Tri, Inc. v. Boise Cascade Office Products, Inc.

• Citation: 315 F.3d 915
• Decision Date: 08 January 2003
• Docket Number: No. 01-3919.,01-3919.
• Parties: TRI, INC., Plaintiff-Appellant, v. BOISE CASCADE OFFICE PRODUCTS, INC.; Honeywell, Inc., Defendants-Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

315 F.3d 915

TRI, INC., Plaintiff-Appellant, v. BOISE CASCADE OFFICE PRODUCTS, INC.; Honeywell, Inc., Defendants-Appellees.

No. 01-3919.

United States Court of Appeals, Eighth Circuit.

Submitted: October 7, 2002.

Filed: January 8, 2003.

Rehearing and Rehearing En Banc Denied: February 13, 2003.

William J. Mavity, Minneapolis, MN, for appellant.

Robert Reinhart, Minneapolis, MN, for Honeywell.

John Harper, III, Terrance J. Wagener, Bloomington, MN, on the brief, for Boise Cascade.

Before BOWMAN, RICHARD S. ARNOLD, and LOKEN, Circuit Judges.

LOKEN, Circuit Judge.

Boise Cascade Office Products, Inc. ("Boise") is a nationwide distributor of thousands of office products manufactured by hundreds of vendors. In February 1998, Boise and Honeywell, Inc. entered into a Master Agreement establishing terms and procedures whereby Honeywell offices located throughout the United States and Canada could purchase office products from Boise. The terms of the Agreement included a commitment by Boise "to make a best faith effort to direct a reasonable percentage of business to minority/woman owned businesses."

TRI, Inc., a minority-owned manufacturer of recycled printer toner cartridges, is located in Minneapolis. When Boise entered into the Master Agreement with Honeywell, TRI was supplying recycled toner cartridges to Boise customers in the Twin Cities area and hoped to become one of Boise's national suppliers. In the fall of 1998, Boise's national Minority Business Development Manager introduced TRI to his counterparts at Honeywell as a prospective minority-owned supplier under the Master Agreement. Shortly thereafter, Honeywell advised Boise that Honeywell would not purchase recycled toner cartridges produced by TRI. TRI's sales to other Boise customers declined in the following months.

TRI commenced this action against Honeywell and Boise, alleging a conspiracy to harm TRI and asserting antitrust claims under section 1 of the Sherman Act, 15 U.S.C. § 1, and the Minnesota antitrust statute, Minn.Stat. § 325D.51; claims of race discrimination under 42 U.S.C. § 1981 and the Minnesota Human Rights Act, Minn.Stat. § 363.03; and tort claims for intentional interference with contractual relations and prospective business advantage. TRI now appeals the district court's¹ grant of summary judgment dismissing all claims. Reviewing the grant of summary judgment de novo, we affirm. See Brookins v. Int'l Motor Contest Ass'n, 219 F.3d 849, 852 (8th Cir.2000) (standard of review).

I. Background.

Joseph Thomas is an owner and officer of TRI. Thomas was fired by Honeywell in 1990 for sexually harassing a co-worker. He sued Honeywell, alleging race discrimination and defamation. The race discrimination claim was dismissed for lack of proof, and the defamation claim was defeated by Honeywell's defense of qualified privilege. See Thomas v. Honeywell, Inc., No. C8-94-29, 1994 WL 495087 (Minn. App. Sept.13, 1994). In 1991, Thomas and his partners formed TRI with a plan to hire disadvantaged workers to produce high quality recycled toner cartridges. TRI's annual sales grew to $3.14 million in 1997 but declined to $1.3 million in 2001.

It is undisputed that, shortly after Boise introduced TRI to Honeywell as a potential minority-owned supplier, Michael Schneider of Honeywell called David Plantan of Boise to advise that Honeywell would not purchase TRI's recycled toner cartridges from Boise. Honeywell's decision was based upon Thomas's prior lawsuit against Honeywell. After Schneider's phone call in late October or early November 1998, a few Honeywell offices in Minneapolis purchased TRI products, but only in small quantities. Boise continued to use TRI as a supplier of recycled toner cartridges in the Twin Cities area, but TRI's sales to Boise (and to other large TRI customers) declined in 1999 and 2000.

