USCA1 Opinion

October 11, 1996

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT

________________________

No. 96-1113

BORSCHOW HOSPITAL AND MEDICAL SUPPLIES, INC.,

Plaintiff - Appellant,

v.

CESAR CASTILLO, INC., ET AL.,

Defendants - Appellees.

________________________

ERRATA SHEET
ERRATA SHEET

The

opinion of this court

issued on September

23, 1996 is

corrected as follows:

On page 3, line 9, change Borschow to Becton Dickinson.

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT
____________________

No. 96-1113

BORSCHOW HOSPITAL AND MEDICAL SUPPLIES, INC.,

Plaintiff - Appellant,

v.

CESAR CASTILLO INC., ET AL.,

Defendants - Appellees.

____________________

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

[Hon. Salvador E. Casellas, U.S. District Judge]

___________________

____________________

Before

Selya, Circuit Judge,

_____________
Torres* and Saris,** District Judges.
_______________

_____________________

Fernando L. Gallardo,
____________________
Woods, Woods & Woods
_____ _____________

with whom Harry E. Woods, Geoffrey M.

______________ ___________

and Carlos R. Iguina-Charriz were

________________________

on brief

for appellant.

Donald R. Ware, with whom Richard M. Brunell and Foley, Hoag

______________
__________________
___________
& Eliot were on brief for appellee Becton Dickinson and Company.
_______
Edilberto Berr os-P rez
________________________
appellees C sar Castillo, Inc.,
Ivonne Belaval

and

Luis
Fern ndez-Ram rez
________________________

Umeco, Inc., Jos

de Castillo, C sar Castillo,

Luis Castillo,

Jr., Aracelis Ortiz

de Castillo and Mar a Isabel Gonz lez.

____________________

September 23, 1996

____________________

**

Of the District of Rhode Island, sitting by designation.

Of the District of Massachusetts, sitting by designation.

-2-

for

____________________

-3-

SARIS,
SARIS,

District
District

Judge.
Judge.

Plaintiff-Appellant Borschow

_______________

Hospital

medical

& Medical Supplies, Inc. is a

and surgical

products

Becton Dickinson and Company,

that

278,

additional

distributorships

exclusive

Distributorship

Distributorship

provision

and

also commonly

Agreement

supplied by

Defendant-Appellee,

in Puerto Rico.

Becton Dickinson violated

L.P.R.A.

distributor of a line of

Borschow claims

the Puerto Rico

known as

in

"Law 75,"

violation

of

Agreement.1

contained

integration clause,

Dealers Act, 10

by granting

its

allegedly

Although

clear

Borschow

the

non-exclusivity

contends

that the

district court erred under Puerto Rico's parol evidence rule when

it

excluded an

signing of the

unsigned

written memorandum

agreement as evidence

sent prior

that the parties

intended the distributorship to be exclusive.

to the

actually

Borschow also

an

claims that Becton Dickinson

unlawful tying arrangement in

Sherman

supply

Act,

of a

Borschow

15 U.S.C.

line of

also carried

1,

engaged in

violation of Section

by

its products

threatening to

(the tying

its syringe line

1 of the

discontinue a

products) unless

(the tied

product) and

dropped that of a competitor.

____________________

The additional

Appellees

distributorships were granted

Cesar Castillo, Inc.

separate brief.

At oral argument,

the Appellees as a group.

the course
Appellees

and UMECO,

group

Inc., which

filed a

Becton Dickinson argued

for

Where we refer to Becton Dickinson in

of this opinion, we
as

to Defendants-

mean our statements to

except

where

otherwise

apply to

indicated.

Similarly, to avoid confusion where referring to the testimony of

Jonathan

Borschow, Borschow's president, we will refer to him as

Mr. Borschow and to the company simply as Borschow.

-2-

The district court granted summary judgment for Becton

Dickinson on both claims.

I.
I.

We affirm.

STATEMENT OF THE CASE

STATEMENT OF THE CASE

A. Facts
A. Facts

Reviewing

the

factual

record

in

the

light

most

favorable to the nonmoving party, as we must at summary judgment,

see

Mesnick v.

