MARJAM SUPPLY COMPANY v. FIRESTONE BUILDING PRODUCTS COMPANY, LLC et al
Filing
191
OPINION. Signed by Judge William J. Martini on 4/1/19. (gh, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
MARJAM SUPPLY CO.,
Civ. No. 2:11-cv-7119
Plaintiff,
OPINION
v.
FIRESTONE BUILDING PRODUCTS
COMPANY, LLC, et al.,
Defendants.
WILLIAM J. MARTINI, U.S.D.J.:
This matter comes before the Court on Defendants Firestone Building Products Company,
LLC’s, Firestone Diversified Products, LLC’s, and GenFlex Roofing Systems, LLC’s collective
motion for summary judgment. ECF No. 188. For the reasons set forth below, the motion is
DENIED.
I.
BACKGROUND
Plaintiff Marjam Supply Co. (“Marjam”) brings this antitrust suit under Sections 2(a) and
2(d) of the Robinson-Patman Act, 15 U.S.C. § 13, et seq. (“Act”). Marjam is a buildingmaterials distribution company. Defendants Firestone Building Products Company, LLC,
Firestone Diversified Products, LLC, and GenFlex Roofing Systems, LLC (collectively,
“Firestone”) are manufacturers of building-construction materials, including those used for
roofing. Until Firestone ended their relationship in October 2011, Marjam distributed
Firestone’s roofing materials in New York, New Jersey, Pennsylvania, and Delaware.
Marjam accuses Firestone of offering its roofing products to Marjam’s competitors
(“Favored Distributors”)1 at more favorable terms than those offered to Marjam through nonuniform rebate, discount, and financing programs. Op. at 3-4 (Nov. 30, 2012), ECF No. 38. Due
to the disparate terms offered by Firestone, the Favored Distributors could allegedly offer
Firestone’s products to “Major Customers”2 at lower prices than Marjam. Id. Marjam asserts it
lost significant business to the Favored Distributors as a result. Id.
This Court previously granted-in-part and denied-in-part a motion to dismiss the claims
against Firestone. See id. While dismissing much of the complaint, the Court allowed Marjam
The “Favored Distributors” are ABC Supply Company, Inc.; Bradco Supply Corp. (ABC and Bradco
merged in 2011); Allied Building Products Corp.; S&K Distribution, LLC d/b/a New Castle Building
Products (“New Castle”); and J&S Supply Company.
1
The “Major Customers” are All Seasons Commercial Roofing (“All Seasons”); Six G’s Contracting;
Hamada, Inc. (“Hamada”); Kraus Commercial Roofing; United Roofing Systems, Inc.; Roofers
Inc./Tristate Roofers; and Hudecheck Roofing and Siding, Co.
2
1
to proceed on its Section 2(a) and 2(d) claims. Id. at 9. With the Court’s leave, Marjam added
GenFlex as a defendant via amended complaint. See Amend. Compl. ¶¶ 116-132, ECF No. 92.
Presently before the Court is Firestone’s (including GenFlex’s) motion for summary judgment
on Marjam’s remaining claims against it (Counts One, Two, and Four). Firestone Mot. (Jan. 11,
2019), ECF No. 188.
II.
DISCUSSION
A.
Summary Judgment Standard
Summary judgment is appropriate if “there is no genuine issue as to any material fact
and . . . the moving party is entitled to judgment as a matter of law.” FRCP 56. A fact is material
if its determination might affect the outcome of the suit under the applicable substantive law.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248–49 (1986). A dispute is genuine if “a
reasonable jury could return a verdict for the nonmoving party.” Id. To make this determination,
the Court views the facts in the light most favorable to the nonmovant and all reasonable
inferences must be drawn in the nonmovant’s favor. Scott v. Harris, 550 U.S. 372, 378 (2007).
The moving party bears the burden of demonstrating the absence of a genuine dispute of
material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The movant meets this burden
by pointing to an absence of evidence supporting an essential element as to which the nonmoving party will bear the burden of proof at trial. Id. at 325. If the moving party carries this
initial burden, “the nonmoving party must come forward with specific facts showing that there
is a genuine issue for trial.” United States v. Donovan, 661 F.3d 174, 185 (3d Cir. 2011) (citation
omitted).
B.
