White Mule Co. v. Atc Leasing Co. LLC, Case No. 3:07CV00057.

Citation540 F.Supp.2d 869
Decision Date25 March 2008
Docket NumberCase No. 3:07CV00057.
PartiesWHITE MULE COMPANY, et. al., Plaintiffs, v. ATC LEASING COMPANY LLC, et. al., Defendants.
CourtU.S. District Court — Northern District of Ohio

Robert G. Schuler, Robert G. Cohen, Teddy M. McKinniss, Kegler, Brown, Hill & Ritter, Columbus, OH, for Plaintiffs.

Kenneth J. Rubin, Robert N. Webner, William H. Oldach, III, Vorys, Sater, Seymour & Pease, Columbus, OH, for Defendants.


JAMES G. CARR, Chief Judge.

This antitrust action arises under §§ 1 and 2 of the Sherman Act. 15 U.S.C. §§ 1 and 2. Plaintiffs, White Mule Company and its owners, L. Steven Ritchey and Deborah K. Ritchey, both individually and as trustees of the L. Steven Ritchey Living Trust and the Deborah K. Ritchey Living Trust [collectively White Mule], allege that defendants, ATC Leasing Company LLC and affiliated corporations [collectively ATC`or ATC Leasing], engaged in numerous antitrust violations in an effort to control the market for delivery of new class six, seven, and eight trucks from manufacturers to customer in North America [Relevant Market One]. White Mule claims that, to achieve this objective, ATC obtained invalid patents and used those patents to exercise and maintain monopsony and monopoly power in the market for the design and manufacture of saddles, decking booms, and other connection devices [Relevant Market Two] used in the delivery of trucks in Relevant Market One.

Plaintiffs also assert state and federal law claims for product disparagement, defamation, unfair competition, and breach of contract. Plaintiffs seek a declaratory judgment regarding the validity of the patents in question. Jurisdiction is proper under 28 U.S.C. §§ 1331, 1337, and 1367.

ATC moves to dismiss the antitrust, Lanham Act, and state law claims [Doc. 44]. Defendants also assert that this court lacks subject matter jurisdiction over the patents in question because ATC has disclaimed those patents, denying them any force or effect.

For the reasons that follow, I grant defendants' motion with regard to the antitrust claims except for those alleging Walker Process attempted monopolization of Relevant Market Two.1 I also grant ATC's motion to dismiss the plaintiffs' request for a declaratory judgment that the relevant patents are invalid and dismiss L. Steven and Deborah K. Ritchey's claims as individuals and trustees.

With regard to the plaintiffs' state tort and Lanham Act claims, I dismiss the Lanham Act claim in its entirety and the product disparagement and defamation claims except to the extent that they relate to ATC's statement that I granted a temporary restraining order against the plaintiffs. I deny the defendants' motion to dismiss plaintiffs' breach of contract claim.


White Mule is an Ohio corporation that manufactures products that other companies use to transport trucks. White Mule's products include saddles, decking booms, and parts for breaking units. L. Steve Ritchey and Deborah K. Ritchey are trustees and beneficiaries of two living trusts which own 100 percent of the outstanding stock of White Mule.

Defendants are a group of companies engaged in the business of transporting trucks across North America. ATC Leasing Company LLC is a subsidiary of codefendant JHT Holdings, Inc., which owns and controls the affiliated defendant companies. The defendant companies operate as a single economic entity under common control.

White Mule's products allow a lead vehicle to transport multiple trucks. Known as decking, this method is the predominant and most economically and technically efficient means of delivering new class six, seven, and eight trucks2 To compete in the truck delivery market, a truck delivery company needs connecting equipment.3 Lack of access to such equipment is a barrier to entry into the market.

ATC Leasing controls over 95% of the market for the transport of new class eight trucks in North America and over 50% of the market for the transport of new class six and seven trucks. Based on 2006 industry figures, ATC also controls at least 79% of the overall market for the transport of new class six, seven, and eight trucks in North America. These market shares probably explain why ATC Leasing is the primary purchaser of White Mule's truck transportation products.

The connecting devices that White Mule sells to ATC are original designs that White Mule created. While ATC has, on several occasions, attempted to find a supplier other than White Mule to provide connecting equipment, it has been unable to do so because no other company can replicate the quality and price of White Mule's connecting equipment. As a result, White Mule is ATC's only source for connecting equipment.

