyzed

IIS’s claim under LPDS, and whether IIS

established the elements for such claim. The district

court found that the Louisiana legislature intended

the statute to address discriminatory pricing “in the

state” and IIS failed to set forth specific evidence

that MiniMed had charged IIS a different price than

it charged any other pump distributor in Louisiana,

at the time of the alleged price discrimination.

Therefore, the district court held that IIS’s claim

failed. Our review of the record finds no evidence of

IIS competing with any other pump distributor in

Louisiana at the time of the alleged price

discrimination, and therefore the district court was

correct in dismissing IIS price discrimination claim

under the LPDS.

lla

IV. Louisiana Unfair Trade Practices Act,

La. § 51:1409

The district court found that because MiniMed

validly effectuated the non-renewal of the

Agreement pursuant to the non-renewal clause,

evidence submitted by IIS relating to damages from

non-renewal of the Agreement would be excluded.

The district court also held that MiniMed was not

liable for damages under the LUTPA, La. R.S. §

51:1409, which precludes entitlement to damages

for non-renewal of an agreement as well as price

discounts, and therefore any such evidence

presented by IIS for damages under the LUTPA was

irrelevant and must be excluded. Turner v. Purina

Mills, Inc., 989 F.2d 1419, 1423-24 (5th Cir. 1993).

The district court therefore dismissed IIS’s LUTPA

claim.

IIS argues that it submitted sufficient evidence in

the form of MiniMed memoranda showing that

MiniMed violated the LUTPA. These memoranda

allegedly contain statements made by MiniMed

showing it intended to do harm to IIS in violation of

the LUTPA.5 The district court held that Turner

precluded damages pursuant to a LUTPA claim

when the damages were tied to either a non-renewal

of an agreement or price discounts, as was the case

here. See 989 F.2d at 1423-24.6 IIS argues that its

5 IIS points to the record to show that MiniMed made the

following statements in memoranda such as: “pull trigger”;

“put IIS on a leash”; and “weaken or destroy them”.

6 In Turner, 989 F.2d at 1420, the plaintiff was a Purina

dealer whose agreement was terminated by Purina pursuant

to a non-renewal provision after his sales fell. The dealer then

12a

case is distinguishable from Turner and is more

analogous with Chemical Distribs., Inc. v. Exxon

Corp., 1 F.3d 1478 (5th Cir. 1993), and notes that

this Court distinguished Purina because unlike the

claimant in that case, in Exxon, the jury found that

Exxon had breached its contract in bad faith, there

was sufficient evidence of fraud, misrepresentation,

or deception, and there were internal memoranda

prepared before the contracts was terminated. Id. at

1485-86.

This Court in Exxon, however, stated that Exxon

differed from Turner in that the latter dealt with a

suit between a dealer and a supplier, and part of the

decision in that case rested on its analysis of the

relationship between the two. Id. at 1485. Exxon, in

contrast, dealt with a supplier (the plaintiff) -

customer (Exxon) relationship and outlined conduct

allegedly perpetrated by Exxon that IIS does not

allege of MiniMed in this case. Id. Such conduct by

Exxon included: conspiring with the plaintiffs

supplier to eliminate the plaintiff, refusing in bad

faith to pay plaintiffs invoices, and unlawfully

seizing the plaintiffs equipment. Id. This Court in

Exxon did not indicate that any part of Turner had

brought suit under the LUTPA and introduced into evidence

an internal Purina memoranda which stated that Purina

planned to eliminate his business as a major competitor in the

relevant markets. Id. at 1420-21. This Court held that Purina

did not violate the LUTPA since its termination of the contract

was valid, and “an intent to eliminate the competition does not

by itself violate LUTPA. Rather, the statute forbids businesses

to destroy each other through improper means.” Id. at 1423.

Finally, this Court held that the LUTPA does not provide an

alternative remedy for simple breaches of contract. Id. at 1422.

eal

13a

been invalidated. Because IIS’s case significantly

resembles Turner more than it does Exxon, the

district court’s holding that there were no actionable

LUTPA claims was correct.