Firestone’s Motion for Summary Judgment
Firestone’s numerous arguments for summary judgment fit into two broad categories:
(1) Marjam cannot establish the requisite harm to competition and (2) even assuming it could,
inter-brand competition negates any such harm. See generally Firestone Mot. Marjam counters
each argument by citing record evidence. See Marjam Opp., ECF No. 189.
C.
Section 2(a) Claims
Section 2(a) of the Act states:
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 the effect of such
discrimination may be substantially to lessen competition . . . 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: Provided,
That nothing herein contained shall prevent differentials which make only due
allowance for differences in the cost of manufacture, sale, or delivery resulting
from the differing methods or quantities in which such commodities are to such
purchasers sold or delivered.
15 U.S.C. § 13(a). A prima facie Section 2(a) claim requires four elements: “(1) that sales were
made to two different purchasers in interstate commerce; (2) that the product sold was of the
2
same grade and quality; (3) that defendant discriminated in price as between the two purchasers;
and (4) that the discrimination had a prohibited effect on competition.” Feesers, Inc. v. Michael
Foods, Inc., 498 F.3d 206, 212 (3d Cir. 2007). The fourth element includes both a “competitive
injury” (i.e., “a reasonable possibility that the price difference may harm competition”) and an
“antitrust injury” (i.e., “a causal connection between the price discrimination and actual damages
suffered”). Id.; Stelwagon Mfg. Co. v. Tarmac Roofing Sys., Inc., 63 F.3d 1267, 1273 (3d Cir.
1995).
Firestone primarily argues there is no genuine issue of material fact regarding whether
Marjam suffered competitive or antitrust injuries (element four). Firestone also asserts there is
no genuine issue regarding whether the products sold were “of the same grade and quality”
(element two) and whether Firestone actually committed price discrimination (element three).
1.
Competitive Injury
Firestone argues that Marjam cannot establish the fourth element of a Section 2(a)
claim—that the price discrimination had a prohibited effect on competition (i.e., that the plaintiff
suffered a “competitive injury”). Mot. at 8. Given Section 2(a)’s prophylactic purpose, to satisfy
the competitive injury element, plaintiffs need only show “a reasonable possibility that the price
difference may harm competition,” not that it actually harmed competition. Feesers, 498 F.3d
at 212 (brackets and citations omitted). Thus, plaintiffs may establish the competitive injury
indirectly—by demonstrating substantial price discrimination over time (which evidences a
reasonable possibility of harm)—or directly—through evidence of actual displaced sales (i.e.,
actual harm to competition). Id. at 216 (citations omitted). Here, Marjam does both.
a.
Direct Evidence of a Competitive Injury
Direct proof of a competitive injury utilizes “direct evidence of displaced sales.” Id.
(citation omitted); see also Volvo Trucks N. Am., Inc. v. Reeder-Simco GMC, Inc., 546 U.S. 164,
177 (2006) (“A hallmark of the requisite competitive injury . . . is the diversion of sales or profits
from a disfavored purchaser to a favored purchaser.”). Marjam points to two of its employees’
depositions for such evidence: Joel Martin (a Marjam salesman responsible for Firestone
products) and James Metcalf (Marjam’s Product and Marketing Manager). Marjam Opp. at 58.
Martin’s deposition included the following soliloquy:
Q: Why did Marjam lose the business of Hamada?
A: We can only go off the costs that were given and price the customer.
Q: I don’t understand your answer.
A: I don’t understand what you’re asking me for. You know-Q: Are you suggesting that if you met your competitors’ pricing you’d be pricing
below cost?
A: Right. I don’t know what my competitors are giving them. I’m just being told
that I’m high from my customer.
Appx. to Sharon Decl., Ex. G, Martin Dep. at 69-70, ECF No. 189-6 (emphasis added). As to
Metcalf, his deposition included the following:
3
Q: So one of the customers that . . . appear is All Seasons Commercial Roofing?
A: Um-hum, I know them.
Q: Is that one of the customers that was lost?
A: Yes.
Q: Okay. Tell me how it was that that customer was lost.
A: The customer indicated to us that our pricing was not in line. We continued to
offer pricing and we lowered our pricing and lowered our pricing to points where
we would have been out of business if we continued to take the business. We were
able to confirm that he was, in fact, and is, in fact, still buying that material . . .
from New Castle Building Products, also known as S&K Building Products. And
that was a customer that was doing as much as . . . [$]700,000 a year with us at
peaks.