In light of these statistics, White Mule claims that ATC Leasing has illegally monopolized, or attempted to monopolize, Relevant Market One and illegally inonopsonized and monopolized, or attempted to monopsonize and monopolize, Relevant Market Two.4 Plaintiffs allege that defendants tried to prevent new entrants into the truck delivery business by denying potential competitors access to the necessary equipment. As part of this anticompetitive scheme, according to plaintiffs, ATC Leasing filed patent applications falsely taking credit for White Mule's inventions, ultimately obtaining patents covering White Mule's connecting devices. The allegedly fraudulent patents include: 6,109,642 (the '642 patent); 5,722,677 (the '677 patent); and 6,120,051 (the '051 patent).5

White Kule also alleges that, over the years, ATC used its fraudulently obtained patents to drive competitors from the market for delivery of new class six, seven, and eight trucks. Specifically, the patents allowed ATC to control the market for the supply of connecting devices [Market Two]. This control of market two allowed ATC to monopolize (and/or attempt to monopolize) the market for delivery of new class six, seven, and eight trucks [Market One].

As a part of this scheme, ATC eventually tried to prevent White Mule from selling connecting devices to other truck delivery companies. In late 2006, a potential competitor of ATC, hoping to enter the truck delivery market, placed an order with White Mule for connecting devices. This provoked a cease and desist letter from ATC to White Mule. ATC asserted that White Mule was infringing defendants' connecting device patents and demanded that White Mule cease any such infringement.

In conjunction with its cease and desist letter, ATC Leasing pressured White Mule to agree to an exclusive contract whereby White Mule would sell all its connecting devices to ATC and not sell any such devices to ATC's competitors. The contract also required White Mule to acknowledge that ATC had rightful ownership of the connecting device patents. Defendants assured White Mule that, if White Mule entered into the exclusive contract, the cease and desist letter would no longer be a problem. ATC concurrently told White Mule that, if White Mule refused to agree to the exclusive contract, ATC would start a patent infringement suit against White Mule and stop purchasing equipment from White Mule.6

White Mule did not agree to the exclusivity arrangement. Instead, it filed this lawsuit. Defendants responded by: 1) asserting counterclaims for patent infringement regarding the '642 patent; 2) seeking injunctive relief to prevent White Mule from selling connecting devices to any potential competitor of the defendants; 3) presenting false affidavits and evidence to this court; 4) making representations to customers in Relevant Market One to cause such customers to believe that defendants had valid patents on the connecting devices needed to compete in such market and that ATC would prevent White Mule from selling connecting devices to others; 5) refusing to take delivery on pending orders with White Mule; and 6) refusing to pay White Mule for goods White Mule had delivered to defendants.

White Mule alleges that ATC, via this post-suit conduct, sought to maintain control over the market for truck delivery equipment as a means of eliminating any existing or potential competition in the truck delivery market. White Mule points out, for example, that after ATC filed its counterclaims it notified White Mule's customers and certain potential customers that: ATC had received a temporary restraining order enjoining White Mule from selling and/or manufacturing its products; any final decision was years away; and ATC would ultimately prevail on the merits.

According to plaintiffs, these events have caused significant damage to White Mule, including: 1) loss of sales to third parties due to defendants' assertion of the fraudulently obtained patents-in-suit; 2) loss of all sales to defendants as a result of White Mule's refusal to capitulate to defendants' illegal demand that White Mule sell only to them and acknowledge the validity of the fraudulent patents; 3) injury to the` reputation of White. Mule and White Mule's products by suggesting to the market that White Mule's goods infringed valid patents; 4) loss of the sale of the White Mule Company in 2006 to a potential purchaser; and 5) significant attorney's fees and litigation costs in defending against, and ultimately establishing the invalidity of, ATC's fraudulently obtained patents-in-suit. White Mule claims that these damages are "inextricably intertwined with the anticompetitive injury inflicted on both the market to supply the necessary equipment, as well as competition and potential competitors in the truck delivery market." [Doc. 45 at 6].

White Mule asserts the following claims against all defendants: 1) a demand for declaratory judgment regarding defendants' fraudulently obtained patents covering White Mule's connecting devices (Count One); 2) a Walker Process claim for...

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