¥. IIS’s damage report and remaining non-

antitrust claims

Once the district court found that IIS had failed to

establish the required elements for any of its

antitrust claims, and dismissed those claims, it held

that the February 5, 2002 damage report submitted

by US became defective as support for its remaining

non-antitrust claims because the report failed to

segregate between Minimed’s allegedly wrongful

antitrust and non-antitrust conduct, and the specific

damages that flowed from each.7? The district court

then granted IIS leave to file an amended damage

report which listed only those damages caused by

the non-antitrust conduct. IIS submitted an

amended damage report dated May 19, 2002. The

district court reviewed the amended report and

granted Minimed’s motion to strike the report

because it held that IIS simply repackaged its

original report, which claimed its damages flowed

from Minimed’s antitrust conduct, to assert that

essentially the same damages now flowed from the

remaining non-antitrust claims.’ Upon striking the

7 These remaining claims were (1) detrimental reliance, (2)

breach of contract and the implied obligation of good faith and

fair dealing under California law, (3) defamation under

Louisiana law, and (4) unfair trade practices.

8 IIS’s February 5, 2002 expert damage report used a

projection of future earnings model to calculate its damages

resulting from the change in commercial relationship between

F

Ae a NN A RN RRR RR 2 ere ree cerns ene acme sm =

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l4a

amended damage report the district court also

granted Minimed’s summary judgment motion to

dismiss II<’s remaining non-antitrust claims.

The district court was correct to strike the

amended report because it did not properly reflect

the true amount of estimated damages which flowed

from the remaining non-antitrust claims, making

the report seriously flawed and inadmissible. City of

Vernon v. S. Cal. Edison Co., 955 F.2d 1361, 1371-73

(9th Cir.), cert. denied, 506 U.S. 908, 121 L. Ed. 2d

228 (1992) (affirming summary judgment for

defendant because of, inter alia, plaintiffs failure to

properly prove damages where plaintiff did not

attempt to or offer to correct the only possibly

admissible damages study).

Furthermore, IIS’s argument that the

disaggregation rule is only required in antitrust

cases, and thus became non-applicable once its

antitrust claims were dismissed, is incorrect.9 This

MiniMed and IIS. When IS subsequently submitted its May

19, 2002 amended damage report, it again used the projection

of future earnings model, but then attributed the same

dz.mages to its remaining non-antitrust claims.

9 To support this argument IIS cites Spray-Rite Serv. Corp.

v. Monsanto Co. 684 F.2d 1226, 1243 (7th Cir. 1982), affd, 465

U.S. 752, 79 L. Ed. 2d 775, 104 S. Ct. 1464 (1984); ILC

Peripherals Leasing Corp. v. IBM Corp., 458 F. Supp. 423, 434

(N.D. Cal. 1978), affd sub nom. Memorex Corp. v. IBM Corp.,

636 F.2d 1188 (9th Cir. 1980), cert. denied, 452 U.S. 972, 69 L.

Ed. 2d 983 (1981). However, while these cases do hold that

disaggregation generally applies to antitrust claims, none of

them held that disaggregation is only required. in antitrust

cases. Furthermore, Minimed cites to non-antitrust cases held

that disaggregation of damages does apply to other than

antitrust claims. Fleet Nat'l Bank v. Anchor Media Television,

15a

Court has not limited the concept of disaggregation

merely to antitrust actions. See, e.g. Perrone v.

GMAC, 232 F.3d 433 (5th Cir. 2000) (actual

damages for viclation of the Truth in Lending Act

requires direct causal relationship between the

amount of damages and injury or harm); National

Papaya Co. v. Domain Industries, Inc., 592 F.2d

813, 818 (5th Cir. 1979) (in a breach of warranty

claim the plaintiff has the burden to show that it’s

lost profit damages flewed as the natural and

proximate result of the defendant’s wrongful

conduct).

Because IIS merely repackageu its original

damages report, and submitted it as an amended

report to support its remaining non-antitrust

claims, the district court was correct to exclude it.

Once the amended damages report was excluded,

IIS could not show any damages resulting from its

remaining non-antitrust claims. Therefore, the

district court was correct in dismissing these

remaining claims because IIS had failed to submit

proper proof of damages.