Appx. to Sharon Decl., Ex. H, Metcalf Dep. at 147-149, ECF No. 189-6 (emphasis added); see
also Metcalf Dep. at 108-109; 111-112; 151-157; 164; 198-202; 207-217.
Marjam argues this is sufficient to show a competitive injury, citing Callahan v. A.E.V.,
Inc., 182 F.3d 237, 253 (3d Cir. 1999). Marjam Opp. at 59-62. Firestone counters by arguing
Callahan is distinguishable, and the Court should instead be guided by Stelwagon
Manufacturing Co. v. Tarmac Roofing Systems, 63 F.3d 1267 (3d Cir. 1995). See Reply at 7,
ECF No. 190.
In Callahan, the Third Circuit reversed a district court’s grant of summary judgment on
a beer distributor’s Sherman Act claims. The district court had “concluded that the plaintiffs
had not offered sufficient evidence of fact of damage, i.e., loss and causation in fact.” Reversing,
the Third Circuit held that the plaintiffs’ agents’ testimony “that they knew of customers who
used to purchase [products] from them, but no longer did” was “admissible evidence of lost
business.” Callahan, 182 F.3d at 253. In reaching that holding, the Third Circuit distinguished
Stelwagon: “In that case, the only evidence of actual loss, i.e., that customers stopped purchasing
from the plaintiff, was the employees’ reports that customers had said that they were no longer
buying from the plaintiff because the plaintiff’s competitors had lower prices.” Id. at 252
(discussing Stelwagon, 63 F.3d at 1274). “Statements of a customer as to his reasons for not
dealing with a supplier are admissible for . . . the purpose of proving customer motive, but not
as evidence of the facts recited as furnishing the motives.” Id. (citation and brackets omitted).
Thus, in Stelwagon, the Third Circuit found that the plaintiffs failed to produce evidence of actual
displaced sales. Stelwagon, 63 F.3d at 1274 (reversing district court because hearsay evidence
was inadmissible to prove lost sales). But in Callahan—where the “plaintiffs themselves
testified that they knew of customers who used to purchase beer from them, but no longer did”—
the Third Circuit found sufficient “evidence of the fact of damage.” Callahan, 182 F.3d at 253.
Firestone argues, like in Stelwagon, Marjam failed to present sufficient evidence of
displaced sales. The Court agrees that Martin and Metcalf’s descriptions of customers’ out-ofcourt statements are inadmissible to prove actual diverted sales. See id. at 252; see also FRE
801(c), 802. The statements are, however, admissible to evidence Marjam’s customers’ motives
for switching distributors. See Callahan, 182 F.3d at 252 (accepting hearsay evidence for the
purpose of proving customer motive); see also FRE 803(3).
4
Unfortunately for Firestone, and unlike in Stelwagon, Marjan offers other admissible
evidence of actual diverted sales in the form of an expert report.3 Marjam’s expert, Dr. David
Blackburn, analyzed Marjam’s and the Favored Distributors year-over-year sales of Firestone’s
products to the Major Customers. Blackburn Report ¶ 69, attachment 13a, ECF No. 189-2. As
Blackburn’s graph below depicts, while Marjam’s sales to the Major Customers generally
decreased from 2009-2011, the Favored Distributors’ sales to the same customers increased:
Id. attachment 13b.
Thus, Marjam presents evidence of (1) the fact that the Major Customers purchased more
Firestone products from the Favored Distributors—and not from Marjam—from 2009-2011, see
id.; Appx. to Sharon Decl., Ex. 7, ECF No. 189-13, and (2) the Major Customer’s motivation for
buying from a Favored Distributor instead of Marjam: price, Marjam Opp. Ex. 9 (email from
Hamada employee noting “price has become paramount”); Martin Dep. at 69-70 (explaining that
Marjam’s price was “high for [the] customer.”); Metcalf Dep. at 147-149 (explaining All
Seasons told Marjam it purchased from a Competitor because Marjam’s “pricing was not in
line”); Appx. to Sharon Decl., Ex. 7 (email noting Marjam lost “virtually all” of its 2011
Firestone sales “on price”). Taken together, this evidence raises a triable issue as to whether
Marjam suffered a competitive injury. See Volvo, 546 U.S. at 177 (“A hallmark of the requisite
3
While the plaintiffs in Stelwagon submitted expert evidence of actual loss as well, it was ruled
inadmissible due to multiple deficiencies. See Callahan, 182 F.3d at 254-259 (discussing Stelwagon).
