Chase Mfg., Inc. v. Johns Manville Corp.

• Decision Date: 26 April 2022
• Docket Number: Civil Action No. 19-cv-00872-MEH
• Citation: 601 F.Supp.3d 911
• Parties: CHASE MANUFACTURING, INC., Plaintiff, v. JOHNS MANVILLE CORPORATION, Defendant.
• Court: U.S. District Court — District of Colorado

601 F.Supp.3d 911

CHASE MANUFACTURING, INC., Plaintiff,

v.JOHNS MANVILLE CORPORATION, Defendant.

Civil Action No. 19-cv-00872-MEH

United States District Court, D. Colorado.

Signed April 26, 2022

Alexandra H. Shear, James F. Lerner, Bona Law PC, New York, NY, Jarod Michael Bona, Luke Hasskamp, Bona Law PC, La Jolla, CA, Geoffrey N. Blue, Gessler Blue LLC, Greenwood Village, CO, for Plaintiff.

Allison Kaye Kostecka, Gregory J. Kerwin, Lydia F. Lulkin, Gibson Dunn & Crutcher LLP, Denver, CO, Roger P. Twisselman, Johns Manville Corporation, Denver, CO, for Defendant.

ORDER

Michael E. Hegarty, United States Magistrate Judge.

Before the Court is Defendant's Motion for Summary Judgment (ECF 193) and Motion to Strike (ECF 221). Both Motions are fully briefed, and the Court heard oral argument on April 18, 2022. For the following reasons, the Motion for Summary Judgment is granted and the Motion to Strike is denied.

BACKGROUND

I. Claims for Relief

Before addressing Plaintiff's claims for relief, it is helpful to establish the surrounding context. The parties do not provide such information in their statements of fact, but there is no dispute about them either. The Court draws them from previous filings and rulings, and summarizes them as such:

Defendant manufactures and sells mechanical insulation materials for use in industrial settings to insulate pipes, tanks, or equipment at very high temperatures. There are several materials that can be used for that purpose. One such product is hydrous calcium silicate thermal insulation ("calsil"). At issue here is the kind of calsil that complies with the ASTM C533 Type I industry standard regarding quality and performance characteristics.

Defendant manufactures calsil in the United States. For many years before Plaintiff's entry into the calsil market, Defendant also was the sole seller in the U.S. A factory in China is another source of calsil. In March 2018, Plaintiff began importing calsil made at the Chinese factory into the U.S., thereby entering the U.S. market as Defendant's sole competitor.

Both Defendant and Plaintiff sell their respective calsil products primarily to distributors. Roughly speaking, the manufacturer-to-distributor step in the greater supply chain constitutes the upstream market. It is the focus of Plaintiff's antitrust claims. Distributors, in turn, sell calsil to those who need it for particular construction projects. Many of these downstream sales are to contractors.

The Court denied Defendant's first summary judgment motion, finding the record insufficient to grant judgment on "how Plaintiff's definition of the relevant product market is factually and legally inadequate." Chase Mfg., Inc. v. Johns Manville Corp. , No. 19-cv-00872-MEH, 2021 WL 50871, at *6 (D. Colo. Jan. 6, 2021). Summarizing the then-available record, the Court observed how:

calsil is a product that is used to meet highly technical needs in industrial or equivalent settings, and that the choice to use it is likewise technical in nature. The processes for obtaining and installing it at a project site involve many actors, and distributors play the critical role in providing calsil to contractors and to others who seek it for project needs.

Id. The Court disagreed with Defendant that "Plaintiff's focus on the distributor level [was] legally inadequate." Id. Nor does the current record show how the technical aspects of the industrial insulation material market should be ignored or why the upstream, distributor-level of the supply chain should not be the focus of inquiry. A distributorship network can play an important role and benefit both the manufacturer and the end user. U.S. v. Dentsply Int'l, Inc. , 399 F.3d 181, 192-93 (3rd Cir. 2005).

Within that context, Plaintiff raises two theories for why Defendant's reaction to Plaintiff's entry into the U.S. calsil market violated antitrust law. Its first theory rests on the allegation that Defendant conditioned the sale of its other insulator products on distributors’ calsil purchases. That requirement, Plaintiff contends, represents an unlawful tying arrangement in violation of Section 1 of the Sherman Act ( 15 U.S.C. § 1 ). The second theory is that Defendant engaged in various exclusionary acts that constitute unlawful monopolization under Section 2 of the Sherman Act ( 15 U.S.C. § 2 ).

Plaintiff had asserted a third claim for relief based on a violation of the Lanham Act. Because Plaintiff now withdraws that claim (ECF 204 at 10, n.1), the Court need not address it here. However, the Court still reviews evidence related to it to the extent it overlaps with Plaintiff's claim of disparagement as a form of exclusionary conduct.

