
USCA1 Opinion

	




                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                                 ____________________        No. 93-1704              R. W. INTERNATIONAL CORP. AND T. H. WARD DE LA CRUZ, INC.,                               Plaintiffs, Appellants,                                          v.                              WELCH FOOD, INC., ET AL.,                                Defendants, Appellees.                                 ____________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                           FOR THE DISTRICT OF PUERTO RICO                   [Hon. Gilberto Gierbolini, U.S. District Judge]                                              ___________________                                 ____________________                                        Before                                 Breyer, Chief Judge,                                         ___________                            Coffin, Senior Circuit Judge,                                    ____________________                              and Boudin, Circuit Judge.                                          _____________                                 ____________________            Jose A. Hernandez  Mayoral with whom  Rafael Hernandez Mayoral was            __________________________            ________________________        on brief for appellants.            Jaime  E. Toro-Monserrate  with whom  Samuel T.  Cespedes  and Ana            _________________________             ___________________      ___        Matilde Nin were on brief for Welch Food, Inc.        ___________            Jorge I.  Peirats with whom  Jacabed Rodriguez Coss  was on  brief            _________________            ______________________        for Magna Trading Corp.                                 ____________________                                   January 20, 1994                                 ____________________               COFFIN, Senior  Circuit Judge.   The parties in  this action                       _____________________          attempted to negotiate a long-term distribution relationship, but          after a  year of  haggling, defendant  Welch Foods, Inc.  (Welch)          notified plaintiffs R.W. International Corp. (R.W.) and T.H. Ward          de  la  Cruz,  Inc.,1  that  it was  calling  off  the  corporate          marriage  because  of  irreconcilable  differences.    Plaintiffs          claimed that  the dissolution  of the  relationship violated  the          Puerto Rico Dealers' Contracts Act, P.R. Laws Ann. tit. 10,   278          (Law 75), and federal and  state antitrust laws.  Plaintiffs also          alleged  a  claim  of   tortious  interference  with  contractual          relations against defendant  Magna Trading  Corp., supervisor  of          Welch's operations in Puerto Rico.               The district  court concluded that  the association  between          the parties had not yet  matured into a relationship protected by          Law   75,  and  it  consequently  granted  summary  judgment  for          defendants on the Dealers' Act and tort claims.  It dismissed the          antitrust claims on the ground that plaintiffs had failed to make          the required showing of injury to competition.  Our review of the          caselaw  and circumstances persuades  us that only  the antitrust          claims properly were dismissed.  We therefore reverse the summary          judgment on the other causes of action.                                        ____________________               1  These  two  related corporations  are  both  in  the food          distribution business.  According to answers to  interrogatories,          R.W.  does marketing for mainland corporations and accounting for          De la Cruz, Inc..   De la Cruz, in turn, distributes but does not          purchase  products from producers.  It makes purchases from Impex          Trading, another related  company.  See District Court opinion at                                              ___          5 n.2.  For convenience, we  refer to these companies jointly  as          either "plaintiffs" or "R.W.".                                         -2-                                I. Factual Background                                   __________________                    The  facts  underlying  this  dispute  essentially  are          undisputed, with the parties differing only with respect to their          legal significance.  Our review  of the district court's grant of          summary judgment is  plenary.   Cambridge Plating  Co. v.  Napco,                                          ______________________     ______          Inc., 991 F.2d 21, 24 (1st Cir. 1993).          ____               Welch, a producer of fruit  juices and related products, has          sold its products through local distributors in Puerto Rico since          the  1930s.   In 1987,  Welch needed  a new  distributor for  its          frozen concentrate  line of products,  and, with the help  of its          local  broker,  Magna Trading,  it  identified R.W.  as  the most          suitable -- though not perfect -- candidate.               From  the beginning  of Welch's  interest  in R.W.,  company          executives had concerns about R.W.'s handling a competing line of          juice   products  under  the   "Donald  Duck"  label.     Welch's          international   marketing   manager   initially   had   suggested          internally that R.W. would  have to drop the Donald Duck line "to          be a viable option," see App. at 213, but he later  reported that                               ___          R.W.'s  owner, Thomas  Ward,  had  agreed  to  undertake  several          measures  to  assure  that the  Welch  frozen  concentrates would          receive full support despite the continued presence of the Donald          Duck  products.    These  included  "[a]  trial  period  with  no          commitment by  Welch's for  a larger  period of  representation,"          App.   at  219,  and  a  financial  contribution  from  R.W.  for          advertising Welch's product.                                         -3-               Discussion  among the parties  took place through  the early          months of 1988 and, on March 25, Welch's  international marketing          manager wrote to Ward to announce his company's decision:                    . . .  I am pleased to inform you that Welch's has               reached a decision to  continue the frozen  concentrate               distribution  and  sales  business  begun  by   Ventura               Rodriguez in Puerto Rico by transferring our account to               R.W. International.                    Confirming  our  conversation on  Monday,  Welch's               will  proceed to  draft an  agreement  calling for  the               appointment  of R.W. International in Puerto Rico for a               one-year trial period . . . .             App. at 364.   Four days later,  on March 29, Welch  notified its          customers that it had               made the decision to appoint R.W. International and its               distributing affiliate T.H. Ward de la Cruz Inc. as its               distributors in Puerto Rico  for Welch's frozen product               line.  