Advanced Microtherm, Inc. v. Norman Wright Mechanical Equipment Corp. ( 2013 )

FILED
NOT FOR PUBLICATION MAY 30 2013
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
ADVANCED MICROTHERM, INC.; No. 11-16637
HVAC SALES, INC.,
D.C. No. 5:04-cv-02266-JW
Plaintiffs - Appellants,
v. MEMORANDUM *
NORMAN WRIGHT MECHANICAL
EQUIPMENT CORPORATION;
TEMPCO, INC.; F.W. SPENCER & SON,
INC.,
Defendants - Appellees.
Appeal from the United States District Court
for the Northern District of California
James Ware, District Judge, Presiding
Argued and Submitted March 13, 2013
San Francisco, California
Before: NOONAN, FISHER, and NGUYEN, Circuit Judges.
Advanced Microtherm, Inc. and HVAC Sales, Inc. (“AMT/Sales”) brought
suit against Norman Wright Mechanical Equipment Corporation (“Norman
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
Wright”), F.W. Spencer and Son, Inc. (“Spencer”), and others in the Northern
District of California alleging violations of state and federal antitrust law. All
defendants but Norman Wright and Spencer were dismissed from the suit. The
district court granted summary judgment or judgment as a matter of law against
AMT/Sales’s bid-rigging, tying, conspiracy, and exclusive dealing claims against
Norman Wright. The district court granted judgment as a matter of law against all
of AMT/Sales’s claims against Spencer. A jury decided against AMT/Sales on
their remaining claims of attempted monopolization, commercial bribery, and
intentional interference with a contract.
The factual content of the twenty-two volumes of record is adequately
known to the parties and need not be recounted here. AMT/Sales argue that the
district court erred in granting judgment against their bid-rigging/price-fixing and
tying claims. In addition, AMT/Sales allege that the district court erred in its
evidentiary rulings and rejection of several jury instructions. Not one of the various
arguments presented by AMT/Sales is convincing. Accordingly, we affirm.
The district court granted partial summary judgment against AMT/Sales on
their bid-rigging and price-fixing claims because they lacked antitrust injury and
hence standing to sue. An alleged error in the district court’s grant of a motion for
summary judgment or judgment as a matter of law is reviewed de novo. United
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States ex rel Cafasso v. Gen. Dynamics C4 Sys., 637 F.3d 1047, 1060 (9th Cir.
2011). Here, AMT/Sales’s attorney stated in open court, “We have no claim for
price fixing or bid rigging. It is not a claim for which we claim damages.” Antitrust
injury must be alleged to establish antitrust standing. Assoc’d Gen. Contractors of
California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 534-37
(1983). Hence, AMT/Sales lacked standing to bring their claims for bid rigging
and price fixing.
The district court granted summary judgment against AMT/Sales on their
federal and Cartwright Act tying claims. First, AMT/Sales did not prove “market
power in [a] tying product” as required under federal law. See Illinois Tool Works
Inc. v. Indep. Ink, Inc., 547 U.S. 28, 46 (2006). Instead, AMT/Sales made a novel
claim that an engineer’s use of a flat specification (“flat spec”) creates a product
market in which the seller of the flat spec’d product has “infinite market power.”
The district court found this argument unconvincing, reasoning that “[w]hile
[Norman Wright’s] exclusive ability to distribute a flat spec’ed product may
prevent competitors from participating in one particular project, it does not follow
that competition is harmed as to any other project that involves HVAC products.
[AMT/Sales has] simply failed to provide any evidence whatsoever that a single
project where flat spec’ing occurs is a relevant market.” The district court’s logic
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on the federal claim is sound and applies equally to the California tying claim. The
federal and Cartwright Act tying claims are not identical. Morrison v. Viacom,
Inc., 66 Cal. App. 4th 534 (1998), articulates a second, less stringent standard for
Cartwright Act claims. See id. at 541-42. However, the district court’s reasoning
remains correct: AMT/Sales, having failed to identify “a relevant market,” did not
introduce evidence that Norman Wright had market power or control over a
substantial amount of commerce.
