Ramallo Bros. Printing, Inc. v. El Dia, Inc.
| Decision Date | 03 June 2005 |
| Docket Number | No. CIV. 02-2400(JAF).,CIV. 02-2400(JAF). |
| Citation | 392 F.Supp.2d 118 |
| Parties | RAMALLO BROS. PRINTING, INC., Plaintiffs, v. EL DIA, INC.; Editorial Primera Hora, Inc., and Advanced Graphic Printing, Inc., Defendants. |
| Court | U.S. District Court — District of Puerto Rico |
Plaintiff Ramallo Bros. Printing, Inc. ("Plaintiff") brings the present action against Defendants El Día, Inc. ("Defendant El Día"); Editorial Primera Hora, Inc. ("Defendant Editorial Primera Hora"); and Advanced Graphic Printing, Inc. ("Defendant AGP"); alleging violations of Sections 4 and 16 of the Clayton Act, 15 U.S.C. §§ 15 and 26 (1997 & Supp. I 2003); Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2, (1997 & Supp. I 2003); and various causes of action under state law, including the antitrust laws of the Commonwealth of Puerto Rico, 10 P.R. LAWS ANN. §§ 258, 260 and 268 (1997 & Supp.2001). Docket Document Nos. 1, 13, 40. Plaintiff seeks injunctive and monetary relief. Id.
Defendants move for summary judgment. Docket Document Nos. 156, 189, 213. Plaintiff opposes the motion. Docket Document Nos. 176, 196.
We derive the facts and allegations from our February 6, 2004, opinion and order, and from the parties' pleadings and statements of material fact. Docket Document Nos. 1, 12, 13, 38, 40, 59, 156, 176, 188, 196.
Plaintiff is a corporation organized and existing under the laws of Puerto Rico, with its principal place of business in Puerto Rico. It is a commercial printer whose business consists of, inter alia, the printing of inserts ("shoppers") advertising the sale of goods, which are distributed by inserting them in newspapers of general circulation in Puerto Rico, as well as by other means. Shoppers are used by major retailers, such as supermarkets, drug stores, toy stores, and furniture stores as advertising vehicles for products offered for sale. Shoppers usually range in size from four to twelve pages, and contain color pictures of individual products, together with prices and other product information.
Plaintiff is part of a group of businesses that also includes a commercial forms printer, a software integration business, a paper company, and a boat distributor, as well as a three-building industrial complex that includes leased space for commercial tenants and houses Plaintiff's printing facilities, which are located in what Plaintiff describes on its website as a "world-class manufacturing environment."
Defendant El Día is a corporation organized and existing under the laws of Puerto Rico with its principal place of business in Puerto Rico. Defendant El Día is the owner and publisher of El Nuevo Día, the largest newspaper in Puerto Rico based on paid circulation and revenues. The business of the newspaper includes, inter alia, the distribution of shoppers printed by Defendant El Día, Defendant AGP, and other commercial printers, including Plaintiff. Defendant El Día is also part of a group of companies that includes Defendant Editorial Primera Hora and Defendant AGP, as well as other related businesses.
Defendant Editorial Primera Hora is a corporation organized and existing under the laws of Puerto Rico with its principal place of business in Puerto Rico. Defendant Editorial Primera Hora owns and publishes Primera Hora, a daily Puerto Rico newspaper, which is a new entrant into the daily newspaper market. Primera Hora is printed by Defendant El Día. Defendant Editorial Primera Hora's business also includes, inter alia, the distribution of a few shoppers.
Defendant AGP is a corporation organized and existing under the laws of Puerto Rico with its principal place of business in Puerto Rico. Defendant AGP is a commercial printing company that was formed by Defendant El Día in 1997. Defendant AGP's business, like that of Plaintiff, includes, inter alia, the printing of shoppers.
El Nuevo Día and Primera Hora are two of four daily newspapers in Puerto Rico, all of which depend primarily on advertising for their revenues. Most retail newspaper advertising takes one of two forms: (1) display advertising that appears within the body of the newspaper, commonly referred to as "run of press" or ROP advertising, and (2) shoppers and other pre-printed inserts containing various types of advertising.