General Elec. Co.,

950 F.2d 816,

822 (1st Cir.

___

_______

1991),

facts

_________________

cert. denied, 504 U.S. 985 (1992), we treat the following

____________

as controlling,

noting,

however,

that Bectin

Dickinson

disputes many aspects of this account.

A major

supplier of

medical products in

Puerto Rico,

Borschow contracted with Parke Davis & Company ("Parke Davis") on

May 1, 1985 to distribute a line of medical and surgical products

manufactured

by

"Deseret Line").

and

assumed

agreement as

its

In

Parke

subsidiary,

Deseret

Medical,

Inc.

(the

mid-1986, Becton Dickinson acquired Deseret

Davis' obligations

an assignee.

under

the

This dispute turns in

distribution

large part on

the content of that agreement.

The

Parke

distribution

agreement executed

Davis ["Distribution Agreement"],

by

Borschow and

includes two provisions

of

interest here.

Davis]

hereby

Distributor

First, it provides that "Company [i.e., Parke

appoints

hereby

Distributor [i.e.,

accepts

appointment,

nonexclusive independent distributor of the

____________

Business

this

Borschow]

as

the

and

the

Company's

Products for Regular

in the Territory [i.e., Puerto Rico] during the term of

Agreement."

Distribution

-33

Agreement,

2.1.2 (emphasis

added).

Second, the

contract included the following integration

clause:

Integration:
___________
in

this

The terms and

Agreement,

attached hereto and

Conditions of

to

Schedules

Company's Standard Terms

and

time to time,
is the final

of intent between the Parties relating

previous

matter hereof and

communications,

agreements,

subject

all

entire agreement and

the subject

written,

including

Sale in effect, from

constitute the
expression

provisions contained

and

representations,

understandings,

between the Parties

matter

supersede, all

either oral

or

with respect to the

thereof.

No

agreement

understanding varying or extending

or

this Agreement

will be binding upon either Party hereto unless in

writing,

wherein

referred

to,

officers

or

and

this Agreement
signed

by

representatives

is specifically
duly

of

the

authorized
respective

Parties.

Id.
___

9.10.

Borschow's president,

Jonathan Borschow, initially

refused

to sign

provision.

any

contract that

However, in

Distribution

non-exclusivity

negotiations prior to

Agreement,

Robert

Vallance,

Director for Canada/Latin America,

distributorship would

included a

be exclusive.

execution of the

Deseret's

Regional

assured Mr. Borschow that his

Vallance

promised him that

he would receive a letter from Parke Davis promising exclusivity.

When

that letter

Vallance

and

Borschow

that

was not

inquired

the

forthcoming, Mr.

about

people

the delay.

in "Morris

Borschow telephoned

Vallance

Plains,"

the

told

Mr.

corporate

headquarters of Warner Lambert, Parke Davis' parent company, were

considering the matter.

After that conversation, Mr. Borschow

received a draft

of the Distribution Agreement, which included the non-exclusivity

term.

He

again

objected to

Vallance

but was

told

that the

-44

"contract cannot, it

Plains

will not

will not be changed.

countenance it."

However,

The people in Morris

Vallance reassured

Mr. Borschow that he would send a document that would outline the

"true" basis for their business relationship, including a promise

that Borschow's distributorship would be exclusive.

Within a matter of

page undated and

one

days, Mr. Borschow received a

unsigned outline.

two-

The outline specifies

that

of the supplier's obligations is to "sell exclusively to the

DISTRIBUTOR

and refrain

clients in the

from selling

to other

territory while the AGREEMENT is in effect."

outline neither

explicitly mentions Mr. Borschow

nor

the

refers

testified

to

DISTRIBUTORS or

that

May

he

Distribution

executed

the

The

or Parke Davis

Agreement.