VI. Treble damages under § 4 of the Clayton Act

The district court concluded that because IIS had

failed to carry its burden against MiniMed’s

summary judgment motion under element three, it

need not address alternative arguments for

Inc., 45 F.3d 546, 560 (1st Cir. 1995) (“The law ... requires that

a party prove, as an element of its case, the extent to which it

was damaged by the fraud or breach”); Doe v. United States

976 F.2d 1071, 1085-1086 (7th Cir. 1993)(“the trial court did

not abuse its discretion in finding that a causal relationship

was insufficiently established”).

16a

dismissal. MiniMed argued alternatively that IIS

failed to show element four of its § 13(a) RPA claim,

that the alleged discrimination prohibitively effected

competition, by causing harm to IIS, or that IIS had

suffered actual injury under § 2(a) of the Clayton

Act for the purpose of establishing entitlement to

treble damages pursuant to § 4 of the Clayton Act,

15 U.S.C. § 15.

IIS’s argues that all that is necessary to show

harm under § 2(a) of the Clayton Act for the purpose

of establishing entitlement to treble damages

pursuant to § 4 of the Clayton Act is the presence of

price discrimination. This is incorrect. The Supreme

Court in J. Truett Payne Co. v. Chrysier Motors

Corp., 451 U.S. 557, 561, 68 L. Ed. 2d 442, 101 S.

Ct. 1923 (1981) stated that a showing of price

discrimination is sufficient when seeking an

injunction under § 2(a), but not when damages are

sought. Because IIS has failed to show actual injury,

it failed to satisfy element four of its § 13(a) RPA

claim, as well as failing to show that if is entitled to

treble damages under § 4 of the Clayton Act.

VII. 59(e) Motion to Reconsider

This Court has held that a 59(e) motion to

reconsider should not be granted utiess: (1) the

facts discovered are of such a nature that they

would probably change the outcome; (2) the facts

alleged are actually newly discovered and could not

have been discovered earlier by proper diligence;

and (3) the facts are not merely cumulative or

impeaching. See English v. Mattson, 214 F.2d 406,

409 (5th Cir. 1954). The district court held that IIt

failed to meet these requirements.

ee

17a

IIS argues that its 59(e) motion for reconsideration

of the district court’s decision to grant MinMed

summary judgment should not have been denied

because it satisfied the requirements for

reconsideration. Specifically, IIS asserts that it

submitted new evidence not available to it at the

time the district court granted summary judgment.

The alleged new evidence concerns the names of

other MiniMed distributors who sold MiniMed

pumps throughout the United States and

specifically in certain markets that IIS asserted that

it was also competing in. IIS argues tnat this

information was not available to it in a timely

manner through no fault of its own but through

MiniMed’s refusal to provide such information

during discovery until after its summary judgment

motions were granted. IIS argues that this new

evidence would have satisfied element three of its §

13(a) RPA claim.

While the new evidence submitted by IIS may not

have been discoverable prior to the district courts

granting of MiniMed’s summary judgment motions,

the district court found that it would not have

changed the outcome. The district court reasoned

that it did not base its summary judgment decision

on IIS’s failure to show that other distributors

competed in certain markets at the time of the

alleged price discrimination. Rather, the district

court based its decision on IIS’s failure to submit

sufficient evidence that it also competed in those

particular markets during the relevant pericd, when

its agreement with MiniMed to service particular

markets had been terminated as of December 31,

1998. Because we have found that IIS failed to

18a

submit proof of competition with a favored

purchaser during the time of the alleged price

discrimination, the district court’s denial of IIS’s

59(e) motion for reconsideration was correct.

CONCLUSION

Because IIS failed to submit proof that it competed

with favored purchasers in its geographical area at

the time of the alleged price discrimination

committed by Minimed, failed to submit proper

proof of damages, and failed to submit evidence

sufficient for a reconsideration of the district court’s

grant of summary judgment dismissing all of IIS’s

claims, we affirm the decision of the district court

granting Minimed’s motion for summary judgment

which dismissed all of IIS’s claims.

AFFIRM.

19a

Appendix B

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

NO. 02-31084

Infusion Resources, Inc., and

Diabetes Resources, Inc.,

Doing business as Insulin Infusion Specialties,

Plaintiffs—Appellants,

versus

MiniMed, Inc.,

Defendant—Appellee.

