ZF Meritor LLC v. Eaton Corp., No. 11-3301 (3d Cir. 2012)Annotate this Case
There are four direct purchasers of heavy duty truck transmissions in North America. Truck buyers dealing with those direct purchasers can select many of the components for their trucks, including transmissions, from catalogues called data books. Data book positioning is significant to likelihood that a buyer will choose a particular component. Eaton is a monopolist in the market for such transmissions. ZF-Meritor entered the market in 1989; otherwise no significant external supplier has entered the market in 20 years. ZF-Meritor sued Eaton, alleging anticompetitive practices embodied in long-term agreements between Eaton and every direct purchaser, including provisions relating to data books. A jury found Sherman Act and Clayton Act violations. The district court reasoned that notwithstanding Eaton‘s above-cost prices, there was sufficient evidence to establish long-term de facto exclusive dealing arrangements, which foreclosed a substantial share of the market and harmed competition. The Third Circuit affirmed. The claims are not subject to the price-cost test, but must be analyzed as de facto exclusive dealing claims under the rule of reason. There was sufficient evidence that Eaton engaged in anticompetitive conduct and of resulting antitrust injury. The court vacated an injunction, finding that plaintiffs lacked standing to pursue injunctive relief.