Distribution

Borschow

Agreement

approximately two weeks after he received the outline.2

Borschow

From the

execution of the

remained

Parke

Deseret line.

in

mid-1986, no

agreement in 1985

Davis' exclusive

to 1986,

distributor

After Becton Dickinson's acquisition of

changes

were made

in

the relationship

of

the

Deseret

until

November 1989, when Becton Dickinson granted distributorships

to

UMECO, Inc.

and C sar Castillo, Inc.

Moreover, according to Borschow and his salespeople, at

approximately the same time that the additional distributors were

____________________

At

Mr.

Borschow's

deposition,

the

parties

marked

the

Distribution Agreement as BDX-1 and the undated outline as BDX-3,

and throughout its
those numbers.

brief Appellant

refers to

the documents

by

To avoid confusion, however, the Court will refer

to BDX-1 and BDX-3 as the Distribution Agreement and the Outline,

respectively.

-55

established

in November

Borschow cease

made by

1989,

a Becton Dickinson

competitor, and

that

& Needle Line,

begin carrying

the

Becton Dickinson also threatened

Borschow did not meet this demand, it would no longer be

supplied with

the Deseret line.

not carry through on

drop

Dickinson demanded

distributing the Monoject Syringe

Becton Dickinson syringe line.

that if

Becton

Monoject,

this threat.

Becton

However, Becton

Dickinson did

Although Borschow

Dickinson continued

to

refused to

supply

Deseret

products to Borschow.

B. Proceedings Below
B. Proceedings Below

Borschow

for the District

brought an action

of Puerto

in federal

Rico on February

district court

6, 1990,

alleging

that

Becton

Dickinson's termination

distributorship

violated Law

threat to tie the

75

and

Borschow also alleged

and

restraint of

Federal

Borschow's "exclusive"

that

Becton

Deseret line to its syringe

Sherman Act.

UMECO in

of

jurisdiction

line violated the

a conspiracy with

trade and

was invoked

Dickinson's

on

Castillo

attempted monopolization.

the

basis of

federal

question and diversity of citizenship.

On September

24, 1990,

the

district court

permitted

discovery limited to the threshold issue as to whether Borschow's

distributorship

was

exclusive.

On

January

15, 1991,

Becton

Dickinson moved for summary judgment, asserting that taking these

facts

in the light most favorable to Plaintiff,

evade

the

effect of

its

written contract

Borschow cannot

providing

for non-

exclusivity.

If Borschow's contract was non-exclusive, according

-66

to Becton Dickinson,

In

addition,

Becton

the Law 75 claim fails as

Dickinson

extrinsic evidence of the

not be considered

argued

the

outline

was

contracting parties' intent that could

on summary judgment

parol evidence rule.

that

a matter of law.

because of Puerto

Rico's

The

issued a

the

motion was

report and

ground that

regarding whether

district

judge's

court

referred

to a

magistrate judge,

recommendation denying summary

the extrinsic

evidence

the agreement

(Acosta, J.)

recommendation

judgment on

raised issues

of fact

provided for exclusivity.

initially

without comment,

adopted

but

who

The

the magistrate

on

a motion

for

reconsideration, the court (Casellas, J.) granted partial summary

judgment

for

Rico's parol

Becton Dickinson.3

evidence rule

and that the contract

distributorship.

The court

held

that Puerto

barred consideration of

the outline

unambiguously provided for a non-exclusive

Borschow Hosp. & Medical Supplies, Inc.

__________________________________________

v.

C sar Castillo, Inc., 882 F. Supp. 236, 239-40 (D.P.R. 1995).

____________________

In

a subsequent

order, the

court granted partial

summary judgment

for

Becton

Dickinson on

evidence of

tying,

the antitrust

anticompetitive

claims

injury

dismissed the pendent state law claims.

or

due to

lack of

conspiracy

and

Borschow timely appealed

the judgment.

II. DISCUSSION
II. DISCUSSION

A. Standard of Review
A. Standard of Review

____________________

Judge

Acosta

took

senior

status

before

the

motion

for

reconsideration, and the case was reassigned to Judge Casellas.

-77

We review a district

de novo.
________

Werme
_____

The standard

is

court's grant of summary judgment

v. Merrill, 84
_______

F.3d 479, 482

is well-rehearsed and familiar.

appropriate

interrogatories,

when

and

'the

pleadings,

admissions

on

(1st Cir. 1996).