Appeal from the United States District Court

for the Eastern District of Louisiana

[January 15, 2004, Filed]

Before HIGGINBOTHAM, STEWART, ard PRADO

Circuit Judges.

IT IS ORDERED that the petition for rehearing is

DENIED,

Entered for the Court:

/s/ Carl. E Stewart

United States Circuit Judge

20a

Appendix C

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF LOUISIANA

INFUSION RESOURCES, CIVIL ACTION

INC. and DIABETES

RESOURCES, INC. d/b/a

INSULIN INFUSION

SPECIALTIES

bi NO. 99-0771

MiniMed, Inc. SECTION “C” (1) |

[SEALED]

[DATE OF ENTRY: MAY 3, 2002]

[DOCKET NO. 142]

ORDER AND REASONS

Before the Court are the parties’ cross motions for

partial summary judgment on claims by Plaintiffs,

Infusion Resources, Inc., and Diabetes Resources,

Inc., d/b/a Insulin Infusion Specialties (collectively

“TIS”), under the Robinson-Patman Act, 15 U.S.C. ¢

13(a), and the Louisiana Price Discrimination Act,

La. R.S. § 51:331.1 After reviewing the arguments of

counsel, the record, and the applicable law, IT IS |

ORDERED that IIS’ Motion for Partial Summary

Judgment is hereby DENIED and MiniMed’s Motion

os a ee

2la

for Partial Summary Judgment is hereby

GRANTED as to the above-mentioned claims. !°

BACKGROUND

On November 24, 1998, Plaintiffs, Infusion

Resources, Inc., and Diabetes Resources, Inc., d/b/a

Insulin Infusion Specialties (collectively “IIS”). filed

a Petition for Declaratory Judgment and Damages

(“Petition”) against MiniMed in Civil District Court

for the Parish of Orleans, State of Louisiana. See

Rec. Doc. 1 at Ex. D. According to the Petition, IIS is

a full-service diabetes management company,

distributing diabetic supplies and providing patient

education, support, and training. See 4. The

Petition alleges that MiniMed!! manufactures and

distributes diabetic pumps, infusion sets, and other

supplies. See | 6. The Petition further alleges that

the parties entered into an agreement whereby IIS

was granted a non-exclusive right to sell and

distribute MiniMed products. See { 7. IIS maintains

that on April 21, 1998, MiniMed wrote to IIS,

claimed the latter was in default under the

agreement because IIS had been actively promoting

‘The Court does not address here the portion of the

Motion for Summary Judgment of Defendant, MiniMed, Inc.

(“MiniMed”), on IIS’ claims under the Sherman Act, 15 U.S.C.

§§1 and 2, and La. R.S. §§ 51:122 and 51:123.

'\MiniMed contends that it was purchased by Medtronic,

Inc., in 2001, and is now known as Medtronic MiniMed, a

wholly owned subsidiary of Medtronic. See Rec. Doc. 107 A

Mem. In Supp. of MiniMed’s Mot. for Partial Summ. J. at 3.

On April 15, 2002, the Court entered an Order granting IIS’

Motion for Addition of Corporate Defendant after Merger,

thereby adding Medtronic MiniMed, Inc., as the named

Defendant. See Rec. Doc. 131.

22a

non-Mini-Med products. See Petition at 4 7. IIS also

claims that MiniMed breached the agreement, |

including wrongfully passing on IIS confidential and

proprietary patient information to MiniMed

salespeople. See id. at | 15, 16. IIS also charges

MiniMed with making intentional and material

misrepresentations to IIS customers to divert sales

from IIS to MiniMed. See id. at 4 17. Finally, IIS

complains. MiniMed has acquired IIS’s two main

distribution competitors and has’ unfairly

manipulated the wholesale prices at which it sells

MiniMed products to IIS to hinder IIS’s ability to

compete with MiniMed or MiniMed-owned

distributors. See id. at § 18. The Petition seeks

damages pursuant to MiniMed’s alleged unfair

trade practices and breach of contract and a

declaratory judgment that IIS has not breached the

agreement and that the agreement remained in

effect through December 31, 1998. See 44] 20-26.

