SuperTurf, Inc. v. Monsanto Co.

Decision Date02 October 1981
Docket NumberNo. 80-1484,80-1484
Citation660 F.2d 1275
Parties1981-2 Trade Cases 64,316 SUPERTURF, INC., Appellant, v. MONSANTO COMPANY, Appellee.
CourtU.S. Court of Appeals — Eighth Circuit

Deming E. Sherman, Patricia A. S. Zesk, Edwards & Angell, Providence, R. I., Joseph L. Alioto, argued, San Francisco, Cal., for appellant SuperTurf, Inc.; Guilfoil, Symington, Petzall & Shoemake, St. Louis, Mo., on brief.

Fred H. Bartllit, Jr., argued, David E. Springer, Susan M. Meyer, Emily Nicklin, Kirkland & Ellis, Chicago, Ill., William F. Rogers, Richard A. Ringhofer, St. Louis, Mo., for appellee Monsanto Co.

Before HEANEY, STEPHENSON and McMILLIAN, Circuit Judges.

HEANEY, Circuit Judge.

SuperTurf, Inc., appeals from a judgment entered against it in its suit against Monsanto Company. We affirm as to the Sherman Act claims, reverse as to one state law claim and remand to the district court for further proceedings consistent with this opinion.

I INTRODUCTION

SuperTurf, Inc., is a Texas corporation that sells and installs artificial turf athletic surfaces called "SuperTurf." The playing surface consists of green polypropylene fibers tufted into a backing which, in turn, is adhered to a shock absorbing pad. The fibers, backing and pad are purchased by SuperTurf from various manufacturers. The entire product is installed over an asphalt surface.

N. William Paschal, principal officer and owner of SuperTurf, entered the artificial turf business in 1975 with an installation at Cameron University in Lawton, Oklahoma. SuperTurf made two stadia installations in 1976, four in 1977, seven in 1978 and six in 1979.

Monsanto, a multi-national corporation headquartered in St. Louis, Missouri, was the first manufacturer and seller of synthetic turf. Monsanto's "AstroTurf," sold through its Recreational Products Division SuperTurf brought suit in 1978 alleging that Monsanto had monopolized, attempted to monopolize and conspired to monopolize the market for the sale and installation of artificial turf in violation of section 2 of the Sherman Act. 1 SuperTurf's complaint also set forth a pendant state law claim for tortious interference with its advantageous business relations. A six-week trial was conducted on SuperTurf's claims in March-April, 1980. At the close of the trial, the court forced SuperTurf to elect between its antitrust and common law tort claims. Only the antitrust claims were given to the jury. SuperTurf moved for a directed verdict on the question of liability at the close of its case, and again at the close of all the evidence. The court reserved a ruling on this motion and on the defendant's directed verdict motion. The jury returned a general verdict for Monsanto. The district court denied SuperTurf's motion for judgment n.o.v. and for a new trial.

is composed of green nylon fiber woven into a backing and adhered to a shock-absorbing pad. Monsanto manufactures only the fiber. Monsanto installs AstroTurf through a subsidiary, Sport Install, Inc. Its first installation was made in 1966 at the Houston Astrodome.

II SHERMAN ACT CLAIMS

SuperTurf's initial argument is that the trial court erred in denying its motion for a directed verdict on the question of Monsanto's liability under section 2 of the Sherman Act. SuperTurf apparently would have us reverse the trial court's denial of judgment n. o. v. and order that judgment be entered in favor of SuperTurf, leaving the question of the extent of SuperTurf's damages to further proceedings. We decline to do so.

Our review of the trial court's disposition of SuperTurf's directed verdict and j. n. o. v. motions is governed by the same standard applied by the trial court in originally passing on the motions. See Kropp v. Ziebarth, 601 F.2d 1348, 1352 (8th Cir. 1979). The evidence and all reasonable inferences therefrom must be viewed in the light most favorable to Monsanto, the party opposing the motions. A directed verdict or judgment n. o. v. is inappropriate where the evidence supports more than one reasonable conclusion. Id.

Monopolization

The claim most seriously pressed by SuperTurf at trial was that Monsanto monopolized the market for the sale and installation of artificial turf. As the Supreme Court wrote in United States v. Grinnell Corp., 384 U.S. 563, 570-571, 86 S.Ct. 1698, 1703-04, 16 L.Ed.2d 778 (1966):

The offense of monopoly under § 2 of the Sherman Act has two elements: (1) the possession of monopoly power in the relevant market and (2) the willful acquisition or maintenance of that power as distinguished from growth or development as a consequence of a superior product, business acumen, or historic accident.