"Summary judgment

depositions, answers

file,

together

with

to

the

affidavits, if any, show that there is no genuine issue as to any

material fact and that

as a

matter of law.'"

F.3d

32, 36

the moving party is entitled

Barbour
_______

(1st Cir. 1995)

to judgment

v. Dynamics Research Corp., 63

________________________

(quoting Fed.

R. Civ.

cert. denied, __ U.S. __, 116 S. Ct. 914 (1996).

____________

P. 56(c)),

"In operation,

summary

judgment's role

pleadings

and assay

the

is

to pierce

parties' proof

whether trial is actually required."

the

boilerplate of

in order

the

to determine

Wynne v. Tufts Univ. School

_____
__________________

of Medicine, 976 F.2d 791, 794 (1st Cir. 1992), cert. denied, 507
___________
____________

U.S. 1030 (1993).

there

"To succeed, the moving party

must show that

is an absence of evidence to support the nonmoving party's

position."

Rogers v. Fair,
______
____

902 F.2d 140, 143

(1st Cir. 1990);

see also Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986).
________ _____________
_______

"Once

the

moving

party

motion for summary judgment, the

party, who 'may

pleading,

not rest on mere

but must set forth

has

properly

supported its

burden shifts to the non-moving

allegations or denials

specific facts showing

of his

there is a

genuine

Anderson
________

issue

for trial.'"

Barbour,
_______

v. Liberty Lobby, Inc., 477

_____________________

"There must be 'sufficient

for a jury to

63

F.3d at

U.S.

37 (quoting

242, 256

(1986)).

evidence favoring the nonmoving party

return a verdict for that party.

If the evidence

-88

is merely

colorable or

is not significantly

probative, summary

judgment

may be

granted.'"

Rogers, 902
______

F.2d at

143 (quoting

Anderson, 477 U.S. at 249-50) (citations and footnote in Anderson

________
________

omitted).

non-moving

We "view the facts in the light most

party,

party's favor."

drawing

all

reasonable

favorable to the

inferences

in that

Barbour, 63 F.3d at 36.

_______

B. The Law 75 Claim

B. The Law 75 Claim

"The

legislature

of Puerto

Rico

enacted

Law 75

to

protect distributors, agents, concessionaires and representatives

of

product

or

service

in

Puerto

Rico.

[M]ore

specifically, Law 75 was intended to protect dealers who built up

market,

from

suppliers

established clientele."

Ltd.,

825 F.2d 1, 2

who

wish

to

appropriate

their

Medina & Medina v. Country Pride Foods,

_______________
____________________

(1st Cir.

1987).

"Law 75

provides that,

____

notwithstanding the

reserving to the

existence in a dealer's contract of a clause

parties the unilateral

existing relationship,

indirectly

perform

relationship

or

any

no principal

act

refuse to

or grantor may

detrimental

renew

to

said contract

expiration, except for just cause."

v.

right to terminate

the

on

the

directly or

established

its normal

General Office Prods. Corp.

___________________________

Gussco Mfg. Inc., 666 F. Supp. 328, 328 (D.P.R. 1987) (citing
________________

10 L.P.R.A.

278(a)).

Law 75 has proved fertile ground for litigation, and we

recently

have

had

occasion

to

circumstances analogous to those

consider

its

presented here.

exclusive distributors are entitled

application

to

Although "non-

to protection under Law 75,"

-99

Vulcan Tools of Puerto Rico v. Makita U.S.A., Inc., 23 F.3d

___________________________
___________________

564,

569 (1st Cir. 1994), "[i]t is equally true . . . that Law 75 does

not operate to convert non-exclusive

distribution contracts into

exclusive distribution

Id. (citing Gussco,

___
______

Supp. at

331).

As

contracts."

we said

in Vulcan Tools,
____________

666 F.

"the 'established

relationship'

distribution

against

between dealer

agreement, and

detriments to

and

principal is

therefore

the

bounded by

Act

contractually acquired

only

the

protects

rights."

