                                                                                                                           Opinions of the United
1996 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


7-24-1996

Ideal Dairy Farms v. John Labatt Ltd
Precedential or Non-Precedential:

Docket 95-5435




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Recommended Citation
"Ideal Dairy Farms v. John Labatt Ltd" (1996). 1996 Decisions. Paper 114.
http://digitalcommons.law.villanova.edu/thirdcircuit_1996/114


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             UNITED STATES COURT OF APPEALS
                 FOR THE THIRD CIRCUIT



                      No. 95-5435



                 IDEAL DAIRY FARMS, INC.,

                                    Appellant

                           v.

JOHN LABATT, LTD.; JOHN LABATT, INC.; TUSCAN DAIRY FARMS,
   INC.; JOHANNA DAIRIES INCORPORATED; ROBERT FACCHINA;
  ABC COMPANIES, 1 THROUGH X (FICTITIOUS NAMES OF LABATT
       AFFILIATES THAT ACTIVELY PARTICIPATED IN THE
    MONOPOLISTIC PRACTICES DESCRIBED BELOW, BUT WHOSE
IDENTITIES ARE PRESENTLY UNKNOWN); JOHN DOES, 1 THROUGH X
  (FICTITIOUS NAMES OF OFFICERS AND/OR DIRECTORS OF THE
  CORPORATE DEFENDANTS WHO ACTIVELY PARTICIPATED IN THE
   DECISION-MAKING REGARDING THE MONOPOLISTIC PRACTICES
   DESCRIBED BELOW, BUT WHOSE IDENTITIES ARE PRESENTLY
      UNKNOWN); ELMHURST MILK & CREAM COMPANY, INC.;
    LOCAL 584, INTERNATIONAL BROTHERHOOD OF TEAMSTERS,
     CHAUFFEURS, WAREHOUSEMEN AND HELPERS OF AMERICA,
    AFL-CIO; HONEYWELL FARMS, INC., t/a ELMHURST DAIRY



               TUSCAN DAIRY FARMS, INC.,

                           Defendant/Third-Party Plaintiff

                           v.

                 IDEAL DAIRY FARMS, INC.;
                     GILBERT LEVINE;
                     MARK GREENBERG,

                           Third-Party Defendants




    On Appeal from the United States District Court
             for the District of New Jersey
          (D.C. Civil Action No. 92-cv-02469)
                               Argued May 3, 1996

         Before: SCIRICA and ROTH, Circuit Judges
and GODBOLD, Circuit Judge


                  (Opinion Filed    July 24, l996)




Sheldon A. Weiss, Esq. (Argued)
225 Millburn Avenue
Suite 203
Millburn, NJ 07041

Steven Pasternak, Esq.
Pasternak, Feldman & Plutnick
70 South Orange Avenue
Eisenhower Plaza South, Suite 245
Livingston, NJ 07039

          Attorneys for Appellant

Thomas H. Moreland, Esq. (Argued)
Lawrence E. Jacobs, Esq.
Kramer, Levin, Naftalis, Nessen, Kamin & Frankel
919 Third Avenue
New York, NY 10022

           Attorney for Appellee Tuscan Dairy Farms

Frederick L. Whitmer, Esq.
Pitney, Hardin, Kipp & Szuch
P.O. Box 1945
Morristown, NJ 07962-1945

           Attorney for Appellees John Labatt Ltd.;
           John Labatt, Inc.; Johanna Dairies, Incorporated and
           Robert Facchina




                       OPINION OF THE COURT
ROTH, Circuit Judge:
         The litigation giving rise to this appeal began when a
locally owned dairy in Northern New Jersey sued a large Canadian
corporation, its affiliates, and several New Jersey dairies
purchased by the corporation in the 1980s. The plaintiff, Ideal
Dairy Farms, Inc. ("Ideal"), filed a complaint that raised breach
of contract, tort, fraud, RICO, and antitrust claims. One of the
defendants, Tuscan Dairy Farms ("Tuscan"), filed a counterclaim
against Ideal seeking payment of unpaid invoices totalling over
$2 million.
         After extensive discovery proceedings, defendants moved
for summary judgment on their counterclaim and on all of Ideal's
twenty-five claims. The district court granted summary judgment
dismissing the claims against the defendants on the basis of its
finding that Ideal failed to raise a genuine issue of material
fact. It also granted summary judgment in favor of defendants on
their counterclaim and awarded Tuscan $2,264,333.71. Ideal
appealed the district court's summary judgment order.
         With regard to Ideal's claims involving the 1985 supply
contract between Tuscan and Ideal, we believe that Ideal has
sufficiently demonstrated that genuine issues of material fact
exist that preclude summary judgment. As a result, we will
reverse and remand the following claims:
         (1) Breach of Contract (Eleventh Count);

         (2)   Breach of Implied Covenant of Good Faith (Twelfth
               Count); and

