that AP should move quickly if it plans to get into the ad delivery business because "there is a window of opportunity which AdSat [sic] might close if too much time goes by." PX 2. This statement simply encourages AP to quickly enter a market which AD/SAT might foreclose from competition. Because this statement encourages competition, it cannot be support for a finding of an agreement to restrain competition.
AD/SAT also asserts that Newhouse joined the alleged conspiracy by introducing AdSEND to several major advertisers. Considering that Newhouse is an AP Board member, and considering that he believed AdSEND to be a good product of general benefit to the newspaper industry, his actions are not surprising. More importantly, introducing a new competitor to a market's customers is conduct which the antitrust laws are designed to protect.
In addition, AD/SAT argues that rejection of the group proposal offered by AD/SAT to the Newhouse newspapers in August 1993, see supra part V.A.1.a, is sufficient evidence to allow it to survive Newhouse's summary judgment motion. In his affidavit in opposition to the motion, AD/SAT president Hilton states that Herrick of the Star-Ledger informed him that the decision to reject the group proposal was made by Newhouse. See Hilton Aff. P 38. For several reasons, rejection of the group proposal is insufficient to create a genuine issue of material fact. First, there is direct evidence that decision making within the Newhouse newspapers is made at a local, paper by paper, level. See Declaration of Donald Newhouse PP 5, 7-9. Therefore, group proposals such as this one would not be considered. See id. ; DX 368 at ADS 016353. AD/SAT supplies no evidence in contradiction. Even if the group proposal were considered by the Newhouse newspapers, remembering that it still included substantial affiliation fees for each newspaper, it would be unreasonable to infer a conspiracy to boycott from refusing to accept such a deal. Finally, the fact of the matter is that seven Newhouse papers which were included in the group proposal remain AD/SAT affiliates. Therefore, rejection of the group proposal is not evidence of a concerted refusal to deal.
In its effort to implicate Newhouse in the conspiracy, AD/SAT relies most heavily on his retirement speech at the April 1994 NAA convention. In the speech Newhouse encouraged NAA members to "work with Associated Press and help our cooperative perfect its ability to transmit ads digitally from the advertisers' computer to our computer." PX 535 at 12. In addition, he said that "NAA is working with the Associated Press as AP develops a computer to computer advertising transmission system which will remove a barrier to the use of newspapers." Id. at 21. The speech also stressed the importance of collective action within the newspaper industry. See id. at 17.
Perhaps the most telling aspect of the speech is what it does not contain -- any reference at all to AD/SAT. AD/SAT's opposition papers attempt to imply that AD/SAT was mentioned, if not by name, by quoting a part of the speech where Newhouse says: "We must identify useful technology -- work to perfect it and develop the concepts that most effectively take advantage of it. We must not let our competitors have the advantage of creating the playing field and controlling the gateway." Id. at 15. First, it is not at all clear that this statement was meant to refer to AD/SAT. Because the newspapers are not competitors with AD/SAT, it seems unlikely that the statement would be in reference to AD/SAT. Finally, even if AD/SAT were an intended reference, it at most indicates that the newspaper industry must encourage competition with AD/SAT, not exclude it from the market through a group boycott.
By asking newspapers to work with AP, Newhouse, like NAA and NNN, is simply encouraging and assisting a new competitor in the market. By accepting Newhouse's invitation to work with AP, newspapers are not at the same time agreeing to refuse to deal with AD/SAT. The evidence reveals that papers can use more than one electronic delivery system. See DX 74; Deposition of Richard Atkins at 827-28.
In sum, the evidence provided does not permit the Court to find that the actions of Newhouse in support of AP's development and marketing of AdSEND constitutes participation in a refusal to deal with AD/SAT in restraint of trade. Therefore, the Court grants Newhouse's motion for summary judgment as to the § 1 claim against him. The Court also grants summary as to AD/SAT's § 1 claim against Advance.
Finally, having granted all other defendants summary judgment as to AD/SAT'S § 1 claim, the Court grants AP'S motion for the same relief.
B. AD/SAT's Sherman Act § 2 Conspiracy Claim
Because, as discussed supra part V.A, the Court finds that all defendants lack a rational motivation to conspire, and because the evidence supplied reveals that all defendants had valid, independent reasons for their activities in relation to both AD/SAT and AP, the Court finds that AD/SAT cannot show that the newspapers, NAA, NNN, Newhouse, or Advance had a specific intent to monopolize. See Trans Sport, Inc. v. Starter Sportswear, Inc., 964 F.2d 186, 189 (2d Cir. 1992) (rational trier of fact cannot find § 2 liability if plaintiff offers no evidence to cast doubt on defendant's legitimate business explanations for its action). See Hayden, 879 F.2d at 1019. Therefore, the Court grants summary judgment to all defendants as to AD/SAT's § 2 conspiracy to monopolize claim.
