Garabet v. Autonomous Technologies Corp.

• Decision Date: 18 September 2000
• Docket Number: No. CV9904692 ABC (SHx).,CV9904692 ABC (SHx).
• Citation: 116 F.Supp.2d 1159
• Court: U.S. District Court — Central District of California
• Parties: ANTOINE L. GARABET, M.D., INC., and, Abraham V. Shammas, M.D., Inc., both doing business as The Laser Eye Center, Plaintiffs, v. AUTONOMOUS TECHNOLOGIES CORPORATION and Summit Technology, Inc., Defendants.

Page 1159

116 F.Supp.2d 1159

ANTOINE L. GARABET, M.D., INC., and, Abraham V. Shammas, M.D., Inc., both doing business as The Laser Eye Center, Plaintiffs, v. AUTONOMOUS TECHNOLOGIES CORPORATION and Summit Technology, Inc., Defendants.

No. CV9904692 ABC (SHx).

United States District Court, C.D. California, Western Division.

September 18, 2000.

Alioto & Alioto, John Alioto, Linda Alioto, Margaret Weems, San Francisco, CA, for plaintiff/petitioner/appellant.

Blanc, Williams, Johnston & Kronstadt, John Kronstadt, Los Angeles, CA, Arnold & Porter, Mark Merley, Anika Cooper, Washington, D.C., for defendant/respondent/appellee.

ORDER GRANTING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

COLLINS, District Judge.

This case involves federal antitrust claims and state unfair competition claims challenging the merger of two corporations engaged in the design, development, sale, and licensing of Laser Vision Correction ("LVC") equipment, which enables surgical correction of vision problems including farsightedness, nearsightedness, and astigmatism. After reviewing the papers submitted by the parties, the case file, and oral argument, the Court hereby GRANTS Defendants' motion for summary judgment.

I. PROCEDURAL HISTORY

On April 29, 1999, Plaintiffs Antoine L. Garabet, MD., Inc., and Abraham V. Shammas, M.D., Inc., d/b/a The Laser Eye Center, filed a Complaint against Defendants Autonomous Technologies Corp. ("ATC") and Summit Technology, Inc. ("Summit"). Plaintiffs assert that the April 29, 1999 merger of the two Defendant corporations, as well as the June, 1998 agreement between Defendant Summit and another LVC equipment corporation, VISX, constitute restraints of trade and monopolization in violation of the Clayton Act Section 7 (15 U.S.C. § 18), the Sherman Act Section 1 (15 U.S.C. § 1), and California's Unfair Competition Statute (Cal.Bus. & Prof.Code § 17200 et seq.). Plaintiffs seek a judgment that Defendants have committed antitrust violations, divestiture of the merger under Clayton Act Section 16 (15 U.S.C. § 25), treble damages under Clayton Act Section 4 (15 U.S.C. § 15), and injunctive relief, restitution or disgorgement under the Unfair Competition Statute. Defendants filed their First Amended Answer ("FAA") July 1, 1999.

On June 30, 2000, Defendants filed the instant Motion for Summary Judgment ("Motion"). Defendants assert that Plaintiffs, having never purchased any LVC equipment from Defendants, lack the requisite standing to sue for damages under Clayton Act Section 4, or for equitable remedies under Clayton Act Section 16. Further, Defendants argue that Plaintiffs are barred by the doctrine of laches from pursuing any equitable remedy. Finally, Defendants argue that the state claim, predicated as it is on the underlying federal claims, also fails. On February 14, 2000, Plaintiffs filed their Opposition. On March 3, 2000, Defendants filed their Reply. On September 18, 2000, the Court heard oral argument.

II. SUMMARY JUDGMENT STANDARD

The party moving for summary judgment has the initial burden of establishing that there is "no genuine issue as to any material fact and that [it] is entitled to a judgment as a matter of law." Fed. R.Civ.P. 56(c); British Airways Bd. v. Boeing Co., 585 F.2d 946, 951 (9th Cir.1978) (citations omitted).

If the moving party has the burden of proof at trial (e.g., a plaintiff on a claim for relief, or a defendant on an affirmative defense), the moving party must make a "showing sufficient for the court to hold that no reasonable trier of fact could find other than for the moving party." Calderone v. United States, 799 F.2d 254, 259 (6th Cir.1986) (quoting from Schwarzer, Summary Judgment Under the Federal Rules: Defining Genuine Issues of Material Fact, 99 F.R.D. 465, 487-88 (1984)). Thus, if the moving party has the burden of proof at trial, that party "must establish beyond peradventure all of the essential elements of the claim or defense to warrant judgment in [its] favor." Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986) (emphasis in original).

If the opponent has the burden of proof at trial, the moving party has no burden to negate the opponent's claim. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party does not have the burden to produce any evidence showing the absence of a genuine issue of material fact. Id. at 325, 106 S.Ct. 2548. "Instead, ... the burden on the moving party may be discharged by `showing'—that is, pointing out to the district court—that there is an absence of evidence to support the nonmoving party's case." Id.