Id. at
___

569.

This

(now

Becton

exclusive

prevail

case turns

Dickinson)

If

Borschow and

for

the

Parke Davis

non-exclusive

former,

Borschow

or

cannot

on its claim that Law 75 prohibits Becton Dickinson from

Vulcan Tools,
____________

where

contracted

distributorship.

supplying Deseret

from

on whether

medical products

23 F.3d at

569 (Law 75

establishing additional

non-exclusive

existing distributor

to other distributors.

distributorships

distributor was

suffered

did not prevent

in

economic harm

as

supplier

Puerto

already operating

See
___

Rico

even if

result);

Nike
____

Int'l Ltd. v. Athletic Sales, Inc., 689 F.

___________
_____________________

(D.P.R.

1988) (where

distributor provided

distributor failed to

Supp. 1235, 1238-39

distributorship contract between

for notice of renewal

provide such

Nike and

from distributor and

notice, Law 75

did not

bar

termination of distributorship contract).

As a civil law jurisdiction, Puerto Rico eschews common

law principles of

civil

code

contract interpretation

derived from

Spanish law.

-1010

in favor

See Guevara
___ _______

of its

own

v. Dorsey
______

Labs., Div. of Sandoz, Inc., 845 F.2d

____________________________

364, 366 (1st Cir.

1988)

("The Supreme Court of Puerto Rico has made clear that the common

law of the United States is not controlling

the

turn

civil law system."); Gussco, 666 F.

______

when filling gaps in

Supp. at 332.

Thus, we

to Civil Code Article 1233, which "determines the manner in

which courts should interpret

meaning

of

their terms."

Fenner & Smith, 839 F.

_______________

contracts under dispute as to

Hopgood v.
_______

Supp. 98,

F.3d 1089 (1st Cir. 1994) (table).

If

the terms

of

Merrill Lynch, Pierce,

_______________________

104 (D.P.R. 1993),

aff'd, 36
_____

Article 1233 provides:

a contract

the

are clear

and

leave no

doubt as

to the intentions

of the

contracting parties, the literal sense of its

stipulations shall be observed.

If the

words should

appear contrary

to the

evident intention of the contracting parties,

the intention shall prevail.

31 L.P.R.A.

3471 (1991).

"Under Puerto Rican law, an agreement

is 'clear' when it can 'be understood in one sense alone, without

leaving

any

room

for

interpretation. . . .'"

de Puerto Rico,
______________

48 F.3d

doubt, controversies

or

difference

of

Executive Leasing Corp. v. Banco Popular

_______________________
_____________

66, 69 (1st

Cir.) (quoting Catullo

_______

v.

Metzner, 834 F.2d 1075, 1079 (1st Cir. 1987)) (internal quotation
_______

marks omitted), cert. denied, __ U.S. __, 116

____________

S. Ct. 171 (1995);

see also Heirs of Ram rez v. Superior Court, 81

________ _________________
______________

P.R.R. 347, 351

(1959).

Citing the

Puerto Rico

Supreme Court in

Marina Ind.,
____________

Inc. v. Brown Boveri Corp., 114 P.R. Dec. 64, 72 (1983) (official
____
__________________

translation), several courts have

"strict in

its mandate

interpreted Article 1233 to be

that courts

should enforce the

literal

-1111

sense

of

written

contract,

unless

the

words

are somehow

contrary to the intent of the parties."

104;

Hopgood, 839 F. Supp. at

_______

see also Vulcan Tools, 23 F.3d at

________ _____________

leaves no

doubt as

to the

intention

567 ("When an agreement

of the

parties, a

court

should not look beyond the literal terms of the contract.").

This

interpretation of Article 1233 is complemented by

Puerto Rico's parol evidence

rule, P.R. Laws Ann. tit.

