Facts

Plaintiff Jensen Enterprises Inc. and defendant Oldcastle Inc. both manufacture and sell precast concrete vaults that are used by telephone companies to connect homes and businesses to the existing landline network. These vaults are sold both to developers, who then sell them to telephone service providers, and also directly to telephone service providers.

From late 2000 to November, 2002, defendant AT&T, the telephone service provider for most of California and Nevada, attempted to negotiate a procurement contract with Jensen, and it had simultaneous negotiations with Oldcastle and one other supplier. Under the proposed contract, the supplier would become the primary supplier of AT&T vaults, making direct sales to AT&T. Jenson refused the contract, stating that the provisions were one-sided.

In 2002, Oldcastle accepted a contract with AT&T that was similar to the one offered to Jensen. The contract, as understood by all parties, provided that AT&T would buy most of the vaults installed in California directly from Oldcastle, and not developers. AT&T then established a policy of requiring developers to use Oldcastle vaults.

Jensen filed suit against Oldcastle and AT&T alleging antitrust violations. The District Court overruled the defense's first round of motions for summary judgment, finding that Jensen had raised triable issues of fact on market definitions, antitrust conspiracy, and antitrust injury.

PLAINTIFF'S CONTENTIONS:
Jensen claimed that Oldcastle and AT&T conspired to exclude other sellers from the relevant markets in California and Nevada. Jensen alleged that AT&T's policy, requiring developers to use Oldcastle vaults, was established at the same time that the procurement contract with Oldcastle was entered into. Jensen argued that this contention was supported by the unqualified admission of AT&T's designated witness. Jensen further alleged that the prices that Oldcastle offered in the contract were below-market prices, and that AT&T principally used this price list not to make purchases from Oldcastle, but rather to set its reimbursement rates to developers for the vaults such that it forced them to purchase from Oldcastle. Further, Jensen alleged that the agreement between Oldcastle and AT&T gave Oldcastle a monopoly in selling vaults to the "captive" developers.

DEFENDANTS' CONTENTIONS:
The defense claimed that AT&T's reimbursement rates differed by region, and that in many regions the rates had no connection to Oldcastle contract prices. The defense also contended that there was no antitrust violation because there was no harm to competition in the alleged vault market, and that Jensen could not prove it suffered antitrust injury.

Result

The court granted summary judgment for the defendants. In light of the undisputed fact that Oldcastle did not charge developers supra-competitive prices for vaults, any alleged injury to competition arose from alleged regulatory misconduct by AT&T in reimbursing developers and not from an antitrust violation. The court also ruled that Jensen could not prove it had suffered antitrust injury because if AT&T had designated Oldcastle as exclusive supplier while reimbursing developers-which Jensen admitted would be lawful-Jensen would have suffered the same harm of lost profits due to legal exclusion from the market. Jensen has appealed the case to the Ninth Circuit Court of Appeals.