This change will go  into effect as of this date               and a written agreement is expected to be arrived at in               the near future.          App. at 366 (translation in appendix to appellant's brief).                The   parties  immediately   began  doing   business,  with          plaintiffs regularly  submitting purchase  orders and  defendants          delivering the merchandise  and billing plaintiffs.   It was  not          until  three months  later,  however, in  late  June, that  Welch          submitted  a proposed contract to plaintiffs.   Ward responded in          August  with a  counterproposal.   Of particular  concern  to the          Puerto  Rico  company  were  provisions  in  the  agreement  that          appeared to  reflect an effort by  Welch to bypass  Act 75, which          subjects  companies  to  substantial damages  if  they  terminate          dealership  contracts for  other than  "just  cause."   The Welch          document,  for example, characterized  the relationship with R.W.                                         -4-          as a  transfer of  the contractual  arrangement that  had existed          between Welch  and its prior  distributors before the  passage of          Act 75.   Welch's draft also  specified that New  York law  would          govern the agreement.  R.W.'s revised draft,  inter alia, deleted                                                        _____ ____          the "transfer"  language and specified that Puerto Rico law would          apply.               In  mid-October, after  a series of  telephone conversations          between attorneys, Welch submitted a  third proposed draft of the          agreement, which reinstated all of  the language that had been of          primary concern  to R.W.  During a visit  to Puerto Rico in early          December and in subsequent correspondence, Welch's  international          marketing  manager  encouraged  Ward  to  complete  the  contract          negotiations "as  soon as possible."   On January 30,  1989, Ward          responded by letter stating that he, too, was anxious to finalize          the agreement, but  that there were a few items "that your lawyer          insists  on and that we feel are not  in the best interest of our          future relationship."   In  response to  an inquiry  about R.W.'s          investing $50,000 in a promotional campaign, Ward noted that  the          commitment  was not yet  ripe because he had  agreed to make this          expenditure "once we as a company[] held a working agreement with          Welch's."  A follow-up  letter sent by Ward on February  8 to the          president  of  Magna  Trading   reiterated  concerns  about   the          "transfer" concept as a means of "avoid[ing] Law 75 constraints."               At this point, the applicability of Law 75 remained the only          significant  point   of  contractual  disagreement   between  the                                         -5-          parties.   They  had resolved  earlier conflicts  as to  which of          Ward's entities would be named specifically in the contract (only          R.W.), and whether  R.W. would have an  exclusive distributorship          during the one-year trial period (no).               The  companies had been continuing to do business throughout          the negotiation period.  Late in  1988, the relationship appeared          to  be working  well; Magna  Trading's  president, Roberto  Giro,          wrote to Ward in early  December to commend him for exceeding  by          11 percent  the goal on  a special product  promotion.  Early  in          1989, however, Giro  began to express concern  about R.W.'s side-          by-side  handling of  the Welch  and  Donald Duck  products.   On          January  20, he  wrote to  Welch's  marketing manager  indicating          discomfort with Ward's  involvement in a new line  of Donald Duck          grape  juice products.   This  concern escalated, and  Giro wrote          again on March 22 suggesting that R.W. was not giving priority to          Welch products as it had promised to do.               On  March 30,  1989, Welch's  international vice  president,          William Hewins, informed Ward in a letter of Welch's decision "to          discontinue  the existing  pre-trial  relationship  .  .  .  and,          therefore,  putting an end to the  one-year trial or probationary          relationship  for our frozen  concentrate products."   The letter          continued:               As you know, the idea of working together on a one-year               trial  basis  was,  as  per  your  recommendations,  to               determine  if  Welch's  frozen  concentrates  could  be               handled to our satisfaction in spite of your handling a               competitive product.  The pre-trial relationship proved               to   us  that  the   conflicts  of  interest   of  your               representing both  competing lines are  significant and               irreconcilable. . . . An increased level of conflict in                                         -6-               personal   relations  between   our  broker   and  R.W.               International has also been noted, tracing to conflicts               between the brands represented by  the two firms. . . .               Instead  of  complementing  one  another,  as  was your               original  premise, these  brands represent  conflicting               interests for you and us. . . .          Because  Welch  terminated  the relationship  before  the parties          reached  an agreement  in  writing,  the  one-year  trial  period          envisioned at the outset of their dealings never even commenced.               Plaintiffs  filed this action in  April 1989.  Their amended          complaint   alleges  that   Welch  terminated   their  dealership          agreement without just  cause in violation of Law  75; that Magna          Trading tortiously interfered with their contractual relationship          with  Welch; and  that  defendants  violated  antitrust  laws  by          threatening,  and then  later  actually terminating,  plaintiffs'          dealership if  R.W. did not  agree to drop Donald  Duck products,          and  by seeking  to  monopolize the  bottled  grape juice  market          through  a price-cutting  war.   The case  was dismissed  once on          improper  procedural grounds,  see  R.W. International  Corp.  v.                                         ___  _________________________          Welch Foods,  Inc., 937 F.2d  11 (1st Cir. 1991),  and, following          __________________          remand,  dismissed  again  on  defendants'  motions  for  summary          judgment.               In this appeal, plaintiffs maintain that all of their claims          are viable.   They argue  that, contrary to the  district court's          ruling,  precedent on  Law 75 establishes  that the  statute does                                                                       ____          govern  the business  relationship within  which  R.W. and  Welch          operated  for a  year.   They assert  that this  arrangement also          provides  a basis for  their tortious interference  claim against          Magna.   