VI. AD/SAT's Motion for Reconsideration
Based upon the reasons stated in this Court's April 24, 1995 Opinion and Order, and based upon this Opinion and Order, AD/SAT's motion for reconsideration of this Court's decision to grant summary judgment to the Lexington Herald-Leader is denied.
For the reasons stated above, AP's motion for summary judgment as to AD/SAT's Sherman Act § 2 claims against it is GRANTED. The summary judgment motions of all defendants as to AD/SAT's Sherman Act §§ 1 and 2 conspiracy claims are GRANTED. AD/SAT's motion for reconsideration is DENIED. The actions are DISMISSED.
New York, New York
February 29, 1996
Peter K. Leisure
LEISURE, District Judge:
On December 11, 1995, plaintiff AD/SAT filed a motion, pursuant to Fed. R. Civ. P. 15(d), for leave to file a first supplemental complaint. This motion was filed while the summary judgment motions of all defendants were sub judice. On December 19, 1995, this Court issued an order stating that it would not consider plaintiff's motion to supplement its complaint until after a decision was rendered in the summary judgment motions. Having granted the summary judgment motions of all defendants in their entirety, for the following reasons, the Court now denies AD/SAT's motion for leave to file a first supplemental complaint.
Rule 15(d) of the Federal Rules of Civil Procedure provides, in relevant part: "Upon motion of a party the court may, upon reasonable notice and upon such terms as are just, permit the party to serve a supplemental pleading setting forth transactions or occurrences or events which have happened since the date of the pleading sought to be supplemented." The decision to grant or deny a motion pursuant to Rule 15(d) rests within the discretion of the District Court. See Quaratino v. Tiffany & Co., 71 F.3d 58, 66 (2d Cir. 1995). "Absent undue delay, bad faith, dilatory tactics, undue prejudice to the party to be served with the proposed pleading, or futility, the motion should be freely granted." Id. (emphasis added) (citing Foman v. Davis, 371 U.S. 178, 182, 9 L. Ed. 2d 222, 83 S. Ct. 227 (1962).
AD/SAT requests leave of the Court to add three additional subparagraphs to paragraph 29 of its First Amended Complaint (the "Complaint"). Paragraph 29 of the Complaint delineates "the means and conduct employed by Associated Press and its coconspirators to accomplish said monopolization, attempt to monopolize, and conspiracy to monopolize and restrain trade unreasonably, known at this time to AD/SAT, includes at least the following." See First Amended Complaint P 29. The three supplemental subparagraphs all provide information on events which allegedly occurred after AD/SAT filed its opposition papers to defendants' motions for summary judgment.1a F i r s t , subparagraph 29(j) accuses AP of unlawful activity by refusing to renegotiate a contract which charges AD/SAT $ 730,000 annually for use of its satellite network. As noted in the Opinion and Order of this Court granting defendants' motions for summary judgment (the "Opinion and Order"), AD/SAT provides no evidence that the price AP charges AD/SAT to use its satellite network is anticompetitive. See Opinion and Order Granting Defendants' Motions for Summary Judgment at n.18. In addition, because the relevant market in this case is the delivery of ads by any means, even if AP were charging AD/SAT monopoly prices for access to its satellite network, competition would not be harmed. See id. Therefore, allowing AD/SAT to supplement its complaint with subparagraph 29(j) would be futile.
Proposed subparagraph 29(k) lists over fifteen small market newspapers which have taken adverse action to AD/SAT since July 13, 1995, the date which AD/SAT filed its papers in opposition to defendants' summary judgment motion. The Court notes that none of these newspapers are defendants in this action. All of the defendants in this action supplied valid independent reasons for taking action adverse to AD/SAT. Because AD/SAT, in attempting to support its antitrust conspiracy claims, did not provide evidence tending to exclude the possibility that defendants' actions were independent, see Monsanto Co. v. Spray-Rite Service Corp., 465 U.S. 752, 768, 79 L. Ed. 2d 775, 104 S. Ct. 1464 (1984), the Court granted summary judgment to all defendants. Because supplementing the Complaint with this subparagraph would not cure AD/SAT's failure to provide such evidence, it would be futile.
Proposed subparagraph 29(l) states that since the filing of AD/SAT's opposition papers to defendants' motions, "various newspapers, acting as part and in furtherance of the conspiracy . . . have advised and instructed advertisers not to do business with AD/SAT, and to transfer business and to do business with AP AdSEND." Pl's. Mem. at 5. However, none of the newspapers listed in proposed subparagraph 29(l) are defendants in this action. Again, because this subparagraph would not alter the Court's finding that, as to the defendants in this action, AD/SAT has failed to provide evidence that tends to exclude the possibility of independent action, see Monsanto, 465 U.S. at 768, supplementing the Complaint with this evidence would be futile.
Because it would be futile for AD/SAT to supplement the Complaint with proposed subparagraphs 29(j)-(l), the Court denies AD/SAT's Rule 15(d) motion. For the reasons stated in the Opinion and Order, the actions are dismissed.
New York, New York
February 29, 1996
Peter K. Leisure