         (3)  Tortious Interference with Contract (Fourteenth
              Count).
With regard to all other remaining claims, we find that summary
judgment was properly granted against Ideal. We will therefore
affirm the district court's order dismissing all of the antitrust
claims, the common law fraud and RICO claims, and the tort claims
not involving the 1985 supply contract.
                                I.
         The appellant, Ideal, is a New Jersey corporation owned
by Mark Greenberg and Gil Levine. Ideal distributes processed
dairy products to retail customers and to customers in the food
service industry. In the mid-1980s, the Labatt corporation, a
Canadian entity with major interests in the beer and dairy
industries, began acquiring dairies in the United States. For
example, in Northern New Jersey, Labatt acquired Tuscan and
Johanna Dairy Farms ("Johanna"). Labatt also purchased smaller
dairy plants in Northern New Jersey, which it either consolidated
with other more efficient plants or shut down.
         In 1985, Ideal found itself in need of a new processed
milk supplier and entered into negotiations with Tuscan. Tuscan
purchases raw dairy products from farmers and processes them for
sale to retail and industrial customers, as well as to
distributors like Ideal. At that time, Tuscan was owned by Lou
Caiola. Mr. Caiola submitted a proposed supply contract to Ideal
for its consideration. Joint App. 316-23 ("1985 contract").
Ideal had no part in the preparation of the contract and signed
the contract without making any changes to the text. The
contract covered pricing and payment requirements but contained
no clause providing for a term after which the contract would
expire, nor did it discuss how the contract could be terminated.
Mark Greenberg admitted at his deposition that, when they signed
the contract, he and Mr. Levine were aware that the contract had
"no length" and that they were "satisfied with no period of
time." Joint App. 527 & 529.
         The 1985 contract provided that "[a]ll milk and milk
product prices [would be] based upon [the February 1985] Federal
Milk Marketing Order." See Joint App. 317 (1985 contract,
paragraph 2). The Federal Milk Marketing Order sets the minimum
"Class I" price that a processor must pay to a farmer. The
contract further provided that future prices could be adjusted
whenever the Department of Agriculture changed Class I prices and
also when "documentable or industrywide cost[s]" increased or
decreased. Id. Such price adjustments were to be "consistent
with generally accepted industry practice." Id. In addition to
those adjustments, the contract also allowed Tuscan to add "an
additional amount equal to 10% of [any] increase or decrease"
after April 1, 1986. Id.
         Labatt purchased Tuscan Dairy in December 1986. Lou
Caiola continued to manage Tuscan's business, however, until
October 1987. At that time, Herbert England, a Labatt employee,
was appointed to replace Mr. Caiola. England was in charge at
Tuscan until 1988, when he was replaced by Robert Facchina who
ran the business for the remainder of Tuscan's relationship with
Ideal.
         Every day, Ideal ordered products from Tuscan. Every
night, Tuscan loaded the order onto Ideal's trucks so that Ideal
could deliver its cargo to customers the following morning.
Every week, Tuscan sent Ideal an invoice of its purchases. Ideal
responded by paying the invoices, meticulously subtracting for
any product not received, or received but substandard. Every
month, for nearly seven years, Tuscan sent Ideal notice of any
upcoming price changes. Often these notices included a statement
explaining the price changes and a newly revised price list of
Tuscan's offerings.
         Soon after it began doing business with Tuscan, Ideal
realized that Tuscan was charging prices well above expected
contract prices. Beginning in 1987, Tuscan began steadily
increasing prices, usually blaming the increases on various
premiums charged by farmers, cooperatives, and state governments.
For example, Tuscan increased Ideal's prices in 1987 claiming
that RCMA, a dairy farmers' cooperative, had increased the
premium that it charged in addition to the Class I price. Later,
when RCMA reduced its premium, Ideal never received the benefit
of the cost decrease. Ideal discovered this overcharging by
reading certain industry bulletins that publish actual changes in
premiums charged by various raw milk suppliers.
         Ideal first complained to Lou Caiola in 1987 that these
price increases violated the terms of the 1985 contract, and for
the next five years, Ideal continued to complain about the
overcharges to Mr. Caiola's successors. At times, management at
Tuscan promised that, if Ideal was patient, it would get the
decrease that was due. At other times, Tuscan's management
refused to discuss the issue.
         At a meeting held on March 2, 1990, Tuscan's management
attempted to rationalize its prices by comparing them, on a
blackboard, to price increases authorized under the 1985
contract. In the end, Tuscan was unable to show on the
blackboard that it had been increasing prices in compliance with
the contract's pricing formula. Instead, the blackboard
calculations highlighted the extent of Tuscan's overcharging.
Mr. Facchina terminated the meeting and refused to discuss prices
further.
         Because Labatt owned all of the dairies capable of
handling Ideal's supply needs, Mr. Greenberg and Mr. Levine
believed that they were stuck with Tuscan. They doubted that
they could obtain a better price elsewhere. Therefore, they
concluded that they had no choice but to pay the overcharges. In
addition, a New Jersey regulation hampered Ideal's ability to
shop freely for a milk supplier who might offer a lower price.
Section 2:52-3.1 of the New Jersey Administrative Code requires
that milk dealers give milk suppliers two weeks notice before
changing their source of supply. N.J. Admin. Code, tit. 2,    52-
3.1 (1996). This regulation combined with Labatt's control of
several local dairies deterred Ideal from taking its business
