Antitrust Law Daily Wrap Up, ANTITRUST NEWS: Exclusion of evidence of past trade restraints not on High Court’s agenda, (Jan 13, 2014)

By Jeffrey May, J.D.

The U.S. Supreme Court will not review an unpublished decision of the U.S. Court of Appeals in San Francisco rejecting antitrust claims brought by heating and air conditioning equipment distributors. Today, the Court rejected a petition for certiorari filed by the complaining distributors on October 9, 2013 (Advanced Microtherm, Inc. v. Norman Wright Mechanical Equipment Corp., Dkt. 13-466).

The action was brought by new market entrants Advanced Microtherm, Inc. and HVAC Sales, Inc. against Norman Wright Mechanical Equipment Corp., F.W. Spencer & Son, Inc., and other parties, alleging various violations of federal and state antitrust law in the supply of heating and ventilation products for construction projects. The plaintiffs-appellants described a market rife with bribery and anticompetitive conduct.

In a May 30, 2013, decision (2013-1 Trade Cases ¶78,401), the appellate court upheld a lower court’s decision granting summary judgment to Norman Wright on bid rigging, tying, conspiracy, and exclusive dealing claims, and granting summary judgment to Spencer on all claims against it. Also at issue in the appeal were jury instructions. A jury had decided for Norman Wright on attempted monopolization, commercial bribery, and intentional interference with a contract claims.

The petitioners raised five questions in their petition: (1) whether a pre-existing price fixing agreement in a market is admissible evidence to show the motive, intent, and purpose of predatory acts against a new entrant; (2) whether bribes to secure tying arrangements that exclude the plaintiff from substantial markets is a per se violation of the antitrust laws; (3) whether it was error to instruct a jury that it may not consider the overall effect of bribes on all customers receiving them, but rather may only consider them on a project-by-project basis, in a market saturated by massive commercial bribes; (4) whether a federal court deprives an antitrust plaintiff of due process by applying a more stringent federal tying standard to a California state law tying claim; and (5) whether the credibility of an impeached material witness is a determination for the jury, or may a court substitute its view of the testimony and then grant directed verdict on that interpretation.

According to the petitioners, “the courts below excluded any evidence of the existence of the monopoly and price-fixing prior to the entry in to the market of the price cutting competitor.” The petitioners unsuccessfully urged the Supreme Court to grant the petition and to reaffirm its view that “the jury in an antitrust case should be allowed to consider ‘the whole picture,’ including evidence of trade restraints that existed prior to a plaintiff’s entry into the market.”

Attorneys: Joseph M. Alioto (Alioto Law Firm) for Advanced Microtherm, Inc. Robert H. Bunzel (Bartko Zankel Bunzel & Miller PC) for Norman Wright Mechanical Equipment Corp.

Companies: Advanced Microtherm, Inc.; HVAC Sales, Inc.; Norman Wright Mechanical Equipment Corp.; F.W. Spencer & Son, Inc.

News: Antitrust