II. Scope of the Record

The disputes over the record itself are nearly as extensive as those concerning the claims’ merits. One issue concerns the adequacy of Plaintiff's answers to Contention Interrogatory Nos. 9 and 10 (found in the record at ECF 193-1) in which Defendant asked, in effect, for Plaintiff to identify the evidence that supports two particular allegations of wrongdoing. As Plaintiff explains in its Opposition (ECF 204 at 73-76), it limited its interrogatory answers to those materials over which it had direct access, i.e. , the information "which [is] reflected in documents within [Plaintiff's] possession, custody, and control and which [Plaintiff] produced to [Defendant] in the course of this litigation." Id. at 73. In other words, Plaintiff excluded from its answers the evidence that came from Defendant–even though Plaintiff regards Defendant as the primary source of relevant, admissible evidence (id. at 74). Plaintiff uses its Opposition to provide just "a brief preview of the evidence that supports its claims," and prefers to wait until trial to "prove its case affirmatively." Id. at 75.

Defendant did not object to the sufficiency of the interrogatory answers during the discovery phase of litigation. Instead, Defendant says the answers should restrict the scope of the evidentiary record for purposes of the present summary judgment analysis. For the sake of thoroughness and the policy favoring rulings on the merits, the Court takes into consideration all evidence which Plaintiff submits as part of the current briefing. Defendant already knew of that evidence, even if Plaintiff omitted some of it from its answers to those specific interrogatories.

Defendant also complains about admissibility and authentication defects with the evidence upon which Plaintiff relies for its Opposition and Sur-Reply. As a general rule, a court only may consider admissible evidence when ruling on a summary judgment motion. Strepka v. Jonsgaard , No. 10-cv-00320-PAB-KMT, 2011 WL 2883375, at *6 (D. Colo. July 18, 2011) (citing Johnson v. Weld Cnty., Colo. , 594 F.3d 1202, 1209-10 (10th Cir. 2010) ). Fed. R. Civ. P. 56(c)(1)(B) permits as a summary judgment argument that the "adverse party [here, Plaintiff] cannot produce admissible evidence to support the fact" at issue. Rule 56(c)(2) permits the objection "that the material cited to support or dispute a fact cannot be presented in a form that would be admissible in evidence." (emphasis added). In other words, a court may not consider an exhibit if it could not be presented in some admissible form later at trial. SEC v. Mahabub , No. 15-cv-2118-WJM-MLC, 2017 WL 6555039, at *2 (D. Colo. Dec. 22, 2017). Moreover, case law construes a Rule 56 admissibility objection to concern the content or substance of the evidence, not its form.

Johnson v. Salt Lake City Sch. Dist. , No. 19-cv-743-JNP-DAO, 2021 WL 4895241, at *3 (D. Utah Oct. 20, 2021) ; Strepka , 2011 WL 2883375, at *6 ("As the nonmoving party, Plaintiff is not required to produce evidence ‘in a form that would be admissible at trial, but the content or substance of the evidence must be admissible.’ ") (quoting Thomas v. Int'l Bus. Mach. , 48 F.3d 478, 485 (10th Cir. 1995) ). The burden is on the proponent of the exhibit to show how it could be admissible. Royal Pacific Ltd. v. Faith Elec. Manuf. Co., Ltd. , No. 17-357-MIS/JFR, 2022 WL 228218, at *5 (D.N.M. Jan. 26, 2022). At the same time, the Court enjoys "broad discretion to determine at the summary judgment stage what evidence it will consider pursuant to Rule 56(c)(2)." Id.

Defendant objects to various emails as hearsay. However, Plaintiff may have potential hearsay exceptions which it could raise at a trial. One possibility is the emails constituting records of regularly conducted activity under Fed. R. Evid. 803(b). Johnson , 2021 WL 4895241 at *5. In addition, under Fed. R. Evid. 801(d), if the emails contain statements made by an agent or employee of Defendant which Plaintiff offers against the Defendant, they are not hearsay. Id. The focus of Defendant's argument concerns more the failure of Plaintiff to depose the emails’ authors. However, that objection seems better placed if Plaintiff was submitting a declaration or affidavit to introduce new, undisclosed testimony that could have been developed by deposing the declarant. Moreover, Plaintiff may be able to call a witness to the stand to testify at the trial even if Plaintiff did not depose the witness, and in doing that, lay the necessary foundation for emails.

An example of Defendant's hearsay objection is the email exchange between Russell Huff and Mark Duppler (presumably both of the third-party distributor, Bay), about Defendant taking a hard line against anyone buying Plaintiff's calsil. ECF 204-3. Defendant argues that Plaintiff should have deposed Mr. Duppler or another Bay representative. However, as the Court explains above, there is the possibility that Plaintiff still may be able to admit the email at a trial. The Court also notes that Defendant itself relies on the email to support its position. ECF 211 at 63. Defendant's stronger hearsay argument concerns emails that contain second-hand information. One such email is between Plaintiff's employees on October 22, 2019 in which Mr. Revesz relays others’ reports...