Like in Callahan, those deficiencies are not present in this case. And also like in Callahan, Firestone
never moved to exclude Marjam’s expert’s report. See id.
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competitive injury . . . is the diversion of sales or profits from a disfavored purchaser to a favored
purchaser.”).
b.
Indirect Evidence of a Competitive Injury
Marjam also sets forth indirect evidence of a competitive injury. Pursuant to the “Morton
Salt Inference,” plaintiffs may establish the presumption of an injury to competition “by proof
of a substantial price discrimination between competing purchasers over time. In the absence
of direct evidence of displaced sales, this inference may be overcome by evidence breaking the
causal connection between a price differential and lost sales or profits.” Falls City Indus., Inc.
v. Vanco Beverage, Inc., 460 U.S. 428, 435 (1983) (emphasis added) (citing FTC v. Morton Salt
Co., 334 U.S. 37, 46 (1948)).
As a threshold matter, provision of inequitable rebates (or other terms of sale) is
materially equivalent to “price discrimination,” and thus can trigger the Mortan Salt Inference.
See Lewis v. Philip Morris Inc., 355 F.3d 515, 534 (6th Cir. 2004) (“In addition to ‘direct’ price
discrimination, courts have held that § 2(a) also extends to ‘indirect’ price discrimination, where
identical price structures are made disparate through, for example, the granting of rebates, the
payment of shipping costs, or the provision of free goods.”); see also Metcalf Dep. at 157
(explaining benefit of extended financing offered by Firestone to the Favored Distributors).
Therefore, the Court rejects any argument that Firestone did not discriminate merely because it
charged the same price up front. Whether such discrimination occurred “substantial[ly] . . . over
time” is a separate question. See Rose Confections, Inc. v. Ambrosia Chocolate Co., 816 F.2d
381, 387 (8th Cir. 1987) (finding two years of free chocolate chip delivery sufficient).
Marjam presents evidence of price discrimination from 2009-2011 in the form of
inequitable rebates and terms of sale offered to the Favored Distributors and not Marjam. For
example, Marjam’s evidences that:
• In 2009-2010, Firestone provided rebates to the Favored Distributors with
proportionally lower “gates” (i.e., threshold sales volumes before rebates were
paid) than those offered Marjam. See Blackburn Rep. ¶¶ 29-42. In some instances,
the Favored Distributors had no threshold sales volume before rebates kicked in,
while Marjam always had rebate gates. See id.
• In 2009-2010, Firestone offered the Favored Distributors higher rebates than those
offered to Marjam. See Sharon Decl., Exs. 13-34. In some instances, the rebates
offered were more than double those offered Marjam. See id.
• In 2009-2011, Firestone offered extended payment and financing terms to some
Favored Distributors, but not to Marjam. See id., Exs. 56-58.
• In 2010-2011, Firestone gave some Favored Distributors special rebates and
discounts that were never offered to Marjam. See id., Exs. 11-12, 54; Blackburn
Rep. ¶¶ 40-41.
• In 2011, Firestone offered the Favored Distributors rebate programs, but offered
no program to Marjam. See Sharon Decl., Exs. 13-34, 45; Metcalf Dep. 86.
• Throughout their relationship, Firestone provided rebates to Marjam on an annual
basis, but paid some Favored Distributors on a quarterly basis, which is preferable
for distributors. See Appx. to Sharon Decl., Ex. E, Hausz Dep. at 102-05; Sharon
6
Decl., Ex. 36.
• Throughout their relationship, Firestone negotiated with the Favored Distributors
regarding their rebate programs, but refused to negotiate with Marjam. See Sharon
Decl., Exs. 35-36, 41-44; Hausz Dep. at 163-66.
This is adequate evidence of “substantial” price discrimination “over time” to trigger the Mortan
Salt Inference. See Rose Confections, Inc., 816 F.2d at 387 (two years of free delivery adequate);
compare J.F. Feeser, Inc. v. Serv-A-Portion, Inc., 909 F.2d 1524, 1538 (3d Cir. 1990) (holding
Mortan Salt Inference most likely triggered when price discrimination influenced resale prices
in a low margin market) with Blackburn Rep. ¶ 48 (describing effect of discrimination on resale
pricing given low-margin, competitive market).