In  addition,  plaintiffs  argue  that  their  antitrust                                         -7-          allegations  were  sufficient  to withstand  defendants'  summary          judgment motion  and that, if  their showing were  deficient, the          court  erred  in  dismissing the  claims  without  first allowing          discovery.                             II. Applicability of Law 75                                 _______________________               Law  75  provides  that,   notwithstanding  any  contractual          provision  to  the  contrary,  the  supplier  in  a  distribution          contract may terminate a dealership  only for "just cause."  P.R.          Laws Ann. tit. 10,   278a.2   The statute was intended to protect          Puerto  Rico  dealers  from  the  harm  caused  when  a  supplier          arbitrarily  terminates  a distributorship  once  the  dealer has          created a  favorable market  for the  supplier's products,  "thus          frustrating the  legitimate expectations and  interests of  those          who  so efficiently carried out their responsibilities," Medina &                                                                   ________          Medina v. Country  Pride Foods, Ltd., 858 F.2d 817, 820 (1st Cir.          ______    __________________________          1988) (reproducing  in full  translation of  Puerto Rico  Supreme          Court's response to certified question,  122 P.R. Dec. 172 (1988)          (citing  legislative reports)).   The Act  has been  described as          "very much  a `one-way street'  designed to protect  dealers from          the unwarranted  acts of  termination by  suppliers," Nike  Int'l                                                                ___________                                        ____________________               2 The provision states in full:                    Notwithstanding  the   existence  in   a  dealer's               contract  of  a  clause reserving  to  the  parties the               unilateral    right   to    terminate   the    existing               relationship, no principal  or grantor may  directly or               indirectly   perform  any   act   detrimental  to   the               established  relationship  or  refuse   to  renew  said               contract on  its  normal expiration,  except  for  just               cause.                                         -8-          Ltd. v.  Athletic Sales,  Inc., 689 F.  Supp. 1235,  1237 (D.P.R.          ____     _____________________          1988).               For  purposes of its summary  judgment motion, Welch did not          dispute   that  R.W.  and  its  affiliates  were  performing  the          functions of  a distributor within  the meaning of Law  75 during          the twelve months the parties  were doing business, see P.R. Laws                                                              ___          Ann. tit.  10,    278(a).3   Welch's position  was, and is,  that          these operations occurred during a kind of "twilight zone" period          while the parties attempted to  negotiate in good faith the terms          that  would  govern  their  actual  relationship.    Because  the          negotiations failed, the relationship never materialized, and so,          in Welch's view, Law 75 never was implicated.               The district  court accepted this  argument, concluding that          Law  75 was  not  meant  to  apply to  a  period  of  preliminary          negotiations preceding  a completed  working agreement between  a          supplier  and  distributor.     The  court  noted   that  keeping          operations in  abeyance during  a good-faith  negotiating process          "would  allow distributors  to sit and  wait while  the principal          loses its  market -- obtaining,  literally without any  effort, a          stronger  bargaining position every day it  waits."  Applying Law          75 to dealings  during that period,  however, "would curtail  the          autonomy  required   for  arms-length  negotiations."     Neither                                        ____________________               3 This  provision defines a  "dealer" as a  "person actually          interested  in  a   dealer's  contract  because  of   his  having          effectively  in his  charge  in  Puerto  Rico  the  distribution,          agency,  concession or representation  of a given  merchandise or          service."                                         -9-          approach  would serve  the statute's  purpose  of "improving  and          permitting a system of free competition."               Plaintiffs' challenge to  this judgment is  straightforward.          Law 75 makes no distinctions  among distributorship arrangements,          they  assert,  be  they  described  as   pre-trial,  preliminary,          temporary or  tentative.  The  only relevant point of  inquiry is          whether R.W. and its affiliates were performing as a dealer under          the  statute; if so,  Law 75 governs.   R.W.  thus contends that,          because Welch concedes  dealer status, its decision  to terminate          the relationship must be judged  under the statute's "just cause"          test.               We  are persuaded that  plaintiffs' position is  the correct          one.  Their most compelling  support is provided by the statutory          language, which defines a  "dealer's contract" subject to Law  75          as:  [a]  relationship established  between a  dealer  and a               principal or grantor whereby and irrespectively  of the                                            __________________________               manner in which  the parties may call,  characterize or               _______________________________________________________               execute  such  relationship,  the  former actually  and               ___________________________               effectively  takes  charge  of the  distribution  of  a               merchandise,  or  of  the rendering  of  a  service, by               concession or franchise, on the market of Puerto Rico.          P.R. Laws Ann. tit. 10,    278(b) (emphasis added).  The  statute          clearly incorporates within  its reach any arrangement  between a                                                 ___          supplier  and dealer  in  which  the dealer  is  actually in  the          process  of  distributing  the supplier's  merchandise  in Puerto          Rico.  The statute does  not apply to suppliers' simple  sales to          Puerto Rican wholesalers.   It  insists upon  establishment of  a          "supplier/dealer" relationship.   But once  that relationship  is          established,  the statute applies  irrespective of the  length of                                         -10-          time such an arrangement has been in existence, and it explicitly          rejects any efforts by the parties to foreclose  coverage through          semantic niceties.  Welch's concession  that R.W. was acting as a          dealer (for purposes of summary judgment) thus seems dispositive.               Welch, however, asserts that the  statute is not meant to be          as  inclusive  as its  language suggests,  and it  offers several          reasons to support this position.  In our view, each falters upon          close scrutiny.               First,  Welch  claims  that the  word  "established"  in the          provision indicates  that Law  75 applies  only once  the parties          have achieved a certain level of stability.  