SuperTurf's threshold task at trial was to delineate the relevant product market. 2 A relevant product market is composed of "commodities reasonably interchangeable by consumers for the same purposes." United States v. E. I. duPont de Nemours & Co., 351 U.S. 377, 395, 76 S.Ct. 994, 1007, 100 L.Ed. 1264 (1955). Monsanto clearly dominates the artificial turf market; 3 the relevant In determining whether two "products" are in the same market, it is important to consider the cross-elasticity of demand between the products, i. e., whether consumers will shift from one product to the other in response to changes in their relative costs. See United States v. Empire Gas Corp., 537 F.2d 296, 303 (8th Cir. 1976), cert. denied, 429 U.S. 1122, 97 S.Ct. 1158, 51 L.Ed.2d 572 (1977). Some of Monsanto's witnesses did conjecture that a reduction in the price of artificial turf might encourage institutions to replace their natural grass surfaces with artificial turf. Even if this testimony were sufficient evidence of cross-elasticity to establish a broad product market, it is important to note that the Supreme Court has recognized that well-defined "submarkets" may exist for antitrust purposes within the outer boundaries of a product market. The Court has stated that

market is delineated to determine whether "the ongoing competition from other products guards against the ability of the dominant entity to increase prices and makes exclusionary tactics by such a party fruitless, impossible or unbearably expensive." Columbia Metal Culvert Co. v. Kaiser Aluminum & Chem. Corp., 579 F.2d 20, 26 (3d Cir.), cert. denied, 439 U.S. 876, 99 S.Ct. 214, 58 L.Ed.2d 190 (1978).

(t)he boundaries of such a submarket may be determined by examining such practical indicia as industry or public recognition of the submarket as a separate economic entity, the product's peculiar characteristics and uses, unique production facilities, distinct customers, distinct prices, sensitivity to price changes, and specialized vendors.

Brown Shoe Co., Inc. v. United States, 370 U.S. 294, 325, 82 S.Ct. 1502, 1524, 8 L.Ed.2d 510 (1962). See United States v. Grinnell Corp., supra, 384 U.S. at 572, 86 S.Ct. at 1704.

In our view, "submarket" analysis is particularily appropriate where, as here, a manufactured product allegedly "competes" with an unlimited or virtually unlimited natural resource. See United States v. Am. Technical Indus., Inc., 1974 Trade Cas. P 74.873. There is considerable evidence of particularity to indicate that the artificial turf market is a submarket within the more broadly defined market for artificial turf and natural grass athletic surfaces.

Artificial turf athletic surfaces are peculiarly durable compared to natural grass surfaces, affording multiple extended usage in facilities where it is installed. 4 Production of the two "products" is obviously completely dissimilar. Artificial turf is made of polypropylene or nylon, and adhered to manufactured surfaces. Natural grass playing surfaces are "merely well-cultivated products of nature." United States v. Am. Technical Indus., Inc., supra, 1974 Trade Cas. at p. 95,873.

Although there is an overlap between customers of the artificial and the natural products, there is a group of customers for whom the artificial turf is the only realistic choice. Owners of domed stadiums are in this group, as are institutions in urban areas. In areas where additional land is unavailable or prohibitively expensive, institutions use artificial turf to afford multiple and extended usage of their existing facilities. 5

An average installation of artificial turf costs in the range of $400,000 to $500,000, as compared to the minimal cost of planting a grass field. Its vendors are specialized. Monsanto's Recreational Products Division and SuperTurf were the only vendors of artificial turf at the time of trial, and neither are involved in the sale of grass seed and fertilizer.

We seriously question whether an issue of fact was raised as to the relevant market in this case. Even if we ruled as a matter of law, however, that the relevant market consists only of artificial turf, the plaintiff has not preserved for review any error the trial court may have committed in submitting this issue to the jury.

The plaintiff moved generally for a directed verdict on the federal law issues of liability at the close of its case and at the close of all the evidence. This Court has held that

where the litigation is made up of independent issues or counts a general motion for a directed verdict will not alone preserve for review the sufficiency of the evidence to support each independent factual issue * * *. A general motion can only go to the case in its entirety and not to the individual submissions. To preserve the individual issues in such a case the appellant must move for a pre-emptory or verdict directing instruction on each of the individual issues which he is challenging, move the challenged issue be removed from consideration of the jury, or object to the instructions on those individual issues setting forth as a reason the lack of supporting evidence or conclusiveness of the proof.

Rochester Civic Theatre v. Ramsay, 368 F.2d 748, 752 (8th Cir. 1966).

The plaintiff-appellant took none of the three courses of...

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