Brief, p. 13. This argument is rejected.
Generally speaking, a private plaintiff seeking injunctive relief must show a threat of "injury of the type the antitrust laws were intended to prevent and that flows from that which makes the [practice] . . . unlawful." Cargill v. Monfort of Colorado, Inc., 479 U.S. 104, 109, 93 L. Ed. 2d 427, 107 S. Ct. 484 (1986); Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 50 L. Ed. 2d 701, 97 S. Ct. 690 (1977). In this case, plaintiffs assert they have suffered the loss of business opportunities flowing from conduct of the defendants aimed at eliminating competition. Defendants have argued broadly that plaintiffs must be the proper party to seek relief. Cargill, 479 U.S. at 110, n. 5 (citing Associated General Contractors of California, Inc. v. California State Council of Carpenters, 459 U.S. 519, 74 L. Ed. 2d 723, 103 S. Ct. 897 (1983)). The antitrust laws are designed to protect competition, not a particular competitor. Brunswick, 429 U.S. at 488; Brown Shoe Co. v. United States, 370 U.S. 294, 320, 8 L. Ed. 2d 510, 82 S. Ct. 1502 (1962).
Defendants cite several cases for the proposition that, where a plaintiff fails to show a proscribed effect upon competition, courts consistently deny standing to assert a claim under the antitrust laws. The Third Circuit addressed the issue of antitrust standing in Gregory Marketing Corp. v. Wakefern Food Corp., 787 F.2d 92 (3d Cir.), cert. denied, 479 U.S. 821, 93 L. Ed. 2d 40, 107 S. Ct. 87 (1986). Standing was found not to exist in that case because the plaintiff was "neither a consumer nor a competitor in the . . . market, and thus not within the area of the economy endangered by the breakdown of competitive conditions." Id. at 95.
Under the foregoing authority, plaintiffs appear to have standing to assert the antitrust claims in this case. Plaintiffs are claiming injury from the anticompetitive effect -- the exclusion of plaintiffs as competitors to defendants in the sale of Reese Foods products -- that the antitrust laws are intended to prevent. Plaintiffs, moreover, have cited several cases finding that standing exists when antitrust plaintiffs are directly injured by the anticompetitive behavior of their competitors. See, e.g., Aspen Highlands Skiing Corp. v. Aspen Skiing Co., 472 U.S. 585, 86 L. Ed. 2d 467, 105 S. Ct. 2847 (1985); Klor's v. Broadway-Hale Stores, 359 U.S. 207, 3 L. Ed. 2d 741, 79 S. Ct. 705 (1959); USA Petroleum Co. v. Atlantic Richfield Co., 859 F.2d 687 (9th Cir. 1988); Pa. Dental Ass'n v. Medical Service Ass'n of Pa., 815 F.2d 270 (3d Cir. 1987), cert. denied, 484 U.S. 851, 108 S. Ct. 153, 98 L. Ed. 2d 109 (1987); Englert v. City of McKeesport, 640 F. Supp. 1329 (W.D. Pa. 1986).
II. The Relevant Market
Before considering the merits of certain of plaintiffs' antitrust claims,
the relevant product and geographic markets by which to judge the alleged violations of the Sherman Act must be determined. Brown Shoe Co., Inc. v. United States, 370 U.S. 294, 324, 8 L. Ed. 2d 510, 82 S. Ct. 1502 (1962); United States v. E.I. du Pont de Nemours & Co., 351 U.S. 377, 391-93, 100 L. Ed. 1264, 76 S. Ct. 994 (1956); Fleer Corp. v. Topps Chewing Gum, Inc., 658 F.2d 139, 145 (3d Cir. 1981), cert. denied, 455 U.S. 1019, 72 L. Ed. 2d 137, 102 S. Ct. 1715 (1982); Berkey Photo, Inc. v. Eastman Kodak Co., 603 F.2d 263, 268 (2d Cir. 1979); Hudson's Bay Co. v. American Legend Cooperative, 651 F. Supp. 819, 834 (D.C.N.J. 1986). In this regard "the search for'the relevant market[s]' must be undertaken and pursued with relentless clarity." United States v. Grinnell Corp., 384 U.S. 563, 587, 16 L. Ed. 2d 778, 86 S. Ct. 1698 (1966) (Fortas, Jr. dissenting). The burden to establish the relevant markets is ordinarily on the plaintiffs. Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172, 177-78, 15 L. Ed. 2d 247, 86 S. Ct. 347 (1965); Neumann v. Reinforced Earth Co., 252 U.S. App. D.C. 11, 786 F.2d 424, 429 (D.C.Cir.), cert. denied, 479 U.S. 851, 93 L. Ed. 2d 116, 107 S. Ct. 181 (1986); American Bearing Co., Inc. v. Litton Industries Inc., 729 F.2d 943, 949 (3d Cir.), cert. denied, 469 U.S. 854, 83 L. Ed. 2d 112, 105 S. Ct. 178 (1984).
A product market will be broader where there are viable substitutes for the product in question and will be narrower where the product is unique or cannot be substituted. The broader the product market (and the greater the number of competitors) the less defendants are apt to have a dominant market position in it. Accordingly, the defendants in antitrust suits invariably argue that the products in question are not unique and have many substitutes.
The importance of evaluating both reasonable interchangeability of use and "cross-elasticity of demand" of various specialty food products produced in the United States and elsewhere, in the delineation of the relevant product market, has been establish Brown Shoe Company, 370 U.S. at 325. In this context, ". . . 'reasonable interchangeability of use or the cross-elasticity of demand,' determines the boundaries of a product market." Grinnell Corp., 384 U.S. at 592-93 (Fortas, J., dissenting). In determining the cross-elasticity of demand and interchangeability of use among various food products, the responsiveness of the sales of one product to price changes or supply of another must be weighed. See, SmithKline Corp., 427 F. Supp. 1089, 1115 (E.D. Pa. 1976).
The availability of supply (of interchangeable goods) from various suppliers is a restraint on any producer of an item from increasing prices above the competitive level. Accordingly, as mentioned, the definition of a relevant market is based upon a determination of available substitutes.
To define a market in product and geographic terms is to say that if prices were appreciably raised or volume appreciably curtailed for the product within a given area, while demand held constant, supply from other sources could not be expected to enter promptly enough and in large enough amounts to restore the old price or volume.