The  parties in this          case may have  been working with each other,  Welch observes, but          their  failure to reach  agreement on essential  terms meant that          their  relationship was never "established" within the meaning of          Law 75.  In support of  this argument, Welch cites language  from          cases describing the Law 75 relationship as "characterized by its          continuity, stability,  mutual trust,  coordination between  both          parties as independent  entrepreneurs," J. Soler Motors,  Inc. v.                                                  ______________________          Kayser Jeep Int'l Corp., 108  P.R. Dec. 134, 145 (1978) (Official          _______________________          Translation);  see also Roberco, Inc. v. Oxford Industries, Inc.,                         ___ ____ _____________    _______________________          122 P.R.  Dec. 117  (1988), Official  Translation of the  Supreme          Court  of Puerto Rico,  slip op. at  5 (June 30,  1988); Medina &                                                                   ________          Medina, 858 F.2d at 822.          ______               We  cannot agree that a relationship is "established" within          the meaning  of Law  75  only after  a supplier  and dealer  have                                        _____          reached the point at which  their relationship might be described                                         -11-          as "stable" or "continuous."  Although the statute was enacted to          protect  from  abrupt  and arbitrary  termination  dealers  whose          longstanding  representation  had provided  substantial  economic          benefit  to  the  manufacturer,  the  law  is drafted  to  govern          relationships from  their inception to ensure that they will both          become and  remain stable and  continuous.  See Medina  & Medina,                                                      ___ ________________          858   F.2d  at  820  (Act  75  levels  bargaining  power  between          manufacturer  and dealer "[i]n order to achieve reasonably stable          dealership  relationships   in  Puerto  Rico").     Although  the          precedent  cited  by  Welch describes  the  type  of longstanding          commercial  partnership that gave rise to  Law 75, we do not read          the  cases  to  exclude fledgling  relationships  from  the act's          coverage.  A well-established dealer may have more to lose -- and          may have  provided more benefit to the  supplier -- than a dealer          with less tenure,  but the statute  makes no distinction  between          them.                    Nor can it be said that a relationship is established within          the  meaning  of  Law 75  only  if  it is  committed  to writing.          Indeed,  Welch's counsel  acknowledged at  oral  argument that  a          relationship subject to the statute may be established  through a          course  of dealing,  but argued  that this  was not  such a  case          because  the parties  continued to  disagree  over the  essential          terms of their affiliation throughout their entire collaboration.          In other words,  Welch contends  that this  relationship was  not          established because its terms still were being negotiated.                                         -12-               While it is  true that the parties  had yet to agree  on the          dimensions  of their future  relationship, the fact  remains that          they were operating  as business partners under some  terms for a                                                          ____          full   year.     Plaintiffs  sent   purchase   orders  to   Welch          approximately once a week between  March 1988 and March 1989, and          Ward's  companies were  actively  involved in  distributing Welch          products throughout that  time.  As noted above,  Ward received a          commendation from Magna  Trading's president for its  effort in a          successful  special  promotion.   To  be  sure,  the relationship          envisioned by  the parties when  they began to do  business never          materialized;  the relationship protected by Law 75, however, was          the one that actually existed.               Welch's  second  argument,  that applying  Law  75  during a          period  of   preliminary  negotiations  improperly   burdens  the          parties' liberty to contract, is the one the district court found          particularly  convincing.  When parties freely have agreed that a          trial  period   will  precede  establishment  of   the  long-term          relationship Law 75 is intended to protect, the company  asserts,          invoking  the  Act  before  conclusion of  the  trial  period  is          tantamount to coercing the parties into a contract neither agreed          to enter.   This is  particularly harmful to the  supplier, Welch          maintains, because Law 75 is  designed to empower dealers.  Thus,          a supplier who is not  allowed to step away from  an unsuccessful          attempted  relationship  would  be   forced  into  accepting  the          dealer's  terms and conditions,  with the consequent  loss of its          financial and legal autonomy.                                         -13-               We detect several problems with this argument.  In the first          place, as we have noted, the parties in this case were not simply          negotiating  a relationship  to  be  activated  sometime  in  the          future.  R.W.  had been serving as Welch's Puerto Rico dealer for          twelve months.   While we  would have no difficulty  in accepting          that a supplier could break  off negotiations, no matter how long          they had been going on, the issue before us is whether  Welch can          terminate  an   actual  dealership   relationship  that   existed          contemporaneously with the negotiations.  Welch wants to insulate          those dealings  from Law 75 because  they were part of  a longer-          term  plan.    The  statute,  however,  plainly  states that  the          characterization of a relationship (e.g., calling it temporary or          preliminary) does  not affect its  status under  Law 75.   If the          parties are dealing, a dealership exists for purposes of the Act.               This  bright line makes  sense.  Otherwise,  suppliers could          insist  on various types of contingency arrangements to avoid Law          75's  restrictions for  substantial periods  of  time.   Although          Welch's concerns about R.W.'s capacity  to perform in the face of          a  potential conflict of  interest seem legitimate,  delaying Law          75's  coverage until long after the dealership relationship began          would allow Welch to terminate for any reason whatsoever.  Welch,          for  example, could  forsake R.W.  without  recourse and  without          regard  for any  efforts taken  by R.W.  to  gear up  for Welch's          business,  if  another   dealer  willing  to  accept   a  smaller          commission suddenly became  available.  