elsewhere, and Ideal's management begrudgingly continued to pay
the price increases.
         In late 1990, Tuscan began pressuring Ideal to enter a
new contract with a five or six year term. Tuscan informed Ideal
that, under a new policy implemented at all Labatt-owned dairies,
all customers would be required to enter new contracts. Ideal
successfully delayed signing a new agreement and secretly began
looking for a new supply arrangement.
         In May 1992, Ideal began to negotiate with Cumberland
Farms dairy ("Cumberland"). Initially, Ideal sought only to
acquire a certain size container, which Tuscan had discontinued.
Cumberland, however, refused to supply just the one item but
offered to supply Ideal with all of its product needs. Once they
entered negotiations, Ideal also began building its own depot in
Newark, where it could refrigerate products after hauling them
from Cumberland's South Jersey premises.
         On June 12, 1992, Ideal opened its own depot and began
receiving supplies from Cumberland. It abruptly severed its
relationship with Tuscan, leaving 15 invoices unpaid. Also in
June 1992, Ideal commenced this lawsuit against Labatt, its
affiliates, and the Labatt-owned dairies, alleging violations of
antitrust, contract, fraud, and tort law. The district court
granted the defendants motion for summary judgment and ordered
Ideal to pay the unpaid invoices, thereby awarding Tuscan a total
of $2,264,333.71. Ideal appeals the district court's summary
judgment orders.
                               II.
         The standard of review applied to the appeal of an
order granting summary judgment is firmly established. "An
appellate court reviews the district court's grant of summary
judgment de novo, applying the same standard as the district
court. This requires that [the court] view the underlying facts
and all reasonable inferences therefrom in the light most
favorable to the party opposing the motion." Pennsylvania Coal
Ass'n v. Babbitt, 63 F.3d 231, 236 (3d Cir. 1995) (citation
omitted; emphasis added); see also Helen L. v. DiDario, 46 F.3d
325, 329 (3d Cir.), cert. denied, 116 S.Ct. 64 (1995); Valhal
Corp. v. Sullivan Assocs., Inc., 44 F.3d 195, 200 (3d Cir. 1995);
Goodman v. Mead Johnson & Co., 534 F.2d 566, 573 (3d Cir. 1976),
cert. denied, 429 U.S. 1038 (1977).
         Summary judgment should be granted only if a court
concludes that "there is no genuine issue as to any material fact
and that the moving party is entitled to judgment as a matter of
law." Fed. R. Civ. P. 56(c). The moving party bears the burden
of proving that no genuine issue of material fact is in dispute.
Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S.
574, 586 n.10 (1986). Once the movant has carried its initial
burden, the nonmoving party "must come forward with 'specific
facts showing that there is a genuine issue for trial.'" Id. at
587 (quoting Fed. R. Civ. Proc. 56(e)) (emphasis added in
Matsushita). The non-movant must present concrete evidence
supporting each essential element of its claim. Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23 (1986).
         The question for this court, then, is whether Ideal
presented sufficient evidence to create a dispute regarding a
genuine issue of material fact, viewing the evidence in the light
most favorable to Ideal. Gottshall v. Consolidated Rail Corp.,
56 F.3d 530 (3d Cir. 1995); Big Apple BMW, Inc. v. BMW of N. Am.,
Inc., 974 F.2d 1358, 1363 (3d Cir. 1992), cert. denied, 507 U.S.
912 (1993); Nathanson v. Medical College of Pennsylvania, 926
F.2d 1368, 1381 (3d Cir. 1991). "Facts that could alter the
outcome are 'material', and disputes are 'genuine' if evidence
exists from which a rational person could conclude that the
position of the person with the burden of proof on the disputed
issue is correct." Horowitz v. Federal Kemper Life Assurance
Co., 57 F.3d 300, 302 n.1 (3d Cir. 1995) (citations omitted).
         The district court had subject matter jurisdiction over
the plaintiff's complaint in this case pursuant to 28 U.S.C.
1301, 15 U.S.C.   1 et seq., 28 U.S.C.   1367, and 18 U.S.C.
1965. It had pendent jurisdiction over the plaintiff's state law
claims. This court has jurisdiction to review the district
court's final order granting summary judgment under 28 U.S.C.
1291.
                               III.
         The district court properly granted summary judgment
dismissing Ideal's fraud and RICO claims, as well as its
antitrust claims. There is simply not enough concrete evidence
in the record supporting these claims. However, the district
court improperly granted summary judgment dismissing Ideal's
contract claims because genuine issues of material fact do exist.
                                A.
         In its second amended complaint, Ideal argued that
Tuscan breached the 1985 supply contract by increasing prices in
a manner not consistent with the pricing formula established by
the contract. The district court found that the following facts
were undisputed:
         (1) A contract was formed between the parties in 1985,
         and it contained a price formula; (2) Beginning in
         1987, the invoices Tuscan sent to Ideal did not follow
         the price formula in the contract; (3) Ideal complained
         about this failure to comply with [the] contract price
         formula numerous times; (4) Tuscan told Ideal that the
         invoice prices were the prices it was charging, and
         that Ideal could take its business elsewhere if it
         wanted; and (5) Ideal continued to order products from
         Tuscan at the invoice prices, not contract prices, for
         a period of five years.
Slip Op. at 19. The court found that there were three possible
ways to construe these facts:
         (1) the contract was intact from its formation until
         June of 1992 and Tuscan continually breached the
         contract from 1987 on; (2) the contract was intact from
         its formation until June of 1992, but the price term
         was modified by the invoices and Ideal's payment on