One vehicle for ROP advertising in El Nuevo Día and El Vocero, Puerto Rico's two largest newspapers, is commercial supplements, sections of the newspaper usually containing both editorial content and display advertising by multiple advertisers. El Nuevo Día publishes approximately 190 commercial supplements annually, including supplements published to commemorate Mother's Day, Christmas, and Secretaries' Week, or based on themes such as autos, weddings, and babies. El Nuevo Día produces and prints commercial supplements on newsprint using the newspapers' staffs and presses. According to its publisher, El Vocero follows the same practice for producing commercial supplements.
A small portion of commercial supplements, called "corporate supplements," focus on a featured business and usually celebrate that business' anniversary or some other special event. Corporate supplements constitute a negligible portion of the advertising and commercial printing business in Puerto Rico. From 1999 to 2003, El Nuevo Día had about 5,000 commercial inserts, but only 134 corporate supplements. Corporate supplements typically contain stories about a featured company and serve as a vehicle for the newspaper to sell advertising to sponsors, usually the featured company's vendors. Like commercial supplements, corporate supplements are produced entirely in-house. El Nuevo Día has designated Creative Minds, a former El Nuevo Día staff unit that is now a division of AGP, as its exclusive agent for producing corporate supplements, and it will only insert corporate supplements produced by Creative Minds. Creative Minds performs all the functions needed to produce the supplement, including preparation of editorial content and artwork, sales of advertising, coordination of the printing and insertion in the newspaper. Defendants' stated reasons for the policy of using only Creative Minds to produce corporate supplements are the need to maintain editorial integrity, to ensure the content is accurate and comports with its style and content policies, and to take advantage of the cost savings.
Shoppers and corporate supplements are printed most frequently on glossy paper rather than newsprint, a process that requires the services of a commercial printer with a web press — such as Plaintiff and Defendant AGP — because glossy paper products cannot be printed on newspaper presses. Plaintiff complains that it printed El Nuevo Día's corporate supplements prior to Defendant AGP's formation, but El Nuevo Día will now only use Defendant AGP to print corporate supplements.
With four daily newspapers, three of which are separately owned, Puerto Rico has one of the most competitive newspaper markets in the United States. Only six other U.S. cities have more than two daily newspapers. Daily newspapers also compete with many other methods available for retailers to deliver their advertising messages to consumers. Plaintiff's vice-president for sales and many of the advertiser-deponents identified the media competing with daily newspapers as television, radio, magazines, direct mail, outdoor advertising, catalogues, coupons, the Internet, and the many regional newspapers in Puerto Rico. Shoppers are only one option for advertisers to deliver their message.
Those retailers that include shoppers in their advertising mix also use a variety of competing delivery channels to distribute their shoppers. While newspapers are the most common delivery means, some advertisers also use door-to-door delivery, direct mail, and free distribution in stores, malls, and other places.
In 1995, Plaintiff acquired a commercial printer in Puerto Rico that competed directly with Plaintiff in the printing of shoppers, effectively leaving Plaintiff as the only high-volume printer of shoppers located in Puerto Rico. According to Plaintiff's economics expert, Dr. Franklin M. Fisher, Plaintiff printed in excess of 80 percent of the shoppers produced in Puerto Rico before Defendant AGP entered the market.
In the early 1990s, El Día was a significant purchaser of commercial printing services for the printing of glossy magazines and other sections of its newspaper. El Día also printed some advertising material, including shoppers, on newsprint using the same presses it used to print the newspaper, but El Día did not have the presses necessary to print glossy paper products. El Día considered entering the printing business as early as 1992 because it witnessed an exodus of printing business to off-island printers. Believing that upward of 40 percent of commercial printing for the Puerto Rican market was being performed offshore, El Día decided to create AGP in 1997 to capture the offshore business and provide more competition within Puerto Rico.
Since Defendant AGP's formation, customers seeking lower prices and better...
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