Firestone argues it can rebut the Morton Salt Inference because it has evidence that
conduct besides the alleged price discrimination caused Marjam’s losses. Firestone Mot. at 1621. While the Morton Salt Inference “may be overcome by evidence breaking the causal
connection between a price differential and lost sales or profits,” Falls City Indus., Inc., 460 U.S.
at 435, here, Marjam presents affirmative causation evidence. See supra Part II.C.1.a (describing
testimony of Major Customers’ motivations for switching distributors). As Marjam is the nonmoving party, the Court must view this competing evidence in Marjam’s favor. See Scott, 550
U.S. at 378. Therefore, even assuming Firestone has causation-breaking evidence, the Court
will not grant its motion for summary judgment. See FRCP 56.
2.
Antitrust Injury
Firestone alternatively argues there is no genuine issue of material fact as to whether
Marjam suffered an “antitrust injury,” and therefore it is entitled to summary judgment.
To recover damages on a Section 2(a) claim, plaintiffs must prove they suffered an
“antitrust injury.” Stelwagon, 63 F.3d at 1273. Antitrust injuries have three elements: (1) an
injury-in-fact; (2) that has been caused by the Act’s violation; and (3) that is the type of injury
contemplated by the Act. Brunswick Corp. v. Pueblo Bowl-O-Mat, 429 U.S. 477, 489 (1977).
a.
Injury-in-Fact and Causation
While listed as separate elements, both the courts and the parties here address the injuryin-fact and causation elements together. Both those elements are satisfied by “proof of some
damage flowing from” the Act’s violation. Rossi v. Standard Roofing, Inc., 156 F.3d 452, 483
(3d Cir. 1998). “[I]inquiry beyond this minimum point goes only to the amount and not the fact
of damages. It is enough that the illegality is shown to be a material cause of the injury; a plaintiff
need not exhaust all possible alternative sources of injury in fulfilling his burden of proving
compensable injury.” Id.
Marjam presents sufficient evidence connecting Firestone’s discriminatory conduct to
Marjam’s lost profits (i.e., the injury) to raise a genuine issue of material fact. As previously
noted, Marjam presents evidence that (1) it lost customers from 2009-2011 and (2) those
customers migrated to the Favored Distributors because of Marjam’s unfavorable prices. See
supra Part II.C.1.a. Marjam also presents evidence that (3) due to those lost customers, it lost
significant profits (i.e., suffered an injury). Blackburn Report ¶¶ 67-70 (describing $1.1 million
7
as lower bound of lost profit).4 Therefore, so long as Marjam can link its unfavorable prices to
Firestone’s price discrimination, summary judgment should be denied. Rossi, 156 F.3d at 483
(only requiring illegality to be “a material cause” of the injury (emphasis added)).
Here, Marjam sufficiently demonstrates a link between Firestone’s price discrimination
and Marjam’s ability to compete to raise a triable issue of material fact. The connection between
a distributor’s purchase and sale price may be so obvious that no evidence is required. See Scott,
550 U.S. at 378 (requiring courts to draw all reasonable inferences in the nonmovant’s favor).
However, Marjam points to ample record evidence. For example:
• Firestone’s own Mid-Atlantic Regional Business Manager testified that he knew of
distributors factoring rebates into their pricing. See Appx. to Sharon Decl., Ex. I, Pribble
Dep. at 108.
• One of Firestone’s manufacturing representatives (through which it sells to distributors)
suggested adding a rebate to certain products because “Firestone is truly out in left field
regarding market pricing” and, as a result, the distributors were selling more of
Firestone’s competitors’ products. See Sharon Decl., Ex. 61.
• One of the Favored Distributors’ agents testified that rebates affect their prices, and even
said the rebates could be factored into a specific job’s pricing. Appx. to Sharon Decl.,
Ex. F, Kubica Dep. at 81.
• Marjam’s expert explained that due to the low-margin nature of the business and lower
post-rebate prices offered to the Favored Distributors, “Marjam was at a consistent
disadvantage.” Blackburn Rep. ¶¶ 48-49.
