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Triple M Roofing Corp. v. Tremco Inc.

January 18, 1985

TRIPLE M ROOFING CORP., PLAINTIFF-APPELLANT,
v.
TREMCO, INC., DEFENDANT-APPELLEE



Appeal from a summary judgment entered in the United States District Court for the Eastern District of New York (Leonard D. Wexler, District Judge) dismissing appellant's claims pursuant to § 4 of the Clayton Act, 15 U.S.C. § 15 (1982), alleging violations of Section 1 and 2 of the Sherman Act, id. §§ 1, 2.

Feinberg, Chief Judge, Kaufman and Rosenn,*fn* Circuit Judge.

Author: Kaufman

KAUFMAN, Circuit Judge

Triple M Roofing Corp. ("Triple M") appeals from a judgment of the United States District Court for the Eastern District of New York dismissing its action alleging violations of Sections 1 and 2 of the Sherman Act. 15 U.S.C. §§ 1, 2 (1982). Triple M claimed that Tremco, Inc. ("Tremco") had attempted to monopolize the sales of roofing materials for a roof restoration project of the Georgia Department of Agriculture (the "Department") by urging the Department to name Tremco products in the contract specifications. It was also alleged that Tremco conspired with Triple M's competitors, as well as with Department officials, to inflate the price of Tremco brand restaurant coatings. The district court concluded that Triple M had defined the relevant market too narrowly to support a Section 2 claim, and failed to allege facts concerning any arrangement Tremco might have had with Department officials that would constitute a Section 1 violation. We affirm.

The antitrust laws were never intended to provide a balm for the hardships occasioned by vigorous competition. Mindful of this precept, courts have invested tremendous time and energy in attempting to confine the necessarily vague and potentially expansive notions embodied in the language of the antitrust influences-both substantive and procedural-and conclude that a dispute arising from an ordinary construction contract does not implicate the economic and judicial concerns contemplated by the Sherman and Clayton Acts.

We hold that the district court properly found Section 2 of the Sherman Act inapplicable to activities occurring solely in the context of a single transaction. We also conclude the Triple M lacked proper standing, and could not assert appropriate antitrust injuries to recover damages stemming from the alleged conspiracy between Tremco and Triple M's rivals. With respect to the alleged conspiracy between Tremco and officials from the Department, we conclude that although Triple M possessed adequate standing to recover damages, the record fails to establish that an unlawful arrangement existed.

Before discussing the relevant principles of antitrust law, we believe they will come into sharper focus if we briefly set forth the underlying facts and procedural history of this dispute.

I. Background

a.

Defective roofs are generally repaired by removing and replacing the entire roof. A less common method of restoration, accounting for less than 10% of the sales of roof repair products, is the application of various restaurant coatings. Tremco manufactures these materials. In 1980, Tremco's share of the national market for restaurant coating was 20%. Because the use of this coating pales by comparison to the conventional "remove and repair" method, Tremco's share of the entire roof repair market was a mere 1.8%.

In an effort to garner a larger share of the overall market, Tremco promoted its products through a subtle combination of education and salesmanship. Newsletters extolling the virtues of restaurant coatings in general, and Tremco products in particular, were mailed to owners and managers of commercial real estate throughout the United States. When a property was identified as requiring roof repairs, a Tremco representative would call on an authorized representative and offer to inspect the building in question. The goal of these visits, of course, was to convince owners to recoat - rather than replace-their roofs, and, more importantly, to specify the use of Tremco products. To this end, Tremco representatives routinely supplied potential buyers with sample job specifications to be incorporated into the specifications that were ultimately employed in roofing jobs open to bids by contractors.

Most commonly, Tremco products were not purchased by property owners, but rather by roofing contractors hired by the owners. In cases where the contract between owner and contractor specified that only Tremco products could be used, Tremco charged rates by reference to its published price list. Where the contract permitted substitution of a competing restaurant product, however, Tremco often charged prices well below the published figures. Occasionally, these discounts amounted to as much as 40 percent of list price.

b.

The Department owns and operates a complex of buildings in Atlanta know as the Farmers Market. The task of planning the restoration of the roofs of these buildings was assigned to J. Broome, a Department engineer. In assessing possible cost-cutting techniques, Broome contacted Tremco to discuss the possibility of resaturating and repairing the roofs rather than replacing them. Broome had earlier been made aware of the method of restoration through Tremco's promotional literature and through a series of telephone conversations with Robert Helman, one of Tremco's field representatives. At Broome's invitation, Helman examined the Department's buildings and offered advice regarding ...


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