         them; or (3) the original signed contract was
         terminated in 1987, and from the point of termination
         on the parties formed a new contract each time Ideal
         ordered goods, Tuscan sent them an invoice, and Ideal
         made a payment based on that invoice.
Id. at 20.
         "Summary judgment may not be granted . . . if there is
a disagreement over what inferences can be reasonably drawn from
the facts even if the facts are undisputed." Nathanson, 926 F.2d
at 1380 (citing Gans v. Mundy, 762 F.2d 338, 340 (3d Cir.), cert.
denied, 474 U.S. 1010 (1985)). In addition, "[a]ny 'unexplained
gaps' in materials submitted by the moving party . . ., if
pertinent to material issues of fact, justify denial of a motion
for summary judgment." Ingersoll-Rand Financial Corp. v.
Anderson, 921 F.2d 497, 502 (3d Cir. 1990) (quoting O'Donnell v.
United States, 891 F.2d 1079, 1082 (3d Cir. 1989)). Finding
three possible constructions of the facts suggests that there is
a genuine issue of material fact about which a jury could
reasonably disagree. The court's finding of factual ambiguity
should have ensured that the contract claim proceed to trial.
         It is well-established that "the inferences to be drawn
from the underlying facts . . . must be viewed in the light most
favorable to the party opposing the motion." Matsushita, 475
U.S. at 587-88 (citing United States v. Diebold, Inc., 369 U.S.
654, 655 (1962)). In this case, however, instead of allowing a
jury to decide which interpretation of the facts was correct, the
district court chose a favored interpretation. Moreover, it
chose an interpretation that favors the movant over the non-
movant.
         The district court immediately rejected the idea that
the 1985 supply contract had been modified by the regular
submission and payment of invoices. It based its rejection on a
provision of the contract that explicitly prohibits modification
by a course of conduct without a signed writing. Joint App. 321-
322 (1985 Contract, para. 14). Between the two remaining
constructions, the district court held that the third option was
"the correct one." Id.
         The court held that "as a matter of law, the 1985
Contract was terminated by the departure in 1987 from the pricing
terms set forth in that contract." Slip Op. at 23 (emphasis
added). In support of its holding, the court pointed out that
the agreement was an at-will contract because it provided for no
term. The court concluded that, by overcharging, Tuscan "did
seemingly indicate [its] termination of the agreement by [its]
actions." Id. Thus, the district court held that the at-will
contract was terminated in 1987, and from 1987 until 1992, the
parties re-contracted each time Tuscan offered a new invoice and
Ideal accepted by payment. Id. The court held therefore that,
even if Ideal had a claim for breach of contract by termination
without reasonable notice, that claim was barred under the four-
year statute of limitations for contract claims.
         We find that the district court improperly resolved a
genuine issue of material fact. The district court's finding
that the contract was terminated by implication in 1987 is not
the only inference that could reasonably be drawn from the facts.
Viewing the facts in a light most favorable to Ideal, Tuscan's
management did not indicate that the contract was "meaningless"
or "not valid" until late 1990. At that time, Labatt implemented
a policy that required Tuscan to enter new supply contracts with
all buyers. According to the record, Tuscan began to press Ideal
to sign a new agreement in late 1990 or early 1991. See Joint
App. 576-88 & 1061.
         Until late 1990, Tuscan's management did its best to
justify the price increases in a manner that was consistent with
the 1985 contract pricing provisions. For instance, at the March
2, 1990, meeting, Mr. Facchina attempted to show on a blackboard
that its prices complied with the terms of the 1985 contract.
This conduct is not consistent with the district court's finding
that the contract was terminated prior to 1990. Rather, by using
the 1985 contract as a guide to proper pricing, Tuscan expressed
its belief that the contract was operative at the time of the
March 2, 1990, meeting.
         By 1991, it is logical to conclude that Tuscan had
indicated its unilateral termination of the 1985 contract. Ideal
filed this suit in June 1992. Ideal may therefore have a valid
contract claim that is not time-barred by the statute of
limitations applied to contract claims. Because a reasonable
jury could find that the termination occurred in 1990 or 1991,
rather than in 1987, summary judgment should not have been
granted.
         In sum, we find that the district court did not view
the facts in a light most favorable to Ideal, the non-movant,
when it concluded that the contract was unilaterally terminated
by conduct in 1987. The court's order granting summary judgment
against Ideal on its breach of contract claim will therefore be
reversed and remanded.
                                B.
         In a single sentence, the district court explained its
dismissal of Ideal's claim alleging breach of the contract's
implied covenant of good faith. The court said, "It is obvious
that defendants cannot have violated good faith by their 'denial
of the existence of the Contract,' when the contract was
terminated prior to their denial by the change in the prices
charged by defendants." Slip Op. at 27-28. The court therefore
granted the defendants' motion for summary judgment.
         As discussed above, a reasonable jury could find that
the supply contract was terminated, not by the prices charged in
Tuscan's invoices, but by Tuscan's more explicit repudiation of
the contract in late 1990. If the contract was not terminated by
its conduct prior to Tuscan's express denial, but rather was
terminated by the express denial itself, Ideal may indeed have a
claim for breach of the good faith covenant. At any rate, there
is a fundamental chronological dispute which presents a genuine
issue of material fact relevant to Ideal's claim that Tuscan