Accordingly, Marjam presents evidence that (1) Firestone’s discrimination caused
Marjam’s inability to compete on price; (2) that inability caused the Major Customers to
purchase from the Favored Distributors instead of Marjam; and (3) due to the major customers
Migration, Marjam lost profits. Therefore, at least at the summary judgment stage, Marjam has
met its burden of “proof of some damage flowing from” the Act’s violation. Rossi, 156 F.3d at
483.
b.
Type of Injury Contemplated by the Statute
In addition to the first two elements, Firestone argues there is no genuine issue of material
fact as to the third element of an antitrust injury: that plaintiffs’ injury was of the type
“contemplated by the statute.” Brunswick Corp., 429 U.S. at 489. Firestone asserts:
Firestone quibbles with Blackburn’s methodologies, including his failure to address alternative causes
of lost profits. However, like in Callahan, Firestone never moved to exclude Blackburn’s testimony.
182 F.3d at 254. And, like in Callahan, Blackburn provides sufficient evidence of causation to raise a
triable issue of material fact. Id. at 259 (“[B]efore us is only the question whether the defendants’
unlawful actions caused the plaintiffs’ losses,” and not “whether a plaintiff has brought forth sufficient
evidence to justify [any] actual damages awarded.”). Firestone can certainly argue to the jury that
Blackburn’s calculations are inaccurate, but Blackburn’s report, “in conjunction with the customer
evidence discussed above, constitutes sufficient evidence of causation.” Id. at 260 (emphasis in original).
4
8
Marjam fails to present evidence of competitive injury. It follows, then, that
Marjam cannot support a claim that its injuries are the type of injury contemplated
by the Act, as required to prove antitrust injury. The lack of evidence of substantial
loss of sales and customers to allegedly favored purchasers—and the lack of a
causal connection between such losses and any alleged conduct by Firestone—is
a powerful indication that price discrimination did not harm competition.
Firestone Mot. at 27-28 (citations omitted).
Firestone’s argument is deficient for multiple reasons. First, it impermissibly folds the
third element of an antitrust injury into the first two. Firestone simply summarizes its previous
arguments, then claims this is “powerful evidence” that the third element is lacking. See id. The
authorities cited for that proposition make no similar leap, and in fact, focus on the other elements
of an antitrust injury. See Truett Payne Co. v. Chrysler Motors Corp., 451 U.S. 557, 561-62
(1981) (discussing injury-in-fact); H.L. Hayden Co. v. Siemens Med. Sys., Inc., 879 F.2d 1005,
1022 (2d Cir. 1989) (discussing causation); Interstate Cigar Co. Inc. v. Sterling Drug Inc., 655
F.2d 29, 31 (2d Cir. 1981) (discussing injury-in-fact). Second, even if the Court were inclined
to agree with Firestone’s statement of the law, the factual predicates are incorrect. Marjam does
present evidence of an injury-in-fact, a competitive injury, and causation. See Blackburn Report
¶¶ 67-70 (describing lost profit); supra Part II.C.1 (finding a competitive injury), II.C.2.a
(finding causation). Therefore, a triable issue of material fact remains on whether Marjam
suffered an antitrust injury.
3.
“Same Grade and Quality” and “Discriminated in Price”
Intermixed with Firestone’s primary arguments, Firestone asserts it did not actually
discriminate in price, in part because Blackburn’s analysis did not compare the prices of
Firestone’s products “of the same grade or quality,” as required by the Act. See Firestone Mot.
at 5, 7, 13-15.
Neither point is persuasive. The Court already rejected the argument that inequitable
rebate or terms of sale offerings are not price discrimination. See supra Part II.C.1.b. The Court
also noted the existing evidence of price discrimination was enough to raise a triable issue of
fact. See id.
As to the “same grade or quality,” Firestone’s argument misses the mark. Marjam’s
claims incorporate all Firestone roofing products. Their contention is that when a Major
Customer needed, for example, ten units of Firestone’s .045 Low Slope FR (“.045FR”), the
customer planned to purchase that exact product from one of the distributors. Due to Firestone’s
inequitable rebate program, the effective price for Marjam to purchase the .045FR was higher
than the Favored Distributors’ price. As the Favored Distributors could pass their rebate on to
the customer through lower prices, the Major Customers purchased the .045FR from the Favored
Distributors instead of Marjam. Thus, Marjam’s claims make the “apples-to-apples”
comparisons required by the Act. See Feesers, 498 F.3d at 212.5
5
Even if Firestone carries multiple grades of .045FR, the customer would order the same grade (i.e., the
9
For these reasons, Firestone’s motion for summary judgment on Marjam’s Section 2(a)
claims (Counts One and Two) is DENIED.