On January 20, 1999, IIS filed a First Amended

Petition charging MiniMed additionally with

knowingly or recklessly making damaging false

statements to third parties about IIS’s business

practices and the relationship of IIS and its

products to MiniMed and its products. See 44 15,

16. Moreover, IIS claims, MiniMed broke its

promise to support IIS’s efforts to “increase sales

and grow business.” § 38. In addition to the causes

of action in the Petition, the First Amended Petition

seeks damages pursuant to MiniMed’s alleged trade

secrets violations, defamation, and detrimental

reliance. See 44] 27-41. Specifically, IIS asserts

claims pursuant to, inter alia, the Robinson-Patman

Act, 15 U.S.C. § 13(a), and La. R.S. § 51:331.

23a

On March 8, 1999, MiniMed timely removed the

case. See Rec. Doc. 1.

IIS bases its claims under the Robinson-Patman

Act and the Louisiana Price Discrimination Act on

the following: prior to January 1, 1999, IIS was one

of the three largest distributors of MiniMed

products. See Rec. Doc. 98, Ex. B at Sayer-1. IIS’

contractual distribution territory included

Louisiana, Texas, Arkansas, Ohio, Pennsylvania,

_ New York, Connecticut, New Jersey, Utah, Virginia,

North Carolina, and Mississippi. See Rec. Doc. 108,

MiniMed Inc.’s Resp. to Pl.’s Statement of Material

Facts in Supp. of Its Mot. for Partial Summ. J. with

Respect to Pl.’s Price Discrimination Claims at 919.

Additionally, IIS had contracts with third-party

payors that could require sales activities outside

this territory. See id. at § 20. Until December 31,

1998, IIS had been receiving a 29 percent discount

off list prices on MiniMed pumps. See Id. at § 16.

On December 31, 1998, the distribution

agreement terminated. See id. at | 12. Thereafter,

MiniMed stated that it was willing to provide its

pumps at list prices to IIS for resale. According to a

MiniMed invoice, on January 29, 1999, IIS

purchased from MiniMed a 507C insulin pump for

$4,995. See Rec. Doc. 98, Ex. B at Sayer-7. The

pump was shipped from California to Louisiana. See

id. There is also evidence that between January 1,

1999, and February 4, 1999, MiniMed sold other

distributors the same type of pump, across state

lines, for $3,996. See id. at Sayer-6. One of these

distributors was an entity identified on the invoice

as Secure Care Medical. See Id., Sayer-6 at 27. An

24a

entity identified as Secure Care and which the

Court assumes for the purposes of this Order is the

same as Secure Care Medical, was named as a

MiniMed distributor “in the south.” See Id. at 203.

A. STANDARD OF REVIEW

A district court can grant a motion for summary

judgment only when the “pleadings, depositions,

answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there

is no genuine issue as to any material fact and that

the moving party is entitled to a judgment as a

matter of law.” Celotex Corp. v Catrett, 477 U.S. 317,

322, 106 S. Ct. 2548, 2552, 91 L. Ed.2d 265 (1986)

(quoting Fed. R. Civ. P. 56(c)). When considering a

motion for summary judgment, the district court

“will review the facts drawing all inferences most

favorable to the party opposing the motion.” Reid v.

State Farm Mut. Auto. Ins. Co., 784 F.2d 577,578

(5 Cir. 1986). The court must find “[a] factual

dispute. . . [to be] ‘genuine’ if the evidence is such

that a reasonable jury could return a verdict for the

nonmoving party. . . [and a] fact. .. [to be] ‘material’

if it might affect the outcome of the suit under the

governing substantive law.” Beck v. Somerset Techs.,

Inc., 882 F.2d 993, 996 (5 Cir. 1989) (citing

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248,

106 S. Ct. 2505, 2510, 91 L. Ed.2d 202 (1986)).

Where, as is the case with IIS here, the movants

bear the burden of proof on an issue, “[they] must

establish beyond peradventure all of the essential

elements of the claim.. . to warrant judgment in

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[their] favor.” Fontenot v. Upjohn Co., 780 F.2d

1190, 1194 (5th Cir. 1986). “if the moving party

meets the initial burden of showing that there is no

genuine issue of material fact, the burden shifts to

the non-moving party to produce evidence or

designate specific facts showing the existence of a

genuine issue for trial.” Engstrom v. First Nat'l

Bank of Eagle Lake, 47 F.3d 1459, 1462 (5th Cir.