breached the contract's implied covenant of good faith.
         This factual discrepancy was improperly resolved by the
district court on summary judgment and should have been preserved
for resolution by a jury. Therefore, the court's dismissal of
Ideal's claim that Tuscan breached the 1985 contract's covenant
of good faith will also be reversed and remanded.
                                C.
         The same temporal dispute requires reversal of the
district court's order granting summary judgment on Ideal's
tortious interference with contract claim. The district court
held that "[b]ecause Ideal brought its tortious interference with
contract claim more than two years after the contract was
terminated without reasonable notice," its claim was barred by a
two-year statute of limitations. Slip Op. at 31.
         The court's conclusion was based on its finding that
the contract was terminated in 1987. As we previously concluded,
the facts may be reasonably interpreted to support a finding that
the contract was not terminated until late 1990 or early 1991.
If a jury found that the contract was not terminated until late
1990, the statute of limitations may not bar Ideal's tortious
interference claim. Therefore, summary judgment was improperly
granted, and the court's order will be reversed and remanded.
                               IV.
         The district court properly granted summary judgment
dismissing the balance of Ideal's claims.
                                A.
         The district court did not err in dismissing Ideal's
claim that Tuscan committed fraud by departing upward from the
1985 contract's pricing scheme. Under New Jersey law, a
plaintiff claiming fraud must prove that it detrimentally relied
on an intentionally misleading statement made by the defendant.
See, e.g., John Hancock Mutual Life Ins. Co. v. Cronin, 51 A.2d 2
(N.J. Err. & App. 1947). Ideal admitted however that, early in
its relationship with Tuscan, it became aware that the invoice
prices were higher than the prices envisioned in the contract.
Ideal cannot now claim that it detrimentally relied on Tuscan's
intentional misrepresentation because Ideal knew it was being
overcharged for purchases almost from the start. Therefore, the
district court properly found that Ideal had no cause of action
in fraud.
                                B.
         For very similar reasons, Ideal cannot make out a claim
for violation of the federal RICO statute, 18 U.S.C.   1961 etseq., nor
for violation of New Jersey's RICO Act. N.J. Stat.
Ann. 2C:41-1 et seq. As the fraudulent predicate acts required
by both state and federal RICO statutes, Ideal argued that Tuscan
committed mail and wire fraud. However, the district court found
that there could be no finding of fraud in light of Ideal's
admission that, early in the relationship, it knew that Tuscan
was not complying with the contract. Therefore, the district
court held that Ideal could "not rely on fraud as a predicate act
for purposes of Federal RICO," nor for purposes of New Jersey
RICO. Slip Op. at 18-19.
         We agree that Ideal cannot make out a claim for mail or
wire fraud. Indeed, no fraudulent act occurred in this case.
Without a predicate act, Ideal cannot possibly succeed on its
federal and state RICO claims. These claims were therefore
properly dismissed.
                                C.
         The district court also dismissed Ideal's claim that
Tuscan tortiously interfered with its prospective economic
advantage. In support of its claim, Ideal alleged that Tuscan
undermined its relationships with customers by offering them
extremely low prices and that Tuscan told Ideal to stay away from
certain new retailers.
         The district court found that Ideal failed to present
evidence of each essential element of its interference claim.
With regard to Ideal's allegation that Tuscan undermined its
relationship with a customer, the court found that
         Tuscan entered into an agreement with Ideal to return
         the customer and to make supplemental payments to
         Ideal. This in effect eliminated any claim for
         tortious interference, substituting a contractual
         obligation.
Joint App. 462 (Dist. Ct. Op. 29). With regard to the
allegations that Tuscan employees interfered by warning Ideal to
stay away from certain prospective customers, the court found no
evidence of injury because "Ideal . . . failed to put forward
evidence that it was even interested in any of [those] accounts .
. .." Id.
         To establish a claim of tortious interference with
prospective economic advantage, Ideal must present concrete
evidence that Tuscan intentionally and maliciously interfered
with a "protectable right," and that Tuscan's interference caused
injury. Printing Mart -- Morristown v. Sharp Electronics Corp.,
563 A.2d 31, 37 (N.J. 1987). "A complaint must demonstrate that
a plaintiff was in 'pursuit' of business." Id. First, Ideal has
not shown that it was in serious pursuit of the new accounts
targeted by Tuscan. Second, the allegations made by Ideal fail
to reach the necessary level of maliciousness. Id. ("[M]alice is
defined to mean that the harm was inflicted intentionally and
without justification or excuse."). Tuscan admitted that it was
wrong to solicit Ideal's customer and voluntarily gave the
account back to Ideal. Third, Ideal has not shown that "'if
there had been no interference[,] there was a reasonable
probability that [it] would have received the anticipated
economic benefits.'" Id. (quoting Leslie Blau Co. v. Alfieri,
384 A.2d 859 (App. Div.), certif. denied, 391 A.2d 523 (1978)).
         Thus, we agree with the district court's conclusion
that Ideal failed to establish a claim for tortious interference
with prospective economic advantage. Summary judgment dismissing
this claim was properly granted.
                                D.
         We also agree with the district court's finding that
Ideal failed to present sufficient evidence to support its
antitrust claims. At one time, the Supreme Court endorsed a