IV, R. 69(B) (1983) ("Rule 69(B)"), which provides:

When in an oral
public

or

conditions

or written agreement, either

private,
constituting

intention of the
such
and

parties,

or

the

terms

the true

and

and final

parties have been included,

agreement shall be
therefore,

all

there

successors

evidence extrinsic

to

deemed as complete,
can

be
in

between

the

interest,

no

the contents

of

the

imperfection of

the

same, except in the following cases:

(1) Where a

mistake or

agreement is put in issue by the pleadings;

(2)

Where the validity

of the

agreement is

32, App.

the fact in dispute.

This rule does not exclude other evidence
the circumstances under
was made

or to which

the situation of
instrument

or

which the

that

agreement

it is related

the subject
of the

of

such as

matter of
parties,

the
or to

establish illegality or fraud.

We

have interpreted

this rule

in tandem

with Article

1233 to

require courts "to ignore [parol] evidence 'when the agreement

. . .

is clear and unambiguous.'"

Bank, 979 F.2d

____

890, 894

Mercado-Garc a
______________

(1st Cir. 1992)

v. Ponce Fed.
__________

(quoting Catullo,
_______

834

these

bar

F.2d at 1079).

Recently,

we

have

held

that

consideration of

extrinsic evidence to vary

and

terms of

unambiguous

contract.

See
___

provisions

the express, clear,

Executive Leasing
_________________

-1212

Corp., 48
_____

F.3d at

69-70

(refusing to

regarding implied loan term

with

did

not include restriction but

include clear integration clause);

(where

contractual

distributorship was clear and

evidence

barring leasing company from dealing

other banks where contract did

564-68

consider parol

term

Vulcan Tools, 23 F.3d at

____________

providing

for "non-exclusive"

unambiguous, there was no need

to

consider

extrinsic

distributors even

also
____

Hopgood,
_______

evidence

of

promise

absent contractual

839

F.

Supp.

at

"indefinite"

used

in

employment

employment at

will and

refusing to

to

limit

number

integration clause);

103-05

(holding

contract

clearly

consider parol

that

of

see
___

term

signified

evidence of

implied guarantee of three-year minimum employment).

This line of cases

of

Borschow's appeal.

The

unambiguously gives Borschow

effectively parries the main thrust

Distribution Agreement

a "non-exclusive"

The integration clause, specifying

clearly and

distributorship.

that the terms and provisions

of this Distribution Agreement constitute

the "entire agreement"

and "the final expression of intent," nullifies any other oral or

written understandings

reached between the

parties.

Crediting

Mr. Borschow's

testimony

Vallance promising

summary judgment,

inoperative

any

that

he

an exclusive

we hold

received

the

outline

distributorship, as we

that the integration

such side-agreement,

and

we

from

must on

clause rendered

are barred

from

considering the extrinsic evidence by Rule 69(B).

Borschow attempts

precedent

by

arguing

that

to evade the effect

the

-1313

entire

of this settled

agreement,

properly

construed,

Outline.

includes

Because

both

the Distribution

the documents

Agreement

contain mutually

and

the

inconsistent

terms, Borschow contends that Article 1233 of Puerto Rico's Civil

Code permits

the

liberal consideration

parties' intent to

extent, Borschow's

some support

of extrinsic evidence

resolve contractual ambiguity.

reliance on

this Civil Code

in Puerto Rico case

law.

The

Puerto Rico Supreme

The intention of the parties is the essential

scope
of

in the

Civil Code to

of contractual obligations.
intention

is

interpretation

of

so

fix the
This test

essential

contracts

in

the

that the

Code

proclaims its supremacy in providing that the

evident

intention

of

the

To some

principle finds

Court has held that:

test provided

as to

parties

shall

prevail over the words, even where the latter

would appear contrary to

the intention . . .

Merle v. West Bend, 97 P.R.R.

_____
__________

court subsequently

392, 399 (1969).

clarified that

However,

"[t]he strict mandate

that

of the

cited art. 1233 obliges us to abide by the literal meaning of the

terms of the contract when, as in the present case, they leave no

doubt

as to the

Ind. Inc. v.
__________

intention of

the contracting

Brown Boveri Corp.,

____________________

114

P.R.

parties." Marina
______

Dec.

64

(1983)

(official translation).

