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SAS of Puerto Rico v. PR Telephone Co., 1st Cir. (1995)
SAS of Puerto Rico v. PR Telephone Co., 1st Cir. (1995)
March 1, 1995
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 94-1711
SAS OF PUERTO RICO, INC.,
Plaintiff, Appellant,
v.
PUERTO RICO TELEPHONE COMPANY,
Defendant, Appellee.
____________________
ERRATA SHEET
ERRATA SHEET
"Illinois Br
___________
Co. v. Illinois, 431 U.S. 720 (1977). Compare Hanover Shoe, Inc.
___
________
_______ ___________________
United Shoe Mach. Corp., 392 U.S. 481 (1968).".
_______________________
Page 10, note
"Brunswick".
4,
line
two
of
note,
read:
"Brunswich"
should
BOUDIN,
Circuit Judge.
______________
SAS
the
Puerto
Rico, the
dismiss
on the
ground
"antitrust injury."
Rico,
Inc.
transferred
district
Puerto
of
to the
district
court granted
that SAS
court in
PRTC's motion
did not
to
adequately assert
In
April
1993
SAS
filed its
original
complaint
in
transferred to
Puerto Rico, the site of most of the events that underlie the
case,
an amended
complaint was
filed.
Since the
amended
appeal.
Berkovitz
_________
What
follows is
by information not
reasonably disputable.
PRTC is
percent
of
operates
a Delaware
the telephone
over 95 percent of
service
within
about 90
Puerto Rico
and
in Puerto Rico.
stock of PRTC
Authority
government
("the
Authority"),
instrumentality
of
public
the
corporation
Commonwealth.
and
The
Authority
also
owns
the
stock
of
the
Puerto
Rico
-2-2-
provides telephone
now merged.)
Long distance
mainland was
interconnecting on the
the
Federal
facilitate
traffic.1
Authority
To
Commission
for
Puerto
participate
in this
subsidiary
took
Rico's
new
long
steps
to
distance
environment,
the
an ITT
Communications
competition
provided by
legislation designed
to facilitate
the Authority's
about 80 percent
of the long
Puerto Rico.
Although the
made
mechanics are
by
located
lobby;
on
commonly located on
the local
telephone
private property
in the
latter
streets or other
company
such as
instance, the
in
or
public
they may
a store
instrument is
be
or hotel
usually
____________________
1E.g., All America Cables & Radio, Inc. v. FCC, 736 F.2d
____ ________________________________
___
752 (D.C. Cir. 1984); Common Carrier Facilities Off of the
______________________________________
Island of Puerto Rico, 2 F.C.C.R. 6600 (1987), on recons.,
______________________
__________
FCC 92-529 (1992).
-3-3-
(although
not
always)
furnished
by
the
local
telephone
long distance
decades,
competition
developed over
telephone subscribers
have
the past
ordinarily been
calls
would be
routed.
A small
phones
make it
easy for
the
preferred long
but
in
many
percentage of
caller to
select his
phones, a
modern pay
a single button;
pre-designated
long
or her
distance
caller
carrier.
According to
means of calling
different
an operator and
asking to
be routed to
distance carrier--
many of the
local telephone
to
phones.
SAS was formed as
the
hope
of
equipment and
contracting
with
PRTC
and
-4-4-
PRCC to
1991 in
upgrade
The
complaint explains
that "[t]he
principals of
SAS were
and,
fact,
had
phone system in
Such intelligent
effectively
callers
in
computers,
(e.g., speed
____
successfully
assisted in
can
provide various
dialing)
and to
Virgin
what are
advantages
the local
to
telephone
to be supplied by SAS
to negotiate with
telephone
secure the
company
such carriers, as
or premises
most favorable
would
terms
owner,
for the
SAS
presumably to
position of
pre-
In addition
task of
the caller who desired to route his or her own call through a
long distance carrier other than the pre-assigned carrier.
On
investment
of considerable
"agency agreement"
maintain
agreement
with both
pay telephones
time and
money," SAS
in Puerto
Rico.
signed an
to provide
As to
and
PRTC, the
minimum of
1,500
of PRTC's
pay
phones at
business centers.
to negotiate
the
with
premises owner
tourist
and
to
alter
the
pre-
-5-5-
designated
long
phones to
distance carrier
for
the
intelligent pay
an
international
with
subsidiary of
Part
SAS-PRTC agreement.
Telefonica
Spain's
de
Espana,
the
telephone company,
to
According
to the
complaint, PRTC
complaint does
not
describe
this conduct
beyond
the contract
On June 18,
modifications
1992, SAS
in
the
original
agreement
demands on
and PRCC
and
to
shortly
SAS
equipment.
to stop operations.
