market in which to assess the alleged anti-competitive acts, the Court cannot rule as a matter of law as to any of Tower's claims. For this reason, the Court must deny Federal Express's motion, considered here as a motion for summary judgment.
Even if the Court could resolve the facts and rule as to the relevant market, however, a significant number of disputed facts exist as to the other elements of Tower's claim that would preclude granting Federal Express's motion.
B. Claim XII and Claim XIII-Restraint of Trade
A plaintiff alleging a § 1 violation must allege concerted action by two or more persons that unreasonably restrains interstate or foreign trade or commerce. In re NASDAQ Market-Makers Antitrust Litig., 894 F. Supp. 703, 710 (S.D.N.Y. 1995. Thus, a complaint alleging a conspiracy in violation of the Sherman Act must identify co-conspirators and describe the nature and effects of the alleged conspiracy or combination. Reiter's Beer Distrib. v. Christian Schmidt Brewing, 657 F. Supp. 136, 142 (E.D.N.Y. 1987); International Television Prods. Ltd. v. Twentieth Century-Fox Television Div. of Twentieth Century-Fox Film Corp., 622 F. Supp. 1532, 1537 (S.D.N.Y. 1985).
1. Concerted Action
A plaintiff claiming an antitrust conspiracy must first establish either a combination or some form of concerted action between at least two legally distinct economic entities. It is essential to any claim in restraint of trade to establish the existence of an agreement between two or more independent entities. Disenos, 676 F. Supp. at 1280. A unilateral or independent act does not create conspiratorial liability under the Sherman Act. Apex Oil Co. v. DiMauro, 822 F.2d 246, 257 (2d Cir.), cert. denied, 484 U.S. 977 (1987); Capital Imaging Assocs. v. Mohawk Valley Med. Assocs., 996 F.2d 537, 542 (2d Cir.), cert. denied, 510 U.S. 947, 126 L. Ed. 2d 337, 114 S. Ct. 388 (1993).
Although the parties do not dispute the existence of either the JV Agreement or the Supplemental Agreements, Federal Express claims that Tower has failed to meet this requirement because it only identified Federal Express as a conspirator. Deft's Motion at 18. In International Television Prods., however, the district court found that where the complaint named the two parties to an agreement and specified the content of the agreement, there could be no question that there was sufficient notice as to the identity of the co-conspirators. 622 F. Supp. at 1537. In the present case, the complaint sets forth at least three potential co-conspirators along with Federal Express. Tower refers to and provides excerpts from alleged "secret" agreements between Federal Express and Northwest (Complt. P 89), Pan Am (Complt. P 90) and UPS (Complt. P 91). Tower also alleges that Federal Express made secret agreements with Delta, TWA and United (Complt. P 92).
The Second Circuit has found, however, circumstances with respect to an alleged conspiracy to restrain trade must be such as to warrant a finding that conspirators had a unity of purpose or a common design and understanding, or a meeting of minds in an unlawful arrangement. Int'l Dist. Ctrs. v. Walsh Trucking Co., 812 F.2d 786 (2d Cir.), cert. denied, 482 U.S. 915, 96 L. Ed. 2d 676, 107 S. Ct. 3188 (1987) (citations omitted). In its opposition papers, Tower suggests that "Northwest appears to have knowingly aided in and accepted the benefits of the Federal Express's web of secret agreements, as evidenced by the terms of its secret agreement with Federal Express where the two carriers agreed to divide the CRAF market, mobilization value points, and Pan Am commissions." Pl's Opposition and Complt. P 89. At this point, however, the Court cannot rule as a matter of law on the undisputed facts that any of the other parties had the requisite intent to achieve an unlawful objective.
Federal Express also contends that the other joint venturers cannot be considered co-conspirators where they function as a single economic unit.
Deft's Motion in Support of Its Motion to Dismiss, at 20 (citing Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 771, 104 S. Ct. 2731, 81 L. Ed. 2d 628 (1984)). Joint ventures may operate lawfully if there is sufficient economic integration among the members. The Supreme Court in Arizona v. Maricopa County Medical Society, 457 U.S. 332, 102 S. Ct. 2466, 73 L. Ed. 2d 48 (1982) suggested that competitors who form a joint venture must pool resources and capital, as well as share in the risks of profit and loss. 457 U.S. at 356, 102 S. Ct. at 2479. In addition, the Federal Acquisition Regulations set out the various types of economic interests that are acceptable in such arrangements, including the ability to complement each other's unique capabilities and to offer the government the best combination of performance, cost, and delivery for the product being acquired and provide that contractor team arrangements may not exist in violation of antitrust statutes. 48 C.F.R. § 9.602.
Tower asserts that the joint venture here did not form a single economic unit and therefore the members could be considered co-conspirators and violate the antitrust laws. First, the JV Agreement, and an operating agreement related to the JV Agreement, prohibited the pooling of capital and sharing of the risks of profit or loss. Each party was required to indemnify the other parties, to be solely liable for claims arising from its performance under the MAC Contract and to obtain at its own expense insurance to cover such liabilities.
As to the element of concerted action, therefore, the Court finds that there continues to be disputed issues of material fact that preclude ruling as a matter of law on this issue.
2. The Agreement Unreasonably Restrained Trade
Restraints imposed by an agreement between competitors are denominated as horizontal restraints, while those imposed by agreement between firms at different levels of distribution are vertical restraints. Business Electronics Corp. v. Sharp Elecs., 485 U.S. 717, 730, 108 S. Ct. 1515, 1522-23, 99 L. Ed. 2d 808 (1988). As noted above, competitors at the same level can lawfully combine if there is sufficient economic integration. In this case, "contractor team arrangements" are specifically provided for in the Federal Acquisition Regulations and under the solicitation for the MAC Contract. See 48 C.F.R § 9.601.
Moreover, side agreements to joint ventures can operate lawfully as well. Restraints collateral to but necessary for the implementation of a lawful agreement, and which are no broader in scope than necessary to accomplish the purpose of the agreement, are termed "ancillary." Eger, supra, at 613. This doctrine was first advanced nearly a hundred years ago in United States v. Addyston Pipe & Steel Co., 85 F. 271, 282 (9th Cir. 1898), aff'd, 175 U.S. 211, 44 L. Ed. 136, 20 S. Ct. 96 (1899). Then Circuit Judge Taft found that:
no conventional restraint of trade can be enforced unless the covenant embodying it is merely ancillary to the main purpose of a lawful contract, and necessary to protect the covenantee in the enjoyment of the legitimate fruits of the contract . . . . [To be lawful,] the contract must be one in which there is a main purpose, to which the covenant in restraint of trade is merely ancillary.