Once the moving party satisfies this initial burden, "an adverse party may not rest upon the mere allegations or denials of the adverse party's pleadings ... [T]he adverse party's response ... must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e) (emphasis added). A "genuine issue" of material fact exists only when the nonmoving party makes a sufficient showing to establish the essential elements to that party's case, and on which that party would bear the burden of proof at trial. Celotex, 477 U.S. at 322-23, 106 S.Ct. 2548. "The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which a reasonable jury could reasonably find for plaintiff." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in favor of the nonmovant. Id. at 248, 106 S.Ct. 2505. However, the court must view the evidence presented "through the prism of the substantive evidentiary burden." Id. at 252, 106 S.Ct. 2505.

In general, it may be difficult to resolve antitrust cases on summary judgment because of their factual complexity. See Carter v. Variflex, 101 F.Supp.2d 1261, 1264 (C.D.Cal.2000) (citing Rickards v. Canine Eye Registration Found., 783 F.2d 1329, 1332 (9th Cir.1986)). However, this does not mean that a district court may not award summary judgment, even in an antitrust case, where appropriate. See Bhan v. NME Hosp., Inc., 929 F.2d 1404, 1409 (9th Cir.1991); Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-598, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (granting summary judgment). As the Ninth Circuit has shown, summary judgment may often be appropriate on an antitrust claim. See Bhan, 929 F.2d at 1409.

III. FACTUAL BACKGROUND

Plaintiffs in this matter, Drs. Garabet and Shammas, practice refractive eye surgery, doing business together as the Laser Eye Center in various locations in the state of California. The Laser Eye Center makes use of LVC equipment in its corrective surgery practice, and has done so for at least several years. Corrective eye surgery is apparently a rapidly-growing practice. Defendants Summit and ATC are two formerly-separate corporations engaged in the design, development, sale, and license of LVC equipment. See Complaint ¶¶ 5-7, 11, 15, 17; FAA ¶¶ 6, 15, 16, 18.

The operative facts of Plaintiffs' Complaint are as follows. On October 20, 1995, Summit received FDA approval to market its laser system to treat low to moderate myopia, and in March, 1998, Summit received FDA approval to market its laser system to treat astigmatism. In or about March, 1996, VISX received FDA approval to market its laser system to treat low to moderate myopia, and in or about April, 1997, VISX received FDA approval to market its laser system to treat astigmatism. See Complaint ¶ 21; FAA ¶ 21.

In June, 1998, Summit entered into an agreement with VISX to dissolve a previous partnership ("Pillar Point Partners") between the two corporations, to resolve pending litigation between the parties, and to grant one another fully paid-up (royalty-free) cross-licenses to certain patents related to LVC technology owned by each corporation. See Complaint ¶¶ 8, 26; FAA ¶¶ 8, 26. This agreement followed entry of a consent order reached as the outcome of an FTC administrative complaint against Pillar Point Partners. One provision of the consent order required dissolution of Pillar Point Partners. See Complaint ¶ 22; FAA ¶ 22.

Since 1993, ATC has been engaged in design and development of LVC equipment. See Complaint ¶ 6; FAA ¶ 6. In November, 1998, the FDA gave premarketing approval to ATC's LADARVision System for treatment of mild to moderate myopia with or without astigmatism. See Complaint ¶ 6; FAA ¶ 6. In or about December, 1998, the FDA also approved an LVC system from another corporation, Nidek, for treatment of myopia and low to moderate nearsightedness, without astigmatism. Aside from the recent market entry of Bausch & Lomb and Lasersight, Inc., two other corporations seeking to market LVC equipment, ATC, Summit, VISX, and Nidek are the major players in the LVC market. See Complaint ¶¶ 29, 32; FAA ¶¶ 29, 32.

The parties estimate that in 1998 VISX accounted for seventy-five percent of LVC procedures performed in the U.S., while Summit accounted for twenty-five percent. In November, 1998, VISX got FDA approval to market its LVC systems to treat farsightedness; VISX is the only supplier of LVC equipment that currently has FDA approval to treat farsightedness. See Complaint ¶ 31; FAA ¶ 31.

There is some history of litigation between these parties, as well as in the industry in general. In December, 1997, Plaintiffs herein filed a Complaint in the Northern District of California against Summit, VISX, and Pillar Point Partners, seeking, inter alia, a declaration of noninfringement of patents. The action was subsequently transferred to the District of Arizona, and Summit counterclaimed for patent infringement on February 16, 1999. The case is currently pending in federal court in the District of Arizona. See Complaint ¶ 7; FAA ¶ 7; In re Pillar Point Partners Antitrust and Patent Litigation, MDL Docket No. 1202 (D.Az.) (appended to the...