D.
Section 2(d) Claim
Firestone also moves for summary judgment on Marjam’s Section 2(d) claim (Count
Four). Firestone argues (1) that the Section 2(d) claim should be dismissed for the same reasons
as the Section 2(a) claims and (2) in any event, the claim “does not fall within the realm of
Section 2(d).” Firestone Mot. at 30.
Firestone’s first argument is unpersuasive. As discussed above, there is a genuine issue
of material fact as to each element of Marjam’s Section 2(a) claims. See supra Part II.C. As to
Firestone’s second argument, in deciding Firestone’s motion to dismiss, the Court held:
Marjam alleges the following: that Firestone sold identical products to Marjam at
higher prices than it did to Marjam’s direct competitors; that Firestone offered
promotional allowances and rebates to Marjam’s direct competitors which it did
not offer to Marjam; that as a result of Firestone’s behavior, Marjam became
unable to compete with its direct competitors in sales of Firestone Products to third
parties; and that ultimately, Firestone’s actions have decreased the competition for
sales of Firestone Products in certain geographic markets. On these facts, the
Court finds that Marjam has sufficiently alleged its § [2](a) and § [2](d) claims
against Firestone.
Op. at 4 (Nov. 30, 2012). In response to Firestone’s current motion, Marjam has presented
sufficient evidence to raise a triable issue on each of the above-described allegations. Therefore,
for the same reasons the Court denied Firestone’s motion to dismiss, Firestone’s motion for
summary judgment on Marjam’s Section 2(d) claim (Count Four) is DENIED.
E.
Inter-Brand Competition
Firestone separately urges the court to grant summary judgment on Marjam’s Sections
2(a) and 2(d) claims because inter-brand competition between Firestone and other roofingproduct manufacturers precludes a finding of the requisite “injury to completion.” Firestone
Mot. at 32. Firestone argues that “[s]o long as other manufacturers compete with Firestone—
which they do—and Marjam had access to the competing products—which it did—vibrant
interbrand competition will act as a check on any intrabrand advantage that the favored
purchasers allegedly received.” Firestone Mot. at 32-33 (citing Gorlick Distribution Centers,
LLC v. Car Sound Exhaust Sys., Inc., 723 F.3d 1019 (9th Cir. 2013)).
Firestone’s argument is unpersuasive, even assuming inter-brand competition can
completely negate intra-brand competitive injuries. Cf. Bedford Nissan, Inc. v. Nissan North
America, Inc., No. 16-cv-423, 2016 WL 6395799, at *3-5 (describing the Act’s applicability to
intra-brand competitive injuries, especially in secondary-line cases). First, Marjam evidences
that Firestone threatened to revoke Marjam’s distributorship if it carried another manufacturer’s
products. Metcalf Dep. 127-130. Therefore, Firestone’s conduct did injure inter-brand
same item) from one of the competing distributors.
10
competition. Second, some Major Customers exclusively used Firestone-branded roofing
products. See id. at 112, 149. Therefore, Marjam could not swap manufacturers and continue
to compete for those customers’ business, producing a drop in intra-brand competition with no
inter-brand offset. Therefore, a triable issue exists regarding whether Firestone’s conduct
adequately injured competition. See Bedford Nissan, Inc., 2016 WL 6395799, at *5 (denying
dismissal where Nissan discriminated between Nissan dealerships, which competed both with
each other and with other manufacturers’ dealerships). Firestone may convince the jury that no
harm to competition occurred, but given the existing evidence, summary judgment is DENIED.
III.
CONCLUSION
For the reasons set forth above, Defendants Firestone Building Products Company,
LLC’s, Firestone Diversified Products, LLC’s, and GenFlex Roofing Systems, LLC’s collective
motion for summary judgment, ECF No. 188, is DENIED.
Date: April 1, 2019
/S/ William J. Martini
WILLIAM J. MARTINI, U.S.D.J.
11
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