In rejecting essentially the

Borschow, we applied this principle in

The

same argument now made by

Executive Leasing Corp.:

_______________________

plaintiffs concede the loan agreement is

clear.

They argue, however, that the written

agreement
agreement,

was
and

not
that

in

fact
we

must

the

entire
consider

extrinsic
with

evidence

respect to

of

the parties'

integration. .

. .

intent
Yet to

consider extrinsic evidence at all, the court

-1414

must

first find

agreement

the relevant

unclear.

That

being met, the district court

terms of

the

requirement

not

correctly went

no further.

48

F.3d at 69 (excluding extrinsic evidence of exclusive dealing

condition and

of "actual practice" of

parties); accord Hopgood,

______ _______

839 F. Supp.

at 106

(explaining that Marina

______

and Merle
_____

support

principle that under Article 1233 the clear terms of the contract

are

the "embodiment of the indisputable intent of the parties as

they entered into the contract").

For the third time,

we

mean:

extrinsic

we mean what we say,

evidence

of

the

and say what

parties'

intent

is

inadmissible in the face of a clear and unambiguous contract term

under Puerto

Rico Law.

non-exclusive as

Because Borschow's

a matter

of law,

distributorship was

the district

court properly

granted summary judgment for Appellees on the Law 75 claim.4

C. Antitrust Claim -- Tying Arrangement

C. Antitrust Claim -- Tying Arrangement

Asserting

Sherman Act,

a per se
_______

Borschow

violation of

Section One

of the

contends that Becton Dickinson threatened

to withhold sale of its patented Deseret line of medical products

(the tying product) unless

Borschow dropped the Monoject product

____________________

While the Puerto

Rico parol evidence

rule permits extrinsic

evidence to establish fraud, Borschow does not allege that it was

fraudulently
Nor

is

Borschow

induced
claim

contends

Dickinson should be

of

into signing
equitable

for the

the

estoppel

first

estopped from

time

Distribution Agreement.
properly
on appeal

denying the

before
that

us.

Becton

existence of

an

exclusive contract because of the conduct of its agent, Vallance.

As this

argument was not

made below, it

Leasing Corp., 48 F.3d at 70.

_____________

-1515

is waived.

Executive
_________

and

carried instead

Contending

its own syringe

that this is "the case of

Becton Dickinson

argues that a

line (the

the tie that didn't bind,"

threat alone is

constitute an illegal tying arrangement.

"Section 1 of the Sherman

'tying'

the sale

of

one product

tied product).5

insufficient to

We agree.

Act prohibits a seller

to the

purchase of

from

a second

product if the seller thereby avoids competition on the merits of

the 'tied' product.

restraint

of

trade

See 15 U.S.C.
___

or

commerce

1 ('Every contract . .

is

declared

. in

to

be

illegal.')"

Data General Corp. v. Grumman Systems Support Corp.,

__________________
_____________________________

36 F.3d 1147, 1178 (1st Cir. 1994).

"There are essentially four

elements to

(1) the tying and

products

a per se
______

are actually

agreement or

tie; (3)

two distinct

condition, express

the entity

power in the market

choices

tying claim:

with

accused of

products; (2)

or implied, that

tying

respect

to the

tied

there

is an

establishes a

has sufficient

for the tying product to

the tied

economic

distort consumers'

product;

and

(4) the

tie

forecloses a substantial amount of commerce in the market for the

tied product."

Id. at 1178-79.6
___

____________________

See Amended

Verified Complaint

asserts a

claim under

separately

address.

England, Inc.,

858

the Clayton

28-29.
Act,

3,

See Grappone , Inc.

___ _________________
F.2d

792, 793

(1988)

Plaintiff also
that we

v.

need not

Subaru of New
______________

(pointing

out

that

_____________
essential

elements of

alleged violations of
addition,

unlawful tying
Sherman Act

Borschow conceded

at oral

arrangement are

same for

or Clayton Act

3).

argument that

In

our holding

that the Distribution Agreement was non-exclusive would foreclose

relief on all of its antitrust claims except its tying claim.