slightly stricter standard of review when a summary judgment
order was challenged in an antitrust case. Poller v. Columbia
Broadcasting System, Inc., 368 U.S. 464, 473 (1962); Harold
Friedman, Inc. v. Kroger Co., 581 F.2d 1068, 1080 (3d Cir. 1978).
However, that "special standard" was abandoned in Eastman Kodak
Co. v. Image Technical Servs., Inc., 112 S.Ct. 2072, 2083 (1992);
see also Town Sound, 959 F.2d at 481 ("It may be that because
antitrust cases are so factually intensive that summary judgment
occurs proportionately less frequently there than in other types
of litigation, but the standard of F.R.C.P. 56 remains the
same."). Therefore, the ordinary standard applies. Eastman
Kodak, 112 S.Ct. at 2083. In order to survive a summary judgment
challenge, a plaintiff must prove that a genuine issue of
material fact could be presented at trial, such that a reasonable
jury could return a verdict for the plaintiff on that issue.
                                1.
         The district court did not err in dismissing Ideal's
essential facilities claim. To establish the necessary elements
of this claim, Ideal was required to show:
         (1) control of the essential facility by a monopolist;
         (2) the competitor's inability practically or
         reasonably to duplicate the essential facility; (3)
         denial of the use of the facility to a competitor; and
         (4) the feasibility of providing the facility.
Delaware Health Care, Inc. v. MCD Holding Co., 893 F. Supp. 1279
(D.Del. 1995) (citing among others Monarch Entertainment Bureau,
Inc. v. New Jersey Highway Auth., 715 F. Supp. 1290, 1300
(D.N.J.) (citations omitted), aff'd 893 F.2d 1331 (3d Cir.
1989)).
         The district court properly applied this test and
concluded:
         Even if Ideal could demonstrate that defendants
         monopolized the market, that it was unable to duplicate
         an essential facility, and that it was feasible for
         defendants to make the essential facility available to
         Ideal, Ideal cannot contradict one important fact:
         defendants did not deny Ideal use of its facility, the
         third factor.
Slip Op. at 32. The district court is correct. Almost five
years after realizing that Tuscan was overcharging it, Ideal's
business was still located on the premises of Tuscan Dairy Farms.
The facts in the record show that Ideal was not denied use of
Tuscan's facilities.
         Thus, the district court's ruling in favor of
defendants' motion for summary judgment was proper. Because the
New Jersey Antitrust Act provides that it should be construed in
a manner consistent with federal antitrust law, Ideal's parallel
New Jersey claim was also properly dismissed. See N.J. Stat.
Ann. 56:9-18.
                                2.
         Ideal claims that the defendants conspired with
Elmhurst Dairy to monopolize milk production in New Jersey, in
violation of   1 of the Sherman Act. 15 U.S.C.    1. The court
dismissed this claim, finding that Ideal failed to submit anyevidence
supporting its assertion that defendants conspired with
Elmhurst. Slip Op. at 36. It also found that Ideal failed to
present any evidence proving the four essential elements of a   1
claim set forth in J.F. Feeser, Inc. v. Serv-A-Portion Inc., 909
F.2d 1524, 1541 (3d Cir. 1990), cert. denied, 499 U.S. 921
(1991).
         A plaintiff alleging a   1 violation has a heavy burden
when opposing a summary judgment motion on that claim. In Tunis
Bros. Co., Inc. v. Ford Motor Co., 952 F.2d 715 (3d Cir. 1991),
cert. denied, 505 U.S. 1221 (1992), this court explained:
"[W]hen an antitrust defendant's conduct is consistent with both
permissible competition and illegal conspiracy, a plaintiff 'must
present evidence "that tends to exclude the possibility" that the
alleged conspirators acted independently' in order to survive a
motion for summary judgment." Id. at 720 (quoting Matsushita, 475 U.S. at
588 (quoting Monsanto Co. v. Spray-Rite Serv. Corp.,
465 U.S. 752, 764 (1984))) (emphasis added).
         Ideal has not excluded the possibility that the
agreement between Elmhurst and Tuscan was completely legal.
Although Ideal claimed that the conspiracy was finalized by a
written agreement between Tuscan and Elmhurst, no such document
was presented to the court. In fact, the record was so vague
that the district court could not determine how the alleged
agreement might restrain trade in violation of the Sherman Act.
Slip Op. at 36.
         The district court was correct to conclude that if the
evidentiary record were reduced to admissible evidence, the
plaintiff could not carry its burden of proof at trial. Clark v.
Modern Group Ltd., 9 F.3d 321, 326 (3d Cir. 1993) (holding that
when opposing summary judgment motion, "plaintiff . . . must
point to admissible evidence that would be sufficient to show all
elements of a prima facie case under applicable substantive
law"). Summary judgment was therefore properly granted on
Ideal's 1 Sherman Act claim and on its parallel state law claim.
                                3.
         To survive a summary judgment motion on its Sherman Act
  2 monopolization claim, Ideal had to show that (1) Labatt
possessed monopoly power in the relevant market, and that (2)
Labatt willfully acquired and maintained monopoly power and did
not acquire its monopoly share due to "growth or development as a
consequence of a superior product, business acumen, or historical
accident." Bonjorno v. Kaiser Aluminum & Chemical Corp., 752
F.2d 802, 808 (3d Cir. 1984), cert. denied, 477 U.S. 908 (1986).
         The district court held that Ideal had not presented
sufficient evidence of these essential elements, and it therefore
granted the defendants' summary judgment motion. The court gave
two reasons in support of its ruling. First, it held that Ideal
failed to establish that the relevant geographic market was
Northern New Jersey. Slip Op. at 41; see also id. at 46. And
second, it concluded that a showing that Labatt held a market
share of 47% in New Jersey did not prove the existence of a