Moreover, there  seems to          be  no  principled  distinction  between  Welch's one-year  trial                                         -14-          period  and a  supplier's effort  to designate  a three-  or even          five-year "preliminary"  distributorship  before  deciding  on  a          long-term relationship.   To rule that a  contingent relationship          is  outside the scope  of Law 75  is thus to  allow a significant          loophole in  the protection the Puerto Rico legislature sought to          provide.               In the  second place, we fail to see  how applying Law 75 in          the circumstances of this case necessarily would require Welch to          continue a relationship it does not want  in a manner to which it          has serious  objections.   Law 75 simply  requires a  supplier to          justify  its decision  to  terminate a  dealership.   If  Welch's          conflict-of-interest concerns about R.W. are legitimate,  we have          no doubt  that this would  constitute "just cause" under  Law 75.          See Medina &  Medina, 858 F.2d at 823-24.4  Thus, applying Law 75          ___ ________________          here does not force a  contract onto unwilling parties; it simply          imposes conditions on an existing relationship.               Finally, the  liberty of contract argument  stumbles insofar          as it presumes that  only the supplier will  suffer if, to  avoid                                        ____________________               4  Medina &  Medina is  not  precisely on  point because  it                  ________________          involved  a  supplier's  decision to  totally  withdraw  from the          Puerto Rico market following  good-faith negotiations that failed          to achieve agreement between the parties.  There is no indication          here that Welch intended  to leave the market rather than  find a          new  dealer.  Nevertheless,  we believe the  principle underlying          Medina &  Medina is  equally applicable  in these  circumstances,          ________________          i.e.,  that a  supplier has  just cause  to  terminate if  it has          bargained  in  good faith  but has  not  been able  "to  reach an          agreement as to price, credit, or some other essential element of          the dealership," 858  F.2d at 824.   This would be true  at least          where, as  here, the  supplier's market in  Puerto Rico  was well          established  before  the  current  dealer  relationship  and  the          supplier's action  therefore "is  not aimed  at reaping  the good          will or clientele established by the dealer," id.                                                        ___                                         -15-          application of  Law 75,  the parties  refrain from  dealing until          they have  reached final agreement  on all terms to  govern their          long-term relationship.  The manufacturer and the dealer share an          interest in maximizing sales of the  product, and it would be  no          more to the  dealer's advantage than to the  manufacturer's for a          market to slip  away while the parties are  engaged in protracted          negotiations.   We therefore  disagree with the  district court's          view that dealers will gain unfair advantage in bargaining if Law          75 is triggered as soon as the parties start dealing.  Both sides          have an  incentive to  reach agreement  at the  earliest possible          time.    To  the  extent  a  supplier's  future   flexibility  is          diminished by its choice to  begin dealing before all issues have          been resolved, this  is a result intended by  the legislators who          enacted Law 75.               In  short, the practical  effect of activating  the Dealers'          Act as soon as the  parties start conducting business as supplier          and  dealer  is  to  ensure  that,  right  from  the  start,  the          relationship is marked by a  certain level of commitment from the          supplier.    This does  not  entirely  deprive suppliers  of  the          opportunity to  evaluate the  suitability of  a particular  match          through a "test  period."  It simply means  that the relationship          can be severed without consequence  only for just cause, i.e., if          the  dealer fails  a meaningful  test.   This should  not trouble          suppliers engaged in  good-faith negotiations, for their  goal is          to produce a long-term working agreement.  If, on the other hand,          a  preliminary "understanding"  disintegrates  into impasse  over                                         -16-          essential terms,  a finding of "just cause" seems likely.  Law 75          is  not intended to extend unworkable  relationships, but only to          prevent arbitrary terminations.  See Medina & Medina, 858 F.2d at                                           ___ _______________          823-24.               Of course,  whether or not  statutes of this kind  are sound          policy is not our concern.  Perhaps a case can be made for having          a  fixed period during which the relationship is probationary and          the  statutory rights under  Law 75 do not  vest; this is typical          for  tenure  arrangements  in government  employment  and  in the          academic  world.   But the  legislature  has not  enacted such  a          window, as we  read the present statute, and it is  not for us to          amend the statute in the guise of construction.               Welch's effort to  bolster its position through  reliance on          Medina  &  Medina and  another  case  involving  a novel  Law  75          _________________          question, Nike Int'l  Ltd. v. Athletic Sales, Inc.,  689 F. Supp.                    ________________    ____________________          1235  (D.P.R. 1988),  is unavailing.    In Medina  & Medina,  the                                                     ________________          Puerto Rico Supreme Court held  that a supplier may withdraw from          the Puerto Rico  market without consequence under Law  75 if "the          parties  have bargained in  good faith but have  not been able to          reach an agreement  as to price, credit, or  some other essential          element of the dealership," 858 F.2d at 824.  Welch contends that          the district court's ruling, allowing the company to call off the          protracted, unsuccessful  negotiations with R.W., is  faithful to          that decision.               In Medina &  Medina, however, the Puerto Rico  Supreme Court                  ________________          did not rule that a  temporary relationship pending completion of                                         -17-          negotiations is outside the scope of Law 75, but it held that the          failed negotiations  over price  and credit  terms provided  just                                                                       ____          cause   for   the   supplier's    decision   to   terminate   the          _____          distributorship a year  after it began.5  Until that case, it was          unclear  whether a supplier  could terminate  without consequence          for any reason other than the dealer's adverse actions.  Medina &                                                                   ________          Medina does help Welch, in that it allows an argument that failed          ______          negotiations may support  a finding of "just cause,"  but it does          not bolster the company's argument that preliminary dealings fall          outside Law 75.               