In response to defendants' motions for summary judgment, TRI submitted evidence that, after Schneider's phone call, Boise sales representatives stopped aggressively promoting TRI products to other customers, selectively increased Boise's prices on TRI products sold to other customers, and did not fill orders for TRI products from customers outside the Twin Cities area. These actions resulted in a substantial decline in TRI's sales to Boise and its customers. There was no written contract between TRI and Boise, only a series of purchases and resales by Boise.

The district court dismissed TRI's antitrust claims on the ground that TRI failed to prove an agreement in restraint of trade between Boise and Honeywell to injure TRI. The court dismissed the § 1981 claims because TRI failed to prove that Honeywell's reason for refusing to do business with TRI was a pretext for intentional race discrimination, and because TRI's retaliation claim was not properly pleaded. The court dismissed TRI's state law discrimination claim as time-barred, and its tortious interference claims for lack of proof. TRI failed to brief the tortious interference claims on appeal, and we therefore decline to consider them.

II. The Antitrust Claims.

TRI argues that Boise and Honeywell violated Section 1 of the Sherman Act, which declares unlawful "[e]very contract, combination ... or conspiracy, in restraint of trade or commerce among the several States." 15 U.S.C. § 1. Section 1 focuses exclusively on concerted action. Thus, Honeywell's unilateral refusal to purchase TRI's products, either from Boise or directly from TRI, cannot violate § 1. See, e.g., Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 761, 104 S.Ct. 1464, 79 L.Ed.2d 775 (1984). However, if Honeywell and Boise agreed that Boise would not sell TRI products to any customer, that agreement could fall within § 1's prohibition, assuming TRI could produce adequate proof that the agreement was "in restraint of trade." TRI argues that such an agreement may be inferred from the actions Boise took after the phone call from Honeywell that hurt Boise's sales of TRI products to other Boise customers.

To survive a motion for summary judgment, a § 1 plaintiff must present evidence of an agreement or conspiracy "that tends to exclude the possibility that [the defendants] were acting independently." Monsanto, 465 U.S. at 764, 104 S.Ct. 1464. "[I]f [the defendants] had no rational economic motive to conspire, and if their conduct is consistent with other, equally plausible explanations, the conduct does not give rise to an inference of conspiracy," and summary judgment is appropriate. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 596-97, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986); see Blomkest Fertilizer, Inc. v. Potash Corp. of Sask., 203 F.3d 1028, 1032 (8th Cir.) (en banc), cert. denied, 531 U.S. 815, 121 S.Ct. 50, 148 L.Ed.2d 19 (2000).

In this case, we agree with the district court that TRI presented insufficient evidence of an agreement or conspiracy between Honeywell and Boise to restrict Boise's sale of TRI products to other Boise customers. TRI, Boise, and Honeywell do not compete with each other in any segment of the office products market. In traditional antitrust terms, TRI is a manufacturer or supplier, Boise is an independent distributor, and Honeywell is an end user of one type of office product. Thus, Honeywell had no rational economic motive to coerce Boise into not selling TRI products to Boise's other customers. Nor was it in Boise's economic interest to allow Honeywell to restrict Boise's sales to other end users. Rather, to the extent TRI manufactured products desired by Boise's customers (other than Honeywell), "it is much more plausible to believe that [Boise's] interests coincided, rather than conflicted, with those of [TRI]." First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 285, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968).

TRI presented no evidence that Honeywell influenced or attempted to influence Boise's supplier-distributor relationship with TRI in any way other than to advise Boise that Honeywell did not wish to purchase TRI products. On the other hand, Boise presented deposition testimony and affidavits from its national and Twin Cities sales personnel giving independent reasons for the decline in Boise's sales of TRI products after October 1998, for declining to fill orders for TRI products from customers who could not be served by Boise's Twin Cities distribution center, and for the few price fluctuations that TRI found through discovery of Boise's sales records. On this record, the district court properly granted summary judgment dismissing TRI's antitrust claims.²

III. The § 1981 Claims.

TRI's complaint alleged that Honeywell violated 42 U.S.C. § 1981(a) "by engaging in purposeful racial discrimination against TRI, through interference with TRI's contractual relationship with Boise." Like the district court, we assume without deciding that § 1981's protections extend to minority-owned corporations such as TRI. See Webster v. Fulton County, 283 F.3d 1254, 1256 n. 3 (11th Cir.), cert. denied, 532 U.S. 942, 121 S.Ct. 1402, 149 L.Ed.2d 345 (2001). We also assume that TRI presented sufficient...