monopoly in Northern New Jersey. Id. at 42.
         Until the late 1980s, milk dealers faced significant
regulatory barriers inhibiting free competition between New York
City and New Jersey. New York enforced regulations which, for
practical purposes, excluded New Jersey dealers from the City.
N.Y. Agric. & Mkts. Law   258-c. And New Jersey enforced similar
regulations protecting its dealers from New York competitors.
N.J. Admin. Code, tit. 2,   52-6.1 & -6.2. By the 1990s,
however, both of these regulatory schemes had been challenged in
federal courts and repealed. Thus, when Ideal filed its
monopolization claim, these barriers no longer limited its
potential market to New Jersey.
         We agree that Ideal's relevant market and market share
calculations are dubious. Ideal bore the burden of establishing
the relevant market for purposes of proving its actual monopoly
claim. Tunis Bros., 952 F.2d at 726. Ideal argued that the
relevant market was Northern New Jersey or, in the alternative,
the state of New Jersey. Like the district court, we are not
convinced that either is the relevant market for milk. Ideal has
failed to clearly establish the relevant product and geographic
market necessary to make this claim.
         Nor has Ideal persuaded this court that Labatt controls
a monopoly share of either proposed relevant market. Ideal
estimated that Labatt held 47% of the New Jersey market and then
extrapolated from that figure an estimate that Labatt controlled
a larger share of the market in Northern New Jersey. It is
equally possible that Labatt might hold a smaller share of the
market in Northern New Jersey. Ideal offered nothing further to
support its speculations. Even if Ideal had shown that Labatt
controlled 47% of the New Jersey market, without concrete
evidence of anticompetitive behavior, this percentage does not
prove Labatt to be a monopolist in New Jersey, nor in Northern
New Jersey. Fineman v. Armstrong World Indus., Inc., 980 F.2d
171, 201 (3d Cir. 1992), cert. denied, 113 S.Ct. 1285 (1993) ("As
a matter of law, absent other relevant factors, a 55 percent
market share will not prove the existence of monopoly power.").
We therefore agree with the district court's conclusion that
"Ideal fail[ed] to prove that defendants possessed monopoly power
in any market." Slip Op. at 42. The district court properly
granted summary judgment.
                                4.
         To prove the essential elements of its attempted
monopolization claim, Ideal was required to present concrete
evidence that (1) Labatt had engaged in predatory or
anticompetitive conduct with (2) specific intent to monopolize
and with (3) a dangerous probability of achieving monopoly power.
See Spectrum Sports, Inc. v. McQuillin, 113 S.Ct. 884, 890-91
(1993). It is clear that, when considering the "dangerous
probability" prong of an attempted monopolization claim, a court
must "inquir[e] into the relevant product and geographic market
and the defendant's economic power in that market." Id. at 892.
         Whether a party violates   2 of the Sherman Act by
"attempt[ing] to monopolize" is "a question of proximity and
degree." Swift and Co. v. United States, 196 U.S. 375, 402
(1905). Further, "the conduct of a single firm, governed by     2,
'is unlawful only when it threatens actual monopolization.'"
Spectrum Sports, 506 U.S. at 456 (quoting Copperweld Corp. v.
Independence Tube Corp., 467 U.S. 752 (1984)). As the Supreme
Court explained:
         The purpose of the Act is not to protect businesses
         from the working of the market; it is to protect the
         public from the failure of the market. The law directs
         itself not against conduct which is competitive, even
         severely so, but against conduct which unfairly tends
         to destroy competition itself.
Spectrum Sports, 506 U.S. at 458.
         Even assuming that the relevant market was Northern New
Jersey, we do not believe that Ideal presented sufficient
evidence that Labatt posed a dangerous threat of destroying
competition in the milk industry. We conclude that a higher
degree and proximity to actual monopolization must be
demonstrated before an award of treble damages can be seriously
pursued. Without proving a dangerous probability threatening
destruction of competition in a clearly defined relevant market,
the plaintiff may not proceed beyond summary judgment.
Therefore, we find that the district court properly granted
summary judgment dismissing Ideal's attempted monopolization
claim.
                                5.
         To prove the essential elements of a claim brought
under   7 of the Clayton Act, Ideal must prove that it has
suffered "injury of the type the antitrust laws were intended to
prevent." Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S.
477, 489 (1977). Ideal claims only that competition in the
industry has been reduced by Labatt's acquisitions. However, it
has not proved that it has been injured by the reduction in
competition. Moreover, there is no evidence in the record
demonstrating any harm incurred by Ideal. As the district court
held, such conclusory assertions alone will not support a Clayton
Act claim. The district court properly granted summary judgment
on that claim and on Ideal's parallel state law claim.
                                V.
         Finally, Ideal's civil conspiracy claim was also
properly dismissed. As discussed above, Ideal failed to present
sufficient evidence of any conspiracy that allegedly occurred
between the Labatt-owned dairies and Elmhurst Dairy. Ideal
additionally claims, however, that the Labatt-owned dairies
conspired among themselves to obtain a monopoly in the industry.
It is well-established that subsidiaries cannot illegally
conspire with a corporate parent under 1 of the Sherman Act.
Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 777
(1984) (holding that a corporate parent and its wholly owned
subsidiary "are incapable of conspiring with each other").
Therefore, the district court properly held that the civil
conspiracy claim should also be summarily dismissed.