Borschow

tying

does not articulate

liability.

Although

contains conclusory allegations

a "rule

the

amended

of reason"

theory of

verified

complaint

that Becton Dickinson's

conduct

-1616

The fatal flaw in Borschow's tying claim is that Becton

Dickinson never withheld its Deseret line.

adduced evidence

of various threats

Although Borschow has

by Becton Dickinson,

it is

undisputed that these threats were not carried out.

Permitted to

carry both the Deseret

Borschow was

never injured

line and the Monoject line,

by the threat.

See
___

Greater Lowell Board of Realtors,

_________________________________

Wells Real Estate, Inc.

________________________

850 F.2d 803,

v.

814 (1st Cir.)

(holding that plaintiff must have been injured by anticompetitive

act to

have standing

under antitrust

laws), cert. denied, 488

_____________

U.S. 955 (1988).

As a result, the second

key element discussed above --

evidence of a tie -- is missing:

[T]he essential characteristic of

tying

arrangement

exploitation

of its

lies

in

an invalid

the

seller's

control over

the tying

product to force the buyer into

of a

tied product that the

the purchase

buyer either did

not want

at all, or might

have preferred to

purchase

elsewhere on different terms.

When

such "forcing" is present, competition on the

merits

in the

market for

the tied

item is

restrained and the Sherman Act is violated.

Jefferson Parish Hosp. Dist. No. 2

_____________________________________

(1984);

see also
________

v.

Hyde, 466
____

T. Harris Young & Assoc., Inc.

________________________________

U.S.

2, 12

v. Marquette
_________

____________________

generally

had an

adverse

effect on

competition,

there is

no

evidence in the record to support the allegation that the threats

of tying

had such an adverse

providing further

impact, or to provide

discovery pursuant to

a basis for

Fed. R. Civ.

P. 56(f).

See Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 29-31
___ __________________________________
____
(1984)

(noting that

plaintiff
adverse

must prove
effect

on

in absence of
that

per se
______

liability, antitrust

defendant's conduct

had an

"actual

competition"); R.W. International Corp. v.

__________________________

Welch Food, Inc., 13 F.3d 478, 487-88 (1st Cir. 1994) (rejecting
_________________
request for
antitrust

further discovery despite conclusory

injury

where

plaintiff

distributors

allegations of
were

in

same

position as defendant to ascertain effect of conduct at issue).

-1717

Electronics, Inc., 931 F.2d 816, 822-23 (11th Cir.) ("[F]or a tie
_________________

to

exist a seller must withhold product

selects product B.

it necessary

A unless the buyer also

Only after the existence of a tie is shown is

to determine

whether an illegal

tying arrangement

exists.") (footnote omitted), cert. denied, 502 U.S. 1013 (1991);

____________

CIA Petrolera Caribe, Inc. v. Avis Rental Car Corp., 576 F. Supp.
__________________________
_____________________

1011, 1016 (D.P.R.

1983) ("Coercion is

any tying arrangement,

take the unwanted

an essential element

i.e., forcing the purchaser or

tied product along with

of

lessor to

the tying product."),

aff'd, 735 F.2d 636 (1st Cir. 1984).

_____

no tie.

Where a tying

product has not been

withheld, there is

"There is no

tie for any antitrust

purpose unless the

defendant

practically

improperly

imposes

require buyers to

want the first one."

conditions

take the

that

explicitly

second product

or

if they

10 Phillip E. Areeda et al., Antitrust Law:

______________

An Analysis of Antitrust Principles and their Application

______________________________________________________________

1752b, at

280 (1996).

Thus we

hold that there

is no

genuine

issue of material fact with respect to Borschow's tying claim.7

III.
III.

For the foregoing

CONCLUSION
CONCLUSION

reasons, the district

court's grant

of summary judgment is AFFIRMED.

AFFIRMED

____________________

This holding

Borschow contends
by

also disposes

of Borschow's

that the district court

refusing to allow further

discovery.

discovery claim.

abused its discretion

However,

no amount of

discovery would uncover evidence of a non-existent tie.

-1818