1995) (citing Celotex, 477 U.S. at 322-24, 106 S. Ct.

at 2552-53, 91 L. Ed.2d 265 and Fed. R. Civ. P.

56(e)). The mere argued existence of a factual

dispute will not defeat an otherwise properly

supported motion. See Anderson, 477 U.S. at 248,

106 S. Ct. at 2510, 91 L. Ed.2d 202. “If the evidence

is merely colorable, or is not significantly probative,”

summary judgment is appropriate. Id. at 249-50,

106 S. Ct. at 2511, 91 L. Ed.2d 202 (citations

omitted).

ANALYSIS

Robinson-Patman Act

Section 2(a) of the Clayton Act, as amended in

1936 by the Robinson-Patman Act, provides:

It shall be unlawful for any person engaged

in commerce, in the course of such

commerce, either directly or indirectly, to

discriminate in price between different

purchasers of commodities of like grade and

quality, where either or any of the purchases

involved in such discrimination are in

commerce, where such commodities are sold

26a

for use, consumption, or resale within the

United States .. . and where the effect of

such discrimination may be substantially to

lessea competition or tend to create a

monopoly in any line of commerce, or to

injure, destroy, or prevent competition with

any person who either grants or knowingly

receives the benefit of such discrimination,

or with customers of either of them... .

15 U.S.C. § 13(a).

_ Injury under § 13(a) is one of two basic types:

“primary line or secondary line.” Eximco, Inc. v.

Trane Co., 737 F.2d 505, 515 (5tht Cir.), reh’g

granted in part, amended in part on other grounds,

748 F.2d 287 (5 Cir. 1984). The Fifth Circuit

explains that “primarily-line injury, which occurs at

the level of direct competition, customarily results

when a seller uses predatory pricing policies to

enhance his market position over competitors.” Id.

Secondary-line injury results from _ price

discrimination between favored and disfavored

buyers. See Texaco, Inc. v. Hasbrouck, 496 U.S. 543,

558 n.15, 110 S. Ct. 2535, 2543 n.15, 110 L. Ed.2d

492 (1990).!2 IIS claims secondary-line injury here.

Accordingly, establishing a violation of § 13(a)

requires IIS to prove four facts: (1) sales made in

interstate commerce; (2) the commodities sold to IIS

12 In Hasbrouck, the Supreme Court also identified a

third category, tertiary-line injury, which is “the probable

impact of the [price] discrimination” on the customers of either

the “competitors of the seller” or “the favored and disfavored

buyers” Id. .

lia, Bae hn

27a

were of the same grade and quality as those sold to

other purchasers; (3) that MiniMed discriminated in

price between IIS and other purchasers; and (4) that

the discrimination had a prohibited effect ox

competition. See Lycon Inc. v. Juenke, 250 F.3d 285,

288 (5% Cir.), cert. denied, 122 S. Ct. 209, 151 L.

Ed.2d 149 (2001).

(1) Were requisite sales made in interstate

commerce?

To advance a Robinson-Patman Act claim under

this prong of the inquiry, “there must be actual sales

at two different prices to two different Buyers.” M.

C. Mfg.Co. v. Texas Foundries, Inc., 517 F.2d 1059,

1065 (5th Cir. 1975). IIS has set forth unrebutted

evidence that it ordered a pump from MiniMed for

$4,995, on January 29, 1999, and that the latter

shipped this pump from California to the former in

Louisiana. See Rec. Doc. 98, Ex. B at Sayer-7.

Moreover, IIS has submitted unrebutted evidence

that MiniMed sold pumps to a number of other

distributors outside California for $3,996 in January

and February 1999. See Id. at Sayer-6.

MiniMed nevertheless asserts that no actual sale

was made by MiniMed to IIS because IIS did not

pay for the pump and that the sale thus was not

made, thereby precluding IIS from prevailing on its

claim. The Court disagrees.