The district court granted judgment as a matter of law to Norman Wright on
AMT/Sales’s antitrust conspiracy and exclusive dealing claims. AMT/Sales’s
proffered evidence leaves cavernous gaps in these two claims. Specifically, there is
no evidence of an agreement that demonstrates antitrust conspiracy or exclusive
dealing. The proffered evidence of a mere opportunity to engage in a conspiracy is
quite a bit short of the evidentiary scintilla needed to send the question to a jury.
Similarly, choosing a higher bidder, realizing high profits, and making take-it-or-
leave-it offers would not have supported a jury verdict without more. AMT/Sales’s
antitrust conspiracy and exclusive dealing claims were appropriately dismissed.
The district court limited evidence of commercial bribery to damages from
P-Projects. P-Projects are those projects for which AMT/Sales either submitted
bids or determined that it was futile to do so. Alleged errors concerning pretrial
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management or evidentiary matters are reviewed for an abuse of discretion. Theme
Promotions, Inc. v. News Am. Mktg. FSI, 546 F.3d 991, 1000 (9th Cir. 2008). Here,
AMT/Sales prepared a list of 150 P-Projects and stipulated that it would seek
damages only for those projects. Hence, the district court properly limited evidence
to projects on the list.
Numerous errors in the jury instructions are alleged. “Whether there is
sufficient evidence to support an instruction is reviewed for abuse of discretion.”
Yan Fang Du v. Allstate Ins. Co., 697 F.3d 753, 757 (9th Cir. 2012). First, the
district court included language requiring the jury to find that Norman Wright was
engaged in interstate commerce. AMT/Sales propose that Norman Wright had
already admitted that they were engaged in interstate commerce. AMT/Sales make
this argument for the first time on appeal. Since AMT/Sales’s objection was raised
only after the jury’s verdict, this argument is waived. See Yeti by Molly, Ltd. v.
Deckers Outdoor Corp., 259 F.3d 1101, 1110 (9th Cir. 2001). Second, the district
court rejected AMT/Sales’s proposed jury instruction 9 on the in pari delicto
defense. Norman Wright had not asserted this defense at trial, so there was no
reason for the district court to have instructed on it. Third, the district court
rejected AMT/Sales’s proposed Cartwright Act jury instructions numbered 3, 17,
and 18. The proposed jury instructions did nothing to clarify or particularize the
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law to the facts of the case and hence were unhelpful and potentially even
misleading. In addition, no instructions were necessary because the district court
had already granted judgment as a matter of law against the tying and exclusive
dealing claims to which these instructions might have applied. Fourth, the district
court rejected AMT/Sales’s proposed business tort jury instruction. Proposed jury
instruction number 16 would have advised the jury on the tort of intentional
interference with a prospective economic interest. AMT/Sales did not object at trial
or in their motion for a new trial. Hence, AMT/Sales have waived the issue for
appeal. Ayuyu v. Tagabuel, 284 F.3d 1023, 1026-27 (9th Cir. 2002).
Finally, the district court granted judgment as a matter of law to co-
defendant Spencer on the charges of: (1) antitrust conspiracy, (2) exclusive
dealing, (3) attempted monopolization, (4) commercial bribery, (5) unfair
practices, and (6) intentional interference with a prospective business advantage.
The analysis of the conspiracy and exclusive dealing issues is the same for Spencer
as for Norman Wright.
AMT/Sales’s examples of Spencer’s wrongdoing are unpersuasive. The
plaintiffs note that Troy Reese, a plumber, testified that Spencer was part of “a
clique” in the industry; but on cross-examination Reese admitted that he had no
direct knowledge of the bidding at issue. Spencer himself testified that he always
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accepted the lowest bid. The plaintiffs jump on this testimony because at trial
Spencer stated that he always accepted the lowest responsive bid. The plaintiffs
cannot prevail by characterizing such clarification as prevarication.
AFFIRMED.
The motion to take judicial notice filed October 22, 2012 is GRANTED.
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