In October 1992
second
-6-6-
In
district
April
1993, SAS
began the
court in Delaware,
The complaint
(as later
present lawsuit
PRTC's state
amended) says
in the
of incorporation.
that after
the case
or all
of the
pay phones
contracted to
replace; PRTC
later
accepted
one
of the
bids;
and
PRTC
some of the
same
to
own contract
with PRTC.
The complaint
the acts
monopolization
of two
different markets
and attempted
and conspiracy
15 U.S.C.
1-2.
to
of the
to have
economic entity"
such
were alleged
to have
provision of long
power in
"the
pay
named as a co-conspirator.
already described,
In addition
de Espana
to the conduct
-7-7-
delayed the
counts of
of contract,
between
stations.
the
On
SAS
the
complaint charged
and
and
PRTC with
tortious interference
makers
or
antitrust counts,
suppliers
with
of
the complaint
pay
sought
counts,
attorney's fees.
it asked
for compensatory
damages and
antitrust
that
341
doctrine, see
___
in the
alleged.
from damage
that it
Parker v.
______
alternative, that
PRTC also contended
liability for
antitrust
34-36.
the
(1943), or,
shielded
violations by
1994,
state action
it was
U.S.C.
by the
317 U.S.
district
statutory arguments
In an
court
opinion and
rejected the
but dismissed
the antitrust
action
9,
and
claims for
Having
the antitrust
supplemental jurisdiction
under state
declined to exercise
law as to
the fraud,
-8-8-
An order
appeal followed.
antitrust injury
claims.
See 28
___
U.S.C.
the complaint,
and
taken in
opinion, we
-9-9-
II.
Despite
largely
the
its
statutory
handiwork
of
framework,
federal
antitrust
judges
and
law
is
antitrust
admire.
The
is
As one
commentator
has observed,
"the
range of potential
Antitrust Policy
_________________
543
cases."
(1994).
H.
Cf.
___
Hovenkamp, Federal
_______
Associated General
___________________
(e.g.,
____
proximate
to antitrust law.
so
that
not
everyone
From
and through
restrictions
purchasers),
on
a variety
suits
metaphors
by
(e.g.,
____
of subordinate
rules (e.g.,
____
stockholders
or
"inextricably
intertwined,"
indirect
injury),
Sullivan v.
________
Tagliabue, 25 F.3d
_________
1994).
-10-
43 (1st
Cir.
-10-
problems:
whether
causally (in
challenged conduct.
different concept:
plaintiff has
the
there has
antitrust
"but for"
Standing
been an
sense)
related to
the
even where
violation exists
and
prudence--have sought
of private parties
on fear
litigation.2
One
set of limitations
of duplicative recovery
Another
is
has
and excessively
concerned
with
the
or
the
connection.3
Another
set
reflects
an
from pro-competitive
or irrelevant
effects of an
otherwise
____________________
2Illinois Brick Co. v. Illinois, 431 U.S. 720 (1977).
___________________
________
Compare Hanover Shoe, Inc. v. United Shoe Mach. Corp., 392
_______ ___________________
________________________
U.S. 481 (1968).
3Associated General Contractors, 459 U.S. at 543; Hawaii
______________________________
______
v. Standard Oil Co., 405 U.S. 251, 262-63 n.14 (1972).
________________
-11-11-
anticompetitive
overlap;
and
transaction.4
the
list
surprising that no
best
antitrust
is
These
not
elements
exhaustive.
and
deciding
sometimes
It
is
not
second-best
cases that
there
offer
are
patterns
in
the
considerable guidance.
antitrust
One
of
those patterns
suffers because an
employee who
suffered
violation
"antitrust
and
causal
would otherwise
supplies labor) is
injury";
harm
to
held not
to
may
while there
the
supplier,
the
be
failed
& H. Hovenkamp,
Antitrust Law
_____________
375
(rev. ed.
plaintiffs; a
victimized
lowered
by a
seller
may well
price-fixing ring
have
a claim
if
composed of
buyers that
a case the
seller is a
in such
antitrust
violation,
antitrust
usually
the
conduct
was
deemed
an
____________________
4Cargill v. Montfort of Colorado, 479 U.S. 104 (1986);
_______
____________________
Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477
________________
________________________
(1977).
-12-12-
violation
because
of the
threat to
the customer,
not the
supplier.
Here,
injured
because
violation by
the
course
its customer
a third party;
of
its
failed
to an
antitrust
(PRTC) in
own violation
allegedly
breached
violation because
posed
other potential
_____
happenstance supplier
of
the anticompetitive
plaintiffs,
to a
its
antitrust
to
due
not SAS.
customer felled by
was an
threat
Like the
a violation,
alleged that
of
pay
provision
of long
phone
PRTC's conduct
service
distance
harmed or
in
Puerto
service from
Rico and
such pay
both is a proper
the
phones.