Under the laws of either California, from where

the pump was shipped, or Louisiana, to where the

pump was shipped, a sale of the pump was made. In

California, “[a] sale consists in the passing of title

from the seller to the buyer for a price. .. . “Cal.

28a

Com. Code § 2106. “Title passes to the buyer at the

time and place at which the seller completes his

performance with reference to the physical delivery

of the goods.” Cal. Comm Code § 2401. In Louisiana,

“fo]}wnershin is transferred between the parties as

soon as there is agreement on the thing and the

price is fixed, even though the thing sold is not yet

delivered nor the price paid.” La. Civil Code art.

2456. Thus, a sale was made for purposes of the

analysis here.

MiniMed contends, additionally, that the sale was

a sham designed to fashion a RobinsonPatman Act

claim and thus cannot be considered a qualifying

sale under the first prong of the inquiry here.

MiniMed states, without pointing to authority in

support, that the transaction here does not qualify

us a statutory sale because the Rcbinson-Patman

Act is designed to deal with harms occasioned by

“real commerce” and to address “real competitive

injury.” The Court again disagrees. MiniMed does

not explain how this sale, which created legally

enforceable rights and obligations, was not “real.”

Additionally, MiniMed’s focus on the lack of

competitive injury is more properly directed to the

fourth prong of the analysis, whether the price

discrimination had a prohibited effect on

competition.

Accordingly, because [IS has established that sales

were made at two different prices to two different

purchasers, it has satisfied its summary judgment

burden on the first element of its claim.

29a

(2) Were the commodities sold to ITS

of the same grade and quality

as those sold to other purchasers?

IIS has submitted evidence, which MiniMed does

not rebut, that MiniMed sold to IIS the same model

pump as it did to MiniMed’s competitors. Thus, IIS

has satisfied its surnmary judgment burden under

the second prong of the inquiry here.

(3) Did MiniMed discriminate in price

between IIS and other purchasers?

Under this prong of the analysis in a secondary-

line case, “plaintiff must first prove that, as the

disfavored purchaser, it was engaged in actual

competition with the favored purchaser(s) as of the

time of the price differential.” Best Brands Beverage,

Inc. v. Falstaff Brewing Co., 842 F.2d 578, 584 (2d

Cir. 1987). “The competitive nexus requirement is

satisfied when there is a showing of ‘competitive

contact’ between the recipients of the price

differential. It must therefore be shown that, as of

the time the price differential was imposed, the

favored and disfavored purchasers competed at the

same functional level, i.e., all wholesalers or all

retailers, and within the same geographic market.”

Id. at 585 (quoting F. Rowe, Price Discrimination

Under the Robinson-Patman Act 173-180 (1882)) As

the Fifth Circuit has explained, “Competition is

determined by careful analysis of each party’s

customers. Only if they are each directly after the

same dollar are they competing.” M.C. Mfg., 517

F.2d at 1068 n.20 (quoting Ag-Chem Equip. Co. v.

Hahn, Inc., 350 F. Supp. 1044, 1051 (D. Minn. 1972),

30a

modified on other grounds, 480 F.2d 482 (8th Cir.

1973)).

MiniMed contends that IIS’ proof fails in this

regard. The Court agrees. IIS shows that MiniMed

sold numerous other retailers the same pump for

$3,996 that MiniMed sold to IIS for $4,995. See Rec.

Doc. 98, Ex. B at Sayer-7; id. at Sayer-6. IIS claims

that it was the nationwide competitor of these

entities and submits as evidence thereof a memo to

the effect that before the alleged price

discrimination occurred, it was one of MiniMed’s top

three distributors. See Rec. Doc. 98, Ex. B at Sayer-

1. Even assuming, arguendo, that IIS was one of

MiniMed’s top three distributors, the conclusion

that the markets of these distributors overlapped

does not necessarily follow. IIS does not specificaliy

indicate any evidence showing that the company :

directly competed with any of these companies for

“the same dollar” nationwide. See M.C. Mfg., 517

F.2d at 1068 n.20.