In Nike, a federal district court permitted termination of a                  ____          dealer  who failed  to give  the  contractually required  written          notice to the supplier of its intent to renew the contract.   689          F.  Supp.  at 1239.    According to  Welch,  Nike stands  for the                                                       ____          principle  that  dealers  may  not  avoid the  express  terms  of          agreements  to which they willingly subscribe.  Consequently, the          company  argues, the district  court properly held  appellants to          their  own characterization of  the arrangement as  a preliminary          test period.               This  argument  stretches  Nike  far  beyond  its legitimate                                          ____          boundaries.  Nike addressed only whether Law 75 released a dealer                       ____          from   an   explicit   renewal   procedure   contained   in   the          distributorship  contract.  Noting that the statute's purpose was          to  protect against unjustified termination by the principal, the                                                      ________________                                        ____________________               5  The dealership  contract  between  Medina  &  Medina  and          Country Pride contained  no time limit.  Product  prices were set          periodically by mutual agreement.  858 F.2d at 818.                                         -18-          court ruled that it had no effect on mutual agreements specifying          the manner in which a dealer must notify a supplier of its desire          to continue their  relationship.  See 689  F. Supp. at 1239.   In                                            ___          other words, while  Law 75 takes away from the supplier the right          to make a subjective decision  to terminate, other than for "just          cause," the parties  may agree  to a  contractual procedure  that          gives  the dealer  the power  either to  end or  to  continue the                 __________          relationship after a given period  of time.  Nike holds that  Law                                                       ____          75 does  not protect the  dealer from its  own failure to  follow          that procedure.               This  case is  simply not  equivalent  to Nike.   Welch,  in                                                         ____          essence, claims that the parties agreed that Welch would have the          power  to terminate their  relationship after a  preliminary test          period,  without  regard  to  just  cause.    This,  however,  is          precisely the  imbalance of power  to which Law 75  was directed,          and the statute invalidates  such an agreement.  Under Law  75, a          principal  may  not  wield unilateral  authority  to  terminate a          dealership relationship for other than just cause.               In sum, we find no  basis upon which to exclude the  ongoing          commercial dealings  between Welch and  R.W. from the  embrace of          Law 75.  The district court's grant of summary judgment therefore          must be reversed so that the court may consider whether Welch had          "just  cause" for terminating the relationship.6  Because summary          judgment   on  the  claim   for  tortious  interference   with  a                                        ____________________               6 We recognize  that Welch conceded that R.W. was performing          as a dealer only for purposes of its summary judgment motion, and          that, consequently, this issue also may surface again on remand.                                         -19-          contractual relation  was premised  on the  Law 75  holding, that          decision   also  must  be   vacated  and  remanded   for  further          consideration.  The  remand on the tortious interference claim is          without prejudice  to  any argument  Welch  may be  making  that,          regardless of  the existence of  a relationship protected  by Law          75,   there   was   no   contract   protected   against  tortious          interference.                                III. Antitrust Claims                                     ________________               In January  1989, R.W. introduced a new  Donald Duck bottled          grape  juice  into  the  market  with  an  intensive  promotional          campaign.  Plaintiffs allege that defendants' reaction to the new          product, and R.W.'s representation of it, violated sections 1 and          2 of the Sherman Act, 15 U.S.C.     1, 2, as well as Commonwealth          antitrust  law, P.R.  Laws  Ann.  tit.  10,     258,  260.    The          principal  actions cited by plaintiffs in their amended complaint          were  (1) discussions in  which Welch and  Magna expressed "anger          (`molestia'),  discomfort  and   preoccupation  with  Plaintiffs'          handling  of  the  `Donald Duck'  bottled  grape  juice," Amended          Complaint  at    78;  (2) a  "massive  promotional campaign"  for          Welch's own  bottled grape  juice, and a  price cutting  war, "in          order to  block out the  entrance [of] the `Donald  Duck' bottled          grape juice into the Puerto Rican market," id. at    82,  91; and                                                     ___          (3) the  decision of  Welch to  terminate  its relationship  with          plaintiffs because R.W. did not drop representation of the Donald          Duck juice, id. at   81.                      ___                                         -20-               The district court granted summary judgment on these claims,          concluding  that plaintiffs had  failed to demonstrate  a genuine          issue   of  material  fact  as  to  whether  defendants'  actions          constituted   either  a  conspiracy  in  restraint  of  trade  in          violation of   1  of the Sherman Act,7 or an  unlawful conspiracy          to monopolize  the bottled grape  juice market in violation  of            2.8   Of  greatest significance  to the  court was  a declaration          from  one  of  Magna's principals,  Francisco  Gil,  stating that          Donald Duck  bottled products had reached, within  a short period          of time,  at least  80 percent of  the stores  typically carrying          such products.  The court  found that summary judgment was proper          because  "plaintiffs never  responded to  Welch's  claim that  []          competition  has  not  been  injured, and  that  the  Donald Duck          bottled grape juice  was successfully introduced into  the Puerto          Rico market."               Plaintiffs claim  on appeal  that the  court improperly  and          prematurely  dismissed their  antitrust claims.    Much of  their          brief  on  this issue,  however,  is devoted  to  an off-the-mark          argument  concerning the court's failure to treat the allegations          in  their complaint  liberally.   