"relevant
S.
plaintiff
Ct.
is
884,
a
threatened market
892 (1993),
customer
or a
who
the
presumptively
obtains
competitor who
"proper"
services
seeks to
in
the
serve that
market.
a better
-13-13-
Nor
its
pay phones
PRTC;
SAS' aim
Finally, despite
in
the
in
become, a long
seeking access to
competition with
was to supply
such phones
that SAS
the primary
complaint suggests
distance service.
was,
provider,
to or
for PRTC.
about to
might be benefitted
by
district court
chose
to characterize
the
wrong as
simple contract
antitrust claim
as well.
misconduct can be
Certainly,
the gravamen of
single plaintiff.
an individual
act of
as a potential
claim in a
claim masquerading as a
to a
contract
candidate
the
problem
here
is
not
that
plaintiff
through
as
involved--PRTC's
It is that the
central
insofar as
here
is
failing
the same
conduct
is also
____
an antitrust
to
carry
Insofar
violation, that
-14-14-
the
antitrust laws.
district
This
court meant in
is almost certainly
saying that SAS's
If competitors and
plaintiffs in
of those presumptively
is far longer.
of those
injured,
but are
"employees
of
landlords, and
554.
The list
usually
the
who may be
denied standing
violator,
and
disfavored
derivatively
to sue
includes
stockholders, creditors,
employees of victims."
Hovenkamp, supra, at
_________ _____
a supposed
violator.
always; there
can
But
"presumptively" does
be exceptions,
for good
reason for
conferring standing
second-best plaintiff
is that,
in some general
cases,
no first
best
there
may be
ability to sue.
at 542.
market
cause
plaintiffs,
category of
incentive or
with the
on a
alleged
above all,
by
SAS
include
long distance
various
potential
carriers, who
should
customers.
If there is
any other
-15-15-
on an
to us.
We have concerned ourselves
question
whether
SAS is
market threatened by
competitor or
consumer
element in
against
SAS in
reasons
for
the antitrust
this case.
limiting
character of
cases,
like
threatened.
At
one,
if
violation
PRTC had or
one
the
where no
of the
speculative
relationship between
blush it
may
duplicative
violation it
seem
was,
contract.
that works
even in
recovery
is
first
violation,
whatever
this
concerns
injury or the
But there is a
already noted,
standing
either the
standing cases
As
in the
But
more
carefully
as if
clearly
antitrust
deprived SAS
of
PRTC's
the
supposed
antitrust laws
to
upgrade
that duty is
it is not clear
failure to carry
PRTC
a duty to upgrade,
the
upgrading be done by
they certainly do
SAS or any
laws impose on
not require that
-16-16-
Conversely, once SAS got the contract and PRTC then allegedly
breached
it, SAS
faced
injury--but the
injury would
have
Thus,
between "antitrust"
to say
Supreme Court's
There,
by a
services could
sue
under the
antitrust laws
to
psychiatrists,
to
receiving
compensation under
exclude
the
psychologists
plan.
Although not
from
the
reimbursement--was held
laws.
In language much stressed by SAS, the Supreme Court said
that McCready's injury "was inextricably intertwined with the
injury
to inflict
on psychologists
McCready is
________
that it may
-17-17-
be
who
was
boycott
only
derivatively
directed against
psychiatrists.
which
the
But
injured, there
psychologists
plaintiff was
by
an
for the
benefit of
be read as a
purchaser
in the
alleged
very
case in
market
directly distorted
Hovenkamp, supra,
_____
be said of SAS.
Thus,
the
present case
language
only
real
is the very
of the former.
link between
McCready
________
and
the
difficulties in application,
indirect purchasers.
Nothing
in McCready suggests
________
the
In all
events, the
phrase
as
Contractors, saying
___________
this
case
Union
was
Supreme Court
legal conclusion
simply reinterpreted
in
Associated General
___________________
consumer
nor
phrase):
"In
however, the
competitor
in
the
[restrained] market
. . . ."
It did the
-18-18-
same
thing
more
Petroleum Co.,
______________
recently
495
U.S.
in
Atlantic Richfield
___________________
328,
345
(1990)
v.
USA
___
(injury
not
not think
that
anything more
need
be said
We
about
the
matter.
III.
Having
may
have
assumed throughout
occurred,
assumption
is
"essential
facilities"
self-executing
existence
very
it
is
much
formula.5
of causation
that an
prudent
open
to
to
antitrust violation
stress
debate;
doctrine is
something
We
also
have
of harm "in
that
the
this
purported
less than
supposed
fact", see
___
a
the
Sullivan v.
________
NFL,
___
34 F.3d
suggested at
1091, 1103
the end of
(1st Cir.
1994); but
for reasons
a serious
violation"--
all
events,
antitrust violation,
even
where there
is
laws.
harm-causing
is entitled to
In this case,
supposing an
antitrust relief.
complaint are true,
SAS's remedies, if
other pertinent
-20-20-