IIS has submitted evidence that prior to the

alleged price discrimination, it competed with at

least one other reseller, Secure Care, in the South,

to which similar pumps were sold during the period

of the alleged injury. See Rec. Doc. 98, Ex. B at 203;

id., Sayer-6 at 27. Additionally, IIS has submitted

evidence that an entity named National Diabetes 7

Pharmacy distributed MiniMed products in

Virginia. See id, Ex. B at 203. A MiniMed official

also identified as a distributor of MiniMed products

an entity named JQ Medical. See id.

IIS baldly asserts, “All of these distributors were

within the United States and even fell within the

ell

3la-

pre-1999 territory of IIS set out in the MiniMed-IIS

Educational Dealer Agreement! How can MiniMed

even suggest to the Court with a straight face that

IIS did not compete with the favored purchaser-

distributors who resold MiniMed products in IIS’

territory?” Yet, although IIS has submitted proof

that under the contract IIS distributed MiniMed

products in Southern states (e.g., Louisiana), IIS

simply has specifically pointed to no evidence that

at tle time of the alleged price discrimination, it

‘was competing with Secure Care or any other entity

in a particular market.!3 Its claim thus fails, and

summary judgment on the Robinson-Patman Act

claim accordingly must be awarded to MiniMed.!4

13° The Court notes that:

unsubstantiated assertions are not competent summary

judgment evidence. The party opposing summary

judgment is required to identify specific evidence in the

record and to articulate the precise manner in whi: 7: that

evidence supports his or her claim. Rule 56 does not

impose upon the district court a duty to sift through the

record in search of evidence to support a party’s opposition

to summary judgment.

Ragas v. Tennessee Gas Pipeline Co., 136 F.3d 455, 458 (5th

Cir. 1998) (internal citations and quotations omitted).

'4 Given the Court’s basis for determining that IIS has

failed to carry its burden against MiniMed’s summary

judgment motion under the third prong of the analysis, the

Court need not address MiniMed’s alternative argument for

dismissal on this prong; the cross-motions as to the final prong

of the § 2(a) inquiry, whether the discrimination had a

prohibited effect on competition; or the cross-motions as to

whether IIS suffered actual injury under § 2(a) for the purpose

of establishing IIS’ entitlement to treble damages pursuant to

§ 4 of the Clayton Act, 15 U.S.C. § 15.

32a

La. R.S. § 51:331

The Louisiana Price Discrimination Statute

provides:

No person, doing business in Louisiana, and

engaged in the production, manufacture, or

distribution of any commodity in general

use, who shall, intentionally, for the purpose

of injuring or destroying the business of a

competitor in any locality, discriminate

between different sections, communities,

cities, or localities in the state by selling

such commodity at a lower rate in one

section, community, city, or locality, than is

charged for the commodity by such person in

another section, community, city, or locality,

after making due allowance for the

difference if any, in the grade or quality of

the commodity and in the actual cost of

transportation of the commodity from the

point of production, if a raw product, or from

the point of manufacture, if a manufactured

product. All sales so made shall be prima

facie evidence of unfair discrimination.

La. R.S. § 51:331.

The parties essentially contend that IIS’ price

discrimination claim must be analyzed the same

under the Louisiana statute as it is under § 2(a) of

the Robinson-Patman Act. See .Jefferson v. Chevron

33a

USA., Inc., 98-0254 (La. App. 4 Cir., 5/26/98), 713

So. 2d 785,792 n. 1 (Louisiana statute is “closely

analogous” to Robinson-Patman Act). The plain

language of the statute, however, makes it clear

that the Louisiana legislature intended to address

discriminatory pricing “in the state.” La. R.S. §

51:331. Nevertheless, IIS sets forth no specific

evidence that MiniMed charged IIS a different price

than it charged any other pump purchaser in

Louisiana. Accordingly, MiniMed’s motion for

summary judgment on IIS’ claim under La. R.S. §

51:331 is granted.

1. CONCLUSION

For the foregoing reasons,

IT IS ORDERED that:

(1) IIS’ Moticn for Partial Summary Judgment is

hereby DENIED, and

(2) MiniMed’s Motion for Summary Judgment is

hereby GRANTED as to IIS’ claims under 15 U.S.C.

§ 13(a) and La. R.S. § 51:33 1.

New Orleans, Louisiana, this 24 day of May, 2002.

/s/ signature illegible

For Helen G.Berrigan

Chief Judge