The court  did not  dismiss the                                        ____________________               7 Section 1 makes unlawful "[e]very contract, combination in          the form  of trust or  otherwise, or conspiracy, in  restraint of          trade  or commerce  among  the several  States,  or with  foreign          nations . . . ." 15 U.S.C.   1.               8  Section  2  makes  it   an  offense  for  any  person  to          "monopolize, or  attempt to  monopolize, or  combine or  conspire          with any other person  or persons, to monopolize any  part of the          trade  or commerce  among  the several  States,  or with  foreign          nations . . . ."  15 U.S.C.   2.                                         -21-          antitrust  claims  based   on  the  pleadings,  but   ruled  that          plaintiffs had failed to substantiate in any way their conclusory          allegations in  response to  defendants' summary  judgment motion          and accompanying declaration.  Our review of the district court's          decision  consequently focuses solely  on the  appropriateness of          summary judgment.               Section 1 of the  Sherman Act.  As  argued by plaintiffs  in               _____________________________          their  appellate  brief,  the  unreasonable  restraint  of  trade          underlying their    1 claim  was an alleged  threat by Welch  (as          part  of  a  conspiracy  with  Magna)  to  terminate  plaintiffs'                                         _____          dealership  and  the   subsequent  actual   termination  of   the          relationship.  These  actions presumably were alleged  to violate          the antitrust laws based on their impact in pressuring plaintiffs          to  drop the  Donald Duck  line of products,  thereby suppressing          competition among grape juice manufacturers.               Heavy-handed competitive tactics alone  do not constitute an          antitrust  violation, however.  To survive defendants' motion for          summary  judgment,  plaintiffs needed  to  demonstrate  a genuine          dispute as  to whether  defendants' actions  caused an  injury to          competition,  as distinguished from  impact on themselves.   See,          ___________                                                  ___          e.g., Spectrum  Sports, Inc.  v. McQuillan, 113  S. Ct.  884, 892          ____  ______________________     _________          (1993) ("The  law  directs itself  not against  conduct which  is          competitive, even severely so, but against conduct which unfairly          tends  to  destroy  competition itself.");  Copperweld  Corp.  v.                                                      _________________          Independence Tube Corp.,  467 U.S. 752, 767 n.14  (1984) ("`[T]he          _______________________          antitrust  laws  .  .  .  were enacted  for  "the  protection  of                                         -22-          competition, not  competitors."'") (citations  omitted) (emphasis          ___________       ___________          in original); Clamp-All  Corp. v. Cast Iron Soil  Pipe Inst., 851                        ________________    __________________________          F.2d 478,  486 (1st Cir.  1988) ("`Anticompetitive' . .  . refers          not to  actions that  merely injure  individual competitors,  but          rather  to actions  that harm  the competitive process.").   Once          defendants  presented a declaration averring that the Donald Duck          products  successfully  entered the  market  during the  relevant          period of time -- indicating  a lack of injury to competition  --          plaintiffs were obliged to counter that statement with more  than          the  bare  allegations   contained  in  their  complaint.     See                                                                        ___          Matsushita Elec. Indus. Co. v.  Zenith Radio Corp., 475 U.S. 574,          ___________________________     __________________          584-87 (1986).               Plaintiffs  responded with a statement from R.W. owner Ward,          which stated, in relevant part:               2.  During the last  months of 1988  R.W. International               Corp.  became the broker  of Donald Duck  bottled grape               juice.               3. Shortly after the introduction  in the market of the               Donald Duck  bottled  grape  juice,  Welch's  began  an               intensive  promotion  of  their   bottled  grape  juice               products.               4.  This  intensive  promotion  of  the  Welch's  Grape               bottled  products caused  []  the introduction  of  the               Donald Duck bottled grape juice be severely suppressed.               5. Upon information  and believe [sic], this  intensive               promotion  was carried  out in  conjunction  with Magna               Trading  Corporation  to  eliminate   the  Donald  Duck               bottled grape juice from [the] Puerto Rico market.               The  district  court  concluded   that  this  statement  was          insufficient to  generate a  genuine factual  dispute because  it          left unchallenged  defendants'  assertion that  the  Donald  Duck                                         -23-          bottled juice had deeply penetrated the Puerto Rico market during          the period  of defendants'  allegedly unlawful  conspiracy.   The          court observed:               [A]s  the  Puerto Rico  Supreme  Court  has recognized,               distributors  are  in   contact  with  the   retailers,               consumers,  and the different  components of the trade.               Medina, 817  F.2d at 823  n.6.  Plaintiffs were  in the               ______               position  to  show,  based on  their  knowledge  of the               Puerto Rico market,  the effects of Welch's  conduct on               the market . .  . .  However, other than the conclusory               allegation   that   their  line   had   been  "severely               suppressed,"  plaintiffs  never  responded  to  Welch's               claim  that the competition  has not been  injured, and               that   the  Donald   Duck  bottled   grape  juice   was               successfully introduced into the Puerto Rico market.               The   district   court's   decision   and  explanation   are          unimpeachable.   Plaintiffs may  have felt pressured  to drop the          Donald Duck products  in order to preserve  the Welch dealership,          and may have suffered economic consequences from Welch's decision          to terminate, but  these circumstances are irrelevant  insofar as          an  antitrust violation  is concerned.    Plaintiffs' failure  to          rebut  defendants' assertion that Donald Duck bottled grape juice          had no problem entering the  market -- an implicit assertion that          competition  was not  affected --  fully  justifies the  district                           ___          court's decision to grant summary judgment for defendants.               Plaintiffs take  issue with the significance  of defendants'          penetration  figure, arguing  that each  of  the stores  carrying          Donald Duck juice may have had only a single bottle of that brand          while displaying shelves  full of Welch products.   