Daw Industries, Inc. v. Hanger Orthopedic Group, Inc. , 556 F. App'x 604 ( 2014 )

FILED
NOT FOR PUBLICATION FEB 24 2014
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
DAW INDUSTRIES, INC., a California No. 11-56858
corporation,
D.C. No. 3:06-cv-01222-JAH-NLS
Plaintiff - Appellant,
v. MEMORANDUM*
HANGER ORTHOPEDIC GROUP, INC.,
Defendant - Appellee.
Appeal from the United States District Court
for the Southern District of California
John A. Houston, District Judge, Presiding
Argued and Submitted February 4, 2014
Pasadena, California
Before: PREGERSON and BERZON, Circuit Judges, and AMON, Chief District
Judge.**
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The Honorable Carol Bagley Amon, Chief District Judge for the U.S.
District Court for the Eastern District of New York, sitting by designation.
DAW Industries (“DAW”) appeals the district court’s grant of summary
judgment on its claims that Hanger Orthopedic Group (“Hanger”) violated
California’s Cartwright Act by conspiring to restrain trade in the market for
prosthetic microprocessor knees and to attempt to monopolize that market, Cal.
Bus. & Prof. Code § 16726; that Hanger engaged in unfair business practices, Cal.
Bus. & Prof. Code § 17200; and that Hanger committed trade libel under
California law. We affirm on all counts.
I. To make out a claim for conspiracy in restraint of trade under the
Cartwright Act, DAW must prove that Hanger or its alleged co-conspirators acted
in restraint of trade, among other elements. See Quelimane Co. v. Stewart Title
Guar. Co., 960 P.2d 513, 525 (Cal. 1998). Malicious action against a competitor
with no adverse effect on competition is not actionable under the Cartwright Act.
“It is well accepted that ‘the antitrust laws . . . were enacted for the protection of
competition not competitors.’ . . . Injury to a competitor is not equivalent to injury
to competition; only the latter is the proper focus of antitrust laws.” Marsh v.
Anesthesia Serv. Med. Grp., Inc., 200 Cal. App. 4th 480, 495 (Ct. App. 2011) (first
ellipses in original) (some internal quotation marks omitted) (quoting Cel-Tech
Commc’ns, Inc. v. Los Angeles Cellular Tel. Co., 973 P.2d 527, 544 (Cal. 1999)).
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Here, DAW provides no evidence whatever, expert or otherwise, that
Hanger or its alleged co-conspirators adversely affected competition in the relevant
market. And what little anecdotal evidence the record contains cuts against DAW:
In the years that Hanger purportedly acted pursuant to its anticompetitive
conspiracy, several new prosthetic microprocessor knees entered the United States
market. That evidence suggests that competition remained robust, notwithstanding
any damage to DAW’s sales.
DAW’s claim that Hanger conspired in an attempt to monopolize the market
in prosthetic microprocessor knees fails for the same reason as its complaint of
conspiracy in restraint of trade. A conspiracy to monopolize is unlawful under the
Cartwright Act only if the conspiracy has a “dangerous probability of obtaining a
monopoly . . . . ” Exxon Corp. v. Superior Court, 51 Cal. App. 4th 1672, 1687 (Ct.
App. 1997) (citing, inter alia, Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447,
454–58 (1993)). Establishing such a dangerous probability of success “requires
inquiry into the relevant product and geographic market and the defendant’s
economic power in that market.” Spectrum Sports, 506 U.S. at 459. But DAW
offers no evidence at all as to each competitor’s share of the market for prosthetic
microprocessor knees. One of Hanger’s experts discussed data concerning the
market for lower extremity prostheses in the United States generally — a category
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which includes all above-the-knee and below-the-knee prostheses, not just artificial
knees and not just microprocessor prostheses. Those statistics thus tell us nothing
of the relevant market.
For these reasons, we affirm the district court’s grant of summary judgment
against DAW on its Cartwright Act claims.
II. DAW concedes that its unfair business practices claim is premised on its
antitrust claim. See Cel-Tech Commc’ns, 973 P.2d at 539–40. The claim thus falls
alongside DAW’s antitrust claims.
III. A trade libel claim under California law requires proof of special
damages, among other elements. Aetna Cas. & Sur. Co. v. Centennial Ins. Co.,
838 F.2d 346, 351 (9th Cir. 1988) (applying California law); Guess, Inc. v.
Superior Court, 176 Cal. App. 3d 473, 479 (Ct. App. 1986). To prevail, a plaintiff
“may not rely on a general decline in business arising from the [alleged] falsehood,
and must instead identify particular customers and transactions of which it was
deprived as a result of the libel.” Mann v. Quality Old Time Serv., Inc., 120 Cal.
App. 4th 90, 109 (Ct. App. 2004); accord Erlich v. Etner, 224 Cal. App. 2d 69, 75
(Ct. App. 1964).
Here, DAW has not specifically identified any lost sales traceable to the
alleged falsehood. It maintains that it need not do so on a motion for summary
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judgment, arguing that we should infer that, as sales of expensive, sophisticated
prostheses are traceable, DAW will be able to supply the necessary evidence at
trial that DAW’s decline in sales was caused by Hanger’s alleged falsehood. DAW
is entitled to no such inference of causation. “A party opposing a motion for
summary judgment simply cannot make a secret of his evidence until the trial, for
in doing so he risks the possibility that there will be no trial.” Walker v. Hoffman,
583 F.2d 1073, 1075 (9th Cir. 1978) (per curiam).
Here, too, we affirm; the district court properly granted summary judgment
on DAW’s trade libel claim.
AFFIRMED.
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