- within Insolvency/Bankruptcy/Re-Structuring topic(s)
On April 23, 2004, the United States District Court for the Middle District of Florida partially granted defendant aircraft manufacturer's motion to dismiss on the grounds that, although plaintiffs stated a relevant market, neither a company's officers nor an employee of its competitor, could enter into a conspiracy to monopolize.
In Lockheed Martin Corp. v. Boeing Co., 2004 WL 869369 (M.D. Fla. 2004), Lockheed Martin sued Boeing, and three of Boeing's employees, (one of whom formerly worked for Lockheed), claiming that the former employee stole trade secrets related to a bid competition to provide the U.S. Government space launch capability. Lockheed alleged that this theft violated the RICO and Sherman Acts.
Lockheed and Boeing competed in a bid process related to the Evolved Expendable Launch Vehicle ("EELV") Program, an Air Force Program that seeks assistance from private contractors to develop a cost-efficient national space launch capability. Lockheed alleged that Boeing, and its employees Erskine, Satchell, and Branch intended to obtain monopoly power for Boeing by acquiring and using Lockheed's trade secrets in preparation for Boeing's EELV bid.
Under Spectrum Sports, in order to state a claim for attempted monopolization under the Sherman Act, a plaintiff must allege facts that, if proven, would satisfy his burden at trial to prove that (1) the defendant has engaged in predatory or anticompetitive conduct; (2) with specific intent to monopolize; and that there is a dangerous probability that defendant will achieve monopoly power. Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 456 (1993). This third element requires a two part showing that a defendant is close to acquiring controlling market power over the relevant market. U.S. Anchor Mfg., Inc. v. Rule Indus., Inc., 7 F.3d 986, 994 (11th Cir. 1993). Defendant Boeing challenged Lockheed's allegations of the relevant market and of Boeing's proximity to acquiring a controlling market share.
Lockheed alleged that the outer boundary of the relevant product, or relevant service market, is the world EELV market because EELV's are highly complex, and there are no other technological substitutes. Boeing did not dispute this world market definition. Alternatively, Lockheed argued that the U.S. Government EELV market was a relevant market because the U.S. Government can purchase only from domestic suppliers and would be the victim of reduced innovation and higher prices if one of its potential suppliers had a "monopoly" on the government's purchases. The Court rejected the limitation to the U.S. market because it was not persuaded that the characteristics of purchasers, other than their demands, should define the relevant market.
After defining the relevant market as the worldwide market for EELV products, the Court noted that Lockheed's Complaint did not include any allegations about Boeing’s relative share of the worldwide commercial EELV market. The Court noted that such allegations would be the minimum required to survive a motion to dismiss. The Court concluded that because the U.S. Government EELV market was not the relevant market, and because Lockheed failed to allege facts related to Boeing's market power in the worldwide commercial EELV market, the attempted monopolization claims were dismissed.
Lockheed had also alleged that Boeing and its employees conspired to monopolize the U.S. Government EELV market. Because this was not the relevant market, the Court dismissed Lockheed's claims. The Court found, alternatively, that the Copperweld doctrine, which holds that employees cannot conspire with their employer, barred Lockheed's claims against the individual Boeing employees. As such, the Court granted defendants' motions to dismiss as to the antitrust claims.
If Lockheed had developed additional facts as to a worldwide product market, including Boeing’s share within that market, then its claims may have survived. Indeed, the relevance of a world market for EELV was largely responsible for the Court's dismissal of Lockheed's claims.
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