                               VI.
         We will reverse and remand the district court's order
granting summary judgment on the following three claims brought
against the defendants by Ideal: (1) the breach of contract
claim; (2) the breach of the contract's covenant of good faith
claim; and (3) the tortious interference with contract claim. We
will affirm the district court's order granting summary judgment
in favor of defendants on all of the remaining claims.




Ideal Dairy Farms, Inc. v. John Labatt, Ltd., et al., No. 95-5435

SCIRICA, Circuit Judge, concurring in part and dissenting in part.

         I respectfully dissent from part III of the majority
opinion because I believe the district court correctly entered
summary judgment on Ideal's contract, implied covenant of good
faith, and tortious interference with contract claims.
                                I.
         The Ideal-Tuscan relationship spanned seven years from
1985 to 1992. Its terms were memorialized in a written contract
(the "1985 Contract") that did not specify a term of duration and
did not provide for notice of termination or any other
termination procedure. From almost the beginning of the
relationship, Tuscan did not comply with the pricing provisions
of the 1985 Contract. From 1987 onwards, Ideal repeatedly
complained to Tuscan about price increases and asserted that
Tuscan's prices were not in accordance with the 1985 Contract.
But Tuscan's management consistently refused to adjust invoice
prices in response to Ideal's complaints, and Tuscan told Ideal
it could take its business elsewhere if it wanted. Nevertheless,
Ideal continued to order products from Tuscan at invoice prices
for five more years.
         On the basis of these undisputed facts, the district
court granted summary judgment to the defendants. Opinion, Ideal
Dairy Farms, Inc. v. John Labatt Ltd. et al., No. 92-2469 (D.
N.J. May 11, 1995). It held that the 1985 Contract was an at-
will contract governed by the New Jersey Uniform Commercial Code,
and, because the contract was at-will, "[it] was terminated [as a
matter of law] by the departure in 1987 from the pricing terms
set forth [therein]" Id. at 23. The majority disagrees with the
district court's legal analysis. It concludes that factual
issues remain as to when Tuscan terminated the 1985 Contract, and
believes that Tuscan may have breached the 1985 Contract
continuously over a three to five year period.
                               II.
         The 1985 Contract specified no term. Under the New
Jersey Uniform Commercial Code, a contract of indefinite duration
"is valid for a reasonable time," but "may be terminated at any
time by either party." N.J. Stat. Ann.    12A:2-309(2).
"Termination of a contract by one party . . . requires that
reasonable notification be received by the other party." N.J.
Stat. Ann.   12A:2-309(3).
         The majority concludes that Tuscan may not have
terminated the 1985 Contract until late 1990, when members of
Tuscan management informed Ideal that the contract was
"meaningless" and "not valid." See Majority Opinion at 14.
Under this interpretation, it would appear that an at-will
contract cannot be terminated under   12A:2-309(3) unless
notification is express. I disagree. A party's conduct may also
terminate an at-will contract. See Lumber Enterprises, Inc. v.
Hansen, 846 P.2d 1046, 1049-50 (Mont. 1993) ("when [the seller]
unilaterally raised its prices, it . . . put an end to the
previous contract between the parties"); Michael Halebian N.J.,
Inc. v. Roppe Rubber Corp., 718 F. Supp. 348, 365 (D.N.J. 1989)
(under U.C.C.   2-309, refusal to continue to supply goods in
accordance with the terms of an at-will contract terminates the
contract, not breaches it). Termination through conduct may not
provide the reasonable notice required by   12A:2-309(3), but
failure to give reasonable notice does not mean the contract
continues ad infinitum. Rather the aggrieved party is entitled
to damages arising from the failure to give reasonable notice.
See Ronald A. Anderson, Uniform Commercial Code   2-309:27 at 555
(1982) ("When a contract is terminable at any time on notice and
it is terminated without notice, the damages which the aggrieved
party may recover are limited to those sustained during the
notice period.").
         In this case, Tuscan's pricing diverged from the
contractual provision in 1987 at the latest. Ideal knew it was
being charged a greater amount than that called for by the
contract and repeatedly complained. In response, Tuscan clearly
demonstrated--both by refusing to change its pricing and through
specific statements--that it would not comply with the 1985
Contract. Therefore the contract was terminated at that time.
While Tuscan failed to provide Ideal with reasonable notification
of termination, its consistent refusal to abide by the terms of
the contract terminated the contract. Cf. Agway v. Ernst, 394
A.2d 774 (Maine 1978) (where buyer was unaware of changes in
price made by seller, at-will contract was breached and not
terminated). Ideal could have recovered damages for Tuscan's
failure to provide reasonable notification, but it filed suit
after the statute of limitations had run. I would affirm the
district court's entry of summary judgment on Ideal's claim for
breach of contract.
                               III.
         Because Ideal's implied covenant of good faith and
tortious interference with contract claims derive from its
contract claim, I would grant summary judgment on those claims as
well.
                               IV.
         For the foregoing reasons, I respectfully dissent.