We agree with          the  district court,  however, that  such  information, if  true,          could have been obtained easily by plaintiffs, and its absence is                                         -24-          thus not a  proper basis upon which to  withhold summary judgment          from defendants.9  See infra at 24-25 (denial of discovery).                             ___ _____               Section  2  of the  Sherman  Act.    Plaintiffs'    2  claim               ________________________________          characterizes  defendants' promotional  campaign, in  which Welch          reduced prices  on its bottled  grape juice, as  an impermissible          effort to gain monopoly control of the bottled grape juice market          in Puerto Rico.   In light of R.W.'s  success in introducing  the          Donald Duck juice, this claim is wholly without merit.               The Supreme  Court repeatedly  has recognized  that "cutting          prices in order to increase business often is the very essence of          competition," Matsushita, 475 U.S. at  594.  See also Brook Group                        __________                     ___ ____ ___________          Ltd. v. Brown & Williamson  Tobacco Corp., 113 S. Ct.  2578, 2586          ____    _________________________________          (1993)  (".  .  .  Congress   did  not  intend  to  outlaw  price          differences  that   result  from   or  further   the  forces   of          competition.");  Atlantic Richfield Co. v. USA Petroleum Co., 495                           ______________________    _________________          U.S. 328, 341 (1990)  ("`It is in the interest of  competition to          permit  dominant   firms  to  engage  in   vigorous  competition,          including price competition.'")  (citations omitted).  There  was          little basis for  believing that Welch was  engaged in below-cost                                        ____________________               9 We have not considered Magna's argument that the   1 claim          fails because  the requirement  for joint  action by  independent                                                                ___________          entities is  not fulfilled here  in light of Magna's  and Welch's          unified economic interest.   The argument does seem  to have some          force, however.   See Copperweld,  467 U.S. at 776  (holding that                            ___ __________          "the  coordinated  behavior of  a  parent  and its  wholly  owned          subsidiary falls outside the reach  of [  1]"); Pink Supply Corp.                                                          _________________          v.  Hiebert,  Inc.,  788  F.2d  1313,  1316-17  (8th  Cir.  1986)              ______________          (corporate   agents   may    lack   "the   independent   economic          consciousness" necessary to be  conspirators separate from  their          principal).                                           -25-          pricing as opposed to mere  price reduction, although even below-          cost  pricing  is  not automatically  an  antitrust  violation if          competition is not  threatened.  See  Brook Group, 113 S.  Ct. at                                           ___  ___________          2588.   Where,  in addition,  a  new product  is  able to  deeply          penetrate the market during the challenged  price-cutting period,          it  is  evident   that  competition  is  unharmed   and  "summary          disposition of the case is appropriate," id. at 2589.                                                   ___               Request  for  Discovery.    Plaintiffs  suggest  that  their               _______________________          inability to respond with particularity to defendants' motion for          summary  judgment is attributable to the district court's refusal          to lift  a  stay  of  discovery that  had  been  imposed  on  the          antitrust claims.   The decision whether to allow discovery while          a summary judgment motion is pending rests  within the discretion          of the  district court, Sheinkopf  v. Stone, 927 F.2d  1259, 1263                                  _________     _____          (1st  Cir.  1991), and  "the  party seeking  additional  time for          discovery  .  . .  must  show  that the  facts  sought  `will, if          obtained,  suffice  to   engender  an  issue  both   genuine  and          material,'" id. (citation omitted).                      ___               As  the  district  court  observed,  plaintiffs   were  well          situated to explore Welch's impact on competition in  the bottled          grape  juice market,  and they  had  an obligation  to use  their          knowledge and connection with the market to develop some basis to          justify   further  inquiry.10      Plaintiffs,  however,   "never                                        ____________________               10 For  example, plaintiffs could  have done  a sampling  of          stores to  compare prices  and shelf life  between the  Welch and          Donald Duck products.   If bottles of Donald  Duck juice remained          on the  shelves for long  periods while Welch products  enjoyed a          quick  turnover, and  Welch's  prices  were substantially  lower,                                         -26-          articulated how discovery from Welch would provide insight on the          impact  of  Welch's  conduct  on  the  market."   District  Court          Opinion, at 23-24.   Their failure  to do so negates  their claim          that the district court erred in denying discovery.               Accordingly,  we conclude that  the district  court properly          dismissed  plaintiffs'  claims  under sections  1  and  2 of  the          Sherman Act, as well as  under the analogous provisions of Puerto          Rico law.                                    IV. Conclusion                                        __________               For  the foregoing reasons,  we vacate the  summary judgment          for defendants  on the Law  75 and tortious  interference claims,          and remand those  issues for further proceedings  consistent with          this opinion.   We affirm dismissal of the antitrust  claims.  We          have not  considered in any  fashion defendants' argument  to the          district  court that  dismissal of  all  claims alternatively  is          appropriate based on Fed. R. Civ. P.  41 and the court's inherent          powers to control the proceedings  before it.  The district court          explicitly sidestepped this issue, and it is not properly  before          us.               Affirmed in  part, and vacated  and remanded in part.   Each               _____________________________________________________   ____          party to bear its own costs.          ____________________________                                        ____________________          plaintiffs may have  been able to persuade the  district court to          grant discovery  into the possibility  that Welch was  engaged in          predatory pricing. See Brook Group, 113 S. Ct. at 2587 (predatory                             ___ ___________          pricing involves pricing  products "in an  unfair manner with  an          object to  eliminate or retard  competition and thereby  gain and          exercise control over prices in the relevant market").                                         -27-
